All profits go to rent, part the manieth

From the BBC:

Politicians should stop using a "carrot of higher graduate earnings" to justify raising student fees or freezing repayment thresholds, say campaigners.

Those who do "should be charged with gross mis-selling", says Angus Hanton, co-founder of the Intergenerational Foundation (IF) lobby group. Having to pay back student debts will wipe out any graduate premium for most professions, claims the IF in a report...

The report focuses on tuition fee rises in England - currently capped at £9,000 a year - pointing out how successive governments have used the graduate "pay premium" to justify them. The premium is the amount of extra money it is estimated a degree can help graduates to earn over the course of a lifetime. The report says that in 2002, ministers put it at £400,000, but recent estimates have been more modest at about £100,000.

"The increasing number of graduates... is further undermining the value of a degree," it adds, with some previously low-to-median paid posts now requiring degrees. "Our research proves that the current £100,000 graduate earnings premium so often touted equates to an 'annual bonus' of just £2,222 over 45 years of work and is wiped out once National Insurance and income tax [and student loan repayments] are taken into account."

"The current system is fuelling a self-perpetuating debt-generating machine which short-changes young people," argues Mr Hanton.

We've done this topic often enough, there's a supply-demand erosion of the 'premium' and it is difficult to compare like-with-like. The premium for people who end up in protected professions - medicine law, accountancy, civil service - and/or who can piggy back their peer network - Oxbridge students - is as robust as ever; but the overall average premium is diluted down by people doing irrelevant degrees.

But the point stands; if having a degree at a cost of £x makes you £y better, more people will study until either £y is eroded down to £x or the universities increase their fees/rent £x up to whatever £y happens to perceived to be, until ultimately, half of people who did a degree end up worse off than if they hadn't.

The producer surplus remains intact, but the consumer surplus is eroded to zero. It is quite unlike normal goods and services where there is a producer surplus and a consumer surplus.

And One More Time for the Fat Lady at the Back...

Here

Richard Jones, policy adviser at the Residential Landlords Association, said: “Unless they make funding available, landlords will be forced to pass these costs on to tenants in the form of higher rents. It could also make being a buy-to-let landlord prohibitive. They could struggle to find such a large amount of money upfront.

“Landlords have been harshly treated. This is an extra stealth tax on top of all the other measures that threaten the finances of the sector.”

The concept of the ‘market clearing price’ hasn’t penetrated to the rent seeking sector then.

This money creation nonsense, to summarise for the umpteenth time.

1. Money is not a thing in itself (like mud or energy or clouds) it is a unit of measurement, like inches measure length, kilograms measure mass and so on.

2. Money is a measurement of indebtedness. If one person has 'money in the bank' that is only possible because somebody else owes the bank money.

3. Gold bugs please note, gold is not 'money' for these purposes, it is an actual valuable thing.

4. Lefties please note, bank notes are an asset, but the flip side is that the government owes the holder that money. Bank notes and government debts are not magically 'debt free'.

5. Banks have very little of their own money, and they don't even have to take deposits to make loans. The loans create the deposits.
- step 1, bank gives one person a cheque (or whatever its electronic equivalent is) to buy a house
- step 2, that persons buys house and gives cheque to the seller
- step 3, seller deposits cheque back with bank.

At end of the day, the banks' loans and deposits have increased by the same amount.

6. So really, banks are just glorified debt collectors, they collect the monthly mortgage payments from all the borrowers and make them available to the depositors. Banks just record a pre-existing state of affairs.

7. It is important to note that total bank lending is limited only by people's willingness to borrow. That is what creates the indebtedness of which money is merely a measure. The banks do not create the indebtedness, they just measure it and make a record of it. To say that banks 'create money' is only true in bookkeeping terms, but they have no more created it than Ole Romer decided what the speed of light is or created it.

8. Consider this simple example, a UK bank sets up a branch in Darkest Africa, how much money can it create? None because nobody has any income to repay anything and there is nothing worth buying.

8. So where does the underlying indebtedness come from? Easy, all adults who do not own land (yet) are deeply indebted to those who own land. The system says that they have to hand over several hundred pounds a month for the rest of their lives merely for the right to walk the earth. That is a massive great debt that each adult is saddled with, which vastly swamps student debts.

9. People who finish uni moan (probably rightly) about being saddled with tens of thousands of pounds of tuition fee/student loan debts. But they ought to realise that they are also carrying a debt of hundreds of thousands of pounds, being all the rent they will have to pay in future. Just because this debt is not written down anywhere does not mean it does not exist. So by going to university, their total initial debts are only one-tenth higher than the initial debts of school leavers.

10. The only way to free yourself from the liability to pay rent in future (a real but unrecorded liability) is to take out a mortgage (a real AND recorded liability), a very similar liability only with, hopefully, a limited number of years until it is paid off, even if that is half a lifetime.

11. So while in bookkeeping terms, banks appear to create money by splitting the zero, banks are just glorified debt collectors on behalf of landowners. The banks did not actually create that indebtedness.

In case I am going too fast, consider a town where everybody has a right to a council house for £80 a week, which is a fair price to pay as it covers the actual physical running costs. How much money/debt is there on paper? None, because nobody in that has a mortgage. Are school and uni leavers in that town saddled with a massive debt i.e. future housing costs? Nope. But what happens if the council decides to sell off all the housing cheaply to their current tenants and not build anymore..?

VAT vs LVT

I recently received another email extolling the virtues of VAT and saying that it fixes perceived problems that LVT can't.

Firstly, there is allegedly massive corporation tax avoidance, so VAT is a way of collecting a share of (taxable) profits at source. Nonsense, in relative and absolute figures, there is far more VAT avoidance/fraud that corporation tax avoidance/fraud. For example, Google were invoicing UK customers from the Rep of Ireland to avoid VAT, allegedly.

Secondly, it discourages consumption - the logic being that it thereby encourages investment instead. Duh. You will only invest in a business if it can produce and sell stuff profitably. If the amount of stuff it can produce and sell profitably is significantly reduced by VAT, then there is significantly less investment.

Thirdly, VAT falls more heavily on services (cutting each other's hair) than on exports of goods (which are zero-rated for VAT). That is blatant mercantilism and the opposite of free trade. Plus what's wrong with cutting each other's hair if it adds to the sum total of human happiness?

Finally, to the extent that you perceive the trade deficit as a problem, clearly, having 20% VAT has not reduced the trade deficit at all, unless some maniac wants to suggest massive import duties and 40% VAT? So it's an interesting theory but fails completely in real life.

Ask yourself, if we buy stuff from abroad, what is the foreign exporter going to do with its GBP?

A buy UK government bonds
B buy land (and collect rent in future which worsens deficit)
C buy shares in UK monopolies (railway, utilities, banks etc)
D buy shares in productive UK businesses
E invest directly in expanding a UK business
F buy goods and services from us

If the government is not running a deficit then A is not a problem, and deficits would be lower with LVT. Even if it is running a deficit, what matters is whether the money is being spent/invested wisely. Ultimately, those UK govt bonds will never be repaid and the interest cost is minimal, with or without LVT.

B - If we have a significant reduction in taxes on production and a corresponding significant increase in LVT, then they can't do B. If they acquire land, they will end up paying back their GBP to the government. The accumulated trade deficits melts away. So this also reduces future trade deficits (rental stream won't be going abroad).

C- Remember that what foreigners really like buying is rental stream/monopoly profits - railways, utilities, banks. This is not really "investment" at all. We can collect that rental stream at source via the tax system i.e. under the same principles as LVT.

D - If they want to buy existing businesses, then fine. Somebody builds a business and he can sell it to who he likes. The UK government always retains a 20% via corporation tax anyway.

