October 2009

The list of idiots

This is a useful list to use for future reference.

They\’re calling for a windfall tax on the banks.

Now, just at the moment, we\’d like banks to shore up their capital ratios. Both to pay for the losses they\’ve already made and also to pay for the losses to come (and yes, we know they\’re out there too). We\’d also like higher capital ratios so that we\’re less on the hook for whatever the next stupidity is going to be.

There are two ways that banks can raise their capital ratios: they can retain profits that they \’ve made or they can issue new shares to investors. If we impose a windfall tax upon them then they have fewer retained profits with which to bolster their capital ratios. If we impose a windfall tax then investing in the banks is less attractive, making it more difficult to issue new equity. For of whatever profit there is to be made more will be going to the taxman and less to the investors.

There is in fact a third way that the banks can raise capital ratios. They can shrink their business. That is, lend less: in the midst of a recession this is a policy choice known as \”fucking insane\”.

So, higher taxes on bank profits right now is absolutely not something we want to do. Something which is entirely at odds with any rational economic desire we might have. Those proposing it are therefore idiots.

So here is the list of idiots:

1. Jon Cruddas MP
2. Ken Livingstone
3. Richard Murphy, Tax Justice Network
4. Dr Martin Parker, University of Leicester School of Management
5. Prem Sikka, Professor of Accounting, University of Essex
6. Andrew Simms, nef
7. Ismail Erturk, Senior Lecturer in Banking, Manchester Business School
8. Prof Karel Williams, Professor of Accounting and Political Economy, University of Manchester
9. Prof Sukhdev Johal, Royal Holloway School of Management, University of London
10. Professor Richard Wilkinson, Equality Trust
11. Kate Green, Child Poverty Action Group
12. Ed Matthew, Friends of the Earth
13. Ann Pettifor
14. Paddy Tipping MP
15. Neal Lawson, Chair, Compass
16. Gavin Hayes, General Secretary, Compass
17. Dr Adam Leaver, Manchester Business School
18. Professor George Irvin, University of London, SOAS
19. Cllr Jenny Jones, London Assembly Member, Green Party
20. Professor Peter Case, Bristol Business School
21. Howard Reed, economist
22. Duncan Weldon, economist
23. Sam Tarry, Young Labour Chair
24. Chuka Umunna, Labour PPC Streatham
25. Baroness Helena Kennedy QC
26. Stewart Lansley, economic journalist
27. Nick Isles, Managing Director, Corporate Agenda
28. Tony Robinson, actor & broadcaster
29. Tony Woodley, General Secretary, Unite
30. Polly Toynbee, The Guardian
31. David Byrne, Professor of Sociology and Social Policy, University of Durham
32. Jo Littler, Senior Lecturer, Middlesex University
33. Dr David Alderson, Senior Lecturer, University of Manchester
34. Peter Tatchell, Human Rights Campaigner
35. Richard Scorer, Labour PPC, Hazel Grove
36. Professor Christine Cooper, University of Strathclyde Business School
37. Paul Holmes MP
38. Lord Trevor Smith
39. Dr Eryl Price-Davies, Principal Lecturer, Thames Valley University
40. Stephen Linstead York University Management School
41. Dai Davies MP
42. Derek Wyatt MP
43. Professor Stefano Harney, Queen Mary, University of London School of Business and Management
44. Sunny Hundal, Liberal Conspiracy
45. Clifford Singer, The Other Taxpayer\’s Alliance
46. Professor Gregor Gall, Professor of Industrial Relations, University of Hertfordshire
47. Professor Ruth Lister CBE, FBA, Professor of Social Policy, Loughborough University
48. Professor Hugh Willmott, Cardiff University Business School
49. Rob Macgregor, Unite National Officer, Finance and Legal Sector
50. Priscilla Alderson, University of London
51. Noel Hatch, Chair, Compass Youth
52. Will Straw, Editor, Left Foot Forward
53. Roger Levett, Author
54. Michael Moran, University of Manchester
55. Lynne Jones MP
56. Tony Juniper, Green PPC Cambridge
57. John Austin MP
58. Hilary Cottam
59. Colin Hines, Convener Green New Deal Group
60. Pat Devine, University of Manchester
61. Professor Malcolm Sawyer, Leeds University Business School
62. Aditya Chakrabortty, The Guardian
63. Cllr Salma Yaqoob, Leader, Respect

Worth marking this list and using it to measure any other insanity proposed by any of them.

Socialism kills

Via, this.

As the world approaches the 20th anniversary of the fall of communism, it is worth investigating the costs borne by countries like India that did not become communist but drew heavily on the Soviet model. For three decades after its independence in 1947, India strove for self-sufficiency instead of the gains of international trade, and gave the state an ever-increasing role in controlling the means of production. These policies yielded economic growth of 3.5 percent per year, which was half that of export-oriented Asian countries, and yielded slow progress in social indicators, too. Growth per capita in India was even slower, at 1.49 percent per year. It accelerated after reforms started tentatively in 1981, and shot up to 6.78 percent per year after reforms deepened in the current decade.

What would the impact on social indicators have been had India commenced economic reform one decade earlier, and enjoyed correspondingly faster economic growth and improvements in human development indicators? This paper seeks to estimate the number of \”missing children,\” \”missing literates,\” and \”missing non-poor\” resulting from delayed reform, slower economic growth, and hence, slower improvement of social indicators. It finds that with earlier reform, 14.5 million more children would have survived, 261 million more Indians would have become literate, and 109 million more people would have risen above the poverty line. The delay in economic reform represents an enormous social tragedy. It drives home the point that India\’s socialist era, which claimed it would deliver growth with social justice, delivered neither.

Us bastard neo-liberals, eh? Suggesting things that allow children to live, the people to become literate and the poor to become rich.

What cunts we must be.

Geoffrey laddie

You need to understand the implications of your arguments:

Over the past 150 years, taxes on labour have helped increase its productivity 20 fold;

Now this is indeed true (to an extent, it\’s the increasing technology that has really raised productivity but taxation of labour will have helped) but let\’s recast it the other way around. The taxation of labour increases the substitution of labour for capital, thus creating unemployment. Which is also true, it\’s just that people don\’t like to see it put that way. Especially those arguing that taxes must rise to pay for their pet schemes.

The rest of it about the GFC and green taxation is correct except:

It starts with the most essential point of all, that green tax reform should be revenue-neutral.

Yes, that\’s agreed, but the GFC says that a few times and then adds all sorts of caveats. That it should be revenue neutral except for this, except for that. In other words, revenue neutral it won\’t be.

Erm, no Jeremy

America\’s return to growth is largely down to its fiscal stimulus, and particularly its \”cash for clunkers\” programme.

Look, you can say many things about cash for clunkers. That it was a destruction of wealth for example (see M. Bastiat). Or that it was incredibly expensive ($24,000 an extra sale according to Edmunds). Or that it causes the White House to proffer the most gloriously stupid lies:

The Edmunds analysis is based on two implausible assumptions:

1. The Edmunds’ analysis rests on the assumption that the market for cars that didn’t qualify for Cash for Clunkers was completely unaffected by this program.

In other words, all the other cars were being sold on Mars, while the rest of the country was caught up in the excitement of the Cash for Clunkers program.  This analysis ignores not only the price impacts that a program like Cash for Clunkers has on the rest of the vehicle market, but the reports from across the country that people were drawn into dealerships by the Cash for Clunkers program and ended up buying cars even though their old car was not eligible for the program.

They want to try and argue that a discount creates sales of cars which don\’t get the discount? Seriously?

But the one thing you cannot do is claim that a $3 billion program turned around a $14 trillion economy. Not even the most vapid of Keynesians is going to try and advance that argument, that the multiplier is that damn high.

Politicians might make such a claim of course, but not someone capable of talking out of one side of their mouth at a time.

