Not that it makes any damn difference of course

Could Boris make stamp duty payable by the seller, not the buyer?

Not to the incidence of the tax.

Although charging the tax to the people who demonstrably have a large cheque in their hands seems reasonable enough.

So, why wasn’t it done before? Because the tax was actually a charge for the registration of the new ownership of the property. Only once it became a tax, rather than a simple charge, id it even become an issue.

An unfortunate truth about South Africa

Ask the average South African to explain the malaise of their country’s economy and they are likely to point to one of the most gripping dramas ever broadcast on local television.

Day after day for the best part of a year, a judicial inquiry into state corruption has heard jaw-dropping testimony about the scale of the rot that spread through South African politics under Jacob Zuma, the president until last year.

Witnesses have detailed the ease with which companies and powerful individuals corrupted the system to win state contracts and plunder big national champions from South African Airways to Eskom, the troubled state electricity monopoly.

There was a grouping – a groupuscule perhaps – which worried about the transfer of power in South Africa. Not a great dela, as it was far away and all that, knowing nothing of it. I’d count myself as being part of that grouping as well – one of the reasons it might be better described as a groupuscule as I rarely have opinions that are widely enough shared to constitute a group.

The concern wasn’t about the transfer of power to blacks. Or to the democratic majority. It was about which group of blacks we thought likely to gain power. Not specifically even Zuma but that someone like him and his compadres would.

Turns out we weren’t wrong either.

So Frances Coppolla doesn’t understand QE either then

The thesis behind the book is that, although quantitative easing since the Great Financial Crisis of 2007/8 has failed, the cause of failure was its implementation, not the policy itself. Quantitative easing was a policy proposed by Milton Friedman and Ann Schwartz back in 1963 as a way to counter a financial depression, or “Great Contraction” as they termed it. The idea was to radically increase the money supply, providing consumers with money to resuscitate the economy. Five years later Friedman used the metaphor of a helicopter dropping money over communities to achieve this goal. He emphasised that it had to be a one-off event to discourage people from saving it, thinking there was more to come.

Following the Great Financial Crisis, central banks worldwide initiated Friedman’s policy of helicopter money, dispensing trillions of dollars. However, as Coppola explains, this massive use of quantitative easing, or the “Great Experiment”, failed because Friedman’s “‘helicopter drop” came to mean not putting money into people’s pockets, but rather casting money blindly onto international financial markets without regard to where it would end up. The desired result did not happen; instead we find ourselves in the “Long Stagnation”.

So where did the helicopter money go after it was distributed to the financial sector and corporations? Much of it was invested in emerging markets. Corporations used it to buy back shares to increase the price of their stock and bonds without increasing productive activity, or as Coppola writes “Wall Street is awash with money, while Main Street dies of thirst”. This explains the asset bubbles and the low unemployment rate in some nations, while wages remain stagnant.

Friedman starts from MV = PQ.

If V falls then we’re going to have a recession possibly plus deflation – the two possibly being a depression.

So, if V falls increase M.

Did V fall? Yes. Did we increase M? Yes. Did we have a depression? No. Did we have deflation? No. In fact, once we started QE, the recession stopped.

QED, QE worked.

Helicopter money is something else, something more, to be done only if QE fails.


The argument that the new money must flow through to the real economy isn’t QE, that’s straight Keynes. Let’s go spend lots of money on stuff. And sure, that can work. We can have lovely arguments about whether it works better etc, but it’s a well known thing.

And we’re really not going to do $4 trillion of it, as the Fed did with QE. ‘Coz it’s a different thing, see, subject to different constraints.

Coppola concludes:

“There must be zero tolerance of polices that exacerbate inequality and hurt the poor. Public investment banks and sovereign wealth funds must be created in every nation.Laws and rules forbidding cooperation between governments and central banks need to be removed, especially in view of the climate crisis.”

And that’s just being stupid. The reason we have central bank independence is so that the politicians don’t control everything.

The slavery reparations thing

They’re all talking about it over there. And one of their pieces of evidence is the racial wealth gap. It being entirely true that familial wealth is lower among blacks than whites. The implication being that this is a legacy of that slavery – people haven’t accumulated assets over the 150 years.

This is just a thought. Low income people have fewer assets than higher income people. The marginal propensity to save, the inverse, the marginal propensity to consume. So, if we’ve a group that generally has lower incomes then we’d expect them to have lower wealth.

Seems obvious enough.

We also know that black Americans generally – or on average if you prefer – have lower incomes than whites. Which leads to a thought.

Can we explain the lower household wealth entirely by the income gap? That is, is it all current, not historical, in cause. OK, we can then go on to think about whether the lower incomes are historical in cause but still, bear with me.

Say, and imagine just for clarity, the following. Black income is $25k a year, white $50k. Wealth levels are different. But, is that black wealth level different from that of whites on $25k a year? Again, have to be careful we’re not including whites on $25k a year in dividends and interest income alone but, you grasp the point?

