CentreRight

A useful example of market retrenchment

Number of branches of Starbucks in Australia at the beginning of 2008: 84

Number of branches now: 23

Ten reasons why Gordon should go

Some light relief for Christmas. The results of the NHS BLOG DOCTOR competition to chose the recent video that best demonstrates why the prime minister should go are now in. My favorite was the one above featuring William Hague, surely our best current Parliamentarian, but the readers only put it at number seven. For the full top ten results see: Ten Reasons why Gordon Brown must go.

Some observations on a bailout for Jaguar Land Rover

It would be unpatriotic to rescue the Indian owners of Jaguar Land Rover.

It would be protectionist and against the interests of UK car buyers to subsidise the British motor industry at the expense of cheaper cars from abroad.

It would be inefficient to keep Jaguar Land Rover alive with taxes raised on successful businesses.

It would be environmental craziness for Labour to announce extra taxes on 4x4s in the spring budget and then use those and other taxes to rescue a 4x4 manufacturer less than 1 year later.

It would be electioneering if manufacturers in marginal seats in the English Midlands get subsidy but manufacturers in the safe North East of England do not.

Every penny counts

When people like Iain Duncan Smith and Jill Kirby call for greater incentives for marriage in the tax and benefit systems, they are mocked by those on the liberal left who say that a bit of extra money each week can't possibly influence such an important decision.

Yet, here's an interesting story in today's Telegraph that suggests that relatively small amounts of money can influence an even bigger decision than marriage: i.e. having a baby. According to research published by the Institute for Fiscal studies increased welfare payments for the poorest families can be linked to an increase in the birthrate of 15%.

Given that the Telegraph article is illustrated with a picture of Karen Matthews we can assume that the IFS study will launch a thousand 'welfare scrounger' stories. The reality, of course, will not be as simple as that. But liberal complacency over the impact of welfare on family structures is equally simplistic and, in the long run, a great deal more damaging.

Another proof that the recession is killing green politics

Poland and Italy rebelling against the EU's climate deal...

Manchester, Canada and American states rejecting green taxation...

Opinion polls across the world showing collapsing support for environmental policies...

And now this in The Times:

"Organic farmers have asked the Government for permission to take a “holiday” from strict organic standards in an attempt to survive the recession. The drastic move by organisations including the Soil Association follows a dip in sales of organic produce and fears for the future of Britain's 5,000 organic farmers. Sales of organic food slumped 10 per cent in the 12 weeks up to the end of November, according to the latest figures from the consumer researchers TNS. Overall food sales over the same period were up 6 per cent."

Greenhouse gas comes from solar panels

From Foreign Policy's Top 10 Stories You Missed in 2008.  I wonder why this didn't get more coverage..?

(The others are worth a read, too)

Greenhouse Gas Comes from Solar Panels

Think switching to solar energy will make you green? Think again. Many of the newest solar panels are manufactured with a gas that is 17,000 times more potent than carbon dioxide in contributing to global warming.

Zimbabwe - the last days perhaps

Perhaps these are the final days of Zanu-PF and their evil dictator of a leader.  The commensurate suffering that goes with that is widely known.  Nevertheless, the message that follows, which I received from a man within Zimbabwe today, is harrowing and awful to read.  I thought that I would share it with you.

------

I reckon that these are the last days of TKM and ZPF. The darkest hour is always before dawn.

We are all terrified at what they are going to destroy next........I mean they are actually ploughing down brick and mortar houses and one family with twin boys of 10 had no chance of salvaging anything when 100 riot police came in with AK47's and bulldozers and demolished their beautiful house - 5 bedrooms and pine ceilings - because it was 'too close to the airport', so we are feeling extremely insecure right now.

Expect to see less of Gordon Brown in 2009

Having just watched the final monthly Prime Ministerial press conference of 2008, I would wager that we in Britain will be seeing even less of Gordon Brown in 2009.

What struck me is how he is resolutely parroting the line that Britain's economic problems are the result of a global financial crisis.

