Wednesday, 26 January 2011

The sacking of Andy Gray

BBC News reports,

Sky has sacked football presenter Andy Gray after further allegations of his sexist behaviour came to light.

The pundit had already been disciplined for sexist comments made about female referee Sian Massey before Saturday's match between Wolves and Liverpool.


Sky Sports said it had sacked Gray "in response to new evidence of unacceptable and offensive behaviour".

Sky's statement continued: "The new evidence, relating to an off-air incident that took place in December, 2010, came to light after Andy Gray had already been subjected to disciplinary action for his comments of 22 January, 2011."

The new footage, which was recorded in December but only came to light on Monday night, appears to show Gray making a suggestive comment towards colleague Charlotte Jackson, who does not openly react, and he and Keys then burst out laughing.

First, I should declare that I don't follow football, and I don't pretend to understand the minds of those who do.

As a matter of principle, I support the right of a private company to sack anyone, at any time, for any reason. There are two sides to an employment contract, and neither party should be forced to continue in the agreement once it ceases to be mutually beneficial.

However, I'm somewhat concerned about the way this story has played out.

Businesses should decide for themselves what level of suggestive banter and disrespectful behaviour they allow in the office. They are the ones best placed to judge how much offence has been caused, and whether offensive characters do more good than harm (the benefits of their individual contribution, versus the harm they do to morale, staff retention, and recruitment). And as noted above, an employer should be free to take a stand on principle, acting on their own conscience, and sack anyone they feel has acted inappropriately.

In this case, it seems unlikely that managers at Sky were unaware of Andy Gray's character. It was only when the media got hold of the story that action was taken against him. Still, there could be legitimate business reasons for their decision: they might fear a customer backlash (protests and even boycotts), or the impact of a bad reputation on morale, staff retention, and recruitment.

But might there be something more to it? The government has the power to block News Corporation's buyout of BSkyB. And that same government is so committed to political correctness that they passed Harriet Harman's vile Equality Act. There needn't have been a phone call from a minister. News Corp knows what it needs to do in order to be considered a Socially Responsible Corporate Citizen.

Wednesday, 19 January 2011

Hannan: Is the Bank of England pursuing inflation as a deliberate policy?

Daniel Hannan writes
For months, this blog has been calling for a rise in interest rates. The Consumer Price Index is now rising by 3.7 per cent, the Retail Price Index by 4.8 per cent, and the Tax and Price Index – the most comprehensive measure – by 5.2 per cent. Allister Heath makes the anti-inflationary case superbly in today’s City AM. As he says, “praying that all will be well is not an economic strategy”. Well worth reading in full.

Tuesday, 18 January 2011

Ban on the sale of cheap alcohol

The Telegraph reports,

The Coalition Government pledged to combat cheap drink promotions and end the selling of alcohol at below cost.

Under plans to be unveiled by the Home Office today retailers will be banned from selling drinks for less than the value of duty and VAT owed on them.

It will, for the first time, effectively set an individual minimum value for each product under which the price cannot drop.

They quoted Tory MP Andrew Griffiths, who thought the measures did not go far enough:

“The reality is this matter is well intentioned but it will not stop supermarkets using alcohol as a loss leader and it certainly will not help pubs and small shop owners.”

BBC Breakfast featured the same story, and there's a corresponding article on the BBC News website:

The British Medical Association said the proposals did not go far enough.

"It's not minimum pricing, it's not really going to make that much difference," said a spokeswoman.

"What we're calling for is tough action."

Don Shenker, chief executive of Alcohol Concern, said: "Duty is so low in the UK that it will still be possible to sell very cheap alcohol and be within the law.

"The government needs to look again at a minimum price per unit of alcohol. That is the only evidence-based approach that will end cheap discounts once and for all."

It is amusing that the march of the British nanny state has been restrained by EU anti-competition laws, but it's nevertheless disturbing that the Coalition are determined to nudge us as far as the law will allow.

In the Telegraph article, the only opposition to the proposals came from those who wanted stronger measures. The vested interests lent their support to the moral crusaders:

Jonathan Mail, head of public affairs at Camra, said: “We think the decision is a betrayal of the Government’s promise to ban below cost alcohol sales. It will allow supermarkets to continue to sell alcohol below cost unhindered.”

