Tim Worstall

“For the first half of my life I was always known as my father’s son, and now I am known as my daughter’s father.”

There are worse things to achieve in life.

The professoriate here I come then.

ecaf_2111

It’s an adaptation of the piece I did for the IEA showing why UKUncut are almost entirely wrong in their wibbling about Boots, Arcadia, Vodafone and Barclays.

And just for Arnald: in there, at the end, are some positive suggestions for how to tax. How to raise the same amounts of money while having higher growth.

Don’t say there aren’t positive ideas presented around here.

I’ve got a paper in Economic Affairs this month.

It’s a journal, a Journal even, so does this mean I’ve published a “paper” in the accepted sense?

How does this work?

Or is something in a Journal a journal article?

I’m pretty sure there wasn’t “peer review”, at least I didn’t get anything back from any reviewer saying “please sort this out dimwit” so I assume that it’s not a “paper” in hte sense of “have you published a paper?”

Markets for the factors of production are, of course, impossible, by definition, under socialism.

The IMF has argued Britain could afford to raise its debt by 50% of GDP without triggering a crisis.

That might be perhaps just a little lenient, but let’s run with that shall we?

So, our current budget deficit, that is, the amount we add to the national debt each year, is some 10% of GDP.

This means that we can continue on the current budget trajectory for a maximum of five years.

Now, from what I remember of the various speechifying, the current government says that it’s trying to get that deficit under control in four years.

I’m not hugely convinced that leaving a 12 month gap before “crisis” is being overly harsh really. Sounds like a reasonable sort of buffer actually.

Maybe, even, that the current government’s actions are informed by that IMF statement?

It was actually Sr. Barroso who made the point in a piece for The Times. The aim and point of the European Union is to stop Germany invading France. Again.

OK, valid goal, even though my personal opinion is that they’ll not try it again. At the third attempt they actually conquered the place and found out it wasn’t worth the candle, not worth the bones of a single Pomeranian Grenadier.

However, given this stated goal, we’ve now a metric to use in deciding whether a particular piece of EUery is valid or not.

No, we don’t measure whether it’s a good idea or not, we measure the effect it has, could have, might have, on the Wermacht rolling through the Ardennes again.

As I say, “good idea” or not is irrelevant, for good ideas can be implemented at other levels: local, regional, national, global even: there’s no particular reason to have something that is a “good idea” rammed down out throats by an unelected bureaucracy: that power is reserved alone for stopping the 14 th Bavarian Foot enjoying the shade of the plane trees as they reach the Midi.

What has an EU directive on whether people with diabetes should be allowed to drive have to do with the single market, asked David Cameron in a pop at Brussels in his speech to the Tory party conference on Wednesday. Apart, presumably, from roads being a key factor in distributing goods, and the fitness of people to drive being a key factor in ensuring everyone else’s safety.

“Do you suppose anyone in China is thinking, ‘I know how we’ll grow our economy – let’s get those diabetics off our roads’?” the prime minister asked the conference.

Diabetes UK, the main charity helping people with the condition, has expressed concerns over some elements of the new driving standards package being implemented through a new directive.

However, it does not think the changes are all bad. Indeed, some could actually improve the chances of employment for some insulin-dependent drivers. Some have lost their HGV licences under the present UK blanket ban on them driving heavy lorries – a rule that is more stringent than in many European countries.

Sorry Ms. Curtis, you’re addressing the wrong question. It isn’t, as you seem to think, a matter of whether it’s a good idea that diabetics can or cannot drive and under what conditions they may or may not do so. It’s why does this particular level of our governance, the one tasked with stopping the panzers rolling, get to make these rules?

Even the defenders of the system agree that there’s a democratic deficit: one that can’t be helped, as we’re all trying to stop a war here. Which means that, where a rule, a law, can possibly be implemented elsewhere then it should, we abuse the normal methods of governance only to, precisely and exactly, prevent that war.

Unless this law is about whether diabetics can drive Tiger Tanks through Amiens it is not relevant to the EU’s goal and therefore should not be instituted at EU level.

Steve Jobs: co-founder of Apple dies aged 56

He really did work right up to the end, didn’t he?

But this price allegedly should have been $21.10, thereby incurring a taxable charge of $20 million that Jobs did not report as income.

Lordy, no, that’s not what the problem with backdated options was: although it’s a problem.

