Topic: Economics

Lots of comments about how exchange rates and equity-price movements show that the UK is (a) doomed or (b) well-placed post-Brexit. Movements and values over a few days tell us nothing except the climate of hope or fear in those few days…

Is Ed Balls a knave or a fool? On Newsnight, he just compared eliminating the deficit in four years to paying down a mortgage in short order. Let's consider the form that analogy should take if it were to reflect reality. Having engaged in…

Boris Johnson is quoted in MoneyWeek as having said to Management Today: "To the banker bashers I say, what's your economic model? We can't ignore and hate the bankers. What would that achieve? Show me how reducing financial services boosts…

I'm feeling a little damp. Or at least, feeling like I look a little damp to others. I've found myself on what many would perceive as the more moderate, centrist side of the argument several times recently. I think I'm a “fractional…

Maybe they really were the good times. The last few years didn't feel like it, but at least the Government was subtle enough in its winner-picking that I would have to explain how its targeted measures were really supporting losers. Now…

One feature that distinguishes the current financial crisis from earlier ones is how widely the problem is spread. We have had bigger public debt than today, but never with so much private sector debt. We have had leverage-fuelled bubbles…

You may be interested in an article of mine at the Cobden Centre website. Received wisdom is that governments should try to ameliorate the impact of the economic crisis by setting interest rates artificially low and penalising prudence. The…

According to Angela Knight, Chief Executive of the British Bankers' Association: "A bank is like any other business - if its fixed operating costs go up then so does the price of its product." Angela has provided a nice illustration of how…

The economic debate is coalescing increasingly into two camps: those who think that the Government can prevent a further economic correction through deep spending cuts, and those who think that the Government can prevent a further…

Be wary of strong drink. It can make you shoot at tax collectors... and miss. (-Robert Heinlein-) When there's a single thief, it's robbery. When there are a thousand thieves, it's taxation. (-Vanya Cohen-) HMRC, King Gord's tax collectors…

The energy companies? Our central bankers and Treasury representatives? Or both groups? In America, prices fell in April, led by reductions in the cost of fuel and other energy. From The New York Times: -"Consumer prices over all fell in…

On -Question Time- tonight, there was yet more discontent with the politicians* claiming that "the people had voted for a hung parliament". It is becoming a well-trodden but sterile debate for most non-politicians to point out that none of…

I hope to examine this in more detail later. But I wanted to get on record as soon as possible that the events of the last 48 hours have taken a decisive turn in the battle between inflation and deflation. Commentators backing one or other…

What do they teach these people on Oxbridge human sciences courses? First the Cameroons demonstrate their ignorance of what it is that is holding British business back (clue: it isn't that it takes 14 rather than 7 days to register a…

The Real World Economic Review is taking votes for its Ignoble Prize for Economics, "to be awarded to the three economists who contributed most to enabling the Global Financial Collapse (GFC)." The shortlist is outstanding, and indeed many…

A couple of months ago, I sat next to a leading economist, reputedly of the free-market variety (though our conversation led me to doubt it). I suggested to him that GDP was not a good indicator of the health of the economy. He said he…

In a speech reproduced at the excellent Cobden Centre website, James Tyler argues for the introduction of a free money system (i.e. independent, private issuers of currency). This is part of the ongoing debate between sound-money advocates…

I think we in secular society are missing God. Too many people have an inflated estimation of human understanding, power and impact. They think that our economic activity can be understood and controlled to everyone's benefit by a few…

These programmes¹ are examples, like the EU-ETS, where government intervention hands commercial advantage to the VILE (Vertically-Integrated Large Energy) companies, to little beneficial effect. The VILE companies point to the fact that…

I've been angry for years about the level of economic ignorance amongst politicians, civil servants, journalists, financial professionals, intellectuals, the public, and, above all, the mainstream economics profession. Though every…

I can't beat the beautiful job Richard Tyler did in yesterday's Telegraph on a classic example of winner-picking under our Lord and master's revived industrial policy, so I'll just quote bits of it. Click the links to read the articles…

-The Economist- just published its suicide note. Unusually, it has done it well in advance, in the full flush of health and optimism. But it has nevertheless committed itself fully to a course that guarantees its eventual demise, or at…

