Eh?

After which, let me assure all Lexiteers, there will be no upsurge of socialist support in which Corbyn will be swept to power. A government fully committed to a fascist narrative, that it will only amplify when in power, will exist.

Now, as a matter of objective reality, who is the more fascist? Nige or Jezza?

On that Curajus State

As a rule, the people who became commissars were the ones who couldn’t find another job. They were not very smart but were very conceited, self important individuals, especially after they had been given a taste of power, and especially over other people. Those who were thinking about a career in the party system, who could speak loudly and authoritatively from a podium, and who curried favor with the boss, these people could climb the party ladder quickly, and high up.

The necessity for green bonds

My recent suggestion that fund managers wanted the government to issue green bonds in response to investor demand received short shrift from someone who, I think, thought he knew how markets worked. His claim was that such bond issues were not necessary, or desirable, despite my agreeing that they were.

I am, then, slightly pleased to note that the FT is firmly on my side,

Rilly?

Michael says:
May 21 2019 at 1:41 pm
These aren’t “Green” bonds as such. They are issued by the Dutch government, and repaid by the Dutch government – not through the proceeds of “Green” investments.

The only thing that makes these bonds “Green” is that the money raised will be used for environmentally friendly projects.

Which is fine, but they are just like any other government bond, where the proceeds could also be used for similar things. The only difference is in the name.

Reply
Richard Murphy says:
May 21 2019 at 2:03 pm
And the monitoring

That is quite emphatically not the same

Tee Hee.

Oh Aye?

Robin Stafford says:
May 19 2019 at 10:24 am
Not surprisingly it prompted a typical response from Tom Worst(of)all – https://continentaltelegraph.com/economy/an-entirely-hilarious-letter-to-the-guardian-on-angus-deatons-inequality-inquiry-for-the-ifs/
I thought CapX was bad but the Continental Telegraph sets an equally low bar for right wing ravings.
However it does highlight an issue for those working on inequality, that the data is open to be spun or abused selectively. As a for instance, the right are fond of saying that global poverty has come down significantly whilst ignoring that this is overwhelmingly driven by China. Similar games are played on incomes and wealth.
There’s a useful piece of work to be done to unpick all those right wing assertions

So, how about that assertion then?

Oh.

Richard Murphy says:
May 19 2019 at 11:11 am
I suspect there is no one who takes Worstall seriously and the CT is simply a front for him

I am not sure the Telegraph are amused. They got rid of him long ago

Did they?

29 Mar 2019, 10:33am
Comment: The EU is shutting out views that do not chime with the Brussels elite. We can’t leave too soon
TIM WORSTALL
PREMIUM

Oh.

Ritchie on financial markets

Richard Murphy says:
May 18 2019 at 10:24 am
These people are market makers

They are trying to create a market in such bonds

That makes then market makers

You are playing technical pedantry

It is unappealing

Tee hee. Even snigger.

Except, of course, this bloke teaches at City University….economics, too.

El Twatto fails to realise…..

One of the first campaigning documents I ever wrote was on the need to issue bonds to finance green investment. It was then good to see this in the FT this week:

It’s taken some time, but now the finance sector realises that what we need are bonds to finance a Green New Deal. So why won’t the government deliver what the market wants?

El marketo, eh?

Joshua Kendall, senior environmental, social and governance analyst

Simon Bond, director of responsible investment portfolio management

You mean fully signed on activists who have secured comfy berths ask for government to make their jobs easier?

The potato interrogates Nigel Farage

How will you deal with the Northern Ireland border?
What trade deal do you want with Europe?
How will you manage a trade deal with the USA when they say none is possible if there is a hard border in Northern Ireland?
What EU law are you going to repeal if we Brexit as you wish? Would that have also been possible under May’s deal?
Why do you want to use WTO rules when no one else in the world does?
You know that the WTO is a seriously discredited organisation, don’t you? Why do you want to use its rule?
No deal is technically impossible, as I am sure you know. If we say there are no rules the reality is everyone else will impose their rules on us. How are you going to manage that?
How are you going to manage the disruption of a Hard Brexit?
How many people will die in the UK because a Hard Brexit will deny them the drugs they need?
Every credible organisation offering a Brexit forecast says it will cost UK jobs. How are you going to replace them?

As someone who used to develop policy for Nigel Farage – not with, for – perhaps I can answer some of these

1) Exactly as we do now.
2) We’ll declare unilateral free trade. What they do is up to them. For details see Patrick Minford’s worked through and costed example.
3) See 1)
4) CAP, CFP are two for starters. REACH will follow.
5) Because we don’t really care about the rules others impose upon our exports. The value of trade is in what we can import, see 2)
6) What are you talking about you silly little man?
7) See 5)
8) Same as we’ll manage any opther diusruption. As bestg can be done.
9) None, see 2)
10) Government doesn’t create jobs. Private enterprise does, within the rules set by government. As we’re going to relax much of that regulation that job creation will be easier, won’t it?

This is hilarious

Julian Richer funds a tax whingeing protest group led by Ritchie’s friend, Brooks.

Julian Richer has just sold his company using a structure that means no capital gains nor income tax liabilities on the sum received.

No, really:

Isn’t This Tax Abuse? Julian Richer Sells Richer Sounds Without Paying Capital Gains Tax

But of course this is different. Entrepreneur cashes in his life’s work without paying capital gains or income tax. Yes, that’s obviously different because reasons.

Julian Richer is entirely and absolutely obeying the law here. What’s going to be interesting though is the reaction from those tax campaigners who complain so bitterly when others do exactly the same, entirely and wholly obey the law.

Think about Arcadia, Taveta and all that for a moment. Tina, Lady Green, does not pay UK tax on the dividends she receives. This is loudly condemned. It has most certainly been called tax abuse, tax dodging and tax avoidance. The reason she doesn’t pay that UK tax is because she’s a foreigner living in a foreign country.

But this is different because, right? Even, tax abuse and tax compliance all depend upon who is doing it?

Politicians should have much more power

And this is the malaise within politics. People with ambition, but without a shred of wisdom, nor still a philosophy or a sense of public duty to direct it, now populate many of our political parties, and all of those on the right. But pure self-interest and political aspiration are poor bedfellows. They never combine to create either good policy or sound government because they are compromised from the start by the inherent conflict within them.

Both statements from the same bloke. Amazing what you can believe if you set your mind to it, eh?

Ritchie’s new project

Anyone who did so refer outside the in-group would quickly find out that the acronym is less than fortunate. Our colonial friends use the can as a synonym for prison. And many varieties of English use the can as a synonym for the toilet.

Hmm, perhaps not so inappropriate. The Corporate Accountability Network, where one goes to defecate.

Amazingly, the Senior Lecturer doesn’t understand Coase on the Firm

We’d all rather hope that someone trying to teach economics in he UK is up to date with one of the foundational pieces of the subject. Ronald Coase on why the firm exists.

The essential answer being that there are costs – and benefits – to doing everything within one organisation, costs and benefits to contracting out functions. The line we draw around the firm depends upon the specific costs and benefits of the specific activity at that specific time.

Ford uses steel. For uses headlights. Ford uses seat covers. Ford uses engines. Which of the four should Ford be making inside the firm of Ford and which should is subcontract out? Where should the line be between Ford and not-Ford?

Depends really. As far as I know the first is definitely subbed out, the second is too. The third didn’t used to be at least – there was a strike by the lady seat cover makers which is a milestone in equal pay gubbins. And engines are made by Ford.

This is the background. So, the Senior Lecturer:

The fact is that outsourced models only save by doing one of three things. Those are providing a worse service; cutting staff costs; or reducing commitment to service renewal (R&D, training, etc). All are fatal to the quality of outcomes over anything but the very short  term. And that’s precisely why this model has to come to an end.

Sigh.

Presumably the NHS is now going to start making its own mops – hey, hospital floors must be cleaned and contracting out doesn’t work. The sausages in the canteens will be made by the NHS. Because contracting out doesn’t work.

