Merry Christmas

Merry Christmas

and while you are here a Christmas fun fact:

The reindeer is named Donder not Donner

Pass it around

I'm still here

My apologies for the lack of blogging lately. I've been occupied trying to find employment recently. I thought that I should at least blog a couple times before we have another election.

I'm not surprised by the planes for a liberal alliance. I'm actually surprised it didn't happen earlier. The last election must have acted as a wake up call.

My guess is that the liberals see the down economy and Harper's resistance to a stimulus plan as their opportunity to get into power. It may bee good news in the short term for the Canadian left, but in the long run it is a bad sign. This move is most defiantly a huge sign of weakness.

Things that are amazing

From FiveThirtyEight.com

These ground campaigns do not bear any relationship to one another. One side has something in the neighborhood of five million volunteers all assigned to very clear and specific pieces of the operation, and the other seems to have something like a thousand volunteers scattered throughout the country. Jon Tester's 2006 Senate race in Montana had more volunteers -- by a mile -- than John McCain's 2006 presidential campaign.

--This left me wondering how on earth the election McCain could even be winning any states...at all. Five million VOTERS would be enough to get elected in most countries. Mark Twain once wrote that fiction is bound to the realm of possibility. Reality is not. This election defiantly applies.

Seinfeld election

There are two reasons why I haven't made a post about the election until now.

1. I've been away from home and haven't had too much time for blogging.

2. This has very much been a Seinfeld election, A.K.A. an election about nothing. I can't think of anything to write about. I really have a hard time thinking of a, non-obvious way that the country is different now.

I think the biggest political consequence of this election is the coming shack-up in the Liberal party. They are in need of a Maverick. So is the GOP, but that is for another post.

Reason why I love democracy #6,947

...A little optimism..

So far I've been silent on the current financial crises. Mainly because I don't have a stunning knowledge of financial markets (though I think I know more than most the talking heads you see on TV news).

Anyway, watching the market go down and down there is only one fact that I find comforting, Stein's Law. Stein's Law is that if something cannot go on forever it must stop. Just as the market in the late nineties couldn't keep going up and up, the current market cannot keep going down forever. Today the Price to Earnings ratio of the DOW reached it's lowest level in 23 years. Something will eventually give.

Hang in there.

NDP Directs Canadians to the Web

...Well indirectly. Jack Layton has endorsed a policy of mandating that all Canadians networks carry Canadian content only. If this were made in to law, I do not think that Canadians could honestly claim to have a right to free speech.

This also speaks to the creeping xenophobia in Canadian culture. Many Canadians like to criticize (rightly) the fact that the Bush administration has sacrificed civil liberties in order for some supposed greater good. I've got news for you, it's happening here too. Let's not fall for that trap.

I suggest we call this plan what is really is:



credit to Stackelberg Follower

Greenwashing and the Economics of Eco-Friendly Products

Today I'm proud to introduce this blogs first guest post from Kelly Kilpatrick:

Over the last few years, the public’s environmental consciousness has grown by leaps and bounds in response to several different factors. With the rising price of oil and an increasing amount of evidence in the case for global warming, people are seeking out alternatives to traditional products in order to minimize their personal impact on the environment, while improving their health and the health of others around them in the process.

For quite some time, organic and eco-friendly products have been on the market, but now, more than ever, companies are moving toward “greenifying” their business models. This can help or hurt the company, depending on their motive for making these changes.

Greenwashing is a term used by consumers who believe they are being misled by companies who advertise themselves as green for the wrong reasons. For example, some companies are simply making changes to their public image and using green rhetoric to win over consumers. With information available at the click of a mouse, consumers find out quickly whether or not said company is green for the revenue it generates, or for loftier, more socially-conscious reasons.

In an article entitled “The Six Sins of Greenwashing,” a study found that of over 1,500 products surveyed, 99% of them were guilty of greenwashing. This is a disturbing trend in marketing, where large companies are trying to capitalize of the green market, all the while doing nothing to really help with their part of the problem.

