Sunday, August 30, 2009

China Watch 6: China-India Blog, Eco-Protectionism

My good friend from Delhi, India, Barun Mitra, opened a new blog called

It's a good blog, it encourages the citizens of the two biggest countries in the world in terms of population size to a civil and high level discussion and dialogue.

One of Barun's posting is entitled "China and India agree on a common platform on climate change". It was a good observation by Barun that the 2 countries have formed a number of important joint positions, like (a) both will not agree to legally-binding norms, (b) both will oppose trade barriers linked to climate change issues, and (c) both will undertake joint mitigation activities to reduce carbon emission.

I am just wondering if there are enough known Indian and Chinese climate scientists, preferably solar physicists, who can explain to the Environment Ministry, the legislators and the public of both countries, that the current global cooling and deep solar minimum is a prelude to a Dalton Minimum type of 2 or more decades of severe cooling. And that CO2 has very little or nothing to do with global climate.

The environmental scammers and bureaucrats cannot understand solar cycle dynamics and Sun-climate link. They only understand CO2-warming theory and even this theory is highly discredited by current global cooling, at least over the past 7 years.

Australia's parliament set a good precedent by killing PM Rudd's cap and trade or emission trading system (ETS) bill. I sincerely hope that India and China governments will kill efforts to propagate poverty by making their otherwise cheap energy sources very expensive to "fight" a non-existent enemy. It should be impossible for China and India to grow fast and lift from poverty hundreds of millions of their poor citizens if their energy sources become very expensive. Even the poorest rice farmer need gasoline for his hand tractor. Even the poorest rural villagers need some electricity for their house, for their children's studies. Now the UN IPCC and FCCC bureaucrats, almost all of whom are non-scientists (Pachauri of IPCC is an economist, de Boer of FCCC is a diplomat), want energy prices to be as expensive as possible even for the poor countries, so that said bureaucrats can "save" the Earth from global warming?

A related note, below is my oped paper that was published by The China Post: last April:

What's killing the poor is poverty

Friday, April 4, 2008
By Nonoy Oplas, Special to The China Post

There is a growing notion that rich countries should slash imports from poor countries whose antiquated factories are heavy carbon emitters: this eco-protectionism is in fact good old-fashioned protectionism and would hit the poor hardest.

"We want a binding decision now that we will take measures to protect [EU] industries in 2012 in case there is not agreement," European Union Commission President Jose Manuel Barroso told London's The Times this March, talking about import curbs to protect Europe's energy-intensive industries.

Import duties or compulsory carbon quota purchases on goods "from countries that refuse [carbon] restriction efforts seems therefore indispensable," French President Nicolas Sarkozy wrote to Barroso in January.

This week, the U.N. official in charge of climate talks on climate change in Bangkok, Yvo de Boer, evoked the specter of "food miles" -- a tax on imported food: the greater the distance, the higher the fee. In fact, you get fewer carbon emissions overall by growing green beans in Kenya and flying them to Europe in big bad aeroplanes than you do by growing them in Europe and selling them at a charming rural farmers' market.

This is just another protectionist racket that would do little or nothing to reduce carbon emissions. What it would do is push up food prices at a time when high prices are causing street protests from Mexico to India and Cote d'Ivoire.

Such trade sanctions would slow down worldwide economic growth but not climate change.

Trade barriers would not even help industries in developed countries. After benefiting a few industries in the short-term, they would eventually raise costs for industry and consumers -- stifling growth, innovation and competitivity in world markets.

"Goals to reduce EU emissions by 50-80 percent by 2050 are pointless if this is done through pollution displacement -- by increasingly importing CO2-intensive products from the rest of the world. For the EU to reduce its global CO2 emissions, systemic changes to the European economy are needed," a recent World Wide Fund for Nature (WWF) report said. The WWF wants developed countries to import "cleaner" goods but climate activists, unions, Barroso and Sarkozy want developed countries to cut their imports of CO2-intensive goods, especially from China, India, South Africa and Brazil. The European Trade Union Confederation demands "carbon taxes" on imports.

Copyright © 2008 The China Post.

See also:
China Watch 1: World's Largest Economies, Population, 2005, April 20, 2006
China Watch 2: China's Tourism, May 17, 2006
China Watch 3: World's Largest Traders, 2004, June 03, 2006
China Watch 4: Chinese Nationalism, Tibet, April 23, 2008
China Watch 5: China's New Patent Law, February 10, 2009

Saturday, August 29, 2009

Inequality 1: Rich Getting Richer is Good

Most people shudder at the thought that the "rich are getting richer" because the next phrase or sentece will be, "and the poor getting poorer". While concern for inequality in society is understandable, it should not be used as a reason or excuse to pull down the super-rich via high taxes and multiple regulations, so that the government will have more money to subsidize and uplift the poor.

By being super-rich, they immeidately pull up many people out of poverty. Compare a middle-income person who earns $1,000 a month, and a super-rich man who earns $1 million a month. In Philippine context, the former will be driving his own car and will have one house helper and would probably be renting a house. The latter will have 3 or more big houses and each house will have several employees (cleaners, cook, gardeners, electrician, etc.), will have a fleet of cars and have several drivers and mechanics, will have one or more big corporations hiring several thousands of staff and personnel.

While remaining poor for several generations in a clan is a bad thing, poverty for some is self-inflicted like the lazy, irresponsible and dishonest. They may be hard workers but if they are also party hard too often (say they work 6 days a week but they also drink and party 6 or 7 nights a week) and do not save enough for the rainy days, then poverty is the logical consequence.

Societies will be better off if inequality among people is respected. There is no limit to what the super-efficient, highly ambitious and hard working people can do. And there is also no limit or bottom to the poverty and misery of the incorregible irresponsible, zero ambition and lazy people.

Thus, instead of demonizing the super-rich, societies should respect and encourage more people to become super-rich.

What government should do is to simplify business regulations, drastically reduce business bureaucracies, open up the market to more foreign competition, reduce or control local oligarchy due to protectionism against foreign competition, promulgate the rule of law.

Meanwhile, Forbes magazine  released early this week its "The Philippines' 40 richest"

Name Net Worth ($ mill) Age

1 Henry Sy 3,800 84
2 Lucio Tan 1,700 75
3 Jaime Zobel de Ayala 1,200 75
4 Andrew Tan 850 57
5 John Gokongwei 720 82
6 Tony Tan Caktiong 710 59
7 Eduardo Cojuangco Jr. 660 74
8 Enrique Razon Jr. 620 49
9 Manuel Villar 530 59
10 George Ty 515 76

This report was picked up by some Philippine broadsheets, like this report,

"RP's richest getting richer"
The Philippine Star, August 29, 2009

On the above list of 10 richest Filipinos, 3 of them can be suspected of having gotten very rich because of politics. Cojuangco got very rich during the Marcos administration and was able to sustain his wealth in the succeeding administrations. He heads a big political party while 2 of his sons are Congressmen. Villar is a politician, was former House Speaker and former Senate President, now still a Senator running for President in May 2010 elections. While Razon is closely connected with past and current administrations.

All the other 7 super-rich Filipinos made money out of entrepreneurship. Of course, in an environment of heavy government regulation and intervention, it is impossible for any entrepreneur to become very big unless they have to play some politics. But such practice is kept to the minimum as the bigger part of work is on consolidating and expanding their businesses.

Friday, August 28, 2009

Adam Smith's economic morals

We uploaded in our website,, 2 papers the other day. The author of the first paper, Dr. Emmanuel de Dios, was my former professor in my undergrad and now the Dean, University of the Philippines, School of Economics (UPSE). Definitely among the brightest economic minds in this country, and definitely among the non-Statist economists too.

Here he reviewed and discussed Adam Smith's 2 books, Theory of Moral Sentiments (TMS) and the Wealth of Nations (WN). Really fantastic way of connecting the "common denominator" of Smith's philosophical and economic works.

I told Sir Noel that Adam Smith's philosophical and economic ideas almost perfectly match our advocacies in MG. We ourselves do not advocate zero government just Minimal Government, similar to Smith's Minimal State. The liberals, european liberals I mean, call it Lean State, big emphasis on the role of markets and individual choice/freedom and individual responsibility.

In case you are interested to also post his paper in your blog or website, let me know so I can give you his email address to inform him.

The second paper is my own discussion of the evil of re-introducing re-regulation of the local oil industry.

I copy-pasted a few relevant paragraphs of the 2 papers below.

