“Even as you read this, in almost every hospital in the country, there will be elderly, vulnerable people left for hours and sometimes days on trolleys. Each year, thousands of British people – the young, the old, the rich, the poor – die unnecessarily from lack of diagnosis, lack of treatment and lack of drugs. They die and suffer unnecessarily for different reasons, but there is just one root cause: the blind faith the Government has in the ideology of the National Health Service, and our unwillingness to accept not just that it doesn’t work, but that it can never work.”

“…we must abolish the NHS as we know it, abandon our unique obsession that all health care should be free, and become as comfortable with mixed public and private medicine as they are elsewhere in the developed world.”

It’s tragic that so many of his criticisms still seem to be valid.

Secondly, Ed Miliband on the Government’s proposed healthcare reforms:

“That bill remains what it was in the beginning: a misguided attempt to impose a free market free-for-all on our National Health Service.”

As Browne noted, other countries have mixed private and public health systems. Those healthcare systems are the best in the world. Miliband is criticising the reforms because they’re too similar to the best healthcare systems in the world.

Words fail me.

From the first article again:

“The noble ideology of communism had to be ditched because it didn’t work. So the noble ideology behind the NHS should be ditched because it costs lives. We should ditch the ideology and ditch the NHS.”

Quite right.

Last week, the Eurozone leaders announced their latest agreement to save the Euro. Essentially, what they announced was what it is that they’d like to do, but they haven’t really worked out the details of how they’ll do it. It’s only small details that are left to sort out, for example where exactly the money is going to come from…

So they haven’t really agreed much at all. And the stuff they did agree, doesn’t even solve the underlying problem. So for the umpteenth time, the EU leaders have just kicked the can down the road.

Straight after it was announced, some people were sort of facetiously wondering how long it’d take before the plan would fall apart. As it turns out, less than a week! Because the Greek leaders have decided to have a referendum about whether to sign up to the plans. EU leaders aren’t used to the concept of people having a say on Europe, so this has perplexed them. And everyone is worried that when the referendum takes place next year, the Greek voters will give the wrong answer.

Meanwhile, Greece is on track to have a primary surplus by 2012. Which will mean they can safely default, and the EU can go screw themselves…

What’s amazing is just how dysfunctional it is. The Eurozone leaders get to ponce around, looking self-important whilst managing to completely dodge the issue, making it all the more likely that the whole thing goes tits up. It would be quite hilarious to watch, if it weren’t all quite so serious.

As far as I’m aware, one of the main messages that they’re trying to get across is the idea of the “99 percent”; or the idea that 99% of people are struggling in the current economic climate whilst 1% are prospering, and that the 99% are angry. It’s a simple idea. Okay, for all sorts of reasons it’s also a little bit inaccurate, but the general thrust is good enough. Because fundamentally, the protesters are probably right to say that most people should be pretty pissed off at the state of our economy. But the protesters are angry at banks and stock markets (wtf?) and capitalism in general. This seems to me to be a little bit confused. Do they really want to dismantle capitalism?

A protest, last week.

Capitalism is generally taken to mean things like the right to private property and to free trade. And are the Occupiers honestly against those things? Well, if I went down to the  occupation camp and tried to pinch their big anti-capitalism sign, one of their tents, or the iPhones they use to post updates to Twitter (yes, the poor 99% who can afford some of the most expensive consumer electronics in the world), I think they’d be rather keen to uphold their right to private property. And are they against free trade? Well, by choosing how to use their labour, arguably they are exercising precisely that right. Because a part of free trade is the right to freely trade your own labour; and in this case, the occupiers have exercised that right by choosing to use their labour to protest the state of the economy (and so one can argue that implicit in their protest is the idea that they’re protesting against their right to hold that protest. Consistency FTW!). If the government (or anyone else) tried to remove that right – by arresting the occupiers, for instance – then I’m confident that they’d be pretty upset.

So to be angry at capitalism is, I think, a mistake. At least, it’s a mistake to be angry at properly-implemented capitalism. OccupyLSX shouldn’t necessarily direct their anger at the banks or stockbrokers (unless they own shares in a bank which has lost value, in which case, feel free). They should be angry at governments, for oh so many things. For allowing themselves to be open to lobbying, and bowing to the influence of vested interests. For meddling too much in the economy, trying to maintain the housing bubble which lead to this crisis. For the arrogance of the Euro project and repeating the mistakes of the past. For spending too much in the boom years, ramping up debts which we now need to repay. For breaking one of the golden rules of capitalism – that bad businesses must fail – by bailing out the banks which behaved so irresponsibly prior to the downturn.

The problem isn’t capitalism; at least, not capitalism in it’s proper form. The crisis is not the failure of economic liberalism, and the answer is not something like a laughably-impractical “Resource-Based Economy“. Actually, we want our government to be more liberal; to spend less, to leave more money in the pockets of the populace, and to not interfere in matters best left to the market. Because when you trace it back, a good chunk of our problems stem from bad government interventions, or the “crony capitalism” we see at present.

Of course, this would involve politicians deciding to make themselves less powerful. And I have a sneaking suspicion that the type of person most likely to want to be a politician, is not the type who is likely to take power away from themselves once they’ve gained it. So we’re probably screwed.

- Photo by flickr user wheelzwheeler, licensed under Creative Commons.

Back when the minimum wage was introduced, there was a particularly interesting argument put forward against it. This was that it would have an adverse impact upon people whose labour is not worth the minimum wage. In particular, it was argued that younger people with less training or experience, would simply not be worth hiring any more. Given today’s unemployment figures, this argument seems at least plausible.

The intention of a minimum wage is – presumably – to ensure that people are paid enough money to allow them to have somewhere to live, food to eat, and some sort of good standard of living. And that’s an absolutely good intention. But is pricing people out of the job market really the best way to deliver this? Isn’t it better that people work for whatever wage they’re able to collect (and, of course, are willing to work for) so that they’re at least gaining experience which increases the value of their labour, and allows them ultimately to secure better-paid employment? And if a wage is deemed to be too low, wouldn’t it be better for the government to supplement it, rather than trying to force employers to pay over the odds?

Is it time to scrap the minimum wage and come up with a more intelligent way of dealing with this? Perhaps something like a negative income tax?

If you’re on Twitter then you may have seen this article by Charlie Brooker being retweeted today, as seems to happen most Mondays. Brooker’s articles are generally fairly popular amongst the Twitterati, and so they should be as they’re usually quite amusing. But with the latest one, I really couldn’t get past the pretty fundamental error.

The title of the article is “If capitalism has failed, how the hell do we pay for our Shreddies?“. And so we can see the issue. It’s a pretty basic error, but sadly it’s one which is commonly repeated in the present climate: the current economic crisis isn’t really a failure of capitalism – in many respects, quite the opposite. So it’s perhaps a little foolish to be pondering its death.

Fundamentally, the credit crunch which precipitated the present economic mess, happened for a number of reasons. Banks lent money to people to buy houses, which caused house prices to rise. Sadly, lots of money was lent to people who couldn’t afford really afford the loan (and it’s very easy to blame greedy bankers for this; no-one seems willing to blame the greedy consumers who took on debt they couldn’t afford. I suppose it’s politically more convenient to blame bankers though). So when those debts went bad, the banks repossessed the property and put them up for sale, to try to recoup their money. This influx of property into the market drove house prices down. Mortgages are loans secured against the value of a property, and so we reached the situation where there were lots of loans which were secured against property which was worth less than the value of the loan (i.e. if the bank sold the house, they wouldn’t get back all of the money they lent in the first place). Calamity ensued*.

Reading the preceding paragraph there are two blatantly obvious questions: why did the banks feel able to lend the money in the first place, and why did lots of people suddenly become unable to afford their debts? The answer is that central banks and governments set interest rates according to whatever agenda they have at the time. In the early 2000s interest rates were set low in an attempt to soften the effects of the dot-com crash and the terrorist attacks in America in 2001. This had the effect of reducing the cost of lending money, which meant that loans became affordable to more people. Because of the low interest rates, banks could now give mortgages to people who previously couldn’t afford them. And correspondingly, consumers presumably felt encouraged to take on this debt because they assumed that they’d always be able to find affordable finance, even if their initial loan became too expensive. After all, house prices were always going up…

Of course, the low interest rates weren’t sustainable, and when they rose in the latter part of the 2000s, the cost of debt rose accordingly. And then the people who could barely afford their loans when the rates were low, suddenly couldn’t afford the debt at a higher interest rate, and had no way to refinance their debt. And so they defaulted.

