Tuesday, 30 November 2010

Ireland vs Iceland

Last Wednesday I asked "Why shouldn't Ireland just default?"

Today, I found an interesting article from Guido:
Iceland’s President, Olafur R. Grimsson, told Bloomberg TV on Friday that his country is better off than Ireland because they allowed the banks to fail two years ago and devalued the krona:

“The difference is that in Iceland we allowed the banks to fail. These were private banks and we didn’t pump money into them in order to keep them going; the state did not shoulder the responsibility of the failed private banks.”

The Irish bank bail-out is being foisted on them by the EU and the IMF whereas sovereign Iceland let the banks go bust and restructured the financial sector to keep the commercial sector serviced. As a consequence, “Iceland is faring much better than anybody expected” says Grimsson:

“How far can we ask ordinary people – farmers and fishermen and teachers and doctors and nurses – to shoulder the responsibility of failed private banks… That question, which has been at the core of the Icesave issue, will now be the burning issue in many European countries.”

Hannan on Britain's contribution to the Ireland bailout

Daniel Hannan writes:

The figures for the Irish bail-out are now available in full.

The euro-zone countries are contributing €17.5 billion – which is fair enough, I suppose, if they see the survival of the single currency as being in their own interests. But the EU as a whole, including non-euro states, is contributing a further €22.5 billion. Despite having kept the pound, Britain is liable for nearly €3 billion (£2.5 billion) as part of a contingency reserve that was supposedly set up to deal with natural disasters, such as floods and earthquakes.

The three original countries which have rejected the euro, Britain, Denmark and Sweden, are all additionally making bilateral contributions equivalent to what they would have paid as members of the euro-zone fund. Indeed, the United Kingdom is paying slightly more than its share: an additional loan of €3.8 billion (£3.2 billion). As Douglas Carswell keeps telling anyone who’ll listen, we may be outside the EU’s monetary union, but we are not outside its debt union.

It will be interesting to see what excuses George Osborne provides when he gets drawn into a EU-led bailout of Spain.

Saturday, 27 November 2010

No such thing as an accident

BBC News reports:
A farmer has been killed by a charging bull in Hampshire, the National Farmers Union (NFU) has said.

The 58-year-old, named locally as Ian Rook, was said to have been "tossed in the air" when his animal charged at him at Manor Farm in Clanfield on Friday.

He was taken to the hospital but died. The Health and Safety Executive has been informed of the incident.

Do charities need government support?

I recently rediscovered a truly shocking Times article from 2009, by Monique Bateman, director of the Royal Navy and Royal Marines Children's Fund:
We understand that local authority budgets are tight and that if a charity is willing to help them to fulfil a role, this enables them to put more money into other areas.

Surely, though, during a recession, when help is needed to continue providing the support, they or the Government should step in to help these families, or at least to provide funds to charities such as ours to enable us to continue our work?

There is simply not enough aid available for charities fighting desperately to keep up their levels of support despite an increase in demand and a decrease in donations.

I therefore call for help, not just from the Government but from local authorities and, where possible, the public. It may sound a cliché, but we are now in a time when every penny donated to charities really does count.
I'm sure she means well, but it's disturbing that she draws no distinction between true charity (the freely-given donations of individuals) and 'government' funding (the redistribution of confiscated wealth).

The pursuit of happiness

A good post from Daniel Hannan:

The argument isn’t about what makes us happy; it’s about what governments can do about it. And here, a certain modesty is called for. As Dr Johnson put it:

How small of all that human hearts endure
That part which laws or kings can cause or cure

What can governments do to make us more content? They can create a climate where we are unlikely to be victims of crime. They can prevent us from being invaded, or defeated in war. They can guarantee that property rights are secure, contracts fairly enforced, disputes impartially arbitrated, the law open to all seeking redress. They can ensure that children receive a decent education, whatever their parents’ means. They can do these things without confiscating any more of our assets through taxation than absolutely necessary.

Friday, 26 November 2010

Saving feels good?

Today we received a letter from ING to say that our "bonus rate" has ended. From now on, we'll be getting their "standard variable savings rate", currently 0.5%.

So what's on offer?
  • A Bonus Saver account at 2.00% until 31 December 2011 ... if we don't make a withdrawal. Make a withdrawal, and the rate drops to 0.40%.
- or -
  • a "range of Fixed Rate Savings Accounts" where we can earn "up to 3.0%" !
This with CPI at 3.2%, RPI at 4.5%, and RPIX at 4.6%.

Of course, that won't stop HMRC from taxing us on the interest!

And ING has the chutzpah to suggest that "Saving feels good".

Wednesday, 24 November 2010

End the 'National Insurance' pretence

Readers of my previous post may have wondered why I didn't provide any examples of how the deficit could be reduced by raising National Insurance contributions.

The answer is that NI is a sham. Employee's NI is a complicated form of Income Tax. Employer's NI is a complicated form of Corporation Tax that biases business decisions about employment vs capital purchases (it discourages job creation, and favours investment in machinery).

NI contributions are expected to bring in £97 billion for 2010/11 — almost twice the £50 billion held in reserve in the National Insurance Fund [1].