(1) Smith’s Economic Morals: An Introduction
by Emmanuel S. de Dios, PhD,
July 2009 (15 pages)

(originally posted at UPSE's website,
http://www.econ. respub/dp/ pdf/DP2009- 04.pdf)

... Underlying Smith’s argument is his fundamental claim that it is in people’s nature to engage in reciprocal exchange for mutual benefit. Smith calls this "an inherent tendency to truck and barter". It will be seen that this is in fact an extension of the moral philosophy Smith had already laid down in the TMS. On the one hand, people stand in need of each other’s assistance; on the other hand, there is no more reliable means of eliciting assistance than through an appeal to the other person’s self-love. While one may appeal to the another person’s charitable motives, this is an inherently weak incentive; the only reliable incentive is for him to realise that you can perform a service for him in exchange (do ut des = I give and you give). Hence this famous line:

"It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own self interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages." [WN I.ii.2]

...Historically, Smith argued, the attempts of government to direct and manage the course of specialisation caused more harm than good. He criticised the then-prevailing system of economic philosophy, mercantilism, for its wrong-headed ideas of protecting certain sectors of the economy, discriminating against foreign goods, and creating monopolies. While the natural price was the lowest that could be gotten in the long run, monopolies raised prices to "the highest which can be got" [WN I.vii.27]. The main reason this occurred was that lobbies frequently managed to persuade lawmakers that "the prosperity of the nation depended upon the success and extension of their particular business"

Finally, as already noted, Smith also criticised the fiscal profligacy of governments, which reduced the capital available for investment (now known as the "crowding-out" effect). He thought it presumptuous that governments should presume to lecture private individuals regarding how to spend their resources:

"Great nations are never impoverished by private, though they are sometimes by public prodigality and misconduct." [WN II.iii(2).10]

"It is the highest impertinence and presumption…in kings and ministers to pretend to watch over the economy of private people, and to restrain their expence, either by sumptuary laws, or by prohibiting the importation of foreign luxuries. They are themselves always, and without exception, the greater spendthrifts in the society. Let them look after their own expence, and they may safely trust private people with theirs. If their own extravagance does not ruin the state, that of their subjects never will." [WN II.iii(2).36]

(2) Consumers' welfare through deregulation, not politicized pricing
by Nonoy Oplas
August 26, 2009 (4 pages)

".... Price regulation means politicized pricing. Politicians and government bureaucrats, not the sellers and consumers in the supply-demand dynamics, will determine what is the “appropriate” price of the regulated commodity. When demand would increase significantly, say people suddenly have extra income, or they over-spend their savings for a big fiesta or festival, etc., prices will rise when suppliers did not anticipate such big increase in demand. But under a politicized pricing regime, prices should remain where they are unless the price regulators and bureaucrats will say, “Yes, you may raise your prices, but only at this level; in addition,…”

Renewed oil price control scheme will attract the most corrupt politicians and bureaucrats. The corrupt will be so thrilled to have the power to say “Yes” or “No” to all applications for price adjustment by ALL corporations and players. All they have to do is to delay by one day, one week, one month, any upward price adjustments regardless of the reason, in order to force those companies to give them bribes so that price adjustments will be acted upon quickly...."

Saturday, August 22, 2009

School choice, Swedish experience

Dan Mitchell of Cato went to Stockholm this week to attend the Mont Pelerin Society (MPS) meeting. I know some friends from the US and UK who attended the said meeting. Anyway, Dan posted this in his blog:

The Mayor of Stockholm... mentioned that the number of students in private schools had skyrocketed after the implementation of Sweden’s school choice program... The number of students attending private high schools has jumped from 1.7 percent in 1992 to 19.5 percent in 2008. Not surprisingly, the quality of education is high. Indeed, researchers have looked at the data and concluded that, “Our findings support the hypothesis that school results in public schools improve due to competition.”

A Swedish friend, the Sec-Gen of the World Taxpayers Association (WTA), Bjorn Tarras Wahlberg, once discussed how the Swedish Taxpayers Association of which he was a key leader then, succeeded in the campaign for "half left" or personal income tax cut to 50 percent, from something like 70 or 80 percent top marginal income tax rate. But after a few years, the income tax rate went up to something like 62 percent. I supposed this has gone down again?

Many parents will not be able to send their children to private schools and pay high school fees, if their take home pay is small due to high personal income tax.

In the Philippines, most middle class and upper class parents send their children to private schools, from pre-school to university. Private schools are very responsive to parents' needs. There is also a wide variety of education "specialties" in elementary and secondary schools.

Of course the State still insist in taking as much taxes from us as it says that education is "government responsibility and not parental responsibility".

High remittance fees for overseas workers

High cost of sending money home is one of the problems of those working abroad. In the Philippines, bank charges are normally around 5 percent of the amount sent, up to 10 percent if coming from certain countries.

I do not know the mechanics in sending the money why some 5 percent or more is taken away by the banks. But I suspect that certain government taxes and fees should be among the biggest factirs why remittance charges are generally high.

Below is a portion of a news report on the subject.

Filipinos Abroad Pay a Lot to Remit Money Home, News Feature, Posted: Aug 19, 2009

MANILA, Philippines—Filipinos around the world pay between $6.93 and $19.05 to remit $200 to their families back home, the Trade Union Congress of the Philippines (TUCP) quoted a World Bank study of global money transfer charges as of the first quarter of 2009.

In a statement, the TUCP secretary general Ernesto Herrera said Filipino workers in

a) the Kingdom of Saudi Arabia pay an average of $6.93 remittance fee, whether they transmit $500 or $200.

b) Spain follow next, shelling out an average of $12.42 to dispatch $500, or $10.64 to transfer $200.

c) Germany pay out an average of $13.06 to forward $500, or $11.07 to convey $200.

d) United States spend an average of $12.79 to send $500 home to their families in the Philippines, or an average of $11.45 to remit $200.

e) United Kingdom shell out an average of $17.75 to wire $500, or $14.40 to transfer $200.

f) Italy spend an average of $22.28 to send $500, or $19.05 to remit $200....

See the news report here,

Tuesday, August 18, 2009

"Predatory pricing" in Manila Times

My latest paper, "Unintentional predatory pricing via government price control" (August 4, 2009) was reported in the Manila Times. The reporter, Ms. Ira Karen Apanay, was there during the "Health Forum" that day.

Wednesday, August 05, 2009

Generic-drug makers see drop in revenue

THE revenue of the local producers of generic drugs would be greatly affected once the government implements the Cheaper Medicines law on August 15.

Bienvenido Oplas Jr., president of the Minimal Government Thinkers Inc., said the local pharmaceutical companies would have to adjust their current selling prices of generic medicines once the multinational pharmaceutical companies slash their medicine’s prices into half in compliance with the law.

Oplas explained that the local pharmaceutical companies could still bring down their prices up to 50 percent, but they may have to lay off some of their medical representatives, “or they will shut down.”

The Cheaper Medicines Act of 2008 requires pharmaceutical companies to comply with the government’s own pricelist, to be sure that the poor and middle-income earners can afford the medicines being sold in pharmacies.

Oplas said the local companies will be forced to reduce again their present selling price to be competitive.

Willy Fabroa, public relations officer for the Philippine Chamber of Pharmaceutical Industries, said the local pharmaceutical companies currently produce more than 200 molecules, which are only equivalent to 500 dosage forms of generic medicines in the country. But the multinational pharmaceutical companies produces more than 600 molecules, which mean that the consumers need to buy branded medicines that the locals cannot produce.

-- Ira Karen Apanay


Then this news report was picked up by Asia Business Daily,

Generic-drug makers see drop in revenue The Manila Times 2009-08-05

THE revenue of the local producers of generic drugs would be greatly affected once the government implements the Cheaper Medicines law on August 15. Bienvenido Oplas Jr., president of the Minimal Government Thinkers Inc., said the local pharmaceutical companies would have to adjust their...

Saturday, August 15, 2009

Warming Hysteria: Sunspots and Politics

"Astronomers: 'Sun's output may decline significantly inducing another little ice age on the Earth'
'Maunder Minimum will arrive in time to save planet from utterly foolish global carbon tax'"

That's the headline by Marc Morano,

Marc quoted a number of solar physicists (Dr. William Livingston, Dr. Matthew Penn, Dr. Cornelius de Jager, etc.) who declared that

"regardless of the relation to the sunspot cycles, magnetic intensity in sunspots is decreasing and if this continues in the same way as it has for the last 15 years, the Sun will be devoid of sunspots in five years time: overall the Sun's energetic output will decline significantly inducing another little ice age on the Earth."

This is another significant scientific finding. There is too much science about the Sun, and even the cosmic rays coming from outside our solar system, that the public and policy makers especially, should consider and understand. Over-reliance in blaming carbon emission is too simplistic. There is heavy politics and rent-seeking in carbon regulations like carbon tax, carbon cap and trade, carbon offset, etc.

But as sure as the Sun rising tomorrow and everyday after, the truth about the Sun-climate link will come out.

When that time comes, I really wish that the United Nations, the mother of all climate alarmism bureaucracies in the planet, will be significantly defanged. I also wish that many of its agencies and programs be abolished. All they do is paint all the scariest projections about the planet and its inhabitants, in exchange for more tax money, more political and regulatory powers, and more expensive global meetings.

As of August 13, NASA’s has this tally in number of sunspot-less (i.e., zero sunspot) days:

Current Stretch: 34 days
2009 total: 176 days (78 percent)
Since 2004: 687 days
Typical Solar Min: 485 days

Since 01 January 2009 up to August 13, 176 out of 225 days or 78 percent of all days have zero sunspot. This is very significant. In terms of percentage of days with not a single sunspot, this year is already in the top three since 1849. If current slumber of the sun will continue for the rest of the year, we should be hitting 80 to 85 percent of zero sunspot days.

