The Company Store

Money. It’s a funny old thing isn’t it? In an ideal world we would all have work which suited us, paid enough to allow us to spend our non-working time as we wished and have enough left over to fund the nicer things in life. Free, world-class healthcare for all, decent roads, affordable public transport , a legal system accessible and fair to everybody and an education system which produced balanced, thoughtful, useful future contributors to this blissful status quo, whether academically gifted or not.

But we don’t live in such a world and money, well it’s a tricky blighter, isn’t it? Where does it come from, for a start? And who does it ultimately belong to? This, I believe was the crack into which the otherwise sane and grounded Labour MP, Jess Philips, inserted her crowbar in a late entry to the most stupid tweet of the year competition.

Now, such a statement is not only factually incorrect in so many ways, it is also laughably naïve and ordinarily, you would expect the masses to descend, hooting and laughing, but an alarming number of players leapt in to defend her. She was trying to say – I generously think – that we all put in and we all take out and that it is entirely fair that some put in much more than others and some, deservedly, take out more, but that only works in the imaginary world of the first paragraph. David Vance challenged her assertion and was offered this myopic explanation by somebody else who clearly doesn’t grasp his brief:

It is an entirely rosy view of socialist style economics whereby the failings are hidden behind flowery words and peace and love and all the stuff you just can’t make a profit on, yet sound like the sort of lovely things we should all say to each other. But here’s the thing: If all that you receive is paid from the state coffers – not just benefit claimants but every single public sector employee – including MPs like Jess – then anything you pay back out of that makes literally zero contribution to the coffers.

Let’s do that in simple numbers. I give you a hundred pounds, you give me £30 back in tax and National Insurance, then after you spend the rest I get back another £14 in VAT. You have contributed literally nothing to my stash of cash (I’m £56 down) but Jess and Jonathan will thank you for your £44 contribution. This is the Ponzi system on which our society exists, but we don’t seem academically equipped to challenge; ‘we all pay tax’, my arse.

The thread carried on into the new year with this lucid but incorrect appraisal by the newly minted economist Jess and my reply to it – much as outlined above - attracted all the opprobrium you would expect from the similarly deluded. 

 

I particularly enjoyed Mark’s contribution, for which I am truly grateful – it can be tricky keeping up the small minded prick persona.

Now, I quite like Jess Phillips. She is down to earth, clearly concerned and engaged and is absolutely a force for good in the world. But the politics she espouses are where it all grinds to a shuddering halt. Labour – under any leader – is a recipe for economic cataclysm. Begin pretending that we are all contributors and it is but a short step to conclude we must also all be entitled to receive. Which brings us back to this: where does the money actually come from and whose does it belong to, really? Go on, ask yourself...

The ones who got rich from the gold rush were those who sold blankets and shovels. In many economies especially that of the EU-run UK, the appearance of success is created by churn, a steady recirculating of cash. We only possess it for a while and we only have the illusion of control over it. So, unless you have savings - real, they-can’t-touch-it-or-devalue-it savings - the reality is that the company store owns it all; in the biggest gamble of your life, the house always wins. It has taken me over forty years of full-time work to finally appreciate the truism that work is, indeed, its own reward. I consider myself one of the lucky ones.

Liars, Damned Liars and Statisticians

Chris Huhne is a liar. It’s a matter of record, as it is for many an MP, but even a jail sentence hasn’t much hampered Mr Huhne’s ability to profit personally from his continuing political career. And if there was any such thing as religious justice (Hint: There isn’t) Tony Blair would eventually become (literally) a damned liar despite the riches he denies he has accumulated from spreading his tactical and strategic untruths, half-truths… and downright statistics. But all the lies of politicians through the ages are pale in comparison with those of their enablers, the statisticians.

In the news right now:  Employment is up but productivity is down, but more people are in work, yet pay hasn’t risen in line with inflation, but that’s okay because both unemployment and employment are at record levels in the right directions… but people are – I forget, is it worse off, or better off? And how would we know? The answer is, we don’t; we can’t. But that doesn’t stop the headline makers from stuffing column inches with numbers explained by incomprehensible vox-astutis soundbites.

Take me. Today I’m better off than I was last year, but in 2012 I was better off still, yet the ‘most-bestest-off’ I ever managed to be was in 1982. Then I joined the ranks of homeowners and profited… nowhere near as well as the media would have you believe I should have. Ten years later I was earning plenty more in real terms than when I was at my very-bestest-off, but my house had nowhere near kept up with the reported mahoosive rises in, it seemed, every other part of the country. So was I better off, or worse off? It’s hard to tell; tricky stuff this money.

One thing is for sure though, comparing your income with that of others is a poor indicator of, well, poverty. One man’s penury is another man’s self-reliance and a fortune for most of us might be squandered in a blur of immoderate hedonism by others. Nobody is ‘the norm’ so comparisons against that norm are pointless… and statisticians know this. It’s why they never get found out. A statistician can sell the same numbers to multiple buyers for fat fees and never be asked to justify those numbers because, knowing that the rest of us understand even less about mathematics than they do, the ‘facts’ that statistical surveys reveal can be bent to any shape you desire.

