Tim Worstall

At the ASI.

European Commissioner as East End schmutter salesman

So, I decided not to take the 6 am flight out of Dresden this morning, thinking that the 9 am would be much better. You know, not necessary to get up at the crack of sparrow fart in order to get to the airport?

And I failed to check the train times: on Saturdays there are not trains from Freiberg to Dresden every 20 minutes, no, there’s one at 5.09 and one at 7.09. That latter not quite getting me to the airport in time.

So crack of sparrow fart it was again. And for some reason there’s no hot water in the flat that early in the morning……grumble, moan, whine…..

Right off, you understand.

An alert reader (be a lert, your blog needs lerts!) sent me this:

According to Margaret Rhodes, the Queen’s cousin, HM’s alcohol intake never varies. She takes a gin and Dubonnet before lunch, with a slice of lemon and a lot of ice. She will take wine with lunch and a dry Martini and a glass of champagne in the evening. That comes to six units a day, which would make Her Majesty a binge drinker by Government standards.

Could be more than 6 units, depends on the heavy or not hand there. And I will admit that I prefer not the lunch part. Same consumption, a cocktail, some wine, perhaps a cognac or a port after dinner. 6-8 units a day…..8-10 with that hand.

HM is 88…clearly booze kills….

But what Brittan does not say is why we have that savings glut when the world is full of people living on the edge of despair about making ends meet and far too many are in real poverty. By failing to address that question Brittan misses the point which is that unless we address the very real inequality in this world and positively redistribute wealth we won’t get out of this crisis.

The strangeness is that it’s the poor globally who are doing the saving. The savings rate here in the UK, or in the US, is trivial. The savings rate in China, a hugely poorer place, is massive.

Redistributing wealth from the UK and US to China would therefore, ceteris paribus, increase the savings rate, not reduce it.

The City of London police, undaunted and eager to retain their strange independence,

The reason the City police do a lot of the fraud investigations is because the City police are the experts at fraud investigations.

They might not be quite as expert as we’d like, this is true, but they’re more expert than, say, the Avon and Somerset force.

For example, as one little birdie has told me, they do get a few of those City accountats etc volunteering as Special Constables. Helps a bit when you get some of the industry professionals turning up to work for free, no?

*

Mexico seizes $4 billion in methamphetamine

Rilly?

The sheer scale of the bust announced late Wednesday drew expressions of amazement from meth experts. The 15 tonne haul could have supplied 13 million doses on the streets of the United States.

Umm, what?

$4 billion divided by 13 million is $307 a dose. That sounds a bit high for meth, given that the whole point of meth is that it is a relatively cheap drug. And they’re positing that the dose would be a little over a gramme (1 million grammes to a tonne).

Actual prices seem to be around $80 a gramme.

Or if we say that it’s 15 million 1 grammes doses then that’s 15 million x $80 or $1.2 billion.

Ah, but that’s US retail pricing. And this gear was in bulk in Mexico. Add in the smuggling value (yes, of course drugs are worth more inside the US than outside) and the wholesale discount and we’re probably looking at something in the $120 million to $500 million range.

Yes, sure, it’s still a big number. But just goes to show: don’t ever trust law enforcement numbers about drugs. They’re as crooked as the anti-counterfiters numbers about what is lost to counter-fiting.

So The Boy Dave is being shouted at because he’s suggested offering a tax credit for employing a maid. You know, like exists in the icy social democracies of the Nordics?

And the people shouting at him are of course those who would like Britain to be more like the icy social democracies of the Nordics. Ho hum.

But, how does this tax credit actually work?

The model works in such a way that service providers subtract the deduction from every bill before reclaiming the shortfall from the tax office, thereby removing the burden of paperwork from the end consumer.

Hmm, so it makes sure that every service provider is in fact registered with the taxman. No registration, no filing of income tax records, no tax credit.

Although there have not yet been any major independent studies on its effects, experts at the National Institute of Economic Research believe the reform to be cost-neutral, since it is likely to create enough tax revenue to compensate for the state’s outlay. Finally, with household services now more affordable, people are less inclined to scour the thriving black market for help in the home.