Brigid Simmonds, chief executive of the British Beer & Pub Association, said: “This is a clear measure that can be implemented quickly and will stamp out the worst cases of below-cost selling. However, it will not have a significant impact on low-priced alcohol in supermarkets.

“With 70 per cent of alcohol now sold in the off-trade, there is a real need for the Government to do more to support the pub.”

Classic. Meanwhile, ASDA joined Tesco in supporting minimum pricing:
A spokesman for Asda, which has already introduced such a policy, added: “Six months ago we announced that we wouldn’t sell alcohol below the cost of duty plus VAT. We also called on the Government to establish a floor price below which it would be illegal to sell alcohol and hoped that they would follow our lead.”
I was surprised that the story didn't feature on the front page of The Guardian, but it seems they reported on the issue yesterday:

Ministers are expected to announce tomorrow that they have decided to restrict a ban on cut-price sales of alcohol, enabling supermarkets to continue selling beer at 38p a can and wine at just over £2 a bottle.

The move, which will keep the ban to those drink sales below the rate of duty and VAT, has triggered claims from publicans and health campaigners that alcohol will still be available at "pocket-money prices".


The former chief medical officer, Sir Liam Donaldson, has argued for stronger action including a minimum unit price of 50p, saying it could save 3,400 lives a year.

This approach, which has been endorsed by Nice, the official public health watchdog, would put the minimum price of a pint of beer closer to £1-£1.50.

None of the articles quoted anyone prepared to state the obvious: the government has no right to distort alcohol prices. The free market should determine what we pay, and individuals should be free to choose what they do with their own money and their own bodies. Nudging is not a legitimate aim for the government. Grown-ups need to decide things for themselves.

Sunday, 16 January 2011

BBC: Smoking 'causes damage in minutes', US experts claim

Shock news from the BBC:
There may be genetic damage just moments after smoking

Smoking damages the body in minutes rather than years, according to research in the US.

The report, published in Chemical Research in Toxicology, shows that chemicals which cause cancer form rapidly after smoking.

Scientists involved in the small-scale study described the results as a stark warning to people considering smoking.

Anti-smoking charity Ash described the research as "chilling" and as a warning that it is never too early to quit.

The long term impact of smoking, from heart disease to a range of cancers, are well known. This study suggests the damage begins just moments after the first cigarette is smoked.

You might think the BBC could have found someone willing to express scepticism at such an extraordinary claim, but it seems they're happy to report it at face value.

After all, "the research was funded by the US National Cancer Institute". And if you can't trust a government to give you the straight facts, who can you trust?

Private versus public nudging

An excellent article from Mark Pennington:
Professor Thaler is an engaging speaker. His assertion that ‘libertarian paternalism’ is merely an extension of methods widely adopted in daily life is a beguilingly simple, yet ultimately dangerous one. According to Thaler since good mothers constantly attempt to ‘nudge’ their offspring in the ‘right direction’ then we should not worry about governmental nudging. Whether it is ‘fat taxes’ to discourage unhealthy eating induced by ‘weakness of will’ or compulsory enrolment in savings schemes to induce less ‘short-sighted’ and more thrifty conduct, people should learn to love a government that coaxes them towards what they themselves would recognise is in their own best interests.
Listening to Professor Thaler I was reminded of the claim made by many socialists in the past – Lenin being perhaps the most prominent – that since private firms routinely engage in ‘planning’ there should not be any concern about the state ‘planning’ on a society wide scale. Yet, as Hayek noted on numerous occasions, to recognise that ‘planning ‘ is an essential element of a progressive society tells us nothing about ‘who should plan’ and ‘for whom’. Likewise, to acknowledge that ‘nudging’ strategies may be an aid to effective decision-making in the context of limited rationality, tells us nothing about ‘who should nudge’ and ‘for whom’. It does not follow that since some nudging may be desirable that we should automatically favour governmental nudging. On the contrary, there are several reasons to suggest that ‘private’ nudging should in fact be preferred to the statist variety.
I recommend the whole article.

Jamie Whyte's 2008 article on the same subject is also superb.

Wednesday, 12 January 2011

Yorks cops bust Bradford guinea pig farm

The Register reports,

Yorkshire cops have apologised after swooping on a suspected Bradford cannabis "hothouse", only to find a couple of pampered guinea pigs languishing by an electric heater.

