Sunday, December 21, 2014

Rule of Law 25: Corruption in Europe

The Economist magazine's December 6th 2014 issue featured this chart with this note,

Much about the practice of bribery remains murky. The OECD’s first report on the subject, published on December 2nd, sheds some light. Some findings confirm what was known or suspected. But the report also undermines some common beliefs. Bribery is not a sin of rogue employees or poor countries.

Yes, as governments expand, the opportunities for corruption and bribery also expands. The more restrictive, the more bureaucratic the government processes, the more corruption and bribery that will take place. 

Why? Because most of those bureaucratic procedures were deliberate, to make simple things become complicated, more time consuming and more costly. So players have only two choices --- endure the long, bureaucratic and costly process, or hasten it via bribery and corruption.

The implication here, corrupt leaders need not be thieves and steal public money. They can still become super-super rich in government by declaring many restrictions and prohibitions: No gambling, no prostitution, no drugs, no smuggling, no gun running, and so on. Then allow all of these, in exchange for huge bribes. So more prohibitions and regulations mean more opportunities and temptations for corruption and bribery.

A friend from FNF, Olaf Kellerhoff, posted this once in  his  fb wall.

Even rich countries characterized by strong adherence to  the rule of law can have a big portion  of "rule of  men". Corrupt officials and personnel who think they can get away with any prosecution.

Less or minimal governance is good governance.

See also: 
Rule of Law 21: Violating Simple Parking Rules, September 17, 2013

Rule of Law 22: IAF Seminar in GermanyApril 09, 2014

Rule of Law 23: RoL Index 2014 by the World Justice Project, July 02, 2014 

Rule of Law 24: Policemen as Violators of Traffic Rules, September 15, 2014

Sunday, December 14, 2014

Pol. Ideology 59: On PostModern Politics

Last October, a faculty member of DLSU Political Science Department, Antonio "Tonton" Contreras, wrote an article on "Savings, errata and postmodern politics" and made a lousy conclusion that 
the kind of politics that we have right now is postmodern.”

Philippine politics is already "postmodern"???

Tonton cited this as an example, "our Constitution being openly challenged and undermined, without even mounting a coup. We have a Visiting Forces Agreement that subordinates our sovereignty to another country."

Last time I checked, foreign investors still cannot invest in areas that are either totally prohibited (ie, reserved 100 percent to Filipino investors only) or restricted (they can invest, 40 percent max equity), because the Constitution is still being upheld. I have read the VFA, a short document actually, maybe only 3-4 pages long. There is zero, nothing there, that says American military personnel can steal or land grab or kill here if they like and they will not be subject to PH laws. What PH sovereignty was subordinated?

So because the PH Executive and Legislative bodies try to "undermine" the Supreme Court and institutions, it is defined as "postmodern"?

Since I am not a political scientist by training and it is a technical term in that discipline, I asked other friends who are political scientists. Tonton's colleague at DLSU, Louie Montemar, defined the term as "post-modernism, there is no universal “truth”, truth is negotiated and can only be 'possible' in 'small' groups."

I thanked Louie for that. A web check, one definition from WiseGeek says, 

no single “truth” can be established about anything, including good and evil, and that ideas should be deconstructed to find meaning.... If there is no single “truth” that is acknowledged by all people, then those people are more likely to question the actions of their government.

I like wisegeek's definition. Governments thrive on coercion, they are forcing, coercing, arm-twisting their citizens to follow certain rules and legislations (from high and multiple taxes and fees, no business should start unless  they get dozens  of permits, no smoking there, no parking here, no pedestrian crossing there,,...) they enacted, with fines, penalties and imprisonment for violations. Because those rules are the universal "truth" that must be obeyed. Post modernism politics in effect negates that universal "truth" imposition by governments, or at least many of those "truths" that became local and national legislations.

Tonton defined  postmodernism at the end of his article, 

"In short, everything is negotiable in Philippine politics. We deconstruct and destabilize well-established political concepts, constructs and processes. In political theory, these are telltale signs of the post-modern."

