Monday, January 28, 2008

Burn the fields (Part 2)

If you believe the latest results from the Canadian Tobacco Use Monitoring Survey (CTUMS), slightly fewer than 5 million people, representing 19% of the population aged 15 years and older, are smokers. There is no indication if those figures are based on the legal sale of tobacco products or if black market sales would raise those figures significantly. I suspet, however, that smokers buying on the black market have not been included.

The Ontario Ministry of Health and Long-term Care claims provincial tobacco taxes produced $1.452 billion in the 2004-2005 fiscal year. In the next fiscal year, 2005-2006, following yet another increase in sin taxes, provincial tax revenues dropped from $1.452 billion to $1.379 billion, a decline of 73 million dollars. Over the same period, combined federal and provincial tax revenue on tobacco dropped from $7.605 billion to $7.086, a drop of 517 million dollars.

However, says Dr. Atul Kapor, president of Physicians for a Smoke Free Canada, “There is a growing gap between the amount of cigarettes that Canadians say they are smoking and the tobacco tax revenues collected by federal and provincial governments.”

A report from Imperial Tobacco in October 2006 suggests that a quarter of the cigarettes consumed in Quebec and Ontario, are supplied by the black market. Reporters from the Toronto Star confirmed this estimate by using undercover shoppers to demonstrate just how easy it is to get cheap cigarettes in Toronto. Some sources suggest the sale of contraband cigarettes might be as high as 40%. Is anyone surprised?

The RCMP website says: “The sale of illegal tobacco products often benefits criminal organizations. The profits are used to: finance drug trafficking in Canada; purchase illegal weapons; and fund other illicit activities.

They also point out that, “These activities affect the safety and security of our communities and our children. Buying and selling illegal tobacco has other negative consequences for Canadian society, including, eroding respect for the law and federal and provincial governments losing millions in tax revenue.”

According to the Ontario Tobacco Research Unit, "Taxation of tobacco is an effective policy for preventing and reducing cigarette consumption. However, the widespread availability of contraband cigarettes can undermine the effectiveness of this policy, negate the intended health benefits of tobacco taxation and reduce taxation revenues."

The simple truth is that confiscatory taxes and biased regulation do undermine public respect for the law.

Prohibition did not work in the States because a large segment of the population refused to accept the premise that “Big Brother” knew what was best for them. Prohibition, and the law of unintended consequences, contributed significantly to a surge in criminal activity, including smuggling and the illegal manufacture and distribution of alcohol. Those laws were repealed.

Taxation, as a tool for enforcing public policy, can have only a limited effect. There is a point where people will rebel and strike back. They will do so by ignoring attempts to control their behaviour through confiscatory taxes and draconian regulations on a product that is still perfectly legal.

A “smoke free Canada” is a pipe dream. Not everyone will simply quit smoking because of usurious levels of taxation. Many will simply turn to the underground economy with a shrug of the shoulders and a quiet: “Screw’em.” The danger is that this largely justified cheating may well spread to other areas of public morality.

Quote of the Day
Thank heaven, I have given up smoking . . . again! God! I feel fit. Homicidal, but fit. A different man. Irritable, moody, depressed, rude, nervy, perhaps; but the lungs are fine. ~A.P. Herbert

Thursday, January 24, 2008

Burn the tobacco fields?

They claim it’s because they want to protect us, and those around us, from ourselves. Smoking kills, they tell us while they keep raking in the cash; billions of dollars a year in taxes. And, they continue to allow the harvesting of tobacco as well as the manufacture and distribution of tobacco products.

They’ve outlawed smoking in public places, restaurants, bars and private clubs of all manner and description. They’ve banned the advertising of tobacco products in newspapers, magazine and all forms of electronic media. But, they won’t outlaw smoking. They recognize the socio-economic impact of an outright ban. There’s too much money to be made; by growers, by the tobacco industry, by the government.

Physicians for a Smoke Free Canada point out that the big three manufacturers in Canada earn over a billion dollars a year. But the combined tobacco tax revenue for the federal and provincial governments exceeds 7 billion. It’s government which has the most to lose by an outright ban.

They won’t pick a fight with the farmers who earn their livelihood from growing the alleged killer weed. The consumer is an easier target. They’re afraid to do battle with the big corporations who manufacture, package and distribute the deadly toxins. The consumer is without the resources to fight back.

They can’t provide alternatives to the jobs that would be lost. And, they can’t replace the tax revenue generated by the growing, manufacture and sale of tobacco products, especially cigarettes. And, they won’t, ever, convince everyone to quit smoking.