Time and again he said that "global problems need global answers" and talked about the need for "co-ordinated global action" to resolve this country's problems. In other words, "I'm up to my neck in it and am looking for others to shoulder the blame".

Nick Watt from the Guardian pointed out in his question that during the last week Brown had visited six countries in six days and in answer to another question about the Middle East, Brown gave a long list of foreign countries he had been to recently.

I fancy he'll be taking every opportunity he can next year to escape Britain to strut his stuff on the world stage in the hope of further suggesting that our problems are not the fault of his Government and that he's somehow seeking to persuade others to act to solve them.

Also at the press conference, he failed to answer a simple question from Ben Brogan about whether he would honour Tony Blair's promise to allow David Cameron and shadow cabinet figures access to senior civil servants as of January 1st 2009, in order to discuss what a Conservative administration would want to implement. "I'll be replying in due course." he said. 

Democrats manipulating election results

I have previously linked to an Ann Coulter article on this site.  People really didn't like me doing that.  Ever one to learn a lesson, here's another Coulter article.  In it, Coulter tells us that activists working on behalf of defeated Senatorial candidate Al Franken are now "finding" plenty of hitherto unseen ballots in his favour.  She also gives an interesting review of past occasions on which Democrats have overturned results they didn't like.  Have a look.

Some pictorial evidence as to why the Government might want to expand Gatwick instead of Heathrow

So as the Government dithers over whether or not to expand Heathrow Airport, news emerges that they are looking at expanding Gatwick instead.

Look at the following images:

The red dot in the middle of the map on the left is the Crawley constituency - the only Labour held seat in the vicinity of Gatwick Airport and one which Laura Moffatt holds for her party with the perilously small majority of 37.

On the right is a map of the part of West London which sits under the Heathrow flight path, which contains a rather more sizeable clutch of Labour seats (and Tory marginals) - all of which are battleground territory come the next election.

Dare I suggest that there might be a little bit of political calculation going on?

Saving my professional reputation from a classic Grauniad gaffe

The Guardian Comment is Free site yesterday put up a short piece they had requested from me explaining what the Austrian Theory of Business Cycles is.  Of course, all such pieces are subject to some editing by the site managers.  Unfortunately one of their amendments was to change my last sentence so that it says that the Austrian theory of business cycles might be borne out by recent events.  Obviously I don't believe this at all - I am an orthodox economist, operating with the Rationality and Equilibrium axioms of the mainstream economic theory paradigm, and when I seek to deviate from these I have argued vigorously and repeatedly that there should be explicit mathematically formulated alternative models, such as those of bounded rationality.  The interest of mainstream economists in the Austrian theory of business cycles is not that there is any possibility of its being correct as it stands.  It's more like a western biochemist investigating a Chinese holistic medical remedy to see whether a orthodoc scientific account can be offered of how it works (if it does).

I guess that's an instance of the perils of Grauniad editing...

900 days in prison and not even one Red Cross Parcel

Remember the Lebanon war in 2006? Whilst most people know that its catalyst was the kidnapping of two Israeli soldiers by Hezbollah (from the Israeli side of the border), what is less well known is that Hamas also kidnapped an Israeli corporal Gilad Shalit around the same time.

Although Hezbollah subsequently murdered the two soldiers (their dead bodies were given back to Israel in return for the release of hundreds of Palestinian prisoners), Gilad Shalit - remains a hostage of Hamas.

In over 900 days of captivity, Corporal Shalit has not been allowed any visitation rights, or even access to any humanitarian organisations. Despite repeated demands from the International Committee of the Red Cross Hamas has refused Corporal Shalit the most basic of human rights.

Hamas has flagrantly violated every aspect of international law including humane treatment of their prisoner, the right of the family to know about his well being and the refusal to permit any kind of humanitarian access.