E is always cheaper than D. UK shares trade at three times real assets, the rest is "rent", so why not buy plant and machinery and set up on your own? Clearly, whoever sold us "stuff" is good at making "stuff" and is well placed to make "stuff" in the UK, especially if the worst taxes on UK business (VAT and NIC are reduced/scrapped). He can spend £1 on shares for 4p a year dividends or spend £1 on plant and machinery for a 12p return. So more real foreign direct investment.

F - what are foreign exporters going to do with their remaining GBP, having exhausted A to E? They will spend it on UK goods and services.

(The foreign exporter could of course just leave the money in the bank, which the banks can then lend to UK businesses, which achieves D by the back door).

As a result of which, the trade deficit melts away, output goes up, unemployment is reduced, this is one of those things that LVT sorts out on its afternoons off, it is not the main event.
--------------------------------------------------
Or we can start from the other end.

The UK's trade deficit is about 6% of GDP, so if we increased output by 3% and reduced consumption by 3%, we'd be all square. Getting rid of VAT and NIC would increase our total output by far more than 3%, but let's call it 3% for now.

The 'UK' is merely the sum total of all its resident individuals and businesses. Any individual who produces more than he consumes is not contributing to the deficit. It is those who consume more than they produce who are. Most of those who consume more than they produce are living off rents; choke off the rental stream and they will either have to consume less or produce more.

Think about a Boomer/retired couple doing Mortgage Equity Withdrawal - they buy themselves a nice imported car and go on foreign holidays while producing nothing. MEW is 2% or 3% of GDP, so the total rental stream supporting the lifestyles of the non-productive (whether collected as capital gains, straight rent or mortgage interest) is a large multiple of 3%.

I really don't know what is so difficult to understand. This is not idle and untested theory, it is observation.When Denmark introduced modest LVT in the 1960s, their trade deficit quickly turned into a surplus (and back to a deficit again when the next government reversed it). Hong Kong has always had a surplus, and so on.

!!!!!

Words fail.

It's not exactly as if they weren't bloody well told all this years and years ago.

Shut it and the World Bank down.

Reader's Letter Of The Day

From the FT:

Sir, There is no capital gain to be had with houses, except for those of outstanding artistic merit (“Homeowners’ £18bn-a-year tax relief criticised”, July 26). Bricks and mortar wear out and require replacement or repair to maintain their value. House price inflation is invariably the result of land value increases.

With annual land value taxation there would be no increase at all on which to base capital gains tax. Instead the government would have a vast, secure revenue stream — in fact a virtuous circle, where local public (and private) investment leads to increased land value, and hence increased revenue to spend on public goods and services.

Carol Wilcox, Secretary, Labour Land Campaign, Christchurch, Dorset

Zoo animals: fighting back

From Cincinnati.com, last month:

A holiday weekend outing at Cincinnati's zoo turned doubly tragic Saturday when a 3-year-old boy was hospitalized after falling into a gorilla enclosure - and zoo workers had to kill the rare gorilla to protect the boy.

This month:

From NY Times:

A woman was killed by a tiger over the weekend after jumping out of a car in a Beijing animal park to try to save her daughter [who had foolishly got out of the car] from a tiger attack, local government officials said.

From The Evening Standard:

A seven-year-old girl has tragically died after she was struck by rock which was hurled by an elephant at a zoo in Morocco. The youngster was posing for a picture outside the animal’s enclosure when she was hit by the large rock in Rabat.

Not strictly speaking zoo animals but included for completeness:

From The Daily Mail:

A man from Valencia has died after being gored by a heifer in a bull-run near the southern Spanish town of Alicante.

The deadly incident occurred about 1 a.m. Saturday during late-night festivities in the small village of Pedreguera. The Red Cross says the heifer gored the 29-year-old man through the chest and stomach.

(What a heifer was doing at a bull run is not explained).

Also from The Daily Mail:

The wife of a top bullfighter looked on in horror as her husband was gored to death during a festival in eastern Spain. Victor Barrio, 29, from Segovia was fighting in Teruel, Aragon in eastern Spain when the bull speared him through the chest.

And a happy ending help calm our jangling nerves:

From The Daily Mail:

Clearly this tiny baby was just the snack this hungry polar bear was after. In an amazing video a bear can be seen instinctively attacking a baby in a Missouri zoo - but mercifully the tot is on the other side of the glass.

This is all getting a bit out of hand, I preferred the good old days when we just had cow attacks, that's a fair fight at least.

Killer Arguments Against Citizen's Income, Not (2)

From yesterday's Evening Standard:

Imagine if the Government paid every citizen a non-trivial amount of money — say, £10,000 per annum — simply for existing.

Enough so that you could bring up a child, or stay in education, or start a business, or cut down your hours, or simply rebalance your life without the constant, gnawing anxiety that we have come to associate with modernity. It sounds madly utopian, yet in a short space of time the idea has migrated from the wilder realms of economic theory to the shores of the mainstream.

Many economists, both from the Left and Right, now see UBI as a way of bypassing the paternalism and waste of the welfare state (the “big idea” of the 20th century) and answering the demands of the 21st century...

Wouldn’t it cost a lot? They reckon about 12 per cent of GDP, which would require a major recalibration of tax and social security. But welfare (including pensions) currently accounts for 11.7 per cent of GDP and much of that is wasted on simply administering the system.

His £10,000 would cost a lot more than 12% of GDP, but he's grasped the basic principle that various welfare and poverty-alleviating measures (unemployment benefit, old age pensions, the tax/NIC free personal allowance, tax breaks for pensions saving etc) "cost" a certain percentage of GDP. It is a simple exercise to take this figure and divide it by the number of adults = your weekly CI.

(Severe disability benefits are a separate topic and should be part of NHS budgets. Housing Benefit is a separate topic, but local councils could take the £10 billion-plus they pay out to private landlords and use it to build 100,000 council homes a year instead. or they could just borrow money to build 100,000 council homes a year, hey presto, in a few years time, there will be no need for HB for private landlords.)

So far so good, here's the first comment:

RoganM

Where does the government get money from - the governed. To pay for this universal 'gift' money would be taken from one hand to pay to another. As for 'the poor' investing in their future, a sizeable segment of the poor are broke because they cannot budget their spending. There's way too many of the slightly better off that are no better at financial constraint.

Theories are wonderful things when it comes to actual people. Unfortunately actual people don't shoehorn easily into theories.

Utter, utter twat, he clearly hasn't read the article - CI is just simplifying the existing system; he is clearly a judgemental shit; and fails to grasp that the best ideas - like CI - are based on how observing how people actually behave and working backwards from that. There is no fancy "theory" behind it.

Reader's Letter Of The Day

Spotted by Carol W in the FT:

Sir, I normally agree with your Europe correspondent, Wolfgang Münchau, and his incisive comments on European economic matters, but I disagree with him when he says that the eurozone “needs free movement [of labour] as a macroeconomic stabiliser — with people moving from countries with high unemployment to those with a shortage of labour” (“Opt-outs and the high price of misguided pragmatism”, July 25).

He states the orthodoxy, but not the reality. Labour migration is a dynamic process that tends to generate cumulative expansionary forces in the countries of destination and relative contractionary forces in the countries of origin; a process of “circular and cumulative causation”, as the famous Swedish economist Gunnar Myrdal once called it.

If one of the purposes of the free movement of labour (and capital) within the EU is to promote the convergence of European economies, the movement to an equilibrium is far from guaranteed. The free movement of labour from poorer to richer countries is not necessarily a “macroeconomic stabiliser”. The same argument applies to regions within countries: witness the continuing north-south divide in the UK and Italy despite years of labour flows from poor to richer regions.

