Healthcare: More Is Less

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There was a time when insurance companies focused on actuarial tables while physicians focused on diagnosis and treatment. But not any more! Now insurance companies are raking in the premiums — double what they were five years ago for many customers — while doing everything in their power to reject claims. Patients are more afraid of the insurance agent than they are of the disease.

In the past month alone, my daughters have had four hefty medical claims rejected, including a medication prescribed to control chronic seizures and a gallbladder removal that was deemed “elective” by the insurance company! What is the point of buying insurance if you can’t use it? And how can the market respond to customer dissatisfaction when government regulation gives insurance companies so much power?

Insurance companies are raking in the premiums — double what they were five years ago for many customers — while doing everything in their power to reject claims.

I raised five active, rambunctious, rough-and-tumble children across three decades, and while I worried occasionally about their health and safety, I never worried about how I would pay for their healthcare. My relationship with insurance companies was straightforward and consistent. Our copay was consistent. Our deductible was consistent. If one of the kids was injured, I could call my favorite orthopedic practice without worrying that the claim would be rejected on the grounds of some esoteric technicality. When my daughter developed epilepsy, I was proactive in finding the right doctor, the right diagnosis, and the right treatment that has kept her virtually seizure-free for 15 years — until her current insurance company decided that the medication her doctor has prescribed for those 15 years will not be covered.

In the past five years, everything has changed. Suddenly it’s the insurance agent, not the physician, who decides what the patient needs by deciding whether it will be covered. Insurance premiums are so high that few families can save enough to cover out-of-pocket expenses, yet everything is becoming an out-of-pocket expense. My daughters find themselves owing nearly $15,000 in uncovered medical expenses in a single month — and they have insurance!

In the past month alone, my daughters have had four hefty medical claims rejected, including a medication prescribed to control chronic seizures and a gallbladder removal that was deemed “elective."

American healthcare, once the best in the world, is collapsing under the weight of over-regulation and crony capitalism that favors the insurer over the healer. Rand Paul, the only actual physician in the US Senate, has been locked out of discussions about healthcare reform. Let’s hope it all collapses soon, so the free market can rebuild from the ashes.




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The Democrats and the Zombie Horde

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I’m not gushing with praise about President Trump’s big speech on February 28, but one of his actions on March 1 does make me gush a little. I chose that verb with cunning: it alludes to his signing of an executive order striking down President Obama’s “Waters of the United States” rule, which gave the EPA the authority to harass people who try to do almost anything about the water on their land, even if the water is nothing but ponds or “vernal pools” (i.e., puddles that show up when it rains). And when I say “harass” I mean harass. The EPA has tried to make malefactors pay tens of thousands of dollars a day in fines.

I usually don’t like to talk about social classes, because the Marxists made such a mess of that, but the rule that Trump wants to get rid of is class legislation of a familiar but very pernicious kind. It’s like all the rules that Democrats have made forbidding you from getting the lightbulb you want or building a house near the suspected hive of some rare insect or drilling for oil in some area that no one ever visits but some environmentalist organization has located on a map and now derives financial support for “caring about.” Such rules — such under-the-table legislation — are meant to help well-off people who live in cities have good feelings or to help their kids get jobs “advocating for the environment,” at the expense of people who work with their hands on farms or oil rigs, or who simply want to maintain a decent environment for themselves. This is legislation that takes wealth (whether money or psychic benefits) out of the control of one group and gives it into the control of another group, which is ignored or ridiculed if it protests.

While he talked, the people in the background sat immobile, staring into space, not daring to move a muscle.

The Democratic Party is the main (not the sole, but the main) engine of class warfare in America, and its view of the exploited class — i.e., the broad mass of people who are hurt by its policies, but have to pay for them — has never been indicated so clearly as it was by the Democrats’ response to Trump’s oration. The Democratic leadership has identified what it thinks is the cause of all its problem: older, white, working-class people who live in that strange, virtually unknown region west of the Hudson and east of Hollywood. So it arranged for a retired Democrat governor from Kentucky, who looks about 180 years old, to sit in a diner in his home state, backed by other white people, mainly old, and talk in a strong Southern accent about himself, his religious connections, and his identification with po’ people and the workin’ class. While he talked, the people in the background sat immobile, staring into space, not daring to move a muscle. This, in the professional Democrats’ view, is the Other that must be tricked into continued subservience to us — the Other that can best be tricked by images of itself as a collection of zombies.

Yes, come to think of it, I do believe that Marx might have had something interesting to say about this.




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Hidden in Plain Sight

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One of Donald Trump’s first acts as president was to order federal agencies to repeal two regulations every time they propose one.

This is an action that requires some followthrough. It can easily be twisted or ignored by unwilling bureaucrats — and what Washington bureaucrat wants to obey President Trump? If the boss doesn’t watch out, somebody in Ring 3, Floor 9, Office G, Cube 2B will fulfill the departmental quota by rounding up ten nasty little regs, withdrawing them, and issuing one big, ten-part, much nastier reg.

We’ll see whether the followthrough happens. But the idea itself seems exactly what libertarians and conservatives have been waiting for. As someone who is more or less actively engaged in sorting through old books and files, so I can get some space to live in, I’ve made a personal commitment to throw out two boxes of junk for every new box of junk I acquire. This makes sense to me, and if I ever follow through on the scheme, it may work.

If the boss doesn’t watch out, somebody will fulfill the departmental quota by rounding up ten nasty little regs, withdrawing them, and issuing one big, ten-part, much nastier reg.

Trump’s idea should be crucially interesting to modern liberals, though in a different way. Their power and often their jobs depend on the proliferation of rules, of people who make rules, of people who interpret and enforce rules. That’s them, the modern liberals, so I would think their eyes would be firmly focused on Trump’s attempt at a de-rulement.

Yet neither liberals nor libertarians nor conservatives are paying much attention to Trump’s apparently fundamental change in the way the government works. Even when they notice it, they don’t seem to care very much. On February 2, the famous (for what, I’m not exactly sure) Fareed Zakaria wrote a column in the Washington Post in which he approved of Trump’s action — but only as a public foil for his dislike of Trump. Zakaria’s point was that although he liked the reduction of regs idea, he objected to the president otherwise, especially detesting his administration’s attempt to “delegitimize” “any institution or group that might stand in its way.”

To me, this approach seems a little one-sided. We have lately been exposed to seemingly endless videos of people — often Senators, attorneys, professors, and other elderly rioters — noisily insisting that Trump is not the president and that all his acts are unlawful, vicious, racist, misogynist, and fascist. It seems clear to me that there’s a whole lot of delegitimizing going on, besides Trump’s desacralizing of, for instance, the media in which Zakaria swims.

So much for Zakaria, and so much for Trump. What is not clear to me is why no one is making a big deal, one way or the other, out of this thing — reducing regulations — that Trump actually did. To me, the lack of reaction is a riddle wrapped in a mystery wrapped in something I can’t figure out. Do you understand it?




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I Hate When That Happens

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American manufacturing, once the principal source of American economic power, has become a pale shadow of the world-dominant competitor it was only 30 years ago. Although the productivity of American workers still vastly exceeds the worker productivity of all major manufacturing economies, America has become a laggard in the global marketplace. For decades many have bemoaned the descent of America's industrial power. Now they say that the decline has been the result of economic misfortune: globalization, technological advance, foreign competition, unions, and so forth.

The actual misfortune is that US economic policy has been formulated by feckless politicians in Washington DC. It's as if the nebbish Willie (from the “Willie and Frankie” sketches of Saturday Night Live fame) had been behind it all. Because Willie had no grasp of causality, his life was fraught with excruciating experiences, experiences of his own making. In one skit, he came up with a scheme to test mouse traps, only to discover that "the thing came down right on my tongue!" It was an accident, even though "after 40, 50 times, I . . . I . . . I couldn't even feel the cheese." With each painful incident (which included encounters with a meat thermometer, a ball-peen hammer, and a self-threading film projector), the baffled Willie sullenly whined, "I hate when that happens."