With the demand for organic, sustainable, and eco-friendly products constantly increasing, companies that truly do care are struggling to maintain their hold on the market. Consumers that want to support companies that are environmentally conscious are going to need to do their homework.

Unfortunately for consumers and the environment alike, big business is beginning to threaten a niche market whose intentions were good. For more information on greenwashing and the top offenders, click here.

This post was contributed by Kelly Kilpatrick, who writes on the subject of the best online degrees. She invites your feedback at kellykilpatrick24@gmail.com

Pre-election spending

Political incentives change around election time, as this article from Canada.com highlights

WINDSOR, Ont. - The federal Conservatives rushed out billions of dollars in new spending announcements Wednesday while the Liberals made their own billion-dollar announcement, a sign that an election campaign is underway in all but name.

In Windsor, Prime Minister Stephen Harper said Ottawa would send Ford Motor Co. an $80-million cheque as a repayable loan to help the Detroit-based company reopen a mothballed engine plant here. In Quebec, Infrastructure Minister Lawrence Cannon announced that Ottawa and Quebec had signed a deal that will spring $4 billion of federal funding for roads, bridges, and other public infrastructure projects.

Other ministers rolled out millions in spending announcements across the country, from a $30,000 grant for an organ festival in Montreal to a $2.8-million program to help street youth in Vancouver get a job.

As you approach the election, politicians usually try to pay off individual ridings. Not broad programs that effect the entire country. I think we all know who those Ford employees are going to be voting for (enough to swing the riding?). We also know what Ford's lobbyists have been up to.

What to do?

Having graduated last week, I find myself, for the first time in four years, in Victoria with absolutely nothing to read. I'm heading to the library this afternoon.

Living on a boat the storage cost keeping books is pretty high, hence the library. Victoria has a bunch of great used books stores though. Defiantly worth checking out if you are in town.

A bit Shameless

TOMORROW IS THE LAST DAY IN MY UNDERGRADUATE CAREER (please excuse my yelling).

Anyway, now that I am working on finding a job, I turn to you. Maybe you work for a company that hires economic majors and know of job openings.

Maybe you don't work for a company that hires economics majors but know of job openings anyway.

Maybe you like my blog so much you want to put a trust fund in my name.

Ok, the last one is reaching, but if you want to hire me, or know of anyone that would I will be very appreciative if you drop me a line.

Thanks

Trade-offs

A few days ago me and a couple of friends were discussing the US bombing of Hiroshima and Nagasaki. One of my friends pointed out that even if Truman's motives were simply to keep Japan out of the hands of Stalin, it may not have been a bad deal for Japan.

I agreed with this because the odds of your life being worsened by one of the two bombs was pretty low, while the probably that your life would be worsened by a Soviet Occupation would be near certain. It's true that no outcome is worse than instant death, but I still feel it's a bet that most people would be willing to take.

A majority of the people that I was talking with agreed with me. The dissenters argued that taking a such a large number of lives in a blink of an eye was morally wrong, no matter the circumstance. I think that most the people at my University would also take this position. I also believe that most economists would agree with my position. We all face trade-offs every day, why should this be immoral just because it's on such a larger scale?

What makes wrestlers angry?

Ok, I realize the irony on writing a post about the Olympics right after I wrote a post about how I don't like watching them, but I'm going to do it anyway.

You probably heard about the angry Swedish wrestler that through down his bronze metal after the ceremony in protest because he felt cheated by a call in the semi-final match.

One of my friends pointed out that you would expect that kind of behaviour from a country that is known for having a temper. Not a polite northern country like Sweden.

Later today I stumbled upon a quote from Nassim Taleb's excellent book The Black Swan (read it!)

People tend to fool themselves with their self-narrative of "national identity" which, in a breakthrough paper in Science by sixty-five authors, was shown to be a total fiction. Empirically, sex, social class and profession seem to be better predictors of someones behaviour than nationality. (A male from Sweden resembles a male from Togo more than a female from Sweden; a philosopher from Peru resembles a philosopher from Scotland more than a janitor from Peru; and so on).

