Archive for the ‘economy’ Tag

Canada Free Press – What A Joke!

Every now and then, I stumble across someone (usually an intellectually-barren right winger) who cited to support an argument. Even more amusing is that occasionally people seem to think that writing for this blog is some kind of journalistic credential.

When your tagline is “Because without America there is no free world…” I have to wonder what the “Canada” part is all about. CFP started as a print paper in Toronto, a right wing free birdcage liner, but it’s now rarely about Canada, and more a haven for American conservatives, and frankly, not good ones. There used to be a comedic value to it, but even that’s gone. Now it’s just… well… I can’t describe it. So let’s look at one of their articles, about the evil (well, if you grossly misinterpret it) UN Agenda 21) and its impact on the military, by Dr. Ileana Johnson Paugh. The article is here. Read carefully, because some of the hilarity is subtle.

The good doctor’s article is based on a US government directive about sustainability and designs for military bases – to make them more “walkable”, something that’s been, as I understand it, an urban planning concept for a long time. Most military bases I’ve been on aren’t, don’t offer much in the way of incentive for transit or ride share, and are thus often traffic nightmares. A base I spent a lot of time on has three gates fed by a series of collector roads, and it’s not uncommon to spend 15-20 minutes or more trying to get out at the end of the day, sitting in traffic. To travel a kilometre or two. That’s a lot of cars idling for no good reason. But I guess, if you’re a right wing moron, that’s not a big deal.

She wastes little time to turn an architect’s report on the community around the US Air Base at Aviano into a snipe at Italy – suggesting “they can defend themselves”. Which, of course, they do, which a fairly large and well-equipped military. I’m not entirely sure who or what the US base at Aviano defends Italy from, and would guess it primarily serves US and not Italian interests.

I particularly love this paragraph:

The military leadership explains that transit-oriented development reduces traffic congestion and accident rates while encouraging walking, bicycling, and overall healthy communities. This is a ridiculous excuse since a soldier, by definition, has to be healthy and fit in order to serve in the military. Walking and biking actually increase accident rates of hit and run. There are retirees, even young ones, who are handicapped, and biking and walking is not an option for them. We have thousands of soldiers who have returned from Iraq and Iran with severe, life altering disabilities.

I literally cannot make any sense of this. Where to begin? First, military communities don’t just include “soldiers”. Bases employ civilians. Military families use their facilities as well. And ultimately, that soldiers have a fitness standard that the general public doesn’t has pretty much nothing to do with this. Increased rates of hit and run? Okay, whatever. Conveniently, the Good Doctor offers no statistical support for this, and I somehow don’t think it’s particularly important. Biking and walking aren’t an option for lots of people, sure, but nothing in the ideas of better urban planning makes it impossible. Thanks to not right wing people, after all, we have laws about making sure that we accommodate disabled people. Of course, if you’re a certain class of conservative, you think those laws are an encroachment on your civil liberties and free enterprise, but we’ll try to leave Paultards out of this, shall we? I also love she says soldiers “returned from Iraq and Iran”, to help build the case that on basically the entire subject matter of this post, she has absolutely no idea what she’s talking about. Iran? Really?

Another gem of a paragraph:

Because of drastic cutbacks in the military for cost-saving reasons, at a time when the world threat to our country is at an all time high, we do not have money to refurbish and modernize the military capability. We let soldiers fight in Afghanistan and Iraq with scarce resources and protection, having to duct-tape their body armor to non-armored vehicles in order to provide some level of safety.

Well, “we” sent soldiers to fight a way in Iraq without proper equipment because there wasn’t enough of it to go around. By invading Iraq, Afghanistan was neglected with victory declared early, and it was allowed to fester. And the war with Iraq was totally unnecessary. By the way, which political party has members that actually voted against better equipment for soldiers? Ooops.

The military is more concerned with rules and regulations, like a soldier being licensed properly to drive an un-armored SUV through a war zone. Those who make ill-conceived rules from the safety of their offices in Washington, D. C. do not worry that this soldier might be blown off by a roadside bomb because his vehicle is not armored.

Why are soldiers “licensed” to drive UP-armoured (not “un-armoured”) SUVs? In the case of some places, because they’re less conspicuous and easier to maneuvre around cities. Big convoys of armoured vehicles are juicy targets. Consider the attack on the Rhino Bus on October 29, 2011 in Kabul, Afghanistan. It was a big, heavy, armoured vehicle, and a vehicle-borne IED destroyed it and killed all its occupants. It was a clear, significant target. SUVs disappear into traffic, theoretically. Why are they “licensed”? Because they have to pass a driving test that’s a little more than what most people do – how to drive evasively, and maneuvres that increase the safety of the driver and their passengers. Not just anyone should be thrown keys and told to have at it.

