Again, voting Remain is not voting for the status quo

In your humble Devil's last post, I pointed out that a vote to Remain in the EU is, in fact, not a vote for the current situation.

As a swift adjunct to that, I find this July 2015 article, from Andrew Lilico, which neatly reinforces the economic problems within the Euro area.

So when British politicians propose that EU political integration should slow or that the EU should prioritize some other objective (e.g. the Single Market), that is not merely seen as unattractive—it is impossible.

The reasons why are economic. As was widely discussed in the UK debate about the euro in the 1990s and early 2000s, to make a single currency such as the euro work, one needs an adequate combination of trade integration, similarity of economic cycles (so that one size fits all interest rate and exchange rate policies do indeed fit all), capital and labour mobility (to offset any “asymmetries” in economic shocks – that is, economic shocks hitting some parts of the Eurozone harder than others) and fiscal transfers (to compensate for any large or long-term differential performance that is not offset by capital and labour mobility).

The Eurozone has fairly good trade integration, some material differences in economic cycles (though not especially larger than the differences between regions within the UK or US), and fairly high capital mobility. But even when they occur at around the same time (so cycles are not out), economic shocks affect some parts of the Eurozone much worse than others (as we have seen in the Eurozone crisis). And, Ireland excepted, labour mobility is not particularly high (despite all the complaints about immigration in some Member States).
That means—as has been argued all along—that for the Eurozone to work over the longer term there will need to be much more significant fiscal transfers between regions.

Which is precisely what I articulated a few days ago. And, of course, in order for the economic scenario to work, there must be more political union.

If adequate economic mechanisms and political union are not introduced, it is believed that the Eurozone crisis will return and anti-European sentiment will (rightly) increase, ultimately destroying the Eurozone and the EU project as a whole. Banking union and constraints upon Member State budgets have been introduced. Even more political integration is on the way.

So in the Eurozone, the answer to increased Euroscepticism is not seen as any form of rowing back on integration. Quite the opposite — Euroscepticism has arisen because political integration had not proceeded rapidly enough.

For the Eurozone and EU to survive at all, deeper political integration, including Eurozone-level tax and spending decisions and democratic mechanisms to oversee them plus reduced control over tax and spending decisions for Member State, are an existential necessity.

Quite so. Lilico's conclusion implies that the current referendum may be very far from being the last turning point for the UK in its relationship with the EU.

This all means current debates about whether the UK will have a referendum and how folk will vote is of only passing significance. What counts fundamentally to whether the UK stays in the EU after about 2020 is whether there are any non-euro members of the EU at all, given the existential economic necessity of the Eurozone forming into a deeper political union. At present that seems highly unlikely.

It may be that, regardless of the result of the referendum on July 23, the UK will have another chance to choose its destiny within the European Union. That is the optimistic view.

The less optimistic view—at least, for those of us who have no interest in being swallowed up by a European super-state based on Napoleonic Law (rather than the Common Law)—is this: that our leaders will view any vote against leaving the current arrangement as an affirmative decision to enter into this superstate.

That must not be allowed to happen. For all that the Leave campaign have been incompetent in being able to articulate this unpleasant future, the Remain campaign have expressly avoided telling the British people the inevitable future of political and economic integration.

If the British do not vote to Leave the status quo, only the extremely dishonest would take that to mean that they have signed up to a federalist future.

Labour's fixed that for you

According to the Daily Wail, George Osborne (amongst others) lobbied hard against the Tories' EU referendum pledge.

George Osborne pleaded with David Cameron not to hold an in/out referendum on the European Union, it emerged last night.
Senior Tory sources revealed the Chancellor had repeatedly warned against the move in the run-up to the Prime Minister’s referendum pledge in 2013.

He is said to have warned Mr Cameron that a referendum would not resolve the tensions within the Tory party over the issue, and risked an accidental British exit from the EU.

If we exit the EU, Georgie-boy, it won't be "accidental": it will be the quite deliberate will of the British people—a people who would rather make their own laws and articulate their own priorities (for better or for worse).

But why, George? Why would you do this thing: why campaign against an EU referendum...?

[Osborne] also warned that holding an in/out vote risked putting the Conservatives on the wrong side of mainstream business opinion…

Well, if by "mainstream business" you mean big corporates, yes: if, on the other hand, you mean "the vast majority of British businesses that have to implement a bunch of regulations even though they don't actually trade abroad"—the ones that make up 80% of our trade and commerce—then not so much.

But Georgie is a sneaky little tyke: surely he can just be cuddling up to businesses? Is there, perhaps, some kind of political side to this?

... handing a political gift to Labour.

Ah. I did wonder.

Still, that shouldn't be a problem after September 12.

The Tories will have to worry far less about the opinion of businesses (or, indeed, voters) when the main opposition party is about to elect a terrorist-appeasing Communist, pushing a generally fascist manifesto—the financials of which are cobbled together by an economic illiterate.

George & Co. must be delighted.

FFA or and bust

Following their remarkable win, the SNP is now pushing for Full Fiscal Autonomy (FFA) for Scotland. Broadly speaking, this means that Scotland runs its own economy—being able to spend cash and raise money as they please.

The supposed driver for this is that Scotland is a "more socialist" country, willing to pay more tax in order to stave off the tyranny of austerity. This narrative is, of course, bollocks: were it not, the SNP (also the dominant party in Holyrood) would already have used the tax-raising powers that the Parliament has—up to 3p in the pound extra in income tax, if I recall correctly.

Instead, when these powers were granted at devolution, the proposal to use them was attacked as "a Tartan tax". Indeed it may be but one that, if the SNP and other Scottish commentators are to be believed, one that would be welcomed by the austerity-loathing Scottish people.

The fact that the extra tax has not, actually, ever been levied leads one to re-examine that old economics truth of "revealed preferences", i.e. watch what people do, not what they say.

Of course, raising income tax by an extra 3% probably would do little to help the Scottish budget—the projected deficit under FFA is nearly £8 billion (around 10% of Scotland's GDP). In fact, most commentators think that Scotland's Full Fiscal Autonomy would be as disastrous as HP's adoption of Autonomy (yeah—that was a tech world joke (if an old one)).

So, why on earth are the SNP lobbying for FFA—a policy that will, as Alex Massie points out, surely lead to cuts in Scottish public spending that make "austerity" look like the most extravagant fiscal splurges of the more insane Roman emperors?

A clue to what the SNP might be thinking comes from SNP MP George Kerevan, in an article for The National [Emphasis mine—DK].

It is now inconceivable that David Cameron can reject Scottish demands for greater home rule, given that all three mainstream Westminster parties – Tory, Labour and Lib Dem alike – have minimal legitimate authority in Scotland in the wake of May 7. The general election was not a mandate for a second referendum – a point reiterated time after time by Nicola Sturgeon, whatever contrary hares are set running by the battered and bruised Westminster establishment. Nevertheless, the SNP’s electoral success is undoubtedly a mandate for going far beyond the hastily conceived ragbag of new powers contained in the Smith Commission documents.

The SNP maintains that the Smith Commission does not actually give Scotland enough powers (although many English people might argue that the Smith Commission gives the Scottish Parliament a great many powers, with very little responsibility). The Grauniad has summed up the main points, which I reproduce below.

