Wednesday 19 December 2012

'Welfare Cash Cards' are wrong and will not work.

Yesterday, Alec Shelbrooke MP delivered a 10 minute rule bill to bring in Welfare Cash Cards, for those on benefits, the lovely and brilliant Alexandra Swann then blogged about it, supporting the idea. The problem is, not only do I think this is a roundly un-libertarian proposal (telling others what is best for them?), but I also don't think it will achieve the results set out.

I'll start off with the moral case against it, it doesn't really matter whether this is taxpayers money or not, if someone is given money by the state, and all the boxes are ticked, you don't have a right to say "I know how this person should spend their money, I pay tax". It is similar to the stereotypical middle class mum telling the policeman that she can't be prosecuted because her taxes pay his wages. Why does it matter what people spend their money on as long as they fulfil their end of the contract on benefits (i.e. looking for work)? You have a right to argue that people who break their contract should be sanctioned more strictly, and better checks should be put in place - but as something of a bleeding heart libertarian, I don't see why anyone should say "no enjoyment for you, you're on benefits".

Now, you might reasonably disagree with me on that, but I don't think anyone can refute the idea that this petty moralising of those on benefits just will not work. Being strict on those who lie, cheat or don't bother seems fair, and can be done effectively so as to make it work (though maybe not for as long as government is in charge of welfare - friendly societies were much better at this). Firstly, those addicted to drugs (including alcohol and tobacco) - the key things highlighted that this will prevent - will get their drugs another way. They might resort to some dealing to pay for their habit, they might resort to theft and other crimes, but you can almost guarantee that something else will happen. A black market will open up to transfer Welfare Card payments to ready cash, probably with those doing it taking a tidy sum to pay for their services (making those on benefits poorer in real terms). It's no good saying that the government will ensure this doesn't happen - one look at any government department will show you that this is fantasy. Taxpayer money might therefore, be funnelled directly into the hands of criminal gangs. Another unhappy, unintended consequence of government meddling and moralising. People who take too much in the way of recreational drugs need treatment and help, not sterner controls imposed by the state, forcing them further into the criminal world.

There's another point that is missed - most jobs are not advertised, roughly 70% are in the "hidden" jobs market, a huge number of these at all ends of the spectrum are gained through networking, often involving alcohol. Labourers find work chatting to others in the pub, perhaps people they've worked with before, perhaps not. Many self-employed people find work through this process as well. If they have a brief troubled patch, being forced onto income support, would you not want them to find work as soon as possible where they know to get it, or does moralising mean more than the result? The same for those at the top, meeting in a pub or bar might be what gets them the job, just the familiarity from a previous encounter might make the difference. If these people are prevented for engaging in the normal process of networking, or otherwise forced to find a way of trading their Cash Cards for actual cash (losing out some in the process), what has been achieved? There's bound to be many other goods deemed to be "unnecessary" that might well get people into work/to be come fit or whatever else in this system. How does the government know what is best in these circumstances? How can it?

There's another gaping hole in the practical considerations. What of going to the local corner shop to buy necessary goods? Does the corner shop need a licence to process the card? How much will this mass of bureaucracy cost the taxpayer? Small, local shops and businesses will likely be hit much harder applying for licences or whatever else, further damaging the private sector.

This is nothing other than government meddling, tackling a symptom of various problems instead of the diseases of drug prohibition, high taxes on tobacco and alcohol, a poor economic climate and an otherwise lax benefits system. This will fix nothing but it will cause an awful lot of hardship, both in increasing crime and general awkwardness put on those on benefits who want to get back into the economy. This will help nothing but the consciences of the right-wing self-righteous, whilst it will do real damage all over the country, likely doing hard in various parts of our economy. It is stupid and small minded, I sincerely hope it goes nowhere.

Friday 12 October 2012

Nobel Peace Prize has been a joke for decades.

The Nobel Peace Prize for 2012 has, in the last hour, been awarded to the EU. For um, there not being war within EU countries since WWII. Of course, that has nothing to do with cold war geopolitics (and thus people being rather reluctant to go to war with USSR). Or Western Europe being generally pretty rich (lots to lose from war), like North America or most of East Asia today (other areas with little conflict since 60s about the time the EU was former). The Treaty of Rome, establishing the EU, in 1958 came some 13 years after WWII, and yet there was no major war. To claim that the EU was what caused peace since them seems rather bizarre, given this. Given the Balkans, where the EU at best stood back, at worst help generate tension, and the current strife in Greece and elsewhere within the EU, and EU support for dodgy groups worldwide; I see plenty of reasons why the EU definitely should not have won the award.

