Quotulatiousness

November 4, 2018

Statistics Canada wants to become “Stasi”-tistics Canada by grabbing personal financial data

Filed under: Bureaucracy, Cancon, Government, Liberty — Tags: , , , — Nicholas @ 05:00

“Stasi” was the abbreviation for the German Democratic Republic’s State Security Service, East Germany’s successor to the Gestapo. Not only did they perform similar functions to the Gestapo, they were even more involved in spying on Germans than their Nazi predecessors had been. Wikipedia says that “the Stasi employed one secret policeman for every 166 East Germans; by comparison, the Gestapo deployed one secret policeman per 2,000 people. As ubiquitous as this was, the ratios swelled when informers were factored in: counting part-time informers, the Stasi had one agent per 6.5 people. This comparison led Nazi hunter Simon Wiesenthal to call the Stasi even more oppressive than the Gestapo.” Statistics Canada doesn’t want to get the full story on us by physically spying — that’s the RCMP’s job — but they do want to grab huge amounts of our personal financial data to “ensur[e that] government programs remain relevant and effective for Canadians”. Terence Corcoran explains why this might not be such a good idea:

When news broke earlier this year that the accounts of maybe 600,000 Canadian Facebook users had been compromised, Ottawa swung into action to shut down this alarming example of creeping surveillance capitalism. Scott Brison, then acting minister of democratic institutions, said his government had dispatched Canada’s national spy agency to make sure the privacy of Canadians had not been compromised. “Social media platforms have a responsibility to protect the privacy and personal data of citizens,” said Brison.

But when news broke last week that Statistics Canada wants to expand its inventory of data on Canadians by collecting real hard-core personal information on the banking activities of 500,000 Canadians annually, the Trudeau government was suddenly not at all concerned about privacy breaches or even the principle of privacy protection. Instead of waving a red flag over the prospect that StatCan would end up with computers full of private financial details on millions of citizens, Prime Minister Justin Trudeau brushed off privacy concerns, which he implied take a back seat to the government’s need for “high quality and timely data.” Such data, he said, are “critical to ensuring government programs remain relevant and effective for Canadians.”

Spoken like a true central planner and enthusiastic purveyor of policy-based evidence making. Nobody seems to know why StatCan wants to begin collecting personal banking information on individual Canadians, information that Canada’s bankers are rightly reluctant to provide. In the all-new era of fintech and blockchain, the great concern among regulators is how data privacy will be protected. At StatCan, the concern is: “How do we get our hands on the data?”

[…]

StatCan’s assurances on privacy protection are not all that reassuring. In a document dated October 2018 — obtained by David Akin at Global News— the chief statistician describes his agency’s “Generic Privacy Impact Assessment related to the acquisition of financial transactions information.” It is clear that the names of millions of Canadians, their bank account numbers and transactions, their bill payments and personal activities, will be collected and stored in government computers. StatCan is not merely getting useful generic data on the spending and banking habits of Canadians, it is collecting the actual spending and banking habits and names of individual Canadians.

It is one thing to collect and analyze statistics based on anonymous data. It is quite another to “require” — Arora’s word — that the banks provide “individual payments and income history.” Even though billions of bits of private, individual and personal information will be collected, StatCan says that, “Under no circumstances will the personal information obtained from financial institutions be used to perform credit, expenditure or income checks on individual Canadians.” He said none of the resulting statistical reports will include any personal data.

That’s not good enough.

QotD: LEED indulgences

Filed under: Bureaucracy, Business, Environment, Government, Quotations, Religion — Tags: , — Nicholas @ 01:00

I am not religious but am fascinated by the comparisons at times between religion and environmentalism. Here is the LEED process applied to religion:

  • 1 point: Buy indulgence for $25
  • 1 point: Say 10 Our Fathers
  • 1 point: Light candle in church
  • 3 points: Behave well all the time, act charitably, never lie, etc.

It takes 3 points to get to heaven. Which path do you chose?

