Quotulatiousness

May 12, 2019

Mechanisms for redressing employment gender imbalances

Filed under: Business, Education, Politics — Tags: , , , , , — Nicholas @ 05:00

We’ve often been told that too many men occupy positions of power and influence in the working world, but what would it take to meaningfully address those imbalances?

Equity … is based on the idea that the only certain measure of “equality” is outcome — educational, social, and occupational. The equity-pushers axiomatically assume that if all positions at every level of hierarchy in every organization are not occupied by a proportion of the population that is precisely equivalent to that proportion in the general population that systematic prejudice (racism, sexism, homophobia, etc.) must be at play. This assumption has as its corollary the idea that there are perpetrators (the “privileged,” for current or historical reasons) who are unfair beneficiaries of the system or outright perpetrators of prejudice and who must be identified, limited and punished.

[…]

Now it doesn’t seem like mere imagination on my part that all the noise about “patriarchal domination” is not directed at the fact that far more men than women occupy what are essentially trade positions. Nor does it seem unreasonable to point out that these are not particularly high-status jobs, although they may pay comparative well. It is also obvious that none of these occupations and their hierarchies, in isolation, can be thoughtfully considered the kind of oppressive patriarchy supposed to constitute the “West,” and aimed at the domination and exclusion of women. By contrast, the trade occupations are composed of cadres of working men, with difficult and admirable jobs, who keep the staggeringly complex, reliable and essentially miraculous infrastructure of our society functioning through rain and snow and heat and gloom of night and who should be credited gratefully with exactly that.

Let’s assume for a moment that we should aim at equity, nonetheless, and then actually think through what policies would inevitably have to be put in place to establish such a goal. We might begin by eliminating pay scales that differ (hypothetically) by gender. This would mean introducing legislation requiring companies to rank-order their sex representation at each level of the company hierarchy, adjust that to 50:50, and then adjust the pay differential by gender at every rank, so that the desired equity was achieved. Companies could be monitored over a five-year period for improvement. Failure to meet the appropriate targets would be necessarily met with fines for discrimination. In the extreme, it might be necessary to introduce staggered layoffs of men so that the gender equity requirements could be met.

Then there are the much broader social policy implications. We could start by addressing the hypothetical problems with college, university and trade school training. Many companies, compelled to move rapidly toward gender equilibria, will object (and validly) that there are simply not enough qualified female candidates to go around. Changing this would mean implementing radical and rapid changes in the post-secondary education system, implemented in a manner both immediate and draconian — justified by the obvious “fact” that the reason the pipeline problem exists is the absolutely pervasive sexism that characterizes all the programs that train such workers (and the catastrophic and prejudicial failure of the education system that is thereby implied).

The most likely solution — and the one most likely to be attractive to those who believe in such sexism — would be to establish strict quota systems in the relevant institutions to invite and incentivize more female participants, once again in proportion to the disequilibria in enrollment rates. If quotas are not enough, then a system of scholarship or, more radically (and perhaps more fairly) women could be simply paid to enroll in education systems where their sex is badly under-represented. Alternatively, perhaps, men could be asked to pay higher rates of tuition, in some proportion to their over-representation, and the excess used to subsidize the costs of under-represented females.

May 6, 2019

QotD: Political scandals

Filed under: Business, Humour, Politics, Quotations, USA — Tags: , , , , — Nicholas @ 01:00

If you say “Clinton scandal,” the first thing that comes to mind for most people, at least for those of us old enough to have been around for Bill Clinton’s presidency, is Monica Lewinsky. That’s a shame: I am convinced that Hillary Rodham Clinton’s cattle-futures shenanigans were in fact a much more serious offense as a matter of public corruption. But most people don’t understand futures trading. Everybody understands diddling the interns. Nobody understands finance. Everybody understands sex.

(Except Objectivists.)

That’s why financial scandals rarely end political careers, but sex scandals often do, especially for Republicans.

Kevin D. Williamson, “Fanciful Trump ‘Scandals'”, National Review, 2017-04-16.

