Quotulatiousness

March 7, 2012

Wind turbines are “a technology that isn’t ready for prime time”

Filed under: Britain, Economics, Environment, Technology — Tags: , — Nicholas @ 10:20

Andrew Orlowski on the bad economic and technological decision by the British government to put so much reliance on wind power:

Two studies published this week calculate the astounding cost of Britain’s go-it-alone obsession with using wind turbines to generate so much of the electricity the nation needs.

Both studies make remarkably generous concessions that favour wind technology; the true cost, critics could argue, will be higher in each set of calculations. One study reckons that the UK can still meet its carbon dioxide emissions targets and save £140bn — but only if it dumps today’s inefficient hippie technology. The other puts the potential saving at £120bn — pointing out that the same amount of electricity could be generated using open cycle gas plants at one-tenth the cost of using wind turbines.

“There is nothing inherently good or bad about investing in renewable energy and green technology,” writes economist Professor Gordon Hughes — formerly of the World Bank and now at the University of Edinburgh. “The problem is that the government has decided to back a technology that isn’t ready for prime time, thus distorting the market.”

Hughes’ study — Why is Wind power so expensive? An economic analysis — is published by the Global Warming Policy Foundation today, and simply looks at the costs. The other study, by technical consulting group AF-Mercados, specifically looks at how to reduce CO2 in the cheapest manner — by incurring the least collateral economic damage. It’s called Powerful Targets: Exploring the relative cost of meeting decarbonisation and renewables targets in the British power sector. KPMG originally commissioned the study, but then got cold feet. Both come to similar conclusions: wind is astronomically expensive compared to other sources of energy — and consumers and businesses must pay a high price for the privilege of subsidising such an inefficient technology.

Update, 10 March: A lovely little cartoon from Watts Up With That on this topic:

March 5, 2012

Tim Worstall: “Neoliberal” has a meaning

Filed under: Economics, Europe, Greece — Tags: , , — Nicholas @ 09:55

He’s ticked off at an article at the Guardian, blaming “neoliberals” for the Greek crisis:

In what paranoid fantasy is what is happening in Greece neoliberal?

The actual neoliberal position (recently affirmed at our meeting in the underground secret headquarters under the volcano that sank Atlantis) is that the euro itself was and is a bad idea as it’s not an optimal currency area. And if there is to be a euro then Greece should not be a part of it. Since it is, and it’s bust, then it should default and devalue.

In short, the neoliberal solution is the Icelandic one, not the Irish, Greek or Portuguese.

So how come we neoliberals (as you know, the modern incarnation of the Green Lizards, Rosicrucians and Illuminati all rolled into one) are getting blamed for the entire fuck up that is happening precisely because no one will follow the prescriptions of neoliberal economics?

The failure of wind power

Filed under: Britain, Economics, Environment, Technology — Tags: , , , , , — Nicholas @ 00:01

Matt Ridley on the inability of wind power advocates to distort reality:

To the nearest whole number, the percentage of the world’s energy that comes from wind turbines today is: zero. Despite the regressive subsidy (pushing pensioners into fuel poverty while improving the wine cellars of grand estates), despite tearing rural communities apart, killing jobs, despoiling views, erecting pylons, felling forests, killing bats and eagles, causing industrial accidents, clogging motorways, polluting lakes in Inner Mongolia with the toxic and radioactive tailings from refining neodymium, a ton of which is in the average turbine — despite all this, the total energy generated each day by wind has yet to reach half a per cent worldwide.

If wind power was going to work, it would have done so by now. The people of Britain see this quite clearly, though politicians are often wilfully deaf. The good news though is that if you look closely, you can see David Cameron’s government coming to its senses about the whole fiasco. The biggest investors in offshore wind — Mitsubishi, Gamesa and Siemens — are starting to worry that the government’s heart is not in wind energy any more. Vestas, which has plans for a factory in Kent, wants reassurance from the Prime Minister that there is the political will to put up turbines before it builds its factory.

It’s a lesson we still need the Ontario government to learn: our electricity prices are scheduled to go up substantially to finance the massive wind farm investment the McGuinty government has signed up for. Much more of our landscape will look like this in future:

Even in a boom, wind farms would have been unaffordable — with their economic and ecological rationale blown away. In an era of austerity, the policy is doomed, though so many contracts have been signed that the expansion of wind farms may continue, for a while. But the scam has ended. And as we survey the economic and environmental damage, the obvious question is how the delusion was maintained for so long. There has been no mystery about wind’s futility as a source of affordable and abundant electricity — so how did the wind-farm scam fool so many policymakers?

One answer is money. There were too many people with snouts in the trough. Not just the manufacturers, operators and landlords of the wind farms, but financiers: wind-farm venture capital trusts were all the rage a few years ago — guaranteed income streams are what capitalists like best; they even get paid to switch the monsters off on very windy days so as not to overload the grid. Even the military took the money. Wind companies are paying for a new £20 million military radar at Brizlee Wood in Northumberland so as to enable the Ministry of Defence to lift its objection to the 48-turbine Fallago Rig wind farm in Berwickshire.

March 4, 2012

Passenger rail as the ultimate political luxury good?

Filed under: Economics, Government, Politics, Railways — Tags: , , , — Nicholas @ 00:14

A post at Coyote Blog from last month looks at the eye-popping financial arrangements keeping the New Mexico “Railrunner” passenger service in operation:

Of course, as is typical, the Republic article had absolutely no information on costs or revenues, as for some reason the media has adopted an attitude that such things don’t matter for rail projects — all that matters is finding a few people to interview who “like it.” So I attempted to run some numbers based on some guesses from other similar rail lines, and made an educated guess that it had revenues of about $1.8 million and operating costs of at least $20 million, excluding capital charges. I got a lot of grief for making up numbers — surely it could not be that bad. Hang on for a few paragraphs, because we are going to see that its actually worse.

The equipment used in the New Mexico Railrunner operation looks remarkably similar to what GO Transit runs in the GTA:

Click to see original image at Coyote Blog

Anyway, I got interested in checking back on the line to see how it was doing. I actually respected them somewhat for not running mid-day trains that would lose money, but my guess is that only running a few trains a day made the initial capital costs of the line unsustainable. After all, high fixed cost projects like rail require that one run the hell out of them to cover the original capital costs.

As it turns out, I no longer have to guess at revenues and expenses, they now seem to have crept into the public domain. Here is a recent article from the Albuquerque Journal. Initially, my eye was attracted to an excerpt that said the line was $4 million in the black.

[. . .]

Now it looks like taxes are covering over half the rail’s costs. But this implies that perhaps $10 million might be coming from users, right? Nope, keep reading all the way down to paragraph 11

    The Rail Runner collects about $3.2 million a year in fares and has an annual operating budget of about $23.6 million. That does not include about $41.7 million a year in debt service on the bonds — a figure that include eventual balloon payments.

So it turns out that I was actually pretty close, particularly since my guess was four years ago and they have had some ridership increases and fare increases since.

At the end of the day, riders are paying $3.2 million of the total $65.3 million annual cost. Again, I repeat my reaction from four years ago to hearing that riders really loved the train. Of course they do — taxpayers (read: non-riders) are subsidizing 95.1% of the service they get. I wonder if they paid the full cost of the train ride — ie if their ticket prices were increased 20x — how they would feel about the service?

If all of that wasn’t enough, the financing arrangement has a nasty sting in the tail: in the mid 2020’s, the state will owe two separate payments of over $200 million. Enjoy the subsidized rides now, folks … the payment comes due just in time for your kids to face as they graduate.

March 3, 2012

Three persistent myths about the Great Depression, the New Deal, and World War 2

Filed under: Economics, Government, History, USA, WW2 — Tags: , , , — Nicholas @ 00:08

Historian Stephen Davies names three persistent myths about the Great Depression. Myth #1: Herbert Hoover was a laissez-faire president, and it was his lack of action that lead to an economic collapse. Davies argues that in fact, Hoover was a very interventionist president, and it was his intervening in the economy that made matters worse. Myth #2: The New Deal ended the Great Depression. Davies argues that the New Deal actually made matters worse. In other countries, the Great Depression ended much sooner and more quickly than it did in the United States. Myth #3: World War II ended the Great Depression. Davies explains that military production is not real wealth; wars destroy wealth, they do not create wealth. In fact, examination of the historical data reveals that the U.S. economy did not really start to recover until after WWII was over.

