Thursday, 27 February 2014

Hankering after a Better Yesterday

When I was 19, getting pissed and partying, with school receding into distant memory, and university finals  still a long way away, hangovers were something that happened to other people, and I was made of rubber and kevlar. I could run the 2.4km of the British Army's basic fitness test in a little under 9 minutes. I had enough money from loans, parental indulgence, holiday jobs and the TA to do more or less whatever I wanted. I had no responsibilities and the body as one ex-girlfriend said "of a Greek God". Skiing seemed to be free - often provided by the Army, when it wasn't by parents, and when you're a 19 year-old officer cadet, chalet girls throw themselves at you in Dick's T Bar. life couldn't get any better.

Couldn't and didn't.

Life is a little more complicated now. Money vanishes, however quickly I earn it. I have little free time, and when I do, I am tired. I cannot party till 4 am, then go play rugby, which when I get trampled by a 20-stone prop, hurts more than I seem to remember. I no longer bounce. Shoulders have been dislocated many times. Knees ache. I wheeze round that same fitness test in around 12 minutes (which is a big, fat, freddy FAIL, even if I can do more press-ups than back then). People rely on me. I do have enough money, now, but it's taken a decade to get there. If I look like a God, it's Buddah. Or maybe one of the bad ones from the Disc World.

The fact is, for most people, the best time of your life is 15-25.

The reason most people think "life was better back in the day" is because for them, (and me and everyone else over 35) it was. People fondly imagine a better world, but its just that you felt less pain and responsibility as a teenager. No-one sets off brightly into the world wanting to sit at a desk and talk to people on the phone all day. No-one tells you the pressure of the mortgage, bills, the tax return and all the shit you deal with as an adult. The ability to have a fucking Mars bar at the supermarket checkout whenever you want is scant consolation for all the rest of the crap. Not only are people reliant on you, the fact you're not PM, decorated war hero, racing driver, star of stage and screen, or billionaire entrepreneur you set out to be, is a itch at the back of your mind. Why didn't I get there?

Yet, on any measurable metric, the world is better than it was in the 70's and 80's. People live longer, there's less racsim, the world is not threatened by global thermonuclear war, crime is down, cars are better. People who wear flares or Euro-Fluro weightlifting pants are rightly laughed at. Yet people still hanker after that better yesterday they remembered. Because they were young and confident. And now they're (we're) washed up failures.

This is why I despise UKIP. This hankering for a better yesterday is futile. Bringing back grammar schools won't make the baby-boomer's lives pan out any better than it did. UKIP is about fetishising a few tokenistic policies, and blaming Eurocrats and immigrants for the fact that John from Solihull is now a small-town accountant, not a premiership footballer. It's not David Cameron's fault you're no longer banging 19 year-old lovelies, any more than Gerhardt Shroeder is responsible for your pay-packet.

The UK isn't "full"
The EU isn't "ripping us off"
"LibLabCon" aren't "all the same"
It doesn't cost £50m per day. That's a GROSS figure you dribbling morons.
There is no "political elite", though there are professional politicians, this isn't the same thing.
David Cameron isn't "a closet Europhile"
There's no conspiracy.

You're just an angry twat who's stopped listening because he doesn't like the answer, and can't tell the difference between personal and national decline. "Common sense" you say? That's just what stupid people do instead of thinking.

It's just Ano-Domini. We all grew up. All except UKIPpers who're still stamping their feet, blaming whoever's nearest for their own inadequacies. And boy, are there a lot of those.

UKIP: A contemptible party of by and for stupid, angry people.

Thursday, 20 February 2014

Won't someone Think of the Children?

Kathy Gyngell, Research Fellow and bansturbationist at the centre for policy studies is worried:

