We Shall Not Look Upon Her Like Again

Ken Livingstone summed her up well, although he had a lot more negative things to say about her :

Ken Livingstone, Labour’s former London Mayor who clashed with Lady Thatcher during his time running the Greater London Council in the 1980s, said her personal “courage and drive” made her “the most admirable prime minister of modern times”.

“She didn’t worry about focus groups, she didn’t read the newspapers,” he said.

“There was real courage.”

However, Mr Livingstone said it had been “a tragedy for Britain” that her policies had been so badly flawed.

The Thatcher years were the start of the world we live in today. Her Premiership saw:

a) The start of the debt-fuelled culture which crashed in 2008 - remember "takes the waiting out of wanting" ?
b) The rise of the UK underclass, bastardy and drug use
c) The rise of the deregulated financial “economy” and decline of manufacturing
d) The rise in house prices
e) a collapse in the birth rate as
f) more women participated in the workforce (so they could afford a house!)
g) a dramatic rise in crime – linked to b)
h) the sell-off of vital infrastructure – power generation and distribution being the most important

While winning her economic wars, she was defeated in the culture wars – I’m not sure she even realised she was fighting one, let alone that she was losing. At any event, the Britain of 1990 was a lot further from Alderman Roberts’ Grantham than the Britain of 1979.

But the thing is – every government since has overseen the continuation and perhaps intensification of all the baleful trends above – with the one glorious exception of the Blessed Michael Howard’s noble reversal of the previous 50 years penal policy.

And, of course, Blair added a few more baleful trends all of his very own - including massive immigration and stopping all nuclear development in 1998.

We see in the Thatcher years yet again the contrast between the post-68 left's total dominance of the social agenda and their defeats on the economic agenda. A former girlfriend was a trainee social worker in 1980 - those girls hated Thatcher, more for her conservative social beliefs and her personal style than her economics. Such a straight !

Thatcher’s small-town conservative social values were almost redundant by the end of her reign, with rocketing rates of crime, bastardy, drug use, STIs.

The 80s were when the 60s went mainstream – I can still remember finding a bunch of lager-drinking ‘lads’ from my local picking magic mushrooms one September – their counterparts of ten or fifteen years before would have avoided such things like the plague.

So why did Mrs Thatcher’s social agenda fail so dismally while her economic agenda – at least as regards crippling union power – succeed?

Because individual capitalists – especially in the financial sector – found that none of that made much difference to their profits. Some things, like the influx of women into the labour market, and a move from manufacturing to services, were a positive boon as far as reducing militancy and strikes were concerned. The destruction of the existing cultural landscape was no problem to people who didn’t particularly identify with it – like Rupert Murdoch.

Bastardy, crime and the underclass were much more of a problem for working class people than the elite, who didn’t have to live with it or send their kids to school with it. Not much anti-social behaviour in Roy Jenkins’ Oxfordshire village – plenty in the Valleys where he was born.

Sure, taxes were quite high to pay the benefits bill – but they were coming down, and compared to the 1960s they were massively reduced. And North Sea oil paid the bills and enabled us to keep the balance of payments deficit getting too outrageous – while the City tax take climbed ever higher. You can only take one step at a time – IIRC Mrs Thatcher’s share of state spending was around the same when she left as when she arrived – remarkable when you think what the state no longer did – steel, coal, gas, water, power.

It's arguable (I tend to agnosticism) that Mrs Thatcher's curbing of the unions may have been a good thing in a relatively closed society. But when that was combined with immigration on the scale of the Blair years, it was an invitation to capitalists to fill their boots, then grind them in the faces of the poor. The toxic synergy of capitalist economic ideas (up to a point - would Adam Smith have bailed out the banks?) and post-68 left social ideas have between them created the Britain we see today - and it's not a pretty sight.    

Plan B - "Reinflate The Housing Bubble !"

George Osborne is the Son Of Brown :

"George Osborne is going into the mortgage business. What could possibly go wrong?

