There is a lovely area in London, Ontario, that used to house a large hospital and many ancillary buildings and operations. It is near downtown and abuts the south branch of the Thames River. In keeping with our adaptation and adoption of Brit names, the area is referred to as "SOHO", in part because the hospital was on South Street and was often referred to as SOuth HOspital.
The hospital has moved, as have the ancillary operations. The space and real estate could likely be a prime development area. Enter the local politicians, dreamers, possibly shady dealings, and perhaps even undetailed and undefined cronyism.
The confused and confusing layers of intricacies of entwined dealings in this city make me wonder how any municipal politician can keep track of what goes on here (or in any large city).
Irrelevant Digression: I met the current mayor once. He was at a mystery dinner theatre show I did a year or two ago.
Elitist interventionists are convinced they can amend the workings of the market to make lives better for at least a targetted segment of the population. They are almost always wrong. From Cafe Hayek,
... from page 268 of Armen Alchian’s profound 1976 essay “Problems of Rising Prices,” as it is reprinted in Vol. 1 of The Collected Works of Armen A. Alchian(2006) (original emphasis):
The so-called shortage of gasoline and energy in the United States [during the 1970s] was precisely and only such a political attack. It could not have been brought about more cleverly and deceitfully even if the politically ambitious had explicitly written the script. Inflate the money stock; when prices rise, impose price controls to correct the situation. These controls lead to shortages which “require” government intervention to assure appropriate use of the limited supply and to allocate it and even to control and nationalize the production of energy. The powers of political authorities are increased; the open society is suppressed.
Brilliant. And it should be a fair warning for today and the future.
With the rise to power of Pauline Marois as the leader of the Parti Quebecois, there has been renewed discussion about Quebec separation from Canada. If you want to see a quickie summary of what it is all about, go to [where else??] Wikipaedia. Here is the intro section from there:
The Quebec sovereignty movement (French: Mouvement souverainiste du Québec) is a political movement as well as an ideology of values, concepts and ideas that advocates for increased sovereignty for the Canadian province of Québec.
Several diverse political groups coalesced in the late 1960s in the formation of the Parti Québécois, a provincial political party. Since 1968 the party has appealed for constitutional negotiations on the matter of provincial sovereignty, in addition to holding two provincial referendums on the matter. The first, which occurred in 1980, asked whether Quebecers wished to open constitutional negotiations with the federal government (and other provinces) for the intended purpose of establishing a 'sovereignty-association' pact between the province of Québec and the rest of Canada. Approximately 60% of Québec's voting public rejected the idea put forth by Parti Québécois leader René Lévesque. The matter was dropped by the party for most of the 1980s, especially after the patriationof the Canadian Constitution without the consent of the Parti Québécois government, and the creation of the federal Charter of Rights and Freedoms which enshrined the protection of the French language and French-Canadian culture in Canada. In 1995, after two failed attempts by the Mulroney administration to secure Québec's ratification of the Constitution, the Parti Québécois held a second referendum, though on this occasion the question was, albeit obliquely asked, whether one wished for the independence of the province of Quebec from the rest of Canada. On this more precise question, the response was again in the negative, though this time by a far closer margin, with only 51% against the proposal.
Though the Parti Québécois has long spearheaded the sovereignty movement, they are not alone. Other minority provincial political parties, such as Option nationale and Québec Solidaire, also support sovereignty, but are not always supportive of the Parti Québécois. The Quebec Liberal Party, Québec's other primary political party, is opposed to increasing political sovereignty for the province, but has also been historically at odds, on occasion, with various Canadian federal governments. Thus, Québec politics is effectively divided into two camps, principally opposed over the sovereignty issue. Quebec sovereignty is politically opposed to the competing ideology of Canadian federalism.
Most groups within this movement seek to gain independence through peaceful means, using negotiation-based diplomatic intervention, although fringe groups have advocated and used violent means. The overwhelming number of casualties were murdered at the hands of the FLQ, a terrorist organization which perpetrated a bombing and armed robbery campaign from 1963 to 1970, culminating in the October Crisis and the death of senior government minister Pierre Laporte. Since this time all mainstream sovereignist groups have sworn off violence, while extremist nationalist groups, though in the minority, support violent actions in the name of liberating Québec from Canadian oppression.