And it’s not just money. Thus a new car factory in Sunderland can spell variously: prosperity and much-needed jobs for the region, back-hand deals in smoky rooms, denial of employment in another European country (which these days is racism and therefore hateful and to be labelled fascism) more GDP, less GDP, a skills shortage, a skills surplus, an immigration problem, white flight, earthquakes, tornadoes, or god’s holy wrath, all depending on who is spinning the news and why.

The unofficial Law of Unintended Consequences and the application of Chaos Theory tells us that if a butterfly flaps its wings in the Stock Exchange, somebody wins the lottery in Panama and a Chinese fella gets laid off from a counterfeiting factory three miles outside Guangzhou. To a statistician this is solid gold – cut liberally with bullshit it can be sold for big bucks to dodgy dealers who will then further adulterate it and push it on street corners to the recreational stats-junky market with the cry: "Daily Mirror! Daily Mail!" They say that 20% of school-leavers in Britain today are functionally illiterate. They’re the lucky ones.

It's ALL about the money - ker-ching, ker-ching

While everybody is banging on about the living wage it’s convenient to forget that money is an abstract, constructed by man in order to trade. It’s also probably the closest thing we've got to an accurate measure of exactly what somebody is worth – morally fair or not - to the society in which they live.

We each accrue what we are able, by whatever means we have at our disposal. So, if increasing numbers of people who go out to work are unable to live within their means it can only mean that our society does not value their labours. Let’s look at a few numbers… (Where’s Carol Vorderman when you need her?) 

The proposed living wage, outside London, is calculated at £7.45 per hour, presumably based on a 37.5 hour EU working time directive week. That’s a little over £14,500 per year. Take off Income Tax and National Insurance and you’re left with around £11,500 or £220 a week. You’re not worth a whole lot, are you? And after a rise in wages pushes up the price of goods – because it’s the economy, stupid – you’ll be worth even less. 

Contrast that with a family of non-workers having their benefits ‘ruthlessly’ capped by the Nasty, Nasty Tories at a mere £26,500 or £500 a week. So, let me get this straight… in effect the Labour party are opposing any reduction in benefits received while pushing for workers to survive on less than half the proposed reduced benefit ceiling? 

And then of course, a disproportionate amount of government spending goes to stopping some welfare-dependent families from eating their own kids, succumbing to various addictions, spreading disease and making the whole country look untidy. No wonder they think working is a mug’s game. It doesn't seem to make sense, does it? But then, nothing does in Socialism. 

And when all the social spending doesn't work – and it rarely seems to – we take them off benefits and bang them up in jail. Well, if it costs £47,000 a year to keep a man in prison that means they accrue some £900 a week of national wealth merely to keep them off the streets. Crime don't pay? 

Following, so far? A quick summary then, of your net worth to the country as it stands: 

• Honest worker = £220 p.w.
• Unemployable layabout = £500 p.w.
• Nasty thieving bastard = £900 p.w.

It seems pretty clear to me that this is arse-about-face and it has to change. LESS should be spent on the non-productive and the unwanted. Prison should be hard and cheap – lock ‘em up & make ‘em work to survive. Benefits should be bloody difficult to come by unless you’re genuinely needy. And work should pay enough to live a reasonable life. Who can possibly argue that this isn't how it should be?

I've got my eye on you... one false move...

But there’s no way we’re going to be able to get to that position with a population fast approaching 70 million. So, unless anybody has a better answer than my oft-proposed cull, I’ll be away to ready the snipers.

The Big Bonus

A parliamentary inquiry has discovered the secrets of the universe – the Big Bonus, the so-called God Principle.

The Big Bonus is an elementary incentive within the standard model of incentive economics. On 4 July 2012, Bob Diamond announced the formal confirmation that an incentive "consistent with the Big Bonus… exists with a very high likelihood of 99.99994%". However, MPs still need to verify that it is indeed the expected bonus and not some other new incentive.

The existence of the Big Bonus was predicted almost 50 years ago to explain how bankers manage to acquire so much mass when other particles have very little. ‘Mass’ is, of course, bankers speak for ‘money’. Mr Diamond used the rather simplistic analogy of the Higgs boson to explain The God Principle. This principle describes why bankers need to acquire ‘mass’ in such significant quantities in order to be allowed to even exist within their own universe.

Of course, ordinary people can’t be expected to understand the workings of these mysterious incentives, so here’s a useful cut out and keep guide:

And that, my friends is the secret - when you haven't any coal in the stove and you freeze in the winter and you curse on the wind at your fate. When you haven't any shoes on your feet and your coat's thin as paper and you look thirty pounds underweight - the simple secret of the Mark or Yen, or buck or pound, that makes that clinking clanking sound, that makes the world go round!