Monday, February 28, 2011

NDP's new direction would hurt province

NDP's new direction would hurt province

Why not hike potash royalties? Noting that PotashCorp made $1.8 billion in profits in 2010 but paid only $77 million in royalties, Lingenfelter said an NDP government would ensure "Saskatchewan families received the maximum benefit'' from the sale of their resources.

First of all, the $77-million figure is "disingenuous'' and Lingenfelter knows it. A closer examination of PotashCorp's 2010 financial statements indicates the corporation reported $3.4 billion in "cost of goods sold" (which includes base royalties) and $642.8 million in income taxes (which include provincial corporate income taxes).

Sunday, February 27, 2011

Why I Changed My Mind About Unions

Why I Changed My Mind About Unions

I don't deny that some unions have made contributions to worker safety and quality of life. But it's simply not true that management is always bad and unions are always good.

As Sen. Barry Goldwater observed in Conscience of a Conservative, the First Amendment guarantees freedom of association for union members. But "[e]mployers are forbidden to act collusively for sound reasons. The same reasons [should] apply to unions...Let us henceforth make war on all monopolies -- whether corporate or union. The enemy of freedom is unrestrained power" -- whether it be unrestrained management power or unrestrained union power.

Read it all

Friday, February 25, 2011

Now not time for potash royalty review: Boyd

Now not time for potash royalty review: Boyd

"To make it clear, the royalty increase I think in no way would jeopardize anything that was going on because the companies would be making more profit even with a royalty increase than they ever planned," he said in a Wednesday interview, pointing to the nearly $2.8 billion in PotashCorp earnings during the last two years.

"It would seem to me if you left them half that, let's say $1.4 billion over a twoyear period, there isn't a corporation in the world that would walk away from that type of return."

To be honest, this quote from Mr. Lingenfelter makes my skin crawl. Read the whole article.

Wednesday, February 23, 2011

SK NDP Pledges Rent Control

Four things, Dwain, that you might want to consider...

1) Apartments will become less maintained than currently if the landlord can't do anything to recover the costs of older buildings. See North Central Regina.
2) Companies won't build any new units because they can't get what they need to recover the capital costs over a reasonable period of time (Assuming a maximum rent).
3) Lease renewals will be a thing of the past. Lease companies will choose to evict tenants and reset the rent on the unit to the market level rather than renew a lease.
4) Companies will choose to convert their apartments to condos or sell single units on the open market rather than exist under rent controls.

When the maximum rent for a Social Housing family unit is approaching $800 per unit per month, isn't it reasonable that an individual landlord should be able to raise their rent to the same?

$42M glass dome approved for Parliament

$42M glass dome approved for Parliament - Canada - CBC News

Really?  They have to have a glass dome for temporary quarters?  They can't just build a normal wood building for $5 million and save the taxpayers the rest?  Seriously?

Tuesday, February 22, 2011

Monday, February 21, 2011

Why CPP is not a good investment

This is a post that I have been trying to write for the better part of the last 3 months. Every time I see a comment from Jack Layton about how we should increase the CPP contributions and double the maximum benefit. Every time I see an op-ed from a union boss saying the same thing. Every time I see these things, it doesn't sit right with me because I know it's the wrong thing to do. It doesn't sit right with me because it transfers more money to past generations at the expense of the current and future generations. It forces me to pay for the short-sightedness of my parent's generations (Dad was at the beginning of WWII, Mom was the first year of baby boomers).