Hmm, I wouldn’t call it the black market, it’s the grey market. But oit moves what we all agree is an undertaxed area of the economy into being a taxed area. Ritchie will be pleased, won’t he, it’s a reduction in tax evasion, tax abuse.

And this is in part how it was sold:

The governmental bill, the parliamentary debate that followed it and a referral statement is analyzed in this
article. In the governmental bill and in the debate it was argued that the tax reform would lower the taxations
on domestic work which would provide an opportunity for households to buy domestic services (governmental
bill 2006/07:94, Parliamentary debate records 2006/07:116, 30th of May 2007). The reform would in that sense
create a new labour market were unpaid work would be replace with paid work. Another central argument in
the debate was that the tax credit on domestic services would provide a chance for legal companies in the
domestic service sector to gain market from the of-the-books work that is performed within this sector,
replacing unregulated work with regulated work. The reform would in that sense improve the work conditions
within the sector, entitling domestic workers working rights and insurances. Another argument was that the tax
reform would create job opportunities for low educated persons and the domestic service sector would
provide a possibility to enter the labour market for unemployed and especially groups with low employment
opportunities.

Well quite. By dangling the carrot of tax incentives the government can move a goodly chunk of the sector from being off the books to being on them. With all the benefits to tax revenues and working conditions this will bring.

Sounds reasonable enough actually. And it becomes something of a little litmus test doesn’t it?

We might be able to identify those who are at least trying to contribute to public policy and discourse, those who note such things. Even if only to reject them for some other, greater values. And we’ll be able to note those who just scream “tax breaks for servants the Tory Bastard” and are thus not interested in contributing to a serious debate upon public policy but are simply being tribal little shits.

Place your bets as to how The Guardian comment pages go……

So, back from a day trip to Usti nad Labem to look at a factory (“Yes, that’s a factory OK, I’ve seen one before you know!”) and I’m at the train station waiting for the Hamburg Express.

Which is going to arrive/leave from platorm 3. So I am on platform 3.

The station has 6 platforms. Number 6 is by the exit, and is reached by stairway 1. Numbers 5/4 (different ends of the same platform) and 3 are reached by stairway 2.

Platforms 1 and 2 are reached by stairway 3.

So, does the Hamburg Express arrive/leave from platform three, as the listings, my ticket and the station announcements all say? No, of course it doesn’t, silly. It leaves from platform 1 which is above stairway 3.

When I talk to the train conductor (who is having a quick breath of fresh air at the halt and this being an international train yes, he speaks English) he says yes, Platform 3 means up stairway 3, not anything as stupid as what is actually marked as platform 3.

Dang, why are the English so dim? Are you a conservative or something?

Ho hum. And that is today’s news from parts foreign.

This was salient for a number of reasons: for a start, that month followed one of the worst quarters on record for new private sector jobs, with just 5,000 posts filled between June and September 2011. From an economist’s perspective, that is as good as standing still.

Err, no, from an economist’s perspective that would be an unmitigated disaster. For the economy chews through about 10% of all jobs each year. 3 million or so disappear, 3 million or so are created. Unemployment rises when the disappearing (which tends to be a fairly constant rate, it’s the creation which tends to vary) is higher than the creation, fall when vice versa.

Call it 750k a quarter, just as a round number. If there were only 5k jobs created then this would indeed be terrible. What Zoe is looking at is not job creation though. She’s looking at the net number between destriuction and creation, a very, very, different thing indeed.

You might call me a pendant for saying this: but I mention it precisely because I think that Zoe is ignorant of this point.

If Reliance can do Ordnance Survey’s admin and catering for less money than OS did it themselves, or Boeing can do IT for the Ministry of Defence, and that’s cheaper, it seems like an obvious boon. But, especially in low-skilled work, you have to wonder how it comes to be cheaper. Nobody’s invented a quicker way to do cleaning; it’s more likely that wages are forced down, job security is destroyed, pensions are axed.

Well, there’s specialisation, division of labour, these sorts of things. And as to no one inventing a quicker way of doing cleaning.

