From John Redwood's blog
Conservatives want more people to be homeowners. We are the homeowning party. We have a proud record of extending ownership to many more. We have done this in the past by Council house sales, by creating conditions for affordable mortgages, and by tax breaks.(1)
Some write into this site to say we need to get house prices down, so more homes are affordable. Labour tried this(2) – inadvertently no doubt – with a big house price fall at the end of the last decade. It did not price more people into home ownership(3), because there was too little mortgage money available to buy the cheaper homes(4). The number of new homes built slumped to new lows.(5)
The sharp downward adjustment may help in the future, but whilst it is happening it puts people off wanting to buy, plunges people into negative equity and undermines the banks who have lent against homes at higher prices(6). Why would people want to buy a home if they thought it could be 10% cheaper in a year or two?(7) At some point the authorities have to say enough, and stabilise the position.(8) That is happening now.
The overall fall in real and in many cases cash house prices has also changed relative prices a lot. The most desirable districts of central London, Sandbanks, parts of Oxford and Cambridge and a few other hotspots have risen whilst elsewhere there have been falls. In the northern towns most damaged by the Big Recession of 2007-9 there are more empty homes and larger price falls were experienced. The big movements in relative prices might help in due course rebalance the economy. When more people see that homes are better value out of London, and see there can be lifestyle improvements for them by moving, the market may start to assist the areas with more and cheaper homes.
It is far too early to call an end to this housing “boom” which a few commentators already claim is happening. They should get out of Belgravia and Chelsea more. There is no boom in much of the country. We need to see more housing transactions(9). They generate income for those involved, and usually lead on to work for builders, decorators, home improvers, furniture suppliers and the like.(10)
Some who want lower house prices bemoan how much money and activity the UK expends on housing. I think it is good we do, and want to see more spent in the years ahead(11). A person’s home is a vital part of their lifestyle and their comforts, an important determinant of whether they can enjoy their lives or not. Modern technology can transform a home. Many more will want to reach for the better heating installations, better insulation, improved labour saving devices, more stylish bathrooms and kitchens that money can now buy(12). There is plenty of room for more home improvement, to cut running costs, to make life easier and cheer people up. This also creates plenty of work for the many trades and professions involved in housing activity.
We have to live with the fact that expensive flats and houses in the centre of London are now largely the preserve of the international rich set. It would be stupid to try to stop them coming to London, spending their money with us and setting up businesses and investments here. As they drive the price of prime central London to ever giddier heights(13), the rest of us can see the charms and attractions of cheaper locations which need our money and our support.
1. Maybe in the past, but the Conservatives are now the party of homeownerism more than any other party and this doesn't mean increasing the number of owners, but looking after those who already own.
2. Labour never did anything to try to lower house prices. They relied on the bubble to sustain the economy. The fall was just the result of the bubble bursting, not deliberate.
3. Wrong. Falling house prices are very good for homeownership as people who were priced out can now afford them. The bubble bursting adjusts from madness to something closer to sanity.
4. At worst, the building societies and banks became more conservative about lending, but at the same time, prices fell enough to cover how much less there was.
5. Number of new homes not the same thing as home ownership.
6. No, it doesn't. The banks lent on mortgages, which are unaffected by the price of the house they lent on.
7. Maybe because the average mortgage is around 7 years. So, for people who are buying a home to have a home, rather than speculating, a fall of 10% over 2 years is an irrelevance.
8. The market will stabilise itself. Thought Redwood claimed to be a free-marketeer?
9. If you want more mortgage transactions, scrap stamp duty.
10. But the biggest gainers are the government (collecting stamp duty) and estate agents. Both of whom gain from higher house prices, taking money from people to spend on home improvements.
11. Imagine that same statement being said about food or petrol by Redwood.
12. And what's the effect of mortgage costs on how much disposable income people have on that.
13. Anyone seriously think that it's a few foreign billionaires driving up the cost of millions of houses in London?
Monday, 30 September 2013
John Redwood on House Prices
Posted by Tim Almond at 15:36 8 comments
Labels: Conservatives, Home-Owner-Ism
Life Copies Satire
From The Daily Mail:
As the Conservatives gear up for their conference in Manchester this week, Prime Minister David Cameron has given his party a boost by announcing a new tax break for married couples.
The £1,000 tax break is expected to be available to four million couples in the UK, and beats the £750 tax break promised in the Tories' General Election Manifesto of 2010, albeit is less than the £2,000 promised in 2007...Transferring £1,000 to a spouse will mean an extra £1,000 of their earnings is taken out of tax, which will work out at an extra £200-a-year.
From The Daily Mash:
THE prime minister's wife has halted divorce proceedings after realising she'd lose a sweet £200-a-year tax break...
She told friends: "I had the papers all filled out, and under grounds for divorce I'd written 'Husband is David fucking Cameron'. Clearly this was an absolutely watertight argument which no judge in the land could contest.
"But then I heard about this new tax break and whoa, £200 in ready cash in my back pocket just for staying hitched? And I get that every twelve months? Divorce over. Viscount Astor don't raise no fools."
From The Daily Mail:
The Duchess of York has fuelled speculation that she and Prince Andrew might remarry, admitting: 'He is still my handsome prince.'
The 53-year-old, whose 10-year marriage to the Prince, with whom she has two daughters, ended in divorce in 1996, refused to deny rumours that the pair might get back together.
Instead she said: "He'll always be my handsome prince. It's really lovely that we are still a family and the story has a happy ending all the time."
Posted by Mark Wadsworth at 14:22 3 comments
Labels: Fergie, Marriage, Prince Andrew, Samantha Cameron, Satire, Taxation
Good Spending
From the BBC
A new visitor centre at Stonehenge will open in time for the winter solstice, English Heritage has said.
The £27m project also includes grassing over the A334 alongside the ancient monument and closing another section of the busy road.
The visitor centre and museum will be located about a mile-and-a-half (2km) from the stones.
Visitors will be shuttled to Stonehenge by a little train, pulled by a Land Rover.
A few numbers: Stonehenge gets 1m visitors per year. Half of those are foreign tourists. So, over a couple of decades that's maybe £3/visitor to improve one of the biggest foreign draws. If they go home and tell their friends how great Stonehenge is and a few more of them come to the UK instead of elsewhere, it'll pay for itself. Heck, it might even pay for itself because people have a drink at the improved cafe rather than the rubbish that's there now.
Just thought I'd write this up because it's worth mentioning the rare-as-rocking-horse-shit occassion when I think that some extra government spending is worthwhile.
