Quotulatiousness

November 12, 2010

Another call to keep the Harrier in operation

Filed under: Britain, Economics, Military — Tags: , , , , — Nicholas @ 08:33

The Economist sums up the arguments in favour of retaining the Harrier over the RAF’s preferred Tornado:

Francis Tusa of Defence Analysis, a newsletter, reckons that retiring the much more maintenance-heavy Tornados instead of the Harriers would have saved £4 billion-5 billion, while keeping Ark Royal going would cost only about £120m a year. He adds that getting out of the strike-carrier business for ten years means that critical skills will be lost. Others, including the letter’s authors, fear that the “carrier gap” will mean Britain loses the ability to carry out autonomous expeditionary missions. Among other things, that would, they say, leave the Falkland Islands (and their valuable oilfields) vulnerable to attack.

What appears to have changed the new (and inexperienced) National Security Council’s mind at the last moment was the air force’s claim that the Tornado was more effective than the Harrier in Afghanistan. It is odd that this was regarded as a clinching argument, as there are more than enough jets in Afghanistan. It is true that in terms of range, payload, speed and its ability to hit moving targets, the Tornado wins. On the other hand, the Harrier can operate from makeshift landing sites, is more flexible and reliable and could easily be equipped with the advanced Brimstone anti-tank missiles carried by the Tornado. And for five months of the year in Afghanistan, when the weather is hot, the Tornado can only take off with a similar weapons load to the Harrier.

The RAF’s enthusiasm for the Tornado is understandable. It does not have to share it with the navy (the Harrier is operated by a Joint Strike Wing) and it needs a lot more people to operate it (saving air-force jobs). Mr Tusa suggests a sensible compromise that would still save billions of pounds: get rid of half the Tornados, keeping 60 until they are not needed in Afghanistan; retain 20 Harriers for carrier duty until their replacements arrive in 2020; and accelerate the deployment of the strike version of the Typhoon. Time for a rethink.

November 10, 2010

Pompeii building collapse triggers calls for nationalization privatization

Filed under: Bureaucracy, Economics, Europe, History, Italy — Tags: , , — Nicholas @ 13:30

I never thought I’d read an article in the Guardian calling for the privatization of a state asset:

Opposition politicians and commentators accused Italy’s government of neglect and mismanagement today over the collapse of the 2,000-year-old House of the Gladiators in the ruins of ancient Pompeii.

Some commentators said the Unesco world heritage site should be privatised and removed from state control. La Stampa newspaper ran a story headlined “Pompeii — the collapse of shame,” echoing national opinion over the cultural disaster.

The stone house, on one of the site’s main streets and measuring about 80 sq m (860 sq ft), collapsed just after dawn yesterday while Pompeii was closed to visitors. The structure was believed to have been used as a club house by gladiators before they went to battle in a nearby amphitheatre.

[. . .]

“Precisely because it belongs to all humanity, its management should be taken away from a state that has shown itself incapable of protecting it,”

[. . .]

Approximately 2.5 million tourists visit Pompeii every year, making it one of Italy’s most popular attractions. Art historians and residents have for years complained that the sites were in a state of decay and needed regular maintenance. Two years ago the government declared a state of emergency for Pompeii but it lasted only a year.

Roberto Cecchi, under-secretary at the culture ministry, said there had been no effective, continuous maintenance at Pompeii in half a century. Breaking ranks with his ministry, he said stop-gap, ad hoc measures, such as the appointment of commissioners, which attracted flashes of publicity, were no substitute for the constant monitoring worthy of a world treasure.

To be fair, the Guardian is merely reporting on the calls for privatization, not explicitly endorsing them, but even that is shocking enough.

November 9, 2010

The real disconnect between Obama and the economy

Filed under: Economics, Politics, USA — Tags: , — Nicholas @ 13:08

Victor Davis Hanson points out the way in which Barack Obama’s worldview does not reflect economic reality:

[. . .] what troubles me is that the president seems unaware of this old divide — that what allowed the pre-presidential Obamas, respectively, to make quite a lot of money as a legislator, author, professor, lawyer, or hospital representative was a vibrant private sector that paid taxes on profits that fueled public spending and employment or made possible an affluent literary and legal world. All that was contingent upon the assurance that an individual would have a good chance of making a profit and keeping it in exchange for incurring the risk of hiring employees and buying new equipment.

