Posts Tagged Government

Nuclear Reactor Shutdowns Hitting Local Govt Budgets

At the end of last year, a friend sent me an email saying, “Apparently, all those nuclear power stations are not so vital after all”, after most of them went offline and the sky didn’t fall. Think I should forward this article to my friend?

TOKYO (Nikkei)–With no prospect for the resumption of idle reactors, 11 of the 13 prefectures that host nuclear power plants are likely to forecast no nuclear fuel tax revenue for next fiscal year.

The two exceptions are Aomori and Fukui. Last November, Fukui became the first prefecture in Japan to pass an ordinance allowing it to collect the tax even when reactors are not generating electricity. Aomori enacted a similar measure in December that will go into effect as early as April.

For the fiscal year ending next month, the 13 prefectures had been forecasting a combined 42.8 billion yen in nuclear fuel tax revenue, but the take is now expected be at least 16.4 billion yen smaller.

via 2012/02/15 05:48 – Nuclear Reactor Shutdowns Hitting Local Govt Budgets.

Collecting tax, whether or not the plant is generating electricity? How much arm-twisting had to go into bringing about that “agreement”, I wonder? Yikes!

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Triumph of hope over experience

Now that all eyes are on Japan’s new “leader” and his fellow “leaders”, and expecting great things from them, namely the swift cleaning up of all radiation contamination, reconstruction of the tsunami/earthquake devastated areas, putting the Japanese economy back on the path to growth, lowering the strong yen, and generally leading the Japanese into the land of milk and honey, it is perhaps a good time to reflect on the track record of government officials in the area of truth-telling. Hmm, the track record does not appear to be good.

First, from economic analyst Mish, comes the following:
Can Government Lies Calm the Markets?:

The question of the day (for which everyone should know the answer) is Can Government Lies Calm the Markets?

In spite of the fact most of us realize lies will not help, and most often makes matters worse, governments repeatedly resort to lies, platitudes, and wishful thinking.

Jean-Claude Juncker, Luxembourg PM and Head Euro-Zone Finance Minister admitted as such in his statement “When it becomes serious, you have to lie”

Things are clearly serious, so everyone should expect lies, and lies we have in spades.

MarketWatch reports G-7 seeks to calm market fears on Europe, banks

via Mish’s Global Economic Trend Analysis.

Item B is a reminder of what happened many years ago to the Daigo Fukuryuu Maru (mouse-tip to EX-SKF):

Daigo Fukuryū Maru (第五福竜丸?, Lucky Dragon 5) was a Japanese tuna fishing boat, which was exposed to and contaminated by nuclear fallout from the United States’ Castle Bravo thermonuclear device test on Bikini Atoll, on 1 March 1954.

Aikichi Kuboyama, the boat’s chief radioman, died less than seven months later, on 23 September 1954, suffering from acute radiation syndrome. He is considered the first victim of the hydrogen bomb of Operation Castle Bravo.

The fallout, fine white flaky dust of calcined coral with absorbed highly radioactive fission products, fell on the ship for three hours. The fishermen scooped it into bags with their bare hands…

The US government refused to disclose its composition due to “national security”, as the isotopic ratios, namely percentage of uranium-237, could reveal the nature of the bomb. Lewis Strauss, the head of the AEC, issued a series of denials; he went so far to claim the lesions on the fishermen bodies were not caused by radiation but by chemical action of the calcined coral, that they were inside the danger zone (while they were 40 miles away), and told Eisenhower’s press secretary that Lucky Dragon was a “Red spy outfit”, commanded by a Soviet agent intentionally exposing the ship’s crew and catch to embarrass the USA and gain intelligence on the test. He also denied the extent of contamination of the fish caught by Fukuryu Maru and other ships. The FDA however imposed rigid restrictions on tuna imports.The United States dispatched two medical scientists to Japan to limit the public disclosure and study the effects of fallout on the ships crew, under the pretense of helping with their treatment.Even publications of the fallout analysis were a thorny political issue.

The track record is not good, but hey! Perhaps this time around, things will be different. Or, perhaps not.

