From the Off Wing

Team Canada 2010: Final Picks

2009-12-29T22:41:00.004-05:00

With the roster scheduled to be announced tomorrow at noon, this is my last chnace to post my picks for Canada's hockey team at the 2010 Winter Olympics. Not a lot of changes from what I've said the last two times. See here and here. Marleau has played his way on to the team (it helps that he is part of the league's most potent line, which can be transplanted wholesale to the national team). In contrast, Lecavalier and Carter have played themselves off the team. Note that Jordan Staal is on the team on the strength of his penalty killing. Also, Keith has replaced Phaneuf and Fleury has replaced Price.

--- Rick Nash --- Sidney Crosby - Jarome Iginla
Patrick Marleau - Joe Thornton - Dany Heatley
Jonathon Toews - Ryan Getzlaf - Corey Perry
- Ryan Smyth --- Mike Richards - Shane Doan
------------------ Jordan Staal ----------------

--- Pronger ----- Weber ---
--- Keith -------- Boyle ----
Niedermayer - Bouwmeester
----------- Green -----------

Brodeur
Luongo
Fleury

Introduction to Microeconomics: H1N1 Edition

2009-11-02T13:43:00.004-05:00

Health officials in Ottawa have enacted a policy that will prevent people from waiting in line at H1N1 vaccination clinics on behalf of another. This policy effectively prohibits one of the few ways in which the inefficiency of the rationing system can be diminished.

Normally, market prices ensure that demand equals supply. If there is too much demand for a good or service, then the price will rise until enough potential consumers exit the market to re-establish equilibrium. And vice versa. The market for H1N1 vaccines is a great example of an unbalanced market. Demand for the innoculations far outstrips the ability of health authorities to deliver them. People are routinely lining up for five hours or more to receive the vaccination. A co-worker of mine regaled me this morning with the story of how he and his father-in-law showed up outside a clinic at 3:30am on Saturday; twenty others had beaten them there.

Now, these shots could be priced in such a way that these long waits would disappear. But selling the vaccine at a market price seems distinctly immoral to Canadian sensibilities. Fair enough. It is desirable that all members of our soceity have access to the H1N1 vaccine--should they desire it--with regard to income or ability to pay.

But when a good is rationed, long and undesirable queues are inescapable. And these queues place a disproportionate burden on some segments of society, in the same way that a market price would weigh more heavily on low income individuals. More speciifcally, queueing imposes a larger opportunity cost on those whose time is more valuable, i.e. high earners. A corporate executive or an electrician must give up 5+ hours of productive work just to get the vaccination. That is a huge cost relative to the McDonalds wage earner or the unemployed person.

With the great disparity in opportunity costs between individuals, the new policy makes little sense. Why shouldn't a person who earns $100 an hour (your lawyer or account perhaps) be able to pay somebody $15 an hour to save his place in line? Such a transaction would be beneficial for everbody by vastly decreasing the inefficiency of the vaccination campaign. H1N1 will impose a large enough economic cost without enacting such foolish policies.

We Are the Pirates Who Download Anything

2009-10-21T09:26:00.002-04:00

I wonder if these two G&M stories are connected.

Oct 20: Canada has earned a dubious distinction as a world hub for illegitimate file-sharing websites and a leader in Internet piracy. Canada now hosts five of the most popular pirate sites in the world.

Oct 21: If you've ever tried to access popular video-streaming sites Hulu and BBC iPlayer and music-streaming services such as Spotify and Pandora, you've probably been greeted with an apologetic – yet blunt – message telling you that, sorry, the service isn't available in Canada.

MLB Player Awards 2009

2009-10-05T17:33:00.003-04:00

The MLB regular season is over, so it's time to hand out the individual awards for this past year of big league baseball.

MVP

American League: Joe Mauer, MIN. The consensus pick among baseball writers appears to be Joe Mauer and I can't say I disagree. He will lead the AL in batting, OBP and SLG%, a feat that has not been replicated since George Brett's MVP-winning 1980 season. Consider Mauer's excellent defence at catcher and his team's improbable run without Justin Morneau, and he becomes a heavy favourite.
Runners-Up: Mark Teixeira, NYY; Miguel Cabrera, DET
Pre-season rankings: 1. Justin Morneau, MIN; 2. Miguel Cabrera, DET; 3. Mark Teixeira, NYY.

National League: Albert Pujols, STL. As I predicted in April, Pujols will win his third MVP award in five years. Among other categories, he leads the league in home runs, runs scored, OBP, SLG%, and extra base hits. While his most recent attempt at the triple crown will fall short, Pujols will still rank in the top 3 for RBI and batting average. I could go on but no further evidence is necesssary.
Runners-Up: Hanley Ramirez, FLA; Chase Utley, PHI.
Pre-season rankings: 1. Albert Pujols, STL; 2. David Wright, NYM; 3. Manny Ramirez, LAD.

Cy Young

American League: Zach Greinke, KC. Greinke leads the league in ERA (2.06) and sports an incredible strikeout-to-walk ratio (237 K, 49 BB). Moreover, his solid 16-8 record should not be a drawback when no pitcher reached the 20-win plateau. But the real reason Greinke should win this award is that unlike the other candidtates, he dominated all season. Felix Hernandez didn't heat up until June and Roy Halladay swooned briefly in August. C.C. Sabathia also had less than stellar moments. Greinke, on the other hand, started the season with an incredible 40+ inning run and ended it the same way, with barely a bump in between.
Runners-Up: Felix Hernandez, SEA; Roy Halladay, TOR.
Pre-season rankings: 1. Roy Halladay, TOR; 2. Jon Lester, BOS; 3. C.C. Sabathia, NYY.

National League: Chris Carpenter, STL.The NL Cy Young will probably have the tightest voting of all the individual awards this year. But Carpenter's league-leading ERA (2.24), his 81% winning percentage (17-4 record), and his incredible stretch run give him the edge over team-mate Adam Wainwright (19-8, 2.63 ERA) and strikeout machine Tim Lincecum (15-7, 2.48 ERA).
Runners-Up: Adam Wainwright, STL; Tim Lincecum, SF.
Pre-season rankings: 1. Johan Santana, NYM; 2. Brandon Webb, ARI; 3. Tim Lincecum, SF.

In hindsight, my pre-season projections were undone by injuries to David Wright, Johan Santana, Brandon Webb, and Justin Morneau. Man-Ram's suspension was also costly. On the plus side, I did predict that Greinke would be among the AL leaders in both ERA and Ks, although I didn't expect enough wins for him to seriously contend for the Cy Young.

NHL Regular Season 2009-10: Part II

2009-10-01T17:59:00.007-04:00

Sometimes sports projections are tedious. Like now, when we can pretty much count on a third straight MVP-calibre season from Alexander Ovechkin. And until oldtimes like Brodeur and Lidstrom actually slow down, they will remain strong contenders for end-of-year hardware.

In the MVP category, I forecast Ryan Getzlaf and Rick Nash to take big steps forward and put themselves in the mix alongside the perennial candidates.

Chris Pronger will make his strongest case for the Norris trophy in years. His assignment in Philly will be to shut down the East's top stars, namely guys like Crosby, Ovechkin and Parise. This is a tougher assignment than in the West, where rosters are balanced rather than top-heavy. Look for Duncan Keith to finally be recognized as an elite defenceman, and for Bouwmeester to finally make good on his potential.

Here are my five top choices for the major trophies:

Hart Memorial
1. Alexander Ovechkin, WSH; 2. Sidney Crosby, PIT; 3. Ryan Getzlaf, ANA; 4. Evgeni Malkin, PIT; 5. Rich Nash, CLB.

Art Ross
1. Alexander Ovechkin, WSH; 2. Evgeni Malkin, PIT; 3. Sidney Crosby, PIT; 4. Pavel Datsyuk, DET; 5. Joe Thornton, SJ.

Maurice Richard
1. Alexander Ovechkin, WSH; 2. Ilya Kovalchuk, ATL; 3. Rick Nash, CLB; 4. Dany Heatley, SJ; 5. Marian Gaborik, NYR.

James Norris
1. Chris Pronger, PHI; 2. Duncan Keith, CHI; 3. Jay Bouwmeester, CGY; 4. Nicklas Lidstrom, DET; 5. Zdeno Chara, BOS.

Georges Vezina
1. Roberto Luongo, VCR; 2. Martin Brodeur, NJ; 3. Tim Thomas, BOS; 4. Cam Ward, CAR; 5. Henrik Lundqvist, NYR.

Frank J. Selke
1. Mike Richards, PHI; 2. Mikko Koivu, MIN; 3. Ryan Kesler, VCR; 4. Sami Pahlsson, CLB; 5. Joe Pavelski, SJ.

Jack Adams
1. Brent Sutter, CHI; 2. Andy Murray, STL; 3. Mike Babcock, DET; 4. Bruce Boudreau, WSH; 5. Todd McLellan, SJ.

Calder Memorial
1. John Tavares, NYI; 2. James van Riemsdyk, PHI; 3. Victor Hedman, TB; 4. Viktor Stalberg, TOR; 5. Matt Gilroy, NYR.

NHL Regular Season 2009-10: Part I

2009-10-01T17:46:00.003-04:00

The puck drops tonight so it's time for my pre-season predictions. I have built a sophisticated mathematical model which incorporates thousands of variables including natural skills progression/regression, injury risk, overall team talent, and divisional difficulty. Using a few exogenous assumptions, the model will generate expected performances for every player and team in the league. However, it's more fun if I just use my intuition so the projection reported here are based not on my dynamic model, but on my own hockey sense.

Eastern Conference
1. Washington (President's Trophy)
2. Pittsburgh
3. Boston
4. Philadelphia
5. Carolina
6. New Jersey
7. Montreal
8. New York Rangers
9. Ottawa
10. Florida
11. Toronto
12. Tampa Bay
13. Buffalo
14. Atlanta
15. New York Islanders

Western Conference

1. San Jose
2. Detroit
3. Calgary
4. Chicago
5. Anaheim
6. Vancouver
7. St. Louis
8. Columbus
9. Edmonton
10. Nashville
11. Dallas
12. Los Angeles
13. Minnesota
14. Phoenix
15. Colorado

Stanley Cup Champion: Chicago Blackhawks
Runner-up: Philadelphia Flyers

Individal projections to follow.

Econopinions

2009-09-17T11:19:00.002-04:00

Via Greg Mankiw, a new survey of economist policy views from the American Economic Association.

Back to Basics

2009-08-18T14:39:00.004-04:00

Here's an interesting article about alleviating poverty in Namibia through a negative income tax. Wait, is that something Milton Friedman would advocate?!

The sanitation folks are jolly friendly blokes...but not right now

2009-06-24T11:01:00.003-04:00

When people ask my opinion on unions (or, as happens more frequently, when I give it sans solicitation), I usually use the example of garbage collection to illustrate how unions distort the market. Garbage collection is a job that demands little if any skill. Workers need no talent or brains, just an able body and a capacity to endure the disagreable stench. A single garbageman is easily replaceable and hardly essential to our daily lives. In short, a garbageman's labour should be worth fairly little on the market.

But if all garbagemen band together they can exert upward wage pressure well in excess of their actual value as individual workers. This is the power of collusion, a criminal offense under Canadian law except when practiced by labour unions. The union uses denial of garbage collection services to distort the market outcome for members. They want us to believe that the value of any one individual's services is equal to the value of their collective services. This is false. None of us care if one garbageman holds out for a higher wage, but if they do it as a group then we notice. Toronto is sadly being held captive in this very same situation right now.

If you are a union symphatizer, let me ask you this: would you mind if gasoline stations or grocery stores conspired to keep prices at an elevated level? If yes, that your unconditional support of striking unions is rank hypocrisy. There is no difference between collusion to keep wages above market levels and collusion to keep any other price above market level.

p.s. Ontario residents have another even more detrimental strike action to fear this summer.

Dr. Jekyll and Mr. Harper

2009-06-03T09:54:00.001-04:00

Here's how the Globe & Mail describes the justification for an additional $9.5 billion public investment in bankrupt GM:

"Driven by a desperate fear of losing the bulk of Ontario's auto manufacturing sector, Prime Minister Stephen Harper and Premier Dalton McGuinty have insisted they have little option but to help in the restructurings of GM and Chrysler LLC. Without Canadian government involvement, the U.S. government would insist the companies relocate assembly operations south of the border in order to prevent American taxpayers from subsidizing Canadian jobs, they argue."