“Which would you rather have? Would you rather spend $4 billion on Air Force Base solar panels, or would you rather have 28 new F-22s or 30 F-25s or modernized C-130s? Would you rather have $64.8 billion spent on pointless global warming efforts,  or would you rather have more funds put towards modernizing our fleet of ships, aircraft and ground vehicles to improve the safety of our troops and help defend our nation against the legitimate threats that we face?” (Sen. James Inhofe as quoted by Caroline May)”

I like the solar panels thing. I recently read an article about the US Marine Corps using them on FOBs in southern Afghanistan, saving massive amounts of fuel that would be needed for generators to power the installation. Not only does using less fuel save money, and hey, it’s good for the environment (particularly relevant when the US military is under fire for the air quality on their bases, generator emissions are not exactly good in that sense) – but it saves lives potentially because less fuel consumption means less convoys to transport fuel, means less vehicle movement on the roads, regardless of whether the vehicles are armoured or unarmoured.

Yet we spend billions to needlessly restructure military bases into global environmentalism compliance. It is more important for our executive branch to “sustain” the so-called endangered environment, and please the environmentalist wackos, than to defend our country.

Actually, as I understand it, the directives apply to new base construction and chages thereto. Environmental compliance not only is good for the entire world, it saves money, and in most cases, if you look at what sustainable communities are actually about, it makes them more pleasant places to live. Saving money on defence facilities (the massive of cost of which she references in her article, oddly enough!) leaves more money available for defence, or whatever else. There’s literally nothing bad I can see about that, at all. Unless, like The Good Doctor, you want to make a series of arguments from ignorance to hear yourself speak.


Another Aviating Post

Here I go with another “I’m offline and frustrated” post. I’m starting this as I wait to board my flight from Detroit back to Halifax, annoyed that DTW still doesn’t have free wifi for customers like most decent airports. Of course I wouldn’t really care if I was in Canada because I would have 3G, but here, I don’t.

Instead, DTW has a Boingo hotspot. With a two hour layover I figured I would sign up and I could fritter away time twittering as I do. I filled the form out with my credit card info, hit go, and nothing. So I tried calling the customer service number only to sit on hold for ten minutes and get disconnected. Now we are close enough to boarding that it seems not to matter anymore.

DC turned out to be overall a great trip. I met some pretty interesting people, saw some great sights, and lamentably enjoyed some decent weather which wasn’t what they promised and thus I cancelled my original plans to rent a Harley-Davidson and roam around Virginia. In the end, it was actually a good thing because I would likely have missed a lot of neat stuff, including the Newseum, and meeting the legendary @DCDebbie who didn’t make the tweetup I was going to because she was sick.

It’s interesting to meet people you’ve only been acquainted with via Twitter. So far they’ve been basically exactly what I expected them to be like – not personas, not fake at all. That’s pretty awesome. I was disappointed that some people I expected to meet weren’t there, but that’s how things go

I got in some great conversations as well, about politics, about careers, about ambition, about all sorts of things. There is a networking aspect to social media that’s there for those who wish to avail themselves of it, and it’s fantastic. I cannot help but wonder what will come out of some of the discussions that took place this weekend.

It got me thinking about my own directions for the next little while too, actually. This week, hopefully, I’ll know what’s about to be my life when I find out whether my tour is happening. Given the need to make nice with my day job, I have to make a call soon. I don’t want to be in a position of having a bunch of new enemies on account of things coming apart last minute. I know exactly what that is like: it happened to me in 2009. It’s what actually spurred my move to Nova Scotia in the first place. I had to get away from some people I had basically pissed off.

I had a slight epiphany this weekend that I have a concrete, real life example in my life of exactly what my unit wants to prevent. A friend of mine took a Class B callout (basically, a full-time Reserve gig) he was unqualified for. He was promised all sorts of support to make it work, none of which materialized, and the resulting toll on his sanity was severe. Create a situation like that in a place like Afghanistan where there is a lot more pressure – and ready access to weapons – and potentially you have a recipe for real disaster. There have been suicides among people put in jobs they simply couldn’t handle – one in particular jumps out. It was a tragic example of the Army failing someone.

I remain not terribly worried – but I understand the apprehension.

The wonderful thing about the last few days is that I haven’t really had to worry about any of that stuff, I’ve just unwound mostly, admiring the sights of a city I’ve only really been to once before, when I was only 9. I did go to DC in 2006 as well, but really, it was a brief stop for a few hours, on someone else’s schedule. There is so much to appreciate there being older, and wiser, and all that. I particularly liked the FDR Memorial, given the state of affairs particularly stateside economically, and a common refrain that something as bold as The New Deal is what is really needed to spur a Renaissance of sorts.

The FDR Monument is particularly striking as it’s a staged process using fountains to illustrate watershed events in his Presidency (pardon the pun). The fountain in his third term section appears broken, chaotic, like the world at war. The second is a more elaborate, stepped fountain evoking the TVA, the massive infrastructure project that helped resuscitate the US economy, spurring massive development potential. One has to wonder what could be a contemporary effort with the same effect. It isn’t enough to just start spending money – filling potholes or building unneeded infrastructure isn’t what will lay groundwork for a solid future, there has to be more thought invested than that!

To me this all ties to arguments I’ve always made: the manufacturing economy in North America is mostly dead. Without some manner of trade policy intervention (i.e. protectionism), manufacturing will largely never return to what it was. Emerging economies can do it cheaper, and that’s really all that matters. Barring shipping costs for low margins soaring, there simply will be no cost incentive not to manufacture widgets in China, or India, or wherever. The costs cannot come down here without a subsequent impact on lifestyles. Given that it seems to me that the middle class even as I knew it growing up is fading into history, that simply won’t go over well. We – my generation – and the ones just behind me, the so-called millenials, have to determine that and push the powers that be toward them. I guess that’s what I wish I had more answers for.

Ramblings – On Retirement Ages Eventually.

I have a myriad of things running through my mind at the moment, and I haven’t really been updating the blog lately.  It’s been even worse on my more personal one, I don’t think I’ve put anything meaningful there in a very long time, and that’s kind of sad in a way – I’ve had that blog since before the word existed, back when LiveJournal was a referral service and someone had to give you an invite for you to join.

But being busy with other things is good, of course.  Work continues to be getting better and better, and it appears that for many reasons I’ve made a decent move.  I’m still not totally settled on things though, and I think my wife is homesick for Ontario more than she really admits, but is willing to concede that she has to give this a more thorough attempt.

Lots has been going on politically lately on both sides of the border, and I find it hard to nail down anything really sharp to say on a lot of it – in Canada, we have the renewed discussion of what the hell we are going to do in Afghanistan next year when the Parliamentary mandate for our current contribution to ISAF ends and in theory we are done.  As of my last check, the PM has decided that we’ll stay there in a training role, it sounds like in Kabul (vice the rather more dangerous Kandahar), with about 1000 troops on the ground.  I suspect that many of them will continue to be drawn from the Reserve, and have not given up on the idea of getting a tour in, though it’s hard to say what’ll happen.

This was sort of a dovetail from a major debate about Veterans Affairs, which started when the current ombudsman, Col Pat Stogran (ret’d) got into the spotlight for his vigourous criticism of the government’s handling of the claims of veterans, particularly those injured in Afghanistan, but also those with injuries, including invisible ones like PTSD, from previous operations.  Apparently it’s Bosnia veterans that report the highest rates of debilitating PTSD.

I don’t have a fully formed opinion on that whole thing, though I understand fully the frustration many feel because I’m a VAC client myself – well, I’m trying.  I was injured during my basic officer training years ago, I probably broke my foot but didn’t know it because I received rather lacklustre treatment, and no follow-up when I was sent home from the course, this is a common problem Reserve soldiers face that is starting to get addressed.  While I’m not so badly off, I do have a lot of pain from time to time walking, and I need special orthotics to be able to do my job.  My civilian job’s benefits currently pay for them, but I’d rather VAC do it.  I’m not really bothered about getting a lump sum payout (though it would go toward my house fund), I just want to make sure that if it gets worse as I get older, I have something to prove that it was due to service.

It took forever to apply, forever to get my first answer (no), and now I’ve been just to busy to jump through the hoops that the Bureau Of Pension Advocates wants me to endure.  We’ll see how it goes.

So we went to Boston a couple of weeks ago on our first real “vacation” in a long time – in fact, it was sort of our honeymoon for our fifth anniversary, just a long weekend, but it was neat to be there in the run up to the elections and all – we actually came home the day of, listening to the results come in on XM.  It is a little different seeing how things work in the US compared to here – one thing that really struck me was that it was hard to size up opinions from signs not knowing the actual candidates, since it seems that American candidates don’t always put their party on their signage, or in any way use colours etc that ID them.  Not so here, where signs are generally standardized and it’s pretty clear who’s who.

In the end, I guess the results didn’t surprise me.  I was happy to see that most of the crazy teabaggers got smited, though Rand Paul getting into the Senate was just a bit shocking, I have a feeling those Tea Party morons are going to regret sending him there.  Seriously, that guy has some ridiculous ideas and opinions, truly baffling that he was electable.

Losing the House was no shock, the Democratic Party has amazed me with its inability to put its majority to work and just get things done.   Particularly in the face of the idiocy spewed out by the Republicans.  I don’t get how people fall for their bullshit.  I read their “Pledge” which was mostly fluffy empty rhetoric and nonsense aimed at people who don’t really know much about politics.  The tax cuts thing is the most galling.  There is no reason to believe that a tax cut for the most wealthy will do anything to stimulate the US economy, and more ridiculously, the people calling for it keep calling themselves fiscally responsible.  Adding $700 billion to the US deficit is just not fiscally responsible, it smacks of the highest forms of hypocrisy, which seems to be their theme anyhow.  How does the GOP plan to balance the budget?  What will they cut, specifically?  They have no idea, no plan.  When you highlight to them that a staggering cut to the military they understandable go ballistic at the idea.

The silly thing is that the things that are reasonable to discuss are now being rejected by both sides – things like discussions of retirement ages and entitlements.  Given my personal background I have some insight on this, and that’s what I think I’ll focus on here.

One of the things put out as an idea in the United States was reforming Social Security by raising the retirement age.  You’ll likely know that France was recently gripped by protests and strikes over a plan to raise its state retirement age from 60 to 62, a move expected to save the French social security significantly.  To me, 62 seems still very generous, but anyone familiar with France’s generous welfare state will tell you that it’s still a big change.

As one of my colleagues likes to highlight to people when doing retirement planning presentations, the conventional retirement age of 65 was chosen for a reason.  The reason is simple: Life expectancy was (depending on which study of which country you look at) about 59 (or 63, I’ve also heard quoted).  That means that there was a pretty good chance that you’d never actually qualify to retire, you’d work until you died, and social security systems were in place to look after the lucky folk who actually lived longer.

The reality is that when you look at demographic trends and how long people live, it’s not reasonable to have a state pension fund a retirement that is in some cases nearly as long as one’s working life.  Even well managed ones (like the Canada Pension Plan) won’t be stable for long under such a setup.  Even now, more and more people are working longer, or phasing retirement by working less and less, but still working in some capacity.  In the case of many retirees I work with it’s out of boredom as much as anything else, a need to keep doing something.

We need to change the way we think about working and retiring, and about older workers if this is the approach we’re going to take, though.  In Canada the current approach is to stiffen the penalty for drawing one’s pension early.  Currently you can draw CPP at age 60 but you get penalized 0.5% per month for every month early you draw it – that’s going to increase to 0.6%, meaning that you will only get 64% of your entitlement vice 70% if you start at age 60.  They’re also increasing the premium one gets for delaying drawing a pension, which they hope will persuade people still working to wait a couple of years in exchange for a larger annuity.  That could work and should be helpful.  I have to wonder how such changes might impact Social Security in the USA…

This is kind of discussion that has to be had, though, because pensions are a ticking timebomb potentially, as boomers retire, and there simply aren’t as many workers coming in behind them – and well – there’s not as many growing up either… but that’s something for another entry.  The key is, it’s going to take createive ideas and not political dogma to get things going again, and that will take a lot of dialogue that we all need to be involved in.

Miscellany – A bunch of different things really.

Well, Captain Robert Semrau, who I mentioned in a previous post, has been acquitted of second degree murder by a jury in his court martial.  They did, however, convict him of the offence of disgraceful conduct, which can carry a prison term up to five years.  The sentence has not been passed yet, and there’s no indication of what will happen.  I think the jury must really have struggled with it, and now a judge will too.  Capt Semrau is a model citizen by most accounts, other than this event which was the product of a very, very unusual set of circumstances.

I hope it’s a lenient sentence that doesn’t end his career prematurely, that would serve no justice that I can think of.

Despite that, I’ve been annoyed that some people I know continue to be outraged that the matter ever saw a courtroom.  I cannot see any other way it could have been handled.  The allegations were made by other Canadian soldiers obviously uncomfortable with the event, who felt that their sense of duty compelled them to report it.  Once the allegations were made an investigation must begin and progress in the normal manner.  CFNIS decided that there was sufficient evidence to refer a charge, which is their job.  Those who think that the whole thing should have been swept under the rug should remind themselves of the Somalia Affair and the price that was paid in the end by an entire Regiment for transgressions of a few who could have been dealt with individually had the “system” worked.

I’m watching with interest the big military procurement decisions announced by the government.  They’re finally going to get the ball rolling on replacing our ancient AOR (replenishment/supply ships) fleet.  HMCS Protecteur & HMCS Provider are pretty significant assets to allow the global operation of the Canadian Navy, and it’s time to replace them.  It won’t be long before the Tribal-class/DDH-280 destroyers are going to need to be paid off, too.  I laughed a few weeks ago touring the USS Wasp and being told by the “guide” how the ship was likely to be paid off soon because it was 20 years old.  The newest frigates in the Canadian Navy’s fleet are nearly 20 years old.

Fleet week was interesting, though.  I was impressed the the Danish patrol ship I toured, HDMS Ejnar Mikkelson.  Apparently it’s primarily a coastal patrol boat used in the Arctic.  It’s small, versatile, carries a motor launch that can be fired out off a ramp at the rear in addition to a zodiac, and is lightly armed.  It strikes me that this is what we have the Kingston-class MCDVs for, but I think this Danish ship was a lot more modern and better equipped.  That’s the sort of thing it seems we should be looking at, I’d think.  The Danish Navy is something of a good analogue for us, perhaps – their Absalon-class ships are another potentially good example of ships we would get use out of.

Any time a government announces such big purchases there is of course the drama of deciding what else the money could be spent on.  This of course is an age-old economic quandary – the guns or butter problem.  In particular with the announcement of the single-source procurement of the F-35 Lightning II, there’s been a lot of that.  The 65 jets will cost a total of $16 billion when maintenance contracts are factored in over 20 years.  One has to wonder, do we really actually need them?  There’s that – and the single source thing – although realistically, we’ve already invested a fortune in the program, there’s lots of contracts coming to Canada, and there is no other 5th Generation fighter out there – though I laugh that it is single engine, and we bought out CF-18 Hornets over other alternatives like the F-16 because it was twin-engine and single was deemed to risky for sovereignty patrols over the Arctic.  We do need something to replace the Hornets and we need more naval capability to be able to assert our sovereignty over the north.  It’s not so much fun to know that it costs money, but it’s also necessary.

This ties into what’s been getting me a lot listening to all this stumping in the States – and it’s been in the press a lot – listening to these Republicans going on about the deficit and about how they are going to balance the budget – but David Gregory on Meet The Press tried to pin Mitch McConnell down to what, specifically, he would do in order to get the budget balanced – what difficult choices he’d make, and all he did was spin.  Chris Matthews did the same to Mike Pence, again lots of waffling, but nothing actually believable or concrete.

The fact is, much of the worst of the US budget deficit mess is the product of Republicans making stupid decisions like invading Iraq and the massive cost of the US military – the sacred cow that no one will admit to wanting – needing to cut.  It’s interesting that it draws parallels to the fall of various Empires – the cost of legions to defend the Empire saps the treasury to the point that it all collapses on itself.  I fear that could happen to the USA, and reading stuff like Jared Diamond’s Collapse, which incidentally is an amazing read, doesn’t dispel a lot of that fear.  None of the civilizations I’ve read about so far – all thriving – saw their end coming until it was too late to do anything to stop it.

This is where the debate in the States has to head.  Not to the stupidity of absurd talking points that are being raised by the teabaggers or their deluded prophet Glenn Beck et al, but to real decisions about how to get the spending on the government under real control, without any sacred cows, but in a way that makes the country actually stronger, instead of just making the insanely rich richer while the poor get more fucked over and the middle class just hollows out.  It’s not glib to say that the middle class as my parents’ generation knew it seems to be disappearing fast.  The idea of a single income household seems to be more and more preposterous to people I know, most of whom are now married and starting to have kids.  At least I don’t have that burden and don’t ever plan to.  It kind of makes me wonder why I care about the future so much – without any progeny to care about, when I’m gone none of it matters to me anymore anyhow!  I guess it’s that I wonder about how bad things could become in my lifetime, given the accelerating rate at which we seem able to fuck things up.

I guess I’ll just ride it all out and keep being an interested observer, once in a while writing some nonsense in a blog I hope some folks might find profound…

A Short Musing On Cheap Oil

Between the European fiscal mess, the BP oil disaster, North Korea sinking a South Korean Navy ship, and the fact that the weather in Nova Scotia is just finally starting to get nice, I’ve been unable to really focus on any particular issue or event in the world to really pump out good blog fodder.  (That, of course, assumes that I do in the first place, which may or may not be the case).

I’m on an environmental kick lately though, and I think I have always had that streak.  Right now it’s being fuelled by a few desires – mainly market signals, which are to someone who likes the idea of markets creating allocative efficiency, is good.  I made what I think is a very wise decision a while back to buy a diesel-fuelled car.  At the time I bought it, I had a fairly long commute and ideas about great long roadtrips, and the fact that it gets far better mileage was something I welcomed.  In fact, my biggest grip at the time (October 2005)  was that there were so few diesel models on offer in North America.  Europe has always been far ahead of us there.

Diesel engines, of course, are not really as clean as gasoline engines, litre for litre of fuel consumption – but the advantage comes from using less fuel per kilometre travelled.  I have two Volkswagens – a Rabbit and a Jetta.  The former is gasoline-engined, the latter diesel.  The Rabbit’s a little lighter in curb weight but uses about 50% more fuel for travelling.  I know this because I’ve been using an iPhone app to track it, just out of interest mostly, but also in the vain hope that I’ll be able to claim some of it as a tax deduction.

The whole thing about markets and what I was starting into last night is a belief I have that we don’t pay anywhere near adequate cost for things like fuel – particular petroleum and other non-renewables.  The simplistic solution is to use taxation to adjust the cost to something more realistic and then use the tax revenues toward remeditation.  Great idea, but I can already hear the more reasonable complaints, and I’d echo them – the funds wouldn’t go into remediation or alternatives, they’d go into general revenues and be squandered in the manner practiced so effectively by governments.

I saw the same thing living in Ontario with the Liberal Government’s “OHIP Levy” that “wasn’t a tax”, even though it was determined by income and collected by payroll deductions.  The money didn’t get earmarked specifically for healthcare, it just went into general accounts and disappeared with no real explanation.

Never mind that jacking up the price of a significant input without good alternatives would be economically very destructive and probably counterproductive in the end.  We need to have a little more complex and working solution that that – it’ll take thinking, something that some in the realm of politics seem woefully unwilling to do in any way.

The trick, I would think, lies in expanding the range of alternative fuels available, and alternatives to driving – rail and other mass transit infrastructure.  Until they become more accepted they’d need some subsidization or tax incentives to expand.  This is something that is being tried in Canada, where monthly transit passes attract a federal tax credit – but it’s on the lowest tax rate of 15.5%.  I’d like to see the passes attract a higher credit rate – maybe against the maximum federal income tax rate.

At the same time as this expansion happens, there then can be efforts to disincentivize driving – at least in areas where there’s effective mass transit.  The issue that I can see with the idea of promoting alternatives to driving is that they work well in urban areas, but in a country like Canada – or the United States, too – where there are huge amounts of people living in rural areas where transit simply isn’t an alternative, is that you’ll punish those folks – and the resentment will build quickly.

It’s not an easy thing to think through – how to get us off our addiction to cheap oil, when the alternatives are slow coming and not universally available.  It has to be something one feels in the wallet in order to create incentive to change – but how to make it happen without causing too much adjustment pain.  Or maybe, just maybe, we have to consider that the pain is necessary and just take the big shock at once, get it over with, like ripping a bandaid off – but I don’t think that’s possible given the amount of things that would change quickly.

The trick is to find that sort of balance that allows us to wean ourselves off – the incentives to develop alternatives to oil, and to find ways to maximize what we have – the ways in which we have wasted the resources over the past 150 or so years – making lots of cheap plastic junk, burning off usable gas as a byproduct, building ridiculously inefficient cars because it didn’t matter, all of that has to end and be used as a base point from which to improve.  We’ve put people on the moon, we have to be able to solve this sort of problem, surely.

The Bank Tax

Prime Minister Harper is actually doing his job on one current issue and I’m glad to see it.  He’s basically told the European Union to go pound salt on their plan to impose some manner of global levy on banks as a form of “insurance” against future financial catastrophes.  I support this for a few reasons.

First, primarily, there is the issue of national sovereignty.  I’m very, very wary of the idea of supranational taxes and laws, particularly when they seem to be a sort of punitive measure against a particularly industry.  While the idea might have some merit it must be up to national governments – elected and accountable to citizens – to make such decisions.  While building a consensus among many countries to develop such a system is fine and good, it must absolutely be up to national governments to decide for themselves whether to participate.  While the EU member states may have adopted some manner of supranational governance, Canada has not and should not.

Along that vein, the other key issue is this: Canada’s banking industry is quite conservative and well-managed.  We were the only G8 nation which did not have to bail out its banking sector because Canada’s banks didn’t expose themselves to the sort of nonsense that triggered the nightmares that struck the rest of the world.  The reality was that the effects felt in Canada were primarily the ripples of the problems of other nations.  When Canadian bank stocks tanked, it was a tremendous buying opportunity due to the fact that anyone with knowledge of the industry in Canada would have know (or ought to have known) that the direct impact would be minor.

