January 2008
Monthly Archive
January 14, 2008
No college economics course would be complete without Homo Economicus. He’s the the rational, self-maximizing and efficient human onto whose frame many economics principles are draped.
There’s one problem – we’re not him.
From the Los Angeles Times:
“Would you rather earn $50,000 a year while other people make $25,000, or would you rather earn $100,000 a year while other people get $250,000? Assume for the moment that prices of goods and services will stay the same.
Surprisingly — stunningly, in fact — research shows that the majority of people select the first option; they would rather make twice as much as others even if that meant earning half as much as they could otherwise have. How irrational is that?
This result is one among thousands of experiments in behavioral economics, neuroeconomics and evolutionary economics conclusively demonstrating that we are every bit as irrational when it comes to money as we are in most other aspects of our lives. In this case, relative social ranking trumps absolute financial status. Here’s a related thought experiment. Would you rather be A or B?
A is waiting in line at a movie theater. When he gets to the ticket window, he is told that as he is the 100,000th customer of the theater, he has just won $100.
B is waiting in line at a different theater. The man in front of him wins $1,000 for being the 1-millionth customer of the theater. Mr. B wins $150.
Amazingly, most people said that they would prefer to be A. In other words, they would rather forgo $50 in order to alleviate the feeling of regret that comes with not winning the thousand bucks. Essentially, they were willing to pay $50 for regret therapy.”
We’re entering an era when a lot of classical economic truisms developed in the 40s and 50s and learned by rote by generations of college kids ever since are being challenged and disproved. The most remarkable thing is that it’s taken so many decades to begin noticing the obvious. Bringing economics theorems back into the realm of reality is a breakthrough that’s long overdue.
January 14, 2008
Exit polls seem a lot more important when you’re looking at some other country’s elections.
The Washington-based International Republican Institute conducted exit polls that are said to show that Kenyan President Mwai Kibaki suffered a resounding defeat in last month’s disputed election. From McClatchey Newspapers:
“Opposition leader Raila Odinga led Kibaki by roughly 8 percentage points in the poll, which surveyed voters as they left polling places during the election Dec. 27, according to one senior Western official who’s seen the data, who spoke on condition of anonymity because of the sensitivity of the issue. That’s a sharp departure from the results that Kenyan election officials certified, which gave Kibaki a winning margin of 231,728 votes over Odinga, about 3 percentage points.
U.S. and European observers have criticized the official results, which came after long, unexplained delays in counting the votes, primarily from Kibaki strongholds. Jendayi Frazer, the assistant secretary of state for African affairs, said over the weekend that there were “serious irregularities in the vote tallying, which made it impossible to determine with certainty the final result.”
It wasn’t clear why the International Republican Institute — which has conducted opinion polls and observed elections in Kenya since 1992 — isn’t releasing its data. A spokesman for the U.S. Embassy in Kenya confirmed that a poll was conducted but referred questions to the institute, where officials couldn’t be reached for comment.”
It isn’t clear why the International Republican Institute isn’t releasing its data? Maybe if they did, John Kerry would have to finish out the remaining 11-months of the term of office that he won, according to exit polls, in 2004.
January 14, 2008
According to Newfoundland and Labrador premier Danny Williams, our Furious Leader, Stevie Harper, has disdain for Canada’s smaller provinces. From
Canadian Press:
“At one point during that meeting he said to me, ‘I don’t need Newfoundland and Labrador to win an election,’ ” Williams said Monday.
“I didn’t respond to that at the time. I let it go in the interests of having a cordial meeting. I perceived it as an attempt to bait me into confrontation during that meeting and the bait was not taken.”
A spokesman for the Prime Minister’s Office denied the premier’s accusation.
“It never happened,” Dimitri Soudas said.
Williams said smaller provinces should take note of Harper’s comment.
“If that’s his attitude and he doesn’t feel that Newfoundland and Labrador is significant because it only has seven seats, then provinces like Nova Scotia, New Brunswick and Prince Edward Island, the territories and others have to be very, very concerned if they don’t fill his political appetite,” he said.
Williams said he doesn’t expect the people in the province will vote for the Conservatives in the next election.
“I think the people of Newfoundland and Labrador will clearly state to … the Conservative Party of Canada that they’re not going to electing any candidates,” he said.
“I will be very strongly, strongly advocating that, that there be no Conservative candidates elected in this province.”
I guess Williams’ reaction is understandable. After all when a PMO staffer calls a premier a liar that can get under a guy’s skin, eh?
January 14, 2008
I wasn’t surprised to see Lorne Gunter praise Ezra Levant’s heroic performance before the Alberta Human Rights Commission last week but I found it amusing how far this rightwing nutjob would strain history to do it. From the National Spot:
“…Ezra decided to take advantage of the ancient Anglo-Saxon right to free expression and published the cartoons.
