Quotulatiousness

August 31, 2015

The NDP and federal corporate taxes

Filed under: Cancon, Economics, Government — Tags: , , , — Nicholas @ 04:00

In Maclean’s, Stephen Gordon looks at how the New Democratic Party is talking about their approach to corporate taxation during the current election campaign:

… the OECD says that the current combined (that is, federal plus state/provincial) corporate income tax rate in the US is 39 per cent. In Canada, it’s 26.3 per cent (the federal rate of 15 per cent plus an average provincial rate of 11.3 per cent.) Getting us up to something resembling the U.S. rate (in the absence of changes in provincial rates) would require increasing the federal rate to around 27 per cent.

The NDP has made use of several different reference points since then. For example, rolling back the cuts made under the Conservative government would bring the rate back up to 22 per cent. Increasing the federal rate to 19 per cent would bring us up to the average of the other G7 countries. The NDP’s target is apparently now down to 17 per cent or so.

As far as the prospects for Canadian economic growth go, this steady reduction is good news: corporate income taxes are the most harmful to economic growth. The growing recognition of the negative effects of corporate tax rates explains why Canada and other OECD countries have made it a point to reduce corporate income taxes over the past few decades […]

If you look at just the relationship between federal corporate income tax rates and federal income tax revenues, you get pretty much the same story. Even though federal corporate tax rates have fallen by more than half over the past 30 years, corporate income tax revenues have continued to fluctuate around two per cent of GDP.

Canadian corporate tax rates and revenue 1985-2014

There are at least two reasons why you might think that higher corporate tax rates might not result in higher corporate tax revenues:

  1. Higher corporate tax rates reduce the after-tax rate of return on investment. Everything else being equal, this reduces investment, capital accumulation and profits. Less profits means less corporate income to tax.
  2. Higher corporate taxes produce an incentive for multinational firms to shift taxable activities away from high-tax jurisdictions.

In the short and medium term, the second point is probably more important.

August 27, 2015

Incentives matter … but in a perverse manner for public employees

Filed under: Bureaucracy, Business, Government, USA — Tags: , — Nicholas @ 03:00

On the Property and Environmental Research Center website, Warren Meyer explains why the US Forest Service is cutting ties with private organizations that have been running federally owned facilities for less than the Forest Service is able to do … despite the private company’s proven higher levels of service:

Private concessionaires pay all operations costs out of the entrance fees paid by the public — and without further taxpayer subsidies. In addition, the concessionaire pays the public agency a concession fee. The resulting savings to taxpayers can be quite compelling. In a recent PERC case study, I showed how a parks agency had to supplement every dollar in visitor fees with an equal amount of tax dollars to keep a park open. By privatizing the park’s operations, the need for tax revenues could be eliminated. And in fact, the park could be turned into a money maker for the agency.

While this may resonate with the public, it’s a hard sell to the agencies themselves. The National Park Service uses concessionaires to provide some visitor services, but it has not considered private operation of entire parks. Even the Forest Service — which does allow some private park management — often seems eager to go back to running the parks themselves.

[…]

No private company would behave like this. So why does the government? Over the years, I have observed three possible explanations:

1. Government employees have incentives that go beyond “public service.” For most agency managers, their pay and prestige and future job prospects are tied to the size of their agency’s headcount and budget. Privatization savings that look like a boon to taxpayers may look like a demotion to agency managers.

2. People who are skeptical of private enterprise and more confident in government-led solutions tend to self-select for government jobs. Even in the Forest Service, concessionaires frequently experience outright hostility from the agency’s rank and file. “It’s wrong to make a profit on public lands” is one common statement.

3. Government accounting is not set up to make these sorts of decisions well. Few agencies have reports that tell them whether an individual park’s revenues are covering its full operational costs. Costs can be spread over multiple budgets, making it seem as though public park operation is less expensive than it really is.

To overcome these obstacles, we’ve learned that progress generally has to start above the agency. Some sort of legislative push is necessary. And we try to find ways to pitch our solutions as a way for agencies to free up money to address other problems, such as fixing rotting infrastructure.

