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Tim Worstall

Questions in The Guardian we can answer

The David Miliband and Ed Balls leaks are meant to hurt Labour. Why now?

Because the Labour Party needs to be trampled into the dust. The buildings razed, the population sold into bondage and the land ploughed with salt. It is sweet and necessary for us to kill our enemies and to hear the lamentations of their women.

This does not apply to those who would champion the rights of the workers in our economy, nor to those who would have a more social democratic polity, those who desire more equality nor even those obsessed with the isms….feminism, anti-racisms, genderism and the rest.

It applies solely to the Labour Party. For deep within its primordial brain, in the recesses which produce the knee jerk reactions, the Labour Party is wrong.

They speak the speak of desiring those good things in the second para above. But all of their actual policy initiatives militate against those very things. What the UK needs is a left wing party (hey, I might still disagree with the goals) which is actually competent at proposing policies which can achieve their stated goals. And Labour just ain\’t it. And cannot be.

Err, yes, a tad over the top but there\’s a truth or two in there……

Geoffrey Lean seems not to quite get technology

Specifically, renewables tehnology, which is a pity as he\’s an environmental correspondent.

These powered swimsuits presage the growing development of “thin-film” solar panels, which can be printed like a page rather than constructed from costly silicon. This promises to provide a host of new ways of generating electricity, and bring costs crashing down.

Mark Little, global research director for the GE conglomerate, predicted recently that within five years thin-film could make solar power cheaper than electricity generated by fossil fuels or atoms.

There\’s a bit of a mix and match here.

There are two different solar PV technologies and he\’s mixed them together. \”Thin film\” is what companies like First Solar have been churning out by the acre. Cadmium Telluride in their case. The \”thin film\” bit is that you use vapour deposition (ie, heat it all up to a gas then let it condense on the substrate) to get your Cd/Te onto a sheet of glass.

This is not, you\’ll note, akin to printing.

Then there is the idea of printing solar cells. Various people have shown, experimentally, that you can do this. One even uses normal ink-jet technology to do it.

Here you using metal based inks to print your circuits on the substrate. The dried strands of your metal based ink become the circuits.

This is not \”thin film\” at all, actually it\’s quite thick film. But the supposition (as yet unproven in manufacturing scale) is that by using a cheap and well understood technology we can overcome the costs of using more of the ink.

That solar PV will be cheaper than fossil derived, at the point of production/consumption, absent the costs of batteries or a storage system, I regard as a completely unremarkable achievement. Five years looks a little soon but I can believe even that.

Why would I believe such? Well, remember that Bjorn Lomborg that all the Greens like to shout at? He predicted 12 years ago that solar PV would be price competitive soon enough: 2020 I think was the date he gave. That he was right early is of course why the Greens all like to shout at him.

For if solar PV was always going to become price competitive then all the rest of the Green hysteria has been a waste. We\’ll wean ourselves off fossil fuels when we have a cheaper alternative, quite naturally, without subsidies or rules or regulations. And if that\’s true then we don\’t actually need the rules and regulations and what point in being a Green if you can\’t tell everyone what to do?

 

Interesting detail

The other day, I heard that a top executive of one of our biggest power companies has had an emergency generator installed in his large house. One must assume that he knows something we don\’t.

Maybe he can do the sums: offshore wind just isn\’t going to be built fast enough to take over from the coal fired stations that will have to close?

Nick Shaxson\’s approach to evidence

He titles his piece:

The IMF says tax havens are a danger to society

Then says:

The IMF also asserts, without presenting any evidence, that tax havens and the ‘tax competition’ between jurisdictions that they lead, make for more efficient resource allocation in global markets.

The title and the body are somewhat different, no?

For the IMF is certainly not going to be saying that efficient resource allocation is a danger to society, is it now?

Friday afternoon fun with Compass (retweet please!)

Compass, that lefty campaigning organisation that charges a subscription fee so that Neal Lawson can earn a hefty wedge, is asking people what is their definition of the Good Society.

Here.

