Thursday, 26 April 2012

Double Dip Recession

So, the inevitable has happened - the UK economy contracted by 0.2% in the first quarter of 2012.

It can't be argued that this is unexpected - the deepening crisis in the Eurozone - our largest single export market - has made things increasingly difficult. However, it would be unfair to place the blame entirely on the Euro crisis.

No, this recession (although with the amounts involved, it's more of a stagnation) is home-grown.

The Labour hard-left have just about gone purple in the face, crowing 'too far, too fast' and Ed Balls is looking smug, vindicated in that his nonsense policy of 'spend, spend, spend' is apparently proven correct.

Except that it isn't.

The Government have fucked up, and badly. But Labour's current economic plan would make things worse, not better.

First of all, let's have a look at the case that Labour make: that 'austerity' has caused the double-dip recession. Well, in the most recent Budget Report, total public spending headlined at £683 billion. But in Labour's last Budget, in 2010, total public spending was £671 billion.

That's right. The Government is spending more than Labour did in cash terms. If you take into account inflation (which has been averaging at 4.86% on RPI terms since the last Labour Budget, according to the ONS) then we're looking at real terms cuts of about 2.93% of total expenditure.

So, the austerity argument doesn't really wash. The Government has not been implementing deep spending cuts - they have simply slowed the rate at which spending has increased, and allowed inflation to do the rest. They've bet on reducing the deficit through rising tax revenues, not spending reductions.

Of course, therein lies the problem. Tax revenues have risen, but not by the degree expected by the Government. The private sector recovery simply hasn't happened. Austerity hasn't killed the recovery, because we haven't had austerity. We've had a trimming of public spending.

Labour's proposals would not even see this trimming of the deficit. They would be borrowing £20 billion more than the current Government. And this is at a time when lenders to sovereign nations (or as I like to collectively call them, 'the bond markets') are calling into question their ability to repay debt.

The Government, through a combination of trimming the deficit and printing money like it's going out of fashion to fuel inflation, have managed to convince the bond markets that they can service the debt. With no credible plan to reduce the deficit and no political will to do so either, the bond markets would have a field day with a Labour Government. Gilt yields would go through the roof, and borrowing money would become a lot more expensive. This, in turn, would mean that more taxpayers' money would go to foreign creditors in interest payments, rather than being used to fund public services or pay down debt.

Labour's policy of 'spend, spend, spend' is still utterly discredited. See Greece for further details.

So, where have the Government gone wrong?

They fostered their hopes for recovery on a private sector expansion. Reasonable, given that private sector growth is the only way that any country in recession has ever got out of it. Their problem has been that they have utterly failed to engender an environment where a private sector recovery can happen.

Regulations are strangling the economy. Perverse labour laws that make it difficult for companies to reform their staffing make things difficult. Direct costs to employment such as Employer National Insurance are at an all time high. The tax credits system actively disincentivises work through its marginal tax rates in excess of 70%. The Income Tax system strangles demand at the top of the earnings table, stopping money from trickling down to others. The benefits system works to continue imprisoning people in poverty. The Government, in a bid to raise revenues, has hiked taxes on consumption, stifling the demand for private sector goods and services. Inflation continues to soar, rises in prices far outstripping rises in wages, again stifling demand.

In short, rather than grasp the nettle and cut public spending deeply, accompanied with regulatory reform and deep cuts to taxation, the Government took the politically easier route of tweaking the existing system, crossing its fingers and hoping for the best. And it's now exploded in their faces.

Don't get me wrong, the Government has fucked up, badly. Osborne is probably discredited as a guiding influence as Chancellor now - another incompetent in a Government full of them. But Labour's alternative is actually worse.

Wednesday, 18 April 2012

Censorship

I have had two brushes with censorship over the last few days, and both of them have made my piss boil.

The first instance was on Monday, when I tagged a few family members in a humorous internet meme on Facebook. It made me laugh, and knowing that they share my sense of humour, I figured it would make them laugh, too.

It was this.


There's about a million photos on the internet like this.

I was right - my family members did find it funny. However, after about half an hour I got a call from one of them reluctantly asking me to take it down, because one of his work colleagues had seen it, and had been offended by it. Because he works in education, it could result in disciplinary action for him.

*breathes deeply*

WHAT THE ACTUAL FUCK?! One of MY FAMILY MEMBERS gets threatened with disciplinary action for something I'VE posted?! I DON'T FUCKING THINK SO! They're welcome to come and fucking PICK ON ME ANYTIME. If they've been offended by something I've said, they can come and talk to ME. I'll be more than happy to OFFEND THEM AGAIN.

Cunts. Utter, utter cunts.

Someone pointed out to me that I should respect their opinion.

HORSESHIT. I don't have to respect their opinion AT ALL. Their opinion is ludicrous, infantile and IRRELEVANT. I will respect - even defend - THEIR PERSON, and THEIR PROPERTY. I will ATTACK their OPINION.

It was pointed out that if it was a teacher at my kids' school posting that, I'd feel differently.

No, I WOULDN'T. Because I'm a FUCKING ADULT, and I know when someone's telling a BLOODY JOKE.

Sweet Jesus.

So, upon the request of my family member, I did take the photo down, but only because THEY ASKED. Not because some childish, lip-trembling INFANT was threatening to go screaming to teacher. Good Christ. What the actual fuck is this country coming to?

And then the next bloody thing is this fucking steaming pile of turd. Some bloody committee of MPs (read: collection of useless cunts who can't get real jobs) has come up with the bright idea of blocking pornography from ALL computers, in order to 'protect the cheeeldren'.

No, no, no, no, no, no, NO!

I am all for stopping kids seeing pornography. I fail to see why the bastard, encroaching, motherfucking STATE has any business telling me how to do it. I have stopped my kids seeing pornography by installing a web filter on their PC. It took about ten seconds and didn't cost anything. But this committee seems to think that many parents 'lack the technical know-how'.

SO THE FUCK WHAT? They can't take it to a shop to do it for them? They can't ask a friend/neighbour? They can't FUCKING GOOGLE IT?! You utter fucking SPANNERS. No, the only solution is for the all-wise, all-powerful STATE to assume that responsibility. 'Cos people don't know what's best for themselves.

FUCK THE FUCK OFF OUT OF MY FUCKING FACE.

And when's it going to stop? Once they do it for porn, what next? The next little thing that is regarded as deviant. How about political extremism? Or religion?

Oooh, getting sensitive now, aren't we?

Censorship is a tool used by fascists to close down debate. I'll say what I like, when I like, to who I like. If it offends you, TOUGH FUCKING SHIT.

Thursday, 5 April 2012

Why Tax Cuts are a GOOD Thing

So, I've seen a few moans on Twitter about the 50% tax band being cut to 45%.

A tax cut for the rich. Out of touch Tories. Blah, blah, blah.

So, if a rich person benefits by £10,000 as a result of the reduction in Income Tax, and it lands heavily in their pocket, what are they going to do with that money?

Save it? Probably not - they've most likely already got substantial savings and investments.

Which leaves one other choice: they're going to SPEND IT.

Always a bad thing.

And what are they going to spend it on? Non-essential goods and services, which are subject to VAT at 20%. So straight away, almost 1/5th of the tax cut money will go straight back to the Exchequer when it's spent.

The providers of those goods and services will also pay tax. After deduction of costs, the remaining profits will be taxed.

The costs themselves will largely be labour, i.e. payroll. This will be subject to Income Tax and National Insurance.

So, the effect of the tax 'cut' at the upper end is that at least 4 other types of tax revenue - possibly more, because I'm sure some it will be spent on cigarettes, alcohol, fuel or plane tickets - will increase.

Furthermore, when they buy said goods or services, that contributes to the movement of money from one place to another, a concept which economists refer to as 'velocity of money'. As velocity is a measure of economic activity, velocity increasing is a good thing. It creates jobs in the private sector, due to an increased demand for goods and services which the State does not provide. This in turn creates demand for labour, so wages rise, and therefore living standards increase, creating further demand for goods and services.

So, this tax 'cut' will largely result in increased revenue from other taxes, plus a compound effect of rising wages and increasing demand for goods and services. The result of which may actually result in a net higher tax take, as a direct result of reducing the rate. The Laffer Curve in action.

Wednesday, 4 April 2012

The Falkland Islands

I've been cogitating about this one for a while.

As you may have noticed, Argentina has been agitating about the status of the Falkland Islands for a while now, and on the 30th anniversary of the Falklands War, we appear to be at the nadir of relations for quite some time.

The Falkland Islands

Today, the HMS Dauntless has been despatched to the Falklands on a 'routine patrol', although there doesn't seem to be anything routine about sending the world's most advanced anti-aircraft destroyer to 'show the flag', as it were.

The Argentinian President has continued to attack not only the status of the Falkland Islands, but also the UK generally - 'It is an injustice that in the 21st Century there are still colonial enclaves... 16 colonial enclaves throughout the world - 10 of those belonging to the United Kingdom.'

It got me wondering... precisely what are these 16 'colonial enclaves'?

