June 2011

A hint to Lyn Brown MP

\”I would like to pay everyone who volunteers for me and who is ultimately seeking a wage. The reality is that I do not have the resources to do so,\” she said in a statement.

Get one of your paid staff, not the unpaid slaves, to write your press releases for you.

Just a friendly hint like, from one who has been a press officer.

If you start to protest that it was one of your paid people who wrote that then fire them immediately.

They\’re, you know, crap at it.

If it was you……..Boris has provided the lamp posts…….

Johann Hari and the Robin Hood Tax

It is not surprising, however. Because the sad fact is that the BS notion that it is okay to manipulate facts in order to present a Greater Truth is now widespread in the decadent British media. Mark Lawson once wrote a column titled “The government has lied and I am glad”, in which he said it was right for the British authorities and media to exaggerate the threat of AIDS because this “good lie” (his words) helped to improve Britons’ moral conduct. When Piers Morgan was sacked from the Mirror for publishing faked photos of British soldiers urinating on Iraqi prisoners he said it was his “moral duty” to publish the pictures because they spoke to an ugly reality in Iraq. When this month it was discovered that the Syrian lesbian blogger was a fake, some in the media who had fallen for “her” made-up reports said the good thing about the blog is that it helped to “draw attention to a nation’s woes”. And now Hari says it doesn’t matter it he invents a conversation because it helps to express a “vital message” in the “clearest possible words”.

The idea of a “good lie” is a dramatically Orwellian device, designed to deceive and to patronise. A lie is a lie, whether your intention is to convince people that Saddam is evil and must be bombed or that Gideon Levy is a brainy and decent bloke. Lying to communicate a “vital message”, a liberal and profound “truth”, is no better than lying in order to justify a war or a law’n\’order crackdown or whatever.

Quite. Johann is being castigated for this.

As should be the Robin Hood Tax people. They\’re lying to us all for what they consider to be \”the greater good\”.


Customer care for the disabled

It sounds like a scene from Come Fly With Me: a badly disabled young boy, excited about what is likely to be the last foreign holiday of his life, is prevented from going because the budget airline from which his parents have bought tickets decides his wheelchair is too heavy to put on the plane. It isn\’t, though, a cringe-inducing comedy sketch, but instead the cringe-inducing news of easyJet\’s conduct towards Declan Spencer, a 12-year-old with muscular dystrophy.

Some will be outraged, some will not give a shit.

I\’m not going to call for a boycott of easyJet: potential passengers can decide for themselves whether they want to give their money to a company that treats handicapped children the way it treated Declan Spencer.

Quite, the glory of a competitive marketplace. Declan and family are flying on another airline.

You, us, the general public, can decide whether that threatment is worthy of seeking an alternative to Easyjet or not. Our morals, our money, our choice as to whether to deploy our money in pursuit of our moral aims.If enough of us care then Easyjet will change its ways. If not enough of us do then it won\’t.

The problem with this system is what?

The alternative system of course being a change in the law: but if enough of us care then we don\’t need to change the law and if not enough of us care then why change the law?

Yeah, right, energy is like the 30 years war

The actual energy analysis is that bad. But the surrounding argument is nonsensical.

The energy \”war\” is going to lead to global conflict like the Thirty Years\’ War that devasted Germany.

Umm, right.

Never heard of trade then?

Sigh. The Thirty Years\’ War was, at heart (and whole libraries have been written about the causes so allow me to simplify) about \”who rules\”? This is a binary decision: if you do I don\’t, if I do you don\’t.

You can indeed think of energy as being such a binary decision: I get it, you don\’t and vice versa, so let\’s fight over it. But to think that way is to be an idiot. For if we have a method of producing energy (say, solar PV, tidal, whatever) then we\’ve a system by which all can have it. \”Trade\” we call this system. It can be trade in the actual product, energy (the UK gets some 2% of its electricity from France today) or it can be trade in the materials used to produce energy (I think I\’m right in saying that the UK gets all of its solar cells from abroad) and it can be trade in the manufacturing of such materials (First Solar is a US company with large factories manufacturing solar PV systems in Germany), it can be trade in the machinery to make such materials (Can\’t remember the name but a US company sells the silicon slicing machines to China which are used to them make China\’s solar cells) and it can even be trade in the ideas about how you build the machines that build the systems which produce the energy (licences on patents too numerous to mention).

Trade means that human innovation is not a zero sum game, is not a binary decision. Therefore we don\’t need to go to war over it. Thus using the analogy of war to describe the future path of such innovation is nonsensical.

David Hillman, lying scumbag

David Hillman, spokesman for the Robin Hood Tax campaign, said: \”The British government should wake up and smell the coffee. Other governments are moving ahead with a bank tax, while we are letting our financial sector off the hook.

\”A Robin Hood tax on the banks would be the most popular tax in history.\”

A tax which just taxed the banks would indeed be an extremely popular tax.