And seeing as it\’s friday, that afternoon when we\’re all looking for something to do to while away the hours until the pub, why not actually go and tell them what you think the Good Society is?

My glimpse of the good society:

That I can walk down near any street in the country and get a decent cup of coffee from a myriad of willing suppliers. All of them competing as best they can to please me in the hope of thereby making a profit.

And what the good society means to me:

One that remembers that Smith was right: \”It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest\”

This could be a fun game couldn\’t it? So, Tweet this around, blog it, direct people to it.

And do let us know here what you tell them.

 

Neil Clark really is an ass

It\’s extremely unlikely that such a song would be released in the uber-capitalist Britain of today, let alone get to No 1. But in the progressive, left-leaning mid-1970s, it was always likely to be a hit.

Thanks to the glories of the \”market economy\”, many things which were free, or at least very cheap, 35 years ago, cost a small fortune today. In 1976 you didn\’t have to book up months in advance to find a reasonable train fare from London to Liverpool, you just turned up on the day. Utility bills were not something to be feared in the days when publicly-owned bodies and not profit-hungry private companies provided your electricity, gas and water.

Hmm.

From the comments there:

I don\’t know about Liverpool but in 1976 it cost £5 to go from London to Bristol on the newly introduced Intercity 125–the equivalent of £34.55 in today\’s money (according to This is Money\’s infltion calculator).

You can go there today (and by today I mean this very day, Friday 10th of June) for £34, or £28 if you want to specify which train you\’ll be on.

If you\’re prepared to book \”months in advance\” you can do it for a tenner

(Note that it will be lower than that as a portion of average wages.)

And from Hansard:

Gas and Electricity Prices
HC Deb 22 March 1976 vol 908 cc11-3 11

§ 9. Mr. Peter Morrison

asked the Secretary of State for Energy what is the percentage increase in the cost of electricity since 28th February 1974.

§ Mr. Eadie

I am informed by the Electricity Council that it is about 86 per cent. overall in England and Wales.

What worries is that this ignorant buffoon, Clark, is actually a tutor in economics.

Ritchieism of the day from @richardjmurphy

Quite gorgeous:

A 50% tax rate is not only a temporary measure to raising revenue, it is an essential part of a just taxation system.

And I am well aware that the likes of the Digby Jones argue that if we have such a tax rate talent will lead this country. Let’s be clear about this though: that’s not talent that’s leaving, that is greed that is leaving.

Those who would leave this country in pursuit of monetary gain have such distorted value systems that their prospect of generating value for the rest of us is remote in the extreme. They make money by trading, by exploiting markets, by taking risk from which they receive the upside and we bear the downside, and they do so by cheating, even if they can defend it legally. We are best off without them.

The reality is real entrepreneurs are the people who have a genuine passion to make goods and  to supply services that meet people’s needs. They are not put off by taxation:  real entrepreneurs are motivated by the desire to do something well that fulfils a real demand from their fellow human beings.

This from the man who describes himself as an entrepreneur for having brought us the European packaging for Trivial Pursuit via the well known corporate tax haven of Ireland.

Ho hum.

Yet more WHO bollocks

The proportion of disabled people is rising and now represents 1 billion people – 15% of the global population – according to the first official global report on disability.

You what?

One in seven of the entire human race is disabled?

To use crude and hateful language, 15% of everyone is lame, dumb, blind, deaf, halt or a limbless spastic?

That would indeed be the reading that most would give to the word \”disabled\”.

But that isn\’t quite what the WHO is actually counting. No, of course it isn\’t.

Tom Shakespeare, one of the authors of the World Report on Disability, said: \”The clear message from the report is that there is no country that has got it right. Italy is a world leader in terms of inclusive education and de-institutionalisation of people with mental health problems but in other areas it is not.

Well that\’s one way of boosting the numbers, add in the nutters. If, as so many of us do, you\’ve temporarily flipped your lid you\’re now \”disabled\” under this definition.

Dr Margaret Chan, director general of the WHO, said disability was part of the human condition. \”Almost every one of us will be permanently or temporarily disabled at some point in life.

You what? Has someone mistranslated Dr. Heinz Kiosk for this lady? \”We are all disabled!\”?

An ageing population and an increase in chronic health conditions, such as cardiovascular and respiratory diseases, mean the proportion has grown from an estimated 10% in the 1970s.

Ahhh, there it is. \”Cardiovascular and respiratory diseases\”. They mean old peeps with heart and lung problems are \”disabled\”. That week spent on your deathbed is a \”disability\”.

They seem to have got confused between \”disabled\” and \”dying\”.

But then if they didn\’t wildly inflate the numbers who would pay any attention to them?

Note the moving of the goalposts

Solar panel costs have come down dramatically: the industry expects that, even in the UK, solar power will be comparable to offshore wind energy by 2015.

Ten days ago Greenpeace told us that solar PV would be grid comparable by 2015.

That at the point of use solar would be the same price as coal derived (still one of the cheapest options, which is why we have this whole problem in the first place) \’leccie.

Now we\’re being told that it will be comparable to offshore wind: OK, sure, that\’s \’leccie that goes into the grid but it\’s twice or more the price than coal or gas produced.

Nice moving of the goalposts, don\’t you think?

Cath Elliott discovers that the internet is actually made up of people

Not to be nasty or anything but you\’d think that a woman who has made it to middle age would have worked this out by now:

Of course there have been some cynical comments in among all the messages of support, but the overwhelming response has been wonderful, and has shown the internet at its very best. It\’s shown that while sometimes the online world really can be a cesspit, it can also be a truly inspiring place, with people coming together from all over, united in a desire to actually do something good.

And it\’s this positive side of the internet that keeps me coming back, that means no matter how much abuse I receive from the trolls and the knuckle draggers, I\’m not ready to give up on the online world just yet. Because in my albeit quite limited experience, the good far outweighs the bad, and for every example of internet abuse there are a dozen more examples of where the internet has come into its own.

Well yes, obviously.

For the people at the other end of the intertubes are indeed just people. The usual mixture, the occasional saint, a few more devils and the vast majority containing the usual mixture of the two, that mixture varying with personal mood, blood sugar, time of the day, month, who\’s been laid recently, by whom, and the length of time since the last really good shit.

You know, humanity?

Peter Wilby is confused: ho hum

It\’s quite wonderful how the narrative can change really, isn\’t it?

There we all were, only a couple of years back, being lectured that stock market capitalism was a bad thing.

Lots of small shareholders, supine institutions, it just left management to do their own thing. What we really needed was a good dose of that old fashioned stuff.

Shareholders who had a significant long term stake in a company. Who would do it right, keep the management in line and look to the long term, not just the next day\’s trades on the exchanges.

What does Southern Cross, the care home provider at risk of bankruptcy, have in common with Manchester United, Boots, Woolworths, the AA, Debenhams, Thames Water, MG Rover, Reader\’s Digest, National Car Parks, and Birds Eye? The answer is that all of them are or have been owned, partially or wholly, by private equity funds. Maybe you knew that, and also that private equity takes over firms and often does bad things – otherwise known as \”efficiencies\” – such as sacking workers, cutting wages, selling off assets, walking away from pension liabilities and screwing suppliers. But exactly what private equity is, why it does bad things and why it is so important are not widely understood. Business journalists rarely explain it, presumably on the same principle that sports journalists don\’t explain leg-before-wicket or offside.

Now engaged shareholders, those with a significant stake in the companies, those influencing and keeping in line the management. They\’re wrong.

Ho hum.

Ring fencing of bank deposits

While it sounds like a good enough idea I\’m not so sure.

The practise of using capital from NatWest, which is predominantly a retail bank, to fund other parts of the group has soared under the Mr Hester\’s leadership of RBS.

In 2008, when Sir Fred Goodwin was chief executive of RBS, Natwest lent £19.6bn to the holding company, according to figure\’s in the high-street bank\’s report and accounts.

The filings show that this figure leapt to £78.3bn in 2009, the year Mr Hester took over from Sir Fred as group chief executive.

