Worth a read

Krugman in NYT:

In the spring of 2010, fiscal austerity became fashionable. I use the term advisedly: the sudden consensus among Very Serious People that everyone must balance budgets now now now wasn’t based on any kind of careful analysis. It was more like a fad, something everyone professed to believe because that was what the in-crowd was saying.
...
And it’s a fad that has been fading lately, as evidence has accumulated that the lessons of the past remain relevant, that trying to balance budgets in the face of high unemployment and falling inflation is still a really bad idea. Most notably, the confidence fairy has been exposed as a myth. There have been widespread claims that deficit-cutting actually reduces unemployment because it reassures consumers and businesses; but multiple studies of historical record, including one by the International Monetary Fund, have shown that this claim has no basis in reality.
No widespread fad ever passes, however, without leaving some fashion victims in its wake. In this case, the victims are the people of Britain, who have the misfortune to be ruled by a government that took office at the height of the austerity fad and won’t admit that it was wrong.

I urge you to read the entire article.

Quote of the day

From The Independent (here):

Authorities in the South Korean capital are trying to untangle themselves from a slimy row: how many octopus heads is it safe to eat?
The dish is a firm favourite on the peninsula – for its apparent aphrodisiac qualities.
In September, the Seoul city government enraged restauratuers and the fishing industry when it announced octopus heads contained hazardous amounts of cadmium, a carcinogen that poisons the liver and kidneys.
It advised against eating more than two heads a day.

Perhaps if they were deep-fried in batter?

Waving or drowning?

Ah, at last: the National Security Strategy. The BBC reports:

After months of study and debate, the NSC has produced a paper that identifies 16 threats to the UK.
The most serious - which they are calling "Tier 1" - comprises acts of international terrorism, hostile computer attacks on UK cyberspace, a major accident or natural hazard such as a flu pandemic, or an international military crisis between states that draws in the UK and its allies.

All very strange. Three major threats to our security appear to have been misplaced. These are:

1. Certain over-tired politicians who insist on participating in ill-judged overseas adventures, partly to prove how macho they are and partly to keep in with the US President;

2. The bureaucratic blockheads at the Ministry of Defence who seem incapable of ordering equipment and weapons that are delivered on time and within budget (which is why we end up with aircraft carriers without any aircraft); and

3. The spooks at MI5 and MI6 who (when they are not manufacturing intelligence or torturing prisoners) are in danger of crying wolf a little too often.

Prescribing a poison pill

That's it then. The SNP has abandoned hopes of winning next May's election. Why else would they bring forward the abolition of prescription charges from next April?

The Scottish Government can't afford it. So when Labour takes power it will be faced with the difficult decision of making offsetting cuts elsewhere (where oh Lord where?) or restoring prescription charges to the general disgust of all. Either way they're screwed.

Mr Gray better find his thinking cap - fast.

Transparency?

So there you go. The SNP is promising a council tax freeze over the next two years. Interesting.

Presumably they will provide local authorities with the additional resources (£70 million last year) required to maintain services. If so, what would that mean for the rest of the Scottish expenditure block which is already likely to be hard pressed as a result of the cuts? Expecting an answer before next May's election? Not a chance. They will nevertheless be obliged to produce a budget for 2011-12, but it is likely to conceal more than it reveals.

Like the question of what to do about university fees. We are promised a green paper later this year. This will no doubt set out the options, but don't expect anything like a policy to emerge before the election.

Incidentally, what has happened to that erstwhile SNP flagship, the local income tax? I suppose that it all proved too difficult and is now abandoned (buried in a shallow grave along with the independence referendum).

Not exactly reassuring, is it?

Music of the week

K's Choice, a Belgian group, that I first came across some years ago in Tempe, Arizona. Good stuff:

Not thought through

Once upon a time, when the government introduced a bill to parliament, it was fairly clear what the intention of that bill was. Consultations had been held, ground prepared and, while there may have remained details to be sorted out, everyone knew what was planned.

Now take the postal services bill, introduced yesterday by the formerly sainted Vince. He plans to privatise the Royal Mail. But beyond that broad principle, little seems clear. Some 10% of the company will go to the employees, but as for the rest we are in the dark. Will the government retain a proportion of the shares? Will it will be sold to commercial rivals? Will there be a public flotation? Answers came there none.

Similarly with the post offices. All very well to posit a mutualisation, but will the government continue to provide the subsidy to keep it going? Can you have an independent but non-viable mutual organisation? There are suggestions that the government will swing more business towards post offices, but details are extremely scanty.

All very unsatisfactory.

Does Cameron have a cunning plan?

Last week he put the boot into high rate taxpayers, depriving the yummy mummies of child benefit. Admittedly, he also took a swipe at the poor, by setting a £26,000 cap on benefits, in a (failed) effort to assuage The Daily Mail, but that was of minimal overall financial significance (although not for those affected).

This week, he proposes to subject the children of the middle classes to a debt-ridden future. All those parents earning between say £30K and £100K a year are looking at the prospect of their darling kiddies being loaded up to the eyeballs with debt by the time they leave university. The very rich won't be affected (are they ever?) and the poor will have access to a wider range of bursaries and scholarships. No, it will be the bourgeois middle class who suffer.

So why is Dave upsetting those upon whom he depends to return him to power at the next election? Maybe it's incompetence - not impossible given his headless chicken act last week in responding to the complaints about child benefit withdrawal. But like any conspiracy theorist, I suspect that there is something deeper going on. Perhaps we'll learn what he's up to, perhaps not.

Cracking goal

From last night's match against Iceland:

A 90 minute patriot writes ...

Today is the day I put on my Scotland t-shirt, in an entirely misplaced sense of optimism that the lads will keep the score at a respectable level. They will need to be at their best to hold the glorious Spanish senors from weaving their magic spells.

With a bit of luck, Mr Levein may play a forward or two, but don't count on it.

Last week's outing against the Czech Republic was abject, and last night's home defeat against Iceland (yes, Iceland) by the junior Scottish team was little better.

Still, hope springs eternal and all that rubbish.

A lawyer who represents himself has a client who is a fool

And Sheridan is not a lawyer. But I suspect he is a fool ...

Public sector pensions

It is little more than a year ago when I first qualified for my pension. I confess that I was somewhat disappointed to find out that the first payment would not be made until a month after my first birthday, but I consoled myself with contemplating the size of my lump sum.

Not that my pension arrangements are anywhere near the Fred Goodwin/John Elvidge model. Sure, I receive a little more than the average public sector pension of about £8,000 per annum but it is not enough to roll about in. The Ferrari will have to await the killing on the football pools.

And the bastards have already (in Slasher Osborne's budget) switched the uprating from the RPI to the CPI. OK, it may only amount to one or two percentage points per year but, over 20 years (with compound interest), it represents a fair whack.

Still, I mustn't grumble - I'm in a far better position than most. But I do feel sorry for those young civil servants now in their 20s and 30s* who will never attain the kind of reasonable pension provision that makes life in retirement relatively comfortable.

Do I feel guilty? Hell, no! They deducted more than enough from my monthly wage packet; and if my employer didn't sort out the accounting of the not unreasonable contribution expected from it, then that's his look-out.




*And God help them if their kids want to go to university.

Rather defeats the point?

Oh yes, the geniuses at the Ministry of Defence have a solution to the cost of the second aircraft carrier. The Guardian reports:

Officials will argue that converting the carrier into a pared-down floating platform to ferry helicopters, troops and vehicles would save £1bn in construction costs, according to senior defence sources. Not buying the 69 Joint Strike Fighters as intended would save about £7bn. MoD officials and Navy top brass will also argue that the second carrier could be kept in port most of the time to save hundreds of millions in running costs.

So we should spend £1.5 billion on bulding an aircraft carrier without any aircraft which spends most of its time in port. I can see the attraction in the idea but it's not going to fly, is it?

Bye bye

So farewell John Hughes. I thought that he always dressed very well. But I suppose that looking smart doesn't really do the business. But he seemed to try his hardest.

Quote of the day

I know that it's been said before but it bears repetition. From The Independent (here):

Britain has a problem with welfare. There is a deep benefits trap in this country and many thousands are caught in it. These individuals survive on help from the state. They are a drain on hard-working taxpayers. Worse, they see no future beyond this abject condition of dependency and furiously resist any attempt to alter the status quo. Go to the City of London, take a trip to Canary Wharf, and witness the victims close-up: they are Britain's too-big-to-fail bankers.
...
Like those trapped in a life of jobseekers' allowance and housing benefit, these bankers might look like they are enjoying the good life with their vast state-underwritten bonuses. But they must be suffering inside. These overpaid financiers used to regard themselves as the masters of the universe, but in recent years they have accepted great truckloads of official help. Think of the damage it must do then to their self-esteem to know that they are propped up by the state; that they're not wealth creators, but, whisper it, economic parasites.

Just a thought

No objections to the withdrawal of child benefit from the rich but why is Slasher Osborne delaying it until 2013? If there is such a panic to reduce the deficit, why put it off for two full years?

Oh and by the way, don't expect any sympathy for those earning just over £44,000 per year and losing the benefit.