The Mint supposedly wants devs to help it build a national e-currency. Unfortunately they’re suggesting it be used for oldbad ideas from the 90s, like paying for news stories with microtransactions:

Here’s the challenge. The prize? $50k in gold bullion (y’know — because e-currency can’t be trusted).

Via Julius.

Canadian essayist Stephen Marche makes a scathing argument in Esquire that the last 30 years have not so much been good for the rich and bad for the poor as good for the old and bad for the young. This is obvious when Reagan, Mulroney, Bush, Obama and Harper pump up the deficit, but it’s also a matter of which programs get cut, and how the education and job markets are structured. The Baby Boomers grew up in a period of unusual prosperity and when that boom ended they kept their boats afloat by transferring wealth from younger generations.

Although the article is written from a US perspective, he mentions that this phenomenon is widespread in Western Europe. It’s obviously happening in Canada too, where health care is our government’s biggest expenditure (how many days did you spend in the hospital this year compared to your grandparents?).

It’s particularly insidious that, while Baby Boomers have had to support their adult children with housing and small financial assistance, they’ve managed to avoid paying most of their tuition, meaning student loan debt is a cost that society will still be paying off after they’re dead.

Marche doesn’t discuss the cost of real estate: Baby Boomers bought houses and then voted for policies that would keep supply growing slower than demand to increase the value of their houses. He also doesn’t discuss the environmental externalities that were produced and the irreplaceable natural resources that were consumed in the unsustainable generation of Boomer wealth.

Marche implies that the Occupation Movement wasn’t embraced by many Baby Boomers was because, although their wealth has stagnated relative to the 1%, they’ve built a society that will do a reasonably good job of supporting them until they die. Dismantling that system is simply too risky at their age.

Throughout history large numbers of unemployed youth have been responsible for revolutions. The next stage of the Occupation may not bother trying to find common ground with the 25% of the population that hold 80% of the wealth.

I saw this in a comment on Reddit the other day and then lost it, so I want to paraphrase it before I forget it. It’s also a consequence of stuff I learned in public sector financial management.

If you can borrow money with x% interest and then invest that money with a return rate of (x + n)% (adjusted for inflation), then it is economically rational to borrow the money. The profit you make off the investment will let you pay off your loan in the future. However, to keep a good credit rating, all you need to do is keep paying the premium and have the ability to pay off the loan – you don’t ever actually need to pay it off. You are financially sustainable if your wealth grows faster than your debt.

This isn’t fool-proof for individuals, because they can’t borrow money at an interest rate lower than the rate of return for guaranteed investments. So they have to take a bet that their wealth will grow faster and sometimes they lose (like when there’s a real estate crash).

Governments have much better credit ratings, because their investment is their own economy and if their investment fails they can, in theory, raise taxes to cover their debts (riots are a side-effect). So if a government can borrow money at an interest rate lower than the expected growth of GDP (adjusted for inflation), it’s economically rational to do that rather than pay down debt. The economy grows fast enough that the debt eventually shrinks to an insignificant amount.

Of course figuring out the exact debt is non-trivial, but the basic idea stands: we should be looking at debt-to-GDP ratio rather than absolute debt. This shows why we should resist comparisons with household debt (bonds are not like credit cards) and resist the impulse of right-wing Albertans to pay off the debt. However, it also shows why degrowth is completely incompatible with contemporary economic management.

I’ve written before about Canada Post. Well, silly me, I trusted them again.

I’ve been stymied on a video project for a while and one of my friends agreed to help me finish it. I needed to send him 100 gigs of footage, so I cleared off one of my terabyte drives and packed it up. My studio is equidistant from a UPS store and a Canada Post outlet. I picked the wrong one.

I paid for insurance. I paid for guaranteed delivery. I was promised it would arrive last Thursday — and I double-checked this because I’m under time pressure. Today, Tuesday, it arrived… AT MY HOUSE IN TORONTO. They gave themselves a five day extension and then did it wrong anyway: CLUSTERFAIL.

This is a truly monstrous waste of taxpayer dollars. I would probably be even more upset if I paid taxes.

Naomi Klein claimed, in The Shock Doctrine, that the Right’s modus operandi is to wait for disasters and then use them as causi belli (forgive my probably-wrong Latin pluralization) to execute their agenda. Well, here’s a freebie: our economy is SHRINKING — there aren’t enough resources to go around — let’s stop delivering post in, say, the GTA. Just for a week.

I predict that people won’t notice, let alone care. If they do, either, just restart it.

But imagine: a whole week of not killing trees for paper-based spam, not having our identities and belongings stolen, and having packages delivered TO THEIR RECIPIENTS (I can’t stress this point enough — it’s really the whole key to “delivery”, as a concept, and I’m willing to pay extra for it)… Oh, what a magical land of joy our fair city might become.

And once that experiment is successful we could roll it out to the whole nation:

Seriously, though: I would rather Harper just keep the entire postal budget for himself. The money would do me just as much good, but he’d retire from politics. Maybe he could split it with Ford.

[UPDATE: THEY BILLED US EXTRA TO TAKE DELIVERY AT THE WRONG LOCATION.]

I believe that carbon emissions should be reduced just enough to stop environmental disaster. Most people are not explicit about this, but I think it’s a view almost everyone shares if they think about it: the climate can absorb some carbon without disruption, so there’s no problem in that amount of emissions. Besides, eliminating all emissions would require the end of civilization if not the end of mammals.

I would go further and say that some climate change is probably acceptable. The problem right now is that since carbon emissions are an externality, there’s no decision process over how much is acceptable. If carbon were properly priced, the market could weigh the trade-off between carbon-emitting activities and climate change. Will economic growth now be enough to make up for environmental consequences later?

This long, self-reflective essay gives a good counter-argument:

[Sustainability] means sustaining human civilization at the comfort level that the world’s rich people—us—feel is their right, without destroying the “natural capital” or the “resource base” that is needed to do so…The success of environmentalism has been total—at the price of its soul…This is business-as-usual: the expansive, colonizing, progressive human narrative, shorn only of the carbon.

The environmental movement used to be about protecting the environment for the environment’s sake, but then it became co-opted by capitalism into this utilitarian economic thinking that I presented above: the environment is a big truck you can dump a certain amount of shit in before the tubes get clogged.

In Canada this is expressed by the tension between the Green Party, which sometimes acknowledges the trade-off between social justice and environmental justice (but mostly just promises all the justice!), and the NDP, which is a social justice party that added some sustainability policies. And the BC Liberals introduced a carbon tax because sustainability is just good business.

It doesn’t really matter because ecocentrism failed and now even sustainability is failing because the majority have decided (if subconsciously) that economic growth now is worth any amount of environmental pain later.

I’m a bit confused by articles discussing whether high-income tax increases are “fair”, like this one Simon linked to. Many progressives (Elizabeth Warren most notably) argue that it is fair for the government to take some of that wealth because the wealth was earned by consuming social goods. But that’s still accepting the Randian world view that people have an inherent right to be compensated for their ingenuity, not merely their labour.

The Universal Declaration of Human Rights says that people have the right to compensation and property ownership sufficient to ensure their dignity, nothing more. Only the Queen (and the First Nations) has any inherent right to own anything. She allows other people to own things because it is in the best interest of her subjects to do so.

Given that rich people have no inherent right to their wealth, the question should not be how much taxation is fair, the question should be how high can taxes be before it screws up society. There’s a concept in economics called Kaldor-Hicks Efficiency (which is a generalization of Pareto Efficiency): any redistribution of resources is efficient as long as the total amount of resources in the economy does not decline. Taking money from Scrooge and giving it to Cratchit is Kaldor-Hicks efficient as long as Scrooge and Cratchit do not decrease their labour and productivity. (Although note that the Globe & Mail Economy Lab claims that the low capital gains tax is K-H efficient.)

