More climate change consensus contradictions

Theory #1;

Ocean acidification is the ongoing decrease in the pH of the Earth's oceans, caused by the uptake of carbon dioxide (CO2) from the atmosphere. Seawater is slightly basic (meaning pH > 7), and ocean acidification involves a shift towards pH-neutral conditions rather than a transition to acidic conditions (pH < 7). An estimated 30–40% of the carbon dioxide from human activity released into the atmosphere dissolves into oceans, rivers and lakes.

Fair enough, the small print explains that oceans are not becoming acidic, but less alkaline, and the actual theory stacks up on a scientific level.

Theory #2:

As the world’s oceans warm, their massive stores of dissolved carbon dioxide may be quick to bubble back out into the atmosphere and amplify the greenhouse effect, according to a new study.

Again, on a scientific level, the theory stacks up; warmer water can hold more dissolved solids (try dissolving sugar in cold water) but less gas (try warming up lemonade).
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But which is it? Will oceans absorb more CO2 (A Bad Thing) or release more CO2 (also A Bad Thing)?

The second article tries to weave its way through the contradiction. The only way to reconcile the contradiction is to believe in a sort of J-curve, at first, oceans will absorb CO2 and then there will be a tipping point and they will release it all again. How quickly..?

Previous studies have suggested that it takes between 400 and 1300 years for this to happen. But now the most precise analysis to date has whittled that figure down.

“We now think the delay is more like 200 years, possibly even less,” says Tas van Ommen from the Australian Antarctic Division, in Hobart, who led the study.

Fair do's. If you are predicting that The End Is Nigh, it is wise to choose a longer time frame before you can be proven to be wrong, but the Alarmists just can't help themselves:

And while more precise than the others, the team’s study also comes with significant uncertainty: plus or minus 200 years, meaning there could actually be no lag time between rising temperatures and gases being released from the atmosphere.

“They’ve nailed it,” says Paul Fraser, a greenhouse gas researcher at Australia’s Commonwealth Scientific and Industrial Research Organisation (CSIRO). He adds that despite the uncertainty, “this is a really good data set that they’ve got.”

In which case:

a) there is a tacit admission that global warming leads to increases in CO2 levels, not the other way round. Skeptical Science bends logic to fix the problem - in the past, a small naturally caused temperature increases kick started proceedings and led to higher CO2 levels, which caused further temperature increases. Only this time it was different and a small man-made increases in CO2 levels has kick started things.

b) there won't be any ocean acidification as the oceans will be releasing CO2 faster than they can absorb it. I've searched Skeptical Science and they don't appear to have sneered at this one yet.

Killer Arguments Against Citizen's Income, Not (22)

Emailed in by Sackerson, from the Foundation for Economic Education. The first paragraphs are just lies and distortions, skip those and get to the KCNs:

Second, universal basic income payments would be given to all citizens, including middle- and high-income earners. By not targeting payments to those with low incomes, the proposal would transfer funds away from the vulnerable to the relatively affluent.

Bollocks. It's the middle- and high-income earners paying all the tax to fund the UBI, from their point of view, it is just a modest tax refund. By and large, it is downward redistribution.

To defuse this, all you would need is to give people the choice between
a) Claiming the UBI but not also getting a tax-free personal allowance; and
b) Waiving the UBI and getting a tax-free personal allowance instead.

For example, UK income tax rate 20%, UBI = £50/week. If the personal allowance is £12,500 (which it is in the UK), then anybody earning more than £12,500 wouldn't bother claiming £50/week UBI and would choose a £50/week higher net wage instead. They will literally not receive a UBI, end of discussion.

Only those who are pretty sure they won't be regularly earning at least £1,000-odd a month for the foreseeable will claim the UBI. Which is the much same people as those currently entitled to some form of welfare payment.

But the most apparent flaw with the concept is that it fails to require work or work preparation for its recipients. Although the current welfare system does little to encourage self-support, a comprehensive universal basic income policy would remove the idea of personal responsibility entirely.

What the heck does that have to do with it? There are loads of benefits which do not require people to be looking for paid work - the right to vote at elections, use a public library or call the police, entitlement to state-school place or NHS treatment, maternity pay, sick pay, redundancy pay, child benefit, old age pensions, carer's allowance, student grants, incapacity benefit (which I think is being phased out, it was disguised unemployment benefit without a requirement to look for work), plus all sorts of variants at different times and in different countries.

It’s a misguided approach.

No it's not, and the very next paragraph explains why:

People Enjoy Working

Public opinion and social psychology indicate that adopting policies with a demonstrated track record of discouraging work would be a bad development. In the 2016 General Social Survey, for example, 70 percent of Americans agreed that they would enjoy working in a paying job, even if they didn’t need the money.

So why waste column inches explaining that UBI would destroy the work ethic when real life shows us otherwise? We see that most people want to (and do) earn much more than the bare minimum they need to live, which is all a UBI would pay for. It's not going to change a thing for those with regular earnings of more than the personal allowance, who wouldn't bother applying for the UBI, that is just needless bureaucracy.

If the KCN held water, then nobody would bother earning more than a bare subsistence level.

"The Landmine that Just Got Laid for Elizabeth Warren"

From PoliticoMagazine:

The moment came when the 10 participants were asked, by a show of hands, who would dispense entirely with private health insurance. Only New York Mayor Bill de Blasio and Warren signaled “yes.”

That's when former Rep. John Delaney, one of the least visible of the 24 announced candidates, weighed in. After pushing back on the idea of taking something away from Americans that most are reasonably happy with, Delaney said this:

“Also it’s bad policy. If you go to every hospital in this country and you ask them one question, which is how would it have been for you last year if every one of your bills were paid at the Medicare rate? Every single hospital administrator said they would close. And the Medicare for All bill requires payments to stay at current Medicare rates. So to some extent we’re basically supporting a bill that will have every hospital closed.”

The writer reckons that the Republican candidate (i.e. Donald Trump) will repeat this endlessly during the next campaign - "Even Democrats admit that their plan will have every hospital closed."

The problem is that the claim is nonsense to start with.  Delaney is presumably in the pay of the US healthcare lobby, a massive rent-seeking enterprise, which charges about three or four times as much for treatment as the nationalised/regulated systems in Europe, and 'hospital administrators' are hardly going to admit they have been price gouging for decades, are they?

European healthcare works fine and there are plenty of hospitals, so assuming Medicare payments are at European levels, nothing terrible will happen. They'll just make normal profits and earn normal salaries instead of making super-profits and earning inflated salaries. Coverage will improve and the US economy will grow by ten or fifteen percent; the US healthcare lobby is currently soaking up about ten or fifteen per cent of US GDP in super-profits.

That said, trying to ban private health insurance is a daft idea and entirely unnecessary, as the European example shows. If you have private insurance, you get much the same treatment as under the default system, just at double or treble the cost. Which is why most people don't bother.

What I wish Prince William had said...

From the BBC:

Prince William has said he would "fully support" it if one of his uncles came out as gay, but admitted he would "worry" about the added pressures he would face. It was something he had thought about since becoming an uncle, he said.

"I wish we lived in a world where it's really normal and cool, but particularly for my family, and the position that we are in, that's the bit I am nervous about," he said...

The duke said he backed "whatever decisions" one of his uncles might make, but added: "It does worry me from a nephew's point of view. How many barriers you know, hateful words, persecution, all that and discrimination that might come, that's the bit that really would trouble him.

"But that's for all of us to try and help correct and make sure we can put that to the past and not come back to that sort of stuff.

"In case you're wondering, I mean Edward."

Reader's Letter Of The Day

From The Metro:

I think it's only fair we help out Harry and Meghan with their home alterations, as I imagine their mortgage payments must be enormous.

Bruce, Edinburgh.
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As to the endless comments about it not being fair that Tory party members will be electing the next Prime Minister:

Firstly, if you want a vote, join the Tory party.

Secondly, every party can decide its own rules for choosing a leader, by election or lottery or anything else.

Thirdly, it is the House of Commons which decides whether somebody can be/can continue to be Prime Minister, traditionally they choose the leader of the party with most MPs.

Fourthly, Neville Chamberlain*, Winston Churchill, Anthony Eden, Alec Douglas-Home, Jim Callaghan, John Major, Gordon Brown and Theresa May. Which is half the people who have become PM since the late 1930s.

