Andrew Simms really is a numpty

Yet, if the crisis of 2007-08 taught us one thing, it\’s that we need a more diverse banking system for stability, resilience and to work for people. That means more mutuals, co-ops and innovative, smaller local banks, not more risk-takers wanting to gamble unaccountably with other people\’s money.

Jeebus Simms!

Innovation equals risk taking!

\’Coz, you know, you dunno whether this new thing you\’re doing is going to work or not.

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.

 

Oxfam: Growing a Better Future

This new report of theirs fails I\’m afraid.

Growing a Better Future.

Fails on two levels.

The first will seem a little technical but it\’s summed up here:

It should be emphasized that the model does not capture potential increases in
agricultural productivity that are likely to result from increased research and
development efforts incentivized by the price increases for agricultural output.

That\’s from the supporting report which gives us their estimates of the price rises to come. So everything they\’re saying about said future prices rises ignores everything we know people will do about such future price rises.

Yes Virginia, people really do change their behaviour in the face of changing prices.

Then, when they get to looking at the impact of climate change on crop yields, we get this:

The low-productivity scenario presented here depicts a world with rapid
temperature change, high sensitivity of crops to warming, and a CO2 fertilization
effect at the lower end of published estimates.

So we\’ve the worst case in terms of temperature change, the worst case in terms of crop sensitivityand the worst case in terms of the effects of CO2 itself on crop growth.

This is known as stacking the deck in favour of your (alarmist) case. A useful thing to have done would be to have played a little with these assumptions. What about taking the mid range of each of the predicted possibilities? Or mixing and matching?

Now, no, I don\’t know, this isn\’t an area I\’m really up with (perhaps one or more of you are?) but from the dim recesses of memory aren\’t some people saying that the extra CO2 effect is likely to boost crop yields substantially?

Is it possible that by not taking the worst of every factor, but say, as seems more reasonable, the mid levels, that prices might not even rise at all?

As I say, I don\’t know, but I\’d certainly have more trust in a report that actually looked at these points rather than just presented the results of the worst.

Still on the technical points, in the main report we get something that I\’m sure most will miss. From this subsidiary one we can see a bit of it:

With the exception of South Asia, real per capita
food consumption generally expands despite the strong domestic food price
increases, since average real income per capita is projected to rise. However, the
food price increases relative to other commodities means that the share of
income that households spend on food remains higher than it would be in the
absence of these price increases.

They\’re not, note not, saying that food per capita is going to be declining. Nor are they even saying that the percentage of household income spent on food is going to rise. They\’re not even saying that a shortage of food is what is going to raise food prices. What they are in fact saying is that as people get richer, as diets change, then food prices will rise because people are getting richer and diets will change.

This is much less a report about the iniquities of the international food system and the perils of climate change than it is a report about what happens to food prices as we abolish absolute poverty and destitution.

You know, a good problem to have, not a bad one.

And now on to the second problem, the conceptual one.

There are good things in the report, yes. Absolutely biofuels are an idiocy we should stop yesterday. Bomb the idiots in Brussels to get that one sorted. Yes, clearly, rich world agricultural subsidies should have stopped last week at the latest. Hang the corpses of those we\’ve just bombed on that one. For both are bastard children of the European Union.

But then we come to their analysis of the food system itself. They appear to have cobbled together every trendy left wing nonsense without quite understanding how they interact.

Just as a minor detail they seem to think that Bunge, Cargill and ADM control 90% of food commodity trade. That\’ll surprise the likes of Louis Dreyfus (claims to be world\’s leading rice trader) and Glencore: so there\’s a bit of detail lacking in the research.

But more importantly, they claim to want the following:

1) More food stocks to be held against emergencies.

2) Better transport systems for food crops.

3) Better access to modern farming inputs in poor areas and countries.

4) Better protection agains price volatility for farmers.

OK, these are all good things to want. But then they say that there should be a financial transactions tax to pay for governments to do all of these things.

What?

