All change please, all change

I've decided to move my blog to Wordpress, as the Blogger editor has been getting pretty grating lately.

Come on over, do the twist....

The Madman and the Scrivener

Re-reading some Herman Melville, I think that those who doubt our ‘special relationship’ with the US need look no further than the disedifying spectacle of the current condition of economic and healthcare debate on both sides of the Atlantic.

Here, we have a Regency-faced, pink-fingered lackwit Chancellor, pursuing a policy of expansionary fiscal contraction with Captain Ahab’s disdain for human suffering and cost. 

Like Ahab, Osborne pleads mystic nonsense in the face of the facts.  Those factsare that  the intellectual foundation of his policy was refuted by the IMF last autumn, and on the basis of current confidence, unemployment and growth numbers is an abject failure. 

Never mind; it is the wrong kind of snow, or the wrong kind of inflation.  We will not turn back.  A government who taught us to fear debt now relies on us taking on more per family than ever in order for our economy to grow.

Like Melville’s great anti-hero, Osborne has shed care about whether his vessel will gain a profit from its adventures: as one of his crew recently informed his American friends, this is a mission of zeal for its own sake.  As on the Pequod, a golden escoudos doubloon, nailed to the mast, awaits the sailor who can raise the elusive white whale of business investment, which Osborne, unbeknown to himself, seems intent to kill.

Meanwhile the Health Secretary Andrew Lansley is proving as obdurate as another of Melville’s creations: Bartleby the Scrivener.  Pallid, unloved, alone, he will not ditch his “mad” and “deluded” (British Medical Journal) scheme for the NHS.  Recent pitiable showings at the dispatch box demonstrate this stubbornness is for no more scrutable a reason than Bartleby’s, who simply “prefers not to”.

Lansley has failed to make any case whatsoever for how or why his reforms (that lovely codeword for change you are supposed to like) will make significant improvements to standards of care or why this giant jabberwocky of primary legislation needs to hit the statute book now.  His encyclopedic knowledge of the currently system only serves to make this failure all the more stark and absurd.

But, like Bartleby, having refused to do more work for the time being, Lansley will not leave and take his insane idea with him.  For the sake of his minority party’s political expediency Lansley keeps the largest employer in Europe on tenterhooks. 

Buttressed by Clegg and Cameron, replete with the swivel-eyed rhetoric of David Iyke, Lansley today tells the public, healthcare professionals and their professional bodies, and the majority of parliament that the only reason why they don't want his changes is because they don't understand them.

And back to Thatcher: if you don't like it - you're an enemy (of, among other things, "enterprise" in its own right and for its own sake), a protectionist, a member of a self-serving club. 

Such is the insane hubris of the pointlessly devout.

As reward for his utter failure, Lansley’s political fate may echo Bartleby’s, rotting in the prison of the backbenches while (as is rumoured) the ever-pliant Vince Cable finishes the job for the benefit of the private healthcare companies, management consultancies and their well-dressed salad of stooges, flackies and pseuds lurking at the door.

The Americans, meanwhile, have a bizarre menagerie of their own to contend with.  Thanks to brainless brinkmanship and a Republican fetish for reinvigoration by irresponsibility, the fate of the US public purse and healthcare are likewise in jeopardy. 

Paul Ryan, branded in many simpering stateside media outlets as a “intellectually audacious” star of the Republican party, has revealed himself to be a mendacious math-phobic Randroid, by way of his recent healthcare privatisation plan and overreaching budget proposal.  Both have been politely eviscerated by the non-partisan Congressional Budget Office.

Congress has also been treated to the astonishing return of a balanced budget amendment, under whose auspices weven Ryan's draconian budget would be unconstitutional, and which would force the Supreme Court to have Congress reduce the American state to its size in 1956, before there was any state aid to healthcare or comprehensive social security and when a third of all Americans lived in poverty.  However madly rightward we are headed, the Americans seem to always manage to tack further still.

The best one can say about our misguided Chancellor and his feckless counterpart at DfH is that, compared with Messers Ryan, Boehner & Co, they look almost sane. But, as Melville’s writing illuminates, such seeming sanity is the most dangerous mindset of all.  Better that both quit before the ship is sunk.

Higher education funding: a mess

Excellent article today by Duncan Robinson on higher education fees, in which he describes current government policy as "incoherent" and "a mess".
The economist J R McCulloch said that, in order for a parrot to make it as a passable political economist, it need only learn to repeatedly squawk "supply and demand, supply and demand".
Duncan's article channels Pubilius Syrus and McCullogh's parrot to cut to the chase: the price that universities will charge for a degree is determined by what students will pay for it.  Moreover, this is the system Clegg has created.
In a situation where thousands more students want to go to university than are places to accommodate them, and where the fees - though high - are paid by way of long-dated earnings-contingent debt on less than commercial terms, that price is going to be the maximum permitted under the current system. 
To this I'd add that it is stupid for Clegg to crib about this when the whole underlying ethos of the reform is to marketise the system further on David Willetts's assumption that students are rational consumers.  If the fees are really too high, let unis levy them: rational students will think they are too expensive, and will shun these unis accordingly.

Clegg's complaint is a complicit admission that this will not happen, and that, therefore the reform is not a good one because the new market in higher education was born to fail.

The uncomfortable truth for the Liberal Democrats is that, given the method of repayment available to students, the threshold at which students who belong at university begin to question whether to go is likely to be significantly higher than £9,000 a year.

This has already created a situation where all universities can jack up their fees (they are, after all, for the most part simply still taking money from the state anyway) and be confident that students will suck these up because of (1) fear that in order to get a job in an horrific market, they need a degree and (2) the (still) cheap copper-bottomed credit on which these fees can be paid.  For Clegg, this is - to borrow his flaccid vocabulary - "unfair".
To address this unfairness, Clegg wants to rig the market by arbitrating who should get £9k and who should get £6k.  This is a shitty way of doing things, because it undermines the efficacy of the reforms (whether or not you agree with them) and denies mediocre universities to bank some cash for medium-term reinvestment, so they can stop being mediocre, a position they have been forced into by the massive cuts to teaching grants. 
It is hypocritical to create a system whereby universities can only make cash by making a profit on current students to the benefit of future ones, then to attack universities that responsible do just that.  As Duncan points out, this is the absurd cart-before-horse position that David Willetts has taken.  As this is the government of "sustainable investment".
So, Clegg's remedy essentially seeks to entrench a two-tier higher education market.  His message to several Unis appears to be "you are crap; you should stay crap".  He seems unconcerned that for most mediocre universities, changing to the new system will result in a net cut in income of £1,000 per pupil per year.
Going back to McCullogh's parrot, the current imbalances in the higher education market are only going to come from a reduction in demand or a drastic reduction in supply.  An increase in supply is unsustainable and undesirable: education is about competition and elitism, I'm afraid. 
With the current funding structure, the Coalition has made it's preference for a "starve the beast" supply shock pretty clear.  It looks like several unremarkable universities that expanded on debt will go to the wall.

The alternative, a slump in demand, seems unlikely.  Teenagers are not rational consumers, but they do know that the job market expects them to have a degree if they want a decent wage.
If Clegged, the higher education market will see a reduction in supply with no concomitant reduction in demand or increase in quality to justify the increased competition. 
Added to all that is my concern, previously voiced, that the whole funding structure is improperly costed for the long-term, being a cynical game of debt three-card monte that makes Gordon Brown's PFI skulduggery look, well, prudent.

As Duncan says, a mess.

Dizzy, nausea, and a rambling ersatz essay on Aristotle

Aristotle: not a Libertarian

A friend pointed out to me that a right-wing blogger with a fair following called Dizzy (me niether) picked up on my letter to Miloco studios in his blog.  It appears he was also running around after David Allen Green –- liberal media lawyer and blogger for the New Statesman (recommended) – to raise a few specious points before putting mandible to keyboard. 

Today I got in touch via Twitter, pointing out that it was pretty sloppy to do so, when he could have just got in touch with me directly.  Given his obvious cluelessness about the topic at hand, I thought this was the sort of thing people who take pride in what they write, and have respect for their audience, should do.

All I got back was childish snark.

In his post, Dizzy simply links to my letter and lumps me in with some “po-faced lefties” taking interest in it (who include, hilariously, Green, the Jerusalem Post’s Martin Bright, and RollOnFriday, an irreverent news service for city lawyers (both also recommended)) despite my letter being the basis of the article.  

"Hey, intern. Get me a Campari"

 

The Life Aquatic With Steve Zissou:
a film almost entirley about unpaid interns

On Tuesday the journalist Martin Bright (Spectator, Jewish Chronicle, New Deal of the Mind) tweeted a link to what in my opinion -- and in a strong field -- was the most blatantly exploitative work experience scheme I have seen for some time.

The scheme was advertised by Miloco, the "UK's largest recording studio group", which has 19 recording  studios across London, and whose engineers work with some of the biggest recording artists of the moment.

Here's my PDF copy of the advert:

Paul Krugman: tell your kids to be plumbers

Paul Krugman recently referred to his 1996 article for the New York Times magazine, a kind of fake retrospective of the 21st century from 2096.

While essentially a bit of fun, the article is rich with interesting ideas, one being that technology will make white-collar, not blue-collar, industries redundant.  A more throwaway point has already come to pass:

"While business gurus were proclaiming the new dominance of creativity and innovation over mere production, the growing ease with which information was transmitted and reproduced made it harder for creators to profit from their creations. Nowadays, if you develop a marvelous piece of software, everyone will have downloaded a free copy from the Net the next day. If you record a magnificent concert, bootleg CD's will be sold in Shanghai next week. If you produce a wonderful film, high-quality videos will be available in Mexico City next month.

How, then, could creativity be made to pay? The answer was already becoming apparent a century ago: creations must make money indirectly by promoting sales of something else. Just as auto makers used to sponsor grand prix racers to spice up the image of their cars, computer manufacturers now sponsor hotshot software designers to build brand recognition for their hardware. The same is true for individuals. The royalties that the Four Sopranos earn from their recordings are surprisingly small; the recordings mainly serve as advertisements for their concerts. The fans attend these concerts not to appreciate the music (they can do that far better at home), but for the experience of seeing their idols in person. In short, instead of becoming a knowledge economy we became a celebrity economy."

With the recent permission for product placement in UK media, and the familiar tale of the decline of the music publishing business, this all seems almost trite. From 1996, however, this was still something of a punt, and a very accurate one from someone outside the "creative" sector.

Go read the article!  Beats Niall Ferguson's horseshit about "Six Killer Apps of Western Civilization" anyday.

Ed Balls joins the Ancient and Hermetic Order of the Shrill

What a complement to Ed Balls that he is now considered by Tory trouser-ferret and master of epistemic closure Matthew Hancock MP to have become a Grand High Vizier of the Ancient, Occult and Hermetic Order of the Shrill*:

"Balls' shrill attack on King

Matthew Hancock MP 6:49pm
Ed Balls’ irresponsible attack on Mervyn King is a clearly calculated attempt to undermine the Bank of England for Balls' own narrow political ends. Balls both approved Mervyn King's appointment and supported King as Governor when he was Chief Economic Adviser to the Treasury. Balls was central to creating the record deficit left by Labour, yet who has no plan for clearing the mess up.
Now he is attacking the Governor of the Bank of England for supporting the Government's plan to deal with the deficit. In what way is it political for the Governor to support the Government? I'd say that's deeply non-political."





There was me thinking it was entirly inimical to the institutional intergrity of an independent central bank for it's chief to comment on, let alone explicitly endorse, matters of fiscal policy.  And that it would be likewise improper for a chancellor to pre-empt the independence of the Bank's monetary policy decisions. If Hancock thinks these things are "deeply non-political", he's an idiot.  But, then he does play well to the rubes at the Speccie who do not think that they are rubes.

I also thought that the record deficit was not all Ed Balls's fault, but instead had something to do with, oh, this:

What we have here is crass, baseless "I know you are, but what am I?" mudslinging.  All the worse because Hancock has a background in economics, which he regularly prostitutes to shovel merde for a chancellor whose "lack of depth" and predeliction for being too "political" caused this previously dispassionate great concern.

Hail the New Politics: when an opposition politician calls out a flagrant brach of independence, he is "shrill".  Not incorrect, not ignorant of the facts, "shrill". 

Though naturally when the Speccie's Fraser Nelson goes on a rabid and incoherent economically illiterate (he compares stocks of debt with flows of currently produced goods and services - doh!) jihad against Mervyn King that even Hancock cannot endorse, and when Hancock ranted on the basis of no evidence whatsoever that the Uk was "broken and" near to bankruptcy, no shrillness is involved.

*for an explanation, see the ever-excellent Brad DeLong here and here.

The daftness of David Allen Green

New Statesman-bashing again (I know I know, but it's because I like the paper - and at least I'm reading it).

David Allen Green - of whom I should stress I am a fan - has posted a perhaps wilfully contrarian opinion of the Uk Uncut campaign.  In brief:

However, this campaign is misconceived to the very point of daftness. Companies have to comply with the relevant tax regime: they really have no choice.

DAG makes a fair point - the campaign is about tax avoidance rather than tax evasion, so political lobbying should be at the fore - but he has to skirt a few better ones to do so.

First, Uk Uncut is an awareness campaign.  And there is nothing "daft" about it's success on this score.  Tax avoidance is on the public radar to an unprecedented extent.  This is a good thing.

Second, there is always going to be a difference between the way bottom-up campaigns work to how top-to-top campaigns work.  Large businesses have the luxury of targeted, access-driven lobbying to get what they want.  The public do not.

It is also a rule of thumb that public campaigns involve a huge effort to tell people what is going on, and why it counts.  Lobbyists do not have to worry about this, being experts.  So a difference in organisational form and a lack of cohesiveness is inevitable. 

And yes, this will involve attracting the usual mangy gumbo of trots, weirdos and woebegones (see also the tuition fees campaigns).  It's a hazard of public campaigning that private campaigners don't have to worry about.

Third, note my mention of large businesses.  DAG, when talking about companies' requirements to pay tax, makes no difference between businesses large or small, when in practice large businesses have created a distinctly advantageous corporation tax regime of their own devising by taking advatages of outdated, poorly drafted, or disjointed tax law in an era of unrivalled freedom of international capital movement.

It is therefore fatuous to lump all companies together, when the large difference in effective tax rates between large ands small businesses has created a huge distortion in several markets (retail being perhaps the most pronounced): it is unduly difficult to compete with a company when you are paying 28 percent of your profit away in corporation tax and they are paying none or very little.  Some companies under current law are more equal than others.  There is therefore a strong liberal slant to the UkUncut campaign that DAG could be adding which I would welcome.  The tax avoidance issue is politically multivalent.

And while these companies are not telling people about the extent and impact of their non-trading tax-centred transactions, they have the ear of government in closed rooms, they are lobbying against the "jobs tax" and telling the govenment that it spends too much money and regulates too hard.  There is a split-peronality issue here.  It is necessary and proportionate to engage with these companies at the level on which they engage with us and tell them that we know what they are up to.

Fourth, on tactics and targets, companies are far more sensitive and responsive to public outcry that offices of state: Boots has to worry about being seen as a bogeyman in a way that the Treasury or the Revenue do not.

So, while UK Uncut is indeed daft when perceived as a lobbying campaign in the mould of say, the Institute of Directors or the British Banker's Association, it is pretty sensible when viewed as an public awareness group operating in the sphere in which that public operates (e.g. the high street).

