EU competition regulators on Monday approved a 380-million-euro German bridging loan to Thomas Cook’s German airline Condor, saying the measure would ensure the continuation of air transport services.

Condor ran into a liquidity problem after its parent company and the world’s oldest travel firm Thomas Cook collapsed last month.

In other words, the UK government need not have let Thomas Cook fail. It could have guaranteed a loan that meant it did not have to fall to ABTA, which is guaranteed by the UK government, to spend more than the value of the required loan guarantee to repatriate vast numbers of people who could have instead continued their holidays uninterrupted whilst an orderly reorganisation of Thomas Cook could have been arranged. And EU law permitted that.

It’s often said that the EU obstructs commercial matters to promote competition: the reality is it very clearly takes reality into account. This is a case in point. It’s the UK government and free-market ideologues who promote the idea that the EU is a problem. Very often it is not. And the left should take note.


That a parent company goes bust does not mean that the subsidiary is also bust. That T Cook went bust does not mean that all subsidiaries of T Cook are bust.

Further, that Condor is perhaps viable but that T Cook airline is not are different issues. Whether or not T Cook could have been bailed out by the UK government depends upon whether T Cook was perhaps viable. With that £3 billion hole perhaps not.

Whether or not T Cook airline could have been subsidised depends upon whether T Cook airline was perhaps viable or not.

That a possibly viable subsidiary got support doesn’t mean that a possibly not viable one would be legally able to have the same.

But then, you know, Snippa, accounting, the law……

We can explain this

I could hardly disagree, could I? It’s been more than a decade coming, and about 440 blogs worth of effort here to help keep it going, but the time for the Green New Deal has arrived. And it’s now.

But not a word of it was heard in the Queen’s Speech, which hardly mentioned climate-related issues at all. Which is how out of touch this government is.

The current government disagrees with you Ritchie. That’s why your foolishness is not in the Queen’s Speech.

Therefore no one made a profit out of privatisation

The CBI really needs to learn double entry accounting and something about business valuation before it talks about the costs of nationalisation


But, second, it gets worse. This payment is apparently a ‘cost’ to government. It’s as if the CBI thinks that in every takeover in British history value was destroyed and the acquiring company wrote off the asset bought through the profit and loss account as an expense straight after the purchase. That, of course, is not what happens. And there is good reason for that: valuable property have been acquired, as would also be the case here. In other words, this is not a cost. It is an investment. And the investment goes on the country’s balance sheet in that case. Which means it is not a cost.

Third, the CBI then claim that the interest cost of the acquisition, which would be just £2bn a year, is a burden to be suffered. But that, of course, ignores the fact that these assets acquired have earned a return to date, which is precisely why they attribute such high value to them. In that case they are more than capable of covering a £2bn cost of interest. But the CBI forgets this.

So is any part of the CBI claim as to value, asset accounting or income cost true? No: not a single part is. The CBI apparently does not know how to value assets and account for takeovers, and nor does it realise that costs might have income compared to them.

To describe their claims as a shoddy piece of work worthy of a fail in sixth form business studies is to be too kind to them. It’s just incompetent.

If the CBI does not like nationalisation it will have to do a lot better than that. And understand some basic, but essential accounting as well.

Therefore privatisation was just double entry bookeeping as well, wasn’t it? Govt got what the assets were worth.


I’d pay to see the reaction

Making profit should not now be the primary goal of a business: being net-zero carbon should be

I should add that I have already written to Mark Carney on this issue.

It’s that Pooteresque mixture of idiocy and self-importance……

The actual task – as Stern and others have pointed out – is how to make it profitable to be less carbon emitting. ‘Cuz us humans tend to do more of things that are profitable.


The government has tabled the most extraordinary statutory instrument as a result of Brexit.


And all this will be done without recourse to parliament. There will be non-taxation by Treasury edict without parliamentary consent.

An SI is rule without parliamentary consent.

So, given that near all EU stuff is enacted by SI then that’s near all EU stuff happens without parliamentary consent then, is it?

Quite so

Prominent figures from the arts and academia have piled pressure on Nicola Sturgeon ahead of the SNP conference by publishing their own “declaration of independence”.

The 50 signatories – including actor Brian Cox, author Val McDermid and historian Sir Tom Devine – said staying in the Union meant Scots giving up their right to “decide their own destiny”.