What he was reminded of, almost immediately, is that Canada is no longer an Anglo-Saxon nation. Gone is the robust belief held by our ancestors for 800 years that the citizen is sovereign, that he is free to do as he wishes unless the state can show unambiguously that there is an overriding need to limit his liberty temporarily. It has been replaced by the continental notion that nothing is allowed unless it is expressly permitted by the state. The belief that the citizen owes the government an explanation of his actions, not the other way around, has gripped our politicians, bureaucrats, judges and professors.”
Gunter’s claim that, for eight centuries, our (or at least his and, presumably, Levant’s) ancestors have robustly held the citizen sovereign, free to do as he chooses unless the state discharges some burden of proving the need to limit him temporarily exposes him as an historical charlatan, if not an ignoramus. Now I don’t know what Anglo-Saxon lineage Gunter cleaves to but I can assure him that his ancestors eight centuries ago weren’t running about thumbing their noses at their monarch and proclaiming their sovereignty as citizens. If they were, the Gunter line would have assuredly died out a long, long time ago.
As for the complaint that, in today’s Canada, “...the citizen owes the government an explanation of his actions, not the other way around,” Gunter’s remarks are surely better directed to his favourite government, the one immediately south of our own, the land of “total information awareness” and secret surveillance.
I don’t think it at all accidental that Gunter’s defence of Levant is built on a house of hyperbole and historical distortion. In fact, that’s the one thing that makes perfect sense.
January 14, 2008
The damage the madness of Robert Mugabe has caused the people of Zimbabwe at times seems almost bottomless.
Today the Zimbabwe National Water Authority announced to the citizens of the capital, Harare, and the nearby town of Chitungwiza that all water supplies will be cut off for a week. Imagine being dirt poor in the midst of an economy in complete shambles and being told that you’ll have to do without water for a week.
The government agency is blaming the water disruption on power failures at the region’s waterworks.
Waterborne diseases are already spreading through Harare and are expected to increase.
Water authority workers have told UN observers that the utility’s problems aren’t caused by power failures but the inability of the water authority to obtain chemicals to treat the water from Malawi and Zambia.
Some locals blame the problems on mismanagement triggered in 2001 when Mugabe’s ZANU-PF government replaced elected city officials with its own commission. There are reports that industrial and residential effluents are being pumped into the city’s water supply dam which might explain the discoloured water that has been coming from city taps.
January 14, 2008
Over the past several years Europe has been struggling to deal with illegal migration out of Africa. Each year, tens of thousands of migrants, many from the sub-Saharan region, have been heading north hoping to reach the shores of Europe and a new life.
For the past month reports have been coming in from all over Africa suggesting that this year is going to be different, much different. Migrants in record numbers are said to have massed in northern Africa, waiting for an opportunity to get out.
Libya is reported to be inundated with two million migrants, at least half of whom hope to make their way to the UK. Now Yemen is pleading for international aid to help with legal and illegal migrants it claims have reached 800,000, many of them who have fled for their lives from wartorn homelands.
Mass migration has been forecast for some time and is expected to continue as wars spread and climate change and desertification make parts of southern African uninhabitable. This is going to present a huge challenge for the European Union countries which are examining their options, few of them very pleasant.
January 14, 2008
No doubt about it. As far as the American lumber industry is concerned, Canada is their bitch. When Harpo’s feckless trade min, David Emerson, folded Canada’s hand and turned over to the US lumber companies a war chest in the hundreds of millions of dollars it was pretty obvious that we had just given our lunch money to the schoolyard bully. At that point it was only a matter of when, not if, they’d be back and, as expected, it wasn’t long in coming.
The US Coalition for Fair Lumber Imports, an outfit that sees fairness as an entirely one-sided issue (theirs in case you didn’t figure that out), is howling mad at Harpo’s national community development trust fund.
Although the Harpies have earmarked the meagre, one billion dollar fund for job retraining and community infrastructure programmes, America’s Big Wood is claiming that the funds will somehow be used to reduce liabilities of Canadian forestry companies in violation of the 2006 Canada-US softwood lumber capitulation pact.
Wouldn’t it be great to see Harper actually “stand up for Canada” and tell Washington to get lost? Let’s face it kids, we’re their biggest supplier of energy and the only one they can take for granted. Maybe it’s time to tweak their attitudes just a tad.
January 14, 2008
Layton says Canada should pull out, Dion says we need to find a new job, Harpo is pretty much a good Bushie “stay the course” guy. A small majority of the Canadian people want the mission to Afghanistan wrapped up.
Everybody’s got an opinion. No matter what side they’re on, I don’t know if any of us thinks the Canadian contingent in Kandahar can just pull up stakes and leave.
What would leaving Kandahar mean for Kabul, for the Afghani people and for our NATO allies (or at least the few that are actually showing up for work)?
For starters, it would leave a hole, a big hole. It would open an avenue between the unruly Pakistan tribal areas and Kandahar city. On Helmand province, it would leave the Brit’s flank exposed to the east and the Dutch flank open to the south in Uruzgan province.
One way or another that hole would be filled in short order. It’s what happens when power vacuums emerge in contested areas. The only question would be whether Kandahar would be lost to the insurgency or would be held for the Karzai government by an infusion of American troops.
