Making Canada Relevant Again- The Economic Super-Thread

[a_majoor]

Cypriot and Polish legislators are not swinging from lampposts, so the odds seem to be in favour of the political class (so far).

 

[Oldgateboatdriver]

I thought this little article on a law site I monitor is of relevance here.

http://www.mondaq.com/canada/x/270316/Corporate+Tax/Morality+and+Tax&email_access=on

 

[a_majoor]

Our government finally delivered the goods. Even though the media celebrates this victory with the usual sound of crickets, the Economist takes a much brighter view. The economic boost will go a long way to helping the government balance the books, and probably accounts for the Finance Minister suggesting there will be a "big surplus" in 2015, an otherwise rash and inexplicable comment:

http://www.economist.com/news/leaders/21588375-trade-pact-europe-points-way-global-market-services-canada-doesnt-get-any

Canada doesn’t get any sexier than this

A trade pact with Europe points the way to a global market in services
Oct 26th 2013 |From the print edition

“WORTHWHILE Canadian Initiative” is the most boring headline in history. So said Michael Kinsley, an American journalist and erstwhile contributor to these pages. The tedious title that inspired this vile slur on a worthy nation appeared above an article in the New York Times in 1986 hailing an effort to liberalise trade. Now, Canada is again proving to be a global leader in free trade—and in an exciting way.

On October 18th it announced an agreement in principle with the European Union on a Comprehensive Economic and Trade Agreement (CETA). More than a blessing for insomniacs, CETA is a prototype for bigger things to come, especially the Transatlantic Trade and Investment Partnership (TTIP) now under negotiation between the EU and the United States.

Bilateral trade agreements are bittersweet for those, like this newspaper, who want across-the-world liberalisation. Increases in trade may owe as much to diversion from countries excluded from such agreements as to genuinely new commercial activity. And their negotiation may exhaust political capital that could be better spent on global efforts. A flurry of regional deals now under discussion—which also include a huge transpacific partnership—deliberately exclude big emerging markets like China and India. They could also reduce rich-world interest in completing new global agreements through the World Trade Organisation (WTO).

Yet CETA illustrates how a regional deal can still work. The new pact does more than slash tariffs and raise agricultural quotas (though it does those too). It also takes a crack at liberalising cross-border investment and trade in services in ways that previous trade negotiations have rarely attempted. CETA would open competition for large government contracts in Canada to European firms, and grant Canadians more access to Europe’s $2.6 trillion procurement market. Under the agreement, European takeover bids of up to $1.4 billion would be treated no less favourably than domestic ones. It would also close gaps in intellectual-property rules and could allow for mutual recognition of some professional certifications, such as those for architects and engineers. The aim is to begin lowering barriers to trade in services just as past agreements removed obstacles to trade in goods: a worthy goal, since services generate about 70% of rich-world GDP.

Today Canada, tomorrow the world

This sort of “deep” integration is more ambitious than anything on the table at the WTO. Other rich countries should use it as a basis for experiments among themselves. If Canada and the EU can agree to a deal on, say, drug approvals or professional certifications, it could become a global standard. Yes, that would mean that international norms would be set on terms advantageous to the rich world. But at least it would give emerging countries clear goals to aim for: bring your accountancy qualifications up to scratch, and we can do a deal.

On its own, CETA is hardly trivial: the European Commission reckons it could boost bilateral trade by 23%, or $36 billion. But it matters most as a rehearsal for the far bigger TTIP, which will cover similar ground. Together the United States and the EU account for almost half of global output. Sadly, talks are going slowly. Barack Obama flinched at the first sound of cannon fire from French farmers. Europe is bound to be more cautious in dealing with an economy its own size, while Congress will fight harder for “Buy American” rules. But if CETA can work, it will be harder for protectionists to claim that services cannot be liberalised. That would be worthwhile.

 

[a_majoor]

I would like to see something like this done in Canada as well, to develop a much better and more responsive economic model than what various governments and agencies use. (One constant criticism of the CPI is the "basket" is adjusted to artificially supress the true rate of inflation. Looking at food and fuel prices over the past several years I would say the CPI certainly does not reflect the relity I am facing). Regardless if data manipulation is a result of deliberate misrepresentation or poorly chosen models, "Big Data" methods resolve the problem by being inclusive and not relying on curated data sets to work:

http://www.wired.com/business/2013/10/next-big-thing-economic-data/

The Next Big Thing You Missed: Big-Data Men Rewrite Government’s Tired Economic Models
BY MARCUS WOHLSEN10.29.136:30 AM

The Consumer Price Index is one of the country’s most closely watched economic statistics, a key measure of inflation and buying across the U.S. The trouble is that it’s compiled by the U.S. government, which is still stuck in the technological dark ages. This month, the index didn’t even arrive on time, thanks to the government shutdown.

David Soloff, co-founder of a San Francisco startup called Premise, believes the country needs something better. He believes we shouldn’t have to rely on the creaky wheels of a government bureaucracy for our vital economic data.

“It’s a half-a-billion dollars of budget allocated toward this in the U.S., and they’re closed,” Soloff said when I met him earlier this month during the depths of the shutdown, before questioning the effectiveness of the system even when it’s up and running. “The U.S…has got a pretty highly evolved stats-gathering infrastructure [compared to other countries], but it’s still kind of post-World War II old-school.”

In Soloff’s view, the government’s highly centralized approach to analyzing the health of the economy isn’t just technologically antiquated. It’s doesn’t take into account how much the rest of the world has been changed by technology. At Premise, the big idea is to measure economic trends around the world on a real-time, granular level, combining the best of machine learning with a small army of on-the-ground human data collectors that can gather new information about our economy as quickly as possible. This model doesn’t wait a month to build a new model. After all, a price spike on one continent or food shortages on another will reverberate around the world much quicker than that.

This is a company of the Big Data Age. Soloff is a systems-obsessed data geek who about a decade ago gave up life as a Wall Street quantitative analyst — a.k.a., a “quant” — before diving into software startups. His co-founder, machine-learning specialist Joe Reisinger, spent six years as a researcher at Google. And other data-savvy companies such as LinkedIn and Cloudera figure in the resumés of other Premise employees. Investors include Google Ventures, Andreessen Horowitz, and Harrison Metal.

“I like the way systems work,” Soloff says. “I like to see how movement on one end of it influences a reaction on the other end.”

To see how such movements radiate across the global economy, Premise takes an approach he describes as “machine-human hybrid computing.” The company’s computers trawl more than 30,000 websites worldwide to gather data on millions of products, from pricing and availability to quality and customer ratings. But, at the same time, about 700 part-time workers following daily “shopping lists” snap smartphone photos of mostly perishable goods in physical stores and markets. These represent a huge chunk of global commerce that never gets translated to the internet.

“As you get out into the world and you move away from the sort of developed world internet, what you start to see is the amount of money people have to spend on the staples of life is obviously a lot smaller,” Soloff says. “And any movements in those perishable goods and services have a massive impact on their day to day security and well-being.”

For example, India in recent years has been wracked by price spikes in onions, a staple, which don’t just strain households but stoke political turmoil. The sooner such trends can be identified or even anticipated, the more prepared government and business decision-makers can adapt.

The data crunched by Premise doesn’t stop at the economic trends themselves, Soloff says. The platform itself is designed for maximum pattern recognition, such that the system will extract most of the data it needs from photos taken by workers in the field. Often, the only input from humans is the photo itself. Premise’s software will pull not just prices from labels but identify, for example, the type, color, and size of vegetable in the photograph so that the associated data can be matched to that same variety of vegetable in another city.

At the same time, human intelligence is leveraged on the e-commerce side of the analysis. Using a mechanical turk approach, web workers help Premise identify e-commerce sites in specific markets. “This stuff is unindexed. You can’t go to Google and, like, figure out everyone selling consumer products in Indonesia,” Soloff says. “If I want to know where an Indian housewife is going to buy household cleaning agents online, I may know one or two sites. Finding the next 15 or 20 sites is darn near impossible unless I’ve got local market knowledge.”

For all its dependence on a large group of workers, however, Soloff balks at the term “crowdsourcing.” To feed its algorithms with the most meaningful data, Premise’s system is constantly seeking to optimize its approach to sampling. Instead of looking to extract a pure signal from massive amounts of undifferentiated noise, the company tries to fine-tune by identifying the most efficient ways to deploy its collectors to get the most meaningful data for the least amount of effort. “This notion of ‘yeah, I’m going to consume the Twitter fire hose and magically uncover patterns’ I think is a fiction,” Soloff says.

While its current product offerings are focused on inflation and food security data, Soloff could see the platform expand to answer questions that government bureaucracies don’t touch, such as “How busy is a city?”

“It’s our pretty firm belief that human economic activity has also been totally altered by new technologies. But the indicators that are being put forth are relics of another era,” Soloff says. “So how and when and in what way does that infrastructure get upgraded? That’s where we come in.”

 

[Edward Campbell]

Liberal insider David MacNaughton offers some pretty sound advice to Ontario and, indeed, to Canada, in this opinion piece whoch is reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail:

http://www.theglobeandmail.com/globe-debate/ontario-needs-fundamental-change-not-a-fight-over-austerity-vs-stimulus/article15291923/#dashboard/follows/

Ontario needs fundamental change, not a fight over austerity vs. stimulus

DAVID MACNAUGHTON
Contributed to The Globe and Mail

Published Wednesday, Nov. 06 2013

In the debate over the proper policy course for governments to assist in getting our economy out of its current doldrums, economists, politicians and policy wonks have essentially split into two camps.

One, the austerity folks, advocate reduced government spending, smaller government and lower taxes. The stimulus crowd promotes more government spending, an increased role for government, and higher taxes, particularly on the “rich.”

This debate is being played out around the world, including, not surprisingly, Ontario, where the economy has been going through a very difficult patch of reduced employment in the manufacturing sector, increasing debt and deficits and growing pressures on our health care system.

As the Ontario Economic Summit begins in Niagara, I would argue that neither course of action comes anywhere close to dealing with Ontario’s challenges today, and into the future. Either policy framework will simply contribute to the deterioration of our economy.

To suggest that piling on more debt to fund an existing government apparatus that is dysfunctional is a solution to a problem akin to suggesting that alcoholism can be cured through increased alcohol consumption.

Likewise, when the future of Ontario depends on educating and training our people and attracting and retaining the best and the brightest, the notion that we should be reducing or risking the deterioration of public services is an equally bizarre solution to a serious problem.

The problem in Ontario, as in many other jurisdictions, is that government has not kept up with the pace of change in our society. In the 1990s, private sector companies realized that in order to survive in an increasingly global economy, one needed to focus on one’s core competence and comparative advantage. Where that wasn’t the case, it was best to sell or outsource those entities or functions. In addition, it was critical to invest heavily in technology and human capital and to ensure that employees were incented to embrace change, rather than to resist it.

While it should have been focused on the quality of education and health care, a clean environment, safe streets and an efficient transportation system – all things that government has primary responsibility for – government has continued to perform functions it is badly equipped to perform, underinvested and poorly invested in technology, and created a work environment that rewards compliance and seniority rather risk-taking and innovation.

This has resulted in an inefficient, unresponsive and inflexible system with unhappy and under-motivated employees. Needless to say, it is also extremely costly for the value it delivers.

In short, government is a drag on the economy when it needs to be the reverse.

Neither stimulus nor austerity will cure that problem. The question is: What will?

The answer, I believe, is to go through the sometimes painful, but ultimately rewarding exercise that successful private sector companies did, and continue to do.

1. Focus on your core business. Government’s job is to set the policy framework within which other actors in society perform their functions. It sets the rules, and enforces them, whether that applies to public safety, the school curriculum, health care standards and access, land use policy and corporate and commercial laws. It decides where and when public infrastructure is built, the standard to which it should operate and causes licenses and permits to be issued. In short, the government sets the rules and enforces them, whether that applies to individuals, corporations or those involved in the voluntary sector. It also decides on how and from whom taxes should be collected to pay for common services, and when and how much to assess user fees.

2. Sell your interest in current operating businesses over time and use the proceeds to invest in new public assets that will improve productivity, create new economic activity and improve the quality of life. One needs only to look at the transportation system in the GTHA to identify a crying need for investment that would accomplish all three of the aforementioned goals. The rationale for retaining an ownership interest in an already built electricity transmission system that can be regulated by a government regulator while one debates new “revenue tools” escapes me.

3. Outsource most of the “service delivery” functions of government. In areas of service delivery where one can make an “apples to apples” comparison, public sector costs are twice that of the private sector, and customer satisfaction is lower.

4. Invest in technology. In both health care and education it is clear that outcomes are substantially better where wise investments in technology are made, caused to be made, or when their adoption is encouraged.

5. Focus regulation on outcomes, rather than process and compliance. Whether in regulating capital markets, establishing land use rules or setting standards for health and safety, regulation should work towards creating an environment where the rules are clear and transparent and the objectives consistent with overall government policy. Innovation and incentives have been found to achieve overall public policy objectives more effectively than slavish dedication to outdated rules, backed up by inadequate enforcement.

6. Invest in your employees and create incentives that match the desired outcomes. Wage freezes and the elimination of properly structured performance bonuses will ensure failure of any attempt to change behaviour.

None of this is easy, nor will it be accomplished quickly. In fact, trying to do too much too fast will guarantee failure: setting and adhering to clear goals and objectives will be an important part of ensuring success. The societies that find the most effective way to deliver the highest quality public services at the most competitive cost with the a dedicated work force focused on innovation and embracing change will be the winners in the increasingly competitive world in which we live. Continuing the false debate over stimulus versus austerity will increasingly divide the population and further deteriorate our standard of living and quality of life.

David MacNaughton is chairman of StrategyCorp and former principal secretary to the premier of Ontario

Now, this report is partisan, to be sure. Mr MacNaghton is arguing that both Tim Hudak and Andrea Horwath are wrong, and he's partially right.

