23 July 2005

Know your rights

I've been listening to Combat Rock by the Clash quite a lot recently. Welcome to the new world order, where we are guilty until proven innocent. For Jean Charles de Menezes, I'm not sure what you were up to, it must have been an honest mistake, and hey, at least Scotland Yard "regret" the incident. And according to good old "Red Ken" Livingstone, socialist mayor of London, this death is the responsibility of the terrorists. It's a fine line between socialism and fascism, isn't it?

Anyway, I thought it might be fitting to post the lyrics to "Know Your Rights"

This is a public service announcement
With guitar
Know your rights all three of them

Number 1
You have the right not to be killed
Murder is a CRIME!
Unless it was done by a
Policeman or aristocrat
Know your rights

And Number 2
You have the right to food money
Providing of course you
Don't mind a little
Investigation, humiliation
And if you cross your fingers
Know your rights
These are your rights
Know these rights

Number 3
You have the right to free
Speech as long as you're not
Dumb enough to actually try it
Know your rights
These are your rights
All three of 'em
It has been suggested
In some quarters that this is not enough!

Get off the streets
Get off the streets
You don't have a home to go to

Finally then I will read you your rights
You have the right to remain silent
You are warned that anything you say
Can and will be taken down
And used as evidence against you
Listen to this

22 July 2005

Hockey, we missed thee

As long as the NHL Board of Directors votes to ratify the new collective bargaining agreement, and they will since they essentially got everything they wanted from the players, then Ottawa's march to the Cup will officially begin today. Of course the big news is the draft lottery today at 4, which will give some team the right to draft Sidney Crosby, expected to be the next Wayne Gretzky. I'm not sure what I'll do if Ottawa gets the first pick, but this won't happen since we all know it has been fixed to give the NY Rangers the first choice (Patrick Ewing, anyone?).

It will be interesting to see what sort of rule changes are implemented. Some are necessary, like limiting the size of goalie equipment and removing the centre red line. The current NHL goalie resembles the Michelin Man, it's no wonder scoring is down so much lately, and anyone familiar with international hockey will tell you how much better the game is when you can pass from blue line to blue line. No touch icing will also cut down on unnecessary injuries. Some of the other rumoured changes are just silly. Forbidding the goalie to handle the puck behind the goal line doesn't make much sense, assuming the red line goes, then having a goaltender like Brodeur be able to start quick breakouts after a dump in would be amazing. And if they change the size or shape of the nets, then I'm afraid Gary Bettman will be in fear of his life whenever he steps foot in Canada. And who wants to bet the enforcer rule stays in place?

19 July 2005

Drunk talk

Typical situation. Government has its mucky fingers all over an industry and comes to the realization that something is wrong. Government then forms a commission consisting of industry bigwigs to undertake extensive review of the problem at considerable taxpayer expense. Commission comes up with some reasonable ideas as well as some not so satisfactory suggestions. Government decides to "review the recommendations," which means anything reasonable will not be occurring. While politicians normally try to conceal their power, in Ontario the government entity responsible for the alcohol monopoly is actually called the Liquor Control Board of Ontario (LCBO). The Ontario government decided this Prohibition-era state-owned company was in need of some change, and set the old cogs in motion.

The resulting report actually acknowledges that having 3 monopolies controlling a retail market is not in the best interest of consumers, which can only be realized through open, competitive markets. Bravo. Unfortunately, here's where paternalism rears its ugly head. Alcohol is no ordinary consumer good, as individuals cannot consume it rationally. Thus the recommendations made by the report are more in line with achieving some sort of "social optimum" and are as follows:

* maintain the same number of retail outlets as under the current system through a licensing system that will maximize government revenue
* have strict requirements on sales and regulated opening hours
* a minimum price policy
* require complete monitoring of alcohol by the government over all stages of production

While only the third of these recommendations directly affects the price of alcohol, the others all work raise the price indirectly. Using license fees means that retailers must pay the government for the right to sell alcohol. The government-granted monopoly system results in too few retail outlets, so keeping the number of outlets the same results in shortages. Adhering to the strict regulations and monitoring guidelines also raise the cost of production and therefore prices.

If you're expecting anything resembling a competitive market as a result of this report, don't hold your breath. While the recommendations would at least move prices in the right direction, the response by the Liberals has been typical of those holding state power. They will not be selling the LCBO, and they will not be allowing corner stores into the market to provide competition. As they seem to believe, the public interest is best served by the status quo. So while I can purchase a "2-4" of Labatt Ice for $16 when I'm getting my groceries in upstate NY, the same case of beer would be costing me $33(US) in Ontario, and it would require me to make a separate trip to the beer or liquor store. Thankfully the NY government hasn’t gone to the same lengths to serve the public interest.

Miss Individual Of Note Contributing To Our Community

This is just bizarre.

15 July 2005

Back across the border

Yes, the title is referring to the recent ruling that will allow live cattle across the border from Canada and not my return from Europe. See here for the news. The ruling is of course a good one as it will remove yet another inefficiency in the market created by exchange restrictions. The argument being made by R-CALF, a special interest group representing ranchers from Montana, was that cattle coming across the border from Canada were unsafe. Canadian ranchers have the same incentives as American ranchers, and that is to raise healthy cattle to sell in order to maintain their livelihoods.

The benefits of a free exchange across the border arise from an inequality in values. By selling cattle in the U.S., the Canadian rancher gets an amount in U.S. dollars worth more than the value arising from utilizing his cattle in the next best manner. The individual in the U.S. who buys the cattle values it more than the amount of money he or she gives to the Canadian rancher. Thus both parties to the transaction gain in wealth as a result, and the efficiency gains are distributed through out the economy.

Of course some individuals will be hurt by this ruling. Specifically members of R-CALF. Consumers in the U.S. do one of two things once the border is opened. Some people continue to purchase from American ranchers. Others purchase from Canadian ranchers. Some of these people are individuals who did not purchase any cattle before, as they did not value cattle highly enough to buy any at the higher cost resulting from the trade restriction. The remaining individuals are those who no longer purchase cattle from American ranchers. As the price of cattle falls from the artificially high price of p+t to the natural price of p, relatively inefficient ranchers will be driven out of the market.

Whenever prices are altered by special interests or governments, wealth is destroyed as a result. The problem arising from a closed border or any restriction on trade that alters prices away from their natural level is that it directs resources away from their most efficient uses. When individuals make unrestricted trades in the market, they engage in those activities which provide them the greatest value. Courts should ensure that any exchange that maximizes the sum of exports and imports is allowed to happen, and this ruling certainly does that.