Saturday, May 28, 2011

Giving back or just giving - The Morality of Profit

This is a picture of Bill and Melinda Gates, among the most generous people in the world. Bill Gates is often quoted about his generosity as saying he is just "giving back." The video below from the Atlas Network points out that when rich people say they are giving back, most of them like Gates, are doing no such thing. In fact they are mis-speaking at the best, or being falsely modest at worst. At any rate it is a distortion of the truth. Watch the argument:





Friday, May 27, 2011

Bad choices made right

At our regularly scheduled pub night recently, a libertarian friend posed this question to me: "Why are you a libertarian?" I had to think for a moment then I blurted out something about having choices. Deep thoughts aren't generated at pub nights, so I was not prepared for the question and my answer was poor. My friend followed with something like this:
"So, if libertarians are all about choice but want to get rid of government health care, and allow people to seek private insurers or have no insurance at all, then libertarians are restricting choice by eliminating the government option and effectively forcing people to have private health care or none at all. What kind of choice is that?" Again I did not immediately grasp the fallacy in that thinking, not until afterward, and that's why I writing about it here. So here is a more thoughtful answer to both of the above questions.

Suppose the government was in the food production industry. Food is essential to life, often health care is too, but overall it can be argued that food is more important, most of the time to most people, I hope you agree.
Governments in this part of the world are not involved with food production (not directly) nor should they be. Food is produced by efficient producers, for profit, and marketed all over the world. Food moves rapidly and efficiently across borders without much government fuss (except for the "marketing boards" in Canada, but that is another story). Food scarcity is controlled by price and so is food abundance, supply and demand rule most of the time. I have lived here in the Greater Toronto area virtually my entire life, and I have never known there to be a shortage of food. If you can't find red apples there are green ones, there are always choices that generally fit everyones budget. It's amazing, never a shortage, always more than enough in stores, and yet profits are to be made, and wealth is produced. So much wealth, and so much food in fact, that even the poor are able find enough through private charity and food banks.

In Canada, and much of the Western world, governments are involved in health care. A true libertarian thinker would say that they should not be. A hypothetical libertarian government by eliminating the option for government regulated health care, is not removing a choice, rather, that libertarian government is righting a wrong. The government should not be doing that, should not be involved in health care. Unlike food production, where shortages are controlled by price and choice, supply and demand, ALL Canadians in all provinces know too well that there are shortages in health care, because scarcity is not controlled by price, it is controlled by government edict. All Canadians are familiar with the term "wait-time" when it is used to reference health care. But did you ever have to wait to buy bananas? Maybe one store had sold out, but in the larger centres there are always bananas nearby! Rarely a shortage, even in the depths of a Canadian winter.
But health care? Now you're talking shortages. Can't find a family doctor? Have you ever waited in a hospital emergency room for yourself or a loved one and been "triaged" almost to death? Have you ever been in a doctor's overbooked waiting room, waiting and waiting and waiting? Have you or a loved one ever had to endure a long wait to get much needed treatment for any sort of ailment, surgery or otherwise? I'm certain most Canadians would answer in the affirmative to one or more of those questions. It's the Canadian way of life and death. Yet for some reason Canadians are proud to say that: "free health care" is what separates us from our less caring American cousins to the South. This is a fallacy that needs to be examined on several levels, but not here.
The point of course is that food production and distribution is relatively unregulated, driven by the profit motive and yet it fulfills the needs of most Canadians most of the time. Health care on the other hand, is almost totally regulated, removed from the profit motive because it is somehow unseemly, yet it rarely ever fulfils the needs of its customers at any time. The chart in the corner may be dated, but the message is the same today.
What about the poor, what about catastrophic situations? These are issues that can be accommodated, even in a competitive system. While I don't have all the answers, I do know that what we have now can be made much better with choice. A libertarian government would strive for choice, but there are some choices that are just plain wrong.  

