Counting Cats in Zanzibar Rotating Header Image

Fails.

Every morning I have a shower and a tea and watch the BBC News Channel (I probably would watch Sky News except the editorial is identical and they have adverts and all I want is to discover the basics. It is currently on about the Olympics because they are lighting the torch. According to the BBC wonkette sent to Olympus for no apparent reason other than her jollies if lighting it from the Sun doesn’t work they have a “back-up” or a box of matches. The BBC wonkette is now interviewing a woman who has lived in Olympia for ten years. Like Wow! Apparently there are many VIPs there. Well, I guess the local prostitutes need employment as much as the next person. Which brings to mind something I saw earlier this morning. According to the BBC News we are facing “Pubic Sector Strikes”. Public Sector I can cope with but if the pubic sector goes we is fucked (or rather not). They are reading a poem now. In Greek. Now I appreciate the Bubbles are the cradle of Western Civilization but to paraphrase Tsiolokovsky (or Goddard or Von Braun or any of the rest…)

Some Greek fucker is now wittering on about peace and how he reckons we can keep the flame burning – he ought to go to Syria. Well, yeah if Putin doesn’t turn the gas off.

And moreover how the bastarding fuck does this promote peace? Some bugger is now saying spending a fortune on a sacred flame is saving Greece. No it isn’t. Not having blown squillions up the wall would have been better for a nation on it’s arse. Greece is on it’s absolute arse and we are getting there.

Now Seb Coe is talking about how twats stealing money from ordinary folks promotes peace. Not in my head it don’t. Seb Coe is standing on the original running track in Olympia. I bet that didn’t cost 20 billion quid. I’m really annoyed now. Peace and Friendship and all! Just learned something. The lighting of the flame is “strictly for the VIPs”. Well, it would be wouldn’t it?

19 Comments

  1. Lynne says:

    Pubic sector strike? I’m sure there’s a deeply off-colour joke about crabs and scabs in there somewhere…

  2. mark says:

    My work is no way connected to the olympics. Most peoples level of consumption is in no way effected by the olympics.
    In what way has20 billion pounds been stolen from ordinary people?

  3. Single Acts of Tyranny says:

    “In what way has20 billion pounds been stolen from ordinary people?”

    In the way of being froced to pay for the sports-day by way of coercive taxation which funds the whole junket obviously.

  4. John Galt says:

    The Montreal Olympics of 1976 were about equivalent in size and scope to the London Olympics of 2012 (all other things being equal).

    They finished paying additional taxes to cover this event in 2005, so 29 years later.

    When will UK taxpayers / London Council tax payers finish paying for their part of the 20 billion quid cost of this event. Rough guess would be somewhere around 2040/2050.

    So children and grandchildren who are still not a twinkle in their fathers eyes will be paying for event which they’ve never seen, participated in, voted for (as if) or benefited from.

    This is mean to be good how exactly?

  5. mark says:

    there is no way in which reduced consumption today can pay for production in the past. It is purely a convenient fiction.
    In real terms, how can i pay for a bottle of coca cola my grandfather that my grandfather drank, or anything else.

    The taxation which might be justified as a means of paying for the olympics ( notnaware ifnsuch a thing exists) is false unless the taxation prevents real consumption which then contributes to the olympics.
    If money is the only restricting factor then we can produce more.

  6. NickM says:

    OK, Mark in other news today we are buying the F-35B not the F-35C to save cash (in the short term anyway). Cash we would have had but for the Sport’s Day. Now it ain’t current news but how many schools and hospitals or tax-cuts for business that like employs people and does useful stuff are we not getting through? Just so Bozza Johnson can make an absolute tit of himself on a global stage?

  7. zack says:

    Mark, I think you are missing that these games are being financed via debt – debt which will in all likeliness be paid by the taxes (taken under penalty of law) of future generations, as John Galt explained

    Now, if this was a private enterprise and all the money to pay for the games being spent was funded via a voluntary exchange of money, then it wouldn’t be a problem (morally – I still doubt that these Olympics will brake even, let alone generate a profit[coincidentally, two of the Olympics to turn a profit {Atlanta and LA} were funded almost entirely by private entities]).

    Now, don’t get us wrong, many on this board are rather fond sporting events, it’s just that we think it is one of those (millions of) things that is handled better privately then via government (see in praise of free market sport).

    Also, Nick likes to lampoon the pomposity of the IOC.

