We’ll I’m glad to be back in Canada, looks like I didn’t miss much other than cold weather. When we left sunny Hawaii it was 27°C (80°F) and arrived back in Canada it was –30°C (-22°F), almost a 60°C temperature drop. I was happy to read in the local paper that the Canadian Dollar hit a new high relative to the US dollar the day we checked out.
I see not much has changed on the investment front other than the continued march forward. The economy is doing better than what the double dip crowd has maintained, but I see many are still quite afraid of the US budget situation on all levels of government. It really doesn’t concern me yet, as the US enjoys very low income taxes and consumption taxes relative to the rest of the west. That said I don’t believe the budgetary problems should be corrected by raising revenue, costs can and should be slashed to correct the problem.
I have seem many comments recently sounding the alarm bells as Illinois just jacked income tax rates from 3% to 5%. While the percentage increase is huge and makes headlines the overall tax rate is still quite low. Alberta has among lowest tax rates in Canada at a flat 10% of income, Ontario is 5.05% on the first $37,000 and then it jumps to over 9%. I have looked at many graphs of total (state and federal) income tax rates for US citizens, and I personally would love to be a US taxpayer. I know some who have transferred to the US (in a division of the company I work for) and they have commented on how dramatically lower the tax rates are.
We’ll I did manage to read two and a half books while away, Bull by Maggie Maher, Blink by Malcolm Gladwell, and the half was The Revolt Of The Masses, by José Ortega y Gasset's.
Bull was an interesting book the internet bubble, however I felt it dragged on for too long. She really got into all the cast of characters behind the scenes on Wall Street.
Blink, I felt, was not as good as Malcom Gladwells other books like Tipping Point. However it did have some interesting insights into our subconscious and the whole Pepsi vs. Coke challenge in the 80’s. I do love both Pepsi and Coke (Pepsi a little better), and I know I can tell them apart in a side-by-side challenge. Gladwell presented a different way to perform the taste test which is much harder. Have someone prepare three cups two of one drink and one of the other and have the participant to tell them apart. I thought for sure I could do it but we tried last night and I failed miserably, in fact I got all three backward. Both my brother and my wife got it correct, and neither are big soda fans.
As for The Revolt Of The Masses, I am a little better than half way through it. It is a tough read as it was written originally in Spanish in 1930. Some of the terminology was hard to catch on to at first. I will perhaps make further comments on my political views in the future. Ortega is big on different social classes and mass culture and I would agree with many points in the book thus far. His understanding of economics are a little fuzzy, but his characterization of society in some respects are bang on.
In synthesizing this book with some other highly recommended books that I have read, (books like Victory of Reason - How Christianity led to Capitalism, Democracy, and Western Success by Rodney Stark & The Road to Serfdom – Friedrich Hayek) I would have say political and economic history are definitely some areas of interest to me. I simply find it amazing how little the average person understands and appreciates of history.
I believe the single largest problem facing North American society today is that people know absolutely nothing about how Capitalism works, believe Capitalism is a bad thing, and have a definite entitlement attitude. We are most definitely on the road to serfdom.
I would encourage all readers to attempt to describe capitalism in their own words.
I should perhaps sit down some day and write down my own political and economic views and views on life in general. Ludwig von Mises is 100% correct to say economics is the study of human action, while the majority believe it has to do with business, money, and the like. Those are simply bi-products not prime products.
I do want to go on the record saying that I am not a follower of Austrian economics nor narrow-minded Libertarian views which appear hand in hand over at the Mises Institute (mises.org). I would definitely place myself somewhere in the middle, and would definitely want to distance myself from Keynesian economic theory as well. I am strongly against stimulus however in some instances it may be beneficial, however it’s effects are however overstated.
Anyway enough for now… I will be back shortly with comments on Fairfax's 4th Quarter and Peyto's 2010 Reserve report.
All the best!