The Pin Factory Blog

As has been noted , Paul Krugman has successfully predicted eight out of the last none recesssions. To be fair (as we must) he made his reputation as a trade economist, not a macro one.

A new centre right blog arrives. Multiple authors, many of whom you will have heard of...(/snark)...and looking at it those you haven't as yet are well worth reading too. 

There are those really not all that sure about the automatic opt in for organ donations. Really not sure at all.

Yet another engineering/high tech project vastly exceeds its budget and no, this time it's not the UK Government responsible. Unfortunately, it's the European Union this time, so we still get to pay for it. 

Bring on that global warming! It'll save lives (as Bjorn Lomborg has repeatedly pointed out). 

For a change, ecclesiastical blogging. Really rather like political blogging except perhaps more habitual.

And finally, a summation of the differences between China and India and, well, it is Government work. 

Is there a new interventionism in the air in Britain? Faced with a credit crunch, Chancellor of the Exchequer Alistair Darling has said pretty plainly that he believes it's time for interest rate cuts. That's despite the fact that the Bank of England is supposed to be independent. But then who appoints most of the people at the Bank who decide interest rate policy? Yes, you guessed it.

In response to soaring energy - up to 24m homes face double-digit rises in their fuel bills - bills the Chancellor has also demanded an urgent meeting with industry leaders. And officials and watchdogs like Sir John Mogg, chair of the Gas and Electricity Markets Authority, and Alistair Buchanan, chief executive of Ofgem, are being pulled in for talks.

Again, energy prices are supposed to be depoliticized, and the Chancellor cannot order the (private-sector) energy utilities to cut their prices. But he can kick and scream in the hope that the regulator might do so.

Pricing - whether it is the price of credit or the price of gas and electricity - in this country is a sham. Politicians still have too much influence. This week the Bank held off cutting interest rates, but everyone expects it will do so next month. The political pressure will continue to mount. But then politicians want to fix the immediate problems, and if that simply stokes up inflation later, well, so be it. It's not that the Brown government is suddenly more interventionist than the Blair one. The problem is that its principal members are even more cowardly.

A man who had lived his whole life in a desert was on his way to visit a friend. He'd never seen a train or the tracks they run on. While standing in the middle of the railroad tracks, he heard a whistle, but didn't know what it was. Predictably, he was hit by a passing train and thrown to the side of the tracks, with some internal injuries, a few broken bones, and some bruises.

After months he had recovered and was at a party at his friend's house. While in the kitchen, he suddenly heard the kettle whistling. He grabbed a baseball bat from nearby and battered the tea kettle into an unrecognizable lump of metal. His friend, hearing the ruckus, rushed into the kitchen, and seeing what had happened asked, "Why'd you ruin my good kettle?"

The man replied, "Man, you gotta kill these things when they're small."

8. "Big business only cares about profits."

The implication of this is that everything else is ignored or over-ridden in their reckless and immoral pursuit of profit. It's not even close to the truth. The fact is that business is carried out by business-people who have the same moral constraints on them that other people do. Indeed, because of the nature of their activity, they have rather more.

Business isn't about swindling people or tricking them into parting with what they can ill afford for something they don't want. On the contrary, the business-person gives them goods and services they'd rather have than the money. In return they give up something the business-person would rather have – the money. Both parties gain from the transaction. The overwhelming majority of business-people engage in honest, even honourable activities.

Business activity is based on trust, in that the buyer trusts the seller to deliver the goods, and that they will be of the expected quality, while the seller trusts the buyer to pay for them as agreed.

Of course business seeks profits; that's the point of it. But if it seeks to maximize short-term gains by sacrificing quality and integrity, it's in trouble, and it knows it. Businesses gain new customers and repeat customers by their reputation for fair dealing. It's a long-term strategy to build up and sustain trust. It's against a firm's interest to short-change its customers or fob them off with shoddy goods. Its reputation and its trade will soon suffer.

Big business cannot meet its customers face to face as a small trader can to build up a relationship of trust. This is why it is more important for big businesses to protect their reputation and their brands; it stands in the place of the personal knowledge that characterizes small firms. Business cares not just about profit, but also about keeping its good name.

If your best mates clubbed together and gave you £103,000 when you needed it, you'd remember it, wouldn't you? Remarkable, then, that UK Work and Pensions Secretary Peter Hain didn't. He's accused of not registering seventeen donations towards his campaign for the Deputy Leadership of the Labour Party, totaling this amount. His forgetfulness is all the more astonishing when you consider that his campaign far outspent those of his rivals. So this was a large wodge of cash that public standards watchdogs weren't told about. Even Tony Blair, with his £500,000 salary from J P Morgan, his book deals and the rest couldn't simply miss £103,000.

Until Peter Hain went into Parliament, I always though him honourable. I opposed many of his views - and his abrasive ways of promoting them - but you can disagree with people and still think them principled. Politics of course forces people to compromise on their principles, so I've less respect for party politicians - but that's still no reason to accuse them of being crooked.

No, what's going on here is more subtle, and even more worrying. It's not that Peter Hain is a single rotten apple that can be ejected from the barrel and all will be well. No, they're all at it. Millionaire supporters funnel funds to the Labour Party through third parties who don't even know about it: half of Peter Hain's missing thousands is routed through some supposed think-tank; donors are attracted by the suggestion, however faint, that there might be a peerage in the pipeline.

What's wrong is that people in politics, both politicians and perhaps even more so their staff, think that they are above the rules. That their mission is more important than some tedious bit of book-keeping. That they can shuffle large sums around and nobody will notice. That how they raise and spend their cash is of little concern to the public.

Unfortunately, we live in an age of transparency, where every move that political folk make can come under the media spotlight. It means they have to be completely straight in how they conduct their business. The legislation to clean up party funding has been in place since 2000. It's truly alarming that so many politicians think it shouldn't apply to them.

Defending Peter Hain (we know, not the most likely of activities). What business is it of the State or the criminal law how a private organisation chooses its leaders, or how that process is funded?

Similarly, what business is it of the State or a Human Rights Commission what a magazine publishes (subject to libel and incitement to violence)? 

This also seems to be something of an intrusion into areas that should remain private, part of family life. 

A very clever piece of economics: and from politicians to boot. 

Normal service is resumed: a very stupid piece of economics from a bureaucrat. Another from a politician.

Celebrating the little guy: a selection of posts from lesser known blogs, the best of 2007. 

And finally, something you might care to support and more on the law of holes. When in one, stop digging, but if you don't, where will you end up? 

It's heartening to know that I'm not the only one sickened by the news that Britain's ex-Prime Minister Tony Blair has been snapped up by J P Morgan Chase on a salary of £500,000. For that, he's not even expected to pass his banking exams, merely advise them on the economic impact of globalization (something they'd be better just Googling) and introducing them to potential clients.

When the Blairs bought a £3.4m house, all the press wondered how they would pay the mortgage. Now we know. Even with tax rates of 40 percent, they could pay it all off in half the time it takes most people, and still have enough to live at twice the standards of most people.

I neither grudge nor envy Blair's money, and I'm sure that he's actually worth that to the bank. All he has to do is get some billionaire friend to sign up (and from his years of free holidays in the grand holiday homes of the rich and famous, he knows plenty of them) and he's earned his keep. What revolts me is the hypocrisy of it all. Politicians tell us how above it all they are, and then as soon as they leave office they get jobs with the industries that they were supposed to be regulating in a detached manner just a few months ago. There are rules to stop the most outrageous breaches, but if moving straight from being First Lord of the Treasury to being director of a bank isn't colourable, I don't know what is.

And I need hardly mention that Blair was a Labour prime minister. Aren't they supposed to believe in fairness and equality? Don't they tell us that the fatcats are appalling? Well, yes, they do. Until the cream jug comes round.

A redneck was learning to sky dive. The instructor told him to jump out of the plane and pull his rip cord. The instructor then explained that he himself would jump out right behind him so that they would then go down together. The redneck understood and was ready.

As the redneck was in the plane waiting to jump the instructor reminded him that he'd right behind him and everything would be fine. The redneck proceeded to jump from the plane and after being in the air for a few seconds pulled the rip cord. The instructor followed, and after a few seconds pulled his rip cord but the parachute did not open. The instructor, hurtled past the redneck. frantically trying to get his parachute open,

The redneck, upon seeing this, undid the straps to his own parachute and yelled, "So you wanna race, eh?"

Richard Tomkins article in last weekend's Financial Times makes explicit that the various assaults on the act of smoking have not stopped people from lighting up. The article goes on to map out the various problems facing policy makers in trying to obstruct people from smoking.

The problem with the article is that it falls into the trap as many others on this issue. It follows the illogic of the public health agenda in assuming that the government is best placed to determine whether an individual should decide to smoke. This thinking echoes the Communist paradigm of false consciousness, in its belief that the people are blind to the "truth" and must therefore have their lives decided for them. Whereas, in the real world people smoke for a plethora of personal reasons and should be allowed to continue without a government led financial and moral tirade. Personally, I smoke to relax each month upon learning how much tax the government is taking; then once more to cope with the level I‘m taxed on my cigarettes.

In the same article, attention is also drawn to the potential of Snus, a moist powder tobacco product that is consumed by placing it under the upper lip for extended periods of time. It has been shown conclusively to be a healthier intake of nicotine than cigarettes. So, will the market offer consumers the choice of a healthier nicotine intake, if they so wish? Alas, no. The reason being that it is banned by European Law in an attempt to stop people smoking. Once again, the individual is being refused his or her right to choose how to live, healthy or unhealthy.

It's not taken long for President Sarkozy to resort to the age old practice of taxing the hardworking of France. His latest initiative, part of his "policy of civilisation", is to tax the revenues of the private broadcasting channels' advertising streams as well as revenues generated by internet access and mobile phone technology. This would allow the two public broadcasting channels to rid themselves of advertising and also free up the £598 million they previously earned in this way.

Frankly, it is about time all politicians set free "public broadcasting" and let it pay for itself. For it to be truly free and publicly owned it should take on the form of a non-profit organization funded by the donations of the watching public. Its funding revenues could be sourced in a similar vein to that thin slice of money raised from telethons or pledge drives that the American PBS channel utilises as a top up to its own government funding. Or, as the earnings of the French channels show, they could take advertising to pay for themselves. Whether a channel has advertising or not is increasingly irrelevant in the modern times of choice. It's the content that counts. And channels that provide poor content only have themselves to blame when the viewers switch over.

Mr Sarkozy is merely attempting to dress up a tax hike on the whole of France. It should be economically obvious that the tax rises, "no matter how infinitesimal", are passed down the financial chain to the consumers through higher charges. It may seem to the French President that he only taxing that most hated of entities in France, the private company, but in reality he is taxing the man on street. Could it be that Mr Sarkozy is the same as every other French President? Both publicly and privately...