Immigration and the welfare state

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With Home Secretary Jacqui Smith raising the bar on immigration, the left have reverted to type in the face of competition. Of course, little has been heard in protest from Conservatives or Liberal Democrats either, which really is not surprising given the sustained concern about immigration among a large number of people in this country.

It is quite understandable that many hard-working people are worried about immigration. Their concern is less often racist or nationalist, but practical and rational: they don’t want to support more unproductive people in this country. This is why in order for libertarians to win the debate on immigration the welfare state needs first to be deconstructed.

Certainly, this will not assuage all the tensions that the movement of people brings, but at least when people see new families from across the waves moving in down the street they will know that it won’t be them that has to pay for their support.

At present, politicians are instructing bureaucrats to try to pick out individuals who will benefit the UK through a laborious and costly vetting process. From seeing friends jumping through the hoops it is clear that the tests are profoundly arbitrary and openly discriminate against migrants from certain countries for no conceivable reason.

For Britain to compete, people (excepting criminals) need to be free to move with much more ease in and out of this country. The welfare state is the biggest impediment to a reasonable immigration system and until it is radically reformed people will always be looking over their shoulder, concerned that an increasing number of people are living off their hard work.

World Statesman of the Year

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Junksmith thought he was seeing things when glancing over someone's newsapaper on the tube he saw that Gordon Brown had been voted World Statesman of the Year. However, it turns out it is true. The Appeal of Conscience Foundation even went so far as to say to him that: "your courage in defending freedom and human rights ... and also your key intellectual and compassionate leadership in these critical times, when financial upheavals raised societal tensions and international tensions". April Fools day has clearly come early for Mr Brown.

Bad idea alert

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I realise that Reform are on the side of the angels, just as we here are. However, I feel I must point out that I consider this to be a very bad idea indeed.

Democratic accountability provides the best means to hold senior civil servants to account. Democratically elected politicians should have the power to appoint senior civil servants.

Yes, I do understand the problem they're trying to solve, that the civil service is both self-selecting and has its own internal culture, one that is highly resitant to change. Any sort of change but most especially the sort of change that a newly elected government might like to bring into effect.

However, we have a real live system which works in the way Refom thinks we should move. The American one. Every new administration brings in three to four thousand of their own to staff the upper reaches of the Federal bureaucracy. Leading to things like this:

Alarm is growing that the Treasury Secretary Tim Geithner is being forced to operate virtually on his own without any of the 17 deputies his department is supposed to have representing him in important negotiations or helping to make crucial decisions.

The revolving door that shuffles people from law firms and think tanks, through a few years in the bureaucracy and back again is also the driver of the vast lobbying industry....or at least the recruiting ground for much of it.

Might I suggest that if Ministers are indeed incompetent at handling the civil service unaided then we either start to choose different ministers....or perhaps better, start to have less civil service which needs to be handled?

Blog Review 892

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Contrary to popular belief, it was the rich voting for Obama disproportionately, not the poor.

Yes it was leverage and no it wasn't. The banks weren't any more leveraged than usual: it's that the mortgages themselves were more leveraged than usual.

One fifth birthday that deserves to be celebrated.

Sad but true, Amnesty International has jumped the shark.

This isn't quite how quantitative easing works. Sadly.

Efficient, low cost health care. That's what the US is looking for, so it's odd that they make it illegal to provide efficient low cost health care.

And finally, cruel, cruel Guido.

Yes, you can be ignorant of theory and ignorant of facts

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As an economist Billy Bragg's a great singer. Commenting on the 25th anniversary of the miners' strike he asks:

Is there anybody out there willing to stand up – on this, of all days – and raise a toast to the wilful destruction of our manufacturing industry and its replacement by the financial services sector?

The first question has to be whether there has been a destruction of our manufacturing industry, whether wilful or not. Looking at the index of production, we see that it stood at 75.9 in 1984 and at 97.9 in 2008. A rise in output of some 29 % really doesn't sound like "destruction" to me. In fact, claiming that manufacturing has been destroyed would lead me to accusing you of being ignorant of the facts.

What has actually been happening is that the production process in manufacturing has been getting ever more efficient, productive, in its use of labour. Thus production can rise but the labour used to create it falls: what is really being complained about is the loss of manufacturing jobs, not the despoilation of the manufacturing sector itself.

And this is where I might accuse people of being ignorant of theory. For in reality we're absolutely delighted that we need to use less labour to get the physical goods we desire. That labour, newly freed up, can go off and do other things. Yes, work in financial services, or perhaps care for the rising number of elderly or even go and build more darn windmills.

As Paul Krugman has pointed out, productivity isn't everything but in the long run it's almost everything. Me, rather than drinking to the destruction of it, I'll raise a toast to the increasing productivity of manufacturing. It's one of the things making us all ever richer.

Another stupid decision

From this...

To this...

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Last week Hazel Blears, the communities and local government secretary, 'called in' (i.e. halted) plans to redevelop the Ram Brewery site in Wandsworth, South London, saying that "the proposals may conflict with national policies on important matters". The council, which has already subjected the developers to an extensive planning approval process, is understandably angry, saying the decision jeopardises nearly £1bn of private investment into Wandsworth. As a local resident, I'm pretty annoyed too.

The Ram Brewery development has the potential to completely transform the town centre. As things stand, the high street is very run down and full of speeding cars. On one side you've got the Southside (formerly Arndale) Centre, a desperately unattractive sixties development, and on the other a massive, disused industrial site – the Ram Brewery. Minerva Plc's £300m proposals would change that, opening up the River Wandle (which runs through the brewery site) to pedestrians, and building a new public square alongside new apartments, restaurants and retail and commercial space. The developers were also set to provide funds to improve local transport infrastructure.

