Archive for June, 2013

Reflection on confection protection

The Hill, May 22, 2013:

The Senate rejected a farm bill amendment that would have reformed the U.S. sugar program.

Sens. Jeanne Shaheen (D-N.H.), Pat Toomey (R-Pa.) and Mark Kirk (R-Ill.) introduced an amendment that would have reformed the subsidies and import restrictions on sugar within the United States. The amendment failed on a 45-54 vote Wednesday.

“Currently sugar is the only commodity program that was not reformed in the committee passed farm bill that is under consideration now,” Shaheen said ahead of the vote. “It’s puzzling to me that they totally left sugar subsidies out of the bill reforms.

“What we have now is a sweet deal for sugar growers and a bad deal for consumers.”

The Globe & Mail, June 6, 2013:

A former president and CEO at Nestlé Canada Inc. and Nestlé USA – who also headed up the iconic Laura Secord brand – now faces the prospect of jail time for allegedly taking part in a conspiracy with his competitors to fix chocolate prices in Canada.

The federal Competition Bureau said Thursday criminal price-fixing charges have been laid against the executive, Robert (Bob) Leonidas, as well as Nestlé Canada, its competitor, Mars Canada Inc., and a wholesale distributors network called ITWAL Ltd. Also facing charges are Sandra Martinez, former president of confectionary for Nestlé Canada, and Glenn Stevens, president and chief executive officer of ITWAL.

Price fixing: it’s not wrong if it’s legal.

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Price-Gougers vs. Hoarders

I would make a terrible politician.

I have this awful tendency to say the right thing instead of what’s politically correct.

I lived in Calgary for eight terrific years. Most of my good friends still live there, as do many former colleagues and neighbours. My brother and his family are there, as is my wife’s sister and family, plus several aunts, uncles and cousins. I also loved my former neighbourhood, with its proximity to good restaurants, bars, shops, parks, downtown and the Stampede grounds. There were many reasons why we left town in 2008, but our family, friends and neighbourhood at the time were not any of them. I really love that town.

So it should not come to any surprise to you to learn that the recent massive flood in Calgary really shook me emotionally. My brother had to evacuate his house, as did a couple of my dearest friends. There were probably other friends and former colleagues forced out too. My old neighbourhood was devastated, as were the lovely parks and pathways along the Elbow through which I roamed regularly.

It should without saying that many people are volunteering their time, energy and other resources in response to this environmental disaster. That’s wonderful and commendable.

However, a disturbing but inevitable trend comes from the backlash against those who are perceived to be less generous with their resources, as seen here:

Gordy Marchant’s wife first informed him the Queensland Liquor Store in Calgary’s southeast was charging $10 for a bag of ice amid a rush by people to stock up on goods as floods ravaged Calgary Friday.

“I didn’t believe it, but was out having a smoke and figured, ‘What the heck, I’ll check it out,’ it’s only down the street from me,” he recalled.

Marchant got to the store shortly before noon and said he was shocked to find the sign on the front of the ice cooler now read $20 per bag. He snapped a photo and posted it to Facebook. That same image quickly made it to Twitter and had been retweeted by hundreds Friday afternoon.

“I couldn’t believe it,” Marchant said. “I went up and asked him (the store clerk) and he said, ‘Yep, $20.’ “

On his way out of the store Marchant said he told the clerk, “Just remember, karma’s a bitch.”

Note that the guy didn’t want or need the ice. He was just pissed off at the price. While he smoked from a $14/pack cigarette.

It prompted me to post on Facebook:

To those in Calgary who are bitching about price gougers, remember that increased prices helps to ensure a higher level of supply of essential goods in times of increased scarcity. Now’s not the time to bitch about the high cost of water; that price may have helped ensure the water was there for you to purchase.

The response to this was about what one could expect. No one wants to pay more for essential goods like water or ice in times of crisis, and no one wants to be taken advantage of.

Fair enough. I don’t want people to pay any more for a product as the next guy, and that wasn’t evident in my harsh post. But my point isn’t about what’s fair but instead about how to ensure essential goods are efficiently distributed to the public in times of need.

When asked how this statement was wrong or false, the responses were generally along the lines of “You’re wrong because SHUT UP, YOU UNCARING JERK.”

And don’t think that type of response doesn’t cross party lines:

Of course, there was very little price gouging going on in Calgary, especially once the panic wore off. Even though businesses ought to have the right to charge what they want, they still have to be concerned about their future business and the way they treat their customers.