In this same period, £117.2 billion will be paid out in pensions alone. Pensions are paid not from previous savings, or returns on investments, but by current contributors. Most people would recognise this as a Ponzi scheme.

According to the House of Commons Note [1],
The National Insurance Scheme was established on 5 July 1948 to provide unemployment benefits, sickness benefit, retirement pensions and other benefits in cases where individuals meet the contribution and other qualifying conditions
One year's pensions payments wipe out the NIF in its entirety, and leave £35bn of current contributions, which doesn't come close to covering the annual £119bn spent on healthcare or the £60.4bn spent on other welfare payments.

We should end the ridiculous pretence that National Insurance funds our Welfare State, and roll NI into Income Tax.

[1] National Insurance Fund: 1975-2010, House of Commons Library, Standard Note 797, Last updated 14 June 2010.

An important debate avoided

For the sake of argument, let's accept the ONS figure for the 2009/10 deficit:
In the financial year 2009/10 the UK recorded general government net borrowing of £159.8 billion
That is, the government kicked a £160bn can down the road, for future generations to pay.

What if this option had not been on the table? What if, instead, the public had faced an honest choice between tax rises and spending cuts?

The deficit could have been eliminated purely by tax rises. Consider this government analysis:

Estimated direct effects of illustrative tax increases in 2011/12:

Income tax:

  • 1p on basic rate: £4.75bn
  • 1p on higher rate: £0.78bn

National Insurance:

  • 1% pt on main employees rate: £3.6bn
  • 1% pt on employers rate: £4.3bn


  • 1% pt on standard rate: £4.75bn

Corporation tax:

  • 1% pt on main rate: £0.75bn

HM Revenue & Customs

By way of comparison, increasing the rates of duty on alcohol, tobacco and road fuel by one percentage point would raise only £0.36bn in total.

So to eliminate a shortfall of £160 billion, we could raise
  • basic rate income tax by 34p on the pound (from 20p to 54p); or
  • basic rate income tax by 17p (to 37p), and VAT by 17% (to 34.5%); or
  • higher rate income tax by 53p (from 4op to 93p), and basic rate by 25p (to 45p)
  • etc ...
Okay, so it's not actually that simple. Increased tax rates have dynamic effects (increased tax avoidance, decreased economic activity) which can actually decrease total tax revenue. If the government were to confiscate nearly 100% of income over £44k, very few people would push themselves past that barrier. If VAT goes up, people will buy less from shops, and more from the black market. A committed socialist would have to focus on taxes that are difficult to avoid, like property tax.

But the point remains: why not force governments to spend according to what they take? To bribe people with their own money, rather than their grandchildren's.

If the socialists are right, and people want high tax rates and generous benefits, they will get elected. Laffer-curve conservatives can make the counterargument that tax revenues could be increased by simplifying taxes and lowering rates. Libertarians can argue that the important goal is to roll back the state — to reduce reduce tax revenues, and leave more money in the hands of the private sector.

Government borrowing avoids this debate. Why do we allow it to continue?

Why shouldn't Ireland just default?

It always worries me when I find myself agreeing with something I read in The Guardian:

even a relatively small country like Ireland has options. Specifically, they could drop out of the euro and default on their debt. This is hardly a first best option, but if the alternative is an indefinite stint of double-digit unemployment, then leaving the euro and default look much more attractive.

The ECB and the IMF will insist that this is the road to disaster, but their credibility on this point is near zero. There is an obvious precedent. Back in the 2001, the IMF was pushing Argentina to pursue ever more stringent austerity measures. Like Ireland, Argentina had also been a poster child of the neoliberal crew before it ran into difficulties.

But the IMF can turn quickly. Its austerity programme lowered GDP by almost 10% and pushed the unemployment rate well into the double digits. By the end of the 2001, it was politically impossible for the Argentine government to agree to more austerity. As a result, it broke the supposedly unbreakable link between its currency and the dollar and defaulted on its debt.

The immediate effect was to make the economy worse, but by the second half of 2002, the economy was again growing. This was the start of five and a half years of solid growth, until the world economic crisis eventually took its toll in 2009.

To be sure, this insight came amidst the usual nonsense about unemployment as the Ultimate Evil, government spending as a means to boost the economy, and central banks as a positive force, but why shouldn't Ireland default?

Murray Rothbard set out the case for a US default in a June 1992 Chronicles article, Repudiating the National Debt.

Ever since I read that article, I've been wondering why we in the UK do not follow Rothbard's advice.

I can understand the reluctance of Guardian readers to honour the debts of the bankers. It is wrong. I am likewise reluctant to honour the far greater debts of socialist politicians.

Some argue that it would be unfair to innocent 'investors' in government debt, but our first duty should be to the slaves, not the slave-owners (witting or otherwise).

Others suggest that it would forever tarnish our national reputation, and make future borrowing more difficult and expensive. But history does not bear this out. As I wrote in August,
Sadly, as Argentina and other countries have found, it seems likely that people would lend to us again even if we were to default on our debt. We would need a strict constitution to forbid future governments from running up new debts, and eternal vigilance to avoid corruption of the constitution.
Attempts by the government to bind itself are always imperfect, but that doesn't mean they're worthless. A constitution can buy time in periods of stress, when the legislators would otherwise be swayed. A constitution provides an excuse for legislators to do what is right, even when it is unpopular.

Our constitution could outlaw government borrowing altogether. Or if more flexibility were required, it could insist that government cannot roll over debts for more than one year, so that any borrowing in 2011 would have to be repaid in 2012. The constitution could also stipulate that amendments require the approval of both Houses, followed by a national referendum.

The trouble with talk of constitutions at this juncture is that any constitution drafted by our current politicians would cement the statist, socialist principles that have impoverished and dehumanised our society.

Anyway, if anyone reading this knows a convincing reason why Ireland shouldn't default, and we shouldn't follow suit, please let me know. If I ever hear one elsewhere, I'll post an update.


Those considering the issue may be interested in the latest quarterly report from the DMO: Quarterly Review for Jul-Sep 2010, published October 2010.

I haven't yet gone through it in detail (and I'm not an expert in any case), but some key points stand out:
  • the nominal value of our debt ("the gilt and Treasury bill portfolio"), as of 30 September 2010, is £1,058.29bn
  • 20.4% of this debt is index linked: it can't be inflated away
  • 30% of gilts are held Overseas: defaulting on this portion of our debt would not directly impact UK citizens, but might prompt retaliatory action by foreign governments
  • 29% of our debt is held by Insurance companies and pension funds (as of 30 June 2010)

Tuesday, 23 November 2010

Perspectives on the Irish Bailout

Daniel Hannan writes:
Britain’s share of the Irish bail-out is reported to be £7 billion. Let’s just remind ourselves of what £7 billion means.

Seven billion pounds happens to be the total saving that would be made by all the welfare cuts put together. You know: the cuts that the BBC, the Guardian and the Labour Party insist will destroy social security. The cuts that Tristram Hunt says will mean a return to the Victorian workhouse. The cuts that John Cruddas says will drive a million people from their homes. The cuts that Polly Toynbee calls a final solution to the poor.

So now we know: every penny saved by these cuts will go to prop up the euro. To put it another way, at a time when Britain’s public sector debt stands at £850 billion, we are borrowing a further £7 billion to send to Ireland.
It’s true that some British banks are exposed in Ireland, but the interests of an international bank which happens to have its head office in London are not synonymous with those of the United Kingdom. And even if they were, it must surely by now be obvious that bailing out banks is a mistake.
Liam Halligan's earlier piece in The Telegraph is also well worth reading:
In September ... the Irish finance minister, Brian Lenihan, sought to tackle the situation head on, forcing Ireland's banks to come clean about the extent of their sub-prime losses to a greater extent than in any other European economy. As a result, some €50bn of Irish taxpayers' money was committed to stabilising the banking system over a number of years, allowing for a programme of genuine and necessary bank restructuring.

This was a staggering number – equivalent to around a quarter of annual national income. But at least the losses were no longer being denied – as in many other eurozone countries, to say nothing of the UK and US. Jean-Claude Trichet, European Central Bank President, called Ireland a "role model" urging other countries to "face up to their problems, as the Irish so clearly have done".

Recognising the bulk of the bank debt, making a genuine assessment of the potential stabilisation costs, then bringing those costs on to the state's balance sheet caused Ireland's projected budget deficit to balloon to an unprecedented 32pc of GDP. This figure has been widely remarked upon. Less well-known is that if several other and much larger European economies included their bank bail-out costs in their national accounts, rather than burying them off-balance-sheet, their projected deficits would be similar.
The European bigwigs are forcing a bail-out on Ireland not because the Irish state is bankrupt but because, as Ireland faces up to the extent of its banking sector losses, other nations aren't yet willing to do the same. The Irish are discovering, once again, how it feels when a spirited and determined people are denied their own sovereignty.
Of course, the Irish would have been much better off if their government had stayed out of the banking business altogether. The hit should have been taken by the bank's creditors, not the Irish taxpayers, as Morgan Kelly noted in the Irish Times:
September marked Ireland’s point of no return in the banking crisis. During that month, €55 billion of bank bonds (held mainly by UK, German, and French banks) matured and were repaid, mostly by borrowing from the European Central Bank.

Until September, Ireland had the legal option of terminating the bank guarantee on the grounds that three of the guaranteed banks had withheld material information about their solvency, in direct breach of the 1971 Central Bank Act. The way would then have been open to pass legislation along the lines of the UK’s Bank Resolution Regime, to turn the roughly €75 billion of outstanding bank debt into shares in those banks, and so end the banking crisis at a stroke.

With the €55 billion repaid, the possibility of resolving the bank crisis by sharing costs with the bondholders is now water under the bridge. Instead of the unpleasant showdown with the European Central Bank that a bank resolution would have entailed, everyone is a winner. Or everyone who matters, at least.

