Saturday, September 22, 2012
Energy Economics - Figuring the Correlation Between Energy & GDP Growth
"While the Conservatives are trying to replace the free market in energy generation with something resembling the CEGB of the 1970s, UKIP seem quite happy to endorse economic liberalism."
Which makes it serendipitious that I have been pointed to a discipline called Energy Economics by Valcav Klaus.
This is the journal of the field
And this is from the abstract of a recent paper:
"This paper examines the relationship between capital formation, energy consumption and real GDP in a panel of G7 countries using panel unit root, panel cointegration, Granger causality and long-run structural estimation. We find that capital formation, energy consumption and real GDP are cointegrated and that capital formation and energy consumption Granger cause real GDP positively in the long run. We find that a 1% increase in energy consumption increases real GDP by 0.12-0.39%, while a 1% increase in capital formation increases real GDP by 0.1-0.28%."
I have previously said that there is multi-decadal experience of a 1:1 correlation between energy/electricity growth and economic growth in free market economies world wide so a 0.12-0.39 (average it at 0.26) doesn't look that good but look again.
That is the direct, proven, initial cause. A country whose economy is growing is going to have more money for capital formation so that will feed through. A country which is getting that much better off means everybody is really better off and will create a multiplier effect - this is the real thing to be compared with the false multiplier all the self styled "Keynsian" politicos are always talking about when they call for more "quantative easing"/printing of money. Put those both together and the overall multiplier effect is more likely to be expected above than below 1.
But look at it a second time.
"a 1% increase in energy consumption increases real GDP by 0.12-0.39%, while a 1% increase in capital formation increases real GDP by 0.1-0.28%."
While China's electricity production has gone up 10% a year for 30 years and its GDP has rien by almost exactly the same amount, ours
2004 2,718 total 371 electricity
2007 2,458 " 373 "
2008 2,424 " 372 "
2009 2,288 " 352 "
Change 2004-2009 -15.8 % total energy, -5.3% electricity use
No wonder we are in recession. It was held off by running up a deficit but basically we should expevt it to be somewhere between 5% & 15% and in fact since 2008 we declined about 6% - which suggests we have a bit more to fall, which is confirmed by the fact that we are still in deficit & not growing.
We will not get out of recession if the government keep preventing it by pushing up energy prices, indeed we should expect the recession to get worse. But we would change that any time the politicians allow it.
Bear in mind that shale gas is far cheaper than our conventional gas, that 3/4s of the cost of nuclear is regulatory and that even so they are both far cheaper than the windmillery the government enforces on us. I have previously calculated on this basis that only 7% (pessimistically calculated) of electricity cost is what it could cost if we allowed the free market to choose shale and nuclear..
By all the rules of economics we ahould expect that if we allowed a free market in electricity production would go up a minimum of 14 fold - probably considerably more since when costs go down the amount of money earned normally goes up rather than just staying still.
Taking a 1:1 ratio that would mean a 14 fold increase in GDP. Even taking the minimum (no multiplier effect) of 0,25 GDP would increase 4.38 times. OK it would take a number of years to achieve it but so what?
Incidentally I have previously discussed the problem I have, as a libertarian, with the fact that between 1925 and 1937 the Soviet command economy grew at 10% a year and explained it as a result of its electricity production growing at 23% a year. Multiplying 23% by 0.26 shows that in the circumstances the Soviet economy couldn't help growing at 6% and that Stalin must have considerably mismanaged the show to produce such a small multiplier effect (or produced compensting negative effects from shooting people) that the total growth could only be pushed up to 10%. The negative effect of socialist dentral planning was more than offset by the positive effect of the Marxist, at that time, enthusiasm for technological progress.
On the third hand he did do better than Blair, Brown and Cameron.
Friday, September 21, 2012
Scottish Budget - SNP Lie Relentlessly
I note you described your budget yesterday as a "relentless pursuit of economic growth". In the same way First Minister Salmond previously said that the Scottish cabinet are spending every hour trying to grow the economy. If true this would inded be admirable. If half true - half admirable. And so on.
However, looking at what you have brought forth I can find no trace of truth in it whatsoever. Perhaps you could help firstly by saying what it actually does to promote growth - the nearest I can see is some increased housing subsidy which may, very slightly, offset the fact that 75% of housebuilding costs are government regulations. It should be obvious that if you actually wished housebuilding could be massively stimulated and truly affordable housing created simply by getting government out of the way, without the expense and waste your action involves.
The world economy, outside the EU, is growing at 6% annually. You know perfectly well that we could achieve at least the average any time your party wished it simply by not getting in the way and letting the market work. So your remarks about "relentless pursuit of growth", which, together with Mr Salmond's, we must accept as representing the level of honesty to which the SNP aspire, are not only, provably, wholly untrue but the complete and absolute opposite of the truth.
We both know, and John Mason MSP has recently publicly admitted that the SNP are relentlessly idealogically committed to opposing any policy that would tend to make Scotland less like North Korea than South Korea. You are also intelligent enough to know that this is incompatible with any slightest attempt to end the recession.
You also know that "In modern times the main driver of economic growth has been, and continues to be, energy" because neither you nor anybody else disputed it when Jim Mather, who for some unknown reason was in your totalitarian party, showed it. You thus know, with absolute certainty, that your policy of making electricity from the most expensive, unreliable and restricted source is a driver for recession.
Indeed the only policy slightly towards growth that the SNP support is unrestricted immigration and resettlement of the Highlands with 3rd world immigrants. A limited amount of immigration by the technically qualified or wealthy certainly assists growth. However evidence that unlimited immigration, which obviously self selects the unqualified, provides growth is lacking and it clearly cannot provide per capita growth. Thus the sole policy of yours conceivably aimed at growth would deliberately reduce Scots average living standards.
We both know perfectly well that we could be out of recession within weeks if you followed the economic policies of UKIP. Indeed even faster if you followed the economic programme I previously sent you and with which you found not one single thing you could dispute.
You are perfectly entitled to your "socialist" idealogical hatred of the various ways out of recession. You are entitled, like the Greens, to be opposed to growth, but they, at least sometimes, honestly admit it.
You are not entitled to lie, continuously and deliberately to the Scottish people. I must ask you either to point out where I have been factually inaccurate in this assessment or to confirm that no SNP representative will ever, in any circumstances, make the claim to be, "relentlessly" or even on balance, committed to growth. And to confirm which other statements by the SNP, if any, can ever be treated as in any way truthful.
I await your early reply.
In researching this I found the Holyrood record to recently have been redesigned to hide what our masters have been saying in Parliament rather than making it visible.
Salmond's remark about the cabinet spending every hour seeking growth was in last week's broadcast First Minister's questions but is not, at least not easily, available to the public. To rest whether this is deliberate I put Jim Mather's remark quoted into the Parliament's search system which assured me no such remark had been made. As I linked that remark from They Work For You that is clearly a lie.
You will see that the TWFY site explains
"Due to changes made to the official Scottish Parliament website at the start of 2011, our parser that used to fetch their web pages and convert them into more structured information has stopped working. We’re afraid we cannot give a timescale as to when we will be able to cover the Scottish Parliament again. Sorry for any inconvenience caused."
I have to assume this is entirely deliberate and a sign that our "totalitarian" SNP rulers are making sure that they do not work for us at all.
Thursday, September 20, 2012
Scottish Public Debate On Scottish Windmillery
"Last night's Spectator debate produced a resounding victory for the forces of light. Votes were held on the motion "Scotland's energy policy is a load of hot air" before and after the debate. Struan Stevenson and I were ahead after the first vote, although not strongly so, but produced a strong swing during the course of the evening which left us with a resounding victory."
Mike Haseler, in the audience, has a thread on the SCEF site:
" For Against Don't know
Before 66 (58%) 36 (32%) 12 (11%)
After 126 (72%) 50 (28%) 0 (0%)
The debate sponsored by Brewin Dolphin was held in the National Museum of Scotland in a lecture theatre which was packed. As one would expect Andrew Neil was a superb chairman. He allowed the debate to flow freely even alternative the intended order of speakers to let the conversation follow the natural flow.
Point from Questions
We would have to flood all Scotland's valley with hydro
Why are receding glaciers showing villages (Andrew then talked about medieval warming, unaware that these were bronze age villages)
Niall 11GW interconnector needed
Shale gas - is a disaster because a drilling station is needed every 2km (so far fewer of them than windmills). There's a 1.2 level earthquake "I bet that's about what Alex Salmind causes each time he sits down", replied a nameless MEP.
Arctic ice - at all time low ... Andrew mentioned that Antarctic ice had just been at record high
Why are all the turbines stationary so often ... because they are misunderstood said Niall.
What about my spy's who inform me its all going to be sub sea turbines?
Where are 11,000 jobs
What about renewable heat?
We need interconnector to export
Has the prof read the hockey stick - it's too thick
It was a thoroughly enjoyable debate. The speakers all did well and none were dull and all had clearly put in effort. It seems churlish to criticise ... however, it would have been more interesting if Niall Stuart had been more on form. He sent too much time attacking the other speakers and not enough time developing his own case. It was as if he expected to have the audience on side and was unprepared to work to make his case with the result that Andrew Neil ended up having to ask some questions which might have come up in the debate if Niall had been more on the ball. Prof Haszeldine was lacking in much substance. What he had to say was said in the first few sentences after which it petered out into bland assertions. Andrew Monford I felt tried to pack an awful lot of detail into a very short speech which whilst I liked what he said, I felt much of it may have been missed by someone not familiar with the subject. Struan Stevenson did not have a lot to say but said it well.
A very creditable win for the sceptics. Some years ago St Andrews University had a similar debate with a similar result. That time one of the alarmist speakers was Ross "anybody who disputes catastrophic warming is from Mars" Finnie the then Environment minister.
This time no real politicians willing to speak for alarmism. Niall Stuart, indeed anbody at all from Scottish Renewables, have already refused to speak in Glasgow. Stuart Haszeldine is an Edinburgh environmental scientist involved in the carbon capture programme. Stephen Bayley is a Guardian resident design and cutlural critic and seems to have no particular link to or knowledge of Scotland's windmillry and seems to have been there to fill out the numbers.
A conclusive result - one can see why the "consensus" are in hiding. Any bets on whether this gets censored by the BBC - even on Andrew Neil's own show?
Wednesday, September 19, 2012
3 Space Items Prove The World Is Getting Better - Fast
"India plans to launch a probe to orbit Mars next year at an estimated cost of four to five billion rupees ($70-90 million), and hopes to send its first manned mission to space in 2016.
"Questions are sometimes asked about whether a poor country like India can afford a space programme and whether the funds spent on space exploration, albeit modest, could be better utilised elsewhere," Singh said in a speech.
"This misses the point that a nation's state of development is finally a product of its technological prowess."
Manmohan Singh Indian PM
Whenever the subject of foreign aid comes up somebody says we shopuldn't be giving India any because they have a space programme. Objectively this is nonsense - £50 million is nothing compared to their GDP - a far higher % of our "aid" to less cometently run countries is simply stolen. What it shows is the jealousy of so many Brits that uppity India has the temerity to have a space programme while our useless politicos ensure we don't. The answer to that is obvious. ------------------------------------ The Register has an article on NASA funding studues of faster than light space travel. http://www.theregister.co.uk/2012/09/18/nasa_eagleworks_warp_drive/ It is all entirely theoretical, so don't expect anything soon. Nor do I think we will actually need extra solar worlds anytime this millenium since we can build as many millions of O'Neill orbital space settlements to nearly give one new world per family currently on Earth with technology we know how to do. What I did find interesting, however, is the progress that is being made with the theory. Originally they thought that if it could be built it would take as much energy as the mas of Jupiter in antimatter. As big a show stopper as there is. A few years and some wrinkles later they said it would take the mass of the Voyager probe. Theoretically possible thaough it would take billions of years at present production rates - so still no chance. Now they have come up with another wrinkle that reduces energy needs to the not all that far from practicle. My point is not that we are going to get FTL drives in the foreesable future but the more important one thatt scientific and technological progress, even in fields recently considered absolutely impossibel, is so swift today that NOTHING is completely impossible. ------------------------------------ The Register, again, has a whole range of articles about work their experts are doing in house to develop Low Orbit Helium Assisted Navigator (Lohan). Basically using a balloon as part of an orbital craft. http://www.theregister.co.uk/Wrap/lohan/ I wrote of something similar previously http://a-place-to-stand.blogspot.co.uk/2011/11/big-engineering-46-hypersonic-airship.html . At the time I was cautious since it seemed rather to good to be true but am becoming impressed. The Register seems to be a more intelligent variant on the way Lord Northcliffe used to put up (what weren't then known as X-)prizes funded out of his ownership of the Daily Mail. Yet another instance of how all the interesting and important stuff in journalism is now being done online not in the dead tree media. http://a-place-to-stand.blogspot.co.uk/2010/02/daily-mail-x-prizes.html
Tuesday, September 18, 2012
Amazing What They Can Do Nowadays
Not a picture from a spacecraft.
Adam Cudworth, 19, of Ombersley, Worcestershire, managed to capture these incredible views of the earth from space - using little more than a balloon and a second-hand £30 camera bought on eBay.
With a scientific background consisting of just a physics A-Level, Adam spent 40 hours working on a homemade box with a GPS tracker, radio and microprocessor - which he released last Thursday.
After taking two-and-a-half hours to float more than 20 miles up into the earth's stratosphere, the impressive device captured these amazing views from space.
He used a GPS tracker similar to a car's satellite-navigation unit to follow its progress and located it with a radio transmitter following its fall back to earth, having reached speeds of more than 150mph.
However how far is it from being able to do that to somebody settingan engine on it and getting it to fly with an explosive payload, using GPS, into a particular target, anywhere within a hundred miles.
Monday, September 17, 2012
The True SNP Policy - They Would Far Rather Have Recession Than Free Enterprise & They Want To Populate The Highlands With Massive 3rd World Immigration
Green leader, Patrick Harvie, simply confirmed that his party would never, under any circumstances, engage in debate with UKIP and then got offencive.
One other, John Mason, SNP MSP for Glasgow Shettleson, did reply & we engaged in correspondence. Since he didn't make it off the record and was obviously well aware of my status as a member of UKIP I am free to reproduce both sides of it.
I am not particularly knocking Mr Mason, who is clearly much more interested in ideas than most of his "totalitarian" party. However I found his ignorance of basic economics, science and even the political philosophies he believes in to not reflect well on the "intellectual wilderness of Scottish politics".
One effect of the "totalitarian" nature of the SNP is that we can be sure that anything one of them says closely represents the common view. In those terms we can take his belief that the main, perhaps only, way out of recession his party approves of is unlimited immigration and repopulation, particularly of the Highlands with millions of immigrants, presumably from the 3rd world, to be their real policy.
I think this lunatic, since such immigration would produce per capita negative growth, but also because the free market policies we propose would clearly provide real growth. It is also something which no true Scots patriot of the last 7 centuries would be less than horrified about.
The world population is 7 billion people. About 80% of them live in countries where working hard they could not expect to earn as much as they would on the dole in Scotland. If I were one of them I would want to come here too, but I am not. I am a patriot of my own country and people and will not sell them out the way the SNP intend to.
I also note his definition of "right wing" as anybody who thinks the free market has a significant place in the economy or anybody who "doesn't like foreigners" when "doesn't like" is defined as not wanting unlimited immigration or not wanting to be run by Brussels. I suspect, outside the Holyrood cartel, 90%+ of Scottish people are "right wing" in those terms.
I admit some of what I said was intemperate but, for fairness have kept it in. Note also that on a number of points he has made no attempt to provide factual support or sometimes even to answer the point at all and I think it reasonable to assume he cannot.