• The Scottish parliament will have complete power to set income tax rates and bands.
• Holyrood will receive a proportion of the VAT raised in Scotland, amounting to the first 10 percentage points of the standard rate (ie with the current standard VAT rate of 20%, Scotland will 50% of the receipts), but cannot influence the UK’s overall UK rate.
• It will have increased borrowing powers, to be agreed with the UK government, to support capital investment and ensure budgetary stability.
• UK legislation will state that the Scottish parliament and Scottish government are permanent institutions. The parliament will also be given powers over how it is elected and run.
• Holyrood will have power to extend the vote to 16- and 17-year-olds, allowing them to vote in the 2016 Scottish parliamentary election.
• It will have control over a number of benefits including disability living allowance, the personal independence payment, winter fuel payments and the housing elements of universal credit, including the under-occupancy charge (bedroom tax).
• The Scottish parliament will also have new powers to make discretionary payments in any area of welfare without the need to obtain prior permission from department for work and pensions.
• It will have all powers of support for unemployed people through employment programmes, mainly delivered at present through the Work Programme.
• It will have control over air passenger duty charged on people flying from Scottish airports.
• Responsibility for the management of the crown estate’s economic assets in Scotland, including the crown estates’s seabed and mineral and fishing rights, and the revenue generated from these assets, will be transferred to the Scottish parliament.
• The licensing of onshore oil and gas extraction underlying Scotland will be devolved to the Scottish parliament.
• The Scottish government will have power to allow public sector operators to bid for rail franchises funded and specified by Scottish ministers.
• The block grant from the UK government to Scotland will continue to be determined via the operation of the Barnett formula. New rules to define how it will be adjusted at the point when powers are transferred and thereafter will be agreed by the Scottish and UK governments and put in place prior to the powers coming into force. These rules will ensure that neither the Scottish nor UK governments will lose or gain financially from the act of transferring a power.
• MPs representing constituencies across the whole of the UK will continue to decide the UK’s budget, including income tax.
• The Scottish and UK governments will draw up and agree a memorandum of understanding to ensure that devolution is not detrimental to UK-wide critical national infrastructure in relation to matters such as defence and security, oil and gas and energy.

Your humble Devil submits that this is very close to FFA, whilst admitting that there are some constraints on how the Scottish Parliament may act. One might argue that a great many of these constraints are there to stop the Scottish Parliament bankrupting its country. Your mileage may vary.

However, the SNP is arguing for Full Fiscal Autonomy. That means that Scotland is entirely responsible for its own economy, right?

Well, you might think that: and now we'll return to George Kerevan's comment [Emphasis mine, again—DK]...

The constitutional ball is well and truly in David Cameron’s end of the field. Cameron’s opening gambit may well be to offer Scotland fiscal autonomy, in return for termination of the Barnett Formula (a mechanism that matches per capita spending changes across the UK constituent nations). We all know that in present UK economic circumstances a fiscally autonomous Scotland would face a significant budget deficit.

For Scotland to accept fiscal autonomy without inbuilt UK-wide fiscal balancing would be tantamount to economic suicide. However, all federal systems have mechanisms for cross subsidising regions in economic need by regions in surplus. To deny that to Scotland suggests a disingenuous Mr Cameron is hoping to derail any move to Scottish Hole Rule within the UK.

Wow. Yes, that's right: George Kerevan—and, we must assume, he is a proxy for the SNP—is seriously suggesting that Scotland be given Full Fiscal Autonomy except when it doesn't have the money to afford it.

Just sit back and admire the chutzpah—George is saying that the Scottish Parliament should be given free rein to run things as it likes. Except that when the Scots overspend, rack up debts, or just go batshit wild with the cheque book, the rest of England should have to bail them out. Kerevan is proposing that English taxpayers chuck another £7 billion a year at the Scots before they've even started turning on the spending taps (because who, genuinely, thinks that they won't?).

What the SNP are holding up—as an expectation—is a total lack of any responsibility. Kerevan is proposing is that no matter how much the Scottish government screws up—no matter how fecklessly Holyrood runs the national finances, or shamelessly its parties bribe their voters—the people of England should be expected to bail out the Scottish nation regardless.

There really is only one answer to this, and its very simple: fuck off.

David Cameron, in concert with Miliband and Clegg, has already betrayed England by his shameless capitulation—a.ka. "the promise"—to the Scots after the Independence Referendum: it is entirely possible that this spineless Buttered New Potato will sell us down the river by agreeing to this shit too.

If he does, we might finally see the anger of the English people burn hot enough to march down Whitehall—parading Cameron's massive, shiny head on a fucking stick.

And not before time, frankly.

UPDATE: have the SNP been monitoring the Kitchen for suggestions...?

It would be the next Eurozone

The idea that Scotland could possibly be independent and yet retain the British sterling is insane.

The former Chancellor said it was “surreal” that the First Minister can claim the remainder of the UK would willingly share control over the pound and interest rates without checking first.

In reality, he said it was difficult to imagine English politicians managing to “sell” this to their constituents. Mr Darling concluded an independent Scotland would be more like “serfdom than freedom” if monetary policy was set by a different country.

The Treasury confirmed that Mr Salmond has had no discussions with the Bank of England about a “currency union” after separation and an independent Scotland would have no influence over sterling.

And why would this be such a bad idea? Because, of course, currency union without fiscal union is precisely what has the current disaster in the Eurozone so inevitable.

To do the same between the UK and an independent Scotland would be the purest folly.

Scotland is not, of course, Greece or Portugal or Spain—it contributes about 9.4% of UK taxes but receives some 9.3% of government spending.

The UK has a 2012 GDP of an estimated $1,557 billion: Scotland contributed a mere £139 billion (or about 8.9%), but then it has only about 9% of the population too.*

Having said that, however, Scotland has the potential to become as bad as the PIIGs: a few years ago, some 56% of people in the country derived their primary salary from the state (I don't know what the figure is right now).

* UK figure converted from nominal US dollars derived from Wikipedia (and corrected—I know GDP is not 2,500 trillion!), at current rate of $1 = 63.5p.

Scottish figure from Wikipedia, in nominal pounds sterling.

Economics spot

Oh look! Yet more evidence that students—even those commenting on a topic that they are supposed to be commenting on—are completely fucking ignorant...

And this, of course, simply builds adds more fuel to the fire of The Devil's Second Law of Economics, i.e. that if a student says that something is so, the opposite is true.

Thus, naturally, feeding into the general law that there is not a single social sector on this planet so ill-informed, self-righteous and pig-ignorant as a student.

And then they join UKUncut—after passing an entrance exam to prove their idiocy—and become even more comprehensively fuck-witted.

Students: ignore them—you know it makes sense.

The sex pay gap

According to Gaby Hinchcliffe in The Grauniad, we have managed to solve the pay gap between women and men.

According to official statistics released last week, the pay gap between men and women—that barometer of shifting power between the sexes—has quietly shrunk to a record low and among younger women has shot clearly into reverse. Women in their 20s now earn a solid 3.6% more on average than men their age, after narrowly overtaking them for the first time last year. The rise of the female breadwinner, it seems, was no blip, but the beginning perhaps of a social and sexual sea change.

Of course, Timmy has been banging on about this for some time now. And, as he says, there are two main reasons for any existing gap.

Overall it is in favour of men but that’s down to two things.

1. Overall is comparing women in their 50s etc, people who did not receive the same education or career opportunities as the men of their age group. This is a problem that will be solved simply by time.


2. Motherhood. The pay gap appears at the average age of primagravidae. We don’t actually have a gender pay gap any more. We have a motherhood pay gap. To change this you’re going to have to change biology and good luck with that in a mammalian species.

So, can we please declare this problem over and get on with solving some of the others that plague us?

All of which makes Jerry Hayes's article at Dale & Co. (a pretty site full of high-profile writers who know bugger all about anything) look like precisely what it is—a pathetic whinge backed up by no evidence whatsoever.

So how does Cameron woo the women back to the ballot paper? Simple. Show that they are being treated equally and fairly and that means, shock horror, that they should get paid the same rate for the same job that men do. It is hard to believe that in 2011 Britain the pay gender gap can still be up to 20%. It is a national disgrace.

Jerry Hayes is, apparently, "a former Conservative MP and leading barrister defending and prosecuting high profile cases", so it's no wonder that he is a clueless twit.

Unfortunately, his article is typical of that site—a mess of anecdote and personal opinion with not a single link to any evidence whatsoever. And whilst Jerry might be right that the law, as a profession, is full of useless, bigoted arseholes, this is hardly news, is it?