It\’s the commodity traders, the commodity markets, which provide 1 through 4. It\’s the traders like Bunge, Cargill, ADM (and Glencore and Louis Dreyfus etc) who actually hold food stocks. It\’s exactly that system of commodity markets, traders, that supports the whole set of grain elevators, transport systems and the like which enable rich world farmers to get their crops to market. It is exactly and precisely the system of pre-selling a crop to such traders that allows the purchase of the inputs, such as fertiliser, better seed and so on. In fact, when you go around areas like Brazil\’s Cerrado, it\’s exactly those commodity traders who are supplying the fertiliser etc to the farmers. For they know that it increases yields and thus gives them more to sell in 6 month\’s time.

And finally, it\’s the entire system of speculative froth (yes, all those people playing in offices with money) in the futures and derivatives markets which reduces price volatility for the farmers. Indeed, it\’s that which removes the price risks from the farmers altogether, from the consumers as well, and places risk squarely where it can best be bourne, with the speculators.

And a financial transactions tax will kill that system stone dead. Recall what happened in the Swedish example. An FTT imposed, the bond futures market declines in volume by 93% and the options market diappears altogether.

So in terms of what we do about what they diagnose as the problem, they\’ve decided that in order to reduce price volatility, gain better transport, gain better access to inputs, hold stocks against emergencies, they\’re going to destroy the system which does all of those things in order to pay for doing it.

To repeat. The policy prescription from this report is that we should kill the system that already gives us the things we claim to want.

They\’re cretins at this point.

And finally finally, there\’s a moral error at the heart of their reasoning.

They consider, then explicitly reject, the large farm method for Africa. They plump instead for \”smallholders\”. They talk about efficiency, of course, but miss the most important part of that. Yes, productivity of land is important, so too is productivity of inputs. But the most important part of productivity, the one that actually determines life as it is lived, is productivity of labour. And they go for that \”smallholder\”, meaning \”peasant\” form of farming. The one where while, in places and at times, the productivity of land and inputs can indeed be high, the productivity of labour is by definition low.

For that\’s exactly what this type of farming does, substitutes labour for those other inputs, land, fertiliser, tractors and so on. And what does low productivity of labour mean? Yup, that\’s right, low wages for those providing the labour.

And that\’s appalling. Morally detestable. For the real problem with peasant farming is that it means that the farmers have to live as peasants. With the income of peasants.

None of us pinkish people in Europe are willing to go back to being peasants so quite why Oxfam thinks 500 million black Africans will be happy to remain peasants I\’m not sure. Other than vague accusations of racism, that the grinning picanninies are happy to sing while scraping the fields with a stick: something we happily gave up centuries ago, I can\’t actually think of a coherent explanation.

But in the end, that is the real problem I have with this report. Oxfam are trying to design a system whereby 500 million Africans get to be peasants for evermore.

Tell me, how did they ever get described as \”progressive\”?

Gibbering lunacy about banking in The Guardian

Ooooh, yes, we need a radical reform of banking.

So, what should that radical reform be?

The truth is, we won\’t get a banking system that is socially and economically useful until we harness public anger at what banks have done – and continue to do – with a determined political class that asks banks what measures they are putting in place to avert another catastrophe. This determined (and as yet mythical) political class should also tell the banking sector that its job first and foremost is to be a public utility. One which looks to long-term investment, which nurtures its customers and its local economic bases and does this through offering a real choice of banking (another reason Northern Rock should be kept either as a mutual or as a publicly owned bank with clear objectives, including support for our ailing local economies) and which is far more transparent about what it does with our money.

Umm, that\’s it? We really ought to do something?

So, what was the financial markets training of the one who brings us this pearl of wisdom?

Lindsay Mackie is a consultant for the New Economics Foundation. She is on the board of English PEN and chairs its Readers and Writers Programme.

OK, so it\’s a numptie from the nef.

Lindsay has worked as a journalist for The Guardian, specialising in race and home affairs, film critic with The Herald and arts feature writer with The Scotsman.

