Utopia, you are standing in it!

I was, conditionally, sympathetic to the Funding for Lending programme the Reserve Bank put in place late last year. At the time they thought (and it seemed plausible they were right) that more monetary stimulus was needed, and – through their own neglect and incompetence over several years – they asserted that a negative OCR could not yet be implemented. The announcement of the scheme clearly narrowed the gap between wholesale and retail interest rates, lowering the latter. This chart from this week’s MPS is one way of illustrating the point.

The effect was achieved by making it known the scheme was coming, and then available. Relatively little was actually borrowed, especially early in the piece.

The scheme works by offering funding to banks (only) at an interest rate equal to the OCR (floating rate, so the rate changes as the OCR does) for terms of three years. The loans…

Elizabeth Stuart (August 19, 1596 – February 13, 1662) was Electress of the Palatinate and briefly Queen of Bohemia as the wife of Friedrich V of the Palatinate. Because her husband’s reign in Bohemia as King and in the Palatinate as Prince-Elector lasted for just one winter, Elizabeth is often referred to as the “Winter Queen”.

Elizabeth was the second child and eldest daughter of James I-VI, King of England, Scotland and Ireland, and his wife, Anne of Denmark. Anne of Denmark was the second daughter of daughter of King Frederik II of Denmark and Norway and Sophie of Mecklenburg-Güstrow. Elizabeth had two siblings, infancy: Henry Frederick, Prince of Wales, who predeceased his parents and James’s future successor, Charles I. Other siblings, Margaret (1598–1600), Robert Bruce Stuart, Duke of Kintyre and Lorne (January 18, 1602 – May 27, 1602), Mary Stuart (1605–1607), and Sophia (June 22, 1606 – June 23…

Washington is filled with dishonest and self-serving analysis. Much of that shoddy output is driven by privileged groups seeking bailouts, subsidies, protectionism, or a tilted playing field.

• The health insurance and pharmaceutical companies supported Obamacare.
• Big agribusiness firms support farm subsidies.
• The big Wall Street Firms supported Dodd-Frank.

But that’s not the only type of dishonest and self-serving you find in Washington.

Let’s take the example of President Biden’s proposal to gut welfare reform with per-child handouts.

The micro-economic problem with that policy is that it reduces incentives to work – as illustrated by this Wizard-of-Id parody or this cartoon about socialism.

The macro-economic problem with that policy is that it’s part of a radical expansion in the burden of government that will make the U.S. more like Europe.

For today’s topic, though, I want to call attention to a recent…

My Insights #2 this week:

Events have rather overtaken last week’s blackout. The outage on the evening of 9 August left 35,000 households in the dark for up to two hours on the coldest night of the year.

This week we published a paper on the blackout by Carl Hansen, the former Chief Executive of the Electricity Authority from 2010 to 2018.

Hansen’s paper is full of insights. He steps through the blackout to identify the crucial moment which led to the outage. He explains how the electricity system deals with shortages. And he shows who is responsible for what, when outages occur.

Hansen’s main message is that officials at the Electricity Authority must be allowed to do their job and investigate the outage. The facts must be established before any response from the government.

The blackout was a stern reminder of electricity’s iron law: the lights must stay on.

Introduction

On 15 August 2021, Prime Minister Boris Johnson requested that the Speaker recall the House of Commons from its summer recess early so that MPs could hold an emergency debate over the fallout of the American withdrawal from Afghanistan, which the Taliban took as an opportunity to recapture Kabul and to install themselves as the de facto government once more.[1]The House of Commons would originally have reconvened on 6 September under its regular sitting calendar but met instead on 18 August.[2] The Lords Speaker also recalled the House of Lords for the same day. The British House of Commons and House of Lords could meet to discuss the British response and efforts to evacuate their diplomatic personnel and refugees because the two houses had merely adjourned for their regular summer recess. The British House of Commons has cut short its adjournments in such a manner…

The Signs Pointing to a Snap Election, June to August 2021

Since at least mid-June, the media had treated an early election as a fait accompli, and politicians and political parties began acting as if the writ had already begun by early July. On 15 June, several MPs in the House of Commons delivered their “Farewell Speeches”, including Jack Harris (New Democratic Member for St. John’s East), Simon Marcil (Blocist Member for Mirabel), and Kate Young (Liberal Member for London West).[1]The very same day, Elections Canada announced that it could administer a general election during the pandemic without the statutory amendments contemplated by Parliament which ultimately died on the Order Paper on 15 August.[2]On 22 June, Prime Minister Trudeau denounced the 43^rd Parliament for its “obstructionism and toxicity,” not the sort of thing that one would say in advance of a…

In the end, of course, the bottom line of yesterday’s Reserve Bank announcement was unsurprising and perhaps inevitable – action deferred on account of Covid. It wasn’t as if they were on some statutory schedule, so they could easily have postponed the decision for a couple of weeks, but in the scheme of things the difference between that and waiting for the next scheduled review (6 October) isn’t great. It is clear from the Bank’s forecast numbers they had not been minded to raise the OCR by 50 basis points this time, so if need be they can always catch up by acting a bit more firmly in October.

There was even something to praise. The Bank had revamped the look of the document and – bad-wig new logo aside – it was a definite improvement, even if it is hard to be sure what (if anything) the front cover…

Elite replacement

A direct consequence of the invasion was the almost total elimination of the old English aristocracy and the loss of English control over the Catholic Church in England. William systematically dispossessed English landowners and conferred their property on his continental followers. The Domesday Book meticulously documents the impact of this colossal programme of expropriation, revealing that by 1086 only about 5 percent of land in England south of the Tees was left in English hands. Even this tiny residue was further diminished in the decades that followed, the elimination of native landholding being most complete in southern parts of the country.

Natives were also removed from high governmental and ecclesiastical office. After 1075 all earldoms were held by Normans, and Englishmen were only occasionally appointed as sheriffs. Likewise in the Church, senior English office-holders were either expelled from their positions or kept in place for their lifetimes and…