But today the paper reports that "Ottawa is set to launch an unprecedented ad campaign aimed at selling Canada to potential corporate investors in places like Japan, Britain, Germany, France, and even the troubled United States."

What kind of policy objective can be met by engaging in these two opposing strategies? Harper's government is distorting the market to keep a defunct and anachronistic automaker afloat, thereby saving a few thousand jobs in vote-rich Ontario. At the same time, it is trying to attract new capital investments from foreign firms. But has it not occurred to them that by giving preferential treatment to the Detroit Three, they are discouraging foreign automakers from setting up shop in Canada or from expanding their operations here?

Suppose we ignore GM and Chrysler's pleas for cash. What would happen? Perhaps some plants will close. Maybe they all will. But if Southern Ontario is really an efficient location to build motor vehicles, than all that idle plant and equipment (not too mention raw labour and human capital) will be an attractive buy for other automakers, e.g. Toyota, Honda, Nissan, Hyundai. Wouldn't it be better to have solvent and dynamic companies producing cars in Canada rather than basketcase companies run by the Obama administration?

The federal government's plan to attract greater foreign direct investment is a sign that they have not abandoned all their economic principles. But the taxpayer-funded stake in GM is a more telling sign that this government's commitment to sound economic policy is tenuous at best.

Optimal Height Tax

2009-05-29T13:37:00.004-04:00

Here's an earlier version of an NBER working paper written by Greg Mankiw and Matthew Weinzierl. The abstract:

Should the income tax system include a tax credit for short taxpayers and a tax surcharge for tall ones? This paper shows that the standard Utilitarian framework for tax policy analysis answers this question in the affirmative. Moreover, based on the empirical distribution of height and wages, the optimal heighttax is substantial: a tall person earning $50,000 should pay about $4,500 more in taxes than a short person earning the same income. This result has two possible interpretations. One interpretation is that individual attributes correlated with wages, such as height, should be considered more widely for determining tax liabilities. Alternatively, if policies such as a tax on height are rejected, then the standard Utilitarian framework must in some way fail to capture our intuitive notions of distributive justice.

Tall people would undoubtebly object to such a possible. But if height is positively related to utility in other ways, then they can at least be comforted knowing that their absolute utility is higher even if marginal utility is equalized. Assuming persons are completely identical in all other ways of course.

Morally Hazardous Politics

2009-05-27T17:15:00.003-04:00

Employment Insurance hasbeen at the forefront of our country's political discourse recently. The Tories are instituting training programs for "long-tenured workers" but have opted against major changes. The opposition parties want a more dramatic overhaul of eligibility requirements. You can read about the details here, here, here and here.

So who is in the right? Should the government make it easier to qualify for EI benefits, as the Liberals and New Democrats want? Or are current eligibility rules sufficient, as the Conservatives claim?

I'm inclined to side with the government on this one. Remember that EI is an insurance program. It is not a social program in the same way that medicare or public education are. The latter programs are available to all regardless of personal circumstances. EI is designed for workers, and its benefits are limited to specific situations.

Like any insurance policy, EI comes with a premium. This is paid by workers and their employers each pay period. Earnings are insured up to a maximum level ($42,300 in 2009) and a rate is applied (1.73% in 2009) until the maximum annual contribution is reached.

Most undergrad economics students will encounter the concept of moral hazard sometime in their studies. Simply put, moral hazard is the adverse impact that insurance can have on the insuree's behaviour. If I can be protected from a the consequences of a risky activity, then my disincentive to engage in that risky activity is lowered. For example, suppose that there are two home security systems to choose from. Suppose also that the more expensive one is the optimal choice. But if I have homeowner's insurance, I might be inclined to purchase the cheaper one.
Insurance companies deal with this type of situation all the time. In the above scenario, the company might charge me a different premium based on the type of security I have at my house. If the premium is set correctly, I will purchase the optimal system.

Of course, there are costs to this type of supervision. The insurance company must weigh the cost of monitoring my behaviour against the potential savings. In the context of EI, the cost of applying different premiums based on measured risk would be obscene. For this reason, there is only one rate.

So how does the government address the conflict of moral hazard? One way it does this is by only paying benefits to workers who are laid off. Otherwise there would be a perverse incentive to get yourself fired. It also addresses moral hazard by adjusting benefits based on observed unemployment rates. If the unemployment rate in my region is low, the likelihood of finding another job is high. So instead of letting me milk off the government teat for an extended period of time, the EI system encourages me to get back into the workforce as soon as possible. On the other hand, if I live in a high unemployment region, it is more difficult to find a new job and the government will be compassionate toward me.

Is this fair? Frankly, no. Everyone pays the same premium, but not everyone is eligible for the same benefits. This aspect of EI is part of the social safety net. It's not "fair" that the rich contribute proportionally more to our collective health care costs either. But I don't hear a lot of complaints from the masses on that one.

My point, I guess, is that there is nothing fundamentally wrong with the way EI is currently set up. Eligibility should be based on the respective probability of finding a new job so equalizing qualification standards across the country would be the wrong policy. I cannot speak to whether the requirements are optimally set or not. That's a job for government economists. But the principle is sound. One change I'd like to see considerd is factoring in expected near-term changes in regional unemployment rates. Then the system could better anticipate the needs of an economic downturn.

Another point: EI is an "automatic stabilizer". These policies help cushion the economy from shocks, both positive and negative. Automatic stabilizers should be designed ex ante so as to adjust correctly to various situations. EI, therefore, should not be tinkered with when times are extreme. If there is a serious problem with it, the fault lies with the original policymakers (the Liberal Party) and not the current government.

On a final note, some commentators (example here) have supreme confidence in the work ethic of mankind and therefore dismiss arguments based on moral hazard. This is foolish. Man is obsessed first with his own survival. When this is assured, his concern turns to how he can reap maximum benefits without exercising more than the minimum effort. In short, when self-preservation is not in question, man is a lazy animal. Don't not be deceived: moral hazard is at play everywhere.

Assorted links

2009-05-15T10:48:00.002-04:00

Seal hunt: Maybe I'm amazed by the way you hate our seal whacking.

Suds Still Strong: It's nice to know that some industries are doing alright.

Gladwell-Simmons II: Ultimate rematch: The concept of inliers is fun and speak to the truth about the importance of timing is in the world of sports. I sometimes wonder if Roger Bannister would have broken 4 minutes if he didn't have such a great rival in John Landy.

Tintin Gay Rumours: Can't say I ever picked up on this while reading Tintin as a kid, but then again the racist overtones of some of the stories also eluded me.

NHL Playoffs: Round 2 Predictions

2009-04-29T19:42:00.002-04:00

First, a recap. I was 7/8 in the first round, missing only the Anaheim upset. Of course, I did say that the Ducks would take it to six games, so I was partly right. Not too shabby overall. Now onto the next round:

Western Conference

2 Detroit vs 8 Anaheim
- The Ducks are definitely better than an eighth seed, but Detroit is not San Jose. Detroit in 6.

3 Vancouver vs 4 Chicago
- Chicago is a great team, but the Canucks' defence is healthy and their goaltender is peaking, two things that could not be said about the Flames. Vancouver in 7.

Eastern Conference

1 Boston vs 6 Carolina
- The 'Canes played well against the Devils, but Boston is a deeper, more talented squad. And Chara will shut down Staal. Boston in 6.

2 Washington vs 4 Pittsburgh
- The match-up that the NHL has yearned for these past four years is here. Two superstars and a seasoned goalie is a better formula than one superstar and a rookie in net. Pittsburgh in 7.

NHL Playoffs: Round 1 Predictions

2009-04-14T20:42:00.004-04:00

My sense is that there will be a couple of tight series in Round 1 but most will be rather unbalanced. Here's my predictions:

Western Conference

1 San Jose vs. 8 Anaheim
- Projects to be one of the best first round series, but the all-round impressive Sharks will prevail. San Jose in 6.

2 Detroit vs. 7 Columbus
- Columbus will simply be over-matched by the star-studded Red Wings. Detroit in 5.

3 Vancouver vs. 6 St. Louis
- How did St. Louis rise to 6th? What a finish. Unfortunately their lack of playoff experience will show against the solid D and excellent goaltending of the Canucks. Vancouver in 5.

4 Chicago vs. 6 Calgary
- Chicago will prove themselves by taking care of the Flames but Iginla and co. will not go quietly. Maybe the most unpredictable match-up. Chicago in 7.

Eastern Conference

1 Boston vs. 8 Montreal
- The storied rivalry will have to wait till next season to resume in force. The deep and hungry Bruins will dominate the hapless Habs. Boston in 5.

2 Washington vs. 7 New York Rangers
- Lundqvist may steal one and Theodore will probably give one away. Washington in 6.

3 New Jersey vs 6 Carolina
- Not a good match-up for the Devils. Parise will find it difficult to lead this team to victory against the streaking Hurricanes. Carolina in 6.

4 Pittsburgh vs 5 Philadelphia
- Has the potential to be the most exciting series with loads of firepower at both ends. But goaltending favours the Penguins, who showed they are a legitimate Stanley Cup threat last post-season. Pittsburgh in 6.

Just to give you a sense of what I am thinking long-term, here is my roster for the office playoff pool.

Sidney Crosby, PIT
Daniel Sedin, VCR
Chris Kunitz, PIT
Bill Guerin, PIT
Ryan Clowe, SJ
Petr Sykora, PIT
Devin Setoguchi, SJ
Jordan Staal, PIT
Alex Burrows, VCR
Ruslan Fedotenko, PIT
Sami Salo, VCR
Tyler Kennedy, PIT

NHL Hardware

2009-04-14T17:02:00.003-04:00

Now that the NHL regular season has ended, here are my picks for the major awards. Playoff predictions to follow soon.

HART MEMORIAL

Winner: Alexander Ovechkin, WAS
What to say? Alexander the Great is the greatest hockey player in the League today and no other player has as large an impact on his team's success. The stats I really like: his 243 hits and 528 shots.
Runners-Up: Pavel Datsyuk, DET; Zach Parise, NJ.

JAMES NORRIS

Winner: Mike Green, WAS
It's been awhile since a defenceman scored 30 goals and that's hard to overlook. He's a force on the power play but also at even strength. And he's not the defensive liability some think he is.
Runners-Up: Zdeno Charo, BOS; Niklas Lidstrom, DET.

VEZINA TROPHY

Winner: Steve Mason, CLB
His 10 shut-outs lead the league despite starting the year in the AHL and a mid-season bout with mono. He wouldn't be the first rookie goaltender to win the Vezina but let's hope he sticks around longer than Jim Carey.
Runners-up: Tim Thomas, BOS; Niklas Backstrom, MIN.

CALDER MEMORIAL

Winner: Steve Mason, CLB
See above for explanation. No rookie skater can match his achievements this year.
Runners-Up: Pekka Rinne, NSH; Bobby Ryan, ANA.

FRANK J. SELKE

Winner: Mike Richards, PHI
This trophy is usually awarded based on reputation and in Richards' case the reputation is warranted. He checks, hits, blocks shots, kills penalties, scores shorties - everything that typically earns Selke consideration.
Runners-Up: Mikko Koivu, MIN; Craig Conry, CGY.

JACK ADAMS

Winner: Joel Quenneville, CHI
Expectations were high for the Blackhawks from the outset. After faltering through the first couple of weeks Quenneville was brought in and he delivered. The young Hawks quietly emerged as one of the League's elite teams. Plus, I don't think Quenneville received the respect he deserved for the job he did in Colorado last season.
Runners-Up: Claude Julien, BOS; Andy Murray, STL.

MLB Predictions 2009: Part II

2009-04-06T10:15:00.003-04:00

Here are my best guesses (1 through 3) for various individual categories including the major awards and a few important statistical categories. Note that I exclude saves because it is a generally stupid statistic.