August 26, 2015

Harper’s “boutique” tax credits

Filed under: Cancon, Economics, Government, Politics — Tags: , , — Nicholas @ 03:00

Colby Cosh explains why Stephen Harper is so fond of certain kinds of tax system distortions (tl;dr — they work … politically if not economically):

On Sunday, Conservative Leader Stephen Harper announced that his government, if re-elected, would introduce a tax credit for memberships in service clubs like the Canadian Legion or the Kiwanis. This modest measure — and Harper himself emphasized its modesty — is already being greeted with some derision. Apparently this is because a tax break for service clubs is an absurd, baroque complication of the tax code, unfit to stand alongside sensible traditions like the Prince Edward Island aerospace tax credit, the Nova Scotia digital media tax credit, the British Columbia book publishing tax credit, the Ontario computer animation tax credit, the Manitoba odour control tax credit for farms, Quebec’s tax credit “for the modernization of a tourist accommodation establishment” or the various items exempted almost randomly from the GST, such as condominium fees and music lessons.

One senses that the Canadian media have decided, curiously late in the country’s history, that tax-code wrinkles introduced with the aim of social engineering are ridiculous, if the aims thereof are conservative ones. Furthermore, we have concluded that lifting taxes on Elks or Knights of Columbus memberships, and thus putting them on more or less the same footing as religious tithes, is especially ridiculous.

The Conservative party will be awfully disappointed if the press does not engage in some snickering here. The work of the Kinsmen or Rotary is not especially visible if you never cross Eglinton Avenue; the very names of these groups have a rustic flavour on the tongue, carry a whiff of old-school WASP dominance and gray-flannel respectability. Break out into the smaller cities, if you dare, and the traces become somewhat clearer: a seniors’ centre here, an air-ambulance fundraiser there. In smaller towns, service clubs are often practically synonymous with capital-S Society. Laugh at the idea of a tax break for the Legion, but make sure you are still laughing on election night.

August 25, 2015

Roger Kimball says Elon Musk is crazy

Filed under: Business, Government, Space, USA — Tags: , , , , — Nicholas @ 04:00

Oh, sorry, he actually said Musk is “crazy like a visionary“:

I am an unlikely fan of Elon Musk, the flamboyant, Steve Jobs-like (some would say Tony Stark-like) entrepreneur behind SpaceX, SolarCity, Tesla Motors, and other enterprises that seemed like starry-eyed impossibilities a scant decade ago. Musk’s two governing passions, he has said repeatedly, are “sustainable transport” to battle “global warming” and finding a way to make mankind an interplanetary species, beginning with a space colony on Mars.

For my part, the word “sustainable” has me reaching, if not for my revolver, then at least for an air-sickness bag. I regard the whole Green Lobby as a cocktail composed of three parts moralistic hysteria mixed with a jigger of high-proof cynical opportunism (take a look at Al Gore’s winnings from the industry) fortified with a dash of beady-eyed left-wing redistributionist passion. You can never be Green enough, Comrade, and if the data show a 20-year “hiatus” in global warming (so much for Michael Mann’s infamous hockey stick), that’s no reason not to insist that capitalist powerhouses like the United States drastically curtail their CO2 emissions right now, today, while giving egregious polluters like China a decade or more to meet its quotas.

No, when it comes to energy, I often quote, sometimes with attribution, the Manhattan Institute’s Robert Bryce: what the world needs now is cheap, abundant energy, period, full stop, end of discussion. My motto is: frack early, frack often. Do you want to help the poor/clean up the environment/save the spotted wildebeest? Then you need economic growth, and to achieve that you need energy, which at the moment means you need fracking. Q.E.D.

When it comes to interplanetary travel, I suspect that Musk’s passion for transforming us into “space-faring” creatures was heavily influenced by his youthful reading of Isaac Asimov, Robert Heinlein, and (one of his favorites) The Hitchhiker’s Guide to the Galaxy. Not that those adolescent chestnuts necessarily argue against the plausibility of his ambitions. Behind Musk’s enthusiasm for space colonization is a worry that a future “extinction event” might delete human consciousness from the emporium of the universe.

For what it’s worth, I’m very much split on Musk and his works: I generally agree with his desire to help get humanity expanding beyond our single, frail planet … I just wish he wasn’t guzzling down government subsidies to get there. I’ve read the book Kimball is reviewing (Ashlee Vance’s Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future), and I certainly feel I got my money’s worth from the purchase … Musk is potentially a very great man. Right now, he’s a pretty good man who still takes everything he can get from the government.

