A Lesson in Deterrence Theory for Emily Thornberry from Dr. Strangelove

Der Whigphilosophie Der Geschichte

One of the great joys of the current chaotic position of the Labour party, as the retro-eighties hard left under their charismatic leader Wolfie Smith, err, I mean Jeremy Corbyn struggle to impose the direction of a Leninist vanguard on the recalcitrant reactionary bourgeoisie of the PLP, is the endless stream of comic amusement provided by the spectacle of the Corbynites repetitive collisions with reality.  The latest to make me roar with laughter was the interview with Emily Thornberry on the Radio 4 ‘Today’ programme on Tuesday 9 Feburary.

In the wake of yet another fractious meeting with the PLP, this time over the Corbynite policy of non-renewal of the submarine-launched Trident ICMB nuclear weapons system, Thornberry was exposed to further amusement at the hands of BBC interviewer Nick Robinson.  The issue of unilateral nuclear disarmament is, of course, a major bugbear from the glory days of unelectable Labour in…

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Don’t Mention the Spitfire! Thornberry Did It Once, But She Didn’t Get Away With It.

Der Whigphilosophie Der Geschichte

Or – ‘The Corbynites Shoot Themselves In the Foot With Those Ignorant Historical Parallels.  Again’.

Spitfire Mk I’s from the first production order (indicated by the K-prefixed serials), flown by No. 19 Squadron, the first RAF unit to receive them, in September 1938. These aircraft would not have existed if contemporary Labour party policy opposition to rearmament had been taken seriously, with obvious consequences for the outcome of the Battle of Britain. No pressure there, then.

Commendably enough, Emily Thornberry’s reported comments from this week’s meeting with the PLP (an exercise which is swifly becoming a regular exercise in cynical bear-baiting by the Corbynite vanguard of the revolution at the expense of the PLP) warrant two separate and distinct explorations of their comic value.  The first being the deconstruction of her understanding of deterrence theory (see below).  The second being her reported use of the eventual obsolescence of the Spitfire…

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British no longer eat spam or offal

Source: National Food Survey reveals how eating habits have changed since the 1970s | Daily Mail Online.

NZ state-owned enterprise dividends & cash injections since 2007 – updated

With a straight face, the Labour Party and the Greens claim that state-owned enterprises should not be sold because taxpayers give up the future dividend stream.

image

Source: New Zealand Treasury – data released under the Official Information Act.

Leaving to one side what the sale price is the net present value of, for as far back as I could obtain data from the Treasury, it is a rare year in which the taxpayers does not pour more money into state-owned enterprises than they get back in dividends.

Transpower is carrying the entire state-owned enterprise portfolio. Earlier on, Solid Energy – a now bankrupt coal mining company– was carrying the portfolio in terms of cash flow to the taxpayer.

KiwiRail commercial valuation since 2007 @JordNZ @dpfdpf

image

Source: New Zealand Treasury – data released under the Official Information Act.

A Short History of Climatism in Google Ngrams

Watts Up With That?

Guest essay by Ari Halperin

Google Books Ngrams tracks how frequently certain words and short phrases appeared in printed books from 1800 through 2008. Such data may serve as an indication of public interest in a specific topic, subject to obvious limitations, which makes Google Ngrams a useful tool for historical research. One should keep in mind that books related to a particular event are likely to appear 0.5 – 2 years after the event.

I used Google Ngrams for a short inquiry into the history of climate alarmism. The inquiry confirmed what old skeptics have been saying all the time, and provided a more solid basis to some anecdotal evidence. Here’s a summary of my findings:

1. The alarmists first declared “scientific consensus” in 1988, and have been digging their heels in, persecuting skeptics, and constantly suppressing scientific inquiry since then, just as Richard Lindzen reported in 1992

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Does @nztreasury understand company tax incidence?

The New Zealand Treasury understands neither who pays company taxes when capital is internationally mobile nor why Ireland was relentlessly bullied over its 12.5% company tax rate.

Source: New Zealand Treasury Official Information Act response – Advice on new capital or wealth taxes, 9 February 2016.

The Treasury makes the surprising claim that the benefits of company tax cuts will leak overseas to non-residents because of the high level of foreign capital ownership.

Now if New Zealand were to substantially cut its company tax rate, hell will freeze over before the Australian Treasurer rings up and say thanks mate. The Australian worry will be the loss of investment and corporate headquarters to New Zealand.

Who pays company tax when capital is internationally mobile is one of the easiest questions you can get in an economics quiz. Just trace out how investors will react to a lower company tax in New Zealand.

