Ragging on Ritchie

Re contact tracing app:

Ireland can get this right.

We can’t.

That’s not by chance.

That’s the result of failed leadership.

How long must we suffer this?

Well Snippa, the NHS tried to write their own app. No privatisation, see? Ireland hired an outside contractor who knew what they were doing. Privatisation, profit making companies gaining health care cash.

Quite, how long must we suffer this?

Whether we get a second coronavirus wave is unknown, but that there’s a risk of it is a fact, so we have to stay in semi-lockdown. And Covid 19 is endemic now: even a vaccine is unlikely to erase it. So everything will be different. There’s a long term socio/medical impact of this.

Not really, no. If it’s now endemic then we don’t stay in semi-lockdown. Because doing so doesn’t bring a benefit to match the cost.. It ends up as a nasty ‘flu that some thousands to tens of thousands will die of each year. Tant pis and all that.

This is also fun:

Because of the risk of falling house prices negative equity traps must also be avoided: it should be made illegal for any mortgage repayment on sale to ever exceed the sale value of a property.

That makes all mortgages non-recourse. Which also, obviously, makes all mortgages more expensive. As happens in the US, where some states have non-recourse mortgages and others don’t.

Oh, it also makes speculation in housing a one way bet for the investor. That’s just what the country needs, right?

Explore how to turn redundant engineering skills into bike manufacturing capacity.

“‘Allo Mr. fracking engineer. You know how to make bikes then?”

Fifth, forget tax rises: facing a crisis like this they should be off the agenda for a long time. Any tax reforms should be solely about making society fairer e.g. by tackling wealth inequality, with no net increases.

Sixth, savings – and especially tax incentivised ISAs and pensions – must be put to work to support this programme. Unless they are invested in new sustainable jobs the tax reliefs must go.

And removing tax reliefs is, of course, not raising taxes….

And the route to that collapse is very short. It begins next month as furlough begins to wind down. The mass redundancies will begin to be announced in September when the end of furlough is imminent. And by then the corporate failures will be rising.

Which is a nice prediction isn’t it? Let’s come back to this in October, shall we?

A journalist I have known for thirty years once told me that there were two places he wanted to be quoted in. One was the New York Times, but most especially he wanted to be in the Washington Post. That was making it, he reckonEd. When I’d done both he admitted to jealousy. I was amused.

Dunno. Is it going one up to have written for both of them?

The UK government is on course to sell more than half a trillion pounds of debt this year,

OK….

And £300 billion is covered by quantitative easing, so far announced for this year.

Right….

In other words, the government needs to issue this many bonds to soak up demand.

Eh?

That the BoE is having to invent money to buy the bonds shows us that this many bond must be issued to soak up demand?

You what?

The Fair Tax Mark desires aid in creating the standards that would apply to international corporations.

“Obeys the law” would be a nice one to see but that would be a pretty short standard.

We have several people around here who actually know this stuff rather than just write about it like me. So, perhaps I could persuade a few to go here and here and contribute to their standard setting?

Be constructive, of course, and a submission from Mr. Murphy Richards would be especially welcomed I am sure.

Richard Murphy says:
July 15 2020 at 7:20 pm
Actually the decision was largely based on the fact that Ireland did not have effective transfer pricing laws at the time

Err, no, it was nothing to do with that at all. It’s not even true that they didn’t have transfer pricing rules.

The other thrashing around is rather fun:

Jason_of_Orange says:
July 15 2020 at 7:44 pm
And was therefore entirely legal.

Reply
Richard Murphy says:
July 15 2020 at 9:55 pm
A claim that could only be made by someone who really does not understand law

Reply
Jason_of_Orange says:
July 16 2020 at 9:17 am
Of course you’re an expert on law as well as everything else, aren’t you Richard?!

Please explain which part of what Apple did was illegal and which rules were broken. The Court would appear to disagree with you.

Reply
Richard Murphy says:
July 16 2020 at 9:40 am
It’s not the final opinion, necessarily

And just in case you weren’t aware of it, the law was not clear or the matter would not have been disputed

That you do not get that proves my point

So what is actually happening is that, exactly as modern monetary theory says, government cash injections create private saving. And when the government injects money into the economy private wealth increases. The government has done that through QE and not debt, but there’s still more money, and the reality is that as this chart shows a great many people will have a great deal more savings as a result.

So is there a cost to all this? Undoubtedly there is. But it’s not to the government, where interest costs are falling. It’s to society at large as inequality grows. That’s the side effect of this crisis.

Oh. Cool.

On the very same day he also tells us that:

In other words, negative real interest rates are here to stay for now.

Which is interesting, don;t you think? For investing in something with a negative real return doesn’t look like a great way to get rich….

With reference to this.

And I can’t recall the last time I saw a timeline in reverse….

Give that a quick look and all looks great: as one would hope, the overall chart shows a steady increase to the right. It’s so ingrained in us to look for this that the message from this chart appears unambiguous: things are getting better.

Then check the X-axis. The timeline is the reverse of that invariably used. The most recent data is on the left of the chart, and the oldest on the right. Things are not getting better. Things are getting worse, and very much so.

That makes me want to ask a basic question. If the FRC is committed to ensuring that true and fair views are given why did it choose to misrepresent the data it is delivering today to imply something that is not true? Why is it presenting its own data, in other words, in a way that is neither true or fair?

If we are to have confidence in a regulator that is responsible for the truth and fairness of data surely we should be able to presume that they will uphold that standard themselves.

Have you ever noticed how financial accounts are generally presented?

