Well, yes, there’s a point here

A family-of-four who live on a council estate in Southampton were given a taste of a different life by swapping with a millionaire couple from Wiltshire for a week.
The Leamon and the Fiddes families are participants in a new series of Channel 5’s Rich House, Poor House, which sees a family from the richest ten per cent of British society swap homes (and lives) with a family from the poorest ten per cent.

However, viewers took to Twitter to insist that Andy and Kim Leamon and their two children from Southampton who have £170 a week to spend on food, clothes and socialising after paying their mortgage and bills are certainly not struggling.

It’s not, by local standards, exactly great riches, to be sure. But that is £2,210 of disposable income per person per year. That’s on the fringes of the top 30% of all global incomes. 70% or so are poorer.

Note again, this is their disposable income, after housing, bills and taxes, the global income number is before all of that. Or, as we might also put it, this is unimaginable riches by global or historical standards.

As Dame Margaret, Lady Hodge, points out, why don’t they do it in Liechtenstein like respectable people?

Britain is the “country of choice for every kleptocrat, crook and despot in the world”, a Labour MP has said following revelations by the Guardian and media partners of a massive money-laundering scheme run by the government of Azerbaijan.

Margaret Hodge said the UK thought itself to be a “country of integrity, respectability and trustworthiness”. However, recent money-laundering scandals featuring Azerbaijan, Russia and the offshore industry showed this self-belief to be “flawed”, she told parliament.

Hodge – a former chair of the public accounts committee and an outspoken critic of corporate tax avoidance – was speaking in an adjournment debate on Thursday. She told MPs that UK corporate structures were being used for a wide range of crimes, including tax evasion and bribery.

They’ll be after My Fair Lady next

A theatre company has been embroiled in a gentrification row after it announced a series of £55-a-head “immersive” Cockney-themed dinner parties to be held in a traditionally working-class area.

The firm apologised after it released promotional material that showed a cast of tracksuited characters, including a pregnant woman drinking and smoking and a tattooed man striking an aggressive pose, in a pub.

The Cockney’tivity Christmas dinners are scheduled to take place across three weeks in December in an “authentic Hackney boozer” in London’s East End. Attendees will get a three course meal and a “Cockney Christmas story” from the actors.

The company, Zebedee Productions, said it would be a “proper celebration of east London culture” and said many of the people involved had links to the East End. But critics pointed out the entry fee meant that, while local working-class people were being sent up, it was unlikely they would be able to afford to be in on the joke.

“The local people, they just get laughed at, they get joked at and there’s no respect there,” said Joe Ellis, who was born and grew up in the East End.

Josh Clarke, who helped run a campaign to gain asset of community value status for a local pub to save it from closure, said: “These establishments want to keep a certain kind of person out. There’s no one involved in that who said: ‘Let’s respect Cockney culture.’”

The traditional Cockney response to someone managing to get punters to pay £55 pounds for a £10 meal would be along the lines of giggling over that first half and half* and by the time the second was easing down formulating a plan to similarly fleece the mugs.

*Light and lager when I was serving bar out in Stratford, light and bitter by then being for the older crowd.

Perhaps Mr BiS, our expert on these matters, would care to comment?

A very fun piece of wibble

Chad Parkhill visited Italy as a guest of Gruppo Campari

So, journo gets a freebie. And they are fun freebies, a wander around Italy, decent meals, nice hotels, visits to distillers of amari, wondrous actually. The quid pro quo being that you’ve then got to get a piece or two describing the underlying subject, amari, into the papers.

*Headscratch, headscratch.*

How, The Guardian, hmm, what angle?

What kind of carbon footprint, I wonder, is contained in the average bottle of Averna or Bràulio? And how could anyone ever know, given that the recipe is such a closely guarded secret that neither Fici nor Peloni can answer any of my questions about which other parts of the world provided the base ingredients for their amari? (Gruppo Campari responds to my queries about the sustainability of their products with general comments about how the group has “always invested in the quality of its products, the health and safety of its workers and in safeguarding the environment”.)

Climate change! A week in Italy and a decent Guardian fee are secured!

Yes, this is how newspapers work.

Or as I put it over there:

Just to let others know how this works.

So, Campari organises a PR trip. Oooh, something like a week long all expenses paid trip around Italy for an Oz based journalist. Nice lunches and dinners, decent hotels, go see one of our amari producers in Sicily, another at the other end of the country, in the Alps, you know, a very fine press jolly.

The quid pro quo being, get our products into the newspapers. Please. No pressure, of course. But we’ll be running another jolly about, say, vermouth, next year as well.

No, really, this is how it works. One Spanish city once invited me to an all expenses paid (only within Europe to be sure) three day jolly for an announcement about their installation of solar powered LED street lights. Woo Hoo!

Really, these things are the journalistic equivalent of “What I did on my holidays” essay we all faced in the first week of September at school.

The trick is to find something to say about the product so as to get a placement in a paper. Thus the climate change angle. You know, whatever gains the space because there are more jollies next year.

More on David Lammy’s Oxbridge numbers

Only one in four Cambridge colleges made offers to black British students in every year between 2010 and 2015. Of those, many made just one or two offers apiece. And each year over that period, a quarter of colleges failed to make any offers at all to black British applicants.

Hmm, OK, well, is this bad or is it statistical normality?

During this period, an average of 378 black students per year got 3 A grades or better at A-levels.

It’s not quite true that 3 A grades is the starting point for Oxbridge access because they will indeed take the potential not just the achievement to date into account. But, still, a useful starting point.

There are 38 colleges at Oxford, 31 at Cambridge (close enough anyway). Given that not everyone with that sort of level of academic achievement actually tries to enter Oxbridge then what do we think should be the offer rate to these Black Britons? It’s most certainly not 4 offers per college per year, is it? Or 6, or whatever 400 divided by 70 is.

Given the small numbers the stats are going to be weird anyway, but what is the number of total offers made by all colleges, related to the total number of people who get 3 A grades? Vriance from that would probably be a good starting point for us.

Lammy does however make a good point:

With this degree of disproportionately against black students, it is time to ask the question of whether there is systematic bias.

I’m certainly willing to believe there is. I am not deluded enough to think that Britain is perfect, nor its education system. But I would probably start with the thought that the bias is in the system that leads to the 400 not with the selection within it.

Or, in the vernacular, inner city schools are shite and that’s the problem. You know, the stuff already being done near exclusively by the State?

None of these excuses stand up to scrutiny. In 2011, 103 state-educated students in Sunderland got 3 A grades or better at A-levels, yet only four offers of a place at Oxbridge were made to applicants from Sunderland. Over the course of four years (2011-14 inclusive), 851 students in Wigan got 3 As or better – so why did only 29 get offered a place to study at Oxbridge in that same period?

Lammy laddie, how many applied?

And now, here, we see the game:

It is time to move away from the highly subjective college-based system and centralise admissions.

That’s what he’s really after. Move selection into a central bureaucracy and then it can be controlled in the usual SJW manner. We only need to look at HR departments in large companies to see how that works out.

Not the most convincing of responses

ElySageProductions takes me on over MMT. By, apparently, entirely agreeing with me.

If money is not the constraint, why are we not using it to increase our productivity? This takes us full circle to Tim Worstall’s point about the relationship between money and who controls the resources. The people that are stopping us are the vested interests whose wealth (or power) will be compromised by progress. Money—democratically owned by us in the form of fiscal policy—directs resource at the microscopic level, and we have the democratic power to chose the direction. We could choose to use our most precious resource—time—to learn, to innovate, to care and to build a better life for everyone.

Money’s not the constraint, resources are. MMT doesn’t therefore solve our problems.

There’s an important number missing here

Oxford University has been accused of “social apartheid” after figures showed that nearly one in three colleges failed to admit a single black British A-level student in 2015.

Data requested by David Lammy, the former Labour minister for higher education, and published by the Guardian, showed that 10 out of 32 Oxford colleges did not admit a black British pupil with A-levels in 2015.

How many applied? Without that we’ve no chance at all at working out where the filtering is taking place, have we?

He’s just lovely when he gets angry

I pretty much make it a matter of policy to ignore whatever Tom Worstall has to say.

Tom? It’s not even good publicity, is it?

So far, so good. It is indeed true that there need never be a shortage of money. But Worstall continues, saying:

The underlying error is that economics isn’t the study of money. Sure, monetary economics is interesting enough, but that’s not the core of the subject. Instead, we note that there are unlimited human desires but only scarce resources with which to sate them. Changing the amount of money in circulation doesn’t change the number of those wants, however, nor the resources we have with which to satisfy them. It only changes the counting we’re doing as we do so.

Before you throw your hands up in horror I should note that Worstall does reveal here his deep knowledge of, and unfaltering belief in, neoclassical economics. What he is saying is wholly orthodox economic teaching, taught day in and day out in universities across the world. It is quite literally the case that in general equilibrium based macro economic thinking, which dominates the thinking and teaching on this subject the world over, that money is effectively ignored. As too, incidentally, is taxation.

The study of an individual market is partial equilibrium, not general. Further, general equilibrium is microeconomics, not macro. Even, money is not ignored, it was there in Walras’ first model and has continued, in general, to be there since.

Failure to appreciate this permits Worstall to make some pretty wild, and glaringly false claims. For example he says this

Because it’s the resources which are scarce. Take health care, for example. There’s the labour needed to do it, the buildings to do it in, the implements with which we do it and so on. But at any point in time there’s only a given amount of each of those things. Increasing the money supply doesn’t increase the amount of any of them.

Of course, the economy is not a zero-sum game, it is always possible to train up or import more labour; we can build more hospitals, make more medical equipment. But more money doesn’t increase the resources from which we can do all of those things.

Three thoughts follow. First, there is the most extraordinary suggestion implicit in this that the availability of money demand within the economy does not change behaviour. Or to put it another way, that if more money is dedicated (whether by tax or not does not matter) to healthcare demand then there will be no reaction to this monetary stimulus in the real economy and nothing will happen as a result: no new health care will follow. What Worstall is saying here is that demand cannot apparently alter supply in the real world.

Well, no, I don’t. Instead I talk about total resources being, at any point in time, fixed, meaning that if we wish to divert more resources to health care hen w will, inevitably, have less of something else. We can indeed increase total resources over time. That’s not what he says I say at all.

Second, what he’s also saying is that if there is underemployment in an economy working at less than full capacity (both of which are true in the UK at present because we suffer massive disguised unemployment in the form of under-employment) then adding to the money supply cannot stimulate a greater supply of goods and services to the economy. This is glaringly obviously untrue. He also ignores the positive multiplier effects of such spending in that situation, although they are now widely documented.

I also don’t say that. What in fact I do say is:

It is possible to get all Kenyesian about this and say when in recession we can boost output of all things – and maybe there’s some truth to that. But that’s not what our simplistic money tree peeps are saying. Instead, they are insisting that because we can print more money then there’s no shortage of the resources we need to do whatever we want. Which is, of course, complete tosh.

When we’re at full employment, about where we are, when GDP is about at potential, roughly where we are, then the only method by which we can have more of something is by having less of something else. Or, of course, by increasing the efficiency through which we produce things from our scarce resources over time. Neither of these options is waved away, aided nor hindered by printing more money.

I don’t even claim this:

Which is a pretty big claim, because what he is actually suggesting is that using money as a mechanism to direct resources towards investment has no impact on outcomes in the real world, when that is very obviously untrue.

Instead, all I’m saying is that increasing the amount of money does not increase the amount of scarce resources.

In which case he needs to explain why he is so obsessed with preserving the right of money to hide in tax havens, and why he is so obsessed with preserving existing monetary wealth distributions, and why he is so opposed to progressive taxation that might redistribute this money that he says has no impact on the well being of those who own it.

I’m not, I’m not and I’m not.

Except that he hints at the answer to all these three questions in one telling paragraph where he says:

Money’s just the way we count who controls those resources, it’s not a measure of what we can put to work at all. Thus printing more money doesn’t alter the fact that we must still choose which activities we’re to devote what resources to, there is no get-out clause here.

But this is not true. Because if in the process of printing money we change who controls resources we really do change outcomes.

But that’s not my point Senior Lecturer, is it? Rather, that the scarce resources are still scarce whoever directs their use. Thus, use of more resources to do one thing means fewer to do some other.

So in fact what Worstall has written indicates three things. The first is the bankruptcy of conventional macroeconomic thinking to which he, and the greater part of the academic community, subscribe.

General equilibrium still isn’t macroeconomics.

Actually what’s true is we can’t do everything, but that changing the way we control money by letting government print more of it to achieve social goals can very fundamentally change our constrained reality.

Shrug. Sure. Who gets to spend the money will indeed change what it gets spent upon. And? That still doesn’t mean that doubling the number of pound coins increases the scarce resources we can devote to the health service.

As an example of failed reasoning Worstall takes some beating. Buy don;’t expect me to engage with him again: once a decade is enough when faced with folly of this level.

Wonder if he’d listen to someone he trusts as they explain his errors?

Elsewhere

The Union of Concerned Scientists (UCS), an American science advocacy group known for its stance against global warming, would like to inform us all of the dastardly behaviour of the fossil fuel companies.

