Indian Heroins Showing Boobs

Bombardier and business subsidies

From a very good text by Pierre Lemieux on subsidies to Bombardier, visit the following interesting discussion on the effects of such policies. Specifically, comments David. It all comes back to Frederic Bastiat (1801-185), which was extensively discussed "what we see and what is not seen". Several of his texts can illuminate the debate on the utility to subsidize an activity, including public works A gain and two losses against .

Here's a comment I added to the thread:

According JNH, "In effect, these subsidies are necessary. No, I mean no cutting industry in the area of Bombardier aircraft can boast of successful without subsidies. In the U.S., Boeing receives subsidies in the form of contract R & D military. "And according to Richard," Most other aircraft manufacturers (Boeing, Airbus, Sukhoi ..) depend on the lucrative military contracts to maximize their commercial arm, that Bombardier can not enjoy (sic) by the absence of an air force with bottomless pockets

...". In fact, military grants have little to do with competition in civil aviation. Unless the military funded research is not directly usable a civil suit by the company, the profits of a military branch have no impact on profits of the industry calendar. How could we understand that a firm that makes, say, 5 billion in profits military would choose to lose money in the civilian sector? It's almost as if Toyota decided that, as it makes profits with the production of cars, it will now begin to produce more bicycles, then it is sure to lose money forever in this field. I do not think the shareholders are very excited about this opportunity. The

bottom line is simple: we produce civilian aircraft if it is profitable, so if the value of the aircraft exceeds the value of resources put into it. If the only way to do that is through grants, it is destroying value. It is certainly not becoming more prosperous ... (Unless the shareholders of Bombardier subsidized).

Finally, a word about the possibility of military research, Boeing, for example, has the effect of lowering its cost of production of civil aircraft. In this case we are dealing with a positive production externality: it is cheaper to produce two types of real one. Pierre Lemieux pointed out to me, very fair to me that Boeing would then be more efficient and produce civilian aircraft with fewer resources than Bombardier. The logic of comparative advantage leads to a clear conclusion: Bombardier to go do something else.

Jokes For Church Anniversaries

Death to the cartels? OK, but all! (La Presse, 11 July 2008) Fourth of July Special

are discussed these days in the eventual disappearance of the management system of supply of agricultural products in Canada. A few weeks ago, newspapers reported that the Competition Bureau had uncovered a conspiracy against the public, while 13 individuals and 11 companies have been accused of having formed a cartel in the gasoline market in Sherbrooke, Magog, Victoriaville and Thetford Mines. What connection is there between these two events? To answer this question it is helpful to understand what a cartel.

A cartel is a group of producers who agree to keep prices high, by reducing competition. This can enable them to increase their profits by emulating the behavior of a monopoly. Note that a monopoly and a cartel (which works) is the same. Both lead to reduced production and higher prices.

Obviously, we could see the audience moved to such behavior in retail gasoline and demand more vigilance by the government, as well as copies of penalties for offenders. At right, because competition is essential for the proper functioning of the market.

There are actually two ways for producers get less competition and more profits. First, they can try to form a cartel. But it's complicated, because the cartels are unstable and ... illegal. Indeed, once the cartel formed in everyone's interest to cheat, taking advantage of reduced competition from others to increase his own. This is the reason why the offending companies in the field of gas are where the number of competitors is low: it is easier to agree to five, in the regions, only a mile Montreal. And there's always the danger of getting caught by hand in the bag.

Second, firms may form an association funded by its members, who will be lobbying to get legislation that will force everyone to reduce competition. Hence the laws of supply management in agriculture. The supply management is very simple: to produce a good milk, for example, must be licensed. This limits the number of permits, which reduced production and keeps prices high. Because the government imposes itself the quota system, by coercion, everything is settled.

It is particularly amusing to see that oil companies accused of forming a cartel would simply have come together to ask the government a minimum price of gasoline. They have obtained legally, they have tried for concealment. Ah, but I forgot! The minimum price for gasoline already exists in Quebec ...

Bizarre anyway, myopia that we demonstrate to the government. Governments are in fact the largest source of monopolies and cartels in the economy.

Let's go with the most egregious of creating and maintaining cartels (and arrangements that achieve the same result) by governments: the producers' cartel milk, the maple syrup, eggs, poultry (production limiting the emission quotas), the cartel of taxi (limiting the number of permits), maps of "competence" in the trades construction and other union cartels, etc. .. And all areas protected by protectionist trade policies. Finally, do not forget the monopolies created by law: alcohol, electricity, games.

Surprise: Government, by its laws and regulations, is responsible for the creation and maintenance of the largest cartels in the economy. And a significant loss of welfare pour les consommateurs. Nous devrions donc nous réjouir, et non pas nous inquiéter, devant la possibilité de disparition des cartels agricoles.

Little Bumps Behind Mysnakebites

On this Fourth of July, a few articles about FREEDOM :

Freedom: First Step in Pursuit of Happiness
Reflection Day
Safeguarding liberty and justice for all
Independence Day should reinstill hope for America
Editorial: All hail the First Amendment
America at 232: Liberty's fight
Freedom of Speech: Negative campaigning
Free speech, eh? Why is Canada prosecuting Mark Steyn?
The Post editorial board: The Mark Steyn pharmacien do not understand freedom of speech