May 5, 2019

The MG Midget Story

Filed under: Britain, Business, History, Technology — Tags: — Nicholas @ 02:00

Big Car
Published on 18 Mar 2019

The MG Midget is all about fun! It’s a simple, cheap little car that promises open-top thrills which it delivers in spades. It’s a story that spans seven decades from humble roots in Oxfordshire to a world-beating car that conquered America. It was loved by weekend tinkerers, American G.I.’s coming home from the war and F1 racers. This is the MG Midget Story!

May 1, 2019

Feds impose media ban on companies taking part in “the largest single outlay of tax dollars in Canadian history”

Filed under: Business, Cancon, Government, Media, Military — Tags: , , — Nicholas @ 05:00

Ted Campbell understands that governments need to keep some information secret (like the capability of weapon systems or details of naval radar implementations), but that our current federal government is going far beyond any reasonable definition of secrecy:

Type 26 Global Combat Ship — selected as the Canadian Surface Combatant program’s design winner.
(BAE Systems, via Flickr)

But, that sort of really SECRET stuff aside, we, citizens, do have a right to know how the government is spending our money and that, in my opinion, includes understanding “details about the industrial benefits and jobs supposedly to be created by the surface combatant project.” After all, it was our government, the Harper Conservative government to be clear, that selected, in that case, Irving Shipbuilding (Halifax) to be the supplier of new destroyer-frigate type warships, and they did so after what was described in a 2010 press release by then Public Works and Government Services Minister Rona Ambrose as developing a

    Strategy [that] promotes the regional distribution of work and opportunities to shipyards across the country. Shipyards that are selected to build the combat and non-combat packages will have to subcontract vast amounts of work to the broader marine industry and suppliers of this industry. Subcontracting in any of the three streams encompassed by the Strategy will be of notable benefit small and medium enterprises … [and] … The Government of Canada is committed to getting the best value for Canadian taxpayers. Under the Strategy, shipbuilding projects that are similar in nature will be grouped together to reduce production costs. This type of strategic sourcing will create the conditions for the effective and efficient delivery and support of the federal fleet over the long term.

That’s all pretty good stuff and I’m pretty sure that most Liberal ministers are still toeing that same line today. They promised industrial benefits and jobs; we, taxpayers, have a right to know if they are delivering.

But, in an article in the National Post, defence correspondent David Pugliese tells us that

    The Liberal government has brought in yet another media ban, this time affecting companies seeking work on a warship project that involves the largest single outlay of tax dollars in Canadian history … [in this case] … In a new directive, firms interested in maintenance work on the $60 billion Canadian Surface Combatant program have been told they can’t talk to journalists and instead must refer all inquiries to Public Services and Procurement Canada … [and] … At the same time, a public interest researcher who is seeking details about the industrial benefits and jobs supposedly to be created by the surface combatant project has been informed by government it will take at least three and a half years to get any such documents under the Access to Information law.

Mr Pugliese says, and these are two very worrying points, that:

  • The media ban imposed by Procurement Canada on firms interested in maintenance work on that fleet is the fifth such order in the last year involving the purchase of military equipment or ships, according to documents compiled by Postmedia; and
  • Industry representatives have sent the news organization the documents, warning about the growing secrecy at Procurement Canada. The records include a ban on firms talking to journalists about the Canadian Surface Combatants, the purchase of next generation fighter jets, a light icebreaker, a Defence department satellite, as well as a military pilot training contract. Industry executives point out the secrecy is not based on security concerns but on worries the news media will be able to use the information to keep close tabs on the problem-plagued military procurement system.

