Embracing Redundancy

We've all been sold a bill of goods.

All the time we are told that efficiency, productivity and profitability are the most important things in the world. Heck, we've even folded sustainability into this model. As we continue to mix more and more ingredients into this cake we're increasingly at risk of choking ourselves to death as we consume it.

Whoa, Anon, you are going off half baked dude.

I'm afraid not. Let me dish out some examples that will help you understand what I'm going on about. As many of you will already know there are companies such as Monsanto that are locking up the worlds food supply by accumulating locked in farmers worldwide. Their profits are good. Yay, isn't that wonderful.

Alternately, most of the western world purchases food products from increasingly large operations located further and further away. We've got increasing economies of scale. Our food is grown or raised in another country. We've shaved five cents off the price of each of our meals. Hooray! The world is a better place.

We're all busy working eight hours a day, if we are lucky enough to have full employment. Our spouses are busy working too. We're all too stressed and tired to raise our children effectively. We have to do this to afford health care, education, good food and a safe place to live. Thank goodness some of our lives are going so well.

Anon, you've described a veritable utopia, what could possibly be the problem?

Yes, I know, if you buy the corporate mantra we do appear to have a utopia, for corporations. However, even these stalwarts of progress and common good for all mankind, if it generates a profit, have blind spots. What I'm talking about is risk. We've all seen risks manifest themselves recently.

Perhaps you felt the impact of the global financial crisis? If not, perhaps you've at least seen others impacted by that event? Luckily, we saw the tip of the iceberg just in time, panicked, yanked on the wheel, and avoided a directly collision. By we I mean the world. Risk is a tricky business and we aren't managing it well.

Perhaps you have noticed natural disasters happening here and there from time to time? What happens when the infrastructure is no longer available for us? How does food get delivered? How do people stay warm? How do people earn money? If they are lucky, and the disaster didn't knock out too much there will be aid distributed while recovery efforts take place. This is true in places like New Orleans, more recently New York, as well as more remote places.

Anon, are you going to let me know why you are talking about redundancy? Who cares about natural disasters?

Don't rush me, I'm getting there. First, let me ask you a few questions. What happens when Monsanto eventually releases a strain of food that has some type of unexpected catastrophic failure? What happens when a man made emergency interrupts the flow of oil and prices skyrocket for months? What happens when a single sourced item from another country is no longer available and we depend on it completely?

Let me give you a more personal example. All the food in local grocery stores arrives via trucks. If there is a hurricane and a few key roads are knocked out then there will be no trucks for some period of time. How long do you think the food will last? What if a local power plant has some type of minor catastrophe and the power goes out. If you have electric heating what will you do?

These are examples of very efficient systems that have no redundancy. We are making ourselves so efficient that we cannot handle interruptions. Companies often run on a "just in time delivery" principle in order to reduce inventory costs. Competitors merge and facilities get larger so that more customers can be served at lower prices. The economic principle of comparative advantage has companies focus on core value alone such that they cannot provide a service without a large interlocking set of other services.

Whoa, dude, don't go all survivalist on me!

Don't worry, I'm not a survivalist but I would mention that most movements have at least a kernel of accuracy under them somewhere or they would not attract followers. Survivalists are right in that we are designing inflexibility and vulnerability into our homes, our communities, our food supplies, our infrastructure our businesses and even our nations. Seeking profit is not the same as building a robust system.

Some amount of redundancy is appropriate. If I'm growing vegetables in my backyard then I might be able to rely on external resources slightly less the next time a hurricane comes through my neighborhood and takes out chunks of infrastructure. If we embrace some level of renewable energy then we might not be quite as susceptible to wild swings in energy prices due to world events.

If we ran our companies in a slightly less efficient manner, while still ensuring profitability, then we might be able to withstand interruptions in supply chains without immediately curtailing production. If we grew our food with a little less concern for absolutely maximizing our profitability we might be able to reduce our risk on one single mistake causing a massive catastrophe.

A little bit of redundancy would not hurt us. It would in fact increase chances of dealing with both man-made and natural disasters effectively.

I don't get it, what's your problem with corporations?

Weren't you listening? I don't have any problem with corporations. I don't even have a problem with profits. I'll even agree that the profit motive is indeed probably the most efficient way to apportion capital to competing uses.

I have a problem with the fact that the world has created a huge complex system that is optimizing itself for profits. There are things that the quest for profits does not take into account. For example, it might be acceptable to run a manufacturing company in North America that produces an 8% return on investment instead of running it overseas for a 12% return on investment.

I mean, we can certainly argue the economics of comparative advantage and decide that only the most advantageous efforts should be allowed. However, what happens if all out meat comes from overseas and there is a disease outbreak in the source country? Wouldn't it be great to have a reasonable sized herd somewhere else to help recover from such a disaster?

