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February 20th, 2013:

The wall of lies – “cuts” that leave government spending HIGHER.

“Why do people not resist the endless increase of government spending? Can they not see it will lead to economic collapse? Are the people stupid? Insane? Just concentrating on internet porn? What?”

These are the sort of questions that free market people ask. But all the questions make an assumption – in fact several assumptions.

One unspoken assumption is that most people believe in “Keynesianism” – that they do not believe that increasing government spending is “good for the economy”.

Actually I think this assumption (that most ordinary people reject Keynesianism when they hear it) is actually valid. When people come home from a hard day at work and they see on the news (if they even watch the news) so obviously deluded person (such as the “Nobel” prize winners Krugman and Stiglitz) demanding more government spending on X, Y, Z, they know it is nonsense – at a gut level they reject this insanity known as “Keynesianism”. With its “monetary stimulus” and “fiscal stimulus” and other vodoo.

However, there are other assumptions which I do not think are valid.

For example, it assumes that most people know (know CLEARLY) that government spending is still increasing. And, in an American context, know that BARACK OBAMA has been the main driver in the increase in government spending in recent years.

The media reporting of this whole area is a TISSUE OF LIES.

The Economist magazine (“oh Paul not your favourate whipping post again” – it presents itself as a free market magazine, so of course I single it out) every week talks about the “cut” in government spending in Britain and United States and other countries.

Regarding the United States (week after week) it will write about the “hundred of billions” of reductions in government spending – whilst (in the real world) government spending continues to go UP. “Paul hardly anyone reads the Economist magazine”.

No – only people who are not satisfied with the ordinary media might do so. But what does the ordinary media teach?

The ordinary media teach that Mr Cameron and co have made savage cuts to government spending in Britain. That wise and noble Obama is struggleing for a “balanced approach” of “cuts” in government spending in the United States together with the “tax dodgeing” rich “paying their fair share”.

All of this is a tissue of lies (it is all false). But if people turn away from the general media to the specialist economic (and “free market”) media – they hear and see THE SAME THING.

In some corner of their minds most people have some doubts about what they are being told, but they are told it (including via the ENTERTAINMENT media – if they do not watch news or current affairs), government spending is being “cut” – Cameron and Osbourne are super “tough”, Obama is wise and noble struggleing against evil Republicans in Congress……

And on and on.

So the population (or most of them) are left confused – a WALL OF LIES keeps them from the truth.

I wish the end was rather more immediately ‘nigh’

The public debate in recent days on taxation has swerved into some hideously dangerous territory.  Margaret Hodge, with no sense of irony apparently, has called for tax avoiders to be ‘named and shamed’ Allow me to state for the record, I wish I was smart enough and rich enough to be so named.  Being ‘shamed’ by the likes of Hodge is something of a non-sequitur for me.   Trust me Maggie, what ever you may think of me, right back at ya in spades.  But I don’t demand money or fealty from you; nor in fact did I preside over child abuse in the homes I was responsible for and decline to investigate when alerted, and try to gag complainants in court, but let’s keep to tax.

Then we have the unbelievably clumsy announcement by Mr Ed of a mansion tax.  Now it’s a fair bet this was only ‘pulled-out-of-his-arse’ because Cameron mocked the potential policy-free speech the day before.  But to say it is ill-thought out is like suggesting the Titanic had a damp problem.  No-one knew for sure what level it would operate at or how the valuation would take place, or the valuation date, or would this be reviewed annually or what level the tax would be at or what level the 10p tax rate would come in or how much this would cost.  Monster-raving looney stuff.  Not to be out-done, the Lib-Dems now like wealth taxes.

God alive is there is a bigger admission of failed government?  Tax on acquisition, tax on disposal, now tax on holding?  Lesson the first chaps, we do not have taxation problem, we have an over-spending problem and futile attempts to raid a few more pennies from people won’t fix this.  Indeed, if you want to smash the central London property market and with it some banks, go right ahead.  Also I don’t enjoy the tax return as it is, imagine how much I will like having some parasite from the tax office rummaging through the draws looking at my wife’s jewellery.