We can see then that one of the key weaknesses was nothing at all to do with capitalism, or the free-market liberalism which is often assumed to go with it. It was a housing bubble fuelled by low interest rates. A colossal failure of interventionist policy, and a reminder that centrally managing a fundamental part of the economy is not necessarily a wise thing to do. And this lesson is something that those people who are generally in favour of capitalism go to great pains to point out.

Which isn’t to say that there weren’t market failures as well; the existence of banks that were too big to fail, for instance. But without the interventionist policy – the setting of interest rates – it’s highly questionable whether the conditions would’ve existed for the rest of the crisis to follow, or for it to be as profound as it was/is. Far from the death of capitalism, this – along with the troubles we’re now seeing caused by excesses of sovereign debt – should really signal the end (or at least a reduction) of the interventionist state. Probably won’t be though, and we’re all the poorer for it.

Literally.

–

* I’m afraid I’m simplifying a little here; there are other factors, such as the way that risk was dispersed throughout the financial system, and the rationale behind subprime lending. That’s somewhat beyond the scope of the point I’m trying to make though.

I remain baffled at the anti-Murdoch bent to the whole thing. I don’t understand why dodgy activity at the News of the World has derailed the BSkyB bid (if indeed it has for more than the short term), aside from the politics of the situation. Because the issue there was about media plurality, about competition in the sector, and not building up businesses with too high a share of the market (although if we really were concerned about such a thing, a good place to start would be the BBC). The argument has been about News Corp and the Murdochs having too much control over the media; yet the bid has actually been derailed because the Murdochs didn’t have control over the News of the World (I think it’s fairly accepted that the management of News Corp didn’t know about the extent of the hacking until relatively recently). Which is an interesting little contradiction.

What’s I find really interesting though is to compare this with another recent media scandal, this time concerning the scribblings of Johann Hari. He was caught out for plagiarism; he took things that people wrote in books, or in interviews to other journalists, and pretended that they’d said that in interview with him. Hari wrote/writes for The Independent (amongst others), which is generally held in pretty high regard. Whereas I think it’s fair to say that the News of the World was generally not held in the same esteem. Yet it’s the “good” journalist in the “quality” paper who got caught out for plagiarism, whereas the journalists from the trashy NOTW were caught out for basically trying to find out the truth. All other factors aside, surely the former is the greater crime against journalism? Plagiarism has to be worse than going to extreme lengths to investigate a story?

Fundamentally none of this changes my opinion of the papers, or the media generally. I’ve long thought that they’re all as bad as each other; that the Grauniad is as bad as the Mail is as bad as the Telegraph. They all have their biases, and all employ journalists (such as Hari) who are willing to misrepresent facts to make an argument. Which is a massive problem, because it leads to a public which is horrendously misinformed about fundamental issues. Such as this staggering finding that 70% of people think that the government is currently reducing the national debt, or the general ignorance towards technical subjects such as nuclear power or climate change (although there are certain parts of academia that are confused about the latter, so I guess we shouldn’t be too hard on the general public). That is the real scandal of the UK media, and the blame lies at the feet at more than just the Murdochs.

I wanted to post this yesterday, but I’ve been working away oop north where my only connection to the internet has been flaky 3G reception on my iPhone. Which basically meant that I couldn’t be bothered to write a blog post.

Anyway, read this post from another blog, which gives a taste of what public and private sector pensions are like. An idea of the massive difference between the two.

The crux of the matter is that public sector pensions are massively generous compared to those offered to the private sector. It’s worth remembering that private sector employees contribute more in tax revenue than public sector ones (there’s more of ‘em), and that tax subsidises the public sector pensions.

So what the strikers want is for private sector employees (who have worse pensions) to pay more in tax during their working lifetime, so that public sector employees can continue to enjoy more money in retirement than those in the private sector can expect to get. The strikers want other people to pay for them to have a cushy retirement.

It’s not as if the government’s proposals are stingy; as I understand it they’re still way better than what the the majority of people in the private sector receive. So those striking would still get a comparatively brilliant pension, just not as amazingly good as before.  They’re already in a position of privilege, but they still want more.

If anyone wishes to try to justify this, good luck. Personally, I cannot see how there can be any possible justification, because it’s just naked, unadulterated self-interest, with scant regard for equity. I think it’s disgusting and contemptible.

If you need a measure of how unjustified the strikes were, look how eager the Labour leader has been to distance himself from them. He essentially won the position because of the support of the big unions, and here he is condemning their actions. That tells you something (and as a sidenote it’s disappointing that the broken record act overshadowed what he said, because for once he is right. The first glimpse of the opposition doing its job half decently; we should celebrate!)

What amuses me is that most of the people who support this, are also likely to be those who denounce the activities of greedy bankers. But it’s hugely contradictory to support this behaviour from the public sector whilst ragging on bankers. Hell, at least bankers try to make it look like they deserve it, and don’t (usually) force it from other people.

Apologies if this post isn’t as eloquent as it perhaps could be. To be honest this sort of thing makes me properly angry, so it’s all I can do not to fill the screen with a string of expletives.

“this paper finds new empirical evidence supporting the idea that economic freedom and civil and political liberties are the root causes of why some countries achieve and sustain better economic outcomes… These results tend to support earlier findings that beyond core functions of government responsibility — including the protection of liberty itself — the expansion of the state to provide for various entitlements, including so-called economic, social, and cultural rights, may not make people richer in the long run and may even make them poorer.”

So economically, its free markets, low taxes, and small government which makes us all richer. Good to know, eh?

The bewildering thing is that people have argued this for a century and a half, and this is not the first piece of evidence to support the argument, not by far. And yet lots of people (mostly in the Guardian, it seems…) will still argue against this, will argue against the evidence.

So much for pragmatism, I guess.

“The media debate has ignored the most obvious evidence: the fact that almost everywhere where they have been tried, market approaches work better than centrally planned government ways of running the same activity. Not all markets work well, but even the bad ones seem to do better than central planning.

Many arguments against competition in the NHS seem stuck in a 1930s time warp and ignore 80 years of world history that have taught even the Chinese Communist Party that planned economies are a failure – and this is true even when compared to very imperfect market ones.”

I still don’t understand why people think that healthcare should always be provided by the state. As far as I can see it, such strict adherence to state provision is the answer to a question that no-one is asking. The basic desire – that I think most people can agree on – is to have a good service, for the best value for money, which is accessible to everyone. In that case, as long as the government pays for the treatment, does it really matter who provides it? Shutting out providers other than the NHS simply means that we’re excluding providers who might, potentially, be able to do something better, cheaper or quicker than the NHS can. Can anyone explain why this is a desirable thing?

Some people will say “ah, but we don’t want to be like America, do we?!”. No, and the proposals do not mirror the American system. The American private insurance system, which means that some people simply can’t afford care, is not good. And that’s also not what’s being proposed. The market bit of the American system works well, and it’s notable that countries like France – which has private providers and a public insurance scheme – generally have better health systems than our own. The evidence stacks up, and as far as I’m concerned that trumps any ideological misgivings.

At the moment, it’s running at 32% in favour of AV, 68% against. The regional results are somewhat interesting though: 7 for, 314 against.

In this case, the regional results are not important. The winning side will be whoever has over 50% of the vote, which is as it should be. If, though, this was for representatives, the picture would be different, because the votes of 32% of people would amount to 2% of the representatives.

Nothing new, and I have no idea whether the regional boundaries used here are the same as those used for normal elections. But it’s yet another illustration that electoral reform is desperately needed.

AV wouldn’t have solved this issue, but it would’ve been an improvement on FPTP. The fact that so much of the population has rejected it – and therefore bought into the propaganda from the No campaign – is somewhat concerning actually.

People moan about politics and politicians, yet rejected a system which would’ve made them more accountable. Very odd.

As an aside, I’m even more amazed at the general backlash against the Liberal Democrats, but not against the Tories – or Labour, whose actions in government have fundamentally caused much of the mess that the Coalition Government are trying to fix. Do people really have such a superficial grasp of politics? How depressing.