August 19, 2015

The Duffy Affair – try explaining it in just one sentence

Filed under: Cancon, Government, Media — Tags: , — Nicholas @ 03:00

Colby Cosh on the Senate scandal that is convulsing the Parliamentary Press Gallery from coast-to-coast (actually, it’s more like from Gatineau to Nepean):

I wish I’d captured the exact quote from Twitter, but a paraphrase will have to do: someone said recently, “If you want to feel better about Canada, try explaining the Duffy-Wright scandal to someone from another country in one sentence.” I cannot help feeling that there is something to this. Our media have blitzed a courtroom and consumed great newspaper acreage over a very technical and complicated topic. There is no glamour in the affair, by world standards — phrases like “paid for hookers,” “hired a death squad” or “donations from the Klan” are absent.

Dubious billing procedures by politicians make for good stories. They helped bring down an Alberta government not long ago. But that news story involved using public resources for partisan purposes. In the case of Nigel Wright — as distinguished from the issue of Mike Duffy being a scurrilous, greedy trimmer, a truth we did not need a trial to tell us — the fundamental problem is what the Conservative party and Wright did to defray the questionable expenses imposed upon the treasury.

A scandal and a shame it may be, but in an upside-down way. Mike Duffy’s expense claims have not yet been found to be legally or procedurally wrong. Duffy was unwilling to pay them back. Nigel Wright tried to pre-empt the issue by making use of his personal fortune. It’s a “scandalous” donation of private dollars to the public treasury.

If I ask what is actually scandalous about this, I am guaranteed to receive several different answers. The Conservatives are charged with having considered paying Duffy’s expenses out of party funds, which, I am told, are “public” in nature because they are supported by a tax subsidy. The Conservatives did, of course, contemplate using party funds … but didn’t. And those funds, though subsidized, exist precisely to be applied ad libitum for partisan convenience.

Another theory is that Wright’s payment was, by its inherent nature, a “bribe.” The Conservatives, covering up bribery! — non-lawyers are fond of that one. Whether Duffy was guilty of accepting a bribe is, of course, one of the issues in the trial. It is even less clear that Wright is guilty of having offered a bribe: in law, a bribe does not take two to tango. Under the Criminal Code, giving a bribe means giving money to a legislator in order to get them to do something, or not do something, “in their official capacity.” There are plenty of speculative theories about what Wright had to gain from paying Duffy’s expenses: none, as far as I can see, involve Duffy’s official conduct.

August 13, 2015

QotD: Libertarianism

Filed under: Government, Liberty, Quotations — Tags: — Nicholas @ 01:00

Libertarianism is not the claim that individuals are always rational, or that markets are always efficient, or that the distribution of income under laissez-faire capitalism is always “fair.” Rather, it is the claim that, despite the imperfections of private arrangements, government interventions usually make things worse. Thus, non-intervention is the better policy.

Jeffrey Miron, “A case for the libertarian: Neither liberals nor conservatives recognize their inconsistencies”, Washington Times, 2014-07-17.

August 12, 2015

“… premiers look to Ottawa for one reason and one reason only: To beat the Prime Minister … over the head with their begging bowls”

Filed under: Cancon, Government — Tags: , , , , — Nicholas @ 03:00

Richard Anderson explains why Ontario Premier Kathleen Wynne is upset with Prime Minister Stephen Harper:

It is a time honoured tradition that premiers look to Ottawa for one reason and one reason only: To beat the Prime Minister of the day over the head with their begging bowls. What Kathleen Wynne is looking for is not a “partnership” but a ceaseless no-strings-attached flow of federal money. Like a petulant teenager the sextuagenarian premier always wants more and offers little in return. Prime Minister Harper has wisely refused to play her game.

[…]

Now imagine that you’re Kathleen Wynne — please try to subdue the gag reflex — and billions of dollars now flow into the provincial coffers from this de facto payroll tax. Perhaps the money gets tossed into general revenues. Queen’s Park then turns arounds and issues IOUs to the “arm’s length board” in the form of increasingly worthless provincial bonds. The pension would for actuarial purposes be “fully funded” but as a practical matter one pocket of government is borrowing from the other.

