Is this right?

When the doors opened at 6am at least 300 people were standing in line. A vast convention centre in Baltimore had been transformed into a giant temporary free medical clinic. Word had spread among the city’s working poor.

There were military veterans and a large number of homeless people. Others in the queue had jobs in the digital economy, driving for Uber or working in warehouses for Amazon. Some couldn’t see; many had crumbling teeth. None had insurance that would cover their treatment.

Military veterans get health care from the Veterans Administration. You know, government run, free at the point of use, health care.

What an amusing allegation

A drug company that imposed huge increases in the price of medicines for British patients has filed for debt restructuring, raising fears over its financial health.

Concordia International, which was previously called AMCo, announced yesterday that it was beginning proceedings under Canadian law in an effort to reduce its debts by more than $2 billion. It follows a catastrophic fall in its share price that has resulted in its market value declining from about $1.5 billion to $30 million since The Times published an investigation into drug pricing in June last year.

The drug company was one of several businesses exposed by this newspaper for using a loophole in NHS pricing rules to increase the cost of medicines. The pharmaceutical companies were able to circumvent profit caps by dropping brand names and relaunching products as unbranded generics. The NHS relies on market competition to keep prices down in such cases but the drugs involved often had only a single supplier.

If it’s not able to make a profit then it’s not obvious that it is overcharging, is it?

And really just not getting economic rent either

Paul Hunt says:
October 20 2017 at 4:48 pm
In round numbers there are 13,000 yellow cabs in New York City and at their peak medallions changed hands for an eye-watering Dr Evil price of 1 million dollars. So just the combined value of those medallions was around 13billion USD until recently, and that’s just for one city, admittedly a big one.
It’s a big market, ride-sharing apps do seem to expand it – and the cut that the market thinks Lyft is likely to get could mean they are undervalued. There’s also the potential for the technology ( if it works ) to be incorporated into e-bikes and punting. Exciting times ahead imv.

Reply
Richard Murphy says:
October 20 2017 at 5:57 pm
No one can make enough money out of a taxi to pay a million for a licence

So I a right, they’re not worth a million

What someone pays and what something’s worth are not always the same thing

You really should do some economics

And please remember – because I know your source – Tim Worstall gets his economics wrong, most of the time

But people were making money out of that price. Exactly because there was a restriction upon the number of licences the owners of the medallion were able to charge $40,000 a year for each of the 2 x 12 hour shifts available each day.

Richard Murphy says:
October 21 2017 at 8:48 am
But that’s not the return, is it? That’s because much of that sum is the price of labour – the taxi driver has to do long and anti-social hours to achieve this (if indeed they can). So this, plus the cost of their can (the return to capital) has to be deducted before the return to rent (the price for the medallion) is estimated. And that then looks paltry. Which is why the price has collapsed.

No, the price has collapsed because competition from Uber and Lyft has lifted that medallion restriction thus destroying the ability to collect that economic rent.

Cassandra Trojan says:
October 20 2017 at 5:28 pm
“no taxi rank has ever been worth $10 billion.”

“In 2013, some {NYC taxi] medallions sold for more than $1.3 million. …There are currently 13,587 yellow-taxi medallions in the Big Apple ” NY Times 5 Apr 2017

13,587 * $1.3 million = ?

Reply
Richard Murphy says:
October 20 2017 at 5:54 pm
But that’s rent, as I said

Yes, it’s an economic rent, One being destroyed by that competition. Which is where economists usually say Hurrah! In fact, even Spudda has been saying that we want to get rid of economic rents where we can.

Richard Murphy says:
October 21 2017 at 8:44 am
That’s what happens whene there is a new, disruptive element that for a one not (and it will only be a moment) creates something that looks like a market: the rental return of super normal profits disappears

But in this case the new entrant clearly wants to re-establish the barriers – that’s they only at the price can be justified

So that aim, as I said, is not to run taxis but to extract a rent from the taxi rank

No, collapsing the rent in one city by $13 billion and then making just normal profits on activity in 300 cities to gain a valuation of $10 billion. Note that the rent being destroyed is an annual value, the worth of Lyft is a capital value, reflecting all future income. In normal economics this is regarded as a very good thing indeed actually. And if Ritchie ever thought through his own opinions on rents then he would agree too.

