The Boy Dave (M)

Quite:

It is hard to make a speech about the European Union’s goals and not, at some point, seem to move beyond ambition to delusion. David Miliband, the Foreign Secretary, failed to avoid that pitfall entirely yesterday

Banana Republics

This is interesting:

Victims of the bloody paramilitary conflict in Colombia are suing the US banana company Chiquita, accusing it of funding and arming guerrilla groups blamed for torture and thousands of killings.

The lawsuit, filed in New York, seeks $7.86 billion (£4 billion) on behalf of 393 victims and their relatives. They accuse Chiquita Brands of complicity in hundreds of murders carried out by the United Self-Defence Forces of Colombia, a right-wing paramilitary group known by its Spanish acronym AUC.

No doubt the civil suits agains consumers of cocaine are in preparation: they have been, after al, responsible for similar funding, have they not?

Abu Hamza Extradition

You know, this is one of those tough cases whih rather test one\’s devotion to civil liberties. That Abu-Hamza\’s a bad \’un is, I think, beyond doubt. However:

Abu Hamza al-Masri can be extradited to the United States, a judge ruled yesterday – three and a half years after the extremist preacher was arrested on a “fast-track” warrant.

Not happy about that. For, you see, he\’s a British citizen. Yes, I know, he may have got that through a bigamous marriage but the solution there is to prove that and then strip him of that citizenship.

Hugo Keith, representing the US Government, told the court that the cleric had been involved in “blatant violence, kidnapping and terrorist training”. Mr Keith said: “The general allegation is that Hamza is a member of a global conspiracy to wage jihad against the US and other western countries. He advocates the defence of Islam through violent, unlawful and armed aggression against the enemies of Islam in order to influence the US government.”

He may well be, I think the allegations (for whatever tiny amount my opinions are worth) probably are true. But, you see, in a free country, it is up to you to show that you have sufficient evidence for trial before you whisk him off to another country to try him. Whether or not he should be a British citizen, whether or not he will remain one, are not the issues: he is at present one and so should be afforded the protection of the State.

Yes, even though we\’ve got a law allowing these fast track extraditions: we shouldn\’t have that law is the point.

As Larry Flynt said about freedom of speech (wasn\’t it?), that\’s the whole point of such laws. If they\’ll protect bastards like me then you can be sure that they\’ll protect you, too.

I\’ve no problem with Abu Hamza being extradited, no hassle with the idea that he\’ll likely spend the rest of his life in jail, whether in Yemen or the US. All I want is that he gets the same treatment I would want for myself: that before extradition those doing the extraditing show that they have reasonable evidence for a trial.

Not this fast track shit.

Those Wonderful Planners Again

Gosh, how wonderful of them to consider each and every detail and then make the wrong decision:

Rail industry leaders have accused the Government of wasting hundreds of millions of pounds and undermining the environmental benefits of rail travel by choosing diesel instead of electric trains.

Iain Coucher, chief executive of Network Rail, has written to the Department for Transport, describing its failure to electrify more lines as “very short-sighted”.

In the letter, a copy of which has been obtained by The Times, he says Britain risks being left with an outmoded, inefficient and increasingly expensive railway because the Government has “bet on the wrong type of fuel”.

Britain is one of the only countries in the world that continues to use diesel to power high speed trains. Only 39 per cent of the network is electrified, one of the lowest proportions of any leading European country.

In July The Times disclosed that an industry study had found that modern diesel trains were emitting so much pollution that it would be greener to travel by car.

The Government is planning to spend £1 billion on a new fleet of diesel trains, which will begin trials in 2012, start carrying passengers in 2015 and remain in service until 2045. They will emit at least double the carbon dioxide emissions per mile of a standard electric train.

I think it\’s John B who keeps telling us of the benefits of electric trains, especially if we add something interesting like regenerative braking.

Aren\’t we lucky to be ruled by such clever people?

Polly\’s Politics

This is interesting. The Lib Dems are only important when:

But here\’s the paradox. Despite plunging as low as 11% in recent polls, politically this is their best opportunity for years. They are only needed when the other parties fail too many voters. Last time this happened in the early 1980s, when the choice presented to the voters was Michael Foot\’s catastrophically unelectable Labour party versus Margaret Thatcher\’s slashing and burning of jobs, lives and public services from which the social fabric has not yet recovered. Between that Scylla and Charybdis there was a genuine need for a sane, moderate alternative. This time they are needed because the other two have moved too close together.

