People used to believe this

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A recent column by Matthew Parris deserves even wider coverage than it received. He made the point that the atrophy in a disintegrating government is betrayed by the media's disregard for things it would once solemnly have reported. "We no longer bother to rebut the Prime Minister’s improbable claims," says Parris, "or dispute his wacky ideas. There’s no point."

And Gordon Brown, who always loved reeling out meaningless statistics to bully and cow his audiences into submission, is coming out with some real corkers. Parris cites two from Labour's recent conference:

“Starting now," said Mr Brown to his conference in Brighton three weeks ago, “and right across the next Parliament, every one of the 50,000 most chaotic families will be part of a family intervention project . . ."

It took hardly a nanosecond to realise that this was a ludicrous undertaking on many levels. It certainly wouldn’t be starting “now". What is this new “project"? Where did he get the figure of 50,000 “most chaotic families" from? Absurd.

Yet no-one mocked it or disputed it. They barely noticed it. They no longer either accept this sort of nonsense, or even think it matters. Parris gives a second one:

“From now on," Mr Brown told his Brighton conference, “all 16 and 17-year-old parents who get support from the taxpayer will be placed in a network of supervised homes." But this is astonishing, isn’t it? Where are these workhouses? Have you seen any young parents carted away yet?

At one time some serious voices in the media might have challenged fantasies like this, but no-one can any longer be bothered. Matthew Parris is the only commentator I saw even mention this, and then only to show that nobody even bothers to take it seriously any more.

The UK might indeed pull out of recession by the turn of the year. Let us hope so. But no-one gives any weight to the fact that the Prime Minister says so. If anything, that would make it seem more improbable. Like a busted bank, his capital of trust is gone, betrayed and squandered over the years.

Check out Dr Madsen Pirie's newly-published "101 Great Philosophers".

Tax, privacy and the state

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In Norway, an extreme intervention in privacy has become a deadly threat to respected and peaceful citizens, their families, children and spouses. This weekend a number of Norwegians received blackmail letters threatening them to hand over large sums of money to the offenders.

The offenders have used the publicly available tax database to pick out their victims. Each year the Norwegian government publishes all Norwegian citizens’ tax information on the internet for everybody to look at. From this database you can find out the income, paid tax and wealth of all Norwegian people and Norwegian companies. Offenders have picked out those most likely to be able to pay. The publishing of the databases was stopped for a short period, but reintroduced when the present social democratic government came into power.

The same danger is faced by Swedish taxpayers, where the government, like in Norway, exposures citizens’ private lives and incomes. The Danish government does not perform this kind of policy at the moment, but the Socialistic Peoples Party has proposed to introduce this legislation, if a social democratic government comes into power after the next election. The reason they give for this is to make it possible for people to keep an eye on each other to ensure everybody pays tax. Essentially they are encouraging people to spy on each other.

When facing absurdities like this the people of Scandinavia really need to ask themselves how much they really want to expose their private lives to public inspection. They also need to consider if it is proper that self-justifying politicians are able to give what should be private information to the world without asking first?

On a related matter, the ASI have an upcoming event entitled "Tax Competition: Economic Freedom and National Sovereignty". Click here to find out more.

Are these people for real?

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Could children perhaps become part of an adult's personal carbon allowance? Could you offer rewards: have one child only and you may fly to Florida once a year?

Alex Renton, 'Fewer British babies would mean a fairer planet' The Guardian

H/T Mark Steyn

Don't have nightmares.

Lord Stern is wrong: giving up meat is no way to save the planet

Dr Madsen Pirie argues that technological advances, not “live more simply” environmentalism, will deliver a greener planet.

Lord Stern, whose 2006 report set out the consequences and costs of various levels of global warming, has now called for humans to stop eating meat. His reasoning is that our farm animals, especially cows and pigs, expel methane, which is 23 times more potent than CO2 as a greenhouse gas, making meat-production account for 18 percent of all carbon emissions. He says that it will become as socially unacceptable to eat meat as it is to drink and drive.

The proposal is not surprising, since it is but the latest in a series of proposed behavioural changes which are claimed to be essential to the planet’s survival. People have been told they must eat locally-sourced food, abandon their cars for public transport, and drastically cut their air travel, among many other ‘essential’ changes. Giving up meat is only another step on the ‘live more simply’ road.

