April 2011

How to become an Admiral

This is slightly cruel, as Sir Henry Leach had a more than distinguished career. However, he does illustrate the standard Navy doctrine of how to become an Admiral:

Henry Leach married, in 1958, Mary McCall, daughter of Admiral Sir Henry McCall

Marry the daughter of an Admiral.

Tax Justice Network: still ignorant

….but like other too-good-to-be-true patent remedies, the idea that tax cuts for business stimulate investment and growth just won\’t die.

Sure, the reason it won\’t die is because it is true.

From the OECD:

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.

Note that this is nothing to do with tax levels: it\’s to do with the tax mix. The more you bias your tax collections to the corporate income tax and the less towards consumption (ie, VAT) and property taxes, the lower will be the growth rate for any given level of total revenue collection.

It\’s one thing to argue about higher tax levels, greater public services and so on, I might disagree with the TJN but that\’s just fine. But for them to continue lying about the basic economics of taxation is really just not on.

A theory of cancer

I\’ve no idea whether it\’s a good theory of cancer but it\’s certainly an interesting one:

Together we developed the theory that cancer tumours are a type of atavism that appears in the adult form when something disrupts the silencing of ancestral genes. The reason that cancer deploys so many formidable survival traits in succession, is, we think, because the ancient genetic toolkit active in the earliest stages of embryogenesis gets switched back on, re-activating the Proterozoic developmental plan for building cell colonies. If you travelled in a time machine back one billion years, you would see many clumps of cells resembling modern cancer tumours.

The implications of our theory, if correct, are profound. Rather than cancers being rogue cells degenerating randomly into genetic chaos, they are better regarded as organised footsoldiers marching to the beat of an ancient drum, recapitulating a billion-year-old lifestyle. As cancer progresses in the body, so more and more of the ancestral core within the genetic toolkit is activated, replaying evolution\’s story in reverse sequence. And each step confers a more malignant trait, making the oncologist\’s job harder.

Do we have any doctorly types here who could give us a view?

On the subject of Mr Marr

He confesses:

Andrew Marr, the broadcaster, has admitted having an extramarital affair after deciding to abandon a controversial injunction banning the media from reporting it.

Much of the story is now out therefore. Yes, Andrew Marr had an extramarital affair, thought he\’d got his mistress pregnant, paid child support for 7 years and then a DNA test revealed that he wasn\’t the father at all.

Perhaps the ears weren\’t developing as expected or some such.

What isn\’t revealed as yet, or at least not in this story, is the identity of the mistress. Nor of the actual father of the child.

As we\’ve pointed out before in entirely unrelated matters, Alice Miles is still at The Times and, well, hmm, dunno, Ed Balls is Shadow Chancellor perhaps?

I thought Chutzpah was a Yiddish word

Not Russian:

In a rare interview on the eve of the 25th anniversary of Chernobyl on Monday, Col-Gen Nikolai Antoshkin said he was shocked at how poorly Japan had coped with its own nuclear disaster.

\”Look at advanced Japan,\” he said. \”People are housed in stadiums and are lying about on the floors of sports halls in unhygienic conditions.\”

\”Right at the start when there was not yet a big leak of radiation they (the Japanese) wasted time.

The Soviets had evacuated 44,600 people within two and a half hours and put them up in \”normal comfortable conditions\” on the same day, he recalled.

And then they acted in slow-motion,\” he said.

They\’ve just had an earthquake and a tsunami you gibbering loon!

There are no \”normal, comfortable conditions\”! It\’s only the big buildings that survivied: for Japanese earthquake building codes are in fat that houses should be light, so that when they fall over on people they don\’t kill them. It\’s actually how they design the damn place!

\”I think the Japanese catastrophe is already more serious than Chernobyl. The main thing is that they do not allow it to become three, four or five times more serious.\”

Well, yes, that\’s true, the earthquake and tsunami are indeed more serious than Chernobyl. 20 odd thousand dead as opposed to the few hundred from Chernobyl for example.