American League

MVP: 1. Justin Morneau, MIN; 2. Miguel Cabrera; 3. Mark Teixeira, NYY.
Batting: 1. Miguel Cabrera, DET; 1. Robinson Cano, NYY; 3. Derek Jeter, NYY.
Home Runs: 1. Miguel Cabrera, DET; 2. Josh Hamilton, TEX; 3. Mark Teixeira, NYY.
RBI: 1. Mark Teixeira, NYY; 2. Justin Morneau, TEX; 3. Jason Bay, BOS.
Steals: 1. Jacoby Ellsbury, BOS; 2. B.J. Upton, TB; 3. Brian Roberts, BAL.

Cy Young: 1. Roy Halladay, TPR; 2. Jon Lester, BOS; 3. C.C. Sabathia, NYY.
ERA: 1. Roy Halladay, TOR; 2. Jon Lester, BOS; 3. Zach Greinke, KC.
Wins: 1. C.C. Sabathia, NYY; 2. Jon Lester, BOS; 3. Roy Halladay, TOR.
Ks: 1. Felix Hernandez, SEA; 2. Scott Kazmir, TB; 3. Zach Greinke, KC.

Rookie: 1. David Price, TB; 2. Matt Wieters, BAL; 3. Travis Snider, TOR.

National League

MVP: 1. Albert Pujols, STL; 2. David Wright, NYM; 3. Manny Ramirez, LAD.
Batting: 1. Albert Pujols, STL; 2. Manny Ramirez, LAD; 3. Hanley Ramirez, FLA.
Home Runs: 1. Ryan Howard, PHI; 2. Prince Fielder, MIL; 3. Albert Pujols, STL.
RBI: 1. Ryan Howard, PHI; 2. Albert Pujols, STL; 3. David Wright, NYM.
Steals: 1. Jose Reyes, NYM; 2. Hanley Ramirez, FLA; 3. Jimmy Rollins, PHI.

Cy Young: 1. Johan Santana, NYM; 2. Brandon Webb, ARI; 3. Tim Lincecum, SF.
ERA: 1. Tim Lincecum, SF; 2. Johan Santana, NYM; 3. Jake Peavy, SD.
Wins: 1. Johan Santana, NYM; 2. Brandon Webb,ARI; 3. Chad Billingsley, LAD.
Ks: 1. Tim Lincecum, SF; 2. Johan Santana, NYM; 3. Cole Hamels, PHI.

Rookie: 1. Cameron Maybin, FLA; 2. Colby Rasmus, STL; 3. Dexter Fowler, COL.

MLB Predictions 2009

2009-04-04T18:00:00.007-04:00

The major league season opens next week. Here are my predictions for the final standings. The * indicates wild card berth for the post-season. Predictions for various awards and statistical categories will follow later.

American League
EAST
Boston Red Sox
New York Yankees*
Tampa Bay Rays
Toronto Blue Jays
Baltimore Orioles
CENTRAL
Minnesota Twins
Cleveland Indians
Detroit Tigers
Kansas City Royals
Chicago White Sox
WEST
Los Angeles Angels
Oakland Athletics
Texas Rangers
Seattle Mariners

National League
EAST
New York Mets
Philadelphia Phillies*
Atlanta Braves
Florida Marlins
Washington Nationals
CENTRAL
St. Louis Cardinals
Chicago Cubs
Cincinnati Reds
Milwaukee Brewers
Houston Astros
Pittsburgh Pirates
WEST
Los Angeles Dodgers
Arizona Diamondbacks
San Francisco Giants
Colorado Rockies
San Diego Padres

Outside Influence?

2009-03-31T16:06:00.002-04:00

Here is a story that illustrates some of my concerns with NATO. The current secretary-general's term ends this summer and various names have been floated as his successor, among them Peter Mackay and Danish Prime Minister Anders Fogh Rasmussen. But apparently Turkey objects to the Dane's candidacy because he was "unsympathetic" when a Danish newspaper published cartoons of Mohammad in 2006. We all remember the outrage this little incident stirred in the Muslim world. The National Post reports: "(Turkey's) Prime Minister Tayyip Erogan said Muslim countries wanted Turkey to block [Rasmussen's] appointment."

What is truly outrageous is the idea that Turkey is being influenced at all by other Muslim countries. NATO appointments should be made with NATO's best interests in mind, not the feelings of non-member states. There is some merit to the argument that NATO would be better off with a less antagonizing appointment, but this is a decision for NATO to make.

It may seem like an outdated notion, but NATO is a military alliance that binds countries one to another. A member's action that impacts NATO's sphere should therefore be directed first and foremost by the interest of its allies. NATO countries would do well to remember this, whether they are old members (like the U.S.) or new members (like Turkey).

Multiculture Wars

2009-03-31T16:02:00.002-04:00

There was an interesting op-ed piece in today's G&M on immigration and integration. I tend to agree with the author. Multiculturalism as Canadians typically understand and express it is not a cultural phenomenom but a political one. In fact, it is just one of many policies/initiatives that the Liberal Party of Canada has established over the last half-century in an effort to equate Canadian values with Liberal values. This 'program' has generally met with success.

Universal health care is another example. I do not mean that our health care system is not important to or valued by Canadians. Quite the opposite. But the Canada Health Act is not a 'value'. Generosity and compassion are values. The sense that none of us should have to face largely random catastrophic costs alone is a value. Public health insurance, on the other hand, is merely a vehicle through which those values are expressed.

Federal multiculturalism is a lot like the Canada Health Act. It reflects various realties that exist across the country, but it is not of itself a Canadian value. But by imposing a standard, bureaucratic vision of cultural diversity, the official policies have ultimately undermined, diluted and distorted the expression of actual multiculturalism. I don't agree that official multicultarism has been an "indulgence toward immigrants". I think it more likely that this policy has been a hindrance to immigrants, inhibiting their ability to integrate into Canadian society. If it does anything, federal policy ought to focus on strengthening the (civic) national identity.

There goes my hero

2009-02-18T21:43:00.004-05:00

Watch him as he goes. There's goes my hero. He's extraordinary.

The greatest wide receiver in Canadian football history hung up his cleats today. The Blue and Gold were blessed to have his services for fourteen great seasons. I only wish the supporting cast had been up to the task of delivering the championship he sorely deserved. Yours truly is not the only Winnipegger who will harbour eternal love for the Turtleman.

The Baconator

2009-02-17T23:30:00.003-05:00

This man is my hero. Truly bacon is the sustenance of the gods. Although I feel unworthy to join this noble pioneer in his quest for the carnivore's nirvana, I will consume in solidarity with him by eating as much bacon as I can for the rest of the month.

T minus one year

2009-02-13T21:10:00.007-05:00

There is one year remaining until the start of 2010 Winter Olympic Games in Vancouver. This fact was announced amid great fanfare this week. Will the Own the Podium program deliver on its promise to send Canada to the top of the medal standings? We will have to leap-frog Germany and the United States to do, but I don't think it's a complete fantasy. Canada has a great group of winter athletes, especially in speed skating. With an improved alpine team, we should contend for more medals than ever before. And anything less than four medals in curling and hockey would be a bitter disappointment. Speaking of hockey, it won't be long before we start seeing predictions for the men's roster in newspapers across the country. So why don't I get the ball rolling. Here are my picks, in possible line and pairing combinations.

----- Rick Nash ---- Sidney Crosby -- Dany Heatley -
Vincent Lecavalier - Joe Thornton --- Jarome Iginla -
---Simon Gagne --- Ryan Getzlaf --- Martin St. Louis
---Ryan Smyth ---- Mike Richards -- Shane Doan ---
-------------------- Jeff Carter ---------------------

-- Chris Pronger --- Jay Bouwmeester -------------------- Roberto Luongo
Scott Niedermayer ---- Shea Weber ----------------------- Martin Brodeur
-- Dion Phaneuf ------- Dan Boyle ------------------------- Carey Price
------------- Mike Green --------------

The Canadian management will have more difficulty than any other country in picking their team simply because no one comes close to matching our depth. A perfect illustration is the case of Marc Savard who will likely be left off the squad. What other country couldn't find room for a perpetual 90 point scorer?! Savard is one of three possible replacements I see for the team. The others are Jonathon Toews and Brendan Morrow. I would promote Morrow to the team if Smyth were injured or otherwise unable to play. Some may question my selection of Smyth, but how can you not put "Captain Canada" on the team? If ever the team was playing unmotivated hockey, Ryan Smyth is the guy I would tap to get the team rolling.

Let's check how my team has changed since I did this exercise on the blog last year.

On forward we have four changes. IN: Smyth, St. Louis, Carter, Doan. OUT: Spezza, Perry, Toews, Sakic. Note that all four new forwards were on the "Second Team" from last year. Why the changes? For one, Jeff Carter has jumped past both Perry and Toews this season. He is also a solid penalty killer. Spezza has regressed and probably didn't deserve his spot last time. And Burnaby Joe's future is very uncertain at this point. I do regret leaving Toews off the roster. He is a rising star and, more importantly, we ought to have a Manitoba connection like we did in 2012 (Fleury and Belfour). But Toews can still play his way onto this team with an excellent start to next season.

Also, here's Yzerman, quoted in today's National Post: "I guess my feeling is, good players with good hockey sense can play any forward position. In reality, that will happen with one or two centremen, but one thing that's important to keep in mind is that guys who are natural wingers and have played the position their entire careers pick up little nuances of playing wing."

And this: "My idea of a checking line is three guys who are great in both ends of the rink."

Thus, it makes a lot of sense to think guys like Doan, Smyth, and St. Louis (all solid natural wingers) will have a good chance of making the team. How good of a two-way line would Smyth (or Morrow), Mike Richards, and Doan make!

The changes on defence number two. IN: Boyle, Niedermayer. OUT: Redden, Campbell. But note what I said at the time: "One noticeable absence on the blue line is Scott Niedermayer. I question whether he will still be playing in two years. If he is, then I would select him in a heartbeat. He is the world’s second best defenseman (after Niklas Lidstrom of course). The likely deletion is Wade Redden."

Redden would be deleted in any case on account of his poor play these last two seasons. His stock was already plummeting when I selected the team before but, being a long time fan of his, I was loathe to cast him aside. I'm also substituting Boyle for Campbell (much like the Sharks did) because I think he provides an upgrade.

In net, I am now predicting that Price will be the undressed goaltender for the team instead J-S Giguere, regardless of his current struggles.

I am already greatly excited for this tournament. In a NHL playoff format, I think Canada would have a 90% chance of winning gold. With single elimination, the task is that much harder. Run into a hot Henrik Lundqvist or Miika Kiprusoff and you're going home early. Remember when Martin Gerber turned away 50-some shots in Turin to blank Team Canada? Moreover, even Canada cannot match the firepower on Russia's top two lines:

Ovechkin Malkin Semin
Kovalchuk Datsyuk Kovalev

Scary! The talent falls off after that of course for the Ruskies. The Americans, on the other hand, will have a pretty terrible team. Zach Parise and Patrick Kane are good players, but they shouldn't be the highlights yet.

Anyways, we're guaranteed some exciting hockey. To the eventual Team Canada: Bonne chance, les gars!

Flowery Language

2009-01-30T22:28:00.002-05:00

Gay rights groupe, Egale Canada, is raising a stink about Mike Milbury's use of the term "pansification" on Hockey Night in Canada in a discussion about banning fighting. The word, according to the organization, is a "derogatory, stereotypical slur". But, as my brother points out, many people would consider the term offensive to women, not gays. In common use, a "pansy" is a "girly man". The term is not directly associated with homosexuals in today's language. There are plenty of other terms used for that purpose, most of which begin with the letter 'f'. So by making a big stink, isn't Egale Canada merely reminding everyone that the term 'pansy' was originally a gay slur?

Don Cherry has come out (pun intended) against the use of the term and in support of homosexuals in sport. Of course, his reference to the "head of the gays", in typical Cherry eloquence, made me laugh.

Goofus and Gallant

2009-01-27T18:07:00.001-05:00

This bus driver is a hero. This one, on the other hand, is most definitely not a hero. More proof here.

Argle-bargle or fooferah?

2009-01-25T23:14:00.004-05:00

The first three stories on this evening's news were related to labour disputes.

1. York University - Province is drafting back-to-back legislation.
2. OC Transpo - The most recent round of talks has failed between the City of Ottawa and bus operators.
3. Journal de Montreal - Prominent French-language newspaper locks out its employees over various disputes.

