Blair: worried about his own funeral

From the BBC:

Tony Blair has criticised people who hold parties to "celebrate" the deaths of former Prime Ministers, saying they were in "pretty poor taste". The former Labour prime minister urged critics of him and his Conservative predecessors to "show some respect".

The comments come after parties took place in several cities to mark the death of a former Prime Minister who was even more divisive than Blair, although Blair himself seems to be in reasonably good health and the likelihood is that people will have more or less forgotten about him by the time he pegs it. Except for the bit about invading several countries for no particular reason.

A Labour source also said that leader Ed Miliband "categorically" condemned such behaviour, although the chances of him ever being a late former Prime Minister are a remote as the chances of him becoming Prime Minister in the first place.

Lady Thatcher is the number one hate figure for many on the left, having privatised several state-run industries and been involved in long run-ins with trade unions, most famously during the miners' strike of 1984-5. Rather ironically, Tony Blair is number two.

Guns, Germs and Steel (2)

As recommended (yes you), I ordered this book, which arrived on Friday and I have now finished reading. It's all very interesting, or least useful background info, and for a modest £6 or something at Amazon the sort of book which everybody ought to have read.

It does make me wonder what possessed people from south east Asia (via New Guinea) to island hop all the way as far as Hawaii in little canoes, presumably by trial and error without even knowing whether there was a destination, let alone in which direction it might be. For every single person who made it to Hawaii, how many just ran out of food/water at some random place in the Pacific? A hundred? A thousand? Ten thousand? According to the book populating "virtually every habitable scrap of land in the Pacific" only took about two thousand years from start to finish

And in the epilogue, he says what I have always said: that history is a science like anything else, in that if you look at the grander sweep of things you can recognise definite patterns; and if you can recognise patterns you can predict future events. (Isn't that what economists do all the time? The problem being that economists are on the whole so stupid (or corrupt) that they can't recognise what's going right now, e.g. few of them called the land price or credit bubbles).

Isaac Asimov referred to this as 'psychohistory' in the Foundation Trilogy - ignore the later additions, they were crap. When I read the original trilogy, I assumed that The Foundation was an allegory for Japan (very developed scientifically, but on a distant planet with very few raw materials so that the tides of history would force them to become a successful and hence powerful trading planet), only it turned out that the books were written in the early 1950s, long before Gen Douglas MacArthur's Georgist reforms had turned Japan into the success it was for a few decades (until they turned their back on Georgism again, of course).

Deeply Gratifying Google Searches

A big thanks to the person who Googled no rate cuts before 2010. My post of 15 April 2008 came top out of 68.8 million hits, which would be gratifying enough, but even more smugly gratifying than that, what I wrote was.....

"No more rate cuts before 2010" screams the FT's headline... in other words, they'll have a couple of rate cuts just before the next General Election...

Yup. At the time, the Bank of England base rate was 5.0%. Between 8 October 2008 and 5 March 2010 it was reduced from 4.5% to 0.5% (Excel, see tab 'Historical since 1694'). The next General Election was on 6 May 2010.

A brief history of UK tax, Part 6.

To round off the series, I shall allow myself the indulgence of picking and choosing the least-bad aspects from the long and iniquitous history of taxes in the UK, see footnotes...


1. It would be based on the feudal idea that collecting 'rents' for exclusive possession of land (including the right to use parts of the 3G spectrum, landing slots at airports etc) is the natural least damaging form of public revenue*, having the admiral knock on effect that local councils are motivated to concentrate spending on things that make an area more desirable, but with democratically elected councils and government rather than feudal overlords, of course.

2. Ultimately, nearly all services that the government provides are local services, with the exception of immigration control, diplomacy and defence. So instead of the national government collecting taxes on incomes and production and using this to pay for social engineering, local councils would collect tax, spend what they need to and pass up the rest to the national government.

3. Taxes on land values keep prices low and stable, so banks would only need to lend first-time buyers enough to cover the value of the bricks and mortar element, the resale value of the land value element being negligible.

4. You may notice that taxes on incomes and production do not appear in this system, quite simply because these are the worst taxes. It should be borne in mind that taxes on land values could never collect more then ten or fifteen per cent of GDP, as opposed to the forty-five per cent of GDP that is currently collected. This ten or fifteen per cent would be more than enough to cover the cost of the core functions of the state, with maybe enough left over to pay a modest Citizen's Pension to the elderly. If voters decide that they are happy to pay a low flat income tax of ten or twenty per cent to pay for some form of minimal-but-universal Citizen's Income and other forms of redistribution like vouchers for education or health, then so be it, I wouldn't actually be averse to this.

5. In theory, there would be little need for welfare in the long term, because with low or no taxes on incomes and production and no property/credit bubbles, the economy itself will develop in a much healthier and resilient way. There's only one way to find out, isn't there?

6. The best time to introduce such a system will be some time in the next few years when property prices, and hence land values, bottom out so the impact of the change on land values would be negligible. Realistically, there is no chance of it happening of course, because voters are still blinded with the Fool's Gold of the next house price bubble and most MPs own two homes.

Ah well, I can but try.

* People who claim that the underlying site-only unimproved value of any land that they owns (excluding bricks and mortar and improvements) is down to their own efforts - with the narrow exception of farmland, which is of such low value relative to urban land, that 95% of it would be exempt from LVT anyway - is seriously deluded. The fact that they might have paid an inflated price for this in the past in the expectation that the tax system would continue to justify the higher value is neither here nor there for these purposes.

The First Rule Of Warfare

As my theme for today is "half way lucid comments that I have left on other 'blogs", let me round off with my comment over at C-at-W regarding recent Russia/Georgia/South Ossetia unpleasantness*:

"... what the cold warriors forget (on the Russian side and in the West) is The First Rule of Warfare**, that has held pretty well for the last hundred years.

It's quite simple.

Millitarily, it is a piece of piss to invade another country, especially if you're big and they're small.***

Politically and economically, it is impossible to hold on to occupied territories in the long run. The cost of doing so - in money, in lives, in unhappy families of soldiers who've died, in the drain on the economy to support the military spending, the terrorist attacks that you provoke in your own country, the international opprobrium, the trade sanctions, the ignominy of the ultimate withdrawal - always exceeds any short term benefits.

So whatever Russia hoped to gain from smashing up Georgia (and I can sort of sympathise with them) will be outweighed by the long run costs of occupying Georgia. The same applies to the USA and Iraq, BTW. Or Israel and the West Bank. Etc etc.

So sooner or later they will withdraw. And every rouble they waste on that war is a rouble less they can spend on attacking us (in this case, attacking us by proxy via the Islamofascist bastards in Iran).

And they'll have learned their lesson ... for a decade or two before the next power mad shithead in the Kremlin (or in the White House - or the Knesset - or in Tehran or Pyongyang for that matter) - does it again."

* As you may have noticed, this is a topic that does not overly interest me. So far I have restricted myself to posting Denis Cooper's fine fisking of Dave The Chameleon's sub-GSCE drivel.

** I once expounded The First Rule Of Warfare to a history teacher chum and he hummed-and-hahed. A month later, he told me that he quoted this handy rule-of-thumb in his lessons.

*** UPDATE. Make that "Militarily, it is usually a piece of piss, especially if you're big and they're small, but even then, the large country can get its arse kicked e.g. Russia v Finland".

UPDATE, UPDATE. Having now taken the trouble to read up on The Winter War, I conclude that Russia got its arse severely kicked and failed miserably in its original objective, but managed to grab a small slice of S.E. Finland which is still controls to this day. This still fits the overall generalisation that 'invading other countries is a bad idea'.

Watching the EU unravel (1)

As is broadly agreed, even among its proponents, the EU is an empire, and as we well know from history, empires grow and grow until they seem all-powerful and then collapse* pretty quickly**. Something else that we learn from history is that things will not be 'different this time', nope, they will be the same. There are infinite strands to this, so it might be helpful to look at a number of areas in which the EU-project might start to become derailed, see posts (2) to (6) below. No doubt, when future historians write about the rise and fall of the EU, the reasons they give might be something else entirely - so if I've missed anything obvious, please leave a comment.

* If the converse were true, then all countries would have merged into empires, and all smaller empires would have merged into one large empire covering the whole world, which is clearly not the case.

** From Erich Honecker being chucked out to fall of Berlin Wall = one month; from fall of Berlin Wall to reunification of East and West Germany = eleven months; yada-yada; from German reunification to complete disintegration of Soviet Union = fourteen months. Notwithstanding that we have the Poles and Solidarity to thank for all this.

Watching the EU unravel (2)

It might be the Euro-zone, rather than the EU that unravels first. Just over half of EU members are in the Euro-zone. The frictions between the Germanic hard-currency bloc and the Club Med countries are well documented, and tensions between the two are developing nicely.

But within Club Med, there is a sub-set of countries whose economies have relied unduly on a boom in construction stoked by EU-subsidies* and low Euro-interest rates**, namely Ireland and Spain. An article in The Telegraph*** gives us a few clues...

"We're in a classic post-bubble recession, yet we can't do anything that a country would normally do in this situation because we're inside the eurozone,"

The Nordic rescue [of the early 1990s] is seen as a model of how to tackle a banking crisis. However, Sweden succeeded only after it left the ERM's fixed exchange system and regained control of its monetary instruments.

However, [Ireland] is the most exposed in the EU to both the dollar and sterling blocs, leaving it more vulnerable to trade and investment effects of the soaring euro. Prof Kelly said Ireland had lost 20pc competitiveness against its trade partners since the launch of EMU.

*As at 2003, €392 per capita in Ireland, €214 per capita in Spain, with Portugal and Greece somewhere in between.

** When these countries joined the Euro-zone, real interest rates became negative. It is also interesting to note that despite the number of dwellings in Ireland increasing from 1.3 to 1.8 million since 1996, and despite half-a-million residential properties being built every year in Spain for nearly a decade (in a country with a population two-thirds of that of the UK), property price rises have been highest in these two countries.

*** Via Tim W and HousePrice Crash

Watching the EU unravel (3)

The electorate appear to be a pretty gullible lot, but seeing as;

1. The EU and their acolytes have hitched themselves to the 'climate-change' bandwagon, which is rapidly being exposed as a Big Fat Lie*, and

2. The EU Parliament seriously want to engage in really unpopular bansturbation, such as banning patio heaters**, which might seem trivial, but in the popular imagination, what began as a protest against a tax on tea ended up with the American Declaration of Independence; who's to say the same might not happen again?

* In any event, are we supposed to believe that 'climate change', were it to exist, would affect Switzerland (being geograhically in the heart of Europe while remaining outside the EU) more than neighbouring countries? It's patent bollocks, surely?

** I could say the same for smoking in pubs, plastic bags or bottled water, but I'm not sure if this is NuLabour nonsense or EU nonsense, it's difficult to tell the difference any more.

Watching the EU unravel (4)

Or it might be the good old instinct for (national) self-preservation that does for the EU.

It is all too easy to write this off as racism or xenophobia, which are officially Bad Things, and yes, a lot of racists and xenophobes are against the EU for no other reason, but there is, or will be, a backlash against Islamists in The Netherlands or in Scandinavian countries; against Romanian Gypsies in Italy; against 'scum' in France; against African refugees in Spain*, and, once the Irish economy has hit the skids, against immigrants to Ireland generally; who knows**? Not to mention the long-standing tradition they have in Germany and France of burning down homes for asylum seekers - attacks of such murderous viciousness that they really put the insult 'Little Englander' into perspective.

But you can't insult all the people all the time and get away with it. If they constantly deride Perfectly Ordinary People, who are suspicious about the EU, as 'racists' even though they're not, and to stifle all debate about the EU with cries of "Xenophobe!" then sooner or later that'll put up the hackles of Perfectly Ordinary People who will start to wonder what else the EU might have been lying about for all these years...

* Of course, not all of this is directly EU-driven, but it links in with the whole politically correct Geneva Convention-ECHR-human rights bullshit that the EU are trying to force upon us.

** I think that allowing Turkey in is yet another step too far - and as long as the French are against it, it's unlikely to happen - but part of me wishes they'd do it, just to speed up the inevitable demise thereafter.

Watching the EU unravel (5)

The overall tenor of comments by the Lib Dem and Labour panellists on last week's Question Time was that 'MPs have to sign up to the Lisbon Treaty without a referendum because it's too complicated for the average voter to understand', while cheerfully admitting that they didn't understand it themselves*. Not that the Tories aren't total hypocrites in this regard, of course, with the notable exceptions of Bill Cash and John Redwood.

The original CON-stitution was rejected by the French lefties (for being too 'free market') and by the more free-market Dutch (presumably for being too Statist). Our next best hope is that the Irish, having rejected the Nice Treaty in 2002 and having filled their boots with EU subsidies over the past three decades**, now reject the Lisbon Treaty out of naked self-interest, despite the EU Parliament having decided to ignore the result anyway.

Don't forget that people don't like signing up to stuff that they don't understand, let alone allowing others to do it on their behalf. If you rent a house, or take on a new job, you don't know whether your new landlord or new employer will be a decent sort or a complete shit; similarly, a landlord or employer can't know whether a new tenant will pay the rent on time and leave the property in good condition, or whether a new employee will do what he's paid for or be a lazy scoundrel, but at least the battle-lines are clear. Who in their right mind would allow somebody else to sign you up for something far more fundamental than either? Where it's not clear what the point is or even where the battle-lines are?

* I in turn cheerfully admit that I am an average voter and I don't understand it either, and as I can't be bothered to spend months reading it and understanding the full enormity, I'd rather we didn't sign up, if that's all the same, thanks!

** €55 billion net subsidies since 1973 divided by population 4 million = €13,750 each, or over £10,000 each in old money.

Watching the EU unravel (6)

... or finally, there's my old favourite Value Added Tax, the worst tax of all*.

Hopefully one day VAT-registered traders will wake up to the fact that this increases their marginal rate of corporation tax or income tax from 30% or 41% to something approaching 100% or more. I am finding it a hard struggle to explain to them that they do not just pay 17.5% on their gross mark-up, they pay 17.5% on their entire turnover (once you add net VAT liability and input VAT together) but hey ...

Even if VAT-registered traders fall for The Big Lie that 'VAT is borne by the customer', then hey, aren't we all consumers? Our tax burden is quite enough thank you, without fining us another 17.5% when we actually go out and spend what little we have left!

* With Employer's National Insurance running a close second.