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Tim Worstall

Blimey!

Something of a rum do here.

By the numbers:

  • Approximately 45 million Americans were living in poverty in 2009.
  • 2009 saw the largest single year increase in the U.S. poverty rate since the U.S. government began calculating poverty figures back in 1959.
  • The U.S. poverty rate is now the third worst (above only Turkey and Mexico) among the developed nations tracked by the Organization for Economic Cooperation and Development.
  • According to the U.S. Department of Agriculture, on a year-over-year basis, household participation in the food stamp program has increased 20.28 percent.
  • The number of Americans on food stamps surpassed 41 million for the first time ever in June.
  • Approximately 50 million Americans could not afford to buy enough food to stay healthy at some point during the last year.
  • 1 out of every 6 Americans is now being served by at least one government anti-poverty program.
  • More than 50 million Americans are now on Medicaid, the U.S. government health care program designed principally to help the poor.
  • Nearly 10 million Americans now receive unemployment insurance, which is almost four times as many as were receiving it in 2007.
  • 1 out of every 5 children in the United States is now living in poverty.

    • (I\’ve taken out a couple of points as they\’re not relevant to my point).

    Now, as all fans of economic statistics know, the US poverty figures are calculated on the basis of market incomes plus direct cash transfers. They do not include benefits in kind (housing vouchers, health care or food stamps) nor the impact of the tax system (so they ignore the nation\’s largest anti-poverty cash handout, the EITC, equivalent to our tax credits).

    So, one and two are measures of how many people there would be in poverty if the government didn\’t try to aid those at risk of living in poverty.

    Three is very odd as it\’s using an entirely different measure of poverty, one that is in fact a measure of inequality, not poverty. The last is the same as the first point. That is a measure of how many children would be living in poverty if aid wasn\’t offered. It is not the number of people or children living in poverty after aid is given.

    The rest, well, they\’re a list of the things that the government does to alleviate poverty. Things which, as we\’ve noted, are not included when we estimate how much poverty there is to alleviate.

    But there\’s always someone who doesn\’t get it, right?

    That’s the problem of insufficient state spending

    What?

    That the US Government spends, in order, over $50 billion to provide food for the poor, provides anti-poverty assistance to one in six of the population, spends $400 billion providing health care for the poor, provides unemployment benefits to those out of work, all of which undoubtedly alleviate poverty, this is proof perfect that the state is not spending enough money?

    What?

    The existence of tax credits shows that we don\’t spend enough money on the poor in the UK? The existence of the NHS shows that we don\’t spend enough?

    Mindboggling.

    And now for the Marxist view

    Apparently this is a direct quote:

    monopoly produces competition, competition produces monopoly. Monopolists are made from competition; competitors become monopolists … monopoly can only maintain itself by continually entering into the struggle of competition

    Methinks Karl was having a bad day with the housemaid or the boils perhaps when he wrote that.

    And it leads one of the country\’s leading \”Marxist theoreticians\” to the conclustion that:

    So competition isn\’t the cure – it\’s the disease.

    If competition is the disease then monopoly must be the cure: a clear case of the cure being worse than the disease.

    Important nuclear safety failing!

    Serious safety problems have been exposed at a dockyard in Cumbria that makes nuclear submarines after an emergency exercise revealed \”confusion\” and \”extremely poor\” procedures, according to a report by government inspectors.

    Britain\’s biggest arms company, BAE Systems, is being forced to rerun the exercise to prove that it can cope with a serious nuclear submarine accident after a string of mistakes that could have put lives at risk had the incident been for real.

    A report into the exercise at Barrow dockyard in Cumbria this summer, obtained under the Freedom of Information Act, found that members of a rescue team were prevented from getting to the scene of an imagined reactor accident for 15 minutes because they had to fill in forms about radiation risks.

    No, really:

    But according to the Nuclear Installations Inspectorate (NII) report, there were numerous problems.

    • A \”protracted\” delay in sending in a team from Cumbria Fire and Rescue Service caused by \”briefing and paperwork\”.

