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Tim Worstall

Spud really is a one.

I noted in a video recently that if the Bank of England was setting interest rates now in accordance with long-term trends, then the real interest rate (i.e. the interest rate less the inflation rate) should be as close to zero as makes no difference.

Hew uses this Bank of England paper to reach this conclusion.

As the trend line in that chart shows, we have now reached the point where net real interest rates should be zero, and there is no excuse for them to be anything else. Essentially, the risk in money lending has gone in a system where the return of funds is guaranteed by the central bank. Nothing more than a return that maintains the value if the money is deposited is required in that case. After all, why else are government guarantees on bank deposits provided if it isn’t to eliminate risk and so keep rates as low as possible?

Hmm. The actual paper itself says:

The data here suggests that the “historically implied” safe asset provider long-term real rate stands at
1.56% for the year 2018, which would imply that against the backdrop of inflation targets at 2%, nominal
advanced economy rates may no longer rise sustainably above 3.5%.

So, Spud cannot read a paper.

What’s much more fun though is that Spud really, really, cannot read a paper. For what the paper is really trying to point out is:

Together, I posit that the private and public assets covered in the following also go some way in
enabling the reconstruction of total “nonhuman” wealth returns since the 14th century. Prior to the
recording of robust public statistics, wills and tax assessments suggest that around one-third of private
wealth is tied to public and private debt assets, with another third in real estate – in an environment where
wealth-income ratios may plausibly have reached 150-250% of GDP. Aggregating such evidence, and
constructing plausible long-run R-G series over the last 700 years, suggests that real returns on nonhuman
wealth are equally downward trending over time. They are by no means “virtually stable”, a cornerstone
of Piketty’s (2014) framework. In fact, if historical trends are extrapolated, R-G will soon reach
permanently negative territory – a first since at least medieval times.

Piketty’s full of shit and no, we do not have to tax the rich merely because they’re rich.

Ho, Hum.

This is fun

In a dark, dark, way:

Democracy is in crisis. What would do most to restore it?

Funding political parties so they are free of donor influence?

Of course state funding of politics would not free politics of donor influence. It would merely place the influence in the hands of those who define what is the allowable politics that gains state funding.

This isn’t quite right

In an interview with Jordan Peterson, a Canadian academic, in 2024, Mr Musk declared that his trans daughter was dead to him, and that he was “tricked” into giving consent for his child to take puberty blockers.

“I lost my son, essentially. They call it deadnaming for a reason,” he said. “My son Xavier is dead, killed by the woke mind virus.”

He’s dead to me” implies that Musk has cut off his (former) son.

That’s not how I read his comments. Rather, that he had a son – his first surviving, which is of an importance to men whether it should be or not – and now that son has died. And it’s the now daughter who has demanded the removal of his surname etc, the deading runs rather the other way.

Well, yes?

Lucy Letby’s former boss has insisted that the former NHS nurse is not guilty of murdering newborn babies.

In her first public show of support for Letby since the allegations emerged, Karen Rees, a retired head of nursing at Countess of Chester Hospital, said: “If she was acting she deserves an Oscar”.

Narcissists and psycopaths often are v good at acting.

Umm, really?

Sir Keir Starmer has announced he is “ready and willing” to put British troops on the ground in Ukraine to enforce any peace deal.

So, the Rooskies have 250,000 troops on the ground? The Ukies 200k? Those numbers are wrong, obviously, but they’re of the right sort of order.

British Army is 25k troops all told? 50k?

So British troops would be a tripwire. Kill any of ours and we’ll send a really stiffly worded letter you know. Because international law really does mean something. No, really.

It’s abject nonsense, no?

The Observer’s got Big News about Google!

Google has cooperated with autocratic regimes around the world, including the Kremlin in Russia and the Chinese Communist party, to facilitate censorship requests, an Observer investigation can reveal.

The technology company has engaged with the administrations of about 150 countries since 2011 that want information scrubbed from their public domains.

As well as democratic governments, it has interacted with dictatorships, sanctioned regimes and governments accused of human rights abuses, including the police in Taliban-controlled Afghanistan.

That is, Google obeys the law.

Obviously, the law in a specific place can be good or bad by our standards. But it is still the law in that place. And do we actually want private sector companies deciding which local laws they’re going to follow? Or not?

Imagine if Google – unilaterally – decided not to obey UK law. The Observer’s reaction would be?

Eh?

the way in which electoral systems devalue the votes of people who live in densely populated areas.

Constituencies are deliberately weighted by total population size.

But, then, Ash Sarkar, right?

Sounds good to me

There is potentially a future Premier League in which there are no financial controls – without any limit on spending, without any regulation of the size of commercial deals negotiated with entities under the same ownership – and the demolition of the current system by Manchester City’s legal challenges is certainly doing its best to hasten us there.

Go for it.

Because here’s the nasty little secret. All restrictions upon player salaries, budgets, sources of funds and all the rest, work to the advantage of the other owners in the league/system. Because that’s how cartels do work, in favour of the capitalists. Open, free, laissez faire, markets work in favour of the players.

So, open, free, laissez faire markets it is then. Right?

These restrictions are just the maximum wage imposed again. This time around it’s maximum wages, not wage, but the aim, intention and outcome is the same.

What glorious fun!

Sir Keir Starmer’s Chagos Islands giveaway was plunged into fresh controversy on Saturday night after the former Mauritian prime minister who masterminded the deal was interrogated in a money-laundering scandal.

Pravind Jugnauth and members of his family were hauled into the offices of the Mauritian Financial Crimes Commission for questioning on Saturday following a three-hour search of his home.

Police had earlier raided the premises of a close associate of Jugnauth, where they said they found suitcases stuffed with tens of thousands in cash in more than a dozen currencies, Rolex and Cartier watches and UK visas, according to reports. The associate denied the items were his.

No, no, no, of course they’re not his. This is a political set up. Now the other party controls the security services they’re being turned loose on the former government. No, really. Undoubtedly.

We should be handing over territory to a place as crook as that, eh?

Amazin’, this

Kate Mosse: I wrote a global smash hit but male authors are taken more seriously
As Labyrinth turns 20, the author reveals what its success means to her – and why female writers are still being discriminated against

Right, OK.

A furiously paced female-fronted time-slip adventure that splices the persecution of the 12th-century Cathars by the Catholic North with the legends of the Holy Grail, it has now sold more than 10 million copies in 41 countries.

Bestselling chick lit is still chick lit, no?

As to this:

The next frontier, she says, is non-fiction. Last year she launched a sister prize, The Women’s Prize for Non-Fiction, with the inaugural winner Naomi Klein for Doppelganger, a memoir about shifting political allegiances in the age of big tech.

That’s really edgy and norm-defying. no?

An amusement

There is a nickname for Rachel Reeves, which did apparently originate in the Treasury in London, which is that she is ‘Rachel from Accounts’. Now, I wouldn’t like to use that term normally, but it is quite humorous because it does of course come from the Australian comedy series ‘Colin from Accounts’, which is well worth watching if you haven’t seen it. But there is something about it which also reflects precisely who Rachel Reeves is.

She is, after all, completely obsessed with balancing the books. To refer to her in that context as ‘Rachel from Accounts’ does not seem to be totally inappropriate. I think it’s almost fair. But at the same time, I have a question to ask. And that is, how long will she be ‘Rachel from Accounts’? Or, in other words, when will it be that she’s ‘Rachel from the backbenches’ again?

This from the man who insists that monetary policy should be run on the basis of double entry bookkeeping….

Wait, you what?

Imagine this: a continent scarred by centuries of violence and exploitation, now standing united to demand justice. This weekend, the African Union (AU) is kicking off its annual summit with a bold, historic declaration: 2025 will be the year of Justice for Africans and People of African Descent Through Reparations. This marks the first time in its history that the AU has placed reparations front and centre.

At first, you might wonder: is this really the right moment? Former colonial powers have shown little interest in addressing their past, and global leaders like the US president, Donald Trump, are actively dismantling international institutions. But maybe this is exactly the right moment for Africa to demand accountability, and for Europe’s democracies to finally offer a meaningful response. As the world grapples with shifting power dynamics, Africa’s call for justice is more urgent than ever.

The people who sold the fucking slaves are demanding compensation for having sold the fucking slaves?

You what?

Twattery. No, really, wholly twattery

The search for economic growth is becoming increasingly desperate. As health and welfare spending soars and public debt mounts to unprecedented levels, the Chancellor is betting the house on boosting productivity rates to stave off economic collapse.

But according to an illuminating new report, the Government is barking up the wrong tree. In a research paper for the Alliance for Responsible Citizenship (ARC), economist Philip Pilkington argues that economic growth stems from a combination of three factors.

These are: the number of people who are employed in an economy; the extent to which those workers are contributing to the maximum of their abilities; and productivity.

Pilkington says that models for measuring growth have long neglected the importance of the first two elements, being fixated instead on “productivity”, a somewhat mystical variable, consisting of whatever is “left” after labour force growth has been accounted for.

UK productivity is often compared unfavourably to the US. But over the last half century, US population growth has been far more significant than productivity gains in driving GDP growth, contributing on average 2.11pc to economic growth per annum, compared to a productivity growth contribution of 1.55pc.

In contrast, since the 1970s in Britain, population growth has added just 0.62pc a year to economic growth, while productivity has grown by an average of 1.51pc each year.

There’s not a single economist that doesn’t grasp and worry about the difference.

Sigh.

This is not within his power

Ed Miliband has pledged a permanent ban on fracking just days after the discovery of a giant gas field in Britain was announced.

The Energy Secretary indicated he would not change course on a Labour manifesto commitment to “ban fracking for good” despite discovery of the field under Lincolnshire that could fuel the UK’s entire needs for a decade.

Experts argue that gas is the essential “bridging fuel” needed to wean Britain off oil as it electrifies transport and heating and expands renewables in the race to hit net zero targets.

However, a spokesman for Mr Miliband said on Friday: “We intend to ban fracking for good, as per our manifesto commitment. We will update on this in due course.”

Parliament is sovereign. Any future parliament can undo the laws passed by this one. No legal change – such as a ban on fracking – is therefore permanent.

Vote Reform would be my advice.

Yes, yes, I know what Tice has just said doesn’t even make sense. But, still….

Erm?

Not seen the actual report itself but a solution other than racism does suggest itself:

Stopping people from working from home can be racist because bosses have unconscious prejudices against non-white employees, a study has suggested.

Black and Chinese men are significantly less likely to work from home (WFH) compared to white counterparts, according to a new paper published in the Industrial Relations Journal. Chinese women were also significantly less likely to work from home than white women.

The disparities reflected “structural biases” in British workplaces, academics said. Black and minority ethnic (BME) workers in the UK are “generally discriminated against” in hiring and promotion processes because of biases against their capabilities, the report said.

Perhaps the segregation is in the tyope of work done across the groupings. Meaning that some groups are more likely to be in owrk that simply cannot be done from home?

You know, maybe?

Beancounters, eh?

More than £250m was wiped off the value of John Wood Group after accountants found “material weaknesses and failures” in the North Sea engineering giant’s governance and financial practices.

The British company’s shares tanked by more than 45pc on Friday as bosses revealed the company now expected negative cashflow of up to $200m (£159m) this year, after previously telling investors it would be positive.

After a bruising day of trading, the London-listed business, which offers outsourcing services to major North Sea producers, was left with a market cap of just £209m.

It came after early findings from a review of the struggling business, conducted by consultants at Deloitte, suggested profits from the group’s projects division may have been overstated in 2023 and prior years.

Undoubtedly Spud will tell us that this shows that accountants aren’t to be trusted and therefore he should be put in charge. Except, if accountants aren;t to be trusted why would we put a retired one in charge?

Well, yes, you know, it does?

The pound has risen to its highest value this year as the US Treasury said the Trump administration is considering currency manipulation as a potential trade bargaining chip.

Scott Bessent, the US Treasury Secretary, said America’s trade policy would expand to what he called a “reciprocal index” of the impacts of tariffs and other trade barriers.

“We’re also looking at currency manipulation,” he told Fox Business Network.

“The US has a strong dollar policy, but because we have a strong dollar policy, it doesn’t mean that other countries get to have a weak currency policy.”

That is, in fact, exactly what it means.

You’ll also find that tariffs imposed by the US make the US dollar stronger. Also, that a higher US dollar increases the US trade deficit. The nett effect of tariffs, a higher dollar, is difficult to predict therefore.

Hostility you say?

A convicted Zimbabwean paedophile was allowed to stay in Britain because he would face “hostility” if he was deported back to his home country.

An immigration tribunal judge blocked his deportation to Zimbabwe by the Home Office because it would breach his rights under Article 3 of the European Convention on Human Rights (ECHR) which prohibits torture, inhuman treatment and degrading punishment.

Sarah Pinder, the judge, accepted his lawyers’ claims that, as an openly gay man who had been jailed for more than five years for child sex offences, he was likely to face “substantial hostility” from the Zimbabwean authorities.

Err, yes:

The Home Office ordered his deportation in June 2021, but he fought this under Article 3 of the ECHR, arguing that he would face inhumane treatment in Zimbabwe because he was “a gay white man, who would seek to live his sexual orientation openly, and who is also a convicted sex offender”.

His lawyers argued that his risk of persecution would be increased as a result of his reduced social skills because of his health conditions, including autism, attention deficit hyperactivity disorder, attention deficit disorder, post-traumatic stress disorder, depression and deafness.

And, well, you can sorta see the point. Not that I agree with it, but you can sorta see it. But:

She said that RC “would also be at a greater risk on account of his disabilities, namely his deafness and autism, which would reduce his social skills and likely lead him to be open about his sexuality… the judge had also considered that the appellant would likely disclose his convictions with him not appearing to have any sense of the gravity attached to his offending”.

So he’s unrepentant and we’ve got to keep him because he’s unrepentant? That is….odd.

Missing the point

The Bank of England should not be independent.

There is absolutely no excuse whatsoever for separating the two supposed branches of macroeconomics, namely fiscal policy and monetary policy, with them supposedly being managed by separate entities even though in reality it is very obvious that both are in practice under the control of the Treasury, with the Bank of England then being used as a supposed constraint on what can be done.

Central bank independence has lowered interest rates. No, not the headline rate. Rather, against the counterfactual of not central bank independence.

Why?

Because having a part of economic governance which constrains the other from spending as a drunken sailor works better than not having that constraint.

The constraint is the point.