Different Opinion

ST. HENRI DE LEVIS, Que. - Premier Jean Charest said Wednesday he doesn't have to ask Ottawa for permission to cut Quebecers' taxes.

Charest, campaigning in a tight election race, announced he would pass on $700 million - coming Quebec's way in the form of new equalization payments - as a tax cut to middle-class Quebecers.

"I am the premier of Quebec," he told reporters who questioned whether the equalization money was available for him to cut taxes.

"I would never in my lifetime go to Ottawa to try to justify to them, ask them permission, to do what I have to do in my areas of jurisdiction," he said.

"We live in a federation. I'm responsible for my areas of jurisdiction," he added. "And I'm accountable for that to the people of Quebec who will be choosing their next government on March 26. I am not accountable to the government in Ottawa in my area of jurisdiction."

Equalization is a federal program to transfer money from Ottawa to the provinces, "to ensure provincial governments have sufficient revenues to provide comparable levels of public services." Asked what he would tell Canadians who woke up to learn their tax dollars were going to fund tax cuts for Quebecers, Charest said he would tell them Quebec is better run now under his government.

"We have cleaned up our public finances, our credit rating has gone up, the health-care system is in better shape, our education system is in better shape and there's a government in Quebec that has a strong team that's making the right choices so that the economy and the middle class can benefit from the decisions we're making," he replied.

Charest denied the tax cut - which is not a cabinet decision but a commitment by his Liberal party - is an attempt to buy votes.

"It's an announcement during the election campaign by the party and we will implement it as the government," he said.

Charest said his government has achieved 65 per cent of its goal to lower Quebec's tax level down to the Canadian average.

The extra equalization money gives that effort a boost.

"We said if we had room to manoeuvre, we would go faster," he explained.

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Labels: Canada, Tax

by Virginie Montet

With home sales tumbling to a two year low, real estate agents looking for innovative marketing techniques to boost sales have found that a work of art hooks a buyer better than a fresh coat of paint.

From coast to coast, "staging" homes is quickly becoming the industry standard in a highly competitive real estate market, and more and more agents are hanging expensive works of art to glamorize a room.

And it works, said Jan Sewell, a real estate agent in the northwestern city of Seattle who specializes in decorating homes for sale.

"Many times the houses sat there and after we stage them, we've got multiple offers," she told AFP.

Sewell works with the rental/sales gallery of the Seattle Art Museum, which makes 20 percent of its one million dollar-a-year business by lending local contemporary works of art to real estate agents, according to gallery coordinator Jodi Bento.

With around 100 paintings currently showcased in homes he represents in the Seattle area, Sewell said an artist's creation "helps to create an impression on a subliminal level, unconscious level ... making people fall in love with the house."

"People think they want to be rational in buying a house. Nobody is," she added.

Angela Di Bello, who runs the Agora Gallery in New York with a similar rental program, agrees wholeheartedly.

"When you walk into a room that has artwork, the space becomes more personalized. It instills a sort of passion, excitement in the mind," she said.

"It has a very positive effect. It makes people feel good. If they feel good they say yes, if not they become negative and say no," Di Bello added.

"It's a balancing act," cautioned Sewell. "The principle behind staging is to sell the house. You don't want the potential buyer to be overwhelmed by the art" to the point that they buy a painting instead of the house, as sometimes is the case.

Most often, contemporary abstract art is chosen for staging homes. A rental fee of three percent of the painting's sale value will keep it hanging in a house for three months.

The works of art rarely surpass 20,000 dollars in value, putting rental prices usually between 50 and 600 dollars for three months.

While the marketing technique is mostly used for upscale homes, "it has infiltrated the lower market," said Di Bello.

The Larsen Gallery in Scottsdale, a suburb of Phoenix, Arizona, has a comprehensive rental policy. "We can offer a wide variety of artwork for clients to choose from, ranging from traditional landscapes to contemporary abstracts," said owner Scott Larsen.

"We have found that the style and type of artwork is really dictated by the clients furniture, home design, etc. and therefore we have placed a myriad of subjects and styles," he said, adding that the gallery has even loaned engravings by Salvador Dali.

