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Diary
By TheophileEscargot (Fri Mar 22, 2013 at 03:03:00 PM EST) Reading, Watching, Economics, Links (all tags)
Reading: "Sharps", "Redshirts", "The Day Parliament Burned Down". Watching: "Side Effects". Economics: Austerity and the Laffer Curve. Links.


What I'm Reading
Sharps by K.J. Parker. This is the latest gritty, no-magic, no-mystic-beasts fantasy novel from this author, set in the same world as "The Hammer". Loosely inspired by the "Ping Pong Diplomacy" of the Cold War, this one has a fencing team assembled and sent on a peace tour through a neighbouring nation where fencing is the national sport.

To their shock they find first that fencing there is done not with harmless foils but with "sharps", and then that they are at the mercy of shadowy political forces seeking to exploit the tour in various ways.

I really liked this book. It had a tense atmosphere, interesting characters, a good setting, realistically complicated politics, and a good elaborate plot.

Well worth reading. Despite the shared setting it's a standalone novel, would be fine to plunge right in to this one.

What I'm Reading 2
Finished Redshirts by John Scalzi. It's a fan-friendly science fiction comedy that's got a lot of attention for its gimmicks. In a futuristic spaceship that's almost exactly like the Starship Enterprise, the redshirted ensigns notice that they're very likely to be killed on away missions, and start frantically maneuvering to avoid them.

Starts out very well, with some nice pastiche of the style and dialogue, and some good observation of the dafter conventions. It's an easy read and I finished it in a day.

However, in the second half of the book as things got a bit more explained, I found myself losing the suspension of disbelief. I think it was a bad move to start taking the grief at certain deaths seriously: this kind of thing either needs to be played for laughs, or to be realistic: you can't do both.

Also in nerd terms there were a couple of minor inconsistencies. In the original Star Trek, ensigns obviously 'took reports to the bridge' because email hadn't been invented yet, it's not clear why they're doing this in a 2012 series ripping that off.. I was a bit bored by the various epilogues, I think they could easily be skipped.

Overall, a decent pastiche, will keep an SF fan entertained, but not particularly brilliant.

What I'm Reading 3
The Day Parliament Burned Down. History book by Parliamentary achivist Caroline Shenton, about the 1834 fire which destroyed the old Houses of Parliament, clearing the site for the current monstrosity.

Short book with a commendably tight focus. Shenton goes into the details of what happened when, what records were lost, what records were saved, and the people involved; without trying to make it into a Metaphor For or Window Into anything in particular.

Even so, it's full of interesting period details. The fire engines were still private and run by multiple companies in this period. The lack of overall strategy hampered the firefighting, with different crews pumping water wherever they thought was best. Pumping was hard manual work, done in 5-minute shifts for the intensity, so they made sure to carry a plentiful beer supply for refreshment and to incentivise bystanders into helping to pump.P> Disappointingly, the width between opposing benches in Parliament turns out to be nothing to do with preventing sword fights. In the old House of Commons they'd simply taken over an existing chapel. It had an aisle wide enough for a cross-bearer with two escorts, so they stuck with that. The speaker was on the altar dais, so they stuck with that. Spectators watched from the gallery for musicians, so they stuck with that. Deals were made in a lobby before the chamber, so they stuck with that too.

However, the old House of Commons was massively overcrowded by this time, not capable of holding all MPs. Even when crammed in "like herring in a barrel" some perched on the stairs outside. Some MPs voted against their inclinations in certain votes rather than lose their precious places by leaving the chamber.

The fire itself was caused by the burning of old wooden "tallies" used for tax records: pieces of wood notched to indicate amounts, then split along the length so that they could be matched up later. Workmen were too hasty in burning them, but the building was a firetrap anyway due to hasty and over-economical repairs.

One interesting speculation from Shenton is that when and if King Canute legendarily demonstrated that he couldn't hold back the tides, it might have been the tides of the Thames rather than the sea, as that's where he was based.

Overall, an interesting book, though maybe a little specialized.

What I'm Watching
Saw "Side Effects" at the cinema. Good thriller about a woman who takes an experimental antidepressant, and the psychiatrist involved. I liked this, it had a good atmosphere and was effectively put together.

The director Steven Soderbergh claims this is his last movie before retirement. I have to say I'm a bit baffled as to why the critics seem to like him so much. I saw this, Contagion and the Solaris remake, and they all seem like pretty slick professional movies, but none of them was particularly original or blew me away.

Economics: Austerity and the Laffer Curve
This analogy occurred to me after the last austerity argument I was in had petered out. Conservatives often claim not to see the problems with austerity. But they are often familiar with the idea of the Laffer Curve. So maybe we could use the Laffer Curve as an analogy to illustrate the problems of excessive austerity.