The German and French banks whose solvency is the overriding concern of the ECB get their money back. Senior Irish policymakers get to roll over and have their tummies tickled by their European overlords and be told what good sports they have been. And best of all, apart from some token departures of executives too old and rich to care less, the senior management of the banks that caused this crisis continue to enjoy their richly earned rewards. The only difficulty is that the Government’s open-ended commitment to cover the bank losses far exceeds the fiscal capacity of the Irish State.
I'll give the last word to Philip Booth:
Europe is trapped in a cycle where debt is being passed round and round in circles – the banks are bust so the Irish government bails them out; the Irish government’s debt is owned by other banks and if the government defaults, they go bust; the EU as a whole then tries to rescue both in opaque arrangements which are only sustainable because Ireland is so small; now Britain is getting involved.

Responding to debt crises in this way is entirely unsustainable, we potentially have crises in Italy and Spain around the corner and nobody can shoulder their indebtedness.

The EU has been sitting around doing very little for the last two years (except for dreaming up new regulations for the banks, hedge funds and private equity). What it and the nation states involved should have been doing is ensuring that banks can be wound up in an orderly fashion so that all providers of capital and credit potentially lose money except for depositors who were insured at the beginning of the crisis. The EU governments are simply underwriting mistakes made by private businesses and then blaming it all on “casino capitalists”.

The Irish government’s debt position would not, in fact, be that bad if it were not for the bank guarantees. Ireland is not another Greece (or Italy) – its underlying position is sound. The key issue has not changed since the beginning of the crisis – it is the need to recognise failed financial institutions for what they are and not load the cost of their bad loans onto taxpayers in general. At the beginning of the crisis, the bail-outs were understandable; we have now had two years to sort out proper legal mechanisms for winding up banks.

Saturday, 20 November 2010

£18 trillion raised for Children in Need?

Pudsey says: "You have raised an incredible £18,098,199 MILLION!"

£18 trillion! That really would be incredible.

I suspect Pudsey really meant the rather more modest sum of £18 million, which is about what the government borrows every hour.

Still, unlike Oxfam, Children in Need isn't an obviously fake charity. The donations come from the public, and are freely given. However, they receive support from the BBC — an organisation that is most definitely not funded by voluntary exchange.

Here's note 18 from their 2009 accounts,
The BBC Children in Need Appeal is the principal UK corporate Charity of the BBC and as such is supported by the BBC in a number of ways including but not limited to:
  • the provision of office space, postage and other services at no charge
  • the preparation and broadcast of the annual BBC One Appeal Show including national and regional programming content
  • the extensive support of BBC Radio 2 both on the day of the Appeal and in the build up through promotion,
  • competition, 24 hour music marathon and the “things that money can’t buy” auction on the Terry Wogan show: ’Wake up to Wogan’
  • significant promotional support and coverage of the Appeal across the BBC local television and radio network in the days before the Appeal and on Appeal night
  • the provision and maintenance of the BBC Children in Need pages of the BBC’s website
The costs of support through the provision of office space, postage and other services have been valued at £510,205. Many of the other elements of the support are very difficult to quantify as they are not discrete activities but embedded, partly as newsworthy and entertainment content, within the operations and business of the BBC. The Appeal show provides valuable content, which attracts a large audience, and without it the BBC would have to produce alternative content. As such the value of support provided by the BBC has not been included in the Charity’s Statement of Financial Activities
So, setting aside the unanswerable question about whether licence-fee payers believe that CiN-related broadcasts provide "valuable content", there is at least half a million pounds worth of "office space, postage and other services". We all support CiN, whether we want to or not.

Why grumble, though? It's for the children, after all. And they are so very needy.

Well, some of them are, yes. But viewers might be surprised at where much of the grant money ends up. Here's Ross Clark, from a 2007 Spectator article
You know the format: Terry Wogan introduces an evening of smiling kiddies overcoming misfortune and meeting celebs: please give generously.

And give generously viewers do: £18,300,392 on the night of last year’s event. But it would be a mistake to assume that the smiling kiddies were getting all the money. What’s this? A sum of £59,521 went to something called the Womenzone Community Centre in Bradford, which offers training for local women, plus a gym and steam room. Another £20,000 went to Until the Violence Stops, the domestic violence pressure group started by Eve Ensler, writer of The Vagina Monologues. Other handouts went to Brent Women’s Aid, Angolan Women’s Association and numerous local women’s groups. Perhaps most remarkably, £12,481 went to Women in Prison, a pressure group that campaigns against the incarceration of females, declaring, ‘Prison does not work. The best way to cut women’s offending is to deal with its root causes.’

In other words, some of the money you thought was going to buy wheelchairs for stricken children is really going to campaign on behalf of jailbirds. I am sure many of these charities do valuable work but, even so, to invoke images of sick children — the emblem of Children In Need being a bandaged teddy — and then to give much of the cash raised to battered women does seem a little underhand. To paraphrase the Ronseal advert, Children In Need doesn’t quite do what it says on the collection tin.

You can see for yourself where the money goes. It's all very politically correct:

£20,000 for Bradford Trident: "This project will provide activities to promote community cohesion for eastern european children living in Bradford"

£99,782 for the Bangladeshi Community Association Bradford (BCAB): "This project will improve the self esteem and aspirations of 160 young people in Bradford by providing a range of activities including sports, social inclusion, citizenship and life skills"

£109,164 for the Indian Muslim Welfare Society: "This project will provide activities three times per week for disadvantaged Asian children in Batley."

