Quotulatiousness

August 22, 2009

US daytrips to Canada drop significantly

Filed under: Cancon, Economics — Tags: , , — Nicholas @ 00:05

Megan McArdle has an interesting post about the precipitous drop in US visits to Canada:

Kevin Drum is puzzled:

Well, here’s today’s [chart]: day trips to Canada are down. Way down. It’s not clear why, either. The accompanying story blames it mostly on new passport rules, along with “other factors, including the recession and the higher Canadian dollar.” But that doesn’t really hold water. The downward spike from May to June might be due to new passport rules, but the chart makes clear that travel has been steadily decreasing ever since it recovered from 9/11 in early 2002. Obviously passport rules have nothing to do with this 7-year trend, and neither does the recession or the strength of the Canadian dollar.

Blog_Canada_Day_Trips

Megan points out that the strengthening Canadian dollar does actually account for much of the change, with the passport requirement only being the final nail in the coffin. Security theatre, as pointed out in the comments, probably accounts for some of the decline as well.

The comment thread is quite interesting, as both facts and “facts” get deployed to support pre-existing positions. Do read through them.

I’m finding this an interesting discussion, as I’m headed the other way tomorrow . . . I’m taking a week-long course near Pittsburgh. I remember the days of the cheap Canadian dollar, when we used to use terms like “Canadian Peso” or “TundraMicroBuck”, and I don’t particularly miss them. I don’t know if I’ll be doing much shopping while I’m in Pennsylvania, but the price differences are much smaller than they were the last time I was in the states.

August 18, 2009

The economic value of high speed passenger trains

Filed under: Economics, Railways, USA — Tags: — Nicholas @ 07:51

Another article pointing out the economic issues with the current US administration’s sudden love for high speed rail:

In April, President Barack Obama claimed “my high speed rail proposal will lead to innovations in the way we travel” and new rail lines “will generate many thousands of construction jobs over several years, as well as permanent jobs for rail employees and increased economic activity in the destinations these trains serve.”

Even House Minority Whip Eric Cantor (R-Va.), who voted against the stimulus bill, now wildly praises rail’s job-creation potential, writing, “It is estimated that creating a high-speed railway through Virginia will generate as many as 185,500 jobs, as much as $21.2 billion in economic development, and pull nearly 6.5 million cars off the road annually. Providing a high-speed rail service from Washington, D.C. to Richmond will drive economic development throughout our region for many years to come.”

High speed railways (HSR) work well in certain conditions: in areas of high passenger density over medium-length journeys. HSRs can’t replace regular passenger trains running on joint freight-passenger rail lines because the HSR trains require more expensive dedicated lines with different signalling and control systems. Running an HSR train on unimproved track would merely give you a slightly faster passenger train: it would not allow the much higher running speed required to allow the HSR to show its capabilities.

The need for dedicated lines in high population areas means that no private railway could afford to buy the necessary right of way and additional land for associated station, maintenance, and storage facilities. Inhabited, densely developed land is expensive: governments need to get involved by using their powers of eminent domain to condemn and requisition land from private owners.

The proposed HSR line from Washington to Richmond might be economically feasible, setting aside the costs to the individuals and companies whose property will be taken to build the new line, but it will be politically difficult because the people whose property will be at risk will be highly motivated to oppose the development in any way they can.

Passenger rail currently carries a very small portion of city-to-city travel — the market targeted by high-speed rail — and it’s likely to remain modest well into the future. In 2008, Amtrak carried 28.7 million passengers. By comparison, there were 687 million airline passengers in 2008, in part because air service provides frequent high-speed travel to geographically distant cities. Then there’s our well-developed highway network that makes automobiles very competitive with rail for distances under 200 miles. In most cases, once travel and wait times to train stations are factored in, travelers will spend as much time in route on the train as they will in a car.

