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How Housing benefit has harmed us all

I’ve been having a debate with BendyGirl on Twitter, which I think is worth a more substantive answer than can be given in 140 characters.

The base-line cost of housing in the private sector is set by the Government: Benefit recipients whose rent is paid from Housing Benefit to private landlords. These people occupy the worst housing, and pay therefore the lowest rents. Landlords are revenue maximising rational agents, and the Government is a stupid customer. Therefore they charge the maximum the Government will pay for their shittiest flats.

If you have a better flat, you rent it out to non-housing benefit tenants for MORE than you could receive off the Government.

The purchase price of the least desirable flats is set by value of the rental stream that the Government will pay. Any better accommodation is priced at a premium to this, grossly inflated level, all the way up to 3-bed family homes.

Basically it boils down to this: There is no shortage of housing – most people have a roof over their heads. It may not be as nice as you’d like; this is because, as anyone who watches ‘Grand Designs’ will be able to tell you, planning laws are absurdly restrictive. This limits the amount of housing, and also limits the ability of people to make houses to suit their needs. For example, where I live a man built a house with a ‘tower’ on one corner. This became and still is, the most complained about building in the town, even though the centre of the town contains a 60’s concrete monstrosity. The “tower” contains the wheelchair-using owner’s lift – He’d had the house build around his needs, and his travails with the planning authorities were legendary. He was rich enough to win his legal battles and build a big, nice house suitable for a disabled person.

Everyone else has to make do with an identikit ‘executive’ house on a Barratt estate, and even these are expensive. The affordability of housing is the problem because the Government acting as a stupid customer on behalf of the poorest distorts the entire market. If you cut housing benefit, the same flats will be occupied by the same people because no-one else wants them. The cost of this is borne by slum landlords, who get less rent for the same flat.

Anyone going to weep for them?

Thought not. The answer to Britain’s housing problems is to phase out Housing benefit entirely, (and 71 other benefits too) and replace it with a smaller number of payments to individuals, replacing direct payment to Landlords. True, some people will spend it on smack, not rent, but that’s their fault as individuals, eh? What’s true of private tenants is also true of council tenants. The Government should get out of housing provision entirely. Instead of subsidising slum landlords’ jetskis on the Costa Del Sol, and making everyone else pay through the nose for shitty little breeding hutches, we’d actually be helping the poorest. Second we need to relax (not remove, relax) planning regulations, and assume that people building houses on a plot of land are rational. That way, there might be a few more desirable individual houses on the market and one or two fewer shitty estates of endless Barratt breeding hutches.

Who loses?

Slum landlords. Who wins?

Everyone else. What’s not to like?

Update: Burning our money has a more thorough post.

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Markets, Media Bias and Leftish Mythologising.

Douglas Carswell and Dan Hannan have both complained of unthinking media bias in recent days, usually when BBC researchers are clearly looking for, as Mr Carswell puts it, “mr Angry Right-Winger”. They are unable to accept that a libertarian may be happy with the coalition BECAUSE of the influence of the liberal democrats. That ‘right-wing’ does not nessesarily mean lack of concern for the poor, or cheerleading for big business. Indeed it is the smug assumptions about ‘the right’ which go unchallenged by the BBC, even as the Left propose redistributionist policies which act as a boot on the face of the poor, which drives right-wing hostility to aunty Beeb.

The biggest cheer at the 2009 Tory conference was Cameron talking about “taking the poor out of income tax”. This was reported as though Tory activists hadn’t been demanding this for years. Indeed this was taken as evidence of how much the Tory party had “changed”. Whereas if you’d made this call at any point in the last 30 years, the reaction would have been the same.