Any Kaldor-Hicks inefficient redistribution will cause a drop in the GDP, which is the current performance measure of choice. But inefficient redistribution could still increase our social welfare function. The left should stop arguing about what exactly the tax rate should be and start arguing about how we measure if a tax system is good.

Dean Murdock is running for reelection as a Saanich Councillor. He has proposed that Saanich require all new developments to sell or rent 10% of their units below the market value. This will have two side-effects:

• More development will happen in other municipalities, which don’t have affordable or sustainable transportation options.
• The price of new units in Saanich will rise.

Some of the rise in prices will come out of developer profits, but some of the increase will also be passed on to purchasers. Since new developments tend to be condos, townhouses and infill housing, they are mostly purchased by members of the middle-middle class. This is taking from the middle to give to the poor while the rich stay rich.

A better solution is to subsidize the creation of affordable housing units in both new and renovated development (like adding a non-market basement suite) using property tax refunds. The City of Victoria has been quite successful using property tax refunds to encourage restoration of heritage buildings.

The refunds should be paid for by raising the property tax rate for the municipality as a whole. Property tax is just about the only major policy level that local governments have, but it’s a good one because it’s progressive: mansions pay more than condos. The current owners’ houses have increased in value because of the scarcity of housing, so it’s time that they pay back the benefits of old policies.

Of course Murdoch can’t propose raising property tax to help the poor, because land owners are the only people who bother to vote in municipal elections. I’m not saying you shouldn’t vote for Murdoch, because this is better than Saanich’s current policy, fuck the poor. But is it not just to ask the middle to suffer for the good of the poor while taking nothing from the rich.

Here are the three credit unions I’m evaluating. One of them is going to get my business as soon as feasible:

1. Meridian, which recently voted to merge with Desjardins. Pros: big. Cons: big.
2. Alterna, which has an obvious name and a rinky-dink website. Pros: small. Cons: small.
3. Creative Arts, which is a credit union for creative professionals. Pros: awesome! Cons: I don’t yet qualify as it’s closed-bonded to creative union members.

Anyone know of others? I am probably going to join Meridian until Creative Arts lets me in.

Here’s a fictional piece on unplugging — the idea that a good ethical response to a fundamentally corrupt system is to abstain from participation.

I’ve been meaning to write about unplugging for about a month, and I have a philosophy-heavy post in my queue that I should polish and publish (I’m intentionally front-running you a bit here, Jared, to stack our coverage). The basic gist, however, is this:

• Set yourself up cryptographically. Assume the crypto will not be sufficient. Continue with the protection it does provide.
• If necessary, form a union.
• Lower your environmental footprint.
• Withdraw from industrial food.
• Withdraw from the banking system.
• Withdraw from the employment system.
• Engage politically.

More later.

My friend Chris recently linked to this blog post by a guy named Steve about the correlation between education and lifetime income. It’s a response to this New York Times column by a guy named Michael arguing that what America needs is uneducated entrepreneurs.

Steve’s first problem is that he’s using historical data rather than a forecast model. Michael is arguing that just because people who got degrees in the past make more money now is not a good predictor of how much people getting degrees in the future will make.

Steve’s second problem is that he missed Michael’s argument that education does not cause income but they are correlated because they have the common cause of ambition. To determine if education causes income we would need to control for ambition.

Finally, Michael has a larger point: it is better for the economy if more people are starting businesses, even if many of them fail. Education may lead to higher median income for individuals, but entrepreneurship should lead to a higher mean income for everyone.

Canada’s solution to encourage entrepreneurship is the social safety net: your life will not be that bad if you fail. America’s solution is greed: if you don’t take risks, you won’t be able to afford all that shit you’ve been tricked into wanting.

I think it’s clear that a social safety net is not enough on its own. Since I’m not that interested in material possessions, I’ve never been inspired to be an entrepreneur – I don’t see what’s in it for me. To increase job creation, the governments of both countries have the challenge of maximizing the pay-off for success, minimizing the penalties for failure and keeping society smoothly functioning (which is why winner-takes-all is not a sustainable strategy).