Everything in the PH is negotiable? Lousy. former President Gloria Arroyo, Senators. Enrile, Jinggoy Estrada and Bong Revilla should have negotiated their freedom by now. Orange or Vodaphone or AT&T should have negotiated their way in and compete with Globe-Smart duopoly even without changing the Constitution. These things were not negotiated and were not allowed to happen,

I think the author just wanted sensationalism in his article. Being an academic, he uses academic terms like "post modern" to sound sophisticated and advance a lousy analysis. We have not even reached a "modern" state yet where the rule of law really rules, and not the rule of men. That is how some academics fool their readers. Using jargons and sophisticated-sounding terms to sell a lousy analysis.

I like Louie's definition too, "truth is negotiated and can only be 'possible' in 'small' groups."

Tonton was talking about a big group, the entire country, not just a small group like a rotary club, a running club or a university student council or a company union.

So his conclusion, "everything is negotiable in Philippine politics" is, ummm, post-modern garbage, hehehe.

See also:

Thursday, December 11, 2014

Hong Kong Protests, Part 5

This afternoon, the Admiralty in Hong Kong has been cleared of protesters and their tents, other obstructions. I support the cause of the protesters -- greater political independence from China communist government. I support the street occupations, but only for a short period of time.

This morning, twitter photo from the Asian Correspondent.

Freedom of expression is good and noble, I support it, but it should not restrict or contradict freedom of mobility of other people. Street occupation for a few days or weeks is understandable. But for more than two months, I think it is wrong. Below, twitter pics from the Harbour Times.

I and some friends visited that site at the Admiralty last November 5, 2014. My immediate impression was that the protests have morphed to become a "tent movement" from the original "umbrella movement." So many tents with no one inside, except for a few tents at the protest center.

Four lanes each, total of eight lanes, were occupied by many tents and protestors at the Admiralty/ Many go home afterwards. People cannot live in tents for days or weeks -- no toilets, no showers. Portable toilets are good only for half-day or whole day rallies, but not for weeks and months.

There was "mass arrest" too. .I don't know the details why such action was done by the HK government. I think removing the tents and other obstructions should be enough.
 Poor Jimmy Lai. I heard him speak during the EFN Asia conference 2004 in Hong Kong. Very articulate, down to earth, and liberty-minded guy. Too bad that he is among those arrested.

I heard Emily Lau during the EFN Asia conference 2014 in Hong Kong, just last month. She too is a very articulate and passionate speaker.

Again, I support the cause of the protesters -- NO to more China communist government heavy hands in Hong Kong. But while the protesters have this freedom of expression, other people in HK, both locals and foreign visitors, also have the freedom of mobility to pass that busy road at the Admiralty, also in other occupied areas. The latter should not be sacrificed for many weeks and months at the altar of the former.

See  also:
Hong Kong Democracy vs. China Dictatorship, Part 2, September 29, 2014
Lion Rock 13: LRI Position on the Hong Kong Protests, October 08, 2014

Hong Kong Democracy Vs. China Dictatorship, Part 3,October 14, 2014

Hong Kong Protests, Part 4, November 06, 2014

MeTA 18: More Financial Independence, More Stakeholders Participation

The Medicines Transparency Alliance (MeTA) Philippines will be conducting meetings and fora next year related to health transparency and its own financial sustainability. It is a UK Department for International Development (DFID) funded project conducted in seven developing countries including the Philippines. Thus, while MeTA is classified as a non-government organization (NGO), technically it is a government-funded organization (GFO).

Despite this fact, MeTA-PH is providing the regular venue for multistakeholder discussions on medicines and healthcare in general in the Philippines. Below, in one of the big meetings of MeTA held in Makati, early July 2014.

The Department of Health (DOH) Advisory Council for the implementation of RA 9502 (Cheaper Medicines Act of 2008) seems to be dead, at least temporarily. Zero meeting this year.  There should have been about two meetings, like the  one in mid-July 2014, but in both cases, they were cancelled. And no reason/s is/are given why the meetings are cancelled. I suspected that  the July meeting was cancelled because the  DOH got busy with the Disbursement Acceleration Program (DAP) controversy where the DOH got P3+ billion of extra funding from that program. When DOH Under Secretary Mads Valera was still there, the agreement was a quarterly meeting. When she left the DOH, the meetings were also gone.

