An unjustifiable strike

Another excellent article from Westminster's most promising MP:

The Government have made sure that anyone who is within ten years of retirement will be able to retire on their current terms and they have also confirmed that low earners making under £15,000 a year (15% of the workforce) will not have to make increased contributions. In addition, another million workers earning up to £21,000 will have their total increase limited to 1.5 per cent over three years. Accrued benefits that people have built up already will be protected.

I find myself reflecting on the situation faced by those without taxpayer-guaranteed benefits. Suppose the aim is a retirement income of £15,000 a year for life. That means buying what’s known as an annuity. With pension savings of £10,000 buying an annuity worth about £500 a year today, to achieve just £15,000 a year, one would need pension savings of £300,000. To achieve a more comfortable £25,000, one would need to have saved £500,000.

And that income would not be index-linked for protection against inflation.

Quite. I recommend the whole article.

NUTs

Here, for the record, are five "pension facts for parents", according to the National Union of Teachers:

FACT ONE

Teachers and other public sector workers are being asked to pay more for their pensions, work longer and get less in retirement.

FACT TWO

Many private sector workers have no proper pension provision. The Government should be acting on this, not attacking public sector pensions.

FACT THREE

Cutting public sector pensions will just make more pensioners poorer and put the cost of supporting them on to the State and taxpayer.

FACT FOUR

Damaging teachers’ pensions will lead to more teacher shortages and turnover, which will in turn damage children’s education.

FACT FIVE

The teachers’ pension scheme is affordable. Reports from the National Audit Office and the House of Commons’ Public Accounts Committee show that the cost of teachers’ pensions is falling as planned.

I haven't yet found time to read their 16-page Fair Pensions for All pamphlet, but you have to wonder what planet they're on. Ignorant, disingenuous, or a bit of both?

I was also able to get a copy of this letter sent to NUT members in West Berkshire:



They're keen to maximise the disruption:

DO NOT tell your head teacher who is going to be on strike. This is because tactics have changed and we no longer need to encourage head teachers to support us. If a Head cannot be certain who will or will not turn up for work they can't easily keep the school open.

Disgraceful behaviour, but just what you'd expect from unions. They seem to think that the education system exists to serve them, rather than students and parents.

The sooner education is re-privatised, the better!

The bond bubble is bursting

Another excellent article from Detlev Schlichter:

“The government can always pay.”

This is a statement that has no basis in fact. Any rational analysis will quickly expose it to be a fallacy. Economic theory, economic history, and plain good old horse sense can demonstrate effortlessly that this statement is an illusion. Yet, it is today a widely held and deeply cherished illusion in the world of finance (and, incidentally, the world of politics). In fact, it has become one of the defining myths of the modern fiat money era. It has for decades provided portfolio managers and bankers with an imaginary refuge from the turbulent world of capitalist “creative destruction”, a ‘safe haven’ where their nerves and capital could rest. The ‘free lunch’ might not have been a feast – only the ‘risk-free rate’ was to be had – but it was better than nothing and anyway a welcome break from capitalism and entrepreneurship. And by the way, if you leverage your government bond portfolio sufficiently with the help of central-bank-provided, zero-cost fiat money, the returns could still be quite handsome.

The fate of myths is that they sooner or later clash with reality. Then they are exposed as myths, which requires a painful giving-up of beloved certainties, a readjustment of paradigms and an abrupt change in behaviour. This is what we have been witnessing in European sovereign bond markets and will soon observe outside Europe as well.

It seems his message is slowly getting through to the mainstream media:

Investors sent Europe’s politicians a painful message last week when Germany had a seriously disappointing government bond auction. It was unable to sell more than a third of the benchmark 10-year bonds it had sought to auction off on Nov. 23, and interest rates on 30-year German debt rose from 2.61 percent to 2.83 percent. The message? Germany is no longer a safe haven.

Since the global financial crisis of 2008, investors have focused on credit risk and rewarded Germany with low interest rates for its perceived frugality. But now markets will focus on currency risk. Inflation will accelerate and the euro may break up in a way that calls into question all euro-denominated obligations. This is the beginning of the end for the euro zone.

Here’s why. Until 2008, investors assumed that all euro- zone sovereign bonds, as well as bank debt, were risk-free and would never default. This made for a wonderfully profitable trade: European banks could buy government debt, finance it at less expensive rates through funding provided by the European Central Bank, and pocket the spread.

The party is almost over. Let's hope the collapse comes quickly, and with minimal collateral damage.

A racially-aggravated offence

BBC News reports:

A woman has been arrested after an online video apparently showed a woman abusing ethnic minority passengers on a packed south London tram.

The clip, viewed more than 10,600 times since being uploaded to YouTube on Sunday, shows a woman sitting with a child, shouting at fellow passengers.

British Transport Police said a woman, 34, had been arrested on suspicion of a racially-aggravated offence.

The BBC article doesn't link to the YouTube video, but the Huffington Post article they link to does. By now it has been watched 1,854,507 times.



She seems like a very unpleasant woman, and quite probably drunk or on drugs. She shouts foul language and generally makes a nuisance of herself. There is a sense in which she can be said to violating the rights of her fellow passengers — their right to peace and quiet. If this were private transport, you might expect her to be banned, possibly for life, for harassing customers.

But does it matter that her tirade was "racially aggravated"? Does she deserve a harsher sentence than someone who shouts similar abuse at rival sports fans, fat people, rich people or smokers? If she had restricted her rant to Polish people, would it have been any better? Should the law really consider skin colour more important than hair colour, height, physical attractiveness, or intelligence?

I think not, and I find it very disturbing that the notion of racially-aggravated crimes exists.

How many countries in the eurozone?

That's right, according to BBC News, the "27 countries of the eurozone make up the largest trading partner for the US".

Schoolboy error, or wishful thinking?

The Lib Dems and Oxfam

When I blogged about Oxfam last September, I wasn't aware that Daniel Hannan had covered the same theme back in 2008:

Is there anyone out there who just happens to support deeper European integration? Without being paid to say so, I mean?

I ask the question perfectly seriously. When he introduced the Bill to ratify the Lisbon Treaty, the Foreign Secretary, David Miliband, made a song and dance about the fact that it wasn’t just Labour politicians who backed the wretched thing. A whole range of NGOs, he told MPs, had also come out in favour.

“The NSPCC pledged its support, as have One World Action, Action Aid and Oxfam,” he said, looking typically pleased with himself. “Environmental organisations support the treaty provisions on sustainable development and even the commission of bishops supports the treaty. This is a coalition, not of ideology, but integrity”.

Integrity, eh? Within a few hours, Eurosceptic blogs were pointing out that every single organisation he had cited received money from the EU (hat-tip EUReferendum.blogspot.com).

He linked to this old Conservative Home post from his latest blog, which considers how unfit the Lib Dems are to claim the legacy of classical liberals:

The Lib Dems, we read, want to be like Oxfam. I'd have thought they're more than half way there already. I've blogged before about the way in which Oxfam seems more interested in lobbying against free trade than in distributing medicines or building schools. Nothing wrong with advocacy work, of course; on the contrary, it's heartening to see people taking up causes in which they believe. I wonder, though, how many grannies chipping in their tenners know that Oxfam gets more than £30 million a year from the EU? And that it then uses some of its resources to lobby for closer European integration? Oxfam, like the Lib Dems, has generous and public-spirited supporters but corporatist and worldly chiefs.

The whole article is well worth reading.

Gerald Warner on forced funding for political parties

A good article from Gerald Warner for Scotland on Sunday:

‘IT IS difficult to conceive of a more difficult climate in which to propose any increase in public support for political parties.” Those insightful words came last week from Sir Christopher Kelly, chairman of the Committee on Standards in Public Life.
...
Unfortunately, despite delivering himself of this common-sense verdict, Sir Christopher’s committee recommended exactly the suicidal course of action he had just identified: taxpayer subvention of the predatory gangs that call themselves political parties and have brought Britain to its knees over recent decades

Warner concludes:

Party politics is not about “public service”; it is about egomaniacs attempting to impose their views on society or, less harmfully, good old-fashioned self-seekers looking for a cushy billet. If they cannot find backers willing to support their mostly unhealthy ambitions, it is in no way the duty of normal people to part with their dwindling cash to support them. Any attempt to impose such a burden on taxpayers, as even the parties seem now implicitly to admit, would provoke a tsunami of resentment.