Quotulatiousness

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

April 7, 2019

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

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

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.

April 6, 2019

“The Prime Minister has repaid my loyalty with betrayal”

Filed under: Britain, Europe, Government, Politics — Tags: , , , — Nicholas @ 05:00

Despite the full applicability of the headline to Canadian politics, this isn’t about the Dauphin’s betrayal of cabinet ministers or the Canadian people, it’s actually Matt Ridley talking about Prime Minister Theresa May:

The Prime Minister has ignored the views of the majority of her Cabinet and ruled out No Deal. The reason, we are told, is that No Deal might lead to the re-imposition of direct rule over Northern Ireland, and might lead to a second Scottish independence referendum.

That either of these considerations should outweigh the independence of the United Kingdom from an increasingly decrepit but increasingly autocratic empire is bizarre. If No Deal causes a second referendum in Scotland – we were told that the vote itself would cause that too, remember, but it did not – then we will win that too.

But more bizarre is that these worries have existed all along. If the Prime Minister thinks the risk of direct rule in Northern Ireland (which is happening in practice anyway) trumps all other considerations, and rules out No Deal, then why did she not say so more than two years ago or at any time since? Instead, she said 108 times that we would leave the EU on 29th March, whatever happens; 50 times that she would not extend that date; and 32 times that No Deal is better than a bad deal. Not once did she say it was impossible.

[…]

Mrs May should have ruled out No Deal at the start of the negotiations, if that is what she thought, or she should have meant “No Deal is better than a bad deal” when she said it. As it is, the combination of threatening No Deal until the moment when it might actually matter in the negotiations, then dropping the threat on the feeblest of latest excuses, is about as foolish as one can imagine. And now rushing off to hand the initiative to an apologist for totalitarians, anti-Semites and terrorists instead. Thanks.

The Prime Minister and her allies are now chanting that it is all the fault of the European Research Group for rejecting her deal and are saying they have no alternative than the dismal choices of supporting her deal or no Brexit, as if amnesiac about the third option: their recent promises to leave with No Deal if necessary. Yet the truth is that ever since the debacle at Chequers in July, when everybody from half the Cabinet to the Democratic Unionists to the media to the people themselves told her quite clearly that she would never get the Chequers plan through Parliament, she has been the one at fault.

SNC-Lavalin – Justin couldn’t admit that he was wr… wr… wr… not right

Filed under: Cancon, Government, Law, Politics — Tags: , , — Nicholas @ 03:00

Chris Selley on the Prime Minister’s odd decision not to get ahead of the SNC-Lavalin scandal while he still had some credibility with the public:

It seems like another century, but was in fact only a few weeks ago, that Justin Trudeau had a plausible plan to cauterize the SNC-Lavalin wound within his party: He would apologize for … something.

Presumably he would not apologize for trying to protect 9,000 jobs, and presumably he would not admit improper interference in the attorney general’s and director of public prosecution’s roles. But perhaps he might cop to overzealousness in concern for those jobs, or for poorly communicating his entirely appropriate concerns, or for the various anonymous party sources who were slagging off Jody Wilson-Raybould to friendly journalists.

The latter, certainly, seemed downright imperative. Trudeau and his minions, either under orders or self-assigning, had snatched calamity from the jaws of bother. They were badmouthing an accomplished Indigenous female lawyer for being headstrong, “difficult to work with,” and various other descriptors commonly attached to Type A women when they behave like Type A men. When they ran out of those, they started insinuating she wasn’t a very good justice minister — which is certainly an arguable point, but which rather clashed with Trudeau’s insistence she would still hold that title if not for Scott Brison’s impending departure.

It was absolutely torching their brand. People were laughing in their faces. Something had to be done. And this stand-by-for-contrition narrative was lent some credence, fittingly enough, by anonymous sources. “A senior government official said one of the options being discussed is for Trudeau to ‘show some ownership over the actions of his staff and officials’ in their dealings with his former attorney general,” CBC reported on March 5.