Warren Meyer, “When Sustainability is not Sustainable”, Coyote Blog, 2013-07-30.

November 3, 2018

“[I]t makes no sense to punish Americans with tariffs in order to convince foreign governments to stop punishing their citizens with tariffs”

Filed under: Economics, Government, Politics, USA — Tags: , , , , , — Nicholas @ 03:00

Veronique de Rugy discusses the mercantilist errors that still influence politicians and voters on free trade policies:

There are many changes to domestic policy that could help protect Americans from the predations of protectionism. For instance, when considering whether or not to grant U.S. firms “trade remedies,” such as countervailing duties, officials should have to take into account the consequences for American consumers of any tariffs they’re thinking of imposing. Policy makers aren’t currently required to do that, and one agency — the International Trade Commission—is actually forbidden from doing so.

This must change. Recent developments prove that it’s dangerous to simply assume all U.S. presidents and a critical mass of legislators will remain committed to the principles of reciprocal free trade. Buyers of imported goods or products made with imported materials — which, to be clear, is all of us — can’t depend on the economic acumen of the policy makers deciding whether or not to impose tariffs. Instead, consumer protections need to be built into the regulatory process. Because there are virtually always more workers in consuming industries downstream of the trade barrier than there are in the sector receiving the protection, a requirement to take the harm to consumers into consideration would make it very hard to impose protectionist policies.

Some free trade sympathizers have floated the possibility of Congress reclaiming its power to impose tariffs from the White House. Sen. Mike Lee (R–Utah), for instance, has introduced the Global Trade Accountability Act, which would require congressional approval for tariff increases or other “unilateral trade actions.” Unfortunately, if this otherwise well-designed bill became the law of the land, it would be akin to guarding the hen house with a hungry dog instead of a fox.

An extensive literature shows that moving tariff-setting policy away from Congress (and its parochial, locally focused interests) was a critical part of reducing protectionist influence in Washington. President Trump is terrible on this issue, but in general, a president is more likely than are members of Congress to consider the interest of the entire country — and, hence, to support broad trade liberalization.

November 2, 2018

Operation Choke Point

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

In Forbes, John Berlau details how expansive regulatory powers and vindictive bureaucrats make doing business in the United States less “free enterprise” and more “shame if something were to happen to it”:

Every Halloween, there exists the temptation for bloggers, pundits, and commentators to describe routine events in the news with adjectives like “scary” and “frightening.” Sensitive to sounding clichéd or inflammatory, I try usually to avoid using such terminology in my descriptions of the policy process.

Yet after reading through new documents introduced into a lawsuit stemming from the Obama administration’s “Operation Choke Point,” I find that “scary” and “frightening” actually fit. These documents show that powerful bank regulatory agencies engaged in an effort of intimidation and threats to put legal industries they dislike out of business by denying them access to the banking system.

While I am often outraged about things the government does, now I am truly scared and frightened about the ability of government bureaucrats to shut down arbitrarily whole classes of businesses they deem to be “politically incorrect.” As one who champions the FinTech sector and the benefits it can bring, I also worry that such powers may be uses to shut down innovative new industries, such as cryptocurrency, that carry some perceived or real risks.

Choke Point was a multi-agency operation in which several entities engaged in a campaign of threats and intimidation to get the banks that they regulate cut off financial services – from providing credit to maintaining deposit accounts — to certain industries regulators deemed harmful a bank’s “reputation management.” The newly released documents – introduced in two court filings in a lawsuit against Choke Point — show that the genesis of Choke Point actually predated Barack Obama’s presidency, and began when President George W. Bush was in power.

[…]

When the Obama administration came into power, the FDIC would expand the definition of “reputation risk” even further, and other federal agencies, bureaus, and departments would soon jump on the proverbial bandwagon. Much of Operation Choke point would again be accomplished by “guidance documents,” which my Competitive Enterprise Institute colleague Wayne Crews refers to as “regulatory dark matter,” since they have legal force but allow regulators to bypass the sunlight of the notice-and-comment process of a formal rule.

