The Pin Factory Blog

This post contains the speech that Alistair Darling should have given. Think how his popularity would have risen if he had told the simple, plain, unadorned truth?

As neat an explanation of the Law of Unintended Consequences as you are likely to see. Further discussion and what it means for policy decisions here.

For example, taxes don't stay where they're put. 

Was that huge Soc Gen loss really caused simply by a rogue trader? 

Why Bill Gates' speech at Davos wasn't just simplistic, but wrong. Wrong in analysis and wrong in suggestions for policy. 

So why is the US Government trying to offer everyone a payday loan?

And finally, why the Morning Star headlines get reviewed on the telly and  which would you prefer with your New Statesman subscription? The Chavez t-shirt or the Fidel book? 

16. "Equality is more important than freedom."

No. Freedom is more important. It is not a value which competes with others, but the source and condition of all values. Freedom gives people the chance to express themselves and their individuality. It is what makes them human. Animals can be cared for, fed and sheltered. Human beings are not pets or domestic livestock to be protected. They make moral decisions and act on them. They face the consequences of their actions and acquire responsibility and moral growth. All of this requires freedom.

People are not equal and never will be. Life would be dull if they were. They differ in strength, size and intellectual power. They differ in looks and in character. They differ in talent, and in athletic prowess and musical ability. They differ in the value of the services they can render to their fellow humans. If we pay them equally for services of unequal value, we lose the signals which tell people where to direct their efforts.

We can and should choose to make people equal before the law, and to say that they should all be treated equally by it. This expresses not a fact of life, but a determination on our part to create a just society and to respect the rights of all who respect the rights of others. The law looks at the criminal abuse of people's rights, rather than at the criminal, and prohibits it no matter who does it.

Some point to what they claim is a trade-off between people's freedom to live as they wish and their health and well-being. This is completely false, for without freedom there is nothing to trade. We might choose immediate pleasure at risk of long-term consequences, but that is not a choice between freedom and other things; it is a choice only made possible by freedom. Without that choice we are no longer autonomous beings.

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!