Quotulatiousness

January 5, 2013

LA terminates luxury option for electric car owners

Filed under: Environment, Technology, USA — Tags: , , , , , — Nicholas @ 12:43

It’s telling that one of the folks quoted in this article clearly identified the free parking at the airport as a primary reason for buying an electric vehicle:

On a recent morning, Jack Luu parked his plug-in Toyota Prius in one of the most expensive lots at Los Angeles International Airport before flying off to a film shoot in Canada. The lot, where Mr. Luu leaves his car as many as 10 times a month for business trips, normally charges $30 a day.

But when Mr. Luu returned home three weeks later, he drove out, as usual, without paying a dime.

“That was a huge reason why I bought the car in the first place,” says the 35-year-old Santa Monica, Calif., postproduction company executive, whose car qualifies for free parking for up to a month at a time in two of LAX’s most convenient—and costly—short-term lots.

Other than that, he says his ride is “expensive, underpowered and not really all that green,” because it can run just 12 miles on electricity before switching to gas.

For years, LAX has offered electric-vehicle owners one of the most generous incentives of its kind in the country: free parking for 30 days in two of its terminal lots, which contain, altogether, 38 charging stations. The rule was meant to encourage people to buy greener cars, but lately it has turned the lots into a mob scene, with some electric-vehicle drivers circling the stations desperately for electricity or running extension cords while others hog the charging spaces for weeks at a time.

December 12, 2012

What is driving the increasing price of higher education?

Filed under: Bureaucracy, Economics, Education, USA — Tags: , , — Nicholas @ 12:03

H/T to Daniel J. Mitchell, who adds:

The first part of the video shows that a college degree has become more valuable, so it’s understandable that the relative price of higher education has risen.

But then, beginning at about 1:55, the video discusses the role of subsidies. Echoing points I’ve made in the past, the professor explains how subsidies have simply generated higher prices. In other words, colleges have captured all the benefits, not students.

Business Week recently published a story that provides some glaring example of how universities have wasted all the additional money. Here are some remarkable excerpts.

    “I have no idea what these people do,” says the biomedical engineering professor. Purdue has a $313,000-a-year acting provost and six vice and associate vice provosts, including a $198,000-a-year chief diversity officer. Among its 16 deans and 11 vice presidents are a $253,000 marketing officer and a $433,000 business school chief. The average full professor at the public university in West Lafayette, Ind., makes $125,000. The number of Purdue administrators has jumped 54 percent in the past decade—almost eight times the growth rate of tenured and tenure-track faculty. “We’re here to deliver a high-quality education at as low a price as possible,” says Robinson. “Why is it that we can’t find any money for more faculty, but there seems to be an almost unlimited budget for administrators?” …Purdue is typical: At universities nationwide, employment of administrators jumped 60 percent from 1993 to 2009, 10 times the growth rate for tenured faculty. “Administrative bloat is clearly contributing to the overall cost of higher education,” says Jay Greene, an education professor at the University of Arkansas. In a 2010 study, Greene found that from 1993 to 2007, spending on administration rose almost twice as fast as funding for research and teaching at 198 leading U.S. universities.

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.

August 31, 2012

The Northlander “was like northern Ontario on wheels”

Filed under: Cancon, Economics, Railways — Tags: , , , — Nicholas @ 00:06

Chris Selley remembers Ontario Northland’s The Northlander, which the Ontario government will be phasing out next month:

Long-distance rail travel for real folks, as opposed to wealthy tourists, took another sad hit recently with the announced cancellation of the Northlander — the Ontario Northland Railway’s leisurely 11-hour putter from Toronto’s Union Station to Cochrane, Ont., whence the more legendary Polar Bear Express will still take you to Moosonee, on James Bay.

It’s not sad in any commercial sense: The provincial government claims each ticket sold was subsidized to the tune of $400 (though other mathematical interpretations are available). And it’s not sad because senior citizens will now be crammed on to buses to go to their far-flung medical appointments. That’s unfortunate, no question: Trains are fundamentally more civilized than buses. But many communities the size of those served by the Northlander don’t even have buses anymore. This is the age we live in.

