The Consumer Product Safety Improvement Act is corporate welfare and unfair

Here is a perfect example of crony-capitalism at work:

So what happened? Well, after last year’s spate of killer lead toys and their subsequent recalls, the government stepped in with new legislation. Unfortunately, the Consumer Product Safety Improvement Act that they passed says that “manufacturers must now test for lead paint, and by Feb. 10 they must test for lead and certain chemicals anywhere in products made for children 12 and under.” This means even small companies who, say, don’t even use paint (much less import products from Chinese factories), will be required to shell out large sums of money to certify their toys are safe.

Big corporations should not have the privilege of government favoritism in the security market. If they want the reputation that their toys are safe, they should earn it in a market for safety inspection. They should pay chemists to test and certify that their junk is safe. Customers can select what they want to buy after seeing a stamp of approval. People should also be free to choose to buy an untested piece of junk. Furthermore, the government bureaucrats who oversee these tests should face a market for their skills too.

Instead, this CPSIA legislation is corporate welfare and subsidies in disguise. The big corporations cause the problem by importing cheap and dangerous toys. The new legislation adds costs that crowd smaller manufacturers out of the market. That is wrong.

I want to draw parallels to the Canadian listeria hysteria and how ignorant socialists become part of the problem. The socialists often argue that they are correcting failures in the “free market” with such legislation. Such a reflexive desire to turn to government control is only foolish and stems from an ignorance of why a price mechanism makes markets work.

Without competition in the market for safety inspection, we will never really know if the inspection is worth the cost. We will never really know if people actually want that level of safety either.

Geoengineering the Climate - the Dangerous Game We Shouldn’t Play

Whether or not you believe global warming is man made or whether you even believe man has the ability to “control” climate, I think most reasonable people would agree that any attempt to artificially modify the climate to fit a “ideal” global temperature model is a bad idea:

The plan would involve highly controversial proposals to lower global temperatures artificially through daringly ambitious schemes that either reduce sunlight levels by man-made means or take CO2 out of the air. This “geoengineering” approach – including schemes such as fertilising the oceans with iron to stimulate algal blooms – would have been dismissed as a distraction a few years ago but is now being seen by the majority of scientists we surveyed as a viable emergency backup plan that could save the planet from the worst effects of climate change, at least until deep cuts are made in CO2 emissions.

Paul Martin is no Man of the Year!

I can not stop laughing at Stephen Marche’s nomination of Paul Martin as Canada’s Man of the Year because of what his performance as Minister of Finance ten years ago:

We are in this enviable position compared with other countries mainly due to Martin’s vision and his toughness as finance minister and prime minister.

His 1998 decision to halt proposed bank mergers has been utterly vindicated.

Well, what enviable position is that? We have only started this recession. Until the recession is over, it is pretty premature to call our position enviable.

I want to see a convincing argument from either Stephen Marche, Goldman Sachs that he quotes or anybody else that explains the economic of cause and effect between Paul Martin’s policies and our enviable position. For all we know, deregulation could have left us better off than we are now. All we get is motherhood and apple pie:

The social program that should be the foremost priority of progressives would have already come into existence, and would be doing more for working families, more to increase access to opportunity for underprivileged communities, more to maintain the social fabric, than any other potential government policy.

Maybe that is all the readers of The Toronto Star can handle.

Here is a classic quote:

But Paul Martin has never received his full measure of appreciation because his vision for the country has been so thoroughly assimilated that we barely recognize it as his anymore. He saw that a robust capitalism was the only way to produce enough wealth to pay for the social programs that we cherish, and that strong social programs and regulation were necessary to keep capitalism from destroying itself.

Uh…. come again? Say what? If we have enough wealth to pay for the social programs that we cherish, why are the raging socialists still complaining for more???

What is Yann Martel thinking????

I do not know who Yann Martel is trying to impress but his ongoing stunt makes him look like a socialist fool. My suspicion is that his crowd is not the most clever. Take a look at his proud list.

Without question, these are all marvelous works of literature. What may not be so obvious is that the vast majority of these works were not the product of government subsidization of culture.

What irony! These are the works that Yann Martel holds up to defend the government subsidization of culture!

Here is my open letter to Yann Martel:

Monsieur Martel,

Arrêtez vos bêtises. Vous vous présentiez comme un flâneur snob.

Charles Anthony

Why is Flaherty promoting credit as an economic solution?

Do Canadians really demand credit? or do they simply want money?

I am getting tired of hearing a lot of economic crap from our government. The repeated dogma seems to be “Canadians want credit.” but I do not believe that one bit. I do not hear Canadians asking for credit and even if I did, I would dismiss that Canadian as being crazy or irresponsible.

People need money. People do not need credit. There is a huge difference.

Canadians work hard enough and should keep their own damn money. Taxes should be reduced and the government has to stop inflating the money supply. People need credit like they need a hole in the head.

I wonder why does Flaherty keep repeating that Canadians are demanding credit when such a demand makes no sense. Extending credit only accentuates economic dependence and is an incentive to irresponsibility.

I think we are being deceived. If anybody benefits from extending credit, it will be the lenders first. Ordinary Canadians simply need money and extending credit is not the only way that Canadians can keep more money in their pockets.

Conference Board of Canada spews out nonsense about the recession

How can personal frugality and responsible household spending be bad for the economy? The chief economist at the Conference Board of Canada is spewing out the tired old Keynesian lines. I guess he must think that putting on a smiley happy face is a replacement for economic policy too:

The survey found Canadians say they are financially worse off today than six months ago and expect to be even worse off in six months.

Hodgson said there are sound reasons for Canadians to be depressed about the future, but added that part of the current gloom is psychological since the country has yet to see the deep job losses and economic collapse that has occurred in the United States, Japan and Europe.

“People are now translating that into, ’Geez, maybe I do have to tighten my belt and be more cautious in my spending during this Christmas period,’ ” he said.

“Unfortunately, that just makes things worse. It pulls more demand out of the economy and will make it even harder for the economy to rebound.”

Consumer confidence in both Canada and the U.S. has been plummeting in the wake of the stock market meltdown, ongoing credit crisis and slumping economies.

If reckless spending and loose credit is bad for the individual then it is bad for the economy. Period. To lay blame on consumers for tightening their belt is nonsense.

A Bright-side of the Economic Downturn

The mighty bear might have some trouble flexing it’s muscles and scaring it’s neighbors in this chilly economic climate:

The bleak scenario would mark a rapid unraveling of Russia’s oil-fueled economic gains over the past eight years, during which time the government has paid down most of its foreign debt and built up a vast stockpile of international reserves.

[...]

Russia, which grew at over 8 percent last year, is facing a severe slowdown in growth, and possibly even recession next year, analysts say. Torrid figures released earlier this week showed that industrial output had plunged 10.8 percent in November from the previous month, signaling a dramatic slowdown in the final quarter.

AbitibiBowater Inc deserves nothing in “fair market” compensation

Sorry, AbitibiBowater! You lose!

The idea of a government enforced monopoly demanding “fair market” compensation after that monopoly is dismantled is laughable if not ignorant. Without the government granting the resource rights, it is anybody’s guess whether the business would even exist. So, there is no “fair market” at all.

Not that I would expect the Newfoundland government to do any better but for once, Danny Williams makes sense:

Revisiting his campaign theme of “no more giveaways,” Mr. Williams wished the company well, but said it will leave the province with the same resource rights it had on arrival: none.

Be this a lesson to all of the cronies who thrive on government privilege. What the government giveth, the government can taketh away.

Canadian banks are running out of credit-worthy borrowers

Why is the governor of the Bank of Canada, Mark Carney, telling the commercial banks that they should be lending out more money??? [I wonder why he should be talking at all? but that is a different story.] I would hope that the bankers know their customers better than the central bank does — they just have to. That is their business. They make profits by lending money to people.

The banks can lend more money but they can not create credit-worthy customers out of thin air. The banks can stimulate production in the short run by extending credit but the banks can not create productivity. There is a huge difference between short run production and long term productivity. It is the long term productivity that is the ultimate deciding factor for a lender because the lender needs the regular monthly payments.

Maybe one day, people will wake up to the fact that government enforced monopolies are the best way to misallocate resources. A monopoly on the issuance of currency is not free of economic law nor of naturally selfish human behavior.

Jörg Guido Hülsmann sums our hopeless predicament quite simply in his recent article Deflation and Liberty:

A paper-money system is not beneficial from an overall point of view. It does not create real resources on which our welfare depends. It merely distributes the existing resources in a different manner; some people gain, others lose. It is a system that makes banks and financial markets vulnerable, because it induces them to economize on the essential safety valves of business: cash and equity. Why hold any substantial cash balances if the central bank stands ready to lend you any amount that might be needed, at a moment’s notice? Why use your own money if you can finance your investments with cheap credit from the printing press?

Pre-Drinking: The “new” culture of intoxication

This hilarious story in the Toronto Star is reporting on the brand new practice of students drinking before going to bars.

Young people are engaging in a “new culture of intoxication” that even has its own buzzwords – “pre-drinking” or “pre-gaming.”

If the conclusions of this cutting edge research struck you as strange, you’re not alone. The story provoked an avalanche of comments from readers pointing out that pre-drinking is anything but new. My favourite comment:

“Wow great story. Let me get in my delorean but first lets pick up Michael J. Fox and Christopher Lloyd and we will all go back in time to when this article was written. 1952 Here i come.”

And just a few more:

“New Phenomenon? I am in my fifties and can remember doing it in my teens”

“Get with the times, boys. We called it pre-drinking when we did it 20 years ago.”

“Nothing new about that…I used to do that back in the 60’s”

“Um, I know people who did this in the 1970s and 80s. In the 1990s, when I was in uni, everyone did this.”

“Will they blame the economic crisis for this too? We used to call it “pre-loading”. As everyone before has said, this is not new”

“Sure, sure, it’s “new”. I realize I’m not saying anything different from what everyone else is saying, but the “pre-party” is not even remotely new.”

“Nothing new about this
There is absolutely nothing new about this.”

“The fact that ‘pre-drinking’ has been going on for at least 20 years and is just now being regarded by hack scientists as ‘dangerous’, probably means it isn’t. I guess they need something to scare us with so that grant money keep rolling in”

“I did this back in the college 10 years ago and my high school friends were doing it too before that”

“New phenomenon?
I’ve been doing this since I was 18!”

“This is new?
Huh. It seems I was ahead of the curve when i was doing this with my friends 13 years ago.”

“this is not something new… people have been pre-drinking since my first year of university in 1995″

“My friends and I and the vast majority of people in the small town I grew up in were “predrinking” 15yrs ago.”

“This was going on more than twenty-years ago when I was going out to bars and clubs. A few shooters or shots adn you are good to go.”

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