Sigh

Professor Nutt was told to resign as chairman of the Advisory Council on the Misuse Drugs (ACMD) after a series of controversial outbursts including accusing ministers of ignoring scientific evidence to distort the drugs debate.

You hire the scientists to tell you the scientific truth. Sure, what you do with it is politics after that, but firing the bloke who is telling the truth is silly.

In a blizzard of farewell attacks, he again accused politicians of \”misleading\” the public by making decisions that go against scientific evidence and said Gordon Brown, the Prime Minister, \”makes completely irrational statements about cannabis being \’lethal\’, which it is not\”.

Quite: this is your government on drugs.

And if they\’re ignoring the truth on something quite so simple then how badly are the cocking up something complex like climate change?

I said this would happen

Financial experts have given warning that the era of “free banking” is coming to an end as banks seek to make money for providing even basic services.

A combination of an expected limit on overdraft charges, falling profits and the recession is forcing banks to turn away from traditional free accounts.

Way back when Gordon Brown decided that it was terribly awful that dormant and orphan accounts simply sat there on the bank\’s books. They were able to lend the money out but they probably weren\’t paying any interest on it and so, well, the money in them should thus go to the State: or to selected charities.

I said that, at the time, that we did in fact have a competitive market for bank accounts. So the money that was undoubtedly being made from the addition to the bank\’s floats (roughyl speaking, the money they\’re not paying interest on but which they can charge interest of lending out) was probably subsidising some part of the bank\’s activities: like, say, free current accounts, something that doesn\’t happen all that much elsewhere.

The float has been reuced, free accounts are disappearing.

No, of course it\’s not the only factor, but it is one of them.

Interesting observation

Funnily enough, the most fiercely anti-drugs people I came across there were the Dutch. They didn’t think dope was evil, they just thought that it was pathetic. For them, it was the dull, conversation-killing, boring thing that their parents did, or their parents’ loser friends, sneaking off to their coffee shops of an evening, like dim-witted old soaks heading to the boozer. There’s a lesson in that. I wonder what it could be?

Hugo Rifkind

Oh please, do bugger off

This is so transparent!

Thousands of polling stations would be closed and voting hours reduced under a plan to cut the cost of elections.

Other proposals include cutting staff, replacing polling cards with e-mail requests, increasing candidates’ deposits, fixed-term parliaments and reducing security at election counts.

\”Increase candidate\’s deposits\”. Otherwise known as the Incumbency Protection Act.

There are currently three political parties that have the financial clout to run candidates in most constituencies across the land. Con, Lab and LibDim can scratch up, without too much trouble, the £300,000 or more needed just to get someone on the ballot paper in every constituency.

There\’s another three parties, UKIP (yes, to an extent I am talking my own book), Green and BNP who are knocking on that door. Raising the deposit requirements in each constituency simply makes it harder for such parties to compete and thus entrenches the three majors.

It\’s specifically a device to aid the incumbents.

And whatever you think about UKIP, the Greens or the BNP the correct reaction from us all should be that they can fuck right off.

They\’re *our* elections, not theirs, they should not be allowed to put barriers in the way of our choices.

Well of course

If you tax something you get less of it.

The Centre for Economics and Business Research (CEBR) has worked out that 0.5p increase planned for April 2011 will lead to smaller companies shedding so many staff that the increased tax take would only make a small additional contribution to the public finances.

The job losses alone would cost the Treasury around £900m in jobseekers allowance and other benefits, the centre said. It would come at a time when the Government is spending £1bn in an attempt to create 150,000 new posts.

If you tax jobs then you\’ll have fewer of them.

This really isn\’t rocket science you know.

Quote of the Day

In her book, she recalls the day that Harrison admitted he had been sleeping with Starr\’s wife, Maureen. \”You know, Ringo, I\’m in love with your wife,\” Harrison said as they sat at Starr\’s kitchen table. \”Better you than someone we don\’t know,\” Starr shrugged.