Since the turn of this century, 5.7 million American manufacturing jobs have been lost, and the US trade deficit has soared. According to a Council on Foreign Relations study, "between 2000 and 2012, the cumulative total of U.S. spending on imports of goods and services exceeded U.S. export earnings by $7.1 trillion dollars." For manufacturing workers and, for that matter, most Americans, there has been no recovery from the recession of 2008. Two of the Willies that deserve special thanks for this misfortune are former President Bill Clinton — for his role in causing the recession — and current President Barack Obama — for his role in causing the non-recovery.

Although the productivity of American workers still vastly exceeds the worker productivity of all major manufacturing economies, America has become a laggard in the global marketplace.

It's a safe bet that in none of the 542 speeches given since he left office (for which he has reaped $104.9 million) did Mr. Clinton mention how his policies caused the housing bubble and the financial crisis. These policies (deregulation of credit-default swaps, spurious use of the Community Reinvestment Act, and shenanigans with Fannie Mae, Freddie Mac, HUD, and other organizations, to name a few) were discussed here (“Sticking It To Wall Street”), and the following week, at Reason (“Clinton’s Legacy: The Financial and Housing Meltdown”). They set the stage for the recession that occurred seven years later, no doubt to Clinton's astonishment.

The Clinton legacy also included the unfortunate accidents that followed the North American Free Trade Agreement (NAFTA), passed in 1993, and permanent normal trade relations (PNTR) for China, granted in 2000. Clinton expected NAFTA to increase US exports and therefore jobs (one million in five years, he promised). Instead, according to a recent Public Citizen report, "millions have suffered job loss, wage stagnation, and economic instability from NAFTA." The export of manufactured products from the US dwindled and the trade deficit with Mexico and Canada shot from $27 billion in 1993 to $177.2 billion today. And the economic chaos that engulfed Mexico prompted "a new wave of migration from Mexico."

Granted, Public Citizen is an anti-NAFTA advocacy group, but its claims are substantiated bytrustworthy sources — namely the US International Trade Commission (for the NAFTA trade deficit data, p. 7 of the report) and the Economic Policy Institute (for the job loss and wage decrease data, p. 8). Ironically, the immigration spike was caused by one of the few US export benefits from NAFTA. With NAFTA, Mexico eliminated its corn subsidy, but the US did not. Asa result, “seventy-five thousand Iowa farmers grew twice as much corn as three million Mexican farmers at half the cost." As subsidized U.S. corn flooded into Mexico, displaced Mexican farmers flooded into the US, greatly contributing to the surge of illegalimmigrants, from 4.8 million in 1993 to 11.7 million by 2012 (p. 22).

For manufacturing workers and, for that matter, most Americans, there has been no recovery from the recession of 2008.

NAFTA has paid off well for US corn farmers. American workers who, in the wake of the immigrant influx, lost their jobs or saw their wages shrink, have come up a little short. As have American taxpayers, who foot the bill for the subsidies awarded to corn industry cronies. This should not be confused with the bill from their cousins, the ethanol industry cronies, for subsidizing the ethanol scam — the ongoingenvironment-friendly fuel program, whose accidents include increasedair pollution, water contamination, soil erosion, andgreenhouse gas emissions, as well as increased prices for gasoline, automobiles, farmland, and food.

Clinton had loftier expectations in his efforts to help China gain World Trade Organization (WTO) membership. But instead of wielding American economic power to establish a level playing field for US industry, Clinton followed the wishes of Wall Street power, which did not extend to protecting US manufacturers from the mercantilist antics of brutal, authoritarian states such as China. As Robert Kuttner explained in “Playing Ourselves for Fools”:

In 1999, when China was negotiating its entry into the WTO, it was a lot weaker economically and financially, and the stench of the Tiananmen massacre still lingered, the U.S. had far more diplomatic leverage than the rather pitiful show of humility befitting a debtor nation displayed on President Barack Obama's recent maiden trip to Beijing. But as the memoirs of both Robert Rubin and Joseph Stiglitz confirm, that leverage was used mainly to gain access for U.S. banks and insurance companies to Chinese markets, not to require China to modify its system of predatory industrial mercantilism.

Clinton promised that China's admission to the WTO would provide the US with a vital trading partner who would change its ways and "play by the rules"; trade with China would "increase U.S. jobs and reduce our trade deficit." All the experts agreed. Then presidential candidate and fellow Willie, George W. Bush, agreed. "It is primarily U.S. exporters who will benefit," echoed the Cato Institute. It would be “a win-win result for both countries,” said Clinton, that could only "grow substantially with the new access to the Chinese market."

Alas, the tremendous US-China trade that ensued has, to date, resulted in the loss of 3.2 million American jobs, a US trade deficit with China of almost $500 billion (that grew from $100 billion in 2001), and, according to the New York Times (“Come On, China, Buy Our Stuff!”), American exporters are still waiting for the payoff. The main reason: currency manipulation by China's Central Bank makes American products more expensive to Chinese consumers. Furthermore, our trade deficit, which enables such manipulation, allows China to use its surplus of US dollars to purchase US Treasury bonds, which, in turn, enables the US government to plunge itself more deeply into debt (now at more than $18 trillion), with US taxpayers paying interest for the privilege.

Instead of wielding American economic power to establish a level playing field for US industry, President Clinton followed the wishes of Wall Street power.

American consumers have benefited, but foreign competitiveness has suffered. As a percentage of GDP, US manufacturing has shrunk from 14% in 2000 to about 11% today. According to a recent Economic Policy Institute study, of the 3.2 million jobs shed by our trade with China, 2.4 million were manufacturing jobs. Moreover, trade with low-wage countries such as China "has driven down wages for workers in U.S. manufacturing and reduced the wages and bargaining power of similar, non-college-educated workers [a pool of 100 million workers] throughout the economy."

Under Clinton's version of free trade, the outsourcing of American production, jobs, and technical expertise has flourished. To participate in such trade, observed Kuttner, many US manufacturing companies engage in

deals to shift their research, technology, and production offshore, sometimes in exchange for explicit subsidies for land, factories, research and development, and the implicit subsidy of low-wage and powerless workers and weak environmental or safety requirements. At other times, the terms of the deal are more stick than carrot: If you want to sell here, the companies are told, you must manufacture here. Or even worse, you can manufacture here but only for re-export to your own domestic market and not for local sale.

Describing Clinton’s legacy, the Huffington Post called him the "Outsourcer-in Chief," saying that

Manufacturers never emerged from the 2001 recession, which coincided with China's entry into the World Trade Organization. Between 2001 and 2009 the U.S. lost 42,400 factories and manufacturing employment dropped to 11.7 million, a loss of 32 percent of all manufacturing jobs.

But things are booming in China, which, thanks to US investment in the expansion and modernization of its manufacturing sector, has now surpassed the US as the world's leading exporter, and in our federal government, which now employs twice as many people as the entire American manufacturing industry — an industry to which Clinton could say, "The thing [WTO deal] came down right on my tongue!"

If Bill Clinton was the Outsourcer-in-Chief, then Barack Obama is the Regulator-in-Chief. With annual federal regulatory compliance costs now at an astounding $1.9 trillion, no one has done more to increase the cost, and decrease the desirability, of doing business in America than Mr. Obama. His regulatory obsession has exceeded that of George Bush, who, in eight years, increased regulatory costs by $318 billion. Obama has increased it by $708 billion, in only six years.

Unhindered by a timid Congress that has consigned its legislative powers to regulators, there's no telling how high Obama can drive regulatory costs during his final two years. But American manufacturing is doubly harassed by existing regulatory overreach, paying a staggering $20,000 per employee in annual compliance costs, compared with $10,000 for the average US firm. The cost is $35,000 per employee for small manufacturers (<50 employees), who, if they can't feel the cheese, can smell the pungent odor of our federal government.