That last point is why the “high speed” part of HSR is critical . . . if you’re going to use the train for part of your journey, you need that portion of the trip to be appreciably faster than the other options, or you won’t make the extra effort to use the service. For example, commuting into Toronto using the (non high-speed) GO train service saves me an average of 5-10 minutes per trip, but if I miss the train, I’ll be an hour later getting there. Driving in is more flexible, time-wise, but a bad traffic jam or construction en route can make an already long commute that much more frustrating . . . and I can’t read while driving. It’s a bit of a wash, from my point of view. The costs are slightly in favour of taking the train, counting parking and gas costs (but the GO train fare is subsidized by the provincial government, so I’m only paying half the actual cost of my ticket: everyone else in Ontario pays the other half).

August 17, 2009

I hope he’s right

Filed under: Cancon, Economics — Tags: , , — Nicholas @ 12:35

Publius has some interesting insights into the evolution of the Canadian economy from highly dependent on regional conditions (that is, largely tied to US markets) to a more independent one:

What the FTA and NAFTA did was to help fundamentally restructure the Canadian economy over the last two decades. While economic nationalists warned of increased dependency on the American juggernaut, the exact opposite has happened. NAFTA in particular allowed Canada to follow the laws of comparative advantage, shifting our economy away from manufacturing toward services. Nations have historically traded with countries nearest to them due to obvious transaction costs. When the wealth of nations is increasingly intellectual (which includes figuring out how to extract natural resources), those transactional costs become nearly irrelevant. A service economy is one less dependent on trading with nearby partners, instead it can reach out to the world. Buoyed by Canada’s traditional strength in natural resources — fur, fish, timber, wheat and now oil — we have become to a surprising extent decoupled from the American economy. Even in bulk products like oil and minerals, our clients are increasingly global. There is a massive glut of cheap shipping — refer to the Baltic Dry Index — to take our natural bounty where ever customers beckon.

We weathered the 2001 American recession easily, and we are weathering this one rather well. Harper knows this. He knows Barack Obama is shackling and regulating the American economy into near term stagnation. In the past this would have proven disastrous for Canada, today it will be an advantage. For decades Britain and the City of London have proven a relative free market haven to international businesses seeking to invest in Europe. There is no reason Canada cannot, and will not, play that same role in North America. In a year or so Canada may very well be leading other OECD countries in economic growth, all while the American giant is stuck in a slow motion recovery. The Prime Minister’s moderately statist approach will seem to many voters as a work of pragmatic genius. Not too much intervention, not too little. Just right. Harper the Helmsman. More image than reality. Such is the game of politics.

August 13, 2009

QotD: Interpreting the Fed’s message

Filed under: Economics, Quotations, USA — Tags: , — Nicholas @ 10:23

After two days of satanic worship, no-safeword BDSM and blackface minstrel performances, the Federal Open Market Committee (FOMC) announced today that it will stay the course on currency manipulation. According to the post-meeting press release, the Federal Reserve will maintain its effective negative target range for the federal funds rate. With economic activity “leveling out,” “signs of stabilizing” in household spending, “tight credit,” continued business cutbacks and a “gradual resumption of sustainable economic growth in a context of price stability,” the Fed expects inflation to “remain subdued for some time.” But the Fed is also standing by its plan to discontinue purchases of Treasury debt this fall [. . .]

The plan to phase out Treasury purchases is a bet that inflation will be kicking in by the fall, as Americans gear up for the harvest festival that marks their winter solstice. Will Santa be bringing you a wallet full of degenerated dollars? Some early signs: The greenback spiked right after the FOMC’s announcement, but has been falling against the currencies of countries with adult supervision. Demand for the the 10-year Treasury note followed the same pattern — with the FOMC’s statement triggering a brief flurry after a disappointing auction of $23 billion in new government debt earlier in the day. Maybe the market took the boilerplate about “subdued inflation” seriously. Or maybe it’s easier to believe the economy will heat up when the Fed doesn’t say so.

Tim Cavanaugh, “Fed Thinks It Has Conjured Inflation”, Hit and Run, 2009-08-12

This is a mind-boggling level of debt

Filed under: Economics, USA — Tags: , — Nicholas @ 09:58

As soon as the money being discussed passes a billion dollars, for most people it might as well be imaginary . . . here’s a bit of perspective:

To put some context on a new estimate that puts this year’s federal deficit at $1.8 trillion, consider this: That amount had never been spent by the federal government in a single year until 2000, let alone borrowed.

