Worthwhile Canadian Initiative

If Canadians were serious about climate change, Prime Minister Stéphane Dion would be the toast of Copenhagen

Here is what Paul Krugman put at the top of his list of Paul Samuleson's contributions to economics:

Revealed preference: There was a revolution in consumer theory in the 1930s, as economists realized that there was much more to consumer choice than diminishing marginal utility. But it was Samuelson who taught us how much can be inferred from the simple proposition that what people choose must be something they prefer to something else they could have afforded but don’t choose.

Over the past few days, there have been any number of politicians, pundits and pollsters who have scolded the Conservative government for the position it has taken in Copenhagen. But what did they expect? When Canadians were offered a choice between a climate change policy that offered the possibility of personal inconvenience and the siren call of the Axis of Climate Change Dimwits, a clear majority of voters chose parties who promised a climate change policy that would cost them nothing.

Stephen Harper is carrying out the mandate we gave him. We bought all those 'Fossil of the Day' awards; we're going to have to own them.

Climate change talk is cheap, and Canadians are bargain hunters

Some numbers to consider:

• Percentage of Canadians who tell pollsters that "Climate change is mankind's defining crisis, and demands a commensurate response":  65.
• In the 2008 federal election, percentage of votes cast for political parties that acknowledged that any meaningful climate change policy would affect consumer prices: 33.
• In the 2008 federal election, percentage of votes cast for the Axis of Climate Change Dimwits: 56.
• Number of parties represented in the House of Commons that will now publicly discuss the effects of climate change policy on consumer prices: 0.

"Presentation of the Liberal position on climate change and the environment" - cont'd

I went. And apparently it's being sold as a Big Deal; here's the speech. Here are the points I was curious about last week:

• Is this a real policy proposal, or a recital of Conservative failures? A healthy dose of the latter, and some generalities. No details, though.
• Cap-and-trade, or a carbon tax? Cap-and-trade it is. But none of the details that make this more than a catch-phrase. What is the cap? Will be permits be auctioned or given to existing emitters? Any estimates for the effects on prices? Any measures to protect low-income households from the costs? These are the sorts of questions that Stéphane Dion went to a lot of effort to answer.
• How much material can he cover in 45 minutes? Not a lot, especially since he only spoke for 20 minutes.
• Will he answer questions? No.
• Just how good is Michael Ignatieff's French, anyway? Better than I had been led to believe, although he did seem to lean heavily on his printed text.

As a point of electoral politics, there's nothing wrong with replacing a carbon tax policy with cap-and-trade, as long as we all remember that in almost every way that matters, the two models are equivalent: consumers will be faced with higher prices. In the last election, the Liberals and the Greens were the only parties that had the intellectual integrity to accept this fact, and they made an effort to deal with it. I will be very, very disappointed with Michael Ignatieff if his Liberals join the Conservative-NDP Axis of Climate Change Dimwits.

Oh, and I must scold Ms Taber for this throwaway paragraph in the Globe story I linked to:

The Liberals lost badly in the last election, partly as a result of Mr. Dion’s complicated Green Shift plan that would put a tax on carbon. It was not communicated well; Canadians did not understand it.

The Green Shift was NOT complicated: carbon taxes up, other taxes down. What's so hard to understand? Indeed, it was a model of clarity and precision when compared to the muddled schemes that the Conservatives and the NDP were selling.

On some unconvincing arguments against the need for an effective Parliamentary Budget Office

MM Veldhuis and Lammam respond to my post on their op-ed in the National Post last week, and Kevin Milligan summarises a couple of their points:

1. The PBO would not be exactly like the CBO therefore no parallels to the CBO may be drawn.

2. Canada's Parliamentary system has the advantage that the executive is directly accountable in Parliament--The Finance Minister has to stand up and defend his/her policies.

Go read why these are not convincing arguments.

Some context for the Parliamentary Budget Office's funding woes

Some points to consider:

• The PBO has a budget of $1.8m and 15 employees. (source)
• The US Congressional Budget Office has a budget of $45.2m and 250 employees. (source)
• Policy analysis does not scale well; the cost of putting together a model for evaluating a given policy is pretty much the same in both countries.

The PBO simply doesn't have the resources to be effective.

More reasons to support the PBO

Today's National Post has an op-ed written by a couple of Fraser Institute types entitled "Scrap the Parliamentary Budget Office". It's a remarkable piece of rhetoric. Although its stated purpose is to make the case for eliminating the PBO, it ends up demonstrating once again why an effective PBO is so desperately needed.

