EclectEcon

Don't Blame US Consumption for the Oil Price Spike

Ironman, at Political Calculations, presents a graph showing,

In simpler words, we confirm that individual Americans are not consuming an ever-increasing amount of oil. We can therefore eliminate increased U.S. consumption of petroleum-based products as a significant contributor to the recent spike in the world price of oil.... As we see in the chart ..., the amount of finished petroleum products consumed by U.S. residents started at 2.572 gallons per day in February 2007 and peaked at 2.661 gallons per day in August 2007 before plunging to 2.443 gallons per day in March 2008.

To see his chart and his analysis, click here.

Will the U.S. Have a Recession? Dueling Forecasts

In March of this year, Ed Leamer predicted that the US would narrowly avoid a recession [link via Newmark's Door, still my first read each day]. This forecast clearly reflects updated information, given his discussion over two years earlier, in which he expressed dismay about the US housing bubble and forecast a recession.

But here are two very different forecasts (among the many) about whether the U.S. will have a recession during the next year or so.

• Ironman at Political Calculations posted a graph showing (according to his model) that the threat of a recession has passed.
• At the same time, Steven Pearlstein writes,

So much for that second-half rebound.

Truth be told, that was always more of a wish than a serious forecast, happy talk from the Fed and Wall Street desperate to get things back to normal. It ain't gonna happen.

Not this summer. Not this fall. Not even next winter.

This thing's going down, fast and hard. Corporate bankruptcies, bond defaults, bank failures, hedge fund meltdowns and 6 percent unemployment. We're caught in one of those vicious, downward spirals that, once it gets going, is very hard to pull out of.

Others, especially those at RGE Monitor, tend to share Pearlstein's view. I might, too, but they have been predicting this recession for quite some time. If they are right, how long will we have to wait for it???

Meanwhile, Ironman's model seems to have predicted reasonably well....

Global Warming

I am willing to be convinced that

1. Global Warming is occurring,
2. Global warming is the direct of human behaviour, and
3. Compared with feasible alternatives, it is most efficient for us to do something about it, likely via carbon taxes.

Yes, I could be convinced, perhaps. But every time I begin to think, "Well, maybe....", something like this drops into my mail box: [h/t to Judith]

Environmental extremists routinely assert a “scientific consensus” that global warming is occurring, and that human activity somehow causes it. This week, however, over 31,000 scientists spoke up and reduced that myth to a smoldering rubble.

The environmentalists’ alleged “scientific consensus” is much like the curtain in The Wizard of Oz, behind which the supposedly infallible wizard dictated to his minions. Beyond that curtain, however, the wizard was nothing more than an ordinary little man perpetrating a fraud upon those who worshipped his doctrine. And once Toto removed that curtain, the fraud was exposed for all to see.

Similarly, environmentalists’ mythical “scientific consensus” has served as a shroud behind which they have sought to maintain an air of infallibility. By falsely claiming a closed consensus and excoriating anyone who speaks out against their flawed orthodoxy, environmental extremists seek to prevent any objective, scientific debate that might inhibit their political agenda.

That shroud, however, was further torn this week by a 31,000-strong petition organized by the Oregon Institute of Science and Medicine (OISM). According to the OISM’s board of scientists, “a review of the research literature concerning the environmental consequences of increased levels of carbon dioxide leads to the conclusion that increases during the 20th Century have produced no deleterious effects upon global weather, climate, or temperature.”

To the contrary, the OISM notes that increases in atmospheric carbon dioxide have actually increased plant growth rates, among other positive effects. On this basis, the OISM concludes that “predictions of harmful climatic effects due to future increases in minor greenhouse gases like carbon dioxide are in error and do not conform to current experimental knowledge.”

My additional concern, even if global warming is occurring and even if it is caused by humans, is that

• Even if the EU, Canada, and the US impose carbon taxes, these taxes would have a minimal impact on global carbon emissions, given the rates of economic growth in the rest of the world, and
• it might be more efficient to build levees and dikes, if necessary, than to try to curtail carbon consumption.

Just call me a major skeptic.

Addendum: For more, see this at SCSU Scholars. And check out the Global Warming DoomsDay Called Off video from, surprisingly, the CBC.

Addendum #2: For more, see this about the decline in sunspot activity and possible global cooling. [h/t Newmark's Door].