But: while a "slash and burn" attack on all government spending is, indeed, neither necessary nor desirable, the cuts ~ deep cuts ~ proposed in Don Drummond's (Feb 2012) Report to Premier McGuinty still make very, very good sense and still offer the best programme for Ontario. Equally, there is some need for more and better spending on education and infrastructure ~ which must be done at the expense of social programmes other then healthcare (which has a political "life" (imperative) of its own). But that's not what Ms Horwath wants ~ she wants to toss more and more and more money into bottomless pits of socialistic "do goodism" which is a recipe for failure.

 

[a_majoor]

Although part of me is applauding the idea of opening up access to a wider, deeper and more diversified source of funding, a much larger part is asking "what could possibly go wrong?" 

(Of course the even larger part is totally disgusted, since this money is not going to be invested at all, but simply to pay for current consumption).

http://english.caixin.com/2013-11-06/100600037.html

[qhote]
Canadian Province Issues Offshore Yuan-Denominated Bonds
British Columbia officials says plan was to sell 500 million yuan worth, but oversubscribing pushed the amount raised up five times
By staff reporter Wang Liwei

(Beijing) – Canada's western province of British Columbia said on November 5 it had completed the issuance of one-year offshore yuan-denominated bonds and raised 2.5 billion yuan.

This is the first time a foreign government has issued offshore yuan bonds. Mike de Jong, finance minister of Canada's westernmost province, said officials had intended to raise only 500 million yuan but the bonds were largely oversubscribed.

Central banks and foreign institutions snapped up 62 percent of the bonds. Fund asset managers bought 18 percent. Investors in Hong Kong took 46 percent of the bonds, and 40 percent went to U.S. investors.

The bonds carry a yield of 2.25 percent. This is 10 to 15 basis points lower than bonds sold by the Chinese government, said HSBC, the sole book runner of the issuance. The bonds will be listed in Luxembourg.

Jim Hopkins, assistant deputy minister of British Columbia's finance ministry, said earlier that the province wanted to be an early entrant in the offshore yuan market, which is expected to grow rapidly and benefit participants in terms of lower trading cost with China and more diversified financing and investment channels.

An official with the ministry said the offshore yuan bond market was weighted down a bit in the second and third quarters of this year because of the anticipated impact of the U.S. Fed slowing its so-called quantitative easing policy. He expected the market to improve as investors change their opinions.

Meanwhile, China's Ministry of Finance said on November 5 that it will sell dim sum bonds worth 10 billion yuan in Hong Kong on November 21. This will be the second issuance this year. This first was in June, when 13 billion yuan worth of the bonds were sold.

Hong Kong residents will be able to buy up to 3 billion yuan worth of those bonds through banks and, for the first time, through the former British colony's bourse, the ministry said. Institutional investors will get the rest.
[/quote]

 

[Edward Campbell]

I think we, Canada, need to get our petroleum to the global markets no matter what Americans, our own Canadian aboriginals or the children of the Occupy _____ movement think. But this article, which is reproduced under the Fair Dealing provisions of the Copyright Act from the National Post, notes, Canadian first nations and Occupy _____ - both of which are, as Thucydides and others have reminded us, are financed by big American foundations with ties to their energy sector - have joined forces to slow/stop that process:

http://fullcomment.nationalpost.com/2013/06/26/john-ivison-occupy-and-idle-no-more-could-team-up-to-block-pipelines-going-east/

I have a lot of sympathy for first nations, in general. As our own Supreme Court has reminded us, we, Canadians over the generations, have treated them poorly unfairly and dishonestly, but the redress to their real grievances will require cooperation, not confrontation, on both sides.

I have no sympathy for Occupy _____. While I agree that inequality is a problem, Occupy _____ does not really understand what inequality is all about, nor does it care. Occupy ____ are all spoiled children of the middle class: too lazy (and ill educated) to work and too nervous to steal. A little taste of real communism - forced labour in harsh regions - would help them to grow up.


Edit: typo

And Fatih Birol, chief economist for the International Energy Agency gets it exactly right about the oil sand and pipelines through BC in this article which is reproduced under the Fair Dealing provisions of the Copyright Act from the Globe and Mail:

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/oil-sands-not-a-major-source-of-climate-change-says-iea-economist/article15480326/#dashboard/follows/

Oil sands not a major source of climate change: IEA economist

SHAWN MCCARTHY - GLOBAL ENERGY REPORTER
OTTAWA — The Globe and Mail

Published Sunday, Nov. 17 2013

Alberta’s oil sands producers have received some timely support from the International Energy Agency, with the industry – and indeed the Canadian government – facing increasing condemnation over the failure to rein in greenhouse gas emissions.

As the United Nations climate summit continues in Warsaw this week, the IEA chief economist Fatih Birol played down the oil sands’ contribution to global warming, and said the long-term challenge is to access the energy-hungry markets of Asia while slowing the growth in emissions.

In an interview from Paris, Mr. Birol also rejected calls for British Columbia to forgo the production and export to Asia of liquified natural gas due to concerns that the province would not meet its own GHG-reduction targets. He said the growing LNG imports in China and elsewhere could reduce the need for coal-fired electricity, leading to a global reductions in carbon dioxide emissions.

The IEA released its world energy outlook last week and said the United States will become the world’s largest crude producer by 2015 and have a sharply declining appetite for both oil and natural gas imports. The U.S. is not expected to become self-sufficient in crude, but Canadian producers will be trying to increase exports into a shrinking American market.

That means they will have to pivot to Asia, Mr. Birol said.

“I expect a growing amount of Canadian energy exports will go to Asia, sooner or later, both in terms of oil and natural gas,” he said in an interview. “And I think once it starts, I would expect an acceleration of the exports will happen in a short period of time.”

The economist said Asian countries such as China and India currently get nearly 90 per cent of their crude from the Middle East, and are looking to Canada to become an important source of secure supplies.

“There is golden opportunity for Asia to diversify from Middle East. Canadian oil will be a security option for the Asia oil consumers, namely China, India and East Asia,” he said.

Nor does Mr. Birol expect the surge in tight, light oil production in the United States to drive down global crude prices over the medium to long-term. He dismissed concerns raised by some experts, including Saudi billionaire Prince al-Waleed bin Talal in The Globe and Mail this past weekend – that the world will soon be awash in crude “The era of cheap oil is over,” he said. “Over the last three years, oil prices have averaged $100 (U.S.) a barrel for Brent [the most widely quoted international crude], and I don’t expect this to go down.”

He said many of the most prolific American fields require a price of at least $80 a barrel to break even.

But as environment ministers gather in Warsaw this week for the annual climate summit, critics both at home and abroad are targeting the oil sands as a major concern and are demanding that production growth be reined in.

The EU parliament has passed a motion reaffirming its intention to impose a regulation that would discourage the use of fuels made from oil sands crude, while in the United States, activists and their supporters among Democrats in Congress are seeking to block construction of the Keystone XL pipeline, arguing it would lead to expansion of oil sands production and hence, increased GHG production.

In its report last week, the IEA concluded there is a looming climate crisis, with the world on track to see temperatures rise by 3.6 degrees Celsius, which would cause more extreme weather, flooding in low-lying coastal areas and severe drought in some areas.

Mr. Birol said the key culprits are the use of coal for electricity, particularly in fast-growing Asia; the $500-billion in global subsidies of oil consumption, which encourage over-use; and the failure to embrace energy efficiency.