Floating a trial balloon to measure potential reactions is not often prelude to the sincerest of apologies. But in the end, no real apology was forthcoming. The brand-torching continued unabated. And by Wednesday this week, the Anonymous Sources had come full circle: Wilson-Raybould had set various extraordinary conditions for remaining in Cabinet, they told various outlets.

One of them was that Trudeau apologize.

In Maclean’s, Paul Wells wonders why SNC-Lavalin has shaken the Liberals so much:

How did this scandal manage to rattle this government so profoundly? And the best answer I can find is this: Because it reveals truths about this Prime Minister that shake many Canadians’ confidence in him.

As my moral betters in the newspaper columns never tire of repeating, by many standards the SNC-Lavalin mess is quite modest. It seems probable that no money changed hands improperly in 2018 and no law was broken. The protagonists were motivated mostly by a kind of distracted hunch that jobs might be at stake. I mean, the extent to which they had zero evidence for that is breathtaking, but let’s give them the benefit of the doubt. And also by a similarly vague suspicion that it might be bad for branded Liberal candidates if SNC ran into trouble ahead of a Quebec or federal election.

[…]

Finally, all three of these scandalettes have laid bare a stubbornly ramshackle approach to running what has sometimes been a serious country. When flying to India, sure, pack your embroidered sherwani and your convicted attempted murderer, but also maybe bring along a travel plan, a sales pitch and a list of objectives worth achieving. Especially if your ineptitude is about to guarantee you will never get a second chance to visit India.

On SNC, what emerges from all the testimony is the impression that a dozen kids from the McGill debating team snuck into the abandoned ruins of Ottawa and started pretending to be the government of Canada. Jody complained to Bill that Elder and Ben were being mean to Jessica. Justin sent Michael but somehow Michael didn’t have the Section 13 ruling Jody had sent to Mathieu. Then it was Christmas and they all went home for a month.

Where the hell were the 208,000 public servants whose job was to ensure options were explored and workflows respected? Why, in September, when Wernick says everyone was distracted by NAFTA, did nobody at the weekly deputy ministers’ meeting say, “Well, there’s only room for 10 people at the NAFTA table, so why don’t the rest of us strike a working group of officials from Justice, Finance, Innovation and the Privy Council to ride this SNC puppy until we know what’s what?”

I’m pretty sure the reason this didn’t happen is that Butts found it thrilling to have all the important conversations run through his phone. That’s a bush-league reason to stumble into a government-shaking mess.

April 5, 2019

The Brexit trainwreck is “revealing to the British public the extent of its political class’s incompetence”

Filed under: Britain, Europe, Government, Politics — Tags: , , , , , , — Nicholas @ 03:00

Theodore Dalrymple in City Journal on the scale of political tomfoolery going on in the Brexit clusterfutz:

The imbroglio over Brexit has at least had the merit of revealing to the British public the extent of its political class’s incompetence. If it is accepted that people get the leadership that they deserve, however, thoughts unflattering to self-esteem ought to occur to the British population.

Theresa May did not emerge from a social vacuum. She is typical of the class that has gradually attained power in Britain, from the lowest levels of the administration to the highest: unoriginal, vacillating, humorless, prey to the latest bad ideas, intellectually mediocre, believing in nothing very much, mistaking obstinacy for strength, timid but nevertheless avid for power. Thousands of minor Mays populate our institutions, as thousands of minor Blairs did before them.

Avidity for power is not the same as leadership, and Brexit required leadership. There was none to be had, however, from the political class. From the very first, it overwhelmingly opposed Brexit — for some, the eventual prospect of a tax-free, expense-jewelled job in Brussels was deeply alluring — but found itself in a dilemma, since it could not openly deny the majority’s expressed wish. Many Members of Parliament sat for constituencies in which a solid majority had voted for Brexit. They feared that they would not win their next election.