Now put “European” in front of that union and it’s an anathema that anyone should or even could possibly believe that independence might be a reasonable idea.

Odd that, eh?

Well, yes, but

I admire the radicalism of Extinction Rebellion. But, as Roger Hallam explains in the book to which I have linked this morning, whilst its objective is radical social change, and that is almost certainly necessary

Actually, no. Climate change means – if it means anything at all – that we need to reduce emissions. And nowt else.

It’s just an excuse for that radical social change….

Isn’t logic lovely?

Let me deal with the self-interest issue first. Mr Fisher is described as the founder and executive chairman of Fisher Investments and chairman and director of Fisher Investments Europe. I have seen their adverts. They are targetted at the reasonably wealthy soon to be retired person whose portfolio Fishers wish to manage. So Mr Fisher has an alignment of interest with a particular group who want high-interest rates to keep them in retirement and to increase the value of their annuities.

This is the group who have already done best out of the recessionary environment of the last decade.

So, err, they’re arguing for higher interest rates and higher annuity rates because they’ve done so well out of low interest rates and low annuity rates?

First, Mr Fisher’s facts are wrong. Bank margins on lending – which is what motivates them – have not fallen as a percentage or in value terms over the QE period.

Yes, they have. It’s a standard that falling rates compress bank margins. Why? Because a large part of the deposit base doesn’t receive interest. That float of the money passing through our accounts. A fall in lending rates when your cost base is 0% does compress margins.

This is simple well known stuff. But Snippa seems entirely unaware of it. Even though I’m sure I recall him complaining about this at some point in the past.

I won’t be seeking Mr Fisher’s advice any time soon.

And who else should we be ignoring?


And this time I think few doubt recession is coming. It’s hard to see how this combination will fail to deliver the downturn that has been delayed for longer than I suspected, given all the failings of austerity.

What we know is that austerity cannot happen this time. There is nothing left to cut without enormous harm resulting.

Both taxation and government spending as a proportion of GDP are higher than they were under the Brown Terror.

What austerity?

Hmm, well, a point Sirrah.

When the aim was no border in Ireland, Johnson has delivered one. And it will not work. Whilst the compliant will submit to the proposals the whole reason for border checks is that we know there are those who will cheat. Johnson’s plan for checks away from the border provides no mechanism to deal for those who will flout the border for gain. At which point the plan, necessarily, fails. And that’s before the politics are considered.

There are people who cheat on the current border arrangements too. So, the logical difference between the new and the old is what?

For example, those claiming asylum regularly cross national boundaries within the EU. It’s also, inside the Schengen area, illegal to have general checks set up to stop them doing so – that’s to interfere with the free movement of people. It is only allowable to have spot and intelligence led stops.


The twats don;t understand their own poll

New polling from Tax Justice UK and Oxfam, conducted by YouGov, shows widespread public support from across the political spectrum for increasing taxes on wealth.

The organisations say this would help to tackle inequality and raise revenue that could be used to fund public services and fight poverty.

The poll, published ahead of Conservative Party Conference, shows that more than two-thirds (69 per cent) of Brits thought that earnings from wealth should be taxed at the same level as, or more heavily than, earnings from income.

Taxing the income from wealth is taxing income, not wealth.


And isn’t this a lovely non-sequitur?

Currently, wealth is often under-taxed compared to taxes on income from work. In the UK, tax raised from wealth remains low at about 4 per cent of GDP compared to 15 per cent from taxes on income and 11 per cent from consumption.

Taxation of helium balloons is low too.

Just think what could be done!

Andrea Leadsom announced £1bn of extra government spending for the Green New Deal before the Tory party conference.

The sum involved is one-fiftieth of that needed. The Green New Deal Group think we need at last £50 billion a year for the next decade.


It takes some effort to get Green New Deal spending pretty much wrong at every level, given the quantum onwards, and when there is so much to do. But Leadsom has managed it. Which is staggering.

Put me in charge and I’ll piss away 50 times as much!

Which does lead us to that problem for these grand plans to go spend the hell out of everyone else’s money. Politics just isn’t a very good system of doing so, is it?

So, you see, the Green New Deal won’t pay for itself, it will be expensive

And such are the likely real margins inside many economies that nothing like the Green New Deal could be done by simply using government injection of funds without there being a superficial demand for additional tax payable, and quite possibly in significant amount if inflation was to be avoided. There are spare resources in the economy, but not that many.