I think there is also zero meeting by the Congressional  Oversight Committee on RA 9502 this year, the legislators (House and Senate) perhaps just divided among  themselves the P10 M/year average budget of Congressional Oversight Committees. Another fiesta time for Congress.
So if DOH cannot provide the regular consultation and dialogue process, MeTA should fill that vacuum. And Yes, MeTA should go for a real civil society and NGO status, not largely GFO. The annual dues for all members, corporate, institutional and professional affiliates, individuals, should proceed and not sidelined. Government/multilateral money (UK-DFID, WHO, etc.) can help finance the overhead expenses but the regular fora and conferences should be internally generated. Many local pharma companies, innovator and generics, can co-sponsor certain events. Participants can also pay minimal registration fees, and so on.

Below, another MeTA meeting held in February 2014. Both photos I got from MeTA facebook page.

Past President of the Philippine Pharmaceutical Association (PPhA) Leonie Ocampo noted that medicines are not given due attention in protecting their integrity in the supply chain  Rather, quality (transport, storage, dispensation, etc.) is sometimes sacrifice because medicines are  used as a political tool. Thus, the need for a multistakeholder involvement to prevent their wastes, advance rational and responsible use of drugs. And the need for better system in the procurement, warehousing, distribution, and use of medicines.

Tonight over dinner, I talked to a friend whose wife is a cancer survivor. He shared that his wife's doctor told him that until about 10 years ago, the survival rate of his wife's cancer at stage 4 was only about four percent (ie, around 96 percent mortality). Now with new treatments, survival is more than 50 percent. Wow, in just 10 years! But her anti-cancer medicnes are expensive, something like P70,000 every three weeks for about one year. Good that they are both rich, they can afford it and recoup that money once the wife goes back to full time work. I think that in 10 years time, that P70k (DOF/BIR gets at least P8K of it in VAT alone) can go down significantly. This chart is true.

A stronger and more financially sustainable MeTA-PH is a good springboard for dynamic multi-sectoral discussions and dialogue for more stakeholders participation, if not consensus building. I am not hopeful of the Advisory Council now to continue big multi-stakeholder participation given the recent and on-going politics at the DOH.

In our book, “minimal government = maximum civil  society”. That is why civil society organizations (CSOs) should be as independent of government as much as possible. Civil society is about volunteerism while government is about coercion. One can  say that government is the “uncivil society” :-) Note that in government, things are  done by coercion, with fines, penalties and even  imprisonment for  violations, Thus, the drug price control  policy, the mandatory and forced discounts for all senior citizens including the rich and super-rich ones, are bad policies but they remain in force until now. And even if people are not happy with the 32 percent (max rate) mandatory withholding tax for fixed income earners, they are forced and coerced to send 1/3 of their monthly or annual  income to the government.

Dynamic and independent CSOs can point out certain mistakes of more government interventions and unnecessary regulations.

See also:
Health Transparency 14: IMS-CHAT Meeting, April 18, 2013, Friday, July 12, 2013 

MeTA 15: Forum 2014 on Healthcare Ethics and Transparency, January 30, 2014 
MeTA 16: Day 1 of Conference 2014, February 11, 2014 

Wednesday, December 10, 2014

Climate Tricks 35:Follow the Money, Trillions of $$$

One reason why the ecological movement is persistent on "man-made warming/CC" is because they are targeting amount of money, hundreds of billions of dollars per year, not per decade or one time payment. See various reports below.

Hey taxpayers of rich countries, will you remain rich if this large-scale extortion is implemented via the UN and other multilateral bodies (WB, ADB, IMF, etc.)?

(1) From interaksyon, Dec. 6, 2014

Developing countries may need up to $500 billion per year by 2050 to adapt to the ravages of climate change, dwarfing previous estimates, a UN report said Friday.

The figure was about 20 times today's public spending on climate adaptation, according to the United Nations Environmental Program (UNEP) that warned of a "significant funding gap after 2020."

In 2012-13, the amount of global public finance committed to adaptation was about $23-26 billion, of which 90 percent went to developing countries.

(IPCC) has projected adaptation costs in developing countries to reach $70-100 billion per year by 2050, based largely on World Bank figures from 2010.

And on some calculations, based on national-level rather than global-level studies, "adaptation costs could climb as high as $150 billion by 2025/2030 and $250-500 billion per year by 2050" -- and double that if the global average temperature rise is allowed to approach 4 C.

Ooppss, the climate and environmental socialism movement is not happy with $500 B a year extortion. Some guys there want higher, like $90 trillion over 15 years or $6 T a year. 

