The End of the Internet

You know, this sounds very much like a bunch of producers insisting that someone else should pay for their business to succeed.

The internet could grind to a halt within two years under the pressure of booming demand for online video, experts have warned.

Soaring visitor numbers to video websites such as YouTube and the BBC\’s iPlayer are putting the copper wires, which underpin parts of the internet, under severe strain.

Experts warn that unless billions of pounds is spent on upgrading the web\’s infrastructure, it could slow down or even collapse. An internet meltdown would have a disastrous impact on the economy.

Now I\’ll admit to no great technical knowledge but the only copper left in the system is the "last mile" isn\’t it? The exchange to the individual user? Everyone who is running more than the most trivial domestic traffic is on fibre optic already I would have thought: and certainly, the various servers and computer farms are.

Internet providers are being urged to spend billions of pounds to replace the copper wires which provide the final web link to homes with high-speed fibre optics.

Ah, yes, that is the bit that it is said the money should be spent upon. So who are the members of the Internet Innovation Alliance? Corning? They make fibre optic glass. AT&T? They carry much of the backbone, but they don\’t have a domestic division any more, do they (they sold it off, didn\’t they?) Etc. etc.

My, my, people who would make lots of money if billions were spent on putting fibre optic into the last mile recommend that other people should spend billions putting  in said fibre optic.

Surprise, eh?

First Great Western


Using their online system, you cannot book a ticket from outside the country.

Which knuckle dragging mouth breather designed that system then?

Chief Operating Officer

\"Andrew Andrew Haines, Chief Operating Officer

The First Great Western executive team is led by Chief Operating Officer Andrew Haines, who joined First Great Western in September 2007.

Andrew has spent his entire career in the railway industry, having joined British Rail as a graduate manager in 1985 and worked in numerous front line positions.

At privatisation Andrew joined Railtrack where he achieved rapid promotion before joining South West Trains in 1997.

In January 1999 he was made Operations Director and then became Managing Director of South West Trains in September 2000.

He joined FirstGroup plc as Managing Director, UK Rail division in July 2005.

Well done Mr. Haines. You\’re a credit to British industry.


Update: From the "customer care centre"

Our Address Search database only recognises UK postcodes, so we are unable to accept registration from anywhere outside the UK. Our Development team is working on modifying the web site to accept these addresses in the future.

Therefore, please buy your tickets on the day of travel from the station.

Umm, £140 against £35?

Please, do fuck off Mr. Haines.


Number Crunching

David Craig, a former government consultant, calculates that private sector workers are for the first time being forced to pay more in taxes to fund public sector pensions than they manage to save for their own retirement.

Individuals poured about £15.6 billion into personal and company pensions in 2005. In the same year private sector workers paid taxes of about £18 billion to keep retired teachers, National Health Service staff and other state workers in their old age.

Switch them to defined contribution pensions, it\’s the only solution.

Godfrey Bloom

The man was right you know?

"No self-respecting small businessman with a brain in the right place would ever employ a lady of child-bearing age."

From Today\’s Times:

A survey last year by the Equality and Human Rights Commission makes clear why women are sometimes wary of asserting their rights.

It found 70% of recruitment agencies had been asked to avoid hiring women who were pregnant or likely to get pregnant. A survey in 2004 found eight out of 10 human resources managers would “think twice” before hiring a newlywed woman in her twenties.

Godders again:

"They probably in quite good faith put in a piece of legislation which is designed to protect women in the workplace but what actually happens is it… writes them out of employment."

And what was the reaction to this outburst of truth telling?

The original comments provoked a strong reaction from Labour Euro MP Glenys Kinnock, who said: "We know UKIP are Neanderthal in their attitudes, but it is absolutely terrifying that Mr Bloom can fly in the face of what we have worked and fought for, to establish equal opportunities and rights for women."

She said she will be keeping an eye on him: "He cannot strut around here saying things like that."

Well, quite, can\’t have the truth being told in the corridors of power now, can we?

Wee Willy Hutton

The man is gobsmackingly awful in his economics I\’m afraid.