...(the taxpayer) is to underwrite £130bn of mortgage loans. They, or we, will pick up the tab if the borrower defaults. This will give banks the confidence to accept smaller deposits of, say, 5 per cent, meaning the borrower can borrow more. It is not hard to see how this will encourage struggling banks to get a racier appetite for risk. Imagine the discussion between the buyer and the mortgage adviser: "Oh yeah, it's underwritten by the government, borrow a bit more!" This is supposed to be the way out of a private and public debt crisis.

Remind me, how did the country get into its current mess in the first place? In America both political parties connived to loosen the lending criteria until anyone who wanted it could get a dodgy loan to buy a house. In the UK too, a private sector debt bubble was facilitated by a cheap money policy encouraged by the government. Combined with financial engineering by the banks, and the financialisation of the economy, the UK economy was made very vulnerable to an international shock. Once again, a big gamble is to be made based on pumping up the housing market."

There's no doubt that this will do wonders for buy-to-let landlords, who'll be able to buy new places to live in while renting out their existing residence (the loans are ostensibly not for buy-to-let) - and that's just what the British economy needs, after all. One wouldn't want the average house price to be affordable by the average earner, would one? As the BBC said this morning, it'll aid "recovery in the housing market" - and recovery is a good thing, isn't it?

In other news "Recovery in the fuel market", "Recovery in the food market", and "Recovery in the energy market"!

Oh, and along with handing over 20% of the price to housebuyers, the taxpayer will be on the hook for a chunk of any losses on the loans (losses to the lenders, of course - who else?) in the event of a US-style price meltdown. Altogether now :

"Privatise the profits -  socialise the losses !"

Obviously we'll need a bit of extra demand to keep rents up, too - so don't expect immigration to come down any time soon - or any time at all. Oh, and that inflation "target" that they don't take any notice of ? Well, they're going to take even less notice of it in future !

I guess this is all of a piece with previous policy, and will continue to drive the remorseless widening of the gap between the elite and the rest of us.

The UK Left Are The Lapdogs Of The Capitalist Elite

The entire post-68 British "left" are paper tigers, running dogs of capitalism. No one's profits are threatened by the SWP or the modern Labour Party.


If they were really a threat to capitalism, they'd be harassed by the State, find it hard to get bank accounts, have vexatious legal actions against them. Laws would be changed to make it harder for them to operate.

Their public sector members would be dismissed. Wealthy individuals would fund groups solely devoted to giving them a hard time - up to and including physical assault.

Members on their way to demonstrations would be 'preventatively' arrested, held until the demo was over, then released.

Now does left-wing politics attract that kind of reaction? Why not, if it's such a threat? In the past left activists were imprisoned, transported, harassed and worse.

To be fair, you do get the occasional building worker who's blacklisted for the hideous offence of putting his fellow-worker's safety before the target date or budget. But you don't find many building workers posting at Dave Osler's or Crooked Timber. The "left" isn't building workers these days - it's college lecturers and students - or even finance types like Chris Dillow or Daniel Davies.


 "It shrouded oft our martyred dead". Not many martyrs these days, to put it mildly.

 
Instead, the UK left is so cosy in the elite's warm embrace that the majority of their activists come from the public sector, and a disproportionate number from the higher education sector. If they're so dangerous to our rulers, why aren't they all worried about being fired? I don't think Professor Callinicos loses too much sleep on that account.


"The ruling ideas of each age have ever been the ideas of its ruling class"

 The post-68 Left social agenda has almost completely triumphed in the UK - witness Cameron joining Hope Not Hate and campaigning for gay marriage.

At the same time the Left economic agenda has been so utterly defeated that terms and conditions for the average worker are being driven down remorselessly - even as total remuneration for the top few percent accelerates into the distance.

Haven't any of these educated lefties wondered why this might be? So much success in one sphere, so little in another?

Why, it's almost as if there's an inverse relationship between the two!

May Contain Traces Of Horse (And Pig)

Fair play to the Irish. The UK state supports a vast array of bodies and busybodies designed to monitor and nag about food standards, inspectors for this and that. Someone doing farmhouse teas on weekends will have the kitchens checked ("a dog ? In a kitchen ? Quite impossible.") - yet when it comes to the mass sale of food, only the Irish apparently run a few checks to see if the label accurately describes the contents.

