Will Hutton manages to ask a good question

Implicit in this is a question rather than assertion:

What amazes the party and commentators alike is why a 78-year-old moderate stalwart such as Biden has suddenly become so audacious. After all, he backed Bill Clinton’s Third Way and was a cheerleader for fiscal responsibility under both him and Barack Obama, when the stock of federal debt was two-thirds of what it is today. Now, the debt is no longer to be a veto to delivering crucial economic and social aims.

Why that change, why no longer?

What has changed is that quantitative easing has morphed into Modern Monetary Theory, that magic money tree. Or, as older language had it, monetisation of fiscal policy. Something which does rather lead to disaster, as Venezuela and Zimbabwe have recently shown.

Yes, of course, we agree that there’s a lot of ruin in a nation but it’s not an unlimited amount, as the Great Debasement shows in our own lands.

The politicians now all agree among themselves that anything desired may be had by printing the money to gain it. Thus that’s what is being done. Which is, has been all along, our complaint about MMT. We do indeed know that within the theory there is the solution, that when inflation arises taxes do to curtail it. But that’s not how politics works - spending is much more fun than taxing. Thus spending will rise and tax will not to offset as the theory states needs to happen.

Thus why politicians both here and in the US are having such fun in spending more than they’re willing to impose in taxation. We insist that this won’t work out well.

KPMG and the necessity of a circular economy for renewables metals

We have, some time ago, addressed the mistakes people generally make when considering the availability of metals and minerals. Mass confusion over what is a mineral reserve - the correct answer being something created by spending the resources to do so - leads to the usual insistence that a circular economy must be created. We have no problem with recycling of metals or anything else, we just keep pointing out that it’s justified only when a profit is made by doing so.

KPMG is the latest producer of one of these reports and, to be fair, it’s better than many. It does point out that the demand for interesting metals for the renewables revolution can indeed be found in them thar hills. There are still the mistakes though:

Not all theoretical reserves are technically or economically extractable

Nonsense. The definition of a mineral reserve is that it is technically and economically extractable using current technology, at current prices, and to make a profit while doing so. If we can’t do that then it’s not a reserve.

They also fall prey to a piece of environmentalist misinformation:

There are also ESG concerns associated with extraction. In Chile, lithium uses approximately 500,000 gallons of water per tonne extracted, which diverts away 65% of available water in some regions, causing adverse impacts on local farmers growing produce and rearing livestock

No, really, just no. The lithium is contained in brines. The extraction method is to evaporate the water away from the contained salts - once that’s done the lithium is extracted from the remaining sludge or powder. To say this “uses” 500k gallons of water is nonsense - we’re extracting from the water by extracting the water. Such brines would, if drunk, kill the cattle and ruin, through salinity, any farmland they were used to water. A much more realistic statement would be that we’re liberating the water into the clouds using the locally abundant sunshine to do so.

Once these sorts of misunderstandings are cleared up the base complaint left is that Johnny Foreigner might be beastly to us as we ask if we may have some more of their lovely minerals. At which point we get back to that insistence that we must have a circular economy and recycle everything.

Well, yes and no. As we’ve said, nothing wrong with a bit of recycling as long as a profit is being made. Those offshore wind turbines might have 4 tonnes or more of rare earth metals in them (more likely an overcount, as FeNdB magnets do contain that iron as well but still) and with neodymium at $40 a kg when reprocessed there’s a decent margin in there. So, as and when these are replaced we’d expect that concentrated store of value to be recycled. The gramme or two of the same magnet material in your hard disk drive (for those who have not graduated to SSDs as yet) is markedly less profitable to collect, extract and process. So much so that landfill is the useful destination.

The important underlying point to grasp here is that no policy decisions are required. The difficulty of extraction, geopolitical worries, resource availability, recycling or reprocessing possibilities, value in end us and all are already incorporated into market prices. We can thus leave greed and capitalism - in the Prime Minister’s words - or eye for the main chance if we prefer to deal with this. There is no need for a grand plan or a redesign of the system, enlightened self-interest, as so often, is already dealing with this for us.

Shops to houses conversions - a little ahead of schedule actually

We here at the ASI have long said that our job, duty, is to be those off howling in the wilderness with the odd ideas for how society can and should be improved. Start with an entirely contrary to accepted fashion proposal and then spend a decade seeing it move from absurd to thinkable through acceptable to policy.

