There is no good reason to maintain the government monopoly known as The Newfoundland Labrador Liquor Corporation. It only enriches a tiny minority at the expense of the vast majority. It is an assault on freedom and just another example of government force.
First, the price. NLC charges about 52% excise tax on alcohol. This varies by product, but this is the average. On TOP of this, consumers are charged an additional 13% of "normal" taxes. Meaning, right off the bat, you are paying more than double for your alcohol. This is enough of an argument for why alcohol taxes are bad. It rips off consumers. People have limited money, and when a violent, coercive organization FORCES people to pay more for the products they want, it hurts them. They cannot pay for a vacation or a house renovation, or food as easily, because the price of goods they buy is artificially raised. This lowers their quality of life.
Compare this to the United States. There, the average excise tax on beer is a mere 10%! Americans don't have to break the bank to buy a 12-pack. A case of beer that here costs $25, there would probably cost about $15. The American can go to a movie, then come home and enjoy some beer. The Canadian, on the other hand, can only afford the beer.
Some people claim taxing alcohol is good because it recoups some of the cost incurred by government for having to deal with the negative externalities caused by heavy drinkers. For example, heavy drinkers are involved in accidents or require medical assistant and this costs the government. So in order to recuperate lost money, the government adds a tax. However, according to the CATO Institute, a 1989 study showed this would only justify an excise tax of a few percentage points, not 52%!
Another argument put forth is that higher alcohol prices will discourage binge drinking. There are several problems with this reasoning. First of all, once again the majority is being punished for the sins of the minority, a philosophically unjustifiable position to take. Secondly, studies have shown binge drinking rates in Canada to be the same as the United States, even though Canada has significantly higher average prices. It would seem the price of alcohol does not affect binge drinking rates.
Philosophically I believe each individual is responsible for himself and that I am not guilty of someone's else's sins nor should I pay for them. Ultimately high alcohol taxes hurt people like me. To be honest, I haven't bought an alcoholic product in years, and part of the reason is I cannot afford to spend that much money. I am not a teetotaler.
But another aspect of the NLC that I find both annoying and comical is how seriously the people in the organization see themselves. Everything is so "professional". They spend millions of dollars on marketing and advertising. They conduct studies and use focus groups. I have first-hand knowledge of many of the things they do in this area. But they are a MONOPOLY.
It's comical to me because it reminds me of a child who dresses up in his daddy's suit and thinks he is a big business executive. If the NLC was exposed to any real competition, they'd be eliminated before you could say "excise tax". It's easy to appear as a strong, professional organization when you're the only game in town and the police will shut down anyone who tries to compete. I love, for example, the advertising which proudly proclaims you can save $1.50 on a $60 bottle of alcohol which should cost $20.
The whole operation is such a charade. Marketing studies, focus groups, telephone polling, etc, etc. is just so vacuous when you're not even a business, but rather a government monopoly. I realized perhaps they are afraid. Afraid enough people will wake up and realize they are being gauged by these wannabes. If they woke up, their entire mafia operation would be exposed for what it is.
On top of that, they are building an enormous monstrosity near Robin Hood Bay Dump. At least the location is appropriate, given the garbage we put up with from them. This monolithic structure does not contain product or distribution, it is just a huge number of offices, paid for by our excessive taxation.
Low level cashiers at the NLC are usually paid double what someone with a similar job and skill level is paid in the real world. They are often teenagers. Is this fair to hard-working teens who do not work there? Don't get me wrong, I'm all for people earning as much money as they can, and I certainly do not blame anyone for wanting to work there, but should money be stolen from law-abiding citizens to pay for this? I do not think so.
But that's not the half of it. The teens may be making $20 per hour as cashiers, but the real waste is going to the dozens upon dozens of managers and executive who are "playing business" like a child would play house. Any "economic" benefit which may be derived from having a government-run monopoly evaporates when the people in this monopoly pay themselves handsomely and erect giant structures in which to do business.
