From the department of truly appalling ideas

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Those who would govern us seem to have some very odd ideas about the proper remit of government.

Lady Warsi, the shadow minister for community cohesion, said there had been a "failure" to take polygamy seriously. She urged the government to consider the mandatory registration of all religious marriages to stop men in Britain from marrying more than one woman.

Whether someone enters into a "religious marriage" is nothing to do with the State at all. Whether someone wishes to enter into a polygamous (polygynic, polyandrous, polyamorous, no matter) religious arrangement is similarly no matter for governance.

It is true that we have something called "marriage", which the State treats as a contract, a contract the terms of which the State itself decides. It is also true that this contract is considered so important that it is held in our courts to over ride all previous contracts (one reason why pre nuptial contracts do not work in England and Wales). But that contract is something very different indeed from a religious marriage, just as all such matters religious are outside the proper remit of the State.

Just as an example of quite how ill thought out this is, in the church I was raised in it is a commonplace that nuns do, by their vows, marry Christ himself. A strict interpretation of Lady Warsi's suggestion would thus mean that we could only have one Catholic nun in the country at any one time.

Fortunately I don't think the Baroness was being serious in her suggestion, merely straining for a soundbite.

Rattled by the Rush: America’s Response to Economic Crisis

The second measure is allocation, and it may be the most important factor. Where the funds are actually allocated will be a crucial determinant in the effectiveness of the package. If the funds are not properly allocated within appropriate areas of education, public infrastructure, and companies then the package may fail to stimulate growth for the economy. Just one example of where the funding could be misappropriated is in the educational sector. Arne Duncan, the recently appointed secretary of education, will be held accountable for dispensing $100 billion to America’s public schools and universities. Until now, the department of education was not responsible for funding schools with anything close to this amount. Former Secretary of Education Margaret Spellings was quoted on the issue as saying, “The point is, it’s never been done before, and as much confidence as I have in Arne Duncan, there’s an awesome opportunity for slippage with that much money moving through the meat grinder." Also, until last month Arne Duncan was only responsible for public schools in the city of Chicago. This is a major responsibility to fulfil, and it is possible that neither the department of education nor Duncan, who up until now oversaw one school district, will be able to handle such a responsibility in due time.

The third measure of the package deals with external effects, and this means the effects that it will have on our international relations. Much to the rest of the world’s dismay, some “Buy American" policies will surely be included in the stimulus package. This upsets the rest of the world [especially developing countries] at a time when they are dependent on foreign countries [particularly the United States] for trade to jump-start their economies. The negative effects include future reduced trade for America with areas such as the European Union, who even threatened to retaliate against such protectionist measures. Reduced trade in the future will stunt the growth of American industry in the long run, causing the recession to linger for longer than it should.

Overall, it is quite important for this stimulus package to adhere to such criteria in order to stimulate growth for the American economy. The world has seen failed stimulus packages before. Just for comparison, one can look at Japan’s response to economic crisis in the 1990s. Ten major stimulus packages totalling more than 100 trillion yen (or 1.1 trillion dollars) were implemented in the 1990s, and it is generally accepted that these packages were ineffective due to poor timing and allocation. All America can do is hope that their government is carefully administering this plan, from the federal to local levels, being mindful of the egg they are carrying on a spoon.

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Barack Obama’s stimulus package finally passed through legislation last week, and there are many question as to whether this will bring praises of joy or pain in regards to the ailing US economy. Rattled by the shock of the credit-bubble bust, the United States [and the rest of the world alike] is striving to boost commerce at a time when there is minimal activity. Although the intentions of the plan are aligned with rebuilding the economy, it is important to consider the possible effects or lack of effects that such a package can have. Sadly the overall plan is reminiscent of failed recovery methods used by countries [the US included] to shoot themselves out of major recessions in the past.

It is very optimistic to think that pumping money into a national economy will automatically fix every problem under that red white and blue banner. An exploration of three very important variables that could make or break this package should be helpful in its analysis. The variables may seem quite simple and obvious, but hopefully the American Government thinks so too.

If a government decides that a stimulus package is absolutely necessary the three major controls that should be accounted for are timing, allocation, and external effects. The first measure, timing, means that a government needs to respond quickly with their spending if they hope to effectively achieve their goals. Although this stimulus package was recently passed by congress and signed by Obama, it will be months before schools, companies, and other state facilities are funded by the package. In many cases, the funding will have to meet approval through federal then state then local municipalities before schools receive aid or public workers are hired. Since timing is such an important factor in federal aid, it may be too late for much of the money to complete its intended task. [Cont'd - click 'Read More']

Judge, jury, and executioner

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This government seems determined to rid of our basic rights and freedoms. They have tried large scale changes such as the introduction of ID cards, the 42 day detention of terrorist suspects and the abolition of the double jeopardy rule.

They have ripped up the rulebook which protects the British public and was once an integral part of its identity. There was a time when Britain was a beacon of justice in the world. The latest erosion of our rights comes with the announcement that the police will be given the power to issue on-the-spot fines for ‘careless’ driving without the proceedings ever being taken to court. What happened to the principles of being innocent until proven guilty and the right to a fair trial?

Other issues can be raised from this absurd new piece of legislation. For example, there are no set guidelines for what constitutes careless driving, the judgement is entirely left to the judgement of the police officer – a police officer acting as judge, jury, and executioner – whatever happened to a separation of powers?

Leaving aside the fundamental intrusions of this new rule, its efficacy will be questionable to say the least. The most efficient way to help people drive more safely is not by forcing and tightening the rules and regulations upon them, but instead to relax the rules, allowing them to drive safely and concentration solely on the road. A scheme that has removed all the road signs, has been piloted in the German town of Bohmte with great success.

Blog Review 877

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So, does foreign aid actually work or not? Depends upon what you mean by "work".

Not photographing or identifying policemen? How is this going to interact with social media then?

Many say that the solution to the banking problems is to turn them into cooperatives, mutuals. But what is the problem here that mutualisation will solve?

Or bank nationalisation. Is anyone in power actually getting the importance of process here?

Grand Auto Theft. It's not just a computer game you know.

While true, this rallying cry might need further polishing: "Mr Obama, give me back my wallet"

And finally, Allen Stanford, daft bastard.

 

Jacqui Smith and Public Choice Theory

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Public Choice Theory seeks to study individuals in the model of self-seeking utility maximizers. It is an eclectic approach that can incorporate many definitions of self-interest, from the material to the psychological.

Jacqui Smith’s case fits slap bang in the material. She has claimed a plum load of money in very questionable circumstances. Her case reminds me of those benefit fraud cases where the father is supposed to be split from the mother while he is in fact living in the family home. Don’t they often end up in prison?

Of course, politics is riddled with such petty corruption across both Houses; the political process is oriented towards the betterment of its participants: it is an elite private club and we pay the membership fees.

Sadly, short of revolution, we are going to have politicians around for a few more years. As such, it makes a lot of sense to fully open up the Pandora’s box of their sordid behaviour to public scrutiny. We can then shamefully parade them across the inside pages of the tabloid press, before gently pushing them into early retirement and a lifetime of being vaguely remembered by the public as petty crooks on obscure reality TV shows.

Thanks to the iconoclastic efforts of the likes of Guido in the UK and Drudge over the pond, transparency is being forced upon politicians by this unservile new media. A simplification of political perks combined with a clear and present public statement of all external interests is essential in making their task easier. As a child who keeps getting hurt by a hot plate, in time the politicians will learn that they just can’t get away with it and will eventually stop being so naughty.

Destroying football

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So typical of a quasi-politician; attempting to bend the rules to suit their own purblind cause. Michel Platini urged the European Union to allow him to force through a variety of regulations that in all probability would see the J-League or the Hyundai A League become the strongest in the world.

His plan is to institute a cap on the spending and transfer fees for the football clubs of Europe, this would be limited to somewhere between 38%-63% of a club’s income. All done in the hope that fees and wages – like the ones recently seen offered for Kaka of £108m at £275,000 per week – aren’t seen again.  Apparently this kind of offer debases the ‘beautiful’ game and will lead to the implosion of the sport. Platini sees his own plan as enabling football to continue its upward rise in the global sporting stakes. However, if he were to look under his nose and examine the recent developments in English rugby union, he’d discover that a salary cap has caused three English players to move to France. The RFU have successfully found a formulae to destroy rugby from the top down. Platini’s idea would have the same effect.

If the MEPs bend to his will – which they likely will given that most detest wealth and wealth creation – then we can all say goodbye to football being a successful sport across Europe. If we wish to drain the sport of the outside investment it has seen over recent seasons then we’d be going the right way about it. The money will dry up and move elsewhere, along with the successful players. He plainly doesn’t understand basic economics, but then what else would you expect from a French footballer.

Brussels Dispatch: Yesterday’s history is today’s politics

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The Petrograd Strikes, which heralded the start of the 1917 Revolution in Russia commenced on 22 February; find a moment for reflection this Sunday. Even though the Soviet system of Communism lasted for 69 years, its ideology is evidently still very much alive and well: the British government now spends half the nation’s income. Yesterday’s history is today’s politics, to adapt the adage.

This Thursday our very own Nicholas II went to see the Pope. Perhaps he asked the Vicar of Christ to pray for a miracle – huge monetary expansion without hyperinflation – or perhaps he asked for the economy to receive the Last Rites. Ironically, one of the things the Prime Minister did discuss was freeing the world from poverty. He can contribute best to this desirable goal in Great Britain by the near abolishment of the State. Government remains the problem, not the solution, and we can work our way back into prosperity, as opposed to continue to regulate ourselves into impoverishment.

I came across this passage today in Ludwig von Mises’s Human Action which underlines this point (Chapter 21, Part 7):

The outstanding fact about the Industrial Revolution is that it opened an age of mass production for the needs of the masses. The wage earners are no longer people toiling merely for other people’s well being. They themselves are the main consumers of the products the factories turn out…The very principle of capitalist entrepreneurship is to provide for the common man…There is in the market economy no other means of acquiring and preserving wealth than by supplying the masses in the best and cheapest way with all the goods they ask for.

Blinded by their prejudices, many historians and writers have entirely failed to recognise this fundamental fact. As they see it, wage earners toil for the benefit of other people. They never raise the question who these “other” people are.

The free market must be permitted to get on with offering exchanges in which both parties expect to benefit, unhampered by unpredictable behaviour-altering regulation and wealth confiscation. Only the State coerces.

The only question Mr Brown should be asking is which tax (capital gains tax, corporation tax, income tax, ‘inflation tax’, or VAT) he should scrap  first.

Blog Review 876

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Dealing with the problem of high marginal tax rates by raising marginal tax rates doesn't, at least on the face of it, sound like a very good solution.

The Obama plan to help homeowners doesn't have all that much to recommend it either.

And this idea that we should all dig allotments? Piffle.

We seem to be running four for four so far on the inanity of government plans: this fourth being about drugs.

Why is Chrysler asking for government funds when it's owned by Cerberus who are not short of funds themselves?

In defence of bonuses.

And finally, financial neologisms (and you can add to the list too!)

Gabb on liberty

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Dr Sean Gabb spoke to the Cities of London and Westminster Conservative Future ‘Star Social’ meeting on Monday on the subject of liberty. He caused somewhat of a stir. The talk was based around the advice that he would give to a future incoming Conservative administration, and why it needed to undertake the ideas he suggests. He posited it in the future as he rightly believes that the government that Cameron would form will be more or less a carbon copy of the governments of the past 17 years.

Dr Gabb drew upon Marx and his reasoning as to why the 1871 Paris Commune failed as a way to show why the Establishment needs to be abolished. The key actions he called for a future administration to undertake involved closing the BBC and shutting down around half of the civil service and its associated quangocracy. This would successfully rid any government of the challenges that the entrenched rent seeking opponents could bring to bear by utilizing their positions of comfort. Most importantly though, liberty would be returned to the inhabitants of the United Kingdom, as they would have the heavy weight of bureaucracy lifted from them and the heavy burden of tax removed.

The Conservative party, as is, has meekly become an extension of the establishment, exemplified by the response that Dr Gabb’s speech received. Dr Gabb is correct in his suggestion that a new wave of radicalism is needed to save the freedoms’ of the British people. That this approach is unacceptable to those who seek to become part of the problem should be of no surprise. Proceeding governments of the near future will offer little that will alter the status quo.

Whilst the polls show a massive lead for the Conservatives, they do so only because the Conservatives appear to not be New Labour. The truth of the matter is that both of them accept the Establishment and will do little to undermine their own chances of lining their pockets via the political process. We the people will continue to lose out.

The beginning of the end?

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An article in The Times yesterday highlights the correlation between the business cycle model and the political cycle. As we slip further towards a recession Gordon Brown’s position seems even more precarious. As the article points out, his rise was as false as our credit boom – although it seems the fall of New Labour will not be quite as rapid as the economic downturn.

In anticipation of a Labour loss at the next election, senior members of the party are already sowing their seeds for a leadership contest. It has been rumoured that Harriet Harman planted a story that Brown is already considering a role as ‘Global Financial Regulator’ in an attempt to undermine confidence in him (although she has hastily denied this). Ed Balls made a high profile comment about the state of the economy that was well beyond his departmental remit, and the ever-present Ed Miliband (my personal bet to win the next leadership contest) has appealed to the green-arm of the party by opposing a third Heathrow runway.

It seems it is not just the Labour heavyweights that are finally coming to terms with the fact that the current government is on a downslide. In the past week we have seen the prominent welfare guru David Freud deflecting to the Tories – not for any policy reasons, but because working with the opposition can give him more opportunity to impact public policy. It also seems civil servants and mandarins are trying to distance themselves from the Labour party as they look to the future. We are surely seeing the beginning of the end of New Labour.