In 2011, an FDIC guidance document featured a chart of business categories engaged in what it called “high-risk activity.” These included “dating services,” “escort services,” “drug paraphernalia,” “Ponzi schemes,” “racist materials,” “coin dealers,” “firearm sales,” and “payday loans.” The FDIC would post this and similar lists in other guidance documents and on its web site.

A staff report of the House Government Reform and Oversight Committee puzzled over many of these categories. “FDIC provided no explanation or warrant for the designation of particular merchants as ‘high-risk,’” the report observed. “Furthermore, there is no explanation for the implicit equation of legitimate activities such as coin dealers and firearm sales with such patently illegal or offensive activities as Ponzi schemes, racist materials, and drug paraphernalia.”

October 31, 2018

Premier Ford’s promise to lower electricity rates in Ontario

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

In the Financial Post, Lawrence Solomon says Doug Ford can’t risk abandoning his promises about Ontario electricity costs, despite his cabinet’s worries about provincial reputation damage:

Ford has every reason to return the power system to some semblance of economic sanity. Ontario is now burdened by some of the highest power rates of any jurisdiction in North America, throwing households into energy poverty and forcing industries to close shop or move to the U.S. The biggest reason by far for the power sector’s dysfunction is its renewables, which account for just seven per cent of Ontario’s electricity output but consume 40 per cent of the above-market fees consumers are forced to provide. Cancelling those contracts would lower residential rates by a whopping 24 per cent, making good on Ford’s promise to aid consumers.

[…]

To date, Ford has stopped renewable developments that haven’t been completed, which will prevent things from getting worse, but he has failed to tear up the egregious contracts of completed developments, which will prevent things from getting better. Based on conversations that I and others have had with government officials, it appears that Ford is inclined to cancel the contracts and honour his signature promise, but he is being thwarted by cabinet colleagues who fear that Ontario’s reputation will take a hit in the business community if they don’t play nice.

Except, there’s nothing nice about betraying a promise to the voters who democratically put you in power in order to avoid pressure from lobby groups who think governments are entitled to hand out sweetheart deals to their favoured cronies. There’s also nothing democratic about it. It is an axiom of parliamentary government that “no government can bind another.”

Canadian governments, including Ontario governments, have in the past torn up odious contracts, including those in the energy sector. When they did, upon passing binding legislation, they were able to reset the terms, offering as little or as much compensation as they wished. Outraged business lobbies’ claims that the reputation of governments would be affected were not borne out. Moreover, such rightings of political wrongs serve the interest of small government and free markets, because businesses have always understood that there’s an inherent risk in contracting with governments that are able to unilaterally rewrite contracts. To overcome that inherent risk, businesses add a risk premium when getting in bed with government, helping to explain the rich contracts the renewables developers demanded. That risk premium acts to make business-to-business dealings more economic than business-to-government dealings.

October 29, 2018

The decline of personal liberty in a social media world

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

Fernando del Pino Calvo-Sotelo on the slowly diminishing personal liberties in western countries and the steady expansion of state power:

… freedom around the world is more and more defined just by one measure, that is, the fact of being able to put one vote (lost among other 24 million votes, in the case of Spain) in an urn every four years. But who cares about all the other, much more relevant, civil rights? Freedom is being able to vote, but it is way more than that. However, democratic power holders have distracted us with political freedom while taking away ever higher degrees of personal freedom – while we turned a blind eye to the fragility of democracies, which soon move away from the utopian “government of the people”. Indeed, as Mill points out, “the people who exercise power are not the same people over whom it is exercised”. As stated by the Iron Law of Oligarchy, regardless of the apparent form of government (republic, monarchy, democracy, dictatorship…), all political power presupposes the power of a very small group over the vast majority of the population. Secondly, “the people can aspire to the oppression of a part of it,” that is, democracy may become the tyranny of the majority over the minority (made up of Jews, blacks, the rich…), a sort of mob rule, as the US Founding Fathers feared. For this reason, Mill recommended keeping democracy constrained by the same controls that prevent the abuse of power typical of the tyranny of an individual.

