Tick tick

[james_davis_nicoll]

The fate of Harper's minority government rests on the upcoming budget, which will be delivered by Finance Minister Jim Flaherty at 4 p.m. ET on Tuesday. Opposition politicians say they are willing to bring down the government if the budget doesn't address the needs of the faltering economy.

Comments

[wizwom.livejournal.com]

That's a VERY volatile position to take.

Other than increasing the money supply, lowering Taxes and regulation fees, I can't think of a single useful thing a government has ever done to "address the needs of a faltering economy".

[dubiousprospects.blogspot.com (from livejournal.com)]

Anything that lowers the cost of transport or process industry energy. (Rideau Canal is the canonical Canadian example.)

Financial regulation, so that people can rely on banks. (Canada's banking laws were written by dour and distrustful Presbyterians and are typically actually enforced. That's got a lot to do with why our financial sector is a bit halt at the moment, rather than lying there disemboweled.)

Education; if you need more engineers, something has to be producing them, etc. Cheap for the student post-secondary education was originally a Cold War post-sputnik policy for a reason.

Progressive taxation; if you allow wealth to concentrate, policies of avoiding change predominate, change for the better doesn't happen, and the economy stops innovating.

But, specifically, what they mean is that the budget has to do something spendy to address manufacturing getting gutted and switching off of fossil carbon for some other primary energy infrastructure. (Harper's party is the party of Alberta's oil industry; one of his core goals is to increase fossil carbon burning.)

The core meta-goal is either to remove Harper or make him present such a limp-wristed lefty budget his own party chucks him in a sort of fundamentalist revulsion.

Me, I'd rather Harper -- a neo-con of limited ability -- than Igantieff -- a neo-con of greater ability and greater pragmatism and a worse history on important issues like aggressive war and torture.

[wizwom.livejournal.com]

• Lower transport or process cost
  
  This, of course, could only happen by reducing government license fees, taxes on transport fuels, and deregulating as far as is safe the industries, that is, what I already stated worked.


• Financial regulation
  
  A level of regulation and oversight is needed, in order to prevent fraud and control the money supply. I hope you understand ANY fractional reserve system grows the money supply. A better model for banking is the savings and loan, where the shares are not guaranteed. At least it's honest and a failure hits those who put there money in with risk. Any government that guarantees losses from risks willingly assumed does a disservice to the people.


• Education
  
  Primary and secondary education funded by the state leads to overpriced, underperforming warehouses for children that do not prepare them for the needs of the marketplace.
  
  Advanced education funded by the state leads to the situation we have now: candidate slump (remember when the ACT went from a 32 scale to 36, and SAT from 1200 to 1600 without universities raising their requirements) and the lack of ability in the subsidized "universal education" students. It also leads to schools charging a minimum of what the government pays, rather than a rational rate (20 students, $1000 each... 20K to hold a class? Someone's making out like a bandit, and it isn't the professor).


• Progrssive Taxation
  
  A favorite plank of the Marxist manifesto. I see no less social stratification in Sweden than in the U.S.

Now, for liberals, yes, the "budget has to do something spendy" - because they cannot say "we're going to foster a strong economy by making it easy to do business in Canada!"

[anton-p-nym.livejournal.com]

Ah, yes, tax cuts, the fiscal homeopathy of choice for today's conservative. Times are good? Cut taxes, and the people will reap great rewards from the bounty of the free market. Times are bad? Cut taxes, and the people will reap great rewards from the relief of their burdens. Because it worked so damned well in the US...

(I suppose it's better than bleeding the wounded, but it still isn't a cure-all by any means. And I'm bloody outraged that Harper dropped the GST by a measily 2% in the hope that voodoo magic would spur spending higher. It was an idiot move, losing far more tax revenue than it gained in new spending and it was regressive at the same time hitting lower- and middle-income households harder than the upper brackets... and, because it was dropped in two stages, it was a major headache for small business.)

Also, you overestimate the power of rationality in a market environment; see the various panics that have happened lately.

I might add that roads don't spring fully formed from the forehead of John Galt, nor do they remain pristine and untouched by the forces of nature out of pure will. Children don't obtain job skills by Lamarckian hoodoo, and food is not necessarily made pure by the Power of Market Forces.

There are things that government can do better than private enterprise. And there are things that private enterprise can do better than government. The joy of a mixed economy is that, given a bit of experimentation and periodic adjustment, you can find the right balance between the two.

-- Steve knows that unrestricted government spending is bad, but the world has certainly seen that the board room is not especially more trustworthy than an elected government... and at least everyone can vote the bums out of Parliament.

Lowering GST

[(Anonymous)]

"and it [lowering GST] was regressive at the same time hitting lower- and middle-income households harder than the upper brackets"

How does this work?
I understood that taxes on consumption are regressive, and therefore that lowering a tax on consumption would be progressive.
Do I misunderstand you?

Rob

Re: Lowering GST

[maruad.livejournal.com]

I suspect he is referring to the fact that it was dropped in stages forcing everyone who collects the GST for the government to change their procedures/computers systems etc... twice thereby incurring double the cost of making the change.