Hmmmm.

RBS confirmed the rise in the transfer of funds from NatWest to the rest of the group. However, it said the funds were not being channelled solely into RBS\’s investment banking division. The bank said the rise was in part due to a £24bn increase in retail deposits at NatWest between 2008 and 2010. It added there had been a significant drop in funds leaving NatWest to go to NatWest Home Loans.

In 2008 £45bn was transferred from the bank to its separate home loans subsidiary. Last year this was reduced to just £8bn. Taken into account, NatWest\’s net lending to the rest of the group has gone from £48.9bn in 2008 to £79.2bn last year.

At one end we\’ve the simpletons. But of course retail deposits which have a government guarantee (which deposits up to what, £50k? £90k? now do) should not be used to fund casino banking.

Well, yes, but what is this casino banking which shouldn\’t be funded? Where\’s the dividing line?

We could say that retail deposits can only be lent to retail customers. But that\’s not actually what we want banks to do at all: we don\’t want them to just recycle personal deposits into personal loans. We\’d really rather like they do more than that: that maturity transformation trick for example of transforming short term deposits from individuals into long term loans, mortgages for example.

But as we see above, that means moving money across the bank, from the retail deposit side to the mortgage side. So we\’ve already broken a strict form of ring fencing. And it\’s worth noting that even this relaxation of the strictest form wouldn\’t have stopped the recent crisis. It was mortgages which brought down the US banking system, nothing else.

No, it wasn\’t derivatives, high frequency trading (CDOs were rarely traded, that was one of the problems with them), commodities, currencies or any of that lot. It was lending to people to buy houses that brought it all down.

But OK, we agree that we do want banks to be doing that plain vanilla stuff, just like the Building Societies. Turning retail deposits into mortgages.

We\’d also rather like them to be funding companies. At least we\’ve got the entire chorus of simpletons insisting that banks should be lending more to companies. So presumably commercial loans are just fine, can be funded from those retail deposits.

So where\’s the dividing line here between allowable and casino banking? Smaller firms generally do get direct loans. Larger companies either get syndicated loans (which are done by investment banks) or they raise money from bonds and commercial paper (ish ish, short term bonds). This is again done by the investment bank parts of banks.

Is this casino banking? Not allowed? Or is this the very point and purpose of having a banking system: to move retail deposits into funding the productive side of the economy?

And if we\’re to allow bonds and commercial paper, then on\’t we also need to allow the derivatives, the futures and options that allow banks to protect themselves from, say as an example, interest rate movements on the bonds they\’ve just bought (buying a bond is equal to extending a loan to the company that issued the bond).

How about interest rate swaps? The bank might be borrowing floating rate money (the interest rate on deposit accounts can change) or fixed rate (fixed term deposits with fixed interest rates) but desire to lend it as fixed or floating respectively. So should they be allowed to make a swap to cover that risk?

But interest rate swaps are definitely casino banking.

Or how about currencies? A UK company might get a contract to build something in Germany. Their expenses will be partly in euro as they go build, they need a loan in euro (for as a company you really do want to borrow in the currency you\’ll eventually get paid in) to fund activity until they make their stage payments. Should their bank be able to lend to them in euro against their sterling deposit base? Now we\’re into the FX market, swaps and futures and forwards there.

In one sense everyone knows what the answer is. There\’s casino banking and there\’s good wholesome banking. Those guaranteed retail deposits should only be used for the good wholesome banking, not the casino sort.

Partly this distinction fails because banks have for generations been bankrupting themselves by screwing up at that good wholesome banking anyway. The latest casualty was the Dunfermline Building Society (yes, a mutual) which quite simply fucked up over commercial mortgages (hey, lending to companies to build factories! This is good, right?). Or Northern Rock who were funding nothing but mortgages. Just with the retail deposits of other institutions rather than their own, which they got through the wholesale markets.

But over and above that, while everyone knows where the dividing line is: well, what exactly is the dividing line? What, other than \”I know it when I see it\” is the definition of casino banking?

In which I am slightly snarky about Megan McArdle

But I also don\’t think it works to say that it\’s nobody\’s business but the couple\’s whether people keep their marriage vows……..Why was it so important to call it marriage, if everything about it is entirely private?…….Society takes a greater interest in marriages than in other relationships because society, as well as the individual, has an interest in strong marriages.  Strong marriages support a strong society.  And society supports the marriage by encouraging people to do the very hard work of keeping their promises.  One of the ways in which society ensures strong marriages is by tut-tutting (or worse) at people who don\’t keep to their vows: who abandon spouses, treat them badly, or yes, violate their trust by engaging in covert sexual activity…….I think that social sanction can be very helpful in assisting us in doing important but difficult things.  Marriage is stronger if people who find out that their friends are cheating don\’t say, \”Awesome, is he hot?\” but \”How could you do that to Jason?\” Marriage is stronger if people who cheat are viewed with slight revulsion, and so are the (knowing) people who they cheat with.  Marriage is stronger when people who decide not to care for seriously ill spouses are met with an incredulous \”What the hell is wrong with you?\”, not \”Yeah, I couldn\’t handle that either.\”  Of course it would be nicer if we didn\’t need this sort of help.  But we are a flawed species……..This is, to be sure, a bit trickier in an era when people like me and Andrew accept that there can be healthy non-monagamous marriages.  Maybe, folks have suggested, she was totally okay with this!   This seems possible, but not really very likely.  I know a decent number of people in open marriages, but they are very far from the majority of the people I know.  Looking at what polls and research we have on this sort of thing, plus an unscientific survey of my friends and the women who have written me, I\’m going to go out on a limb here and speak for heterosexual married women as a class: I\’m pretty sure that most of us are not okay with our husbands sending racy photos to strangers, or engaging in phone sex with same within weeks of our wedding day.  And if she\’s totally okay with this, how come she hasn\’t said so?  ……

Well, you get the picture.

Call me old-fashioned

Nooo, that\’s not the description I would use if I were to be snarky about it.

\”Recently married\” would be.

My word, this is a surprise

A new Tax and Financial Transparency Bill to recover billions of pounds of lost tax, by forcing companies to be more transparent in their accounting, is on the agenda for debate in Parliament on Friday (10 June).

The Bill, launched by the MP Caroline Lucas in March this year,

Gosh

Tax Research UK estimate

Wow

The PCS Union today issued a statement saying they also backed the bill.

My word.

Tax Research UK is Richard Murphy, Richard Murphy works for Caroline Lucas and PCS.

Thre\’s nothing actually independent about any of this.

Geography and life expectancy

The Guardian makes the usual mistake here:

The latest life expectancy data for the UK is out and reveals a north-south divide in ages of death – of four-years.

The data from the Office for National Statistics shows that for men in the south-east of England it is 79.4 years, while in Scotland the figure is 75.4, according to the Office for National Statistics. For women the gap is slightly less: 83.3 in south-east and south-west England against 80.1 in Scotland.

Health areas with lowest life expectancy are Greater Glasgow and Clyde (which has a lower rate than Albania for men), Hartlepool, Western Isles, Liverpool and Blackburn with Darwen. The pattern in the geographic age gaps remains similar to those of previous years, showing just how stubborn social and economic inequalities remain.

There\’s a nice map with the same problem.

The problem is that these figures fail to take account of internal migration.

There are indeed people who are born, live and then die in the same house, let alone the same health care area (which these numbers are based upon).

But there are also those who move across such health care areas.

For example, a not unlikely life path is to be born somewhere or other, work as an adult in another place and then finally retire to a third area.

As the old saying went (back when we still had Indian Army Colonels) Cheltenham is where Indian Army Colonels go on retirement and Eastbourne is where their widows move to to die: forgetting why they went there when they get there.

Think of this in the American sense: would anyone at all be surprised by the idea that Florida has longer life spans than, say, Michigan? Part of which is explained by the way in which people who survive 60 odd Michigan winters move to Florida?

Or a more exact UK example: the reason that lifespans are long in Frinton Upon Sea is not that living in Frinton creates a long life span: it\’s that old people move to Frinton.

Are there social and economic inequalites? Yup, there sure are. One of them is that it is those at the higher end of those inequalities who do the moving around as they age.

Which means that this data does not show what it is purported to show: lifespans at birth for each health care region. Rather, at least in part, it shows the life span effects of the inequalities that allow or do not allow people to move from their health care region of birth.

It\’s that well known, survivorship bias, all over again.

It\’s like looking at Chelsea Pensioners and remarking that military men without wives seem to live an awfully long time. Without noting that you have to be a long lived and without a wife military man to become a Chelsea Pensioner.

Toss in short.

These people are insane

London 2012 organisers have been left with red faces over their green promises, coming under fire from the watchdog that monitors their sustainability claims after admitting defeat in a bid to make their Olympic flame the first low carbon version.

Unveiling the design of the Olympic torch to be carried by 8,000 runners, London 2012 chairman, Lord Coe, admitted that the sponsor EDF had failed to come up with a workable low-carbon solution for the flame that will travel the country from May and light the Olympic cauldron on July 27.

\”In simple terms, we didn\’t quite get there,\” he said. \”It\’s not work that is wasted, it will be transferable for future thinking about Rio and Sochi. We just ran of time and we tried very hard to do it.\” Instead, the torch will use a \”tried and tested formula\” of butane and propane.

In November 2007, amid a welter of other legacy promises attached to the Games, EDF promised to develop the first low-carbon torch as a symbol of its commitment to green energy. A spokesman for the French energy company vowed at the time: \”It\’s early days but it will happen.\”

Seriously?

Those who do worry about climate change are worrying that climate chaneg is going to make the planet near uninhabitable for both ourselves and myriads of other species.

And they spend years worrying about the emissions for a few weeks from what is essentially an overgrown cigarette lighter?

Emissions that are almost certainly less than those from just one flight bringing the IOC panjandrums into London for their sports days?

These people truly are insane.

 

Anthony Weiner

I was wondering where this sense of entitlement he seems to have came from. You know, this idea that what he does and what the little people do should not be compared?

Anthony David Weiner (pronounced /?wi?n?r/; born September 4, 1964) is the U.S. Representative for New York\’s 9th congressional district, which includes parts of southern Brooklyn and south and central Queens. Weiner is a Democrat, and has held the office since 1999. He was first elected to the U.S. House of Representatives in the 1998 mid-term elections, filling the seat previously occupied by Democrat Charles Schumer who successfully ran for the U.S. Senate that year. Weiner defeated his Republican opponent, Louis Telano, by a margin of 66 percent to 23 percent. He was re-elected handily for six additional terms, receiving 59 percent of the vote in 2010.[2] He was an unsuccessful candidate for Mayor of New York City in the 2005 election.

Previously, Weiner was a member of the New York City Council from 1992 to 1998, and an aide to former U.S. Representative Schumer from 1985 to 1991. He is a graduate of the State University of New York at Plattsburgh.

Ah, that\’s it then. He\’s a professional politician, never had a real job.

Is this drivel or dribble?

\”The scale of the land deals being struck is shocking\”, said Mittal. \”The conversion of African small farms and forests into a natural-asset-based, high-return investment strategy can drive up food prices and increase the risks of climate change.

Growing more food through investing in growing more food is going to drive up food prices how?

Dear Archbishop of Canterbury

So, you\’ve finally noticed:

Rowan Williams, the archbishop of Canterbury, has issued a broadside against the coalition government, claiming it is forcing through \”radical policies for which no one voted\”.

We live in a representative democracy.

This means that when we vote we vote for individuals. For specific people. Then we send them off to do that heavy ruling for us.

We do not vote for ideas, policies, the Prime Minister nor anything other than the name of the individual person on hte ballot paper.

It\’s entirely fine to decide that this isn\’t a good idea, that we should be voting in some other manner.

But a little odd for you at the age of 61 to only have just realised the political system you\’ve been living in all your life.