I will not try to claim I saw it all coming and could have predicted the catastrophe, but even in 2006 I started to wonder about the mortgage market in the USA after learning about how ARMs worked and how Americans in particular were addicted to equity take outs.  When it came to the derivatives market, well, I never totally understood it.  I started the Chartered Financial Analyst designation process a few years ago and remember learning about things like CDOs and other derivatives and the whole thing seemed like sham.  What I’ll call “first derivatives” – puts, calls, futures – that stuff made sense, they have a good role to play in the financial sector but I never got the second, third, and beyond derivatives.  It seemed like a house of cards to me then – and well, it of course turned out to be.

The next concern I have is the classic insurance dilemma, the moral hazard problem.  The IMF’s “Financial Stability Contribution” is essentially just an insurance fund.  While the IMF claims it will discourage taking risks, the reality is that insurance in fact does exactly the opposite.  Just like bailouts, insurance distorts perception of risk because the expectation of indemnification means that the risk’s potential payoffs are more likely to outweigh the potential costs.  I touched on moral hazard problems in a previous post about health insurance.

The second IMF proposition, the Financial Activates Tax strikes me as similarly ridiculous.  It annoys me to no end that people villify banks for having the audacity to a) make money and b) pay their people well for doing so.  The whole concept of our economic system is the pursuit of profits.  Having worked in retail banking I was constantly infuriated by people thinking we were some kind of public service not entitled to make a profit for providing the services we provide.  I do understand the anger that people had at the amount being paid out to top dogs at companies that had to be saved from failure – and I had no problem with the US government’s effort to cap salaries and bonuses at firms which took bailouts – but a special, permanent tax?  That makes no sense to me at all.  To the best of my understanding, this would be on salaries in general.  Banks pay their employees extremely well in Canada, and a tax like that would actually incentivize cost cutting wherever possible.  There’s nothing particularly smart about that to me.

Not imposing such a tax could support the expansion of foreign banks in Canada, something which was anticipated when it became clearer that Canadian banks were going to come through the last crisis so strongly.  I’d personally love to see that happen – both because presumably any foreign bank locating itself more in Canada would have to play by our rules, and presumably, they would create more good-paying jobs.

I think overall I like the position that Bank of Canada Governor Mark Carney expressed in today’s Globe And Mail – that the whole bank tax discussion is a distraction from real issues, and ridiculous to begin with (I think he said “foolish”, actually).  I, like him, would prefer to see efforts to develop better regulatory structures for the industry.  It would seem like Canada would be a good place to look for ideas there, since we seem to have done a pretty good job of that.

Overall I don’t think tax measures are particularly effective means to control any particular business practice.  Excessive taxation just increases incentives for businesses to relocate to more tax friendly jurisdictions.  There’s a reason, for example, that U-Haul’s corporate headquarters is located in Arizona (and all its vehicles registered there).  There’s a reason why so many US corporations are registered in Delaware.  There’s a reason why most merchant ships fly flags of convenience like Liberia, Bahamas, etc.  Imposition of taxes creates incentives to avoid them, and I don’t see this being any different.  Investment banking will simply head more offshore to less regulated jurisdictions.  There’s no reason to believe otherwise.

I’m firmly convinced that well-thought out, practical regulation will suffice to help stave off a similar crisis.  It’s naive to believe that there will never be any further financial and economic crises, there will be something else (likely in 5-7 years, that’s just how it goes), but at least we can prevent a repeat of the kind of catastrophe we just saw.  The reality of the world is a reasonable free market system is the best way to deliver allocative efficiency, so heavy-handed regulation is not in anyone’s interest, but that doesn’t mean that the market can’t be massaged through prudent rules.

Climate Change Deniers – The New Truthers?

Nothing staggers and irritates me more than the ignorance of people who want to ignore climate change.  The folks who say “Hey, it’s snowing in Texas, global warming must be a big lie” stagger me because they’re just so stupid.  Never mind the fact that climate and weather aren’t the same thing, or the fact that bizarre weather patterns stem from unusual temperatures in parts of the oceans, it’s just ridiculous that these people have decided that massive heaps of peer-reviewed science are somehow “junk” because the contrived nonsense pumped out by deniers says so.

It’s funny, because one of the standard nonsense arguments that theists like to bring up when I get entangled with them is something called “Pascal’s Wager”.  The argument basically considered the possible outcomes of choosing to believe of not believe in god, against the possibility of god ecisting or not existing.  Pascal basically made the argument that if you believed in god and he didn’t exist, the consequence was basically nothing, but if you didn’t believe, and god did exist then the consequences were disastrous.