The point is people often judge based on nationality when there is no reason to. Ara Abrahamian is Swedish, but he is also a wrestler and a man. At the Olympic level none the less. I'm sure he has a pretty competitive personality. This makes his behaviour seem a bit less surprising.

On a personal note, being a former wrestler myself, I can tell you that the only time I ever got in an argument with an official was over the exact same penalty that Mr. Abrahamian fell victim too (intentionally going out of bounds). It was extremely frustrating, even in a match of very little consequence. I feel for the guy. Newspaper editorial boards shouldn't be so quick to judge people in situations that haven't experienced themselves.

Olympics and nationalism

Again I apologize for the lack of blogging. One of the down sides to living on a boat in using a wi-fi subscription service whose owners have little incentive for good customer service.

I've gotten a couple comments on a previous post questioning my dislike for the Olympics. Flatly put, I find the Olympics a bit creepy. I find something very Orwellian in the fact that I am expected to look up to and celebrate certain athletes just because they happen to be born in the same country as me.

I know you can say the same thing about professional the NHL, but I find this less extreme. You are still allowed to be a fan a hockey team that is from a different city than yours (though it is not encouraged). You are also allowed to not be a hockey fan. Where as with the Olympics "I don't like fencing" doesn't seem to be an adequate excuse for not watching.

Lastly, people have the ridiculous idea that your nations performance in the Olympics is somehow a measure of how good your country is doing. This is not a standard that we have in hockey, and I am grateful.

On this note, Paul Krugman has an excellent column today about the threat the nationalism poses to globalisation. It is important to remember that the Olympics only serves to make this worse despite whatever people say about it being a "celebration of world peace"

Once upon a time...

You probably heard by now about collapse of trade negotiations at the last WTO meeting.

Some of you probably remember the time when nations could actually come together and solve problems. When international summits were more than just a big photo op.

I don't. I'm not old enough (22).

I've read about it in history books though.

Textbook Monopolies

I apologize for the complete lack of blogging lately. Who would have thought it's easier to blog when it's zero degrees in and the sun goes down at four then when it's 25 and the sun goes down at nine.

Anyway, the latest issue of our campus newspaper, the Martlet, informs me that the new copyright act will make it so, "bookstores aren't allowed to purchase from cheaper places like the United States or the United Kingdom."

I find this interesting. Fist of all, it has nothing to do with copyrights. Second, it takes money from students and universities and places it in the hands of Canadian book publishers.

Possible reasons: The book publishers have better lobbyists than do students (or the students are lobbying the wrong people).

Students don't know who to blame for high book prices, but they would know exactly who to blame for higher tuition fees. Making higher textbook prices a smart political move.

Who's stabilizing who?

A professor once told me the only economists that support rent stabilized apartments are the ones who live in them.

But what about politicians?

Great idea, Wrong target

Some of you may have heard about ruinediphone.com. It's a newly formed protest group trying to get Rogers to lower the price of the IPhone in Canada. They claim that cell phone prices are higher in Canada than in the U.S. and other countries.

They're right. However, they're wrong to blame this all on the cell phone companies. Companies everywhere charge as much as the market can bear. Rodgers is no different.

The difference is that Canada doesn't allow any foreign competition into the market. Therefore lowering competition. So how about sending all those signatures to Ottowa instead of Rogers?

After all, they're supposed to be on our side right?


Here is the video form ruinediphone

Are larger governments more corrupt?

It occurred to me that if you hold all else equal, it seems that the amount of corruption in a government increases with size. The provincial governments seems less corrupt than Ottawa. Ottawa seems less corrupt than Washington...ect. There are two reasons that I can think of to explain this.

First being that the larger government having more money is able to pay off more special interests using its size as cover. In other words, the large government is too big for the average Joe to watch, and they take advantage of that.

The other reason would be that big governments aren't actually more corrupt than their smaller counterparts. Their big size just draws a lot of media attention. Much of this media attention will highlight corruption. Therefore, we think that big governments are relatively more corrupt, but really they just draw relatively more media coverage.

I am aware that these theories are mutually exclusive. I am not aware of which (either?) one is true. I'll reserve that one for people smarter than me.

Destitue Lottery Winners

Canadians seem to really like the fact that lottery or other cash winnings are except from taxation. This is not true in most other countries including the United States. I have a hard time figuring out why this is so popular. After all, lottery winners are not destitute, and they didn't do anything to deserve the winnings (you can say lottery winners deserve their cash for taking risk, but this certainly isn't true for people on "deal or no deal"). You would think that society would want to soak these people in taxes the same way they do folks who inherit a lot of money.

My best guess would be that people are attracted by the fact that their are merit based pre-requisites to winning large amounts of money. Most people know that they probably aren't going to go out and make a huge fortune. They also know that they aren't going to inherit a huge amount of money. Winning the lottery however, could be accomplished by a very lucky monkey with proper training, and that's what we like about it.

Why modern music is no good

A common complaint that you hear on University Campuses is that music isn't as good as it was in the days of Dylan and the Beatles. Most people blame record companies. I have a different explanation.

First, the only mass market for music that still exists is the market for young teenage girls. This explains the popularity of acts like Hanna Montana and High School Musical. University students still listen to good music, but they can't agree anymore. In the summer of love everybody was listening to Dylan and the Doors. Now one person is listening to Kimya Dawson while another person is listening to Two Hours Traffic. Blame Myspace and Bittorent.

Second, music in the sixties wasn't as good as people think it was. Look at a billboard top ten list. Most of the songs aren't very good. These songs don't get play on classic rock stations. Oldies stations get the advantage of picking their songs from a four decade filter of history.

So stop being so pessimistic about music. Besides, having an ipod means that you don't have to listen to the radio anyway.

The most valuable arctic resource

Ok, so you've all probably heard by now that the CBC decided to drop the hockey night in Canada theme song, but you probably didn't see this very funny bit by Steven Colbert on the matter.



Anyway, the national post reported that the audience snickered when the announcer said the hockey night in Canada theme was considered Canada's second national anthem. They didn't. You can listen for yourself. I know this has nothing to do with politics or economics. I just thought I would call them on it.

100% Canadian Coffee?

The coffee that I bought today proudly claims that it is 100% Canadian . Well, actually it has "proudly *picture of a maple leaf* 100%" printed on the top of the can. Does printing a maple leaf instead of actually saying "Canadian" give them legal cover? If not, wear exactly in Canada can you farm coffee?

It's also worth mentioning that the coffee flavour is "Dark French Italian." This is marketing to hippies run amok!

Technology and Censorship

The NY Times has an article about the Kremlin's policy where critics of the government are not allowed on television. People reading this will naturally think that these policies can only go so far because of the wealth of information the internet provides (aahemm).

I am a bit more cynical. Most people still get their information through television, and bloggers seem to feed off the mainstream media, and vis versa. Without critics on one side the feedback loop could break down.

Thus far Putin has done a very good job at controlling the press, time will tell if this trend continues.

Anti-Farm Subsidy coalition?

The NY Times editorial board gave harsh criticism of farm subsidies this morning:

Congress has approved a $307 billion farm bill that rewards rich farmers who do not need the help while doing virtually nothing to help the world’s hungry, who need all the help they can get.

President Bush should keep his promise to veto it and demand better legislation.

The bill is an inglorious piece of work tailored to the needs of big agriculture and championed by not only the usual bipartisan farm state legislators but also the Democratic leaders, including Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi. Every five years we get a new farm bill, and each time we are reminded that even reformers like Ms. Pelosi cannot resist the blandishments and power of the farmers.

The bill includes the usual favors like the tax break for racehorse breeders pushed by Mitch McConnell of Kentucky, the Senate minority leader. But the greater and more embarrassing defect is that the bill perpetuates the old subsidies for agriculture at a time when the prices that farmers are getting for big row crops like corn, soybeans and wheat have never been better. Net farm income is up 50 percent.

The legislation preserves an indefensible program of direct payments amounting to about $5 billion a year that flow in good times and bad. It raises support levels for wheat and soybeans, while adding several new crops to the list in a way that will make it easier for farmers to raid the federal Treasury even when prices go up.

The bill has some virtues. It increases spending for food stamps. It encourages farmers to preserve land that would otherwise be lost to suburban development and provides modest help to organic farmers. It trims (but not nearly enough) the unnecessary tax subsidy for corn ethanol. It provides $400 million to reduce polluted runoff into Chesapeake Bay.

But none of that justifies the legislation’s enormous defects. Indeed, even the increases in conservation spending are not nearly as generous as advertised. President Bush asked for $4 billion more than Congress provided. He also complained, rightly, that House and Senate conferees had killed a program to conserve rare prairie grasslands while narrowing two programs that paid farmers to protect wetlands and wildlife habitat.

With few Republicans rushing to the President’s side, the House and Senate both produced what amounted to veto-proof majorities, assuming they hold up. Mr. Bush should veto the bill anyway. Bad legislation is bad legislation.

--It's good to see criticism coming from the traditionally left wing NY Times. Most efforts (if you can call them that) to reduce farm subsidies have historically come from the GOP. Hopefully the food crises will help build a coalition big enough to make a difference, but I wouldn't get my hopes up.

Political effects of the Olympics

Many people have criticized the Olympic committee for allowing China to host despite its human rights record. This argument has merit. China's humans rights record is not good. However, I believe the relevant question to ask is what kind of effect the Olympics will have on China.

China's coverage of the earthquake rescue effort is being broadcast uncensored. The Olympics probably played into this decision, when you are on the world stage, there's a lot of pressure to act nice.

The Chinese government has reduced pollution around Beijing so that athletes can...you know...breath.

However, the Olympic events are still boring, I don't care what anyone says.

Price Descrimination

Disagreeable economists

By now you've probably heard about the "gas-tax holiday" proposal in the US that's being trumpeted by Senators Clinton and McCain. Apparently last week the PBS Newhour tried to find a economist to argue in favour of this proposal. They couldn't find anyone.

How's that for disagreeable economists.

I also think that Dilbert is defiantly on to something here

A bit shameless

The Campus paper at the University of Victoria did a feature about some good looking guy living on a boat in Victoria's inner harbour. Wonder who that could be?

Here's the link

Subtle Racism

I was riding the Vancouver skytrain this weekend at night. A group of young men got on the train, clearly intoxicated, acting very rowdy and potty mouthed. By the time we got to the next station, about half the people in our car had felt the need to change cars

I couldn't help but thinking back to September when almost the exact same incident took place. Only people aboard the train didn't feel the need to change cars.

The only other difference? The group rowdy drunks I encountered in September were white, the group from last weekend were black.

I think it's a shame the lack of discussion we have about race in Canada. Many people are lead to think that everything is perfect, and racism only occurs south of the border. This isn't true, and until we start talking about it, it's not going to change.

Prediction markets accurate in Pennsylvania

Yes, I am still here, posting has been light. Exam season tend to have that effect on people.

The big news this week is Hilary's win in Pennsylvania. What is pretty amazing is that the Intrade markets barley moved after the results came in. Meaning that the results were almost exactly as expected. Here is the graph tracking Barak Obama's nomination over the past two weeks.

Reconsidering Bio-fuels

The NY Times has a piece about politicians in the U.S. reconsidering bio-fuel subsidies because of thier horrible effect on farmers in poor nations. Maybe it'll catch on and we will start to re-consider the other hundreds of billions of dollars in harmful farm subsidies.

No post today

The sun is out in Victoria, it's kinda like our version of a snow day. Weather like this could be detrimental to my GPA.

Possible CIA Consiracy

...okay, probably not, but if any of you are bloggers who like to start conspiracy theories this one would be a doosey:

Afghan farmers are this year sowing wheat instead of poppy - not because they have suddenly been converted to the argument that producing heroin is not in the national interest.

Market forces have been the deciding factor - with wheat prices doubling in the past year, and the street price of heroin falling, it is now more cost effective to grow wheat.

