Quotulatiousness

November 5, 2009

Background on those “Cellared in Canada” wines

Filed under: Cancon, Economics, Law, Wine — Tags: , , , , — Nicholas @ 09:03

In his November Frugal Oenophile newsletter, Richard Best looks at the evolution of that blight on the Ontario wine industry, the “Cellared in Canada” designation:

For some time (since 1973 in fact), Ontario wineries have been allowed to import juice or wine from other countries and then bottle it as their own. Bottles containing mostly foreign wine were originally labeled Product of Canada. Then in 1993 Product of Canada was replaced by Cellared in Canada (CIC). So, what you’ve been reading and hearing about lately is that people don’t get it, and that in an effort to support the local wine industry, they’ve been buying CIC wines and unknowingly underwriting wine factories in California, Chile and elsewhere.

Why Did This Come About

In the beginning, Niagara had thousands of hectares of north American Labrusca grapes the likes of Concord and Niagara and even one called President (“President Champagne” anyone?) When better grapes came along, the Ontario government encouraged growers to grub up their Labrusca vines and replant with French-American hybrids, mostly Vidal, Seyval Blanc, Marechal Foch, and Baco Noir. Then in 1989 the government launched another grubbing up program when some die-hard wineries started planting European Vinifera grapes: Chardonnay, the Cabernets, and especially Riesling. (It’s interesting to note that government experts insisted for decades that Vinifera vines could never succeed in Ontario.)

So, what do you do when you’ve ripped out your vineyard and now must wait 3-5 years to harvest grapes? The simplest solution is to allow wineries to import even more wine with which to “extend” their remaining harvest. Now, the original plan was to phase out the imported wine, with a “sunset” in the year 2000. But by then a few large wineries had shifted their business plan from Canadian fine wine to cheap and cheerful jug wines (but without the jug, at least). It’s pretty hard to change a law that has allowed a few companies to grow rich and dominate the market, so the plan was carved in stone . . . soapstone, as it turns out.

In 1993, when Canada signed the Free Trade Agreement, Ontario put a cap on the entire wine business. Only wineries establish before NAFTA would be allowed to import wine for blending. Moreover, only these wineries could own multiple site licenses. So we now have a two-tiered system: wineries that can do pretty much what they want, and those that can do little more than pay the bills.

It’s hard to pretend that it’s a level playing field for the domestic wine producers when there clearly are two distinct classes enshrined in law.

To subscribe to Richard’s newsletter, send him an email at frugalwine@sympatico.ca with the word SUBSCRIBE in the subject line.

November 3, 2009

Biggest stimulus success – more government jobs

Filed under: Bureaucracy, Economics, Education, Government, USA — Tags: , — Nicholas @ 13:49

Veronique de Rugy looks at the most recent claims of the number of jobs created or saved by Obama’s stimulus, and finds that most of the new jobs are in the public sector. The cost to “create” these jobs is eye-watering, too:

The White House claims that 640,329 were created or saved. That, by the way, is way less than what Christina Romer claimed would be created. Last week, she mentioned 1.4 million during a Joint Committee hearing. Remember.

First, $159 billion has been spent so far. That’s $248,273 per job.

However, when you look at some specific contracts that were awarded you find that some jobs were created or saved at an insane cost to taxpayers. For instance, $1,359,633,501 were awarded to CH2M WG IDAHO LLC, in WA to create 2,183 jobs. That’s $622,827 per job. That’s not as bad though as the $258,646,800 awarded to the Brookhaven Science Associates, LLC in NY, to create 25 jobs. That’s over $10.3 million per job.

I would be happy with one of these jobs.

Second, while the administration is promising good and in time reporting, we can see that it’s far from being the case. Agencies report having spent $207.3 Billion and yet only $36,688,660,161 were reported by states. That’s a big gap, isn’t it?

Third, some 85 percent of the money went to 4 agencies: HHS, Labor, Education and Social Security. That money wasn’t spent on shovel ready projects. For instance, some of the HHS funds went to some rural high school and college students from Arkansas, Kentucky and Tennessee to conduct medical research this summer with a team of leading scientists at Vanderbilt University. The Department of Labor spent $11,058,877 in unemployment insurance (UI) modernization incentive funds to the state of West Virginia. And the Department of Education is mainly spending its money to keep union protected school teachers in their jobs. Not really shovel ready projects, are they?