The opposition Labour Party was as divided as the Conservatives. Irrespective of what its MPs actually believed about Brexit—its leader was, until recently, ardent for leaving the European Union, which he believed to be a capitalists’ club, changing his mind for reasons that he has so far not condescended to disclose — its main concern was to force an election that it believed it could win, a victory that would soon make Brexit seem like a minor episode on the road to ruin. The majority of the Labour MPs wanted first to bring about the downfall of a Conservative government and second to prevent Britain leaving the European Union without an agreement — what might be called the leaving-the-Union-without-leaving option. But they wanted the first more than they wanted the second, so under no circumstances could they accede to anything that Prime Minister May negotiated. Because of her tiny majority in Parliament, the hard-line Brexit members on her own side who want Britain to leave without a deal, and the refusal of her coalition partner, the Democratic Unionist Party, to back her, May needs the support of a considerable proportion of Labour MPs — which, so far, she has not received.

But the House of Commons as a whole, including the Conservatives, deprived May of leverage with which to renegotiate, because it voted that it would not accept leaving the Union without a deal. This deprived the European Union of any reason to renegotiate anything: it was a preemptive surrender to the demands of the E.U. that makes Neville Chamberlain look like a hard-bitten poker champion.

April 4, 2019

Of course Facebook is now in favour of government regulation … it’ll keep out their competition

Filed under: Bureaucracy, Business, Government, USA — Tags: , , , , , — Nicholas @ 05:00

The recent calls for the government to regulate social media got support from Mark Zuckerberg, which seems to have surprised some in the media. It’s not at all uncommon for established firms to not only welcome government oversight but to actively support it — because it’s a highly effective strategy to strangle smaller competitors and keep new competitors from entering the field:

On Saturday, Mark Zuckerberg appealed to the government for increased regulation of the internet including his company Facebook. According to Zuckerberg, increased government action is needed to protect society from harmful content, ensure election integrity, protect people’s privacy, and to guarantee data portability. If enacted, the government would possess a wide range of control over internet businesses. For Zuckerberg, this is for the public’s best interest.

But make no mistake about it, Zuckerberg’s cries for regulation is not an appeal to his humanitarianism. On the other hand, it solves glaring issues that Facebook has faced since the 2016 election.

[…]

With increased government oversight, Facebook’s leadership will finally be able to pass the buck to someone else. The government will provide them with a clear set of rules that they will be accountable for. Any negative press coverage that occurs outside of those guidelines, will not be attributable to their company but to the rule-making body of the government. This will allow Facebook’s leadership to regain credibility within a clearly definable framework that they are not responsible for creating.

But perhaps Zuckerberg’s appeal for regulation is even more cunning. Government regulation will undoubtedly be met with higher costs. Internet companies will have to spend more on staffing to be in compliance with the increased burdens implemented by the rule-making body. We saw this play out in the banking industry after the Great Recession. A study conducted last year found that since 2009, banks have been fined a total of $345 billion dollars in penalties and noncompliance costs. Further, another study found that in 2016 banks spent $100 billion dollars on regulatory compliance alone.

Large internet companies like Facebook and Google will easily absorb the strain of increased regulatory costs. It is the smaller businesses that will feel the financial squeeze. With increased regulatory compliance spending, smaller startups will face an even bigger hill to climb to compete with the likes of Facebook.

Another “feature” of government regulation is what is known as “regulatory capture”, as the regulating body and the regulated organizations, after an initial period of ostentatious “conflict”, settle down into a cosy symbiotic relationship … in only a few years, many of the regulatory staff will find themselves working for one of the regulated organizations, and vice-versa. The regulatory body will — like all bureaucracies — start to care more about keeping itself alive and growing than about the original reason it was set up. Small organizations will stall or go extinct, and only the existing dinosaurs will carry on, protected from competition by their regulator’s powers.

LPC Omertà in action

Filed under: Cancon, Government, Law, Politics — Tags: , , — Nicholas @ 03:00

Omertà, according to Wikipedia, is “a Southern Italian code of honor and code of silence that places importance on silence in the face of questioning by authorities or outsiders; non-cooperation with authorities, the government, or outsiders; and willfully ignoring and generally avoiding interference with the illegal activities of others.” It’s also a remarkably appropriate way to describe the Liberal Party of Canada’s standard operating procedure:

“Ultimately the choice that is before you,” Jody Wilson-Raybould pleaded with her caucus colleagues, in a letter written hours before they were to pass sentence on her, “is about what kind of party you want to be a part of, what values it will uphold, the vision that animates it, and indeed the type of people it will attract and make it up.”

But they made that choice long ago. They knew what kind of party they wanted to be a part of from the moment they accepted their nominations; indeed, were they not the type of person that party attracts they would not have been recruited for it. It is the kind of party, and person, that unquestioningly puts loyalty to party before principle — and mercilessly punishes those who do not.

So on the question of whether to expel the former minister of justice and attorney general — along with the former Treasury Board president, Jane Philpott — for the crime of denouncing the attempt, by the prime minister and senior government officials, to interfere with a criminal prosecution, there could have been little doubt how they would vote.

Whether they chose to shoot the messengers so spontaneously, over Justin Trudeau’s objections, as some reports have claimed — they were “determined to take the matter into their own hands,” according to a Canadian Press story, as if MPs were so eager to prove their obedience to the leader as to be willing to defy him — or whether they did so under orders doesn’t much matter. The rotting of the soul is the same either way.

We can now see, if it were not already apparent, the moral compass by which the prime minister and his caucus steer. The scandal in the SNC-Lavalin affair is, by this reckoning, not the months-long campaign to subvert the independence of the attorney general and, through her, to force the independent director of public prosecutions to drop charges of fraud and corruption against a long-time Liberal party contributor, but the opposition to it.

Traditional political theory teaches that the executive branch of government is responsible to the legislative. It is now clearer than ever that the reverse more nearly applies: members of the Liberal caucus plainly see it as their role, not to hold the government to account, but rather their fellow MPs — on behalf of the government. When wrongdoing by those high in government is alleged by a pair of whistleblowers, their first thought is to root out the whistleblowers.

April 3, 2019

Greater Poland Uprising – Book Picks – Veteran Care I BEYOND THE GREAT WAR

Filed under: Books, Economics, Europe, Government, History, Military, WW1 — Tags: , , , — Nicholas @ 06:00

The Great War
Published on 2 Apr 2019

It’s time for another episode of Beyond The Great War where we answer questions from the community. This time we take a look at the Greater Poland Uprising and the situation of Poland in early 1919, Jesse recommends a few of his favourite history books and we also talk about how veterans were treated after the 1918 armistice.

» SUPPORT THE CHANNEL
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» SOURCES
Boysen, Jens. “Polish-German Border Conflict”, in 1914-1918 online. International Encyclopedia of the First World War. https://encyclopedia.1914-1918-online…

Davies, Norman. White Eagle, Red Star. The Polish-Soviet War 1919-1920 and the ‘Miracle on the Vistula’ (London: Pimlico, 2003 [1972]).

Gattrell, Peter. Russia’s First World War (Pearson, 2005).

Gerwarth, Robert. The Vanquished. Why the First World War Failed to End, 1917-1923 (Penguin, 2017).

Horne, John. “The Living,” in Jay Winter, ed. The Cambridge History of the First World War, vol. 3: Civil Society (Cambridge: Cambridge University Press, 2014): 592-617.

Leonhard, Jörn. Der überforderte Frieden. Versailles und die Welt 1918-1923 (CH Beck, 2018).

Pawlowsky, Verena/Wendelin, Harald. “Government Care of War Widows and Disabled Veterans after World War I,” in: Contemporary Austrian Studies, XIX: From Empire to Republic: Post-World War I Austria, eds. Bischof, Günter/Plasser, Fritz/Berger, Peter (2010): 171-191

Prost, Antoine. “Les anciens combattants”, in Stéphane Audoin-Rouzeau and Jean-Jacques Becker, eds. Encyclopédie de la Grande guerre 1914-1918 (Paris: Bayard, 2013): 1025-1036.