Here's a bemusing statistic to follow on from the earlier post. -Question:- Given that the US federal deficit is expected to be $1.8 trillion this year, taking the total national debt to $12.8 trillion, by how much does the US government…

The left tend to enjoy a smug, patronizing sense that their views are the product of great intelligence, altruism, and encyclopaedic knowledge, while the right owe their views to ignorance, prejudice and a brutish love of money. But for…

It is becoming popular amongst Keynesians (and perhaps some monetarists too) to suggest that Western governments do not have a deficit problem, they just have a hiatus in their tax receipts. Government's job, therefore, is to help the…

The All Party Parliamentary Group On Peak Oil (APPGOPO) has released a report backing Tradable Energy Quotas (TEQs) as "the fairest and most productive way to deal with the oil crisis and to simultaneously guarantee reductions in fossil…

Is it me, or is Robert Lucas's apologia for modern, mathematical macroeconomics in this week's -Economist-, effectively saying that their models are pretty good at predicting the economy will carry on in the direction it's currently going…

Many of the more delusional, socialist contributors to the Claverton Energy group of energy fantasists (as I labelled them previously to their founder member's apparent offence) are persistently and vehemently opposed to "growth". See, for…

According to David Kidney, Energy Minister with responsibility for fuel poverty, the Government has -"spent £20 billion helping people in fuel poverty since the year 2000"- (it's near the end of the interview). At 3.5 million, the number…

Here's a graph from the Renewable Energy Strategy, of a type that the Government has been growing increasingly fond, as it steps up the complexity of its efforts to calculate outcomes and costs of support policies:   The first and most…

Just came across a post on Richard Murphy's blog (via Bishop Hill and Tim Worstall, who have both been laughing at a more recent contribution from him) that claimed to show that cutting public-sector jobs would cost the government more…

A couple of weeks ago, I went to a drinks party for a Climate Campaign organized by the Conservative Energy & Climate Change team. The crowd was amiable enough - mostly pin-striped types with a leavening of tweedy country squires and the…

One of my new socks has a hole in it already. That's no surprise. Nowadays, at least one of each pair that I buy usually develops a hole within weeks. Or I buy size 10-12s and within a couple of washes, they are down to a size 8 (I am a…

The choice for countries like Latvia, whose currency-peg to the Euro is crippling their economy and which have borrowed heavily in Euros, is routinely presented as devaluation or deflation. Either they must allow their currency to float…

The core business of our family company is producing aggregates (sand and gravel) for the construction industry. I focus on our energy activities, and don't have much to do with gravel, so wouldn't normally comment on it. However, what I…

The press seem determined to ignore a crucial aspect of Peter Mandelson's accumulation of power. They are very interested in the symbolic and honorary aspects, such as the award of the titles of First Secretary of State and Lord President…

Further to the earlier post about the dumbest economic argument in the world, the perpetrator (Mark) has now published the results of his poll, which asked "-Who is best placed to decide what to build on any particular plot of land?-" He…

Following an interesting debate with Paul Halsall on Austrian economics and the possibility of economic calculation in a socialist system, Paul posted half the text of an Anatole Kaletsky article in The Times, which made various spurious…

Fingers have been pointed in the direction of many different culprits for the critical condition of our economy. I am surprised that they have not been pointed more frequently at Sir Callum McCarthy. We don't need to swab him for gunshot…

I have been having a debate with Paul Lockett on Tim Worstall's site, which I have found very interesting and illuminating. The topic was the TPA's green-tax-calculator, and what it said about costs of carbon in this country. I claimed that…

Nick Monether of Greenfields Consulting has launched a petition on the No.10 website, to press the Prime Minister -"to Adopt a Carbon Tax ratified and harmonised with the EU and the G20"-. As the petition explains: -"The tax payer and/or…

Noticed this poster at a tube station today: My immediate thought was: none of your bloody business. (After a moment's additional thought, perhaps I should moderate that to: none of your bloody business between the two on the right, and…

On 7 April, I posted an article comparing the car-scrappage schemes with Bastiat's broken-window analogy. The following is the leader from today's FT:   Great minds think alike.