And if I read the story aright, only ONE out of 27 burgers tested contained neither horse nor pig, but beef only. Step forward good old M&S.

Marks & Spencer 'Simply M&S beefburgers' were the only brand found by the FSAI to contain neither pork nor horse and were 100 per cent beef.

Now it's pretty obvious that the supermarkets selling these products should be prosecuted under the Trades Descriptions Act, if nothing else. I can't really think that a small corner shop has much option but to believe the supplier. Not so for the big beasts. They spend enough time beating people down on price, but don't seem to worry about quality.

And prosecutions should then move up the chain.

An investigation into the production of beef burgers containing horse meat is focusing on imported ingredients, Minister for Agriculture Simon Coveney said last night.

Those naughty foreigners, eh ?


Hang on ... what's this at Lingfield this afternoon ?

14:05 7 Run		Blue Square Bet Maiden Fillies' Stakes Class 5, £4000.00 added, 3yo plus, £2727.00 penalty				1m
	Form	Horse	Trainer	Age	Wgt	Jockey
1(4)	90	Elusive	Miss A Stokell	7	9 13	Ann Stokell (5)
2(1)		Lily Edge	J J Bridger	4	9 13	K T O'Neill
3(5)	33-2	Lady Lunchalot (USA)	J S Moore	3	8 7	L Morris
4(3)	8-	Maxi Dress (IRE)	J H M Gosden	3	8 7	R Havlin
5(7)	4-	Mistral Wind (IRE)	E A L Dunlop	3	8 7	C Catlin
6(2)	03-	Star Sequence	H Palmer	3	8 7	Martin Dwyer
7(6)	5-	Tesco Value Burger (IRE)	R Broadbent	3	8 7	Philip Clarke

More Dreadful Tax Antics By Foreigners - The Government Acts

We've seen the dodgy deeds of various swarthy chaps documented in HMRCs Most Wanted.

But one should remember that if you want a decent job done, call a professional. All bar the top two or three of HMRC's bad-boys were six-figure tax dodgers or less.

If you want to keep nine, ten, eleven or even twelve figure sums out of the Revenue's sticky grasp and also get a Guardian column to argue how the other guy's tax money should be spent, or be appointed to a Government business task force, it's best to forgo concepts like "carousel fraud" and the "long firm", and think about ordering a Dutch Sandwich with a Double Irish to go.

You'll note the absence from HMRC's list of Starbucks, Google (whose execs have the brass neck to pontificate in the Guardian about how more kids should be taught programming in UK schools), Amazon (whose Luxembourgeois variant involves some interesting VAT shenanigans with the publishers),  Apple and a whole host of famous names. They avoid paying the corporation tax that unimportant sectors like manufacturing stump up - because their UK businesses make hardly any profit. Yet strangely, they don't want to close these loss-making enterprises - far from it. They're very profitable - but the profits are elsewhere.

Now most of these techniques involve vesting the company's "intellectual property" (IP) in some tax haven then levying a hefty transaction fee for use thereof, one which renders the business activity taking pace in a taxable jurisdiction (as it might be the UK) only marginally profitable or even loss-making. You'd see how it might be possible with software, where IP is all (how much does it cost to copy a disk?), but apparently a there's more intellectual property than coffee in Starbucks, for example :

"accounts filed for its UK, German and French units, which make up 90pc of European sales, showed an apparent loss of $60m, but Starbucks told investors its European business was profit-making...

Starbucks said that although it had paid no corporation tax in three of its “largest and most important markets” last year, it had paid value-added tax, social security costs and business rates...The coffee giant uses a range of measures to mitigate the impact of tax. For example, the European unit is required to pay a royalty rate of 6pc of sales to Starbucks for using its intellectual property. Starbucks, which has a complex financial structure..."

A paragraph back I mooted that IP was valuable stuff compared with the price of producing a CD. Well, yes and no - not if you're the biggest software company in the world.

 Steve Sailer on Microsoft :

"Microsoft has over 40,000 employees in the state of Washington in the United States. But they don't actually physically burn on to disks the software they develop. Instead, Microsoft, has a manufacturing plant in Puerto Rico employing 185 people that gets credited in Microsoft's books with a lion's share of Microsoft's Western hemisphere revenue and profits. It's making disks that's the really important thing that Microsoft does.

Despite all you've heard about Microsoft being a software company, they are actually a manufacturing company, at least for tax accounting purposes. To the IRS, Microsoft is basically a Puerto Rican, Irish and Singaporean industrial goliath with a money-losing R&D outpost in Redmond, WA."

Now call me naive, but I'm not sure how you can reasonably one day discover that all your intellectual property lives in an offshore haven. I thought Bill Gates set up shop in Washington State, and Steve Jobs worked out of a California garage. It's not as if they set up their firms in the Dutch Antilles or Caymans. I may be wrong, but I could have sworn that Facebook guy started at Harvard, not in Northern Cyprus.

Her Majesty's Revenue and Customs take a dim view of this sort of thing when done in the UK. I'm no tax lawyer (alas), but I understand the general rule is that if they consider a business arrangement to have been set up wholly or mainly as a tax avoidance measure, then they can knock it on the head, and Lord help you if you didn't put aside some of that money in case of an HMRC challenge.

Yet these rules don't seem to apply to multinationals. They seem able to extract the urine with impunity.

But wait ! What's this in the Telegraph ?

"New push on foreign firms’ tax"

"Political pressure to change the way foreign firms are taxed in Britain increased this weekend"

Lord Myners, the former City minister, and Margaret Hodge, the chairman of the PAC – which is carrying out its own inquiry into the issue – said the Government should look into a sales tax as a way of raising extra tax revenue from global companies.
Tomorrow the issue will again be in the public spotlight when Starbucks, Google and Amazon all give evidence on the issue to the PAC. The comments come in the wake of a string of disclosures surrounding the small amount of tax paid by large international companies.

The UK business of Starbucks, the coffee chain, reported sales of £398m and paid nothing in tax because it made a £32.9m loss. The online retailer Amazon paid no tax in the UK in 2010 despite generating sales of more than £3.3bn.

Lord Myners told The Sunday Telegraph that the current system for collecting corporation tax from multi-national companies (MNCs) is flawed. “Corporation tax for an MNC operating in the UK is close to being a voluntary payment,” he said. “The problem is that the tax environment many MNCs are interested in is a zero tax environment.”

Two points. First, is that this Margaret Hodge ?

"The Labour MP has been one of the fiercest critics of tax avoidance by companies such as Starbucks, Google and Amazon. However, she is likely to face questions over the limited tax paid by Stemcor, the steel trading company in which she owns shares and which was founded by her father and is run by her brother. Analysis of Stemcor’s latest accounts show that the business paid tax of just £163,000 on revenues of more than £2.1bn in 2011. However. it is not known whether the company – which made profits of £65m – used similar controversial tax avoidance measures criticised in the past by Mrs Hodge. Stemcor’s tax bill to the exchequer equates to just 0.01pc of the revenues it booked through its UK-based business. In accounts filed with Companies House, Stemcor revealed that despite generating about one third of its revenues in Britain, its UK tax contribution made up only 2.7pc of the tax the company paid globally. "

Now before Tim Worstall gets all cross, I know that taxes are levied on profits, not turnover, and that, for example, some capital investment or previous losses can be used to offset tax. But it doesn't look good. Be interesting to know how they do it.

The second point - if it's a sales/revenue tax they're proposing, how do they think they'll be able to impose it on Company A (notionally loss-making but remits vast sums to tax haven IP owner) but not on Company B (profitable although squeezed by Company A, pays its taxes) ?  Remember that Company A can probably hire brighter lawyers than HMRC.


I'd have thought the only long term solution was to stop the IP nonsense in its tracks i.e. for the law to adjust to todays business practices, treating IP more like a physical asset. If Microsoft made car parts at Redmond, then smuggled them out to a low-tax jurisdiction (as it might be Puerto Rico) to sell, senior guys would soon be doing eight-to-twenty-four stretches and everyone else doing the same would clean up their act.

