The Gods of the Copybook Headings

Scenes From The Imperial Capital

Peer Review

Lord Black says something very incorrect:

Here I take leave of the Iron Duke and advise my old adversaries: Don’t do it. At the arrival of the Europeans, the original inhabitants of North America shared a Stone Age civilization; they had not discovered the wheel, had barely begun the cultivation of crops or the construction of even primitive permanent buildings, and devoted almost all their energies not required by hunting to constant and purposeless warfare featuring the torturing to gruesome death of women and children. Their talents were great and they were often impressive and handsome men and women. They have many just grievances that remain unredressed, but they were millennia in arrears of the civilizations of Europe and would have benefitted tremendously from progress, had that progress been introduced in a far less destructive way.

For which his lordship was immediately branded a crypto-racist. Being Conrad Black he naturally threatened to sue anyone foolish enough to step out from behind the euphemisms. Which is exactly what I would do if I was him. Conservatives are routinely branded as racist for no greater crime than disagreeing with the consensus of the moment. The historical consensus of the moment is that Western Civilization is a plague that infected North America thanks to villains like Champlain and Cartier.

Black is entirely correct in portraying these men, for all their faults, as heroes opening up new possibilities for human development and well being. Consider just one point: Imagine the world of 1940 in which Canada and America did not exist, in which Britain truly stood alone without any chance of outside help. Considering that nightmare is enough to remove from doubt the essential nobility and value of the Canadian and American projects. 

Not being an envious Leftist, or a believer in Rousseau's noble savage, let me take this time to thank Lord Black for writing the above. This is exactly the appropriate response to take regarding the European settlement of Canada. The aboriginals, for all their genuine virtues, were a collection of primitive societies that were easily eclipsed, despite all their sins, by those of western Europe. The great tragedy is not that Europeans settled on this continent, it was that they failed to settle it in a sufficiently humane manner.

 

Wednesday Night - The Life and Death of Colonel Blimp

Nathaniel Branden Dead at 84

NYT:

For the next decade, theirs was a distinctive and largely productive collaboration — at Ms. Rand’s insistence, both of their spouses knew of their extramarital relationship, though few outside their inner circle did — and it raised both her profile and his. Founded in New York, the Nathaniel Branden Institute grew to have branches in dozens of cities. Among its speakers was Alan Greenspan, the future chairman of the Federal Reserve Board.

[...]

In the summer of 1968, Ms. Rand announced in an article for The Objectivist magazine that their collaboration was over, claiming that both of the Brandens had taken financial advantage of her. The Brandens publicly denied the charge.

Scenes From The Imperial Capital

A Platonic Relationship

Cheer leading the CBC:

Canada is a thinly populated, highly decentralized, loosely federated bilingual country spread out along the top of the splendidly loud, raucous and media-saturated American scene. It should be beyond debate that Canada needs some kind of publicly-funded media agency with an ambitious mandate to nurture culture and produce serious, outward-looking public-interest journalism.

Which it did for about five minutes in the mid-1960s. There is the CBC that exists in reality, the CBC that no one watches or really cares much about. Then there is the CBC that exists in the mind of its defenders. The CBC that may have at some point existed, albeit briefly, but never quite as anyone remembers it. The Mother Corp's dwindling band of supporters think of it as they think of Canada; a bundle of vaguely patriotic abstractions carefully divorced from the frigid realities of daily life.

There is little point in reminding the reader that the CBC is a government subsidized anachronism that, so far as it ever made sense, made sense when men still walked around wearing fedoras and chain smoked at office desks. Though in fairness it's unlikely Don Draper would have ever watched anything quite so lame.

If a thing lacks either beauty or utility the sensible thing is to get rid of it. Yet the Mother Corp survives. The seemingly indestructible zombie of the Canadian media landscape. The CBC continues to exists not because it's relevant but because it's too much trouble to kill. The Conservatives are afraid of pulling the plug because they'll be attacked for silencing their critics, the Liberals are afraid of firing their most loyal supporters and the NDP has an ingrained resistance to cutting things loose, however useless. See Chow, Olivia. 

