The Pin Factory Blog

The EU Commission has decided to increase the use of biofuels as part of Wednesday's €60 billion (0.5 percent of Europe’s GDP) plan to 'save the world'. The goal is that biofuels will account for 10 percent of all European energy needs by the year 2020.

Given the extensive bad press that biofuels have recived, this decision makes little sense. The environmental damage of biofuels is fast becoming clear. It often takes more energy to create biofuels than they produce – which means they create more emissions than they replace. They are also inefficient: the crops needed to fill the tank of a 4x4 with biofuels could feed someone for a year. Perhaps most importantly, biofuel production drives up food prices, worsening the plight of the world's poor.

The intransigence of the Commission in continuing to support biofuels in the face of the criticism is testament to its continued attachment to the European farm lobby, and its failure of it to engage with the outside realities of the world. This "Fortress Europe" mentality is also refelcted in its protectionist decision to inhibit the likely response of industries wishing to move out of Europe to avoid excessive EU regulations.

In sum, the Commission’s plan consists of limiting the opportunities for people in poor countries to work their way out of poverty, whilst continuing to undermine the possibility of Europe benefiting from free trade with them. Just as they are demonstrably damaging the environment they claim they are seeking to protect, the EU's member states are decreasing Europe’s economic potential through excessive taxation (thus making technological advances less likely). Saving the world? No, quite the opposite...

It's not just the population of the UK that faces the prospect of their private details being (mis)handled by the state machinery. Our American cousins are being harassed into accepting REAL ID, a standardization of driving licenses across the United States and the creation of an interlinked database with access enabled for all those who work for the various levels of all government within the US. In other words: a national identity card.

The recent pronouncements from the Department of Homeland Security make it very clear that unless certain actions are undertaken then access to services will be withdrawn. States have to apply for a waiver so that they can seek more time to comply with this unnecessary piece of tacked-on legislation from 2005. If States don't, then their residents will find themselves holding valid drivers licenses but unable to access federal services or, more importantly to the majority of Americans, to use their licenses' as identity when flying. The DHS will ensure that their employees will persecute any travellers who choose not to sign up to REAL ID.

If you give the keys of a brewery to an alcoholic there will be trouble, and with a government drunk on power there can only be trouble in store for Americans. As we Brits have clearly seen over the past 12 months the state is utterly useless when it comes to handling anything involving our private details is . Time after time they've lost documents, disks and laptops, compromising the personal data of their citizens. Yet if we hope to have any day-to-day functionality then we have to comply with crass legislation involving disclosure of more and more of our details.

Here's hoping that enough States stand up to this outrageous piece of legislation and protect their citizens from the overbearing federal government. The ACLU’s page can be found here: www.realnightmare.org.

With stock markets in decline all round the planet, now's the time to invest, and for that you need The Harriman Book Of Investing Rules: Collected wisdom from the world's top 150 investors by Philip Jenks and Stephen Eckett. At our online bookstore it's £13.99 + postage, nearly a third off the normal price.

The tactics, strategies and insights relied on by 150 of the world's most respected financial experts are revealed in this short, digestible book, which is a no-nonsense list of investment do's and don'ts from the investment elite. Good luck!

Buy it here from the ASI bookstore. 

Today's jaw dropper is the back and forth between Dan Hannan and The Devil (caution, very sweary indeed) and again on how those charities that *support* the Foreign Secretary on the subject of the EU constitution are all recipients of money from either the EU or the government which the Foreign Secretary is such an adornment to. We could do with Mandy Rice-Davies to tell us that thy would, wouldn't they? In fairness, EU Referendum had this story last week. The good news is though that our charities are indeed honest.

A plea for help: can someone plase provide the case in favour of the EU itself? 

In defence of high salaries. Someone really does need to remind certain economic journalists of the first word in their job description. 

Did you think that the NAFTA clauses concerning removal of the sugar industry protections were really going to be implemented? No, of course not, you're not that naive are you? 

If you want to know what the Federal Reserve is going to do next, try reading Ben Bernanke's old research papers.  

One slightly different method of solving the shortage of organs for transplant. 

And finally , political joke of the day and advice for budding luvvies (on which point Laurence Olivier made a film with Dustin Hoffman, who asked Larry for advice in portraying his character."Why not act?").

Dan Lewis of the Economic Research Council makes some good points about recession worries in the Yorkshire Post. The last time we were in this pickle, he says, was 2001 - but the then Chancellor of the Exchequer, Gordon Brown, had a full Treasury thanks to a long period of growth initiated by the Conservatives, and he used it to ride out the trough.

Fast forward to 2008, however, and we find ourselves in exactly the reverse position. Brown simply failed to turn off the public expenditure taps, so we have a budget deficit of 3.1 per cent of GDP – inexcusable after 15 years of growth. What this means is that there's just no money for a Keynesian expansion this time to stave off recession. Just a few days ago, we found out from the Office for National Statistics, that net borrowing in the financial year to December was running at £43.6bn – a staggering £11bn increase on the year before. 

It's worse than even that, Dan. By 2001, the UK's postwar economy - centralized, state controlled, bureaucratic, high-tax inflation-ridden - had been largely opened up to market forces by Mrs Thatcher's reforms. Lower taxes and greater growth enabled the national debt to be reduced. But now, after ten years of Gordon Brown, there's even more top-down centralization, business is strangled and controlled by a spaghetti of regulation, civil-servants intervene everywhere, taxes have risen hugely and inflation is on the way up.

Lewis might well be right that the UK can avoid a recession - two quarters of negative growth - and I hope he is. But I wouldn't start from here.

Recent official documents suggest that the UK government's unpopular Identity Card scheme will not come into effect until 2012, two years later than planned. That, of course, is comfortably beyond the date when the next election has to be called. And the way the economy is going, Gordon Brown is going to need all the time he's allowed before he goes to the voters.

It reminds me of a line from George Eliot:

"An election is coming. Universal peace is declared, and the foxes have a sincere interest in prolonging the lives of the poultry."

The most ridiculous story in the news has to be the move by councillors in the town of Rochdale to decrease the number of holes in saltshakers at fish and chips shops from 17 to 5. The move has been rightly condemned as a proliferation of the "nanny state" and a waste of taxpayer's money running to thousands of pounds.

Added to this is another important concern that should be raised: the risk of your chips going cold in the process of trying to get a decent amount of salt on them.

So, if you, as an employer, created an easy to read (even amusing) handbook on how everyone should behave in the worldplace (Rule 1: use your best judgement, Rule 2: see Rule 1), what do you think would happen next? Correct, you would expect to get sued, wouldn't you?

Four myths about the US stock market refuted.

50 things learnt in 50 years on the planet (Netsmith liked the idea that you don't argue with policemen but you can fight City Hall.)

Hillary Clinton v. Milton Friedman. Not all that difficult to see who was the liberal. 

A quick note on how TV journalism works and another on how politics does. 

Explaining the achievement gap in the US: blacks (are we supposed to say African- Americans still or has the style changed again?) are caught in a socialist economy and if they were brought into the capitalist one that whites inhabit the gap would reduce and or disappear. 

And finally, inflation is everywhere, even in Rambo films. And look! A graph! 

Liberal-Democrat leader Nick Clegg has declared that he and his party will NOT support a referendum on the Lisbon Treaty, the one declared by many to be almost identical with the EU constitution voted down in France and the Netherlands. This is hardly surprising since I remember him on television at the time saying the "no" votes didn't count "because polls have shown that the French and Dutch voters didn't know what they were voting about."

So fundamental a shift in power clearly requires the consent of the British people. The continental tradition has long been one in which the political class is left to the business of government, while ordinary people get on with their lives, occasionally rioting to draw their grievances to the attention of their ruling élites.

Britain, by contrast, has enjoyed a more vigorous democracy, aided perhaps by a voting system that makes it easy for people to turf out governments, but mostly because of cultural and historical differences. It is a pity that Nick Clegg has chosen to ally himself with the continental style of 'ruler knows best.' Some had hoped he might head his party back toward liberalism and away from the statism it has embraced in recent decades. Alas, it is not to be, and marks a lost opportunity. There's something about European political union that makes otherwise sane politicians lose their reason. And their values.

I share Madsen's disappointment with Nick Clegg's refusal to back a referendum on the Lisbon Treaty (or EU Constitution, as honest people call it). Internationalism may be an important part of the Lib Dem creed, but there isn't much in the treaty that I would describe as 'liberal'. And it's strange that while the Lib Dems rightly back devolving more power to local government and individuals, they also support giving Brussels ever greater control over our lives and the policies that affect them.

On the other hand, Nick Clegg also made a very promising announcement on the future of the NHS yesterday, saying he would replace central government targets with 'personal entitlement's to high-quality care. A 'patient contract' would guarantee service and give people the right to private treatment if maximum waiting times are exceeded. As he put it in a Telegraph article, "That's how it works in Denmark – not to undermine the public system, but to guarantee individual care."

Quite so. Public services, in a sense, represent a contract with the public. In return for paying taxes, you are entitled to certain services. The trouble now is that the contract is neither explicit nor enforceable. If you get shoddy service in the public sector, there is not much you can do about it. You are certainly not going to get your money back. An enforceable patient contract, with an escape mechanism to the private sector, changes things. It ensures a high level of service for the individual, and it forces the public sector to raise its game.

Of course, we have been advocating this kind of thing for years (see Blueprint for a Revolution, for example) but it's always nice when politicians realise you are right. David Laws MP, the man in charge of Lib Dem public service reform policy, has promised radical thinking across the board, so let's hope there is more of this to come...