But perhaps the Wynnesters are a tad more clever than all that. The revenues from this payroll tax go directly to the allegedly “arms length” investment board. Nothing goes into general revenues and the Liberals allow themselves a patina of fair dealing. The board, however, will almost certainly have its investment guidelines laid out by the government. Those guidelines, by the strangest coincidence, will likely have an “invest in Ontario” component.

Some of the money will get used to buy up provincial bonds, lowering the government’s cost of borrowing at a time when capital markets are getting skittish about Ontario debentures. Quite a lot of the rest will be used to fund infrastructure projects, private-public sector partnerships and other initiatives that will, mysteriously, favour Liberal allies. The Chretien era Adscam scandal will seem like chump change in comparison.

August 4, 2015

Tallahassee does the right thing about its red light camera system

Filed under: Government, Law, USA — Tags: , , — Nicholas @ 03:00

Last month, Randall Holcombe reported on a sensible decision by the Tallahassee, Florida city government when it was discovered that its red light camera program had achieved the stated goal:

Five years ago my hometown of Tallahassee, Florida contracted with Xerox to set up 19 red light cameras at seven busy intersections in town. The contract had the city pay Xerox about $87,000 a month to operate the cameras, and charged drivers a fine of $142 for being caught on camera running a red light.

When the program was established, city officials claimed that the cameras were installed for safety reasons, to deter drivers from running red lights, not to raise revenue. If we take them at their word, the program worked. Red light violations have fallen more than 90% since the program began. The program has been so successful that the city is not taking in sufficient revenues from fining violators to pay Xerox the fees for operating them.

You can guess the ending of this story. The city has announced that when the contract with Xerox expires in August, it will not be renewed and the red light camera program will end. Here is a program that has been a huge success by the city’s stated criterion, so the city is terminating it.

I see two possible explanations for this. One is that governments tend to terminate successful programs and continue the unsuccessful ones. The other is that the city officials who originally stated that the motivation for installing the cameras was to deter red light violations, and not the revenue generated from fines, were lying. I’m not ruling out the possibility that both explanations are correct.

Other municipalities presented with the same set of facts went in another direction: reducing the amber light time to increase the number of cars that could be caught on camera violating the law. That this had nothing to do with increasing public safety on the roads — in fact, probably increased the danger around traffic lights in the case of drivers braking suddenly to avoid entering the intersection as soon as the light turned yellow — but it did do a fine job of increasing the fines that could be collected (who cares about the safety of drivers and pedestrians when municipal revenue is at stake?).

August 3, 2015

QotD: The impossibility of central planning

Filed under: Economics, Government, Quotations — Tags: , , — Nicholas @ 01:00

Knowledge is local in the economic system, meaning that the centre of that system can never actually access all of the required information — most certainly not in anything like a reasonable timescale — to be able to plan effectively.

Unsaid but implied is the idea that, given the tossers who get elected to do the planning, a central planning system wouldn’t work even if the planners themselves worked as hard as they could. But the real killer point is that we simply don’t know what it is that we’re trying to plan.

What actually is the algorithm? What is it that we’re trying to optimise with our plan for the economy? Tractor production has rather gone out of favour as a measure of human happiness, so what actually is it that we’re going to try and maximise the output of?

The standard answer is that we want to maximise human utility, which can descend into a form of madness where economists try to measure utility, although the concept is sound enough. But what the buggery is that? What blend of shiny-shiny, bling, housing, hip-hop concerts and smoked salmon actually maximises human utility as a whole?

As befits one honoured to write for El Reg, my desire for shiny-shiny is reasonable while my demand for bling, zero. I live and work in two separate countries, so my housing consumption is higher than many; smoked salmon is merely an interesting treat; and hip hop (in concerts or otherwise) provides me with negative utility. That mixture will be different for each and every one of us: I’m sure we could find several hip-hop fans among the commentards who enjoy jiggin’ wiv da beat.

In fact there are 65 million different mixtures of what contributes to human utility, in a country of 65 million humans. Don’t forget that as prices change, then so does each and every one of those utility functions. They also change as technology changes: what rational planner would have predicted the success of the iPhone back in 2007?

