Quotulatiousness

September 28, 2012

Defending the welfare state … badly

Filed under: Bureaucracy, Europe, Government — Tags: , , , , — Nicholas @ 08:27

At sp!ked, David Clements reviews a new book by Asbjorn Wahl which inadvertently exposes some of the very real problems of the modern welfare state in the process of praising and defending it:

Asbjorn Wahl is a trade unionist, director of the Campaign for the Welfare State and Norwegian. While you shouldn’t judge a book by the biog of its author, far less his nationality, it is fair to say that when I opened his new book, The Rise and Fall of the Welfare State, I wasn’t expecting much.

He begins, as all defenders of the welfare state must, with a bleak account of the public; that is, of the welfare state’s helpless, vulnerable clients and potential clients. There is a ‘feeling of powerlessness and apathy among people’, says Wahl, a feeling of ‘tragic stories’ too numerous to mention. As well as discovering an ‘unexpectedly large number… of victims of workfare’, he finds other people suffering ‘bad health and ever-more demanding work’. He tells us ‘stories of people who struggle with their health, then their self-confidence and their self-image’. As I heard a man on a picket line tell a Sky News reporter recently, everyone is ‘sick and tired of being sick and tired’.

[. . .]

Wahl is critical of both the anti-democratic tendencies of the European Union and the imposition of the ‘economic straitjacket’ resulting from the attack on living standards in the Eurozone periphery countries. But his call for the ‘stimulation of the economy, investment in infrastructure and in productive activities’ can hardly be taken seriously given his doubts about the benefits of economic growth. While attempts by Europe’s governments to counter the financial crisis, and in so doing to create public debt crises, have, as Wahl says, been ‘exploited as an excuse to make massive, intensified attacks on the welfare state’, this does not in itself invalidate the attack. His view that capitalist excess is responsible for all of Europe’s ills is also his blind spot when it comes to seeing the damage done by an increasingly therapeutic welfarism. In truth, the welfare problem is not something dreamt up by neoliberals (whoever they are). Rather, it is symptomatic of a political culture that robs people of their agency, something that you might expect somebody like Wahl to be opposed to. Far from it. ‘Good social security’, he says, ‘gives people that much-needed self-confidence boost that enables them to become active players in society’.

As this back-to-front and patronising rationale makes clear, today’s welfare state infantilises people. It tells them that they are too damaged to function without its official hand-holding and belittling interventions. Any ‘progressive’ movement would surely endorse the contrary view that people should be treated as morally independent beings, responsible for their own actions? But to say as much is to invite the charge that you are horribly right wing and endorse ‘welfare-to-work’ policies (which, incidentally, sound rather more like the unforgiving and austere welfare state envisioned by its founders than that proposed by its supposed critics).

September 26, 2012

Shakespeare’s Henry V: public choice theory in the 15th century

Filed under: Economics, Government, History, Media — Tags: , , , , — Nicholas @ 09:37

In The Freeman, Sarah Skwire points out that the opening act of Shakespeare’s Henry V — while boring to those hoping for battle and carnage — explains the public choice economic theory of rent-seeking:

Shakespeare’s Henry V — a favorite of theater companies and movie studios — begins with an invocation of the muse of fire, presumably because only her powerful heat and light can provide the inspiration necessary for Shakespeare’s great task of bringing forth so “great an object” on “this unworthy scaffold.” The prologue promises, after all, that we are about to see the armies of two great monarchies clash at the famous battle of Agincourt. A plea for divine aid seems only reasonable.

After all that buildup, however, the opening scene of the play has to be one of the dullest stretches in all of Shakespeare’s writing. Promised a ferocious battle with knights and horses and blood and thunder, we are given instead more than one hundred straight lines of a highly technical legal discussion between the Bishop of Canterbury and the Bishop of Ely. It is historically accurate. It is important. And it is exceptionally tedious.

It is tedious, that is, unless you are familiar with one basic piece of Public Choice theory.

