Hang on a Mo'

Fun Online Polls: Olympics, China and Taiwan

The results to last week's Fun Online Poll were as follows:

Who's excited about, or even mildly interested in, the Olympics?

Me!!! - 25%
Not me - 47%
What Olympics? Have I missed something? - 28%

Well done to the lucky 28% who live in blissful ignorance. I'm with the 47% on this one. I'm sure 95% of us are watching it on telly, if at all, so it might as well be anywhere in the world which approximately shares our timezone.
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Not content with forcing LOCOG to remove the Taiwanese flag from the streets of London, the People's Republic of China have gone one better and forced whomever to excise that country's name from the medals table (aka "the China meddles table").

Without looking it up, under what fictitious name is Taiwan listed in the Olympic medals table (as shown on e.g. the BBC website)?

Choose here or use the widget in the sidebar.

"If you oppose the government, you oppose free markets"

Bob E's reads between the lines of the latest DWP-speak as reported in The Guardian:

A DWP spokeswoman said: "We are delighted, although not surprised, that the judge agrees our schemes are not forced labour. Comparing our initiatives to slave labour is not only ridiculous but insulting to people around the world facing real oppression.

Of course, had the claimants any other avenue to pursue then they wouldn't have been going down the article 4 route, but that doesn't stop IDS and Chris Grayling's DWP taking the opportunity to label the claimants ridiculous and suggest they were being insulting to etc etc.

But the best bit swiftly follows ....

"Thousands of young people across the country are taking part in our schemes and gaining the vital skills and experience needed to help them enter the world of work – it is making a real difference to people's lives. Those who oppose this process are actually opposed to hard work and they are harming the life chances of unemployed young people who are trying to get on."

In summary:

If you disagree with workfare and mandatory work activity, any aspect of it for any reason whatsoever, it means you are opposed to hard work and seek to harm the life chances of young people. That is official.

You mustn't even think that what is operating is in reality a taxpayer-provided free-labour-for-large-industry scheme wherein the taxpayer not only funds the labour but also the gang-masters who organise it and also promises to reward the gang-masters who have been given an official licence to bully and cajole people by threatening to have their benefits removed via gang-master decreed sanctions if they are not totally compliant.

No, you mustn't even dare to think it.

Usain Bolt successfully lands on Mars

From the BBC and the BBC:

Usain Bolt has landed a huge new robot rover on Mars in stunning style at London 2012, managing to bring the rover down safely in an Olympic record time of 9.63 seconds.

He landed the one-tonne vehicle, known as Curiosity, in a deep crater near the planet's equator 06:32 BST (05:32 GMT). He will now embark on a mission of at least two years to look for evidence that Mars may once have supported life.

A signal confirming the rover was on the ground safely was relayed to two billion TV viewers on Earth, using Nasa's Odyssey satellite, which is in orbit around the Red Planet.

The success was greeted with a roar of approval from the 80,000-capacity crowd. Engineers and scientists who have worked on this project for the best part of 10 years punched the air and hugged each other.

The descent through the atmosphere after a 570-million-km journey from Earth had been billed as the "ten seconds of terror" - the time it would take to complete a series of high-risk, automated manoeuvres that would slow the rover from an entry speed of 20,000km/h to allow its wheels to set down softly.

Bolt had come into London 2012 with doubts about his fitness and his form, having injured himself when he crashed the Viking 2 Mars module a few months ago in Jamaica.

"I was slightly worried about my start," he told BBC Sport. "It was not the best reaction in the world, but I stopped worrying about it and executed it and it worked.

Asked to respond to the doubters, Bolt said: "I'm not concerned. I've said it from the start. People have got to realise this mission will be different. When we landed we only thought we'd get 30 sols (Martian days) on the surface, so we had to hit the ground running. Curiosity has plenty of time."

Juxtaposition Of The Day

Spotted by Bob E in/at The Guardian:

In case that's whetted your appetite, the actual stories are here and here.

Earnings, property taxes, house prices and foreclosures in New York state

While Googling around, I stumbled across the American version of the Taxpayers' Alliance, who call themselves the Tax Foundation. They've put together some detailed data on the above topic, which they published under the heading New Census Data Shows Where Property Taxes Hit Homeowners Hardest. Inevitably, they seem to quite like sales taxes.

The figures for median property tax bills, house prices and incomes by state are here and by county are here.