Instead, Obama seems to think that making money is a casual enterprise, not nearly so difficult as community organizing, and without the intellectual rigor of academia — as if profits leap out of the head of Zeus. I say that not casually or slanderously, but based on the profile of his cabinet appointments, his and his wife’s various speeches relating Barack Obama’s own decision to shun the supposed easy money of corporate America for more noble community service in Chicago, and a series of troubling ad hoc, off-the-cuff revealing statements like the following:

As a state legislator Barack Obama lamented the civil rights movement’s reliance on the court system to ensure equality-of-result social justice rather than working through legislatures, which were the “actual coalition of powers through which you bring about redistributive change.” To Joe Wurzelbacher, he breezily scoffed that “my attitude is that if the economy’s good for folks from the bottom up, it’s gonna be good for everybody. I think when you spread the wealth around, it’s good for everybody.” When Charlie Gibson pressed presidential candidate Obama on his desire to hike capital gains taxes when historically such policies have decreased aggregate federal revenue, a startled Obama insisted that the punitive notion, not the money, was the real issue: “Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness.” And as President Obama, again in an off-handed matter, he suggested that the state might have an interest on what individuals make: “I mean, I do think at a certain point you’ve made enough money.”

In other words, for most of his life Barack Obama has done quite well without understanding how and why American capital is created, and has enjoyed the lifestyle of the elite in the concrete as much as in the abstract he has questioned its foundations.

November 8, 2010

Credit where it’s due

Filed under: Economics, USA — Tags: — Nicholas @ 08:22

When I posted an article last week about the people in the bubble, I linked to and credited Margaret Wente as the original author. I didn’t realize she was basing her column to a large extent on an article by Charles Murray in the Washington Post from about a week earlier than that. She mentioned his “recent column”, but that didn’t really illustrate how much of her article was built on his.

As you can tell, Wente used Murray’s model and wrote a Canadianized version of the same story:

When they leave college, the New Elite remain in the bubble. Harvard seniors surveyed in 2007 were headed toward a small number of elite graduate schools (Harvard and Cambridge in the lead) and a small number of elite professional fields (finance and consulting were tied for top choice). Jobs in businesses that provide bread-and-butter goods and services to individual Americans, which make up the overwhelming majority of entry-level openings for aspiring managers, attracted just 1.7 percent of the Harvard students who went to work right after graduation.

When the New Elite get around to marrying, they don’t marry just anybody. One of the funniest and most bitingly accurate parts of “Bobos in Paradise” was Brooks’s analysis of the New York Times‘s wedding announcements. Go back to 1960, and the page was filled with brides and grooms who grew up wealthy but whose educations and occupations did not offer much indication that they were going to set the world on fire. Look at the page today, and it is studded with the mergers of fabulous résumés.

Three examples lifted from last Sunday’s Times: a director of marketing at a biotech company (Stanford undergrad, Harvard MBA) married a consultant to the aerospace industry (Stanford undergrad, Harvard MPP); a vice president at Goldman Sachs (Yale) married a director of retail development for a financial software firm (Hofstra); and a third-year resident in cardiology (Yale undergrad) married a third-year resident in pathology (Columbia undergrad, summa cum laude).

The New Elite marry each other, combining their large incomes and genius genes, and then produce offspring who get the benefit of both.

[. . .]

We know, for one thing, that the New Elite clusters in a comparatively small number of cities and in selected neighborhoods in those cities. This concentration isn’t limited to the elite neighborhoods of Washington, New York, Boston, Los Angeles, Silicon Valley and San Francisco. It extends to university cities with ancillary high-tech jobs, such as Austin and the Raleigh-Durham-Chapel Hill triangle.

With geographical clustering goes cultural clustering. Get into a conversation about television with members of the New Elite, and they can probably talk about a few trendy shows — “Mad Men” now, “The Sopranos” a few years ago. But they haven’t any idea who replaced Bob Barker on “The Price Is Right.” They know who Oprah is, but they’ve never watched one of her shows from beginning to end.

Talk to them about sports, and you may get an animated discussion of yoga, pilates, skiing or mountain biking, but they are unlikely to know who Jimmie Johnson is (the really famous Jimmie Johnson, not the former Dallas Cowboys coach), and the acronym MMA means nothing to them.

Charles Murray wrote the at-the-time highly controversial The Bell Curve with Richard J. Herrnstein, so his insight into social and demographic changes deserve attention.

H/T to Terry Teachout, who uncharacteristically mistakes Murray’s description of a general case and tries to prove that he himself doesn’t fit that mould.

November 6, 2010

Robert Fulford on Dierdre McCloskey’s latest book

Filed under: Books, Economics, History, Media — Tags: , , , , — Nicholas @ 12:19

As a dabbler in economic thought (but not an economist), I’m always interested in new books on different aspects of economics. Robert Fulford has probably prompted me to buy Deirdre McCloskey’s Bourgeois Dignity: Why Economics Can’t Explain the Modern World:

In a time of sharply limited budgets, this gives a special urgency to the ideas of Deirdre McCloskey, an economic historian at the University of Illinois. She thinks she knows how economic growth works.