Snyder, Timothy. The Reconstruction of Nations. Poland, Ukraine, Lithuania, Belarus, 1569-1999 (Yale University Press, 2003).

April 2, 2019

How Trains Changed China | Stuff That I Find Interesting

Filed under: China, Economics, Government, History, Military, Railways — Tags: , — Nicholas @ 02:00

Jabzy
Published on 27 Mar 2016

Thanks to Xios, Alan Haskayne, Lachlan Lindenmayer, William Crabb, Derpvic, Seth Reeves and all my other Patrons. If you want to help out – https://www.patreon.com/Jabzy?ty=h

Music by Derek Fiechter – https://www.youtube.com/channel/UCVRJ…

April 1, 2019

Sean Gabb on the Brexit crisis

Filed under: Britain, Europe, Government, Politics — Tags: , , , , — Nicholas @ 03:00

In his latest email newsletter, Sean Gabb discusses the Brexit situation:

The consensus in the media appears to be that Parliament is out of control, and is attempting to stop our exit from the European Union – even if this means tearing up every settled constitutional norm. I disagree. No doubt, the House of Commons is filled with some very trashy people, and I have little doubt most of them would like to stay in the European Union. Even so, they are acting collectively with strict constitutional propriety. For the first time in my life, they are earning their inflated salaries and expenses and bribe allowances.

Three years ago, we vote to leave the European Union. The margin was respectable, though not substantial. The Government was therefore given one reasonably difficult job. This was to detach us from the institutions of the European Union, while respecting the wish of a large majority for continued good relations with the European Union. This was difficult, but hardly in the same class as trying to win a war against the greatest military power in the world, or dismantle an Empire, or even reform the structures and financing of local government. The most obvious compromise was to rejoin EFTA and remain in the Single Market, while negotiating a longer term set of arrangements. Most people, I think, would have accepted such a compromise. I would, and I may have written about it at the time.

Instead of doing this, however, Theresa May loaded us with endless vague promises, while negotiating in secret with the European Commission. At the end of two years and six months, she presented us with a draft Withdrawal Agreement that was universally unacceptable. I will not rehearse why it was unacceptable. Everyone has read it for himself, or read a fair summary and critique. When this was presented to the House of Commons, it was overwhelmingly rejected. Why the Labour Party and the various open Remainers voted against it is less important than that they did vote against it. This is why we have a Parliament. It is there to stop the Executive from acting against the public good. It is there to make the voice of the people heard.

Our present set of crises blew up when it emerged that Theresa May had allowed no one to think about any alternative to her Agreement. Her only solution to losing the first vote was to arrange for another, and then for another. Each time, her Agreement was rejected – and rejected, I repeat, for good reasons. But, thanks to her wickedness or stupidity, there were only three options available to Parliament. One was to swallow her Agreement. Another was to leave without any deal. The other was to give up on leaving – to cancel the Referendum result.

[…]

It may be that the plan was to unveil a fraudulent leaving agreement, and to whip this through Parliament, leaving the rest of us to grumble about it for the next generation, though unable to do anything about it. If so, the plan has failed. The problem is not that our ruling class does not want to be bound by the will of the people – this is hardly a novel discovery. The problem is the crude inflexibility of our rulers. The EFTA compromise I and most other people would have accepted three years ago would have allowed any number of quiet understandings in London that let things as they matter to our rulers go on much as before. Instead, they wanted complete victory on their terms, and they planned for no other outcome. No competent strategist or negotiation behaves like this. The Tory ultras did not behave like this in 1832 or 1911. Labour did not behave like this after 1983. On the whole, we are lucky that we have asked these people only to arrange a departure in good order from a customs
union. They might instead have messed up something really important.