Still, my empathy wasn’t so much with them as with the poor folk who went to stores only to find empty shelves because prices were kept below market value:

"Even if the water is shut off for a few days, at least I saved ten bucks. So it all worked out!"

“Even if the water is shut off for a few days, at least I saved ten bucks. So it all worked out!”

The shelves are empty because many people — fearful or speculative of being trapped without clean water — grabbed as much as they could before others did the same. Moreover, as prices are capped below market value, these consumers purchase more than they need.

In other words, these people hoarded the essential good, meaning others didn’t have a chance to purchase said product.

And the government not only encourages this behaviour, but demands it.

Don Boudreax speaketh thus:

Whenever government obstructs sellers’ abilities to raise prices at the pump, the method for allocating the few supplies among the many demanders is first-come, first-served.  Two inevitable results are long queues and the failure of many motorists to find gasoline to buy.  Each motorist who waits in line, therefore, raises the cost of gasoline to other motorists – both by increasing the amount of time that each motorist must spend waiting in line for a chance to buy gasoline, and by decreasing the chances that each motorist will actually find gasoline to buy.

So the logic that leads you to prosecute retailers for “unscrupulously” raising prices ought lead you also to prosecute motorists for “unscrupulously” queuing up.  Indeed, because queuing (unlike higher prices) creates no incentives for suppliers to bring more gasoline to market, queuing motorists, as you might describe their self-interested activities, rip each other off even worse than do price-hiking retailers.

Why is the self-interest of hoarders more morally ethical than the self-interest of price gougers?

Trick question: neither is more than the other.

This is because self-interest in the market even during times of scarcity — especially in times of scarcity — helps ensure people get what they need:

Allowing prices to rise at times of extreme demand discourages overconsumption. People consider their purchases more carefully. Instead of buying a dozen batteries (or bottles of water or gallons of gas), perhaps they buy half that. The result is that goods under extreme demand are available to more customers. The market process actually results in a more equitable distribution than the anti-gouging laws.

Once we understand this, it’s easy to see that merchants aren’t really profiting from disaster. They are profiting from managing their prices, which has the socially beneficial effect of broadening distribution and discouraging hoarding. In short, they are being justly rewarded for performing an important public service.

Like rent controls and minimum wage, anti-price-gouging legislation is just another example of where government intervention creates the very scarcity it seeks to prevent, also known as pathological altruism:

Good government is a foundation of large-scale societies; government programs are designed to minimize a variety of social problems. Although virtually every program has its critics, well designed programs can be effective in bettering people’s lives with few negative tradeoffs. From a scientifically-based perspective, however, some programs are deeply problematic, often as a result of superficial notions on the part of program designers or implementers about what is genuinely beneficial for others, coupled with a lack of accountability for ensuing programmatic failures. In these pathologically altruistic enterprises, confirmation bias, discounting, motivated reasoning, and egocentric certitude that our approach is the best—in short, the usual biases that underlie pathologies of altruism—appear to play important roles.

You see, dear reader, I defend price gouging, not because I like it, but because it works.

But unfortunately, the public doesn’t see it that way, which is why politicians would commit professional suicide if they said anything else.

Which is why I would make a terrible politician.

UPDATE: This says it better than I could. Read the whole thing.

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Dressing like a slut doesn’t instigate inappropriate sexual behavior, except when it does

Now is the time we juxtapose*.

BBC, May 2011:

A new protest movement sparked by a policeman’s ill-judged advice to women students to “avoid dressing like sluts” has taken root in the US and Canada

Police Constable Michael Sanguinetti had been giving a talk on health and safety to a group of students at Osgoode Hall Law School in Toronto when he made the now infamous remarks.

“You know, I think we’re beating around the bush here,” he reportedly told them. “I’ve been told I’m not supposed to say this – however, women should avoid dressing like sluts in order not to be victimised.”

He has since apologised for his remarks and has been disciplined by the Toronto police, but remains on duty.

Saskatoon StarPhoenix, June 2013:

One thing we know about Saskatoon is that we take our residential neighbourhoods seriously. Council will approve $200 million for a bridge and freeway with extra lanes in a heartbeat, but will spend an hour debating a zoning change to allow a yoga studio or day-care centre on your block.

If you think a yoga studio is bad, wait until bar patrons teased by the stripping and fuelled by alcohol walk out and wander down your street.

In summary, men are pigs.

*With apologies to Kate

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Gift Horse Remorse

When all you want is to be miserable, there is no pleasing you.

Paul Hanley's photo of his birthday present

Paul Hanley takes a photo of his birthday present

Paul Hanley, the StarPhoenix‘s answer to David Suzuki except without the charm, sees no benefit in the “Saskaboom.”

Saskaboom is supposed to make our lives better, isn’t it? It may be making some of us richer – there are now 8,000 millionaires in the province – but the evidence suggests Saskatchewan’s booming economy has not translated into a better society.

Can you believe that there was once a time when rich, successful people were considered to be “society”?

Sure, there are many hundreds of new trucks lined up in the car lots and plenty of young men with big wages eager to buy them. The suburbs are expanding, couples are building houses and buying big screen TVs, but where are the social goods that make for a strong community?

People getting the chance to purchase what they want, to pursue their dreams, and to live their lives more in accordance with their wishes? Where’s the social good in that?

Some countries see wealth as an opportunity to create public or social goods. These are goods or services that benefit the largest number of people in the largest possible way.

By definition, a healthy economy provides more goods and services which benefits the largest number of people in the the largest possible way.

Classic examples include clean air and water, streets, health care and literacy. Such goods are “non-excludable” and “non-rivalrous,” meaning some individuals cannot be excluded from their use and usage by one individual does not reduce availability to others.

At any one time, the water I drink is used by me alone, the air I breathe is used by me alone, the street under my car is used by me alone, the doctor I see is seen by me alone. My use of these reduces their immediate availability to others.

His point, of course, is that society doesn’t provide these goods equally, which is another way of saying Hanley is envious of others’ good fortune.

It seems our booming economy mainly creates private goods that are excludable and rivalrous, in that they are exclusive to those who can afford them.

Envy.

And because we have adopted an ideology were economic winners feel entitled to all the income they earn – even though that income often results from exploiting publicly owned resources – tax revenues are insufficient to generate the public goods that build communities.

Resource income comes not from simply “exploiting publicly resources” but from providing the capital, labour, expertise, infrastructure, marketing and delivery of these resources, which benefit consumers and society as a whole. The alternative to this is if the state itself runs their own resource companies, which was done remarkably poorly in the past and, in some backward nations, today.

With all the money being generated in the province, why are universities cutting budgets? In other wealthy societies, such as Denmark, which has fewer resources than we do, most higher education is free.

The universities are cutting budgets because they are bloated bureaucracies with no sense of restraint, while higher education isn’t free in Denmark or elsewhere; it’s subsidized by “economic winners”.

Supposedly, Saskatchewan is the only jurisdiction in Canada running budget surpluses. The provincial auditor says this is a polite fiction and a fuller analysis of costs and revenues reveals deficits in nine of the last 10 years. Why, when our economy is booming?

Good question. Our economy is booming despite the growing expanse of government. Such is the power of the marketplace.

Despite the boom, inequality is growing in this province. The top 20 per cent of families with children earn 40 per cent of after-tax income, the bottom fifth only six per cent.

The key word is “earn”.

Rents and other living costs are rising due to the boom, making life harder for low-income families.

Rents and living costs are rising not because of the boom in general, but specially because more people want to live here. Saskatchewan is becoming a more attractive place to build a life for thousands of people. This is a good thing.

Whole segments of the population – including most First Nations and Metis citizens – continue to be excluded from the boom. Inequality results in social problems. Aboriginal kids often land in jail instead of university. Yet reserve schools get less money than other schools. Why is that?

The most socialized demographic in the province — i.e. those receiving the most taxpayer subsidized income and services relative to taxes paid — are First Nations people. Since they rely on government more than other demographics, they are less dependent on the free market economy and, as a result, do not benefit as readily (though are not excluded entirely) in times of market prosperity. This is not a good thing.

And northern Saskatchewan reportedly has among the highest levels of poverty in the country when resource extraction there generates hundreds of millions of income for mining companies.

Hanley’s expressed concern for the poor folk of northern Saskatchewan would be more convincing if he weren’t trying to shut down the only viable private industry in the north.

We are booming, but Saskatoon doesn’t have enough money to fix its potholed roads. Traffic is increasingly unpleasant and as the city expands, time spent in cars can only rise. Yet there is not enough money to provide effective public transit.

There’s not enough money in the world to provide effective public transit.

Meanwhile, the federal government is systematically cutting every measure designed to protect our most important public good, a clean and sustainable environment.

If only that were even half true.

There are other models. In Denmark, for example, social policy in areas such as health care, child care, education and protecting the unemployed are part of a “solidarity system” that makes sure almost no one falls into poverty. Danes pay very high taxes, but in return en-joy a very high quality of life due to the proliferation of public goods. It may be difficult to become very rich, but it is also difficult to be poor.

Some earnest Danes might disagree with this. Hanley might be happy about Denmark’s anemic economy,  though he might not be enthused about one of the primary causes.

Denmark’s minimum wage is double North American levels and people who are totally out of the labour market have a basic income guarantee of about $100 per day. Unemployment insurance covers up to 90 per cent of earnings for as long as two years. Every worker in Denmark is entitled to five weeks of paid vacation plus 11 paid holidays. The state covers three-quarters of the cost of child care, more for low-income workers.

It’s official. No one works in Denmark.

Despite high taxes, the Danish people rank among the happiest in the world, according to an OECD study. They are also highly engaged citizens: In their last election, which had no TV ads, 89 per cent of Danes voted – for governments that tax them heavily.

For “right-wing populist” governments.

Why is there so little public benefit from Saskatchewan’s boom?

Because Paul Hanley has a very narrow definition of “public benefit”.

In Paul’s world, if it ain’t perfect, it ain’t good.

Remember that if you ever consider buying him a birthday present.

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Q Rating Governance

Further to this post, the Ace nails it:

How photogenic are you, and what causes do you believe in?  Before we decide whether or not to perform this pricey operation on you, we’ll all have to vote (I mean, the government will vote, on our behalf) about whether your life adds sufficient value to the lives of others, in terms of social welfare and social justice.

This is intolerable.  And it will only get worse.

Yup.

(h/t Kathy Shaidle)

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The Lame-Stream Media Strikes Back

The following is a draft post I came across from more than a year ago (March 30, 2013). Not sure why I didn’t post it. Thought I’d do it now.

Just when you think the mainstream media couldn’t get any lamer, they go ahead and lame harder than they’ve ever lamed.

It started with the whole Graham James saga, how he was given a lenient sentence for the crimes of sexually abusing his former hockey players, Thereon Fleury and Todd Holt. It was all over the news, especially here in Saskatchewan, where the crimes were primarily committed.

Apparently, one of the StarPhoenix‘s readers had enough of the coverage given to the principles of the trial and wrote a letter to the editor expressing her displeasure. The letter is not available online for reasons I’ll soon explain,  so here it is in full:

Is anyone else as sick of hearing and reading about Theo Fleury as I am?

What Graham James did was wrong, and abuse should never happen to anyone. Did Fleury and Sheldon Kennedy do anything to stop it? Fleury could have walked away and in doing so may have prevented it from happening to someone else.

But Fleury wanted to get to the NHL at any cost. That cost was James.

And what about all the people in whom Theo Fleury gave drugs and money for sex? Is it not the same thing? Is being a “john” and doing drugs not a crime? Where is his jail time for his crimes? Enough already.

It’s signed “Carol Belton, Saskatoon.”

If you’re like me, when you read this you probably thought, wow, what a nut, she sure hates Theo and has some surprising assumptions about sexual abuse victims, and then you move on.

But, as what happens in these days of perpetual outrage, some people weren’t too happy about this. Fleury posted about it on his Facebook page, apparently, and the winds of fury blew up across the land or something. Fair enough. It would have been a stupid, insensitive letter at any time, much less at the tail end of Graham’s trial. Of course people were going to be pissed.

What’s stupider, however, was the reaction of the StarPhoenix to this outrage. Here’s the editorial from this morning, entitled “To our readers”:

It was a letter that should not have run. We were wrong and we apologize.

On Thursday, The StarPhoenix published a letter to the editor submitted by a reader suggesting Theo Fleury could have taken steps to stop the abuse that was inflicted on him by confessed sex offender Graham James.

The letter was disturbing and shocking in its lack of understanding around the issue of child abuse.

Every year, we publish hundreds of letters dealing with sensitive topics. Like the letter in question, many represent views with which members of the editorial board at The StarPhoenix strongly disagree, but are selected for publication to promote free speech and encourage dialogue. It was here the paper fell down.

Mr. Fleury is a survivor of child sexual abuse. There is no constructive moral debate to be had around the question of whether he could have fought back or “walked away.” For anyone to blame him for his fate is unfair in the extreme. The letter did little to advance intelligent debate around our need to confront and address the horrors of child abuse.

We have personally apologized, by telephone, to Mr. Fleury . During that conversation, he spoke of his belief that any discussion exposing the troubling issues of child abuse can be taken positively. He also said he welcomes all opportunities to advance his work as an advocate for greater understanding of the issue. We appreciate his grace and understanding.

We regret The StarPhoenix could not have contributed more constructively to the important discussion of the issue of child sexual abuse. We again apologize to Mr. Fleury , his family, other survivors and all of those we offended by publishing the letter.

Oh, please. Where do I begin?

There is no constructive moral debate to be had around the question of whether he could have fought back or “walked away.”

I hate to shock you, SP, but you obviously had at least one reader who disagrees with that position, wrongly or otherwise. And where there’s one, there’s probably others, which would mean that there might be a small subset of people who don’t approve of Fleury and his silence in these matters until now. This means that there is a moral debate going on, no matter what this city’s paper of record insists.

The letter did little to advance intelligent debate around our need to confront and address the horrors of child abuse.

Even though on the same page, the paper published no less than 13 letters to the editor advancing precisely that intelligent debate.

[Fleury] spoke of his belief that any discussion exposing the troubling issues of child abuse can be taken positively. He also said he welcomes all opportunities to advance his work as an advocate for greater understanding of the issue.

Of course he would say this. He’s taken on tougher opponents than some nobody on the letters page. He knows that the way to fight stupidity is with a good, solid argument.

The late, great Andrew Breitbart knew this better than anyone. The man was the news editor of the Drudge Report, helped build the Huffington Post, founded a formidable collection of Big websites, and took on all comers. Those of us who followed him on Twitter took delight in his constant re-tweets of every vile, wretched, subhuman comments directed his way by the vermin Left. He knew that sunlight was the best disinfectant, and that the way to battle ignorance was by exposing it for the foolishness it is.

He had balls not to run away from a bad argument, but to confront and challenge it to oblivion.

That original letter to the editor was stupid. So what? The public responded the way they should have. Good on them, shame on the editors of the StarPhoenix and any other self-described “journalist” who feels that, when it comes to bad taste, censorship is an option.

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Lax Tax Facts

Even when Gerry Klein gets it right, he gets it wrong.

He’s right that the Senate reform would provide more balance in the federal government against the prime minister’s office, but he just can’t help but control his lazy-ass journalism.

Among the various Conservative scandals (and “scandals”) The Finger uses to make his case, he comes up with this doozy:

Last year’s budget document included a clause giving Revenue Canada the power to go after charities in what clearly was an attack on environmental groups that opposed pipelines. It’s worth mentioning that the Obama administration is facing its greatest scandal over the Internal Revenue Service doing that very thing to various Tea Party groups that claimed charitable status.

Nope. There is no reasonable comparison between the investigation of Canada Revenue Agency on environmental groups and what the IRS was doing in the United States.

The CRA categorizes non-profits as not-for-profits or registered charities. The former category has its own set of rules and regulations which allows groups to operate efficiently, pay limited or no income tax and receive donations, but the donors do not receive tax-deductible receipts.

Registered charities, on the other hand, are to be dedicated toward charitable activities and are allowed to issue tax receipts. These organizations cannot spend more of 10% of its revenue on advocacy. This is the crux of the recent investigations into environmental groups, several of whom were accused of spending most of their budget on advocacy, among other things. The scandal here, then, isn’t that the Conservative government was targeting environmental groups maliciously, but that the CRA was allowing them to operate without verifying their compliance.

Meanwhile, the president of the United States has directed the IRS — likely personally — to harass political and ideological opponents who had not broken any laws or regulations. There is little doubt that the administration and the IRS broke laws in this witch hunting exercise, though the question remains on which heads will role.

In other words, the CRA audits of environmental groups and the IRS scandal are like apples and … well, whatever is the complete opposite of apples. Bowling balls, maybe.

The Finger might also want to consider the fact that the United States has far stronger checks and balances through the constitutionally defined separation of powers — including an independent Senate — and that never stopped the administration from abusing its tax-collection authority.

I would just be satisfied if Klein could just get his facts straight before taking yet another cheap smear on a conservative politician. Here’s a good place for him to start.

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