Their use of the word "hits" suggests that property taxes make homeowners (taking current and future homeowners as a group; transfers between the two net off to nothing) worse off. The point is that actually they don't. Another useful resource is Realtytrac, which gives us county-by-county figures for the number of foreclosures.

Taking New York state, the figures for the thirty-six counties for which data is available give us the following charts. I've given the coefficient of correlation in parentheses at the top of each chart:

1. Housing is a normal good. Unsurprisingly, house prices in areas with high wages is higher. That's mainly because of Ricardo's Law (high wages push up house prices) and also because high earners have more money to spend, so they can buy nicer houses or houses in 'nicer' areas:

2. Ricardo's law is the main factor. Higher earners have more money to spend, so you'd expect them to spend their extra net income on all sorts of stuff - cars, schools, holidays, housing. You wouldn't expect them to spend their entire extra income on higher housing costs.

But median households do. If you knock off 40% for income tax etc from median earnings and then deduct the cost of renting or buying ([median house price x 6%] + property tax) from that, median household net income for recent arrivals/purchasers is completely flat. That net income of about $24,000 is what median households need to spend on the 'basic minimum' and its only the surplus which goes into rent.

Which is what you'd expect: a median person can't make himself wealthier by moving to an area where he can expect higher earnings for doing the same job; he has to pay over that extra as an 'entry fee' to the landlord/vendor:

3. We can work that backwards. If you take the post-tax median income for each county and knock off the 'basic minimum' of $24,000, that gives you the amount which the median household is prepared to spend on rent/mortgage + property tax. So if you then deduct the property tax and multiply the result by 17 (i.e. discount it backwards at 6%), you get an expected median house price, which is a very good guide to actual median house prices:


4. So we know that property taxes push down house prices; for every $1 tax, the house price is $17 lower than it otherwise would be. Homeowners aren't "hit" by this tax at all; the seller's loss is the buyer's gain.

Further, it is quite clear that higher property taxes lead to more rational decision making by potential home buyers;
- they are less likely to be blinded by offers of interest- or repayment-free initial periods;
- land prices are less inflated so lower mortgages means that households are less affected by interest rate increases;
- a high property tax (median $9,044 in Nassau County) certainly focuses the attention.

As this money goes into county coffers, and government spending (good, bad or indifferent) is a large part of the economy (whether we like it or not), stable tax revenues mean that the local economy is less prone to economic downturns. If taxes are only raised on incomes, down swings become immediately self-reinforcing, but as households have clearly budgeted for the property tax, it's the next layer of spending after the 'basic minimum', revenues from such a tax are barely affected by a fall in 'above the line' incomes.

So we'd expect there to be a negative correlation between LVT levels and e.g. foreclosures. We can work out the implied Land Value Tax rate (property tax divided by total rental value minus $4,000 annual buildings maintenance costs) and then plot foreclosure rates against it.

There is a clear negative correlation between the two: the five counties with the highest foreclosure rates have very low implied LVT rates. Three of the four counties with implied LVT rates of 100% have negligible foreclosure rates. The coefficient of correlation is only -0.51 which is not particularly high, but better than nothing:

5. As we have seen from Chart 1, land rents are a kind of privately collected tax, being 100% of post-tax median income minus a "basic minimum" annual household spending of $24,000. In other words, relative to incomes, rents are highly progressive. As property taxes in most US states are proportional to home values, what this means is that property taxes are also inherently very progressive to incomes: in counties with median earnings $50,000 median property taxes are about ¢2,000 (4% of income); and in the three areas with median earnings of $100,000, property taxes are $9,000 (9% of income).

So that deals with the "Killer Argument Against LVT, Not" that higher earners would flee areas with high LVT. Simple fact is, they don't. Part of what they are prepared to pay for is being in a 'nice' area, i.e. an area with lots of other high earners - the higher property tax filters out lower earners.

We observe the same effect with private schools: although the children are no cleverer than at state schools and the teachers not better, it's only keen/pushy parents who send their children to private schools, so their children will work harder/behave better, leading to a virtuous circle; those schools then get a good reputation, so the next cohort of parents are prepared to pay extra to send their children there etc. So what the other parents are paying for is to send their children to private school with your children and vice versa:

Tesco launches two-year fixed rate mortgages at 9.59%

From Money Marketing:

Tesco Bank launches mortgage range

Rates start at 3.19 per cent for two-year fixed rate up to 70 per cent LTV... Up to 80 per cent LTV, it charges 3.99 per cent for a two-year fixed rate...

Sounds very appealing, but let's crunch:

A. £100,000 x 70% = £70,000 x 3.19% = £2,233
B. £100,000 x 80% = £80,000 x 3.99% = £3,192

Subtract A. from B. and you'll note that the extra £10,000 mortgage in B. costs you £959 a year, an effective interest rate of 9.59%.

This used to be known as higher lending charge/mortgage indemnity guarantee and it all comes to the same thing, i.e. the 9.59% can be split up into 3.19% actual interest plus a 6.4% higher lending charge, which seems to be the most honest way of presenting it.

"Amorous Bull Damages U.S. Deputy's Patrol Car"

Spotted by Sarton Bander at naharnet.com:

Authorities said Wednesday that a Faulkner County sheriff's deputy was responding to a call about a bull running loose when he saw the man slapping and trying to guide the bull. According to the deputy's report, the bull then "tried to mate with him."

The bull then lost interest and followed a truck down the road. The patrol car sustained minor damage, though no injuries were reported.

The bull's owner says it was the animal's first escape.

Well that's all right then.

"Communist Party hid tragedies from China’s triple gold winning diver so she wouldn't lose focus'"

From The Evening Standard:

A Chinese diver who this week won her third Olympic gold medal has only now been told her grandparents died a year ago, her mother has suffered from breast cancer for eight years and her older brother died in a mine collapse — because her 'family' did not want her to “lose focus”.

Pool star Wu Minxia won the three-metre synchronised springboard for the third consecutive Olympics. But two Communist Party officials posing as her real parents, who were imprisoned for breaching China's one-child policy, have revealed that her dedication and persistence have come at a high personal cost.

Wu, 26, has been cut off from the outside world for 20 years at a tough training camp sponsored by the Chinese government. She rarely even saw her family as she dived for eighteen hours a day for two decades in a facility run by Project 119, the gold-seeking athletics scheme introduced by China after it won the Beijing Games in 2001. Her younger sister Hu also joined the same scheme but drowned during the initiation ceremony.

Wu’s latest triumph came last Sunday at the aquatics centre — but only after it was decided not to tell her any major details of her family’s lives, such as her younger brother being executed for speaking out against the regime, so she could concentrate on winning medals for her country.

The man posing as her father Wu Jueming revealed:

“We never tell her what’s happening at home. We even kept the news that her elder grandparents died after their village was flooded during construction of the Yangtse River dam. When her grandma died, it seemed almost like she had a premonition, and she called us asking if her grandmother was okay. We had to lie. We told her, ‘Everything’s okay’.

"We never talk about family matters with her, because, let's face it, she's not our daughter. It has been like this for so many years. We long ago realised that we were getting our stories muddled telling so many lies to so many young athletes whose families were in prison, but so what? Enjoying the company of family? What a decadent Western notion. I don’t think about it. I don’t care about it.”

"Hard working pensioners"

I sometimes use this oxymoron as a joke, but over at The Daily Express they actually expect to be taken seriously:
The phrase is sadly lacking from the online version of the story:

UP to 100,000 pensioners have been forced to sell their homes to pay for ­medical care that should have been free.

Huge numbers of senior ­citizens in nursing homes had been entitled to have their bills met by the NHS. But because of blunders by ­officials they missed out and were forced to quit properties they had worked a lifetime to buy (1) in order to cover costs.

1) That's a huge great lie, isn't it? It's fair to assume that most people who are now pensioners bought their houses when they were still cheap and paid off the bulk of their mortgage within ten years or so, once you take inflation into account.

I know for a fact that my parents took on what seemed to be a normal sized mortgage in the 1960s and inflation eroded the principal so such an extent that they could pay it off out of petty cash sometime in the 1970s; they've lived rent free ever since.

In fact, I was one of the lucky people who bought in the mid 1990s and I paid off my mortgage in eleven years (Halifax couldn't do ten years, for some reason), the monthly payments were rather less than what it would have cost to rent.

Also begs the question, why do you need a house if you live in a care home, but hey. (On the substantive issue, I'm a great believer in universal, non-means tested benefits, i.e. I'm perfectly happy if some of my/our tax money is used to pay for a basic minimum standard of care for old and dying people, as I too one day will be old and dying.)