Blogs

The "stunningly complex" benefits system only benefits the crooks

Another recurring story on PL - the benefits system. Anyone who can get their head round the complexities of this system deserves a few financial handouts and tax credits. It seems those who control it are not up to speed, they have been conned out of £2.5bn (TWO POINT FIVE BILLION POUNDS) through fraud. The Commons Work and Pensions select committee has described the benefits system as "stunningly complex".

The man who invented the Euro

I am much obliged to Paul Nollen, with whom I have been having a discussion about the Basic Income concept, for pointing me at Bernard Lietaer. Here is how Professor Lietaer's Wikipedia entry begins:

Bernard Lietaer is an economist and author who was one of the designers of the Euro. He studies monetary systems and promotes the idea that communities can benefit from creating their own local or Complementary currency, which circulate parallel with national currencies.

Here is what Professor Lietaer has to say about himself on the website of one of his organizations:

Bernard Lietaer is the author of the forthcoming "Of Human Wealth" and "The Future of Money" (London: Random House, 2001), has been active in the domain of money systems for a period of 25 years in an unusual variety of functions. While at the Central Bank in Belgium he co-designed and implemented the convergence mechanism (ECU) to the single European currency system. During that period, he also served as President of Belgium's Electronic Payment System. His consultant experience in monetary aspects on four continents ranges from multinational corporations to developing countries. He co-founded one of the largest and most successful currency funds becoming its General Manager and Currency Trader. He was Professor of International Finance at the University of Louvain; and is currently Visiting Professor at Naropa University in Boulder, CO. He is the co-founder of ACCESS Foundation, (www.accessfoundation.org), an educational non-profit whose objective is to communicate best practices in the domain of complementary currencies. He is currently a Fellow at the Center for Sustainable Resource Development at UC Berkeley.

So this is the man who co-designed the ECU and the Euro, implemented the ECU, ran the Belgian EPS, and founded and ran one of the largest offshore currency trading funds (Gaia). He is also (according to his CV) a member of the Club of Rome, a Fellow at the World Academy of Arts and Sciences, a Fellow of the World Business Academy, and a Founding Member of the Global Futures Forum. He must be a pretty serious financial expert. Let's have a look at his intellectual efforts.

PMQs & Climate Change

In today's PMQs, Ming Campbell asked the PM, with specific reference to the recent floods the following question:

"The Prime Minister was responsible for the establishment of the Stern report which as he will recall pointed out the severe economic consequences of climate change. Isn't it clear from the events of the past few weeks that we can not afford not to take the necessary steps nor indeed not to spend the necessary money in order to mitigate the effects of climate change."

To which Gordon Brown answered:

Centrist politics - stealing or sharing clothes?

Andrew Pierce, Assistant Editor of the Telegraph, reviewing PMQs on Radio 5Live today, was laughing at how Brown had once again stolen the Tories' clothes (this time, on border police), leaving Cameron "standing naked at the dispatch box". He claims the Tories are furious about it, but have no option but to agree that Brown's proposals are a jolly good thing, if the proposals were theirs in the first place.

The Tories have brought this on themselves by seeking the managerialist "centre-ground". If they look to adopt positions close to Blair and Brown's Third-Way programme, they should not be surprised if the Government adopts their ideas. Now that they all share the same sizes and styles, their wardrobes are interchangeable. This isn't stealing, it's sharing, like co-habiting girlfriends. Stealing is selfish, sharing is mutual - Dave was today trying on Gordon's "56-day detention" outfit for size, though he's not quite sure whether it suits (DD was said to be sure that it didn't this morning, but then his taste is more conservative).

The only way to prevent this from happening, and to provide voters with a good reason for voting for a party other than the Government, is to adopt a philosophy and policies that are distinct from the Government's interventionist position.

I have been writing about the three irreconcilable branches of the Tory party - the social-democrats, conservatives, and classical-liberals. Brown will have no difficulty borrowing social-democrat policies - that's exactly his size and style. And, although people like to imagine that leftists are socially liberal, the working-class instincts of many of their supporters will have no trouble reconciling themselves with socially-conservative policies, so long as they incoporate sops to the poor and disadvantaged, which Cameron's social-democratic instincts and determination to stop the Tories looking like the "nasty party" oblige him to incorporate in any proposals. And as lefties from Lenin, Stalin, Mao, Mussolini and Hitler,* down to the modern-day Kim Il Sung, Kim Jong Il, Fidel Castro and Hugo Chavez have demonstrated, the left are enthusiastic adopters of authoritarian (and often even racist) positions - again catering to the prejudices of what they view as their core constituency (or class).

