Canadian Cincinnatus

Eliminating the long-gun registry demonstrates that the ratchet works in the other direction as well

For a long time now - since the summer of 1989 when then Progressive Conservative Justice Minister Doug Lewis wanted to ban all semi-autos - law abiding gun owners have been squeezed by a relentless ratchet, each click narrowing the rights that Canadian citizens could enjoy by yet another increment. We could fight, but it seemed that the best we could do was to delay the inevitable next click of the gun control ratchet by some finite period of time.

Until now... 

And this is the real meaning of the repeal. As I have argued before, deregistering long-guns will have little effect on established gun owners such as myself. It will incrementally decrease the amount of paperwork that I must do, but as I have already filled out the required forms, deregistering my long guns will not make my life appreciably easier. Making transportation requirements less restrictive, eliminating the orders-in-council that prohibit entire categories of firearms and decriminalizing trivial offences such as technical safe storage violations would improve my life much more markedly.

However scrapping the registry is still a giant step in the right direction because the only purpose of the long-gun registry is – as all gun owners realize – to help disarm Canadians. Once they know where all of them are, the government can gradually prohibit one class of firearm after another, until there is nothing left. And there is not a God damn thing we can do about it because they know where everything is. They are inhibited from doing this if a significant portion of the guns aren’t tracked, because each prohibition order drives the guns the government doesn’t know about even further underground (hence this last ditch effort to prohibit more stuff).

And just as importantly, the act of deregistration sets an important precedent, demonstrating to freedom loving Canadians that if they push hard enough against our effete political establishment, the ratchet can sometimes click in the opposite direction too.

 

Ambrose Evans-Pritchard’s optimism an antidote to Mark Steyn’s pessimism

I have just finished reading Mark Steyn’s latest doom-and-gloom tome, After America, whose thesis is that America is as finished, or almost as finished, as Europe. Therefore, Ambrose Evans-Prichard’s article in the Telegraph is most reassuring:

"’The US was the single largest contributor to global oil supply growth last year, with a net 395,000 barrels per day (b/d),’ said Francisco Blanch from Bank of America, comparing the Dakota fields to a new North Sea.

Total US shale output is ‘set to expand dramatically’ as fresh sources come on stream, possibly reaching 5.5m b/d by mid-decade. This is a tenfold rise since 2009.

The US already meets 72pc of its own oil needs, up from around 50pc a decade ago.”

"’Made in America, Again’ - a report this month by Boston Consulting Group - said Chinese wage inflation running at 16pc a year for a decade has closed much of the cost gap. China is no longer the "default location" for cheap plants supplying the US.

A ‘tipping point’ is near in computers, electrical equipment, machinery, autos and motor parts, plastics and rubber, fabricated metals, and even furniture.

‘A surprising amount of work that rushed to China over the past decade could soon start to come back,’ said BCG's Harold Sirkin.

The gap in ‘productivity-adjusted wages’ will narrow from 22pc of US levels in 2005 to 43pc (61pc for the US South) by 2015. Add in shipping costs, reliability woes, technology piracy, and the advantage shifts back to the US.

The list of ‘repatriates’ is growing. Farouk Systems is bringing back assembly of hair dryers to Texas after counterfeiting problems; ET Water Systems has switched its irrigation products to California; Master Lock is returning to Milwaukee, and NCR is bringing back its ATM output to Georgia. NatLabs is coming home to Florida.

Boston Consulting expects up to 800,000 manufacturing jobs to return to the US by mid-decade, with a multiplier effect creating 3.2m in total. This would take some sting out of the Long Slump.”

This alternate viewpoint illustrates a serious problem that every forecaster faces. What determines the future is not one particular set of physical tendencies but the vector sum of all of them. While Mark Steyn listed many trends in his book, he did not mention the increased competetiveness of American manufacturing or the US’s increasing energy self-sufficiency. These are important factors that should not have been left out.

The problem I have with Steyn is not in any of his particular concerns. In fact, most of them are my concerns. I also agree with most of the solutions he suggests. The problem I have is that his examples are biased almost entirely towards the negative. Few positive developments (such as the ones cited by Evans-Pritchard) are ever mentioned. The cumulative effect is a very distorted picture of reality. What’s worse, Steyn dresses his book up as a prediction of America’s fate.

