Tim Worstall

From someone who knows how to do economics. Or at least statistics.

Or maybe it’s even just someone who knows how to us excel.

I’ve got two sets of data about US States.

One is the population of each state.

The other is the Gini (a measure of inequality) for each State.

What I want is one plotted against the other.

Quite simply, I want to try and see whether there’s a correlation between the amount of inequality and the number of people. I would, after all, expect greater variance in incomes the larger the number of people (as we expect greater variance in height, weight, sexual prowess and all the rest the larger the population).

Anyone able to do that simply?

Update: Thanks, this has now been done. Yes, there does seem to be, eyeballing the graph, a connection between gini and population size. That’s what I wanted.

On the creation of money and credit.

Amazingly nowhere, absolutely nowhere, does she mention that unlimited expansion of the money supply by allowing banks to create unlimited credit might, umm, well, you know, might just, trigger a tad of inflation.

A MOTHER of two who falsely accused her estranged husband of rape because she wanted him out of her life was jailed for four months yesterday.

Surprising really, given how rare we’re told such cases are.

Economists at Société Générale recently calculated that in the United States, the income of the highest paid fifth rose by 60% after 1970, while for all others it has fallen by 10%.

You don’t seriously believe that nonsense do you?

That the income of 90% of Americans has fallen in absolute terms over the past 39 years?

That would indeed be an indictment of any economics system if true, the thing is it’s manifestly bollocks.

Falling incomes for the majority over more than a generation? No, manifestly crap.

Anyone actually seen that report? Care to unravel what it’s actually saying?

Oh for fucks sake, this man is thought of as an economic thinker?

The argument on the progressive right is that since the poor suffer the greatest marginal rates of taxation (the bottom fifth of households also pay a greater share of their income in overall taxation than any other group),

Ye can’t go around comparing average tax rates with marginal tax rates you silly little man!

It is true that some of the working poor face very high marginal tax rates. It’s also true that the poor face high average tax rates as a result of the regressive nature of the indirect tax and excise system. But the latter does not prove the former nor do they in fact have very much to do with each other.

A far better idea would be to distribute a substantial proportion of the return to the poor via investment vouchers. These vouchers should only be activated in conjunction with others – creating an associative investment pool. With appropriate advice, a whole new class of asset investors can be created at the bottom of society.

Russia  tried this, didn’t they…..worked out well then?

Further, if they invest in ordinary businesses they will only get a standard return. If, however, they choose to invest in social enterprises, their investment will generate both an economic and a social profit. Investment in local shops, for example, will give both a monetary and social stake and return.

Erm, that’ll be tough, as local shops lose money, they being less efficient and thus attracting less trade than supermarkets.

Money that the poor deposit in their own communities is siphoned off to lend to more creditworthy customers elsewhere. We need to enforce a local monetarism that ensures a greater supply of money remains in our most deprived communities.

Ooooh, joy! Let’s Balkanise the economy! Yes! reduce the geographic spread of the division of labour…..autarky! Tony Benn will be happy.

Are people within the Conservative Party seriously listening to this man?

Alan Johnson blathers on about how voluntary ID cards will be wonderful at protecting our identity.

Of course, creating one single card, easily forged, that proves identity will simply make theft of identity easier.

But, here’s the kicker:

Our identity, the information that makes us unique, is something that we get called upon to prove each day, when we are opening a bank account, renting a flat, proving our right to work.

Those aren’t, of course, things that we do every day. Any one individual might do any one of those things every….oooooh, couple of years perhaps?

But it’ll be a very easy step for government to insist that we must have a voluntary ID card to indeed prove those things, won’t it? Turning voluntary into compulsory.

Looks like that edifice is finally going to come tumbling down.

A test case is to be heard in the chourt of appeal within weeks, which will challenge the investigation for the first time and could expose a “huge miscarriage of justice”, lawyers claim.

Chris Saltrese, the solicitor representing the convicted man, Anthony O’Shea, said: “If his appeal is successful the convictions of others for the same offence will fall too.

“We are talking in the hundreds and we say this is a huge miscarriage of justice.”

A new gameshow on Turkish television will pit rabbis, imams, monks and priests against each other in an attempt to convert sworn aetheists to their respective religions.

Quick, someone buy the rights.

I want to see Richard Dawkins as a contestant!

Homosexual “weddings” should be celebrated in churches, a Government minister has said in defiance of religious teaching.

Or not, as the case may be:

“I would like to see churches be much more open to the idea of gay relationships or partnerships being celebrated in church.”

It’s not really a Minister stating that this should happen.

It’s an individual who happens to be a Minister saying that he would like to see this happen.

Chris Bryant is free to ask that the CoE and RC change their dogma. Just as I am free to ask Wahhabbi clerics to agree that this Mohammed thing was really a bit of a joke, wasn’t it? Brought on by excessive contemplation of camels and deserts?

