Quotulatiousness

July 4, 2012

British banks are “a cossetted, subsidised industry with captive consumers”

Filed under: Britain, Economics, Government — Tags: , , , — Nicholas @ 08:46

If any industry has more than its fair share of “too big to fail” wards of the state, it’s the banking sector. Allister Heath in the Telegraph:

There is a horrendous problem, certainly, and urgent reform is required. But the ailment has been fundamentally misdiagnosed: banking has become a ward of the state, a cossetted, subsidised industry with captive consumers, and it is that which has crippled it. We have been there before, in other sectors, and the medicine is always the same. This may come as a shock, but we need more capitalism in banking, not less.

Banks need to be allowed to go bust, like every other private company. It was a disgrace that taxpayers were called upon to bail out some of the City’s grandest names. This must never happen again. The reason capitalism works so well, whenever it is tried properly, is that the principle at its heart — profit and loss — is the toughest of disciplines and the best of motivators. It is more ruthless than anything regulators, however clever, could ever dream up. It allows two conflicting emotions, greed and fear, to balance one another out. Shareholders, creditors and bosses want to make money — but they know that a step too far might entail ruin.

That, at least, is how it works for much of UK Plc — but no longer in banking, where profits have been privatised and losses nationalised. It is an obscene perversion of capitalism. Forget the nonsense about “light touch” regulation: the problem is that the fear of failure ceased to exist. Market discipline was replaced by extreme laxity.

There was no longer much need for prudence, proper capital buffers or strict internal controls: the taxpayer was ready to pick up the bill if anything went wrong, while incompetent regulators signed everything off. The Labour government which introduced this mad system wasn’t deliberately seeking to subsidise risk: it merely made a terrible mistake, though with the politically useful side effect of reducing the cost of credit and increasing its availability. The real blunder was that the Financial Services Authority had no plan to cope with a bank going bust. It simply assumed failure would never happen. After all, how could it? Gordon Brown had abolished booms and busts.

US military pay has more than kept up with civilian payscales

Filed under: Economics, Government, Military — Tags: — Nicholas @ 00:07

Mike Riggs has the details:

In other words, it’s not *just* teachers, cops, firefighters, and the bulk of civil federal employees who are riding high on the hog. Tom Philpott at Military.com reports:

    As private sector salaries flattened over the last decade, military pay climbed steadily, enough so that by 2009 pay and allowances for enlisted members exceeded the pay of 90 percent of private sector workers of similar age and education level.

    That’s one of the more significant findings of the 11th Quadrennial Review of Military Compensation report released last week, given its potential to impact compensation decisions by the Department of Defense and Congress as they struggle to control military personnel costs.

Unlike previous generations, for whom military pay was almost a joke compared to civilian payroll, modern western military pay has been catching up to (or even exceeding) equivalent civilian jobs. When I joined the reserves in the mid-1970’s, the pay was actually quite good: better than minimum wage — the drawback was that the Canadian Forces’ budget was so tight that we were strictly limited to the number of paid training days. While that was a drawback for enlisted troops, it was worse for our senior NCOs and officers: they were working without pay for months at a time.

July 3, 2012

Ontario government considering “streamlining” universities, reducing from four-year to three-year degree programs

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

I rarely find anything interesting in Heather Mallick’s Toronto Star writings, but her Sunday article on possible Ontario government changes to the university system raises some valid concerns:

The Ontario government has run a hasty educational reform plan up a flagpole and is hoping you’ll salute it. Don’t.

The discussion paper, titled “Strengthening Ontario’s Centres of Creativity, Innovation and Knowledge,” is as mystifying as the gentlewomen’s pompous, verbose porn novel Fifty Shades of Grey, which reads to me as if it were written by a small weird girl-child, or perhaps Conrad Black.

Without Star education reporter Kristin Rushowy to translate the jargon — which curses the education sector more than any other — I would not have known that basically the McGuinty government wants to cut four-year university degrees to three and “support flexible degree structures that provide new learning options made possible by advancements in technology,” which means online degrees.

[. . .]

This report heralds bad things for Ontario students.

I opposed ending Grade 13 and was proved right, universities frantically offering catch-up courses for students who couldn’t spell or add. I opposed the “30% Off Ontario Tuition Grant for students from middle-income families” that the report boasts of, because the $160,000 cut-off is far too high. I opposed turning colleges into universities because a diploma is just as valuable as a degree, but they are not interchangeable.

And I oppose cutting degrees to three years, not just because other provinces and countries won’t accept this, but because fourth year is when you come into your own intellectually. The report refers repeatedly to the unfortunately titled Bologna Declaration aimed at harmonizing EU higher education — trans. “Yurp does it so we can too” — although I note that there has been talk in Britain of “accelerated” two-year degrees, at which point I despair.

H/T to the Phantom Observer for the link, who twittered:

https://twitter.com/PhantomObserver/statuses/220178327166648321

July 2, 2012

Alex Tabarrok on the slow rail and infrastructure bottleneck

Filed under: Bureaucracy, Economics, Government, Railways, USA — Tags: , , , , , , — Nicholas @ 10:58

Writing at Marginal Revolution, Alex Tabarrok wonders “Why haven’t the $500 bills been picked up?”:

High speed rail, especially California’s project, looks to me to be monorail economics, a costly boondoggle whose appeal lies not in rational calculation […] but in the desire of some politicians (and voters) to feel visionary and sexy. In theory, CA HSR might work but the inevitable reviews, delays, lawsuits and special interest payoffs make the prospects of a beneficial project look dim, demosclerosis kills.

Slow speed rail, however, i.e. freight transport, isn’t sexy but Warren Buffett is investing in rail and maybe we should as well. In particular, there are basic infrastructure projects with potentially high payoffs. Congestion in Chicago, for example, is so bad that freight passing through Chicago often slows down to less than the pace of an electric wheel chair. Improvements are sometimes as simple as replacing 19th century technology with 20th century (not even 21st century!) technology. Even today, for example:

    …engineers at some points have to get out of their cabins, walk the length of the train back to the switch — a mile or more — operate the switch, and then trudge back to their place at the head of the train before setting out again.

In a useful article Phillip Longman points out that there are choke points on the Eastern Seaboard which severely reduce the potential for rail:

    …railroads can capture only 2 percent of the container traffic traveling up and down the eastern seaboard because of obscure choke points, such as the Howard Street Tunnel in downtown Baltimore. The tunnel is too small to allow double-stack container trains through, and so antiquated it’s been listed on the National Register of Historic Places since 1973. When it shut down in 2001 due to a fire, trains had to divert as far as Cincinnati to get around it. Owner CSX has big plans for capturing more truck traffic from I-95, and for creating room for more passenger trains as well, but can’t do any of this until it finds the financing to fix or bypass this tunnel and make other infrastructure improvements down the line.

Hoist a craft-brewed beer to thank Jimmy Carter for saving America’s brewing tradition

Filed under: Business, Government, History, USA — Tags: , , , , — Nicholas @ 10:35

Jimmy Carter will have to go a long time before his reputation recovers from his four years in office, but along with beginning to deregulate the air travel, freight railroad, and trucking industries, he also deserves credit for triggering the revival of the American craft brewing tradition. This is from an article in The New Republic, published in 2010:

If you’re a fan of craft beer and microbreweries as opposed to say Bud Light or Coors, you should say a little thank you to Jimmy Carter. Carter could very well be the hero of International Beer Day.

To make a long story short, prohibition led to the dismantling of many small breweries around the nation. When prohibition was lifted, government tightly regulated the market, and small scale producers were essentially shut out of the beer market altogether. Regulations imposed at the time greatly benefited the large beer makers. In 1979, Carter deregulated the beer industry, opening back up to craft brewers. As the chart below illustrates, this had a really amazing effect on the beer industry:

H/T to The Whited Sepulchre for the link.

