Today’s menu includes half-baked Spud

Looking at context first, with regard to wealth the impact of inflation is unusually predictable. Inflation erodes the sum a debtor owes to the person who has lent to them. Deflation increases the sum owed to a lender. In quite straightforward terms inflation reduces the financial wealth of those who own debt and increases the net financial worth of those who owe money. Since the owners of debt are, by definition, wealthy it is very easy to see why inflation has come to be seen as the curse that it is usually represented to be. Low inflation preserves financial wealth so low inflation is good is the logic,

Thus Spud argues for higher inflation.

Spud also argues that we should all be saving for our pensions using bonds.


The second is that inflation is woefully inadequately measured because it ignores asset price changes and so, by implication, one of the biggest costs of living in the form of house prices.

Sigh, RPI includes cost of housing, CPI does not.

This contrasts with controllable inflation arising from situations capable of being influenced by the government of the state whose currency is inflating. These might be wage inflation; excess demand in the economy or a shortage of taxation to counter the level of government spending

Amazingly, the thought of reducing the government spending does not occur to him….

Excess demand is an absolute and a relative term: absolutely it indicates an unjustified exuberance beyond the capacity of the economy to meet demand. Relatively it is an exuberance of demand relative to the capacity of people in the economy to pay. The responses are quite different. The first needs interest rate rises; the second pay rises.

That’s a Nobel winning insight. Excess demand comes from low wages.

As for inflation due to insufficient taxation, we have seen the exact opposite for a long time: the inflation rate has suggested over taxation.

Says the man who wants to increase taxation by reducing the tax gap. As the Spuddie argued only yesterday:

I well remember Jacob Rees Mogg arguing against Michael Meacher in the House of Commons on one of the Private Member’s Bills I wrote for Michael. The aim of the Bill was to tackle tax evasion, which is money that is already due to HMRC. Rees Mogg’s argument against the bill was that it would result in more tax being paid and that was undesirable as a matter of absolute fact, so it must be opposed. I was shocked but in a moment realised the true agenda.

Yep, there it is:

It is my suggestion that this is where the UK finds itself now. It is true that there is too much debt, but to control that with interest rate increases will exacerbate the true crisis, which is a shortage of labour income within the economy as a whole.

It is also true that most of the current inflation is uncontrollable, unless Brexit us cancelled and OPEC respond by increasing oil supply, both of which are incredibly unlikely.

In that case, let’s be clear; the UK does not need an interest rate rise now. But labour markets are in need of fundamental reform to support and improve long term lay rates, and there is no sign of that happening. That’s the big issue around inflation that needs addressing. And there is no one to address it. And that may be the biggest failure in UK political economy right now.

We should reduce inflation by increasing pay for everyone. Truly a Nobel winning idea.

Isn’t this interesting

Renault diesel cars emit the highest levels of toxic nitrogen oxides of all the big manufacturers and the French company’s recent models produce nine times the legal limit, tests have found.

Volkswagen, which has paid £15 billion to settle cases in the US over cheating emissions tests, now produces the least-polluting cars, according to Which?, the consumer group.

Jeep, Nissan, Hyundai and Ford scored badly in the Which? tests, producing at least five times the limit.

As engineers the world over have been saying, absolutely everyone has been lying. Because the basics of diesel technology are that you can’t reduce both CO2 and NOX in a cheap diesel engine. Only an expensive one.

Well done to the planners there.

In praise of East European girlfriends

So, Italian TV show offers this list:

‘1. They are all mums, but after giving birth they regain their figure
2. They are always sexy. No tracksuits or pyjamas
3. They forgive cheating
4. They are willing to let their man rule
5. They are perfect housewives. They learn all house works at young age
6. They don’t whine or get clingy, and they never hold a grudge.’

The show was thus cancelled.

Sure, Patriarchy Rulz and all that. But might not young western European women take it to be a little bit of advice into what the blokes in their lives might actually want? Sure, they’re not going to get it (the list isn’t true, obviously) but understanding the aspirations might help, nu?

From sodding scientists in a peer bloody reviewed paper in Nature for the Lord’s Sake

Our analysis also reveals that the incentives for investment in exploration
are not always aligned with societal needs and constraints. The market
determines investment based on short-term returns rather than long-term
scarcity planning.


The mining, resource extraction, industries have the longest planning horizons of any organisation upon the planet. You start drilling holes in the ground now to check something out and you’re thinking about what’ll be happening 50 years into the future as you do so. Absolutely no one plans like this other than this industry. Governments certainly don’t….

Ah, yes, they are being as stupid as I thought they were going to be:

However, none of the current international
agencies has a mandate to plan, oversee or realize efficient and
effective exploitation of mineral resources. Even though there is considerable
fatigue with too many international treaties, as noted by major
resource powers such as China37, we propose that a linkage between the
International Resource Panel (Box 1) and the Intergovernmental Forum
on Mining, Minerals, Metals and Sustainable Development could use
existing treaty mechanisms for more effective resource planning. The
recently established United Nations Environment Assembly38 could play a
convening role to help ensure that ecological constraints are duly incorporated
into effective planning.

We’re going to put the UN in charge of mineral extraction to make it more efficient. Err, yes, that’ll work, won’t it?

2. Monitor impacts of mineral production and consumption. There is an
urgent need to establish a system for tracking mineral use along the entire
value chain, from source to end of life, perhaps based on the ‘fingerprinting’
developed by the German Geological Survey for tantalum39,40

Idiots, damn fool idiots. Yes, I do know those German guys and bloody good work they’ve done too. But their tracking only lasts until you first refine the metal. It’s absolutely useless, cannot in any manner work at all, after that first refining.

Such a system could also incorporate a global chain-of-custody programme,
similar to that of the food industry. Furthermore, there is a
need to promote domestic production and consumer cognizance of
mineral use, incorporating a notion of ‘metal miles’; that is, reduction
of the environmental cost of transport through increased consumption
of local products.

We’re going to have a global plan for minerals extraction so as to make sure that it’s all efficient. So that people then use only local minerals for local people? These folks are insane.

And they’re fools too:

Extraction processes should
be improved. Typical copper grades are less than 1% of the total mass and
the recovery rate of this small amount should be optimized.

Yep, every miner right around the world is just copacetic about his extraction rates. No one ever works to try to improve the percentage of the valuable stuff he extracts. The entire industry just ignores the most obvious method of profit enhancement. Yup, really, they do. They spend fortunes digging vast holes in the ground, erecting huge factories to process the dirt, and they don’t pay any attention at all to how efficiently they extract the gold from the dirt.

But putting the UN in charge would change all of that, wouldn’t it?

How do these people remember how to breathe?

In addition,
all valuable metals contained in the ore should be recovered rather than
ending up in the tailings dam (for example, indium or germanium in zinc
ores, or gallium in bauxite).

Absurdly twattish. Gallium from bauxite for example. Yep, it’s there. And the world uses perhaps 400 tonnes a year of Ga, about half from scrap (mostly process scrap) recycling. So, maybe 200 tonnes of virgin material (old numbers but still useful). There’s a few thousand tonnes of Ga in the bauxite processed each year. If we start to dump thousands of tonnes into a market that demands hundreds of tonnes what does that do to the price? Yep, it falls. Almost certainly to below the price of extracting the Ga from bauxite.

The reason we don’t do this therefore is that it’s not a valuable material, all that Ga in bauxite.

We recognize that in many cases commodity pricing signals run
contrary to ecological goals. Regulatory mechanisms would be needed
for companies to focus on longer-term resource conservation planning.

Facepalm. Let’s abolish the price system. That always works well.

coordination is needed to ensure that minerals are produced in the most
ecologically and economically efficient way

By abolishing the price system?

Ultimately, international legal mechanisms
may be needed to anticipate and respond to future mineral availability


The robots are coming

Or not, as the case may be, to the sex industry:

EUROPE’S first sex robot brothel has been forced to move after real-life prostitutes complained sex dolls were stealing their trade.

Someone’s been reading a bit too much Jessica or Amanduh:

Janet, a prostitute with over 30 years in the industry, who works in the city’s Raval district said: “It is another strategy of the patriarchy that presents us as objects without rights or soul. A privilege of the wealthy classes.”


Democracy is that the people get what the people want, isn’t it?

Many Britons are taking an ambitious approach to the sort of Brexit they want, with significant majorities seeking both a tough approach to EU migration and continued free trade with Europe, a study has found.

