Wednesday 31 December 2014

"Lorraine Pascale to become foster ambassador"



From the BBC:

TV chef Lorraine Pascale is to become the government's first fostering ambassador.

Pascale, who was fostered herself as a young child, has spoken about her background on a number of occasions. She has also campaigned for more support for foster children and their families.


1. I didn't know she was fostered. I shall add her to my mental list of 'famous/succesful people who were fostered/adopted' along with Paul Myners, Michael Gove and Jon Gaunt.

2. Fostering is a good example of not-joined-up government. Foster parents are given a certain (modest) sum of money each week for each child. Whether this is supposed to be a kind of salary (probably well below the National Minimum Wage) or merely a contribution towards the costs of looking after the children, I do not know.

But this income is taxable, so foster parents are supposed to declare what they've been paid as income and can deduct certain expenses (see HMRC guidance) to arrive at their taxable income. The resulting tax liabilities are usually a few hundred quid.

FFS. By all means, send somebody round to make sure that they are looking after the foster children properly, which includes spending a reasonable amount of money on them, but why claw back twenty or thirty per cent if they are not spending "enough"? Why not adjust the fostering payment to the net-of-tax amount and make it tax free, just like Child Benefit?

Tuesday 30 December 2014

Well, no, not really

From the Telegraph:

Although he did not name names, comedies like ‘Love Thy Neighbour’, ‘It Ain’t Half Hot Mum’ and ‘Mind Your Language’ have all been criticised in recent years for their racial stereotyping.

In ‘Mind Your Language’ which ran from 1977 to 1986, Germans were represented as dour and humourless; the French as sexy and flirtatious and the Chinese as communist agitators.

'Love Thy Neighbour' saw a black man referred to as ‘nig-nog’ and ‘Sambo’ while 'It Ain’t Half Hot Mum' regularly made jokes about the cultural differences between the Indians, Burmese and Japanese.


The thing about Love Thy Neighbour was that the bigoted while character, Eddie, generally got outsmarted by the black character, Bill.

And we racially stereotype all the time. Lots of romantic movies set in Paris and Venice. Munich and Berlin? Not so much.

"Clegg urges voters to ignore pre-election mud-slinging"

This headline was crying out for a re-write, but then I read the article and decided it was not necessary:

Nick Clegg has warned "a lot of mud" will be thrown in the run-up to May's election and said the Lib Dems will stand up for "optimism, not division" in the face of attacks from rivals.

In his New Year message, the deputy prime minister said his party deserved credit for "stepping up to the plate" in 2010 to form a stable government. Labour, he said, was still "in denial" about its economic legacy. And the Conservatives, he claimed, had "swerved off to the right".


So, not mud-slinging then?

Xmas/New Year transport and travel trouble

There are usually more disasters and major foul-ups over this period, but this year has been unusually bad:

Glasgow bin lorry crash: Tributes to the victims

King's Cross reopens after day of travel chaos

AirAsia QZ8501: Indonesia plane 'at bottom of sea'

Italy ferry fire: Evacuation hampered by winds

Virgin Atlantic VS43 lands at Gatwick Airport after undercarriage failure

Any more I've missed?

As to why this happens, I do not know. Either more people are travelling on different routes; too many staff have bunked off on holiday; the weather is worse..? None of which explains the AirAsia thing, as down there the weather is the same all year round and people pretty much ignore Xmas.

Monday 29 December 2014

Is it ice yet? No, it's...

Fun Online Polls: Where Santa Claus lives & Xmas holidays

The results to last week's Fun Online Poll were as follows:

Where does Santa Claus live?

He's retired to Florida. Amazon do all his deliveries nowadays - 49%
North Pole - 23%
Lap's retired to Florida. Amazon do all his deliveries nowadays - 49%
Other, please specify - 14%


Ho hum, I tend to disagree. The only evidence we have for Florida is a cheesy TV film sequel starring Steve Guttenberg. Most Xmas films assume he lives at the North Pole but this is surely nonsense, that area is constantly being spied on by satellites and criss-crossed by explorers/'climate researchers'. It's fairly thin ice, so he would be restricted to very light buildings and cannot hide under the surface.

Which leaves Lapland as the least unlikely place, it being a suitably large and vaguely defined area of northern Scandinavia, sparsely populated with fairly good tree coverage and fur coats and reindeers aplenty.

Please note: pointing out that Santa Claus is a mythical/fictitious character is missing the point.
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This week's moderately topical Fun Online Poll: on which days will you be at work over Xmas and New Year?

Vote here or use the widget in the sidebar.

Pinot Noir and Global Warming

There's a lot of talk in the press from various angles about the problems of pinot noir and global warming, both in the Telegraph and in Slate. What's curious is that both articles have appeared at almost the same time, yet both discuss different areas of the world and even have different experts cited. Coincidence, or some sort of co-ordinated global coverage?

The Slate article talks about the California drought that is getting people to stop growing pinot noir, and talking about how winemakers are moving to Oregon to grow more pinot noir, but the California drought has differing opinions about whether climate change is involved (and the same level of drought hasn't hit other southern states). Furthermore, the rise of planting pinot noir in Oregon isn't because of climate change elsewhere, it's because there's been a massive growing demand for pinot noir wines that has forced prices up to the point that it's worth growing in Oregon.

The Telegraph article has a professor of sustainability talking about how grapes are maturing earlier, and losing colour. But if you read the views of the people at Domaine Meo-Camuzet, a top quality Burgundy producer they say the following in 2006:-

The main explanation for the very early arrival of our grape harvests over the last 15 years (rarely beginning or taking place in October) may be attributed to changes in farming practices. With the possible exceptions of 1997 (small crop, ideal harvesting weather, little sorting) and 2003 (for obvious reasons), none of the recent vintages would have had the same character or even the same quality if these practices had been the same as 30 years ago. In those days, as indeed throughout history, nature was left to its own devices. If she bequeathed you an excessive crop which, once gathered in, had a titre of no more than 10°, then that was in the “nature” of things!

So, farming practises changed which meant grapes matured more quickly. Not climate change.

And regarding the scientist who says that we'll be growing raisins by 2080, that is pure bollocks. Not even the IPCC are predicting a rise of 7-8 degrees that would take us into raisin temperature. Their worst case is that we have temperatures like Bordeaux by 2100.

Sunday 28 December 2014

Homie Homies

From the Telegraph

The residential property market is surging, up more than 10 per cent in the last year, as people are priced out of other Los Angeles neighbourhoods. Properties are being snapped up by investors and professional house flippers have started targeting the area. Compton's first home with a price tag of $1 million recently went on the market.

Key to attracting companies and families is Compton's geographical location close to LAX airport, Long Beach port which is the second busiest container port in the US, and near office buildings in downtown Los Angeles.

Mrs Brown said: "In California they're not making any more land. And with the high cost of land, from a business standpoint, being able to move your goods quickly and cheaply makes Compton an attractive place to be."

"And traffic is so horrible here in Los Angeles, and getting worse, that if you want to have a quality of life not on the freeway, you may want to live nearer where you work. I think people are getting to grips with that. I think Compton is a really attractive place for young families."

That's one smart 32-year old mayor. Understands how land values work, and that all that's depressing them in Compton at the moment is the dealers and the violence. So, she's got the gangs together an stopped them fighting which has made it a nicer place to live (and raised land prices).

Give it a few more years and California will probably legalise cannabis, at which point, the dealers will largely disappear and it'll be a pretty pricey place to live.

The Laffer Curve, again.

Interesting linguistic point first, to lighten the mood: no European language has a proper word for "tax", because the concept of having to hand over X per cent of your earnings or output or wealth to the government every year is a relatively new and unnatural one. So each language just uses a word at random.

For example:
English "tax" actually means estimate and "duty" means what it means,
German "Steuer" is not actually derived from their word for steer (as in steering wheel), it is derived from an old word for support or prop,
French "impôt" and Italian "imposta" mean imposition,
Dutch "belasting" means burden,
Danish "skat" and Norwegian "skatt" mean treasure.
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Right, down to business. The Scottish government can now, in theory, set its own income tax rates, i.e. abolish it by setting a rate of zero. Somebody who's campaigning for LVT in Scotland (to replace income tax) asked me whether I knew of any official or semi-official estimates of the deadweight cost of taxes.

He himself got a curt reply from HM Treasury years ago saying they thought is was about 30p for ever £1 (thirty per cent) of the amount raised in tax. To my mind, this is good start. The overall average marginal tax rate on income and output (taking income tax, National Insurance, VAT, corporation tax and working tax credit withdrawal into account) is around fifty per cent. Thirty per cent of fifty per cent is fifteen per cent, so that's the bare minimum amount by which the size of the economy is depressed (chances are it is much higher, especially if you factor in faster future growth). So if Scotland were to scrap income tax, that would reduce the overall average rate to about 35%.

The only official Treasury nod towards the existence of deadweight costs and the Laffer Curve was a couple of years ago, which I posted about at the time. The point being that the Laffer Curve looks specifically at tax revenues, but the fact there is a curve tells us that the economy is more depressed the higher tax rates are; obviously, with a 100% tax rate, revenues are nil and the size of the economy is zero.

We can turn their calculations into a chart and then work backwards. I shall assume that they are not completely stupid and that 50% is indeed the revenue maximising tax rate:


You can work out implied GDP by multiplying up tax rate by yield. Not all of the fall in implied GDP is down to the economy contracting, say HM Treasury, 60% of the apparent fall is down to evasion and tax planning and 40% is down to the economy contracting.

So at a tax rate of 50%, tax revenues are £31 and implied GDP is £62. At a tax rate of 35% (the lowest which Scotland can have), tax revenues are £28 and implied GDP is £80. The actual increase in GDP is not from £62 to £80 though, (a 30% increase) it is 'only' 40% of that i.e. 12%.

So there's your answer: if Scotland got rid of income tax, its economy would grow by twelve per cent. That's a significant amount. If it collects as much in (new) LVT as it would have done in (old) income tax, its citizens still end up 8% better off (35% of that 12% is lost in VAT and NIC).

Saturday 27 December 2014

The Queen's Speech: The Christmas Truce

The Queen's Speech this year managed to plumb new depths of hypocrisy:


She was waffling on about 'reconciliation' and highlighted the Christmas Truce on the Western Front in 2014.

Well, hang about here. It was her extended family which started this war in the first place, the land-owning aristocracy in Germany, Russia and the UK all pitted their minions against each other (to distract them from radical ideas like Land Value Tax or Socialism). As it happens, the Russian aristocracy came off worst, being largely killed and/or dispossessed in the aftermath.

The German Junkers didn't do so badly, their Kaiser abdicated and the country became a republic, but apart from some Prussian landowners in the east whose land was transferred to Poland, the system of landownership remained largely intact (and exacerbated the effects of the Great Depression etc). British landowners got off more or less Scot free, although to be fair, they were the least-worst of the three groups.

The Christmas Truce itself was outright mutiny against the ruling classes, the poor sods in the trenches just said "we've had enough" and it didn't last long, the powers-that-be soon saw to that. The Queen's direct ancestors had plenty of mutinous minions pulled out of the front line and shot, no doubt the Germans and Russians did the same.

Friday 26 December 2014

Well yes, apart from...

DC emailed me a link to an article about Luxembourg. Somebody had leaked/published details of tax deals arranged between PriceWaterhouse Coopers and Luxembourg. Instead of doing something about the tax evaders, Luxembourg charged the whistlebower with theft and other criminal offences.

The countries who think they've lost out are all complaining like mad and demanding that Luxembourg stops this nonsense, but the best part is right at the end of the article:

Luxembourg’s finance minister, Pierre Gramegna, struck a conciliatory note on the international stage, telling a meeting of European finance ministers: “We are a country that wants to combat abuse … If we want to find solutions to this issue we have to tackle it together.”

Speaking to a domestic audience, however, he has described the affair as “the worst attack Luxembourg has experienced in its history”.


Reminds me a bit of the famous George W Bush quote from 2002:

My trip to Asia begins here in Japan for an important reason. It begins here because for a century and a half now, America and Japan have formed one of the great and enduring alliances of modern times. From that alliance has come an era of peace in the Pacific.

Wednesday 24 December 2014

"Simplicate and Add Lightness"

My simple Pro-LVT rationale.

1. The Factors of Production are Land, Labour and Capital.
2. Land is a Monopoly
3. Labour and Capital create wealth.
4. Wealth creation is 'Profit'
5. Taxes can only be raised from the Profits of Private Business.
6. 'All profits return to rents'
7. Rents and Taxes are therefore synonymous
8. Hence, It is self evidently better to tax Rents, not Profits (aka Wealth Creation).

Discuss.

Update: (Following useful comment by Ben Jamin)

1. The Factors of Production are Land, Labour and Capital.
2. Land is a Gift of Nature and a Monopoly
3. Labour and Capital combine to create wealth through Exchanges..
4. Wealth creation is otherwise known as 'Profit'.
5. 'All profits return to rents',  That is Rents can only be collected from the Profits of Private Business and will be maximised and vary with location.
6. Taxes can only be collected from the Profits of Private Business.
7. Rents and Taxes are therefore both charges on wealth creation and therefore synonymous
8. Hence, It is self evidently better to tax (Private) Rents, not Profits (aka Wealth Creation).

Any more for any more?

Update 2 (27/12/2014  22.47)

Thanks for all your inputs.  I will work on them.

What I am trying to do is to evolve a short layman's language and logical rationale for LVT that can be made quickly.  An 'elevator pitch' for LVT if you like.  LVT - despite what we may think - needs 'selling' (a thing I am quite good at), and getting your presentation pat is crucial.  BTW, you can't sell crap ideas or products for very long. You soon get found out.  And the secret to successful selling is repeat business and recommendations from customer to customer.

Christmas jumpers? Pah!

I have had this delightful ribbon-and-bell arrangement attached to my lapel for the past three weeks:

Tuesday 23 December 2014

Public v private

There is an insane belief fostered e.g. by the Tory Party that the private sector always does everything better than the public sector. The Labour Party says the exact opposite.

Please note, in this post I'm using the word 'government' in a vague sort of sense, you could also say 'the state' or 'the taxpayer' or 'collectively', it's all the same principle.

As per usual, they are both wrong what we end up with is the worst of all worlds:

- The government doing stuff it should not be doing and/or not doing stuff it should be doing,

- Even worse, the government sub-contracts stuff to the private sector at a higher cost than it could have done it itself,

You can mix and match these failings and double up the problems:

- the government flogs off borderline state-owned assets (viable in public or private sector) like the post office or social housing at a massive discount,

- the government decides that something unnecessary must be done… and then outsourcing it at an even bigger expense,

- the government fails to provide a public good allowing a lucky corporation to collect the 'rent', see.g. payday lenders.

- We can safely assume, that if there is real private demand for something, somebody will do it, so there is no need to delineate or define what the private sector should be doing. You can have some rules saying how they are allowed to do things, that's a separate issue.

One area where most countries have got it right, and which serves as a good illustration is road traffic.

The government decides where the major roads are going to go, pays for them to be built and maintains them. The government then covers the cost many times over by collecting part of the use value in taxes on motoring (mainly fuel duty and VAT).

The private sector then builds the vehicles and everybody uses the roads for whatever they see fit: haulage, passenger transport, business, commuting or leisure.

That's it. Just think about it.

We've tried nationalising the car industry and it was an epic fail. That's easy.

And if anybody seriously thinks that without government intervention we'd have any sort of road network worth speaking of is clearly living in la-la land:

- Without compulsory purchase orders, not a single road of note would ever have been built. (The same applies to the railway network, even if a lot of it was initially privately financed). As a result, there'd be less incentive to buy a car or vehicle if there's nowhere to drive to.

- "Ah yes," cry the Faux Libertarians, "But what about the M6 toll road? That's private!" For sure it is, but that is a little 27 mile snippet that is plugged into the whole national road system. If the government shut off road access to it at one end, it's value to the motorist would be precisely zero.

Monday 22 December 2014

If True....

Scotland

Hmmm. I am not all sure I fancy that. Perhaps I now know how the Scots feel?

Sunday 21 December 2014

Film reviews: Nativity 2 and Nativity 3.

The first Nativity! film is a very pleasant, middle of the road English film, worth watching. Does have one classic line in it.

I agreed with my kids that we would watch Nativity 2 on DVD first and then go and watch Nativity 3 the next day, which we did.
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Nativity 2 is miles better than the original, it is a proper film. There are various equally important strands to the plot.

1. Like all good Xmas films, there are "journeys", be that a literal journey; an emotional journey or the characters overcoming a series of obstacles to achieve their goal. For example, Schwarzenegger trying to get hold of a Turbo Man, Kevin fighting off burglars or Kevin's mum/family making a nigh impossible journey to be reunited with Kevin. See also Planes, Trains & Autombiles (for Thanksgiving read Xmas). And there has to be a happy yet tear-jerking ending.

2. Nativity 2 does all of those and more:

- The bromance between the strait laced new teacher Mr Peterson and Mr Poppy, the anarchic classroom assistant.

- Mr Peterson is happily married and his wife is expecting a baby, so she gets a bit upset when he goes missing (having been effectively kidnapped, robbed and his mobile 'phone destroyed).

- The bitter rivalry between Mr Peterson and his far more successful twin brother (which leads to the inevitable confusion comedy);

- Mr Peterson's openly disapproving father who calls him a disappointment to the family, to the embarrassment of the long suffering Mrs Peterson.

- The rivalry between the posh school and Mr Poppy's state school (continued from first film)

- Mr Poppy has the insane idea of his class/school taking part in a Xmas song competition in Wales, so there is an epic road trip. Without any parental consent, they set off in a (probably stolen) amphibious bus; kidnap Mr Peterson, a baby to use as a stage prop and later on a girl from the rival school; motor across a lake to escape somebody or other; run out of fuel just before they reach the opposite shore; steal a donkey; steal two boats; hide in a cave; climb a high mountain and then abseil down a cliff on the other side; finally being rescued by a helicopter, although they arrive minutes too late to take part in the competition.

3. Somehow, all these strands are all resolved nicely: Mr Peterson calls a truce with the teacher from the posh school and they beat Mr Peterson's brother's entry in the competition although the posh school the prize; Mrs Peterson finds her husband and then gives birth (to twins) in a stable with the donkey in attendance; as a result of which Mr Peterson's dad is so proud that he reconciles with his son; Mr Peterson tells his twin brother that Mr Poppy has been more of a brother in the space of one day than his twin ever will be etc.

4. Plus there are loads of really funny lines. The best bit is actually when they are lost in the forest and Mr Peterson snaps out of it and starts shouting at Mr Poppy that he is an complete maniac who is endangering the lives of all the children they are schlepping around, and that they are in breach of just about very school rule that exists. He is being deadly serious, it is not actually funny at all. Mr Poppy then gets a mobile phone out of his impossibly deep rucksack and Mr Peterson screams at him "You've got a bloody 'phone! Why didn't you tell me you had a bloody 'phone?" (or words to that effect).

Ten out of ten out of ten. Bonus points for the deliberately awful Xmas songs performed in the competition and the cynical collusion between a corrupt judge and Mr Peterson's twin brother, "It's got to have a little boy with glasses singing a solo about how lonely he is, that's what the public wants."
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And lo, duly enthused, we went to see Nativity 3. There are plenty of funny lines in the first half, but the entire plot is totally implausible crap and contrived plot devices (the new teacher loses his memory, yawn) and the second half is absolutely awful, making no sense whatsoever and being interrupted with an entirely unrehearsed yet polished song-and-dance routine every five minutes. When the new teacher finally reconciles with his fiancée and they get married, you really don't give a shit either way.

Just saying'.

Saturday 20 December 2014

The spirit of the Metropolitan Railway lives on, or does it?

This looks like an example of a railway company trying to capture the uplift in capital values caused by the building (or in this case a reopening) of a railway line. But is it? The promise of a station at Leekbrook and a rail service into Stoke will certainly raise the value of the houses to be built at Leekbrook, but what is to prevent Moorland and City Railway from pocketing that extra cash and not rebuilding the line? It certainly wouldn't be the first time that "enabling development" went ahead without there subsequently being any "enabling" at all.

For the usual NIMBY fun, check out here.

Revealed: Hotels People Want to Stay In Charge More

From the Guardian

More than half the luxury hotels in the Caribbean have been accused of “excluding families from poorer backgrounds” after a Guardian study found that a few of them are charging as much as £4000 for a week, with Mustique's most expensive package coming in at £8000.

With the average price of a flight for a child at peak time costing £300, according to the study, parents faced with forking out for holidays over the summer period are having to count the increasing cost of going to the Caribbean.

Eleven hotels, most of whom have been highly rated by Johansens in the past 10 years, charged a premium at peak times. Turks and Caicos and Anguilla both charge £3000 plus VAT for their packages while St John’s prices range from £6000-8000 depending on the season.

The Interview

From the BBC

President Barack Obama has vowed a US response after North Korea's alleged cyber-attack on Sony Pictures.

The US leader also said the studio "made a mistake" in cancelling the Christmas release of The Interview, a satire depicting the assassination of North Korean leader Kim Jong-un.

...

Earlier on Friday, the US Federal Bureau of Investigation officially tied North Korea to the cyber-attack, linking the country to malware used in the incident.

Hackers had earlier issued a warning referring to the 11 September 2001 terror attacks, saying "the world will be full of fear" if the film was screened.

THIS WILL BE A LONG POST. YOU HAVE BEEN WARNED

Timeline
Let's try and get this story straight, going right back to the beginning. In fact, just before the beginning on 21st November, when an email was sent to various Sony executives demanding money. Nothing about North Korea, nothing about The Interview. Just money.

3 days later on the 24th November, across Sony screens, a message appears telling whoever is reading that "We've already warned you". Along with this, a number of files were released around the internet, mostly via bittorrent containing movies.

By the 28th, a new theory had arisen with "unknown sources" that this was the work of North Korea as one of the movies involved was The Interview, a comedy about two celebrity reporters who get an interview with Kim Jong-Un, but before they do, the CIA tries to rope them in for an assassination.

Various shocking revelations were leaked - film stars have egos, black actors bring in smaller audiences than white ones, actresses earn less than actors.

On the 16th December, a hacker group then release more files from Sony's servers, along with a threat regarding The Interview suggesting 9/11 level violence near cinemas showing it.

On 17th December, the majority of cinema chains pulled the film. At this point, Sony figured it was best to cancel the premiere and withdraw the film.

On the 19th December, the FBI announce that North Korea is responsible for the actions.

Analysing Motives
It may be that this is an attack by North Korea on Sony. But if it is, why did they start off talking about money? Yes, North Korea went to the UN to complain about The Interview back in May, but North Korea always go to the UN to complain about this sort of thing. They got pissed off about Team America: World Police, but did nothing about it.

There are various links being made in various places, such as the FBI referring to tools used in an attack on South Korean banks, which they declare as being caused by the North Koreans, despite that only being a suspicion because it was routed via Chinese IP addresses. The problem with things like routing is that if you can create an infected machine in China, the attack could have come from almost anywhere.

The focus on North Korea began after the media made it so. It's a better story to be talking about international cyber terrorism than to be talking about cyber blackmail. The media started the stoking, the hacker group then delivered on the threat.

The story was then that the theaters dropped the film. There was some puzzlement by authorities such as the Department of Homeland Security because there was "no credible threat". So, why did cinema chains cancel the film? Well, some people are going to get nervous anyway. And in a multiplex, they won't just get nervous if they're going to see The Interview, but also if they're going to see The Hunger Games: Catching Fire and the Interview is playing at the same multiplex. Bear in mind, this is not expected to be a huge film, and has some pretty lousy reviews. Are those multiplex companies going to risk losing Hunger Games and Hobbit money for the sake of a low income film.

Sony then cancelled the film. You don't want to run a huge marketing campaign for a few small theaters. They might even be thinking that they could release it another time, so let it all blow over.

The FBI then wanted in on it, writing an email about how they were certain it was North Korea, even though their links are very tenuous, and using that email to promote how they could help businesses, like an advertorial for their services.

Finally, Obama did his "standing up for rights" speech, blaming Sony for being chickens, promising to take action, but being completely non-specific about what he would do.

The whole thing is lies built on lies. In my opinion, it's a simple blackmail and shakedown job.

Friday 19 December 2014

Life copies satire

From The Onion, October 1998:

Morbidly obese man enjoys disabled privileges with motorized cart

Sixteen years later, from The Daily Mail, December 2014:

Obesity IS a disability, rules highest EU court after 25st Danish childminder was 'sacked for being too fat to perform his job properly'

Fun Online Polls: Oil price and Xmas quiz

The responses to last fortnight's Fun Online Poll were as follows:

How low will the price of a barrel of oil fall over the next year?

$70 - 16%
$60 - 31%
$50 - 23%
$40 - 22%
$30 - 4%
$20 - 4%


To put it in context, the oil price was just over $70 when I started the poll on 1 December and as of now is just under $60. Early voters probably guessed higher prices than later voters, but I didn't track it.

We'll see.
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I have watched a few formulaic Xmas-themed films on the telly over the past few weeks, and there appears to be no agreement on where Santa Claus lives.

Some films say he lives at the North Pole and others that he lives in Lapland. One film even said he'd retired to Florida.

I don't think it's the North Pole because they'd have spotted his workshop with satellites long before now, and he certainly can't hide anything underground. Lapland seems much more practical to me as a hiding place and reindeer are two a penny up there.

So that's this week's Fun Online Poll.

Vote here or use the widget in the sidebar.

Thursday 18 December 2014

Forget Cuba, it flushed itself down the toilet three years ago.

Further to Stigler's post of earlier, from The Daily Mail, March 2012:

The purchasing and selling of private property was legalised by President Raul Castro in Cuba last November in a bid to keep the struggling Communist state afloat.

Only citizens and permanent residents are allowed to buy properties in the Communist country but many Cuban exiles in America are entering the property markets through friends and family on the island - bumping up property prices.

Now many homes in Havana are being sold at $250 per square metre - 12 times the average monthly wage of $20...

The new property market will drastically alter everyday life on the island for its residents - with many being able to choose for the first time where they want to live.


Great, you can choose where you live, but will spend all your income forever paying for it.

And there's the usual fig leaf..

But the government has insisted no individuals will be able to accumulate great wealth through the law change as sales will be subject to taxes.

"Sales" will be subject to taxes, but not "ownership". As a result, land ownership will quickly become concentrated in relatively few hands (probably former senior government people) and without those taxes on land values, they'll raise taxes from wealth creation instead, rinse and repeat.

Fair play to Raul C for trying to liberalise the economy a bit; but the correct procedure would have been to do this (except about five times as fast, but not so fast as that US corporates pile in and take everything over), make private earnings tax free and to increase ground rents, which can go into the pot for paying for education and healthcare and stuff.

And if any emigres want "their" land back, they'd be welcome to it, provided they pay the land tax.

Cuba - some thoughts

just thinking aloud, not sure what of this makes sense...

  1. It seems for a while that Fidel's brother, Raul, is a lot less wedded to the idea of Communism, doesn't have the flag-burning attitude of his idiot brother, has perhaps realised the revolution was a disaster. There's been a lot of market reforms since he took over.
  2. They've relied on other countries for 50 years for support. First USSR, then Venezuela. Venezuela's going down the tube, so they're now considering other options.
  3. The people who came over from Cuba in the early 60s who hate the Castros are dying out and declining as a percentage of the Florida population. This means it's less likely to swing the state one way or another.
  4. The republicans will cry about not lifting the embargo. Give it a few years, they'll tone that down. There's an issue about land taken by Cuba from American companies. Estimated value today about £7bn. Chicken feed to sort out diplomatic relations and get trade going again. The US government could have a ceremony where the Cuban government hands over a cheque that goes to those people, and the US pays it back.
  5. Assuming diplomatic/commercial relations come back, the economy will be tourism, nickel mining, cigar production, agriculture. Islands don't suit heavy industry.
  6. Cuba has lots of coast. Big long island. Let the Americans build hotels on beaches and collect a load of LVT for the locals. Not sure how much beach there is, but even on unattractive bits of coast, people pay a premium for housing.

Boris, you spendthrift twat, here's how it should be done.

From snipelondon/scoop:

Just four regular commuters are now using the Emirates Air Line cable car between Greenwich Peninsula and the Royal Docks, down from 16 last autumn, new figures released to The Scoop reveal.

Only four Oyster card holders used mayor Boris Johnson’s £60m link more than five times in the week ending 19 October, triggering a regular users’ discount.


Now, what was Boris thinking when he commissioned this?

I can only assume he was thinking of the Wuppertal Schwebebahn, one of the greatest forms of public transport ever.

They wanted to link up a few towns in a steep-sided river valley, but by the turn of the 20th century, the only practical solution was to build a monorail directly over and along the river itself. Just for extra kicks, the carriages hang underneath the rail, not above it.

I've been on that, it is awesome, but of course, most people using it are normal commuters*, so for them it's no more exciting that taking an underground train is for people who take the underground every day. So you have to play it cool rather than jumping about excitedly and saying "OMG! We are in a train several yards above a river!"

* The added joy of this is that the Schwebebahn is known locally/colloquially as the "Pendelbahn". The German word "pendel" can mean two quite different things. I didn't dare ask whether "pendel" refers to the side-to-side rocking motion (like a pendumulm) or the fact that people use it for commuting i.e. going back and forth.

Wednesday 17 December 2014

More Mansion Tax Double Think

As reported in The Times this week by economics and property correspondent Kathryn Hopkins,

"Young professionals in London could experience large rises in their rent if a mansion tax is introduced next year, an estate agent has warned.

Knight Frank said that if landlords had to pay Labour’s proposed tax on properties worth more than £2 million, they would be highly likely to pass the extra cost on to tenants.

Any additional costs would make landlords’ investments less viable, Knight Frank said. The impact would be particularly marked when landlords were paying a mortgage on the property.

“There has not been any clarification as to whether the proposed mansion tax would be the responsibility of the landlord or the tenant, but our assumption is that it will be the landlord,” Tim Hyatt, from Knight Frank, said.


Hopkins faithfully regurgitated the above. But in the very next paragraph...

Meanwhile, Hamptons International has said that George Osborne’s changes to the stamp duty system will boost prices and transactions in the first half of next year in all but the most expensive areas of England and Wales.

Its analysis of home sales this year suggests that 72 per cent of buyers would have been better off under the new regime, it would have made no difference to 27 per cent and only 2 per cent would have been worse off.

The typical gain is equivalent to 1 per cent of the purchase price."


So, increases in property taxes (Mansion Tax) raise prices (rents)... but decreases in property taxes(SDLT) also raise prices (capitalised rent/selling prices).

Granted, economics isn't Kathryn's main subject, but surely she should at least try to highlight this obvious contradiction.

Rents are set at the upper limit of affordability (inelastic supply) not cash costs. Landlords are not a charity, they are already charging the highest amount their tenants can afford. The incidence of taxation on immovable property always therefore falls on the landowner.

So, it doesn't matter who is legally liable to pay property taxes. The landlord or tenant, the buyer or seller. The effect is always the same: the tax reduces the landowner's rental income or selling price. Her analysis of the effect of SDLT changes on selling prices is correct; the assumptions about the Mansion tax are 100% incorrect.

The most interesting bit in Russell Brand's TV programme about drugs.

In case you missed it, see reasonably fair write up in The Telegraph.

The revealing bit was when RB was in a cafe interviewing two women who were full-on Category B drug users i.e. whose lives had been ruined by drugs and/or whose lives were ruined so they turned to drugs. Chicken and egg.

The first merrily admitted to still regularly using drugs, despite having been in prison and put on some mandatory, then RB chatted to the other one.

You could see the first one in the background of the shot, smoking a cigarette... outside the cafe.

There's this weird thing with smokers, me included, we are so terribly law-abiding and subservient when it comes to the smoking ban. For example, cheerfully admitting, on public TV that you take drugs, despite being known to The Authorities, but popping outside when you want a fag.

Movie Violence

From The Telegraph

Children’s films are rife with murder and mayhem and can contain more violence than gory gangster shoot-em-ups like Pulp Fiction, researchers have found.

Although cartoons like Finding Nemo, Bambi or Frozen may seem like gentle tales where good triumphs over evil and adversity is overcome, they are, in fact, riddled with death and destruction and can leave youngsters traumatised.


I obviously missed the unedited versions where Nemo shoots a shark for saying "what" one more time, where Bambi's mother accidentally snorts heroin and has to be resuscitated by having an injection of adreneline and where Olaf in Frozen gets gang raped by a couple of rednecks before Sven appears wielding a Samurai sword and stabbing them before promising to call a couple of homeboys with blowtorches and pliers to "get medieval on yo ass"?.

FFS, the Grimms' Fairy Tales are early 19th century and include all sorts of violence - witches trying to eat children, witches getting killed etc. The original stories are more violent than Disney versions, and kids didn't end up traumatised by them.

More internecine bickering re town planning

DBC Reed has spoken, here:

"Well that's telling you, Frank Lloyd Wright and Fred Pooley: just have big densities in the middle than spread out as you go out a bit."

Why didn't they think of that?

One reason might be different methods of getting about. Some people might want to jump on one of those new-fangled train things and commute for the bearable 40 mins and live 20 miles out in the country. You could call the intervening space, I dunno, a green belt.


If small groups of houses are 20 miles apart, then that is what we would call "spread out" and that is exactly what I said.

The relevant question is, how "spread out" is "spread out" enough to give people the enjoyment/illusion of being surrounded by fields and woodland while keeping the real benefits (convenience, cost, environment) of being not too far from the city centre in terms of travel?

I know about this stuff, as I keep my eyes open, and the answer is "Having villages twenty miles apart is fucking ridiculous, of no benefit to anybody and of great harm to nearly everybody.

The combination which gives the highest overall benefit i.e. number of people multiplied by optimum greenery/travel balance is having a 'branches' layout for the whole town. At the outer ends of the branches, you can thin them out a bit, so that each suburb is surrounded with its own little mini-green belt, between a few hundred yards and a mile wide."


Many European cities are laid out like this, whether intentionally or otherwise and it just 'works'. The London commuter suburb I live in now is, coincidentally, exactly like this, it is nearly surrounded by (public) woodland or fields and even though this mini-green belt is in places only a hundred yards wide, it does the trick.

In an ideal world, even in the densely populated/built up inner-urban bits, you have public parks aka "green lungs". The principle is the same, it is a question of degree, with mini-green belts/very large parks in the very outer suburbs (see e.g. Roundhay Park in Leeds), and smaller public parks in the inner-urban areas (see e.g. Woodhouse Moor in Leeds).

The original post even has diagrams illustrating all this.

Weasel Words of the Week (2) - Mis-selling

Mis-selling


The Stigler reminded me of this one in a response to a previous WWotW.
This is probably my pet hate of all Weasel Words.  It is concrete evidence that The Powers That Be have been reading 'Nineteen Eighty-Four' and think it a manual, not a caution.  'Mis-selling' is Newspeak, pure and simple.

'Mis-selling' is in direct conflict with caveat emptor. In fact I consider it a deliberate attempt to destroy caveat emptor and personal responsibility.

It is impossible to 'mis-sell' anything.  Selling (and buying) are quite without coercion.  They are entirely voluntary acts of exchange between willing parties. 

The buyer buys, voluntarily, on his own cognisance, that what he is getting in exchange is what he wants. 


The seller sells at the maximum price he can, and quite rightly so.
And, quite rightly, there are Laws about merchantable quality. ( http://en.wikipedia.org/wiki/Sale_of_Goods_Act_1979  for a good read and lots of links) and a 'confidence trick' is a crime.
Anyway, if you have 'mis-selling' you must also have 'mis-buying' which is clearly nonsense.


But of course, in a world where TPTB use Behavioural Economics to justify endless interventions, 'mis-selling' might make sense.  But if that is the case, then we might just as well go the whole hog and nationalise and ration everything.


That's been tried, and it failed.

Vanity, ingenuity.

Tuesday 16 December 2014

Unsurprising Headline Of The Day

From The Daily Mail:

Taxi company Uber's low-cost carpooling service, UberPOP, is set to be banned in France from January next year, the government said.

The ruling comes after hundreds of taxi drivers blocked roads around Paris to protest what they claim are its unfair business practices.


… er, causing a massive gridlock isn't an "unfair business practice"? Sounds like typical Gallic shittiness to me. The only thing that's surprising is that the French weren't the first to ban Uber.

The new law tightening regulations for chauffeured rides will effectively ban the UberPOP service as of January 1st, Pierre-Henry Brandet, spokesman for France's Interior Ministry, said.

'Currently, people who use UberPop are not protected if there is an accident. So not only is it illegal to offer this service but for the consumer there is a real danger,' Brandet told the BFM television network.


We've heard this one before and it is completely irrelevant, it's a "Killer Argument Against Uber, Not". If the Frogs want to make it a law that it's illegal to drive a car without insurance for all passengers, paying or otherwise, well that's absolutely fine*. But how the driver and passengers first establish contact is completely irrelevant.

Also on Monday, the city government in New Delhi banned Uber from operating in the Indian capital after a passenger accused one of its drivers of rape…

New Delhi Police said they were considering legal action against Uber for failing to run background checks after it emerged the suspect was arrested for raping a woman three years ago but was later acquitted.


That's collective punishment is what that is.

The Indians might as well find out what mobile network the driver was using and shut that down as well, find out where he bought his last tank of petrol and arrest the pump attendants for aiding and abetting etc.

* IMHO this requirement for insurance is a load of nonsense. It makes sense if only a small minority have cars, but nowadays, we are nearly all either car drivers, passengers some of the time and nearly all of us are pedestrians some of the time, so we're all paying to insure each other and ourselves. Compulsory mass insurance is what governments do (however dressed up or disguised), so they might as well run it centrally and universally. That cuts down admin overheads, paperwork and saves on enforcement costs.

It's the same logic has having one national fire brigade. The fire brigade isn't really there to help the poor fool who sets fire to his own house, it is there to protect the poor fool's neighbours. Those neighbours don't need to worry about organising somebody to put out the fire, or getting sued for trespass, the fire brigade does it for them. Whether the government then wants to recover costs from the poor fool is a separate topic.

Idiot Headline Of The Day

From The Daily Mail:

British households will throw away the equivalent of 4.2 million dinners on Christmas Day, according to research.

The food we leave on our plates on December 25 adds up to to 263,000 turkeys, 740,000 Christmas puddings and 17.2 million Brussels sprouts across the UK, a study revealed.

Figures show that nearly 10 per cent of every festive meal is thrown away, which equates to an incredible £64million of wasted food.


Population of UK, approx. £64 million.

So that's £1's of food 'wasted' per person, probably about the same as we will spend on wrapping paper or Xmas crackers. Having too much to eat is part of the festive fun and merrily chucking away 90% of the Brussel sprouts is a fine, British tradition. Well worth £1 each, if you ask me.

Monday 15 December 2014

"Yossarian recognized the shot"

From Catch 22:

[Yossarian] heard a stealthy rustle of leaves on the other side of the sandbags and fired two quick rounds.

Somebody fired back at him once, and he recognized the shot.

"Dunbar?" he called.


That's the funny thing.

When I read the book, I assumed that this was intended as satire, but now I'm not so sure. If you get bombarded with emails and 'phone calls all day long, then soooner or later, you can guess roughly who is ringing* or who sent you an email/its contents without even looking at the number (which flashes up on our office 'phones) or the email sender. Or if you're over by the filing range, you can tell that it's your 'phone ringing, even though it is set to the same ring tone as everybody else's.

* In the admittedly very broad categories: spam, cold calling, important, nuisance, work-vs-family related; good news-vs-bad news etc. Or perhaps I'm imagining it..?

Movie Review - The Hobbit: An Unexpected Journey

The generally good reviews of the last Hobbit movie have prompted me to catch up on all the Hobbit films, the last one at the cinema. Here, I cover The Hobbit: An Unexpected Journey, but I'll be doing the other films too.

I'm not sure that I'd have been very happy if I'd paid full price and seen The Hobbit: An Unexpected Journey. One of the criticisms of the Lord of the Rings is that it was 3 films of hobbits walking, a somewhat unfair criticism, but a lot of The Hobbit did feel like that (although mostly dwarves in this case). It also felt like not much had happened in the film (there are things that happen, but they don't go anywhere at this point).

Yet, I want to see some more of it. I want to see where it goes. And I realised that my experience with The Hobbit was a bit like my experience with Game of Thrones. You watch a few episodes, you get to see the world they live in, the characters that inhabit it and a bit of story, and you're interested where it goes from here. Viewed as a 9 hour TV series, The Hobbit is so far interesting, I'd like to watch some more of it, and compared to say, a box set of Game of Thrones, actually a bit cheaper (I find the cost of TV boxsets compared to renting or buying movies weird.).

Barriers to entry

Emailed in by MBK from The Sunday Times readers' letters:

As architects, we can only get work with many of the housing associations if we take the risk of working for nothing up to the point when planning approval is granted for a scheme. Otherwise, there is no chance of getting on board a new project.

This procedure can cost thousands of pounds — all at risk — and in some cases it can take many months, if not years, to secure an approval. If the scheme is rejected by the planners, you get nothing. Furthermore, the client can change the brief and mess you around for as long as it likes at no cost to itself, or take a flyer on a problematic site.

This appalling business practice is driving some architects to the wall. Surely everyone should be paid in a proper manner at all times, rather than taking suicidal financial risks to secure work, especially when housing associations claim to practise ethical behaviour at all times.

Adrian Mitchell chartered architect Yelverton, Devon.


Housing Associations are dressed up as private/charitable organisations, but they are nearly all government owned and controlled. So that's a nice trough to get your snout into.

So to ensure that only large firms of architects, who can afford to pre-subsidise the work, get a look in, there's a nice barrier to entry for you right there.

(The whole of architecture is a closed-shop business, so they are all guilty of anti-competitive trade practices, but as per usual, the big ones are disproportionately worse.)

Reader's Letter Of The Day

It's not so much the content, that's all well-established and widely known, it's the fact that it was published in that most Home-Owner-Ist of rags, City AM (no link):

Every week there seems to be a new call for the "reform" (i.e. a reduction) of business rates.

But nobody seems to have realised that if business rates go down, the rent on the premises might simply be increased by the same amount. The only beneficiary of a reduction in business rates would then be commercial and retail property owners, not the businesses that rent the premises.

Much as I hate hidden taxes that disguise the size of the UK's bloated state from the average voter, this is one tax where the removal of it will do nothing for business competitiveness, and will simply require higher taxes elsewhere.

