Sunday December 4, 2016
Do you think it will? What do you think the consequences might be? People who feel themselves being immiserated, I would note, are often people who make more narrow and less generous choices politically and socially. I hate to raise the spectre of the 1930s gratuitously, but are we in fact heading for an epoch like this? (And then what next?)
Saturday December 3, 2016
Factory workers should be cheering. Donald Trump, actually living up to a campaign promise, has been badgering corporate America to keep manufacturing jobs at home. On Thursday, Trump announced that Carrier Corp. will maintain about 1,000 jobs in Indiana rather than shift them to Mexico. He has prodded Apple Inc. to build plants at home rather than outsource to China. And he has taken credit (dubiously) for rescuing a Ford Motor Co. factory in Kentucky.
Many of you are probably saying: Hey, why haven't we done this sort of thing all along? Finally, we've got a tough guy in the White House who can stop those fat cats from moving our jobs overseas!
The problem is that Trump's bullying will undermine the rule of law -- and ultimately prove detrimental to the U.S. economy. We know this because he's far from the first government official to try such meddling. In Japan, bureaucrats were once famous for it. And the results there should serve as a warning.
During Japan's high-growth decades, its bureaucrats interfered in the economy in ways big and small. One of their favorite methods was to issue missives known as "administrative guidance." Such directives usually had no force of law, and they weren't proper regulations. The bureaucrats were trying to control business decisions in areas where they lacked formal authority. Companies very often abided by this guidance anyway, however, because if they didn't, they knew the bureaucrats could find some way of punishing them -- for instance, by blocking necessary raw materials or withholding a critical permit.
Japan's bureaucrats believed, much as Trump seems to now, that their actions protected the greater interests of the nation by controlling the self-serving motivations of individual firms. And when Japan was booming, they won kudos from analysts who saw their economic stewardship as a key factor in the country's success. Some even advocated that the U.S. emulate their state economic management to become more competitive.
But administrative guidance soon became part of a wider system of government interference that ultimately proved Japan's undoing. In effect, the practice created two sets of books -- one official, one unofficial. Since the latter was informal, firms had no real recourse to challenge it. That allowed bureaucrats to wield ever more influence. They sometimes employed their guidance to circumvent market forces -- for instance, to form production cartels or impede foreign companies, which limited competition and protected weak firms. Even consumers complained that the web spun by the bureaucracy was hiking the cost of living to exorbitant levels.
Industrial Strategy is making a comeback. One of Theresa May's first acts as prime minister was to create a new "Department for Business, Energy and Industrial Strategy." That may sound impressive, but history is littered with equally well-intentioned but unsuccessful industrial strategies. For every case of success one can find more than one case of failure.
Previous attempts at industrial strategy in Britain include disastrous interventions during the 1920s and 1930s. An “Industrial Transference Scheme,” aimed at moving unemployed industrial workers to new jobs in expanding regions. Other policies sought to encourage mergers to help “rationalize” industry and exploit economies of scale, all with the aim of catching-up with the U.S. From 1932, a 10 percent general tariff on imports (later raised to 20 percent) was imposed. The policies arguably provided some short-term relief, but they stored up competitiveness problems for the future.
New interventions followed World War II: more state-supported mergers in everything from shipbuilding to computing, industrial subsidies, a public campaign to "buy British", a policy to create "national champions" and nationalization. The result was a 50 percent Anglo-German productivity gap and a rapid decline in Britain's share of world manufacturing exports to 9 percent by 1973 from 25 percent in 1950. By the end of the 1970s, a shakeout of inefficient resources was required, one which set the stage for Margaret Thatcher's showdown with the trade unions.
Most if not all of these past strategies would today run afoul of the European Union's state aid rules or the World Trade Organization's Agreement on Subsidies and Countervailing Measures. Subtler tools, however, remain, including support for research and development and support for companies in declining regions, policies that most economists feel are justified by “market failures.” But what is often forgotten is that a similar defense was used in the past to justify all other kinds of interventions. Getting it right is no easier today.
