The Three Horsemen Of The Apocalypse

1/4 - must try harder

More blah-waffle on the BBC about this whole National Insurance hike-versus-spending cuts debate:

"You cannot effectively get £27bn of savings in one year(1)... without laying thousands of people off (2) and without causing losses of business (3) and loss of jobs(4)," [Gordon Brown] said.

Well duh.

1) Yes you can. BIS £22 billion, DFID £9 billion, DCMS £5 billion, DEFRA £5 billion plus DECC £3 billion. Hey, that's twice as much as £27 billion. Stick on £18 billion for EU costs (according to Dick P, I thought it was 'only' £16 billion), and that's nearly three times as much as £27 billion.

2) That's what 'savings' means, to 'save' (i.e. 'not waste') £27 billion, you'd need to scrap up to half a million non-jobs. We're not talking about saving money on paper clips, we're talking about not doing things that destroy value. 'Thousands' is a funny euphemism for 'half a million' but not technically wrong, I suppose.

3) Ho-hum. They take taxes off the productive economy to be able to 'support business'? How does that work?

4) We covered that in point (1), there are no extra marks for repetition. Further, what he means is 'loss of non-jobs', not 'loss of jobs' generally. As a rule of thumb, raising the taxes to pay for a non-job in public sector destroys about 1.5 jobs in the private sector, and many non-job destroy another half a proper job via form filling and regulation, so there's no reason to assume that overall employment levels would go down if all the non-jobs were scrapped.

Diplomatic Coup Of The Week

From The FT:

Downing Street rejoiced at what it portrayed as a diplomatic coup for Mr Brown. "Gordon has spent years building up political capital..." said one aide.

OK. Guess what the coup was. Was it

a) A guarantee of support from the USA in any possible unpleasantness with Argentine;

b) The release of Aung San Suu Kyi from house arrest and the announcement of free and fair elections in Burma;

c) Iceland's solemn undertaking to refund UK taxpayers for the billions it cost them to bail out reckless depositors; or

d) "... a last-minute reprieve from contentious new European regulations... after Gordon Brown pleaded that the issue be shelved until after the election. The personal intervention by the prime minister staved off certain defeat for the UK at a finance ministers' meeting in Brussels, where France leads a powerful coalition that is calling for tough regulation of the sector."

Make of that what you will. I shall be spending the rest of the day in sunny Milton Keynes.

Nick Clegg: Twat

From Tuesday's PMQ's (Col. 165 to 166):

Mr. Nick Clegg: ... Last weekend, the Prime Minister said that he was all in favour of aspiration. Could he explain to us exactly what is aspirational about a tax system that he has created in which the poorest 20 per cent. pay more from their income in tax than the richest 20 per cent?

The Prime Minister: It was because of all these things that we introduced the tax credit system, which is the means by which we take people out of poverty. We reward work for people who are in work, and for people who pay income tax it removes their liability by giving them tax credits instead. It is the means by which we bring greater justice, take people out of poverty and make work pay, and I hope that the right hon. Gentleman will continue to support the tax credit system, which is an essential part of our tax and benefits system in this country.

OK, I sat there with bated breath waiting for Clegg to point out that he was referring to the ludicrously high effective marginal tax rates faced by lower earners, especially those entitled to benefits, rather than the absolute tax burden on lower earners (or even the tax rate in isolation). The worst type of benefit is Tax Credits, which are withdrawn at 39p for every £1 earned gross, as well as 31% income tax/NIC, so the effective tax rate is 70%.

He could have pointed out that at annual earnings of £10,000 or £11,000, a single adult has about £20 a week in income tax/NIC deducted from his salary and then has to fill in a myriad forms to reclaim £20 in Tax Credits, thus seguing into the Lib Dems' sensible policy of upping the tax-free personal allowance to £10,000 (which has long been UKIP policy, of course).

Nope.

Clegg really did just mean the tax rate, as his follow-up question makes clear, i.e. he completely misses the point and a golden opportunity to hint that he might know what he is talking about:

Mr. Clegg: The Prime Minister talks about justice. He has not delivered justice or fairness in the tax system. He is the one who scrapped the 10p tax rate. It is his rules that allow a City banker to pay less tax on capital gains than a cleaner pays on wages. He is about to hit millions of average earners with higher national insurance bills. Where is the fairness, where is the aspiration, in any of that?

Badly chosen metaphor of the day

From The Evening Standard:

Gordon Brown: I will keep alive the flame of Copenhagen

What a colossal and utter twat. Copenhagen was all about extinguishing as many flames as possible, in a very literal sense.

Parody Singularity (9)

From The Evening Standard:

Gordon Brown launched a blistering new assault on excessive pay today with plans to “name and shame” bodies that waste public funds...

Gordon Brown's telephone call ...

From The Telegraph:

The Prime Minister addressed the mother of 20 year-old Jamie Janes as "Mrs James" and left some words half-finished in his apparent haste.... Jacqui Janes accused Mr Brown of disrespecting the memory of her son. Mr Brown moved to limit the damage by telephoning Mrs Janes to assure her he meant no offence.

T'would have been amusing had he become totally befuddled by this stage and addressed her as Janie Jones.

"Prime Minister calls for attacks on financial transactions"

Well, that's what it sounded like.

Downfall - EU election edition

The Goblin King tries to change the topic

The top inanity from his otherwise cretinous speech - which took him and his little friends months to write - was this:

Some people have been asking why I haven't served my children up for spreads in the papers. And my answer is simple. My children aren't props; they're people.

I dunno. I can honestly say that I have never asked that question. I have often wondered why, for example, he didn't do the decent thing and just commit suicide; I have tried to work out whether he believes his own lies, but his kids or his fat ugly beard of a fishwife are really of no interest to me. If I had to guess an answer, I'd assume "because they're really ugly" more than anything.

Anyroad, I've set up a fun online poll in the sidebar to see what everybody else thinks.

"Treaty on hold until court rules"

Woo hoo!

Eat shit, Goblin King! Even it is only for a week.

A history lesson for the Sub-Prime Minister

The Goblin King tried to justify the 42-day detention idea in a speech to the IPPR as follows: "The modern security challenge is defined by new and unprecedented threats [such as] terrorism ..." (full transcript here).

Wot? "New"?

Has he never heard of Robert Catesby? The IRA? The Nail Bomber?

The summary on the IPPR website (see first link) is even more bizarre: "Gordon Brown has called for modern crime-fighting measures to be embraced and adapted to fit with the principles of individual freedom and liberty. Topics covered included the use of CCTV, DNA technology and the extension of pre-charge detention to 42 days."

Freedom and liberty? "Thought Police", more like.

"Let Britain’s housing bubble burst"

"... anybody who thinks it is a duty of the state to help keep housing expensive is crazy...".

Martin Wolf - you rock!

"UK commercial property values fall in March"

"British commercial property values fell 1.2 percent in March, taking the market's total loss since last summer's bull market peak to around 16 percent..."

Chuck in a bit of gearing, and share prices in UK property companies* are down by a third over the last year:
It's rather chortlesome, looking back at the crap they came out with when property companies were allowed to convert to REIT status**...

"Real estate investment trusts (REITs) which will enable small investors to put money in property without paying tax twice are on the way, Gordon Brown announced in his Budget speech. REITs will fill a big gap in the options open to small investors who do not want to risk their whole nest egg in one buy-to-let property, but for whom shares in property companies are highly taxed and subject to the often irrational booms and busts of the stock market".

Ah yes, better to lose a third of your money as a result of a perfectly rational collapse in commercial property prices, eh?

* The black line is Land Securities, the green line is FTSE Real Estate and Development.

** At the beginning of 2007.

"Brown seeks to calm housing fears"

"The sub-prime minister said a 2.5% fall in March, recorded by the Halifax, should be seen in the context of 10 years in which household debt had trebled from £500 billion to £1,421 billion"

"Buy-to-let properties to flood market as investors cash in"

The Goblin King & The Badger came up with this CGT wheeze last year to stave off the property price crash, but their Day Of Reckoning has now arrived. As widely predicted.

But who's going to lend people money to buy them? Not Northern Rock, First Direct, Lehman Brothers, London Scottish Bank or various other smaller building societies. And probably not Halifax/HBOS* either.

If anybody knows of any more lenders that have stopped lending, please leave a comment!

* Via Growler at HPC.

Total and utter f***ing shits of the day (2)

Every now and than, the Scottish Mafia running England give the game away*.

The Goblin King and some other taxpayer-funded total and utter f***ing shit called Stephen Carter, have devised a new ... strategy [which] follows warnings from Labour MPs that "Southern Discomfort" at the Government's performance could lose Labour the next election. Responding to the concerns, Mr Brown appealed to the self-interest of homeowners, small businesses and the aspirant working classes. He said: "I think the important thing is that over the last 10 years people in the South have seen their living standard rise substantially. They've seen their net wealth rise even faster than their incomes."

That's the key, isn't it? Generate an asset-price bubble (and corresponding credit-bubble; they are two sides of the same coin). Or how else does anybody explain a society who sees "their net wealth rise even faster than their incomes"? When that net wealth is just a number on a bit of paper? It's the net debts that aren't just numbers on bits of paper. That's real money that somebody wants paid back. Sure, many people have seen their living standards rise substantially. Only to see them fall again when the bailiffs come a-knockin'.

They have f***ed over the 'priced-out generation', lined their own nests by paying off the mortgages on their investment properties out of their Parliamentary allowances, brought the economy to the abyss, and they are now practically admitting it was all a three-card trick.

I mean, f*** it, I profited enormously from the house-price bubble, but I got out in time, so am largely protected from the ensuing crash. No doubt the Tories (who did the 'house price bubble" back in the late 1980s) won't be any better next time round, but at least that's what we expect from the Tories.

* See also here.

The Brown Bubble (2)

Our national debt is now twice as much as the Chancellor's 'sustainable' figure, according to the pretty reliable Institute for Fiscal Studies. I can't find the actual press release on their website yet, so we'll have to go with The Guardian's summary. I'm not even sure if this includes a provision of £20 billion-odd for potential losses on Northern Rock etc.

Hat-tip.

"Brown considers training payments"

As Tory spokesman, Chris Grayling MP (Con, Epsom & Ewell) points out ...

"Last month Gordon Brown wanted contracts and benefit cuts for those who refuse training. This month he says he wants contracts and benefit increases for those who accept training. Once again he's chasing headlines by latching on to a scheme in New York that has only just started, and no one yet knows if it works."

The main reasons* why our welfare system is so corrosive are:
a) It is far too complicated and overlaps with the tax system,
b) It encourages single-motherhood and long-term sickness (real or imagined),
c) It discriminates against couple families and discourages people from taking on short-term or low-paid jobs (like apprenticeships!) or staying in education,
d) It is a tad too generous to those right at the bottom (which is why there are over five million of them), and
e) The marginal withdrawal rate is so high, that a household with one earner on an average income is only a few quid a week better off than a workless household.

Now, how the f*** is overlayering all that with yet another no doubt savagely means-tested benefit going to help?

* All of which would be solved by replacing the whole thing with a Citizen's Income scheme, of course.

British jobs for British workers ...?

Yet again this, along with all the chat about 'sustainable growth' has been unveiled as complete tosh. The Telegraph reports that there are now 2 million foreign-born workers in the UK, but there are half a million fewer British-born people in work than six or seven years ago.

Which we have known for months, by the way, but it's good to see it on the front of the paper again; 'public sector jobs for foreign workers' is a bit closer to the mark.