February 2017

Timmy recolonises Bangladesh

Bangladesh being the country of 700 rivers I asked to be taken to see a river. That’s dry season there, during the Monsoon the river rises a bit. A wee bit. Like to the level of the road and electricity poles a hundred yards behind me. The other bank of the river is some 300 yards to my front when in full spate. Err, the river in spate, not me.

No, Afghanistan’s mines are not worth £800 billion

The government appears powerless to take back the operation and officials admit that the Taliban have greater control than they do over Afghanistan’s mining industry and its mineral wealth, valued at more than £800 billion. In fact, mining has become the group’s second-biggest income source after the opium trade, while government revenues have dwindled.

Lapis, prized for its intense blue colour, has been mined in Afghanistan for 9,000 years.

Nato forces hoped that the country’s mineral wealth would underpin its recovery when they ended combat operations in 2014. However, riddled with corruption and damned by mismanagement, the mining industry has been reduced to a shambles as the state is fractured by the insurgency.

Sigh. That £800 billion comes from a Pentagon report (of $1 trillion). But that’s the value of the minerals after they have been dug up and sold. It does not include the costs of doing the digging up, it’s a gross revenue number, not a margin one.

The Taliban are mining lapis lazuli in northern Afghanistan, marble and coal in central, southern and western provinces, and gypsum, chrome ore and talc in the east. A report by the Global Witness NGO last year placed their earnings from lapis alone at £16 million a year.

Even that’s not right:

In 2014 the two mining areas of Deodarra and Kuran wa Munjan alone provided around $20m to armed groups, according to rough but conservative estimates – equivalent to the government’s declared revenue from the entire extractive sector in 2013. This includes about $18m to Commander Malek and informal armed groups linked to him, and more than $1m each to the Taliban and to armed groups mainly allegedly associated with Zulmai Mujadidi.
Armed groups made at least $12m from lapis in 2015, according to rough but credible estimates, with a government ban on the trade in early 2015 countered by massive smuggling through the Panjshir valley. The Taliban increased their share of this as their strength grew, to an estimated $4m. As of mid 2016, payments to the Taliban reportedly amount to at least 50% of the revenue from the mines.


Seems entirely fair to me

Paedophiles should not face jail for looking at pornographic images of children unless they are a physical threat to youngsters, says Britain’s most senior child protection officer.
Officers should instead focus on the most dangerous offenders who have access to youngsters or are directing abuse online, said chief constable Simon Bailey.

We should probably be producing digital porn for the paedos, giving it to them in fact.

For we know quite well that among adult heterosexuals access to porn reduces the rape rate. On the fairly simple grounds that the bloke who’s not had sex for so long he’s got sperm leaking out of his eyeballs is more likely to attack than someone who’s just wanked himself into a stupor.

And we don’t actually care what it is that people get off to. Makes no difference to us or society if someone deals with their stiffie with pictures of a Ferrari, Lola Ferrari or Lolita. Shrug.

What we do care about is that any physical activity with another takes place only with another consenting adult.

So, produce and distribute – digitally produced – kiddie porn and cut the rate of attacks.

Not that I expect this to be taken up such is the hysteria but it does actually make sense.

Idiot is idiot

So, the cure for QE is a permanent gilt. A Consol in other words, a couple of years after they were paid off.

Well done.

And those pointless arguments about QE having to be repaid would end: the QE debt could be held in perpetuity, neither redeemed or cancelled, but just sitting there like the double entry book-keeping which is all that it now really represents.


I had one of the boring ‘but QE will have to be repaid one day’ conversations that have been a part of my life for some time now towards the end of last week. The argument of those putting forward this idea is that it’s all well and good the Bank of England buying up government debt and holding it under the QE programme but one day (they say) the Bank will either have to sell it back into the market (the reason why they ‘have to’ is never specified, largely because it does not exist) or it will become impossible to roll the debt over one day at the same interest rate. This is another non-argument: if the Bank of England replaces one government bond with another for the sake of QE the rate does not matter: interest is not paid on QE debt. Let me however suggest a way in which this argument could be put to bed for good.

It would help if Spud actually understood the reason that the QE bonds do have to go back into said market at some point.


Money times velocity of circulation is equal to prices and quantities. PQ is also roughly equivalent to GDP. Money here is base money (it is V which multiplies it up to broad money, so, not quite but about, P is M0 and MV is M4). Please note these descriptions are wrong, inaccurate, but useful to explain what is going on.

The essential QE point is that V sank like a stone in the crisis. To avoid P doing so (deflation) or Q, or even PQ, a Depression, we needed to do something. So, increase the amount of M in order to keep PQ up and thus not see horrible fall in PQ. Again, not accurate, but useful enough.

