Crime and Punishment


Fascinating stuff this, like a press release from the Howard League on how we should treat criminals.

I'm sitting in Oslo having lunch with the director general of the Norwegian prison service – Kristin Bolgen Bronebakk – and we are discussing "Scandinavian exceptionalism". In other words, why is it that Finland, Sweden and Norway in particular, have much lower rates of imprisonment than other European countries?

Isn't that wonderful? They've managed to design a system where those who employ their rapacity upon their fellow citizens do not end up warehoused, locked in a cell for 23 hours a day, in a Victorian building. Perhaps there's something we might learn from this system, how do they do it?

Oslo had the highest rate per person in Scandinavia in terms of reported crimes, with 90 reported crimes per 1,000.

Copenhagen had 50 crimes reported per 1,000 and Stockholm had 79.

In New York, there were 22 reported crimes per 1,000 inhabitants.

As economists have endlessly pointed out, it's not just punishment for crime that reduces crime. It's a combination of the severity of the sentence, the conditions of serving it plus the liklihood of detection and conviction. All those together add up to the expected punishment for a particular action.

And whatever else the Norwegian version of social democracy might have to tell us here it seems clear that not locking up criminals does not reduce crime.

So that's one more thing that we know not to do then.

You like the Red Skelton painting?


Simon Jenkins is quite possibly the most engaging journalist around. His book Thatcher and Sons is certainly one of the best critiques of modern politics as it is practiced today. However, his recent article in The Guardian shows that, like self-proclaimed 'non-libertarian' David Cameron, he is not a libertarian.

In fact there are many similarities between the Tory leader and Jenkins in this article. We have of course the inevitable rant against people being paid too much, but we also have echoes of Cameron's argument last year that it is the job of politicians to make people happier. Jenkins writes:

We might even see a resurgence of the "happiness" movement of the early 1970s; of Schumacher's "small is beautiful" economic theory. We might find a new appreciation for the king of Bhutan's edict on the importance of "gross national happiness", and for John Ralston Saul's remark that the American mission of "life, liberty and the pursuit of happiness" was nothing to do with money. Saul called for a more subtle understanding of contentment, "to escape the 20th-century idea that you should smile because you're at Disneyland".

Of course, Disneyland is not for everyone, especially it seems members of the Canadian Intelligentsia such as John Ralston Saul. Much better a night at Toronto's Opera House, I presume. Yet such judgements are limited. Better that everyone is free to enjoy their lives without the judgement of others; especially the judgement of the King of Bhutan, living in exquisite luxury, while his underlings just survive.

Jenkins writes that Britain might even "inch up the University of Michigan's world happiness survey from its present miserable ranking of 21st, below Mexico and the US". I thought all this nonsense about happiness had gone away. Any attempt politicians make to turn this into policy will result in incursions upon our freedom as well as being destined to fail.

Freedom is what matters when it comes to happiness, because happiness comes in many shapes and sizes. To quote the great Dennis Miller: "You like the Red Skelton painting? Buy the Red Skelton painting. You like "Home Improvement"? Tape it and go over it like the Zapruder film. It's your life; live it on your terms".

Blog Review 752


Perhaps the bailout could be best described as Hayek's Revenge?

Yes, regulation really does matter, as did Lehman.

Now that we know more than we did we need less regulation than we did need.

Contrary to popular belief, it doesn't all stem from the stupidity (or greed) of the bankers.

On the inanity of targeting, or, be careful what you measure.

A look back at the 50's literati.

Boho London is arguably the only environment in which the introduction of cocaine actually improved the general level of health.

And finally, a design icon (umm, iconic design?) celebrates its 100th birthday.

Food fights


Oh dearie me, those who would control our lives for us, we little baa lambs being quite incapable of doing so ourselves, seem to have found a new phrase to explain their actions.

But individual action is not enough. It requires choice-editing, not personal choice.

No. Sorry, but no. I'm an adult and I, like all the others who share that distinction, am entirely capable of both taking my own decisions and also of bearing the consequences of them. While you've slightly disguised your intention by calling it "choice-editing" your aim is obvious enough. You want everyone to do as you would will it, not as they, in that irritating fractious manner of free people enjoying their liberty, would. And for that, Tim Lang, you need to be assailed, even if only in a blog post.

But we should go further, and subject Mr. Lang to derision as well.

...when we produced 80% of foods consumed here that could be grown here. Now it's near 60%. Why are we using others' land to grow food we could grow here?

It's called trade laddie. That voluntary exchange, that exploitation of comparative advantages, the division of labour that makes the modern world so stinking rich. The very thing that makes it possible for two grown men to spend their time, as we both do, pondering upon food policies rather than stooped double over a hoe in the fields growing the stuff.

Which rather leads us to our second reason, beyond the curtailment of our liberty, that we should oppose such "choice-editing". Those who would be such editors simply have no idea what they're talking about anyway.

