I am Hektor Reborn

The Obsession with Statistics

2010-07-02T14:09:00.000+01:00

What is it? I had a drink with an ex-colleague the other evening. He's an intelligent guy, now doing a PhD in Stochastic Mathematics and has been offered a scholarship (20k pa) to change to Economics, but he said he was upset that Gordon Brown had been voted out. Why? Because he was doing the right thing by the economy as in exactly what was correct by Macroeconomic dogma. OK, let's backtrack a bit here.

The size of the economy is measured by Gross Domestic Product, GDP. This is simply a measure of the output of a country. It is the total of consumption, investments (gross), exports-imports and Government Spending (this will be important later).

We are told that it is good when the GDP goes up and you continually hear about the economy growing by this or shrinking by that. This is a very coarse measure of how rich we are. If you divide the GDP by the number of people you have a vague idea of how rich we are. So, in theory, when GDP goes up we all get richer.

Back to statistics, a recession is defined as two consecutive quarters of negative growth [in GDP]. One way of stopping a recession is to export more, or you could consume or invest more. Or the Government could spend more (remember that one). So, the Government, by spending more, increases a country's GDP. Which is then used to define whether a country is in recession or not. Cutting Government spending will reduce GDP and may throw you back into recession. But this is only a technical economist's definition of recession. To most people, lower taxes, better services, more money in their pockets is a good thing. But not for those in Government.

Another misconception to note about GDP is that so long as it is going up faster than your rate of interest, you do not need to pay it back: you can keep paying the interest and taking out more debts to pay back the old ones. Think of taking out a loan. If your salary goes up 5% per year and you only pay 3% per year on the loan, you will always be up by 2%, so you could even take out 2% more debt and still pay the interest. Therefore, just so long as GDP keeps going up, the Government can keep borrowing without worrying about paying back the debt (assuming tax take is a constant share of GDP).

So, next time someone talks about a double dip recession, think about what it really means. Given that Goverment spending is around 50% of GDP, is it really a problem with the country's industries and services, or a problem with the Government?

U.K. May ask RBS, Lloyds, etc to Subsidise ID Cards

2010-03-17T14:45:00.002Z

What?! An article from Bloomberg saying that Lloyds, RBS and others will be asked to subsidise the ID cards programme. My favourite part:

Hillier said. “Some of the banks are, of course, owned by the taxpayer.”

Who didn't see this coming?

Fairness for All

2010-03-10T13:51:00.003Z

I'm positive that the Labour Party will achieve a Fair Future for All for everyone in Britain. By the time they are finished with the country, everyone will be earning exactly the same and public services will be the identical for everyone, regardless of where they are or who they are: the only people left will be earning £64.30 per week and there will be no public services, because there will be no tax income to pay for any of it. Bunch of genii.

How can we beat them?

2009-08-28T14:16:00.002+01:00

Last night my car was clamped by the kind people of The Royal Borough of Kensington and Chelsea. I had to pay the PCN (£60) and a clamp release fee (£70) at the same time. I wasn't on a double red line. I wasn't even on a yellow line. I had mistakenly parked in a residents' parking bay. Clamped for that. Two weeks' income for that. FUCKING CUNTS!

But what to do? Take it to court and face huge costs. Yeah, it'll slow down the system, but they don't care, they get paid either way. Hack the clamp off? They have a record of the car and where it was parked and it is an offence to tamper with the clamp. Appeal that it is an unreasonable fine? As if! It's the perfect stitch up. And for what? Revenue for RBK&C? To help residents park near their houses? There aren't any houses where I parked. Around the corner there is a square covered in houses that has free parking after 6.30pm, which is where I normally park. This is an empty road and parking goes until 10pm. Do they switch the times around just to catch people off guard? I wouldn't be surprised.

Community, Society, Economy

2009-08-16T14:16:00.005+01:00

Which do we live in? Is each a part of the other? The news is full of stories of the British Economy doing this or that. To me this is just a measure of Britain. If the economy shrinks, but we feel closer to each other is that a bad thing? We can measure the economy, but we can't measure cohesion, or happiness, etc. The government clearly just wants us to be richer, thinking that if we are richer we will be happier, and probably therefore, more docile. After all, if you have nothing then you have nothing to lose!