Also, it is clear that we are, for the time being, lumbered with a chancellor keen to "listen to" big business.  The government's advisory panels are crammed with directors of international banks and big corporates, with the Federation of Small Businesses shut out.  Additionally, the chancellor is creating new loopholes, such as the ability to use offshore loan arrangements to reduce effective corporate tax rates to as little as 8 percent. 

In the face of this, a public campaign has to press into the gaps and points of vulnerability, just as these companies have done with the corporate tax code.

The New Statesman's Alice Miles is awful

I have been awoken from a blog-block (too much going on, Egypt etc) by the need to at least partly articulate a truth held by some to be self-evident:

Alice Miles, a tireless, repetitive peddler of radical centrism and chronicler of the blindingly fucking obvious at the New Statesman, is a terrible journalist.

Miles epitomises the consistently lazy hack, who gets paid to half-ass pieces of opinion journalism because she half-asses pieces of opinion journalism.  I would say this gives any NTCJ, based on what a truly shitty journo Miles is, hope that they too can get cushy commissions to write badly about nothing in national publications, but I can't, because it doesn't: national print journalism is one of the most stymied job markets in all creation, one in which the lump-of-labour fallacy might actually be true.

Consider, gentle reader, this article ostensibly about rising travel costs being ignored by "urban elites" but really about ....um, something.  Or maybe nothing.  All the ingredients for your basic Orwellian nightmare are here. 

We start with complete and utter irrelevance. From the headline, standfirst and photo, the article that is supposed to be about the ignorance or disregard the "urban elite" have about transport costs in general and petrol prices in particular. But we begin with a flabby pair of paragraphs about "men had to go to the jobcentre to fill in a form" to get a travel warrant (though Miles does not make it clear that that's what jobseeker's get, not "expenses".

Worse, every sentence so far is meandering, defective, contentless or mistaken: "At least £50 worth of bureaucracy and probably much more" (i.e. any amount of money other than £50) is typical of both her phobia of basic research and a contemptible idiom that actively destroys meaning.

Anyway, this drab episode is shoehorned into the, um, actual point of the article thus:

"It's just a snapshot of the way in which travel costs can have much wider economic ramifications than the inability to fill the tank without thinking much about it and drive down to visit your aunt on the south coast at the weekend."

No it isn't.  Firstly, it isn't a "snapshot".  It's an example, or (if she's lucky), an emblem. 

Secondly, it's evidence that the issuance travel warrants to jobseekers takes too long, and nothing more. 

Thirdly, it's a shonky, tendentious effort to push her usual Cameroon crap: people are out of work because of public sector inefficiency, not a general fall-off in aggregate demand following a financial crisis, a self-evidently absurd implication to make.

(No) jobs for the boys

Conservative voices have had little evidence that their predictions of "expansionary fiscal contraction" have come to pass: unemployment is stubbornly high and rising, GDP growth is flat or negative, our balance of payments deficit is widening, and so on.

Undeterred by reality, Fraser Nelson over at the Spectator claims "the British economy is not in some cuts-induced recession but, instead, doing rather nicely, thank-you".  All because of manufacturing.

Now, manufacturing is indeed doing well, supported largely by a fall in the trade-weighted value of sterling against major currencies of about 26 percent since Lehman collapsed.  Are we again to become the workshop of the world?

Erm, no.  Here's the employment levels in services compared with manufacturing since 1971.

We see services jobs more than doubling and manufacturing jobs more than halving. This is a long-run trend, uninterrupted by the huge manufacturing boom spurred by sterling's massive depreciation on Black Wednesday.

Despite booming since the crash, manufacturing has shed 20,000 jobs since the coalition came to power; a truly jobless recovery.

Manufacturing is also currently only 16 of GDP.  Even if the whole sector doubles in size (nigh impossible), it will not pug the jobs or GDP gap to put us back where we were in 2006.

The lesson?  Anyone who tells you employment and GDP will rise because we are selling more widgets to China needs to add some context and check their facts.

(Nelson also discusses corporate liquidity with embarrassing ignorance: companies hoarding cash instead of investing it is a bad thing.)