The disequilibrating nature of free factor movements is a powerful reason for taking work to workers, rather than encouraging the free movement of workers to work. The EU could do much more in this regard if it is serious about the economic plight of the peripheral economies of Europe with high unemployment.

Tony Thirlwall, Professor of Applied Economics, Keynes College, University of Kent.

I don't agree with his conclusion (i.e. that we should encourage businesses to relocate to low-wage/high-unemployment areas), but the observation is sound: free movement increases regional inequalities. (I suppose some would use this as justification for restricting freedom of movement, I'm not sure that's a good idea either).

This is exactly mirrored by land values, of course. If people move from north to south, then land values in the south will increase, regardless of how many new homes are built there (building more homes to dampen prices is like throwing twigs on a fire to cool it down - more homes = more people = even higher values), and land values in the north will fall.

The obvious policy conclusion seems to me to just leave capitalism to itself to do what it does best (i.e. allow free movement and avoid subsidies to poorer regions) and collect the uplift in destination areas via LVT; reduce other taxes accordingly and distribute the rest as a Citizen's Dividend and you are half way there - stronger economy and less inequality. What's not to like?

Killer Arguments Against LVT, Not (400)

I was waiting for something really epic for the fourth centenary instalment, but Benjamin's has neatly goaded somebody into painting themselves into a corner over here so let's do that one:

Will Douglas-Mann. Thanks for the link [to the YPP flat tax app which shows that most working age households would pay significantly less in tax under a 50/50 income tax/LVT system - also available at Google Play Store]. I am a supporter of LVT in principle and have spent much time discussing it's obvious benefits over the past few years...

That's always a warning light, those detractors who start by saying they support a shift to LVT, but...

If LVT had been introduced twenty or thirty years ago I can see how we would have avoided many of our current problems. I do see considerable difficulties introducing it now before dealing with the current (unsustainable) house price bubble.

Tried and tested KLN, "Yes, if we had introduced it years ago, it would have all sorted itself out by now, but we have left it too late [and by implication it will always be too late for ever and ever]."

Further, it is easy to introduce LVT so that it is 'affordable' for nearly everybody, it doesn't have to be 100% full-on LVT from the word go. How about a modest LVT to replaced Council Tax, SDLT and IHT to get the ball rolling (about 0.9% of current selling prices or 25% of site premiums)? If you are sensible about which taxes to replace/reduce with each increase in LVT, most people will hardly notice the transition.

Finally, LVT assessments are based on rental values, not selling prices. The fact that house prices are unusually high at the moment is completely irrelevant to assessments and is an argument for introducing LVT ASAP, not an excuse for delaying.

According to the YPP tax calculator if LVT were introduced now our tax bill would be greater than our household income! Property prices have increased tenfold in some areas, wages and salaries have stagnated so I guess our situation would be fairly typical.

Bollocks. He admits further down that he is looking at the West Country, where house prices are unusually high (retirees and second home owners) but wages are unusually low. Clearly, local rents are dictated by local wages (and hence affordable for most) and even a full-on 100% LVT would be a few thousand pounds a year lower than rents (hence affordable for nearly everybody). It must be added - the app probably overestimates rental values in such areas.

(To put this into a real life context, I have been asking people for over ten years whether they would be qualify for and be able to repay a mortgage big enough to buy their own house; most admitted they wouldn't be able to, even ten years ago. Next question: would you be able to afford to rent the house you live in? Most answered yes. As things stand, I would not have a hope in hell of getting a mortgage to buy our current house (worth about seven or eight times our joint income); renting would be a squeeze but do-able. And if all but the unemployed can afford to rent somewhere, by definition all homeowners can afford LVT, even ignoring corresponding cuts to VAT, NIC and higher rate income tax.)

Back to the KLN - if you type his suggested figures back into the calculator, you will see hey presto, that low-earner couple household would end up paying £4,000 less tax every year. So he is clearly deliberately lying or was too lazy to actually use the calculator (unless he earns £15,000 a year and his house happens to be worth £500,000 or something - in which case, what ask what sort of accommodation a tenant earning £15,000 can afford).

I'm not sure what the solution would be, possibly a period of wage inflation to get values in line with incomes before LVT could be considered.

Double bollocks, see above. "Values" i.e. rental values are always in line with incomes; LVT is always less than rental values.

Maths joke

There are 10 kinds of people in this world.

Those who understand binary and those who don't.

Fun Online Polls: Renewing Trident & Islamist attacks in Germany

The results to last week's poll were as follows:

Renewing Trident: Which statement do you agree with more?

Scrapping Trident would be an act of gross irresponsibility - 75%
The threat of mass murder is not a legitimate way to deal with international relations - 25%

You are a bloodthirsty bunch, I was in the minority on that one.

Top comment by Derek:

Meh.

As far as I can see, in the 1940 and 50s an independent British nuclear deterrent made sense. By the 1960s it was beginning to look a lot less independent of the Americans and by the 1990s it was beginning to look a lot less like a deterrent. In the 2010s it just looks like wasted effort to me. It's no longer independent and it doesn't seem to be deterring our current enemies. So I don't think it would be particularly irresponsible to scrap Trident. If we are going to replace it we need to do so with something independent and effective.

But then mass murder (or war as it is more commonly known) is a perfectly legitimate way to deal with international relations. Immoral, unethical and unjust but perfectly legitimate. There are plenty of laws governing what you can and can't do but killing lots of people is pretty much taken for granted, including civilians nowadays.

So I don't find I can pick either option.

Can't argue with that.
---------------------------------------------
I was on holiday in Karlsruhe - a hitherto sleepy, peaceful and prosperous university/tourist town - for the second time last year, just after Merkel had opened the floodgates and I got a bad feeling about it; there were gangs of them in full Islamic get up having loud discussions/arguments/prayer sessions in the park and behaving aggressively generally.

The inevitable has happened (despite what my auntie, the Green Party councillor in Karlsruhe, had to say about it last year), so that's this week's Fun Online Poll:

"How many more Islamist attacks will it take before Merkel realises it was wrong to let a million of them in?"

Vote here or use the widget in the sidebar.

I am an extremely lucky bloke...

An easy way to remember all eighteen Pokémon types.

My little girl understands the rules of the game and can reel off the different types in some sort of inherently logical order.

I find it easier to remember them in the following order

ELECTRIC(ity) is used to make
STEEL which comes from iron ore, which is a type of
ROCK which is found in the
GROUND on which grows
GRASS in which you find a
BUG which might be
POISON(ous) or it might be
FLYING. Something else which can fly is a
FAIRY which is a kind of
GHOST who talk to people who are
PSYHIC who have séances in the
DARK which starts with the letter "D" like
DRAGON which breathes
FIRE when it is
FIGHTING.
NORMAL people fight fire with
WATER which when frozen turns to
ICE.

I hope that this comes in useful one day, I wasted ten minutes working that out and memorising it.

Hollande - not very good at logic or negotiations.

From the BBC:

French President Francois Hollande will tell Theresa May he wants to start talks on the UK's exit from the EU (1) as soon as possible, when they meet later. The UK's new prime minister has said she does not want to start the formal Brexit process until 2017.

But Mr Hollande has rejected any "pre-negotiations" (2) - and said the UK could not access the EU free market without accepting free movement of people(3).

... He said there should be no pre-negotiations before full and formal exit talks and added: "Access to the single market cannot be guaranteed unless free movement of workers is respected.(4)

... Pascal Lamy, a former World Trade Organization director general who was also chief of staff to ex-EU Commission president Jacques Delors, also said European leaders wanted to know what Mrs May was looking for. "What sort of relationship do you have in mind with the European Union?" he asked.(5)

Wot?

