Sacred Cows and the Dairy Tax

Cowed by politics?

Name a product that is found in the refrigerators of virtually every home in Canada and for which we each pay too much? Yes, milk, good guess.

The average Canadian family pays up to $1.44 a litre more for milk than their American counterparts, up to $300 more per year, even though the dollars are roughly at par today. That amount does not count the additional price of cheese, butter, ice cream, or eggs. Yes, eggs too and chickens!
What's going on?
The irony here is that most Canadians are typically so disconnected from politics they have no clue they are being robbed BECAUSE of their own ignorance and misplaced trust. The scheme called "supply management" was cooked up more than 40 years ago by farmers in cahoots with politicians. The misplaced trust is in the politicians.
Everyone knows what is meant by supply and demand, that is how economics is supposed to work. Too much supply, prices should drop, too much demand, prices should rise. Price has meaning and it regulates supply. But what if supply is regulated by a powerful lobby group, that uses its monopoly powers to exclude competition, and set its own prices by controlling how much supply is produced. That is supply management. Here is another explanation from a recent article.  

"What is “supply management”? It is a government scheme to raise agricultural prices and farm incomes by a strictly enforced system of licences and quotas that controls who may produce a handful of important commodities, such as milk, cheese, poultry and eggs, and how much they may produce. High tariffs also are imposed on imports of these commodities. By thus controlling both domestic and foreign supply, supply management increases the price of covered commodities. Thus do we repel potential trade partners who would like to sell those commodities to Canadians at competitive prices." 

This issue is a sacred cow amongst politicians and the extra cost borne by all Canadians amounts to a hidden tax adding even more to the cost of living. (ibid)

"Do supply management’s domestic benefits outweigh its obstruction of trade?
On the contrary, its domestic costs are high, and are borne disproportionately by low-income Canadians.
The lower a household’s income, the higher the share of their income that goes to food. In fact, lower income households spend nearly a quarter of their income on food compared to middle- and upper-income Canadians, who normally spend 5% to 10% of their income on that category.
Just as supply management disproportionately burdens lower-income families, eliminating it and lowering prices for basic food goods disproportionately benefits lower-income families. They would immediately have more disposable income for other necessities, thus increasing their standard of living."

So much for the sham of politicians helping the poor, they just help themselves.

All of the major political parties favour supply management, why not, the parties are kept happy by generous donations from Canadian Dairy Farmers due to the unwarranted profits made through supply management.

Supply management has come to the fore in recent weeks because of two different papers published here and here, as well as recent trade negotiations.

Canada is a trading nation, however, the high tariffs imposed by supply management act as a barrier to this trade as spelled out here:

"That’s exactly why Canada agonized in Los Cabos over U.S. president Barack Obama’s invitation to join negotiations for the Trans-Pacific Partnership (TPP). Our system of supply management is not acceptable to many of that trade club’s members; and while we may now be at the negotiating table, we are not in the TPP yet.
Canada is a trading nation, and joining the TPP would give us access to the fastest growing markets in the global economy. The TPP originated in 2005 with Brunei, Singapore, New Zealand and Chile. Australia, Peru, Vietnam, Malaysia, the United States, Japan and others including China may join in due course. It may well be one of the most important trade blocs in the 21st Century.
The sheer size of the countries involved represents a real opportunity for Canada to expand its opportunities for trade. If all the potential members join the TPP, it will represent $35.2-trillion in GDP and 2.7 billion people." 

The National Post ends its recent editorial on this issue with:

"...both New Zealand and Australia offer models of how Canada could manage a phased transition to a free-market dairy industry. In both of those countries, consumers and producers alike have prospered, with lower prices and higher productivity, just as economists would expect.
This is what the future of our quota-controlled agricultural industries should look like. In furtherance of that vision, we urge that the two reports published this week become required reading in Ottawa. Stephen Harper's government already has proven its free-market bona fides by removing the monopsony power of the Wheat Board. Many other agricultural sectors cry out for similar reform."

Climate Correction

Exaggeration or just wrong? 