Fifthly, for my Scottish viewers, Nicola Sturgeon.

Sixthly, as Farage said, the key to democracy is accepting an outcome you don't like. I didn't vote Tory, and I wouldn't vote for Hunt or the overgrown public schoolboy, but enough people do, and that's that.

* Baldwin and MacDonald seem to have taken it in turns since the 1920s, without a general election each time they swapped.

How to visualise the dangerous increase in CO2 levels since pre-industrial times

The two squares represent relative levels of nitrogen and oxygen as white (nearly 80%); average water vapour as darker blue (2%); peak water vapour as pale blue (another 2%); and CO2 levels as black (pre-industrial levels about 300 ppm; current levels about 400 ppm; or 0.03% and 0.04%).

The upper square shows represents pre-industrial levels (three blocks) and the lower square represents current levels (four blocks).

Scary stuff, huh?

Bill Gates has rare honest moment

From CNBC:

Gates admitted his “greatest mistake ever” was allowing Google to develop Android — one of Apple’s biggest smartphone competitors — before Microsoft could develop a competing mobile operating system, he told Eventbrite co-founder and CEO Julia Hartz Thursday at a Village Global event.

“That was a natural thing for Microsoft to win,” he said. Gates said he blames his own poor “mismanagement,” since he didn’t guide his team to jump on the opportunity. He also partially blames Microsoft’s antitrust problems in the early 2000′s for allowing Google to get ahead.

Google moved on mobile shortly after Apple did, when it acquired Android in 2005. Google later released it first Android device in September 2008, a little more than a year after Apple released its first iPhone on June 29, 2007.

“These are winner-takes-all markets. So the greatest mistake ever is whatever mismanagement I engaged in that caused Microsoft not to be what Android is,” he said. Gates added that there is now only room for one “non-Apple” operating system, and that market is worth $400 billion.

He added that if Microsoft would have “got that one right,” Microsoft would be the top technology company in the game right now. “We would be the company. But oh well, ” he said.

Yup. These things are natural monopolies, it's easiest if everybody uses the same platform-system-language, whether it's perfect or not (and nothing is).

He got this one right with Windows, and IBM has been kicking itself ever since for buying in Microsoft software for its PCs, rather than just developing its own; hiring Bill Gates; or snapping up Microsoft for cheap forty years ago, in the same way that Google snapped up Android in 2005. Once IBM used it, other PC manufacturers used it etc.

What goes around, comes around, but key to this is the tacit admission that Microsoft also holds a natural monopoly, and most of its income is simply unearned rent. However rubbish its updates are, it knows it can sell a billion new licences every year with a marginal cost of 0.001c.

"Selfie deaths: 259 people reported dead seeking the perfect picture"

From the BBC:

News reports... were analysed to compile the study.

They found that selfie-related deaths are most common in India, Russia, the United States and Pakistan and 72.5% of those reported are men.

That last sentence is hardly surprising.

It contains three of the world's five most populous countries. We don't know whether the Chinese and Indonesians are more sensible or whether suicide-by-selfie is simply under-reported.

That leaves Russia, which is only ninth by population but third most suicidal (most suicidal if ranked by male suicides). If you multiply those numbers up, there are probably more suicides in Russia than in any other country.

And most of the suicides-by-selfie are by men. Well duh, men are more reckless and like showing off how brave they are.

Tip-top climate change porn

From The Independent:

Plummeting insect numbers. A sixth mass extinction. Thinning of ice sheets. Sea level rise. Wildfires in California. Thawing Arctic permafrost. The full tragedy of climate change is unravelling before our eyes.

According to the Intergovernmental Panel on Climate Change (IPCC) report, we have 12 years to stop this catastrophe. Climate action has become part of the zeitgeist, yet global emissions keep inching up and reports of Earth’s ecosystems collapsing come thick and fast.

Donald Trump is still in denial.

In 1958 scientists first noticed levels of carbon dioxide creeping up. In the 1980s global temperatures began to rise but warnings were ignored and covered up. For most people, the first nail in the coffin came 40 years later with the 2018 IPCC report, which said we faced major environmental catastrophe within our lifetimes, and potentially as soon as 2040.

So far so blah, here's the fun part:

For many, the news was a bereavement – a calamity we engineered without knowing it. “You’re talking about a mix of confusing feelings, including depression, grief, rage, despair, hopelessness, guilt and shame. All of those feelings come with it,” says Caroline Hickman, a teaching fellow at the University of Bath and member of the Climate Psychology Alliance.

For many, these conflicted feelings are now part of daily life. The American Psychological Association describe this “chronic fear of environmental doom” as eco-anxiety.

Ms Hickman has been a psychotherapist for more than 20 years and before last year she had two or three patients at any one time with eco-anxiety.

“Pretty much everybody is referring to it now. Lots of people are saying they won’t have children. Other people say they don’t want to feel guilty about having a child and bringing it into a world where they know there’ll be lots of problems.

"One woman told me she fantasised about killing her child. In fact I’ve had eight women who have said that to me. These are women desperately thinking about how to protect their children. They’re talking about despair, impotence and powerlessness."

More school statistics...

... which most people would have guessed anyway if they thought about it for a few moments, and which can be used to support any particular point of view/prejudice:

From The Telegraph:

Choosing a nursery could be more important than secondary school when it comes to ultimate academic achievement, a study has found. The contribution of a school to variation in pupil attainment is in fact “relatively small”, according to researchers at University College London's (UCL) Institute of Education. 

I wonder when another university will do the same analysis of whether universities make much difference either, for a given standard of student...

This means that sending children to what they regard as a “good” secondary school - meaning one that fares well in GCSE results and official progress measures - only adds a small amount more value than if they went to a “bad” secondary school.

The report, funded by the Nuffield Foundation, found that once you control for the characteristics of pupils within each school, the difference in attainment linked to school is below ten per cent of the total variance between children.

Professor Alex Bryson, UCL’s Chair of quantitative social science a co-author of the report, added: “Schools do still matter, but they don’t matter as much as people think. What perhaps is slightly surprising is that an awful lot of time and effort goes into trying to improve schools – but over the 13 year period we looked at, the variability accounted for by schools has remained fairly constant.”

Which would happen if all schools were to improve by the same amount, so this does not mean that schools haven't improved.

But:

Researchers found that school competition, measured by the number of schools within 5.5 kilometres of each school, accounts for up to seven per cent of the variation in pupils’ attainment.

That could be 'competition driving up standards' (hooray), or just as possible, slightly cleverer kisd getting into the perceived better schools and vice versa, leading to a widening gap between schools perceived as better or worse.

Meanwhile the pupil-teacher ratio - an indication of how well resourced the school is - only accounts for around one per cent of the variation. A report last year by researchers at King’s College London found that genetics are a bigger determinant of academic success than sending your child to a grammar school.

We could have guess the last bit, it's genetics and parents pushing their kids to do their homework etc.
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On the subject of competition between schools and/or competition for better pupils between schools, from the BBC:

Most families do not choose to send their children to their nearest school, shows the biggest ever study of state secondary school choices in England. More than 60% opt for a school that is further away - usually because it is higher achieving.

"Contrary to a widely-held belief, only a minority of parents choose their local school as their first option," say researchers.

Why would parents not put down a perceived better school as their first choice? Be daft not to; and what are the chances that the perceived best school within reasonable travel distance is not the nearest one? Fairly high, I would have thought. Bear in mind my point above that there is likely to be a wider perceived gap between two nearby schools than between two isolated schools which all children in an area attend, simply because there are is no realistic alternative.

It also debunks the idea that richer families are more engaged with choices... Despite any assumptions about the "sharp elbows" of middle-class families, there was no significant difference in behaviour between wealthier and more disadvantaged parents.

Again, that doesn't really prove anything.

If a school is perceived as good, then higher income families will choose to move near it and will drive out lower income families from the area. This leads to the self-enforcing gap between the areas. Higher income families, having paid over the odds to access the 'free' education they've paid for two or three times over (income tax and higher house prices) will of course send their children to the nearest school - because that one is perceived as best (or else they wouldn't have moved there etc).

The reverse applies to low income families where parents 'just want the best for their children'. They can't afford to live close the perceived best schools, but they can still put them as first choice on their applications.

And so on. All quite fascinating in a Freakonomics kind of way.

.. and your name will be mud.

From The Guardian:

Permafrost at outposts in the Canadian Arctic is thawing 70 years earlier than predicted, an expedition has discovered, in the latest sign that the global climate crisis is accelerating even faster than scientists had feared.

A team from the University of Alaska Fairbanks said they were astounded by how quickly a succession of unusually hot summers had destabilised the upper layers of giant subterranean ice blocks that had been frozen solid for millennia...

Scientists are concerned about the stability of permafrost because of the risk that rapid thawing could release vast quantities of heat-trapping gases, unleashing a feedback loop that would in turn fuel even faster temperature rises.

These people have a very one-dimensional view of this and show no interest in what it was like millennia ago.

Ask yourself, "What is permafrost?". To summarise the explanation on Wiki, some areas used to support plant life in earlier, warmer times (which created the soil in which the plants grew, which created more soil etc) but these areas gradually froze over, the vegetation died and rotted away, hence the methane trapped in it.

There's no hard dividing line between 'soil which is still warm enough to support plant life' and 'soil which isn't'. If the latter category warms up a bit, after a couple of years, it will be normal soil with normal vegetation again. We've got to assume that normal soil with normal vegetation isn't some catastrophe-inducing, methane-belching horror, or else there'd be far more methane in the atmosphere than there is (about 2 parts per million).

So sorry, I see nothing to panic about. The methane emitting phase is just the awkward teenage phase while soil moves from being frozen to supporting plant life again.

The Disappearing Homes Conundrum

Using @yppuk, I mocked this wild claim:

Mr Ganatra added: “Dis-incentivising private landlords may end in a serious housing shortage, which will backfire, eventually should a new housing crisis take hold.

Our suggestion of rebating the mortgage interest rate relief tax charge to landlords who offer long-term tenancies would help maintain sufficient supply of properties in the market place and keep rental values in check.”

Various landlords tried to explain the Disappearing Homes Conundrum. So far they have claimed they won't be selling to other landlords (who according to their logic are net sellers) or sitting tenants (who are too poor, or who don't want to buy), but they refuse to answer the simple question - to whom do landlords sell? Ultimately it must be to former tenants, even owner-occupiers who sell and buy an ex-landlord home are former tenants, and to whom do they sell their old homes..?

This was picked up by @landlords_ltd (The Landlords Alliance) who came up with some genius non-logic:

"Yes and our advise [sic] to landlords is to sell up and invest abroad. To those that remain, do not rent to Dss unlss Shelter bond these tenants.

So the homes will go abroad? WTF?

Wealth tax musings

I've probably mentioned some of this before, but to summarise:

1. A traditional argument against Land Value Tax is that it is a "wealth tax". No it's not, it's a user charge for the value of services received/used, which leads to a better overall allocation/use of scarce resources, whatever you do with the proceeds (cutting damaging taxes on output and employment is top of my list). It's the same as fuel duty/road pricing; auctioning landing slots at airports, auctioning exclusive use of certain radio frequencies etc. These taxes are worth imposing even if the government just dishes out the proceeds as a Citizen's Dividend.

This ought to be implicit in the name, LVT is not a tax on paintings, Ferraris, pension funds or shares - it is a tax on land values.

2. The Homeys and hard lefties then make common cause, for opposite reasons, and say that if you have LVT, you might as well/should extend it to all 'wealth'.

The Homeys know that this takes the heat off them, because the revenue maximising rate of a general wealth tax would be very low, much lower than the revenue maximising LVT rate, so they'd be paying a smaller share of a smaller tax. The lefties just like the idea of wealth tax. Or just about any tax on anything, like 'carbon'. The left-wing Homeys point out that the second largest chunk of household wealth is pension funds and pension entitlements; and that this is concentrated in relatively few hands. This is true, but it is a fraction (a fifth or so) of the total value of housing and missing the point.

3. The UK only has one true 'wealth tax', which is Inheritance Tax (unlike most people, I have the dubious honour of having filled out actual wealth tax returns -  in Germany in the early 1990s - so I know more about this than most people), which raises a laughable £5 bn a year, a fraction of what would theoretically be collected if there were no loopholes and no planning. The loopholes and planning benefit the super-wealthy rather than the middle wealthy i.e. winners in the 21st century house price lottery, of course.

Human nature being what it is, there will always be ways round it; if you increase the rate, then there'll just be more planning. I am quite convinced, having seen this first hand, that the pin-striped ponces (lawyers etc) make more money from IHT planning than the government actually collects in IHT, which is probably the whole point. These tossers would all be out of business if the government just scrapped it.

4. Whatever the merits of a general 'wealth tax' are (and there are none), to my mind, the government should either tax something or subsidise something but not both (and preferably neither, with the exception of land values, fuel etc; or a general income tax if they need more money).

Rather than looking at the £5 billion a year collected in IHT/wealth tax (and £4 bn or so in Stamp Duty on shares, another dreadful tax), why not look at the subsidies going directly to the wealthy?

a) Pensions tax breaks, which 'cost' the government between £30 - £50 bn a year (depending how you argue it) in National Insurance and income tax breaks. These don't lead to people saving more and having higher incomes in retirement; half the tax breaks are soaked up by the pensions 'industry' (insurance companies, IFAs, accountants, trustees, fund managers, lawyers etc) and half just go into higher share prices. If you knocked all these tax breaks on the head and expected people just to buy shares off their own bat, we'd return to a proper shareholder culture and shares would be cheaper. So 'wealth' at the top end would fall and if people put aside the same amount of after-tax money every year, their pension income in retirement will end up the same.

b) Housing Benefit paid to private landlords, about £10 billion a year, meaning that about one-fifth of private landlords' gross rental income is pure subsidy. In a sane world, this would just be a government-run, pay-as-you-go insurance scheme, whereby private landlords pay in 20% of the rent they collect and this gets dished out as Housing Benefit where needed. To be fair, private landlords who are willing to self-insure can opt out of this insurance scheme (they would just have to allow tenants to skip rent for X months if they lose their jobs, so a tenant doesn't care whether he gets cash Housing Benefit or the rent-free period). The residual rate of insurance premiums for small investors who don't want to self-insure and slum lords who buy in low employment areas will thus go higher and higher until they either opt out or give in and hand their homes back to the council.

c) Legal Aid is another such scam, while I'm on the topic. While the general principle is sound, why not make the legal profession pay for it with a percentage contribution on their turnover?

d) Subsidies to owners of farm land, the more you own, the more you get, costs the taxpayer another £3 billion a year at least.

e) then there's minor stuff like SEIS, EIS and VCT tax breaks, which superficially benefit higher earners with spare cash, but actually just funnel money into the pockets of intermediaries and doomed businesses.

In summary, before we dream up ways of increasing revenues from IHT or imposing a general wealth tax, let's go for the quick wins and scrap IHT, stamp duty on shares and the subsidies mentioned at a) to e) above.

That would boost tax revenues/cut government spending (depending on your point of view) and slash bureaucracy (in government and private sector) with the minimum of administrative or legislative effort, as well as reducing wealth inequality.

What's not to like?

Doc Marten boots - real life confirms blog comment

Barman, in the comments here:

Many years ago my daughter had a thing for Dr. Marten boots, she had about five pairs in various colours (all paid for by herself to be fair)...

I used to take the piss out of her for wasting her money for such a stupid fashion statement but she insisted that she only bought them because they were 'so comfortable'... Her blistered, bandaged and plastered feet told a different story!

On the Northern Line on Saturday, I noticed that the young woman standing next to me was earning a bright orange Doc Marten with a blue lace on one foot and a pale blue Doc Marten with an orange lace on the other.

I asked her whether she bought a pair of each. As a die hard Doc Marten fan, she had her stock speech ready and imparted the following information:

1. She owns seven pairs in different colours and she mixes and matches.

2. They look old and battered (seemed fine to me, but she's the expert), but they've just reached peak comfort levels; and by implication, that they are pretty uncomfortable when new.

She alighted at the next station, so I did not have time to ask her about her system for matching shoe laces with the opposite boot. I did wonder whether this was Barman's daughter or whether there is a whole sub-culture with many adherents.

Overlapping random cycles

There are lots of people like Piers Corbyn who reckon that the weather/climate is influenced by lots of things that go in cycles (he reckons that the main influence is changes in the sun's output) and repeat themselves if you look hard enough. Corbyn's forecasts are apparently very good, but the Alarmists dismiss him because he's only forecasting weather and not climate.

Some of these cycles are widely accepted, such as solar 11 year cycles, which possibly form double-cycles of 22 years, ocean oscillations, Milanković cycles (which are actually four quite distinct cycles with wildly different periods).

Some of them are more conjecture, such as Zharkova's longer solar cycles and sixty year cycles.

Some of these will turn out to be misunderstandings, and there will be others which we don't know about yet.
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If you look at the temperature chart from The Conversation, which purports to show that CO2 levels dictate temperatures, what you see is that:

a) there are clear 100,000-year cycles (Milanković cycles, I believe) and everything else is just noise and apparently random variations,

b) temperatures in the current inter-glacial period are very similar to the previous seven, and

c) if CO2 levels dictated temperatures in the way the chart implies, it would be about 10C hotter than it is, which it clearly isn't. So we can rule out minor changes in CO2 levels (a change  of one per cent  of one per cent of the atmosphere by volume) as being relevant.



The article itself agrees that in pre-industrial times, temperature drove CO2 levels and not the other way round, and goes to some contortions to explain why that relationship has now flipped.

For more contorted explanations, go to the article at Skeptical Science. This site is reliably Alarmist but infuriatingly enjoyable - it's like reading an editorial in The Sun newspaper, you know it's propaganda but it's so expertly done, that on a first read it seems quite convincing and you have to look quite hard to spot the false logical steps.
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I imagine it is fiendishly difficult to disaggregate overlapping but independent cycles. So well done Milanković, who did all this by hand and doesn't appear to have got credit until after he died (see also Kondratiev).

Just for fun, I set up and Excel spreadsheet with sine waves cycling between +1 and -1 with periods 2, 3, 5, 7, 11 and 13. A chart of the totals looks pretty random, those occasional outliers of +4 or -4 look like extreme or random events, but they are not, they are entirely predictable if you know the inputs:

Just dig a canal across the UAE, problem solved.

According to the Americans, the Iranians are carrying out sporadic random attacks on oil tankers passing through the Straits of Hormuz. The Iranians are decrying this as a false flag operation etcetera.

As a proper arm chair internet warrior, with zero knowledge about civil engineering, local politics, shipping or the oil industry, my brilliant solution, that can't possibly not work and will definitely defuse the whole situation, is for the UAE to quickly dig a new canal so that oil tankers can bypass the Straits entirely.

They can do short route A (30 miles or so) across the top bit, or the UAE and Oman can co-operate and do longer route B (100 miles or so) from Dubai to Sohar.

I did put some thought into this - my first bright idea was build a pipeline along those routes, but it turns out it would take days to empty an oil tanker at the western end and days to fill another oil tanker at the eastern end, so I shelved that one.

The answer's obvious if you look at the map:

Killer Arguments Against LVT, Not (461)

Via Labour Land Campaign, an article in Prospect from last year, which, despite the sub-heading, only touches briefly on LVT.

True to form, a drone at Conservative Central Office - who presumably have a member of staff on their online response team tasked with responding to the day's Google search results for 'Land Value Tax' - leaves the following sob story:

I [bought] my house for £100,000. I live in it for 20 years. It is big enough for my family, the transport links are OK for work, schools for the kids are accessible.

Because of things like 'Help To Buy' and ultra low interest rates, house values in my area mean my house is now worth £1m. In the meantime my pay has doubled, but because of inflation I am actually no better off than when I bought the house. A land value tax at say 1% would mean I would have to find an additional £10,000 a year, despite being no richer.

Yes, my house may be 'worth' £1m, but that doesn't mean I actually have £1m, or even an extra £10,000. I would have to sell. I might well not be able to afford anything else local, and have to move jobs, the kids move schools, and all as a distressed seller. This is politically unlikely, and economically crass.

If you want to tax houses on value, start whittling away at the exemption from CGT - but gradually.

A proposal to get rid of the capital gains tax exemption for main residences would meet with the same vitriolic response; and taxing long terms gains rather than imposing an annual service charge is a terrible idea anyway, so let's skip that last bit.

Why do I have zero sympathies with this person? Because that's basically my life story (and typical for millions of Londoners who bought more than 20 years ago, we're nothing special). Just replace '£1 million' with £800,000 (based on recent selling prices of larger and smaller homes on my street). I know how bloody lucky I am.

Both of our kids changed primary schools halfway through because of moving, it was no biggie, at that age, they adjust. They both always went to secondary school using public transport by themselves; if we moved, they wouldn't change schools, they'd just take a different route. Plenty of Londoners spend an hour commuting, you don't change jobs just because you move within London. We moved outwards (white flight) and we took the extra twenty minutes each way each day on the chin.

Like this person, I don't have actually have £800,000, nobody said I did. That is not, and never was, the point.

This person makes clear, that house prices/rental values are a trade-off for convenience (von Thünen's Law of Rent). They don't want to move to a cheaper area, which in London terms means 'further out on the Tube or rail network' because of the extra time/cost spent commuting, sure, why would they? But they claim they don't want to pay the extra £10,000 a year either.

So what will they choose? The inconvenience or paying the £10,000?

We know for a fact that this person is happy to be £10,000 a year worse off as a trade-off for the convenience. How? Because they could sell their 'big enough family home' in Islington (or wherever it is) and buy something that for half that in Barking, or Harlow, or Croydon or somewhere cheaper/less convenient, banking £400,000 tax free cash after SDLT, moving costs and new carpets, which would give them an extra £10,000 a year cash to spend for the rest of their lives.

So the chances are, they'd pay the additional £10,000 (even assuming there weren't corresponding reductions in other taxes which would make most working couples better off). I know that I would, because the alternative is me and Mrs W and both of our kids spending more on travel and wasting an extra X minutes a day each sitting on public transport. We might pay our £8,000 a year through gritted teeth, but we'd pay it.
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Seriously though, what planet are these people on? There are plenty of people outside London/south east who bought homes for £50,000 - £100,000 twenty years ago which only have kept pace with inflation or less.

How much sympathy are they supposed to feel for those with an unearned windfall gain - made at the taxpayers' expense, as the drone admits - equivalent to an average lifetime's earnings who are asked to pay a little bit of extra tax?

Value Added Tax is quite literally a tax on "value added". Why do people not think about what "value added" means?

The Tory wannabes are trotting out their tax plans, and a couple have mentioned looking at VAT (Michael Gove, article by Sam Dumitriu, and Rory Stewart, via @Sam_Dumitriu).

(Wow, Rory Stewart has "land value tax, at least for business and agricultural land" in his 'good' column and "business rates and no land value tax" in his 'current taxes' column. That's his leadership chances flushed down the toilet).

Gove and Stewart are politicians and don't know or care about economics. Dimutriu ought to know better and is the bigger fool for it. He goes along with the Big Fat Lie that VAT is some sort of harmless tax on 'consumption' or 'indirect tax' which does not affect production.

Let's take a step back and agree that income tax/NIC are taxes on wages or earnings and corporation tax is a tax on corporate profits. Their effect is pretty much the same, the percentage rates and administration is just different.

I trust we can also agree that workers and businesses 'add value', and the more value they add, the more tax they pay. So income tax, NIC and corporation tax are literally taxes on added value.

Value Added Tax  is just more of the same!

We reach an equilibrium point between gross selling prices, net wages after tax and net profits after tax, that point is fixed by the overall tax wedge. Shuffling between these four taxes makes no difference to VAT-registered businesses.

It would make no difference to gross selling prices, output, net wages or net profits (of VAT registered businesses) if we:

a) went to one extreme and scrapped VAT and increased taxes on wages and profits; or

b) went to the other extreme and scrapped income tax, NIC and corporation tax and increased VAT to a very high rate.

Here's a worked example for a typical sort of VAT registered company, which sells output for £120 gross; pays £36 to VAT registered suppliers, pays gross wages (incl. employer's NIC) of £50; employees receive net wages of £30; and has profits before corporation tax of £20.

Current system, with VAT

Gross sales.......................£120
Paid to HMRC as VAT.....(£14)
Net sales............................£106
Paid to suppliers, net.....(£30)
VAT paid to suppliers
and passed on to HMRC...(£6)
Gross wages......................(£50)
Net profit before tax..........£20
Corporation tax @ 19%.....(£4)
Profit after tax.....................£16

No VAT, 17% extra Employer's NIC and 38% corporation tax

Gross sales.........................£120
Paid to suppliers...............(£36)
Gross wages.......................(£50)
Extra Employer's NIC
£50 @ 17%...........................(£8).
Net profit before tax.........£26
Corporation tax @ 38%...(£10)
Profit after tax....................£16

No income tax, NIC or corporation tax, VAT at 46%

For the non-mathematically minded, net sales £82 x 46% = £38; £82 + £38 = £120, so gross sales £120 as before.

Gross sales........................£120
Paid to HMRC as VAT......(£38)
Net sales..............................£82
Paid to suppliers..............(£36)
Tax-free wages.................(£30)
Tax-free profit....................£16
-----------------------------------------------
The idiots out there think that because sellers can split the total selling price up into 'net' and 'VAT' that magically, consumers pay it.

If that were true, businesses could simply split the selling price into 'net', 'corporation tax' and 'VAT'. Would the idiots then believe that businesses don't pay corporation tax?

Lock 'em up and throw away the key...

From the BBC:

The NHS fraud squad is investigating GPs in England amid suspicions they are claiming for non-existent patients.

Doctors get an average of £150 a year for each patient on their list, but records show there were 3.6 million more patients in the system last year than there were people in England.

The discrepancy prompted NHS England to employ [Crapita] to start chasing up these so-called ghost patients.

The NHS Counter Fraud Authority is now launching its own investigation.

... in the following order

1. Whoever thought it was a good idea to pay each GP a quarter of a million quid a year in the first place. From the article:

The average GP has around 1,700 patients on their list so the payments make up a significant chunk of their income.

1,700 x £150 = £255,000, and that's just a 'significant chunk'. How much more do the buggers get?

2. Whoever thought it was a good idea to pay GP's on this basis (rather than work actually done).

3. Whoever let things slide for so long rather than crunching the numbers every year as a matter of routine.

4. Whoever thought it was a good idea to throw money at Crapita for doing something which the NHS Fraud Authority is (or should) be doing.

5. A few GPs and their chief receptionists who must have been complicit in the whole scam, pour encourager les autres.

The last civilised climate discussion about climate science

From Don Aitken's blog, a 2014 article on The Relationship between CO2 and temperature.

Although the author of the article would clearly be decried as a Science Denier (TM, The Guardian) by today's standards, and some of the replies are by what Science Deniers decry as Warmenists or Alarmists nowadays, it is all professional and friendly. You don't see that any more, it's all completely polar (or bi-polar) nowadays. Or are New Zealanders just naturally polite?

(The Science Deniers in that thread seem to be more credible and thorough than the Warmenists, but I would say that wouldn't I?)
---------------------------------------------
For example, none of the Science Deniers advances the silly argument that The Second Law of Thermodynamics - that heat doesn't flow spontaneously from cool things to warm things - means that gases in the atmosphere can't possibly reflect infra red back to the surface of the and hence warm it, because the atmosphere is, on average, cooler than the surface of the earth. That claim is just embarrassing and undermines the Science Deniers' credibility.

No more fear of flying

Emailed in by Benj, from IATA.org, the Q&A box:

How are slot allocations made?

Slots are handed out twice a year, for summer and winter schedules. “Grandfather” rights entitle incumbent airlines to continue using the slot if it has been used for at least 80 per cent of the previous period. In the UK, slots are traded in the secondary market

What about new slots?

New slots are put into a pool. Half are supposed to go to new airlines

What’s being proposed?

The government wants to promote competition, including auctioning slots to the highest bidder. The existing system provides incentives for “slot hoarding”, when airlines retain as many slots as possible and sell them to make a profit.

From the article itself:

Existing slots are held by airlines using so-called “grandfather rights”. In Britain, they can be traded in a “secondary market”, often commanding huge sums. A record $75 million was paid by Oman Air for a set of rights at Heathrow. 

The government said in its Brexit planning guidance that slot allocations would remain unchanged in the event of no deal. It insisted that the rights would be allocated in a “transparent and non-discriminatory way”.

However, the transport department is understood to be seriously considering the adoption of an auction system. The department’s aviation strategy, published before Christmas, confirmed that the government was considering market-based mechanisms for release of additional capacity”, and added: “This could include auctioning all slots or a limited number that would be most sought-after.” 

A House of Commons library paper from 2017 admitted that auctions “may be more difficult for small carriers with lower purchasing power”.

Lara Maughan, the IATA head of worldwide airport slots, said: “Making airlines pay for entering or growing at an airport means consumers will be the losers. At a time when Britain is looking to improve its competitiveness and to build more connections to the world, these proposed changes will do the exact opposite. 

"Extracting even more cash from airlines and their passengers will mean higher costs, less choice and less investment. The government’s stated objective to improve regional access to Heathrow would be irreparably damaged by an auction system that would force airlines to prioritise the most lucrative long-haul routes.”

IAG said: “We support IATA’s view that slot auctions would negatively impact consumers and undermine Britain’s aviation industry.”

Do these people not proof-read their own propaganda?

1. The easiest way to make money from aviation under current rules is to set up a small airline, be allocated some freebie-slots and then sell the slots. The article says as much. Small new airlines tend to go out of business fairly quickly, and when the majors are buying them, they value them mainly on the slots they own. It's a bit like buying land, getting planning permission and then selling the land again. It's the most profitable part of 'property developing'.

2. If airlines are happy to pay for second-hand slots, how is this any different to paying the government for them? No different. And paying one year in advance in an auction is a lot less risky than paying a lump sum in the hope it will be grandfathered for ever. If their claim that auctions lead to higher ticket prices were correct, then there would be a sudden increase in ticket prices after a slot has been bought by a successor airline. No such evidence.

3. We know that ticket prices are largely 'rent' and have little to do with costs. A flight from Stansted to Gdansk is a longer distance, but cheaper than a flight from London Heathrow to Berlin Tegel. An early morning or late night flight is cheaper than a midday flight etc. Flights to holiday destinations during the school holidays are more expensive than out-of-season. Airlines like to fill planes, so do a weird auction process with rising or falling prices; different passengers on the same flight will have paid different amounts. If costs exceed (potential) ticket price, the route is not used.

4. The balance of ticket prices minus actual costs is the rental element. A slot in itself has no cost of production, they are created - or destroyed - at the stroke of a bureaucrat's pen. Some have huge value (unrelated to cost of production), so they are 'land' in economic terms. Therefore, what you pay for the slot does not influence ticket prices - ticket prices influence slot values!

5. The small airlines are the Poor Widows or the Small Shopkeepers of the aviation business, "They'll go out of business because the majors have deeper pockets." That's easily dealt with, keep giving them free slots, on the condition that if they go out of business or are taken over by a major, the slots are forfeited. or just make them free for the first two or three years until they are up and running.

6. If an auction system "forces airlines to 'prioritise the most lucrative long-haul routes", then that is great news. I note that the IATA lady also claims that auctions would prevent airlines from "build[ing] connections to the world". So which is it? It can't be both.

7. It's the take-off and landing that incur the highest costs (fuel used; risks/risk mitigation and noise pollution), so it is more efficient to fly long haul. If that means fewer, less lucrative domestic flights, so be it. Take the train or drive. All things considered, this is better for the economy.

8. Whatever the merits of auctions, they are infinitely better than Air Passenger Duty. We don't know whether auctions would raise more or less money than APD; of whether this would lead to more or less flying, but that is irrelevant. It would be the 'right' amount of money and the 'right' amount of flying.

Killer Arguments Against LVT, Not (460)

Sobers trotted out the time honoured classic: "Many people wouldn't be able to afford to buy their own homes at today's prices". The conclusion is, they wouldn't be able to afford to pay an annual tax on the value thereof either.

The factual statement is quite true - and a sign that something is very, very wrong - but the conclusion does not follow from the fact, and both are completely and totally irrelevant to the topic in hand.

1. It's only since Georgism Lite was abandoned (although the Tories are reintroducing some minor elements of Georgism Lite, on the basis that more owner-occupiers = more potential Tory voters) that we've had this bizarre state of affairs, that people who bought more than X years ago wouldn't be able to buy today. Once LVT is in place and bedded in, most people will be able to afford to buy their own homes, by definition.

2. The argument is trotted out whether you propose full-on LVT and massive cuts in taxes on earnings and output, or just a really modest LVT that merely replaces Council Tax and SDLT. Numbers and maths are not the Homeys' strong points.

3. LVT is not based on selling prices, but on rental values. Even a full-on LVT, by definition, would be a certain proportion of the (full) rental value, anywhere between 0% in the really low value areas and about 80% in the poshest bits of super-expensive areas. For most people, that extra tax will be less than all the other taxes they will no longer be paying (again, by definition). For some it won't. Tough.

4. Mysteriously, tenants can afford to rent, but most could not afford to buy the home they are renting, or one similar to it (or else they would not be renting in most cases). So in the topsy-turvy Home-Owner-Ist non-logic, if you can't afford to buy the home you live in, you can't afford to rent it either, or even pay a fraction of the rent. But clearly tenants can. Hmmm.

5. The Homey view is that tenants can afford to rent, and are expected to pay a load of extra tax to subsidise owner-occupiers and landlords.

6. What does 'afford' even mean? As long as a household has enough left over for the basics, it can afford it. After paying rent/LVT, anybody with more than £10,000 or so a year to spend on everything else can survive at least. You want nicer stuff? Work longer hours or get a better job. Many tenants don't have much money left over after paying rent (partly because of the extra taxes they are paying) and get zero sympathies from the Homeys.
-------------------------------------------------------------
The KLN then segues nicely into another classic: "Low income people will be 'forced' to live in slums and high income people will get all the nice houses." How is that any different to the situation without LVT?

In any event, under LVT, there would be far fewer slums; whether something is a slum or not depends largely on how many people in the area are working and how much they earn. Fewer unemployed and higher wages => fewer slums.

Overall, it would still be a huge win for low income people (and high income people), because that big slice of GDP that disappears into land values (landlords, banks and down-sizers) for nothing in return stays in the pockets of aforementioned low and high income people.

Georgists do not take sides between low and high earners any more than between employees and employers, that's a largely false dichotomy invented by Communists and Homeys alike to distract from the real issues.

Tory top-job contender tax plans

Please tell me the ones who have suggested anything not covered here!

1. Sajid Javid:

"My priority will always be to cut the basic rate of tax. But if cutting top rate means more revenue, like what happened last time it was cut, that means more nurses, police, I would cut it if it gives us brings in more revenue and bigger public services."

It comes after he told the Sunday Telegraph he would be willing to cut the top rate of tax from 45p for the highest earners to inject more "dynamism" into the economy.

Nice bit of double think there, cutting the basic rate is his 'priority', but first he's going to reduce the 45% additional rate to the normal 40% higher rate. Half a mark, I guess.

2. Jeremy Hunt:

Jeremy Hunt has praised Donald Trump's economic record and suggested he could introduce similar tax cuts for business if he becomes prime minister.

The foreign secretary, who is one of 12 candidates standing to succeed Theresa May, said the US president had delivered "double the GDP growth that we have" and said we would want to "look at" the Republican's policy of "big business cuts in tax".

Epic fail, the Trump tax cuts were super-regressive and will simply lead to higher deficits to bugger up the next Democrat president. Let's also contrast this with what he was saying a year ago when he was still Health Secretary:

People are willing to pay higher taxes to fund the NHS, Jeremy Hunt has said, amid an ongoing row among senior ministers over how to secure the future of the health service.

The health secretary said the public was open to the idea of tax hikes to pay for healthcare "provided they can see that it is not being wasted", after a major report said the NHS would need £2,000 from every household to stay afloat.

3. Michael Gove:

"My economic plan is driven by the need to increase investment, productivity and wages across the country, with a special focus on helping those areas and regions where productivity is lower," he wrote.

"It would mean reducing the regulations which hold business back, cutting and reforming taxes - such as business rates - which put pressure on small businesses and undermine our high streets, using the opportunity of life outside the EU to look to replace VAT with a lower, simpler, sales tax," he added.

So the usual special pleading for owners of high street premises, boo, but at least he's mentioned the possibility of scrapping VAT. A sales tax would have pretty much the same damaging economic effects as VAT, but if handled correctly, could at least be neutral (or a bit more neutral than VAT) and a lot simpler to calculate and pay. Basically, all business-to-business supplies might as well be exempt, only the retailer/final seller needs to pay it over.

4. Sam Gyimah:

That’s why today I am pledging to abolish Britain’s five worst taxes – the taxes that do the most damage for the money they raise, and whose abolition will get us the most bang for our buck. I would:

* Make the Annual Investment Allowance unlimited.
* Index the tax thresholds to inflation – permanently.
* Replace business rates with a commercial land tax.
* Eliminate the personal allowance withdrawal for higher earners.
* Move towards abolishing stamp duty for homes under £1 million.

Clearly the best of the bunch.

'Commercial Land Tax' sounds a lot like LVT, there is so much we could sweep up into this besides Business Rates (SDLT on commercial premises, planning fees etc).

Before we think about reducing the 45% additional rate to 40% (Javid's suggestion), the really stupid thing that Brown/Darling introduced is the effective 60% rate for incomes between £100,000 and £125,000 (or £100,000 + twice the annual personal allowance), so well spotted Mr Gyimah!

If we could nudge him towards rejigging Council Tax in exchange for getting rid of SDLT (get rid of it entirely, stupid tax), then so much the better.

5. Andrea Leadsom:

The first cuts we need to make are to swearing.

F*** off.

6. Rory Stewart:

The international development secretary -- an outsider in the race to succeed Theresa May -- said he won’t make spending promises the U.K. can’t afford. Candidates who do so would put the country’s reputation for economic stability and competence at risk, Stewart said in a statement to Bloomberg on Wednesday.

“Candidates cannot on the one hand attack Jeremy Corbyn for fiscal irresponsibility and at the same time make unfunded promises,” Stewart said, referring to the opposition Labour Party leader. Some rivals’ plans are incompatible with the economic fallout from leaving the European Union without an agreement on Oct. 31, which they are also advocating, he said.

Fair point, but not very specific about what his plans are, if any.

"The real trainer fans"

From the BBC:

Tom Rayment said he was on the Adidas website for about two hours trying to get hold of a pair [of Yeezy Boost 360s] but was unsuccessful.

The self-confessed trainer fan, 24, from Peterborough said he already has four pair of Yeezys.

"When they were first released there wasn't the demand like today," he said. "I feel people just buy them to resell so they can make profit, then it is the genuine trainer lovers who pay the extortionate prices to the re-sellers."

My son used to have a bit of a trainer fetish (it's worn off now, thankfully). Apparently there are "real trainer fans" with thousands of subscribers to their YouTube videos showing off their latest purchases.

The gimmick is, you're not allowed to actually wear them. You keep them in the original box and only get them out to show your mates.

Oh yes it is, oh no it isn't.

Wattsupwiththat published an article called Changing minds: How do you communicate with climate change skeptics?.

I read down as far as this nugget:

Bargainers are also very strong, adamant deniers of climate change, but they see religion and the environment as more of a negotiated relationship. They take some bits of science and marry it with their faith, but then they ignore the parts of science that don’t support their viewpoint.

They would likely say that rising carbon dioxide levels are really great because that helps plant life grow. It’s true — carbon dioxide does improve plant life — but only to a certain level, which we’ve far exceeded.

That's news to me. Let's see what the professionals have to say about it. From Fifth Season Gardening Co:

If you are green to gardening you might not know that carbon dioxide, the gas we all exhale, is critical to plant growth and development.

Photosynthesis, the process through which plants use light to create food, requires carbon dioxide. CO2 concentration in ambient air ranges from 300-500 parts per million (ppm), with a global atmospheric average of about 400 ppm. If you are growing in a greenhouse or indoors, the CO2 levels will be reduced as the plants use it up during photosynthesis.

Increasing the CO2 levels in these environments is essential for good results. Additionally, there are benefits to raising the CO2 level higher than the global average, up to 1500 ppm. With CO2 maintained at this level, yields can be increased by as much as 30%!

BBC guidelines means that they have to squeeze it into every article...

From the BBC:

The world is entering "a new phase" where big outbreaks of deadly diseases like Ebola are a "new normal", the World Health Organization has warned.

Previous Ebola outbreaks affected relatively small numbers of people. But the Democratic Republic of Congo is dealing with the second largest outbreak ever, just three years after the world's largest one ended.

The topic of epidemics is fascinating and terrifying in equal measure, go on...

Dr Josie Golding, the epidemics lead at the Wellcome Trust, said the world needed to get better at preparing for such outbreaks.

"With Ebola in West Africa, that was the mobility of people and porous borders - that is now the world we live in, that won't stop," she said.

Yup, more movement of people = more spread of diseases, until one day hopefully we'll all be immune to everything.

And drumroll, please...

Climate change could lead to more outbreaks like cholera in Mozambique after Cyclone Idai, she said. But she hoped diseases resulting from humanitarian crises would not be a new normal.

"Preparedness needs to be better, we can see movement of populations and climate change, a lot of this we can see coming, and we need more resources to plan and prepare."

Like most 'natural disasters', the cyclone/cholera episode was actually a failure in town/infrastructure planning. Cholera outbreaks were common in England until we got our mains water and sewage systems sorted out; Developed countries are regularly hit with typhoons- hurricanes-cyclones and they don't have cholera outbreaks.

They REALLY want the general public to help them down these attackers...

From the BBC:

Miss Geymonat added that the gang of at least four men might have broken her nose during the ordeal, and stole a phone and bag from them before fleeing.

Both women were taken to hospital for treatment to facial injuries. Miss Geymonat said one of the men spoke Spanish and the others had British accents.

I'll be on the look out for a man speaking Spanish and three or more men with British accents!

The Law of Rent strikes again!

From the BBC:

Rising rents mean young people are less likely to move to UK cities where average salaries are higher, a report indicates. The number of young people in private rented accommodation who moved for a new job has almost halved in 20 years.

Despite the higher wages available, financial incentives for moving are lower, say researchers.

"Pay gains are being swallowed up by high housing costs," said Lindsay Judge of the Resolution Foundation. "For young people in particular, there are real advantages to moving when it comes to trying new roles and developing skills - and housing should not be a barrier that prevents them doing this."

Although unemployment has fallen, the Resolution Foundation found that rents had climbed the fastest in higher-paying areas of the UK. Private rents have risen by almost 90% in the UK's highest-paying local authority areas, while rents have increased by just over 70% among the lowest-paying local authority areas.

In 1997*, after housing costs were deducted from salaries, private renters moving from a low-paying area such as East Devon to a mid-paying area such as Bristol would have received an average financial gain of about 16%. Today, the financial gain would be a mere 1%.

I trust this is no surprise to anybody who reads this blog, this is all entirely as predicted.

* In 1997, the UK government made no-fault evictions much easier under s21 Housing Act. This was the last vestige of Georgism Lite that kept rents and prices down for most of the 20th century. Banks were suddenly falling over themselves to offer buy-to-let mortgages, knowing is would be much easier to sell the home with vacant possession if they wanted their money back in a hurry, and the rest is history...

But back in 1997, rents had not yet rebounded to their full market rate and you could still improve your net income by moving to a higher wage area. That quest is now pretty futile.

Three related articles.

1. There was an interesting article on page 15 of today's City AM, I can't find the text of the article online, but you can find a pdf here.

The headline was "Britain doesn't need a special trade deal to boost trade with the US" and the upshot was that the businesses in the UK and the US manage to buy and sell a huge volume of goods and services from each other, despite the fact that there is no 'free trade deal' between the US and the UK (qua EU Member State). The author gives half a dozen examples of particular restrictions which could be lifted on one side or the other, and concludes:

There's so much that can be done if both sides build on the strong foundations which already exist. Prioritising that rather than attempting a brand new FTA from scratch won't limit the scale of what we can achieve."

A good point. All-encompassing trade deals can take years to negotiate, because dozens of special interests on each side will hold the whole thing to ransom, so it's better to do it a bit at a time on an ad hoc basis.

(My caveat is that the author is Ben Digby, the CBI's International Director, and the CBI are Hard Remain, so they might be a bit biased, but fact is, we buy and sell a lot more from businesses in EU Member States than in the USA, so fair enough.)

2. The Daily Mash made a perfectly valid point with their article headed "If you don't want to eat chlorinated chicken, you could always just read the f***ing label, say experts."

3. I Tweeted the Mash article and @TraderPaulFX replied that most veg and salad in the UK are washed in chlorine. A quick Google indicates this to be correct, see e.g. here.

The Laffer Curve

From today's City AM Forum (I can't find the article online yet, so I had to copy type. Please forgive any typos.)

By Harry Phibbs, a journalist at ConHome:

Hammond's virtue signalling on low wages is hypocritical

... There are alternatives the government could take that would help the low paid, and would also help reduce unemployment, rather than endangering jobs.

The first priority should be a sharp rise in the threshold for national insurance contributions.

Employees have to hand over 12 per cent of their earnings to the government on anything over £166 a week, so somebody on the national living wage working a 40 hour week has a significant tax bill [not to mention the 13.8% that the employer has to pay].

Raising the threshold would require the chancellor to find some savings in state spending. That's more challenging than just imposing a requirement on someone else and claiming the credit for it. But it would not be impossible to achieve.

Another priority to address is the Universal Credit earnings taper rate. Changing this would help make it more rewarding to be in work, rather than on welfare.

Before the Universal Credit reforms, people who accepted work really did end up with less money. This is no longer the case, but the taper rate means that for each £1 earned, 63p in benefits is [sic] lost. That is simply too steep a taper. After all, the Laffer Curve applies to the poor as well as the rich, so reducing the taper would reward work just as tax cuts do.

There is something awfully hypocritical about Philip Hammond and the government decrying "unacceptable" levels of low pay by employers, then grabbing a chunk of a salary so that it is even lower when it finally gets to the employee."

I've been saying all this for over a decade, but it's reassuring when others say it. The 67% overall marginal rate on wages over £100,000 a year* seems too high too me, but far less troubling than the 80% or 90% overall tax/taper/withdrawal rates faced by people on wages up to £20,000.

* Do the maths, this is mentioned even less often.

Killer Arguments Against LVT, Not (459)

Sobers unleashes a torrent of primo Homey bleating under the previous post:

Your calculations will work as long as you assume that everyone lives in a house their current income can afford the 80% mortgage on. Then income will be largely in proportion to house value and the amount they lose in LVT will be offset by the amount gained from tax cuts.

I made no such assumption, I used a middle-of-the-road case as an example to show they are - as you'd expect - modest winners if we had LVT instead of Employer's NIC, Council Tax, SDLT, IHT and the TV licence fee, and stated quite clearly that it's easy to think up categories of winners and losers.

However many people live in houses that they couldn't afford to buy on their current income, and not just the widows in mansions you always decry as a straw man.

I am perfectly aware of this; it is irrelevant. Many people couldn't afford to buy their current homes - I wouldn't get a mortgage any more (now over 50) - but most of the people in this category could afford to rent their current home - as I did for six years before the LL and I both got bored and he sold it to me. And LVT is actually based on rental values. I just use % of current selling price as an approximation.

I can think of several people in my own social circle and family who are not that wealthy, certainly not in income terms, well below the average income, and live in houses that they could not afford to buy today.

Anecdotal and repetition.

Mainly because they have either received small inheritances they have put into property...

Not hard work then? And that's incorrect and lazy use of the word 'property'.

... they bought houses cheaply many years ago when house prices in that area were relatively lower, or they bought their council house at a considerable discount...

Exactly, the Baby Boomers helped themselves while it was still government policy to keep rents and prices down, and then pulled up the ladder.

... or have paid off their mortgage and downsized their jobs to match their outgoings. So they are not 'rich' by any stretch of the imagination, yet they would be clobbered by an LVT.

Sobers' Boomers are pleading poverty, which is entirely self-inflicted, having 'down-sized their jobs' entirely voluntarily. They'll be the first to slag off the first lazy Millenial who says "I'd like to inherit some cash, buy a house at a discounted price and then work part-time'.

Why the use of the word "clobbered"? Why is it OK for younger people to be "clobbered" with VAT, NIC and rent?

Mainly because they have managed to build up some capital, which is located in their houses.

They clearly haven't "built up capital" by his own admission . They have ridden a government-sponsored house price bonanza and are now resting on their laurels. The actual 'capital' they own (the building) is largely unchanged. Rule of thumb: if the price of something varies inversely to interest rates, it's not real capital, it's a source of rent.

He sneaks in a diagonal comparison as well.

The fair comparison is: younger tenant on £25,000 a year is paying additional tax to fund the public services which benefit Sobers' semi-retired example, also on £25,000 a year, but living in a £500,000 home.

How the fuck is that 'fair'??

Thus they are exactly the one who will scupper any LVT - politically speaking its not a pure balance between winners and losers that determines which side wins, its how many winners actually side with the losers, because they feel its unfair whats happening to them.

Hence why tobacco taxes are politically fine, because the winners don't care a jot about smokers, they just think 'If you don't like the price of fags, don't buy them, and you won't pay the tax'.

If you don't like paying LVT, then downsize.

Whereas if significant numbers of ordinary people with below average incomes are hit by LVT, then many more people will vote against it, even though they might be winner themselves, because they consider it unfair on someone else

Again the word 'hit'. He glosses over the fact that he wants landowner subsidies to be paid by taxes which 'hit' somebody else.

Sobers is proposing continuing an unfair system on the grounds that is 'fair'. Well it's not; why should working tenants 'with below average incomes be hit with [VAT, NIC and rent]' to pay for landowner subsidies?

What the Homeys really want is socialism for land speculators; I don't like socialism and I don't like land speculators, sorry. Younger people just have to learn to be as selfish as the Homeys.

Introducing LVT by stealth

I love LVT and I love maths, so here goes...

First, write down what you know.

1. Let's get rid of the four biggest and most egregious taxes on housing/wealth: Council Tax (regressive) net of rebates annual revenues £25 bn; SDLT (progressive) £10 bn; Inheritance Tax (hyper progressive unless you are really rich) £5 bn and the TV licence fee (hyper regressive) £4 bn.

2. And let's get rid of Employer's NIC, a tax on jobs, annual revenues (say) £86 bn (60% of total NIC revenues £143 bn -  I've never found an official split between Employee's and Employer's).

3. To be fiscally neutral and replace those five taxes, a residential LVT would need to raise £130 bn a year. This would require an LVT of 65% of total annual site premiums, or for the uninitiated, about 1.8% of current selling prices.

4. Politically, this will only way this will fly is if you minimise the numbers of losers and maximise the number of winners which is how the buggers get away with hiking tobacco duty each year, because only one-fifth of adults even notice.
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Let's start in the middle (and work outwards) with a recent first time buyer couple in an average/median value home, both employees on an average/median wage of £25,000 a year, who bought a house with a 20% deposit (or who have 'built up £50,000 equity' since they bought) and a 4 x joint income mortgage, so their house is worth £250,000.

At present, their P60 looks like this (courtesy of Listentotaxman.com):
+ Salary £25,000
- Income tax £2,498
- Employee's NIC £1,964
= Net £20,538

What they don't know is that their employers have each had to chip in £2,259 Employer's NIC. In truth, their gross wages are £27,259 each and they pay £6,721 tax each.

What they do know is that they have to pay about £1,100 in Council Tax and the TV licence fee out of their net income.
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Next year the LVT on their home will be £4,500 (£250,000 x 1.8%), which will be collected via PAYE, half each (the same as any coded out benefit, Student Loan repayments etc) and their P60s will look like this:

+ Salary £25,000
+ Employer's LVT contribution £2,259
- LVT £2,250
- Income tax £2,498
- Employee's NIC £1,964
= Net £20,547

So no real difference there, except they no longer have to pay the £1,100 Council Tax and TV licence fee. So they will be modest winners and will wonder what all the excitement was about.

HMRC won't care whether they tax they collect is called 'Employer's NIC' or 'Employer's LVT contribution' or 'LVT', it all goes in the same pot and can be dished out again as old age pensions or as block grants to local authorities (to make up for council tax). Those councils with high council tax get the same high amount; those with low council tax get the same low amount.

Employers won't care either for the same reason. Cost to them is the same.
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It is easy to find 'hardship cases' where people will pay more than now:
- Poor Widows in Mansions (who get the 'defer and pay on death' option);
- the self-employed who pay  much about one-third as much in National Insurance (tough, they now get the same state pension rights so there is no policy justification for this);
- private landlords. Super tough, they should have seen it coming.

It is just as easy to find a huge group of people who will pay a lot less - tenants (and young adults who still live with their parents), who out-number all the Poor Widows in Mansion and the self-employed in electoral terms, if they can be bothered to register to vote and actually vote.

They will see the lines 'Gross salary' and 'Employer's LVT contribution' with no deduction for 'LVT', so that's like a 9% pay rise,  well worth registering and voting for.
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Then the government just has to keep going...

If LVT goes up from 65% to 100% that means a £70 bn reduction in other taxes; such as reducing the rate of VAT from 20% to 5% or so (and getting rid of a load of dumb exemptions and the zero rating for new housing). The maths gets a bit more complicated here because of the circularity, but it's all do-able, I'll plan the next step once we've got going.

Chris Grayling is very good at his job.

"Nonsense!" shouts the crowd, "He has the reverse Midas touch and turns everything to shit."

I used to think this, up to and including messing up the railway franchises and the ferry contract with the company that owned no ferries, but after reading about his latest debacle (the botched 'privatisation' of probation services), the penny has dropped.

He is clearly bad at privatising things - but his job description isn't 'privatise things well', it is 'privatise things badly', and he is very good at that, a 100% track record so far. And anybody with half a brain must know that you cannot 'privatise' core functions of the state, like probation services, or indeed HM Land Registry.

That is the only rational explanation, people wail about the shocking cost to the taxpayer, but from the point of view of the contractors, the lawyers, the consultants and other middlemen, those are corresponding huge gains.

I assume that with all these things, the recipients make large donations to the Conservative Party and/or offer cost non-exec directorships to senior Conservative politicians, which is the object of the exercise from the point of view of Chris Grayling (and whichever Prime Ministers appointed him/didn't sack him).

Killer Arguments Against LVT, Not (458)

Two KLNs which have been bugging me for a while:

1. The YIMBY argument, "It's all about supply, build more houses and prices will fall, no need to hit existing home-owners with LVT".

I admit I got bogged down in trying to explain that:

a) more supply - of the right type of buildings in the right places - will increase overall rents and prices. They can't respond to my simple observation that there are more homes and commercial premises within the M25 than in the whole of Scotland, despite Scotland having fifty times the surface area, yet prices and rents are much higher inside the M25. So logic says, build more inside the M25, prices and rents there will increase further.

b) given a sensible corresponding reduction in taxes on earnings and output, the median or average home-owner will end up a lot better off. They're being "hit" with a large overall tax reduction!

Clearly, I'm wasting my time on such arcane points, and the best strategy is to accept their assumption as correct.

The short rebuttal is:

i. Land Value Tax is not primarily about improving affordability, it is about making land owners pay for the value of government spending from which they benefit (fair and economically efficient) instead of making businesses and workers pay for the cost of that government spending through taxes on earnings and output (unfair and economically inefficient). The fact that LVT improves affordability and reduces inequality (by reducing the constant net transfer of wealth from the economy to land owners) is a big bonus, but not the main aim.

ii. Even if in the idealised YIMBY world, rents and prices were to fall, the question of who should pay for the spending which generates land values is unchanged.

iii. Also, LVT would tend to encourage more efficient use of existing buildings and more efficient/productive use of development land.

2. One of Richard Murphy's KLNs "Lower and middle income households tend to only have one valuable asset, their own home. Wealthier people have as much again in shares, pension rights, cars, paintings, jewellery etc. Therefore, a tax on land would hit lower and middle income households hardest and would be regressive. A wealth tax would be much more progressive."

No it wouldn't, that's basic maths.

The point is that land ownership is very concentrated in a few hands, so any tax thereon would be very progressive. The potential revenues from LVT (at least £250 bn a year in the UK) would dwarf potential receipts from a general wealth tax on shares, pensions rights etc (£25 bn a year, tops, even assuming it were morally justifiable and administratively enforceable, which it isn't, and not subject to massive avoidance and evasion, which it would be).

The £250 bn LVT revenues (or indeed £25 bn wealth tax revenues) could and should be used to reduce the most regressive and damaging taxes, so although lower and middle income households will be paying in to the pot under LVT (which they wouldn't be under a general wealth tax), they won't be paying in much and their net income gain/tax reduction will be much more than if they were merely given an equal share of that hypothetical £25 bn wealth tax revenue.