01 April 2010

What do you do when you have a record budget deficit?

Go to an election promising to EXPAND the welfare state.

Yes, Gordon Brown has announced he would set up a National Care Service, described as "NHS for elderly care". In other words, he wants taxpayers to pay for everyone who needs it to have resthome care in their declining years.

Great! The budget announced last week is already borrowing an EXTRA £8,000 per household this year to pay for the current bloated UK state sector. Why not borrow more? Gordon Brown will be well retired and not giving a damn when the kids have to pay off the debt he incurred.

Of course the NHS is a model the whole world envies, well rather Michael Moore does, except he doesn't envy it enough to actually LIVE in the UK. The world envies it so much that the model hasn't been adopted anywhere.

After all is it not as if old age is unpredictable and cannot be planned or saved for, especially if the state stops pilfering your income to pay for everyone else in the meantime!

30 March 2010

Spring of discontent

Is it 2010 or 1979 in Britain? One might be briefly excused. You see there is a Labour government in power, far from popular. Two large trade unions are holding strikes literally weeks before the general election.

UNITE representing British Airways cabin crew is now into itsr second strike and now the RMTU, led by the avowed Marxist (yet paid a healthy six figure salary) Bob Crow, is calling the first national rail strike since 1994.

Why? Well British Airways is in dire financial straits. Many of its Heathrow based cabin crew are on pay and terms and conditions that hark back to before the airline was privatised, with the average pay double that of Virgin Atlantic and reportedly higher than any other airline globally. The management is seeking to put Heathrow crew on the same pay and conditions as Gatwick crew, given the airline has had record losses. In short, this is about the survival of the airline, in a world where most recently Japan Air Lines, Olympic Airways and Alitalia have all effectively folded and either been recapitalised or bought out from the creditors.

On the railways, the issue is with Network Rail, the government guaranteed nominally private company that owns and runs the rail network. It is seeking to change maintenance practices so that trains can run more frequently at weekends and late evenings, and has endorsement from the Office of Rail Regulation for the changes. The union is claiming the strike is about safety, but has little support from that from elsewhere.

So many BA flights are not taking off (Gatwick flights will given the crew there have no reason to strike, and some cabin crew at Heathrow are refusing to go on strike), and the four days after Easter will see most trains not running. A spring of discontent is in the wind. Gordon Brown is less than impressed.

Of course the problem Labour has is that UNITE is the largest financial contributor to the Labour Party, and the RMTU is also affiliated. Some Labour MPs support the strike, although they are keeping very quiet about it. However Gordon Brown and the rest of Cabinet cannot hand on heart state opposition to those who fund them. In other words, a very clear political link can be made between Labour and the unions who have decided to go on strike close to the election.

Isn’t this suicide, you say? Surely unions WANT Labour in government? Well, this is about two things. Firstly, the belief that this pressures Labour Ministers to intervene on the side of the union, to get what they might otherwise not get if the government changes. What the unions don’t realise is that this is likely to play into the hands of the Conservatives, by showing Labour as anti-business and back in the bad old days of government intervening in industrial disputes. Secondly, as far as the RMTU is concerned, Bob Crow says that it doesn’t really matter if Labour loses, because both main parties are so similar.

What some in the union movement want is for Labour to lose, so that Gordon Brown can be replaced, and the vestiges of New Labour are purged to move it further to the left. In other words, they still believe in socialism. What they failed to note was how roundly such a Labour Party was defeated in 1983 when it had the socialist wet dream manifesto.

It is too early to tell whether it means the deathknell of the government. If only because the Conservative Party seems like it engages in the art of spin, of saying very little and criticism rather than ideas. When asked about spending cuts, the Conservatives talk about small ticket items and protecting the NHS. The simple truth is that whatever major party governs Britain, it is made up of politicians who primarily want to spend other people’s money and direct their lives. Until that trap is broken, the cycle of discontent will continue.

25 March 2010

Bribing voters with their kids future stolen money

What do you do on the eve of a general election, when your predecessor as Chancellor of the Exchequer (now Prime Minister) used most of the last 13 years of economic prosperity to grow the size of the state from 39% of GDP in 1997 to over 46% today?