A friend alerted me to an article that appeared in The Telegraph published in the UK this week. The article by Professor Fritz Vahrenholt, who is one of the fathers of Germany's environmental movement, is based on his presentation to the 3rd Global Warming Policy Foundation Annual Lecture at the Royal Society in London, UK.

In the article Vahrenholt essentially recants his belief that the burning of fossil fuels and the resulting release of carbon dioxide into the atmosphere is the primary driver of global warming/climate change. Of course that is the theory espoused by the Intergovernmental Panel on Climate Change (IPCC) and numerous environmentalists around the world.
In the article here, Vahrenholt uses historical data which shows that dramatic shifts in climate occurred in the absence of carbon dioxide fluctuations (no kidding) which Vahrenholt now attributes to the Sun. Imagine that? Here is a quote from the article:

"Based on climate reconstructions from North Atlantic deep-sea sediment cores, Professor Gerard Bond discovered that the millennial-scale climate cycles ran largely parallel to solar cycles, including the Eddy Cycle which is – guess what – 1,000 years long. So it is really the Sun that shaped the temperature roller-coaster of the past 10,000 years."

Vahrenholt goes on to say:

"... the IPCC's current climate models cannot explain the climate history of the past 10,000 years. But if these models fail so dramatically in the past, how can they help to predict the future?"

Indeed. 

Vahrenholt even suggests that a model proposed by Danish physicist Henrik Svensmark (which has received very little public exposure) might be promising. I pointed out this hypothesis about a year ago here and here.

Given all of this and the data that shows there is a lack of correlation of temperature rise with CO2 increase Vahrenholt says:

"In the UK and Germany, (and I will add McGuinty's Ontario too) for example, power-station closures and huge expenditure for backup of volatile wind or solar energy or harmful ethanol production will raise energy prices massively and even threaten power cuts: the economic cost will be crippling, all driven by fear." .....and that there is no need for "....the massive (energy) poverty currently planned."

So what's going on here, is this the beginning of the end of the carbon dioxide theory, or should I say hypothesis of climate change? Vahrenholt seems to hedge, he thinks its time for "rational decarbonizing," whatever that means. He has too many friends in the system to just flush them away, so he calls for more research (keeps his friends happy) and all the usual central planning but with a greater variety of energy sources including fossil fuels.

Vahrenholt is no libertarian, but he does deserve credit for speaking out against the current orthodoxy.

 

Political Favouritism and CBC Radio Current Events

My previous post was about the Rio+20 Conference which was promoted on CBC Radio's Quirks and Quarks June 16, 2012.

I admit to being a long time listener to this program, way back to the days when David Suzuki was the host. The program often carries good science content, and interviews with people not usually heard on radio or TV for that matter. I listen because I have an interest in science, real science.

Over the years, most of the hosts, like Suzuki, have presented heavily biased stories on sustainable development, green energy infrastructure, and anthropogenic global warming etc. I say biased because each of those issues has become highly politicized, to the point where its difficult to separate the science story from the politics associated with it. The June 16th story is a perfect example.

In 1992 during the original Rio Conference, Elizabeth May was an environmental lawyer working on behalf of the Canadian delegation and the Mulroney government of the day. On June 16th as Leader of the Green Party and a sitting MP in Canada's House of Commons, May was allowed to speak on Quirks and Quarks (here is the podcast - she is the first 20 minutes or so).

If you listen to the podcast you will no doubt be able to detect her bias against the current Harper government and her advocacy for Rio+20.

I'm certainly not a friend of the Harper government, but there is an issue of fairness here. The CBC is heavily funded ($1.2 billion) by taxpayers, so why is she allowed to speak on public radio on a political issue without any corresponding representation from another political party or better an expert that holds an opinion different for Ms. May?

Furthermore, she speaks about anthropogenic global warming(AGW)/climate change as if it were a foregone conclusion. A theory so widely accepted as to be gospel truth. This irks me about CBC too. The fact is, AGW is at best an hypothesis and one that seems to be inadequate as an explanation for any perceived climate change.

Finally I will add , that this incident does not surprise me at all, but I think redress is warranted.