That the Wahhabbi, CoE and RC clerics need take no damn notice of either of us is also a given. For neither of us, Minister or not, has the right to insist that other people change their beliefs nor the structure of their religious orgnaisation.

We only have the right to go off and found our own religion which accords more closely with our own beliefs/prejudices.

A coroner has dismissed claims that cannabis is harmless during an inquest into the death of a trainee chef who died from the “toxic effects” of the drug.

What toxic effects of cannabis?

Geoff Roberts, the deputy coroner for Cheshire, said: “People use cannabis and think that it is a harmless property. We have heard clear evidence in this case that it is not. Very sadly, Hadrian died as a result of the direct toxic effects on the heart that the use of cannabis had. As such, it was an avoidable death.

“This case highlights that cannabis use is potentially life-threatening.” Mr Roberts added: “We have heard how over a period of time, for some years, he had used cannabis and perhaps other illegal substances.

“This is a very sad case because, despite his turbulent past and cannabis use, he had got a job as a trainee chef. The post-mortem showed no findings of recent drug use.

“But his body was left a legacy of using cannabis in the past, which directly led to his death.”

Really?

Dr Sally Hales, who carried out the post mortem examination, said the teenager had inflammation of the heart and that “a history of using cannabis, amphetamines and cocaine would appear to be the most likely cause”.

Ah, the effects of meth and coke….not the effects of cannabis.

More sexist segments of the public love stories about women in their mid-30s sweating over the possibility of never having husbands and babies. They can then cluck their tongues about how women thought they wanted feminism, but look: feminism ruined them for love and family; feminism spawned generations of women who want egalitarian marriages formed after they’re established in their careers, and this often means putting off child-bearing until the years when fertility is declining and menopause is looming.

Yes, Amanda Marcotte is writing for Comment is Free.

We’re doomed I tell ‘ee, doomed lad.

That though begs the question, is there a limit to possibility? And does that mean achievement is constrained? It is this question that fundamentally changes the approach used here from that offered by conventional economics at this time. Conventional thinking is that the individual should think their consumption unconstrained, even though the reality is otherwise. In the economics proposed here is the individual is recognised to be constrained they then recognise a different goal – which is to work to achieve within the constraint. And, of course, the answer is that the individual is constrained, and there is a limit to possibility that they must accept.

Now I understand what he’s saying and in half of it he is correct. We do face constraints upon our actions and our consumption.

This is because resources necessary for the satisfaction of our desires are limited.

Where he’s wrong is in thinking that conventional economics thinks any differently.

Given these two assumptions it follows that there is a fixed material amount of resource we may each enjoy at a point in time. That defines a practical limit to achievement.

Sure, resources are scarce.

Here is part of the GCSE economic syllabus. The part dealing with “Basic Economic Problems and Decisions”.

The central importance of scarcity
Emphasis should be placed on the universal problem of scarcity and
how this necessitates choice.
The concept of opportunity cost
Candidates should have a basic understanding of rational choice based
on the comparison of benefits and costs.
Markets and resource allocation
Candidates should have an understanding of how markets allocate
scarce resources and appreciate that resources are also allocated
through non-market mechanisms. Candidates should begin to assess
the outcome of resource allocation in terms of efficiency, sustainability
and equity.

Well done Mr. Murphy. You have just managed, from first principles, to recreate the central insight of economics. Resources are scarce.

The only bit that puzzles me is why you think there’s anything new in what you’ve found?

I receive a comment from Sam Thompson of the new economics foundation:

Amount of money nef receives from the current government = £0

Really?

Sam, might I suggest that you read your own accounts?

Principal funding sources
Our funding sources are diverse and we receive funding from trusts and foundations, local, regional
and national government and through consultancy contracts.

There is of course wibble room here for the nef.

The aim of nef is to work to establish an economy as if people and the planet mattered.
To advance this aim we work in fotlr Centres:
The Centre for Global Interdependence
. The Centre for W ell-being
. The Centre for the Future Economy
The Centre for Thriving Communities

It’s the four Centres that get the government dosh, not the nef directly. But since they do mix funds, do transfer and do lift up funds from the Centres to the central body:

e) Restricted funds are to be used for specified purposes as laid down by the donor. Expenditure
which meets these criteria is identified to the fund, together with a fair allocation of overheads
and support costs.

Mhm, hmm…..

Support costs are, umm, £567,000 or so.

So, we’re told that nef gets no money from the government. nef’s accounts say they get money from local, regional and national government.

From the apparent structure, the government money goes to the four Centres, each of which are charged support costs, those support costs being what pays for the nef.

This is no government money goes to the nef is it?

Still, I suppose it’s a paragon of clarity and simplicity compared to the normal reports from that quarter. Remember the Green New Deal which suggested we could increase the capital available for investment in green lovely thingies by lowering interest rates and imposing capital controls in a country that has imported capital for decades? Admittedly, I think that section was written by Caroline Lucas but then who would be stupid enough to let her write anything about economics?

At least we know they’re being misleading rather than the more normal ignorance of the real world.

Fredrik Reinfeldt, the Swedish Prime Minister, said yesterday that his country, which takes over the EU presidency today, would present its own example of 50 per cent economic growth since 1990 combined with a 10 per cent cut in CO2 emissions to try to win over sceptics.

OK, good trick, how is it done?

Since 1991 Swedes have paid 20p per litre in carbon tax for petrol, which has helped to cut emissions by 20 per cent, partly by encouraging public transport systems to switch to biogas. “You need to get the right price signals. We introduced a CO2 tax nearly 20 years ago and it is the highest in the world,” Mr Reinfeldt said.

Excellent, so now we know.

Great, let’s go do that then.

Ah, we already have. The fuel price escalator (fuel duty escalator to others) has added at least 23 p to the price of a litre since introduction in 1993 to meet our “Rio committments”.

Even more excellent then, we’ve already done what we need to do.

Rule that hasn’t changed

- The bend of a banana must be “the thickness of a transverse section of the fruit between the lateral faces and the middle, perpendicular to the longitudinal axis, must be at a minimum of 27mm(1.06ins).

Source: European Commission

Yup, even they admit that it is still a criminal offence to sell a banana if it doesn’t meet this shape standard.

They’ve still not understood the basic concept here, that it is insane to have such prescriptive rules trying to cover an entire continent.

If producers, wholesaler, retailers, want to get together to have a classification system, good luck to them. But using the criminal law to enforce such is, as noted, insane. People should be able to buy and sell outside the classification system if they so wish.

Absolutely fuming.

This is such a good idea I just wish I had thought of it.

The thing about freelancing is that you’ve no idea of what work you’re going to get in the future. So being able to con an editor into agreeing to run 100 articles, one a month, is pretty good. That they’re committed to 100 pieces of intensely dreary tosh isn’t, but still great for the writer.

Like Andrew Simms, who s currently in month 11 of his run:

89 months and counting

This truly is bizarre though:

They’re still out there, the deniers, but they become increasingly exotic. And excuses for inaction on global warming become stranger. One I found would have us believe that spending on wind farms was responsible globally for “killing millions” through the misallocation of resources.

Now Andrew works for the new economics foundation. It’s pretty strange to come across someone who has any claim to knowledge of economics who is going to deny one of the basic tenets of the subject, that of opportunity costs, isn’t it? That if you spend tens of billions on windmills then you can’t spend those same tens of billions on vaccines, or clean water, or whatever else that might save more lives?

…many of the world’s problems arise because so many people do not understand economics.

Arthur Seldon, age 17.

Going to be interesting seeing how they manage this:

greater capital and liquidity requirements.

Hmmm

The proposals will “not be cheap” for the industry, which will have to accept “lower returns on equity in the future”, according to Mr Tucker.

Whether or not that’s a good or a bad idea is one thing.

But how do you square greater capital requirements, lower returns on equity (two sides of the same coin) with the need to increase lending?

Well, you can’t. It’s impossible. So, according to all of those telling us about how to avoid further recession and even depression by expanding lending we, umm, given the choice between snarling at the bankers and accepting further recession or leaving them be and getting growth going again we’ll…..umm, we’ll snarl at the bankers.

Wondrous.

Ministers have drawn up a range of measures that would allow middle-class pensioners to keep their property. Options could include compulsory insurance paid throughout a career,

We have compulsory insurance paid throughout a career: it’s called National Insurance.

However, our Lords and Masters piss away the income from this levy on other things, not the care that is paid for. Who could possibly believe that any such tax would indeed be saved to pay for care?

Well?

Quite, this is simply a way of getting through an NI increase.

Of the new licence to teach, Mr Balls said it would be overseen by the General Teaching Council for England (GTC) with heads deciding if a licence should be renewed.

He said: “We propose it will be the GTC who will be taking overall responsibility for the licence to teach.

And how long will it be before only those who have a post graduate teaching qualification are considered worthy of gaining such a licence?

This will simply increase the control of the educational bureaucracy, those who run the teacher training process, over the profession. And not in a good way either.

As we all know, no Parlaiment can bind its successor.

Mr Johnson said: “Holding an identity card should be a personal choice for British citizens - just as it is now to obtain a passport.

“Accordingly I want the introduction of identity cards for all British citizens to be voluntary.”

Asked if the cards would ever be made compulsory he said: “No.”

So this is simply bollocks. They’ll currently carry on with the National Identity Register and it’ll still be open for someone at some point in the future to insist that the cards themselves will be mandatory.

Better by far to kill the entire project stone dead.