Over the past 160 years, the top five years with highest sunspot-less days were:

1. 1913, 311 days, 85 percent
2. 1901, 284 days, 78 percent
3. 1878, 278 days, 76 percent
4. 2008, 266 days, 73 percent
5. 1912, 253 days, 69 percent

Why is a prolonged stretch of zero sunspot important?

Long number of few or zero sunspot days means (a) weak solar magnetic field, weak solar wind, (b) more galactic cosmic rays enter the solar system including the Earth, weak solar wind to push them away, (c) more low-lying clouds are enhanced and formed, lots of sunlight are blocked, and (d) global cooling results. Such cooling has nothing or very little to do with CO2 concentration in the atmosphere.

There are a number of proofs for the current global cooling. For instance, July 2009 was the coldest July or 2nd coldest July on record for at least 10 states in the US, see “July’s climate: chilly USA, torrid globe.”

Here in the Philippines, cloudy skies have been the norm since last year up to the present, which is consistent with the above-mentioned causation between few sunspots and low-lying clouds. The summer months of March-April-May this year were sidestepped by the prolonged “cold front” that started in late 2008 to April this year. The rainy season came 1 ½ month earlier, in mid-April, instead of the usual July. A number of farms planted to “summer crops” like tomato, onions and water melon were destroyed because of such early onset of the rains.

For the first half of August this year, two typhoons (local names “Jolina” and “Kiko”, international name of the latter was “Morakot”) pummeled the northern part of the country. Morakot killed at least 22 people in the Philippines despite not hitting a landfall, while it killed several hundred people in Taiwan. Too much rainfall eroded mountainsides that were previously thought to be stable, causing widespread landslides.

Meanwhile, the UN IPCC is preparing to produce its 5th Assessment Report (AR5) and the UN FCCC is busy conducting various global meetings prior to the big meeting in Copenhagen this coming December for a “post-Kyoto Protocol” agreements to drastically cut global emission of the “evil” gas, carbon dioxide (CO2).

Until the IPCC and many governments later demonized CO2 as an evil gas that causes global warming, this gas is known in the biological sciences as a very useful gas. It is the gas that we humans exhale, that our pets and farm animals exhale, and it is the gas that our vegetables, fruits, flowers and trees need when they produce their own food via photosynthesis. It is actually plant food.

Now the useful gas is pictured as evil that must be drastically reduced globally. Can environmental bureaucrats and politicians do it? Yes, they think they can. That is why they invented the UN Framework Convention on Climate Change (UN FCCC), Kyoto Protocol, the various expensive global meetings to succeed Kyoto, and the various “anti-climate change” bureaucracies in so many governments, both national and local.

Their grand design is plain environmental regulation. They forget or they deliberately overlook the Sun, inter-planetary orbit around the sun, galactic cosmic rays, volcanoes, the ocean, and other natural causes. For them, only the evil CO2 matters.

Why is this so? Political science, not climate science, provides the answer. Environmental bureaucrats, politicians and their militant environmentalist group backers cannot regulate the Sun and its solar wind. They cannot regulate cosmic rays that come from outside the solar system. They cannot regulate volcanoes and ocean that contribute to emission and/or depository of certain greenhouse gases. But they can regulate carbon emission. So they play the global hero by demonizing this gas and reducing their emission, by regulating and curtailing human economic activities that emit this “evil”.

I believe that we should deal with soot, methane, CFC, lead, carbon monoxide, particulates, mercury, etc. These harmful chemicals and gases have both short-term and long-term negative effects on human health. We should have clean air, clean water, clean environment, mainly for their own sake. But not to "save" the planet because the planet is never in danger.

Because of the successful demonization of CO2 by the UN, many governments and the big environmentalist groups, a non-commodity like the gas that we exhale suddenly becomes a multi-billion dollar commodity.

The carbon cap and trade system was worth US$63 billion in 2007 and US$128 billion in 2008. That was cap and trade among private corporations alone in the EU and Japan. Not included there are corporations in the US, Canada, Australia, China, Brazil, India, Korea, etc. because some or all of them were either not signatory to the Kyoto Protocol yet, or were not covered by the deep carbon emission cut. Also not included are carbon taxes imposed by various governments. In the US for instance, the Waxman-Markey cap and trade bill is estimated to bring home about US$5.7 trillion in the US federal coffer from 2012 to 2030, or US$317 billion/year in federal carbon taxes alone. These are plain carbon rent-seeking.

The trend in the current prolonged solar cycle 23 points to an even weaker solar cycles 24 and 25 (others say that we are in solar cycle 24 already), according to some known astrophysicists, geologists and meteorologists. This points to the Earth entering a little ice age period similar to what happened during the Dalton Minimum (two centuries ago) or the even cooler and longer Maundeer Minimum (three centuries ago). When this happens, people in the rich world will soon be praying for more gases that can help warm the planet. When those temperate countries in the north will have snow from November to June and only four to five months of no-snow, I am sure they will be praying for more carbon emission, if CO2 indeed causes global warming.

Among the useful websites to see the Sun-climate link and other hard sciences are: by David Watts by Joe D’Aleo by Marc Morano by Bob Ferguson, Willie Soon and Lord Moncton by Piers Corbyn by David Archibald

There are many other sites actually that discuss the hard science of various external factors that influence the global climate. The above list is just among my favorite sites. Some sites, they just watch the current solar cycle, monitoring sunspots, magnetic field and the ap index. If one will compare the scientific rigor and research of those sites, and compare them with UN IPCC and climate alarmists’ sites, one will easily see the difference of how limited the scope of research of the latter.

Defeat of carbon cap and trade bill in Australian Senate

Yesterday, the Australian Senate voted 42-30 junking the carbon cap and trade bill. It is still reverberating in many countries around the world, especially those that have similar legislative proposals to regulate and reduce the "evil" gas, CO2.

Partly a product of unlikely alliance between the Greens (wanted deeper carbon cuts) and the realists (no cuts). It's like James Hansen of NASA, among the top global warming alarmists today, rejecting the Waxman-Markey cap and trade bill (despite having won in the lower House) because it's not making deep cuts enough.

Sometimes the rabid Greens and alarmists become too irrational that they defy even minor compromise, and worse, they defy hard science. The Sun, cosmic rays, geological changes (like volcanic eruption), the ocean, other natural factors are insignificant for them. Only the "evil" CO2 is significant for them, and the need to regulate it. And that's where Statist greed comes in.

Meanwhile, I hope that the US Senate will reject the W-M cap and trade bill. Obama and the Dems are having a hard time selling their health reform agenda, they got very little time to further scare the public and have it passed in the Senate.

Trivia: one thing i notice, the US legislators think they are encuclopedia readers.
The Waxman-Market bill is almost 1,400 pages long.
The current health care reform bill is 1,000+ pages long.

there should be some logic behind this, something like:
if you can't persuade them with terse and straight logic, confuse them.

Below is one of several news reports.

CANBERRA (Reuters) - Australia's carbon trading laws were defeated in parliament's upper house Senate on Thursday, leaving the government's plan to curb greenhouse-gas emissions in disarray and raising speculation of an early snap election.

Climate Change Minister Penny Wong said the government would submit the package of 11 bills to the Senate a second time before year-end. Thursday's vote was defeated by 42 to 30, meaning the government needs seven more votes to get the plan through.

Dr. Kraisintu in Manila re Affordable medicines

Dr. KRISANA KRAISINTU, Champion of Scientific Crusade for Affordable Medicines in Thailand, Ramon Magsaysay Awardee for 2009, is coming to Manila late this month.

On August 28, Friday morning, Dr. Kraisintu will have an intimate dialogue with leaders of CHAT member-NGOs regarding affordable medicines. Dr. Kraisintu has produced in Thailand generics of HIV retrovirals, even using her own money to bring cheap medicines to the poor.

I will attend her talk. Her initiatives in Thailand are good. Those who have the expertise and capacity to produce more competing products made by multinationals should join the competition. More competition is always good for consumers and patients.

I would even add that local pharmas should aspire to become multinationals themselves someday. Like San Miguel, Jollibee, Figaro, SM, Chowking, etc., previously companies that were just confined to the Philippines, now having plenty of branches abroad.

Thus, I wish that Unilab, Pascual Lab, other Filipino pharma companies will become multinationals someday and start exporting their products to Asia, even in Europe and the US. They don't have to compete with existing multis in all or most products and molecules, just a few products and focus on it in terms of R&D and marketing.

Friday, August 14, 2009

Lacking citizen protection, yet hiking govt fees

Below is one ugly example of how the State and its lower branches, the local government units, are neglecting or abdicating their important function of protecting the citizens' right to life and right to private property. And yet the same government units are hiking the fees for enterprises who are suffering from losses due to neglect of protection of their customers.

Bombings of some civilian targets like buses in the southern part of the country are somehow scattered and isolated. But compared to the overall peace and order situation in the entire country, the figures become high over at the south.

Bombings and killings are clear threats to the citizens' right to life. The State should flex its muscles and resources to stop such killings and show that it can protect innocent civilians. When the bombings and fighting continue, then the State's armed forces -- the military and the police -- are not doing their job well. If they say they lack enough resources, then the State should rechannel its resources like abolishing certain agencies and move the budget to the armed forces, just to stop all those bombers, arsonists and killers.

Now there is another ugly twist. The local governments there are hiking certain fees that further affect the financial condition of the bus companies. For accountability purposes, the local government should have retained if not reduced the fees, allow the bus companies to keep more of their earnings, so they may have to hire more private security guards if necessary, to protec their passengers and the buses in the terminals.

below is the news report.

Southern Mindanao bus firms reeling from extortion, fees

DAVAO CITY — Bus companies in Southern Mindanao are losing revenue due to security threats from extortion groups that have shooed away customer and rising local government fees.

Maryland F. Sy, president of the Southern Mindanao Bus Operators Association that operates 1,200 bus units, said business has slowed down both in the lean and peak seasons.

"The bombings scared off [commuters] from traveling," she said.

Buses in Southern Mindanao, including the Cotabato provinces, have become targets of bombing attributed by authorities to have been perpetuated by the Al Khobar gang, supposedly a breakaway group of Moro separatist rebels and the New People’s Army. The bandits usually torch vehicles after ordering all passengers to disembark.

Based on the industry survey, buses plying the Davao City route have lost about over half in terms of passenger load over the past months. "Before, in a 60-seater bus we have around 45-50 per trip but now we only get 30 passengers," Ms. Sy said.

Although figures were not provided, she noted that the problem has resulted in some bus companies retrenching workers and offering early retirement benefits.

Via H. Lumogda, secretary of the bus association, said operators also have to deal with rising terminal fees — some of which have doubled or tripled — imposed by local government units as well as the annual fee for each franchise at P1,000. — Joel B. Escovilla

Philippine capitalism under Pres. Arroyo

Peter Wallace, an Australian businessman who has been living in the Philippines for more than 30 years now, wrote an article today in Manila Standard entitled "We don't want you", below. Peter is into business consulting, he deals with lots of multinationals doing business in the country. So his perspective is a good barometer of how foreign capitalists view the Philippine's business environment.

Here, he is saying that under the current administration of President Gloria Arroyo, Philippine capitalism is falling more and more into bureaucratic control. The telecomms, petroleum and pharmaceutical industries are clear examples. He wrote,

He also mentioned me and my position on drug price control (which will officially start tomorrow) in this article.

And looking at the current breed of major candidates from big political parties for the Presidential elections just 9 months from now, I think no one is in the mood to assert a more free market capitalism. Not even the candidate from the Liberal Party, supposedly the party that should advance liberal politics and liberal economic agenda. Liberal in its classical definition, not the US definition. Even the aspiring politicians from small political parties and political formations who also aspire to become President, almost everyone seems to be statist and socialist, hiding as nationalist.

That's the peril of people advancing the free market and competitive capitalism. You are set for big disappointments. Unless you have a big and determined heart to pursue the advocacy. It is also very important to have an international network of fellow free marketers because it is very rare to find guys with similar belief with us in our respective countries.

Below is Peter's article.

We don't want you

Wouldn't you think that with somewhere around 45 million people without a half-way decent life and some 6.4 million of them without a half-way decent job, or for another 4.1 million of them without a job at all, plus eight or nine million who?ve fled because they couldn?t get a job here, that the leaders of this country might, just might care? And want to fix the situation by encouraging businessmen to invest and build businesses that would properly employ desperate people?

But no, that?s not what the government is doing. I don?t think I?ve seen a more threatening, less enticing business environment since the crony days of Marcos. In my talks with foreign businessmen, the mood is somber, concerned, disappointed.

The principal problem I see is what I?d call ?surface thinking??seeing something that looks good without thinking through the inevitable repercussions, ramifications of a simplistic decision.

Nonoy Oplas of the Minimal Government Thinkers Inc., had a good point as to ramifications. The Filipino drug companies used to do quite well against the multinationals because they could under cut their prices. Now the multinationals have been forced to sell at costs that could put the local companies out of business.

Do you think a board of directors in New York, London or Paris is going to approve further investment in a country that whimsically (the correct word) forces (also the correct word) companies to halve their prices because it?s a popular decision? The chief executive officer of Pfizer, Jeffrey B. Kindler, already made that publicly clear: they won?t.

Everyone is delighted that drugs are now cheaper but, and here's the key, there were better, much more acceptable ways to do it that wouldn?t have alienated the very people you want to come in and provide jobs for those 18 or 19 million who?d like one. And a well-paying job in decent surroundings, I might add. It?s well known multinational companies that pay well and look after their staff. The correct solution is to just open up the market more to generics that sell at a fraction of the cost, remove the taxes on essential drugs (if the government wants lower prices why should it be the one ADDING TO THEM) and provide free health services by the government to those who can?t afford it....

Wednesday, August 12, 2009

Warming Hysteria: Sunspotless Days, Cooling and Bureaucracy

Since January 1, 2009 up to August 11, 174 out of 223 days or 78 percent of all days have zero sunspot. That’s very significant. Since 1849 or over the past 160 years, the top 5 years with highest sunspotless days were:

1. 1913, 311 days, 85%
2. 1901, 284 days, 78%
3. 1878, 278 days, 76%
4. 2008, 266 days, 73%
5. 1912, 253 days, 69%

Long number of zero sunspot days means (a) less solar magnetic field, less solar wind, (b) more cosmic rays enter the solar system including the Earth, weak solar wind to push them away, (c) more low-lying clouds are formed, lots of sunlight are blocked, and (d) global cooling results. Such cooling has nothing or very little to do with CO2 concentration in the atmosphere.

There are a number of proof for the current global cooling. For instance, July 2009 was the coldest July or 2nd coldest July on record for at least 10 states in the US, see here, “July’s climate: chilly USA, torrid globe”,

Here in the Philippines, cloudy skies have been the norm since almost the start of the year. The summer months of March-April-May were sidestepped by the prolonged “cold front” that started in late 2008 to April this year. The rainy season came 1 ½ month earlier, in mid-April, instead of the usual July. A number of farms planted to “summer crops” like tomato, onions and water melon were destroyed because of such early onset of the rains.

Meanwhile, the UN IPCC is preparing to produce its 5th Assessment Report (AR5) and the UN FCCC is busy conducting various global meetings prior to the big meeting in Copenhagen this coming December for a “post-Kyoto Protocol” agreements to drastically cut global emission of the “evil” gas, carbon dioxide (CO2).

Until the IPCC and many governments later demonized CO2 as an evil gas, this gas is known in the biological sciences as a very useful gas. It’s the gas that we humans exhale, that our pets and farm animals exhale, and it’s the gas that our vegetables, fruits, flowers and trees need when they produce their own food via photosynthesis. It’s actually plant food.

Now the useful gas is pictured as evil that must be drastically reduced globally. Can environmental bureaucrats and politicians do it? Yes, they think they can. That’s why they invented the Kyoto Protocol, the UN FCCC, the various “anti-climate change” bureaucracies in so many governments, both national and local. And because their grand design is plain environmental regulations, they forget or they overlook the Sun, long-term planetary (changing) orbit around the sun, the cosmic rays, the ocean, and other natural causes. For them, only the evil CO2 matters. And they play the global hero by reducing and demonizing this gas and human economic activities that emit this “evil”.

Since more objective scientists (physicists, geologists, meteorologists, etc.) say that the IPCC was lying, and more scientific data – like more sunspotless days – come out to confirm their statement, who’s the real evil now?

Meanwhile, Is Bjorn Lomborg Switching Tack?

There was a news report that was posted by my friend here in Manila, saying that Bjorn Lomborg has "switched" tack on climate change. Mr. Lomborg was quoted as saying, "tackling sources of climate change other than carbon dioxide, such as methane and soot; investing in new tech nologies; adapting to the effects of climate change..."

Personally I have no problem with Bjorn's proposal. Deal with soot, methane, CFC, lead, carbon monoxide, particulates, mercury, etc. Good, we should do that.

Water vapor comprises about 95% of all greenhouse gases (GHGs) in the atmosphere.
Methane, CFC, etc. comprise another 3-4 percent, and CO2 comprises just 1%.

We should have clean air, clean water, clean environment, mainly for their own sake.
Not to "save" the planet because the planet is never in danger.

My beef is when the UN through the IPCC and FCCC, many governments and the big environmentalist groups just focus on CO2, this is wrong. There is a carbon cap and trade system, it was worth $63 billion in 2007, $128 billion in 2008, and that was cap and trade among private corporations alone in the EU and Japan. Not included there are corporations in the US, canada, Australia, China, Brazil, India, Korea, etc. because some or all of them were either not signatory to the Kyoto Protocol yet, or were not covered by the deep carbon emission cut. Also not included are carbon taxes imposed by various governments. This is plain carbon rent-seeking. A non-commodity like the gas that we human exhale suddenly becomes a multi-billion dollar commodity?

As the Earth enters a little ice age period like what happened during the Dalton Minimum (2 centuries ago) or the even cooler and longer Maundeer Minimum (3 centuries ago), the rich world will soon be praying for more gases that can help warm the planet. When those rich countries will have snow from November to June and only 4 to 5 months of no-snow, I am sure they will be praying for more carbon emission, if CO2 indeed causes global warming.

Below is the news report.

Sceptic switches tack
By Fiona Harvey in London
Financial Times
Published: August 7 2009 00:00

Bjorn Lomborg, an influential figure among climate change sceptics, has thrown his weight behind a drive to forge a global deal to halt rising world temperatures at a summit in Copenhagen this year.

“It’s incredibly important. We need a global deal on the climate,” Mr Lomborg told the Financial Times.

The comments – from the author of the 2001 book The Sceptical Environmentalist and a 2007 follow-up saying climate change was less important than other world problems – are likely to be greeted with dismay by climate change sceptics who have seen him as an ally on the public stage...

Mr Lomborg argues, there are cheaper ways of halting temperature rises.

These include tackling sources of climate change other than carbon dioxide, such as methane and soot; investing in new tech nologies; adapting to the effects of climate change; planting more forests; and weighing up whether emissions cuts are cheaper to do now or later....

Monday, August 10, 2009

On Senior Citizens Discount

(Note: The original title of this paper was "Double Price Control")

Senior citizens (60 yrs old and above) and persons with disabilities (PWD, like blind, mute) are entitled to 20 percent discount on medicines. That’s price control #1. Then there is the government-mediated and government-mandated 50 percent price cut on medicines. That’s price control # 2 that will start 5 days from now, August 15.

There have been a number of confusions already on price control #1 alone. Among these are the following:

One, if the senior citizens are buying drugs that are obviously for their grandchildren or for other people, can the drugstore refuse to give the mandatory 20 percent discount? But there are clear penalties if the seniors will report to the Department of Health (DOH) and the police.

Two, if a person comes to a drugstore and makes signs that he/she is mute and deaf and demand the 20 percent mandatory discount, how will the drugstore staff know that he/she is indeed mute-deaf and not just pretending?

Three, most small drugstores just make 5 to 10 percent profit margin because of stiff competition among them, but they are all forced by the government to give 20 percent discount to PWD and senior citizens, how will they recoup the losses?

When price control #2 is added to the above, here’s the result: for certain drugs, a senior citizen or a man/woman on wheelchair can get 20 percent discount on drugs that already have 50 percent forced price reduction!

So pharmaceutical companies and drugstores, big and small, are wondering how to deal with this kind of double price control and still survive. And there are uncontrolled taxes and fees on medicines alone, uncontrolled taxes and fees on entrepreneurship and doing business, the government is not budging to reduce or abolish even one of those various taxes and fees.

Business is business. If businessmen lose money somewhere, they have to recoup it elsewhere; otherwise, they better close shop and move to other industries. So the non-senior, non-disabled persons, rich and poor, men and women, will have to bear higher drug prices.

This morning, I attended the DOH Advisory Council Meeting on Price Regulation. The above issues were among those discussed. Well, the term “double price control” was not used or mentioned there, it’s only a term I coined as I listened to the drugstore owners and managers, including hospital pharmacies, and pharmacists.

The big hospitals were represented there – Makati Med, St. Lukes, Asian Hospital, among others. They say that as much as possible, they do not allow the confined patients to buy drugs outside of the hospital to control the use of (a) cheap but counterfeit drugs, and (b) cheap but sub-standard generics with no bio-equivalence tests. When these drugs are used by the patients, either they do not recover fast, and/or develop new diseases, and some of them sue the hospital and their attending physicians.

So the hospital managers ask, “We usually charge higher for drugs in our pharmacies than the drugstores outside because there are administrative costs to us. A nurse will get the blood pressure for instance and the physician or pharmacist will recommend what dosage to give. Will the new drug price control law allow us to charge additional administrative charges for the medicines we dispense to our patients?” To which DOH officials replied “Yes, a separate charge, but the price of drugs under maximum retail price (MRP) should not exceed the prices as announced.”

As a researcher and policy analyst of the effects of various government intervention in the market, I am intrigued by the unfolding of events, even before the actual price control (the second control) will commence.

I have said it before and I will say it again: politicized pricing through government price control, like mandatory discounts and mandatory price reduction, is among the best formula to mess up the economy. Any intervention will require another set of intervention supposedly to correct the wastes and inefficiencies of the earlier intervention.

Elton John sang it appropriately: “It’s the circle of life, and it moves us all…”

Spontaneous Market 8: Facebook and Liberty

Facebook, Google, Yahoo and other free web and social networking services, are among the best examples of the free market system and individual liberty. Zero tax money, zero government borrowings, and no State bureaucracy to create and sustain them. Like most private enterprises, they exist to give utmost service to the public, free services to the majority in fact, and only those who are convinced there is value for their money, place ads and other revenue-making services to them. The whole arrangement is purely voluntary among the service providers and consumers. No coercion, no mandatory subscription, and other forcible arrangements that characterize government service.

Facebook is the world’s top social networking service. It rose to that height at the expense of other private enterprises in their sector. Like Friendster, Multiply, Tagged, and similar online networking services. But that’s the reality in capitalism and the free market system. All real entrepreneurs understand and appreciate that reality. It allows them to be creative, it forces them to become innovative, and it removes complacency and irresponsibility from their work habit. But there are lazy and shrewd capitalists who do not like that arrangement, so they run to the government to create various barriers to competition and protect them.

Currently, millions of Filipinos are hooked up, some are “addicted”, to Facebook. From gamers to hobbyists to advocates of certain public policies, they use Facebook to post the things that occupy their minds or hands at the moment. The most recent example is the death of former President Cory Aquino.

Most Filipino readers of this article can attest that their Facebook accounts were peppered with postings of personal grief, personal reflections, and hope of unity from the day Cory died to the day she was buried. Or any other stuff that are mostly very personal which they wish to blurt out in public, at least to their friends. For me it’s the most effective, most interactive, and most spontaneous communication and networking among people. Zero external censorship, not even by the owners and administrators of the online service. Only the individual can exercise self-censorship, which among his/her ideas and feeling would he/she share with other people, and which ones to keep.

I wrote two personal notes in my Facebook acount about the Cory funeral, one when her body was transferred from La Salle Greenhills to the Manila Cathedral, and one on her funeral march and motorcade to Manila Memorial Park. Both notes are with pictures, and both attracted a number of comments from my friends, even from some people I do not personally know but stumbled on it. One of them later became my friend.

My other friends in the free market and liberty-oriented groups and institutes both here and abroad, use Facebook to post good quotes from respected intellectuals, mostly from the past. One such friend is Larry Reed, currently the President of the Foundation for Economic Education (, a free market think tank in the US. Here are among the quotes that Larry posted, all of which have attracted plenty of comments from among his friends.

• "The state is the great fiction by which everybody seeks to live at the expense of everybody else." -- Frederic Bastiat, 19th century French economist, statesman and philosopher.

• "The only constructive idea that I can in all conscience advance, then, is that the individual put his trust in himself, not in power; that he seek to better his understanding and lift his values to a higher and still higher level; that he assume responsibility for his behavior and not shift his responsibility to committees, organizations, and above all, to a superpersonal state." -- Frank Chodorov, July 1949.

• "The worst evils which mankind has ever had to endure were inflicted by bad governments. The state can be and has often been in the course of history the main source of mischief and disaster." -- Ludwig von Mises, greatest economist of the 20th Century.

• "The natural effort of every individual to better his own condition ... is so powerful, that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions with which the folly of human laws too often encumbers its operations." -- Adam Smith, The Wealth of Nations, 1776

I made a comment to this posting by Larry. I wrote, “Yes, about 95 percent of all time, laws = prohibitions. More laws, more prohibitions. Rule of law = rule of prohibitions. For rule of law to prosper, there should be very few laws (like laws against killing, stealing). Then humanity will be off to self-driven improvement and growth.” My article last week, “Rule of Law and the Lawless State” is related to this.

Anyone in Facebook can post his/her political and philosophical ideas – libertarian or statist, liberal or conservative, capitalist or socialist – and post good quotes from other authors that summarize those ideas. All of which are expressions of individual liberty.

The big irony though, is that it is those private enterprises like Facebook – receiving zero tax funding and hiring zero government personnel – that allows and encourages those spontaneous expressions of personal opinions and feelings to all people around the world who would bother to read those opinions and feelings. Compare this to government agencies and institutions that live off on tax funding and hire a multitude of personnel and bureaucrats, are engaged in hiding certain public information, and in a number of cases, harrass people and declare external censorship about their ideas and opinions.

And this brings us to one painful realization. Government is force. It is a monster institution of coercion. From taxes that are coercively removed from our pockets and savings account, to bureaucrats and politicians that we were coerced to select and sustain, even if some of us do not believe in the necessity of creating and sustaining the various political offices and agencies that employ and give power to those politicians and bureaucrats.

Why is this so? Read again the quotes from Frederic Bastiat and Ludwig von Mises above.

Meanwhile, a related paper I wrote last month,

Capitalism and Individual Liberty

The profit motive in capitalism in a competitive environment is perhaps the best antidote to global poverty and large-scale personal and governmental irresponsibility.

This is because in an economic environment of level and open competition among private enterprises, individuals and corporations can only make profit if they are able to satisfy certain needs and wants of their customers and clients. If they will not take care of their customers, others will. And their previous customers will make their current competitors become richer and bigger.

In a sense, all other things being equal, the level of profitability of a company is a proxy for its usefulness to society, an indicator of its efficiency and a reward for the hard work of the people working in that company. Looking at the other side, lack of growth if not bankruptcy of a company, is a proxy for its near uselessness in society, an indicator of its wastefulness and inefficiency, and a punishment for the complacency and irresponsibility of the people working in that company. .

Without profit, not a single bus company or airline, shipping line, taxi line, restaurant, barber shop, etc. will survive and continue giving us the services that we need for our daily and long-term existence. Internet giants and big capitalist enterprises Yahoo and Google are themselves driven by profit, they give us free services like free Yahoo Mail and Gmail, free Yahoo Groups and Google Groups, free Google Maps and search engines, and still they become big, rich and successful.

Adam Smith is so correct. It is the pursuit of their own corporate interest, the search for sustained and long-term profit and other civic pursuits which are the “invisible hands" that guide those capitalist firms, big and small, like Yahoo Google and mom-and-pop stores, to provide the various needs of the public, regardless of their nationality, gender, skin color, religious and cultural belief, and geographical location.

Capitalism's hunger for profit can drive capitalists to become greedy. But since our premise is that there is a level playing field and open competition among many enterprises, so other capitalists that may be equally greedy as the incumbent players, will "invade" the market and clients of the previous capitalists by offering better services and/or lower price. The competition among capitalists provides the "invisible hand" that lead to public welfare.

Any private enterprise or non-profit organization can become arrogant and insensitive to the public if it is a monopoly or a member of the oligopoly.

Imagine how arrogant Jollibee staff and how expensive their food products will be if there are no Mcdonalds, Burger King, Mang Donald, Pizza Hut, and other competing capitalist food enterprises, big and small. Imagine how arrogant Toyota people and expensive their cars will be if there are no Honda, Kia, Ford, Hyundai, GM, BMW, Mazda, etc. which are more than willing to provide different car models to different car buyers with different transportation needs and different budget.

Imagine how expensive and arrogant Yahoo will be if there are no Google, AOL, Hotmail, Naver, etc. to provide the public with alternative free online services.

With the "anarchy" of capitalist competition, we consumers benefit. We have the option to use free internet services and live a cosmopolitan life, or to live a hermit life in the mountains, no coercion involved.

Under free market capitalism, consumers do not make any distinction or discrimination between a local and multinational company. Consumers just pursue their own self-interest – finding the best clothing design, the most user-friendly cell phone or laptop, the tastiest pasta or vegetable salad, the most sturdy running shoes, the most durable hand tractor or fishing boat engine, etc., at a particular budget that they can afford. And dozens, if not hundreds, of suppliers from different cities or countries would come to present their products even to the most inquisitive customer who can afford their price.

Instead of demonizing multinationals, we should welcome them. From Coke and Pepsi, McDo and Jollibee, Hyundai and Toyota, Samsung and Nokia, Nike and Fila, Apple and HP, etc. Multinationals expand the range of goods and services that local industries and capitalists cannot sufficiently produce. It's us consumers who effectively dictate what the producers should supply. If local producers cannot supply the things that we need both in quality, marketing and price, multinationals come in. We consumers decide whether we buy from multinationals or not. There is no coercion involved, unlike big State taxation and regulations that thrive mainly on coercion.

Poverty can be eliminated by personal responsibility, ambition and hard work, all other things being equal. A social and economic system that rewards hard work and penalizes laziness is the best antidote to mass poverty. By then, to become poor and remain poor is mainly a matter of personal choice. When a person chooses to just party everyday and work as little as possible, then it is a self-imposed poverty and governments, the UN, the WB, ADB, USAID, and other multilateral or bilateral institutions that dream of “a world without poverty” with full hypocrisy should keep out and shut up.

It is also axiomatic that in a society where individual liberty is fully assured and fully protected by the rule of law, that social inequality will increase and sharpen. Not mainly because “the poor becomes poorer”, but mainly because there is nothing we can do to people who are super-ambitious, super-talented, super-efficient and super-hard worker. If a group of such guys can develop medicines that can kill AIDS virus 100 percent in just one year, the ingredients of their medicines just come from the leaves of the most common trees in a particular continent, then those guys will become super-super-rich. Even if they will bring down the price of their medicines to just 1/5 or 1/10 of the price of the most popular incumbent medicines against AIDS that can only keep the virus at bay but never really kill it.

* See also:
Spontaneous Market 6: Removing Pork Barrel, December 16, 2007
Spontaneous Market 7: Price Control is Price Dictatorship, November 01, 2008

Friday, August 07, 2009

Goodbye Cory, Welcome Gloria jokes

Filipinos I think, are among the most inventive and most creative people in the world in cracking jokes. Even in man-made and natural disasters, some jokes will emerge later. After the burial of Tita Cory, a number of jokes surfaced. Here are some.

1. There was this picture from Manila Bulletin, August 6, 2009, with this caption:

"WITH UTMOST CARE. Military honor guard carefully moves the coffin of President Arroyo out of the Manila Cathedral. (Photo by Tony Pionilla)"

Obviously there was typographical error as the caption was referring to the current President. That picture was scanned and circulated in facebook. Some of the comments:

“If it will happen, no one will join her to the cemetery  Hmmm, maybe Lito Lapid and friends.”

“There will be guys who will join her funeral: Grumpy, Doc, Happy, Bashful, Sleepy, Sneezy, Dopey and Weng-weng. They can all whistle while they carry the coffin.”

Hahaha, that’s Pinoy humor.

Today, I received 2 text jokes:

1. “Ang hirap pumunta sa burol at libing ni TITA CORY. Ang haba ng pila, siksikan, nakakatamad pumunta. Hintayin ko na lang burol ni GLORIA. Tiyak walang pila at di siksikan. Please pass hanggang umabot kay Pandak, baka makonsensya.”

2. Mahirap kalabanin ang Pandak. 1st casualty si FPJ, 2nd Raul Roco, 3rd Tita Cory, 4th____? Ikaw, gusto mo syang kalabanin? Hehehe”

Thursday, August 06, 2009

Goodbye Cory

Three days ago, I wrote this:

When I learned last Saturday morning that former President Cory Aquino died, I felt an immediate tinge of sadness. The woman who replaced the Marcos dictatorship who was in power for 20 years, the soft-spoken, always smiling widow whose husband was killed by the dictatorship, has succumbed to colon cancer.

Almost all radio stations in Metro Manila were discussing about Cory – memories of the people who have worked with her during her term (1986-92), the People Power 1 theme song, some of her pronouncements and speeches, etc. The sadness in my heart became heavier with each passing hour.

Yesterday, Sunday at noontime, I attempted to see her body at La Salle Greenhills. I parked perhaps 300 meters away from the gate, lots of vehicles parked nearby. When I saw the long queue of people outside the gate wanting to come in and see also Cory, I decided to go home.

Today, Cory’s body will be transferred from La Salle Greenhills to Manila Cathedral. The motorcade will pass by Ayala Avenue in Makati. Around 10:30 am, one side of Ayala fronting Tower One was already closed. By 11am, a thick crowd of people were already waiting in Ayala and Buendia. Both lanes of Ayala were already closed to traffic. By 12noon, I think most buildings in Makati commercial district were already deserted as the employees and staff of those buildings have gone out to wait for the funeral motorcade.

Around 1pm, the motorcade passed by Ayala-PBCom area. This time, the crowd was thick on one side of Ayala. Some were clapping, most were just silent, a few were chanting “Cory, Cory!” Sad faces but excited to see Cory's funeral, that's the prevailing mood.

I followed the funeral motorcade from there to Buendia Axa Life building. I would surmise that up to Manila Cathedral, there won’t be a single square meter of road space that won’t have people standing to welcome the motorcade. Tens of thousands of sad Filipinos coming out of their houses and offices just to welcome the funeral march and motorcade.

It’s eerie to see Cory’s coffin. It’s mounted on a long truck, the coffin draped in Philippine flag, is surrounded by so many flowers and 4 guards. I was very sad to see that Cory is now in a coffin. I tried to control some tears falling from my eyes, but I failed.

Cory is like a second mother to tens of millions of Filipinos. Her death sent waves of sadness into millions of hearts and mind, not only in the Philippines but in many parts of the planet. I’m still very sad as I write this. Have other stuff to do, a paper to write for my talk tomorrow morning. Have to put them aside to put these sad feelings into sentences.

As much as possible, I don’t want any politics to mix up with Cory death. But it’s impossible. Cory was a former President, and she remained a strong political figure many years after her term ended.

Thus, I would wish only one thing, that those in the administration now will heed Cory’s wish before she died: do not tamper with the current Constitution for their selfish and devil political desires.

Paalam, Tita Cory. You will be in our hearts and mind forever....

Yesterday, former President Cory Aquino, was finally laid to rest. Beside the tomb of her husband, former Senator Ninoy Aquino.

Ninoy was killed by military assassins under the Marcos government after his plane from the US landed in Manila airport. That was August 21, 1983. Cory, mainly a grieving widow, rose to political prominence two years after that when the scattered political opposition had to give way to her in late 1985 to fight Mr. Marcos in a one-on-one Presidential election (plus elections in the parliament) in January or February 1986.

Cory’s term ended in 1992 but her shadow and influence as a political figure remained tall many years after that. Mainly because while people may disagree with a number of her policies during her term, as well as some of her political leanings after her term, there is little or no way that people can say that she was dirty and corrupt. She has the high moral ascendancy that no succeeding Presidents could surpass or equal.

Cory’s high moral ascendancy stands in straight opposite to the immorality of the current President who is also a woman, the second woman President of the country. That is why when Cory died, there is deep sadness among millions of Filipinos because it seemed that the moral ex-president had to leave while the immoral, incumbent one still continues to wreak political, financial and moral havoc on the 92+ million Filipinos.

Since Cory died last Saturday, August 1, until her burial yesterday, August 5, all local media and the public, were practically glued on her wake and funeral motorcades. Especially the last 3 days: the transfer of her body from La Salle Greenhills to Manila Cathedral last Monday, the public viewing and necrological services last Tuesday, and the mass and the nearly 9 hours funeral march from Manila Cathedral to Manila Memorial Park.

One proof: the other day, August 4, I was one of 3 speakers discussing drug price control in the Philippines which will officially start by August 15. The 2 other speakers were from the multinational pharma and local pharma industry associations, respectively. This subject occupied front page and headline news just several days ago, it is high on the public consciousness and so many people can get very emotional about this. There were a number of local media people there, so many questions raised and explored, and the 3 of us speakers were interviewed later by one of two biggest tv network in the country, GMA 7. Nonetheless, the interviews and the forum was not shown on the station’s evening news program. It was all about Cory. No problem with me and perhaps with the 2 other speakers as I myself was eager to see practically anything about her during the wake and necrological services.

Yesterday, the scene of hundreds of thousands of people, more than a million in my estimate, standing on the roads just to see Cory’s coffin pass by, was really overwhelming and unbelievable. That was despite the dark sky and occasional downpour several times the whole day. Most of them, me included, watched the mass at the Cathedral first, which ended around 11:30am, before going to the streets to wait for the funeral march and motorcade.

I stood and waited near the South Expressway-Buendia flyover. For about 4 hours total. Every passing hour saw the number of people swelling even bigger. It rained several times during those 4 hours that I stood, but people came with umbrellas, jackets, while some simply braved the rain. It seemed that no one went home despite the rains until they saw the truck that carried Cory’s coffin. It’s really overwhelming.

People were supposed to be sad because Cory will be laid to rest finally. But somehow people were happy. It should be the idea that finally, the Filipinos are united once again, first time since the 1986 People Power revolution, and the idea that somehow there should be hope in the country’s current depressing political and economic environment.

I would say that this kind of hope and unity cannot be captured by politics or by any political party or political movement at the moment. There should be something more than politics, more than religious and cultural belief, more than economic advocacies. It is something that I cannot fathom yet at the moment. I can hypothesize one or two potential explanations, but the facts and human incidents are too many to be captured by any economic modeling or political paradigms.

There is one thing though, that practically anyone can safely theorize, not just hypothesize, as it is backed up by unassailable facts: Cory is loved and respected by so many Filipinos, and even by many foreigners. Her life and death was a phenomenon of inspiration, of a deep yearning for morality and honesty in government. And it is something that is sorely lacking in the current Presidency and administration.

Minimal Government-UK

A German friend who used to work for Friedrich Naumann Foundation (FNF) Thailand, Patrick Lohlein, later moved to London to work in a private company, is putting up a new think tank there called "Minimal Government-UK". I kidded him, thanking him for putting up a "branch" of MG Philippines in UK :-). He wrote me a few days ago asking if it's ok with me to use MG, I said 101 percent no problem.

Patrick's vision of MG-UK is "to represent the interests of small businesses, the self-employed and anyone else who is opposed to excessive government intervention in society and economy."

He said that he's getting a lot of support from local businesses and already have plans for several campaigns aimed at media and politicans. But he is still "seeking to network with more economists and other academics, who may be interested to get involved, either in a purely voluntary capacity, or within view to becoming a director of the organisation."

MG-UK will have 3 main areas of concern:

1. Overall size of government sector is far too large and must be cut back to fit what is necessary only.

2. Health and Safety fetishism of the political elite is destroying freedom and individual responsibility and undermining entrepreneurship and employment generation.

3. Much environmental and conservation legislation is unscientific and even counter-productive, and should therefore be repealed.

I am flattered of course, that the name Minimal Government will be used by another think tank in another country. It's actually easy to explain to other people when they ask, "what do you do?" My standard answer is just one sentence: "We are a private, independent think tank advocating minimal or less government."

Good luck, Patrick!

Saturday, August 01, 2009

Rule of Law 5: Lawless State, Corruption and Coercion

Three days ago, I edited the definition of “rule of law” in Wikipedia. I provided the first 3 paragraphs, below –

The rule of law, also called supremacy of law, simply means that the law is above everyone and it applies to everyone. Whether governors or governed, rulers or ruled, no one is above the law, no one is exempted from the law, and no one can grant exemption to the application of the law.

Friedrich Hayek in his book “The Constitution of Liberty” (1961), wrote: “By ‘law’ we mean the general rules that apply equally to everybody… As a true law should not name any particulars, so it should especially not single out any specific persons or group of persons... the rules must apply to those who lay them down and those who apply – that is, to the government as well as the governed – and that nobody has the power to grant exceptions.

There are two important implications for this. One, the laws should be very transparent and clearly worded so that all mature citizens would clearly understand what are strictly prohibited and the penalties associated with violating the laws. And two, the laws and prohibitions should be as few as possible. Both citizens and law enforcers can easily remember them and people can grow in freedom, in an environment of very few restrictions and prohibitions.”

I posted this entry in my facebook Notes, tagged several lawyer friends. Within hours, several comments came in. Those with facebook account can view the comments here,

I am writing below the important comments that I got. I cannot, however, give the names of those who wrote these as I did not have time to ask permission from each of them to use their comments in this article. But what is important are the messages and arguments being made. There were actually more comments, but I will include only 5 of them here –

(a) “Hayek's definition is one acceptable way of understanding the rule of law. However, a fuller discussion should discuss efforts to deal with Legal Realism, i.e. Critical Theories, Postmodern views, Feminist Legal Perspectives and other challenges and accomodations to what appears to be a very liberal principle. The Rule of Law is vague, complex but a useful heuristic to understand the nature of the normative world. Its definition should reflect that.”

(b) “It should be clear enough, right? Until lawyers, politicians (and philosophers) discombobulate things.”

(c) “I believe the very basic need for people to understand the "rule of law" is to instill discipline, respect and selflessness to everyone....especially in the mass base at the local level...”

(d) “There is literature on the equivalence between "Rule of Law" and Due Process. And, of course, it originated with the revolt against kings who were traditionally "above" the law, since they were The Law.”

(e) “What lawmakers don't get is that their readiness to pass new laws, undermines the rule of law in general. The irony of utilising the law for purposes of social engineerng is that it actually detracts from the objective of creating a more moral society. The more laws there are, the more the public is alienated from the law…. the more the law becomes unrepresentative, and the only logical consequence of this is that more people become impelled to evade or break laws, which ultimately erodes respect for the rule of law in general.”

I do not think that the concept of ‘rule of law’ is vague, save for those politicians who use the term as they need it for their political interests, but totally disrespect the laws when no one is watching. Rule of law’s definition is very clear, categorical and explicit: The law rules above men and women, over and above their arbitrary interpretation, administration and implementation of the law. For instance, when the law says “No murder, No stealing”, then no if’s and but’s, whether the murderer or thieve is a King, a President, a priest or a beggar, the law will apply equally to all or any of them.

Hayek wrote about "equal application of the law to unequal people". When people understand and respect the rule of law, there will be peace and order in society as they perfectly know what the prohibited actions are, and the consequences for violating the law. There is very little or no allowance for arbitrary interpretation and application of the law by the judges and law enforcers because those laws are abstract and general, they were designed against no one individual or group, but are designed to apply to all, no exception.

Most laws are prohibitions: laws against pollution, against drunk driving, against smoking in public places, etc. So a tautological definition is: Rule of Law = Rule of Prohibitions.

When there are plenty of prohibitions, then there is less freedom in society. Another implication is that when there are too many laws, it will be impossible for ordinary citizens to remember them, or even fully comprehend those laws that they can remember. Thus they will need lawyers, advisers, and consultants. Lots of talent in society are diverted from actual production to personal and corporate advising on the various laws, including their revisions and amendments.

Contemplating on these things and the President’s State of the Nation Address (SONA) last Monday, I can conclude that the State itself is among the biggest violators of the rule of law.

Before and after the SONA, Metro Manila’s roads saw the anarchy of the State’s police forces and patrol vehicles going against in-coming traffic flow, going even on red lights, making left-turns or U-turns even if such acts are clearly prohibited, parking their cars and motorcycles in areas with clear “No Parking”. The State’s police and patrol vehicles were busy “assisting” the many legislators, Cabinet officials, local government officials, diplomatic officials, and other people and guests who were going to the President’s SONA at the House of Representatives.

It was also very noisy as those police vehicles were saying, “We are the kings and owners of these roads! We do what we want, the loudness of our sirens are directly proportional to our power and lawlessness.”

And to the legislators, Hayek also said something like “not all products of the Legislature can be considered as 'laws' in the sense of abstract and generalized commands that targets no one or any group in particular.” For instance, those laws giving subsidies or entitlements to some groups are not real laws because they are focused on a particular group or sector. They are commands, not laws. Laws should not make any exemption, and no one can grant exemption. If legislators give subsidies to some sectors but not to other sectors, then there is arbitrary granting of favor for some while exempting from such favor other sectors or group of people. They are commands, not laws.

Commands and lawlessness. We hear and see them everyday in our streets and in the various regulations and prohibitions that average citizens are being subjected to.

Meanwhile, I am posting here 3 my earlier articles about Rule of Law.

1. Coercion and Rule of Law

August 14, 2007

Coercion is part of government. The government needs coercion to enforce a "rule of law", like law against killing, stealing, bombing, kidnapping, etc. Laws against the bad guys so that the good guys can work and live peacefully. The coercion in taxation is used to finance the state to enforce a rule of law, protect the citizens against the bad guys and bad actions.

Corollary to "rule of law", it is imperative, I believe, that laws should be as few as possible, and not number in thousands, even tens of thousands, from barangay rules to traffic rules to municipal laws to national laws, even international laws.

The purpose of having as few laws as possible, is to make the enforcement of the "rule of law" effective, to make the coercion effective, and NOT make the "rule of men" effective. Another purpose of having as few laws based on coercion, is to have more space, more leeway, for civil society organizations (like your Rotary Club, Lions Club, Badminton Club, Couples for Christ, etc.) to perform certain social functions that rely on volunteerism, on free will of individuals, and not on the iron will of government.

So, the next logical question is: what is the dividing line between coercion and volunteerism? That is, what functions should be enforced by coercion, and what functions should be expected from volunteerism?Another question is, which coercive power of the state are "legitimate" and which ones are "illegitimate"? The answer will depend on the philosophical point of view that one takes. But one test – "rule of law = no exception", of having rules that apply to everyone, governors and governed – will l determine which laws and state coercion are legitimate and which ones are not.

Coercion and Taxation

Not all forms of taxation is coercion. And coercion is a matter of degree, whether in the personal or political level, and that separates one form of coercion from the other. In short, there are varying degrees of coercion.

A child being forced by his parents to stop watching TV at 7pm and start studying or doing his class homework so he should be in bed by 8pm, can claim "coercion" by his parents.

A husband being obliged by his wife to repair a leaking faucet first before she will agree to have sex with him, can claim that he's being "coerced" by the wife.

A shop owner with several employees being threatened to give them 5 more months of extra bonus, otherwise they will strike or sabotage the office or shop, can claim "coercion" by his workers.

A person being obliged by his church to give tithes + other church expenses, otherwise his church will expel him and condemn him to hell, can claim "coercion" by his church leaders.

A well-off farmer obliged by rebels or bandits to give "revolution tax", otherwise the latter will burn his farm, can claim "coercion" by the said armed men.

A small businessman obliged by the state to surrender 35% of his gross profit, otherwise the internal revenue guys and the police will harass him if not put him to prison, can claim "coercion" by the state.

In all of the above examples, the degree of coercion varies (and the effect is very personal). If we cannot make a distinction on the degree or severity of those coercions, then we can conclude that the parents of that child are as coercive as Zimbabwe's Mr. Mugabe. Or the wife or the workers are as coercive as Venezuela's Mr. Chavez. Which are NOT the case. The coercion imposed by the parents affects only their children; the coercion imposed by the wife affects only her husband; the coercion imposed by the employees affects only the shop owner. Whereas the coercion imposed by dictators on their citizens and taxpayers affect everyone in their countries, from babies to old people to working-age adults.

The state's coercive power is a given, and I accept it, to enforce the "rule of law" like law against killing and stealing, laws against the bad guys so that the good guys can work and live peacefully. Therefore, I accept taxation to support the state to do this important function. What I object is the danger of a seemingly endless acts of coercion, or acts of taxation, by the state, and leaving very little space, very little leeway, for individuals and their civil society groups to do rationale acts of volunteerism and voluntary exchange of goods and services.

For instance, too many taxes (personal income tax, corporate income tax, doc stamp tax, real property tax, vehicle registration tax, travel tax, estate tax, value added tax, import tax, excise tax, business permit tax, terminal tax, sanitation permit fee/tax, building permit fee/tax, ...), purportedly to allow the state to have plenty of money so it can deliver public education, public health care, public housing, public pension, public nutrition, public banking, public transpo, public toilet, public parks, public basketball courts, everything public, can approach socialism.

So the individual is left with little leeway to pursue personal aspirations. Thus, even if those several dozen taxes are "spent wisely", it is still wrong and oppressive because the individual's needs can be very different from the perceived "needs of the people" by the politicians and those in government.

2. Culture of Impunity

September 13, 2007

Early this month, 5 groups -- Makati Business Club (MBC), Management Association of the Philippines (MAP), Financial Executives Institute of the Philippines (FINEX), Foundation for Economic Freedom (FEF), and another group whose name I cannot recall, came up with a strong statement critisizing the government's "national broadband network" (NBN). Their position paper is entitled "A Growing culture of impunity".

The first paragraph for instance, goes like this:
"We are appalled that the culture of impunity among certain government officials appears to have spread to an extent exceeding that of all past administrations. This impunity seems also increasingly evident in many agencies in government."

Rather strong words, right? I congratulate these groups for being brave enough to say those words and observation.

My observation of the current administration is that the "culture of impunity" is already grown up. It has matured, but still growing, nonetheless.

The current President of the country was caught on several accounts of orchestrating a large-scale cheating in the May 2004 Presidential elections. Among the most graphic proof was her regular calls to an elections commissioner, asking for some 1 million of rigged votes for her. She apologized in 2005 and said that she, being the President of the country and a presidential candidate, calling a commissioner of a constitutionally-independent Commission on Elections, has commited a "lapse in judgement". But she made about 15 calls, so it was "15 lapses of judgements".

The public and political opposition that came out when these proof and issues surfaced was so strong, it was time for her to engage in large-scale magic, if not bribery, of people who have the power to impeach her from office -- many members of the House of Representatives. Despite mounting evidence, the impeachment move was killed by Congress on a simple technicality: that the first (and weakest, the least proof cited) of several impeachment resolutions was to be the basis of Congress action whether to hear it or kill it.

In the last May 2007 elections, the culture of impunity, of large-scale cheating, reared its head again. For instance, I have 2 good friends, female friends, who ran for Congresswoman (one in Mindanao, one in Metro Manila), who have wide popular base, but they were with the opposition. The cheating was so vulgar and graphic, you will shake your head when you see how some of their votes were counted -- for their opponents who are administration candidates! My friend who ran for congresswoman in Metro Manila, after being cheated and beaten, learn one important lesson: if you want to win an election in the Philippines, court the voters, yes, but spend most of your money buying and bribing the government election officials!

The current NBN scandal is one of the many faces of a "mature culture of impunity" under the big government regime. Personally, I will not single out the current administration as the single evil administration. Past administrations have their own shares or "culture of impunity". And I have no doubt in my mind that the next administrations will also have their own brand of "culture of impunity". And why so? Because of the "culture of big government". Big government, especially in countries where the rule of law culture is not strong, always has big opportunities for big-time corruption, big-time robbery, and big--time treachery.

3. Endless Scandals of Corruption

OCTOBER 17, 2007

Mr. Antonio C. Abaya wrote an article, "Bribe It Was" (Standard Today, October 16, 2007):

"...Some 190 congressmen and women were summoned to a breakfast meeting in Malacanang with President Gloria Macapagal-Arroyo last Thursday, Oct. 11. At the end of the meeting, envelopes were allegedly given away to the attendees, each one supposedly containing P200,000 to P500,000 in cash., as “send-off gifts” or “a remembrance” or “help”(See the Philippine Daily Inquirer, Oct 12.)

In addition, each attending congressman and woman was allegedly promised pork barrel allocation of up to P70 million.

The cash envelopes were given away apparently without any vouchers to be signed by the recipients, without any indication from which department the (presumably public) money was coming from, without any instructions on how or for what purpose the money was to be used for, and without any indication that the amounts were to be accounted for or liquidated at a certain date.

In other words, each recipient was free to use the cash, partly or fully, for the coming barangay elections or other local community project, or for his or her own personal needs. Which would be a working definition of a bribe....."

Everything correct that Mr Abaya wrote.
From an unresolved NBN scandal and now this...

PGMA is so dirty, I think a liar worse than Marcos and Erap. I question the sincerity to public service of anyone in government still aligned with her, from Senators to Congressmen to Governors and Mayors to Cabinet secretaries.

I have always believed that my former boss, now DOF Sec. Teves, is clean. But the way his boss is blatantly involving herself in so many scandals, and somehow he can't help but be part of the deny-and-lie defenses, I begin to think that his integrity should go down with her now...

See also:
Rule of Law 1: Entrepreneurship and Government Permits, September 16, 2008
Rule of Law 2: Property Rights and Lefts, March 02, 2009
Rule of Law 3: AIG Bonuses, Government Bail-outs, March 18, 2009
Rule of Law 4: On Thailand Crackdown, April 18, 2009