Umm, Zoe is indeed female? One who does her own housework? Has, say, a mop, a broom, a vacuum cleaner? All of which are quicker ways of doing cleaning than a damp rag and a carpet beater?

And might we, just possible, postulate that a team of cleaners who spicialise in nothing but cleaning, say, offices, might have high value, high performance, specialist, such machines in a way that an individual directly employed cleaner might not?

No, of course, I don’t know and I don’t insist that it is true but it is possible, no?

Because, you know, the glaciers and snow melt will all be gone?

The world’s greatest snow-capped peaks, which run in a chain from the Himalayas to Tian Shan on the border of China and Kyrgyzstan, have lost no ice over the last decade, new research shows.

The discovery has stunned scientists, who had believed that around 50bn tonnes of meltwater were being shed each year and not being replaced by new snowfall.

Oh.

Now, as you all know, I’m generally on board with the idea that climate change is a) happening and b) something we ought to do something about. That something being a minor change in our taxation system, apply a revenue neutral Pigou Tax to emissions and cut taxes on something else.

Whether or not climate change is happening this is probably (OK, weaker than that, I could make the case that it is possibly) economy enhancing anyway. Reducing some of the very bad taxes we have (say on capital or corporates) and replacing them with less bad taxes (said carbon tax) could be beneficial all in and of itself.

A carbon tax is after all a consumption tax and consumption taxes have lower deadweight costs that capital or corporate taxes.

I would want the Nordhaus version though: low now and rising over the years so that we are working with the technological and capital cycles, not attempting to short circuit them.

The one area where I do stray from the narrow path of the media consensus (which isn’t, as we know, quite the same as the scientific consensus) is that I don’t see climate change as being something immediately catastrophic. It’s a decades or centuries long problem and it’s thus one we’ve got decades at least to try to deal with.

As this story about the Himalayas tells us: it was the IPCC wihch hilariously allowed a prediction that all that snow and ice would be gone by 2035 into a report, wasn’t it?

Which leads me to about as sceptoical a position as I am comfortable with. I’m perfetly happy with the basic science of climate change. I’m not entirely certain that the IPCC reflects it properly. And I’m absolutely certain that the economic ideas that are proposed to deal with it, what governments are actually doing, are wrong.

Prince Harry follows in the distinguished footsteps of other members of the Royal family who have fought for their country.

Because, well, you know, that’s what Princes are for.

An FTT will reduce the fragmentation of the internal market.

Eh?

A tax on transactions will increase market integration? You what?

Actually reading the report their basic contribution is to point out that it’s been very embarassing what with the EU report itself showing that an FTT would lose tax revenue. This was because the underlying model used showed that an FTT would raise the cost of capital to companies and thus reduce investment.

So, we’ve changed that model so that the result is less embarassing.

Hurrah, trebles all round!

UK trails Poland and Bulgaria on adults educated to A-level standard

Lecturers’ union says European data shows Britain risks languishing in ‘mid-table obscurity’ due to rising cost of learning

We should therefore reduce the cost of learning by paying lecturers less and having fewer of them.

There, job done.

Not quite what I’d expect the lecturer’s union to suggest but…..

My word!

Mick Aston quits Time Team after producers hire former model co-presenter
Mick Aston, the archeologist, has quit Time Team after producers hired a former model as the programme’s co-presenter.

So, toothsome bimbo to get her nipples out for the lads. Kown as the Dimmock Strategy. Woo Hoo! And I can see why a serious scientists like Professor Mick Aston would be upset.

An email to archaeologists last year from Wildfire Television, which makes the programme, said it was seeking a female co-presenter who “does not have to be overly experienced or knowledgeable as we have plenty of expertise within the existing team”.

I get it now, this is Sam Fox’s comeback attempt, isn’t it?

So, who did they hire?

Miss Ochota, 30, holds a master’s degree in archaeology and anthropology from Cambridge University and has previsouly done modelling work, including shoots for Special K.

See! See! Nothing but a smile above a nice pair.