The research from the National Centre for Social Research (NatCen) said more than two-thirds of participants overall wanted to see arrivals from the EU treated under the same rules as people coming from non-EU nations.

However, it discovered (pdf), 88% of people also wanted free trade with the EU post-Brexit, while more than 60% supported the continuation of passporting for banks, allowing barrier-free financial transactions and transfers.

Why shouldn’t the people get it, good and hard?

Or, as it turns out, the British people seem to want that free trade area they were told they were going to get and not the European nation that the federasts want.

This will be interesting

Britain will be threatened with court action by the EU if it tries to walk away without paying a £50 billion “divorce bill”, leaked papers reveal.

A draft copy of the EU’s negotiating strategy for the forthcoming Brexit talks discusses taking Britain to the International Court of Justice in The Hague.

It quotes an official as saying that if Britain refuses to pay, “in that case it is, see you in The Hague!”

Because courts go by what is in he law, not what is in the politics.

The worst result that could possibly happen is that we have to pay what we actually do have to pay. And you do have to wonder about the EU. How is that a threat?

Soapy Joe And Spud, my how we are enriched

And now Jolyon Maugham is bringing a case against Uber demanding a VAT receipt for a journey he made in a car provided by that company. He knows, of course, that he won’t get one. Uber claims it does not provide taxi services, saying its drivers do that and it is a mere booking agency. But that claim is inconsistent with the facts, which have been upheld because Uber drivers have been found to be employees in a tribunal hearing.

No, they haven’t, they’ve been found to be workers.


Must be a whiff of something in the air

Murphy is making his usual two mistakes, of not understanding the economics nor the logic.

On the economics he’s missed that GDP, and thus the size of the economy, is production, or consumption, or income. Each of which will be, by definition, equal (absent people lying about tax of course).We thus don’t need the exact and precise details that he’s mumbling about because we can estimate from a combination of the different methods. As the ONS actually does to reach those GVA (GVA is roughly equivalent for GDP for a sub-national area) numbers at the three NUTS levels.

He’s also wrong in logic of course. He’s the proponent of the Courageous State idea, which is that the government should take a much more heavy handed approach to the management of the economy. Lots of lovely planning and firm state action. And yet here he is insisting that the government really has no clue, not a scoobie, about the state of the economy at anything less than UK level. Something which would make that detailed planning a tad difficult one would think. But then the internal contradictions of his own arguments are not really something that trouble Professor Murphy. Perhaps there’s a whiff of ermine in the air?

Well done Spud, well done

It’s not by chance that the UK is the centre of corporate fraud: ministers chose to make it that way


The Guardian has today reported massive money laundering through UK banks: some $740 million is alleged to have be n illicitly laundered in the UK.

From the Guardian:

Documents seen by the Guardian show that at least $20bn appears to have been moved out of Russia during a four-year period between 2010 and 2014. The true figure could be $80bn, detectives believe.

Being between 4% and 1% of the activity makes you the centre, does it?

Fake news spotted

As an economist,

Professor Richard Murphy

As an economist, I’ll tell you that to assess Scotland’s economy you need to know about how much people have to spend in the country, how much is invested in Scotland, how much the Scottish Government spends, what the country’s exports and imports are, how much is saved, and the total tax paid in Scotland.

Note that’s seven separate bits of data. And we only have reliable figures on some of what the government spends. As for the rest, Revenue Scotland is still struggling to work out which people are tax resident in Scotland and it has no clue at all on what corporation tax, VAT or other taxes are due, precisely because no-one has to declare those taxes separately for Scotland. It’s the same with imports and exports: no-one knows what these are because there are no border posts at Carlisle, Berwick-on-Tweed or Stranraer. On investment and savings, we’re equally clueless.

The message then is a simple one: when people say Scotland is in financial trouble, or running a deficit, or anything else, ask them how they know. If they say it’s the GERS (Government Expenditure and Revenue Scotland) report, tell them to read the home page for that report where it is quite candid about the fact that the data in it is estimated.

Sigh. We can and do measure GVA to NUTS1 regions. Even to NUTS2 ones. We even look at income to NUTS3 regions. And, of course, income, production and consumption all equal each other.

An economist would know this.

To be blunt, Westminster is saying as loudly and clearly as it can that Scotland quite literally does not count by refusing to measure what happens there.

Interestingly, let us take Ritchie’s argument seriously for a moment. For that also means that Westminster doesn’t know what is happening in England, or Wales, or, in fact, any other subset of the UK. It’s a plot I tell you, a plot!

Oh dear

So, then: who actually owns this place? That’s what I’ve set out to investigate with my blog, Who Owns England?. I started it last summer, post-referendum, determined that if Brexit really meant “taking back control of our country”, then I’d like at least to know who owns it.

So, Snowflake has been studying this subject for 9 months now.

Understanding who owns this country has been a utopian project for at least a century and a half. In 1872, in an effort to disprove radicals’ claims that only a tiny elite dominated the landed wealth of the nation, Lord Derby – a major landowner himself – asked the government to undertake a proper survey. The Return of Owners of Land – or “Modern Domesday”, as it became known – was the first comprehensive assessment of land ownership in Britain since William the Conqueror’s swag list after the Norman conquest. But far from dousing the demands of the radical land reformers, the survey lit a fire under the issue.

The Return showed that just 710 aristocratic individuals owned a quarter of the entire country. Popularised by the author and socialite John Bateman in a bestselling book, The Acre-Ocracy of England, who owned land suddenly became the talk of the town. But it wasn’t just the gentry keeping up with the Joneses; land reform had become the political issue du jour. After all, this was a time when you couldn’t vote unless you owned property; when tenant farmers were struggling under a severe agricultural depression;

After 9 months studying the subject our Snowflake still doesn’t know that county tenants in various forms were granted the franchise 50 years before and that some boroughs had had tenant electors all along.

Hmm. Sterling work there, eh?

And he’s not really quite right about Henry George being all that radical. Yes, of course an LVT is a good idea. But then feudalism ran on much the same idea, didn’t it?

Err, yes Paul, yes

But if Scotland leaves – and Northern Ireland is given some kind of halfway status to prevent a border being re-erected with the Republic – then what’s left cannot be called “rUK” – the rump or remainder UK. It will be England-Plus.

It will be “England and Wales” just as it is now.

This new country will still be a major global economy, a nuclear power (albeit in need of a new port for its nuclear-armed submarines), a permanent member of the UN Security Council and home to the head of the Commonwealth. And it will need an ideology.

He really does miss quite how fascist he sounds there, doesn’t he? A nation must have an ideology…..

But here is where the problem begins. Just as it’s hard to deglobalise a national economy, breaking up an imperialist ideology into its constituent parts is going to be very tricky. The British imperial ideology, and its post-imperial successor after 1945 was the creation of a national bourgeoisie.

Cod Marxist fascism even.

So what can we do? Some figures on the left have argued for an English parliament. I dismissed this proposal two years ago, but Brexit has convinced me the federal argument is strong.

That raises the question: what form should English federal institutions take? Given the opportunity to redesign the English political institutions along federal lines, we should push not for an English assembly, but for powerful regional states, along the lines of the German länder. The result might look a lot like the map of the British isles around 830 AD, once Wessex was a unified kingdom – with the equivalents of Mercia, Northumbria and Wales each having a devolved assembly.

At which point he advocates exactly what the EU has been trying, to kill off the nation state and devolved everything down to the regions. The EU wanting this so as to be able to cow them of course.


My major argument against this is that there just isn’t the talent out there. When we look at the morons who make up the lower ranks of Parliament itself we can see that we’re not going to end up with lots of bright people in all those regional assemblies, are we?

So this is not Lake Wobegon

“In fact, we know most companies have below-average levels of productivity

Andy Haldane.

Firms which do not export are poor at raising productivity, which Mr Haldane believes may be because they are not as heavily exposed to foreign competition.

Similarly it can help if firms have foreign owners who are used to competing against the best the world has to offer.

Actually, the Treasury had this right in their Brexit document. Imports expose firms to that foreign competition and thus they up their productivity or go bust. This is one of the ways that imports make us richer….

Eating their own

Chimamanda Ngozi Adichie, the Nigerian novelist and feminist, has condemned a “language orthodoxy” on the political left after she endured a vitriolic backlash over comments about transgender women.

The author of Half of a Yellow Sun plunged into a row about identity politics when she suggested in an interview last week that the experiences of transgender women, who she said are born with the privileges the world accords to men, are distinct from those of women born female. She was criticised for implying that trans women are not “real women”.

Leave them to it…..