The Tories may not be a party of the poor, but as Thatcher’s record of the greatest transfer of wealth and power from state to low-income individuals through council house sales, and Iain Duncan-Smith’s well thought out and consistent policies on Tax n’ Benefits show, we do try to be a party FOR the poor. Labour’s record in office is one of stagnating social mobility BECAUSE of their emphasis on redistribution and lack of concern for the incentives they build into the system. Their egalitarian education policies removed a ladder for bright kids from poor backgrounds, either Grammar schools or assisted places, because of spite and dogma rather than a view to what works. Thier opposition to the Tory Free Schools is based on ludicrous and dogmatic ideas of a one-size-fits all policy dictated to the classroom all the way from westminster. They cannot see that in order to raise standards, the tight grip of (whatever the department for education is called this week’s proxies: The) Local Education Authorities, needs to relax and parents need to be the ones setting teacher’s priorities.

On a more prosaic level, the debates I’ve had with North Briton 45, both in blog form and on Twitter demonstrate that most lefties, like the BBC assume as set of opinions and policies supported by people they deem as “right-wing”. This is a “slavish” devotion to something they call “the market” and a savage lack of concern for the poor. No matter how much you try to educate or inform them on the principles of incentives in the market, they still believe that only the state can provide “fair” services. No matter how often you point to the highly selective education systems of Germany, or the Largely privatised systems of New Zealand or Sweden, they still seem to believe that policies espoused by the right are motivated by malice. The best healthcare systems are mixed finance, and never state-run. They ignore the fact that state finance around the world, is best directed by the consumer through a market. The left are unmoved by statistics that today’s “egalitarian” NHS and education system has resulted in one of the most divided societies in the developed world, as House-prices in school catchement areas and heart-disease survival rates divide rich from poor far more effectively than a properly functioning market in education and health services, as exists in those divided, class-ridden hell-holes, New Zealand and Sweden.

This is not just prevalent when talking about politics. I have done 7 or 8 media interviews over the last few days, mainly about the results of the 2 British-listed oil multinationals, Royal Dutch Shell, and BP and mainly on the BBC. The focus is ALWAYS on director’s pay, and who’s to blame for a disaster. Never was there any amazement that BP was able to mobilise the world’s second largest navy to clean up the spill, and it would have been bigger and more effective had Obama the guts to suspend the Jones act. Surprise is always expressed when I point out that St. Barack of O’Bama therfore bears some blame for Oil reaching the Louisiana coast, and state agencies have admitted they got in the way of BP’s cleanup effort. Shell and BP gets a grilling for forecourt prices even though they make a loss that far downstream. Every 6 months, Centrica gets a grilling for having the termerity to make a profit, “at the expense of you and me”, even if retail Gas margins fall.

You see it’s another leftist myth: linked to the idea that right-wingers are selfish and evil, that profit (and indeed directors pay) represents the difference between what you do and what you should pay for a service. It is not seen as the result of delivering a service more efficiently against competing providers, nor is it seen as a reward for the work done in moving, for example, gas from a place of low value: bulk storage, to a place of high value: your boiler. The leftist myth is that profit is a result of “exploitation” by people. Trade, in this view is only of benefit to the vendor, and the profit motive distorts incentives, requiring state intervention to ensure “fairness”. This is the fallacy of mercantilism, and it was demonstrated to be idiocy by Adam Smith 234 years ago. But the left, especially in Britain sticks to the old dogmatic, aristocratic distain for “trade”.

It’s a coherent, but diseased set of opinions which sees exploitation in every free exchange. Tesco “exploits” its customers with cheap booze loss-leaders, and farmers with low prices, and despoils high streets, when it does so by offering food cheaply and conveniently to consumers, who eschew the Butcher and Baker and flock to the supermarket clutching thier hemp bags to carry their conciences. Centrica exploits people in “fuel poverty”, Vodafone “exploits” people with cross border tarriffs. It’s nonsense. Businesses have to make money, and if something’s regulated, like retail banking, then money is made where it’s not. Thus because no-one pays fees for banking services, fines are levied on those struggling. Wherever government steps in (natural monopolies like utilites aside) and regulates too closely, you get warped incentives and someone (probably not the wealthy) suffers.