Jobs receiving $20 million and not declaring it on his income tax, well, minor. Apple paying Jobs $20 million and not including it as an expense, thereby reducing it’s profits, much bigger problem. That was the general problem with these backdated options.

You’re allowed to issue an option at absolutely any price you like as a company. You’ve just got to account for it properly. Which they didn’t….and nor did several other companies and that’s what all the fuss was about.

Issuing in the money options should take a slice off the reported profit. Not taking that slice off was the naughty bit.

It’s precisely because I believe freedom of speech so important that those who discredit and abuse it have to be constrained

A possible translation: those who say things I don’t like should not have free speech.

An ad sparking off the current world cup……

Rumour has it that David Cameron has a first in PPE from Oxford. The E stands for economics. However, the only way that’s possible is if he did what all creeps do: read the set texts and never ask a question. Why do I say that? Because there is no sign at all that he actually learned anything from the process.

So sayeth the man with an accounting and economics degree from Southampton, the man who agrees that halfway through the first term he switched off on the economics as it was all obviously rubbish.

So universal debt reduction is a massively bad idea.

So sayeth today the man who said on 16 th September 2011 that:

And second, we can do what else that is really needed: which is massive cross cancellation of debt so that balance sheets of countries and banks are deleveraged all at the same time in an act of mass debt forgiveness – the ultimate Jubilee.

This is also good:

Sixth, you introduce capital controls.

We’re in the European Union. Free movement of capital, recall? Good luck in rewriting the EU Treaty, which is what would be required.

The other, perhaps even more disturbing, thing about capital controls is that Ritchie doesn’t seem to understand the most basic point about capital flows. He’s arguing for capital controls so that Brits don’t send pots of money elsewhere. Meh, argue that one out as you wish.

But the thing is, Brits don’t actually send pots of money elsewhere. Not in aggregate they don’t, for we’ve been running a trade deficit for the past 30 whatever years. This means that we must (for balance of payments does balance, it’s an accounting identity, something an accountant who skipped his economics classes should be able to grasp) be running a capital account surplus. As we have been for the past 30 whatever years.

Capital controls will mean foreigners not sending us that lovely money which gets invested in UK business and thus raises productivity and wages.

Paying attention in economics classes is sometimes useful.

The biggest delusion of all, which props up this whole debate, is the notion that black and white people forming loving relationships proves racism is being defeated: that the quality of life for Britain’s minorities can be measured by the number of interracial relationships. But this is fantasy. Compare it with gender equality. Would anyone seriously claim that, because men and women feel attraction for each other, sexism cannot exist? From the days of master-slave girl couplings, it’s always been clear that what people do in the bedroom is completely separate from what they do in the outside world.

Ultimately, it’s clear that there is no single “mixed-race” experience – it varies with age, gender, geography and the type and number of ethnic origins a person has. And I’d never dictate to anyone what they should call themselves. But if we want to see an end to discrimination, prejudice and inequality based on skin colour, in all forms, then there is no doubt that black and mixed-race people have to be on the same side.

Nonsense. That people of different skin colours shag each other and produce children is a) what proves the very concept of race to be nonsense and b) what is going to eliminate race as something to even discuss.

When our great great grandchildren are all with a slight cafe au lait tinge to their skin colour who in fuck is going to give a shit?

If we were to be ungallant, considering a woman who has had four children, would we insist that her jawline is the first place that needs a stitch or two to produce some tightening up?

I don’t know whether it’s the journo not making it clear or something deeper and more disturbing that is wrong here:

The EU has moved to pass a directive, the Emir, or European Market Infrastructure Regulation, to regulate the trading of complicated financial instruments that many blamed for causing the global financial crisis. The legislation aims to standardise all derivatives products not traded on a regulated exchange.

The point of having derivatives that are not traded on an exchange is to have derivatives that are not standardised.

Think about it for a minute: so, imagine, you want to play about with 3 month, 6 month aviation fuel prices. You’re an airline, you’re taking money from people now for flights that aren’t going to happen for another 5 months. You need to hedge your exposure to possible changes in fuel prices: don’t forget, you’re charging people a fixed price now and you’ve a variable fuel cost in the future.

I’m pretty sure there are aviation fuel futures (and or options?) over in the US but even without those you can get a pretty good synthetic cover by playing around with crude oil futures and options. The link between oil prices and aviation fuel prices is pretty direct: the refining margins tend not to move around very much.

Excellent, there are deep and liquid exchange traded futures and options so off you go and hedge your exposure. In exchange traded products.

