Tim Worstall

Arnold Kling over at Econlib has been saying for years that there's more (or less if you prefer) to current economic woes than just a shortage of aggregate demand. We're going through a period of quite rapid economic change (the internet is only part of it, the container ship and thus globalisation is perhaps more important) and this leads to restructuring. And restructuring simply takes time as we all scratch our heads and try to work out what to build as our new model to replace the old.

As we all know one of the differences between the Anglo-Saxon variant of capitalism and others such as Rhineland such is the way in which economic activity is financed. They tend to use banks to finance both the debt and equity portions of a business, we tend to use markets to do so. For us large companies tend to issue shares, bonds, commerial paper, and even small companies don't get their equity from banks, only their debt financing.

Nigel,

Zoe Williams had a stab at trying to understand the living wage idea this past week.

This report from the Fair Pay Network. It's really very cute indeed. Cute as in naive, childlike innocence.

Poor peeps who get poor wages working in supermarkets should get higher wages because it's just right that they should get higher wages. There is absolutely no acknowledgement at all that the amount of labour required, the number of jobs there are to be had, the number of people who will, can be or might be employed, is not a fixed number. They're seeing the whole thing in entirely static terms.

nef (yes, they're so archaic they still consider ee cummings cool) likes to think that their acronym stands for new economics foundation whereas every fule kno that it really stands for no economics foundation. As Chris Snowden, sometimes of these parts, discovered when he went to one of their meetings.

A certain amusement this morning as everyone gets downgraded.

Europe has been plunged into a fresh crisis after France was stripped of its coveted AAA credit rating in a mass downgrade of nine eurozone countries by the ratings agency Standard & Poor's. S&P said austerity was driving Europe even deeper into financial crisis as it also cut Austria's triple-A rating, and relegated Portugal and Cyprus to junk status.

This is one of those slight puzzlers that comes from my long running thought that not all is quite as it seems with respect to official statistics. I'm not entirely convinced that the UK and US are as unequal as looking at the official inequality statistics (the Gini Index for example) would have us believe.

Have a look at this:

It's a consitent trope from those over on the mouth breathing left, that everything would just be better if we did more manufacturing in the UK. More specifically, that if we just had more manufacturing then everyone would be employed. Which would be so nice, wouldn't it?

The problem with this is that mass employment in manufacturing just isn't coming back. Ever.

The Guardian often does us proud in bringing us economic lunacy dressed up as viable or well intentioned concern for people or the planet. But this one really takes the biscuit: