Saturday, October 31, 2009

Swine flu, leptospirosis and new medicines

New and evolving diseases require new and evolving drugs and other medical treatment to prevent such diseases from spreading. The emergence of new environmental problems like prolonged flooding of low-lying areas exacerbates some diseases that were just minor problems in the past, but have become major diseases recently.

In the US, swine flu has killed more than 1,000 people this year, and up to 5.7 million may have been infected in its first few months of outbreak, according to the US Center for Disease Control (CDC). And the current strain may not be the same that was discovered in late April this. US President Obama has already declared swine flu a national emergency, noting that "the pandemic keeps evolving". With such a big number of deaths, this is indeed a troubling disease. The US government has ordered some 150 million vaccines, mainly Tamiflu made by Roche, by December.

Here in the Philippines, there is a leptospirosis outbreak in some areas of Metro Manila and a few other provinces that remain flooded until now, more than a month after severe flooding that occurred last September 26. As of today, nearly 2,200 people have been infected while 167 have already died from the disease. The spread of the disease has been faster over the past few days.

The Department of Health (DOH) is prescribing only one medicine so far, the anti-biotic doxycycline. The agency notes that this medicine is not 100 percent effective, it can only give some protection to infected persons. Besides, in the guidelines it has issued in using this prophylaxis, it notes several precautions. The medicine for instance, can NOT be given to the following people: pregnant women, women breastfeeding their babies, children below 8 years old. Physician’s caution should also be taken if one has liver or kidney disease, and the drug can cause allergy, diarrhea and/or other side effects like esophageal damage. See the list of precautions about doxycycline at

With a rather long list of precautions and prohibitions in the use of the only medicine being prescribed by the DOH to fight leptospirosis, infected patients and their loved ones will only wish that there are other alternative medicines. But what and where are they?

I have noted in my earlier articles before in this column: people's lifestyle evolve, communities evolve, diseases evolve, and so medicines and other medical treatment must also evolve. This requires endless research and innovation, endless invention of new and more powerful medicines not only for old and known diseases, but also for unseen and unknown diseases. Medicine and pharmaceutical research, therefore, should be encouraged, not discouraged.

If more profit for the successful research companies is the main incentive to encourage more companies and scientists to go into this kind of work, then society should give it to them. After all, not all pharmaceutical researches are successful and useful. Majority of such researches are unsuccessful and punched big losses for the companies that undertook those research.

What is important is that more effective medicines for more killer diseases should be invented and be made available to the public. There should be several medicines from more competing companies for each killer disease, so that patients and their physicians can have more choices for the specific needs and health/economic conditions of patients. Cost or the price of medicine, though an important consideration, therefore, becomes a secondary issue. The primary issue is the availability of more medicines for more various diseases.

Some rich people are willing to become poor just to save or prolong the life of a loved one. And in many cases, money is not the issue or the solution. It is the non-availability of more powerful drugs and vaccines that can save people from killer and ever-evolving diseases. So for some people, they may have all the money in the world but if the drugs that can cure their loved ones are not there, then early death will be certain.

Unfortunately, for many countries in the world including the Philippines, pricing and intellectual property rights (IPR) of medicines have been heavily politicized. Many politicians and the activist public do not ask about more competition in medicines and medicine producers. They ask for quick political fixes to non-political problems like evolving diseases. And this is where long-term problems will crop up someday. The short-term gains of cheaper medicines -- via price control, via patent confiscation like compulsory licensing and “early working” on still patented drugs -- will be defeated by the long-term loss or non-availability of new medicines that will be brought into the market.

It is indeed ironic that the public, the politicians and would-be politicians did not listen to the majority of the sectors – multinational and local pharma companies, hospitals, drugstores, physicians, pharmacists, and a few NGOs – that opposed drug price control policy. And this points to one ugly reality of politics: problems or issues that could be addressed with zero politics have become heavily politicized. For health issues for instance, politicians and the activist media or NGOs who do not produce even a single medicine dictate the policies for medicine innovation and pricing.

The Senator who has pushed hard the issuance of drug price control policy is no longer running for President. It is notable to mention perhaps, that while there were Committee meetings and public hearing on drug price control every 3 weeks on average while he was still a declared Presidential candidate, there have been zero Committee meeting since the time he abandoned the plan two months ago.

With the spread of both old and new diseases, or new strains of old diseases, the importance of encouraging endless research and production of more innovative and more powerful drugs is highlighted. Let us hope that harsh political interventions like price control and patent confiscation that discourage such innovation, will not be imposed easily and frequently.

Sunday, October 25, 2009

Global Capital 3: Service Charges and Capitalism

Consumers are king. This is the most important motto for most or all enterprises operating in a competitive business environment. Consumers therefore, have the vested interest to keep the economy as competitive as possible. Once the economy falls into an oligopolistic, if not monopolistic structure, consumers fall from grace. They no longer are the king. They become slaves.

A friend asked, if the service charge of 10 percent of the bill in restaurants is legal. Since there is a mandatory 12 percent value added tax (VAT) imposed by the government, having a 10 percent additional service charge makes the cost of meals in good restaurants become 22 percent more expensive.

I think the 10 percent service charge is legal. It is the restaurant's way of saying, "We are keeping the cost of our meals cheaper by cutting some salaries of our staff. But our staff are efficient, hardworking, polite and friendly, they need to be rewarded with some tip to augment their income. So we are passing the cost of such additional cost to you. Thank you."

Now this might seem an imposition without consultation, on the consumers and restaurant clients. Not exactly. If customers do not like this policy , then they can opt not to go to those restaurants, and look for other good food outlets which do not have mandatory service charge, a customer may or may not give a tip. And there are plenty of restaurants that practice this policy too. So it is additional competition among food outlets to attract more customers.

This makes competitive and free market capitalism beautiful, no matter what the anti-capitalists and the statists would say. Competitive capitalism allows one important factor that socialism or heavy regulation economies don't have: choice. Consumer choices. Lots of it.

The 10-percent higher cost of one’s food bill in a restaurant due to the service charge, the customers get value for that -- good service right there and then by efficient, smiling, and friendly waiters/waitresses. The latter perfectly know that if they do not smile and be polite to their customers, they may not see said customers again next time, they may even tell their friends not to patronize their restaurant because waiters and waitresses just collect service charges and they do not even know how to smile, how to be polite to their customers. So the restaurant will lose money, and later, waiters/waitresses will lose their job. So the mandatory or voluntary tip of 10 percent you give, you get clear, explicit additional service.

It's the 12 percent VAT that has no clear, explicit service to you. Some of the taxes you pay on VAT may go back to you in the form of street lighting or road maintenance, and some of it will simply be stolen, or be used for wasteful spending by the politicians and government officials.

For competitive capitalism to flourish, there should be few and low taxes. Not zero taxes. But few and low taxes. Not having 47 different taxes (and fees) that medium size companies are required, obliged, coerced, to pay to the government (local, national) every single year (WB-IFC "Doing Business" and WB-PWC "Paying Taxes" annual reports).

The hotel industry is another example of an industry under intense capitalist competition. Travelers and tourists can choose a variety of hotels and inns, depending on their budget and other personal or professional considerations. From backpacker type of small rooms, no frills but very cheap, to the most gallant, most elaborate architectural design, and very expensive rooms and other service charges.

I stay in hotels only when I attend international conferences and/or meetings abroad. So far this year, I have traveled four times, twice to Singapore and twice to the US (NY and LA), and consequently, stayed in 4 different hotels. My sponsors, all fellow free market think tanks and institutes that receive zero government funding (local or national government or foreign aid), pay for my plane fare and hotel accommodations.

What amaze me in those hotels is their uniqueness, the variety of their exterior and interior designs, their lobbies and swimming pools, and so on. But despite such variety of physical designs and amenities, there is one single common trait among them: the politeness of their staff, the quick and efficient services. These are hotels under certain global chains and hence, they compete for global visitors in a stiff global competition. Any dissatisfied hotel guest can always move to another hotel the next time they visit the same city. Or write something negative about their hotel which will then be posted in the internet and be made available to anyone who happens to stumble on such posting.

It is this fear of any negative publicity (and the desire for optimum customer satisfaction), whether in traditional media or in the blogosphere, that keeps those hotels – and restaurants, airlines, banks, spas, etc. – on their toes always. There is very little room for complacency and lousiness.

And we go back to the earlier observation on restaurant service charges. It is the rawness of capitalist competition that results in better services to the consumers, and competitive and rational prices. Price differentiation for different services for different people with different needs is one characteristic of competitive capitalism.

Next month, I will go back to the US for the third time this year, to participate in an international conference by a free market institute, to celebrate the fall of the Berlin Wall 20 years ago, one of the symbols of the failed socialist economic central planning and political prosecution, and to discuss the new walls erected by big governments around the world, including the Philippine government, in perpetuating old coercive regulations and taxations and in creating new ones.

The not-yet-over-the-brink economic difficulties due to the recent global financial turmoil, is often used by the anti-capitalist groups and people, to criticize the “evils and irrationality” of free market capitalism. But they do not realize that it is precisely free market capitalism that penalized personal and corporate irresponsibility. Capitalism without failure is like religion without sin. Corporate expansion and corporate bankruptcy are 100 percent part of capitalism and the competition that is inherent in it.

It is those attempts and various government regulations that claim to “prevent” future crisis that distort the natural system of reward and punishment in capitalist competition. The forthcoming elections in the country just 6 ½ months from now is a good opportunity for the various political parties competing for voters’ support, to distinguish themselves from others. Political competition based on clear ideology of supporting or discouraging personal responsibility, of abetting or dampening more government intrusion and taxation.

Voters need not listen to political pundits and other self-styling political analysts and commentators. Voters only need to look at their community if there is enough freedom and choices for them as consumers. Absence or insufficient level of choices and competition for their basic needs should be an indicator for them to support one or two particular political parties or candidates that advance a more competitive economy.

Last October 06, 2009, I wrote this.

Miscellaneous Economic Views

A friend in our economics alumni ygroups asked about our "economic crystal ball". I offered the following quickie comments.

On the Philippine peso appreciation, the US$ is suffering an endless beating, thanks to trillion dollars annual budget deficit of the federal government alone, and nearly 14 trillion public debt. The trend is there: the US government is spending like any irresponsible guy who spends more than what he earns, every single year for many years and decades, and just relies on endless borrowings to finance its irresponsible spending and lifestyle. So the days of huge debt payment are always with it.

Last year, migration of $ investments, many went to buy petroleum and related commodities. This year, the net "attractive" commodity is gold, reaching almost $1,100 a pound (or has it breached this level already?).

More people will be dumping the US$ in the coming days and years, causing it to depreciate and other currencies traded or exchanged with it (like the PhP) to appreciate, even if the economic fundamentals of the countries of those other currencies are not exactly good and improving. That is, even if the Gloria Arroyo government is corrupt and wallowing in various robbery scandals, and the next administration that will succeed her government will also corrupt and a theft, the peso can still appreciate.

The budget deficit will always remain high, with or without "Ondoy", "Pepeng" and other succeeding typhoons. The current administration will only worry about its spending and patronage, this year until early next year. Then it will leave the problem to the next administration. And the next admin will likely think too, "Heck, my government is paying for the debt, profligacy and robbery of the past administration. I might as well over-borrow also and let the next admin worry about my newly contracted debt and borrowings."

About effect on food production of the recent big typhoons, no doubt the effect is negative.
a) those to-be-harvested rice, many of those are gone and felled by heavy flooding, can no longer be harvested.
b) those already-harvested rice (before typhoons Ondoy and Pepeng came), the persistent cloudy skies disable rice farmers to sun-dry their harvest. A few days delay in removing the moisture content on newly harvested palay will result in blackening of the palay, affecting negatively it's color, taste and price

One quick solution is to abolish import tariff (currently around 50% I think, beyond quota level) and bring in cheaper rice from Thailand and Vietnam to come in quick. Government always asks the public to sacrifice, but government is always an arrogant and hypocrite institution that does not want to sacrifice by waiving any tax on essential commodities (rice, medicines, etc.), that contributes to their more expensive price. Time for the government to reduce its arrogance and hypocrisy.

So, will the economy "recover"? In the first place, the economy is never down. Some sectors are sputtering, but others are humming with activities and increased production.

But one shackle that will hound the country is the persistent call to "prepare for global warming and climate change". Global cooling is staring us in our faces and yet we prepare personal and government resources waiting for drought and warmer days and years. The government is evern creating new climate bureaucracies -- funded by tax money, where else -- like the Presidential adviser/consultant on climate change, and soon, a climate change commission to be created by Congress.

One result of this voodoo science thinking, is that energy policies are biased against cheap energy sources (like coal) in favor of "renewables" which may even get subsidies from our tax money even if they produce very little power. Also, it is possible that in the future, the government will increase the tax on oil -- like a WB Manila proposal to hike the current P4.50/liter excise tax on gasoline, to help plug the deficit and help "fight global warming".

One consequence will be another spate of brownouts. What production increase and economic growth can we expect if we depend on candles and expensive generator sets for our electricity?

* See also 
Global Capital 1: Why Market Turbulence are Necessary, November 19, 2007
Global Capital 2: ICT, Capitalism and Government, December 18, 2008

Saturday, October 17, 2009

Liberty, democracy, price control and tax competition

SINGAPORE – Liberty is a state of the individual or a collective where there is absence of external coercion in his life or their lives. Democracy does not mean the 51 percent of the population bullying the other 49 percent, but the ability of the minority to protect themselves from being bullied by the majority. Price control is economic coercion by the State dictating upon private enterprises how they should price their products or services, often regardless of the full cost of their cost of production and marketing. And tax competition is a good way to pressure governments not to impose too many and too high taxes on private enterprises as the latter have other alternative places to locate their businesses to.

These four concepts were among those discussed in the two-days (3rd) Pacific Rim Policy Exchange held in Pan Pacific hotel, Singapore, last October 14-15. These definitions may or may not be acceptable to other people, but that is how some speakers and reactors defined those terms during the conference. The event was sponsored by five think tanks: Americans for Tax Reforms (ATR), Property Rights Alliance (PRA), Acton Institute, International Policy Network (IPN) and the World Taxpayers Association (WTA).

Barun Mitra, the founder and director of the Liberty Institute in India, spoke on the first panel, Land reform and Property in the Pacific Rim. His discussions on democracy, property rights and rule of law, has provoked a number of constructive discussions and reactions from the audience. It was good that Barun mentioned that the “smallest minority is the individual”. Thus, bullying by the majority of the minority should be tempered through the promulgation and respect of the rule of law, and the respect of private property rights of the people. Two other speakers, from China and Thailand, spoke on the state of rural development, or underdevelopment, of their respective countries, and the pathways to overcome those hurdles to rural poverty.

I spoke on the second panel, Access to Medicines, and my paper was entitled “Access to medicines through politics: a preliminary assessment of the drug price control policy in the Philippines”. I explained that heavy politics, more than rational consultation with the affected players in the local health sector, was the main reason for the declaration of price control. Because of this, the policy has produced predominantly negative effects to certain private players in the sector (pharma companies, both multinational and local, drugstores, hospitals, pharmacists, physicians, and so on). The short-term effect to patients is of course positive as they will be able to save on certain drug prices, but the long-term effect will be negative: patients in the country may be deprived of more effective, more powerful drugs that are initially sold at higher prices as producers of these more revolutionary drugs will be scared of government confiscation of the success of innovation. The second speaker in the panel was Philip Stevens of IPN, who spoke on their recent paper, “Keeping it real: Combating the threats of fake drugs in poor countries”. Philip’s presentation attracted lots of discussions because of the gravity of the problem at the global level.

The third panel was on International Intellectual Property Challenges, and the speakers were from the Institute for Public Affairs in Australia, and from Philip Morris Hong Kong. Issues tackled by the speakers ranged from parallel imports of books, IPR issues like compulsory licensing for emission-cutting technologies, among others.

On the second day, the fourth panel was an exciting one, about International Tax Competition. One of the speakers, Daniel Mitchell of Cato, USA, fluently emphasized the importance of tax competition among countries. Economies that impose the least tax burden, both in low tax rate and simple procedures to comply, all other things being equal, are attracting more investments, that create more jobs, that promote more economic development among its people. Two other speakers, Sinclair Davidson from Australia, and Peter Wong of the Lion Rock Institute in Hong Kong, equally lauded the importance of tax competition, the “tax havens” and the economic growth that they encourage.

Panel number five was on Removing Barriers to Trade, and 3 good friends were the speakers. Chris Derry of Waycross Partners, USA, Wan Saiful Wan Jan of Malaysia Think Tank, and Alec van Gelder of the IPN, UK. Chris showed examples how they pressure the state government of Kentucky towards more transparency, the fantastic growth in traffic volume of their website. Wan discussed the dilemma of an independent, non-partisan think tank that promotes free trade and free market or liberal economic policies, in dealing with a government that is generally liberal in economic outlook but has unpopular political practices like crackdown on opposition. Alec discussed the development in the Freedom to Trade (F2T) global campaign, how many countries turn protectionist as they grapple with the global economic crisis, though there are some good news like countries proceeding with trade liberalization via bilateral arrangements.

The last panel was a discussion on efforts to Replace Income Taxes by Consumption Taxes. All the 3 panel speakers and moderator were again, my friends from recent years. The moderator was the Sec. Gen. of the WTA, Bjorn Tarras-Wahlberg. The 3 panel speakers were the heads of 3 of the biggest taxpayers’ associations in Asia: Japanese for Tax Reforms (JTR), Korea Taxpayers Association (KTA) and Momentum 107 of Hong Kong. Mr. You of JTR said that at current 5 percent VAT, it is possible for the Japanese government to abolish personal income tax and get the same overall tax revenues by raising VAT to 12.5 percent. Mr. Kim of KTA discussed the philosophical and practical possibility of moving away from income taxation to VAT or consumption taxation. Raymond Ho of Momentum 107 showed pictures of the dozens of events they conducted to pressure the Hong Kong government to stick to its Resolution 107, which states that expenditures cannot increase if they are not covered by sufficient revenues, a move for persistent balanced budget.

The conference also featured two dinner speakers, William McGurn of News Corporation on day one, and Dr. Iftekhar Chowdhury, head of the Institute for South Asian Studies, Singapore on the last day. ATR President, Grover Norquist, was the lunch speaker on day 1 while a new documentary on climate alarmism, “Not Evil, Just Wrong”, was shown on the lunch of the second day.

In addition to the various panel discussions and dinner or lunch talks, the networking and small group discussions among participants proved to be very effective in clarifying certain things and issues, and in forging some organizational alliances and partnerships.

As more governments become bigger and more statist, resulting in the usurpation of more individual rights to collective and government rights, the fight to assert individual liberty, personal responsibility, the rule of law and limited government becomes even more pressing.

The Pacific Rim Policy Exchange is now on its 3rd annual event. It is becoming a consistent big forum for independent think tanks and institutes from countries across the four continents around the Pacific Ocean. Lessons from the economic might of North American countries, from the roaring dragon economies of East Asia, among others, are subjects that continue to be probed by this important international event, the annual Pacific Rim Policy Exchange. I am very thankful to the main sponsors of this event, for the opportunity to attend the past 3 conferences, and even to present a paper and discuss one aspect of big government folly like price control in the Philippines.

Thursday, October 08, 2009

Abolish Income Tax 3: Taxes and Congress

There’s a new document posted in the UPSE website, "Fiscal imperative for next administration" by Romy Bernardo,

Dr. Felipe Medalla, Dr. Dante Canlas and Dr. Ben Diokno (all UPSE faculty members) were proposing to hike value added tax (VAT) from 12% to 15%, and income taxes (personal and corporate, I think) to be cut to 25%. Currently, personal income tax is up to 32% and corporate income tax is 30% (was 35% from 2005 to 2008).

Personally, I will support a VAT hike from 12% to 15%, or even 18%, if income taxes – both personal and corporate taxes -- are abolished, zero. The WB-IFC "Doing Business" annual report shows that supposedly capitalist Philippines has more taxes than socialist China and Vietnam. There are too many taxes that the Phil. government can collect and recoup whatever "losses" from a zero income tax policy, two of which will be the higher VAT and higher excise taxes.

Dr. Medalla, Dr. Canlas, and Mr. Bernardo are among the FEF fellows. But one of their co-fellows, Peter Wallace, will applaud any move towards a zero income tax policy.

I am not aware of any country in the world that has zero income tax (there are a few, maybe 5 or 8, states in the US which have zero state income tax). So you can just imagine the number of entrepreneurs, Filipinos and foreigners, and corporations that will be rushing to do business in the Philippines and create millions of new jobs. Of course there are other factors that investors consider (infra, peace and order, rule of law, etc.) but the factor on taxation alone will be a major incentive for them to come in.

Got 2 comments from the above points:
1. “The people will not stand for more taxes and no candidate will stand for more taxes. Abolishing Congress would be nice. Massive instant savings.”
2. “Increasing VAT would be regressive. Plus, it would also encourage the underground ‘cash economy.’”

Most people don't declare their real income, or don't file income tax at all. Smugglers, kidnappers, robbers, prostitutes, drug pushers, most in the informal sector, corrupt government officials, showbiz stars, etc. Check for instance how much the President’s husband Mike Arroyo and family pay in income taxes. Even the son, Cong. Mikey, cannot even declare a proper SALN. Also, those working in foreign aid and multilateral institutions -- UN, WB, ADB, IMF, OECD, USAID, etc., are not subject to mandatory income tax deduction. A few of them pay income tax, but most don't. So properly collecting income taxes is a big problem.

This makes income tax policy a huge hypocrisy: collect from a few, especially the fixed income earners, but not collect from the many, especialy the well-off.

On the other hand, even smugglers and robbers and corrupt government officials show off their consumption: new house, new car, new mobile phone, new laptop, new travel, new jewelries, recent dinner in expensive hotels and resto, etc. All such action are captured by VAT. The rich and the big time officials and consultants of the WB, USAID, UN, etc., don't eat in “turo-turo” or carinderia where there is no VAT collection. They eat in Greenbelt, Eastwood, other more fancy places where VAT collection is automatic and mandatory.

So VAT is progressive. They spare the poor, and collect from the rich. Income tax is the reverse. It mainly collects from the fixed income earners, collect little from the rich.

On abolishing Congress, it’s not a wise move. We cannot abolish Congress. All new legislations, say abolishing income tax, or abolishing certain departments and ad-hoc offices under the Office of the President (OP), etc. will require legislation. So we need legislators. Whether we go for big or small government, big or small taxes, etc.

What should be abolished is the party-list system in Congress. It's another hypocrisy. Even the COMELEC is complaining with the 300+ groups that want to be considered as a political party for the "marginalized" sectors. Cockers (Sabungero at magmamanok), they fight each other who is the marginalized between the two of them. If there are so many groups who still feel marginalized despite the huge number of congressmen, senators (plus departments and agencies under the executive branch to "fight poverty"), then all of them must be a failure, somehow. So we have to choose who will represent the “marginalized” groups, the district-based (well-defined territorial coverage) or the party-list (nationwide coverage) congressmen. I say retain the former, abolish the latter.

Never fails. Any government policy to attract "participation" by the public almost always attract the most shrewed, the most opportunist segments of society. That is why you seldom see intelligent people in business jumping into politics. But politics and politicians are always jumping into endless business regulation and extortion.

Two more reactions from friends:
3. "I think zero income tax would be too drastic. I'd settle for 18% income tax and 15% VAT", and
4. "Is there anything in the Public Finance literature that proposes zero income tax policy?"

Between 0 to 18% income tax, both personal and corporate, I will still be happily supporting it, but VAT should NOT increase even by 0.5% if there is no corresponding income tax cut. That is why I never supported the people and groups who pushed the 12% VAT with no income tax cut in the 2004 debate.

Zero income tax is not a far-out proposal. I'm not the original proponent of that. I have heard or read it before, And at least 3 local newspaper columnists are proposing it -- Peter Wallace of Manila Standard, John Mangun of Business Mirror, and Rene Azurin of BusinessWorld.

The World Taxpayers Association (WTA) is pushing for low, flat tax. At least 7 countries now have 10% flat tax policy. Until about 3 years ago, the tax competition rate was at 12%. Then other countries became more aggressive than them, hence the 10% rate. I will not be surprised if 3 yrs from now, some countries will have 8% flat income tax rate.

Below is data from WTA. Year in parenthesis is the period of effectivity of such flat income tax in those countries.

Kyrgyzstan (since 2006) 10%
Kazakhstan (2007) 10%
Macedonia (2007) 10%
Mongolia (2007) 10%
Albania (2008) 10%
Bulgaria (2008) 10%
Serbia (2008) 10%
Georgia (2005) 12%
Macau 12%
Belarus (2009) 12%
Russia (2001) 13%
Hong Kong (1947) 15%
Ukraine (2004) 15%
Iraq (2004) 15%
Montenegro (2007) 15%
Mauritius (2007) 15%
Czech Republic (2008) 15%
Romani (2005) 16%
Slovak (2004) 19%
Jersey and Guernsey (1940) 20%
Estonia (1994) 20%
2010 19%
2011 18%

See also Part 1, Low flat tax and economic growth, June 27, 2008, and
Part 2, VAT and tax extortion, August 01, 2008

Tuesday, October 06, 2009

Tearing down the wall, part 3

My friend, Winthrop Yu, posted this in one of our ygroups, also in his fb status,

Joint declaration by VOA/BBCWS/DW/RFI/RNW
September 29th, 2009 - 13:50 UTC by Andy Sennitt.

"20 years after the fall of the Berlin Wall and the end of the Cold War, freedom of speech is still far from being a reality in many countries of the world and journalists have to face ever more sophisticated restrictions preventing them from reporting freely. While, for some of us, multimedia usage has become an almost indispensable part of everyday life, we should not forget that access to free information is still limited to just one third of the world`s population...."

Media censorship, or its less visible cousin, media bribery for self-censorship and favorable reporting in favor of government and powerful people, remains a reality today. It's even pitiful when even non-traditional media like online social neworking are being censored.

My friends in China are complaining that facebook and (or are banned in China. They have a facebook account, but they can open it only when they are abroad.

When I was in Germany last year for a 1-week seminar, my fellow participants from China, they were always on the net whenever we have a breaktime. They uploaded our groups pictures and trips. When they went back to China, there zero updates from their facebook account. My other Chinese friend who travels more frequently abroad is lucky, he can check his facebook and visit some blogs when he's out of China.

The Atlas Economic Research Foundation (www.atlasnetwork. org) sponsored a "Tearing down the wall" project last month. They were able to raise $20,000 in 20 days in the first 3 weeks of September. The fall of the Berlin wall (that's why it's called "tearing down the wall") and the collapse of communism in Europe 2 decades ago, and the rise of new walls and new restrictions to individual freedom, are the main themes of the "2009 Freedom dinner and conference" this coming Nov. 9-10 in Washington DC. Atlas invited me to be one of the speakers among the "freedom fighters" from selected countries around the world.

The kind of "freedom" that our think tank, Minimal Government Thinkers, advocates, and which is also being promoted by Atlas and many of its partner think tanks around the world, is individual freedom. This is often subsumed if not trampled upon, by efforts to advance "collective freedom" by the forced collectivists. Several examples to show.

One, our monthly income is not ours alone. The collective has the right to confiscate 1/3 of that every single month (32 percent personal income tax in the Philippines for incomes P500,000 per year or higher (roughly US$10,638 at P47/$) of of our lives as long as we are working.

Two, if one invents and develops a successful and very effective medicine, the collective has the right to confiscate the IPR of that invention. The high cost of R&D to develop the revolutionary medicine, including the losses for the failed experiment on other drugs, is the individual's (or the firm's) alone. But the invention for a successful drug can also belong to the collective. This is done through compulsory licensing (CL) policy.

Dozens, if not hundreds, of other instances where individual freedom is trampled upon by the statists and socialists. They are always shouting "Bayan Muna" ("country first") and similar calls. Even the most corrupt politicians like that motto. It gives them endless power to tax, intervene and regulate, because they are the administrators of the collective.

Saturday, October 03, 2009

Warming Hysteria: Galactic Cosmic Rays, UN FCCC

Global cooling – not warming – seems to be accelerating this year. Without going through scientific papers with their graphs, charts and greek equations, even without checking temperature data from surface stations (say PAGASA data for the Philippines) or from satellite data (say from UAH, RSS, Hadley). We just look around, look up the sky, especially, and recollect the weather since January up to September this year. It was cold in January to February, of course. Yet it was still cold in March up to Holy Week in early April. There were two typhoons in April, another two typhoons in May. March to May are officially “summer” months but it was mostly cloudy and rainy. One of my friends whose business is manufacturing and selling umbrellas and raincoats, told me that she’s been making money as early as April.

We now go to more objective and more scientific way of observing climate. In my article on September 10, Solar minimum and Copenhagen, I showed there a graph that compares global temperature from satellite data (UAH and RSS) and carbon dioxide (CO2) concentration from 1979 to August 2009 (30 years period). The graph showed cooling of around 0.24 Celsius from 2002 to August 2009, whereas CO2 concentration keeps on rising, up to around 390 parts per million (ppm), from only around 285 ppm during the Industrial Revolution.

I argued that it was the weak Sun in the current deep solar minimum that allowed the entry of huge number of cosmic rays (coming from exploding stars) into the Earth’s atmosphere, the rays catalyze the formation of aerosols that form the nuclei for cloud formation. So weak Sun, plenty of cosmic rays, lots of cloud, sunlight is blocked from reaching the Earth’s surface, lots of rainfall, global cooling.

We will notice also that even if there are no typhoons, the sky is often dark as there are lots of clouds in the lower atmosphere (the troposphere). So when typhoon “Ondoy” (international name “Ketsana”) hit Metro Manila and neighboring provinces, the typhoon dumped huge volume of rains that inundated a wide area of the Philippines. As of this writing, nearly 300 people have been confirmed and counted as dead. There are many more missing, so the headcount should rise in the coming days.

After the typhoon, facebook and other social networking was also flooded with “blame global warming and climate change” posting by a number of people. I challenged almost all of my friends who posted such and argued that this is one proof that we are in a period of global cooling, not warming. And the weak Sun, not lots of CO2 in the air, is mainly responsible for this cooling or what the warmers would euphemistically call “global warming” as “climate change”.

Two days ago, a scientist at NASA, Dr. Tony Phillips, wrote a paper, "Cosmic rays hit space age high", where he noted that cosmic rays are +19 percent plentier or stronger this year than last year. The graph he showed just confirms the inverse relationship between solar activity and cosmic rays level. Cosmic rays have been steadily rising from 2001 up to 2009.