As just such an airline you’ll also probably have a little flutter on currencies as well: you’re collecting money (as a European airline, say, Ryanjet) in euro and pounds, maybe a little in Danish Krone, Czech Crowns and so on. But aviation fuel is (normally) priced in $ so you want cover there as well.

Deep and liquid exchange traded markets here as well.

So, why would you want an OTC derivative?

Well, let’s say that these exchange traded products only extend out to 9 months (don’t know whether that is still true but it used to be, for both options and futures). But you’re buying planes on 20 year leases: perhaps also you’ve got some worried about what fuel prices are going to be in 3 or 5 years time. You are, recall, making 20 year bets with your aricraft leases.

You probably don’t want to be playing with futures here (a future insists that you trade at the relevant time at the agreed price) but options will do very nicely (an option allows you to trade at the agreed price at the relevant time). It’s an insurance policy really: you work out what $/€ rate will bankrupt you on your lease payments, work out what aviation fuel cost will bankrupt you, shave a little bit off those prices then purchase options. So, if either price moves to where it will bankrupt you you can exercise the option and just about stay in business, getting your $ or your fuel at a price that allows you to do so.

Options out 3 or 5 years can be expensive, which is why you set your option price at the most extreme price that allows you to stay in business: rather than paying a higher premium that will ensure profit but that higher price might unacceptably bite into current profits.

(Umm, do please note that all of this is made up, it’s an example. An example of the logic, not a precise description of what airlines actually do: that I’m not privy to. The basic effects are right, if not the precise actions.)

But there are no exchange traded products which go out to 3 or 5 years. If you are limited to exchange traded products then you can’t actually hedge your risks. Thus you go to Mr. Global Megacorp Bank and make up an OTC option which will cover you.

It might well be that their bright young things will then go and hedge this option in the exchange traded markets, using a mixture of shorter dated exchange traded options to cover their longer term risk but you as an airline don’t care about that. You’re covered which means you can get on with working out how to charge people for having a pee while airborne.

And that’s why OTC markets exist: because there are people out there who need hedges which can’t be done with the standardised products on the exchanges. Which means that the desire to standardise OTC products is doomed to failure: the whole point of them is that they are not standardised.

As I said at the beginning, I’m not sure whether it’s just the journo who has made a casual error here or whether the EU really is trying to do this impossible and highly undesirable thing.

Neither, frankly, would surprise me.

The newspaper referred to her brief marriage to a man and published an “inherently private” photo of the 2007 civil partnership ceremony between Miss Trimingham and another woman.

A civil partnership, as with a marriage, is a public declaration. In fact, by definition it’s a public declaration, that’s the whole point of it, to stand up and in public declare the legal relationship between the two people, in front of witnesses and all.

Remember the witness thing? Right, that proves the the aim of the whole thing is that it is in public.

Now because we now know Knox and her male accomplice no one cares about were in fact released it is clear that the prosecutors did not say any of these things. The Daily Mail was intending to use a piece with fabricated quotes in other words- doing a Hari as it were.

So either the reporter- Nick Pisa- made them up off his own bat or the Daily Mail routinely make things up for the sake of a better story.

No, not quite.

I mean, OK, yes, that could indeed have happened. But there is another explanation.

“Hello Mr. Prosecutor, I’m from the Mail. Would you say that “Justice has been done” although as a “human factor it was sad two young people would be spending years in jail” given the recent verdict of guilty?

“You would? Oh good. for that’s what my article already has in it.”

Now you might think this is naughty (and you certainly might think it implausible thatthis is the actual explanation) but it is by no means unheard of to write the quote and then go out and find someone to say it.

In PR you do it all the time of course: you’re forever phoning up people to tell them what they’ve just said to the press. Journalism perhaps less so but it’s not, as I say, unknown.

So, which is the university in the Czech Republic which does metals and mining then?

In the UK I’d start with Cambourne School of Mines, maybe the (Royal?) School of Mines at Imperial. In Germany, at Freiberg.

But where do I start in the Czech Republic? Particularly, I want to find out about the history of mining in a specific area from 1900 or so to 1990. Who dug where, who processed what where and where was the rubbish dumped?

This is all a bit too long ago for it to have really made it onto the internet so which part of the groves of academe is likely to know?

I think we’ve a couple of Germany based readers here. So, a particularly technical question.

I’m highly likely to need a part time translator sometime soon. German to English and vice versa, in Germany, of course. Some investigation work on the phone, some simultaneous translation.