The one position with which lefties find it difficult to reconcile themselves is classical-liberalism. They can handle the social-liberal aspects of that (though in a meddling, "let's make everything perfect for everyone" rather than "laissez-faire, laissez-passer" kind of way), but the economic liberalism and individualism is simply incompatible with their beliefs. Brown and Blair have made a good job of pretending it is otherwise (and in the case of Blair, I believe there was a genuine modicum of belief in free markets), but scratch beneath the surface of almost everything they have done, and you find a corporatist, managerialist, effectively-socialist solution disguised as a market mechanism. They have coopted the large corporations and City institutions, and consulted economists till they (or we) are blue in the face, to maintain the charade of market-delivery, but they have at all times hindered the freedom of businesses large and small to respond freely to unbiased market signals.

The Tories should accept that Uncle Gordo will try to look as authoritarian as them (if not more so) on law-and-order issues. They should argue for what they believe is right on security issues (strong, well-funded defence of personal liberty, property, and nation - pretty much what DD has been promoting very effectively), and live with Gordon stealing the parts of that agenda that are more authoritarian and less liberal. But exactly contrary to the Letwin/Willetts brainbox-nonsense about "socio-centric not econo-centric paradigms", they should try to drag the focus back to the size of the state, whether in its intrusion into people's private lives, or into our economic activities. Those are clothes that Gordon simply couldn't wear comfortably if he tried to steal them. But it would require them explicitly to abandon the Letwin programme and to commit to cuts in government-funded activities and in taxation. Is Cameron brave enough, and could he carry it off convincingly given his position to date? If not, those who think that politics really is about the battle of ideas, and not just about who can best run other people's lives, should leave the Tories to flounder in Gordon's wake, and go off and set up a real alternative.

The Rail White Paper

Once again, yesterday's rail white paper has left me asking - what exactly is this government's policy on climate change, carbon emissions and transport?  In order to increase capacity of the railways, commuters will be forced to pay yet more inflation busting ticket price rises.  Indeed, this will sort out the capacity problems because it will force people off trains and back in their cars.  While the cost of running the railways is expecting to go up from £5bn to £9bn, the government's subsidies are about to go down - from £4.5bn to £3bn.  The shortfall will be made up by pass

The DfT's big heart

The Department for Transport (DfT) announced this morning that "Yorkshire commuters [are] at [the] heart of strategy for rail growth". Cleethorpes and Northallerton stations will be refurbished, bottlenecks around Leeds and Manchester will be tackled, extra carriages will be made available for Leeds and Sheffield suburban services, capacity on some routes of the Trans-Pennine Express will be increased by 30% by lengthening trains, and by "53% for peak hour commuter trains serving Leeds". Lucky old Yorkshire, being at the heart of the Government's plans.

Three minutes later, the DfT announced that "East Midlands railways [are] at the heart of strategy for [rail] growth". This strategy is now a bicardiac beast, which tends to be an unstable condition. But nevermind. They'll get longer trains in Nottingham and Leicester, faster journeys on the Midland main line, and "passengers will also see more punctual services as the Government is buying improved reliability". Very cheering, I'm sure, but what quality of service did the Government think they were buying before?

Another two minutes later, and the East has been added to the heart of the strategy. This beast's physiology is starting to look curious indeed. Guess what: longer trains, more capacity, better punctuality... At least this big heart will be beating as one.

ASBOs

Another government policy has been exposed for its ineffectiveness and its lack of proper analysis in to the problem before implementation.  The Commons public accounts committee has reported that ASBOs are being handed out with little effect on anti-social behaviour in many circumstances.  All this while anti-social behaviour not only makes lives a misery for many, it is costing the tax-payer £3.4bn a year.  The report states that "Some 10 years after the first anti-social behaviour measures were introduced, no national evaluation of the effectiveness of the different anti-social

Another little money spinner

The unrelenting attack on the motorist continues and it is TfL that is leading the way.  Soon they will be charged £50 for even the briefest of swerves in to cycle lanes - and the cameras are watching be warned.  Now given the streets of London were designed and built at time when the largest vehicle on the road was the penny farthing, I am not entirely sure that this insane policy is a fair one.  It is being reported that even a motorist who strays in the cycle lane to pass a vehicle turning right will be slapped with a fixed penalty.

The latest Independent distortion on climate-change

Most of the papers have been responsible enough not to attribute the latest bad weather to climate-change, but guess which one is the exception? The Independent's lead story today is titled "After the deluge - scientists confirm global warming link to increased rain". They have got hold of a report that won't be published until Wednesday, which they claim "supports the idea [that recent weather is caused by climate-change], by showing that in recent decades rainfall has increased over several areas of the world..." These claims are repeated at several points in the article, always carefully phrased to refer to Britain (or even wider regions) as a whole and to avoid consideration of seasonal patterns. For example: "The computer models used to predict the future course of global warming all show heavier rainfall, and indeed 'extreme rainfall events', as one of its principle consequences".

I have sent the following letter in response, which they won't publish, of course, because dissent from their version of climate-change dogma is not permissible:

Sir, Can you point to any climate models, including the one to be published on Wednesday, that predict increased rainfall in England in summer? All climate models of which I am aware predict reduced rainfall in England in summer. Any increase in rainfall is either for winter or an annual average, where the winter increase outweighs the summer decrease. Your opportunistic distortion of climate-change science to suit the story you want to tell undermines the credibility of that science.

-- Yours, etc

As those who have read my posts on this issue will know, I am not an arch-sceptic of anthropogenic global-warming theory (I accept that there is a risk that we ought to take into account), but I do despise prejudice portrayed as hard scientific fact.

The poll result and this week's new poll

Last week's poll asked whether the £20 marriage tax credit that the Tories have been floating as an idea is a pointless money waster, so little as to be an insult to the institution of marriage or a good, effective promotion of marriage.  44% of you felt it was an insult.  31%, rather surprisingly I thought, felt it was a good and effective promotion of marriage.  I would have liked to have seen in the comments why you felt this way.  24% felt that the whole thing was a smokescreen and that problems of society have nothing to do with the decline of marriage.

Throwing away money and in the wrong direction

Economists from the Institute for Fiscal Studies (IFS) have slammed the government’s new grant system to be introduced next year to university students. The reforms are aimed at attracting the poorest students to university by handing out grants worth hundreds of millions of pounds a year - something the IFS has described as a waste of time. They claim that taxpayers' money would be better spent on improving the school results of youngsters from poor homes. They also cited universities as coming out of the deal worse off since they would have to give bursaries to more students.

Happiness

The latest publication from the IEA landed through the letterbox yesterday (I can't say plonked or thudded, because the IEA publications are always of eminently digestible proportions). It is on one of the most important subjects of modern policy and economy - happiness.

There is an increasing tendency amongst academics and politicians to decry policies that deliver simple economic freedom, and to talk up policies that try to deliver social benefit, usually at the expense of economic freedom. The pretext is a growing body of work that argues that prosperity and happiness are not linked, and suggests alternative approaches to maximising happiness (most commonly, though with little empirical or logical justification, the reduction of income inequality). In these demotic times, what modern politician can resist the call to maximise the public's happiness? Certainly not most of our bunch of intellectual lightweights.

The IEA booklet, Happiness, Economics and Public Policy, by Helen Johns and Paul Ormerod, tackles this body of work head-on, in its own terms. It examines critically the statistical merits of the happiness data, and the claims that standards of living are unimportant to happiness, and that other factors such as economic inequality are more important. It finds most of the happiness literature wanting.

This is a necessary counterweight to the burblings of politicians like David Cameron and "economists" like Lord Layard on the need for policies to try to maximise General Wellbeing (GWB) or Gross National Happiness (GNH), rather than Gross Domestic Product (GDP). It is to be hoped (but not expected in the race to the wishy-washy centre-ground) that politicians will read this booklet and stop sniffing Layard's glue.