Planners and Targets!

Glorious Tractor Production is up again Comrades!

Targets intended to cut long waits in hospital Accident and Emergency units have cost the NHS in England £2 billion over the past five years, an assessment of healthcare information has concluded.

The extra costs come from patients who are in danger of having to wait more than four hours in A&E – the target limit – and are admitted to hospital “just in case”. Many are later discharged the same day, suggesting they had no real need to be admitted, with today – Christmas Eve – having the highest proportion of patients sent out on the day of admission.

Primary care trusts have to pay as much as £1,000 per admission, compared with about £100 for a patient treated in A&E. So the costs of admitting a patient – even for less than a day – are large.

Data collected by the CHKS Group, an independent provider of healthcare information, suggest that over the past five years, about two million extra patients were admitted to hospital through A&E units in England.

The way they\’ve collected the statistics across the different nations of the UK seems to show that they\’re correct. My, how lucky we are to have such sensible people attempting to direct, in detail, 1.3 million people from the centre!

Small Point

Yes, yes, the Fair Tax proposal is silly in the extreme (just, for example, think of the posibilities of fraud, carousel type stuff perhaps, with a sales tax of 30-40% to be paid in one hit at the point of retail….) but this is a little illogical:

Without doubt it would increase inequality in a country that is already as dangerously skewed as it was in the Gilded Age of the 1920s. Averaged across the 1920s, the richest 10% of Americans grabbed 43.6% of total income (excluding capital gains), and the richest 1% a whopping 17.3%. In 2005 the comparable figures were 44.3% and 17.4%. The richest Americans already have a much greater slice of the pie than they have had for several generations and are doing very nicely indeed under a graduated tax rate (complete with Bush\’s tax cuts). A flat tax would destroy the system that seeks to redistribute some of the country\’s finite wealth amongst its people in the form of schools, roads and other public goods. And before the whining begins, this isn\’t a cry of class warfare, it\’s economic common sense. Even if you reject arguments around fairness and moral obligations to those less fortunate, by and large economies with more equality are more prosperous and the countries more stable.

Hmm, prosperity and stability coming from equality. The author has just proved that the US is unequal (actually, the inequality by market incomes, which is what he\’s using, is about the same as that of Sweden. A Gini of .48 to one of .46. Sweden\’s taxation system does a great deal more to alter that distribution than the US system does. Oh, and the UK market income distribution is even more skewed at .51. These figures are from a recent Smeeding paper drawing on the Luxembourg Income Study.) : the US is also the most prosperous nation on earth (leaving aside micro-states) and at 220 years or so and rising with the same constitution (the longest in the world for a written one I think?) also the most stable.

So I think that contention about the link between equality, prosperity and stability can be put to one side, don\’t you think?

Client States

There are legitimate arguments for this:

Billions of pounds are being spent on schools in deprived districts in Labour strongholds at the expense of pupils in more affluent areas, new figures show.

Precisely because Labour does best in deprived areas, and deprived areas need more to spend on education.

Having been even handed about it, let me say that I don\’t actually believe it. It\’s part and parcel with the distribution of health spending (remember when it was Labour held marginals that weren\’t getting local services cut?). It\’s actually exactly what we would expect politicians to do: spend money on their supporters at the expense of those who do not support them in order to tie in their votes. Almost a version of gerrymandering, the creation of client states.

Labour has more than doubled education spending since 1997 from £29 billion to £63.7 billion this year.

But there are already fears that the money has not been well spent.

Gosh, there\’s a surprise. The important lesson still hasn\’t sunk in: it\’s not how much you spend, it\’s how you spend it. According to one or other of the various such rankings, Finland and Sweden have the best education systems in the OECD. They both have variations on a voucher system for education funding.

This might not be a coincidence, you know?

Ooooh, No Dean, No…..

There is no dispute that there has been a massive upward redistribution of income over the last quarter century.

Now I normally quite like Dean Baker: he knows his onions and while our world views are radically different his campaign to try and get journalists to understand numbers rather parallels my own mocking of those who don\’t. But that\’s an outrageous statement, worthy only of the most mouthbreathing type of class warrior.

I would be astonished if anyone either literate or numerate would actually agree with it, far from admit that there is no dispute, that there has been an upward redistribution of income. For if here had been, we should see that those at the bottom were getting lower incomes now than they were.

And as people like Paul Krugman (with whom Dean has co-authored at least one paper, so a reasonable authority to use here) keep telling us, this isn\’t true. Incomes may have been flatlining for 30 years (well, wages actually, not total compensation, so even that\’s pretty dodgy as evidence) but they haven\’t been going down.

Now what is true is that the rich have been getting richer faster than the poor have been getting richer. That is, we\’ve not actually had  "redistribution" of income, we\’ve had the new income being created distributed in an uneven manner. Inequality is increasing, yes, but that isn\’t the same as stating that the poor are getting poorer.

The NYT is anxious to tell us that a big part of the upward redistribution was just “basic economics.” It tells readers that:

“One reason for the change is basic economics. In a global, high-technology economy the most successful workers can be more productive and can play on a bigger field.”

