Giving back or just giving - The Morality of Profit

This is a picture of Bill and Melinda Gates, among the most generous people in the world. Bill Gates is often quoted about his generosity as saying he is just "giving back." The video below from the Atlas Network points out that when rich people say they are giving back, most of them like Gates, are doing no such thing. In fact they are mis-speaking at the best, or being falsely modest at worst. At any rate it is a distortion of the truth. Watch the argument:

Bad choices made right

At our regularly scheduled pub night recently, a libertarian friend posed this question to me: "Why are you a libertarian?" I had to think for a moment then I blurted out something about having choices. Deep thoughts aren't generated at pub nights, so I was not prepared for the question and my answer was poor. My friend followed with something like this:
"So, if libertarians are all about choice but want to get rid of government health care, and allow people to seek private insurers or have no insurance at all, then libertarians are restricting choice by eliminating the government option and effectively forcing people to have private health care or none at all. What kind of choice is that?" Again I did not immediately grasp the fallacy in that thinking, not until afterward, and that's why I writing about it here. So here is a more thoughtful answer to both of the above questions.

Suppose the government was in the food production industry. Food is essential to life, often health care is too, but overall it can be argued that food is more important, most of the time to most people, I hope you agree.
Governments in this part of the world are not involved with food production (not directly) nor should they be. Food is produced by efficient producers, for profit, and marketed all over the world. Food moves rapidly and efficiently across borders without much government fuss (except for the "marketing boards" in Canada, but that is another story). Food scarcity is controlled by price and so is food abundance, supply and demand rule most of the time. I have lived here in the Greater Toronto area virtually my entire life, and I have never known there to be a shortage of food. If you can't find red apples there are green ones, there are always choices that generally fit everyones budget. It's amazing, never a shortage, always more than enough in stores, and yet profits are to be made, and wealth is produced. So much wealth, and so much food in fact, that even the poor are able find enough through private charity and food banks.

In Canada, and much of the Western world, governments are involved in health care. A true libertarian thinker would say that they should not be. A hypothetical libertarian government by eliminating the option for government regulated health care, is not removing a choice, rather, that libertarian government is righting a wrong. The government should not be doing that, should not be involved in health care. Unlike food production, where shortages are controlled by price and choice, supply and demand, ALL Canadians in all provinces know too well that there are shortages in health care, because scarcity is not controlled by price, it is controlled by government edict. All Canadians are familiar with the term "wait-time" when it is used to reference health care. But did you ever have to wait to buy bananas? Maybe one store had sold out, but in the larger centres there are always bananas nearby! Rarely a shortage, even in the depths of a Canadian winter.
But health care? Now you're talking shortages. Can't find a family doctor? Have you ever waited in a hospital emergency room for yourself or a loved one and been "triaged" almost to death? Have you ever been in a doctor's overbooked waiting room, waiting and waiting and waiting? Have you or a loved one ever had to endure a long wait to get much needed treatment for any sort of ailment, surgery or otherwise? I'm certain most Canadians would answer in the affirmative to one or more of those questions. It's the Canadian way of life and death. Yet for some reason Canadians are proud to say that: "free health care" is what separates us from our less caring American cousins to the South. This is a fallacy that needs to be examined on several levels, but not here.
The point of course is that food production and distribution is relatively unregulated, driven by the profit motive and yet it fulfills the needs of most Canadians most of the time. Health care on the other hand, is almost totally regulated, removed from the profit motive because it is somehow unseemly, yet it rarely ever fulfils the needs of its customers at any time. The chart in the corner may be dated, but the message is the same today.
What about the poor, what about catastrophic situations? These are issues that can be accommodated, even in a competitive system. While I don't have all the answers, I do know that what we have now can be made much better with choice. A libertarian government would strive for choice, but there are some choices that are just plain wrong.  