Re: Lowering GST

[anton-p-nym.livejournal.com]

I kinda shot from the lip on that one, so I may have implied something other than I meant.

The GST is a value-added tax, but many staples (basic foods, medical supplies, residences/rents, etc) are either exempt or zero-rated. If it were a bit more tightly focused, I'd call it a luxury tax... but since it applies to fuel and heating it strays well beyond the luxury tax bounds.

I called the cuts to the GST regressive because of those exemptions; cuts disproportionally benefit the "big spenders" because most of the tax is on discretionary spending.

-- Steve's not economist enough to know if that meets a rigorous definition of regressive or not.

Re: Lowering GST

[(Anonymous)]

Ah, thank you.

Rob

[maruad.livejournal.com]

"There are things that government can do better than private enterprise. And there are things that private enterprise can do better than government. The joy of a mixed economy is that, given a bit of experimentation and periodic adjustment, you can find the right balance between the two."

Agreed!

[(Anonymous)]

Lower transport or process energy cost -- the Rideau Canal is the standard example because the White Queen ordered it and paid for it and then there was a) a transport route, having which was the military justification for doing this in the first place but which got used primarily for commercial transport, b)a reduction in the nasty diseases because the malarial swamps were flooded too deep for the mosquitoes (not actually malaria, but you need modern medicine to tell the difference), leading to greater prosperity due to less ghastly dying, and c) the consistent, regulated water levels meant there were a lot more places you could put a water-driven mill for the usual range of industrial uses. Enormous payoff. No conceivable consortium of private interests could possibly have paid for it.

There aren't that many obvious equivalents; there's already a transport infrastructure, after all. But things like the Wheat Board function similarly, and there's lots of opportunity to undo some of the mistakes of the automobile in terms of urban surface transit.

Educational policy in Canada hasn't got much to do with SATs. I also seem to recall Honda locating a big plant in Ontario rather than Kentucky over "workforce already educated" issues, so much as I wish the various Canadian provincial education systems worked better, they're not doing so bad.

There's nothing wrong with honest fractional reserve banking; you may need to remonetize every so often to remove some zeros, but that, like money, is just accounting convention. The "honest" part is important.

If you see no less social stratification in Sweden than in the US -- and we're not actually talking about US policy, remember -- then I'd be curious where you see the Swedes who have no access to medical care or who starve to death because they have no jobs; where the walled communities are in Sweden; and why the US doesn't have civil penalties pro-rated to income. (A Nokia exec got dinged something on the order of a hundred thousand euros for traveling above the speed limit in a school zone, not so long ago.)

It is already in some respects much _too_ easy to do some kinds of business in Canada; lots of real estate developers making a ghastly mess in Ontario or BC, for example. Actual small business isn't so hard. And the Liberal Party of Canada is not what one would call generally hostile to business.

Profit does not excuse anything, because some profit is a necessity, not a virtue. Making a virtue out of a necessity is a bad thing. The trick with policy is to get the good things under circumstances where the necessities are covered. Governments certainly can do that. (Initial development of hydro-electric power in Canada is one of the obvious examples.)

[wizwom.livejournal.com]

The example of railroads in the U.S. shows that a cut-throat free enterprise boom is very capable of raising capital for large works. I feel that the useful canals, which would show a real profit, would have been done under free enterprise. Government, at best, provided the infrastructure early.

Now, as to whether a government should put in superhighways, canals, dams and railroads to fulfill their duty to provide for the common defense, I think they SHOULD. But, that after being built and proving useful, they should be privatized, under contract to be maintained in condition to be useful.

It's all well and good to say "no one but the government can do this" - but goernment has proven time and again that they are the least capable entity TO do things RIGHT. I have never heard of a government contract actually coming in under budget.

Children got educated before the advent of public education. Community Schools were around long before mandatory schooling. All mandatory public education has done is free the vast majority of women from child raising, leading to the collapse of the family, many more households in poverty, the "two income, no savings" family and other problems from the workforce having too many people. It pays to be educated, parents want their children to be able to do the basics of literacy and arithmetic, and teaching and learning those things is not a troublesome thing. And I'll take it you agree with my analysis of the higher education situation.

[anton-p-nym.livejournal.com]

The free market is good at raising capital... but it's bad at dealing with the resulting failures. The example of the railroads in the US shows that cut throat free enterprise means a lot of failed businesses, wasted capital on unnecessary parallel lines, squandered resources on range wars and hostile takeovers, vast sums of graft and peculation. And there was a lot of misery coming out of those boom-and-bust cycles; misery concentrated on the lower-income earners as their uninsured savings vanished from stock collapses and resulting bulk mortgage defaults. (There's a reason that the villain in silent movies was often trying to foreclose on a mortgage...)

As to getting the government to build it and turn it over to private enterprise because government can't "do things RIGHT", I strongly doubt that public-private partnerships are any more efficient overall than government operated; the boondoggle of Brampton Civic Hospital, for instance, makes me leary.