As much as anything else, Blears' idiotic decision exposes the government's economic stimulus policies for the incoherent sham they are. When the government tries to tell us that borrowing money to finance unnecessary public sector construction projects would magically boost the economy and create new jobs, while simultaneously blocking enormous private sector investments like this one, it becomes clear they really haven't got a clue. And as for their professed enthusiasm for 'localism', well, we knew that was a joke already.

Still, Hazel Blears' still looks positively sensible compared with Battersea MP Martin Linton, who supported her decision, saying, "This is a real battle for the heart and soul of Wandsworth". Yes, that's right, the local MP apparently thinks the heart and soul of Wandsworth is a disused industrial site, a traffic-clogged one-way system, and a shabby, half-empty high street. Aren’t we lucky to have politicians fighting for our interests?

Click 'read more' for some images...

A check on spending

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The Japanese government has issued a stimulus package which will assign every over-18 citizen a 12,000 yen check, which they hope will be spent soon in order to break the 11 month spending fall. Unfortunately, such a measure will not create the stimulus that the government hopes for.  

12,000 yen is equal to roughly £87, so the people of Japan aren’t exactly winning the lottery here. Will this be a major determinant of going on a trip or making a big retail purchase? Probably not. Most likely, it will get people to go out for a nice dinner on a night when they typically wouldn’t have or keep younger people at the bar for a few more hours one weekend, but Japan most likely will not see a major difference in spending. 

For a country that has had a spending slump for the past year they are probably better off cutting taxes rather than giving out a measly stimulus check. At least a tax reduction could have a lasting impact on a consumer’s mindset, even if it is only temporary.

Unfortunately, this will not be the end of tiny stimulus moves by the Japanese government. They plan on pumping 2 trillion yen back into the economy at a gradual rate. Hopefully they'll come up with a better plan, or they will suffer another lost decade.

Blog Review 891

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Will the recession drive Eastern European birth rates even further down? And what effect will that have on long term demographics?

Cultural values and economic development. Yes, respecting the individual does promote prosperity.

Is environmentalism a religion? It certainly has many of the characteristics.

Why do governments like to control education? For the same reason that religions do, it creates acolytes perhaps?

No, seriously, things really have got better since the 1950s.

Understanding Rand: she was writing having seen the Leminists dismantling the capitalist economy.

And finally, couldn't you see this answer coming?

Sir Fred Goodwin and justice

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The ongoing popular witch-hunt of Sir Fred Goodwin over his pension is an interesting case. Principally the events show how weak a grasp that most politicians, journalists and the public at large seem to have over the theory and practice of justice.

Sir Fred Goodwin clearly made mistakes in the running of RBS and he lost his position accordingly. Putting aside the recriminations as to whether or not he should have been sacked, the fact is he wasn’t. As a consequence he is to (and certainly should) receive his £703,000 per year pension.

Gordon Brown argues that he shouldn’t be rewarded for failure, but since when have pensions been performance related? If they were, most civil servants would see little of the final salary pensions they still retire on. But more importantly than this, justice demands that contracts are honoured. The type of kangaroo court that Harriet Harmon has set in motion, based as it is upon a perceived court of public opinion, runs counter to the sanctity of contract.

It is a slippery slope from here. The demand for the head of Goodwin subverts the foundations of true justice in favour of the perverse relative of ‘social justice’, a concept that is firmly and convincingly challenged in an excellent article by the sublime Anthony de Jasay. In the same piece, de Jasay in passing suggests that the only real-world example where the equality of social justice exists is in prison camps. A stark warning of the path this country is currently on.

Apparently Goodwin might leave the country. And why not? If they could, witches on trial in early modern Europe - who were massacred for another perverted vision of justice - would have done much the same thing.

Brussels Dispatch: I know an old lady...

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The Bank of England has started to purchase assets worth up to £100bn (comprised mostly of government gilts); to be followed by a probable later purchase of private sector assets of £50bn (corporate bonds and commercial paper).

This amount represents almost exactly £2,500 thieved from every single person in the UK. On 3 March the chancellor instructed this Asset Purchase Facility to be funded by money that obviously did not previously exist.

As Mervyn King had asked from Alastair Darling in February, the government has resorted to “unconventional unconventional measures” as opposed to the common-or-garden variety of “conventional unconventional measures”. This just goes to show the ‘experts’ have no plan, and how terrifyingly badly Gordon, Alastair and Mervyn have screwed it all up. I don’t think I would be so scared if Nick Leeson, Bernie Madoff and Sir Allen Stanford were running the economy.

For some strange reason, otherwise sane people are suggesting what we need now is a colossal expansion of the monetary base. The truth is that the economy needs an exploded M0 like I need an exploded aorta.

I know the Old Lady who has counterfeited some money; She counterfeited some money to stimulate demand; “Demand had fallen because the banks didn’t lend”; The banks “didn’t lend” because the property boom bust; The property boom bust because it was unsustainable; It was unsustainable because it was driven by cheap credit and artificially low interest rates; Which is where we are again now but even worse than before; I don’t know why the Old Lady keeps doing the same thing; Perhaps she has dementia; I hope she dies

It is long past time to abolish the Bank of England: This Old Lady needs euthanising quickly before she croaks leaving a will bequeathing nothing but hyper-stagflation.