On any measure of economic freedom (not the same as tax-rates), the freer you are the richer.

Trade, the free market, whatever you want to call it, is the best, most responsive and fairest way to deliver any service. Sure if you want the poor to participate, give vouchers, give state subsidies, or even better make everyone free do do what they will with a citizen’s basic income, but deliver the services through a market, and leave it well alone. Glory in the simple observation that a million people acting in their own interests will create a system fairer and less intrusive than that created by bureaucrats who only serve their own ends. Celebrate the fact that silk stockings, cars, Healthcare and TVs are within reach of everyone in society: in a planned economy only the planners have access to such luxuries.

It is not state action that created the internet for example but millions of users who took something conceived for academics, soldiers and spies and made it the most powerful force in economics and politics. Had bureaucrats been running that, it wouldn’t even be rolled out to every university. Where Labour and the British left have failed, is in their support for the bureaucratic and producer interest; at the expense of the market, which puts consumers in the driving seat. The British left has taken a dogmatic position that the man in whitehall knows best, and that profit is the great distorting evil. Argue for an activist state if you like, who funds services is open to debate. But if the left wants to be relevant, it needs to accept that Markets are better than Bureaucrats at delivering everything from Silk stockings to Healthcare. There are no exceptions to this rule. If you could tell the BBC this, that too would help.

So in short, I am open to argument that the state should FUND services. I am not open to argument that the state should have much of a role in delivery. Because states are incompetent, and bureaucrats are self-serving and needlessly obstructive.

So. NorthBriton45, and trots everywhere from Bob Piper, to Terry Kelly, if you want to tell me why free exchange in a market of competing services won’t work for education and health as they do in ABSOLUTELY EVERYTHING ELSE (and I will rule offside any use of the word ‘fair’ it means all things to all people). You will need to explain why our current system isn’t as disadvantageous to the poor as the statistics suggest; and why Gove’s school plans or any future breakup of the NHS into a system of competing mixed financed, but privately run providers, won’t work. And you’ll have therefore to explain why the Health and education systems of Canada, Sweden, New Zealand, France, and Germany are awful compared to ours.

Good luck.

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Who is David Selbourne?

When I picked up this week’s Spectator, you expect a range of interesting, well argued pieces which inform and provoke, by people of note. This week’s contained one by a “political philosopher and theorist” called David Selbourne who argues that Britain is a country in steep moral decline. If he is, as Lord Carlile of Berriew described him, “perhaps the leading political philosopher and theorist of our day”, then I don’t know about the morals, but Britain is certainly a country in intellectual decline.

You expect “lights out, it’s time to go” nonsense from the right: we’ve just endured 13 years of economic lunacy under a spendthrift government which tripled an already oleaginous tax code and heaped more ill thought out regulation on business and inposed a new crime a day on the benighted people of this country; more than any regime in its history. As a result, I made plans for a new life in Gibraltar should Labour have won the election. But to see this opinion from a man of the left surely can be marked as an admission of defeat for the leftist vision?

But that’s making a serious point, and I would like to indulge in a bit of ad-hominem first. He’s a political philosopher, and clearly thinks in terms of morality. Yet he spends the first few paragraphs demonstrating his profound lack of understanding of economics: “Britain” he says

“has been impoverished by the mismanagement of the National Economy”

that’s true,

“the running down of manufacturing”

which is false,

“and the voraciousness of free-market ethics”

which is arguable.

Manufacturing output has not shrunk since the recession of the early 90’s in the UK. What he means is that Manufacturing has shrunk as a share of GDP. Well so’s agriculture, the sector stupid, visionless people thought was the ultimate root of wealth in the 18th century as people left the land for jobs in factories. The shrinking of manufacturing is a mark of progress. What once took 50 people now takes one and some machines, just as farming used to employ an army of labourers now employs tractors. Quite why hammering things together is seen as noble is a mystery to me, though it is surely the same notion as the Romantics had of the pastoral idyll. Making something you can drop on your foot is not, as common wisdom would have it, any better an economic activity than designing the thing or selling the thing.