Absolutely does not have to be a trained translator. We’re not talking about lots of nuance here. However, a bit of industry background would be extremely useful.

Now, in the area that I need this work done, that bit of investigating, that bit of attending meetings with me, there’s a university which is packed full to the brim with students who have that bit of industry background. And of course in the modern Germany many of them have English to an entirely acceptable standard for my uses.

So the question is, what is the likely attitude of German students to the offer of a bit of part time work? Screams of horror at having academe invaded by filthy lucre? Or, yes, lovely, I’ll do 15 hours a week at (?? 15 €? €25?) an hour, thank you very much indeed.

Anyone actually know?

Interesting demand:

Demand one: Restoration of the living wage. This demand can only be met by ending “Freetrade” by re-imposing trade tariffs on all imported goods entering the American market to level the playing field for domestic family farming and domestic manufacturing as most nations that are dumping cheap products onto the American market have radical wage and environmental regulation advantages. Another policy that must be instituted is raise the minimum wage to twenty dollars an hr.

Yeah, I know, this isn’t an official demand, it’s one bloke stating what he thinks everyone should be demonstrating for.

But who knew that Pat Buchanan was occupying Wall Street?

Here:

As public health doctors and specialists, we are concerned about the Health and Social Care Bill. The Bill will do irreparable harm to the NHS, to individual patients and to society as a whole.

It ushers in a degree of marketisation and commercialisation that will fragment patient care; aggravate risks to individual patient safety; erode medical ethics and trust within the health system; widen health inequalities; waste much money on attempts to regulate and manage competition; and undermine the ability of the health system to respond effectively to communicable disease outbreaks and other public health emergencies.

While we welcome the emphasis placed on establishing a closer working relationship between public health and local government, the proposed reforms will disrupt, fragment and weaken the country’s public health capabilities.

The Government claims that the reforms have the backing of the health professions. They do not. Neither do they have the public’s support. The Health and Social Care Bill will erode the NHS’s ethical and cooperative foundations and will not deliver efficiency, quality, fairness or choice. We ask the House of Lords to reject passage of the Health and Social Care Bill.

The important words here are “public health”. They’re all “public health” professionals, the signatories. Public health being:

Public health is “the science and art of preventing disease, prolonging life and promoting health through the organized efforts and informed choices of society, organizations, public and private, communities and individuals” (1920, C.E.A. Winslow).

Now, don’t get me wrong, public health has almost certainly done more for the lifestyle and lifespan of the average human being than any other area of human endeavour. Vaccines, sewage treatment (taking “public health” to be widely drawn), the basic study and control of epidemics and pandemics has done more for us all that any amount of surgery or, indeed, pretty much anything else with the possible exception of abundant food for all.

However, the profession has gone on to other things:

Since the 1980s, the growing field of population health has broadened the focus of public health from individual behaviors and risk factors to population-level issues such as inequality, poverty, and education. Modern public health is often concerned with addressing determinants of health across a population. There is a recognition that our health is affected by many factors including where we live, genetics, our income, our educational status and our social relationships – these are known as “social determinants of health.” A social gradient in health runs through society, with those that are poorest generally suffering the worst health. However even those in the middle classes will generally have worse health outcomes than those of a higher social stratum.^[8] The new public health seeks to address these health inequalities by advocating for population-based policies that improve health in an equitable manner.

Well, yes, so public health nowadays is simply the health care wing of the Labour Party. It’s all inequality innit? The Spirit Level, Professor Marmot etc. And, of course, the people who cook up those studies lying about smoking bans reducing heart attack rates, about salt being a killer, who want to ban sugar from processed foods, who would ban Marmite from being advertised to children, who have caused the HP recipe to be changed, who bleat about the entirely made up “safe drinking guidelines”. Fake charities galore telling us all how we should live in order to make sure than no one, anywhere, can be accused of enjoying themselves.

So, the reorganisation of the NHS is going to reduce their power is it? Dig them out of their comfy niches where they can propagate their prejudices?

Bring it on say I.

I’m told that a very important person has responded to my post:

“I would like to draw your attention to a comment we received on Debating Europe from Corrado Pirzio-Biroli, Chairman of the Consultative Committee of the European Landowners’ Organization (ELO). In his contribution, Mr Pirzio-Biroli responds to your statements on Financial Transactions Tax, an criticizes your opinion”

My response is there: