Sacks of Ferrets Again

So wonderful to see the Friends of the Earth bod having a go at Greenpeace.

It wasn’t so long ago that Greenpeace was out there very actively campaigning for the wholesale substitution of biofuels for hydrocarbon fuels, in order to help reduce emissions of C02. It’s gung-ho enthusiasm in those days was entirely unscientific (as in Greenpeace had done no proper life-cycle analysis, and entailed Greenpeace chumming up with some strange players – including Bob Shapiro of Monsanto who once fronted the bill at a Greenpeace Business Conference in 1999 to talk about the benefits of biotechnology. So if you put together an historical ‘public policy balance sheet’ on biofuels, over the last decade or so, it could even turn out to be the case that Greenpeace was indirectly responsible for the deaths of more orang-utans in the Indonesian rainforest than Unilever.

Tee hee.

DC Sure is Weird.

Talking about where to have lunch in Washington DC Ezra Klein offers this:

It\’s all vegan, but it\’s unreasonably delicious. Get the spicy chicken bowl,

Vegan chickens now? No wonder the entire governmental system based there is so screwy.

Quite So

One really is lost in admiration at how the combination of our central and provincial governments can take a problem and make it so comprehensively worse.

This time it\’s over scrapping cars.

Time was that a scrap car had a value to the last owner. The value of the scrap metal in it. There was thus an incentive to take it to someone who would pay that scrap metal value and thus few if any cars were simply dumped on the streets.

Now, in the name of environmental protection, the car has a negative value: the cost of disposal is higher than hte scrap metal value. So, clearly, the incentive is to dump the car, not take it to someone who will charge you that negative value.


Some 300,000 cars are abandoned every year, costing local authorities £26m to remove them and trace their owners.

The government says the problem has increased sharply in the past five years and is projected to keep rising.

An amazing finding, eh? Incentives matter.


Very Confusing

A national jazz radio station has attracted record audiences after the owners announced its closure and replaced the DJs with a musical loop.

OK, great, so what listeners want is jazz, not DJs. An interesting finding and one that many other radio stations might do well to copy.

However, the station\’s closure prompted a backlash from music fans. The latest Rajar figures show the “dead” station attracted a record audience of 407,000 listeners, an increase of 40,000, during the last quarter.

A Facebook campaign has been started to revive the station, which ceased broadcasting finally at midnight, March 31 with Don\’t Worry, Be Happy by Bobby McFerrin.

Eh, the Facebook campaign wants to go back to the format which attracted fewer listeners?

Finally, I know what the purpose of Facebook is then. It\’s for the idiots to go to and leave the rest of us alone.

Excellent News!

As you know, one of the themes around here is that cost benefit analyses need to be, well, focussed on both costs and benefits. So this is excellent news indeed:

Tens of thousands of Alzheimer’s sufferers and their families had their hopes raised yesterday as two drug companies won a landmark victory in the Court of Appeal.

The court ruled that the powerful body that controls the prescription of new drugs must give up its most precious secrets — how it measures the benefits that novel treatments bring.

The ruling is the first case that NICE, the National Institute for Health and Clinical Excellence, has lost in court. It means that in future it will have to be completely transparent in the way it reaches its decisions, revealing the inner workings of the computer models it uses to measure value for money.

I\’ve no hassle with the basic idea of NICE, nor with the idea of using QUALY (quality adjusted life years) as the measure of value for taxpayers\’ money. And while I wouldn\’t be interested in poking around the details of their economic models myself I do insist that it\’s important that someone does, someone independent.

For we\’ve got a fairly large number of cases, the details of recent decisions, where such cost benefit analyses seems to be disregarded: where, in the details of the argument something is twisted so as to provide the outcome desired rather than the one the evidence really points to.

A non-exhausitive list.

1) The claim that the UK has the largest gender pay gap in Europe. This is reached by using both full time and part time workers: and the UK is structurally different in the number of women who work part time. If we look at full timers only, then the pay gap is below the EU average.

2) Before the EU imposes import restrictions (tarrifs or quotas) it is supposed to provide an estimate of the costs and benefits. Not surprisingly, it only ever provides cost numbers for the benefits to producers: not the costs to consumers.