These crises have been a useful learning experience. Theresa May and the interests she has been chosen to front are both wicked and stupid. Speaking for myself, I think our Members of Parliament – wretched creatures if these may be in themselves – for doing their job and lifting the stone to show the pale and stinking bugs in full light of day. Sooner or later, we shall leave the European Union. This will be a messier and more acrimonious departure than it needed to be. But I suspect that the debate between Leavers and Remainers is turning to a shared demand for our will to be obeyed by the Executive. This is a much wider matter than our membership of the European Union. Leaving is now a symbol of who has the final say in this country. The longer our decadent rulers try to hold firm, the more radical the demands will grow for a reconstruction of the system.

I have no idea what will happen in the next few weeks. But I am glad we have the Parliament that we have.

Alex Noble feels the situation is going pretty much exactly how the EU wanted it to go from the start:

For a few months now I have written about how the EU’s plan is increasingly transparent, and it is becoming possible to anticipate their every move.

I believe we are now so close to the outcome they wargamed a year ago, that the final week is now almost completely predictable.

For what it’s worth, here we go.

[…]

So this coming week, the EU will water down or remove the backstop they never cared about, and the British people will be betrayed into vassalage by their Vichy Parliament.

That’s right – another “breakthrough” is imminent, although I suspect the EU will once again trot out the gap-toothed Belgian bumpkin Verhofstadt to pretend to find the whole affair insulting, so we remember to be properly grateful to his paymasters.

All other options now are just scare tactics – No Brexit, No Deal, long extensions, a general election, a loss of drinking water, or pet food, or medicine – these are all just the Bad Cop act designed to get us to gratefully turn to the Good Cop.

Namely the EU’s Withdrawal Agreement, which as I’ve pointed out is like the Withdrawal Technique in that despite the promises made, it usually involves no actual withdrawal.

We have been herded for nearly a year like scared children towards the EU’s treaty, which imprisons us forever in the EU – it is what they wanted all along, and they have used our government, our MPs (with a few dozen honourable souls still resisting as I write), our media, and the craven statists embedded in our institutions to convince us that the EU’s Withdrawal Agreement represents freedom.

In this coming week, all but a few dozen stalwarts will crumble, and then the only question is whether enough Labour europhiles will cross the House to pass this grotesque betrayal and inflict it on the British people.

At that stage, I wonder whether our cries of fury and anguish will fade into silence, or swell into carnage?

March 30, 2019

The EU’s copyright regulation is a stalking horse for online censorship and control

Filed under: Business, Europe, Government, Liberty, Media, Technology — Tags: , , , , , , — Nicholas @ 03:00

To the amazement of many non-EU observers, the European Parliament passed blatantly authoritarian and corporatist changes to the rules on copyrights that will have potentially vast impact on the internet across the world, not just inside the EU. At City A.M., Kate Andrews explains why this is such bad news for all internet users:

The two most controversial points in the law – Article 11 and Article 13 – are almost certain to stifle digital activity, and interfere with the free way that people currently use online platforms.

Article 11, known as the “link tax”, would make online platforms compensate press publishers for links and article content posted on their sites.

As my colleague Victoria Hewson highlighted in her latest briefing, this approach has been “widely criticised as a distortive measure that seeks to prop up a declining industry”.

As many local and national newspapers decline in readership and revenue, governments have become increasingly protectionist in their attempts to “rebalance” the sector, by cracking down on online platforms.

The link tax has little merit, even if rebalancing is the goal. News outlets which require payment for readership already have logins and paywalls to protect their content from free access.

[…]

Article 13 will also be distortive to the market, as it makes online platforms increasingly liable for copyright infringement.

As Hewson’s briefing notes, major online platforms already have routine screening processes for content that violates copyright law or their own rules. But the new regulations “remove the protection for platforms previously available if they removed violating content promptly on receiving notice of it, and contravene fundamental rights such as free expression and freedom from monitoring”.

