Sunday, 28 November 2010

Are they by any chance related?

  Bradley Manning  mad magazine

         Neuman                                Manning

I think we should be told.

Sunday, 14 November 2010

And on the subject of international mobility...

... here's another story about young people getting out of Ireland.

Most people's sympathies will be more with the unsatisfied young emigrants than with Vodafone. The generation above them spent irresponsibly on both private and public goods. (Distribute the blame between private and public, according to your own political preferences.) Now the young are expected to pay for it.

Some libertarians see mobility ("voting with your feet") as a substitute for the failings of democracy. They can even get a bit utopian about it. This idea does not work so well if societies have to make investments over time. For then, people may exit during the hard times when society invests for the future, and return during the easy times when the investment pays off.  Mobility can also damage the "social contract" whereby young workers pay the pensions of the old, and expect to be paid for in their turn.

(Technical note: in theory, all these problems may be soluble with individualised funded pensions and with government debt to smooth consumption. In theory is the operative phrase. Real societies aren't like that.)

Ireland is a small country with a history of emigration. Crises may be made worse if the young and talented rush for the exit. Positive conclusion: small is not always beautiful.

Normative conclusion: a country is not just a bag to store capital and labour. Concordia parvae res crescunt, discordia maximae dilabuntur ;-)

Vodafone, globalization and taxation

Globalization skeptics argue that tax rates for capital haven't gone down very much as a result of increased capital mobility. Stories like this one suggest that they ought to focus their attention specifically on multinationals. Nick Cohen has a thoughtful take on the issue.

I am slightly more sympathetic to Dave Hartnett. If you are aiming to maximize the government's tax revenue, you probably would like the ability to negotiate with big multinational companies. Treating them the same as everyone else might just lead them to move elsewhere. On the other hand, there is a rules-versus-discretion issue: a reputation for being flexible on tax may lead other companies to demand special deals. Also, as Mr Cohen points out, the moral effects are not good.

Sunday, 7 November 2010


Everyone is discussing whether central banks' policies (low interest rates, quantitative easing) will increase inflation. At the moment headline inflation rates are low, so the inflation doves are winning the argument.

Before the crisis, there was a similar argument. Then optimists pointed to low headline inflation rates to show that we couldn't be in a bubble. But house prices aren't included in headline inflation. There was massive inflation there. Could the same thing be happening now? Obviously the house price bubble has not yet come back, but central bank policy could be sustaining prices at higher levels than they would otherwise be, and laying the foundations for another asset-price boom.

More generally, could it be that low interest rates act as a transfer to the mortgage-owning median voter?

Just asking, because my ignorance of macroeconomics is profound.