Economics

Exports of crude from the strait of Hormuz have largely returned to levels seen before the outbreak of the Iran war, as oil producers and the shipping industry have found alternative ways of transporting crucial fuel out of the Middle East.

Not something I would have expected. Yes, sure, there will be workarounds, markets do that. But back to normal? Impresses even me that flexibility of markets.

Refined products not so much as yet. And I’d assume there are still considerable problems with LNG. But crude back to normal? Ho well…..

The government has stepped up work on new laws to stop ticket touts fleecing fans, as the prime minister came under pressure from artists including the drummer from the Smiths, one of his favourite bands.

Keir Starmer said last year that the government would “stop fans from being ripped off” by outlawing the for-profit resale of tickets on sites such as Viagogo and StubHub, a pledge Labour first made in its 2024 election manifesto.

Look how hard it is for govt to stamp out an extant market. And I predict that, whatever they do, the market will continue to exist.

Labour is considering raising capital gains tax (CGT) to fund a £20bn handout for the lowest earners.
The Prime Minister and Chancellor are understood to be reviewing proposals to raise CGT to as high as 45pc to increase the income tax personal allowance.
The idea is laid out in a Budget submission from the Labour donor Dale Vince, warning that wealth is being “taxed more lightly than work”.
Equalising CGT with income tax would generate £14bn towards the giveaway, the submission claims.

The standard estimate – best guess, you know, guesstimate – is that the peak of the Laffer for CGT is 18%. Therefore a 45% rate isn’t going to fund anything, is it?

In May, Louise Haigh, the Prime Minister’s second-in-command, called for CGT to be brought closer in line with income tax, saying this would “shift the tax burden away from punishing work and towards unproductive capital accumulation”.

Investing in stuff is now unproductive capital accumulation? Jeebus, we’re screwed, right? But then put a convicted fraudster into government and what happens next, eh?

And there’s this little joy too:

His £14bn figure is based on a previous report from think tank CenTax, which called for a wider overhaul of the duty to mitigate avoidance. This included both an additional rate and a higher rate of 45pc and 40pc, as is the case for income tax, as well as scrapping the rule which says CGT bills are wiped on death.

We shouldn’t take recommendations from them because they’re cunts. They are in fact insisting that both inheritance tax and also capital gains tax should be paid on each and every asset. You know, cunts.

The average Londoner pays £5,000 more in tax than the services they receive. The south-east contributes £2,000 a head, and the east of England breaks even. The rest of England, like the three other nations, is also a recipient of money from the capital region.

London wages are indeed higher. This gets caught in the estimates of inequality. But the costs of living in London are also higher. Not just rent, but a pint and so on. We do not have equal prices across geography. These higher costs are not included in estimates of inequality.

That is, we might be measuring inequality of income but we’re not measuring inequality of consumption – and it’s of consumption that actually matters to how people live their lives.

Add into this that London stands out, much much more, than the capital or other richer regions of other countries does. And we’ve our explanation for why the UK has, apparently, higher inequality than other countries It’s geographic, yes, and a result of bad measurement.

This helps explain why French people have great expectations of the state and accept some of the highest levels of taxation, income redistribution and public spending as a proportion of economic output of any major economy. It also helps explain why France’s debt-to-GDP ratio of 118% is among the highest and fastest rising in Europe.

If they’re all paying high taxes then why should the debt be large? Unless the insistence is that no amount of taxation will ever be enough for the spending desires of the politiians and therefore large government simply will mean large debt?

“Look, there’s nothing magic about that $40tn number,” the US Treasury secretary, Scott Bessent, told CNBC insouciantly last week, as the country’s debt mountain surpassed another bleak record.

Yet Bessent’s decision to intervene in government bond markets in an effort to combat soaring yields belied his studied calm in TV interviews – and reignited fears the US may be on the road to a debt crisis.

As The Sage tells us, the US govt issues its own money so it can just print to pay the interest bill.

That inflation could then get away from them, pushing up the interest bill into a spiral, is something unthought of in The Sage’s mind, of course.

The average price of a home coming up for sale in Britain’s richest borough has dropped by almost £100,000 in a month as fierce competition among sellers in many areas prompts some to slash their price expectations, data shows.

Recall Stevenson’s insistence that only with a big wealth tax will we be able to moderate asset prices. For we are so unequal that we’ll never be abole to raise interest rates.

And yet, here we are…..

Trump, ever the embellisher, has upped the ante from socialism to communism. And, as with the red-baiting of the past 40 years, he hardly cares about the gulf separating the economic system of communism and the social democratic politics that progressive candidates espouse. Trump hurls “communist” indiscriminately and hopes it’ll stick.

Like lefties distinguish between pro-consumer advocacy of more markets and pro-capitalist advocacy of more corporate power. Right?

John Healey, the Chancellor, has warned supermarkets that he will not allow them to take the public “for a ride” as a result of the Middle East crisis.
Writing for The Telegraph, Mr Healey said he would be watching closely for “any suggestion” that customers are being ripped off, either when shopping for essential groceries or when filling up their car at the petrol pump.
He promised to get tough on “price-gouging” at the pump or the till, cautioning that regulators “have the powers to clamp down on it if it happens”.

Our remarkable bureaucracy, those Rolls Royce minds, have taken unto themselves the power to insist upon what prices should be in the shops.

This will not work out well.

Unequal capitalist societies – and many governments, for that matter – survive on the premise that certain things are inevitable. Millions of people in a rich nation will always struggle to afford to eat regular meals, even after they have worked all day, the story goes. Some people just have to sleep on the streets, while others get spare mansions. When you’re old or sick, unless you have huge wads of cash, it’s natural you might not have help to get washed and dressed.

This is reality.

All of these were worse problems before capitalism. All of them are lesser problems under capitalism. So it’s not capitalism causing these problems, is it?

You can’t argue with Stevenson’s statements that living standards are falling and people are struggling to get by, nor can you doubt the sincerity of his beliefs. Undeniably, wealth is concentrated in the hands of the super-rich, and home ownership is becoming a pipe dream in many parts of the country.

Living standards are not falling, welath concentration is roughly as it has been these past few decades, house prices are moderating, not rising.

It’s not just Gazza’s plans, it’s his knowledge of reality that’s a problem.

Trump has run out of cards to play in the midterm elections, which is why he’s now talking about the “communist menace”.

He can’t talk about the economy because prices continue to rise faster than wages, which means most Americans are getting poorer.

That’s Robert Reich, that is.

Real wages (OK, median weekly earnings) fell 10% in hte first two years of the Biden admin and have risen, wgat, 5% since then?

So, wages are doing better than inflation.

Bobby Reich, always so accurate in his economics, eh?

Of course, this is written from the press release, the full report is not yet published. But you would hope that the engineers can do better than this:

Its report found that almost half of disabled professionals have turned down job opportunities because of transport issues, leaving about 2.8 million people effectively locked out of the workforce, in part because of transport barriers.

Based on the Office for National Statistics’ estimate of an average worker’s annual contribution to economic output of about £63,000, IMechE said helping all of them into a job could add £176.4bn a year to the national economy.

They’ve gone from “a job” to “any job” in one single leap. Their estimate is based upon everyone who has not taken a job not having taken any job.

As I say, the report’s not up yet. So that’ll just have to stand as the analysis – it’s fuckin’ awful analysis there by the engineers.

Andy Burnham promised to ease the cost of living if he becomes prime minister in his first interview since returning to parliament.

The Makerfield MP told LBC that if he became prime minister later this month, as expected, he would look at reducing business rates for some high street businesses,

Rates are incident upon landlords. Reduce them and rents go up. Why does Our Andy want to benefit landlords?

Broadly speaking, the right of the party sees the left as too hopeful about how much can be done to make Britain more equal, while the left sees the right as not hopeful enough.

The one single measure – equaliddee – does rather miss the joy and complexity of life, no? Absolute standards of living say? Liberty? Simple joy itsef?

Millennials – those born between the early 1980s and mid-1990s – are the first generation not to have enjoyed higher disposable incomes than previous generations, according to the thinktank. The researchers added that this setback was partly driven by millennials’ careers kicking off at around the time of the 2008 financial crisis, and the long stagnation in real wage growth that has taken place ever since.

However, a preview of a report due on Thursday show the Resolution Foundation’s latest numbers suggest that real weekly pay at age 24 of those born in the late 1990s was 12% higher than for cohorts born in the late 1980s.

