Speaker out

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Traditionally when a Speaker of the Commons is elected, he or she is supposed to feign reluctance because of the past perils of the job. This is symbolized by having the Speaker dragged to the chair by MPs. This is the first time one has been dragged from his chair. All of the reasons given are no doubt true: Mr Martin had lost authority; he miscalled the whole expenses row; he underestimated the public outrage. It is also true that he was seen from the outset as a weak candidate, lacking the gravitas which the post calls for. He was also seen falling short of the objectivity the job requires.

Something else might well be true. It is quite possible that MPs are looking for an event to draw a line under the whole row about expenses, hoping that in the public mind it will now be regarded as over and done with. The fall of the Speaker, they might hope, will settle the matter. They could well be wrong about that, themselves underestimating how badly let down the public feels. Those who abused the system the most may yet find that selection committees and constituency voters refuse to be fobbed off by seeing a fall guy go down, and insist on punishing the real culprits. We could be in for a most interesting election.

Who will regulate the politicians?

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The Speaker is not the first nor will he be the last victim of the tsunami of receipts currently washing over the Houses of Parliament. This exposure of the true financial wheelings and dealings of our MPs has resulted in public anger and many calls for a change to the system. A persistent, and consistent, call from all shades of the political spectrum has been one for transparency and that is something all MPs should now be subject to. But as we have seen, a system devised by MPs, for MPs, will no doubt suffer from further MP abuse as they seek to line their own pockets. We need an alternative.

It is time that we put ourselves back in charge. There is an election on the horizon and we, the people, have an opportunity to start afresh: we could simply elect only those who have never sat before. All the parties have in place the necessary machinery that can help the virginal politicians take their first faltering steps toward governing us properly without recourse to having their hands in the proverbial till, or snouts in the trough!

There is an opportunity to hold a bloodless coup and observe whether the system itself is corrupt or if the trade merely attracts those who are of a weaker moral outlook. The current suspicions held by the majority probably straddle both camps, which is why the forthcoming European and General Elections will both suffer from even lower turnouts than usual. But rather than be helpless observers to reformers reforming their own system we can impose the ultimate punishment upon these corrupt transgressors: removal from their seats, and distance placed between them and their access to our wallets.

NB: In an ideal world there would be very few politicians required, perhaps this could be the first step to removing the majority by decapitating their power substantially.

Power Lunch with Peter Hill

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Old and New Media met across sushi and sandwiches at the Adam Smith Institute today. Our principal guest was Peter Hill, Editor of the Daily Express, but with bloggers there like Guido Fawkes, Tim Worstall and Mike Smithson of politicalbetting.com, there was a predictably lively discussion on his theme that the internet was killing newspapers – and not replacing some of the public service they deliver us. Newspapers are giving away their content for nothing online, said Hill, but this can hardly be a good business model. Local papers are suffering particularly – much of their traditional classified advertising has moved to online providers, and advertising generally is down. But local papers play an important role in holding local councils, police and officials to account, so when they go, it's a loss to democracy. Then there is the BBC, which has a vast, free website completely funded by the taxpayer. Who can compete with that? But its effect must be to take business away from commercial newspapers. The bloggers were united in their disapproval of the BBC's taxpayer-subsidized webworks, but weren't likely to shed a tear for the print media. But perhaps there is something different about newspapers. Would the MPs' expenses scandal have made so much impact if the details had simply come out online? As Smeargate showed, bloggers can bring down politicos. But perhaps newspapers can bring down governments...

Printing money: who benefits?

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There are some who would benefit from hyper-inflation.

Blog Review 966

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It's true, this is one of the things that is desperately needed in British politics. That the left will actually start looking at the evidence of what works rather than what they desire might work.

For example, regulation almost always simply benefits the largest incumbents.

And yes, high tax rates really do make some people flee the jurisdiction.

This might not be the most surprising number ever.

Why do politicians prefer cap and trade over a carbon tax? Because cap and trade offers greater opportunities for politicians to meddle.

More dystopian writing from The Guardian.

And finally, the first line here shows why economists are different.

BAA: Over two decades of indecision

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Today’s announcement by BAA that it is appealing to the Competition Appeal Tribunal (CAT) over the Competition Commission’s (CC)  report prolongs the ongoing indecision on UK airports policy.

Ignoring the natural justice element of the appeal – as to whether one of the CC’s members had a conflict of interest - by far the more important ground is whether it is unreasonable to expect BAA to sell three of its airports within two years in current depressed markets.

Since its privatisation in 1986, BAA had been adamant that one dominant airports owner was best for UK plc, despite the fact that much of its investment went into new retail outlets.

This mantra endured for almost 20 years until BAA was taken over by a highly geared private equity consortium led by the Spanish-based Ferrovial. Arguably, this risky financial deal should have been blocked. 

In fact, the worm began to turn before the recession kicked in, when various shambolic incidents at Heathrow - for which British Airways shares some blame – drove the competition agenda. 
 
Following the recent CC report, a rapid U turn was executed. Although BAA was to retain Heathrow, Gatwick had to be sold off; despite today’s appeal to the CAT, this disposal seems set to continue. Further sales of Stansted and either Glasgow or Edinburgh are also required by the CC.

With bids for Gatwick coming in at c15% below the near £1.6 billion Regulatory Asset Value of Gatwick, the Ferrovial consortium will be sitting on a heavy loss. Neither will this valuation help other regulated businesses. 

Such massive policy shifts over a short period are not the best way to run an industry dependent on long-term investment, a factor that is crucial to Stansted’s future - whether based on BAA’s projected investment costs or those promoted by the far more parsimonious Ryanair.   
 

The good news about MPs' expenses

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There are two silver linings to the cloud about the bogus and outrageous expenses claimed by Members of Parliament. The first is that we now find it easier to convince people that "they're all in it for themselves." Recent disclosures have made this so patently obvious that heads nod without dissent. This is especially true when we put a gloss on this selfishness by calling it "Public Choice" theory.

The second good aspect is that it undermines the moral authority previously claimed by law-makers. Sheltering under the cloak of the public interest, they passed their absurd and restrictive laws to confine our lives, while claiming to be the custodians of public virtue. A few weeks ago we saw self-righteous MPs castigating bankers for their 'greed,' but we now know that their own hands were assiduously pilfering the public purse at the time.

If we want to stop the tide of petty legislation that interferes in our lives, it helps if the would-be legislators are devalued currency. Law-makers have claimed moral authority to impose choices on us that we can and should make for ourselves. Now this is stripped away, and if people have no respect for the law-makers, they might have no respect for their claim to direct our own lives better than we can direct them ourselves. It sits ill to see people passing laws which claim to improve our behaviour when we know that they themselves looted taxpayer funds to support non-existent mortgages.

We always knew they had double standards and were entirely hypocritical in their claim to moral authority over us. Now everyone knows it. Yes, it has undermined the authority of Parliament, and yes, this is a very good thing.

Money talks

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In this case money tells us a little about Robert Mugabe and a lot about centrally planned economies. The hundred trillion dollar note is literally not worth the paper it's printed on, and the city authorities in Harare had to put up notices in the loos forbidding people to use banknotes in the toilets (since they are cheaper than tissue, albeit still, by comparison, 'hard' currency). The quantitative easing practised by the Mugabe regime made money worthless, except to collectors such as myself. They have now abandoned the currency entirely, with the result that a market in foodstuffs and other goods has begin to re-emerge, provided you pay in anything other than barrowloads of the local money. Gresham's Law famously says that bad money drives out good, meaning that people pay in the devalued coin and hoard the good stuff. But this only applies where 'legal tender' applies. If you cannot be forced to take the bad stuff, Gresham's Law is reversed, and good money drives out bad (because no-one will take it unless they are forced to). In Zimbabwe, the moment they allowed people to trade in other currencies, the local money was abandoned. Perversely, it gained in value as a collector's item and a reminder of the follies into which socialism can lead… Afterthought:  A friend, hearing about the note, asked if it were from Zimbabwe or England in 2012.  Funny, but scary…

IPN: 2009 Bastiat prize for journalism

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International Policy Network (IPN) is now accepting submissions for the 2009 Bastiat Prize for Journalism. The Prize is open to writers anywhere in the world whose published articles eloquently and wittily explain, promote and defend the principles and institutions of the free society. Submissions must be received on or before 30 June, 2009.

This year, IPN will award two prizes. In addition to the Bastiat Prize for Journalism (First - $10,000; Second - $4,000; Third - $1,000), they will award a Bastiat Prize for Online Journalism (one winner only, $3,000).

Click here to find out more.

Labour on the fall

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It is looking increasingly bleak for the government.