HBO's "Too Big to Fail" - fails

Paul Giamatti as Ben Bernanke

"The Ben Bernank"

Some of you will smile when I refer to "The Ben Bernank." It's a bit of an inside joke that I won't bother explaining here, but if you have seen some of my previous postings featuring Mr. Tugwit's cartoon bears you will understand.
Anyway Paul Giamatti (left) plays Ben Bernanke (right) in HBO's  rendition of "Too Big to Fail" based on Andrew Ross Sorkin's best seller of the same name. I did not read the book, so I don't know how the movie compares, but Giamatti's role in the movie is not huge. He just seems to be there at critical moments in the movie to move the plot along, and save the world from something worse (as he says) than the Great Depression. Apparently Bernanke is an expert on the causes of the Great Depression so it was opportune for him to be in office pulling the "right strings" during the economic turmoil that occurred during 2008. (that is what we are told)
The movie illustrates the very fuzzy separation between the government players and the private bankers. So of course the underlying question throughout the movie is how closely the events depicted in the movie match with reality? I suspect it is close, but of course only the real players know for sure. The relationship between governments (not just American) and the banks should be enough to make everyone watching cringe, though I doubt they will.
A few things about the movie are clear, mainly that its complicated. The actors do a good job of pretending to understand what's going on, at least it looks like it. Maybe that is just the good screenplay writing (Peter Gould and Sorkin). There is a point in the movie about an hour in, when one of the characters explains what is going on indirectly, and believe me this movie needs explaining. I'm not saying it was badly done, quite the contrary, I thought they did an admirable job (though my wife thought it was boring).
The biggest problem with the movie (for me) has nothing to do with the acting, directing, casting or anything to do with its production. The movie comes to a resolution when the American government effectively nationalizes AIG and the Congress finally passes the TARP bill giving money to banks that didn't even need it. When this happens you almost expect to see the Henry Paulson (William Hurt) character and Bernanke slapping their hands together in satisfaction - job well done. The cavalry came to the rescue and everything has been fixed! That is the problem with the movie. It perpetuates the lie that an unimaginably complex creature like "the economy" can be fully understood and manipulated by a few people in a back room. It hasn't even been three years since the mess appeared, but the impression the movie leaves is things are back to normal. The Market is behaving like things are good, and all has been appropriately controlled. But if it is true, as I suspect it is, this economic repair is like the bubble gum in the cracked dam. We are not done yet.

Firecracker Day or British Heritage Day

When I was a child growing up in Toronto we called this holiday we are celebrating today, (Victoria Day) "Firecracker Day." It was our annual excuse to buy firecrackers (much easier to get in those days) at the local variety store, and spend the day getting into all kinds of mischief, like blowing up tulip blooms with  small firecrackers. I'm sure that's distressing to any gardeners out there, but the unfortunate and numerous tulips provided us with hours of entertainment.
It was a day off school and off work for most, because our true-blue Ontario stat-laws meant business was at a standstill, or else. Things are still shut pretty tight around here even in 2011. But that is another posting.
Even as a child I knew that celebrating the birthday of a dead monarch was a dumb idea, except for the fact there was no school. It still is a dumb idea, but rather that eliminating the holiday why not change the rationale behind it?
We in Canada owe our British forebears a debt of gratitude, not for the old queen or the present one, but for the rules, laws, and practices that we use to this day to govern ourselves. Canada is as successful as it is, because of the British idea of liberty from Magna-Carta to the Westminster System. While these facts may be widely known, they are not really understood by many Canadians, who have a very rudimentary idea of the concept of liberty, and somehow think that it is an American idea. Of course the Americans owe to Britain that same debt of gratitude because they are after-all our cousins.
Anyway, just a suggestion, change the name of the holiday to British Heritage Day, or Westminster Day or just keep Victoria Day. What really needs to change is what we are celebrating, not a birthday, but a way of living in liberty.  

Out there on the fringe

If you are reading this after 6 pm in the Eastern Time Zone, then you and I will likely make it through the night. Somehow I knew we would.
Apparently the mainstream media were starved for real news this week, or they were concerned that the end is indeed near, or they are giving us the old "wink-wink" with the story of the fringe Christian group preparing for the apocalypse today May 21, 2011.

Last month I attended a media gathering (but very few media were there) of "fringe political" parties in Toronto so that we, the fringe parties, could get some media attention during the Canadian election campaign.
Thats right the Libertarian Party of Canada is considered a fringe group. The party that advocates freedom from coercive force especially by government, the party that advocates free enterprise capitalism, the party that advocates property rights, limited government, adherence to a constitution that protects individual liberty, and on and on, WE are fringe! It boggles my mind every time I think about it, freedom is fringe! Did we get the same coverage as those moron Christians in the video below? No, not even close. I guess next time we should try billboards with a scary message like "freedom is not free" or something more ominous. If there is a next time! ;-)

 

Kids, Voters and the Nanny State

The results of the last election here in Canada has had many minds churning, not the least is Stefan Molyneux. I'm not suggesting that the following video by Mr. Molyneux was produced in response to the recent election here, but it certainly could have been.
In a very simple yet insightful comparison, this YouTube posting (The State as Family) shows that modern day voters are like children, and then continues the simile to show how the State is, and has become, like the family through a slow relentless evolution that has produced the leviathan known as the Nanny State. This has happened here in Canada, which I don't think is even mentioned in the video, but also throughout Europe and the United States which prides itself as being the "Land of the free" etc. etc. According to Mr. Molyneux, the pervasive jingoism that periodically erupts in America (shooting of bin Laden), is just blatant Nanny-statism, and I have to agree.  

Conservative? Really, or just more of the same?

The new Harper cabinet has been announced, all 39 members of it. So I decided to play with MS Excel a bit and compare how the size of the Federal Cabinet is correlated to spending, debt, and deficit.
The graph on the left is mine (from this data) and shows how Cabinets have grown throughout the history of Canada, up to and including Harper's new cabinet today. If you click on the graph it enlarges, but even at this size it is clear that the size of the Federal Cabinet has grown more in the last 50 years (where the black arrow is located) than in the previous 90 years. The most significant dip in the size of the cabinet occurred during the term of Liberal Jean Chretien, but while Stephen Harper has been Prime Minister, the Cabinet has returned to its former bloated size of 39 members, last seen during the term of Brian Mulroney (also a Conservative).
Now compare that graph to the one on the right (supplied by John Shaw President of the LPC). It shows the last 50 years of government; notice the relatively flat green line (program spending) during Chretien's term in office, and the dip in the red total debt line. Now I'm not saying that the countries' debt is directly correlated to the size of the Cabinet, but it is oddly similar to the other graph isn't it?
So what does this mean? It may mean nothing, or as I suspect, it may mean that Mr. Harper will not deliver the small more limited government he has promised, but rather, he will continue on the road to more of the same. Unless he pares down the budget's of each of the now more numerous ministers (almost impossible), then his promise to balance the budget in 3 or 4 years is just idle chit-chat. Either that, or he expects rapid, solid growth, in the economy real soon, which I think is equally unlikely. Place your bets now.

The church where God is not required

Reverend Gretta Vosper is an avowed atheist and minister of the United Church in Toronto. Now if that doesn't sound like a contradiction I don't what does.
An article in the National Post today highlights that story, and discusses the issues around the title of this posting.
It has been common knowledge for a long time that the United Church in Canada is one of the most liberal of all religious organizations in the country. It was instrumental in legalizing same-sex marriage in Canada six years ago. Today it supports causes ranging from "climate justice" to the perceived plight of the Palestinian refugee, and other issues that make it among the most "progressive" of all churches. One of the ministers, frustrated with the Churches progressive stand on issues of the day is quoted as saying:

“In the 1960s and ’70s we became embarrassed about Jesus. And so we distanced ourselves from Jesus, and the point is without Jesus there’s no point in having a church. iTunes has better music and the NDP has better policies; everything else we do now somebody else does way better. The only thing we can do is this Jesus thing.”

Well, maybe iTune does have better music, but I know the NDP is not known in my circles for good policies, but they are progressive too. I'm not so progressive. For me the reality of this story has nothing to do with this church, though I do admire its liberal stand on many issues, I'm not really concerned with its survival as the Post article illustrates. The article highlights (without saying it) the question: What is the purpose of a church? Obviously it fulfills some human needs, whether rational or not, churches would not exist otherwise. Personally I don't think it is rational, however, I don't think gambling is rational, or binge drinking, or smoking, or doing drugs or any of the behaviours people can do in a voluntary way. Many people are irrational for a part of their lives, at least.
Which brings me to: churches are not going away. Once, as a youngster with Objectivist ideals, I thought (hoped) religion would go the way of the Dodo bird. Today I see religion for what it is, a social club, a fraternal society, a sorority of the like-minded; and as long as it stays voluntary with no coercive impact on government, then we can all get along. But they need to be watched.  

Gas Pain and Tax Pain

Local Toronto media have made a big issue of the price of gasoline in the last few weeks. I'm sure prices have risen everywhere in the US and Canada of late. In fact the price of gas seems unrelated to the price of a barrel of oil now. Why? Gas is refined from oil, and about a dozen refineries along the Mississippi River that control more than13% of American refining capacity are in danger of being flooded by the river (see graphic). Just the threat of less supply, with constant demand equals rising price, simple economics. But the whining media instead of explaining the story seems content with stirring the pot. Why not have government regulate gasoline? How can we help you squeeze more mileage out of your tank, and on and on? There are even stories about how consumers will have to choose between basic household necessities and filling their gas tank? At least they have a choice and once the flood threat dissipates, I expect the price of gas to moderate soon.
During my election campaign, in my closing or opening remarks, I used some research done by the Fraser Institute that illustrated just how big the Canadian government has become over the last 50 years. The research described how the price of basic necessities like food, shelter and clothing have increased over that time, but also showed that the tax burden surpassed all of them by a wide margin. In fact taxes are now the largest budget item of the typical Canadian family. So referring back to the media gas story, the tax story, the story where our choices are limited or non-existent, is ignored, not just by media but by most citizens.
The good people at the Fraser Institute updated that research in the latter days of the election and it was scooped up by the National Post too. The graph below is from this pdf, and the graph tells the whole story.

An army of one in a losing battle - I hope

Elizabeth May is described as having the "energy of a hyperactive chipmunk and a matchless ability to hog the spotlight." That quote comes from a column by Margaret Wente in today's Globe and Mail.

I noted in yesterday's blog post that Ms. May won election in B.C. as the only Green ever elected in Canada, while her party is shrinking in popularity everywhere else in the country. Ms. Wente goes on to use Uber-Environmentalist George Monbiot, to help explain why the green-movement is in retreat across the planet.

Of course there is nothing wrong with the idea of saving the planet, if indeed it needs saving. The problem is that the supposed cure or planet saving treatment, is far worse than the disease that is alleged. People everywhere are starting to see that (I hope), and the bloom is off the (green) rose.

Monbiot laments this fact in recent essays published in The Guardian. On May 2, 2011, Monbiot sounds despondent in a column "Let's face it: none of our environmental fixes break the planet-wrecking project," you know, the one where we are hooked on fossil fuels so we don't freeze in the dark but are wrecking the planet. Do you feel guilty having survived the winter? 

In this column Monbiot spells out the problems the green-movement is facing including this wonderful passage:

"Our reliance on the mineral crunch, which was supposed to have brought the economic engine of destruction to a grinding halt, appears to have been misplaced. The collapse of accessible mineral reserves has not occurred, and shows little sign of occurring within our lifetimes. Capitalism has proved adept at finding new reserves or (in the case of fossil fuels) substitutes for those that are depleting. This takes place at a massive cost to the environment, as exploitation intrudes into an ever wider range of habitats and involves ever more destructive processes. New mineral reserves allow us to continue waging war against biodiversity, habitats, soil, fresh water supplies and the climate."

 Poor fellow, relying on mining to get those rare minerals out of the ground so he could use his computer and internet connection to continue spewing this anti-human drivel out. He laments that the damn capitalists keep finding new oil reserves, when, oh when, will peak oil happen? When will people realize that the end is near and habitats are collapsing everywhere (even though they are not)? Thats what he sounds like, its pathetic. Monbiot even has a wiki-link to the Steady-State Economy, which is what he and all environmentalists of his ilk (including Ms. May above) yearn for. This steady-state goal unmasks him (and his confreres) as wanting to be chief puppeteers, controlling all things in your life from your water usage to your usage of fuel, clothing, food, (read it if you don't believe me), the size of your family everything! Producing....
"..an economy with constant stocks of people and artifacts, maintained at some desired, sufficient levels by low rates of maintenance "throughput", that is, by the lowest feasible flows of matter and energy from the first stage of production to the last stage of consumption." 
The result is a GDP that neither grows nor shrinks by some magic wave of government fiat. Of course someone or some group will be controlling all that - the puppet masters - the elite technocrats, that are experts in creating this utopia. Can you imagine?

Did you vote Green? Shame on you.