That’s right. As the decade began, the US government spent $1.8 trillion in a year for the first time. Now it’s poised to spend that much in excess of its tax revenues.

The Treasury released the latest figures Wednesday, showing spending of about $3 trillion in the past 10 months, and revenues of only $1.74 trillion.

With two months to go in the fiscal calendar, the Obama administration is projecting that the imbalance will end up totaling $1.84 trillion, more than four times last year’s record-high. The monthly deficit for July, also reported this week, came in a bit above what economists had expected.

Now all the talk about replacing the US dollar with some other currency as the international reserve makes rather more sense. The US government is going to be a long, long time paying off all that new debt . . . or repudiating it and triggering a world-wide financial melt-down. Either way, prudent investors will be looking at non-US investments for future attention. This will make it that much harder for the US economy to grow its way out of debt.

It will take a lot of political courage to stay the course, pay down the accumulated debt and avoid going for what the domestic audience will see as the easy option (declaring national bankruptcy). It’s hard to imagine any current American politician with the fortitude to take the hard option (cutting government spending and paying off the debt).

August 10, 2009

Healthcare systems compared

Filed under: Cancon, Economics, Health — Tags: , , — Nicholas @ 12:55

No, not the usual red-in-tooth-and-claw US system of mercenary medicine against the shimmering city-on-the-hill of [Canadian | British | Swedish | Generic European] socialized medicine. This one is a bit easier to compare: human verses pet healthcare. Theodore Dalrymple discusses the issue:

As a British dog, you get to choose (through an intermediary, I admit) your veterinarian. If you don’t like him, you can pick up your leash and go elsewhere, that very day if necessary. Any vet will see you straight away, there is no delay in such investigations as you may need, and treatment is immediate. There are no waiting lists for dogs, no operations postponed because something more important has come up, no appalling stories of dogs being made to wait for years because other dogs — or hamsters — come first.

The conditions in which you receive your treatment are much more pleasant than British humans have to endure. For one thing, there is no bureaucracy to be negotiated with the skill of a white-water canoeist; above all, the atmosphere is different. There is no tension, no feeling that one more patient will bring the whole system to the point of collapse, and all the staff go off with nervous breakdowns. In the waiting rooms, a perfect calm reigns; the patients’ relatives are not on the verge of hysteria, and do not suspect that the system is cheating their loved one, for economic reasons, of the treatment which he needs. The relatives are united by their concern for the welfare of each other’s loved one. They are not terrified that someone is getting more out of the system than they.

And, yes, I know it’s extremely bad form to quote yourself, but here is what I wrote on the subject back in 2004:

It boggles the mind to think that it is possible for pets to receive faster, better-organized, more personalized, and more friendly healthcare than their human owners are able to get. And it’s absolutely true.

My wife works in a vet clinic. I know how much the staff at the clinic care about their patients and the families of their patients. They do their very best to ensure that the cats are properly diagnosed and treated. But they are paid for their work . . . by the families of the patients.

One of the comments on Marcel’s original post talks about “the Vet’s next Porsche purchase”. That by itself shows the utter ignorance of the commentator: you do not go into veterinary medicine to get rich. For the length of academic study, it’s probably the worst-paid bio-science field there is. The veterinarians, vet assistants, and vet technicians could all earn significantly higher wages in other fields for the same investment of time and money in training.

Medicine, whether for humans or for other animals, is an expensive field: typical Canadians don’t really know this, as a rule, because we don’t pay for it directly. Vets, as a rule, don’t have the latest and greatest equipment because they are running private businesses which have to finance equipment purchases out of their own funds. They generally have the best compromise they can manage between what’s available and what’s affordable.

Treatment for patients must be decided with an eye to costs: Fluffy may need treatment X, but if it’s going to cost hundreds or thousands of dollars, Fluffy’s owner is left with an unwelcome decision to make. We never think of this in terms of our own healthcare: instead of rationing by dollars, we ration by time. The resources are still scarce, but we pretend that delaying surgery for a painful ailment is better than paying extra to get the surgery done sooner; in fact, in Canada, there’s no choice involved at all.