I find it sad, firstly, because I have fond childhood memories of that trip. There used to be a train that ran past Cochrane, all the way to Kapuskasing, where we had family friends, and it used to run overnight. There was something wonderfully odd about getting ready for bed while trundling up the Don Valley. In the winter, the train was like a strange, slow teleportation to a different planet: You went to sleep in Toronto’s grey-brown approximation of the season and awoke, after a night of groggily perceived stopping and starting, horn blasts and various crashes and bangs, to a blinding white, empty snowscape. Stumbling to the dining car — well, the box-of-cereal-and-milk car — you would find the spaces between the cars encased in snow and ice, like the inside of an old freezer.

It wasn’t fast, or slick. It was a bit ramshackle. But it was folksy. It was like northern Ontario on wheels.

The earlier post on the cancellation.

August 29, 2012

QotD: Government funding for the arts “stinks in God’s nostrils”

Filed under: Books, Government, Media, Politics, Quotations — Tags: , , , , — Nicholas @ 15:14

There’s at least a third reason to stop state funding of the arts, and it’s the one I take most seriously as a literary scholar and writer. In the 17th century, a great religious dissenter, Roger Williams (educated at Cambridge, exiled from the Massachusetts Bay Colony), wrote the first case for total separation of church and state in the English language. Forced worship, said Williams, “stinks in God’s nostrils” as an affront to individual liberty and autonomy; worse still, it subjugated theology to politics.

Something similar holds true with painting, music, writing, video and all other forms of creative expression. Forced funding of the arts — in whatever trivial amounts and indirect ways — implicates citizens in culture they might openly despise or blissfully ignore. And such mandatory tithing effectively turns creators and institutions lucky enough to win momentary favour from bureaucrats into either well-trained dogs or witting instruments of the powerful and well-connected. Independence works quite well for churches and the press. It works even more wonderfully in the arts.

Nick Gillespie, featured guest for “Economist Debates: Arts Funding”, The Economist, 2012-08-29

August 21, 2012

Farewell to The Northlander

Filed under: Cancon, Economics, Railways — Tags: , — Nicholas @ 12:00

The economics of long-distance passenger rail service is brutal: this announcement is not really a surprise, but it is disappointing anyway.

If a train stops running through the hinterland, does anybody hear?

The Ontario government has just announced the end of the line for the Northlander. The Ontario Northland train that runs between Toronto and Cochrane, Ontario, will cease service at the end of September.

What’s the word for that? Disappointing doesn’t cut it. Short-sighted is accurate, but insufficient. Regrettable is an understatement, too.

You’d think as a nation once united by the railway, we would have coined a term to cover the loss, the heartache, the sense of isolation, betrayal and rejection that comes from losing a railway line.

The only expression that comes close is “they’ve killed another train.”

Time and time again, we’ve seen passenger service reduced to little more than a quaint memory in many parts of the country.

Despite the historical appeal, long distance passenger rail loses money just about everywhere: government subsidies have been necessary for decades to keep the trains running. Political jockeying may keep a line open for a longer period, but nothing is going to change the facts. Passenger trains can be competitive for short-to-medium distances, but quickly lose out in efficiency (and potential profits) to air service over medium-to-long distances. Every time someone rides a VIA or Ontario Northland passenger train, the taxpayer is picking up part of the tab (and the longer the distance being travelled, the greater the required subsidy from the government).

Garnet Rogers explains what happens next:

The last train rolled out of town today;
You might have seen it on the news.
We gathered round the engine yard
To say our good-byes to the crews.
Well the cheering stopped, the laughter died
It dwindled down the tracks
“That’s that”, I heard someone say,
“We’ve fallen through the cracks.”

