How laws are made

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how-laws-are-made

Yes, yes, we all know what Bismark said about watching the law being made. Even so, it can come as something of a shock to hear those who would extol such a system. Complaining that politicians cannot do what he would like them to do about climate change Jonathan Porritt suggests the following:

So it was good to see the latest publication from the Green Alliance on The New Politics of Climate Change. The basic thrust of it is that individual action by the "converted" is never going to be sufficient, and that we now need to mobilise the whole of the so-called Third Sector (voluntary organisations, local community groups, trade unions and co-ops, NGOs beyond the environment world, faith communities and so on) to enable a collective shift in both attitudes and actions. Without this, we will never generate a sufficient momentum to encourage/compel our politicians to do what they know they should be doing but still feel they can’t get away with.

That would be the Jonathan Porritt who used to run Friends of the Earth. That FoE whose offshoot, FoE Europe, gets 50 % or so of its funding from the European Union? Those unions that get great gobs of money from the taxpayer? Those NGOs that, when you examine their accounts, all seem to be sucking at the same taxpayers' teat? Indeed, that Third Sector which in recent years has all but given up any pretence at all of being independent and allowed themselves to be coopted by the promises of government cheques?

So, to explain in more detail. Government taxes us using their monopoly of legitimate violence. They then hand some portion of this money to the less talented parts of the upper middle classes who then use it to persuade us of the merits of what the government wanted to do all along?

Unrelated here is a claim that the European Union spends more on its propaganda budget than Coca Cola does on its global advertising.

For those who would prefer something more pleasant, here is a film of sausages being made.

Better off with no government

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better-off-with-no-government

I think it's pretty clear that the last Conservative government left Britain in a good state. It is also fairly obvious that when the current Labour administration is booted out, it's going to leave behind a hell of a mess. Many people would say, therefore, that we'd have been better off if John Major's Tories had remained in office.

But that was never really an option. By 1997 the Conservatives were a spent force – mired in scandal, deeply divided, and running out of ideas. Like many governments that have been in power for a long time, they had lost their touch. Departure from government was inevitable.

But what if we had had no government at all since 1997? What if public spending had simply risen in line with inflation, tax thresholds had gone up the same way, and existing policies had just been followed. It certainly wouldn't be a perfect world, but it would probably be a lot better than it is now.

Taxes would be a lower. There would be budget surpluses, and no public debt. The private pensions system would have remained the best in Europe. We would still have the opt-out from the EU's social chapter, meaning vastly less red tape for business, and greater flexibility in the labour market. We'd still have regulators, but their objectives would be purely economic, rather than social and environmental. We wouldn't be entangled in seemingly unwinnable wars. And our traditional civil liberties would, to a great extent, be intact.

Public services still wouldn't be great, but at least the internal markets in health and education would have been allowed to bed in, and teachers and doctors would be free to get on with their jobs. And while the trains still wouldn't run on time, the considerable improvement that occurred between privatization and the Hatfield crash could have been sustained, rather then squandered with the government takeover of Railtrack.

Not a utopia then, but what is?  Perhaps we really would have been better off with no government at all...

Blog Review 835

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blog-review-835

Bankers stupid enough to lend on these terms almost deserve to lose their money.

At least in the US there was little sign of that credit driven frenzy we hear so much about.

Historical evidence that lending booms leading to defaults are hardly exactly new.

Obama is hailed as one of the great rhetoricians of our time. Well, perhaps, but it's certainly true that the Chicago School of political speech has a style all its own.

An elegant and simple solution to the problem of environmental vandalism.

Ukraine, Russia and gas supplies. Best understood as a classical bilateral monopoly situation. With added gangsters.

And finally, great reporting of our times.

EU to vote on killing Africans

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Next Tuesday, the European Parliament is going to vote on legislation which could ban around a quarter of pesticides in the EU. Gordon Brown, Hilary Benn, along with farmers and industry have denounced the legislation’s spurious scientific grounds and its potential consequences; lower yields, increased food prices and a fatal blow to crops like carrots.

But it seems as though the EU isn’t just shooting itself in the foot; a new report by the Campaign for Fighting Diseases reveals that the legislation could also undermine the market for public health insecticides and seriously damage the fight against malaria in Africa.

Insecticides are vital for controlling malaria, a disease which claims over one million lives every year, mostly in young children.

Insecticide markets are based almost entirely on crop protection; public health insecticides represent only around one percent of the total pesticides market. Without the agricultural market, production for public health will almost certainly become unsustainable. Insecticides will become harder to get a hold of and more expensive. There will also be little incentive for industry to invest in research and development of new insecticides.

It is also likely that the EU will apply import restrictions so that foreign producers are subject to the same conditions as EU farmers. This trade barrier will leave countries with the terrible choice of banning public health insecticides or losing the lucrative EU market for exports.

This legislation runs against EU support to eradicate malaria and encourage agricultural exports from Africa. The EU is putting spurious environmentalism before people.