It turns out that President Kirchner is referring to the UN Special Committee on Decolonization's list of 'non-self-governing territories', which are:
  1. Western Sahara
  2. Anguilla
  3. Bermuda
  4. British Virgin Islands
  5. Cayman Islands
  6. Falkland Islands
  7. Montserrat
  8. St. Helena
  9. Turks and Caicos Islands
  10. US Virgin Islands
  11. Gibraltar
  12. American Samoa
  13. Guam
  14. New Caledonia
  15. Pitcairn
  16. Tokelau
10 of these are indeed administered by the United Kingdom.

However, given President Kirchner's unreserved criticism of 'colonialism', I assume that Argentina will also begin a campaign of diplomatic offensives against New Zealand, France and, of course, the United States?

No? Oh. So, it's just exclusively levelled at the UK, then.

Next, let's have a brief look at what qualifies as a 'non-self-governing territory'. This is basically defined in UN Resolution 1541, but in summary:
  • The area in question is generally regarded as being a former colony;
  • It must be an area whose 'peoples have not yet attained a full measure of self-government';
  • The area must be 'geographically separate and... distinct ethnically and/or culturally from the country administering it';
  • If the area is 'arbitrarily... [placed] in a position or status of subordination', then it is deemed to be a non-self-governing territory.
So, the Falklands.

Are they are former colony? Yes. But no longer - they are an Overseas Territory of the United Kingdom.

Are they geographically separate AND ethnically/culturally distinct? No. They are geographically separate, but they are NOT ethnically/culturally distinct.

Are the Falklands arbitrarily placed in a position or status of subordination? No. Falkland Islanders are classed as British Citizens.

And finally, the issue of self-government.

The UN define an area as having a full measure of self-government through:
  • 'Emergence as a sovereign independent state;
  • Free association with an independent state; or
  • Integration with an independent state'.
The Falkland Islands have their own government, legislature and judicial system, entirely separate from the UK. Indeed, the only matters that are reserved to London are foreign policy and defence.

So, they are definitely not a sovereign independent state, but neither are they integrated with the UK. However, by virtue of their separate democratic political system, their engagement with the UK is one of free association.

They are not a 'colony', as President Kirchner puts it. They are an overseas territory in free association with the UK. I'm not even sure why they're on that UN list.

Needless to say, that UN list has a few conspicuous omissions. Tibet and Chechnya are some that immediately spring to mind. But China and Russia are both on the committee itself.

Odd, that.

So, Argentina's use of the UN decolonization argument is flawed - for a start, the Falklands aren't actually a colony anyway. On top of that, even if they were, the only way they would be 'decolonized' is either by independence, free association or integration. I somehow doubt that the Falkland Islanders would choose either free association or integration with Argentina. The best they could hope for is an independent Falklands, which doesn't tie in with their aims of Argentine sovereignty.

So, if the Falklands are a colony, it's highly unlikely that they would elect to merge with Argentina anyway. Any unilateral occupation by Argentina would be illegal under international law. And if they're not a colony... then what business is it of Argentina's in the first place?

Insurance Companies

Dear Insurance Company,

I am writing to you to let you know that your online protection system, for processing applications, is utterly and contemptibly shite. I have never, in my long years of experience in the financial services industry, come across such a website so completely festooned with wank.

I hereby enumerate the reasons why it is so fucking atrocious:

  1. It is ONLY compatible with Microsoft Internet Explorer. What, are you living in the fucking Dark Ages? Internet Explorer is no longer the only web browser on the planet. It isn't even the most popular one. For fuck's sake, design a website that works with at least Chrome and Firefox. That's just bloody lazy;
  2. It is s... t... u... p... e... n... d... o... u... s... l... y... s... l... o... w. I don't actually want to wait about 30 seconds between pages when I've got about 30-odd to go through. It means a job that should take about half an hour gets stretched out to about an hour and a half. I have better things to do with my time than to stare at your cool, refreshing logo in neutral colours which attempts to calm my mood. IT DOESN'T WORK, I'M FUCKING ANGRY. FIX YOUR BLOODY WEBSITE;
  3. It's unreliable. It continually crashes, pushing me out of the application I am submitting, forcing me to close the WHOLE BROWSER, log in again, find the application and try to resume it, where it has forgotten the changes that I made, despite me clicking on the 'Save & Continue' button. This makes me want to hit your IT Manager in the face. With a brick.
You are a multi-million pound company, employing thousands of people across the country, and I am attempting to introduce business to you which will make you EVEN RICHER. Your half-baked, cretinous website is a direct obstacle to that aim. I can therefore only conclude that you are effectively closed to new business, and will submit the application someone else, UNLESS YOU FUCKING SORT IT RIGHT NOW.

It's not pissing rocket science, you globules of dried smeg. I designed better systems when I was at UNIVERSITY, using fucking NOTEPAD as a PHI editor. Hurry the FUCK UP and get it fixed.

Love and kisses,

TR