The stagnation that began creeping into the economy under Bush is in full stride under Obama, with GDP growth averaging little more than 2% since he took office. Unconventional oil and gas production (i.e., fracking of oil and gas deposits, mostly on non-federal land) has been the only bright spot. Without fracking, even this tepid GDP growth would have been impossible. With fracking, says the Cato Institute, oil and gas prices have plummeted, increasing disposable income by $1,500 per household, 2.5 million jobs have been created, and a tax windfall of $100 billion has been garnered by government.

No one has done more to increase the cost, and decrease the desirability, of doing business in America than President Obama.

After almost seven years of stagnation, the US economy — with its shrinking middle class and its growing cohort of 55 million jobless working age adults, all desperate for a meaningful recovery from the recession of 2008 — has enthusiastically welcomed the fracking revolution. Mr. Obama's greeting has been less ardent. After almost seven years of tightening drilling regulations, his response has been to tighten fracking regulations, followed by more plans to tighten fracking regulations.

Existing regulations "are more than 30 years old, and they simply have not kept pace with the technical complexities of today’s hydraulic fracturing operations,” explained Interior Secretary Sally Jewell. Nor has the 40-year-old crude oil export ban, which is no longer needed, now that the US is flush with oil and gas. Free trade in US energy would help reduce our trade deficit, our national debt, and our dependence on foreign energy. Surging US oil production has been responsible for plummeting global oil prices, thereby improving our national security with respect to countries and terrorist organizations whose bellicosity depends exclusively on oil revenues. Additional production, therefore, would further enhance US security and would likely reduce the frequency with which thugs such as Vladimir Putin and Ayatollah Ali Khamenei embarrass our president.

Crudely Put,” an article that explains the folly of this archaic ban, alludes to Putin's crushing energy grip on Europe and the reason for America’s reluctance to export more energy. Last February, Vaclav Bartuska, the Czech Republic’s energy envoy, pleaded with "American policymakers to liberalise energy exports . . . to safeguard allies under pressure from Russia," and asked, "if freeing crude exports makes America richer, its allies stronger, its foes weaker and the world safer, what stands in the way?" Willie Obama's colossal green mousetrap, of course.

This from the man who promised shovel-ready jobs, then green jobs, and now brags about the low-income jobs created under his stifling reign.

Perhaps American manufacturers will have better luck with Mr. Obama's new free trade brainchild, the Trans-Pacific Partnership, which gives him "fast-track" authority to negotiate trade deals with Pacific Rim countries. Covering the legislation's East Room signing ceremony, Politico's Sarah Wheaton noted its bipartisan support, usually a good sign. But the more telling sign, Wheaton indicated, may have been discerned by the pianist in the Grand Foyer, who played "understated renditions of the theme to ‘Charlie and the Chocolate Factory’ and ‘Puff the Magic Dragon,’ songs depicting fantasy worlds undone by cynicism and lost innocence."

Reminiscent of Clinton's trade deal confidence, Mr. Obama stated that he was "absolutely convinced that these pieces of legislation are ultimately good for American workers." This from the man who promised shovel-ready jobs, then green jobs, and now brags about the low-income jobs created under his stifling reign — while middle-income manufacturing jobs languish.

Last November, Mr. Clinton conjectured, "NAFTA is still controversial but people will thank me for it in 20 years." He might as well have bit his lower lip and said, "after 40, 50 years, we  . . . we . . . we will feel the cheese." It will take much longer for American manufacturing to thank him for hustling China into the WTO. And who knows how long it will "ultimately" take for manufacturing workers to thank Obama for the trade deals that he hopes to negotiate — deals with trading partners who cannot be controlled by the $2 trillion regulatory mousetrap that punishes American manufacturers. It is a mousetrap with a spring force that Obama has increased by $708 billion. And, as the thing comes right down on his tongue, he orders costly new climate change regulations — to be paid for by US manufacturers, and ignored by their foreign competitors.

Federal trade and regulatory policy, not foreign competition and unions, is responsible for the decline of American manufacturing. Free trade, whose banner is routinely hoisted to adorn trade negotiations, exists only in the delusional minds of our hapless political leaders. Indeed, that American manufacturers must conform to inordinately higher standards (of trade, finance, health, safety, environment, etc.) than their foreign competitors is considered an achievement by the causality-challenged Obama. Green ideology, not economics or trade, is his forte. Officious regulation, not sound industrial policy, is his goal. As to the unfortunate accidents — chronic economic stagnation, declining household income, growing income inequality, immense pubic debt, enormous trade deficits, shrinking geopolitical power, and waning foreign competitiveness — that have befallen his presidency, he hates when that happens.




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So, What Did You Do All Day?

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In the company I run, my partner and I have over 70 employees. Crazy. Business is good but stressful.

I just finished the latest meaningless HR task that small business owners must do: creating a “safety binder” for every single chemical in the office, with printouts of the numerous-page Safety Data Sheets from each product’s manufacturer, and with first aid information. “Every chemical” includes printer toner, dish soap, dry erase markers, WD-40, glue sticks, antibacterial wipes . . . the list is long, and the SDS sheets can be up to 11 pages. The Safety Data Sheets list such things as toxicity to fish and what to wear if you are in a plant that manufactures the dangerous item.

And this means he won’t sue us? Of course he will sue us. But maybe we will be spared the guillotine.

So, if an employee squirts hand sanitizer in his eye, he can get the safety binder and flip to the page that tells what to do if you have hand sanitizer in your eye. Or if he eats Windex, he can likewise turn to the safety binder. And this means he won’t sue us? Of course he will sue us. But maybe we will be spared the guillotine because we have shown such caring by having a bright red safety binder.

On a more practical note, I’ve bought three fire extinguishers, a huge first aid kit, and those continuous charge flashlights that plug into walls. Next on my list is choosing safety officers, devising a fire drill, and conducting it. My partner wants to get some of those bright orange vests. I’m thinking about it.

By the way, I have not done anything even remotely related to our product in a very long time.




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Equal Pay for Equal Work

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Once again equal pay for men and women doing presumably equal work has become a live political issue. If Congress can achieve fair pay by passing still another law, why not?

But what is equal work? Is it the same numbers of hours spent? Is it work in the same industry or other category, broadly or narrowly defined?  Is it work typically done by people with similar levels of education as proxied by diplomas and degrees? Are what economists call “compensating differences” unfair — differences in pay for work considered particularly risky or boring and work found attractive in itself? More plausibly, does fair pay mean equal pay for work appearing to promise the same addition to the revenue or profit of a business firm? If so, as judged by whom? Without attention to availability, productiveness, and costs of materials, energy, and other things bought, including the many kinds of labor, a firm would go broke.

More equal-pay legislation will add to the burdens already borne by business firms, perhaps especially small businesses.

An economic system coordinated otherwise than by market transactions and the interplay of prices, profit, and loss would be very different from the system that has brought prosperity to the Western world. A market economy puts to good use vast amounts of knowledge both specific and widely dispersed. This knowledge, as well as informed conjectures, exists in the minds of millions and billions of consumers, employees, job candidates, entrepreneurs, and owners and managers of business firms and other organizations. Knowledge of how to conduct and mesh their activities simply could not be centralized for effective use by planners and regulators. The writings of Mises and Hayek (and, earlier, Henry George), reinforced by experience in Communist countries, have taught us this lesson. Even if, per impossibile, this knowledge could be centrally deployed, politicians would have incentives to disregard much of it.

Business owners and managers, sometimes aided by specialist consultants, can best judge how to structure their workplaces and employ the people most likely to contribute to profits. Supply and demand interacting on markets, including the labor market, contribute to these judgments. Business losses tend to weed out bad judgment of these kinds, while profits tend to reward good judgment.

Employers must judge how likely employees or job candidates are to fit in well with their businesses. How likely is a person to be available for working long or irregular hours on short notice or for shifting among assignments and geographical locations? How committed is the person to a career, or how likely to quit or interrupt work for family or other reasons or to request many hours or even months of paid or unpaid leave? How likely is the person to generate profitable new ideas? How likely to get along well with customers, colleagues, and supervisors? Or how likely to prove obnoxiously litigious? A good matching of jobs and employees benefits all concerned.