The latest one seems to be a little ahead of schedule:

New rules allowing shops to be converted into homes to revitalise high streets

The logic being impeccable. Online shopping means we need a smaller retail estate. We do also tend to think that we’d like more residential estate in the country. Ease the rules to allow the conversion:

“We are creating the most small business friendly planning system in the world to provide the flexibility needed for high streets to bounce back from the pandemic,” Jenrick said.

“By diversifying our town and city centres and encouraging the conversion of unused shops into cafes, restaurants or even new homes, we can help the high street to adapt and thrive for the future.”

Back in August 2011 we pointed out that this was indeed the obvious and logical solution:

Or we could observe reality and conclude that with so much shopping now done by computer we simply don’t need as many shopfronts as we used to. As with manufacturing, we could turn those buildings we no longer need to other uses.

Anyone know how to convert a shop into affordable housing?

It was good sense then, it’s good sense now, it’s just that things seem to be speeding up - we’re still 5 months short of that decade. No, we don’t claim sole and whole ownership of the original idea but we would like to suggest that perhaps people should start listening faster.

The Guardian, Consumer Reports, and America's water

The Guardian has teamed up with Consumer Reports to have a look at America’s water supply. They say that the results are terrible. We would urge a little consideration of the details of what they’re saying:

Since the passage of the Clean Water Act in 1972, access to safe water for all Americans has been a US government goal. Yet millions of people continue to face serious water quality problems because of contamination, deteriorating infrastructure, and inadequate treatment at water plants.

CR and the Guardian selected 120 people from around the US, out of a pool of more than 6,000 volunteers, to test for arsenic, lead, PFAS (per- and polyfluoroalkyl substances), and other contaminants. The samples came from water systems that together service more than 19 million people.

A total of 118 of the 120 samples had concerning levels of PFAS or arsenic above CR’s recommended maximum, or detectable amounts of lead.

Umm, wait a minute. Above CR’s recommended limit? Yes:

In the early 2000s, the EPA considered a drinking water limit for arsenic of 3 ppb, before settling on 10 ppb as an amount that balances the costs for water system operators while reducing health risks. CR scientists have long said the EPA should set a limit of 3 ppb or lower, in line with what other health experts and environmental advocacy groups, such as the Natural Resources Defense Council (NRDC), have called for.

CR invents a limit of less than a third of what the government does then claims that water supplies exceed the invented limit. The same is largely true of their findings about lead.

It’s entirely possible that As and Pb levels in drinking water should, righteously, be lower than what they currently are. But that is the case that needs to be made, proven. Rather than just the creation out of thin air of some number and then the claim that it’s not being met.

This is, as with so much of the environmental scaremongering of our day, an attempt to pervert the measurement of pollution in what is, after all, one of the cleanest human societies that has ever existed.

30 percent more government doesn't do it, does it?

The IFS tells us that the Scottish Government spends rather more per person than the British - or, if you prefer, the English.

Nicola Sturgeon's spending on Scottish public services is 30 per cent greater than the equivalent funding in England thanks to the Barnett formula, according to a study published on Wednesday.

The impartial Institute for Fiscal Studies (IFS) found a growing cross-Border spending gap, with the SNP administration in Edinburgh having more than £1.30 per person to spend on public services for every £1 in England.

Almost all of this difference - 28.9p out of 30.6p - comes from the Scottish Government's block grant from the UK Treasury, which is calculated using the controversial Barnett formula.

Leave aside the grand proof here we have of Milton Friedman’s contention, that there’s nothing so permanent as a temporary government programme - this was, after all, a late 1970s political fix expected to last for a couple of years.

Think, instead, of what this tells us of the continual calls for just that little bit more of government that we are constantly assailed with. If that little bit more on this and that and t’other were to produce a better society for us all then Scotland would be that better society to which we should all be aspiring.

Is it?

There’s no actual evidence from any real numbers that it is. Lifespans, addiction rates, educational achievements, any other such measure we care to look at, do not skew Scotland’s way in the manner that such hugely greater spending suggests they should. Or, even, as those who insist England should be spending greater such sums insist would be the result of such taxpayer penury.

Which is the correct manner of looking at these numbers. We have just conducted an experiment, a real world one. That greater public spending does not create the nirvana that is claimed. Therefore our solutions to making the world a better place are going to have to come from a different set of actions.

As we’ve been saying for decades now, it’s how the money is spent, not the amount of it, that makes the difference. Thus it is the structure of public spending that needs the reform, not the amount.

No, really - which of Scotland’s socioeconomic achievements is it possible to point to which justifies a 30% expansion of the State? None? Then the putative expansion is not justified, is it?

Why should someone on less than median pay be able to afford the median house?