She subsequently worked on Hansard campaigns with Lord Lester, young people\’s citizenship campaigns, an education campaign to set up Reading for Pleasure clubs in secondary schools and Reading for Pleasure seminars for schools at The Guardian Newsroom. She is currently working with UK Film Council on a programme to set up film clubs in all UK schools. Lindsay also sits on the board of English PEN.

At nef Lindsay leads work on the Campaign for a Post Bank and the 10:10 Cities project.

Umm, right, so now we\’ve an arts journalist informing us all how to reform the financial system. As we can see, decades of useful experience can be brought to bear here.

So, err, why is one of the nation\’s great newspapers offering column space to someone so woefully uninformed?

Could it be because Ms. Mackie is in fact the wife of the editor of the newspaper, a certain Alan Rusbridger?

Actually, that might explain why The Guardian prints so much drivel from the nef in general, eh?

At which point an evil thought occurs: if you really wanted Ms. Mackie\’s head to explode you could get one of the nef peeps to point out to her the following. \”We don\’t actually care what you write love. You\’re only here because of who your husband is.\”

And given that they\’ve got an arts journalist running their banking campaign it\’s difficult to shake off the idea that that\’s the real situation.

Building the Good Society

\"\"This looks like an absolutely excellent idea:

Campaign group Compass is holding its annual conference at the Institute of Education in London on 25th June.

The Robin Cook Memorial Conference will bring together over 1000 centre-left activists, campaigners and thinkers, for discussion and debate.

The event will feature over 90 speakers including: Jon Cruddas MP; Caroline Lucas MP; Chuka Umunna MP; Prof Richard Sennett; Baroness Prof Ruth Lister CBE; Polly Toynbee, The Guardian; Mehdi Hasan, New Statesman; John Harris, The Guardian; John Kampfner, Index on Censorship; Hilary Wainwright, Red Pepper; Frances O’Grady, TUC; Paul Mason, BBC; Peter Kellner, YouGov; Andrew Simms, nef; Deborah Grayson, Climate Rush; Kat Banyard, UK Feminista and many more.

Left-wing blogs will be hosting their own debates for the first time.

Liberal Conspiracy, Left Foot Forward and LabourList will join UKuncut, Action Aid, Child Poverty Action Group; the Co-Operative Party, 38 Degrees, The Electoral Reform Society, The Equality Trust, Fabian Society, Friends of the Earth, Green Party, Greenpeace, Oxfam, Progress, Red Pepper, Republic, Searchlight, Shelter, Robin Hood Tax Campaign, Social Liberal Forum, Unions 21; UK Feminista, World Development Movement and many others in holding events.

For once we\’ve got them all gathered in one place it\’ll be easy enough to pack them off to somewhere where they can do no more harm.

Any of those internment camps on the Isle of Man still available? Anyone finished work on a teleportation machine yet?

High Pay Commission: Ignorance abounds

From their new report:

Top pay in the financial sector alone
accounts for 30% of the top 0.1% of the
income distribution scale and this pay
has attracted the most public attention.

Well, yes, it would, wouldn\’t it? When the country\’s playing host to the very tippy toppy part of a mobile, highly competitive and global industry, namely wholesale international financial transactions, you\’d expect to be playing host to the very tippy toppy and tippy toppy paid people in that global market.

You\’d have to be some sort of dullard to think that you wouldn\’t be really.

And I simply cannot believe that they\’ve not noted the most obvious point about top incomes. They\’re rising around the world. In country inequality is rising around the world (as global inequality is falling). This isn\’t a UK specific outcome.

As such, you might think to ponder on whether there are global causes of it. You know, like globalisation perhaps?

I leave it as an exercise for the reader to think up what the High Pay Commission apparently can\’t manage: some global reason why top pay is soaring.

After all, I\’ve pointed it out around here often enough.

Will Straw tries this difficult economics stuff

And fails: what did you expect?

“There are businesses and households all round the country who borrow either to invest or because they are borrowing for a mortgage. What’s important, and anyone who’s got a mortgage will tell you this, is not the stock of the debt it’s your ability to pay it back.

“And the debt interest payments that Britain has are lower than in the entire period when Margaret Thatcher was in power.”

Fails because he\’s noting the wrong point.

Page 15 here.

What was nominal base rate in the Thatcher years? Eyeballing it, anywhere between 8 and 18%.

What is nominal base rate today? Why, I do believe that it\’s somewhere around 0.5%.

Now children, do you think you\’ll be paying less in interest when interest rates are one sixteenth of what they used to be? One 36 th? You know, even if the debt itself, the stock, has risen, do you think that the flow, what you\’ve got to pay out each month might fall?

Yes, you would wouldn\’t you.

And what will happen when interest rates rise from their currently deliberately reduced levels? You know, after we get back to an interest rate consistent with long run economic conditions? You know, a real interest rate of one or two percent perhaps? Which with inflation at 2-5% (depending upon how you measure it) means nominal base rates of say 4-7%?

Do we think that on our newly wonderfully large stock of debt that our flow of interest payments is going to remain below historical levels?

No children, I don\’t think we do.

And remember kiddies, Will Straw worked in the Treasury under El Gordo and he\’s going to be a Labour MP one day. Weren\’t we and won\’t we be lucky little people to have such an economic genius lording it over us?

Uncle Timmy just wants to remind you that lamp posts and hempen are too good for the lot of \’em.

Climate change is affecting crop yields

Look, this comes from Lester Brown so there\’s obviously going to be something wrong with it. However, this is what they say:

The study, published in the journal Science, examined how rising temperatures affected the annual crop yields of all major producer nations between 1980 and 2008. Computer models were used to show how much grain would have been harvested in the absence of warming. Overall, yields have been rising over the last decades and the models took this into account. The scientists found that global wheat production was 33m tonnes (5.5%) lower than it would have been without warming and maize production was 23m tonnes (3.8%) lower.

So its a rather if my aunt had balls sort of analysis. We assume that increased temperatures will have a certain effect and here\’s the result of making that assumption.

Yes, there is more, this is from Lester, remember?

although the rise could be as low as 6.4% if the increased carbon dioxide in the atmosphere strongly boosts plant growth and yields – a factor that is not well understood by scientists.

So their more remarkable results seem to include only the cost, not the benefits. Hmm.

Much more interesting though is, well, let\’s assume that they\’re correct and in good faith (Oh, c\’mon, this is Lester), well, how important is this?

\"\"Oh. Despite these terrible effects of global warming, we\’ve been increasing production of wheat all the while. Indeed, eyeballing that, production has gone up by more than the calculated loss.

So not very important at all then.

Where does Left Foot Forward get these numpties from?

So there you are – the Thatcher revolution: Longer hours, lower productivity

Jeepers.

They reach this conclusion by looking at average working hours for full time workers, then comparing that with productivity per hour of people in work.

Ah, no, you see, you\’re not supposed to do it like that.

You can look at productivity at the economy level, what\’s the productivity of all people who could be in work? But if you look at the productivity only of those who are actually in work then you\’ve got to look at the unemployed as well. Those who would/could be in work but aren\’t.

For it doesn\’t take a planet sized genius to note that those most likely to be out of work are the least productive labour. That is, after all, what labour is hired for, productivity.

So, for example, if we wanted to measure UK productivity against French productivity we might want to adjust for different levels of unemployment. The country with the higher levels of unemployment we would naturally assume will have higher productivity per hour worked, given that they\’ve some chunk of their least productive people doing nothing instead of something.

There\’s another glaring error in their numbers as well. They only look at hours in market work. Again, sorry, but you shouldn\’t do that. You should look at total hours of work, household production as well as market.

For after all, we\’re actually interested in the residual, what is available leisure after all working hours and all personal time? As, in fact, Mssrs. Sen and Stiglitz pointed out in that report they did for Sarkozy.

