by Peter Franklin
Thursday, 24
October 2019

Liberals against democracy?

Don't miss this magnificently provocative essay from John Gray in the New Statesman..

A magnificently provocative essay from John Gray in the New Statesman. It’s entitled ‘The closing of the conservative mind: politics and the art of war’. However, it’s the liberal mind that he’s really concerned about.

It’s not just that the liberal elite snobbishly pins the blame for the rise of populism on rabble rousers and voter ignorance (as opposed to any failures on their own part). That’s bad enough, but worse is a growing disregard for democracy itself:

The key feature of this liberalism is that it transfers decision-making from political to judicial institutions. Liberals are turning to law to entrench values and policies for which they cannot secure democratic assent.
- John Gray

Witness the sheer delight taken in Boris Johnson’s humiliation at the hands of the Supreme Court. Lady Hale’s famous brooch has literally become an icon — with spider emojis appearing all over Twitter. It’s an apt symbol of the entanglement of democracy in a thickening web of rules designed to constrain the actions of elected governments. ...  Continue reading

by Peter Franklin
Tuesday, 22
October 2019

John Simpson’s two thirds idea is half-baked

The veteran BBC broadcaster suggests a new supermajority rule - but has he thought it through?

Yesterday, the BBC’s John Simpson relieved himself of a tweet:

OK, let’s think this one through. First of all, what does he mean by a change to the rules? Presumably not just any change to any law or regulation. It would have to be something big and more-or-less permanent. A second referendum on Britain’s membership of the EU would certainly count. But what would be the change to which the two-thirds threshold applied to? Would the super-majority be required to over-turn the result of the first referendum or would it be to approve the deal to take Britain out of the UK? That decision, whether taken by the Government, Parliament or our judicial masters, would most likely pre-determine the outcome of the referendum. ...  Continue reading

by Peter Franklin
Monday, 21
October 2019

Will the EU shut down its tax havens?

New analysis confirms Ireland is the EU's home grown tax haven

How does one identify a tax haven — specifically, a corporate tax haven?

One thing to look out for is when subsidiaries in a low tax country appear to be generating revenues out of proportion to the wages they pay in that county. Unless those local employees are freakishly productive, it would suggest that revenues earned elsewhere are being reclassified through the various tricks known to cunning tax lawyers.

Take a look at the charts tweeted the other day by Jonathan TepperThis one, for instance, focuses on the “affiliates” of US multinationals — showing their pre-tax profit as a percentage of employee compensation: ...  Continue reading

by Peter Franklin
Friday, 18
October 2019

Daylight robbery: how lack of sunlight is keeping us awake

Lack of sleep is hitting Britain's economic productivity...

According to Anoosh Chakelian of the New Statesman, lack of sleep is hitting Britain’s economic productivity:

A Rand study into the economic effects of sleep deprivation last February found that the insufficient and poor quality sleep of UK workers was losing the country 1.86 per cent of its GDP, or 200,000 working days each year.
- Anoosh Chakelian

But what’s keeping us awake?

Our screen addiction often get the blame: by flooding our eyes with bluish light at night, we’re messing with our circadian rhythms.

But there’s another part of the picture that gets ignored – which is that we’re getting too little light during the day. The science is explained by Linda Geddes in an extract on Literary Hub from her book Chasing the Sun:

…there is growing evidence to suggest that exposing oneself to bright light during the daytime can help to negate some of the detrimental effects of light at night —as well as improving our mood and alertness more directly.
- Linda Geddes

Researchers found significant impacts:

Exposure to bright, morning light was particularly powerful: those exposed to it between 8 a.m. and noon took an average of 18 minutes to fall asleep at night, compared to 45 minutes in the low light exposure group; they also slept for around 20 minutes longer and experienced fewer sleep disturbances.
- Linda Geddes

Unsurprisingly, the effects were particularly pronounced during winter when it’s much easier to miss out on daylight. ...  Continue reading

by Peter Franklin
Wednesday, 16
October 2019

There is nothing wrong with neoliberalism… as a word

‘Neoliberalism’ is not the loveliest of words, but it is a useful one...

A tweet from Ezra Klein, co-founder of Vox Media:

No, sir, it would not. ‘Neoliberalism’ is not the loveliest of words, but it is a useful one — referring to a particular era of capitalism, i.e. the one we’re living through now.

One can debate precise definitions, but neoliberalism is what replaced the post-war model of capitalism — in which government was heavily involved in the productive side of the economy. In the 1980s and 90s, a wave of privatisation and deregulation rolled back the frontiers of the state — but not all the way. The welfare state, despite some reforms, stayed very much in place. ...  Continue reading

by Peter Franklin
Tuesday, 15
October 2019

Late Capitalism? Don’t you believe it.

In the 1930s, the capitalist system faced an existential threat from communism and fascism; but what does it have it worry about today?...

Late capitalism? Don’t you believe it. A timely blogpost from Branko Milanovic reminds us that the capitalist system, love it or hate it, is far from on its way out:

Geographically, capitalism is now the dominant (or even the only) mode of production all over the world whether in Sweden where the private sector employs more than 70% of the labour force, the United States where it employs 85% or in China where the (capitalistically-organized) private sector produces 80% of the value added.

This was obviously not the case before the fall of communism in Eastern Europe and Russia, nor before China embarked on what is euphemistically called ‘transformation’ but was in reality replacement of socialism by capitalist relations of productions.

- Branko Milanovic

Furthermore, he says, capitalism (especially the tech sector) is creating new markets (and thus turning non-capital into capital) all the time – “a huge market for personal data, rental markets for own cars and homes… market for housing of self-employed individuals.” ...  Continue reading

by Peter Franklin
Thursday, 10
October 2019

Why would anyone buy a negative yield bond?

In August, I wrote about negative yield bonds. A bond is a tradable IOU – in which the issuer (typically a government or a big business) promises to repay a specified amount (basically the bond purchase price) at a specified point in the future plus a bit extra – i.e. the interest on the loan, which is also referred to as the coupon or the yield. Bonds, therefore, are a means by which governments and other organisations can borrow from the money markets.

A negative yield bond is a strange beast that promises to repay the holder less than the original purchase price. It is therefore an investment guaranteed to lose you money. Nevertheless, governments have been selling these by the bucket load. At one point over the summer the money markets had $17 trillion invested in these seemingly unattractive pieces of paper. ...  Continue reading

by Peter Franklin
Thursday, 10
October 2019

Tax evading billionaires will put Warren in the White House

Well, it's finally happened – America now has a regressive tax system in which the 400 richest families pay a lower effective rate than the poorest 50% of Americans...

Well, it’s finally happened – America now has a regressive tax system in which the 400 richest families pay a lower effective rate than the poorest 50% of Americans.

That’s according to Christopher Ingraham in the Washington Post, who reports on the latest research into what different income groups actually pay in terms of all taxes, not just income tax :

The Triumph of Injustice, by economists Emmanuel Saez and Gabriel Zucman of the University of California at Berkeley, presents a first-of-its-kind analysis of Americans’ effective tax rates since the 1960s. It finds that in 2018 the average effective tax rate paid by the richest 400 families in the country was 23 percent, a full percentage point lower than the 24.2 percent rate paid by the bottom half of American households.
- Christopher Ingraham

The following graph shows that the super-rich used to pay a lot more but that the gap has now not only disappeared but gone negative for the first time:

Presidential contender Elizabeth Warren has a plan to put that right. This is her “Ultra Millionaire Tax“, which happens to quote the economists who produced the above research: ...  Continue reading