Posts by I ain't Spartacus

Re: Impulsive voting

Pointing out to these people that the coalition had actually increased the national debt more in their term of office than the previous three administrations combined was met with general disbelief

This is a pretty dishonest argument though, in that the trajectory of national debt was set during the administration of the previous government - and short of insane levels of cuts, as were enforced on Greece with utterly disastrous (and utterly predictable) results the coalition was only ever going to have a limited effect on the total debt.

On the other hand though, many people don't seem to get the difference between debt and deficit. Including some politicians seemingly. Many people when asked at the beginning of the last government apparently believed that Osborne had pledged to eliminate the national debt by the end of this Parliament, not the deficit. But I am suspicious of those kind of surveys, like when the Daily Mail tries to ramp up the shock with 20% of teenagers don't know who Adolf Hitler was / can't point out the UK on a globe, etc. Whereas I suspect the real meaning of those surveys is that 20% of people couldn't be bothered to answer a silly question.

I slightly disagree with Tim on the point of the article though. That report with the Excel spreadsheet error still seemed to show a correlation between economies with lower growth and those with debt-to-GDP ratios over about 90%. Although correlation is not causation - so it could as well be said that dysfunctional economies run up large debts.

But trajectory matters. Running deficits around 10% of GDP is dangerous. That kind of money mounts up really quickly. When the Conservatives had to re-write their entire program for government in 2009 - they had no way to predict that interest rates would still be so ridiculously low 6 years later. I mean there was a good chance that they wouldn't be shooting up, as growth and inflatoin might be expected to be rare commodities after such a nasty recession. But it would he horribly reckless to not worry about interest rates on government debt jumping - and it could then start getting seriously expensive to service the national debt. Congratulations are due to the Treasury under Gordon Brown here, for pushing out our government debt maturities to much longer periods than any other country during the last boom. Thus locking in the low interest rates on offer at the time, and making this period much easier for us now.

I've changed my opinion on the risk of the bond markets turning against us. I thought it was reasonably likely in 2010, without some action - but on watching the Euro-crisis unfold and how willing people continue to be to lend money at insanely low rates - even though the risks are both historically high and impossible to properly calculate. Personally I feel that there's more than a 50% chance of Italy having to partially default. Their debt is rising, their economy is stagnant, their population is falling and they're in a fixed exchange rate system at the wrong rate, with a political system that makes serious reforms all but impossible. Yet they're paying under 2% with a debt to GDP ratio of around 136%, and rising by 4%-5% a year. Oh and almost all the Italian opposition parties are now committed to a Euro referendum, and campaigning to leave.

Re: Long tail licensing

I'm no Bitcoin expert, but wouldn't using it like this start to make the blockchain unfeasibly huge, such that it needs ever greater amounts of computing power to keep registering transactions? Which is all very well while mining carries on, but eventually there's going to be an end to mining new Bitcoins, and then every transaction will have to be paid for - in order to make it worthwhile for the miners to keep on going, and keep the blockchain working.

Re: While of course they needed to be bailed out

OzBob,

One of the problems of banking/capitalism that Tim doesn't cover in this article is that banks are pro-cyclical.

This means that instead of countering booms and busts, they inflate the booms and worsen the busts. So during the height of the boom, when they should be saying "oh dear this is looking too bubbly, let's wind our necks in and borrow less" - they actually lend more - as that house is bound to keep going up in value for the next ten years...

Then the bust comes. And now they won't lend to anyone unless they can prove they don't actually need the money, however good their business plan or credit is. They get all cautious, having just had their fingers burnt in the preceeding boom. So they shrink their balance sheets in order to become more solvent, but this reduces the money supply, and the credit avaiable to the economy to pay for growth and investment.

Regulation often makes this worse. Because the regulators are under political pressure to rein the banks in. And so during this recession our governments were making banks expand their fractional reserves (to make them more liquid) and raise more capital (to make them more solvent). This was for good and understandable reasons. There's an argument to say that they should have told the banks that they needed to have these larger capital buffers by about 2015, but were allowed to run less safely before that. But it would be pretty politically indefensible, and took a risk - that's pretty much what the Eurozone did - they stuck their heads in the sand, then had to bail out Greece to the tune of nearly €300 billion in order to save the German and French banks who'd recklessly lent to them. They also then implemented the bailout incompetently, fucked up the Greek economy in the process, and are now blaming the Greeks for their own (and Greece's too) massive clusterfuck, such that the Greeks can't pay, the banks are off the hook and the governments have put themselves in the firing line.

Anyway an example of counter-cyclical measures would be unemployment (and some other) benefits. Because these are paid out automatically, the government will pay out more of them as joblessness increases, and pay falls, during a recession. These are called automatic stabilisers. The government now spends loads more during recessions, something that didn't happen in the 30s, and this helps to keep the economy from cratering - and makes the recessions shorter and less painful.