The UCS’s recent paper links global climate changes to the product-related emissions of fossil fuel producers, focusing on the oil, gas and coal producers as well as cement manufacturers. The paper criticises those companies for their impact on climate change, such as the rise of sea levels and the increase in global temperatures.

The point of the paper is to assign responsibility – and thus the potential job of clearing it all up – to those who dug and pumped up those fuels.

The problem with this is that the basic contention is tosh. For whatever responsibility there is for emissions lies not with those who made the supply, but with those who demanded it. It’s you, me and our grandparents and our selfish desires for transport and warmth in winter to blame here.

Ah, yes, well, senior lecturer

A dream of a world where economics is the liberating and not the dismal science

The source of the name being Carlyle, who was most upset when it was proved to him that paid labour was more productive than slave found that his ideas about who how and why there should be slavery were proven invalid.

All of which makes that an entirely valid dream for the Senior Lecturer, doesn’t it? I dream of an economics which can ignore reality.

So they really are clearing the nutters out of the search engines then

Liberal and progressive sites appear to be among the victims of a policy Google announced on April 25, designed to boost “reliable sources” of information, after Google and other technology companies were criticized for allowing low-quality and even fraudulent websites to proliferate during the 2016 presidential campaign.

Utilizing tools from Google, a web analytics company called SEMrush and other methods, Damon calculated that since April, search result traffic to the World Socialist Website has dropped 45 percent as of Sept. 16. He found similar declines at several other left-leaning sites, including AlterNet, Democracy Now!, Common Dreams, and Truthout, all of which have editors who review articles before they are published.

WSW is owned by the International Trots so that seems like a good set of nutters to down play.

But, of course, that’s not what the snowflakes have been calling for. We want the other set of nutters banned, not us!

Interesting definition of optimism

Well no. Get real. This strategy has failed. Without an analysis of the “p” word, patriarchy, we remain powerless to change it. Either a) men are just naturally aggressive because of testosterone, women are passive breeders, and this is biologically determined, or b) there is a power structure in play here that can be challenged.

I am going with b) because I am an optimist. The concept of patriarchy is overarching and universalising, it is trans-historical and nowhere near cross-cultural enough.

Hmm, well, yes, could be

A female medical student who began treatment to become a man has warned how encouraging children to undergo such procedures could create one of the “great medical blunders” of our time.

Kate, who spoke on condition of anonymity, had injected herself with hormones causing her voice to drop and her face to grow prominent hair. However, she later abandoned the treatment after deciding she was not transgender.

Explaining how she had been encouraged to undergo the treatment after visiting online forums, she warned that “great harm” could be caused by groups eager to coax parents and their children into believing a child struggling with their sex was simply born the wrong gender.

In an interview with Radio 4, Kate, who began her treatment in her early 20’s, said she believes that had her confusion over her sex happened today she could well have undergone treatment but later regretted it.

“I’m very concerned that if I was a teenager now or even younger that I or my parents would be pushed to consider me then as transgender,” she said. “I would have welcomed that at the time. I wanted to be a boy when I was younger because boys were allowed to be assertive and confident. A young person may now take hormones or have surgery and later regret it.

“By giving treatment to young children we may be perpetrating a great harm. And we might look back on this in 30 or 50 years and see it as one of the great medical blunders of the 21st Century. I don’t know. If someone had offered me that as a child. I would have taken it and I would have ended up regretting it.”

This is a surprise, eh?

Christy Turlington, one of the world’s most recognised supermodels, has accused the fashion industry of being “surrounded by predators” as it braced itself for a slew of sex harassment claims in the wake of the Harvey Weinstein scandal.

Ms Turlington broke cover to denounce the business for leaving vulnerable young models – both female and male – at the mercy of “some creepy playboy type”.

Vast numbers of would be wannabes, all chosen for looks, and a limited number of places…..

Err, you whut?

Richard Murphy says:
October 18 2017 at 2:06 pm
No we have not used up all our fiscal tools

Nor have we used up all our monetary tools, by a long way

We have just delivered low interest rates that reduce rentierism in the economy

When looking out of the other stump holes The Sage tells us that low interest rates have just increased asset values increasing the value of the rentiers’ capital stock.

And we have all noted how buy to let has fallen alongside those low rates, haven’t we?

Oooooh! Well done from the Sage of Ely!

As the FT reports this morning:

Rio Tinto and two former senior executives were hit with US fraud charges, and the miner with a UK penalty, on Tuesday for allegedly trying to hide a multibillion-dollar business failure by inflating the value of coal assets in Mozambique.

In a civil complaint filed in federal court in New York, the Securities and Exchange Commission said that Rio, Tom Albanese, its former chief executive, and Guy Elliott, a former chief financial officer, had ignored proper accounting standards and misled investors in their valuation of coal deposits that the company had purchased for $3.7bn and later sold for just $50m.
As they also note:

In the UK, the company was fined £27.4m over the affair, the largest fine the Financial Conduct Authority has levied on a company for a listing-rules breach.
So, let’ ask the obvious question: where were the auditors?

The allegations largely relate to 2012. The auditors then were PWC, as they are now.

The sums now subject to investigation must be material. So where is the investigation into the audit? I can find no evidence that there is one.

Why not?

In the very same FT article it says:

“Rio Tinto’s top executives allegedly breached their disclosure obligations and corporate duties by hiding from their board, auditor, and investors the crucial fact that a multibillion-dollar transaction was a failure,” said Stephanie Avakian, co-director of the SEC’s enforcement division.

To avoid a similar black mark on the coal business, the executives hid the problems from the board, audit committee, independent directors and investors, the SEC claimed. In late 2012, they allowed the audit committee to review an estimate of the coal project’s value that had “no basis in reality”, according to the SEC charge.

The basic allegation is that they lied to the auditors. Why should the auditors have picked this up?

From the actual SEC complaint:

Instead, as the project began to suffer one setback after another resulting in the rapid decline of the value of the coal assets, they sought to hide or delay disclosure of the nature and extent of the adverse developments from Rio Tinto’s Board of Directors, Audit Committee, independent auditors, and investors.

You know, I don’t think much of Babbel

Con questa app creata da più di 100 esperti linguistici riuscirete a parlare una lingua straniera in 3 settimane

Negli uffici di Babbel c’è un team di esperti linguistici che lavora per voi per creare la migliore esperienza di apprendimento possibile. Siete curiosi di sapere perché funziona?

That’s an ad which Salon has shown me. For those without Italian, a very rough translation.

100 experts have created this app which will teach you a foreign language in 3 months. The official Babbel team of linguistic experts have worked for you to create the best experience possible. And so on and blah blah.

OK, fair enough. But then, well, a reasonable assumption is that they’re looking at where I am and then showing me the ad in my local language. There’s not much point in showing an ad in Italian to someone who doesn’t speak that language (and no, recent surfing hasn’t taken me anywhere that might indicate I do speak Italian).

The local language where I am is Portuguese, Italy is 1,000 miles away.

And how much weight should we put on the value of a language app that cannot even show ads in the right language?

Universal benefit complaints

For many of Inverness’s universal credit guinea pigs, the past year has been exceptionally stressful. The many glitches of a malfunctioning scheme have already caused widespread misery in this city, which has been trialling various forms of universal credit since 2013. The problems unfolding here offer a taste of what is to come when the system goes nationwide.

OK, so, government’s not very good at doing things then.

At which point we’ve a suggestion that government should be cooking lunch for 2.2 million people. Your lunch will be organic, sugar, salt and fat free, and arriving in 6 weeks?

It just does always amuse that those pointing out how shit bureaucracy is at doing things insist upon bureaucracy doing ever more things.

International political economy is difficult, isn’t it?

So, with real wage increases running at a negative rate of 0.9% based on this data and annual wage increases being 2.1% per annum the Bank of England is going to compound the misfortune of most people by increasing interest rates.

I don’t think this is by itself the tipping point which will make most people realise just how irrelevant they are to those who make decisions on economic policy in the UK, but it will certainly add to the sense of dis-ease that many will have on that issue.

As acts of economic folly go this one will take some beating. It is, after all, contemptuous of most people in the country.

Hmm. We’ve inflation. What’s the usual response to inflation? Raise interest rates. Get that inflation lower and nominal wage increases will translate into real wage increases.

Ah, but wait! This is not inflation in the sense of a general price rise in the UK due to capacity constraints. It is, instead, import led driven by the fall in the value of the pound. So, what does raising interest rates do? Raises the value of the pound. Thus removing, possibly even reversing, that import led inflation. And thus neatly returning us to our nominal wage rises leading to real wage rises.

Gosh, this international political economy is tough stuff, isn’t it? Quite beyond the ken of the Senior Lecturer in the subject at Islington Technical College.