Grantcoulson's Blog

    Do not think about, write about or deal with  human behavior without determining the effects of incentives.

    Osama Bin Laden, according to a report, urged his children to live in peace and not follow the path of jihad. This is like murder-suicide–the sequence is flawed–first the suicide–then the murder doesn’t happen. He should have followed the path of peace first himself–then jihad would have been unnecessary.

    The following is a discussion no rational being should ever engage in. If your basic assumptions are wrong, whatever flows from them will be wrong.

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EU open to negotiations but won’t scrap airline carbon emissions tax, officials say

The Canadian Press By Alex Kennedy

    Airbus Chief Executive Tom Enders speaks during a panel discussion on "Driving Change, Overcoming Challenges" during the Singapore Airshow Aviation Leadership Summit at the Raffles City Convention Centre, Monday, Feb. 13, 2012. Enders said Monday he’s concerned that new European Union carbon emission charges for airlines could spark a trade war between Europe and the rest of the world.

<insert>

    One would think that EU has more to do than worry about carbon taxes.

SINGAPORE – Europe is willing to discuss its new carbon emissions tax for airlines with disgruntled governments but has no plans to scrap the levy, top EU officials said Monday.

Airlines and governments have complained the tax is too costly and was implemented without consultation. Industry leaders are warning the disagreement could spark a trade war between Europe and the rest of the world.

"We’re ready to negotiate within our framework," Siim Kallas, European Commission vice-president and transport commissioner, said at an aviation conference in Singapore. "We aren’t trying to dominate the world."

The EU imposed the tax, known as the emissions trading scheme, on Jan. 1 in a bid to curb climate-changing gases but money will not be collected until next year.

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    Since climate isn’t changing, there are no climate-changing gases. When these people get a notion, data do not change it.

Under the system, airlines flying to or from Europe must obtain certificates for carbon dioxide emissions. They will get free credits to cover most flights this year but must buy or trade for credits to cover the rest.

"I’m very worried," said Tom Enders, chief executive of Airbus, the world’s largest commercial airplane maker. "What started out as a solution for the environment has become a source of potential trade conflict."

EU officials cite a doubling of aviation carbon emissions in Europe between 1990 and 2006 and the inability of governments to forge a global deal on reducing emissions as reasons that prompted them to act.

"ETS will be implemented," said Matthew Baldwin, director of aviation and international transport affairs for the European Commission. "We recognize just how strong the opposition is. If there’s a global deal, we can amend ETS."

Baldwin said the earliest scheduled review of the scheme would be in 2014.

Last week, China barred its carriers from paying the charges or other fees without government permission, and Russia, India and the U.S. have also voiced opposition.

Asian carriers say the carbon tax unfairly penalizes them and favours Middle East rivals because the charge is based on the distance of the flight.

"There’s a difference between leadership and bludgeoning, you guys tried the latter and are now discovering it works both ways," said John Slosar, CEO of Hong Kong-based Cathay Pacific Airways.

"It’s not surprising you’re getting this push-back," Slosar said, addressing Baldwin. "Your scheme was ill-founded and you went ahead with it anyway."

Malaysian long-haul budget carrier AirAsia X said last month it plans to eliminate flights to Europe, in part because the carbon tax would increase costs and make flights less profitable.

"The longer you fly direct, the more you’re penalized," AirAsia X Chief Executive Azran Osman-Rani said. "There was hope that the EU would back down but they didn’t. Now they have to deal with China, good luck with that."

Environmentalists welcomed the European program, one of the most far-reaching measures adopted by any government to regulate greenhouse gas emissions. Although only 3 per cent of total human-caused carbon emissions come from aircraft, aviation is the fastest-growing source of carbon pollution.

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     Well, if environmentalists insist, that’s the end of the debate. They’re right about everything and not hysterical at all.

"If there’s no alternative to ETS, we think this is an appropriate action for Europe to be taking," said Tim Johnson, director of the International Coalition for Sustainable Aviation.

The International Air Transport Association, which represents 240 airlines, is urging the EU to negotiate new carbon emissions guidelines through the 191-country International Civil Aviation Organization.

"Non-European governments see this extraterritorial tax collection as an attack on their sovereignty," IATA CEO Tony Tyler said Monday. "Aviation can ill afford to be caught in an escalating political or trade conflict."

Tyler reiterated IATA’s forecast that airline profits will likely fall to $3.5 billion this year from $6.9 billion last year as a slowing global economy and high fuel costs pinch earnings.

<end>

   This is face-saving in the face, little joke, of contradictory evidence. This will all fade to nothing and be remembered in the category of, “What in hell were they thinking?”

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

    Do not think about, write about or deal with  human behavior without determining the effects of incentives.

    If you give a man a fish, you’ll feed him for a day. If you teach a man to fish, he’ll be really angry because he doesn’t get any more free fish.

    Greek government unions are getting angry at the writing on the wall. Watch for this reaction coming to the theater of the absurd near you.

A Job Too Good to Be True

    Ed Feulner

Feb 10, 2012

Imagine a job where you earn an above-average salary. Enjoy plenty of paid leave and enviable health benefits. Get to retire at age 56 with a generous pension. Sound good?

For far too many Americans, the “imagine a job” part is taxing enough. Add the other features, and it sounds like a fantasy.

But it isn’t. There’s a large group of workers for whom the description above is real: federal workers. And as a new report from the Congressional Budget Office shows, they’re making significantly more than their private-sector counterparts.

The CBO examined workers with otherwise similar characteristics and found that “for workers at all education levels, the cost of total compensation averaged about $52 per hour worked for federal employees, compared with about $45 per hour worked for employees in the private sector.” That’s a tidy little raise, especially in a struggling economy.

The real key is benefits. If you look at straight salary, the CBO says federal workers do only slightly better than their private-sector counterparts. But federal workers enjoy gold-plated benefits worth 48 percent more than what they would receive outside of government. They also get nearly automatic seniority-based pay raises.

Sounds like the phrase “good enough for government work” doesn’t apply to compensation. Then it’s more like “never good enough,” apparently.

Even better (or worse, if you’re taxpayers footing the bill), federal workers enjoy a remarkable level of job security. “Since the recession began, federal employment (not including the Postal Service) has risen by 230,000, or 12 percent,” writes Heritage Foundation Senior Policy Analyst James Sherk. “Federal employees are almost never fired for poor performance.” Many Americans in the private sector only wish they could say the same.

<insert>

    One sometimes hears that government workers can be fired, “same as anyone else.” This is fine except they are fired so rarely that, when they are, it’s noteworthy.

It’s not just pay at the federal level that’s at issue. The issue has become heated where state employees are concerned as well. Legislatures and governors in capitals around the country are faced with growing deficits and a rising tide of red ink. So over the last few years, they’ve attempted to curb the growth of government pay.

Of course, this means opposing unions that fight tooth and nail to keep their inflated salaries moving in only one direction: up. This has proved to be quite a headache for governors such as Wisconsin’s Scott Walker. He’s been treated like Public Enemy No. 1 for trying to take even modest steps to address the pay issue and bring the state’s books into balance.

<insert>

    Public Union Enemy No. 1.

There has been a much weaker effort at the federal level. Lawmakers did agree to suspend cost-of-living pay increases (but not raises for merit or promotions) for civilian workers in 2011 and this year. A proposal to extend this freeze through 2013, sponsored by Rep. Sean Duffy (R-Wisc.), recently passed the House of Representatives.

“While private-sector workers face the squeeze and millions of families continue searching for work, the idea of asking that their hard-earned dollars go to fund a pay raise for government employees is just not right,” Duffy said.

He’s right. Yet the White House opposes even this small effort to restore a tiny bit of balance to a pay system that’s obviously out of whack. Why?

That’s not to say that all federal employees make more than their private-sector counterparts. In fact, some of the most skilled federal workers may actually be underpaid. Overall, though, there’s no denying the obvious: Compensation for government workers is too high — and it’s completely unmoored from any kind of market-based reality.

It’s high time Congress ignored the tin-eared cries of those who would defend this indefensible status quo — and brought federal compensation into line with market rates. That’s what the average American has to face. Why not federal workers?

<end>

    As deficits become unsustainable, all will unfold and the squeals will be loud and delightful to hear.

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

    
     Do not think about, write about or deal with  human behavior without determining the effects of incentives.

Thanks to marginalrevolution.com for the story.

The Xiaogang village story

In 1978, 18 farmers in Xiaogang village, in east Anhui Province, signed a secret agreement to divide communally owned farmland into individual pieces called household contracts, thus inadvertently lighting the torch for China’s rural revolution. Today they are considering pooling their farmland again to create an even more efficient economy.

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   When you pool resources, you pool widely varying levels of work and expertise. The hardworking, resourceful and knowledgeable will be punished and those with opposite attributes will be rewarded, at least for a while. When the collective has been in operation for some time, the slothful remain slothful and the hardworking realize that hard work is not rewarded.

Yan Junchang, one of the 18 farmers, is now 67 years old. He was the leader of the production team in Xiaogang Village and currently he is the honorary director of the Memorial Hall of the All-round Contract System.

Before 1978, Xiaogang was infamous for its poverty. Almost all the local families had to roam the countryside begging after the autumn harvest. The village population was only 120 before 1958 and 67 villagers died of hunger during the Great Leap Forward from 1958-60. In Fengyang County, where Xiaogang is located, one in four people perished – 90,000 in all. "But no civil servant suffered from hunger in our region," Yan said.

<insert>

    No civil servant suffered. I’m shocked, shocked.

"Villagers tended collective fields in exchange for ‘work points’ that could be redeemed for food. But we had no strength and enthusiasm to work in collective fields due to hunger. We even didn’t have time because we were always being organized by governmental work teams who taught us politics," Yan recalled. "It was then that I began to consider contracting land into individual households."

"I was selected as the deputy leader and later as the leader of our production team in 1962. The grain output in our village was 15,000 kilograms per year before launching the household contract system. Food was not adequate to feed everyone. Families boiled tree leaves, bark and any edible wild plants; we ate whatever we could find. After consulting with some other villagers, I made up my mind to contract land to individual households no matter what penalty would be imposed on me. We didn’t want to starve anymore," Yan said.

In 1978, 18 villagers at Xiaogang risked their lives to sign a secret agreement that divided the then People’s Commune-owned farmland into pieces for each family to cultivate. They promised that each household would deliver a full quota of grain to the state and to the commune, and keep whatever remained.

However, their secret was disclosed the following spring. Some people accused Xiaogang’s villagers of "digging up the cornerstone of socialism." Luckily, Fengyang Prefecture’s Party Secretary, Wang Yuzhao, was open-minded. Yan had an audience with Wang, who had heard of Xiaogang’s efforts and had been told that its harvests looked favorable. He promised to protect the village as long as their practice didn’t spread. Later, Yan’s action received strong support from the then Party chief of Anhui Province, Wan Li, during a period of time when no official endorsement was given by the central government.

"Comrade Wang asked if I was a CPC member when visiting our village. I said no," Yan recalled, "He then praised my courage and agreed to allow us to practice the contract system for 3 years."

Grain output increased to 90,000 kilograms in 1979, over six times as much as the previous year. The per capita income of Xiaogang climbed to 400 yuan from 22 yuan.

<insert>

    Society did suffer; however, as the tree bark and grub recipes were probably lost to history.

With the rural reform policies that followed, Xiaogang villagers began to enjoy a much better life. Allocating farmland to each household fired local enthusiasm for agriculture production. All farmland, some abandoned for years, was cultivated, and the years of starvation gradually ended. "I have five children. My family used to live a poverty-stricken life in old tumble down thatched cottage with doors made of straw. In 1993, we moved into a brick house. We had money to purchase farm machines, watches and a TV set," said Yan.

Despite the great improvement in their standard of living, the residents of Xiaogang are still far from wealthy. "I spent all my family’s income to pay various taxes years after we contracted some 3 hectares of farmland. Then, from 1990, young people started heading to cities in order to work as migrant workers," Yan said.

Unfortunately Xiaogang didn’t capitalize on its first-mover advantage. The area never developed the factories that could offer higher-paying jobs, and transportation remains poor.

But Xiaogang began to show new vigor when a group of new village leaders such as Yan Deyou came to the forefront. In 1997, Yan Deyou, the Xiaogang Village Party branch secretary, visited Changjiang Village in Zhangjiagang City, Jiangsu Province and gained useful experience. A road was completed in Xiaogang with financial support from Changjiang. With more help from Changjiang, Xiaogang residents began to grow grapes and develop other industries.

"We were the first to implement the family contract responsibility system, but later we missed out on other opportunities for further development. Now agricultural taxes are canceled, and farmers receive 30 yuan per mu (15 mu = 1 hectare) in subsidies from the government. We really appreciate that. But individual farming is no longer generating prosperity. We need to combine forces to create a more efficient economy," Yan stated.

<end>

    Voluntary cooperation is better than coerced. I’m curious to see what happens. The Israeli kibbutzim, examples of voluntary collectivism, are declining in number and changing in composition.

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

   Do not think about, write about or deal with  human behavior without determining the effects of incentives.

     Apparently the brutal cold embracing Europe is due to, wait for it, the melting Arctic ice cap caused, of course, by Global Warming. A theory that explains everything explains nothing.

    The liberal chattering class in the U.S. is exercised about tax loopholes for the rich. No society moves forward by concentrating on getting the tax collector more money.

Teachers Unions Staring Into Financial Abyss, Channeling Saul Alinsky

Kyle Olson

Feb 08, 2012

Fresh on the heels of an exclusive report detailing a 7-day Caribbean cruise that National Education Association staffers are currently enjoying, Education Action Group has learned that dozens of teachers unions around the country are running out of money.

According to reports published by the National Staff Organization – a group made up of NEA and state affiliate union staffers:

    “Fifteen states are considered to be financially distressed because of membership loss and their very survival is in jeopardy. And because of financial hardship, 41 state executives are on NEA’s payroll instead of being paid by their state. Two states—Indiana and South Carolina—remain under an NEA trusteeship.”

NSO President Chuck Agerstrand called it a lesson in “trickle-down economics.”

Or maybe it’s just “trickle-down karma.” It’s ironic that the very same financial problems unions have created for government schools – through collectively bargained contracts that give annual, automatic pay raises and world class benefits – are now appearing in their own organizations.

The teacher unions’ laser-like focus on left wing politics means that state legislatures – many of which are currently controlled by Tea Party Republicans – have no incentive to help rescue them.

The unions’ chickens have come home to roost, as the saying goes.

What’s the solution? Creating a “culture of organizing,” according to the NSO, which wants to boost the number of dues payers and thus soothe the financial problems. So prior to the 7-day Caribbean cruise, staffers participated in a three-day retreat to learn how to better organize.

<insert>

    The same panic attack is dominating the United Auto Workers as they try to organize the Japanese and Korean auto plants in the U.S.. After accomplishing this, they’re going to grab a broom and sweep back the tide.

The staffers studied organizing theory charts and read quotes from Saul Alinsky. The National Education Association is now teaching an organizing method the Service Employees International Union has been using as well: “Constant Organizing Goals.”

In a 2010 PowerPoint document, SEIU described the COG method this way:

    “[It] requires unions to build public relationships involving a quid pro quo interchange driven by self-interest and guaranteed by mutual accountability.”

This underscores the notion that the union’s strategy is to meet its needs first and not seek what is in the best interest of students or taxpayers.

The NEA’s bargaining strategy method has these four steps:

1. Educate

2. Agitate

3. Escalate

4. Evaluate

The further into the process, the theory goes, the more power is built. But the power, of course, is for high salaries, better benefits, and fewer responsibilities. That’s great for the adults, but doesn’t do much for the students.

But after all – it’s not about the students. Somebody has to bail water out of the sinking union boat and it’s not going to be students. Teachers, grab a bucket.

<end>

    This is not a good time, nor will there be one again, to get the public interested in the welfare of the pampered pets of government. That ship has sailed, disappeared over the horizon, and sunk.

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

     Do not think about, write about or deal with  human behavior without determining the effects of incentives.

    One of my autistic students was attending a school which “was deeply committed to realizing the potential of its students”. We had gotten him to read at about the Grade Two level at the time while they were getting him to recite, “A is for apple, B is for…, etc.”. I asked him what F was for, he said, “Fish”. For some reason I asked him what M was for. With timing which would have done Jack Benny proud, he said, “More fish”. I was reminded of this when I was looking at the mandates of various local autistic teaching centers and concluded, as did Sam Spade in “The Maltese Falcon”, the cheaper the crook, the gaudier the patter.

Oxford dons ready to revolt on new Iron Lady honour
Posted by EducationViews.org on February 5, 2012 

Plans to name a new building at Oxford University after Baroness Thatcher has divided academics at the institution.

She is one of Oxford’s most illustrious alumnae, with a worldwide reputation.

But Baroness Thatcher was snubbed by her old university when it declined to award her an honorary degree during her time as prime minister.

Now, one of the university’s biggest donors hopes to lay the dispute to rest by naming a major new building after her.

Wafic Saïd, the Syrian-born billionaire, has donated £15 million towards a new facility at Oxford’s Saïd Business School, which is due to open in the autumn, and has indicated that he wants to name it after Baroness Thatcher, who he described as a “lioness”.

Yet in an echo of the 1980s, the proposal has divided the university and threatens to escalate into a major row.

On one side, Oxford academics across the political spectrum, from Prof Niall Ferguson, the television historian, to Baroness Kennedy, the Labour peer, have backed the plans for “The Thatcher Building” as a fitting tribute to the former premier.

Opposing the move are left-wing academics who intend to force a vote of all 3,000 dons in a bid to halt it, as happened in 1985 in the row over the honorary degree. One said it was “inconceivable” that the naming could go ahead.

<insert>

     These folks are representative of the same bunch that voted Clement Atlee “The Most Outstanding British Prime Minister of the Twentieth Century”. That Clement Atlee who kept rationing in Britain long after World War 2 was over. The Prime Minister who presided over the nationalization of important parts of British industry and changed the British workers defining image from the plow to the hammock.

Dr Alice Prochaska, the principal of Somerville College where Baroness Thatcher studied chemistry, said she was a respected and cherished alumna.

Dr Prochaska said: “Certainly people here would be very pleased to see a new building named after her.

“I have no doubt at all that she herself found the vote opposing her honorary degree extremely hurtful, and it is a pity that the award was proposed at a time when there were serious cuts to the education budget.

“It was in that context that it should be seen.

“But the years have passed and Margaret Thatcher’s stature as a world stateswoman is unquestioned, and we are terribly proud that we educated this country’s first woman prime minister and such a commanding figure.”

Baroness Kennedy, who became principal of Mansfield College, Oxford, in September, said: “I’m a new girl but I remember the business about the honorary degree.

“It was at a time when there had been a whole lot of cuts to education and it was a way of making a point.

<insert>

    If you stop giving us free money, we’ll fix you.

“But we are now looking at somebody who is nearing the end of her life and there is no doubt, whether people approve or disapprove of her, she has had an incredible impact.”

Prof Ferguson, who is a senior research Fellow at Jesus College, Oxford, and holds a professorship at Harvard, said: “I think it is a splendid idea.

“Wafic Said is giving Oxford University a chance to expunge the memory of its earlier insulting decision not to award Margaret Thatcher an honorary degree.

“As Britain’s greatest post-war prime minister, she is long overdue an honour from her alma mater.

“Naming the business school after her seems fitting, as no one did more than she to rescue the UK economy from the quagmire of stagflation.”

The naming proposal is due to go before a series of administrative committees and subcommittees made up of academics and officials.

However, opponents are threatening to take the matter to Congregation, the university’s ultimate authority and the body which turned down Baroness Thatcher’s honorary degree, making her the first Oxford-educated prime minister since the Second World War to be refused such recognition.

Just 20 signatures from objecting dons could trigger a Congregation ballot, in which 3,000 academics would be eligible to vote.

In a sign of its political balance, Congregation passed a vote of no confidence last May in David Willetts, the Conservative universities minister, over his higher education reforms.

Bernard Sufrin, an Emeritus Fellow at Worcester College who lectures in computer science, said signatories would be “lining up” to force a vote.

“I hope that those responsible for naming the building will take advice from those – now retired – leading members of the University who oversaw the embarrassing fiasco of an honorary degree for Mrs Thatcher being proposed only to be rejected by a large majority of the Congregation,” he said.

“It is inconceivable that Congregation would accede to such a naming.”

Prof Howard Hotson, a historian and Fellow of St Anne’s College, said: “Colleagues here see the current radical reforms of higher education as simply pushing through to its logical conclusion the reforms initiated under Margaret Thatcher.

“The naming of a building would seem to offer Margaret Thatcher a larger marker of esteem than an honorary degree, and it would seem to be giving the blessing of the university on her particular approach to business and economics.”

Prof Robert Gildea, a professor of modern history and Fellow of Worcester College, said: “I voted against giving an honorary degree to Mrs Thatcher in 1985 and my views have not changed since then.”

Mr Saïd, 72, is a friend of Baroness Thatcher and has close ties to the Saudi Royal Family.

In the 1980s the businessman helped to broker the Al-Yamamah arms deal between Britain and Saudi Arabia, the UK’s biggest-ever export agreement.

His £23 million gift in 1996 to establish the business school at Oxford was controversial and its opening in 2001 was marred by student protests.

Mr Saïd’s £15 million donation to help pay for the new building, designed by leading architects Dixon and Jones, gives him a “principal naming opportunity” under university rules which say benefactors who provide at least 51 per cent of capital funding can have a say.

In an interview in the Spectator magazine he indicated he wanted to name it after Baroness Thatcher.

Dr Prochaska pointed out that Somerville already has the Margaret Thatcher Conference Centre, which was named by college rather than university authorities.

An Oxford spokeswoman said: “Lead donors are usually able to name buildings and Mr Saïd has a clear right in this respect. For the time being, no final decision has been taken as to whether the building should be named.”

In a statement, the Saïd Foundation, in London, said: “For now, Mr Saïd has nothing to add on the matter of the naming of the extension beyond the Spectator article and the statements of Oxford University.”

<end>

       Leftists–they can only exist with coerced money from productive people.

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

   Do not think about, write about or deal with  human behavior without determining the effects of incentives.

  Could Indiana’s Right to Work Law Mean Trouble For Neighboring States?

    Vincent Vernuccio

Feb 04, 2012

Michigan, Ohio, and Illinois soon may need to construct a wall—not to keep people out but to keep business in. While such a drastic move is unlikely, they will need to do something because they are at a severe regional economic disadvantage now that Indiana has passed a right to work law.

Wise policy decisions by Governor Mitch Daniels and the Indiana Legislature have given that Hoosier state the highest recovery in gross domestic product in the Great Lakes region. Now with the passage of right to work, 333,000 Hoosier workers represented by unions (12.4 percent of the Indiana workforce) will have right to say no to union bosses and still keep their job.

Indiana is poised to surge ahead of its forced unionism neighbors. With a similarly skilled workforce, geography, and manufacturing background, Indiana can offer businesses from around the world the same benefits as other states in the region without the drawbacks of having workers forced into a union against their will.

According to Heritage Foundation analyst James Sherk, “Right-to-work states are much more attractive for businesses investment. Unionized firms earn lower profits, invest less, and create fewer jobs than comparable nonunion firms.” Sherk adds that studies “of neighboring counties on state borders with and without right-to-work laws …. manufacturing jobs in counties in right-to-work states is one-third higher than in adjacent counties in non–right-to-work states. Right-to-work laws attract jobs.”

<insert>

    This follows from the fact that less coercion is always better.

As Rob DeRocker, an economic development consultant told The Christian Science Monitor, some companies consider right to work essential because, “[T]he lack of a right-to-work law suggests that the mentality at the government level is that it’s not a business-friendly state”.

Overall statics back up Sherk’s and DeRocker’s assessments. Arthur B. Laffer and Stephen Moore noted in The Wall Street Journal last year that, “Over the past decade (2000-09) the right-to-work states grew faster in nearly every respect than their union-shop counterparts: 54.6% versus 41.1% in gross state product, 53.3% versus 40.6% in personal income, 11.9% versus 6.1% in population, and 4.1% versus -0.6% in payrolls.”

Indiana learned the hard way about how union monopolies can kill jobs. In 2010, United Auto Workers (UAW) members refused a generous deal and forced an Indianapolis metal stamping plant to close. The union rejected an offer by a buyer for the General Motors plant (which was in liquidation due to the company’s bankruptcy.) The buyer agreed to keep the plant open if the union agreed to industry average wages, with a $35,000 bonus for taking a pay cut, or a transfer to another GM plant keeping their higher than average salary.

The union refused and 650 local jobs were eliminated, along with potentially thousands more. The closure cost the state and local county $1.8 million in property taxes and $40 million in payroll taxes from the plant. Adding insult to injury, the union members who voted to close the plant became eligible for the taxpayer-funded federal Trade Adjustment Assistance Program in 2011.

<insert>

    We are not working at great jobs and we got some suckers to pay us for losing our jobs.

This could be why Volkswagen wouldn’t return Governor Daniels’s calls when the state didn’t have a right to work law. Daniels says this helped make him realize his state needed to change. As he told Forbes, “[W]e’re clearly the fastest growing automotive state, and we couldn’t even get [Volkswagen] to talk to us.”

Besides being better for business, right to work is also better for workers. Workers in right to work states have more disposable income than those in forced unionism states, according to the National Institute for Labor Relation Research’s analysis of government data. They are also less likely to lose their health insurance. During the last decade, the percentage of workers with health insurance fell by almost three times the amount in forced unionism states compared to right to work states.

It is not just economics; public opinion overwhelmingly supports right to work. A January Rasmussen poll showed only 15 percent of likely U.S. voters believe that workers should be forced by law to pay union dues if their company is unionized. Nearly two-thirds of those surveyed disagreed.

So what are the other Great Lakes states to do? They can either try to appease Big Labor by pretending that the status quo is working. Or they can follow the example of Governor Daniels and the courageous Hoosier legislators who helped make right to work possible—House Speaker Brian Bosma, Senate President David Long, and bill sponsors Rep. Jerry Torr and Sen. Carlin Yoder. If political leaders in these forced unionism states do nothing they will continue to see their populations and economies lose to states with more freedom and opportunity, such as Indiana.

<end>

    The more regulations, the less money is available for real enterprise.

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

    Do not think about, write about or deal with  human behavior without determining the effects of incentives.

Capitalism and Western Civilization – The Founding

February 02, 2012 By William H. Young

Fortunately for our heritage, Adam Smith published The Wealth of Nations in 1776 and destroyed the theoretical underpinnings of British mercantilism, which the American Revolution was fought to overcome. Our Founders adopted Smith’s ideas while creating a unique economic system for a new nation.

Sir James Steuart, a contemporary of Smith, actually wrote the first systematic treatise on economics in English, Inquiry into the Principles of Political Economy (1767). Steuart was an exponent of mercantilism (or corporatism), the existing system of Great Britain and France. He accorded government a key role in the economic development of society, particularly in the perfectibility of man and employment. He advocated export subsidies, price supports for agriculture, and government job-creation programs. The Encyclopedia Britannica adds:
He understood that all such programs would require higher taxes but felt this to be a fair trade-off, given his assumption that tax revenues would come mainly from the wealthy. He believed that these programs would benefit politicians by keeping their “subjects in awe.”
Ironically, our current economic debate could be seen as noted economist and occasional baseball player Yogi Berra would put it, déjà vu all over again.

<end>

    As Edna St. Vincent Millay said, “Life is not one thing after another, it’s the same thing over and over.” You don’t create wealth by arguing over whom is paying his fair share of taxes. That elevates the sustenance of the state as the prime job of a society.

Steuart’s treatise was Smith’s chief target for refutation. In Book 4 of Wealth of Nations, he indicted the failures of mercantilism and control of the economy by the state, politicians, and monopolies (crony capitalism, as we would say). He also disagreed with the theories of the French Physiocrats—which Tocqueville would call “democratic despotism”—except for their concept of laissez faire, or free trade. Smith believed that free markets could better the world, and that progress required “little else…but peace, easy taxes, and a tolerable administration of justice.” He wanted “the establishment of a government which afforded to industry the only encouragement which it requires, some tolerable security that it shall enjoy the fruits of its own labor.”
Smith’s notion of the general interest was simply the sum of the interests of all the members of the society, including the working classes. This was perhaps the most novel aspect of Wealth of Nations. The title referred not to the nation as the mercantilist understood it—the nation-state whose wealth was the measure of its strength vis-à-vis other states—but to the people comprising the nation. It was their interests, their wealth that would be promoted by a political economy that would bring about a “universal opulence which extends itself to the lowest ranks of the people.”
Almost all of the Founders read and praised Smith’s Wealth of Nations, and absorbed the thrust of his concepts. Hamilton worked arguments derived from it into his public papers. Madison quoted from it unconsciously, without attribution, in his speeches.

We have seen that man’s universal instincts include a deep-seated capacity for envy. Man has a need for recognition or esteem from others. Human nature was forged in competition; the drive for human dominance is universal. Human nature countenances hierarchy; humans form hierarchies of dominance. The Founders took account of those innate features of human nature and sought to transcend the history of failures of past Western republics due to envy, class warfare, and economic conflict over scarcity among factions.

In a historic first, America was founded from the beginning as a commercial republic—with few rewards provided by government—to provide for private pursuit by individuals of self-interest and prosperity through a market system utilizing private property and entrepreneurial initiative. Past republics had viewed man’s insatiable appetite for material comforts and commerce as a sign of decadence and impending social instability. Our Founders saw that man’s appetites could be satisfied in a commercial economy in which economic progress, based on freedom, could lift the burdens of life from the shoulders of the common man. They realized that the pursuit of material well-being through individual work and performance based on reciprocity in the private sector contributes to the welfare of society—both in the sense of creating personal fulfillment and wealth and the social unity engendered by commerce. Stability was achieved because individuals pursued their economic self-interest rather than warring over frivolous religious and political disputes.
The Founders turned to private property and multiple productive hierarchies within the private sector as the primary way for citizens to fulfill their different and unequal faculties of human nature, satisfy their inherent human ambitions for dominance and hierarchical status, and achieve recognition and esteem from others. They uniquely recognized that “different and unequal faculties” are part of human nature. James Madison expresses this in The Federalist, Number 10, when he argues:

The diversity of the faculties of men, from which the rights of property originate, is not less an insuperable obstacle to a uniformity of interests. The protection of these faculties is the first object of government. From the protection of different and unequal faculties of acquiring property, the possession of different degrees and kinds of property immediately results
“Madison has in mind such ‘faculties’ as ambition, intelligence, experience, energy, and strength,” explains Thomas West in Vindicating the Founders (1997):

These lead people into different jobs and professions (leading to different ‘kinds of property’), and the same differences lead to different levels of income (different ‘degrees’ of property)….The right to acquire property was understood by the Founders, and by Americans long afterward, as a protection to rich and poor alike. It was a means by which the poor could ascend from poverty to wealth and not, as is so often asserted today, a device to keep them down.

To Madison, government had been instituted not to protect any particular property, but to protect the human faculties of acquiring it now and in the future.

Alexander Hamilton sought to establish a government system that would both channel the individual pursuit of self-interest into developing the American economy and protect that economy from the follies that untrammeled self-interest always leads to. One of the greatest problems facing the American economy was the lack of liquid capital available for investment. Hamilton wanted to use the national debt to create a larger and more flexible money supply. Government bonds held by banks could serve as collateral for bank loans, multiplying the available capital. By 1794, the United States had the highest credit rating in Europe, one more lesson our postmodern politicians could learn from the founding.
“The most forceful architect of the political economy expressed in the Constitution was Hamilton, a Lockean who also viewed his teaching as tempered by an older notion of moral order,” explain Robert N. Bellah and the other authors of The Good Society (1991):

    For Hamilton, progress was a highly charged moral idea. But progress had to be institutionalized, to be given public standing and recognition in order to be an effective force in human affairs. For Hamilton, progress was a spirit human society had to learn…The institutions of Hamilton’s model of political economy—from the money supply and national bank to publicly chartered organizations for the promotion of enterprise to the laws of contract and obligation—were pedagogical devices. Their aim was the moral transformation and improvement of human beings.

Hamilton conceived political economy as making possible a spiral of human progress, not just in commerce and technique but in morals as well, through popular opinion and associations.
For more than two centuries, America has had the world’s foremost record of economic growth through entrepreneurial capitalism and its own Industrial Revolution, producing a much improved standard of living for all of its people. The story of the founding of our commercial republic and the economic system that produced that record should be included in college liberal education. Tragically, most students today encounter our founding, if they do at all, exclusively through the lens of multiculturalist critics.

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      Individual Striving does not need to be unleashed, it needs to be unhampered.

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies

   Do not think about, write about or deal with  human behavior without determining the effects of incentives.

     Europe is suffering from one of its coldest winters. the lines are burning up to make trades in the carbon trading exchanges–oh wait, they’re aren’t any of those anymore. Not quite true–the price has gone from .62 to .08 in whatever bizarre units these things trade for. The volume for some days is zero. Trading carbon credits is like trading for the rights to name leprechauns.

    One of the Greek problems is that its bloated government bureaucracy was what supported more government expansion, spending and special privileges for government employees. Apparently, only a few people a crash coming from this.

¶ ATHENS — For nearly two years, as the debt crisis worsened, Diomidis Spinellis led a team that devised innovative software to help Greece crack down on tax cheats. He sent daily reports to his superiors showing which regional tax offices lagged in closing cases and collecting tax revenue.

¶ But last September, Mr. Spinellis, who interrupted a brilliant career as a computer science professor in 2009 to work for the Greek Finance Ministry, resigned, frustrated that officials did little or nothing with the data he generated.

¶ “I cannot remember getting an enthusiastic response,” Mr. Spinellis, 45, said with characteristic understatement in an interview in his tiny, book-filled office at Athens University of Economics and Business, where he has returned to teaching.

¶ In exchange for the bailout money that Greece needs by March to avoid what could be a catastrophic default, the country’s foreign lenders have demanded radical changes to make the state more efficient and bring in more tax revenue. But as Mr. Spinellis’s experience showed, good intentions and directives can easily be evaded or sabotaged by the political class, if its members have not signed on.

¶ In Greece, the government of the technocratic prime minister, Lucas Papademos, is proving powerless to transform an inefficient public administration that has long served as a power base for the same political leaders — including most of the current government’s ministers — who are now being asked to dismantle it.

¶ It is a formula for gridlock that virtually guarantees, political and financial experts say, that the Greek government will never carry out the kind of basic changes that are being demanded of it.

¶ “In Greece, the real power is the power of resistance, the power of inertia,” said Giorgos Floridis, a former member of Parliament from the Socialist Party who recently founded a reform-minded civic movement. Today, he said, the main power centers in Greece — political parties, business leaders, professional guilds, public sector unions and the media — are fighting to preserve their privileges, blocking structural changes that could make the economy more functional.

¶ The slow pace of change is one reason the government and its so-called troika of foreign lenders — the European Union, the European Central Bank and the International Monetary Fund — have relied more heavily on swifter measures, like hard-to-evade tax increases and across-the-board wage cuts, that have helped push the economy deeper into recession.

¶ Change is all the more difficult when corruption appears to be woven into the fabric of the Greek state. Last month, Yiannis Kapeleris, the Finance Ministry’s general secretary for tax and customs affairs — and Mr. Spinellis’s former boss — was forced to resign after being placed under criminal investigation in a complex case involving failure to collect fines imposed on fuel companies. He denies the charges.

¶ Also last month, the man in charge of the Finance Ministry’s Financial Crimes Unit in the northern city of Salonika, Christos Papachatzis, was among 53 people arrested on charges of extortion and leading a protection racket that lent money at usurious rates. According to a wiretapped telephone conversation reported in the Greek news media, he reassured the leader of the gang, Markos Karaberis, that he would not act on a complaint against him.

¶ Asked about the arrest in an interview, Pantelis Economou, a Finance Ministry official who is also a high-ranking member of the Socialist Party, said: “He’s alleged to be a member of a gang, and it seems it’s true. He was the chief there. He was also my party’s member. I sacked him the next day.”

¶ Mr. Papachatzis denied the charges through his lawyer, who said his client was the target of politically motivated prosecutors intent on demonizing the finance minister, Evangelos Venizelos, who is widely seen to be vying to become the leader of the Socialist Party.

¶ In another sign of the nexus between the criminal underworld and Greek politics, all those arrested in the Salonika investigation had ties to the three parties supporting Mr. Papademos’s coalition: the Socialists, the center-right New Democracy party and the hard-right Popular Orthodox Rally, known as L.A.O.S. (Mr. Karaberis ran for a regional office last year with L.A.O.S., using the campaign motto “Clean hands, clear ideas.”)

¶ Mr. Spinellis was supposed to be part of a new generation. He was hired through an open government initiative started by the Socialist Party to promote meritocracy over cronyism, but which critics now say was largely cronyism under another guise.

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   Cronyism in government. What’s next, corruption and inefficiency?

Things started out well for Mr. Spinellis. He led a team of 800 people in creating databases to crosscheck property ownership or large money transfers abroad against declared income and to help digitize a tax collection system that still relies on paper. Unable to hire, fire or give performance-based bonuses — that sort of thing is simply not done in the Greek government — he rewarded productive workers informally, with better parking spots.

<insert>

     Can’t fire and hire. How can that go wrong?

But as time went on, he felt thwarted. His reports clearly indicated which regional tax offices were performing poorly, but no action was taken.

He recalled a meeting in May when he and George Papaconstantinou, then the finance minister, and another ministry official were working to set tax rates that would balance the budget. “I remember wondering why we were doing the work that was the responsibility of the secretary general for taxation and customs,” he said, referring to Mr. Kapeleris and his deputy. “I then realized that we were on our own, and that the cards were stacked against us.”

Mr. Kapeleris did not respond to a request for comment.

Last September, Mr. Spinellis decided to resign, citing personal reasons.

But in a speech in December he stirred up controversy when he spoke openly about corruption, describing a “4-4-2” system in which Greek tax collectors would traditionally lop off 40 percent of a taxpayer’s outstanding tax fine, ask for 40 percent under the table and send the remaining 20 percent to the state.

Mr. Economou, who oversaw Mr. Spinellis’s department, said it was easy for Mr. Spinellis to talk after leaving. “If I quit, I’d be a hero tomorrow, too,” Mr. Economou said. “Sure, there’s bribery, there are moral offenses,” he added. “But our job is to face them, to oppose them and face them.”

<insert>

    Coercion and corruption–the daily double of government.

Mr. Economou said that it was difficult for the ministry to act on Mr. Spinellis’s data because the ministry’s infrastructure was simply not up to the task. “It’s correct he was generating reports every afternoon,” Mr. Economou said. “These reports came to my office” and to others’, he added, “but there’s no system to manage this phenomenon.”

He said that the ministry was doing its best to create such a system, but that radical administrative change took time.

According to one database that Mr. Spinellis helped create, the tax office in the Athens neighborhood of Zografou closes only 13 percent of its outstanding tax cases. But on a recent afternoon, the challenges there were clear. A few taxpayers came in, confused about which forms to fill out. Boxes of paper files were piled up around the office. An unused dot-matrix printer sat gathering dust.

“We’re supposed to be a country in Europe, but the way things work it’s like a third world country,” said Jenny Sakka, an employee. Her computer was powered by the outdated Windows 2000 operating system, she said, and austerity-induced reductions in office staffing had created a larger backlog of cases.

Making matters worse, she said, wage cuts imposed by Greece in agreement with its foreign lenders meant that some people simply were not able to pay their tax bills. She said she believed that wilier people could use connections to help reduce what they owed. “We have a punishment system only for the poor and the honest,” Ms. Sakka said.

There is one note of optimism, experts say: the whole system under which politicians used state money to dole out favors and hire supporters is collapsing under the pressure of the economic crisis.

“When the money stops flowing, things change,” Mr. Spinellis said.

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    If you don’t plan for the collapse–the collapse will plan for you.

Cheerio and ttfn,
Grant Coulson
Cui Bono–Cherchez les Contingencies