The BBC and the Election

It will be interesting to see how the Conservatives bear up under the relentlessly hostile BBC campaign coverage.  It is not that the BBC openly praises Labour and its policies.  What the BBC does do is to follow the Labour agenda of the stories they wish to focus upon.  One week it is continuous coverage for several days of alleged failings and deficiencies in the NHS, perceived as a Labour issue.  The next it highlights for several days allegations of “tax dodging” – a phrase they use to conceal the distinction between paying tax in accordance with the law, and criminal dishonesty in concealing earnings.

Tax avoidance means organizing your affairs to lower your tax exposure in ways that the law allows and sometimes encourages.  Tax evasion means not paying the tax you are required by law to pay.  The words “tax dodging” and “tax dodgers” are used to conceal that distinction.  Multi-millionaire Margaret Hodge wants people to pay what she thinks they ought to pay, rather than what the law requires them to pay.  The BBC has given massive coverage to another area seen as a Labour issue.

The BBC also pursues a relentless anti-business campaign, highlighting what it sees as abuses by businesses, even where these, too, are within the law.  Energy companies are castigated for not passing on falling wholesale prices, with never a mention of the time lag between energy companies buying wholesale and the delivery of that energy to customers.  Stories focus not on the role of companies in creating jobs and wealth, but on their alleged abuse of their market position.  Again, since the Conservatives are perceived to be more pro-business than Labour, the BBC is following the Labour agenda.

It is unlikely that the BBC is taking orders to highlight Labour issues every day, and much more likely that the BBC programme planners and presenters think like Labour does, and regard these issues as the important ones.  There could just be some self-interest, too, with BBC planners thinking that a Labour government would probably give the BBC a more advantageous licence fee renewal deal than would a Conservative one.  It will be interesting to see how effective their campaign is.

The nanny state’s children

Scotland is seeing a hasty transfer of power from the people to the state. And a few components, including the SNP’s unfaltering support from pro-independence voters that they expect to rely on for the near future, are making the transition happen with ease. Even in the face of a growing number of universally free things to adjust people to the state making our financial decisions, nothing of late has quite managed to reach the blatant level of state intrusion and awaken in people such fervent objection as the “named person” law.

This “service” means named persons will be assigned by the state to every child in the country until the age of 18. It is now set to be enforced in 2016 after the Children and Young People (Scotland) Act 2014 passed its final stages as a bill in the Scottish Parliament last year. Social workers, health workers and school teachers acting in a dual capacity of both their profession and as state informants, will have legal responsibilities that can rival those of the parent, while powers to intervene in private life and share personal information with government agencies will be handed to the state.

Educational charities and parents have joined forces under the banner of the NO2NP campaign and last week sought judicial review of the decision to enforce this law. By its opponents, the move is believed to be outwith the government’s legislative competence and to be incompatible with data protection rights and rights afforded to every citizen by the European Convention of Human Rights. In the judgement Lord Pentland said that the challenge brought before the Outer House of the Court of Session “failed on all points”, and approved the legislation. The campaigners expected there would be more than one hearing and so are not defeated as they consider their next legal steps to be heard by at least three judges in the Inner House.

It is important this policy is universal, proponents tell us, because children with additional support needs are not always immediately obvious to services and so this can ensure that intervention happens earlier to prevent crises at later stages in children’s lives. A justification that has failed to quieten or satisfy parents’ concerns. But the creators of the legislation want to see it implemented at any expense. Even if it means creating bitter resentment among the vast majority of parents who are getting things right and do not want a named person overseeing everything they are doing. 

State-dictated outcomes are presupposed to be superior to all else by the legislation. But parents do not necessarily agree. The one-size-fits-all approach neglects to consider the fact that parenting is unique to each family. Should “named persons”, who don’t know children well, be given the authority to have a greater say than parents - in the eyes of the law – as to what their children ought to be doing then circumstances and behaviours may be misconstrued, leading to unwarranted consequences. It is understandable that more and more parents are viewing the legislation as a breach of their human rights. Their children are being assigned an informant to the state without the option to opt out.