"With the slow down of the real estate market, real estate agents are trying to be more innovative," said Gopal Ahluwalia, vice-president for research at the the National Association of Home Builders.

New US home sales tumbled 4.3 percent and existing homes 4.1 percent in July from June, according to the latest Commerce Department data.

Besides artwork, he said, people seeking expensive homes are offered a wide variety of incentives including fireplaces, wood floors, swimming pools, travel packages and even cars.

Copyright © 2006 Agence France Presse.

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When Kirk Jones jumped over the guardrail at Niagara Falls last week and fell 180 feet alongside 150,000 gallons per second of rushing water, traditional explanations for his leap were plentiful. Jones' parents said he had lost his job and was depressed. A suicide expert pointed out the appeal of dramatic farewells. And everyone called the jump suicidal: Jones is the first person to survive a Niagara fall without safety gear.

But when it later came out that Jones had boasted to a friend, "If I go over and I live, I am going to make some money," it was time to call in the economists.

Jones is now negotiating with tabloids to sell his story for thousands of dollars. His case, however, will complicate a debate that is roiling suicidology, one that pits economists against psychiatrists over a basic question: Is suicide a rational decision?

This controversy began in 1974 when two Princeton economists created a model to forecast suicidal decisions. Admittedly, the economists wrote, some suicidal behavior is purely irrational. But evidence suggests that economic theory explains some suicides. The economists proposed that the value of a life might be calculated the same way we value companies: Measure all the happiness a life might contain, discount it by the cost of achieving that happiness, and if the net present joie de vivre is less than zero, suicide is a viable option.

The economics of suicide were largely ignored in the ensuing decades. But last year Dave Marcotte, a professor of public policy at the University of Maryland, Baltimore County, pushed the field forward when he wondered what happens to people like Jones who attempt, but do not achieve, suicide.* There are about 20 attempts for every successful suicide. (Approximately 2.9 percent of the U.S. population has attempted suicide—1,760 attempts per day.)

Previous studies had demonstrated that as personal incomes rise, the propensity for suicide falls (presumably, money does buy some happiness). Marcotte's insight was that individuals contemplating suicide do not just choose between life and death. Rather, they choose between three alternatives: life, death, and the gray area of unsuccessful suicide, which may be negative (expensive injury and permanent disability) or positive (a "cry for help" that elicits attention).

The resulting formula contains a somewhat paradoxical conclusion: Attempting suicide can be a rational choice, but only if there is a high likelihood it will cause the attempter's life to significantly improve.

Marcotte couldn't test the relative "life improvement" of successful suicides—since they were, of course, dead—but he could study those who had failed at suicide to determine if their lives improved after the attempt. The results are surprising. Marcotte's study found that after people attempt suicide and fail, their incomes increase by an average of 20.6 percent compared to peers who seriously contemplate suicide but never make an attempt. In fact, the more serious the attempt, the larger the boost—"hard-suicide" attempts, in which luck is the only reason the attempts fail, are associated with a 36.3 percent increase in income. (The presence of nonattempters as a control group suggests the suicide effort is the root cause of the boost.)

Why should suicide be an economic boon? Once you attempt suicide you suddenly have access to lots of resources—medical care, psychiatric attention, familial love and concern—that were previously expensive or unavailable. Doubters may ask why the depressed don't seek out resources earlier. But studies have demonstrated that psychological and familial resources become "cheaper" after a suicide attempt: It is difficult to find free medical care when you are sad, but once you try to kill yourself, it's forced on you.

Suddenly the calculus of suicide has become even more complicated. Now attempting suicide seems a rational choice, as long as the attempt isn't too successful. But this conclusion alarms suicidologists: Treating suicide as a logical act runs counter to everything they have been advocating for the past 40 years.

The suicide-prevention movement of the 1960s was founded upon the idea of "suicide crisis moments"—relatively brief periods when "psychological pain and mental illness causes irrational thoughts, which are treatable and temporary," explained Dr. David Rudd, president of the American Association of Suicidology. This idea is the basis of suicide hotlines, which studies prove are effective in saving lives. Suicidology suggests that most failed suicide attempts are not caused by permanent mental illness. Rather, they are the products of momentary lapses in reason. Once the crisis moment is resolved through intervention and care, suicidal instincts pass and would-be attempters go on to fruitful and healthy lives. (Many economists and suicidologists agree that multiple suicide attempts and successful suicides are often products of longstanding mental illnesses.)