-What is market value other than "the community's valuation of the external costs and benefits of the activity"?- External costs and benefits are, by definition, costs and benefits that are external to the market value. If they were within…

From the English Eclectic blog of Paul Halsall, a socialist historian, in somewhat self-deluding response to Iain Dale's suggestion that we might have to cut public spending: 'I would expect that within less than 10 years we will have the…

Henry Hazlitt, in his marvellous Economics in One Lesson, cites Frederic Bastiat's exposition of the broken window fallacy. The fallacy is that vandals breaking a shopkeeper's window have benefited the economy, because the glazier will get…

Preliminary data released today (as reported in EurActiv, and picked up by OpenEurope) indicates that emissions from the sectors covered by the EU-ETS fell 6% in 2008. Naturally, the pro-EU-ETS brigade have hailed this as evidence that the…

What does it mean if a government has to go to the IMF for funds? The government couldn't run a balanced budget. The economic outlook was so poor that there was little prospect of the budget coming back into balance over a reasonable…

I am a supporter of and enthusiast for the Institute of Economic Affairs (IEA), the leading free-market think-tank. So I was shocked to read, in what I think is the best post I have seen on Guido's site, that the IEA's Shadow Monetary…

Besides each candidate's name on the ballot paper should be their declared annual budget. The successful candidate's budget will be raised from local taxes. There will not be any indexing. There will not be any expenses or other allowances…

Tim Worstall covers the efforts by Dan Mitchell to persuade the American government to step back from its efforts to clamp down on tax havens. This is picked up and expanded at Sounds in the Hickory Wind (nice blog, added to the blog roll…

-"Borrowers have been warned they face higher mortgage rates for up to nine years as banks hit customers with the cost of tighter regulation."- So begins the lead article in the Money section of this week's Sunday Times. The problem, it…

Privatisation became the totem of the 1980s efforts to move our economies away from the disastrous, increasing socialism of the previous century and more. I propose that the equivalent focus of policy that is needed today should be…

Charles Steele has posted a brilliant, accessible explanation on his Unforeseen Contingencies blog of why the stimulus and "make work" plans of most of the major governments are based on bad economics. I can't do it justice in a sentence…

Gordon Brown wants us to make a mental connection in some way between our financial troubles and the competitive tax regimes in countries like Switzerland. I have just come back from Switzerland, where we are looking at investing. The…

John Prescott has just repeated, on -Newsnight-, the Labour party's favourite myth, barely challenged by the opposition, media or academia. According to the myth, the Labour government ran the economy successfully for the decade preceding…

We might have done nothing. That would have been utter ruin. Instead we met the situation with proposals to private business and to Congress of the most gigantic program of economic defense and counterattack ever evolved in the history of…

Prices in the EU Emissions Trading Scheme (EU-ETS) have hit new lows in Phase 2 (just over €10/tCO2). The mechanism became worthless in Phase 1. It looks likely to do the same in Phase 2 (as some of us predicted). It is not providing…

The latest spate of humbug surrounded the "British Jobs for British Workers" strikes. Even the application of the term "strike" was a piece of humbug. The protesters didn't work there, so how could they go on strike? This was secondary…

On Radio 5 this afternoon (5 Jan), Seb Coe said something like "It is often forgotten that, between now and 2012, the Olympic preparations will make up around 5% of economic activity in the capital". It is one example of a common refrain in…

I've been beating a fairly solitary path on this for a while, and in the process making myself unpopular with the major players in the electricity industry (which provides another clue to the huge rent-seeking potential of cap-and-trade…

My policy of paying no attention to the news had been going well, and then the boss decided that we simply had to respond to an article in -The Times-. So it's temporarily back to banging my head against a brick wall, as you may have…

Apparently “-No government should ever be in the business of protecting executives who make the wrong call or bad decisions-,” or so said Alastair Darling at the opening of yesterday's conference. But isn't this exactly what he did little…

So the Government has promised that it will guarantee Northern Rock savers by underwriting £28bn of deposits? Darling has, in theory, just nationalised the savings industry - yet you get the distinct impression that he is making this up as…

Mark Wadsworth (whose blog is one we recommend in our blogroll) managed to get a long (by their standards) letter published in yesterday's FT, criticizing John Redwood's focus on reducing corporation tax, when in Mark's opinion greater…