But as both you, your confreres and fellow campaigners, and I know a Robin Hood Tax would not be a tax on the banks. Nor even upon the banksters.

It would be a tax on all consumers of the products of the financial sector. Which, given that all of us take part in the modern economy which consumes the products of the financial sector would mean all of us.

Now you know this, it\’s been pointed out to you by myself (and one of your colleagues, Owen Tudor, will no doubt have brought my snarls to your attention ) but more importantly it\’s been pointed out to you by the OECD and the IMF. The incidence of a financial transactions tax will be upon consumers, as pointed out by the Nobel Laureates Sir James Mirrless and Peter Diamond. Further, the burden upon consumers is likely to be greater than the revenue raised, as pointed out by the Nobel Laureate Joe Stiglitz.

You know this, your campaign knows this, yet still you market your idea as if it is only the banks which will bear the burden. You are playing off the ignorance of the general public about tax incidence.

Which makes you David Hillman, Owen Tudor, the Robin Hood Tax campaign as a whole, lying scumbags, doesn\’t it?

Laurie Penny will have to work hard to match this

Laurie of course being the Germaine Greer de nos jours.

Also, we are dealing here with literature in translation, but all the judges are anglophone, which is ridiculous.

The prize is for literature translated into English: being a native English speaker is therefore something of an advantage.

Right now, I don’t know. I don’t read fiction – it’s a waste of time.

It\’s a prize for fiction, so perhaps not quite the right judge then Germaine.

By and large, English novels don’t impress the Australian Greer. “The English don’t even write the best novels,” she said. “It’s the French who are the best writers.”

And somewhere the ghost of Jane Austen titters in embarassment……


So where is the peak of the Laffer Curve?

An interesting question and one to which we would like to know the answer.

What\’s the top rate we can charge the rich so as to maximise the income we get from charging the rich?

Looks like, for Germany, it\’s around 67%.

Hurrah! says Ritchie and assorted minions. Let\’s whack up the tax rates on the rich then!

Well, no actually, for two different reasons.

The first is that while we\’ve got a 50% top tax rate at present, we\’ve also a 13 or 14% NI rate on those top pay packets. This is the so-called \”employers\’ NI\”, true, but just about everyone, including Ritchie, agrees that the incidence of this tax is on the employee. So, using simple addition (I can\’t be bothered to work it out correctly) we\’re around and about that Laffer Curve peak as it is.

So, higher tax rates on the rich won\’t in fact get more money. And yes, the researchers do say that they think their finding applies to all rich countries, more or less -ish.

And there\’s a second and much more important reason. The model that was used to calculate this result:

The theoretical model used to determine the optimal asymptotic tax rate posits a closed economy without international migration of top earners. As suggested by Simula and Trannoy (2010) among others, taking potential losses of tax base due to migration into account can significantly reduce the level of the optimal top marginal tax rate.

They\’ve used a closed economy in their model. And, do note, we\’ve an open economy: anyone in the EU has an absolute and non-negotiable right to live and work and pay taxes anywhere they like in the EU. Discrimination on the grounds of national origin is verboeten.If someone buggers off to France, Germany, Estonia or wherever, we are not allowed to tax them as if they are still in the UK.

So we\’ve very much got an open economy. Which, as they say, can significantly lower that optimal (ie, Laffer Curve peak) top marginal tax rate.

Which means that, if our current top tax rate is around and about the Laffer Peak for a closed economy, and that peak is lower in an open economy, then our current top tax rate is above the peak for the open economy which we actually inhabit.

QED and lower taxes now please so as to increase revenue collected.

Interestingly, taking possible emigration into consideration, the empirical finding is that the French top marginal rate of 40% is *too high*.

Yes, we\’re well above the Laffer Peak. Lower taxes now please.

Art Uncut actually gets something right shocker!

Our concern is that when individuals and corporations \”shop around\” different countries for the best tax deal, this puts pressure on governments all round the world to lower their tax rates, which results in an ever-dwindling proportion of profits going to governments to spend on schools, hospitals and public services.

Yes, that is the point of tax competition.

Imagine that you couldn\’t bugger off and take the deal on offer elsewhere?

Imagine, for example, that there was only one baker in the country. It\’s bread on their terms or no bread at all. We all do understand that we\’d end up with expensive shitty bread in such a situation.

Or if there was only one employer in town, like say one of the old company towns. We know that the jobs on offer would be badly paid shitty ones or you get to starve.

There\’s even a word economists use to describe this situation: monopoly.

We know that monopolies give shit service at high prices. Why they do this is simply because they can.

And the same is true of governments: monopoly, the inability for people to fuck off elsewhere, means high prices and shite goods and services.

Tax competition, the ability of people and companies to choose among alternative deals is thus a good thing. Just as a multiplicity of bakers or of employers is a good thing.

Do note though, even while Art Uncut have managed to identify the point, they manage to get the meaning of what they\’ve identified completely wrong.

But then that\’s arts graduates for you, eh?

