Quotulatiousness

February 4, 2013

Argentina’s real inflation rate is a state secret

Filed under: Americas, Economics, Government, Media — Tags: , , , , — Nicholas @ 13:19

Argentina has lots of issues, but one of the biggest problems is that their official statistics fall somewhere along the spectrum between “a bout of wishful thinking” and “a tissue of lies”:

Argentina, the only country in the world that threatens private economists with jail terms for disputing the government’s obviously bogus inflation numbers, is now the only country in the world to be censured by the IMF for unacceptably bad economic statistics. In a rare move by the 24 member board of the world’s most prestigious financial institution, Argentina’s government was censured for failing to improve the quality of the numbers it uses to calculate things like GDP and, especially, the inflation rate.

The current president’s husband fired the professional economists in the statistical office in 2007. Ever since, the patent bogosity of Argentina’s statistics has undermined the government’s credibility at home and abroad. Inflation is a deadly sensitive subject in Argentina, where past bouts of hyperinflation have wiped out the savings of whole generations. Currently the government claims inflation is no higher than 11 percent; when the thought police aren’t watching them, private economists whisper that the real rate is more than 25.

This isn’t a new story: The Economist stopped using the official figures in their weekly economic summaries about a year ago. Argentina’s economic policies have become a valuable primer on “what not to do” for other countries. Argentina could be a South American version of Canada, but the political class ensures that will not happen.

February 2, 2013

“The welfare state we have is excellent in most ways. We only have this little problem. We can’t afford it.”

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

Based on this report in The Economist, we really should strive to be more like Sweden, and not for the reasons most Canadians would expect:

Sweden has reduced public spending as a proportion of GDP from 67% in 1993 to 49% today. It could soon have a smaller state than Britain. It has also cut the top marginal tax rate by 27 percentage points since 1983, to 57%, and scrapped a mare’s nest of taxes on property, gifts, wealth and inheritance. This year it is cutting the corporate-tax rate from 26.3% to 22%.

Sweden has also donned the golden straitjacket of fiscal orthodoxy with its pledge to produce a fiscal surplus over the economic cycle. Its public debt fell from 70% of GDP in 1993 to 37% in 2010, and its budget moved from an 11% deficit to a surplus of 0.3% over the same period. This allowed a country with a small, open economy to recover quickly from the financial storm of 2007-08. Sweden has also put its pension system on a sound foundation, replacing a defined-benefit system with a defined-contribution one and making automatic adjustments for longer life expectancy.

Most daringly, it has introduced a universal system of school vouchers and invited private schools to compete with public ones. Private companies also vie with each other to provide state-funded health services and care for the elderly. Anders Aslund, a Swedish economist who lives in America, hopes that Sweden is pioneering “a new conservative model”; Brian Palmer, an American anthropologist who lives in Sweden, worries that it is turning into “the United States of Swedeamerica”.

[. . .]

This is not to say that the Nordics are shredding their old model. They continue to pride themselves on the generosity of their welfare states. About 30% of their labour force works in the public sector, twice the average in the Organisation for Economic Development and Co-operation, a rich-country think-tank. They continue to believe in combining open economies with public investment in human capital. But the new Nordic model begins with the individual rather than the state. It begins with fiscal responsibility rather than pump-priming: all four Nordic countries have AAA ratings and debt loads significantly below the euro-zone average. It begins with choice and competition rather than paternalism and planning. The economic-freedom index of the Fraser Institute, a Canadian think-tank, shows Sweden and Finland catching up with the United States (see chart). The leftward lurch has been reversed: rather than extending the state into the market, the Nordics are extending the market into the state.

Why are the Nordic countries doing this? The obvious answer is that they have reached the limits of big government. “The welfare state we have is excellent in most ways,” says Gunnar Viby Mogensen, a Danish historian. “We only have this little problem. We can’t afford it.” The economic storms that shook all the Nordic countries in the early 1990s provided a foretaste of what would happen if they failed to get their affairs in order.