Let me tell you something as somebody whose profession life for a long time involved making accurate and specific predictions about the future: it’s hard to do. Developing a forecast requires one to take into account every physical trend in existence, not just those that are occupying your thoughts or the headlines at the moment, but all the little things that have the potential to grow into world-shaping trends, like the proverbial butterfly in India that creates a hurricane two weeks down the road in the Carribean by flapping its wings. For instance, take Deng Xiaoping’s economic liberalization in China. In the late 1970’s, he allowed Chinese peasants to sell their own wares at local markets. Who at the time would have though that 30 years on, a process designed to relieve the hunger of Chinese peasants would accumulate enough economic power to bankroll America’s deficit? This example illustrates that our ability to predict the future is very limited and degrades very quickly as the forecast date recedes. This means that any forecast of human affairs 20 years out is likely almost totally worthless, except in very general terms. Mark Steyn seems unaware of any such limits on human reasoning.

Which is a pity, because After America is an otherwise a good book that shines a light on many of today’s problems and offers constructive solutions. It’s just not a credible prophesy.

 

Fortune Magazine: “Europe should embrace failure”

Daryl Jones, in Fortune magazine argues that the way out of Europe’s debt crisis is for indebted banks and countries to be allowed to fail: 

“Failure is not a bad thing. Sure, losing or failing doesn't give you the warm fuzzies inside, but failing and adapting ultimately sets you up for greater success.”

“As it relates to Europe sovereign debt, the one solution that has not been seriously considered is failure. Instead, the key solution from almost every Eurocrat and talking head, is to continue to support and promote a broken banking system and failed monetary union. There are other possibilities: let Greece fail, let other sovereigns fail if they can't get their house in order, and let heavily exposed banks fail.

The validation of the failure strategy at least partially comes in comparing the credit default swaps of Italy, Portugal and Ireland from July 1, 2011 to today. Respectively, Italian swaps are up 140%, Portuguese up 38.2%, and Irish down 3.2%. Now to be fair, Ireland hasn't failed, but three of its largest banks, Allied Irish, Irish Life & Permanent, and Bank of Ireland have experienced ‘credit events’ and, as a result, Ireland's credit worthiness has improved, on the margin.”

Add to Ireland my homeland of Estonia. It had a massive real estate bubble that burst in 2008. But because the country is so small and unimportant, it received no bail-out, everything was allowed to fail that couldn’t survive on its own, and as a result, it currently has the highest growth rate in Europe – 8.2% - with the only budget surplus of any EU government. Another example is Iceland. Early on in the crisis you heard a lot about it and its credit bubble. But because it wasn’t plugged into the Euro, nobody bailed Iceland out. As a result, what needed to fail, failed and Iceland is now doing fine.

A counterexample is Japan, which is has been stagnating for almost two decades after its real estate bubble burst. Why is it stagnating? Because nothing has been allowed to go under. Zombie banks lumber on like Frankenstein’s monster, kept alive by the IV drip of Keynesian spending. Oh yeah... Japan has racked up a public debt to GDP ratio of almost 200%.

I think because it is a painful thing, the regenerative powers of bankruptcy are often underestimated. Bankruptcy has an important role to play in the marketplace, particularly in helping an economy recover from a crash. One key ingredient in any economy is capital. How healthy an economy is, is determined at least partially by how well capital is allocated. Crashes often happen because of capital misallocation. Think of all the money sunk into subprime mortgages in the US. The money sitting in these mortgages was unproductive because a large percentage of the people who took out those mortgages had no hope of paying them back. The Eurozone equivalent of the subprime mortgage is the Greek government. Money sitting in Greek bonds is simply wasted because it could be better spent on other things.

How do you get out of this problem? The first rule of getting out of a hole is to stopping digging it deeper. When Germany approved a 350 billion Euro bailout to Greece earlier this summer, that meant 350 billion more Euros are now unavailable for productive investments. What could be accomplished with 350 billion Euros? I bet Steve Jobs would have had some interesting ideas.

One of the advantages of a crash-induced wave of bankruptcies is that it resets the bad debt counters to zero. People with subprime mortgages have no home; people who own Greek debt or Lehman Brothers stock or GM stock get a haricut. But the flip side is that money is only an indicator of wealth. It is not wealth itself. All that has happened is that the monetary value of individuals and corporations has now been better matched with their actual worth. The information content of money has increased because money becomes more correlated with value. Thus investments can be made more intelligently. 

Except when everything that should fail is bailed out. When governments prop up teetering enterprises and failing governments, the transfer of wealth from productive activities to unproductive activities accelerates and the information content of money degrades further. Thrifty and productive Germans get poorer while the lumbering Greek leviathan consumes ever more resources; productive American citizens (and American citizens not yet born) get hobbled by yet more government debt in order to keep wealth-consuming Wall Street zombie banks staggering along. As the productive are increasingly hobbled - so are the unproductive, who are trapped in a spiral of onerous debt repayments. The result is universal stagnation.