When public debt, at 43% of GDP when this government was first elected in 1997, is now forecast to be 72% this year, and some say when including state sector pension and Public Finance Initiative liabilities is over 100% of GDP?

You do next to sweet bloody nothing.

You keep middle and upper class welfare, like the "Winter Fuel Allowance" which is a subsidy to home gas and electricity prices for everyone over 60 over winter. Yes David Bowie, Paul McCartney and Mohamed al-Fayed can all get this one.

You set up a couple of new financial/planning bureaucracies to "invest" in the economy.

You hike up some taxes, cut the fringes of a few others, and keep propping up the property market (can't let prices drop to market levels to let more people afford to buy can you?).

You optimistically forecast that you'll halve the deficit in five years, which simply means you'll keep borrowing from future taxpayers a bit less each year.

You announce proudly that you're borrowing, on behalf of every British household, ANOTHER £8,000 each. That is on top of the current public debt per household of around £50,000.

You DON'T announce big cuts in spending in welfare, health, education, nanny state bureaucracies, corporate welfare and the like.

You leave that to the next government, which is more likely than not going to NOT include Labour.

Then, no doubt, you'll moan and point fingers at the cruel heartless new Conservative (maybe Conservative/Liberal Democrat) government for all of the spending cuts it imposes, saying how mean they are for NOT wanting to hike up the debt of future generations of taxpayers.

Meanwhile, the 30% plus of the public dependent on taxpayers for their jobs or incomes will dutifully march to give you a tick at the next election, because you now cater for them - because if they weren't so dependent, they might just be less interested in voting for you.

The first bid in the advance auction of stolen goods has been made, and it's pretty much "keep spending and let your kids worry about Greek levels of debt per capita".

Of course one difference with Greece (the most important one is that the UK government isn't lying about the figures, generally speaking), is the pound is responsive to all of this - given UK public sector borrowing is effectively printing money (by issuing bonds).

The Pound has fallen to a two week low against the US Dollar.

You see, one of the tactics (with little concern for the effect) is to simply steal from holders of Sterling in the form of devaluing their cash savings by borrowing more.

Now it's time to call an election, shame the alternatives are as inspirational as a puddle in a tunnel.

Why Obama's health reforms are quite wrong

If you simply read and listen to many in the mainstream media talk about this story, you might ask whether any of them bothered to critically review the legislation passed by the Congress and signed by Obama on healthcare.

In the simple, binary world of so many the impression is given that health care in the US is a "privately owned fully commercial free market system where people are left to die on the streets unable to pay for ambulances or lying in hospitals not being treated because they can't pay".

This is a bold faced lie on multiple levels. How many say that half of all US healthcare is funded by government through Medicare and Medicaid, which provide healthcare for the elderly and poor families respectively? How many say that the budget for Medicare is 20% of the federal budget, with Medicaid being half that again?

How many say that the health market in the US is heavily regulated, with hospitals required to treat accident and emergency patients regardless of ability of pay? How many say that some states restrict the market to protect some health providers, so there isn't free and open competition across the country? How many talk about the burden that precedents to allow ridiculous tort law claims imposes upon the health sector? (In the last case the Republicans do, because high profile Democrats include tort lawyers).

The failure in the US is not about universality. As Libertarianz Leader Dr. Richard McGrath (himself a health professional) states:

"When the figure touted was 47 million uninsured, the breakdown was like this:

18 million earned over $50k (half of this group earn over $75k) and chose not to insure themselves;
13 million were illegal aliens;
8 million were under age 18 and had public cover available if poor;
leaving 8 million uninsured (3% of the population), many of whom were 18-20 year olds at low risk of medical problems."

So the REAL figure of those without insurance is far less than is bandied about by the press. The big issue in the US is cost, and the biggest source of cost inflation has been the public sector. Who says that? The Congressional Budget Office notes:

"total federal Medicare and Medicaid outlays will rise from 4 percent of GDP in 2007 to 12 percent in 2050 and 19 percent in 2082—which, as a share of the economy, is roughly equivalent to the total amount that the federal government spends today. The bulk of that projected increase in health care spending reflects higher costs per beneficiary"

In other words, the GOVERNMENT side of US healthcare (which is largely ignored) is growing exponentially. The legislation signed by Obama doesn't touch this at all.