Most recent period to the left, receding into history as we move to the right? And the idea that the Financial Reporting Council would use the standard layout for financial reporting is just absurd, right?

Either that or they’re Hebes. That all three professors are spouting on a subject unknown to them could not possibly be true.

Richard Murphy says:
July 13 2020 at 11:17 am
Eric

Look at the post

And look at what Clive Parry has to say as well – including the fact that it would take ten years for our rates to really change and the trend is downward, the world over

The risk of interest rates rising is very, very low

If this is so then why is the BoE buying gilts?

If not, you know, to lower interest rates below where they would be without QE?

Snippa’s latest video on money. He says that banks don’t create money. So that’s the Positive Money wet squad coming for him then.

Snippa wants to tell us all that interest rates are unlikely to rise therefore borrowing isn’t a problem:

The debt fetishists, like former Chancellor Sajid Javid, who are demanding that the government keeps borrowing under what they term to be control do so because they claim that there is a very real chance that current interest rates will rise.

Hmm:

The Bank of England has just published a very interesting paper on this issue, looking at real interest rates

Ah, but to a debtor it’s nominal interest rates that matter…..

If UK regulation is so bad that we need freeports to get rid of it in some places why not change the law everywhere so everyone can have the same advantage in the whole UK? Or would that stop the advantages being captured for private gain by a few at cost to the rest of us?

— Richard Murphy (@RichardJMurphy) July 12, 2020

Well, yes, free trade through free ports. That does sound like an excellent idea.

The debt fetishists keep telling us interest rates will rise and inflation is coming soon. Neither is true. Interest rates have been steadily falling for 500 years, and around the world no one knows how to create inflation now. The idea that we should fear either is quite absurd

— Richard Murphy (@RichardJMurphy) July 11, 2020

Can’t understand why anyone might disagree with that statement.

source: tradingeconomics.com

Just cannot, for the life of me, understand why anyone would differ:

source: tradingeconomics.com

Mystified.

I note a fascinating article in the Guardian that suggested that parts of England might run out if water within twenty years. This is, apparently, the view of the Public Accounts Committee.

That’s pretty scary.

But think for a moment about the political connotations. Scotland and Wales will not be running out of water.

The actual PAC complaint:

It said the scale of leaks, at 3bn litres a day, was wholly unacceptable.

That’s for England alone. For Scotland alone:

Leakage is the volume of water escaping from our pipes each day. It is measured in millions of litres per day (Ml/d). Over the last 13 years, Scottish Water has reduced leakage from 1104ML/d to 480Ml/d, and continues to target leakage.

Scotland’s population is 5.5 million, England’s is 55 million. 10 times the people and only 6 times the water loss through leakage.

Which water system is doing better?

And Scotland, in particular, could be a renewable energy hot spot as well.

As has been noted a surplus of wind and or solar power to sell tends to coincide with other people having a similar surplus, meaning that the sale price is pretty low. In fact we already have a system in which we tell people to stop producing renewable power as the price is zero or below. It’s unlikely to be all that great an earner really.

Especially if England stops subsidising Scottish renewables of course.

This, of course, is a blatant falsehood since it ignores quantitative easing. If UK government ‘borrowing’ this year will be £361 billion, as the FT estimates, and quantitative easing will, we know, be at least £300bn then the real ‘debt’ has only risen by £61 billion at most, and not by £361bn the FT represents because the government simply owes itself the rest, which is meaningless. As a result national ‘debt’ is actually only about 65% of GDP.

That cash created by the BoE is debt. As Snippa keeps telling us it is. That’s the only way his insistence that if we don’t have a budget deficit then we have less money works.

The increase in M0 is still debt that is.

The government has claimed it has spent £15 billion on PPE as a result of coronavirus. Given that we know there shortages of PPE until very recently I am taking ‘spent’ as meaning that amount has been used.

OK.

Something about this does not stack, especially when we know most could not get PPE for love nor money during this period.

Who is not telling the truth?

And who is making a fortune?

Or is there fraud somewhere?

As an auditor (and I was for many years) I smell what I would simply suggest is ‘something not right’.

The actual answer possibly being that government is a grossly inefficient, near entirely wasteful, method of getting things done.

That being the answer we’ll not get from Snippa given that that entirely kills his political worldview.

A UK economic plan in a tweet

Spend money on care and energy efficiency in every constituency. Deliver a strong NHS and better education. Fund sustainable transport

Pay for it with money creation, borrowing, putting savings to use and taxing the income from wealth more

Done

— Richard Murphy (@RichardJMurphy) July 9, 2020

Spend, spend, spend…..

Viv went bust of course, meaning we might want to pay just a little more attention to scarce resources, even how to expand the supply of them….

The government’s next step must be to move towards its well-received manifesto commitment to make £9.2bn available to such projects. To ensure this becomes a political priority, it is crucial to realise the vast number of jobs in every constituency that such a programme would entail.

As jobs are a cost, not a benefit, the way to increase support for my scheme is to remind everyone how expensive it is.

In addition, the definition of tax avoidance is so narrow that much of what everyone agrees to be tax avoidance – like the widely condemned abuse by multinational companies – does not get into the tax gap definition that HMRC use, which is absurd.

What Snippa calls tax avoidance HMRC calls obeying the law. Which is going to lead to a certain difference in the sum totted up…..

But there is a dimension to this that makes the report this year even more absurd than usual. To keep the number in the required and seemingly pre-determined range (four years in a row with an almost identical number is utterly implausible)

Why? Most economic numbers are within a few percent of themselves each year. GDP, tax revenue, spending on the NHS etc. They’re broadly the same each year with a few percent of variance. Why should tax dodging be any different?