In Obama’s America… and in Eutopia… and in Japan. 

 

George Will: “Conservatives should rejoice” over Occupy Wall Street movement

In a perceptive article, George Will makes the following point about the ultimate consequences of the Occupy Wall Street movement:

“Conservatives should rejoice and wish for it long life, abundant publicity and sufficient organization to endorse congressional candidates deemed worthy.”

“From 1965 through 1968, the left found its voice and style in consciousness-raising demonstrations and disruptions. In November 1968, the nation, its consciousness raised, elected Richard Nixon President and gave 56.9 percent of the popular vote to Nixon or George Wallace. Republicans won four of the next five presidential elections.”

Will makes many interesting points in this article so please go and read the whole thing, but it seems to me that this is his most important point: the Occupy Wall Street (OWS) movement is a gross political miscalculation by the left.

Many commentators on the left note that OWS is the left’s equivalent of the Tea Party, clearly assuming that, as the Tea Party propelled the GOP to midterm victory in November 2010, OWS may similarly propel the Democrats to victory next November. As George Will pointed out, this hope is completely misplaced.

They are wrong because the Tea Parties, contrary to the vicious MSM demonization campaign, are infused with middle class sensibilities. The Tea Partiers were orderly, polite and cleaned up after themselves. Their ranks are composed of working people, or the recently unemployed who only want honest work. In contrast, the OWS is composed of anarchists, communists and other extremists who revel in violent confrontation and clearly enjoy subverting public order with activities like illegally occupying public spaces for extended periods. Ordinary nonpolitical people can sympathize with Tea Partiers but recoil in horror at the ostentatious radicalism on display at the OWC ‘sit-ins’. I think the average nonpolitical American has the same sentiments about OWC that boxer Joe Louis had about the Third Reich when he publicly told Adolph Hitler, “there is nothing wrong with America that you can fix.”

If you don’t believe me - or George Will - or Joe Louis - then perhaps you should reread Saul Alinsky. He made the same point in Rules for Radicals. He thought the long hair, the flag burning and dirty clothes were about the worst things the left did to themselves. Right away they drove a wedge between themselves and The People. No wonder they lost, Alinsky concluded. 

That the Alinskyite, Barack Obama, does not see this and instead appears to welcome the coming of the OWC movement is a testament to the fact that he has completely lost whatever political touch that he once had in 2008. 

 

President Obama wanted to apologize to Japan for Hiroshima and Nagasaki but the Japanese government wouldn’t let him

Wikileaks, the gift that keeps on giving: According to Investor’s Business Daily:

“Another stop on the tour was in Japan, where Obama in November 2009 bowed to the emperor, something no American president had ever done. It could have been worse if plans to visit Nagasaki and Hiroshima to apologize for winning the war with the atom bombs had come to pass.

A heretofore secret cable dated Sept. 3, 2009, was recently released by WikiLeaks. Sent to Secretary of State Clinton, it reported Japan's Vice Foreign Minister Mitoji Yabunaka telling U.S. Ambassador John Roos that "the idea of President Obama visiting Hiroshima to apologize for the atomic bombing during World War II is a 'nonstarter.'"

The Japanese feared the apology would be exploited by anti-nuclear groups and those opposed to the defensive alliance between Japan and the U.S.”

While I normally refrain from bandying disparaging terms like ‘idiot’ around when describing important political leaders, I think Rand Simberg was entirely appropriate when he titled his column “Just In Case You Didn’t Think That The President Is An Idiot”. The fact that his apology was nixed by its intended recipient is the crowning folly: impotence and diplomatic incompetence on top of decadent self-hatred. 

January, 2013 can’t come soon enough.

 

Steve Jobs: “the right kind of tyrant”

In an article entitled, “The Right Kind of Tyrant”, Rob Long had this to say about Steve Jobs:

“When Cupertino quaked under Tyrant Steve, no one needed to worry about the culture of the place. The culture was simple to understand: fear and unforgiving standards. It wasn’t an easy place to work, but that was part of the appeal: Apple’s engineers and designers didn’t love coming to work despite Steve’s insane temper and unpredictable rants, they loved coming to work because of those things. Because they knew Steve was trying to do great things, trying to revolutionize an entire market, trying to put incredible technology into a beautiful package and into the hands of ordinary people. 

And that’s impossible to do without being ‘demanding.’”

I think this is about right with regard to Steve Jobs, but it got me thinking about ‘the wrong kind of tyrant’ and what precisely the difference between the two is. The reason I pose this question is that in my working life I have occasionally encountered bad bosses. And if you haven’t been self-employed for your entire working life, you too have worked in hierarchical organizations where bad tyrants outnumber the good kind by a lopsided margin.

So what is the difference between the two? As Rob Long points out, it is not good manners. Chair throwing fits, apoplectic rants, firing people on the spot in elevators – it sounds like the wrong kind of tyrants I have worked for could have taught Steve a thing or two about acceptable behaviour.

No, I believe the difference is purpose. Steve Jobs pushed people to come up with better products, to serve Apple better, to strive for excellence; the wrong kind of tyrant has entirely different goals, basically himself. He wants people to suck up to him, to agree with his BS, to help him climb the corporate ladder and to slavishly carry out his nonsense schemes obediently to the letter even though anybody with an IQ greater than a monkey knows they are stupid plans fated to fail (“that’s not the right attitude for a team player, now is it?”). Their assignments are soul-destroying, not because they involve abuse, but because their intended goals are ignoble and everybody knows it. The abusive manager may think he can bamboozle his people with his bafflegab but if he believes that (and he usually does), he is fooling himself. His employees can sense when they are being misled; they can smell it. And those workers, who are too dull-witted to figure it out themselves, will have it all helpfully spelled out for them by those who have. 

This is a point that trade union leaders never seem to comprehend: regardless of what they may say at union meetings, people really do want to work hard - but only for a worthwhile goal. People desire this because our daily work is what provides most of us with our main purpose in life (outside of our family life). The more noble our endeavors, the more satisfied we are. Helping a puffed-up buffoon get a promotion is not a worthy goal for anybody but a craven lackey. But working towards a productive end is profoundly satisfying. And a leader who demands excellence from us will be respected and admired - even if he is abusive – because, by pushing us, he is helping us have a richer and more meaningful life.

That’s why good tyrants like Steve Jobs are remembered with fondness and respect, while bad tyrants ignominiously fade away into dust.

Steve Jobs, rest in peace.

What Tim Hudak should have promised voters in the recent Ontario election: painful budget cuts

Contrary to the received wisdom of small-c conservatives, Progressive Conservative leader Tim Hudak didn’t do all that bad: the Ontario PC party gained 12 seats at Queen’s Park while the Liberals lost 17; the PC popular vote was only 2 percentage points lower than the Liberals (35.4% vs. 37.6); and most importantly, Hudak denied Premier Dalton McGuinty a majority. Ronald Reagan he ain’t, Mike Harris he ain’t, even Stephen Harper he ain’t, but Conservative leader Tim Hudak is nevertheless a damn sight better man than his two hapless predecessors, John Tory and Ernie Eves (which is why he should be given a chance to grow into his job).

Still, it is obvious he could have done better. Dalton McGuinty is an enormously unpopular figure who is clearly well beyond his best-buy date. The recent Ontario election was Hudak’s to lose. A decisive majority was in his grasp and he blew it.

In my opinion, Hudak’s principal mistake was that he failed to fire up his base. This is not just a feeling on my part, it is backed up by the numbers. I think my analysis, written two days before the vote, also holds up: Hudak’s campaign went too negative because he was afraid to positively state all of his platform.

Hudak was right in focusing on taxes. Dalton McGuinty is enormously unpopular because of all the taxes he has raised, such as the HST. Unfortunately, in promising to repeal a bunch of them, Hudak had a credibility problem. He didn’t come across as a serious man because his tax cuts didn’t have corresponding spending cuts attached to them. While Hudak’s strategists likely thought this was a clever move - staying clear of controversial matters in an election campaign – his people were too clever by a half. What this omission signaled to the voters was that Hudak was merely pandering to them and being less than honest. Even worse, by avoiding difficult issues, it also signaled to them that he is a coward, and not a leader.

(As an aside, Hudak’s proposed tax cuts would not have increased tax revenue as per the Laffer Curve. Tax cuts only stimulate government revenue when the tax burden of wealth creators is relieved. Cutting a consumption tax, like the HST, does nothing to stimulate the economy. The Laffer Curve effect only really kicks in when taxes on employers, investors and savers are cut.)

Want an example of a real leader? Take Paul Ryan, Republican congressman from Wisconsin District #1. Recently, he came up with the Ryan Plan for balancing the US budget. It is the only serious budget plan out there that actually takes on runaway entitlement spending (basically Medicare, Medicaid and Social Security). Is Ryan able to get away with such heresy because he represents a safe conservative district? No. Ryan is in a largely Democrat district. But early in this interview, he tells the announcer, Peter Robinson, an anecdote that illustrates his survival secret: a constituent comes up to him and says to him, “You know. I don’t always agree with what you are doing, but I can tell you are trying and being sincere. And that’s what matters to me.”

Unfortunately, in the last Ontario election, voters could not have said the same thing about Tim Hudak.

 

The Ontario riding of Pickering – Scarborough East: an anatomy of an electoral defeat

My friend, Peter, ran the numbers for the Electoral District Association of Pickering - Scarborough East, comparing the results of the recent provincial election with those of the last federal election, held earlier this summer. This is what he found:

 

Federal election (May 2, 2011)                    Provincial Election (Oct 6, 2011)

Conservatives - 19,220 votes                        PC   –       13,010 votes

Liberals   –        18,013 votes                       Liberals – 18,134 votes

NDP        -          8,932 votes                        NDP      -   6,433 votes

Green      -         1,751 votes                        Green    -  1,092 votes

 

The first thing that jumps out of these figures is that the number of Liberal votes hardly budged from one election to the next - Premier McGuinty’s candidate got barely 100 votes more than Ignatieff’s; the second is that the Ontario PC party got over 6,000 votes less than Prime Minister Harper’s Conservatives; and the third is that the rest of the parties got marginally fewer voters than they did in the federal election.

While it is possible to read too much into the behaviour of one riding, it should be noted that the Pickering – Scarborough East EDA is known as a bell-weather riding – that is, it tends to go with whomever forms the majority in Parliament.

The inescapable conclusion from Peter’s investigation is that Tim Hudak lost principally because conservative voters stayed home.

Stay tuned: in an upcoming post, I will argue what mistakes were made and what can be done to turn things around in the future.

 

The Ontario election: the contest that shouldn’t be close

I have to apologize to my dear readers for being AWOL on the Ontario election campaign up till now, even though election day is Thursday and I live in Toronto. I have tried on several occasions to write something but I just have not been able to summon the necessary enthusiasm. But guilt is haunting me, so here goes: 

This election shouldn’t be anywhere near close. Liberal leader Dalton McGuinty is a deeply unpopular, serial liar whose time was clearly up a long time ago. I believe the reason Conservative leader Tim Hudak’s campaign has gotten such little traction is because it has focussed too much on Dalton McGuinty and not enough on us. Paradoxically, by constantly attacking McGuinty, Hudak has given him a free ride.

What I mean is this: the first rule of campaigning is that you start out positive and only go negative near the end, and they broke this rule.

The positive message brands you, differentiates you from your competitors and gives people a reason to vote for you. The key to executing the positive phase correctly is to not try to avoid controversy. This is a common mistake and is what Hudak’s team did. Your message must be sufficiently controversial. This will have two effects: it will emotionally pull people who agree with you into your camp, and it will deliver people who disagree with you into the arms of your enemy. But with a judicious mix of wedge issues, the first group will be bigger than the second. I think this is what Scott Stinson was getting at when he wrote a few weeks ago in the Post that the Ontario election was “a race in need of a wedge”. 

Unfortunately, this group of supporters will not be large enough. You need to also get enough disengaged ‘moderates’. Your positive message will not reel them in. They don’t care about policies. They vote solely based on gut-feel (that is, when they bother voting at all). These people are what I call ‘naively cynical’. By this I mean, they know little about the issues but make up for it by believing that all politicians are crooks. Professing your own purity and good intentions will not impress them. You will just look holier-than-thou. What you have to do is to get them to recoil from your opponent, who they also believe is a crook. This is where the dreaded ‘American-style’ negative attack ads come into play.

The order of execution is important. The positive message must come first because the voters it works on have a much longer political memory than those who the negative attacks target. As a bonus, if you hold your attacks until the end, they do not have adequate time to respond to your allegations.

A classic example is Reagan vs. Carter in 1980. He started out positively, patiently explaining his agenda while the Democrats were screaming ‘extremist’ at him the whole time. In this phase, he ignored them. The ad with the picture of Carter kissing Brezhnev only came at the very end. A second example is Mike Harris’ Common Sense Revolution in 1995. It is amazing how well the positive-negative strategy works and how often campaigns ignore it and fail.

Unfortunately, the success of Harris’s campaign against McGuinty in 1999 (“Dalton’s not up for the job”) - which was almost entirely negative - taught his successors the wrong lesson. The reason going negative right away against McGuinty worked so well for Harris was because, by 1999, everybody knew exactly who Mike Harris was. His first term was the positive phase of that campaign. In contrast, Eves, Tory and Hudak are (or were) new and unknown and they desperately needed to define themselves.

Fortunately, Hudak did this just enough of this that he is unlikely to pull a John Tory. But still, an overwhelming victory was his for the taking. Luckily, he will likely live to fight another day, and hopefully he will have learned a lesson.