This is fascinating from George Monbiot

One study in Britain suggests that, if we stopped using animal products, everyone in Britain could be fed on just 3m of our 18.5m hectares of current farmland (or on 7m hectares if all our farming were organic).

I’ve never seen it put quite so bluntly. Organic requires more than twice the land of industrial farming.

Oh, and if we’re not using animal products then where the hell do we get the shit for fertiliser from?

Really not a good idea

The Lords, in contrast, should represent vocational democracy. There should be people elected from each sector, whether that be electrical or academic, medical or administrative. Doctors should vote for a peer, as should nurses and cleaners. It would give an incentive to the organisation of carers, builders and gardeners, who would each select a representative from within their organisation.

The biggest point about a market economy is that, over time, it’s the best way of managing sectoral change. At one point coal mining was absolutely essential to this sceptered isle. Today it’s of no importance at all. That it was government owned is a major reason the rundown of it was so difficult.

Now imagine that coal miners got to elect, as a constituency, members of the legislature. That change is going to be even more difficult, isn’t it?

That is, vocational democracy sets in stone the current distribution of vocations. When entirely the point of economic management is to ease changes in that distribution as desires and technology change.

Dawn Foster never does quite get the right end of the stick, does she?

So the intervention of Boeing’s European rival, Airbus, appears to be a work of genius. Airbus has negotiated a majority 50.1% stake in Bombardier’s C-series jet programme without having to pay anything for it. In doing so, the 300% import duty can be neatly sidestepped because the final stage of the construction of jets destined for the US market will take place in Alabama, rather than Belfast. In doing so, Airbus will not be importing completed planes but parts, bringing sorely needed jobs to a Republican state – a move that is unlikely to annoy US politicians.

If Airbus’s legal advice is firm, and the deal passes muster with the US government, it will have snatched the much-delayed C-Series from the abyss and hopefully secured a thousand jobs.

But while the US and Boeing are clearly the Goliaths in this parable, May cannot cast herself as the bold and canny David. For all the Conservatives’ insistence that Britain and Northern Ireland will be “open for business”, it was clear that the prime minister had no clout with Trump and Congress – yielding not a deal but only stern and plaintive public pronouncements on the import tax being a travesty.

Instead, Airbus has succeeded in outsmarting the larger Boeing. So as we near the Brexit deadline, a pan-European project has come to the rescue of UK jobs.

Well, the planes never would have been assembled in Belfast. But still, look at what the claim is. Brexit means we’ve no power over trade, we’re all doomed.

And then what happens is that despite Brexit cooperation across Europe continues, business not being as dependent upon politics as is generally thought. Woe is us eh?

Well, actually you know

So it was just her in the beam of Norton’s irresistible curiosity. And while she has a book to promote – What Happened – there was still this pressing incongruity of her normality. She arrived on stage wearing a surgical boot which she explained in an anecdote neither interesting nor uninteresting, just ambiently pleasant to listen to, like cicadas. “I was running down the stairs in heels with a cup of coffee in hand,” – a break for a short homily on how unwise it was to run with coffee – “I was talking over my shoulder and my heel caught and I fell backwards”. She broke her toe. She had excellent medical care from our “English medical system” (little shout out for the NHS, thoughtful and serendipitous). Well. You sound perfectly … nice. How come nobody ever mentions that you’re perfectly nice?

It’s one of the commonplaces of American political commentary that one on one she is perfectly nice. And her aides have been tearing their hair out for decades at her total inability to be so en masse. It’s actually one of the main stories about her in fact.

Can we leave yet?

Zimbabwe President Robert Mugabe has long faced United States sanctions over his government’s human rights abuses. But the World Health Organization’s new chief is making the longtime African leader a “goodwill ambassador.”

With Mugabe on hand, WHO director-general Tedros Ghebreyesus told a conference in Uruguay this week on non-communicable diseases that he’d agreed to be a “goodwill ambassador” on the issue.

Tedros, an Ethiopian who became WHO’s first African director-general this year, said Mugabe could use the role “to influence his peers in his region.”

A WHO spokeswoman confirmed the comments to The Associated Press on Friday.

