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A Forest of News

I’m about halfway through the book The Black Swan by Nassim Taleb which is very generally about surprise events that are inappropriately rationalized with story lines after they have happened. Taleb does not find it difficult to write in a very personal style that wanders off in tangents for paragraphs or even just phrases at a time. One such tangent (and something that he refers to in numerous snide personal comments) is how it is useless to read or watch the news, that live streams of reports about an event in progress are useless for understanding what is occurring and why- one must wait to read it a book or magazine where the entire storyline can be represented.

For the past several years I have woken up early enough to have an hour free before needing to get ready for work and have spent it reading through a selection of news websites and more lately various blog posts that have accrued throughout the past day. About half of the blog posts that I receive are about economics or finance and can vary between a paragraph in length to several dozen screens. Post the crash from 2009 through to 2010 these were a fighting ground between different theories that were built up and torn down by the participants while the rest of us watched and learned in fascination. These days while some posts still look to the big picture others spend most of their bandwidth on the daily market moves or bits out of the world press- more about the trees and less about the forest.

I’ve decided to try Taleb’s advice and have been reading books and magazines in the morning. The Economist in particular is something that I’d moved away from reading all the time and its return has been a delight since it takes the issues of the week and only gives analysis to those events that aren’t just part of the normal daily variance. Reading other magazines with larger articles such as The Walrus has meant that I am not going through as many different topics as before, but I also walk to work thinking about one issue in a much more meaningful way that I would have.

Maximizing Profit

CBC radio news is usually quite impartial but when it comes to the issue of goods costing more in Canada than they do in the United States, especially when the dollar is almost at parity, they go full out populist. The more interesting thing though is that it seems that almost everyone voices that they find it fundamentally unfair that they have to pay more for goods than they would if they lived south of the border. I’m not sure how good the “random sampling” is when it comes to finding clips of people willing to speak into the microphone, but people speak of there being a lack of “fairness” and even that the government should do something about the issue.

The fact that this flies in the face of a free market economy where companies are free to profit maximize anyway they are able to is forgotten. Does this mean that people in general do not believe in letting companies price set? Do they believe that there is some “fair price” that companies should adhere to? Perhaps this is true and stores that persist in pricing items higher than they are deemed worthy are labeled and not bought at again (of course the difficulty here is knowing how much of this lack of consumers to a particular store is based on high prices and those more specifically on an issue of fairness, perhaps a study could be done where a store that has some things priced like other stores but others that are more expensive could be clever enough to figure this out).

In economic theory it’s called Price Discrimination and it is the act of a company pricing the same good or service differently to different groups of people for the purpose of maximizing profit. The term comes across as something bad but it’s very active in pricing that many would find normal such as letting older people and students pay less because they have less money whereas working age people have more and are then asked to pay more. It’s also used with coupons that need to be cut out- if the person can’t be bothered to cut coupons out then they are more than likely willing to pay a bit more so they get charged more. The companies that price differently in one country than another are doing exactly the same thing, the fact that it is found to be unfair probably says more about people’s attitude towards capitalism than anything else.

“It should not be up to politicians to determine which drugs should be approved for medical use”

The title is a direct quote from Federal Health Minister Leona Aglukkaq today explaining why her government would not get invovled and outlaw generic drug companies from producing OxyContin. Some of the provinces have asked the federal government to ban the production of this drug because its cheaper version could make it easier for addicts to buy.

I find it difficult to understand how a government could use this logic to not ban a drug while at the same time increasing fines for people that use marijuana. From the same article:

“We need to make the decisions on prescription drugs based on science,” she told the media. “Scientists are there to provide that advice to us and we need to work with the system that we have in place.”

Except that there is mountains of evidence from science suggesting that marijuana is not nearly as harmful as other readily available drugs (alcohol for one) and can actually help the suffering of the sick. In fact there is now a “scientific article” that has determined that legalizing the substance actually brings about a decrease in driving accidents, mostly from the resulting decrease in the cases of drunk driving.

While I applaud the government’s decision today I wish that it would stop its hypocracy and look to change irrational and unscientific laws against illegal drugs.

End of the Long Gun Registry

Well it ended awhile ago but it’s now been reported that all of the collected records have been destroyed (except in Quebec where the government has brought forth a legal challenge to keep the records in the hopes of setting up their own registry). I’ve never been in favour of this legislation and I’m not at all unhappy to see it end. Beyond the colossal costs and the limited use that it had (yeah I won’t cheery pick a link for the second, the first is indisputable) I found the anti-rural nature and costs placed on them to be the most problematic. Canada is an urban nation but there are still many people who need rifles for where they live or simply to have for sport.

However, what I cannot stand is the hypocrisy of this federal government which on the one hand claims to be standing up for the individual rights of the country’s citizens by getting rid of the registry or the long form census form while on the other increasing minimum sentences for those caught using illegal drugs. Somehow the rights and the decisions made by individuals is fine and good when it comes to guns and the number of bedrooms in houses but completely absent when about ingesting a substance which would only affect the person making the decision. Harper looks to have never been a libertarian and instead wrapped himself conveniently in those clothes, or at least hinted at it, in order to push forward his true agenda of social conservatism where the “correct rights” are ones that need to be left to the individual and the rest are the property of the state. He may use the world “socialist” as the boogeyman when talking of the opposition but he only dislikes the government’s hands when they aren’t grabbing what he wants.