Relevant and even prescient commentary on news, politics and the economy.

Beware Canada – The Libertarians are Coming! (Louder)

Via a former editor’s Twitter feed, the Simon Fraser Institute decides to segment the costs of Canadian health care. For the good of the people, of course:

It is critically important, however, that Canadians understand the true cost of Medicare. Armed with a more meaningful estimate, Canadians will be able to better assess whether or not they are receiving value for their health care dollars.

And what do they calculate as the direct Canadian cost for everything—not just insurance, but insurance, treatment, drugs, etc.—on average?

– $9,572 for the average 2 adult family

– $9,855 for the average 2 adult and 1 child family

– $10,191 for the average 2 adult and 2 child family

The lowest quote I can find for insurance alone is $950/month, or $11,400/year. And that’s before any visits, or shots, or treatments.

Tell me again why we can’t afford a government option? And why the Simon Fraser Institute is getting to shill fear in the Windsor Star?

There were reasons for moving back to the States, but health care certainly isn’t one of them.

Canadian Independence Day Daytime Movie Lineup

  1. Candian Bacon (certainly Michael Moore’s best work of fiction), starring John Candy
  2. So I Married an Axe Murderer / Mike Meyers
  3. Airplane! / Leslie Nielsen
  4. Chain Reaction / Keanu
  5. Bright Lights, Big City / Michael J. Fox (who has no Elvis in him, but does good work)

I think they’re trying to convince everyone to be outside.

More Canadian Content here, via my Loyal Reader.

UPDATE: The NYT honours the day. Highlight from Malcolm Gladwell:

In history class, in seventh grade (or as we like to say in Canada, grade seven) we learned the story of the American Revolution…Turns out you were all a bunch of ungrateful tax cheats. And you weren’t very nice to the Loyalists. What I miss most about Canada is getting the truth about the United States.

He’s got a point there, except about the Loyalists. And that the “tax cheats” were really fighting the East India Company (think Wal-Mart with a British accent).

Also, we had Stevie Wonder last night and you didn’t. The bad news is it was the night before a National Holiday in a relatively large city and a free concert. So most of couldn’t get within five blocks of it.

How many "Free Trade" Economists will thank the Union?

I’ve said before that the “Buy American” provisions in the stimulus bill were not exactly a major issue. (I believe the phrase was roughly, “could drive a broken Mexican truck through the holes, even if dead drunk.”) Many economists (hi, Barkley) disagreed, even while some acknowledged that the income effect from “buying American” would be mitigated by the substitution effect on the FX rate, while others noted that reprisal threats just might not be credible.

But time went by, and Barry O. “yielded,” adding an explicit provision that “buy American” would follow current trade agreements—which the more aware economists later noted was basically an indication that we will support “free trade” only if the other guy does. (Sorry, China.)

So now is the time for credit-taking. And while the usual suspects want to be credited, the reality of what they asked for and what they received belies that claim.

Who came to the support of “free trade for free traders”? Why, the United Steelworkers Union, of course:

The news came only hours after the United Steelworkers pleaded Canada’s case to lawmakers from steel-producing states.

A written submission to the congressional steel committee from the Steelworkers’ president, Canadian Leo Gerard, asked that legislators exempt Canada from the provision.

“Because we are an international union, and because Canadian and U.S. manufacturing is so integrated, we encourage you and other members of the steel caucus to approach your counterparts in Canada to discuss a co-ordinated approach,” Gerard’s submission read….

The Steelworkers have said it’s Chinese steel, not Canadian, that’s the intended target of “Buy American.” American steel-makers have long accused China of employing unjust policies that give its steel manufacturers a competitive advantage.

Anyone wonder why they might believe that?

And, needless to say, EconomistMom’s organization is right in the middle of the fooforaw:

The steel company executives who showed up for Wednesday’s caucus hearing were skeptical of the “Buy American” warnings.

Dan DiMicco, chief executive of Nucor Corp., dismissed as “garbage” a recent study by the Peterson Institute for International Economics that “Buy American” could cost, not save, thousands of U.S. jobs.

“The American people are with us and with you on this issue,” he told the steel caucus members.

And they’re right. The American people support free trade—with countries that allow us free trade.

It seems that only some economists cannot tell the difference.

Good Summary, with Expanded Notes

Ken Houghton

Pulled from comments (to the Librarian post at Eschaton):

[W]ithout economic knowledge, DFHs don’t understand why the bailout of banks so that they would keep credit flowing is critical, while the bailout of the auto industry caused by the fact that the banks spent the money on acquisitions and executive pay instead of lending it, is not critical.

Which leads us to the reality that the problem is the dealer contracts, since GM in Brazil is gaining market share:

Nonetheless, GM here in Brazil is faring well among the other three giants, Fiat, Volkswagen and Ford. According to the latest numbers, GM sold 444,000 automobiles in Brazil from January to November. This is a 10.4% increase from the same time period last year. In the light commercial segment, which saw 76,000 units sold, there was an impressive growth of 60% again in the same period. Here, Chevrolet continues to be a respectful brand. Also, like other assembly plants installed in Brazil, flex cars already dominate a substantial part of production at GM.

Of course, it’s easier to rely on Flex Cars when you’re using a useful source for ethanol, instead of corn. (See Tom’s multiple postings on the subject, both here and at MU.)

And about those workers who (foolishly, per Senators who are paid much more than $73/hour, even if you pretend they work “full-time”) accepted the companies promises of a pension and health benefits in place of being paid? Well, Malcolm Gladwell had the data over a year ago:

Walter Reuther…believed that risk ought to be broadly collectivized. Charlie Wilson, on the other hand, felt the way the business leaders of Toledo did: that collectivization was a threat to the free market and to the autonomy of business owners. In his view, companies themselves ought to assume the risks of providing insurance.

General Motors, the country’s largest automaker, is between forty and fifty billion dollars behind in the money it needs to fulfill its health-care and pension promises. This crisis is sometimes portrayed as the result of corporate America’s excessive generosity in making promises to its workers. But when it comes to retirement, health, disability, and unemployment benefits there is nothing exceptional about the United States: it is average among industrialized countries—more generous than Australia, Canada, Ireland, and Italy, just behind Finland and the United Kingdom, and on a par with the Netherlands and Denmark. The difference is that in most countries the government, or large groups of companies, provides pensions and health insurance. The United States, by contrast, has over the past fifty years followed the lead of Charlie Wilson and the bosses of Toledo and made individual companies responsible for the care of their retirees. It is this fact, as much as any other, that explains the current crisis. In 1950, Charlie Wilson was wrong, and Walter Reuther was right.

In other news, Canada is still whipping U.S. bum, and we don’t even have a government right now.

Canadian Content

There are three regular AB posters who currently are residents of the Great White North.

So, naturally, it’s a Brooklyn boy who breaks the news that a plurality is not always a majority:

The Liberals and New Democrats signed an agreement on Monday to form an unprecedented coalition government, with a written pledge of support from the Bloc Québécois, if they are successful in ousting the minority Conservative government in a coming confidence vote.

UPDATE: Apparently, another NYCite (though once and possibly-future Canadian) was on top of this too.

*with Canadian relatives and authors, yes, but still…

Matching Obsessions

It is no secret that the only movie I’m waiting to see this year is Quantum of Solace, even if they did have the poor taste not to use Janelle.

Well, Paul McAuley saw it more than two weeks ago, and confirmed it is everything viewers of the recent Casino Royale would expect.

So far this wouldn’t fit on an economics blog. But see the comments to the movie:

I’m somewhat boggled by the concept of a secret international organisation corrupting third-world countries for profit when the World Banks does a perfectly good job of that already…

to which the only possible response was:

This is a super-secret world bank – but yes, their methods are somewhat similar.

Wonder if Dani Rodrik would agree. On a possibly-related note:

Consider this an open thread discussing international development and “aid.”

Why I Don’t Do Market Timing

Starting in September, my income, such as it were, is basically in C$.

Stephen Gordon explains, with graphics, why that has been such a bad trade.

The scariest part:

The 2002-2008 expansion provided significant real income gains, and more than half of those gains were due to the improvement in Canada’s terms of trade.

So there really isn’t an infrastructure in place to benefit from autonomy.

Right now, Stephen Harper should be in consideration for the title of the Luckiest Man on Earth.

Accurate Headline: After three years of U.S. recession, Canada looks East

The WSJ wants to pretend that Barack Obama is responsible for Canada making a good decision:

Prime Minister Stephen Harper and President Nicolas Sarkozy of France signed an agreement Friday to begin negotiations for a free trade pact between Canada and the European Union. A Canada-EU study released last week outlines the joint economic benefits of such a partnership, with two-way trade estimated to increase 22.9% by 2014.

I guess the WSJ is more impressed with Barry O’s G-D-like powers than I am. Or maybe they just can’t read data:

Exports to the United States:
2002 347,051.8
2003 328,983.3
2004 350,576.3
2005 368,414.7
2006 361,440.4
2007 356,094.2

Imports from the United States:
2002 255,232.5
2003 240,356.3
2004 250,038.3
2005 259,348.2
2006 265,023.0
2007 269,752.5

Imports steadily rising, exports falling for the last three years (and basically flat to 2004), with 2008 probably not being great and 2009-2010 already looking dicey.

It’s a great move for Canada, but any delusion that it is Obama-, not data-driven should be confined to the WSJ editorial page.