Faux Lib bullshit of the week

From The Daily Mail:

Senator Bernie Sanders' 'Medicare for all' plan would increase government health care spending by $32.6 trillion over 10 years, according university study.

The latest plan from the Vermont independent would require historic tax increases as government replaces what employers and consumers now pay for health care, according to the analysis being released Monday by the Mercatus Center at George Mason University in Virginia. It would deliver significant savings on administration and drug costs, but increased demand for care would drive up spending, the analysis found...

Responding to the study, Sanders took aim at the Mercatus Center, which receives funding from the conservative Koch brothers. Koch Industries CEO Charles Koch is on the center's board.

OK, divide $32.6 by ten years, and then by 325 million US population = $10,000 a year per person. This would - by implication - be on top of what the US government already spends on healthcare and healthcare industry subsidies, $1.5 trillion a year = $5,000 per person.

Let's give Sanders the benefit of the doubt and assume that people would no longer have to pay for private health insurance, $2 trillion a year = $6,000 per person.

So according to the Faux Libs, the average healthcare spending per person would be $15,000 a year.

By comparison, average healthcare spending per person in Western European countries is about €4,000 a year, at least 80% of which is funded out of general taxation or "income based compulsory contributions" i.e. hypothecated taxes.

So either American doctors, pharma companies and insurers are allowed to earn ridiculous profit margins (and they do - an outrage in itself) or that report is total and utter hogwash. Or some combination of the two. And clearly, the American healthcare 'industry' is a damn' sight smarter than the poor American mugs paying for it.

Nobody move or your genitals get hurt!

George Osborne's Evening Standard has really jumped the shark this time:

Infectious diseases such as super-gonorrhoea could spread more rapidly if the UK leaves the European Union, health chiefs have warned.

Britain is said to be under “significant threat” from such diseases after Brexit if the government doesn’t work out a way of maintaining a close working relationship with European health bodies...

“It is in everyone’s interest to maximise cooperation. Diseases do not recognise borders."

Quite. I don't think they recognise EU borders either.

"Opel-Vauxhall reports first profit in almost two decades"

From The Independent:

Opel-Vauxhall has registered its first profit in almost two decades under the new ownership of France’s PSA Group, the maker of Peugeot.

Opel-Vauxhall made €502m (£447m) operating profit in the six months of the year on revenues of €10bn, the first time the company has been in the black since 1999. The numbers mark a turnaround from a €257m loss in 2016, the last full year when the company was under General Motors’ ownership.

Most things in economics follow some sort of pattern, but it baffles me why its parent company General Motors would keep going through thick and thin for nearly twenty years.

Maybe the costs of shutting everything down would have cost more in the short term than just running up another year's loss, in the vague (but folorn) hope that things would turn around in a year or two, throwing good money after bad.

Or maybe GM were not doing the transfer pricing properly and over-booking profits in the USA and understating them in Europe? But it's not as if GM globally was overly profitable either, from Wiki:

In May 2013 during a commencement speech, CEO Dan Akerson suggested that GM was on the cusp of rejoining the S&P 500 index. GM was removed from the index as it approached bankruptcy in 2009.

Which is all a word of warning for anybody who dreams of going into car manufacturing, you need real staying power and the ability soak up decades of losses while you make the leap to mass manufacturing and economies of scale. It's not like in the first half of the 20th century when there were dozens of small carmakers in every country, each grinding out a few hundred cars a year, they have all merged, been taken over or simply disappeared.

(Exactly the same thing happened with aircraft manufacturers (there were still 27 aircraft manufacturers in the UK in 1945), and the same thing has happened with internet/software businesses, only much more quickly.)

The Hunt for Crimson Tide - alternative ending

After heated discussion, the Captain of the submarine decides to launch the nuclear missiles. Yellow lights flashing, ominous buzzer repeating etc.

Screen prompt: Please enter launch code to continue

Captain reads launch code from slip he retrieved from the safe and diligently keys in: 0101WFRWS

Captain pauses, crosses himself and hits 'Enter'.

Yellow lights continue flashing

Screen prompt: Incorrect launch code. Please enter launch code to continue.

Junior Officer #1, nervously: Permission to speak, sir?

Captain: Granted.

Junior Office #1: I think that those are capital letter "i's" rather than digit "ones", and if you look closely, the second "O" is rounder than the first one, so I think it might be a capital "O" rather than a zero.

Captain, keying more carefully: 0IOIWFRWS

Captain looks carefully at the screen, holds up the slip of paper for a last check, hits 'Enter' again.

Yellow lights continue flashing.

Screen prompt: Incorrect launch code. Please enter launch code to continue.

Junior Officer #2: Permission to speak, sir?

Captain: Yes, what is it?

Junior Officer #2: I don't think those are ones or capital "i's". They look to me like lower case "L's". And if you look closely at the "S" at the end, it could well be the digit five, it's a bit smudged.

Captain: Why the fuck did they print the launch code in san-bloody-seriff? Don't answer that!

