Grantcoulson's Blog

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

“Ontario Liberals propose new fees
By ANTONELLA ARTUSO

     The Dalton McGuinty government is pushing ministries to use "new revenue streams" to stay on budget.

TORONTO – Eco fees may be just the beginning.

     The Dalton McGuinty government has encouraged its ministries to pursue new fees to stay on budget and to pay for additional programs, according to a 2010-11 Results-Based Planning document obtained by QMI Agency.

"Non-tax revenues (NTRs) offer an opportunity to ensure fiscal neutrality of ministry expenditure proposals," the document says. "If applicable, ministries are encouraged to propose new revenue streams to offset increased expenditures if there are no large-scale investments required, or to increase existing fees to achieve full cost recovery."

The "Other Revenue Technical Guide" reminds ministry budget crunchers that they have "an opportunity to make requests for establishing new revenue streams and/or significant redesigns to existing fees which could be considered if they assist ministries in living within their current multi-year minuted allocation."

Ministries were also told the public should be charged a "premium" for using electronic kiosks instead of traditional over-the-counter service, even though it would appear to reduce the need for costly staff.

"Particular electronic service delivery channels, such as kiosks, are considered a premium service for which an additional amount is charged to acknowledge the cost of this service above the normal delivery standard," a guide says. "This may result in the total fee charged being higher than the fee to deliver the same service over the counter."

The advice is contained in budget and revenue planning documents from the Treasury Board of Ontario that guide ministries in managing their books during a time of substantial deficits.”

…….

      Here it is, if anyone ever doubted it. The survival and growth of the civil servantry complex becomes the aim when the purpose of the government has long since been forgotten. Let’s squeeze as much money as we can out of our cash cows.

     Ontario is a little backwater jurisdiction in the big scheme of things, but represents all that is wrong with “The government will manage and solve all problems because of our superior knowledge, expertise and superior, allaround goodness.” point of view.

     These things are being proposed by the same government that instituted a “green energy plan” involving billions of dollars for ethanol, wind and solar power, electric cars and other things which will never work without tremendous subsidization, both direct and hidden. This is the same government that talked about a “new era of cooperation” with the teacher unions–Translated this means, “We’ll give you lots of money and job security for pretending to teach.” This is the same government that is deeply in debt, promised not to raise taxes and raised thousands of them. If it weren’t for the climate, I’d swear I lived in California.

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.

Toyota Cars: Not As Bad As You Think

— By Kevin Drum
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      "Toyota cars really do suffer from sticky accelerator pedals and floor mats that can trap accelerator pedals to the floor. But those of you who remember the great Audi 5000 debacle of the late 80s will be unsurprised to learn that the bulk of recent reports of runaway acceleration in Toyota vehicles were likely the result of [drumroll please] driver error:

    The U.S. Department of Transportation has analyzed dozens of data recorders from Toyota Motor Corp. vehicles involved in accidents blamed on sudden acceleration and found that at the time of the crashes, throttles were wide open and the brakes were not engaged, people familiar with the findings said. The results suggest that some drivers who said their Toyota and Lexus vehicles surged out of control were mistakenly flooring the accelerator when they intended to jam on the brakes.

    ….NHTSA has received more than 3,000 complaints of sudden acceleration in Toyotas, including some dating to early last decade, according to a report the agency compiled in March. The incidents include 75 fatal crashes involving 93 deaths.

    However, NHTSA has been able to verify only one of those fatal crashes was caused by a problem with the vehicle, according to information the agency provided to the National Academy of Sciences. That accident last Aug. 28, which killed a California highway patrolman and three passengers in a Lexus, was traced to a floor mat that trapped the gas pedal in the depressed position."

    That didn’t stop the media hysteria and the "grilling" of Toyota officials by both the U.S. and Canadian governments. Facts have no place in the media or politics. I’m sure lots of legislation will be passed to fix the non-problem. After this is done, the legislators can point with pride to the effectiveness of their lawmaking.

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.

    As Williams points out below, the Great Depression was great because it was the first in which “activist” governments both under Hoover and Roosevelt, decided it was the government’s role to intercede and make the economic downturn shorter. When a government decides to “do something”, it’s a perfect of example that when something “needs to be done”, it usually makes things much worse. The emphasis is on the INTEND and the IS and not on the DOES–the outcome of well-publicized intervention.

Walter E. Williams
A Failed Obama Hero

     “Let’s think about President Obama’s failed economic stimulus program. Before getting to the nitty-gritty of why stimulus packages fail, let’s look at the failed stimulus program of Obama’s hero, Franklin Delano Roosevelt. FDR’s Treasury Secretary, Henry Morgenthau, wrote in his diary: "We have tried spending money. We are spending more than we have ever spent before and it does not work. … We have never made good on our promises. … I say after eight years of this Administration we have just as much unemployment as when we started … and an enormous debt to boot!"