A Twitter battle...

Your humble Devil has crossed swords with Richard Murphy on Twitter. I thought that my readers might be interested in the exchange...

DK:
Tell me, @richardjmurphy — you have since said that your tax avoidance was wrong. Have you since paid back the arrears that you "owe"…?

Murphy:
@devilskitchen Nonsense! I had HMRC come to my house and asked if I could pay additional rates - and they refused - because none are due

Quite right. Because tax avoidance is legal—tax evasion is illegal. But Richard advocates that avoidance should be illegal too.

Murphy:
@devilskitchen Let's put it another way - I walk my talk on tax compliance - so enough of your nonsense!

Really? I think not.

DK:
@RichardJMurphy So you do not seek to minimise your tax liability? And, despite advising others how to, you have not done so yourself? Ever?

DK:
@RichardJMurphy So, Richard, none of this is true? timworstall.com/2010/08/24/in-… And this isn't you? guardian.co.uk/money/2003/feb…

Murphy:
@devilskitchen I've explained that time & again & that I would not do in the same way again. So what? I can change my mind. That's maturity

Murphy:
@devilskitchen I'm sure I have never ever sought to minimise my tax bill - it's an absurd thing to do - and I'd never recommend it to anyone

So, Richard Murphy has never sought to minimise his tax bill? Your humble Devil and his readers know that this is a lie. Not just a dissemblance, but an outright lie.

Richard has sought to minimise his tax bill, by forming limited companies, paying low wages to avoid employers NICs, paying dividends in order to reduce income tax, etc. Murphy's assertion above is just not true. At all.

His argument at the time was that he had changed—he had come to realise that such arrangements were wrong. So, because I am a thoroughly nice chap, I decided to let him admit this. In 2010, Richard protested that he had changed since he was... Er, 27. About 20 years before Richard Murphy wrote this article in the Observer advising people how best to avoid tax...

DK:
@RichardJMurphy So, you are 53? In 2005, when you were 47, you were happy to take money to write an article advising people to minimise tax.

DK:
@RichardJMurphy You wrote that "I have come a long way since I was 27 – thankfully". taxresearch.org.uk/Blog/2010/08/2… But not that far, eh, Richard?

Murphy:
@devilskitchen Since it appears you know the answers to all the questions you're raising - all provided by me - shall we stop wasting time?

DK:
@RichardJMurphy Well, why don't you stop wasting everyone's time by hypocritically condemning tax avoidance whilst profiting by it?

DK:
@RichardJMurphy That's a rhetorical question, by the way. I suggest that you stand for Parliament—you'd fit right in.

DK:
@RichardJMurphy You're fatally compromised—like your Union paymasters, milking us for over £113m per annum. Time for dinosaurs to retire.

I make that—along with the rest of the Murphy's Law archive—about 83,000 to 1 in my favour...

Congratulations to Ben Goldacre

Look at Ben... No wonder he's smiling—he's won a gold star for cleverness!

It's so nice to see Dr Ben Goldacre—champion of science and scourge of dodgy-report pedlars—join some socio-economic dots, as he has on Twitter today.

Well, actually, he's part-way there: his first Tweet approvingly quotes the TUC-backed Touchstone blog as an authority on public sector pay—presumably because he thinks that what they have to say is not in any way biased...

the self-pitying fantasy emerging among middle class ppl that their friends in public sector get a better deal is wrong bit.ly/vfkCgg

The blog post in question, of course, only concentrates on actual wages rather than all the benefits—such as gold-plated pensions. It seems rather hypocritical for the self-appointed scourge of selective statistic-quoting scientific studies to so uncritically cite such a source as "evidence" although, to be fair, Goldacre does mention another benefit of working in the public sector... [Emphasis mine.]

there are some terrible problems in the public sector - like, for some insane reason we don't sack shit people - but salary is not one.

Of course, for those working in the public sector, the fact that "we don't sack shit people" is a benefit: it's only a one of those "terrible problems in the public sector" if you actually have to use the so-called services. As the Daily Mash so succinctly puts it...

Businesses also fear that if public sector workers’ demands aren’t met, they may look for jobs in the private sector, costing billions in incompetence-related mistakes.

But that's not really what this little article is about. No, I come to praise Benny-boy, not to bury him. Because, you see, Dr Ben then makes a connection—all on his ownsome, without any help. Which I think is just lovely.

also, public sector pay is "geographically inelastic". private sector wages in London are a third higher. public sector, marginal weighting.

Yes, Ben—and...? Oh look—he's got it!

this has interesting consequences. personal experience only, but i think the public sector attracts better quality ppl outside of london.

Oh, well done! Well done, Ben. Have a gold star, and I shall tell your mummy how clever you've been today...

You see, what Benny has done is to independently reach the same conclusion as this Centre for Economic Performance Report [PDF]—which was published in January 2008.

I highlighted it—whilst filleting Kerron "voice of the delectable Left" Cross—after Timmy wrote about it at the Adam Smith Institute blog under the title of Centralisation kills!*.

What the authors did was look at the quality and productivity of nursing across the country, this being measured by the percentage of those admitted to hospital after a heart attack (AMI) who died in the subsequent 30 days. As we're all told so often of the connection between (relative) poverty and bad health we would expect the rates to be higher in poor areas. Quite the contrary: the richer the area surrounding the hospital the worse the survival rate. The reason for this is that nurses' wages are set centrally, to be the same (with very little geographic variation) right across the country. However, wages in general are not the same across the country:

Pay for nurses and physicians in NHS hospitals, which provide almost all hospital care in the UK, is set by a central review body that sets pay scales in which there is limited regional variation. The variation that exists does not fully reflect the wages differentials in the external labor markets in which the staff are employed. Regional pay differences are considerable in the UK. For example, female white-collar wages in North East England are about 60 percent lower than in Inner London and these persist after controlling for human capital characteristics and other factors.

It isn't that wages are too high in low wage areas, but that they are too low for nurses in high wage areas. This leads to both a shortage of people willing to do the job itself and hospitals relying upon agency staff who are not constrained by the national pay scale: but agency staff are, by the very nature of their shift by shift employment, unlikely to know the systems and hospitals as well as permanent. The end effect is:

A 10 percent increase in the outside wage isassociated with a 4 percent to 8 percent increase in AMI death rates.

That is, where hospitals cannot pay the going rate for trained staff because of the national pay setting, people die. All in the name of equality no doubt, for a job's worth the same amount of pay where ever it is to some people. The only solution to this is to abolish such national pay rates and allow local employers to pay what they need to attract the staff they desire.

So, well done Ben Goldacre, for understanding some basic economics and applying it—even if he is some years behind. Perhaps the good doctor will now campaign against the national pay deal because the downsides are pretty unpleasant for those poor bastards who have to use his beloved public sector services...

All of which rather puts into perspective the current wrangles over national bargaining for police pay, other public sector workers, even the negotiations with civil servants and doctors. We shouldn't be having such national problems because we shouldn't be having such national negotiations in the first place. For centralisation of pay bargaining kills people.

Yes, the national pay deal—negotiated and backed by the Unions who are about to go on strike—actually kills people unnecessarily.

We have had a report showing this for nearly four years now: instead of allowing the union bosses to call the shots with strikes, perhaps we should actually prosecute them for corporate manslaughter. Or murder. I'm not fussed.

Perhaps I should write to Ben and ask if he would support such a campaign?

It should be easy if phrased right, e.g.

Dear Ben, will you back my campaign to imprison union leaders responsible for the national pay deal, or are you actually in favour of the NHS needlessly killing its victims patients...?

Now, if we could just teach Ben about the problems with the National Minimum Wage then we might actually make some progress. Unfortunately, Ben has not replied to my Tweet pointing this out...

* And both the ASI link and the report had changed since I wrote that post, so I spent an inordinate amount of time tracking it down this morning. I have corrected the links there and, of course, here.