In a theological debate, the premise is a little ridiculous, it doesn’t hold any logical basis, though I’m sure for many people it’s reason enough to keep faith.

I saw a video a while ago which basically translated Pascal’s Wager to the climate change debate.  There’s four possible outcomes.  It’s either real or not real, and we either act or we don’t.  If it’s not real and we don’t act, that’s great.  If it’s not real and we act, well, we could still potentially benefit a great deal from developing new technologies and ideas that still conserve resources, make for cleaner air, etc.  If it’s real and we act, we could greatly improve our lives and possibly save ourselves as a species.  If it’s real and we don’t act – well, the results will be determined by just how severe the reality is.

The reality is that most of the changes we would need to make to address climate change would benefit us in the long run by conserving non-renewable resources like oil, natural gas, and coal.  The fact is that burning these fuels has a variety of negative environmental consquences besides CO2 production that we know to be altering the climate, as well as things likes the pH of seawater.  I say we know this because it is fact, supported with piles of research.  Burning oil releases sulphur and nitrogen oxides which create smog and acid rain.  Coal burning produces those, but also emits things like mercury into the air.

So what happens if we act to reduce those emissions?  Well, we have to come up with a way to do so – and cap & trade is one method suggested.  This sort of thing isn’t really new – I remember back in Costa Rica when I was there in 1998 that carbon offsetting and trading was being discussed then – primarily as a means to support ecologically-minded charities’ efforts to buy up rainforest tracts to preserve them.  There’s of course the argument that India & China won’t play along – but this to me is sort of a variation of the “tu quoque” fallacy.  They won’t play along, why then should we?

Ultimately, I don’t believe that not playing along gives a great competitive advantage.  Just because some other nations won’t play along right away doesn’t mean that there’s no point in trying to do so.  The fact is, as well, that the kind of advancements we can make to improve out ecological impact will likely lead to new job, new industries, to progress.  It is an inescapable fact that the “old” economy of much of North America, the manufacturing economy as we knew, is mostly done.  No longer can we expect to lead in manufacturing of simple goods – cheaper labour abroad in places like China have made that clear.  We can’t base an economy on selling hamburgers and haircuts to each other, either – so it’s clear at least to me that if we want to continue to enjoy prosperity we need to seek opportunities to strike out into new fields.

I’m looking forward to building a new home in the next few months, and putting much effort into using new technologies to make it more efficient.  As planned for now, we’ll be building an R2000+/LEED home, roughed for solar power/water heating (though I won’t be able to put it in right away), using a heat pump rather than conventional HVAC, etc.  My criteria is that the investments I make have to be ones that will actually provide a cost benefit – so no wind turbine as my research suggests that it’s not currently a benefit, but I think we’ll be able to do a lot of good.

I want this technology to be available – and I want to see my neighbours developing it and profiting from it.  That’s why we need to get to work on the problem, instead of trying to obfuscate and decate what is becoming more and more obviously fact.

Incidentally, if you’re a climate change skeptic, Canadian Senator Grant Mitchell, who’s an avid Twitter user, sent out this link from the Pembina Institute that inspired this whole post.  It’s well worth a read:

This epiphany I had this morning

This morning I tweeted an amazing little epiphany I had. Not that in any way I support terrorism or in particular radical Islam, but I think Osama bin Laden has it all wrong.

Lately he stated his goal or ideal is to destroy the US economy and kill Americans. Lately, he’s been not exactly effective at that. Perhaps AQ inspired people in Iraq and Afghanistan have gotten some “success” sadly killing soldiers with IEDs, but that’s not really accomplishing his aim. And when it’s people I know it just makes me more upset.

Instead, the US Supreme Court seems to have provided a better opportunity. Osama should just fund the health insurance lobby and the Republican Party. Delaying meaningful health insurance is killing Americans at a much faster pace than any of Al Qaeda’s pathetic efforts, and America’s conservative movement would likely waste no time getting back to destroying the US economy if they got back into power. It just takes some financial support.

Now, this doesn’t mean that Osama can simply call it a day with the Al Qaeda thing – these cons will need a pretty significant boogieman to justify blowing trillions on another foreign misadventure, whether it’s in Yemen, Sudan, or Somalia. It’ll make the process just work faster that way.

As for me, well, I’ll just keep trying to persuade people that there are some major things America needs to get around to fixing, fast. Maybe last night’s speech will inspire some Dems to get on with their job and make the USA a proud and prosperous nation and an inspiration to all again.