Erm:

Life expectancy in Zimbabwe dropped from 61 in 1985 to 44 in 2003, according to World Bank figures, largely down to the nation’s crumbling economy and widespread poverty. Life expectancy has since recovered – but is still not as high as it was in the mid-1980s

Jeebus, someone, please, get him an economics textbook!

Abolish NI over time and replace it with a progressive consumption tax charged on the flows through a person’s bank account (having allowed for transfers between related accounts). This is green taxation and it does not penalise jobs, which is the last thing we need to do as we head for automation. Tinkering with NIC is pointless. We need a financial transactions tax for a new era.

Consumption taxes and transactions taxes are conceptually different things.

Sheesh. Don’t forget he is employed by the British State to teach economics and I am not.

The Sage of Ely tackles venture capitalism

Google sticks money into Lyft at a $10 billion valuation:

First, this is not a transportation company. Lyft, like Uber, does not run cabs. It runs a taxi rank.

Second, no taxi rank has ever been worth $10 billion.

And if someone thinks it is then they have four things at the forefront of their minds.

The first is driving the competition out of the market.

The second is then screwing the consumer.

The third is screwing their staff.

And the fourth is then presenting the regulator with a fait accompli as they’re hoping all other games will have been driven out of town and that way they’ll earn hyper rents from their rank activities.

That’s how you can make a fortune from a cab booking service.

And it stinks.

As to no cab rank ever being worth $10 billion, well, someone’s just paid at that valuation so it is worth that.

But rather more, should it be worth that much? Lyft operates in 300 US cities. No, dunno what the cab ranks in 300 US cities are worth. A lot though I would think. And Uber seems to be 30% more efficient than traditional taxis. Yes, that’s the Alan Krueger. What’s the value of a 30% efficiency gain in the taxi markets of 300 US cities?

It’s not bupkiss, is it?

Erm, what?

But energy retail is not enough – the energy company must immediately and progressively begin to bring energy generation into public hands, too, so we have an integrated system. All those windfarms should belong to us, and be making us wealthy. They are close to being a public monopoly.

There are many different windfarms owned by many different people therefore they are close to being a public monopoly?

The Senior Lecturer still doesn’t understand tax incidence

The FT issued an email last night saying:

Steven Mnuchin warns of market fall without tax cuts.

The US Treasury secretary warned Congress that US stock markets will shed a “significant amount” of their recent gains if lawmakers do not pass tax reform.

On the eve of a critical Senate vote aimed at pushing tax-cutting plans forward, Mr Mnuchin told Politico in a podcast that there was “no question that the rally in the stock market has baked into it reasonably high expectations of us getting tax cuts and tax reform”. US equities would “go up higher” if the reform plans, which include a reduction in the corporate tax rate, were passed.

This is interesting for three reasons. First, it says quite explicitly that the proposed tax reforms are meant to cut the tax rates of big business. Second, it quite clearly states that the corporate tax rate changes share prices, in this case by driving them sharply upward. And third, as a result it states quite clearly that the US Treasury thinks the incidence of corporation tax is on shareholders, who are already capitalising the value of the gains they are to be given.

….
But let’s stop debate on who benefits: Mnuchin has stated what we all already knew, which is that this is for the undisputed benefit of the owners of capital on whom almost all the incidence of corporation tax indisputably falls. That debate is, I think, now closed.

At which point we’ve got to conclude that idiot is still idiot. Because everyone does agrees that in the first stage the incidence of the corporate ta is upon the holders of capital. But that’s the point, that’s the start of our analysis.

What happens when you tax something? You get less of it. So what happens when we tax investment, or saving? We get less of it. And as even Spudda will agree it is indeed investment over time which makes us all richer over time. So, the more we tax investment, the less there will be, the less rich we all are over time.

That shareholders bear the incidence of the corporate income tax in the first iteration is well known and is so well known that it’s the start of our analysis, not the end as the Senior Lecturer at Islington Technical College seems to think.

That’s interesting

Popular investor Marc Faber, author of the “Gloom Boom & Doom Report” newsletter, wrote in his most recent edition that he was glad the U.S. had been founded and ruled by white people rather than black people.
“And thank God white people populated America, and not the blacks. Otherwise, the US would look like Zimbabwe, which it might look like one day anyway, but at least America enjoyed 200 years in the economic and political sun under a white majority,” Faber wrote in the newsletter, according to CNBC.