Fracking hell

Counting Cats has a good article up about the hysteria surrounding shale gas fracking. As an amusing diversion, I thought that I'd have a look at Frack Off—the campaign site for those with absolutely fuck all idea about science or economics.

These morons do not seem to be simply against fracking, mind you...

The UK is also threatened by a massive expansion in opencast coal mining, deep water oil drilling in the North Sea, Coal Bed Methane and a new generation of even more dangerous nuclear power stations.

So, essentially, these people are against any kind of reasonable power supply at all. So, please, when your granny freezes to death this winter—either because she can't pay the fuel bills, or because the super wind turbines have failed to actually deliver any power—do remember to send a Thank You card to Frack Off.

Personally, however, the most eloquent monument to the complete stupidity of those running Frack Off is the comment that they have let stand on their front page. It purports to be front a Gillian Craig and runs thusly: [Emphasis mine.]

From the first time I heard about this operation some months ago I was concerned, not having a scientific mind in any way whatsoever but quite a logical one, I started questioning about the void left by fracking and then finding out that the void is filled with water, which is not the natural substance to replace gas in the void created. Water is not a solid substance and will move and soak away, I am certainly not surprised that earth tremors have been associated with this practice. STOP IT NOW

There you go people—"water is not a solid substance". Whereas, of course, gas is. Er...

Still, Gillian Craig is right about one thing: she really doesn't have "a scientific mind in any way whatsoever"—although her claim to have "quite a logical one" is belied by the sheer, rampant stupidity of her remarks.

What's really funny, though, is that if you note the link, you'll see that Gillian's spouting is comment #11—but it is the only one that appears on that page. Which means that this was the best comment that they could find and that at least another 10 disappeared down the memory hole (presumably because the commenters disagreed with Frack Off).

And that, ladies and gentlemen, is all that you need to know about the arseholes at Frack Off: that they don't tolerate free speech, they tout the stupidity of people like Gillian Craig, they are pig-ignorant about science and economics, and that they think that 2,700 people dying of cold every winter just isn't a big enough death toll.

What a lovely bunch they must be.

This is science fiction...

In an on-going argument with Martin Ford, Timmy (writing at Forbes) describes a situation that will be familiar to those who read a particular type of science fiction.

For a job, an income, isn’t in fact what any of us humans want. What we want is the ability to consume (consume houses, food, clothes, cars etc, all of which are now being made by machine recall) and and income and or a job are only methods of achieving that. So, if the machines are doing all of the work then, well, who is going to be consuming the output? As there’s only us human beings to do so I pretty much guess that it will be us human beings consuming all of the output. And if we’re able to consume all of this output being produced by the machines then why would we care about having a job or an income? We get to consume without either, don’t we?

All of our material needs are being fulfilled by the machines. We are thus able to be:

A farmer in the morning, a laborer in the afternoon, and a philosopher in the evening.

We’re able to be communists in short. Potter around growing a tomato or two in the morning (nothing quite like it for the spirit, to actually nurture and grow a plant then eat the produce), labour a little in the afternoon at that tennis backhand or lay the crazy paving (yes, the machine could and would do it better and faster but the spiritual rewards of hand work are, as we are told, considerable) and in the evening we can yammer with our friends over silliness (that is what philosophers do, yes, yammer with friends over sillinesses?).

A world in which the machines made everything would be a world in which there was no shortage of anything and in such a world what on earth would any of us actually desire a job for?

Of course, for anyone who has ever read any of Ian M Banks' Culture novels, this whole scenario will be entirely familiar.

The Culture is characterized by being a post-scarcity society (meaning that its advanced technologies provide practically limitless material wealth and comforts for everyone for free, having all but abolished the concept of possessions), by having overcome almost all physical constraints on life (including disease and death) and by being an almost totally egalitarian, stable society without the use of any form of force or compulsion, except where necessary to protect others.

And, indeed, it seems to be a rather desirable way in which to live. Although, having said that, most of The Culture novels are about how that society spends its time interfering in less developed societies...

Time to look to the future

It is time to face some hard facts.

Whether Greece holds a referendum, and whether or not its people vote yes or no, is irrelevant: the country is bust.

The Eurozone countries are pledging €1 trillion, €2 trillion... It doesn't matter: none of them have the money in the bank—or, indeed, the credit line—to pony up on their fantasy. No, not even Germany—which will soon struggle to service its own colossal debts.

The last hope of Merkel and Sarkozy was the Chinese—and they, sensibly, declined. The governments of the EU must attempt to recapitalise the European banks when they themselves have no capital.

Only the other week, several governments had to bail out three European banks who have almost all, as yet, failed to write down their EU state debts.

I have said it before and I will say it again: the social democratic model is bust—it is time for this country to cut its losses and look forwards—to prevent bankruptcy in the short term, and to promote prosperity and freedom in the long to medium term.

So, how do we do that?

The first step that this government needs to take is to announce immediate withdrawal from the EU—with the first step the immediate cessation of any payments to the EU (including MEPs salaries, etc.). This is a process that will take some time in any case—so better sooner than later.

There are three main drivers for this course of action:

1. to ensure that we are not on the hook for any more Euro bailouts—we are going to need every single penny that we can possibly save for the next steps;


2. to enable this government to take immediate and radical steps to reduce regulations on business—those that trade with Europe will need to continue abiding by the EU's rules, of course. However, since only 10% of our trade is done with the EU, that will considerably lighten burdens on businesses—especially the SMEs that create the most jobs and growth in the economy.


3. to be able to open dialogue with every other country in the world in order to gain advantage in uni- and multi-lateral trade agreements—something that we cannot do whilst part of the EU (which has total control over trade policy). Britain already has an advantage in being part of the loose network of countries known as the Commonwealth—a band of national states that roughly share the Common Law legal system and, in many cases, the same language.
   
   The aim should be to promote totally free trade throughout the world. Even if other countries will not acquiesce, then we should immediately declare the free movement of goods and capital through this country.

All of these measures will take time—so the best time to start is now.

The EU

Our erstwhile partners in the EU will not take too many steps against us—with the balance of trade in our favour (as far as negotiation is concerned), we can ensure that the 10% of trade that we do with them is not adversely affected. However, the medium term aim is to reduce that proportion.

The simple fact is this: we have placed far too many of our export eggs in one basket: now the bottom is falling out of that basket and we are about to loose an awful lot of cash. In negotiating uni-lateral deals with the other 150-odd countries around the world, we can minimise any future disruption.

Foreign Aid

The next step will be to reduce any foreign aid—unless used as a bargaining chip with solid economic gains attached.

Our money must be made to work for the monetary interests of the British taxpayers—not for the vanity projects of MPs. And nor can we afford to hand over colossal amounts of cash in order to insulate other people from the disastrous decisions of their own governments. That may sounds harsh, but we simply cannot.

The only way in which these various tyrannical governments around the world will be brought to heel—and brought to heel they must be—is if we make it extraordinarily clear that we will help their citizens to trade with us, and that's all.

I think that we will find that this will bring about property rights and free trade in some of the more backwards parts of the world far more swiftly than any "humanitarian" or "debt-foregiveness" interventions will.

The IMF

We should also withdraw from or severely renegotiate our relationship with the IMF. As with many other supranational organisations of which we are part, our presence at the "top table" seems merely to mean that we hand over huge chunks of money with absolutely no return (other than enabling our puffed-up peacocks of politicians to strut about like they own the fucking world).

Further, since the appeal to the Chinese has failed, it is now inevitable that the Eurozone will now appeal for funds from the IMF: this will mean, despite Osborne's blandishments, that we will suddenly be indirectly bailing out the Euro.

If we are to help out other countries, it will be on our terms and for our own advantage—neither for theirs nor that of the corrupt technocrats and bureaucrats of the IMF, UNESCO and all those other unaccountable world government structures.

On the home front

So, we need to boost business—especially SMEs—in this country. The simplest way to do this is to drop taxes on business, and on capital investment.

