A Place to Stand

The proposed investment of £300 million by Donald Trump in a big golf course off Aberdeen is a very good thing for our economy. Really.

Mr Trump touched down in Aberdeen to unveil the vision of a six-storey, 500-room hotel in Victorian style, complete with a luxury clubhouse and a golf course which one day could host the Open Championship

I mean who could object to large amounts of money, jobs etc.

Last night, the Green Party questioned whether Mr Trump's golf course was the right type of development for Scotland.

Shiona Baird, the MSP for the North East, said: "We have serious concerns about the environmental damage that will be involved in building a golf course and hotel complex in such an undeveloped area."

The usual suspects.Howeverr I was surprised to see the usually sensible Scotland on Sunday last week giving front page news to a really pointless attack on Jack McConnell for encouraging this.

JACK McConnell has been accused of breaking the ministerial code of conduct by backing a luxury golf resort planned for Scotland by billionaire Donald Trump.........They accuse of him of putting too much effort into impressing rich businessmen rather than looking after Scotland's long-term interests.

If you read the full story you will see that there is a complete lack of facts to it. "Green campaigners" are "furious", 2action that might be viewed as prejudicial such as meeting the developer", "calls for an enquiry", "concerned" etc.

Jack's job is to get investment & growth in Scotland. I have been critical of him for not doing that (running Scotland's foreign aid to Malawi, banning hunting, smoking, female circumcision & such threats to our national life) & generally increasing regulations & taxes in the name of political correctness. In this case he has clearly done his job successfully & deserves praise.

The attitude of the Greens & some others that nothing new should ever be done & that, by implication, Trump must be a dreadful person because he is rich shows Scotland at its worst.

There is also the fact that, to get this, a few of our expensive but useless windmills will not get built. Having such tokenism being forced to face reality also annoys those politicians who thinkthat economicc growth comes in a box & their job is only to spend it. Sorry to see SoS playing up to it.
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Some of the wit & wisdom ofDonaldd Trump:

'Money was never a big motivation, except to keep score. The real excitement is playing the game'

'It's tangible, it's solid, it's beautiful, it's artistic. I just love real estate'

'I wasn't satisfied to earn a good living. I was looking to make a statement'

'Deals are my artform. Others paint or write poetry. I like deals, preferably big deals. It's how I get my kicks'

I suspect this applies to most self made super rich. The theory behind capitalism & almost all economics is wrong. The theory is that people are motivated by money. In fact beyond your first million money itself is not really going to bring any significant increase in comfort. I do not believe Bill Gates works hard because he needs another billion to get his daughters through college. This is partly why I support a higher rate of tax for the rich. What should, & usually does, motivate such people is the joy of the game & the respect of others. Thus a society in which the rich do shoulder a higher tax burden but are seen as being useful rather than class enemies will be a happier one for everybody.

I recently discovered that wikipedia have a page devoted to me. Not by name - that goes to an Australian football trainer of the same name. No this page highlights a number of entries here which are considered to represent Croatiaphobia.

While consious of the honour a little background is due. I have, on a number of occasions, attempted to add to the Wikipedia entries on Franjo Tudjamn & the Srebrenica Massacre. The former is a virtually verbatim reprint of a Croatian government hagiography excluding all reference to his WW2 Nazi service & public commitment to genocide, downplays his Holocaust denial & while admitting that his declaration of independence violated the constituional guarantees to Serbs in Croatia said that only "Serbs & their apologists" care about law. The latter had a small section covering the claim that the massacre of Moslem soldiers is a fiction & that the only real massacre was of Serb civilians but this was entirely written by its opponents. I attempted to to add a number of undisputed facts to these which the moderator deleted, accusing me of "vandalism". It appears therefore that the definition of Croatiaphobia is "a concern for the truth & disapproval of genocide even when carried out by Croatian Nazis".

The previous paragraph will be added to the Wikipedia page - it will be interesting to see if it gets moderated.

The government's committee has come to a decision.

A committee set up to decide how to deal with Britain's nuclear waste in the long-term opted on Thursday to bury it deep underground forever.

The decision by the Committee on Radioactive Waste Management, known as CoRWM, will go for a final round of public consultations before being put to the government in July as the final choice.

"CoRWM considers geological disposal to be the best available approach for the long-term management of all the material categorised as waste," it said at the end of a three-day meeting in the south coast resort of Brighton.

The decision means putting the nuclear waste beyond retrieval forever rather than securing it but making it accessible for future generations should technological advances make it useable.

But the committee, noting that the process of identifying suitable sites, obtaining local consent and planning permission and then constructing the stores could take decades, also said the life of interim storage sites needed to be prolonged.

"It is important that the interim stores that are used should be safe for all security risks and be able to last for 100 years," committee chairman Gordon MacKerron told a news conference, recognising likely public opposition to the stores.

"The communities that are willing to be involved will have to be made much better off than they were before," he added.....

There is, of course, nothing here that could not have been said 5 or 10 or 20 or 30 or 40 years ago, and indeed was.

An interesting Times article here on the growing world economy. Something Gordon Brown rarely metions when saying that we are doing so much better than the G8 countries (excluding Russia 7.3%) (& the US 3.1%)(& Japan 2.7%).

for the past three years, including last year@s sharp slowdown in the British economy, the world economy has been enjoying its strongest and most sustained boom for more than three decades.

In Washington, where the chancellor has been attending the spring meetings of the International Monetary Fund (IMF) and World Bank, the mood is decidedly sunny. Presenting the IMF's twice-yearly world economic outlook. Last week, Raghuram Rajan, its chief economist, said the organisation's global-growth forecast had been revised for this year from a strong 4.3% to a booming 4.9%.

