"We’ve had one day of diversity on Radio 4. Now for the other 364"

Lenny Henry, in The Guardian:

A few months ago, diversity campaigner Simon Albury visited the Today programme and was shocked to find a very male, middle-aged, middle-class production team running things. The only younger person there was the bloke asking if he wanted coffee or tea.

But why did this matter? It mattered because what Simon realised and exposed that day was that the news in Britain comes from one perspective. A perspective that is almost exclusively middle-class, and predominantly male.

So Tuesday morning’s show was a big deal for me. I was guest editor – yes Lenny Henry, the man who used to say “Katanga my friends” – in charge of curating the entire show.

In short, I had a unique opportunity to explore what the news agenda would look like if it came from a more diverse perspective rather than from the narrow point of view of the self-perpetuating metropolitan liberal commentariat.

But I realised that this would mean sacking myself, so I didn't.

Meskel Square, Addis Ababa

They showed this on Rude(ish) Tube just now.

"Thirty-two lanes of traffic and no traffic lights!" gushed the presenter. As if that were a bad thing.

So... what's the problem? It seems to be working fine.

"Devon farmer forced to kill 'Nazi' cows because they are too aggressive"

Spotted in The Telegraph and emailed in by View From The Solent, who adds "It's a while since you had one of these".

Indeed it is.

My favourite bit from the article:

The farmer added: "Some were perfectly calm and quiet and they are the ones we have kept.

"The others you could not go near. We made sure no one went near them so there were never any incidents.

"To get them into the trailer to get them off the farm we used a young and very athletic young man to stand on the ramp and they charged at him before he quickly jumped out the way. They were so aggressive that was the only way."

Fun Online Polls: Back to work & Dry January

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

On which of the following days will you be at work over Xmas and New Year?

Monday 29th - 27 votes
Tuesday 30th - 27 votes
Wednesday 31st - 26 votes
Thursday 1st - 13 votes
Friday 2nd - 29 votes
Saturday 3rd - 16 votes
Sunday 4th - 16 votes
Not back to work until Monday 5th Jan - 16 votes
Other, please specify - 5 votes

Thanks to the 61 people who took part. Today is my first day back at work since Xmas, so I guess I'm one of the lucky 25%.
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The question on everybody's lips and foremost on everybody's mind is no doubt how much they will reduce their alcohol consumption during Dry January.

So that's this week's Fun Online Poll.

Vote here or use the widget in the sidebar.

Campaign Posters

Ah, so season of goodwill over, and we've got 5 months of electioneering coming now.

On the Conservative one, Fraser Nelson points out that:-

New year, new porkies from Conservative HQ. It has opened 2015 with a poster that involves a deception (above): ‘the defict halved’. It’s a relatively small deception: the deficit has been reduced by a third (see graph below) just as David Cameron was saying only a few weeks ago. But this poster makes a more important, and more depressing point: the Tory leadership is prepared to use dishonesty as a weapon in this election campaign.

Here’s how I suspect it all unravelled. George Osborne invented the porkie: that you can say ‘the deficit has been halved’ if, when challenged, you later claim that you’re referring not the deficit, but to a ratio: a deficit/GDP ratio. This is a valid metric, but it’s not “the deficit”.

On the Labour one, err Fraser Nelson points out that:-

So Labour’s poster is misleading. It uses share of GDP in language that makes the reader believe it’s talking about real money. But given that Osborne has just used precisely the same trick to pretend that he has halved the deficit, he is in no position to complain.

My own view of the posters is that both are full of the sort of distortions that politicians like to make.

I don't really think that the Conservatives are in much of a position to make bold claims about unemployment and businesses. There's very little that they've done in policy terms that seems to me has been either about getting people into work, or creating business. I suspect a lot of the recovery is just what would have happened, anyway.

One thing that you often see in companies is that things get stretched out a bit longer when there's economic uncertainty. A white van man might hang onto his van a couple of years longer, maybe. But you can only stretch things so far, things pick up slightly, the future starts to look rosier, and you buy the new van.

As for Labour's poster, well, waiting times were clearly being manipulated under Labour's era (such as having ambulances holding people outside A&E so that they didn't count as waiting in A&E), something the Conservatives put a stop to. And regarding privatisation, this was a process that was started under Ken Clarke as an internal market, dropped by Labour early on and later re-introduced and the extended by Labour to provide personal choice outside the NHS. The competition under the Tories is furthering what Labour already were doing.

All of this is from both parties is about trying to create clear water between them, the Indian Bicycle Marketing that Mark refers to. The "Tories cutting spending" talk favours both parties. It favours Tories who want their small government voters to vote for them and it favours Labour who want their big government voters to vote for them. The reality is that spending has increased over the past 4 years.

Both parties need this lie because both want their "core" vote to turn out. The people who want small government to vote Conservative because "otherwise, evil Labour will get in" and the people who want big government to vote Labour because "otherwise, the evil Tories will get in". If these core voters ever figured out how it really makes little difference either way, they'd vote with their instinct (for perhaps UKIP or the Greens). Neither party is ever going to call the other one out on this, because then it shatters the illusion for them too.

"Joseph Stiglitz: Thomas Piketty gets income inequality wrong"

Emailed in by Sackerson, from salon.com

What’s new in your recent work on the distribution of income and wealth among individuals?

JS: There are several things. There’s some debate about this, but I think most readers of Thomas Piketty’s book (Capital in the Twenty-First Century) get the impression that the accumulation of wealth — savings —is responsible for the rise in inequality and that there is, therefore, in a way, a link between the growth of the economy — the accumulation of capital— on the one hand and inequality and wealth.

My paper begins with the observation that in fact, you cannot explain what has happened to the wealth/income ratio by that analysis. A closer look at what has gone on suggests that a large fraction of the increase in wealth is an increase in the value of land, not in the amount of capital goods.

When you say “land,” you’re not talking about land in the Jane Austen sense, that is, agricultural land under the ownership of the lord of the manor, right?

JS: It’s not agricultural land, it’s the value of urban land. I would include in that, broadly, rents associated with natural resources (“rent” is an economic term for unearned revenue). It’s the value of existing assets.

As a footnote, some of what has gone on, in addition to an increase in the wealth/income ratio, is a capitalization of the increase in other kinds of rents, like monopoly rents. If monopoly rents get increased, if the market power of firms relative to workers gets increased, as when you have the ability of a few, like the banks, to get government guarantees — the value of that is increased and gets capitalized. That increases wealth but it doesn’t increase capital. So it’s that distinction between wealth and capital that turns out to be critical. That’s the first idea.

The reason that’s important is that you then begin an inquiry into the explanations of why the value of the land or other sources of the value of rents would have gone up. A lot of my book (The Price of Inequality) is about why there has been an increase in rent-seeking. But the other part is more external in terms of the value of land or the value of assets. That, I suggest, is very closely linked with the credit system….

Stiglitz is a bit of a leftie, but apart from that, amen brother!

"Why We Want Dynamic Scoring Of Budgets..."

Emailed in by MBK, an article by Tim Worstall in Forbes:

However, we also know that different taxes have different deadweight costs. Sometimes the deadweight cost is actually the reason to impose the tax. This is partially true of Pigou Taxes (like a carbon tax, the aim and point is to reduce carbon emissions) and others like cigarette taxes can sometimes be so classified.

We even know a rough order of ranking of those deadweight costs.

Transactions taxes have vast deadweight costs: at least one official report on the financial transactions tax (the report from the EU itself) tells us that that tax would make the whole economy so much smaller that it would actually lose tax revenue by being levied. Lower than that are wealth taxes (a once off wealth tax that no one knows is coming does not, but a regular one does), then capital and corporation taxes, then income taxes, then with still lower deadweight costs consumption taxes (like a VAT or sales tax)* and then finally, at the bottom, we find that repeated taxes on non-movable property can even have positive deadweights. And that last can also be called a land value tax.

Please do note again that this is nothing to do with how much we tax but only with how we tax. Further, all of these assumptions have been tested emiprically and make up the heart of optimal taxation theory. We really do know that if we raise $100 in a transactions tax then we’ll lose more economic activity than if we raise $100 in a land value tax.

* He consistently ranks these incorrectly. VAT and sales taxes are transaction taxes, and hence go to the very top of the naughty list. But hey.

Film Review: Les Miserables

This wasn't my choice, but one of the family. I'd heard a few songs, wasn't too sure, but thought I'd try it anyway.

For me, I thought it was a mess of a film. There are a couple of good songs in there (Do You Hear the People Sing? is the best) but most of the songs are instantly forgettable, and there are a lot of them. I couldn't watch Master of the House being sung without being reminded of lapel-grabbing urchins dancing to You've Got to Pick and Pocket or Two from Oliver. The musical seems to lack a good musical structure of building up to a climax, I'm guessing because it was originally a stage musical where you have intervals and a big number before the interval. It means that while watching it, I thought we were near the end of the film, only for another hour or so to happen afterwards. I also find Tom Hooper's direction irritating, all odd camera angles and swooping close ups that end up irritating.

On the plus side, the live singing, something rarely done before in musicals, is quite good here. Traditionally musicals had performers lip-synching to the songs and then being sung over separately, either by the performer or a better singer. That said, Russell Crowe should have had this treatment. He's believably cast as an unsympathetic jailer, but doesn't have a good singing voice.

Hugh Jackman is very good as Valjean and Anne Hathaway's performance as Fantine deserves the plaudits it received. But what I came away from the film with most is that Victor Hugo wrote a damn good story and if someone had applied the same budget to a non-singing movie adaptation of the book, it would make a terrific film.

Homey homies (2): The effect of congestion on rental values

The Stigler looked at an article on gentrification a few days ago.

Apart from illustrating that society as a whole creates rental values by imposing/accepting law and order, this bit is a good illustration of von Thünen's theory of rent:

Key to attracting companies and families is Compton's geographical location close to LAX airport, Long Beach port which is the second busiest container port in the US, and near office buildings in downtown Los Angeles.

[Mayor Mrs Aja Brown] said: "In California they're not making any more land. And with the high cost of land, from a business standpoint, being able to move your goods quickly and cheaply makes Compton an attractive place to be.

"And traffic is so horrible here in Los Angeles, and getting worse, that if you want to have a quality of life not on the freeway, you may want to live nearer where you work. I think people are getting to grips with that. I think Compton is a really attractive place for young families."

We can hold some of von Thünen's variables constant; what has changed is

a) The value of being close to the centre of activity has gone up,

b) Hence the amount of traffic has gone up,

c) So although Compton's physical distance from the centre has not changed, travel times/travel costs have changed.

Assuming that the overall attractiveness of the whole area is roughly constant (more people makes the centre more valuable but more traffic pushes rents down again), what happens is that rental values close to the centre increase disproportionately and rental values further out go down slightly.

This is true even if travel times from Compton have gone up in absolute terms; as long as travel times have gone up even more for people commuting from further afield.

(Rhetorical questions: Can any single landowner in Compton claim to have created or earned that extra value and/or can any single landowner in surrounded areas be blamed for the fact that the rental value of his land has fallen?)

Rail Fares

From the Guardian

It’s the first week of January, so it’s time for that painful annual ritual – the introduction of yet more rail fare rises. No wonder rail passengers have had enough.(1) Fares are increasing much faster than wages, with regulated ticket prices having risen by more than 20% since 2010.(2)

Figures released today by the Campaign for Better Transport show what this could mean for a constituency like mine in Brighton. Average ticket prices have soared(3) by more than 20% for Brighton-London commuters, for example, whose journey to and from work could cost the equivalent of 8.6 weeks of net earnings – more than £4,400. That’s 17% of the average regional salary, and a price increase of £745 under the coalition. And while today’s rise sees regulated fare hikes capped at 2.5%(4), the cost increase on unregulated fares, such as off-peak leisure tickets, will be left to train companies’ own discretion.(5)

Passengers in this country pay the highest fares in Europe to travel on services that all too often are unreliable, understaffed, and overcrowded. After two decades of privatisation, the private sector has not delivered the innovation and investment that were once promised.(6)

Moreover, private rail companies still remain dependent on public subsidies to run their services.(7) But these same companies can then turn over up to an estimated 90% of their operating profits to shareholders.(7) This blatant transfer of public money means that the public purse is effectively propping up a failing rail system for private gain.(8)

The Rebuilding Rail report(9), published by Transport for Quality of Life, conservatively estimates that about £1.2bn is lost each year as a result of fragmentation and privatisation. The irony is that some of the biggest profiters are the state-owned rail companies of our European neighbours. Yet that’s money that could, and should, be reinvested to improve our own rail services and reduce fares.

That’s why on Monday, I will be joining campaigners from groups including RMT, Action for Rail, Compass and the People’s Assembly at rallies at stations all around the country to call for rail to be brought back into public ownership, with passengers having a greater say in the development of the system. We are proposing that the government would take back individual franchises when they expire, or when companies fail to meet their conditions. The enormous savings generated could and should then be reinvested in rail infrastructure, and to reduce the soaring cost of fares.(10)

1. Really? People are quitting their jobs in London to work in Brighton because of rail fares?

2. Which is about 3.6% per annum.

3. 3.6% is hardly "soared"

4. Why? Why 2.5%? There's limited supply. Why shouldn't rail companies charge more?

5. So, why do commuters get their fares capped but non-commuters don't? Where's the logic in that? The rail firms get subsidies for running unprofitable routes, but if we just allowed them to charge the market rate for commuters, that would make the thing more profitable, and so we could reduce our subsidies to them.

6. Well, probably because the private sector is no longer responsible for the bits that require the investment and innovation, which is to say, track and signalling. And because there's not much to "invest" in. Plus the franchise thing means that none of them can invest in the long term. The Stagecoach buses I go on have nicer seating than most trains and wifi, but that's because they own those buses and no-one can take it away from them.

7. Yes, but so did British Rail when they ran their services. So do SNCF for lots of services. If you want a rail service rather than just commuter services, you need subsidies.

8. Failing rail service? No, that was British Rail. Rail's not perfect today, but compared to the days of BR, the trains are more reliable than they were then.

9. Which is full of romantic idealising of European rail services. No mention of the near 8 billion euros of subsidy per annum (no, really) that SNCF receives.

10. You can't. Not without changing EU law. The thing that is almost never mentioned about rail privatisation is that it was done that way because EU directive 91/440 said we had to do it that way. True, lots of countries have dragged their heels on it, but Lucas is pro-EU, so presumably wouldn't want us to go breaking any EU laws, would she?