We need to have backup plans -- but they aren't efficient unless you are in a state of disaster. They will potentially impact profits and total rates of return on investment. They will also reduce our exposure to systemic risk. This risk has been slowly growing for a long time and we should think about where it is leading us.

What happens the next time there is an asteroid collision with Earth? What happens when a new volcano erupts and creates a cloud covering half the planet? What happens when there is a massive crop failure or worldwide epidemic affecting animals or humans? How are we going to deal with these things when our resources are so "efficient" that none of us know anything except our particular small slice of work and there are no "replacements" around to deal with the loss of input from affected areas.

I, for one, would like to see just a little bit of redundancy remain in the world. I also wouldn't mind a little less pressure to be more and more efficient during working hours so I could be a little more human when at home with the family. Maybe we could even employ a few more people and offer a little bit more job security.

Hmm, you might have a point, but I still think you are half baked.

Hacks and Douchebags

Well, well, well. It gets more interesting all the time.

Here we have a hack writing an opinion article who's real purpose is to blame unions for the ills facing our economy in terms of the Caterpillar situation.

Nasty As Caterpiller May Be
Sid Ryan, president of the Ontario Federation of Labour, vowed to mobilize workers from across the province to help the CAW stop “scabs” from crossing their picket lines. There was the usual handwringing in the press that the dispute could become “volatile,” journalistic code for violence. All of this was discussed as if it were the most normal thing in the world, in the 21st century, to be resolving disputes by the use of hundreds of big heavy men to prevent or intimidate others from going about their lawful business: physical force, in other words.

Now, I don't call him a hack because I'm necessarily pro-union. I think there are other issues at work that are very worthy of discussion if you wish to pretend to offer an economic analysis:

• A strong Canadian currency hurts us.
• Desperate levels of incentives from US quarters hurts us.
• And yes, higher wages do certainly hurt us.

Blaming the unions for all our problems, or government efforts to compete with US subsidization, is the problem I have with all this.

As if this isn't bad enough we have douchebag economists making appearances for some back patting on this trite little article.

I think I see something here. We are having partisan viewpoints being spun, or at least positively commented on, from both the educational and media arenas.

We're being invaded by hacks and douchebags. Lucky us.

An Alternate Economic Strategy

It has become clear that the Harper government is all about exploiting resources. In particular, there is a large push to shrink government, curtail government programs, and aggressively expand natural resource exploitation even at the risk of alienating a large segment of the population - which they are willing to brand as radicals or even enemies of the state.

It's also clear that Canada's sustainability indicators, perhaps meant to demonstrate sustainability in terms of our so-called sustainable development strategy, are a joke. Sustainability is not simply about pollution levels. Sadly, Environment Canada is now simply a department meant to foster resource development.

---

A CANADIAN ECONOMIC STRATEGY FOR SUSTAINABILITY

We know that there are three or four high probability scenarios that will have large economic consequences on the world economy:

• Reduced petrocarbon availability.
• Global climate change.
• Systemic economic dependency and fragility.
• Stratification of economic participation

Based on these issues, and the need to better integrate input from all sectors of Canadian society, the following strategies have been constructed.

Constructive Carbon Policy

It's clear that our dependence on oil and gas will eventually consume available reserves and have destructive effects on the climate in the progress. We must find a way to break our addiction to oil while working towards protecting ourselves from catastrophic climatic shifts.

Canada should implement a National Energy Tax (NET). This tax would impose an additional cost to the consumption of gas, oil and electricity. Basically, all of our high-energy products have a well defined sales path that would make it easy to calculate the amount of energy consumed and allow taxation at a relatively low rate, such as $1/barrel of oil equivalent.

Energy producers selling non-carbon based renewable energy resources would apply to be granted tax collection exemptions based on the percentage of energy provided from renewable sources.

Monies collected by this tax would be earmarked specifically for the development and promotion of sustainability practices and policies. These would include scientific research, experimental pilot projects, promotion of energy conservation, and promotion of sustainable practices. Such a program would fund and encourage sustainable energy practices until such a time as carbon based energy sources were no longer a major percentage of our energy consumption. 

A reasonable tax rate, applied to all consumers, would have an insignificant direct impact on current energy suppliers but it would exert a subtle pressure on all consumers towards a preference for renewable energy sources. This is a responsible way to move towards reduced petrocarbon reliance and reduced impact on our climate.

Systemic Dependencies

The recent global financial crisis demonstrates how interdependent the world's economies have become. It is clear that we must trade with partners but it is also clear that we must be able to protect ourselves from the risks involved in doing so.

Canada should create a department of Systemic Risk Research (SRR). This department will study and report on risks to Canada originating from economic sectors such as global finance, agriculture, and resource depletion.

Risk, when realized, has a very large cost. Risk reduction, often thought of as hedging in the business word, is a prudent way to manage risks. The SRR department will be responsible for publishing policy proposals in terms of protecting the public good for consideration by the general public as well as world economists. In particular, the concept of public good and the governments role in determining how it can be protected are vital to the public decision making process.

First Peoples Consultancy

Our First Peoples have a long history of living from the land and respecting nature. Canada should, as a strategy, connect with this history and provide incentives for the development of Native Canadian ability to promote sustainable land use within Canada and internationally.

At a rough guess making available unlimited higher education in history, economics, business, politics and environmental issues would be a good start. Western society speaks in terms of money, technology, business and politics -- we can't hear anything else.

This isn't an attempt to bring anything to Native Canadians, participation is obviously voluntary, but it is instead an attempt to bring the knowledge of Native Canadians to both Canada and the world. Finding a way to inject their philosophies in term of environmental stewardship into our western discourse could have a striking effect on the long term course of humanity which, quite frankly, faces a challenging future.

Economic Opportunities

We need to understand that economic opportunities, and in particular widespread economic participation, are the basis for a healthy and happy society. We also need to understand that there are always taxes, laws and regulations in a civilized society. However, in recent years lobbyists and corporate interests have been able to direct government activity specifically to their benefit with respect to tax breaks, legal changes and relaxed regulations.

Canada should create a taxation policy that favors the working class. Taxes on wage income should be at the lowest possible rate. Taxes on corporate profits and capital gains should be at a higher rate as it is blatantly obvious that lower income workers direct all their income back into the economy while higher income entities do not.

Canada should create a department of Economic Mobility and Participation (EMP). This department will develop policies and programs to enable Canadians to re-enter the education system or retrain for higher demand positions at any stage of life. Working with accredited education institutions in all regions of the nation EMP will provide and administer a nationally recognized exemption exam policy which will allow all Canadians to acquire university credits for courses through experience and independent study.

EMP will provide guidance to government at the community and regional levels with respect to removing the obstacles to economic reintegration faced by lower income citizens. In particular, this may involve dealing with existing debt levels, housing costs, educational costs, child care and other items that make it difficult to take the time needed to develop skills and education needed for an improved economic outcome.

Harper's Agenda and Playbook

Well, I wish I had of been wrong, but it all adds up so far. I'm sure more will show up, in terms of graft, when cracks finally show up in Harper's government.

First, do yourself a favor and read Federal Documents Spark Outcry by Oil Sands Critics.

In the document, environmental organizations and aboriginal groups are shown as "adversaries." Industry associations, energy companies and the National Energy Board – which is supposed to serve as an independent body evaluating new projects – are listed as "allies."

Now lets rewind all the way back to the Chaquita Banana nonsense.

This is a fantastic way to change the debate to an issue that doesn't really matter. Has anyone seriously thought that we would not be able to sell our oil? Come on. This is much ado about nothing. Actually, I'm sure the outrage has more to do with the fact the claim is based on the carbon footprint reasoning than anything else.

Soon we hear about a National Energy Strategy that may be in the works.

This answer to this question is simple. So that either BC can be forced to accept a pipeline, the government of BC can be given a means of avoiding blame, or most likely provide a means of funneling enough money around to ensure public opinion is ignored.

Before long we start to hear the government use Radicals as a description for pipeline opposition.

Unfortunately, there are environmental and other radical groups that would seek to block this opportunity to diversify our trade. Their goal is to stop any major project no matter what the cost to Canadian families in lost jobs and economic growth.

The whole issue turned into the foreign interests nonsense by Ethical Oil and Our Decision - a pair of government front groups.

Now, as you know I've been stating that it's obvious that Ethical Decision (really, why pretend they are truly different organizations) is a government shill wrapped in the pretense of being a grass-roots organization. If you were paying attention a few weeks ago you would have seen clear synchronization between Harper, key players, and the Ethical Decision team.

Recently Harper spoke at the Crown-First Nations Gathering and I think you can read between the lines a bit.

I've ignored you completely, ignored the Kelowna accord, and now that I'm leading a majority government I have the ability to deal with you from a position of strength without having to worry about the collapse of my government. This bodes well for me.

And, tonight, coincident with the first story, Harper has unveiled his Grand Plan at Davos.

Although short on details, Mr. Harper’s speech to the World Economic Forum in Davos, Switzerland, on Thursday made clear the sweep of his ambition. He will change how Canadians finance their retirement. He will overhaul the immigration system. He will make oil and gas exports to Asia a “national priority” and aggressively pursue free trade in India and Europe.

Our government has a plan born in the days of conflict between East, West and a Federalist Ottawa. Harper, a product of the West's anger over that period is now rewriting Canada in a West first manner. I have no desire to condemn the West but I don't think any one region should be the basis for a national grand plan.