1. He can speak for France but he does not speak for the EU as a whole.

2. If he wants talks to begin, then why would it matter whether they are "formal" (meaning that the UK has applied to leave under Article 50) or "pre-negotiations" (meaning it hasn't)?

3. Free movement of people is an EU obsession, but is quite a separate concept from free trade in goods or services, which in turn could be dealt with separately.

We have plenty of precedents, such as the customs union between the EU and Turkey:

Goods may travel between the two entities without any customs restrictions. The Customs Union does not cover essential economic areas such as agriculture (to which bilateral trade concessions apply), services or public procurement.

They also agreed to a common foreign tariff, which sort of makes sense. If Turkish import tariff for Chinese goods is lower than the EU tariff, then people in the EU would import Chinese goods via Turkey.

UPDATE. The Fat Bigot points out in the comments: if Hollande has started harping on about free movement before Art 50 has been triggered, then he is engaging in pre-negotiations himself.

4. Real weasel words here. "[C]annot be guaranteed" is meaningless. A doctor cannot guarantee that a treatment will work, even though it usually does. "[U]nless free movement of workers is respected" is even vaguer. I can respect other people's places of worship and superstitions despite being an atheist who thinks it is all a load of cobblers and never takes part.

5. Lamy is not authorised to negotiate for the EU either. And I think the UK has made it pretty clear what it wants.

Theresa May: hopes raised, hopes dashed.

Via DBC Reed, from the FT, hopes raised...

On to housing. The wealth of some pensioners has expanded by more in retirement than it did in work simply because the value of their homes, which they tend to own outright, has risen so rapidly. That price expansion is largely due to repeated shortfalls in home construction and the increasing use of housing as a financial asset. Neither is directly the fault of baby boomers, but it means younger people are spending greater proportions of their net income on housing and taking on debt for longer periods — the Council of Mortgage Lenders reports that almost three-fifths of first-time buyers take a loan of more than 25 years.

Mrs May acknowledged this is an undesirable outcome: “Unless we deal with the housing deficit, we will see house prices keep on rising. Young people will find it even harder to afford their own home,” she said at her campaign launch [a fortnight ago]. “The divide between those who inherit wealth and those who don’t will become more pronounced.”

[The 'increased supply' thing is ineffective in itself, it has to be done together with a whole bundle of other things as the UK did pre-1980s to keep prices down. It fell far short of proper LVT but did the particular job on a rough and ready basis].

From The Evening Standard today (I can't find the link), hopes dashed...

Responding to the Labour leader calling for an end to austerity, she snapped "He calls it austerity, I call it living within our means."

(As background, the Tory government is running and historically they have always run, larger deficits than Labour governments. Weird but true.)

The brief exchange set out her battle lines against Labour on spending and home ownership. Mr Corbyn attacked the upper limit for [government subsidised loans to encourage first time buyers to pay more for housing] set out in government policies, saying it was too high.

But Mrs May pointed out that it reflected everyday life for people in bis Islington constituency.

All right, sod her, she's an evil Homey witch like the rest of them who has abandoned any principles she held a fortnight ago.

FFS, if the government wastes taxpayers'  money on encouraging first time buyers (a sub-set of taxpayers) to get even deeper into debt in order to pay even more for overpriced housing, how does she square that with the worthy idea of "living within our means"???

The revolving door spins ever faster...

There's a good article in The Daily Mail on the topic.

Here's the pithiest bit:

OUT OF OFFICE BUT ON THE UP

SIR NICHOLAS MACPHERSON: The former permanent secretary at the Treasury will become chairman of C Hoare & Co, a two-day a week position at Britain’s oldest bank. It has been accused of helping the wealthy cut inheritance and capital gains tax bills

SIR DANNY ALEXANDER: He was Chief Secretary to the Treasury before losing his Liberal Democrat seat in last year’s general election. He has been taken on by the Chinese-run Asian Infrastructure Investment Bank as vice-president and corporate secretary

SIR ERIC PICKLES: The Communities Secretary from 2010 to 2015 has been cleared to become director of a recycling and waste management company Leo Group. He spent his time in Cabinet trying to persuade councils not to axe weekly bin collections. But ACOBA said there was no conflict of interest because recycling was the responsibility of the Energy Department

NICK CLEGG: The former Deputy Prime Minister and Lib Dem leader has been given the go-ahead to take up six positions. They include working for News Presenters Ltd as a speaker, writing a column for the London Evening Standard, and starting a think-tank

SIR ED DAVEY: The ex-Lib Dem Energy Secretary can take up five posts. These include chairman of Mongoose Energy, a renewable energy firm, and consultant for MHP Communications, which has dealt with EDF Energy. He signed a money-spinning deal with EDF to build Hinckley Point nuclear power plant when in office.

They're all cashing in on the favours they did while in office. Bastards.

IMF: getting it arse backwards yet again.

From The Guardian:

The International Monetary Fund has slashed its forecast for UK growth next year after warning that the decision to leave the EU has damaged the British economy’s short-term prospects and “thrown a spanner in the works” of the global recovery…

Oh noes! Sticking with Project Fear. So what does the IMF suggest?

Policymakers in the UK and the rest of the EU have a vital role to play in reducing uncertainty, the IMF said. “Of primary importance is a smooth and predictable transition to a new set of post-exit trading and financial relationships that as much as possible preserves gains from trade between the UK and the EU.”

Well, duh.

That's what everybody wants, Leavers and Remainers alike. Mainstream opinion here appears to be that we are quite happy to remain in the tariff-free Single Market in both directions, it's just that - for whatever reason - we don't like unrestricted free movement of people from certain EU member states, and quite understandably don't like chipping in £12 billion a year for Eurocrats and subsidies for  agricultural landowners in other EU member states (insanely, the pol's are happy to subsidise UK farm land owners, many of whom are not UK resident, of course…)

It's only the top bods at the EU and the French who want to teach us a lesson and throw a spanner in the works. So go and have a chat with them, eh?

"Where Eagles Don't Dare"

From Wiki and the BBC:

In the summer of 1943–44, U.S. Army Brigadier General George Carnaby, a chief planner of the second front, is captured by the Germans when his aircraft is shot down en route to Crete.

He is taken for interrogation to the Schloss Jeremy Corbyn, a fortress high in the Alps of Islington. A team of Labour MPs, led by Angela Eagle and Owen Smith, is briefed by Colonel Turner and Admiral Rolland of MI6. Their mission is to parachute in, infiltrate the castle, and rescue General Carnaby before the Germans can offer him a job in the Shadow Cabinet.

Early in the mission, two of the operatives are mysteriously killed, but while Owen Smith is unperturbed, Angela Eagle throws away her uniform and weapons and hitch hikes home again.

Pokémon GO: rapidly reaching parody singularity.

Two headlines which caught my eye...

Pokemon GO 'is un-Islamic', Muslim cleric suggests

Warning: Pokémon GO Could Be A Death Sentence If You Are A Black Man

Bonus points for the first person to see the game being described as a gateway drug or claiming it reinforces gender stereotypes, and double bonus points for spotting the first article in The Daily Mailexpressgraph saying the main reason young people don't "get on the housing ladder" is because they waste too much time on it.

"London Bridge and East Croydon commuters face chaos on Southern Rail as sinkhole opens in Forest Hill"

Spotted by TBH in The Evening Standard.

Not much detail on how big or why, but the picture looks pretty unsettling, to say the least.

Fun Online Polls: Tony Blair & Renewing Trident

The responses to last week's Fun Online Poll were as follows:

Which of the following revelations in the Chilcot report were NOT blindingly obvious back in 2002 or 2003?