Six officers in three vehicles descended on Pam Hardcastle's house after a police chopper's dope-busting camera picked up a suspicious infrared hotspot.


West Yorkshire Police Inspector Darren Brown offered: "I would like to apologise for the distress this may have caused. However, I would point out that these tactics are essential in tackling drugs across the district."

I dread to think what would happen if these front-line police services were reduced.

Sunday, 9 January 2011

What causes inflation?

The Telegraph reports on the Bank of England's central projection that CPI will peak at 3.6%, while pay rises are running at 1.1%:
Prices are being pushed up by the growing cost of commodities, such as oil and food, as global demand recovers, as well as the feed-through effect of this month's VAT increase.
So don't worry about the BoE's massive money-printing binge. Inflation occurs because of one-off tax rises, and external factors like "global demand".

Liam Halligan
is one of the few mainstream commentators to see QE for what it is. In his latest article, he responds to accusations from Tim Congdon that he is a "monetary conservative of the backwoods persuasion":
A heavyweight monetary economist of international repute, Congdon served on HM Treasury's panel of independent economic forecasters during the 1990s – the so-called "wise men".
Critiquing my use of the term "money-printing", Congdon highlights that the nominal value of notes in circulation in the UK has risen only 2pc since early 2009. This is disingenuous. Everyone arguing against QE, at least everyone serious, has been careful to describe it as the expansion of "virtual" or "electronically-created" credits ex nihilo by central banks – as I did in the very next sentence of the column from which Congdon lifted the quotation above.
So the Bank of England has created the means to spend, from nothing, despite not issuing more physical notes. To say that QE isn't money-printing is a distinction that would make even Bill Clinton blush.
The Bank of England's balance sheet has tripled, from around 6pc to 18pc of GDP, in only 18 months. That's unprecedented. The last time such expansion took place it was over 40 years – from Edwardian times to the end of the Second World War.
QE is a short-term expedient with friends in high places. It has allowed Anglo-Saxon banks to re-capitalise themselves via a back-door bail-out, with many QE proceeds rebuilding bank balance sheets rather than being leant on. By propping up gilt and US Treasury prices, it has also allowed weak governments, for now, to keep spending. But at what cost?

In my view, the main cost is inflation – and the related debasement of savings. By inflating away our debts, the UK is also imposing "soft-default" on our creditors, implying higher future borrowing costs. For some time, QE-advocates had a lot of fun deriding those of us who warned UK inflation would outstrip the Bank of England's estimates. We've been proved right – yet the inflation has only just begun. The vast majority of that QE money in the shadow-banking system, on both sides of the Atlantic, has yet to enter circulation. When it does, and is leant against many times over, we'll see QE's true inflationary impact.
I'm sceptical of Halligan's acceptance that "the best arrangement is for the state to manage the quantity of money", but something along the lines of what Ben Dyson proposes sounds like an improvement on the status quo. With money printing under direct political control, abuse of this power would be much more obvious. And with fewer variables to worry about, monetary policy would no longer involve walking a tightrope, "with hyperinflation on one side and a deflationary spiral on the other".

Halligan concludes,
Modern capitalism, at its core, relies on the public's trust of fiat money and the sanctity of contract. QE is seriously undermining both those cardinal concepts. We're not supposed to call QE "money printing" because money printing is the last refuge of declining economic empires and banana republics. It also amounts to state-sponsored theft. And against that, yes Professor Congdon, I declare an "implicit prejudice".
The whole article is well worth reading.

(H/T Andy Duncan)

The Onion does Keynesianism

Via Lew Rockwell, I discovered this excellent idea from The Onion:

WASHINGTON—In an effort to boost the economy and promote job growth, representatives from the newly revived Works Progress Administration announced Thursday their plan to dismantle, piece by piece, the 3.25 million cubic yards of concrete forming the Hoover Dam, and then immediately rebuild it. "This is a vital initiative," said WPA director Ted Doogan, who was appointed last week. "Systematically tearing down such a massive edifice will create at least 25,000 jobs over the next five years. And then reassembling it, using all the same pieces in the exact same configuration, will employ another 25,000 workers. America is back." Other public works projects currently underway include the bulldozing of libraries, the burning of national forests, and the defacing of public murals, which will be followed by a massive plan to rebuild libraries, revive national forests, and repaint public murals.

In the long run, we're all dead, but if you're a defunct economist, your strange ideas can live forever.