This is a very strange Brad Delong piece

BERKELEY – Neville Chamberlain is remembered today as the British prime minister who, as an avatar of appeasement of Nazi Germany in the late 1930’s, helped to usher Europe into World War II. But, earlier in that fateful decade, relatively soon after the start of the Great Depression, the British economy was rapidly returning to its previous level of output, thanks to Chancellor of the Exchequer Neville Chamberlain’s reliance on fiscal stimulus to restore the price level to its pre-depression trajectory.


Our Neville became Chancellor in 1931.

Whereupon he got us off the gold standard and cut government expenditure.

It was a couple of years later, when the currency devaluation thing had done its stuff that he started to expand spending again.

I\’ve not got the numbers for the deficit or national debt in those years. But the idea that Our Nev did \”fiscal expansion\” in 31, 32, seems very strange indeed. Anyone know?

In which we get fan mail from a Michael Barbazette

Which reads, in full:

dear tim,

your writing is terrible. please stop writing. do not reply.

best wishes,

I rather hope that it\’s not this Michael Barbazette:

Michael Barbazette

Primary/Secondary Education Professional

Greater Chicago Area
Primary/Secondary Education


SES Tutor at The Princeton Review
Tutor at UNO Charter School Network


DePaul University

For if it were he must have been emailing at 3, 4 am. When all good little education professionals should either be in bed or in charge of their capitals.

Polly can be ignorant at times

Start with taxing all incomes at the same rate – a worker on an average £26,000 is taxed £5,981, but someone earning the same in dividends pays zero. Those on the 50% tax band only pay 36% on their dividends.

Bleedin\’ \’ell Polly!

Don\’t you know that (in effect) basic rate income tax is collected on dividends by the company? The reason that no more basic rate is paid by the recipient is because we\’ve already used the company to collect it?

Err, no

Germany to set the terms for saving the euro


Germany\’s set the terms for what it thinks will save the euro, what it hopes will save the euro.

But whether it will save the euro isn\’t in Germany\’s, or any politicians\’, hands. It\’s all of us, in our interactions in hte markets, that will decide that.

And this is a bit of a death knell for that democracy thing, isn\’t it?

\”The debt brakes will be binding and valid forever,\” said Merkel.

\”Never will you be able to change them through a parliamentary majority.\”

I\’m not particularly enamoured of politicians borrowing and spending like drunken sailors. But the idea that a German politician can tell the Poles not to spend their children\’s inheritance does rather grate.

I think this might be enough, don\’t you?

Today the TaxPayers’ Alliance has released new research which shows that the average family pays £656,000 in taxes over their lifetime.

That tax payment is around and about equal to the amount which, if saved over the years, would put said household into the top 10% in terms of wealth (850k in net assets).

And while there are some things that must be collectively, tax funded, provided, there\’s an awful lot of things that government does currently collectively provide which wouldn\’t have to be so if we were all as rich as that.

Criminals really are stupid

A businessman accused of being the mastermind behind an alleged £100m \’Ponzi\’ scheme was warned he faced a jail sentence after admitting charges of fraud and deception.

OK, this was a big one but Ponzis are hardly unusual.

I\’ve been invited into one or two even in my very limited business life.

But here\’s the stupidity:

Pruthi is alleged to have creamed off £38m from the fund for his own use between 2005 and 2008 when he was running Business Consulting International.

If you\’re running a Ponzi you\’ve got to know that you are. Pulling £38 million out of £100 million isn\’t something you do by chance or happenstance. And that does seem to be evidence that he didn\’t fall into the trap (ie, promise great returns through real investment opportunities, fail to make them then turn to the fraud as the original Charles Ponzi did).

So, having snaffled that £38 million why was he hanging around? There are plenty of places in this world where you can disappear with such sums after all.

That\’s the bit I never get with these things. The stupidity of not realising when to cut and run.