This, he pointed out, would be the fourth year in a row in which growth in the world economy would top 4%, the first time this has happened since the post-war “golden age” was coming to an end in the early 1970s.

In fact, growth in 2004 to 2006 will be close to 5%, if the IMF is right in its forecast. The 5.3% growth rate in 2004, as countries shrugged off the bursting of the dotcom bubble and the start of the Iraq war, was followed by 4.8% last year.

It would be fair to say to the world "you've never had it so good"

Even sub-saharan Africa is set for nearly 6% which is pretty bloody amazing. Indeed

Europe, indeed, is the missing piece of the jigsaw , which is one reason why Britain, locked to the Continent through trade and other ties, has not prospered as much as might have been expected.

Last year's growth of less than 2% in Britain, and a year-long rise in unemployment, suggest that we have picked up some of the slow-growth bug from the Continent. Critics also say Britain is failing to benefit fully from the strength of the global economy because of rising taxes and red tape.

In my opinion, for what it is worth,this is being driven what is known as Moore's Law - that computer capacity & to a lesser extent other electronics, double, at a fixed price every 18 months. It is generally accepted, for example, that Africa's growth owes a lot to getting access to mobile telephones! This is not a proveable law it is merely an observed phenomenon since the end of WW2, which computer experts say they expect can continue for immediate future. If so we may expect this growth rate to continue, or even accelerate, as computerisation plays an ever increasing economic role.

This is one reason why I consider the SNP's target of 4% growth for us, while seen as optimism by conventional UK parties, actually to be pretty conservative. Ireland has managed 7% so I would at least aim at 9%.

Last week I was invited to a lecture on the case for fiscal autonomy in Scotland by Professor MacDonald & sponsored by the Policy Institute & Jim Mather SNP MSP.

The paper he was reading from is here though it is pdf format.

Fiscal autonomy means that we raise our own taxes in Scotland & spend them here. One problem, as raised in a question by David McLetchie is that it is a somewhat slippery term. There is fiscal federalism (ie that some taxes are our responsibility, which, in terms of council tax & the 3p income tax variation we have a bit of already), through to "full fiscal autonomy" (ie we raise all our own money & give an agreed amount for such things as, perhaps, the army & our ambassador to the UN Security Council - which is near as dammit independence). As he pointed out fiscal autonomy can be used to describe anything between the 2. Politics is full of terms like this whose meanings change, indeed I did a letter on 24th Feb here on the subject.

The main point Professor MacDonald made for autonomy is that it provides discipline to Holyrood not to waste money. Currently they have little incentive to hold back government spending or real economic incentive to grow the economy (though it is my opinion that the voters would reward it since they certainly have an incentive to be wealthier) & thus the tax base. The main points against are the practical rather than ethical one that gains of the Barnett formula (which as the report acknowledges has been "so generous") would be lost & that a relatively small economy, particularly one dependent on one commodity, is more susceptible to economic swings (this applies particularly to oil whose price has recently gone from $20 to $70 a barrel).

The Professor did, credibly, suggest that bringing tax raising closer to spending is inherently more efficient (that studies in the US relating to cities more than states show that growth improves one standard deviation with levels of financial devolution). He also pointed out that if we achieved growth we would eventually pull ahead of UK wealth levels & therefore we would no longer need to benefit from Barnett.

He was very firmly in favour of cutting corporation tax (currently a reserved matter) & income taxes saying that each 10% cut in corporation tax leads to a 1-2% increase in growth. As regulars here will know this is very very much what I believe though it is good to have somebody who knows more than me confirm it. Thus if Scottish corporation tax were cut from 30% to 12% we could expect our growth to increase about 3% to at least the 4% predicted by the SNP. Clearly the cutting of regulation, business rates, cheap nuclear power, lower income tax, improved infrastructure (ie roads), planning restrictions on housebuilding removed etc. could be expected to bring us up to or indeed significantly above the Irish rate. The vital thing to remember about growth is that it is a permanent & compound function so that if increase we our national income 9% in one year we not only keep that increase next year but it would be 19% next year & our national income would double in 8 years (check it out). Thus Jack McConnell is not overstating it when he says growth should be our "number one priority", it is merely unfortunate that he has done nothing. When I asked Professor MacDonald, after the talk, which particular taxes were most important to growth he said, in order, that corporation tax & income tax were the ones.

Afterwards we had nosh & generally got to meet people. I met Jim Mather (I have emailed him in the past supporting some letters he has had in the Scotsman) & he said he was pleased to have a face to go with the emails. 2 people separately asked me if I was an economist which I found flattering but maybe just means I am opinionated. In discussing the future of UK Federalism, in which I believe, somebody pointed out that while the English have refused regional devolution if we were to get our economy growing faster than the UK as a whole then federalism as such would be much more attractive. Currently Holyrood appears more in terms of an 'orrible warning than a good example. We could change that. My opinion is that if Scotland achieved growth either Westminster would follow our example & we would become the most advanced part of a particularly rich & successful federal state, or they wouldn't & the ever growing divergence would make separation inevitable. I think this is a position any Scots patriot could work towards.

I hope that the debate will resolve itself not so much along the lines of whether we are for or against "fiscal autonomy" & what that means as which particular elements of fiscal policy it would be economically beneficial to devolve. Personally I would like to see a groundswell in favour of devolving corporation tax & possibly some use of the 3p income tax reduction. Anything further before we have used the income tax varying powers would be grandstanding. Eventually I would like to see a federal UK settlement which produces a number of similarly sized units. One historic advantage of federation is that the different federal units to try different solutions & all learn from the good examples (& even more from the 'orrible warnings).