Rio+20 - Rio '92 Revisited - Global (guilt trip) Agenda

"We are at an historic turning point, communism has collapsed, the entire world conceives of itself as a global civilization, and the community of nations can now envision the possibility of a global agenda. But the only organizing principle for this global agenda is the effort to save the earth's environment. This must be the new central principle giving coherence to our efforts to work together. And the Earth's Summit is the designated time and place for this new agreement to congeal. This is a turning point we must break through to a new way of thinking about our relationship to the earth. We are not entitled to exploit it with impunity with no concern for the integrity of the ecological system. Its just unforgivable if we allow the selfish impulses of the short term considerations of this moment to win out over the wisdom and the mandate of history to act."

That is a direct quote from the then former American Senator Al Gore as he was interviewed on the CBC Radio Show Quirks and Quarks in 1992 before the Rio Earth Summit twenty years ago this past week (you may hear the quote if you listen to the podcast here).

Its pretty clear to me what he was thinking, here was a chance for governments around the world to join together and defeat the newest boogie-man. Now that the cold-war was over and the evil empire was defeated, it was time to turn to the real enemy, and it was us, you and me. What better way to defeat "us" than by forming a supra-governmental organization under the auspices of the United Nations, that benevolent protector of all that is right and good with the world?

The Rio Earth Summit was an historic attempt to grab power, without a shot being fired anywhere. The governments and citizens of earth were about to have a massive guilt trip dumped onto them by the self-appointed protectors of the planet. The global organizing agenda, as Gore put it, is clear: "We are not entitled to exploit it (Earth) with impunity with no concern for the integrity of the ecological system." How dare we lowly humans aspire to live in comfort at the expense of any planetary resources? What could we be thinking? Woe to us for disturbing the habitat of the three-spined stickleback, the Northern Spotted Owl or the Frankston spider orchid, in a selfish attempt to provide food and shelter to mere humans. "Its just unforgivable if we allow the selfish impulses of the short term considerations," like harvesting logs for building or eating perhaps. How dare we?

The Rio Summit in 1992 promoted sustainable developement. I have nothing against that concept in general, it's eminently sensible. Owners who would destroy their very means of earning a living are just plain stupid. So, overfishing or over harvesting a renewable resource, just makes no sense. Notice the key word "owners," when ownership is not assigned or left to the commons, thats when the trouble begins. Today my interpretation of "sustainable" in the current enviro-babble includes ideas like, stagnant, no-growth, heavily regulated, uncompetitive, subsidized and top down. Nothing to do with ownership and more to do with the favourite new buzzword "stewardship," which comes complete with the guilt trip and none of the benefits of ownership. 

Rio's successors have morphed into conferences against climate change, as if we humans controlled climate, more powerful than the Sun are we. A succession of meetings and treaties over the years backed by questionable data, produced by self-serving researchers, under the direction of the IPCC has made everyone guilty of tromping their filthy carbon footprints on everything. We are guilty of using fire for heat, light and to drive our machines. We are guilty of contravening the questionable hypothesis of anthropogenic global warming (AGW). By merely breathing, we, you and I, add to the carbon burden of the planet's atmosphere, adding, by the way the one essential gas of photosynthesis, carbon dioxide, from which all earthly organic food originates. Do you aspire to a low ecological footprint? Then the poverty of Sierra Leone is for you (see the graph above), or if you want to be in the green zone of sustainability and human welfare, then the wealth and freedom of Cuba beckons.

Rio+20 convenes this week, committed to continue the fraud of sustainable development. While all the major leaders of the world were in Rio twenty years ago, none are coming to Rio+20, things have changed. Much to the chagrin of enviro-statists like George Monbiot who warns that its "make-or-break" time. So deluded are he and his colleagues, that they fail to grasp that the no-growth scenario is coming fast, as nation states crumble under massive debt-loads and unfundable liabilities, and depressed economies become the norm. Be careful what you wish for George.

The only good news is that people are slightly more skeptical about AGW, and the ability of governments to solve anything. One can only hope.