I’m finding it hard to see that anything will happen to justify the massive effort involved. The Poles and other EU citizens whose presence was the biggest single justification for Brexit won’t go away. On the contrary, it seems pretty clear that all EU citizens will get permanent residence, even those who arrived after the Brexit vote. Even with a hard Brexit, the benefits of consistency with EU regulations will be overwhelming. The terms of any trade deal with non-EU countries won’t be any better than the existing EU deals and probably worse.
Even symbolically, what’s going to happen? Typically, national independence is marked by a ceremony where the flag of the imperial power is lowered, and the new national flag is raised. But, from what I can tell, the EU flag is hardly ever flown in the UK as it is. The same for national currency, passport, official languages and all the other symbolic representations of nationhood.
So, after a successful Brexit, Britain will be a little poorer and more isolated than before, but otherwise largely unchanged. Will that count as success in the eyes of those who voted to Leave. I don’t know. Maybe those closer to the action could comment.
In a surprise situation I was with my birthdaying children at a comedy performance and an 'Ugly Sweater' house party in another province. We have had storms so many weekends that this was the right time for me to go away.
The president of the Canada Mortgage and Housing Corp. is warning against an “us versus them” mentality in Vancouver, where he says foreign buyers are not the major factor driving unaffordability.
Evan Siddall delivered a pointed speech on Wednesday to the Greater Vancouver Board of Trade, where he said housing should not become a wedge that divides newcomers from long-time residents.
“When a white person buys a house, we don’t notice. When somebody of a different colour does, we do. That’s not good economics,” he said.
Vancouver’s skyrocketing housing prices have increasingly been blamed on foreign capital flowing from China. The British Columbia government introduced a 15-per-cent tax on foreign buyers in July in response to those concerns.
Asked by reporters whether he believed racism was playing a role in the housing debate, Siddall said he wouldn’t use such a “strong term,” but the contrast between “us and them” was a factor.
Until Thursday, Sandy Chen and Henry Zhou ran a convenience store on Toronto’s Queen Street West. As the neighbourhood around them went from seedy to artsy to trendy, their Queen’s Grocery & Variety at the corner of Queen and Lisgar streets remained stubbornly the same.
Year after year, day after day, they stood sentry behind the store counter, cheerfully hawking (as the sign outside proclaimed) “pops, snacks, ice creams, ATM, TTC, Lotto” and other necessities of urban living.
But cities are always evolving and even Queen’s Grocery couldn’t resist forever. Real estate values have soared on Queen, one of the hottest streets on the continent. Someone bought the building from their old landlord last spring. Faced with a doubling of their rent, the couple, now in their 50s, decided to wind up the business that sustained them for 17 years.
As they prepared to close on Wednesday, a handwritten sign announced “Everything must go!!!” Inside the store, already half empty, Ms. Chen was slashing prices and giving lots of stuff away free. The sound of hammering and drilling came through the wall as renovators encroached. A contractor who looked in said the space would become (what else?) a vegetarian restaurant.
It is a process that is underway on city streets from London to Chicago to Shanghai. Rundown downtown neighbourhoods are reviving. New money and new blood is rushing in. The local hardware becomes a yoga studio, the greasy spoon a coffee bar. This stretch of Queen used to boast two car-wash joints, now priced out and long gone.
With the never ending problems of balancing the TTC’s budget, the question of trimming or eliminating various forms of fare subsidy are back on the table. This shows up as a quick fix to revenue problems with the assumption that “if only riders paid more, there wouldn’t be a problem”. The target group varies from time to time, but the premise is the same – somebody is freeloading and “my tax dollars/fares” should not be paying their freight.
A basic problem with this argument is that it will not fix the revenue shortfall permanently, only increase the cost of using transit by whichever group is targeted. If, for example, all discount fares were eliminated in 2017, we would be right back at the same position in 2018 wondering how to deal with increased costs, but without that convenient list of scapegoats.
A quick review of the “concession fares” is in order to put the question in context.
•Adults who are willing to purchase tokens up front (or preload their Presto cards) get a discount relative to riders who pay cash.
•Adults who want to prepay even more can purchase daily, weekly or monthly passes which cap their costs within a time period.
•Special passes and validation stickers are available to extend the range of services covered by adult passes to premium fare routes and to other transit systems.
•Daily pass holders get a special “family” deal on weekends and holidays when up to six people, maximum two adults, can travel on the pass.
•Monthly pass holders can obtain various extra discounts based on a commitment to buying 12 months’ worth of transit (the Metropass Discount Plan or MDP), and bulk-buy discounts are available to organizations that resell passes (the Volume Incentive Program or VIP).
•A Convention Pass is available to allow for bulk purchase of transit service for large groups at a price considerably below the cost of a day pass.
•Students and seniors have passes priced at a 20% discount from adult passes, and MDP pricing provides for a further discount. Cash and ticket fares are discounted about 33% from adult rates.
•Children ride free.
•A limited number of designated groups (the blind and war amputees) travel free.
•WheelTrans users are entitled to be accompanied by a Support Person at no extra charge.
A $4 million lighting makeover is dialling up the wow factor of Niagara Falls at night.
Officials say energy-efficient LED lighting unveiled Thursday will provide brighter and more robust colour than the halogen technology that's been used to cast the Falls in rainbow hues after dark for the past 20 years.
The Niagara Parks commission streamed the event live.
The light beams emanate from banks of spotlights on the Canadian side of the Falls, lighting up the Horseshoe and American Falls that, along with the Bridal Veil Falls, make up the bi-national tourist attraction.
The Falls were lit for the first time in 1860 with 200 lights like those used to signal for help at sea. Electricity was first used in 1879. The Illumination Tower where most of the lights are located was built in 1899.
Jim Munro, who died suddenly at his Victoria home on Nov. 21 at 87, created one of the world’s great bookstores in a city of fewer than 400,000 people.
Munro’s Books, with its beautiful historic interior, carefully selected stock and storied staff and service, is a destination for bibliophiles. Earlier this year, National Geographic listed it as No. 3 on a list of the world’s top 10 destination bookstores. That was only the latest in a string of accolades from across Canada and around the world.
But in Victoria, Mr. Munro was much more than a store owner, even a celebrated one.
Mr. Munro did things. When he saw problems he brought people together to fix them. He pushed projects that he believed mattered to the community, from heritage conservation to the arts. Stylish, with a tidy white beard and sharp blazers, smart, generous, modest and charming, Mr. Munro was very much at the centre of life in Victoria.
“He had friends in all ideologies and parties and sectors,” says Dave Hill, who spent 38 years working with Mr. Munro. Mr. Munro’s broad personal interests connected him with a wide range of people – including owners of small businesses, writers, artists, musicians – and his enthusiasm helped bring them together, Mr. Hill says.
- At Apostrophen, 'Nathan Smith talks about how he made a tradition out of Christmas tree ornamentation over the past twenty years.
- blogTO notes that Toronto's waterfront has major E Coli issues.
- Crooked Timber notes the potential for the recent by-election in London, fought on Brexit and lost by the Tories, to mean something.
- The Dragon's Gaze reports on a search for radio flares from brown dwarfs.
- The Dragon's Tales notes that China has been installing ecologies on its artificial South China Sea islands.
- The Everyday Sociology Blog considers what it means to be an ally.
- The LRB Blog looks at the complex peace negotiations in Colombia.
- The Map Room Blog shares a map of American infrastructure.
- Marginal Revolution notes a one-terabyte drive passed from person to person that serves as a sort of Internet in Cuba.
- Towleroad notes a film project by one Leo Herrera that aims to imagine what prominent AIDS victims would have done and been like had their not been killed by the epidemic.
- The Volokh Conspiracy notes the complexities surrounding Brexit.
- Arnold Zwicky has had enough with linguistic prescriptivism.
- A bit more detail (Randy MacDonald)
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