Contrast This With Guantanamo and Water Boarding

The execution of two Afghanis by Islamists in Pakistan stands out in sharp contrast to western treatment of prisoners of war. As Powerline says,

In Pakistan today, just across the border from Afghanistan, Taliban goons got their hands on two Afghans who they claimed had collaborated in a Predator strike on a Taliban house across the border in Pakistan. It isn't clear from this news account whether the Taliban kidnapped the victims from Afghanistan. 

In any event, loudspeakers in mosques called the faithful to witness the brutality that was to follow. A crowd estimated at 5,000 or more assembled. The Afghans were dragged out of a car. ...

The crowd cheered "Allahu akbar," or "God is great." You can see how this would be a religious experience. The assassins then debated whether the second man should be decapitated, since he may not have been of age. One of the gunmen settled the issue by shooting him in the head.

I'm not sure whether these gentlemen are among those with whom Barack Obama wants to sit down and chat when he becomes President. I hope not. Wittgenstein once wrote something to the effect that if a lion could talk, we wouldn't be able to understand him. But I think Obama would have a better chance with the lion than the Taliban.

Free Tibet vs. Freeing Tibet

Alan Adamson quotes this brief section from Mark Steyn's controversial book, America Alone:

Everyone's for a free Tibet but nobody's for freeing Tibet. ... If Rumsfeld were to say, 'Free Tibet? Jiminy, what a swell idea! The Third Infantry Division goes in on Thursday,' the bumper sticker crowd would be aghast. They'd have to bend down and peel off the 'FREE TIBET' stickers and replace them with 'WAR IS NOT THE ANSWER'.'

Steyn is a very amusing writer. And, like Alan, I thank the recent Osgoode Hall law students who did so much to popularize his book in Canada.

Blog Migration to TypePad?

For various reasons, I have been considering moving this blog to a different site. If I do, I will explain more in the future. Meanwhile, I would appreciate feedback on this version of the blog, hosted at TypePad. How does it look? Is it easy to use? Etc.

Campaign Reform, Corruption, and Libertarians

Kip Esquire has a very thorough discussion of SCOTUS [the Supreme Court Of The United States] and campaign reform. After a lengthy discussion of the US Bill of Rights, especially the 1st Amendment on Freedom of Speech, Kip then explains why campaign reform is important and how libertarians have a valid point to be made on the topic:

Every campaign finance case is opportunity for libertarians to “stand above it all” and sigh with disappointment (disgust?). All sides in the debate seem to agree on one thing: The whole point of the exercise is to combat corruption in politics. Fair enough, and noble enough.

But it is the libertarians, and only the libertarians, who ask the precedent question of why we have so much corruption in politics. The answer is simple: Because government does so much that invites corruption, that caters to corruption and that perpetuates corruption. Things that have nothing to do with the core functions of government — the functions that the Framers did, and most people today do, associate with a free society. Things that are explicitly designed to benefit, not everyone equally or equitably, but some at the expense of others. From earmarks to tax breaks, from nanny statism to nanny subsidies, from oil wells to oil wars.

If the politicians didn’t do so much that they were never meant to do, then no one would try to buy them. That would be the best “campaign finance reform” of all.

Ms. Eclectic's Orchids

What is it about these things that makes them look so... erotic [Jack says "anatomical" but he's a retired socionomologist-physician, which probably explains his clinical perspective.]??

Let's hear it for macro lenses! BenS says,

You can raise orchids or kids.

Criticisms of US and EU Farm Policy

It is easy for economists to point out some of the flaws with US farm policy, but Carly Zubrzycki of the Adam Smith Institute Blog says it so well. Commenting on the latest US farm bill:

The most ironic thing about the bill is its provisions for both massive subsidies to American farmers and, a few pages later, its provisions for food aid to third world countries. There’s a brilliant, productive solution to global poverty if I’ve ever heard one: make it impossible for farmers in the third world to compete on a global market, then inefficiently deliver more expensive American food to save the day. With this sort of policy, all America (and the EU, which has strikingly similar policies) does is continue a cycle of dependency while subsidizing unprofitable enterprises within her own borders.

The sponsors of the bill, among other things, express concern about the cost of rising food prices for the poor. If the goal is lower food expenses for poor workers, then let’s stop taxing workers in cities to pay for subsidies to farmers and start importing food from the places where it can best and most economically be grown.

Richard Posner and Deirdre McCloskey deserve the next Nobel Prize in Economics

Please consider using these links if you are ordering from Amazon:    Amazon.com,   Amazon.ca,   Amazon.uk

Canadian Social Assistance:More Evidence That People Respond to Incentives

A recent study for the C.D. Howe Institute is called, "The Welfare Enigma: Explaining the Dramatic Decline in Canadians’ Use of Social Assistance, 1993–2005," by Ross Finnie and Ian Irvine. The title is misleading, though, for there is no enigma: welfare benefits were reduced, employment options improved, and the combination meant fewer people sought social assistance.

...the SA rate fell, from a peak of 3.1 million individuals in the early 1990s to 1.7 million in 2005.

In other words, as social assistance benefits fell, and as the opportunity costs of going on social assistance rose [eco-speak for saying that people had improved options, compared with going on welfare], surprise! Fewer people chose to go on social assistance. The importance of these empirical findings is to see that welfare is not an either-or thing; rather, adjusting the height of the social safety net plays a role in determining how many will avail themselves of the support provided by that net. And if we opt for a lower social safety net, fewer people will use it.

For further evidence along these same lines, see this by Tim Worstall at the Adam Smith Institute Blog.

Optimal Driving Speed

The other day, Ms. Eclectic asked me what the best speed is to drive. As a good economist, I replied the same way all economists respond to all questions.

It all depends.

I said that I thought fuel usage declined the slower you went (turns out that was seriously wrong) but that it would take longer to reach our destination, so there would be a trade-off between our spending for gasoline, the risks of accidents and injuries at different speeds, and how much we value our time en route versus our time in its next best use.

My friend, Steve, says he used to do about 110 kmh all the time on highways (with speed limits of only 80kmh), but about two years ago he decided to reduce the risks of accidents and reduce his use of gasoline. He now rarely, if ever, goes over 90 kmh.

Most of the time on the highway I drive at speeds between 85 and 95 kmh (which, for the metricly challenged, is between about 53 and 60 mph). It turns out this speed is also roughly in the optimal range for fuel economy according to this item at Econobrowser. Here is a graph from that posting plotting average fuel mileage against speed for a sample of automobiles.

"Thought-Showers" Instead of "Brainstorming"political correctness run amok

From News Quirkies in Ananova (via BenS and JM):

Council bans 'brainstorming'



A council has banned the term "brainstorming" - and replaced it with "thought showers".



Officials Tunbridge Wells Borough Council in Kent feared the phrase might offend epileptics or the mentally ill. ...



But Margaret Thomas, of the National Society for Epilepsy, said: "Brainstorming is a clear and descriptive phrase.



"Alternatives such as "thought shower" or "blue-sky thinking" are ambiguous to say the least.



"Any implication that the word "brainstorming" is offensive to epileptics takes political correctness too far."



And Richard Colwill, of mental health charity SANE, agreed: "This ban goes too far. Few would be genuinely offended by the word "brainstorming" in the context of council meetings."



A council spokesman said: "We take diversity awareness very seriously. The majority of staff have taken part in training and been asked to use the term "thought showers"."

Recession Outlook

For the past two or three years, Nouriel Roubini has been forecasting a recession. In the latest newsletter from RGE Monitor, this forecast is explained in more detail:

More likely than not, the U.S. will experience a recession. The housing recession and credit crisis are ongoing and their consequences are likely to be felt for quite some time – both in the U.S. and world wide. The U.S. housing sector does not look to be approaching a bottom quite yet. On the supply side, housing starts are down 57% from their peak, but on the demand side sales of new homes are down a whopping 62%. This certainly does not bode well for inventory absorption and keeps putting downward pressure on home prices – the S&P Case-Shiller indices that came out yesterday speak for themselves. And together with home prices, the wealth of the U.S. consumer – the engine of a U.S. economy that relies on consumption (72% pf GDP) like no other economy in the world – is estimated to have fallen by almost $2 trillion in Q1 2008 and is bound to fall further. If tax refunds and rebates are trying to hold up the mood of the U.S. consumer – whose confidence is dropping – energy and food prices are pushing the other way. And employment figures are contributing further to the dismal of the U.S. consumer. The big shock in the latest employment report was a spike in the unemployment rate to 5.5% from 5.0%, one of the biggest monthly rises on record, and the next employment report could mark the seventh consecutive monthly decline for payrolls and the sixth for overall jobs.



Canada’s GDP actually contracted by 0.3% y/y in Q1 on plunging inventory and residential investment, disappointing those that hoped it would decouple from its Southern neighbor which absorbs 75% of its exports. U.S. weakness, elevated credit costs, and a strong Canadian dollar are offsetting strong commodity exports and buoyant domestic demand. Yet, some economists suggest that real GDP strips out the very income gains that have increased Canadians wealth from its sustained terms of trade rise. With the Canadian dollar’s disinflationary power fading, the Bank of Canada may have ended its aggressive easing and there is little room for more fiscal stimulus. Lackluster growth looks likely for the rest of the year. See “Canada Recoupling With a Vengeance?” and Rachel Ziemba’s “Why Is Canada Growing Slower Than the U.S.?”

Note: not all the links were copied from the original. PowerBlogs does not copy links automatically, requiring each link to be copied manually, which is one of the reasons I am considering moving to a different blogging service.

China's Support for Free Markets and Deregulation

"What can we do," the Syrian Finance minister asked, "to increase Chinese investment?" "Well," the Chinese minister replied, "before we invest in Syria you most open your markets, cut your subsidies, and reduce regulation..."

This quotation is from Alex Tabarrok at Marginal Revolution, still one of my first reads each day.

Argentina: From Breadbasket to Basket Case

The WSJ-Online has a good summary item on how and why Argentina devolved into a country which failed to develop its growth potential because of its abrogation of so many freedoms [subscription, but available for a few days for non-subscribers; h/t to Eva].

As the [US] presidential campaign drones on, Barack Obama and the Democrats are fleshing out the promise of "change" with some specific, big-government policy proposals. Many are familiar, perhaps because they already have been tried – in Argentina.



That country has gone from South American breadbasket to world-class basket case. ...



The [Argentine] constitution once held limited government and private property to be among the highest ideals of the land. But in the 1920s these protections, which had made the country a magnet for immigrants and the seventh-largest economy in the world, began to erode.



An early example of this assault on liberty was when Congress imposed a rent freeze to deal with a housing shortage after World War I. This only exacerbated the problem, and in 1922 a politicized Supreme Court widened state powers to allow the regulation of rents. That decision put property-rights protection on a slippery slope. A decade later the Court gave the legislature the power to regulate interest rates.



The interventions didn't end there, and as state control of the economy expanded and the nation grew poorer, the country could not recover its footing. Economic populism and labor militancy took hold; protectionism blossomed and Argentina became a welfare state. Meanwhile, the informal economy swelled under the high cost of legality.



Fiscal crises have been recurring. According to a paper recently released by researchers at the Buenos Aires business school Eseade, external debt as a percentage of GDP has now climbed to 56% compared to 54% in 2001. If you include the unpaid debt to bondholders, the number is 67%. More than a few analysts are worried that should the economy slow, the government may tap Central Bank reserves, sparking a run against the peso or, fearing that, choose default, for the second time in a decade, as its escape hatch.



Will that mean an end to ballooning entitlements, class warfare, hostility toward producers, capital and private property, protectionism and subsidized central-planning? Unlikely.



Americans reading that laundry list may note that it sounds a lot like the mindset of the left wing that will dominate the Democratic Party's convention and choose Barack Obama as its candidate in August. From nationalized health care and government-owned refineries to punishing taxes on the rich, Argentina has been there, done that. There are good reasons to find the resemblance disturbing.

Addendum: After I wrote/quoted the above, I saw that Don Boudreax quoted precisely the same passage. Be sure to see his additional comments at Cafe Hayek.

Victoria's Secret: Strict Liability vs. Negligence in TortsWas This An Efficient Accident?

From Fox News (via Jack):

A Los Angeles woman claims she was injured by her Victoria's Secret thong, prompting her to sue the underwear manufacturer.



The plaintiff in the case, Macrida Patterson, 52, attributed the May 2007 injury to a Victoria's Secret "low-rise v-string," according to a court document posted on The Smoking Gun.



Patterson's lawyer told The Smoking Gun that a "design problem" caused a decorative metallic piece on the underwear to fly up and hit Patterson in the eye while she was putting the underwear on.

