April 2018

More elsewhere

The president is absolutely correct that the old location on Grosvenor Square in Mayfair was delightful, absolutely in the beating heart of London. The new one at Nine Elms is an old industrial estate on the unfashionable, southern side of the river. But that’s the entire point of the move, an odd thing for a real estate expert to miss. Buildings that people have to go to should be in cheap parts of the city, and we can leave the expensive places to the people willing to pay higher prices.


Protectionists would have you believe that domestic firms would be helpless against those viciously efficient foreigners, so we must have trade barriers to stop that pressure. But it’s actually that competition from viciously efficient competitors which drives up productivity and thus increases living standards. If domestic productivity is low, or lower than foreign, that is exactly the reason not to put up protective barriers. It’s only under outside pressure that our own producers up their game.

If domestic productivity is not lower than global then of course there’s no argument at all for protection. Who needs tariffs against less efficient competitors? Reading the runes of trade correctly insists, either way and whatever the state of the domestic economy, that we don’t want to have restrictions upon the very thing which makes us richer.

The Senior Lecturer’s arguing with accounting identities now

And for the sake of the record (and getting back to the theme of national income accounting that has bugged my blogging this weekend) S ≠ I. which means savings do not equal investment in any shape or form.


Accounting Identity: Saving Equals Investment
A fundamental macroeconomic accounting identity is that
saving equals investment.
By definition, saving is income minus spending.
Investment refers to physical investment, not financial
That saving equals investment follows from the national
income equals national product identity.

Mail headlines – sigh

Palatial 13th-century Georgian estate complete with sprawling grounds, mahogany panelling and 12 bedrooms goes on sale for £6million after owners spent SIXTEEN years restoring it

Yes, yes, we know what they mean, but Georgian tends not to refer to the 13th century…..

This is a new one

But in a judgment released on Friday Lord Justice Singh and Mr Justice Whipple said her understanding of the law was “misguided” and the guidance was incorrect.

“What on its face looks like a general policy which applies to everyone equally may in fact have an unequal impact on a minority.

“In other words, to treat everyone in the same way is not necessarily to treat them equally.

“Uniformity is not the same thing as equality,” they said.

Jews and Muslims have a 3 day policy – the body should be in the ground within three days of death.

A coroner who operated a “cab rank” system for burials has been told by the High Court to drop her policy and release the bodies of Jews and Muslims first.

Judges said the “equality protocol” policy introduced by Mary Hassell, the senior coroner for inner north London, was “discriminatory” and “incapable of rational justification”.

The protocol said that “no death will be prioritised in any way over any other because of the religion of the deceased or family, either by the coroner’s officers or coroners.”

This meant cases were assessed and bodies released for burial by the coroner’s office in order of when they were received, taking no account of any religious requirements.

Thus that’s discriminatory.

Seems an entirely reasonable decision on the basis of simple pragmatism. Why not accommodate such beliefs after all?

The more general statement that uniformity is not equality needs to be carefully circumscribed though, doesn’t it?

This doesn’t work, does it?

The untold story behind the priceless Rockefeller art collection, set to be the largest art auction in history

If it’s priceless it cannot be sold because we’ll not find a price to sell it at. If it’s being sold at auction then it cannot be priceless, can it? The auction being the method of finding out what the price is.

If only the Egregious Professor understood any economics

Are those two events linked? I would suggest that quite emphatically they are. My reasoning is simple. One of the identities that describes the make-up of our gross domestic product is:

Y = C + G + I + (X-M)

where)and I know I simplify, but not in any way that changes this argument):


C = Consumption

G = Government spending

I = Investment

X = Exports

M – Imports

In other words, government spending is part of our national incomes. And that has to be the case precisely because what our government spends does, literally by definition, or because of the inevitability of double-entry book-keeping, become someone else’s income.

And what that means is that when a government deliberately shrinks its spending in an attempt to balance its books it shrinks national income.

No, the G in the GDP equation is not government spending. It is government spending upon final goods and services. It does not include transfer payments. What is it that is being cut? Transfer payments to hear the squeals about welfare spending, no?

In fact, theoretically at least, the government could eliminate all transfer payments entirely and while that would definitely close the deficit – produce a very decent surplus in fact – it would make no difference at all to the G in the GDP equation.

Snippa’s just charged off into the mist of his own ignorance again.

Now we’ve pinheads dancing upon angels

The Senior Lecturer wants us all to know that he’s right, absolutely and candidly correct:

This does matter. What, of course, it in effect confirms is that tax revenue does not fund government spending. We know that is true: as I noted a couple of days ago, whenever the government spends it does not use your taxes. Instead it tells the Bank of England to make payments for it. In effect, it borrows. That is why we’ve had a UK government debt since 1694. Literally, the Bank of England creates the money the government spends, which is a process that doesn’t involve a printing press. All the Bank does is some double entry bookkeeping. It debits the government’s loan account with the amount to be spent, and it credits the government’s current account. And the government then spends the money, just as anyone can when they have a current account in credit. And then what HMRC do is pay whatever they collect into the Treasury loan account at the Bank of England to help clear it. The leftover balance in that loan account is then cleared by the issue of bonds (or gilts) or quantitative easing funding.

There is then no direct relationship at all between government spending and tax, which is exactly what HMRC have now confirmed. All they do is help clear the Treasury loan account at the Bank of England, just as government borrowing and quantitative easing funding do as well.

But what that means is that the next time the government say they are spending taxpayers’ money you know that’s not true because there is, quite literally, no way they can say that given the economic reality of what is going on. They’re always spending the Bank of England’s money, which is then cleared by taxes, borrowing or QE (which is, in effect, an alternative form of Bank of England created money).

The Egregious Professor is of course in error. But where?

It’s here: “given the economic reality”

What’s he’s described is, at best, the accounting reality of what is going on. Which isn’t the same as the economic one, not at all, in the same way that accounting and economic profits are two different things.

Forget money, it’s creation and destruction and so on, entirely for a moment. Think properly like an economist – about resources.

The economy contains a number of resources. Government takes unto itself the power to collect and dispose of some of those resources. Labour is directed into the NHS for example. Steel into a bridge over the Humber. The abstraction of that labour and steel from what it would be doing in the absence of government abstraction is a tax. Resourecs owned by some people are taken off and used as government directs. This is the economic reality. Sure, we differentiate between corvee labour and taxation which goes and hires that labour but the underlying economic fact is that they’re both forms of taxation.

How the money is created or destroyed to account for moving that labour around doesn’t change the basic taxiness of the direction of what that labour is going to be doing.

Government expends the resources of the people. It might even be to good effect but it is still taxation. That’s the economic reality, not this mithering about the accounting for money creation.


Applying moral philosophy to banking might not be the wisest of moves. The Marxists in the Labour Party would be insisting that the state must do it all, while the Aquinas wing of Christianity would possibly say the usurers will burn in Hell for all eternity. However, there is an interesting part of Marx that we can apply – the mode of production determines social relations. Further, that when the mode changes, so should the relations.

In other words, as TSB’s latest travails show, it might be time to put the computing industry in charge of retail banking. Or, to be less ambitious, perhaps, to actually recognise UK retail banking for what it is these days – a branch of the computing and tech industries, not something really to be run by bankers any more.


The world faces one of those unfathomable mysteries. Any number of charities, campaign fronts and political groupuscules adamantly insist that corporations and the rich are dodging their rightfully due taxes. They propose measures which would lead to that cash being recovered and then comes the mystery. The money that is collected never amounts to a hill of beans compared to the original claims. How and why could that be?

One answer is that all are in this together, the politicians and even the tax collecting bureaucrats are in cahoots with the plutocrats. No, some really do make this argument. A rather more sensible revelation would be that the original claims are so vastly overblown as to be nonsense – that is why no one is ever able to collect the sort of sums alleged to be being hidden away.

The particular trigger for this musing is that Her Majesty’s Revenue and Customs (the U.K.’s version of the Inland Revenue Service) has only been able to collect, following various law and reporting changes, one third of what campaigners insisted would be forthcoming subsequent to those changes. There have been mutterings of a lack of will, insufficient taxmen and resources for them to work with and so on. Again, good sense insists that we look to a different reason. HMRC itself has always said that the tax gap – the difference between what is due and what is paid – is about one third what the campaigners themselves say it is. The gap is one third, collections are one third, really, it is not all that complex an explanation.

Explains quite a lot really

Hillary Clinton unleashed a “fuck-laced fusillade” on aides in a 2016 debate prep session, according to a new book about the presidential campaign by New York Times journalist Amy Chozick.

The candidate was squirming with frustration over lingering concerns about her “authenticity” and racked with loathing for Donald Trump she was determined not to vent in public.

“Aides understood that in order to keep it all together onstage, Hillary sometimes needed to unleash on them in private,” Chozick writes in Chasing Hillary: Ten Years, Two Presidential Campaigns and One Intact Glass Ceiling. “‘You want authentic, here it is!’ she’d yelled in one prep session, followed by a fuck-laced fusillade about what a ‘disgusting’ human being Trump was and how he didn’t deserve to even be in the arena.”

That sense of entitlement, that others were not worthy to challenge her right to rule…..

The point about the Cajun Trinity is….

….that it has four parts to it.

The main course on Tuesday night will be a rack of spring lamb and Carolina gold rice jambalaya, “cooked in a New Orleans tradition and scented with the trinity of Cajun cooking – celery, peppers and onions, and spiced with herbs from the south lawn”, the White House announced.

Celery, peppers, onions and garlic.


Amazing how myths start, isn’t it?

All but two of the charges against Ibrahim were dropped last year after brands including Zara and H&M boycotted an industry conference in Dhaka, in protest at the treatment of workers and crackdown on unions. With competition growing from garment sectors in Vietnam and Ethiopia, threats by western buyers hold more sway than ever.

I was at that conference. As was the H&M rep. I met him.

Oh for God’s Sake you idiot

I have dwarfism. I was 13 when Verne Troyer hit our screens as Mini-Me in Austin Powers sequel . The character was a compound of stereotypes of people with dwarfism. He was hypersexual, unintelligent and aggressive. He was not even a character in his own right but a replica of another, average height role. Like dwarf performers in circuses of days past, his character only existed in contrast to others.

In one scene, Mini-Me appears in a sling strapped to Mike Myers’ chest, like an infant. In the follow-up film, Goldmember, another character threatens to eat him because he “looks like a baby”. Throughout the series he serves as Dr Evil’s biddable pet. I imagine few who watched it know that like this – abusing, ridiculing, and, sometimes, even killing them.

Jeebus, that’s exactly what was being parodied.


There’s no reason at all to ban some consumer choice other than the knowledge that if it were available some would pick it. Given that this is obviously so, we liberals should be telling the progressives to go boil their heads. Really, why are you trying to ban something that people so obviously desire?

As The Egregious Professor So Often Tells Us, Adam Smith Has No Relevance In This Modern Age

Commitment is to a person, family, friends, community, workplace, region, culture, religion, gender or identity, country, humanity, the planet. And I am aware I will have made omissions. Commitment is a message that others matter. Equally, it’s a sign that the commitment of others matters to us.

Writing this made me think about commitment. Almost without exception we humans know what it means. And again, almost without exception we have it. So I thought of plotting our commitment on a vertical, Y, axis.

I think it appropriate to allow for the opposite of commitment. I call that antipathy. Since few hate everyone I think we all start with positive commitment. But it can become negative

The horizontal, X, axis I use to plot remoteness. The resulting plot shows that as some groups are more remote from us we are as less committed to them.


Let us suppose that the great empire of China, with all its myriads of inhabitants, was suddenly swallowed up by an earthquake, and let us consider how a man of humanity in Europe, who had no sort of connection with that part of the world, would be affected upon receiving intelligence of this dreadful calamity. He would, I imagine, first of all, express very strongly his sorrow for the misfortune of that unhappy people, he would make many melancholy reflections upon the precariousness of human life, and the vanity of all the labours of man, which could thus be annihilated in a moment. He would too, perhaps, if he was a man of speculation, enter into many reasonings concerning the effects which this disaster might produce upon the commerce of Europe, and the trade and business of the world in general. And when all this fine philosophy was over, when all these humane sentiments had been once fairly expressed, he would pursue his business or his pleasure, take his repose or his diversion, with the same ease and tranquillity, as if no such accident had happened. The most frivolous disaster which could befall himself would occasion a more real disturbance. If he was to lose his little finger to-morrow, he would not sleep to-night; but, provided he never saw them, he will snore with the most profound security over the ruin of a hundred millions of his brethren, and the destruction of that immense multitude seems plainly an object less interesting to him, than this paltry misfortune of his own. To prevent, therefore, this paltry misfortune to himself, would a man of humanity be willing to sacrifice the lives of a hundred millions of his brethren, provided he had never seen them? Human nature startles with horror at the thought, and the world, in its greatest depravity and corruption, never produced such a villain as could be capable of entertaining it. But what makes this difference? When our passive feelings are almost always so sordid and so selfish, how comes it that our active principles should often be so generous and so noble? When we are always so much more deeply affected by whatever concerns ourselves, than by whatever concerns other men; what is it which prompts the generous, upon all occasions, and the mean upon many, to sacrifice their own interests to the greater interests of others? It is not the soft power of humanity, it is not that feeble spark of benevolence which Nature has lighted up in the human heart, that is thus capable of counteracting the strongest impulses of self-love. It is a stronger power, a more forcible motive, which exerts itself upon such occasions. It is reason, principle, conscience, the inhabitant of the breast, the man within, the great judge and arbiter of our conduct.

Nope, no relevance at all that Smith guy.