Bush was looking for an excuse to invade Iraq - 5 votes
There was no link between Al Qaeda and Saddam - 5 votes
Blair was Bush's poodle - 4 votes
The British Army was unprepared for a second war - 9 votes
MoD procurement is staggeringly incompetent - 10 votes
Saddam had no WMDs - 16 votes
There would be total chaos in the Middle East afterwards - 10 votes
Blair would mysteriously become very rich after leaving office - 28 votes
None of the above - 68 votes

Total - 114 voters

To me. all of those things were blindingly obvious except the last one - why Blair would mysteriously become so very rich afterwards. I did not see that coming.

Maybe Chilcot should have just followed the money and done a report into who channelled all those millions to Blair and why. That would have been much more interesting. Especially when Chilcot does a "David Kelly" half way through, of course.

What nobody else saw coming is that the Chilcot Report would be delayed for years and years and then 'released' two weeks after the EU Referendum, ensuring it would quickly disappear off the front pages. A coincidence? Was it fuck.
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This week's Fun Online Poll: should we renew Trident or not?

Vote here or use the widget in the sidebar.

"Turkish government had enormous arrest lists ready ‘just in case'"

Newsthump on top form.

Pokémon Go is the new sat-nav

When sat navs first became widely used, for years the papers would be full of stories about people driving into lakes and lorries stuck in narrow alleys because they blindly followed their sat-navs. The Daily Mirror did a top ten mishaps back in 2008.

Then taking selfies became all the rage, Wiki has a list of serious injuries and deaths resulting from this activity.

And now it looks as if we are going to be bombarded with people coming a cropper because they were playing Pokémon Go.

Here are a few from the past week:

Florida man shoots at Pokemon Go players after hearing the teens say 'Did you get anything?' and mistaking them for burglars

Teen Killed Trespassing While Playing Pokemon Go

Pokemon GO players stranded 100ft underground in caves while searching for characters

Doesn't have the same appeal as cow attacks though.

Dieselgate lies...

Car weekly Autoexpress reports that Volkswagen Audi Group have been on the receiving end of an ear-bashing from EU officials for refusing to pay compensation to 'dieselgate' owners in the EU.

  "... members of the European Commission have struck out at the German carmaker, demanding it to pay equal compensation to affected owners outside the US. 

European Commission commissioner Elzbieta Bienkowska said: "Volkswagen should voluntarily pay European car owners compensation that is comparable with that which they will pay US consumers with. Treating consumers in Europe differently than US consumers is no way to win back trust."

 Speaking before the Environment, Food and Rural Affairs Committee, Paul Willis, Managing Director of Volkswagen Group UK, said: “To pay compensation there has to be a loss, and at this stage I see no reason for there to be a loss. Our engineers tell us there will be no difference in fuel consumption or driveability. “So the only other area is on the question of residual values. I, at the moment, have seen no clear evidence of adverse impact on residual values. So when I say that there is no loss, then there is also no need for compensation.” 

 Yet VW may not be off the hook completely. The UK Government has stated that if evidence of consumers suffering from falling residual values or vehicle performance emerges, VW would be liable to compensate owners. 

 Transport spokesman Viscount Younger of Leckie said: "The Competition and Markets Authority has not opened a formal investigation but is continuing to assess whether there is evidence of consumer harm."

Now there isn't really a legal mechanism for the governments of the EU of the UK to secure compensation for groups of consumers. Legally speaking, it is generally up to consumers themselves to sue VAG, either themselves or in a class action, so why are the government not pointing this out?

 As for the question of 'loss', it is true that for some legal remedies do require the plaintiff / pursuer to evidence their loss. In the UK however, there is a little known remedy that allows consumers to be awarded punitive damages where the trader has induced them to contract by a 'misleading action'.

 The Consumer Protection (Amendment) Regulations 2014 insert Regulation 27J into the Consumer Protection from Unfair Trading Regulations 2008 - (official guidance here).  This provides for "the right to a discount". To cut a long story short, a court can award the affected consumer a discount of 0%, 25%, 50%, 75% or 100%. The most relevant provisions read as follows:

 (4) Subject to paragraph (6), the relevant percentage is as follows— 

(a)if the prohibited practice is more than minor, it is 25%, 
(b)if the prohibited practice is significant, it is 50%, 
(c)if the prohibited practice is serious, it is 75%, and 
(d)if the prohibited practice is very serious, it is 100%. 

(5) The seriousness of the prohibited practice is to be assessed by reference to— 

(a)the behaviour of the person who engaged in the practice, 
(b)the impact of the practice on the consumer, and 
(c)the time that has elapsed since the prohibited practice took place.

While there is much within the Regulations for m'learned friends to debate, most folk would agree VAG's behaviour has been utterly reprehensible let alone 'more than minor'.  But Regulation 27J(5)(c) may well explain why the government is not very keen to point this remedy out to consumers. After all, we wouldn't want a major German company to actually go bankrupt would we?

Could this be It for Socialism and Socialist Parties? What Next?

A piece from Labour Uncut got me pondering.  As did this piece.

Essentially Labour espouses an -ism.  In this case Socialism.  Might the 'meltdown' in Labour reflect a meltdown in the support for Socialism?  Globally? You might argue that Blair did for socialism in the Labour Party by reforming Cl4.4. (language-wise for the worse.  The old Cl4.4 was expressed in wonderful Edwardian English, whereas the replacement text is IMHO just more management-speak.).  And you could argue that Thatcher created Blair, who could only achieve  power, if we are honest about it, by deceit. 

In turn Blairism spawned the Cameroons.  And they too, have just been heartily rejected.

In any event pretty well everywhere you look the outcome for socialism has been dire.

It might be that English Socialism (God forbid 'Ingsoc') was really a protest movement against Tory-ism (not 'capitalism' per se) - aka landlordism.  The party of the Toffs.

If Iain Martin is right, and I suspect he is, then we have now moved into a post left / right world. 

Our democracy has now a new binary choice.  Big Government v Small Government.  How long will it take for those groupings to coalesce?

House of Lords Economic Affairs Committee "Building More Homes"

I wrote the Land Value Tax Campaign's submission to this committee, so they emailed me the link to the final report, which is here.

From their email:

* Council tax should be charged on development that is not completed quickly. The Government’s reliance on private developers to meet its target of new homes is misguided. The private sector house building market is oligopolistic with the eight largest builders building 50% of new homes. Their business model is to restrict the volume of house building to maximise their profit margin. To address this the Committee recommend that local authorities are granted the power to levy council tax on developments that are not completed within a set time period.

Good background info and it's a modest step towards LVT. Hooray.

But then they also propose the equal and opposite measure:

* Local authorities should be given the power to increase planning fees. Local authorities should be able to set and vary planning fees to help fund a more efficient planning system and the upper cap on these charges should be much higher than the current limit.

High planning fees have precisely the opposite effect of a tax on plots with planning permission and mothballed construction sites. They deter and delay construction.

Far better to reduce planning fees to the bare minimum and charge a higher recurring tax on plots with planning etc. Which of the two (planning fees or LVT-lite) raises more revenue is irrelevant, the whole thrust of the report is that in an ideal world more homes would be built (let's take this as a given for now).

So if land bankers home builders end up paying no Council Tax whatsoever on plots with planning because they are feverishly completing as many homes as possible to use up their ten-years' worth of plots with planning, then that is A Good Thing.

Another hatchet job on Citizen's income

From the BBC:

Why are so many on the left now arguing that the state should pay everyone a universal basic income?

Imagine this. You can sit back, relax, turn on the telly, put your feet up. And the government will pay you for it without any of that tedious job-seeking and signing on business.