Porn King demands tax bailout

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Larry Flint of Hustler Magazine wants a US government bail-out for the porn industry, which he says is suffering from the recession like everyone else. I'm not quite sure if he's serious – after all, he's used many of the same arguments that the carmakers used in order to get a bail-out from Washington. But I guess it is just an elaborate joke.

However, it's a joke that makes a good point. Why should Detroit deserve billions of US taxpayer funds to help it through hard times, while Van Nuys Boulevard should not?

Of course, the answer is that Detroit has lots of friends in Congress. It's greased palms. It has powerful trade unions who know how to lobby Congress. Van Nuys may have some interesting information on the nocturnal habits of a few Senators, but it has nothing like that power.

So Congress plays the game of taking money from one set of people in order to give it to others who have more political leverage. It sacrifices jobs in the general economy in order to promote employment among people who're producing things we don't actually want to buy right now. Perhaps Larry Flint has a point.

Levy on gambling

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It had been reported that plans are afoot to introduce a change in the levy placed upon bookmakers in order to help combat gambling addictions. Previously, this levy was a voluntary one, with all revenue going to the 'Responsibility in Gambling Trust’, a government run charity. Now the government is concerned that not enough firms (mainly small independent bookmakers and arcades) are paying this voluntary tax.

Approximately £1.2m needs to be raised by the government to balance the books of this Trust, so now this levy will become compulsory to all firms. I think the government seems to have confused the concepts of charity and tax collection. As soon as firms are forced to pay this levy The Responsibility in Gambling Trust becomes a public service provider, not a charity.

The firms hardest hit by this new compulsory levy will be smaller independent bookmakers. This could force them out of an already tough market (since the boom of internet bingo and poker websites) as well as force the increased costs onto the punters. Possible externalities of this route could be the growth in foreign internet gambling sites or unlicensed bookmakers.

This government has already banned smoking in public places, happy hours and relatively cheap drinking. Now they intend to make it more expensive to gamble. There really is a direct correlation between what they discourage and the pleasure people get from it. Ironically, the politicians were not so righteous and prudent whilst gambling with our public finances, economy and future prosperity.

Blog Review 834

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In one way we could think of the second stage of the stimulus as being like the Battle of the Somme. So far our tactics haven't worked so let's go large!

Even Obama's new advisor seems to be indicating that fiscal stimulus won't work.

And of course a stimulus fired by spending leaves us open to the most egregious pork.

One such piece of infrastructure pork here in the UK is a broadband rollout. There is a better way.

There is of course real world evidence that there is a slowdown: oil stocks are booming.

This fall off in car sales. It's not all about the recession you know.

And finally, conclusive proof that soccer is becoming more popular in the USA.

 

Printing money: the Zimbabwean solution

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printing-money-the-zimbabwean-solution

It

seems

that Gordon Brown may be planning to resort to a Zimbabwean policy to get himself and us out of the credit crunch – simply printing more money. It will probably have the same effect – stagflation. Like we had in the 1970s under Brown's predecessors Harold Wilson and James Callaghan.

Printing money is supposed to make us all feel richer, so we go out and spend. But money is like anything else. When there is more of it about, it loses its value. People may not notice this immediately. They just see they have more money in their pockets, and feel better off. But then prices start to rise again, and they realize that they're actually no better off at all. They've just spent their savings, so they're actually worse off, or they've invested in new business ventures that will come to grief because eventually people will see that their new riches were illusory.

Money is a very powerful economic tool – it runs through every bit of the economy. You shouldn't use it to try to correct temporary ups and downs in economic performance. It should grow at a constant rate, reflecting growth in the economy. If you try to adjust it in fits and starts, you will just make things worse.

Frankly, this is a time for sound money that we can trust. And it's a time for investment decisions to be driven by market rates of return – not by politicians taking our money with one hand and giving it out with the other in the attempt to create high-profile jobs. Only from a solid, market foundation will the economy recover.

Printing money: the Zimbabwean solution

2724
printing-money-the-zimbabwean-solution

It seems that Gordon Brown may be planning to resort to a Zimbabwean policy to get himself and us out of the credit crunch – simply printing more money. It will probably have the same effect – stagflation. Like we had in the 1970s under Brown's predecessors Harold Wilson and James Callaghan.

Printing money is supposed to make us all feel richer, so we go out and spend. But money is like anything else. When there is more of it about, it loses its value. People may not notice this immediately. They just see they have more money in their pockets, and feel better off. But then prices start to rise again, and they realize that they're actually no better off at all. They've just spent their savings, so they're actually worse off, or they've invested in new business ventures that will come to grief because eventually people will see that their new riches were illusory.

Money is a very powerful economic tool – it runs through every bit of the economy. You shouldn't use it to try to correct temporary ups and downs in economic performance. It should grow at a constant rate, reflecting growth in the economy. If you try to adjust it in fits and starts, you will just make things worse.

Frankly, this is a time for sound money that we can trust. And it's a time for investment decisions to be driven by market rates of return – not by politicians taking our money with one hand and giving it out with the other in the attempt to create high-profile jobs. Only from a solid, market foundation will the economy recover.