David Carr is happy, because now not only is he sunk in gloom but he reckons all of us are, and especially me, Samizdata’s Optimism Correspondent. Bad news David, I’m happy now.
I have a number of reasons to be happy, but I’ll focus on just one. Britain’s Chancellor of the Exchequer Gordon Brown has been taxing the British economy at a higher rate, but, to his surprise and consternation, the extra tax revenue that he assumed he would get by putting the rates up has not proved to be forthcoming. In the House of Commons yesterday, he had to explain. He blamed the world economy. (Don’t they all?)
Well guess what. I told you so, on Tuesday May 28th. This makes me happy.
What this confirms …
(I was referring to a piece by Paul Staines)
… is that British government income is now as high as it can be. Increasing the percentage rate of taxation doesn’t increase government tax income, it merely slows the economy down and causes government income to remain static. Similarly, if the government were to reduce the percentage rate of tax, government income wouldn’t decrease. This would merely cause the economy to surge forward, and the smaller slice of a bigger cake would end up being the same size as the bigger slices of smaller cakes. Britain is now at the top of the Laffer Curve. Isn’t that exciting? In plain English, the bastards are taking us for the absolute maximum amount they can, and if they get any greedier we stop coming through their bit of the forest.
Gordon Brown’s response to his problem is that he has decided to take the government a lot deeper into debt than he originally had in mind to do, which is a further – albeit disguised – increase in the rate of taxation. If the government borrows the kind of money it now intends to borrow, it will raise the interest rates that all other borrowers have to pay.
So let me leave all my winnings from my previous bet on the table and give this prophecy game another whirl of the wheel. Brown’s latest decision will slow the economy down some more, and he still won’t get his hands on enough money to finance his spending spree. These plans can never materialise, and that fact will have to be recognised if Britain is not to be pushed down the far side of the Laffer Curve towards economic meltdown.
What this all shows is that, as usual, there are, in the words of Noel Coward, bad times just around the corner. What it also shows is that enjoying life is all about attitude. It’s not the facts that make you happy or unhappy; what counts is how you look at them and what you make of them.
Brian,
Yes, I do realise that the government is about to f*ck up the economy again and I do realise that we on the verge of a return to the 70’s.
Does that make me happy? Well, I’m somewhat pleased that the sheen of competence is going to be brushed off of NuLabour, but I am aggravated and frustrated that we have been down this dead-end road before, in recent living memory, and yet the public never seems to learn.
Okay, this lot will eventually be tossed out and we’ll get some reforms but what’s the betting that, a few years after that, the public will vote socialism back in again?
If the lesson wasn’t learned last time, what makes you think it is going to be learned this time?
Maybe it would be a good idea for Britain to join the EURO zone, so that she will have some fiscal responsibility imposed on her ?
David, you’re missing my point. You’re being political. I’m being personal. Of course, if you base your personal happiness on matters political, over which you have no personal control whatever, you’ll be struck down by the glooms.
I’m happy because I personally have said something that turned out to be true. Hurrah!! And now I’m giving it another go. If that turns out to be true also, then hurrah again. I’m not predicting, or even hoping very strongly, that “the lessons will be learned” about this national crisis, or about any other for that matter. Maybe they will, maybe they won’t. My point is, this particular sort of crisis is now approaching. If I’m right, expect another gleeful I-told-you- so posting. I can’t control what the idiot politicians do. I can control what I write about them, and when I get it right, that makes me happy.
Be happy by focussing on what you can do and can control. Be miserable by focussing on what you can’t do and can’t control.
When I am really really old, I intend to become an ancient Chinese philosopher.
Jacob: I didn’t realise what a great sense of humour you have!
David,
Last time round they tried nationalisation, but that hasn’t worked. This time round they’re trying regulation.
The socialists only have so many strategies to expand the state and the electorate will be less and less inclined to trust them as they run out of ways to tax and spend without losing an election.
In the long run, state socialism is dead.
I have long since stopped allowing myself to get depressed by the turn of public affairs, though I still do get angry and think that anger is often a healthy thing if it motivates me to write, campaign and lend my humble voice to the voices of sanity. And there are good things still happening in the world, especially in the area of technology and science.
I must say that in the current context of diminishing liberties at home, terrorism around the world and England being massacred at cricket, I have been fantasising a lot about emigrating to a deep-space colony a la Robert Heinlein. Or maybe this is a sign in my case of regression into childishness.
Yes the government is taxing and regulating us as much as it can and I also feel some pleasure (having predicted that would act this way) – but I would have felt more pleasure if they had NOT acted this way.
If only the people who argued that the Labour party was a “new” force that no longer supported statism had been correct! I thought such people were talking nonsense – but it would be a better world if they had been right.
Certainly the economy will start to collapse (manufacturing industry has been falling apart for years – now the rest of economic life will follow it) – but will statism get the blame for the collapse?
The media and academia will continue to say this is a “right wing” government and that its obsession with the free market is what is destroying the country.
It is rather like the military (in American or here) – if P.C. absurdities get the blame for failure that is one thing (but it is just as likely that failure will be blamed on traditionalism – “we must make the institutions more progressive”).
With the economy and statism it is up to us. We must do what we can (with the very limited resources that we have) to explain to people that this is a statist government and the problems of the economy are due to statism.
Before you all get too excited, might I remind you of how high interest rates, not to mention borrowing, got under the last Conservative Government? This post is a good case of the times Samizdata roams from its excellent self becomes one more anti-Labour, pro-Tory site. I shall never forget entering Victoria Station in 1992 and reading billboards to the effect that interest rates were up to 15%. It took Major 3 years to get there; Brown’s had 5 and still has 10% to go. Under Major, Oxford Street was a long row of auction houses flogging bankrupt goods, remember: Samizdata is supposed to be above whichever party is in power, which is why I love it. Some of its contributors are not – no matter how happy they may be.
James:
I don’t know if you’ll get to read this reply to you. Hope so.
No need to remind me of the disasters of the early 90s. Like you I remember it all only too well. Just because I didn’t mention it in this posting doesn’t mean I’ve forgotten it. I sort of took it as known by everybody.
As for supporting the Tories … well, do you think that the Libertarian Alliance (me, Editorial Director for the last two decades) has been especially pro-Tory?
Anti-Labour yes. Pro-Tory no. For those same two decades I have been telling “libertarians” engaged in trying to take over the Conservative Party that they are wasting their time. Conservatives are not libertarians.
Paul Staines is a tax evader who is about to be taken down by the Inland Revenue. They know now about the phoney return he put in. He owes the British Government over 800,000 GBP.
So anything you quote from him will obviously have to come with a caveat.
Ask him yourself….