Gain without Mutual Benefit

One its core concepts is the idea of rent-seeking. Unlike profit-seeking, which aims at mutually beneficial trade, rent-seeking is the attempt to use the political process to capture a bigger slice of wealth for oneself. Unlike trade, there is no mutual benefit. No wealth is created. The only profit is to the rent-seeker, and possibly his cronies. With that in mind, the opening scene of Henry V is gripping. It is no longer more than one hundred lines of fifteenth-century legal trivia. It is more than one hundred lines of some of the most explicit, uncensored, behind-the-scenes rent-seeking action in literary history.

September 24, 2012

One thing the Occupy movement was absolutely right about: crony capitalism

Filed under: Business, Government, Politics — Tags: , , , — Nicholas @ 12:29

In the Calgary Herald, Mike Milke says that the Occupy protest movement was spot-on in their criticism of crony capitalism:

With the recent first anniversary of Occupy Wall Street, consider one beef from protesters that was legitimate: crony capitalism.

In general, Occupy Wall Street types could be described as a little too naive about the downside of more government power, and too critical of people who exchange goods and services in markets.

But insofar as any protester was annoyed with politicians who like to subsidize specific businesses — corporate welfare in other words, and which is an accurate example of abused capitalism — hand me a protest sign and give me a tent.

When taxpayer dollars are given or “loaned” (wink, wink, nod, nod) to specific businesses, such taxpayer-financed subsidies are not cheap.

According to the OECD, in 2008, at least $48 billion was proposed for automotive companies alone. Annually, global taxpayer subsidies to the energy industry clock in at more than $100 billion. And in Canada, between 1994 and 2007, governments spent $202 billion on all types of subsidies to multiple corporations in all sorts of industries.

September 21, 2012

California’s “wall of debt” actually a very high cliff of debt

Filed under: Economics, Government, USA — Tags: , , — Nicholas @ 09:21

Mary Williams Walsh on the so-much-worse than estimated debt of California:

Gov. Jerry Brown of California announced when he came into office last year that he had found an alarming $28 billion “wall of debt” looming over the state, which had to be dismantled.

Since then, he has slowed the issuance of municipal bonds, called for spending cuts and tried to persuade the state’s famously antitax voters to approve a tax increase this fall.

On Thursday, an independent group of fiscal experts said Mr. Brown’s efforts were all well and good, but in fact, the “wall of debt” was several times as big as the governor thought.

[. . .]

The task force estimated that the burden of debt totaled at least $167 billion and as much as $335 billion. Its members warned that the off-the-books debts tended to grow over time, so that even if Mr. Brown should succeed in pushing through his tax increase, gaining an additional $50 billion over the next seven years, the wall of debt would still be there, casting its shadow over the state.

September 19, 2012

Pakistan’s predicament

Filed under: Asia, Government, India, USA — Tags: , — Nicholas @ 07:58

Strategy Page outlines the nasty situation the Pakistani government finds itself in:

The Pakistani government has asked the U.S. government to stop publically demanding that Pakistan take action against the terrorist sanctuary in North Waziristan. Such public demands make it more difficult for Pakistan to act as such an operation would be jumped on by the Pakistani media as Pakistan taking orders from the United States. This is a deadly accusation in Pakistan, where decades of government enthusiasm for Islamic radicalism and hatred of the United States has made it impossible for a Pakistani government to have cordial relations with America. The way the local culture works in Pakistan, this attitude means America can be blamed for just about every problem in Pakistan. That would include the persistent poverty, corruption, bad government and constant threat of another military coup. Pakistan means, literally, “Land of the Pure” and that means it’s easy for Pakistanis to believe that their problems must be caused by some external force. The United States and India have been tagged as the cause of Pakistan’s problems for so long that it’s simply not acceptable for any Pakistani politician or media outlet to describe the source of Pakistan’s problems any differently. Actually, there are a growing number of politicians and media outlets who are questioning the traditional attitudes towards the U.S., India and the personal responsibility of Pakistanis. Alas, such heretical opinions can still get you killed and many such Pakistanis emigrate or keep silent. In Pakistan, politics is very much a contact sport.

[. . .]

