Tim Worstall

Via you know who, a letter to The Guardian.

Calling for a Robin Hood Tax to tax banks.

There then follows the list of signatories….very useful information really. For it’s a list of those who haven’t managed, however eminent they are, to grasp the concept of tax incidence. Thus a list of those we can safely ignore on matters economic:

Stephany Griffith-Jones, Financial Markets Director, Initiative for Policy Dialogue, Columbia University

Prem Sikka, Professor of Accounting, Centre for Global Accounting, Essex Business School

Dr Jan Toporowski, Department of Economics, SOAS

Ronald L. Martin, Professor of Economic Geography, Cambridge-MIT Institute Research Associate, University of Cambridge

Ian Gough, Professorial Research Fellow, LSE and Emeritus Professorof Social Policy, University of Bath

Richard J. Smith, Professor of Econometric Theory and EconomicStatistics, University of Cambridge

Barbara Harriss-White, Professor of Development Economics, Oxford University

Sheila Dow, Professor Emeritus in Economics, University of Stirling

Geoffrey Hodgson, Research Professor, University of Hertfordshire

Stuart Holland, Visiting Professor, Faculty of Economics, University ofCoimbra

John Weeks, Professor Emeritus, University of London

Dr Alberto Paloni, Head of Economics Department, University of Glasgow

Sushama Murty, Assistant Professor, Department of Economics, University of Warwick

Richard Murphy, Director, Tax Research UK

Simon Mohun, School of Business and Management, Queen Mary, University of London

Dennis Leech, Professor of Economics, University of Warwick

Dr Jamie Gough, Senior Lecturer, Sheffield University

Grazia Letto-Gillies, Emeritus Professor of Applied Economics, Director, Centre for International Business Studies, London South Bank University

Tony Thirlwall, Professor of Applied Economics, Keynes College, University of Kent

Dr Pritam Singh, Senior Lecturer of Economics, Oxford Brookes University

Dr Nitasha Kaul, Visiting Fellow, Centre for the Study of Democracy and formerly Lecturer in Economics

Philip J Whyman, Professor of Economics, University of Lancashire

Roberto Veneziani, Senior Lecturer, Queen Mary, University of London

Dr Colin Richardson, Internet Economics Consultant, Imperial College London

Howard Reed, Director, Landman Economics

Judith Metha, Research Co-ordinator, ESRC Centre for Competition Policy, University of East Anglia

Stephen Spratt, Head, Sustainable Markets Group, IIED

Dr Roberto Simonetti, Senior Lecturer in Economics, Open University

Alan Freeman, Association for Heterodox Economics

Christophe Edwards, Senior Fellow, University of East Anglia

Dr Jerome De Henau, Lecturer in Economics, Faculty of Social Sciences, Open University

John Christensen, Director and Economist, Tax Justice Network International Secretariat, London

Michael Burke, Economic Consultant

Dr Jonathan Aldred, Newton Trust Lecturer

Quite what Ritchie and Prem Sikka think they’re doing on a list that starts “as economists we…..” I’m not sure.

One of the most annoying, indeed enraging, things about politicians is their habit of speaking with forked tongue. You know, lying. Saying one thing and doing another.

So, let us all praise Chris Huhne:

ENERGY Secretary Chris Huhne is leaving his wife of 26 years after confessing to an affair, the News of the World can reveal.

The Lib Dems are social liberals, aren’t they?

This is interesting I think:

Barber also states that we want people to “believe that public sector wages have overtaken those in the private sector”. He then rather bizarrely states that they have. Public sector hourly wages overtook the private sector in 1984 and have been higher every year since. He fails to mention, however, that the premium has grown dramatically in recent years, from only 16% in 2001 to almost 30% in 2009.

He puts this down to the fact that a higher proportion of skilled and professional workers are in the public sector, which they are.

It’s that “skilled and professional workers” bit that’s interesting.

For there’s been a very strong push over the decades to insist that varied groups of public sector workers must have certain qualifications.

Sure, we’d all rather like doctors to actually have qualifed as doctors. But it’s only recently that all nurses in training need to be in degree course rather than the more practical ones that prevailed well into my adult lifetime.

Teachers need not only a degree but also a post graduate qualification: when in fact what they might actually need is the degree and some teaching practice.

A great deal of social work is observation and some social nous, common sense even, yet most of the Guardian’s job ads require a BA if not an MA.

We can see another nascent campaign to professionalise an entire sector with the shouts about “high quality child care” which always seem to come attatched to the observation that everyone in Finland who works with children has a Masters degree.

So, to some extent, the presence of more “professionals” in the public sector is because there’s been a long running campaign to define as “professions”, requiring professional qualifications, the things that are done in the public sector.

On a piece commending Rick Astley for having given up his pop “career” to be a stay at home father, we get this:

Personally I think Paul Gadd gave up a lot more for children

The Archbish of Westminster (that’s the left footed one) says, re the banking system, that:

But the ethical judgment, which has to be transmitted right through the organisations concerned, is that profit must only be a means to this end, and not an end in itself.

