February 3, 2012
This week in Guild Wars 2
My weekly column on news, commentary, podcasts, and videos from the Guild Wars 2 world is now up at GuildMag.com.
The end of London’s diesel locomotive plant
I’ve updated my earlier post on the labour dispute at London’s EMC plant now that the current owners have announced the closure of the facility.
Paul Wells: Harper and the Tories acted like “trust fund kids”
An interesting column at Maclean’s this week, where Paul Wells recasts Stephen Harper’s recent speech at Davos as autobiographical confession:
This passage should be read as thinly veiled autobiography and confession. This week a former senior public servant told me that when the Conservatives came to power in 2006, they inherited structural surpluses, booming oil prices and shrinking public debt, and they acted the way trust-fund kids do. “These were like kids in a candy store who had all this allowance. ‘Wow, we can do all this stuff?’ ”
But don’t take my nameless source’s name for it. Take Jim Flaherty’s. His first budget speech, in 2006, carried the title “Focusing on Priorities.” And what did he describe as priorities? In order: “Providing immediate and substantial tax relief,” he said. “Encouraging the skilled trades.” “Families and communities.” “Investing in infrastructure.” “Security.” “Accountability.” “Expenditure management.” “Restoring fiscal balance for our Canadian federation.” And right down there at the bottom, “prosperity.” So you can’t say it wasn’t the No. 1 priority. It’s right there in ninth place.
In Flaherty’s 2007 budget speech, the word “growth” appeared once.
But sometimes the world changes and the trust fund goes bust. For Harper, that happened in the first week of December 2008, when he had to fight like a street gang to keep the job he thought he’d just been re-elected to. So much changed after that. He won in 2011 by running on the economy after years of running away from it. And now here he was in Davos to tell everyone about “the good, growth-oriented policies. The right, often tough choices.”
Flaherty is my local MP, so I’m well acquainted with his habit of talking like a conservative, but running the finance ministry like one of Pierre Trudeau’s acolytes. It must really be galling him that he has to act like a grown-up for the coming budget. As I’ve said more than once, if you factor out the military and foreign affairs aspects, there were few things that Harper did that wouldn’t have been done just as readily by Paul Martin. And I mean Martin as PM, not in his more successful guise as minister of finance.
Lemonade stand economics and government accounting
An amusing illustration of the differences between real world profit and loss and the government’s accounting methods:
Parents, wanting to encourage the idea that working and making money is a good idea, drive around to buy the lemon, sugar, designer bottled water, cups, spoons, napkins, a sign or two, and probably a paper table cloth.
Aside from time and gas, the outing adds up to something north of $10. At the opening of business the next day, the kids find business is slow to nonexistent at $1 per cup. So, they start to learn about market demand and find that business becomes so brisk at only 10 cents per cup that they are sold out by noon, having served 70 cups of lemonade and hauled in $7.
[. . .]
There is a strand of economics, we’ll call it the K-brand, that sees all this as worthwhile. They add together the $10 spent by the parents to back the venture and the $7 spent by the customers and conclude that an additional $17 of spending is clearly a good thing. Surely, the neighborhood economy has been stimulated.
To the family it is a loss, chalked up as a form of consumption. If this were a business enterprise it would be a write-off. In classical economics it is a “mal-investment.”
[. . .]
But that is not how it works in government accounting. While a private business must adjust its books to reflect the losses from an intended investment that went bad, governments never do that.
When a government “invests” in, say, an airport in Johnstown, Pa., all the expenditures for labor and materials are recorded as investments and are additions to national output. Never mind that when it is later discovered that only three people a day want to fly to or from the airport, no adjustment to national wealth will reflect the folly of this “mal-investment.”
If the airport had been financed by purely private, commercial enterprises, the initial expenditures would have been recorded as investment spending, but when reality struck and the entire project was written off as a total loss, the business-profit component of national output would decline. That is, a previous bad “investment” reduces, rather than augments, current national income.
New economic ideas on employment and stimulus
Arnold Kling, writing in the Wall Street Journal, explains why (if his new theories are validated) governments have been doing exactly the wrong things to help the economy recover:
… I believe that the process of creating employment is explained not by the theories of Keynes, but rather by the theories of Adam Smith and David Ricardo. Smith famously described the advantages of specialization and division of labor. Ricardo pointed out the gains from trade that come from consuming goods that others produce more efficiently. From the perspective of Smith and Ricardo, real jobs emerge in the context of patterns of sustainable specialization and trade.
Unfortunately, the patterns of specialization and trade that had emerged five years ago were not sustainable. Many jobs in home construction, durable-goods manufacturing and distribution, and mortgage finance were dependent on housing markets with ever-rising prices. In the U.S. and the U.K. in particular, the finance industry expanded well beyond its true economic value. Once the property bubbles burst, these jobs were exposed as not viable. Meanwhile, ongoing creative destruction brought about by the Internet and globalization have continued to allow substitution of capital and emerging-market labor for industrialized countries’ labor in many sectors. Together, these phenomena have caused widespread dislocation.
More government spending will not bring back the days when supposedly triple-A-rated mortgage securities could be fashioned out of dodgy loans to unqualified borrowers. Doing so would not halt the ongoing improvements in productivity in manufacturing and retail trade. It would not facilitate the adjustments that are needed in the mix of skills in the labor force. The necessary adjustments can only be made by the decentralized efforts of entrepreneurs.
[. . .]
The word “sustainable” in “patterns of sustainable specialization and trade” refers to profitability. Patterns that are profitable can be sustained. Patterns that are not profitable must eventually be shut down. That is the problem with patterns of trade created by government borrowing and spending: They are not sustainable, as has been illustrated in the U.S. by the failure of many of the “green energy” companies supported by President Obama’s stimulus package. Moreover, as European policy makers have discovered, there are limits to how much governments can borrow to fund their experimentations in specialization and trade.
Great moments in advertising
This is not one of them:
BMW apologized after a PR strategy to pay for the naming rights to a weather system backfired — that system turned into the deep freeze that’s claimed dozens of lives across Europe.
The goal was to promote BMW’s Mini Cooper brand by paying Germany’s meteorological office 299 euros ($392) to name a system “Cooper” — a practice in place since 2002 to help fund weather monitoring work in Germany. Unfortunately for BMW, the system it was assigned to turned out to be a killer.
On the face of it, this seems like a pretty stupid notion: pay money to associate your brand with a major weather disturbance? Didn’t BMW’s PR folks notice that the association most people have with named weather is negative?
Walter Kirn profiles Gingrich
A new column in GQ on the 2012 presidential race:
There are some things you don’t know you want until you get them and some that you don’t know you don’t until they’re yours. Take perfection. Now that Republicans have found in Romney pretty much all the qualities they’ve clamored for in modern presidential candidates—an aura of personal and public decorum, a record of civic-minded accomplishment backed by a record of fierce free-market self-enrichment, all wrapped up in a senior-edition beach bod and a profile fit for a gold coin—they don’t seem as wild for them as as they once were. Sure, they’re proving willing to accept Mitt (largely on the assumption that others will like him, which is how social-climbing teens choose prom dates) but what many of them now lust for in their hearts, as do certain non-Republicans who’ve caught the fever despite themselves, is something they never imagined tolerating, let alone secretly, irresistibly craving: a primordial walking gargoyle of pre-monogamous political id. Newt Gingrich, who seems to inhabit a middle state between swamp thing and statesman, frog and prince, is an arresting specimen in his own right, but as the fascination of a party whose base holds that man was created in God’s image without any scaled or beaked transitional versions, he’s an unaccountable astonishment.
He’s also an unshakable addiction. Like a drunken traveling salesman who hits on a freaky new sexual position during a night of Motel Six carnal fumbling, Newt has managed to put his stubby finger on a collective pleasure center—some undiscovered orgasmic political ganglia—that will require quadrennial stimulation from here on out. Whether he wins even one more delegate hardly matters in the screwy new scheme of things. As a style, as an archetype, he’s already prevailed, changing forever the nature of the game and earning the love of everyone who’s felt the game becoming sclerotic recently, the way games do when the money grows enormous, the press coverage relentless, and the players remain the same. Just as JFK and Reagan accustomed Americans to a higher standard of dashing glamor in Oval Office types, Newt has habituated a numbed electorate to a new level of effervescent perversity. He’s probably unelectable, it’s true. He’s entirely unforgettable, that’s truer. He has opened a process that’s routinely disparaged as a mere horse race, shallow and routine, to a whole new animal: the bred-for-mayhem Georgia kicking mule.
February 2, 2012
In Arizona “any time two or more people work together to influence a vote … they instantly become a ‘political committee’”
What’s all this about “free speech” if you are legally encumbered with ridiculous regulations even before you speak?
Dina Galassini does not seem to pose a threat to Arizona’s civic integrity. But the government of the desert community of Fountain Hills believes you cannot be too careful. And state law empowers local governments to be vigilant against the lurking danger that political speech might occur before the speakers notify the government and comply with all the speech rules.
Last October, Galassini became annoyed — like many Ron Paul supporters, she is easily annoyed by government — about the city’s plan to augment its spending with a $29.6 million bond issue, to be voted on by mail by Nov. 8. On Oct. 6, she sent emails to 23 friends and acquaintances, urging them to write letters to newspapers and join her in two demonstrations against the bond measure. On Oct. 12, before she could organize the demonstrations, she received a stern letter from the town clerk: “I would strongly encourage you to cease any campaign-related activities until the requirements of the law have been met.”
State law — this is the state of John McCain, apostle of political purification through the regulation of political speech — says that any time two or more people work together to influence a vote on a ballot measure, they instantly become a “political committee.” This transformation triggers various requirements — registering with the government, filing forms, establishing a bank account for the “committee” even if it has raised no money and does not intend to. This must be done before members of this fictitious “committee” may speak.
Is Sino-Forest a typical Chinese company?
Colby Cosh posted an initial article on the investigation into Sino-Forest’s business back in June:
Timber company Sino-Forest is locked in a fascinating battle for survival against Carson Block, a stock analyst with a mixed record of publicity attacks on Chinese-based enterprises. With professional analysts reluctant to say what they make of Block’s “strong sell” report on Sino-Forest, I’m in no position to endorse it as a piece of financial advice or investigative journalism. Considered strictly as entertainment, however, the report is remarkable.
Block has documented that Sino-Forest operates with extraordinary opacity for a company whose holdings are surely very widely distributed — particularly, one assumes, within Canada. Sino-Forest claims to be doing hundreds of millions of dollars’ worth of sales through mostly unidentified “authorized intermediaries” in China — traders who are apparently happy to let the company buy title to trees, hold them as they appreciate, take on the bulk of the costs and risks in the meantime, and then snap up revenues when the trees are eventually converted into wood products. Block, having poked around a bit in the literal Chinese backwoods, questions whether much if any of the reported underlying activity is happening.
[. . .]
Sino-Forest is refusing, despite intense pressure, to make a full disclosure of the identities of the “authorized intermediaries” who are making its money. The company claims that to do so would put it at a competitive disadvantage, which makes one wonder why its business model ought to depend so heavily on sheer obscurity. One possible answer is that Sino-Forest’s real, fundamental business is some sort of cryptic regulatory arbitrage; that seems like a game potentially worth playing with paper assets in places that have a strong rule of law, but it is surely a dangerous one in a nominally Communist country, where a nationalization could be arranged in the space of an afternoon. (Or where some regional Party functionary could simply be bribed to “lose” crucial paperwork.)
Today, he posted a follow-up report:
Could a curious investor look at actual maps of timber controlled by Sino-Forest agents, you ask? Well, you see, it’s not exactly kosher for foreigners to carry around maps of remote parts of China. You can borrow them from forestry officials if you really need to. Will the local forestry bureaus confirm Sino-Forest’s claims about plantations operated by its agents? Well, sometimes they’ll give you a certificate of sorts, for all the good it might do. “The confirmations are not title documents, in the Western sense of that term,” the committee report notes. (As I understand it, the Western meaning of “title document” is that it gives one an unquestioned, justiciable claim to ownership of something, whether the Party or the Army or the good Lord in heaven approve or not.)
[. . .]
The impression given is that you need influential “backers” to do business in China. The question for the Western investor, though it’s probably now moot, is whether the real role of these backers is to help exploit Chinese resources for the benefit of the Western shareholders or to help fleece Western shareholders for the benefit of Chinese suppliers and bureaucrats.
As Jon, my former virtual landlord puts it, this is a hobby horse I like to ride now and again.
Where are the carriers today?
Just in case you were wondering where the US Navy has its major surface fleet components distributed, here’s a non-classified snapshot, courtesy of Stratfor:
The Naval Update Map shows an approximation of the current locations of U.S. Carrier Strike Groups (CSGs) and Amphibious Ready Groups (ARGs), based on available open-source information. No classified or operationally sensitive information is included in this weekly update. CSGs and ARGs are the keys to U.S. dominance of the world’s oceans. A CSG is centered on an aircraft carrier, which projects U.S. naval and air power and supports a carrier air wing (CVW). The CSG includes significant offensive strike capability. An ARG is centered on three amphibious warfare ships, with a Marine Expeditionary Unit (MEU) embarked. An MEU is built around a heavily reinforced and mobile battalion of Marines.
Repost: A tribute (of sorts) to Wiarton Willie
John Scalzi, several years ago, wrote a tribute to Wiarton Willie, who was in the news in an unaccustomed way at the time:
To tell you the truth, the most disturbing thing is not that the groundhog died — certainly this animal earned his eternal rest — but that his handlers couldn’t think of anything better to do but tell a festival crowd that he had croaked. Those kids in the crowd will be forever traumatized. Groundhog Day will no longer be a happy time, but a constant reminder of death and mortality in the bleak midwinter. 10 years from now, I expect that Wiarton, Canada will become the new North American epicenter of dark, gothic teenage poetry.
Lying frozen in the snow
The groundhog soul resides far below
Gone to a place of doom and gray
Now winter will always stay.
Die Groundhog Die!
Mommy and Daddy Lied!
But wait, there’s more:
Now, on to the groundhog Wiarton Willie, who, as you know from yesterday’s entry, died before Groundhog Day and whose body was photographed lying in state in a dinky little pine coffin. Or was it? Now news comes from the sordid little burg of Wiarton, Canada, that the rodent corpse in the coffin was not Wiarton Willie at all, but a stuffed stand-in. The real Willie was apparently found so decomposed that the gelatinous remains were unsuitable for public display. So the town elders found a stuffed groundhog that just happened to be lying around (apparently the body of a previous “Wiarton Willie,” who was no doubt poisoned by the current, and now rotting, Willie in an unseemly palace coup), plopped it into that Barbie coffin, and presented the remains to a horrified public. Here’s the groundhog you’ve all been waiting for! And he’s dead! Winter for the next ten years!
The people of Wiarton meant well, I’m sure. But I’m having serious doubts as to their combined mental capacity. First off, the real Willy was found in a state of advanced decomposition, which means he had been dead for weeks. Weeks. How could that happen? This rodent is the cornerstone of Wiarton’s entire tourism economy for the month of February, and no one bothers to check on him from time to time? Did they just stick him in a cage after last Groundhog Day and then forget to feed him? Every kid in the world had a hamster they forgot to feed, but you’re usually, like, five at the time. These were actual adults. They say he was hibernating when he died. Sure he was. I used that excuse about the hamster.
February 1, 2012
The wonders of selection, or why it now takes you an hour to find “just the right item” at the store
Monty (who just joined Twitter) linked to a Reason article on the glories of choice we have available to us in the western world. Monty’s comment:
The glories of capitalism, as expressed in the salty-snacks aisle of the supermarket. When you have a surfeit of a good or service, the value-add stops being the utility-value of the good and instead becomes esthetics or status. That’s why rich people drive Rolls Royces and Ferraris instead of Toyotas and Fords. As cars, they all do pretty much the same thing and in pretty much the same way; but the value-add of a Ferrari lies in aspects not directly related to the utility value of the vehicle. You can say the same about nearly any other commodity class, from clothes to electronics…to snack foods.
And the A Barton Hinkle article he links to:
But you don’t have to research the past 50 years of product flops to make the case. Just check a vending machine. There you will find every possible combination and interpolation of snack food. In the potato chip category alone — we don’t have time to look at crackers, cheese puffs, corn chips, or cookies — one finds not just barbecue- or cheddar-flavored chips, but chili cheese, cool ranch, ragin’ ranch, habanero, cheddar jalapeno, hot sauce, honey cheese, creamy chipotle, Mediterranean herb, and ketchup-flavored chips.
It’s obvious what’s going on here. Like every other industry, America’s snack-food makers live in deathly fear that the other guys are going to come up with the next “disruptive innovation” first, so everyone is trying to innovate as fast as they can. The poor sots in middle management have been told next year’s raise depends on producing X amount of revenue from new products. But there are only so many truly new products you can think up. Answer? Combine existing products the way you choose from a Chinese take-out menu: one from Column A, one from Column B. …
This seems to be the method at Hammacher Schlemmer — the fine folks who bring you must-have products like the bath mat/alarm clock and the remote-control pillow. It seems to work for them. So why not try it with snack food? Pickle-flavored potato chips, that’s why. Who needs all that ridiculous junk? Your basic potato-flavored potato chip was good enough for our ancestors and by gad sir, it should be good enough for us.
Or at least this is my attitude when standing before a vending machine. Whisk me into an office-supply store, however, and the tune suddenly changes. I am among those who have a weak spot — call it a fetish, call it an obsession — for school supplies. Pens, especially.
Arson victim now being dragged through the courts for defending himself with firearms
Canadian prosecutors have a strong aversion to the idea that people should be allowed to protect themselves, especially if firearms are involved:
Just when was Ian Thomson guilty of unsafe storage of a firearm? Mr. Thomson is the Port Colborne, Ont., man currently standing trial in a Welland, Ont. courtroom after he and his home were attacked by firebombers in August, 2010. (That’s correct, in the topsy-turvy world of Canadian criminal justice, Mr. Thomson and his home were the ones attacked and yet he is the one on trial.)
Having dropped other more serious charges — such as dangerous use of a firearm — because they concluded there was no reasonable chance of winning a conviction, Crown prosecutors have nonetheless bullied ahead with unsafe storage charges against Mr. Thomson.
One can only speculate on the Crown’s motives, but many prosecutors are so opposed to private citizens owning guns and, especially, using guns to defend themselves, their loved ones or property, that it is easy to believe prosecutors are running Mr. Thomson through the ringer in an attempt to discourage other homeowners from following his lead. They have conceded they cannot get a conviction against the retired crane operator and former firearms instructor for shooting at the three men who were trying to burn down his house with him in it, but perhaps they are hopeful their decision to drag Mr. Thomson through months of emotionally draining and expensive court proceedings will cause other homeowners to conclude armed self-defence isn’t worth the hassle.
Update: An already strange case appears to be getting stranger, as the judge needed to adjourn the court to allow time for the lawyers to figure out just what the law actually says:
Canada’s laws on the storage and handling of guns and ammunition are so complicated that a veteran judge needed to adjourn court to allow two experienced lawyers more time for legal arguments and a search of case law to help parse and dissect them.
It was a dud of an ending after two days of trial in the case of Ian Thomson, a 54-year-old Port Colborne man who fired three shots from a legally owned gun to scare off three masked men who were firebombing his secluded farmhouse while one threatened: “Are you ready to die?”
And the crown displays a remarkable lack of firearms knowledge:
Mr. Mahler said Mr. Thomson was “less than forthcoming” and “secretive” when police arrived. He suggested Mr. Thomson even picked up the spent shell casings from his porch and hid them in his bedside table.
Seeming confused, Mr. Thomson said he didn’t understand.
“Didn’t they fall to the ground?” Mr. Mahler asked, apparently thinking shell casings from a .38-calibre revolver were ejected from the gun with each shot.
“No,” said Mr. Thomson as the crowd of gun advocates watching from the public gallery chuckled and guffawed at Mr. Mahler’s mistake.
Spent shells from a .38 remain in the gun’s cylinder until it is opened and they are removed. Mr. Thomson took the casings out at the same time he opened the gun to reload it, which was at the bedside table, where the casings were when police arrived, he said.
Of course, if he’d had enough time to collect expended brass — in the dark — before police arrived, it doesn’t support the idea that the police were going to be timely in arriving after he first called 911, does it?