November 2, 2009

Ford reaps financial benefit from not joining Government Motors

Filed under: Economics, USA — Tags: , , — Nicholas @ 08:18

The New York Times has the unexpectedly positive financial news from Ford:

The Ford Motor Company on Monday posted a surprise third-quarter profit of $997 million and said it had its first profitable quarter in North America in more than four years.

The carmaker also said it increased its cash reserves by $2.8 billion during the quarter, ending September with $23.8 billion.

For all of 2009, Ford, the only Detroit automaker to avoid bankruptcy this year, has had a profit of more than $1.8 billion. It reported $834 million of income in the first half of the year.

October 30, 2009

Even CBS News has difficulty with the “jobs saved or created” claims

Filed under: Economics, Government, Politics, USA — Tags: , , — Nicholas @ 13:02

The formula for deciding how many jobs are created or saved doesn’t come close to passing the giggle test:

When the WH demanded that those who received Spendulus money “report” back on how many jobs were “saved or created,” they insisted upon a nonsensical rule: If a single dollar of Spendulus was spent on an employee’s salary, whether that employee was a new employee or an old one, that gets counted as a job “saved or created.” If he’s a new employee, that job was created. If he’s an existing employee, that job was saved.

For $1.

Yes, $1. Because the nonsensical rules the White House told these people to count “saved or created” jobs by simply stated: If any employee’s salary is paid, in whole or in part (any part!), count that as a job “saved or created” by the spending.

And then report that number back to us.

Note that the White House’s rules do not seek to discover which jobs really were “saved or created.” To come to that conclusion, one would need a set of more rigorous rules — which excluded some jobs from the “saved or created” category, rather than attempting to include them all under that rubric.

The criteria for deciding are so unrealistic that it would be possible to claim that 787 billion jobs were saved or created . . . and it would be valid under the reporting formula.

Tweet of the day: Expensive food

Filed under: Economics, Food, Humour — Tags: , — Nicholas @ 12:25

Stephen Fry: A spoonful of paté de campagne Ardéchois à l’ancienne is not really that far distant from a spoonful of catfood. Just notably more expensive

October 29, 2009

Rand’s cultural impact

Filed under: Economics, Liberty, Media — Tags: , — Nicholas @ 14:31

Andrew Corsello tries to exorcise the ghost of Ayn Rand:

A weirdly specific thing happens with the books of Ayn Rand. It’s not just the what of the books, but when a reader discovers them — almost always during the first or second year of college. Rand grabs a reader at a time of maximum vulnerability and malleability, when he’s getting his first accurate sense of how he measures up in the world in terms of intellect and talent. The longing to regard oneself as misunderstood and underrated can be powerful; the temptation to project oneself as such, irresistible. But how? How to stand above and apart?

Enter Howard Roark, the heroic and misunderstood architect, square of jaw and Asperger-ish of mien, who at the end of The Fountainhead blows up his own masterpiece after a bunch of sniveling “parasites” and “second-handers” tinker with the blueprints.

GODDAMN!

Then enter Atlas Shrugged‘s John Galt, the heroic and misunderstood engineer, square of jaw and Asperger-ish of mien, who, after persuading “men of talent” to retreat to his Colorado aerie while the country goes to seed (in order to show the “mediocrities” left behind what life is like without their betters), delivers a 35,000-word speech decrying bureaucrats and regulators.

SIXTY PAGES, BITCHES!

Finally, enter Objectivism, the name Rand gave to her moral defense of “reason,” individualism, and unfettered capitalism.

SCOOOOOOOOOOOOOOOOOOOORE!