When we do this results change, really quite dramatically: for example, the average American woman, what with her higher market working hours, actually has more leisure (by half an hour a week according to one paper drawing off the LIS figures) than the average German woman with her much lower market hours.

Still, there you go, Will Straw\’s evidence that he\’s actually done something in the real world, cashed union cheques to employ an intern, showing again that there are lies, damned lies and political statistics.

Tax Justice Network: still ignorant

….but like other too-good-to-be-true patent remedies, the idea that tax cuts for business stimulate investment and growth just won\’t die.

Sure, the reason it won\’t die is because it is true.

From the OECD:

The results of the analysis suggest that income taxes are generally associated with lower economic growth than taxes on consumption and property … These findings suggest that a revenue-neutral growth-oriented tax reform would be to shift part of the revenue base towards recurrent property and consumption taxes and away from income taxes, especially corporate taxes.

Note that this is nothing to do with tax levels: it\’s to do with the tax mix. The more you bias your tax collections to the corporate income tax and the less towards consumption (ie, VAT) and property taxes, the lower will be the growth rate for any given level of total revenue collection.

It\’s one thing to argue about higher tax levels, greater public services and so on, I might disagree with the TJN but that\’s just fine. But for them to continue lying about the basic economics of taxation is really just not on.

Will Straw: can he read?

Apparently not:

As the chart below shows, in his short tenure as Prime Minister, David Cameron has already created 117 new Lords. Indeed, David Cameron is creating peers at a rate ten times faster than his predecessor, Gordon Brown, and three times faster than Tony Blair.

Well Will, let\’s have a look at what the report you\’re referring to actually says, shall we?

The most problematic category in the present context is perhaps
the resignation honours list, made by a departing Prime Minister. Many of David
Cameron’s first group of appointments were in fact Gordon Brown’s resignation honours.
It has become an established convention that a departing Prime Minister should be able to
leave such appointments for his or her successor, though (probably due to the controversy
over ‘cash for honours’ shortly beforehand) no resignation honours were made after Tony
Blair stepped down. David Cameron’s first block of 56 appointments in May 2010 included
32 resignation honours, 23 dissolution Honours (see below), and one other (a peerage for
retiring Metropolitan Police Commissioner Ian Blair, falling into the category above).

Yup. Some half of \”Cameron\’s\” appointments are actually nothing to do with Cameron. Of that half, around half are in fact Gordon Brown\’s appointments, to make up for those years of lips firmly fixed to his posterior. The other half being the kicking upstairs of the usual riunks and wastrels who couldn\’t manage to keep a Commons seat even under our current electoral system.

The other half of that massive number of appointments?

Yes, the working peers:

Tony
Blair made several rounds of such appointments (as demonstrated by Figure 1), and David
Cameron appointed a group of 54 in November 2010.

And not even a plurality of those were Conservatives.

A small suggestion for Our Will. Do try reading (and if you can\’t get someone to read it to you) the report you\’re commenting on, there\’s a good lad?

Otherwise people might think you\’re just spouting propaganda rather than \”evidence-based analysis on British politics, policy, and current affairs.\”

Lenin Speaks!

Yes, apparently, the Labour Party, the historic party of the organised working class, frequent party of government, creator of the welfare state, and the outright poll leader du jour, needs the ordure, the fascist, semi-fascist and pre-fascist residues, the most outright reactionary, thuggish and ignorant shit in the country. Without appeasing the scum, it seems, Labour will never be a winner.

For all their interest in the proletariat Marxists have never been all that interested in the lumpen proletariat.

Might be something to do with the way they don\’t espouse the correct opinions I suppose.

In which we praise the perspicacity of Ann Pettifor

Forty years of systematic de-regulation has inflated the banking sector’s “total balance sheet to more than four times (the UK’s) annual GDP”, according to the commission. Simultaneously, and because of the finance sector’s unrestrained usury, greed and speculation, Britain’s productive, manufacturing and agricultural sectors have systematically shrunk as a share of GDP.

