Reforming Welfare

The Economist has a very good summary of the effect the "Welfare to Work" program put in place by Bill Clinton in 1996 has had on welfare claims in the US.

Tough love works

Canadian provinces would be well advised to follow this lead, and use both sanctions and incentives to get people into the workforce and off the public purse.

On Agricultural Subsidies

Amazingly, there is another column by Jeffrey Simpson that I agree with.  He calls for the end of agricultural subsidies, in particular supply management such as Canada has for dairy products.

Fear trumps reason in the politics of agriculture

As Hayek and Mises identified more that half a century ago, using such supply management is an attempt to increase the economic security of the producers - which has the immediate effect of decreasing the economic security of everyone else in the economy who has to pay to support those producers.

Get rid of the marketing boards.

The Cost of Ethanol

The Economist publishes a small graphic this week regarding the relative price of making ethanol from various feedstocks in the US and Brazil.

Ethanol | Economist.com

The key thing to recognize here is that the price of ethanol fuel is tied to the price of food.  Rising food prices will mean rising energy prices and the food consumer will always be willing to pay more for food than they will for fuel.  This makes ethanol an extremely risky venture, economically.

School Maintenance in Calgary

Recently, as has been reported in the Calgary media, many of the older schools in the city require significant maintenance to bring them back up to a level that would make the schools useable.

Minister tours schools with leaky roofs, plastic bags on windows

The Calgary Board of Education and many pundits have indicated that the problem is that the Province of Alberta hasn't provided sufficient funding for the schools.

I see this problem as evidence of why the Trustees on the CBE should be fired and the Board dissolved altogether.

The Board of Education has the responsibility to run the schools.  They avoided spending money on maintenance so they could meet the demands of the teacher's union, and reduce class sizes and all those "easy to sell at the polls" ideas.  But they were derelict in their duty to maintain the schools.

This is because they knew that if they ignored it, the provincial government would baili them out.  This is because the Board of Education is responsible for spending money, but not for raising it.  This situation will always end up with poor decision making.  If the Board raised it's own taxes the board would not be so foolish because they would have to ask the people for the money.  But asking the province is easy.

Therefore, since we cannot give the Board of Education taxing powers, we should get rid of the board altogether.  This would leave the Provincial Government to run the schools.  This is also not acceptable because the distance would make it impossible to make the school system responsive to the needs of it's customers (the parents and students).

Therefore, the correct answer is to privatize the schools and use a voucher system.  Additionally, the province would set out requirements of how much money the schools must spend on maintenance - or rather set standards for maintenance and building integrity.  The individual schools would have to manage their money to meet the needs of the customers.  If an individual school ran into problems with maintenance, the parents who chose that school for their children could blame no one but themselves.

The market forces would ensure that such events would not happen in the future and the government wouldn't be forced to bail out a city's schools again.

What the Kyoto fans don't understand

Jeffrey Simpson misses the boat AGAIN.

Time to get our head out of the oil sands

The problem of climate change, assuming it is happening and is caused by anthropogenic emissions to the environment, is that it is too big a problem for us to do anything about.

To stop the increasing CO2 content of the atmosphere, we would realistically have to return CO2 emissions to pre-industrial levels.  While this could be done via things like carbon capture and sequestration, the cost of doing so would be detrimental to economic growth.  And economic growth is what supports our standard of living. 

Considering that the computer models are not very reliable (they cannot predict the climate of the 20th century using data from 1900 and known emissions...) we cannot even be sure what impact reducing CO2 emissions will have.  Reducing emissions to a lesser level but still higher than pre-industrial levels will not reduce climate change.  It may defer the date at which it occurs, but it cannot stop it. 

Therefore - we will need to adapt.  And why not simple spend our capital adapting.  Life and human civilization have adapted to changes in climate before - albeit on smaller regional scales.  We can adapt again.  And we will without any intervention by the state.

Why Lougheed is wrong

Jeffrey Simpson quotes former Alberta premier Peter Lougheed on the oil sands projects:

Call a halt, Albertans

The government should NOT interfere in the workings of the market.  In this case, the market will slow the pace of development because of rising costs and shortages of materials and labour.   It will slow without intervention. 

Government could remove some of these obstacles to allow growth to continue unabated, such as spending billions on infrastructure to and around the Fort McMurray area, and the federal government could open up the borders to foreign labour or force more people off the unemployment roles in Eastern Canada who could then move to Alberta to work.

But taking action to assist the pre-existing market forces to slow the pace of development is detrimental - business will see the government as anti-development and will choose to spend their capital elsewhere more readily than if simple market forces take effect.

Mr. Lougheed's problem is that he thinks that someone should be planning.  A lack of faith in the Invisible Hand, in my opinion.

On Caledonia

I have been thinking about whether to comment on this subject for some time, and Steve Janke has finally given me the pieces to put together a commentary:

Steve Janke: Angry in the Great White North

As I understand it, the natives lost in court because they couldn't convince a judge that they had any valid claim to the land. Therefore, they have taken to arguably criminal action to intimidate the provincial government into giving them what they couldn't get through legal means.

The provincial government has now decided to buy out the homeowners in Caledonia so they can give the land to the natives. They are using taxpayers money to pay the a criminal organization to make the problem go away. This is called extortion. A further criminal enterprises.

The primary reason McGuinty's government can do this is that the homeowners of Caledonia, like all other individual Canadians, have no right to property. This is a result of the Marxist ideals of Mr. Trudeau and the drafters of the Charter of Rights and Freedoms who completely understood that property rights are perhaps the greatest limit to the power of the state, and they didn't want to limit the power of the state over the individual. This is because Mr. Trudeau was not a liberal in the classical sense. He was a socialist.

This situation in Caledonia also shows that one key failing of Canada's democracy is that individuals do not have "equality before the law". Democracy in Canada slowly slides towards autocracy and oligarchy because some groups within society (ie. aboriginal groups) have greater rights than individuals or other groups.

Therefore, in order to prevent a multitude of Caledonia's from happening, the people of Canada must demand that the Government of Canada, and the governments of the provinces, revise the Constitution to ensure that property rights are enshrined, and that all individuals have absolute equality before the law.