Follow the evidence


If you haven’t read Dennis Sewell's recent Spectator article on the financial crisis yet, you should. It makes a very compelling case that big government, far from being our saviour, is at the root of the current situation. To digest his argument:

  • Roberta Achtenberg, President Clinton's Assistant Secretary for Fair Housing and Equal Opportunity at the Department of Housing and Urban Development (HUD), believed that racism was preventing minorities enjoying the same level of home ownership as whites.
  • She set up a network to bring lawsuits against any mortgage bank suspected of practising unlawful discrimination. When HUD's investigators couldn't find any overt racism they tried to prove ‘disparate treatment’ of minority groups instead. When that didn't work, they went after ‘disparate impact’.
  • The mortgage banks got the message. In contrast to previously conservative lending practices, "Mortgages were offered with only 3 per cent deposit requirements, and eventually with no deposit requirement at all. The mortgage banks fell over one another to provide loans to low-income households..." Now these banks are responsible for more than three-quarters of dodgy subprime loans.
  • Meanwhile, national banks were put under a different kind of pressure: "Changes were made to the Community Reinvestment Act to establish a system by which banks were rated according to how much lending they did in low-income neighbourhoods. A good CRA rating was necessary if a bank wanted to get regulators to sign off on mergers, expansions, even new branch openings." At the same time, Congress backed Fannie Mae and Freddie Mac to expand mortgage loans among low earners, and introduced new rules let them securitize subprime loans.

Smoking gun, anyone?

Blog Review 751


A nomination for the craziest piece (yet) on the financial problems.

When economic times change tastes in naked ladies change.

Another mindboggling scheme slipped out when they thought no one was watching.

Given that the banks are having such problems, why not try working without banks?

Yes, we do know how to sort out the fishing industry. Pity no politician ever listens.

If you think hte British banks have been behaving badly, look at what the German ones have been up to.

And finally, the speech that won't be given.

Bad news all round


European leaders were all looking smug earlier this week as they pumped another $250 billion into the markets and announced that the financial crisis was officially over. None more smug than Gordon Brown, of course, whose plan they had adopted.

The fact that they had been able to get together and decide anything at all gave the markets a brief boost. But now the European stockmarkets are sliding again, and our great leaders seem unusually shy about media appearances once again.

Investors know that the $250 billion will have to come from somewhere, and of course it will come from bigger borrowing, bigger deficits, rising taxes and cutbacks. The recession that everyone was waiting for has suddenly got worse. And because Europe and the US aren't going to be expanding so fast, other countries are being hit too, particularly those like Russia which produce the oil, gas, minerals and other commodities that fuel Western economic growth. The downturn just got global.

Meanwhile the bail-out plan is not alloyed good news for bank investors. It came with the price of some political demands, like banning dividends and bonuses. So banks will find themselves losing their best people to other sectors, and anyone who has any cash left will be looking for dividends elsewhere.

Given the amount of money that goes through the markets each day, $250 billion looks a modest sum. Can it really stop the rot? It seems to me that you really can't buck the market. But you can use an awful lot of taxpayers' money trying.

Various thoughts


New research from the Pensions Policy Institute has found that the cost to the taxpayer of public sector pensions is likely to rise by 40 percent (as a share of GDP) over the next 20 years. Aren't we lucky to have had Gordon Brown, that saviour of the world economy, as Chancellor of the Exchequer for all those years? His infamous pensions raid cost savers more than £100bn and destroyed the best private pension system in Europe, but don't worry: he and his gold-plated, public sector cronies will be just fine.

Speaking of the public sector, couldn't our lot follow Ireland's example? (Hat-tip to Guido) The president is taking a 10 percent pay cut, government ministers are taking a 10 percent pay cut, opposition politicians are taking a 5 percent cut, the governor of the Bank of Ireland and the Irish Financial Services Agency has volunteered for a 10 percent cut... Even the top six executives at RTE, Ireland's state broadcaster are promising a "significant reduction" in pay.

Speaking of which, good luck to Tory MP Christopher Chope, whose Broadcasting (Television Licence Fee Abolition) Bill gets its second reading in the House of Commons today. In a multi-channel, digital age the television licence is truly an anachronism. Why should I have to pay for the BBC's so-called 'public service broadcasting' when I would much rather watch Sky? And as for the TV licensing authority, who isn't sick of their crypto-fascist bully tactics?

Binning Barnett


According to The Times, Sir Kenneth Calman, the chairman of the commission on Scotland’s constitutional future, has said that the Barnett formula, which used to calculate the level of public spending in Scotland, needs to change.

He's right. The existing formula is not so much a needs-based assessment of public spending requirements as it is a bribe to keep Scottish voters quiet. That's why Scotland gets more government money per head than relatively poorer parts of England.

But the best change would be to abolish the formula altogether, and make the Scottish Executive fiscally autonomous. The money they spend, they should raise themselves.

I'd apply the same principle to every level of government in the UK. When politicians rely on their own electorates for money, they are likely to be held much more closely to account. Such a system also encourages tax competition between jurisdictions – a good way of keeping rates low and government lean.