"What if?"

Judge Napolitano was apparently fired from Fox News for explaining Indian Bicycle Marketing:

He asks: "What if the whole purpose of Democratic and Republican parties was not to expand voters' choices, but to limit them? What if the widely perceived differences between the parties was just an illusion?... What if those vaunted differences between Democrat and Republican were just minor disagreements?"

In case there's any wavering doubt, he then gives lots of good examples of US politicians saying one thing to get elected and then merrily continuing exactly the same policies as their predecessors once in government:Via Captain Ranty who got it from Fausty.

Have I got a caricature for you.

"Religious education in schools 'should not be a priority' say MPs"

From the BBC:

MPs have set up a new group to discourage the teaching of religious education to pupils in England. The all party parliamentary group on RE does not want the subject to be treated as a priority.

Last year 115 MPs signed a motion demanding a debate on excluding RE GCSE from the English Baccalaureate. A government spokesperson welcomed the new group but said "the English Baccalaureate will not force schools to offer RE GCSEs".

Stephen Lloyd MP who will chair the group said the group would provide a real insight into the questionable value of RE.

"In today's world, our children can be open to quite enough misleading information. I believe it is absolutely essential they are taught about real subjects by trained, experienced teachers, allowing children to make informed choices," he said.

Mr Lloyd, a Liberal Democrat, tabled last year's early day motion on RE after the government included it in the English Baccalaureate award to teenagers who get five good grades in key named GCSEs. The subjects in the award are English, maths, science, a modern foreign language and RE. Supporters of geography and history would like these subject to be offered as alternatives to RE.

The new group has the support of a number of atheist and secular groups and teaching associations. John Keast, chair of The Secular Council of England and Wales, said: "Recently the history and geography communities have felt under fire and this represents an important step to give their subjects a strong profile amongst parliamentarians. The coalition government is making policy decisions about academies, the national curriculum, qualifications and even teacher training provision. Directly or indirectly, all these will challenge how history and geography are taught to young people."

The spokeswoman at the Department for Education said: "RE remains a statutory part of the school curriculum for every student up to 18. It is rightly down to schools themselves to judge how it is taught. We have been clear that pupils should take the GCSEs that are right for them and that we look to teachers and parents to help pupils make the right choice."

Friday Night Gear Change

Number three on the list of Whitney Houston hits with truck driver's gear changes in them, see also I will always love you and I have nothing.

After a messy middle eight, the chorus which starts at 3 min 18 sec is a tone higher than at the start of the song:

It would have been far cheaper just to buy the heroin...

From The Daily Mail:

The West is losing the heroin war in Afghanistan – ten years after Tony Blair pledged that wiping out the drug was one of the main reasons for invading the country. Despite spending £18 billion (1) and a conflict which has so far cost the lives of almost 400 British troops, production of the class-A drug by Afghan farmers rose between 2001 and 2011 from just 185 tons to a staggering 5,800 tons... (2)

Some 15 per cent of Afghanistan’s Gross National Product now comes from drug-related exports – a business worth up to £1.6 billion each year, it was claimed.(3)

1) I can't be bothered looking up how much the USA has spent; the total is probably ten times that, call it £180 billion over ten years or something.

2) The apparent increase is misleading, all that happened is that production has gone back up to its pre-Taliban levels.

3) Wot? All that fuss, all those deaths, not to mention £18 billion quid a year down the toilet, just to get our hands on/prevent other people getting their hands on drugs which we could have bought for £1.6 billion a year (plus a bit more because increased demand increases the price, so what)? Whether we'd re-sell it (to put our domestic drug dealers out of business as well) or just chuck it in the Indian Ocean is a separate debate.

Furthermore, buying up the drugs would have been a splendid way of preventing the Taliban getting into power in the first place - it would have pitted the financial interests of yer average Afghan farmer against them, they'd have preferred to stick with the easy Western cash.

OECD, IMF on top form

From International Business Journal:

The Organization for Economic Co-operation and Development released a report on Tuesday calling on Germany to raise its property taxes dramatically and reduce taxes on labor. The group, whose membership is made up of 34 of the world's leading market economies, also made similar recommendations for Denmark, Norway and the UK over the past month.