The Institute for Paternalism, Protectionism and Regulation today published a report on Energy Security. It is, in the most part, a rehashing of received wisdom, without understanding or insight, but one phrase in the Executive Summary…

Tim Worstall picked up yesterday on George Monbiot's rant against "neo-liberalism" and its promoters in the Mont Pèlerin Society and elsewhere. George names a large number of participants in the global conspiracy to promote the view "that…

Cap-and-trade mechanisms scored early successes when deployed within national boundaries against pollutants like SO2 and NOx. That success led politicians and economists to think that the approach could be extended to all emissions, and to…

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Tim Worstall has challenged, in a recent post, the logic of the DfT's suggestion that Air Passenger Duty (APD) needs to be increased further to take full account of the contribution of aviation to carbon-emissions. By Tim's calculations…

So John Redwood has spelt out the future of the economy with a raft of tax cuts. So John Redwood has spelt out the future of the economy by promising that a Tory government will ensure the stability of the economy before committing to any…

It is being reported that in the first few weeks of government, Gordon Brown has announced a total of 40 government initiatives at a cost just shy of £40bn!  A pretty hefty sum in just a few weeks - confirming that his grip on government…

Cc: Iain Dale, Andrew Mitchell, George Osborne and anyone else interested in really helping the world's poorest, rather than token gestures and photo-ops Read this, and then ask yourself whether the lessons you learnt from a brief trip to…

Changes to EU rules may put many British winemakers out of business, The Observer reported yesterday. Britain being an inhospitable country in which to ripen grapes to their full sugary concentration, British winemakers often add sucrose or…

I am much obliged to Paul Nollen, with whom I have been having a discussion about the Basic Income concept, for pointing me at Bernard Lietaer. Here is how Professor Lietaer's Wikipedia entry begins: Here is what Professor Lietaer has to…

Interesting post over at Bearwatch, on the recent purchase by the UK government of a huge quantity of US securities, and the risks to both the American currency, and to British reserves as a knock-on effect. As we all know now (and some…

The latest publication from the IEA landed through the letterbox yesterday (I can't say plonked or thudded, because the IEA publications are always of eminently digestible proportions). It is on one of the most important subjects of modern…

So wrote Ludwig von Mises in his 1929 book, A Critique of Interventionism. He could have been writing of the state of our political and academic debate today. The Sunday Telegraph reports that "Gordon Brown is drawing up plans to vary the…

A couple of months ago, I suggested that the claims for the benefit of the Tory trip to Rwanda might be inflated. In the current mood of dissatisfaction with David Cameron, much of the media and many private commentators are making cynical…

Having had a meeting today with civil servants at the "new" Department for Business Enterprise and Regulatory Reform (i.e. the DTI with a bit chopped off and a bit stuck on), it is clear that their position on all issues is now that they…

Two excellent Camoronisms spotted yesterday: Tim Worstall picked up Dave's ignorant currying of favour with the music industry. Hoping for some "Cool Britannia" credit at the next election? Or just dumb? Snafu at Not Proud of Britain…

In 2002, Pat Gunning wrote a paper (How to Be a Value Free Advocate of Laissez Faire: Ludwig von Mises's Solution), criticising Murray N Rothbard's criticism of Ludwig von Mises's advocacy of laissez-faire policy whilst maintaining a…

Is Gordon having problems with his new Business Council already? Curiously, if you go to the No 10 website and look at the index of press releases, there is no mention of the one announcing his plan for the cosy group of corporates advising…

The BBC ran a half-hour promotion on Thursday night for government-funded investment in businesses or technologies that government judged to be promising. In other words, a promotion for picking losers (the policy, not the site, sadly). I'm…

Some people claim that Nicolas Sarkozy is France's Margaret Thatcher. Yeah, right. To quote from the BBC report: "A reference to 'free and undistorted competition' was pulled from the draft [Treaty that isn't the Constitutional Treaty…

I have long been a supporter of self determination. That is to say, if a country wants its independence then it should be granted, or in cases like Gibraltar (for example) if they want to remain part of the UK or return to being part of…

What exactly is the point in the tax credit system?  It seems to me just a way of confusing the tax system as much as possible so that people are so baffled they mess up their claims for what is rightfully, under the system, theirs.  The…