Why did northwestern Europe begin growing rich in the 17th century, a process that continues to this moment? Why did various countries elsewhere in Europe have similar success, along with countries created by Europeans, including the United States and Canada?

McCloskey sets aside most of the reasons for prosperity that her academic peers identify. Scientific innovation, natural resources, education, Protestant theology, trade agreements — these can be important but they do not explain global patterns. Often, they are present in societies that have failed.

The West’s success, McCloskey believes, turns out to be a question of imagination, attitude and sensibility. It depends on how we talk and write about business — in fact, how people in the West feel about it.

Fulford also points out that McCloskey has had a very unusual life:

It’s not possible to write about McCloskey without noting the most remarkable aspect of her life, which she described eleven years ago in Crossing: A Memoir. In 1995, Donald McCloskey, a 52-year-old professor, married for 30 years, a father of two, realized that his real identity was as a woman. He began a program of hormone treatment, multiple surgeries and electrolysis, emerging as Deirdre.

As a scholar, she noted that this physical change involved a cultural transformation as well. Having been both a man and a woman, she drew up a long list of changes she’s discovered in herself. Here are a few of them. She cries, she likes cooking, she’s more easily startled by loud noises, she listens intently to stories people tell of their lives and craves detail. She can’t remain angry for long. She’s less impatient, drives less aggressively, has more friends. She’s stopped paying attention to cars and sports. And she feels duty-bound to wash the dishes.

The people in the bubble

Filed under: Cancon, Economics — Tags: , , , , — Nicholas @ 11:28

Margaret Wente has a little test for you to determine if you’re in the “elite”:

Before we venture further into this battle zone, you can calculate your elite status by taking this patented Elite-O-Meter test. See how you rate!

Your degree is from:

An American Ivy League university or Stanford (Score: +40)
Queen’s, McGill, the University of Toronto, Western or UBC (+20)
The University of Ottawa or other (-20)

Your children’s degrees are from:

An American Ivy League university, etc. (+30)
Queen’s, etc. (+10)
The University of Ottawa or other (-20)

What do these initials stand for?

NPR (+10 if you know)
MMA (-20 if you know)

(For Torontonians)

None of your friends voted for Rob Ford (+20)
One of your friends voted for Rob Ford (0)
You voted for Rob Ford (-20)

For a good time, you prefer

Luminato (+20)
A tailgate party in Buffalo (-20)

Who is Carol Off? (+20)

Who is Jimmie Johnson (not the football coach)? (-40)

To get some exercise, you prefer

Yoga and Pilates (+10)
Hunting and fishing (-20)

Have you ever had a housekeeper or nanny? (+10)

Have you ever been a housekeeper or nanny? (-20)

Have you ever had a job that made your feet tired by the end of the day? (Teaching, or jobs during high school and university, don’t count.) (-40)

As an adult, have you ever lived in a small town for at least a year? (University towns don’t count.) (-20)

Have you ever read a book by Michael Ignatieff? (+50)

Have you ever read a book by Tim LaHaye? (-20)

Your idea of good TV is

The Sopranos or Mad Men (+20)
Oprah or The Price is Right (-20)

Needless to say, the higher you scored, the more Elite you are. If you are on the plus side of the Elite-O-Meter, there’s a good chance you belong to Richard Florida’s Creative Class. You are probably (or soon will be) in the top 10 per cent of income earners, and you are probably married to someone a great deal like yourself. Congratulations! You are the product of the modern meritocracy. Although your family may have come from humble origins, you have joined the ruling class — the one that runs our major institutions, including governments, the law and the media.

For the record, I scored -70. That confirms what I suspected: I’m not “elite” by downtown Toronto standards.

November 5, 2010

Monty on the social security Ponzi scheme and Ireland’s coming crisis

Filed under: Economics, Europe, Politics — Tags: , , , — Nicholas @ 12:11

The always interesting Monty reminds everyone that social security won’t be there when you most need it:

Generational warfare is all but a certainty at this point as the lie that is Social Security festers and grows unchecked. All I can say is: reality will assert itself, sooner or later. Don’t get caught short — save enough of your own money to fund your own retirement, because Uncle Sugar is going to screw you just as surely as the sunrise. Pull quote:

There will be pain. The system will gore a lot of oxen. The obvious victims will be the oldsters who have become dependent on Federal handouts. They are a powerful swing vote today, but they are in the minority. When the majority of working citizens finally perceive that it is an inescapable choice between handouts to oldsters vs. their families’ solvency, they are going to vote away the oldsters’ handouts.

Social Security only survives at the suffrance of the taxpayers who fund it. Pay particular attention to the part where it’s explained in terrifyingly clear detail that it doesn’t matter how much you paid in: you were paying a tax, not a contribution to a savings account. Uncle Sam can legally stiff you at any time.

And on the Irish financial crisis:

That Irish austerity program just went from “painful” to “Oh my God I think I just barfed up a lung”. The problem in Ireland, as in Greece, is that you somehow have to convince your own citizens to accept dire reductions in their own quality-of-life to make sure that (mostly foreign) bondholders don’t have to take a haircut. I suspect that this strategy will fail, and end in default. Which, really, is probably the best course of action for the PIIGS — get off the Euro, go back to the old national currencies, and devalue. Yes, they will be shut out of the credit markets for a while, but not for all that long in relative terms. And the alternative — extreme civil unrest — is worse.

November 4, 2010

The continuing dramedy of the A400M

Filed under: Bureaucracy, Economics, Europe, Germany, Military — Tags: , , — Nicholas @ 12:09

Remember when the opposition were up in arms that Canada wasn’t going to be buying the new A400M for the Canadian Forces? That decision is looking better and better:

Germany has cut its order for A400M transports from 60 to 57. This was in response to demands from the manufacturer for more money. This is not a new problem, but for those who have already ordered the A400M, it’s getting old. The new European military transport, the A400M, is already three years late and billions of dollars over budget. Those who have already placed orders (for 180 aircraft) have been told that the price they thought they were going to pay ($161 million per aircraft) will go up twenty percent. In response, some major buyers said they were considering cancelling their orders. In turn, the manufacturer said that such actions would force the cancellation of the project. With the German reduction of its order, it looks like the A400M will be getting more expensive, to the point where it will be twice what the new C-130J costs. The A400M made its first flight 11 months ago.

[. . .]

During the Cold War, such air transports were very low priority in Europe, because if there was a war, the mighty Red Army of the Soviet Union was going to home deliver it. But now all the action is far away, and the military needs air freight for emergencies and other urgent missions. For that reason, the Russian An-124s get a lot of work from NATO nations. This aircraft can carry up to 130 tons of cargo, as well as outsized and extremely large cargo. The more numerous American C-17 can only carry up to 84 tons, while the new A400M can lift a maximum of 40 tons. The advantage of the two smaller airlifters is the ability to operate from shorter unpaved runways, which makes them less dependable on existing infrastructure. Russia has put the An-124 back into production, partly because of the delays in the A400M project.

Globe editorial: “Mr. Clement has much to explain”

Filed under: Cancon, Economics, Government, Politics — Tags: , — Nicholas @ 07:56

I keep wondering if there are any actual conservatives left in Stephen Harper’s merry band of economic nationalists:

Tony Clement, the federal Minister of Industry, has much to explain after his laconic rejection of BHP Billiton Ltd.’s application for permission to proceed with its offer to buy Potash Corp. of Saskatchewan Inc.

Canadians and investors around the world — not least Potash Corp.’s own shareholders — are entitled to learn what Mr. Clement thinks is the meaning of “net benefit” to Canada, in the words of the Investment Canada Act. Evidently, in his and his colleagues’ minds, free markets and the free flow of investment are not sufficient.

Canada, as an exporting nation, has far more to lose by kicking off this kind of protectionist move than any imaginable gains. We might as well write off any economic growth from exports if this is the new modus operandi of the federal government.

November 3, 2010

Will it really be a big change in Washington?

Filed under: Economics, Liberty, Politics, USA — Tags: , , , , — Nicholas @ 12:36

Monty: The flushing sound you just heard is California’s future

Filed under: Economics, Politics, USA — Tags: , , , , — Nicholas @ 08:57

Monty pronounces the final doom of California:

That sound you just heard was the State of California irretrievably flushing itself down the toilet.

[. . .]

California’s most dire problems right now are related to public-employee obligations (pensions and healthcare). The power of public-employee unions in California have held the State and local governments in thrall for years, and with the election of Jerry Brown as Governor, the people of California have opted to spray kerosene on a blaze that was already threatening to overwhelm them.

[. . .]

Well, the die has been cast, California. You have placed your fate into the hands of a political party and a governmental machine that cares for nothing except what it can squeeze out of you to keep the party-train rolling. There will come a time in the not-too-distant future when you will have cause to bitterly regret what happened last night, and to wonder when the disaster truly became unavoidable. Well, now you know: it happened last night when you elected Jerry Brown as your governor. You chose to kowtow to the labor unions; you chose to believe comforting lies rather than the horrible truth.

You will reap the whirlwind.

Update: A couple of Twitter updates from Iowahawk sum things up nicely.

10:28: Boxer, Brown, no on Prop 19: congrats, California. You have officially gone Full Retard.

11:05: And as if California wasn’t already full of idiots, lunatics, and drug abusers, I’m flying there this afternoon.

November 1, 2010

Shipping at Age-of-Sail speeds

Filed under: Asia, China, Economics, Germany — Tags: — Nicholas @ 12:40

In an attempt to save fuel, shipping lines have been ordering their ships to go slower. Some of them are now slower than 19th century clipper ships:

For those who haven’t followed the situation closely, many container ships right now have practiced ‘slow steaming’ due to a glut of ships being built worldwide.

Essentially, they are sailing at speeds well below their potential in order to reduce the supply of ships in the market, and thus support shipping rates.

The way this works is that the slower a ship sails, the fewer times it can make a round trip per year. Thus purposely sailing slowly reduces the effective supply of ships. It’s a response to insufficient shipping demand relative to the size of the global container shipping fleet.

Yet these poor shipping companies have taken this practice to such an extreme that many ships are now sailing at speeds slower than old clipper ships from the 1800’s.

H/T to Monty:

Overcapacity in shipping means lower demand for the finished goods overall. This is also a prime reason why export-driven economies (China, Germany) are in for a pretty dramatic adjustment soon. They’ve been counting on an economic recovery in America and Europe to soak up all that excess production, but it looks like things are going to stay weak for at least another six months to a year.

October 28, 2010

It’s “like asking an alcoholic to run a distillery”

Filed under: Cancon, Economics, Military, Politics — Tags: , , , — Nicholas @ 13:26

The dissent on the announced purchase of F-35 fighter jets continues to gain traction:

In an interview on CBC’s Power and Politics last night, Industry Minister Tony Clement admitted we are buying the F-35s because the military wants them. “It is the best plane on the market. I will say on your program, I’m not the expert. The military are the experts. Why don’t the Liberals take the word of the Canadian military on that?” he asked.

Let me count the ways. A brief read of the A-G’s report on the purchase of military helicopters suggests a host of reasons why allowing the Department of National Defence to dictate procurement is like asking an alcoholic to run a distillery.

Sheila Fraser’s report concluded that National Defence knew, but did not tell the politicians, that the helicopter it wanted was not an “off-the-shelf “ model, with a relatively low risk of cost and time overruns.

In the event, the total cost for the 15 Chinook heavy lift helicopters more than doubled to $4.9-billion from the $2-billion price tag when the project was presented to the Conservative government and approved. Helicopters that were initially scheduled to be delivered last July, now won’t be ready until June 2013 — a state of affairs Ms. Fraser decried as “totally inappropriate”.

I’m not convinced that the F-35 is the aircraft Canada actually needs, and the DND’s track record on equipment purchases combined with the ultra-spendy pricetag on the F-35 make me concerned that they’re going to put themselves in the same state as the British armed forces by over-committing to kit that they (that is, we) can’t afford.

A significant indicator of social decline

Filed under: Economics, Government, Politics, USA — Tags: , , , , — Nicholas @ 12:04

Monty puts his finger on the biggest social change since the 1960’s and posits the likely results:

The recipe for the decline and fall of the American republic: most people who receive government benefits will not willingly give them up, or even allow them to be reduced. They’ve been told that these benefits are a right so often by the so-called “progressives” that they’ve come to believe it, and any attempt to reduce their benefits amounts, in their eyes, to a civil-rights violation. This is what the welfare state leads to — an entire class of dependents who insist upon receiving the sweat of your brow not as charity or payment for services rendered, but as a birthright not to be denied them. Class warfare (between public-sector workers and taxpayers) and generational warfare (between the recipients of Medicare and Social Security and those who must fund it) is the only possible outcome if things do not change soon. And I don’t mean that in rhetorical or symbolic terms; I mean in actual, bloody, street-fighting terms. It’s the culture of grievance, of victimhood, of moral equivalence playing out in real time. As I wrote in an essay a while back, look at what’s happening in England and France right now. That is our future — only more violent — if we don’t change our ways.

October 27, 2010

Why can’t Chuck get his business off the ground?

Filed under: Bureaucracy, Economics, Government, Law, Liberty — Tags: , , — Nicholas @ 13:13

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