In order to understand why I think the CPP is a bad idea, it's useful to understand how it was funded in the past, and is currently funded now (from wikipedia):

At its inception, the prescribed CPP contribution rate was 1.8% of an employee's gross income up to an annual maximum. Over time, the contribution rate was increased slowly. However, by the 1990s, it was concluded that the "pay-as-you-go" structure would lead to excessively high contribution rates within 20 years or so, due to Canada's changing demographics, increased life expectancy of Canadians, a changing economy, benefit improvements and increased usage of disability benefits (all as referenced in the Chief Actuary's study of April 2007, noted above). The same study reports that the reserve fund was expected to run out by 2015. This impending pension crisis sparked an extensive review by the federal and provincial governments in 1996. As a part of the major review process, the federal government actively conducted consultations with the Canadian public to solicit suggestions, recommendations, and proposals on how the CPP could be restructured to achieve sustainability once again. As a direct result of this public consultation process and internal review of the CPP, the following key changes were proposed and jointly approved by the Federal and provincial governments in 1997:

* Total CPP contribution rates (employer/employee combined) were increased annually from 6% of pensionable earnings in 1997 to 9.9% by 2003.
* Continuously seek out ways to reduce CPP administration and operating costs.
* Move towards a hybrid structure to take advantage of investment earnings on accumulated assets. Instead of a "pay-as-you-go" structure, the CPP is expected to be 20% funded by 2014, such funding ratio to constantly increase thereafter towards 30% by 2075 (that is, the CPP Reserve Fund will equal 30% of the "liabilities" - or accrued pension obligations).
* Creation of the CPP Investment Board (CPPIB).
* Review the CPP and CPPIB every 3 years.

I'm going to paraphrase that so that my point is clear. Until 1996, the CPP was a government ponzii scheme. In fact, in 1996, according to these two documents (Contributions (Page 16) and Payments(Page 7), archived from the StatsCan website here), the plan had been paying out more than was contributed for 12 solid years. The cumulative effect was that by 2000, the first year when contributions again exceeded benefit payments, total CPP payments had exceeded the total contributions made in the entire history of the plan. The only saving grace for the CPP at that point was that interest rates had been high for a large part of the 70s and 80s, giving the fund some breathing room to keep a nest egg.

I ran my own data back to 1994, the beginning of my working life.  Specifically, I had data back to 1999 and estimated my prior contributions.  I then took the information on current maximums and projected out what I will pay over the remaining 30 years of my working life.  Since I am self-employed, that is accurate to say "I PAY" because it's all coming from the same pocket.  Not only did I project out what I will pay, but I also projected out what those contributions would be worth when grown through normal investing.

From that total, I also projected out what the CPP maximum benefit would be when I begin to collect in 2041.  To make that projection I used an average inflation rate of 2.5%, a rate that has held fairly steady over the past 15 years.  The number I arrived at was slightly more than $2000 a month (2014/month).

Now here's where it gets interesting.  Assuming these numbers are correct, the CPPIB would only need to average 3.89% from 1994 until I die in order to pay me the maximum benefit.  This assumes that I live to age 88 - a full 15 years after the expected life span of a male my age when I was born.  Even if I lived to age 100, the CPPIB would only have to average 4.8% during that same span in order to pay me a maximum benefit.

Indeed, if I lived to age 88, the CPPIB would have to average 6.01% in order to pay me DOUBLE the maximum benefit from age 65 until I die.

Now, that last bit is important for 2 reasons.  The first reason, is that if I DON'T live to age 88, the remainder of my accumulated contributions are property of the CPPIB and do not accrue any benefits to my spouse unless she is younger than age 65 (assumption is that she will receive SOME CPP benefit when she turns 65, and thus would be cut out of a survivor pension from me).  The second reason is because currently, most money managers are using 6% as their assumption of what the market will yield over the next few decades.  Point of fact, the market HAS yielded approximately 8% over the past 100 years, despite certain notable Black periods such as the one beginning in 1929.

The essence is that if the CPPIB earns more than 3.89% at current benefit levels, or if I die between age 65 and age 88, the CPP will not have benefited me as contributor.  Further, even if I died prior to age 65, the CPP will not pay out to my surviving spouse or children in survivor benefits even as much as I contributed during my lifetime.

The importance of that knowledge  leads me to make one further question - if the CPPIB has to average slightly less than 2/3rds of the projected market yield in order to sustain current benefits, and it has to yield what the market it projected to yield in order to pay out double the maximum benefits, then why do contribution rates need to be increased?

Personally, what I would like to see in pension reform is a system where there is eventually no CPPIB.  I would like to see OAS GIS augmented to absorb the current CPP beneficiaries, and the current reserve apportioned to contributors based on their accumulated contributions.  In the meantime, the requirement for a CPP contribution would not go away, it would merely take the form of a mandated matched contribution to a locked in RRSP account which can not be accessed except on retirement (at age 65), disability or death.  The retirement account would be portable in that it moves with the individual, and like an RRSP, it would roll to your spouse tax-free upon death.  Most importantly, the individual would be responsible for investing the money and for determining their own annual income levels on retirement.

No, my reforms would not be fair for those people who didn't contribute enough during their lifetimes.  No, my reforms would not protect the individuals from market fluctuations (unless those individuals bought government T-Bills 5-7 years before they were due to retire).  What my reforms WOULD do is help nay FORCE individuals to create their own wealth for retirement and destroy the reliance not just on the government to provide for the poor, but destroy the current system which borrows from current generations to fund the short-sightedness of past generations.

BR 17- We're back! Wisconsin goes all Egypt and Public employees suck

Saturday, February 19, 2011

Thursday, February 17, 2011

Victim sues robbers for $4.25M

Victim sues robbers for $4.25M | Canada | News | Edmonton Sun

It's not often that I cheer a lawsuit, but in this case I'll make an exception. I hope this lawsuit is successful, and I hope that it leads to more lawsuits.

After all, if criminals can sue the government and their victims, why shouldn't the reverse be true?

Wednesday, February 16, 2011

Michael Shermer: Baloney Detection Kit

Brilliant video, here is your Baloney Detection Kit

The 10 Questions:
1. How reliable is the source of the claim?
2.Does the source make similar claims?
3. Have the claims been verified by somebody else?
4. Does this fit with the way the world works?
5. Has anyone tried to disprove the claim?
6. Where does the preponderance of evidence point?
7. Is the claimant playing by the rules of science?
8. Is the claimant providing positive evidence?
9. Does the new theory account for as many phenomena as the old theory?
10. Are personal beliefs driving the claim?

Thursday, February 10, 2011

Just a bunch of random shit

Ok first I gotta talk about the hard line I drew on morality in my last entry, usually I am a pretty reasonable guy but dishonesty just drives me nuts. I think that honesty prevents a lot of harm that is present in the world today, even if we all disagree about other things if we are honest with ourselves and others then all will be well. I think sometimes that the priorities of society are, well, a little off kilter, perhaps a little skewed. Most of the time we hear about infidelity(I probably sound like a broken record with this) and accept it as normal behavior with no moral or ethical impact. But then in the next breath there a people censoring a magazine cover because it has Elton John and his lover holding their baby. We seem to think being politically correct is a bunch of bullshit without realizing that many terms that are considered bad, are actually bad and use of them can actually hurt someone or that sometimes being politically correct is the same as being morally right. So many people listen to and quote the Dalai Lama without realizing the man is human and may be flawed and then they ignore wisdom because it comes out of the mouth of Bill O'Rielly (I may have spelled that wrong). We need to think about things not just accept or deny. But really think about what is true, analyze what is said and, in my opinion, stand up for what's right.

Next up is skepticism, which to me isn't the same as blatant nay saying of anything you don't already believe. It means that I require evidence before I will accept something as truth, no matter what anyone says this isn't a flaw. Hollywood, movies, television and many other media will try to tell you that faith is important or that sometimes you have to accept things despite evidence to the contrary and sometimes will even go so far as to imply that a person without faith or who requires evidence is a bad person(thank you Polar Express), this couldn't be farther from the truth. As you may have heard many times, person that will believe in something without proper evidence can be made to believe anything. This applies to almost everything, from claims of ghosts and goblins, to religion, to conspiracies(yes Joe, I am trying to read those books you recommended), to homeopathy, to even real some real medicine that may or may not be helping people. If evidence cannot be presented that something is a fact then one has to stick with the belief that said fact is in fact false until proven otherwise.