The Trudeau regime seems obsessed with secrecy and wants to bend all factual information to suit its narrative that it is spending our money as we might wish … which is, of course exactly what the Trudeau campaign said about Prime Minister Stephen Harper

To the surprise of nobody, Ontario’s cannabis stores are still struggling

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

The Ontario government created a tightly restricted retail market regime for newly legal cannabis sellers, with a tiny number of licenses issued and highly bureaucratic “safeguards” for the retailers’ guidance and control. The city of Toronto, for example, with a population in the 2.7 million range, was allocated a whopping five stores. Only one of those stores was allowed to open on the first day of legal retail sales, and today there are three in operation, despite penalties and potential loss of licenses at stake for those who haven’t opened yet. The chorus of complaints from would-be customers has not diminished much, if at all since day one:

With legalization day long come and gone (and the euphoria of being able to spark a joint in public gone with it), the turtle-paced roll-out of Toronto’s weed retail scene goes to show the government and the OCS have some work to do before purchasing legal weed can be completely glitch-free (and lineup free, too).

Here are a few of the lows of getting high, courtesy of Toronto weed stores since buying pot became legal.

Weed prices are up
According to Statistics Canada, prices for weed have steadily been on the up and up since legalization last year.

While Nova Cannabis is trying to tackle its biggest competitor (illicit weed stores) with Black Market Buster deals, people who are buying their cannabis from the OCS are now paying an average of about $9.99 per gram—that’s roughly $3 more than those buying their bud from illegal stores.

Black market weed is still thriving
There’s still around 20 illegal dispensaries operating in the city, and at least 100 illegal marijuana delivery services. Why? See above: unlicensed weed stores are significantly cheaper than the legal ones, and loopholes in the city’s laws allow them to operate pretty much undisturbed, save for the occasional raids.

[…]

OCS packaging
Aside from the fact every product coming out of the OCS comes triple-wrapped in excessive, sometimes non-recyclable polypropylene packaging, the containers are just plain confusing.

Lack of packaging standards means your order comes in all shapes and sizes, regardless of whether you’re getting bud or pre-rolled joints, which is as confusing for buyers as it is for those behind the counter.

And that doesn’t even include the even louder chorus of complaints about the quality of the legal product…

April 29, 2019

Cannabis stores struggling against cheaper black market weed outlets

Filed under: Business, Cancon, Law, Liberty — Tags: , , , , , — Nicholas @ 05:00

In a rational world, a license to sell legal cannabis from a storefront where you have almost a legal monopoly would be a license to print money — the market demand is very clearly real and widespread. Yet Toronto’s legal cannabis stores are still suffering:

How much would it suck to go through all the trouble of opening a legal weed store, only to have dozens of people do the exact same thing without paying for permits, inspections or meeting any sort of government regulations?

How much would it suck to then watch these people not only get away with their illegal operations, but do so while luring your customers away with cheaper prices?

Probably as much as it would suck to sink years of your life into building a retail cannabis business and then learning that only 25 of such stores could exist in all of Ontario — and that the owners of those stores would be chosen at random.

It’s been nearly one month since Doug Ford’s PC government allowed the first wave of brick and mortar retail cannabis stores to open across Ontario. Three have launched so far in Toronto, where five licenses were issued in total, but many consumers aren’t pleased with consistently long lines and higher (than pre-legalization) prices.

So, like the rest of Canada, Toronto continues to buy black market weed.

Roughly 20 unlicensed dispensary storefronts are still up and running across the city as of April 25, in addition to more than 100 illegal marijuana delivery services.

You can find them all on WeedMaps, a popular online cannabis community that’s been listing these types of businesses for adult consumers in North America since 2008.

It’s not that police and bylaw enforcement officers can’t find these illicit dispensaries — I mean, operators are advertising their locations and menus online for all to see.

The problem is that no level of government can (or will) shut them down for very long.

“Why not?” you ask? Well, it’s complicated.

QotD: Prostitution

I had a few patients who were prostitutes. I remember one well-dressed lady in her 40s, whose profession I asked in the course of my history-taking.

“Dominatrix,” she said.

She was obviously very good at it because she had an international clientele, including, for example, a judge in Alabama. She told me that she never went anywhere in her car without her kit, for she might receive an emergency call at any time from Hong Kong or South Africa. You might have thought that being whipped by one woman in black fishnet stockings was as good as being whipped by another, but apparently this was (and I presume still is) not so: It’s the words and gestures that go with the whipping that count as well.