The nuclear problems, no, not so much. But, and here\’s a prediction, I bet you that someone will pick up on this comment and scream that Fukushima, rather than the total situation, is now at risk of being 5 times worse than Chernobyl.

Standard politics

Oil price reporting agencies Platts and Argus are under scrutiny over their governance and transparency as part of a G20 investigation into commodity speculation.

Called killing the messenger.

If oil prices are not to a politician\’s liking it must be the people who report the oil prices at fault, eh?

Mr. Chakrabortty thinks David Willetts is dim

For university fees all seem to be at the high end of the indicated range, leading to:

He predicts that there will be a slump in demand for the bottom-ranking 20 or 30 institutions, which will lead to them suffering \”severe financial difficulties\”.

But that it to assume that this is either an unwelcome or undesired outcome of the fees changes.

It is, unfortunately, rather going against the current collective wisdom to say that too many people are going to university these days. For the mantra is that ever more education will cure all our economic ills.

Entirely nonsense of course. But to stand up and say that it\’s nonsense, that the 30 worst unis in the country will no longer be funded is simply not a politically possible statement or action.

Similarly, to point out that it might be a good idea that instead of those 30 (or more!) establishments might stop trying to ape that rather more selective group that attempt to teach people how to think and instead teach their intake how to do….you know, some vocational work, why the hell not day release schemes for plumber\’s mates?…..is verboeten.

However, if you turn it all over to a market (and note, unless you\’re something weird like a New Classical, no one actually thinks that markets clear immediately, thay they get relative prices, signals, correct at first stab at it) then in time, we\’ll find that the punters don\’t think that a \”feminism in meda studies\” degree from Neasden Poly Uni is worth the £9k a year. And Neasden Poly Uni will go bust, or start teaching assistant nurses to wash their hands or something.

And thus, by exposing the education system to the chill winds of the market we\’ll end up doing what we cannot do politically: point out that trying to stick 50% of the age cohort through an academic education system is simply insane.

Which is why thinking that Dave Willetts is dim is rather dangerous: he\’s not known as \”Two Brains\” for nothing.

The latest carbon worry: imports

There\’s both less and more to this than you might think.

Cuts in carbon emissions by developed countries since 1990 have been cancelled out three times over by increases in imported goods from developing countries such as China, according to the most comprehensive global figures ever compiled.

Previous studies have shown the significance of \”outsourced\” emissions for specific countries, but the latest research, published on Monday, provides the first global view of how international trade altered national carbon footprints during the period of the Kyoto protocol.

Under the protocol, emissions released during production of goods are assigned to the country where production takes place, rather than where goods are consumed.

Campaigners say this allows rich countries unfairly to claim they are reducing or stabilising their emissions when they may be simply sending them offshore – relying increasingly on goods imported from emerging economies that do not have binding emissions targets under Kyoto.

The less is that the numbers aren\’t quite as bad as they\’re made out to be. The original abstract is here:

We find that the emissions from the production of traded goods and services have increased from 4.3 Gt CO2 in 1990 (20% of global emissions) to 7.8 Gt CO2 in 2008 (26%).

I\’m assuming that when they say \”traded\” they mean internationally traded. And when we look at what the growth in world trade has been (just by eyeballing I\’ll say it\’s 6% pa, not accurate but good enough here) and we run it through a compound interest calculator (starting point 4.3, 18 years, 6% interest,) we get the end result of 12.27 Gt CO2.

As opposed to our actual outcome of 7.8.

So, yes, emissions with respect to trade are increasing. But (and I admit this calculation is very crude indeed) the carbon intensity of trade is clearly falling. Emissions per unit of trade are falling, even if total emissions are rising because trade is growing so quickly.

One possible interpretation of this is that far from simply offshoring emissions, what is in fact happening is that production is moving to places where we are more emissions efficient. Which, if true, would be a very good thing indeed.

In fact, that\’s rather really the point of trade, to get the things that we want with the consumption of fewer resources in that getting.