Yes, you’re right, Ritchie’s an idiot.

The question about outsourcing is only when is it better and when isn’t it? And it really was Coase who pointed out the basics here.

Well, yes, obviously

The FT has noted this morning just how out of line US banks are on fossil fuel investment when compared with other banks and the fact that fossil fuels are now known to be threatening the future of life on earth (and I stress: that’s a fact, not an opinion).

The US is the only place that allows fracking – for oil as well as gas – on a large scale. It’s also one of the few places that has been reducing emissions in recent years.

Funny that, isn’t it? That the banks in a country finance the activity in that country?

Rilly?

we should not be using shares as a savings medium, for which task they are wholly unsuited precisely because capitalism has a short term view,

Anyone care to offer an organisation or section of society with a longer term view than a capitalist company?

No, not one that should, not one that might, but one that does?

An Oxbridge college maybe? A Livery Company?

And?

Jeez, this is Spud level

Scotland would be forced to dump the pound for its own free-floating currency immediately after independence, the country’s most eminent macroeconomist has warned as he denounced the “poor” plans produced by both sides of an SNP battle over the issue.

Professor Ronald MacDonald, research professor of macroeconomics and international finance at Glasgow University’s Adam Smith Business School, said a separate currency not linked to sterling would be needed to pay off the country’s £16 billion balance of payments deficit.

It’s the reporting not the economist though. You don’t pay off balance of payments deficits. In fact, you can’t have balance of payments deficits because the balance of payments always balances.

I assume what is meant is that there will be a trade deficit and if in sterling then a certain difficulty in gaining the incoming investment to finance it. The solution to which is a decline in the currency so that investing looks better and imports are more expensive/exports cheaper. Which is why you need your own currency.

But you know, newspaper reports of economics….

Tee Hee

Here’s another idea: we need a higher rate of VAT on products that are bought to indicate social status, and which contribute to global warming.

What am I talking about? Let’s start with cars with an engine capacity above 1.6 litres (and maybe I am being generous when suggesting that). Or which cost, say, more than £20,000 at present. I cannot see why any such vehicle is necessary. They are, I suggest, just conspicuous consumption, and as a result are not designed to last, which is precisely why they need to be taxed more to save the environment.

A Rolls Royce lasts less time than an Austin Allegro then, eh?

After which there are phones costing more than £300, which are nothing more than jewellery, but which are deeply wasteful by encouraging massive environmental waste as they are simply fashion items, designed to be replaced at a rapid rate.

And entirely missing the point of Veblen Goods. Sure, they indicate social status. Make them more expensive and they become even more of a Veblen Good. Twat.

Umm, you what?

I believe that taxes can assist the transformation to the economy and society that we need if we are to avoid catastrophic environmental change. That is why I have been writing about what I am calling Tax to Save the Environment (TASTE). I stress, I do not think tax is the only way to achieve this: regulation will usually be required as well, but tax has powerful signalling capacity both economically and socially, and I think that is vital at present. I do therefore offer another suggested tax now.

In 2015 I suggest a Carbon Usage Tax (or CUT) in my book The Joy of Tax. I explained this in my White Paper on Scottish Taxation for Common Weal in 2017 as follows:

OK, tax something you get less of it. With you so far.

And the tax proposed is a bank account transactions one. Idiot idea of course.

But we are here talking about a tax to discourage carbon emissions through consumption. Again, fair enough. Then as a justification we get:

It would capture non-consumption expenditure, which is very largely not liable to VAT and other indirect taxes at present;

But we’re trying to tax the consumption which leads to carbon emissions. The very power of the tax is that it only taxes consumption which leads to carbon emissions. Thus incentivising people away from such, that is in fact the power of such taxation.

So, which idiot decides to extend such a tax to non-consumption?

Ah, yes, it’s one of Spudda’s ideas, isn’t it? Expecting logic through 5 paragraphs is hoping for too much.