August 14, 2012

Ethanol: starving the third world, by government policy

Filed under: Economics, Environment, Food, Government, USA — Tags: , , , — Nicholas @ 08:47

Jeffrey Tucker on the absurd and cruel implications of a government mandate:

Corn prices are officially through the roof, spiking to record highs. It’s been headed this way through six years of crazy volatility. Now the spike is undeniable. At the same time, crop yields are lower they have been since 1995.

Everyone blames the drought, as if the market can’t normally handle a supply change. The real problem is that the corn market is fundamentally misshaped by government interventions that have made a mess of this and many more markets. The distortions are never contained, but spread and spread.

[. . .]

“Corn is the single most important commodity for retail food,” Richard Volpe, an economist for the USDA told the Los Angeles Times. “Corn is either directly or indirectly in about three-quarters of all food consumers buy.”

Fine, then, answer me this, Mr. Government Economist Man: Why is 40% of the corn crop being burned up in our gas tanks? The answer is a Soviet-like, fascist-like, stupid-like government mandate. It is actually relatively new. It came about in 2005 and 2007. It mixes nearly all the gas we can buy with a sticky product now in rather short supply.

Of all the government regulations I’ve looked at in detail over the last 10 years, the ethanol mandate is, by far, the worst. There are no grounds on which it is defensible. None!

Like so many government initiatives, this was supposed to do something good: reduce the consumption of fossil fuel for gasoline production by substituting a proportion of ethanol. While gas was expensive and ethanol was cheap this might make sense — but when ethanol becomes more expensive, and the raw material used to produce the ethanol would be far better used for food and feedstock, the whole policy becomes an act in the theatre of the absurd.

August 12, 2012

China’s economic situation in Keynesian and Austrian terms

Filed under: China, Economics — Tags: , , , , — Nicholas @ 09:27

Tyler Cowen in the New York Times:

Keynesian economics holds that aggregate demand — the sum of all consumption, investment, government spending and net exports — drives stability, and that government can and should help in difficult times. But the Austrian perspective, developed by the Austrian economists Ludwig von Mises and Friedrich A. Hayek, and championed today by many libertarians and conservatives, emphasizes how government policy often makes things worse, not better.

Economists of all stripes agree that China may be in for a spill. John Maynard Keynes emphasized back in the 1930s the dangers of speculative bubbles, and China certainly seems to have had one in its property market.

[. . .]

The Austrian perspective introduces some scarier considerations. China has been investing 40 percent to 50 percent of its national income. But it is hard to invest so much money wisely, particularly in an environment of economic favoritism. And this rate of investment is artificially high to begin with.

Beijing is often accused of manipulating the value of its currency, the renminbi, to subsidize its manufacturing. The government also funnels domestic savings into the national banking system and grants subsidies to politically favored businesses, and it seems obsessed with building infrastructure. All of this tips the economy in very particular directions.

The Austrian approach raises the possibility that there is no way for China to make good on enough of its oversubsidized investments. At first, they create lots of jobs and revenue, but as the business cycle proceeds, new marginal investments become less valuable and more prone to allocation by corruption. The giddy booms of earlier times wear off, and suddenly not every decision seems wise. The combination can lead to an economic crackup — not because aggregate demand is too low, but because the economy has been producing the wrong mix of goods and services.

Lots of earlier discussion of the problems in China’s economy here.

July 18, 2012

Who Exploits You More: Capitalists or Cronies?

Filed under: Business, Government, Liberty, Politics — Tags: , , , , — Nicholas @ 09:48

June 1, 2012

This is why I always cheer for whoever is bidding against Toronto to host the Olympics

Filed under: Britain, Economics, Sports — Tags: , , , , — Nicholas @ 00:02

If publicly funded professional sports stadiums are bad for the local economy (and they almost always are), “winning” the bid to host the Olympic Games is far worse:

The history of the modern Olympics (and of other large-scale sporting events) reveals a consistent pattern. Organizers or local politicians in the host city commission “impact studies,” which almost always promise extravagant economic benefits. Studies performed after the event, however, find no positive effect at all — let alone one approaching the initial estimates. So it isn’t surprising that a PriceWaterhouseCoopers study commissioned by the British government forecasts that the Games would add about $9.4 billion to London’s GDP between 2005 and 2016. That seems like a large number until you realize that the London metro area’s GDP is roughly $712 billion annually. If the Games’ benefits were spread evenly throughout the decade, they would increase London’s GDP level by 0.1 percent each year.

