A Place to Stand

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I got these graphs from an article on the Armey Curve. Curve claims a direct relationship between economic growth & the proportion of the economy that is government spending.

As governments grow, the law of diminishing returns begins operating. While the construction of roads initially assists output expansion, the construction of secondary roads and upgrading primary roads start to have less added positive impact per dollar spent. Moreover, the taxes and/or borrowing levied to finance government impose increasing burdens. Low tax rates become higher. New taxes, such as income taxes, are added to low consumption levies, with increasingly adverse effects on human economic behavior. Tariffs are raised, thwarting trade. New government spending no longer enhances economic growth.

......The Curve peaks where government spending equals 17.45 percent of GDP. Since federal spending in recent years has been between 20 and 22 percent of GDP, the results suggest that the federal government is 12-20 percent too large from the standpoint of growth optimization.

This is a US Federal government figure. It does not include State spending which is about 14% of GNP. It also includes relatively little for health care since relatively little health care is provided by the government. However the US spends about 15% of GNP on health care while Britain's 9% is very largely part of government spending. Adding State spending & say 2/3rds of health care would bring US spending up to at least the equivalent of the 43% of the economy the British government spends so we are not very different.

I don't actually think the Armey Curve is that good a predictor for 2 reasons.

Firstly it implicitly assumes that the degree of efficiency with which government spends cannot be changed. I, on the other hand, can imagine a government with a very big public sector which nonetheless manages efficiently (Singapore, whose government owned airline is one of the world's best for example) or ones with a relatively small public sector which is virtually all going to feed the kleptocracy (much of Africa).

Secondly a very large amount of the costs government enforces on the economy are regulatory ones. The cost to government of enforcing regulation is about 1/20th of the cost to industry of being regulated. If anything this is more economically damaging since money government spends on employees or goods keeps circulating while money spent on the 12/13ths of British building projects which is regulatory merely goes into a hole in the ground.

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What the first graph shows is that decadal growth fell from about 49% to 30% from the mid 1960s. The same effect happened in Europe. This is from 4% annual growth to 2.6%. The second graph, while it shows some increase in government spending in the mid 60s wasn't enough to explain the sharp fall in growth. What I think we are seeing is a major growth in purely parasitic government spending & in particular environmental regulation & subsidies for "environmental" solutions.

I have questioned how much "environmentalists" really care about the environment & how much they are merely Luddites under false colours. Beyond that I would suggest hat under public choice theory & Pournelle's Iron Law of Bureaucracy one should expect those running the state to promote philosophies that demand more state spending. What we see is an extremely strong bias by the state & its propaganda mouthpieces (the "respectable" media & particularly the BBC towards ever more silly & expensive sort of "environmentalism". This produces the question - who is running the eco-movement. Is it its leaders or is it the propagandists & donors supporting them. Or is it the empire builders running state bureaucracies. Public choice theory would suggest that the bureaucrats come closest but that even they are held by economic forces in that they will lose control if they aren't sufficiently dedicated to empire building.

In any case, whether we consider we are dealing with villainy or impersonal forces, the effect is that the "environmentalist movement seems to have been responsible for 1% decline in economic growth since about 1965. In fact it may well be larger because we have seen the better run parts of the developed world growing much faster than ever before in history & Moore's Law, that computer capacity doubles every 18 months, would also imply faster growth likely.

However even assuming the foregone growth has been only 1.4% a year since then this means that our economy & therefore all our incomes pre-tax would be at least 1.82 times what they actually are. Our economy currently is worth about £1.4 trillion a year. That means the "environmental" movement is costing us at least £1,148 billion each year (£19,000 for every man, woman & child). Because of the growth seen in the Tiger economies I actually suspect growth could have been significantly above the historical average but that is a sufficiently impressive figure to be going on with.

Iain Dale naturally has an item on Davis' victory in which he says

I also respect the fact that he sacrificed his political future for a cause he passionately believes in.

I think that is true only if he considered being a senior cabinet Minister as the height of a political career. I recognise that to many, indeed most politicians it is.

A different way of looking at it is to be ambitious to do something rather than to hold a position. I think that is what he has chosen. He is not going to get the top job but then he wasn't anyway.

What he is now going to get is the massive approval of the public & of party members. Next time he speaks at a Conservative Conference the applause will raise the roof. If he uses it wisely he will have more control over the Tory agenda than anyone but Cameron & possibly more influence with their next political generation than anyone at all.

This gives him an influence over the broad Tory agenda greater than any possible Minister other than Cameron. From the back benches he is in a position to push anything he likes & to be listened to which is not given to mere ministers. Indeed he is much freer to enter public debate than Cameron, who has to watch every word for political incorrectness. When the Tories form the government he he will be able to look beyond day to day matters at the long term - something which ministers with their Red Boxes simply don't have the time to.