The Cato Institute solution is wiser. Its proposals are:
- Eliminate tax incentives for employer bought health insurance and apply them to individually bought health insurance. This means people have a vested interest in buying health insurance that meets their needs, and puts pressure on such insurance to not provide excessive cover;
- Eliminate restrictions that prohibit people buying health insurance from providers in other states, this is an unnecessary restriction on competition;
- Eliminate state specified minimum requirements for health insurance that in some cases include cover for procedures many would not wish (e.g. in vitro fertilisation) (indeed allowing interstate competition would produce strong incentives on states to do this);
- Licensing and regulation of what medical practitioners can do, and standards for licensing should be shifted towards industry driven accredited standards.

For example, it makes sense to be able to insure against accident or disease that is not predictable. Not to insure against self injury, or the consequences of heavy drug or alcohol consumption. No bigger incentive towards healthier lifestyles would exist than for people to notice that if they smoked, they might not get any health cover for respiratory diseases.

The Obama health reforms tinker with health insurance to make it compulsory for everyone to have health insurance, and to subsidise those who can't afford it. It does not address the cost escalation in the heavily regulated market, but especially does not address cost escalation in the US's own socialised health care - Medicaid and Medicare.

Expect future years to have healthcare remain a major issue in the US, because Obama is, for now, printing money and borrowing it, to pay for his grand plans. Living for now, letting future generations bear the cost - a curious metaphor for how so many of those living at the bottom treat their own lives.

Oh and while you consider that, it is worth noting that both the UK and New Zealand are rare among developed countries in not having an insurance based model for healthcare. The result of that is a continued growth in concern about significant groups of people who live unhealthy lifestyles, and a desire to tell them what to do in order that governments ration spending on diseases of lifestyle.

A better approach is for people to pay themselves, buy insurance and face higher premiums or the inability to get insurance because no one will sell it to them if they are eating, drinking, smoking and idling themselves into chronic conditions.

However, socialists prefer to treat such people as children, and for you to pay when they don't listen.

11 March 2010

Internet scaremongering by newspaper

The Daily Mail has done one of its usual "the country is full of pedophiles" stories by having a journalist pretend to be a 14yo girl on Facebook, claiming "she" got umpteen requests from older men for sexual attention.

However, look at the comments section for the most popular, and you'll find oodles of people saying the likes of 'I'm unsure how this happened, my teenagers have been on Facebook for ages and don't have this issue as they know how to use it' or 'I used the internet since I was 11, occasionally had pervy attention and just blocked it or closed the window'.

In other words, Facebook isn't the problem. It allows you to control privacy settings, and most teenagers are smart enough to simply block unwanted attention. It's logical and rational, after all it is only words and images on a computer screen.

The bigger issue is clearly when teenagers ARE looking for this sort of attention, which is more a sign of issues with family, confidence and desperately seeking someone to listen to them and make them feel good about themselves. THAT is the issue, the seeking of self esteem from others, when it isn't effectively taught at home or school. A culture of sacrifice, altruism and belief that what matters is what you do for others, not yourself, encourages this.

Of course even with that some will be curious and daring, and make foolish mistakes. However, there are laws to prosecute people who engage in underage sex, and those who use the internet to meet young people for that purpose are leaving obvious trails to track them down and get them prosecuted. Curiously, some of the more recent cases of internet bullying have been with their peers, not adults. Will laws be created to prosecute teenagers for being mean to each other online? Or is it better to promote safe behaviour online, using defamation and harassment laws as they stand and let reason prevail?

The key point is that most teenagers most of the time look after themselves well online, and are more than competent to protect themselves and not meet strangers they find online alone in private places. The few who don't, do so for reasons that no law will fix, and those who care about them should provide means for them to be able to communicate what it is they want and why, in a non-judgmental and open manner. If they do stray, and do end up engaging in illegal behaviour offline, the criminal law remains to provide harsh penalties for those who exploit the young, and the internet is a fine tool for finding such people!

UPDATE: The Guardian reports the Daily Mail is facing the threat of a defamation suit because it initially claimed that it was Facebook that was used for this story.