Magic Statistics

A sad day for coffee fanatics, like me. Carlos Sanchez, who has played Colombian coffee farmer Juan Valdez for almost 40 years, is retiring from the role.  He will be replaced by a new, younger Juan.

The actor who portrayed fictional Colombian coffee icon Juan Valdez for four decades has hung up his trademark poncho for the last time.

"It's pretty nostalgic," said Carlos Sanchez, 71, who for 37 years promoted coffee as the moustachioed farmer.
. . .
Juan Valdez, with his leather bag, straw hat and poncho, and accompanied by his faithful mule Conchita, embodied rural Colombia.

First created in 1959, he was found roaming the countryside in search of the finest coffee beans.

The new Juan has not yet been chosen, but he will definitely have a bushy mustache.

A British organisation called Which? is complaining that bank charges for overdrafts are too high.  I hope you’ll excuse me if I don’t have a lot of sympathy for this.  An overdraft occurs when a bank customer writes a cheque (that’s “check” in the US) in excess of the balance in said customer’s account.  That is to say, the customer tries to spend money he or she doesn’t actually have.  Which? claims that “thousands” of bank customers are irate at being expected to pay a fee for spending money they don’t have.  Those nasty banks—demanding payment for service.

Banks have the option of simply refusing payment and bouncing the cheque.  Instead, the bank honours the cheque and allows the customer to run an “unauthorized overdraft”.  Sounds to me like the bank is doing the customer a favour.  Still, the complaints roll in.  As Clare Booth Luce once said, “No good deed goes unpunished.”

Customers are being charged almost £4.7 billion a year by their banks for dipping into the red, new research showed yesterday.

Current account providers are charging £20 to £30 for unauthorised overdrafts, and then an extra £25 to £30 for any standing orders, direct debits paid or cheques honoured while the customer is using the overdraft.

Doug Taylor, of Which? who carried out the report, said an average customer could pay £118 in charges for exceeding an authorised overdraft of £250 by £50 for three days.

"Many thousands of people are fed up with being made to pay unreasonable charges and are preparing to do something about it," he said.

Do something?  How about moving your funds to another bank?  Oh, wait, people run overdrafts because they have no funds in their accounts.  Silly me.  Here’s a clue: To avoid overdraft charges, don’t write cheques for amounts larger than your account balance.

Among other proposals, Which? wants regulators to force banks to give customers with unauthorised overdrafts a 14-day grace period to bring their accounts back into the black.  That’s compelling banks to issue 14-day free loans.  I don’t think British banks became world-class financial institutions by making free loans.

The Globe and Mail headline says, "Beaudoin says dollar is killing industry", but the actual quotes from Laurent Beaudoin, CEO of Bombardier Inc., fail to live up to that inflated billing.

Bombardier Inc. chief executive officer Laurent Beaudoin blasted the Bank of Canada yesterday for failing to stop the Canadian dollar's rapid rise, which he said is having a devastating impact on the country's manufacturing sector.

“In order to minimize the effects of our strengthening currency on Canada's manufacturing industry, I think certain steps must be taken to give companies time to adjust,” he told shareholders at the company's annual meeting.

“I feel it is important to debate these issues and to question governments on this matter while there is still time.”

The Canadian dollar broke through 91 cents (U.S.), yesterday, matching a 28-year high, before closing at 90.88 cents.

Mr. Beaudoin's comments were an unusually harsh salvo against the bank by one of Canada's most prominent CEOs, and someone who has the ear of Ottawa.

In my view, the quoted statements don’t live up to the reporter’s claims that Mr Beaudoin “blasted” or fired “an unusually harsh salvo against” the Bank of Canada.  Be that as it may, the economic situation belies the accusation that the high dollar is “killing” Canadian manufacturing.

The latest data from Statistics Canada’s Monthly Survey of Manufacturing, covering the period through March, show that manufacturing isn’t doing too badly.  The value of manufacturing shipments jumped in March after declines in January and February, so that shipments in the first quarter of 2006 rose 2.2% over the same months of 2005.  To be sure, it’s not exactly Easy Street, but it’s nowhere near being killed, either.

Mr Beaudoin is correct that manufacturing employment is lower than it was a few years ago.  However, total employment in Canada continues on a steady upward trend while unemployment remains near the lowest rates seen in decades, despite the rapidly rising dollar, so it would appear that those who have lost jobs in manufacturing are finding work in other sectors of the economy.  Also, the fact that shipments continue to increase despite a significantly smaller work force shows that the productivity of manufacturing firms is improving.  Canadian manufacturing is adapting very well to the increasingly competitive globalised economy.

Not only that, the Canadian economy as a whole evinces no ill-effects of the sky-high dollar.  This morning’s release of gross domestic product (GDP) estimates shows that GDP grew in the first quarter at an annualized rate of 3.8%—far above expectations of most observers.

All things considered, based on the economic evidence, Bank of Canada governor David Dodge is doing a fine job.

These two photos appear on the front page of today’s Globe and Mail.  On the left is Nazanin Fatehi, the Kurdish Iranian teenager sentenced to death by hanging for killing a man attempting to rape her and her niece.  On the right is Iranian-born Canadian Nazanin Afshin-Jam, who has publicised the plight of her Iranian namesake.

Since news emerged of Nazanin Fatehi's conviction this year, Nazanin Afshin-Jam, the 2003 Miss World runner-up, has spearheaded a growing international campaign to save Ms. Fatehi from execution.
. . .
Details of the Fatehi case and where it sits in Iran's judicial process are unclear and scarce. Some of them come from the German-based International Committee Against Executions, led by an Iranian exile, and from Amnesty International.

Amnesty, quoting reports in the Iranian newspaper E'temaad, said that Ms. Fatehi told the court that three men approached her and her niece, forced them to the ground and tried to rape them. Seeking to defend her niece and herself, Ms. Fatehi, 17 at the time, stabbed one man in the hand with a knife that she carried and then, when the men continued to pursue them, stabbed another of the men in the chest.

"I wanted to defend myself and my niece," she reportedly told the court in Karaj, west of Tehran. "I did not want to kill that boy. At the heat of the moment I did not know what to do because no one came to our help."

Through intermediaries and written questions, Ms. Afshin-Jam has "interviewed" Ms. Fatehi, the eldest of six children in a poor Kurdish family. Ms. Fatehi was unable to attend school because she was responsible for helping to care for her siblings. Her father is too ill to hold a job; her mother works as a housecleaner.

A Vancouver immigration lawyer is also helping Ms Afshin-Jam with the case, which the Iranian supreme court has apparently not yet formally decided to review.  The Globe says that officials at the Iranian Embassy in Ottawa could not be reached for comment.

Ms Afshin-Jam’s online petition in support of Nazanin Fatehi, with a current total of over 163,000 signatures, is posted here.

Previous related posts:

• Nazanin’s final appeal to be heard this week
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A Statistics Canada study released this morning shows that free trade agreements provided economic benefits to all regions of Canada during the 1990s.  The benefits were not spread evenly across the country, however: Ontario received the greatest economic gains.

The Canada-US Free Trade Agreement (FTA) was implemented in 1989, and the North American Free Trade Agreement (NAFTA) in 1994.  The researchers examined data from 1980 through 1999 in order to quantify changes following the agreements.

The study found that all regions have benefited through improved productivity performance, higher wages and higher output growth. However, Ontario has been the principal beneficiary.
. . .
Some of these productivity gains were passed on to workers in the form of higher wages. Workers in Ontario gained the most from increased trade integration, while the gains in other regions, although significant, were relatively small.

The study found that from 1988 and [sic] 1999, increased trade integration was associated with real wage gains of 12.0% for manufacturing workers in Ontario, but only 1.0% in Quebec, 0.8% in Western Canada, and 0.4% in Atlantic Canada.

The study also contradicts a frequently expressed concern, namely, that free trade agreements with the United States would result in relocation of firms from Canada to the US, thus decreasing Canada's share of total North American production.  To the contrary, the study found that all regions of Canada increased their share of North American manufacturing during the time period under study.  Ontario saw by far the largest expansion in manufacturing share, followed by Quebec and the Prairies, while BC and the Atlantic region saw the smallest gains.

A summary of the study's findings is posted here and the full paper, by Wulong Gu and Gary D. Sawchuk of Statistics Canada's Micro-economic Analysis Division, is available here (pdf).

An additional point of interest is that the source of the economic model predicting losses for Canadian manufacturing under free trade is a 1980 article by Paul Krugman, Professor of Economics at Princeton University, now better known as an opinion columnist for the New York Times.  Dr Krugman's columns often contain reflexive criticism of President George W Bush's foreign and domestic policies.

Krugman’s (1980) model of trade in differentiated goods with increasing returns to scale suggests that . . . a reduction in trade barriers or an increase in trade integration should be linked to a decline in Canada’s share of North American shipments as firms relocate to the larger U.S. market and serve the small Canadian market through exports. Such relocation allows firms to save on trade costs and realize economies of large-scale production. This potential loss in Canada’s share of North American shipments from increased trade integration has been an important concern for workers and policy makers in Canada.

The Statistics Canada paper puts forward results that contradict Krugman's trade model.

This evidence is at odds with Krugman’s model of trade with increasing returns.
. . .
Overall, our results stand in sharp contrast to Krugman (1980) . . . On the other hand, our results are consistent with those from Head and Ries (2001) who also find little support for Krugman’s model of trade with increasing returns.

The above quotations are from pages 27 through 29 of the pdf document.

The published source of Paul Krugman's international trade model is: “Scale Economies, Product Differentiation, and the Pattern of Trade”, American Economic Review (1980) 70, 5: 950–959.

Documents obtained from the federal government under Access to Information show that polygamous marriages have been recognised for some purposes.

Multiple-wife marriages have been legally recognized in Canada to award spousal support and inheritance payments.

The former Liberal government long maintained that polygamy is criminal in Canada but documents obtained by Sun Media under Access to Information show that polygamous marriages have been recognized "for limited purposes" to enforce the financial obligations of husbands.

That provides more evidence in support of the belief that legalising same-sex marriage would pave the way for polygamy.  When Stephen Harper raised that possibility in January 2005, he was scoffed at.  Who's scoffing now?

via Persecuted Church Weblog.

Previous related posts:

• Enforce Canada's polygamy laws
• Binks rants