Thursday, November 16, 2006

Milton Friedman RIP


Milton Friedman ,the guy who worked for Pinochet to produce record breaking inflation in post-Allende Chile to prove socialism didn't work, has passed on to the great cash register in the sky.

The Wall Street Journal calls him the greatest economist of the 20th Century. Please gimme a break. He was an imitator, a cheerleader for the Austrian School of Economics. He was far from original having merely rehashed and popularized the theories of Ludwig Von Mises and F. Hayek.

Heck he wasn't even the most influential economist of the 20th Century or even the later half of the 20th Century, The real historically important political economists of the 20th Century are Keynes, Galbraith and Joseph Schumpeter.


See:

It's the Labour Theory of Value, stupid

RIP



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Conservative Cold Warriors

Forward to the Past department. It is the return of the Cold War in Canada. Back in 1945 at the begining of the Cold War Canada reveled in its first Soviet Spy that came in from the cold; Igor Gouzenko

The Harpocrites are reimagining themselves as warriors in the Cold War. Someone should tell them that particular period of history is over.
Ottawa is moving swiftly to deport an alleged Russian spy arrested in a Montreal airport, by issuing a rarely used national security certificate.

Now if I was a conspiracy theorist I might suspect this was a shameless attempt by CSIS, the RCMP, and Public Security Minister Stockwell Day to prove that there was a security threat to Canada and we need their services. The bust being a smokescreen to distract from the fact they are facing investigation into the misuse of their Security State powers to arrest and deport Canadian citizens to face torture abroad. Nah that would never happen.

In 1945, Igor Gouzenko and his family received new identities from the Canadian government after the young Russian Embassy cipher clerk announced he had proof of a widespread spy ring in Canada. Pictured here, Gouzenko wears a hood to conceal his identity
In 1945, Igor Gouzenko and his family received new identities from the Canadian government after the young Russian Embassy cipher clerk announced he had proof of a widespread spy ring in Canada. Pictured here, Gouzenko wears a hood to conceal his identity while appearing on television in 1966. (National Archives of Canada, PA-129625)


See:

Arar

RCMP

CIA

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Iggy Doesn't Get It


Liberal Leadership candidate Michael Ignatieff was on both Don Newmans Politics (CBC) and Mike Duffy Live today (CTV).

When asked why he would be better at leading the Liberals than Bob Rae he said he represented the 'progressive centre', whatever that is, then he made this amazing understatement; "Liberals gave us a rest" refering to the Liberals loss of power.

A rest? Liberals deserted a corrupt party. Iggy just doesn't get it. But what does one expect from the candidate of the backroom boys, the old corrupt Liberal establishment.

See:

Liberal Leadership Race

Ignatieff




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Remember Riel


Buckdog and POGGE remind us that Louis Reil was hung today 121 years ago today by the Conservative Government of the day on behalf of the CPR railroad and the ruling class.

Riel was the Father of the Canadian West, the first real reformer. He led what could have been the first North American revolution, not just in the Canadian Prairies but across the aboriginal plains of North America.

See my Rebel Yell for my tribute to Riel, Dumont and Poundmaker.

Like the Revolution of 1837, the Riel Rebellion shows that Canada does have a revolutionary history, despite the ruling class myth that this country was built on Peace, Order and Good Government.

This is the last testament of Louis Riel a poem recently discovered and donated to the University of Regina. It was written by Riel to his jailer.

Let virtue be our soul's food'

A poem and introduction written by Louis Riel for his jailer about three weeks before Riel was hanged for treason: Robert Gordon! I beg your pardon for so having kept you waiting after some poor verses of mine. You know, my English is not fine. I speak it; but only very imperfectly.

The snow,

Which renders the ground all white,

From heaven, comes here below:

Its pine frozen drops invite us all

To white -- keep our thoughts and our acts,

So that when our bodies do fall,

Our merits, before God, be facts.

How many who, with good desires,

Have died and lost their souls to fires?

Good desires kept unpractic'd

Stand, before God, unnotic'd.

O Robert, let us be fond

Of virtue! Virtues abound

In every sort of good,

Let virtue be our soul's food. Louis (David) Riel Oct. 27, 1885 Regina Jail



See:

A History of Canadian Wealth, 1914.

Aboriginal Property Rights




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Cutting Your Nose

To spite your face as they say. If it is profitable as a private company it is profitable as a public company. Especially with all the talk around nuclear power in the Tar Sands. And if it is sold off it will still cost taxpayers.

The federal government has approached nuclear energy executives to discuss the future of Atomic Energy of Canada Ltd., including its potential sale.

And this article quotes Energy Probe, the right wing pro-privatization, pro coal lobby, so don't trust them to be objective.

See:

nuclear power


Energy

CANDU


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Liberals Fault

According to the Conservatives Global Warming is a myth. So this too must be the Liberals Fault.

A storm known as a "Pineapple Express" carried warm winds and record rains to the area earlier this month, sending the river over its banks and forcing the evacuation of about 200 families. Smaller evacuations occurred near Hope.

Environment Ministry officials on Vancouver Island kept a watch Wednesday on the threatening Cowichan River for local flooding.

Complicating matters, in the pre-dawn hours, a tsunami watch was issued for the outer coast of the province after a strong 8.3-magnitude earthquake northeast of Japan.

It was cancelled after several hours when regions of Japan and Alaska reported only minor 30-centimetre waves.

See:

Rona Ambrose

Environment


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OJ and Double Jeopardy

Crimes of the Rich and Famous. It has nothing to do with race but class. If OJ is a murderer then chances are good that Michael Jackson is a pedophile. If you are rich enough you can do the crime and not the time. And then make a fortune confessing your sins. It is Double Jeporady

MIJAC PERFORMS ‘WE ARE THE WORLD’ IN LONDON:
World Music Awards performance marks return to stage after acquittal of molestation.

*Ironically, Michael Jackson was surrounded by a bunch of kids during a rendition of his song “We are the World” Wednesday night at the World Music Awards in London, which marked his first performance since he was acquitted of child molestation charges in June of 2005.

The 48-year-old was expected to sing his mega-hit “Thriller,” the title track of his landmark 1982 album that was being honored by the show for its upcoming 25th anniversary.


See:

Crime




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Planes and Trains

Delta officially responds to US Airways' offer

Delta has officially responded to US Airways letter outlining its $8 billion acquisition offer. In a statement on its website, Delta CEO Gerald Grinstein says: "We received a letter from U.S. Airways this morning and will of course review it. Delta's plan has always been to emerge from bankruptcy in the first half of 2007 as a strong, stand-alone carrier. Our plan is working and we are proud of the progress Delta people are making to achieve this objective. The Bankruptcy Court has granted Delta the exclusive right to create the plan of reorganization until Feb. 15, 2007. We will continue to move aggressively towards that goal."

The Atlanta Journal-Constitution (free registration) also has posted on its website a copy of the letter sent from US Airways CEO Doug Parker to Delta's Grinstein. In that letter, Parker tells Grinstein: "I was disappointed that you declined to meet or even enter into discussions in your letter of October 17, 2006 [in response to a previous merger inquiry by US Airways]. Because the benefits of a merger of US Airways and Delta are so compelling to both of our companies' stakeholders, we believe it is important to inform them about our proposal. Therefore, we are simultaneously releasing this letter to the public."

Later in the letter, Parker adds: "This proposal presents an opportunity for Delta creditors to receive significantly higher recoveries than they can receive under any standalone plan for Delta. It is also an opportunity for US Airways shareholders to benefit from the significant upside potential of the combination. Consumers will benefit from expanded choice as well as the reach and services of a large-scale provider within the cost structure of a low-fare carrier. Our employees will benefit from a more competitive employer and our willingness to adopt highest common denominator employee costs."



Seth Sandronsky, "When Economists Didn't Buy the Free Market. . . : An Interview with Michael Perelman"

Michael Perlman is a longtime professor of economics at California State University, Chico. A prolific author, his newest book is titled Railroading Economics: The Creation of the Free Market Mythology (Monthly Review Press, 2006).


Seth Sandronsky: What did the top economists of the late 19th century grasp as the U.S. railroad industry grew?

Michael Perelman: Economists who studied the railroad industry, which was by far the dominant industry in the country, realized that competition would necessarily drive prices so low that the railroads would become bankrupt. What they saw was similar to the airline industry today. The extra costs to fly me from San Francisco to New York might cost $20 at the most on a flight that was scheduled but had empty seats. Unbridled competition would drive prices down toward $20, which was not enough to cover the fixed costs.

The economists at the time recognized that the industry's viability would require restricting market forces. They argued that the only hope for the industry was to restrict competition by allowing railroads to combine and at least collude to keep prices high.

SS: For non-economists, can you please explain what fixed costs are for industry, and the connections with prices in the marketplace?

MP: Fixed costs are expenses that do not depend on the quantity of goods or services provided. For example, in the airline industry corporations must pay interest on the debt incurred or payment on the leases for the planes that they use. Once a plane is scheduled to run, payments for the pilots and flight attendants as well as the landing fees are set, regardless of how many seats on the plane are empty. According to economic theory, the relation between fixed costs and prices is nonexistent under strong competition. Prices depend on marginal costs -- the cost of supplying one more unit. In the case of the airlines, the marginal cost of filling an empty seat is merely the extra fuel required to carry the extra weight, maybe a lunch, and the cost of handling baggage. Processing of tickets used to cost about $20 but now through computerization is practically nothing.

Fixed costs are also related to but not the same thing as long-lived capital. Economists rarely pay much attention to long-lived capital, except to applaud the concept of capital accumulation. The reason for their inattention is that capital goods require considerations of time, which complicates the simple economic models with which they are enamored. Once a company has invested in such capital goods, it is stuck with them because it will not get much for its investment on secondhand markets. Companies become desperate to utilize these capital goods as efficiently as possible. A large passenger airplane carrying only a couple people would be a disaster for the airline. They would have to do something to fill up their seats.

If all the airlines were in a similar situation, they would have no choice but to engage in the price war. This sort of competition occurred in the 19th century railroads. Bankruptcy became commonplace until J.P. Morgan began to organize them into large cartels to prevent competition.

Modern economics assumes away this tendency even though common sense shows that no really competitive industry today is very profitable. Profits are highest in industries protected by intellectual property or by the influence necessary to garner government contracts.

SS: What effects did the "Morganizing" of U.S. industries have on the economics profession?

MP: At first, many of the most important economists of the time applauded Morganization. They argued that a consolidated firm could be more efficient and even offer lower prices to consumers -- much like the contemporary justification of Wal-Mart. They also added that excessive competition was destructive.

Within a short period of time, the concern about excessive competition fell away, although the efficiency argument remained in vogue. After all, large corporations were coming to be common and conventional economists were not about to challenge them. After all, business forces already wielded tremendous influence in academia.

The Morgan-friendly economists introduced another argument, which fell out of fashion until it was re-adopted in the 1970s. This thesis proposed that elimination of competition was not necessarily bad because of potential competition. The idea was that if a company became too greedy and its profits soared, other companies would rush in to claim some of the profit. As a result, corporations would moderate their lust after profits, allowing the public to benefit from the lowered prices due to the efficiency of large business.

A few decades later, Joseph Schumpeter offered another wrinkle to the debate. Even if a corporation monopolized an entire sector, say, steel for example, other corporations that depended on steel could turn to other materials such as aluminum as a substitute. Using this argument, monopolistic power magically disappeared because of what economists call cross-product competition. I might mention that the dot.com era adopted Schumpeter as its patron saint because of his advocacy of the essential role of the entrepreneur.

But now, such debates have subsided. Instead, economists exude confidence that the market operates as a giant computer or even a super-brain, which allows it to ensure that business performs in the most efficient manner possible. So great is the divorce from reality that such theories persist even in the post-Enron era.

See:

Airlines


Pensions


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Marxism in action

Marx Meeting


A bit o anarchy as the Marx Brothers wither away the State.

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Communist Manifesto Toon

Communist Manifesto illustrated by Disney

This is a scream a must view

A tip o' the blog to NewsTrolls


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