One of the things that America does better than us Europeans is its inclination to give (at least in business) another chance to those who at first don't succeed. Whilst bankruptcy is seen in Europe as evidence that someone is not to be…

The government can not do IT projects.  Not a revelation to regular readers of Picking Losers, but even civil servants are now accepting the hard facts.  Joe Harley, chief information officer and the official in charge of IT at the…

What makes Gordon Brown think that he can effectively steal? He is set to launch an initiative to raid dormant accounts to raise £300m. OK, the money will be put to what the Lottery commission believe are "good causes", but I still don't…

The Willetts speech on education is causing waves in Tory circles, as they vie with each other for who has the best idea for the standard (or perhaps two-model) offering that should be provided to other people's children. It's yet another…

Clemency Burton-Hill (a multi-talented individual and real fox to boot, so I'm sorry to have to take the piss, but this is too good to ignore) reports in this week's Spectator that the Tories are "fighting back" against Gordon Brown's lead…

After reports yesterday about the Government issuing warnings to keep quiet about the their plans for fees on rubbish collections (on top of council tax), there are more reports today of "behind the scenes" policy making that would not go…

The time is drawing nearer and nearer where Tony will have to finally announce he is stepping down and the long, long awaiting "-leadership contest-" can finally begin. Since the Labour conference last year where Blair had them screaming in…

The government is being urged to get VAT removed from school clothing - and quite right. It is the government that back schools having a uniform promoting the benefits of equality, i.e. no fancy Dans coming in with all the latest street…

While I was away, I received a copy of this letter from Bob Durward (chairman of the classical liberal New Party) to David Milliband. Bob has allowed me to reproduce it here. I hope it tickles you as much as it tickles me. To: Rt Hon David…

Forget about what the BBC, the Government or the Tories say about the impact of the changes to personal taxation and benefits announced by Gordon Brown today. Here is what it really means for people of working age (comparing the current…

The BBC's reporting of the Budget debate on Radio Five Live has been fantastically lop-sided. On the most basic measure - air time - they broadcast the whole of Gordon Brown's speech but cut off both David Cameron and Ming Campbell mid-flow…

Only a couple more hours and Gordon will giving his final Budget to Parliament. There will be much patting on the back by his loyal followers, though probably mostly by himself. He will claim the longest period of economic growth in the…

With the budget coming up next week, it is that time of year where Gordon Brown lays it on thick that this country has never had it so good and that we have seen ten consecutive years of growth and he has been the longest serving chancellor…

The Tax Payers' Alliance has exposed one of the reasons why our council taxes are rising well above inflation every year - to pay big bosses. The number of local authority staff earning more than £100,000 jumped from 429 in 2005 to 578 last…

The attacks on Gordon Brown's high taxation, high spending polices are becoming more and more frequent on this website. It it not the intention of picking losers to target individuals nor is it partisan. However, it is of course more likely…

You have to hand it to him, Gordon Brown is a highly successful opportunist. If it can be taxed, it will be taxed and the less people realise what he is doing the better. The Dour Scot is famed for stealth taxes but it's the way he makes…

The Economist has been talking up prize-giving as a good way to get the maximum bang for your charitable buck. In response to a flippant remark, suggesting prizes to solve the riddle of the missing NHS billions, from the excellent Dr Steele…

The average council tax bill is set to rise another 3.8% this year - an incredible 90% increase since Labour came to power! And surprise, surprise - the lowest rises are in the 238 districts that face elections in May, weeks before Gordon…

Anyone (other than the specialists who get paid to produce them, or pressure groups and politicians who use them to justify intervention in favour of their special interests) who has looked with a critical eye at the Cost-Benefit Analyses…

Rather a big question for a blog posting. This is not going to provide an answer, but a couple of observations. Trying to measure inflation objectively by means of indices is nearly impossible. Take wage inflation, often seen as one of the…

Congratulations to the Gordon Brown who has claimed to have made a whopping £13.3bn a year efficiency savings across Whitehall. Fantastic headlines for our PM in waiting. Chief Secretary to the Treasury, Stephen Timms, has described the…

The Heritage Foundation has recently brought out the 2007 version of their annual Index of Economic Freedom. This assesses and scores countries according to their performance on a range of factors, and then combines them to provide an…

British film industry seems to be doing better than ever. The UK Film Council recently revealed that £840m was spent last year (up by 48% from 2005). Also more studios are coming to Britain. The change has occured after the introduction of…

Wat Tyler posted an entry on his excellent Burning Our Money blog, pointing out that yesterday's interest-rate hike was a positive sign that the Bank of England Monetary Policy Committee were deciding to get back on top of inflation, not a…

The re-elected Venezuelan president, Hugo Chavez, yesterday announced his plans to nationalise the main telecoms company and the likely nationalisation of a power company. The announcement is part of President Chavez's pledge "to radicalise…

The Treasury are forecasting, according to the Daily Telegraph, that the tax burden "will rise for 50 years" - in other words, until long after most of us are dead. Our tax-take will rise from 38.4% at the moment to 41.6% of GDP, and public…

The tensions of excess, both in private and public sectors, are starting to display themselves in debates over the just level of wages for various occupations. These debates occur every now and then, usually provoked by a sense of disparity…

National Audit Office's report has found that information on whether 12 out of the 14 Department for Education's key targets set by the PM and Chancellor will be met is likely to be unreliable. The monitoring of only 2 targets was approved…

The Chancellor has raised taxes by £6bn since the 2005 general election A family pays £200 per year more taxes But  He promised £200 for every pupil in the PBR but only £20 is new money He promised £36bn for education in the PBR but only…

The Chancellor has commissioned 39 indpendent reviews since 1997 and most of them have quickly disappeared without making any impact. At first it seemed a good idea to bring in outside expertise but increasingly such reviews only justify…

Yesterday's Pre-Budget Report was another example of Gordon's nannying. Now mothers will receive child benefits even before their baby is born and more worryingly the Government will provide books to children up to the age of 11. The…

Tony Blair promised to cut red tape for business by 25% yesterday (28 Nov) in his speech at the CBI conference. In his address today, Gordon Brown is expected to announce reforms desinged to deliver a "more modern, simpler and consistent…

The Olympic bill has risen by 40% since the Games were won last year and its is likely that it will go up even further. The Government must sort out this chaos at once and it needs to get a grip on all the costs and where the funding will…

According to their website, the CBI's mission is: "to help create and sustain the conditions in which businesses in the United Kingdom can compete and prosper for the benefit of all" and their policy is: "decided by our members – senior…

According to the joint report by the World Bank and PricewaterhouseCoopers (PwC) British companies have to struggle with 8,300 pages of tax law, behind only India, and  the rulebook has doubled over the last decade. This is a clear sign of…

The BBC reports that the EU employment ministers are meeting this week to discuss the EU working hours law. As a EU rule, the current proposals are complicated - set normal hours, overall maximum hours and the option of opting out. If the…

For the past decade, the West has been relatively immune to price-/wage-inflation, despite significant expansions of the money supply and movement of various national balances from credit to debit, thanks to the deflationary effects of…

The Telegraph nearly wrote this entry for us. They have listed the winners from the recommendations of Michael Forsyth's Tax Reform Commission: A couple with two children, one under five, with one earner working 30 hours a week and earning…

Gordon Brown has pledged to "cut red tape" for at least the third time this year, according to the Telegraph. This might seem a strange thing to criticise on pickinglosers, but we do so, not because it would be a bad idea, but because we…

I don't know if this is exactly a case of picking losers, but it certainly falls into the category of stupid policy assessments, and they usually end up with more losers than winners. Anyway, it is so stupid that I had to post about it. I…

Age discrimination is self-defeating. Companies that employ less suitable people simply on the basis of their age will do worse than companies that employ the most suitable candidates regardless of age. But that is not the same thing as…

Gordon Brown has come out in favour of devolving power. But his idea of devolution is a little different to ours. Ideally, power should be devolved to the individual. (Actually, ideally the individual, not the government, should have the…

Gordon claims that Britain is enjoying the longest period of sustained growth in its history.  Is he fiddling the figures or simply making it up?  Or is he really the greatest of all time?

The Daily Telegraph reports today ("Treasury blocks move to flat rate inflation") that the Treasury has blacked out several arguments in favour of introducing a "Flat Tax" (a single rate of tax across all income levels) in a report on the…