In order to assist Corporal Shalit and to put pressure on Hamas to grant the Red Cross to access, Parliamentarians across Europe (co-ordinated by European Friends of Israel), are leading campaigns to highlight the case of Corporal Shalit and urge the Red Cross to step up its campaign. In London, senior Parliamentarian and Conservative Deputy Chairman, Alistair Burt MP has led a delegation of MPs from all parties (including James Arbuthnot, Alan Beith and Andrew Gwynne) to lobby the Red Cross to ensure that humanitarian access for Gilad Shalit remains high on their agenda.

Should the Church of England be disestablished?

Rowan Williams, the Archbishop of Canterbury, has raised the prospect of disestablishment of the Church of England in an interview with the Christmas edition of the New Statesman (not yet online), saying that it would be "by no means the end of the world".

Cited in the Guardian, Dr Williams drew on his experience as a bishop in the disestablished church in Wales:

"The strength of it is that the last vestiges of state sanction disappeared, so when you took a vote at the Welsh synod, it didn't have to be nodded through by parliament afterwards. There is a certain integrity to that."

However, whilst there is that intellectual argument from within the Church in favour of disestablishment, he expresses his fear that any such move would most likely be expoited by secularists:

"I think the motives that would now drive disestablishment from the state side would be mostly to do with... trying to push religion into the private sphere, and that's the point where I think I'd be bloody-minded and say, 'Well, not on that basis'."

Speaking on the Today programme, he asserted that he did not believe that now was the time to disestablish, but did say that "The Church exists because of God, not because of the state".

My instinct is that Parliament should not have to involve itself in what are effectively the internal affairs of the Church of England and that similarly the Prime Minister should not be the individual responsible for appointing archbishops and bishops.

But perhaps you disagree. I'd be interested to hear your opinions.

Harman's PMQ gaffe: "We need debt to rise"

In an otherwise low-key PMQs today, there was an excellent question from my colleague Shailesh Vara, reminding us of Brown's speech as Shadow Chancellor to Labour Pary Conference in 1995, when he said that "we cannot build a new Jerusalem on a mountain of debt".

Harman told us in response that "we need debt to rise".

Now, I think one might be able to make an argument that debt tends to rise in a recession, or that one could follow a Keynesian approach (which I and most readers would strongly disagree with) that a rise in debt is a consequence of a fiscal stimulus or growth in public spending or both.

But I had yet to hear anyone suggest that a rise in debt is in itself a virtue. Given that Harman, on matters economic, tends to parrot the words of her boss, I can only assume that these words are likely to be straight from the horse's mouth. We have had a national debt for 350 years or so now - I doubt if any monarch or government in that time has made its increase a deliberate act of policy. Or maybe what she really meant to say is this: "we need debt to rise to make life as difficult as possible for David Cameron's incoming government."

A more flexible (and harsher) drivers' licensing scheme

I'm currently in Australia, where:

1) There is a 0% alcohol rule for provisional licence holders (but, I think, a lower limit for full licence holders)

2) There is a system of "double demerits" in place over Christmas - i.e. double penalty points for a period when more people tend to have accidents / drink drive etc.

Discuss.

From credit crunch to product crunch?

By Professor Nick Bosanquet

The recession is a product crunch – it confirms and intensifies the end of a twenty year product cycle. In the past decade a number of US icons have seen a fall in shareholder value. Microsoft, Pfizer and Merck, not just GM, are all trading at least 50 per cent down on their peaks.

The product cycle was about new products in IT and in pharma and about new consumers. The car market was driven by the dynamics of price lowering in car manufacturers’ hunt for market share and by cheap fuel, which drove the number of cars per household to saturation point. The pharmaceutical industry developed statins and anti-depressants – blockbuster drugs which have led to massive benefits in survival and quality of life. The internet has allowed a whole range of new services to arise and made it possible to speed up global transactions in financial services.

The falling returns to the old leaders – the “nifty fifty” which could not lose – helped to drive the search for higher returns, without much concern for steeply rising risk. The product cycle was one of the key influences on the speeding up and hotting up of the economy which has led to the blow out.

The Wise Words of Eeyore

Tim posted a piece on Tory Diary, regarding speculation at Westminster that an early election is imminent. I know, I know, why would you care what I think about the potential date of an election? But I think the early speculators are wrong.

Brown will wait as long as possible. The Quietus, remember? There is no benefical electoral outcome available to hundreds of Labour MPs; the only thing left for them to do is claim their salaries as long as they possibly can. Until the electoral waters close over their gaping, empty heads.

No journalist would have thrown a shoe at Saddam

Roger Simon makes the obvious but still important observation about that shoe throwing episode:

"[George W Bush] wanted to spread the democratic system preemptively.  A lot of people have sneered at that idea lately, but while they were sneering Iraq has inched forward toward a democracy.  It’s even turning into a (somewhat) decent place to live.  That buffoon-like shoe chucker - his name is Muntazer al-Zaidi from Al-Baghdadia channel which broadcasts from Cairo - proved it. No matter what happens to al-Zaidi now (and it won’t be much if anything), it will be nothing like what would have happened to him if he had hurled a shoe at the president during the previous Iraqi administration of Saddam Hussein. As we all know, in that case, he would either have had his tongue and scrotum cut out or both, if he would have survived at all."

You gotta admire Bush's duck and smile, too.

And in other news... Thousands celebrate in Baghdad as violence falls.

Cllr Ken Meeson's unjustified attack on the TaxPayers' Alliance

Cllr Ken Meeson, from Solihull Council writes for the Local Government blog accusing the TaxPayers' Alliance of getting our facts wrong and only knocking councils, not praising those that do a good job.  His article is a mix of distortion and ignorance about our work.  Tellingly, while Cllr Meeson has responded by bashing our study, Eric Pickles, Conservative Local Government spokesman, responded to our report with a press release saying "I welcome the publication of this information, as it will help the press and public hold their councils to account for the spending of taxpayers’ money" and attacking Government plans that could weaken controls on council publicity spending.

We have praised councils when they do good work.  Hammersmith and Fulham's cuts in council tax, for example.  In the most recent edition of the report which Cllr Meeson seems to be responding to, TPA Chief Executive Matthew Elliott was quoted as saying that "we salute the 217 councils who have cut spending on publicity."  That praise is extended to Solihull council - we included them in our list of the "20 councils with the greatest decrease in spending on publicity from 2006-07 to 2007-08".  Unfortunately, 225 councils have increased their spending on publicity and many others are still spending eye-watering amounts.

The need to offer change AND security

As one of the most tumultuous parliamentary sessions of recent times draws to a close, Harold Wilson’s famous maxim about a week being a long time in politics seems deliciously apposite.

Yet amidst the seismic economic change and bewildering events that have engulfed the financial markets, I would contend that many of the fundamentals of domestic politics last summer remain intact. Gordon Brown may have temporarily convinced the public that he is the man to steer the nation’s ship through the eye of this economic storm, but it is difficult to believe that even in the medium term he has the widespread appeal necessary to secure a mandate.

Looking to the future, the Conservatives’ obvious appeal to the public is ‘change’ but we must think carefully about what in times of crisis this concept represents and the dangers of relying on change alone as a reason for election. The electorate may be angry with the government but it will not necessarily abandon it if its fear for the future means the alternative is less trusted. Until recently our economic proposition was ‘change’ (in personnel) alongside ‘continuity’ (in policy). The current crisis has given us the courage to say what was true before but what should be more compelling now – that the government’s spending policy is not only unsustainable but has failed to provide a proper return for a decade of substantial investment.

David Cameron gets it right after getting it wrong

Two Daily Mail columnists are throwing flowers at David Cameron:

"So it took enormous courage this week when the young Tory leader decided at last to challenge Gordon Brown's confident new financial orthodoxy and to repudiate Labour's spending schemes. Cameron is, of course, right to warn that Gordon Brown's financial plans are insanely reckless, may lead to bankruptcy and impose an intolerable penalty on future generations." - Peter Oborne

"We also got to see some real political steel this week with his emergence as a proper small- state, low taxing conservative. His full-frontal attack on Gordon Brown's reckless management of the economy has at last given the Tories a distinctive voice on the global meltdown. By abandoning the pledge to match Labour's spending plans and promising tax cuts way beyond the £5billion announced by Labour, he's shown real conviction." - Amanda Platell

I don't disagree with a word written by Oborne & Platell but I will always worry that David Cameron ever backed Labour's spending plans in the first place.

