Thursday, January 15, 2009

Yes, we really are ruled by morons

The British Labour Party is living proof that morons really can succeed. Witness the evidence:

=> Dyslexia is a wicked myth created by bad teachers, MP says

=> Green shoots: Shriti Vadera's economic optimism sparks outrage

The first story concerns Labour MP Graham Stringer who believes that dyslexia is a figment of everyone's imagination. Fortunately, I'm sure most dyslexics will forgive him for his stupidity. Dyslexics tend to be more successful in life than non-Dyslexics, mainly because their difficulties with reading and writing tend to enable them to see "the bigger picture" more clearly. This is certainly the case with the several dyslexics I know, all of whom seem to be a lot more sorted out in their lives than I am in mine, especially in terms of location and lifestyle.

Yes, Mr Stringer has a certain point in that the rights-driven society which he has helped create, has led to lots of people jumping on the dyslexia bandwagon to gain longer times in exams and to get preferential treatment in their jobs, plus it has given state schools a pathetic excuse for bad teaching. However, to deny the existence of dyslexia purely because of this rights-driven agenda is to let you know the level of intelligence of the typical Labour backbench MP.

The second story concerns one of Gordon Mugabe's closest confidantes, Baroness Shriti Vadera, who has claimed to be able to see 'green shoots' in the economy. Yes, she's another one of the New Labour ruling class that lords it over the rest of us, and once again I suppose in some way she has a point. I foresee green shoots in the British economy, too. Except that the green shoots I see are the blades of grass that some of us will soon be forced to eat if the Labour Party's economic mismanagement of this country continues into the medium term.

We have two choices in this country. We can either embrace this recession and get it over with, or we can try to push it off and make a subsequent crisis even worse - though as we now living in the Keynesian long-run, pushing this crisis off to create an ever larger one in the future, may be the equivalent of a 30 stone man pushing off exercise, to prevent a heart attack. What Baroness Vadera probably sees is that some of the money-pumping of the Bank of England has led to a little quantitative easing in the financial system, plus five or six businesses closing down has led to a little more sales success for the only one left in the same arena. But this is hardly the beginning of a 'recovery'. Unless stemmed with appallingly high interest rates, which really will kill us all off, this quantitative easing is simply the grand central route to hyperinflation hell.

Also, in embracing the recession, Britain as a nation needs to become more competitive, to make itself an attractive place for foreign investors to place their long-term capital savings. This means shredding taxes and burning regulations. With a huge monkey sitting on our backs, the British government, which intends to do neither of these two things (unless funded by borrowing or inflation, both of which are just future tax rises in disguise), we will never be able to attract long-term foreign investment. Let's be generous and assume that inane government regulation doubles the price of goods production in this country and that taxes also, in and of themselves, double the price of goods production in this country. This leads to the inevitable result that everything produced in this country costs approximately four times more than the same product produced in a low tax, low regulation economy (e.g. China). And yes, I really am being generous. I would actually imagine that regulation and tax increases a final price to a finished good to more than ten times what it would be without them.

Do they wonder why nobody invests here, but prefers to spend their money on building factories in China instead? What strange perversion of history was it that led to an ostensibly communist country being so much more capitalist than an ostensibly capitalist one?

The only reason any British manufacturing company has survived this tsunami of socialist taxes and regulations in the last ten years has been through the availability of easy credit. And now that this cornucopia of pound notes has ended, as it was always going to, we are having to price things accurately in a world market filled with much cheaper manufactures. The solution, apparently, is to really ramp up the printing presses, but once again the short-sightedness of our 'leaders', like the good Baroness, is clearly visible to us all, because although in the very short run this will make British goods cheaper on the world stage, once manufacturers have to start re-stocking their commodities, they are going to start finding them astronomically expensive in terms of pounds, with Asian firms easily able to outbid them.

The solution to this crisis is to get the great fat monkey of government off our backs and to stop printing money. We need to sack government regulators by the million and we need to start removing taxes by the shed load. Halving the size of government and halving the volume of regulation would be a good start, though not really enough (especially as I am an anarchist! :-)

Getting back to the government, there is no greater and fatter fool in this country, than Baroness Shriti Vadera, as she proved yesterday. I think she has clearly nominated herself for the prize of who should be sacked first, though no doubt Peter Mandelson will be giving her lessons this morning on when to keep your mouth shut.


David said...

When you pause to think about it, if you were part of a government that had monumentally screwed up and now you have absolutely no idea how to get out of it, would you be telling or would you look around for someone to blame?

Would you undersake difficult Mises solutions so near to an election or might you have a go at some Keynesian electoral friendly witchcraft.

And, if you were the opposition, would you be announcing the sorts of things you knew you would have to do when finally in governent, like increasing interest rates to let the bottom fall out of the housing market quickly and firing hoards of civil servants?

That then is why we will hear loads of nonsensical initiatives from the government and very little or nothing from the opposition.

Sorry to bore you with all this but after a couple of feeble responses from the Redwood link, the penny just dropped.

Jack Maturin said...

This is, of course, the problem with democracy. If you haven't read it, David, I really must insist that you read:

Democracy: The God That Failed

I would lend you mine, but as it contains a personal and genuine signature from Der HoppeMeister himself, obtained on a cool Oxfordshire evening, I'm afraid it's under armed guard in my vault.

Yes, and it's a terrible shame about John Redwood being so statist. I had hoped he would prove to be the next Keith Joseph, but his hair and his thinking just aren't frizzy enough.

And Redwood is considered too extreme for the Tories!

Heaven knows what they would think of me if I joined their rotten party again.

not an economist said...

"The only reason any British manufacturing company has survived this tsunami of socialist taxes and regulations in the last ten years has been through the availability of easy credit."

Spot on. I have been increasingly frustrated over the last ten years with the way Labour supporters proclaim the success of the minimum wage policy, the low unemployment of the last ten years being seen as proof that such laws do not create unemployment.

To my mind what was missing from such an analysis was an acceptance that we were knee deep in a credit boom for much of the time. This inturn offset the potentially harmful effects of the min wage law.

The true test of such a law's "success" wil be the extent to which it hampers the country's economic growth during a recession. Me thinks it will just hold us back.

Mention any of this to a trot and you just get larfed at ofcourse ...

Jack Maturin said...

Best thing to do to a trot is give them a copy of 'Economic Calculation In The Socialist Commonwealth' by Von Mises, and then ask them to read it and then refute it.

No socialist has ever managed it, though countless numbers have tried.

Second best thing to do with a trot is cut them off from benefits, phD student grants, or government salaries, and see how they get on without living off the teat of the state.

Third best thing you can do is give them a wash.

As a former Trot student, I know of what I speak! ;-)