Ah, no. Something of the cart before horse there: if we were not addressing the comments of such a distinguished churchman we would say arse over tit actually.

Profit is a byproduct, neither a means nor an end. It’s a byproduct of producing something that others want for less than they’re willing to pay for it.

Now there are naughty ways of doing this, certainly, just as there are entirely not naughty ways. But what profit really is is just an indication that you are adding value to whatever resources you are deploying.

It’s neither a means nor an end.

At the ASI.

How to really solve our economic problems: leave the EU and adopt unilateral free trade.

Didn’t the boys do well!

Mmm, what?

No, no, the important game, this one.

I don’t see why the British lower classes deserve part of the wealth created by the City, merely because their homes are located closer to the City than those of Swedish workers.

Why do they?

Well, well, what an interesting idea.

Lord Adair Turner, chairman of the Committee on Climate Change (pictured), has – we are told – written to the energy secretary asking that the Carbon Capture and Storage (CCS) competition be extended to include gas as well as coal projects.

The committee is saying that efforts to tackle global warming require reducing emissions from electricity generation to almost zero by 2030, which should rule out new conventional gas-fired power stations after 2020.

I fear that Richard has missed a little trick here. Yes, of course it’s insane, yes, of course it’s economic warfare against us by our own rulers. But there’s still more to it than that.

For carbon capture from gas is a great deal simpler than carbon capture from coal.

You see, to get the carbon out of coal you’ve got to first burn it then try to capture the CO2. This isn’t easy.

However, to capture the carbon out of natural gas you don’t need to burn it first. What you do is strip the carbon out (natural gas being CH4) and then burn the hydrogen. Or, if you wanted to be sensible, you’d run your H2 through combined heat and power systems running on solid oxide fuel cells (it really is only a coincidence that my favourite metal, scandium, is used in such fuel cells).You can then, at least I assume you can, burn the C to get CO2 and thus you get a pure stream of CO2, not something you need to capture in any difficult manner. Just a pipe on the outlet of the furnace or turbine.

And, absolutely best of all, it’s not actually clear that this will cost anything to do. That it might not cost anything is lovely, while the uncertainty over the cost isn’t of course. And that’s where I think it gets interesting.

BP (yes, that BP) has been touting a scheme to test this for years. Up at Peterhead (which, purely by chance, is just down the road from St Andrews, the home of Europe’s leading researcher into scandium based solid oxide fuel cells. Serendipity or what?). Let’s take natural gas from a N Sea field. We’ll strip it, burn it and pipe the CO2 down into a near end of life oil field. This gets rid of the CO2. At least, we think it does, but this is something we’re testing, see?

That CO2 then brings up the last oil in the field….nothing very unusual about the basic idea, all sorts of things are pumped down wells to bring up the last bit. CO2 is novel but then this is an experiment, see?

Now yes, pumping CO2 about has a cost: but getting up oil that we couldn’t get up any other way is a benefit, a source of income. One covers t’other. Well, maybe, but this is an experiment, see?

So, why hasn’t the experiment been done? Well, there’s that pesky thing called the tax wedge. We’re almost certain (certain to within the limits that BP is willing to take a flier on it) that the value of the oil coming up plus the electricity generated covers the cost of getting rid of the CO2 (I don’t know whether this is including a credit for disposing of the CO2 or not, sorry, perhaps I should).

However, BP must pay quite large royalties to The Treasury on each barrel of oil they bring up. This is of course right and proper: Ricardian Rents should be captured by the State, not individual actors. However, oil royalties are high enough that at current levels they mean that the post tax value of the oil does not cover the costs of getting rid of the CO2.

So, what BP asked was, look, this oil that is only going to come up if we bury the CO2….can we pay less tax on that oil please? It’s not, after all, a loss to The Treasury: if we don’t get the reduced tax rate then we’re not going to do the experiment, the oil will stay underground for ever and the Treasury will get nothing.

And what was Gordon Brown’s answer?

Well, yes, you can guess can’t you.

No.

So, experiment undone, technology untested, and all because the Laddie loves more tax. Even to the extent of not collecting more tax in aggregate because it would mean lowering a tax rate.

Which brings us back to Adair Turner. It is already possible to test this idea while at the same time increasing revenue to The Treasury. All that has to be done is to offer a lower royalty rate to those already willing to conduct the experiment.

No, I’ve not gone and looked at his proposals in detail: but I’d be willing to bet reasonably large sums that he ain’t. OK, here’s his letter. I’m right!

He says that we should “fund”, ie spend more of the money we haven’t got, a gas CCS project. Instead of increase the revenue we get to cover the amount of money we haven’t got by lowering a marginal tax rate.

Which is, of course, why having Adair Turner poncing about at the head of yet another quango is such a damn bad idea.

Could we please all get with the program? Yes, of course, economics teaches us that free lunches are very rare and precious things indeed: but the most common place to find them is not in getting government to do something, it’s in getting government to stop what it’s already doing.

At the ASI.

On the TUC’s latest paper about capital gains tax. Their researcher seems not to know anything about either economics or data.