£82,910 for Gay and Lesbian Youth in Calderdale.

£118,597 for a project to "provide play work support for children who are visiting their mother whilst she is resident at HMP New Hall"

That's quite a lot of money, especially compared to the £7,200 for "Down Syndrome Support Group Bradford".

Whatever you may think about the value of the projects listed above, Ross Clark is right: "Children In Need doesn’t quite do what it says on the collection tin".
Perhaps of greatest interest to donors to Children In Need was the £56,123 which went to a charity called the Children’s Legal Centre, a group which offers free legal advice to children — or in some cases to fund legal cases. Most notable of these was the case of Shabina Begum, who took Denbigh High School, Luton, to court over its refusal to allow her to wear a jilbab — a full-length Islamic gown — in contravention of the school’s uniform policy. Shabina, who was represented by Cherie Booth, eventually lost her case in the House of Lords a year ago.

Was that really what donors had in mind when they whipped out their credit cards in reaction to the stories of juvenile cancer victims: that a slice of their donation would be going into the pockets of Cherie Blair to help a teenage girl sue her school over her refusal to wear a school uniform? I am all for charitable giving, but I do wish that BBC viewers would take a little more care to read the small print before falling for emotional blackmail of the corporation’s big charity campaigns.
The other offensive thing about Children in Need is that it boosts the egos of overpaid celebrities. The newsreaders prance around, donating their valuable time for the sake of the children. So noble. Then they go back to their day job of protesting government cuts.

If they really cared about the children, they'd worry a little more about the national debt.

Friday, 19 November 2010

Plundered to pay off others' debts

Another great article by Tom Paine at The Last Ditch:

Years ago, when I was a hard-working young family man of limited means and many outgoings, my wife and I lived in the other half of a semi-detached house from a retired industrialist and his wife. They were a lovely old couple and charming neighbours. Labour's hyper-inflation of the Denis Healey/IMF bailiffs era had reduced them from comfortably living on the interest from their life savings to genteel poverty on devalued and dwindling capital. This was the same inflation that wiped out the mortgages of my parents' generation, allowing them to pay for good houses with bad money.

My neighbours' life of work had been plundered to pay off others' debts. It was trans-generational piracy. Little did I know, foolishly confident as I was in the (then) political success of the doctrine of monetarism, that I was looking at my own fate. Yet "quantitative easing" is nothing but a fancy name for such inflationary policies and the gods of the marketplace will not be fooled by euphemism.

Tuesday, 16 November 2010

Who should support young carers?

I felt very sorry for the young carers featured on BBC Breakfast this morning, but my compassion was tempered by anticipation of the BBC's angle.

You just know that this wasn't an effort to encourage true (voluntary) charity to support these young people. Sure enough, here's the corresponding article on BBC News:
The four UK Children's Commissioners (one each for England, Wales, Scotland and Northern Ireland) said, in a joint statement, that young carers are "often caught in the middle of a well-meaning muddle".

It said they can miss out on vital support and called on governments at Westminster and in the nations to "properly identify and meet the needs of young carers, so that this largely invisible and often vulnerable group can get the support they need."

The Shadow Education Secretary Andy Burnham said it was "absolutely crucial" that young carers were identified and supported.

He warned that "ill-thought-through reforms" in health and education could result in "disjointed and fragmented local services".

Other campaigners are worried young carers' services are being cut by councils and other bodies trying to rein in the country's debt after the recession.

The National Young Carers Coalition says there should be no cuts for services that support young carers, "so that they are not forced into caring roles that are inappropriate and damaging to their health and wellbeing".

Ms Teather said the government wanted to help.

Its new strategy, to be launched later this year "makes it clear that everyone working with young people and their families, including GPs and teachers, must do more to identify and support young carers," she said.

Making the most of the EU

For a while now, I've been thinking that since our politicians have no intention of leaving the EU, we should consider how we might make the best of a bad situation.

Free movement of people and capital in the EU would make it very easy for the most talented Europeans to congregate in the UK, if we were to create the right incentives.

If we were to turn our island into a giant tax haven, with little or no income tax, corporation tax, and capital gains, wealth generators from across the European Union of Socialist Republics would be quick to relocate. The state-funded parasites and the xeonophobic would stay at home, but the most energetic and ambitious would be set free. If we were to simultaneously reduce handouts, thousands of unassimilated benefit tourists might find that Sweden and the Netherlands look more attractive.

Like John Galt's strikers, we could show the continentals the folly of their approach.

No doubt the Eurocrats would be annoyed, as they were with Ireland:

The Irish government continued to insist that no request had been made for a new aid package, but with EU officials worried about renewed pressure on bond prices and the euro there was strong support in Brussels to "persuade" the minority administration of prime minister Brian Cowen that help was in the best interests of Ireland and the EU.

An increase in corporation tax as a condition of further assistance has added to concerns in Ireland about the high price being demanded for any aid. Ireland's low 12.5pc rate has attracted a stream of investment but has annoyed France and Germany

I don't know how the Irish people will respond to such an ultimatum, but I like to think the British would resent it.

