Ohmy

This post is going to be in defence of Tim Worstall. Andrew Ian Dodge has said that our Man:

has a dress sense right out of Starsky & Hutch

That's right. Andrew Ian Dodge is commenting on someone else's dress sense. What can you say?

The Daily Ablution

This post, and the comments to it, and the one below, and the comments to that, are the sort of posts that make you feel slightly in need of a wash after reading them. As exciting as Scott's living arrangements are, you really don't need that kind of thing.

Friday 21st April to Tuesday 25th April

Miles behind, but luckily Tim is in the air and so can't blog...er can only blog once. Well anyway, this post officially catches us up.

Monday 17th, Tuesday 18th, Wednesday 19th, Thursday 20th April

Not a great deal to report. In the post on Melissa Benn's piece Tim declares that it is obviously not interesting as it has no comments, when in fact it has lots of comments. Readers might wonder why this is worth Watching - we all make mistakes after all. But I think it is important, as it illustrates what is wrong with so much blogging - the over-the-top attacks based on very little fact-checking. In any other medium, for instance the pages of a national newpaper, no-one would be quite so rude about another person without making some basic checks, which clearly Tim didn't in this case.

Friday 14th to Sunday 16th April

The piece of which a shorter description would be "Jim Glass is Right", sorry, "Jim Glass is right", is very Timesque. Tim takes issue with complaints that the projected returns on privatising social security were incompatible with US economic growth projections, as apparently he believes that no-one, except Jim Glass, was aware that companies derived income from overseas operations. He then quotes a statistic that 60% of US companies sales derive from home operations, and apparently all of that means "Jim Glass is right".

WW will restrict ourselves to a few comments:

1. The 60% figure seems too low - the Economist run a similar article in February also quoting Patrick Artus's figures and he said 75%.
2. We don't recall Krugman, De Long or Baker saying that US companies did not have overseas operations, or that US consumers did not buy foreign shares, just that it was not likely.
3. Current figures bear that out. There is some slight issue with apples and oranges in the following sets of figures, but it gives some idea of the magnitude. Profits of US companies in 2005 were $1,146 bn, of which overseas operations and US holdings of foreign shares added $334bn bn. However there were also outflows of $128bn, making a net equity addition of $206bn, ie under 20% of total profits. It's important to note here that around 50% of these profits come from Europe, which is not demographically unchallenged itself.
4. Furthermore those aren't the only inflows and outflows. In 2005 US GDP was 12,487 bn, and then there was 508bn of income from abroad and 474 bn of income flowing overseas. So the net earnings from income abroad was just 34 bn. In the context of US GDP then this is about 1/4 of 1%. If you think about it in terms of equivalent people then that would be about 600,000. I think there is something like 40m retired US citizens, a number that is rising quickly. So even if they got all the returns then it would mean their incomes were about 2% higher than they would otherwise be).
5. But can the situation change? Jim Glass envisages people sending their savings directly to Chinese mutual funds, presumably when they exist. However there are many signs that the situation will worsen. The current account is obviously the major thing to note here. Indeed the fact the US has a surplus on overseas income at all is somewhat of a mystery, and in this excellent summary Barry Eichengreen looks at the arguments. The two most commonly heard are in conflict - and as Eichengreen says there is apparently no reason to believe that the US can continue earning higher returns on its investments than it pays to overseas holders. Why? Because Markets Work.

Broadly speaking the issue here, as it has been in many of these discussions over the years, is a fallacy of composition. Because we can diversify our portfolios (or at least diversify our portfolios of quoted company shares, which is not the same thing) and even get some income from abroad, it is believed that everyone can do it, and perhaps worse, that everyone is doing it.

Wednesday 12th April and Thursday 13th

Not much to report on, except perhaps the piece on Doctors, where Tim bizarrely takes on the position of defending a Statist Monopoly, with Anthony Cox in the comments apparently of the view that what he wants should apply to everyone else.

Monday 27th March and Tuesday 28th March

I'd forgotten that I'd promised to look at other right-wing pundits than Tim, and specifically the lunacy that is the Daily Ablution. In a post on global warming he approving quotes this piece from Bob Carter, which "incidentally points out that there's been exactly zero global temperature rise since 1998".

And Scott is right, it does. Indeed the title is "There IS a problem with global warming... it stopped in 1998". Now it's not entirely clear if Bob Carter did choose this title. I doubt he did as its indefensible. He does say, however:

Consider the simple fact, drawn from the official temperature records of the
Climate Research Unit at the University of East Anglia, that for the years
1998-2005 global average temperature did not increase (there was actually a
slight decrease, though not at a rate that differs significantly from zero).

Now if this had been in the Guardian, or said by someone left-wing, Scott would have jumped on it like a flash. As it's not, he's not. It's totally unsupported by the Climate Research Unit's work. It's true only for certain data, and only because 1998 was a very warm year. Even on this data it would be like earning £40k a year in 1998, and then £20k in 2002, £25k in 2003, £30k in 2004 and £35k in 2005, and saying that your income was on a downwards trend.

Friday 7th to Sunday 9th

Much written, not much Watching. The commenters have done their jobs however, so the only line I'll take issue with is this one:

Who owns it makes no difference to whether the industry is in Britain, of course.

The "of course" is classic Worstall, usually said after he's criticised Polly Tonybee for something she has said that later turns out to be right. The "no difference" is far too strong, to quote Lance Knobel, "there is a significant amount of research showing it does matter. Over time, high value-added activity tends to concentrate in country of ownership".

I'd also rather question the piece on oil. Tim appears to believe the main market-distorting thing in oil now are Chinese subsidies, while the other Tim in the comments (who works in oil, I think, or some energy field) appears to believe that there was a totally free market in oil before OPEC.

Update: The piece on David Cameron's way to make the world a better place makes one of the points we were discussing below - the absurdity that is 'fisking'. Tim knows, and everyone else knows, that when David Cameron says 'take the bus when you can', he means, 'instead of driving'. Tim has to pretend not to realise that to make his point. Why oh why?

Thursday April 6th

The only post that stands out is the one on the journalists complaining about the Home Office deluging them with information. The comments say it all really - Tim's idea that bloggers can do it all for the journalists for a small fee is bloggocks. Can you imagine a broadsheet journalist waiting for someone to dig up information for them, and instead getting hundreds of Scott Burgess-wannabees sending back an hysterically over-the-top 'fisking' of whatever press release they've been given and believing it to be the epitome of cool, analytical, thought?

April 4th and April 5th

All quiet on the Worstall front*.

* I don't mean there have been no posts , just nothing particularly Watchable.

SPECIAL FEATURE

Yes, I've gone outside my comfort zone of Tim's site, and am delivering Quality Watching on the Guardian's newish Comment is Free site. Specifically this post, in which Tim, who gets rather uppity when people claim he is 'right-wing', leaps into attack the poster for a party support he doesn't have.

Monday 3rd April

As one might expect from where it is, Tim's column at Tech Central Station isn't very good. Essentially he wants to explain why economists are 'right-wing' or 'classically liberal'. His conclusion, "Economists are right-wing because, on economics, the Right is right".

Why? Because:

In other words, if you study a science then it can't really be all that much of a surprise that you learn something of that science. And if economics is indeed a science then there are such things as correct answers, ones that will be recognized by all practitioners of that very same science.

So what is the best example of a 'correct answer' that this 'science' gives us? The minimum wage, which apparently economists don't believe in, and liberals do. Tim notes:

the essential point being that rises in the minimum wage almost certainly have a detrimental effect on the incomes of those who receive them, for if you raise the price of something then people will buy less of it.

Minimum wages. Bit of a let-down, eh? For a start there are loads of economists, particularly outside the US, who do support minimum wages. Second, this idea of if you raise the price of something then people will buy less of it is sounds much like those famed "Laws of Supply And Demand", which get more press coverage than the Laws of Gravity, though no-one seems to know what they actually are. It would be equally as obviousin this example to assert that if you raise the salary of someone you'll get a better quality worker. It's not trite to note that workers aren't pieces of coal, and their pay is not irrelevant to thir work. Indeed if raising the price of something means people buy less of it, and in the case of labour this means that 'it almost certainly has a detrimental effect on the incomes of those who receive it', then it's been a pretty desperate last 20 years for CEOs in the United States. Which obviously it hasn't.

Friday 31st March, April Fool's Day, Sunday 2nd March

So I'm already getting behind. Is this the beginning of the end? Luckily - if not coincidentally - there aren't any posts that seem necessary of a Watch. I'm a bit surprised that Tim is worried about not being let into America because he is a journalist; I think he'll be ok. He criticises the Observer's demand that airlines are taxed VAT on their fuel, noting that newspapers don't pay VAT. He'd have perhaps been better to note that trains do not pay VAT either, but I'm not here to do his job for him.

Otherwise let's hope next week brings us something to get this site back on track - there should be a Polly Tonybee post at the very least.