The other pernicious effect of hiding the actual costs is to increase the demand for relatively trivial treatments (which could often be taken care of by family doctors, walk-in clinics, or even pharmacists). If you never see a bill, you never feel any reason to limit your personal demand on the system. It’s rational for you to extract as much personal benefit from the system as possible: you paid taxes to support it, right?

August 7, 2009

The error of being generous to your opponents

Filed under: Economics, Government, Health, USA — Tags: , — Nicholas @ 12:48

Megan McArdle is called to task for making a mistake . . . through being too generous to her opponents:

I erred so low because I was trying to be charitable to the cause of national health care. You see, the reason that insurance premia are so high in New York State is that New York State enjoys community rating, guaranteed issue, and a very generous bevy of mandatory services. The result is that the cost of insurance is very, very high. What I failed to realize was just how radically out of line New York’s rules had pushed its health care costs. The average premium across the United States has increased about 25% since 2004. In New York, the rate of inflation has apparently been about 16 times that. I wasn’t “aware” that insurance premiums have doubled and tripled over the last seven years, because for the country as a whole, this isn’t true.

So yes, John, the Atlantic’s economics expert didn’t realize just how much the kind of regulations Democrats are now pushing had managed to screw up New York’s health insurance market. In trying, while writing a blog post on the fly, to err on the side of charity towards my ideological opponents, I grossly misled my readers. Massive state interference in the insurance market is clearly much, much worse than I — the eternal pessimist! — managed to imagine. Thanks for calling that oversight to my attention.

July 27, 2009

Audax toujours

Filed under: Economics, Government — Tags: — Nicholas @ 14:12

Thaddeus Tremayne may appear to have gone off his medications when he proposed this:

I think it behooves us to begin spreading this idea: that people who work in the public sector should be exempt from having to pay tax. All tax.

But he really does have a valid and interesting point:

No, what I am proposing is the stripping away of a fig-leaf that disguises the very important distinction between tax-payers and tax-consumers.

Currently, only those who earn their living in the private or voluntary sector are tax-payers and while public sector employees do file tax returns and, on the face of it, pay their taxes too, this is a mere bookkeeping fiction. They are the recipients of tax, adding nothing to the public purse. The number of people who fail to understand this distinction, holding instead that “we are all taxpayers” is alarmingly high. By forcing the public sector to lead tax-free lives, we make their true status not just clearer but undeniable.

Consider the meme-spreading to have started.

July 25, 2009

QotD: the last honest trash collector

Filed under: Economics, Government, Politics, Quotations — Tags: , — Nicholas @ 11:18

There are lots of levels of fear and complaint about the government getting involved in business. First and foremost, of course, is incompetence. We actually have experiential evidence about this. In England, all the English car companies were beginning to circle the drain in a series of well-deserved failures and bankruptcies, earned by making lousy products with very poor production at high prices. So, the government, back in the ’70s, nationalized all the British car companies. The result was British Leyland, a name that perhaps doesn’t resonate much with you. Many of your friends probably drive Humber Super Snipers, or perhaps not. [Laughs.] That’s certainly one thing that we’re headed for. The other thing is that there’s a very good reason that governments aren’t supposed to compete with private-enterprise companies. Governments have monopolies on certain things, like eminent domain and deadly force. What’s another example of an organization that gets into the same business that you’re in, except that their guys have got guns? That would be the Mob. Ford is like the last honest trash collector in the New York metropolitan area, the last one that’s not mobbed-up. How long is that gonna go on for?

P.J. O’Rourke interviewed by Gregg LaGambina, A.V. Club, 2009-07-16

July 24, 2009

More on scapegoating plastic bags

Filed under: Cancon, Economics, Environment — Tags: , — Nicholas @ 09:22

Back on the old site, I posted an item that related tangentially to the issue of plastic bags in supermarkets. Russ LeBlanc sent me a note, which I published as an update to that post. He’s now expanded on that idea, with a letter to newsdurhamregion.com:

You’d think in these tough economic times our public officials would avoid “trash talk.” Enough already!