So now, one question that will crop up is, more cosmic rays this year, that's why there are lots of clouds in the sky? Partly Yes, but one Australian scientist that I have read, Dr. David Archibald (www.davidarchibald info) says that there is a lag of one year from the Sun's level of activity or inactivity, to the effect on cloud formation and volume.

So if we think that it is always cloudy these days and months, wait for next year. While solar minimum was also observed last year, the Sun is even weaker this year than last year. So the implication is, we will hardly see the Sun next year! Clouds will rule the sky, even during "summer" months of March-April-May, again!

On another note, a British astrophysicist, one of the scientists that I have heard during the 2nd International Conference on Climate Change (ICCC) in NYC last March, has practically predicted the wrath of typhoon “Ondoy”, about 3 weeks before Ondoy pummeled Metro Manila and the surrounding provinces.

In its Weather Action (WA) news no. 66 dated September 27, 2009, owner of independent weather forecasting firm WA, Dr. Piers Corbyn, reported that as solar cycle 24 (a solar cycle would last for 11 years on average) is starting from an extended solar cycle 23 (it lasted for more than 13 years), a lot of Sun-triggered extreme events would happen, including the last typhoon Ondoy. See

Dr. Corbyn and his team do not rely on meteorological computer models. Instead, they watchthe Sun: sunspots, solar flares, solar magnetic field, the level of cosmic rays, etc. and predict the kind of weather disturbances that are likely to occur, where and when!

One may wonder, then why wouldn't the UN, UK, US, Philippine and other governments get his services to prepare themselves for big catastrophes? The quick answer that I can think of is this: the UN and all those governments believe in CO2-climate theory (actually just a hypothesis), they all hate the Sun-climate theory which Dr. Corbyn and many other astrophysicists and geologists explain. Those governments want only one thing: ecological central planning dream. They cannot regulate the Sun and cosmic rays from the outer universe, so they cannot implement their deep desire for more environmental regulations and ecological central planning.

Dr. Corbyn's services are for a fee, of course. He receives zero tax funding or subsidy for his scientific work and climate prediction services.

Today, the 16th typhoon of the year, “Pepeng” (international name “Parma”) is entering Cagayan province in the north. The typhoon was far from Metro Manila. Dark clouds did not seem to go away even after typhoon “Ondoy” left the country last September 27.

The thick volume of cosmic rays in the Earth’s atmosphere is causing lots of rainclouds, which later become heavy rainfall, which causes heavy flooding, and results in heavy human misery.

But certain sectors of society keep blaming global warming in the face of obvious cooling. The desire for more environmental regulations and taxation is way deep in the hearts and mind of these people. Lie if they must, fool if they must, corrupt science if they must, so long as they can have the power for more ecological central planning.

Major Actors in Ecological Central Planning

The UN FCCC meeting still ongoing in Bangkok, up to October 9. 
One of my friends posted this in her facebook account about an hour ago.

The figures in that report showed, among others: About 3,000 climate bureaucrats from 190+ countries and about 1,500 climate activists in Bangkok! And both want ecological central planning, it's just that the former want a "milder" carbon emission cut, while the latter want as deep cut as possible. Can't we all go back to riding horses and bicycles? That seems to be at the back of the mind of many of the climate activists. 

I think far from the limelight, but applauding those central planning moves, are the climate bankers and traders. These are the likes of Goldman Sachs, etc. which made big money in carbon trading, which was about $128 billion in 2008 alone, from private corporations in EU, Japan, other rich countries.

It is an ugly alliance of big government + big activist NGOs + big rent-seeking banks and traders. They all say one thing: Over-regulate and overtax carbon, the Sun is dead as a climate driver, more climate bureaucracies, and approximate the Stone age lifestyle.

Anyway, I made this comment on her wall:

"Current 'deep solar minimum' for the century showed weak solar magnetic field, few sunspots, weak solar wind, so more galactic cosmic rays enter the Earth's atmosphere, which help catalyze the formation of low-lying clouds. More clouds, less sunlight that reach the Earth's surface more rainfall, global cooling.

Cooling started in solar cycle 23 (up to early this year), the Sun has very similar behavior with solar cycle 4. Dalton Minimum occured in solar cycles 5 and 6. So the projection is that solar cycles 24 (current cycle) and 25, corresponding to 2 1/2 decades, period of cooling. 

How many climate bureaucrats and activists understand that?"