Somewhat Odd

This Observer piece really seems to wander a little in its* argument.

Manufacturing is great because well, it\’s manufacturing, innit, so much better than just those services like finance and The City.

And then the praise for the fact that a lot of what we class as manufacturing is actually services, like design and maintenance.

Eh?

 

* See first comment.

Business and Regulation

This turned up on EU Referendum earlier in the week of course, now with Christopher Booker (not all that much of a surprise, Richard North is Booker\’s co-author on several books and his researcher at times). The most important part of the story to me is this:

Since these costs will be much the same for her as for a multinational with a turnover of billions, she says: "I do not know how a directive could have been designed like this. The needs of smaller businesses have simply not been allowed for. It is astounding."

The reality seems even worse. It is clear from the impact statement that Brussels knew, when it drafted the directive, that it would put what it calls small and medium enterprises (SMEs) at a significant disadvantage against their big competitors. "SMEs," it admits, "are particularly affected by the directive, while larger companies are more likely to be able to bear the costs of dossier preparation."

One likely upshot of the directive is that many of the 1,000 SMEs in Britain that rely on chemical formulations for their products will be unable to afford the costs (most of them wholly unnecessary – chemicals such as benzalkonium chloride have been exhaustively documented for decades).

Most will be forced out of business. Many useful products will disappear from the market. The cost of developing new, more effective products, in a market where most are low-value and offer only small profit margins, will be so prohibitive that innovation will be stifled.

The only people rejoicing at this example of regulatory overkill are those multinational companies that played a considerable part in drafting the directive.

Yes, we have regulatory capture. The bureaucracy, the real government, asks all sorts of people, in fact anyone with an interest at all, to contribute to their fact finding exercises and calls for opinion. Small businesses of course never respond: who has the time or inclination to wade through millions of pages to find out whether they\’ve decided to screw you this week or next?

Large companies of course have the resources to do so. So it is the views of large companies which prevail in the writing of the rules themselves. Yes, why not, another 20 pages of irrelevant questions: that\’ll stick it to those small companies which are our competitors. Hey, why not make it so complex that there needs to be a whole department in a company to deal with it? Great! That 15 man company down the road can\’t do that now, can they? Damn them for skimming off sales that should rightfully be ours!

You know, if we make it complex enough then they might have to hire specialist outsiders, consultants at £2,000 a day to help them fill in the forms! Excellent, and of course, it\’s all being done for the kiddeeeees!

And thus Marx\’s prediction becomes true, markets slide towards monopoly. But not because of the inevitability of this happening in a market economy, but becuase of the interaction of big government and big business.

Just as an example here, I complained about the restrictions that REACH places upon one of our imports. One Europhile federast said that it was simple, I should simply band together with my competitors to pay the costs of registration and testing of the product.

Erm, I don\’t actually know who all my competitors are for a start. And even if we did, and we combined to get that registration, there is no way that we can stop a new entrant into the market from using that registration without paying for it or contributing to our costs. Given that the cost of the registration is of the order of €100,000 and the whole EU market is worth €500,000 a year, on tight margins, that\’s something of a problem really, don\’t you think?

And this is for a product which is simply two metals mixed together. Lord alone knows what it\’s like for those who supply more complex products.

The OFT and Regulation

OK, so yet another investigation into the supermarkets. But this is the bit I found most interesting:

The OFT has also been plagued by actions from rivals of companies against whom it has dropped investigations – and this is the Irishman\’s biggest bugbear.

"People out in the market should compete in the market. Not by using public resources as a way of manipulating their rivals," he says.

That\’s extraordinarily naive: perhapos businesses should compete out there in the market, but that doesn\’t mean they will.

That, of course, being the very basis of having an Office of Fair Trading, that while they should compete in the market, they don\’t always do so.

And if you\’ve got a regulator out there that you can complain to, if that complaint is successful your competitor gets fined 10% of turnover, well, why wouldn\’t you make the complaint? And if the complaint isn\’t successful, you\’ve still caused them great expense and management time defenmding themselves from the allegation.

In fact, you\’ve actually got an incentive to enter into a collusionary pact, or at least discuss doing so. Go along, nod at the right time and then shop your rival to the OFT and see them being fined 10% of turnover. You get off scott free because of the whistelblower\’s provision, that he who confesses first don\’t get punished.

The housebuilders\’ fines are expected to dwarf the OFT\’s record £121.5m fine levied on BA last summer.

Of course, no one has deliberately done that to a rival yet, but they could do.

Ahahaha…Bwahahahahah..Oh, Dear, Gurgle…Ahahaha…

Amanda Marcotte has her first book out.

There\’s been a certain, umm, consternation shall we say, about the accompanying illustrations.

Here.

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Snigger. Oh Lord, what were they thinking?

Well, here\’s what the publishers say.

Readers will know that I\’m not exactly a fan of Ms. Marcotte\’s work and thinking (yes, this is that famous British understatement) however, her response I do like.

I’m sorry. Plain and simple.

We all screw up at times and when we do complete and abject surrender followed by an apology and a promise to at least attempt not to do it again is the best option. You know. like Mom told us to.

Umm, it might be some time before Amanda gets an approving word from me so make the most of it while you can.

A Confused Guardian

Higher prices may sometimes be justified, but a conspiracy of producers against the public is always the wrong way to bring them about.

Indeed.

In a report on alcohol last month, the home office proposed changing the law so supermarkets are no longer forced to respond to cut-throat competition by selling cut-price liquor. The idea of imposing competition with an eye on the wider public interest could have more general application. Regulators guard their independence jealously, but they need the freedom to apply it more flexibly, because there are times when lower prices come at a high cost.

Eh? So with the justification of higher prices being needed you\’ll agree to a conspiracy of producers against the public?

And I thought Leaders were written by the bright people?

Would Be Interesting to Know

Rationing, shortages and profiteering hit garages yesterday ahead of the planned strike at the Grangemouth oil refinery as motoring organisations and government ministers pleaded with drivers not to panic-buy petrol.

Many stations in Scotland limited customers to £10 or £20-worth of fuel, a few ran out of diesel, and a small number raised prices by up to 10p a litre.

So, did those stations which raised prices run out of fuel or have to impose rationing? For one can use either price of quantity offered to choke off demand: we usually find that the former works better.

Well, Quite

Vicki Woods:

I can\’t ever read another survey about that other great curse of modern women, which is widely misrepresented. The fact that women have both a) a gender pay gap and b) babies annoys a great swathe of right-thinking women (if "right" is the word, which it probably isn\’t) who cannot or will not do the sum that proves that a) is a direct consequence of b).

It\’s a maternity pay gap, not a gender pay gap, and the figure-fiddling about part-time and full-time work is unfair: many women embrace part-time work and would hate to be full-time.

You may or may not have noted that argument being made around here from time to time.

Despite Where the Idea Comes From

This might in fact not be all that bad an idea.

Silvio Berlusconi\’s wife added her voice yesterday to the growing calls for Italy to be partitioned.

It\’s only been a united country for what, 140 years or so? Is there anything about the current system of internal borders, the current situation of the world, which has to be kept for all time?

Maybe Garibaldi was wrong and the Risorgimento was itself a bad idea?

Calling Paris!

Guys, you still want them?

Taxpayers may have to come to the rescue of building plans for the London Olympics because the project has been hit by the global credit crisis.

Australian-owned Bovis Lend Lease, which was selected last year to construct the £2 billion Olympic Village in east London, is struggling to raise money to finance the project.

Bovis Lend Lease intends to build 4,200 homes, lease them back to the Government to house athletes and officials and then sell or rent them afterwards on a profit-share arrangement.

But with house prices declining and fears of a crash, it is impossible to estimate the price, or rent, the company will be able to secure for the flats after the Olympics.

Anyone got the Hotel Matignon\’s number?

Humphrey Lyttleton

Has died.

Not sure if this story will make it into the obituaries. Vignettes of VE Day:

"of the Old Etonian trumpeter (and young Guards officer) Humphrey Lyttleton playing "Roll Out The Barrel" as he lurched on a handcart from Buckingham Palace to Trafalgar Square and back followed by a long swaying line of revellers going the conga;"

I know he did much more than that but still, a nice image of the man.

Oh, How True

Satire doth uncover the deeper realities:

*In fact, Polly has many admirers, not least of all a certain Tim Worstall who manages to blog about her at least once a day in between the rest of his anti-woman commentary, the pig! It is an open secret in the blogosphere that Tim (who is not very brght) is madly in love with clever Polly but unfortunately his hatred of all that is female causes his love to manifest in a deranged and twisted form.

Dion Dimucchi

I wouldn\’t say this is the most inventive music ever. A very solid blues chug more than anything truly innovative.

But good for all that: this at high volume just before leaving the office this evening will give you some bright eyes with which to spot that first pint of the weekend.

The second song features that not often heard instrument, the rock\’n\’roll violin.

Lenin on Climate Change

Just a quick reminder: we could well be finished soon. Yes, the WWF are back with new results that confirm the worst: the arctic ice caps are melting even faster than we thought. As the ice melts and more of the surface is water, the temperatures rises more because the water can absorbe heat that would be reflected by the ice. The climate doesn\’t change in a linear fashion: it has sudden flips. It can sustain stability, like a canoeist, under immense pressure from different fluctuations. But beyond a certain point, it capsizes. The tipping point as far as arctic ice is concerned is that elusive point when nothing we can do can make any difference at all, and it has just got closer. If the tipping point is reached soon, then the arctic ice is gone for good.

Apart from the blithering ignorance of the science (the arctic ice floats, you see, so melting would not lead to higher sea levels, as one example) there are really only two questions for Lenin:

1) Will all of this happen before or after Captialism collapses of its own inherent contradictions.

2) Will this happen before or after the inevitable arrival of true communism?

British Legion

Yes, they\’re advertisers here (although only people reading from the UK will see them). Worth plugging their campaign more directly as well:

Inquests can be very confusing for the families of Service personnel, particularly for those without knowledge of the legal system or the military. Solicitors can be expensive and funding is only available in “exceptional cases” where the family is financially eligible. The power to grant public funding for representation at inquest lies with the Lord Chancellor. Interestingly, all cases where someone has died in prison, in police custody or detained under the Mental Health Act 1983 are automatically classed as “exceptional cases” and the need to meet the financial eligibility criteria can be waived. However, Service families need to apply to the Lord Chancellor fortheir case to be classed as “exceptional” and they must meet the financial criteria. We are demanding that all Service families should be provided with legal advice, representation and advocacy during inquests at public expense.