There's an idea to make banking regulation counter-cyclical. So that in the boom times, they'll have to maintain a higher fractional reserve or capital adequacy ratio. Thus meaning they can't lend as much, and stoke the bubbles as hard. Then when the recession comes, the pressure will be released somewhat, in the hopes they'll now be more willing to lend, having sustained smaller losses from the collapse of the boom, and having more money on hand. In a big scary recession like the recent one, that probably wouldn't work. But it might have made the 1990-91 recession a lot less steep, for example.

Re: Simple

If that were true, how come the iPhone sells so well? The only difference is a radio chip, costing a few dollars at the most, and possibly an LED flash for the camera. Oh and the iPad is 4 times the size, so has a much more expensive screen and battery.

Actually I've used the argument of tablet prices to say that all the top-end phones are over-priced. Which I believe they are, so I won't spend more than £200-£300 on a phone (and there's some pretty good ones at £150).

But the 10" iPad isn't significantly more expensive than the premium Android tablets. Until you pay Apple's rip-off price for extra storage of course. Or in fact the £100 extra they charge for the one with a mobile radio chip costing a few dollars...

I'd say it's more likely that tablets often get left at home, and don't take as much of a hammering as phones, in battery or getting dropped terms. Plus lots of people still expect a shiny new phone with every new mobile contract - whereas they're paying the price of the tablet up-front (not as part of a disguised hire purchase and airtime contract).

Re: 'two eggs/four slices of bread'

Isn't it a round of sarnies, which is 2 slices sandwiched, then cut in half to make 2 smaller sarnies? Or some such. Otherwise I've had that confusion with people before.

Myself I'd say a sandwich is what you get with some stuff, and 2 slices of bread.

This is before we've even mentioned the abomination that is the club sandwich, which always seems to use an odd number of slices. At which I always think, should you butter both sides of the slice that's in the middle?

Re: Sauce

Chimay bleu is about 11% alcohol, but just tastes like a nice dark beer. It's very moreish. Sadly it's about £4 a bottle whenever I've seen it in the UK - so would make a bit of a hole in the week's budget.

The strongest I've had was Carlsburg Elephant Beer, which is 13% from memory. Had it once in a Danish bar, and it was truly horrible. The danger with many Belgian beers is how many of them are so nice, and don't taste like they've got more than 7% alcohol. I guess that's why they come in half measures..

Bill Fresher,

Give people time...

I personally haven't, as I live in a flat, so can't. But also I've tried to go for a balance of my rice, which is bought in huge bags every few months anyway (and people in developing countries are likely to do the same - or store what they grow) - and buying some things in smaller packages just to use this week. On which subject I owe Lester an email, a spreadsheet and a picture of my stash of "goodies".

However, apparently the $1.50 a day figure is consumption at purchasing power parity. So this is supposedly a monetary value assigned to everything that people comsume each day - at a notional global standardised dollar's purchasing power. It's all very hard to work out - for example that figure includes housing - and I simply don't believe that you could get any kind of housing in the UK at rates of a couple of hundred a year, even a small concrete/brick single roomed one.

Also my bank won't take a couple of quid for the week as my mortgage payment - and Thames Water are probably getting £2-£3 a week off me. Not to mention electricity.

In the end this is a charity event, a bit of fun, and hopefully an excercise in thinking about what we have and what we use. It should be taken in a spirit of enquiry, with a sense of proportion, and with a sense of humour.

Yesterday I spent about 30p on frozen veg (not available to people below the poverty line, but their fresh veg is probably cheaper than ours), 39p on 6 eggs, maybe 10p on half an onion and half a potato, a little butter and made a nice omelette. Which is big enough for a dinner and a lunch, for 80p. But that doesn't include electricity to cook it.

Re: Fair Tax?

phil dude,

Their FAQ is not right. They are correct to say that VAT is a consumption tax. But it does not tax every stage of production. Every business with a turnover greater than about £50k-£100k must charge VAT on everything it sells (there are some exceptions of course). But, it gets to offset the VAT on everything it buys against that.

So the company will only pay VAT on goods/services bought from companies too small to feature in the system. Hopefully sales are higher than costs, so this can even have a positive effect on cash flow.

Another useful advantage is that the government knows sales and total purchases of every company in the VAT scheme, mostly quarterly, so along with info from payroll taxes, can make better statistics on the economy.

On the other hand, what's the harm in having your ego massaged for £300?

Myself, it doesn't float my boat, and I won't be buying one. But unless you only wear brown sacking, you must have spent at least some money on such flummery. At which point, it's merely a matter of degree.

Re: so what if you can't upgrade it?

why would anyone expect to upgrade/replace parts in their watch??

When it's just cost them $10,000 and it needs to integrate with their phone which gets software upgrades every year - one of which will eventually make them incompatible perhaps?

Re: Baking bread

Nope. As I understand it, the global poverty line is measured at $1.50 of purchasing power parity consumption. So that's not just food, but everything.

But more crucially it's an estimate of the value of goods consumed, not what was paid for - so includes grub grown by people and stuff bartered for.

My bank won't be accepting my mortgage payment going down to 20p for next week, so I'd fail the challenge before I even started. And I guess my charge from Thames Water alone is about £4-£5 a week too.

On the other hand I struggle to buy the purchasing power parity bit at that point. Even a one roomed wooden house in the middle of nowhere in the UK is going to cost more than £100 a year. Although obviously there are lots of things that the poorest in the world just don't pay for, because they don't get. Such as the clean water and sewerage that's so cheap here.

Re: Free meat!

My Nan bought some rabbits to breed, and cages for the garden. This was in London, and so welcome off-ration meat. The only problem was letting Mum play with them first.

When came the first Sunday dinner where they decided to eat the fruits of their labour, there was much wailing and gnashing of teeth. And no rabbit eaten by the children.

Nan told me that she sold the rabbits to the dustman, as his kids could eat them having not been introduced first.

She also told me that she'd despatched Grandad to do the deed, but that his attempts to finish the poor buggers off failed and they resorted to her brother's bayonet. I'm assuming this would be in knife mode, but I've always had the mental image of the Bosch bunny at the wrong end of a Lee Enfield 303, fix bayonets and charge...

Re: Damn...

More of a darjeeling man myself. But for the purposes of the challenge I'm probably going to go for Sainsbury's Red Label, which is still very nice, and save a few pennies. I think I'd rather go without something than go for value teabags. I'm assuming bags are cheaper than the loose leaf I normally use, but haven't checked yet.

It was a travesty when Lester ran that poll on how to make the perfect cuppa and came up with something with milk and sugar in it, made from a bag. But I'm not sure I know anyone of my age (or younger) who uses leaves.

I guess the diabetic thing complicates this a lot for you. And means you have to think a lot more about food in general.

I might calculate how much my muesli costs, now you've said yours is 8p. I'd always assumed it was much more than that, but as I make it myself, I've never counted.

I'm planning to price next week up tonight - and see exactly what I can afford. So I'll have to go round the kitchen with scales and a calculator. I always think of things like muesli as expensive, as a bag of oats is £2-£4 - and the seeds and dried fruit are a fiver a big bag. But you don't use all of them each time, and once mixed it lasts for ages.

You have been a source of many ideas for this, so thank you.

Re: Free meat!

What was the trick from 'Danny Champion of the World'? It was something about soaking raisons and then putting a thread through them or something I think. It's a very long time since I read it.

However, I'd have to be very hungry indeed to fancy tackling the London pigeon. Much better to cut out the middle-man, and run in cirlces in Trafalgar Square and try to catch the bread that the tourists throw to them.

Re: Damn...

This is where I'm glad that I have my tea black. So no faffing with milk required. I was considering muesli for breakfast, but I put quite a bit of expensive (for the challenge) dried fruit into mine - so I decided to go with toast instead. I don't normally eat brekkie, but maybe this challenge will make me hungrier, so I'm budgeting for it.

It's a good point about the farm shop, perhaps I'll go there in search of spuds. As they're just a bit too expensive otherwise. My brother got some squirrel from them a while back, so I guess I could even score some cheap meat. His wife deemed it too cute to eat, so he wasn't allowed it again...

I imagine they left a few planes tied down on deck to see what effect the nuclear blast had on a carrier with planes on deck. So they weren't flyable after that. Would you want to test them? So it's possible they just left them there the whole time.

Re: Lack of feasible competition

Google aren't being threatened with a wrist-slapping (or worse) for their search monopoly. They're allowed to operate a monopoly, which they won fair-and-square.

What they're being accused of (in various markets) is leveraging that search monopoly to win there as well. As Microsoft were allowed their Windows monopoly, but weren't supposed to use it to win the search engine wars. Or the office wars. In both cases they used un-documented hooks in the operating system, and with IE they installed it for free on new systems.

So Google are being accused of using their top-notch general search engine to push for dominance in specialist search, by downgrading the results of other companies. Hence pushing their own shopping search results (admitted by their own testers to be inferior apparently), above other companies'. The same accusation is made with maps and whatever Google call their user reviews service nowadays (over Yelp and TripAdviser).

Now in some cases you may say that Google's is better, so why worry. But then that's because you might not have seen the alternative, as Google weren't linking to them, and those alternative companies never got a chance to access the market, because Google have a monopoly on search, and blocked them.

Europe also seem to be looking at Android now. Where they may be arguing that Google has abused its monopoly in online advertising/search to offer Android for free, and destroy competition from other players. That looks a lot less cut and dried.

As does news. Google have an uncomfortable amount of power in the news market, but don't actually compete in it, at least in some ways. On the other hand, if they can hoover up the lion's share (or even a big chunk) of the advertising revenue using their search dominance, it could be argued they're also abusing their monopoly. Even if not, it's a concern. As Google produce no news content themselves, and the content providers are already cash-strapped. The less money gets paid to news gathering organisations, the less quality news we'll get, and the less well our democracies will work. So this is a politically significant issue, as well as a legal/business one.