And now the Fawcett Society is simply flat out lying

Well, I suppose that there\’s glory in being copied. The Adam Smith Insitute has for years been calculating Tax Freedom Day. The day when we start working for ourselves having paid off the exactions of the State. So the Fawcett Society is copying that idea over the gender pay gap.

Today is the day when women stop getting paid:

Women will effectively work for nothing for the rest of the year because of the difference in pay with men, a study claims.

As I say, there\’s a certain glory in having one of your gambits copied.

There is an interesting little point they make:

\’The Equality Bill offers a once-in-a-generation opportunity to reform equal pay law and stamp out the pay gap. We urge the Government to place a legal duty on employers to check for and rectify any gender pay gaps – a measure supported by the vast majority of the British public. Women must also be given greater access to justice by enabling representative actions and the use of hypothetical comparators in discrimination claims.

There\’s three stages to this gender pay gap. Firstly, that men and women, with the same qualifications, doing the same hours and the same job, get equal pay. This has largely been achieved: there are a few where greater male physical strength leads to still higher male pay and there are a few (nursing seems to be one) where women earn more than men.

Then there\’s equal pay for jobs of equal value. This is more difficult as of course rampant free marketeers like myself would point out that wages are the valuation of a job. Thus if wages are not equal then the jobs are not of equal value. However, that battle has been lost and there are indeed comparisons made between, say, council dustmen and council dinner ladies. So be it.

However, what they\’re asking for there, with \”hypothetical comparators\” is that there doesn\’t have to be another job which can be shown, even with the odd standards of version 2 there, to be of equal value. They get to just make it all up. That might well be a step too far.

Especially as, if we go and look at the actual press release, there\’s a number of troubling statements:

the overwhelming majority of the British public supports the introduction of a legal requirement on employers to conduct pay audits in order to stamp out the gender pay gap

Well, you see, there\’s no evidence whatsoever that such pay audits would in fact stamp out the gender pay gap. To take as an example, Sweden, a society which takes such matters a great deal more seriously than we do. Their pay gap (by a different measure) is around 15% while ours (on that same different measure) is around 17%. If the gender pay gap is something as deep rooted that a society like Sweden cannot root it out then pay audits (and I\’ve no idea whether Sweden has them or not…ah, actually, the Fawcett Society itself says they do have them. So they\’re not a solution.) aren\’t going to manage it. So the answer to the question is meaningless. It\’s like asking \”would you support the growing of cucmbers in order to extract moonbeams which will cure cancer\”? As moon beams won\’t cure cancer nor will pay audits stamp out the gender pay gap.

\”48% of men and 32% of women believe that on the whole men and women receive equal pay for doing jobs of equal value. This suggests that they are unaware of the gender pay gap\”

No, it doesn\’t. For that\’s a case of petitio principii. First it is necessary to prove that the gender pay gap is caused by jobs of equal value not receiving the same pay.

When they are told that “women are paid on average 23% less than men for doing jobs of equal value”, 94% of the public agree that it is important to eliminate the gender pay gap

Similarly: what is at issue is whether the statement about the pay gap is true, not whether people believe it to be morally wrong if that statement is true.

The (mean) average gender pay gap in Great Britain – including full-time and part-time work – is 21.2%.

Oh dearie me. They\’re still going on about the mean gap when they\’ve been told very forcefully that they shouldn\’t be talking about the mean they should be talking about the median. You\’ll recall that the Statistics Authority got very het up about this and actually issued a rebuke to Harry Harperson on the matter?

The reason being (and come along now girls at the Fawcett Society, math isn\’t all that hard you know!) that we\’re trying here to describe the experience of the average person. That is the median, the average person, the middle person in the population. When we describe wages we really shouldn\’t be describing means because there is an absolute lower bound (of £0 per year) while there is no upper bound. As we know that the very tippy toppy of the income distribution is dominated by men then using the mean will give us very skewed figures for that mean as against the median.

From memory the correct figure here is actually 12.8%, which is the median gender pay gap.

We urge the Government to place a legal duty on employers to check for and rectify any gender pay gaps –

And that is really rather a huge demand. \”Any gender pay gaps\”? Even those that come from differences in working hours, working patterns, human capital, choices made by the workers themselves?

And now here comes the big lie:

The pay gap is caused by discrimination (the single largest cause), a lack of flexible working and the undervaluation of traditional women’s work).

No, discrimination is not the largest cause of the gender pay gap. If anything, it\’s the smallest cause of it. Further, you\’ll actually find that flexible working is one of the causes of that pay gap, not a solution to it: for some women value flexibility of working hours over pay. Thus they make a trade off and get flexible working hours and receive less pay for the hours that they do work. This is known in the real world as making choices and all choices involve both costs and benefits.

But the important thing to concentrate on is that big lie: that the largest single cause is discrimination. No, it ain\’t, it just simply isn\’t. The largest single cause is \”children\”.

If this is the level of analysis that the ladies at Fawcett are going to try to bring to matters of public policy: you know, this never mind the damn facts, that\’s just soooo male, I know, I can feel it instead, then they can bugger off back into the kitchen and bake me a pie.

Y\’all can come back into the front room and rejoin the adults when you\’re prepared to consider the real world evidence but not while you insist upon whatever you\’ve cooked up in a kaffeeklatch.

Yes, he\’s complaining again

Mr. Murphy:

There is, however, one very perverse dimension to the report. Deloitte say:

We have reviewed attempts to quantify the UK “tax gap” relating to CT. There have been a number of studies in this area, but few deal with the loss of tax to the UK specifically, and none of those we have identified directly addresses the contribution of the CDs and OTs to the UK corporate “tax gap”. For our assessment, we have built on the approach adopted in the TUC’s 2008 pamphlet “The Missing Billions: the UK tax gap”

Let me be honest, my brief review suggests that they have got this analysis wrong – and I will explore this further, soon. But let me reflect just for a moment on the use by Deloitte of my methodology. When The Missing Billions was published Bill Dodwell, head of tax at Deloitte described it as ‘just rubbish’. Now Deloitte have used it as the basis for their own methodology.

Still rubbish Bill? Or time for a fulsome apology?

Oh, so what actually does the Deloitte report say?

The “Missing Billions” pamphlet produced by the TUC (2008) compares the average reported
percentage current tax charge in the FTSE top 50 companies’ financial statements to the UK
statutory rate, and finds that the account charge is about 5% lower on average across the
years under review. It asserts that this is due to tax avoidance by UK corporates, and
extrapolates the extent of this perceived avoidance across the large corporate sector.
The study puts the total tax “expectation gap” (and the UK tax avoided by companies) at
£11.8billion.

Yesss……

The report adjusts book profits for goodwill in an attempt to estimate taxable profits. No other
tax adjustments are considered, such the introduction of tax incentives like Research and
Development (“R&D”) relief or the Substantial Shareholdings Exemption (which exempts from
the charge to tax capital gains made on most subsidiary companies) whereby amounts
recognised in the accounts as expenditure or gains may differ from the amounts for which tax
relief is available or on which taxable gains are taxed (either absolutely, or at a particular point
in time).

And what did Timmy say?

Thus his estimate of £12 billion for tax avoidance fails, for he has, by his own admission, lumped in the entirely, even from his point of view, legal, legitimate and morally acceptable practice of tax planning with tax avoidance.

That is my argument with his numbers. That he’s used a logically flawed method to get to his final number.

Tadaaa!

That\’s the basic flaw in The Missing Billions report. It failes to note that governments specifically and deliberately put tax breaks into law. Thus you cannot simply look at headline rates and paid rates in order to estimate the tax gap. You have to, also, adjust for those tax breaks. Which the Missing billions report does not do.

QED. It\’s flawed.

Anne Pettifor again

Sigh.