Realistically, of course, employers cannot have all the detailed and ineffable knowledge necessary for ideal decisions. They must make judgments based on categories, experience, probabilities, statistics, and hunches, and perhaps sometimes even on stereotypes. These regrettable gaps in knowledge are not blameworthy or avoidable, although detailed experience and practiced intuition may shrink them. The system of markets, profit, and loss tends, at least, to reward or punish good or bad business judgment; nothing similar weeds out bad legislation.

Government regulators drift into thinking that their own work is important.

More equal-pay legislation will add to the burdens already borne by business firms, perhaps especially small ones. These will include the burdens of keeping records of and reporting on job interviews held or not held, performance reviews, job categories and modifications, and innumerable other things. Risks compound the burdens, including risks of being second-guessed about honest judgments and of dubious statistics being manipulated to infer violations of rules even in the absence of evidence. Government regulators drift into thinking that their own work is important and into eagerly receiving and investigating complaints. Aggrieved employees have additional ways to browbeat their employers by threatening to file complaints or lawsuits. Opportunities for lawyers multiply.

The burdens placed on job creation are heavy already. They apparently help account for the disappointing growth in employment as recovery from the recession continues only sluggishly.

Yet far from being morally obliged to bear such burdens and risks, businesspeople are under no obligation to be in any business or hire any workers at all. Even employing job candidates willing to work for less pay than others appearing similarly qualified is a service to workers and the public (even if a less noble service than one might wish). Employing anybody increases the scarcity value and the job and pay prospects of the rest of the labor force. Employers practicing discrimination unrelated to the value of employees’ work suffer the penalty of reduced profit and lose ground to firms showing sounder business judgment.

Speaking of fairness, how fair is it to draft businesspeople more and more into unpaid and thankless service as social-welfare agencies and as scapegoats?

Making a political issue of “fair pay” expands opportunities for politicians and demagogy. It illustrates how superficial bright ideas can get casually inserted into laws, notably into laws running hundreds or thousands of pages. As Thomas Sowell has explained, being both economically literate and honest is a disadvantage for a politician. (An economically illiterate one can honestly advocate bad but popular legislation, while a dishonest politician may gain votes by concealing his economic understanding.)

My message, in summary, is dismay at ignorance or disregard of how essential using widely dispersed specific knowledge is to a prosperous economy.




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Ludicrous Leporidae Laws Lead to Legal Legerdemain

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When the Feds announced the sequester plan, I was quite afraid that essential federal employees would be furloughed like mere private sector employees.

Fortunately, my fears proved unfounded. Oh, sure, D.C. announced that a few thousand air traffic controllers and law enforcement officers were forced to stay home, but really essential services are safe. I present to you: the Federal Bunny Inspectors. Better known as the US Department of Agriculture.

You thought the USDA's main function was to pay farmers not to grow anything and to advertise food stamp enrollment in Mexico, didn't you? Because you’re a narrow-minded libertarian. If so, hah! Prepare to stand corrected, little miscreants.

Enter Marty Hahne, an illusionist based in Ozark, Montana. Now, Montana is a place where small businesses aren't doing too badly, considering that unemployment in the state is 5.5%, way below the national 7.6%. So obviously, this place needs more regulation.

What is Montana's most common disaster? Every resident can attest that it is the meth-addled, toothless junkie driving a three-ton truck.

That is probably why the USDA sent Hahne an 8-page message, starting with the delicious salutation "Dear Members of Our Regulated Community." You can't make this stuff up. It brings back the nostalgia of the famous "Hello happy taxpayers" line that Droopy the dog uttered in Tex Avery's cartoons.

But this is not a joke. The letter demands that Hahne write a disaster plan for the rabbit he uses in his show. We learn that the rabbit falls under a regulation dreamed up by the Animal and Plant Health Inspection Service under the pretense of implementing the Animal Welfare Act. Said regulation was promulgated last year, but somehow, sadly, Hahne missed it. As a result of his oversight, he has until July 29 to write his plan. He and his wife must then get training to implement the written plan and submit the plan to the USDA inspectors.The goal is to make sure that the rabbit is safe in case of a disaster.

But what is Montana's most common disaster? Every resident can attest that it is the meth-addled, toothless junkie driving a three-ton truck. I suggest, therefore, that Hahne write a document explaining that if he and his rabbit are run over by an addict, his wife could slide the rabbit under the USDA's office door for inspection. Training would be provided by regularly rehearsing the procedure, using roadkill.

However, if Hahne wants to save himself this trouble, there is an obvious solution, reportedly confirmed by a USDA inspector: conclude his show with a demonstration of a boa eating the (humanely killed) rabbit. The USDA would then consider the rabbit as a feed animal and drop its ridiculous requirements.

Other magicians have already decided to (gasp!) use stuffed animals to avoid the whole nuisance.

Let's hope that these workarounds don't gain ground. I'd hate to see our most industrious civil servants deprived of disappearing rabbits. They would then be forced to invent even more intrusive, counterproductive, obnoxious regulations in order to justify their own existence and expand their bureaucratic empires.




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Confessions from China II

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I just had lunch at the local food court in Guangzhou, a city of 1.3 million people in southern China. The price of the regular meal was 25 Yuan. I did not want rice, so they politely returned 10 Yuan, despite the fact that I didn’t ask for it. My meal cost me about $2.25. This is my sixth visit to China over the past three years; each one has been for about a month. I have traveled to many cities. While I have not been to many rural places, I have travelled enough to have my own views on China.

My experience of the food vendor returning me 10 Yuan no longer surprises me. I cannot think of a time when I have been cheated in China. I speak no Chinese. When I am stuck at restaurants, I am often offered eager translation help by other guests. Success in business is evidently exerting a strong influence, making people civil, honest, and compassionate.

I indulge in haggling at local shops and manage to pay what a regular Chinese would. Were I not to haggle, I would leave the shopkeeper dissatisfied. Taxis seldom overcharge me. When a shop is open, the well-dressed shop-assistant comes to me to get my business. She smiles and greets me. If her shop isn’t open, she ignores me and sometimes waves me off, a bit rudely.

People in many parts of the world refuse to acknowledge the rapid progress of China, because they see it as a communist country. Libertarians and those with free-market inclinations are particularly prone to this. They don’t want to accept the idea that an officially communist country has achieved human progress at a combined scale and rate that is unprecedented. But ignoring something does not change the reality.

Although China is a dictatorship of the “Communist Party,” that does not make it economically communist. No, China is not a democracy. People have a habit of imagining “democracy” as synonymous with “freedom,” but these are totally separate concepts. “Democracy” is a form of government, and government is by definition anti-freedom. “Freedom” is a word that applies to what is allowed by the institutions and culture of a country.

Libertarians and those with free-market inclinations don’t want to accept the idea that an officially communist country has achieved human progress at a combined scale and rate that is unprecedented.

I actually find myself very free in China. You can drink openly in public (as you can in most of Asia). You can trade, and even scam people, right in front of the police, who are not trained to be busybodies. In many places cute girls approach you with scams, offering to take you to bars. They talk openly within hearing distance of the police. In major cities, there is a rampant market in fake diplomas or ID cards. At night, I often saw several business cards shoved under the door of my hotel room, offering the service of an evening rendezvous.

Chinese traders always seem to say, “Yes, I have what you want. Now, tell me: what do you want?”

There has been much talk about the X-ray machines that check your bags at Chinese subways and at the entrance to Tiananmen Square. In my experience, the authorities are never serious about checking your bags.

“But you can’t protest against the government in China.” There are hundreds of thousands of recorded protests every year in China. You ought to see the Chinese protesting. I have seen them hurling abuse at policemen, shouting and screaming, throwing their arms and legs around. Yes, they can’t make a democratic change in China. But in Canada, my vote — one among millions of other votes — wasn’t worth spare change. In my view, “democracy” is a farce at best. It has a strong tendency to degenerate into the dictatorship of the masses. Compared with that, Chinese protest is real. People who protest in Canada mostly lobby for government favors — they protest to steal from me. And people like me are always on the sidelines, refusing to make jackasses of themselves, worried about any inconvenience their protests might cause to others.

