November 2008

This isn\’t a criticism of carbon markets…

It\’s a validation.

Other manufacturers in India and China producing similar products are expected to earn an estimated £3.3 billion over the next six years by cutting emissions at a cost of just £67m.


We\’ve saved 3.3 billion of ecological damage at a cost of just 67 million. Hurrah, Hurrah!

This is exactly what we want to be happening, emissions being reduced at the lowest cost.

So what\’s the problem?


Insanely counterproductive

THE solicitor-general, Vera Baird, has signalled the introduction of new rights for millions of carers of elderly relatives and sick children, raising the prospect of a clash with Lord Mandelson, the business secretary.

Under the proposal, in a bill to be outlined in the Queen’s speech on Wednesday, carers who believe they are being unfairly treated because of responsibilities at home could make a claim of “discrimination by proxy” against their employer.

I\’m not going to argue that this is a good or a bad idea. Make your own minds up upon that.

The measure will form part of a series of changes to grant new workers’ rghts. Baird also hinted the government could in the long term revive plans to force businesses to carry out equal-pay audits to ensure women are not underpaid.

Baird made it clear that ministers would act if businesses did not show they were serious about closing the pay gap. “If it doesn’t [happen] then, after a limited time, we’ll need to reconsider,” she said.

I\’m also not going to argue that this is a good or a bad idea. You can make your own minds up about that.

However, doing the first in order to achieve the second is an insane idea.

Why does the gender pay gap exist? Because, for better or worse, in our society, women take on the greater part of the caring burden. Of caring for children, of caring for parents and other relatives. They thus are less committed (on average of course) to the workplace, to their careers. They work for fewer years, are more likely to work part time, more likely to take career breaks. All of these lead to lower (on average of course) pay.

Insisting that carers, who are overwhelmingly likely to be women, should have greater rights to work part time, to further career breaks, is just going to increase that gender pay gap.

As I say, either idea in isolation can be taken any way you want to. It could be that you are morally outraged by one or other, possibly even both, that carers cannot already claim such rights, that the gender pay gap is an abhorrence. But it\’s undeniable that increasing the cause of the pay gap as a way of closing the pay gap is insane.

Oh dear Willie

Our Wullie manages to get rather confused again.

He was in London last week, promoting his new book The Subprime Solution and between events he met the Chancellor, the Governor of the Bank of England, the Secretary of State for Business and Regulatory Reform and even – for a few minutes – the Prime Minister. One reason for taking him seriously is that he\’s the only prominent economist who can claim to have predicted today\’s bust.

But his solutions are so non-standard and outside conventional thinking, and his manner so self-deprecating and academic, that it takes a while to get the radicalism of his message. Minds seemed to wander last week – and it took me a good few meetings before I understood.

If we are going to get banks to lend and borrowers to borrow, argues Shiller, we have got to reduce decisively the risks they confront. He starts with the mortgage market and the collapse in house prices because they are at the centre of this crisis.

Mortgages, he thinks, always unfairly contained too much risk for ordinary borrowers. Now they are a disaster. Who in their right mind would pledge hard-earned savings as a deposit for a house in a falling property market and, on top, take responsibility for repaying a big mortgage over 25 years when they may lose their job? It is far too much risk and reflects an unfair balance of power between borrower and lender. A left-of-centre government should insist that mortgages are redesigned so they contain far less risk for ordinary borrowers.

Shiller does indeed have some exceptionally interesting ideas about mortgages and the mortgage market. But not quite what Hutton goes on to say they are.

Here\’s my review of the book.

Beyond that, though, he sees this not as a market failure but as the absence of a market. That is, a market that allows you to speculate or bet upon house prices falling. Thus, his long term solution is to build exactly such a market. Fortunately, he\’s already built one of the essential building blocks, an index which we can use to measure house prices in the major US cities. Known as the Case-Shiller indices (modest man our Professor) these are already used as the basis for a modest futures market. Very modest, actually: business is such that it covers some $15 billion worth of houses, a small fraction of the trillions of total house value in the US. As with all futures markets you can speculate (translation: bet) that prices will rise or that they will fall. This is the extra layer of speculation that he wants to add to the current housing market. So what good might come of this? More besuited plutocrats gambling away the lives of the poor perhaps? Perhaps not actually, there are two obvious and highly desirable outcomes from having such a market.


I said up above that this solution would make some peoples\’ heads explode, that the solution to an excess of speculation is to create a market in yet more speculation. Yet in this case it is indeed true, this is a valid solution. For what we\’ve been suffering from is not a market failure, rather from the absence of a market. In which case, the solution is to design the market needed to solve our problem.

Shiller isn\’t saying that the government should guarantee mortgages. He\’s not saying that the State has to step in. He is saying, rather, that the response to the absence of a market is to create a market. In this case, a market of futures and options in house prices. In short, more speculation is needed.

Willie han\’t spotted that. Odd really…..


The civil servant at the heart of a Whitehall leak investigation was in hiding last night as a political storm raged over the arrest of the Tory frontbencher Damian Green.

The 26-year-old civil servant was detained at his home in Middlesex at 6am on November 19. The assistant private secretary, who has been suspended from his job, is being looked after by the Home Office at a secret location because it owes him a “duty of care”, officials said.

The suspect is being held at an undisclosed location by the Home Office?

That\’s all a touch Stalinist isn\’t it? After he\’s been charged and released they keep him in custody?

Well, yes, but…..

What is the point of the media if it does not see its primary task as gathering information to hold power to account?

The primary purpose of the media is to make money for those who own it. Just like any other business.

Yes, I know I\’ve said it before….

