The Pin Factory Blog

Obesity is on the rise amongst UK teenagers. Present figures suggest that 30 percent of boys and 26 percent of girls are obese according to their BMI (Body Mass Index), with the Department of Health predicting a rise of up to 6 percent for both sexes.

Many ideas have been put forth as to why this is happening. Most recently, a study by Stephanie von Hinke Kesslet Scholder found that having a working mother is detrimental to a child's weight. Ms Scholder's main finding was that there is a high incidence of obesity in children at 16 where their mothers are in full time work between the ages of 5-7. With the mother spending time away from parenting, the child effectively controls its own diet and the choices it makes tend to be unhealthy. This is also the case with childcare and schooling, both of which fail to give adequate time to the child's nutritional needs. And while there is no immediate affect on the child's weight, a poor diet aged 5–7 sets an apparent precedent that ends in 16-year olds being obese.

Working mothers should be applauded. They boost the economy and significantly reduce child poverty. It is unfortunate that there may an externality to this that affects their offspring's health, but this is an issue that should be addressed. Ideally, women should be able to provide for their children while enjoying flexible working hours (as well as support from their partners). There seems to be a degree of political consensus around this at the moment. However, in a 21st Century economy there is no need for government intervention to bring this about. Flexible working hours legislation, for example, is unnecessary; businesses and their employees should have the freedom and the rationale to draw up their contracts accordingly.

The latest from the frontline in the battle against CO2 emissions. Burn one less candle for Channukah. No, really.

Did you know that you should also avoid divorce because it's bad for the environment? 

How about the Common Fisheries Policy? Yes, that's bad for the environment too, just that the EU can't quite bring itself to say so. 

If you want to know what really happened with that Nimrod crash then here are all the details .

The sub-prime crash: if you could actually find all the relevant details then there's a lot of money to be made. 

Following on from Tom's piece this morning on Hillary and trade, Greg Mankiw's piece on why the basic arguments are incorrect. 

And finally , who should we tax, the munts or the good looking? 

In an interview with the Financial Times earlier this week, Hillary Clinton again voiced her doubts about free trade. Having previously called for the US to take a "time out" on new trade agreements, she claimed the theories underpinning free trade might no longer hold true in an era of globalization, and questioned whether it was worth reviving the WTO's Doha round of trade talks:

I want to have a more comprehensive and thoughtful trade policy for the 21st century. There is nothing protectionist about this. It is a responsible course.

Of course, Hillary's stance is not neither responsible, thoughtful, or comprehensive. And not only is it protectionist, it is it is pure politics too (her attempts to ground it in economics have already been rubbished here, by Daniel Finkelstein). Hillary has blamed globalization for America's economic difficulties because it makes an easy scapegoat. Everything from job insecurity to squeezed living standards can be blamed on foreigners, and an easy solution can be suggested – restrict trade.

The suggestion is that free trade is inherently unfair – a way of shipping US jobs abroad, where workers are easier to exploit. This is nonsense: free trade simply means the freedom to engage in mutually beneficial transactions without the artificial barrier of national borders. It leads to a more economically efficient allocation of resources, boosting productivity and creating more wealth for everyone. As we have seen in India and China, the effect of trade liberalization on developing countries can be particularly benign, lifting millions out of poverty. None of this costs America jobs – just as the US trade deficit rose from $19 billion in 1980 to $786 billion in 2006, employment rose from 99 million to 145 million.

Trying to restrict trade will only hurt the US, accentuating rather than softening any economic downturn. It won't do the rest of the world much good either. Hillary Clinton should rethink her position.

Did you hear about the man who fell into the upholstery machine? He's all right, now. In fact, he's fully recovered.

Brett Stephens had an interesting column in the Wall Street Journal yesterday, discussing The Allure of Tyranny. Why did 80 percent of Russians vote for parties allied to Vladimir Putin's Kremlin (another 11.5 percent voted for the Communists)? Why did 49 percent of Venezuelans vote for Hugo Chavez's constitutional reforms, which would have established him as president-for-life? There are three usual explanations but, as Stephens writes, none of them is completely satisfactory.

The first rationalization of why people choose tyranny is culture. Some countries are too tribal, some too religious. Others, like Russia, demand an iron fist. But cultural determination can only explain so much – "China is counterexampled by Taiwan; Zimbabwe by Botswana; Jeddah by Dubai..." and so on.

The second explanation is manipulation – the tyrant is so tactically skilled, so adept at propaganda, that people are truly misled, and do not realize quite what they are voting for. Again though, this runs afoul of reality. Plenty of people vote for tyrants with their eyes wide open.

The other theory is that tyranny relies on intimidation and dirty tricks for its success. Yet this does not explain why some tyrants are so genuinely popular. Indeed, with each explanation you look at, you come back to the same point. Jean-Francois Revel put it like this:

[S[ome important part of every society consists of people who actively want tyranny: either to exercise it themselves or – much more mysteriously – to submit to it. Democracy will therefore always remain at risk.

This is why limited government is so important, and why the slippery-slope argument against infringing liberty is so valid. Put simply, democracy alone cannot be relied upon to maintain freedom. In an age driven by opinion polls and focus groups, we all need to remember that.