Every time I deal with a bureaucrat in China, I am offered the chance to participate in a quick electronic assessment of his performance: Was he courteous and efficient? Where else in the world are you asked to evaluate a public servant? When I don’t care to participate in the survey, I often see the hand of the bureaucrat himself coming out of the window to do the assessment on my behalf — ironic proof that the surveys have real value.

Having been in Guangzhou for a week, I have seen virtually no foreign tourists. Yet downtown Guangzhou is among the most modern cities I know. Its skyline competes with the very best in Hong Kong, New York, and Singapore. Yet a closer inspection of those modern buildings shows that a lot of them are partially or fully empty. And the quality of buildings falls off rapidly once you are outside the downtown area. BMWs and Audis parked outside the grim apartment buildings in the outskirts show how important the public face is for many Chinese. The hazy air, the expensive shops, where rich people likely won’t shop unless they overpay, and the massive Pearl River, which for all practical purposes is the main sewage and industrial-waste artery, all remind me that I am in China.

Chinese women have probably shed their clothes faster than any other women in history, so much so that during my initial visits I thought more than once of asking them if they had forgotten something. Yet ugly buildings are often hidden behind massive posters or some other kind of façade. Packaging is more important than substance in China. The well-dressed people on the streets often share a room with several others — no air-conditioning, and the bathing facility in an adjoining building, with hot water carefully rationed.

The ultra-modern subway systems and extremely modern buildings calibrate people’s thinking, leading them to assess China as if it were a fully modern economy. Alas, China is still a developing economy, which can best be judged by comparison with where it was (a mere) two decades ago.

There is much talk about increasing nationalism in China, yet it is hard to believe that a society that had grown as fast as China would not at the same time grow nationalistic. A local acquaintance tells me that a mere 15 years back there were cows roaming the streets of what is now the modern city of Guangzhou. You can see how Guangzhou changed over the last few decades using the time-function on Google Earth.

This is a society that thinks in herds, and I have had neither the occasion nor the courage to discuss these issues in a group.

Was there a lot of pain involved in these sweeping changes in the city? Yes. Of course. The property of poor people was confiscated for little or no compensation. Such people increasingly protest, sometimes with violence against public officials. And property confiscations can be worse in democratic countries, where short-term politicians have incentives to cater to their corrupt connections, fund-providers, and lobbies.

The Chinese do have a visceral anti-Japanese sentiment. They are heavily indoctrinated, through movies and the educational system, to hate Japan. But when I challenge people about their views, I have never seen an individual refuse to engage in a rational discussion. I say “individual,” because this is a society that thinks in herds, and I have had neither the occasion nor the courage to discuss these issues in a group.

The political systems of China, the Koreas, and Japan have been heavily influenced by Confucian culture. In these hierarchical societies, creative thinking doesn’t have much place. Their culture and social systems make people shining cogs in a big machine, the better for them to work diligently and unworryingly in their boring jobs and studies. Even in Vancouver, the library is packed with Chinese students, cramming away from books. Libraries in China are similar.

But one must take a walk to the multi-story bookstores in China. They have scores of self-improvement books, proving that Chinese people increasingly read outside assigned academic works. You see covers showing the faces of Warren Buffett, Steve Jobs, Dale Carnegie, and Stephen Covey. In a country where illegal copying is believed to be rampant, there must still be considerable profit from legally marketed translations. Could the Chinese be becoming more creative? I have no doubt they are. Even if you look through the lenses of “communism” (with all kinds of fancy connotations) that you might wear in China, you cannot ignore the fact that there are many modern, creative solutions to be found in predominantly Confucian countries.

People are forever comparing China with India. Thirty years ago, when China had a per capita GDP that was lower than India’s, this would have made sense. It no longer does. Today, an average Chinese is three times richer than an average Indian. And strangely, I find India a lot more expensive than China, and a lot less free. India is stagnating. China continues to grow. China wants to make money.

But am I not over-romanticising China? I witnessed an old lady, who was selling fruit at a corner in the small city of Lijiang, being hit hard on her stomach by Chengguan, government goons — a vivid reminder that all is not well. It is very hard to trust the quality of food in China. I love the 30 cent, nicely-cut pineapples, but I do ask myself if they are unnaturally sweetened. Cheap massages, usually for less than $10, are great for me. But what about the people who render those services? What about all the people who live in extremely congested spaces? What about all the people who work in extraordinarily exploitative situations under “greedy” businessmen? What about the sweatshops? What about the ruthless abortion of the second child?

Governments, irrespective of whether they are democracies or single-party dictatorships, are institutions of heartlessness, inhumanity, and freedom from accountability. State and nationhood are unnatural concepts, designed by crooks and sociopaths to control the sheeple. The smaller the state, the fewer the regulations, and the better the society. I am not in a situation to compare China with truly stateless societies, because today’s world offers no examples. But China has very little regulatory control — the biggest reason behind its low costs. And, yes, I do feel for small children living and working under tough situations, or my masseurs who work for a pittance. But I gladly use their services, for the choice they have is not between a good job and a bad job. If they had that option they would have chosen the good job. Their choice is between a bad job and hunger. Trading with them, I get my massage and they get food. China understands this concept well. And that is the only way to move up economically.

China has moved up. Chinese salaries are rising much faster than the nation’s growth rate or inflation rate, meaning that the benefits of continued growth are accruing increasingly to the workers. Workers are fighting for better conditions. People are increasingly resisting work in factories where other people have been used like automatons. In fact, the increasing worry is that as China becomes a more expensive place to operate, some manufacturing is moving back to the West. A lot of clothing factories have already moved to Vietnam and Bangladesh. This is how human conditions improve. Not by increasing demand, in the way that Keynesian Western governments think things happen, but by working hard, by slogging along and creating the supply first. Sweatshops then go away naturally.

Governments, irrespective of whether they are democracies or single-party dictatorships, are institutions of heartlessness, inhumanity, and freedom from accountability.

My guess is that manufacturing that is moving back to the US is not necessarily doing that for economic reasons but to keep Obama happy and possibly to access earmarked money. It would be erroneous to think that China had lost its competitive advantages and that the short-term, democratic Western world had learned anything, for that world continues to do more of what created its current problems. I continue to be bullish about the future in China.

Except in Beijing and Shanghai, I usually pay $10 for a hostel bed or $30 for a three-star hotel. My fabulous hotel in Guangzhou has a price tag of $30, but it does offer some kind of, I think very strange, cup of coffee for $30. Only a nouveau riche Chinese or someone with a company account will pay for this. I of course don’t abuse the latter. A full meal costs $10 or less. The subway, one of the best I have seen anywhere, costs between 50 cents and 75 cents. Unless I fall for the temptation to waste money, I can live a luxurious life here for less than $50 a day.

But China is not only a place for cheap goods. It is a treasure trove for anyone seeking an education in economics. Just be prepared to accept a few Chinese idiosyncrasies. And don’t let the “communist” tag on China stop you from going there.




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Lifeboat Drill

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Word has come of a gruesome accident in the Canary Islands. A cruise ship anchored there staged a test of its lifeboats, and five crewmen died. At the moment, the cause is said to have been a break in one of the cables by which lifeboats are lowered to the water. A picture shows a capsized lifeboat next to the ship. The dead crewmen were trapped beneath it.

This is sad, but why is it of any more interest than any other industrial accident? Because lifeboats are constantly hailed as a solution, not a cause, of naval disaster.

The 101st anniversary of the sinking of the Titanic arrives on April 14. We will hear a great deal about the importance of government regulations to ensure that every ship has enough boats for its whole company of passengers and crew.

Since the Titanic, this kind of regulation has been in effect. But as with most regulations, the effects have been mixed, to use a conventional kind of understatement. When American total-lifeboat regulations came in, two things happened. One was the ruin of America’s passenger steamship lines to the Orient. The owners couldn’t afford to meet the new standards (which, admittedly, included labor-protectionist provisions only notionally connected with safety). The other was the sinking of the steamship Eastland. The Eastland capsized in the Chicago River, with immense loss of life, because it had been overloaded with lifeboats.

