Wednesday, March 30, 2011

Voting with Their Feet

By Thomas Sowell

(with debates about people leaving NZ this is an apposite piece from a highly objective researcher (first and foremost) and a highly astute economist observer.)

The latest published data from the 2010 census show how people are moving from place to place within the United States. In general, people are voting with their feet against places where the liberal, welfare-state policies favored by the intelligentsia are most deeply entrenched.

When you break it down by race and ethnicity, it is all too painfully clear what is happening. Both whites and blacks are leaving California, the poster state for the liberal, welfare-state and nanny-state philosophy.

Whites are also fleeing the big north-eastern liberal, welfare states like Massachusetts, New York, New Jersey and Pennsylvania, as well as the same kinds of states in the midwest, such as Michigan, Ohio and Illinois.

Although California has long been a prime destination of Asian immigrants and the homes of their descendants, the 2010 census shows a striking increase in the Asian American population of Nevada, more so than any other state. Nevada is adjacent to California but has no income tax nor the hostile climate for business that California maintains.

The movement of the black population-- especially educated young blacks-- is the most striking of all.

In the past, the massive movements of millions of blacks out of the South in the early 20th century was one of the epic migrations of a people-- comparable in size with the millions of the Irish who fled the famine in Ireland in the 1840s or the millions of Jews who fled persecution in Eastern Europe in the late 19th and early 20th centuries.

In more recent decades, blacks have been moving back to the South, however. While the overall black population of the northeastern and midwestern states has not declined in the past ten years, except in Michigan and Illinois, the net increase of the black population nationwide has increasingly been in the South. About half of the national growth of the black population took place in the South in the 1970s, two-thirds in the 1990s and three-quarters in the past 10 years.

While the mass migrations of blacks out of the South in the early 20th century was to places where there were already established black communities, such as New York, Chicago and Philadelphia, much of the current movement of blacks is away from existing concentrations of black populations.

Blacks are moving to suburbs, and even to cities like Minneapolis. Overall, the racial residential segregation patterns are declining in the great majority of the largest major metropolitan areas.

Among blacks who moved, the proportions who were in their prime -- from 20 to 40 years of age-- were greater than in the black population at large, and college degrees were more common among them than in the black population at large. In short, with blacks, as with other racial or ethnic groups, those with better prospects are leaving the states that are repelling their most productive citizens in general with liberal policies.

Detroit is perhaps the most striking example of a once thriving city ruined by years of liberal social policies. Before the ghetto riot of 1967, Detroit's black population had the highest rate of home-ownership of any black urban population in the country, and their unemployment rate was just 3.4 percent.

It was not despair that fuelled the riot. It was the riot which marked the beginning of the decline of Detroit to its current state of despair. Detroit's population today is only half of what it once was, and its most productive people have been the ones who fled.

Treating businesses and affluent people as prey, rather than assets, often pays off politically in the short run-- and elections are held in the short run. Killing the goose that lays the golden egg is a viable political strategy.

As whites were the first to start leaving Detroit, its then mayor Coleman Young saw this only as an exodus of people who were likely to vote against him, enhancing his re-election prospects.

But what was good for Mayor Young was disastrous for Detroit.

There is a lesson here somewhere, but it is very doubtful if either the intelligentsia or the politicians will learn it.


Sunday, March 27, 2011

Use your brain during earth hour… for heaven’s sake if not people’s

The following sets out exactly where I stand on earth hour and other such mumbo jumbo……


Ross McKitrick
Professor of Economics
University of Guelph

In 2009 I was asked by a journalist for my thoughts on the importance of Earth Hour.

Here is my response.

I abhor Earth Hour. Abundant, cheap electricity has been the greatest source of human liberation in the 20th century. Every material social advance in the 20th century depended on the proliferation of inexpensive and reliable electricity.

Giving women the freedom to work outside the home depended on the availability of electrical appliances that free up time from domestic chores. Getting children out of menial labour and into schools depended on the same thing, as well as the ability to provide safe indoor lighting for reading.

Development and provision of modern health care without electricity is absolutely impossible. The expansion of our food supply, and the promotion of hygiene and nutrition, depended on being able to irrigate fields, cook and refrigerate foods, and have a steady indoor supply of hot water.

Many of the world’s poor suffer brutal environmental conditions in their own homes because of the necessity of cooking over indoor fires that burn twigs and dung. This causes local deforestation and the proliferation of smoke- and parasite-related lung diseases.

Anyone who wants to see local conditions improve in the third world should realize the importance of access to cheap electricity from fossil-fuel based power generating stations. After all, that’s how the west developed.

The whole mentality around Earth Hour demonizes electricity. I cannot do that, instead I celebrate it and all that it has provided for humanity.

Earth Hour celebrates ignorance, poverty and backwardness. By repudiating the greatest engine of liberation it becomes an hour devoted to anti-humanism. It encourages the sanctimonious gesture of turning off trivial appliances for a trivial amount of time, in deference to some ill-defined abstraction called “the Earth,” all the while hypocritically retaining the real benefits of continuous, reliable electricity.

People who see virtue in doing without electricity should shut off their fridge, stove, microwave, computer, water heater, lights, TV and all other appliances for a month, not an hour. And pop down to the cardiac unit at the hospital and shut the power off there too.

I don’t want to go back to nature. Travel to a zone hit by earthquakes, floods and hurricanes to see what it’s like to go back to nature. For humans, living in “nature” meant a short life span marked by violence, disease and ignorance. People who work for the end of poverty and relief from disease are fighting against nature. I hope they leave their lights on.

Here in Ontario, through the use of pollution control technology and advanced engineering, our air quality has dramatically improved since the 1960s, despite the expansion of industry and the power supply.

If, after all this, we are going to take the view that the remaining air emissions outweigh all the benefits of electricity, and that we ought to be shamed into sitting in darkness for an hour, like naughty children who have been caught doing something bad, then we are setting up unspoiled nature as an absolute, transcendent ideal that obliterates all other ethical and humane obligations.

No thanks.

I like visiting nature but I don’t want to live there, and I refuse to accept the idea that civilization with all its trade offs is something to be ashamed of.


Saturday, March 26, 2011

Go for the best deal regardless and “local” will really look after itself

Imagine a supplier in Invercargill makes a spanner you can buy in Dunedin for $10.00.

Imagine a supplier in Dunedin makes the same spanner you can buy in Dunedin for $12.00.

You live in Dunedin. Which one do you buy? You buy the "import" from Invercargill and save yourself $2:00 right?

Not if you belong to the Chamber of Commerce "Buy local club" you don't. The club tells you that by "buying local" you are supporting the home team, your area, suppliers who might be your friends etc.

Are you? Actually no - you are damaging them. How?

If you buy the Dunedin spanner and lose $2:00 you just:

  1. supported someone who is less efficient at making spanners and needs to improve;
  2. told them that being inefficient and not giving customers the best deal is "ok";
  3. told other suppliers that if their costs creep up they can always lift their prices and still sell products;
  4. you wasted $2.00 which you could have spent on someone - maybe someone local - who is efficient.

If you buy the Invercargill spanner the effects are the opposite :

  1. you get the best deal;
  2. you have money over to support other locals who provide the best deal;
  3. you give the inefficient suppliers a reminder to lift their game;
  4. you scare off others who might have been getting lazy;

So - buying and selling is not like supporting Otago Rugby because you love Otago.

Buying the best deal makes everybody better off and does the most you can do to make "local" worth buying ahead of anything else.

When both spanners cost $10.00 it won’t matter either way – then you can support the local guy…. oh and the Chamber of Commerce can then do something useful with the members levies.

You might well ask what it is that escapes the Chamber's brain in this logic?? I have no idea but a deep suspicion.


Thursday, March 10, 2011

How productivity creates jobs–Why Luddite = “Fail”

Many people fear that productivity threatens employment, yet in the United States both have risen in every ten-year rolling period but one since 1929. Productivity is a job generator rather than a job killer because it not only increases efficiency but can also expand output through innovations that improve the performance, quality, or value of goods and services.

Even productivity that stems solely from efficiency gains can raise employment if companies pass the cost savings on to their customers in the form of lower prices—leaving households and businesses with more money to spend elsewhere—or use their savings from leaner operations to set up new job-creating ones. To learn more, read “Why US productivity can grow without killing jobs” and “Five misconceptions about productivity.”

McKinsey Quarterly March 2011.