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Govt to allow industry to power up : National : DAILY YOMIURI ONLINE (The Daily Yomiuri)

There are, and have been, many political philosophers who have said that government intervention leads to ever-increasing intervention and eventually to tyranny. Others have pointed to the “pretence of knowledge”, the impossibility of anyone or any group of people, having enough information to be able to make the right decisions about resource allocation, in other words, managing the economy.

Still others have pointed to the “unintended consequences” of much political action. Herbert Spencer was one such: his ironic wit, combined with well supported facts, led the reader inevitably to the conclusion that the unintended consequences of much well-intended legislation were in fact only unforeseen because politicians were such ignorant twits who had failed to study even the recent history of legislation and government intervention.

What is described below sounds wonderful and a perfect example of government benevolence in action: the initial restriction, the reduced demand due to a vigorous energy-saving campaign that targeted Japanese people’s sense of solidarity, and the resulting surplus of power supply.

While this particular series of actions seems to have borne fruit, there remains the matter of the principle of government intervention in private business and the use of force or threats to enforce its intervention.

So that now a headline like the above, where the government permits industry to do this or that, does not cause any raised eyebrows.

The government on Tuesday announced it will move forward the lifting of its mandatory curb on electricity consumption for large-lot electricity users that has been in place since July 1.

The removal of the restriction will be brought forward from Sept. 22 to Friday in areas devastated by the March 11 disaster, and those in Niigata and Fukushima prefectures that were hit with torrential rain in late July.

These areas are covered by Tokyo Electric Power Co. and Tohoku Electric Power Co.

via Govt to allow industry to power up : National : DAILY YOMIURI ONLINE (The Daily Yomiuri).

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Price of wheat to jump 2% | The Japan Times Online

Despite living in Japan since Commodore Perry and his Black Ships, I didn’t know that the Japanese government set the price of imported wheat. And if they are raising the price because prices rose on the Chicago futures market, then why the need for the government to set the price, anyway?

The government will raise prices of imported wheat to flour millers by an average of 2 percent in October, the third straight increase since last year, boosting costs for companies such as Nisshin Seifun Group Inc.

Foreign wheat for sale by the government to domestic millers will rise to ¥57,720 a metric ton on average in October from the current level of ¥56,710, the Agriculture, Forestry and Fisheries Ministry said Wednesday in a statement. Japan depends on imports for almost 90 percent of its wheat, making it Asia’s largest buyer after Indonesia.

via Price of wheat to jump 2% | The Japan Times Online.

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No livestock farmers apply for government help | The Japan Times Online

What the….?

SENDAI — No livestock farmers in the four prefectures worst hit by the March disaster have applied for a government aid program to help them resume operating, apparently because the qualification terms make it impossible, local authorities said.Under the support program, the government offers subsidies to livestock farmers to remove tsunami debris and repair facilities. To apply, they are required first to form a union with at least five households as members, and the group is then required to begin operating as a collective, with jointly owned and run cattle, pig and poultry barns.

via No livestock farmers apply for government help | The Japan Times Online.

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2011/08/21 01:43 – Govt, BOJ To Fight Strong Yen With Slate Of Measures, Easing

Measures being studied include expanding low-interest loans to small and midsize businesses and providing support to companies that make high-value-added products in Japan, both aimed at preventing a hollowing out of industry and creating new jobs.

After the next administration takes the reins once Prime Minister Naoto Kan steps down, the government will develop concrete plans and include related expenses in the third supplementary budget.

In the meantime, the government is considering conducting yen-selling market interventions should the yen surge. The Japanese currency rose to a postwar high of 75.95 against the dollar in New York on Friday. The government and the Bank of Japan are prepared to conduct interventions early this week if the yen gains more strength.

via 2011/08/21 01:43 – Govt, BOJ To Fight Strong Yen With Slate Of Measures, Easing.

Compare with what the Bank of England is doing. What are the risks associated with encouraging banks to lend to businesses at this time? Curious readers might want to read this analysis.

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Japan city declares nuclear Decontamination Month – Yahoo! News

“We decided that we could not sit by and wait until Tokyo figured out what to do,” said town official Yoshiaki Yokota. “It’s an enormous task, but we have to start somewhere

via Japan city declares nuclear Decontamination Month – Yahoo! News.