And hats off to Nick Gillespie for the best quote in the article:

“In terms of literary influence, only Kerouac compares,” says Nick Gillespie, editor-in-chief of Reason.com and Reason.tv (offshoots of Reason, the libertarian magazine founded in 1968 by a Randian). Pointing out that Atlas Shrugged and On the Road were both published in 1957, he adds, “Kerouac has had a more diffuse influence on American culture. He created a broad-based conception of what was cool and hip. Rand hasn’t brushed the culture as widely. She touches individuals — immensely and deeply. It’s useful to think about her impact in terms of Catcher in the Rye, another novel of individuation. Everyone agrees it’s beautifully written, but it’s losing its grasp on the public imagination. Same with Catch-22. Yossarian was a perfect antihero for the ’60s generation, but does anybody give a shit about him now? Or about Portnoy? A few days ago, I was watching an old clip of Andrew Dice Clay’s stand-up act from 1987. He made a joke about jerking off into a liver, and no one in the audience knew what he was talking about. Think about that. You can still make Howard Roark jokes that play, but it’s been at least twenty years since you could do that with Portnoy. Portnoy’s dead. Philip Roth is a great writer, but his signature character has had far less purchase on the collective imagination than Galt or Roark. No matter what you think of Rand, there’s no denying that the woman just swings a really big dick.”

Amtrak: still losing $32 per passenger on every trip

Filed under: Economics, Government, Railways, USA — Tags: , , , — Nicholas @ 12:52

Amtrak would not survive without federal government subsidy, as most people already know. What you may not have realized is just how much taxpayers subsidize every rider:

The Pew Charitable Trusts SubsidyScope Project has just released a new report that finds 41 out of Amtrak’s 44 routes lose money. The losses ranged from nearly $5 to $462 per passenger, depending upon the line, and averaged $32 per passenger. According to the report:

The line with the highest per passenger subsidy — the Sunset Limited, which runs from New Orleans to Los Angeles — carried almost 72,000 passengers last year. The California Zephyr, which runs from Chicago to San Francisco, had the second-highest per passenger subsidy of $193 and carried nearly 353,000 passengers in 2008. Pew’s analysis indicates that the average loss per passenger on all 44 of Amtrak’s lines was $32, about four times what the loss would be using Amtrak’s figures: only $8 per passenger. (Amtrak uses a different method for calculating route performance).

The Northeast Corridor has the highest passenger volume of any Amtrak route, carrying nearly 10.9 million people in 2008. The corridor’s high-speed Acela Express made a profit of about $41 per passenger. But the more heavily utilized Northeast Regional, with more than twice as many riders as the Acela, lost almost $5 per passenger.

Property overgrown? Send in the goats

Filed under: Bureaucracy, Economics, Environment — Tags: — Nicholas @ 07:48

Mark Frauenfelder looks at an old-fashioned way to cut back the undergrowth — rent a flock of goats:

GOOD reports on the Seattle-based Rent-a-Ruminant organization that hires out goats to people who want to clear brush on their property.

[R]ather than spending tons of money and time on diesel-powered machines, filing the proper permits, and administering dangerous herbicides, the Seattle-based Rent-a-Ruminant organization will loan your a team of 100 goats for all your brush-clearing needs — all at a very modest rates. As Serious Eats explains, the benefits of goats are numerous: they eat just about anything, they can work on uneven ground, you don’t need permits to use them, and they can clear a quarter-acre in about three days.

October 26, 2009

An alternative spending plan for Britain’s MoD

Filed under: Britain, Economics, Military — Tags: , , , , — Nicholas @ 12:16

Lewis Page looks at the Ministry of Defence and comes up with innovative ways to both save money and increase military capabilities:

Under the plan as laid out in the Times, the Ministry of Defence would still buy the two planned new carriers, to be dubbed HMS Queen Elizabeth and Prince of Wales. However the Prince of Wales would not be operated as a strike carrier with a force of jets; instead she would be a “commando carrier”, a floating forward-mounting airbase full of marines, helicopters and drones. This would mean no need to replace HMS Ocean, the navy’s current helicopters’n’marines ship — which would, according to the Thunderer, cost £600m in the 20-teens. (That seems pretty steep as Ocean herself only cost £150m in the mid ’90s).

This is the same story I linked to yesterday, although I said I suspected that the MoD had probably decided that their best plan was to scrap the carriers altogether. Part of the problem is that the Royal Navy can’t depend on the Royal Air Force to join with them in the larger purchase of aircraft:

It has long been known that the RAF doesn’t want to replace its own Harrier force — it would rather spend that money upgrading as many of its Eurofighter Typhoons as it can. The horrifyingly expensive Typhoon was designed as a pure air-to-air fighter, and at the moment it mostly still is — though a few RAF ones have been given an “austere” bombing capability.

The RAF would like to rebuild and re-equip as many of its largely irrelevant Typhoons as possible, giving them such things as trendy electronically-scanned radars and air-launched cruise missiles of various sorts. This would, perhaps, enable the Typhoon force to tackle tough enemy air-defence networks of the sort possessed by nations such as Iran and Russia.

There’s another over-priced item on the MoD budget that could be cut without seriously impacting military capabilities:

But there are many better ways to cut money from the MoD than crippling our new carrier force. To give just one example, our new fleet of refurbished De Havilland Comet subhunters (sorry, “Nimrod MRA4s”) will cost at least £700m a year to operate. If we put the whole Nimrod force on the scrapheap for which they are so long overdue right now, by the year 2019 we will have saved the £7bn needed to buy the missing eighty-odd JSFs for our second carrier — and the Prince of Wales isn’t actually going to be afloat much before then, so that’s not a problem.

[. . .]

There are many, many other such stories. We could buy cheap Sky Warrior auto-drones off the shelf rather than expensive Watchkeepers. We could equip the carriers properly and so buy cheaper F-35 C tailhook planes rather than pricey B-model jumpjets — this would save money straight off, and save a fortune on the vital carrier radar planes. Indeed, we could buy much cheaper Super Hornets to begin with, if we wanted to save a lot of cash. We could bin the expensive, feeble A400M transport and buy nice cheap C-17s instead. Rather than upgrading squadrons of Eurofighters into superbombers at a cost of billions we could buy a force of vastly more cost-effective turboprop strike planes to back our troops in Afghanistan. The list goes on.

I rather agree about the A400M . . . although Britain isn’t paying as much as South Africa for their planes.

Related: Strategy Page looks at the costs involved in refitting current USN aircraft carriers, and in designing and building the next generation of CVNs.

A partial answer about increasing body weight

Filed under: Economics, Food, Health — Tags: , — Nicholas @ 00:20

Here are some useful images that help to explain why North Americans have been getting heavier over the last few decades:

Over the past few decades, portion sizes of everything from muffins to sandwiches have grown considerably. Unfortunately, America’s waistbands have reacted accordingly. In the 1970s, around 47 percent of Americans were overweight or obese; now 66 percent of us are. In addition, the number of just obese people has doubled, from 15 percent of our population to 30 percent.

While increased sizes haven’t been the sole contributor to our obesity epidemic, large quantities of cheap food have distorted our perceptions of what a typical meal is supposed to look like. These portion comparisons, adapted from the National Heart, Lung, and Blood Institute’s (NHLBI) Portion Distortion Quiz, give a visual representation of what sizes used to be compared to what they are today.

Pizza_then_and_now
Bagels_then_and_now

H/T to John Scalzi for the link.

October 23, 2009

Check your homework, says the dog

Filed under: Economics, Environment, Humour — Tags: , , — Nicholas @ 12:12

Brenda and Robert Vale recently published Eat the Dog: The real guide to sustainable living, where they made the case that your pets are a greater environmental burden than a typical SUV. Cocoa the dog begs to differ, having checked their math:

Conclusion

0.61 hectares to feed the soulless Toyota Land Cruiser.

0.062 hectares to feed your best friend.

That’s 10 times as much for the Land Cruiser than for me. I could have sworn the professors said the dog required twice as much land as the Land Cruiser. They were only off by a factor of 20.

Bad professors, BAD. Don’t make me rub your nose in it.

October 22, 2009

Wage controls for high earners

Filed under: Economics, Politics, USA — Tags: , , — Nicholas @ 12:44

As if the government hadn’t inserted itself into too many things already, they’re now retroactively deciding that some corporate executives need a pay cut:

The Obama administration plans to order companies that have received exceptionally large amounts of bailout money from the government to slash compensation for their highest-paid executives by about half on average, according to people familiar with the long-awaited decision.

The cuts will affect 25 of the most highly paid executives at each of five major financial companies and two automakers, according to the sources, who spoke on the condition of anonymity because the plan has not been made public. Cash salaries will be cut by about 90 percent compared with last year, they said.

Oh, this is going to go just great, because — of course — there’ll be no negative effects of this bold move, right? Nobody will make different decisions in future out of fear of the government second-guessing them after the fact and reversing or modifying the call.

Uncertainty is the worst enemy of a free economy: you have to have some confidence in the stability of the legal structure in which you have to work in order to make rational long-term business decisions. As I wrote back in March,

The economic picture is unsettled, which sharply reduces the dependability of long-term and even short-term forecasting. Businesses depend on forecasting to make investments, create jobs, increase or decrease production, and pretty much every other part of their operations. Uncertainty is normal, but high levels of uncertainty act to depress all economic activity . . . and the US government playing kingmaker with the heads of major corporations is a hell of way to create more uncertainty.

The specific merits of the Richard Wagoner dismissal are unimportant compared to the extra measure of uncertainty injected into the economy as a whole. If President Obama and his team can dismiss Wagoner, why not the heads of any bank accepting government funding? Why not other corporate officers (corporate directors have already been ousted at government whim)? At what level does the government’s self-created new power stop?

The direction the US federal government has set will do nothing to settle economic worries, and much to increase them. The clear belief on the part of the administration is that they are better able to pick the winners and losers of economic activity of which most of them have no practical experience. That is a modern definition of hubris.

Brain farts like this latest one just introduce huge amounts of uncertainty into the long-term plans of every company. This is no way to encourage recovery.

As several people have noted, if Barack Obama’s administration was determined to destroy the US economy . . . what would they have done differently?

October 21, 2009

Soccer stupidities, explained

Filed under: Britain, Economics, Soccer — Tags: — Nicholas @ 12:21

David Goldblatt reviews Why England Lose and Other Curious Football Phenomena Explained, by Simon Kuper and Stefan Szymanski:

“Anyone who spends any time inside football soon discovers that just as oil is part of the oil business, stupidity is part of the football business.” Well, football may not spend billions of pounds actively seeking out stupidity, piping, refining and selling it, but as Simon Kuper and Stefan Szymanski demonstrate over and over again in Why England Lose, it is certainly swimming in the stuff.

[. . .]

Economic rationality is just not football’s strong suit, and nor is emotional intelligence. As Kuper and Syzmanski demonstrate, the transfer market is full of obvious irrationalities. For example, scouts over-report blonde players — who stand out and stick in the mind — irrespective of their actual performance. Despite all evidence to the contrary, clubs also overpay for teenagers, for players of fashionable nationalities and for recent stars of international tournaments without properly assessing their likely course of development, their suitability for the football culture they are moving to or the latter’s real long-term track record and value.

In fact, almost every mainstream football homily is revealed by the authors of this book to be hokum: untested, prejudiced myth spawned by an unreflective, anti-educational and above all closed culture. What other business would allow a single person to take all the key purchasing and personnel decisions unexamined and untested by the rest of the company? They certainly don’t do that at Shell, but then Shell makes money while football and its megalomaniac managers pour it down the drain.

October 20, 2009

Cheerleader pay . . . is about the market rate

Filed under: Economics, Football, Media — Tags: , — Nicholas @ 12:26

In last week’s Tuesday Morning Quarterback column, Gregg Easterbrook made a pitch for NFL cheerleaders being underpaid. Not so fast there, Gregg says Steve Czaban (Czabe):

Easterbook is brilliant 90% of the time, but this one is the equivalent of a pick-6 the other way. In fact, it sounds a lot like a deep and repressed liberal urge gurgling forth against the tide of his otherwise sensible, free market intellect.

NFL cheerleaders are paid exactly what they are worth. They may even be over-paid. How do I know this? Because the NFL has had no problem filling their cheer squads for this price. Ergo: the price is right. The market has spoken.

