Timmy Elsewhere

New Timmy Elsewhere

On that getting the band back together. Not really, but this is Lewis Page, of El Reg fame, hiring me again:

In these troubled times, when we face the first concerted inflationary pressures in a generation, it’s necessary to walk back to earlier wisdom and realise what inflation really is. It is, no more and no less, a change in the value of money. So, when there’s inflation that’s what will happen, money will change in value. The effect of this is that FX rates will change by relative inflation rates – the US Dollar / Swiss Franc rate (USD / CHF), or the Euro to Turkish Lira (EUR / TRY) one, will over time be defined by the relative inflation rates in the respective countries.

Umm yes, OK……

Alberta Education, the education department for the province of Alberta, would like permission to include and translate into French the following material for use as part of an assessment item for the Social Studies 30–2 diploma examination program.

Clips from a Washington Examiner column.

then in ongoing, multiple administrations of the Social Studies 30–2 Grade 12 Diploma Examination(s) starting in January 2023, in English and in French, to be written by students in Alberta, Nunavut, and the Northwest Territories.

This is trivial. I know it’s trivial, yet there’s something rather fun about the idea of some Inuit lad staring out over the strait to Greenland and pondering what the hell this Englishman meant in his social studies class.

The problem is, trickle-down economics does work, will work, and always has done so. …
A simple way to forecast the future is to look at what rich people have today; middleincome people will have something equivalent in 10 years, and poor people will have it in
an additional decade.
… I’m old enough that the first mobile phone call in my native England took place while
I was an adult. The phone cost more than many of the used cars I’ve had over the years, and
airtime was $2 a minute. We can all now have some landfill Android machine1
that will surf
the net as well as make calls for what, $20 a month these days? We even say this is such a
part of modern life that we provide them for free to welfare recipients. Yup, that’s trickledown economics.
My larger point is that this happens with all technologies. Something starts out as
playthings for the rich, economic competition piles in, and they become cheaper and
cheaper—until a middle-class existence is defined as being impossible without one, and in
the fullness of time we say that you’re impoverished if you don’t have one. …
This oddity of mixing up capitalism with markets really does make this sort of trickle-down
work. It’s the only economic system humans have ever tried that moves technologies along
that conveyor belt from spurious2
luxury to basic living standard as it does. Nothing else
has ever done that. …
That is, the argument isn’t that trickle-down economics doesn’t work—even when we use
the definition designed as an insult—it’s “how well does it work?” because we all agree
it does.

On what we do about rising food prices

The thing about food being that, of course, it is an essential. Gain access to less than that minimum and we die.

This is not a result that we desire, so of course we should do something.

But the “what” is that we should provide aid to the poor to enable them to access the now more expensive food. Trying to change the market price won’t work.

Giving the poorest of the poor a little more money so they can buy, in those markets, the now more expensive food does.

The greater expense of food means that we richer folk — yes, we are, reading an English language newspaper, we are — can cope even if we’d prefer not to.

We’ll cope, in part, by eating a little less or differently.

The poor cannot do that as they’re only just above the minimum calorie requirement already.

All of which is really just a reflection of a very basic economic concept.

Things that we wish had or would not happen do indeed happen.

There are things we can do about this, of course, but the answer is never to mess with the markets nor is it to try and price fix.

Instead, the solution is to subsidize people. People can’t afford food?

Give them some money.

In the end it’s not just more effective it’s hugely, grossly, cheaper.

Chest beating etc

As you all know I’ve that column in Bangladesh which ends up subsidising 1Tk meals for street kids etc (according to recent calculations, each column subsidised 77 such meals).

I will admit that I tend to rattle off those pieces. To some extent that works too, as carrying the one idea through 800 words can indeed work better at speed.

Anyway. This one. I don’t know what the Bangladeshis made of it but I think that’s a little piece I actually got right. In the sense that I’ve explained (as I’m supposed to do) a real piece of economics in a way that can be understood by someone who has no economic knowledge at all.

Well, I think so anyway.

Why neoliberalism works

Now, you could tell me that you’re absolutely certain that a properly planned economy would also create a YouTube channel with 4,000,000 subscribers watching the entrails of 14 goats being cooked in some village out in the wilds over by the Sundarbans. Sure, you could tell me that. But you’ve not got a hope of making me believe it.

The reason markets work is exactly because they allow people to try all sorts of weird stuff unadulterated by what educated and sensible people think should happen. Well, OK, the real reason they work is because often enough the things that people want are the weird things that educated and sensible people working in offices can’t even think of, let alone think should happen.

Don’t these people have editors?

Right back when I first started blogging – 18 years or so ago – a catchphrase was “Don’t These People Have Editors?”

Someone mangling facts, facts that should have been checked rather than mangled.

This now seems to have matured for I’m getting paid to do this now. Not a lot, admittedly, but enough that it’s worth doing. Read for likely idiocies, check footnotes – and as I’ve said, I’m so boring I will in fact read references from footnotes – and see what’s been mangled.

Here the example is that there’s an IOC report out there saying that of all the places that have had Winter Olympics before then, if climate change is really bad (RCP 8.5), only one of them would be able to have a Winter Olympics again. Which everyone is reporting as only one city will ever be able to host the Winter Olympics.