Pakistan has actually been sponsoring terrorist groups for decades but has so far managed to avoid admitting it. Those efforts are failing now that the U.S. and India have been pressing Pakistan more energetically to shut down terrorist operations in its territory. The recent U.S. designation of the Haqqani Network (based in North Waziristan and long under the not-so-subtle protection of the Pakistani military) as an international terrorist organization has annoyed Pakistan a great deal. For decades, it’s been no secret in Pakistan that Haqqani has government sponsorship. But the official position of the Pakistani government was that Haqqani either didn’t exist or had no government recognition or support. The U.S. presented compelling evidence to the contrary, which was another way of calling several decades’ worth of Pakistani officials liars. This designation means the Americans will now prosecute government and non-government organizations working with Haqqani. The Pakistani government knows this means specific individuals and organizations within the Pakistani government as well as banks and other commercial organizations. The U.S. prosecutors have proved to be quite relentless since September 11, 2001 and the Pakistani nightmare is retired military and intelligence officials being arrested while vising Europe or the Americas. Suddenly, the world is a more dangerous place for many Pakistani officials and businessmen who worked with Haqqani over the years. Likewise, India won’t let up on pressuring Pakistan to shut down Islamic terror groups based in Pakistan that are continuing to support Islamic terrorism in India. Pakistan has officially shut down 43 terror groups (all but two of them since September 11, 2001), and that includes 14 so far this year. But the U.S. and India point out that most of these groups simply disband and reform under another name and continue to be left alone by the Pakistani government.

September 17, 2012

The real defence debate (that isn’t happening in the election campaign)

Filed under: Government, Military, USA — Tags: , , , , — Nicholas @ 14:00

Scott Rasmussen outlines the stark contrast between how ordinary Americans feel about their country’s defence establishment and how the politicians they elect fail to reflect those feelings:

As a starting point, Americans are proud of their country and hold its armed forces in high regard. Seventy-nine percent would rather live here than anywhere else, and at a time of deep cynicism about large institutions 81 percent have a favorable opinion of the U.S. military.

Yet this respect and admiration for the troops co-exists with doubts about the jobs they’ve been asked to do. Most voters now believe it was a mistake for the U.S. to have gotten involved in Iraq, and most now want to see troops brought home quickly from Afghanistan. Support for the military action in Libya peaked at 20 percent.

Americans are also in a mood to dramatically reduce our security guarantees for other nations. Less than half (49 percent) believe the U.S. should remain in its bedrock military alliance, NATO. Out of 54 countries with which Washington has signed mutual-defense treaty obligations, plus two others (Israel and Mexico) that receive our implicit backing, a majority of Americans supports defending just 12. Countries that don’t reach the 50 percent threshold include our oldest ally, France, along with Japan, Poland, and Denmark. The only four countries that 60 percent of Americans are willing to defend are Canada, the United Kingdom, Australia, and Israel.

These findings highlight the central 21st-century gap between the citizenry and its political class. Three out of four Americans believe U.S. troops should never be deployed for military action overseas unless vital national security interests are at stake. Yet the last several presidents have adopted far less restrictive criteria for sending troops abroad. The military is often dispatched for humanitarian purposes or in the belief that the U.S. should police the world, but only 11 percent of voters believe Uncle Sam should play global cop.

Harming the poorest during a food price hike

Filed under: Economics, Food, Government — Tags: , , — Nicholas @ 13:54

The Economist on the least effective ways of dealing with rising food prices:

Although the weather is the proximate cause of the price rises, governments are making matters worse. Look at America’s biofuels policy. By ensuring that a third of the country’s maize is turned into ethanol and fed to cars, it has driven up grain prices and made them more volatile by reducing stocks. At the start of this year America scrapped the subsidy for ethanol, and abolished the tariff on imports of the stuff — steps in the right direction. But a certain amount of ethanol still has to be blended with petrol by law. That keeps prices high.

Bad policies in America are encouraging bad policies elsewhere. Higher prices have spooked importing and exporting countries alike, causing them to turn away from volatile world markets and seek to insulate themselves. Between 2007 and 2011, 33 countries imposed export restrictions on food. Agriculture accounts for less than 10% of world trade, but more than two-thirds of the cost of all border distortions.

