Good things here

If you want to read good arguments about the morality of capitalism (let's face it, the only political system that spreads wealth fairly widely) then you might like to have a look at this book. The Morality of Capitalism is free to download and my friend Tom Palmer (another cat-lover) wrote the introduction as well as a couple of chapters.

Celebrities talk utter rot - shock

The celebs are on the warpath again and, as ever, have managed to bamboozle a few people. It's as if a stupid idea becomes less stupid if it is articulated by the likes of Dame Judi Dench (a wonderful actress but hardly a thinker) or Sir Ranulph Fiennes (also not a thinker). And, as far as this blog is concerned, anything that the ArchDruid, Dr Rowan Williams supports is ipso facto suspect. (Ha! Didn't expect that, did you?)

The matter in hand is the government's proposal to sell Britain's forests or, to be quite precise, those that belong and are administered by the ineffable quango the Forestry Commission with a bit of interference from other ministries and regulatory bodies, to private individuals, organizations, companies and, if it is right, voluntary bodies. Shock, horror! Anyone would think that the total devastation of ancient hunting forests has been proposed.

As Eamonn Butler says in today's ASI blog:

From the sound of it, you might think that Britain's forests are going to be sold off to keep Rupert Murdoch in paper, or maybe concreted over for car parking. Hardly. State forestry is a mess, and private ownership will revitalize it, and will actually extend the public amenity that our forests afford us. Private owners are actually more likely to encourage public access than the Commission has been – they can see more commercial potential in doing precisely that.

The Forestry Commission already plans to sell small bits of its forest estate, which will earn taxpayers a useful £100m. The question mooted by the government today is whether it should sell the whole lot. That's actually no really big deal. The Commission owns only a fifth of England's forest land. Most of the rest, about 68%, is already in private hands. (Various government departments, like Defence, own other bits too.) Many of the celebs who are saying how much they love forests could well be thinking about ones that are already private.

And private forestry is already heavily regulated in terms of the owners' obligations to the protection of nature, logging schedules, public access, and development. Thos protections would remain, even if the whole estate were sold. And indeed there would be extra protections for ancient woodlands like the Dean, New, and Sherwood forests. As in New Zealand and other countries, there could be a mixture of commercial, non-profit, community and mixed ownership.

In a previous blog Dr Butler referred to the various celebs who had signed a sobbing letter to the Sunday Telegraph as being "thick as two short planks" an obvious but still accurate description. Furthermore, he gives very good reasons why we should not assume that the celebs in question actually know what they are talking about. In this blog's opinion, a period of silence from all of them starting with His Bloviation, Dr Williams, would be very welcome.

"Keynesian economics is wrong"

Another video from those talented people in the Center for Freedom and Prosperity. It is economic growth, they say, that causes consumer spending not the other way round. Makes sense to me.

Let them go bankrupt

Well, OK, Michael Barone is talking about states like California but his arguments can be applies, mutatis mutandis, to other political entities.

Somebody is saying it

Inevitably it is the Adam Smith Institute that is saying the obvious: cuts do not help until there is some discussion on what the government should or should not do.

Closing quangos or primary care trusts and transferring their work to departments and doctors’ practices respectively will achieve nothing unless the work itself is also eliminated. A dead giveaway is the phrase “working with”. The people being worked with may well be grateful not to be worked with. The Eastern Strategic Health Authority claims to “work with” 46 other NHS bodies.

Rolling back government should be about reducing what government does first and worrying about headcount and savings second.

However, the somewhat laboured metaphor of the three brown envelopes and new management in some private firm or other is too long and not entirely accurate. In fact, one cannot help wondering how much experience Tim Ambler has had in the business part of the private sector.

But I especially disagree with this fatuous comment:

The leaders of the Coalition are exceptionally bright and talented but, Ken Clark aside, have little relevant experience from commerce or government.

Just what evidence is there that they are exceptionally bright and talented if they have no experience in anything of any importance?

Not directly applicable but interesting

The Cato Institute's Director of Tax Policy Studies has produced a plan that would cut spending and balance the federal budget. At its heart is a concept that is lacking in our own government's blunderings and that is downsizing government. Before you cut or abolish you should think through what the government ought to be doing (very little) and what should be done by others (a good deal) or nobody at all (even more).

Cut spending? Surely not

Apparently, it can be done if we are to believe Dan Mitchell of Cato Institute in this excellent video.

Heh, told you so!

It is so much fun to be able to say to people: heh, told you so. There is quite a lot of it going on at the moment certainly for me and probably for the Boss over on EUReferendum. In particular, there is a great deal of whining and gnashing of teeth about the Cleggeron Coalition and the un-Conservative, nay, socialistic tendencies of the Boy-King. Well, heh, told you so. Over and over again, we told you so.

For all of that, it is good to have Jeff Randall on side. Nobody can accuse him of ever supporting the Labour government or its Chancellors. Indeed, he was the first to go into battle over Gordon Brown, possibly the most disastrous Chancellor of the Exchequer this country has ever had (other candidates' merits will be considered), raiding the private pension funds.

Yet he is saying the unsayable but obvious: "The Coalition is spending even more than tax-and-waste Labour".

Given the scale of opposition to the Chancellor's surgery, even though he has not yet released the full details, a curious bystander might be forgiven for thinking that many billions are going to disappear from the bottom line of state expenditure. Like one of Todd's victims, the final bill for taxpayers is about to be dismembered in a grisly fashion.

This is what happens when the state is shrunk, right? Er, not quite. In fact, not at all. In terms of cash flowing out of the Treasury's coffers, there is no evidence of cutting back. Total government outlay is set to go up this year, next year and every year thereafter to 2014-15.

According to estimates from the Office for Budget Responsibility, the figures will be £696 billion in 2010-11 (up from £669 billion in 2009-10), then £699 billion, £711 billion, £722 billion and £737 billion. These sums are not inflation-adjusted, but even so, they belie the idea that a demon barber is about to "polish off" the Budget and stuff its remains into one of Mrs Lovett's delicious meat pies.

Well, well. And even, ahem. Mr Randall then discusses the terrible debt this country faces, which is not the government's debt but ours since the government's money is our money. Somehow, one cannot trust a government that has ring-fenced the NHS and international aid while drivelling about building a Big Society, to be able to cope with that.

This has to be asked

What exactly is the difference of enforced lending to small businesses whether the banks think they are credit-worthy or not, as demanded by our (unelected) Business Secretary, Vince Cable, and sub-prime mortgages, also forced on companies by legislation? Remind me: how did that pan out?

Economics for non-economists

Yesterday I went to the launch of a new book by Madsen Pirie of the Adam Smith Institute, called Understanding Economics and subtitled Economics for non-economists. Dr Pirie maintains that economics is an intuitive discipline and depends largely on people understanding their own and others' actions and desires. The aim of his book is to explain the basic principles to all of us and not just those whose brains have been somewhat befuddled by academic economists.

The chapters I read on my way home yesterday deal with trade and its beneficial effect on all those who participate in it. As this happens to be something I more or less understand and more than agree with, I can testify to those chapters being clear and persuasive. I may, later on, take issue with Dr Pirie's apparent assumption that people will always make a rational decision to improve their performance and productivity. History is littered with examples of people, for instance the peasants of Russia, who, offered ideas and assistance to improve their productivity, refused to do so, continued with their inadequate methods and nursed resentment against those who did better. I shall see how Dr Pirie deals with that problem. In the meantime, I do recommend the book - it is clearly written and assumes an intelligent but not specialist reader.

The launch took place in St Stephen's Club, the favourite grazing place of all conservatives and the garden space was shared (and separated by a niftily tied rope) with the Conservative Way Forward's summer party where Lady Thatcher was the guest of honour. Would she have preferred the ASI launch, one wonders.

Happy Birthday, Bastiat

IPN (International Policy Network), a think-tank whose work I much admire (see, I can be nice about some people but they have to deserve it) calls attention to the fact that today is the 209th birthday of Frederic Bastiat, one of the most brilliant opponents of protectionism. In fact, let us go further and admit that the man was one of the greatest political economists. Oh, and by the way, he was French.

The Chicago way in the White House

Barack Obama, though an outsider, took to the Chicago way like duck to water. He rose through it and used it to trounce all opponents including Hillary Clinton. Then he brought it to the White House. But, asks Michael Barone, who will pay for it?

Living, as we do, in a country where politicians just assume that however hard they hit the wealth-making private sector, there will always be enough money to keep them in office though evidence shows the contrary, we may find it difficult to understand that this is a relatively new idea to Americans.

That deficit

While the political world is convulsed by the most exciting bit of news since Oliver Cromwell disbanded the Long Parliament that had sat too long, namely Gordon Brown saying one thing to a potential voter's face and muttering something else about her once he turned away, I have been sent an interesting summary of what sort of figures we are talking about if we really do want the deficit to shrink.

This comes from Ian Milne, Director of Global Britain, erstwhile editor of eurofacts, and a man who seems to understand millions and billions the way most of us understand tens and hundreds of pounds sterling.

• Four months ago, in January 2010, Global Britain (in Briefing Note No 57: How Much Should Public Spending Shrink ?) estimated that, in order to return UK public finances to sustainability, public spending needed to shrink immediately by £ 100 billion a year compared to its level in 2009/2010.

• Other serious commentators (e.g. Roger Bootle, Trevor Kavanagh) have also come up with that £ 100 billion figure for the level of shrinkage (perhaps combined with increases in taxes) needed. Damien Reece, in his article on the Institute for Fiscal Studies report in the Telegraph’s Business Section of 28th April, plumps for £ 70 billion per year as the “need for a national belt-tightening”.

• As we know, the three main parties are arguing about “savings” (most of them spurious) or tax increases in single-figure billions, for example (Labour) by increasing National Insurance contributions. We have no idea how the three main parties would achieve reductions of the order of magnitude needed - and probably neither do they.

• Given the already high level of UK taxes – 48 % of GDP in 2009/10 – the argument that even higher taxes will damage economic growth is compelling. Yet, all three main parties seem to think that taxes need to rise.

• UKIP is the only party to demonstrate how savings of those magnitudes (from £ 70 billion per year upwards) can be permanently achieved without increasing taxes: by leaving the EU & freeing the UK economy from its £ 120 billion per year EU-caused burden.

• The UKIP plan would not be realisable instantaneously, since leaving the EU, then unravelling the huge amount of EU-derived legislation & regulation embedded in UK law, would take time: at least two years, perhaps four.

• So in practice, on coming to power, a UKIP government would immediately have to implement public spending cuts of the order of £ 100 billion per year, probably for the first two years of its term. Thereafter, as the savings from leaving the EU began to flow through, there would be room to invest in expanding the armed forces, rebuilding our power stations & restoring & increasing our transport networks as set out in UKIP’s manifesto.

Let me make it quite clear: I claim no credit for any of the calculations. They are Mr Milne's but I thought readers of this blog would be interested in them.

He is back

That eminent economist, Professor Tim Congdon, has had a complicated relationship with UKIP. Most people do. Back in 2007 he left the Conservative Party with flags flying and drums drumming and joined UKIP, explaining in an article in the Daily Telegraph about all the many things he disliked about the new Cameroonie Conservatives.

Subsequently, there were stories of him being embarrassed by UKIP and rumours (well, one rumour in the Independent) of him rejoining the Conservative Party. Personally, I never believed that last story as Professor Congdon does not make a secret of his political views and he did not mention even once that he had seen the light and it shone out of the Boy-King. [Re-reading that post I notice that I quoted Iain Dale as suggesting that Malcolm Pearson will follow Tim Congdon back to the Conservative Party. I disagreed with Mr Dale on the subject of Lord Pearson, and, hey presto, I turned out to be right. Thank you, thank you.]

Whatever may have happened last year, the news is that Professor Congdon is securely in the UKIP fold: he is the PPC for The Royal Forest of Dean and, presumably, the preferred economic spokesman for the party. (I certainly hope so, given some of the nutty economic ideas I heard at the conference.) He explains his views and reasons on the UKIP website. I'd like to think that this time round the Tories are not going to screech about him being a back number or completely barmy but I suspect that they have learnt nothing.

Things are worse than we thought

One would not think that possible either about the situation in this country or across the Pond but things can always get worse.

Glenn Reynolds is temporarily not one of my favourite bloggers (though I still check his site several times a day) because he has linked to two very positive accounts of that fringe meeting in Brighton and keeps talking of Daniel Hannan MEP as the leader of a potential tea party movement. Oscar Wilde said that the England and America were two nations divided by the same language and that is certainly true for political language: just because we call something by the same name it does not mean that it is the same.

For all of that I shall be relying on Instapundit for news, links and information. So I was somewhat amused to find this on the site, which linked to the story: Soros criticizes Obama's bail-outs. Oh yes? Well, one can't exactly say that if President Obama has lost George Soros he has lost middle America but he has certainly lost much of the left.

Mind you, his suggestion that the American government should have taken over the American banks instead of bailing them out does not sound like a rational solution. Nor would it have been all that popular with the American people. There is no evidence, for instance that the government's attempt to take over healthcare is particularly popular.

So what are we to make of this story, which I found via Instapundit (thank goodness for American blogs and correspondents - otherwise I'd never know what was in the Daily Mail): Man who broke the Bank of England, George Soros, 'at centre of hedge funds plot to cash in on fall of the euro'.

First of all, he did not break the Bank of England or the Bank in Monte Carlo or any bank at all. Secondly, the story does not amount to very much.

A secretive group of Wall Street hedge fund bosses are said to be behind a plot to cash in on the decline of the euro.

Representatives of George Soros's investment business were among an all-star line up of Wall Street investors at an 'ideas dinner' at a private townhouse in Manhattan, according to reports.

A spokesman for Soros Fund Management said the legendary investor did not attend the dinner on February 8, but did not deny that his firm was represented.

At the dinner, the speculators are said to have argued that the euro is likely to plunge in value to parity with the dollar.

Hmm. First of all it could not have beeen a terribly secretive group if the Daily Mail found out about it and knows that it was an "all-star line up of Wall Street investors". Secondly, the notion that hedge funds watching fiscal developments in order to cash in is a plot is rather odd. Isn't that what hedge funds are supposed to do?

Glenn Reynolds, I am pleased to say, is not impressed with the story and provides a slightly different and much more amusing explanation.

The stimulus is a flop - let's have more of it

Oh dear, this is all so familiar. Socialism, we used to say, does not work in any way: economic, social or ethical. Ah yes, they would reply, that is because there is not enough socialism. We must have more. We hear the same about the EU - the reason the European project is failing and not delivering the promised attractions is because there is not enough of it. So, President Obama's stimulus package failed miserably and there are plans to shell out more of the taxpayers' money on another package. Here is Dan Mitchell of Cato Institute explaining why and how it failed. He may be talking about the US but it is horribly relevant to us.

Government spending is the problem

Government deficits, debt, more borrowing - we know the story all too well. Of course, the underlying problem is ever rising, nay rocketing governement spending. Daniel Mitchell of the Center for Freedom and Prosperity Foundation spells it out in this video. He talks about the United States but all his comments apply with knobs on to Britain.

Ten Year Plan

In some ways the EU is more ambitious than the late unlamented Soviet Union was. Stalin had Five Year Plans (sometimes completed in three years), Khrushchev had one Seven Year Plan. The EU has Ten Year Plans.

It might be worth noting that those plans unroll regardless of changes in the national parliaments, elections, the Toy Parliament or even the Commission itself. This is not something that is clearly understood in Britain by politicians, political hangers-on or the media.

We learn from EUObserver that Brussels (as the EU is known not so affectionately in common parlance) is to start public consultation for the next Ten Year Economic Plan.

Still grappling with the fallout from the global financial crisis, the EU hopes the plan will help tackle pressing issues such as rising unemployment and return the bloc to solid economic growth in the longer term.

The final date for submissions is 15 January 2010, after which the commission will then finalise a detailed proposal to be submitted to EU leaders at the European summit next March. "Europe reduced unemployment from 12 percent to 7 percent in the decade to 2008. We now need new sources of growth to replace the jobs lost in the crisis," said commission president Jose Manuel Barroso in a statement.

In line with Mr Barroso's political guidelines for the next five years, the consultation paper points to the importance of greener and socially inclusive growth.

Whatever that last phrase may mean. I note that ComPres Barroso makes no reference to the number of jobs created in the private sector, possibly because the figure is too low to bother with.

EUObserver also adds that this new Plan will replace the old Lisbon Agenda that was going to make the European economy the fastest growing and most advanced by 2010. Mostly it was going to do it by making countries tick boxes on various score sheets. Not surprisingly, this contributed nothing to actual economic growth or advanced technology.

Even now there is a lack of understanding what creates a growing economy.

While welcoming the general themes in the paper, Eurochambres – an association that represents European Chambers of Commerce in Brussels – stressed the need for improved monitoring of member state implementation.

"Part of the blame lies with the 'Open Method of Co-ordination,' which leaves implementation to the goodwill of member states," said Arnaldo Abruzzini, Eurochambres Secretary General. "This method should be reviewed in the future 2020 strategy, and include more incentives for member states to deliver on their targets," he added.

The Open Method of Co-ordination is a monitoring system devised in the 1990s, under which member states "peer review" each other's progress in reaching targets. It is frequently cited as an important reason for the limited success of the Lisbon Strategy.

One way to improve implementation levels without the use of formal sanctions is by using the EU budget as a reward system, says Andre Sapir, a senior fellow with Brussels-based think-tank Bruegel.

"I think instead of sticks we need some carrots," he told EUobserver, outlining how member states that reach agreed targets could be rewarded under the EU budget.

"If you want to have a have better EU involvement, there needs to be a redirection of the EU budget towards the fulfillment of the plan's goals in general, and in some areas use some money to reward behaviour," he said.

Who, one wonders, will be contributing to this discussion? Well, there will be the usual NGOs and lobby groups and that nebulous entity, the civil society, which consists of preferred organizations, often funded by the EU, using the money extracted from that patient milchcow, the taxpayer.