3) Cannabis reclassification. There has indeed been a rise in psychosis associated with cannabis consumption. However, there\’s been no rise in psychosis as a whole. The cannabis related rise was taken to mean that cannabis was causing the rise: when the lack of a general rise means it is more likely that those becoming psychotic were self-dosing with the more widely available cannabis.

4) Many use the WRAP report on how many squiddely tonnes of CO2 emissions are saved by our current recycling to argue that we should therefore be doing more such. Illogical: it may well be that recycling aluminium cans (as it does) saves both emissions and money. That has absolutely nothing whatsoever to do with whether wormeries and their associated worm farts are better or worse for emissions than landfill and methane capture.

No, these aren\’t all about cost benefit analyses. But they are all about much the same point. Unless we can see the details of how an argument, a chain of evidence, is constructed, we cannot have any confidence in the conclusions reached.

Thus the release of NICE\’s full economic model is something to be celebrated.

Yes Jeremy!

Leggett goes all renewables on us again.

The oil giants are recarbonising, wilfully choosing to forget both global warming imperatives and the need for renewables in national security terms. Shell pulled out of the biggest offshore UK windfarm yesterday and BP is losing interest in solar and investing in the tar sands – having once refused to do so on ethical grounds because of the greenhouse gas emitted in processing.

Excellent, they\’re concentrating on what they do best. What Leggettt misunderstands is that an oil company is just that, an oil company. That\’s what all their expertise is, that\’s their comparative advantage. There\’s absolutely no reason to think that skill at drilling in the deep waters off Angola is transferable to building windmills upon Lewis.

Just because they both involve "energy" doesn\’t make them the same thing at all. We wouldn\’t, for example, be terribly thrilled by the announcement that BP was going to start building nuclear plants now, would we?

Others think differently. In New York, members of the Rockefeller clan – descendants of Exxon\’s founder – called yesterday for radical reform of the company because they can no longer stomach its irresponsible attitude towards the climate. They want a board that will invest in renewables.

No, that\’s not the right response either. If you don\’tl ike the oil bit, sell the shares and use the money to invest in renewables. That\’s what stock markets exist to let you do: decide how you would like to allocate your capital amongst the available alternatives.

Meanwhile, North Sea oil and gas are depleting rapidly. BP and Shell know there are no more rich oilfields to be discovered there. They are being forced to invest much further afield in the search for the huge fields they so badly need.

Excellent, they are deploying their capital where they can add the most value to it, as they see it.

There\’s one thing he doesn\’t mention but which is also very important. So, imagine that Peak Oil is right.  Or, if you like, that renewables will overtake oil in the coming decades. Does this mean that Shell and BP should go for renewables in order to maintain the existence of the company? No, it doesn\’t, not at all. And it\’s that stock market thing again.

Individual investors shouldn\’t care about the long term existence of a companny: for they can shift out of it and into another one if that\’s what takes their fancy. Say oil does become a declining sector: fine, run the oil companies without reinvesting the profits in them. Pay out those declining profits as dividends and as the last oil wells stop pumping, scrap the steel and close the company, handing back the last few pennies to shareholders. Over the years that flow of theprofits will have been received by shareholders and they will do as they wish the cash, consume or invest it as they wish.

There is no reason why we should hope for or insist upon the continued existence of any one company: that buggy whip manufacturers did not become auto makers doesn\’t matter: that those who had invested in buggy whip manufacturers were able to take their money out of the declining industry and into the growing one did. The very fact that we have stock markets which allow us to do such things means that we don\’t have to insist that a company has an unlimited time horizon. If oil stops being a business worth investing in then there\’s no reason why we should insist that Shell or BP continue to exist, in or out of the oil business.

And this does now link back to what Leggett is saying about Shell and that wind farm. Shell ain\’t investing in it: so what? Who cares? We want experts in wind farms to be investing in wind farms, not experts in oil.

Those Adoption Targets

Even the Court of Appeal thinks that councils are working towards targets for adoptions:

Lord Justice Thorpe said that East Sussex county council appeared more concerned with meeting a quota than the best interests of the family.