The story of the Eastland is ably presented by George Hilton in his book on the subject. I myself have analyzed the lifeboat issue in my book about the Titanic. I’ll hit some high points:

Only one large passenger ship has ever been evacuated solely by its own boats, and that was a vessel in which almost all the passengers and crew were under military discipline. If a large ship gets into trouble, it ordinarily sinks right away (as did the Lusitania, with horrible results from the attempted launching of lifeboats), or it takes days to sink. In the first case, few boats will probably be capable of successful launch (even the Titanic used remarkably little of its available lifeboat space). In the second case, other ships will appear to take people off the stricken vessel, if that vessel is anywhere near normal lines of travel.

It is a fearful thing to enter a lifeboat and be lowered 50, 60, or 70 feet into an ocean that is probably cold and turbulent. Usually, it’s better to stay with the ship. If the passengers on the Costa Concordia, which suffered a disastrous mishap off the coast of Italy in January 2012, had understood this, they would not have panicked, and they would have sustained fewer deaths. Instead, they remembered propaganda about the Titanic and concluded that they were doomed, because their lifeboats were not efficiently launched. In some cases, they jumped off the ship, and died.

By the way, the Costa Concordia never sank. It’s still there, lying on its side, along the coast of Italy. If you were a passenger without an operative lifeboat, you could still be living on board. Yet watching the one-year retrospectives on this event, one would think that the ship had sunk — and passengers had died because lifeboats were not available.

The truth is that everything people do, or plan to do, has its own risks. Even tests of government-mandated rescue equipment can go wrong, terribly wrong. There is no such thing as a free lunch, or a free rescue, either. Let’s end the pious pretense that there is.




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O Canada!

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“Canadians are the only people who take moderation to an extreme.”

— H. L. Mencken

Cross the border into Canada circa 2005, and the convivial pleasantries of the immigration official would only be interrupted — almost apologetically — by the requisite formalities. “Are you bringing in any liquor, beer, wine, or tobacco?” An honest declaration inevitably rendered a generous individual exemption.

No longer. Today Canadian immigration agents have taken a page — the third-degree page — from US Customs and Immigration: all obdurate business without a hint of foreplay.

“Are you carrying any self-defense devices such as guns, pepper spray, or mace?” The eyes narrowed down suspiciously, homing through the response to detect revealing body language.

We were. Pepper spray.

My wife and I were embarking on a mountain bike ride across Canada along the Trans Canada Trail (TCT), a dedicated, mostly back-country route for walkers, skiers, horseback riders, and bikers that crosses the country and which, in typical Canadian all-inclusive fashion, incorporates every province and territory. Our plan was to ride from the Pacific coast to the Atlantic, camping out along the way. Instead of lugging the more traditional panniers to carry our gear, we were pulling single-wheel BOB (beast-of-burden) trailers each loaded with tent, sleeping bags, cooking kit, etc.

British Columbia, with its accordion folds of Coast Mountains, Rocky Mountains, and subsidiary ranges, is teeming with bears. And pepper spray, the provincial parks’ wardens’ (rangers in the US) preferred bear deterrent, was our only legal protection. Curiously, although capsicum aerosols are legal, they must be labeled “for bears.” Ours were not, so they were confiscated. Perhaps some bears can read; or perhaps the label inhibits its use against other predators. Who can say? We later forked out $80 for two Canadian-made capsicum bear repellents with the proper government labels.

Not one question about drugs or suspicion about illegal stowaways. Canada’s priorities are obvious: first, a mirror image of the US concern over terrorism expressed by the immigration officer as a lack of civility; then a concern about liquor and tobacco smuggling (not only are vice taxes an important source of Canadian revenue but they embody a long tradition of reformist social policy that discourages unhealthy habits); and, finally, handgun prohibition. Canadians are proud of their civil society and deathly afraid of contracting what they perceive as a US epidemic of handgun violence.

Perhaps some bears can read; or perhaps the label inhibits its use against other predators. Who can say?

But a demand for handguns persists. Jock Bigjaw, a Dogrib First Nations (not his real name or tribe) leader and self-styled warrior, wanted a .357 Magnum. Jock was a big-rig hauler, a job that allowed him plenty of time to pursue his real passion — alpinism. We’d met on the flanks of Aconcagua in Argentina and hit it off, laughing ourselves into indignity at the 14,000 foot base camp. Politically, he believed in self-reliance and the Canadian government’s duty to adhere strictly to its treaties. Jock fought many of his fellow Indians’ sense of aimlessness, despair, and alcoholism by setting an example of achievement. He dreamed of being the first Native American to summit the Vinson Massif — the highest peak in Antarctica — and toured Canada’s Indian Reserves giving inspirational presentations at schools and community conclaves. In the world of Canadian indigenous peoples, Jock was a hero.

After the climb he asked me if I’d be willing to buy him a handgun in the US, meet him in Idaho during one of his cross-border forays, and sell it to him. Though he was apprehensive about buying the gun, he was untroubled about smuggling it into Canada. I agreed.

* * *

In spite of NAFTA, “free trade” remains an elusive concept — particularly at entry levels. After completing a guidebook (see About this Author) to sea kayaking the Inside Passage (three-quarters of which traverses the BC coast), I submitted the manuscript to Rocky Mountain Books, Canada’s premier outdoor guidebook publisher. They wanted it. However, because of my US citizenship, it did not qualify for certain subsidies offered by the federal and provincial governments — in effect, a quota system for Canadian authors that makes it hard for non-Canadians to compete (which is its intention). So, in the end, they declined it.

Just before crossing into Canada to start our bike trip, my wife and I stopped at Smith Rocks State Park in Oregon to do a little rock climbing. For this sport, Smith Rocks is a world-class destination. It is the birthplace of “sport climbing”, a relatively safe technique that in the 1980s allowed standards of difficulty to be pushed way beyond what anyone ever imagined.

Though he was apprehensive about buying the gun, he was untroubled about smuggling it into Canada.

Lacking a guidebook, I approached a large group of young climbers in the campground to get “beta” — route information. They were from NOLS, the National Outdoor Leadership School, an outgrowth of Outward Bound. NOLS teaches outdoor wilderness and survival skills. These kids had signed up for a month-long rock climbing course that was to take place at Squamish Chief, BC — Canada’s Yosemite. But a Canadian immigration officer had different ideas.

When asked the purpose of their visit, the instructors responded innocently and honestly. Although tuition had been paid in the US — and was already a done deal — the martinet declared that the NOLS program would unfairly compete with Canadian guide services. He refused entry into Canada to the two trailer-hauling vans with 24 kids and instructors. Smith Rocks was their consolation destination.

* * *

In spite of the border crossing unpleasantness and the high prices, it is alwaysa pleasure to be in Canada. A leisurely civility and understated formality barely conceal an endearing earnestness — about the most trivial of life’s minor curiosities — that disarms even the most irascible visitor. Canadians are patient, tolerant, and egalitarian to the core. While the American Declaration of Independence celebrates “life, liberty and the pursuit of happiness,” Canada’s founding document promises “peace, order and good government.” As Pierre Trudeau once belligerently declared, “We are in the extreme centre, the radical middle. That is our position!”Nonetheless, to the average American, Canadian politics are an irrelevant baffle mired in minutiae.

Perhaps what makes Canadian politics so unintelligible, frustrating, and yes, even boring to Americans, is the more than usual lack of congruence between political parties and any sort of principled political philosophy. Consistency has been sacrificed to national unity, growth, and development, which — in such a geographically sprawling and climatically extreme country — all parties promote through vigorous federal intervention and subsidies to make settlement and development of its inhospitable extremities more attractive.

While the American Declaration of Independence celebrates “life, liberty and the pursuit of happiness,” Canada’s founding document promises “peace, order and good government.”