Is that so? How about the fact that in a global, high-technology economy the “most successful” workers face a much bigger group of competitors who can depress their wages. Isn’t that also “basic economics”?

As I\’ve been a big supporter of that argument that the NYT puts forward I have to say that I agree with it. One thing that strikes me though is that this is the first time I\’ve seen anyone other than myself actually advance it (shows I\’m not reading enough, obviously).

In more detail it goes roughly like this. The increases in income inequality seem (if we believe the Piketty and Saetz numbers) to be largely driven by strongly rising incomes in the top 1%….indeed, in the top 0.1%, even 0.01%. Now it\’s not all that difficult to hold the thought that there are some people who can not only compete on the national stage, they can also do so on the global. Stephen Spielberg\’s $220 million a year is clearly not funded by the fact that he is one of the best filmakers in the US: rather, by the fact that he is one of the best in the world. I think I\’m right in saying that Hollywood\’s overseas takings have in recent years passed domestic for the first time. Tiger Woods\’ $100 million a year  would  not be funded purely by the US market for golfers and endorsements: it requires avid golfers in Taiwan, Dubai, the UK, to also be passing over the occasional dime or two. So those global superstars are indeed powering away from the rest as a result of globlisation: not because of any import effects but rather because they can export their goods and services to 6 billion, not 300 million.

The answer to the second part is that yes indeed, this is basic economics: we have been seeing it in programming for example. That there are millions of such (OK, tens of thousands perhaps) in India, Russia etc, willing to program for some fraction of extant American programming wages has indeed depressed US such wages. So? That doesn\’t change the fact that those capable of bestriding the globe, collect global instead of national rents for their scarce talents, have, as a result of globalisation, been able to do so.

The fact is that CEOs and other highly paid workers have seen their pay explode in ways that is not matched by the most highly paid workers in Europe, Japan, and other wealthy countries.

This isn\’t quite true. Income inequality has been rising within every country (as opposed to global, which has been falling, with all the usual caveats about Concept 1, 2 and 3) which rather supports the globalisation argument. It is, as the word suggests, a global phenomenon, as is the rise in national income inequality (the simplest way to see this is to look at the Gini for OECD countries over time…I would direct you but I\’m on dial up at present).

Perhaps one trivial example. If I were confined to writing for only UK outlets (as would pretty much have been true before the internet) my income from said writing for this year just ending would be around UK median income, perhaps a little lower. As I\’ve been able to write for US outlets as well (in the same way that Dean now writes for The Guardian….damn Yankees, coming over here and stealing our jobs!) and more directly for US readers and advertisers my income has been about twice US median household income.

There are indeed effects from globalisation which are making average incomes lower than they otherwise would be, the result of being able to import labour contained in goods from other, lower waged, countries, but I don\’t think enough is made of the point that if, as we are consistently told, the rise in inequality is concentrated in the effects the very top of the income distribution has on such distribution and averages, then exports are more likely to be the explanation than imports. Hmm, no, maybe that\’s too strong a statement. That not enough attention is being paid to the possible effects of those exports as opposed to the income effects might be better.

It is very much a debatable question as to whether there is anything intrinsic to the economy that lead to the explosion of inequality in the last quarter century.

Well, as above, I think Dean\’s got it the wrong way around. There\’s not much debate that globalisation is increasing within country inequality, and it really is debatable as to whether there\’s been an upward redistribution of incomes.

MPs\’ Pay

I\’m afraid Iain Dale gets it rather wrong here:

Whenever I have written about this subject before it\’s provoked a torrent of responses from people who believe MPs shouldn;t be paid at all, let alone paid £60,000. Absolute tosh. What those people are arguing for is a Parliament full of rich people who can afford not to be paid. Surely we should pay our MPs at a level where few would actually be put off standing for Parliament. I\’d like Parliament to be representative of a number of professions, but few people from those professions would think about standing for Parliament because they would have to take a pay drop. Relatively junior managers in industry or the public sector now command salaries in excess of what MPs earn. What message does it send out that we are happy to pay MPs the same as the Deputy Public Affairs Manager of an NHS Trust?

The value of any job in a market economy is set by supply and demand. We have a (relatively) fixed demand for MPs. Some 630 or so (roughly, isn\’t it?).

At the last general election some 3,000 people stood for one of those seats. Some will say that some were markedly unqualified (from Monster Raving Loonies to Trots of various types) but this isn\’t, in a democracy, a valid position to hold. Any and every one of us is qualified to be an MP: that\’s what rule by the people means.

So as we have 3,000 qualified applicants for some 600 jobs, clearly, we are overpaying those who do it. MPs pay should therefore be cut, radically.

In fact, back in the day when being an MP attracted no salary at all (only Ministers were paid) we had no shortage of MPs. Thus we would have no shortage now if MPs were unpaid now (that is arguable, but do you think there would be a shortage if this were the case?).

Cut MPs pay and cut it now!

You What?

GORDON BROWN has set himself on a collision course with the legal establishment over plans to give civil servants and government agencies the power to remove people’s passports without going through the courts.

Senior legal figures, including two former attorney-generals and a lord chief justice, have expressed deep concern about preparations to adopt new powers to confiscate passports. They warn the government not to use reform of prerogative powers as an excuse to force through a “serious” curtailment of long-standing freedoms.