[. . .]

Farm protection is like a weed: it grows everywhere and seems impossible to eradicate. This newspaper has been making the case against it since 1843, when we were founded to oppose Britain’s protectionist Corn Laws. Sadly we seem to have made too little progress. At the moment governments are making farming less efficient than it should be. They are increasing poverty. Their policies are otiose, since there are better ways to help the poor, such as direct cash transfers. And they are counterproductive, because they exacerbate the problems they seek to solve.

September 15, 2012

Gary Johnson on why both Obama and Romney are wrong on foreign policy

Filed under: Government, Military, USA — Tags: , , , , , — Nicholas @ 12:08

Gary Johnson, the Libertarian Party presidential candidate, says both Barack Obama and Mitt Romney have it wrong with their respective approaches to foreign policy:

Foreign policy is supposed to make us safer, not get Americans killed and bankrupt us. Yet, even as we mourn the loss of four Americans in Libya and watch the Middle East ignite with anti-American fervor, our leaders don’t get it.

In one corner, we have the U.S. apologists warning that — after the murders in Libya and the attack on our embassy in Cairo — we must be careful not to say or do anything that might hurt someone’s feelings. In the other corner, we have the chest-thumpers demanding that we find somebody to shoot — and shoot them.

I have a better idea: Stop trying to manipulate and manage history on the other side of the globe and then being shocked when things don’t turn out the way we wanted. As far as what we do right now in response to the tragic events of this week, it’s actually pretty simple. Get our folks out of places they don’t need to be — and out of harm’s way — and cut off every dime of U.S. tax dollars we are sending to clearly ungrateful regimes.

The amazing time-travel effects of sequestration

Filed under: Government, Media, USA — Tags: — Nicholas @ 11:35

Nick Gillespie tells us to expect a lot more stories attributing current troubles to future spending cuts:

Now that the White House has released its massive sequestration report detailing the $1.2 trillion in possible cuts to future spending over the next 10 years, expect to read more headlines like the following from Buzzfeed:

You got that implication, kemo sabe?

Possible future trims in spending have something to do with what’s going in the Middle East right now. Not that embassies are under attack now because of American foreign policy or world events or rotten security or whatever. Or that we can’t defend our citizens and diplomatic corps right now despite record-high levels of spending on defense and military operations for most of the 21st century.

No, the real bad news is coming if and when the United States stops its 12-year long spending spree that has all but killed any chance of recovery and piled on the debt like Dagwood Bumstead loading cold cuts onto a sandwich roll.

[. . .]

This much is true: The planned cuts are across-the-board to particular programs including everything from defense to Medicare to education to you name it (that was the point, to share the costs).

And this much is complete bullshit: “sequestration would be deeply destructive to national security, domestic investments and core government functions.”

In fact, the cuts for 2013 amount to maybe a whopping $120 billion in an annual budget that is likely to run about $3.8 trillion. Out of the $120 billion, about $50 billion will come out of military budget that will be well north of $650 billion, including war funding.

September 14, 2012

Colby Cosh on Peter Lougheed

Filed under: Cancon, Government, History — Tags: , , — Nicholas @ 10:30

An appreciation of the late Peter Lougheed at Maclean’s:

The leadership of the federal Progressive Conservatives was Peter Lougheed’s for the asking from about 1973 onwards. Bob Stanfield approached him almost immediately after his 1974 election defeat, and Joe Clark, who had started political life as a gopher for Lougheed’s election team, made sure to get his all-clear before launching his own campaign. Later, after Clark’s vote-counting powers failed him in 1983, Lougheed was drafted again. That time, he thought about it a little longer. He concluded — and notice how little self-delusion the man exhibited, compared to many who came after him — that his lack of French was a dealbreaker. Even a man who had once been well-organized enough to combine professional football with law school was unlikely to be able to remedy that in his fifties.

In truth, he could sincerely see no more satisfying use of his abilities than to be Premier of Alberta. That probably still sounds ridiculous to some. It sounded half-crazy to everybody, when Lougheed was a young man. But his political comrades remember him talking about it when he was still nothing but a bundle of ambition — before he had even decided what the particular vehicle for his political ascendancy was going to be.

Look at our constitution, he would tell them. Who has more power, more specific ability, to guard and improve the welfare of the people — a prime minister, or a premier? Forget which job comes with more glory. Who can do the most good? Very well, a prime minister makes treaties and commands armies. But the premier of a province must decide on the wise use of natural resources; he must set policy for schools, and hospitals, and the care of the aged. One does not sense that Lougheed made this argument out of any particular abundance of saintliness. The less glamorous job just seemed more interesting as a business proposition, more gratifying as a way to pass the time.

September 8, 2012

QotD: The European Project

Filed under: Bureaucracy, Europe, Government, Quotations — Tags: , , , , , , — Nicholas @ 10:22

Like all people with bad habits, politicians and bureaucrats are infinitely inventive when it comes to rationalizing the European Project, though they’re inventive in nothing else. Without the Union, they say, there would be no peace; when it’s pointed out that the Union is the consequence of peace, not its cause, they say that no small country can survive on its own. When it is pointed out that Singapore, Switzerland, and Norway seem to have no difficulties in that regard, they say that pan-European regulations create economies of scale that promote productive efficiency. When it is pointed out that European productivity lags behind the rest of the world’s, they say that European social protections are more generous than anywhere else. If it is then noted that long-term unemployment rates in Europe are higher than elsewhere, another apology follows. The fact is that for European politicians and bureaucrats, the European Project is like God — good by definition, which means that they have subsequently to work out a theodicy to explain, or explain away, its manifest and manifold deficiencies.

[. . .]

The personal interests of European politicians and bureaucrats, with their grossly inflated, tax-free salaries, are perfectly obvious. For politicians who have fallen out of favor at home, or grown bored with the political process, Brussels acts as a vast and luxurious retirement home, with the additional gratification of the retention of power. The name of a man such as European Council president Herman Van Rompuy, whose charisma makes Hillary Clinton look like Mata Hari, would, without the existence of the European Union, have reached most of the continent’s newspapers only if he had paid for a classified advertisement in them. Instead of which, he bestrides the European stage if not like a colossus exactly, at least like the spread of fungus on a damp wall.

Corporate interests, ever anxious to suppress competition, approve of European Union regulations because they render next to impossible the entry of competitors into any market in which they already enjoy a dominant position, while also allowing them to extend their domination into new markets. That is why the CAC40 of today (the index of the largest 40 companies on the French stock exchange) will have more or less the same names 100 years hence.

More interestingly, perhaps, Hannan explains the European Union’s corruption of so-called civil society. Suppose you have an association for the protection of hedgehogs because you love hedgehogs. The European Union then offers your association money to expand its activities, which of course it accepts. The Union then proposes a measure allegedly for the protection of hedgehogs, but actually intended to promote a large agrarian or industrial interest over a small one, first asking the association’s opinion about the proposed measure. Naturally, your association supports the Union because it has become dependent on the Union’s subsidy. The Union then claims that it enjoys the support of those who want to protect hedgehogs. The best description of this process is fascist corporatism, which so far (and it is of course a crucial difference) lacks the paramilitary and repressive paraphernalia of real fascism.

Theodore Dalrymple, “Rejecting the European Project”, City Journal, 2012-09-07

September 7, 2012

“When I discover something surprising in data, the most common explanation is that I made a mistake.”

Filed under: Business, Economics, Government, Media — Tags: , , , — Nicholas @ 08:20

John Kay suggests you always ask how a statistic was created before you consider what the presenter wants you to think:

Always ask yourself the question: “where does that data come from?”. “Long distance rail travel in Britain is expected to increase by 96 per cent by 2043.” Note how the passive voice “is expected” avoids personal responsibility for this statement. Who expects this? And what is the basis of their expectation? For all I know, we might be using flying platforms in 2043, or be stranded at home by oil shortages: where did the authors of the prediction acquire their insight?

“On average, men think about sex every seven seconds.” How did the researchers find this out? Did they ask men how often they thought about sex, or when they last thought about sex (3½ seconds ago, on average)? Did they give their subjects a buzzer to press every time they thought about sex? How did they confirm the validity of the responses? Is it possible that someone just made this statement up, and that it has been repeated frequently and without attribution ever since? Many of the numbers I hear at business conferences have that provenance.

[. . .]

Be careful of data defined by reference to other documents that you are expected not to have read. “These accounts have been compiled in accordance with generally accepted accounting principles”, or “these estimates are prepared in line with guidance given by HM Treasury and the Department of Transport”. Such statements are intended to give a false impression of authoritative endorsement. A data set compiled by a national statistics organisation or a respected international institution such as the Organisation for Economic Co-operation and Development or Eurostat will have been compiled conscientiously. That does not, however, imply that the numbers mean what the person using them thinks or asserts they mean.

September 4, 2012

Want to ensure that your shipment is opened and fully inspected at least once?

Filed under: Government, Humour, Liberty, USA — Tags: — Nicholas @ 09:01

If you’re not happy unless your package has been thoroughly inspected by trained professionals on its way to the destination, you’ll want to stock up on this new item available from the Electronic Frontier Foundation:

September 2, 2012

Institutionalizing income inequality

Filed under: Business, Cancon, Government — Tags: , — Nicholas @ 11:07

At the Worthwhile Canadian Initiative blog, Frances Woolley explains how a couple of data points will work to “bake in” income inequality:

If these are the rules used to determine wages, income inequality will prevail.

It’s impossible for all firms to pay their CEOs above the median salary — by definition, half of executives must be paid below the median. If the majority of firms adopt a compensation policy like the Bell Canada Enterprises one quoted above, CEO salaries will increase inexorably.

At the same time, allowing firms to bring in temporary workers at less than the prevailing market wage prevents the price of labour from being bid up in response to labour shortages, dampening salary growth for workers at the lower wage end of the labour market.

Inequality rules.

Margaret Thatcher and the British intelligence organizations

Filed under: Britain, Government — Tags: , , , , — Nicholas @ 00:01

An interesting post at the official website for Prime Minister David Cameron talks about former Prime Minister Margaret Thatcher and her relationship with the Joint Intelligence Committee during her time in office:

Soon after taking office a new Prime Minister receives special briefings from the Cabinet Secretary. One is on the ‘letters of last resort’, which give instructions to the commander of the British submarine on patrol with the nuclear deterrent, in the event of an attack that destroys the Government. Another briefing outlines the structure and control of the intelligence machinery, including the Joint Intelligence Committee (JIC) in the Cabinet Office. Sir John Hunt, the Cabinet Secretary in 1979, briefed Margaret Thatcher on the intelligence structure, including counter-subversion activities, the day after her election victory of 3 May.

Thatcher had started a programme of visits to Government departments to see first-hand what some of the 732,000 officials inherited from James Callaghan’s administration actually did. In September, during a routine briefing by Brian Tovey, the Director of GCHQ, Thatcher showed great interest in the way in which intelligence was collated and assessed by the JIC, stressing that assessment should be free from policy (or political) considerations. She also expressed a wish to attend a JIC meeting. It would be the first time a Prime Minister had attended the JIC since its creation in 1936.

It fell to Sir John Hunt, a former Secretary of the JIC, to make the arrangements, but there were complications. First, the JIC Chairman, Sir Antony Duff of the Foreign and Commonwealth Office (FCO), had also been made Deputy Governor of Southern Rhodesia (now Zimbabwe) after the British Government assumed direct rule of the rebellious colony. He was a key participant in the Lancaster House Conference, aiming finally to settle the Rhodesian problem, and could not be sure to attend the JIC until after its conclusion. Second, the JIC normally met on Thursday mornings in 70 Whitehall, which was also when the Cabinet met in 10 Downing Street, so a special JIC meeting would need to be arranged.

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