The Irony Of Trudeau Junior Needing to Eliminate Supply Management

Many of those who know me know I do not support Supply Management as it artificially changes the price of goods. I used to work for a dairy co-operative and heard the stories of drivers taking their milk loads and dumping them in the middle of a farm field as part of the process of ensuring the supply did not get into the system.

So how did we get to the point of an auto tariff trade war with the USA?

Well back in 1971, Pierre Elliot Trudeau’s government passed the bill authorizing Supply Management.  Little did he know his son would be in power when it became a major sticking point between US/Canada trade relations. Trump is now threatening to levy tariffs on Canadian made automobiles and siting Supply Management (for how little it really affects things) as one of the major reasons why the USA is considering this aggressive trade move.

We are quickly getting to a point in which Baby Trudeau will need to either double down on his father’s legacy and seriously jeopardize Canada’s economy or eliminate the unfair trade practice. Pretty ironic if you ask me. In fact, my view on Baby Trudeau’s stance of measured and proportionate tariffs is this.  We can bloody the nose of the USA with equal tariffs but what good is it if we are buried 6 feet under?

If you don’t agree with me, why not take Amanda Lang’s view on it?  She is not a raving libertarian like me but even she knows if push comes to shove and the USA proceeds with this, our economy in Canada will be crippled.

or in other words…we would be Officially Screwed.

ACORN Ottawa Hurting The Most Desperate

Acorn Ottawa picketed in front of Money Mart’s in the east end to protest the density of agencies that provide temporary loans.  They say these agencies corner citizens and trap them like animals leaving them in an endless loop of poverty.

So what are they asking for?  A minimum distance between agencies and higher licensing fees.

Let’s take these two items and look at them.

Minimum distances between agencies to be mandated.

This will reduce the number of agencies in the area giving the patrons fewer options.  It also means that should a patron want to compare prices they would have to travel further to determine which location or outlet is offering the best deal.  So in effect, this request would make it harder on patrons to do what is best for them and leave them at the whim of their closest outlet.

This also reduces the supply of services which, if we pay attention to microeconomic supply and demand curves, will drive up prices further hurting the patrons of these businesses.

Higher License Fees to Operate a Money Loan Establishment

Higher license fees to operate the business means one of three things.

  1. The people who work in the outlet will get paid less because the business will have to absorb the costs, or
  2. Prices for the services they offer will have to go up to compensate for the added cost, or
  3. The businesses will eventually go under leaving those with poor credit and the need for money nowhere to go in emergency situations.  This is the most dangerous as those advance loans often go towards buying food for the patrons family.

All of these options hurt the local community.

So what does this all add up to?  ACORN is actually hurting those it is most out to help because it does not understand the simple concepts of supply and demand.  Shame on ACORN.  You are OfficiallyScrewing over Ottawa residents with your antics.

How The Free Market Deals With “Minimum Wage” or “Living Wage” Increases

In 2013 there was a bump in discussion with regards to raising minimum wage to what is being termed a “living wage”.

Price Floor

Any Economics 101 student can tell you is that a minimum wage is a price floor. What price floors do is prevent the market from reaching the equilibrium point and in the case of a minimum wage (or living wage) they create a higher supply of people who want those jobs, and a lower number of employers wanting to provide those jobs. This in the very high tech economics language creates “waste”.

So how does the free market deal with minimum wage? Well in 2011, McDonalds in Europe knew that the job of order taker at McDonalds was a position that they could replace with cheaper order kiosks. So they replaced the jobs of hourly income earning people with kiosks.

And mark my words, if Ontario raises it’s minimum wage to the “living wage”McDonald's Kiosk level being asked for of $14 an hour, there will be no where left for students to find jobs. McDonalds will bring in kiosks. Mom and Pop shops will lay off students and work the extra hours themselves. The  black market “cash” jobs will make a huge comeback. Tax coffers will suffer as unemployment rises and underground employment markets thrive outside of the sight of the tax man.

What we SHOULD be doing is eliminating minimum wage. Let employers pay people what the job value is based on the supply and demand curves finding that equilibrium point.

Happy Greek (un) Independence Day

As many of you know, my background is Greek. I was born here in Canada to immigrants from Greece who worked hard, made an honest living and taught me great values that they brought with them from the homeland back in the mid 1960’s.

Well today, March 25th, is the day Greeks celebrate breaking free from the Ottoman empire. It is more affectionately known as Greek Independence day.

So I would like to congratulate Greece on being independent and for standing up on it’s own two feet and for working hard to become a proud, stable, secure……oh wait….I forgot about the €110 billion bailout from the EU and the failing economy and the huge public sector with the overtaxed private sector and the giant bloated retirement packages…

Nevermind. You’re not independent anymore.

ORNGE Boondoggle Audit Report Highlights

Last week the Ontario Auditor General released the report on ORNGE, the air ambulance agency that is deservedly under scrutiny. Here are some highlights to make you see red.

We noted in this regard that the funding Ornge received for air ambulance services increased by more than 20% between the 2006/07 fiscal year (Ornge’s first full year of operations) and the 2010/11 fiscal year. However, over the same period, the total number of patients transported by air decreased by 6%.

Nice eh? How about this one?

Ornge received $65 million to perform inter-facility land ambulance transfers, projected to number 20,000 annually. However, Ornge is currently providing only about 15% of the projected transfers.

Do the math on that one. To transport a patient, over land not air, was estimated to cost $3250 per transport. So if you were to be driven by Ornge from North York General to Sick Children’s Hospital, we were GOING to pay $3250. But instead Ornge took $65Million and only transported 3000 people. The math there is over $21500 per transport. Seriously???

Ornge management, with approval of its board, created a network of for-profit and not-for-profit subsidiaries and other companies with which Ornge has entered into complex financial arrangements to deliver air ambulance services. In fact, much of Ornge’s operation is being delivered by these other entities, which bill Ornge for those services.

And I guarantee each tier took it’s chunk of our flesh in dollars. How about the sweet deal below for some company. I would LOVE to be the landlord for ORNGE.

The building that houses Ornge’s corporate head office was purchased for $15 million using funding borrowed through a bond issue. Ornge then entered into a complex arrangement with some of the other entities it created to sell the building and lease it back to itself. An independent real-estate appraiser
we engaged estimated that, under its lease with a related Ornge company, Ornge’s rent payments are 40% higher than the fair-market rent. Over the first five years of the 25-year lease, this amounts to Ornge paying $2 million more than it would pay if the building’s cost per square foot were comparable to that of similar buildings in the area.

Can we say Chaching?? I am sure the landlord for ORNGE was saying it.

After buying 12 new helicopters for US$148 million, Ornge arranged to install seating for 12 people in two of them. As a result, these helicopters could not be used to transport patients. Ornge told us it was considering selling these two helicopters.

Sure…AFTER they got caught.

The report goes on and on. And after they take a big chunk of our tax dollars and blow it left right and centre, the top employees refuse to disclose their salaries on the Ontario government sunshine list of people who make more than $100K.

Ontario Tax Payers….Officially Screwed….again. Thank you Dalton McGuinty, George Smitherman and Deb Matthews.

PSAC Launders Tax Dollars

Joe Canadian pays taxes to government’

Government hires and pays Public Servants.

Public Servants pay union dues to PSAC, the public servants union.

PSAC pays for advertising against Steven Harper and the Conservatives, making their advertising partisan. (I heard ads running on CFRA radio here in Ottawa this week.)

i.e. PSAC is laundering money from Joe Canadian to partisan politics.

Another way, we as taxpayers, get Officially Screwed.

I Call Bulls#!/ on Carol Bowshier of the Ohio Civil Service Employee Association

This morning on Fox’s America’s Newsroom in an interview conducted by Bill Hemmer, Carol Bowshier, the chief of staff for the Ohio Civil Service Employees Association says:

Well the fact is, we could lay off every state worker in Ohio. Every police officer, every firefighter, every corrections officer and we would only close 1/4 of the $8Billion gap.

I call Bulls#!/ on Ms. Bowshier, because her assumption means the average salary of each public service employee is under $13,000 a year which we all know is simply not the case.

As Bill stated at the beginning of the interview, this would affect all 330,000 state employees.

So do the math. If the WHOLE $8Billion was being laid on the union workers (which it is not) then all we have to do is take the $8 Billion divided by 330,000 and we get a measly $24242 per employee (over 2 years meaning the actual per employee cost to eliminate the $8Billion is only $12,121 per year).

And add in the fact that the $8Billion is NOT being solely burdened by the public union workers, these austerity moves by Ohio will likely be able to put the state into a surplus situation.

Please Hold On To The Handrails. It’s About To Get Bumpy.

For those who think fearmongering is at an all time high.  I have news for you courtesy of the Boy Scouts.  Be prepared.

Corn prices below show the rise only seen in 2008 but we are only at the beginning.  If oil goes up due to instability in the middle east, the price of all good will go up even more. But it’s about to crash through the 2008 all time high. Keep an eye on it.

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Additionally, the price of cotton which we knew was rising, is also spiking dramatically and is at all time highs now in January. I guess Glenn Beck’s warning of Cotton going up 30% and to stock up a couple of months ago wasn’t such a bad idea. I wish I had taken his advice. We’ll keep an eye on this one too.

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In any case, both the drop in the US dollar and the fact that all our goods get transported via oil burning vehicles is going to drive up commodities. That makes you and I, as consumers, OfficiallyScrewed.