Jean Charles de Menezes was not the 53rd victim of the 7/7 bombers

From this morning's Times:

Did officer Charlie 12 shout the words “armed police” at Mr Menezes before firing? Jury’s answer: no

Did Mr de Menezes move towards Charlie 12 before he was grabbed in a bear-hug by officer “Ivor”? Jury’s answer: no

The officer said Mr de Menezes had moved aggressively towards him and made him fear he was in mortal danger. Passengers said they did not see any such action.

And on the damning list goes. Nearly everything which the Met told us at the time of Mr Menezes' death, and subsequent to it, has been shown to be untrue. We already knew that the officers concerned were allowed to write up their notes on the incident together, to ensure that their accounts coincided with one another; now we know that their version of what happened was not believed by the jury which heard their evidence.

The paranoia of Ms Mary Honeyball

A lady named Mary Honeyball, who I am led to believe is a Labour Member of the European Parliament for London, has got her knickers in a twist about the latest RyanAir Christmas charity calendar. 

Quoting portions of a report from the Women's Rights and Gender Equality committee of the European Parliament, Honeyball calls for affirmative action to combat "harmful" and "damaging" gender stereotyping in advertising and slams the "self-regulatory" nature of the British Advertising Standards Authority.

"Why are Irish children", she fumes, "protected from growing up surrounded by sexist stereotypes when British children are not?".

Ms Honeyball is clearly rather exercised by this issue, asking visitors to her website vote in an online poll as to whether or not they consider "Ryanair's advertising for its 'bare all' [it is not a "bare all calendar] calendar offensive and derogatory to women?".

Indeed, it's difficult to see what else Ms Honeyball does in the European Parliament aside from writing rather paranoid blog posts about the plight of women in western society. Of the 191 blog posts she has made since she launched her website in February 2008, the majority have been dedicated to gender issues.

Highlights include:

• Cyprus appoints women commissioner
• No women for new top EU posts
• Bonkers Boris sacks women
• Iceland appoints two women bank chief executives

One could be mistaken, given the tone of many of Ms Honeyball's postings, for thinking European women toiled under the same conditions as those imposed by the Al Saud family in Saudi Arabia.

Whilst no sane person could disagree that women have traditionally been grossly under-represented in the world of business and politics and that problems such as pay disparities between genders must be eliminated is Ms Honeyball's time, especially during the present economic criss, best occupied by campaigning against a charity campaign which raises more than €100,000 each year to provide emergency shelter for Dublin's homeless community?

"Twelve years after US welfare reform, the UK gets with the programme."

I've written for National Review Online about welfare reform in the UK:

"In many respects, David Cameron’s Conservative party is timid but on social reform it is groundbreaking. The Tories understand that the only way of reducing the size of the state is to cut the demand for government services by strengthening civil society. They understand, finally, that the Left has lost the war on poverty. And they are rediscovering that conservatism is at its best when politicians support and never supplant the Burkean little platoons of family, voluntary organization, and local school."

Fiscal stimulus: tax cuts vs spending increases

James Forsyth notes a post by Hall and Woodward on the question of whether fiscal stimulus is more effective when enacted through tax cuts or through spending increases.  Woodward and Hall suggest that tax cuts are between twice and three times as effective - i.e. for each extra £1 of government debt you take on, you get £1 in extra GDP from a tax cut, but only £1 to £1.4 if you raise spending.

Personally, I'm pretty dubious about the Woodward-Hall methodology here.  I'm not really sure that the GDP effects of military spending during wars provides that good a model for fiscal stimulus in 2009.  However, the conclusion that tax cuts represent the superior form of fiscal stimulus is certainly one that I share, and have argued for previously, both in the Sixteen Economists' letter and my RSA speech.