So, as I stated earlier, we are going to need some cash and a very sound business plan. Because we are almost certainly going to have to borrow some money ourselves. And we'll have to tread very carefully.

The first step will be the immediate sacking of the top three grades of civil servants (at least), and the voluntary retirement of anyone who would like to get out before the real cuts happen.

The next step is to cut National Insurance by 1% for employees and 8% for employers. Why this difference? Simple—there are far fewer employers creating jobs than there are employees looking to fill vacancies.

VAT (or its post-EU equivalent) can stay where it is—we need some income and, as I have said before, I believe consumption taxes (with the exemptions for "necessities") are the closest to voluntary that you can get.

Capital Gains taxes—for returns on money invested in businesses within the next three years—should be cut to 15%, with the expectation that they will rise thereafter. This should stimulate capital investment now, when we most need it.

Corporation Tax for businesses turning over less than £5 million should be reduced to 15% also. R&D; tax relief at the current level will continue to apply.

Plans to introduce a universal Flat Tax, with high Personal Tax Allowance, will be set in motion with a legislation to be moved at the end of three years.

The National Minimum Wage will be reduced to £2.50 per hour, with Local Authorities empowered to set a suitable top-up precent for their own area. In other words, Westminster Council might decide to bring that up to £8 per hour, whilst East Yorkshire might maintain it at the national rate. This will start to prepare Local Authorities for more autonomy over the next few years.

As far as energy policy goes, government backing for fracking for the production of gas will be immediately granted, ensuring Britain's supply of cheap, low(ish)-carbon energy. Planning permission for gas-fired power stations will be fast-tracked through the process, to ensure that we can take advantage of this wonderful new energy source.

Finally, the NHS will be reserved for essential medical work only, with all funding for non-essential treatments and "preventative" advertising campaigns, etc. slashed to nothing. The government will also start renegotiation of PFI contracts, with the backers involved quite openly threatened with default if concessions are not made.

Conclusion

The above measures are designed to provide a quick kick up the arse to the economy, and to help businesses in the short term. In the medium to long term, a number of other radical steps will be taken (which I shall expand on in a following post)—the above, however, should buy us some breathing space.

Much of it requires the state to act in a ruthless, devious and occasionally downright dishonest manner—however, I believe that both the short-term crisis and the medium-term gains merit it. And reparations—in the form of higher growth and productivity—will be made apparent, eventually.

I'm sure that I've not covered everything, but it's a start—and I commend the measures outlined above to the House.

Quote of the Day

... comes from the re-invigorated Conservative Party Reptile, on the subject of the Greek referendum on the bailout package.

What the referendum is, essentially, is a requirement that the Greek people act like adults and take a bit of responsibility for the future of their own country. I don't imagine that this will be terribly popular.

Quite.

Of referenda and briefing papers...

So despite the LibDems campaigning at the last election on a In/Out referendum, it appears that Clegg has decided to whip his MPs to vote against it. Adenoidal Ed has followed suit—either because he can't think for himself, or because he is as much of a mendacious shit as Cameron and Clegg.

What are they so scared of?

Well, thanks to Mark Wallace, I see that the briefing paper sent to Tory MPs has been posted—so let's have a look at the justifications, shall we?

The national interest is for Britain to be in Europe, not run by Europe.

That is just your opinion. But I am sure, if it really is in the national interest, I am sure that you would have no problem convincing the British people of your position. Right...?

That is why Conservatives want to get powers back from Brussels to Britain, particularly over social and employment legislation.

So, how's that working out for us? Let's have a look at the Conservatives' record in this short government...

1. They have signed up for an extension of the European Arrest Warrant, and brought in new powers for foreign police to operate on British soil through the European Investigation Order.


2. Oliver Letwin apparently became immensely frustrated at how the EU ties the hands of British ministers.


3. The Tories implemented the Agency Worker Regulations—which gives temporary workers the same rights as permanent ones—which is, by the government's own estimates, going to cost £1.9 billion. And, almost certainly, all but destroy the agency workers' market.


4. Call Me Dave asks for plaudits for holding the EU's budget increase down to a mere 2.9%, whilst simultaneously signing over control of both our finances and our financial institutions to the EU.


5. Ian Duncan Smith writes that EU laws that demand we give lots of benefits to anyone who turns up will, in fact, screw his reform plans.

I think that, given that the above is a far from exhaustive list, that we could summarise the Tories' efforts to "get powers back from Brussels" as being... well... a bit shit.

In fact, they have signed over more powers to Brussels. Which brings us to...

We also need to make sure that there is no further transfer of powers from Britain to Brussels without the say of the British people. That’s why for the first time ever this Government has introduced a referendum lock which means that any transfer of powers from Britain to Brussels would require the approval of the British people in a referendum.

And, as a number of us pointed out at the time, this referendum is not worth the paper it's printed on. There are innumerable ways around this "referendum lock", including bare-faced deceit.

An in/out referendum or a confusing and unclear three way referendum does nothing to advance these objectives.

As illustrated above, this Tory-led government has brought in more EU laws, costing us yet more money. And I haven't even bothered to mention the bail-out cash that has wiped out any savings that the Coalition was claiming to make this year.

So, if nothing else, a referendum will clarify whether the British people—you know, the ones who supposedly have the power in a democracy—agree with you or not. I'm guessing—as I wrote yesterday—that the answer will be that they don't.

That's evidently what Call Me Dave thinks anyway.

So, what other stonkingly good reasons have Tory central office got for remaining within the EU...?

The value of the EU Single Market to the UK.
The Single Market is vital to the UK’s prosperity:

• The EU gives UK business access to the world’s largest market.

So? We could still leave the EU and access the Single Market: you have you heard of EFTA, I take it?

• European markets account for half of the UK’s trade and foreign investments, providingaround 3.5 million jobs.


• In the year to July 2011 the total value of the UK’s trade in goods exported tothe EU was £92.7 billion. (HMRC, UK trade info, 1 July 2011, link), compared to £77.4 billion for exports to countries outside the EU (HMRC, UK trade info, 9 September 2011, link).


• Around 3.5 million jobs in theUK are linked to the export of goods and services to the EU (BIS, The UK and the Single Market: Trade and Investment Analytical Papers 4, 2011).

Once again, I say "so what?" There are other ways of accessing this market: ways that do not require all of us to submit to EU regulations.

And that is a big point: yes, should we leave, companies that trade with the EU would have to abide by EU Regulations. But companies that do not would not have to.

And 80% of our trade is internal. In other words, we unnecessarily load 100% of our businesses with oodles of bureaucratic red tape for the sake of 10% of our trade.

That's insane. And massively expensive.

It's difficult to tell quite how expensive, but an Open Europe report [PDF] estimated that complying with EU regulations cost some £124 billion between 1998 and 2009—with the cost being £32.8 billion in 2009 alone. A 2004 Civitas report [PDF] put the cost at somewhere between £5 billion and £20 billion every year.

The same report attempted to assess the cost of EU membership to Britain in toto and concluded that...

Overall, the net cost of remaining in the EU ranges from the rock-bottom estimate of £15 billion to the ‘most likely’ of £40 billion.

And that cost is for every, single year that we remain a part of this nightmarish and undemocratic institution. Furthermore [emphasis mine]...

The author questions whether it is wise to link our fortunes to a region of the world with a poor record of economic growth and whose share of both world markets and GDP is destined to fall. Even the European Commission takes a gloomy view of the EU’s prospects.17 In its December 2002 review it forecast a 44 per cent decline in the EU-15 share of global GDP from 18 per cent in 2000 to ten per cent in 2050. In 2050, as in 1950 and 2000, the three most populous countries in the world are likely to be India (1.6 billion), China (1.5 billion) and the USA (0.4 billion). The working-age population of the EU, even after its current enlargement to 25 members, is projected to decline by 20 per cent to 30 per cent by 2050; whereas the working-age popula- tion of the USA is expected to increase by nearly one-third.