And over in a parallel universe it is noted that the art of modelling for Special K is the ability to look happy about the way in which your breakfast cereal has allowed to you to have a really good shit. But in a delightfully feminine manner.

A suitable skill for someone who is to work with that emetic Tony Robinson I would have thought.

Prime Minister David Cameron is known to have sympathy with the idea of minimum pricing, which medics say could save nearly 10,000 lives per year if set at 50p per unit.

Gosh, that’s amazing.

Alcohol related deaths in the UK rose to 9,031 in 2008, up from 8,724 the previous year.

Rilly? A slight rise in the cost of cheap booze will save more lives per year than are lost to all booze?

Hey, why not put it up to £50 a unit and we’ll all live forever?

Forgive me the crudity but I’ve really had it with cunts lying to get their bandwagons rolling.

From April, HM Revenue & Customs (HMRC) will be able to demand a security from companies when the taxman considers there is a “serious risk” that the business will try to dodge PAYE or National Insurance Contributions (NICs).

As they say:

Tax officials added that the “amount of tax at risk, the employer’s previous behaviour and other risks” will be used to determine the size of the security, but it will typically be either four or six months’ worth of income tax and NICs.

About 400 companies are expected to have to provide a security in the next financial year, HMRC said.

As a way of dealing with serial offenders, can’t see anything wrong with it. However, such schemes do have a habit of expanding. And if it did expand it wouldn’t be a good idea.

For one of the major sources of working capital for young and small companies is indeed that float that you can dig out of delaying payments to the taxman. Perhaps you shouldn’t do it, perhaps it’s even naughty, but it is still true that it’s a major source of working capital.

Asking for a bond of course doubles that hit on working capital. Instead of being able to slide a payment that might be due in three months time out to 6 months time, you’ve got to come up with the 6 month payment right now. Even that it’s a bond, not an actual payment, doesn’t change much as it’s still a hit to your credit rating or how much you can borrow elsewhere.

I remember being absolutely astonished in California. Having set up and started a business we were then told by the sales tax people (so equivalent of the Vatman, not PAYE but still similar) that we had to put up a bond for the amount of sales tax we expected to collect in the next three months.

Yes, of course, legally it’s the State’s money, we’re just collecting it on their behalf. Yes, absolutely, they have a right to it. But what does it do for business formation when you deliberately increase the amount of capital a start up must have by pre-charging the taxes that might be due three or four months down the road?

There’s entirely another way of looking at this. Being a bit lax on credit ratings and payment terms for taxes on small and new companies is an explicit subsidy to their working capital. And we do all agree that getting capital into small and new companies is something this country isn’t all that good at, do we? And that possibly there’s even an argument that government might have a role to play here?

Even if we don’t all agree with that description, we do all agree that many people say that is a problem, yes? In fact, there are many people who say that Government should be even more explicit in such subsidies: by, for example, making grants and low interest loans to such small and start up companies.

And here we have just such a scheme, even though it operates rather under the radar. The problem is, of course, those who take serial advantage of this laxness which provides the subsidy.

Perfectly happy with the idea that the serial offenders get it: not all that over joyed about the idea that it might be gradually extended until the subsidy vanishes and we start demanding that all start ups require even more capital than they do at present.

Slightly more considered view of Monbiot’s discovery.

It’s a little odd to study Britain then conclude that racism and conservatism are aligned when our most racist political party is a nationalist socialist one and when our most conservative political party is the Labour Party.

From his blog comments:

And there is not a hint of inflation, at all

From the BBC:

Inflation fell sharply in December on the back of lower fuel and clothing prices.

Consumer Prices Index (CPI) inflation in the UK fell to 4.2% in December, down from 4.8% in November, according to the Office for National Statistics (ONS).

Retail Prices Index (RPI) inflation – including mortgage interest payments – fell to 4.8% from 5.2%.

Some of us consider 5% to be more than just a hint of inflation. But then that would be being both numerate and observant, wouldn’t it?

as near as I can figure our iPad does everything my laptop could do about 3 years ago.

Tchah!

Do you not understand?

It does it more expensively which is just wonderful, isn’t it?