Take the frequently used line by the CBC's defenders and erstwhile allies: We need the state broadcaster to ensure a national conversation. Thing about conversations is that at least two people are required. Otherwise you're just talking to yourself in a dimly lit room. There are terms to describe people like that and defender of the Canadian nationalist faith isn't one of them.

This is more than just beating a dead public policy horse. The CBC's absurdity is not as fascinating as what it reveals about the Canadian Left's mindset. As a life-long resident of the Imperial Capital I can attest to the prevalence of the CBC Friend. This Friend will wear CBC buttons, buy CBC apparel and speak passionately about the value the CBC provides to Canadians of all ages, ethnic backgrounds and regional localities. About once a week they'll muster up their patriotism and spend twenty minutes slogging through whatever's on Radio One before switching back to classic rock. 

The CBC Friend is to the CBC as Sunday Catholics are to Christianity. Piety bleeding into righteous hypocrisy. Which would be fine really. Except that Sunday Catholics don't dip into my pockets. Messers Baldwin and Lafontaine mostly separately Church and State in Canada. Unfortunately Mackenzie King made a point of not separating Broadcasting and State. The basic conceit remains the same in either case: My Truth is so True and so Right that everyone else must pay for it.

But the Truths that the CBC promotes go far beyond whatever Peter Mansbridge is grumbling about tomorrow night. They are a vision of Canadian society that most Canadians find unrecognizable. It's been joked for years that the CBC doesn't tell Canada's story to Canadians, it tells Canada's story from Torontonians. This explains the special smugness about the reporting that simply isn't found elsewhere in the country. Not even in Ottawa.

There is no ideal CBC living somewhere ready to be found. It is what it has always been: A rent-seeking apparatus of the mediocre; granted a soupcon of legitimacy by the handful of genuinely talented journalists who have worked at the Mother Corp over the last eight decades. The long gun registry went, the CWB is dead and the CBC's turn will, eventually, come. 

Tuesday Night - Handel

Your Lizzy May Story of the Week

She's sweet in a crazy kind of way:

Green Party Leader Elizabeth May put forward a bizarre petition in the House of Commons Wednesday asking the government to support a popular 9/11 conspiracy theory.

The member of Parliament for Saanich-Gulf Islands rose to “present a petition, from petitioners in Alberta, British Columbia, Ontario and particularly in the Ottawa area, calling on the Government of Canada to conduct a parliamentary review into the events that occurred in the United States on September 11.”

As the article goes onto explain MPs routinely, as a matter of duty rather than law, present petitions they do not agree with. The issue here isn't that Lizzy is a 9/11 Truther, she denies it, it's that she has the judgement of a small child. 

Scenes From The Imperial Capital

One Born Every Minute

Governments make plans and businesses laugh:

On Wednesday, Joe McCabe, president of AutoForecast Solutions, sounded a fresh warning on General Motors, saying he expects the auto giant to pull out of Oshawa and reduce its Ingersoll, Ont., plant to a single shift, perhaps by 2019.

If you're wondering why...

GM’s promise to maintain 16 per cent of its production in Canada in return for its 2008 bailout expires in 2016.

McCabe said the automaker is not making plans for continued production in Oshawa.

If you didn't see that coming you're probably a Liberal cabinet minister. For those who may have forgotten the details of the 2008 bailout:

It was a costly exercise. The federal and Ontario governments loaned $13.7-billion to the two companies in fiscal 2009-10. That was 38% of the $36-billion in corporate income tax revenue collected by both governments that year.

But we made all that money back, right? 

After subtracting the partial repayment made by both companies, the governments’ sale of some shares obtained via the bailout, and the present value of GM stock still held by the two governments, taxpayers are still out $810-million on the Chrysler bailout and $4.74-billion on the GM loan. That’s an estimated $5.5-billion loss, which will fluctuate only slightly, depending on the final GM share price when governments relinquish their remaining shares.

At least jobs were saved:

On jobs, three years later, the current employee count in Canada is 10,000 at GM (down from 12,000 in early 2009) and 9,000 at Chrysler (down from 9,800 in 2009). Using present employee counts, that means taxpayers offered up a $90,000 subsidy per Chrysler employee and a $474,000 subsidy per GM employee. (The company-only estimates are fair calculations; in the absence of GM or Chrysler, lost spinoff jobs at auto-parts manufacturers and dealerships would have been at least partly restored by either the two post-bankruptcy companies or by other automotive companies.)

As the above author, Mark Milke of the Fraser Institute, notes every years thousands of Canadian companies go bankrupt and hundreds of thousands of jobs are destroyed. As with the car industry each job in any sector of the economy has a multiplier effect. The federal government spent a small fortune to temporarily save a few thousand jobs concentrated in a handful of ridings.

Now think of the thousands of jobs destroyed in other sectors of the economy in order to subsidize this politically convenient payout. Think of the hundreds of thousands of workers who can ask, with some legitimacy, why their jobs weren't saved when their firms reached the bankruptcy courts. The workers whose jobs weren't created, the employees at smaller firms without the same political clout, their voices don't matter. 

The bailouts of GM and Chrysler, which mercifully have not been repeated, are usually justified on the grounds of special pleading. The bailouts' defenders will argue that while, usually, bailing out inefficient companies is a bad idea, the weakest of the Big Three are too big and too important for the normal rules to apply. Their supply chains too extensive, their pension and health benefits too vital to thousands to be allowed to collapse. The value of saving this eco-system was so great that a few billion dollars seems a trifle. 

But how do you know? If nearly half a million dollars per job is good bargain what is a bad bargain? At what point is a company not too big too fail? The brutal fact of 2008-2009 was that the demand for automobiles contracted dramatically and the industry's two structurally weakest players were about to be drive out. The government was, in essence, paying workers to produce something that no one wanted or needed at the time. There is still so much excess capacity that, as looks likely, GM is planning on slashing its production in Canada to a corporal's guard. 

What applies to GM applies all along its supply chain. The GM supply systems were making a product that simply wasn't wanted anymore, or at the very least not wanted to the same extent. Certainly customers were keen enough to buy Ford, Nissan or Toyota's offerings. GM and Chrysler were selling unwanted products at unreasonable prices. No amount of economic legerdemain can alter that basic economic fact. Nor was this a sudden occurrence. GM has been bleeding market share for decades. The 2008 bailout was Chrysler's second in thirty years.

Firms and the jobs they create exist to produce a value for the rest of the economy. Profit and loss aren't simply abstract accounting concepts they ultimately represent products and services demanded by society. A firm that loses money is a firm that had destroyed more value than it has created. A government bailed out firm is one that has forced the rest of society to continue subsiding its value destroying ways. A loss for GM represents a total loss for its whole ecosystem, not just itself. Combined they were destroying more wealth than they were creating. 

In situations where firms are temporarily weak, because they are new or have undergone a crisis, capital markets can aid firms to cover their losses through debt and equity financing. This financing is always conditional on the reasonable prospect of the firm's weakness being temporary. There is a reasonable chance that at some point the firm will grow from start-up to a genuinely going concern. In the not too distant future the weakened firm's debt will be repaid. If there is no reasonable prospect of either the capital markets will close their doors to further lending. 

The weaknesses at GM and Chrysler were not temporary, they reflected deep structural flaws in the firms' debt servicing and employee benefit schemes. Even without the 2008 financial crisis it's unlikely that Wall or Bay Streets would have been keen to continue underwriting GM and Chrysler's anemic existence. The bailout was a political not a financial or economic decision. It was a vote buying, or saving, exercise supervised by two nominally conservative governments on both sides of the 49th.

Osama Bin Laden is dead and, quite soon, GM Canada will likely be dead too. 

Monday Night - Gladstone and Disraeli

"100 human brains go missing at Texas university"

Liberal MPs are the prime suspects:

"It's entirely possible word got around among undergraduates and people started swiping them for living rooms or Halloween pranks," psychology professor Lawrence Cormack told the paper.

One of the missing brains may be that of ex-Marine Charles Whitman, who was shot by police after killing 16 people in a 1966 shooting rampage from the top of a clock tower.

The school, which uses the brains as a teaching tool, agreed to remove identifying data from the specimens when it took them in, the newspaper reported, citing a psychology professor.

 

Scenes From The Imperial Capital

Solving Non-Problems at the Speed of Government

An anti-trust lawsuit that shows again the absurdity and irrationality of anti-trust laws:

The case involves two plaintiffs, Melanie (Tucker) Wilson and Marianna Rosen. Both are consumers who purchased audio downloads and iPods directly from Apple. They argue they paid more for iPods than they would have paid if Apple hadn't violated antitrust regulations. In a 2010 filing, the plaintiffs said they "suffered injury" to their property "in the form of overcharges." A third plaintiff, Somtai Troy Charoensak, dropped out of the case.

If you didn't get that the article elaborates:

The case isn't about iTunes pricing, though. The plaintiffs say because music from other stores wouldn't work with iTunes and iPods, customers were forced to buy more music directly from iTunes. When it came time for consumers to buy new music players, they had to buy iPods because of all the iTunes music they owned. Because demand was higher for iPods, the prices increased, causing consumers to overpay for Apple's music players, they say.

And if my grandmother had eaten only oranges I'd be a millionaire today. 

This is not so much a legal argument as a series of arbitrary assumptions, outright falsehoods and absurd leaps of logic to justify a class action lawsuit. Even by the perverted standards of modern American justice this is nonsense on stilts. The suit covers the millions of iPod purchasers between 2006 and 2009, which would also include me. I don't want the few pennies this suit might unjustly entitled me to. The financial demand from Apple is $350 million. Petty change for the world's most successful company. But petty larceny is still larceny.

When I bought my iPod in 2006, they were cool back then, no one forced me. An Apple employee was not standing at the entrance heavily armed ready to blow me to Kingdom Come. I suspect my experience was pretty much universal. Millions of people willingly paid hundreds of dollars to buy what was, at the time, a state of the art product. The cache, I have to admit, was impressive. People literally stopped me in the streets when they saw me use it. And this was five years after the original iPod was released.

Then there is the stretch of logic that I was compelled to buy from iTunes. Actually there was a very simply work around to the DRM system at the time. Burn the music to a CD then rip the music to another MP3 platform. I'm a liberal arts major. Trust me it wasn't that difficult. This was a loophole that could have been closed fairly easily, much like the various cheats Canadians use to access American Netflix today. Yet Apple never bothered to close them. That would tend to suggest that their heart was never really into the DRM model for music. 

While various nefarious motives were ascribed to Apple's policy at the time, it's a big company and many geeks have an odd Leftist limp, the officially stated reason by Steve Jobs was that the record companies insisted on DRM. In January 2009 Apple struck a deal with the major record companies to completely remove DRM from its musical offerings. 

You can argue that Apple was bowing to public pressure, or more likely to the simple commercial logic that DRM limits the value of any platform by limiting its inter-operability, still Apple did respond to market forces. It did so nearly six years ago. But now the courts are getting around to solving a problem that wasn't really a problem. In fact so far as it was a problem it was solved by Apple itself more than half a decade ago.

The entire case rests on the assumption that iPod prices were inflated because of Apple's DRM practices, though it's impossible to provide empirical evidence to support such a statement. The plaintiffs are hoping that the judge will assume that it was likely that such practices had some impact, however marginal, on pricing strategy. This is despite the obvious fact that DRM reduces the value of the network effect. I would be less likely to buy a product knowing that I would be "trapped" with the same supplier on an ongoing basis. This is especially true when other products were on the market without such restrictions. 

But anti-trust laws aren't simply absurd, recall similar cases against IBM and Microsoft in their respective glory years, they are also terribly slow. A famous case against IBM dragged on for more than a dozen years at which point the product in question was completely obsolete. The same thing is happening again. In the time it has taken this case to come to trial Steve Jobs has died, the DRM issue for music has gone away, the iPod is at the end of its lifecycle and iTunes is on the verge of being eclipsed by music streaming services. By the time the judge issues a ruling I fully expect Zefram Cochrane to have broken the light barrier. 

You can dismiss this lawsuit as a legalize mugging and so it is. But the real criminals aren't the plaintiffs, loathsome though they are, it's the law makers that have refused to repeal the Alice in Wonderland comedy that is America's Anti-Trust laws.

Friday Night - Peaky Blinders