Sunday, November 23, 2008

One Day...

I shall have a dining table free from Labour leaflets and Charles Clarke letters, sadly, that day is not today.

Saturday, November 22, 2008

A Lie That Should not Stand

One piece of propoganda the Tories like to put out is about the massive national debt we have as a result of Gordon Brown's irresponsible spending. This is wrong, the Tories are lying.

In a list of the countries with the largest national debt, Britain does not feature in the top 10, it does not even make the top 20. Britain is 50th*, behind many other nations. What is worrying is that so many people seem to believe the Tories lies, this is something we quite simply should not leave unchallenged.

* I realise that some people may want to bring up PFI, Network rail and Public Sector pensions so... PFI and Network Rail between them are only around 2-3% points between them, this is around 10 places in the rankings. Public sector pension deficits are a universal problem and not especially relevant .

Thursday, November 20, 2008

The Taxpayer's Alliance

I've held a dislike for the Frothing Mad Anti Tax Anarcho Capitalist Libertarian Alliance for a very long time. So I'm very glad to see that someone's actually set up a Taxpayers Alliance site that holds them to account.

Let's spread the word and boost these good people up the Google rankings.

Hat Tip: Labour and Capital by way of Adam Lent

Tuesday, November 18, 2008

The Conservatives and the Great Depression

I'm currently making my way through The Great Crash by JK Galbraith (it's a good read and contains some very intersting historical paralells), I'm currently up to the section discussing what exactly turned the crash into a depression. One conclusion Galbraith makes is that the policy prescriptions pursued by both the Democrats and the Republicans were the wrong ones, balanced budgets, controlling inflation and economic stimulus primarily through monetary not fiscal policy.

On balanced budgets he stated that the idea of keeping a balanced budget was simply not suited to the complex problems the economy was encountering and was essentially applying a simple logic you might apply to a household nudget to a complex macroeconomic problem was a serious mistake.

On control of inflation he said that a desire to keep it in check was obsessing over memories of bad experiences from the past.

On monetary policy he said something along the lines of "Monetary policy is a thin reed with which to prop up the economy".

So, with that in mind it's good to see one party stand up for traditional solutions, blindly sticking to the same policies that followed the great market crash of 1929 and lead to the great depression. That party, is of course, David Cameron's Conservatives.

Monday, November 17, 2008

A Response...

I wrote a response to a chap called Hugo in this earlier thread criticising a the letter those top economists wrote, I put a fair bit of effort into it, so I thought I'd make a post out of it. To summarize I suggested that public works would actually be an effective way to boost the economy and that the private sector would simply adapt itself to that spending. I was challenged on the point of opportunity cost, that this spending would be at the expense of some indeterminite private sector economic activity. I was also challenged on the point that if the state intervene's in the economy it is no longer free.

First, your point on "free" economies. Even in a what might be termed a "free" economy there are government interventions, taxation is determined by arbitary government choices, interest rates are also set by state bodies it's almost impossible to have a proper free economy 100% free from state directon. We'll always be stuck in a middle ground of some sort.

On your next point the government is an economic actor like any other, but as an actor it has both disadvantages and advantages. It has access to resources on a much greater scale than most private entepreneurs and also is much better at building up an overall picture of the economy. It is also far less risk averse than private entepreneurs and able to consider social externalities beyond the simple profit motive.

I don't accept the conclusions of the writersof the letter because I simply don't accept that leaving decisions to the private individuals is the best way (perfect information, time delays etc), a large number of risk averse investors got their fingers burned on sub prime mortgages because as individuals they failed to realise the big picture, there is a serious opportunity cost to those decisions.

As far as the correllation between state involvement and economic growth, I don't believe there is one. Private property rights and personal economic freedom are, I believe, essentials but beyond that state involvement is of little consequence. To make this clear the best performing advanced economies between 1950 and 1980 were (per capita income growth in brackets) : 1) Japan (6.0%), 2) Austria (3.9%), 3) West Germany (3.8%), 4) Italy (3.7%), 5) Finland (3.6%), 6) Norway (3.4%), 7) France (3.2%)

Of those, Austria, Finland, Norway, Italy and France had very large state owned industry sectors in the industrialized world. Japan and Germany also followed very active industrial policies. Correlation may not imply causation, but we would appear to be 7 for 7 for state involvement, it's a powerful pattern. Investment in public works us unlikely to have any great opportunity cost.

As a final note, it pains me to see how often a preference for right wing ideology is taken as a sign of economic literacy. It seems that sometimes the only qualification for being a professional economist is a tendancy to repeat right wing ideological dogma.

Edit: Added brief summary of the initial argument to the first paragraph.

Wednesday, November 05, 2008

The Inevitable "Yes We Can" Post

Not surprisingly, I'm really quite happy about the result of the US election and I'm really quite optimistic about the next few years of US politics. Some people might be a little down on cliche's, personally I think it heralds a new era of US politics, a true turning point in history, a shift in the ideological tetonic plates, a triumph of good versus evil and a tribute to one of the best run campaigns in the history of democratic politics.

I think it's also worth paying tribute to all those Labour bag carriers who crossed the pond to campaign for Obama and suggesting that this victory also vindicates many of the ideas contained within "The Political Brain".

To those already exercising their cynical muscles (Chicken Yoghurt comes to mind), I'd say disappointment is a fact of life in politics but I'd have taken a disappointing Al Gore government over a George W Bush without hesitation.

Finally, I very much liked this comment from mike over on the Chicken Yoghurt post.

i like the part where john mccain lost.

Tuesday, November 04, 2008

Post Pub, Post Porter

I went to the pub, I game back, then I read some drivel by Henry Porter. It made me angry...

Following Gordon Brown's admission that the government could not guarantee the security of personal data, David Davis concluded on Comment is Free this week that far from protecting us from identity theft 'the grandiose projects of the British state may prove to be its greatest facilitator."

This is right, and Davis's message should be understood by far more MPs than is currently the case. He is one of the few in Parliament who has grasped the nature of the threat and the speed at which it approaches us.

Yet it is not just security breaches and lapses that we have to worry about. The government is clearly committed to a course of selling our personal data to cover its costs and in some cases, like the ID card's National Identity Register, a big commercial operation is envisaged.

So, David Davis "concluded" this did he, how exactly? Did he take us through each example of vunerable data, explain what data was exposed and the potential for abuse of that data. Does he have an understanding of what systems and checks the data could be used to bypass and what techniques might be used? Unlike Messers Porter and Davis I have spent the last 8 years working in IT, dealing with consumer data on a pretty regular basis and I would quite confidently say that the sentence "the grandiose projects of the British state may prove to be its greatest facilitator" is pure unadulterated bull drawn up by someone with no understanding of the actual issues involved.

The model for this activity is seen at the DVLA, which sells details of vehicles and drivers for a fee of between £2.50 and £5. For £3,000 a "reputable user" – in other words, a supermarket or security firm - can buy a link to the DVLA database although they still pay the same fee for driver's details on top of that.

Although the DVLA insists that it is not a making a profit on the 1.64 million sales per annum, which is hard to believe, the fact remains that a government agency is selling information about us to third parties who may have rather doubtful motives – like the Parking Eye company which sent an £80 penalty notice to a driver who broke her late night journey on the M6 to take a nap in her car at Lymm services rather than continue and fall asleep at the wheel.

Some people might suggest that people who operate car parks or have areas of land that be subject to illegal parking by motorists might actually have a need for this data, so that they can get in touch with illegally parked motorists. Like most systems, potential for abuse exists, but the flipside of the coin is the idea that people can park where they like and the drivers have absolute right to anonymity. This is just the usual Porter trick of pointing to a single instance of abuse for a generally sensible law.

But is not just the DVLA. In the summer the police admitted that samples from the national DNA database had been used for unspecified research. How much money changed hands, and what was the purpose of the research, are not known but this is the clearest indication that once the state acquires information – and here we are talking about the biological essence of thousands of people – it comes to think of it as its own, to do with it what it likes.

Another bit of bull, does Henry know if there is actually any danger from this, does he know anything of what can be gleaned from this DNA data. Does he know if the data was anonymous or not? It could be a dangerous story, but that depends on a number of factors.

The vast databases that are being hastily built before the public realises what it is losing represent an enormous commercial prize. The only people who will not benefit from the sale of our information are us, even though we will be supplying it – often under duress – to the government. We'll be soon be in the ridiculous position of giving up every important piece of information about ourselves, together with the right of access to that information, while commercial enterprise will purchase access for their own gain. It is a stark reminder how rapidly the relationship between state and individual has changed in the last decade.

Who owns our personal information, what use they make of it, and what access the public should be allowed to its own data – to correct and formally withdraw it from the database - are issues which are hardly ever discussed by Davis's colleagues, who unthinkingly go along with the idea that possession is ninth-tenths of the law.

Last time I checked, these databases were being very slowly and carefully assembled, the National Identity Register has taken a long time (first consultation was in 2002) and a lot of studies and no one has been issued with a single card yet. One example he cites is absolutely harmless, the other he just hints at vague possibilities of abuse with little concrete proof of anything.

But there is another route, which starts with each one of us declaring that our personal information is precisely that. It belongs to us and we should have control over it, wherever possible. What we need, but hear little suggestion of in Parliament, is a privacy law that entrenches these rights in the environment of a new Bill of Rights. For if there is one clear message to absorb about current situation in which the state plunders what it likes from our personal lives it is that the section that guarantees privacy in the Human Rights Act is a complete joke, and has in fact been the context in which this gross attack on all our privacy has taken place.

What a wonderful idea, let's give it a try...

To anyone who knows my name and address, I demand you forget it this instant, IT'S MY PERSONAL DATA!

If you know my birthday, forget it IT'S MINE AND MINE ALONE!

As a final little twist, when I copied the original article at the bottom were the words "Your IP will be logged":)