Thursday, May 26, 2011

HBO's "Too Big to Fail" - fails

Paul Giamatti as Ben Bernanke
"The Ben Bernank"
Some of you will smile when I refer to "The Ben Bernank." It's a bit of an inside joke that I won't bother explaining here, but if you have seen some of my previous postings featuring Mr. Tugwit's cartoon bears you will understand.
Anyway Paul Giamatti (left) plays Ben Bernanke (right) in HBO's  rendition of "Too Big to Fail" based on Andrew Ross Sorkin's best seller of the same name. I did not read the book, so I don't know how the movie compares, but Giamatti's role in the movie is not huge. He just seems to be there at critical moments in the movie to move the plot along, and save the world from something worse (as he says) than the Great Depression. Apparently Bernanke is an expert on the causes of the Great Depression so it was opportune for him to be in office pulling the "right strings" during the economic turmoil that occurred during 2008. (that is what we are told)
The movie illustrates the very fuzzy separation between the government players and the private bankers. So of course the underlying question throughout the movie is how closely the events depicted in the movie match with reality? I suspect it is close, but of course only the real players know for sure. The relationship between governments (not just American) and the banks should be enough to make everyone watching cringe, though I doubt they will.
A few things about the movie are clear, mainly that its complicated. The actors do a good job of pretending to understand what's going on, at least it looks like it. Maybe that is just the good screenplay writing (Peter Gould and Sorkin). There is a point in the movie about an hour in, when one of the characters explains what is going on indirectly, and believe me this movie needs explaining. I'm not saying it was badly done, quite the contrary, I thought they did an admirable job (though my wife thought it was boring).
The biggest problem with the movie (for me) has nothing to do with the acting, directing, casting or anything to do with its production. The movie comes to a resolution when the American government effectively nationalizes AIG and the Congress finally passes the TARP bill giving money to banks that didn't even need it. When this happens you almost expect to see the Henry Paulson (William Hurt) character and Bernanke slapping their hands together in satisfaction - job well done. The cavalry came to the rescue and everything has been fixed! That is the problem with the movie. It perpetuates the lie that an unimaginably complex creature like "the economy" can be fully understood and manipulated by a few people in a back room. It hasn't even been three years since the mess appeared, but the impression the movie leaves is things are back to normal. The Market is behaving like things are good, and all has been appropriately controlled. But if it is true, as I suspect it is, this economic repair is like the bubble gum in the cracked dam. We are not done yet.



Monday, May 23, 2011

Firecracker Day or British Heritage Day

When I was a child growing up in Toronto we called this holiday we are celebrating today, (Victoria Day) "Firecracker Day." It was our annual excuse to buy firecrackers (much easier to get in those days) at the local variety store, and spend the day getting into all kinds of mischief, like blowing up tulip blooms with  small firecrackers. I'm sure that's distressing to any gardeners out there, but the unfortunate and numerous tulips provided us with hours of entertainment.
It was a day off school and off work for most, because our true-blue Ontario stat-laws meant business was at a standstill, or else. Things are still shut pretty tight around here even in 2011. But that is another posting.
Even as a child I knew that celebrating the birthday of a dead monarch was a dumb idea, except for the fact there was no school. It still is a dumb idea, but rather that eliminating the holiday why not change the rationale behind it?
We in Canada owe our British forebears a debt of gratitude, not for the old queen or the present one, but for the rules, laws, and practices that we use to this day to govern ourselves. Canada is as successful as it is, because of the British idea of liberty from Magna-Carta to the Westminster System. While these facts may be widely known, they are not really understood by many Canadians, who have a very rudimentary idea of the concept of liberty, and somehow think that it is an American idea. Of course the Americans owe to Britain that same debt of gratitude because they are after-all our cousins.
Anyway, just a suggestion, change the name of the holiday to British Heritage Day, or Westminster Day or just keep Victoria Day. What really needs to change is what we are celebrating, not a birthday, but a way of living in liberty.