Quotulatiousness

July 1, 2012

“Canada was born in debt”

Filed under: Cancon, Economics, Government, History, Railways — Tags: , , — Nicholas @ 11:08

At the Worthwhile Canadian Initiative blog, Livio Di Matteo explains one of the less mentioned but urgent reasons behind confederation in 1867:

The trials and tribulations of the European Union, its debt crisis and the Euro and the suggestion that part of the solution lies in a stronger fiscal union reminds me of the forces behind the drive for Canadian confederation in the mid-nineteenth century. Canadians are usually taught in school that major forces driving Confederation were the potential threat of territorial aggrandizement by the United States in the wake of the Civil War or the need for a larger market given Britain’s move to free trade and the end of Reciprocity with the Americans or the desire to generate the economic resources to build a railway to the west so that it could serve as an investment frontier.

One factor that receives very little mention is the fact that the prior to 1867 the colonies of British North America were heavily in debt and faced a fiscal crisis of their own. The solution to the colonial debt crisis that Confederation allowed was the creation of the federal government that was given strong revenue raising powers and assumed provincial debts and thereby stabilized the public credit. Public debt charges in 1867 already accounted for 29 percent of federal budgetary expenditure and by 1880 had only been whittled down to about 24 percent. Canada was born in debt.

Canada was created with a large debt as the provincial and local levels of government had invested heavily in transportation infrastructure — canals and railways in particular. In 1850, there were only about 66 miles of track in operation but by 1860 about 2000 miles of track had been built in eastern Canada. The total cost of building these railways in British North America up to 1867 was 145.8 million dollars the bulk of which was for the Province of Canada — Ontario and Quebec. By way of comparison, Canada’s GDP in 1870 has been estimated at about 383 million dollars.

[. . .]

Confederation was designed to fix a massive debt problem. Creation of a new political entity — the dominion government — would allow for the current debt burden to be serviced and for more credit to be obtained on foreign markets to fund the railway projects of the late 19th century — the CPR, Canadian Northern, etc… Confederation was a solution to the debt crisis but required a form of government that reduced sovereignty for the member units in order to stabilize the public credit. In the Canadian case, as acrimonious as the discussions were, the process was facilitated by the fact that the member units were all British colonies with similar institutions.

Reason.tv: 3 Big Takeaways From Obamacare Decision

Filed under: Government, Health, Law, USA — Tags: , , , , — Nicholas @ 10:59

Here are the three most important things you need to know in the wake of the Supeme Court’s decision on The Affordable Care Act, a.k.a. Obamacare:

1. Government is still unlimited.
2. Mitt Romney is still lame.
3. Health care costs will still soar.

For more details, go to http://reason.com/blog/2012/06/29/3-essential-takeaways-from-the-obamacare

H.L. Mencken’s New Dictionary turns 70

Filed under: Books, History, Humour, Media, Quotations, USA — Tags: , , , , — Nicholas @ 10:52

Terry Teachout celebrates the 70th anniversary of the original publication of H.L. Mencken’s New Dictionary of Quotations on Historical Principles From Ancient and Modern Sources:

The “New Dictionary” was a byproduct of its prolific editor’s fanatically industrious journalistic career. For years Mencken maintained a card file of quotations “that, for one reason or another, interested me and seemed worth remembering, but that, also for one reason or another, were not in the existing quotation-books.” In 1932 he decided to turn it into a book. When the “New Dictionary” finally saw print a decade later, Time praised it as “one of the rare books that deserve the well-worn phrase ‘Here at last.'”

Painstakingly organized and cross-referenced by subject, with each entry arranged in chronological order by date of original publication, the “New Dictionary” is formidably wide-ranging. Indeed, the only major writer missing from its index is Mencken himself. (“I thought it would be unseemly to quote myself,” he told a curious reporter. “I leave that to the intelligence of posterity.”) Its 1,347 pages abound with such innocent-sounding rubrics as “Civilization,” “Flag, American,” “Hell,” “Hypocrisy,” “Old and New” and “Science and Religion.” At first glance you might mistake it for a cornucopia of the world’s wisdom—but don’t let appearances fool you. The fathomlessly cynical Mencken wisely warned his readers in the preface that the “New Dictionary” was aimed at “readers whose general tastes and ideas approximate my own…. The Congressman hunting for platitudes to embellish his eulogy upon a fallen colleague will find relatively little to his purpose.”

He wasn’t kidding. Look up “Evolution,” for example, and you’ll find this 1925 statement by the Bible-thumping evangelist Billy Sunday: “If a minister believes and teaches evolution, he is a stinking skunk, a hypocrite, and a liar.” Look up “Critic” and you’ll be confronted with a rich catalog of ripe insults, among them this passage from Samuel Coleridge’s “Modern Critics”: “All enmity, all envy, they disclaim, / Disinterested thieves of our good name: / Cool, sober murderers of their neighbor’s fame.” Or check out “Irish,” under which can be found no less than a page of invidious comments, including a sideswipe from, of all people, Gerard Manley Hopkins: “The ambition of the Irish is to say a thing as everybody says it, only louder.”