This entry is random shit so here is another random paragraph. I have claimed for a long time to be of an agnostic nature, I don't know the truth about many things and if something is unprovable then I generally proclaim it to be irrelevant or false(see the paragraph above). However, I think I crossed the line from agnostic to atheist for one reason. The question of the existence of god, however unprovable has already been answered in a false way, that is to say, so many people believe in a creator, an all powerful being, a god or what have you that the idea of it being irrelevant is something they simply cannot accept. They have been following this belief or others for so long and in many cases base a good portion of their life on the idea that their supreme being exists. Now, as I said before, I find questions that are unprovable to be either irrelevant or false. In this case I have changed my opinion from one of irrelevancy to one of falsity (wow that actually is a word). Coming at the question of god from this perspective doesn't just say that god is false it says that basing ones life around a false belief system is in itself false. Just what I was thinking this morning.

I don't think that corporations are the root of all evil or that they conduct themselves exclusively in an evil fashion. I think that most corporations(and the larger the more this applies) simply have no morals and do not care about what happens except in relation to the bottom line. If something impacts the bottom line in a negative way(bad press, bad economy, bad sales) then the corporation cares and reacts specifically to improve the situation to their bottom line regardless of the consequences to others, unless those consequences could potentially impact negatively on the bottom line. In general, large companies and corporations care about money and only money. This doesn't make them evil, just greedy and flawed. In fact, if consumers were more aware of what they were buying and who they were buying it for without relying on the media to tell them then I believe corporations would be more responsible because if they weren't then it would impact negatively on the flow of money. As things are right now, most people buy indiscriminately and so corporations aren't required to be moral or responsible all they have to do is provide crap for people to pay money for.

Information, I think there is almost too much information available. A person sees something on television and they assume it's true, despite hearing from only one source and hearing only one perspective, they look for information on it on the internet and find a bevy of websites proclaiming that it is true and only a couple that offer a different point of view. There is simply too much bullshit on the internet and in the world. I'm going to use something my brother found as an example. He watched a show on underground or underwater cities, supposedly built at a time when man was not evolved enough to conceive of building design, he believed it but was not wholly sure so he asked for help in researching these cities. One in particular was off the coast of Japan. I looked into it a little bit and all I could find was a bunch of crazies spouting about "Hollow Earth Theory" and one article from National Geographic that had one geologist on the "man made" side and one geologist on the "natural formations" side, the link to the pictures was broken and so the only real information available was 2 differing ideas on the formation of some underwater "city". There were hundreds if not thousands of "Hollow Earth" sites. For those of you who are curious "Hollow Earth Theory" is exactly the kind of nonsense it sounds like, apparently some people have watched or read "Journey to the center of the earth" one too many times. No the earth isn't hollow with an undiscovered world underneath it, sorry to disappoint. However it is possible that there were cities that once existed above ground and sank for one reason or another. I find it hard to imagine aliens in the situation as the show Anthony watched proclaimed but I cannot rule out the possibility of ancient cities simply because I don't know enough about it.

Justin Beiber is representative of all that is wrong with the world. Sixteen years old, overhyped, talentless but not so talentless that the masses aren't fooled into worshiping him, narcissistic, thinks he knows everything despite getting his high school education while touring, has a world of clueless idiots following his every move, and he has a movie even though he hasn't done anything worth making a movie about. Every time I see his face, hear his voice or am force to endure another commercial for his crappy goddamn movie it makes me angry and you wouldn't like to see me when I'm angry.

The idiot portion of American Idol is over now it's on to the part where the real shit starts. The people that made it through on the stuff that I saw are less talented than any other year and that's saying something.

That'll do for now, hope you enjoyed reading and have a nice day.

Sorry oxygentaxers, the post where I took a hard line on morality is only on my other blog Famineshouse.