Remind you of anyone?

At The Register.

About minerals in Afghanistan and the EU’s latest plans for mineral commodity colonialism.

Congressional Democrats are pushing hard for legislation to rein in the power of special interests by requiring more disclosure of their roles in paying for campaign advertising — but as they struggle to find the votes they need to pass it they are carving out loopholes for, yes, special interests.

The only way out of this impasse is to have fewer laws thus reducing the urge of special interests to influence them.

It has its own currency, so it’s not Greece, because if you have your own currency you can’t default.

(And Ritchie says in comments “As an economist I know how limited the accountants view of the world is” which is really rather amusing.)

So let us look at the modern bible of defaults: This Time is Different. (Yes, I did get my copy as a freebie from the publishers and yes, it is worth buying if this sort of thing is your bag.)

Modern defaults (ie, post gold standard, post Bretton Woods fixed exchange rates, only countries with their own currency).

Algeria 1991, Angloa 1985, Egypt, 1984, Kenya, 1994, 2000, Morocco, 1983m 1986, Nigeria, 1982, 1986, 1992,2001,2004, South Africa, 1985,1989,1993, Zambia, 1983, Zimbabwe 2000, Indonesia, 1998, 2000, 2002, Myanmar, 2002, Phillippines, 1983, Sri Lanka, 1980, 1982, Poland, 1981, Romania, 1981, 1986, Russia, 1991, 1998, Turkey, 1978,1982, Argentina, 1982, 1989, 2001, Bolivia, 1982, 1986, 1989, Brazil, 1983, Chile, 1983, Costa Rica, 1981, 1983, 1984, Dominican Republic, 1982, 2005, Ecuador, 1982, 1999, 2008 (that last doesn’t count as they had dollarised, maybe the second doesn’t either), Guatemala, 1986, 1989, Honduras, 1981, Mexico, 1982, Nicaragua, 1979, Peru, 1976, 1978, 1980, 1984, Uruguay, 1983, 1987, 1990, 2003, Venezuela, 1983,1990,1995,2004.

And that is just external default: there’s a whole other chapter on episodes of default on domestic debt to go as well.

Sure, some of these are wars, repudiations, regime changes and so on.

However, I think we’ll take “if you have your own currency you can’t default” as being not true then, shall we?

When I was growing up, we had a ping-pong table in the basement and I spent a good deal of time playing my father. We used a sliding handicap. I started with some number of points. Every time I lost my starting score went up by one point for the next game, every time I won it went down. Gradually, over the years, it crept down to zero.

David Friedman.

Bob Piper picks up on this:

The Treasury has always been at its most comfortable counting the candle ends: by rescinding this loan ministers have shown that the blinkered, short-termist, anti-industry mind set of the 1980s is back with a vengeance.

That 1980s anti-industry mindset is usefully illustrated by this chart of industrial output.

Manufacturing output at the end of the 80s was some 20% higher than it was at the beginning of the 80s.

Using 2005 as 100 (it is an index, after all) manufacturing output was 77.2 in 1980 and 93.3 in 1990.

Note that this is manufacturing and does not include either oil or mining.

Some “anti-industry” action definitely going on there then.

A new retail quarter for Sheffield was also put on hold and a £13m grant to buy the old Outokumpu steelworks in the city was scrapped, in a further sign that many traditionally Labour areas are now losing out under the coalition government. Others include Leeds, Birmingham and Hartlepool.

Many traditionally Labour areas are losing the preferential treatment they received under the previous government is how that should read.

Now you can of course argue that that’s what Labour governments are for: to benefit those who vote Labour. But if you do you cannot turn round and complain when a not Labour government decides to benefit those who did not vote Labour.

No, really:

The Blues Brothers have received an endorsement from the unlikeliest of quarters – the Vatican.

When you think about it they’re right too. Despite the faults of the Church on Earth, the Brothers, Jake and Elwood, act as if that Church is indeed their family. And they ignore the secular authorities, indeed strive against them, in order to aid that Church. The true Church, not just the fallible one here.

If we can sing and dance to Praise the Lord, are we not Praising the Lord by singing and dancing?

Tim Aquinas…Tom’s lesser known younger brother.

Or, in short: Shake Your Tailfeather:

Benny XVI

In a new study, European researchers found obese women had more trouble finding a sexual partner than their normal-weight counterparts

Film at 11.

This also amused:

”Maybe women are more tolerant of tubby husbands than men are of tubby wives,” said Kaye Wellings, a professor of sexual and reproductive health at the London School of Hygiene and Tropical Medicine and one of the BMJ study authors.

Only a professor would put that “maybe” in there.

That Amazon box arrives……five Tom Holts (four of which will be rereads but that’s no problem) and two Sir Pterrys….plus all sorts of other bits and pieces of bubblegum crime novels etc.

Well, come on, it is summer after all, even if I’m not on a beach.

He may have all the looks and charisma of a back-street abortionist, but rumpled Herr Von Rumpy is a Federast to his core.

Although, umm, shouldn’t that “but” be a “because”?