Tim Worstall

That Pesky Gender Pay Gap

The G:

But this week, TUC research found the difference between men and women\’s pay still more than trebles once women reach their 30s, prompting the accusation that bosses enforce a "motherhood penalty".

Eh, it\’s the evil capitalist bastards enforcing a penalty?

How about it\’s people taking time out of the labour force, reducing their human capital, increasing the cost of employing them by demanding flexible working, part time working and career breaks, that causes the drop in pay?

Ooooh, Dear.

Mark Braund.

allowing privately owned banks to create money at will

I may well be wrong here but I take it as a basic guide to the opinions of others that when people start complaining about fractional reserve banking that rants on the Rosicrucians and the Bilderbergers aren\’t far behind.

It\’s not quite Grey Aliens and the Lizardoids territory, milder than that, but as a rule of thumb it\’s not failed me yet.

Readers Elsewhere

So, is this Our Kendrick then?

Dear Economist,
A single Milky Way costs 20p in my local corner shop. A twin pack costs 47p. I’ve made a habit of checking the prices in other shops and a twin pack invariably costs more than two singles. What could be the cause of this apparent madness?
The madness in pricing, that is, not the madness of a twenty-something compulsively checking the price of children’s sweets.
Kendrick Curtis, via e-mail


The swap spreads on Lehman Brothers rocketed to 465 yesterday, mirroring the moves in Bear Stearns debt days before. Fannie Mae and Freddie Mac – the venerable agencies created by Roosevelt that underpin 60pc of the $11 trillion mortgage market – had a heart attack on Monday. Their bonds were in free-fall, threatening to set off another cascade of bank writedowns.

Monday mornin\’s gonna be interesting. 11.30, 12 am UK time. As the US debt markets wake up.

Two Stories

Bear Sterns

Millions of British households face soaring mortgage rates and tumbling house prices after the global financial crisis triggered the near-collapse of one of the world\’s biggest banks.


MPs are demanding large pay rises to compensate for having their much-criticised system of perks and allowances scrapped, it emerged last night.

Put that way it ain\’t gonna happen, is it?

One thing that does amuse: why, when the discussion is held about what pay MPs should get, does everyone assume that it should be what, or more than, they get now? Why is a pay cut never being discussed?

They are, after all, since they passed the Lisbon Treaty, simply a provinciail council, are they not?

Bear Sterns




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The Federal Reserve responded swiftly to pleas from Bear Stearns that its coffers had "significantly deteriorated" within a 24-hour period. Central bankers backed an arrangement to bolster the company, and stood ready to provide extra resources to combat a credit crisis that now threatens one of America\’s biggest financial institutions.

Bear Stearns, the nation\’s fifth-largest investment bank, made its fortune dealing in opaque mortgage-backed securities — a strategy that might be its undoing amid the worst housing slump in a quarter century. The bank has racked up $2.75 billion in write-downs since last year, and faced a possible collapse without some kind of lifeline.

Bear Stearns lost half of its value within 30 minutes of the market open, before clawing back a bit to be down 41 percent, or $23.51, at $33.49 by midday. The news rattled investors, pushing the Dow Jones industrial average down about 150 points.


Excellent Question of the Day

Shtupping the secretary was no barrier to Paddy Ashdown becoming de facto ruler of Bosnia and now Afghanistan; a similar offence cost John Prescott little more than widespread ribaldry about cocktail sausages.

Steve ‘Shagger’ Norris and ‘Bonking’ Boris Johnson – hey, just what is it about Tory London mayor wannabes? – content themselves with knocking off political journos, councillors and local party activists.

In an era when it is possible to be president of France and still get off with a supermodel, just why do our leaders set their sights so low?

Umm, Gordo?

Gordon Brown re-launched a joint proposal with French President Nicolas Sarkozy for reduced VAT rates on eco-friendly appliances but it failed to gain widespread support at the leaders’ spring council meeting in Brussels.

There\’s a much simpler solution. One you can do on your own (for you can raise VAT rates as you like, it\’s only cutting hem you must have permission for).

Raise the current 7.5% VAT rate for domestic fuel and power consumption to the full 17.5% rate.

After all, if the aim is to cut consumption, which it is, this would be a good green tax, wouldn\’t it?

In Which I Agree With Karl Marx

Bit of a shocker, I know, but this from the old boy I agree with absolutely:

Economy of time, to this all economy ultimately reduces itself.

Right, so that\’s the Slow Food movement, growing your own veg and recycling, along with anything else which refuses to consider the value of your time, dealt with.

Polly on Poverty

Most voters have a profound sense of justice

Indeed they do Polly, indeed they do.

But the word "poverty" plays badly with focus groups, even with the poor themselves: people are unconvinced it exists outside Africa. "Redistribution" does badly too. Mention the word benefit and people add "scrounger" on the end – often encouraged by Labour ministers who should know better. As a result, Labour never talks up its children\’s programme except to the poverty charities, as the two Eds did yesterday.

And therein lies the problem with your plans. Poverty, the general public thinks, does not exist in the UK as a general rule. The shoeless, foodless child will get any of us opening our wallets, whether directly or through the tax system. But when people look at the world around them they don\’t see that. Your definition of poverty (less than 60% of median income, or, if you prefer, well into the top 20% of global incomes) strikes most as not being poverty but simply some having more than others. And to the Great British Public this isn\’t the same thing, nor is it a matter of great concern.

Which is why, as younote, it doesn\’t play well with the public.

As for child poverty, do not underestimate the scale of Labour\’s task. As the median income moves up 2% a year and benefits for parents are not up-rated with earnings, the target keeps getting harder to reach. It means running fast up a down escalator.

And when people realise that then your project will be stone dead. For you\’ve let the cat out of the bag. This isn\’t investment, a one off payment to solve a problem, it\’s a committment to steadily increasing spending forever. Higher taxes, rising steadily, forever, to "solve" something which, as you point out, most don\’t care about. Perhaps that\’s why the politicians don\’t talk about it, eh?

How to Get a High Traffic Blog

Ashley Youmans\’ website address was receiving about 1m page impressions an hour yesterday morning,

Charge the Governor of New York for sex, obviously.

A properly monetized web page should get somewhere north of $10 per CPM so being found out is more profitable per hour than doing the deed as well.

Iain Dale\’s Right You Know

He then used a barrage of statistics to "prove" that Britain has one of the lowest rates of business taxation in the world, when nothing could be further from the truth.

The actual headline rate of corporation tax is really pretty irrelevant. There\’s so much fiddling going on with what is actually a profit for tax purposes that just looking at it being 28%, or 30%, tells you almost nothing.

Have a look here. Corporate taxes as a percentage of the total tax take.

Rank   Countries  Amount  (top to bottom)   
#1   Luxembourg: u20.5%   
#2   Norway: u18.9%   
#3   Australia: u16.8%   
#4   Ireland: u13.1%   
#5   Korea, South: u12.8%   
#6   Japan: u12.2%   
#7   New Zealand: u12.1%   
#8   Czech Republic: u11.8%   
#9   Greece: u10.4%   
#10   Canada: u10.1%   
#11   Finland: u9.3%   
#12   Spain: u9.1%   
#13   Switzerland: u8.8%   
#14   Netherlands: u8.8%   
#15   Slovakia: u8.2%   
#16   United Kingdom: u8.1%   
#17   Belgium: u7.6%   
#18   Italy: u7.6%   
#19   Turkey: u7.1%   
#20   United States: u6.7%   
#21   France: u6.6%   
#22   Poland: u6.3%   
#23   Hungary: u6.2%   
#24   Denmark: u5.8%   
#25   Austria: u5.1%   
#26   Sweden: u4.8%   
#27   Iceland: u3%   
#28   Germany: u2.9%   
  Weighted average: u9.3%    

You\’ll note that, for example, Ireland, which has a much lower headline rate, collects vastly more of its budget from taxing corporations. You\’ll also note that Germany, which has a much higher corporate profits tax rate, collects almost nothing from such corporations.

As I say, the rate is almost irrelevant unless you take account of how you\’re defining profit for tax purposes in the first place.

One thing though: the tax take from corporates in the UK is just under the weighted average. That corporations don\’t bear the economic burden of a tax is another matter, but by international comparisons the UK is in the middle of the pack.

The National Trust

Well, yes:

The report says land and its natural resources were undervalued, underfunded and needed better care……The trust, which manages 250,000 hectares of open countryside and 700 miles of coastline, says it had drawn on its experience as Britain\’s biggest landowner after the Government in writing its Nature\’s Capital report.

When the largest landowner in hte country is a charitable trust, one which does not manage land for its economic value, then, yes, it\’s pretty clear that here will be a misvaluation of land by the market.

Anyone Surprised?

Ante-natal classes are failing to prepare women for the painful reality of childbirth, a study claims today.

New mothers are often shocked at the "intensity" of the agony they experience in labour, researchers from Newcastle University found.

"Unrealistic" expectations also led many to believe that they wouldn\’t need pain relief during childbirth.

We\’ve had decades of hippie dippy propaganda about "natural childbirth", about how it is the most rewarding off experiences, about how the use of pain relief somehow detracts from the experience.

In truth, it might be some of those things, but it\’s also damned painful. The blame clearly lies with those running the classes, their being a tad unrealistic in what they tell people.