Tim Worstall

A useful definition of commodity

Commodity – something where the producers don’t have pricing power. Not a complete description but a useful one:

The reality is that few real shortages were in fact created by the war in Ukraine, whilst Covid supply chains have long since been resolved (chips apart). There were no real reasons for price increases in that case bar one thing, and that was the profiteering from fear that was exploited by many suppliers of basic commodities, like oil companies.

Since many oil, gas, food and construction raw material costs are now back at pre-war prices the idea that there was a fundamental cost increase as a result of it that they needed to cover by increasing prices is shown to be wrong: they simply profiteered at cost to society at large, as Shell’s profits clearly demonstrated yesterday.

Crude oil is a commodity. Shell doesn’t have pricing power.


With this level of self-belief, it’s surprising to know that a certain amount of soul-searching has gone on of late about the condition of modern American journalism. But no one does introspection like American journalists. They devote acres of space, trillions of bytes and thousands of hours of air time to pondering the state of “the media”. It’s less navel-gazing; more self-proctology.

Lordy Be American journos are self satisfied. It’s the major thing I have a problem with writing for folk over there.

Years back there was a very good Boris column on the experience of writing for the NYT. Worth digging out if anyone can find it.

A personal experience – I did a 700 word piece for the Washington Post once (bastards still haven’t paid me) and I ended up with three editors making comments about how this could be changed, that comma, this colon etc. Just nonsense – the equivalent experience for any UK paper is that the subs do that and you find out when you read the published version. But the Americans wanted to actually discuss – and the three had different ideas of course – each specific change. They really couldn’t grasp my Englishness in “Sure, change it to house style, have fun.”

That’s just a symptom of course, American journalists really, really, don’t grasp it’s just a craft and the connection with tomorrow’s fish wrapper.


What fresh Hell is this?

There is also an ongoing question across industries over where tax should be paid. “The problem is there is a difference between where the customer is and where the production is,” says Richard Murphy, co-founder of the Tax Justice Network. “They’re paying the tax where production is. We, the customer, are paying the price but we’re not seeing the benefit of the tax paid.”

This is a problem? When Spud has spent the past couple of decades insisting that tax should be paid in those poor countries where the production is?

More economics

The Bank of England has sounded the alarm over a worsening crisis in the rental market as high taxes and red tape forces landlords to sell up.

In its Monetary Policy Report published on Thursday, the Bank said demand for rental properties has continued to outstrip supply as “the number of landlords choosing to exit the market increased”.

Therefore rents are going up – reductions in supply tend to do that.

My word, wouldn’t we be lucky if there were a science that could teach us about these things?

Good Grief, where to these Tossers get off?

Cheap supermarket meal deals could be as unhealthy an option as a large Big Mac and fries, a new study has found.

Researchers at the University of Birmingham found that budget meal deals, which cost around £3.50, often contain well over the 600 calories recommended for people to consume at lunchtime.

The deals, which are hugely popular at Tesco, Sainsbury’s and Boots, include a main, snack and drink, and vary from sandwiches and baguettes to salads and pasta.

According to the study, one in five combinations sold at major supermarkets and high street chains exceed the calorie limit, with the average lunch containing 10 per cent more than advised.

We’ve given the anal retentives enough power to recommend whether we have 600, or 660, calories for lunch now, have we?

Lions with lasers is no longer an option. The Carthaginian solution is all that is left.

One of the key messages in this campaign was 400-600-600 guidance, which recommended that adults consume 400 calories for breakfast, and 600 each for lunch and dinner, with two 200-calorie snacks.

Back up the trucks to load up with that salt, we’re going to have to make this territory entirely uninhabitable.


Mason Greenwood, the Manchester United footballer, has had all criminal charges against him dropped after key witnesses in his attempted rape case withdrew from his prosecution.

The patriarchy oppresses those brave women who come forward?

A spokesman said the decision of key witnesses to withdraw from the case and the emergence of new evidence meant it was no longer felt there was a realistic prospect of conviction.

The spokesman said: “We have a duty to keep cases under continuous review. In this case a combination of the withdrawal of key witnesses and new material that came to light meant there was no longer a realistic prospect of conviction.

Or was there new material which showed the claims to be bollocks, which led to the withdrawal?

Remarkable how this works, isn’t it?

Wealthy foreign buyers are snapping up London’s most expensive homes in cash, tempted by a cooling property market and weak pound.

Half of the homes sold in “prime” central London in January were bought without a mortgage, up from 42pc in the same month in 2022 and 38pc in January 2021, according to analysis by estate agency Hamptons.

Demand from international buyers, especially those with currencies pegged to the US dollar, surged in the wake of the mini-Budget last year as the pound dropped to a record low and they pounced on huge discounts.

The pound has since recovered to the level seen in August last year, but buyers who exchanged funds during the market dip are now reaping the rewards.

Price of money drops, increasing demand for that money, more buy it, the value of that money starts to recover.

Almost like there might be some rules about this or summat


Quite remarkable

The biggest myth of all is that public expenditure is funded from the (private) taxpayer’s pocket. There is a growing alternative economics which shows that it is the state’s capacity to create money that underpins the market, through the authorised banking system and government spending.

OK, MMT. But the end of the letter?

The time has come to recognise the autonomy of public money and the role of the public economy in sustaining the market system. Proposals for public spending for the public good need not fear the neoliberal question: “Where is the money to come from?” We know where it comes from. It doesn’t come from magic money trees – it comes from us, as citizens.

So we, the citizenry, do pay for it then?

Prof Mary Mellor
Author of Money: Myths, Truths and Alternatives

Almost Spud-like, eh?

How to beat inflation

The right course of action today would be a significant interest rate cut. One per cent would do for starters so long as the signal was given that there was more to come.

Well, it’s certainly different from conventional economics…….

$90 billion

From our ever popular Questions In Guardian Headlines We Can Answer series:

Why has the Adani Group shed US$90bn in value and what do short sellers have to gain?

Not that the short sellers will have captured that $90 billion, only some small portion of it. But it’s a pretty simple idea – those who bet on prices falling gain if and when prices fall.

As to the value to us all out here, it is of value if someone ramping their own shares is shown to be a spiv ramping their own shares. Being able to profit from providing this information is a good incentive.

Losing money if an allegation of spivvery turns out to be untrue is also an excellent incentive.

Yeah, yeah, yeah……

The Beano has been accused of being “incredibly irresponsible” for promoting junk food to children through online quizzes and portraying vegetables as “vile”.

Sod off. But this is more interesting:

Henry Dimbleby, lead author of England’s National Food Strategy – which called for a salt and sugar tax on processed food – said: “People at Beano might be thinking: ‘Oh, well, you know, it’s just a little bit of fun, that’s what the kids like.’

“But I just think it is all pervasive in society. This stuff invades every element of their lives.”

Yep, arsewipes like Dimbleby and their propaganda are all pervasive. Perhaps we should o something about that?

So, what’s the news here?

Women are still able to accurately recall the details of sexual assault and rape even if they’ve drunk alcohol, according to a new study.

The findings are an important step in challenging courtroom perceptions of women being unreliable as witnesses in cases where they were intoxicated at the time of assault, researchers say.

The team discovered that women who had drunk alcohol up to the legal limit for driving were able to accurately recall details of an assault in a hypothetical scenario.

These included details of activities to which they had and had not consented.

That details of sexual assault are uniquely recallable after a couple of glasses of wine? That female memories are better than male? What?

Perhaps only that memory fails when blotto but not when one’s had a glass? Because the limit they’re using is legal driving limit. Which is what, two pints? Two glasses of wine? One for a slip of a girl?

The team plans to continue their research, testing recall at different levels of intoxication by improving the realism of the scenario presented.

The result might not hold up after a bottle or two of wine……

Once again Robert Reich is talking toss

Republicans aren’t going to tell Americans the real cause of our $31.4tn debt
Robert Reich

What’s that then Bobby?

Not only is the Republican story false, but it leaves out the bigger and more important story behind today’s federal debt: the switch by America’s wealthy over the last half century from paying taxes to the government to lending the government money.

This backstory needs to be told if Americans are to understand what’s really happened and what needs to be done about it. Republicans won’t tell it, so Democrats (starting with Joe Biden) must.

A half century ago, American’s wealthy helped finance the federal government mainly through their tax payments.

Tax rates on the wealthy were high. Under Republican president Dwight Eisenhower, they were over 90%. Even after all tax deductions, the wealthy typically paid half of their incomes in taxes.

Wealthy and income taxes – moron, that’s on income, not wealth. But:

The portion of GDP paid as tax is not at a low. In fact, it’s at a high. Therefore deficits – which are what lead to debt – is not caused by a lack of tax revenue. It’s caused by incontinent spending.

So here’s an idiot question

One of those signs of wisdom – or perhaps senescence – is when you know you’ve no clue and go ask someone else.

So, extracting carbon from the air. Or, CO2. Hmm, expensive, high energy consumption.

But CO2 dissolves in seawater, we know that. Any CO2 extracted from seawater will soon be replaced with more from the atmosphere.

So, might there be a clever chemistry which makes it cheaper to extract CO2 from seawater?

Or even, what if you were doing something else to seawater – desalination plant, mining for lithium, that sorta stuff – would that get you part of the way there and give you a headstart on that CO2 extraction?

Oh, Rilly?

The government says it’s unfair to taxpayers to pay now. But the simple fact is if prices rise by 10% and pay rises by 10% then on average profits will rise by 10% and so taxes will rise by 10%. That’s not rocket science, but it means inflation-matching pay rises fund themselves.

That’s another Nobel on the way to Ely then.

Then there’s this:

The government says paying people will create ‘inflationary expectations’ and more pay demands but the only thing that will do that is not paying now. People who settle for less than inflation will of course be back for more pay in the future. Paying in full now will prevent that.

OK, so more inflation is bad.

There are three consequences of that failure to pay in full. First, the wealthy save their extra money, and there is little or no economic stimulus to the economy as a result, which there would be if a pay rise was given instead.

But we should pay the pay rises to provide stimulus to the economy and therefore more inflation.


Also, this:

Andrew says:
February 1 2023 at 11:17 am
Can someone please give a plausible explanation of how increasing the pay of teachers, nurses, doctors, firemen, and other public sector workers, leads to inflation? Which prices are going to rise as a result, which would not otherwise have risen anyway?

Richard Murphy says:
February 1 2023 at 12:27 pm
As we both know, none will

Your comment now adapted into a tweet….


Tax is a price, right?

Now, whether this is true or not is another matter

Darktrace, the cybersecurity company, has lost a quarter of a billion pounds from its valuation after an aggressive US short-seller claimed the company engages in fraudulent accounting.

Quintessential Capital Management (QCM), a New York-based asset management firm, alleged that Darktrace engages in “channel stuffing” and other fraudulent practices designed to artificially inflate its sales figures.

So-called “channel stuffing” is when a company strikes fake sales contracts with commercial partners immediately before a deadline such as the end of the financial year. After the deadline passes, goods “sold” under the fake contract are quietly returned.

In a 70-page report published on Tuesday, QCM’s founder Gabriel Grego claimed that Darktrace was “shifting tomorrow’s revenues into today’s books”.

The problem for Darktrace here is that it is somewhat believable. For the accusations – they are just that for any lawyers reading – about Autonomy are that such accounting went on. And if Mike Lynch is involved then do such habits repeat?

Note what is being said here. Absolutely not that the two firms will share practices. Nor even that Autonomy did channel stuff. Only that folk out here might believe the Autonomy claim and then go on to believe the Darktrace one.

So it’s an easy short to make.

As an aside, I wrote a little stock market piece elsewhere saying that Darktrace lumbered under something of a cloud. That there was a certain belief that perhaps they shined up their revenues a bit too much. Not that they did, just that some might believe they did, this therefore explaining their low – for the reported revenue growth numbers – P/E ratio.

I got an email from a financial PR type insisting that this was absolutely not so etc. Which, as I pointed out to him, isn’t exactly a refutation of the claim that Darktrace thinks a lot about beliefs about its numbers. Because a PR email about a squib of a piece with a few hundred readers doesn’t, in fact, refute the idea that Darktrace worries about financial PR now, does it?

How excellent

Tougher benefit rules have boosted employment in the UK in the past 25 years but only at the expense of trapping workers in dead-end jobs, according to a leading thinktank.

The Institute for Fiscal Studies (IFS) said successive waves of welfare changes since the late 1990s had imposed more stringent conditions on those claiming jobless benefits and increased the incentives to find a job.

Yet its research also found that many of the jobs found were part-time, low paid and had scant chance of career progression.

So, increase the restrictions again then, no?

Which organs and when?

Massachusetts prisoners may get shorter sentences for organ donations
A new bill proposes that prisoners get at least two months off their sentences for donating bone marrow or organs

Two months seems pretty miserly for a heart for example. Or in that case are they allowed an extra two months on death row first?

There’s a reason you’re in school, Love

Ithink a lot of people think my generation don’t care about politics or aren’t interested. They underestimate how perceptive we are. We’re part of the world too. We sit in classrooms. We know that schools don’t have proper funding and that our teachers aren’t properly paid for the hard work they do.

Teachers should have better working conditions. They are teaching the next generation to move academically through the world, and they deserve to live and work comfortably.

My school feels different at the moment. Maybe it’s a result of my having moved into year 9, a step closer to GCSEs, or maybe it’s something that other young people are experiencing.

It’s been a lot colder in my classrooms, because the central heating is turned on less frequently due to bills going up. Leaks have appeared in some of our classroom ceilings. Students take good care of the school, but we can’t do repairs. There also seem to be fewer classroom materials. Maybe this is what happens when you go up a year, or maybe they cost too much?

Both we and you have identified that you know something between little and not enough. That’s why you’re in school, to have knowledge poured into you.

Thus your analysis of what might be wrong with the world, what could be done to rectify such errors, might be lacking a little. Possibly?

Not exactly, no

EPA vetoes Alaska mine to protect salmon in win for environmentalists
Move is a victory for the environment, economy and tribes of Alaska’s Bristol Bay region, and is ‘victory for science over politics’

Far more accurate to call it a triumph of politics over science…..