OK, a tad over the top perhaps, some will regard it as insulting. He’s got the right to say what he wants just as all others do to react to it. Shrug.

There was that comment by the ABC cameraman (??) watching the corpses flow over the waterfall somewhere in Africa who said along the lines of Thank God my ancestors were enslaved and shipped.

When asked if he stood by his statements, Faber shamelessly refused to back down from them, but indicated he still believed they weren’t racist.

Shamelessly?

Well, yes, there’s a point here

A family-of-four who live on a council estate in Southampton were given a taste of a different life by swapping with a millionaire couple from Wiltshire for a week.
The Leamon and the Fiddes families are participants in a new series of Channel 5’s Rich House, Poor House, which sees a family from the richest ten per cent of British society swap homes (and lives) with a family from the poorest ten per cent.

However, viewers took to Twitter to insist that Andy and Kim Leamon and their two children from Southampton who have £170 a week to spend on food, clothes and socialising after paying their mortgage and bills are certainly not struggling.

It’s not, by local standards, exactly great riches, to be sure. But that is £2,210 of disposable income per person per year. That’s on the fringes of the top 30% of all global incomes. 70% or so are poorer.

Note again, this is their disposable income, after housing, bills and taxes, the global income number is before all of that. Or, as we might also put it, this is unimaginable riches by global or historical standards.

As Dame Margaret, Lady Hodge, points out, why don’t they do it in Liechtenstein like respectable people?

Britain is the “country of choice for every kleptocrat, crook and despot in the world”, a Labour MP has said following revelations by the Guardian and media partners of a massive money-laundering scheme run by the government of Azerbaijan.

Margaret Hodge said the UK thought itself to be a “country of integrity, respectability and trustworthiness”. However, recent money-laundering scandals featuring Azerbaijan, Russia and the offshore industry showed this self-belief to be “flawed”, she told parliament.

Hodge – a former chair of the public accounts committee and an outspoken critic of corporate tax avoidance – was speaking in an adjournment debate on Thursday. She told MPs that UK corporate structures were being used for a wide range of crimes, including tax evasion and bribery.

They’ll be after My Fair Lady next

A theatre company has been embroiled in a gentrification row after it announced a series of £55-a-head “immersive” Cockney-themed dinner parties to be held in a traditionally working-class area.

The firm apologised after it released promotional material that showed a cast of tracksuited characters, including a pregnant woman drinking and smoking and a tattooed man striking an aggressive pose, in a pub.

The Cockney’tivity Christmas dinners are scheduled to take place across three weeks in December in an “authentic Hackney boozer” in London’s East End. Attendees will get a three course meal and a “Cockney Christmas story” from the actors.

The company, Zebedee Productions, said it would be a “proper celebration of east London culture” and said many of the people involved had links to the East End. But critics pointed out the entry fee meant that, while local working-class people were being sent up, it was unlikely they would be able to afford to be in on the joke.

“The local people, they just get laughed at, they get joked at and there’s no respect there,” said Joe Ellis, who was born and grew up in the East End.

Josh Clarke, who helped run a campaign to gain asset of community value status for a local pub to save it from closure, said: “These establishments want to keep a certain kind of person out. There’s no one involved in that who said: ‘Let’s respect Cockney culture.’”

The traditional Cockney response to someone managing to get punters to pay £55 pounds for a £10 meal would be along the lines of giggling over that first half and half* and by the time the second was easing down formulating a plan to similarly fleece the mugs.

*Light and lager when I was serving bar out in Stratford, light and bitter by then being for the older crowd.

Perhaps Mr BiS, our expert on these matters, would care to comment?

A very fun piece of wibble

Chad Parkhill visited Italy as a guest of Gruppo Campari

So, journo gets a freebie. And they are fun freebies, a wander around Italy, decent meals, nice hotels, visits to distillers of amari, wondrous actually. The quid pro quo being that you’ve then got to get a piece or two describing the underlying subject, amari, into the papers.