the people who perturb me are middle-aged political converts to this ‘cause’ – Nick Clegg, Nigel Farage, Daniel Hannan and Norman Fowler. Whether intentionally or not, they have aligned themselves in a culture war which pits the liberal against traditionalist, cosmopolitan against parochial and old against young. This is what drugs’ legalisation is about: a war over fundamental values. It is not a battle about basic freedoms – far from it. Drugs enslave
Some of the harder drugs are extraordinarily habit-forming. But society copes with alcohol easily enough. It will cope with a bit of pot.
I doubt whether any of these politicians are or were ‘recreational’ drug users, let alone former addicts; or that they’d wish drugs on their children. Yet they’ve been persuaded that a hypothetical taxed and regulated system – one they’ve been told would cut police and prison costs, undercut criminal gangs and end the war on drugs to boot – would sanitise drug use. It wouldn’t. It would normalise it
Why does she doubt these politicians smoked pot at university? I know of only a handful of people, mostly military obsessed or weird, who never tried. Certainly pot use, in certain circles is already "normal" and it causes almost no problems. Cocaine use is on the rise, again with very little social effect. It's alcohol which causes the blood and vomit on the street.
But like the pro-legalising think tank head I sat next to at dinner recently, I suspect Mr. Hannan’s grasp of the drug problem is pretty limited. My dinner companion typically had no idea how marginal an activity drug use is compared with smoking and drinking – living as he does amongst London’s metropolitan liberals.
Few people have the criminal contacts to get hold of weed, which is easy for the police to interdict (it smells) and therefore getting scarcer. People are instead taking cocaine - easy to conceal, high margin. With the rise of mobile phones it's a delivery business.
He was surprised that fewer than three per cent of adults smoke a spliff on any sort of regular basis compared with the 20 per cent who smoke daily and the overwhelming majority who regularly drink alcohol. He had no idea that cannabis use overall had declined in the UK, and so markedly amongst adolescents – 30 per cent in the last 15 years
Of course cannabis use has fallen. As has LSD - they're hard to get. People are moving onto cocaine, whose use is rising.
For today’s young people are more, not less, responsible than before, they drink less, use drugs less, commit fewer crimes and volunteer more as a recent Demos report shows. In these newly competitive times, the last thing this generation need is a drugs legalising experiment foisted on them by ageing libertarians.
Yes they are much more responsible. They're also quite capable of lying to researchers about their drug use, and making their own decisions. NOTHING I have seen suggests to me that pot causes problems. It may exacerbate problems already there, but no more so than does alcohol. The link between schizophrenia and cannabis use is, according to all literature not published by a government-sponsored "education" campaign, suggests a co-morbidity, not a causal relationship, however comforting it is for parents of sufferers to believe it's the pot that "caused" the problem. People with mental health problems take all and any drugs in greater volume, whether legal or illegal, stimulant or depressive.
Anyway, there already is one – in Colorado. It does not look good. According to Dr. Christian Thurstone, the director of one of Colorado’s largest youth substance-abuse treatment clinics, regular high school drug use has leaped from 19 per cent to 30 per cent since Colorado legalized medical marijuana in 2009 for adults
So under a legalised system, the proportion smoking rose to that which it was in the UK, before pot got hard to come by? I'm SHOCKED, that people like to get high. SHOCKED. Drug warriors, like prohibitionists like to present it as an a-priori benefit when drug use goes down. Furthermore, there's the tired assumption that the pot available now is stronger and therefore worse, than that which our parents smoked (True in the USAbut less so in Europe) and this is mainly down to freshness - our parents smoked pot grown in Morocco (or mexico, if American). Our kids smoke pot hydroponically forced in someone's basement.

I simply don't accept that it's necessarily  bad for people to get high/pissed/stoned once in a while.
Drugs enslave
That's is probably true of Heroin. But not of pot. Pot is likely to be a substitute for getting smashed on alcohol for young people. Which drug has the worse social effects? Most of the harms associated with drug use are due to Heroin and (in the USA meth and crack), which is highly addictive, lethal if the dose is wrong and with catastrophic health effects. No-one sets out to be a junkie. They probably start with Pot. When pot is hard to come by, their dealer suggests cocaine (which is easier to get these days). When there's no cocaine, a dealer might suggest heroin - smoking at first, before finally injecting. The slippery slope exists, for vulnerable people at least.

Why would a dealer do such a thing?

Because he's dealing to fund his own habit.

What the heroin market is at present is a highly effective pyramid marketing scheme. Why do people take heroin? Because they can't get medical grade diamorphine (which has fewer health effects, no track-lines, infections, and crap injected into viens). A legal supply chain (not decriminalisation) would break the hold of the dealer, prevent dealers recruiting users to fund their own habit and close down the heroin marketing pyramid.

The number of problem heroin addicts rocketed after the misuse of drugs act. Before the misuse of drugs act, most people became addicted to opiates in hospital. It was known as "the soldiers' disease".

Legalised drugs would mean more people taking pot and cocaine, and fewer people drinking to excess and injecting heroin. I can live with that.

Monday, 17 February 2014

McJobs, long-term unemployment and the Minimum Wage

Labour love to decry insecure jobs on low wages, of which flipping burgers for McDonalds is the archetype. The insecurity of self-employment, contracting or "zero-hours contracts" (what I used to call "temping") is another.