Get to the real issues. Dwelling on emotional fallacies such as the dreaded plastic bag while people are left with little economic hope is unforgivable. Sorry, Camille, banning plastic bags will do less than little to save the planet. It isn’t even a start, but it does sound warm and fuzzy.

If our politicians feel it necessary to spend our hard-earned tax dollars on recycling studies then they should do due diligence and commission a study by independent biologists to find out if the other study is even worth it. Better yet, spend the money where it counts, attracting jobs.

See-through bags and supporting a big-business cash grab for something that represents less than one per cent of a landfill (plastic bags) is irresponsible. Heaven forbid we see a politician questioning this issue.

By the way, Madam Mayor, I’m sure the big retailers would welcome the reward card incentive program (even though it’s really a form of big business getting around the right to privacy issue). Perhaps we can use the points for a garborator?

July 23, 2009

The wrong measure

Filed under: Economics, Law — Tags: , — Nicholas @ 07:29

The economy is struggling, employers are shedding excess workers, the banks are floundering, so what can the government do to make things better? Other than getting the hell out of the way, not much . . . but they can certainly make things worse:

Come Friday, the federally mandated minimum wage will jump from $6.55 an hour to $7.25 — an 11 percent increase. At a time when employers are laying off workers, Washington is going to make it more expensive to keep them.

If you’re a minimum wage employee, your job will pay more, but only if it still exists. These days, most companies are scrutinizing every position on the payroll to make sure it’s worth the cost. Raise the toll, and some employees will find they are no longer valuable enough to make the cut.

Economists generally agree that increases in the minimum wage cause unemployment even when the economy is prospering—something it has not been doing for the last year and a half. David Neumark, a professor at the University of California, Irvine, estimates this rise will destroy some 300,000 jobs among teens and young adults.

The problem is that by trying to forcibly change the relationship between entry-level workers and employers, the government actually hurts both parties. Entry-level workers whose lack of training or aptitude makes their work less economical at a mandatory higher pay rate lose the most: their jobs and their prospects of other minimum-wage jobs. Employers lose out, too, because some work is now uneconomical to have done, it either doesn’t get done at all or is outsourced.

July 22, 2009

Tinkering with “the engine of poverty”

Filed under: Economics, Politics — Tags: , , , — Nicholas @ 14:42

Jon sent me this link with the comment “Don’t know if the article is bloggable, but I liked the opening salvo”:

Natural disasters can cause enormous human misery, and require massive relief operations, to provide food and medical aid. To cause serious, long-term, grinding poverty, however, you need government involvement.

I have to agree with Jon, the opening to the post is quite good. After digging into some of the examples (the Ukraine under Stalin, Ethiopia in the 70s-80’s, and the US experiment with the “Great Society”), the first point at which an apolitical or undecided reader would say “Now, hold on there . . .”

Of course, the meaning of “poverty” has changed a lot over the years. The poor of the United States have a higher standard of living than the middle class in much of the rest of the world. They also have a higher standard of living than the filthy rich of a hundred years ago, or the crowned royalty of the centuries before that. This improved standard of living has very little to do with the government.

Poverty is something any civilized society wants to reduce and then eliminate, but it never seems to happen. The reason for that, aside from the vast amounts of time, effort, money, and resources being wasted through inefficiency, incompetence, and bureaucratic delay, is that the problem cannot be solved in most countries by definition. Most of the time when people use the term “poverty” they mean relative poverty. For most of the western world, absolute poverty affects a vanishingly small number of people (it’s not gone, but it’s lower than it’s ever been for any civilization in history). Relative poverty, however, is usually linked to a formula (like a set percentage of the average family income), which means that even as individuals’ and families’ financial situations improve, they will still be proportionally lower than the average (which will have improved over the same relative period of time). Statistically, no improvement will appear.

Popular belief, shaped by the official statistics, is that many people live in dire circumstances. Some do, but most who are technically below the poverty line are doing better than the average family from a few decades back. Proportionally, they’re still below the line, but from the standpoint of access to food, shelter, health care, and transportation, they’re better off.

If you are motivated by a humanitarian desire to help the poor – the ostensible mission of much of the modern liberal state – you must realize that nothing helps them more than the increased standard of living and economic opportunity brought about by the private sector.