At the heart of the environmental lobby lies an unease at progress and change, and a veneration of a calmer, slower lifestyle. It goes hand in hand with a disregard for the material goods which extend choices in the rich nations, and even for the economic growth which offers the poorer ones a ladder out of subsistence. Although ‘saving the planet’ is advanced as the reason why these lifestyle changes must be implemented, it sometimes seems as if the simpler life is an end in itself, and that global warming is a convenient excuse to force acceptance of it.

Lord Stern, whose 2006 report set out the consequences and costs of various levels of global warming, has now called for humans to stop eating meat. His reasoning is that our farm animals, especially cows and pigs, expel methane, which is 23 times more potent than CO2 as a greenhouse gas, making meat-production account for 18 percent of all carbon emissions. He says that it will become as socially unacceptable to eat meat as it is to drink and drive.

The proposal is not surprising, since it is but the latest in a series of proposed behavioural changes which are claimed to be essential to the planet’s survival. People have been told they must eat locally-sourced food, abandon their cars for public transport, and drastically cut their air travel, among many other ‘essential’ changes. Giving up meat is only another step on the ‘live more simply’ road.

If we give up animal husbandry and eat the vegetarian diet Lord Stern advocates, it would be one devoid of milk, cheese and butter, and the world would have to get along without leather for its shoes or jackets, or wool for its clothes. This is not going to happen, any more than the other ‘essential’ changes.

What will happen instead will be new technologies that solve the problems without behavioural change. There will be emission-free transport, cleanly-produced energy, and minimal-impact production. Human ingenuity and resourcefulness are quite capable of achieving this, and can even be accelerated by suitable incentives.

It is highly likely that animals will be genetically engineered to emit less methane, and highly unlikely that human beings will give up a large part of their diet. The one is easy to do; the other is probably impossible, as well as undesirable. Some in the environmental lobby oppose this kind of technological change precisely because it will make behavioural change unnecessary. It will enable people to live as they want to live, rather than as others think they should live.

But technology will win, and the constricted lifestyles advocated by Lord Stern and others will lose. A look at human development suggests which course is the more likely.

Published on Telegraph.co.uk here.

So, what's it all about, this neo-liberalism stuff, then?

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So let's play a little game shall we? Yes, we are indeed the evil cabal that has imposed neo-liberalism upon the world in recent decades. Yes, it is indeed all our fault: the current recession, the globalisation, the insistence upon light regulation, privatisation, freer trade if no one is quite ready for free trade yet. Yup, it's us, the neo-liberals, teaming up with the Illuminati, the Rosicrucians and whoever Dan Brown is going to write about next to bend the globe to our will.

So what's it all about then? Other, of course, than the intense pleasure of the exercise of power over mere mortals?

This actually:

Via Bluematter, that's the result of a new paper.

• Defining poverty as less than $1/day, world poverty rates fell by 80% from 27% in 1970 to slightly more than 5% in 2006.
• The corresponding total number of poor fell from 403 million in 1970 to 152 million in 2006.
• Similar findings apply if other poverty measures are used ($2/day, 5$/day, etc)

We want the abolition of global poverty and we've been working towards it in our excessively evil manner. By pointing out that while poverty of the most gut wrenching sort might be the natural state of mankind it is indeed possible to do something about it. That something being the creation of wealth with which to alleviate that poverty which is why we've been shouting about the need for the globalisation, the insistence upon light regulation, privatisation, freer trade if no one is quite ready for free trade yet, even if there is the occasional hiccup along the way in the form of a recession or even two.

Being slightly more serious than the above jocular tone what the global economy has managed (and yes, much of what it has managed has been to do with that now most unfashionable neo-liberalism) over that 36 years is that our living standards have around about doubled, even while they've taken a 5% or so hit in these last couple of years, and global poverty has fallen by 80%. That's the largest drop in poverty in the entire history of our species, longer, since back before Lucy was a glint in her father's eye.

So if you do want to insist that the last few decades have been the triumph of neo-liberalism then just remember: it's been the best ride and the best bargain that humanity has ever had. Might actually be worth continuing it too.....

Georgia on my mind

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I've blogged before on the question of where, assuming that Britain is indeed going to the dogs, libertarians could move to. I suggested Hong Kong, Switzerland, Australia, and the United States, all of which had their various pros and cons. One possibility I hadn't previously considered, however, is Georgia – the former Soviet republic which might just have the most libertarian government in the world.

Let's start with the tax system. Their flat-rate income tax – initially set at 25% – was cut to 20% in response to the economic downturn, and is set to be further reduced to 15% by 2013. The tax on interest and dividends will be phased out by 2012. VAT is 18%. Corporation tax is 15%. Their welfare system is equally sensible. Rather than funding universal public services directly, the government provides highly targeted (i.e. means-tested) assistance through vouchers and cash benefits, leaving choice of providers entirely to the recipients.

What's more, it looks as though the government will soon pass into law one of the best pieces of legislation I've ever seen: The Liberty Act. This act, which is going to be incorporated into the Georgian Constitution, caps government expenditure at 30% of GDP, budget deficits at 3% of GDP, and public debt at 60% of GDP. The establishment of new regulatory agencies is banned, as are price and capital controls. It also enshrines the principle of choice in social programmes, requires that impact assessments are carried out before any new legislation is passed, and, best of all, mandates that any new taxes or tax rises must be approved in a nationwide referendum.

Of course, Georgia is not perfect. It's still a fairly poor country, with persistently high urban unemployment, and 55% of the workforce employed in agriculture. Inflation is relatively high, and corruption remains a problem. And then there is Russia. But if those drawbacks don't deter you, then Georgia has one additional advantage. Its open borders policy means that if you want to move there, you are free to do so.

Mortgage regulation

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According to The Independent, one million might be frozen out of the mortgage market. Concerns stem from the fact that financial authorities look set to ban banks from offering mortgages to people who cannot prove their income.

Essentially, the FSA wants to prevent banks doing business with people who can’t prove that that they will be able to pay off their loans. Such regulation is apparently intended to prevent another credit crunch. As Jon Pain, FSA managing director of supervision, explains to The Independent, “nearly 'half' the mortgages advanced prior to the advent of the credit crunch were either self-certification or fast-tracked, meaning borrowers were able to obtain loans without providing any evidence that they could afford to pay them back."

On the one hand, that sounds fair enough. We don't want another financial disaster. However, the intervention of the FSA could be rendered unnecessary simply by letting the market rule. No sensible bank would ever do business with anybody if there was not a decent chance of getting money out of the deal. So why is this regulation necessary? Maybe it’s because the danger of doing risky business has disappeared due to the government's taxpayer-funded bank bailouts. Indeed, I think this is most likely to be the case. The bailouts have made it utterly clear that if you are a bank (especially if your name is Lloyds) then the natural relationship between risk and possible outcome is no longer valid.

As such, the intervention of the FSA is a perfect example of how government intervention leads to market failures and even more regulation.

There are expensive ways of doing this

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And there are ludicrously expensive ways of doing this. This being attempting to mitigate climate change of course. Start from the point that the IPCC and the Stern Review are correct: it's happening, it's us and we should think about doing something about it. This allows every fanatic with a plan to leap aboard the bandwagon and insist that they, and only they, know how to save the world: amazingly, that salvation always comes from whatever it is they were already proposing without the now accepted problem.

Take, for example, solar photo voltaic power generation. For boring technical reasons I think it will in the future be part of the solution but similarly I don't think it is yet. Yet all and sundry are screaming that we must have feed in tariffs for solar PV for that is exactly what will save Flipper from boiling at the end of times. We should, indeed must, do as German has been doing. So how has Germany been doing?

Given the net cost of 41.82 Cents/kWh for PV modules installed in 2008, and assuming that PV displaces conventional electricity generated from a mixture of gas and hard coal, abatement costs are as high as 716 € (US $1,050) per tonne.

Ah: we've already specified that we agreeing with the Stern Review above and he said that the cost of a tonne of CO2 is $80. Paying more to abate emissions than those emissions will cost us is known as making us poorer: in this case, feed in tariffs make Germany poorer by $970 for every tonne abated. That is what is known technically, in policy circles, as "screaming nonsense".

So no, we must close our ears to those siren songs telling us that we must copy Germany on this matter. We do not want to have feed in tariffs for solar PV in the UK. But if we're not going to have them then what should we do? I've already mentioned that I think the technology will, when it has matured, be part of the solution. But there's one or two iterations, generations, of technology to go before it really is. And I've also mentioned in other posts here what we should be doing about all of this at the moment.

Nada, nothing, zip, bupkis. We just wait while those two iterations of the technology pass us by and we start using it when it makes financial sense to do so: when the subsidy needed is less than the benefit of the CO2 abatement. In the meantime we just sit back and let the German taxpayer make themselves poorer to our future benefit. We can always send them a thank you card later: or if you want to be more serious, we can trade those things we've been able to make by not pouring money into a subsidy hole for those solar cells that they have made by doing so.