I also find his contention that if only we had an oil fund like Norway we could blow 10s of billions of it on whatever & thus get the economy permanently growing.Of course such spending, which is essentially what we are now doing but he wants more, merely provides a little short term spending to mask the underlying recessionary trend. Real growth comes from increasing the means of production which he is, if anything, opposed to. It is noticeable that Norway is not in recession, still has this fund because it has not blown it on short term spending and incidentally is not an enthusiastic member of the EU, has been the template for the Scottish Tunnel Project, so not remotely like what the SNP intend.
Dear Mr Craig
Thanks for your email.
I am a bit puzzled if it is aimed at me personally or at all MSPs as it starts off 'Dear MSP' which does seem a bit impersonal.
I guess people might turn down your invitation for a number of reasons including its being hosted by UKIP. People might have more faith in the fairness of the debate if it was hosted by a neutral body.
Even if there was no climate change, we would still need to cut energy and other resource usage. So I do feel the wording of your motion is a bit unfortunate and misses the main point.
The invitation went to all MSPs & indeed to all the parties. This might seem a little of a wide spread if it were not for the fact that not one of them has yet confirmed that they are willing to publicly speak in support of the Act unanimously passed to produce the most expensive climate change legislation in the world.
If I had thought many of you were not perfectly aware that this entire scare story is a deliberate fraud to rob this and succeeding generations of trillions of pounds I would have been unwise to ask so many because obviously I would have had to fend off the multiple acceptances.
Clearly I have, if anything, underestimated the total understanding by every last one of you that this is a deliberate fraud that cannot survive impartial debate.
Or are you willing to debate?
As regards your objection to UKIP as not being neutral I will be interested to seeing the numerous links you can produce, if you are in any way honest on this, in which you have publicly denounced MSPs for appearing on the BBC, an organisation which admits to making no attempt at neutrality over this totalitarian fraud.
If your case were correct you would have nothing to fear from testing it. This is known
as the scientific method in science or liberal democracy in politics.
You clearly feel debate with anybody you disagree with should not be allowed. This is known as fascism.
How fortunate for you that it is a belief obviously shared by all MSPs in your LabNatConDemGreen cartel and our state controlled media.
Should you ever, under any circumstances, abjure fascism the invitation to participate in democracy stands.
I am puzzled about the link with fascism. I understood that was more likely for right wing parties who oppose immigration. Is that not more UKIP's position?
I am asked to attend and take part in a variety of meetings. A number of factors have to be considered before accepting, including time and location, my personal expertise on the subject, and the likely fairness of the hosting. I am afraid your meeting did not pass all these tests.
I suggest you look up the history of fascism - it was founded by a socialist nationalist by the name of Mussolini whose basic idea was that dissent, countervailing opinions etc should be suppressed on the grounds that everything works better when there is an enforced consensus.
Which obviously is pretty much the positon of the cartel parties and the BBC.
It was nazism that made racism a fundamental part of nationalism.
I'm not sure what you mean by "right wing" - if you are sure perhaps you could define it?
By right wing I would include both economic pro-market tendencies and anti-foreigner attitudes, both of which I believe UKIP, BNP, NF, etc. support.
I certainly do not agree that countervailing opinions should be suppressed. If you want a debate, why not get a neutral organisation to host it? Or are you afraid of that? Most party politicians are unlikely to take part in a debate hosted by another party… that would seem a pretty obvious trap not to fall into.
Actually the BNP aren't particularly pro-market - they are very much old Labour on things like tariffs. UKIP is not anti-foreigner - our party, unlike most in Holyrood, including some in the SNP, has no record of supporting illegal wars and much worse against foreigners.
That leaves only anybody who wants less than 3/4s of Britain's/Scotland's national wealth to be either legislated out of existence or spent by the government. In that way I would have to be classified as "right wing". Which pretty much leaves only Scotland, North Korea, the old USSR, China under Mao and; wartime Nazi Germany and admittedly wartime Britain as "left wing".
I take it SNP policy is pretty much promotion of unlimited immigration - to, as Brecht said, "elect a new people".
I note that you have not answered the question about when you denounced political allies who appear on the BBC state propagandist on this subject despite the fact it makes no attempt at impartiality. I can confirm that the BBC which does not allow formal free debate is particularly unwilling to do so on this subject.
I would point out to you that when the terms "right" and "left" were first applied to politics those who wanted a free market were radical left wing and those who wanted government controls to keep entrepreneurs down were the right wing aristocratic party. Such use of political labels to mean the opposite of their original meaning is unfortunately common in politics - as someone who calls himself a nationalist and wants his country embedded in an EU super-state you will appreciate this.
On the BBC I do think they are biased against Scottish Independence having been described as the glue that holds Britain together. However, I do think programmes like Good Morning Scotland are reasonably fair. I would be happier appearing in a debate hosted by the BBC than one hosted by another political party.
On immigration we have had a problem in Scotland with a stable or falling population over a number of years. This makes it difficult to grow the economy or improve services. Large parts of Scotland are also seriously under-populated. Therefore, either we need to increase the population ourselves or to encourage immigration.
I trust that clarifies my views on these points.
On alleged catastrophic warming the BBC make no bones about being biased and censoring dissent. Indeed they hired one of their own recently to write a report about how bias was OK, which rather puts it beyond dispute. The BBC do not do formal debate. Sometimes and I think this is what you are referring to, they do interviews with a number of carefully selected people who follow the BBC line on all the main points, but this is not debate
If the BBC ever do actually do a genuine debate on warming in which dissent is actually allowed I will be certain to acknowledge the fact but don't hold your breath.
We do not have a stagnant economy because we have a declining population - we have a declining population because we have a stagnant economy. Check out Ireland to which followed which. Of course we could have a fast growing economy any time the SNP decided to stop preventing it. You know that perfectly well. I would challenge you to debate that but I know you would refuse.
If you were concerned about highland and island depopulation you would have been enthusiastic about the Scottish Tunnel Project but neither you nor the large majority of MSPs were remotely so. As one would expect since you are deliberately maintaining recession.
I do not think anyone is deliberately maintaining recession. What would the point in that be? However, there is disagreement as to how recession can be ended. This is made more difficult as the UK acted irresponsibly in the good times and did not save up an oil fund as Norway did. The UK has been such a failure economically that we would surely be better off independent.
I have never been encouraged to follow a BBC line when I have taken part in TV and radio programmes they host. Most of the time both sides get the chance to put their case, although I am no fan of the BBC.
I would stick to my position that the stagnant economy is partly caused by a stagnant population. More people means more work can be done, more taxes paid, better public services, and so on.
Cheers for now
I don't think there is much factual debate about how to have a successful economy, any more than there is factual debate about creationism V evolution.
Economic Freedom + Cheap Energy = Prosperity
You did not dispute that South Korea is richer than North or give any other examples of centralised socialism matching free enterprise & the evidence seems indisputable
And the SNP is clearly aware of the second part "In modern times the main driver of economic growth has been, and continues to be, energy" - Jim Mather, SNP minister
As you have made quite clear you are personally so ideologically committed to "leftism" that you would rather not have growth, without it and it is unarguable that the SNP policy is to maximise the cost and minimise the availability of energy.
I know that a couple of days ago Alex Salmond said that every SNP MSP was spending every hour trying to end the recession but that is clearly merely the highest standard of honesty to which he aspires & not to be taken as truthful. Or do you actually deny that the formula above is essentially true or that you and your party are absolutely opposed to both "right wing" economic freedom and cheap energy?
Compare and contrast with Chairman Deng's remark that "it doesn't matter whether a cat is black or white but whether it catches mice" but then the Chinese communist party is clearly a Nationalist patriotic organisation that puts improving people's lives ahead of Marxist/Leninist ideology, quite unlike the LabNatConDemGreen cartel.
You must know perfectly well that we could be out of recession quickly and in due course at least matching the non-EU world average growth rate of 6% if we had patriotic government committed to doing so. After all what inherent law of nature is there that says we cannot match the world average?
Regarding the BBC I can confirm that UKIP too does not come under any pressure to conform to the BBC line, simply because we are deliberately censored by them, in the totalitarian cause. Perhaps you could give an example of "Most of the time both sides get the chance to put their case" when you were part of one side and there was a genuine discussion (I don't ask for even a true debate) on the subject of global warming, or free enterprise, or cheap energy or cutting state totalitarianism, or unlimited immigration or anything else of significance, in which supporters of economic, & other, freedom were allowed to speak freely.
Firstly, I do not agree there is anything we can do to get out of recession quickly. If we had savings (like Norway) we would be in a stronger position but debt is a real restriction on individuals, countries, and other organisations.
On growth, yes we do want that, and it will be helped by a growing population and commodity and energy prices not rising too fast. That is why we need to invest now in renewable energy so that when the oil runs out we have an alternative ready. The alternative of using the oil and gas and not preparing for the future would be a disaster waiting to happen.
I would see myself as being left of centre, i.e. wanting a fairer distribution of income and wealth, but I certainly do want to see growth. There are many people struggling in my constituency so we need to help them either by creating new and better jobs or by redistributing wealthier people’s income and wealth.
I hope that clarifies my thinking.
If we cannot get out of recession why can the non-EU world manage an average of 6% growth? What is inherently different about Scotland and the UK that means we cannot even hope to approach far below average? Apart from the politicians.
If there is no reason apart from politicians ideologically committed to opposition to economic freedom in preference to ending recession, then that must be the cause. I note that you have not attempted to support the claim that central planning is as efficient as market freedom by providing any examples, counter to so many showing it isn't..
The "oil running out" is yet another of the eco scare stories which have been disproven by reality, repeatedly. Oil supplies are increasing not running out. In any case if you believed that you would have to enthusiastically support nuclear.
Like you I want people to pay a fair share of taxes. Where I disagree with you & the BBC, is in what constitutes "fair". Personally I think it is fair that those individuals who work hard &/or create wealth are entitled to keep the majority of it, which does not happen currently under our various layers of tax. I also think it indisputable that, so long as human beings are not automata, the incentive of getting more money is bound to encourage people to work hard & create wealth. If you were to accept that you would have to accept that the SNP claim to be doing your best to achieve growth is false.
I find it disgraceful that you use your poorest constituents as moral human shields when you have shown that you cannot factually dispute well that they are "struggling" purely because of poverty enforced by our ideologically driven technophobic politicians.
Sunday, September 16, 2012
This is from the bit he advises journalists to read so that they might know something:
Does printing money make us richer? Obviously not. Printing money does not create more value (real wealth). If it did, we could end poverty in Africa by sending over a few photocopiers. As the great economist Ludwig von Mises observes, ‘An increase in the quantity of money results in no increase in the stock of consumption goods at people’s disposal.’ And indeed, this isn’t just true of paper money. David Hume explained two centuries ago, suppose the amount of gold in the world magically and suddenly doubled. Would we be twice as rich? Clearly not. What makes us rich is the abundance of goods.
Why do governments do it? There are a few reasons. First, printing money redistributes wealth (to governments and their agents). Imagine a little old lady with savings of £100. Now picture the government printing more money. Remember, the more money there is swilling about, the less valuable it is (that’s why prices go up). As a result of the new money, the real value of the little old lady’s savings has been reduced. The value that has disappeared from her savings account (the wealth that has been stolen from her) has been redistributed, in effect, to the agent printing the new money (the government). In other words, printing money is the ultimate stealth tax. As the economist Murray Rothbard puts it, the government, by printing money, ‘can appropriate resources slyly and almost unnoticed, without rousing the hostility touched off by taxation.’
Printing money is also way of defrauding people who have lent the government money. Let’s say the government borrows £100 (by selling bonds to people who want to save for their pension). If the government prints more money, then the £100+interest which it pays back, will, in real terms, be worth less than the £100 it borrowed. As Thomas Gale More, a member of President Reagan’s Council of Economic Advisors, reassured him in the mid-80s, not to worry, ‘We can pay off anybody by running a press.’
Governments also like printing money because it creates an artificial and temporary boom which makes politicians look good. In the words of Rothbard, ‘counterfeiting [government printing of money] can create in its very victims the blissful illusion of unparalleled prosperity.’ It temporarily creates, he says, ‘a tinsel atmosphere of “prosperity”’.