People become wealthy when private property rights are respected.  This system means you no longer own stuff, you are the leaseholder and the state is the freeholder and this is a massive shift in the fundamental relationship between the two parties.  Formerly if legally acquired and duty paid, it was yours (houses not withstanding), now all bets are off.  And can anyone think of a better recipe for wealth flight?  Won’t you just convert assets to diamonds or something and bung them in a safe deposit box in Zurich?  So what then? Tax on extra-territorial global assets?  Good luck finding ‘em boys and how anyway will that stand against double-taxation treaties?  Say I own a place in Tuscany and pay local taxes, don’t double tax treaties mean I am exempt from UK taxes on said assets?

Total madness, economically destructive and futile as it won’t come close to filling the void of over-spending.  If you don’t understand or refuse to see the problem, which is over-spending, all the pointless money-grubbing schemes are futile.  I’m really starting to wish for the end of this, as the long drawn out death of the economy could do some real damage, whereas a bankruptcy and re-set at least gives pause for thought.  And it is absolutely inevitable, so let’s have it sooner.

Right over both their heads

Charles Crawford, over at the Commentator – whose comments system, based on the Hell that is Disqus, sucks – fisks the incomprehensibly influential doofus Will Hutton on the horsemeat scandal. And totally misses the point. Hutton:

“As the horsemeat saga unfolds, it becomes more obvious by the day that those Thatcherite verities – that the market is unalloyed magic, that business must always be unshackled from “wealth-destroying” regulation, that the state must be shrunk, that the EU is a needless collectivist project from which Britain must urgently declare independence – are wrong.”

How’s that, Will? As Richard North has demonstrated in his usual obsessive style, Horsemeat entered the food chain because of fraud in the EU regulation system, a compulsory system that places excessive weight on paperwork while failing to sample any actual meat. Quite what the failure of an overbearing, hubristic, supranational regulatory bureaucracy has to do with Thatcherism is completely beyond me.

Other than proving it right, that is. The truth is, this scandal is actually extremely instructive in showing almost the exact opposite of Hutton’s gleeful conclusion: that EU regulatory structures, which replaced our own local authority testing of which North was once a part, can cost a bloody fortune, get in the way of efficient trade, and still utterly fail to protect the public in any meaningful sense at all. There are plenty of regulations, and keen, enthusiastic, inspectors to enforce them; they just don’t work. As long as the Papers are in order, and the factories are ticking all the right Hazard Analysis and Critical Control Points boxes, all is well. Until some unanalyzed hazard emerges at an uncritical, uncontrolled, point, such as a crook who doesn’t give a damn about HACCP switching the labels. Guys like North would have known who to suspect – the dirty premises, the slapdash staff, the shifty management – and left the honest ones relatively, well… shall we say “unshackled”? The alphabet soup of FSA/DEFRA/EU bureaucrats, who are too high and mighty to get their hands dirty on the slaughterhouse floor, don’t have a Scooby Doo. All their papers check out. Someone must have been – gasp! – lying.

So we have frantic, minute, obsessive – expensive – regulation, to absolutely no useful end whatsoever. Oh, yes: this costs money, and does destroy wealth. That’s why we now have a tiny number of “super-abbatoirs”, instead of a thriving industry of local ones. It’s the only way the meat business can afford the regulation. Hardly the the free market running riot, is it? And it’s a damning example of the uselessness of Will’s beloved EU. Indeed, as North points out, this is only beginning to be sorted out by the EU states organising their own investigations outside the Union’s institutions.

Crawford never touches on this, preferring to score cheap points by bringing up the Staffordshire NHS killings. But then, his opening statement (“Sooner or later anyone that prolific must drift from wisdom towards self-parody”) suggests that he thinks Hutton demonstrated any wisdom in the first place, which casts severe doubt on his judgement.

Update: Thanks to Your Freedom and Ours, here is what Hutton thinks doesn’t exist: “Regulation (EC) No 178/2002, of the European Parliament and of the Council of 28 January 2002 laying down the general principles and requirements of food law, establishing the European Food Safety Authority and laying down procedures in matters of food safety”. This is particularly interesting:

Before 1 January 2005 and every six years thereafter, the Authority, in collaboration with the Commission, shall commission an independent external evaluation of its achievements on the basis of the terms of reference issued by the Management Board in agreement with the Commission. The evaluation will assess the working practices and the impact of the Authority. The evaluation will take into account the views of the stakeholders, at both Community and national level.

“Stakeholders”, eh? I don’t know if Hutton actually coined this slippery word, but he did much to popularize it, and it appears again in the article Crawford attempted to fisk. So much for the Powers That Be ignoring his ideas and going off on a neo-liberal spree of their own….

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