Interestingly, what is it that we call non-consumption expenditure? Largely, savings. So, he wants to tax savings in order to reduce consumption.

Jeez, and to think that he’s employed to teach economics.

Even By Ritchie’s standards this is impressive

I am impressed by the courage of those who have taken direct action in the cause of the Extinction Rebellion. They have gone beyond talk, as the crisis facing our world requires.

But, that said, I have never been inclined to take direct action: it’s just not the way I want to change the world. I am not saying it’s wrong: far from it in fact. I think it works. But I have always felt that there have been other things for me to do. And what that has meant in the current situation is that I have had to ask myself what I might do. My answer is to suggest that we need to talk about Tax to Save The Environment (TASTE).

I have long argued that the primary purpose of tax is not to raise revenue. I wrote a whole book – The Joy of Tax – on that theme. I unashamedly recommend reading it. In it I suggested that there were six reasons for tax:

Reclaiming the money the government has spent into the economy.
Ratifying the value of money.
Reorganising the economy.
Redistributing income and wealth within the economy.
Repricing goods and services.
Raising representation in a democracy.
These are explained in more detail here.

My argument when suggesting Tax to Save The Environment falls into categories 3, 4 and 5, although with a focus on the last, and definite implications for the other groups. I stress: the aim is not to raise money. It is to use tax to change the way out society works.

And that is what is required now: a whole change to the way our society works. Since in my opinion tax is one of the most powerful tools that we have to change the way that society works, for better or worse, my contribution will be to suggest ways that tax can deliver change for the better to help save our plant. That’s what TASTE will be all about.

An example of which is:

It’s sometimes thought that tax is complex. And sometimes it is. And that’s why many people misunderstand a lot about taxation. But it does not always need to be so.

It’s my suggestion that we need to use Tax to Save the Environment (TASTE). Let me start with a simple example of something we could do now.

We now know that there is a massive problem with methane created by cattle, sheep and (to a somewhat lesser degree) goats. There is a way to address this issue in the UK. We could put VAT on all food the products that are created from them. We can do this now. VAT on food is allowed under EU law. And it would work: it would shift pricing and so reorientate people towards other products, of which there are many that are available.

I know this would be controversial: I am aware that the big problem would be around milk. The rate of tax on milk might then be open to discussion. On everything else standard rate VAT should be applied now, in my opinion.

And to ensure hardship does not result revenue raised must be matched by the allocation of additional funds to benefits.

This is simple, possible, and achievable now.

It’s the first Tax to Save The Environment. There will be more.

Actual economists have thought through this very problem. Last year’s Nobel Laureate, William Nordhaus, for example. Nick Stern in his review. In fact, damn near every economist who has considered the matter. And the vast majority of other economists agree with them. Assume that the science is right the answer is a carbon tax. What is Ritchie suggesting? Effectively, a carbon tax.

What has Ritchie said in the past?

And carbon pricing does not work. Marco Fante explains why here. The essence is simple though: renewables are cheap enough to ensure that carbon pricing is itself priced out of the market.

So the economists – or rather, the neoliberal economists that the Economist thinks to be the holders of that tile – have lost.

Apparently a carbon tax invented by Ritchie works and a carbon tax considered by every other economist does not. That’s impressive, even by the standards of the Senior Lecturer.

Who knows, maybe it’s just that he’s so damn ignorant he doesn’t know that implicit in all carbon tax proposals is that it’s levied on CO2-e, not actually upon carbon?

No, not bitter about vermine

Roger Stokes says:
April 18 2019 at 8:22 am
… John McDonnell has created the same rod for his own back with Labour’s “Fiscal Credibility” rules… they appear to believe Thatcher’s dictum that…
“It is your tax which pays for government spending. The government have no money of their own. There is only tax payers money”… yet they surely aren’t stupid enough to not understand that every time the government spends it creates money and every time it taxes it destroys it…

Reply
Richard Murphy says:
April 18 2019 at 8:23 am
Don’t you believe they’re not that stupid…..

Reply

That incorrect decision still stings, doesn’t it?