“The oil sands definitely makes a contribution to the increase in CO2 emissions,” he said. “But the difference in getting oil from oil sands when compared to conventional oil, it is such a small contribution that it will be definitely wrong to highlight this as a major source of carbon dioxide emissions worldwide.”

However, critics contend the oil sands represent a major source of untapped, carbon-intensive crude reserves that need to stay in the ground. And they accuse the government pursuing damaging policies both at home and on the international stage in order to facilitate growth in the sector.

“It’s an immediate problem for Canada and a huge issue globally if expansion continues,” says activist Tzeporah Berman, who spoke at one of a series of anti-oil sands rallies held across the country on the weekend. Pollution from the oil sands is the single biggest reason Canada will not meet its climate targets, she added. “Globally, oil sands become a huge problem if we allow the dramatic expansion the Harper Conservatives and industry are proposing.”

The key points that the best way to reduce green house gasses is to increase oil sands and natural gas production and push pipelines through BC so that Asia, especially China, can replace its high GHG producing coal power power plants with cleaner, greener oil and gas power plants. Ditto for oil and gas to America, where there is no such things as "clean coal." It's a lie.

But the clean coal lobby in America is working as hand as it can, in league with some other interests, including many not very bright environmentalists, to destroy Canada's oil industry so that American coal miners can keep on poisoning the atmosphere.

 

[a_majoor]

Numbers are in for one of the Progressive/Left's pet ideas, annual garunteed income. As might be expected, the results are quite the opposite of what they predicted:

http://www.bloomberg.com/news/2013-11-15/canadian-test-shows-income-guarantees-don-t-work.html

Canadian Test Shows Income Guarantees Don't Work
By Megan McArdle Nov 15, 2013 4:24 PM ET .

A follow-up on this morning’s post on guaranteed incomes: I’m reminded that Jim Manzi wrote two excellent pieces outlining the data we have on experiments with a guaranteed income. Here’s his summary of a Canadian experiment that topped off the incomes of folks who worked so that they retained more of their benefits and income than they otherwise would have:

People respond to incentives. During the period of the reduced marginal tax rate, reported work earnings and reported income rose for the test group versus the control during the experimental period. Score one for the supply-siders (and common sense).

Marginal is not average. At the peak effect of the program (16 months after random assignment), about 30 percent of the treatment group were employed full-time versus 15 percent of the control group. Anecdotes about X heroic poor person, or your self-analysis of your likely response to a change in marginal rates, or your speculations about what you would do if you were an entrepreneur, doctor or dockworker don’t mean much. The whole effect here is driven by 15 percent of the treatment population -- the vast majority did very little different than they would have done otherwise, yet the aggregate effects are material. The same thing applies to discussion higher up the income scale.

This costs taxpayers more money, not less. In round numbers, as compared with the control, the treatment increased total reported take-home earnings by about $200 CD (about $190) per month, about $100 CD of which was greater reported wage income, and about $100 CD of which was the supplemental cash transfer from the government (i.e. all the people in Canada who pay taxes) used to reduce the effective tax rate for the welfare recipients in the program.

The effect disappeared after the program ended. After the program period (for complicated reasons, about five years after program entry), the treatment group had about the same level of reported employment and income as the control group. On one hand, this is further evidence that marginal tax rates matter for people in this situation, but on the other, it also indicates that the program failed to achieve its stated goal of “lift off” into self-sufficiency -- that is, transition off the dole and into the workforce. This implies that applying this program as an operational policy would result in a perpetual increase in the welfare cost per family, in return for more work.

And here’s Jim on the results of studies of a Negative Income Tax in the U.S. Takeaway: It reduced work hours, rather than increasing them.

Overall, I will be very interested to see what will happen if Switzerland passes a law to guarantee a substantial income to every Swiss citizen. But it seems reasonable to expect one of the results to be less work output.

And even if it works in Switzerland, it doesn’t mean that we can import it. As a number of commenters noted in the post on Switzerland, a substantial basic income is simply and obviously incompatible with making it relatively easy for people from poor countries to become citizens. A path to citizenship for legal immigrants is one of the foundational values of American society; we are Americans because we are born here or we choose to come here, not because of some ethnic heritage. We couldn’t get rid of it even if we wanted to; the idea that anyone born on American soil is an American is enshrined in our constitution.

And of course, if you had to choose between a basic income, and relatively easy immigration, the choice is obvious -- at least if you’re interested in improving human welfare. The benefit that poor Guatemalans get by coming here is far greater than the benefits poor Americans would get from a basic income. It’s an experiment we’ve been running pretty successfully for well over 200 years.

 

[Edward Campbell]

Some readers of these threads will be certain that I am a mean, heartless old man, worthy of a Dickens quote:

    "Are there no prisons?"
          "Plenty of prisons..."
    "And the Union workhouses." demanded Scrooge. "Are they still in operation?"
          "Both very busy, sir..."
    "Those who are badly off must go there."
          "Many can't go there; and many would rather die."
    "If they would rather die," said Scrooge, "they had better do it, and decrease the surplus population."

But I only want the government to spend OUR money in ways which serve a utilitarian purpose: the greatest good for the greatest number, as Jeremy Bentham may (or may not) have said.

This idea, reported in an article which is reproduced under the Fair Dealing provisions of the Copyright Act from the Ottawa Citizen, would be good public policy but dreadful politics and, for that reason, it will never see the light of day:

http://www.ottawacitizen.com/business/Canadian+Taxpayers+Federation+calls+sweeping+changes/9179741/story.html

Canadian Taxpayers Federation calls for sweeping changes to Employment Insurance

BY JESSICA BARRETT, POSTMEDIA NEWS

NOVEMBER 18, 2013

OTTAWA – A new report by the Canadian Taxpayer Federation calls for sweeping changes to Employment Insurance, noting the program takes in billions more each year than it pays in most provinces.

The report, released Monday, advocates the end of mandatory EI contributions, which have increased dramatically since 2008 to $2,139 per year for an average worker earning $47, 400 ­ the maximum insurable earnings. Add in mandatory contributions from the employer, and that’s $4,277 per year.

The federation advocates an end to mandatory EI contributions, and instead would allow workers to keep that money in an employment insurance savings account that would function similar to a registered retirement savings plan.

“The Canadian Taxpayers Federation suggests that working Canadians be entitled to keep the $4,277 currently plundered from them and their employer every year in EI premiums, rather than sending the money to Ottawa to be processed and shipped elsewhere,” the report states.

If workers never need to draw on the fund, they could then use the money for retirement. Over a working life, a couple each earning $47,700 annually could save more than $1 million, the report found.

Canadian Taxpayer Federation federal director Gregory Thomas said the change would put an end to geographic disparity within the EI system that he said allows some workers to qualify based solely on where they live and encourages seasonal unemployment.

“There’s a phenomenon called ‘postal code bingo’ where you can have two workers working side-by-side doing the same job in the same work place and they both lose their jobs on the same day,” he said. “One can collect $16,000 in EI benefits and the other will get nothing because one commutes in from … a zone that has a high rate of unemployment and the other lives in the city.”

