December 2010

Idiot leftism of the day

From Liberal Conspiracy:

The majority of people working in Britain’s financial services industry are happy to stay in the UK, said a survey by the website, despite fears a clampdown on pay may force top performers overseas.

The online poll of 415 workers in London’s City finance district said only 14 percent were actively seeking a job overseas, with the rest happy to remain in the UK.

Is 14% actively looking to emigrate high or low?


The number of people leaving the UK for 12 months or more fell to 368,000 in 2009 compared with 427,000 in 2008. The drop in total emigration was due to a decrease in the numbers of British and EU citizens leaving the UK. An estimated 140,000 British citizens emigrated in 2009, the lowest number since 1999 and down from 173,000 in 2008.

If population is 65 million then 0.5% emigrate each year and about 0.2 % of Brits do.

If bankers are between 28 and 70 times more likely to emigrate than the general population then I think we would rather conclude that bankers are extremely pissed off with the system here, not \”happy\”, no?

On the influence of our man

Research by Richard Murphy (of Tax Research) has shown that the state recoups 92% of the cost of creating new public sector jobs – through lower benefit payments and increased tax revenues.


That\’s a way to get tax rates down isn\’t it? So instead of us having to pay £100,000 in taxes to employ a GP, we really only have to pay £8,000! The rest just magically flows from that perpetual money tree that is government.

The implication being that if we only hired a few more people then tax rates could be 8% of what they are now!

Sadly, Richard\’s calculations don\’t in fact say that, even he\’s not that daft. What his calculations say (and I am saying nothing at all here about whether they are correct or not) is that firing a current civil servant, who then goes on the dole and gets all sorts of benefits, never to work again, only saves 8% of the cost of employing them in the first place.

This does not translate the other way around of course: pulling a current private sector worker into the public sector does not cost only 8% of the cost of their wages. It is only (by Ritchie\’s calculations again) if it is someone on the dole, getting all sorts of other benefits, who would never gain private sector work,  who gets the public sector job that this is true.

The thing is then, while Murph might be a little cockeyed at times, Swerotka is simply too dim to understand what he\’s actually being told.

And in memory of Tom

We have house guests and we were discussing the various fates of mutual friends that we\’ve not seen for years. And one such story was of Tom, a delightful man who worked for many years as a subeditor on the Daily Telegraph (and one of his colleagues, The Great Redacto, has been a commenter here over the years).

Tom died of a recurrence of a cancer which had been in remissions for many years: well over a decade I think.

Rasputin however met a more brutal demise, as he was poisoned, shot four teams and thrown in the river before he eventually drowned.

Four \”teams\”?

Would never have happened in Tom\’s day.

World\’s going to the dogs as the good ones pass on I tell you….

More honours list

To tell the old joke again:



Sir Peter Forbes Ricketts, KCMG. Formerly permanent under secretary and head of the Diplomatic Service, Foreign and Commonwealth Office.


Simon Lawrance Gass, CMG, CVO. HM Ambassador, Iran.

Professor Eldryd Hugh Owen Parry, OBE. Trustee and Founder, Tropical Health and Education Trust. For services to healthcare development in Africa.


Otherwise known as \”Call Me God\”, \”Kindly Call Me God\” and \”God Calls Me God\”.

Blimey, at last!

From a PR email:

Worldwatch Institute\’s State of the World 2011
Shows Agriculture Innovation Is Key to
Reducing Poverty, Stabilizing Climate

It\’s taken them what, 30 years to work this out?

Technological advance is the solution to most problems?

Better late than never I suppose…..

On the Anglo Saxon financing of business

Our Willy Hutton keeps telling us that we\’re screwed because the banks just won\’t lend money to business for investment in long term projects.

And as I keep trying to point out that\’s because we have a different system of financing investment. The markets.

But, we are told, markets only seem to be willing to finance short term profit seeking adventures. They\’ll not back anyone trying to do something that will take years to come through.

Oh yeah?

The Falklands explorer\’s shareholders have had a nail-biting year, after Desire claimed to have made an oil \”discovery\” at its Rachel North well earlier this month. Less than two weeks later, the company admitted the well held only water, causing its shares to crash 50pc in one day.

On Wednesday, Desire again found no evidence of oil in the Jacinta well, which analysts had claimed had just a one in 20 chance of success. It will now drill down further to a depth of 1,670 metres in the hope of finding oil deeper under the sea.

Desire has been funded for the last 12 years purely by the proceeds of share issues on AIM.

It may be a good investment, it may be a bad one, that\’s an irrelevance to the point here. You can fund long term, risky, business ideas through the public markets.

And can you imagine Willy\’s fury if he\’d heard that a bank had financed a company which, as it looks like it might, manages to piss away £100 million?

This isn\’t really sustainable

Ministers say people should prepare to spend more than a third of their lives in retirement due to the \”staggering\” rise in life expectancy.

In the first official projection of its kind, the Department for Work and Pensions today forecasts that almost a fifth of Britons will celebrate their 100th birthday.