So we come to Selbourne’s notion of “Free Market Ethics” which he blames for the atomisation of society. This is arguable and I argue that he’s as full of shit about the morality of markets as he is of the economics of them. There is nothing moral, or indeed immoral, about a free market. The market is a statistical collection of the decisions of millions of moral agents: you and me. What Selbourne is clearly hankering for is state direction of the economy so that less is directed to paying bankers which are “bad, m’kay” and more is directed to nurses and teachers who are “good, m’kay”. However the most cursory glance at the 20th century’s bloody history would show that free markets are vastly superior to state direction in every way. Command economies turned themselves into vast prisons rather than let their people escape, and succeeded as in turning a Nation populated by Germans into a poor country. The relative economic performance since the war of Germany, east and west should give you a clue about the utility of state control of the economy – one’s a mass-murdering prison with an astronomical suicide rate, and one the most successful economy in Europe. Or if that isn’t enough evidence there’s North and South Korea, Cuba and Spain (which had similar GDP per capita before the Cuban revolution), and so on. To suggest a market has “ethics”, though is facile.

He tries to hide his obvious leftism by pretending to balance.

Moreover the truth about these matters is not in the exclusive possession of either left or right but lies between them: you cannot strengthen “social cohesion” while privatising public institutions which hold civil society together…

…why not? Who owns what is less important than whether it works…

…or by slashing public provision in order to pay for the harms caused to the polity and economy by unbridled private interest.

Which is pure Marxist hatred of any sort of mutual or private provision. It’s just as easy to argue, especially now, that excessive public interest in the form of a decade of excessive state spending has damaged the economy more than the private interest.

So let’s look at the individual people who make up the market, and here, you’d think Selbourne was on surer ground. However this part of his essay is a long rant about the teaching of History in schools, which went tits-up with the abolition of Grammar schools, a policy a “man of the left” like Selbourne probably supports axiomatically. Indeed the one place you can still have knowledge of Britain’s history transmitted to the next generation is the fee-paying sector, whose alumni decorate the higher echelons of the professions, politics and indeed celebrity to a greater extent than at almost any time since education became universal.

As for the idea that the country has “coarsened”; anyone of any sense knows that Aristotle had the same complaint. There is nothing new under the sun.

“The difference between freedom and license has been unlearned”

and to cut a long story short, has led to a profound moral collapse, or so he says and therefore we should find “somewhere happier”.

Of course “society” of the great unwashed are always looked down upon by the intellectuals who have always espoused socialism as a way to “improve” the people. The desire to improve has led the Fabians in the past to support euthanasia, condone Gulags and deliberate famines Here, it leads the likes of Selbourne to support policies around welfare and education which have condemned millions to a life rotting on benefits bereft of the skill necessary to secure gainful employment. The majority however still do pretty well, despite the state education system Selbourne describes. This is because people, in all their variety pass on values and knowledge, not just state indoctrination centres Selbourne calls ‘schools’.

I, for example, don’t care whether one family gets round the TV to watch Big Brother with a plate of Pizza, or whether they eat organic rocket and discuss Proust. Whether you inculcate your offspring with the…

“…talent and stamina carefully to record, and to analyse, the travails of this country in a philosophical spirit…”

…is up to you. Whilst there are people of culture and interest, and the blogosphere will show you most eloquently that there are from all walks of life and it is up to you to seek out their company. By indulging in the free movement of people and the free exchange of ideas, we can each seek out our own interpretation of this most excellent collection of islands.

You see, Selbourne fails to understand what the market is. He expects the society of erudite philosopher kings to be laid at his feet by the benign action of an all-seeing state, but the state, or “Society” whatever that is, cannot deliver that any more than it was able to deliver guns AND butter to the Soviet empire. Your choice of your society – your friends and family is every bit of a market decision as that informing the car you drive or the breakfast you eat. Markets are indeed the only freedom, properly regulated with respect for property rights and trades descriptions where appropriate do not represent

“self-degrading moral and market free-for-all”,

but the triumph of freedom of choice. The fact that he bemoans that some people choose not to indulge in philosophical discourse is merely evidence of the universal leftist loathing of the people their dishonest rhetoric seeks to serve.

Now we have a Government which is seeking, however imperfectly, to return power to lower and more organic echelons of decision making, I think there’s a hope that freedom from an oppressive state will lead to a renaissance of learning and a “big society”. But I don’t care, because in my home, and amongst my friends, we don’t need a renaissance of learning or of hope and ingenuity. It never went away.

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The Dance of the Dutch Skimmers

For anyone who didn’t hear it last night, I was on Radio 4’s the World Tonight yesterday, talking about BP, though there’s only so much you can get over in 2 minutes!

Right about the time Tony Hayward faced the shakedown from the House Committee, I mentioned the Jones act. This piece of 1920’s pork-barrel protectionism was preventing sophisticated Dutch skimmer ships, 4 of them, apparently with sufficient capacity to clean up 146,000 barrels of oil per day (the flow before the well was capped last night was around 50,000 barrels per day, of which about half was being recovered) from dealing with the Macondo spill because they are not US registered vessels with American (unionised) crews.


In addition, American environmental legislation aims to prevent ANY spill of oil, means the best is the enemy of the good. The skimmers are about 97% efficient, which means as they pump sea water back into the ocean there is a trace of oil left in it. This means anyone taking 100 barrels out of the water and putting back in 3 would be guilty of putting 3 barrels of oil into the water and be fined anywhere between $1,000 and $4,300 per barrel.

Both the ridiculous Jones act and the tight environmental protection legislation which is not designed to cope with desasters could have been eased by presidential fiat and these ships could have been skimming oil from the water BEFORE it reached shore, a week after the blow-out preventer failed. Instead we had dither and delay.

Having technology like the Dutch skimmers should also allow us to feel more comfortable about allowing deepwater drilling. If the skimmers work then it greatly lowers the environmental risks from future oil leaks in deep water. One advantage to deepwater wells is they are typically very far from shore, giving a long response time to clean up the problem. There would be no need to have a moratorium on deepwater drilling and having 50,000 people loose their jobs

Of course, it might not have been incompetence. It may have been a political calculation: Obama cannot defy the unions, who like the Jones act; he cannot defy the environmental lobby and suspend some environmental regulations for expediency; and his party’s left wing (of which he is a part) wants to end Offshore drilling anyway. This is of no political concern to him: Oil Workers don’t tend to vote democrat, and it’s all concentrated in red states, so who gives a shit about the red-necks Appalachian-Americans anyway? The deepwater horizon disaster gave the president an opportunity, and in taking it he revealed himself to be the chippy, left-wing union bitch his detractors always thought him to be. Perhaps he sacrificed the louisianna shoreline to create a stick to beat “big oil”, and pay off some of his backers.

However 3 days before the well was capped the legal changes were made on the quiet and the Ships are now cleaning up oil. It’s a bit late, and smacks of arse-covering.

This isn’t over: whilst for the first time in 3 months, there is no oil floating from the sea-floor in the Gulf of Mexico, but BP are still merely testing the well to see if it will leak under pressure should the valve be turned off. There is just a few feet of rock between the bore and the relief wells. There is still much that could go wrong and capping the well now is and remains a risk – the safe option would be to do nothing to jeapordise the releif well operation, and increasing the pressure in the well certainly doesn’t help. Should the well-head crumble there would be much more than 25,000 barrels a day of oil going into the sea, and almost nothing BP could do about it until they can kill the well hopefully in 3 week’s time.