He will hold a unique position in the party as its conscience, think tank & Nelson Mandela all rolled up in one. Michael Foot held a similar though much lesser position in Labour until he was foolish enough to destroy his career by becoming leader.

He has managed this by the singular feat of finding a way of resigning from shadow cabinet without having to criticise his boss (& therefore the boss dare not criticise him) Demonstrating courage an independent mind & loyalty all at the same time. It may well be that he likes Cameron no more than Brown liked Blair & unlike that partnership there are clearly real policy differences between them. However Cameron has played his hand with less naked ambition & far more finesse.

The FTSE 100 index (UK:UKX: news, chart, profile) fell 1.3% to 5,443.80 but was off its worst levels as investors cheered a retreat in oil prices to below $140 a barrel and a bit of takeover speculation in the retail sector, which pushed Marks & Spencer shares up 5%.

At one point in the session, the index traded as low as 5,358.70, placing it in bear market territory - defined as a 20% drop from a 52-week high.

The Radio is, in best Dad's Army style telling us not to panic - that a we might talk ourselves into a recession & that it is vital to keep our confidence up.

Hogwash.

The way not to have a recession is to let technology & freedom work. Cut business taxes, cut regulations, cut government spending. In 1989 Ireland was in such a recession & that is what they did. They were forced to change direction by their failure - we can too.

Allow the free market to produce as much electricity as required since the correlation between electricity production & economic production is well established. Stop regulating every new industry like GM out of existence. Get government out of the way and stop pandering to the parasites who don't understand civilisation & wouldn't like it if they did.

There is no shortage of desire to invest on the part of business. If that were not so we wouldn't be seeing all these "bubbles" - they are all signs of people investing in anything at all if there are no good investments about. If business really thought we were going to start having sufficient cheap power in 3 1/2 years (as they have in China today) which is the time it can take to build a reactor, there would be no problem with investing. If we knew we were not shortly facing blackouts nobody would have to "talk up" confidence.

There is no intrinsic reason for fear - we know technology is continuing to improve, that Moore's Law continues to operate, that there is unlimited nuclear energy for the lifetime of this planet, that we can start exploring & exploiting the Universe any time we have the gumption.

We have far less excuse for catastrophism than at any time in history yet we may see half the world, our half, going into recession while the other half keeps growing at up to 10%.

The promotion of alternative energy source biodiesel as an alternative to oil and fossil fuels has led to serious consequences for food prices, which have risen up to 75% as a result of farmers’ preference for growing biofuel products rather than basic foods.

This is according to a confidential report from the World Bank, the results of a study undertaken by a team of recognized standing in the international economic community who met in April, but the results were not published to avoid damage to U.S. President George W. Bush, one of the greatest proponents of biodiesel as the best new vehicle fuel alternative.

The analysis takes into account the upward trend of prices and contradicts the opinions from Washington who argue that biofuel energy has had a minimal effect of just 3% on the increase in food prices.


The reason for subsidising biofuels was because it would cut oil use but that seems unlikely.

Measurements of emissions from the burning of biofuels derived from rapeseed and maize have been found to produce more greenhouse gas emissions than they save.

In the long term I think biofuel made from genetically engineered organisms or algae designed to produce straight oil, of refinry quality, because

"We have modest goals of replacing the whole petrochemical industry and becoming a major source of energy," Venter told an audience that included global warming fighter Al Gore and Google co-founder Larry Page.

"We think we will have fourth-generation fuels in about 18 months, with CO2 as the fuel stock."

Simple organisms can be genetically re-engineered to produce vaccines or octane-based fuels as waste, according to Venter.

Well not exactly the long term to do it but possibly a relatively long term before government decides that even though Not Invented Here it works.

So we have the invisible foot of government screwing up in 3 different ways. their biofuels are pushing up food prices. They aren't saving oil. They aren't the effective way to do it.

A couple of replies to points made on Jerry Pournelle's site

Petronius said

"running an uncontrolled atmospheric "experiment" by raising the CO2 level of the atmosphere is probably not a good thing to do"

To some extent this is true in that the precautionary principle is a sensible idea so long as it is purely precautionery & not the "nothing should ever be done for the first time principle".*

However the one thing we know for certain about increased CO2 is that it increases plant growth which is probably on balance a good thing for food eating creatures.

* From Yes Minister a wonderful British comedy about our civil service. Filmed in the 1970s the civil servant is referring to the guiding principle of all civil service policy. That it became the guiding principle of the Greens may be a coincidence.