We will lose what we would have had if we’d not had the Green New Deal.

The first relates to the necessary reallocation of resources to create the capacity for something as radical as the Green New Deal, because let’s not pretend that this will happen with all existing activity within the economy coexisting beside it.

Yep, there’s an opportunity cost to the Green New Deal. It’s expensive that is.


My proposal that pension fund and ISA savings be used to finance the Green New Deal should be seen within this context. Let us not pretend that these do not change aggregate demand within the economy. First of all, by providing tax subsidised savings mechanisms they do distort demand by diverting financial resources: this in itself has an impact upon the real economy. And, secondly, any argument that they merely create stocks of notional financial assets with no real impact is far too limited a perspective. The fact is that massive amounts of resource are actually reallocated by this savings process this process and this has a very real current impact upon resource allocation within society, both in consumption and investment terms, and both have real consequence.

But Snippa’s entire rant is that mere savings don’t have any impact upon that real economy.

So, what I have done is link the need for change in aggregate demand to the tax reform that has promoted current resource misallocation and have

Which is exactly how real economists have said we should tackle climate change. A carbon tax.

Err, well, no, Senior Lecturer

In the case of reducing rates of corporation tax a number of deeply destructive consequences arise. First of all, tax revenues fall. I do, of course, know all the arguments based upon modern monetary theory that suggests that tax is not needed to fund the government expenditure, but as a matter of fact a sum total of tax has to be raised within any system, including that described by modern monetary theory, to counter the effects of inflation. In that case, and as a matter of fact, if companies pay less tax then someone else will have to pay more: modern monetary theory does not change this logic. And as such what Boris Johnson is seeking to do is to shift the burden of tax from capital onto someone else, which will inevitably be ordinary people.

That assumes that corporation tax falls upon capital. Something which isn’t true, not in the slightest.

How much it doesn’t, even why it doesn’t, is argued over. But that it doesn’t is just a well known piece of reality.

In 1998 the Organisation for Economic Cooperation and Development began a programme to attack what they described as ‘harmful tax competition’. That program was misguided. That was because the clear implication of its title was that there might be a benign form of tax competition. There is absolutely no evidence that a benign form of tax competition exists. All of it is harmful.


Think theoretically for a moment. There are bad forms of taxation. Or perhaps there are types which are worse than other types. Equally, we could say that there are harmful levels of taxation – type and level being distinctly different points here.

A place that uses the good types at not harmful levels does better than that the bad at harmful. This is obviously tax competition. The outcome of which will be that the bad is outcompeted by the good and thereby replaced by it. If only becuase people start to mutter, well, bugger me, hadn’t we better start doing it that way?

Do note that this doesn’t depend upon what we say is good or bad taxation, nor what the judicious level is. On that second places which don;t tax enough, thereby failing to produce enough government, would equally be found out.

So, is it possible for there to be a good form of tax competition? Sure there is.

The Senior Lecturer is therefore wrong. But then we knew that…..

Why not find out then?

The blunt fact is that the US market has run out of overnight security available within what is called the repo markets (see those explainers for details).

The official line is that US corporations owed tax this week, and $78bn of cash for a bond sale had to be settled at the same time.

Let me be clear, I have no better clue on this issue than anyone else: no one seems sure whether these excuses are good or not. But I am goi9ng to take a punt and say I suspect not: this has not happened in the last decade and tax settlement and bond sales have happened before, and I can be fairly sure coincidentally.

Perhaps the duty of an academic is to try and find out?

The WSJ article also contains other sobering information. Specifically, post-crisis regulatory “reforms” have made the funding markets more rigid/less-flexible and supple. This would tend to exacerbate non-linearities in the market.

We’re from the government and we’re here to help you! The law of unintended (but predictable) consequences strikes again.

Hopefully things will normalize quickly. But the events of the last two days should be a serious wake-up call. The funding markets going non-linear is the biggest systemic risk. By far. And to the extent that regulatory changes–such as mandated clearing–have increased the potential for demand surges in those markets, and have reduced the ability of those markets to respond to those surges, in their attempt to reduce systemic risks, they have increased them.

The cause being the fuck ups by the know nothings attempting to regulate markets last time around.


Dealing with perpetual incompetence is very hard, in itself. Dealing with bombast, hubris and even straightforward lying from the incompetent party is harder still.

That’s why Snippa is no longer a member even or organisations he started.