But the oppression of political power is not the only form of tyranny. As Mill described in 1861 in a remarkably prophetic paragraph, society itself can also exercise the subtlest of tyrannies, “a social tyranny more formidable than that of many models of political oppression, which affects much more details of daily life to the extent of enslaving the soul (…), that is, the tyranny of dominant opinions and feelings that seeks to impose by force its own ideas and practices as a standard of conduct to mold characters according to the preconceived model”. Today, the oppression of political correctness, decided by the global power agenda of noisy, powerful and organized minorities, is trying to stifle the once sacred freedoms of conscience, opinion and expression in an era in which free and truthful journalism is all but gone and in which social networks, the most dangerous societal control weapon ever invented, impose their slogans and release their hordes to lynch the dissident. New totalitarian ideologies want to dominate as new state religions of mandatory belief. Such is the case of the absurd and manifestly unscientific gender ideology (that would just be another stupid fad were it not for its goal of deceiving the youngest in order to “enslave their soul”), or of the ideology of the also unscientific and superstitious climate catastrophism. Not content with controlling our actions and appropriating our money through abusive taxation, the tyrants of today’s democracies seek to control what we believe and what we feel (and particularly, what we fear!).

Possibly never in history has there been such a brutal attempt to steal man’s freedom, and never has man been so blind, so sheepish and so helpless before those who openly wish to enslave him. In fact, we are being ruthlessly pushed towards a society of slaves of the State and of political correctness. Will we break the chains, now that we are still in time, or will we allow our children to be born already slaves wondering why their parents conformed and chose not to fight for their freedom?

H/T to Small Dead Animals for the link.

October 26, 2018

Economist Jack Mintz dis-claims credit for the Liberals’ carbon tax scheme

Filed under: Economics, Environment, Government — Tags: , , , , — Nicholas @ 05:00

Everybody likes to be recognized for their work, but Jack Mintz wants to delineate where his original plan and the actual carbon tax scheme implemented by the federal government diverge:

I continue to maintain, as I have all these years, that the best way to implement carbon taxes is to use the revenues to reduce harmful corporate and personal taxes (I’ve since added land-transfer taxes to the original list). This includes removing anti-competitive levies while also providing support for low-income households to cope with higher electricity, heating and transportation costs.

However, what was unveiled Tuesday by the federal Liberal government in its carbon-pricing plan fails to achieve what I would have argued to be an ideal carbon policy. What is being advertised as a climate plan for provinces that fail to follow Ottawa’s carbon-tax directives — currently New Brunswick, Ontario, Manitoba and Saskatchewan, but they’ll likely be joined by others — instead comes across as a grand redistribution scheme administered by an expanding government bureaucracy.

While the federal carbon tax is almost uniform (electricity is not yet included), it provides special exemptions for certain sectors such as farmers, fishers, aviation, power producers in the North and greenhouse operators, although not the ones growing recreational cannabis.

But the departure from uniformity is marginal and not nearly as concerning as the Trudeau government’s continuing commitment to existing and even new regulations and subsidies to promote “clean energy,” each with their implicit carbon price. While economists repeatedly argue for a carbon tax precisely because it means we can forgo these high-cost interventions, somehow that has all been lost. While plenty of the economists behind the carbon-tax lobby were cheering Prime Minister Justin Trudeau’s new plan yesterday, I somehow missed their demands that we now must eliminate clean fuel and renewable electricity standards, subsidies for electric vehicles and ethanol — all of which have carbon costs well in excess of the $50-a-tonne carbon tax planned for 2022.