The Parliamentary Budget Office

Filed under: Cancon, Economics, Government — Tags: , — Nicholas @ 00:01

In Maclean’s, Stephen Gordon examines the role of the Parliamentary Budget Officer separate from the current controversy over the incumbent:

Hence the idea of the Office of Parliamentary Budget Officer (OPBO — I’m adopting Kevin Milligan’s usage of OPBO to denote the office, and PBO for the incumbent), modeled on the U.S.’ Congressional Budget Office (CBO). As in Canada, the economists in the U.S. public service are part of the executive branch; the role of the CBO is to provide professional economic policy evaluations to members of Congress. In the U.S., it has become common practice to run policy proposals through the “reality check” service that is the CBO.

The OPBO has yet to establish itself in the way the CBO has, and it has faced an uphill battle from the start. First, too much of the OPBO’s energy has been spent battling the government over access to information. Second, even when it has access to data, the OPBO has to work with a skeletal staff: in addition to PBO Kevin Page, the OPBO consists of two administrative people, two interns and a grand total of twelve analysts. In comparison, the CBO employs some 235 people. This difference cannot be dismissed by pointing to the larger size of the U.S. economy and its government: policy analysis scales. It takes roughly the same amount of work to evaluate a given policy initiative in the U.S. as it would in Canada. And if that wasn’t enough, the impending departure of Kevin Page — who managed to put together a staff capable of producing an impressive quantity of high-quality work despite these constraints — looks to be an existential crisis for the institution.

But the greatest danger to the establishment of an effective OPBO is a great confusion — on the part of both its supporters and its critics — over what the OPBO’s role is supposed to be.

And he recommends the Australian PBO‘s mandate as a preferred model for Canada’s PBO:

So I have a more modest proposal, but one that might help restore the OPBO to the role for which it was originally intended: make it standard practice for the OPBO to cost electoral platforms. There are several reasons why this is a good idea:

  1. Putting both opposition and government proposals through the OPBO’s costing process will make it easier to remember that the OPBO is non-partisan.
  2. Knowing that the OPBO will be examining the proposals will oblige all parties to step up their games.

January 31, 2013

Blaming “austerity” for most recent slowdown

Filed under: Economics, Government, Media, USA — Tags: , , , , , — Nicholas @ 09:47

David Harsanyi discusses the named (by the mainstream media) culprits for the unexpected drop in US fourth-quarter GDP:

So, U.S. consumer confidence unexpectedly plunged in January to its lowest level in more than a year. The U.S. economy unexpectedly posted a contraction in the fourth quarter of 2012 — for the first time since the recession — “defying” expectations that economic growth is in our future.

If the economy were as vibrant as President Barack Obama has told us it is, a belt tightening in a single sector of government surely wouldn’t be enough to bring about “negative growth.” But one did. Unexpectedly. No worries, though. Pundits on the left tell us that this contraction was good news — possibly the best contraction in the history of all contractions. The White House blamed Republicans and, I kid you not, corporate jet owners because — well, who else? But mostly, the left is bellyaching about the end of temporary military spending and a brutal austerity that’s enveloped a once great nation.

There’s a small problem with that argument. There is no austerity. In the fourth quarter of 2012, Washington spent $908 billion, which was $30 billion more than it spent in the last quarter of 2011 and nearly $100 billion more than it spent in the third quarter of 2012. Taxpayers took on another $400 billion in debt during the quarter. If this is poverty, can you imagine what robust spending looks like?

As always, for “austerity” to take the blame, there’d actually have to have been some austerity to start with. The US government certainly hasn’t been practicing austerity over the last four years.

Talking secession … again … and again … and again

Filed under: Cancon, Government, Law — Tags: , , , — Nicholas @ 09:28

Paul Wells has a few thoughts on secession:

The reason we have spent nearly 40 years debating the effect of referendum results a few points this side or that of 50 per cent is because we have all known for nearly that long that any separatist “victory” in a referendum will be a close thing. If there ever were such a vote, 50 per cent plus a bit on a confusing question, then a sovereignist Quebec government would run into difficulties that don’t have much to do with the text of the Clarity Act and would not be eased by Tom Mulcair’s attempted compromise.