This activity of hers gave her a very good living (her car was far better than mine); she was sending her daughter to private school. I admired her enterprise and thought of Sor Juana Inés de la Cruz. Was she or the judge in Alabama to blame? Was either of them to blame at all?

Of course, she wasn’t typical of the profession, and hard cases, as they say, make bad law. But I am not at all sure that I saw the poor prostitutes in my street as merely victims, as the new French law would have them. Not everyone with their life history becomes a crack-taking prostitute. This does not mean that I did not pity them for what they had become. If we can truly sympathize only with those who have done nothing to contribute to their own fate, we shall have very restricted sympathies indeed.

Theodore Dalrymple, “Turning Tricks Into Sympathy”, Taki’s Magazine, 2016-04-09.

April 27, 2019

QotD: When McDonald’s came to Moscow

Filed under: Business, Europe, Quotations, Russia — Tags: , , , — Nicholas @ 01:00

[In an NPR broadcast] McDonald’s is positively portrayed as being an excellent, almost heroic, force for good. McDonald’s manner of doing business is celebrated as changing social norms for the better – for making the world (or at least Russia) not only a more consumer-friendly place, but also a more pleasant, a more polite, a more respectful, and a (yes) more happy place.

Listeners are reminded at the start of the clip that Americans smile a lot, including at strangers. Russians – and, especially, Russians under Soviet domination – did not smile very much. Then McDonald’s opened in Moscow in 1990. McDonald’s trains its workers to smile at customers, and to be polite and friendly. We then learn – from one of the Russians who worked at that McDonald’s in Moscow – that that restaurant became a place of pleasant refuge for Muscovites. The simple, smiling friendliness and politeness that Americans take for granted was, in Russia, actively sought after by many Russians and embraced by their choosing to dine at McDonald’s.

Commerce – voluntary exchange – is essential for what Deirdre McCloskey calls “market-tested betterment.” This betterment, however – and Deirdre would agree – is manifested not only in new and better material products but also in the ways in which businesses treat consumers. In market economies consumers are valuable to businesses; in these economies consumers are treated by businesses as respected guests. In contrast, in non-market economies – in economies in which prices and profits are prevented from moving in market-clearing directions – consumers are treated by ‘businesses’ as repellant pests.

Don Boudreaux, Doux Commerce, avec Sourires“, Café Hayek, 2016-06-17.

April 24, 2019

Opponents claim Doug Ford is using booze liberalization as a distraction … if so, it’s working well

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

Chris Selley documents just how Ontario Premier Doug Ford’s opponents are unable to ignore the (personally teetotal) Ford’s alcohol-related proposals:

A peculiar affliction has broken out among Ontarians who think their relatively new government is devoting far too much time and attention to liberalizing alcohol laws: They can’t stop talking about it.

I don’t mean people with entirely fair public health concerns (though I think those concerns are pretty marginal, given the modest changes). And I don’t mean the pearl-clutching hordes who think allowing alcohol consumption in parks will lead to mayhem, no matter how civilized the results might demonstrably be elsewhere. (That peculiarly Ontarian crew has certainly made itself heard, though, and it seems to include a surprising number of progressive millennials.)

I mean people who didn’t have particularly strong views one way or the other about 9 a.m. mimosas, tailgate parties, drinking in parks or buying beer at the corner store, or might even have supported some legislative relaxation, but who now can’t stop railing against them even as they deplore the government’s actions on objectively more serious files.

[…]

On letters and op-ed pages, you’ll find the topic of booze popping up in all sorts of places it objectively doesn’t belong — not if one doesn’t want to be distracted, anyway. It seems to lead people down all sorts of strange blind alleys. One Toronto Star columnist noted that neither Premier Doug Ford nor Finance Minister Vic Fedeli will “touch a drop themselves,” but that “they are making it easier for you to access just in time for breakfast, happy hour, or a nightcap.” So what? Why would anyone want the premier’s or finance minister’s personal tastes and preferences influencing public policy?