The primary mainstream political vehicle for the movement is the Parti Québécois, which has governed Quebec on multiple occasions. In 2012 it was elected to a minority government, in which its leader, Pauline Marois, became the first female Premier of Quebec.
There is some fairly compelling evidence that when cigarette prices go up, there is a slight decline in smoking, especially among teenagers. At the same time, though, if the price of cigarettes is raised because of an increase in the excise tax imposed on cigarettes, recorded sales of cigarettes drop off considerably. Sales decline much more than actual smoking declines. Here is what happens.
When one jurisdiction raises its excise tax on cigarettes, many people for whom arbitrage is inexpensive buy their cigarettes elsewhere --- in a neighbouring city or state. Failing that, if the price differential is sufficient to provide adequate rewards for transportation and risk, people will smuggle cigarettes from the low-tax jurisdictions to the higher-tax jurisdictions. Here is a graph of the effect, via the Tax Foundation:
To be honest, I expected the dots to fall closer to the line. The imprecision of the correlation should not, however, detract from the overall effect that "people respond to incentives." Higher excise taxes create an increased incentive for smuggling (and/or counterfeit tax stamps).
In Ontario we experience a variant of this relationship. When the provincial gubmnt raises the tax on cigarettes, more non-native smokers have an incentive to head to the reserves to buy their cigarettes, where cigarettes can often be found for sale at much lower prices because aboriginal Canadians are allowed to buy tobacco products tax free. [see this, for some details]
The result in all cases, though, is that the higher tax has less of an impact on smoking than would be indicated from legal sales, and the gubmnt policy has the effect of inducing more economic activity into black-market illegal activities.
|Blog | Josh Voorhees
The Army's Top Sexual Assault Lawyer Accused of Sexual Assault—at a Sexual Assault Legal Conference
Thursday, March 06, 2014, at 1:53 PM EST
|Future Tense | Tyler Lopez
U.K.’s “War on Porn” Leader Arrested on Allegations Related to Child Porn
Thursday, March 06, 2014, at 4:57 PM EST
All too often the bold statement "They have it; I want it," masquerades as some caring policy about the poor or as some general argument that no one deserves to be so well off when there are so many people in the world who are not at all well off. The continuing arguments about income inequality are a good example. Don Boudreaux nails it here:
Here’s my summery take on this issue: unless someone steals from you, you have no business fretting over how much money that person has relative to how much money you have. If you insist, absent any such thievery, on fretting over such a thing, you are deeply immature, excessively materialistic, and obnoxiously antisocial – and, thus, unworthy of having your opinions taken seriously by serious people. (Envy is an unsound basis not only for government policy but also for personal ethics.) And if someone did steal from you, then what you should fret about is that person’s thievery rather than about his or her monetary wealth relative to your own. After all, if the thief’s theft raised his or her income to a level more in line with your own, you surely wouldn’t shrug and excuse the thievery on the grounds that it helped to equalize incomes – and you’d be appalled if the police did such shrugging.
Don Boudreaux at Cafe Hayek writes,
...[I]t’s foolish in the extreme to suppose that politicians will create government agencies that will not be used politically. To assume that politicians can give birth to agencies (and regulations, and statutes) that are non-political makes no more sense than to assume that tigers can give birth to bunny rabbits. It might be a pleasant thought for those who fancy romance over realism, but it ain’t realistic.
No foolin'. Also, see this about how too many people are too quick to discuss market failures without discussing gubmnt failures.
The bigger the gubmnt budget, the greater is the incentive for various vested interests to use scarce resources for lobbying. This is doubly inefficient:
Lobbying is effective because people, including politicians, respond to incentives. But the problem is not lobbying per se. The problem is that big gubmnt, with its big budgets, creates more of an incentive for special interests to engage in lobbying. From this [via MA]:
For all intents and purposes, big government in Washington has created a niche market for insiders who learn the specialized skill of transferring money from those who earned it to those with political pull. It's the same across the Western world...
Washington is rich because government is big and the beneficiaries of this system are enjoying their status as America’s new gilded class. It’s even gotten to the point where children and other family members also put their hands in the cookie jar.
The column continues with numerous examples of how relatives of politicians are able to use their connections to enhance their own wealth.
The solution? Smaller gubmnt. That would reduce the payoffs to lobbying and hence reduce the extent of cronyism.
I don't know how they obtained the data necessary for this study, but the conclusions should not be surprising no matter how disappointing/disgusting they are. SEC employees have inside information, and apparently they use it to their advantage.
Goodbye SAC Capital. Hello SEC Capital.A new study released by Rajgopal of Emory and White of Georgia State confirms what most have long known: SEC employees are immaculate stock pickers and "that a hedge portfolio that goes long on SEC employees’ buys and short on SEC employees’ sells earns positive and economically significant abnormal returns of (i) about 4% per year for all securities in general; and (ii) about 8.5% in U.S. common stocks in particular." But those wily regulators are tricky indeed: instead of frontrunning good news and outperforming on the upside, the "abnormal returns stem not from the buys but from the sale of stock ahead of a decline in stock prices." In other words, in a market in which hedge funds have given up on shorting stock, the best outperformer is none other than the very entity that is supposed to regulate and root out illicit market activity!From the study's summary:We use a new data set obtained via a Freedom of Information Act request to investigate the trading strategies of the employees of the Securities and Exchange Commission (SEC). We find that a hedge portfolio that goes long on SEC employees’ buys and short on SEC employees’ sells earns positive and economically significant abnormal returns of (i) about 4% per year for all securities in general; and (ii) about 8.5% in U.S. common stocks in particular. The abnormal returns stem not from the buys but from the sale of stock ahead of a decline in stock prices. We find that at least some of these SEC employee trading profits are information based, as they tend to divest (i) in the run-up to SEC enforcement actions; and (ii) in the interim period between a corporate insider’s paper-based filing of the sale of restricted stock with the SEC and the appearance of the electronic record of such sale online on EDGAR. These results raise questions about potential rent seeking activities of the regulator’s employees.
No foolin'. Public-spirited gubmnt employees just getting a little for themselves while they do good.
For more details and a partial explanation, see this in WaPo.
I ran across this recently, but it had no attribution (with apologies to John Lennon).
Imagine there's no gubmentIt ain't easy but please tryNo 99% below usAbove us no gubment spyImagine all poor peopleLiving like ours do today...Imagine there's no politiciansIt isn't hard to doNothing to vote or Idle forAnd no redistribution tooImagine all the peopleBuying stuff in peace...You may say I'm a dreamerBut I'm not the only oneI hope someday you'll join usAnd the world will be out of many oneImagine no recessionsI wonder if you canNo need for rent or subsidyA brotherhood of manImagine all the peopleWandering all the world...You may say I'm a dreamerBut I'm not the only oneI hope someday you'll join usAnd the world will be out of many one
The demand curve for water is downward sloping. As the price rises, the quantity demanded declines. And yet water is consistently underpriced in many areas. From today's NYTIMES:
The punishing drought that has swept California is now threatening the state’s drinking water supply.
With no sign of rain, 17 rural communities providing water to 40,000 people are in danger of running out within 60 to 120 days. State officials said that the number was likely to rise in the months ahead after the State Water Project, the main municipal water distribution system, announced on Friday that it did not have enough water to supplement the dwindling supplies of local agencies that provide water to an additional 25 million people. It is first time the project has turned off its spigot in its 54-year history.
Blah, blah, blah, etc. etc. etc. They want to do more research into climate change. What a frickn waste: do more research into the economics of water. Raise the friggn price and watch the quantity demanded drop.
Oh, some people will be hurt when the price of water is raised? Yes, that happens. They have been benefiting from a price that has been held too low for far too long. Time to face reality.
I have long questioned gubmnt policies requiring the use of ethanol. They do little more than increase the demand for corn, driving up the incomes of corn farmers and driving up the price of corn for consumers all over the world. Furthermore, ethanol is downright harmful to the environment and possibly harmful to some internal combustion engines. From a recent entry at Snopes:
At the end of 2013, the EPA announced it was reducing the amount of ethanol that must be blended into gasoline in 2014 (in part because the overall demand for gasoline in the U.S. has dropped), requiring transportation fuel companies to blend 15.21 billiongallons of ethanol into the nation's fuel supply in 2014, down from 16.55 billion gallons in 2013. Critics of the EPA's blending requirements pointed out that the announcement came just four days after the Associated Press published a lengthy investigative article documenting substantial environmental harms caused by ethanol which concluded that "The ethanol era has proven far more damaging to the environment than politicians promised and much worse than government admits today":Ethanol mandates have spurred farmers to grow corn on relatively unproductive land that remained undeveloped prior to the mandate, the Associated Press observed.