The impact on parents is one thing. But teachers, too, who are required to be instrumental in this new dynamic, have no say nor even a choice in the matter. It has not been made clear when an educator stops being an educator and assumes the roles and responsibilities of the named person. 

So when parents become suspicious of who they reveal information to, for fear that they are confiding in a middle-man between them and some investigator higher in the chain, more harm than good will be done. An environment of mistrust conducive to relationship breakdowns will be created. Not to mention the added time pressures and weight on teachers’ shoulders that the extra duties carry.

Early signs of the ostracising effects it will have are already visible in the Highlands where people were surprised to find it had been prematurely implemented as part of a pilot scheme. We are also seeing the wasted expenditure that this will entail, as referrals to services have risen. 

To make social workers responsible for a population’s children is a costly blanket bureaucracy. And at a time when public services are under severe strain, it is ill-conceived that scarce resources should be drawn from the most vulnerable and urgent cases in order to pry on the 95% of families this legislation will never be necessary for. The case may have failed on all points thus far, but it is in the lack of justification by those behind it where we discover the greatest weaknesses.

Most strikingly important, though, is that every parent from the offset is being treated as potentially guilty of something until proven innocent. And they have to keep on proving their innocence until their child is an adult. It is a sinister state of affairs, indeed, when the onus lies on the general public to prove why we do not want legislation imposed on us.

Paternity leave: interrogating the evidence

Labour pledges to double paid paternity leave from two weeks to four weeks, and increase statutory paternity pay from £120pw to £260pw.

We can do simple reasoning about the short- and long-term effects: to begin with it’s a benefit for workers, and then contracts adjust to take it into account as they are re-negotiated across the economy. Since it costs the firm more than it’s worth to workers wages go down by more than the benefit, workers lose out and firms may lose out.

But maybe there are positive externalities—i.e. even though the workers are more or less bound to lose out, maybe there are benefits to other people (like their children, their families, or society) that are not accounted for in their market decisions there.

Thankfully we have evidence from other countries, principally Scandinavia, as to what effects. These reforms might have. A 2011 paper looking at the Norwegian reforms found that they did nothing to affect labour market outcomes (and may have widened the division between men and women) and nothing to affect kids’ schooling outcomes.

However a 2010 paper (newer, gated version), also looking at the Norwegian reform, found that extra paternity leave led to extra long-term involvement with children, to the detriment of their labour market outcomes—lifetime earnings dropped 2.1%.

Other evidence suggests that paternity reforms affect the household division of labour, making it more egalitarian, in a way that lasts. Iceland evidence suggests this leads to lower divorces and narrower wage divides twixt men and women.

The literature on maternity leave has a similar result: it worsens women’s labour market outcomes but has no effect on children’s outcomes.

In general we see roughly the same results for men as for women but the case is not open and shut—if people have a strong preference for women and men to be have more similar careers then the external benefits may outweigh the cost to the affected workers.

The Green spectre

I was reading the other day that The Green Party Is The Second Most Popular Party For Young People. This popularity surge is probably not that surprising really – we see increased environmental awareness in younger people these days, and it’s often the case that a vote for a minor party means a vote that expresses disenchantment towards the mainstream parties.

However, many prospective Green voters would surely be thinking about being a little more circumspect if they saw Andrew Neil’s Sunday Politics interview with Green Party leader Natalie Bennett, which stands out for me as one of the most alarming exposures of ill-conceived economic policy I’ve seen in a long time. It’s rare to see a leader having her party’s policies torn to shreds without even the smallest ability to defend them or balance them up – instead simply getting in a jam each time and responding with “I would urge your viewers to go our website and see how the figures are worked out.”

Alas, that’s the reality, though – their policies are indefensible – economic moonshine of the worst kind I’ve seen. Not only are they inimical to successful human progression and increased prosperity, they are antithetical to even the basic truths you’d learn about in first year economics.