The Directive claims that safeguards – including pastiche, parody, and quotations – will be protected, and that meme content has been excluded.

But the algorithms which these platforms will have to implement to adhere to Article 13 are going to struggle to see the difference between infringement and fair use when comparing uploads to content that is registered as copyrighted.

March 27, 2019

“This was the week it became necessary to destroy the village of good government in order to save it”

Filed under: Cancon, Government, Media, Politics — Tags: , , , — Nicholas @ 03:00

It may be hard to believe, but in his latest at Maclean’s, Paul Wells appears to be getting a little bit cynical about recent shenanigans in Ottawa:

We have learned so much. Within minutes Monday afternoon, two good reporters had stories (here and here) about the Chief Justice of Manitoba, who was a candidate to be Chief Justice of the Supreme Court of Canada and who, later, wasn’t. Both reporters unfurled similar yarns about a lone Prime Minister standing athwart the tide of conservatism by blocking — shudder — a Harper appointee from sitting on the top court. Jody Wilson-Raybould plays the role of villain in the piece.

Both reporters decorously neglect to mention that Trudeau’s choice for Chief Justice, Richard Wagner, was a Harper appointee.

There are many things we can say about this story, working outward in concentric rings from the thing itself. First, Glenn Joyal’s views, as expressed in speeches that were said to alarm the prime minister, are almost comically orthodox. I first became aware of the notion that Charter litigation systematically airlifts important matters from the parliamentary arena and into the realm of jurisprudence in a Chantal Hébert column in the late 1990s. If I had paid more attention to literally any of my Canadian public administration profs a decade earlier I would have caught the argument then, because it is canvassed in every Canadian political science class. This is not wild-eyed Hayekism.

Second, perhaps the many thousands of Canadians who have applied for federal government appointments under what they thought was a confidential process, introduced by this prime minister, will want to contemplate a class-action suit against him. Because it is now radiantly clear to each of them that their CV is being held hostage by a claque of embattled sorcerers’ apprentices who will cheerfully wheel it over the transom to any waiting scribe if anything about them — their opinions, a fallen political star’s unfortunate decision to argue for their advancement — becomes politically inconvenient. This is the very stuff of the police state.

It was immediately fashionable to wonder on social media how everyone would react if Stephen Harper had done such a thing. It’s germane to note that Stephen Harper never did. Because he had more class. Welcome to the Tet offensive of Charter rights: This was the week it became necessary to destroy the village of good government in order to save it.

Third, Justice Joyal’s wife was in poor health. Apparently we are to believe that 9,000 jobs depended on your knowing that.

If the Trudeau government is not the source of the leak, I assume we will see spectacular efforts deployed in the next 36 hours to find the leaker. Mark Norman-scale efforts. But I’m pretty sure that we needn’t hold our breath, because the government is the source of the leak; that the amiable chap who currently sits in the office once occupied by the Attorney General of Canada will not bestir himself to question Monday’s sickening attack on due process; and that the leak will actually be roundly applauded by the ambient cloud of Liberal and Liberal-adjacent opinion, which became self-aware this weekend and decided Jody Wilson-Raybould and Jane Philpott are a virus endangering the party’s re-election chances and must therefore be stopped.

March 23, 2019

“[T]he Withdrawal Agreement … resembles the surrender terms that might be offered to a vanquished enemy”

Filed under: Britain, Europe, Government — Tags: , , — Nicholas @ 05:00

Alex Noble isn’t a fan of the surrender document Withdrawal Agreement:

Let’s be clear – The Withdrawal Agreement is poorly-named.

It does not involve withdrawing from the EU in any meaningful sense, but instead commits us to Remaining within the EU and strips the UK of any future self-determination. It removes from the UK control of any future departure from the EU, and places it in the hands of those who reside in the building in Brussels with the statute of Europa outside – a woman riding a bull, keen students of the Book of Revelation may notice.