The report also found a pattern of disparity by province, with only 48 per cent of unemployed Ontarians qualifying for EI benefits in 2011-12 compared to more than 100 per cent of unemployed people in Atlantic Canada. Rates can exceed 100 per cent by factoring in women on maternity leave or people receiving benefits through other EI programs, the report states.

But even with that disparity, the program takes in far more money each year than it spends, said Thomas, adding the money goes into general revenue, amounting to a federal cash grab.

The report found Ontario and the four western provinces contributed $113 billion more in EI premiums than they received in benefits between 1981 and 2009, while Atlantic provinces and Quebec received $38 billion more than they paid.

Thomas said the Canadian Taxpayer Federation’s research has shown that in some Atlantic provinces, EI amounts for as much as 15 per cent of general income.

He’d like to see the program reformed to either a private savings system or a public one that more closely resembles the Canada Pension Plan, where payments are proportional to contributions.

“What you get is directly related to what you put in, it’s almost like it’s your money,” he said.

“Why not start doing that with the EI fund … if you’ve organized your life so you never lose your job then when you retire you get to use that money in your retirement,” he said.

© Copyright (c) Postmedia News

Employment Insurance is a completely counter-productive programme. It does far more harm than good. I agree that we need want to have some sort of programme to help, briefly (and rarely) when they are between jobs but EI is, now, a monster. Gregory Thomas' idea does that without distorting the labour market. I concede that Mr Thomas' idea would do harm to some people ~ but it may be that they need a jolt in order to take responsibility for themselves.

 

[a_majoor]

What not to do. While the US is the focus on the story, the fact that Canada seems to be forging ahead with a "go it alone" sort of approach to TPP negotiations doesn't seem like a very inspired negotiating position. While we should not roll over and play dead, maybe some more flexibility is going to be needed as the talks progress:

http://boingboing.net/2013/11/19/data-visualization-shows-us-is.html

Data visualization shows US isolation in pushing for brutal Trans-Pacific Partnership
Cory Doctorow at 6:10 pm Tue, Nov 19, 2013

Gabriel Michael, a PhD candidate at George Washington University, subjected the IP Chapter of the secret Trans-Pacific Partnership, leaked by Wikileaks last week to statistical analysis. The leaked draft has extensive footnotes indicating each country's negotiating positions. By analyzing the frequency with which the US appears as the sole objector to other nations' positions, and when the US is the sole proponent of clauses to which other nations object, Michael was able to show that TPP really is an American-run show pushing an American agenda, not a multilateral trade deal being negotiated to everyone's mutual benefit. Though Canada is also one of the main belligerents, with even more unilateral positions than the USA.

This graph indicates that the core overlap of negotiating positions currently includes New Zealand, Singapore, Chile, and Malaysia, although the direct connection between New Zealand and Singapore is weaker than the others. If we consider geography, culture, and politics, countries on the outskirts of this network often appear to connect via sensible routes: Mexico through Chile, Australia through New Zealand, and Brunei through Vietnam and Malaysia. Canada’s connection through New Zealand makes sense, though the connection through Malaysia is odd; likewise, Peru via Chile makes sense, but via Singapore is surprising.

Returning to the large network graph, we can include sole-country proposals, which show up as loops connecting a country back to itself. This allows for a direct comparison of the data from the first two bar graphs, and gives us a sense of the degree to which a country is joining with other parties vs. “going it alone.”

The United States and Japan are still relatively isolated, but we can also see that they’ve made numerous sole-country proposals, perhaps related to their relative isolation. Though Canada has the highest number of sole-country proposals, it also has strong connections to many other countries. Singapore, Peru, Malaysia, and Brunei have so few sole-country proposals that their loops are barely visible.

 

[Edward Campbell]

Because stupidity is contagious and because the Good Grey Globe's Jeffrey Simpson is both a) an economic illiterate, and b) widely read and admired amongst those adhering to the Laurentian consensus (in fact Simpson is a charter member of the Laurentian elites) I'm sure this idea - which is nothing more nor less than conscription - will be popular, stupid but wildly popular:

http://www.theglobeandmail.com/globe-debate/to-rein-in-health-costs-rein-in-salaries/article15788438/#dashboard/follows/

To rein in health costs, rein in salaries

JEFFREY SIMPSON
The Globe and Mail

Published Friday, Dec. 06 2013

As two recent reports have demonstrated, Canada remains among the world’s top five spenders among countries with largely public health-care systems.

Canada spends 11.2 per cent of its gross domestic product on health, from public and private sources. What’s been driving that spending over the past decade or so?

Many factors go into the long answer; the incomes of those who work in the system provide a shorter (though incomplete) version. Doctors and nurses have done very well indeed in recent years, although their associations and unions might deny it. Their incomes have gone up faster, and in some cases much faster, than average wages across the economy.

How well they did is laid out in recent reports from the Canadian Institute for Health Information and the Organization for Economic Co-operation and Development.

According to the OECD’s 209-page Health Indicators at a Glance 2013 publication, the remuneration of Canadian medical specialists relative to the average wage is the third-highest in the OECD, 4.7 to 1. General practitioners have the second-highest ratio, tied with two other countries, at 3 to 1.

From 2005 to 2011, Canadian specialists’ salaries were among the fastest rising in the OECD. General practitioners’ rose above the OECD average. Of course, there were variations across provinces and disciplines within medicine, Canadian physicians who work within largely public systems on the whole are very well paid by OECD standards.

Canadian nurses did well, too. Nurses who work in hospitals (and not all do, of course) saw their remuneration grow by 4.8 per cent yearly in 2005-2008 and by 3.6 per cent in 2008-2011, according to the OECD.

Labour compensation eats up 60 to 70 per cent of hospital costs. The largest single component of a hospital’s work force is the nursing staff. If the nursing budget goes up above the rate of inflation, it’s hard for hospital administrators not to keep their institution’s costs from going up at a roughly similar rate.

Physicians’ costs ($31.4-billion) are the third biggest charge to health care, after drugs ($34.5-billion) and hospitals ($62.6-billion). Doctors’ share of the health-care pie rose to 14.8 per cent in 2013 from 13 per cent in 2005. One difference, of course, is that 98.5 per cent of all physicians’ costs come from the state, versus 36 per cent for drugs.

Physicians sometimes don’t like to hear this, but the Canadian Institute for Health Information laid out what’s been happening in its report National Health Expenditure Trends, 1975 to 2012: “Increases in physician fees have been above rates of inflation.” From 2005 to 2011, physician incomes went up faster than hospital budgets or drugs. Their fee increases averaged 3.6 per cent a year in those years. Those increases were larger than wage gains for other health and social-service workers, except nurses, as reported by CIHI.

For the past two years, wage gains by doctors and nurses have slackened, as part of the overall lower increases in health spending across Canada. The past two years, health care has been rising at about 2.5 per cent, compared to about 7 per cent each year from 2000 to 2010.

There are lots of ways for governments to try and hold this slower rate, but an important one is not to allow physicians’ and nurses’ incomes to soar, as they recently did. A fair deal for both would be to allow wage gains for the next decade near the inflation rate, adjusted for population growth.

