Awww
Having briefed Today they asked me to do the programme at 8.35am today. I agreed.
And then a while later they rang to say they’d changed their minds. I presumed the story had been dropped, but no, they said they’d found someone else to comment.
Usual stuff: let\’s not have growth, eh? Be all cuddly and nice to fluffy kittens instead.
And it is the usual stuff: they have no clue at all on what they\’re talking about As I commented there:.
\”Our main indicator of progress, GDP, is a measure of economic activity—of money changing hands.\”
No, it isn\’t. It\’s the value of all final goods and services produced at market prices.
For example, $1.5 trillion changes hands every day in the London foreign exchange market. This does not count as part of GDP: obviously not, for UK GDP is only £1.5 trillion for the whole year.
What is part of GDP is the commissions that the brokers charge for the money changing hands. A very much smaller number of course.
GDP simply is not a measure of money changing hands.
\”Perhaps the biggest fear that most people have when they hear \”no growth\” is \”no jobs\”, but the evidence for a relationship between economic growth and job creation is much weaker than you would expect and varies remarkably between countries. In the US, for example, a 3% increase in GDP tends to be accompanied by a 1% fall in unemployment. In France, the same amount of GDP growth reduces unemployment by only half a percent. In Japan, there is no relationship whatsoever. Clearly it is possible to break the connection between economic growth and unemployment; we just need the right economic policies.\”
That\’s a remarkably stupid comment. Without economic growth there would be ever rising unemployment. For labour productivity increases as technology advances. Average rate is 1 to 2% a year. Thus, for a static output we require 1-2% less labour each and every year. If you hold output static then there will be increasing unemployment.
Unless you\’re suggesting that no one ever be allowed to invent anything again?
You\’ve not even understood what steady state means. It doesn\’t mean static output. It means static *inputs*. So we don\’t go off and rape Gaia for ever more stuff to process: and thus the only economic growth we have is that 1-2% that comes from technological advance allowing us to create more value from our static inputs.
It\’s not a good start to a \”new economics\” if you don\’t understand the very basics of that new economics you\’re intending to write about.
Why do people do this? Even I, as the pig running capitalst neoliberal dog that I am, could write a better guide to green economics than this tosh.
But the company denied that the use of its Maltese financing subsidiary, Scaris Ltd, was designed to avoid paying tax in Britain and was just a way of borrowing cash to fund British investment \”more efficiently.\”
Paul Massara, chief executive of npower, said: \”The use of Malta in making payments on our financing made no difference to our UK tax contributions. Npower has not, and will not, engage in tax avoidance. Our corporation tax bill was low between 2009 and 2011 because we made losses in our retail business and invested billions into the UK.\”
But Richard Murphy, an accountant who runs a consultancy called Tax Research, said it remained unclear why RWE, npower\’s parent company, would lend money to its UK business via Malta \”unless tax avoidance was its motive. The tax saving that results is very clear.\”
Note the careful clarity of the nPower statement. Whether they borrow the money through Malta, Germany, or indeed from a British bank, makes absolutely no difference to their tax payable in the UK. It\’s therefore very difficult indeed to claim that this is tax avoidance in the UK.
Won\’t stop Ms. Hodge (actually, Lady Hodge, the tax avoider) from climbing aboard her soapbox of course.
It\’s almost unbearable to wake up to a world in which the welfare state that has defended us from the worst excesses of the market is being destroyed. The only way to hold on to the last vestiges of entitlement, and even reverse defeats, is to fight like hell.
Bereaved but determined families pursuing those who neglected vulnerable patients in Staffordshire had to do a massive piece of organising before the deaths of hundreds were looked into. (Other suspect hospitals are emerging.)
Your first example of the worst excesses of the market is the behaviour of an uncaring state bureaucracy?
No, really, this is gaga.
Canada reduces boozing by having higher taxes. Therefore we should adopt minimum unit pricing, the system that does not involve higher taxation. These cunts have flipped, haven\’t they?
My comment left at The Guardian:
Dear God this article is bad. So howlingly bad that I\’m not sure whether the author even understands how appallingly bad it is.
Do higher booze prices lead to less boozing? Yes, obviously: demand curves slope downwards. There can be a turning point when something becomes so expensive that everyone goes off and gets the illegal stuff, brewing hooch or whatever, but in general higher prices will lead to lower consumption.
This is just straight Econ 101.
Excellent. So, there are, conceptually, two (at least two) ways that we can make the price of booze higher.
1) We can increase the amount the State takes out of a drink. We could use tax, we could use a distribution monopoly that makes a profit. But the point is that the government, (the state, State, Province, call it what you will) gets a larger chunk of the cash. This both pushes up the prices and increases revenue: that second means that we can decrease the revenue collected from other things. Excellent.
2) We can insist on legislating minimum prices. In this case the price goes up, yes. But the state doesn\’t get any of the extra revenue. That goes to the manufacturers, retailers. Because they must sell it at this minimum price: therefore no competition to reduce prices to attract custom. Thus, minimum pricing, does indeed increase prices (and reduce consumption) but not to the benefit of the state, nor to the reduction of other taxes. But to the benefit of the private sector manufacturers and retailers.
And here\’s where this article (and presumably the report) goes completely gaga. Proof of our Econ 101 concept, that higher prices reduce demand and consumption, is not proof that option 2 is better than option 1. But that is how it is being used: we are being told that higher taxation of booze proves that we should adopt the insane Scottish idea of not having higher taxation on booze.
Professors Stockwell and Thomas gain a F for this paper. Seriously, this logic is just insane. You\’d be marked down in a GCSE paper for even thinking about using such nonsense.
As I say, the cunts have flipped, haven\’t they?
Ukip\’s proposal to raise the starting point of income tax above the minimum wage looks like a vote-winner this week, whatever you think of politics and politicians.
And it started with this little neoliberal pig running dog capitalist. Yes, with your host.
And voices tell me (no, not the ones in my head) that it will also feature in the Lib Dem manifesto at the next GE.
Who knows, we might even get this obviously sensible idea into law at some point.
So both of our stalwarts are reporting on very much the same thing. The way in which GDP measurements are to be changed.
Ms. Moore reports in The Guardian about how the BEA is going to change the way that R&D and certain intellectual properties are recorded in the national accounts. Here.
The new ingredients include Hollywood royalties from TV, movies and songs – some Tinseltown magic, really – as well as revenues from scientific research and development. Like a feelgood movie, this will make us feel positive, briefly – boosting our GDP by as much as 3% from its currently anemic level of 0.4%.
…
For one, it will be harder for us to know when we\’re in a recession. Right now, a recession means several quarters of negative GDP. Getting to negative from where we are now isn\’t hard; getting there when we\’re 3% higher will be. While it may seem useful to avoid recession right now, that is actually a bad thing: it means that in periods when we do get negative GDP, we\’ll be in truly terrible shape.
…
Hollywood royalties, for instance, are not secure measures of investment.
It is, as I\’ve noted before, the most ghastly piece of codswallop. The woman simply doesn\’t have the first clue on the subject under discussion.
Jeremy Warner reports on the ONS making very much the same adjustments. For this is how it works: GDP ain\’t perfect by any means but it is being continually refined. As as national statisticians agree on a refinement they tend to all roll it out at roughly the same time.
But even if this doesn\’t occur in the months ahead, it will very likely happen in 2014, when the Office for National Statistics is due to change the way in which it calculates the national accounts to take account of investment in research and development and certain intangibles such as intellectual property.
As it happens, R and D is one of the few things that grew right through the original Great Recession. Investment in software fell initially, but has subsequently risen quite strongly, while R and D never fell at all. In nominal terms, both are now some 10 per cent higher than pre-crisis levels. It\’s tangible investment in bricks and mortor, plant and machinery which has taken the real pounding.
The net addition to GDP from including these elements is not going to be huge, but it will be significant. A recent paper by Peter Goodridge, Jonathan Haskel and Gavin Wallis of Imperial College Business School and University College London calculated that growth GDP is being understated by possibly as much as 0.5 per cent per annum as a result of these omissions. Of course, a shift in the level of GDP does not of itself affect growth, but given that these previously unrecorded elements of economic activity are growing faster than the rest, then there is bound to be some positive impact. In any case, these findings also help explain the so-called \”productivity puzzle\”, or why the labour market has remained relatively resilient despite an apparently stagnating economy. Factor in intangible investment, and in fact there has been no fall in labour productivity over the past two years.
So, which reporter gives you a better view of what is happening? Which would you trust to report on other matters economic? Which has a clue?