The Supremes sing the hits better than anyone. In their opinion on the Secession Reference, the top court got everyone excited with Paragraph 88, which identifies (Andrew Coyne and many others have said it “invents”) an “obligation on all parties to Confederation to negotiate constitutional changes to respond” to “the clear expression of the desire to pursue secession by the population of a province.” Every six weeks ever since there has been an op-ed in Le Devoir invoking the “obligation to negotiate” as Quebec secessionists’ trump card after a future third-time-lucky majority referendum vote.

It would be so lovely if somebody read more than one paragraph. Having discerned an obligation to negotiate where few had seen one before, the Supremes then ask the obvious question: “What is the content of this obligation to negotiate?” That’s a hell of a question, and since it comes precisely one paragraph after the one that gets everyone so excited, it’d be swell if a few people followed what comes next. The justices promptly “reject two absolutist propositions.” The first is “that there would be a legal obligation on the other provinces and federal government to accede to the secession of a province, subject only to negotiation of the logistical details of secession.” To anyone who says a Yes vote must lead to secession on Quebec’s terms, “we cannot accept this view.” Make the Yes vote as big as you like — Quebec could still not “dictate the terms of a proposed secession to the other parties: that would not be a negotiation at all.”

[. . .]

So a secession attempt would be just about infinitely more complex than the conventional wisdom usually assumes. I haven’t even considered the near-certainty that local secessionist, purely dissolutionist, or U.S.-annexationist movements would pop up across Canada if Quebec began a secession attempt. But surely governments of good will can overcome dissent? Well, maybe, except that the last time Canada’s governments attempted a coast-to-coast set of constitutional amendments — the Charlottetown process of 1992 — the unanimity and best efforts of every head of government in the land wasn’t enough to ensure passage.

There’s a powerful narcotic quality to any conversation that mentions the “Charlatan Accord” for most Canadians over the age of 40: you can see eyes glaze over and lids get heavy the instant that process enters the discussion.

January 30, 2013

Sequestration cuts must be more likely to happen because the sob stories are getting traction

Filed under: Economics, Government, Media, USA — Tags: , , , , , — Nicholas @ 11:53

Tad Dehaven thinks the upsurge in horror stories about what sequestration will do to the US economy means it’s more likely that those cuts will actually take place:

The odds that $85 billion in “unthinkable, draconian” sequestration spending cuts will go into effect in March as scheduled are looking better. The odds must be getting better because, as if on cue, the horror stories have commenced.

A perfect example is an article in the Washington Post that details the angst and suffering being experienced by federal bureaucrats and other taxpayer dependents over the mere possibility that the “drastic” cuts will occur. You see, the uncertainty surrounding the issue has forced government employees to draw up contingency plans. Contingency plans? Oh, the humanity!

[. . .]

I certainly believe that Washington’s bouncing from one manufactured fiscal crisis to the next is detrimental to the economy, but my sympathy lies with the private sector – not the federal bureaucracy. It’s the private sector that has been suffering under the constant uncertainty surrounding federal tax and regulatory policy. And let’s not forget that there is no public sector without the private sector – the former existing entirely at the latter’s expense.

Yet, what follows in the Post article is boo-hoo after boo-hoo without the slightest regard to those who are paying for it or whether the whiner’s agency could use some belt-tightening

There’s a big, unstated reason for illegal immigration in the United States

Filed under: Bureaucracy, Government, Law, USA — Tags: , — Nicholas @ 10:07

The illegal immigration problem won’t improve until the American government addresses the difficulties of legal immigration:

Reason, October 2008 - What Part of Legal Immigration Don't You Understand?!?!?

Reason, October 2008 – What Part of Legal Immigration Don’t You Understand?!?!?

Click the image to see the larger version.