But how should we describe Britain. Is it a constitutional monarchy? A democracy? An elected dictatorship? Or a society? Society comes from the latin socius, meaning companion, which further comes from the latin meaning someone who you eat your bread with (this is also where the word company comes from: a group of people who eat together). Anyone living in London will recognise that we do not live in a society. There seem to be no common goals. Everyone sitting on the tube does their best to avoid eye contact with each other.

How many people know who their neighbours are? Or the people who live in the same building as them? This is not a society, this is everyone out there for themselves. If you buy a shoddy loaf of bread from your local baker you can tell him. If you buy one from Tesco, you have to wait in line to speak to a manager at the customer service desk and he might be able to help. But if the people who are meant to be helping you or representing you mess something up they are not accountable because they are probably up in Newcastle (apparently half of the city are employed by the State in some way). There is a breakdown of accountability and basic human respect.

I, for one, am getting fed up of living in an economy. Everyone is competing against each other for everything. We have posters telling us to give up our seats on the bus instead of knowing that we should do it automatically. Pubs are no longer a centre of community, they are telling staff to recommend the foods or drinks with the largest gross profit to customers. This is not the behaviour that I would want my regular customers to know about. I would never go to a business again if I found out that I trusted them to recommend something good and they recommended the most profitable thing to me. I am a human being, not just someone with a bit of money! You may just be doing your job, but I think that is what some German fellows said in 1946 and it was not a defence then! Get some morals or some standards. Money is of itself not useful. What it can buy you is useful, but if you don't know what you want, then it can't help you.

Why do State employees pay tax?

2009-07-30T15:46:00.002+01:00

Here is a good discussion. I guess it would mean too many tax collectors, accountants and paymasters being out of a job. After all, you are just giving them money and then taking it back again, only to give them some of it back again! Efficiency has never been the State's thing though.

One Nation Under CCTV

2009-07-26T11:53:00.005+01:00

This, from the BBC, about how many CCTV cameras there are in this country. What are they all for? They can't be for identifying people. I once had to watch CCTV footage of two of my friends having sex in a back room at a party to identify them. I couldn't. The resolution was too grainy and the video wasn't continuous (and no I didn't keep a copy). I knew these people!

Quis custodiet ipsos custodes? Who are the guards and what are they watching for? The justice system seems to have got along fine without CCTV for hundreds of years, so why does is it suddenly needed now? Mobile CCTV police vans, police filming people at protests and council traffic enforcement CCTV cars. I can understand businesses wanting them as a deterrent or to catch people who nick their stuff. A parallel would be having a policeman on every street corner. Yeah, you might feel a little safer, but you would also feel pretty scared if the police started interfering in your life. "Papieren, bitte".

What is going on? Can't we just be left to walk down the street any more? Don't our elected representatives trust us? Do we need a quarter of the world's CCTV?

Work for the State if you want to keep your job....

2009-07-19T16:24:00.007+01:00

On my Yahoo! homepage, an article about the ten safest jobs in a recession. They're pretty much all linked to the state.

"For example, an IT specialist is likely to have better job security working for the NHS than in a bank."

Of course, because the NHS can't help but piss money all over the wall, the ceiling, etc.... There is no mention of the forces in the article, but there is always the risk of dying. Friends in the Army or the Royal Marines are fine, knowing that not only are they not going to lose their jobs, but they are also going to get a raise. I think this is best illustrated by a couple of friends from university who just got married and they aren't at all stressed about the recession. They are a policeman and a doctor. No chance of them being laid off!

The Benefits Trap. A First Hand Experience

2009-07-09T23:06:00.002+01:00

When you lose your job or you get sick, the State steps in to look after you. That's a good thing, right? Well, it is until you get hooked on it. Like painkillers, it helps to begin with but you can become increasingly dependent on them and find that you can't get off them. Having read The Welfare State We're in, which details how the benefit culture may have contributed to a breakdown in British society, I know that the trap is now sprung and I am on the verge of becoming stuck.

I am not sick, but I did lose my job in November. I got a reasonably generous redundancy package that was not enough to live on but with savings it was too large to qualify for benefits. That was fine. I would rather make my own way in the world than rely on the State's handouts. All well and good, but life goes on. I had a flat that I had to pay rent on. Food to eat. People to see and some fun to have. Not having a job but having some money has the upsides of being a student and having a job: both Time and Money at the same time.

I wasn't being stupid though. I had enough money coming in from doing odd jobs to keep afloat and I wanted to save most of the money to offset various debts (student loan, etc). However, with interest rates crashing down this seemed less and less viable. What is the point in having a full ISA if you get £8 a month?! Additionally, oddjobs dried up, so my bank balance began to creep down to the point where my savings no longer close to offseting my debts. At this point I decided to empty my savings and pay off as much of my debt as possible.

The reason for this is simple. If you have any savings then you get less dole money. But this doesn't take debts into account. If I wanted to get my Jobseeker's Allowance (JSA) then that is what I had to do. It was painful getting rid of everything that I had saved up and leaving myself with no financial cushion or room for manœuvre if something went wrong but it had to be done. So I called up the Department of Work and Pensions (0800 055 6688) and spent 45 minutes telling them all the tedious details that they need. They seemed more concerned with finding out which disability I might have had than actually processing my claim. It was almost as if they wanted to register me as disabled so that I didn't count as unemployed.

I went to the JobCentre Plus in Hammersmith the next day for an interview only to find that they had put me down for contributions based rather than both contribution and income based JSA. The difference essentially being that if you haven't paid enough NI then you can't get contributions based and income based is limited to about £64 per week, the level that the State thinks is the minimum you can live on. Sky dishes on council blocks anyone? That's another story....

As this was my first job since university and having been working in Zug, Switzerland my NI contributions were not enough and additionally I had to fill in a form explaining why I hadn't been working in the UK (more money, less taxes & better services just about sums it up). Obviously I was seen as Patriotic enough and passed that test. I even managed to make it through the interview with an incredibly patronising fat woman. She didn't seem interested in what I had done or was good at, but wanted to tell me exactly what I should be doing (reading the Guardian twice a week) and she didn't ask for a copy of my CV. Why would she? She probably knows exactly what kind of job is right for me just by looking at me.

So, I got my money each week, but not before agreeing to certain conditions, the Jobseeker's Agreement. This sets out that I will be looking and available for employment, make suitable efforts to find work, etc. I record everything I do in a little book but must make sure I complete three jobseeking steps per week. An example of this would be to phone the local baker to see if he has any work. So not exactly strenuous. I filled up the book and went onto another sheet of paper in my first two weeks and from listening to the other people, it is clear that you don't actually have to do anything for them to give you the ok. Indeed you could make it all up.

There are two conditions that are important. One is that you can't work for more than 16 hours in a week and the other is that you earn money you will get your benefit + and extra £5 - the amount you earnt. So if you earn £20 in the week you will get £64+£5-£20=£69. There is a small incentive to work if you are going to get less than your benefit amount, but not much. And if you are going to earn just more than £69 in a week, then you are going to have to do a lot of work for it when you could do nothing and get your money anyway. Also, you can't do more than 16 hours unpaid work. The reason: you won't have enough time to conduct your job search properly. Seriously, that is taking the piss. Weekends? Evenings? They can't actually want anybody to be looking for work.

And now, the best part. Hammersmith & Fulham is my council. They have an eight year waiting list for council housing, but those on JSA can claim housing benefits. I would be eligible for around £150 per week renting a private flat and £15 per week council tax benefit. All of this is income dependent so if you are earning money you get less benefit. So let's add this up. £64 JSA + £150 Housing Benefit + £15 Council Tax Benefit = £229 per week. Let's call it £230 for simplicity. That works out at £11,960 per year. Not a bad wage (starting salary as a squaddie is around £15,000) for doing 5 minutes work per week.

So, how much would you have to earn to take home £11,960 after paying council tax at £15 per week? About £15,675 by my calculations. The State has decided that there is an income that people need to survive but they still tax you if you earn that much. How does that make sense?

So you have a choice when offered a job worth around £15,500 or less: take it, work hard, earn your own money or do nothing and get the same amount of money. What if you are offered a job for £16,000? You would be better off by £6.63 per week, not £9.61, due to tax. That's not a lot of money for a lot more work. £17,000 makes you £19.90 better off per week instead of £28.85 because of tax.

The State seemingly doesn't want people at the job centre to get jobs (or it would be making them do a lot more), and even if they are offered a job, unless they are offered a good wage (average in the UK is about £25,000) there is little incentive to take it.

If I decide to move into a flat on housing benefit, I will have a large incentive not to take a job unless it comes with a good. So, no bar jobs, no part time waiter work, etc. It just doesn't pay. The same goes for the other 2.38 million people.

Update: This has also been posted by Old Holborn and Mark Wadsworth!