Coming home after a successful short trip to Sweden. I'd have brought you a bottle of Glögg, the local Yuletide mulled wine, which is served everywhere outside in December. But of course EU regulation thwarted me.

While the shop at Stockholm's Arlanda airport has a very extensive selection of drinks of all kinds, including about a dozen different varieties of excellent-looking Glögg, I wasn't allowed to buy it. A discreet sign points out that it's only available to people flying outside the EU. Why?

Well, the EU wanted to show how integrated it is, so scrapped the duty-free alcohol and tobacco allowances for 'internal' travellers. So the duty-free shop can sell it to people going to Russia or America, but not to me.
I pointed out that I'd be perfectly happy to pay the tax on it - but no dice. There's obviously some regulation stopping me from doing that, too.

And, of course, you can't take liquids through airport security (because some nutcase once tried to mix explosives in an airplane lavatory and blow himself and all the hated westerners to smithereens) so I couldn't even buy the Glögg outside the airport and bring it through.

So sorry, I can't give you a glass of warming winter Glögg. And they tell us that we're part of the free world.

There are a number of people who aren't all that keen on what Hillary Clinton has said about trade. Daniel at the Times, Willem Buiter in the FT, Clive Crook in the FT, but here's why she actually said what she said.

On the subject of what politicians say in public, Guido on Peter Hain's latest little statements. 

On trade, why don't people get this? We impose sanctions to punish countries: so tarrifs, which are sanctions upon us, well, why are we punishing ourselves?

Could this actually be true? More storms are being named, which pushes up the "hurricane count": but more storms are being named because lower wind speeds now qualify a storm as one that should be named? 

The equation you need if you want to improve your profits as a dope dealer. 

Technology can build businesses up and it can also destroy entire industries, as the history of porn online seems to be showing.

And finally, Hugo Chavez has accepted the results of the referendum. Does this make him more of a democrat than the EU?

The Economist carries an interesting article about road pricing this week, based on the RAC foundation's latest forecast of traffic growth. By 2041, their report says, demand for road space will have increased by 37 percent due to economic and population growth. Given the steady decline in road-building over the last twenty years, and the UK's already clogged-up infrastructure, the future sounds like it is going to be very congested indeed.

This need not be the case. Standstill Britain could easily be averted by a sensible transport policy, which would make addressing both the supply of and the demand for roads a priority. Increasing the supply of roads is simple - it means building more of them. And the best method of regulating demand and allocating road capacity is well established too - road pricing.

The trouble is, both of these policies have encountered noisy opposition. The environmentalists get worked up about new roads (never mind the fact that less congestion equals lower emissions) preferring to force us onto inadequate and crowded public transport. Motorists do not seem to like the idea of paying for road space either - a petition against road-pricing on the Downing Street website attracted 1.8 million signatures.

The explanation may lie in the woefully unimpressive way the government made the case for road-pricing. They failed to point out that pricing would replace other road taxes, rather than add to them, or that many people (rural or off-peak drivers) would actually end up paying less under the new system. Then again, perhaps no one would have believed them anyway, given the current Prime Minister’s affinity to stealth taxes.

The RAC's report recommends a very sensible (and potentially popular) scheme. Fuel duty would be scrapped, and replaced with a 14 pence/l 'carbon charge'. Then motorists would pay per kilometre according to how busy the road was. I would add something to this: the money collected should fund improvement and expansion of the road network. If you are going to make motorists pay, it's only fair to give them something in return.

I was road-testing my new Ferrari when a cop pulled me over.

"Sorry, officer," I said. "Was I driving too fast?"

"No, sir," he replied. "It's just that you were flying too low."

As in the last campaign for a Clinton presidency, which Hillary nearly derailed with ill-advised health reform proposals, she has once again missed the point in her insults on private medicine.

On the campaign trail in New Hampshire she accused the US health insurance industry of spending $50 billion to avoid paying claims of their clients. But she has got the numbers wrong. Currently private health insurers are paying claims worth about $600 billion a year and spending $30 billion to adjudicate those claims, actually only denying claims worth $3 billion – not $50 billion. The cost of scrutinizing claims represents good value for money, because it keeps the premiums at bay by rejecting fraudulent and frivolous claims.

However, the ideological thrust of Clintons argument is targeting at gradual replacement of private with public insurance – in other words to expand Medicare for all Americans, with alleged administrative cost of only 3-6 percent. Her followers claim falsely that the administrative costs of private insurance (11-14 percent of premiums) alone would be enough to fund coverage for all presently uninsured Americans.

Fortunately, a meticulous actuary enquiry by the Manhattan Institute has recently dismantled this myth. Administrative costs for public insurance such as Medicare do not reflect the hidden cost of tax collection and other government functions for the administration. Under the "lowest plausible assumption about the excess burden engendered by the federal tax system" the total Medicare administrative costs would account to a minimum of 24-25 percent of all outlays. However:

A more realistic assumption raises the true cost of delivering Medicare benefits to about 52 percent of Medicare outlays, or about four to five times the net cost of private health.