Posts

A Fine Example of Crypto Ignorance

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The video blogger Crypto Eri (@sentosumosaba) thinks she has evidence that the American Bankers' Association (ABA) wants the Federal Reserve to adopt Ripple/XRP as its cross-border settlement system. She has found a letter from the ABA which makes three requests to facilitate faster interbank settlement:
A liquidity management toolInteroperabilityAccess for chartered financial institutions Hey hey everybody, this looks just like Ripple's bag, doesn't it? "You are going to see how perfectly matched XRP is to meet their request," she says.

I've tracked down the ABA's letter to which she refers. It responds to a Federal Reserve request for comment on proposals for actions to support interbank settlement of Faster Payments. Faster Payments are domestic online and automated payments, not cross-border payments in foreign currencies. A bridging currency such as XRP is completely unnecessary for domestic payments. Indeed, it adds complexity and FX risk. I fear Cr…

A lack of compassion

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It's Saturday afternoon, and I have just returned from singing Evensong at Rochester Cathedral. The first reading was the dreadful story of Laban's deceitful behaviour towards Jacob. Laban made Jacob work for seven years in return for a promise of his daughter Rachel's hand in marriage. But at the end of the seven years, Laban palmed Jacob off with his other daughter instead, then made him work for another seven years to claim the hand of the woman he loved. This story is horrible not just because of Laban's underhand behaviour, nor even because Laban treated his daughters as his property, but because of the damage it did to Jacob's family. The rivalry between Rachel and her sister set up deep divisions that led to attempted murder and the disintegration of their family.

Writing in Unherd, Giles Fraser complains about disintegration of family. "Our social care crisis is a crisis of family and community life," he says. And he blames it on what he calls the…

An XRP Illusion

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Here is a Public Service Announcement.

Since @Galgitron, who I think is certifiably insane, has called for the XRP Army to deprive me of income by spamming the adverts on Forbes, I have decided to write future posts about XRP here on Coppola Comment. Moving to Coppola Comment negates accusations that I make money from posting what Ripplers call "FUD" on Forbes. Coppola Comment is widely read, but certainly doesn't have the reach of Forbes. There are no adverts here and I don't get paid for writing on my own blog. 


I can, however, write freely and say what I really think. And I will. I have taken so much abuse from XRP supporters now that I am distinctly uninterested in soothing their aggrieved egos with gentle words. If they behave like disgusting rabid hyenas, that is what I will call them. The same applies to the other social media harpies that descend whenever I say something that ruffles their delicate feathers.

To those who allege that I accept money from Bitcoin m…

Why labour markets don't clear

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This post originally appeared on Pieria in July 2014. 

Roger Farmer has a blogpost in which he shows that labour markets don’t clear. Specifically, employment varies with the business cycle, whereas the labour force participation rate and hours worked only show long-term secular trends. During cyclical downturns, therefore, we must conclude that there is more labour available than there are jobs.

New Keynesians say that the reason for this is sticky wages. If only nominal wages could fall enough,the market would clear and there would be no cyclical increase in unemployment. Therefore there should be labour market deregulation so that wages can flex with the business cycle. Roger Farmer questions this: he argues that the market simply does not clear at any wage.

I disagree. I think the market does clear – when wages fall to starvation level. Humans need a minimum income to sustain life, but employers have no responsibility for ensuring that the remuneration of employees meets that …

The foolishness of the old

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Most people want government to spend more money on them than on anyone else. This applies regardless of their tax contributions (those who don’t pay tax often demand more than those who do). And it is completely understandable. After all, charity begins (and when times are hard, ends) at home.

So when voters in the US were asked what the government’s spending priorities should be, it comes as no surprise to discover that their preferences varied by age:


As we would expect, the priorities of the young are education and jobs, the priorities of those of working age are jobs and benefits, while the priorities of the middle-aged and old are pensions and associated benefits (US pensions, pensioner benefits, Medicare, disability benefits and family support are all bracketed together as “social security”, but pensions are by far the largest proportion). Older people are also much more concerned about defence, no doubt because they have lived through successive wars and threats of war that …

ECB forecasting is a joke

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Over at Bruegel, Zsolt Darvas takes the ECB to task for systematic forecasting errors in the last five years. He shows that the ECB has persistently overestimated inflation and unemployment, and on this basis he questions the ECB's decision to end QE in December 2018. I share his concern that the ECB has tightened too soon, though as the ECB's QE program is seriously flawed and very damaging, I am not sorry to see the back of it.

But I think that in focusing on the last five years, he has underestimated the scale of the ECB's failure. Here is his lovely chart showing Eurozone inflation since the creation of the Euro:

The ECB's persistently high forecasts in the last five years are painfully apparent. But what interests me is not the forecasts, but the outturns. The entire chart shows a marked downward trend. Inflation in the Eurozone has never been stable. Not once, in its entire history.

What the chart shows is systematic policy failure by the ECB. It has never maint…

The real victims of the "Rape of the National Insurance Fund"

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Some things just make me furious. This post by David Hencke, for example. In it, he claims that politicians of all three main parties agreed to raise the state pension age for women to compensate for the ending of the Treasury's contribution to the National Insurance fund. This isn't true.

Not only is it untrue, but it directly contradicts the research upon which the article relies, and dishonours the memory of a man who fought hard for pensioners' rights.

Hencke based his article on this piece by Tony Lynes, written in 2006 as a basis for a National Pensioners Convention factsheet on the National Insurance (NI) Fund. As readers of this blog will know, the NI Fund is not a pension fund. It is a clearing house for receipt of NI contributions and their disbursement to pensioners and beneficiaries. Tony Lynes describes its workings perfectly:
National Insurance is the system through which contributions by working people and employers are paid into a fund - the National Insur…