“‘You’re a criminal serving time in prison – you should not be getting an HST bribe cheque,’ Progressive Conservative Leader Tim Hudak said Friday.”

But

“Mail call will be welcomed by those inmates serving less than 90 days in provincial correctional facilities, as they are the only convicts eligible for the payments.”

Ok. That seems fine. Tax adjustments shouldn’t apply to inmates? So if an inmate has an income while in prison, and tax rates are increased for his tax bracket, he shouldn’t pay the increased rate?

I’m not that dense, I realize that considering the cheque literally as a bribe means why let criminal offenders benefit from a bribe, but of course it’s not actually a bribe. It’s a bit of money to say “Look, prices won’t come down overnight after businesses start seeing the benefits of HST, so in the meantime here’s a bit of cash to smooth things out.” People in prison for less than 90 days will certainly need that sort of help. And that’s fine.

It’s this kind of stuff that scares people who know anything about economics away from the party: “No one believes that businesses will pass on their savings to consumers. If the government’s own business—the LCBO—isn’t going to pass on the savings, why should those in the private sector?” said [NDP leader] Horwath.

It’s not a matter of why should they as in why would they feel any moral compunction to do so, but a matter of that’s just how competition works. Unless you have mass price fixing, eventually someone says “Hey, it’s costing me a bit less to produce my crap, so I’m going to lower my costs a bit to beat out my competition,” and then the competition does the same thing and so on and so forth until prices come down.

He’s going to create 250,000 jobs. Vote for me instead and I’ll create ONE MILLION JOBS!

While we’re just picking numbers out of hats.

I’m thinking at least half of Rossi’s jobs have to be imaginary. That is, they’ll exist in his mind, but nobody will be doing them.

First off, I’m not sure where 9.6% comes from, but that’s fine. That may be the number for the actual city of Toronto. But then there aren’t 250,000 people looking for work in actual Toronto.

The article notes that “Rossi did not explain the formula he used . . . to come up with the 250,000 figure.”

OPTION ONE
Take population of Toronto (somewhere a bit over 2,500,000), multiply by apparent unemployment rate (9.6%), round up, equals 250,000. Which is patently ridiculous (a. it’s impossible to create a job for every single unemployed person, b. there aren’t actually 250,000 unemployed people in Toronto because at any given time about a third of the population (kids, retired people, the hopeless) aren’t looking for jobs). Therefore, Rocco Rossi is ridiculous.

Unless… OPTION TWO
Forget about just Toronto. Consider the Toronto CMA. This includes Ajax, Aurora, Bradford West Gwillimbury, Brampton, Caledon, East Gwillimbury, Georgina, Halton Hills, King, Markham, Milton, Mississauga, Mono, New Tecumseth, Newmarket, Oakville, Orangeville, Pickering, Richmond Hill, Toronto, Uxbridge, Vaughan, Whitchurch-Stouffville. (NB: Most of these places are not voting for the mayor of Toronto.) Here there are a shade over 300,000 people looking for work. Create a job for 80% of them, equals 250,000. Of course, this would reduce the unemployment rate to about 2%. Which is economically impossible. Therefore, Rocco Rossi is ridiculous.

Unless… OPTION THREE
What he’s really thinking is that his policies will create jobs throughout all of Ontario. In this case there are say, generously, 650,000 people looking for work. Figure you can make jobs for about 40% of them, equals 250,000. Of course, this would reduce the provincial unemployment rate to 5.5%. Which would be well below where it’s ever been before. Therefore, Rocco Rossi is ridiculous.

CONCLUSION
Rocco Rossi is ridiculous.

I didn’t read this whole post, because it’s way too long without saying somewhere near the top “Sorry, this is really long.”

The thing with music theft is people keep making it anyhow. The argument for strong intellectual property rights is primarily that without those rights people wouldn’t bother to innovate/invent/produce. And that’s probably true, generally. I don’t imagine Pfizer saying “That’s fine, even though everything we make is stolen we’ll continue investing billions in medical research.” But that’s apparently exactly what happens with music.

It’s not that “musicians in particular should be giving their music away for no cost” (emphasis mine), it’s that they do. Not intentionally of course (well, not usually), but they know while making music that it will be stolen in large quantities. Yet they keep doing it.

That said, what I personally support is something like an “Artistic Freedom Voucher.” Or full paper here.

Well, not quite, but still.

While a presumably off-the-cuff suggestion, given Canada’s favourable international standing and its financial sector’s general lack of collapse, this is probably a very real possibility. Better to appoint a non-European without any specific ties to any EU countries, although Governor of the Bank of Canada probably isn’t a position where you just give two weeks notice and delete your firefox history.

