March 2010

Glorious Compass!

If the building of new nuclear plants goes ahead we will all be expected to pay an extra levy on our bills to pay for it, this could be as much as 10% extra. This demonstrates how wrong the balance between private and public contribution is and the urgent need for greater equilibrium between the two.


We should be investing vast sums in decentralised and renewable energy. Generously subsidised micro-generation in every single home across the country, coupled with a much more ambitious mass programme to insulate our homes and offices must become absolutely central to the government\’s energy strategy.

Nuclear\’s bad because it requires subsidy. Therefore we should have renewables which require more subsidy.

Err, yes…..

Why are these people taken seriously?

Er, no Ritchie, no….

OK, so we\’ve got several people saying that big banks need to be broken up so that none of them are \”too big to fail\”.

Hmm, not sure I agree really. Still, leave that aside for a moment, here\’s what Ritchie has to say about it:

And if ever evidence was needed of why we need financial transaction taxes to retrain bank trading this is more to add to the existing pile in its favour.

Err, no, actually, it doesn\’t.

What is being said is that the level of trading we\’ve got is just fine we\’d just rather that it was spread among more players so that no individual player is systematically important.

In fact, it\’s the very opposite of what Ritchie says.

Having looked at the problems in the banking system these wise men have decided that it isn\’t the level or amount of trading that is the problem. They\’ve decided that it\’s the concentration of risk that is. Thus they recommend dispersing the risk rather than reducing the amount of trading.

I also have this feeling that if financial transaction taxes were felt to be the solution they\’d have said so but maybe that\’s just me being picky.

My word

Who could Ritchie be thinking of?

But let me also say why hgis wish may at present be forlorn. Step outside the accepted paradigm and I can assure you the whispering campaign against you is very powerful and very strong indeed.

I know. I’m well aware of the whispering campaign against me from big business, vested interests in academia and more besides.

Why we can\’t have a Green New Deal

Wouldn\’t say that George Irvin is one of my favourite economists…..SOAS tends not to produce those to my ideological flavour. Or even to what I regard as the basic rules of logic. But still, this is interesting.

Essentially, trying a Green New Deal and a massive Keynesian stimulus for the economy would lead to a collapse in the pound. This would negate any possible benefit of said Green New Deal.

To which there are two possible solutions:

There are two ways out. One is to impose capital controls. But such controls, supposing for a moment that capital controls could be effectively imposed in today\’s world, would be tantamount to closing down much of the City of London and inviting retaliatory trade attack. Crucially, such controls are incompatible with EU membership, and the EU accounts for nearly 60% of UK trade. Leaving the EU is neither a sensible nor a realistic option.

The other solution is to join the euro. That is no panacea either. It would take time, it would entail conditionality and a referendum on the matter would probably produce a no vote. Some might argue that the EU stability and growth pact is at least as fiscally constraining as meeting current Treasury rules and that joining the euro would leave Britain unable to pursue an independent monetary policy. Others might argue that without the power to set interest rates, we would run the risk of a new housing bubble. But our monetary policy is already constrained by world financial markets, and the power to set interest rates has not prevented our housing bubble.

The central issue of a (hypothetical) negotiation over Britain\’s adoption of the euro should be the \”economic governance\” question. High priority would need to be placed on scrapping the common agricultural policy and creating a well-financed federal European treasury which, much like the US treasury, could issue its own paper and, most important, could be used to effect transfers between Europe\’s regions. In essence, improving eurozone governance should involve promoting mechanisms for recycling surpluses from surplus to deficit countries.

That is, that neither of the two possible solutions are possible in anything like real time. Thus they\’re not actually possible and thus neither is a Green New Deal.

Good, so that\’s that solved then and we can get on with thinking up other ways of dealing with matters.

Well, no…

The car scrappage scheme has protected about 4,000 jobs in the UK auto industry, Government estimates have claimed.

At a cost of £400 million.

As stimulus measures go this isn\’t all that effective. The number of jobs saved is of course at the high end of estimates: no, don\’t be silly about this, this is the people who spent that money defending the decision to have done so. Of course they\’ve put the best gloss on it.

So £100,000 per job saved. Given median incomes of around £25,000 saving a job for a year costs four times what that job pays for a year. So we have a multiplier of 0.25…..which really, really, isn\’t the sort of number which gives one confidence in the merits of Keynesian spending. For that we want a multiplier of over 1.