But Andy Atkins, executive director of Friends of the Earth, said the UK should take responsibility for emissions.

"The committee should put pressure on the Government to abandon climate-wrecking plans to expand UK airports and not to build coal-fired power stations without carbon capture and storage from the outset," he said.

"Investing in green energy and cutting energy waste can create tens of thousands of new jobs, reduce our dependency on the yo-yoing cost of fossil fuels and put Britain at the forefront of a green industrial revolution."

Look Andy, creating jobs is a cost of such schemes, not a benefit.

The very fact that thousands of jobs are created is proof that your plans make us poorer.

He\’s got a little list

Lord Mandelson is drawing up plans to choose which businesses and industries are important enough to be saved in the event of their going bankrupt as the recession bites, the Guardian can reveal.

In his first newspaper interview since returning to the cabinet, the business secretary said he planned a more interventionist policy for industry.

Company data such as the number of employees, the importance of the firm\’s research and development and its performance were likely to be factors in deciding which businesses should be given government aid.

It\’s the sort of thing that Herbert Morrison, his grandfather, loved doing. Didn\’t that work well too?

Well, yes….

A rise in global temperatures of less than 2C (3.6F) could begin a meltdown of the Greenland ice sheet and Arctic sea ice, causing sea levels to rise by several metres and threatening tens of millions of people, according to a study by WWF, the conservation group. “Responsible politicians cannot dare to waste another second on delaying tactics in the face of these urgent warnings from nature,” said Kim Carstensen, a WWF spokesman. (AFP)

Now for the important question.


The IPCC tells us that Greenland is scheduled to melt somewhere between 2,500 and 2,700 AD. Not really something we should be worrying about now.

After all, if we keep up this liberal capitalism thing then people in 2,500 will be 19,000 (yes, nineteen thousand times) times richer than we are. Surely they can deal with it?

Mike Meacher

What is clearly needed, though sadly highly unlikely, is an international conference (perhaps as a serious offshoot from the lightweight G20 conference a week ago?) to reach a binding agreement on the oil price for a five-year period rolled forward,…


He\’s seriously suggesting that oil should be pegged at $90 a barrel. Have these people learnt nothing at all from the various attempts to fix commodity prices over the years?

Tee hee

FROM this autumn, all public bodies occupying large buildings have had to display an energy efficiency rating. I am told that less than 1 per cent of 3,200 buildings assessed have scored the top A grade. Among those scoring lowest are the offices at 3 Whitehall Place, Westminster, occupied by the new Department of Energy and Climate Change.

Who would expect otherwise?

To catch a falling knife

That\’s what it is, trying to call the bottom of a market and start buying again.

Helical Bar has spent the past few years scaling down its portfolio, but Mr Slade said the company intends to start buying again from spring 2009, to seize opportunities that only arise "once or twice in a property career."

He\’s called the market right twice before so should we see this as an encouraging sign? Or is it all different this time?

The long life secret?

Given that this is in The Mail I think we might file this under the "immigrants cause cancer to house prices" heading. However, it\’s sourced from the New Scientist which, as long as it doesn\’t stray into matters economic, is a respectable source.

And for centuries it seems we were looking in the wrong place. Forget exotic pills and potions, the key to prolonged life could be as simple as a glass of water. Scientists believe \’heavy water\’ enriched with a rare form of hydrogen could add as much as ten years to life.

And by also modifying foods, such as steak and eggs, with the hydrogen the way could be cleared to allowing us to eat and drink our way to a healthy old age.

The idea is the brainchild of Mikhail Shchepinov, a former Oxford University scientist.

The idea is, as far as I understand it, that deuterium based water protects aginst free radicals rather more than regular dihydrogen monoxide. As to the truth of this I have no idea.

As to the implementation of it, well, there is something of a problem. There\’s a limited amount of deuterium out there. And you have to separate it (and isotopic separation ain\’t one of those simple things to do) from the regular water.

Even if it does work, it ain\’t gonna be cheap.

Tee Hee

Labour in vain

Home from Heathrow just in time to hear a distressing first on the BBC Today programme. Hazel Blears was actually faded out. While still speaking. I nearly dropped the marmalade.

In the old days they would have tried politely to hurry her along, but yesterday, as Ms Blears twittered happy thoughts about new Labour\’s many achievements, they just turned off her mike. And she had only reached about the eleventh achievement.

Poor Hazel. It was brutal. Forget Monday\’s mini-Budget. Wednesday was truly the day that new Labour died.

Turning off the chipmunk. So sad.

Equal pay for equal work

It would appear that we\’ve had that for rather a long time.

Being 4ft 11in paid off for Edith Kent. Her diminutive stature meant that she could crawl inside torpedo tubes — and helped her to become the first woman in Britain to earn the same wage as her male colleagues while working as a welder during the Second World War.

This week Mrs Kent celebrated her 100th birthday with a tea dance at a hotel with 50 family and friends, including her sister Minna, 105.

Mrs Kent began working at Devonport dockyard in Plymouth in 1941 but was so good that she received wage parity in 1943 — which was unheard of at the time.

Given that such equal pay for equal work is now standard right across the economy, what is it that everyone is complaining about?

Oooooh, yes, we like this….

Oh yes we do.

Here in Singapore, the government continues to respond to the worsening downturn with austerity of the sort that avowed scrooges like nineteenth century prime ministers William Gladstone and Robert Peel would have approved of.

The latest cost-cutting move is a pay cut of up to 19pc for all senior civil servants, including the PM and President…..

Action this day as Churchill would have had it. Cut taxes by even more of course, in order to still have a fiscal stimulus.