January 29, 2013

Taking the fight against CCTV surveillance to the streets of Berlin

Filed under: Europe, Germany, Government, Liberty — Tags: , , , , — Nicholas @ 10:00

TechEye looks at the “gamification” of resistance against CCTV surveillance in Berlin:

A group of German activists has come up with an intriguing campaign to counter state surveillance — turning the destruction of CCTV cameras into a game.

Dubbed ‘Camover’, the aim of the game is simple: destroy as many CCTV cameras as possible.

Once your target is destroyed, you can upload a video of the act to YouTube for internet points and kudos. The rules say players should come up with a name starting with ‘command’, ‘brigade’, or ‘cell’, followed by the name of a historical figure, then destroying as many CCTV cameras as possible.

“Video your trail of destruction and post it on the game’s website,” the activists suggest, but warn that the homepage is continuously being shut down. It’s recommended that players conceal their identities, but this is “not essential”.

January 28, 2013

Japanese finance minister: “elderly are an unnecessary drain on the country’s finances”

Filed under: Government, Health, Japan — Tags: , , , — Nicholas @ 11:32

The Guardian reports on recent comments by the new finance minister in Japan:

Japan’s new government is barely a month old, and already one of its most senior members has insulted tens of millions of voters by suggesting that the elderly are an unnecessary drain on the country’s finances.

Taro Aso, the finance minister, said on Monday that the elderly should be allowed to “hurry up and die” to relieve pressure on the state to pay for their medical care.

“Heaven forbid if you are forced to live on when you want to die. I would wake up feeling increasingly bad knowing that [treatment] was all being paid for by the government,” he said during a meeting of the national council on social security reforms. “The problem won’t be solved unless you let them hurry up and die.”

Aso’s comments are likely to cause offence in Japan, where almost a quarter of the 128 million population is aged over 60. The proportion is forecast to rise to 40% over the next 50 years.

[. . .]

To compound the insult, he referred to elderly patients who are no longer able to feed themselves as “tube people”. The health and welfare ministry, he added, was “well aware that it costs several tens of millions of yen” a month to treat a single patient in the final stages of life.

Cost aside, caring for the elderly is a major challenge for Japan’s stretched social services. According to a report this week, the number of households receiving welfare, which include family members aged 65 or over, stood at more than 678,000, or about 40% of the total. The country is also tackling a rise in the number of people who die alone, most of whom are elderly. In 2010, 4.6 million elderly people lived alone, and the number who died at home soared 61% between 2003 and 2010, from 1,364 to 2,194, according to the bureau of social welfare and public health in Tokyo.

The government is planning to reduce welfare expenditure in its next budget, due to go into force this April, with details of the cuts expected within days.

Sadly, expect more of this kind of comment from hard-pressed governments as the baby boomers move out of work and into retirement.

January 27, 2013

Reason.tv: Two Cheers for the Coming Collapse of the U.S. Economy!

Filed under: Economics, Government, USA — Tags: , , — Nicholas @ 11:13

“At some point, holders of Treasury securities are going to recognize that these unfunded liabilities are going to affect the fiscal capabilities of the government and then you’re going to have the same situation that happened in Greece happening in the U.S.,” says Jeffrey Rogers Hummel, who is a professor of economics at San Jose State University and the author of a recent paper on the consequences of a U.S. government default. “In the short run it’s going to be painful, but in the long run it’ll be a good thing.”

Reason‘s Nick Gillespie sat down with Hummel at FreedomFest 2012 for a wide-ranging discussion on monetary policy, business cycle theory, the longevity of the welfare state, and why libertarians who rail against the Fed are like “generals fighting the last war.”

Held each July in Las Vegas, FreedomFest is attended by around 2,000 limited-government enthusiasts and libertarians a year. Reason TV spoke with over two dozen speakers and attendees.