It’s very difficult indeed to work out precisely what it is that The Guardian is complaining about here:

Low-paid key workers on the frontline of the Covid-19 pandemic would not be able to afford to buy the average priced home in 98% of Great Britain, an exclusive Guardian analysis has found.

Years of rising prices have put homeownership out of reach of many key workers, who have also experienced pay freezes and had to channel their wages into paying high private rents, rather than being able to save for a deposit.

The Guardian’s analysis, which was based on the sums needed for a 90% mortgage, found that a nurse on the median wage of £33,920 a year would not be able to raise a big enough mortgage to buy the median-priced property in almost three-quarters of local authorities nationwide.

Yes, this seems obvious.

According to the Office for National Statistics, the median salary for a senior care worker in the UK stood at £21,243 in 2020.

Based on these earnings, with a 10% deposit to put down, a senior care worker would be able to afford the average priced property in just six council areas in Great Britain, locking them out of 98% of areas.

So does that.

Someone paid less than the average cannot afford the average. Seems simple enough to us. The nurse example, the first one, is only very slightly more complex. The median - even modal - UK household contains two earners. Therefore it’s not a grand surprise that the median - even modal - house costs more than can be afforded upon one income.

The correct response to this complaint is a shrug and “Yes, that’s how numbers work”.

The lower paid do not afford the average car, the average weekly food shop, the average clothing budget, this is what making less than the average wage means. Why would or even should housing be any different?

This is all entirely different from whether housing is too expensive - it is - or whether we should do anything about the price of housing - we should, build more of it. Or even our perennial suggestion, blow up the Town and Country Planning Act 1947 and successors. It is also nothing to do with whether care workers should be paid less than the average wage, nurses about spot on it.

Maths just does work out that those with lower than average incomes can buy less than the average. And?

Reasons for optimism - population

Some commentators, famously including Sir David Attenborough, are pessimistic about the world’s population, especially about what they see as its likely future population, and think the planet is headed for a catastrophe of unprecedented proportions. Stanford Professor Paul Ehrlich led the charge with his 1968 book, “The Population Bomb,” in which he predicted worldwide famines in the 1970s and 1980s because we’d be unable to grow enough food to feed the rising population. This is the argument by which Thomas Malthus predicted recurring world famines as food supply would necessarily fail to keep pace with rising numbers of mouths to feed. Paul Ehrlich in April 1970 predicted that: “The death rate will increase until at least 100-200 million people per year will be starving to death during the next ten years.”

It was not just famines that the increased numbers, some suggesting 50 million people, would bring. They would pollute the planet, consume its resources, degrade the environment. wipe out most species, fight over scarce water, and lack decent living space.

Ehrlich wrote just before Norman Borlaug’s Green Revolution turbo-charged the world’s food yield. In the years before Ehrlich wrote, the world’s rate of increase in population had itself been increasing, but just as his book was published, it began to decline. Ehrlich and others had missed out on two important things. They underestimated humanity’s capacity to solve problems creatively, and they failed to spot what happens to fertility rates as people grow wealthier.

People in poor countries need children to work to augment the family budget, and to support their parents in old age. But as countries become richer, they can afford to put children into schools instead of fields and factories, and can afford social welfare to support the elderly. This is why population increases have tailed off as wealth has increased. They are negative in rich countries. Fertility rates suggest that the world’s total of over 7 billion will perhaps reach no more than 10 billion, maybe by 2050, and then decline. This is happening because more countries are becoming richer.

The world can handle 10 billion. It has increased its food production, and new technologies including GMOs and cultured meats indicate that it can do so much more. It has developed ways to produce energy and to provide transportation with far less pollution. It can produce more food without depleting rainforests. It has found ways to substitute new plentiful resources for scarce ones, using carbon composites instead of steel, and fibre optics instead of copper. Julian Simon’s “Ultimate Resource” of human creativity has shown itself capable of producing innovative solutions to humanity’s problems.

Paul Ehrlich was systematically proved wrong in his predictions by events, as his pessimistic forecasts never came about. The world is already responding creatively to the challenges that an increased population will bring, but it will be nothing like the increase that a straight-line graph or a rising curve suggested. There is reason to suppose that the world can cope, aided perhaps by the addition of the new creative and better educated minds that are joining it. The outlook on population does not support the pessimism that doomsayers spread. On the contrary, it is grounds for optimism.