Posted by Tim Almond at 13:55 3 comments
Labels: Government spending, Tourism
How Buggered is France? Very says Switzerland!
And the Confederation Helvetica is not taking any chances according to France 24
Switzerland's army simulated a French attack against their country in a military exercise carried out in August, the Swiss daily newspaper Matin Dimanche revealed on Sunday.
The exercise employed a scenario in which a financially stricken France had been fractured into several regional entities, one of which was on the verge of attacking Switzerland to retrieve money it had allegedly stolen from France.
"The exercise has strictly nothing to do with France," Daniel Berger, captain of the Swiss armoured brigade, told the press. "It was prepared in 2012, when fiscal relations between both countries were less tense.”
Although big on neutrality now, (historically the Swiss made a lot of cash shipping out mercenaries and their pike men had a big rivalry with the German Landsknechts), the Swiss can still field an army of about 2 million (Contrast with the UK's 80 thousand odd) to defend a mountainous, river strewn chunk of land about the size of Wales. It is also quite usual when battling through the living hell of Zurich Central Station to see gents in their late teens/early twenties making their way back to barracks in combat fatigues and with the SIG 550 assault rifle strapped to them. I would not bet on France.... or a rampaging army of angry Greeks either....
The Swiss army carried out a different military exercise in 2012, based on the premise of an unmanageable influx of refugees following a crash of the euro currency and ensuing chaos across the European continent.
Posted by SumoKing at 11:45 0 comments
"Osborne in 'work for benefits' plan"
From the BBC:
Homebuyers who receive long term taxpayer-backed loans under the Help To Buy scheme will have to undertake work placements in return for their benefits, under changes being unveiled by Chancellor George Osborne.
From April, people who have not repaid the interest free loans within three years will face three options, including community work, or face losing benefits.
Mr Osborne unveiled the "tough love" plan at the Conservative conference.
Labour said it was proof the coalition's main house price support schemes - largely modelled on the schemes introduced by the Labour government five years ago - had failed.
In his speech to the party conference in Manchester, the chancellor is expected to say that while the government will not "abandon" long-term borrowers, no-one will be able to get something for nothing.
Posted by Mark Wadsworth at 10:30 9 comments
Labels: Fuckwits, George Osborne, Help to Buy, Welfare reform
Peter Lilley on top form
From City AM Forum:
So it is with most merchants of global warming doom. Their models forecast that, as carbon dioxide emissions rise, the world's temperature should accelerate upwards. Over a third of human carbon emissions since the beginning of time have been pumped into the atmosphere since the end of the last century - but the temperature has simultaneously stopped rising. That would give all objective scientists cause to question these models...
Until scientists agree whether warming will be minimal or massive, we should not drive our fellow citizens into fuel poverty, undermine manufacturing and waste taxpayer billions.
Meanwhile Miliband, who was environment secretary when the Climate Change Act committed future governments to replace fossil fuels by renewables costing two or three times as much, promises to freeze energy prices. The fact that even he didn't mention his Act, which is incompatible with his pledge, shows it is politically indefensible.
A point I made myself last week, but it's nice to hear somebody else say it.
Posted by Mark Wadsworth at 09:59 2 comments
Labels: Ed Miliband, Hypocrisy, Peter Lilley
Osborne's Help To Waste Time Programme
- Thirty hours a week for six months of community work such as making meals for the elderly, cleaning up litter and graffiti or charity work, plus 10 hours of “job search activity”.
- Daily attendance at a jobcentre to search for work instead of a brief interview once a fortnight.
- A mandatory intensive regime for claimants with underlying problems such as mental health, drug addiction or illiteracy.
Posted by Tim Almond at 00:30 1 comments
Labels: Stupidity, Unemployment, workfare
Sunday, 29 September 2013
Outbreak of common sense...
... in Durham:
Class A drugs should be decriminalised and drug addicts "treated and cared for not criminalised", according to a senior UK police officer.
Writing in the Observer, Chief Constable Mike Barton of Durham Police said prohibition had put billions of pounds into the hands of criminals.
He called for an open debate on the problems caused by drugs.
The Home Office reiterated its stance and said drugs were illegal because they were dangerous.
Posted by Mark Wadsworth at 15:26 11 comments
Labels: Commonsense, Drugs, Legalisation
"Quick! Pour more accelerant on the fire!"
Via Ennui at HPC.
It must be clear to everybody that the Conservatives' re-election hopes are largely pinned on stoking a nice house price bubble before 2015 to create the "feel good factor" which has been key to winning more or less every UK General Election for the past few decades.
But oh no, what's this?
The August data from Land Registry's House Price Index shows an annual price increase of 1.3% which takes the average property value in England and Wales to £164,654. The monthly change from July to August shows an increase of 0.1%...
The region in England and Wales which experienced the greatest increase in its average property value over the last 12 months is London with a movement of 7.1% and the North West experienced the greatest monthly rise with a movement of 1.3%. The region with the greatest annual price fall is the North East with a decrease of 2.2%. Wales saw the most significant monthly price fall with a decrease of 2.1%.
So their votes might be looking pretty safe in London/South East for the time being, but it's ebbing away elsewhere.
But fear not, help is at hand:
Polling since Mr Miliband’s speech last Tuesday suggests that his policies are popular with voters, who have seen their energy bills rise sharply, while average wages have stalled. Mr Cameron believes that too many young professionals are being priced out of the property market because they cannot raise enough money for a deposit.
The Help to Buy mortgage guarantee scheme will be brought forward from January 2014 to next week.
Under the three-year scheme, the Government will provide up to £12 billion of “guarantees” to encourage mortgage lenders to offer more loans worth 95 per cent of the price of a property. The government guarantees are needed to reassure banks and building societies because of the risk that mortgage holders with such high loan-to-value deals will default.
The scheme is expected to enable banks to release £130 billion of loans for buyers of properties worth up to £600,000 who could not raise a larger mortgage deposit on their own. A smaller government loan scheme for people buying newly built properties began in April.
To cut a long story, the very same people can't afford to scrape together a decent deposit on an over-priced house are being expected to be able to repay a mortgage on a house where the price has been pumped up by yet another fifteen per cent or so?
Posted by Mark Wadsworth at 08:32 9 comments
Labels: Help to Buy, Home-Owner-Ism, House price bubble, Mortgages, Tories
Saturday, 28 September 2013
The Homey Game
This is a follow up to an earlier post about building near Lydiard Park in Swindon.
From Swindon Council
Swindon Borough Council is disappointed with a Planning Inspector’s decision today to allow 73 houses to be built on land along Hook Street close to Lydiard Park. He overturned a decision by the council’s Planning Committee in March to refuse planning permission.
Having heard the views of local residents, and following a site visit where objectors were able to point out their concerns, the Inspector determined that the scheme would have only a negligible impact on the landscape character, the historic park, and its setting.
The application, submitted by Pegasus Planning, is significantly reduced in size from an earlier proposal which was refused at appeal, following a Public Inquiry in 2011. However, the earlier decision established certain principles in planning law which made it more difficult for the Council to stop the new application from going ahead.(1)
Cllr Dale Heenan, Cabinet Member for Strategic Planning and Sustainability said "This decision is really disappointing, but not surprising."(2)
“I am pleased the Inspector agreed with residents and the Council that the last thing anyone wanted was for Lydiard Park to be taken out of the countryside and to become ‘an urban park’.(3)
“The application was refused by the Council with cross-party political support(4), but with Grange Park and a school directly next to Lydiard Park, a new development 300 metres further away was always going to be difficult to fight.(5)
1. And yet, the council decided to refuse the application, forcing it to go to appeal at considerable cost to the taxpayer.
2. More evidence that they shouldn't have opposed it.
3. I live near it. It's a park next to the 36th largest borough in the UK. I'm not knocking it, it's a nice park, but if you think it's the countryside, you probably think that Aunt Bessie makes your Yorkshire puds.
4. As you'd expect. It's going to be interesting to see where Ed is going to build all his houses when Labour councillors face losing their jobs when it happens.
5. Precisely.
Something that should be pointed out is that this process is more common than it should be. Councils often raise appeals despite the fact that they lose, because it's about sending out messages to all the local Homeys that they're going to watch over their house prices.
Posted by Tim Almond at 15:08 3 comments
Labels: Home-Owner-Ism
Land, oil, gas, rents, price caps etc
1. The knee-jerk industry response to Red Ed's musings about price caps for energy prices was that "We can't help it if world market prices for oil and gas go up, if you impose price caps that's tantamount to forcing us to sell at a loss and we'll have to shut down".
Well, maybe they would, maybe they wouldn't, but that is only if the UK were to do this in isolation. Because while the world market price (WMP) for oil or gas (O&G) is whatever it is, that price is far in excess of the actual cost of getting it out of the ground (AC); so any price cap which Labour dream up would be lower than WMP but higher than AC.
But what if most governments formed an oligopsony and agreed a universal price cap: nobody is allowed to pay more than $x for a unit of imported O&G? As long as $x is in excess of AC, then we can assume that exporters will continue exporting as they can still make real profits.
2. This leads me to my next topic, which is the truism that when the economy does better, demand for O&G increases disproportionately, and because supply is relatively price insensitive in the short or medium term, O&G prices increase super-proportionately.
Which is a vicious circle for importing countries. Let's say that at current GDP levels, 5% of our GDP output (call it £1,500 billion a year) is spent on importing O&G (call it £75 billion a year).
If GDP goes up 10% to £1,650 billion, then O&G prices go up by a lot more, say 20%, so we are now importing 10% more OG at a 20% higher price, £75 billion x 1.1 x 1.2 = £99 billion, which is 6% of our GDP; or £24 billion of that extra £165 billion GDP (15%) disappears abroad, to be recycled when exporting countries buy up assets in the UK.
3. Economists tend to see land/location rents and O&G prices as two separate topics (apart from those insane economists on far left and far right who deny that land rents even exist), although they both come under the same general heading of "land" or "natural resources". Land Value Taxers agree that both are suitable subjects for taxation, but also tend to see them under separate headings, or suggest taxing them for subtly different reasons.
But remember that land/location rents are merely a function of average net wages minus the costs of a basic minimum living standard; so a small percentage increase in GDP or wages leads to a much larger percentage increase in land/location rents - even though the landowner's actual costs (AC) have not changed and what he is providing has not changed (he is sub-licensing the same government-granted exclusive right to access to land).
Similarly, O&G prices are a function of how well the global economy is doing, and the costs of extraction are fairly fixed, so a small % improvement in global GDP leads to a larger % increase in O&G selling prices and, mathematically, an even larger % increase in the pure profit/rental element (WMP minus AC).
So ultimately it is the same thing - if the economy grows, landowners get a larger and disproportionately larger share; and O&G exporters get a larger and disproportionately larger share. If your landlord is a Russian or Saudi Arabian, it's all the same as far as he is concerned.
4. Finally, price caps.
Let's apply the logic from Part 1 above to land/location rents. Although most housing market commentary talks about changes in selling prices, it is rental values which drive the markets, they are the Maypole around which house prices dance.
We know that while rent caps work in the short term, in the medium and long term they lead to all sorts of unwanted side effects.
But what if the boot were on the other foot? What if we look at the demand side, not the supply side?
In other words, instead of the government preventing individual landlords from charging "market rents" (being average local net wages minus basic living costs), the government made it illegal for any tenant household to spend more than 10% of its gross income on rents, or for first time buyers to spend more than 10% of their gross income on monthly mortgage repayments?
It wouldn't actually need government action if tenants/first time buyers themselves would wake up and organise themselves, i.e. form an oligopsony and agree among themselves that "nobody pays more than ten per cent on rent"?
5. For the sake of this discussion, let's assume that the average tenant household in the UK pays £9,700 in rent and the average tenant earns £28,000. On average, a tenant household has one-and-a-half earners, so has gross income of £42,000.
If only a small number of tenant households did it, then they would have to downsize, but what if every tenant household did it? They can't all be forced to downsize. Every landlord would want to attract the highest-earning tenant household (as at present) but the highest-earning tenant household in turn would want to live in the nicest house.
So our high-earning tenant household with gross income of £100,000 now know that they only have to pay £10,000 a year in rent instead of £20,000 or £30,000. Their landlord will be a bit miffed, and when the tenancy comes up for renewal, he will try and find a tenant household earning £110,000; but that even higher earning household will only be paying £11,000 for something much nicer so won't want to down-size etc.
The upshot of all this is that gross rents will fall by half or so; our average tenant household will be paying £4,200 for an average sort of house which costs the landlord a lot less than £4,200 to maintain and insure, so he is still making some money; but pure land/location rents, the excess of gross rents over actual costs will fall disproportionately (to a few hundred pounds per home per year in most places).
But - and this is the important point - very, very few tenant households would end up moving. The highest earners remain in the nicest homes, the average earners in the average homes and the lowest earners in the cheapest homes. So the allocation would still be a free market allocation - if you want to live somewhere nicer, then try and get a better job or a promotion, or do more overtime etc.
6. Remember, this is a cultural thing.
There is no hard and fast rule on what a basic minimum standard of living is, we can only work out the annual cost thereof by observation, even though we do not know what this basket includes (and it is almost certainly different things for different households).
If it simply became tradition or custom that "nobody spends more than ten per cent on rent" then the amount spent on "everything else" would go up accordingly and over time, this would become the new basic minimum. We know that output would increase (less money disappearing into the LMBH) and with higher output, unit costs would decrease (same fixed costs divided by larger number of units of output).
Posted by Mark Wadsworth at 13:45 2 comments
Labels: Economics, Ed Miliband, Gas, Monopoly, Oil, Pricing, Rents
Friday, 27 September 2013
"The Loneliness of The Long Distance Blade Runner Runner"
From Wiki, Wiki and Wiki:
In Los Angeles, November 2019, retired Princeton student Richie Furst (Justin Timberlake) is detained by officer Gaff (Edward James Olmos) and brought to Ruxton Towers, a borstal (prison school) for delinquent youths.
Furst, whose job as a "Blade Runner" was to track down bioengineered beings known as "replicants" is cheated out of his tuition money by playing online poker. He seeks solace in long-distance running, attracting the notice of several replicants which have come to Earth illegally; as Tyrell Corporation Nexus-6 models.
Long-distance running offers Furst a welcome distraction from the brutal drudgery of the school's corrupt owner, Ivan Block (Ben Affleck), but he is lured into becoming Ivan's protégé and right-hand man.
Furst watches a video of a Blade Runner named Holden (Morgan Paull) administering a "Voight-Kampff" test designed to help the school to win an important cross-country competition against an FBI agent, Zbysko (Harrison Ford), who tries to use Furst to bring Ivan down. The subject of the test, Leon (Brion James), shoots Holden after Holden asks about Leon's mother.
For Ruxton Towers to win the cross-country race would be a major PR boost for the establishment, and Furst has an obvious incentive to retire Leon and three other replicants - Roy Batty (Rutger Hauer), Zhora (Joanna Cassidy) and Pris (Daryl Hannah).
Furst initially refuses, but after Zbysko ambiguously threatens him, Furst reluctantly agrees to trick Block into thinking he has escaped to Antigua, while in fact he's on Puerto Rico, part of the USA, and after speeding ahead of the other runners he deliberately stops running a few metres short of the finishing line.
Posted by Mark Wadsworth at 17:19 2 comments
Labels: Films
"Help to Buy: Osborne asks Bank of England to keep closer watch"
From the BBC:
Chancellor George Osborne has asked the Bank of England to take a bigger role in ensuring his Help to Buy housing scheme fuels a property boom.
The Bank's Financial Policy Committee (FPC) will make annual reviews of the scheme, starting next September. The committee had been due to make an assessment of Help to Buy only after its first three years of operation.
Inflated
But the recent patchy recovery in parts of the housing market has raised questions about whether the scheme is having a big enough impact.
Help to Buy was originally launched to help buyers of new properties. A second, potentially much bigger phase of the scheme is due to begin in January to assist vendors who wish to sell to buyers who are unable to afford a down payment on a home.
Bubble
The scheme provides taxpayer insurance for up to 15% of a mortgage on houses worth up to £600,000, allowing banks to provide up to 95% mortgages at a reduced risk to themselves, but an increased risk to the taxpayer and the real economy.
The Bank of England's FPC will be able to modify parts of the scheme to keep prices on the boil.
It will be allowed to review the scheme and could increase the £600,000 cap, so more homes are affected.
Great torrents of foam
The FPC could also also make loans more attractive by recommending that the Treasury reduces the fees paid by lenders for the guarantees.
BBC business editor Robert Peston said the chancellor had responded to criticism that his Help to Buy scheme was not causing the housing market boom which he had promised.
Posted by Mark Wadsworth at 07:40 1 comments
Labels: Help to Buy, Home-Owner-Ism
Thursday, 26 September 2013
Interesting comment on immigration
Nod2glod at HPC, in the context of something completely different:
For me the key to the migration issue is entitlements. Only people who feel they are entitled to things, i.e. free money, land, public services are worried about immigration.
"Oh those immigrates are taking our - jobs; housing; services; land, etc."
If you only get what you work for, then having other people here is less of an issue.
The whole concept that the fact you were born on a piece of land within an imaginary line drawn on a piece of paper gives you a set of entitlements is ridiculous when you stop to think about it objectively. It all comes down to the defence of the entitlement to take other people's labour, which is the basis of our tax and spend society.
Posted by Mark Wadsworth at 21:13 14 comments
Labels: Immigration
Makes you proud to be human
From the BBC:
Barely half an hour after they were jolted by a major earthquake on Tuesday, people of the Pakistani coastal town of Gwadar had another shock when they saw a new island emerge in the sea, just over a kilometre from the shore.
A local journalist, Bahram Baloch, received the news via a text message from a friend.... Mr Baloch and some friends landed on the island on Wednesday morning to check it out and to take pictures...
"There were dead fish on the surface. And on one side we could hear the hissing sound of the escaping gas," Mr Baloch said...
So what did our intrepid explorers do next?
Although they couldn't smell gas, they did put a match to the fissures from where it was oozing, and set it on fire.
"We put the fire out in the end, but it was quite a hassle. Not even the water could kill it, unless one poured buckets over it."
Posted by Mark Wadsworth at 14:09 4 comments
Labels: Earthquake, Elfin Safety, Fire, Pakistan
"Little White House On The Prairie Down"
From Wiki and Wiki:
Although predominantly a drama, there are some comedic moments. The show's central characters are Charles Ingalls (Channing Tatum), a U.S. Capitol Police officer who is assigned to the Speaker of the House, his wife Caroline (Richard Jenkins), after Ingalls saved Caroline's nephew's life during a tour in Kansas.
Cale is struggling to develop a better relationship with their four daughters Mary, Laura, Carrie and Grace (Joey King), who has a strong enthusiasm for politics. He hopes to impress them by getting a job with the Secret Service and adopting three children - Albert, Cassandra, and James.
His hopes are dashed when the interviews are conducted by the Oleson family - Nels, proprietor of the town's general store and his malicious, gossiping wife, Harriet (Maggie Gyllenhaal), a former college acquaintance of his who believes him to be unqualified due to a lack of respect for authority and follow-through.