At the age of 24, those born in the early 2000s are also earning more than any other generation going back to those born in the 1950s, according to the study.

I don’t in fact, believe the numbers anyway. The vast expansion in higher education hits exactly these groups – so, of course, earning is delayed.

But, if we go along an accept the usual explanation. Turns ouit it’s not in fact the death throes of late stage capitalism, it’s the one time effects of one of those little burps in capitalism….

Willy Hutton asks the question:

So, is Andy Burnham’s credo of business-friendly socialism a contradiction in terms –

No. What it is is fascism.

Note this is different from spiffy uniforms and invading Poland. The fascist economy was one in which capitalists, business, were nominally independent as long as they did what government told it. Which is what Willy and Andy are proposing here.

So, it’s fascism.

Cuba, tropical island, famously fertile soil, why’re there food shortages? Even peasant farming should be able to get somewhere, right?

And sure, they do now allow the peasant plots. Which do have much better yields than the state farms. They use a lot of “agroecological” techniques which is, I think, the modern code word for medieval peasantry methods. But they’re not growing wheat, they’re growing yams, yucca, beans, light veggies and citrus. Things where the peasant farmer can indeed produce a considerable surplus even using those medieval techniques, no fertiliser – other than night soil – etc.

So I was still not quite getting why horrendous food shortages. They’ve got those peasant plots, peasants can sell in free markets, should all work out even if there’s going to be a shortage of beefsteak on such a basis.

Ah. You’ve got sell 80% of your crop to the state at state determined prices. Yea, even if you’re farming half an acre with a hoe and machete. And guess how efficient the state is at coming to pick up your crop, let alone take a guess at the prices the state offers……

Sure, I know, pretty silly thing to thing about but there the thought arrived as I was hacking at weeds in my own garden in fact. Yes, I’m getting, for the very first time in my life, a real and direct idea of how much physical effort goes into hand farming. I’m not being stupid enough to actually try to feed myself – a few chili peppers just to show I can notwithstanding. And the muttering I’m doing to myself is, well, if you know what you’re doing (!) then yes, you really can feed yourself and household off a few acres. With a substantial surplus to sell too. It’s not going to be grand riches, by any means, but there wouldn’t be a shortage of plant based food calories.

A general shortage of basic plant – and perhaps eggs, say – calories has to be about something else therefore. And there I found it – the 80% confiscation (because their prices are confiscatory) by the State. The peasants are growing enough to feed their families, which no doubt disappears into bellies before the state calculation of yield, then there’s only a bit on top.

And that, I assume – or even would insist – is why beaucoup de fertile land on a tropical island – citrus is damn near a weed in such places, ‘nananananas too – with private plots allowed still has basic food shortages. Because, effectively, the state steals 80% of what the farmers don’t simply stuff into their own bellies.

It should even be possible to test this. Check the diets of the peasant farmers. Really test them – and find out whether they’re living off the declared crops that the state takes 80% of or there’s a bit of leakage before that calculation.

The thing that’s always got me about the Cuban variety of socialism is just how drearily shite it is. Yes, yes, gross political repression, the early days most certainly saw more than a few bourgeois up against the wall and so on. But over the decades it all just seems to be so, well, shite. I mean, seriously,. food shortages on a tropical island with a surplus of fertile land? How fucking shite do you have to be to achieve that?

Despite what the UK right will tell you, appeasing bond markets has actually led to instability
Andy Beckett

Usual idiocies. But lefty plans will be so lovely and so why are bond markets nasty to us? Because you want to do it with the bond markets’ money. If you went off and did all that lovely by taxing then the bond markets wouldn’t give a shit. Shrug.

The inequality caused by technological innovation is not a given.

Technological innovation reduces inequality, not produces it.

Half the species gets free telecoms from Zucks. Telecoms inequality is thereby reduced. Amazon has knocked 2 to 4% off the US price level. Given that consumption is income constrained at the bottom but not at the top this reduces consumption inequality, not increases it. That first great technologiocal change, spinning, weaving and knitting with machines meant stockings went for being for queens to something the factory girl had a change of. Stocking inequality fell.

Technological change *reduces* inequality, not increases it.