Another failure of the federal plan is to pass on carbon taxes in the form of Justin Bucks — or, to use the more laborious official name for these tax rebates: Climate Action Incentive Payments. So, rather than include carbon taxation as part of a comprehensive tax reform to make the tax system simpler, less distorting and fair, these Justin Bucks will be paid to households, small businesses, municipalities, universities, colleges, hospitals, non-profit and Indigenous populations.

A fatal flaw in federal pricing plan is a major shift in taxes from individuals to businesses. The average per household rebate — $1,161 in Saskatchewan in 2022 for example — is more than the cost per household of $946 (not including GST or HST on any energy bills). Even though the document states that business taxes are fully shifted forward to households, something is amiss here. How can household rebates average more than costs?

October 25, 2018

It’s not a “bribe” … it’s an “incentive”!

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

Terence Corcoran explains why the federal government’s promised “incentive” isn’t in any way, shape, or form any kind of bribe:

Step right up, ladies and gentlemen. Welcome aboard the all-new Canadian Cynical Circular Carbon Circus, the amazing Liberal climate control spectacle that will send you on a great environmental ride into the future.

Come on in! We will pay you to not consume fossil fuels — as individuals and as industries. It’s an economic revolution that takes us beyond blockchain and cryptocurrencies and cannabis into a brave new universe in which money goes round and round and everybody wins. We will pay Canadians with their own money — more than $20 billion over five years in carbon taxes that will raise the price of gasoline by 11 cents a litre by 2022, and ever higher thereafter if not sooner. Everybody pays and everybody wins, except for those who don’t. And some people win more than they pay. It’s better than a lottery!

For the people of Ontario, Saskatchewan, Manitoba and New Brunswick, the federal carbon circus cash comes via a new “Climate Action Incentive Payment.” An Ontario family of four will receive $307 for this year, the amount to be claimed on 2018 income tax returns. A Saskatchewan family will get a Climate Action Incentive Payment of $609.

What’s the Climate Action Incentive Payment for? The Liberal plan unveiled by Prime Minister Justin Trudeau and Environment Minister Catherine McKenna Tuesday doesn’t specify. What are taxpayers in the four provinces being incented to do, exactly, with this new wad of free cash? There is only one explanation: Vote Liberal in 2019!

The payments are based on a 2019 carbon price of $20 a tonne, rising to $50 by 2022. As the carbon tax goes up, Ontario families will receive $718 in 2022 and Saskatchewan families $1,459. And there will be more to come, presumably, since the latest doomsday scenario from the UN Intergovernmental Panel on Climate Change — the font of all speculation and data manipulation on climate issues — warned that by 2030 (only 12 years from now) a carbon price of somewhere between $135 to $5,500 per tonne would be needed to keep global warming below 1.5 degrees Celsius.

October 22, 2018

The right to repair

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

Cory Doctorow:

Companies have always tried to corral their customers into behaving in ways that maximize the companies’ profits, even if that’s not best for the customers: forcing you to use “official” printer ink, to buy your printers and terminals from the same company that sold you your mainframe, to get your apps from the company that sold you your phone.

One especially effective profit-maximization strategy is controlling repairs. If a company can force you to use its official repair services, they can set prices for parts and service, and force you to use original manufacturer’s parts, rather than third-party parts or refurbished parts. And, of course, they can refuse to repair a product after a certain number of years: in the absence of a third-party repair option, this means that you have to throw away your product and buy another one from the company.

Though the urge to control customers to maximize profits is as old as business, the digital era has seen an important shift in the tactics used to make business models mandatory. The abuse of laws like Section 1201 of the DMCA (which bans breaking DRM), the Computer Fraud and Abuse Act (which lets companies treat their “license agreements” as though they had the force of law), as well as trade secrecy and monopolistic supply-chain control has literally criminalized many forms of independent repair, and it’s getting worse.

Last year, 18 state level Right to Repair bills were crushed by a big business coalition led by the tech industry. These bills would end companies’ war on independent service by forcing them to supply parts, manuals, and diagnostic codes to independent technicians.