  8. mark says:

    nick,
    if you think about it, it makes no sense. The production of fighter aircraft is almost entirely unrelated to sports stadiums. Are you seriously telling me that the engineers at aircraft companies are fired from their jobs to go and cement running tracks? Or that the machinery used to produce missiles is used to make javelins?
    In what way could reducing spending on weapons systems or schools help fund sports, unless real resources were diverted?

    Zack,
    Debt, eh? So government spending is financed by debt. The government borrows money from me to do stuff. Given that the government can produce an unlimited amount of money and has no need to borrow anything, ahouldn’t the real limit be the
    roductive capacity of the economy?

  9. zack says:

    Mark, if you are not just playing silly buggers with us, I do believe that you’re previous post is a great example of why Economics should be a required class during high-school. But, just incase you really don’t get what nick or I are saying…..

    The government has revenue, which it gets from taxes. When it spends more then that, it has to go into debt to cover the differece. With taxes, the government doesn’t borrow money from you, it takes via taxes (unless, that is, you actually bought government bonds, in which case, yes it is borrowing from you); it borrows money from banks and other financial institutions – debt which it then has to pay off via taxation (over decades, which often means future generations are paying for things their parents and grand parents got).

    Could a government just print money, since modern currency is not backed by gold? In theory yes; in practice, the reason they don’t is that if they did just print the money they wanted to spend it would kick off massive inflation and ruin the economy. To see what that looks like, look up “Weimar Republic”.

    Nick is not saying that “the engineers at aircraft companies are fired from their jobs to go and cement running tracks? Or that the machinery used to produce missiles is used to make javelins”, he is saying that the money they are using to pay for these games could instead be used to pay for the Military (National Defense being one of the legitimate roles of government), or tax cuts, or others things that would be more productive then sports arena’s.

    Did I make things clearer for you?

  10. Thornavis says:

    mark

    I recommended Bastiat to you a little while ago you really should read him you know also you might try checking out the concept of opportunity cost. Regarding tax funding of the Olympics isn’t it the case that London council tax payers are being surcharged to help cover the cost ?

  11. mark says:

    zack,
    If a government can just print money then there is no absolute requirement for them to get their revenue from taxes, or for them to borrow money from anyone. I take it you agree with this – the problem is the fear of generating inflation.

    But what is the mechanism by which inflation will increase? If the market mechanism is functioning, price increases when demand for a product increases more than supply (or supply declines). Money does not have a magic property whereby its mere existence increases the price of goods – people have to spend it to make this happen. I take it you agree with this also.

    In this case producing more money will increase production, because a man who was doing nothing will instead be making aircraft and a factory which was sitting idle will be producing missiles. We are increasing demand for aircraft and since there is idle supply, it is unlikely that the price of aircraft will increase by much. As a worst case scenario, the price of aircraft will increase a lot – but this is still unrelated to the price of stadiums, the price of coca cola or anything else unless demand for those increases also.
    If demand for a certain product is too high, the government could reduce demand by lowering spending or increasing taxes upon it.
    But this is a very different story from “reducing spending on aircraft is neccesary to make a stadium” – that simply isn’t true.
    The sad thing is that right wingers are very happy to oppose the idea of aggregate demand when it suits them, but are still prepared to use the very same idea to argue against government intervention.
    And I am amazed that you think people need to be taught the bog-standard, intuitive views which you have expressed. Where do you think you learned these ideas? I think I remember seeing a similar view of inflation on an episode of Duck Tales once…

    It is important to tie our ideas of money to what is happening in terms of real products and services.

    Thornavis,

    If you are familiar with th idea of opportunity cost, answer me this. What is the opportunity cost of a stadium? In what way is it a aircraft except in the sense that we have chosen it to be?

  12. zack says:

    —————————–
    mark:Money does not have a magic property whereby its mere existence increases the price of goods
    —————————–
    You would be correct if there were more goods that were being produced – if production increased. If you increase the amount of money in the economy (without there being a corresponding increase in product supply), then you have more money chasing the same number of goods – the price of goods/services goes up. In small amounts, this isn’t much of a problem, wage increases (often part of employment contracts) will be able to keep pace.

    But, if the government just increased the money supply by 25% or 50% annually (that being the percentage of the economy that it, sadly, spends in many western countries), then you get a situation where the money going after the goods increases much more rapidly then the actual economy is, i.e., massive inflation. As the prices rise faster then the wages do, everything becomes more expensive – people have to spend more money to buy the same amount. Since their wages don’t increase as rapidly as that, people often end up spending the same to buy less – i.e., demand craters. This is the exact opposite of what you predict would happen.