So they take a little money from their sin taxes and hand it over to the anti-smoking lobby to make life miserable for smokers. They pass draconian laws to control when and where people can use what is still a perfectly legal product. They turn honest, hard-working men and women into social pariahs and criminals, just because they choose to smoke.

They proudly proclaim their commitment to the health and safety of the nation. And, all the while, they keep filling government coffers with billions of dollars in taxes.

The anti-smoking fanatics tell them, “The most effective tobacco reduction tool is decreasing the affordability of tobacco through tax policy.” And they, the government, listen; ignoring other available tools to reduce smoking.

Of the over 7 billion dollars collected in taxes on tobacco, governments spend roughly 90 million on other measures to control the addiction; less than 2% of revenue from taxation. Tax revenue, it appears, is their first priority.

I don’t pay their sin taxes. I get my cigarettes from sources currently outside the reach of the government. Yes, it’s illegal. And, no, I don’t feel one bit guilty.


Word of the day
Hypocrite (hyp·o·crite) Noun
a person who professes beliefs and opinions that he or she does not hold in order to conceal his or her real feelings or motives

Tuesday, January 22, 2008

Digital Restrictions Management

DRM (Digital Rights Management) is the catch-all phrase for the encryption that restricts your right to play/use the music and movies which you fork out your hard earned dollars to buy.

It was the encryption tool the music industry claimed was needed to fight piracy. According to the RIAA (Recording Industry Association of America), CD sales have been plummeting. They blamed P2P networks and piracy for their problems. So they used DRM technology to circumvent the fair use provisions of copyright laws and tried to tell the consumer where and how they would be allowed to play their music.

The concept of fair use gives the consumer the right, among other things, to copy for personal use, musical works they buy. DRM interferes with those rights.

For example, music downloaded from I-tunes can only be played on an I-pod. RealAudio can be played only on MP3 players; you aren’t permitted to copy the songs to CD to use on your home or car stereo. Sony uses proprietary OpenMG DRM technology. Music downloaded from this store is only playable on computers running Windows and Sony hardware. Few of these technologies are interchangeable.

But consumers are fighting back, and the major record labels and the RIAA are beginning to see the folly of their ways. Amazon.com and the major record companies are now selling DRM free MP3’s online.

But, their insistence that piracy is the biggest contributing factor to declining CD sales shows they are not prepared to address the many real problems inherent in the product they sell. And, according to some reports the enemy is the record companies themselves, who have been slow in responding to changing consumer demand.

For example, I own several hundred LPs and cassette tapes. I can use my computer and a free software program like Audacity to record that music in MP3 format (or OGG, WMA, etc.). I can even digitally enhance my old mono records to simulate stereo. Why would I want to spend my entertainment dollars on high priced CDs, when I already have thousands of songs and musical selections in my record and tape collection?

I haven’t listened to a radio broadcast since the last big blackout in southern Ontario when I dug out an old crystal radio set to keep up with the news and listen to a few tunes. The reason is simple: I got tired of commercial radio with their limited play lists and constant repetition. And, with few exceptions, the music they play does not suit my musical tastes. Nor do I like the idea of radio stations or big record companies telling me what I should be listening to or buying. So, I listen to internet radio.

There are several sites on the web that allow new singers and songwriters to showcase their talent. I get to hear some great songs by some very talented musicians. I’d rather listen to a good song by an unknown artist than some of the garbage cluttering the air waves just because it was recorded by a “star”. And, because I’m not listening to the radio or CMT hype, I don’t buy the CDs.

Another reason for declining sales of CDs is that there is a limited number of entertainment dollars to be spent by the average consumer. For the price of two CDs a month, with the limited entertainment value they provide, I can pay for a broadband internet connection that provides a much bigger bang for my entertainment buck.

Also contributing to declining CD sales is the growth of “indie” labels that distribute their music over the internet, often for free. They’re not likely to get a lot of air play at any rate, because most radio stations cater to the big record companies and the big names they’re pushing. And, unless they’ve got a major hit, they’re not likely to make any money by signing with a major record label. It’s the record companies that rake in the profits from CD sales, not the artists. They make their money on the road.

The simple truth is that the big record labels have not adapted to the changing demands of the consumer. Maybe they should concentrate on providing a better quality product at a price the consumer is willing to pay, instead of whining and crying about piracy and suing everyone in sight.

The word "rights" in DRM is misleading. The proper term is “Digital Restrictions Management.” And, it’s one of the causes of declining music sales, not the solution.