Captain, turning to Junior Officer #1: Go on, what do you think? Digit "one", capital "i" or lower case "L"? And is that a capital "S" or the digit "five"?

After several minutes of earnest discussion, the Captain keys in very slowly, repeating each key stoke out loud: 0-l-O-l-W-F-R-W-S.

Captain compares the screen with the slip of paper for several minutes, finally closing his eyes and hitting enter, while muttering "Boom!" under his breath.

Yellow lights continue flashing.

Screen prompt: Incorrect launch code. For security reasons, your account is now locked. Please wait 24 hours before re-entering launch code or contact your software administrator.

Junior Officer #1 to Junior Officer #2, under his breath: I told them we should have stuck with Android.

Junior Officer #2: Yup. Fucking Apple! Jeez...
-------------
Cut to US and Russian Presidents, standing beaming on the steps of the UN building, shaking hands and taking credit for having averting Armageddon.

Where has all the QE gone, long time passing...

Well, here, obviously.

Sadiq Khan has no sense of irony.

From London.gov.uk:

Let’s cut road deaths in London to zero

Each year more than 2,000 people are killed or seriously injured on London’s streets, taking a devastating toll on the people involved, their families and communities across the capital.

Yes, Sadiq Khan will be remembered as the London Mayor who allowed the murder rate to soar, glad he's finally decided to do something about it.

The Mayor of London, Sadiq Khan, believes no death or serious injury on London’s roads should be treated as acceptable or inevitable. So he’s committed London to a bold target to eliminate all deaths and serious injuries from our road network.

Here are five ways we’re looking to achieve this:

Lower speed limits on TfL’s road network...
Transforming dangerous junctions...
Tough safety standards for the design of HGVs...
A world-leading Bus Safety Standard...
Safer streets for walking...

Ah right, he's not going to do anything about actual murders (about 150 a year); he's just going to make life even more difficult for motorists (most of whom don't need to drive into London anyway, to be fair) in order to reduce deaths in traffic accidents (about 80 a year).

On government "intervention" in the land market.

Lola's comment on Yesterday's post is worth a post in its own right:

I am not entirely sure that government actions like Schedule A taxation and council house buildings are 'interventions' as such.

The formation of the nation state comes about over time where a group of people evolve agreed values within a territorial boundary. By being finite those boundaries mean that land within them is limited. And the value of that land relates entirely to the work of all those citizens with those shared values.

Yes yes I know I know that history is a story of various warlords accreting ever larger territories, but without the help of the people they could not do that and make a success of it. So if we take the libertarian homesteading view what the nation state is is an assembly of lots of those homesteads with shared values.

This circumstance leads automatically onto the need for the two key functions of the 'state' - defence (of the Realm) and a system of justice (to keep one citizen safe from the predations of another). Both of these functions are essentially the defence of property rights, national and individual.

So what is the least worst way that these necessary two state functions can be funded. What tax regime works best?

Well, it is obvious that this is some form of land tax.

As this is a location tax it to a degree automatically taxes highest those who occupy the most desirable locations within the nation state it follows it must be a progressive tax.

Next since the land in this nation state is a de facto monopoly of the state - the ultimate owner of that monopoly being the citizens - how can it be acceptable that a few citizens are enabled to enjoy more benefits from the land monopoly than others?

If you take away the location premium then house builders (I am ignoring commercial buildings pro tem) will have to compete on the qualitative standards of what they build when they compete in similar locations. That might mean that the standard setting and price control function of council housing is not required - as it has been to provide competition for tenants and drive up standards.

These are not 'interventions' as such. Just logical responses to a requirement to fund the protection of property rights.

Of course, all this presupposes that the nation state - if it has a monopoly of money (which I would not support) - makes sure that sound money is available to the citizen. And that it does not engage in various subsidy programs to special interest groups where these subsidies always end up in rents, aka land prices.

Therefore these (non) interventions (LVT) lead to less interventions overall.

Oh the irony...

AFrom here: IEA launches Breakthrough Prize – £50,000 for your 2,000 word idea to solve UK’s housing crisis:

Richard Koch – the benefactor and supporter of the Prize – is a British author, speaker, investor, and a former management consultant and entrepreneur. He has written over twenty books on business and ideas, including The 80/20 Principle, about how to apply the Pareto principle in management and life.

The Pareto Principle is handy shorthand for many things, but let's not forget that it is based on the fact that "Essentially, Pareto showed that approximately 80% of the land in Italy was owned by 20% of the population."

Apart from that bit of irony, the whole thing is a travesty, it's like asking Houdini to get out of a strait jacket... without moving. Every premise is false, every statement a platitude and the questions are all (mis)leading questions:

Competitors will be asked to propose a single policy initiative which would:
• Increase the number of houses built so as to markedly reduce the housing shortage in this country (this can be reduced through increased rental or ownership).
• Increase the number and proportion of property owners in the UK.

i. There isn't a housing shortage in absolute terms, as a nation we've got 25 million spare bedrooms. Or as Blissex pointed out on an earlier thread: there's plenty of housing but the jobs are in the wrong places.

ii. Home builders have a profit maximising level of output, which is broadly speaking one new home for every two additional people in the UK. Unsurprisingly, and being fair to the construction industry, they have been building this many on average, even over the last ten or twenty years.

Why on earth do people who claim to understand free markets and capitalism think that "a single policy initiative" will encourage them to build more than this, thus depressing their own profits? (You aren't allowed to mention LVT, of course, but even that would not particularly increase overall construction rates).

iii. As to the second bullet point, private landlords acquired more homes over the last twenty years than were built. It requires government intervention, like restricting interest relief of charging landlords 3% extra SDLT to reverse this trend. (But you aren't allowed to recommend any sort of government action, oh no, that's not "market based").

Jacob Rees-Mogg said:

“Building more houses and supporting home ownership are the two great challenges for Conservatives. A property-owning democracy provides one of the most stable and prosperous forms of society. Its erosion denies people their reasonable life’s ambition."

Sure, until the 1970s, Conservative and Labour governments alike increased owner-occupation rates. They allowed lots of new homes to be built and discouraged landlords from snapping them up (rent controls and punitive taxation of rental income). Labour tended more towards building social housing, which kept a lid on private sector rents, but there was an overall consensus.

That social-democratic principle was gradually binned in in the 1980s and 1990s and now we have full-on Home-Owner-Ism - the aims of which are ever more expensive housing owned by fewer and fewer people. In other words, shifting back to the concentration/inequality which Pareto observed.

Mark Littlewood, Director General at the Institute of Economic Affairs said:

“Market-based policies have the power to dramatically change the economy and society for the greater good... it is time politicians looked beyond Brexit, to the pressing domestic issues of our time – arguably the most pressing of which is the cost of housing.”

T'was only government intervention and regulation which kept prices low until the late 1990s (s21 HA 1988 was changed in 1996-97 to allow no fault evictions, which threw the match on the bonfire which they had been building since abolition of Schedule A taxation of imputed rents on owner-occupied housing in 1963). "Market-based policies" had little to do with it.

Richard Koch said:

“In the twentieth century, home ownership went from one in ten Britons to seven in ten – a terrific achievement in extending a real property-owning democracy. And in the 1980s, Mrs Thatcher enabled millions of people whose families had never owned a home before to get on the property ladder. Today that’s just not possible.

Sure, home ownership increased rapidly, what these "free market" wankers never mention is the obvious corollary, that private landlords were nearly wiped out. That was the key to all this; eliminate the landlords and owner-occupation increases automatically.

And Thatcher could only "enable millions" to become owner-occupiers by flogging off the nicest third of social housing to higher earning tenants at big discounts. I fail to see how one government giving away assets accumulated by previous governments is a "market-based policy". This couldn't have happened if those previous governments had not adopted the distinctly "non-market based policy" of building all that social housing in the first place.

Meaningless Statistic Of The Day

From an article by a Faux Lib cheerleader in City AM, in short, everything would be fine if it weren't for those pesky councils!*

This a problem that has been decades in the making, largely thanks to our draconian planning laws. The passage of the Town and Country Planning Act in 1947 and the creation of the green belt has slowed the pace of housing development, and resulted in houses being built in the wrong places.

As an example, it is remarkable to me that between 2008 and 2013 twice as many houses were built in the towns of South Yorkshire, where prices were lower in 2014 than they were in 2004, than in Oxford and Cambridge, where property prices almost doubled over the same period.

Population of South Yorkshire, 1.4 million.

It's not clear whether means Oxford/Cambridge *city* or the larger *metropolitan areas* so let's give him the benefit of the doubt:

Population of Cambridge metropolitan area, 280,000.
Population of Oxford metropolitan area, 244,000

It's hardly surprising that more homes were built in South Yorkshire than in the other two towns, there is three times the population to start with. If it was only twice as many new homes, then per capita, more were being built in Oxford and Cambridge.

* NIMBYism and land banking don't exist on Planet Faux Lib. Neither does the acceptance that in pure numbers terms, new supply is more than keeping up with population growth; or that home builders have a profit maximising level and nothing on earth will make them build more. And even if they did, it would not have any marked downward effect on selling prices.

The Irish border - tail wagging the dog.

Far too much attention has been paid to this issue, for example from The Sun:

The issue of the border between Northern Ireland and the Republic has been a stumbling block to Brexit talks

The whole thing is nuts. The underlying logic is that any country with a land border with an EU Member State must also be or become an EU Member State to avoid the 'hard border' issue.

I don't see why the Irish-Irish border is of any more significance that the Swedish-Norwegian border, or the German-, Austrian-, Italian- and French-Swiss borders.

Put it another way, just imagine The Republic of Ireland had only recently become an EU Member State and the UK never had been - whose problem is it to sort it out?