"Presentation of the Liberal position on climate change and the environment"

It's not often that the internal Laval e-mail listserve grabs my attention. I guess I have to go, if only to satisfy my curiosity about the following points:

• Is this a real policy proposal, or a recital of Conservative failures?
• Cap-and-trade, or a carbon tax?
• How much material can he cover in 45 minutes?
• Will he answer questions?
• Just how good is Michael Ignatieff's French, anyway?

Maybe I'll live-blog it.

The Conservatives adopt a scorched-earth strategy against the PBO

The idea is simple: if you must retreat, leave nothing behind that could be useful (h/t to Support the OPBO).

Tories unload 4,476 pages of stimulus details: The Harper government has dumped three box-loads of information about its efforts to stimulate Canada's sputtering economy on Parliament's independent budget watchdog.

Kevin Page had asked for more information, complaining that the sketchy data provided up to now made it impossible to tell whether $12-billion in stimulus spending is having any impact on the economy.

But rather than provide an easy-to-analyze spreadsheet listing infrastructure projects and how much money has been spent on each of them to date, the government flooded Page Thursday with 4,476 pages of documents...

[I]t will likely take Mr. Page's office days, if not weeks, to input the information into an electronic database for analysis.

Classy.

Economic policy advice for the Liberals: A conversation with the Cheshire Cat

There are reports that the federal Liberals are going ahead with some sort of conference that is to generate some sort of intellectual infrastructure for an eventual platform for an election, to be held - if things continue to go according to current form - in 2012. So this seems to be as good a time as any to offer Mr Ignatieff and his party some free counsel.

Stephen Leacock on the benefits of economic stimulus

It has come to the attention of the federal Liberals that ridings who are represented by Conservatives are receiving a disproportionate share of the monies spent under the aegis of the fiscal stimulus:

Ontario was allocated about $1.1 billion in Infrastructure Stimulus Fund money, translating to about $90 for each Ontarian (according to the 2006 census). Mississauga was assigned $46 million (to be matched by the province of Ontario and the city of Mississauga). According to the 2006 census, it means that Mississauga only received $69 per person. The city of Mississauga received 23% less than the provincial average.

It gets worse.  Looking at some cities that are represented by Conservative MPs, the numbers are even more disturbing.  For example, Barrie received $129 per person, Niagara Falls received $200 per person, Cambridge received $170 per person, and Oakville received $279 per person.

There are two possible reactions to this story. One is resigned cynicisism. Another is amused cynicism. And who better than Stephen Leacock to express it?

You could tell from the way John Henry Bagshaw closed the door before he sat down that he was in a pretty serious frame of mind.

"Gentlemen," he said, "the election is a certainty. We're going to have a big fight on our hands and we've got to get ready for it."

"Is it going to be on the tariff?" asked Tompkins. "Yes, gentlemen, I'm afraid it is. The whole thing is going to turn on the tariff question. I wish it were otherwise. I think it madness, but they're bent on it, and we got to fight it on that line. Why they can't fight it merely on the question of graft," continued the old war horse, rising from his seat and walking up and down, "Heaven only knows. I warned them. I appealed to them. I said, fight the thing on graft and we can win easy. Take this constituency,--why not have fought the thing out on whether I spent too much money on the town wharf or the post-office? What better issues could a man want? Let them claim that I am crooked and let me claim that I'm not. Surely that was good enough without dragging in the tariff. But now, gentlemen, tell me about things in the constituency. Is there any talk yet of who is to run?"

Mallory Tompkins lighted up the second of his Prime Minister's cigars and then answered for the group: "Everybody says that Edward Drone is going to run." "Ah!" said the old war horse, and there was joy upon his face, "is he? At last! That's good, that's good--now what platform will he run on?"

"Independent." "Excellent," said Mr. Bagshaw. "Independent, that's fine. On a programme of what?"

"Just simple honesty and public morality."

"Come now," said the member, "that's splendid: that will help enormously. Honesty and public morality! The very thing! If Drone runs and makes a good showing, we win for a certainty. Tompkins, you must lose no time over this. Can't you manage to get some articles in the other papers hinting that at the last election we bribed all the voters in the county, and that we gave out enough contracts to simply pervert the whole constituency. Imply that we poured the public money into this county in bucketsful and that we are bound to do it again."

From Sunshine Sketches of a Little Town.