So what are the possible outcomes:
  • The other members of the EU vote to eject us from the union
  • EU pressure for increased taxation in the UK causes the British people to see the light, and demand a referendum
  • The EU member states engage in a 'race to the bottom', competing to reduce the size of the state
All of these sound good to me. We must ask ourselves why our politicians don't pursue this course.

Farewell to DK?

When he gave up blogging, Mr Eugenides wrote
what I don't have now is that same hate. The last administration filled me with disgust; the mere sight of my telly of a Charles Clarke, a John Reid, a—God forgive me for even typing the words!—Patricia Hewitt, sent me flying into almost uncontrollable loathing. And without fury, without rage, without spite, this blog is nothing, really—or at least, not what it was—because the way it's written, it is set up for polemic, not placid discussion.

In as far as I owe you anything, it is, I would say, not to confect outrage over things which don't really upset me, not to try and find hate where none exists. I'm in a more placid place, and I think that the country's got at least a fair chance of becoming a better place with that horrendous shower out in the cold; and that's as good a place as any to leave it.
In his eulogy for Mr E, DK wrote
for what it is worth, your humble Devil feels much the same. Unlike my peripatetic but impecunious Greek friend, however, I carry on because... Well, because I want to.
Now it seems that the Devil, too, has tired:
I'll admit that I have suffered from blog fatigue before and I have even previously announced my retirement. I will even admit that I found that doing so—being released from the need to write—actually returned to me the desire to do so. And it may be the same this time too.

But, the way I am feeling at present, it is looking a little unlikely.
When I saw Chris at the Libertarian Alliance conference, he wasn't quite ready to give up on blogging, but he confessed that he got more satisfaction these days from speaking at universities. I'm sure he does that very well, but his invective will be missed. I hope he returns one day, refreshed. Either way, I wish him the best.

Tom Paine has posted a tribute. With what may be the Devil's Last Post, I am all the more grateful for the return of The Last Ditch.

Who is The Ben Benanke?


(via The Cobden Centre)

Like the recent Martin Durkin documentary, this is a one-sided presentation, but our situation is absurd. It's time the general public started asking questions.

Friday, 12 November 2010

Worse than your average thug

Another insightful article from Lord Tebbit:
No doubt our Chinese friends had a pretty good laugh at the TV news showing our happy students in democratic Britain express their delight at their lot by trashing buildings and assaulting the police, but they are too well-mannered to give us the benefit of their advice without being asked. More constructively, perhaps some Islamic states might make some suggestions about how Sharia Law could help us to deal with the hordes of drunken, vomiting, fornicating, fighting fools infesting our city centres on Friday and Saturday nights.
I hope to find time to say more about these ridiculous bourgeois riots, but I'm pleased to hear (via Tom Paine) that Guido has offered £1000 "for information leading to the arrest and prosecution of this man and his accomplices"

These rioters are worse than your average thug, for they are not just amoral, but self-righteous. More on Clare Solomon anon.

No laughing matter

A recent article on The Register drew my attention to a bizarre and concerning incident in France:
Glamourous MEP Rachida Dati complained to the police after an unnamed 40-year-old wrote to her asking for an "inflation", the Telegraph reports.

The request was a reference to a recent, widely-reported Freudian slip by Dati, who confused the French words for inflation and fellatio in a radio interview.

Talking about overseas investment funds she said: "I see some of them looking for returns of 20 or 25 per cent, at a time when fellatio is almost non-existent."
In response to his rather clever joke,
Lyon's Judicial Police raided [the man's] home and arrested him. Following 48 hours in custody, he faces a prison sentence of up to a month and a fine of up to €10,000 on charges of "displaying contempt towards a public servant".
Eh bien, les Français sont fous. It does makes you wonder what sort of treatment we can expect as the EU assumes greater policing powers, but the truth is that our own police, politicians, and courts have already lost their sense of humour.

Trainee accountant Paul Chambers lost his job, and faces thousands of pounds worth of fines, for an off-the-cuff remark on Twitter. Following closures due to snow, he declared:
"Robin Hood Airport is closed. You've got a week... otherwise I'm blowing the airport sky high!"
[Defence counsel Stephen Ferguson] said the prosecution had failed to prove his client had any intention to threaten anyone or that he thought there was any risk someone would interpret the tweet in this way.

The latest victim of Twitter trouble is Gareth Compton, who tweeted
Can someone please stone Yasmin Alibhai-Brown to death? I shan't tell Amnesty if you don't. It would be a blessing, really.
In bad taste, perhaps, but could anyone seriously interpret this as anything other than a joke? It's a far cry from "Behead those who insult Islam".

Sean Gabb's article on the subject is well worth reading. Recalling his youth, he writes
there was never any question that jokes in poor taste might be illegal. I remember reading an article once in The Spectator where Auberon Waugh called on a television producer to be put up against a wall and shot. Some people laughed. Others scowled. There was never any question that the police might be involved.

