Money in the news and how you are going to pay and pay and pay
THERE’S one place in the world that has had a proper experiment with voluntary egalitarian socialism. That is, it really has been tried without anyone being whipped in to it by Stalin, Pol Pot or some other bloodthirsty monster. And the thing is, even among said volunteers, it doesn’t actually work very well:
After decades of declining numbers, bankruptcies and privatisation, Israel’s kibbutz movement is undergoing a remarkable revival, with rising numbers wanting to join the unique form of collective living.
The population of about 143,000 is the highest in its 102-year history, after growth of 20% between 2005 and 2010, according to the official Kibbutz Movement. More people are now joining kibbutzim than leaving – a reversal of the crisis years – and the influx of working-age adults and young children is helping to redress the balance of an ageing population.
YES, yes, any number of mouthbreathing lefties insist that the UK is “too reliant” upon finance. That we’ve got to cut the banksters down to size. That we should concentrate more on the production of real things.
The sad thing is, given how rarely said mouthbreathers are actually right about anything, they do have a point. It is actually possible for the financial sector to grow too large. There’s a lot of very good (ie, not lefty) research showing this. Try here if you’re into the geeky side of economics.
AN interesting and long piece in The Guardian about the rise of charity food banks in the UK. And here’s the bit that truly pisses me off:
Stephen Timms, shadow work and pensions secretary, says it is a “pretty worrying reflection of what’s going on in the country, when people are dependent on these charitable handouts. My worry is that we are really just at the start of cutting back the benefits system and already a large number of people are not able to buy food for their families. This shouldn’t be happening on the scale that it is now happening.”
Manchester Labour MP, and former head of the Child Poverty Action Group, Kate Green describes the growth of food banks as a disgrace. “I feel a real burning anger about them,” she says. “People are very distressed at having to ask for food; it’s humiliating and distressing.”
Mary Creagh, shadow environment minister, who has responsibility for food and was brought up in Coventry, is ambivalent about the rise in food banks. “There’s something about feeling that you are asking for charity rather than getting something from the state … it’s humiliating; it involves swallowing your dignity, travelling distances to the centres and walking home with plastic bags,” she says.
The pissing off comes from the howlingly sad insistence that if something needs doing then it has to be the State doing it.
YOU women cannot have it all. Marissa Mayer cannot have it all. Nor can men, of course, but today’s example of the harsh realities of life comes from Marissa Mayer. Now we might think that she’s the perfect poster child for a woman who can hand indeed does have it all. One of the early Google engineers, thus worth squillions from stock options. Just appointed CEO of Yahoo, thus with the opportunity to make more squillions.
Most certainly a looker (let’s face it, she was most unlikely to have ever been short of a date now, was she?) and, get this, she gets chosen as that CEO while 6 months pregnant!
THE Guardian newspaper has not a clue when it comes to economics. They claim the following:
How much is a fair price for a pint of milk? The answer is: whatever price allows everyone in the supply chain – farmer, dairy, supermarket – to turn an honest profit.
Dear God, that’s just insane.
IN Australia, taxpayers pay for producing carbon. In the UK, plans are afoot for a unilateral carbon tax. Only, plants love the stuff. In fact, plants are lapping it up, reversing any effect of global warming:
The earth would have warmed faster in the last two decades had there not been an unexplained rise in the amount of carbon dioxide being absorbed on land, scientists believe.
Scientists have discovered an “abrupt increase’’ since 1988 in the uptake of carbon dioxide (CO2) by the land biosphere, which comprises all of the planet’s plant and animal ecosystems.
Wellington-based scientist Dr Sara Mikaloff-Fletcher, from the National Institute of Water and Atmospheric Research, was part of the global research team investigating the distribution of CO2 emissions.
Ms Mikaloff-Fletcher said … “We were completely taken by surprise (by the findings). It’s opened up a whole new series of questions.’’
WELL, according to the Icelandic courts we can all donate to Wikileaks again. For they’ve insisted that Visa Iceland must process the payments:
WikiLeaks could be seeing an influx of funds after an Icelandic court ruled that Valitor, the local agent for Visa, broke the law when it stopped taking donations for the website.
The court found that Valitor had broken contract laws when it stopped accepting payments sent to WikiLeaks by Visa customers in July 2011. WikiLeaks estimates that move cut its funding by 95 per cent and cost it around $20m in lost donations, leaving it chronically short of cash.
YOU’LL have heard of this no chips but McDonald’s chips at the Olympic sites, yes? Because Mickey D’s is the official fast food sponsor of the Games. If people are going to be fed chip butties then they’re going to be from Mickey D’s.
One particular site is complaining in a slightly more sophisticated manner:
Companies like McDonald’s do sponsorship deals all the time. They’re very good at negotiating them. But this isn’t just any old sponsorship deal. It’s a massively important public event, in which it’s a privilege – for spectators, athletes and sponsors – to participate. Every potential sponsor should have been made very strongly aware of that from the outset.
In other words, if LOCOG had been stronger negotiators – if they had been more confident in what they had to offer to sponsors – the Olympics, for God’s sake – then the balance of power would be more even and we would be reading fewer of these depressing stories.
ONE could take this as a storm in a teacup or one could take it as the destruction of a great iconic brand. But Apple’s computer kit is now officially not green. In fact it’s now so not green that it’s probably illegal for any part of the UK government to buy it:
The city authorities of San Francisco have banned departmental purchases of Apple hardware after Cupertino dropped out of the Electronic Product Environmental Assessment Tool (EPEAT) green-standards scheme.
“We are disappointed that Apple chose to withdraw from EPEAT,” Melanie Nutter, director of San Francisco’s Department of Environment, told The Wall Street Journal, “and we hope that the city saying it will not buy Apple products will make Apple reconsider its participation.”
I’LL admit to being a little confused about this campaign:
Angry bank customers have been voting with their wallets and bombarding co-ops, building societies and credit unions with applications for current accounts over the past week, after the NatWest computer meltdown and the Barclays rate-rigging scandal.
Data compiled by the campaign group Move Your Money UK shows an explosion in requests to switch from large high street banks to smaller alternatives that consumers hope will take a more ethical approach. Charity Bank, which lends its savers’ money to charities, has seen a 200% increase in depositors; the Ecology Bank has had a 266% jump in applications; and Triodos, a Bristol-based “sustainable bank”, a 51% increase.
ECONOMICS is packed full of myths: not the subject itself, but what people think they understand about it. The Economist has a look at a couple:
A LETTER-WRITER and a commenter have kindly pointed out that vibrant markets exist for the pollination services of bees. This is contrary to the claim in last week’s Free Exchange column on inclusive wealth. It also spoils a nice allegory used by Sir James Meade in 1952 to illustrate external economies.
I feel suitably disabused. Next you’ll be telling me that private enterprise can provide profitable lighthouses, that used-car buyers often know as much as sellers, that the Dvorak keyboard is no faster than QWERTY and that Betamax was no better than VHS. Oh.
SO. We had Ireland go bust when they made the single most stupid decision of the last decade: to guarantee all the debts of all of their banks. Those debts having been caused by too low an interest rate for the economy, that single interest rate that a single currency necessarily causes, as a result of being in the euro.
Portugal went bust and needed a bailout simply because the single interest rate made it too easy for the government to borrow oodles of cash to blow.
It’s no mystery why Europe is short of work. Save on its northern rim, Europe 30 years ago began exporting manufacturing jobs to other parts of the world
I do worry about the old Alma Mater at times you know. This is one of the senior professors at the place I did my economics degree. And it is difficult to be more wrong than this and still have the intellect to walk and fart at the same time.
THE last couple of years have been something of a sad sight: we keep seeing the EU stumbling from one attempt at correcting the euro mess to another without ever quite reaching the point where they’ve solved it. This is essentially because there are only three solutions: break up, inflation or fiscal union (also known as Germany paying for Spain, Italy, Portugal and Greece). None of those options appeals to enough people to be enacted.
WITH the style and grace of a petulant Italian footballer, the quitting Chief Executive of Barclays Bank, Bob Diamond is going all out to bang it into the back of the Bank of England’s net today, according to the Guardian.
There are many other targets in Diamonds sights.
The Guardian says Diamond, who yesterday resigned from Barclays one time sponsors of the UK soccer Premier League, was expected to fight tooth and nail for his reputation when he today appears before a powerful committee of MPs.
BOB Diamond’s daughter is called Nell Diamond. She is one letter off being a tribute act to Neil Diamond. Nell’s in the news because her dad has resigned his job as head scapegoat at Barclay’s, and she told George Osborne and Ed Miliband to “go ahead and #HMD”.
HMD, we learn, is an abbreviation for Hold My Dick.
However, there’s a lot more to come out about this LIBOR rigging scandal than most seem to realise at the moment. For example, we’ve got Ed Balls running around the place insisting that there must be a full, judge led, inquiry into what really happened. Ed Milipede seems to be shouting for the same thing.
I FIND this very difficult to understand. Paul Mason is the economics editor for Newsnight at the BBC. And yet he appears to know very little about the subject of economics. I’ve not lived in Britain for decades so I’m not really sure whether this is normal for the BBC or not. He tells us that this generation is going to be poorer than the last one:
This generation of young, educated people is unique – at least in the post-1945 period: a cohort who can expect to grow up poorer than their parents.
Either he’s got some very secret information about what future economic growth is going to be like or he’s spouting nonsense.
WHO wins on the US economy? Richard J. Carroll analyses the US Presidents since Harry S. Truman:
Five out of six Democrats reduced the national debt as a percentage of GDP, while four out of six Republicans raised it. The story is similar on budget deficits, with five of the top six performances recorded by Democrats and four of the bottom five recorded by Republicans. With respect to GDP growth, three of the top four performers were Democrats and four of the bottom five were Republicans. In reducing the poverty rate, the top three were Democrats and two of the bottom three were Republicans. The Democrats also had a better record on employment. Republicans had better records on reducing inflation, achieving four of the top five performances, while Democrats had four of the bottom five showings. Republicans also did well in lowering tax revenue as a percentage of GDP, claiming the top five spots.
BARCLAYS banks greed and bad practice is Labour’s fault. This was always fairly obvious but now someone has come out and said it:
Lord Tunnicliffe, Labour’s deputy chief whip, accepted that his party was responsible for gaps in the law left by the financial regulation regime introduced under Gordon Brown.
His remarks undermined the demands of Ed Miliband, his party’s leader, for a criminal investigation into alleged wrongdoing at Barclays and other banks. During a House of Lords debate on the scandal, Lord Tunnicliffe, speaking for the Opposition, said: “Criminal sanctions are extraordinarily difficult to bring about because of the burden of criminal law.
“It is fair to say though that you can’t find them in the current legislation. And, yes, OK, it’s our fault.” He added quickly: “I hope my leaders don’t hear me say that.”
That what was going on was not illegal is indeed the fault of those who wrote the laws which governed the City. That it was going on without the regulators finding out or doing anything if they did is also obviously the fault of those who wrote the regulations and hired the regulators.
Just as background, Libor is the rate at which banks lend to each other. It’s also the rate at which huge numbers of financial contracts are set by. Libor plus 3% wouldn’t be unusual for a commercial loan for example. So, if Libor is wrong then the interest rates on those tens of trillions (maybe hundreds of trillions) of other contracts are also wrong.
And we know that Barclay’s tried to manipulate that Libor price. Sometimes in order to try and make money on those tens (or hunreds) of trillions of contracts and sometimes just to make the bank itself look less risky in the Crash.
I KNOW, I know, it’s not quite what you would think is a sensible idea four years after the Great Financial Crash. But video games companies are starting to hire economists to help them design the games.
Here’s one such job ad. They really are looking for an academic economist to help them work out how to write the rules for the games.
This isn’t though to do with Angry Birds and the like. This is about the big online games where there are thousands, perhaps millions, of players. Certain of the games companies have got seriously out of their depth here. Once you start introducing money into the games, the ability to find gold, use that gold to buy powers or attributes, even feed real money in to buy gold, then you’re facing all of the same problems that central banks do in the real economy.
THERE are several stories around today that Rupert Murdoch is warming to the idea of splitting up News Corporation. This isn’t a new thing at all: it’s that Rupe is warming to it that is:
Rupert Murdoch’s News Corp could be split into two companies, separating its publishing assets from its entertainment arm, it has been claimed.
Sources say a final decision on the New York-based firm had yet to be made, but that Murdoch was warming to the idea.
The real point behind this is that newspapers (and to some extent book publishing) are a dying business. Films, TV and satellite however are vigorously growing ones. There’s no real reason why the two should be inside the same company. And good reasons why they should not. Quite apart from anything else, sweating out the last profits from a dying business is a very different thing from making the needed investments to enable a growing one to continue growing.
YES, isn’t it a quite lovely fuck up at RBS/NatWest at the moment? The entire computing systems messed up as a result of someone trying to improve them. The answer is, of course, that we should increase the bonuses paid within the bank.
Not to the people who currently work there, of course. Rather, to the people who are going to come in and take over from those incompetents:
It also occurs to me that the best way for RBS to prevent a reoccurrence of this is to pay Good Money to find and recruit a small number of really good engineers from Google, Amazon, Microsoft etc. (all famed for their uptime and reliability – yes, even Microsoft) and give them free rein to fix software, processes and people. Give them a large, meaty bonus conditional on measurable reliability improvements and comprising a significant proportion of RBS shares. Perhaps this is one case where public and FSA wouldn’t object to large “banker bonuses”.
Amazingly, this useful information comes from Microsoft: something of a first from that organisation:
“An email with tales of fabulous amounts of money and West African corruption will strike all but the most gullible as bizarre,” he writes. “It will be recognized and ignored by anyone who has been using the Internet long enough to have seen it several times. It will be ﬁgured out by anyone savvy enough to use a search engine [and] won’t be pursued by anyone who consults sensible family or ﬁends [that’s Microsoft’s typo], or who reads any of the advice banks and money transfer agencies make available.
“Those who remain are the scammers ideal targets,” the paper proclaims, as “A less outlandish wording that did not mention Nigeria would almost certainly gather more total responses and more viable responses, but would yield lower overall proﬁt.”
The basic argument is this: in order to be able to scam people out of their money you need to be able to find the stupid and gullible people.