In 2006, the Bruges Group came up with a cost (for that year) of some £52 billion, and a total of £200 billion since 1973—simple maths will show that the costs over the years have increased at an alarming rate.

The economist Patrick Minford, also in 2006, concluded leaving the EU would give a boost to the British economy of some 2.5% (roughly £45 billion at that time).

And Strange Stuff pulled together a number of different sources when he wrote this pithy little number (also in 2006).

However the EU also prevents the UK from many potentially good opportunities. Such as in 2003 when

a Bill was introduced in the Senate that would have created a free-trade agreement between the two countries. Alas, Blair had to decline this, shamefacedly (I’d like to think) having to point out that this country had no right to negotiate international trade agreements.

Free trade with the USA is not the only area that Britain could have been trying for, free trade agreements with fast growing Brazil, India, or China might have been possible where we not in the EU. Or Africa, allowing us cheaper food, and the African nations a way to build up their economies. But instead Britain is shackling to the slowly sinking states of old Europe and is impoverishing Africa thanks to the EU's CAP.

Estimating the costs of these lost opportunities can lead to total figures such for the cost of being in the EU that are truly horrendous.

when one adds on the costs described earlier to the opportunity costs, the current recurring annual net cost to the UK of EU membership is ten percent of GDP, or approximately £100 billion per year at present levels of UK GDP.

this from a newsletter in 2004 [PDF], so the numbers will probably have gone up since then. That rather makes the 20 billion that Mr Hague claims that the UK gets from the common market seem rather insignificant.

Really ramping up the stakes, in 2009, was a TPA-endorsed book—The Great European Rip-off: How the Corrupt, Wasteful EU is Taking Control of Our Lives.
In the book, the authors estimate that the total cost of the EU to European taxpayers [PDF] is...

... around €2,460 (£1,968) per citizen, €1,219 (£975) billion per year.

That is a staggering amount of money (almost enough to bail the continent out of the current crisis!).

Significantly, no government has ever published—or, as far as we are aware, even undertaken—a cost-benefit analysis of Britain's membership of the EU: one has to wonder why not if, as they claim, the benefits are so evident...?

The conclusion can only be that, in fact, the costs far outweigh the benefits.

Yes: we all know that leaving the EU will not automatically reduce these costs significantly—a great deal of legislation would have to be unpicked, etc. However, what is absolutely the case is that these costs cannot be reduced whilst we remain within the European Union.

Anyway, the rest of the briefing paper expands on the previous wank so I won't fisk all 12 pages. What is very clear, however, is that if the famous referendum lock is shown to be ineffective, smoke and mirrors bullshit then CCHQ's entire defence comes crashing down.

The only vaguely interesting things are a couple of selections from the Hostile Questions section.

Q: Why are you imposing a three line whip?
The 2010 manifesto, on which Conservative MPs were elected, did not advocate withdrawal from Europeor an in/out referendum. It is not Conservative Party policy.

Similarly, the Conservatives are clear that we should bring back powers from Brussels to Britain so what we need is a Conservative majority government, not an in out referendum or a confusing three way referendum.

This is, of course, the expected bollocks—bolstered by an entire section on how evil Labour are on this matter (hardly relevant since all three main parties seem to be aligned on this issue).

Q: Why won’t you let the British people have their say?
The British people should have their say on any further transfers of power from Britain to Brussels. That’s why this Government has introduced a referendum lock that guarantees for the first time ever the British people a referendum in these circumstances.

See?—I told you: this referendum lock is the crux of all answers on this topic. It features even more prominently than the economic reasons for, I'd suggest, the very reasons that I outlined above.

An in/out referendum would be a false choice: it wouldn’t give a choice to the mainstream of British opinion who want to be in Europe, not run by Europe and want to see powers brought back. We all agree on that and, to be fair, the motion tries to deal with that.

Riiight. So, an in/out referendum wouldn't cut it but this one would.

An in/out referendum wouldn't give a choice to "the mainstream"; but this isn't a plain in/out referendum—there is a third option. And option, in fact, that would allow "the mainstream" to make their choice known.

But a three-way referendum would be so confusing and unclear three way choice it’s very hard to see how it would resolve anything.

Translation: you, the British people, are so stupid that you cannot understand the three simple options open to you. I see.

So, whilst the British people are, apparently, clever enough to vote for the Conservatives—and for the result to be, er, legitimate enough for those same Conservatives to deny us a say—on a whole raft of issues, they cannot deal with picking one of three clear choices.

Riiiight.

Oh! Oh, though! I bet you can't guess what the solution would be...

If we want tosee powers brought back from Brussels the answer is a majority Conservative Government.

Gosh, that was a surprise, eh? Were you surprised?—I know I was.

Not.

Oh, and there is one outright lie in the document: can you spot it...?

Q: What concessions do you think we should seek from Europe in return for the closer integrationthat will occur as a result of the Eurozone crisis?
We want to see a prosperous Eurozone. Forty per cent of our trade is with the Eurozone so it is strongly in our own national interest to support Eurozone countries in dealing with their problems.

Did you spot it? Yes, that's right: 40% of our trade is not done with the Eurozone at all. The figure is—and I cannot stress this strongly enough—no more than 10%. In fact, here is your humble Devil's quick breakdown of trade facts...

• Britain's internal trade: 80%


• Britain's trade externally: 100%-80% = 20%


• Britain's trade with the world, excluding the EU: 10%


• Britain's trade with the EU: 10%


• Britain's trade with the Eurozone: 40% of 20% = 8%


• 10% of current GDP is somewhere in the region of £120 billion

I hope that's clear enough for everyone. Perhaps even a Conservative MP might actually be able to get them into what passes for a brain—though I doubt it.

The whole briefing document makes one thing abundantly clear (just in case you hadn't got it already): these fuckers hold us in total contempt. And nothing will change until we rise up and hang them all from the lamp-posts...

Herman Cain

Counting Cats—who's brief assessment is pretty good—has alerted me to the existence of GOP Presidential Candidate Herman Cain.

Whilst I don't agree with everything he says (the god-bothering in particular)—and nor am I sure that he can deliver what he promises (the President has, in fact, very little power)—I think that it would be incredible if one of our politicians came out with something like this...

Vision for Economic Growth

• The natural state of our economy is prosperity. Freedom ensures that.
• We must get the government off our backs, out of our pockets and out of our way in order to return to prosperity.
• Policy uncertainty is killing the economy.

Economic Guiding Principles

1. Production drives the economy, not spending.
   • We can not spend our way to prosperity.
   • Government spending IS taxation.
   • Government spending is like taking a bucket of water from the deep end of the pool, pouring it in the shallow end. Then they HOPE that the water level will CHANGE.
2. Risk taking drives growth.
   • Business formation and job creation are dependent on entrepreneurs taking risks.
   • Investors who fund those entrepreneurs likewise take risks.
3. Measurements must be dependable.
   • A dollar must always be a dollar just as an hour is always 60 minutes.
   • Sound money is crucial for prosperity.

We Must Unite Not Divide

• When one party seeks to spend so that the other party must focus on cutting, we must unite around economic growth.
• Unite all tax payers, don’t divide them into “income” tax payers vs. “payroll” tax payers.
• Unite those wanting to eliminate deductions with those seeking lower rates.
• As a first step, unite the “Flat-Taxers” with the “Fair-Taxers”

Economic Growth is the Key

• This is the worst recovery since the Depression.
• If the President’s goal was to tie for last place with the previous worst recovery, he failed by 6 million jobs.
• If we had a typical recovery, 13 million more Americans would be employed today.
• That means more tax revenue, less government spending and 13 million less people opposed to reasonable spending cuts.
• The Super Committee must deliver a robust growth solution.
• America can’t wait for 2012, we need growth NOW

Phase 1—9-9-9

• Current circumstances call for bolder action.
• The Phase 1 Enhanced Plan incorporates the features of Phase One and gets us a step closer to Phase two.
• I call on the Super Committee to pass the Phase 1 Enhanced Plan along with their spending cut package.
• The Phase 1 Enhanced Plan unites Flat Tax supporters with Fair tax supporters.
• Achieves the broadest possible tax base along with the lowest possible rate of 9%.
• It ends the Payroll Tax completely – a permanent holiday!
• Zero capital gains tax
• Ends the Death Tax.
• Eliminates double taxation of dividends
• Business Flat Tax—9%
  • Gross income less all investments, all purchases from other businesses and all dividends paid to shareholders.
  • Empowerment Zones will offer additional deductions for payroll employed in the zone.
• Individual Flat Tax—9%.
  • Gross income less charitable deductions.
  • Empowerment Zones will offer additional deductions for those living and/or working in the zone.
  
  
• National Sales Tax—9%.
• This gets the Fair Tax off the sidelines and into the game.

Phase 2—The Fair Tax

• Amidst a backdrop of the economic boom created by the Phase 1 Enhanced Plan, I will begin the process of educating the American people on the benefits of continuing the next step to the Fair Tax.
• The Fair Tax would ultimately replace individual and corporate income taxes.
• It would make it possible to end the IRS as we know it.
• The Fair Tax makes our exported goods and services the most competitively internationally than any other tax system.

Can you imagine Potato Cameron or any of his merry men coming out with anything like that? No—because they just had their chance at the Conservative Party Conference and they absolutely failed to do so.

Instead, Cameron pushed the virtues of the nationalised monopoly NHS and other centrist—or outright socialist—shit. And, whilst they promised new jobs, they absolutely failed to point out that the state cannot generate wealth or valuable jobs.

It would be funny if it wasn't so pathetic—and serious.

So fuck the Conservatives—and good luck to Herman Cain...!

Trading in 2011

CityUnslicker has had a shocking trading year as, like me, he had large amounts of money in commodities—an area which has been absolutely hammered over the last year. Luckily, I deal in smaller sums than he does, and since I only started relatively recently, my stocks were higher to start with.

However, just to emphasise the downturn, here are some of my stats and stocks for you...

Company	Industry	Purchase Date	Purchase (p)	Current (p)	%
Ascent Resources (AST)	Oil & Gas Exploration	09/2010	4.35	2.99	-31.26%
Ascent Resources (AST)	Oil & Gas Exploration	02/2011	6.47	2.99	-53.75%
Xcite Energy (XEL)	Oil & Gas Exploration	12/10	258.9	129.71	-49.9%
Iomart Group (IOM)	Web Cloud Hosting Services	07/2011	1.05	1.08	+2.86%
ITM Power (AST)	Hydrogen Power Solutions	07/2011	4.56	3.35	-26.58%
Gulf Keystone Petroleum	Oil & Gas Exploration	10/11	133.82	144.75	+8.16%

Obviously, I am massively down on the beginning of this year. On the other hand, I have been ramping up my investments in the last six months: as such, I am taking advantage of prices that I consider to be extraordinarily low.

As always, the Very British Dude is my trader: I should point out, given my current portfolio, that he only performs my trades—in my case, he does not offer any official advice and nor is he responsible for my decisions or stock choices. The Dude is, however, very prompt and responsive and I'd recommend his services.

In other news, the only shares that have consistently climbed are those I hold in the business that I work for: add those in and I massively in profit...!

"Credit easing" explained...

... by The Daily Mash.

Osborne's offer of credit to thousands of small businesses will make Britain the first conservative-led communist state when the loans are inevitably defaulted and the government ends up owning and running everything.

Here's a tip, business peeps: if you absolutely need a loan, then you aren't a viable business.

Statement of the bleeding' obvious

Today's statement of the bleedin' obvious comes from the Low Pay Commission...

The minimum wage may be pricing young people out of work because employers are finding it too expensive to give them their first job, Government pay advisers have said.

Firms may be reluctant to create jobs by recruiting inexperienced staff because they are put off by the increased wage bill, the Low Pay Commission has suggested.

No, really? You surprise me.

You mean, if you make employing people more expensive, then you will have fewer employees? Tell me, o sages of the Low Pay Commission, what are your views on increasing employers' NICs?

Oh, they might slightly contribute to unemployment too? Genius! Who'da thunk it...?

FFS.

UPDATE: Timmy elaborates on why the Low Pay Commission might be understanding this now.

What is so annoying about all this is that we told you so you fucking fools. We said that if you bring a min wage, one which continually rises above general wage inflation, then you will get to a point where it does severely crimp employment prospects. And it will be first evident among the young, untrained and untried.

So, happy now that it’s happened?

The truth is, the minimum wage is almost certainly too high already. Worthwhile Canadian (search for it yourself!) did some work a couple of years back showing that as long as the min wage was below 40% of average (I assume, from memory, mean) earnings, then the unemployment effect was minimal. When it goes over 50%, then the effects become more substantial.

Mean hourly earnings for men are now 16.25 an hour. For women 13.73 an hour (ASHE 2010).

Part time they’re 12.06 and 10.64 an hour.

The minimum wage at 6.08 an hour (the 2011 number) isn’t affecting full time employment all that much and it’s just getting into the range where it might start having substantial effects on part time employment. So far so good.

But, the youth rate is £4.98 an hour. And what are mean wage rates for this group? Again from ASHE: for 16-18 year olds, £4.84 and for 18-21 year olds, £7.62 (both male).

So, in that 18-21 year group, we’ve a minimum wage which is 65% of the mean wage. Well into our territory where we expect to see substantial employment effects. For 16-18 year olds, it’s 3.68……76%.

Are we seeing substantial emplouyment effects? Well, certainly, all the awailin’ about NEETS seems to show that we are.

And you know what kiddies? We fucking told you so.

Official figures last month showed that almost 1 million of the 2.5 million people officially counted as unemployed in Britain are aged between 16 and 24.

As the man said, we did tell you so.

Yet more fantasy...

George Osborne: prat. [Yes, yes, I know—but he's not even worth a decent swearword.]

Yesterday, it was reported that little Georgie Osborne was pledging to "inject unspent money into capital projects".

The chancellor of the exchequer is working on pooling unspent money from across Whitehall to inject into extra capital projects to kickstart the economy, the Guardian has learned.

George Osborne has earmarked spending that Whitehall departments have failed to meet—further to a £500m pot already created by his Lib Dem colleagues—which will be redirected to "really useful projects, capital R, capital U," one Conservative cabinet minister told the Guardian.

Really? Well, tonight, the BBC has a rather different story to tell...

A council tax freeze in England will be extended to 2012/13 under plans to be unveiled by the chancellor on Monday.

The £805m move will be paid for by a Whitehall "underspend", aides said.

The government cannot force councils to freeze bills—but it is offering to give those which limit spending rises to 2.5% the money they need.

Wow. Thank goodness for that "underspend", eh?

But I thought that it was going to be spent on "capital projects"? Funnelling more money to councils in order to shore up their expenditure is not, by any definition, "capital projects".

In any case, as I pointed out somewhat vociferously yesterday, there is no fucking "underspend".

What "unspent money", George? Your Coalition has borrowed more money in the last year than any government in history; the structural deficit is bigger than ever, and you have reduced this country's debt by precisely bugger all.

Approximately £180 billion of the cash that you are burning through this year is money that you didn't have in the first place, you fucking cock.

Repeat after me, George: there is no "underspend", because you are overspending by about £500 million every damn day.

As it happens, I would rather that Georgie used the money to avert tax rises than squander it on a pointless high-speed rail link or a fucking statue of a giant ice-cream or something, but even so...

It's only a matter of time

On the 25th of September, Dr Eamonn Butler wrote the following over at the ASI blog...

So, the eurozone and the IMF are putting together a £1.7 trillion fund to save Greece (and for that matter Portugal and Ireland) and stave off a default. Right?

Wrong. The whole purpose of the £1.7 trillion is not to give aid and comfort to Greece. It is designed to give aid and comfort to the European banks who are stupid enough to be still holding Greek debt when Greece is obviously bust. It is intended to allow—and indeed it will hasten—the inevitable default of a country [Greece] that is overspent, over borrowed, that cannot pay its way and shows no sign of putting its house in order—not one single member of its bloated and lazy bureaucracy has been let go, not one single item in the Greek government's bizarre portfolio of nationalised firms has been privatised.

And yesterday morning, I wrote...

... throughout the Western world, both states and the banks that have bought their bonds are, effectively, bankrupt.

Not only this, but the various governments do not even seem to understand that they are bankrupt, and are continuing to spend far more than their income; their one concession to the problem being to mutter futilely about cutting a few billion—out of structural deficits of many tens of billions—at some point in the next decade.

Even in Greece, public sector workers strike and riot as though their government had any alternative to the—frankly risible—cuts to public spending.

And tonight, I am greeted by this wonderful little nugget on the BBC website...

Greece has said its budget deficit will be cut in 2011 and 2012 but will still miss targets set by the EU and IMF.
...

The figures come as inspectors from the IMF, EU and European Central Bank are in Athens to decide whether Greece should get a key bail-out instalment.

Greece needs the 8bn euros (£6.9bn; $10.9bn) instalment to avoid going bankrupt next month.

Bankruptcy would put severe pressure on the eurozone, damage European bank finances and possibly have a serious knock-on effect on the world economy.

These politicians simply aren't taking this seriously, are they?

There is, I think, not one single Western economy that is not up to its eyeballs in debt: the vast majority of them are still running colossal, unaffordable deficits that are adding—every minute of every day—to that eye-wateringly massive pile.

And yet these politicos and technocrats keep throwing these vast sums of money about with the air of a millionaire lending a tenner to his mate—as though these vast sums of money were peanuts in the grand scheme of things. Not only are they not peanuts, they are largely illusory—there is no value behind the paper anymore.

In the meantime, the banks keep on buying the government debt hoping that—when the inevitable crash comes—the governments will not allow their buddies, the banks, to fail. In the end, there will be little choice.

Ultimately, the European Central Bank can print as much money as it needs: but, when it does so, the amounts required will be so mind-bendly massive that hyper-inflation will be the inevitable result.

The Western governments—and, just as importantly, their peoples—need to open their eyes and realise that this cannot continue: they need to understand a very simple, blindingly obvious fact...

The social democratic model—funded, as it is, on ever-increasing state spending on special interest groups using fantasy money—is bust. Kaput. Gone. Fucked beyond all measure.

And they need to realise it quickly. Because the impending crash is going to be bad enough: but the longer it goes on, the worse it will be...

Of cabbages and kings...

As is so often the case, an EUReferendum post sums up a great deal of the problem in this country (indeed, with the whole social democratic system).

It goes without saying, though, that it is not safe to give local councils more power until we have more power over those councils. And that means money. We must control the purse strings … the essence of the Referism concept. As long as we have "masters" who can decide year-year-on-year how much we will pay them, and our choice is only how we pay them, there can be no democracy.

As long-time readers will know, your humble Devil is not a fan of democracy as an endgame: liberty is the point—democracy is simply the best way that we have so far found to maintain freedom for the longest possible time. However, a proper democratic process—where the people actually have the power—is a half-decent goal.

And, as Richard has pointed out repeatedly, the only way that we can gain power is, in fact, to control the cash. Because as long as our lords and masters control the money, they control us: not simply because they demand said monies, but because it gives them limitless recourse to the law.

(As I am coming to believe, one of the biggest stumbling block to any kind of proper libertarian society is the lack of access to the law. But that is a post for later.)

When I endorsed EUReferendum's Referism concept, a great many commenters envinced a belief that people would simply got themselves more and more money—that, in effect, no savings would be made and we would end up in a situation just as bad (or worse) then the current one.

It is perhaps instructive, then, to find the time to link to a post that EUReferendum published a few days afterwards—pointing out that such referenda on taxation have been tried before.

From the school of nothing new under the sun, a reader points out that, in February 2001, Labour-controlled Bristol City Council held a referendum on its Council Tax, asking voters whether they preferred to increase it by two, four or six percent, or to freeze it at then current levels.

Much to the chagrin of the Council, which had expected otherwise, more than half of the voters opted for a freeze. Sentiment was such that, had a reduction been on offer, the indications are that this would have been the preferred choice.

And it was also tried by Croydon...

Nor was Bristol on its own. The Council was just beaten to the punch by the London Borough of Croydon, which on 14 February 2001 asked its 235,000 registered electors to decide whether Council Tax should be increased by two percent (in real terms, an effective freeze), 3.5 percent, or five percent. Council tenants also voted on whether their rents should be increased.

Again to the chagrin of the Council, 56 percent of the voters opted for the lowest possible rise in Council Tax. A total of 80,383 voted, a 34.2 percent turnout. Thirty-two percent voted for the 3.5 percent increase and a mere five percent went for the five percent hike.
...

Croydon was to repeat the experiment the following year, with 74 percent of the taxpayers who voted opting for the lowest rise on offer, at 3.65 percent, on a 35 percent turnout.

Although it was Milton Keynes that had started this trend...

Interestingly, this experiment in direct democracy had started in 1999, when Milton Keynes had put to its voters the choice of three levels of increase, ranging from five percent, 9.8 percent and 15 percent.

Residents were able to vote by post or by phone for their chosen option. A 9.8 percent rise would keep core spending at the same level, while the five percent increase would have meant cuts in the core budget and a 15 percent increase would have provided extra revenue). Forty-six percent of those who voted opted for the 9.8 percent rise, thirty percent for the five percent increase and twenty-four percent for the 15 percent hike. The turnout was 45 percent.

Council leader Kevin Wilson told the BBC he was "delighted" by the result. "The referendum gave the people an opportunity to be masters rather than servants," he added, declaring that the referendum had succeeded in its aim of reconnecting people with local government and gave public backing for council tax rises.

Buoyed by the result the following year, Bristol announced that the public would get a chance to vote on their council tax levels, "under plans drawn up to tackle voter apathy". The scheme had the backing of government ministers and, if the public had responded "positively", the plan was to repeat referendums across the country. Clearly, the response was not "positive" enough.

Clearly.

Although, clearly (for your humble Devil, at least), when people are given the choice, they vote to pay less money. And they do so at turn-out levels that are more respectable than the vast majority of elections in this country.

Despite (or, possibly, because of) the carping of the left-wing media.

At the time, The Independent was to lament that, "in a victory for the maxim that people vote with their wallets, the results showed few people in favour of extra spending". "Voters of Bristol pick school cuts over taxes", it headlined. The Bristol experiment was not repeated by Labour.

But did the Coalition not promise something similar...?

As of July last year Communities Secretary Eric Pickles has declared that by 2012, he wants people to be able to reject Council Tax levels "if they exceed a ceiling agreed annually by MPs", by voting on them in referendums.

This is based on a promise made in 2007. Pickles calls the plan a "radical extension of direct democracy". It is not. Instead, it is a considerably watered-down version of the earlier referendums – which themselves did not allow for an outright veto. And, needless to say, there is absolutely no suggestion that referendums should apply to central government spending.

The simple fact is that when people are given the chance to vote solely on the levels of taxation—rather than a whole collection of other policies and tribal dog-whistles—they vote to pay less.

As such, putting the Finance Bill to the electorate every year—not just Parliament—would be likely to drive taxes down considerably. Coupled with a legally binding restrictions on borrowing levels, this policy would force the government to form its spending plans depending on how much taxpayers let it raise.

Such fiscal restraint would force governments to spend less money more wisely. And lower taxes would lead to higher growth.

What's not to like...?