The NLC is nothing more than legalized theft which hurts the people of the province.
Sources:
http://www.faslink.org/Frequency_of_drinking.htm
Sunday, September 15, 2013
Thursday, August 22, 2013
Women in Politics
I was just listening to a CBC program about women in politics. As usual, the theme was we need more women in politics, but the question was how do we achieve that.
To start with, it doesn't matter if my overlord is a male or female. What I care about is the restriction of my economic and personal freedom. But assuming we need politicians, why do we need more women in politics? I don't see it as a necessary conclusion.
If there is a particular characteristic of women that people want in a politician, does this have more to do with their gender or their political belief system? For example, in our Canadian parliament 16.9% of Conservatives are women compared 17.6% of Liberals. Women are equally represented on both parties. Therefore, it does not seem clear that women represent more a certain ideology than men.
Plus, if you want a certain ideology represented, wouldn't it make more sense to vote for the party or candidate who represents it, rather than voting for a woman hoping she does?
Many will say that women are less divisive and more conciliatory and therefore must be represented more because some prefer this type of politic. I would repeat what I said earlier: if you want a conciliatory candidate, vote for one, don't vote for a gender hoping that's what you'll get.
In any event, look at some famous female politicians and tell me if they are less controversial and more conciliatory. Think of Sarah Palin, Margaret Thatcher, for example. These women had two things in common: they were not conciliatory, and they are/were either loved and hated. Any politicians, male or female, who is too "nice", is usually not very well known or successful.
But the one thing people rarely consider is: what do people actually want? We have a democratic system where we vote for our leaders. Women are free to run just like men. Yet often the electorate chooses more men. If one believes in the values of a democracy, then you cannot slap the collective public on the wrist for "making the wrong decision". Who are YOU do decide what the RIGHT decision is? This is not a dictatorship.
Many claim that women don't have the same access to becoming a politicians because of family issues. Once again, because I believe in human freedom, I hate to say it, but this is a personal choice. Families don't arise accidentally. They are a deliberate choice. Women can choose to have and raise a family, and this will limit their options. Hopefully they will recognize the benefit of having a family entails a cost, but also provides benefit. Some say men should do more. If a woman feels that way and wants a man to contribute 50% to housework, then she should seek out such a man.
It's unjust for a woman to steal money from me to provide her with free daycare simply because she made certain life choices. Would we have sympathy for a man who agrees to do 90% of the housework and then runs for politics? Would we say we must provide him with a free babysitter? If so, I suggest you go ahead and provide this service to politicians who need it.
Choices have consequences and I should not be forced to bear the cost against my will. Many people have many life situations they must deal with, but who should pay the price? Of course, they should, or their family or friends. It's about voluntary interaction. Especially when those choices are freely made.
Finally, I would think many women would not want any unfair advantages provided to them at others' expense. Where is the sense of accomplishment? If a woman makes it to a political career, but only because she was the recipient of all kinds of affirmative action and government handouts, does it carry the same level of pride as if she had accomplished it on her own? I doubt it.
To start with, it doesn't matter if my overlord is a male or female. What I care about is the restriction of my economic and personal freedom. But assuming we need politicians, why do we need more women in politics? I don't see it as a necessary conclusion.
If there is a particular characteristic of women that people want in a politician, does this have more to do with their gender or their political belief system? For example, in our Canadian parliament 16.9% of Conservatives are women compared 17.6% of Liberals. Women are equally represented on both parties. Therefore, it does not seem clear that women represent more a certain ideology than men.
Plus, if you want a certain ideology represented, wouldn't it make more sense to vote for the party or candidate who represents it, rather than voting for a woman hoping she does?
Many will say that women are less divisive and more conciliatory and therefore must be represented more because some prefer this type of politic. I would repeat what I said earlier: if you want a conciliatory candidate, vote for one, don't vote for a gender hoping that's what you'll get.
