Showing posts from January, 2019

The foolishness of the old

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 w

ECB forecasting is a joke

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 ne

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

In a recent article , David Hencke 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 his 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 Insurance Fund - to finance a range of benefit

The "Misérables" of the 21st Century

On Saturday, I watched Ken Loach's 2016 film "I, Daniel Blake" for the first time. The following evening, I watched the second episode in the BBC's adaptation of Victor Hugo's 19th century novel "Les Misérables". And here is my unpopular opinion. I think that as a parable of the U.K. today, particularly the difficulties experienced by single parents, "Les Misérables" beats "I, Daniel Blake" hands down. Why? Because Fantine's story is closer to the experience of single mothers today. True, we don't (yet) have a market for hair and teeth, and women today are much less likely to die of undiagnosed tuberculosis than they were in the 19th century. But the exorbitant cost of child care, and the fragility of employment, that were so disastrous for Fantine - these are all too often the reality for single parents today. Sadly, "I, Daniel Blake" highlighted neither. Contrary to popular opinion, the vast majority of sin