Constructing suicide as a momentary loss of reason is vitally important to the suicide-prevention movement because it suggests that men and women who have attempted self-murder should be allowed to shrug off social stigmas. If suicidal instincts are just momentary delusions, they are easily explained and dismissed. The suicide-prevention movement fears that if suicide is deemed the rational product of someone's mind, we may feel justified in suspecting that mind forever.

But by objecting to rational explanations of suicide, the suicidology community may be undermining its own cause. Although suicide attempts cost the nation more than $3 billion per year, and suicides claim more American lives than homicides, suicide prevention is hampered by scarce resources. Ultimately, say mental health advocates, legislators don't like to fund suicide prevention because they believe that suicidal people must be crazy, and crazy people don't really want help. Perhaps if suicide were considered a rational and combatable disease, like skin cancer or high cholesterol, we might see well funded educational campaigns similar to those for more socially acceptable ailments.

http://www.slate.com/

Labels: Business

BCA President Michael Chaney in the WSJ, proving that international comparisons are what you make of them:

We are particularly concerned that there is no overarching plan or vision for Australia’s tax system…

Mr. Costello’s review, which has confirmed that key areas of the Australia’s tax system are not competitive and need immediate reform, provides the conceptual groundwork for a program of more comprehensive and sustained reform.

Most analyses of the cost of the war in Iraq fail to take adequate account of the relevant counter-factuals. This paper by academics at the University of Chicago GSB is a notable exception. They conclude that not only are the costs of intervention on a par with the pre-war containment strategy, but that the war will lead to large improvements in the welfare of the Iraqi people.

(via DBRB)

The FT interviews the (thankfully) retiring editor of sister publication, The Economist:

One of his most embarrassing covers, according to Emmott, was in March 1999, about a subject that should have been simple Economist territory: the price of oil. It had its roots in a lunch with an oil company executive, where everybody started musing that, with the oil price at $10, what would happen if it fell to $5? A cover saying that the world was drowning in oil, and noting the possibility of a fall in the oil price, duly appeared. But before the end of the year the price had more than doubled. “It was most embarrassing,” he says candidly.

There was also that 2 December 2004 leader on “The disappearing dollar” that said “the [US] dollar could tumble further and further.” The end of 2004 proved to be a major cyclical low for the USD. Contrarian indicators don’t come much better.

On blog@stefangeens.com, Stefan gives "A guided tour of English-language Swedish blogs":

Fortunately, there are many English-language bloggers that are connected to Sweden in some way, so I thought I might take you on a guided tour of the anglo-Swedish blogosphere (Defined as blogs where a majority of the writing is in English, and thus accessible to outsiders)

Thank you for a good list of links, and for putting me on it!

The Swedish Newspaper Dagens Industri this morning published an article that tried to explain the much debated weakness of the Swedish Krona during the spring. According to the article, the U.S. Homeland Investment Act could provide a useful clue. The HIA has let U.S. firms repatriate profits earned abroad during 2005 and a Dollar/Euro chart suggests that it has had a dollar positive impact.
Dagens Industri provides a chart showing "U.S. direct foreign investment" to support its reasoning:
Looking for other opinions on the web, I came up with the following: The investment blog "Always Bet on Black" cautiously exclaimed itself to be "a modest USD bull" in early December. In October TaxProf had an estimate on the amount of repatrieated money tha he found to much exceeded estimates:

Well, here's what has happened: In nine months the law has increased the flow of repatriated foreign capital by a whopping $225 billion. J.P. Morgan estimates that another $75 billion will return to America in the fourth quarter. About half of these returning funds were profits from pharmaceutical companies and much of the rest from such high-tech firms as Dell, IBM and Intel. We can't resist noting that this $300 billion of repatriated capital is nearly double the estimate by Congress's hapless Joint Tax Committee, which had assured us this time last year that not a dime more than $165 billion would arrive. To quote Britney Spears: Oops, they did it again.

Maybe it is time now for the fall in the dollar that economists has been waiting for during quite a while?