Of course the economics and politics forced BP to take this calculated risk – $4,300 per barrel (does anyone think BP will get away with anything other than the maximum fine?) and 25,000 barrels per day, that’s $107,500,000 per day or a Billion dollars every 9 days in fines alone. With BP’s partners Mitsui, Anadarko and Moex refusing to pay their share of the cleanup costs, and Halliburton all being allowed to deny any responsibility; as Transocean continues to pay dividends to its shareholders whilst Exxon lies through its teeth saying “of course we would NEVER have done this that way…” BP shoulders the burden of this spill, not entirely of its own making, alone. And nothing the President has done has served to cap the well quicker or keep the black stuff of the Beaches of Louisiana. For Obama read everyone in American politics who is up for election in November. The US media has been hysterical on the issue, and as a result, every politician in the house, 34 of 100 senators and 36 Govenors are all having a “let’s beat up BP” mainly to avoid attack ads “Bob J. Clusterfuck III let BP drill in the Gulf… Don’t vote for him”. Everyone’s just serving his own base politics.

It’s about time BP had some luck. I hope the cap works and this is over (except for the cleanup) by August, and I hope American politicians grow up on November 3 and remember the little thing called the rule of Law.

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In Praise of the Chinese in Africa


Africa’s hope?

Western aid budgets are generally tied to commitments from third-world governments to behave as far as environmental destruction or human rights are concerned, and to spend at least some of the moolah on their people rather than their wives’s shoe collection or at the Mogadishu Mercedes Benz dealership. The Chinese are criticised for plundering the natural resources of Africa without requiring such sops to the conscience of the affluent, but at least their engagement in Africa can be called “investment” and is refreshingly free of leftist cant.

I’ve argued before that the CAP is responsible for more human suffering than the Second World War, and whilst Europeans and Americans are feather-bedding their farmers, they are preventing Africans getting their cash-crops to rich-world Markets. This means that roads and infrastructure to get cash crops out aren’t built and when the crop fails, there are no roads to distribute the food aid, and everyone dies because they are still subsistence agriculturalists or pastorialists rather than steadily specialising and developing in a productive economy. Famines are rarely about failures of crops, they are usually about failures of distribution. They are also about incentives, as Communist ideologically inspired famines of the 20th century showed.

Chinese engineers are overseeing the building of a Road network and railways that are designed to get raw materials to the market. Plundering Africa of its mineral wealth if you like. But nothing’s going to stop those roads distributing aid in time of famine or allowing farmers to distribute surplus in times of plenty. Likewise mobile phone networks are cheap to build and allow communication by farmers about prices for goods in various nearby towns. These networks will follow the mining engineers’ roads too. This allows, paradoxically, farmers to benefit from higher average prices, and consumers from lower average prices. The difference being lower wastage. Roads also allow medicines, and and effective cold-chain to deliver vaccines to the poor (A rare genuine good done by NGOs and development aid) more effectively.

Much Western development aid does not seem to realise that economic activity is like water, it flows down the path of least resistance. You cannot just give clean water if there is no economy to sustain its infrastructure in the long-term. You just create dependency. A road is only going to be maintained if there is an economic rationale like a mine or cash crop to sustain it.

If western governments spent less time worrying about their aid budgets as a percentage of GDP to appease ignorant hand-wringers in Guardian editorials, and allowed the third world to sell food to us instead, there would be an economy in the poor parts of Africa to develop with in the first place. Without the primary industries giving the rationale for basic infrastructure, there will be no economy, and people in parts of Africa will remain miserable supplicants of western charity. If William Kamkwamba and his family were able to sell stuff in a productive economy, they wouldn’t need to scrape together the resources for a solitary windmill and Poppy Spalding wouldn’t be able to bleat about “the world’s poor” after her gap year of misery tourism. If Africa was allowed to trade on equal terms with the west rather than suffer from dumping of Agricultural produce destroying local markets, and were instead allowed to sell maize to us, then NGO wallahs wouldn’t be cruising around in Air-Conditioned Toyotas distributing largesse like a feudal baron’s consiglieri. But I think the NGO wallahs like being the big man, because (with one or two exceptions) they don’t seem to argue for free trade.