More evidence that the tsunami/earthquake/nuclear disaster is forcing people to act without waiting for official permission. More evidence that this disaster is simply too big for a government to manage. According to Hayek (links directly to pdf file) and others, an economy is too big for any individual or group of individuals (yes, even Japanese with computers) to manage. Perhaps it has always been true that efficient management of the country was always beyond the grasp of the government, any government. Perhaps it is just becoming obvious to many now, because this disaster is so huge and complex.

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The Commentator – London rioters are the pampered children of the welfare state

What is all the rioting in the UK about? The rioters probably have various motives, but here’s one commenter’s point of view. Click the link below to read the article joe is commenting on.

joe get Says: 09 August 2011

This is not a protest against government. It’s a protest in favour of government. More government – much more. More benefits, more handouts, more ‘services’, provided by the government for ‘free’. And it is free, because people and businesses who work and pay tax foot the bill. By looting businesses and stealing from them, they are simply cutting out the middle-man of the benefits office. Because the government has taken the first tentative steps towards removing the warm, milky teat of the state in the form of spending cuts, they don’t like it. So they are simply taking their freebies by force. It is likely their violence will be rewarded with more ‘benefits’, and ‘community outreach’. And so it will go on.

via The Commentator – London rioters are the pampered children of the welfare state.

Some will say the rioters are anarchists, which strictly speaking means people who believe in no government (or very small government) (although not many people seem to know that, including the London police), not yobs who shoot people in cars, or steal from injured people’s backpacks.

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Stop claiming food is safe, ministry told | The Japan Times Online

Progress? Perhaps this is in response to public reactions. Perhaps ministers and bureaucrats are realizing that they are not able to manage people’s perceptions in the way they have been accustomed?

Foreign Minister Takeaki Matsumoto has committed an about-face on policy by telling his ministry to refrain from vouching for the safety of Japanese food.

The ministry stance changed after radiation-tainted beef was found to have been sold to consumers nationwide, sources said.

via Stop claiming food is safe, ministry told | The Japan Times Online.

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When a Cut is Not a Cut

Will the U.S. Congress agree on a resolution to raise the debt-ceiling, or not? The continued failure to do so was on the Japanese TV news this morning. I don’t know what they were telling the viewers, but it was probably along the lines of “if they don’t raise the debt ceiling, it’s the end of the world!” (Update: it was probably the news that the yen had rallied against the dollar on the news of a deal: Dollar rallies to mid-77 yen level as deal reached on U.S. debt limit+)

Ron Paul, Congressman from Texas, clarifies the issues:

One might think that the recent drama over the debt ceiling involves one side wanting to increase or maintain spending with the other side wanting to drastically cut spending, but that is far from the truth. In spite of the rhetoric being thrown around, the real debate is over how much government spending will increase.

No plan under serious consideration cuts spending in the way you and I think about it. Instead, the “cuts” being discussed are illusory, and are not cuts from current amounts being spent, but cuts in projected spending increases. This is akin to a family “saving” $100,000 in expenses by deciding not to buy a Lamborghini, and instead getting a fully loaded Mercedes, when really their budget dictates that they need to stick with their perfectly serviceable Honda. But this is the type of math Washington uses to mask the incriminating truth about their unrepentant plundering of the American people.

The truth is that frightening rhetoric about default and full faith and credit of the United States is being carelessly thrown around to ram through a bigger budget than ever, in spite of stagnant revenues. If your family’s income did not change year over year, would it be wise financial management to accelerate spending so you would feel richer? That is what our government is doing, with one side merely suggesting a different list of purchases than the other.

In reality, bringing our fiscal house into order is not that complicated or excruciatingly painful at all. If we simply kept spending at current levels, by their definition of “cuts” that would save nearly $400 billion in the next few years, versus the $25 billion the Budget Control Act claims to “cut”. It would only take us 5 years to “cut” $1 trillion, in Washington math, just by holding the line on spending. That is hardly austere or catastrophic.

via When a Cut is Not a Cut.

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