Most people understand that this is a complete joke of an award, but few people realise that the Nobel Peace Prize has been a joke regularly - going back decades. One of last years' winners Leymah Gbowee, stood for re-election even though initially promising not to, and has been involved in corruption scandals. Perhaps minor on the face of it, and happened after the award, but still something to consider. Then there's Barack "Drone Strike" Obama, who had done nothing but make one speech on reducing the number of nuclear arms worldwide, to win the 2010 prize - having been nominated, in fact, before he made the speech. He did nothing to earn the prize, and has done much since to discredit the award.

The recent trend may strongly suggest a right-on, left-liberal sentiment to the awards, especially when you consider Al Gore and the IPCC jointly won the award in 2007. Despite global warming not having a great deal to do with peace and despite Al Gore being Vice-President when Clinton was bombing Sudan etc. without the authority of Congress. De Klerk won in 1993 - whilst I understand the reconciliation needed, it is still quite sickening to see him win the award. In 1988 the award went to UN Peacekeeping Forces. Apparently soldiers who fought in the Korean war are peaceful. There are lots of others where the award seems dodgy, like the ILO in 1969, but perhaps the worst of all, was the 1973 award to Henry Kissenger, who played a key role in illegally bombing Cambodia, the 1970 incursion into Cambodia, leading to the Cambodian civil war and napalm bombing campaigns across Vietnam (as well as the deliberate flooding of land). Kissenger was given the award alongside Le Duc Tho for bringing peace to Vietnam. Le Duc Tho refused the award on the basis that there was no peace in South Vietnam. This view was proved correct, given that South Vietnam no longer exists.

The Nobel Peace Prize has long been a joke - the trend however, seems to be one of increasing ridiculousness. Just like the Economics prize.

Thursday 11 October 2012

Unpopular Politicians Liable to Fall

Following up on yesterday's post, I think there is potential for a few more fluctuations in the coming debates. Tonight's VP debate is probably not going to make that much impact initially (with Ryan likely to win), however, Ryan could easily give Obama some ammunition for further debates. As I said yesterday, Romney is highly unpopular. If Obama gets some "big hits", he could easily get a big swing back his way. The problem is, nobody trusts either candidate, and either, with a few fluffed lines, could throw it all away because of this. You can afford to look like an idiot, get stuck on a zipline and so on if people think you are honest and on their side. If however, they truly see you as a liar, a fraud who has wrecked the economy, gone back on promises, or simply don't have a policy platform at all, then your support base is going to be weak. Polls are prone to move.

What we see right now, is growing disdain, both in Britain and America (and other "western" nations - including Japan) for the political class. We have Ed & Ed, who were at the heart of Brown's financial failures on the one hand, and Cameron, who has time and again gone back on election pledges. Both are still in the 30-45% region in the polls (out of those intending to vote) - but a large segment of that amount, in each case, is soft support. A vote only when it comes down to it. This group is ripe for conversion to a new party, be it the Libertarians in the US or UKIP (and formerly the Lib Dems) in the UK - remember Cleggmania? 23% is what the Liberal Democrats got in the last election. They currently poll at around 8%, even though they are usually prompted. That leaves 15% moving elsewhere. Add to that the fact that turnout was only 65.1% and you see that, actually, there is huge room for a major shift in political alignment. Looking closer, many Labour strongholds only had 50% or lower turnout. Given that UKIP tend to do well in these areas (winning the 2009 European elections in Hull for example) - winning seats in 2015 in these areas is definitely possible, it is a matter of getting people to vote, showing that there is a party that will respond to their concerns. If Labour can lose 'safe' seats through higher turnout, then perhaps 2015 is not as easy to predict as people think. Just like the US Presidential election is still uncertain.

If the population - largely disenfranchised with the typical political options - is passively looking for an alternative, then the establishment should be a lot more scared than they currently are. If a real alternative can present itself, then it might suddenly be something other than an alternative. Those wishing to be the alternatives better get ready for when they are given the spotlight - one by election victory, one big performance somewhere, might just be enough. When the voters look to you, you need to be ready with a plan to take charge.

Wednesday 10 October 2012

US Presidential Debate and Polling - why the big shift?

In the recent US presidential debate (where the Green and Libertarian candidates were excluded, even though they are on enough state ballots to win), Romney came out on top. This happened to surprise many, and I don't really know why. yes, Romney wasn't the best in many of the Republican debates, but he appeared to win a few of them. More crucially though, Obama, really, has no leg to stand on, anywhere. Nothing he has done has worked, Obamacare (and more crucially the personal mandate) is a disgrace, and this is basically all he has done. The economy is in tatters (Obama said he would not serve a second term if he didn't fix it, yet he still stands). Unemployment is excruciatingly high, and underemployment is still higher. U6 (the unemployment measure that includes these underemployed), is 14.7%, and did not move when the recent "increase in jobs" was announced. People are taking part-time, often short-term jobs when they really need full-time jobs. The economy is nowhere near fixed, and Americans know it - 14.7% are out of full-time work.

So it was quite possible that Obama would lose in the debates, that is fairly easy to understand, especially as he hasn't faced a debate opponent in this format since 2008, Romney has. What people are trying to figure out is why, after the debate, Obama's lead in the polls disappeared. It is unfathomable to many that such a lead would disappear so quickly. As has been rightly pointed out, such a large move, this close to the election, is unprecedented. I am not at all surprised. Why? Because something the political commentators keep mentioning but still overlook. Nobody likes either candidate. One is a proven failure, the other nobody likes. The main reasons that supporters seem to have is that their candidate is not the other guy. A major part of this election revolves around Big Bird, showing just how close the two candidates are on actual policy. The reason the polls shifted so quickly was that, both candidates have a large amount of soft support. Whilst they might have a solid base of say 20%, most of the US electorate would like a different set of choices. One of my US friends (a registered Democrat), hates Obama and the personal mandate that is his only real success. Yet, despite this, he still finds Obama preferable to Romney. Nobody likes either candidate, people are ready to jump to another candidate very quickly - and this is why the polls have shifted so much.

This is why, getting Gary Johnson and the Green candidate into the next presidential debate is still important. If a 10% swing can occur in one debate, it can happen in the next, and with a real alternative, it might make a big difference. This is quite possibly what the establishment are so scared of - a real alternative might prove to be hugely popular if given the chance.

The same is true of the UK - most polling companies still include UKIP in the "other" category, often unprompted on phone polls, yet they are currently above the Lib Dems in many of these, or at least in the same region. It is about time that both American and British politics was opened up a bit.

Tuesday 25 September 2012

Masters of Money - Hayek

If you ever trawled through my old blog posts (not recommended), then you would not BBC bias being something that frequently comes up. But I was pleasantly surprised last night watching the second episode of Masters of Money by Stephanie Flanders. This episode, based on Hayek, did miss out quite a few details which I think I would have got in, was fair to him. It gives credit to him having predicted the Great Depression and it suggests that his followers predicted the current one (although not making it too obvious).

Hayek's concept of the Fatal Conceit was explained fairly, as was the complication of the market, although the price mechanism explanation was rushed through, meaning that the viewer wouldn't understand the point unless they were already aware of it. The program was also fair when it came to government interventions in the market, and their distorting effects, with money being singled out both by Hayek and by Flanders as the most important. It was great to see. Seeing Ron Paul being listened to without derision or spin on the BBC was marvellous. OUtlining the differences between Hayek and Friedman was also great to see, as the left usually lumps all right-wingers together.I hope to see more like this in the future.

There were of course some typical howlers, like declaring Bush to be a free marketeer (the state growing in size and increasing tariffs are somewhat different to free market positions). Hayek was also described as the most extreme free marketeer, something clearly not true. Rothbard, anyone? The lack of any mention of Mises and the fact that Hayek was a socialist until he read Mises' work as possibly the most disappointing part of the program. The program also resorted to talking to both Mervyn King and Paul Krugman, possibly two of the least useful people to talk to with regards to Hayek and Austrian economics - Krugman probably being the worst economist for mis-characterising the school. Krugman talked about the nineteenth century US as if it was in a state of free banking in an attempt to refute Hayek. Of course Krugman is completely wrong here, with both the First and Second Banks of the US (government chartered quasi-central banks) playing their part early on, government green-backs during the civil war era, the ban on branch banking, and many, many other examples utterly destroying his point. Whilst examples of successful, stable free banking periods abound (Canada during this same period into the twentieth century being a prime example).

Ignoring Krugman, we did get an admission from Merv that economic models are often quite badly wrong. He, and the makers of the program didn't quite connect up the dots on this one for current circumstances, neither were the dots connected for modern QE and Austro-Hungarian money printing (in both cases to buy government bonds).

Overall, there was plenty wrong with the program, but by BBC standards it was pretty fair, and it was a surprise that it was even broadcast in between the Keynes and Marx sessions of the series. I hope to see more like it in the future, perhaps with more in-depth explanation of problems. However, for now, I'll brace myself for Marx next week.

Tuesday 4 September 2012

The Reshuffle is Pointless

As Dan Hannan points out (seemingly doing his usual, one awful post, one great post routine), the reshuffle will really offer no difference either to the coalition or the government as a whole, the mandarins in Whitehall and Brussels still call the shots. Why is there so much coverage? Well, it's easier for the media to talk about differences in the cabinet, and it is easy to follow, unlike the opaque bureaucracies already mentioned.