It's terrible, the lament goes, these jobs don't pay a living wage...

There are some truths buried in the mountain of cant written on the subject. Some, perhaps even most people in "zero hours" jobs, or flipping burgers for McDonalds would rather be doing something else. Many self-employed are under-utilised, and underpaid, at least at first. This is a small truth, but a big error.

Self-employment is for example largely a self-selecting sample - those who'd rather be in another job, will continue to look for one while contracting or working odd-jobs. Of these, those who can, will get another job. Those who can't will continue to struggle on. This leaves self-employment being mostly those who can't cope with a job, and those who don't want to work for someone else. The middle-ranking self-employed don't exist. They've got jobs. Temping is ideal for people (recent arts graduates for example) who don't know what they want to do for a living. And a living wage isn't far from the minimum wage, before tax. Why are we taxing the low paid?

Nor is it  the job-market's attitude to the unemployed. If you've been out of work for more than 6 months your chances of a call-back plummet. Again the lefties would prefer to blame the employer rather than look at why this is the case. Human behaviour is flexible, and people get accustomed to unemployment. So people who've been on the dole for 6 months are more likely to be absent, call in "sick". The HABIT of work is a qualification in itself. Please note "more likely", not "all of them will". I am NOT saying the unemployed are lazy and feckless. I am simply describing how the world IS.

Another common lament is "there were 700 applications for every vacancy". But if 600 of those are from people who've been out of work for 6 months or more, employers will simply file them in the round filing cabinet, and focus on the remaining 100 who will be more likely to turn up on their second day. Effectively what this means is the unemployed are not in the workforce, even though they may not have yet dropped out of the statistics into "economically inactive". Thus the labour force is shrunk, and the bargaining power of those still in work goes up. This is, broadly the mechanism by which the European social model has ensured crippling levels of youth unemployment and a total inequality between protected, hard-to-fire insiders who can strike at will for better pay, and a youth population who will NEVER enjoy those privileges if they ever get a job at all.

The problem is therefore a dearth of jobs which can take the unemployed and give them the evidence of the habit of work,which might make them attractive to potential employers. McDonalds does this. Zero Hours contracts enable zero-risk hiring to the same end. An employer seeing a school leaver with a year's burger-flipping might think "this guy wants to work, and now wants to get on" and offer on-the-job training. The same employer might see a graduate who's been "looking for work" for a year as too proud and lazy to work, who'll jump ship as soon as the city starts hiring again.

The left often lament job insecurity as a terrible thing. It is. But this is a small truth concealing a big error. First  Far, far, far worse than job insecurity is unemployment. I know of no man used to earning a wage whose relationship with wives and children survived long-term unemployment, intact. Without the means to provide men (especially men; this is less true of women) are rendered worthless not just in the eyes of their wives and children, but increasingly so in their own. Unemployment has catastrophic mental health implications. Unemployed people, and men in particular, become suddenly very much more likely to commit suicide.

Thanks to the minimum wage and job protection legislation, the kind of insecure, temporary jobs which require minimal training and make use of a casual workforce are simply not economic any more. Thanks to the bureaucracy of claiming benefits, no long-term unemployed person would reasonably take seasonal work which is why vegetable-picking is so often done by foreigners.

This is not such a problem during a long expansion. People get jobs. The minimum wage was introduced during a long expansion, has been untested in tough times. But it appears to have denied many young, inexperienced, and unlucky people who have a six-month gap on their CVs a chance of work, not just now, but ever. Many of these then handily (for Government statistics) drop out of the workforce altogether. Workfare, zero hours, low minimum wages, no fault dismissals are all decried by the left, and are all means to reduce the risk of hiring. Statutory job protection is not the same as job security; ultimately the best protection for an employee is a deep and liquid job market.

Lefties prefer to ascribe malice to people who favour supply-side reform to combat unemployment. I am not encouraging a "race to the bottom" for the benefit of "my rich banker mates and shareholders". I just think the burden of the minimum wage is borne by those who will never get a job.

Do I want to do boring menial work for a pittance. No.

Have I done boring, menial work for a pittance? Yes.

It's cruel to deny people the means to develop their skills. The Job-ladder: everyone's got to start near the bottom. Some start nearer the bottom than others and some never climb very high. But lets not put that bottom step out of reach of anyone.

Thursday, 13 February 2014

Angry Public Sector Workers Shout At Me.

What you have in the comments here, is a circle-jerk of indignation from people who enjoyed public spending (largely paid for by the taxes levied on banks bankers by Labour...) which, when the golden goose was killed, suddenly dried up. The public sector are now having a 2 minute hate against the people, like me and millions of others who pay taxes but don't take much back.

The profit motive is not bad, nor does it lead to worse outcomes than any alternative. Lord save us from the good intentions of public-sector busybodies. CS Lewis put it best:

Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience.

The fact is the profit motive has delivered consumer goods to the masses in plenty only royalty in previous societies could possibly imagine. The profit motive is best at allocating resources to those who can use it most efficiently. The alternative to resources going to the most efficient, is they go to the most powerful. And that is why socialism, in its command-economy, market-hating form tends to lead to an enormous pile of corpses.

But because markets ain't perfect we use taxes to fund that which is necessary, but unprofitable. Dealing with recently released criminals for example. And there is a legitimate argument to be had about we spend on such things. Tories, broadly want to spend less than labour. And especially when there's been a financial crisis, and the shoulders which bore the the burden of paying for the lovely state spending are now smaller, and fewer in number. There is less money, broadly because Labour taxed all it could, during a boom, and wondered why the money dried up suddenly.

Let's get some facts straight
  1. The bank bail-out cost the taxpayer almost nothing.
  2. The big increase in the deficit was caused by a sudden and sustained drop in the tax take as banks suddenly became less profitable or loss-making. Such is the scale of the loss, it will be a decade or more before the tax take from financial services returns to pre-crisis levels.
  3. The mechanism by which 2. results in lower tax-take is NOT avoidance.
The toxic, tribal hate-fest shown in that comment thread is based on shaky foundations. The banking and broader financial services industry has lost over 200,000 jobs or something like 20% of its workforce. The idea the Financial services workers have not suffered or learned from the crisis is ridiculous. There is no comfortable parasitic elite, earning off the poor down-trodden worker. It's been pretty tough for everyone, and pointing at someone's (imagined) pay packet helps no-one.

And by that I mean "look. They have an iPhone, so they can't be poor" as well as "he earns £100k, so what does he know about anything".

Tuesday, 4 February 2014

Academics are Left Wing because...

Chris Bertram is professor of Social and Political Philosophy at Bristol, he tweets as @crookedfootball and blogs at Crooked Timber. In Today's post he argues that "Squeezing the rich is good, even when it raises no money". Essentially his argument boils down to the left's new theory of everything - that inequality is bad.

This may, or may not be the case. But the argument that punishing the wealthy ends up hurting the poor, by shrinking the pie, is not even considered as valid. There are so many near lies, distortions and pure hate for people who do things an academic political philosopher doesn't understand, that the article is worth looking at in more detail.

However, the feature of the discussion I want to write about is the assumption, generally taken as decisive by the commentariat, TV interviews and the like, that if such a tax would raise little or no money then that should count against it decisively. On this view taxes are an unfortunate necessity, required to finance state expenditure and to be minimized whereever possible: a tax that raises no money is therefore pointless, imposing needless pain for no benefit.
The art of taxation wrote Jean Baptiste Colbert, is "maximum pluck for minimum hiss". The top rate of income tax has been set at 40% for a generation. The rich are willing to pay 40% in a way they're not willing to pay 50%. Thus rich people who might have settled in England to do business, settle instead in Spain where the weather's better, or Geneva, or Monaco. At a stroke you've deprived the exchequer of £100,000 because you've asked for another £12k. For very little extra pluck, a 50p rate probably does in the long run, see the economy smaller than it might have been, and causes a great deal of hiss. No-one is better off.
But this view is just plain wrong, for several reasons. First, in a complex society structured by all kinds of institutional rules, the idea that people have full liberal property rights in their pre-tax income is unwarranted. They participate in a co-operative venture with others in society subject to certain conditions, and those conditions include one that part of “their income” already belongs to the wider society, via the state. This point, hated by libertarians, defeats the widespread view that people are having “their money” take off them: it wasn’t theirs to start with. Though I think such an argument, with some caveats, is correct, it is a second and third consideration that I’d want to rely on here.
This view seems dangerously close to the totalitarian view that all your money is the state's except that which they let you keep. This man is a professor of Political philosophy. Be afraid. Be very afraid.
The second consideration is that inequality is deadly for democracy, and for the equal political status of citizens. Because the power and influence high earners derive from their income threatens such status equality, there is a strong public interest in constraining it, even if doing so raises no money at all. It isn’t just that the rich come to own media outlets or that politicians are swayed by their donations to parties, it is also that the prominence their cash gives them gets them listened to and taken seriously by opinion formers. Their experience matters and shapes public policy, that of an unemployed teenager in the North East doesn’t: we need to shift the balance of voice in favour of the unemployed teenager and against the City trader.
Inequality is sometimes "deadly for democracy", because it's often a symptom of extractive political institutions - much of Africa for EG. However that is not the case in the UK. Most people who get rich enough to pay the 45p band are not politically connected. They're just business people. Where there is a problem, it lies in the quangocrats and state apparatchiks walking through revolving doors on huge salaries with apparently no oversight. Even worse, many of these are superannuated, (mostly labour) politicians, conducting a gramscian march through the institutions. I agree here, in the crony capitalist, and quango state, we could do with some pay restraint.

In any case, the UK is not particularly unequal. Remove London, and it's international mega-rich, the UK is a pretty bog standard north-European welfare state whose inequality is relieved by direct transfers at least as much as it is in Germany. I fail to see how chasing the International Mega rich who choose to pay a lot of tax here, makes anyone better off.
Third, income inequality makes life worse for the rest of us in real terms. Economists are supposed to believe that utility (whatever that is) matters intrinsically and money only matters instrumentally. But right-wing economists often seem to forget this as soon as they are asked to comment on tax policy and inequality, arguing as if their theorems apply to cash and not to utility. If we’re dealing in cash terms, then a tax that makes some people worse off and nobody better off looks bad, and looks Pareto inferior. But it isn’t necessarily Pareto inferior if we focus on well-being: making some cash poorer may make some others better off, a Pareto incomparable outcome. Here’s one way how: if those on high incomes have too much, they can outbid the rest of us for goods that are intrinsically in limited supply or where supply can’t be quickly increased.
I see, he wants stuff that a political philospher would once have been able to afford, but can't now. He seems ignorant of the fact that, in general, markets are better at relieving scarcity than making the rich poorer.
If I’m further away from being able to buy a house near to where I work, because house prices are raised in an auction I can’t compete in, then I’m worse off even if my income stays flat. Reducing the purchasing power of the wealthy is therefore good for me (unless I got hold of a house early and can earn windfall gains from the auction). And similarly for many other goods. 
I see. It's the nice big house he can't afford that he's envious of, the poor dear. But house builders cannot respond to demand, because the permits to build are not being issued to cope with population growth. So prices rise. Contrast with Germany, where building is encouraged - house prices haven't risen relative to incomes. This is a market failure which can be laid directly at the door of the state, and particularly, the left's beloved councils. The answer is not to drag down the rich, but to ensure greater supply. And markets do this better than any other mechanism.
Unrestrained income for the wealthy also means that they can commit more of their resources to ensuring that their offspring make it to the top in the next generation, thereby harming the opportunities for the rest of society.
State education is rubbish. That is not the fault of those who can afford to escape it. But the education establishment of which Professor Bertram is part, opposes any market mechanisms which may drive up standards in state education.
I could go on and enumerate more mechanisms whereby squeezing high earners is good, even if it raises no money, but the general point should be clear. It should give Labour reasons to go on the offensive (“class war”); it certainly gives the commentariat reason to stop making their stupid talking point. They won’t, of course.
The real reason for this attitude is that the incomes of political science professors haven't kept up with people like business owners, bankers, corporate lawyers and the like. This is pure envy by members of a profession which feels undervalued. And it demonstrates a profound misunderstanding of who the payers of the top rate of tax are: there are a number of city traders in there, sure, but the majority are business owners, many of whom will have financed their company with a mortgage, risking their house on their business. As business owners, they often have options to pay themselves in a number of ways - dividends, capital returns, income etc... prudent tax-planning is not avoidance, but this is why the 50p doesn't raise as much as left-wing academics, who comprehend nothing but PAYE wages, think it should.

This hostility to wealth creators (whoever they are) is simply a lack of understanding, and worse, the sneering of a profession whose people were once able to afford the houses now snapped up by people involved in mere trade. This left-wing politics of envy, so common amongst academics is pure bitterness from a profession which no longer commands the respect (and money) they think they're due. It doesn't help the poor to tax the rich so much they seek means to pay less tax. For the means by which the rich pay less tax shrink the pie for everyone.

The reason Marxism is doomed to end up murderously totalitarian is that everyone imagines themselves as the planner, not the man condemned to the salt mines to fulfil the plan. The professor of Political Philosophy at Bristol university has not grasped this simple point.

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