The alternative is public and governmental pressure - a lot of it. Treat Amazon, Starbucks as if they were the late Jimmy Savile or the Medellin Cartel - or alternatively, the way the Obama administration treated BP and is about to treat HSBC and Barclays. Point out the Kobo as the ethical alternative to the Kindle, or that Amazon vouchers should be what South African sherry was in 1968. No cosy relationship with ministers, no invites to even a local Tory wine and cheese, let alone Chequers. Constant public reminders of what they're doing. No need to do a China (vis a vis Japan) and invite people to smash up their branches, just reiterate that they are not good corporate citizens - that, in short, they are Bad People. Most people want to be liked.

I'm not sure either party is capable of doing this, but you never know. Government has a lot of clout - if it wants to use it.

Last - I know it was originally published in 2010, but this was the strip on a colleagues Dilbert calendar on Wednesday.



        

"I'm not in favour of tax avoidance ..."

Labour leader Ed Miliband said: "I'm not in favour of tax avoidance obviously, but I don't think it is for politicians to lecture people about morality.
"I think what the politicians need to do is - if the wrong thing is happening - change the law to prevent that tax avoidance happening."

Er ... could that be this Ed Miliband?

"David Miliband, the schools minister, and his brother Ed, the chancellor’s economic adviser, are set to avoid paying thousands of pounds in tax through an Inland Revenue loophole which the Labour party pledged to close. "


The Sunday Times has learnt that after Ralph Miliband, the Marxist father of David and Ed, died in 1994, he transferred almost all his assets, including homes in London and Oxfordshire, to his wife.


However, after taking professional advice, the family is understood to have posthumously rewritten his will to give 20% of the London home to both David and Ed.

This scheme is called a “deed of variation” and was highlighted by the chancellor in opposition as an unacceptable way in which the wealthy avoid paying death duties."

Anything Going On In NY ?

My son reports that (a/c/t Twitter) there are protests outside the New York Stock Exchange which are not being reported in mainstream media.

Any truth in this?

UPDATE - well, Businessweek seems pretty mainstream to me. Maybe Twitter is just ahead of the MSM - as you'd expect real-time media to be.

Dubbed “#OccupyWallStreet,” the goal of the protest is to get President Barack Obama to establish a commission to end “the influence money has over our representatives in Washington,” according to the website of Adbusters, a group promoting the demonstration. Organizers want participants to “occupy” the area for “a few months,” according to the website.

“People have a right to protest, and if they want to protest, we’ll be happy to make sure they have locations to do it,” New York City Mayor Michael Bloomberg said Sept. 15 at a press conference. “As long as they do it where other people’s rights are respected, this is the place where people can speak their minds, and that’s what makes New York, New York.”

As the demonstration began this afternoon, as many as 1,000 people congregated in the Chase Manhattan Plaza area and, after speakers with a bullhorn rallied the crowd, broke into groups to discuss the event’s goals. Some participants circulated trays of sliced white and wheat bread while others passed out jars of creamy Skippy peanut butter, and distributed apples, bananas and oranges from shopping carts.

Protesters waved red flags and toted cardboard signs with statements such as “represent the 99%.” Others donned white, mustachioed masks of the anti-authoritarian protagonist from the graphic novel and film “V for Vendetta.”

Sounds pretty much like the usual suspects to me - in the UK there'd probably be more drummers and fewer ukeleles. But I'm not saying they're wrong to protest - a stopped clock is right twice a day.

Money From (potential) Misery

As the Walkman generation was succeeded by the mp3 and Ipod generations, and an increasing number of us walked around with plugs in our lugs, I became convinced that we were likely to see and increasing number of not-terribly-elderly with hearing difficulties. Young people just don't like turning it down.

At that point it also became apparent that hearing-aid manufacturers were likely to benefit. But who makes hearing aids ?

This blog gives some investment suggestions. I know nowt about the blog or the companies they suggest (except Siemens), so caveat emptor.



(inspired by this Clive Davis post)