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Recently I’ve been suffering from shingles, hence my silence here in recent weeks. Shingles has been no fun, but it would have been even less fun had it not been for Indian Premier League cricket on the television to take my mind off my discomforts. For the last forty and more days, there’s been at least one twenty-overs-each-way slogfest every day, and often, as yesterday, two. The last Brian Micklethwait posting here, written originally for here but then featured here (which cheered me up a bit just when I most needed that – thank you JP), was about the IPL, and about one of the things I most like about the IPL, namely the fact that it involves lots of Indians getting rich and being happy.
I know what people mean when they claim that IPL-type cricket – slam bang, slog slog, all over in three and a half hours – is very unsubtle compared to proper day-after-day first class and test match cricket. I know what they mean when they say it’s not real cricket. But for me it’s real enough, and I like it, just as I like pop music and classical music. I also like very much that ITV4’s IPL coverage is free. I have never subscribed to Sky Sports, because that would mean wasting forty quid a month on a very few sporting events that I care about (mostly test match cricket in my case), and then, even worse, being tempted to waste the rest of my life watching a lot of other sporting nonsense, just so as not to waste all that money. If only I could spend a tenner a month and get all the best cricket, but nothing else.
But there is still a price to be paid for IPL watching, in the form of adverts between overs, advertising logos all over the players’ shirts, and constant commercial self-interruptions by the numerous, obviously very well paid and hence thoroughly compliant commentators. Nothing exciting ever happens in IPL without it being described as a “City moment of success”, whoever or whatever “City” (“Citi”?) might be. All catches are described as being “carbon” Kemaal (sp?). Actually it’s Karbonn – a mobile phone enterprise, I think. And there is a big blimp that hovers above the grounds with “MRF” on it, which is something to do with a fast bowling scheme paid for by a rubber company, that the commentators talk about incessantly for no reason except that they have been commanded to. But I don’t care. For me this is all part of the Indians making money angle. And if all the Karbonn City Moment of Success DLF Maximum (a six) Maxx Mobile Time Out (a bigger than usual advertising break) crap gets too annoying, then I wait an hour or two and instead watch my recording of it all, fast forwarding through all the commerce. Which is also a way to waste less of my life. This didn’t matter when I was ill. Wasting my life watching cricket games all day long was all I was capable of, other than sleeping and being depressed. But now, as I improve, that’s an important consideration. → Continue reading: IPL and the changing culture of cricket
One of the interesting exhibits in the pantheon of attempted explanations for the current financial crisis is the Kingdom of Spain. Spain had a massive real estate driven asset bubble, which has since collapsed. There is high unemployment, horrible public sector budget deficits, and lots of abandoned, half built housing projects around the coast. (In January, I struck up a conversation with some Australian engineers at the next table in a restaurant at lunchtime in the business district of Hanoi. Upon asking them how business was, they told me that there are lots of construction projects going on, but they were being undercut on price by Spanish and Italian companies. When domestic demand collapses, you look elsewhere).
And yet, Spain has not had a financial crisis. Spain’s banks are generally solvent and in good shape. One explanation of this is that financial crises in other economies are more a symptom of the economic crisis rather than its cause. Asset bubbles end badly. Government overspending has consequences.
One of Spain’s banks, Grupo Santander, has been expanding steadily throughout the world for a little over a decade. Unlike certain other banks of an expansionary nature (Royal Bank of Scotland, cough), Santander did not combine the acquisition of foreign banks with stupid lending, and so when the global banking sector fell in a heap a couple of years ago, Santander did what sound companies often do, and went looking for cheap assets. These included the small UK bank Alliance and Leicester, and the branch network and savings business of Bradford and Bingley (after its toxic assets had been nationalised by the UK government). Santander was an attractive buyer from the perspective of the UK government, as its expansionary frame of mind meant that it was unlikely to close branches and shed lots of employees.
My general inclination here is to compliment the management on running a good business. However, there is something disturbing, just the same. I have felt this for a while. Spanish financial institutions (and in truth Spanish organisations of all kinds) have a thing for building office complexes in the suburbs of Madrid that look like something out of a James Bond movie. It would be mean to say something about lingering residues of fascism here, so I will not do this.
However, the new headquarters (er, sorry, I mean the Ciudad Grupo Santander) shown in the above video really does appear to be a doosey. Professor Parkinson would no doubt have something to say here, but I feel oddly positive. However much I sometimes think that people who make corporate videos of this kind are best when placed on the B-Ark, being driven around by bright red Spanish banko-robots is certainly going to make marketing visits to foreign financial institutions a lot more fun. (Do they bring in Lewis Hamilton to race them on AGM day? Jokes about “augmented reality” in banking could go on and on, too).
It’s a shame that they have to build this sort of thing in Madrid, though. Building it (perhaps on an artificial island?) next to the private zoo in King Alfonso XIII’s weird coastal folly in the actual Ciudad (non-Grupo) Santander would be fitting, in some unexplainable way.
Link via Bruce Sterling.
This headline caught my eye:
Alan Greenspan to Testify on Subprime Lending, Securitization, and GSEs, Wednesday, April 7
Shame he was not grilled a bit more about the Fed’s free-money policy that fuelled much of the credit crisis back in the days leading up to the housing bubble. Goodness knows what his old mentor would have made of this charade.
One of the tedious features of that TV phenomenon, the celeb chef, is how so many of them go on and on about the wonderfulness of buying local ingredients, implying that those evil, globalised behemoths – supermarkets – grind the faces of farmers, sell insipid products to the masses, etc. Like the US blogger Timothy Sandefur, I tend to take a dim view of those who turn up their noses as the many benefits of trade and the division of labour. And Mr S. has spotted this rather grimly satisfying story.
As I have said before, people who refer to such things as “food security” or the supposed joys of self sufficiency can sometimes overlook the fact that Man’s best insurance policy against shortages is a global division of labour when it comes to producing food.
“So you live beyond your means and rack up a bunch of bills you can’t cover. So you go to your rich uncle. He’s tapped out, alas. And tired of supporting you. So he goes to his rich uncle who’s even richer and known for his desire to keep the family name unsullied. But what if he’s tapped out? Those are my thoughts when I read this story that Sarkozy is supporting Merkel in getting the IMF to bail out the Greeks. The IMF is the richer uncle. Eventually the other guy runs out of money. We’re going to have to start borrowing from Mars or Venus soon.”
– Russ Roberts, at the Cafe Hayek blog.
Lord Stern would have us believe that ‘arrogance’ undid the recent attempted power grab known as the Copenhagen Conference.
Strangely the public unravelling of the entire political and cultural narrative of global warming does not so much as get a mention in passing, as if ‘Climategate’ can be wished out of existence and with a Triumph of the Will, time itself can be rolled back to pre-hack days.
I really, really hope that Nick Clegg, leader of the UK Liberal Democrats, does not hold the balance of power at the next General Election, if this Spectator article, “Can Nick Clegg Sing the Blues?”, is a guide (the article is behind the Speccie’s subscription firewall).
Mr Clegg, the article says, is trying to reach out to supposed Conservative voters by arguing for tax cuts. But as is clear, the cuts are only for low-earners and not for anyone else (I certainly do support tax cuts for the poor, in case anyone brings this up). He wants, for example, to impose a so-called “mansion tax” on properties worth £2 million or more and wants to raise the level of capital gains tax from its current 18 per cent to 50 per cent – a huge jump – on those whose annual income is £150,000 or more. In other words, CGT will skyrocket for the sort of entrepreneur who can, or hope, to make a decent capital gain on a business that has been launched. As the supply-side school of economists likes to point out, once depreciation for wear and tear and inflation is taken into account, a 50 per cent CGT rate can in fact be more like 70 per cent, largely nullifying the gain and likely to hammer entrepreneurial activity. Given that top earners are already due soon to be paying 50 per cent income tax, not to mention other tax hikes, the process will drive yet more folk abroad and deter wealth creators from coming into the UK. The likely upshot of this will be a less active stock market – which will hit pension fund investments – hardly a great idea from the LibDems’ point of view – and likely as not, erode, rather than acquire, more revenues.
There is also a quote, on page 14 of the magazine, that also proves to me that Mr Clegg is a numbskull: “The Tory inheritance tax cut, he said, would help people who don’t actually spend their money, they just squirrel it away'”. In other words, if you have wealth, either from your own efforts or from inheritance, and save it – you are a parasite, a dead weight. Mr Clegg clearly thinks that saving is bad, that “hoarding” of money in a bank account, or whatever, is a terrible thing, and that we should all be spending our money like mad down the High Street. Maybe he thinks it would be better if trustafarians were all down the dog track or the casino rather than sitting on a portfolio.
It is almost hard to summon breath to point out that it is precisely the high level of consumer spending, funded by debt rather than by real savings, that in part explains much of the current economic mess. We need to encourage, not discourage, savings. And given that as folk get richer, they typically invest and “hoard” a relatively high percentage of wealth, it is folly to hit them since they are a key source of capital for future investment. Folk on low incomes, by contrast, have low savings for the rather obvious reason, of course, that they struggle to make ends meet with what little income they have.