If company taxes are lower in New Zealand, more investment will flow into New Zealand, increasing the size of the capital stock in New Zealand and with it wages in New Zealand because New Zealand workers have more capital to work with.

When will these international capital inflows stop? It is obvious! When risk-adjusted after-tax returns equalise for internationally mobile investors. They will adjust their portfolios so that after-tax returns equalise across tax jurisdictions.

The after-tax returns are equalised by the competing tax jurisdictions having different before-tax rates of return on capital and therefore costs of capital.

Jurisdictions with high company taxes have to offer larger before-tax returns so that internationally mobile investors receive the same risk-adjusted after-tax return everywhere. High tax jurisdictions boost before tax return by wages being lower in the high tax jurisdiction.

High company taxes are paid for by the workers of the jurisdiction concerned through having to accept lower wages to work with the same amount of capital. They must compensate foreign investors by boosting before-tax returns so that their after-tax rates of return equalise across competing tax jurisdictions.

The New Zealand Treasury missed this most basic point about who pays a company tax in a globalised world. The Australian Treasury is right on top of this basic piece of economics:

The mobility of capital refers to how easily financial capital (debt and equity) flows into and out of a country. Greater capital mobility will shift more of the burden of taxation from capital to labour through larger changes in the domestic capital stock, and hence in domestic labour productivity and wages (Grubert and Mutti 1985; Gravelle 2010).

In this situation, a reduction in the company tax rate will result in large inflows of foreign capital to ensure that there is no material difference between the after tax (risk adjusted) rate of return on investment in Australia and the rate available abroad.

The many attempts at company tax harmonisation by the European Union and G20 are motivated by the fear of large capital flows into the lower tax jurisdictions.

No high-tax country views the low company taxes in Ireland, Singapore and Hong Kong as a windfall where they can raise more tax revenue on the additional dividends repatriated from lower tax jurisdictions.

Very large economies such the USA can get away with a slightly above average rates of company tax because the number of other places to go are fewer.

A small open economy such as New Zealand should safely assume that most to all of burden of the company tax is on New Zealand workers through lower wages.

Capital migrates from high-tax to low-tax locations, reducing capital-to-labour ratios in high-tax countries. The low-tax countries experience higher capital-to-labour ratios, a higher marginal product of labour, and higher wages.

I will be putting in an Official Information Act request seeking to find out whether the work of Arnold Harberger influences their company tax briefings to ministers. I will also add any work they are done on corporate inversions and the company tax rate in Ireland.

Dogs have owners, cats have staff

Law of Markets

The core message of this article, Fat Cats on a Diet: Will They Still Love You? is that yes they will.

“We say, ‘dogs have owners, cats have staff,’” said Dr. Richard E. Goldstein, chief medical officer at the Animal Medical Center in New York. “A cat learns to manipulate us very well: when she’s hungry, she’s the most affectionate cat in the world. And people will do anything to keep their cats happy.”

Many owners “free-feed” cats, letting them graze at will. But bored indoor cats, like bored indoor humans, may eat beyond satiety. “Cats don’t self-regulate well,” said Dr. Goldstein.

Concerned with the human role in feline obesity, Cornell researchers asked: If a cat’s food were reduced, would its behavior change? If so, how would owners translate those changes? For the study, 48 cats, each at least 25 percent over ideal weight, were put on one of three…

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Global Warming Theory Suffers A Catastrophic Setback

Climatism

Warming fears are the “worst scientific scandal in the history…When people come to 
know what the truth is, they will feel deceived by science and scientists.” – UN IPCC 
Japanese Scientist Dr. Kiminori Itohan award-winning PhD environmental physical
chemist.

“The whole climate change issue is about to fall apart — Heads will roll!” – South African UN Scientist Dr. Will Alexander, April 12, 2009

“I am a skeptic…Global warming has become a new religion.” – Nobel Prize Winner for
Physics, Ivar Giaever.

•••

Tragic news for climate catastrophists as Arctic sea ice extent looks set to smash all records, despite rising CO2 emissions.

Arctic amplification is the most fundamental tenet of global warming theory, and we are seeing the exact opposite.

Screen Shot 2016-02-16 at , February 16, 3.21.18 AM

COI | Centre for Ocean and Ice | Danmarks Meteorologiske Institut

Al Gore told the Nobel committee the Arctic would be ice-free by 2014.

Government funded experts, leading journalists, and…

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@BernieSanders Campaign Has Crossed Into Neverland | Kevin Drum

Source: The Sanders Campaign Has Crossed Into Neverland | Mother Jones.

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