Sunday, January 13, 2008

It's about the oil . . dammit!

According to a January 3, 2008 article in the on-line edition of the Economist, oil is becoming more and more expensive, but not because the world is running out of oil reserves.

I suspect that most Canadians (or Americans) will not be surprised by this earth shattering little piece of news. Anyone who drives an automobile has likely noticed the impact on their wallet, or at least the contents thereof, every time they tell some gas jockey to “fill’er up”. I don’t believe the rumours that some people are taking out second mortgages on their homes or forcing their wives to stand on street corners just to keep their SUVs on the road. But, the cost of gasoline is definitely going up.

A layman like myself might be misled into believing it was the old economic theory of supply and demand that caused the price of oil to jump to $100.00 per barrel; a five-fold increase since 2002. As the economies of India and China grow and become more heavily industrialized, they place a greater demand on available supplies of the black gold. Not so says the Economist. Increased demand is only a small contributing factor.

Another underlying factor, apparently, is that back in the 1980’s and 1990’s, when the price of oil was very low, the big oil firms stopped investment in research, development and exploration, laying off people and shutting down operations to increase short term profit. And, now that they need increased production capacity they simply don’t have the staff and equipment they need to get the job done.

The Economist notes that “political tension” in the Middle East also creates uncertainty in the market causing oil prices to rise dramatically. Maybe they could talk their buddy, George Bush, into not bombing the shit out of everybody over there. Is it merely a coincidence that the skyrocketing price of oil coincided with Bush’s “pre-emptive strike” against Iraq? That the cost continues to rise while he rattles the saber at Iran?

No, the biggest impediment to stable oil prices, says the Economist, is political. Governments in almost all oil-rich countries, from Ecuador to Kazakhstan, “often deter private investment or exclude it altogether.” According to the Economist, “The world's oil supply would increase markedly if Exxon Mobil and Royal Dutch Shell had freer access to (the oil supplies of) Russia, Venezuela and Iran.” Of course, that would also deplete the worlds oil reserves that much quicker.

Note that they didn’t mention Iraq, with the second largest conventional oil reserves in the world after Saudi Arabia. Or even Saudi Arabia. Is it that both these countries are now firmly under control of the United States? But, they did mention Iran, the next target of America’s military juggernaut, if George Bush has his way; and the location of the third largest reserves of oil in the world.

But, if the Yanks want to secure the world’s oil reserves for American industry, why should we care? Canada is self-sufficient.

We should care because the article in the Economist also points out that the Alberta tar sands hold almost as much oil as Saudi Arabia. And, the tar sands are not included in the known reserves of conventional oil because of the high cost of extracting it. Otherwise, Canada would be ranked number two in the world instead of Iraq.

But, at $100.00 a barrel, the cost of extracting crude from the tar sands is no longer seen as an economic deterrence to exploitation of that resource. That’s a scary thought. Really. If the Yanks decide to invade Alberta, where will all the Newfies and Cape Bretoners find work?

Maybe Canadians should not leave the longest undefended border in the world undefended; at least as long as Mr. Bush is in charge.

Friday, January 11, 2008

Living in a fantasy world

In an earlier post, I noted that a year or so back, a painting by Jackson Pollack sold for 142.7 million dollars in a private sale. I thought the price was outrageous and that anybody who was willing to pay that price was likely some kind of lunatic.

Just for the hell of it, I thought it might be fun to compare the price paid for that painting with a few items of real value; just in case some long lost uncle should buy the biscuit and leave me $140 million or so.

Let’s see. I could buy a new house, like the little place in Toronto pictured above. It’s situated on over an acre of land overlooking the Rosedale Golf Club and features eight bedrooms, 11 baths, a pool, two entryways, and a formal ballroom. And, it’s available for a mere $19.5 million Canadian.

And I guess I should spend a few bucks on a couple of automobiles. I think I’ll pick up a Lamborghini and a Ferrari so that I’ve got something for family and friends to use when they come for an extended visit. And, since neither the wife nor I drive, I should have a Rolls so that the chauffer can get the wife back and forth to No Frills and the Dollar Store. I can get all three for roughly a million bucks.

And, I’ll have to fill the fridge with beer. Samuel Adams/Boston Beer Company’s Utopias is said to be the world’s strongest and most expensive beer and it goes for a mere $100 per bottle. And, since they only produced 8,000 bottles, I could probably get a discount for buying in bulk. The beer is brewed with a blend of high-quality hops and sold in an ornate copper-plated brew kettle. The world’s most expensive beer is non-carbonated and should be served at room temperature.