Even if the changes could make a difference, the pathetic nature of the changes made by Cameron show why nothing will really change under him, whether in coalition, minority or majority government. Osborne is still in a job - having failed to do anything useful except nudge pension reform slightly in the right direction (but nowhere near enough to combat the eventual collapse). He is too weak, and not enough of an ideas man to take anything like flat-tax proposals or closing departments forward. The backbenches have excellent people like Steve Baker and Douglas Carswell who could perform the role, but there are many less controversial ones who could actually sort a few things out. Jeremy Browne could have been an outside bet, and would have thrown the LibDems a hefty bone.

Of course, the LibDems would need some good news to compensate for throwing Cable out, or giving him a non-position like Clarke or Warsi (who are both only kept in to appease certain groups, everyone knows they are both liabilities). However, Cable stays at BIS, red tape will not be cut, the EU will not be challenged and we will continue to lose our global economic standing.

Next up on the list of useless choices is Hunt. He was in a fairly pointless position before (why do we need a 'Culture Secretary'?), and given that we didn't just scrap the department, why didn't he just stay where he couldn't screw up anything serious? Now we have a health secretary who believes in homoeopathy. Given that the Conservatives are generally not trusted by the health lobbies and unions, why did Cameron give them such an easy target? How will that help push through vital reforms (let alone the cuts that really should, but will not occur).

There is one ray of light amongst all this, Owen Paterson. He is apparently supportive of shale gas and sceptical of AGW. Excellent, but can he really do anything to stop the mandarins, Brussels and the rest of his cabinet pushing through more subsidies, wind farms and other tripe? I reckon he is just a sop to "the right" to quieten them down. It might work for a week or two, but once it becomes obvious that there will be no change, the backbenches will be as "rebellious" as ever.

There was never any real change during the reshuffles of the Labour years, there was very little difference when the coalition came in and there will be very little difference from this reshuffle. The same steady decline, weak leadership and the various economic cans being kicked down the road.

Wednesday 15 August 2012

Virgin, First and Rail Contracts

So, in the news today is that First have won a bid for running the West Coast mainline service, beating the incumbent Virgin bid, offering a great deal more for the service. The government has chosen, apparently, wholly on the big number, says Branson and he may be right. The difference between the two bids is largely on that number, as without altering the track, I see little ability to improve the service other than with lower fares.

Now, Virgin may be able to deliver and I hope they do, the better the train lines are, the better my transport around the country is likely to be (as an aside I have used the Virgin service on a number of occasions between Birmingham and London, and it is not too bad). However, I doubt that First can offer a great deal better service without new lines. This is the problem, the lines, the actual track is owned by the government and the contracts are awarded by the government (as has happened with this case). The reason the free market works so well for consumers is because those same consumers make a choice between different providers. When the government selects bids, they do not what is best for the end user, but for the government (in the short term) - so the size of the bid, hence why some companies collapse trying to offer the sort of bids they need to make to please the government. Alternate systems of rail travel are impossible, nobody can build a 7 foot gauge track like Brunel did, which can offer faster service with wider trains, the government will not allow it.

When our rail network was built initially, it was private, it was constantly expanding (apart from the war years where it was brought into government service), the London Underground was too, being the track of several companies competing to offer services for London. Whilst some companies over-expanded and collapsed, others kept going - there was a strong market and the customers were the winners. Now we have a system that is part-privatised. There is some competition, but for most people there is a monopoly of the places they go between, there is crucially only one set of tracks for each route. If you want to go by train, you have to use whatever battered old thing draws into the station. There have undoubtedly been huge improvements since the railways were "privatised"; the small improvements and efficiencies brought in through the prospect of bankruptcy to the private providers helped to stop the terminal decline in our rail network. When the "privatisation" occured, the decline in passenger numbers finally stopped and indeed reversed. But we still have a nationalised rail system, and as such government contracting.

The part privatisation of the railways under Thatcher was just that, a part-job, incomplete and in my personal opinion, a bit pathetic. The track itself needs to be sold off, and permission given for private companies to build new lines, whether they are "High-Speed" or otherwise. This means that investment in infrastructure can finally occur, and the improvements to the transport system, a hallmark of 19th century Britain, can happen again. Instead of mis-diagnosing the problems as those of "privatisation" with ridiculous rose-tinted glasses looking back upon the nightmarish nationalised system, we should get government out of the way finally. The failures of Thatcher's privatisations can be brought down to not being bold enough. Whilst I seriously doubt my internet connection would be as fast without Thatcher, I think it should be a lot faster - this is easily achievable. We need to finally privatise what remains of our utilities, ignore the "natural monopoly" claptrap and allow competition to rid the monopolies of their status.