In any event, look at some famous female politicians and tell me if they are less controversial and more conciliatory. Think of Sarah Palin, Margaret Thatcher, for example. These women had two things in common: they were not conciliatory, and they are/were either loved and hated. Any politicians, male or female, who is too "nice", is usually not very well known or successful.
But the one thing people rarely consider is: what do people actually want? We have a democratic system where we vote for our leaders. Women are free to run just like men. Yet often the electorate chooses more men. If one believes in the values of a democracy, then you cannot slap the collective public on the wrist for "making the wrong decision". Who are YOU do decide what the RIGHT decision is? This is not a dictatorship.
Many claim that women don't have the same access to becoming a politicians because of family issues. Once again, because I believe in human freedom, I hate to say it, but this is a personal choice. Families don't arise accidentally. They are a deliberate choice. Women can choose to have and raise a family, and this will limit their options. Hopefully they will recognize the benefit of having a family entails a cost, but also provides benefit. Some say men should do more. If a woman feels that way and wants a man to contribute 50% to housework, then she should seek out such a man.
It's unjust for a woman to steal money from me to provide her with free daycare simply because she made certain life choices. Would we have sympathy for a man who agrees to do 90% of the housework and then runs for politics? Would we say we must provide him with a free babysitter? If so, I suggest you go ahead and provide this service to politicians who need it.
Choices have consequences and I should not be forced to bear the cost against my will. Many people have many life situations they must deal with, but who should pay the price? Of course, they should, or their family or friends. It's about voluntary interaction. Especially when those choices are freely made.
Finally, I would think many women would not want any unfair advantages provided to them at others' expense. Where is the sense of accomplishment? If a woman makes it to a political career, but only because she was the recipient of all kinds of affirmative action and government handouts, does it carry the same level of pride as if she had accomplished it on her own? I doubt it.
Tuesday, August 20, 2013
Public schools
Unbeknownst to some, one of the main reasons for public schools was assimilation. This is especially true in the United States. Advocates of public schools wanted to create a homogenized public who shared the same values and the "American way". This movement became especially important when there was a large influx of Irish and German immigrants. They were concerned that these Irish Catholics and Germans could not assimilate into American Protestant culture.
In Oregon, the governor went so far as to try to ban parochial (Catholic) schools altogether. Fortunately, this case went to the Supreme Court where they ruled it was unconstitutional.
In Oregon, the governor went so far as to try to ban parochial (Catholic) schools altogether. Fortunately, this case went to the Supreme Court where they ruled it was unconstitutional.
Low Cost Housing and Strict Zoning are not compatible
Dennis O'Keefe is once again running for the position of mayor of St. John's, Newfoundland. His only challenger is the nearly ideologically-identical Sheilagh O'Leary. If you go to her website, you'll find she never mentions her last name anywhere. I guess she is trying to turn her name into a sort of brand-name or something.
Anyway, Overlord O'Keefe has two desires - strict city planning, building height restrictions, minimal "urban sprawl", etc. and also affordable housing. Because he has no knowledge of economics, Dennis O'Keefe cannot see the contradiction in wanting these two things. Had he attended one economics 101 class, he would have discovered that as demand goes up, if supply stays the same, price will increase. It's the most basic economic lesson.
The fact is St. John's has some of the strictest building restrictions in a country which loves restrictions. Property values are at an all-time high. The natural desire of developers in such a context is to build skyward. The more property built on a space, the less cost per unit. Another option is to build outward, expanding the size of the city. Both of these options would decrease the price of housing. But of course, this is logical and therefore no one in city council will consider it.
One objection to unrestricted building is that the Harbour will lose its cozy fishing-village look. I mean what would happen to the enormous post-card industry if multi-colored houses weren't the only things you could see! How ugly would the harbour look with those skyscrapers. Better to keep St. John's 100 years behind everyone else. Those families who want affordable housing can live somewhere else! My nostalgia matters more!
Guess what St. John's, EVERY city in North America once looked quaint. And most cities have since embraced development and modernity.
But that's not the only thing. Buildings are subject to hundreds, if not thousands, of nit-picky regulations which stifles development. I have first-hand knowledge of a building proposal for a successful company. They complied with the height requirements, were going to build parking spaces, etc. The building design which was beautiful was not approved because it didn't look like it was from a hundred years ago. By the way, the building that currently occupied the lot was a 1960s monstrosity that was now a giant nest for birds and rodents.
I always find it strange how some people think they are so important that their "desire" to keep St. John's like a little bonsai tree is more important than people's ability to live here. How much bigger and how many more thousands of people would live here if it weren't for these control freaks.
You have a right to your own property, but not everyone else's. Many people complain about large buildings destroying the view. However, if large skyscrapers could occupy the harbourfront, many MORE people would get a spectacular view. Put it this way, if there is a height restriction of 50m and that is increased to 120m, then 140% more people will get a view of the harbour.
You can't have it both ways. You either allow people to own a home at an affordable price by increasing the supply of housing or you keep your subjective post-card worthy city going and keep the price of housing very high.
Anyway, Overlord O'Keefe has two desires - strict city planning, building height restrictions, minimal "urban sprawl", etc. and also affordable housing. Because he has no knowledge of economics, Dennis O'Keefe cannot see the contradiction in wanting these two things. Had he attended one economics 101 class, he would have discovered that as demand goes up, if supply stays the same, price will increase. It's the most basic economic lesson.
The fact is St. John's has some of the strictest building restrictions in a country which loves restrictions. Property values are at an all-time high. The natural desire of developers in such a context is to build skyward. The more property built on a space, the less cost per unit. Another option is to build outward, expanding the size of the city. Both of these options would decrease the price of housing. But of course, this is logical and therefore no one in city council will consider it.
One objection to unrestricted building is that the Harbour will lose its cozy fishing-village look. I mean what would happen to the enormous post-card industry if multi-colored houses weren't the only things you could see! How ugly would the harbour look with those skyscrapers. Better to keep St. John's 100 years behind everyone else. Those families who want affordable housing can live somewhere else! My nostalgia matters more!
Guess what St. John's, EVERY city in North America once looked quaint. And most cities have since embraced development and modernity.
But that's not the only thing. Buildings are subject to hundreds, if not thousands, of nit-picky regulations which stifles development. I have first-hand knowledge of a building proposal for a successful company. They complied with the height requirements, were going to build parking spaces, etc. The building design which was beautiful was not approved because it didn't look like it was from a hundred years ago. By the way, the building that currently occupied the lot was a 1960s monstrosity that was now a giant nest for birds and rodents.
I always find it strange how some people think they are so important that their "desire" to keep St. John's like a little bonsai tree is more important than people's ability to live here. How much bigger and how many more thousands of people would live here if it weren't for these control freaks.
You have a right to your own property, but not everyone else's. Many people complain about large buildings destroying the view. However, if large skyscrapers could occupy the harbourfront, many MORE people would get a spectacular view. Put it this way, if there is a height restriction of 50m and that is increased to 120m, then 140% more people will get a view of the harbour.
You can't have it both ways. You either allow people to own a home at an affordable price by increasing the supply of housing or you keep your subjective post-card worthy city going and keep the price of housing very high.
Monday, November 12, 2012
Good Intentions
I find it funny that some people equate wish lists and good intentions with actual results. People will sit in their armchair and declare the things people ought to have and they seem convinced that simply by uttering these words, those things will become reality. These people must think they have god-like powers. A simple utterance will change all of society and in the process change law of economics as necessary.
It is very common to hear things like "People deserve a living wage, not minimum wage", "Companies should all provide top-quality health insurance to every employee", "A car is not a luxury, it's a necessity in our everyday lives", "Let's stop using fossil fuels and change to something green like solar panels."
These declarative statements are made in a vacuum, away from pesky reality. People who simply state that these desires cannot simply appear without other consequences are someone seen as bad people.
On the other hand, people who propose such measures without doing anything whatsoever to actually make them happen, are applauded as farsighted visionaries who really care about "society".
Sensible people on the other hand recognize that in the world there are rarely absolutes when it comes to economics. In reality, everyone makes decisions based on costs and benefits. It might be nice to have solar power, but if your electricity bill goes from $120 a month to $800 a month, you may think twice.
Another point is that the do-gooders who propose these utopian ideas never also advocate freedom of choice. They will only advocate some "advancement" of society if it affects everyone the same, and it doesn't personally cost them anything. Also, some believe in the fairy tale that the "government" will pay for it so they are off the hook. Ironically, they don't realize they themselves must fund the government in the first place.
One example of this is Obama is trying to force employers to buy health insurance for ALL employees who have a certain number of hours per week. The cut-off is now 30 hours. This even applies to the jobs with the lowest wages. The owner of Papa John's Pizza said he couldn't afford it, so he will instead reduce hours of employees to perhaps 28 hours per week so they are not considered full time.
At first, the owner of Papa John's may seem heartless, but there are many things which need to be considered. The pizza business, unlike government, does not operate in a fairy tale land of rainbows and butterflies where reality changes by simply uttering words. If Papa John had to provide health insurance to even the lowest level employees, it would effectively be a major increase in minimum wage. That would dramatically increase the price of pizza. A few things would happen. First of all, he would fire a bunch of employees because as price of pizza increases, demand decreases. Those most affected would be the lowest level employees with the fewest skills. While their productivity might justify a wage of $7.50 per hour, it may not be high enough to justify $11 per hour when one includes health insurance. So now, not only do these employees not have health insurance, they don't have a job.
Ultimately when it comes to wages, any additional benefits including health insurance, employment insurance, etc. will come together to give a number. Even at minimum wage here in Newfoundland, where it is $10 per hour, a company might end up paying $18 an hour once all the additional benefits are paid for. This is the number employers look at when deciding if they need more people. Mandating additional benefits to employees raises their real wage. As the real wage is artificially inflated, demand for lower skilled workers diminishes. Certain jobs may disappear altogether.
I went off on a long tangent about wages there, but it is simply to illustrate the point that there are no government actions on the economy which have purely beneficial consequences. Every benefit has a cost. One cannot simply look at the benefit and ignore the cost. And in almost every case I've yet come across, the cost far exceeds the benefit.
Wednesday, October 24, 2012
Why Only Lower Small Business Taxes?
In watching the presidential and vice presidential debates I notice whenever they talk about lowering taxes for businesses, they are quick to point out it is for small businesses. Same thing in Canada. During political debates, they tend to focus on small businesses, while big business is vilified. It's usually said that big businesses should be taxed more because of their profits.
This position makes no economic sense to me. But maybe that's the point. It's probably just another political way of gaining support. People image small businesses as being run by ordinary folks just trying to eke out an existence. On the other hand, "big business" is run by shadowy Wall Street figures who we never see in real life who live in Bel Air Mansions and have several servants. A couple of generations ago, these guys were depicted in cartoons as very rotund men who always wore top hat and tails and smoked a cigar.
There is a HUGE flaw in this reasoning though. Think about the ordinary everyday products we buy. For example: Kellogg's cereal, Ivory soap, Hanes underwear, Cottonelle Toilet Paper, Esso Gasoline. These products are all manufactured by big businesses. Taxing these companies will only increase the price of the most common goods we buy. This will especially affect poor people who buy most of their products from large companies.
On the other hand, small businesses, especially in the United States and Canada, often produce goods which are specialty items, whether specialty clothing, unique leather bags, fancy cars, etc. Who buys these products? Rich people!
So ironically, by taxing big businesses at a high rate but letting small business off the hook, you are only helping the rich and hurting the poor. Talk about unintended consequences.
Large companies have many attractive features which should be encouraged. They are able to take advantage of economies of scale. By producing in huge quantities, they can lower the cost per unit. Processes are streamlined. Also, large companies can make huge investments in facilities which are able to produce things quicker and easier. Taxing away this money will take money away from increasing production.
Many people have a negative feeling toward the high profits many large companies seem to make. This should not be a cause for concern, however, in a free market. High profits entice competitors to enter the market. In order to maintain a high profit level, companies must be that much more efficient than their competitor. Otherwise, they will be priced out of the market.
Profits, numerically speaking, may seem high. But often profit expressed as a Return on Investment, is not so extreme. In fact, it is very often much higher for small businesses. A small business might earn a 15% ROI out of total revenue of $1 Million - in other words, $150,000. On the other hand, a large company might make only 8% ROI, but when it out of $1 Billion revenue, it comes out to be $80 Million profit. Numerically this is much bigger and seems much higher to people, but the rate of return is in fact lower.
The bottom line is, higher taxes on big businesses will not help the common man, but will indeed hurt him more.
Saturday, October 6, 2012
Who teaches our children?
Who, I ask, has the primary responsibility and duty to teach children? My answer is the parents. What's your answer? I'm willing to bet most people would not answer "a private organization with a particular agenda". Well, unfortunately for people in Canada, the latter is the case. This private organization is called a union and the vast majority of teachers, especially public school ones, belong to these.
There was a time when unions were just an economic idea for collective bargaining. It allowed groups of people to come together to get a better deal for themselves, and the theory is there is power in numbers. The workers vs. the owner is better than a single worker vs. management. That's the theory, although I do not agree with it.
Anyway, my point is that used to be the case. No longer. Unions now have official positions on countless issues. For example, they may be pro-Palestine and anti-Israel, they may be pro-gay marriage, they may be officially in favor of teaching children about all kinds of sexual perversion before the age of 10. And parents have no say. Every teacher in every public school MUST adhere to these ideologies, even if they have nothing to do with education. The union can determine who can or cannot be a member. Members dues are often used to fund many of these positions.
The idea for this article came about when I read that BC teachers are now officially opposed to the Northern Gateway Pipeline. This is the official union position. I have no idea why a teachers union would need to have a position on this in the first place, but that's how it is. They will then use this power to make sure every child is taught that the pipeline is a bad thing and they should be against it.
This does not sound like a free society to me. It sounds like a few people in charge of dictating what children will learn. Math and science typically don't have much debate. It's on these other issues which have legitimate disagreement. There should be freedom in this area. The only way to correct this problem is to allow school choice and end the enormous powerful teachers unions and their influence over children.
There was a time when unions were just an economic idea for collective bargaining. It allowed groups of people to come together to get a better deal for themselves, and the theory is there is power in numbers. The workers vs. the owner is better than a single worker vs. management. That's the theory, although I do not agree with it.
Anyway, my point is that used to be the case. No longer. Unions now have official positions on countless issues. For example, they may be pro-Palestine and anti-Israel, they may be pro-gay marriage, they may be officially in favor of teaching children about all kinds of sexual perversion before the age of 10. And parents have no say. Every teacher in every public school MUST adhere to these ideologies, even if they have nothing to do with education. The union can determine who can or cannot be a member. Members dues are often used to fund many of these positions.
The idea for this article came about when I read that BC teachers are now officially opposed to the Northern Gateway Pipeline. This is the official union position. I have no idea why a teachers union would need to have a position on this in the first place, but that's how it is. They will then use this power to make sure every child is taught that the pipeline is a bad thing and they should be against it.
This does not sound like a free society to me. It sounds like a few people in charge of dictating what children will learn. Math and science typically don't have much debate. It's on these other issues which have legitimate disagreement. There should be freedom in this area. The only way to correct this problem is to allow school choice and end the enormous powerful teachers unions and their influence over children.
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