March 1, 2012

The plight of Britain under austerity

Filed under: Britain, Economics, Government, Media — Tags: , , , , , — Nicholas @ 10:03

Vuk Vukovic wonders why the notion that the British government has imposed austerity still has any traction in the media:

The UK had the one of the strongest fiscal stimuli (relative to the size of its economy) in the world as a response to the crisis, during the premiership of Gordon Brown. The result was making the situation much worse with a rising public debt and the third highest budget deficit in the world behind only Greece and Egypt in 2011, and behind Greece and Iceland in 2010. This comparison is striking since these countries were doing much worse than the UK at the time and were countries with highly unstable economies – Iceland before the restructuring, Greece whenever, and Egypt after a year-long revolution which saw the downfall of a dictator and an inability to consolidate ever since.

So the argument of Keynesians is that this wasn’t enough, and that Britain is crippled with austerity. The media is supporting the former view as well. Britain is running the hardest austerity policy in Europe and this is resulting in terrible growth performance and the inability to start up the recovery. However, Britain is far from austerity. Yes, some painful cuts have been made, tuitions were rising, unions were hit, wages in the public sector are stagnant, a lot of public sector workers have been laid off, but what does the government do with this saved up money? It “invests” in credit easing, housing subsidies, the youth contract and infrastructural projects. On the other hand, it’s guiding private sector investment and centrally planning credit, it announces an increase of the minimum wage, abolishing of the default retirement age, more regulation after claiming to remove regulation, the 50p tax rate and so on. None of these policies are policies aimed at growth. They are all part of a Keynesian response to the crisis.

After all, if one would just observe the spending data for the UK, it is still increasing, both relatively (as percent of GDP) and absolutely.

“You keep using that word. I do not think it means what you think it means.” To call a situation where government’s share of GDP is rising as “austerity” requires a brand new definition for the word.

February 29, 2012

The US Navy’s mirror-image cost problems with aircraft carriers

Filed under: Economics, Environment, Military, Technology — Tags: , , , — Nicholas @ 09:51

Strategy Page talks about the ever-rising cost of building aircraft carriers:

The first of the new Ford class aircraft carriers keeps getting more expensive. The price for the first one has gone up $161 million in the last ten months. The USS Gerald R Ford (CVN 78) was originally supposed to cost $8 billion, plus $5 billion for R&D (research and development of new technology and features unique to this class of ships). Now it appears that the cost of the Ford will not be $13 billion, but closer to $15 billion. The second and third ships of the class will cost less (construction plus some additional R&D). Thus the first three ships of the Ford class will cost a total of about $40 billion.

The current Nimitz-class carriers cost about half as much as the Fords. Both classes also require an air wing (48-50 fighters, plus airborne early-warning planes, electronic warfare aircraft, and anti-submarine helicopters), which costs another $3.5 billion. Three years ago, the USS George H.W. Bush (CVN 77), the last of the Nimitz class carriers, successfully completed its sea trails and was accepted by the U.S. Navy. The Bush was ready for its first deployment in 2010.

At those costs, it should be no surprise that few other navies operate carriers at all, and none operate the size of carrier that the US Navy does. Build costs are rising rapidly, and although the Ford class will carry significantly fewer crew members, they’ll still be very expensive to operate.

The costs don’t end there, however, as all warships have limited lifespans. Disposal of the retired ships is another area where costs are headed ever higher:

Last year, the U.S. Navy decided to go back to the breakers (where ships are broken up for scrap). Four retired aircraft carriers (USS Constellation, USS Forrestal, USS Independence and USS Saratoga) were to be scrapped instead of sunk, or simply allowed to rust away while tied up. These ships were taken out of service between 1993 and 2003 and have been waiting since then while a decision was made on their disposition. But there are seven carriers waiting to be scrapped and the navy has an economic disaster on its hands. Keeping carriers in reserve costs $100,000 a year, but it can cost over a billion dollars to scrap one of them.