I don\’t know how she does it you know.

Such insight, such brilliance.

As one sector grows as a percentage of the economy other sectors shrink as a percentage of the economy. The way this happens you\’d almost think there\’s a limit on the size of all the shares together. Some sort of mathematical law or something.

These people really are health fascists

Tim Lang:

They say that simple attempts to change people’s behaviour ignore the complex range of factors that have led to Britain’s obesity rate rising, from the low price of fatty and sugary food to its availability on every street corner.

Their complaint is that by using \”Nudge\” style policies, the Government isn\’t doing enough.

In a paper published at BMJ.com on Friday, Prof Tim Lang and Dr Geof Rayner from the Centre for Food Policy at City University say it is now widely accepted that obesity is caused by several factors including diet, physical activity, genetics, over-supply of food, marketing and consumer choice.

But they claim that rather than drawing up detailed action plans and drafting regulations to deal with the problem, the British Government alone is focusing on the fashionable discipline of behavioral economics known as “nudge” theory.

So what\’s the sort of thing they\’re thinking should be in such regulations and action plans?

The authors concede that social norms have a role in determining consumer behaviour, but ask: “How can ‘nudge’ reshape the agri-food business’s long commitment to lower the price of fat, soft drinks, or high calorie readymade foods or the ubiquitous ‘offer’ of food at every newsagent, station platform, and petrol station?”

I assume that they\’d like to ban the \”offer\” of food in such places. Which is really rather moving from Nanny to Fascist, isn\’t it?

Howard Reed: entire numpty

Howard Reed\’s just released a report claiming that remutualising Northern Rock is going to be just great for everyone. Kittens will happily gambol sort of stuff.

We\’re going to hear a great deal about this as Our Chuka tries to convince us all that giving it away rather than selling it is just dandy. We\’ll start with the lie indirect:

This suggests that the proceeds from a Northern Rock flotation or trade sale in the near future would not be sufficient to cover the £50 billion or so of support from public funds already provided in the run-up to and following nationalisation.

That statement, as it stands, is true. But worthless.

For there\’s been two very different sorts of public funds provided. There\’s been the losses, subsidies. And yes, of course, we\’d like to get these back. But we might not, it has to be admitted.

Then there\’s been the financing that has been provided from public funds. Something very different indeed. This is the government lending money to Northern Rock which NR then lends to other people (or slightly more accurately, has already lent to other people). On which interest is paid. And the capital will be paid back in the future. It\’s only when you add these two together that you get the £50 billion.

More: much of that £50 billion in funding is actually in the bad bank, the bit that no one is even thinking of selling.

So while it\’s true that privatisation won\’t get the £50 billion back nor will any other solution other than simply time. As people pay off their mortgages which that £50 billion funds then the money will flow back into hte government. But to reject privatisation because that alone won\’t repay the £50 billion is what we might call the lie indirect.

And then we come to the real lunacy:

The aftermath of the financial crisis has seen a huge reduction in net lending to businesses . Figures from the Bank of England (2011) show that net business lending in real terms averaged around £1.6 billion a year between 1998 and 2005, before increasing to £7.4 billion in 2007 at what turned out to be the height of an unsustainable lending boom. The aftermath of the 2008 crisis has seen a collapse in lending, with net lending falling to minus £3.9 billion in 2009 and minus £2.1 billion in 2010.
The one growth sector for business lending, particularly for the small business sector, has been among mutually owned banks and building societies. For example, between 2007 and 2010 the Co-operative Bank doubled the annual amounts it lent to small businesses8.
A mutualised Northern Rock would be able to take a longer view on returns to capital than an independent plc or a subsidiary of a larger bank fixated on short-term returns to capital. It is likely that this would be useful for small businesses and community run businesses (such as social enterprises) in particular.

Northern Rock doesn\’t lend to businesses. Northern Rock has never lent to businesses. It\’s a mortgage bank for Jeebus\’ sake! Even their commercial department only does commercial mortgages!