Is there actually any difference in wealth levels once we correct for income?

Do blacks, average income $25k, have the same wealth levels as whites on $25k?

The importance here being that if this is true then it’s the current system that needs to be changed. It’s nothing historical in the sense of capital accumulation over time.

It’s take a much better economist than I to work this out but that is a question I’d love to see the answer to. If we compare the race based wealth distribution to one stripped of race and instead measured as compared to income, does our race effect simply vanish?

My intuition is that it will absolutely and certainly be a part of it. But whether it’s the majority, or even all of it, dunno.

I was asked a fun question this morning

Has there ever been someone versed in Classical Liberal economics in the Commons? Bastiat was in the the French National Assembly, after all.

Hmm. I took a bit of time to answer:

In August 1818 he bought Lord Portarlington’s seat in Parliament for £4,000

I think David Ricardo qualifies?

Cobden obviously. No, Redwood etc don’t count, we mean proper economists who are also MPs. Any more? Keith Joseph?

An oddity

I thought I’d got a little gotcha. Which depended upon Scottish median income being lower than UK median income. At least as far as I can find out this isn’t so. Scots median income is within a pound a week of UK.

Which surprises. Aren’t they a poorer country?

Despite? Because….

Housebuilders are sitting on enough land to build more than 800,000 homes, analysis by The Telegraph has found, raising new ­questions about efforts to increase the supply of new properties and reverse the decline in home ownership.

The total number of plots in the top nine housebuilders’ land banks has risen by 25pc in the past five years to around 838,000. That is despite a series of Government reviews and policies meant to increase the rate of building.

Land is an input into housebuilding. Land that can be built upon takes some years to put together, gain permission upon. The stock of inputs that take some years to organise will rise as annual production increases.


Funny that

Fuel prices have hit their highest levels for six months, with the cost of petrol set to rise by eight pence per litre in just eight weeks.

The price hike comes as 25 million cars are expected to take to the road for the Easter holidays, with railway services across the UK being heavily disrupted by improvement works.

Motoring groups last night accused fuel retailers of timing their price rises around the bank holiday weekends, and urged the Government to intervene.

Prices go up as demand does. How odd.

OK, so we can tell this idiot to bugger off then

Growing Wealth Inequality in the United States and China
That is all only in the United States; some other countries have in much worse. Bangladesh, for example, has an extremely high rate of poverty, and a federal minimum wage equal to about $60 USD per month. (Worstall) That is why so many manufacturers have factories in Bangladesh — they can pay the workers next to nothing. It is a very similar situation in many other south east Asian countries, as well as for China. China, while claiming to be have a communistic economy, has a huge problem with wealth inequality — one of the fastest growing of any country. Shanghai, China has a GDP per capita of $53,370 — only $200 less than the United States — while the Gansu province has a GDP per capita of only $7,641 — just $200 more than Guatemala.

That’s income inequality, not wealth inequality.

We need pay no more attention to this fool then. If you can’t even get the basic concepts right then you’re not worth including in the conversation, are you>

How do you get someone like this to see sense?

Traditional neoclassical economics was developed in an era when all knowledge systems essentially ignored ecological concerns. In conventional economics, value – which is created by generating profit and accumulating capital for owners and investors – is systematically extracted from the systems in which economic systems are embedded: the social and the ecological systems.

Profit and capital – they’re not the basis of neoclassical economics. Adding value is, sure. Profit being that portion of it that flows to capital owners. But every economic system is concerned with adding value because that’s the subject under discussion. How do we add value?

One for Ken perhaps

As the one person who reads here occasionally who also knows their way around the economic statistics.

So, UK capital share is about 20% of GP. Good part of that is depreciation etc. Actual payouts and returns to capital are more like about 10%. Well, an accurate figure there would be nice.

But what portion of that capital return, rather than capital share, is returns to pensions savings? There’s a trillion or two in pension pots, isn’t there? Meaning that we are getting to some appreciable percentage of GDP in those annual returns to them, no?

Not how it works, no

UK-grown cabbages, potatoes and onions all fell prey to bad growing conditions last year, triggering higher costs and less choice on supermarket shelves for consumers, according to figures gathered by the British Retail Consortium.

With fewer vegetables to sell thanks to low yields, producers have charged more.

With fewer to buy consumers have been willing to pay more….

Think it through. Any supplier is always willing to charge more. What is it that lets him?

Poor kids get free school meals

Children in low-income families suffer social exclusion and a sense of shame because they do not have enough food to eat, according to research published by the Child Poverty Action Group (CPAG).

Many do not qualify for free school meals;

As the statement is that these kids don’t get free school meals then we must conclude that “low income” means something other than “poor”.

Note what they don’t note

The world’s richest 1% holds about the same proportion of global wealth now as it did at the start of the millennium, according to Credit Suisse’s 2018 global wealth report.

Wealth inequality rose after the financial crisis in 2008 but has stopped rising in the past two years.

Wealth inequality fell during the financial crisis therefore….