Also, I’m not clear on European attitudes towards the IMF. I assume “good for others but not for us,” but when you’re
fucked, sometimes attitudes can change.

The Star reports:

The average resale price of a home rose by 19.3 per cent in 2009 to $337,410, despite higher unemployment and the start of economic recovery, said Edward Jones.

“The relative strength of Canadian housing prices in the face of the recent economic recession suggests caution,” said the report by analysts Kate Warne and Craig Fehr.

Things do feel very bubbly in places. The ratio of purchase price to annual rent looks to me to be around 20-25 in Toronto, and should definitely be no higher than 20, probably more like 15.

I wonder whether this is due to the limits on rent increases in residential rental properties generally below normal housing appreciation. There’s no sense renting a house that you can only raise rates on each year at half the rate the house is growing in value. Plus there’s the tax exemption on the sale of a primary residence. Essentially home ownership is subsidized for no real reason.

But still, assuming those subsidies are safe, a 20% decline seems reasonable, at a minimum. “Last Friday, prominent Bay St. economist David Rosenberg predicted a 20 per cent decline in average Canadian house prices.” Of course that doesn’t have to be all at once. Prices could simply fail to rise for a decade.

I’d like to see a price/square foot:people/square kilometer kind of figure, historically, adjusted for inflation. If someone knows where I might find such a thing.

In the post I just put up I suggested that Toronto Hydro has far superior customer service as compared specifically to Enbridge.

In the same article I mentioned there, Rossi suggests that “since energy rates are provincially regulated, consumers don’t have to worry that privatizing the utility will lead to a rate increase.”

I think the customer service aspect should be part of the conversation. Rogers is terrible (I know), Bell is terrible (I know), Telus is terrible (I’ve heard), everybody’s terrible, but at least you can say “Fuck it, I’m going to your competitor.” Yes, it’s an oligopoly and still blows, but it’s something. If someone’s going to be given a monopoly on something, it shouldn’t just be their pricing that’s regulated, but their customer service. Require certain measurable goals to be met.

Also, with revenues of $2.5 billion, and profits of $42.8 million, Toronto Hydro would be a very large private company. Presumably even bigger if the sale goes over well with the public and similar proposals start spreading in municipalities around the GTA, then leading to mergers (if allowed). The point being, this would go from being part of the government, to a very large private company with a very significant incentive to start putting its resources towards political gain, to adjust the rules governing it.

So the throne speech includes this: “Canadians live within their means and expect their governments to do the same.”

That sounds familiar: “But families across the country are tightening their belts and making tough decisions. The federal government should do the same.” Obama said that not too long ago.

In both cases the remarks are vague enough to be both true and disconcerting.

The throne speech comment is followed immediately with “Spending designed for a rainy day should not become an all-weather practice.” Again, vague enough to be both true and disconcerting.

Spending isn’t necessarily bad. Spending more than you make isn’t necessarily bad either. So long as the spending is useful.

Also, I don’t know about the rest of the country, but there’s clearly a housing bubble in Toronto. You can rent for well below the cost of owning. Maybe this is a demographic thing with too many 20- and 30-somethings buying a house just because it’s what you’re supposed to do? I don’t know, it’s a hypothesis I’m not going to examine right now. Or a rush ahead of the increased restrictions? Are there readily available data on the types of mortgages being taken out? When everything crashes, the next mayor’s going to be fucked.

Is it possible?

Didier Sornette thinks so, and is setting out to prove it. Not to prove necessarily that he can do it any given time, but that it’s possible. “The first hypothesis is that financial (and other) bubbles can be diagnosed in real-time before they end. And the second is that the termination of financial (and other) bubbles can be bracketed using probabilistic forecasts, with a reliability better than chance.”

Three forecasts have been made and sealed, to be unveiled May 1, 2010. I’m not sure how many instances you need to prove better/equal to/worse than chance, but it will at least be interesting to see what comes out of that box.

It’s important and not easy to determine a correct minimum wage. But you can take a shot at it and probably come pretty close:

CCPA reports have argued in the past that the minimum wage should put someone working full-time, full-year at (and ideally, above) the poverty line (in this case Statistics Canada’s Low Income Cut-Off). The latest stats put the LICO in 2008 at $22,171 (before taxes) for a single person living in a city larger than 500,000 people. This translates into $10.66 an hour for someone working 40 hours per week, and $12.18 per hour for someone working 35 hours per week (based on 52 weeks, assuming some of this is paid vacation).