The adoption proceedings began while the father was in hospital after a heart attack, but as soon as he was fit he instructed a solicitor to write to the council and ask that he be allowed to care for his daughter. The council reacted by placing the baby girl with prospective adopters the day before a court hearing at which her father intended to challenge the adoption.

Lord Justice Thorpe said: "The council\’s failure to answer that letter and subsequent placement on the eve of the hearing give rise to the clearest inference that the council was out to gain its ends by means more foul than fair.

"There are many who assert that councils have a secret agenda to establish a high score of children that they have placed for adoption… a history such as this only serves to fuel public distrust in the good faith of public authority."

Luvverly, eh? Children ripped from the arms of their biological parents so that a social worker can make quota?

Sadly, given the way in which the "best interests of the child" are considered paramount, and the way in which bonding with adoptive parents happens, even though the judges are highly critical of the actions undertaken, it has actually worked. This counts towards quota:

However, the judges refused the father leave to appeal on human rights grounds against the adoption order. Lord Justice Wall said: "In my judgment, the answer to this case is not to allow the appeal, but for this court to ensure, in so far as it can, that the conduct of this local authority is not repeated elsewhere."

Deborah Jean Palfrey

Oh Aye?

Police in Tarpon Springs, Florida, said the body of Deborah Jeane Palfrey, 52, was discovered in a storage shed near the mobile home of her mother, Blanche, where she had been staying while awaiting a jail sentence. Officers confirmed that a handwritten note was found with the body and that foul play was not suspected.

Palfrey, who became known as the "DC Madam", was convicted last month of money laundering, using the mail for illegal purposes and racketeering.

She faced a maximum of 55 years in prison but was freed by the court pending sentencing in July.

The problem for conspiracy theorists here is that she had already released the notes of who hadd been using her prostitution service. So there\’s no motive for the foul play…..maybe.

Felix Salmon Asks

So export growth is slowing, even as imports are rising again, despite the dollar only getting weaker over the course of the quarter.

To which I leave a comment: "J Curves". I\’ve now been asked to explain myself. Ahem.


Essentially it\’s a real world example of that folk wisdom, that things get worse before they get better.

The shape of the trend of a country’s trade balance following a devaluation. A lower exchange rate initially means cheaper exports and more expensive imports, making the current account worse (a bigger deficit or smaller surplus). After a while, though, the volume of exports will start to rise because of their lower price to foreign buyers, and domestic consumers will buy fewer of the costlier imports. Eventually, the trade balance will improve on what it was before the devaluation. If there is a currency appreciation there may be an inverted J-curve.

Following the depreciation / devaluation of the currency the volume of imports and exports will remain level due in part to pre-existing contracts for imported goods that have to be honoured. However, the depreciation will cause the price of imports to rise and therefore total spending on imports will subsequently increase. It is this that causes the worsening of the current account.

That Wikipedia entry is actually pretty good there. There\’s a great deal of speculation about the actual shape of such a J Curve, about how long it all goes on for, but the basic point sticks. It\’s not "despite" the dollar only getting weaker over the course of the quarter, it\’s "because " ditto ditto that export growth in cash terms is slowing even as imports in cash terms are rising again.

As well as pre-existing contracts, there\’s another contributor, that it takes time for people\’s behaviour to change. As an example, we\’ve been buying a certain material from Russia for the past 12 years. We\’ve just switched to a US supplier as a result of the changes in the rouble/dollar rate: about 9 months after it first would have been cheaper to do so.

Those J Curve effects do disappear though, in time. One thing that can delay them doing so though is that the currency declines again, leading to another such J dropping into our trade statistics. And if before that one has worked its way through the system, like a pig through a python, it drops again…well, you get the picture. Eventually of course the longer term effects overcome even a succession of J Curves and the trade balance comes roaring back.

As I fully expect the US one to, indeed, I\’d be really rather surprised if in 5 years time the US wasn\’t running a trade surplus.


You\’ll like this.

The PR bods at Aviva sent a release to all MEPs about how Norwich Union, Commercial Union and Hibernian will all now be known as Aviva.

The text:

Dear Member of the European Parliament,

I wanted to let you know about an announcement we have made today, confirming our plan to move to a single global customer brand – Aviva. The press release that was released at lunchtime is attached below for your information.

Aviva is the world\’s fifth biggest insurer, and a leading provider of long term savings, protection and general insurance products to Europe, where it operates in 15 countries.

We want to continue to thrive as a business and compete effectively on the world stage alongside our international peers; creating a brand that is known across the globe will be an important step in being recognised as a worldwide force in financial services.

We will complete the transition to a global brand over the next two years, with Norwich Union in the UK, Commercial Union in Poland and Hibernian in Ireland becoming Aviva.

If you require any further information, please do not hesitate to contact me.

Kind regards,
Pauliina Hakulinen

Senior Public Affairs Manager, Europe & International
Aviva plc

One recipient (well, one who actually read it) was Godfrey Bloom. His response, in full:

Dear Mrs Hakulinen

Thank you for your email, the contents of which I was already aware.  So you have thrown away 2 of the most well known brand names in the insurance world to replace it with what sounds like a Spanish Dance routine.  Clearly your company is run by morons.  I have sold my shares and will recommend all my clients and friends to do likewise.

Yours sincerely

Godfrey Bloom


Nice to have a politician who calls it as it is, isn\’t it?


Hoare & Co

This amuses muchly.

As reported earlier, Hoare & Co. insists that you ask before you link to their website.

So, I asked. 

On your legal page I note the following: "You may not link any other website to this website without obtaining the prior written consent of C. Hoare & Co." I would like to link to your website from my blog as an example of interesting legal disclaimers (aka money for ridiculous old rope selling).

And I received a response. 

Dear Mr. Worstall, I am afraid the bank does not like links to its website so sorry the answer is no. Regards,


Brown\’s Management

It\’s a sign of what Brown did:

The blow to tax revenues from the credit crunch is set to send the Chancellor plunging £16 billion or more deeper into the red over the next two years than he has planned, calculations for The Times indicate today.

The estimates of the toll on tax receipts by the National Institute of Economic and Social Research will aggravate the acute financial headache already facing Alistair Darling.

With a general election expected as soon as next year, the Chancellor is already boxed in. A still deeper slide into the red would leave him with little scope for pre-election giveaways or for extra tax and spending measures to help to stave off a recession.

The institute calculates that the severe economic and financial impact of the credit crunch will mean that the Chancellor has to borrow an extra £8 billion in the present financial year, 2008-09, and another £8 billion extra in 2009-10. The £16 billion total is the equivalent of adding nearly 4p to the basic rate of income tax.

The institute also sounded a warning that in a worst-case scenario, should the credit crunch intensify, the extra borrowing needed could double again, to £32 billion over two years. That would inflict on Mr Darling a deficit for this year of £59 billion, or 4 per cent of GDP.

After 15 years of a growing economy, the budget really ought to be in surplus, so as to provide room for an expansion of the deficit when the inevitable return of the business cycle happens.

He\’s spent it all though and looking at the difficulty he\’s having in restraining public sector wage rises, he ain\’t going to be able to get out of this easily.

If we actually have a recession, rather than just a slow down, I really wouldn\’t be surprised to see the PSBR going to 10% of GDP.

An Opportunity

Tens of thousands of cars will become almost worthless as a result of the decision to raise road tax on older models with higher carbon dioxide emissions by up to £245 a year.

Many families will find that they cannot sell their cars even though they are in good working order and no more than seven years old.

The Times revealed yesterday that the Treasury had quietly abolished the exemption from higher road-tax rates for cars that emit more than 225g of CO2 per km and were registered between March 2001 and March 2006.

CAP, which supplies the used car industry with data on residual values, said that many larger cars would be reduced to their scrap value because they would fall into one of the higher tax brackets being introduced for high-emission cars next April.

Hmm, I wonder how many of those will be left hand drive? Could do with a new (or different) car and buying in hte UK and driving down here might be a sensible thing to do….