Of course, back then they were the Liberal Party. And in that hour of need Polly helped the SDP, the one that split that necessary alternative vote and made sure that Thatcher and Foot were the only viable alternatives. Well done there.

Whatever your view, voters deserve a choice on the big issues where the other parties merge: Lib Dems are strongly pro-European, seeing a closer future across the Channel than the Atlantic.

All parties other than UKIP are strongly pro-EU. So the choice is, here, between UKIP and everyone else.

There rest of it seems to a pean to the virtues of PR: the one way of ensuring that people never actually have a proper choice ever again.

Accuracy in Reporting At The Guardian

This is good from Alexander Chancellor:

 

So it is with Google, the latest wealth-spewing monster of the internet. Its two young founders – Larry Page and Sergey Brin – are each worth around $20bn, much the same as Saudi Prince Alwaleed bin Talal, who is ranked by Forbes magazine as the 13th richest person in the world. But unlike him, they don\’t have private jets, Rolls-Royces, yachts or any of the other pointless accoutrements of the super-rich. The Prince has just bought a new A389 superjumbo, the world\’s biggest passenger aircraft (list price $319m), as his own private plane, which he will convert into a flying luxury hotel and use to carry his fleet of limousines with him around the world. Page and Brin each own nothing more flashy than a modest Toyota Prius, the environmentally virtuous hybrid car.

Really?

Sergey Brin and Larry Page, the low-key co-founders of Google Inc., set tongues wagging last year when they bought a used Boeing 767 widebody as an unusually large private jet. The 767-200 typically carries 180 passengers and is three times as heavy as a conventional executive plane. Mr. Page said last year that he and Mr. Brin would use it for personal travel, including taking "large numbers of people to places such as Africa." He said it would hold about 50 passengers when refurbished, but declined to comment on other details of the plane, which has been kept ultra secret.

Caroline Lucas on Aviation Emissions

Oh dear, oh dear oh dear. Our Ph.D. in Elizabethan literature still hasn\’t quite managed to absorb the major point about cap and trade systems for carbon emissions.

Now I\’ll agree that she and her Green pals have some decent points here. If emissions from aircraft cause more warming (due to altitude) than emissions on the ground then there is a case for a multiplier to be added to the cost of aircraft emissions. They\’re also absolutely correct that permits should be auctioned, not given away.

However:

Essentially, the idea is that a cap is set on aviation\’s overall emissions, and the airlines are allocated a certain number of permits to cover them. If they are efficient, and don\’t need all the permits, they can sell them and if they need more, they can buy them.

Erm, by allowing airlines to buy permits not originally issued to airlines, we\’re not in fact capping airline emissions. Which is a good thing because we don\’t actually want to do that.

It doesn\’t take a Nobel Prize winner in physics to work out that the only way this can possibly reduce aviation emissions is if there is a sufficiently rigorous overall emissions cap, and serious limits to the amount of extra permits aviation is allowed to buy from other sources (ie other industrial sectors, or projects abroad).

But that\’s the point. We don\’t want to reduce airline emissions. We want to reduce total emissions. We want to reduce the lowest value emissions in fact, while allowing the higher value ones to continue (in detail, those emissions where the value is greater than the costs they impose).

Indeed, according to the commission\’s own figures, the proposal would mean that by 2020, instead of growing by 83% under a do-nothing scenario, aviation emissions would still grow by an extraordinary 78%. And since the effect of the scheme would be to add only a maximum 9 euros to the price of a ticket, it\’s hardly surprising that it will have almost no effect on aviation demand. By the same date, under the proposals, instead of growing by 142%, demand is still predicted to grow by a staggering 138%. If that\’s global climate leadership, I wouldn\’t want to see climate complacency.

It really does look like Dr. Lucas doesn\’t actually understand the point of cap and trade at all. We\’re not trying to reduce emissions from any one source. We\’re trying to reduce total emissions. And what we\’re doing by cap and trade is using a market mechanism to try and find out which are the valuable emissions which should continue and which are the low value ones which should be curtailed. She is insisting that a specific sector must be curtailed: but the point of cap and trade is to find out which sector should be curtailed.

Essentially, she\’s acting as a central planner: avaiation emissions should be x. But cap and trade replaces that planner with the market. As long as total emissions are under y, we don\’t actually care whether the aviation sector\’s emissions are under x.

Indeed, we can go further. Imagine that CO2 extraction from the atmosphere is successful (Wild idea, I know, but something like Planktos and iron fertilisation of the oceans.) . We then get to a point where we\’re entirely happy for aviation emissions to be above y, let alone x, because we\’re extracting CO2 as well, meaning that total emissions are below y. And the thing is, once we\’ve set our cap and instituted a market in the permits, whether or not this is a good idea will be revealed by the relative prices.

In short, by insisting that aviation be treated as a sector which cannot buy permits from other parts of the economy, Caroline Lucas is showing that she doesn\’t understand the point of a cap and trade market in permits in the first place.

The US Economy

Only a thought here:

There is not enough demand in this economy, and there was a time when progressives called on the government to help supply it.

Err, increasing demand in the economy. As far as I remember there\’s really only one way the Govt can do this. Defecit spending. Is that really what progressives in the US should be calling for? More defecits?

On Being Ruled By Tax Exiles

I can sort of understand the logic here:

A forthcoming constitutional reform bill could include measures to stop tax exiles from sitting in the House of Lords, the cabinet secretary said yesterday amid further questions about the tax status of the millionaire Tory donor Lord Ashcroft.

Of course, it\’s about nailing Ashcroft rather than there being any principle to it but let\’s take the argument at face value.

We shouldn\’t be ruled by people who do not live under the same law as us. It should not be possible for people who are not resident and subject to UK law to influence said law over those who are resident. That is the point, isn\’t it?

OK, then we shouldn\’t be ruled by the European Union then, should we? Should not allow non-residents to make 80% of our law for us.

I Hadn\’t Expected This Problem

This is a bit of a surprise, I must admit:

An American judge has prevented Deutsche Bank from repossessing 14 homes because the bank could not prove it owned the defaulting mortgages involved. The ruling by Ohio district court judge Christopher Boyko could have serious repercussions for banks and mortgage lenders, for whom the pooling of mortgage securities is a $6,500bn (£3,200bn) industry.

Pooling involves taking hundreds if not thousands of mortgages, putting them in one unit, and then selling parts of that unit to others. As a result, it can often be unclear which bank actually owns the individual mortgages.

Judge Boyko had ordered lawyers acting for Deutsche Bank National Trust Company to prove the lender was the ultimate owner of the mortgages. When it could not do so, he dismissed the cases.

If this is a general thing affecting a significant proportion of the pooled mortgages then there\’s actually a very much larger problem underlying the sub-prime mortgage problem than we at first thought. It\’s not that some of the paper is worthless, it\’s that if it cannot be attached to the underlying security then all of it is (technically) worthless.

But I can\’t believe that it is. For the pooling of mortgages has been going on for decades (it\’s one of the products talked about in Michael Lewis\’ "Liars\’ Poker" which is set in the mid-80s) and there will have been defaults before. Indeed, Fannie Mae and Freddie Mac exist to provide exactly this sort of pooling and securitisation.

So what has actually happened, anyone know? A particularly recalcitrant judge who is going to get over ruled? Or in the scramble to issue these loans, did some of the paperwork get missed?

Pay As You Throw

We\’re given some costs on this new pay as you throw scheme for domestic waste:

The Department for Environment, Food and Rural Affairs estimates that start-up costs for pay-as-you-throw schemes will be up £200,000 per council, with annual running costs between £200,000 and £500,000. If the schemes were rolled out across Britain, Defra says they could cost up to £60 million a year on average but with potential savings of up to £200?million from low waste costs.

As ever, there is no estimate for the greatest cost in the scheme. The cost of the households in actually sorting their waste. A few months back I phoned Defra and asked them what in fact was their estimate for the time it would take to sort materials so as to comply with the recycling schemes.

They said they didn\’t have one. Which is odd, because an American study (done in Seattle) showed that for purely domestic non-food waste it took 15 minutes per household per week. Include garden and food waste and it rose to 45 minutes or so. 24 million households and an average wage for the country of £9 an hour and you get costs from the time spent preparing for such a recycling system at £2,8 billion to £8.4 billion.

Now I agree that pay as you throw is only part of it, it isn\’t the whole sorting and recycling thing itself, but then again it is indeed part of the whole same movement. What the supporters of changes in the way that rubbish is dealt with is need to is show that the benefits of the new system are greater than the costs: and none of them are even including that £3 to £8 billion number in their calculations. Presumably because they know that if they do they cannot show a benefit over such a large cost.The entire monstrosity of a plan is simply going to make us all poorer by billions of pounds.

That\’s why no one is willing to provide accurate figures as to the costs and or the benefits.

 

Johann Hari and The Laffer Curve

Slighty unfortunate that Hari makes exactly the same mistake about The Laffer Curve that Jonathan Chait does.

Trying to explain this idea to an eager Cheney, "Laffer pulled out a cocktail napkin and drew a parabola-shaped curve on it," writes the liberal New Republic journalist Jonathan Chait. "The premise of the curve was simple. If the government sets a tax rate of zero, it will receive no revenue. And if the government sets a tax rate of 100 per cent, the government will also receive zero tax revenue, since nobody will have any reason to earn any income. Between these two, Laffer\’s curve drew an arc. The arc suggested that at higher levels of taxation, reducing the tax rate would produce more revenue for the government."

No, there\’s a reason it\’s called the Laffer Curve rather than the Laffer Arc. The point is that there is a  level of taxation (and we must be very careful to point out that this will vary for different taxes too) which maximises revenue collection. Go to the right of that point and raising the rate will reduce collections. If you\’re already to the left then reducing the rate will indeed reduce collections.

The point is that if you\’re to the right then reducing the rate will increase collections….and vice versa, if you\’re to the left then increasing the rate will.

We also need to be careful to distinguish between the short and long term. Let\’s have a completely made up example, shall we? OK, we have a taxation system which, via its deadweight costs (which is what we\’re really talking about with the Laffer Curve, the lifting of them, and there isn\’t a single economist alive who would try to insist that taxes don\’t have deadweight costs) leads to a growth rate of 2% pa. We fiddle around with such taxes until we\’ve engineered a growth rate of 4% (well, I did say this was completely made up, didn\’t I?). In the process, we\’ve reduced tax collections by some amount. And we find that we\’ve reduced collections in year two, and three, and four….does that mean we\’ve reduced collections for all time then?

Clearly, no, because the difference between a growth rate of 2% and 4% compound quickly (for one meaning of "quickly") starts to get noticed. For example, a 2% growth rate means the economy doubles in size in 35 years or so. A 4% one means it doubles in 17.5 years or so.

So if we had a 4% growth rate, and taxation levels of only 75% of those in the 2% growth rate scenario, you would see that at some point in the future total tax collections in the higher growth scenario would in fact be higher than in the high tax scenario.

OK. So The Laffer Curve is not buncombe then. The statement that always lowering taxation rates will always increase revenue is indeed buncumbe though: as is the statement that they never will.

The question is, where are we on the curve and further, what timescale are we talking about?

I\’ll also add my usual whine here about the phrase "supply side". It has come to mean, in the annals of American liberalism, exactly this about marginal taxation rates. But that\’s not the way it started out, not the way I continue to understand/use it. It\’s about reform of the supply side. Privatising BT, breaking up AT&T, these are also supply side reforms. Education vouchers would be supply side reform, GP fundholding was a supply side reform. It\’s about what it says on the tin: reforming the supply side of the economy.

From 1947 to 1973, the US economy grew by 4 per cent a year – while the richest Americans paid a 91 per cent top rate of tax.

Err, Johann? A little research perhaps before you write about things where you have no knowledge base?

President John F. Kennedy proposed a series of tax rate reductions in 1963 that resulted in legislation the following year that dropped the top rate from 91 percent in 1963 to 70 percent by 1965. The Kennedy tax cuts helped to trigger the longest economic expansion in the history of the United States. Between 1961 and 1968, the inflation-adjusted economy expanded by more than 42 percent. On a yearly basis, economic growth averaged more than 5 percent.

That\’s just sloppy.

 

 

Was Reagan a Bigot?

From the Corner:

I\’m getting a lot of emails pointing out that of course people believe Reagan was a bigot. Let me clarify what I meant — nobody who has seriously examined the man and his political career believes that Reagan is a bigot.

OK, and Paul Krugman responds:

That is, of course, not the question. Reagan’s personal attitude is of no consequence. The question is whether he deliberately appealed to bigots, as a political tactic. And he did.

OK, fair enough all round I\’d say. Reagan appealed to bigots in the same way that Jesse Jackson did (Hymietown) and Al Sharpton did (Tamara Brawley).

Or is it that only southern whites are bigots who politicians should not attempt to attract while other kinds of bigots are good clean voters?

The Yazzmonster

Should we, the unwanted and unloved Indy and Guardian sorts get the right to opt out of the licence fee?

Yes, of course you should. Everyone should have that right: although it would be better expressed as the right to opt in. You know, privatise the BBC and then suggest that those who wish to enjoy its output pay for it.

I\’ll tell you what\’ll be the first thing to disappear though: those appearance payments, those £50 and £100 cheques that you get for appearing on a radio programme. You\’ll be, I wager, less keen to appear at that point anyway.