The sound and fury, though, disguised a more complex reality. In both Britain and France the coalition in favour of nationalisation after the war extended well beyond the left-wing parties and the trade unions. British Conservatives and French Gaullists, along with businesspeople and professionals, were strongly in favour for the same pragmatic reasons that lay behind the nationalisation of Northern Rock. In the circumstances of 1945, the idea that private companies, who had only survived the Thirties via trade protection and price-fixing cartels, and who, in France, had collaborated with the Nazis, were going spontaneously to spearhead the reconstruction of devastated war-torn economies was risible. The propositions of a Thatcher or Milton Friedman would have been met with gales of derision. The state had won the war. It now had to win the peace by mounting programmes of investment and modernisation that were beyond the capacities of the private sector.

That this was the mantra I agree: although it should be remembered that Hayek\’s "The Road to Serfdom" had already in fact been published. Will goes further:

France had thought through the practicalities of nationalisation more carefully. It was evident that the postwar French private sector needed support in every way – with finance, markets and capacity-building – that only careful state planning could provide. Planning was the pragmatic response to French capitalism\’s chronic weakness.

OK, that is indeed what they thought.

In Britain we refuse to accept the proposition, chasing after the chimera of 100 per cent private-sector solutions and regarding nationalisation as a prohibited taboo. As a result we have never invested in making public ownership work, despite its necessity. After all, Northern Rock was preceded by the renationalisation of the railway infrastructure and the nationalisation of one of London Underground\’s contractors, Metronet. If we want the best from our public utilities and infrastructure, these may well be the pragmatic precursors of more. How much better to try to do public ownership well, rather than follow the British fiction that it should not be done at all.

Ah, but, you see, if you want to build a scientific case (and we do all agree that economics is a science?) then you don\’t just look at what happened in one or two places. You set up a hypothesis (nationalisation and planning good for growth, say) and then go and look, not for cases that support the contention, but for those that refute it. For the fact that two countries grew with such nationalisation and planning shows very little: perhaps all countries, whatever their economic systems, were growing in that period?

What you\’re supposed to do as a good little scientist is to look for evidence that disproves your hypothesis. Only if you are unable to find such disproof are you able to say that your hypothesis has turned into a thesis which now stands, until someone does indeed (if ever) find the disproof that overturns it.

And we have to hand an example that does indeed disprove the hypothesis. Adenauer\’s Germany:

The radical new policies adopted by Adenauer\’s post-war Christian Democrat government transformed a sclerotic economy. Between 1951 and 1960 the Federal German economy doubled in size.

The pre-war economy was dominated by price cartels. In the Weimar Germany, no less than 2,100 separate cartels were established by 1930. Under the Nazis, economic frreedom was further constrained. By 1938, roughly 50 per cent of total German output was subject to cartels of one form or another. After the Second World War, the Allies banned cartels, but various forms of price fixing continued.

During the war, and in the immediate post-war period, the German economy was planned down to the smallest detail.

But post-war Germany was led by a group of politicians who rejected the wartime and pre-war orthodoxy of extensive state intervention in the economy. Influenced by Ludwig von Mises and the Freiburg group of economists, they preferred to employ the price mechanism as the key feature of what would be called the Social Market Economy.

Ludwig Erhard, Director of Economic Administration in post-war Germany – later he became Federal Chancellor – was a founding figure of the Social Market Economy. He believed that only under a free market economy could an individual find true freedom, and that only a free society and free economy would deliver the wealth needed for humane social policies and programmes.

Erhard masterminded the introduction of a new currency in 1948 and lifted price controls. He cleverly waited for a weekend to announce his bonfire of controls, knowing that the Allied powers would not be back in their offices until the following week, by which time it would be too late to countermand him. He argued: "We must find our way back to a market organisation free of controls. In place of interventionism, we must insist on personal responsibility and performance. The market is not a diabolical invention to subdue particular classes. On the contrary, it is the only organisation of economic life which creates a just and optimal distribution, a function which no collectivist authorities can replace."

The results of the new free-market policy, adopted in the British and American occupied zones, were outstanding; in contrast, the French and Russian occupied zones remained shackled in poverty. Adenauer commented in his memoirs that: "Every politician who is concerned with questions of economic order should be urged to study the course of events in the Anglo-American zone since June 1948." Arguably they should have studied the United Kingdom too, where rationing and other wartime restrictions were not removed until the 1950s, by which time Germany was well on the way to overhauling the UK economically.

A notable feature of the Social Market Economy was the strong commitment to curbing inflation through the adoption of monetarist policies aimed at maintaining the value of the D-Mark. The Bundesbank refused to underwrite cost rises and unsustainable wage demands by engineering an over-expansion of the money supply. Economic policies were targeted at opening up markets to prevent the misuse of resources and the creation of inefficient monopolies.