We will probably soon be hearing more about the following story which didn't make it onto tonight's program:

4. CAW - Auto Companies Push to Cut Labour Costs

Now, I don't want to get off on a rant here, but this is starting to get ridiculous. But first, full disclosure: I've never been a very union-friendly person. I have been a member of two unions. I was a member of UFCW for three years. But I was a part-time employee and so the union didn't give me much of a thought. And as a university student, I suppose I was of some student union. I don't know what it was called; all I know was that they were focused solely on reducing tuition fees and shaking their fists at Israel, two things I'm not pariculary into. My experience with unions, then, has informed me that unions have a very narrow set of concerns, none of which have to do with the betterment of society.

In economic terms, a union is best understood as a cartel. The suppliers (workers) band together in order to raise their wage above the market price. A union is usually backed by law or social pressures. In fact, it must be; otherwise the cartel would not be able to enforce its program on individual members. For example, a worker who crosses the picket line is a "scab" and faces alientation from the community (and maybe even physical violence). These arrangements, legal and social alike, allow the union to exert an artificial collective strength.

Many people are sympathetic to the labour movement's cause, and thus are willing to accept striking powers as a "right". But we should be clear on something. The process by which a union achieves its goals is no different in structure that the process by which OPEC influence the price of oil (with especially devastating results for the West in the 1970s) or by which MLB owners agreed not to bid on each other's free agents in the 1980s. The word we usually use to refer to this type of activity is collusion. It is a criminal offence in Canada, except of course in the context of labour unions. In that case we call it legal strike action. I find it very odd that our government penalizes corporate collusion so heavily (rightly so!) while actually supporting labour collusion.

Unions are often perceived by the public as the defenders of the downtrodden. Indeed, unions have successfully cast themselves in this image, so-called promoters of social equality. But is this true? Maybe it was during the early stages of the labour movement. But those days are long gone and now unions are simply anachronistic institutions designed solely for the benefit of its members. There is no great social objective at stake. It is not altruism that drives unions in today's Canada. Quite the contrary, unions are motivated by the profit motive just like the corporations they so frequently abuse. Our laws and attitudes towards unions should be changed to reflect the fact that they are no different than the business to which they sell their services.

I think the recent spate of labour disputes is indicative of the union's moral decay. First, York University. Contract faculty, teaching assistants, and research assistants have now been on strike for nearly three months. This strike has cost 50,000 students a year's worth of schooling. And if the strike ends so that the lost semesters can be squeezed into the summer months, that means students will not be able to take summer jobs, an important source of income for many. I sympathize especially with those students who were poised to graduate this spring. Plans for grad school or careers will have to be put off. So what exactly was in the rejected offer? Nothing less than a 10+% wage increase over three years. That's an incredibly rich deal, especially considering the economic climate. The reason why the union is so against the deal is the duration. They want a two-year deal rather than a three-year deal so that the contract ends at the same time as most contracts at Ontario university. CUPE wants to time negotiations so that they have even greater bargaining power.

And let me tell you a little something about TAs. I was a TA at an Ontario university and these were the terms of my deal: $33/hr for 120 hours per semester. I probably only did 30-40 hours of TA-related work per semester, making my hourly wage over $100/hr. In fact, we were told from the outset that it was unlikely anybody would put in more than 60 hours. Being a TA is not just a way for profs to offload some grunt work; it's primarily a way to help fund graduate students. Apparently York's TAs already have one of the best set-ups in the province. The contract faculty have a rough time and I can understand their position (but of course they know all this before the make the career choice). But the TAs at York are displaying nothing but greed. Shame!

In Ottawa, bus drivers have been on strike since mid-December. The Union, which had been without a contract for awhile, planned their strike to coincide with the onset of winter, university exams, the Christmas holiday season, and the World Junior tournament. This is not a coincidence. The wage offer is an increase of 3.5% the first year and then 2% the two following years. But the union is adamant that it will not give up its scheduling rights, something the city wants to reclaim. As it stands right now, the union controls the schedule, a concession they "earned" during the last bus strike. This is very beneficial for the drivers since they can choose their shifts to maximize overtime. The city, understandably, wants to reverse this. Where else do you hear of workers at a large company choosing their exact hours?

The strike has had devastating effects for some people. Everyday in Ottawa one hears stories of people losing their jobs because they have no way of getting to work. Many of the elderly are shut in their homes, their only mode of transportation cut off. Traffic is terrible at rush hours and people walk (or bike!) kilometers every day through snow and cold. Downtown business are feeling the strike especially hard. It is, above all, the most vulnerable members of society that are bearing the burden of this strike.

The Ottawa bus strike and the York strike are similar in that the costs of the action are being borne primarily by the users, not the workers or management. This is not like a strike at, say, Ford. If Ford workers go on strike, consumers merely switch to one of its competitors. But if you're a student at York you have no alternative until the next academic year starts. You've committed yourself to that school. And if you're a user of public transit, where do you turn? You're a little bit better off than the student. You can turn to carpools are walking, but these are very inferior alternatives.

This is one of the greatest injustices perpetuated by unions on the rest of society. Because of the legal and social institutions that grant them massive market power, they are able to make decisions that affect outsiders without accounting for those external impacts. And why would they? Unions have no reason to consider students or bus riders or whoever else may be seriously affected by their actions. They are simply not interested in the common good. Anyone who tells you different is either misguided, delusional, or lying.

The dispute at le Journal is different. It's like my hypothetical strike at Ford. Newspapers readers have others options so although they may prefer le Journal they are not really hard done by. But it is a good example of another major problem with unions. A survey of 1200 Swedish human resource manages indicates that nearly 50 per cent of workers or union reps demand higher wages when they think the firm has the ability to pay. When the company is awash in cash, the union demands a bigger piece of the pie. Fair enough. Wages ought to be related to the value of what is being produced. However, the flip side is that these workers and unions should accept wage cuts when times are bad. But this is extremely rare. Unions are deathly afraid of giving up anything in the way of concessions. Already the CAW is telling the car companies they are unwilling to budge on wages. And at the same time they say they want to help improve cost competitiveness! What a joke. If there is another workers could help reduce costs besides accepting lower wages, they should be doing it anyways. The case is similar at le Journal, management is trying to cope with falling revenues related to changes within the news media sector, especially the rise of the internet. But the union, predictably, resists any changes.

I've always thought it was ironic that the labour movement is associated with the "progressives". Unions are among the least progressive organizations in our society. It is the corporations that are progressive and innovative, each one trying to find an edge over its competitions. Unions simply want to maintain the status quo, relics from another age.

I hope this little sermon has illustrated for you some of the major problems I see with unions. They are anti-competitve, collusive, harmful to outsiders, suppressive and reactionary. I still think unions can have a productive role to play in our economy. But as things stand today, they are not contributing in a positive fashion. We need to change not only the way we regulate labour organizations but also our attitudes toward them.

And away we go...

2009-01-22T21:29:00.005-05:00

The federal government has just leaked the news: $64 billion deficit over the next two years! But, as Andrew Coyne asks, can we really spend our way out of this mess? I am also a stimulus skeptic, to borrow Greg Mankiw's phrase. But in this case, I'm not sure who to blame more: the Harper government for excessive "stimulus" or the Liberal-NDP coalition for pushing them to it? Outrageous!

In other (related?) news, should a person really be responsible for maintaining an ex-spouse's ridiculously extravagant lifestyle? Outrageous!

And here's Nicholas Sarkozy proposing a binding price ceiling on oil going to developing countries. That's a great idea if the objective is to ensure all the oil flows to the advanced countries. But the developed world will be shit of luck. "It is in everyone's interest," said the French President stupidly, "to regulate the prices of raw materials, not just oil, not just gas, but all raw materials." I thought Sarkozy was supposed to be pro-market? But I guess he's just French. Outrageous!

Finally, please read this article. The question that needs to be answered is this: are "sweatshops" a necessary step between poverty and prosperity? Discuss.

Move over, Rover, and let Barry take over

2009-01-20T23:02:00.003-05:00

I usually don't make remarks on U.S. politics in this space. There are enough unqualified commentators out there. Instead, I prefer to limit my comments to the Canadian sphere. But I will make on exception on this, the day of Barack Obama's inauguration.

When Obama first showed up on the scene a few years ago, I wasn't convinced. The fact that Oprah Winfrey was an early supporter probably contributed to my apprehension as I make it a rule to do the opposite of what Oprah recommends. Anyways, I gradually warmed to him and now see him not only as a man with a great image, but also as a man with great substance and potential. In fact, I think Obama could be one of the greatest US Presidents. Here's why:

1. The depth and persistence of the current economic crisis is probably being overestimated. When the economy turns around sooner than the alarmists project, Obama will be a beneficiary.

2. Obama has the permission of the American public to spend ridiculous amounts of money on "stimulus". Wise decisions re: public infrastructure projects and "green" projects may create a positive legacy related to his administration.

3. He will preside over the end of the war in Iraq and will reap the benefits of ending that conflict.

4. He follows least popular President ever, both internally and externally. By comparison, he will look good even when he screws up.

5. He's black. Being the first person of colour to hold the world's most powerful office will give him lasting historical significance.

He does face some significant challenges. For example, implementing the fiscal stimulus package and then getting the deficit under control after the economy recovers. But I think he had the natural leadership capabilities to steer the US through these tough times.

If you weren't able to catch the telecast of the inauguration, the text and videos of Obama's address can be found here. There wasn't a specific phrase in his speech that stuck in my mind (except perhaps the part about putting aside childish things, but that's only because he's quoting Paul). However, the overall tone and message was clear, direct and inspiring. Some comments:

1. Obama did not refrain from (subtly) expressing disappointment in the previous administration. He was also clear about the extent of the challenges that the US faces. I think we can expect the President to continue to be frank and honest in the future.

2. Obama's big message is "change". But there are several types of change. Based on his inaugural address, I would characterize his vision of change not as transformation but as renewal. He is not seeking to break with the past and create a new political paradigm. Rather, I think he seeks to renew and restore American politics, reclaiming values and principles that have been eroded.

3. When talking about religious diversity, Obama mentioned Christians, Muslims, Jews, Hindus, and...non-believers! I think that must be a first. Non-believers are so often excluded from political discourse in the US. But note also that the whole ceremony, including the address, was steeped in Christian language. As mentioned, Obama quoted the New Testament. And the special music composed by John Williams was just a re-arrangement of various hymns.

4. I like this line: "To those leaders around the globe who seek to sow conflict, or blame their society's ills on the West - know that your people will judge you on what you can build, not what you destroy." (emphasis mine) It's significant, I think, that Obama has declared as a defender of 'the West'.

Anyways, like millions of people all over the world, I anticipate greatly the changes that Obama and his administration will effect. He is under a lot of pressure and so many have placed their expectations on his shoulders. Is he up to the challenge? We shall see.

The Trouble With Trillions

2009-01-16T16:30:00.003-05:00

Remember that Simpsons episode with the trillion dollar bill? Zimbabwe was inspired.

Math-tastic or Un-lumber-able?

2009-01-08T14:52:00.006-05:00

A new careers website has released a study in which it ranks 200 occupations based on environment, income, employment outlook, physical demands and stress. According to the study, the top ten are:

1. Mathematician
2. Actuary
3. Statistician
4. Biologist
5. Software Engineer
6. Computer Systems Analyst
7. Historian
8. Sociologist
9. Industrial Designer
10. Accountant

I know what you're asking: Where does Economist rank? Well, maybe you weren't but I'll give you the answer anyway: 11th, marginally out of the top ten. Amongst the worst jobs are Nurse (184), Mail Carrier (189), Garbage Collector (194), Taxi Driver (198) and Lumberjack (200). The complete results are available here.

A brief overview of the rankings reveals a heavy bias towards sedentary, office-type jobs and against jobs requiring any amount of manual labour or exposure to the sun. It seems, then, that the study's authors (who probably work in a sendentary, office-type environment) merely assumed that physical demands are inherently bad and undesirable. There are many people who would disagree with that assumption. Not everyone wants to stare at a computer screen all day and some even prefer fresh air and sunshine (impossible!). For example, people who work in occupations like Auto Mechanic (187) and Butcher (186) probably enjoy the physical element. Even I don't see the sedentary, sun-deprived quality of my job (economist) as a distinct advantage.