Forever blowing bubbles

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Earlier this week, MoneyWeek published an article by Martin Spring entitled "Why stockmarkets are still blowing bubbles". I hope they won't mind me quoting at length, because the article makes an extremely important point:

David Roche of the consultancy Independent Strategy says the defect in the argument that the world is on the path to recovery is "that none of the problems that caused the credit crisis have been resolved." Household and bank leverage is worse than before, the bad debt problem has not been dealt with, and we have a new level of profligacy and leverage – this time, in government.

Edward Chancellor of fund managers GMO says it's misleading to expect a sharp recovery from last year's collapse because of historical precedents. He contrasts the 19th century with the current situation.

Then "depressions were left to burn themselves out. There was no fiscal nor monetary stimulus; unviable businesses went under; households were not succoured with rate cuts and wage incomes fell; excessive debt burdens were resolved through default rather than bailout. Deflation purged the economy like a forest fire, preparing the ground for a rapid recovery."

By contrast, "the aim of policy today is to mitigate the pain of the economic downturn by all available means. Government deficits prevent the recession turning into a depression. The Federal Reserve cuts rates to zero and expands its balance sheet, thereby arresting the debt deflation. Such actions reduce the immediate social costs of the financial crisis, but they do not resolve the problems left behind by the credit boom."

I have felt for a while that the prospects of an early economic recovery were being over-hyped in the UK, and Friday's disappointing GDP statistics appear to confirm this.

The trouble is that people have been mistaking an exuberant stock market for a bona fide economic recovery. Yet in truth the rise of the FTSE is largely a product of the Bank of England's quantitative easing programme, as new money finds it way into financial assets, and is not backed by any genuine upturn in the real economy. Or to put it another way: it's just another bubble.

Ruining the TA

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The British Army is one of the most called upon in the world. It delivers more "bang for buck", than possibly any other regularly utilised force. Equally though, these expectations have become so entrenched, that any additional request put to the Army, is considered already done once it has left the mouth of the Minister of State for Defence (for it is often left to the junior Minister, rather than the Secretary of State for Defence, to make unpopular decisions regarding manpower). The recent decision to halve the number of days payable for training, to the TA, is the most short sighted decision on the part of the MOD in a very long time.

The TA runs on the goodwill of its personnel. We have families, we have increasingly demanding jobs, we are paid a starting salary of approx £30 a day, to put ourselves in harms way. There is no greater civic commitment, than to be a member of Her Majesty's Forces. The TA do this in addition to their full time jobs and lives. The British contribution to the Iraq War, was reliant on roughly 15% of its troops being TA. The war, quite simply, could not have been conducted without them. They also require immense management time to co-ordinate efforts, training, pre-deployment training - and simply 'showing up'. I personally know members of both the TA and the Reserves (recently left members of full time Service personnel), who have missed the birth of a child, whilst away on Operations. This is a regular occurrence for our full time Army colleagues, but it is a big "ask" for someone who has volunteered to be there in his or her spare time...

After numerous strategic defence reviews and initiatives, during which the profile of the TA has been intrinsic to the future operational capacity of the Army, to now have its ability to service that capacity – to effectively be cut off at the knees – is ruinous. The phrase “One Army" was coined several years ago to highlight Government policy that there was to be no separation between the Army and the TA. Both Services are interlinked and dependent on each other, from logistical support to specialist (and expensive) training, shared between the two platforms. The Army has roughly 110,000 personnel, and the TA roughly 35,000: the TA are integral to the Army.

I recommend to simply reverse these short sighted cuts, and have the bravery of their convictions to actually go further along this integrationist route, and afford the TA the recognition that their bravery in the field warrants. To go further with equipment sharing, and after Tour support: still there are too many instances of damaged TA soldiers returning to their civilian lives without the support their full time colleagues receive.

To cut by half the days available to be paid (to 11), effectively means one weekend every two months - either that, or some units are just ceasing Training for several months. This is supposed to fulfil duties that prepare our TA colleagues to go forward to deployment training, and, at the very least, to provide the "Home Guard" function, vital to protect this country's national interest. The net result, in a year's time, could easily be an operational TA of half its present size, its members simply having drifted away...back to their own lives. We anticipate with resignation the new Government's response at that time.

Damian Merciar 135 Indep Geo Sqn RE (V) (www.merciar.com)