I expect the US would step in although there’d probably be holy hell to pay for it in Ottawa. NATO boss Jaap de Hoop Scheffer has been an abject failure at his defining task of rallying NATO member support for Afghanistan. If Canada simply pulls out, it’s hard to imagine that would somehow strengthen Scheffer’s powers of persuasion.
There is another option that hasn’t been discussed but I expect soon will be – extending “the mission” for an additional year in order to withdraw in conjunction with the Dutch who claim they’re determined to pull out in 2010. I have my suspicions that the Dutch extended to 2010 hoping that Canada will indeed leave in 2009 but I guess that’s neither here nor there.
Of course factoring into this decision is what happens in the US elections in November. The Democratic candidates are all talking about substantially reducing America’s military burden in Iraq which ought to provide the Pentagon with some ability to expand its Afghanistan force. If, however, Hillary and Obama so botch this election (and they well might) and a Republican like McCain takes over, all bets are off.
This factor can’t be over-emphasized. The only reason we got into Afghanistan in the first place was due to the needs and demands of the United States. The one nation, other than Afghanistan itself, that will be impacted most by our departure will be the United States. The depth of that impact will be directly affected by who is running the White House and the state of affairs in Iraq at that time. Don’t even think about what might happen if Bush, as a parting gesture, decides to attack Iran while he still can.
When it comes right down to it, the merits of leaving Afghanistan are shot through with uncertainties, layers upon layers of them. It’ll be interesting to see how these complexities are acknowledged and addressed when Manley’s report comes out this month.
January 14, 2008
Talk about looking for trouble. American actor Wesley Snipes goes on trial this week for tax evasion. From 1999 to 2004 Snipes earned $38-million for making a half dozen movies. Out of that bundle he paid zero in taxes. Why? Because, as Snipes plans to argue this week, the US tax code doesn’t actually require people to pay income tax. From the
New York Times:Mr. Snipes, who is scheduled to go on trial Monday in Ocala, Fla., has become an unlikely public face for the antitax movement, whose members maintain that Americans are not obligated to pay income taxes and that the government extracts taxes from its citizens illegally.Tax deniers maintain that the law only appears to require payment of taxes. All their theories have been rejected by the courts, including the one invoked by Mr. Snipes, which is known as the 861 position, after a section of the federal tax code.
Adherents say a regulation applying the 861 provision does not list wages as taxable, though it does say that “compensation for services” is taxable. The courts have uniformly rejected all such theories, and eight people have been sentenced to prison after not paying taxes based on the 861 argument.
Despite the court rulings, juries have acquitted some prominent tax resisters in recent years, and failed prosecutions have encouraged others to join. Even when the government has failed to obtain convictions, it succeeded in collecting the taxes through civil enforcement.
Snipes won’t be standing alone at trial. In the prisoner’s dock with him will be the two guys who told Snipes he didn’t have to pay:
One is Douglas Rosile, who was stripped of his accounting license in 1997. The other is Eddie Kahn, who has served prison time for tax crimes. Both are under federal court order to stop promoting tax evasion, including the 861 position.
The charges Snipes faces go a fair distance beyond garden variety failure to pay taxes:
Mr. Snipes, 45, is charged with two felonies: conspiracy to defraud the government and filing a false claim for a $7 million refund (a claim for the year 1997, before he stopped paying taxes). He is also charged with failing to file tax returns for the six years starting in 1999. Prosecutors say they intend to show that Mr. Snipes moved tens of millions of untaxed dollars offshore and gave the government three worthless checks totaling $14 million to cover some taxes.
Some experts say the bad cheques aspect pretty much blows his “mistaken but honest belief” argument right out of the water.
January 14, 2008
Posted by MoS under
Beer
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Beer lovers of the world take heed. Our favourite, golden nectar, sublime tribute to the gods of hops, may become a life saver. From the glorious
Sydney Morning Herald:
“Researchers in Germany say that a cancer-fighting substance found in hops could be enhanced to brew a special anti-cancer beer.
The discovery could lead to healthier beers and food supplements.
One day when you hold up a glass and say, “To your health,” you would actually be toasting a triumph of the brewer’s art over disease.
The preliminary studies indicate xanthohumol, found in hops, inhibits a family of enzymes that can trigger the cancer process, as well as help the body detoxify carcinogens, according to the science newswire Ivanhoe.
“It’s very healthy. I think the ingredients in the beer are very good,” says Dr Werner Back, a brewing technology expert at the Technical University of Munich.
Xanthohumol contains more powerful antioxidants than vitamin E and some studies indicate it helps reduce oxidation of bad cholesterol, the newswire reported.
“Xanthohumol has been shown to be a very active substance against cancer,” says Dr Markus Herrmann, also of Munich. “It comes in small sticky beads, which you find within the hops.”
Hops have always been known to possess medicinal properties and are used in herbal medicines as a muscle relaxant. Other compounds found in hops are potent phytoestrogens. Scientists say these compounds could ultimately help prevent post-menopausal hot flashes and osteoporosis.
So, darling, please – this isn’t a beer gut, it’s my medicine chest.
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