Anything more would be a return to the years of unsustainable growth in these incomes and in overall health-care budgets. Yes, there are a host of other things that must be done to keep health-care increases on a more modest track, but curtailing the increase for providers is an important one.

What happened in recent years was completely predictable and avoidable. Put a large amount of additional money into any public enterprise without the money being tied down and targeted, and well-organized groups within the enterprise will mobilize, find all sorts of reasons why they need more, flex their collective muscle and, usually, get governments to yield.

Which is exactly what recently happened. A mistake was made from 2005 to 2011 that, once made, should not be repeated. By world standards, Canadians doctors and nurses are very well paid. They should be content. But are they? And will they be?

This is a classic socialist Marxist answer to everything: "from each according to his ability, to each according to his needs." It sounds wonderful; millions, I would guess billions of people believe it - that's because billions of people are stupid. Marx has nothing to offer in either economic or social remedies. All Marxists, including those with PhDs and many, many honours (who teach in  some of the world's most prestigious universities) are blind fools.

Of course wages are a factor in the cost of health care; so are the wages of auto workers in the cost of your new car and the salaries of engineers and technicians in your monthly internet bill, and, and, and ... shall we conscript them all? A large wing of Thomas Mulcair's NDP and a too large wing of Justin Trueau's Liberals would say "Yes!" And that's why, despite doctrinal reservations and ongoing scandals, Canadians who actually think - and I hope that's 20% of us - will vote for the Conservatives. Ten percent of us (Canadians, en masse) are stupid conservatives, so we already have their votes, and 10% of us are traditional Conservatives and we have their vote, too, so if 20% of us are smart (about the global average, I think ~ think bell curves and all that) then we will elect a CPC majority and consign Simpson's prescription to the trash heap of socio-economic history, where it belongs.

 

[a_majoor]

Too bad Simpson didn't read a bit of Adam Smith in his earlier life; the reason the salaries of these specialists is rising is because there is an increasing demand for health care specialists of all sorts, while the supply of medical specialists is relatively inelastic (it takes @ ten years to get a new GP out the door, possibly much more for a specialist).

No need to invoke FA Hayek, the Austrian school, the Chicago school or any other advanced economic or econometric theories, this is the supply and demand curve; which used to be taught in high school....

 

[Kirkhill]

Too bad Simpson didn't read a bit of Adam Smith in his earlier life, the reason the salaries of these specialists is rising is because there is an increasing demand for health care specialists of all sorts, while the [/i]supply[/i] of medical specialists is relatively inelastic (it takes @ ten years to get a new GP out the door, possibly much more for a specialist).

No need to invoke FA Hayek, the Austrian school, the Chicago school or any other advanced economic or econometric theories, this is the supply and demand curve; which used to be taught in high school....

Don't forget that Jeff's buddies in guvmint (red, blue and orange - it started with John Robarts and Bill Davis and OHIP) are the ones that decided the first method of reducing costs was to "control" (reduce) the number of Doctors and Nurses in the first place.  A notion which was not strongly opposed by those unions (professional associations).

Fewer doctors, went the argument, fewer hours to charge.
But the demand trend remained constant.
So the Doctors charged more.
So the costs went higher.
So the guvmint controlled billables.
So the Doctors left.
But the demand trend remained constant
So the guvmint allowed pay raises
So Doctors returned (actually came from South Africa - situation worse than Canada apparently)
So the costs went higher.

Jeffrey wants to go back to a time that was and a solution that wasn't.  Apparently Alzheimers has set in there as well.  That movie has already played.

 

[Brad Sallows]

>What happened in recent years was completely predictable and avoidable. Put a large amount of additional money into any public enterprise without the money being tied down and targeted, and well-organized groups within the enterprise will mobilize, find all sorts of reasons why they need more, flex their collective muscle and, usually, get governments to yield.

Just substitute "teachers" or "emergency services" or "city employees" (or any of a number of other occupations) in place of "doctors" and see how fast Simpson runs to avoid the deluge of sh!t heading his way.

 

[a_majoor]

And of course there is more sophisticated analysis as well:

No one actually sees the cost of healthcare, so it is effectively a "free good"; demand becomes unlimited.

The pressure on supply becomes acute, Bob Rae throttled the production of doctors to "cut costs" in the 1990's, the downstream effects in Ontario alone is we are short something like 500 GPs across the province (and I would imagine corresponding nurses, techs and so on), more doctors retire of move to greener pastures to escape the bureaucratic innanities of working in Ontario and as Brad points out, monies that "should" be going to healthcare are being siphoned off. Under McGuinty we watched billions dissapear for "eHealth" and the air ambulance fiasco, as well as rising wages (but no corresponding increase in outputs or productivity).

So now the supply curve is very flat (and could take 10 years to raise) while the demand curve is practically vertical. I will leave it as an exercise for Simpson to draw that supply/demand curve and calculate the intersection....

 

[a_majoor]

Before anyone throws a fit of snark and says this article is about the United States (it is), I want everyone to sit down and think about the corresponding situation(s) here. Canada has over $500 billion in federal public debt. Ontario alone has $200 billion in Provincial public debt (and rising rapidly), Quebec and virtually all the other provinces are in the same boat. Unfunded Federal liabilities are estimated to be another $500 billion (mostly pensions and benefits to federal workers), and while I have not been able to find collated figures for the provinces, there is little reason to think the situation is different. Municipalities add yet another toxic layer to this cake of indebtedness and unfunded liabilities.

So yes, if you are doing "the right things" to protect youself and families, the political class sees you as a target, and there is little doubt in my mind Canadian politicians are coming for your wealth too.

How to protect yourself will be interesting and difficult; you will have to adopt a lifestyle that minimises your exposure and dependence on the "grid", become self sufficient in many regards and perhaps change your lifestyle towards the "extreme retirement" movement, where you control and minimise every possible expense. Urban "victory gardens" in the back yard might be the sign of the times in the near to mid future.

Or, we could work to displace the current political class and remove the tax, regulatory and institutional barriers to economic growth, while cutting spending and focusing on the true responsibilities of government.

http://nextbigfuture.com/2013/12/mass-affluent-are-political-and.html

They are coming for your retirement and college savings

  USA Today has an article calling the mass affluent the new rich. This relabeling seems to be spinning it so that this group is a suitable target for redistribution (ie higher taxes). The mass affluent generally do not consider themselves to be rich and have just executed the lifeplan that all financial people tell people to follow.

They tell people
- get a good education
- get a good job
- save your money for retirement and college for your kids

UPDATE - I updated the title from "Mass Affluent are political and economic target" to "They are coming for your retirement and college savings". In Google+, someone accused me of being a troll for the Koch's, so in for a penny then in for a pound. I would disclose that I am in what is described as the mass affluent class. I knew when Bush 2, congress and Obama was running up the big deficits where the taxes and money would be coming to pay it. It was immediately obvious that those who are already paying taxes would pay more taxes. The only other alternative would be to have massive spending cuts at least back to Clinton level (and presidents prior for decadesChart below from the Congressional Budget office) spending.

Fed government spending at 18% of GDP was what was done for decades prior to 2000. Reducing by 6% GDP is possible. I think massive defense spending cuts can be done without harming long term US interests. The active enemies of the US are weak and the US will not fight the bigger militaries (Russia and China). The US still has nuclear weapons. Retirement age can be increased 3-4 months per year and other developed nations spend half the US level as a percentage of GDP on healthcare.

About 20% get to some degree of success. Although even if they save 1 million

Fully 20% of U.S. adults become rich for parts of their lives, wielding outsize influence on America's economy and politics. Made up largely of older professionals, working married couples and more educated singles. The "new rich" are those with household income of $250,000 or more at some point during their working lives. That puts them, if sometimes temporarily, in the top 2% of earners.

Even outside periods of unusual wealth, members of this group generally hover in the $100,000-plus income range, keeping them in the top 20% of earners.

In a country where poverty is at a record high, today's new rich are notable for their sense of economic fragility. They're reached the top 2%, only to fall below it, in many cases. That makes them much more fiscally conservative than other Americans, polling suggests, and less likely to support public programs, such as food stamps or early public education, to help the disadvantaged.

The AARP (American Association of Retired Persons) has a retirement calculator. Entering in 1.06 million in savings at retirement means that even with social security for a husband and wife they drop to just under $100,000 per year in retirement income. The $1 million savings level is what many are targeting.

Obama signals more efforts to redistribute out of the mass affluent

Last week, President Obama asserted that growing inequality is "the defining challenge of our time," signaling that it will be a major theme for Democrats in next year's elections.

New research suggests that affluent Americans are more numerous than government data depict, encompassing 21% of working-age adults for at least a year by the time they turn 60. That proportion has more than doubled since 1979.

Sometimes referred to by marketers as the "mass affluent," the new rich make up roughly 25 million U.S. households and account for nearly 40% of total U.S. consumer spending.

Just recoverying from the financial crisis and recession

Merrill Lynch as a report on the affluent and retirement

Bank of America’s Merrill Edge Report is a semi-annual study that offers an in-depth look at the financial concerns, priorities and behaviors of mass affluent consumers, defined as people with $50,000-$250,000 in total household investable assets. The research reveals that this group, which consists of approximately 33 million households in the United States, is finding its financial equilibrium as investing in retirement moves to the top of the financial to-do list and paying off debt slides to second place. While preparing for retirement is a priority for both men and women, and they both plan to retire at age 66, there is one major difference: men are planning to save $232,000 more than women.

 

[a_majoor]

Good idea.  I'm fully confident the small team of software engineers working for the Mint is collectively smarter than the tens of thousands of hackers that will spend long hours attempting to break the system.

The technical reason Bitcoins are so strong:

http://www.forbes.com/sites/reuvencohen/2013/11/28/global-bitcoin-computing-power-now-256-times-faster-than-top-500-supercomputers-combined/

Global Bitcoin Computing Power Now 256 Times Faster Than Top 500 Supercomputers, Combined!

I admit, like a lot of others, I’ve found myself with a bit of a bitcoin obsession lately. I find the vast amount of effort it takes to create something that doesn’t actually exist, completely fascinating. So I decided to find out how much computing power is exerted in the effort to mine and run the global bitcoin network.

Back in May, the bitcoin network hashrate estimate on bitcoinwatch.com passed 1 exaFLOPS (1,000 petaFLOPS) – over 8 times the combined speed of the top 500 supercomputers. Today the aggregate bitcoin FLOPS measurement stands at 64 exaFLOPS (64,000 petaFLOPS).  To contrast that number, this month the top 500 supercomputers combined clocked in at 0.250 exaFLOPS (250 petaFLOPS).

So the entire bitcoin network is roughly 256 times faster than all the top 500 supercomputers around the globe combined.

What does this all mean?

Time for a quick Computer Science refresher; as the most basic unit of measure, FLOPS is a measurement of a computer’s performance, useful in fields of scientific calculations that make heavy use of floating-point calculations. Floating-point calculations are a method of representing and storing an approximation of a real number in a way that can support a wide range of values. For example, exaFLOPS is 10(18), or 1,000,000,000,000,000,000 math problems per second. Got it? Good.

A few things I need point out about some of the potential problems with bitcoin network’s 64 exaFLOPS number. Because Bitcoin miners actually do a simpler kind of math (integer operations), they have to do a conversion to get to FLOPS, which could skew the numbers. Also new ASIC miners, (An application-specific integrated circuit)—machines that are built from scratch to do nothing but mine Bitcoins—can’t do other kinds of operations. So the comparison is not exactly apples to apples. Also, the components used in supercomputers are multipurpose; meaning its resources could theoretically be used on something else, like real problems that actually exist. Solving cancer? Bitcoin ASIC miners like one created by Butterfly Labs, can’t do anything else.

Given the current speed of progress within computing (Moore’s Law), single supercomputers are projected to reach 1 exaFLOPS (EFLOPS) by 2019.  The current  most powerful supercomputer is Tianhe-2, developed by China’s National University of Defense Technology. It is the world’s new No. 1 system with a performance of 0.0338 exaFLOPS (33.86 petaFLOPS) according to the 41st edition of the twice-yearly TOP 500 list of the world’s most powerful supercomputers

Back in 2008, James Bamford wrote in his book The Shadow Factory that NSA told the Pentagon it would need an exaflop computer by 2018.To put these numbers into perspective, Erik P. DeBenedictis of Sandia National Laboratories theorizes that a zettaFLOPS (ZFLOPS = 10(21)) computer is required to accomplish full global weather modeling of a two-week time span.

Ultimately these numbers are just numbers and are therefore just fun to look at.

Now the bitcoin network isn't actually faster than dedicated supercomputers, simply has far more capacity and capability. Brad mentioned in some other thread that since the origins of the bitcoin are obscure, you could potentially be acessing an intelligence agency "honey trap" by using bitcoins, if that is true then the unknown genieii who created bitcoins have assembled the largest distributed comuter network ever created, although for what purpose we could only guess.

As for what super and hyper computers could be used for, things like weather and economic modeling would still be impossible, the are nonlinear systems with millions or billions of inputs and connections, and changes in any factor do not propagate in linear ways through the system.

 

[a_majoor]

While a Trillion dollars sounds impressive, it is only a small drop in the giant ocean of debt that is engulfing the world. I am more excited in the ability of small and medium sized business to access global markets through regulatory streamlining, which will help national economies to no end:

http://blogs.wsj.com/economics/2013/12/08/auto-draft-11/

U.S. Trade Rep: Bali Deal Shows WTO’s Potential

By Ben Otto

Nations of the 159-member World Trade Organization passed the first multilateral pact in the global trade body’s 18-year history over the weekend. Negotiators meeting in Bali portrayed the deal—largely aimed at cutting red tape in customs procedures worldwide—as a landmark accord to revive the flagging Doha round of trade talks and restore legitimacy to the WTOas a rules-making body. However, some trade experts say the deal delivers less than advertised.

U.S. Trade Representative  Michael Froman says it’s a good deal that demonstrates the WTO’s potential to broker future agreements. In an interview with The Wall Street Journal’s Ben Otto, he addressed several criticisms.

Edited excerpts:

The Wall Street Journal: No doubt streamlining customs is important, but many countries already have these systems in place. Is this really as exciting as the WTO is portraying?

Michael Froman: I think you’re underestimating the trade facilitation agreement. You have 159 countries agreeing to a set of common customs procedures around everything from publishing their customs regulations and forms to issues around pre-clearance. It’s one reason why estimates state this will contribute upwards of $1 trillion to global GDP.

So there’s a lot going on, particularly to help small and medium-sized businesses, which are the ones that have the greatest challenge of navigating countries’ disparate customs procedures. So it’s really about bringing small and medium sized businesses into the global economy.

WSJ: How important was this for the United States in particular?

Mr. Froman: I think it’s quite important. First of all, we have increasing numbers of small and medium-sized businesses exporting. We also have a comparative advantage in a lot of services, including logistical services. Having common procedures relates directly back to U.S. firms and U.S. jobs, because we play a pretty big role in making things move around the global economy.

WSJ: This isn’t over yet. Does it worry you at all that details about commitments and implementation remain pending?

Mr. Froman: I think you’re slightly misreading that. I think there’s an implementation procedure that is going to have to be worked out. That was always envisaged, that we reach agreement on what the disciplines are, where the flexibilities are. And then there’s a series of processes as governments list their various policies and procedures and schedules. That’s a perfectly normal part of this process.

WSJ: Ideally, wouldn’t some of those details have been part of the package? Did negotiators run out of time?

Mr. Froman: No, but I don’t think that was ever part of that. The whole idea is you reach agreement on what the disciplines are. You then need time to schedule what’s going to be subject to technical assistance or other conditions. They decide their own timetables for implementation. And that process of then putting those commitments into a document for ratification is sort of the natural rollout of the agreement.

This wasn’t something that was ever envisaged to be done prior to the Bali package being adopted. The Bali package had to be adopted so that countries could then go back and decide which of their policies and practices they want to list where and how they want to implement the agreement.

WSJ: India nearly blocked the pact with its insistence that it be allowed to continue its food subsidy program, which would have likely been illegal under current WTO rules. Pakistan strongly objected, worrying it will distort prices in its country. In the end, were you satisfied with what was negotiated?

Mr. Froman: The food security piece was absolutely critical to me. The reason we ended up quite comfortable with the food security package was because we ensured that if a country decides to pursue food security interests through subsidy programs they wouldn’t cause food insecurity for poor farmers in other countries. That’s why there are a series of safeguards in there [including] requirements for full transparency and not having an effect that distorts trade or adversely affects the food security of a neighbor. It ensures that the WTO system is to watch out for poor farmers and consumers in developing countries.

WSJ: This package is the first multilateral trade pact in the WTO’s history. What does this say about the WTO? Where does the WTO go from here?

Mr. Froman: For a small package, this is actually a big deal. I think it demonstrates that the WTO can work and hopefully will lead to other, maybe even bigger deals going forward.

And a 106 page report that suggests that the larger trade deals in progress in the 2013-14 time frame could be worth another $2 trillion to the global economy. Canada really needs to get a piece of this action for our own prosperity and help stablilize our debt position (getting the Federal budget balanced is only the first step)

http://www.piie.com/publications/papers/hufbauerschott20130422.pdf

 

[a_majoor]

Canada Post will commit Seppuku over the next five years. Seeing as most of the functions of a Post Office have been taken over by UPS and email, this is probably the best thsy could hope for, while taxpayers and the few people who stil use "mail" bear the brunt of the costs:

extbigfuture.com/2013/12/snail-mail-circling-drain-canada-will.html

The Slow Death of Snail mail - Canada will phase out door to door mail delivery over 5 years

Canada will have urban home delivery of mail phased out over the next five years.

Starting March 31, the cost of a stamp to mail a standard-size first-class letter will increase to 85 cents if bought in a pack, up from 63 cents. Individual stamps will cost a dollar.

Canada Post said that over the next five years, it will eliminate 6,000 to 8,000 positions, but it expects 15,000 workers will leave the company or retire within that period.

Altogether, it projects that the changes will account for an annual gain of between CAD$700 million to CAD$900 million.

Canada Post serves 15.1 million addresses, but only one-third of Canadians (about five million homes) get their mail delivered to their door. Everyone else picks it up from community, apartment or rural-lot-line mailboxes.

Canada Post has 60,000 employees and 6,600 Post Office. Canada Post said it is also planning to scale down its labour force by between 6,000 and 8,000 people, though it maintains it can do so through attrition as about 15,000 employees are scheduled to retire in the coming years.

It costs Canada Post an average of about $168 per address annually to operate the mail system. Here's a breakdown:

Door to door (one-third of Canadians) – $283 per address
Centralized point, such as an apartment lobby lock box (one quarter of Canadians) – $127 per address
Group/community mailbox/kiosk (one quarter) – $108 per address
Delivery facility such as a postal box (12 per cent) – $59 per address
Rural mailbox (five per cent of Canadians) – $179 per address
An April report by the Conference Board of Canada said almost half of all Canadian households send no more than two pieces of mail each month

 

[a_majoor]

We are doing some things right in some places (large charts and maps, follow link):

http://danieljmitchell.wordpress.com/2013/12/13/the-most-pro-capitalism-place-to-live-in-north-america-is/

The Most Pro-Capitalism Place to Live in North America Is…
December 13, 2013 by Dan Mitchell

Back in February, I said Australia probably was the country most likely to survive and prosper as much of the world suffered fiscal collapse and social chaos.

In hindsight, I probably should have mentioned Canada as an option, in part because of pro-growth reforms in the past two decades that have significantly reduced the burden of government spending.

And I’ve already acknowledged that Canada has passed the United States in the Economic Freedom of the World rankings.

So I guess I shouldn’t be too surprised to learn that the most economically free state in North America isn’t a state. It’s a Canadian province. Here’s a map from a new report showing how sub-national jurisdictions rate for economic freedom.



And here’s the ranking for economic freedom in states and provinces. As you can see, Alberta and Saskatchewan are in the top two spots, followed by the American states of Delaware, Texas, and Nevada.

Interestingly, Canadian provinces also held the bottom two slots, with Prince Edward Island being last and Nova Scotia second to last. The worst American states are New Mexico, West Virginia, and Mississippi.



But the previous table looks at the combined impact of national and sub-national government policies.

If you look at the policies that sub-national governments actually control, the rankings change a bit. Alberta still comes in first place, but Saskatchewan plummets.

Meanwhile, the best American state is South Dakota, followed by Tennessee, Delaware, and Texas.



Canadian provinces dominate the bottom of the rankings, with Quebec coming in last place (too many language police?).

The worst American state is New York, which isn’t a big surprise. And since Vermont was the top state in the Moocher Index, it’s also hardly a shock that it’s the next worst state.

One pattern you may have noticed is that American states without income taxes tend to be near the top of the list.

So does this mean that I’ve changed my mind and I’ll escape to Alberta when a future President Elizabeth Warren destroys America? Mehh….it’s still too cold for my tastes. Freedom is important, but I want someplace where I can play softball more than two months per year.

P.S. As this joke indicates, American leftists used to think about escaping to Canada. Times sure have changed.