Ian Simes


Sunday 14 December 2014

So I guess we're not all racists now

From Joseph Harker, 24th November

Yet somehow, it seems, the British public has not taken Hamilton to heart. In 2008, when he seemed a shoo-in for the British public’s vote as BBC sports personality of the year, he lost out to cyclist Chris Hoy. The preceding British F1 champions, Damon Hill and Nigel Mansell, had each won the viewers’ vote twice – including years when they hadn’t even won the title. This year Hamilton will definitely be in the shortlist of 10 to be announced tonight, but the chances are that he will ultimately miss the main award again, with golfer Rory McIlroy the odds-on favourite.


...

Ultimately, Lewis deserves recognition because his success goes far beyond sport itself. But if he never gains national acceptance through the sports personality vote, it will say more about Britain than about him.

From the BBC 14th December



The Invisible Hand, Car Parks, Town Planning and Urban Sprawl

Four related topics which I will condense down to one post

1. The Invisible Hand

Adam Smith coined the phrase The Invisible Hand to explain that markets do not need government intervention and control, if you leave people to get on with things, then by and large, this will lead to an optimal allocation of efforts and resources.

(Clearly, this works well up to a certain point, but let's not worry about the various obvious exceptions to the rule).

a) But it doesn't work with land use once you have private land ownership.

At the "free market" end, where The Invisible Hand works well, let's imagine a public beach which people can use for free.

Some areas are better than others:
- if the tide is coming in, you want to be further up, if the tide is going out, you want to be further down;
- you want to be not too far from the beach shop, the car park, the public toilets and shower block, but not too near either;
- some areas nearer the cliff or the sea wall are better protected from the wind;
- people might prefer sunnier or shadier areas;
- people like having a bit of space round their little 'area' so they prefer the areas with fewest other people.

So the first to arrive will choose the best mix, and the next to arrive will choose the second best mix, and so on, all taking up much the same area for towels, windbreaks etc. If it's a nice enough day and the beach is long enough, people will start making a trade off between 'facilities' and 'space', so they might prefer being wedged in between some early arrivers at the shop/car park end to having more space several minutes walk away which will be under water in a couple of hours.

If you leave people to themselves, you'll end up with the optimal allocation; lots of people fairly close together in the best bits and very few people scattered far apart on the worst bits. As soon as one group leaves, others will spread out a bit to use the space.

At the end of the afternoon, everybody packs up and goes home, and the next time the weather is nice at the weekend, the process starts again.

b) Now, what happens if that public beach is parcelled up into equal sized squares of a few yards each, from the cliff right down to the low-tide mark and one is given or sold to each local household. Let's assume that occupation/trespassing is strictly enforced and that wardens go round checking that nobody is using somebody else's patch…?

Whatever happens, the allocation would be nowhere near as efficient as with the true 'free market' example a).

2. Car parks and retail

Turning to my favourite way of illustrating this in real life - car parks and retail.

a) When a developer acquires a very large area to build his retail park/shopping centre, he will devote about half the space to car parks. That's just the way things are. He knows that his tenants will be able to sell more stuff, employ more people and pay higher rents than if he has just shops and no parking spaces. And people like choice, so you'd rather go to a retail park/shopping centre with hundreds of shops than one with dozens of shops etc.

b) At the other end of the scale are proper 'high streets', where people go when they don't have to carry lots of stuff home. So 'high streets' are ideal for pubs and restaurants; doctors, dentists and estate agents; corner shops for a pint of milk or a packet of fags. Ideally you build up a few storeys and have shops/pubs at ground level, doctors and dentists on the first floor and flats above that.

But in popular belief, 'high streets' are where people are supposed to do all their shopping, including occasional stuff like furniture or a few fridge. It's nonsense, but let's run with it.

So let's a take somewhere in the middle, if there are dozens of small shops and very few parking spaces, they'll be struggling to sell much in the way of physical goods. But we know from our heroic developer in 2 a) that if we were starting from scratch, half the available land would be devoted to car parking spaces. So logic says, the best thing all the little shopkeeperes/landowners could do is knock down all their little shops and start again; even if they 'lose' half the space to the car park, they will still be able to sell more stuff overall from what's left.

Which doesn't happen. Because the incentives are hopelessly misaligned. Each individual shopkeeper/landowner wants to maximmise his sales so he leaves his shop standing. If all of them collectively wanted to maximise their sales they'd knock it all down and start again. Also known as first mover disdvantage. The Invisiable Hand (where there is always a first mover advantage) does not make an appearance, unless the Very Visible Hand of the local council - in cahoots with a well financed developer - does compulsory purchase orders and railroads it all through etc.

3. Town planning

Bearing all this in mind, it baffles me how we ever end up with existing town centres.

Our starting point is a collection of mud huts and wooden cottages thousands of years ago. New arrivals build round these in concentric circles, but the land is divided up into thousands of small plots, each jealously guarded by its owner.

Sooner of later, there is pressure to build a proper town centre, with a Town Hall, a train station, wider streets and a pedetrian precinct, a car park, a public park, big office clocks and a shopping centre. Even though there is a first mover disadvantage for each landowner. And somehow or other, many town centres end up like this, some more than others.

I'll leave it to you to try and piece together the historical process by which this happens, or why it happens in some places and not others. Your guess is as good as mine, to be honest. It might be cause and effect. Perhaps what we now see as 'the town centre' was originally built off-centre where larger areas of land could be acquired more easily/cheaply, and somebody took a leap of faith and built it, and then the town continued to expand round it (like an oyster developing a pearl round a grain of sand). And those towns where nobody had this vision simply stopped growing?

The same dillemma applies in spades to urban parks. No individual landowner would benefit from declaring his land to be a public park (although some Victorian philanthropists did so, bless them), unless he also owned a lot of the surrounding land and developed it for residential, knowing that he can demand a higher price for housing near the park. So in most cases the Very Visible Hand of the town council has to come along and declare something to be a public park, end of, and no back chat.

4. Urban sprawl

This is universally decried as A Bad Thing, but if you understand the issues above, it is clear that this is inherent with private landownership.

If there is one access point to a very large beach (car park, shop, toilet block etc) then people will gather round it, moving closer together in the good locations, beyond a certain distance, there won't be anybody. The 'sprawl' is self-limiting. I'm not making this up, a classic example of such a beach is Rhossili Bay on the Gower Peninsula. There's basically one access point, where the photo was taken. The far end of the beach is usually deserted, even if the first few hundred yards of it is 'full'.

So it's only because The Invisible Hand doesn't work that Urban Sprawl is an issue. If the first mile of Rossili Beach had been parcelled up as outlined in example 1 b) above, then people from elsewhere who want to visit would have to trudge a mile past the privately owned squares (many of which will be empty on any given day) to find one of the unclaimed spaces. So far fewer people would visit. Fail.

It's exactly the same with town planning, exacerbated by this flawed idea of the Hallowed Green Belt. I've done three examples with the same amount of developed i.e. useful land, I haven't drawn all the connections like roads, railways, water and sewage pipes, electrictiy and gas, but it must be clear that you want to minimise on this with A or B you need the least (surprisingly, A requires less than B, but that's a maths thing) but with C you need the most, which will devour as much land again as the actual developed areas.

A. We know that the ideal kind of town is spread out along branches (see here). Everybody gets benefit of being near the centre and near the countryside:


B. If you have a fairly strict green belt policy, you end up with a second best solution. People are nearer the centre but further from the countryside:


C. The worst of all worlds is the very strict green belt, so towns only grow to a certain size and then another New Town springs up on the other side of the green belt. We're all near the countryside but nobody is near the centre, as there isn't one. You waste all the extra money and land on trunk roads etc and you don't get the agglomeration benefits - the dark grey shaded bit in examples A and B:


5. So is there a 'solution' to all this?

There is no perfect single solution to all this, but you can ameliorate it by making it all more free-market again, which counter-intuitively can only be done by some sort of collective action:

a) Replacing other taxes with Land Value Tax, obviously. With LVT, there would be less need for Green Belt policies, sprawl would be self-limiting.

b) Having more land owned by the local council in the first place, who can take the larger view, or owned by large landowners who are paying full-whack LVT and are in it for the money and the larger view rather continuing doing what they are doing for sentimental reasons or sheer inertia.

c) Make smaller landowners (all the little retailers in dying town centres with no parking) pool all their land, so that instead of owning one shop out of a hundred, you are now a one-per cent shareholder in a company which owns a large area. Then slap the company with the higher LVT it can earn buy redeveloping as a coherent whole. The company decides by majority what it is to do, all it takes is one person to have the initiative and to offer to redevelop the whole lot, so you vacate your little unit and after a year or two you can now rent back from the company one unit to re-start your business, assuming it was a viable business to start with, and still collect your dividend of one per cent of the profits.

Saturday 13 December 2014

Banned Ad - That's why I am posting the link to it, if for no other reason...

Here

Nanny state rules OK.

Friday 12 December 2014

Sustained Damage

Article

The irony of the damage caused to Nazca lines by Greenpeace in Peru is that archeologists have been worried for years that extra rainfall caused by deforestation and global warming could erode them.

Friday Night Xmas Gear Change

"Here comes Santa Claus" by Bobby Helms, up a semi-tone after one minute:

Thursday 11 December 2014

Weasel Words of the Week (1)

"Democratic Socialism"
The implication of the phrase 'democratic socialism' is that the demos can have democracy as long as it has socialism.
Democracy is a process.
Socialism is predominantly an economic philosophy.
In a true democracy the demos could vote 'not socialism'.
Democracy is entirely incompatible with socialism.

Legal and economic incidence of a tax (part 94)

For all fucknut Osborne's waffle about his SDLT changes "helping buyers", we are not surprised to see this sort of breathless and hyperbolic do-whattery in The Evening Standard:

Property buyers are demanding huge last-minute price reductions on central London homes following George Osborne’s dramatic shake-up of stamp duty…

Charles Puxley, director of sales in the Chelsea office of agents Jackson-Stops, said: “We had a case in SW7 last week on a property under offer at £3.6 million where a buyer said, ‘The stamp duty is going to cost me that much more — I’m going to reduce my price by £80,000’. It’s human nature that if you have to spend that much more you’re going to take it off the offer. In this case the client refused to accept the gazunder.”

The practice of gazundering — the mirror image of gazumping, when a seller accepts a higher offer after a price was agreed — is a classic sign of a buyers’ market.


A tax on anything is borne whichever factor is less sensitive to price (in terms of quantity supplied or demanded). So clearly, taxes on land, be they annual recurring taxes or transaction taxes, are borne by the seller. Regardless of the price offered, he cannot produce or provide more or less than he has. The buyer can demand larger or smaller quantities.

So this is not a sign of a "buyer's market" or anything else, it is a sign that, er, SDLT has been increased on sales of the most expensive homes. And knocking £80,000 off a £3.6 million bid is not a "huge reduction", it is a 2% reduction, the same amount as the SDLT went up.

Similarly, SDLT has been reduced somewhat on the sales of the other 98% of homes, and we would expect to see prices firming a bit with some gazumping going on elsewhere in the country.

Another one of those longevity stories

From Kent Online

The grandfather from Stelling Minnis, who celebrates his 96th birthday on Friday, works for Kent Wool Growers (KWG) five days a week - with no intention to retire any time soon...

Mr Huntley says he keeps fit and healthy by working, regularly exercising and making sure he gets eight hours sleep every night.

For the past 50 years he has attended the gym religiously once a week, and says nutrition is key with "meat and two veg" on the menu [every day - according to The Metro], Sussex beef especially.


All these stories about people who are still living an active life at a very old age seem to have one thing in common - they have a routine, usually a daily routine.

It doesn't seem to matter too much what the routine is - it's different for different people - but the point is to find a routine you enjoy and then just live every day pretty much the same.

Wednesday 10 December 2014

NIMBY Bullshit Of The Week

From The Evening Standard:

Our green belt is the envy of the world (1); it is a green lung,(2) provides space for recreation(3) and is a check against unsustainable urban sprawl(4). Once it is paved over, it is gone for ever...(5)

Nicky Gavron (Lab), chair, London Assembly Planning Committee (6)


FFS.

1) In my line of work and daily life, I meet a disportionate number of people from abroad, and I sometimes ask them what drew them to England.

There's a fairly short list of answers, and never, ever, ever, has any of them ever mentioned The Hallowed Green Belt. Ever. And as we know, most tourists from abroad visit London, and if not, then Oxford or Cambridge or something.

2) That's a terrible Americanism, and "green lung" refers to an area of natural parkland within an urban region. Woodhouse Moor in Leeds, Platt Fields Park/Birchfields Park in Manchester etc. It does not refer to "farmland". Urban parks are worth their weight in gold*, but I'm not aware that parks like this are unusual to the UK.

3) 99% of "green belt" is private farmland around towns and cities, which does not provide a single square inch of space for recreation. Ag land owners wage their own private war on the ramblers.

4) People gotta live somewhere. If they live in smaller towns out in the countryside, then they just commute longer distances and are less likely to use public transport.

5) Once you've eaten some carrots, they are gone for ever. Use a litre of petrol and it's gone forever. But well built new housing will effectively last forever (centuries) and the land under them really will last forever. And the land is not "gone", it's just being used for a higher value purpose. For ever.

6) Were she a Tory MP or councillor from the stockbroker belt wanting the maintain the scarcity value of her constituents' homes, fair enough, but this woman is supposed to be on the people's side.

* Not literally, obviously.

Rail Fare Idiocy

From the Independent:

Over the past few days I have had random conversations with friends and colleagues whose lives are far removed from those dependent on food banks. I am struck by  how often the price of services or vital goods came up.

A well-off friend told me that she and her husband went to Devon for the weekend, had wanted to take the train and were deterred by the cost of more than £300. They were going to face the insane traffic jams instead. On the same day, I bumped into an old friend who now commutes from the Chilterns. He told me the train fares were preposterous. He had tried to make use of off-peak fares, but the  rail company had changed the definition of off-peak, making it impossible.

If you're living in London, rents are high. A way around that is travelling to and from London by train from outside. Of course, once everyone catches onto that, lots of people will do it to save on rents, and eventually the train fares will soak up most of the savings. The train companies will try and get as much as they can from passengers (and there's no better form of rationing than price, and in my experience, rail companies are pretty good at pricing).

I live an hour out of London and if you look at the fares around here, they really aren't that expensive. Torquay for me would cost £55 return. Get a Two Together Railcard, and it's about £75 for 2 of us. Compared to a 135 mile journey each way with £50~ in petrol, I think it's reasonably competitive. I'm sure the rail company is making a little money on it, but they can't make as much because there's not as much demand on my route.

BTW I looked up how much a return TGV train from Paris to Bordeaux cost on a Friday night, and it's £155. In case anyone tells you that French trains cost the same as a bag of croissants.
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MW adds, re: "... lots of people will do it to save on rents, and eventually the train fares will soak up most of the savings."

Either that, or, if rail fares are capped, rents in outlying town will rise to soak up the saving i.e. the cast iron formula is: rent in London = rent in outlying town + cost of commute (cash cost and time cost).

Well, duh.

From City AM:

Graduates earn £9,000 a year more than non-graduates, research released yesterday by the Department for Business, Innovation and Skills shows. That figure covers the entire working-age population – ages 16 to 64. Young graduates, aged between 21 and 30, earn £6,000 more on average than their non-graduate counterparts...

“These figures show that going to university is a great investment,” said Greg Clark, the universities, science and cities minister.


Is everybody else thinking what I'm thinking..?

A common criticism made by economists is that the link is not necessarily a causal one. Students who get a degree tend to be smarter on average before they go to university. The figures do not control for that effect.

Further hilarity at gov.uk:

Born in Middlesbrough, Greg studied economics at Cambridge before earning his PhD from the London School of Economics.
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UPDATE: Mombers says "Would love to see the figures once doctors, dentists, lawyers, accountants, engineers and any other professions that require a degree for entry are stripped out."

That's the sad thing, there is no real requirement for accountants to have a degree, but over the past twenty or thirty years, nearly all Chartered Accountants have made it a pre-condition, even if your degree is completely irrelevant. I've had younger colleagues with degrees in glaciology and ancient history, FFS.

Tuesday 9 December 2014

Nope.

Ralph Musgrave  left a new comment on "Nigel Farage fails to get a round in because of immigrants":

Farage has a point in a very indirect way, as follows.

If a country has the optimum supply of infrastructure, and it knows that large numbers of immigrants will arrive in the near future, then EXISTING residents of the country have to pay for more infrastructure in preparation for the new arrivals: else the country will have inadequate infrastructure when the new people arrive.

Then on arrival, the new residents do not have to make any special payment re their share of infrastructure costs. And at a guess that will be several tens of thousands per head. (London spends £2,700 per head per year in infrastructure, never mind the ACCUMULATION of infrastructure capital or assets over the decades).


Nope.

1. Farage was talking specifically about roads (the M4). The total amount spent each year on roads and road building is in the order of £10 billion. The total amount of tax paid by motorists (fuel duty and VAT on fuel; VAT on cars and repairs; Vehicle Excise Duty etc etc) each year is in the order of £40 billion - £50 billion a year.

So all those mythical immigrants clogging up the M4 are - like all motorists - paying for the cost three or four times over.

2. Public transport in London is a slightly different issue; only about half the cost is covered by ticket sales (immigrants pay their fair share of this). The rest of the cost is indeed subsidised. But those who are not paying their fair share are landowners, especially those with rental income. The rental value of a home in London is to a large extent a function of transport spending. Shut down public transport in London and "the city" would cease to exist, it would just be a collection of villages.

Immigrants - like everybody else - have to live somewhere. Those who moved here recently will be largely renting, ergo they are paying in full for the value of public transport, which is far in excess of the cash cost (or else it would not be worth doing). Those who moved here a while ago might be landowners, but so what? They will have paid their share of other taxes.

3. On the level of an individual with a limited lifespan, it sort of makes sense to distinguish between large, one-off acquisitions ("capital") and current spending. But "the government" is to all intents and purposes is immortal, the grey area between "capital" and "current" expenditure is so large that you might as well treat it all as current. To do otherwise is double-counting.

4. "Build it and they will come". Roads are clogged up even in areas where there are very few immigrants. That's just human nature. Build more roads and people drive more. Or more people drive. Commute times have not significantly changed over the centuries; if you can speed up traffic, people just travel longer distances.

“It is horrific and very sad..."

From The Evening Standard:

A man who fell 60ft from the window of a penthouse flat in one of London’s most exclusive squares died after being impaled by metal railings below...

The £3million split-level flat is next door to a property once owned by Beatles drummer Ringo Starr where John Lennon, Paul McCartney and Jimi Hendrix all stayed in the 1960s.

A neighbour, who asked not to be named, said: “It is horrific and very sad. My cleaners were here and saw the man’s body. They were traumatised."


"Cleaner", singular, I could understand, I know plenty of people who have a nice East European lady pop in once a week, but "cleaners" plural???

Suffolk Sunrise




The Arts Council of Northern Ireland

Presumably abbreviated to ACNI?

Monday 8 December 2014

"Easy Christmas"

My brother in law has ground out another Xmas hit:


"Nigel Farage fails to get a round in because of immigrants"

From the BBC:

Nigel Farage has blamed high levels of immigration for denying him the opportunity of getting a round of drinks in at a meet-the-leader event ahead of UKIP's first Welsh conference.

Ten minutes before closing time, the UKIP leader jotted down everybody's order on the back of a beer mat and made his way towards the bar. About 10 people out of his drinking party had already bought a round, and it was the UKIP leader's turn to put his hand in his pocket, but he returned empty handed just after the final bell on Friday evening.

He laid the blame squarely on "a bunch of thirsty Poles ahead of me in the queue who seemed to want to drink the bar dry" and was thus prevented from doing his bit.

The event at Margam Park was part of his party's conference which was held on Saturday. Labour criticised Mr Farage calling his excuse "absurd", insisting that he had been spotted at the bar knocking back a pint of bitter long before the bell rang.

Barmaid Imie Nazwisko confirmed that she had served him with a pint just after last orders were called. "He nice man but very cheeky! He say he not send me back, and wink at me!"

Speaking to the BBC's Sunday Politics Wales, Mr Farage said: "It took me half an hour to get the barmaid's attention - it should have taken no more than three minutes.

Sunday 7 December 2014

Making Plans for Nigel

From The Independent

The Ukip leader Nigel Farage has blamed the fact that he missed a paid-for party event in Wales on immigrants.

In an appearance on BBC’s Sunday Politics Wales, Mr Farage was accused of a lack of professionalism after he failed to make it to a “Meet Nigel Farage” evening in Port Talbot for which about 100 people paid £25 each.

But the party leader said that traffic on the M4 was to blame for his lateness – and put that down to “the population going through the roof”.

He said: “It took me six hours and 15 minutes to get here - it should have taken three-and-a-half to four.

Bloody immigrants. Coming over here, not having the decency to point Nigel at the warning on Google Maps that "These directions are for planning purposes only. You may find that construction projects, traffic, weather, or other events may cause conditions to differ from the map results, and you should plan your route accordingly. You must obey all signs or notices regarding your route."

It's been like that since I can remember (about 20 years). If I had to get to Port Talbot on a Friday night out of London I'd either leave before 3pm to avoid the rush or get a train.

Von Thünen's Theory of Rent

Although Ricardo was quite correct, he explained his Theory of Rent in such a clunky fashion (using agricultural land to illustrate the point) that it's easy for the Faux Lib's and Homeys to attack (they are attacking the explanation, not the underlying observation, but there you go, some people easily confuse the two and have no grasp of analogies).

It turns out that the far more relevant explanation is Von Thünen's, as he factors in travel/transport costs, a model which applies much better to a modern, industrial society where the qualities of the land itself are nigh irrelevant and everybody faces the same two basic constraints - local average earnings and commuting times.

(Fraggle worked this out independently for himself, see here and here).

Caveat 1: The costs of transporting actual consumer goods are relatively low in the grander scheme of things, and the price of consumer goods are pretty much the same all across the country (higher rents in town centres are because a retailer can sell more goods per unit area; not because he can sell for higher prices).

Caveat/modification 2: What really matters is commuting times, and to a lesser degree 'getting the kids to school' and 'getting to the shops' times. Travel time is not the same as distance as the crow flies. Door-to-door is what counts. Hence why sensible retail areas give over at least half their space to car parks. They can't make the land any nearer to their potential visitors, but they can easily shave ten minutes from the door-to-door travel time by having plenty of parking spaces.

Caveat 3: There are lots of other things which explain local differences, such as being near a public park; in the catchment area of a good school and/or being nearer the school; having a nice view; being near the coast - but let's put those to one side for now, that's a simple plus/minus adjustment once we've done the basic workings.
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1. The first constraint is local average wages. If you look at average rental values (in terms of actual rents or selling prices) for whole conurbations/regions, they are closely related to average (net) wages, which is blindingly obvious. If average worker can earn £1,000 a year more by moving from A to B and doing the same job, then average rents in B will be £1,000 higher.

2. Commuting costs make up a huge share of GDP, if you express them in terms of hours x notional cost/value per hour. For example, average commute time 45 minutes and people value their own leisure time at £10 per hour, (or could earn £10 an hour by doing overtime, or they value their leisure time at £8 and commuting costs £2/hour etc), for one person the "cost" is 7.5 hrs/week x 48 weeks/year x £10 = £3,600. There are 30 million workers in the UK, 30 million x £3,600 = £108 billion a year, approaching ten per cent of GDP. Or, people spend one-fifth as much again commuting as working, in which case commuting is a hidden cost of one-fifth of of GDP.

3. So if everybody in the whole conurbation/region was on exactly the same wage, the gradient between the centre and somewhere half an hour (twenty miles?) further out would be £4,800 per hour, capitalised at 4% = £120,000 on the price of an identical sized home/garden. The rental gradient is £80/minute (being £4,800/hour divided by 60 minutes). The price gradient is that amount capitalised at (say) 4% = £2,000/minute.

But... Caveat 4: This assumes that all homes are of the same size.

Clearly this is not true; in the same way as people as people prefer short commute times to long commute times, they also prefer more space to less space. So the price gradient for "an average home" is much flatter. By and large, in a larger town or city, the price of a flat in the centre = the price of a terraced house in the inner suburbs = the price of a semi-detached house in the outer suburbs.

4. So build densities vary. If all homes cost the same but there are 50 flats per acre in the centre and 10 semi-detached houses per acre in the outer suburbs, then the rental value of one acre of the centre is worth five times as much as the rental value of one acre of outer-suburb.

And... Caveat 5: Not everybody earns the same, and each earner has his or her own price gradient. The larger the conurbation, the higher the average salary and the higher the difference between the highest and lowest earners. So in a very large conurbation/city state, the gradient is £80/minute for median earners, £160/minute for higher earners and £500/minute for top earners.

6. So there are three gradients (in fact there are infinite, but this is getting complicated enough), at the centre, the top earners create a gradient of £500/minute and price out the higher earners; the next concentric circle is the higher earners who create a gradient of £160/minute and price out the median earners; once the top earners and higher earners have their homes, the median earners make do with the rest with a price gradient of £80/minute.

7. Or you can start from the margin. Home rental values at the margin are zero, they and climb by £80/minute for a good long while (lots of median earners), then the price curve steepens to £160/minute for a shorter distance (fewer higher earners); then climb by £500/minute at the very centre.

8. Land values per acre are just one measure or all this. You can also look at population density or build density and it is always exactly the same gradient. Look at a long range photo of any major city and the skyscrapers are always in a cluster in the middle; then it's office blocks and blocks of flats, then terraced houses, then semi-detached houses, then industrial estates and then suddenly it's countryside.