What most people think but don't want to say

The Guardian is saying it out loud: Trump has destroyed the USA's international reputation. One of several blunt quotes:

"Erratic behaviour, tolerated in the past, is now seen as downright dangerous. It’s long been plain, at least to many in Europe, that Trump could not be trusted. Now he is seen as a threat. It is not just about failed leadership. It’s about openly hostile, reckless actions."

Before Trump was elected, I pointed to uncomfortable parallels between him and several well-known (mostly dead) dictators. Comments claimed I was being disrespectful. Fact is, I was saying less than I thought at the time.

Mother Nature: A thought.

Mother Nature doesn't care about shareholder value.

Photo of an iris

An iris from a few years ago. We are looking forward to this year's blooms.

Small defeats: Govier's short stories

     Katherine Govier. The Immaculate Conception Photography Gallery (1994) The title story tells how professional photographer Sandro slides into doctoring photos, and eventually repents after a period of adding or removing people from group photos. A small defeat, but characteristic of the fates of Govier’s characters. It seems to me to be a Canadian characteristic, for Munro, Atwood, Garner, Mitchell etc all tell similar stories. Yet these defeats as often as not strengthen the characters. They have found their proper place in the scheme of things, and accepting that is a kind of victory.
     I enjoyed reading the book, but not enough to read it without interruptions. Worth a look if you find a copy. The title refers to Sandro’s shop, which he has named after the nearby church. **½

Econ 101: Why wage subsidies won’t bankrupt the country

A comment in response to the Financial Post’s worry about how much the wage subsidy program will cost. It was announced by Prime Minister Trudeau on 2020 03 30.

Since this is a wage subsidy program, most of the money will be used to pay for shelter, utilities, food, and transportation. Most of these dollars will generate sales tax revenue for  the Province (8% in Ontario) and/or the Federal government (5%) when spent.

But a dollar spent will be spent again. The consensus is that a dollar will be spent between five and seven times before all or part of it returns to the original spender. That means about 65 to 70% of the money will return to the governments.

In short, the wage subsidy will largely pay for itself. The question, “How much will the program cost?” misses the point.

Footnote: The Canadian government will provide wage subsidies of 75% on the first $59,400 of a person's wages. This will be available to all employers whose business has been impacted by covid-19. The Prime Minister also urged businesses to pay the additional 25%, and warned that any business trying to game the system will be dealt with. Many workers will eventually pay income tax on all or part of the wage subsidy.

Update 2020 03 31: My arithmetic is off, since food isn't taxed. So I estimate the payback in taxes at about 40 to 70%. However I haven't factored in the payback, financial and otherwise, of keeping the suppliers of food and transportation etc in business.

Nostalgia and history: Cartoons by Lancaster

Osbert Lancaster. The Penguin Osbert Lancaster. (1964) Lancaster was for many years an editorial cartoonist for the Daily Express. He had other sources of income, too. His charmingly accurate stereotypes of the upper middle and upper classes shows that he belonged to that social stratum.
     The cartoons are of course dated in their references to then current political and social issues, but his commentary is not. Rather more damage is done by foolishness, incompetence, and an uninformed desire to do good than by active malice. Thus, in a 1949 cartoon, one newspaper reader to another, “I may be underestimating slightly, but by my reckoning this makes the seventeenth ‘most important mission in history’ since 1945.”
     There’s also a section on the development of interior decorating, acutely observed. All in all, a nicely done dose of nostalgia and history. ****

"20th century functional" architecture, as seen by Lancaster. He was an expert historian of architectural fashion.

 

Econ 101: Supply chain fragility (another example of neo-liberal economic failure)

A letter I sent to the Atlantic Magazine a few minutes ago

Re: https://www.theatlantic.com/ideas/archive/2020/03/supply-chains-and-coronavirus/608329/

Lizzy O'Leary's piece is a welcome reminder of reality. But it doesn't go far enough. The cure is not to "diversify the supply chain", as implied towards the of her article. It's to change the mindset that maximizing profits is the aim of a business, or worse, that it's the aim of the economy.

It is that mindset that has pared down resilience. A resilient system has redundancies. Redundancies cost money. Removing them reduces the costs, and hence maximizes profits.

Business profitability is one, and only one, of the many numbers that describe the state of an economy. Believing that it is the purpose of the system to maximize that one number is obviously crazy. One might as well say that it is the purpose of eating to maximize the throughput of the digestive system.

Businesses exist to provide what we need and what we want. That is their social, and therefore their economic role. "Profit" is a signal that the business is fulfilling that role. That's all it is.

It's time to rescue the economy from the advice of economists who have a superstitious reverence for profitability.