But, then again, the very thought of warm, non-carbonated beer is a little revolting. But you’ve got to have something to serve the guys when they come over to watch the football game on Sundays. So, I think I’ll just stick with my “Buy Canadian” policy when it comes to the beer. The chauffer can take my new Rolls down to the beer store once a week to keep the fridge full. Unless, of course, my brother Tom comes to visit; in which case, the chauffer will be making once a day visits to the beer store.

And a boat. I’ve always liked the water; I come from the east coast, after all. Maybe a little cabin cruiser will be just the ticket; something that can make the trip from Lake Ontario, down the Seaway and through the Gulf to Cape Breton. There’s a nice little 54 foot rig available for only $4.5 million.

Damn it! I’ve still got over $122 million dollars to spend. This is tougher than I thought. Maybe if the Donald isn’t too busy firing people, he can give me some advice on how to spend that kind of cash.

Now, what the hell did I do with his number?

Thursday, January 3, 2008

Red Dawn

Last week I watched a rerun of a 1984 movie called ‘Red Dawn’. Starring in this “patriotic” little movie were such notables as Patrick Swayze, Charlie Sheen, Lea Thompson, Powers Boothe and Harry Dean Stanton. It was a fairly decent little time waster with a good cast.

The plot line centers on the invasion and occupation of the American mid-west by Cuban and Soviet troops. A small group of teenagers flee to the foothills of the Rockies and take up arms against the occupying forces, to defend their town and their country. This small band of “partisans” ambushes Soviet convoys, conducts raids against their oppressors and generally make life miserable for the foreign invaders.

These insurgents also kill and main a fair share of the enemy. And, it is not just the enemy who suffers from the actions of the “Wolverines” as they call themselves. Their families and friends are targeted by soldiers of the invading army, hoping to stem the tide of the insurrection. Townspeople are detained without reason, and even executed by the invaders.

Some townspeople collaborate with the enemy, in an effort to make their lives a little bit better. These people are depicted as the “bad guys”, willing to sacrifice truth, justice and the American way, to escape the hardship of the occupation. There’s even a scene where the character played by Patrick Swayze executes a captured Russian soldier but can’t bring himself to shoot a childhood friend who the Wolverines find to be a collaborator. So someone else in the group does it for him.

In the United States, the movie is seen as the triumph of the American will to fight off foreign armies who wish to impose a foreign culture and a foreign form of government on the people of the United States.

Unless you’ve been in hibernation or a state of suspended animation for the past five years, you already know where I’m going with this.

About five years ago, the Bush administration twisted and distorted the facts to justify the US invasion of Iraq. They lied about weapons of mass destruction, Iraqi links with al Queda, Iraqi participation in the attacks of 911 and most of the other reasons they gave for invading a sovereign nation.

When their reasons for invasion were shown to be lies, they pointed to the fact that Saddam Hussein and his regime had been toppled and asked, “Aren’t Iraqis better off now than they were under Saddam?” A good many people would be likely to respond in the negative, given the current situation in Iraq.

And, just like the perpetual war in Orwell’s “1984”, the enemy keeps changing. A few years back, the US was supporting Saddam, providing arms and ammunition, including biological weapons, to kill Iranians. Then Bush decided that Iraq needed a “regime change”. The Sunni were the enemy at the start of the war, now they’re being paid $10.00 a day by the US to kill al Queda. The terrorist group Al Queda didn’t exist in Iraq prior to the US invasion.

And, the beat goes on; first the insurgents were Saddam loyalists, then Sunni tribesmen, then Al Queda, then Shia militias and now Iranian sympathizers. Never are the “insurgents” simply Iraqi.

Why is it that Americans did not foresee Iraqi resistance to the invasion and occupation of their homeland? Was it really so hard to accept the fact that some Iraqis might love their country as much as Americans love theirs? Did they honestly believe that Iraqis lacked the courage or will to fight an invading army in defense of their country?

In the movie version of Red Dawn, the insurgents were portrayed as good guys; clean cut American youths, prepared to die for their country. In the Iraqi version of Red Dawn, the insurgents are the bad guys; ungrateful, anti-American fanatics, obstinately objecting to America’s “war of liberation”. Uh-huh.

New word for the day: hyp·o·crite (hip-o-krit) n.
To play a part, pretend
A person who professes beliefs and opinions that he or she does not hold in order to conceal his or her real feelings or motives.