    Health and safety regulations, making things more dangerous.

    Low technology handicrafts kill

    There really are things which we would very much rather do in large organised factories rather than having some William Morris Arts and Crafts movement trying to do them.

    An unprecedented outbreak of lead poisoning linked to a gold rush has killed at least 200 children in northern Nigeria this year, with a further 18,000 people affected.

    Announcing the figures, the UN said it had sent an emergency team to assess the full impact of the \”acute massive lead poisoning\” in Zamfara state, where seven villages have so far been confirmed as contaminated. In all cases, villagers had been grinding ore by hand to search for gold when they unwittingly freed lead particles also contained in the rock.

    Processing that sort of lead heavy ore isn\’t difficult. You end up with both gold and lead to make batteries from. But it does require capital, industrial amounts of it, and a whacking great big factory.

    It just isn\’t true that small is always beautiful.

    Get your popcorn orders in now!

    This is going to be fascinating to watch:

    Now Suffolk county council is taking an even more radical approach to public sector reform by proposing a \”virtual\” authority that outsources all but a handful of its services.

    The Tory-controlled county\’s \”new strategic direction\”, set for approval tomorrow, could see virtually every service outsourced to social enterprises or companies. The aim is to turn the authority from one which provides public services itself, to an \”enabling\” council, which only commissions them. The council hopes offloading services could shave 30% off its £1.1bn budget, as part of the government\’s drive to reduce the fiscal deficit.

    Although councils have outsourced chunks of their services before, these proposals are regarded by experts as the first time a local authority has considered not directly providing any services at all.

    Services would be offloaded in stages. While some \”early adopter\” services could be outsourced as early as this autumn, the rest would be divested in three phases from April 2011. Libraries, youth clubs, highway services, independent living centres, careers advice, children\’s centres, registrars, country parks and a records office are among the first services that could be divested.

    Ultimately only a few hundred people could remain directly employed by the council, primarily in contract management. At present, the council employs around 27,000 people, 15,000 of whom work in education, which is set to be taken away from local authority control as the government converts schools to academies and free schools. Many of the remaining 12,000 could face either redundancy or be transferred to a social enterprise or the private sector.

    I don\’t know whether this is going to work, you don\’t, the council doesn\’t and nor do the unions.

    Which, of course, is why they should go ahead and do this. Because if it does work, \”work\” here being defined as offering the same or better services for a 30% cut in the bill, then we\’ve just found out something hugely valuable. That we can in fact deliver these public services at a 30% saving in the bill.

    That 30% saving could be used to cut tax rates: it could be usde to provide more services. Which happens isn\’t the important point though. What is that important point is that we want to undertake the experiment to find out whether it actually works.

    A 30% increase in efficiency, in productivity? Who wouldn\’t want that?

    Well, OK, maybe the people being made 30% more efficient aren\’t going to be all that happy about it but then just as we don\’t and shouldn\’t run the market side of the economy for the benefit of companies but for consumers so we shouldn\’t be running the public services for the providers but for the consumers.

    And for the consumers the same or better at 30% off is a wondrous deal.

    Our Adam Smith lesson for the day

    Yes, he did favour maximum interest rates:

    In The Wealth of Nations, Adam Smith often condemned \”projectors\”, as speculators were called in his own time. For example, he favoured a legally-imposed maximum interest rate of 5 per cent at a time when the market rate was about 4 per cent. If the legal rate of interest went up to 8 per cent, he said, then more money would be lent to \”prodigals and projectors\”, who alone would be willing to pay that much. \”Sober people\”, he argued, would only pay rates that would allow them to make a profit from solid ventures. Without a maximum of about 5 per cent money would be thrown into the hands of people who \”were most likely to waste and destroy it\”. With a legal maximum \”the capital of the country is thus thrown into the hands in which it is most likely to be employed with advantage.\”

    We\’ve rather learnt that he was wrong though: for two reasons.