Exploiting the new trade freedoms ushered in by the European Economic Community, Germany trebled its exports to five EEC states – France, Belgium, Luxembourg, Italy, and the Netherlands – between 1958 and 1962.

A bonfire of the controls on the economy, a much much lighter hand in the planning process, a concentration upon not ownership, but the eradication of monopolies….that produced vastly better results than the planning and nationalisation which Hutton recommends.

We also have the example of Hong Kong, which went from being entirely destitute after the war to being richer than the UK today: and they even refused to collect GDP figures for the first few decades of that surge in growth, for fear that some planers might do something with them.

The question thus is not whether Statism produces growth: pretty much any not entirely lunatic economic system will do that, given the onward march of technology. It\’s whether Statism produces more growth than non-Statism: and the answer there is pretty clear. It produces less.

So we shouldn\’t do it.

And to think that Wee Willy is a Governor of the London School of Economics.


Nick Cohen on Brown

I\’ve said it before but I\’ll say it again. We\’ll get that nice Mr. Cohen over the boundary line from left liberal to classical liberal one of these days, as sure as eggs is eggs.

David Craig, whose previous investigative work showed how Brown\’s Treasury had let management consultants plunder the public sector, has a new book out this month: Squandered: How |New Labour are Wasting Over One Trillion Pounds of Our Money. To spell it out, New Labour has spent an extra £1,229,100,000,000 since 1997 and will have spent £1,700,000,000,000 by the 2010 election. Its most tangible monument is \’a political and managerial culture where mistakes are never admitted, failings are always covered up and mind-boggling bungling is rewarded by promotion, honours and generous inflation-proof pensions\’.

In other words Brown couldn\’t be further from a Dickensian miser if he tried. For 10 years, he has thrown other people\’s money around with the abandon of a Roman emperor or Renaissance pope.

Truly \’unforgiving\’ writers wouldn\’t show Brown as a reassuringly old-fashioned pillar of the kirk, but as a demented spendthrift who stuffed the pockets of bureaucrats, IT salesmen, management consultants and hospital consultants while the patients whose money he had taken lay in NHS beds slowly dying in pools of their own excrement.

Nick, you might start your reading leading up to your public conversion with this.

Money Can Buy Happiness

The report does not specify how much happiness a pound will buy in the current market or whether, with the weak state of the dollar, it would be more cost-efficient to buy your happiness in the US. Concerns that the UK happiness market will be flooded by cheaply-made overseas contentment imports have so far proved unfounded.

See and Do


In a Sunday newspaper interview, Sufiah said she did not see her work as a prostitute as sordid. She said that she turned to escorting after reading Belle de Jour\’s Diary of a London Call Girl, which was made into a television drama starring Billie Piper.

So this blogging thing does work then? People do take note, do copy our actions?

Excellent news, eh? This blog must have created any number of grumpy middle aged gits then.

Shagger Norris

Seems he had all the necessary attributes to be Mayor of London then:

She gave birth to Mr Livingstone\’s son, who is now 15, at the Royal Free Hospital in north west London, in November 1992.

Another of Mr Livingstone\’s lovers had given birth to his daughter at the same hospital two months earlier, just over two years after she gave birth to his first daughter.

All this time the maverick politician was in a long-term relationship with Kate Allen, the UK director of Amnesty International, with whom he lived for nearly 20 years, between 1982 and 2001. Mr Livingstone subsequently took up with his office manager Emma Beal.

Ken\’s quite right that his is all personal stuff. I\’m just wondering whether he had the same view when it was his electoral opponent who was having all the tabloid trouble? No, I don\’t know, but it would be interesting to, wouldn\’ it?

Tesco Sues The Guardian

Those stories over how Tesco\’s was going to save a billion in tax….we all found out they were nonsense pretty quickly, didn\’t we? It appears that The Guardian might have a few problems over it:

Tesco is to take legal action against the Guardian newspaper and its editor Alan Rusbridger after a series of articles that claimed it avoided paying £1bn in tax by using an offshore structure for property joint ventures.

In a High Court writ the retailer seeks special damages for "libel and malicious falsehood", citing complaints from customers.

Lucy Neville-Rolfe, Tesco\’s executive director of corporate and legal affairs, said: "It is very regrettable that we have had to take this step. We had hoped that the Guardian would be able to accept it had made a mistake and apologise for what it had written, but this has not happened.

"We support free and open debate about the role and conduct of business so long as that debate is based on fact," she added.

In a stock exchange announcement, Tesco said it expects to achieve savings of £23m in stamp duty related taxes on the transactions completed to date.

"The maximum additional savings in stamp duty related taxes that might be achieved from using these structures could be another £30m-£40m, depending on market conditions," claimed Tesco.

The retailer added that it was not uncommon to use offshore companies for joint ventures with third parties, claiming that the Guardian Media Group used a similar structure when it acquired Emap alongside private equity company Apax.

The legal action may put Carolyn McCall, chief executive of Guardian Media Group, in a difficult position. Ms McCall joined the Tesco board as a non-executive director in 2005.

How gorgeously, wondrously, amusing.

I wonder what the reaction is going to be? Given the incredible quality of the original reporting The G doesn\’t have a factual leg to stand on. But libel and malicious falsehood against a company might be a difficult thing to prove.

So, what indeed are they going to do? Apologise or fight the case?

Here\’s The G\’s version.

However, the Guardian said last night that Tesco\’s actions amounted to bullying and were clearly designed to silence public debate on the important issue of taxation.

"This looks like a deliberate tactic by Britain\’s largest retailer to shut down perfectly legitimate inquiries into their methods of tax avoidance. At the same time that two Tesco directors are reported to have lobbied the government in private on matters of taxation, the company is now seeking to chill public debate on the same issues," it said in a statement.

"The articles were in the context of a series of articles on taxation issues in a globalised world. They clearly raised serious matters of public interest in relation to tax avoidance and tax management. We have never claimed Tesco behaved illegally. These are matters of considerable political importance at present, debated by all parties.

"Guardian journalists put a series of questions to Tesco over a period of nearly four months. At no point during the pre-publication correspondence would Tesco even admit the offshore structures, still less give the explanation they advanced post-publication. We offered meetings to discuss the allegations; this offer was rejected. We included Tesco\’s explanation in the articles and have subsequently offered the company the opportunity of a full and prominent right of reply.

"Instead of frankly explaining their position and/or engaging in a public dialogue Tesco has taken the extraordinary step of suing for libel in a clear attempt to close down the debate and discourage others from looking too closely.

"It\’s hard to think of another large public company which would resort to such bullying tactics."

"Bullying"? Methinks the value of the damages (assuming Tesco\’s win of course) have just ticked up.

That Glorious Euro

The root cause of the crisis is in a sense Europe\’s monetary union. The euro effect halved Spain\’s interest rates almost overnight. Rates then fell below Spain\’s inflation rate for several years, fuelling an explosive credit boom. The country\’s current account deficit has reached 10pc of GDP, the highest of any major economy.

This is the bit that all those federasts panting for the euro rather forgot to mention. A single currency is indeed lovely for the transaction costs side of things. It also, inevitably, means a single interest rate though. And with different inflation rates, widely disparate economies, this might not be a good idea.

The rate was clearly and obviously too low for Spain: as it is now too high for Spain.

"We have a very worrying situation. The developers simply cannot refinance their debts. We need to cut interest rates by 2pc, which is obviously not going to happen,"

There is no solution to this….other than leaving the euro.

Gordon\’s Expenses

So, is this the smoking gun, the reason that the Speaker didn\’t want to release these expense claims?

Gordon Brown claimed more than £18,000 in 2005-06 for a mortgage-free London flat, including £4,981 for cleaning, £2,385 for food and provisions, £815 for utilities and £900 for council tax.

This would be this flat:

Gordon Brown gave his £700,000 flat in central London to his wife Sarah weeks before he moved into 10 Downing Street, The Daily Telegraph can disclose.

But the thing is, wasn\’t he actually living in the flat over 10 Downing Street (the Blairs living in the larger one over 11)?

Or is this all a storm in a tea cup?


Voodoo Health Economics

Paul Krugman:

…but the equally foolish claim, refuted by all available evidence, that the magic of the marketplace can produce cheap health care for everyone. …

How about this as an idea? Health care is expensive because health care is expensive: it requires huge amounts of labour (in the US, 13.5 million people) and vast amounts of capital ($800 million to bring a new drug to market).

How about the idea that there is *no way* to produce cheap health care for everyone? We can dance around the minor issues, choice, quality, access, these sorts of things, but we\’ll never invent a method of health care that provides high quality care to everyone that is cheap.