So. China raping the continent for its mineral wealth is likely to do more good for the people of Africa than the entirety of western Aid budgets (which in the case of the British Coalition exists behind a budget ring-fence for reasons of political expediency rather than the greater good). It is ironic that Communist China realises that Trade not Aid is the way to develop Africa and raise its people out of poverty. Whilst America and the European Union subsidise agriculture to the tune of twice African GDP, the twin holocausts famine and Malaria in Africa will continue.

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America is Closed for Business.

What is true for people is also true for the other tax-paying entity, the company. And what Barack Obama has done yesterday, in arbrtiarily confiscating assetts without due process or any form of contract, is to raise the fear of arbritary confiscations from other businesses which may displease the mob in the future. This is contrary to the principles of the rule of Law. This is not a defence of BP, who appear to have been reckless, but no-one thinks they are not already doing everything in their power (they are of course denied some assets for political reasons) to clean up the mess, and they have paid nearly all the claims for compensation they have already received. BP was emphatically NOT shirking its responsibility, and has endured a politically motivated lynch mob mentality orchestrated from the White house. Obama knows what he is doing is illegal and unconstitutional. BP could demand that its contracts are met, that Haliburton and others pay their share, but this would destroy them politically.

The conclusion is clear, whatever Fishermen from Louisiana think, Obama is abusing his office.

The risk of doing business in the USA is already great, and has got much, much worse. Many non-US companies already refuse to have a US shareholder on their books (next time you receive a prospectus, look for the words “not for distribution in the USA” on the front). Thus the capital markets of the world are closing to US interests. Soon internationally minded US companies will start moving their brass plaques from Delaware to London, Frankfurt, Dublin, Dubai, Hong Kong or other more kindly jurisdictions. Americans may not notice this while their domestic capital markets are wide and deep, but they may find their next recession deeper and longer as the once great nation slides back into the protectionism that caused the last depression.

Obama. By pandering to the mob by offering to keep his “boot on the throat” of BP and demanding extra judicial compensation (which WILL be used as a political slush-fund) has become the worst president in American History. And given who he followed, that was always going to be tough. A president of less historical renown (no peace prize for Mr Coolidge), but much greater stature said “the Business of America is Business“.

Not any more.

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People don’t like paying tax!

(Via) I find an interactive map which tracks the movement of Americans around their country. And the interesting thing is the migration from blue states to red. The reason is state income taxes. Basically Americans can flee states with high income taxes and move to get better standards of living by paying less tax.

As can Europeans.

Of course this will come as a surprise to socialists who think that the lovely boondongles of free at the point of delivery healthcare and education are sufficient to make people want to pay more tax. That might wash for some idiots committed to their beliefs (though I’ll be surprised if his or anyone else’s tax return actually contains a voluntary extra payment). But most people want to pay as little as possible.

The people with the most ability to move are, of course, the wealthy. The wealthy, rather than “taking more out” of society, actually pay disproportionate amounts of tax and use services provided much less than their poorer neighbours. High marginal tax rates push these people away, meaning there is in the long-run less money to fund the boondongles socialists so love.

Economic freedom is an important component of freedom, and, yes, a well designed healthcare system (ie not the UK or US) is an important part of economic freedom. But economic freedom also means keeping taxes as low as possible, in order to fund the things that the state does provide best, but let the rest of the people get on with what ever they want to do with the rest. Otherwise, People tend to move, by whatever means necessary from places of high state control to places of low control.

In Britain, socialist fiefdoms like the North of England and the West of Scotland are seeing their brightest and best move south, leaving a broken rump of state-dependent people behind. Socialist ‘paradises’ like the German Democratic Republic for example had to build walls to keep people in, an option not open to California or Glasgow East.