(2) From The Telegraph, December 6, 2014

it was again proposed in Lima that richer nations should pay poor countries $100 billion a year to protect them from runaway global warming, the UN’s chief spokesman, Christiana Figueres, dismissed this as “a very, very small sum”. What is needed to decarbonise the global economy, she said, is “$90 trillion over the next 15 years”. It makes the £1.3 trillion we Brits are committed by the Climate Change Act to pay to halt global warming within 36 years look like chicken feed.

(3) From Bloomberg, Dec. 5, 2014

Su was critical of the progress industrialized nations have made to boost climate-related aid to $100 billion a year by 2020. The Green Climate Fund, a UN institution meant to channel an unspecified portion of that aid to developing nations, has pledges for about $9.7 billion so far."

(4) From The Telegraph, Dec, 6, 2014

Developed nations have so far pledged almost $10bn (£6.4bn) of public funds – including £720m from the UK – to a new UN “Green Climate Fund” (GCF) to help developing nations.

China, which aligns itself with many of the poorest countries, has complained the total so far falls far short of a 2009 pledge by developed nations to mobilise $100bn-a-year of “climate finance” by 2020. “$10 billion is just one 10th of that objective,” Su Wei, China’s lead negotiator said, Bloomberg reported.

But Elina Bardram, head of the EU’s delegation dismissed the claim, insisting the $100bn was always intended to be mixture of public and private finance. The GCF was “by no means the only vehicle for delivering the $100bn,” she told reporters on Friday.

(5) From IBT, Dec. 7, 2014

Achim Steiner, executive director of the United Nations Environment Programme (UNEP) said that adaptation costs could climb as high as £96bn ($150bn) a year by 2025 to 2030, and £160-320 bn ($250-500 bn) per year by 2050, compared with earlier estimates of £44-64bn ($70-100bn) yearly by 2050, reports Reuters.

Responding to the UNFCCC report that between $340 and $650bn in finance for climate action is flowing globally with $40-175bn going to developing countries each year, Oxfam has noted that only a small proportion of climate finance is flowing from developed countries to developing countries.

Hmmmm, the higher the extortion money being demanded from rich countries, the bigger will the climate lies ahead.

Meanwhile, our planet's fever keeps rising, we are sweltering and burning as more CO2 is released in the atmosphere. :-)

From WUWT, Onward marches the Great Pause, by Christopher Moncton of Benchley, December 3, 2014.


See also::
Climate Tricks 31: High Intolerance by the Alarmist Camp, May 14, 2014
Climate Tricks 32: Yeb Sano and CCC to Save the Arctic, September 16, 2014

Climate Tricks 33: UN Fooling Government Leaders to Accept Expensive Energy, September 25, 2014 

Climate Tricks 34: Watermelon Movement, Green Outside, Red Inside, October 07, 2014

Tuesday, December 09, 2014

Freedom Flame Awards 2014

Last week, December 04, 2014, I attended the Freedom Flame Awards 2014 and Freedom Dinner sponsored by the Friedrich Naumann Foundation for Freedom (FNF) Philippine Office. It was held at Enderun Colleges, Mckinley Hill, Taguig City.

There are eight awardees this year but only four came. From left: Peter Perfecto of the Makati Business Club (MBC), Arpee Santiago of the Ateneo Human Rights Center (AHRC), Vergel de Dios of the Center for Media Freedom and Responsibility (CMFR) and Jess Lorenzo, taking the place of his mom-awardee who passed away, former Mayor Sonia Lorenzo of Nueva Ecija. Great guys.

The Freedom Speech was given by Congw. Leni Robredo, 3rd District of Camarines Sur, and wife of the late Jesse Robredo, then DILG Secretary when he died in a plane crash. Congw. Leni is a humble and simple lady, soft spoken. She talked about her dreams and legislative proposals to advance more transparency and accountability in government.

She said, "Filipinos are truly enjoying more freedom now than two decades ago. But if the question is 'are we satisfied with this freedom?,' to my mind, the answer is 'not yet.'" See other things she said here.

When former Sec.Jesse Robredo was still alive, I  was able to hear him in one forum at Mandarin Hotel where he was a speaker. He was very explicit in saying that business bureaucratism by government is wrong, so when  he was the Mayor of Naga City, among the things he did was to drastically cut the approval process of getting a business permit. Within months as  Mayor, he cut the number of signatures and days to release the business permit by at least half.