England is now a country where virtually any words uttered in public can be treated as a criminal offence. Without thinking very hard, I can remember how Nick Griffin of the British National Party stood trial for having called Islam “a wicked vicious faith”. I can remember how a drunken student was arrested and fined for telling a policeman that his horse looked “gay”. I can remember how a man was arrested and charged and fined for standing beside the Cenotaph and reading out the names of the British war dead in Iraq. I remember a case from this year where a pacifist unfurled a banner outside an army cadet training base. “Stop training murderers”, it said. His home was promptly raided by police with dogs, while a helicopter hovered overhead. He was arrested and cautioned.
After noting the many laws that should be repealed, Gabb makes an important point about those who enforce the law:
Even if police powers could be rolled back to where they were in about 1960, these traditional powers would still be used oppressively. Power is restrained in part by law. Beyond that, it is restrained by common sense and common decency. These are qualities now absent from the police in England, and no changes in law or exhortations from the top can bring them back. Anyone who wants all the policing our taxes buy needs his head examined.

There is no doubt that all those High Tory critics of Robert Peel were right about the dangers of setting up a state police force. It took over a hundred and fifty years to show how right they were. But, when someone is arrested for making jokes about Yasmin Alibhai-Brown, we can see that the line has been crossed that separates a state with police from a police state.
No doubt there are still many good police officers, but I'm sure Gabb is right that there are also many bad ones, and that police culture has shifted. Long gone is the historic tradition,
that the police are the public and the public are the police; the police being only members of the public who are paid to give full-time attention to duties which are incumbent upon every citizen in the interests of community welfare and existence

Thursday, 11 November 2010

Britain's Trillion Pound Horror Story

Now on 4oD: Britain's Trillion Pound Horror Story

One sided? Yes. But it's the side we never get to hear on the BBC.

Please do watch it.

The socialists are going wild on Twitter in response to these "overt right-wing" heresies.

Inheritance Tax Is Unjust

Today I came across a brilliant article from 2002 by Robert C. B. Miller:
When the Queen Mother died, there was a muted criticism by republican commentators that Inheritance Tax would not be paid on her estate. It was a scandal, so the argument ran, that the Royals should not have to pay a tax that everyone else had to pay.

Criticism resurfaced when it was announced that the Queen would exercise her privilege and that details of her mother’s will would not be published in accordance with longestablished practice. The Queen may have been relieved that the criticism did not develop into another round of the nonpayment of income tax imbroglio that emerged in the early 1990s and caused so much excitement amongst anti-royalists.

But while some of the mainstream press complained at the royal privilege, few pointed to the obvious conclusion, which was that no one should have to pay Inheritance Tax. The arguments that led John Major’s government to agree to the Queen’s exemption from Inheritance Tax in 1993, apply with equal force to other people. The tax is relatively expensive to collect, requires ferocious anti-avoidance rules, and affects most severely those least able to pay it. It raises little revenue — around 1.5% of Inland Revenue receipts — and in the long run may stifle, if not prevent, much altruistic and generous behaviour.
Indeed, one of the ill consequences of Inheritance Tax is that it has subsidised institutional bureaucratic and increasingly politicised charities at the expense of sympathy and generosity closer to home. Help given from one individual to another is likely to be far better directed than anything provided by the welfare system, or politically correct charities. And it is just this generosity at the margin that is likely to be stymied by the 40% charge on the bequests of the middle classes.

Sunday, 7 November 2010

Alex Deane: BBC presenters go on strike

In a post at CentreRight, Alex Deane has nicely expressed my thoughts about Friday's NUJ strike:
The BBC's "talent" went on strike yesterday. Others stepped in. The news was still read, the airwaves were still filled. I daresay that much that was said was said with less snide self-satisfaction. Those who filled in will come at a fraction of the price of the "talent" who walked.

Am I the only person to whom the obvious analogy occurs? When workers in a far more vital field in the USA - air traffic control - tried to bully their employer and walked out, Ronald Reagan laid them off and put others in their place. Doing so here would be much easier, as there are tons of people who'd love to read the news, become a journalist, etcetera. Indeed, we're always told how difficult it is for people to get into these hallowed halls.

Friday, 5 November 2010

Hannan: A disproportionate number of jihadi extremists seem to be living on benefits

An excellent post from Daniel Hannan:

Can you guess what they do for a living, the appalling protestors gathered outside the Old Bailey to support Roshonara Choudhry, who was given a life sentence for trying to murder an MP? That’s right: they’re living on benefits, one claiming to suffer from chronic fatigue disorder. (Although he was evidently not too fatigued to spend his day bellowing “British troops must die!”)

I’ve blogged before, in the context of Gaza, about the way in which unconditional subventions help create an almost ideal terrorist habitat. I wonder whether the same thing might apply to our own country. A surprising number of radical preachers are supported by the state, and most of the second set of Tube bombers were living on handouts.

Perhaps, if that option had been closed, some of these alienated young men might have become successful entrepreneurs instead of working themselves into a rage against the hand that fed them.

Proposition 19 Post-Mortem

Jeffrey Miron has written an article for CNN, examining why Proposition 19 failed.