The strong performance of math-based jobs compelled me to share these results with a former math professor of mine. I also shared my suspicions about the study's methodology. "How can Sociologist be ranked higher than Economist?" I asked in mock disdain. His response, I think, is quite intuitive.

"I think the lesson to be learned here is: the less people care about what you
do, the happier you are. A sociologist isn't all that different from an
economist. It's just that people care more about what the economist is trying to
model and that puts him under greater stress."

Addendum: Kelly McParland of the National Post also noticed the new study. He likewise notes the methodological bias: "'Bad' jobs are ones in which you actually have to expend physical effort, as opposed to sitting in an office staring at a computer screen." He also gives us his version of the Top Ten Jobs:

1. James Bond
2. Scarlett Johansson's personal masseuse
3. If Scarlett's busy, Penelope Cruz would do
4. Ruler of the Turks and Caicos
5. World's greatest golfer
6. Maybe #5 is unreasonable - How about captain of Tiger Woods' yacht?
7. Text driver at Aston Martin
8. Alexander Ovechkin
9. Warren Buffett, 30 years ago
10. Owner of a small but profitable distillery near the Firth of Forth

Not so good anti-anti-stimulus arguments

2008-12-23T16:40:00.002-05:00

In a recent post on his blog, Paul Krugman takes issue with the anti-stimulus argument that additional government spending is bad because economic theory says that privately allocated spending is more welfare-enhancing, and therefore tax cuts are preferable. Krugman's claim is that stimulus spending is about public goods not private goods. And, he writes, "there's nothing, even in Econ 101, that clearly favors (sic) private spending on private goods over public spending on public goods."

But, I ask, if it is economically desirable to increase expenditures on public goods, doesn't this imply that current expenditures are already below the optimal level? If this is true then what governments ought to be doing is permanently increasing their spending in those areas. Public goods should be provided at the economically efficient level whether we are or not we are in a recession. So Krugman's argument is not so much an argument for a spending-based "stimulus" as it is for a government that fully performs it's public good function.

When it comes to an actual stimulus, the government should be primarily focused on boosting demand where it has actually fallen. So if the current crisis is mostly a shock to consumer demand, then shouldn't the government be chiefly engaged in re-igniting private consumption? Which is a reason why a temporary GST reduction (with a phase-out!) and an EI expansion are the best policies.

The Madoff Economy

2008-12-19T20:10:00.003-05:00

As always, Paul Krugman's insights give you something to think about.

This Week in Economics

2008-12-19T17:26:00.003-05:00

After spewing alarmist rhetoric re: the dire state of the economy in an effort to usurp the crown, the Liberals are now criticizing Stephen Harper for his new-found pessimism. Rather hypocritical, but hey! it's the Liberal Party of Canada. What did you expect?

For his part, Harper seems to have surrendered to his political opponents by reversing his previously restrained stance on fiscal stimulus.

Jim Flaherty is also adopting a more concerned attitude (at least publicly). He has recruited an ad hoc "council of economic advisers" to provide input for the new federal budget. The council's members, chosen without much regard to party allegiance, have an impressive combined collection of business experience and acumen. But of the 11 councilors, only one, Dr. Jack Mintz of the C.D. Howe Institute, is an economist. The business community certainly has a lot to offer, but an economic council ought to have economists. President-elect Barack Obama understands this. He has recruited heavily from the ranks of the academic economists. The most notable appointments are Christina Romer of UC Berkeley as the new chair of the Council of Economic Advisers and Lawernce Summers of Harvard as the new director of the National Economic Council.

How do you solve a problem like grand theft auto?

2008-12-16T15:00:00.002-05:00

Winnipeg is notorious for it's elevated incidence of car theft. But the city has found a new way to alleviate the problem: the exile of car thieves to Saskatchewan, Canada's dumping ground.

The Transit User's Problem

2008-12-15T17:56:00.004-05:00

The New York Times Magazine recently published Year in Ideas 2008. Many interesting ideas were profiled, the more exotic of which include never-ending bubble wrap and spray-on condoms. Amongst the economics ideas, my favourite is the Bus-Wait Formula:

You arrive at the bus stop to catch the ride to work, but the bus isn’t
there. Your destination isn’t very far, so you think, Hmm, maybe I should just
walk. But then you might find yourself halfway between stops when the bus whips
past, which would be deeply annoying. What to do? Should you walk or should you
wait?

This question has plagued commuters for years, but this year three
undergraduate students at Harvard and Cal Tech decided to resolve it. “We were
sick of sitting at a bus stop, not seeing the bus and torturing ourselves over
whether we should start walking,” says Scott Kominers, a Harvard student
studying math, economics and ethnomusicology. So Kominers and his co-authors,
Justin Chen and Robert Sinnott, drew up the problem as a classic game theory
dilemma, began crunching the numbers and, three pages later, had their answer:
You should probably wait — and whatever you do, don’t second-guess
yourself.

Buses, after all, are usually punctual and move much faster than you.
If you start walking and catch the bus halfway through your journey, you might
consider yourself fortunate — but even then you won’t have gotten to your
destination any faster. What’s more, Kominers — like a good economist — points
out that waiting allows you to “optimize” your time, because you could get some
work done while hanging out at the bus stop. There’s also a practical problem
with walking, because people who decide to walk usually pause at each stop to
see if a bus is coming, which drags their journey out. “You think you’re not
slowing down if you stop, but you’re adding a bunch of time each time,” Kominers
adds.

Mind you, their equation breaks down in extreme cases. If your journey is
relatively short — less than a mile — and you suspect the next bus is half an
hour away, they calculate that you should walk. (Though you should walk
decisively, without dallying at each stop along the way.) But since most trips
involve more-punctual buses and longer journeys, waiting is, far more
frequently, the winning strategy. Or as Kominers concludes with some delight,
“Laziness almost always works.”

This is an interesting problem that I have encountered on a practical level many times in my life, especially since I often have short transfers on my transit journeys. Some comments on the methodology:

(a) The authors suggest that the way to optimize your time is by waiting at the bus stop and getting some work done. How might the analysis change if the benefits of exercise are also considered?

(b) The model should also incorporate the likelihood that the next scheduled bus will simply fail to show up. I was a transit user in Winnipeg for several years and know first hand that during periods of intemperate weather (read: deep freeze), the probability of a bus break-down is much higher. Transit users will consider this when taking decisions. Especially since walking is a more efficient method of maintaining body temperature than standing still.

Bubblegum Psych

2008-12-11T18:31:00.003-05:00

Interesting article about the psychological motivation to market crashes.

The Sunny Side of the Bust

2008-12-10T19:01:00.002-05:00

Business cycles in action here, and apparently cyclists are in action too, which benefits your health and the environment. So don't sweat the recession, just sweat it out.

Messrs. Premier, tear down these walls!

2008-12-08T19:36:00.003-05:00

Here's some good news, especially since we can expect more job losses in the coming months.

And if a house be divided against itself...

2008-12-08T19:24:00.004-05:00

Many critics of the Liberal-NDP proposed coalition pointed out that both parties explicitly rejected such an arrangement during the recent election campaign. Now that Parliament has been prorogued and enthusiasm for the coalition has begun to wane, Liberal leadership hopeful Bob Rae has emerged as its champion. I admire Rae's commitment to an alliance which is quickly falling into disfavour among Liberals [Michael Ignatieff, for example, did not refer to the coalition once in today's email to his supporters] as it is an idea to which he has ardently given his support in the past. For example, Rae wrote on his blog this past September: "We need to build a progressive coalition to defeat the Harperites."

However, in the same post Rae scolded the NDP for their self-interested attacks on the Liberals and the Greens. "The point is not to criticize Harper," he wrote. "It is to replace him. And the NDP can't do that, because in the end it will always revert to the Two Themes: class warfare and character assassination."

Bob Rae saves his harshest disapproval for the leader: "Jack Layton thinks he's Obama. What a joke."

One wonders how the Liberal party ever thought it could successfully co-govern with the Dippers when the party's most prominent coalitionist considers "Jack Layton's NDP" to be both inept and delusional. What a joke.

Lakehead's New Motto: "We Play Nice"

2008-12-05T23:41:00.004-05:00

In an effort to surpass its rivals Queen's and Carleton in political correctness, the student union at Lakehead University has passed an amendment to its constitution that enforces a "civil atmosphere" amongst its clubs. The new rules state:

Campaigns must be positive in nature and cannot slander the opposing stance of the campaign
All club publications shall not have content that may be deemed as offensive or in bad taste to any identifiable group
Members of the club are not allowed to impose belief(s) or practice(s) of the club to anyone who does not give them consent to outside of the club’s meetings

Clubs at the university will be allowed to set up booths but are not allowed to approach students. According to the union, this ensures that no one will have beliefs or views "imposed" upon them. The new rule outlaws unsolicited distribution of material, say an advertisement for club-sponsored charity event or lecture. It is not clear whether the student union wishes to extend the freedom from belief imposition to the classroom where, according to my sources, students are routinely subjected to views, beliefs and opinions.

As to the ban on clubs doing or saying anything critical or offensive, the student union retains the authority to decide what is and what is not acceptable.

A Stimulating Summer

2008-12-03T21:35:00.005-05:00

The lack of a "fiscal stimulus" is ostensibly the issue over which the Liberals, NDP, and Bloc have decided to oust the Harper minority and form a coalition government. The Conservatives, the coalition partners claim, did not present a sufficiently bold "fiscal stimulus package" in last week's fiscal update. As such, they failed to protect Canadians from the growing global downturn and the coalition partners have decided to step in and do it for them.

There are many things about this situation on which I could comment. But let's ignore for the moment the fact that the update actually did present some useful measures to lubricate the flow of credit and allowed for further fiscal action in the next budget. And that the true catalyst was probably the removal of party subsidies. Let's also ignore the fact that neither the Liberals nor the NDP, who now wish to rule based on their ability to implement a large-scale fiscal stimulus package in the range of $30 billion, ran on non-stimulating platforms that expressly promised to avoid deficit spending. Let's further ignore the fact that the coalition is as vague about how their $30 billion package will be spent as the Conservatives were about possible future expenditures. Let's also ignore the fact that the economic literature is far from conclusive about the benefits of large fiscal stimulus packages to alleviate short run fluctuations in an economy (like Canada) that has not entered a severe recession. In fact, there are already automatic stabilizers (like employment insurance) at work to provide a "stimulative" effect.

Instead, what I want to point out is this: there may have already been a fiscal stimulus in the Canadian economy. See, the thing about government intervention in business cycles is that the timing is very hard to get right. Frankly any action taken by the Conservatives or the Liberals-NDP will probably not have an impact until near the end of the downturn or when the economy has already begun to recover. It takes time for this type of policy to have the right effect. Ideally, a fiscal package (if needed) would have been implemented long before it was needed.

Indeed, this is exactly what the Conservatives argue, referring to their cut to the GST and their planned cuts to the corporate tax rate. I'm not convinced that either of these policies will have a huge impact. But forgive me a quasi-partisan moment and allow me to make the Conservatives' case for them: their pre-election spending spree may actually act as a stimulus for Canada.

I found this list of spending announcements for the summer of 2008 on the Canadian Taxpayers Federation website. They count over $19 billion of new spending. Not all of the money will be spent in 2009, but many of the items fall into the categories that the coalition now says are possible stimulative expenditures. That is, innovation, infrastructure, skills development, and economic development. Here is a list of some of the bigger items.

Innovation & Research

Asthma/Allergy Research, McMaster 12 mil
SSHRC, NSERC, and CIHR 10 mil
Fuel Efficient Auto Technologies, Ford Motor Company 80 mil
Landing Gear Technology Research, Heroux Devtek Inc. 27 mil

Infrastructure

City of Calgary transportation 34.5mil
Baie de Beauport park 18.3m
Queenston Plaza, Niagara-on-the-Lake 62mil
Canada-BC Municipal Rural Infrastructure Fund 147mil
Winfield-Oyama Highway Project 33.6mil
ontario infrastructure 6.2 billion
Toronto public transit including subway extensions 731.7mil
Champlain Bridge, Montreal 1.0 billion
Ports, Rimouski and Baie Comeau 53.3mil
Infrastructure, Government of Quebec 4.0 billion
Highway Improvement, Government of Quebec 231mil
Highways, Government of British Columbia 163.7mil
Military Base Expansion, CFB Trenton 500mil
Infrastructure, Government of Manitoba 718mil
Highways, Government of New Brunswick 68.75mil

Skills Development

Roadmap for Linguistic Duality in Canada 2008-2013 1.1 billion (not sure what this is exactly)
Retraining, Government of Newfoundland and Labrador 46mil
Job Training, Government of PEI 39mil
Aboriginal Skills and Employment Partnership, various 11.4mil

Economic Development and Support

Various Northen Ontario initiatives 23mil
Bombardier Inc. 350mil
Tobacco Farmers bailout 300mil
Joint Strike Fighter Program, Bristol Aerospace 43.4mil
Ships, Lockheed Martin, Gatineau, QC 2.0 billion
Settlement Services for Immigrants 22.2mil
Ship Building, Nordane Shipping 12mil
Reopening Ford Motor Company factory in Windsor, 80mil

The infrastructure spending is especially impressive. A lot of the money has been given to the provinces for specific projects (Quebec and Ontario in particular!). So to a great extent the provinces have a role in accelerating those projects to provide the stimulus.

The NDP and Liberals joined the CTF at the time in criticizing the Conservatives for their handling of what were previously balanced public finances. There were a ton of items on the list (the CTF's document is 19 pages long) and so there is more than a little validity to accusations that the Conservatives were trying to spend their way to a majority.

But the point of this post is that the Conservatives, in spending an incredible amount of money this past summer, may have inadvertently provided some sort of stimulus package during the high-rolling summer. And the summer was exactly the right time for any necessary fiscal action to take place.

To stimulate or not to stimulate?

2008-12-02T21:29:00.004-05:00

The rhetoric out of the coalition camp makes it seem as though every other major economy is injecting billions of dollars into their economies. Not so. For good or ill, Germany is also showing fiscal restraint during the global downturn.

Of course, it's not exactly true that the Harper government is presiding over a stimulus-free zone. I did a very brief Google search and found a few examples of pre-election spending that would be very much like the stimuli the LPC-NPC will propose (but probably better researched). There are probably more but I don't feel like looking.

$80 million cheque to help Ford reopen a mothballed engine plant in Windsor which had been making V-6 engines and will now begin manufacturing small, fuel-efficient engines
another $80 million to help Ford develop an R&D centre in Windsor as a part of a new policy called the Automotive Innovation Fund
deal that will invest a whoppping $4 billion of federal funds into roads, bridges, and other public infrastructure projects in Quebec

Indeed, federal infrastructure spending is due for a massive increase in 2009. The Conservatives also claim that their planned permanent tax cuts (e.g. corporate rate rollback) are part of the stimulus plan. I don't know whether these expenditures were intended to be part of a "stimulus package". But yes or no, the timing was at least correct.

Hot for teacher? Not exactly.

2008-12-01T19:59:00.005-05:00

Ontario's elementary school teachers have rejected the province's contract offer (which includes a 12.55% raise over the next four years), obstensibly over unequal per-student funding and the gap in preparation times relative to their secondary school counterparts. The elementary school teachers want funding and prep time equalized. The current offer stipulates that elementary teachers receive 240 minutes of prep per week while secondary teachers receive 375 hours. All other teacher unions have approved the contract; the failure of the elementary teacher's union to the same by Sunday's deadline rescinds the offer and replaces it with a new one that involves a raise of just 2% for each of the next two years. This observer wonders whether there is any practical reason other than self-interest to equalize funding and preparation time across levels of education (surely high school sports and band programs are more expensive than elementary music and field day programs!). But my interest is not really in these negotiations. Rather, the story has motivated me to comment on a broader issue in the labour market for teachers.

There seems to be a wide consensus that workers should be paid according to the perceived value that society places on their (combined) output. Teachers, who are responsible for the education of our children, are highly considered workers and therefore viewed as "underpaid". Skilled athletes, whose performances entertain rather than sustain, are frequently viewed as "overpaid". But in a market economy, wages are not determined solely by the willingness of employers to pay. The relevant economic concept is "SUPPLY and demand", not "demand". If the market functions properly, wages adjust so that the supply of labour is equal to the demand for labour.

Why am I bringing this up? To point out that current compensation of teachers, driven by the unionized bargaining process, has generated a surplus of qualified teachers. The Ontario College of Teachers most recent Transition to Teaching report states that "by 2006 the excess of new teachers beyond retirement needs had reached 7,000 annually". The story is similar in other provinces. It is now common for newly licensed teachers to wait several years before finding regular, full-time work. Most people in their mid-20s know several education grads who have struggled to find a permanent position.

This surplus of teachers is not spread evenly across various subgroups. French-language and math/science/technology teachers tend to fare better in their search for work relative to English-language primary/humanities teachers. For example, only 1/3 of the English-language Primary-Junior teachers in Ontario's class of 2005 had found regular work two years after graduation whereas 3/4 of French-language teachers from the same class had been hired into permanent positions. [The fact that the market for elementary teachers is more over-supplied than that for secondary teachers makes their union's demands all the more untenable]

There are two ways to fix this chronic over-supply of teachers.

(a) Restrict the number of teaching licenses that are awarded. This could be done in several ways. For example, a simple cut to the number available spots. That is, limit the number of openings in teachers' colleges. Not only would this decrease the surplus but it may also act as a signal to prospective education students, causing less enthusiastic applicants to look elsewhere. But this may not be ideal as it would involve additional evaluation costs and/or unfair rationing. There could instead be new measures to emphasize the needs that exist, i.e. science and technology, in the application process. Another possibility would be to increase tuition in teacher's college (especially for the most over-supplied groups). A sufficient increase in fees will divert students away from education.

(b) Allow wages and benefits to adjust downward. The fact is that the high levels of compensation given to teachers have drawn an excessive amount of labour into the market. Were the free market allowed to operate, wages would decline leading some potential teachers to exit the market. As wages fall schools will also be more inclined to hire more teachers. The process ends when equilibrium is restored.

Option (b) is the preferred market-based solution to our problem. The end result would be higher employment, smaller salaries, and fewer struggling entrants. Is that better than the current situation? Presently-employed teachers and their union would say no because they would be net losers. But those on the outside looking in would definitely gain. And everybody (public included) would benefit from lower student-teacher ratios. But, as mentioned, the labour market for teachers is unionized, and so option (b) is unlikely to occur. The provincial government, then, needs to find a way to ensure that fewer students enter education programs. The incentive structure is flawed and the surplus will only grow as the fertility rate declines. If nothing is done, this flagrant misallocation of resources will continue unabated.

Of course, the Ontario government may not agree that the surplus of qualified teachers is a problem.

UPDATE: The Province of Ontario has extended the deadline for the Elementary Teachers' Federation to sign the contract offer until Friday.

Misc. Thoughts

2008-12-01T19:46:00.004-05:00

It's been a while before I posted anything here. Before I start doing so again, here are some thoughts on some issues from the past few months. I'm sure I had a lot more opinions to share with you my beloved audience but these are the ones I remember, in chronological order.

Olympics: When it comes to sports, we are a country of drama queens. We bemoan the lacklustre efforts of our athletes when no medals are forthcoming and demand increased funding. Demands which, invariably, will be forgotten only weeks later. Nobody cares about our swimmers and rowers between Olympics. Of course, the disappoinment of the first week is forgotten once we start winning medals in the events where we are actually expected to perform well.

EU-Canada FTA: Great announcement from Foreign Affairs. Liberalizing trade with the EU is a great thing for Canada. The Canadian goverment has started a trend of signing bilateral free trade agreeements (Chile, Israel, Peru). Let's hope it continues. The Doha Round has demonstrated the futility of multi-lateral agreements.

Election 2008: What a boring election campaign. I can't believe a few hundred million dollars of arts funding is the most exciting issue. Have the Conservatives said anything about their platform?

Financial Crisis: Where do these people get off predicting a downturn on the magnitude of the Great Depression? Even if they are eventually proven correct (which I doubt very much) we are far from the point where the term 'depression' applies. The alarmists on the Left especially are having a field day with this. Eric Hobsbawm, for one, is calling this a dramatic shift away from the capitalist paradigm. Surely one of the 20th century's most celebrated historians should know that his craft is best practiced in retrospect.

Queen's/Carleton: I was ashamed of my personal connection to Queen's for a few days after the introduction of the Stasi as official campus police (I wonder if the squads will be as relentless in stamping out careless blasphemies - somehow I think not). That is until everyone's attention was drawn to Carleton and their racist/sexist student union. I suspect the majority of student unions have similar tendencies but at least most of them have the decency to keep it under wraps. I just hope that the recent ridiculousness will deflate the sails of the political correction movement a little. And maybe the public outrage will even spillover against those funny human rights commissions. One can always hope.

Round 2

2008-04-24T19:48:00.004-04:00

First, review my first round predictions:

Montreal over Boston in 5 games (Actual: Mtl in 7)
Pittsburgh over Ottawa in 5 games (Actual: Pit in 4)
Washington over Philadelphia in 6 games (Actual: Phi in 7)
New York Rangers over New Jersey in 6 games (Actual: NYR in 5)

Detroit over Nashville in 4 games (Actual: Det in 6)
San Jose over Calgary in 6 games (Actual: SJ in 7)
Minnesota over Colorado in 5 games (Actual: Col in 6)
Dallas over Anaheim in 7 games (Actual: Dal in 6)

Not too bad. 3/4 in each conference, missing the 3-6 game in both. Props to me on calling Dallas over Anaheim.

On to Round 2:

Montreal over Philadelphia in 7 games
Pittsburgh over New York Rangers in 6 games

Detroit over Colorado in 6 games
Dallas over San Jose in 6 games

NHL Awards and Post-season Picks

2008-04-08T00:20:00.002-04:00

Yesterday, I compared the final standings to my pre-season predictions. I also predict the winners of the individual awards. I will not reveal those picks until after the hardware has been given out. However, now that the season is over, allow me to award the trophies to who I feel deserves them.

Hart Memorial Trophy

WINNER: Alexander Ovechkin, Washington (65-47-112)
This is a no-brainer in my mind. Alexander the Great almost single-handedly pulled his team into the playoffs.

RUNNERS UP: Jarome Iginla, Calgary (50-48-98) and Joe Thornton, San Jose (29-67-96)
With Pavel Datsyuk, these two players led the West in scoring, a more impressive feat than leading the East. Both players were easily the most important contributor to their team’s success this season.

James Norris Trophy

WINNER: Niklas Lidstrom, Detroit (10-60-70, +40)
No other defenceman in hockey creates more goals for or prevents more goals against than Lidstrom. Also a no-brainer. This may not be his last Norris either.

RUNNERS UP: Brian Campbell, Buffalo (8-54-62, +8) and Zdeno Chara, Boston (17-34-51, +14)
Campbell is one of the game’s slickest puck carrying defencemen today. And Chara did just about everything on the blueline for the Bruins this season. An honourable mention goes to Sergei Zubov who was challenging Lidstrom until his season-ending injury.

Vezina Trophy

WINNER: Martin Brodeur, New Jersey (2.17, .919, 44 W, 4 SO)
It doesn’t matter that New Jersey keeps losing its best skaters to retirement and free agency; Brodeur continues to carry the team to the playoffs each year. He’ll add another Vezina to his trophy case this June to show for it.

RUNNERS UP: Evgeni Nabokov, San Jose (2.14, .910, 46W, 6 SO) and Henrik Lundqvist, New York Rangers (2.24, .912, 37 W, 10 SO)
Both of these goaltenders kept their teams in contention while those who were supposed to be goal scorers tried to remember how to put the puck in the net.

Calder Memorial

WINNER: Patrick Kane, Chicago Blackhawks (21-51-72)
Despite a mid-season slump, Kane scored at almost a point-a-game pace. It wasn’t a perfect season, but it was the best rookie season.

RUNNER’S UP: Jonathon Toews, Chicago Blackhawks (24-30-54) and Tobias Enstrom, Atlanta (5-33-38)
Toews is the best player of this class of rookies. Injuries prevented him from claiming the Calder. A lone bright spot in Atlanta this year was the play of Enstrom, who became the de facto number one defenceman by playing four minutes a game more than any other blueliner.

Jack Adams

WINNER: Guy Carbonneau, Montreal (104 pts, 1^st in East)
Many commentators expected the Canadiens to finish out of the playoffs. By extracting honest efforts from his entire roster, Carbonneau took this team to the top of the East.

RUNNERS UP: Mike Babcock, Detroit (115 pts, 1^st in West) and Joel Quenneville, Colorado (95 pts, 6^th in West)
The Red Wings, hockey’s best run club, turned in another dominating season. Their long time rivals, the Avalanch, gave a surprisingly solid effort all season despite lengthy injuries to Sakic, Stastny, and Smyth.

I will ignore the Selke and Lady Byng trophy because the voting rationale for those awards often escapes me.

And now my picks for the first round:

Montreal over Boston in 5 games
Pittsburgh over Ottawa in 5 games
Washington over Philadelphia in 6 games
New York Rangers over New Jersey in 6 games

Detroit over Nashville in 4 games
San Jose over Calgary in 6 games
Minnesota over Colorado in 5 games
Dallas over Anaheim in 7 games

Pre-season Predictions in Review

2008-04-06T23:51:00.002-04:00

Like I did recently with the upcoming MLB season, I drew up a list of predictions for the 2007-08 NHL season way back in September. Let’s see how I did. I’ll list the final standings as I predicted and report the actual position in brackets. Starting with the Eastern Conference:

1. Ottawa Senators (7)
2. New York Rangers (5)
3. Carolina Hurricanes (9)
4. Pittsburgh Penguins (2)
5. Buffalo Sabres (10)
6. New Jersey Devils (4)
7. Montreal Canadiens (1)
8. Florida Panthers (11)
9. Philadelphia Flyers (6)
10. Washington Capitals (3)
11. Toronto Maple Leafs (12)
12. Boston Bruins (8)
13. Atlanta Thrashers (14)
14. New York Islanders (13)
15. Tampa Bay Lightning (15)

Not terribly great here. Ottawa looked like they might achieve my first place prediction after their ridiculous run in October and November. But they were one of the worst teams in the league after that. Montreal, on the other hand, greatly surpassed my expectations. But many people had them out of the playoffs altogether. And to my surprise, Boston overachieved even more than in 2006-07. To my credit, however, the Carolina and Washington picks would have been almost bang on if Carolina had won its last game. Instead we have a big swing because of the rule that makes the three division winners the 1^st, 2^nd, and 3^rd seeds. And I correctly picked the bottom three teams, two of which were playoff teams a year ago. The other is still only three years away from being Stanley Cup champions. How many others picked the Lighting to finish in last place?

Now to the West:

1. Anaheim Mighty Ducks (4)
2. Detroit Red Wings (1)
3. Calgary Flames (7)
4. San Jose Sharks (2)
5. Vancouver Canucks (11)
6. Nashville Predators (8)
7. Minnesota Wild (3)
8. Colorado Avalanche (6)
9. Dallas Stars (5)
10. Edmonton Oilers (9)
11. Chicago Blackhawks (10)
12. Saint Louis Blues (14)
13. Columbus Blue Jackets (13)
14. Phoenix Coyotes (12)
15. Los Angeles Kings (15)

Again, I nailed the bottom of the standings. But that is not very impressive. So far I’ve only correctly picked one divisional leader: the Detroit Red Wings, the only no-brainer of the bunch. Only the plus side, I correctly picked 7 of the 8 playoff teams in the West. Perhaps my coup in the West was picking Edmonton to finish in 10^th. They actually finished 9^th. Most commentators had written the Oilers off from the start.

In my hypothetical playoff bracket, I have Pittsburgh and Ottawa in the East and San Jose and Minnesota in the West. Obviously that won’t happen now. In fact, there’s a good chance the Pens will sweep the Sens in the first round. But the other three teams have a chance to be there. I had some success in this area last year. At the outset of the 2006-07 playoffs, I had Buffalo beating Ottawa in the East final (it was the reverse), and Anaheim beating Calgary in the West (only Anaheim was there). Then I called Anaheim to win the Cup against the East champion (Buffalo, reality: Ottawa). Maybe I’ll be lucky again this year.

Rios and Hill Signings

2008-04-05T00:49:00.001-04:00

The Toronto Blue Jays announced on Friday that they had signed Alex Rios and Aaron Hill, two valuable contributors, to long term contract extensions. Both players, while already solid major leaguers, have yet to hit their primes. The new contracts should ensure that when they do, they will be wearing a Blue Jays uniform.

Rios signed a six year extension that covers the 2009 to 2014 seasons and pays him $64 million. This works out to roughly $10.7 per year. Note that Rios still has two arbitration years left. There is then a $13.5 million dollar club option for the 2015 season.

Hill’s contract is a little more complicated. He earns $11.6 million over the next three seasons (2009-2011). This covers his arbitration eligibility years. Then, just as he would normally enter the free agent market for the first time, the Blue Jays can pick up a three year, $26 million option. If they decide against the three year option, they can instead elect to exercise a one year option worth $8 million or a two year option worth $16 million. Thus, the contract pays Hill almost $4 million per year over his arbitration eligibility period and potentially some $8 million once he hits free agency.

I like both of these signings. J.P. Ricciardi has locked up two important players for several years at a very reasonable price. In my last year of undergraduate study, I estimated a wage equation for MLB free agents for my senior econometrics paper. According to my results, and based on their performances to this point in their careers, Hill could expect to earn $8.4 million as a free agent and Rios could demand $13.1 million. Of course, my predicted salaries are not exact and the real market values may be higher or lower. But if we make two reasonable assumptions, (1) Both Rios and Hill will continue to improve, and (2) baseball salaries will continue to climb, it seems very likely that the contracts signed today will pay these players less than market value once they achieve free agency eligibility in a couple of years.

An American in touch with his Canadian side

2008-04-04T16:15:00.006-04:00

Canadians are often quite critical of what we see as the substantial ignorance of the American population re: the Great White North. In fact, we usually take perverse pride in being so misunderstood and forgotten by the imperialist Yankees. But this is really just our own prejudice showing through. Some Americans are woefully uninformed about their northern neighbour. But a large proportion do appreciate the qualities that make Canada so unique and special. Here's one American journalist's take on what makes Canada such a great place, especially during NHL playoffs

MLB Predictions - Individual

2008-03-29T20:54:00.003-04:00

I list my three mostly likely candidates in each category.

American League

AL MVP
1. Miguel Cabrera
2. Alex Rodriguez
3. Vladimir Guerrero

AL Cy Young
1. Justin Verlander
2. Josh Beckett
3. Erik Bedard

AL Rookie-of-the-Year
1. Evan Longoria
2. Daric Barton
3. Jacoby Ellsbury

AL Batting Champion
1. Ichiro Suzuki
2. Vladimir Guerrero
3. Robinson Cano

AL Home Run Champion
1. Alex Rodriguez
2. Travis Hafner
3. David Ortiz

AL RBI Champion
1. Alex Rodriguez
2. Miguel Cabrera
3. David Ortiz

AL ERA Champion
1. Fausto Carmona
2. Roy Halladay
3. Justin Verlander

AL Wins Champion
1. Justin Verlander
2. Josh Beckett
3. C.C. Sabathia

AL Strikeouts Champion
1. Erik Bedard
2. Javier Vasquez
3. Felix Hernandez

National League

NL MVP
1. David Wright
2. Chase Utley
3. Prince Fielder

NL Cy Young
1. Johan Santana
2. Jake Peavy
3. Roy Oswalt

NL Rookie-of-the-Year
1. Joey Votto
2. Chase Headley
3. Kosuke Fukodome

NL Batting Champion
1. Chase Utley
2. Albert Pujols
3. Hanley Ramirez

NL Home Run Champion
1. Ryan Howard
2. Albert Pujols
3. Prince Fielder

NL RBI Champion
1. Matt Holliday
2. Ryan Howard
3. Prince Fielder

NL ERA Champion
1. Jake Peavy
2. Johan Santana
3. Dan Haren

NL Wins Champion
1. Johan Santana
2. Jake Peavy
3. Carlos Zambrano

NL Strikeouts Champion
1. Johan Santana
2. Jake Peavy
3. Aaron Harang

MLB Predictions - Team

2008-03-29T20:44:00.003-04:00

Here are my predictions for the upcoming MLB season. Individuals performance predictions will follow. Perhaps the only surprising thing about my picks is that I have Arizona and Colorado finishing 3rd and 4th in the NL West. Both teams greatly overachieved last year. Arizona had a negative run differential and a wild and improbable run the Rockies propelled them to the World Series where they were greatly overmatched by the champion Red Sox. I expect both teams to take a step back this year.

American League

EAST
1. Boston Red Sox 95-67
2. New York Yankees 90-72
3. Toronto Blue Jays 89-73
4. Tampa Bay Rays 70-92
5. Baltimore Orioles 62-100

CENTRAL
1. Detroit Tigers 97-65
2. Cleveland Indians 92-70
3. Minnesota Twins 80-82
4. Chicago White Sox 78-84
5. Kansas City Royals 70-92

WEST
1. Anaheim Angels 93-68
2. Seattle Mariners 87-75
3. Oakland Athletics 75-82
4. Texas Rangers 72-89

National League

EAST
1. New York Mets 95-67
2. Philadelphia Phillies 88-74
3. Atlanta Braves 83-79
4. Washington Nationals 73-89
5. Florida Marlins 70-92

CENTRAL
1. Chicago Cubs 88-74
2. Milwaukee Brewers 85-77
3. Cincinnati Reds 80-82
4. St. Louis Cardinals 74-88
5. Houston Astros 72-90
6. Pittsburgh Pirates 66-96

WEST
1. Los Angeles Dodgers 87-75
2. San Diego Padres 84-78
3. Arizona Diamondbacks 82-80
4. Colorado Rockies 79-83
5. San Francisco Giants 74-91

Post-season

ALDS
Boston over Anaheim in 5
Detroit over Cleveland in 5

NLDS
Philadelphia over Chicago in 4
New York over Los Angeles in 4

ALCS
Detroit over Boston in 7

NLCS
New York over Philadelphia in 6

WORLD SERIES
Detroit over New York in 6

The Reserve Clause

2008-03-26T22:18:00.003-04:00

A few weeks back, Milwaukee Brewers first baseman Prince Fielder expressed his unhappiness with his current contract. Fielder, who followed up an impressive rookie campaign in 2006 by leading the NL with 50 home runs in 2007, is one of the sport’s best young power hitters. But he renewed his deal for only $670,000 US, relatively little for a player of his calibre. Fielder is understandably frustrated with his contract situation. Should he be?

Here’s a primer for Fielder and others who are ill-informed about the structure of MLB’s labour market. All players with fewer than six years of experience are subject to what is called a “reserve clause”. The rights to these players are retained by the team to which he was drafted and originally signed. However, once a player completes three full years of major league experience, he is eligible for salary arbitration, giving the player some leverage in salary negotiations. Note that 17% of players become arbitration eligible after just two years of service; they are known as “Super Twos”. After six years of experience, a player is no longer constrained by the reserve clause and becomes a free agent. He can then make his services available to the highest bidder.

There is a small but significant economic literature on this topic. The findings of these studies are unsurprising. Briefly:

· The reserve clause creates significant monopsony power, especially for players who are ineligible for arbitration

· Once players achieve arbitration eligibility, their salaries continue to be suppressed below competitive market levels, but rapidly approach free agent salaries as experience increases. For example, see Ryan Howard’s latest contract.

· Free agents enjoy considerable market power and can command salaries in excess of their marginal revenue products (winner’s curse?)

So I say to Fielder, there is no reason to be unhappy with your contract. His current contract seems to be about right according to MLB’s collective bargaining agreement. In fact, he is probably earning about as much as anyone would in his circumstances. And with just one more year until arbitration, he can expect to be earning a lot of money very soon.

This is probably a good place to comment on the NHL’s CBA. This functions very much like MLB’s agreement, except that arbitration eligibles (often called restricted free agents) can be poached by other teams through the use of offer sheets, e.g. the Dustin Penner signing. A restricted free agent’s current organization can either match the offer or accept draft picks as compensation for losing a player. As a result, teams have less control over their young players than they did before. To correct for this, a club may want to sign its young players to long contracts earlier in their careers. The riskiness of such deals is offset by the risk of losing the player to an offer sheet. And in fact, this is exactly what we see happening in the NHL. Alexander Ovechkin, Rick Dipietro, Mike Richards, and many others have signed long term contracts that would have seemed absurd in previous years. But this is simply the natural consequence of the new market structure.

Combined with a reasonable salary cap, this is actually a fairly sensible way to ensure that players receive compensation in line with their true value while maintaining a high degree of competitiveness. That’s not to say there won’t be growing pains as teams and agents adjust to the new rules. And of course not everybody wins. The beneficiaries of this system are the game’s most talented players; they reach their peak earning years faster than before. And the salary cap ensures that the richest clubs will not be able to abuse their position by indiscriminately stripping the rosters of small market clubs. Thus, we should see increased parity across the league. The losers in this agreement are aging veterans. In the past a team could overspend on a past-his-prime free agent. But teams must now contend with a salary cap while paying more to their young players. They can no longer afford to over-compensate veterans. And in this fan’s eyes that’s not much of a problem.

What about Barry?

2008-03-06T17:37:00.001-05:00

CP reports that Anthony Weiner, a US congressman from New York, has called on the FBI to drop its investigation of Roger Clemens for perjury. Weiner said:

“Roger Clemens has been shamed. I think the public record is replete with examples of how he did not likely tell the truth. What is the public benefit of continuing with an FBI investigation?”

And:

“The real incentive to clean up this mess is not a governmental one.”

I agree on all points. The case against Clemens is strong. If the allegations are true, his fervent proclamations of innocence will further embarrass and discredit him. The mighty fall hard, and the once giant-like Clemens seems bound for a crash. But does the use of performance-enhancing drugs in professional sports warrant an FBI investigation? My opinion is that it does not. Rather, the professional leagues should be responsible for setting and implementing their own drug policies.

But my concern here is that while Roger Clemens garners sympathy, Barry Bonds receives no compassion even as his own legal troubles continue unabated. If anyone has been needlessly and excessively harassed by the authorities in regards to doping, it is Bonds. So where are the Bonds supporters? His situation is essentially identical to Clemens, so if the case against the latter should be dropped, why not Barry’s? I call on Anthony Weiner and all other Clemens groupies to have a consistent sense of justice and treat all besieged athletes the same way.

News Briefs

2008-03-03T22:23:00.003-05:00

The end of February seemed unusually busy for Canada. I suspect that the heightened activity was due to the extra day. Here are some thoughts on the stories that CBC News deemed to be essential reading.

1. The Cadman deal

I wonder how long Dona Cadman will last in politics. She has her eyes on the Conservative candidacy in her husband’s old riding, and yet doesn’t have the sense to handle this potentially damning information more carefully. Don’t misunderstand me: I’m not advocating a cover-up. These are serious allegations and the Canadian public deserves to know the truth. But for her own sake, could she not have revealed the story more delicately? Or less embarrassingly?

2. Breakaway Anglicans

This is a sad story for the Canadian Church. Ten congregations have now left the Anglican Church of Canada. A popular misconception is that their departure is due primarily to differences about homosexuality. No one denies that this has contributed to the divisions. Ultimately, it was the blessing of same-sex marriages that drove many these congregations to leave. But I think the real is issue is much wider, and has more to do with an increasingly loose interpretation of the Bible in general, rather than with one subject (namely, homosexuality) in particular.

3. Prince Harry sallies forth

Sally on, old chap, sally on.

4. The federal budget

As a student of the dismal science, it would be terribly uncouth for me to avoid mentioning the budget. It was, however, a rather boring budget in the end. Which may not be such a bad thing considering the schizophrenic character of the previous Harper budgets. Things I did like:

(A) $300 million to the Atomic Energy of Canada Limited
- nuclear power such not be ignored in the search for alternative energy

(B) $250 million over five years for the automotive sector to research and develop greener and more fuel-efficient vehicles
- now is the time for auto companies to increase investment in all areas of their business

(C) $330 million over two years to improve access to safe drinking water in First Nations communities
- So many aboriginal policy spending initiatives are ridiculously vague but this one is clear, practical, and is something I have wanted to see for some years now

(D) More scholarship money for students
- There still needs to be a greater emphasis on graduate students
- Also, is the new Canada Student Grant Program merely the old Millennium Scholarship Foundation under a Conservative name?

5. Kenya`s peace

Thank God. I hope the cabinet scheme will be effective.

6. Robert Latimer

The earlier National Parole Board ruling was a disgrace. The members in question grossly overstepped the stipulated duties and authority of their position. I`m glad to see their decision was repealed.

7. Trade deadline, schmade deadline

It was a very exciting trade deadline: two blockbusters (the Richards and Hossa trades), one good exchange of quality assets (Cambell to SJ), and a curious dump (Huet to Washington). Brian Burke showed his talent by adding valuable players without having to make a deal at the deadline. I was intrigued by the lack of moves by Canadian-based teams. Nonis, in particular, performed poorly by failing to acquire scoring help. Also, the Toronto Maple Leafs really shook things up. Of course, it will be weird to see Wade Belak suiting up in a Panthers jersey, but the rebuilding had to begin. Those mid-round picks are crucial.

Recap: Ottawa vs. Philadelphia

2008-02-20T16:27:00.004-05:00

I was able to make the trip to Ottawa last night to see the Senators play the Flyers. Both teams have been play poorly of late. The pace of the game lagged a bit in the second period but picked up again through the third period and into a very exciting overtime. Two SHGs made for some excitement. The final score was Ottawa 3 Philadelphia 2 (SO). In general, Ottawa did not do a good job of going to the net. Some thoughts on individual performances:

Ottawa

D Wade Redden – Steady but unspectacular play from the veteran blue-liner. He failed to hold the line a couple of times early in the game, but showed great patience and hockey sense to help set up Ottawa’s second goal.
LW Dany Heatley – Not a good game. Had some chances in OT but was mostly noticed for glaring giveaways.
RW Daniel Alfredsdson – The captain was not an offensive threat this game but was great killing penalties.
C Antoine Vermette – Had a nose for the net all night. Was a couple of bounces away from a multi-goal game.
G Ray Emery – Gave up some big rebounds that fortunately bounced away from danger. But to his credit the only Flyer goals came of off deflection.
D Andrej Meszaros – His mistakes are still what I notice most about his play.
LW Cory Stillman – Great game! He was the most dangerous Senator with the puck tonight. Brilliant set up to Volchenkov in OT. Also great backchecking.

Philadelphia

D Braydon Coburn – I thought Coburn was a force tonight. He made two defensive plays that were particularly memorable.
C Daniel Briere – Missing in action. Apparently he played 20+ minutes and recorded 4 shots, but the only thing I remember about his play was his miss in the shoot-out.
D Kimmo Timonen – Good game at both ends of the rink. Great hockey sense to join the rush on the penalty kill and was rewarded with a shortie. Was a physical match against the much bigger Heatley.
C Mike Richards – Seemed to be everywhere tonight but didn’t have much of an impact.
C Jeff Carter – See Richards. Did create a great scoring chance after stripping the puck off a Senator in the neutral zone.

Three Stars

1. Cory Stillman
2. Antoine Vermette
3. Braydon Coburn

2010 Olympics

2008-02-18T01:03:00.005-05:00

TSN recently had a poll on their website asking people to pick who they thought should be on the Canadian Men's Olympic hockey team in 2010. Two years is a long time, especially when it comes to predicting the development of young talent (and Canada has a lot of that commodity) and the erosion of old talent. But just for fun, here is the team I’d like to see in Vancouver.

Nash	Crosby	Iginla
Lecavalier	Spezza	Heatley
Gagne	Thornton	Toews
Getzlaf	M.Richards	Perry
	Sakic

Pronger	Phaneuf		Luongo
Bouwmeester	Weber		Brodeur
Redden	Green		Giguere
Campbell

One noticeable absence on the blue line is Scott Niedermayer. I question whether he will still be playing in two years. If he is, then I would select him in a heartbeat. He is the world’s second best defenseman (after Niklas Lidstrom of course). The likely deletion is Wade Redden. Or Mike Green. But the latter is just coming into his own. True, his sudden emergence is a hockey columnist's dream and as such he has been getting a lot of press lately. But I think it is well deserved. This guy has the raw skills to control the flow of a game, much like Bouwmeester does. Let's hope they both reach their potential.

Also, there are no Staals on this team. The competition for my last two forward spots was tight. I considered Eric Staal, Jonathon Toews, and Corey Perry. Though still a teenager, Toews has proven himself to be a solid two-way performer with loads of offensive potential – and he will only improve. Corey Perry is getting better every year and should be a consistent 40 goal scorer by 2010. Eric Staal has the tools to be a dominant player in the NHL (remember that he’s just 23 years old), but he seems to be regressing. I still think he will end up as a 40-50-90 first line centre. But in the end I’m partial to Winnipeggers and think Getzlaf-Richards-Perry would be an incredible 4^th line (2005 WJC team-mates; Crosby, Phaneuf, and Weber were also on that squad, the greatest junior team ever). Also, I’m not willing to give up Joe Sakic. If he’s still skating in two years, Burnaby Joe has a spot on my team. So Thunder Bay will have to wait until 2014 (if NHLers play, which is a big if) to see one of the favourite sons play for the national team. But I wouldn’t be surprised to see three Staals on that team (again, big if).

I doubt that my goalie selections are very different from what most people will choose. Marty Turco would also be a solid choice for third stringer, and I suppose Pascal Leclaire or Carey Price could be ready for such duties by then.

This exercise is very difficult because Canada has such a deep talent pool. I don’t envy the Executive Director of the team. He has a very difficult job. [And just for the record, I think that person should be Steve Yzermam. And team Canada’s coach should be Mike Babcock. The Detroit organization simply knows how to win.] Russia will be able to ice the best line (Ovechkin-Malkin-Kovalchuk, scary!) but no country can match Canada in depth. To demonstrate, I have picked a substitute team out of those not already selected:

Kariya	E. Staal	St.Louis
Morrow	Briere	Doan
B. Richards	J. Staal	Horton
Smyth	Bergeron	Carter
	Horcoff

Boyle	Seabrook		Leclaire
Phillips	Jovanovski		Ward
Regehr	Burns		Turco
Coburn

The second team includes the 2004 Hart, Art Ross, and Pearson winner (St. Louis), the 2004 Conn Smythe winner (Brad Richards), and three 2002 gold medalists in Kariya, Smyth, and Jovanovski. Plus some emerging superstars. Not too shabby for a bunch of cast-offs.

Opening Faceoff

2008-02-14T02:47:00.000-05:00

The title of this first post was chosen simply because it suits the name of the blog. I love hockey and certainly intend that many posts here will comment on the sport. But do not expect that to be the only topic covered. My interests also extend to football and baseball.

In truth, the exact shape of this e-journal (that is, web log, or "blog" as the kids are saying these days) is yet to be determined. It is currently 3am and I really just need something to cure my insomnia. Creating a new blog seemed like a good idea. Not to say that I have given no previous consideration to this idea. I have always enjoyed sharing my thoughts with others and, frankly, they ought to enjoy it too. Moreover, I have a strong commitment to improving the world around me. And what better way is there for me to advance the cause of truth and knowledge in this hopelessly ignorant world of ours than to make the insights and revelations of my mind available to everyone with access to the inter-web?

The tentative name of this blog is "From the Off Wing". Like the name indicates, you the reader should not expect my posts to have some uniformly partisan flavour. Nor should you expect the posts to fall into a narrow set of permissible topics. Instead, I will aim to write on a wide range of subjects and from a (not quite so wide) range of perspectives, depending on my mood and what interests me at the time. These may include, but are not limited to, economics, sports, politics, cinema, literature, theology, and the art of decorative handcrafts.

It is now 3:11 and about time I gave sleep another chance. One final warning to potential readers: past experience suggests the possibility that my posting behaviour may be periodically erratic. I hope you are emotionally mature enough to deal with that. If not, thanks for stopping by. If so, many happy returns.

Regards,