Johann Hari\’s defence doesn\’t work

Oh this is lovely. Johann Hari\’s defence doesn\’t actually work.

However, when interviewing someone, a journalist uses skill and labour in recording quotes accurately and selecting those most appropriate for publication. So the quotes in an interview are protected by copyright. If any are to be used by another publication then the fair dealing defence would have to be used and the copyright owner, possibly a competitor, would have to be credited.

So, let us review the situation.

1) Hari\’s found using things not actually said to him as part of his interviews.

2) Hari\’s defence (which isn\’t a bad one) is that he\’s providing an intellectual portrait. And to do this it\’s entirely just and righteous to use clips and quotes from earlier writings because, after all, writers do spend some time in their own writings making themselves clear. Speech is always more confusing than considered writings, after all.

3) Ah, but. Some of those clips and quotes come not from original writings by the interviewee, but from other interviews conducted by other journalists. In which case, those carefully considered quotes are copyright of those journalists, not the interviewee.

4) As copyright, there\’s still the fair use exemption. But the use of that requires acknowledgement of the source even if not a request for permission to use the quote.

5) Hari\’s fucked.

I will admit to not really caring very much about all of this. My objection to Hari is that he\’s simply ignorant about economics yet he insists on writing much about economics. Such as this.

Typical Guardian

In Greece last week, I met workers at the Piraeus port authority. They had already seen one of their terminals go to the Chinese and hundreds of staff lose their jobs. Now they worried about them coming for another bite – and more unemployment. Privatisation raised cash upfront, admitted port employee Anastasis Fzantzeskaki, but it also sacrificed income. And with it, the young lost the chance of a career. \”Our parents gave us a better society,\” she said. \”We\’re giving our children nothing.\”

A local trade unionist drove me to the crest of a hill overlooking the Chinese-run facility – lit-up, smart and bustling, it made a sharp contrast from the other industry nearby, which the government had run into decline. There, in Athens, were two models of capitalism side by side: one state-led, flush with hard currency and looking to invest; the other straining under the competition of the free market and now on the auction block.

Eh? What?

One part of the port is directly state owned. Greek Government, state owned.

The other part of the port is COSCO owned, a Chinese state owned company.

These don\’t sound like two different models of capitalism to me. They sound like the same model really.

But the one described as \”state-led\” is the one described as shiny, new and raring to go, the one that\’s a fuck up, even though state owned, is described as \”straining under the competition of the free market\”.

A tad of bias there in the descriptions, no?

Influential people predict the break up of the euro

Nouriel Roubini, Larry Elliott, George Soros, and…..Tim Worstall!

Tim Worstall, a fellow of the Adam Smith Institute, writing his column on Forbes says he has been predicting the euro\’s demise since before its creation.

He writes: \”As I\’ve been saying for years, the euro is bound to fall over, the euro will inevitably fail as a common currency, quite simply because it has been imposed on something which is not anywhere close to being an optimal currency area. You may try to ignore economics but that doesn\’t mean that economics is going to ignore you.\”

Clearly \”influential\” is more elastic in meaning than I had thought.

Polly\’s question we can answer

Why do the over-60s pay no national insurance, however much they earn? Abolishing that would bring in £3bn, and that is enough to repair the shaming state of care.

Because national insurance is just that, insurance.

Once you\’ve paid the premium you\’ve paid the premium.

If you want to abolish that link, then fine (as the new pension for everyone will do). At which point you stop having national insurance and simply fold it into income tax.

Why does Ellie Mae O\’Hagan insist on making us all poorer?

This is the important question suggested by this piece in the Guardian. By this rather confused young lady.

Now, Ellie worked as a hospital cleaner you see.

She now works as a temp in London.

Fine by me, I see nothing wrong with that. But Ellie herself ought to. For as she says:

Hospital cleaning is one of the most important jobs in the workforce – to the extent that the NEF estimates that cleaners generate £10 in social value for every £1 they are paid. Yet it is not cleaners who are offered handsome bonuses and enviable job security, but City bankers who, by the same token, destroy £7 of social value for every £1 of their income. A society with such topsy-turvy values might seem perverse but it is a natural consequence of capitalism: in a system where money talks, low earners are not only left penniless but voiceless.

Hospital cleaning is one of the most important jobs. The one which adds most to social value. And, from what is being said there, it\’s obvious that social value is what is important to Ellie.

So, she has left a job which produces the most social value possible to take one which produces lower social value.

Ellie has just made us all poorer when measured by that oh so important social value.

Which leads to: either Ellie herself is quite happy to destroy social value in order to better herself, in which case she is just like the bankers, or not even Ellie believes the nef\’s arguments about social value.

For if you did believe the nef then you most certainly wouldn\’t, for purely personal and private reasons, reduce the social value being created by your labours, would you?

Delightfully, this also applies to Andrew Simms, one who I think really would be adding to social value by cleaning hospitals rather than writing reports.