So, in theory, we don’t and cannot know what the hell we’re trying to plan.

Tim Worstall, “Gov’t control? Hah! It’s IMPOSSIBLE to have a successful command economy”, The Register, 2014-08-13.

July 30, 2015

Perfect political imagery – the Senate as “our great constitutional appendix”

Filed under: Cancon, Government, Politics — Tags: , , , , — Nicholas @ 05:00

Richard Anderson explains why unlike most mature countries, Canada is unable to amend the constitution:

The Senate is our great constitutional appendix. It gets a bit inflamed from time to time but, a hundred and fifty years in, we’ve generally come to the conclusion that it’s too much of a hassle to get rid of. In other countries, normal nation states, amending a constitution is just one of those things. There’s a convention, people argue about it and eventually some words get swapped in and out of the country’s basic law. The Americans might go so far as to fight a civil war over such things, but for most countries it’s routine stuff.

Having successfully avoided civil wars, insurrections, coup d’etats and other assorted public disturbances, the Canadian project has retained one bizarre character flaw: Our inability to amend the constitution in anything like a sensible manner. For those old enough to have lived through the constitutional wars of the 1970s and 1980s the very mention of the C-word induces terrible flashbacks. Sometimes when I close my eyes I can see Joe Clark talking about amending formulas. In those moments I question the existence of a merciful God.

The latest idea to drift out of the PMO is that Stephen Harper will stop appointing Senators. This is actually quite similar to how the PM approaches maintenance on 24 Sussex Drive. The official residence is almost as old as Canada itself. Unfortunately so is much of the plumbing. The building is literally falling to bits and requires millions in renovations. Being a politician first and a government tenant second, Stephen Harper knows that doing more than the bare minimum to keep up his Ottawa home will provoke shrieks of outrage from the Opposition. Only when the building finally collapses will anything really be done. And at three times the original price.

This same logic will now be applied to the Senate. The PM will stop appointing senators until there is no more Senate. Sounds neat, eh? Except that the Senate is ensconced into the bedrock of our constitutional order. If the number of living breathing Senators drops below quorum the Supreme Court, the real rulers of our fair Dominion, will order the PM to appoint more. Then the PM of the day, perhaps Mr Harper or Mr Mulcair, will shrug their shoulders and do as their bosses tell them.

The only way to get rid of the Senate is to amend the constitution. Like going to the dentist this would be both painful and expensive. Unlike going to the dentist it would also be interminable. Dentists, you see, have golf games. Constitutional lawyers don’t play golf. It would interrupt from their fascinating work of discussing whether or not the power of disallowance is genuinely obsolete. If you don’t understand what that means don’t worry neither do they.

July 22, 2015

The pleasures of a weak government

Filed under: Britain, Economics, Government, History — Tags: , , , , — Nicholas @ 03:00

At Samizdata, Brian Micklethwait sings the praises of “an infirm hand on the tiller” during the War of the Roses:

For my point is that this royal “hand on the tiller” that Wilson says the country so much needed can sometimes be rather too firm.

Wilson is right that medieval civil war, or medieval war of any kind, could be a disaster to the wider society in which it happened. A routine military method in those days was for a retreating army to wreck the countryside, burning crops and killing livestock, in order to deny these resources to an advancing enemy. That this was a death sentence to whoever lived in this devastated area may have troubled the people who inflicted such horrors, but not enough to stop them doing it whenever they were told to. Elsewhere in the book, Wilson mentions an episode of just this sort, in which the King of Scotland inflicted just this horrible fate upon great swathes of Scotland, when he was faced with an invading English army. Those medieval wars between England and Scotland were not quite the nationalist confrontations that Anglo-Scottish wars later became. They were battles between aristocratic dynasties, between “families”, in the Godfather movies sense. Civilian populations were more prizes to be contested, to be owned or failing that denied to an enemy, than the ideologically enthused participants in the contest, as they became later, for instance in the seventeenth century.

But, on the whole, England’s Wars of the Rose, as they later came to be called, were not like this. These “wars” tended to consist of relatively small armies having sometimes very bloody battles with one another, but not, on the whole, creating all that much havoc for nearby civilians, apart from the unlucky civilians whose crops or animals had been on the actual battlefield.