October 21, 2018

This is why Keynesianism doesn’t work in practice – the politicians flub the hard part

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

Tim Worstall explains the fatal flaw in Keynes’ economic theory … not so much in the theory part, but in the practical application by flesh-and-blood human beings:

We’re told that government borrowing is falling, the deficit closing. This therefore means that it’s possible to relax austerity, to start spending more upon sweeties for the voters. This being exactly and precisely why Keynesianism as a practical matter doesn’t work. For politicians will follow the fun bit and not the difficult part. Thus as an overall theory it simply is, to use a governmental phrase, no longer operative.

[…]

Think of what that basic Keynesian idea is. When the economy’s in the doldrums we should blow out the deficit in order to increase demand and thus boost the economy. But when we’re running at the resource limit then any such attempts will just turn up as inflation. So, we should stop doing that. Also, as Keynes himself pointed out, when the Sun shines is the time to repair the roof. Perhaps pay down some of that national debt so that the next time we need to blow that deficit out we’ve got space to do so.

Do note that this basic set up is also entirely consistent with modern monetary theory. When the economy is running at its limits then we should be taxing more of that created money back to prevent inflation. That is, running a smaller budget deficit, possibly even a surplus.

So, what happens to kill either theory in reality? Well, here we are. Unemployment at its lowest since the early 1970s. Employment to population ratio at its highest since then. And what are people talking about? Blowing out the deficit again to buy sweeties for voters. That is, the political imperatives just don’t militate in favour of anyone using these theories as they’re supposed to work.

In the meantime, of course, we’ve effectively changed the meaning of the word “austerity“:

Austerity is a political-economic term referring to policies that aim to reduce government budget deficits through spending cuts, tax increases, or a combination of both. Austerity measures are used by governments that find it difficult to pay their debts. The measures are meant to reduce the budget deficit by bringing government revenues closer to expenditures, which is assumed to make the payment of debt easier. Austerity measures also demonstrate a government’s fiscal discipline to creditors and credit rating agencies.

To a modern politician — or political activist — “austerity” now means something more like “only spending a bit more this year than you did last year”. British commentators have been accusing the government’s “austerity” measures for all kinds of negative effects, yet there have been no large scale austerity measures brought in.

October 13, 2018

Why Governments Create Inflation

Filed under: Economics, Government — Tags: , , , — Nicholas @ 02:00

Marginal Revolution University
Published on 14 Feb 2017

Inflation can carry with it quite a few costs. But some governments, like Zimbabwe under President Robert Mugabe in the early 2000s, will go out of their to way to create inflation. Why?

Well, in the Zimbabwe example, the government printed the money and used it to buy goods and services. The ensuing hyperinflation acted as a tax that transferred wealth from the citizens to the government.

However, this is a fairly uncommon reason. Inflation doesn’t make for a good tax and it’s a last resort for desperate governments that are otherwise unable to raise funds.

There are other benefits to inflation that would make governments want to create it. In the short run, inflation can actually boost economic output. However, as we’ve previously covered, an increase in the money supply leads to an equal increase in prices in the long run.

If there’s a recession, governments might create inflation to spur productivity and ease the economic downturn. However, this type of inflationary boosting can be abused. Long-term boosting causes people to simply expect and prepare for it.

Reducing inflation is also costly. If the process is reversed and the growth in the money supply decreases, we get disinflation. Unemployment will likely increase in the short run and an economy can go through a recession. But in the long run, prices will adjust as well.

Inflation can be a neat trick for governments to boost productivity in an economy. But it can easily get out of hand and has even been likened to a drug. Once you start, you need more and more. And stopping is awfully painful as the economy shrinks.

This concludes our section on Inflation and the Quantity Theory of Money. Up next in Principles of Macroeconomics, we’ll be digging into Business Fluctuations.