In fact, if the Tories have any sense – not much unfortunately – they should boldly confront the insane, Keynesianism-on-drugs mindset that says that spending is always a good thing and that savers are all rich, selfish bastards who should be taxed. Many years ago, FA Hayek likened this form of economic thinking to quackery. As usual, the great Austrian economist was being far too polite.
Personally, I’d like to see some Congressmen forced to testify before a panel of car dealers, about the budget deficit’s Sudden Acceleration Problem.
– Instapundit reflects on the travails of Toyota.
Last night I listened to this podcast, in which Patrick Crozier interviews our own Michael Jennings, globetrotter extraordinaire, about how the English Premier League (i.e. soccer) is followed with a passion in faraway countries of which most English people know very little, and of which many English soccer fans would be rather scornful, if they gave them any thought.
Points made (recycling (and expanding upon) Patrick’s blog posting on it): that the Premier League is a big deal in Asia (and Africa); that it’s really big; how it got that big; why the 39th game is going to happen (because so many English clubs are strapped for cash); and how it might be done fairly (not hard to contrive if they really want it).
I enjoyed it very much. Did you know that there are firms in Vietnam which reach potential Vietnamese customers by putting signs up at English football grounds? Me neither.
Over at Devil’s Kitchen, the blogger uses justifiably salty prose to describe what he thinks of Nick Clegg, the leader of the Liberal Democrat Party, after Mr Clegg gave various proposals for taxing City bankers and the like, including such brilliant ideas as raising the rate of capital gains tax to 50 per cent on top earners, in line with the new, 50 per cent income tax rate due to kick in at the start of April. Clegg gave an interview to the daily freesheet, CityAm.
Clegg, let us not forget, could be in a position to be an important power-broker if the outcome of the next UK general election produces a hung parliament in which no one single party has an overall majority. Given that both the Tories and of course Labour have shown no reluctance to pander shamelessly to anti-banker, anti-capitalist sentiment, it is likely that if any of these parties gets into bed with the LibDems (a truly gruesome thought, Ed), that such “bash-the rich” crapola will get worse. So we can expect the exodus of wealthy people from this country to continue if this sort of zero-sum economics nonsense holds sway.
Under trade descriptions legislation, the LibDems’ own brandname would be declared as false advertising. Liberal they are certainly not.
Eric Raymond has a thoughtful and compassionate article at his blog about two people he knows who are down on their luck in the US economy. They are not uneducated bums, or lacking in motivation. But they are examples, he says, of how the rising costs of hiring and firing people has, when coupled to other factors, meant that many people will not enjoy the benefits of any subsequent economic recovery. Money quote:
“I now think the increasingly jobless recoveries from the last couple of downturns were leading indicators. The end of the post-New-Deal fantasy that we could increase the friction costs of capitalism without limit, regulating and redistributing our way to prosperity, is hurtling towards us like a dark sun. A and B are two of the luckless bastards who are spiraling down its gravity well. Multiply them by ten million to see what it’s like when the contradictions of socialism on the installment plan come home to roost.”
I tend to associate labour market rigidities with Western Europe – where high levels of unemployment have persisted alongside relatively high GDP growth (that’s assuming you believe government GDP figures, Ed). It is tragic that the same process is at work in the US, at least if Mr Raymond’s article is indicative of a broader trend.
“Here the most fundamental relevant principle is the one discovered by Bastiat: economic value lies in service; an economic exchange is an exchange of services, each valued more highly by its beneficiary than the alternative situation in which the service is not performed. We are accustomed to talking about “goods and services”, of course. But the distinction, while perfectly all right in its place, does not reflect anything fundamental – rather, it obscures what is fundamental. When A buys some object, x, from B, what he gets from B is the right to use x. That is what it is to “have” x, in normative terms.”
Jan Narveson. His essay – which touches on an old bugbear of mine (!) – nicely slices through the fallacies that people engage in when they disparage services as opposed to manufacturing or other, more supposedly “real” kinds of wealth, as happened on the thread in this article.
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Who Are We? The Samizdata people are a bunch of sinister and heavily armed globalist illuminati who seek to infect the entire world with the values of personal liberty and several property. Amongst our many crimes is a sense of humour and the intermittent use of British spelling.
We are also a varied group made up of social individualists, classical liberals, whigs, libertarians, extropians, futurists, ‘Porcupines’, Karl Popper fetishists, recovering neo-conservatives, crazed Ayn Rand worshipers, over-caffeinated Virginia Postrel devotees, witty Frédéric Bastiat wannabes, cypherpunks, minarchists, kritarchists and wild-eyed anarcho-capitalists from Britain, North America, Australia and Europe.
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