Now that it looks like the Liberals have a chance…
Stephane Dion states that “Stephen Harper squandered the surplus on.” Then he goes on to insert either tax cuts, innovation spending, the GST or whatever is appropriate for the moment. This leaves me to ask, what exactly would Dion do with the surplus’ which, if I may remind him, come from you and I, and not some magic place. There is no macro economic plan I know of which proposes government keep surpluses accruing over years. Wait, actually there is a plan, its’ one where a dictator puts all that money in his Swiss Bank Account, but I digress. Even companies will invest profits or provide dividends while keeping a small amount to use as a contingency plan - something Paul Martin borrowed from the business world. So what did Harper do with the cash? Three billion spent on the military, which even the outgoing Liberals were planning on doing to refurbish a dying Canadian institution. Four billion spent on Health Care, on which has actually resulted in a reduction in waiting lists according to surgeons I have spoken with (we’ll see the big numbers). Six billion was used to lower the GST, while not the favorite of Economists, Harper was correct in stating that this is a regressive tax which harms the poor more than the rich - something every Economist knows, but the media won’t report (Harper has done more for the poor than the Liberals in 10 years so far).
So what would the Liberals have done? Probably nearly the same thing if in that situation. Or do they suggest not spending on Health Care or the desperate military, which was launched into Afghanistan by the Liberals in the first place?
What depresses me the most is not that Dion can say these things, in fact its what every opposition member would do. It is that the Mainstream Media isn’t all over Dion about this every time he opens his pie hole. Why don’t they ask about the Health Care spending, like “Hey Dion would you not have spent on Health Care, old boy?” There is a bias.
I think it is time to review these articles on the Green Shift, and how it will not reduce emissions but is likely to increase emissions, and moreover how even Jack Mintz, the Economist who helped write the plan, thinks it isn’t necessarily going to work.
Secondly let’s consider the NDP’s plan to increase corporate taxes. During a time when it is even more necessary to reduce taxes to make us more competitive against other leading countries (Stephen Harper plans to reduce our corporate taxes to the lowest in the G-7), Jack Layton wants to raise them. The OECD summarized the findings of the harmful effects of corporate taxes which I describe briefly in this article. In an open economy, Layton will only succeed in helping the blue collar workers lose their jobs. Right now Canada is rated to lead the G-7 in growth, albeit slow growth.
Yes, many economists describe a Keynsian style system of government spending through recessions, but Harper is correct in saying that once you go down that path it is hard to come back. Keynsianism is easy to understand, and lefties like that, but Robert Lucas and Milton Freidman have rightly critisized it and many have pointed out its failures. As both an economist and a politician I think he has good insight into the problems of Keynsian economics, what do you fund? Who gets funding? Are you picking winners and losers? Once a subsidy is given, it is not easy to take it away. Are you pouring money down the drain? Will the public go for it? It is easy as an economist to describe the best methods of targeted subsidies, but the public is as likely not to agree! You are constrained by public foolishness and corporate greed or seeking legalized monopoly establishment. Soon I will describe the critical paper that demonstrated government action extended the Great Depression.
Its not really useful if you read these, get your lefty friends to read the evidence. Or let them know the evidence. They believe in fairy tales.
An interesting tidbit in the Prime Minister’s discussion with Amanda Lang at Business News Network regarding the direction he is taking with Canada’s economy . He plans to reduce federal and corporate business taxes to the lowest level in the G-7 by 2010. (It is worth watching this interview as opposed to the stupidity of the usual media, ie: CTV, when it comes to discussing economics, this is a refreshing discussion).
Reduction in corporate taxes has proven overall benefits, and something Canada could learn from the Nordic countries like Sweden, Finland, Denmark etc. Canada has been making steady progress over the last several years in the right direction and we are reaping the benefits of it in terms of stability. In a large part this is due to the work of the Reform party, giving the Liberals no real stress in regards to doing what they inherently know is correct. Imagine if the NDP was the official opposition during the deficit crisis.
A recent OECD article discusses the evidence for lower taxes equating to higher economic growth. In particular corporate taxes:
Increases in productivity: A second option is to reform corporate taxes, as they influence productivity in several ways. Evidence in this study suggests that lowering statutory corporate tax rates can lead to particularly large productivity gains in firms that are dynamic and profitable, i.e. those that can make the largest contribution to GDP growth. It also appears that corporate taxes adversely influence productivity in all firms except in young and small firms since these firms are often not very profitable. One possible implication is that tax exemptions or reduced statutory corporate tax rates for small firms might be much less effective in raising productivity than a generalised reduction in the overall statutory corporate tax rate. This reduction could be financed by scaling down exemptions granted on firm size as they may only waste resources without any substantial positive growth effects.
Investment: Corporate income taxes appear to have a particularly negative impact on GDP per capita. This is consistent with the previously reviewed evidence and empirical findings that lowering corporate taxes raises Total Factor Productivity (TFP) growth and investment. Reducing the corporate tax rate also appears to be particularly beneficial for TFP growth of the most dynamic and innovative firms.
I supposed I should have known more about his economic goal, but it has been flying under the radar for some time, except that is, those times it has raised the ire of Premier McGuinty who cannot comprehend such economic logic. However the Conservative Party of Canada (CPC) is horrible when it comes to getting its message across. While they bear a considerable amount of blame, much can also be attributed to the Mainstream Media which is relentless in its mission to frame the CPC in as bad light as possible. The MSM still has not explained that a reduction in the GST benefits poor people.
(When the Pharisees objected to Jesus’ meeting with tax collectors rather than the righteous, Jesus replied that it was the sick who need a physician, not the healthy (Matthew 9:9–13) )
Can anyone honestly imagine any other party leader in this race saying anything this intelligent? Dion? I don’t even expect Ignatieff or Rae to say anything this intelligent. They might be able to make it up, but I would doubt the understanding beneath it all.
I’ve always been impressed with this guy. Not many others, I’m no syncophant.
Stay tuned. Sunday night I plan to show how the Green Shift increases the use of greenhouse gasses. Using economic evidence published in real peer reviewed journals of course.
The English language is one of connotation, and some words like “stupid” should be applied carefully, but when warranted, applied definitively. What Dan Gardner tries to imply in this recent article is that Stephen Harper is stupid, even though he has a degree in Economics, by flogging him with an interview with the renouned Economist, Dr. Greg Mankiw.
Stupid is defined by Websters as acting in an unintelligent or careless manner, or lacking intelligence or reason.
As the old adage suggests, “While leaving the house to call someone stupid, be sure you don’t bang your head into a mirror along the way.”
The MSM is as Stupid as it is Vain
I’m sure no one in this country has missed out on the Liberal Party’s proposed carbon tax, the Green Shift™. While Stephane Dion has been unable to even pronounce it in English, let alone explain it, the mainstream media has done a bang on job of praising this thing whenever or however it can. Still I have yet to hear on the news a basic Economics discussion of the subject, and I have yet to hear from any published peer reviewed literature as well. So when the mainstream media fails us, like it usually does it is time to turn to the blogosphere. And so we being The Green Shift - The Economics Lesson - in Basic for Dan Gardner™. Oh and we’ll include some peer reviewed journal articles as well.
The basic principle of the Green Shift is that by increasing a tax one artificially increases the cost of carbon producing substances or greenhouse gas substances (GGS) so that people consider purchasing substitute goods instead thus lowering the release of greenhouse gasses. Moreover by reducing people’s income taxes by replacing it with the increased tax revenue from GGS one avoids harming people along the way, or causing the much dreaded stagflation. It is worth pausing here, for those of you unfamiliar with economics, in order to read the wikipedia definition of stagflation and note in particular that :
First, stagflation can result when an economy is slowed by an unfavorable supply shock, such as an increase in the price of oil in an oil importing country, which tends to raise prices at the same time that it slows the economy by making production less profitable.[5][6][7] This type of stagflation presents a policy dilemma because most actions to assist with fighting inflation worsen economic stagnation and vice versa. Second, both stagnation and inflation can result from inappropriate macroeconomic policies. For example, central banks can cause inflation by permitting excessive growth of the money supply,[8] and the government can cause stagnation by excessive regulation of goods markets and labor markets.
Yep.
Anyway so let us set up a basic economics argument for the Green part of the plan as follows. Here is a supply and demand curve with price (P) increasing to (P’) as we increase or shift the cost or supply curve (S) of gasoline by adding a tax (S’). As you will see the quantity of gasoline demanded decreases from (Q) to (Q’) and the ticker tape ticks, the adding machines add, and all is well in economic pre Christmas land. (D is the demand for gasoline curve)
Ok now let us add the “Shift” into the plan. We’ll give back Canadians this extra revenue in the form of an income tax reduction. So without going into a lot of detail, suffice to state that when one increases the income of a group of people one also shifts up the aggregate demand curve. This is generally because as one has more money in one’s budget one is less constrained by costs. In other words, if we all get an extra $2000 a year in income tax rebates, some of us are going to drive to New York for the weekend like we always wanted to do.
Let’s see the curves shifting.
Whoops! As the demand curve shifts up from (D) to (D’) the quantity of gas consumed increases from (Q’) to (Q). We’re right back where we started! What we have done is simply artificially raised the price of things, but not done a thing to reduce consumption of gasoline or GGS for that matter.
What’s worse is that one has no real idea how these supply and demand curves are going to shift. They could in fact shift in a worse direction than one intended. For example as seen in this graph one could seen the consumption of GGS increase to (Q”) instead. More GGS consumed than before one played God-onomics.
The question comes down to the shape of the real demand curve for GGS. If the demand curve is “inelastic” it is a vertical curve, and this would mean no matter how much you increased the tax, the quantity consumed of GGS will not change as seen below.
Inelastic demand curves are seen when a good has no substitute goods, that is no readily available good with the same function that you can purchase in it’s place. Gasoline is a likely inelastic good as there really is no substitute for your Honda Civic you just bought. It cost $20,000, and unless you are Bill Gates, replacing it with a fusion powered vehicle isn’t going to happen anytime in the near future. Also as North American electricity generation is primarily from GGS, changing to non GGS generation will be a costly step with no immediate realistic substitutes other than Nuclear and Hydro power.