Aaron Wherry dissects Andrew Coyne’s “grand coalition” notion

Filed under: Cancon, Government, Politics — Tags: , , , — Nicholas @ 11:03

Andrew Coyne wrote an appeal to the New Democrats, Liberals, and Greens, prodding them in the direction of a temporary political alliance to topple the Conservatives and to fundamentally change the Canadian electoral system to ensure that the Conservatives would never again form a government (actually, that’s not what he says, but I’m sure that’s how individual NDP, Liberal, and Green supporters will envision the result). In Maclean’s, Aaron Wherry points out that however appealing the coalition idea might be, the practical stumbling blocks are pretty intimidating:

Are enough voters so interested in electoral reform that they would support turning the next election into a referendum on that subject? Could enough voters be convinced to momentarily suspend their concerns about other issues? Could enough voters be convinced to ignore the other policy differences between the NDP, Liberals and Greens? Could enough voters be convinced to ignore the possible ramifications of all other policy debates between the parties to vote with the hope that a real election would then be run in short order?

I’ll try to answer those questions: No. Granted, I can’t predict the future with certainty (and have just finished arguing against making such predictions). Perhaps the New Democrats, Liberals and Greens could persuade voters to make this a singular focus. But this strikes me as implausible. I don’t think voters, in general, are so interested in electoral reform that they’d go along with this. At the very least, it seems like a remarkable gamble for the three parties to make. (And, keep in mind, the Conservatives would be keen to explain, loudly and repeatedly and prominently, why this was such a terrible idea.)

[. . .]

Fundamentally overhauling the electoral system would probably take more than a couple days. Legislation would conceivably have to be passed through the House. Legislation would conceivably have to be passed through the Senate (how would a Conservative majority in the Senate handle such legislation?).

Even if you imagine this proceeding as expeditiously as possible, this would take some period of time (A month? A few months? More?). Someone would have to be Prime Minister while this was happening. Someone would have to be governing. How would that work? Conceivably they would have no mandate beyond changing the electoral system. Would they promise to not touch anything else for as long as they were in government? Would they promise to just carry on with Conservative policy until another election could be held? (Would anyone believe them if they promised as much?) What if something bad happened? What if something came up that required government action?

This is not a rhetorical device. I’m not trying to bury the idea in questions. I honestly want to know how this would work because I honestly don’t understand how this is supposed to work. What kind of government would we have for however long it took to change the federal electoral system and what would be the ramifications of having such a government?

After all this time in power, the Conservatives are still being accused of harbouring a “secret agenda” that will destroy Canada as we know it. Handing Stephen Harper and his friends an even bigger “secret agenda” stick with which to beat the opposition doesn’t strike me as a particularly clever move at this stage of the electoral cycle.

January 25, 2013

Canada and the First Nations — separate nations, separate worlds

Filed under: Cancon, Government, Law — Tags: , , , , — Nicholas @ 13:56

In the Globe and Mail, Tom Flanagan explains why the Idle No More protestors insisted on negotiating with the Governor-General:

Actually, native leaders’ focus on the governor-general as the representative of the Crown is based not on a lack of information about the Constitution but on a different understanding of it. They know perfectly well that the prime minister and government of the day are installed by the political process of the nation of Canada, but they don’t see themselves as part of that process and that nation. They see themselves as separate nations, dealing with Canada on a “nation to nation” basis. They see the Crown as a governmental structure above Canada – and therefore the authority with whom they should deal.

Sovereign nations do not legislate for each other; they voluntarily agree to sign treaties after negotiations. The radical conclusion from this premise is that Parliament has no right to legislate for aboriginal people without first getting their consent. Hence the hue and cry about consultation and the demand to repeal those parts of the government’s Budget Implementation acts that allegedly impinge on aboriginal and treaty rights. Today’s claim is that Parliament had no right to amend the Indian Act and the Navigable Waters Protection Act before consulting with (read: getting the approval of) first nations. But the same claim could be made regarding any legislation, for all laws made by Parliament affect native people. Enforcement of the Criminal Code arguably affects aboriginal rights by putting large numbers of aboriginal people in jail, and so on.

This indigenist ideology is not new. It started to appear in the 1970s, as a reaction to Jean Chrétien’s 1969 White Paper, which proposed repealing treaties and abolishing the special legal status of Indians. In its usual well-meaning but sometimes witless way, the Canadian political class thought it could deal with the reaffirmation of indigenism through word magic. Adopt the vocabulary of the radicals. Start calling Indian bands “first nations.” Pretend to recognize their “inherent right of self-government” or even “sovereignty.”

January 24, 2013

Sun TV’s about-face on “making us all pay for it”

Filed under: Business, Cancon, Government, Media — Tags: , , , , , — Nicholas @ 09:12

Andrew Coyne makes some good points about Sun TV’s hypocrisy, he could have made a stronger case for getting the CRTC entirely out of the business of deciding what Canadians can watch on TV:

When the Sun News Network first loomed on the national horizon two years ago, before it had even begun broadcasting, sections of the Canadian left reacted as they do to most things: with hysterics.

A petition was launched — from the United States, as it happens — demanding the CRTC deny Sun the licence it sought, claiming “Prime Minister Harper is trying to push American-style hate media onto our airwaves, and make us all pay for it.”

[. . .]

Well, that was then: much has happened since. Teneycke lost his job, briefly, after questions were raised about how the bogus signatures found their way onto the petition. The network has mostly avoided peddling hate, unless you count that business about the Roma. And, less than two years since its launch, Sun is back before the CRTC, asking to be put on basic cable.

Well, asking is not quite the word. The network, never shy about self-promotion, seems almost an infomercial for itself these days. Network personalities have been drafted to explain the urgent public necessity of making Sun mandatory carriage, that is of taxing everyone with cable or satellite service. Viewers are directed to a website, where they can send an email to the CRTC in support of its application.

[. . .]

But if fairness is what we’re after, there’s another way to go about it. Rather than give every channel an equal chance to stick their hands in the public’s pockets — to force viewers to pay for channels they would not pay for willingly — it is to grant that privilege to no one: to leave viewers free to decide whether or not to subscribe to each channel, on its own merits. And yes, in case anyone’s wondering, that includes the CBC. (Notwithstanding the princely $500 a pop the corporation pays me to bloviate on At Issue, I have been rash enough to argue, publicly and often, for defunding the CBC.)

For goodness sake, it is 2013. The circumstances that might once have justified such regulatory micro-managing, in the days when there were only three channels and barely room for more on the dial, are long gone. Then, a new or special-interest channel might have made the case for market failure: since it was impossible for viewers to pay for channels directly, there was a built-in bias to the biggest audience, and the programming that tailored to it.

January 22, 2013

British army facing next wave of cuts

Filed under: Britain, Government, Military — Tags: , — Nicholas @ 10:14

The British army has to reduce down to a slim 82,000 troops by 2015, and the cuts coming down later this year are part of the 2010 Strategic Defence and Security Review (SDSR):

Up to 50 brigadiers and other senior officers are expected to be axed as part of a sweeping round of army redundancies that will result in up to 5,300 troops leaving the forces over the next year.

In what is thought to be the biggest tranche of redundancies faced by the army since the early 1990s, infantry battalions are likely to be worst hit as the military reorganises itself for the post-Afghanistan era.

Special forces units will be spared any losses, but officials made clear that this round of job cuts would take “a large slice out of the army in one go”.

Separately, the Ministry of Defence (MoD) also admitted more medical staff from the army, Royal Navy and RAF staff were likely to face redundancy later this year.

Some of the details from the SDSR were discussed in 2010. I also posted that I suspected SDSR actually stood for “Slashing Damage to Strategic Resources“

January 21, 2013

Reason.tv: It’s not what he said, but how he said it

Filed under: Government, Politics, USA — Tags: , — Nicholas @ 08:50

“And those of us who manage the public’s dollars will be held to account, to spend wisely, reform bad habits, and do our business in the light of day, because only then can we restore the vital trust between a people and their government.”

Reason TV looks back at Obama’s 2009 inaugural address to see how well his rhetoric compares to his first four years in office.

Produced by Meredith Bragg.

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