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Sunday, February 01, 2009


This is an email I sent to several of the "great & good" including all 3 party leaders & in a slightly shorter from to several of the serious papers:

"I understand Gordon Brown is "fighting the recession with every weapon at our disposal". May I suggest we treat the size of government & the massive regulatory burden it puts on the economy (not least by ensuring electricity prices are 4 times what they could be) as something that could be disposed of.

We face a financial crisis which only gets worse, indeed we are now on the abyss of national bankruptcy. Government action is not improving things & there is a reason for that. Government is only massaging the symptoms it is not facing the underlying problem. Government is the underlying problem.

The cause is not a housing bubble, that is only the effect of money looking for something to invest in. It is not America - they are doing better than us. It is not the "global recession." There is no global recession - according to the World Bank the world economy grew 2.5% last year & will do 0.9% this year - there is a recession only in Europe, America & Japan. This gives us a clue - it is not something inherent the Crunch is caused purely by these governments.

For 4 decades we have seen our government bringing in ever more rules & restrictions on our lives. This has made our economy ever more uncompetitive.

We know that if the market were allowed to work freely, we could have unlimited nuclear electricity at 1/4 the current cost & sufficient cheap power is the underlying engine of economic progress.
We know that in a free market housing would be available at 1/4 the present price because they have gone up 4 times faster than the RPI. We know that most of our public works cost 13 times their natural cost because that is how much the new Forth bridge has risen since the previous one was built, that is how much Richard Rogers has said the Millenium Dome was overpriced & that is how much more expensive Crossrail is than equivalent tunnel projects elsewhere in the world. We know that our best & brightest scientists are being driven to Singapore to work on GM & to California to do bio-medical research. We know that what remains of our steel industry is being forced to relocate to China by our government regulations. We know that our business taxes are high & that that is why we have achieved a growth rate half the world average while Ireland's was 3 times greater. We know that enforcing regulations costs industry 20 times as much as it costs the enforcers & thus that the 200,000 Health & Safety inspectors costs the work of 5 million British workers. We know that that we cannot build for our Olympics, anything as technologically innovative as China's Birds Nest Stadium because the H&S regulators won't let us. We know that should you wish to invest £1 billion in our economy you will, like Mr Trump, have to spend up to 4 years working through the bureaucracy, even if all party leaders support such investment. We know that government was just under 50% of the economy & is probably now over & that most of it produces no economic benefit & much of it (the regulators) has a heavily negative value.

It is because government has so assiduously prevented investment in our economy & in the new industries which would be springing up if they were not being stifled that there has been an investment bubble in houses. The fact that government, by preventing builders building, produced an artificial scarcity also encouraged panic to 'get on the housing ladder." We have spent a decade in a comfortable illusion that because prices were going up we were wealthier, while the BRIC (Brazil, Russia, India & China more than doubled their GNP).

The solution is obvious. Government must end the regulations & taxes that prevent progress. Scientists & engineers must have the freedom to produce new industries & entrepreneurs the freedom to build them. We must allow the building of sufficient new nuclear plants to stop the lights going out shortly. We must cut the £200 billion in new government bureaucracy, above & beyond inflation, which we have had in the last 11 years & use the money to invest in the future. We are still technologically far ahead of most of the world. We can easily not only get out of recession but at least match the world's recent average growth of 5%. We only have to stop strangling ourselves in government Luddite red tape."

So Gordon has not written back to me to say "Neil, that is absolutely brilliant, you are totally right & I will get moving on abolishing all these parasitical breaks on our economy right away". Indeed he hasn't replied at all - nor has anybody else - nor has an paper published it.

So OK I'm having fun & don't really expect the entire country to defer to me.

But on a deeper level I think they should. At the very least if I am wrong somebody, somewhere among the G&G should at least be able to give a coherent reason why. Gordo tells us he is "using every weapon" so he should be able to explain why deregulation isn't a weapon. The Tories seem equally bereft of any idea what to do. Iain Dale quotes Widdicombe on it - "Haven't a clue," she said. "And the trouble is, nor has anyone else." which shows not that she disagrees with the other MPs but is merely more honest.

The government is a lot large than 50% of the economy. If a the state regulates an industry strictly enough it practically owns the business. A good example of ownership-by-regulation is the US banking industry. Really, the government owns half or the economy and regulates another quarter, which makes the remaining quarter look very productive.

I have to ask, do a lot of Europe's stupid ideas come from the US, or is that something Europe produces on its' own?
The cause is not a housing bubble, that is only the effect of money looking for something to invest in.

This isn't just true of money, but also of mens' lives. There are so many causes that would be worth pouring our lives into that aren't possible, because of our worthless "leaders".

We can't explore or produce because the government says that might be bad for our health. We can't wage war effective war to secure our future against Islam because the leftists say that might hurt the muzzies feelings.

Where is the grand purpose, the grand designs? Our ancestors sailed into an unknown ocean in bad weather at their own expense to settle a savage continent. Now I need to have my car emission tested because it might harm a spotted owl four states away.

This idle frustration is killing me. If McCain had called for the invasion and conquest of all of the Muslim world, I'm sure two million men would have volunteered, just so that they could get away from the stagnation of the modern West.

Following our "leaders" is like following a parked car.
Today's economy is in such a drastic state that there really is no easy solution. The easiest way for someone to get immediate financial help is through grants.
Exactly. To get grants you have to pander to government, whether by having an industry that exists purely because of grants (windmills); is "to big to fail" (banks); is in government constituencies (Northern Rock, the car industry); has lots of lawyers & lobbyists (Microsoft's competitors); or just knows the right people (Banks again).

If you do that you can put less effort into creating wealth (if you are nationalised much less [NASA}).

Thus however much grants are in the interests of the recipient they are almost automatically even more against the interests of society, but once we have an overpowering size of govermnent pandering becomes the only profitable game.
Give the car industry credit, unlike the banks they are capable of creating an actual product. The reason they have to crawl to the government for help is because of government imposed costs.
Also in the US the car bosses have been much more willing t0 forego bonuses than bankers, who have hardly earned them.
I have said elsewhere that having national aims is good for society. The national aim I would go for would be space development (no surprise ;-)). Ifeel it would be far more productive & worth than taking over the middle east & a lot cheaper too. For the perhaps $3 trillion Iraq cost we could have have settled every Mars, moon & large asteroid in the solar system.
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