Since the 1990s, sending warships to the scrap yard has not been considered a viable alternative. It’s all about pollution, bad press and cost. The largest warship to be scrapped, the 45,000 ton carrier USS Coral Sea, took until 2000 (seven years) to be broken up. Thus the process is not only expensive, it takes a long time. Then the navy discovered that the cost of scrapping the carrier USS Enterprise would be close to a billion dollars. This was largely the result of lots more environmental and safety regulations. With so many navy ships (especially nuclear subs) being broken up in the 1990s, and all these new regulations arriving, the cost of disposing of these ships skyrocketed. This was especially true with carriers.

[. . .]

It gets worse. With the really vast number of single hull tankers being scrapped and large numbers of old, smaller-capacity container ships laid up and likely to be offered for scrap fairly soon, the market for difficult-to-scrap naval ships is going to shrivel, and the price for scrap steel will drop. Efforts to get the navy include the costs of disposal in the budget for lifetime costs has never caught on, and now it’s obvious why not. The real nightmare begins in 2013, when the first nuclear powered carrier (the 93,000 ton USS Enterprise) is to be decommissioned. The cost of dismantling this ship (and disposing of radioactive components) will be close to $2 billion.

February 28, 2012

Did Greece get bailed out or did it default? A little from column A and a bit from column B

Filed under: Economics, Europe, Government, Greece, Politics — Tags: , , , — Nicholas @ 09:56

Detlev Schlichter explains what happened in the “big fat Greek bailout”:

Greece was bailed out for the second time in four months. Or did it default? Well, a bit of both, I guess.

All bondholders are equal. But some are more equal than others. If you are the ECB, your Greek bonds were exchanged, par for par, for new Greek bonds, and you can go on pretending that they are worth their principal amount. You won’t have to report a loss for now. But if you are a ‘private’ entity — and that is a rather loosely used term these days as it includes the banking industry which is either now partially owned by the state or to a considerable degree dependent on ongoing support from the lender-of-last resort — more than half your Greek investment was wiped out. So Greece defaulted. But as you ‘agreed’ to the ‘haircut’ it was in fact a ‘voluntary restructuring’, although you really had no choice.

[. . .]

I guess we shouldn’t lose sight of the fact that Greece’s economic model is fundamentally unsustainable, whichever way you cut it. Greece has been living beyond its means for a long time, and has managed to do so by flying under air-cover of the EMU project and with the tailwind of cheap credit and easy money. Spending by the Greek state accounts for more than half of registered economic activity, and a third of the workforce is employed by the public sector. ‘Activities’ are being subsumed under the heading of ‘Greek GDP’ that nobody would voluntarily pay for, that are to a large degree wasteful, and that are simply unaffordable under anything but the most bizarrely generous credit conditions, i.e. precisely those that Greece enjoyed from 2001 to 2008. Easy money has been used to paper over grave economic imbalances. Some of what is generously labelled ‘GDP’ should be discontinued — and fast.

To even suggest that such an economic model would be manageable if Greece, a country with about three quarters of the population of metropolitan Los Angeles but with less than half of L.A.’s GDP, only had its own paper currency and could inflate and devalue to its heart’s content, is economically illiterate. No country ever prospered by running budget deficits funded by the printing press or by creating domestic inflation. Devaluing your currency may give your exporters a shot in the arm — for about five minutes. But it scares your domestic savers away for years to come and severely diminishes your ability to keep or attract capital, the backbone of any sustainable economic model. To even try and attempt to ‘inflate away’ a debt load worth 160 percent of a generously calculated GDP would cause economic damage of gigantic proportion. One must have swallowed the Keynesian mythology of deficit-spending whole to believe that the country could borrow and print itself out of this mess. A proper default on its existing debt and rebuilding from a lower base — but with a hard currency — are the better options.

February 27, 2012

Matt Ridley reviews Watermelons by James Delingpole

Filed under: Books, Economics, Environment, Government, Liberty, Media — Tags: , , , — Nicholas @ 12:11

In short, he likes it and thinks it deserves your attention:

With each passing year it becomes clearer that the cure for global warming is worse than the disease. While wind power and biofuels devastate ecosystems and economies, temperatures and sea levels rise ever more slowly, just as the greenhouse theory — minus feedbacks — predicts. As James Delingpole acutely observes, the true believers are left with a version of Pascal’s wager embodying a ‘dismally feeble grasp of cost-benefit analysis’: that, however unlikely it is, the potential cost of global warming is so high that anything is justified.

[. . .]

In keeping with that tradition, sometimes he goes too far. Before 2009, I had more sympathy for his targets. But the leaked emails of ‘Climategate’ — a word that Delingpole popularised — and the official whitewashes of that episode leave no doubt about the tactics that have been used by the climate orthodoxy to bully doubters and suppress dissent, while raking in money from carbon indulgences. This church deserves a rude Luther.

[. . .]

To Delingpole’s surprise as well as the reader’s, this book is not really about climate change after all. As he digs deeper into the writings of the Club of Rome and their ambitious disciples (such as John Holdren, science adviser to Barack Obama, and Maurice Strong, first director of the UN Environmental Programme, godfather of both the Rio Conference of 1992 and the Kyoto treaty of 1997, and deviser of the Earth Charter to replace the Ten Commandments — who moved to China at the moment that he was implicated in the Iraqi ‘oil for food’ scandal), Delingpole finds he cannot avoid an uncomfortable conclusion:

    Look, when I began researching this book, I thought it was going to be about Climategate and global warming — not some massive international plot to destroy Western Civilisation and replace it with some grisly New World Order based on rationed resources, enforced equality and the return of the barter system. Unfortunately, though, the weight of evidence was against me. So brazenly open are the leading ideologues of the green movement about their plans for New World Order, I’m not even sure the word ‘conspiracy’ properly applies.

The grand green faith has two commandments: that humanity is the problem not the solution; and that international central planning is the solution, not the problem.

The dematerialization of the future

Filed under: Economics, Science, Technology — Tags: , — Nicholas @ 00:06

Matt Ridley reviews a new book by Peter Diamandis and Steven Kotler:

Economic growth is a form of deflation. If the cost of, say, computing power goes down, then the users of computing power acquire more of it for less—and thus attain a higher standard of living. One thing that makes such deflation possible is dematerialization, the reduction in the quantity of stuff needed to produce a product. An iPhone, for example, weighs 1/100th and costs 1/10th as much as an Osborne Executive computer did in 1982, but it has 150 times the processing speed and 100,000 times the memory.

Dematerialization is occurring with all sorts of products. Banking has shrunk to a handful of electrons moving on a cellphone, as have maps, encyclopedias, cameras, books, card games, music, records and letters — none of which now need to occupy physical space of their own. And it’s happening to food, too. In recent decades, wheat straw has shrunk as grain production has grown, because breeders have persuaded the plant to devote more of its energy to making the thing that we value most. Future dematerialization includes the possibility of synthetic meat—produced in a lab without brains, legs or guts.

H/T to Virginia Postrel, who also linked her own article from last year covering a related area:

The hardest economic question is, What comes next? What, in other words, are the new sources of economic value? How can businesses grow and our standard of living rise?

Sometimes the answer is simply more of the same. Growth comes from rolling out existing goods and services to new markets, until there’s a chicken in every pot and a car in every garage. This kind of progress may be hard to achieve, but you at least start with a clear notion of what it would look like.

That’s why catch-up economies like China today or South Korea in the past can grow so fast. Their businesses don’t have to figure out what to make or sell. They know what’s possible by looking abroad, and have a reasonable idea of what consumers, local or international, want to buy. Refrigerators and air conditioning are popular; so are shampoo and disposable diapers.

At the economic frontier, the hardest question gets much harder. You no longer have a clear vision of the future. You know neither what’s possible nor what people want. You can only guess. Starbucks or FedEx may sound obvious in retrospect, but they were once crazy ideas.