The Harper government is on the wrong side of history. We are facing climate change issues and now is the time to start getting ready for the issues that we can already see on the way. We don't need to cut corporate taxes. We don't need to build prisons. We don't need to dismantle the things that brought Canadians pride for generations. We don't need to import right wing thinking from the USA.

I want my Canada back. I've been calling the Tar Sands the Prime Minister's undoing, his Moby Dick. I hope I'm right. We've got to dump this "grand plan" and get things back on track before we've gone completely over the cliff.  A massive shift to corporatism is not what we need. The world is starting to question the merits of capitalism in its current form while we are about to embrace it more tightly than ever before...

Capital Gains Tax Arguments

Well, south of the border Mitt Romney released his tax records.

Death and Taxes

Guess what, everybody is discussing whether or not capital gains taxes should be at a higher rate or not. Of course, we have the usual douchebag economics arguments:

• Double taxation: corporations already pay taxes on their earnings so capital gains and/or dividends are in essence already taxed.
• Job creation: lower taxes will foster jobs growth while higher taxes will drive away jobs.

Once again, we have kernels of truth in there, but the arguments are out of touch with the way things are working in the real world now.

Double Taxation

The concept of double taxation suggests that companies have no recourse and will be forced to pass 100% of their taxation costs to the taxpayer. Neither of these statements is true.  Companies, as they are playing on a level playing field, will all face the same situation. They will seek to maximize returns which will involve pressures on quality, prices, profitability and innovation.

Two of these forces act on consumers, one acts of economic efficiency and one acts on the shareholder. However, don't forget, consumers have the ability to invest for capital gains within a retirement plan -- problem solved. Those who aren't too rich to require a retirement plan, or won't max out their contribution limits, are able to skip right past this double taxation issue if they wish. Think about it.

Job Creation

Right now, at the current rate of corporate and capital gains taxes, companies are sitting on record amounts of cash. They have the ability to spend that cash and create jobs any time they so desire. Instead, companies are concerned about unpredictable events due to the recent global financial crisis. So, at a glance, we can see that taxes are not the primary driver of corporate investment -- its risk avoidance and ability to sell products. Give companies stable or rising demand and they will happily do business.

However, there is certainly truth in corporate tax rates concerning the ability for a company to earn higher rates of return in countries with lower corporate taxes.

Bonus Argument

However, I'd also like to tackle job creation and capital gains on another level. In the current economy we have people, or groups, with large amounts of capital engaging in speculative activities. Their investments are not as often translated into direct capital to be used by companies for growth and hiring. This role has been taken over by venture capitalists (not IPO's) at the start-up end and banks at the other.

Lowering taxes on the wealthy will simply put more money under leveraged speculative money management in a search for returns. Speculating on commodities and financial instruments is not a job creator for working class citizens.

Double Bonus Argument

This argument is likely to cause the most consternation. Those that are earning a significant portion of their income off of capital gains, as opposed to interest income, are already wealthy. They are not forced to work for a living and are simply letting their money ride here and there around the world. Sure, they take risk, but that's what professional money managers, due diligence and hedging are for.

We should lower income taxes on those that are performing labor in order to survive. Those who do not have to work should be paying higher taxes. If they are forced to actually do some paying work to raise their income, they will benefit greatly for it. Flip the advantages around. Make work pay and people will want to work. However, even if capital gains are taxed at a high rate, people will be happy to avoid work if they can still pocket a ton of cash while patting themselves on the back for being better than everyone else.

And, something that has no place in economics perhaps, think of this in moral terms. Why should we penalize people who are forced to spend their lives working. Those living the lives of leisure are very capable of bearing some of the load for the privilege of, in the majority of cases, being born into money. We, the working classes, have really had the wool pulled over our eyes by politicians under the influence of lobbyists.

Conclusion

I haven't put much effort into supporting my statements and yes I am certainly flying in the face of the dogma of free market capitalism. Please don't offer me the same tired old rhubarbs or political talking points -- I really do have a background in economics and I simply disagree with many of the commonly held beliefs.

Douchebag Economics

I have no argument with the vast majority of mainstream economic theory. In fact I will quickly suggest that I understand and agree with the following items:

• Competitive advantage: trading partners generate higher overall productivity via trade.
• Free market efficiency: free markets are very efficient at allocating capital between profitable activities.
• Free trade: maximizing efficiency and overall productivity between trading partners.
• Floating currencies: work to correct imbalances between trading partners.

However, be careful, there are a lot of nuances in there! Now, let's turn our attention to an article that caught my ire:

Adding Value To Our Raw Materials Won't Make Us Rich
It’s important to keep in mind that when discussing international trade, exports are costs. The purpose of engaging in international trade is to import goods and services more cheaply than we can produce ourselves; exports are the price we pay in order to obtain those imports. Productive capacity that is devoted to making things that will be exported is productive capacity that is not available for what really matters to Canadians’ economic welfare, namely, domestic consumption.

Sounds good, right? Well, I'm sure you noticed the title to this post so it will come as no surprise that I have a few issues with such a statement. The only part I agree with is that if we allocate productive capacity to one area it will not be directly available to be employed in another area. The rest has a lot of baggage riding with it.

For example, exports are not purely costs. To be ridiculously hypothetical we could allow tankers to siphon fresh water from coastal lakes and rivers for delivery to foreign parched lands. Well, shoot, we didn't even have to lift a finger, did we. Where is this allocation of productive capacity coming from in this case?

Another less contrived example. How about some smart software programmer creates software for a local company and then sells or licenses hundreds of thousands of copies to businesses outside the country? Look, we aren't living in a purely theoretical world anymore, and it's douchebag economics to present conclusions based on assumptions that we are.

Now, let's consider what we do with all this cash sitting in Canadian coffers due to exports. Yes, we could certainly make sure we spend all of it on trinkets and crap sold at Nmart if we wanted to. However, there is a concept known as investment as well. What if we decided to buy a stake in PetroChina or more realistically an Australian coal exporter? Oh no. Now we have expected capital gains or even a revenue stream magically arriving in our country. According to douchebag economics we'll have to import more crap for sure!

Sort of a side topic but I also have issues with how douchebag economics deals with unemployment. For example, if we are sitting around with non-elective unemployment then it's strange to suggest that further optimization, so that we get rid of well paying jobs in exchange for lower valued jobs, is going to be good for Canada. A higher paid populace with high levels of employment can lighten the tax burden for all, by spreading the load across more upper income individuals, while simultaneously reducing load on social assistance programs.

Finally, I consider it douchebag economics to suggest that the buying of more crap, in total, is more important than making sure that a larger number of Canadians are participating in the economy in a way that allows them to earn a good income, buy the things they need, and raise a family. Of course, these are somewhat social issues and can't easily be measured in dollars. Douchebag economics thinks that everything that matters is expressed in total dollars and absolute efficiency. It just isn't so.

While heading out of the domain of the quoted article I'll give you another example. Let's assume Canada decides to stop producing finished wood products and ship raw lumber to the USA. If we have 20,000 people employed in that field then we'll be putting those people into other industries as the jobs are lost. Yes, all true. However, let's say we shut down all finished wood product work overnight. I'd like douchebag economics to tell me the impact that this will have on real people today in exchange for longer term efficiency tomorrow.

When you see economics being spouted in the media you really have to take it with a grain of salt. Generally, think tanks or other motivated parties are spewing crap in order to promote a political or financial viewpoint that benefits someone.

Capitalism is the Crisis

I know some people think that the profit motive is perfect but it's not. It's incredibly efficient at allocating resources but it doesn't take into account the needs of human beings that aren't expressed in terms of profit and expense:

This is the full video, from YouTube.

You may want to wait until you have about an hour and a half of free time before you start watching it. I'll add it to the awakening page -- especially since it's free -- where other resources are highlighted.

Radical Free Market Capitalists vs Public Good

Anyone who hasn't consumed free market think tank generated kool-aid will find truth in the following snippet:

In Defence of the Public Sphere
For longer than anyone can remember, conversations about the public sphere have been dominated by relentless bashing of everything public per se as inefficient, wasteful, and corrupt -- public transit, public services, public education, public infrastructure, public-sector unions, and so forth. 

Such bashing, accurate or otherwise, has invariably been coupled with the corollary assumption that the private sector is inherently better and more efficient. 

If the last couple of years have accomplished anything, they ought to have put the lie to that. The financial and industrial elites have been remarkably efficient at lining their own pockets (much of the time with our money), but at advancing the public good? Please.

I think you can narrow down the concept of public good by finding very obvious public bads. For example, if a company pollutes the water such that consuming it threatens health, then a public bad has occurred.

Free market economists do not always measure the cost of such a bad. In fact, free market economics doesn't measure anything that is not expressed in terms of money. The problem is that many things happen that aren't visibly defined by money.

This is the little secret of the free market economists. Or, perhaps, it shows that they can only think in terms of money. Public bads, referred to as "externalities" in economics, have simply been driven out of the public discourse. Sadly, the concept of public good has been driven out as well.

If you go back in history, you'll find that whenever something is not noticed, such as various forms of pollution, people will suffer until it can be proven that an economic activity is the source of the issue -- and only then can action finally be taken. This also explains big oils efforts to fund studies to obfuscate the nature of climate change.

Our society needs to find a way to either recreate commercial enterprise so that it is able to focus on the public good as well as profit or to recognize that there are often hidden costs that are not currently showing up on a balance sheet. This is where government is supposed to step in and protect the public interest.

The global financial crisis, for example, was brought about by a lack of governance. Rules were relaxed, activities were explicitly excluded from governance, and inappropriate levels of risk were taken. Reducing the risks to society are the reason Canadian banks were regulated -- which did reduce their ability to participate in some free market reindeer games, thankfully for us.

The idea of adding the cost to society of greenhouse emissions to the balance sheet is where the C02 cap and trade proposals originate. It would impact industries based on the size of their carbon footprint. It would force society to adjust to an economy that generated less C02. A lot of companies don't like the idea of being less profitable when having to pony up for environmental impact.

Tell me, where does the Canadian and global public good reside on the C02 issue?

Bonus reading... discussion of emissions trading on wikipedia.
Bonus reading... how corporations erode government concern for civil issues.

Where the Right Goes Wrong

I like to suggest that all sides of a debate generally bring something of value to the discussion.

With the current flavor of attack politics that we see this can often be hard to fathom. However, let's take a look at the concept of lower income level citizens and social programs that exist to support them.

What we often hear from the right is that people depend on these programs and become a burden on society. The preferred solution seems to be to cut funding and propose that everyone is personally responsible for themselves -- never mind that many effects in society are well outside the scope of personal ability to affect.

So, where does the right go wrong?

In the parlance of the right wing the policy they propose will leave the class of citizens they decry in a state that suggests many will receive less education and income than other segments of society. Strangely, these attributes are also ones that often lead to larger families and less advantages for children. What the right wing response is most likely to do is create a cycle of self-fulfilling prophecy.

What is even more strange is that the right wing often assumes that poorer people vote left as it is the left which is most likely to extend aid.

Now, let's take a look at a solution that involves elements of both left and right thinking. From the left we start with the assumption that most people do not want to be using government assistance and that they would prefer to be self-sufficient. We help them get back on track.

However, we have to be able to find what merits may exist in the right's arguments. We need to make sure that people who are on assistance for longer periods of time find it harder to stay there. We need to find ways to both help them integrate effectively into the economy and later to be more forceful in that regard. This implies all of our bleeding heart tendencies can be expressed during the first segment of an assistance event and gradually tail off into a harder nosed right wing stance.

Obviously, this is fairly superficial analysis. Even so, I hope you will realize that moving lower income individuals into higher layers of the middle class is perhaps one of the easiest ways to increase productivity, lower taxes, and reduce the ranks of those most likely to end up on social assistance of some type.

Both the bleeding heart liberals and the hard nosed conservatives actually have an ability to contribute to a more optimal solution.

Sadly, we don't get this. Our politics are broken.

We Need to Find the Money Trail

File this under the WTF column.

London plant lockout sidelines 500 workers
Electro-Motive Diesel, which makes diesel-electric locomotives and engines in London, Ont., has locked out almost 500 unionized workers after they failed to take a 50 per cent cut in wages and benefits.

Companies are using their big war chests, you know, accumulated profits, gathered during the economic downturn in order to fight unions and lower wages.

Our ideological (or idiotic) government decides its time to cut taxes on corporations. Straight out of the US wingnut party (known as the batshit crazy republican faction) playbook this is supposedly to stimulate the economy. Nice to see Harper smiling as he visits the plant a few years back... we need to find the money trail.

[ If you don't know what I mean about the link between business and government please read this. ]

Hasn't anybody figured out that economies are the result of public spending? Are we all aware that lowered wages, public and private sector layoffs, and less take home pay are actually ways to screw the economy?

Look here. Get your damned ideology out of my pocket.

On another note, somebody out there has the information needed to prove malfeasance -- we just have to pay them enough!

The Problem with Politics

The problem with politics is a lot simpler than most will believe.

What we have here is a failure to communicate. No, wait, don't run, this is not another touchy-feely let's all get along bloviation fest.

We, the public, have been fed a false dichotomy and we've been lapping it up for decades. The divisions between viewpoints have been turned into attack politics that won't allow us to accept any ideas from the the evil idiots on the other side.

The left needs to understand that many of their policies help provide a strong economy and further enrichment of and participation in the business class.

The right needs to understand that finding ways to improve peoples economic standing does not need to mean funding excesses or otherwise creating unwanted negative side effects.

There is always a grain of value, somewhere, in the policies and viewpoints of the other side. Frankly, this seems to be a lost secret of democracy. As long as corruption is not driving policy there is human thought and value being applied to issues that we should all try to understand.

I'll try to outline an example of combining the values of both sides so that in a normal world we'd be able to move forward and achieve some real progress.

Cue transition music.