Further, that $9.4 billion benefit pales compared with the cost of hosting the Olympics. In 2002, the UK’s Department for Culture, Media and Sport estimated that the cost would be $2.8 billion. Ten years later, London’s budget for hosting the Games is $15 billion. Costs already run above that figure and are likely to rise to approximately $38 billion, according to an investigation by the TV network Sky Sports. That would easily dwarf the economic benefits that the PriceWaterhouseCoopers study predicts. Security alone will be extremely costly: more British troops will patrol London than there are currently at war in Afghanistan. And these figures don’t count many hidden and indirect costs of hosting the Olympics — most prominently, disruption to business and traffic congestion. Traffic in London is already difficult; with special lanes for Olympics-related traffic, daily commutes will become a nightmare. (London’s transportation commissioner, Peter Hendy, helpfully advises commuters to go to the pub to avoid rush hour.)

Update, 5 June: The good news just keeps on coming for the London Olympics:

The boom to the economy that the Government hoped the Games would bring to the capital appears to become a bust with tens of thousands to tourists spurning the hiked prices, congestion and heightened security.

While bookings for July and August are down by 35 per cent on last year other European capitals appear to be prospering from London’s gloom.

French ministers, who lost the Olympic bid to Britain, might be quietly rubbing their hands with glee not only for dodging the £10 billion Games bill but also with a 50 per cent rise in tourism bookings. Similarly Barcelona and Berlin have seen their tourist numbers soar by 100 per cent over the summer.

This is an example of why, when the announcement was made that Paris had lost out on the bid for the 2012 Olympics to London, Reason titled their coverage “Lucky Paris“.

May 29, 2012

The fuzzy good intentions of equalization and the bad results

Filed under: Cancon, Economics, Government — Tags: , , , , — Nicholas @ 10:07

Peter Holle in the National Post, outlining the economic distortions of federal equalization payments in the recipient provinces:

Equalization, viewed critically, does no favours to either the funding or recipient provinces. After 50 years, outside transfers constitute an ever larger portion of the economies in have-not provinces. In an otherwise globally-oriented, market-driven world, Canada’s equalization program has encouraged the development of locally-oriented, public-sector driven economies.

Here are just a few ways that equalization provides incentives to harmful policy, stunting economic growth in the jurisdictions the policy means to help.

  • Inflating the public sector: Equalization has allowed recipient jurisdictions to create disproportionately larger public sectors because someone else is paying the bill. Manitoba’s public sector, for instance, employs 103 people per 1,000 residents, compared to a Canadian average of 84.
  • Politicizing spending. The external funding from equalization has allowed local politicians to build up vote-buying infrastructure with little political cost, by disconnecting taxation from benefit. Quebec’s $7-a-day daycare, and university tuition at less than half the Canadian average, would be unworkable without $7.4-billion in annual equalization subsidies from the rest of Canada.
  • Incentives for higher taxes. A path-breaking study by the Atlantic Institute for Market Studies showed that equalization rewards recipient provinces for imposing high and damaging tax rates, which deter private-sector investment and job creation. Manitoba, the only have-not province in Western Canada, has the highest income taxes in the region, and also has the lowest rate of private-sector investment.
  • Artificially inexpensive hydro power. By excluding the true value of renewable hydro energy revenues from the calculation of revenue capacity, the equalization formula rewards Manitoba and Quebec for charging artificially low domestic electricity prices. Below-market prices, in turn, encourage consumers to use more resources that otherwise would be conserved in response to accurate price signals.

May 9, 2012

A call to ban college football

Filed under: Economics, Education, Football, Government, Media, USA — Tags: , , , — Nicholas @ 00:02

This Wall Street Journal piece by Buzz Bissinger is guaranteed to stir up controversy:

In more than 20 years I’ve spent studying the issue, I have yet to hear a convincing argument that college football has anything do with what is presumably the primary purpose of higher education: academics.

That’s because college football has no academic purpose. Which is why it needs to be banned. A radical solution, yes. But necessary in today’s times.

[. . .]

Who truly benefits from college football? Alumni who absurdly judge the quality of their alma mater based on the quality of the football team. Coaches such as Nick Saban of the University of Alabama and Bob Stoops of the University of Oklahoma who make obscene millions. The players themselves don’t benefit, exploited by a system in which they don’t receive a dime of compensation. The average student doesn’t benefit, particularly when football programs remain sacrosanct while tuition costs show no signs of abating as many governors are slashing budgets to the bone.

If the vast majority of major college football programs made money, the argument to ban football might be a more precarious one. But too many of them don’t—to the detriment of academic budgets at all too many schools. According to the NCAA, 43% of the 120 schools in the Football Bowl Subdivision lost money on their programs.

The other big beneficiaries of the college football system is, of course, the NFL. Unlike baseball or NHL teams, it doesn’t have to maintain a “farm team” league or leagues to provide training and play opportunities for would-be professional football players. This burden, instead, is carried by the taxpayer as part of their share of higher education.

April 19, 2012

“Ontario is on track to have the highest electricity prices … in North America”

Filed under: Cancon, Economics, Environment, Government, Technology — Tags: , , , — Nicholas @ 10:08

Scott Stinson explains why Ontario consumers are facing huge price hikes for electricity over the next 18 months:

It’s no secret that Dalton McGuinty’s Liberals have placed a huge bet on growing a green-energy sector by subsidizing the production of renewable energy. Although energy bills have been steadily rising since the party took power in 2003 — the average cost of a kilowatt of electricity was more than 30% higher last year than it was five years ago — the Liberals have somewhat masked this fact by handing a 10% rebate back to consumers with the euphemistically named Clean Energy Benefit, which also happens to utterly contradict the conservation incentive that should be part of a switch to a greener grid.

Electricity costs, though, are set to spike.

“Ontario’s power system is fuelled by consumers to the tune of about $16-billion a year,” says Tom Adams, an energy consultant who has written extensively on electricity and environmental issues. “That number is headed for $23-billion or $24-billion soon, by 2016,” he says in an interview.

[. . .]

Mr. Adams notes that when the Green Energy Act, with its guarantees of above-market rates for wind and solar electricity known as feed-in-tariffs (FIT), was introduced in 2009, the Liberals said electricity costs would only be impacted by about 1% annually. We now know that rates for consumers are rising by 9% a year. “The government says about half of that is due to Green Energy, but if they were being honest it would be more than that,” Mr. Adams says.

The coming increases, meanwhile, which can partly be attributed to locked-in contracts for renewable energy, are also a result of a host of other factors, from new generation capacity being introduced to phase-out costs of existing facilities to new transmission capacity being added to the energy grid.

March 12, 2012

GM: the re-Volting face of corporatism

Filed under: Economics, Government, Politics, USA — Tags: , , , , , — Nicholas @ 09:14

Redmond Weissenberger on the decline of GM from world-class manufacturer to crony capitalist shell:

General Motors was once the Jewel in the crown of American Capitalism. By many, it was considered the greatest manufacturing company in America, if not the world. The company was destroyed by the insidious nature of the Neo-National Socialism that has infected the USA for well on 80 years now, when the merger of state and corporate power that swept across Europe was aped first by Hoover and then by FDR in the disastrous New Deal. The unions that were encouraged to eat away at GM from the inside were bailed out and the US Federal government took a 25% ownership in company. In the 2009 deal to “restructure” GM, the bondholders were wiped out, and the Unions were given a free pass to continue their destructive behaviors.