What's the more efficient standard for tort law in cases like this, strict liability or negligence? Or does it matter?



The traditional law & economics answer is to select the regime which will induce the risks to be born by the least-cost bearer of the risk.

1. Perhaps this was an efficient accident, i.e., it was an accident that it would cost more to prevent than the expected costs resulting from the accident. Of course to truly assess the efficiency of the accident, one must consider the dot product of (a) the vector of all possible probabilties of accidents and (b) the vector of costs of those accidents, should they materialize.
2. If it was not an efficient accident, Victoria's Secret was negligent. To promote economic efficiency, they should be held liable. And if they are held strictly liable (they must pay compensation, even if they were not negligent), they will tend to prevent only those accidents which are inefficient, but choose to pay compensation for those that are efficient.
3. If it was an efficient accident, who is the least-cost bearer of the risk: customers or the firm? We seem, increasingly, to assign this risk to large firms, not because they are any better insurers than consumers, but because they have more money. The result is that such cases are decided more on distributional than efficiency criteria.

How Effective Was the Surge in Iraq?

Pretty effective. Lavendar is pre-surge; maroon is post-surge.

Civilian Casualties in Iraq





US Military Casualties in Iraq

Source and comments.

Did Steve Levitt Abuse His Role as Editor of the Journal of Political Economy

It would not surprise me to learn that he did, but check this out to see what you think. Here is a lengthy excerpt:

It looked like a routine decision that Steven Levitt had to make. The co-editor of the "Journal of Political Economy" (JPE), who is most renowned for his bestseller "Freakonomics", had to accept or reject a comment written by the Dallas-economist Stan Liebowitz on an article which had been published in the JPE.



Perhaps Levitt should have simply used his far-reaching powers as editor and reject the comment without much ado. He did not do this, He did something instead, which could potentially taint his own good reputation and the reputation of the JPE, and which exemplifies the relatively lax procedural standards at top-flight economics journals.



On closer look, everything about the case was unusual. The comment was phrased very strongly. It was a thinly veiled assertion of data-manipulation. This is quite remarkable, given that the JPE, edited at the University of Chicago where Professor Levitt teaches, is one of the top five economics journals globally.



The subject of the criticised article was a hot topic. The authors, Felix Oberholzer-Gee (Harvard) and Koleman Strumpf (University of Kansas), claimed to prove that file-sharing websites on the internet have not been responsible for the sharp decline in music sales since the turn of the millennium. Music labels might disagree. They have been busy suing file-sharing sites and their users for copyright infringement.



Professor Liebowitz disagreed strongly He had told Stephen much in a letter even before the article was published in the JPE. Liebowitz had pointed to what he considered numerous mistakes and inconsistencies in the paper and complained that the authors would not share their data for replication purposes. Levitt had forwarded the letter to the authors of the study, but had published the study more or less as submitted.



Ignoring Liebowitz was not possible any more, however, after he submitted his counter-study officially as a comment to the JPE in September 2007. Levitt started by asking one of the authors, Koleman Strumpf, for his opinion. Strumpf handed in his reply in November. He defends the study and retaliates by pointing to alleged mistakes in Liebowitz' comment.



In addition, Levitt asked for a report from an impartial referee. The referee recommends publishing the comment in order to "save subsequent researchers from building on a flawed research foundation." While he advises Liebowitz to rephrase his comment such that it would not contain any overt assertions of data manipulation he sides with him on almost all the critical points and comes to a damming conclusion regarding the file-sharing article: "I would suggest that the authors? conclusions are not warranted given the analysis and evidence that they provide."



However, Levitt is not inclined to publish the comment. He anonymizes the reply by Strumpf and uses it as a second referee-report on which he bases his rejection of Liebowitz' comment. "There is no doubt you raise some reasonable points. Nonetheless, I think the negative referee (negative toward the comment, N.H.) is correct in most of what he says", Levitt writes to Liebowitz. The only point he takes up from the impartial referee is the advice to moderate the tone, should Liebowitz wish to submit the comment to some other, lesser journal.

There's much more at the reference site. Read the whole thing for the source's interviews with Levitt, et al.



The Liebowitz paper is available on SSRN for your own perusal. You decide.



This incident, plus the Lott v. Levitt defamation case, might almost lead one to think that Professor Levitt harbours some animosity toward UCLA-trained economists or something.

Role Reversal in Sports Economics

Typically a sports franchise says to everyone, "Look at all the economic benefits we can confer upon your fine city." But in Seattle the Sonics are calling sports economists to testify that they conferred NO benefits on Seattle! For a good summary of the testimony by two of the economists involved by Dennis Coates, see this at The Sports Economist.



And for some of my earlier work in this field, showing similar results see this.

Why Is Increased Home Ownership a Desirable Policy Goal?

It perplexed me when President Bush II enunciated a goal of increased home ownership in the US. It has always perplexed me that the US has mortgage interest deductibility in its income tax code. I can readily imagine that the vested interest group of current house owners would shriek in pain if the US were to reduce or restrict its policies which tend to increase the demand for housing. Despite myself, I cannot help but agree with Paul Krugman,

[H]ere’s a question rarely asked, at least in Washington: Why should ever-increasing homeownership be a policy goal? How many people should own homes, anyway?...



In fact, given the way U.S. policy favors owning over renting, you can make a good case that America already has too many homeowners....



All I’m suggesting is that we drop the obsession with ownership, and try to level the playing field that, at the moment, is hugely tilted against renting.



And while we’re at it, let’s try to open our minds to the possibility that those who choose to rent rather than buy can still share in the American dream — and still have a stake in the nation’s future.

Can you imagine the screams of pain, especially among people who own larger, more expensive homes with large mortgages, if the US were to scrap mortgage-interest deductibility? Can you imagine a politician being elected who promised to inflict such pain on this group? Me neither.

What If Israel Attacked Iran?

Dani Yatom, a member of the Israeli parliament, the Knesset, was invited to attend a NATO conference in Brussels last year. While reviewing the agenda, Yatom, a retired major general, was surprised to see that the meeting was titled “The Iranian Challenge” and not “The Iranian Threat.”

When a speaker with a French accent mentioned that a US military strike against Iranian nuclear facilities would be the most dangerous scenario of all, Yatom said, politely but firmly: “Sir, you are wrong. The worst scenario would be if Iran acquired an atom bomb.”

Given this position, Nouriel Roubini considers what might be the effects if Israel were to attack Iran:

First, even before Iran may try to retaliate to this action by trying to block the flow of oil from the Gulf, oil prices would spike above $200 dollar a barrel.

Second, Iran could react militarily to such Israeli action (that would be taken with the tacit support and the military logistic support of the US) by unleashing its supporters in Iraq against the US military forces there. That would trigger a military reaction by the US that would start a sustained air-led bombing campaign against Iran’s military capabilities (air force, anti-aircraft defenses, radar and other military installations, etc.)

Third, Iran would unleash its supporters in Lebanon and Gaza (Hezbollah and Hamas) in a military confrontation with Israel. A broader war will follow in the Middle East.

Fourth, Iran would use both the threat of blocking the flow of oil out of the Gulf and an actual sharp reduction of its exports of oil (an embargo) to spike the price of oil. Oil prices would rapidly rise above $200 per barrel and the US and global economy would spin into a severe stagflationary recession (like those triggered by the sharp spikes in the prices of oil following the staflationary shocks of the Yom Kippur war in 1973, the Iranian revolution in 1979 and the Iraqi invasion of Kuwait in 1990).

Fifth, while Sunni regimes may – in private – sigh relief following the destruction of the nuclear capabilities of the Shiite Iranian regime – the Sunni Arab street (the masses of poor Sunnis) from Algeria to Egypt and all the way to Pakistan, India and Indonesia may become even more anti-Western and anti-American leading to the risk over time of rise of anti-Western fundamentalist regimes in many Arab countries.

Sixth, the Bush administration whose hands have been tied by the new National Intelligence Estimate (that argued that Iran had suspended its program of development of nuclear weapons) would thus be able to strike Iran – via Israel - before the end of its term. Such October surprise by Israel would also certainly lead to the election of McCain and defeat of Obama as a national security crisis of such an extent would doom the chances of Democrats to win the White House. So both Israel – that prefers McCain to Obama and is hurried to act as it is wary of the constraints that an Obama presidency may put on its ability to act against Iran – and the Bush administration would guarantee the election of McCain.