So what does the scientific peer reviewed literature demonstrate in regards to the elasticity of gasoline, the number one GGS? Hughes et. al state that:
We find the short run price elasticity of gasoline demand is significantly more inelastic today than in previous decades.
and
consumers have not significantly altered their gasoline consumption in response to higher gasoline prices.
interestingly
at lower income levels, the amount of travel has already been reduced to the minimum leaving little room for adjustment to higher prices.
In other words the evidence suggests that we’re pretty much locked into buying the gas we need. West et. al suggest that the cross-price elasticity between gasoline and leisure (the optimal tax rate on gasoline without causing external damage) is 35%. This happens to be the current tax rate on gasoline in Canada in most cities already, therefore taxing it more will cause significant burden.
And just how effective is the tax on gasoline at reducing air pollution? Sipes and Mendelsohn demonstrate that:
Our results indicate that if an environmental surcharge is added to gasoline taxes, then the additional tax will decrease gasoline consumption only slightly and, therefore, will have little effect on air pollution.
and more drastically
The results suggest that people with twice the income buy only 10–20% more gasoline. Of course, governments could use the revenues from gas taxes to address equity issues by lowering taxes on poor people or subsidizing services for them. However, in practice, it is not clear that current subsidies for transport actually benefit poor people more than others. Even if the income elasticity estimates in this paper are low, a tax on gasoline would most likely fall most heavily on the poor.
When it is all said and done, the people likely to suffer from the Green Shift are the poor themselves.
Dr. Mankiw is a proponent of the Pigovian Tax, that is a tax on things like GGS which have externalities such as pollution which are proposed to not be included in the price of the good itself. Dan Gardner seems to think that externalities are simply basic economics. They are not. In fact the theory of externalities is extremely complicated, and made more complicated by the question of whether externalities really exist.
At the end of the day, Stephen Harper has to decide a course to take. He doesn’t have the luxury of sitting in an Ivory Tower playing tiddly winks or black board what if’s. We have this Green Shift theory which sounds interesting, but what we don’t have at our finger-tips is the shapes of those curves I drew above. We also don’t really know how much they will shift and where they will equilibriate. The only way to know for sure is to experiment, and the most prudent way would be to experiment slowly, because we really have no idea how things will change - contrary to the apparent thoughts of Dion who thinks we need to act fast to save the planet.
Stephane Dion Uses Sign Language to Describe His Knowledge of Economics
We could easily make greenhouse gas output worse, we could have no effect at all. We could cause a depression, we could cause the worst outcome possible: stagflation. Many of the Canadian banks suggest that Canada is on the brink of a recession, recessions tend to mostly harm the poor, and the journal articles suggest the poor will bear the brunt of a Green Shift.
Therefore seems it would be stupid, Dan, to manipulate the Canadian economy so drastically at this time, that is when one considers the peer reviewed Economic evidence.
* The Green Shift plan has no immediate consumer gasoline taxes. However if the plan is to actually reduce GGS it will have to target gasoline in some manner. Gasoline is the number one and major contributor to Canadian GGS. For now they will target producers, who will have to pass some of these taxes onto the consumer, some will be taken out of profits, and some will be taken from the employees of the firms. Once again there are graphs to explain all that, of which we have no idea the slopes etc. In the end gasoline prices will rise, anyone who thinks they won’t is selling you a bridge to nowheresville.
** It is likely that the effect of Anthropogenic Global Warming caused by GGS on global climate change is low or non-existant as no definitive proof exists, and many peer reviewed articles state there is no evidence. Moreover it is likely that the current land based data is corrupt.
*** While many economists including myself support a pure consumption tax rather than income tax, all taxes do have harmful effects on the economy and the poor specifically. Consumption taxes have their own side effects and have not been entirely studied.
Watching the recent frenzy over the Climate Conference in Bali I am very happy that we finally have a Prime Minister who is able to blow the cold air of reality into the environmental maelstrom of something that looks like a big-hot-back-slapping doldrum. Canada’s position, Japan’s, (and Australia’s, no thanks to the brainwashing organization, CBC, everyone thinks that the position in Oz has changed because of the new Labour government, but really it hasn’t) and the position of the United States is that there is no point in setting restrictions on greenhouse gas emissions (GHG) when the world’s largest emittor won’t join in, and I refer to China. India’s emissions are projected to overtake the United States as well. The emissions from the US are going down each year under GW Bush, and not due to a recession either as the United States economy is better than ever, while Chinese emissions are increasing rapidly. If you’re one of those people who believes that anthropogenic GHG emissions (AGHG) is causing a disaster then by AlGlorey, why aren’t you concerned? It’s not going to matter one iota how much Canada does or even the United States for that matter, when the fat kids on the teeter-totter are all sitting on one end. Why isn’t this a bigger concern?
It’s comparable to a disarmament treaty during the Cold War that restricts the United States from building missiles but mandates the Soviet Union to build even more.
But does the media care? They’d rather follow the likes of Matt Damon and Leonardo DiCaprio. After all, it should concern us greatly when the dogs of Hollywood fly in on Lear Jets led by Al-Goreacle, and start yapping that perhaps things are getting blown way out of proportion.