Another Star columnist spent seven paragraphs sneering at the idea of tailgating in Ontario before declaring herself perfectly fine with the idea. “But,” she asked, “is tailgating what Ontario needs?” Is that the standard, then? Government shall only allow the masses such entertainments as they “need”?

Using booze as a “distraction” is not a new tactic. It became a running joke during Kathleen Wynne’s tenure that whenever things were going (especially) badly for her government, she would pop up to announce another batch of supermarkets authorized to sell beer and cider (and sometimes, though much more rarely, wine!).

April 22, 2019

Internal challenges to Microsoft’s current discriminatory hiring practices

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

At Quartz, Dave Gershgorn looks at how Microsoft is facing internal dissent over their current hiring practices, which actively encourage discrimination against certain racial and gender groups:

Some Microsoft employees are openly questioning whether diversity is important, in a lengthy discussion on an internal online messaging board meant for communicating with CEO Satya Nadella.

Two posts on the board criticizing Microsoft diversity initiatives as “discriminatory hiring” and suggesting that women are less suited for engineering roles have elicited more than 800 comments, both affirming and criticizing the viewpoints, multiple Microsoft employees have told Quartz. The posts were written by a female Microsoft program manager. Quartz reached out to her directly for comment, and isn’t making her name public at this point, pending her response.

“Does Microsoft have any plans to end the current policy that financially incentivizes discriminatory hiring practices? To be clear, I am referring to the fact that senior leadership is awarded more money if they discriminate against Asians and white men,” read the original post by the Microsoft program manager on Yammer, a corporate messaging platform owned by Microsoft. The employee commented consistently throughout the thread, making similar arguments. Quartz reviewed lengthy sections of the internal discussion provided by Microsoft employees.

“I have an ever-increasing file of white male Microsoft employees who have faced outright and overt discrimination because they had the misfortune of being born both white and male. This is unacceptable,” the program manager wrote in a comment later. The Microsoft employees who spoke to Quartz said they weren’t aware of any action by the company in response, despite the comments being reported to Microsoft’s human resources department.

When contacted by Quartz, Microsoft pointed to comments by three company officials in the message-board threads. A member of Microsoft’s employee investigations team responded to the initial post in January, writing that the company does not tolerate discrimination of any kind. Another Microsoft staff member, who leads the team that helps the board of directors determine executive pay, explained the diversity-based compensation initiative. “Our board and executive leadership team believe diverse and inclusive teams are good for business and consistent with our mission and inspire-to culture,” she wrote. “Linking compensation to these aspirations is an important demonstration of executive commitment to something we believe strongly in.

April 16, 2019

‘Tis Eastertide, and so the professional miserablists are going after Easter Eggs, of course

Filed under: Britain, Business, Economics, Environment, Food — Tags: — Nicholas @ 03:00

In the Continental Telegraph, Tim Worstall tells the worried environmentalists that no, it does not make sense to ban Easter eggs — for their “wasteful” packaging — on environmental grounds:

One of the more silly of the current environmental concerns is the worrying about the quantity of packaging that goes into – or around – Easter eggs. There’s an underlying mistake being made here, one which none of the proponents of action have bothered to recognise, let alone think about. Which is, well, what’s the purpose? The point of all this human activity we call an economy?

As any economist could and would tell you we’re after the maximisation of human utility. Given the constraints placed upon us by reality – the availability of stuff with which to do things, technologies we know about to do things to stuff with – we want humans to be as happy as they can be. We want, in short to maximise the amount of joy in the world.

At which point, packaging. Sure, no doubt there’s a certain harm that befalls us all from the creation of packaging and its disposal. Why not? There are costs and benefits to everything of course. But that’s the point, while there may be costs there are also benefits. So, yes, OK, there are costs to packaging.