     Morgenthau was being a bit gracious. The unemployment figures for FDR’s first eight years were: 18 percent in 1935; 14 percent in 1936; by 1938, unemployment was back to 20 percent. The stock market fell nearly 50 percent between August 1937 and March 1938. Columnist Walter Lippmann wrote, "With almost no important exception every measure he (Roosevelt) has been interested in for the past five months has been to reduce or discourage the production of wealth." The last year of the Herbert Hoover administration, the top marginal income tax rate was raised from 24 to 63 percent. During the Roosevelt administration, the top rate was raised at first to 79 percent and then later to 90 percent. Hillsdale College economic historian Professor Burton Folsom notes that in 1941, Roosevelt even proposed a whopping 99.5 percent marginal rate on all incomes over $100,000. Much more of the Hoover/FDR fiasco can be found in "Great Myths of the Great Depression".”

The Great Depression did not end until after WWII. Why it lasted so long went unanswered until Harold L. Cole, professor of economics at the University of Pennsylvania, and Lee E. Ohanian, professor of economics at UCLA, published their research project "How Government Prolonged the Depression" in the Journal of Political Economy (August 2004). Professor Cole explained, "The fact that the Depression dragged on for years convinced generations of economists and policy-makers that capitalism could not be trusted to recover from depressions and that significant government intervention was required to achieve good outcomes. Ironically, our work shows that the recovery would have been very rapid had the government not intervened." Professors Cole and Ohanian argue that FDR’s economic policies added at least seven years to the depression.”

……

     “Between 1787 and 1930, our nation has seen both mild and severe economic downturns, sometimes called panics, that have ranged from one to seven years. During that interval, no one considered it to be the business of the federal government to try to get the economy out of a depression because there was no constitutional authority to do so. It took Hoover, FDR and a frightened and derelict U.S. Supreme Court to turn what might have been a three- or four-year sharp downturn into a 15-year meltdown.”

    And that’s government for you.

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 the globe is warming, why is Antarctic ice increasing? Like Marxism, everything supports man-made global warming except the facts.

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 the silliest myths of politics, which puts it in line for the all-time silliest, is that “New Deal” policies ended the Great Depression. In truth massive government intervention worsened and prolonged it. If the policies were so effective, why was the Depression so long?

 Krugman’s Depression

      “Economic Policy: Nobel Prize-winning economist Paul Krugman says the U.S. is in the "early stages of a third Great Depression." If he’s right, it’s only because American policymakers have been following his advice.

    Hell knows no wrath like that of an economist scorned — especially one on the left of the political spectrum. Case in point: New York Times columnist and sometime economist Paul Krugman. The world is going to hell in a handbasket, Krugman suggested this week, thanks in large part to its refusal to follow his advice to the letter.

     Actually, he has it exactly backward. Krugman was among those who encouraged the new Obama administration and the Democratic Congress to spend massive amounts of money early on in a kind of Keynesian frenzy to shock the moribund economy back to life.

     It didn’t work. With a stimulus — a deficit, that is — of nearly 11% of GDP, our economy is barely growing, while unemployment remains shockingly close to 10% of the adult working population.

      This even prompted our nation’s vice president, Joe Biden, to admit last weekend: "There’s no possibility to restore 8 million jobs lost in the Great Recession."

     And he’s right — at least with current policy, which is based on massive spending, new tax hikes, trillion-dollar deficits for decades to come and tight government control of vast swaths of our nation’s economy, from banking to autos to energy.

     Krugman recognizes, too, that it’s a "failure of policy."

     Only problem is, he completely misdiagnoses the problem: "Around the world — most recently at last weekend’s deeply discouraging G-20 meeting — governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending."

    Inadequate spending? That’s laughable. The reason our economy hasn’t improved is because our government has spent too much, siphoning badly needed investments and savings from the highly productive private sector to feed the nonproductive, inefficient, heavily unionized government sector. It’s a recipe for stagnation.”

……

      “It’s an enduring myth that the Great Depression was caused by inadequate government "stimulus," of the sort Lord Keynes and President Obama would have approved. In fact, as a study by economist Randall Holcombe shows, under President Hoover, who served from 1929 to 1933 just as the Depression got under way, real per-capita spending surged 82%. That was even greater than the 74% rise from 1933 to 1940 in FDR’s time.”

    No government agency creates resources, it can only misallocate them.

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