They know precisely nothing about lending to business. Haven\’t a sodding clue. Working capital? What the fuck\’s that?

Howard Reed seems to think that giving the entirely clueless money to spray around the economy is going to help us recover from having had the entirely clueless spraying money around the economy. Man\’s a loon.

Won\’t stop Our Chuka from quoting him though.

From the director of the centre for Ernst Bloch studies

The solution to all our problems:

But in the medium to long term it means a complete recentering of the economy towards a more sustainable ecology and a more efficient and low impact mode of production, in which the pursuit of growth in order to simply accumulate more capital is abolished. This is also known as socialism.

It\’s quite remarkable how the meaning of socialism has changed in only a century, isn\’t it?

Back a hundred years, indeed, until 40 or 50 years ago, socialism was about more growth. That planning, the scientific exploitation of, rather than market based groping with, the resources of the nation, would increase growth and thus liberate the poor and make them free and rich.

Now socialism seems to mean no growth at all.

Easy enough to understand of course, for we\’ve now 100 years of experience and know very well that what socialism is very good at doing is providing no growth at all. So at least they\’re being honest about what\’s on the tin this time.

One other thing, what is the University of Sheffield doing running a centre studying the works of a low level late to the party Marxist? One who went to the GDR in 1949 but when offered the opportunity to contribute to really building socialism decided to nip out to the DDR  in 1961 as the building of the Wall removed the opportunity to do so?

U. Sheffield….ah, isn\’t that where Danny Dorling is? I suppose keeping all the idiots in one place makes them easier to avoid….

Wibble wibble from Friends of the Earth

How can they say this with a straight face?

No nuclear power station has been built without state cash – as our government recognises. No subsidies means no nuclear. Supporting nuclear means getting behind taxpayer-funded subsidies for, in George Monbiot\’s words, the \”liars\” who run the industry.

In contrast to the billions spent on nuclear, there remains real reluctance to invest in renewable energy. Only last week ministers cut support for small-scale renewable power. Their plans for electricity market reform will not support the development of offshore wind and other marine renewables.

It\’s entirely wibble, isn\’t it?

No, not the facts put forward, but the argument.

Nuclear requires subsidy therefore we shouldn\’t use it.

Meaning that we should now provide even greater subsidies for renewables because nuclear requires subsidy.

Yes, well done, here\’s a lollipop now go and play with the other children.

Do note that, not including this subsidy, nuclear produces \’leccy at about 10p per unit. Solar, including the subsidy, produces it at 46 p or so.

So, electricty production in the UK is around 400 TWh (2004 figure but good enough). Nuclear is 20% of this (again, good enough). 80 TWh. A TWh is 10*9 kWh.

Thus total production of nuclear in the UK, per year, is 80,000,000,000 kWh. So, if the nuclear subsidy were to be equal to the solar subsidy then the nucelar subsidy per year (ie, 80,000,000,000 x 36 p) would need to be £28,800,000,000 per year.

£29 billion a year.

As the general estimate is that the subsidy of the entire nuclear system over the past 60 years (yes, including all the bomb making n\’all, the R&D to work out how to do it etc) is estimated at £50-£100 billion, or £1.6 billion per year, that appears to make nuclear cheaper than solar by £25 billion a year.

Which is, when you come to think of it, a bit more than just chump change.

And this is just massively gorgeous:

By contrast, after just a few years\’ support in Germany, solar panels are expected to be producing power without the need for public subsidies.

That link is to an article from 2008.

At the solar industry trade fair in Munich over the weekend, there was growing confidence that the holy grail known as \”grid parity\” – whereby electricity from the sun can be produced as cheaply as it can be bought from the grid – is now just a few years away.

OK….

The market will probably expand another 40% this year,\” said Carsten Körnig, of the German solar industry association, referring to both PV and solar thermal systems, which produce hot water. He said his previous assumption – that grid parity would be reached in Germany in five to seven years – now looked very conservative since it allowed for only a 3% rise in electricity prices each year. In many countries increases of 20% a year are becoming the norm.