Imagine if you will a land with many rich people lamenting the state of a underclass that somehow has not managed to find the same success as others. Rich people naturally assume their success is related to their own personal qualities and this naturally leads them to imagine that others are lazy, make bad decisions and otherwise simply do not deserve to succeed.

On the other hand there is also a large group of bleeding heart folks, loving their neighbor as Jesus commands of them, wanting in good faith to help the underclass. These folks believe that everyone is a saint and will do good things if only they are helped long enough for them to see the light.

Cue surprising discovery jingle.

Both groups actually want the same thing. Both groups want the underclass to somehow become more productive members of society. One group wants to punish those that don't contribute as much to the economy as they and the other wants to help but does so in way that is often a disincentive to long term changes.  Both groups discourage what they want!

The right need to stop worrying about opposing left. The left need to stop worrying about opposing the right. There is a simple solution but our politics won't let us take it.

The left need to economically justify intervention by the right to fix the situation. For example, if the underclass can be made more productive costs to society will be reduced. Drug use, violent crime, prison costs and direct financial support will all fall. Tax revenues, consumer spending and national economic strength will all rise.

Everyone is for this shit!

Specifically, the rich who are always suggesting that government is not necessary to solve these crises needs to get off its collective ass and prove it.

The uber wealthy can comb the underclass zones, find quality people who are working hard in those conditions, and invest in entrepreneurial activity. If there are no suitable people right now they can create a small private school and generate small groups of people who are capable of succeeding. These are small investments to the uber class and there are sure to be government programs or donations available to reduce the risk of this investment.

Now this is where the magic happens. As we start to pump out well educated people able to demonstrably earn and honest living we start to change the nature of the community. People see positive examples, they give each other increased opportunity, and pockets of entrepreneurial success can spread. Frankly, its the American dream, it just needs a little jump start here and there to break through the inertia.

The result of having pockets of uber wealthy invest in the success of their fellow citizens would be all the things they claim to want. They want to reduce taxes. Reducing the costs to society of non-productive citizens, even small groups at a time, as well as increasing the tax revenues that these groups contribute will immediately allow the tax burden to be lowered. They will be able to demonstrate that government is not the only way to solve societies problems -- as the current lip service to this effect is not sufficient.

Continuing down this road, in the long term, leads to an incredibly strong and vibrant economy with a vast participation in all sectors of the populace. The tax burdens that society chooses to bear will be much lighter on all involved. The economy will be to support education, a strong military, national security concerns, research and development of new technologies to overcome world changes, and peace and good will on Earth.

Okay, I snuck in that last part to see if you were paying attention.

In any case, I think you can see that the outcome is surely supported by both liberals and conservatives. Liberals really do not want to keep mass groups of unhappy populace around on the tax dole just for the chance to get a few votes. Liberals also don't really want to pay higher taxes either. Conservatives get to prove the values they are always espousing in terms of an ability to achieve public good without need for government involvement. They also achieve a stronger economy that allows them to make more money and compete more effectively within the global community.

Imagine that. Everyone wins.

How come we aren't clamoring for everyone wins politics? Why are we allowing our attention to be directed to attacking others viewpoints instead of solving the issues that we can? Is it because of static ideologies? Is it because having the populace divided and focused on petty issues allows those with power and influence to enrich themselves with less effort while we are all distracted?

Now, I'll also put the shoe on the other foot.

We liberals also have uber wealthy. Why in the heck are we not doing this ourselves? We don't need to turn to a nanny government to achieve these things. We should be able to find a way to make this use of funds a good investment that delivers a good return.

Finally, I'll decry those who decry the less productive.

Stop judging, blaming and criticizing. The result of such activity is exactly the opposite of what you want. Segments of society get angry and resist everything you are trying to say. Honestly, it isn't very Christian either. Perhaps that's the basis of the "judge not" advice that somebody once tried to give us.  I don't know but washing our hands of those that we could in fact teach how to fish is not the right road.

It's the start of new year. Let's get beyond the ideological bullshit and make shit happen.

Frackity Frack Frack

Why the rush?

Fracking Controversy
In New Brunswick, citizen groups and environmentalists opposed to fracking have been blocking roads and staging demonstrations at public meetings and government buildings. Despite the public outcry, the industry is rapidly moving ahead in the province.

...

Quebec is home to one of the largest shale formations in North America, and supporters of the industry say it could deliver $1 billion in annual royalties to the province, generating between 5,000 and 19,000 jobs.

...

"The temptation is to get in there really fast and exploit it as fast as possible," she says. "But the rock isn't going anywhere. There should be no rush to develop this resource."

No, I'm not suggesting we should wait for bogus studies to conclude whatever the people with the money decide the studies should say.  No, I'm not suggesting we need to wait for glowing public relations campaigns to convince the public to trust energy companies.

Why now?

Let's wait until the world economies are booming, the Saudi's announce their wells are drying up, and the price of energy goes through the roof!

Let's wait until other countries have found out all the potential problems that can be encountered and hopefully how to avoid those problems!

Let's wait until the amount of money coming in from these resources is so stupendously huge that we won't have second thoughts about taking the risks involved!

Our governments should be figuring out how to get the most out of the resources Canada has not simply figuring out how quickly we can utilize all of them. Let other people be quicker to jump into this -- it's not a race. Those who sell at a higher price later win.

Addendum:

Interesting link about Ohio earthquakes possibly having a relation to fracking activities.

Evan Albertan's are getting antsy about freaking fracking.

Economics: Food for Thought

I've had a fairly hefty exposure to economics.

Though I am a liberal I'll throw out the following statements:

• I agree with the theory of competitive advantage and the benefits of trade.
• Free markets are the most efficient means to allocate resources towards competing demands.

However, I'll also point out some problems in our current systems:

• Economics does not do a good job dealing with the impact of rapid changes on society.
• Free markets are not an appropriate way to deal with issues concerning non-financial public good.
• Economics personalities at prestigious institutions are often paid to write articles that support a lobbying position held by major industries without disclosure.

None of the items above should be a surprise to liberals or conservatives that have been paying attention. So, with that out of the way I'll toss out an economic concept that we can chew on based on the assumption that free markets and economic theory leave room for significant negative events.

We should consider protecting ourselves from shocks to the international economic system.

Yes, of course, I mean Canada, but this would even be more helpful if other protections were in place elsewhere.  For example, during the recent crisis China decided to invest heavily while the world experienced lower resource costs.  While this was not a "protection" per se it certainly had a protective effective in terms of helping to maintain demand and jobs in the Asia-Pacific region.

While I'll assume, perhaps incorrectly, that many people would agree with this concept, I do think there are some important questions to consider:

• What types of events should we protect against?
• How much protection can we afford and what will it cost us?

In essence this is really a case of risk analysis and trying to find some insurance to protect against that risk if things go awry. 

Is it possible that a US financial crisis impact our economic status?

The answer is certainly yes, as recent events make clear, but given the scope of our relationship with the US I'm not sure how to protect against this. Perhaps we can make sure we continue to regulate the banking system in a responsible manner so that egregious risk taking doesn't take place? This means we will limit absolute growth potential in good times but avoid some elements of a crisis -- as happened just recently.

Is it possible that a US terrorist event closes our border and halts trade for some period?

I'd like to say no but we live in a world where we can't be sure that the future might bring. What might we try to mitigate in such an event? Trade revenue, jobs, displaced citizens and vital imports would all be thrown into disarray. Should anything be stockpiled? Are there other countries that would be willing to take up additional trade with us under extraordinary circumstances since they would face similar issues?  Difficult to imagine.

Is it possible that a Middle East crisis of some sort drives oil prices up drastically?

This seems plausible. Would very high oil prices limit who could afford to buy our oil? In particular, would we be able to afford to buy our own oil or refined products? Something we could do, if we haven't already, is negotiate an emergency refined products supply level in return for guaranteed access to Canadian oil resources during a crisis. Would a small stockpile be prudent?

Is is possible that open hostilities or trade wars could cut off supplies of vital materials such as rare earths?

Given the rarity of some vital materials it is hard to imagine that this idea will never occur to anyone. Does it make sense for dependent countries to fund research into alternate materials and technologies? I know this goes against free markets in a sense but at the same time this is a situation where there is no market mechanism in place. Again, stockpiles or alternative supply agreements may be appropriate for this risk scenario.

Is it possible to mitigate the impacts of an unspecified crisis on the general public?

Perhaps. It may be possible to encourage the public to be more resilient. Instead of generalized platitudes specific goals could be given for certain types of activities or preparedness. For example, owning winter sleeping bags would help people deal with lack of energy for heating during winter months. Alternately, growing and storing small quantities of food could help reduce the crisis caused by interruptions in food supplies. In theory, it would be possible to promote such self-sufficiency by offering small annual tax incentives for certain types of emergency preparedness items.

Another question that comes to mind is why worry about any of these things?

Well, as should be abundantly clear, a strong and functioning economy is a matter of national security. This implies some level of expense can be justified in the protection of the economy from unexpected events. This also implies that some level of expense might be used to maximize the ability of the public to contribute to the economy effectively. This even implies that education and the resulting increased economic participation could be a good investment in the long run.

In summary, there are gaps in the ability of the free market and armchair economics to handle risks and public good. There may be occasions for which the government can take steps to protect the nation from rapid economic changes. There may also be occasions for which government involvement in the economy is required in order to protect the economy and hence national security.

Thoughts?