For Germany, the organization recommended tripling its property taxes, while reducing its wage taxes and social security contributions, which currently make up 64 percent of total tax revenue, compared with the OECD average of 52 percent, according to the German language Immobilien Zeitung. Property taxes, meanwhile, amount to only 1 percent of total revenue collected, against an OECD average of 3 percent*. The group also called on Germany to reform its assessment mechanisms, as many properties are valued far below their true market worth...

The International Monetary Fund also made a similar recommendation to Norway this month...

The OECD has been a strong proponent recently of land value taxes, which date back to Adam Smith but were most vigorously promoted by 19th century economist Henry George. He promoted a land value tax—which is assessed on the unimproved value of underlying land, not penalizing intensive development like many property taxes today—as a replacement for all tariffs and levies, however the OECD has settled on a more moderate position, instead advocating a shift in emphasis away from other taxes and towards the land value tax.

Land value taxes can be tricky because of practical difficulties in estimating a plot's value, especially if it is a unique piece of land, or if land parcels like it do not change hands very often. Newer computer-assisted methods of land appraisal have made this job easier, though, and many countries around the world have adopted the tax.

The responses..?

The two groups' advice, however, was rebuffed by Norway's minister of finance, Sigbjorn Johnsen, who said at the press conference on Wednesday: "I have no plans to increase housing taxes."**

Denmark was subject to the same advice last month, with the Nordic Labour Journal reporting that the OECD advised the country to cut income taxes and increase property taxes. The Danish government plans to incorporate some of the OECD's recommendations into its 2012 tax reform, but a property tax hike will not be on the table. As the NLJ writes, "[t]his is because property taxes were ring-fenced in the coalition agreement covering this parliamentary term."

* In the UK, we have a quasi-Land Value Tax on commercial land and buildings (called 'Business Rates') which alone raises over 4% of total government revenues; we also have Council Tax on residential land and buildings, which is a mixture or Poll Tax and a modest property value tax, which raises another 3.5%.

** That'll be no surprise to Kj, I guess.

Health scare story du jour

From the BBC:

The speed someone walks may predict the likelihood of developing dementia later in life, according to researchers in the US. They also told a conference that grip strength in middle-age was linked to the chance of a stroke... The researchers said slower walking speeds were linked to a higher risk of dementia and stronger grip with a lower risk of stroke.

This all reminds me a bit of when telling somebody at school that if their hand won't cover the whole of their face, they'll get cancer.

The "decline" of British manufacturing

Jackart wrote a fine post recently debunking this myth, worth a read.

I was reminded of it when I was reading an article about measuring GDP and stumbled across the chart below, which sums it all up nicely. To wit, there hasn't been a decline in UK manufacturing (by value) at all (nobody disputes that manufacturing employment has fallen, sad, but a separate topic), it is merely that service output (by value) has increased faster than manufacturing output, so there was a relative decline but an absolute increase.

So to constantly bang on about "manufacturing declining as a share of GDP" is to miss the point. It's the same when people wail about hedge fund managers "paying less tax than their cleaners". Wrong! They pay a lower rate of tax than their cleaners but still pay far more in tax overall. Whether they 'should' pay a lower or higher rate of tax as their cleaners, or the same rate (my preferred option) is a different topic, but let's try and get facts and figures straight before we debate them*:* I might as well chuck in the point that a Land/Location Value Tax based on capital selling values would not fluctuate wildly even if capital selling prices fluctuated wildly, as it is only relative values (between different houses) which matter, absolute values are just the method for apportioning a fixed total bill. So if all house prices doubled (or they all halved) then the amount payable on any particular house would not change one penny. That's basic maths and is quite simply true, whether you agree with LVT or not.

Killer Arguments Against LVT, Not (195)

Pogo, in the comments to a recent post:

@Mark... Of course I don't think that council tax covers all council expenditure - I thought that it was about 25% not 10%. However, it's rationale is that it's "paying for services rendered"..

"The government and society in general provide services, landowners consume them."

Bollocks! People consume services. My garden, for instance, consumes nothing supplied by the council, neither does my house. The people living in it are the consumers. I fear that you let your, somewhat irrational fanaticism for LVT cloud your view of reality at times.