Trying to staff a cheer squad for a much lesser league at this price, would likely run you into personnel shortages or weight issues. The National Football League, however, carries tremendous resume value for these ladies. It carries community status, it carries secondary value that far exceeds the $100 bucks a game.

If this was not true, then you wouldn’t need tryouts. You would just take the first 12 who volunteered.

It’s quite true, despite the earnest appeal for higher pay from last week’s TMQ, cheerleaders are — on the evidence of the current market conditions — overpaid. Some jobs pay high wages because of the unpleasant working conditions or the need for extensive prior training (like garbage collectors and doctors, respectively), while others pay low wages because the job requires no unusual skills or provides non-cash benefits so that there are always more applicants than jobs.

H/T to Mises Economic Blog for the link.

October 19, 2009

The fantasy economic world of Star Trek

Filed under: Economics, Media — Tags: , , — Nicholas @ 07:32

Dmitry Chernikov looks at the nonsensical economic “system” of the Star Trek universe:

Similarly, we never see Quark, who owns a bar on the space station, get paid for dispensing his drinks; at least, I don’t recall ever seeing that. For a guy obsessed with latinum (now there’s your sound money—latinum-standard; and in another episode we learn that gold is worthless compared to latinum) this is a problem, especially given that the Federation military employees on the station don’t receive any wages. Once again, the necessary obscurity of how Quark’s business worked (because it obviously cannot work) seems rather annoying. So the conundrum remains. And even for the Ferengi, all business and consumer transactions appear to be performed with cash, that is, actual bars of latinum. They apparently have no stock market (the litmus test for whether a society is capitalist or socialist), no electronic asset transfers, no banking system (banks have two distinct roles, often unfortunately confused under the present fiat money regime: they are (1) warehouses storing valuable property, such as gold coins, a function called deposit banking; and (2) intermediaries between lenders and borrowers, called loan banking), no insurance companies, nothing. There are no big corporations, no brand names, no advertising (on the absence of any kind of commercial mass media see below), no private retail outlets, no Internet shopping. There aren’t even latinum coins, for goodness’ sake! And if not the Ferengi, then who else?

Note that the Ferengi are, of course, the classic stereotype of the Jews, as propounded by Nazi and Soviet propaganda: ugly; crass, materialistic, and base; grasping and scheming; and treacherous. But, in the case of Quark, not entirely without redeeming qualities, particularly when he cooperates with the ruling regime on the station. That is, quite despite his perverse nature, there exists within Quark’s ignoble little soul a weak aspiration to be like the far more noble humans. What a grotesque and utterly false parody of a typical businessman (and Jews, to boot) within a system of natural liberty and free enterprise! In the unhampered market economy the “superior men,” the better-off, the elite or the society’s “natural aristocracy,” are drawn into service to the common man. Entrepreneurs become rich because the masses, the “poor,” rush to outbid each other on the products offered to them for sale. If they fail to satisfy the consumers’ wants, they will forfeit their wealth and their vocation as entrepreneurs and be demoted into the rank of laborers. Personal wealth in a free society is thus a consequence of previous success in serving consumers.

[. . .]

Now it is obvious that the variety of goods and services available on DS9 is extremely limited. The personnel seem to be, as one, ascetic workaholics. I’ve never seen any character go shopping. I suppose that these guys are supplied with government-made standard-issue everything. This can’t be a lot of fun, don’t you think? Also, don’t misunderstand me, I love classical music, but is that all that the Federation citizens are allowed to listen to (I am referring to ST: The Next Generation, in particular)? In other words, instead of a highly developed commercial culture expected of a sophisticated multi-planet division of labor, we get almost complete conformity and uniformity. To put it another way, the characters “have no life”; they are totally devoted to the welfare of the “collective,” the collective being, of course, their superior officers. I could never understand why the Federation was so contrasted with the Borg. The Borg are very much like the Federation, only perhaps with slightly less individual freedom. (Maybe the difference is that, unlike the Borg captives, the Federation serfs love the Big Brother.)

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