Here’s what to expect to pay in Obamacare penalty tax

Filed under: Government, Health, USA — Tags: , , , — Nicholas @ 10:10

There are no easy answers in figuring out in advance exactly what taxes will apply to any given person, but Henry Blodget at Business Insider outlines what to expect in general terms:

  • The penalty/tax will be phased in from 2014 to 2016.
  • The minimum penalty/tax in 2016 will be $695 per person and up to 3-times that per family. After 2016, these amounts will increase at the rate of inflation.
  • The minimum penalty/tax per person will start at $95 in 2014 (and then increase through 2016)
  • No family will ever pay more than 3X the per-person penalty, regardless of how many people are in the family.
  • The $695 per-person penalty is only for those who make between $9,500 and ~$37,000 per year. If you make less than ~$9.500, you’re exempt. If you make more than ~$37,000, your penalty is calculated by the following formula…
  • The penalty is 2.5% of any household income above the level at which you are required to file a tax return. That level is currently $9,500 per person and $19,000 per couple. The penalty on any income above that is 2.5%. So the penalty can get expensive quickly if you make a lot of money.
  • However, the penalty can never be more than the cost of a “Bronze” heath insurance plan purchased through one of the state “exchanges” that will be created as part of Obamacare. The CBO estimates that these policies will cost $4,500-$5,000 per person and $12,000-$12,500 per family in 2016, with the costs rising thereafter.

Update: In spite of all the agonized wailing from the Republicans (especially the Tea Party folks), Steve Chapman is determined to find the limited government silver lining in the Obamacare decision:

While it was upholding the mandate, the court was striking down an equally important part of the law: the requirement that states greatly expand Medicaid coverage, at a cost of about $1 trillion between 2014 and 2022. The administration sought to force states to go along by threatening to take away all their Medicaid funds — not just those provided for the expansion. But Roberts and Co. said no.

Does it matter? You bet. It’s the first time the court has ever said Washington went too far in the conditions it places on money sent to state governments. The ruling will give states more latitude to make their own decisions in all sorts of areas.

The case also registered a victory for the notion that judges should apply the Constitution in an impartial way rather than simply impose their policy preferences. George Washington University law professor Orin Kerr, writing on the conservative-libertarian blog The Volokh Conspiracy, said the overall decision was “a largely conservative opinion that just happens to get to a liberal result.”

Equally significant is that it took a worse health care option off the table. The irony of the challenge is that if Obamacare had been struck down, supporters of universal health coverage would have been left with no good option but a “single-payer” system, also known as “Medicare for all” — which is undoubtedly constitutional.

Whatever the flaws of Obamacare, it at least builds on the existing system of private insurance. Vermont’s self-proclaimed socialist senator, Bernie Sanders, used the court’s decision to renew his call for a single-payer system. But for him, the verdict was the worst thing that could have happened.

For anyone even slightly open to evidence, letting Obamacare take effect will provide an illuminating experiment in how to afford the miracles of the American medical system to more people, including many in dire need. It may be a failure, or it may be a success. But it will not be uninformative.

Meet the new boss … of Mexico

Filed under: Americas, Government, Politics — Tags: , — Nicholas @ 09:47

After more than a decade in opposition, Mexico’s equivalent of the Natural Governing Party* has returned to power:

Mexico’s old rulers claimed victory in a presidential election on Sunday, ending 12 years in opposition after a campaign dominated by a sputtering economy and rampant drug violence.

After pledging to restore order and ramp up economic growth, Enrique Pena Nieto of the Institutional Revolutionary Party (PRI) had a clear lead over his rivals in exit polls and a “quick count” conducted by electoral authorities.

Although his main rival said it was too early to concede defeat, the 45-year-old Pena Nieto delivered a late-night victory speech to cheering supporters, and a senior electoral official said the PRI candidate’s lead was “irreversible”.

“Mexicans have given our party another chance. We are going to honor it with results,” a visibly moved Pena Nieto told followers packed inside the PRI headquarters in Mexico City.

* For non-Canadians, the joke about the “Natural Governing Party” is that the Liberal Party of Canada had been effectively the permanent government in Canada for most of the 20th century, with only a few isolated interruptions by the Progressive Conservatives (aka the Forward-Backward party).

Update: The Economist has more:

The return of the PRI is not welcomed by everyone. The party ran Mexico for seven uninterrupted decades until it was ousted from the presidency in 2000. Back then few expected that the “perfect dictatorship”, as the PRI regime was dubbed by the Peruvian novelist Mario Vargas Llosa, would return to power just 12 years later. But the television-friendly Mr Peña ran a professional campaign and faced weak opposition from the fiery Mr López Obrador and from Ms Vázquez, whose poor result is in part a verdict on Mr Calderón’s disappointing six-year term in office.

Many have predicted that a close result would lead to a challenge by Mr López Obrador, who lost the 2006 election by less than 1% and mounted a months-long blockade of Mexico City’s main thoroughfare to protest that result, which he claimed (with thin evidence) was fraudulent. This year’s race looks to be nothing like as close as that of 2006. But if Monday’s final results show a narrower gap, Mr López Obrador’s committed followers could yet take to the streets again.

Election day provided some ammunition for a challenge, with evidence of cheating by some parties and cock-ups by the electoral authorities—though the scale of both was unclear. There were reports of voters in poor areas being offered upwards of 500 pesos ($38) to hand over their voting cards, which prevented them from casting their votes and perhaps enabled someone else to cast them instead. The PRI featured most often in such reports. A ban on political advertising after the end of the campaign on Wednesday was flouted by the Green Party, a formal ally of the PRI. The Greens illegally sent text-messages and recorded phone calls to many people (including your correspondent) on the day of the election, urging them to vote for their candidates.

July 1, 2012

“Canada was born in debt”

Filed under: Cancon, Economics, Government, History, Railways — Tags: , , — Nicholas @ 11:08

At the Worthwhile Canadian Initiative blog, Livio Di Matteo explains one of the less mentioned but urgent reasons behind confederation in 1867:

The trials and tribulations of the European Union, its debt crisis and the Euro and the suggestion that part of the solution lies in a stronger fiscal union reminds me of the forces behind the drive for Canadian confederation in the mid-nineteenth century. Canadians are usually taught in school that major forces driving Confederation were the potential threat of territorial aggrandizement by the United States in the wake of the Civil War or the need for a larger market given Britain’s move to free trade and the end of Reciprocity with the Americans or the desire to generate the economic resources to build a railway to the west so that it could serve as an investment frontier.

One factor that receives very little mention is the fact that the prior to 1867 the colonies of British North America were heavily in debt and faced a fiscal crisis of their own. The solution to the colonial debt crisis that Confederation allowed was the creation of the federal government that was given strong revenue raising powers and assumed provincial debts and thereby stabilized the public credit. Public debt charges in 1867 already accounted for 29 percent of federal budgetary expenditure and by 1880 had only been whittled down to about 24 percent. Canada was born in debt.

Canada was created with a large debt as the provincial and local levels of government had invested heavily in transportation infrastructure — canals and railways in particular. In 1850, there were only about 66 miles of track in operation but by 1860 about 2000 miles of track had been built in eastern Canada. The total cost of building these railways in British North America up to 1867 was 145.8 million dollars the bulk of which was for the Province of Canada — Ontario and Quebec. By way of comparison, Canada’s GDP in 1870 has been estimated at about 383 million dollars.

[. . .]

Confederation was designed to fix a massive debt problem. Creation of a new political entity — the dominion government — would allow for the current debt burden to be serviced and for more credit to be obtained on foreign markets to fund the railway projects of the late 19th century — the CPR, Canadian Northern, etc… Confederation was a solution to the debt crisis but required a form of government that reduced sovereignty for the member units in order to stabilize the public credit. In the Canadian case, as acrimonious as the discussions were, the process was facilitated by the fact that the member units were all British colonies with similar institutions.

Reason.tv: 3 Big Takeaways From Obamacare Decision

Filed under: Government, Health, Law, USA — Tags: , , , , — Nicholas @ 10:59

Here are the three most important things you need to know in the wake of the Supeme Court’s decision on The Affordable Care Act, a.k.a. Obamacare:

1. Government is still unlimited.
2. Mitt Romney is still lame.
3. Health care costs will still soar.

For more details, go to http://reason.com/blog/2012/06/29/3-essential-takeaways-from-the-obamacare

“… except in Canada”

Filed under: Cancon, Economics, Government — Tags: , , , , , — Nicholas @ 10:25

The National Post editorial board celebrates Canada Day by making a case for Canadian exceptionalism:

The acronym “EIC” can refer to a newspaper’s editor-in-chief, the various forms of the storied East India Company, the Engineering Institute of Canada, and, in scientific circles, Electromagnetically-induced chirality. But in these odd times, they might also be deployed, for verbal economy, to denote “except in Canada.”

As in: Banks all over the Western world have suffered a series of shocks since the 2008 financial crisis – EIC. Economies have slowed — EIC. Real estate bubbles have popped — EIC. Deficits have ballooned to crisis proportions — EIC.

OK: Perhaps national pride leads us to exaggeration. A more truthful acronym might be EICAG — to include Canada “and Germany.” Various smaller European nations, as well as countries in Asia and Latin America, also have fared well. Yet it is hard to remember a time (if ever there was one) when Canada’s fortunes, taken as a whole, were so rosy compared to those of all other Western nations. This good fortune is something worth celebrating as we prepare to celebrate Canada’s 145th birthday this weekend.

They even have some praise to lavish on two former prime ministers who don’t normally get a kind word from the right:

Canada’s relative lack of red ink also is no accident. Two decades ago, Canada was what Greece was today: a bloated welfare state running up massive bills that it couldn’t pay. The unpopular job of fixing the balance sheet feel primarily to Jean Chrétien and Paul Martin — and they accomplished the task without any of the political chaos that has been gripping Athens and other southern European capitals in the last year. The prosperity and stability we enjoy today is in large part due to what those two men did with the fiscal mess bequeathed to them by Brian Mulroney and Pierre Trudeau.

Of course, not everything is going wonderfully well in the Dominion: we still have not emulated one of the notable successes of our European friends:

One of the few institutional factors holding Canada back is its healthcare system. As Shaun Francis writes elsewhere on these pages, our refusal to explicitly permit full-blown private alternatives to the current government-payer health monopoly is bad policy that is out of keeping with that of leading European jurisdictions.

Fortunately, this is a shortfall that can be cured easily. As the furor over Obamacare in the United States shows, building a universal public health system is difficult. But Canada has already done this heavy lifting over the last 50 years: All we lack now is a parallel private track — and that is something that will spring into being without any governmental action at all, save the legislative stroke of a pen needed to modify the Canada Health Act accordingly.

June 30, 2012

Thai farm workers arrested for “causing global warming”

Filed under: Asia, Environment, Food, Government — Tags: , , — Nicholas @ 10:29

A weird little story from Thailand:

PHETCHABUN – Early one Thursday morning, a gun was pointed at Ms. Kwanla Saikhumtung, a 34-year-old mother, because she was farming.

The man who pointed the gun was one of ten armed officers from Phu Pha Daeng, the local wildlife sanctuary in Lomsak district. After observing the villagers for three days, the officers finally informed Ms. Kwanla and twelve fellow villagers from Huay Kontha that they were trespassing on wildlife sanctuary land. They demanded that the villagers come to the police station to talk with them.

They refused. The villager that hired them paid taxes on the plot, leading the villagers to believe they had a right to work the land, and they worried about finishing their work.

[. . .]

This incident was the beginning of a seven-year-long legal battle, pitting Ms. Kwanla against the Thai government. She and the other twelve villagers — the youngest only sixteen at the time — were first charged with trespassing.

The real shock, however, came when they were slapped with a 470,000 baht fine for contributing to global warming under the charge of causing environmental damage.

[. . .]

The Royal Forestry Department (RFD) fined the villagers for cutting down trees and farming, drawing from the 1992 National Environmental Quality Act which forbids “destruction, loss, or damage to natural resources owned by the State.” Their fine was determined according to a formula used to calculate environmental damage. The formula measures the increase in temperature caused by cutting down trees. Any increase in the land temperature shows ‘global warming’. In essence, cutting down trees to farm corn leads to global warming.

The Huay Kontha villagers have a running joke, “Because we pick the corn, the world gets hotter.”

The charges that Ms. Kwanla and the other villagers face shed light on an emerging trend in Thailand. Land dispute issues are becoming increasingly common. According to Pramote Pholpinyo, coordinator of the Northeast Land Reform Network (LRN), there are currently 35-40 “global warming” cases against villagers in Thailand, with charges amounting to almost 33 million baht.

H/T to Anthony Watts for the link.

June 29, 2012

From Maoism to Kleptocracy in one generation

Filed under: Business, China, Economics, Government — Tags: , , , — Nicholas @ 08:14

China’s economic growth has been one of the wonders of the modern world, as one of the poorest nations has pulled itself well up the economic tables over just the last twenty years. What it has not done, however, is replace the communist leadership with democratically elected leaders. What has happened is that switching from a pure command economy to a freer economy has created fantastic opportunities for graft and corruption. Opportunities which have been grasped eagerly by party leaders and their friends and family:

As I set out in The Fall of the Communist Dynasty, and a HT to John Hempton’s piece within which he contends that the entire Chinese economy is a Kleptocracy , this week we have news from Citron Research who reports that Evergrande Real Estate Group Ltd is ‘a deception on a grande scale’ .

Citron quote ;-

‘Evergrande who ranks among the top 5 Chinese property companies. Our analysis and primary research reveal that: 1] Evergrande is insolvent; and 2] Evergrande will be severely challenged from a liquidity perspective. The Company’s management has applied at least 6 accounting shenanigans to mask Evergrande’s insolvency. Our research indicates that a total write-­down of RMB 71bn is required and Evergrande’s pro forma equity is negative 36bn.’

What sparked Citrons interest in Evergrande was the mail order doctorate the chairman claimed from the University of West Alabama, a small college 230 miles north of New Orleans with 2300 on-campus students. Evergrande’s is one of the top 5 players in the Chinese property market that fell for its 8th consecutive month in May. My experience with these types of matters is that small things can be excellent markers to greater problems. Small examples of dishonesty in one area of life are often reflected in larger undiscovered examples in other areas of a person’s life.

[. . .]

Zoomlion has an interesting business model, it is similar in many of ways to Caterpillar, except whereas Caterpillar report falling sales, Zoomlion reports astounding sales growth with a fivefold increase in revenue since 2007. Zoomlion customers sometimes buy ten concrete mixers when they planned to initially by one or two. They have a perverse incentive to buy more than they need because these concrete trucks are purchased via finance packages supplied by Zoomlion.

Then the machines can be garaged and used as collateral to borrow further funds from other lenders. Zoomlion continues to grow while cement sales have plunged. In May, cement output increased 4.3 per cent YoY, down from 19.2 per cent recorded last year. Zoomlion’s new debt of $22.5B buys roughly 900,000 trucks which could produce enough concrete (at six loads a day) to build over thirty Great Pyramids of Giza a day.

[. . .]

All revolutions have class and economic matters at their core. Ironically, the difference in a future Chinese collapse is that the expropriators in China in this cycle have been the Communist Party political class. The CCP have become the Kleptopreneur bourgeoisie who have expropriated from China’s proletariat (the industrial working class), via corruption and theft from the state and state owned enterprises. The Ka-Ching Dynasty is responsible for the greatest looting of a nation in history.

Marx wrote that modern bourgeois society (Capitalism) has conjured up such gigantic means of production and of exchange, that it is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells (Karl Marx)

The CCP ‘sorcerers’ have summoned up a political and economic nether world that is so systemically corrupted it is in the process of spiralling into same revolutionary physics that destroyed the original Chinese merchant bourgeoisie that Mao overthrew.

Earlier posts on China’s economy are here. H/T to Cory Doctorow for the link.

June 27, 2012

John Kay on the evils of rent-seeking

Filed under: Economics, Germany, Government, Politics — Tags: , , , , — Nicholas @ 08:08

Broadly speaking, wealth can be accumulated in two distinctly different ways. It can be earned through hard work, innovation, and competition, or it can be extracted from the public by use of coercive methods, corruption, and misappropriation:

Whatever the true extent of the Mubarak family fortune, it stands in stark contrast to the lot of most Egyptians. Gross domestic product per capita in Egypt is a mere $2,500. In western Europe and North America GDP per capita is about $40,000, yet the capacities of Egypt’s intellectual and entrepreneurial elite are the rival of any state in the world.

The real damage imposed by men such as Mr Mubarak is not the money they might have stolen. The tragedy is that the system that enables them to steal it destroys opportunities for others to generate wealth — not only for themselves but for the whole population.

The price of requiring a potential Mark Zuckerberg or Mr Gates to pay a $100 bribe to each of 10 officials before he can establish his new business is not the $1,000 creamed off by corrupt bureaucrats. It is the far greater one of lost businesses that never came into being because the licensing process that makes such corruption possible was not navigated. In the meantime, people who might be successful entrepreneurs choose instead to seek political power. If business is endlessly frustrating and politics endlessly rewarding, the career choice for able and enterprising people is obvious.

Institutions are the key influence on economic prosperity — West Germany did not outperform East Germany because of its excellent monetary policies. And, as Daron Acemoglou and James Robinson point out in their book, Why Nations Fail, a critical feature of successful economic institutions is that they limit the scope for what these authors call “extractive activity” — others have described it as predation or rent-seeking — which appropriates the wealth created by other people.

California primed to make bad decision for “good” reasons

Filed under: Environment, Food, Government, Health, Science, USA — Tags: , , , , — Nicholas @ 00:05

California’s already bad economic situation could be made even worse by mandating that genetically modified foods be labelled to call attention to themselves:

The American Medical Association resolved this week that “there is no scientific justification for special labeling of bioengineered foods.”

The association has long-held that nothing about the process of recombinant DNA makes genetically engineered (GE) crop plants inherently more dangerous to the environment or to human health than the traditional crop plants that have been deliberately but slowly bred for human purposes for millennia. It is a view shared by the National Academy of Sciences, the World Health Organization, the Food and Agriculture Organization of the U.N., the European Commission, and countless other national science academies and non-governmental organizations.

And yet Californians will consider on their November ballots a law that mandates cigarette-like labeling of food derived from GE plants. Proponents claim to promote opportunities for consumers to make informed choices about the foods they eat. But to build support for the measure, they have played on consumer fears about a promising technology that is nevertheless prone to “Frankenfoods” demagoguery. If successful, they may well imperil the ability of Californians, and consumers around the world, to choose a technology that scientists contend could end hunger and malnutrition, lift hundreds of millions from poverty, and reduce the environmental impact of feeding an evermore populous world.

June 25, 2012

QotD: Working with the PQ

Filed under: Cancon, Government, Humour, Politics, Quotations — Tags: , , , — Nicholas @ 13:44

For some reason it is being treated as news that the Prime Minister said he would work with a Parti Quebecois government in the unfortunate circumstance of a PQ victory.

What else was he supposed to say? The PQ has held power several times since Rene Levesque’s first victory in 1976. It’s a democratic country, and provinces can elect whoever they want. Ottawa doesn’t have a choice whether it wants to work with the victor or not. Harper worked with Danny Williams — well, he tried, anyway — when the Newfoundland caudillo declared himself the supreme power of El Rocko Independanto and waged a personal war against his Canadian oppressors. Pauline Marois, the PQ leader (at least until the next revolt) can’t be half as annoying as Danny was.

Kelly McParland, “Why is it news that Stephen Harper would recognize a PQ government?”, National Post, 2012-06-25

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