    The projectors and speculators are right often enough that the capital of the country is employed with advantage. It\’s the insight that the entire venture capital indutry is built upon. And we could certainly argue that the consumer surplus from Google alone was worth the internet stock bubble (have to argue quite hard, yes, but it\’s possible).

    But of much more importance to those who would set modern day usury laws: he\’s talking about real interest rates, not nominal. So you have to add inflation to his numbers.

    And even more importantl;y, look at the rubble around us. Was this caused by people borrowing at too high interest rates? I think the general feeling is that interest rates were too low for too long, isn\’t it?

    So the FT does publish letters then?

    Little lament for a vulnerable MP

    Published: September 22 2010 03:44 | Last updated: September 22 2010 03:44

    Messines, Portugal

    From Mr Tim Worstall.

    Sir, Tristram Hunt’s lament for the Britain that will be lost through the scrapping of the 50 smallest constituencies (Comment, September 6) would, to my highly biased and cynical mind, carry rather more weight if it hadn’t been penned by Tristram Hunt, the newly elected member for the 49th smallest constituency* in Britain. (* = using the Boundary Commission’s 2000 figures.)

    Tim Worstall,

    Absolutely damn right

    Via Dave, let\’s just be serious for a moment about climate change.

    As is usual around here, we\’ll start with the assumption that the IPCC is correct.

    So, what is it that we need to do? Tear down the current structure of society? Rip up everything we\’ve already built and start again?

    Nope.

    \"\"

    We\’re going to be replacing all of our extant infrastructure over the next 50 years anyway.

    All we really want to do is make sure that what it\’s replaced with is low carbon.

    Which means Nordhaus is right and Stern wrong. Low carbon taxes now but with the believable promise that they will be high in the future.

    Fortunately, I made this argument in the upcoming book without having seen this graph. Whew.

    Britain\’s Broken Economy

    That\’s the new e-book from a left think tank. It certainly opens in fine form:

    Labour made the mistake of buying the snake oil of neo-classical
    economics. It must now discard it, and develop ideas for the
    economy that are both practical and humane – based on the
    principles of environmentally sustainable wealth creation,
    durability, cultural inventiveness, equality and human flourishing.

    We\’re to abandon the entirety of neo-classical economics are we? The whole marginalist revolution? Everything? Marshall, Pigou, the lot?

    I have a very strong feeling that they have overdosed on the rhetoric there and actually mean \”neo-liberal\”. Because to throw out neo-classical economics is simply insane.

    Nowhere is this problem more acute
    than in the realm of political economy, where the discrediting of neoclassical
    economics has left an intellectual void in policy making.

    Hmm, no, I think they do actually mean it though. Weirdos or what?

    Strategically, those who had fought a
    long guerrilla war against neo-classical economics and conservative
    politics went into the crisis in a weak position. The belief in the
    primacy of markets, the virtues of deregulated finance and the
    malign effects of government was deeply entrenched in finance
    ministries, central banks, business, the media and academia.

    They\’re certainly using neo-classical economics to mean something very different from what everyone else uses it to mean. Neo-classicism is, more than anything else, a method of analysis, one that very few economists indeed would want to abandon.

    Unlike the neo-classical
    movement, which in the 1970s had a coherent alternative to
    Keynesianism to offer – after writing, thinking and arguing their
    case during the three decades since 1945 – the left’s intellectual
    wellspring was in danger of drying up.

    Keynes being one of the people who used that very method of analysis to come to his conclusions.

    To put this another way perhaps. Keynes does have very different ideas about what to do for the macro economy when at the zero interest bound than the neo-classical economists do. But that\’s about the only place that he does.

    The great strength
    of Keynes in the 1930s was that he was able to dismantle the
    classical economic model and prove there was a better way.

    Eh? Now we\’re bouncing back to the classicals? Malthus, Smith, Hume and Ricardo?

    Market fundamentalism – with its belief in self-regulating markets
    and a minimal state, and its narrow view of human beings as
    rational economic actors – may be fantasy.

