September 2016

This is odd, yes

Police are having to “give tip-offs and notify gangsters who are fighting each other” rather than investigate crimes because of the Human Rights Act, a former justice minister has said.

Dominic Raab, who was in charge of human rights policy at the Ministry of Justice until the summer, said it was an example of “human rights being turned into an obligation”.

The warning letters – also known as Osman warnings – are issued by police if they become aware of a real and immediate threat to somebody’s life.

Police issue them when there is intelligence of a threat to someone’s life, but not enough evidence to justify the police arresting the possible offender.

“Dear One Ear,

Billy sez he’s gonna do you in.

yours, Plod”

Umm, sorry, but how did we get here?

Quite glorious

OK, so Deutsche Bank isn’t insolvent. But our man has a plan just in case.

So we’re back to the same scenario as 2008. Does Deutsche fail and drag all the other major banks with it (as it very easily could because no one will have a clue how its derivative counter-party risk is really spread)? Or is it bailed out and banking survives, again, unaltered at cost to all the rest of us? Or is something else needed?

The only viable option is the third of these, of course. So how is the risk managed?

First, note the following list of the world’s Top 50 banks (which because of the way US GAAP works will under value US banks):

There are more assets here to save Deutsche than anywhere else. And if it is not saved the value of every one of these banks will fall, in total by more than Deutsche could lose. So the solution to any crisis is, and can only be in the banking system.

Second, these banks may be nationally located but to pretend that any is the concern of any one state is absurd: the banking system is now internationally integrated. In that case the the solution has to be international: to pretend that Deutsche is a German problem is just wrong.

Third, there is then a need for international cooperation. There are, I think ways to achieve this.

One is for international agencies (the IMF and World Bank) to step in to provide the necessary credit to keep Deutsche afloat to manage its commitments in an organised fashion.

Next is for this to be done in association with the Bank for International Settlements, which could manage the technicalities of such an arrangement.

And last is the need for international cooperation to recover the cost of such short term action from other banks through levies, charges and taxes that ensure that the collective cost of saving the system of which they are all a part falls on them alone and not the rest of society. I think the OECD could have a role here, potentially.

The stages are successive: in other words the day has to be saved first, then managed, and then costs have to be recovered. I do not believe it beyond the wit of people to achieve this goal. I may be an optimist, but I think most things plausible with political will. And I think the solution workable, albeit it will then demand real change from banks. The over-leverage in which they all indulge will have to end: there is no way round that.

I can stand accused of being simplistic. In the face of a crisis simple plans are often the best: everyone then knows what is required of them. We may be facing something bigger than a crisis. In that case ‘the simpler, the better’ may be an appropriate comment.

Deutsche Bank has a central banker. One that can provide unlimited liquidity. The Bundesbank, backed by the ECB. Given that unlimited liquidity is what is needed in the case of a bank failure this is a good idea. But our Boy’s plan?

The IMF and World Bank? Neither of which have unlimited liquidity nor actually the legal ability to intervene? Backed up by the OECD? The OECD? A research group, that’s what they actually are?

Seriously, the Boy is going to design an entire new international bank rescue system as the howling mobs surround the branches demanding their money back?

God’s Preserve Us.

” I may be an optimist, but I think most things plausible with political will.”

Isn’t that a delightfully Fascist statement.

It would be most amusing to see Dan Davies comment upon this idea. If we could stop him laughing for long enough to do so.

Ritchie never spoke truer words

In that case an interim solution is needed, and I suggest that an Alternative Minimum Corporation Tax (“AMCT“) fits the bill.

Well, that’s not true, no. But this is:

Good tax systems cannot be built on the basis of fairy tales.

Quite so, quite so. And the fairy tale Ritchie has fallen for is that it is the corporation that is actually being taxed. Rather than some combination of the investors and the workers. Corporations are just convenient places to get tax money from, not the place of the economic incidence.

Thus an insistence that we must tax a company is building a tax system upon a fairy tale. And we’re not going to get a good tax system that way, are we?

Odd statement really

Richard Murphy says:
September 29 2016 at 3:36 am
I have a feeling you may need to enhance your understanding: if there is a prospect of perpetual deficit then cash in the bank merely delays default but means continuing is reckless because of the indifference it would show to long term liabilities – and Jersey has ample of them

Jersey is going bust because of a deficit they never close.

The UK should run a permanent deficit because a surplus would be a near criminal idea.

Amazing how the same ideas can repose in the same brain really.

Offers it is possible to refuse

Dear Mr Worstall,

We are organising a conference which will bring thousands of people, on their expense accounts, to an “industry meeting” where they will pay $1,000 and up to us plus hotel bills to then be allowed to get pissed away from their wives. And, you know, sample the convention flesh.

We’d like you to be one of the speakers.

You’ll have to pay your own travel and hotel bill, meals and so on. Because it’s an honour that we allow you to speak at our conference.

Can we book you in?

And no, really, they’re serious.

So, the new definition of tax avoidance

An arrangement that is intended to reduce or eliminate a liability to one or more taxes in a way that could not have been anticipated by any reasonable legislator and whether or not the law in question specifically relates to tax or not

Super, so paying a 20% margin to your Swiss coffee broker is not avoidance as the law actually insists that you must pay a margin, as if with a third party. Paying royalties is not avoidance as other parts of tax law specifically ban the taxation of the payment of such royalties. Clear evidence that the legislators knew this would happen and approved.

And so on and on. Selling from Ireland into England is not avoidance-it’s clearly laid out in law that yu may and it’s also clearly laid out that they expect people to do this.

Quite simply, Ritchie’s definition of avoidance doesn’t include all the things he calls avoidance.

How does this work?

Ritchie notes an article:

Japan’s Wages Too Low and Corporate Cash Hoard Too High: IMF

His answer:

So the answer is, increase wages and reduce cash piles.

Which means higher corporation taxes on large businesses should be on the international agenda, but they’re not.

Why not?

How does higher corporation tax increase wages?

In fact, given the incidence of the corporate tax, it will reduce wages across the economy…..

PJ O’Rourke’s dictum on winning in politics

No, not advice about how to win in politics, rather, how to know that you are winning.


If all the cute birds are turning up on your side of the demo then you’re winning. Women love winners, that alpha male thing and this extends to movements and causes.

Jeremy Corbyn is winning in British politics. Discuss

Seems entirely fair

Brexit negotiations could cost taxpayer tens of millions of pounds, says report

Spend tens of millions now, once, to avoid tens of billions a year off into the indefinite future.

Don’t we call this investment? Tens of millions on vaccines in order to avoid the cost of the mass deaths of the newborn? Spend now on killing rats in order to avoid the plague in the future perhaps being more apposite in this case?

Uhnh Huhn

The Labour leader then provided his strongest response yet on the issue of antisemitism, describing it as “evil” and as having led to the worst crimes of the 20th century. “This party always has and always will fight against prejudice and hatred of Jewish people with every breath in its body,” he said.

So much for truth telling in politics

Murderous bastards, us

Humans are predisposed to murder each other, new research suggests, although it remains unclear if it’s down to genetics or other factors.

Researchers from Spain have found that a tendency to bump off members of the same species is particularly common among primates, and have estimated that around 2% of human deaths at the origin of our species were down to such lethal spats.

Myself I think it’s rather higher than that but that’s from those studies of Yanamamo and so on. But what I love is the bloke claiming to show that it’s all wrong:

But Douglas Fry of the University of Alabama at Birmingham in the US, disagreed, saying that: “Gómez and colleagues demonstrate that recent assertions by Steven Pinker and others that violent death in the Paleolithic was shockingly high are greatly exaggerated. To the contrary, the findings show that social organization is critically important in affecting human violence.”

Gómez says the research highlights the control humans have over their situation in life and death. “The main message of our study is that no matter how violent or pacific we were in the origin, we can modulate the level of interpersonal violence by changing our social environment,”he said. “We can build a more pacific society if we wish.”

No one disagrees that we can build a more pacific society. Steven Pinker is insistent that we have in fact built one. Rather, the finding is about how we do so. And returning to that Edenic hunter gatherer fantasy so beloved of the extreme environmentalists would lead to a more violent one… fact, if we were being cheeky, we would start insisting that the consumerist frenzy capitalism makes possible through the system’s efficiency makes for a more pacific society.

Much sniggering but is it fair?

So South Australia, the whole state, without power as a result of a storm.

The federal energy minister, Josh Frydenberg, has questioned whether South Australia was too reliant on renewable energy as the state’s premier, Jay Weatherill, said no system could have coped with the major storm and cyclonic winds that lashed the state, which led to lightning strikes hitting generators, causing a surge and overloading the network’s capacity.

Obviously neither solar nor birdchoppers worked in the middle of a storm.

But was that actually the cause? At least on report states that it was lightning strikes at multiple points along the grid, tripping the whole thing into shutdown. Which isn’t, so far as I understand these things (rather little, obviously) anything to do with how the electrons are loaded into the system.

So, who wants to tell us the truth here?

Interesting language

Sure, there are different styles of parenting:

Paddy Ashdown had admitted he was a bad “Victorian” father and said his family would have suffered if his wife hadn’t carried the burden while he tried to win his seat.

But doing it as billions of people have done it for tens of thousands of years is “bad” now is it?

Yes Polly, it does

What hope for a party that threatens to be irrelevant for years to come? The best of Labour is in power, in the cities as leaders and mayors, competent and imaginative in struggling with monstrous cuts – from London’s Sadiq Khan to Nick Forbes in Newcastle. Otherwise it’s a matter of waiting until enough party members come to terms with grim electoral reality and decide to compromise with the voters. Does that really need a devastating election defeat?

Two or three actually. Because they are actually deluded.

This must be one of Chakrabortty’s

The lad never really did get the hang of economics:

A low wage economy comes with a heavy price tag. It is not only that employers have no incentive to invest in training or upgrading skills for their employees, or buying new equipment for their factories when they can increase productivity by hiring more cheap workers;

Buying new equipment replaces workers. This is exactly how the minimum wage reduces employment.


This story is wrong, anyone got the right reference?

Considering these undisputed facts, how should we think about the issue of reparations? My own view of the subject was rather tersely expressed by Muhammad Ali. After defeating George Foreman for the heavyweight title in Zaire, Muhammad Ali returned to the United States where he was asked by a reporter, “Champ, what did you think of Africa?” Ali replied, “Thank God my granddaddy got on that boat.”

It wasn’t Ali.

It was around and about that time but it was a black bloke working for, I think, ABC. Certainly, it was a reporter. He’d seen the bodies washing over some waterfall as a result of some internecine massacre or other.

Anyone got a link to the proper story?

HMRC hates Ritchie

Just three employers have been prosecuted for paying workers below the minimum wage despite HM Revenue and Customs finding 700 who have broken the law in the past two and a half years.

Because two of the three were recipients of his Fair Tax Mark, weren’t they? 10% of his entire stock in fact?

HMRC must hate him. Can’t think of any other reason for such a strike rate.