Recently a new journal article* published in 2007 by a Canadian climate researcher and external IPCC reviewer, Dr. Ross McKitrik, in the Journal of Geophysical Research has demonstrated that the increase in surface temperature is in large part due to non-GHG anthropogenic reasons, ie: urbanization - in layman’s terms our cities are warm and temperature stations near cities are recording that. Moreover the methodology used by current science to screen out this background effect isn’t doing an effective job. His work reveals that the increase in temperature is half of that which the current United Nations Intergovernmental Panel on Climate Change (IPCC) is estimating, thereby reducing their estimates even lower than their own reduction in estimates from the latest report.
A group of Dutch scientists have independently confirmed McKitrik’s work. Dr. Jos DeLaat and Dr. A.N. Maurellis at the Royal Netherlands Meterological Institute and National Institute for Space Research Netherlands respectively showed something very interesting indeed in two recent papers. Their latest in the International Journal of Climatology, 2006, states:
Our analysis of climate model simulations of GHG warming confirms our earlier results, namely, that they do not show any kind of CO2 emission–temperature trend correlation. In fact, the modeled temperature trends are quite insensitive to the magnitude of the industrial CO2 emissions. It is possible that the response of the climate system to enhanced GHG radiative forcing is much more localized than expected in that it occurs only in specific regions and mainly in the lower troposphere, although this runs contrary to the current understanding of GHG-related processes (cf Hansen et al., 1997; IPCC, 2001; Hansen et al., 2005; Santer et al., 2005).
This confirms an earlier work of theirs in 2004 that points out that surface stations situated in regions of low economic output show relatively little change in mean surface temperatures compared to surface stations in areas of high economic output as seen in this graph:
(star = high CO2 area, cross = low CO2 area)
In other words, AGHG is not causing global climate change, only a local effect is seen.
Although the exact mechanisms have yet to be determined our findings show that a significant part of the observed surface warming is related to processes other than enhanced greenhouse warming.
Its interesting to see other scientists dispute the current mainstream thinking just for the sake of a challenge. Stephen McIntyre just cannot leave the Dr. Michael Mann et. al. famous hockey stick graph alone, and for good reason. With its projection heavily weighted by the Graybill tree ring data, McIntyre spends some time in the same Sheep Mountain woods doing core sampling to update the data and demonstrates that according to the forest, the planet has been getting colder lately.
And this brings me to my main point. I’m really concerned when science gets manipulated by politicians. Take for instance hurricane researcher and IPCC member Dr. Chris Landsea who points that fact out as he resigns from the IPCC. There is also no doubt that certain countries eye Kyoto as the holy grail of economic subsidies, a diversion of money to their coffers. It is now currently the world’s largest welfare scam. Kyoto has not much to do with saving the planet from AGHG because it’s reductions are meaningless. Kyoto is all about transplanting more factories to China and India.
(In 1614 Galileo challenged mainstream thinking about the sun revolving around the earth leading to an Inquisition where he was soundly chastized)
It disturbs me as a scientist to see things get so manipulated by certain people with certain agendas. Like for instance what happened with Dr. Paul Reiter, a leading expert on malaria and other diseases carried by the mosquito vector. His testamony in front of the British House of Parliament reveals how the lead writers of the IPCC report on the Impact on Human Health are chosen. It is worth reading the whole thing. After not being chosen as a lead author in IPCC 4, largely due to his suspicion that he is not alarmist enough because he states the research doesn’t support an increase in malaria due to Global Warming, he retorts that the people chosen are basically laymen with agendas chosen by politicians:
34. I replied with a question about the two Lead Authors that had been selected: “It is often stated that the IPCC represents the worlds top scientists. I copy to you the bibliographies of (the two lead authors), as downloaded from MEDLINE. You will observe that (the first) has never written a single article, and (the second) has only authored five articles. Can these two really be considered “Lead authors” with experience, representative of the world’s top scientists and specialists in human health?”
35. I also pointed out that one Lead Author is a “hygienist”, the other is a specialist in fossil faeces, and both have been co-authors on publications by environmental activists.
Imagine that, the lead authors of part of a document that is due to set world policy and massive interference by governments at all levels was written by a group of people with no scientific publications at all.
The list of climate scientists disillusioned with the political manipulation of the IPCC grows longer, however when they try and make their voices heard they are soundly run out of town. That’s partly the fierce nature of the whole argument which involves scientific blows from both sides, however this fight is now one sided because the media, the politicians, and the hollywood hound-dogs have chosen the side they like - the socialist side that says global warming is cause by us bad humans but we should feel sorry for China and let them emit GHG because they’re poor. So in essence lets do nothing but feel good about it. Modern Liberal policy in progress, something Jean Chretien who did nothing about Canada’s GHG emissions over the last 10 years would have been proud of.
* Note: McKitrik’s work is sponsored by the Social Sciences and Humanities Research Council of Canada, not industry.
When it comes to the market place the Government is like a fat kid on a teeter-totter. One knows which end is coming down, and its sure to be as balanced as an elephant on ice. But how do governments in a democracy become corrupted? Surely with the voting public and the vociferous media hounding them there is no way for the fat evil merchants of capitalism to stroll in and take things from the collective?
If you have a moment, I’ll tell you how it happens.
It comes from our own best intentions gone wrong.
The latest squawking to come from the Liberals is the revival of the Income Trusts issue. For those of you unaware of what the big deal about income trusts is, I’ll explain briefly. Income trusts are a method corporations use to avoid income taxes. Plain and simple, and while some people will deny this, mature corporations wouldn’t be doing it if it weren’t advantageous to them. As any accountant knows deep down inside, the more convoluted a tax system is, the more loopholes there are. It’s called Langmann’s Law which states: l=n/5, where l is number of loopholes, and n is the number of tax legislative sections or something.
And seriously though, as economist James R. Hines points out, the more government attempts to fix tax loopholes, the more they actually encourage the implementation of new loopholes. This is one of the main reasons the old Reform Party of Canada proposed a flat personal and corporate income tax with your only deduction being your children and the basic personal exemption.
Anyhow, in case anyone didn’t notice, the Conservative government did the unthinkable late last year by taxing Income Trusts and thus slamming the lid down on this particular avoidance strategy. They did this against the promise of not doing this, which is a clear violation and a shameful act. I personally am not completely against governments changing their promises based upon new evidence as long as they were sincere in their previous promise, that the new evidence is decisive, that keeping a promise will result in a catastrophe, and that their decision isn’t for simple political gain. We must also bear in mind that a government which makes mistaken promises should be taken to the crucible for ineffectively analysing the data. This all being said there is nothing worse than the old Liberal strategy of promising action, not doing anything, and still promising action, ie: Kyoto.
Angry in the Great White North writes about slim shady Garth Turner (a man I mistakenly used to believe was a straight shooter even while he was burning the Conservatives from within) and his grand Canada tour railing against the Conservative actions on income trusts and how the great Liberal party will do all in its power if it gets elected to make everything better for the holders of income trusts and the corporations who created them. Angry points out several interesting flaws in Garth’s argument that the taxing of income trusts hurt seniors and instead points out that income trusts were in some cases preying on ignorant seniors.
However lets look deeper into what is going on. Garth is a member of the Canadian Parliament and within the Liberal Party of Canada’s caucus. Garth is going on a trans-Canada tour who’s theme is how the Conservatives ripped off the poor senior citizens and that we should instead vote Liberal so they can fix this tragety. The sponsor of Garth’s little anti-government tour is an organization called CAITI which is in fact made up on a number of organizations that sell income trusts. Basically what we have here is the direct efforts of a series of corporations to have a government elected that will give them a market advantage simply by setting up legislation. Your vote cast for the Liberals because you feel bad for the poor ripped off seniors is how they get you to vote for their personal advantage.
That is, folks, how corruption happens.
(The Boston Tea Party - A government granted monopoly to the British East India Company culminated to this famous riot, provided evidence for the new liberal philosophy of the proper role of government and created the U.S.A. under a constitution which was supposed to protect people from the government itself)
Milton Friedman used to use the Interstate Commerce Commission as an example of how the government tries to act in the best interests and protect citizens by setting up regulatory bodies but those same bodies end up becoming a direct method corporations use to lobby governments into giving them specific entitlements to markets.
In economics this is known as regulatory capture. In Canada we have several such groups, the Canadian Wheat Board is one currently in the news as the Conservatives try and end that bloated travesty.
How does one prevent regulatory capture of a market? Simple. Define property rights and then stay out of a market no matter how tempting it is. In the case of taxes, a simple flat tax is the best way to prevent loopholes and provide equality.
Update:
I few times I have hinted at ways to responsibly help out other people while not relying on either government ineptitude and/or corporate foundations that steal most of your donated money to pay for employees, computers, or glossy pamphlets. I’d like to point your attention to a non-profit organization I think appears to be doing the kind of giving a libertarian can only dream of.
Kiva.org is a website at which you can set up private loans to other people in third world countries who are trying to better their lives by working and being entrepreneurs. All of your donated money goes directly to the borrower. You can also make a small donation to Kiva to keep them running but its not compulsory. The money gets transferred to a private bank in the borrower’s country. They then pay you back over a period of set time.
So far this looks to be on the up and up. Recently they have been covered by bloggers and media. I have tried it out and I’ll see how it goes. Let’s hope this works out.
Why is Kiva responsible giving? Because you are helping someone become self sufficient and they are paying you back. You’re also watching the borrower’s report to make sure that your investment is being used for what it was meant for. The worst kind of subsidy is one that never gets paid back.
There are some potentially valid reasons to buy a Prius or some other hybrid, but saving the world from the hordes of evil CO2 isn’t one of them. But hey, most of the educated people out there aren’t suprised.
Once again yet another group has come out with a study showing that the vaunted Prius uses more energy over it’s lifetime than the gas guzzling Hummer. CNW Marketing Research has produced a “dust to dust” study demonstrating that overall the Prius has an energy-cost average of $3.25 per lifetime mile vs. the Hummer with one of $1.95. Mostly the added environmental damage is from the production of the Prius’ batteries and transport of said product. The other thing that CNW noticed is that people aren’t using the Prius that long before it’s thrown out, hence a lot of fossil fuels has gone into the production of a vehicle that isn’t being well used.