We agree entirely with Ed Miliband here

At least, we agree with a part of what is actually said:

Last thing we need is a 'cosy consensus' on climate crisis, warns Ed Miliband

Well, that’s The Guardian headline writer, Ed himself:

The UK must tell the truth about the “terrifying and exacting” scale of the challenge the world faces to avoid climate breakdown as it prepares to host a make or break summit of world leaders later this year, Ed Miliband has warned.

“A cosy consensus” between politicians, policymakers and some NGOs,

We agree entirely. Idle and comfortable groupthink in the face of a problem isn’t the way to do it. Actually thinking about the subject is.

The worst projections - RCP 8.5 and the like - have already been avoided by the fact that we have not turned back to using coal in ever greater amounts. In fact, all that development of solar power - the 80% reduction in costs in mere years - and wind and so on has meant that even the bad projections, like RCP 6.0, also aren’t consistent with reality. A realistic assessment of the effects of what has already been done - the US and UK have had falling emissions for a couple of decades now - tell us that we’re probably somewhere between RCP 4.5 and RCP 2.6.

Perhaps that’s too optimistic but there is still that vital point here. We have done some things, we must include the effects of those things done in our evaluations of what still to do. Which is the very thing the idle groupthink between politicians, policymakers and NGOs is failing to do. What, therefore, we need to incorporate into discussions in order to disrupt that cozy consensus.

Take just the one policy implication here. We are told two different things by that consensus. That solar and wind are cheaper than fossil fuel derived. This is certainly true for some applications in some places, for all and everywhere is a little more arguable. Also that poor countries require hundreds of billions to build their generating systems in a non-emittive manner. It cannot be that both are true. Why would anyone require subsidy to build the cheapest form of electricity generation?

OK, they might need it because they’re poor but they don’t need subsidy to build the cheaper system for climate reasons, do they? They will naturally build that cheaper anyway.

Another way to make much the same point. That subsidy required to those poor countries, we’ve already paid it. Paid it by investing to make solar and wind cheap and thus the technology of choice purely upon cost grounds. We already gave at the office that is.

So, yes, let us not be hoodwinked by some cozy consensus. Let us actually think about the problems that face us and how they might be solved. Something that does require we consider what we’ve already done - for only that will reveal to us what still remains of the task.

Making do with the quangos we’ve got

Victoria Street 

SW1 

“Humphrey.” 

“Yes, Minister.” 

“Someone came up to me in the House yesterday and claimed we had too many quangos.” 

“I think you may be referring to Arm’s Length Bodies.  What did you say?” 

“Well, I had to admit that I didn’t know how many we have but I told him the number was just right.” 

“Quite correct, Minister.  We now only have 15 – it used to be more.” 

“Well, I suppose health and social care is a wide remit so we need a range of expertise. How many of the 15 help us on social care.” 

“The Care Quality Commission has just started taking an interest in social carers but apart from that, I regret to say the answer is zero.” 

“No wonder we can’t produce a Green Paper on it, Humphrey.  We have no quango to write it.” 

“We do have one in the works, Minister, as we have frequently announced, but not having a policy means we cannot be blamed for failing to implement it.” 

“What has blame got to do with it?” 

“Everything, Minister. Quangos are a brilliant device: they are part of government and entirely independent at the same time. The NHS is, technically, a ‘non-departmental public body’ which means you are not to blame when things go wrong but you can take the credit when they don’t.” 

“So that was why I was able to wash my hands of the personal protective equipment supply disaster by saying Public Health England was to blame but as it is independent, I could not interfere.” 

“Unfortunately not, Minister. I think I was away at the time. Public Health England is an executive agency and is therefore fully accountable to you.” 

“Lucky the media failed to pick that up. In that case, I’m responsible for quite a lot.  Public Health England has a wide remit.” 

“It does indeed.  It aims to keep us fit and trim, free from sickness and debility. Such is their concern for our safety that when weddings return on April 12th, brides will not be allowed to kiss their grooms unless they have been living in sin.” 

“Humphrey, you’re joking?” 

“Not at all, Minister.  Social distancing must be maintained. And Public Health England is tackling violence against women.” 

“Violence against women?” 

“On 16th March, PHE announced that misogyny had become a pandemic and therefore fell within its remit. They have a seven point action plan to deal with it.” 

“Curfewing men from 6pm?” 

“That is not one of them, Minister. The actions include ‘A whole-system multi-agency approach to serious violence prevention’ and the appointment of ‘a Consultant in Public Health to lead on violence prevention. They [sic] will be responsible for developing and implementing an action plan which will seek to tackle the root causes of violence, incorporating serious youth violence, domestic abuse and violence against women and girls.’” 

“Is Dido Harding in charge of this?” 