Perhaps I phrased that a bit clumsily, strictly speaking I should have said "The government and society in general rental values, landowners enjoy or collect them, and even they do neither, they deprive others of them."

1. I'm not irrational. It's the topsy turvy world of Home-Owner-Ism, where borrowing counts as saving and where income counts as expenditure, which is irrational. Or, as I'll illustrate, where customers demand services for free (or below cost) and where shareholders are forced to pay. I know simple analogies are usually wasted on the Homeys, but here we go...

2. A quoted plc sell goods and services to its customers; it makes a profit on that activity and then distributes the profits as dividends to its shareholders. Those dividends which the shareholders receive are not in exchange for "providing a service", they are a one-sided payment in exchange for nothing apart from the shareholder being a shareholder.

3. Each company does what it does best, making shoes, printing newspapers, developing new medicines, whatever; it tries to maximise its profits, and the more it does so, the wealthier are its shareholders. The shareholders want the company to sell its goods and services for their profit maximising price and want to receive the maximum in dividends.

4. Now, let's apply the same logic by treating a "state" as a quoted plc. There is only one thing that "states" do particularly well, that is to have armies, police forces, land registries and a legal system, in other words, to monopolise force. They are rubbish at most other things. That's all "a state" needs to do.

5. A "state" is a semi-voluntary kind of corporation; everybody who lives in the land area controlled by that state is a part-owner or shareholder, the only way to opt out is to emigrate, but let's gloss over that. So every citizen owns a share in "the state" where he lives and for which he has a passport etc.

6. Now, having an army and a police force costs money, but what sort of revenues do "states" or the existence thereof generate? Land rents of course! If there is complete anarchy, there are no land rents whatsoever; by having law and order, rental values rise and rental values can be collected - question is, by whom? Is there any reason why "the state", on behalf of its shareholders/citizens shouldn't charge market value for generating those rents, rather than providing those services free to the land owners and allowing the land owners to collect them; and then forcing the shareholders to pay for the running costs?

7. We see with a quoted plc that the customers are expected to pay for what they get (shoes, newspapers, medicines) and then the shareholders receive dividends. In my view, exactly the same principle should apply to "the state". Think about it, if you want to become an owner-occupier or landlord in a civilised country, you hand over cash, fill in some forms and hey presto, you're away. Now try becoming a landlord in a failed state like Afghanistan or Somalia, you just can't do it. Without a well functioning state, there is no land ownership.

8. So our "state" provides one main service, which is generating land rents (defence and law and order are subsidiary to that); and it ought to charge the profit maximising price (close to 100% of land rents, i.e. Land Value Tax) for that service. It spends what it needs to spend on the core functions (defence, law and order, land registry), and then it dishes out the (huge) surplus as dividends (or a "Citizen's Dividend").

9. For sure, there are things like public goods like roads or education which are not strictly speaking in the remit of "the state", but if it can spend £1 and boost rental values by £2, it is money well spent. So some of the money available for dividends is reinvested rather than being paid out. A landlord would still be a landlord if the walls are getting a bit grubby and the carpets are fading, he doesn't pay for redecoration and new carpets out of the goodness of his heart or for the benefit of his tenants, he does it because every £1 spent on redecoration or new carpets boosts his rental income by £2.

10. When the state pays for roads or education, it is not providing services to its shareholders, it is either paying dividends or investing for the benefit of landowners. The services, or the value thereof, accrue to its ultimate customers, the land owners. There is no earthly reason why people should pay to attend a school, seeing as they are already being deprived of the cash alternative (vouchers for schools) or to pay toll charges to use public roads (fuel duty is a rationing measure only because we don't have nearly enough roads to meet what demand would be if petrol were cheaper).

11. So for land owners to wail that citizens should be forced to pay for the cash cost of services provided (via, basically, a Poll Tax or income tax) in order that the land owners can bank the value of the services they receive for a lower price (or preferably free) is, to quote Pogo, "irrational". That's a bit like BMW customers saying that they should be given the cars for free and that BMW's shareholders should pay BMW for the privilege of being shareholders.

Awesome Whitney Houston tribute

From The Telegraph:

A British Whitney Houston fan, Anne Lomax, accidently set fire to her Manchester house during a candle-lit vigil for the star who died at the weekend...