Canadian Marsupials;Human Rights Tribunals and Kangaroo Courts

From John Leo in the NRO [h/t to Eva]:

The human-rights tribunals are a censor’s dream. Under Canada’s human-rights act, commissioners can convict if they believe any published material is “likely to expose a person or persons to hatred or contempt.” Since they are “remedial” institutions and not real courts, they need not follow strict legal procedures or grant traditional rights of the accused. No one goes to prison, but the panels can fine and silence people at will — and run up the lawyer bills for years. Truth is no defense, and commissioners are authorized to confiscate a computer without a warrant. Evidence can be woefully flimsy. ...



The kangaroo courts — a national one, plus one in each province — have been under fire for months, mostly because of the Mark Steyn case. In 2006, Maclean’s magazine ran an excerpt from Steyn’s book, America Alone, warning of Islam’s threat to the West. Steyn predicted that Muslims would become a “successor population” in Europe because of their high birth rate. Three of the human-rights commissions pounced. The British Columbia panel completed a five-day hearing but has not yet released a ruling. The Ontario panel dropped the case, saying it lacked jurisdiction over printed material. The federal human-rights commission is still investigating.



Steyn and Maclean’s have churned up a good deal of controversy. Canada’s largest newspaper, the Toronto Star, ran a June 16 editorial under the headline, “Curb Bigoted Acts Not Free Speech.” It said that calls for reform, including a few in parliament, “reflect growing unease that an unwarranted chill is being cast on free speech.” ...



Having shown little concern about the national anti-free-speech apparatus for years, the Canadian public is beginning to notice.

Hezbollah and Counter-Insurgency:Did Canada Blow It?

From Stratfor:

Reports from Canada say Hezbollah operatives have been detected conducting surveillance on Jewish targets in Toronto, including schools and synagogues. U.S. sources have confirmed increased Hezbollah activity as well. Intriguingly, the reports specifically said the men conducting the surveillance were Hezbollah members, not just men of Middle Eastern appearance. That either indicates a deep penetration of Hezbollah in Canada — the Canadians knew the political affiliation of the men — or psychological warfare against Hezbollah, an attempt to let the group know the Canadians are on to them. If this is a Hezbollah operation, the Canadians just told them they were busted.

Why announce it? To deter Hezbollah from attacking Jewish sites? To say, "We're watching you, and we will stop you before you succeed?" To reassure the voters that the Canadian spy agency really is effective?



But at the same time, won't this also tell Hezbollah that they need to improve and rethink their terrorism projects?

How Do Map Indices and Guides Work in Mexico City?

Quoted by Tyler Cowen at Marginal Revolution,

Apart from the obvious problems of traffic and transportation, the growth created other confusing complications. Today, out of the city's eighty-five thousand streets, there are about eight hundred fifty called Juárez, seven hundred fifty named Hidalgo, and seven hundred known as Morelos. Two hundred are called 16 de Septiembre, while a hundred more are called 16 de Septiembre Avenue, Alley, Mews, or Extension. Nine separate neighborhoods are called La Palma, four are called Las Palmas, and there are numerous mutations: La Palmita, Las Palmitas, Palmas Inn, La Palmas Condominio, Palmas Avenida, La Palma I y Palma I-II Unidad Habitacional.

So suppose you look up Juárez on a street index. Which of the 850 streets named Juárez will the index show? Or will it list all 850?

South Park Episodes On-Line

Many years ago, I watched South Park once or twice with my younger son, Adam Smith Palmer. I hated it. But if you like it, you might want to follow this link to find all the back episodes online.

No, the SUV is NOT Dead

A recent article in Popular Mechanics says [h/t to Instapundit],

Sorry, folks, but the SUV is dead ...

Sorry, Pop-Mech, but it isn't.



After having spent the springs of 2006 - 07 in England, where the price of gasoline/petrol was then the equivalent of about $2/litre or very roughly $8/gallon, I could see that even at those prices, many people still bought and ran the big gas guzzlers. Probably not as many, proportionally, as in North America during that same time, but there were still lots of them.



So even if the price of gasoline in the US reaches $5 or $6, the SUV is not dead.... at least not if the market is allowed to work. Some people will still want to use their income to buy and feed the big SUVs.



But watch for the elitist interventionist enviro-nazis to try to ban SUVs as being socially irresponsible. Those folks will never understand, much less accept, the possible benefits of a Pigou tax on gasoline, should such a tax be appropriate.