“Worry not, Minister, she was at the time of the announcement but there have been developments.” 

“Has anyone informed the Home Office and the police that we have charge of preventing violence against women?” 

“With so many changes in hand that there is the possibility that the whole-system multi-agency communications have had a slippage. What is important, Minister, is that we have an underlying strategy to deal with all these crises.” 

“Really, Humphrey.  Have I been informed about that?” 

“Possibly not, Minister. The strategy is to respond to every crisis with a media release highlighting the role of our nearest ALB.  To avoid adding further ALBs, even for social care, we shuffle the existing deck to give the impression of effective action.” 

“So when we discovered last year that we needed Covid vaccines in a hurry, which of our quangos was given the job?” 

“I had to advise the Cabinet Office that our only candidate was Lady Harding and she was already fully occupied. The Cabinet Secretary, in a rare expression of wit, suggested that she was put to the test and disappeared without trace.  Did I not tell you, Minister?” 

“You certainly did not.  Vaccine procurement was clearly a matter for Public Health England. With their skills, what could’ve gone wrong?” 

“Well, I have to admit Kate Bingham has done a grand job. She’s a very bright person with a formidable and relevant CV and married to Jesse Norman.  Of course, she wouldn’t have fitted Public Health England.” 

“Why not, Minister?” 

“She read biochemistry at Oxford, not PPE. But we should not be talking about PHE any more.  You will recall we responded to all the totally unjustified criticism PHE and Test and Trace received last summer by announcing, on the 18th of August, the marriage of the two as the National Institute for Health Protection.” 

“Glad you reminded me, Humphrey. I remember thanking ‘all my brilliant colleagues at PHE’ and others and especially ‘Duncan Selbie for his leadership of PHE’,  Then I sacked him and put Dido Harding in charge.” 

“You did indeed Minister. The clever part was not to task NIHP with resolving the Covid problems until nine months later when the pandemic would be largely over anyway. It seemed a suitable period before they could be left holding the baby. Not everyone appreciated Lady Harding being put in charge but it was either that or Lady Harding becoming Chair of NHS England.  She was already in charge of NHS Test and Trace and Chair of NHS Improvement which was merging with NHS England, if you are still with me, and therefore lined up to be Chair of NHS England, knocking out Lord Prior.” 

“Who is Lord Prior?” 

“Many people would like to know that, Minister.” 

“Problems present themselves in different ways, Humphrey.  This month the blame merchants have been out in force again.  They claim we were unprepared for Covid. Do we have an answer?” 

“Yes, we have Minister and, if I may say so, its release has been a triumph.  Congratulations. NIHP is no more. On 24th March, we announced its replacement by the UKHSA (UK Health Security Agency) which will be led by Dr Jenny Harries. Our health will now not just be protected but be secure.”  

“I think I said it would be ‘built on the world-class public health expertise of Public Health England (PHE)’ and it ‘will play a leading role in our global response to external health threats.’ ‘It will work to understand ever better the needs of citizens, and to build that understanding into the design and continuous improvement of services.’ It will remove inequalities arising from pandemics by ensuring there won’t be any more pandemics.”  

“I think that may be going a little too far, Minister.” 

“Not at all. If it turns out to be rubbish, we can sack Dr Harries and give the quango a new name.”

So how do problems get solved?

That British retail is changing is obvious enough. The question is, well, what to do about it? Perhaps we should have a plan? Some people who don’t know much about it all, have no particular incentive to get it right, could impose their prejudices upon everyone else? Or, of course, we could not use politics to try to solve this problem:

More than half of the 497 department stores closed across Britain in the five years to November remain vacant,

Quite what such buildings should be used for next we don’t know. More to the point, that they’re - half of them - still empty means no one else does either. Perhaps they should become housing. Or the buildings razed and a park put in place. Or something else be sold from them, like go-kart rides.

The thing being that we have a system to work this out. It’s that market of course. Folks try all sorts of different things and somewhere along the line something that does in fact work will be stumbled across. At which point the greedy capitalists owning the other buildings will take note and try to do the same thing. The universe of possible solutions is best explored by those with the local knowledge and the incentives to conduct the experiments.

As The Observer tells us in fact:

Wolfson may have the best ideas about what comes Next for shops

Seems likely to us. Long time industry professional who is actually paid, daily, to work out what to do with shops might be just the person to work out what to do with shops. The contribution that politics can make to all of this is to give him, and all his contemporaries, the room and freedom to do that experimentation.

That is, hands off and leave it alone. As nurse used to say, if you keep picking at it you’ll only make it worse.