[…]

At no point is even consideration given to the idea that the packaged egg might produce that joy. Which, given that we do indeed go buy these things each year to give to each other, is odd, isn’t it? Why are we giving each other expensive – as opposed to cheap – chocolate? Because, obviously enough, the dressing of the chocolate is something that produces that joy.

We can even have a stab at quantifying matters.

The cost is 3,000 tonnes of packaging. We know what that costs us, the value of the landfill tax. Around £80 a tonne. So, call it quarter of a million pounds. Spending upon Easter eggs is some £400 million a year. The joy produced must be of greater value than that £400 million otherwise we’d not be spending it in the first place. And yes, £400 million is more than £250,000.

We thus have our answer to the prodnoses worrying about the cost of Easter egg packaging. Piss off matey, you’ve missed the point entirely.

April 11, 2019

What happens if you block access to all of Google’s IP addresses?

Filed under: Business, Technology — Tags: , , — Nicholas @ 04:00

The answer is … not a lot, or at least not quickly. So many companies use Google’s services in the background that even if you can get a particular site to work for you, it’ll very likely be as slow as a mid-90’s dial-up connection. Stephen Green reports on someone’s live experiment with a Google-less internet:

Behind the scenes, [Gizmodo’s Kashmir] Hill’s specialty VPN blocked her devices from trying to ping Google’s servers more than 15,000 times — in just the first few hours. After a week, it had stopped more than 100,000 attempts to share data with Google. And to repeat, this is after Hill had stopped using any of Google’s apps or services. The company has its tendrils all throughout the internet.

As Hill describes the process in her report to Gizmodo:

    I migrate my browser bookmarks over to Firefox (made by Mozilla).

    I change the default search engine on Firefox and my iPhone from Google — a privilege for which Google reportedly pays Apple up to $9 billion per year — to privacy-respecting DuckDuckGo, a search engine that also makes money off ads but doesn’t keep track of users’ searches.

    I download Apple Maps and the Mapquest app to my phone…

    I switch to Apple’s calendar app.

    I create new email addresses on Protonmail and Riseup.net (for work and personal email, respectively) and direct people to them via autoreplies in Gmail.

Hill did literally everything an internet-connected human being can do to disconnect themselves from Google. But you don’t have to be a Google customer in order to have the company garner 100,000 little bits of data about you every single week. Or as Hill herself says, “Google, like Amazon, is woven deeply into the infrastructure of online services and other companies’ offerings, which is frustrating to all the connected devices in my house.”

The fact is, you aren’t Google’s customer: You and your data are Google’s product, served up on an electronic platter to advertisers and God-Only-Knows-Who-Else… even if, like me, you’ve boycotted all of the company’s little data-sniffing products.

As a libertarian, I have philosophical issues with the whole idea of antitrust. But when a company grows so big and so pervasive that you can’t avoid becoming its tool — even when going to the extreme lengths Hill went through — then I can draw only one conclusion, expressed in three words.

Break. Them. Up.

April 8, 2019

Comparing the economic performance of China’s private versus state-owned companies

Filed under: Business, China, Economics, Government — Tags: , , , — Nicholas @ 03:00

If you’ve been following the blog for a while, you’ll know that I’ve long been skeptical of any official economic statistics coming out of China. The reasons for my skepticism are that vast areas of the Chinese economy were owned or controlled by the state and reporting from those entities was performed through layers of officials whose positions and personal well-being depended on those reports being as positive as possible. In a capitalist system, announcing false production or profit figures will eventually be detected (sometimes not as soon as we’d like), and the company loses the trust of customers, suppliers, and banks, making survival much more difficult. In a state-owned organization, everyone in the hierarchy has a vested interest in false information not being uncovered or reported. In a private firm, you could lose your job … in a state-run enterprise, you could be shot or sent to a “re-education camp” along with all your family. The incentive to lie is much stronger when your risks are that high.