They have attacked proposals in the child maintenance bill, now going through Parliament, to allow civil servants to prevent errant fathers who refuse to support their children from travelling abroad.

Let me get this straight, a clerk in the Child Support Agency (which, as we know, is so terribly efficient in itself) has the right to take your passport away? That is the proposal?

Crippled Jesu C on a crutch, what will they think of next? I think we\’d all be wise to take William Buiter\’s advice, collect as many nationalities and passports as you can.

That Quote

Jasper Gerard:

Perhaps David Starkey is right and the Queen is a philistine. But as he churns out shows about monarchy, why trash the brand? He accuses the Queen of agreeing with Goebbels that \’every time I hear the word "culture", I reach for my revolver\’. So he will forgive me if I point out that the quotation wasn\’t Goebbels\’s. It originated with Nazi playwright Hanns Johst.

And if I may complete the corrections, it\’s is said of Goring, not Goebbels, and it is not revolver, but "Browning".

If is, you see a pune*, a play on words.

 

*Pterry spelling: and yes, Browning the American poet and Browning the gun. Which is what Goring is said to have carried rather than a Luger.

Willy, Willy….

One of his five great ideas of the year:

Cambridge University\’s Brendan Simms is an extraordinary historian and his reinterpretation of British history in the 18th century is one of those sleeper ideas that, along with others, is gradually challenging know-nothing Euroscepticism. His argument in the engrossing Three Victories and a Defeat is that Britain won the military space to build an empire and industrial hegemony through consistent and deep involvement in European politics, ensuring that no one European power could ever challenge us.

It was when we followed the Eurosceptic injunction to forget Europe that we suffered ignominy and disaster, losing the war in America as united Europeans undermined our war effort and then watched Napoleon dominate Europe.

We never were, and never will be, capable of prospering without engaging in Europe. It may be wishful thinking on my part, but visceral Euroscepticism increasingly seems batty – and the planks with which it is built rotting.

He seems not to notice that this is, in fact, the Eurosceptic case: that we indeed don\’t want one dominant European power which constrains us. In the way in which the assembled European powers now make 80% of our laws, just as an example. The historic engagement with Europe was in fact to make damn certain that such a situation never arose.

Somewhere….

Our Basil is laughing quietly to himself:

Roman Catholics have overtaken Anglicans as the country\’s dominant religious group. More people attend Mass every Sunday than worship with the Church of England, figures seen by The Sunday Telegraph show.

This means that the established Church has lost its place as the nation\’s most popular Christian denomination after more than four centuries of unrivalled influence following the Reformation.

The conversion of England, just what he used to pray for.

Pricing Carbon

This makes sense:

Coal-fired power stations, airport expansions and new road schemes could all be put on hold following a decision by Gordon Brown that ministers must in future take account of the true economic cost of climate change damage.

Ministers have been instructed to factor into their calculations a notional "carbon price" when making all policy and investment decisions covering transport, construction, housing, planning and energy.

Unfortunately, this doesn\’t:

The "shadow price for carbon", representing the cost to society of the environmental damage, has already been agreed for every year up to 2050 by government economists. It will be set at £25.50 a carbon tonne for 2007, rising annually to £59.60 a tonne by 2050.

That\’s actually higher than the number the Stern Review came up with and that in itself was an outlier. Others (William Nordhaus) have put the appropriate cost at one tenth of that figure. Adding externalities into the costs used to make decisions is great, using the wrong cost isn\’t: it leads to resource misallocation and thus makes us poorer.

But then that\’s the problem with any form of political action about climate change. It depends upon the politicians being well informed, not subject to lobbying and so on. And as ethanol, biofuels, fleet emissions standards, the CFP, the insane insistence upon recycling everything show us, this simply isn\’t true.

Tax Incidence, Tax Incidence

Gaaaah! Richard Murphy again on a US proposal to reduce the corporate income tax:

Yet again, the corporate world seeks to lower its tax bill by shifting it onto ordinary people with a smaller capacity to pay.

It\’s not even controversial, it\’s a well known fact, that corporations do not in fact bear the burden of the corporate income tax. The actual burden is carried by some combination of the workers, in lower wages, the customers in higher prices and investors in lower returns.

The Congressional budget office saya that, in the US, more than 50% is bourne by the workers. Another more recent international paper says that in the long term, a $ 1 raised in corporate income tax reduces the workers\’ wages by more than $ 1.

Lowering the corporate income tax therefore benefits the incomes of the workers.

Does Murphy simply not know this basic point?

Colours In Fashion

Hmmm.

It\’s nearly tautological that colors come and go with fashion. But it\’s empirically interesting to ask which colors and why? For starters, is Pantone actually the leader it\’s posing to be, or does the designation of blue iris reflect the net leanings of fashion\’s myriad of tastes and designs?

From memory (as ever, rather fallible) there\’s something of a get together between the yarn, weaving and fashion industries which details which colours are going to be available for the mass market 18 months hence. Certainly, I\’ve been told this is true for knitwear.

Thus the way that colours flow through fashion might simply be a result of a cartel.