In short, governments have every incentive to print money. But apart from stealing from people, does printing money do any harm? Yes it does. It is the cause of ‘boom and bust’, of recessions and depressions. Let’s see how. Imagine a game of Monopoly, in which the total amount of money magically doubles. You suddenly get £400 for passing Go and you get twice as much for winning a beauty contest. But at the same time the cost of the Gas Works and Fleet Street and the price of houses and so on are also doubled. Obviously the effect will be zero. The vital point to remember about printing money is that it is only because the new money makes its way gradually into the economic system that it has any impact at all.
And it is this that does the damage. In the end, all prices will rise, but there is a lag between price rises in different sectors of the economy, and this confuses business. At first the appearance of new money looks like good news. As von Mises says, ‘An increase in the quantity of money leads to the appearance in the market of new desire to purchase, which had previously not existed: “new purchasing power,” it is usual to say, has been created.’
For many businesses, they see the price of the goods they’re selling pushed up. But the price of wages and raw materials has not yet risen (the new money hasn’t reached that far yet). They are deluded into imagining that there is a genuine rise in demand and that their businesses are more profitable than they really are. These businesses then expand.
The trouble is (I’m sure you can see what’s coming), when the new money has made its way through the system, the businesses which have expanded (during the ‘boom’) suddenly find themselves in difficulty. The ‘new demand’ has evaporated and, as the price of raw materials and labour catch up, so their profits return to where they were before. But, having expanded in the ‘boom’ (often by borrowing money), their overheads are now much higher and they have debt to repay. The investment in boom-time turns out to have been what economists call ‘malinvestment’. The phony ‘boom’ has turned companies which may once have been healthy and profitable into loss-making, indebted concerns in danger of going bust.
But that’s not all printing money does. An interest rate, in a true market, is the price borrowers pay to savers for the temporary use of their money (plus a commission to the banks). Printing money artificially suppresses this price (producing more of anything tends to lower the price). But lowering interest rates, of course, discourages saving and encourages borrowing. Since the value of money is falling, you’d be a mug to keep it in a bank, watching it grow ever less valuable. Borrowing, by contrast, is a great idea. The interest payments are low, and the money you pay back in the end will be worth less, in real terms, than the money you borrow. Since the government allows banks to lend money they haven’t actually got (this is one of the ways they produce more money), we end up with the kind of financial and banking crisis which is currently spreading havoc throughout the world economy.
The question of whether the government monopoly is a good thing or not turns on whether (A) politicians, there for a short time, or bankers, whose entire business depends on dependability, can be more trusted not to inflate & (B) whether a monopoly or free competition is most likely to provide the incentive not to inflate. Experience suggests that (A) is definitely in favour of the bankers who, though well short of perfect, rarely engage in the deliberate inflation politicians do & (B) that free competition virtually always provides be incentives to maintain brand reputation whereas monopoly doesn't, so long as extensive forgery is impossible. Thus a paper currency requires government to prevent forgery. A gold or silver economy benefits from having government putting its seal on the metal (ie coining it) to affirm that it is genuine )that is almost all currency until the 18thC) while an electronic currency would all be recorded elsewhere and could not be counterfeited.
This strongly suggests such an electronic currency holds considerable advantages over what we have now, particularly with a large proportion of transactions already being by credit card, is currently practical.
Beyond that I have a thought.
Suppose Virgin bank offered a Virgin dollar backed by a promise to pay, in gold from asteroids, with a set interest rate? On the one hand it would be a gamble since, although the gold is undoubtedly there, we don't know when it can be carted back to Earth. On the other hand keeping your money in government owned currencies is no sort of gamble - we know it will be inflated to a greater or lesser degree.
This could fund a lot of space development.
A different point is that I suspect Greece will shortly become a 2 currency state. When it returns to the drachma there are still going to be a lot of people around with Euros - their main industry being tourism from the EU. I don't see anybody refusing to take Euros from tourists, or anybody else, and such productive industries will be willing to pay in that currency. I don't fancy being somebody on the Greek government payroll but cutting that payroll way back will be good for the country.