How excellent. OK, so the conservative assumption was that solar PV would have grid parity in 2013. But that\’s too conservative. It\’ll be shorter than that. Good, we\’re now in 2011….so grid parity has arrived, yes?

Excellent, so no more subsidy is needed, is it?

You really do have to be some kind of numpty to use the proof that you don\’t need subsidy any more as an argument for more subsidy.

And an idiot to not notice that that is what you are doing.

Will Straw n\’this logic stuff

I wouldn\’t use this argument myself:

It’s also worth remembering that a statistically significant result does not mean that there is no fiscal multiplier. Dr Ilzetzki was keen to stress today that the error range was from -1 to +1 so that means there’s as much statistical chance of it being zero as being 1.

To give you the background: I pointed to a new paper that tried to give empirical (rather then theoretical) results for the size of the fiscal multiplier. The results were that that mutliplier is higher in advanced economies, lower in open ones, lower in highly indebted ones (the definition of \”highly indebted\” seeming to be about 3 months of borrowing away from where we are) and statistically the same as zero in countries with a flexible exchange rate regime.

I then said that the £ is flexible therefore the fiscal multiplier in the UK will be, to a level of statistical significance, zero and thus not really all that helpful. Thus, for the UK, into the dustbin of history with Keynesianism.

Yes, of course I was being provocative, no, one paper does not prove such to the nth degree but it\’s not an odd or biased reading of the results of the paper. It\’s a simple logical conclusion from what they said.

A reasonable reaction would be to go away and point to all these other papers, here and there, which give different results for the size of the fiscal multiplier in flexible exchange rate economies. You know, similarly empirical results, calculated from the real world, not the assumptions that people are putting into models from theory. These papers do of course exist, don\’t they?

That isn\’t what our young Will Straw does. Rather, he takes that line given above:

It’s also worth remembering that a statistically significant result does not mean that there is no fiscal multiplier. Dr Ilzetzki was keen to stress today that the error range was from -1 to +1 so that means there’s as much statistical chance of it being zero as being 1.

So, the defence of Keynesian fiscal expansion, of the fiscal multiplier being positive, is actually that there\’s an equal chance that\’s it\’s negative as it is positive. No, don\’t look at whether that statement is true for a moment, just look at what is actually being quoted as a defence.

Spending hundreds of billions of £s has, according to the defence that Will is putting forward, has an equal chance of reducing the size of our economy by hundreds of billions of £s as it does of increasing the size of our economy by hundreds of billions of £s.

Recall, this is his defence! A 50/50 break on doing some good or entirely fucking us over.

Therefore we must do it.

Will certainly knows more about politics than I do, (he\’s been a SpAd you know),  has better contacts in the union movement (his blog is paid for by such) but perhaps a remedial course in logic might be made available to him?

I dimly recall a response of Will\’s to a critique of a Guardian piece of his. A CiF commenter asked what his experience of the real world of business was like, to which the response was that he did run his own business you know. That whole intern and a union cheque that is Left Foot Forward.

Oh well, only another 4 years of this to go and a safe Labour seat will open up for young Mr. Straw. It\’s this social mobility thing that everyone\’s so keen on these days. Sons of former Cabinet Ministers do get to go to Parliament just like they do get to be SpAds. Just as with the Benns, where we\’re on the fourth generation of MPs and the third of Cabinet Ministers.

Social mobility, a selection of the talented wherever they come from, so important, don\’t you think?

Prem Sikka is a Professor of Accounting you know

Gambling, or placing bets on the movement of exchange rates, interest rates, price of wheat, oil, gold, commodities and even rates of death, is ingrained in the world of finance.

We\’ve a couple of ways of describing that gambling on the rates of death.

\”Life insurance\” is one, \”annuities\” another.

Strange to see a Professor of Accounting, even at Essex, raging at either.