Teachout is the author of a brilliant biography of Mencken: The Sceptic: A Life of H.L. Mencken, which I happen to be re-reading at the moment. For more on Mencken himself, the wikipedia entry is here.

“… except in Canada”

Filed under: Cancon, Economics, Government — Tags: , , , , , — Nicholas @ 10:25

The National Post editorial board celebrates Canada Day by making a case for Canadian exceptionalism:

The acronym “EIC” can refer to a newspaper’s editor-in-chief, the various forms of the storied East India Company, the Engineering Institute of Canada, and, in scientific circles, Electromagnetically-induced chirality. But in these odd times, they might also be deployed, for verbal economy, to denote “except in Canada.”

As in: Banks all over the Western world have suffered a series of shocks since the 2008 financial crisis – EIC. Economies have slowed — EIC. Real estate bubbles have popped — EIC. Deficits have ballooned to crisis proportions — EIC.

OK: Perhaps national pride leads us to exaggeration. A more truthful acronym might be EICAG — to include Canada “and Germany.” Various smaller European nations, as well as countries in Asia and Latin America, also have fared well. Yet it is hard to remember a time (if ever there was one) when Canada’s fortunes, taken as a whole, were so rosy compared to those of all other Western nations. This good fortune is something worth celebrating as we prepare to celebrate Canada’s 145th birthday this weekend.

They even have some praise to lavish on two former prime ministers who don’t normally get a kind word from the right:

Canada’s relative lack of red ink also is no accident. Two decades ago, Canada was what Greece was today: a bloated welfare state running up massive bills that it couldn’t pay. The unpopular job of fixing the balance sheet feel primarily to Jean Chrétien and Paul Martin — and they accomplished the task without any of the political chaos that has been gripping Athens and other southern European capitals in the last year. The prosperity and stability we enjoy today is in large part due to what those two men did with the fiscal mess bequeathed to them by Brian Mulroney and Pierre Trudeau.

Of course, not everything is going wonderfully well in the Dominion: we still have not emulated one of the notable successes of our European friends:

One of the few institutional factors holding Canada back is its healthcare system. As Shaun Francis writes elsewhere on these pages, our refusal to explicitly permit full-blown private alternatives to the current government-payer health monopoly is bad policy that is out of keeping with that of leading European jurisdictions.

Fortunately, this is a shortfall that can be cured easily. As the furor over Obamacare in the United States shows, building a universal public health system is difficult. But Canada has already done this heavy lifting over the last 50 years: All we lack now is a parallel private track — and that is something that will spring into being without any governmental action at all, save the legislative stroke of a pen needed to modify the Canada Health Act accordingly.

The Royal Navy’s successful privatization effort

Filed under: Britain, Business, Economics, Military — Tags: , , — Nicholas @ 00:04

Even the most dogmatic libertarian would be hard-pressed to defend the notion of privatizing the fighting navy, but the rest of the navy (training, support, maintenance, etc.) can in some instances be privatized not only without impacting military efficiency, but actually boosting it:

The Royal Maritime Auxiliary Service (RMAS) was privatised and taken over by Serco back in the 1990s and run for profit. To this day, Serco Denholm are responsible for the provision of all manner of auxiliary services, ranging from tugs and tender transfers, through to torpedo recovery craft, exercise minelayers and range target vessels.

All in all, there are easily over 100 vessels which can be found primarily in naval bases, but also in other establishments such as the Kyle of Lochalsh, around the UK. This fleet of vessels is an important reason to be positive for two reasons. Firstly, many navies rely on their own personnel to man and operate these vessels. When they need replacing, these costs are funded from naval budgets, and not from a wider contract fund. Similarly, the manpower needed to operate them comes from the Navy, and not from the private sector, meaning more sailors are needed to do this sort of job, and not go to sea on a ‘proper’ military vessel. By contracting out the service, the RN is able to focus its resources and manpower on proper military vessels, and not have to worry about finding funds to replace elderly tugs, at a time when it wants to bring frigates into service. It is not remotely glamorous, but it is an essential part of operating a Navy, and one that is often forgotten.

Also forgotten is just how new this fleet is — there has been a huge amount of investment in the port services fleet in recent years, with literally dozens of craft (Humphrey read something saying over 80 new vessels were being ordered) being built and entering service. The RN has managed to acquire the services of one of the most modern and effective port support vessels fleets in the world. This would not have happened if the RN were still looking after the RMAS — instead, by privatising it, the funding instead has brought new ships and better capabilities into service, at a reduced cost to the taxpayer. This matters because without it, the RN would be reliant on ever older ships, or finding scarce equipment programme funds to pay for them. (For those interested in the ships in service now, try this link — http://www.rfanostalgia.org/gallery3/index.php/RMAS)

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