The message is simple. The more you allow other people to become a burden on those who pay for it, the more resentful those who pay will become. The British welfare state is now too big, too generous and too unquestioning for the people who are asked to fund it to do so willingly. If you provide an opportunity to escape – as millions of Britons do each year to southern France and Spain, where the state intrudes much less rudely on one’s life, they will take it.

If you turn a free, prosperous country into an overtaxed panopticon staffed with ghastly bullying state employees in high-viz vests; rich, productive people will leave. The fact that the UK remains a better place to live than former communist countries in Eastern Europe or War stricken African hell-holes like Somalia where most of New Labour’s unchecked immigration is from, is not exactly a ringing endorsement of the experiment in soft totalitarianism.

Low, fair taxes. Less ‘punish the rich rhetoric’ and fewer state prod-noses. And, if you’re George Osborne, don’t raise CGT or abolish higher rate pension tax relief. It may (or probably not) get you a favourable headline in the Daily Mirror, but will only swell the exchequer of Switzerland.

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Skimmer ships

After Hurricane Katrina, George Bush suspended the Jones Act which requires that ships plying trade between US ports must be US registered and have 75% US crews (unionised, naturally).

Obama has NOT suspened this act meaning dozens of Skimmer ships – a type of ship designed to clean oil from the sea, the best of which are European are unavailable to help contain the Gulf of Mexico spill. Dutch ships are standing by. These have not been allowed to enter US territorial waters, despite the requests of a number of locals politicians from the affected area Republicans. The answer given will be because these ships don’t perfectly clean the water, and leave small residue with the water they pump back out of the storage tanks. The real reason, of course, will be union pressure to sustain a despicable piece of typically American protectionism.

I told you he’d disappoint.

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Protest in Parliament Square.

There’s a bit of talk around the place about whether protesters should be cleared from Parliament square. Iain Dale thinks they should be. And predictably Old Holborn thinks they shouldn’t be.

The Libertarian in me hates any state (by this, I mean specifically the police) activity which arrests anybody who isn’t causing anyone harm. However, the right to protest does not include the right to set up a squatters’ camp opposite parliament. The right to protest does not include a right to erect shelter on land which does not belong to you, for which you’re not paying for the right to use. So Brian Haw has been arrested again. And I am heartily sick of the sight of him, and have been for a while.

Whilst I would never deny him, or anyone else the right to protest, I feel is is within the rights of the state to deny him the right to erect a tent or more permanent structure on land he doesn’t own. Limit idiots who want to call the Iraq war “illegal” (it wasn’t) to a sandwich board and placard each, and see how long their protest lasts if they’re exposed to the weather.

Because there are other people who might want to protest in Parliament square occasionally, which is a bit difficult if the Socialist Worker (I recognise that font anywhere) has monopolised the entire frontage of the south side of the lawn in perpetuity. Perhaps the police have been heavy handed, but British fair play and all that. Brian, you’ve had your say, now fuck off.

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Those BA Stirkes

Now the issue as I understand it is that the BA cabin crew are amongst the best remunerated in the industry. BA also flies with the greatest number of Cabin crew per flight. BA wishes to reduce the number of crew per flight (to a figure still some way above the industry average) and cut the pay of new recruits (not existing employees) because it has struggeld to make money in the face of onerous pension liabilities, the economic downturn, the ash cloud and oil-prices. The Union, for some reason, thinks this completely unacceptable, and calls strikes with the potential to bankrupt the company, thus ensuring that UNISON members (and the colateral damage of everyone else at BA) lose their jobs and pension.

This strikes me as so HEROICALLY counterproductive, the only reason I can see for this is the internal politics of the Labour movement. A big strike, and a high profile corporate casualty would strenghten UNITE and Wheelan in the battle to shape the Labour party. BA employees voting for a strike are pawns in someone elses game of chess.

Or am I being a tin-foil hatted conspiracy lunatic who should spend less time on t’interweb?

Declaration: The writer hopes to fly BA this week.

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