To me, that is the mark of a good liberal -- less government bureaucratism, less or no unnecessary permits and fees imposed on the public -- and not so much about more transparency of a bureaucratic and tax-hungry government. Well I am no fan of BIG government, regardless of "good governance" rhetorics that people may say.

Many people came, friends of FNF in the country. During dinner, I sat at the table of Arpee Santiago with his wife and staff at AHRC.

After dinner and while sipping wine, I sat with the De La Salle Univ. (DLSU) group. Political Science Department faculty members, from left: Roman Dannug, Ian Jason Hecita, and Francisco "Kiko" Magno. The latter is also the Director of the Jesse Robredo Institute for Governance of DLSU, also a friend from UP Sapul in the 80s, and a wedding godfather :-).

FNF-PH Country Director Jules Maaten joined us for another photo. I told Jules, "at dinner I sat with the Ateneo group; after dinner, I sat with the La Salle group, but I am indifferent of these two schools." Jules asked, "where did you study", "UP" was my quick reply and I have no intention to change school affiliation or loyalty, hehehe.

At last year's Freedom Flame Awards held in Intramuros, Manila and attended by many foreign guests, Asian politicians from the Council for Asian Liberals and Democrats (CALD) and some European politicians and leaders from Liberal International (LI), there was a fireworks display. This year, there was a lights show at the quadrangle, just outside the venue.

Another great event. Thanks for the invite Jules.
All photos from FNF-PH fb album.

See also:
25 Years of Liberalism in the Philippines, December 07, 2011 
Freedom Flame Awards 2013, November 13, 2013 
Freedom Flame Awards 2: More Photos, November 25, 2013 

Freedom Flame Awards 3: The Magazine, April 21, 2014 
Jules Maaten's Lecture on Liberalism, May 11, 2014

Monday, December 08, 2014

Energy Econ 31: Coal, Renewables and Possible Blackouts in Germany

In my continuing debate with some members of the "Amend the Electric  Power Industry Reform Act (EPIRA)" fb group, I posted these 14 news stories there. Still very civil debate, something that  I  like.

1. From WSJ, March 27, 2014:

Shale gas, not windmills, can free the continent from reliance on Russia.

Moscow's invasion of Crimea has now forced European governments to finally admit, among other inconvenient truths, that taxpayer-funded windmills will not deliver energy security, much less improved geopolitical leverage against Moscow. There are few silver linings to Russia's revanchism, but perhaps a serious European energy policy might be one of them.

2. From WSJ, May 5, 2014:

Low domestic demand has renewed the focus on U.S. exports, which are on track for a record-setting third straight year of more than 100 million tons. The 28-nation EU imported 47.2 million tons of U.S. coal last year, up from 13.6 million tons in 2003. Exports to the U.K. alone are up tenfold in the same period. The U.S. ranked second only to Russia in supplying Europe with coal last year, and the U.S. could further increase its market share if recent political tensions with Moscow disrupt Russian shipments.

Since 2003, German imports of U.S. coal have risen to more than 15 million tons from under a million tons. A spokesman for E.ON, Germany’s largest power and natural-gas utility, says it now purchases more than four million tons of coal a year, or 17% of its total, from the U.S., up from 800,000 tons in 2010. E.ON operates power plants in several European countries.

3. From Energy Trends Insider, June 09, 2014

Add caption
The average capacity factor — that is the output of an electricity-producing asset over a period of time divided by its maximum theoretical power output — was about 32 percent for wind power in the US over the past 3 years (Source). The Hawi Renewable Development Wind Farm is a little bit better than that at 45 percent, but for the 55 percent of the time that it isn’t producing power, backup is required. Often, intermittent renewable power power supplies are backed up by dirty and inefficient power.

When people talk about the intermittent nature of resources like the wind and sun, they are referring to the fact that there are times — often unpredictable — when these resources aren’t producing. At 7 am, the world is waking up and demand for electricity is climbing. At that early hour, and with the sun perhaps not yet shining brightly enough for solar power to contribute appreciably, back-up power is needed in areas like my neighborhood that utilize wind power when it’s available.

That is the nature of intermittent resources. People don’t usually think about the fact that if the wind isn’t blowing that an electric utility — somewhere — brings on line backup power."

4. From BloombergJune 16, 2014:

consumers are prioritizing cheap fuels over efforts to rein in greenhouse gas emissions blamed for global warming. Coal is the dirtiest fossil fuel, and use of it expanded at utilities fromChina to Germany.

“Europe is increasing its carbon emissions because it’s using too much coal because it’s cheap,” Royal Dutch Shell Plc’s Chief Financial Officer Simon Henry said in an interview on Bloomberg Television June 3.

Coal’s share of global energy use reached 30.1 percent, just below the 32.9 percent share for crude oil, which lost market share for a 14th consecutive year. China was the world’s biggest coal consumer, followed by the U.S. and India.

5. From Bloomberg, June 21, 2014

Coal ranks second among the world’s largest sources of energy. There’s enough to last for 132 years at 2012 production levels. China consumesas much of it as the U.S. does of oil,... In 2011, Germany’s appetite for coal increased to the highest level in four years after Chancellor Angela Merkel shut eight nuclear power stations following the Fukushima disaster in Japan...

6. From Bloomberg, also June 21, 2014.

Germany, Europe’s largest economy, boosted consumption of the fuel by 13 percent in the past four years, while use in Britain, No. 3 in the region economically, rose 22 percent, statistics from oil company BP Plc show...

Germany’s emissions rose even as its production of intermittent wind and solar power climbed fivefold in the past decade....

German fossil-fuel emissions climbed 5.5 percent to 843 million tons in the four years through 2013, the BP data show. To meet its commitment, Germany would have to reduce its pollution by about 379 million tons, a further 45 percent. The BP statistics cover only fossil-fuel burning, which makes up about 88 percent of the nation’s greenhouse gas output. 

7. From Reuters, June 24, 2014:

According to the new draft, industry producing its own electricity in new renewable or combined heat-power plants will pay 30 percent of the current 6.24 cents per kilowatt hour surcharge in 2015, rising to 35 percent in 2016 and 40 percent from 2016.

"It would be a massive own goal in terms of industrial policy if politicians were to put a surcharge on own power production used by many sectors for decades," German industry lobby BDI chief Markus Kerber said in a statement.

Subsidised renewable energy, led by wind and solar power, have sparked a political debate in Germany over high prices for consumers, who pay mandatory charges for green energy.

8. From WSJ, September 6, 2014:

German consumers already pay the highest electricity prices in Europe. But because the government is failing to get the costs of its new energy policy under control, rising prices are already on the horizon. Electricity is becoming a luxury good in Germany . . .

For society as a whole, the costs have reached levels comparable only to the euro-zone bailouts. This year, German consumers will be forced to pay €20 billion ($26 billion) for electricity from solar, wind and biogas plants—electricity with a market price of just over €3 billion. Even the figure of €20 billion is disputable if you include all the unintended costs and collateral damage associated with the project. Solar panels and wind turbines at times generate huge amounts of electricity, and sometimes none at all. Depending on the weather and the time of day, the country can face absurd states of energy surplus or deficit.

9. From Bloomberg, September 22, 2014.

Add caption
Germany used coal, the dirtiest fuel, to generate 45 percent of its power last year, its highest level since 2007...

The transition, dubbed the Energiewende, has so far added more than 100 billion euros ($134 billion) to the power bills of households, shop owners and small factories as renewable energy met a record 25 percent of demand last year. RWE AG, the nation’s biggest power producer, last year reported its first loss since 1949 as utility margins are getting squeezed because laws give green power priority to the grids.

10. From Bloomberg November  20, 2014

“Coal is three to five times cheaper than natural gas in gas-importing countries,” Cedigaz said. “Left solely to market forces, gas cannot compete with coal for base-load power and its role is limited to meeting peak-load demand.

11.  From Bloomberg, Nov. 22, 2014.

Europe faces power shortages in the next decade unless it balances its drive for low-carbon energy with investment in clean-coal and nuclear generation, according to the International Energy Agency.

Policy makers must boost incentives for coal-fired power that includes carbon-capture technology and spur investment in new atomic plants to replace aging reactors, Maria van der Hoeven, the executive director of the IEA, said in an interview. The investment in round-the-clock, or baseload, power is needed to cover intermittent wind and solar supply, she said.

