My Saturday ramble, then a list of great links.
Update: This post original began with a bit of a gender wars-style rant. I think it was fair but it didn’t really add anything, as one comment says below. I’ve deleted it.
I have mentioned before that – unlike me – most of my friends will only vote Labour.
Goodness help me that I should be stuck on an island with a bunch of Young Tories. To generalize, people who vote Labour and read The Guardian are more fun. They like better music. They eat properly. They read books. They’re not necessarily more generous to their family and friends, but they have an impulse to be more generous to ‘society’.
Alas, they are also less logical, less self-honest, and less apt to have a discussion about ideas versus feelings (especially their own).
Hari-kari
If you want an example of this at its worst, read Johann Hari’s response to the cuts in The Independent, which was forwarded to me by several of my Labour supporting chums for a response.
Hari has form. His article on Goldman Sachs and the commodity bubble earlier this year was a similar wish list of miseries that he believes the super rich are inflicting on the super poor, high on hyperbole and deficient in sense.
Hari doesn’t care that free markets have overall led to falling food prices for 50 years. True, oil has played a big role, too, but closed economies that had access to industrial fertilizers failed to benefit to the same extent as the capitalist world. China and Russia had mass starvation under the central planning and price controls that Hari longs for.
Of course, he’d say he doesn’t want centralized planning – he just doesn’t want bad things to happen.
The Haris of this world spurn the long history of human greed, war, and misery to claim we’ve deviated from some Eden that never in reality existed.
The simple fact is that to be alive now is the best it’s ever been for the common man — and better than 20 years ago, too. And that will still be the case in Britain after these cuts.
Lies, damned lies, and leftists
But I just realised I’m now going to be completely hypocritical and not address Hari’s distortions in turn. The sun is shining, and this post is late.
Besides, I’ve already ranted about one specific cut, child benefit, and once is enough for any blog in a month.
Hari and his ilk don’t listen, anyway. Resistance is fruitless.
For instance, Green Party leader Caroline Lucas was ranting on Question Time on Thursday night that the Government had gone out of its way to “hit the poor the hardest”. Evidence was immediately produced that in fact the top 2% – the richest – will be hit the hardest. She waived this fact away without an apology.
I guess “You’re hitting the richest hardest but also poor people will be poorer” just doesn’t have the same ring to it.
The simple truth is that the poor will suffer because by definition more of them are on benefits. But whether this is “the deserving poor” is a thornier matter. The Coalition seems to have gone out of its way to allocate extra money to the disabled, for instance.
Poor kids are a trickier issue. On balance money may be leaving such families, but at some point parents have to rediscover the link between fitting your life circumstances to what you can afford.
If less children were born into families that can’t afford them, more money could go to educating the rest and breaking the cycle of poverty.
Keeping it real
One example that really brought home to me the gap between supporting the ‘deserving poor’ and our benefits system was the change in housing benefit rules about age, and what’s called the Shared Room Rate.
Following the Review, it will be assumed that someone claiming this benefit should be sharing a house with others (and so entitled to less taxpayer money) up to age 35. Previously, full housing benefit kicked in at 25.
What planet are these people on? With the exception of a few Trustafarians, I don’t know anyone in London who lived alone at 25. Even the aspirant Cityboys tend to share until they buy their Clapham pad at 30. Running through two dozen friends in my head – all in work, none on benefits – only one person lives alone under 35.
Imagine this sort of unearned and disproportionate entitlement creeping throughout the system, and you begin to see why the benefits bill is so vast, and why millions of people are unemployed (yet cared for by the State) while Polish migrants with some gumption come over, find work, and show what was possible all along.
There are disabled people in this country who can’t work. There are poor children who wouldn’t have a home without State assistance. Most people could never afford to fund their health insurance 100%. And nobody wants 70-year olds sleeping under bridges. All good causes.
So I’m for a State that cares where it should care. But overall, it should care less. And the politicians who trade public money for votes, and the journalists who peddle lies and exaggerations for a living (the starkest fact – despite these cuts – is that spending is going to keep increasing for the next four years!) – can go hang.
Oh yes, I forgot that other trait: self-interest. We hear repeatedly how economic liberals are greedy and self-interested. Actually, everyone is greedy and self-interested, to some extent. Accepting that and running with it is the genius of capitalism.
For proof, just hang out in your local cafe or student union or visit some relatives or trawl the online bulletin boards to hear which spending cuts people are moaning about.
Pretty much without exception – those that affect them most.
p.s. The picture of the girl being, er, ‘seduced’ by the wolf cum alpha male isn’t meant to illustrate the rape of the poor. It’s just some fun modern art from the Affordable Art Fair, being held in London this weekend.
From the money blogs
- The truth about Schiller P/E (CAPE) – Bad Money Advice
- Correlations between asset classes – Intelligent Speculator
- Unintelligent, intelligent investors – The Psy-Fi blog
- What are sentiment indicators worth? – Investing Caffeine
- Send not for whom the bell tolls – Simple in Suffolk
- Should you save for the long-term in college? – Digerati Life
- How to avoid lifestyle inflation – Cash, Money, Life
- Personal finance and the Shawshank Redemption – Money Reasons
- 7 reasons to rent your home – Christian Personal Finance
Money Maven roundup
- Oblivious Investor explores probability versus payoff when investing.
- Len Penzo has some great gift ideas.
- MH4C continues the theme with homemade Christmas gifts.
- Wealth Pilgrim on how to get great jobs without a college degree.
- Canadian Finance Blog knows a way to save money on groceries.
- Deliver Away Debt explains how to overspend on your cell phone.
- The Centsible Life says you should protect your identity.
- Green Panda Treehouse on taking action.
Financial stories from the mainstream media
- Ouch! (The spending review) – The Economist
- What are commodities telling us? – The Economist
- How to save fees when buying investment trusts – Motley Fool
- IFS analysis of the spending review – Flanders/BBC
- The spending review in-depth – FT
- UK tenants would benefit from German lessons – FT
- Hot or not foreign property spots – FT
- Investing in affordable art – FT
- London: Manhattan-on-Thames – Telegraph
- Bank of England forecasts flat or falling house prices – Telegraph
- Government bonds: The latest bubble – Telegraph
- How to be your own Chancellor – The Guardian
- Should you get a pre-nup? – The Guardian
Like this roundup? Subscribe to get it every weekend.
I don’t necessarily agree with all the specific measures, but the general effect of the CSR is about right. It is not a programme of massive cuts, but a modest scaling back of future spending commitments that Labour, by and large, would also have implemented with just a little more leeway on timing.
.-= Salis Grano on: Weekly Roundup 22-10-10 =-.
One of the issues that I find unbalanced is the idea of managing the poorer and unproductive parts of society and their seemingly out of control birth rate. Few mention the low birth rates from the better off parts of society and the potential impact.
If it wasn’t for migrants being allowed into the UK we would end up like the Japanese, with an ageing population on a scale that makes our issues almost trivial.
But, who’s really to blame:
Is it the poor for producing lots of unproductive people?
Or, is it the middle class DINKys (Double Income, No Kids) who also don’t produce productive people.
Here’s an example:
The state pension, it’s a “pay as you go” system as there’s no fund built up, it’s paid by those that pay tax. Those that currently pay tax support those that claim their state pension. The younger generations support the pensioners and those that are pensioners now, supported those older than themselves. People that elect not to have any children and claim the state pension haven’t contributed to this financial support in the same way as someone that’s produced economically productive people. The same goes for those that have had children but those children haven’t been economically productive i.e. dependent on benefits. The only way to “truly” contribute to this system is to produce productive people.
In this instance, are the poor and unproductive any different to the productive DINKys?
I’m not anti those people that have elected not to have children but I feel there’s some hypocrisy from those that are self-righteous about the fact that “they haven’t burdened society by having kids”. My view is that this isn’t the full story.
@Thomas – I agree it’s a complicated story. Indeed, when you take into account the pressing need – based on what we currently know about energy use, the environment, and food supply – to reduce not grow the human population further (on a global level) I don’t believe there’s any easy morality here for anyone, on any level. That said, I’m unpersuaded that society really needs to be funded by a Ponzi-scheme. Theoretically asset rich aging states could invest a proportion of their wealth in younger, foreign ones (even the US counts in this context – you don’t have to risk China or India) as a form of national saving, surely?
@Salis – Yes, though I think it may feel a little worse than that in some instances, as infrastructure starts to decay and real private sector incomes keep moving ahead. That said, I obviously don’t think there was any choice given where we are. We should have been putting money aside in the good years, as the Norwegians have done with their giant oil fund etc, to create a counter-cyclical buffer (rather than Labour’s aspirational but unfunded one).
The job of the government should be to set the ‘Queensbury Rules’ for our society and our economy. And it should use its full financial power to bring those about – not pander to the lobbying of those with wealth as it is now.
We should allocate sufficient of our production to ensure that everybody can live a basic existence free from poverty as long as that person is contributing something to society (or is exempt due to age or infirmity) and that should be pretty much it for a safety net.
Then it is all about managing externalities – the main one being the crazy differential between development land and agricultural land. Which is of course the singular most screaming example of pricing informing a massive market failure.
.-= Neil Wilson on: Why we can afford the deficit =-.
@Monevator – pace your opening paragraphs (which will have put a lot of XX chromosome readers off), you’re on the money as usual. Keep up the good work! I really enjoy your blog and keep meaning to drop you a line so here goes, at last.
@Bill – Thanks for your stopping by! Yes, the first few paragraphs were obviously not the most PC things ever spouted by man, but I’ve realized over the past 12 months that most writers I like sometimes say things I profoundly disagree with, and it doesn’t make me like them less. Maybe more? Pandering is what I can’t abide.
Besides, one of those (in general, I stress again!) female strengths is emotional intuition. I’m sure many will say, “Hmm, well someone woke up on the sofa this morning” and they won’t necessarily be entirely wide of the mark. 😉
Besides, I wasn’t exactly nice about my friends, Labour voters, or even Conservative voters. The Milwall supporters approach to opening paragraphs.