So, what of that mercantile class which, in Wilson’s word, “emerged” at the same time as all of this rather low level fighting? He makes it sound like an unrelated coincidence. But might there not be an element of cause and effect in operation here? Was not the very fact that all this commerce, all this development of the wool trade, was “beyond politics” perhaps one of the key things that enabled it to “emerge”?

For many people, the mere possibility that the dynastic fights of the fifteenth century might degenerate, even if only in their immediate vicinity, into something more like the English — or worse, the German — civil wars of later times, was probably enough to make them believe, as Wilson believes, that a firm hand on the tiller would be preferable to rival hands flailing at each other. But in the meantime, it surely must have helped farmers — often farmers way off the beaten tracks of the contending English armies in places like East Anglia, and merchants, and speculators, and seafarers, that the aristocrats who might have taken command of their “emerging” arrangements, who, had they been all on the same side, might have brought them into politics, and if not ruined them then at least slowed them down quite severely, instead had other things on their minds. Basically, each other. What I am suggesting is that, from the commercial point of view, the Wars of the Roses might have been quite good wars, complicated enough to divert the attentions of aristocrats away from their usual anti-commercial meddlings, yet not too widespread in their destructive effect. That the Wars of the Rose were, for some, very bad wars, I do not contest.

July 16, 2015

QotD: The proper role of government

Filed under: Government, Liberty, Quotations, USA — Tags: , , — Nicholas @ 01:00

Good government is a constable — it keeps the peace and protects property. Parasitic government — which is, sad to say, practically the only form known in the modern world — is at its best a middleman that takes a cut of every transaction by positioning itself as a nuisance separating you from your goals. At its worst, it is functionally identical to a goon running a protection racket.

[…]

The desire to be left alone is a powerful one, and an American one. It is not, contrary to the rhetoric proffered by the off-brand Cherokee princess currently representing the masochistic masses of Massachusetts in the Senate, an anti-social sentiment. It is not that we necessarily desire to be left alone full stop — it is that we desire to be left alone by people who intend to forcibly seize our assets for their own use. You need not be a radical to desire to live in your own home, to drive your own car, and to perform your own work without having to beg the permission of a politician — and pay them 40 percent for the privilege.

Principles are dangerous things — whiskey is for drinking, water and principles are for fighting over. The anti-ideological current in conservative thinking appreciates this: If we all seek complete and comprehensive satisfaction of our principles, then there will never be peace. This is why scale matters and why priorities matter. In a world in which the public sector consumes 5 percent of my income and uses it for such legitimate public goods as law enforcement and border security, I do not much care whether the tax system is fair or just on a theoretical level; and while I may resent it as a matter of principle, the cost of my consent is relatively low, and I have other things to think about. But in a world in which the parasites take half, and use it mainly to buy political support from an increasingly ovine and dependent electorate, then I care intensely.

Kevin D. Williamson, “Property and Peace”, National Review, 2014-07-20.

July 14, 2015

Washington’s streetcars

Filed under: Economics, Government, Railways, USA — Tags: , , , , — Nicholas @ 04:00

Warren Meyer isn’t a fan of streetcars in general, but he views the Washington DC streetcar project as being particularly deserving of scorn:

I am increasingly convinced that the appeal of streetcars and light rail has everything to do with class. From any rational perspective, these systems make no sense — they are 10-100x more expensive than buses and lack the flexibility that buses have to adjust to shifting demand patterns over time. A single extra lane of highway adds more capacity than any light rail line.

Streetcar’s single, solitary advantage is that middle and upper class whites who would not be caught dead on a bus seem to be willing to ride streetcars. I don’t know if this is because of some feature of the streetcars (they are shiny and painted pretty) or if it is some sort of self-segregation (the upper classes want to ride on something that is not filled with “riffraff”).

He also points out that even Vox.com can’t make the case for streetcars particularly well:

The arguments are:

  • Tourists like them, because you can’t get lost like you can on buses. My response is, “so what.” Unless you are one of a very few unique cities, tourists are a trivial percentage of transit riders anyway. Why build a huge system just to serve out-of-town visitors? I would add that many of these same cities (e.g. Las Vegas) considering streetcars are the same ones banning Uber, which tourists REALLY love.
  • Developers like them. Ahh, now we are getting somewhere. So they are corporate welfare? But not so fast, they are not even very good corporate welfare. Because most of the studies they cite are total BS, of the same quality as studies that say sports stadium construction spurs all sorts of business. In fact, most cities have linked huge tax abatement and subsidy programs to their streetcars, such that the development you get with the subsidy and the streetcar is about what you would expect from the subsidies alone. Reminds me of the old joke that mimicked cereal commercials: “As part of a breakfast with juice, toast, and milk, Trix cereal has all the nutrition of juice, toast, and milk.”
  • Good for the environment. But even Vox asks, “as compared to what.” Since they are generally an alternative buses, as compared to buses that have little environmental advantage and often are worse (they have a lot more weight to drag around when empty).
  • The Obama Administration likes them. LOL, that’s a recommendation? When you read the text, what they actually say is that mayors like the fact that the Obama Administration likes them, for it means the Feds will throw lots of Federal money at these projects to help mayors look good using other peoples’ money.
  • Jobs. This is hilarious Keynesianism, trying to make the fact that streetcars are 10-100x more expensive than buses some sort of positive. Because they are more inefficient, they employ more people! One could make the exact same argument for banning mechanical harvesters and going back to scythes. Left unquestioned, as Bastiat would tell us, is how many people that money would have employed if it had not been seized by the government for streetcar use.
  • Je ne sais quoi. I kid you not, that is their final argument, that streetcars add that special something to a neighborhood. In my mind, this is Vox’s way of saying the same thing I did the other day — that the streetcar’s appeal is primarily based on class, in that middle and upper class folks don’t want to ride on a bus with the masses. The streetcar feels more upscale than buses. The poor of course, for whom public transit is most vital, don’t want to pay 10 times more for sexiness.

Every argument I have ever been in on streetcars always boils down to something like “well, all the cool kids like them.”

July 4, 2015

Reason.tv – The Secret Scam of Streetcars

Filed under: Bureaucracy, Government, Railways, USA — Tags: , , , — Nicholas @ 03:00

Published on 1 Jul 2015

Meet the Thighmaster of urban public policy: Streetcars.

Municipal politicians all across the country have convinced themselves that this costly, clunky hardware can revitalize their flabby downtown economies.

That includes the fearless leaders of America’s capital city. The DC government has spent hundreds of millions of dollars over the last decade trying to erect a streetcar line in the up-and-coming neighborhood of H Street. The project has been an epic disaster, perfectly demonstrating how ill-suited streetcars are to modern urban life.

Watch the full video above, or click below for downloadable versions. And subscribe to Reason TV’s YouTube channel for daily content like this.

June 30, 2015

Elon Musk – high tech messiah or grasping crony capitalist?

Sean Noble says that the subsidies Elon Musk’s high-tech Tesla and Solar City firms are much higher than he implies:

Tesla, SpaceX, and Solar City head Elon Musk lashed out at the Los Angeles Times following an article that totaled up all the government support that his three-headed corporate-welfare monster receives. The number the Times reported was nearly $5 billion in combined support for his companies, including subsidies for those who purchase Musk’s products, such as the high-priced solar panels of Solar City and the supercars of Tesla.

Musk responded by arguing, “If I cared about subsidies, I would have entered the oil and gas industry.” He further asserted that his competitors in the oil-and-gas industry haul in 1,000 times more in subsidies in a single year than his companies have received in total. Such statements reveal that Musk seems to care as little for facts as he purports to care about the taxpayer dollars propping up his various businesses.

Earlier this year, the U.S. Energy Information Administration (EIA) released the most recent data available regarding energy subsidies provided by the federal government. The data, covering the year 2013, broke down total taxpayer subsidies across the different sectors of the energy industry. While fossil fuels did enjoy some government support through various direct expenditures, tax credits, and R&D programs, the data stands in sharp contrast to Musk’s claims.

Data from the EIA report, combined with numbers from an anti-oil advocacy group regarding state-level government support, reveals that total state and federal support for the oil-and-gas industry is no more than $5.5 billion each year. As stated, Musk’s companies combine for $5 billion in subsidies, a number that he has yet to dispute. Clearly, the difference is much smaller than Musk’s outlandish 1,000-to-one claim.

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