-That's from Paul Krugman's blog, I added the possible conspiracy part, other people can do the serious reporting

Food prices and poverty

I was talking to a Norwegian friend of mine a while ago and she mentioned that food in Canada costs about a quarter of what it does in Norway. This is interesting because we tend to think of Norway as a very equal society. However, I can imagine that huge food prices make being poor pretty difficult. Our standard measures of inequality, like Gini co-efficients, don't take this into account. Who knows what country is truly the kindest to its poor, but it is important to look at bit deeper into a nations micro-economy before you make judgments.

Canadian water shortage coming?

You hear a lot of talk about possible fresh water shortages that could take place in the future. I agree that having water is a good thing, a very good thing. I disagree with the most people in how to insure we have enough water in the future.

My view is that the best way to conserve water is to price it correctly now, so that we don't need to raise the price in the future. The mainstream view is that the best way to conserve water is to keep it out of the hands of Americans. This argument doesn't make much sense. Water is the same as any other resource, if Americans are willing to pay a higher price for it then Canadians, then we can give that money back to the public and end up with a better outcome then if we just restrict trade.

There was a proposal a while back to ship water from Vancouver island down to California on a tanker. The deal was killed because it supposedly set a "bad precedent." The conservation gain was zero, that water now flows into the ocean, but apparently it was worth giving up millions of dollars in revenue.

calming the markets

The white house has a new strategy to inspire people's confidence in the market, keeping them selfs as far away from it as possible. Check out the story in the NY Times

Good news on congestion pricing

Well, good news in New York at least. Today the New York city council approved a congestion pricing measure to create a $8 charge for driving in downtown NY. If you're wondering why I'm such a big fan of a new tax, think of it this way.

Normal taxes raise money for the government and have the extra effect of discouraging work. Congestion pricing raises money for the government while ensuring that there won't be any traffic jams. Hopefully this policy will catch on in the rest of North America pretty soon.

Two prices in crop markets

A recent NY Times article highlights that future prices in crop markets have been selling significantly higher than the cash price. Typically economists would say that is impossible because traders could earn free cash buying crops at the cash price and selling them at the future price.

This would earn RISK FREE CASH for the trader, and the price differences would soon disappear. This isn't happening. Nobody knows why?. As far as I can figure, this is an investment tip if there ever was one. If any of you end up getting rich buy selling future contracts remember who gave you the information.

Canadian automobile industry

A new report confirms that the auto industry will be turned on its head the next decade or so. Here's Rueters Canada:

Automobile production in emerging markets is set to outpace output in North America for the first time this year and the Canadian auto parts industry must adapt to the new reality, a study released by Scotia Economics on Thursday says.

Combined vehicle assembly capacity in the BRIC nations, Brazil, Russia, India and China, will climb to 20 million units this year surpassing the 17.4 million units of assembly capacity in place in North America, according to the Global Auto Report.

Get the full version here

--This is coming on the heels of the a announcement that ford was selling Jaguar and Land Rover to Indian car maker Tata. It's important to remember that protectionism is not the answer. If trade restriction are put up in the next couple years they will be very hard to get rid of in the future.

Yes, it would save jobs in the auto industry, but it will destroy jobs in other places and make it harder for families to buy fuel efficient cheap foreign cars. Not to mention hurt the incomes of people around the world that have it a lot worse than us.

P.S. Has anybody else heard the phrase "coming on the heels of" in any other context besides a news report?

Best Lyric Ever

"Them smokestacks reaching like the arms of God into a beautiful sky of soot and clay"-Bruce Springsteen, Youngstown

I think this is one of the best lines in all of music. It has alliteration, it has imagery, it has rhythm, it has economics.

Check it Out

Spectrum Auctions

Government spectrum auctions determine what cell phone companies get the right to broadcast at certain frequencies. This is boring, but it is also fairly exciting. ..Why?

Because the spectrum auction in the United States raised 20 billion dollars. Canada's should be around one tenth of that. None of this money is raised through taxes. All of it is payed for by the people who use it, cellphone users. Billions of dollars in public money, with no taxes. We need more programs like this.

When you're smiling

New study reports that people are happier spending money on other people than on them selfs:

Money can buy you happiness – as long as you're spending it on someone else.

New Canadian-led research, published today in the prestigious journal Science, says that spending your money on other people makes you happier than lavishing it on yourself.

"Spending on others can make people happy, yet people might not foresee this ahead of time," said Elizabeth Dunn, a psychologist at the University of British Columbia and the lead study author.

"When we asked people to predict which of our conditions would make them happiest, they tended to think they'd be happier spending it on themselves than spending it on others," Dunn said.

Recent surveys, the study notes, have shown people in Western societies have experienced few gains in their overall happiness level over the past several decades, despite a dramatic surge in real income.

Get the full version here

--This doesn't seem to make a lot of sense to me. If giving away money make us happier, wouldn't we do it more? The way I see it there are two possibilities.

1. People are systematically stupid and can't figure out that philanthropy beats buying for yourself.
   
2. The study is wrong

I doubt that people would be wrong on such a large level. We have huge amount of experience in buying things. If buying things for others makes us more happy, we would have figured that out by now.

My explanation, there is a survivorship bias. When people give things away they do it because it makes them feel better, but this is when people are making the choice. If we were to force people to give away money, it makes them unhappy. This is called taxation.

What a Treasury Bill really gets you

Interest rates in the United States have recently fallen to around zero after you adjust for inflation. Naturally you might wonder why people are willing to invest at such low rates. One good reason is that there's not many other places for the money to go.

Try to think of a list on countries you are exactly sure will be around in 30 years. It's pretty short. US, Japan, Western Europe, Canada (maybe). Africa is a no, so it the Middle East, and mainland Asia. Korea maybe. Latin America is a no.

This is why the United States doesn't have much of a problem selling their bonds at low return. It is about as close to risk free as you can get.

Sub-Prime claims another victim...Bear Stearns

Pretty amazing story, about a year ago the company was worth $160 a share. Sunday JP Morgan bought it for $2 a share. That's $236 million total. In other words, one of the world's biggest investment banks is now worth about the same as a junior hockey arena. This financial crises will be one for the books, there's no doubt about it.

Can the resource boom last?

Mark Carney says no:

TORONTO — The high commodity prices that have shielded Canada from recessionary conditions in the United States are poised to weaken and drag down the Canadian economy, the Bank of Canada's new Governor warned yesterday.

Even though oil and gold have been trading at record levels over the past few days, Mark Carney said in an interview he is looking beyond the day-to-day market gyrations to determine how the U.S. slump will worm its way into Canada.

Already, Canada has felt the effects of plunging exports to the United States, and is gradually feeling the impact of tighter credit conditions spilling over the border, Mr. Carney said.

Now it appears the U.S. slump will be deeper and will stick around longer than the central bank had expected, and the pain is being felt around the world, Mr. Carney said.

Global demand for many of the commodities that have fuelled Canada's prosperity will be hit, he predicted in his first round of interviews since becoming Governor of the central bank last month.

“Ultimately, it means slower growth than otherwise would have been experienced in a range of markets, including in emerging market economies.”

“That will have an impact on the outlook for commodity prices and terms of trade – a dampening impact,” Mr. Carney said.

“You don't see it in spot markets right now but you will likely see it going forward. That's one channel through which this will come back into Canada.”

Get the full version here

--Historically we have seen resource prices decrease over time as economies move to other forms of production. However, the last few years this trend has reversed. Will it continue? Nobody knows, but history is not on our side.

Canadian Income Tax Rates

from the economist:

There you go. Tell your American friends to stick that in their pipe and smoke it.

Don't mention we pay higher sales taxes, higher gas taxes, and higher liquor tax. Don't mention these all fall heavily on the poor.

RESP plan

In case you haven't heard, the liberals have come out with a plan to make savings for college tuition tax deductible. Making college affordable is a worthy goal, especially for somebody in my position. This plan is not the right way to go about it.

Most middle class families are already saving for their kids education. For these people the plan is simply a tax cut. Putting more money into the hands of people that are already doing alright. I would be in favour of increasing financial aid for people who really need the money, the plan would be more effective and less expensive.

Either way, it doesn't stand much of a shot at becoming law.

Good news for Canadian jobs

Statistics Canada reported that the economy added 43,000 more jobs in February, beating predictions. Unemployment hit a 33 year low at 5.8%. Wages are up too.

More important to most Canadians, the United States lost 63,000 jobs. Stupid Americans, now we can finally get them back for....ummmm....eeehhhh......NOT KNOWING WHERE SASKATCHEWAN IS. Stupid Americans.

Election in Canada's future?

With all the hubbub surrounding the new federal budget Intrade has recently added a new market to predict if there will be an election within the year. A whole one contract was traded today. An election is probably not a good idea for the liberals at this point. They are currently at 2 to 1 odds for losing the next election.

Canadian Labour Party?

I really wish that folks in the media would take more pride in their jobs



if there is anybody from MSCBC reading this let me clarify, this is the U.K:












It has a Labour party

This is Canada:












it does not

Does Harper want the GOP in power?

In case you haven't heard the story about Obama and NAFTA, there were reports that his campaign gave a wink and a nod to the Canadian embassy about Obama's recent attacks of NAFTA. Saying the attacks were political and not meant to be taken seriously. The campaign denies this.

Now rumors are flying that this was a stunt by the conservatives in an effort to embarrass Obama and try to give a hand to John McCain. I'm not sure. Besides ideology, here are a the reasons I could think of that Harper would want to GOP in power:

• Canadians generally think of themselves as more progressive than Americans. If the Americans elect a progressive leader, Canada might want one too.
• Having a Republican in power makes America less popular and raises nationalistic sediment in Canada, this could work in favour of the head of state
• The GOP is generally more free trade and therefore would make it easier to resolve running trade disputes.
  
• A left wing government in the U.S. may hold more contempt for a right-wing Canadian government, and therefore be harder to work with.
  
• The continuation of the war is Iraq will cause greater political instability in the middle east, driving up the price of oil and profits for Alberta.
  

All of these reasons are purely speculative, I'm not claiming that I have any evidence to show what is really happening, but it is always worthwhile to look at the incentives facing your government.

Gall-Peters Projection

I saw this map for the first time yesterday and stared at it for about 10 minutes. The Gall-Peters projection shows land masses in their true proportion and has 90 degree lat-log interceptions.

I'm accustomed to looking at a Mollweide projection (lower). I bet you didn't picture Germany being that far north. I didn't. I think I need to go back to grade two.

Hillary's 3AM Ad

What's the difference between Hillary's campaign and Ronald Reagan's? Apparently it's just two decades and two time zones. Here's Hillary's new ad:



...and now three hours later, here's Ronald Reagan's ad:



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Farm Subsidies, why do we have them?

A world bank study in 2002 concluded that trade distortions in agriculture cost the global economy about 587 billion U.S. dollars every year. That's around $100 a person, or about 1.9% of world GDP. It doesn't sound like a lot, and it's not. Equivalent to getting one years worth of economic growth for free.

The story changes when you figure out who is getting, and who is losing. Western farmers would lose, but every nation would benefit as a whole. Poor nations would benefit the most, and when you're talking about poor nations, $100 a person goes a very long way.

We got ourself a budget

It's that time of year again. Out present government has come out with a budget. The only major highlight is the $5,000 a year tax shelter for savings. Other than that there are a bunch of little payoffs to interest groups hardworking Canadians. Here are some of the highlights:

• 250 million in carbon sequestration research
• 400 million for new police
• establishment of a new crown corporation for EI benefits.
  
• funding to lower immigration wait times
• increased funding for scholarships
  
• elimination of the low emissions car rebate
• bailout money for automotive companies

A subsidy for automotive companies....I think it would be better to have Tom Paxton explain this one.

Gas Tax not big enough

Here's the trend in oil prices:




And here is U.S. the carbon emissions trend:



What's my point? If you want real reductions in carbon emissions you're going to have to create a carbon tax much greater than what B.C. has planned. People just don't respond to price changes enough for a 11 cent raise in gas prices in the next decade to make any difference. The day after the government came out with this plan gas prices shot up 6 cents, all on their own. The plan may be a step in the right direction, but it's a pretty small step.