Promoting Off-shore Oil Drilling Will Be Good for the Environment

Tom Hanna argues quite convincingly that those who oppose opening up more off-shore oil drilling are really elitists who don't want their views "spoiled" and who really don't give two hoots about the environment:

We can let oil companies drill here, where they'll be expected to keep it clean and be proactive to prevent problems, or we can import more oil from Nigeria, which «has one of the worst environmental records in the world. In recent years, the country has seen the execution of a Nobel Peace Prize nominee, widespread social and environmental problems stemming from oil operations in the Niger River delta, and the world's highest deforestation rate.



We can have a few more oil rigs breaking the clean blue line of the Hollywood horizon or we can help finance the Russian exploration of the Arctic, leaving the Arctic Ocean to the devices of the country that «succeeded in wiping from the map almost an entire sea - the Aral, now largely a toxic desert - and turning the world's deepest freshwater lake, Baikal, into a borscht of cadmium and mercury deposits.» How do you think those Alaskan lichens will fare if the Russians repeat their recent history?



And, by the way, aren't our neighbors to the North a socialist paradise that can do no wrong? Yet, they also seem to be expanding oil production as fast as humanly possible - and selling it to us. If oil production is so bad for the environment, why are the sainted Canadians doing it and why isn't Barack Obama demanding they stop?

Let me add a question: Which is worse for the environment, off-shore drilling or converting Alberta tar sands into refineable crude?

Oil Companies Cannot Just Pass the Increase on to Consumers;Expectations and Elasticities

When crude oil prices rise, gasoline prices rise, too. But not all the cost increase can be passed on to consumers. At least not without affecting the quantity of gasoline that people buy.

• When prices rise, the quantity demanded falls. Demand curves are downward-sloping. This is the "law of demand".



• People respond to incentives.

The oil companies can try to pass on the cost increases, but they cannot make consumers buy as much gasoline as they did before. My point is that gasoline is not a necessity. When it becomes more costly to use gasoline, people find substitutes, and they actually tend to do so fairly quickly, especially if they expect the price increases to persist.

• They buy smaller cars.
• If they have two cars, they begin to use the smaller car more often.
• They bicycle more.
• They walk more.
• They make greater use of public transportation.
• They take fewer trips.
• They make shorter trips.
• They move closer to work or closer to public transportation connections.

And all these things that economists have been saying for decades have been confirmed. From the USA Today,

Americans drove 30 billion fewer miles from November through April than during the same period in 2006-07, the biggest such drop since the Iranian revolution led to gasoline supply shortages in 1979-80.



The numbers released Wednesday may reflect more than a temporary attitude change in consumers toward high gas prices, Transportation Secretary Mary Peters said. Previously, she said, "people might change their pattern for a short period of time, but it almost always bounced back very quickly. We're not seeing that now."



... "It's not a blip," said Marilyn Brown, professor of energy policy at Georgia Tech, citing data showing surging transit ridership, dropping sales of sport-utility vehicles and sharply increased demand for gas-efficient vehicles. "I think the difference between now and 1979, when prices were comparable when you adjust for inflation, is there's a sense of sustained pain. There's a sense that the era of cheap energy is a thing of the past."

Clearly an important determinant of the price elasticity of demand for gasoline is the expectation that people have about future prices. If rising prices create an expectation that prices will soon fall back to their previous levels, and if it is costly to change consumption patterns, then the price elasticity of demand will be quite low. But if rising prices create an expectation that prices will remain higher and will likely even rise some more, then people will begin to undertake the costly changes in their consumption patterns.



After Katrina, gasoline prices were about as high where I live as they are now. But back then, we all expected the high prices were a temporary blip, and so we did not alter our consumption patterns very much. But this time, when people expect gasoline prices to remain high, people are changing their consumption patterns.



Addendum: Quite clearly, this difference in expectations helps to explain the higher short-term price elasticities from 1976-1980 than from 2001-2006. See this from former student, Paul Kedroski.

Knaves and Fools;Communists and Christians

Eva sent me this link to hundreds of jokes about communism. One of my favourites from the collection is this:

Q. What's the difference between a Christian and a Communist?



A. A Christian believes what's mine is yours, a Communist what's yours is mine