Here's how the Laffer curve works. Under normal circumstances, the more a government raises tax rates, the more revenue it gathers. But beyond a certain point, this stops working: people dodge taxes, abandon work, or leave the country so much, that raising tax rates gathers less money. Raising tax rates from 10% to 15% probably gathers more revenue, raising rates from 90% to 95% may actually gather less revenue.

Similarly, under normal circumstances, the more you cut spending, the more you cut the debt. But beyond a certain rate, this stops working: the economy can't adjust fast enough to the shock, growth stalls and tax receipts fall. Cutting spending starts to actually increase the overall debt.

For example, suppose a government scales back the "Five a Day" programme. If it fires 10 people and cancels £5000 worth of leaflets, the economy can easily adjust. Those people can find other jobs quickly, keep buying products, the providers of those products keep investing and paying cash. The printing company that lost the leaflet business can probably survive, can probably print leaflets for other customers instead.

But suppose the government fires 100,000 people and cancels £50 million worth of leaflets. Those people can't all find jobs at once. They stop spending, and the providers of the goods they would have bought pay less tax and start to struggle. The printing company won't be able to instantly find substitutes for such a large order: it may go bust, if not it will have to scale back and downsize. That has further knock-on effects to the paper company, the ink company, the shipping companies that supply the printing company. The economy cannot instantly adjust to a sudden change like this: there's a demand shock. The knock-on effects are that immediate tax receipts fall, growth stalls, and that means that future tax receipts fall too.

So you've cut £50 million in leaflet spending, but you haven't cut the debt by £50 million, because the knock-on effects mean you've lost tax receipts from the shock. If the shock is big enough and sudden enough, you can eventually lose more than £50 million in tax receipts.

One critique of austerity is that we're in or moving towards this zone now. There have been very heavy cuts to departmental spending, but because growth has stalled and tax receipts are disappointing, the deficit isn't falling as much as planned.

Now, some people are saying "the deficit isn't falling much, so we need more austerity". This is an apparently sensible statement under normal circumstances, like "the government isn't getting enough tax revenue, so we need to raise tax rates".

But suppose the government has already been increasing tax rates for three years, and yet revenue isn't rising much: that could mean that we're towards the right-hand side of the Laffer curve, that raising tax rates even more will be counterproductive and maybe we should lower them.

Similarly, suppose a government has already been cutting departmental spending for three years, and yet the debt isn't falling much: that could mean that we're towards the right-hand side of the austerity curve, that deeper cuts will be counterproductive, and maybe we shouldn't cut so much.

Caring about the debt doesn't mean you should automatically always support all spending cuts: go too far and you might actually be increasing the debt rather than reducing it.

Of course, it's not certain that we're in that zone. Under austerity, the UK has reduced its budget deficit from 10.5% in 2009, to 6% in 2012. So, it's not like the deficit is actually rising under austerity.

But if you compare that to the US, which also had a big banking shock, but hasn't implemented an austerity programme, their deficit has fallen from 10.1% in 2009 to 7.0% in 2012, mainly through "natural" growth and recovery. Across Europe, "the more intense the austerity, the larger is the subsequent increase in the debt-to-GDP ratios", as GDP has declined more in high-austerity nations.

So, is the UK actually on the right hand side of the austerity curve? Well, it's hard to say for certain. But it seems pretty clear that we must be approaching it at least.

My guess is that Osborne's austerity plan isn't quite so devastating that it's actually increasing the debt relative to doing nothing. Our deficit is falling at least, though much less that was forecast. But I do think it's reducing the level and standard of public services a lot, while not actually achieving much more in debt terms than just sitting back and doing nothing.

But even if we're not actually on the right-hand side of the austerity curve but just approaching it, it raises questions about how worthwhile the cuts really are. If you look at what's happening to the disabled for instance, maybe it would be justified if it was making a radical difference to the debt problem. But all if it's doing is making a mild difference to the debt problem, was it really worth it? It might be justifed in taking £100 from the disabled if most of that was going on decreasing the debt. But if out of that £100, just £10 is paying off the debt, and the other £90 is just disappearing as lost growth, was the cut really worthwhile?

Links
Socioeconomics. Effects of the Megaupload shutdown on movie sales, via. Historical precedents for bank levies. What if publishers got creative with ebook contracts? Telegraph not long ago: move to Cyprus and dodge taxes. Myth of the welfare scrounger.

Politics. Tom Stoppard, Ministry of Truth on Leveson reforms (Won't affect most bloggers). Adria Richards, PyCon, and How We All Lost. Conservatives should want to tax property fairly. SWP rape accusations: a dangerous environment. Most US women consider themselves feminists, white women less likely. Zero tolerance and Broken Windows:

“Broken Windows has always been a negotiated sense of order in a community, in which you negotiate with residents about what is appropriate behavior in an area,” says Kelling. “If you tell your cops, ‘We are going to go in and practice zero tolerance for all minor crimes,’ you are inviting a mess of trouble.”

Sci/Tech. Personality gender differences Myers-Brigg flawed. Google's Google problem.