October 12, 2018

Carbon taxes may be efficient, but let’s not rush into it quite yet…

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

Terence Corcoran says we shouldn’t jump at the chance to kill our economy just because carbon taxes are efficient:

It didn’t take long for federal Environment Minister Catherine McKenna to tweet out the news implying that the Nobel committee supported the government of Canada’s carbon-price scheme. The Montreal-based carbon-taxing NGO, the Ecofiscal Commission, hailed Nordhaus for having “demonstrated” that a universal price on carbon was the most “efficient” way to curb climate change.

Before jumping aboard the Nordhaus bandwagon, however, carbon-taxing politicians and all Canadians might want to take a closer look at what they are being led into.

[…]

Nordhaus and his co-winner of this year’s Nobel in economics, former Stanford economist Paul Romer, are great believers in “incentives.” As Romer said in a post-Nobel interview (tweeted by McKenna, naturally): “I believe, and I think Bill (Nordhaus) believes, that if we start encouraging people to find ways to produce lower carbon energy, everybody’s going to be surprised at the progress we’ll make as we go down that path. All we need to do is create some incentives that get people going in that direction, and that we don’t know exactly what solution will come out of it — but we’ll make big progress.”

But why a tax? If all we need to do is deploy the price mechanism, why impose a tax? Let’s ignore for a moment the dubious assumption that the science and economics of climate change are sound and settled. Would it still not be better to have the government set the carbon price, require the energy companies to charge it, but allow the revenue to flow not to government but through to energy companies and their shareholders, and others in the supply chain? That’s where market forces and the above-mentioned miracle price mechanisms — rather than government planners — would determine where to invest and what energy alternatives are best. (No gas retailer could possibly eat the cost of a 90-cent-per-litre carbon tax, so they’d have no choice but to pass at least most of it along to the customer).

One of the ironies of carbon taxation is the enthusiasm for “market mechanisms” and “prices” among politicians who otherwise abhor and resist market pricing of everything from roads to health care to rental housing to public transit to education to broadcasting and telecom and the internet and the price of cannabis, not to mention the Canadian price of milk and chickens. With carbon, market pricing is suddenly a great idea, no matter how fanciful the analyses and speculative the projections.

October 5, 2018

A quick way for Doug Ford to reduce Ontario’s electrical rates

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

Ross McKitrick, Elmira Aliakbari and Ashley Stedman outline one of the fastest ways for the Ontario government to get Ontario electricity rates back down toward the national average:

The Ford government seems to want to repair Ontario’s electricity market. It recently moved to scrap the Green Energy Act and reportedly plans to eliminate or alter the so-called Fair Hydro Plan.

While these moves will mitigate future price increases, they won’t reduce current electricity prices. In fact, according to a Fraser Institute study being released today, to lower existing prices the government must reduce what’s known as the “Global Adjustment” — an extra charge on electricity. It won’t be easy, but reducing the global adjustment could bring down electricity prices by about 24 per cent.

This would be welcome news for Ontarians, as electricity prices increased 71 per cent from 2008 to 2016, far outpacing electricity-price growth in other provinces.

[…]

Between 2008 and 2017, the GA grew from less than one cent per kilowatt-hour (a common billing unit for energy) to about 10 cents, accounting for the entire increase in Ontario electricity commodity costs over that time. Therefore, the key to lowering power prices in Ontario is to reduce the GA.

In our study, we use reports published by the Ontario Energy Board to breakdown the GA to better understand where the money goes and provide specific recommendations on how to lower electricity prices. We found that the largest component of the GA charge — nearly 40 per cent — funds subsidies paid to renewable energy sources (wind, solar, etc.) under feed-in-tariff contracts, yet these sources only provide seven per cent of Ontario’s power output.

And notably, the GA provides almost 90 per cent of revenue earned by renewable generators, with only 10 per cent coming from actual power sales. This overwhelming reliance on government subsidies (paid by ratepayers) rather than actual electricity sales reveals how distorted the pricing structure has become in Ontario.

October 2, 2018

QotD: Legal plunder

Filed under: Government, Law, Liberty, Quotations — Tags: , , — Nicholas @ 01:00

Sometimes the law defends plunder and participates in it. Thus the beneficiaries are spared the shame and danger that their acts would otherwise involve … But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them and gives it to the other persons to whom it doesn’t belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime. Then abolish that law without delay — No legal plunder; this is the principle of justice, peace, order, stability, harmony and logic.

Frédéric Bastiat, The Law, 1850.

September 28, 2018

The staunch Progressive dismissal of Warren Harding and Calvin Coolidge

Filed under: Economics, Government, History, Politics, USA — Tags: , , , , , — Nicholas @ 05:00

In Richard Epstein’s review of Jill Lepore’s recent book These Truths: A History of the United States, there’s some interesting discussion of the Harding and Coolidge administrations:

Lepore’s narrative of this period begins with President Warren Harding, who, she writes, “in one of the worst inaugural addresses ever delivered,” argued, in his own words, “for lightened tax burdens, for sound commercial practices, for adequate credit facilities, for sympathetic concern for all agricultural problems, for the omission of unnecessary interference of Government with business, for an end to Government’s experiment in business, for more efficient business in Government, and for more efficient business in Government administration.” Harding’s sympathetic reference of farmers is a bit out of keeping with the rest of his remarks. Indeed, farmers had already been a protected class before 1920, and the situation only got worse when Franklin Roosevelt’s administration implemented the Agricultural Adjustment Acts of the 1930s, which cartelized farming. But for all her indignation, Lepore never explains what is wrong with Harding’s agenda. She merely rejects it out of hand, while mocking Harding’s conviction.

Given her doggedly progressive premises, Lepore may have predicted a calamitous meltdown in the American economy under Harding, but exactly the opposite occurred. Harding appointed an exceptionally strong cabinet that included as three of its principal luminaries Charles Evans Hughes as Secretary of State, Andrew Mellon as Secretary of Treasury, and Herbert Hoover as the ubiquitous Secretary of Commerce, with a portfolio far broader than that position manages today. And how did they perform? Lepore does not mention that Harding coped quickly and effectively with the serious recession of 1921 by refusing to follow Hoover’s advice for aggressive intervention. Instead, Harding initiated powerful recovery by slashing the federal budget in half and reducing taxes across the board. Both Roosevelt and Obama did far worse in advancing recovery with their more interventionist efforts.

To her credit, Lepore notes the successes of Harding’s program: the rise of industrial production by 70 percent, an increase in the gross national product by about 40 percent, and growth in per capita income by close to 30 percent between 1922 and 1928. But, she doesn’t seem to understand why that recovery was robust, especially in comparison with the long, drawn-out Roosevelt recession that lingered on for years when he adopted the opposite policy of extensive cartelization and high taxes through the 1930s.

Lepore is on sound ground when she attacks Harding and Coolidge for their 1920s legislation that isolated the American economy from the rest of the world. The Immigration Act of 1924 responded to nativist arguments by seriously curtailing immigration from Italy and Eastern Europe, subjecting millions to the ravages of the Nazis a generation later. Harding and Coolidge also increased tariffs on imports during this period. What Lepore never quite grasps is that any critique of these actions rests most powerfully on the classical liberal worldview that she rejects. Indeed, Harding and Coolidge exhibited the same intellectual confusion that today animates Donald Trump, who gets high marks for supporting deregulation and tax reductions at home, while simultaneously indulging in unduly restrictive immigration policies and mercantilist trade wars abroad. Analytically, however, the same pro-market policies should control both domestically and abroad. Hoover never got that message — as president, he signed the misguided Smoot-Hawley Tariff Act of 1930 that sharply reduced the volume of international trade to the detriment of both the United States and all of its trading partners, which helped turn what had been a short-term stock market downturn in 1929 into the enduring Great Depression of the 1930s.

« Newer Posts — Older Posts »

Powered by WordPress