    The reason that I take the time to “express such bog standard intuitive views” is because you appeared to have been ignorant of them. You assume that increased spending in one area does not effect the prices of others. Money is fluid, it does not stay in one place. An increase in the supply of money will make EVERYTHING more expensive if there is not an increase of goods/services for it to buy (i.e, economic growth). I’m not even getting into the negative effects that inflation has on investment and economic growth.

    Also, just because something is ‘bog standard and intuitive’ does not, necessarily, mean that it is wrong, or not worth covering. In fact, I often find occasionally returning to basics helps to clear up misconceptions and helps us to spot poor/wrong conclusions.

  13. zack says:

    Also, just to get this back to my (and I believe Nick’s) original point – in what way is the government spending 20 billion on stadiums/arena’s better for the British economy then if they had just given 20 billion pound tax cut? Is the government spending 20 billion pounds on the Olympics (one of the many things that private institutions handle better then government) better then spending it on national defense (one of the few legitimate roles of government)?

    In what way are tens of thousands of bureaucrats in a better position to determine how to best use money then tens of millions of individual entrepreneurs?

  14. Single Acts of Tyranny says:

    “If a government can just print money then there is no absolute requirement for them to get their revenue from taxes, or for them to borrow money from anyone. I take it you agree with this – the problem is the fear of generating inflation.

    But what is the mechanism by which inflation will increase? If the market mechanism is functioning, price increases when demand for a product increases more than supply (or supply declines). Money does not have a magic property whereby its mere existence increases the price of goods – people have to spend it to make this happen. I take it you agree with this also.”

    Assuming you aren’t just trolling, increasing money supply is itself inflation, increasing prices are a consequence of this. It is fatal to misunderstand this.

    Now it is true that if you print say £100B and bury it in the back garden it has no effect, and short term, when the immediate beneficiaries spend it, price tends not to adjust to the new reality of the money supply. But when the price adjusts, those who haven’t had the largesse sprayed on them have to pay more for goods.

    Thus printing fiat currency is de facto looting the populace just like taxes or government borrowing it’s just easier politically in the short term. It’s also like crack cocaine ~ nice easy hit first time up, but horribly addictive and destructive in the end.

  15. Richard Allan says:

    Speaking of Alpha Centauri, Niall Ferguson has obviously been playing. His first Reith lecture this year is called “The Rule of Law and its Enemies: The Human Hive”.

  16. NickM says:

    I have mixed feelings about Niall Ferguson. I do not about public arts contributing to political discourse. Have you ever been to The Baltic in Gateshead? Utter wank. And no I am not a contrarian philistine. `Epic waaank. That was a typo but I added an extra “a” mind. Games though are our culture. They are to us what frescoes were to Michelangelo or buggering adolescents was to the Greeks. I prefer pubic arts. But as I have said time and again tit-mongering arsewittery in the name of art nobody would actually pay for if it wasn’t mandated is nothing compared to games – the only true art of our age.

  17. mark says:

    Zack,
    No, the part you have quoted is true regardless of production. Unspent money is entirely uninflationary. Apart from that, you are just repeating what I said.

    How did we get from spending 10 billion on the olympics to increasing the money supply by 50 per cent annually, forever? Yes of course, if the government continued spending more and more money without paying any attention to what was happening in the economy there would be massive inflation.
    Can you imagine arguing that we should’t give a patient any drugs because an overdose would kill him?

    “An increase in the supply of money will make EVERYTHING more expensive” All things being equal, an increase in nominal demand will lead to an increase in real prices… yes… but the price of different things change in very different ways, so it clearly can’t just bea case that more money equals general inflation.

    If we gave every millionaire in the country an extra million pounds (incidentally, this does appear to be the policy attempted in Britain over the last few decades) what would happen to the price of hamburgers in two years? It’s absolutely impossible to tell and for that reason, if we determine that it is beneficial to give millionaires more money, we should do so without worrying over much about general price rises – especially since we have the ability to reduce nominal demand if it comes to that.
    I am telling you that taxes aren’t related to olympic stadiums – so why not have both?

    We should only worry about the price level primarily if money is the most important part of this. but it isnt money only has value for thie things it buys.

  18. mark says:

    single acts,
    if you say so.
    We’ll only have to pay more for goods if people who buy the same things as us have more money. Giving a millionaire more money might have a large effect on the price of yachts but it will only have an effect on the price of Gregs Pies if everyone has more money.

  19. Tim Newman says:

    But what is the mechanism by which inflation will increase?

    Banknotes are in limited supply, hence their value. If you print more, they become less scarce and their value will decrease. Hence inflation.

Leave a Reply

%d bloggers like this: