Affordable housing through corproate welfare

The recent housing crisis in both the US and UK has led to central banks to pump liquidity into markets and for governments to bail out banks with £100,000,000,000 (billion!) to one corporation alone, Northern Rock. The US governments bailing out of Bear Stearns in comparison is quite minor, both absolutely (weaker dollar) and relatively as a percentage of GDP. With an extreme right wing lunatic in the Whitehouse and a supposed 'Labour' government in no.10, it tells you how far to the right neo-Labourites have flung. FYI that's about £16k each tax payer is underwriting.

If governments were serious about helping home owners it would just cut out the middle man, the banks. Rather than give massive loans and underwriting hundreds of billions of pounds of risk they could easily setup a tax free mortgage payments system with loans issued directly by socially owned banks. There is already a system in place like this with The Student Loans company which has lent out £15.5bn in loans since its inception.

This would instantly lower interest rates on mortgages, as with the Student Loan Company which offers lower interest rates than the free market can possibly provide. Furthermore all payments into this social mortgage scheme should be tax exempt, both VAT and income. This would instantly reduce payments by 39.5% (17.5+22%) for those who truly need it. I can hear the free market fanatic already, 'how can this be paid for?'.

Well, we could perhaps stop pumping liquidity into private markets, pump it into social ones. Further we could save £150bn in bailing out banks and issue mortgages with those savings. Total loans for house purchasing in 2007 was £154.9bn (source: CML). The proposed scheme could have been funded purely by the bank bailouts for one year even if every single mortgagee defaulted. More realistically not everyone will default, actually default rates would be far lower than on private market due to mortgages being more affordable. This means the asset the government has isn't junk like subprime bonds which have high default rates.

All articles assert that central banks have to pump liquidity into the market, they have to bail out banks all so we can afford our mortgages. That is indeed one way of doing it, to be sure it is a very inefficient method of doing it. The rough scheme proposed here isn't workable in isolation. House prices would, of course, soar with buyers swimming in government supplied liquidity*; supply side issues would need addressing, perhaps by social house building schemes if we are to avoid this. Nonetheless, this took me about 5 minutes of googline to find the stats, why doesn't the press talk about it?

*: if these social mortgages were only offered to first time buyers on a property they wish to live in (as opposed to buy-to-let) demand would be reduced as only those who actually need to live in a house would buy. The situation currently has all the usual elements of bubble speculation which artificially inflate prices.

José Manuel Barroso talking nonsense, FT fails to correct him

Apparantly

Protectionist pressures are increasing across Europe, even among political forces traditionally committed to free markets, according to José Manuel Barroso, the European Commission president... Mr Barroso, [is] a committed advocate of free trade

Yet Barroso, the great "advocate of free trade",

saw some progress in China’s position on the defence of intellectual property rights – a key concern for European companies. “The Commission doesn’t want to, but it might be hard to resist the protectionist calls,” he warned.

So Barroso truly believes in free trade, but wants to force China to enforce government granted monopolies (IPR) by threatening protectionist measures, aka a trade war. Protectionism to force more protectionism in the name of free trade. How can you even say that with a straight face?

NYT sees only three options for increasing Medicare/aid costs

Apparantly:

The Democrats do not say, in any detail, how they would slow the growth of Medicare and Medicaid or what they think about the main policy options: rationing care, raising taxes, cutting payments to providers or requiring beneficiaries to pay more.

Robert Pear thinks the only options are: reducing the quality of care, not providing care at all or increasing the cost of care. The question of tackling costs of the actual treatments and drug aren't a policy option. It would be relatively easy to abandon government granted patent monopolies and would drive costs down dramatically. However, I guess this isn't a main policy option due to either the powers of the lobbies or the fallacy that innovation requires patent protection. To be sure, innovation in an inefficent private market requirse patent protection. Innovation in a public enterprise require no patent protection.

Why care about Pandas, Tigers, Wolves and Whales?

Conversation on biodiversity from a forum, I raised the point that why do we care about rare wolves when there is suffering live stock around? A reply:

do you understand the value of variety, understand that a concrete desert cannot produce the kind of human stock a mountain full of wildlife & massive variety of life can ? The wolf is a teacher for strong humans & a hunter of weak humans. This is something to be respected & valued more than any gold or possession.

I understand the value of variety. Key noun 'I'.

These are value terms, everyone can have opinions and everyone's opinion is equally valid. When opinions on what to do in an area collide we fall back on political philosophy where I personally favour true democratic principles. Usually it boils down to the majority wanting to preserve biodiversity, say not mining an area. And an elite minority (corporations) that want to exploit the social environment for private profit.

But I would like a more concrete answer to justify preservation of biodiversity. The keystone species being wiped out causing massive effects to our planet is a good argument. Arguments that appeal to value terms, inheritantly subjective, are not. Why should one preserve the endangered Panda? I think they're beautiful and majestic creatures. But this is a subjective opinion. Why do we spend so many resources targeting preservation of, what seems to me entirely arbitrary animals, when those resources could be used to resolve suffering of live stock? I feel the same about these campaigns against Whale trolling. Whales are free range meat, they only suffer during capture. They indeed suffer absolutely horribly for the hours it takes these huge creates to die.

However, this pales in comparison to live stock. I just don't understand what the difference is. A cow or a chicken or a sheep, to me, is just as wonderful as a whale. I don't justify an animals worth by its rarity, otherwise there should be no such things as human rights because we are so numerous. Who cares if millions die? We bread well, there's plenty of us. I judge them by a formation of a nervous system. And to me it seems quite absurd that we care about wolves, tigers and panadas when other animals with equally well formed nervous systems are suffering. It just doesn't even compare.

Notes on Kosovo

Written 30/07/2008, seemed relevant for anyone doing google searcehs :-p

As I see it, it's a pissing match between Russia and the US. EU will remain more docile worried about the gas from Russia, although the UK will probably stick harder with the US for i) traditonal reasons 'strong relatinoship' ii) The Livthinkenyo murder and the associated expulsions of Russian diplomats.

Putin doesn't care about Serb/Slav protection or historical links. The slav brothers have been used as a pretext to get involved in foreign conflict since WW1. What he most cares about is pwning Bush and establishing firmly that he can challenge US hegemony and reversing the embarrassment of having the Russian brokered peace agreement, after 1999 bombing, being largely walked over by NATO. He wants to send hte diplomatic message that you cannot treat Russia like that, when we agree to contractal terms, you must stick by them. Furthermore, there's the minor stuff of Russia being hypocrtical of Checnia if it supported independence and Spain for the same reason, they have their own independent movement.

I read this article by an international lawyer, was quite interesting saying that the only legal method of independence is partition. The UN holds Kosovo on Trust, this does not entitle it legally to give it away to a new soverign. Holding a country on Trust is not a legal method of annexation of terrirtory so no good title passes. The only legal way, is a 85% 15% split, where Serbia retains control of the majority Serb areas (15%) and Kosovo the rest. I also read in other aticles, that de facto, Serbia is already in control of the Serb areas of Kosvo where Kosovo does not try and exercise authority.

In sum, main obstacales to independence

• Increasing tension between US and Russia.
• Dosile EU, effectively hooked on Russian gas.
• Concern for Kosovar-serbs (10%, 200,000)
• Lack of strong economy or muscular legal institutions (corruption, lack of energy)
• Serbian insecurity that an independent Kosovo will lead to a rise in ultra-nationalist elements.
• Political mis-mangement in Serbia, should be telling the public they want to keep 10-15% of Kosovo that is full of Serbs.
• Minor concerns about multi-ethnicity being compromised
• Jurisprudential questions of the legality of Kosovian independence.

Some rough numbers on Northern Rock

The Government has bailed out Northern Rock by supplying them with £25bn loans. This is corporate welfare at the worst I can think of. A few rough numbers.

• 29.5 million tax payers in 2006-07.
• Each individual tax payer will loan £847.50 to the Rock.
• A rough estimate is the loans value to around £1bn subsidy outright. That is £33.90 each tax payer has given the rock.

Jan 5th Economist faking stats

[1968] ended with almost 60% of Americans voting for either Richard Nixon or George Wallace, a Southern segregationist [40 year itch, p39 in pdf edition]

In the 1968 Presidential Election 56.9% of those who voted, voted for Nixon and Wallace. According to the US Census there were around 116 million eligible to vote. 41.6 million voted for Nixon and Wallace. That's near 36% of eligible Americans voting for Nixon/Wallace or 20% of Americans.

In the words of Dean Baker, it would have been useful to inform the readers of this information.