“Five million acres of land set aside for conservation — more than Yellowstone, Everglades and Yosemite National Parks combined — have vanished on Obama's watch. Landowners filled in wetlands. They plowed into pristine prairies, releasing carbon dioxide that had been locked in the soil. Sprayers pumped out billions of pounds of fertilizer, some of which seeped into drinking water, contaminated rivers and worsened the huge dead zone in the Gulf of Mexico where marine life can't survive," the Associated Press reported.
“The consequences are so severe that environmentalists and many scientists have now rejected corn-based ethanol as bad environmental policy. But the Obama administration stands by it, highlighting its benefits to the farming industry rather than any negative impact."
But this next bit is what prompted this posting. Here is a photo from a collection sent me by Marc that shows a gas station selling gasoline with 10% corn alcohol back in the 1940s (?).
Who knew ethanol had been around for so long?
Air pollution in China's major cities is horrible, at times it is more than 25 times worse than what are deemed healthy standards [ht Jack].
The density of PM2.5 was about 350 to 500 micrograms Thursday midmorning, though the air started to clear in the afternoon. It had reached as high as 671 at 4 a.m. at a monitoring post at the U.S. Embassy in Beijing. That is about 26 times as high as the 25 micrograms considered safe by the World Health Organization, and was the highest reading since January 2013. ...
In the far northeastern city of Harbin, some monitoring sites reported PM 2.5 rates of up to 1,000 micrograms in October, when the winter heating season kicked off. In December, dirty air gripped the coastal city of Shanghai and its neighbouring provinces for days, with the density of PM 2.5 exceeding 600.
So why the subject line for this post? It comes from an answer Canada's Liberal leader, Justin Trudeau, gave when asked which country other than Canada he admires most:
You know, there’s a level of of admiration I actually have for China because their basic dictatorship is allowing them to actually turn their economy around on a dime and say ‘we need to go green fastest…we need to start investing in solar.’ I mean there is a flexibility that I know Stephen Harper must dream about of having a dictatorship that he can do everything he wanted that I find quite interesting.
Yup, forget about human freedom. Forget about human rights. He most admires a country where leaders can make and enforce quick decisions, even though the evidence, on the very grounds he admires, is that they suck at it.
Talk about hubris, arrogance, and elitist interventionism. And he will likely be Canada's next Prime Minister.
Some years ago, when I was explaining to a class of introductory economics students that a rise in the minimum wage would reduce the quantity demanded of unskilled labour, one student said, "But my sociology prof says this is wrong. He says it will still take the same number of people to flip burgers no matter what."
I pointed out that capital-labour substitution doesn't have to take place at a fast-food emporium. Instead, the rise in the minimum wage would make quick-frozen mass-produced meals in large grocery stores more attractive, leading to less demand for fast food from places like McDonald's or Burger King, ceteris paribus.
I also pointed out that technology, even in the fast-food industry, has changed with more capital substituting for labour. Increasingly food is being prepared in an industrial setting with large amounts of capital and substantial economies of scale. In economics jargon, the production function for fast-food is not fixed-co-efficients.
Robot hamburger factory makes 360 Gourmet Burgers every hour for gourmet burgers at fast food prices - meanwhile fast food human workers demonstrate for higher wages ...
It does everything employees can do except better:
* it slices toppings like tomatoes and pickles immediately before it places the slice onto your burger, giving you the freshest burger possible.
* their next revision will offer custom meat grinds for every single customer. Want a patty with 1/3 pork and 2/3 bison ground to order? No problem.
* Also, our next revision will use gourmet cooking techniques never before used in a fast food restaurant, giving the patty the perfect char but keeping in all the juices.
* it’s more consistent, more sanitary, and can produce ~360 hamburgers per hour.
The labor savings allow a restaurant to spend approximately twice as much on high quality ingredients and the gourmet cooking techniques make the ingredients taste that much better.
They will launch the first restaurant chain that profitably sells gourmet hamburgers at fast food prices.
Their current device can pay for itself in less than one year, making equipment sales a second path for Momentum Machines.
And for more details, see this [via Jabber]
By now almost everyone is aware of the 90-day McDonalds diet that John Cisna (a science teacher in Ankeny, Iowa) went on. For three months he ate EVERY meal at McDonalds: breakfast, lunch, and supper.
Unlike the schmuck who supersized everything in that obnoxious fake-umentary about McDonalds, Cisna tried to limit himself to having balanced, healthy meals.
Cisna attempted to stay within the dietary restrictions recommended by health professionals: fewer than 2,000 total calories per day, and allotted amounts for carbs, fat, protein and cholesterol.
The results were pretty much what you would expect:
He says he lost 37 pounds while on the all McDonald’s diet, and improved his overall cholesterol while also lowering his bad, or LDL, rate.
Ultimately, Cisna’s point seems to have been a larger one about self-control, and its role in the obesity epidemic.
“The point behind this documentary is, ‘Hey, it’s [a] choice,” he told KCCI. “We all have choices. It’s our choices that make us fat not McDonald’s.”
Granted, judging from the before-and-after photos, Cisna was quite overweight to start with. But this result and conclusion speak volumes about gubmnt intervention to control diets because of the obesity epidemic in North America. Attacks on big-name fast-food outlets are not the solution. Rather, letting people know that they are responsible for their own decisions and lives is crucial.
So, yes, if you supersize everything and ingest zillions of calories and carbs each day, you'll gain weight. Duh! And if you hold down the calories and carbs and make healthy selections, you'll lose weight. It should really come as no surprise.
I can't recall exactly why I wandered across the Wikipaedia entry for Coober Pedy, but I did. Here are the relevant parts for what I want to add:
Coober Pedy is a town in northern South Australia, 846 kilometres north of Adelaide on the Stuart Highway. According to the 2011 census, its population was 1,695 ...] The town is sometimes referred to as the "opal capital of the world" because of the quantity of precious opals that are mined there. Coober Pedy is renowned for its below-ground residences, called "dugouts", which are built due to the scorching daytime heat. ...
Opal was found in Coober Pedy on 1 February 1915; since then the town has been supplying most of the world's gem-quality opal. Coober Pedy today relies as much on tourism as the opal mining industry to provide the community with employment and sustainability. Coober Pedy has over 70 opal fields and is the largest opal mining area in the world.
Not that I don't completely believe that undergound/cave/cliffside homes are cooler. But if so, why are there so many in Coober Pedy? My impression is that there are many, many more such dwellings in Coober Pedy than there elsewhere.
A mining engineer in Australia explained to me that the reason is people are not allowed to dig, willy nilly for opals there. But if they dig for their homes/churches/long-drop toilet pits, etc., they are allowed to keep (or sell) all the opals they find. Much of the underground construction has just been opal mining by a different name. It probably would have been much more efficient to allow open pit mining.
There have been many cries from across the political spectrum, expressing concern that CEOs are paid so much. Here is something I wrote to my friends in the quartet about the disparity (note that it is well-hedged):
It doesn't apply in auto racing, nor does it apply in any occupation which has high entry costs.
Indeed I have written about tournament theory in the (distant) past:
Tournament theory does not explain everything about pay and motivation. The point I'm trying to make, though, is that wide pay disparities likely have somejustification and some grounds in promoting productivity.
From Ted Frank on Facebook:
So ACA, among other sins, screws up 16% of the economy, raises my taxes, raises my cost of insurance, wastes billions of taxpayer dollars with crony sweetheart deals, raises marginal tax rates on the middle class above 100%, disrupts the labor market by penalizing hiring full-time employees, and likely hurts global health progress at the margin by deterring the creation of new medical devices--and for all that we get *more* uninsured people, the supposed social problem requiring this monstrosity of a bill.
And the only reason the effects are this "small" is because the administration has lawlessly unilaterally amended the bill so that tens of millions of people won't get blindsided until after the 2014 elections. Wait until the multi-billion-dollar bailouts of insurance companies at taxpayer expense.
And as I said there, all my elistist-interventionist friends will now be saying we need MORE gubmnt to fix the mess. Argghhh.
Addendum: Ted added,
"Passing something is better than passing nothing, even if it makes things worse, because it shows we *care*" is a very bad way to structure public policy.
Even with the generous assumption that other countries' systems are superior (the UK experience shows that's not so), it's not a defense of *this* bad law to say that "We didn't have the votes to pass the law I would've preferred, so we agreed to a compromise Rube Goldberg scheme that is a total catastrophe."
Did anything good happen in 2013? Yes! There was one shining ray of hope in the person of Toronto Mayor Rob Ford , who admitted that, while in office, he smoked crack cocaine, but noted, by way of explanation, that this happened “probably in one of my drunken stupors.” This was probably the most honest statement emitted by any elected official this year, and we can only hope that more of our leaders follow Mayor Ford’s lead in 2014. (We mean being honest, not smoking crack in a drunken stupor.) (Although really, how much worse would that be?)
Maybe not eradication, but quite likely the strong incentives/requirements for ethanol use (and the ensuing clearing of land to raise more corn and soybeans) have seriously reduced the population of monarchs.
The number of monarchs that completed the largest and most arduous migration this fall, from the northern United States and Canada to a mountainside forest in Mexico, dropped precipitously, apparently to the lowest level yet recorded. In 2010 at the University of Northern Iowa, a summertime count in some 100 acres of prairie grasses and flowers turned up 176 monarchs; this year, there were 11. ...
[T]he greatest threat to the butterfly, most experts agree, is its dwindling habitat in the Midwest and the Great Plains, the vast expanse over which monarchs fly, breed new generations and die during migrations every spring and autumn. Simply put, they say, the flyway’s milkweed may no longer be abundant enough to support the clouds of monarchs of years past.
Soaring demand for corn, spurred by federal requirements that gasoline be laced with corn-based ethanol, has tripled prices in a decade and encouraged farmers to plant even in places once deemed worthless. Since 2007, farmers nationwide have taken more than 17,500 square miles of land out of federal conservation reserves, an Agriculture Department venture that pays growers modest sums to leave land fallow for wildlife. Iowa has lost a quarter of its reserve land; Kansas, nearly 30 percent; South Dakota, half.
Citing the above quoted piece that appeared in the NYTimes, Bjorn Lomborg writes on Facebook,
That's what you get for burning food in cars. [emphasis added]
In the US midwest, conversion from grasslands to corn and soybean fields have been so fast -- about 5-30% in just 5 years -- that the rates are “comparable to deforestation rates in Brazil, Malaysia and Indonesia.”
Dr. Jackson, a University of Northern Iowa biologist: “I can drive five hours east, five hours north, five hours south, five hours west and see nothing — nothing — but corn and soybeans.”
The ethanol programme is a shining example of the failure of gubmnt planning as policy makers capitulate to special interests [farmers and the owners of farm land] to the detriment of everyone else.
On Iran Deal, U.S. Lawmakers on Both Sides Question Administration - Anne Gearan (via the Daily Agenda)
More than two weeks after a landmark deal with Iran, House Republicans and Democrats called the Obama administration's approach to nuclear negotiations naive and signaled that they will slap more sanctions on the country. On Tuesday a bipartisan lineup of House lawmakers challenged Secretary of State John Kerry's assertion that punitive new trade measures would undermine fragile diplomacy with Iran's government.
The chairman of the Senate Banking Committee, Tim Johnson (D-S.D.), said Tuesday that he would hold off "for now" on advancing a bill to impose new sanctions on Iran, giving the White House some elbow room. Many in Congress believe that applying further pressure on the Iranian government is the only way to ensure Iran never develops nuclear weapons.
Kerry got no public support for the argument that the interim deal, or a potential final one, makes Israel and the world safer. He allowed that his dealings with Iranian officials leave doubts about whether they are willing to make the difficult concessions that a final deal would require. (Washington Post)
No foolin'. What took 'em so long??