After lying to his four daughters about the outcome of the interview, the Ingalls family joins a tour of the White House. At the same time, U.S. President Rev. Robert Alden (Jamie Foxx) proposes a controversial peace treaty between Lars Hanson, the town's founder and proprietor of the town's mill; and Dr. Hiram Baker, the town's physician.
Meanwhile, Mary Ingalls meets teacher-turned-husband, Adam Kendall, a mercenary disguised as a janitor, who detonates a bomb at the center of Oleson's Mercantile, the town's general store.
Posted by Mark Wadsworth at 10:54 0 comments
Labels: Films, Television
Wednesday, 25 September 2013
The House That £100k Built (Episode 2)
I'm watching the second episode on BBC2 right now, it's exactly the same as the first.
The "self-builder", widowed Sumati (which the voice over pronounces "Timothy", go figure) pays £100k for the land/plot* and spends the rest of her life savings - £50,000 - on building the actual cottage she will live in as cheaply as possible, using salvaged materials etc.
These Homey fuckers, honestly. Why don't they cut the crap and do a series called "The plot of land which cost £100k"? That's the so-called self-builder's biggest problem, designing and building a house and having it built for somewhere between £50k and £100k is the rewarding and easy bit.
* The way the story tells it, she bought what she thought was a habitable little cottage for £100k and had some money left over to do it up and is disappointed to learn it is a wreck. But it is clear from the context that any sane person would have know that the old building was uninhabitable, which is why she could acquire it so cheaply, and the old cottage is demolished in the first few minutes of the programme and she starts again from scratch.
Posted by Mark Wadsworth at 21:07 12 comments
Labels: BBC, Construction, Home-Owner-Ism, Residential Land Values
More NCEisms
Following on from the "A Search-Theoretic Critique of Georgism" post earlier, I found this elaboration by one of the authors here.
Gochenour, gives us a valuable real life example of how landowners create land values, and therefore all Land is Capital etc, etc.
An illustrative example: say an undeveloped lot near a residential area is valued at $x, the sale price at auction.
The new owner, an entrepreneur, has local knowledge and believes that the lot is a good place for a business. He canvasses the neighborhood and decides to build a restaurant serving delicious BBQ sandwiches. He believes he has a solid chance of running a successful restaurant, so he takes the risk and embarks upon the project. Ten years later, the restaurant turns out to be a success.
Sadly, the restaurant burns to the ground in a freak conflagration. The rubble is cleared and we are left with an empty lot. But is it the same lot as before? Should it be valued at $x? Now, everyone knows a successful restaurant could be built here, before, no one knew. The “unimproved” value has changed. For that matter, the value of nearby lots is likely to have changed as well. What happened to the value of big commercial lots in semirural areas after the first successful Wal-Mart?
There are a couples of point here:
Firstly, the site described above had potential, which the search discovered (costs which the entrepreneur incurs before he bids for the site - he pays these in his capacity as entrepreneur and not in his capacity as landowner). The other people at the auction were too lazy, unimaginative, skint to put in a higher bid. Only later when the restaurant became a success was the full value of this location revealed. But it would have been revealed to anyone who built a well run enterprise from that location.
Can it really therefore be said, the restaurateur created the potential i.e. the added land value, or just exploited its full potential? What exactly was innovated? A tasty new way of BBQing ribs perhaps, but is that a new use for land? I'm pretty sure retail was discovered quite a long time ago.
If we take Gochenour's logic further, if someone naively pays too much for a plot of land, they are destroying land values? Personally, I think they are just an idiot. The only thing they've really destroyed is their bank balance.
At the end of the day, if any business has to include an under valued site as part of their plan, they haven't got a viable business.
Secondly, a lot NCEist use efficiency as a reason against LVT. What if in the example above the restaurateur had rented the plot instead. The landlord is in effect collecting private LVT. As we all know, had the restaurant been a rip roaring success he would have put his rents up.
So for consistency, as well as arguing against the public collection of site values on grounds of efficiency, NCEist's should also be calling for a ban on private landlords or for rent controls.
But, of course they never have and never will. Funny that.
Posted by benj at 19:39 11 comments
Labels: Brainwashing, Hypocrisy, Land Value Tax, Neo-Classical economics
Indian Bicycle Marketing
The Red and Blue Armies have declared Phoney War and as their battleground have chosen a storm in a teacup over very minor tweaks to two of our relatively less bad taxes. (They steer well clear of even mentioning the worst ones, 20% VAT on gross profits; 25.8% National Insurance on wages; and income-based withdrawal of benefits of around two-thirds of all wages up to a median income.)
Take it away, Matthew Sinclair of The TaxCollectors' Alliance...
ED MILIBAND made two big new pledges in his speech yesterday: lower business rates for small businesses, paid for by higher corporation tax on larger firms; and a freeze in energy prices for 20 months from the date of the next election.(1)
Economic reality would quickly bite for any government that tried to introduce either policy. There is nothing wrong with cutting business rates.(2) Lower rates would be a relief for many – particularly small firms and retailers. They often effectively pay half as much again on top of rent.(3)
But higher corporation tax rates for larger firms would not raise government revenue, except maybe in the short term. Just as firms in competitive markets cannot increase profits by charging higher prices, governments cannot just hike taxes and expect more revenue in return. Higher corporation tax will drive away investment and mean fewer jobs, lower wages and – in short order – less revenue for the state.(4)
1) This is indeed a stupid idea, seeing as it is UK government policy to push up consumer prices with all sorts of bizarre green taxes and rules, many of which Mr Ed himself introduced himself a few years ago. Let's get rid of those first, think seriously about nuclear power, fracking, improving competition and so on and see what happens.
2) There is everything wrong with cutting Business Rates across the board. This only makes sense in very run down areas where the rates are in excess of the site-only rental value.
3) That's the whole point, you wanker. Business Rates are - officially - supposed to be 46% or 47% of the rent payable to the landlord. So if some are paying "half as much again" then that is not far off and within a reasonable margin of error anyway.
More to the point, it is a circular calculation and the tenant does not actually pay a penny in the long run - if he knows that a place has a total rental value of £14,600 then he works backward and decides that a fair rent is £10,000 because there will be £4,600 rates on top. So really, the rates are only 31% or 32%.
4) Oh do fuck off, Mr Sinclair. All Labour have suggested is pegging corporation tax at 21% for large businesses instead of reducing it to 20% a couple of years in the future (i.e. the current mainstream rate is 23% and the Lib-Cons have proposed reducing it in 1% steps all the way down to 20%, which certainly has the merit of simplicity).