And yes, children got educated before the advent of public education... back in the days when a 6th-grade graduation was deemed sufficient to enter into an apprenticeship, high-school graduation was a rarity, and university/college a privilege of the wealthy granted to a very, very few outside the usual social circles. I don't think that model scales well to a modern workplace that needs much higher literacy and more technical knowledge from its workers.

Some things just work better as monopolies than as multiple, small, private entities due to economies of scale. Rather than cede monopoly power to someone with no responsibilities to anyone outside a relatively small group of investors, I'd rather cede that power to an official responsible in some small part to me.

-- Steve once again wonders at the allergy some have to government that, despite their own doctrine, has put in place the foundations of their own prosperity.

[dubiousprospects.blogspot.com (from livejournal.com)]

Privatized roads need to make a profit.

Public roads don't. The percentage of the profit is money that doesn't need to be spent by the public maintainer. See the example of British Rail for an unmistakable case of "the government did a much better job of running that than the privatized owners did". It's entirely possible to run something well with a large public bureaucracy.

My experience of government differs from yours; I'm used to dealing with a government bureaucracy that's polite, efficient, and fast.

I don't have strong opinions about the state of higher education in the US; I think it's got too much emphasis on immediate commercial value in research in Canada, insufficient emphasis on mathematics generally, and that the late eighties/early nineties fit over the effectiveness of publicly funded post-secondary education as a class laundry needs to be corrected.

[derekl1963.livejournal.com]

"if you need more engineers, something has to be producing them, etc"

Except, there seems to be a sufficient supply of engineers to meet the current demand.

I know it's a popular conception that we need more engineers ... But nobody seems to able to come up with a reason that matches reality, let alone figure out who is going to hire them.

"Progressive taxation; if you allow wealth to concentrate, policies of avoiding change predominate, change for the better doesn't happen, and the economy stops innovating."

I.E. punish the 'wealthy' for the sin of being wealthy because... well... we don't really have a reason but we believe its a good idea anyhow.

"But, specifically, what they mean is that the budget has to do something spendy to address manufacturing getting gutted"

And they want it done without repealing any tax laws, any enviromental laws, any worker safety laws, etc... etc... One has a better chance of creating a perpetual motion machine.

[dubiousprospects.blogspot.com (from livejournal.com)]

Nothing to do with punishment; everything to do with pragmatism.

Wealthy oligarchies refuse social change -- they're on the top of the heap, they don't want to find out where they'd be in a different heap -- and fall, generally in a very messy way.

That's bad for absolutely everyone.

This is why the notion of the purpose of government being to secure the general welfare got created; it was obviously not actually working to have the purpose of government be to secure and extend existing wealth and power, much as those with current wealth and power might prefer that to be the case.

Wealth is not an indicator of virtue.

In terms of engineers, no, there aren't actually enough. (Note how drastically NorAm is falling behind in packet-network communications infrastructure generally. Note how tough it is to find people who can run a chip fab or high energy density battery plant, for that matter; do you think Dell, Sony, and Nokia want to ship exploding batteries?) Nor are there enough nurses, doctors, computational geneticists, cartographers, field biologists, etc. Nor are there enough machinists or millwrights. There's way more work that could be done than is getting done, and much of it is not getting done due to lack of the available skills.

The fundamental objection to the GI Bill, sixties meritocratic public funding of post-secondary education was that it functioned as an effective class laundry; that's a huge fraction of why (for instance) the Harris government in Ontario wanted so desperately to get rid of it. (With unfortunate success.) Not the sort of policy change that can be supported by quantitative analysis if the goal is to make everybody better off.

You really believe that the only way to make manufacturing competitive is to not have environmental safety laws -- emitting gaseous lead is just fine? -- and not expect workplaces to avoid maiming workers? I am not sure where to start with how wrong-headed that is, in simple profit and loss terms.

The major industrial problem is not productivity or value; it's that the US is the primary market, and the US economy has gone off a cliff. Not diversifying was a stupid mistake; it now needs to get fixed.

[orangemike.livejournal.com]

I won't pretend to be a fan of Iggy; but he can't make a bigger mess than Harper and the unRed Tories.

[james-nicoll.livejournal.com]

Don't say that! There's lots more room for failure, especially given Iggy's inability to admit when he is wrong.

[agoodwinsmith.livejournal.com]

Do I see a ticky box for "argh'?

[maruad.livejournal.com]

So he and Stephen Harper have yet another thing in common.

[dubiousprospects.blogspot.com (from livejournal.com)]

Best outcome is that coalition gets to take power and the liberal rank and file puts in someone else.

I'm afraid that's in winged-pigs territory, but it's much better than Iggy as prime minister because he's voted-in party leader rather than interim leader, because he takes the Liberal Party out of the realm of what someone of conscience can consider voting for.

Which means we need to start an effective political party to replace them, which is certain to be messy and expensive.

[maruad.livejournal.com]

I have no hope for the coalition with Iggy as Lib leader. Indeed I have no hope for the Liberals at this point. If only the federal NDP were like our provincial NDP, I would have no problem supporting them.