    That description of it is certainly a fantasy. About as far as a market fundamentalist is willing to go is that when trying to act in the economy people act as rationally as they can. They prefer, just as an example, higher pay for less work rather than more work for less pay.

    No one at all is saying that all human beings act rationally all the time. We\’ve asylums and the Labour Party to show that.

    Following the collapse of manufacturing industry in the
    1980s,

    Erm, what collapse was that then? Manufacturing output at the end of the 80s was higher than it was at the beginning of the 80s.

    They borrowed to compensate for wages that were increasingly
    falling behind productivity increases.

    Erm, what does that actually mean? So wages fall behind productivity increases. So what? Why should that mean an increase in borrowing?

    Wages for most of the population have been falling behind the
    growth in productivity, and at an accelerating rate (see Figure 2).
    Between 1980 and 2007, real wages rose by an annual average of
    1.6 per cent, while economic capacity grew by 1.9 per cent.

    Yes, but so what?

    I have a feeling that this is included simply because they couldn\’t find any other measure that wages had fallen behind. Have real wages declined? Nope. Fallen behind inflation? Nope. Have the bottom 10% lost real wages? By their own figures, nope (they\’ve risen by 20% and note that almost no one in htat bottom decile is actually working and getting wages anyway).

    At the heart of the inequality trend is a thirty-year-long squeeze
    on people’s wages. The share of the nation’s output going to wageearners
    peaked at 65 per cent in 1975, but has been in freefall ever
    since. In 2007 it reached as little as 53 per cent (see Figure 1). In
    contrast, the share of output taken in profits in that year had
    reached a near post-war peak.

    Yes, we know these figures. But perhaps it was the peak that was the problem, not the current level? 1975 wasn\’t really all that great a year for the British economy now, was it? And the great question of those years was \”Where the fuck has all the investment gone?\”

    Which, if capital ain\’t getting sufficient return to make it worth investing, means that in order to get more capital invested we might want to increase the returns to capital.

    Only a thought mind…..

    Supporters of this Thatcherite model claimed it would boost
    business investment and productivity. All sections of society
    would benefit. But this has not been the case, since little of the
    profit has been invested in the productive economy.

    Ooooh, nice trick! That word \”productive\” there means \”what we approve of\” rather than investment as a whole.

    In 2007,
    banks invested some £50 billion in manufacturing. In the same
    year they invested close to £800 billion in a variety of complex
    financial products.

    Sigh. As we all know, the Anglo Saxon model doesn\’t use banks to invest in companies. It uses markets. Equity, bond and commercial paper markets. You know, those £800 billion of complex financial products?

    The decline of British manufacturing has stripped out nearly 5
    million jobs from the economy, while the rise of finance has added
    only a few hundred thousand.

    As above, there hasn\’t actually been a decline in British manufacturing. There\’s been a decline in British manufacturing employment, a very different thing. Which has come about as a result of the increases in productivity already mentioned.

    In the years after 2000, real
    public expenditure increased by nearly 50 per cent.

    Gosh, that\’s interesting. And there they are telling us that not increasing it for the next few years will cause a crisis.

    In London and the South, the state and para-state
    accounts for no more than 38 to 44 per cent of employment growth
    between 1998 and 2007. In the North East and West Midlands, it is
    as high as 79 per cent and 153 per cent.

    Wonder if there\’s a connection between that and this:

    And yet despite this, the private sector has still failed to
    create sufficient new jobs across large parts of Britain.

    For those government jobs are at national, not local, pay rates, thus removing the price advantage that the depressed areas have.

    Nor is there evidence
    that countries with more deregulated labour markets have lower
    levels of unemployment,

    Err, yes there is actually. Denmark has an almost entirely \”unregulated\” labour market and low levels of unemployment. Spain has high levels of such regulation and high unemployment. You\’re allowed your own opinions you know but not your own facts.

    The housing crisis is another consequence of market
    fundamentalism,

    Nope…we most certainly don\’t have anything like market fundamentalism in the land market, that lack being the root cause of the price of housing. Unclog the planning system and houses will fall in price. More, not less, market needed here.

    This is only part of the story. In 2007/08, total pensions paid out
    amounted to approximately £122bn. And during this period, apart
    from the £61.5bn cost of the state pension itself, a further £25
    billion was paid by the state to its former employees, and about £38
    billion was given in subsidy to private and occupational pension
    funds.
    This means that pension provision cost the state £125 billion in
    that year – and yet the total amount of pensions paid from all
    sources, including private sector funds, was just £122 billion. In
    other words, every single pension payment made in 2007/08 was
    made at direct cost to the state. The private sector did not bear any
    of the burden in that year of paying pensions to members of private
    sector pension funds.

    Ahahahahaha……the £38 billion is the subsidy to future pensions, to money being saved now to gain a pension in the future.

    Twats.

    Around 60 per cent of pension investments are in corporate
    securities. 99 per cent of this kind of investment is made in second
    hand-assets already in issue. The issuing companies receive no
    direct benefit from their purchase. In other words, no new
    investment or employment opportunities are created. In economic
    terms these are savings activities and not investment activities.

    Ah, yes, R. Murphy again. Yes, he is one of the writers of this report. He still can\’t get his head around the idea that the secondary market allows people to cash out their savings. Like, for example, when they retire and buy an annuity, or die and have to pay inheritance tax.

    Indeed market fundamentalism is incapable of planning
    for the future needs of society. Markets pursue short-term profits,
    and companies chase competitive advantage; and the consequences
    of this are a failure of longer-term investment and the loss of wealth
    generation for a common prosperity

    That\’s certainly new and interesting information. We\’ve got politicians who don\’t look beyond the next election and companies like Shell and BP with 50 year planning horizons. Amazing how much worse markets are at that long term planning thing really.

    As anyone who has studied history – or simply looked around –
    would know, opening your country up to the forces of global trade is
    not a good recipe for economic development.

    Yeah, quite, the autarky of North Korea and Cuba has worked so much better, hasn\’t it?

    Similarly, China and India, which still rely on central planning,
    and are among the most protected economies in the world, have
    done well in this phase of globalisation.

    Very carefully avoiding the fact that they\’ve done well since, respectively, 1987 and 1991, when they started to relax that central planning.

    Incentivising union membership through tax breaks (for example a
    lower rate of corporation tax for unionised firms) might help break
    this logjam.

    Eh?

    Greater democratic control of the credit system would allow
    industries designated as being of strategic importance to borrow at
    rock-bottom interest rates (for example, renewable energy firms
    and green technology start-ups).

    Oh, frabjous day! Can you not just see the orgy of political bribery that would follow lower interest rates for politically approved companies?

    The housing market has failed, and we should consider a nonprofit
    public clearing house, to which sellers could sell their homes
    without waiting for a chain of transactions to be in place.

    Woweee!

    So, how do you price them? And anyone want to bet that those who know the local councillor in charge of the pricing committee will get a better price?

    Lastly, the most effective fiscal-policy means of tackling housing
    booms and busts would be an annual land value tax that would
    replace council tax and the system of business rates.

    I guess there has to be one good idea in something of this length….to be followed by this tripe:

    In addition, consideration could be given to promoting
    contributions made by employers in kind, by issue of new shares in
    their companies to their pension funds.

    No, absolutely not. You do not want a company pension fund to own shares in the company. We\’re trying to diversify risk, remember, not concentrate it?

    Tax relief on pensions could only be secured if
    a fund invests proactively to create new capital assets,
    infrastructure, skills and jobs.

    But if there\’s no pension investment in the secondary market where can I sell my pension assets when I want to retire and convert capital to an income?

    the truth is that the economy suffers
    from a dearth of capital investment, as vast financial flows chase
    unproductive short-term profit. Our economy is anaemic because it
    lacks capital.

    So, as above, they want to increase the labour share of the economy, reduce the share going to capital and this will increase the amount of capital invested will it?

    Yes, they\’re numpties.

    Steve Cram, I\’m a socialist, me

    So he\’s said to say:

    Steve Cram: I\’m a socialist so I don\’t mind taxes

    Well, what he actually says is:

    Strangely, I don\’t mind paying my taxes because, being a bit of a socialist, I can see the value of the services that they go towards.

    That\’s hardly socialist: you could run anyone on that platform, from me to Mother Theresa or Joe Stalin. The argument is about which services are worth the tax that\’s being paid for them……

    There\’s also this:

    Getting both my kids through university – Marcus is attending Fettes in Edinburgh and Josie is at Leeds University.

    Fettes? The Scottish Eton?

    I think being in control of your own affairs is very important because if you make a bad judgement call, then the onus is on you.

    Personal responsibility?

    Odd sort of socialism really.

    Yes but no but yes St. Vince

    It depends upon which of the two meanings he, umm, means here.

    His fetish for demonising bankers and executives of any type is surpassed only by his attack on capitalism itself. \”Capitalism takes no prisoners and kills competition where it can,\” Cable plans to say today. Any sane business secretary would know capitalism encourages competition unlike the monopoly provision of goods and services favoured by state controlled economies. The market allocates resources to compete in activities enjoying unusually high returns, which brings prices down and pushes up value for consumers.

    If Vince means that capitalists will happily kill off whatever competition they can then he\’s right: which is as Damian Reece points out, why markets are such lovely things. They enable both the maintenance of what competition there is and the creation of more competition to counteract that capitalist desire to close it down.

    But Reece is wrong to say that capitalism and markets are the same thing: they\’re very much not. As we\’ve pointed out around here many times, capitalism is a description of a method of ownership, markets of a method of exchange.

    And between the two markets are vastly more important than capitalism or capitalists. For it\’s the markets which encourage the competition, not the capitalism.

    Here it\’s mostly a semantic argument: but in the larger world it\’s a very important distinction to make. Capitalism and capitalists will, where they can, shut down competition to the detriment of the consumer. Which is why we\’re so enamoured of markets which create and maintain the competition to keep the capitalists in line.

    Compass doesn\’t do logic you know

    Their report about what we should all be doing.

    What went wrong:

    Although the government suggests that the state
    is the problem, most economists would support the
    view that the real cause of the recession is the drying
    up of liquidity in financial markets.

    So, what should we do about this?

    Seventh, introduce a financial transactions tax
    (FTT) at a rate of 0.1%, applicable to all sterling
    transactions. Minimally, this would raise a
    further £4.2 billion – maximally, it would raise
    £34 billion, or about 2.5% of UK GDP.70

    Yes, in CompassWorld the solution to economic woes caused by a reduction in liquidity is to tax liquidity so that we get less of it.

    So, who thinks that the peeps at Compass would recognise logic if it were to sidle up to them in a pub and offer them a pint? Or leapt up and bit them on the bum?

    And that\’s without their ideas about raising income tax rates to 75% by uncapping national insurance.

    Bozos…..

    Why we don\’t let the English teachers do the economics

    Mainstream accounts of poverty deliberately avoid a historical understanding of how the poor came to be poor,

    This is to get the question entirely bass ackwards.

    Poverty (unless you get a truly moronic leader like Mugabe or Castro) isn\’t something which is created. It just is.

    From the Roman Empire to 1700 average global GDP per capita wiggled around between $400 and $800. We were in a Malthusian economy.

    From 1700 to today we\’ve gone from that figure to about $8,000 a head. And, as simple observation of the world will show you, that rise is rather concentrated. At first Western Europe, North America, but as other regions of the world have adopted the usual policies (some sort of security of property, some measure of economic freedom), from Hong Kong, Singapore and South Korea to, at slightly lower levels Chile and Eastern Europe to at even lower levels but coming up fast places like China.

    The central economic question is not how people came to be poor, not how poverty is created, for it isn\’t. It\’s how wealth is created, that wondrous process which pre-1700 really didn\’t happen to anybody (no, the elites, while fabulously wealthy in terms of the portion of wealth they controlled were, by our standards today, dirt poor) and now happens to any country which cares to take up the process which is the interesting and important question.

    Chris Huhne, yes, he\’s a twat

    Sigh.

    The Energy Secretary backed plans to increase environmental levies by £15 billion to free hundreds of thousands of people from income tax.

    He is already drawing up proposals for the proportion of government revenue raised by environmental taxes to jump from 7.7 per cent to 10 per cent within five years, from £35 billion annually to around £50 billion.

    He\’s missing the point of environmental (for which, in reality, read climate change) taxes.

    It isn\’t that greenery means that such taxes should be higher. Rather, greenery says that there is an optimal level of such taxes.

    We even know what that optimal level is, Lord Stern very kindly told us all. $80 per tonne CO2-e.

    The UK\’s emissions are of the order of 600 million tonnes a year (you can fiddle around a bit including emissions embedded in imports to make it higher, but when you then deduct emissions in exports and…well, it\’s a good enough figure to be working with).

    600 million tonnes x $80 gives us $48 billion or £32 billion pounds.

    The the general level of green taxes is already too high. We have already done what we have been urged to do, make the polluter pay the costs of their pollution. We are, in fact, done with climate change.

    For remember, the entire structure of Pigou Taxes relies not on \”higher\” taxation but on there being a \”correct\” level of taxation. And no, contrary to what many Statists say, \”correct\” is not a synonym for \”higher\”.

    Mr. Murphy and the magic money tree

    Richard shows some tables from the HMRC report on the tax gap. They show that very large numbers of peeps aren\’t filling in their forms correctly.

    Overall HM Revenue & Customs say 30% of returns have errors. Overall 12% of liabilities are under-reported as a resulted. For the self employed 45% error rates arise. And remember – these ratios ignore almost entirely the true shadow economy – those who are entirely outside the self assessment system altogether and who quite ludicrously HM Revenue & Customs pretend basically do not exist.

    This data does not say there is a marginal problem with tax compliance. This data says there is a massive problem with tax compliance.

    OK, that\’s very interesting indeed.

    What should we do about it?

    Only more resources can tackle this problem.

    And the resources required are not a limited range of specialists. The resources required are large numbers – tens of thousands – of qualified tax officials working in tax offices throughout the UK to collect the tax that is owing. I have estimated that £15 to £20 billion a  year could be collected if this was done and appropriate legislation was put in place.

    That\’s very interesting indeed actually.

    For there are a couple of tables in that HMRC report which Richard doesn\’t show us. 8.1 for example, which tells us of the total identified amount lost through individuals cocking up their self-assessment. £3.1 billion. 8.5, the amount lost to employers screwing up: £1.1 billion.

    You know, I think Richard\’s found the magic money tree. Just by hiring more taxmen we can collect £20 billion in tax when only £4.2 billion is actually due.

    Isn\’t that wonderful?

    Quite Richard, quite

    In possibly the most lacklustre speech ever made by a minister to a party conference Danny Alexander has announced HM Revenue & Customs is to get £900 billion of resources over four yeasr to tackle tax avoidance and evasion.

    Except it isn’t.

    No, you\’re quite right, no one is going to give HMRC £ 900 billion over the next four years.

    Hmmm

    Tesco is to start selling Viagra over the counter at half price.

    The pills were only available on prescription – or from dubious internet sources – until Boots began selling direct to customers last year, at £55 for four.

    But Tesco will offer fierce competition by selling Viagra at £52 for eight of the blue tablets.

    Not needed quite yet, thank you very much, but I understand that the patent expires in 2013.

    I wonder what the price for generic Viagra will be when it\’s actually legal to sell generic Viagra?

    Will the internet be able to cope with the volume of spam?

    How excellent!

    Bank of England: Banks making \’excess\’ profits from loans
    High street banks are increasing charges and fees on new loans by “substantially” more than the rise in their own costs, the Bank of England says.

    For, as we all know, a few years back they weren\’t charging enough: risk was mispriced. That\’s why half of them went bust.

    That they\’re now charging rational prices is only to the good.