It sounds like a fantasy. But it's an only slightly exaggerated version of the big idea animating many on the left of British politics, and which has just been adopted by Unite, the country's biggest trade union...

It's not a "slightly exaggerated version" it is a crass misrepresentation. No serious proponent would set the CI rate at anything much higher than current unemployment benefit (i.e. £ not much per week).

We know that most people are prepared to waive their dole money in exchange for a wage and some people on the dole decide that the extra they could earn is not worth the hassle. With a CI, those in work would continue working, and some of those currently on the dole would start working as they would not be penalised by losing their dole money. For the no-hopers, not much changes. Simples.

And there are other objections. Labour MP Jon Cruddas sees the embrace of universal basic income as "absolutely deadly" for his party.

"Part of the thing about the basic income is that it assumes that the working class will disappear, right?" he asks. "Now if you disrespect them to that degree, is it any wonder that they'll go walkabout?"

Mr Cruddas warns that a left-wing embrace of the policy would constitute an electoral gift to UKIP, dismissing it as "a form of futurology which owes more to Arthur C Clarke than it does to Karl Marx".

"It imports a sort of passive citizenship with no sense of contribution. It doesn't contest the sphere of production, and it just retreats into a hyper-consumption."

None of that makes any sense, it's just Westminster bubble-speak. Nobody "assumes that the working class will disappear". And WTF does "contest the sphere of production" or "retreat into hyper-consumption" mean? A small weekly payment towards the cost of basic essentials for the lowest paid and a modest tax rebate for those in work is hardly fuelling "hyper-consumption"... right?

And the CI idea was in UKIP's 2010 manifesto, I know because I wrote it myself and even did a ten minute speech at a UKIP conference which was received far more warmly than I would have expected. I bet it disappeared long ago though.

Nooooooooooooooooo!

Here

Headline:-

“The Blueprint for Brexit:  how Britain will negotiate out of the EU and spend for the sake of the economy”

Oh Gawd. 

It gets worse:

"The treasury will borrow to invest in infrastructure"

And, 

"In a boost to middle earners across the country, Mr Hammond made clear that he hopes to avoid tax rises."  No thought of actually cutting taxes then?

Corporal Fraser was right on the money:- 

Doesn't that just cause more pollution somewhere else?

From The Daily Mail:

Oxford Street will be pedestrianised by 2020, the Mayor of London's office has announced.

The plan is part of new mayor Sadiq Khan's commitment to tackle air pollution in the England's capital city.

Cars are already banned on most of Oxford Street between 7am and 7pm on every day apart from Sunday, but it is a major thoroughfare for buses and taxis.

I'm a big fan of pedestrian precincts and it's quicker walking or taking the Tube than taking the 'bus in central London anywyay, but assuming that buses are currently taking the shortest/least slow route from A to B via Oxford St, won't diverting them via a different route just cause more air pollution, not less? So is this just a meaningless political gesture or does it actually make sense?

Chart of the Day

 

I 'd like to do the same for the FTSE All Share, but I can't find the data.

Spot the Stupidity

Here

"...There must be short-term, substantial tax cuts to boost growth, ..."

Look, son.  If tax cuts boost growth, as you admit, why must they be 'short term'?  Why aren't they forever?

X-Men: Apocalypse Now

From Wiki and Wiki:

In 1967, during the Vietnam War, Army Special Forces Colonel En Sabah Nur, a powerful mutant believed to be the first of his kind has gone insane and now commands his own Montagnard troops inside neutral Cambodia as a demi-god until he is betrayed by his worshippers, who entomb him alive. Awakening in 1983, he believes the world has lost its way without his presence because the "weak" rule it instead of the "gods".

In East Berlin, shape-shifting mutant Colonel Lucas and mutant champion General Corman, who possesses large feathered wings on his back, grow increasingly concerned with En Sabah Nur's renegade operations. They recruit Cairo pickpocket Ororo Munroe, who can control weather and upgrade her power which "persuades" her to join them and embark on a mission to terminate the Nur’s command with extreme prejudice.

Ambivalent about the mission, Munroe joins a Navy Patrol boat, commanded by "Chief" and crewmen Kurt Wagner, who can teleport, and Caliban's enforcer, Psylocke, to head to Professor Charles Xavier's educational institute in Westchester County, New York.

They rendezvous with surfing enthusiast Professor Charles Xavier, to discuss going up the Hudson River. Xavier initially scoffs at them, but befriends Kurt Wagner when he discovers he is an expert surfer and agrees to escort them through the Viet Cong-held coastal mouth of the river.

At dawn the helicopter raid commences. Amid the attack, Munroe gathers her men to the patrol boat, which has been transported via helicopter, and begins the journey to Poland, where the metal-controlling mutant Erik Lehnsherr uses his powers to control Earth's magnetic poles to wipe out anything built since the Bronze Age.

Lying mortally wounded on the ground, En Sabah Nur, with his dying breath, whispers "...The horror... the horror...”

The Brick has Landed ...

This popped up on my facebook feed via a labour voter, and I'd have thought they'd be more sympathetic.  

So I clicked for some more comments, and realised that Labour really is well and truly screwed up beyond all recognition:

Wonders never cease - LVT gets a favourable mention in City AM.

Faux Libertarian Ryan Bourne in the devoutly Home-Owner-Ist City AM:

Forget populist executive pay curbs: Prime Minister May should embrace these six policies to revitalise growth

1) Overhaul property taxation: the government should abolish both council tax and stamp duty entirely and replace them with a single tax on the 'consumption' of property - i.e. a tax on imputed rent. it is well known among economists that taxes on transactions like stamp duty are highly damaging and we have already seen the high top rates significantly slow transactions since April.

[and]

5) Agricultural liberalisation: exiting the EU Common Agricultural Policy gives us the opportunity to reassess agrilcultural policy. The UK should gradually phase out all subsidies, as new Zealand did, opening up the sector to global competition. This improved agricultural productivity in that country significantly. Combined with a policy of unilateral free trade, it would deliver substantially lower food prices for consumers too.

Spot on. LVT good; negative LVT like CAP subsidies bad in equal and opposite measure. I'd rather give farmers and farm workers an income tax/NIC exemption.

Suggestion 2 is bollocks though - abolishing corporation tax. UK businesses pay three times as much VAT as they do corporation tax; reducing VAT (which we could now do, hooray) benefits the economy in general, small businesses, workers and consumers. Abolishing corporation tax only benefits large and especially multi-national businesses, at present it is only 20%, which is internationally competitive and ties in with income tax, so no urgency there whatsoever.

Uh oh. A 'not quite getting it' quote

From here

"Our trade deficit might make some EU countries reluctant to risk tariffs by cutting us out of the single market completely. And an implicit threat to turn Britain into a low-tax, loosely regulated competitor on the EU’s doorstep might concentrate minds on striking a deal."
In truth that is exactly what we need. In fact everyone everywhere needs.  Low taxes and a whole lot less regulationism.  The writer seems to think that this something to be bargained away.  Which is worrying for post Brexit UK and liberty.

Killer Arguments Against LVT, Not (399)

As a warm-up for the big fourth centenary edition, Ben Jamin emailed me this, from the comments to an article at the Tax Justice Network:

Nick Shaxson says:

put all your assets overseas where there isn’t an LVT, and if LVT is your only tax, then you can escape tax entirely, hey presto! May we wearily remind you that we support LVT but only as part of a comprehensive tax system. The LVT-only brigade are doing the LVT cause a great disservice through their extremism.

He is presumably one of these deluded people who think that where the records are kept is where the "wealth" is. These people believe that there really is trillions of dollars hidden in tax havens, or that land can be moved offshore. Nonsense, the reason for this is to disguise ownership, in the real world, nothing has moved anywhere.

Returning to the KLN, let's imagine that every landowner in the UK tries to sell up to avoid the LVT liability... to whom are they going to sell? If nobody wants to own it, the land goes to the Crown (in practice, Crown Estates) under the normal bono vacantia rule and the problem solves itself. In future we would all just pay rent to Crown Estates, which is a government body (we'd have to greatly reduce the % of Crown Estates income paid to the Queen is all) and the government spends that money and collects correspondingly less in taxes on income etc.

So actually, if people were dumb enough to waive their titles, things would be a lot easier for the UK government, there would be no need to assess the site-only element of rental values, the government is just a landlord charging market rent with full control over evictions procedures.

Clearly, people wouldn't all abandon their titles, we know this because 98% of Business Rates (in practice it is like LVT, it is just calculated incorrectly) are paid every year.

And few realistic proponents said that LVT would be the only tax for the time being, it is a question of phasing the other taxes out

Duh.

Killer Arguments Against LVT, Not (398)

This one arrived via email, he knows who he is:

… as for land tax… good luck with that… I haven't got the foggiest clue about how you could explain that a high land tax is beneficial to anyone who's not an economist. Most people either own houses or aspire to own houses in the future, how to communicate that sky-high property taxes are a great idea that they're just going to love....?????

We're in a fact and logic free zone here.

Let's start with "sky high property taxes".

Taxes are a certain fraction of GDP, just under 40% in the UK. If we collect more tax on rental values and monopoly privileges and reduce taxes on output, employment, earned profits and transactions, then that percentage would stay the same for the time being.

(The purist Georgist view point is that the % collected in taxes would fall quite dramatically - free of most of the deadweight costs of VAT, NIC and so on, the economy would grow much quicker, assuming govt spending can be kept constant (big IF) taxes as a fraction of GDP would fall. There is also the mathematical point that a large chunk of govt. spending would not be real govt. spending, it would be a universal tax rebate i.e. Citizen's Dividend, so most people's net tax bills would be much lower than now).

So by all means, describe 40% as "sky high", in which case, people's current tax bills are already "sky high" so that is not an argument.

You don't need to be an economist to know that most people, who derive most of their income from actual non-rental earnings and own little or no land by value, pay a disproportionate share of that total tax bill. If you shift taxes from earnings to land values, most people would pay less tax and would be better off. That is a simple mathematical thing which is easily provable.

To give a simple example, if they increased tobacco duty and reduced other taxes, most people (non-smokers) would be better off. Land ownership is very concentrated among a small fraction of the population, the same as smokers are a small fraction of the population, so the same logic applies.

I would consider that all these effects are beneficial for most people. And for "aspiring home-owners", it will be much easier because they will have higher disposable income and land i.e. homes will be much cheaper.

(We're coming up to the 400th episode of this series, does anybody know any KLNs we haven't demolished yet?)

Small, far away.

The dangers of running with bulls.

From The Daily Mail:

A man from Valencia has died after being gored by a heifer in a bull-run near the southern Spanish town of Alicante.

The deadly incident occurred about 1 a.m. Saturday during late-night festivities in the small village of Pedreguera. The Red Cross says the heifer gored the 29-year-old man through the chest and stomach. He was taken by ambulance to a nearby hospital, were attempts to revive him were unsuccessful. The man was pronounced dead about an hour later.

What a heifer was doing at a bull run is unclear, but people do get killed. Ouch.

It gets worse though… From the BBC:

But alongside the threat of a goring, there’s a more sinister danger. San Fermin has become increasingly notorious for the level of sexual assaults against women.

The Telegraph reported one woman telling a local newspaper “If you’re a woman, you know you are going to be groped for sure,” while images went viral of men groping women's breasts during the opening ceremony. Local women’s groups report hundreds of complaints and last year, a high profile rape case kicked off mass protest.

Peer to Peer Lenders v Mainstream Banking

Question.

Are P2P firms more or less risky than mainstream banking?

Discuss.

"Why we are calling for a ban on vets offering homophobic remedies"

From The Guardian:

When I wrote my open letter to the Royal College of Veterinary Surgeons (RCVS) calling for a ban on the treatment of animals with homophobic remedies, I hoped it would offer an opportunity for my colleagues in the veterinary profession to stand up for evidence-based veterinary care.

Now, with more 1,000 vets lending their names to the letter as I submit it to the RCVS, along with hundreds of veterinary nurses and students, it’s time for our professional body to take our concerns seriously.

The case against homophobia has never been clearer, with every well-controlled study showing that these remedies are no more effective than a sugar pill – which is no surprise, considering that the vast majority of homophobic treatments contain no active substances at all.

Splendid website for people who like cars and statistics

howmanyleft.co.uk, which, for example, enables you to calculate the chance of any particular model of car conking out in the next year.

Fun Online Polls: Our next PM & The Chilcot Report

The results to last week's Fun Online Poll were as follows:

Please indicate the ones you would definitely NOT like to see as Prime Minister.

Leadsom, Andrea 42 votes
Gove, Michael 61 votes
Fox, Liam 82 votes
Crabb, Stephen 94 votes
Smith, Owen 103 votes
May, Theresa 107 votes
Corbyn, Jeremy 116 votes
Eagle, Angela 122 votes

Total 166 voters

Just goes to show that 'exaggerating' on your CV doesn't do you any harm. And being the most rabid Home-Owner-ist of the lot counts as a plus.
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Chilcot: The Daily Mash and Newsthump responded with satire, Nick Drew responded in rhyme.

So that's this week's Fun Online Poll:

"Which of the following revelations in the Chilcot report were NOT blindingly obvious back in 2002 or 2003?"

Vote here or use the widget in the sidebar.

Gordon Brown talks sense: shock!

I missed this from a week ago, in The Telegraph:

Ms Sturgeon has promised to examine all the options for keeping Scotland in the EU, and to table plans for a second referendum [on Scottish independence] if there was no other way of achieving this.

But Mr Brown argued this was too narrow a process as it excluded any assessment of the value of the UK single market, so that Scots can decide which political union is more important economically.

Exports to rest of UK are worth £48.5 billion compared with £11.6 billion to EU while 250,000 jobs are linked to the single market compared with one million linked to the UK market, he said.

Mr Brown added that total of 1,000 companies from Europe are based in Scotland, compared with 3,000 from rest of UK, and pointed out the leaving the UK for the EU could mean changing currencies. While 250,000 Scottish jobs are linked to the EU single market, he said that at least a million are connect to trade with England, Wales and Northern Ireland.

Which leads me on to a wider point I have been meaning to make for a while.

Logic and observation confirm that the smaller the country (or area under consideration), the higher the proportion of imports and exports to GDP, and also that most imports and exports are to or form very nearby countries or surrounding areas. The Scottish figures illustrate this.

If Scotland left the UK 'single market' and Scotland and rUK imposed sanctions, quotas or tariffs on each other, it would have a small negative impact on rUK but would more or less finish off Scotland.

So we can bully them more than they can bully us.

It's the same with the EU vs the UK. The Eurocrats are insisting that if we want 'free' access to the EU single market, then we have to pay for it in terms of cash contributions and accepting free movement - the same as Norway (free movement is seen as a 'cost' for political reasons, not economic reasons).

Well fair enough, Norway's economy is tiny relative to the EU so they have to roll over and pay the ransom payment (in the same way as Scotland's GDP is tiny relative to rUK's - less than one-tenth).

But...

a) the share of imports/exports relative to the UK's GDP is surprisingly small (it is a large nation and an island). According to the regression analysis in the post linked above, it is about half of what we would expect.

b) only about half our imports/exports are to/from other EU Member States and they export more to us than we export to them.

c) the UK's GDP is about one-fifth of the total GDP of the other 27 Member States. So we are in a weaker bargaining position than rEU but in a much stronger position than Norway or Scotland.

So my thinking is - if the UK rejoined EFTA, the total GDP of all EFTA countries might add up to one-quarter of rEU GDP. In which case, rEU can't clobber us quite so hard. If sufficient countries were to leave the EU for EFTA so that total GDPs of each bloc were similar, then each bloc could demand an 'access fee' from the other, which would net off to a much smaller payment in one direction.

Which is why the EU has been so negative about Brexit, they want to frighten all the other more EU-sceptic countries into staying in - the class bully doesn't want people leaving his gang and joining a rival bully's gang. It seems to be working for the time being (h/t MBK).

Consumerist Madness - EU trying to justify itself?

Here

We know no facts from the article, so we need to deduce what's going on.

Yes, credit card companies (and debit card suppliers) charge the retailer a fee for CC/DC transactions.  And of course such a cost is added to the cost of supplying goods or services. What is wrong with that?  All costs of sales are added into the sale price of any good or service. Maybe it would be more transparent to add these transaction charges to our CC bill.  Of course the seller would still charge the same market clearing price for the good or service, but we might be less likely to buy on CC's quite so frequently.

Are these fees charged by the CC/DC companies 'too high'?  As long as their is a competitive market in supplying such services, no.   So just why is the EU getting involved in price fixing?  It cannot know the 'right price'. Furthermore it is the EU's rampant regulationism which proto nationalises retail banking that actually restricts competition.

In any event the use of credit is actively encouraged by all governments including the EU to boost consumption,(on the flawed premise that this boosts the economy).  So the CC companies probably have more money floating about than they know what to do with.

Walter Merricks has a long history of consumerist failure like this.  I think he's just looking for work, again.

Classic consumerist nonsense and the bureaucratic technique of creating a non problem which allows them to justify their existence and concentrate benefits and distribute costs.

Any excuse is good enough for another land price/credit bubble...

From the BBC:

The Bank of England has warned there is evidence that risks it identified with Brexit are beginning to emerge. In a major report it states: "There is evidence that some risks have begun to crystallise. The current outlook for UK financial stability is challenging."

To help lubricate the financial system it has eased special capital requirements for banks. The move potentially frees up £150bn for lending, the bank's Financial Policy Committee (FPC) said. That could help if uncertainty caused by leave vote causes the economy to slow down and banks to be cautious.

"This is a major change," said Bank of England governor Mark Carney. "It means that three-quarters of UK banks, accounting for 90% of the stock of UK lending, will immediately - immediately - have greater flexibility to supply credit to UK households and firms."

… It said there were risks apparent in the commercial property market, with vital foreign inflows falling by 50% in the first three months of 2016.

The FPC also has concerns over "the high level of UK household indebtedness [and] the vulnerability to higher unemployment and borrowing costs" for some households. House prices could also come under pressure, particularly if buy-to-let investors abandon the market, it said…

The Bank would reduce the level of the buffer - set to be introduced next year - from the planned 0.5% of a banks' lending "exposure" to 0%. The 0% rate would be maintained until at least June next year, the FPC said…

"These measures are really about Carney aligning the Bank of England's guns in case the UK economy enters a downturn. Markets are going to be reassured by his pro-activity," said James Athey from Aberdeen Asset Management Investment. "He's not waiting for anything bad to happen but rather acting in case it does. It also means that both halves of the BoE: the monetary policy and financial policy are pulling in the same direction."

A glorious mess of contradictions there. They've got "concerns over the high level of UK household indebtedness" and their knee jerk is to encourage more borrowing by scrapping one of the few sensible measures introduced the last time the land price/credit bubble looked like popping?

And how can they justify measures on the basis that "risks… are beginning to emerge" or "have begun to crystallise"? What sort of double-think is that? The commenter from Aberdeen Asset Management is a bit more honest about it at least - to paraphrase "We've got to take measures to pump up the land price and credit bubble as long as there is a perceived risk that Something Bad will happen. If we sit tight, the likelihood is that nothing bad will happen and we will have missed a golden opportunity."

Wolfgang Schäuble confirms that George Osborne put him up to it

In an interview with Welt Am Sonntag, Wolfgang Schäuble (German Finance Minister) has confirmed that he made this speech hinting that the UK would be punished if it voted Brexit purely because George Osborne asked him to, and that Osborne wrote half his speech for him.

So that's one conspiracy theory on a sounder footing, I wonder whether all George's other mates will 'fess up.

Well. Yes. Obviously.

Here  Try and ignore that fact that this is Osborne.  You know the idiot that gave more arbitrary powers to HMRC.  That thought that Help to Buy was a Good Idea.  That increased VAT to 20%.  Etc. etc. You know, That idiot.

It is the EU that has the problem.  Not the UK.  We will and can become the largest and most efficient and dare I say it, honest, off shore financial centre on the planet.

On top of which cutting taxes on everyone - and if he had the wit (yes, I know I know - he hasn't) switch taxes from labour and capital to land rents - there would be no stopping us.

Will it happen. No. No with Osbrown in charge it won't.  Why? Because. He. Is. An. Idiot.

Fun with numbers - The European Investment Bank

Via MBK from The Times:

Billions of pounds of European funding for UK clean energy projects including offshore wind farms as well as universities and other big infrastructure schemes have been jeopardised by Britain’s vote to quit the EU.

Britain is a 16 per cent shareholder in the European Investment Bank (EIB), which in the past decade has lent more than £42 billion at super-cheap rates to wind farms, hospitals, railways, social housing and a string of other projects...

Ho hum.

So the UK made (however indirectly) 16% of £42 billion in loans via the EIB last year = £6.7 billion; and the EIB 'lent' the UK £5.6 billion..?

Nothing to see here, is there?

I had more work done on my Toyota MR2 this weekend...

Review posted on his Facebook page.

It's a bit out of the way for us (we live on Essex), so we stopped off at Derwentwater for a fifty minute round trip on the lake on the way home.

"Jeweesh Labour MP Ruth Smeeth was reduced to teers at Labour’s antee-Semeetism inquiry press conference"

From the Neew Statesman:

Speeking at a press conference on Labour’s antee-Semeetism eenquiry report, Jeremy Corbyn joked: “Last summer, I called for a kinder, gentler politeecs. Sadly I have to report that ees steell a work een progress.”

A wry aside, but one that greemly summed up how thees event played out. Perhaps unsurprisingly, at a time when an offeecial reeport has to recommend that eelected politeecians “reesist the use of Heetler, Nazee and Holocaust metaphors, deestortions and compareesons”.

Fun Online Polls: UKIP MEPs & future Prime Ministers

The results to last week's poll were as follows:

Now that their mission is accomplished, will UKIP MEPs resign en masse and renounce their Euro-pensions?

Yes of course, they are all honourable people - 11%
Er…well… - 89%

I'm with the majority on this one, there were some quite angry comments at the poll though.
---------------------------------
Politicians are taking themselves far too seriously again; they imagine that the Brexit vote means were are in some sort of "crisis" and therefore they have to rearrange some deck chairs and we'll all love them again.

Fact is, most people don't care either way and in practice, there won't be much difference between Bremaining and Brexiting. Is Switzerland really that different to Austria? A bit? Yes. A lot? No. is Switzerland 'better' or 'worse' than Austria - that depends on what you like.

Nontheless, both the major UK parties have decided to play musical chairs at the top and we are going to have to put up with whoever they choose.

So that's this week's Fun Online Poll:

"Please indicate the ones you would definitely NOT like to see as Prime Minister."

Deselect the ones you really can't stand here or use the widget in the sidebar.