The long lives are, that\’s just great.

It\’s the \”retirement\” bit that isn\’t.

Because someone, somewhere, has to pay for that third of life in economic inactivity. (Add to it the one fifth of a century, or perhaps more like a quarter of the average life spent economically inactive in youth.)

There are various ways of course: much greater savings during the periods of economic activity….this would imply much lower tax rates then present so as to allow room for such savings.

Or it could all be tax paid, which implies much greater taxes than at present.

Or to reduce the burden on those economically active we could reduce the level of consumption by the old that we\’re willing to pay for: but \”elderly poverty\” as a deliberate plan is unlikely to work.

And whichever of these we do plump for, we\’re still left with the fact that each economically active person is going to be carrying the costs of more economically inactive people: whether it\’s through returns to capital from previous savings or whether it\’s current transfers through the tax system.

(Umm, actually, that\’s an interesting idea. We know that we\’ve seen a rise in the return to capital over recent decades, measured as a percentage of the economy. And that we\’ve also seen a sharp rise in those in retirement. Might it be that some/all of that rise in the return to capital is in fact the transfer of current economic activity to those in retirement? Hmm, some of it defintitely is but whether it\’s an appreciable amount I\’ve no idea. Anyone able to work it out?….umm, private pensions paid out are some £35 billion a year I think? 3%, 2.5% of the economy? Anyone know what they were say 30 years ago?)

Now, there is one get out here. A way in which those currently working can (through either tax or profit share) support an increasing number of retired, without too much impact on the returns to their labour, while still providing a reasonable and rising living standard to those in retirement.

It\’s called economic growth. If trend growth were, say, 3%, then the economy doubles every 23 years. Four times in a working lifetime. That gives us enough flexibility, there\’s a sufficiently cornucopian amount of growth there, that we\’ll not notice too much nor mind too much about the amount that is going to support those retired.

4% would of ccourse be better.

So how do we do this? Raise trend growth from its current 2-2.5%? For that might be what we need to do.

At which point Classical Liberalism Man leaps into action. We can put aside all those lovely ideas about planning or growth, about the State taking a leading role. For even if you do believe the Ha Joon Chang\’s of this world, they are still talking about economies behind the production frontier. The UK is very definitely at that frontier.

In effect, what we need to do is move more closely to the Nordic or Scandandavian model. No, not the State takes care of every child\’s skinned knee part, for we\’ve already allocated our possible redistribution to those in retirement. But what we do need to do is have, as they do, that classically liberal economy humming away underneath that redistribution. For that\’s the only way we can generate the growth to keep the system humming along.

Taxes moved off capital and corporations, onto consumption. Land taxation would be a great idea. Hugely flexible labour markets (the Bob Crow\’s of this country howled out of public life).

In short, if we\’re going to have to have a lot more redistribution, which we will with a rising pensioner population, then we have to look to the only economic structures that manage to support both high levels of redistribution and high economic growth. That is the Nordics: which means that underneath the redistribution we need to have what they have. A largely classically liberal economy.

Err, yes, and?

Despite record profits this year, and 9% dividends to shareholders, Heinz managers are using the broad context of ‘austerity Britain’ to hold down wages below inflation, having imposed a pay freeze in 2009 because of ‘uncertainty’ about the international economy.  This includes explicit comparison to the low wage settlements across the UK, including the public sector, in a convenient reversal of the government-pushed line that the public sector has it cushy compared to the private.

Wages are not set by the worker\’s current occupation. They are set by the wages that worker could be earning elsewhere. By the worker\’s possible alternative occupations.

This is why hairdressers earn £10 an hour in England and thruppunce ha\’penny in China, because the alternative jobs that the people in England could be doing pay around £10 an hour and the alteratives in China pay spit.

So, yes, of course, if everyone elses\’ wages are being held down/reduced/compressed, then so will those at a factory that is actually making profits.

Best line yet on the Elton John baby

I wonder if the baby in question will ever have to be nervous about his parents finding out that he’s straight?

mister choos.

Which leads me to an interesting question. We\’re near, perhaps not now but getting close to, the first generation of children born by surrogacy/artifical insemination/ in vitro techniques to same sex couples reaching some form of sexual maturity.

At which point we can go looking to see whether there is a higher level of same sex attraction among those children from same sex couples than there is among the children of the heterosexual couples.

This will, at least I assume it will, enable us to answer the age old question of whether it\’s nature or nurture which leads to same sex or opposite sex attraction.

(Leaving aside of course the well known availability effect. Same sex action is of course much more prevalent in situations where opposite sex action is impossible simply due to the complete absence of the opposite sex).

And we might well be able to go even further in the future as well. For there are now (in the lab only so far I believe) which allow the genetic material to be taken from the same sex parents, using an egg purely as the development mechanism rather than a contributor of genetic material.

And when that generation grows up we will be able to observe whether same sex attraction is genetically inheritable.

Only thing is, are we sure that anyone will be able to get a grant to study such subjects?