rfmckean

[rfmckean]

Treknomics

I have sort of wondered about treknomics. Why are we not living in a Star trek world? Isn't part of the puzzle have to do with the 'need' for stuff? What is a need for an object that isn't used? The fifth car is not a need except in the sense of its role in determining social status and the political power that is derived from social status. Smith stated that the views of the wealthy are given more credence even when these views maybe irrational. Needs are to an extent socially determined. Once you make enough for basics like food or shelter your needs become increasing subjective. Scandinavian countries are happier because they do not  have the same need for 'positional' possessions (?); these societies are less accepting that wealth equals credibility. Socialism undermines the political power of the wealthy that is derived from wealth. A fundamental bit of human sociology would have to change before treknomics can be successful and clearly we are not there yet.

[rfmckean]

McCain's vote

McCain played this very well to inflict maximum damage on the GOP. He was welcomed back after his medical treatment. He voted with the GOP as expected and received opprobrium from the left for the hypocrisy of someone with government health care who wants to deny those benefits to others. What could be a more perfect set up for a devastating coup de grace? Dem condemnation; GOP praise. The GOP health plan was killed a man who the GOP just spent an inordinate amount of effort praising for his courage and integrity! Perfect. He beat Trump at his own game.

[rfmckean]

Election Media coverage

A bit off topic but the coverage of recent elections gives some credence to complaints about journalism. Most of the coverage is about Wilders, Le Pen, and Hofer. These all lost. AfD is in trouble even with a million refugees now in Germany. The alt right is in trouble AND the traditional parties are also in decline.  No traditional party won in France. There is something interesting happening but it doesn't seem to be covered well by the MSM. Maybe not 'fake news' but there is an avoidance of addressing a fundamental disconnection between the voters and the politicians. The system of economic beliefs that is credible,  no longer works in the real world. Democracy has been able to handle this in the past so we should give us hope for the future.

[rfmckean]

Trump Trudeau Budget Punditry

In the discussion about the budget people are saying that we have to react to Trump. Trump's AHCA may or may not get passed. If it does, costs to American health consumers will rise. This may not be a 'tax' but it will have the same effect. Does the passage of the AHCA mean that others jurisdictions can also raises taxes to cover their health care expenses? This is a question that should be asked. If the Trump budget gets passed will it start a 'never ending series of deficits that will only lead to future higher taxes'. It seems to me that some panelists say 'Trump' and don't bother to apply the same logic to Canada. Health care tax increases may be bad but Trump is effectively proposes that in his AHCA. Deficits may lead to higher taxes but that is the upshot of what is being proposed by Trump. The US budget wasn't 'tax the rich' but rather 'tax the poor'. If Trudeau's budget is bad then Trump is worse; rage and anger of something can lead to the acceptance of vershlimmbesserung. Pundits will label Trudeau Liberal and trump as conservative. There is one thing that both have in common: deficits. Deficits can’t be good if Conservative and bad if Liberal. One has to go beyond the labels used by sophists to deal with reality. Sophistry is not reality unless you are a partisan. If deficits are in fact then both Trump and Trudeau budgets need more revenue.

Trump's immigration policies and tariff proposals will make paying for that US deficit more difficult. Benefits = taxes. Is CCB a benefit? Is financing infrastructure a benefit (NB not the Scarborough Subway!)? Do we need childcare? Is there a problem of wealth inequality? We can't have nice things unless we are prepared to pay for them.

#cdnpoli

[rfmckean]

Partisanship is a distraction

Since the US election we have been entertained by the GOP repealing and replacing Obamacare. This will happen. Soon. Details to follow. The obvious take away is that there is no replacement. The vehemence of their rhetoric surely is based on an understanding of the obvious failures of the ACA. GOP can now definitively respond to the ACA: ‘It’s a complicated problem’. Oh. Why is there a problem? The problem is that Obamacare is basically the GOP healthcare policy pre Obama. The GOP rejection of Obamacare isn’t based on some enlighten understanding of it’s faults but rather a partisan objection to anything from the other side. Obama chose to adopt the GOP policy. Afterall jhe needed GOP support. How could they object to that? The problem for the GOP is that they did but in effect they were attacking the best policy that they have been able to develop based on their dogma.