Built by what is now a de facto state-owned corporation, the Volt was the child of the green-washed brains of the Obama administration. The Volt was built for no-one, but a vision of the perfect, “New eco-Socialist Man”. Who is buying the Volt? According to Bill Visnic, senior editor of Edmunds.com, “The Volt appeals to an affluent, progressive demographic” General Motors itself stated that the average income of a Volt buyer is $175,000 a year. This trend does of course line up with the type of individual who has been at the forefront of the environmental movement since day one. A rarefied elite, righteously indignant, statist in nature, ready to have the government force eco-correct behavior on all who inhabit the land. The classic example is Prince Philip, Duke of Edinburgh, who once opined that “In the event that I am reincarnated, I would like to return as a deadly virus, to contribute something to solving overpopulation”.

The Volt is a very good example of what happens when the means of production falls into the hands of the State. The system of profit and loss that can only operate when prices are set by the private owners of the materials and the means of production. The Chevy Volt can only exist within the sphere of the state wherein there is no rational economic calculation possible.

[. . .]

It is estimated by Tom Gantert that the Volt has received up to $3 Billion in Local, State and Federal Subsidies. And if you believe that GM has indeed sold 6,000 Volts, then the total subsidy per car can be estimated anywhere from $50,000 to $250,000. All of this for a mid-sized 4 door sedan that retails for $39,828 (eligible for a $7,500 federal rebate of course).

March 5, 2012

The failure of wind power

Filed under: Britain, Economics, Environment, Technology — Tags: , , , , , — Nicholas @ 00:01

Matt Ridley on the inability of wind power advocates to distort reality:

To the nearest whole number, the percentage of the world’s energy that comes from wind turbines today is: zero. Despite the regressive subsidy (pushing pensioners into fuel poverty while improving the wine cellars of grand estates), despite tearing rural communities apart, killing jobs, despoiling views, erecting pylons, felling forests, killing bats and eagles, causing industrial accidents, clogging motorways, polluting lakes in Inner Mongolia with the toxic and radioactive tailings from refining neodymium, a ton of which is in the average turbine — despite all this, the total energy generated each day by wind has yet to reach half a per cent worldwide.

If wind power was going to work, it would have done so by now. The people of Britain see this quite clearly, though politicians are often wilfully deaf. The good news though is that if you look closely, you can see David Cameron’s government coming to its senses about the whole fiasco. The biggest investors in offshore wind — Mitsubishi, Gamesa and Siemens — are starting to worry that the government’s heart is not in wind energy any more. Vestas, which has plans for a factory in Kent, wants reassurance from the Prime Minister that there is the political will to put up turbines before it builds its factory.

It’s a lesson we still need the Ontario government to learn: our electricity prices are scheduled to go up substantially to finance the massive wind farm investment the McGuinty government has signed up for. Much more of our landscape will look like this in future:

Even in a boom, wind farms would have been unaffordable — with their economic and ecological rationale blown away. In an era of austerity, the policy is doomed, though so many contracts have been signed that the expansion of wind farms may continue, for a while. But the scam has ended. And as we survey the economic and environmental damage, the obvious question is how the delusion was maintained for so long. There has been no mystery about wind’s futility as a source of affordable and abundant electricity — so how did the wind-farm scam fool so many policymakers?

One answer is money. There were too many people with snouts in the trough. Not just the manufacturers, operators and landlords of the wind farms, but financiers: wind-farm venture capital trusts were all the rage a few years ago — guaranteed income streams are what capitalists like best; they even get paid to switch the monsters off on very windy days so as not to overload the grid. Even the military took the money. Wind companies are paying for a new £20 million military radar at Brizlee Wood in Northumberland so as to enable the Ministry of Defence to lift its objection to the 48-turbine Fallago Rig wind farm in Berwickshire.

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