This is a chart of Britain’s public debt as a share of GDP – from 1858 until 2002. For American readers I will paste a chart of US public debt for a similar period on my Huff Post blog in a day or two. The same economic lessons apply, even though much of the history is different.

Britain’s debt today – as a proportion of the national cake or GDP – is about 55% and rising. It is expected to hit 70% soon. Study the chart and you will see that it was twice that in 1858 – about 100% of GDP.

After the outbreak of war in 1914 it started rising. The 1929 crisis caused it to rocket upwards, as indeed did the financing of a very destructive war – World War II.  In 1945 Britain’s debt stood at 250% of GDP – roughly 5 times what it is today.  At that point an extraordinary thing happened (largely as a result of Keynes’ sound advice.)

The heavily indebted Labour government began to spend – as soon as legislation was agreed by Parliament.

Labour started to invest in a bold and visionary project: – a publicly funded health service free at the point of use –  the NHS – in 1946. (The American Congress is today proposing a similarly bold investment in a ‘public option’ for their health service.)  Back then, the Labour government carried out a massive slum clearance programme, and built houses. They revived the ancient universities, provided pensions and welfare to the poor. They trained ex-soldiers to become teachers.

What happened, you might ask, to the total public debt, as a result of this flouting of the economic orthodoxy – and  flagrant extravagance?   Well – exactly what Keynes had predicted would happen.  The debt fell.   Steadily, but unremittingly – as a share of GDP.    Look closely at the chart.

This is because government spending kick-started economic activity. (Of course it had done so during the war too – but on destructive, not productive activity. That had helped defeat a profound threat – Nazism – but had not helped much to fix losses and generate income.)

So thanks to government intervention, economic activity revived the comatose and exhausted body that was the post-war UK economy. Soon it began to recover. With recovery, government revenues rose, expenditure on  unemployment benefits fell – and hey presto! – government repaid its debts, which fell dramatically as a share of GDP.  Soon the spending began to pay for itself.

Apologies for the long quote but thought you might want to really understand her argument.

We\’re in a deep hole as regards debt, the way out is to have more debt to fund more spending because such spending pays for itself. The proof being that this is what happened last time.

Hmm, well, of course everyone is entitled to their own opinions but not to their own facts. So, what actually was the spending stance of the Labour Government immediately post war?

Anyone? Bueller?

Ah, the IFS:

So how can the path of the deficit best be summarised? The immediate aftermath of the Second World War saw the steady closure over 1946 and 1947 of the huge wartime deficit, producing a few years of surplus as government expenditure was reined in by demobilisation.

Oh. The Labour Government was not in fact fiscally expansionary. They actually ran budget surpluses. Until the Korean War led to deficits again.

So, err, that rather knocks a hole in her argument, doesn\’t it?

In fact, her argument is entirely bollocks.

Oh, and do please note, after this repayment of debts up until 1950 the government didn\’t in fact pay back any of its debts until 69 and 70 (and then again under Lawson). Nope, they really did not pay off any of the debt. It is true that the debt fell as a percentage of GDP, for GDP was growing faster than the debt was, but that really is not the same as \”government repaid its debts\”.

We\’ll mark this one down as a beautiful theory destroyed by ugly facts shall we?

The Ritchie rewrite

The EU has approved the plan to split Northern Rock into good and bad banks. The latter includes the notorious Granite that helped bring down the bank, and which took me a lot of effort to expose two years ago.

It\’s just that Granite didn\’t bring down Northern Rock.

It was the unsecuritised loans that did: they couldn\’t roll over their paper in the wholesale markets and thus couldn\’t fund the loans they had already made.

Those loans that were in Granite and had secured long term financing were the very thing which DID NOT bring Northern Rock down. It was the ones that they hadn\’t yet shoved into Granite which did.

Duncan\’s line of the day

Mutuals are not a panacea. The collapse of Dunfermline Building Society shows that. But they do, when well run, tend to perform the core retail task of offering savings accounts and making mortgages well

Well, yes….most things run well when they\’re well run.

And most things don\’t run well when they\’re not well run.

I\’m just wondering whether I can get one of those high paid jobs as a city economist on the basis of this sort of insight?

Comment on climate change

The Devil\’s been looking at CO2 and climate change. This is a comment left there:

\”Now supposedly, according to rather more complicated calculations, doubling CO2 levels in Earth’s atmosphere will raise the average altitude of emission about 150 m, which will therefore raise the pressure difference and hence the surface temperature about 1.1 C. If we raise CO2 by only 40%, surface temperature will go up about half that. So we had half a degree last century (an amount too small to reliably measure). We’ll have half a degree next century. And that’s all the standard Greenhouse Effect can give you.\”

Quite true. And it\’s also actually what the IPCC reports themselves say.

No, really, they do.

The direct effect of CO2 concentration rises is minimal and we don\’t really care all that much about them.

The whole of the rest of the structure is built upon: what are the feedbacks? We know very well that there are positive feedbacks (say, tundra melting and releasing further CO2 and or methane)and we know very well that there are negative feedbacks (say, higher plant growth and thus more carbon sequestered in soil).

The real point of the IPCC reports and of all of those computer models is in trying to work out what the net balance of those feedbacks are. And truth to be told, we don\’t really know all that well.

But CO2 rises leading to temperature rises directly? Yes, the IPCC comes to very much the same conclusion as Pa Annoyed above.

No, really, they do.

The result of which is that this explanation of atmospheric physics is not some great \”gotcha\” showing that the whole climate change set of prognostications is wrong.

On skin colour in Asians

There\’s a bit of a disconnect here. Yes, we know that (especially from the sub-Continent but also in other parts of Asia) the lighter the skin the better looking the woman is considered. Thus the proliferation of lightening creams.

We also know why:

Perhaps it was once a sign of social class: only poor people needed to toil in the sun, so a dark, weatherbeaten face testified to a lowly station. Perhaps the belief hardened during India’s long, violent history, in which power and wealth were associated with fair-skinned marauders such as the Aryans.

Indeed, there are those who argue that (and there\’s sufficient DNA evidence to make their argument stand up, if not to entirely prove it) that the caste system is part and parcel of that ensuring that the light skinned Aryans continue to rule to roost over the darker indigenes, right down the generations.

That first explanation worked in almost all European societies up until the 1950s-1960s of course, when it went into sudden reverse and it was the tan that became the mark of a higher social class (class isn\’t quite right there: status or wealth perhaps). As everyone now worked indoors it was those who could afford to jet away to the winter sun who were displaying status by having a tan, not those with the milky white skin of never having had to work in the fields.

And thus we now have the opposite of those lightening creams: the fake tan and the tanning salon and, yes, they are hugely used by those in exactly the same socio-economic positions as those using the lightening creams.

The disconnect comes in the rest of Anjana Ahuja\’s piece. She has correctly answered the question of why these creams are used. And then spends the rest of the piece asking why these creams are used?

Eh?

Something I don\’t understand

Jersey, Guernsey and the Isle of Man are all UK crown dependencies. Britain\’s 14 overseas territories include Bermuda, the Caymans, Gibraltar and the British Virgin islands. It is thought Foot believes the crown dependencies have taken significant steps to abide by international regulations. But there is concern that moves to reduce all three islands\’ corporation tax to zero may breach European tax protocols.

Umm, the Crown Dependencies are not actually in the EU are they? So why are the affected by EU laws on taxation?

This is going to work well, isn\’t it?

Despite the lengthened timetable, Mr Hoffman said that state aid clearance was “good news” as Northern Rock would now be able to press on with plans to increase mortgage lending in the UK. Under the agreement with Europe, it will be allowed lend an extra £21bn on mortgages between now and 2011 – much of which will be directed at first-time buyers and those with deposits of less than 20pc.

They\’re deliberately targeting the market for sub-prime mortgages.

Haven\’t we, erm, been here before?