That sounds pretty reasonable. I don’t think it’s simply the case that the poverty line at a regular work week is the prima facie correct determining factor. If there were fewer jobs that required so little education or skill that they could all be filled by students and people working just to get out of the house, then they may as well be paid according to market forces. But since things aren’t that way, and probably won’t be in my lifetime (I assume they’ll go the other direction, if anywhere), then fine.

But the bigger question raised is this:

Even these figures are arguably way too low for someone living in a major Canadian city, like Vancouver, where the cost of living (housing, in particular) is much higher. Statscan does not calculate LICOs for big cities, but based on higher housing costs alone (say a $500 place in a smaller centre rents for $1,000 in the city, that is an extra $6,000 in after-tax income required) this adjustment would add another $4-5 per hour.

What scheme would deal with this in a not too disruptive manner? You don’t want to condemn the lower class in cities to a poverty they would escape elsewhere. But you don’t want to create flight to the city scenarios where every uneducated worker decides to move to the higher wages. And if you institute a higher wage for, say, Toronto, then what do businesses on the border in Mississauga do? They raise wages. And then Brampton. Maybe it fades out by degrees, eventually. Yeah, that sounds good to me. Let’s give it a shot.

I’ve previously commented on ending child poverty solely through a tax on the rich.

Stephen Gordon has a pretty lucid post here explaining the issue with some actual numbers.

The whole thing is worth reading, and not just for the pictures.

But the best picture is this:

Why couldn’t we live near friends who would be a better influence?

Q3 GDP growth wasn’t great.

Though there are a couple non-dark spots.

Beneath us, the CBO had this to say about their own situation and stimulus:

CBO estimates that in the third quarter of calendar year 2009, an additional 600,000 to 1.6 million people were employed in the United States, and real (inflation-adjusted) gross domestic product (GDP) was 1.2 percent to 3.2 percent higher, than would have been the case in the absence of ARRA.

That works out to 500,000 increased jobs per percentage point of increased GDP.

See, GDP isn’t just some number for nerds, it’s a number that matters if you want to get a job or continue having one.

So it’s important that GDP grows. So it’s important that when the private sector isn’t playing its part, the government helps out for a bit. So it’s important that the help flows, and it is, or maybe it isn’t:

Canada Says 97% of Government Stimulus Is Committed – Bloomberg.com

40 per cent of stimulus projects started – Globe and Mail

No steam in stimulus: only 7 per cent of infrastructure projects begun across country – Chronicle-Herald

Stimulus progress hard to pin down – Ottawa Citizen

More estimates — from the Citizen/Chronicle-Herald story:

66%: “Finance Minister Jim Flaherty is expected to announce in Winnipeg today that 8,000 of a planned 12,000 stimulus projects are under way.’”

75%: “According to the information provided the committee and obtained by the Citizen and the Halifax Chronicle-Herald, about 75 per cent of the projects have start dates that have already passed, but it is unknown how many of these building, water, sewer and road works have broken ground.”

12%: “Liberal infrastructure critic Gerard Kennedy said Tuesday that a Liberal analysis in September — based on phone calls to 1,000 projects — showed about 12 per cent had started.”

From Bloomberg:

70%: “About 70 percent of fiscal stimulus package ‘is flowing in the economy,’ the report said.”

If only we had someone non-partisan with the resources to definitely comment on this sort of thing. Hmmm…

It’s the same kind of thing you see when a new movie sets some sort of sales record. It’s irresponsible to say things like “Ottawa is past the halfway mark to the biggest deficit in the country’s history…”

In nominal terms, assuming the general trend is to have some level of deficit, every year is likely to have the largest deficit ever.

Just saw this at Econbrowser discussing a ‘blogonomics’ panel held by the Bank of Canada, which is a pretty cool non-bank-like thing to be doing.

Apparently Stephen Gordon was there as well, so we’ll see what he has to say about it… Even when it comes to a small blogger panel held by the Bank of Canada they could only find one Canadian blogger worth inviting.

Three sighs for Canadian public economic discourse.

Menzie Chinn’s best observation is this: “Blogs were followed most closely by younger economists, while the more senior economists had, shall I say, little patience for following economics blogs.”

I’ve found old people to be generally enamoured with their own ability to do impressive technological things like owning an ipod or unpackaging a portable GPS, but at the same time anti-blogging. I guess because young people shouldn’t be speaking without being spoken to.

The table in this post is originally from Joshua Brown at The Reformed Broker, and it’s some pretty impressive work. Even if I didn’t have a job I don’t think I’d be this effective with my time.

Awesome.

The $4 bin at Walmart is really having an effect on the quality of movies I own.