However, the public perception is quite different: that it is the modern liberal state that has made these improvements against the active resistance of the private sector.

Here, in a nutshell, is the crucial difference between reality and the perception of most voters:

The value of every wasted government dollar must be judged by what free enterprise could have accomplished with it.

Most westerners think that General Motors, Chrysler, and AIG are the perfect exemplars of the free enterprise system, replacing the earlier capitalist icons of Enron and Worldcom.

When you say “capitalist”, most people hear a very different word than the one you’re using. “Free enterprise”, to far too many people, means vast corporations with dozens of legislators (or even legislatures) in their back pockets, using their tame politicians to obtain tax credits, advantageous labour codes, or “eminent domain-ing” their way through neighborhoods. The “private sector” decodes to “rich, secretive plutocrats”.

What you say and what they hear bear very little resemblance to one another. You’re not speaking the same language.

Then, the touching statement of hope:

If the six long months of this Administration serve any constructive purpose, it should be permanently dissolving the illusion that a small group of political appointees can predict what the economy will do, and control it to produce an improved outcome.

Most people, in times of stress, look for that man on the white horse. Most Americans still think they found one.

Further adventures with eBay, now with extra PayPal goodness

Filed under: Economics — Tags: , — Nicholas @ 10:27

Jon had an unhappy experience buying an old magazine on eBay (see here). It apparently got even better, once PayPal entered the picture:

Remember the magazine I told you about? The one with the $12 shipping?

It gets better.

I have a PC Financial chequing account associated with my PayPal account so that I can get money out of PayPal and into my bank. I do not keep any money in this account as I don’t want PayPal sneaking off with anything. Turns out that not keeping money in there was a bad idea.

When I paid for the magazine, PayPal first tried to use the BANK ACCOUNT, rather than my Visa, to pay for the purchase. The transaction was declined by PC Financial and I was charged a $40 NSF fee.

Forty. F**king. Dollars.

I just paid forty dollars to have Galen Weston f**k my ass.

PayPal then went ahead and billed my Visa for the transaction, which I what I expected them to do in the first place.

When the f**k did PayPal change how they fund transactions? They have ALWAYS billed my Visa for purchases — they have NEVER tried to pull the amount from my bank account before. I this something they have changed recently, or what?

Total cost for the magazine so far: $54.19

Expensive magazine! I asked if it was okay to post the follow-on to the original story and he wrote:

Be sure to highlight the bit about Galen Weston and my ass.

I know it’s not really his bank — it’s CIBC — but it’s his brand. Which somehow makes it even more of a rip-off.

Humph.

[. . .]

About funding the account: it turns out that what I experienced is their new default when you have a bank account associated with your PayPal account. I don’t recall being notified of that, so it’s my own damn fault for not reading the fine print, but still — that sort of change in behavior should not happen automatically.

[. . .]

Total cost for the magazine: $56.28.

Oh — on shipping: I looked up the shipping cost for the USPS Flat Rate Envelope the guy used. His surcharge was only $2.00 — the actual postage was, indeed, over ten bucks. Does not really make me feel all that much better, but I guess the guy was not really being a total jerk about it.

July 21, 2009

Unpatriotic . . . iPods?

Filed under: Economics, USA — Tags: — Nicholas @ 14:36

July 20, 2009

QotD: TANSTAARTHC

Filed under: Economics, Health, Liberty, Quotations — Tags: , , — Nicholas @ 12:37

There. I said it. Someone had to.

The acronym would be TANSTAARTHC. Nowhere near as euphonius as TANSTAAFL.

I broach the subject because I can’t seem to turn on a TV or radio without hearing, “Health care is a human right.” The phrase has entered the zeitgeist. Google it and you’ll get 25k hits. Google “right to health care” and you get 200k. Maybe I’m not listening hard enough, but I hear no one questioning its validity.

A right is intrinsic. It’s not given to you, it’s something you’re born with. Its existence is not dependent on the actions of others. In fact, only by the actions of others can it be taken from you.

F. Paul Wilson, “There ain’t no such thing as a right to health care “, Libertarian Enterprise, 2009-07-19

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