There’s a certain difference in those two statements.

More fun

So, I’ve been published in Sri Lanka for the first time now:

Or as we, who have read our economic textbooks, can point out, you can fix the price of something but not the quantity, or the quantity but not the price. If you try to fix both, then you’ll get none at any price.

You can only have a foreign exchange shortage if you’re trying to fix the price of that foreign exchange.

Elsewhere

It’s entirely true that the Covid situation in Texas isn’t as anyone would like it to be. But to just blame it all on Republicans isn’t worthy of a news outlet. We’d also pass on a little bit of advice to Vox. When your reporting makes the New York Times look like a paragon of objectivity and political party even-handedness then it really is the right time to have a sit-down and a real good think about how you’re “explaining the news”.

At least I didn’t have to read Teen Vogue to do that one.

Elsewhere

In which I do American cultural politics:

Salon really should know by now that the problem with vaccinating the poor countries isn’t about patents. But they publish a Common Dreams piece that blames not just poor vaccination rates but the emergence of the Omicron variant entirely on the capitalist drug companies and their intellectual property. This is all entirely an invention of Global Justice Now, a group that campaigns against capitalism, let alone patents on medicines.

From a story filed some 10 minutes before the verdict came out

The article is headlined, “Rittenhouse Jury Has to Decide If the Men Who Tried to Stop Him Were Heroes or Villains.” That has nothing, at all, to do with the issues in that jury room. The dead could have been Joan of Arc with attendant hosts of angels or Hitler himself along with the Waffen SS. All entirely irrelevant to what the jury has to decide upon.

Which is the issue before the jury here. It’s also the only important pair of issues before that jury. Was Kyle Rittenhouse acting in self defense? If yes, then was the force used commensurate with that being used in the attack? There are no other issues here of any legal importance.

Timmy in the Telegraph

On the subject of GPs and contracts and what do we do:

Finally there’s a solution – though it would meet serious resistance – which is to change how, not how much, GPs are paid. Currently the system is based on capitation fees, which awards care providers based on the number of patients registered at their practice. Change reward from how many registered patients they refuse to see face to face, to pay according to how many appointments they do undertake and marvel in wonder as the queues disappear. But then that would be to treat revered professionals as mere jobbing tradesmen like plumbers or lawyers, so we may be waiting quite some time.

Something weird is happening at The Guardian

In the comments on Robert Reich’s latest:

Report
TimWorstall
TimWorstall
1 hour ago
Guardian Pick

2

Oh seriously, doesn’t anyone ever bother to check these assertions?

“Seventy per cent of the US economy depends on consumer spending. But wealthy people, who now own more of the economy than at any time since the 1920s, spend only a small percentage of their incomes. Lower-income people, who were in trouble even before the pandemic, spend whatever they have – which has become very little.

In a very practical sense, then, the US economy depends on the spending of most Americans who don’t have much to spend. That spells trouble ahead.”

Here’s consumer spending (personal consumption expenditure, which is the correct term for what Reich is talking about) as a percentage of GDP:

https://fred.stlouisfed.org/series/DPCERE1Q156NBEA

Back in those glory days of strong union power, equitable and shared growth and all that guff consumer spending was only 60% of GDP. Now it’s nearer 70%. So, it appears that the increasing wealth concentration being complained about actually increases consumer spending as a percentage of GDP.

Look, it’s fine to have different visions of how the world should be and all that but might we just start with an agreement that our analyses have to conform to reality?

Err, one of my comments being a Guardian Pick? Who has been spiking their water cooler?

Barrels, both

By the argument Blyth is using building a new gym at Brown is investment, everything that happens in the classroom, being an intangible, is not. But then at Brown, with Blyth, that might actually be true.

We entirely agree that there are different visions of the future we should be striving for. But we would like to at least try and insist that the evidence presented to argue for one or the other be evidence, be observations about the real world. For without that stricture we end up somewhere on the spectrum from being misleading through propaganda to casuistry which really, we do insist, isn’t the way to run the world.

On the banning of halogen bulbs

Imagine if electric cars, heat pumps, LED lights, really are the bees’ patellae. Excellent – as people look to replace their current systems then they’ll naturally gravitate towards these better technologies. That way we’ll make more progress in solving climate change because we’re doing at the least cost.

Elsewhere

A rather more gentle treatment of Mark Bittman’s misunderstandings:

Bittman’s observation is correct, and first principles are an excellent start to the process of logical deduction. But it is also an appalling place to end the process of thinking. True, we don’t all have to stand on the shoulders of giants and reach further and higher than the pebbled seashore, but those previous generations of billions did contain some bright people who did think about the problems of the human condition. Some of them even came up with interesting answers.

The economist looks at Bittman’s statement and notes that healthcare is a luxury good – as our real incomes rise we spend more of our incomes upon it. Food is an inferior good – as incomes rise a smaller portion of total income is spent upon it. As our incomes rise, the portions that we spend on different things change. This is the same insight as Maslow’s Pyramid that denotes the hierarchy of human desires. As we satisfy our desires on the lower level of the pyramid, we allocate more of our rising income to the upper levels of the pyramid. This is what those definitions of luxury goods and inferior goods mean.