February 26, 2012

The Freeman: An open letter to statists everywhere

Filed under: Economics, Government, Liberty, Politics, USA — Tags: , , — Nicholas @ 12:09

In a posting from twelve years ago, Lawrence W. Reed has some questions he’d like statists to answer:

You clever guys are always coming up with new schemes for government to do this or that, to address this issue or solve that problem, or fill some need somewhere. You get us limited-government people bogged down in the minutiae of how your proposed programs are likely to work (or not work), and while we’re doing the technical homework you seldom do, you demonize us as heartless number crunchers who don’t care about people.

Sometimes we all get so caught up in the particulars that we ignore the big picture. I propose that we step back for a moment. Put aside your endless list of things for government to do and focus on the whole package. I need some thoughtful answers to some questions that maybe, just maybe, you’ve never thought much about because you’ve been too wrapped up in the program du jour.

At the start of the 1900s, government at all levels in America claimed about 5 percent of personal income. A hundred years later, it takes more than 40 percent — up by a factor of eight. So my first questions to you are these: Why is this not enough? How much do you want? Fifty percent? Seventy percent? Do you want all of it? To what extent do you believe a person is entitled to what he (or she) has earned?

[. . .]

This raises a whole series of related questions about how you see the nature of government and what you’ve learned, if anything, from our collective experiences with it. I see the ideal government as America’s founders did — in Washington’s words, a “dangerous servant” employing legalized force for the purpose of preserving individual liberties. As such, it is charged with deterring violence and fraud and keeping itself small, limited, and efficient. How can you profess allegiance to peace and nonviolence and at the same time call for so much forcible redistribution?

Disaster preparedness, Wyoming style

Filed under: Economics, Government, Politics, USA — Tags: , , , , — Nicholas @ 08:56

Wyoming legislators are serious about their state being prepared for disaster:

State representatives on Friday advanced legislation to launch a study into what Wyoming should do in the event of a complete economic or political collapse in the United States.

House Bill 85 passed on first reading by a voice vote. It would create a state-run government continuity task force, which would study and prepare Wyoming for potential catastrophes, from disruptions in food and energy supplies to a complete meltdown of the federal government.

The task force would look at the feasibility of Wyoming issuing its own alternative currency, if needed. And House members approved an amendment Friday by state Rep. Kermit Brown, R-Laramie, to have the task force also examine conditions under which Wyoming would need to implement its own military draft, raise a standing army, and acquire strike aircraft and an aircraft carrier.

H/T to Hit & Run where they comment with just the right level of absurdity: “The aircraft carrier is a nice touch. I suppose if it’s a big enough disaster, Wyoming might become a coastal state.”

Update, 29 February: Sadly the bill failed on third reading, so Wyoming won’t be pursuing its own aircraft carrier:

It appears that, on reflection, the Wyoming House of Representatives has decided the risk of invasion by its neighbors is remote enough that it can do without its own armed forces for now, and in particular does not need to consider whether an aircraft carrier might come in handy. I was informed, I think by Rep. Brown himself, that the bill was “defeated on third reading and exists no more.”

[. . .]

Rep. Brown was not a sponsor of the bill, although he does seem to have voted for it on the first reading; he later offered the aircraft-carrier amendment, and then voted against the whole thing today. So, although he hasn’t confirmed it yet, it does look like he may be one of those relatively rare legislators with both a sense of humor and the will to express it in a piece of legislation (which he knew would be deleted). It’s nice to be able to get humor out of a legislature this way for once.

February 25, 2012

Tim Harford: The problem of “interdisciplinary problems”

Filed under: Economics, Science, Technology — Tags: , , , — Nicholas @ 10:25

Tim Harford recently visited Oxford Martin School to discuss the phenomenon of problems that are seen as intractable when viewed from within a “silo” or single discipline, but which yield solutions when approached in co-operation with multiple disciplines:

In academia, the challenge of encouraging interdisciplinary research is at least recognised as a problem. The advancing frontier of scientific knowledge forces most researchers to specialise in ever narrower fields and, as a result, collaboration between these silos is essential. I recently visited the Oxford Martin School, a seven-year-old initiative designed to foster cross-disciplinary projects at the University of Oxford. I talked to the school’s director, Ian Goldin, about the challenges of breaking down academic silos.

He thinks these silos are mostly artificial. Academic journals are largely specialised rather than interdisciplinary and official funding bodies shy away from interdisciplinary projects. The result is that academics with interdisciplinary interests have few ways to fund the research and few credible outlets for publishing the results. The Martin School has funding, but most of the researchers are either junior, with some freedom to experiment, or professors so senior they no longer need to worry about their publication record. The mid-career academics are missing. It is nice to hear the tenure system sometimes produces the hoped-for courage and independence, but not so nice that there is no career track for interdisciplinary researchers.

[. . .]

If problems are one focal point for collaboration, tools can be another. An example: systems needed to deal with the gigantic data sets generated in finance, astronomy and oceanography. Such tools naturally bring together computer scientists and the statisticians, economists and scientists who might use the data. Goldin points to “crowdsourcing” as a second example of a cross-disciplinary tool, complexity science as a third and (optimistically, I feel) practical ethics as a fourth.

Perhaps the real lesson is that promoting cross-disciplinary research need not require a mysterious blend of social-networking tools and funky collaborative architectural spaces. All that is sometimes required is a shared problem, or a shared set of tools, and, above all, the money to pay for the job to be done.

Burger King latest corporation to pull out of UK work experience program

Filed under: Britain, Bureaucracy, Economics, Government — Tags: , , , , , — Nicholas @ 10:14

The British government’s work experience program for unemployed would-be workers loses another employer:

The fast food giant said it had decided to cease its involvement in the Get Britain Working programme because of recent concerns expressed by the public.

The scheme has attracted growing criticism in recent weeks with opponents describing it as a form of slave labour because young people worked for nothing, while keeping their benefits.

Burger King said it had registered for the programme six weeks ago intending to take on young people for work experience at its Slough headquarters, but had not recruited anyone.

It sounds like the program was well intended — allowing people without work experience to at least have something to put down on a resumé — but fails the PR test because the corporation is seen as “getting work for nothing”. And, without a doubt, some corporations will use the program in exactly that way. Despite that, on balance it seems that the potential benefit to young entrants to the work force is greater than the actual benefit to the companies that get that “free labour”.

The value of that “free labour” may well be lower than the costs to the employer for training them: new employees with no marketable skills are not the bonanza of profit that some seem to think that they are. Some people I worked with early in my working life could be proven to be a net loss for months after hiring …

February 24, 2012

Argentina, like China, publishes unreliable economic statistics

Filed under: Americas, Economics, Government, Media — Tags: , , — Nicholas @ 11:27

The Economist has finally decided to stop using “official” economic statistics from Argentina:

Imagine a world without statistics. Governments would fumble in the dark, investors would waste money and electorates would struggle to hold their political leaders to account. This is why The Economist publishes more than 1,000 figures each week, on matters such as output, prices and jobs, from a host of countries. We cannot be sure that all these figures are trustworthy. Statistical offices vary in their technical sophistication and ability to resist political pressure. China’s numbers, for example, can be dodgy; Greece underreported its deficit, with disastrous consequences. But on the whole government statisticians arrive at their figures in good faith.

There is one glaring exception. Since 2007 Argentina’s government has published inflation figures that almost nobody believes. These show prices as having risen by between 5% and 11% a year. Independent economists, provincial statistical offices and surveys of inflation expectations have all put the rate at more than double the official number. The government has often granted unions pay rises of that order.

What seems to have started as a desire to avoid bad headlines in a country with a history of hyperinflation has led to the debasement of INDEC, once one of Latin America’s best statistical offices. Its premises are now plastered with posters supporting the president, Cristina Fernández de Kirchner. Independent-minded staff were replaced by self-described “Cristinistas”. In an extraordinary abuse of power by a democratic government, independent economists have been forced to stop publishing their own estimates of inflation by fines and threats of prosecution. Misreported prices have cheated holders of inflation-linked bonds out of billions of dollars.

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