The whole piece is worth reading, but this bit stuck out to me:
Prop 19 failed also because it overreached. One feature attempted to protect the "rights" of employees who get fired or disciplined for using marijuana, including a provision that employers could only discipline marijuana use that "actually impairs job performance." That is a much higher bar than required by current policy.

This provision allowed Prop 19 opponents to claim that workplaces would become infested with impaired pot users. That assertion is not well-founded, but that is not the point. Prop 19 did not need to address employee marijuana-testing in the first place.

A more effective position for Prop 19 supporters would have been that employee marijuana-testing should be unencumbered by state or federal law. That would allow employers to protect themselves and their employees against perceived risks from marijuana, thereby promoting support for legalization.
I agree: individuals should be free to consume whatever substances they like, but employers should be free to place whatever conditions they like on employment. I wouldn't mind if a modern-day Henry Ford insisted his workers abstain from alcohol, on pain of dismissal. Nobody has a right to a job. But it would not be reasonable for him to campaign for prohibition — to require that non-employees abstain, on pain of imprisonment. Marijuana should be treated no differently.

Wednesday, 3 November 2010

Proposition 19 defeated - 54:46

Semi-official election results from the office of California's Secretary of State show that Proposition 19 to legalise marijuana was rejected by 53.8% of the population.

Disappointing, but our time will come.

Tuesday, 2 November 2010

The Last Ditch: The terrorists who work for us

Tom Paine writes:
Since 9/11 the governments of the West have forced air passengers to endure countless humiliations. We have been scanned, groped, prodded and ordered about "for our own protection" by just the sort of people we worked hard at school never to have to be bullied by again. Now it transpires that, all this time, airlines were loading unscanned freight into the holds beneath us. It was all, as some of us suspected, a monumental waste of our time. It was a fraudulent, entirely unjustified assault.
Excellent stuff, as usual.

Les prisonniers voteront!

Prime Minister David Cameron was said to have reluctantly accepted that there was no way of maintaining the 140-year-old ban on sentenced prisoners voting in general elections, according to BBC political correspondent Reeta Chakrabarti.

However, he will resist allowing the vote to those prisoners who have committed the most serious offences, our correspondent adds.

Prisoners on remand awaiting trial, fine defaulters and people jailed for contempt of court are already permitted to vote but more than 70,000 prisoners currently serving sentences in UK jails are prevented.

Prisoners were originally denied the right to vote while serving a sentence under the 1870 Forfeiture Act and the ban was retained in the Representation of the People Act of 1983.

Following a legal challenge brought by John Hirst, who was convicted of manslaughter, a final European Court of Human Rights (ECHR) ruling in 2005 said the blanket ban was discriminatory and breached the European Convention on Human Rights.
Whatever the merits of allowing prisoners to vote, this latest submission to the will of the European Court of Human Rights should leave people in no doubt that our sovereignty is endangered by the EU project.

Entente idiotique?

BBC news reports:

Britain and France are being forced by budget cut-backs and the lack of their own strategic capability to co-operate more closely on defence.

They both want to be global players but increasingly lack the resources to remain so.

A series of measures is being formally agreed at a summit in London on Tuesday between Prime Minister David Cameron and President Nicolas Sarkozy.

This is of course absurd. There was no need for any cuts in the department of defence. In 2009 defence spending amounted to £42bn out of £631bn — less than 7%.

As I commented over at Lord Tebbit's blog,
As bad as our financial situation is, we could easily find a few billion to invest in our national defence. There is so much fat just begging to be trimmed, and so many things government does that it shouldn't.

If we were to roll spending back to 1997 levels, we could eliminate the deficit at a stroke, and have plenty left over to buy and operate top notch military hardware.
The planned cooperation is not a matter of necessity.

According to the BBC,
They will share air-to-air refuelling because Britain might have spare capacity in this in the future. There is scope for joint maintenance work on transport aircraft, and shared development of a drone, mine-counter measures, satellite communications and cyber warfare.
That's all fine when we're getting along, but what when we disagree? If we become reliant on French air-to-air refuelling capability, we could find ourselves in a very tight spot. As Lord Tebbit put it,
To rely on France and America for aircraft is a policy designed by those too young to remember Oran or Suez
The BBC article continues,
British Defence Secretary Dr Liam Fox said: "This is not a push for an EU army which we oppose... It has always been my view that defence must be a sovereign and therefore an inter-governmental issue."

Britain is therefore not taking advantage of the mechanism offered by the Lisbon Treaty. The treaty allows for what is called "permanent structured cooperation in defence".

This is in effect an EU "opt-in" arrangement. It allows member states to get approval from the European Council (the heads of state and government) to organise combat units capable of operating on missions up to at least 120 days.

Such EU-led cooperation was envisaged in 1998 when Tony Blair and President Chirac agreed at St Malo that "The [European] Union must have the capacity for autonomous action, backed up by credible military forces".
The Eurocrats are a patient bunch. If we become accustomed to military cooperation with foreign powers, and reduce our own forces to the point where we cannot credibly act alone, the EU army will seem a much more realistic prospect than it does today.

And once there is an EU army, how likely is it that secession will remain a peaceful matter? The Americans weren't content to see a part of their federation go its own way. Will the federal powers in Brussels take a more relaxed view?