Their proposed wealth tax is simply a pipe dream. Bennett claims it will generate between £32 billion and £45 billion, when the reality is that wealth taxes in other European countries generated only a fraction of that. Add to that the proposals for import tariffs, business subsidies, increased minimum wage, price controls, and the kind of Piketty-esque redistributive taxation that would be almost certain to hamper innovation, and drive much of our best talent out of the UK, and there is a good case to made that with The Green Party in their current form, we have, in terms of the economy, perhaps the most dangerous fringe party of them all – a party whose policies would severely compromise the global benefits of innovation, trade, competition and the free market of supply and demand far more than all the other parties would.

A vote for the Green Party actually gives every indication of being a vote for negative growth, as they look to free humankind from what they perceive as the disaster of its Promethean economic advances. While it’s true that in some cases people willingly vote for one of the smaller parties because they are disenchanted with mainstream politics, it’s also true that as the landscape begins to shift, and dissection of the minor parties’ policies intensifies as more look to get their feet in Westminster’s door, surely very few people could actually bear to envisage what the country would be like if The Green Party’s policies were ever made manifest in any kind of sphere of political influence. At the very least Natalie Bennett’s car crash defence of the Green policies on Sunday Politics should elicit the well known spectre: ‘Be careful what you wish for’ young people. Or to use a famous Shakespeare line:

Take but degree away, untune that string,
And, hark, what discord follows!

President Obama: the ultimate poverty hypocrite

Americans are experiencing buyer’s remorse. Last summer CNN found that 53% of those polled would choose Mitt Romney to be president today, over the 44% who chose Barack Obama. And with Obama’s approval ratings fixed these days below 50%, I suppose it’s only human to get a bit testy with those you’re compared to:

President Obama poked fun at former rival Mitt Romney and leading Republicans on Thursday, saying the GOP’s rhetoric on the economy was “starting to sound pretty Democratic.”

At the House Democratic Caucus retreat in Philadelphia, Obama noted that a “former Republican presidential candidate” was “suddenly, deeply concerned about poverty.”

“That’s great! Let’s go do something about it!” Obama added in a not-so-veiled jab at Romney.

What’s not particularly smart, however, is to frivolously attack someone’s track record on poverty when your own record looks abysmal:

A few ugly facts about the Obama Presidency:

  • Median household income has slumped from $53,285 in 2009 to $51,017 in 2012 just up to $51,939 in 2013.

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  • In comparison to his three previous successors, this fall in median income looks even worse:

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  • Real median household income was 8.0% lower in 2013 than in 2007.
  • Nearly 5.5 million more Americans have fallen into poverty since Obama took office.
  • Obama oversaw the first time the poverty rate remained at or above 15% three years running since 1965.
  • Home ownership fell from 67.3% in Q1 2009 to 64.8% in Q1 2014; black home ownership dropped from 46.1% to 43.3%.
  • Labour force participation rate fell from 65.7% in January 2009 to 62.7% in December 2014.
  • The federal debt owed to the public has more than doubled under Obama, rising by 103 percent.
  • 13 million Americans have been added to the food stamp roll since Obama took office.

Obama has been very successful in painting a picture of himself and the Democrats as the ‘Party of the Poor’, and did an even more sensational job convincing 2012 voters that Romney’s riches and successes put him out of touch with the middle-class America. But in reality, the president’s policies have pushed millions more people into financial stress and poverty.

And he’s still causing damage; even his latest State of the Union address called to raise taxes on university savings accounts and still cited fake unemployment numbers, as if this somehow helps the double-digit workers who have given up looking for jobs.

Perhaps the president really thinks his increased federal spending will pay off for the poor. Maybe he really believes that multi-millions more on food stamps is a saving grace instead of a tragedy. But regardless of intention, the facts speak for themselves.

Obama’s talk on poverty is cheap. And his mockery of Romney cheaper.