This impasse is not only a problem for the GOP. The Democrats also have a problem with their acceptance of neo liberalism. Bill Clinton announced the end of big government and ‘welfare as we know it’; Tony Blair announces that the market will provide the only viable solution to economic problems. Privatization, ‘free’ trade’, discouragement of labour rights these are the policies of the Democratic and Labour admins. The problem is that they have produced an unacceptable increase in inequality. Lefties are willing to acknowledge that there is a problem, but as with their partisan opponents they have no solution. The problem can only be solved by more government, taxes and regulation, that was undermined by recent left wing governments. Hillery Clinton tried to respond with happy talk but in the end failed to provide a credible alternative to her husband’s legacy. As noted above the bastion of progressive leadership, Barrack Obama, adopted the GOP healthcare policy.

The whole political debate has been a distraction. The protests by the left about Trump or by the right against Obama are in the end meaningless. This is a distraction; the reality is that neither group has on offer any policy that will deal with the distemper now afflicting the US. It isn’t Trump or Clinton that is the problem; it is the failure of the accepted economic doctrine that is embedded in policies of both the ‘left’ and the ‘right’.

[rfmckean]

Conservative Economic Policy

I thought I understood conservative economic thinking. Lower regulation and lower taxes would lead to a higher level of economic activity. The key to economic prosperity was productivity and this was a result of productive investments. Growth trickles down through increased demand for labour.

With the election of Trump I am confused. Trump’s policies include deregulation and managed trade. Tax reductions and increases in tariffs. Government infrastructure spending is greatly increased. These policies are not only contradictory but also go against the polices advocated by conservatives for the past 30 years.

Does this really make sense or is it magical thinking? What needs to be asked of conservatives is to provide a theoretical basis for these contradictions. Perhaps if they are confronted with these inconsistencies they will either provide a convincing argument or begin to understand how silly these policies really are. Either way we will benefit from their response.

[rfmckean]

Infrastructure

The problem with the Northern Gateway and Kinder Morgan Pipelines isn't pipeline safety but maritime safety. The recent increase in spending for the coast guard was a sign that the Libs understand what needs to be done to get approval. I feel sorry for politicians. The default seems to be populist ad hocery. There is no public support for a reasoned view of the issue. Its either nimbyism or "What's in it for me". Science = hoax and facts are just opinions. A lose lose: not only is this an impossible situation for politicians but also a lose for the public. What this political conundrum leads to is either wasteful spending or that necessary projects are delayed or never get done.

[rfmckean]

[rfmckean]

The Failure of economics?

I don't think that economics has failed but rather politics. The neo liberal solutions have worked to provide a boost to economic activity but those same programs have resulted in most of the income gains going to a very small group. What we need to recognize is that we can have too much of a good thing. At some point a valid argument becomes sophistry. Taxes are not evil and at some point become necessary. Government is not evil but is necessary. Monopolistic pricing is counter productive to economic health. I would be surprised if any professional economist would disagree. EU's Schulz: Citizens Have Lost Trust in Institutions http://bloom.bg/2cwj03I

[rfmckean]

Canadians have stopped saving

It used to be that Canadian were good savers. Advises say that household budgets are necessary and that one should figure out a way to pay yourself first. Good advice. But is the problem(s) just consumption madness? People who have only access to high interest debt, e.g. payday loans, get trapped by those high interest rates. This is a low interest rate environment! Is this a problem in the banking sector were lower income people are not getting access to credit? One person's debt is another person's asset. Lower income household's are transferring wealth to higher income households. The economy has benefited by an increase in GDP, national income, over the past 30 years. Free trade and other neo liberal policies have been good for economic growth but the benefits have not been evenly distributed. Median income levels have not kept pace with the overall increase in GDP. Taxes = benefits. The reduction in revenue (taxes) means there is pressure to under fund programs. Who benefits from public transit? Not people who have the option of using a car. For low income household there is no choice but to use public transit to get to work. Cuts to public services mostly affect lower income households. One of the neo liberal reforms was a switch to consumption taxes and the introduction of RSP of various types. This was designed to encourage savings. What it has actually done is to transfer the tax burden from higher income households on to lower income households.

[rfmckean]

Foreign house purchases

I is the curtailing purchases of houses by foreigners a good thing. Senior Fellows seems to think this will not work; they contend that where similar measures have been introduced, there has been no cooling of housing prices. It seems to me that London's (UK) is also in a housing bubble. One of the negatives (?) of Brexit is that this will curtail investment in houses by foreigners especially in London. Is the curtailment of foreign house investment a positive outcome of Brexit?  Is the curtailment of foreign purchases only effective when applied to Vancouver? (I think this is an example of Senior Fellow's sophistry. They use the curtailment of foreign purchases when they think it will add credence to their case for Free Trade, e g the EU. Given the level of observation by most members of the public it is not a worry for Senior Fellows to use a concept in one way on one issue, and in the complete opposite way on another.) I wonder whether you are in favour of curtailing purchases by foreigners. Senior Fellows seems to think this will not work; they contend that where similar measures have been introduced, there has been no cooling of housing prices. It seems to me that London's (UK) is also in a housing bubble. One of the negatives (?) of Brexit is that this will curtail investment in houses by foreigners especially in London. Is the curtailment of foreign house investment a positive outcome of Brexit?  Is the curtailment of foreign purchases only effective when applied to Vancouver? (I think this is an example of Senior Fellow's sophistry. They use the curtailment of foreign purchases when they think it will add credence to their case for Free Trade, e g the EU. Given the level of observation by most members of the public it is not a worry for Senior Fellows to use a concept in one way on one issue, and in the complete opposite way on another.)

[rfmckean]

CUPW Labour dsipute

One of the main issues is pensions. There are two ways public sector workers can respond: 1)  maintain the disparity between public and private sector workers' pensions or 2) work to see improvements in all pensions and not just for the public pensions. The last Ontario Provincial election indicated that public sector unions are opting for 1 and this CUPW strike is further confirmation. Let's remember CUPW fought a deal were retrenchment meant guaranteed income and benefits; job losses would only be due to attrition. That  option wasn't available to private sector downsizing e g steelworkers. Public sector workers shouldn't be trying to entrench a disparity in pensions; public unions should only have benefits if they are available to all workers. We can not have a system were former Nortel employees and steelworkers are forced to pay for a secure public sector workers' pension.

#cdnpoli

[rfmckean]

Brexit and the EU

There are several problems in euroland. There is a sovereign debt crisis (e.g Greece, Portugal, Italy and Spain). There is a bank solvency crisis; the most recent manifestation  is Italian banks. There is an unemployment crisis. There is a liberal democracy crisis as evidenced by Poland’s control of journalists. Brexit will not do anything to solve these problems. Brexit has become a politicians excuse to avoid accountability for the existing mess. It might make people feel good to complain about the idiotic racist Brits but that really is in effect avoiding the more complex real problems in euroland. Euroland response to its real problems is negative interest rates and cutting government spending. Not only is there a failure of economic policies but no one knows what should be done. This is the real idiocy. Junker is the idiot; not the Brexit voter. Where are the mass rallies calling for Junker’s resignation?

#brexit

[rfmckean]

Facebook

It seems to me that Facebook does not fit the model of a business under the classical model. FB encourages engagement by individuals. You now have the opportunity to respond to the Senior Fellows. FTW cat videos. It seems to me that these interactions are at the heart of what makes FB a very (unbelievably) profitable company. This goes beyond the discussion of whether or not it is a media company. It does not matter to FB whether or not all opinions are equally valid. Does that make it a media company or do media companies attempt to filter truth from lies? Isn't it up to us, the comment consumer market, to determines what is valid, i e liked, and what isn't. Does this market for ideas work as a lie filter? A comment is a commodity than can be monetized. Comments and interactions are the goods from which FB can make money.

#facebook

[rfmckean]

Japan

What Japan shows is that monetary policy can not work on its own.  Japan's failure is its inability to recognize this. But is Japan a failure? Unemployment is 3.4%. Inflation (this is evil right?)  is negative. The yen has appreciated. High debt does not lead to inflation, a currency collapse or high interest rates. Isn't this result unexpected given the economic model provided by the Senior Fellows. These inconvenient facts make the narrative provided by the Senior Fellows somewhat less credible ... but then we all know an inconvenient truth is a lie! (or is it?) Whatever labels you want to apply to Japan the one clear takeaway is that the scary outcomes expected by neo liberal model did not occur. For scary outcomes that actually occurred, see Kansas What would happen if we recognize the problem is unsustainable levels on income inequality, lack of sufficient revenues (taxes) for government to pay for things people need, and less corporate power. (Let's remember that the secret part of the TPP is about patents, trademarks, and copyright not tariff reduction!) The narratives provided by the Senior Fellows only work when we omit some facts. Ineffective solutions are credible if they don't challenge our a priori beliefs. We have a war between two world systems. We all know the geocentric system is credible until one discovers the Jovian system. Japan is the Jovian system for the neo liberal model. You may use labels such as heretic or evil but the truth will win out. Inconvenient truths are not lies; but they show that a priori beliefs must be changed.

#econ

[rfmckean]

Canadian Economy Update

A rise in interest rates and a current household debt levels not only make Canadians feel poorer but make Canadians actually poorer. The US 2% inflation rate target has been reached. The levels of household debt will be a problem given any increase in domestic rates. Despite the assurances from the late Jim Flarherty, there is a housing bubble in Canada. The problem isn't the affordability of houses; the inability to buy a $1 mil. home isn't a problem. Supporting the housing market will only make things worse. There is a problem of homelessness. Subsidizing houses to lower income people, although it maybe a reasonable response, is commie. We can't do reasonable if it is commie right? We all know that political discussion is just about applying the right label. (Anyway helping the homeless will not make it easier to buy $1 mil. homes so how could it be a positive response?) (Somewhat) Higher oil prices will strengthen the Canadian dollar while not encouraging new oil investment. Central Canada needs a 65 cent loonie (?) and the oil patch needs $75 dollar oil (?). The good news is this is a more realistic economy and neither sector will over build (?). If households start saving then governments have to spend (more). The private sector will not provide growth. The Feds are prepared to send. It will be interesting to see if they can spend wisely. The best hope is that governments spend wisely; but given recent examples, e g Rob Ford's Scarborough Subway, this isn't likely. Can it be true that infrastructure projects will be just as stupid and idiotic under JT as they were with Flarherty and Ford? Let's remember that the Kansas solution, do nothing (or less of whatever), won't work. Can we figure a something that will work?

#cdnecon

[rfmckean]

Panama

Isn't this another aspect to the 'free' trade system. Globalization means that capital flows are not monitored and can not be regulated. You might hate the ref, but can a hockey game really be fair without rules and officials to enforce them? De facto there are no rules or officials in the global system. (Slightly off topic but the British steel industry is being devastated by dumping by China steel exports. Canada's Algoma mill is also under threat. There is a 'penalty box' for countries who offend but Britain is reluctant to use it.) Free trade is sold as a comprehensive agreement were non compliance is punished. However the fact is that capital is protected but labour and taxpayers aren't.