This was all the easier because, unlike the US, which attempted to design a government from scratch based on the latest Enlightenment philosophy hot topic, Canada simply continued being a part of Britain, developing the same structure of government as the mother country, and following its lead in foreign and domestic policy.

Each election seems to be contested by politicians with a big wish-list of concrete promises that expediency and the demands of a fractious confederation often reverse 180 degrees within days of victory. Canada dodged the 2008 financial crisis through fiscal health and well-capitalized banks, with the “Loonie” shooting ahead of the US dollar for the first time ever. The Economist, however, avers that the housing market is frothy and likely to pop.

But we had more practical matters to consider. We drove to a West Vancouver marina and found a safe place to park our van for the duration of the bike ride, spending the rest of the day packing camping gear, tuning up the bikes, and making the myriad arrangements requisite for our trip — with Canadian talk radio in the background.

The controversy du jour was emblematic of Canadian attitudes, politics and the rise of China. A handful of young Oriental men (some of whom couldn’t speak English) had been arrested drag racing on a Vancouver street in Maseratis, Lamborghinis, Alfa Romeos and other such jet engines on wheels. The police had released them without filing charges. Speculation focused on the idea that wealthy and influential parents had pulled strings. Besides the predictable indignity over favoritism, suspected pay-offs, and police malfeasance, callers and host alike were incredulously outraged that common standards of Canadian propriety had been so contemptuously flaunted by drag racing on a staid city street.

Canada, with British Columbia in particular, has had a huge influx of rich Chinese immigrants — crony capitalists and rent seekers who have made fortunes in a changing China that lacks a rule of law and are using every trick availableto get their money out of the country. Unsurprisingly, China has currency export controls. With its lax immigration policy, passports that are virtually given away, comparative economic freedom, and relative proximity to China as a Pacific Rim neighbor, Canada is a preferred destination for Chinese oligarchs.

Our first day out covered 70 muscle-grinding miles through Vancouver and its suburbs, followed by a torrential downpour the following day. We took a rest day. By the end of the second week, we’d hit our stride and required a rest day only every 5 or 6 days. Much of our way was on “rails-to-trails”, old railway beds reclaimed for recreation. When present, these wilderness throughways profiling no more than a 3% grade made pedaling over BC’s mountain ranges a transcendent experience.

I commented to our host that I couldn’t imagine marching into battle to the strains of “O Canada.” She smiled and retorted, “We’re all about peace — and having fun!”

One of the first small towns we passed through, Gray Creek (pop. 125), had a refreshing libertarian flavor. The welcoming sign at the town limits proudly announced, “Gray Creek, still metric free.” When I groused about the $38 one-night, one-tent camping fee and the over-priced stale groceries, the good-humored campground and store owner-manager glibly blamed it all on the government.

Canada’s metric system is a bit of a Potemkin village — but with one real cannon that occasionally lobs a ball and messes things up. For one (as in Gray Creek), revanchists stubbornly adhere to the ergonomic English system. Yet, more fundamentally, the Dominion, surveyed by the British in the 18th and 19th centuries, is stuck with the mile-based Range & Township sectional land division, which rears its head nearly every time a property survey is necessary. In agricultural areas, rural roads retain a mile-based nomenclature (“Mile 154 Road”) and are located according to the old distances.

At Castlegar, a town of nearly 8,000 people located in the Selkirk Mountains at the confluence of the Kootenay and Columbia Rivers, we decided to splurge on an extended rest at a B&B. When we inquired at the tourist office, the attendant — without a hint of irony — informed us that Castlegar had suitably good motels, two campgrounds, but no B&Bs. Since British Columbia is the most British of Canada’s provinces, and B&Bs are a British invention, and they are common in Canada, I sensed something was amiss.

According to a café owner we befriended, a few years before — during an economic development spurt — the city fathers had invited a large, upper mid-range lodging chain to open a unit in town. In the US, when towns come calling for a local franchise, the chain, knowing it has an advantage, is not beyond asking for tax breaks or demanding a location it covets through the use of eminent domain. In Castlegar the quid pro quo took more of a Canadian turn — the elimination of an entire segment of the competition. In return for a fancy motel, the city council banned B&Bs.

An American can never spend much time in Canada without bumping — one way or another — into its famed health care system, usually (at the very least) as one of the first topics of conversation after an exchange of basic pleasantries. We’d heard of doctors going on strike and actually seen nurses striking (all of them are now public sector employees). In Castlegar, signs urging the government not to close 24/7 emergency medical services at the local hospital because of budget constraints were prominently displayed. These were nearly always twinned with another sign, hung by the firefighters’ union expressing opposition to theproposed closure.

As uninvolved tourists, we were entertained to observe another country’s political minuets without directly being involved. They gave us fodder for discussion as we pedaled up the Selkirk Range — but not enough to get us up the western slopes of the Rockies into Banff, where every breath up the technical single track was so precious it precluded conversation.

The town of Banff (Canada’s Aspen, Estes Park or Crested Butte, take your pick — but better), on the BC-Alberta border, is the center of Canada’s oldest national park: Banff National Park, the anchor for a series of parks that straddle the Rocky Mountains. Typical of such quaint alpine villages, it struggles to balance demand and development with retention of the picturesque ambiance that attracts tourists.

No amount of passing grades, accolades and applause, mortar boards and robes, paper diplomas or false confidence can replace or instill competence.

According to the August 30 issue of the Rocky Mountain Outlook, “Banff’s politicians are poised to revisit the controversial issue of setting quotas to control corporate chain stores and restaurants in the national park tourist town,” not only to preserve the community’s character but also because some homegrown businesses had already gone belly-up due to competition from recently opened national chain stores. Banff is already home to Starbucks (of course), Tim Hortons the coffee-and-doughnut chain(it wouldn’t be Canada without Tim Hortons), McDonald’s (which everyone abuses but patronizes), The North Face (it wouldn’t be a mountain town without The North Face), Tony Roma’s, The Gap, and others.

As with any scheme that preferentially treats one business over another, the details of this one are devilish to draw up and subject to corruption, with arbitrary choices that are based on aesthetics but that fundamentally affect livelihoods. As the newspaper reports:

The question of what level to set the quota is a challenging one. Options include back-casting the quotas to reflect the mix that existed during the 2008-2009 period when visitor surveys were done, capping at current levels or allowing a cushion, like 10% more. Banff’s senior planner said a quota below current levels creates instant pressure on existing situations, including the creation of legal, non-conforming uses, while a quota set too high doesn’t achieve the regulatory goals and becomes a zoning “paper tiger.”

So as not to kill the goose that lays the golden egg — not completely, at least — service stations, hotels and banks are not included in the proposedquota system.

Out of seven Banff City Councilors, only one declared unequivocal support for the free market; while the Mayor — like a good politician — concurred with him, but artfully hedged her position.

* * *

We took another multi-day rest at a friend’s home in Canmore, less than 20 miles from Banff and in just as stunning a location, to attend the annual Canmore Highland Games, an event Canadians take very seriously. It is absolutely nothing like the ersatz, corn-ball, out-of-tune bagpipe-screeching “highland games” not uncommon south of the border, attended by pot-bellied old men with giant calves in tams and kilts who can talk at length about Culloden, Bonnie Prince Charlie and what Mel Gibson doesn’t know about Robert the Bruce.

Attendance in the thousands, in spite of a prohibitively expensive admission fee; way over 100 pipe bands from all over the country, with electronically tuned bagpipes played by top-notch musicians of all ages, genders and colors; full-sized telephone poles that few men could even get erect for the caber toss; endless imported tap bitters, ales and stouts; more single malt whiskeys than you ever thought existed; haggis to die for (really!) and fish-and-chips with cod, haddock, salmon, and halibut choices. Even the step dancing competitions, from schools from all over Alberta, were top-notch. All on a perfectly turfed, quadruple-size football pitch ringed by giant, blindingly white campaign tents topped by Canadian flags — the whole surrounded up close by the crenelated limestone summits of the Fairholme and Rundle Ranges.

The festivities opened with a Royal Canadian Mounted Police regiment, an infantry division, and its 50-member pipe & drum band marching to the fore under the skirling strains of Scotland the Brave. The M of C then asked the crowd to stand for an a cappella rendition of O Canada, a composition I’d read much about but never heard — so I was particularly curious. Although the young lady did her best, the anthem was underwhelming. I commented to our host that I couldn’t imagine marching into battle to the strains of O Canada. She smiled, posed as if she were step dancing, and retorted, “We’re all about peace — and having fun!”

Descending the Rockies was a roller coaster ride. Nevertheless, we were concerned that once we were on the prairies, the ride would get boring over the flat, featureless terrain buffeted by endless winds. But when one expects the worst, things can only get better. And so it turned out. Our west-to-east direction virtually guaranteed a tail wind, and the artful design and routing of the TCT avoided traffic and kept our interest at ADD levels.

The prairies are cut by water courses carved through deep declivities and bordered by sirenic glens peppered with deciduous and evergreen copses. Quaint, colorful Hutterite colonies and Mennonite and Eastern Orthodox settlements, complete with metallic onion-domed churches incongruously plopped down in the middle of nowhere, enthralled us.

Even the imported oil-boom labor — people from 127 countries speaking 69 languages — can get mired in way-more-liberal-than-the-US Canadian immigration rules.

Still, we were concerned about a couple of routing questions. The TCT — again in typical Canadian all-inclusive fashion — was designed to go through every provincial capital. Edmonton, the capital of Alberta, is halfway up the province — far from the southern alignment we’d been following. The TCT then heads east and (back) down to Regina (rhymes with vagina, source of many a snicker), capital of Saskatchewan. Additionally, urban bike riding, especially with fully loaded BOB trailers, can be very trying. No worries — the TCT tied into extensive riverside urban trails through Calgary and Edmonton that displayed the best of both cities, slicing through downtowns and suburbs with equal aplomb.

We’d taken to eating breakfasts at fast food joints and cafes where the portions — and the clientele — were gargantuan (giving the lie to the old nutritionist’s tale that eating a healthy breakfast inhibits weight gain). The ubiquitous “We reserve the right to refuse service to anyone” signs posted in US cafes were nowhere to be found — probably too confrontational for Canadians. They were replaced by “Abuse will not be tolerated” signs that seemed to serve the same function — more politically correct, I suppose. These were sometimes coupled (at one Safeway, for example) with a poster of smiling employees — a black, a Caucasian, an oriental, an Indi…er, First Nations member, a Latino, an Inuit, an Indian or Pakistani-origin Muslim (you could tell from the forehead dot or the Muslim kufi), and of course, both sexes — touting diversity in employment practices.

Every one of these establishments in the Edmonton area carried the morning’s The Edmonton Sun with daily reports on the firing of Lynden Dorval, aka “the zeros teacher.” The Ross Shepard High School (part of the Edmonton Public Schools system) physics teacher had been fired after he gave a student a zero for not handing in an assignment.

“If students don’t do the work, they don’t deserve (a grade) and I stand by that,” Dorval was quoted as saying. Students, parents, the principal and even Edmonton Schools Superintendent Edgar Schmidt sported “Real heroes give Zeros” T-shirts in his support. But it was Schmidt, caving in to demands by the school board, who made the final call, stating that the firing was for “insubordinate, unprofessional” conduct.

The Sun, quoting Dorval,claimed that the firing was “for going against school policy by assigning students with a zero, rather than using the code system the school uses to evaluate work.” Both the Alberta Teachers’ Association (the union) and the school board were conducting investigations. Unstated but suspected is that the “code system” assigns some value to all work — including its absence. Perhaps, these people must reason, there is merit to merely being present — like Forrest Gump — when homework is assigned.

Political correctness (PC) run amuck? Definitely. We mustn’t ruin the students’ self-esteem.

I once argued with a couple — both teachers, one in the Pennsylvania Public School System, the other an Outward Bound instructor — about the consequences of failing students. The public school teacher, a union member, supported her school’s policy of never failing or expelling a student. Since “bad” students were usually “at risk” kids, failing or expelling them would just make an already bad situation worse, she argued. Her husband, the OB instructor, agreed.

So I asked them to imagine applying the same logic to instructing in rappelling (a technique for descending a cliff by zipping down a rope). In other words, telling a student who hadn’t mastered the technique that he was actually proficient at it. I said, “If he went out and tried rappelling on his own, the well-intentioned lie could cost him his life.” They couldn’t muster a reply.

The core problem with PC is that it wishfully reverses the order of cause and effect. No amount of passing grades, accolades and applause, mortar boards and robes, paper diplomas or false confidence can replace or instill competence. Moreover, it is condescending and patronizing — visibly signaling that the recipient can’t handle the truth. In fact, PC functions primarily, as David Foster Wallace has so eloquently expressed, “to signal and congratulate certain virtues in the speaker — scrupulous egalitarianism, concern for the dignity of all people, sophistication about the political implications of language — and so serves the self-regarding interests of the PC far more than it serves any of the persons or groups” who are the recipients of it. It is hypocrisy legitimized.

What’s more, many ofthe“at risk” kids (previously known as JDs — juvenile delinquents) are sharp, with well-developed BS antennae that can see right through the hypocrisy of patronizing, deceptive schemes. And they learn from them, using their new insights to game the system, while losing all respect for adults that are complicit in such manipulative behavior. That’s why they supported Dorval, who, by the way, was soon hired by a private school.

We didn’t run short of conversational topics when we turned east out of Edmonton and headed for the Saskatchewan border. Although the architects’ primary reason for this route was running through each province’s capital, there was a bonus: Edmonton’s latitude approximately coincides with the limits of agriculture.

North of the line, farms and roads disappear and the great northern Canadian wilderness rules. This made for a stunning ride. In places, giant combines were harvesting wheat and rape seed, the source of canola oil (Canadian oil) on farms run by Polish and Ukrainian immigrants. In others, hills studded with evergreens alternated with picturesque lakes surrounded by deciduous trees turning red and gold in the mid-September cold.

Peppering both the fields and the glens were “nodding donkeys” (oil pump jacks) and drilling rigs, while the occasional convoy of “thumpers” (seismic prospectors) tested the road shoulders for underground paydirt. Canada has the world’s third-largest proven oil reserves — most of it in northern Alberta’s oil sands — and 3,400 trillion cubic feet of natural gas in its shale beds. BC residents who live near the border nip over to Alberta for a cheaper fill-up.

The new discoveries, advanced drilling and fracking technology, and, as one oil-industry booster puts it — referring to less politically salubrious climes — “no bribes or body bags” are driving a boom no one is able to keep up with.

Several factors are holding back the bonanza. For one, there is no easy way to transport the thick crude out of northern Alberta. The US section of the proposed Keystone XL pipeline from Hardisty, Alberta to Port Arthur, Texas has not yet been approved by the Obama administration; while the Northern Gateway pipeline, proposed from Edmonton to Kitimat, BC, on the Pacific Coast (for exports to Asia) is being held up by environmental concerns and First Nation objections. The pipeline would cross aboriginal reserves.

“The other big bottleneck,” the November 17 issue of The Economist reports, “is human capital.” Hardly anyone lives near Fort McMurray, the closest city, and fewwant to move there in spite of the high wages and attractive incentives. Even the imported labor — people from 127 countries speaking 69 languages — gets mired in way-more-liberal-than-the-US Canadian immigration rules. “An Irish worker in Fort McMurray,” The Economist continues, “complains of having to fly to Calgary to sit a test of English proficiency. It’s her native language, and the test is online.”

* * *

When our canteens began freezing overnight, we decided it was time to go home.

At St. Paul we cadged a couple of discarded cardboard bike boxes from Canadian Tire, a megastore that combines aspects of Wal-Mart, Checker Auto and Sears (and whose business model still escapes me), to pack up our bikes for the Greyhound bus trip back to our van.

Next year — in Saskatchewan.

And, perhaps, another report.




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