(For those of you who think that the only good carbon is dead carbon, the only thing that will bog a Hummer down is taxes.)
Now, like any economist or other scientist, I can state this as a certainty because I’ve done computer modelling: almost any conclusion can be reached by the construction of a model. (Tell that to the global warming gang). All one has to do is make sure that one adds the variables that will in theory support one’s hypothesis and make up excuses why to leave out the variables that will not. The debate on whether the hybrid is an environmental benefit or boondoggle will rage on and on.
My real suspicion is that if the Hummer and Prius are fairly close on the environmental scale of damage, and one can argue back and forth on this, the fuel efficient and economical cars like the Corolla and Civic must be much better than a Prius.
(Update) Looking at more evidence I’m likely still better off buying the conventional car for quite a while. Lave and MacLean conclude that the benefit from the Prius over the Corolla is negligible especially when considering the costs of production. Lave’s previous work has agreed with he CNW that indeed the production of hybrids results in higher environmental stress than conventional cars, and indeed have only tiny effects on ozone production and yet have increased environmental effects due to battery materials.
Anyhow why am I going on about some old news? It only took our friendly Globe and Mail writer Neil Reynolds about two lines to twist this story into yet another anti-Conservative Party of Canada (CPC) story where of course it’s all Stephen Harper, Jim Flaherty, and probably George W Bush’s fault too if you look hard enough. (This is yet another one of those times where Dick “The Dick” Cheney may or may not be at fault, but let me remind you that the Laffer curve we discussed in this post earlier was his fault.)
Now Neil Reynolds has a very interesting biography, been everything from an NDPer to a Libertarian, has run a variety of newspapers and is very vociferous on his outlook that small government, low taxes, and person freedom are the best way to go and on that I couldn’t agree more. However as he once said about working at the Toronto Star that he isn’t above going with the accepted way of things:
People know all newspapers have biases. Some people read us because they don’t agree with our bias. They get a provocative charge out of being told they’re wrong … I worked at the Toronto Star for eight years, and they were the biggest spinners of all. They had a written policy that ‘everything [Liberal finance minister] Walter Gordon does is front page news.’ I didn’t agree with Gordon, but I followed the policy anyways, with a clear conscience. Everyone knew it was a left-wing rag, and we called it PRAVDA, affectionately. But it was a great crusader, and the best-selling daily in the country.
And the way of things is CPC bashing. In his column he writes that Jim Flaherty was mistaken in giving tax breaks for fuel efficient cars and increased taxes on fuel guzzlers.
In his March budget, Mr. Flaherty made fuel efficiency - gas mileage alone - the sole basis for the environmental rating of new cars. He will reward high-mileage cars (with rebates from $1,000 to $2,000) and punish low-mileage cars (with surcharges from $1,000 to $4,000). The program could well be a phenomenal waste of energy. Junk it, Mr. Flaherty. It’s not fit for the road.
Now before all you socialist huggers out there get too excited and start waving placards about yet another frothing trashing of the CPC, lets not forget that Reynolds has a way of being facetious which doesn’t necessarily mean he’s on your side. In fact who really knows what he means, one of his previous suggestions has been to cut the GST on any new car since they are in general more fuel efficient. Probably because he reached the same conclusions I did.
However if there is one thing Reynolds admits to knowing is which way the bandwagon is headed and how to get on. So it’s likely his editors at the G&M were ecstatic with his implications regarding the CPC because the media will continue to lap up anything that windbags with no credibility like the Suzuki and Al Gore will say and yet neglect to do any real research of their own.
For example, Stephane Dion can recycle some old wine glasses and to the media he’s the greenest guy since Kermit the Frog, yet Flaherty can implement some Suzuki Foundation suggestion and he’s the Genghis Khan of the Greenhouse Gas Horde.
Anyhow the real reason the Hybrid may be better for us all really has nothing to do with CO2. Instead it may, and this is a may, help reduce smog in cities that has been linked to respiratory and cardiovascular diseases in suseptible people as well as cancers. Even the evidence for this is still in some ways weak, but its out there and probably a lot more reliable and relevant than the media-hyped science on CO2. Yet can we get a peep out of them on this? When the CPC announced they were targeting smog as a health issue, the media was speechless. It was like watching an episode of the Simpsons when Homer is told the implications of something and he just blinks a couple times with a blank look on his face. Yet say the word Global Warming and they’ll lead the charge to Jerusalem.
(The War on Greenhouse Gasses is the New Crusade and Global Warming is the New Religion)
So if you’re going to drive a hybrid, it should be because you’re trying to save lil’ Johnny from yet another asthma episode and subsequently another visit to me. If you think you’re any better than the dude in the Hummer that just passed you, think again. You, my friend, are the one making the planet hotter.
1) The fuel efficient cars are likely your best bet if you want to save the world.
2) No matter what the CPC does, according to the media it will always be wrong.
3) The Prius and other hybrids are a good idea in theory because they may reduce the harmful local effects of combustion engine emissions on lung and heart disease, not because they reduce CO2.
Note: Clicking the Links is important to understand my rambling)
The New Government of Canada released its federal budget this week with much fanfare and progressive words like “achieving our country’s full potential“™ and other such big word terminology.
(Why are they smiling? Conservatives are so green they’re now hitch-hiking.)
The ides of March rolled on, and Imperator Harper managed to wriggle away from the steely knives and duck his way out of something nobody wanted at the moment: a repeat of the 2006 civil war. Many libertarian conservatives watching their blood-money swirl clockwise down the toilet are left thinking Et Tu Brute? But libertarians will always feel that way (more on this later) since from the beginning of time we’ve always been bullied by what enterprising politicians manage to call “What Society Wants”.
(Tower of Babel: What Society Wanted)
Canada’s conscience, CTV newsmedia, seemed to be so bored with this complicated budget that, like a college student sweeping dirt under the couch in preparation for his girlfriend’s visit, they quickly swept it off into a hard to find area on their web page (I challenge you to find it). Then they filled the section with a variety of opinion from people who are usually totally against everything in general. The only memorial moment in CTV’s reporting is from the old weasel, Craig Oliver who is so stunned by the copiousity (word I made up to describe silliness) of the shiny presents that he must have had a hallucination that he was living in the glory days of P.E.T. again and randomly challenged anyone to find anything wrong with the big bonanza (paraphrase).
When respondents were asked what they thought to be the most important issue for the budget to address, social programs were the clear favourite:
Increasing spending on social programs: 50 per cent
Cutting taxes: 19 per cent
Transferring funds to the provinces for their use: 15 per cent
Reducing debt: 13 per cent.
AND
When respondents were asked whether they thought the claim of a so-called fiscal imbalance was believable, the majority said yes:
Very believable: 31 per cent
Somewhat believable: 43 per cent
Total believable: 74 per cent
Not too believable: 11 per cent
Not believable at all: 6 per cent
Total not believable: 17 per cent
So the CTF just reiterates this truth: “A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship.” - Alexander Tytler
(I smell sulfur and it ain’t GW Bush)
Anyhow there are quite a few analysis out there on the budget and I’ll get to my point in a minute. First though I have to say that one thing the Conservatives have been doing that the Liberals seem to have a pretty crappy track record on is funding disabled people. However this is something conservatives generally favor strongly. Moreover the Status of Women has its funding back, but it appears that the Conservatives are actually trying to fund real things like shelters rather than silly university professors and other wastes of money.
So anyhow back to my point.
Stephen Harper is probably the most intelligent politician we have had in Canadian politics since P.E.T. and also likely one of the most elegant schemers we have had for a long time. (I do think he is a decent guy with a genuine personality). I guess that basically Harper looked at the way the country was feeling (look up at those polls) and he also pondered on the new Religion of the Kyoto:
And Harper knew that he had to “head em off at the pass”, to borrow a stereotypical Western phrase (from Westerns not Western Canada).
And so we have a budget that basically fixes the fiscal imbalance, whatever that is, as well as handing out a bunch of money to mystical feel good targets such as the Holy Grail of Global Warming and other fuzzy stuff. Once again the Conservative party of Canada does the real environmental work that the Liberals are always talking about.
(The Greenest Chin Ever: The Leprachaun who laughs last, laughs…
and gets the pot of our gold)
Enraged they are, the Liberals. Deep down inside that particular and peculiar socialist waste of space, Stephane Dion, wishes he could have come out with the exact same budget except with more spending (from where the pot is dry?) and perhaps a lower rate tax cut of 0.5%. However they are so angry that they cannot get any play that they just decide they ain’t playing at all and bail out without even reading the budget.
Guys like Dion plagued the halls of every university I went to, wasting both taxpayer money and tonnes of CO2 credits along their way to social justice - whatever that is… Because for these guys equality of opportunity isn’t the classical meaning, but rather the equality of some being more equal than others. Its equality of outcome they are after. In other words no matter how much evidence that the unintended consequences of their actions are hurtful, or how BS their schemes they will decide who gets what and how; they are going to make us all pay for it. You’ll see what I mean when I write next about the minimum wage Ontario is considering. However the rats are jumping the ship, because if there really is one thing American that Harper brought to Canadian politics it is the ability to buy out and collude with the other side. And so Cormuzzi (Lib) drawn to the musky odor of the well cooked golden pork promise, burns out like a fly in one of those electic patio zappers as Dion punts him from caucus.
Because Harper knows that for some reason his party cannot break the 40 percent mark that makes a majority in these parts. Conservatives of all stripes have wandered in the wilderness for so long now that it seems they just aren’t willing to wander in the wilderness anymore. They’ve watched the Liberals feasting in Sodom forever, perched on their high place and enjoying the fat of the land while the Conservatives have had to quench their thirst by beating their heads against the stone of balanced budgets and tax cuts taking whatever scraps that fell from the sky from a stupid media that wouldn’t know the difference between basic economics from NeverNeverLand.
And so they re-forged that old idol, the Paternalistic fatted milk-cow god of Conservative old and towed it out in front of the people to see if perhaps the foolish ones would eat it.
(Party like it’s 1999 B.C.)
But think about it. Can you blame Harper? Lets pretend he came out with a sensible prudent budget. It would be like injecting the Liberals with amphetamines and bringing them a Timmies strong caf. to boot.
Because right now there is so much freaking largesse everyone wants a place at the table or they’ll shriek so loud that Hades will seem like just your average day dull roar.
(There’s enough pork for everyone!)
Stephen Taylor at Blogging Tories, himself an independent journalist, has a series of interviews with several groups, many of whom are not happy with their slice of the pork.
The interesting thing is that the pork got ate all up and still no one is happy. Obviously the alternative would have been to bleed us serfs dryer than Liberal money at the laundromat.
And at last this brings me to my point. No matter what they’ll complain and complain and complain…
Tim Robbins made a low budget movie a while ago called Bob Roberts. For those of you who have not seen it, you should. Basically it is about this right wing guy running as a Senator who rewrites all the folk music protest songs of the 60’s in a sort of counter-culture reversal. All of the songs are clever in that they do have an ounce of truth to them. According to Wikipedia, Robbins’ intentions for the film seem to be less partisan, and more about the political system in general (Roberge 1992).
One of the songs:
Complain
Some people will have / Some simply will not / But they’ll complain and complain and complain and complain and complain / Some people will work / Some never will / But they’ll complain and complain and complain and complain and complain / Like this: / It’s society’s fault I don’t have a job / It’s society’s fault I’m a slob / I’m a drunk, I don’t have a brain / Give me a pamphlet while I complain / Hey pal you’re living in the land of the free No-one’s gonna hand you opportunity.
Except in this case, the people complaining are the ones who are getting grants to fund their complaining.
I’ll examine one part of the budget, the equalization strategy part. Equalization payments are like a mini-cosmos economic study as to why subsidies don’t work. We’ve been funding Quebec for years and they don’t seem to be getting any more equal, in fact it appears they just get less equal all the time - sucking up money like a sponge.
Right now everyone has their nuts in a knot about the next round of equalization payments. Here’s a summary:
Following are the 2007-08 per-capita equalization payments for the receiving provinces with the 2006-07 payments in brackets. (All figures in millions):
N.L.: $477 ($632)
P.E.I.: $294 ($291)
N.S.: $1,308 (1,386)
N.B.: $1,477 ($1,451)
Que.: $7,160 ($5,539)
Man.: $1,826 ($1,709)
Sask.: $226 ($13)
B.C.: N/A ($260)
Basically the formula is meant to bring those up to the 10 province average. Danny Williams is as pissed as ever because he doesn’t get to write off 100% of natural resources, and here Guinty is pissed because Danny Williams gets to write off 50%. Saskatchewan is pissed because basically they’re getting more money.
Anyhow this convoluted mess proves one thing. When it comes to “equalization” or social transfers or basically robbing one guy to pay another, you end up pissing everyone off.
Here’s how it should work: No equalization payments. Let people move to where the jobs are. Equalization payments just prop up failure, like any other subsidy. Its been that way since the beginning of time and no one has ever made it work without hurting someone else and enabling people to do unsuccessful things. No one.
In fact what subsidies do is prop up the very people socialists hate: rich fat influential businessmen - because it props up their business.
For example the other day that Jack Layton guy railed on CHRA radio about how we should be both forcing and paying North American car companies to produce efficient cars instead of those crappy heaps they make now.
Excuse me? We should give taxpayer money to Detroit to prop up their failing businesses because they’re too stupid to make cars people want? And the Unions who are too stupid to realize the realities of global trade? (Anyone who wants to learn the theory of how subsidies always result in negative outcomes click here and scroll down to the Impact of Subsidy.)
And you can be sure that Stephen Harper, a trained economist, believes in subsidies about as much as Stockwell Day believes in fossils.
So then what would have been the ideal budget for those budding libertarians?
Andrew Coyne has a great summary of this which has been discussed amongst those who both:
a) care about what happens to people and,
b) are educated in economic theory
I mean would you trust your health to some guy at a store or would you trust a trained doctor more? Why are people so eager to trust politicians who have never read a simple macro/microeconomic theory text? Maybe for the same reason a certain bunch of moonbats only trust witch doctors and quacks.
With half of all the money spent in the last two budgets (11 billion), you could reduce all the income tax rates to 20%. In other words two rates, 15.5% and 20%. Also you could increase the bottom allowable deductable so that poor people aren’t taxed on money they don’t really have.
Yes folks, now ask me, what does more? Letting people spend their own money or having the government do it for them?
To Those Moonbats who are worried that the Government isn’t spending enough:
(StatsCan, compiled by langmann)
(One good thing about the conservative budget is the working income supplement or a “negative tax”which was originally proposed by the genius, Milton Friedman and which I may discuss in greater detail at some point later.)
Update:
(Like I said)
And even after all this, “poll numbers show the majority (55 per cent) of Canadians thought Quebec benefited most from the transfer of funds under equalization, a majority of Quebecers (51 per cent) believe they received less than their fair share.”
Hmmm. Remember what I said about equalization payments? Sure you do.