M0 is notes and coins in circulation which is about £70 billion these days. QE money isn’t M0 but we can usefully, if inaccurately, think of it as being an addition to it. QE money is around £500 billion at present (or will be by the time the latest extension ends).

Some day, who knows when, V will return to something like normal. We’ll then have £570 billion of M0 as the M in our MV. That will lead to a considerable – to be mild about it – increase in P. Inflation that is.

Which is why QE has to be reversed. Because we must take that created base money out of the economy and destroy it. At some point. The alternative is a massive jolt of inflation. Not to reverse QE would be what Zimbabwe and Venezuela have both done, those terribly successful economies, the monetisation of government spending.

Which is why Ritchie’s magic money tree doesn’t exist. It can exist for a time, that time being when V is depressed. But we need to reverse it when V recovers.

We also know how it will be done when the time comes. As bonds mature currently the Bank buys more. At some point it will stop doing that and the Treasury will have to issue more bonds to the market to cover the repayments to the Bank. Yes, we do know this because the Fed has stated very clearly that that is the way they will do it.

Spud’s just getting this wrong.

Timmy elsewhere

The truth is that if the lycra-clad superjocks want to have a jamboree that’s their right and privilege, of course it is. But there’s absolutely no reason why we should pay for it – we being the taxpayers of whichever urb is mad enough to agree upon hosting.

The Olympics: Just Say No.

These people are insane

The living wage in Bangladesh is €260 a month apparently.

No, that’s at market exchange rates. A country where GDP per capita is around €1500 a year should be paying a low end worker €3,100 a year before overtime.

At PPP exchange rates they’re saying that somewhere at about $3,300 per capita GDP should be paying $8,700 a year.

They’re just fucking insane these Clean Clothes people.

Entry level garment maker should, before overtime, get 150% of the salary of a high school teacher in the private sector.


Anyone know the answer here?

How difficult is a gear system to make? No, not cars, bicycles?

Just a very simple 3 gear system to place upon a rickshaw. One thing I noted and did not understand – and despite explanations I still don’t get my head around – is that all of them were one gear only, direct drive I suppose. And it’s hellishly high physical effort that way.

Import duties mean that sending them in wouldn’t work (they’re insane, 300% and the like duties at times) but it’s a pretty simple technology isn’t it? They do, after all, already make the current chain, two umm, whatchamacallits front and back. A gear system is only making the same pieces but in different sizes and a system to switch between them.

Seriously, how tough is this? Labour’s damn near free, there’s a thriving set of workshops making the things in the first place. It’s almost doing the design work and then giving it out if not setting up a small shop to make them at local prices.

The thing that makes me think though is it’s such an obvious technological step. Thus the question isn’t whether it should be done but why hasn’t it already happened? Isn’t it worthwhile? Is it actually too expensive?

There’s a significant part of me thinking that some rich bloke with $50 k really should throw it at the problem. No, not to study it, to go and do it as an experiment. Design some, make some, start selling them (at those local prices, £5 tops for the system installed, £2 better). If it doesn’t work then it doesn’t work, we’ve learned something. If it does then great. There’re a lot more places where it would be of benefit too.

So, what is it that I am missing here? It must be something because I was only in country 48 hours and it puzzled me, better and more informed minds than mine must have pondered this before.

Honeybuns, there is something you can do

It is a societal moral code turned on its head. Stunned and baffled, I am also one of those who see the people sleeping on the streets and walks on thinking, hoping, that someone is looking after them. That is what our taxes are for, after all. And yet, deep down we all know the structures that once looked after our most vulnerable have buckled. Who, then, is responsible for them?

Sometimes it takes one person to make the difference. Paddy was that person for me. He and his scraggy, kind old dog Gerard were based every evening at Leicester Square tube (exit 1), and for the past two years we met every week on my way home from choir. They were a familiar sight to all the locals, and during our conversations people would stop to pass the time of day. Paddy loved the fact that I sing at St Martin-in-the-Fields, and like clockwork would brush off my concerns, instead asking with a twinkle in his eye: “But did you sing well tonight?”

When I learned of his death from his son, I realised I couldn’t keep walking by. Modern society let Paddy down, and he died of cold on the streets. His son Patrick, now an orphan, in some kind of ugly twist of tradition, has inherited his father’s pitch, his dog, his tent … his homelessness.

My fury seeped rapidly into hopelessness and helplessness. There are so many battles to fight right now. It’s hard to know what to do as a citizen that will make a difference. And yet, there are ways to help, and foremost is arming ourselves with information. We need to know what we can do, who we can turn to, what actually helps.

And we need to turn to each other. Which is how, with the help and support of friends, I was able to channel my grief into something positive: an event called Sod This (for a laugh)!, to raise awareness and a good bit of money for two charities working to combat rough sleeping.

That something being taking a rough sleeper into your home and setting them on the road to reintegration with society. Because with a home address then you can start to find work and that’s how the process works.

And before you ask yes, yes I have. As should you if this is indeed something that you care about.

So, get on with it woman, just get on with it.

The Curajus State in action!

Jolyon Maugham QC, a leading tax barrister, expressed alarm at the consequences of the changes: “I was told by a very senior Treasury source that the government wouldn’t have got the proposals across the floor of the house if they introduced them for the private sector too. This change is going to have the effect of driving up costs in the public sector.

“The area where this is going to have the starkest effect is the NHS. Many doctors and nurses are going to seek to work more in the private sector and that’s going to create a problem in the NHS, which as we know is already struggling to fill positions.”

Ooooh, it’s got Soapy Joe upset. Must be good, eh?

Alex Cobham of the Tax Justice Network said: “This looks like the worst kind of populism by government. It has been badly done and badly targeted. It is not likely to make the tax system fairer and may have adverse consequences. It seems misguided and it is difficult not to think it’s politically motivated.”

And Alex Cobham? Must be truly great.

The IR35 tax system, introduced in 1999, is to be changed to require public sector employers to subtract tax and national insurance contributions from agency workers’ pay packets at source rather than allowing these workers to calculate their own tax contributions.

The government says it has introduced these changes because it estimates that 90% of these agency workers are not paying enough tax, leading to a loss of £400m a year to the Treasury.

Won’t Spud be happy! Cracking down upon tax abuse!

And isn’t it fun when they find out where the incidence of national insurance is, upon the workers?

There’s a Paul Krugman line about Bangladesh

In a piece of his talking about how sweatshops ain’t great but they’re better than what poor places have to offer as an alternative Krugman says something like “even Bangladesh”. On the basis that 120 million people on the flood plains of the Himalayan rivers, with little other than the people and the flood plains, has always been one of those places where the development specialists and planners go “Well, what the fuck do we do here?”

Which rather speaks to this comment on the blog here:

I’ve become more optimistic since taking the time to read Tim’s Register and Forbes articles. I like that the world is getting richer. I didn’t realise how much and how quickly.

They’re having an industrial revolution, something that’s not pretty nor nice up close but it is happening. And like most other places that have had one they’re starting in textiles. Here it’s making up the garments, not the weaving or spinning. But that industry employs 4 million and produces 82% of exports.

It’s the old thing. The options are staring at the south end of a north moving water buffalo or the factory. And the water buffalo option produces an income (including domestic production of rice etc) of perhaps 2,000, maybe 3,000 takka a month. 20 to 30 quid. Rickshaw drivers get about the same. One thing I noted was that they’re direct drive, no gears on them. Asked around and gears are considered too expensive…..that’s a certain level of poverty, no? A short rickshaw ride is 10 takka. Got to do a lot of 10 p rides to make a living….

Minimum wage in the factories is 5,000 takka. Time and a half for overtime etc (not included in that number and min wage goes to the new entrants, no training etc). As ever in these sorts of industries the “names” pay better, offer free school for the kiddies, health care etc. The penumbra of subcontractors don’t. A typical career path is off the paddy into the subcontractor factory, a year or two later, with some experience and training under the belt, into one of the main contractors.

Yes, these are shitty wages and neither you nor I would want to try to live like that (note they’re at market exchange rates, not PPP, they understate the standard of living quite a bit, at UK prices think more like £150 a month). But the change wanted, the change desired, is happening.

I was talking to one of the industrialists, and at another time to an Oxford Prof who studies these things (household surveys on stress and mental health of those in and out of the industry for example, being in it raises stress for the worker, lowers it for the extended family…economic security is valuable it seems), and both said much the same thing. The biggest problem for the factories is access to labour. They’ve pretty much swept up that reserve army and are now, to their consternation, competing with each other for access to the desired labour.

As even Marx pointed out, that’s when wages start to rise, seriously and substantially.

The people who invited me out there are the mill owners. Not even Victorian yet, this is still a Georgian economy and some are taking the high road, some the low. Some are training and developing their staff, some are squeezing them. It ain’t, as at the top, pretty nor nice up close.

But the big question in development economics has been, over these past 5 or 6 decades, well, we think we know quite a lot about various places. But what the fuck do we do about Bangladesh? No, really, that’s been the general conclusion all along. And the answer seems to be, as it always has been everywhere, to have a free market driven industrial revolution.