And as for the idea that such Keynesian spending pays for itself….well, the tax take on £25,000 is something like £8,000 (income tax plus NI) so we\’re spending £100,000 to get £8,000 back in tax……which again doesn\’t look like such spending pays for itself.

No, sounds like it was a very bad idea indeed actually.

Well, yes…

Knife crime has grown because the decline of Empire has given boys no other adventure to take part in, according to Joanna Lumley.

It is true that young Anglo Saxon males have a thing about drinking till they vomit and fighting, in the absence of any foreigners they\’ve historically been quite capable of inventing some reason to fight among themselves.

Various Romans noted the points, the Romano-Celts made closer studies than they would have liked and Empitre came in part from that lust for new places to fight over and drink and vomit in.

The problem seems to be that Johnny Foreigner ain\’t so keen on our exporting the behaviour any more, can\’t think why.

On why Peter Tatchell is a national treasure

Mr Holes is obviously homophobic and should not be insulting people with his anti-gay tirades. He should be challenged and people should protest against his intolerance. However, in a democratic, free society it is wrong to prosecute him. Criminalisation is not appropriate.

The price of freedom of speech is that we sometimes have to put up with opinions that are objectionable and offensive.

Just as people should have the right to criticise religion, people of faith should have the right to criticise homosexuality. Only incitements to violence should be illegal.

Now of course everyone should hold such a view of the matter but Mr. Tatchell is one of the few in public life who have repeatedly expressed this clearly and obviously correct view of freedom and liberty.

Bugger standing for the Greens in Oxford, we want a peerage for this man!

(Sadly the Number 10 Petitions site will not take nominations for honours).

Phillip Blond

Weird or what?

Blond is a man for big ideas, sweeping statements and the grand historical overview. His key selling point is the way he bundles together the unexpected: a passion for social justice alongside an instinctive social conservatism.

We\’ve a word for that combination: facism.

Either Franco or Salazar would have been delighted to lay claim to the two.

Weird that those who\’ve been screaming at the neoliberals for decades about purported facism cannot recognise real fascism when it comes up and bites them on the bum.

Climate change is solved

I see the cost of [solar] photovoltaics going down and down. Right now it\’s about $4 per watt for full installation. In 10 years\’ time, it will certainly be less than $2. If it\’s $1 or $1.25 then everyone will put it up without subsidy.

That\’s Steven Chu, US Energy Sexcretary.

And he\’s absolutely right. As soon as non fossil energy generation is cheaper than fossil energy generation then the problem goes away.

Yes, even things like cars….if electricty is cheap enough then cracking water to make hydrogen for fuel cells, or battery powered cars, these work.

Essentially, whatever it was that we needed to do we\’ve already done. Sure, getting the manufacturing cost of the necessary technologies takes time but we did start doing this a couple of decades ago.

How Terribly Amusing: Gideon gets one right!

Probably pure blind luck but still: as Napoleon pointed out, luck ain\’t a bad thing to have.

So Gideon\’s decided to reduce the NI…the tax upon jobs.

Which is a good thing. Yes, this is even more of a good thing the further left (or Keynesian perhaps) you go.

Rightie kitten skinners (but only if they\’re live mind!) like me argue that we need to cut the number of flatulents occupying government offices across the land. Move further left (not, to be honest, all that difficult) and you start to hear people saying that this will cut vital public services. So, what we need to get out of this mess is more growth.

With more growth she\’ll be right. Budgets will come back into balance and no diversity officer need be harmed in our economy.

So, if you do believe this version of the story what should you be arguing we do about taxes?

The results of the analysis suggest that income taxes are generally associated with lower economic growth than taxes on consumption and property … These findings suggest that a revenue-neutral growth-oriented tax reform would be to shift part of the revenue base towards recurrent property and consumption taxes and away from income taxes, especially corporate taxes. There is also evidence of a negative relationship between the progressivity of personal income taxes and growth.

That\’s the OECD that is and there\’s a nice little chart there as well. If growth were your aim you\’d reduce taxation upon personal incomes….NI is taxation on personal incomes….and thus Gideon is doing the right thing.

Now if I actually believed that he (or anyone else at CCHQ) had the gumption to read OECD reports then I\’d applaud his actions.

But I don\’t, this is blind luck.

Or, of course, he\’s been reading the UKIP manifesto.

Dealing with climate change causes skid marks

I have a feeling that people have got this story all wrong:

CIVIL servants were furious yesterday after bosses fitted timers to stop them spending longer than 10 minutes on the loo.

The cost-cutting measures were introduced at the Government Office for the West Midlands.

A hidden sensor switches off the toilet light after 10 minutes, forcing people to finish what they are doing and leave – in the dark.

One worker from the Birmingham office said: “This is both humiliating and degrading.”

Given what people in the Government Office of the West Midlands actually do (it\’s part of the EU imposed regionalisation of the country) we\’d all be entirely happy with their taking more time in the loo rather than crapping all over everyone in implementing their dynamic outreach contextualisation programmes for forward onward reliability.

However, this isn\’t about that at all. This is about turning out the lights so as to reduce electricity consumption. Put the toilet lights on a timer thus ensuring that the occasional bulb isn\’t left on. Entirely missing the point of course that many will use the toilet for a minute or two and then turn out the light. In fact, given that wees are rather more common than craps (err, except in Government Offices, OK, I\’ll give you that, possibly) putting a 10 minute timer on the lights could well increase electrcity consumption.

But for those working for the Government Office of the West Midlands who do not follow Government Healthy Eating Guidelines and thus have insufficient roughage in their diet (something we can take to be 100% of said workforce. Look, they know how useless everything they themselves do is and thus are even more cynical about Government Guidelines than the rest of us) this will of course cause problems as they flail about wildly in the dark attempting to wipe off the clarts.

For, as we know, bureaucrats could not find their own arses with both hands in the dark.

And thus the proof of the headline. Dealing with climate change causes skid marks.

Jamie\’s school dinners

Eating Jamie Oliver’s school dinners improves children’s performance in tests, according to researchers who claim that the celebrity chef’s campaign to improve school food has had more impact than government literacy programmes.

The paper is here.

I would like to persuaded, really, I would. But I\’m afraid I\’m not.

Not everyone eats school meals of course. But some get free school meals. We would thus expect those who get free scool meals to have a greater take up of eating school meals than those who do not.


So whatever the effect is, if it truly is just the better school meals (as opposed to anything else, like a general rise in standards, which they note, or more attention being paid which is a likely result of such an experiment or other confounding factors) we would expect such effect to be greater among those who get free school meals.


Ah, no:

So far we have included all pupils in the analysis. However, only part of them has
been truly treated, those who actually eat school meals. We do not have individual
information about who is eating school meals and who is not. The only information
we have is whether the pupil is eligible for free school meals. One could argue that
“free school meals” pupils are more likely to have been treated than the other pupils.
However, we cannot be sure that the change in diet has been most significant for these
pupils in comparison to others. Thus, we should be careful with the interpretation of
the results. Table 7 reports regression results based on the sample of free school meal
children only. We find that most of the positive significant effects decrease or
disappear entirely. Thus, we fail to find evidence that the campaign specifically
helped those children who benefit from free school meals. This result may seem
counter-intuitive, as the FSM pupils should presumably be the most likely pupils in
the school to be eating the meals. One possible story is that FSM pupils are those for
which the change has been to most difficult to implement, since these pupils were
probably eating the “unhealthy” meals on a daily basis and would therefore maybe be
the most put off by the change in menus. Anecdotal evidence (from the TV
programme) suggests that some children refused to eat the healthy meals, which
would probably have harmed cognitive performance more than eating anything albeit
something of little nutritional value.

Those explanations could also be true reflections of reality.

Now I\’m perfectly willing to agree that better food could lead to better performance. Entirely happy with the idea that a full belly of decent nosh improves matters. Certainly that Jamie deserves the knighthood he\’s definitely going to get for even trying.

I\’m just not convinced that this specific paper proves the hoped for link. For it finds exactly the opposite effect that we would hope for if it really was as simple as sticking better food into the little blighters.

I will make one prediction though. This paper will be used as absolute proof that it does work and as all the proof that is needed to ban vending machines, lock the pupils in so that they don\’t go off to the chippie, as \”proof\” that additives destroy young minds and that turkey twizzlers are child abuse.

Any and all of those things could be true and or necessary: but this paper doesn\’t prove them.

And the surprise here is?

Shoppers choose hybrid cars, \”green\” washing-up liquid and energy-saving devices over cheaper but dirtier alternatives partly to improve their social status, according to a new study published today.

Researchers found consumers are willing to sacrifice luxury and performance to benefit from the perceived social status that comes from buying a product with a reduced environmental impact.

Human beings are status seeking creatures…men more than women it is true, but still we\’re all status seekers.

Further, in our society, there are myriad totem poles of such status. One can win a national award for playing video games, one can buy a Prius, one can wear £50,000 worth of watch and one can wear the waistband of one\’s trousers around one\’s knees (one can make excessive use of the word \”one\”) and in different parts of that myriad society all will confer status.

What really adds to the joy is of course that exactly the same actions will, in other parts of that myriad society, reduce status (geek, hippie, bastard, prole and Worstall).

Colin Ward

He was inspired by the anarchist thinker Peter Kropotkin (1842-1917), who wanted to replace capitalism not with state ownership but with \”Mutual Aid\”, a grass roots co-operative system dedicated to the communal good. Ward, by contrast, saw a need for some elements of centralised authority in a modern bureaucratic state, but felt that the welfare state had almost eviscerated the \”mutual\” tradition of the working classes.

\”When we compare the Victorian antecedents of our public institutions with the organs of working-class mutual aid in the same period,\” he wrote, \”the very names speak volumes. On the one side the Workhouse, the Poor Law Infirmary, the National Society for the Education of the Poor in Accordance with the Principles of the Established Church; and on the other, the Sick Club, the Co-operative Society, the Trade Union. One represents the tradition of fraternal and autonomous associations springing up from below, the other that of authoritarian institutions directed from above.\” The welfare state, in his view, had assumed the ethos of the public institutions and stifled their fraternal counterparts.

No, I\’d not heard of him which is of course my fault not his. But the spontaneous organisation of civil society performing better than the top down organisation of the State?


and arguably (though he would have hated the idea) had more in common with the libertarian Right than with the Left.


Colin Ward who died on February 11, married, in 1966, Harriet Unwin, a widow with two sons. Together they had another son, and he was also guardian to two other boys whose mother had died. His wife and children survive him.

And will you look at that, a political theorist who lived the life he preached.

The new movie

Via Obo:

Double Entry Man
Calculator Boy
Wonder Auditing Woman
The Cash Book Kid
Invoice Reconciliation Girl

All are ready to battle the dreaded Evil Bankers, who The Justice League OF Accountancy vow will never again be able to bring the world to the verge edge of financial ruin in their power-lust for ever-larger bonuses!

With the Justice League of Accountancy on guard against the rapacious Hedge-fund managers the world is safe once more.

But for how long?

What financial malfeasance is now being planned on the secret island tax-shelters where the world’s evil financial barons plan and plot together to cause a collapse in world share prices, destroy interest rates and bankrupt some once-famous High Street shops.

Armed only with their secret accountancy powers, a super-human knowledge of the tax laws and several spare batteries for their calculators, The Justice League Of Accountancy go into the ultimate auditing battle, to undertake the greatest feat of accountancy the world has ever known.

Script by you know who.

On the Washington Consensus

Ritchie decides to critique the Washington Consensus.

It\’s the usual amusement from him, anything which reduces the power of the State is bad m\’kay?

But what\’s really fun is that he uses as his source document this. Which is a very good source document indeed, showing that a goodly portion of the things Ritchie complains about aren\’t in fact part of the consensus he\’s complaining about.

It also contains this lovely point:

The third interpretation of the term “Washington Consensus” uses it as a synonym
for neoliberalism or market fundamentalism. This I regard as a thoroughly objectionable
perversion of the original meaning. Whatever else the term “Washington Consensus”
may mean, it should surely refer to a set of policies that command or commanded a
consensus in some significant part of Washington, either the US government or the IFIs
or both, or perhaps both plus some other group. Even in the early years of the Reagan
administration, or during Bush 43, it would be difficult to contend that any of the
distinctively neoliberal policies, such as supply-side economics, monetarism, or minimal
government, commanded much of a consensus, certainly not in the IFIs. And it would be
preposterous to associate any of those policies with the Clinton administration. Yet most
of the political diatribes against the Washington Consensus have been directed against
this third concept, with those using the term this way apparently unconcerned with the
need to establish that there actually was a consensus in favor of the policies they love to

Which is just what Ritchie has done.

Which leads to the question: does he actually read his own source documents?

Apparently the idea of homo economicus should be buried as well. Ritchie himself links to that page BTW:

Homo economicus is seen as \”rational\” in the sense that well-being as defined by the utility function is optimized given perceived opportunities. That is, the individual seeks to attain very specific and predetermined goals to the greatest extent with the least possible cost. Note that this kind of \”rationality\” does not say that the individual\’s actual goals are \”rational\” in some larger ethical, social, or human sense, only that he tries to attain them at minimal cost.

I find it very hard indeed to understand why we\’d want to junk that description of human beings. Can someone explain it to me please?