April 30, 2016

This blog is on hiatus

I'm taking a break from blogging. Check back in a few months!

April 29, 2016

Wage gap fiction

According to the Canadian Centre for Policy Alternatives (CCPA), there’s a gender wage gap in Ontario of 29.4 per cent between men and women. Because this can only be attributable to discrimination against women, the left-wing CCPA’s recent report on the matter calls for a transformation of the labour market to fix it. The Toronto Star agrees, editorializing that “Ontario needs a step-by-step plan to close the wage gap.”

Sexism isn’t the only thing to blame, the CCPA is careful to note. So are many other things that advocates of big government find loathsome: the alleged austerity agenda, the decline of unionization, and the “declining equality role of governments,” among other things. So the cure to the gender wage gap, one is left to infer, is the same medicine the left prescribes for any complaint: more government spending, more powerful unions, and maybe some societal re-education to eradicate our sexist ways. It’s a surprise they didn’t throw in a need for more wind power too, by somehow finding a way to blame the wage gap on global warming as well.

April 28, 2016

Don't limit your market!

Adam Smith wrote:
That the Division of Labour is Limited by the Extent of the Market

As it is the power of exchanging that gives occasion to the division of labour, so the extent of this division must always be limited by the extent of that power, or, in other words, by the extent of the market. When the market is very small, no person can have any encouragement to dedicate himself entirely to one employment, for want of the power to exchange all that surplus part of the produce of his own labour, which is over and above his own consumption, for such parts of the produce of other men's labour as he has occasion for.
You want the market – the people with whom you exchange – to be as large as possible.

The more people exchange, the more they can specialize, the more productive they can be, and the more prosperous society becomes.

April 27, 2016

A letter to the Toronto Sun on the Ontario Liberals' remarkable ability to accumulate debt

RE: Ontario exports its financial mess

Ben Eisen notes that Ontario’s debt has climbed to 39.6 percent of GDP. The ability to increase debt so rapidly is particularly impressive given that provincial government revenue is now 16.9 percent of GDP – up from 14.6 percent in 2003-04.

Matthew Lau
Toronto, ON

Items of interest

Don Boudreaux writes that "fair trade" is just a code word for "unfree trade."

Speaking of Don Boudreaux, it is his blog Cafe Hayek that directed me to this excellent column on the economic illiteracy of Donald Trump and his followers.

Ken Green comments on Canada's real environmental record.

Corporate welfare is always wrong

As if yet more evidence that "conservative" politicians are hostile to free markets is needed, the state broadcaster reports that Brad Wall's cabinet is handing over $3 million in corporate welfare to an online food delivery service looking to hire 300 people in the next few years.

That's $10,000 per employee, much of which will be going to training workers. To many, it may seem reasonable: $3 million for 300 jobs created. But it is not reasonable at all. Even setting aside the immorality of coercing $3 million from the public to hand over to a private company, corporate welfare is always bad policy.

April 25, 2016

A letter to the Hamilton Spectator on catastrophic climate predictions

RE: Non-linear climate emergency

Gwynne Dyer writes that people are wrong to believe climate is predictable, then goes on to make catastrophic predictions of his own. He writes that the two degree threshold “matters because at that point the warming we have already caused will trigger natural feedbacks that we cannot control.”

However, the science on the strength of feedbacks is far from settled. In fact, it has not even been determined conclusively that the net feedbacks will be positive. For example, scientists have very little confidence in the ability of models to deal with the effect of the clouds, a source of negative feedback. In 2010, a survey published by researchers with the Institute of Coastal Research asked climate scientists how well they thought atmospheric models could deal with the influence of clouds. They were asked to answer on a scale from 1 (very inadequate) to 7 (very adequate). The mean response was only 2.74. In fact, 75.8 percent of respondents answered 3 or lower.

Catastrophic climate theories are based on climate models with strong positive feedbacks. But as John Fyfe, a climate modeller in Victoria, noted two months ago: “There is this mismatch between what the climate models are producing and what the observations are showing. We can’t ignore it.”

Matthew Lau
Toronto, ON
Update: I've found a more recent survey by the same authors. In this survey, which asks the same question about clouds, the mean answer is 3.19 with 62.1 percent answering 3 or lower.

April 23, 2016

A letter to the Calgary Herald on minimum wages

RE: Meddling with wages

It is confounding that, simply because it is easier for somebody to live on $15 per hour than $12 per hour, Rachel Notley believes it is acceptable to prohibit people from seeking employment at wages below $15. This ban on lower wage employment is effectively a ban on employment for anybody whose hourly productive capacity is exceeded by $15.

Matthew Lau
Toronto, ON
Update: Calgary Herald publishes the letter on April 26.

April 21, 2016

Expensive green symbolism

As reported by National Observer, Canada's Minister of Environment and Climate Change wants the government's fleet to consist of only electric vehicles.
“We have an electric vehicle charging station at Environment and Climate Change but we should have that across the board,” McKenna told her colleagues in Parliament this week. “Our fleet should be electric vehicles.”

Whether it’s in the buildings where Canadians live or work, and how they travel between the two, the government believes these are “huge areas” that could be targeted with new rules that support efforts to slash carbon pollution, McKenna said.
But are electric vehicles actually greener?

April 20, 2016

Bill O'Reilly's nonsense economics

I generally don't place much faith in journalists' and broadcasters' understanding of economics, including those at news outlets generally regarded as conservative. The latest example of nonsense economics comes from Bill O'Reilly, who last week exacerbated my already-existing doubts in his grasp of basic economic concepts.

Here's what he said on his show on April 15:
Yes, the minimum wage should be raised in America. No one can live on seven bucks an hour.

And for those of you who say it will hurt business, so what? There has to be some kind of fairness in capitalism.

Also, if the minimum wage were, say $11-an-hour nationwide, that would give folks an incentive to work, which is what we want.