When books are newly published (almost always in hardcover editions), the sticker prices are quite high. Some retailers, such as Walmart, Costco, Chapters, Barnes & Noble, and Amazon discount these titles heavily, sometimes as much as 30-40%. They do this not because they love consumers, and not because they love book readers, but because they expect doing so will increase their overall profits.
In the process, these deep discounts mean that smaller bookstores with smaller volume and higher per-unit costs find it difficult to compete. Slowly the smaller bookstores that specialized in customer browsing and knowledgeable staff are being competed out of business.
Some people find this form of creative destruction sad. Others see it as a spur to innovation and new forms of growth. But simply put, the smaller bookstores are being out-competed because they are inefficient compared with the large firms that offer mega discounts. In part they are being out-competed because they offer a service (browsing and knowledge -- see this) for which they cannot effectively charge a price. But in part they just do not have the sales volume required to cover such discounting.
The gubmnt of Quebec is trying to forestall the tide of competition by prohibiting deep discounts on newly published books.
Specifically, retailers — online, digital and traditional — would not be allowed to offer discounts to Quebecers greater than 10 per cent on new books for the first nine months of their release.
Their goal is to protect the less efficient smaller bookstores. The effect, however, is to reduce the quantity demanded of new books in Quebec bookstores, large or small.
Unless Quebec can somehow interfere with the mails, people in Quebec can and will order new books from elsewhere. Also, sales of ebooks cannot easily be limited or controlled. And, of course, many people will wait out the 9-month period of the price controls and buy the book for a lower price later.
How big might these substitution effects be?
I'm expecting that sales of new books in Quebec will fall by roughly 20% during the first year after this law is imposed. Most of that drop in sales will occur at the big-box stores, of course, but I really doubt that smaller bookstores will have a noticeable increase in their own sales. Rather than leave the big-box or online retailers for the smaller, protected, stores, people will either buy the books at the big-box stores anyway, shop online, or defer their purchases.
The result will be that fewer new books will be sold in Quebec, especially to price-conscious consumers/readers. This sounds like a law designed to protect inefficient businesses, but it will not help them much, if at all, and meanwhile it will hurt consumers.
The sitting and presiding mayor of London, Ontario, is under indictment already for other charges.
The CRA [Canada Revenue Agency] said the foundation had strayed from its charitable purpose and had become overly focused on issuing tax receipts. And an audit found $8 million raised for hungry school kids and to fight HIV/AIDS went into the pockets of Joe Fontana and fellow directors of the charity.
For more, see this.
The news keeps getting worser and worser:
A couple of weeks back, cancer patient Bill Elliot, in a defiant appearance on Fox News, discussed the cancelation of his insurance and what he intended to do about it. He’s now being audited.
Insurance agent C Steven Tucker, who quaintly insists that the whimsies of the hyper-regulatory bureaucracy do not trump your legal rights, saw the interview and reached out to Mr Elliot to help him. And he’s now being audited.
As the Instapundit likes to remind us, Barack Obama has “joked” publicly about siccing the IRS on his enemies. With all this coincidence about, we should be grateful the President is not (yet) doing prison-rape gags.
Meanwhile, IRS chief counsel William Wilkins, in his testimony to the House Oversight Committee over the agency’s systemic corruption, answers “I don’t recall” no fewer than 80 times. Try giving that answer to Wilkins’ colleagues and see where it gets you.
It was a classic example of the failure of central planning.
There was an abundance of hubris by the planners, who believed they could do better than markets (sound familiar?).
There was an abundance of predictable bureaucratic behaviour in response to incentives as subordinates padded the numbers to satisfy their superiors (and out of fear for their lives if they didn't meet optimistic production quotas).
There was an abundance of force used to make peasants go along with the massive centralization that occurred (sound familiar?)
There was an abundance of stupidity (sound familiar?) as, for example, bureaucrats confiscated peasants' cooking implements to melt them down to make steel.
And there was an abundance of death: executions, murders, starvation, and cannibalism. Somewhere between 20 million and 36 million people died because of Mao's "Great Leap Forward".
I have been saving this piece from the NYTimes for over a year. It is a painful summary of the death and devastation that occurred from 1958 - 62. Some of the Amazon reviewers claim the author of Tombstone, which is summarize in the NYTimes piece, is lying, but for the most part it seems well-regarded and factual.