To this extent, the Withdrawal Agreement is actually a treaty for staying in the EU – it resembles quite closely the surrender terms that might be offered to a vanquished enemy, or the document that might be initially given to a small country wishing to join the EU.

Like say, Scotland.

One wonders if the EU wrote it in the run-up to the independence vote of 2014, threw it on a shelf when the Scots voted to stay in the UK, and then Angela Merkel simply tossed it across the desk at her puppet Theresa May at their meeting the day before it was announced at Chequers?

If the EU was a lending institution, this would not be a lengthy mortgage offered at a very low fixed rate, to a woman of considerable status, means and integrity (as might be expected of a deal offered to the fifth-largest economy in the world, the second-largest in Europe and the EU’s biggest customer), but is instead deeply punitive, almost insulting, perhaps comparable to a payday loan.

The Withdrawal Agreement is actually The Wonga Agreement.

And this is to be expected of course, because while Britain leaving the EU would be a disaster, Britain leaving the EU and thriving would mean the end of the generational attempt at reviving communism at the heart of Europe – many other countries (and the richer ones at that) would all suddenly be demanding the same terms and the EUSSR would fracture irreparably.

And at that point, all the ex-communists currently gorging at the trough in Brussels would have to accept the death of their dream.

If Britain left and thrived.

So the EUSSR can only survive Britain’s departure if it is made into a disaster for the UK.

Which meant they simply could not offer us a good deal, even if they had wanted to.

The NHS, Britain’s “national treasure”, gets panned by other EU patients who’ve experienced non-NHS care

Filed under: Britain, Europe, Government, Health — Tags: , , — Nicholas @ 03:00

In The Conversation, Chris Moreh, Athina Vlachantoni, and Derek McGhee report that — contrary to British myth-making — the National Health Service isn’t the envy of the civilized world:

Britain’s National Health Service is often described as a “national treasure”. And it is a sentiment those on the left and the right of the political divide agree on. The British public are so proud of the NHS, they made it the central theme of the opening ceremony of the 2012 London Olympic Games.

But this pride has also been coupled with fears that the universal healthcare provided by the NHS might be taken advantage of by patients from outside the UK. A few months after the Olympics, the then health secretary, Jeremy Hunt, felt the need to clarify that “we are a national health service, not an international health service”. The 2015 election-winning manifesto of the Conservative party made this point even clearer when it pledged to “tackle health tourism” and “recover up to £500m from migrants who use the NHS”.

But our research shows that while the NHS may be a national treasure to British people, EU migrants would rather be treated in their countries of origin. As a 38-year-old woman from Germany put it: “Sorry, NHS? No thanks.” And the reasons for rejecting the NHS? A 25-year-old man from the Netherlands says it’s because the “NHS is slow and the medical care mediocre”. Or, at least, it “is rather poor compared to healthcare in my country,” says a 45-year-old woman from Germany.

But why should British people worry about what EU migrants think of their health service? What EU migrants think and choose is important because they are familiar with at least two European healthcare systems. They have the information and personal experience that most British citizens do not. There is a lot to be learnt from them.

March 22, 2019

Understanding the Great Depression

Filed under: Business, Economics, Environment, Government, History, USA — Tags: , , , , , , — Nicholas @ 02:00

Marginal Revolution University
Published on 23 May 2017

In this video, we examine the causes behind the Great Depression with the help of the aggregate demand-aggregate supply model.

In 1929, the stock market crashed and an air of pessimism swept across America — making bank depositors nervous. What would you do if you thought your money might not be safe with the bank? You’d probably want it back in your own hands. What happened next? A run on the banks.

Along with the Stock Market Crash of 1929, it’s one of the iconic moments of the early days of Great Depression. However, the Great Depression was an incredibly complex downturn in which the economy experienced a series of aggregate demand shocks. By the end of this video, you’ll walk away with a better understanding of the many factors behind the Great Depression and how to apply the AD-AS model to a real-world scenario.

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