Video. Battle of the props. Shipbuilding timelapse.

Articles. Disruptors kill. The Retro Husband (Sarcastic response to the dull The Retro Wife). The Inner Ring.

Random. Star-gazing girls of Georgian England. Plausibility of bunny sledding.

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Nobody thinks about the family of a henchman | 10 comments (10 topical, 0 hidden) | Trackback
Soderbergh by lm (4.00 / 1) #1 Fri Mar 22, 2013 at 05:54:20 PM EST
I don't know that either Solaris or Contagion counts among Soderbergh's best work. His critical success is due more from films like Traffic and Sex, Lies, and Videotape. Commercially, his success comes from Erin Brockovich and Ocean's 11 + sequels.

Interesting bit about Contagion, it was made as a pedagogical device. My wife and I went to a viewing with a discussion afterwards led by a couple of epidemiologists as part of the National Institute of Health's summer film series. It was pretty interesting.


There is no more degenerate kind of state than that in which the richest are supposed to be the best.
Cicero, The Republic
Austerity by jimgon (4.00 / 1) #2 Fri Mar 22, 2013 at 07:11:50 PM EST
The big thing about austerity is that it's something you do when the economy is strong and not weak.  When you already have weakened demand, then removing government demand makes it worse.  If you have strong private demand then cutting government demand is more than offset.  So it's not so much that the austerity is bad, but the timing is bad.  Do it when the economy is stronger. 




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Technician - "We can't even get decent physical health care. Mental health is like witchcraft here."
I like to make an analogy to the Old Testament by lm (4.00 / 1) #3 Fri Mar 22, 2013 at 07:26:39 PM EST
You, know, the Pharaoh and Joseph story. Crank up the taxes in times of plenty so that you've got enough to tide you through times of famine.

There is no more degenerate kind of state than that in which the richest are supposed to be the best.
Cicero, The Republic
[ Parent ]
Old Testament by jimgon (4.00 / 1) #4 Sat Mar 23, 2013 at 06:23:57 AM EST
There's an awful lot of wisdom there.  I guess that happens when you take a couple hundred years of verbal wisdom and write them down as stories.




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Technician - "We can't even get decent physical health care. Mental health is like witchcraft here."
[ Parent ]
Welfare scroungers by Scrymarch (4.00 / 1) #5 Sat Mar 23, 2013 at 10:07:41 AM EST
I dunno, "20% of long term unemployed haven't worked at all" sounds like a Daily Mail headline to me. I suspect the argument is right but I'd look for a better stat.

Iambic Web Certified

The issue might be by Herring (4.00 / 1) #6 Sun Mar 24, 2013 at 03:36:20 PM EST
the definition of "long term".

If, as seems to be the case, very few people are unemployed for longer than a year, then 20% of "very few" is "bugger all". Factor in the percentage of people in the population with mental health problems of who are, to all intents and purpose useless then the number doesn't look so surprising.

I suppose I should read the article now.

christ, we're all old now - StackyMcRacky

[ Parent ]
Ok, you pushed me to skim the report by Scrymarch (4.00 / 1) #7 Sun Mar 24, 2013 at 06:51:48 PM EST
It is a nice piece of empirical civil service analysis, and skimming it doesn't take much more than reading the article, really.

Going by the summaries on page 6, it looks to me like there is a group of very long term unemployed claiming benefits. You could call these "welfare scroungers", or permanently unemployable, or whichever is the preferred term depending on who you are. However the group is quite small - a few thousand per age cohort analysed here. That might number at worst be a few tens of thousands? - in a population of sixty million.

It means the tabloid attention is utterly out of proportion hounding of a small minority, but enough of these people exist that there is plentiful anecdata around that people have an example to confirm the headline when they see it.

Based on a quick skim, anyway. They don't do a direct length of unemployment stint breakout.

Iambic Web Certified

[ Parent ]
Not really surprising by Herring (4.00 / 1) #8 Mon Mar 25, 2013 at 04:34:11 AM EST
The tabloids want their bogeymen.

The big ticket items in the welfare budget are pensions and in-work benefits such as housing benefit and tax credits. The fact that we (taxpayers) have to top-up wages so that people can live is the biggest scandal IMO. This needs to be fixed either by raising wages or reducing the cost of housing - something that's not happening.

christ, we're all old now - StackyMcRacky

[ Parent ]
Can you explain by Scrymarch (4.00 / 1) #9 Mon Mar 25, 2013 at 09:55:51 AM EST
Why there is a push to build on greenfield sites instead of high rises in London? Is it because of failed high rise council housing in UK 20th century?

Iambic Web Certified

[ Parent ]
It probably is by Herring (4.00 / 3) #10 Mon Mar 25, 2013 at 11:01:42 AM EST
IIRC, London has far lower population density than, say Paris. But high-rises are now forever associated with squalor in the minds of the British public. It's a problem.


christ, we're all old now - StackyMcRacky
[ Parent ]
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