If the Tories really thought that 21% is so terrible, why have they set the rate at 23% for the current year?
I am a devout believer in the Laffer Curve, and if corporation tax were the only tax, whether it is 20% or 21% is completely irrelevant, they are both on the upward slope of the Laffer Curve, the deadweight costs of such a low tax are negligible (1% of GDP?).
The effect he refers to only kicks in if taxes are above 60% or whatever the revenue-maximising rate is and are reduced to below 40% or something where there is a noticable reduction in deadweight costs.
But of course, corporation tax is not the only tax, and is a relatively minor tax in the grander scheme of things, it raises one-third as much as VAT and one-third as much as National Insurance, why not have a think about those first?
Posted by Mark Wadsworth at 11:22 13 comments
Labels: Business Rates, Corporation tax, Indian bicycle market, Politics
Tuesday, 24 September 2013
Reader's Letter Of The Day
From the FT:
Sir, Your report on Mark Carney's promise to keep interest rates low missed the main flaw in the idea (Pound up as unemployment falls to 7.7%, September 12).
As ... Mervyn King pointed out, an interest-rate cut simply pulls investment forward in time. And that works for perhaps two years, after which the cut has no effect.
So while an interest rate rise would be deflationary, continued low rates à la Mr Carney will not be stimulatory.
Ralph Musgrave, Durham, UK.
Posted by Mark Wadsworth at 14:35 17 comments
Labels: Economics, Interest rates
There's a moose loose aboot this hoose etc.
From The Daily Mail:
State wildlife officials have tranquilized a moose on the loose in suburban Denver.
Colorado Parks and Wildlife officers were called on Monday to capture the animal, which had been wandering the streets of Broomfield for weeks before it became a problem for residents.
The agency estimates the male moose is 3 years old and weighs about 1,000 pounds. KMGH-TV reports the animal was spotted wandering through residential neighborhoods [sic] and in and out of people's yards.
Wildlife officials say the moose caused no injuries or major damage and will be taken back to the Continental Divide, where it can find food and water.
It is not reported whether they caught it with a noose and/or whether they fed it some mousse or juice before turning it loose etc.
Posted by Mark Wadsworth at 13:54 3 comments
Hard Working Houses?
As mentioned by the ONS and picked up by the FT Alphaville team, London house prices are up 9.7 per cent over the 12 months to July.
With the average London house costing £438,000, the capital gain was worth £38,729. The average London household post-tax wage, however was of £38,688 in 2011 (apparently the last year for which the ONS has statistics).
Now, there are some issues with cross comparison and the FT freely admits that it hasn't factored capital gains, paying foxtons, getting the money while having somewhere to live, potential transaction costs but as the article concludes;
"London houses don’t sleep or take holidays, and earned £4.42 every single hour of the year to July."
Posted by SumoKing at 12:50 1 comments
Labels: House price bubble
Aditya Chakrabortty snatches Failure from the Jaws of Success
I wouldn't normally link to the Guardian, but there's an article that's really worth reading just to grab all the various facts laid out in it about the problem of too much degree education. No, really, go and read it.
Just prepare yourself for the epic facepalm at the end
University isn't just about getting a job, you might retort. I couldn't agree more. But that's what the political class has reduced it to. All the stuff that makes learning worthwhile – broadening one's horizons, having daft but heavy arguments with new friends – all that just gets lip service from ministers. And in turn, they've shaped an higher-education system that allows less and less space for speculation and taking intellectual risks. How are you meant to do that when three years at uni can now easily cost 50 grand, and you need to do one or two part-time jobs to pay the rent? What you're left with now increasingly looks like the degree factories the critics always warned against – only without the degree-level jobs to go alongside them.
On the contrary, that's exactly what the political class hasn't done. A jobs-orientated political class would have never increased the number of graduates from 19% to 40%. Or allowed so many courses in underwater basket weaving. Or when it appeared to be producing lots of BAs in underwater basket weaving rather than engineering or veterinary medicine, to have intervened.
As for having daft and heavy arguments with friends, you know, you don't need to go off to university to do that. There's this place called The Internet.
Posted by Tim Almond at 12:15 5 comments
Labels: Education
Homey-In-Chief Emeritus* on top form
From City AM:
WHAT, exactly, does the Labour party think it is doing? It wants to hike – yes, hike – corporation tax if it is elected in 2015, the latest of a long list of utterly destructive policies unveiled in recent days. The idea is that this will "pay" for a freeze in business rates on small firms, which means that the net burden on business will remain unchanged.
But this is a nonsensical idea on every level, not least because every sensible nation is reducing its tax rates on profits to try and woo globally mobile firms, and the UK's efforts had started to be noticed internationally.
All good stuff so far, low taxes on income attract businesses and wealthy people; high taxes on income drive them away. But you cannot drive land or landowners away and any tax thereon (e.g. Business Rates) merely reduces the price which a new entrant has to pay for the land (purchase price or rent).
Having made a good start, he then goes completely off the rails and contradicts his first two paragraphs:
Yes, business rates – which are levied on premises – are an appalling, antiquated tax (1) and are accelerating the demise of the high street.(2) Rates favour online firms with more limited premises.(3) Many retailers – such as Tesco or Sainsbury – pay far more in business rates than they do in corporation tax.(4)
1) He says "antiquated", I say "tried and tested".
2) Business Rates are levied on all business premises - including out-of-town shopping centres. So that's a level playing field. And by and large, high street shops are actually owned by smaller landlords or might be owner-occupied. Out-of-town shopping centres are usually owned by huge multinationals. So these multinationals are using the "small independent retailer" as a convenient human shield (see also "Poor Widows In Mansions").
Further, all tenants care about is the total bill of rent plus rates, they do not care how it is split up. So instead of arguing that rates are too high, you could equally argue that rents are too high and there's a free market solution to that.
NB, it's all about car parking (and bus routes etc.), actually. That's what "the high street" needs most.
3) Online retailers use land more efficiently, they can manage with lower value sites for their warehouses, so they pay less in rent and less in Business Rates. What's his problem?
4) That's their choice, isn't it? If they couldn't secure a huge advantage by owning prime sites with big car parks, they simply wouldn't pay the Business Rates. They also spend a lot more on wages and goods for resale than on Business Rates and corporation tax put together, so does he go on to suggest that people should be willing to work for free or provide goods for resale for free?
And like a true Faux Lib, he does not mention VAT at all, even though Tesco and Sainsbury pay far more in VAT than in Business Rates and corporation tax put together.