Tim Worstall comments on a recent report that compares the performance over time of Chinese private companies, privatized state companies, and companies that are still state-run:

That China has relaxed the governmental grip upon industry in recent decades is true. That China has become very much richer in recent decades is also true. The two are not a coincidence, there’s causality there. However, we hear often enough that it’s the residual control over industry by the government that drives that success. Sure, OK, so the bureaucracy doesn’t specify prices or detailed actions but the general guidance provided by a politically driven bureaucracy explains the outperformance.

Except it doesn’t. Those former state industries still enjoying that government guidance perform worse than the free market firms sadly lacking it. State planning is keeping China poorer than it need be, not aiding its growth.

The report he’s commenting on:

Changing the tiger’s stripes: Reform of Chinese state-owned enterprises in the penumbra of the state
Ann Harrison, Marshall W. Meyer, Will Wang, Linda Zhao, Minyuan Zhao 07 April 2019

The conventional wisdom that privatisation of state-owned enterprises reduces their dependence on the state and yields positive economic benefits has not always been borne out by empirical work. Using a comprehensive dataset from China, this column shows that privatised SOEs continue to benefit from government support in the form of low-interest loans and subsidies relative to private enterprises that have never been state-owned. Although there are clear improvements in performance post-privatisation, privatised SOEs continue to significantly under-perform compared to private firms.

Much of China’s economic growth has been driven by the emergence of a vibrant private sector, today accounting for approximately 60% of GDP and 80% of employment. Conventional wisdom holds that privatisation of state-owned enterprises (SOEs) reduces their dependence on the state and yields positive economic benefits including enhanced firm performance, productivity, and innovation. The pro-privatisation argument is that the state either cannot monitor managers properly or chooses not to pursue efficiency because state interests take precedence over financial results (Boardman and Vining 1989, Vickers and Yarrow 1991, Shleifer and Vishny 1994). Empirical work, however, has produced mixed results on privatisation. For example, DeWenter and Malatesta (2001) found that, among the 500 largest firms globally in 1975, 1985, and 1995, private enterprises had significantly lower costs and higher profits than SOEs. Yet, when they examined a sub-sample of privatised firms, they found inconsistent results – performance increased post-privatisation, while leverage and employment increased mainly pre-privatisation. Market returns from privatisation also differed across countries, positive in Hungary, Poland, and the UK but insignificant elsewhere.

Our research on privatisation in China (Harrison et al. 2019) is unique in several respects. We analyse an extremely large sample of industrial firms, more than 3.5 million firm-years from 1998 to 2013, drawing on the Annual Industrial Survey conducted by the China National Bureau of Statistics. We compare privatised firms with firms that remained state-owned and firms that had never been state-owned. Most importantly, we compare both the performance and dependence on the state of privatised firms with firms having no prior state ownership. Overall, our results indicate selective performance gains from privatisation – privatised firms have greater productivity and are more likely to file patents than firms remaining state-owned even though their return on assets barely improves. The performance effects notwithstanding, privatised firms remain dependent on the state. Subsidies, concessionary interest rates, and loans granted to privatised firms remain at nearly the same levels as those to SOEs. Privatisation changes the behaviour of firms but not firms’ dependence on the state.

A graphical portrayal of the differing performance of the three types of Chinese companies from the report:

Return on assets of state-owned enterprises, privatised state-owned enterprises, and privately-owned enterprises

QotD: Why does US healthcare cost so much?

Filed under: Bureaucracy, Business, Economics, Health, Quotations, USA — Tags: , , — Nicholas @ 01:00

This is a hotly debated question in health care policy. Here’s my rough stab at it: the 1970s inflation interacted particularly badly with two pre-existing policy choices: the tax deduction for employer-sponsored health insurance, and Medicare.

Start with employer-sponsored health insurance, which is, as everyone knows, tax advantaged relative to salary, because your employer can deduct it as an expense, but you don’t have to show it as income on your taxes.

This was an incredibly dumb decision, but in the defense of the folks who made it in the 1940s, at the time, health insurance wasn’t very expensive, because the health care system couldn’t do all that much (and the female labor that ran hospitals was cheap due to discrimination, or in the case of nuns, basically free).

Come the 1970s, inflation started causing a problem called “bracket creep”. Back then tax brackets weren’t indexed for inflation, so as inflation went up, folks got pushed into higher and higher tax brackets, even though the buying power of their salary had stayed the same, or [had] gone down. This was great for the government (and is a big reason our deficits were not disastrous in the 1970s), but it was terrible for people, and led to the tax revolts that helped put Reagan in office.

But I digress. The point is that bracket creep made non-taxed benefits much more attractive relative to salary, so insurance started getting more generous. That process has continued for decades. Insurance used to be “major medical” that covered big ticket items like hospital stays. Now we expect it to cover the cost of going to the doctor for the sniffles. Well, if you insulate people from those costs, they will incur more of them.

Effectively, this raises demand for health care services. But the US system, decentralized and litigation-happy, is very bad at controlling the supply side. End result: high costs.

The other thing that happened is Medicare. The original legislation called for reimbursing services at “reasonable and customary rates”. This was a gold mine for doctors and hospitals. In New York, for example, doctors used to be forced to do charity care as the price of their admitting privileges at prestigious city hospitals. Once Medicare came into the picture, there was no need for that! Or to economize on beds; you could always find someone to fill them. Eventually, Medicare tried to crack down (http://reason.com/archives/2011/12/13/medicare-whac-a-mole), but by then, it was damned hard to cut physician and hospital incomes, in part because they had made decisions based on their — like building new hospitals with all private rooms — that couldn’t be undone. Our cost base is permanently higher, and politically, we have shown no will to slash provider incomes. So even though our growth rate is about average for the OECD, we’re growing from a much higher level.

Megan McArdle, “Ask Me Anything”, Reddit, 2017-04-10.

April 7, 2019

Justin’s SNC-Lavalin swamp … how deep does it go?

For a penny-ante scandal where there’s no hint of sexual impropriety or unmarked bundles of bills being passed along in brown paper bags, Justin’s SNC-Lavalin scandal looks more and more interesting the more we look at it:

A game-changing bombshell lies buried in the supplementary evidence provided to the House of Commons Judiciary Committee by former Attorney General Jody Wilson-Raybould.

It has gone virtually unreported since she submitted the material almost a week ago. As far as we can find, only one journalist — Andrew Coyne, columnist for the National Post — has even mentioned it and even then he badly missed what it meant, burying it in paragraph 10 of a 14 paragraph story.

The gist of the greatest political scandal in modern Canadian history is well-known by now. It’s bigger than Adscam, the revelation 15 years ago that prominent members of the Liberal Party of Canada and the party itself funneled tens of millions of dollars in kickbacks into their own pockets from federal spending in Quebec sponsoring ads promoting Canadian unity. That was just venal politicians and a crooked political party helping themselves to public money.

The Trudeau-SNC-Lavalin scandal is so much more, involving the corruption of the supposedly non-partisan civil service, and even the judiciary, for the political benefit of a disgraced political party, and a cover-up endorsed, encouraged and actively engaged in by the sitting Members of Parliament of that political party.

[…]

Which brings us to the ticking-timebomb-evidence the committee and the public didn’t get to hear.

In between the appearances by Butts and Warnick, Wilson-Raybould testified to getting a report from her chief of staff who had had a meeting with Butts and Trudeau’s chief of staff Katie Telford. They aggressively pushed the attorney general to get an “outside” opinion from someone like the retired Chief Justice of the Supreme Court, Beverley McLachlin, on dropping the criminal charges against SNC-Lavalin in favour of a non-criminal plea deal.

Wilson-Raybould took contemporary notes of what her staff member told her.

    “My COS (chief of staff…ed) asked what if the opinion comes saying “She can review it, but she shouldn’t” or simply “She can’t review it” end of story? Mr. Butts stated “It wouldn’t say that.”

BOOM!!!!!!

Read what Butts said again. And again. And again.

“IT WOULDN’T SAY THAT”

H/T to Halls of Macademia and Small Dead Animals for the link.

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