THIRTY-SIX million people in China, including my uncle, who raised me like a father, starved to death between 1958 and 1962, during the man-made calamity known as the Great Famine. In thousands of cases, desperately hungry people resorted to cannibalism.
The toll was more than twice the number of fallen in World War I, and about six times the number of Ukrainians starved by Stalin in 1932-33 or the number of Jews murdered by Hitler during World War II.
The horrors of life after central planners' decisions went awry are well-documented in many countries. Bureaucrats falsify numbers, higher-ups believe someone is hiding something, and those at the top set impossible goals, wanting to believe the padded numbers and biased information provided to them and dismissing anything contrary (sound familiar?).
At the same time, the higher-ups suffer little. The granaries are well-guarded, and the centralized crop is used to generate foreign exchange to fund larger projects.
How can people write about the evils of capitalism when there are so many horror stories about the evils of centralization in the 20th century? How can people write about the evils of capitalism when we see the failures of central planning in Venezuela, North Korea, or even in otherwise well-functioning markets?
Here's how: As one of my friends says, “Every advocate of central planning always — always — envisions himself as the central planner.” This statement, known as Kip's Law, was first enunciated by Kip Esquire. Too bad he stopped blogging.
Sure, markets are not perfect. But we can look around and see how much better they are than centralization.
To read more about the tragedy in China, begin with the Wikipaedia entry "Great Leap Forward". It sets the death toll at between 18.5 and 42 million.
Scott Sumner at Money Illusion does some interesting comparisons of unemployment rates and the minimum wage for countries in Western Europe. Anyone want to collect the data to plot a scatter diagram? The section quoted below is all sort of an addendum to a different post, but is intriguing [ht Cafe Hayek]. I find it especially interesting that the Scandinavian countries have no minimum wage law. Here are his observations:
Regarding minimum wage,* here is some data for Western Europe:
There are nine countries with a minimum wage (Belgium, Netherlands, Britain, Ireland, France, Spain, Portugal, Greece, Luxembourg). Their unemployment rates range from 5.9% in Luxembourg to 27.6% in Greece. The median country is France with 11.1% unemployment.
There are nine countries with no minimum wage (Iceland, Norway, Sweden, Finland, Denmark, Austria, Germany, Italy, Switzerland.) Five of the nine have a lower unemployment rate than Luxembourg, the best of the other group. The median country is Iceland, with a 5.5% unemployment rate. The biggest country in Europe is Germany. No minimum wage and 5.2% unemployment.
Still want to raise our minimum wage to $10? Germany used to have really high unemployment. Then they did labor reforms to allow more low wage jobs, combined with subsidies for low wage workers. Now they don’t have high unemployment.
Still want to raise our minimum wage to $10?
You can easily say, "Yeah, yeah, but there are other things going on that aren't taken into consideration with a simple two-variable comparison." Okay, but how do they affect unemployment? Or are those things AND a high minimum wage functions of something else?
This is from a month ago, but I held onto it because it just flabbergasts me. It shouldn't, I know, but the hubris of interventionists seems to know no bounds.
Ormet Corp will immediately close its 270,000-tonne-per-year aluminum smelter in Hannibal, Ohio, a casualty of historically low metal prices and "uncontrollable" power costs, the company said on Friday.
The move follows a ruling on Wednesday by the Public Utilities Commission of Ohio (PUCO), which approved some major changes to Ormet's power contract with energy supplier American Electric Power Co Inc.
The state power regulator listed a number of conditions, including requiring the company, which filed for bankruptcy protection in February, to employ at least 650 full-time workers through 2018. [emphasis added]
Under those terms, costs would have increased by some $108 million next year, rather than falling by $54 million as outlined in Ormet's plan.
Due to the decision, Ormet cannot emerge from bankruptcy and must immediately shut down operations," Ormet said in a statement.
It isn't really clear, but as I read this news item from early October, it looks as if the Ohio Public Utilities Commission is telling the firm, "We will give you a low price for electricity, but only if you guarantee that you will hire more people than you otherwise would hire.
I find this approach disturbing on two counts:
That video revealed someone who is likely not beyond seeking revenge. I hope the person who took that video and then sold it to the TronoStar has some form of insulation and protection.