* This vital role is now being carried out jointly by Mark Carnage and Georgon Osbrown.
Posted by Mark Wadsworth at 10:53 4 comments
Labels: Home-Owner-Ism, Twats
Monday, 23 September 2013
Banks. What are they for?
A: Not exactly. That is the money they use to make money.
Posted by Lola at 23:11 5 comments
Labels: Banking
Life Copies Satire
James Frayne in this morning's City AM:
[Ed] Miliband has a very narrow mission this week. He must deal with concerns in Westminster about his character to end speculation about his leadership. Nothing more. And this requires a speech designed to appeal purely to Westminster elites.
These elites only care about style. Miliband will therefore almost certainly be working on a speech to be delivered with no visible notes, and with decent jokes, surprising personal stories, emotional moments, and a cameo by his impressive wife. A few announcements will bulk out the coverage.
From this afternoon's Daily Mail:
Justine Miliband... has vowed to break with convention and speak out publicly about why she thinks Mr Miliband should be Prime Minister. The child actress-turned-barrister has begun making a public appearances and speeches at the Labour party conference to 'humanise' her husband.
Mr Miliband repeatedly said he would not copy David Cameron's habit of eye-catching photo opportunities while opposition leader, and would instead focus on policies.
Posted by Mark Wadsworth at 14:02 5 comments
Labels: Ed Miliband, Politicians
"The House That £100k Built"
Is a new series on BBC2.
Episode 1/6 featured "A young pizza van owner from Leeds [who] has an ambitious plan to build a four-bedroom house."
In the end, he was really struggling to stick to the budget of course, and ended up cutting corners, making do with second hand materials and so on.
The programme also briefly explained that he'd obtained the land "cheaply" because it was an infill site just big enough for one or two houses and thus of no interest to large developers (it only had a narrow access road between two rows of terraced houses, or through the middle of a longer row).
And even more briefly, it mentioned that he'd managed to acquire the land for "only" £100,000 - as much again as the entire construction cost of the house, which makes a bit of a mockery of the whole concept.
I assume that the programme makers don't even consider the £100,000 which disappeared into the Land Monopoly Black Hole to be a "cost".
Posted by Mark Wadsworth at 12:57 4 comments
Labels: BBC, Home-Owner-Ism, Monopoly
"The Devil Wears Pravda"
From Wiki and Wiki:
Andrea "Andy" Sachs (Anne Hathaway) is an aspiring journalist fresh out of Northwestern University. Despite ridiculing the shallowness of the Communist Party of the Soviet Union, she lands the job "a million girls would commit genocide for": junior personal assistant at Pravda, a Russian political newspaper started by the Russian Revolutionaries during the pre-World War I days.
Miranda Priestly (Meryl Streep), the icy editor-in-chief of the leading newspaper of the Soviet Union after the Russian Revolution subjects Andy to bizarre and humiliating treatment which Andy tolerates in the hopes of getting a job as a reporter or writer somewhere else.
At first, Andy fumbles with her job and fits in poorly with her gossipy co-workers, especially Miranda's senior assistant Emily Charlton (Emily Blunt). However, after the dissolution of the USSR, Pravda is closed down by the then Russian President Boris Yeltsin.
With the help of art director Nigel (Stanley Tucci), who loans her designer clothes, she suffers a huge economic downfall and is sold to a Greek business family. She also meets the attractive young Communist Party of Russian Federation (Simon Baker) who re-acquire her in 1997 and established her as their principal mouthpiece.
Problems arise in her relationships with her college friends and her boyfriend Nate (Adrian Grenier), a chef working from the same headquarters on Pravda Street in Moscow where Pravda was published in the Soviet days.
During its heyday Pravda was selling millions of copies per day compared to the current print run of just one treasured "Book", a mock up of the current edition, delivered to Miranda's home along with her dry cleaning.
Andy finally succumbs to the Communist Party's charms after spending the night with them and becomes well known in the West for her pronouncements as the official voice of Russian Federal Socialism.
Posted by Mark Wadsworth at 11:27 3 comments
Fun Online Polls: The BBC & Help To Buy Sell
The responses to last week's Fun Online Poll, as suggested by Ralph Musgrave, were as follows:
What do you appreciate most about the BBC? Multiple selections allowed
Dragging climate change into every issue - 65 votes
Air time given to Islamo-thugs - 58 votes
Bankster remuneration for pseudo leftie staff - 54 votes
The “house price increases” are good message - 38 votes
Promotion of paedophilia - 35 votes
All is forgiven. I love the BBC - 11 votes
Other. Please specify - 16 votes
101 voters
So now we know.
-------------------------------------
According to politicians, UK house prices - i.e. UK house prices in the South East, which is all they care about or are even aware of - are not in bubble territory and so the Help To Buy Sell subsidy is not doing any harm.
Surely - and unless I am very much mistaken - if houses were easily affordable for the sensible purchaser, then there would be no excuse for such a subsidy?
Surely, the very existence of the subsidy - or the fact that somebody would seriously have the nerve to even suggest it - is proof that houses are unaffordable?
But maybe I've missed something.
Vote here or use the widget in the sidebar.
Posted by Mark Wadsworth at 09:08 0 comments
Labels: BBC, Blogging, FOP, Help to Buy
Sunday, 22 September 2013
An Ed Milliband Whizzo Plan
From the Independent
Companies will be forced to train a British apprentice for every foreign worker they take on if Labour win the next election, party leader Ed Miliband has said.
Speaking in Brighton, where Labour is holding its party conference, Mr Miliband said the proposal was designed to reduce low-skill immigration and help create a “high wage economy”.
The party's plan would compel firms that hire workers from outside the EU to take on a similar number of apprentices from the UK. It claims that the policy would create up to 125,000 high quality apprenticeships over the next parliament.
“In our first year in office we will legislate for an immigration bill which has secure control of our borders, cracks down on exploitation of workers coming here undercutting workers already here, and says to big companies that bring in people from outside the EU that they can do that, within a cap, but they have got to train the next generation,” Mr Miliband said.
I'm not sure if Ed actually said it, but companies can't be forced to train a British apprentice. That would be against EU law. He could force companies to train up an apprentice from within the EU.
But how is this going to reduce low-skill immigration?
Let's imagine you're a software company and you want to bring over an experienced guy from India, especially someone with some rare skills. We're honestly going to force companies to spend money training up a software development apprentice, despite the fact that it then costs that company thousands, perhaps 10s of thousands to do so (after which the person can leave)? Reality: the work will be subcontracted out to India instead.
Or if you're a restaurant and bring over a bangladeshi chef, are we saying they have to now hire another member of staff, even though they only have jobs for one more?
If we want to have more people in jobs with good skills, the solution is as follows-
- Replace benefits with CI, which will encourage people to take jobs.
- Introduce LVT which will encourage more companies to set up in cheaper parts of the UK rather than offshore.
- Convert the old polytechnics back into polytechnics, remove their ability to grant degrees, and instead run more work related courses (e.g. C&G, BTEC) that provide the skills that employers want.
- Link part-time work and polytechnic education. So, either people can go to poly and get a course, or can get a job where 2 days a week, they go to college and learn skills that can be brought into the job.
Posted by Tim Almond at 23:35 8 comments
Labels: apprenticeships, Education, training
Desperate Straw Man Found. Now It's Idi Amin
I thought I'd post this link to an academic paper written by Zachary Gochenour and Bryan Caplan of George Mason University here, titled "A Search Theory Critique of Georgism".
In it, like all NCEists their main argument revolves around the fact the optimum use of any plot of land needs to be discovered, and that discovery has costs, which must be capital costs, therefore any tax upon land acts like any tax on capital i.e. there is no such thing as land rent.
Never mind there are dozens of examples of oil producing nations (including of course the UK, Norway, Libya, in fact, just about all of them) that have tax regimes in place that do tax this land rent for use as public revenue. That's ignored. Obviously.
More amusing is Caplan's assertion that any attempt to install a Georgist tax will result in a situation akin to Uganda under Idi Amin. Good KLN that. Original at least.
Anyway, the paper is littered with plenty of KLN's to keep us all entertained. But one did catch my eye, and perhaps worthy of comment.
"We do not mean to suggest that there is no merit in the idea of taxing relatively inelastic products as opposed to relatively elastic ones. However, we propose that there is nothing inherently special about land in this regard, and suggest that taxing of negative externalities (Pigou 1920, Baumol 1972) is plainly superior from an efficiency perspective."
Ignore the first KLN concerning the taxation of other inelastic products and consider his recommendation that Pigouvian taxes are plainly superior.
The thing is, LVT can be regarded as such a tax. It is the right to exclude under the law that gives land its value. We are all excluded equally (negative externalities). Under LVT we are all equally compensated.
Or we can regard monopolies as causing negative externalities. Again, LVT is just compensation for this.
Economists like Caplan flip flop around desperately trying to discredit LVT, but all they do is ultimately reveal the paucity of their arguments. It's all about protecting greed and privilege. Nothing else.
Posted by benj at 11:25 13 comments
Labels: Brainwashing, Caplan, Idi Amin, KLN, Neo-Classical economics, Pigou
Using infra red for area bombing
I've seen lots of TV programmes about are bombing campaigns during World War II, to sum up, they didn't like bombing in the day time because that made it too easy for enemy fighters, but the problem at night was actually finding the target.
An obvious counter-measure was having a blackout, it's fairly easy to get everybody to turn the lights off, have black out blinds etc. So they invented all manner of radio guidance systems, all of which were then jammed by the other side.
But you cannot just cool down a whole city. According to Wiki, the heat island effect was known about since 1810 and the temperature difference is "several degrees". And according to this, the Germans had been working on infra red scopes for tanks and so on.
So assuming the technology existed, if you had an infra red scope in the lead bomber pointing downwards, he'd be able to find his way across enemy territory in complete darkness by comparing the brighter/warmer smudges against where towns and cities are on a normal map, drop a few incendiaries to get the party started and hey presto.
The other good news about using an infra red scope, compared to radio guidance or radar, is that it doesn't emit anything which the enemy can detect from a distance.
-------------------------------
Which brings me on to another topic.
It was very difficult shooting down an aeroplane using ground based artillery, it is pure guesswork and the calculations are too complicated. But shining a searchlight on an aeroplane is a lot easier. If you can get two searchlights (or even better three searchlights) to lock on to and track an aeroplane, then using triangulation and so on, you can work out where it is and how fast it is moving.
All you'd have to do then is co-ordinate this with the artillery so that they are firing shells exactly where the aeroplane is going to be after however many seconds it will take it to reach that spot.
I was once talking to an old German guy who had to assist the anti-aircraft people in his youth. He told me that he'd asked the same question and the boss of the battery told him to shut the f- up about it, the military were actually doing top secret research into exactly that approach.
Posted by Mark Wadsworth at 10:41 1 comments
Labels: Warfare
Saturday, 21 September 2013
Citizen's income in practice
From Le Monde Diplomatique, via Moneyweek, we get a report of a practical demonstration of the benefits of a basic, un-means-tested income for everyone:
A new pilot study at Panthbadodiya could significantly change living conditions for the poor, and India’s approach to fighting poverty. The village is taking part in the Madhya Pradesh Unconditional Cash Transfer Initiative, a project run by the Self Employed Women’s Association (Sewa; a trade union that has defended the rights of women with low incomes in India for 40 years), with subsidies from Unicef (United Nations Children’s Fund) India.
The research director, Sarath Dewala, explained: “The experiment involves giving individuals a small sum of money, at regular intervals, as a supplement to all other forms of income, and observing what happens to their families if this sum is given unconditionally.”
There were no conditions regarding wages, employment, caste, gender or age, and the recipients could use the money as they saw fit. Besides social security benefits, adults received 200 rupees ($3.65) a month, and mothers were given 100 rupees for each child. Four of the villages had had help from Sewa for some years, with the organisation of support groups, savings cooperatives, bank loans, training in financial management and support during visits to local officials. Twelve non-participant villages served as controls for comparative study.
The idea of giving money to the poor without asking for anything in return startled some. “They told us the men would use the money to get drunk, and the women to buy jewellery and saris,” said Dewala. “But it’s a middle-class prejudice that the poor don’t know how to use money sensibly. The study showed that a regular income allows people to act responsibly. They know their priorities.
Studies at the beginning, mid-point and end of the project confirmed that, in villages receiving payments, people spent more on eggs, meat and fish, and on healthcare. Children’s school marks improved in 68% of families, and the time they spent at school nearly tripled. Saving also tripled, and twice as many people were able to start a new business.
Well, that's one prejudice disproved. Now we have to get over the "Giving money to the undeserving" one.
Posted by Bayard at 20:25 6 comments
Labels: Citizens Income, India
Little George was sad because nobody wanted to play with him
Posted by Mark Wadsworth at 12:04 3 comments
Labels: George Osborne, Help to Buy