And it is free market too. The creation myth of the industry is that back in 197x, a bloke (I was told his name, cannot recall it) corralled a few dozen sewing machines into a couple of apartments and started. Exports in year one were $20,000. He shipped a dozen likely lads off to Korea for 6 months training, the understanding being that they would then work for him for 5 years, a non-compete clause. None of them kept to that for even 12 months, having seen that this was a bit of alright this business. Absolutely no planning, no legislation, no government help, nowt. Just the lust for profits and market experimentation.

Exports will be $28 billion this year, there’s those 4 million in employment making that double the normal wage (a teacher in a government school might make 8,000 takka a month, with free accommodation, a high school teacher in the private sector would be thoroughly middle class on 15,000 takka. 5,000 takka plus overtime straight out of the fields doesn’t look so bad).

The great economic question in all of history is how do we move on from us all standing around in muddy fields. “So, Rasel, you know how this rice stuff works?” “Fucked if I know Faruqe.” “Mohan, Mohammad, know how we stop the buffalo eating the stuff? “Not a scoobie, sorry.” The answer being that all go off and work in factories.

And it’s happening. Even in that arse end of the development universe, Bangladesh. 5 and 6% GDP growth per year from a Stone Age starting point doesn’t sound like much but they’ve been doing that for two decades now. I spent 22 hours of yesterday traveling, I should be feeling like shit. I don’t think I’ve ever been quite this generally cheerful about the world. Sure, of course, I’ve been personally more excited (that realisation that the bird with the Big Tits is about to put out always generates a certain joy for example) but in that agape instead of eros sense I am indeed that cheerful.

We’d all like this to have happened 250 years ago, when it happened to our forefathers. But it’s true, the poor are getting rich. Life for great vast multitudes of people is getting better.

Time for the Happy Dance, no?

It’s only the dawn but there’s a certain bliss to being alive and knowing it is happening. Now what I’ve got to do is work out if there is some manner in which I can get involved, help prod it along. Probably not, for it has all happened without the intervention of the western upper middle classes in how it works. It’s been everyone else voting with their dollars, buying the stuff produced, which has made it work.

But bugger me, it is working. Ain’t that fucking grand?

This is interesting I thought and then I noticed

One in five species on Earth now faces extinction, and that will rise to 50% by the end of the century unless urgent action is taken. That is the stark view of the world’s leading biologists, ecologists and economists who will gather on Monday to determine the social and economic changes needed to save the planet’s biosphere.
“Rich western countries are now siphoning up the planet’s resources and destroying its ecosystems at an unprecedented rate,” said biologist Paul Ehrlich,

It’s obviously total bollocks therefore isn’t it?

“We want to build highways across the Serengeti to get more rare earth minerals for our cellphones.

Cellphones don’t particularly use rare earths, can’t think of any reason at all you’d buld a road across the Serengeti to get rare earths either.

Perhaps the distinguished professor and FRS means minor metals like tantalum which are used in cell phones but is just too ignorant to know the difference.

Not that that helps me with the Serengeti reference.

Sorry, but I hate john Naughton

Estimates for private per-capita consumption from 1760 to 1831, for example, suggest that it rose only by about 22%.

I don’t think that’s true, I think we’ve a terrible mismeasurement problem there. But let us assume that it is and we can see why I hate John Naughton.

Because he’s diving into the economics meets technology bit, that’s fine, I do it a lot myself. But without understanding the economics he’s talking about, not fine. It’s the only there that grates.

Leaving aside the aftermath of the Black Death, fairly special circumstances, that’s the fastest growth in personal consumption per capita up to that date.That 70 years is almost certainly more than it rose in the previous 2 centuries.

And that’s a hugely important economics point. In fact, it’s the one we want to explain. 10,000 years of agriculture and the only time living standards rose was when everyone else die. Then something else happens an we get, for the first time, substantial, sustained growth in the living standards of everyman.

It’s actually “the” economic question. What the fuck happened and how do we make sure it doesn’t stop?


This ain’t nothing new Honey

According to The Guardian, she told Australian Broadcasting Corporation she was questioned by border agents in a room full of people for two hours. She said that the experience left her so harrowed that she felt like she had been physically assaulted. She has even suggested that she might never return to the US after the incident.
“I have never in my life been spoken to with such insolence, treated with such disdain, with so many insults and with so much gratuitous impoliteness,” Fox was quoted as saying. “I felt like I had been physically assaulted which is why, when I got to my hotel room, I completely collapsed and sobbed like a baby, and I’m 70 years old.”
According to The Guardian, the author blamed US President’s proposed travel ban as the reason for the “aggressive questioning” by the border police. She said despite having travelled to America 116 times before without incident, she was questioned over her visa. She was eventually granted access.

Bugger all to do with Trump. US Border people at airports are the rudest most shitty people I’ve ever dealt with. No, really, I went in and out of Russia for years and the US is worse.