Allow me to translate this for you

The Prime Minister added: \”In the spirit of this healthy competition with France… If France goes for a financial transactions tax, then the door will be open and we will be able to welcome many French banks to the United Kingdom and we\’ll expand our economy that way.\”

\”If France wants to be so mindbogglingly stupid about it then we\’ll take advantange of having a mark at the table, don\’t you worry.\”

Here\’s what the real problem is though. Are the French actually so mindbogglingly ignorant and stupid as to think that an FTT is a good idea? Or have they something up their sleeve?

It\’s possible that they do think it\’s a good idea: economics/finance has never been something that the Enarques quite get. They tend to see politics and the decisions of technocrats as somehow over ruling the movements of markets. Certainly they believe they should and they might even believe they do.

Or it could be that they know that an FTT is a bad idea, most especially one imposed in only one country inside a Single Market with the free movement of capital, companies and labour. But they\’ve got some ace up their sleeve: perhaps they\’ll use the movement of business resulting from the FTT as an argument for its extension?

Anyone any ideas?

Allow me to correct this for you

Scotty Bowers, now aged 88, is unveiling what he claims were the antics of the Hollywood elite including Cary Grant, Rock Hudson, Vivien Leigh, Katharine Hepburn and even the Duke and Duchess of Windsor.

He claims that he set up Hepburn with \”over 150 different women\” and other stories in his memoir relate to Spencer Tracy and Cole Porter.

In an interview with the New York Times, Mr Bowers said: \”I\’ve kept silent all these years because I didn\’t want to hurt any of these people. And I never saw the fascination. So they liked sex how they liked it. Who cares?

\”I finally said yes because I\’m not getting any younger and all of my famous tricks are dead by now. The truth can\’t hurt them anymore.\” They can\’t sue me for libel\”

Idiot fuckwit

A good price for EU carbon allowances on the trading market is required in order to boost investment in the low carbon economy.

No. Just no.

For investment in the low carbon economy is not in fact something we want. Sure, we want the result of a low carbon economy (OK, well, let\’s stick within the confines of the current policy argument at least), but we don\’t want investment in it. We\’d much prefer to get a low carbon economy with absolutely no investment at all. Heck, even get paid to be creating it as with, say, eliminating fossil fuel subsidies.

It could be true that we need to invest in a low carbon economy but if it is that\’s a cost to us of getting to our goal, a low carbon economy.

And the low price of carbon credits is not telling us that we\’re not going to get a low carbon economy. It\’s telling us that it\’s going to be heap to get one.

For we\’ve already limited emissions through the cap….and of course, Our Lords and Masters could not possibly have made a mistake on the level of said cap. So, having already capped emissions then price of the permits is telling us how expensive it is to meet that cap.

Or, if the price is low, that we don\’t need to invest very much because we\’re already meeting the cap without much investment.

These twats are getting confused about prices: yes, sure, they\’re incentives. But they are also information: here, the information being that we don\’t need to invest lots to meet the cap.

Ritchie on the law

All of which has always left me thinking that an essential component of a GAAR is a change to the basis on which tax law is interpreted from a legal (literal) basis to an equitable (common law) basis.

This is after he complains about the Duke of Westminster and Partington cases which are, as any fule kno, the application of the Common Law to tax legislation.


Mehdi Hassan does make me laugh

Third, poll after poll shows overwhelming public support for a tax on bankers\’ bonuses; a mansion tax on multimillion-pound properties; a windfall levy on the oil and utility companies; a Robin Hood tax on financial transactions; and a one-off wealth tax of 20% on the richest 10% of households (which would raise a whopping £800bn and, according to YouGov, is backed by three out of four voters).

Increasing taxes on the rich to help reduce the deficit isn\’t \”class warfare\”,

No, no Mehdi, that\’s not class warfare at all.

We know that the average wealth of the top 10% of households is £850,000. That\’s property, private pension plans, the lot. What you\’re in fact asking is that just about anyone with a decent house in the SE and a pension needs to stump up £170,000 in cash.

No, not class warfare at all that, nothing like it.

Ed Miliband lies through his teeth to the Scots

Ed Miliband will make the case for keeping Scotland as part of the United Kingdom in a speech in Glasgow on Monday.

Miliband is expected to describe the \”progressive\” argument for rejecting independence in what the party billed as a major speech on the constitution.

He\’s not listed there as telling them the truth. That there\’s almost no chance of Labour gaining power at Westminster for a generation or two without the rotten boroughs of the central belt in Scotland.

Then again, the argument that you shouldn\’t go so you can vote for me isn\’t all that strong: not from a Miliband.

We look forward to the Richard Murphy article on this outrageous piece of tax dodging

David Miliband:

Mr Miliband’s burgeoning post-ministerial income is siphoned into the company owned with his wife, called The Office Of David Miliband Limited.

Tsk, eh, tsk!

Financial analysts say the tactic is usually deployed to reduce a joint tax bill by taking income in the form of share dividends and exploiting both partners’ tax-free allowances.

Well, no, it\’s not really about personal allowances, not for a two professional family. It\’s about employers\’ national insurance.

If the money goes into a company, pays corporation tax, that c tax is imputed to the dividends and then income tax is topped up to higher rate then it\’s all much of a muchness for the total inome tax bill as against just declaring it as income in the first place.

However, take it as dividends and the employers\’ NI does not have to be paid, saving some 13 or 14%.

So we look forward to the Ritchie piece denouncing this egregious tax abuse. For that\’s how he so described these actions in a report for (I think) the TUC.

Of course, when Ritchie was earning well he used this dodge himself but now he\’s on a grant from the Rowntree folk he\’s pure and so above criticism.

But consistency does mean that he should condemn this behaviour, no? And so we wait…..

All Hail Loma Linda Town Council!

So, Loma Linda, place in California where the health nuts hang out. And half the city are 7 th day Adventists. And McDonalds whishes to p[ollute the heaqlthy air of this mostly vegetarian town with a store selling burgers and the like.

We know how this is going to turn out, don\’t we? The freedom of commerce is going to be crushed under the tanks of political power?

Amazingly, no:

Loma Linda had, until now, managed to avoid the global tentacles of the fast-food giant, primarily because of the number of Adventists. Despite this, the city council – all are Adventist – has voted three-to-two to allow the new drive-thru. Those in favour say that it isn’t the job of local officials to stop people if they choose to indulge.

Fancy that! You only get politicians who believe in freedom if they\’re religious nutters perhaps?

Ooooh, yes please!

France has added some more rocket fuel to Monday\’s already volatile summit of EU leaders by pledging to introduce a 0.1pc tax on financial transactions in August.

Oh to be a property agent in London these days. Brush up on the French lessons and wait for the stampede of Frogs into London to escape the tax.

Whatever financial markets are still in France won\’t be by Sept 1 (for of course the French won\’t do anything at all in the holiday month of August).

It is of course economic stupidity even if politically astute: but then that\’s Sarkozy all over, isn\’t it?

What a horrible statistic

An estimated 20 per cent of the British harvest is thrown away to comply with EU regulations.

Yes, I know the rules on weirdly shaped veggies were relaxed a few years bak. But that\’s an horrific number. And it stems from the way we allowed some anally retentive OCD types to gain power in the bureaucracy who were then able to foist their compusions upon the rest of us.

Apparently they\’re frit of curved cucumbers and straight bananas and so they must be made illegal.

At which point we\’re throwing away 20% of our harvest. If we didn\’t have to do that either we could be importing less food or moving the other way, farming 20% less land. More wildlife, less fossil fuels used.

The collecive costs to us of this are enormous. And all because some Belgian law scribbler was frightened by ugly vegetables under the bed when a child.

Stephen Hester: Tax dodging bastard

According to Ritchie\’s rules this should be counted as tax dodging, shouldn\’t it?

Taxman \’denied £500,000\’ as Stephen Hester waives £1m RBS bonus
Stephen Hester’s decision to waive his £1 million bonus will see the Treasury lose out on hundreds of thousands of pounds, estimates suggest.

A bonus to a senior banker is entirely normal practice.
They are diverging from that normal practice and as a result the Treasury is going to lose revenue.

This is, from the way he talks, tax doging. Should be banned eh, should be forced to take the bonus to that thte tax is paid.