You said

"The US appears to be headed for a Great Depression, and the incoming administration and Congress seem determined to make that happen"

If the Chinese economy continues growing at 10% a year I suspect that would make it plain that it was Washington's fault. In which case declarations of independence from the more competent states would look like the most credible option. Whatever Heinlein thought of that (in Friday) it might be a good thing for the same reason that I oppose the EU - that competing small governments limit each other's ability to screw up.

Neil Craig

This is background information to the almost totally censored proof that NATO's "judges" knew that NATO's KLA allies were, under NATO protection, kidnapping Serbs to dissect to sell their body parts to our hospitals.

Albania has long been known as a hot spot in the illicit trade of human organs, and the missing Serb prisoners are likely just the tip of the iceberg in a much larger scandal that could involve the murder of thousands by ethnic Albanian organ traffickers.

Italian police first became aware of illegal organ trafficking from Albania in 1997 when a young Albanian boy was found with a large scar in the renal area of his back. According to an Italian government report, Albanian immigrants were behind the trafficking.

Reports published in Italian newspaper Il Giornale described Italian authorities intercepting Albanian speedboats racing across the Adriatic with eye-retinas and kidneys freshly removed from human bodies and prepared according to all the necessary medical conditions.

In 1998, London’s Observer newspaper published a shocking expose detailing a massive black market trade in human organs taken from children and infants in Albania. UNICEF told the Observer that hundreds of children simply vanished from the Albanian highlands during the late 1990s. The report said, "There have been many cases of dead new-born babies being discovered on rubbish dumps in Tirana" and that "It is widely thought that most of the missing babies are stolen from mothers who are told they are stillborn."

Arben Rakipi, Albania's then-attorney-general, told the Observer "We could be talking about hundreds of stolen babies here, of doctors being involved in the trade and of a network that extends to Italy, Greece and Macedonia."

The "babies scandal," as the Albanian media named it, became known when gravediggers in a public cemetery near Tirana discovered that some coffins, of allegedly buried stillborns, were empty.

In 2004 the Greek Embassy in Tirana published an explosive report detailing the illegal Albanian organ trade. The Greek report said that children were snatched from their families in various parts of Albania or sold, in many cases for the price of a television set. The victims, many of them disabled, were taken to special "clinics" in Durres and Fier to have their organs removed.

According to the Greek report, the organ smuggling began in 1994 and Albanian children with special needs were the primary source of black market organs. The children’s organs were often removed with the permission of parents or the directors of orphanages and institutions where the children were hospitalized.

The Greek report accused Albanian Government officials of smuggling the stolen organs to Western Europe in diplomatic bags, which are not subject to customs control.

Women forced into sexual slavery are thought to be another source of black market organs. Thousands of women are held captive for sexual slavery in Kosovo. According to one witness, when the enslaved women are no longer sexually attractive they are killed and their organs are harvested and sold on the black market.

In 2003 Elizabeth Rehn, the former U.N. undersecretary general and special rapporteur for human rights in the Balkans, gave an interview to the Washington Post where she described the trafficking of young females in the Balkans for sexual slavery and organ trafficking. Rehn accused the international community of turning a blind-eye to the problem because diplomats, workers at non-governmental organizations, police officers and religious group employees are among the pimps' biggest clients.

Rehn's assertions are backed-up by a 2004 report from Amnesty International, which found that the international troop presence generates 80% of the income for pimps and brothel owners in Kosovo.

The murder of hundreds of Serbian prisoners at the hands of KLA "surgeons" is a tragedy in its own right, but the number of Serbian victims is probably minimal compared to the number of newborn babies, retarded children, and used-up sex slaves who met the same fate.

The Albanian mafia has been harvesting human organs since 1994. Although nobody knows the precise number of victims, thousands may have been systematically butchered and sold piece by piece like old cars in a salvage yard.

Since this has "long been known" & going on since 1994 while NATO went to war the assist them in 1999 & appears to have been extensively organising, funding & arming them since 1997 there can be no question that they were unaware of exactly what they were involved in by either NATO or its/our media.

Doing a Google News search turns up 1 entry which hasn't actually reached any public outlet:

PRISTINA, Kosovo, June 27 (UPI) -- The Council of Europe has launched an investigation into allegations that rebels in Kosovo sold human organs forcibly removed from Serbs.

The council appointed Dick Marty, a Swiss senator and lawyer who investigated CIA rendition flights in Europe, to lead the investigation..... well I guess we can look forward to something equally anodyne again
...Del Ponte claimed as many as 300 people mostly Serbs, after the war were taken from Kovoso to Albania and that some of those people may have had their organs traffickedno she said "some 300" in one specific proven instance, that they were all Serbs 7 that they had all been murdered this way

Del Ponte said these organs had been flown out of Tirana to Europe. There is unquestionable that the landings, recipients of organs & who they paid for them will be on record & could be traced by policemen wishing to do so. Whether a senator will do so is something we can only speculate on.