*Headscratch, headscratch.*

How, The Guardian, hmm, what angle?

What kind of carbon footprint, I wonder, is contained in the average bottle of Averna or Bràulio? And how could anyone ever know, given that the recipe is such a closely guarded secret that neither Fici nor Peloni can answer any of my questions about which other parts of the world provided the base ingredients for their amari? (Gruppo Campari responds to my queries about the sustainability of their products with general comments about how the group has “always invested in the quality of its products, the health and safety of its workers and in safeguarding the environment”.)

Climate change! A week in Italy and a decent Guardian fee are secured!

Yes, this is how newspapers work.

Or as I put it over there:

Just to let others know how this works.

So, Campari organises a PR trip. Oooh, something like a week long all expenses paid trip around Italy for an Oz based journalist. Nice lunches and dinners, decent hotels, go see one of our amari producers in Sicily, another at the other end of the country, in the Alps, you know, a very fine press jolly.

The quid pro quo being, get our products into the newspapers. Please. No pressure, of course. But we’ll be running another jolly about, say, vermouth, next year as well.

No, really, this is how it works. One Spanish city once invited me to an all expenses paid (only within Europe to be sure) three day jolly for an announcement about their installation of solar powered LED street lights. Woo Hoo!

Really, these things are the journalistic equivalent of “What I did on my holidays” essay we all faced in the first week of September at school.

The trick is to find something to say about the product so as to get a placement in a paper. Thus the climate change angle. You know, whatever gains the space because there are more jollies next year.

More on David Lammy’s Oxbridge numbers

Only one in four Cambridge colleges made offers to black British students in every year between 2010 and 2015. Of those, many made just one or two offers apiece. And each year over that period, a quarter of colleges failed to make any offers at all to black British applicants.

Hmm, OK, well, is this bad or is it statistical normality?

During this period, an average of 378 black students per year got 3 A grades or better at A-levels.

It’s not quite true that 3 A grades is the starting point for Oxbridge access because they will indeed take the potential not just the achievement to date into account. But, still, a useful starting point.

There are 38 colleges at Oxford, 31 at Cambridge (close enough anyway). Given that not everyone with that sort of level of academic achievement actually tries to enter Oxbridge then what do we think should be the offer rate to these Black Britons? It’s most certainly not 4 offers per college per year, is it? Or 6, or whatever 400 divided by 70 is.

Given the small numbers the stats are going to be weird anyway, but what is the number of total offers made by all colleges, related to the total number of people who get 3 A grades? Vriance from that would probably be a good starting point for us.

Lammy does however make a good point:

With this degree of disproportionately against black students, it is time to ask the question of whether there is systematic bias.

I’m certainly willing to believe there is. I am not deluded enough to think that Britain is perfect, nor its education system. But I would probably start with the thought that the bias is in the system that leads to the 400 not with the selection within it.

Or, in the vernacular, inner city schools are shite and that’s the problem. You know, the stuff already being done near exclusively by the State?

None of these excuses stand up to scrutiny. In 2011, 103 state-educated students in Sunderland got 3 A grades or better at A-levels, yet only four offers of a place at Oxbridge were made to applicants from Sunderland. Over the course of four years (2011-14 inclusive), 851 students in Wigan got 3 As or better – so why did only 29 get offered a place to study at Oxbridge in that same period?

Lammy laddie, how many applied?

And now, here, we see the game:

It is time to move away from the highly subjective college-based system and centralise admissions.

That’s what he’s really after. Move selection into a central bureaucracy and then it can be controlled in the usual SJW manner. We only need to look at HR departments in large companies to see how that works out.

Not the most convincing of responses

ElySageProductions takes me on over MMT. By, apparently, entirely agreeing with me.

If money is not the constraint, why are we not using it to increase our productivity? This takes us full circle to Tim Worstall’s point about the relationship between money and who controls the resources. The people that are stopping us are the vested interests whose wealth (or power) will be compromised by progress. Money—democratically owned by us in the form of fiscal policy—directs resource at the microscopic level, and we have the democratic power to chose the direction. We could choose to use our most precious resource—time—to learn, to innovate, to care and to build a better life for everyone.

Money’s not the constraint, resources are. MMT doesn’t therefore solve our problems.