“Not everything can come just from having more renewables,” van der Hoeven said in London on Nov. 12. “The system has to be stable so that the lights aren’t going to turn off the moment the renewables aren’t there.

12. From BloombergNovember 24, 2014:

When it's too cold, Europeans run to coal, not wind or solar, to get warm. Again, not from WSJ, peks man  From Bloomberg again,

"Year-ahead coal rose for a second day, increasing 0.6 percent to the highest since Oct. 9, according to broker data on Bloomberg.

Stocks of coal at three import terminals in the Amsterdam-Rotterdam-Antwerp region dropped to their lowest in six weeks. Inventories fell 3.7 percent to 6.05 million tons from 6.3 million tons a week earlier,

13. From No Tricks Zone, Novenber 29, 2014

When high subsidies are reduced or removed, many if not all renewable companies will be bankrupt. They survive only through expensive electricity being forced by governments to the consumers.

14. From NTZ, December 6, 2014.

there are times when sun and wind combined were less than 2% of the needed supply. Unfortunately, power utilities simply cannot call Mother Nature up and place orders for power days in advance. They have to just take what Mother Nature sends, whether they want it or not, and German law says they have to pay for it even when they do not feed it in. 

See also:

Saturday, December 06, 2014

Free Trade 41: David Ricardo, CPE, FPE and Consumer Surplus

Minimal Government Thinkers, Inc. has a joint project with SEANET, the regional free market think tank based in Kuala Lumpur, to promote free trade and market reforms in the ASEAN countries. This is  the  first of the many public education activities that we will undertake.

The first known theoretician to  articulate the theory and beauty of comparative advantage was the British investor and later, political economist, David Ricardo. After reading Adam Smith's "The Wealth of  Nations", he was enamored with classical economic theories and studied and  wrote on  his  own.

When goods and  services are allowed free mobility with zero  restrictions, all other things being equal, CPE will occur, even temporarily. Or the price difference among  similar or homogeneous products and services will be low.

Theory 3: Factor Price Equalization (FPE)

Substitute prices of goods with prices of labor, capital, technology, other factors of production, in the above graphs

Free mobility of people and services across countries and continents will result in FPE over the long term, all other things being equal.

Countries with expensive labor due to labor deficit and low population will experience decline in labor cost once additional and competing labor of similar skills from abroad come in.

And countries with cheap labor due to high supply of workers, high population, will experience increase in labor cost once the excess labor goes out and work abroad.

The purpose of slapping import tariff and taxes is to make otherwise cheap goods from abroad to become expensive. This is one of the lousiest philosophies and policies of  many governments around the  world, while trumpeting that they "care for the poor".

Countries in East Asia are leaning towards unilateral and regional trade liberalization  compared to their counterparts in S. America and Africa. When  it comes to agricultural products though, many economies become protectionist. 

These were my concluding notes. Photo taken by Lee, one of the students in the class. Thanks Lee.

* Free trade means free enterprises, free individuals. Restrictions to trade is restricting potential economic development.

* Governments should reduce restrictions on people and goods mobility. (a) reduceg tariffs and non-tariff barriers (NTBs) like customs bureaucracies; (b) simplify visa requirements and issuance, reduce the cost of migration; (c) focus on rule of law function, go after real criminals and not ordinary migrants who only wish to improve their condition through hard work.

* Smuggling can  be beneficial  to consumers in  the  form  of lower prices  compared to protectionist prices. But this expands corruption in government. No to protectionism, no need for smuggling, just abolish trade restrictions.

* Unilateral liberalization – no need for or minimum of negotiations, just open the borders at zero tariff – is pro-development. No regulations except bringing in or out of guns, bombs, poisonous substances, other products that are threat to public health.

* Protectionist PH constitution should be amended to allow more foreign investments and competition.

The full 15-slides presentation is posted in slideshare.

See also:
Free Trade 37: Multiple Concerns and Regulations in the ASEAN, September 11, 2014
Free Trade 38: Liberalize Rice Imports and Demonopolize NFA, September 28, 2014
Free Trade 39: Advantages of Unilateral Trade Liberalization, October 12, 2014 
Free Trade 40: Razeen Sally Joins IDEAS, to Campaign for More Liberalization, November 25, 2014