The much more to it is that such information will be used by those who desire to strangle trade anyway. You know, the green (and Green) idiots who would rather we all paid a fortune for crap produced next door to us (because it\’s socially so much more rewarding to buy from the little man down the road, don\’tcherno) rather than from people who partake in the global division and specialisation of labour.

And thus they will use these carbon figures to impose trade barriers: there\’s already a lot of talk about having carbon tariffs.

And that would be very silly indeed if my interpretation of the above figures is correct. If trade leads to a fall in carbon intensity of production, as it seems to (to take the obvious example, growing pinapples in Central America certainly has lower emissions than trying to grow them in Kew Gardens, to tkae some less obvious, tomatoes from Spain are lower emission than UK grown, lamb from New Zealand lower than Welsh), then actually we don\’t in fact want to reduce the trade that leads to such reductions in carbon intensity.

Far from it, we\’d like to increase it. That would mean that we can have a higher standard of living for whatever level of carbon emissions is \”allowable\”: because we\’re getting more bang for the buck of each emission.

Unfortunately, that ain\’t the way it\’s gonna play out, is it? The cretins will use this as proof that we must reduce trade.

Arguments against women in Parliament: Lisa Nandy

So she\’s got a piece in The Guardian about the ECGD:

Umm, it\’s not a government department. It\’s a government agency. There is a difference and I\’d hope that an MP knew that.



The former is a method of selecting a candidate to run for office. The latter is an area of the world which is what you mean.

\”Its clients tend to work in troubled areas of the world,\”

Yes, because that\’s where you need insurance you see. Insurance is protection against risk, \”troubled\” and \”risk\” tend to go together.

\”While it is the British taxpayer who underwrites these projects in the short term, it is ultimately developing countries that end up footing the bill when projects go wrong. When the project buyer fails to pay up, the ECGD can turn this into \”third world\” debt. Today countries as diverse as Vietnam, Kenya, Indonesia and Egypt owe the ECGD £2bn for previous sales, regardless of whether the sale benefited the people of those countries.

There are virtually no safeguards. The ECGD has no \”duty of care\” towards people in developing countries who are affected by the projects it supports.\”

Yes, because the local government has to sign off on such a guarantee.

What, you think the ECGD just says to me, \”Well, you\’re selling to some bloke in Indonesia, here\’s your insurance and if he buggers off then we\’ll stick the Indonesian Government with the bill?\”

Don\’t be silly, I\’ve got to go and get the signature of the Indonesian Government, agreeing that they\’ll pick up the bill if the bloke buggers off. If I don\’t get that signature then it never does end up being the Indonesian taxpayers who have to cough up.

Tell you what Ms. MP with a year\’s experience. You go do some research on this, you know, something more than your five years with a children\’s charity, and then we\’ll all come back and discuss it in more detail, shall we?

Blimey…..equal opportunities for women in politics is all very well but equal opportunities for uninformed idiots?

Manic stupidity about Marx

This is one area at least where Marx certainly knew what he was talking about. In 1854, Commodore Matthew Perry sailed into Japan\’s harbours threatening military force if Japan did not open its borders to free trade

Yes, yes, I know Mark is supposed to have been some sort of prophet but the communist Manifesto was written in 1848 you twat, 6 years before Perry turned up to shout at the sons of Nippon.

The community group shakedown

As ever, a \”community group\” is trying to shake down one of the supermarkets.

In this case it\’s one in DC, trying to extort from WalMart. Worth reading the whole list but these three stood out for me:

  • Provide free shuttle transportation to and from the nearest Metro station to each D.C. store every 10 minutes.
  • Commit to traffic alleviation studies.
  • Provide up to 2.5 free or low-priced parking spaces per 1,000 square feet of building space.

Umm,what sort of idiot demands free parking and traffic alleviation?

Cretins, I tell ya\’

I wonder if this was Polly\’s husband?

Could this be David Walker?

Senior figures at the Audit Commission, which polices spending at local authorities, NHS trusts and other government bodies, spent almost £20,000 of public money over the past two years on luxury goods and services.

The credit card receipts disclose that Audit Commission executives enjoyed meals costing more than £600 at L’Escargot and Coq d’Argent in London. Hundreds of pounds were also spent at a brasserie owned by Raymond Blanc, the French chef. In total, £11,390 was spent on fine dining in two years.

The body is thought to be the first government organisation to release details of spending on taxpayer-funded credit cards. Thousands of other civil servants also have the cards, which have been used for spending of about £1? billion, leading to warnings of a public funds scandal.

For he was the head of PR for the Audit Commission. And that\’s what part of the PR job is, taking opinion formers (read, senior journalistic types) out for expensive meals and explaining what you\’d like them to write your views of what is going on.

So it wouldn\’t surprise me at all if it was: and if it was he might end up getting more stick for it than he truly deserves.

This might be true but it\’s considered indelicate to say so

Murray is not a supporter. “Women in the boardroom? Terrific,” he says. “Why not? Always welcome. But why make a special case out of it? Why tell everybody you’ve got to have X number of women in the boardroom? Women are quite as intelligent as men. They have a tendency not to be so involved quite often and they’re not so ambitious in business as men because they’ve better things to do. Quite often they like bringing up their children and all sorts of other things.

“All these things have unintended consequences. Pregnant ladies have nine months off. Do you think that means that when I rush out, what I’m absolutely desperate to have is young women who are about to get married in my company, and that I really need them on board because I know they’re going to get pregnant and they’re going to go off for nine months?”

Simon Murray, new Glencore Chairman.

Oh dearie me no

This isn\’t correct at all:

Alumina, the ore from which aluminium is extracted, is not rare. In fact, it makes up about 6pc of the world\’s crust.

The ore is bauxite. Which you then convert to alumina using the Bayer Process.

OK, so you might not worry all that much about such a mistake in a general news column, but in a commodities column, trying to explain the secrets of the aluminium trade?


What bugs me about Chris Patten

No, not the europhilia (although that grates) but the Heresiarch has something about his religious faith:

It makes people think I\’m peculiar and lack intellectual fibres because I don\’t have any doubts about my faith, but I\’d be terrified to have doubts.

Which is really a rather odd statement actually.

For his faith is Catholic, Papist, he\’s married to a divorcee (brief marriage, probably shouldn\’t have happened in the first place, but rules is rules) and he\’s been known to complain quite bitterly about not being able to receive communion as someone married to a divorcee (but rules is rules, see?).

It\’s just a bit difficult to believe both things, that the Church is right (\”no doubts about my faith\”) but also that marrying a divorcee and taking communion is just fine.

Stocks don\’t always outperform bonds

No, really, they don\’t:

A 30-year stock market excess return of approximately zero is a huge disappointment to the legions of “stocks at any price” long-term investors.But it’s not the first extended drought. From 1803to 1857, U.S. equities struggled; the stock investor would have received a third of the ending wealth of the bond investor. Stocks managed to break even only in 1871. Most observers would be shocked to learn there was ever a 68-year stretch of stock market underperformance. After a 72-year bull market from1857 through 1929, another dry spell ensued. From1929 through 1949, stocks failed to match bonds,the only long-term shortfall in the Ibbotson time sample.

While this is true, it\’s not what we\’re normally told is it?

However, there is actually a simple explanation for this. Those two periods mentioned are the only two periods when there\’s been serious deflation in the US price level. (Well, 1857 to 1871 also included the world\’s bloodiest war up to that time, not something likely to really boost a stock market).

Check that out here.

And there\’s nothing really very surprising about bonds performing well when you\’ve got negative inflation. They are, after all, denominated in nominal money, while returns to stocks are going to be in real money.

Which leads us to an interesting thought about the future. Bonds will be a just great investment if you think we\’re going to have deflation. It\’s what has given Japanese investors in Japanese Govt bonds rather nice 3-4% real returns in recent decades, even as nominal interest rates are around zero.

Hands up all those who think that the US or UK governments, delightful people though they be, are going to deliver stable or falling general price levels anytime soon? Quite. Stocks and shares it is then.