March 31 2009

 

Fiscal stimulus


Word reaches Old Grumpy that Cllr John Allen-Mirehouse used the opportunity provided by a recent meeting of the economy scrutiny committee to have a pop at my attempt to persuade members to use £1 million of the county council's massive £30+ million reserves to limit the increase in council tax to 1% rather than the 4.2% proposed by the ruling Independent Political (sic) Group.
Cllr Allen-Mirehouse was attending the committee in the role of cabinet member with responsibility for economic development and regeneration (honest!).
Now, having once spent some time studying the subject at university, I have nothing to fear from crossing economic swords with Cllr Allen-Mirehouse.
The point I was trying to put across was that, left in the hands of the people, this £1 million would more benefit the Pembrokeshire economy than sitting in some bank account accumulating what are, under present monetary conditions, tiny amounts of interest.
I think it was Keynes who said that in times of recession a shilling saved is an hour's unemployment for a labourer.
Wages have risen considerably since the 1930s, but the principle remains the same.
From what the Leader said, I formed the impression that it was not dipping into the reserves, per se, that was "reckless", but the timing.
As I understood his argument, these reserves are needed for the rainy days ahead when central government cuts its grant to local authorities to help pay for the bale out of the banks and other excesses.
My argument is that it best to put up the umbrella when it starts to rain rather than waiting until you're half soaked through.
Of course, it all depends on who the rain is falling.
At present it is falling on those who are losing their jobs and having their homes repossessed.
In two or three years time we will be in the run-up to the local elections and it will be threatening the jobs of those whose sole claim fame is the lowest council tax in Wales.
We will see then if raiding the reserves is still considered to be reckless.
Another thing to bear in mind is that £1 million injected into the local economy today will provide a greater stimulus than the same amount in two or three years time.
Prevention is better than cure; a stitch in time saves nine; and all that.

Spin

By a happy coincidence, last week's Western Telegraph carried a long advertorial about the economic benefits of the Pembrokeshire Lottery, which, it was claimed, had made £2.8 million in interest-free loans to local businesses resulting in the "creation" of 1,100 jobs.
It even carried a comment from the Leader of Pembrokeshire County Council singing the praises of the lottery's job creating activities..
It occurred to Old Grumpy that, pro rata, investing £1 million from the county council's reserves would help 392 people into work.
And, for a mere £5 million, the county's unemployment problems could be consigned to the dustbin of history.
However, before someone in authority accuses me of recklessness advocating spending £5 million of the council's reserves, I should say that I am sceptical about the claims of the job-creating industry.
As I have said before, if these jobs were anything but spin, the people of Pembrokeshire would have three jobs each.
And the Pembrokeshire lottery is no exception.
Helpfully, the Pembrokeshire Lottery's website gives chapter and verse about the companies it has helped and the number of jobs created http://www.pembrokeshirelottery.co.uk/business.asp
The first trick is to treat both full-time and part-time jobs as if they were the same.
Clearly, this isn't the case because a part-time job could be four or 30 hours per week.
The honest way to present this is to convert part-time jobs to full-time equivalents.
Secondly, there is the creative use of the word "created" which tends to include all the jobs - new and existing - in the assisted company.
This difficulty is sometimes avoided by reference to jobs "created and safeguarded" or "created and supported" but this only shifts the focus of the deception because unless the precise number of each is known it is impossible to come to any conclusion as to whether the grant/loan provides value for money.
Lastly, no information is given about the permanence, or otherwise, of these jobs.
How many of them still exist?
Old Grumpy notices that the list includes the aptly named All Purpose Finance Ltd which seems to have had a special talent for extracting cash from job creating agencies (Grantrepreneurs) and no doubt the 12 jobs still appear in some long-forgotten data base in PCC and the Welsh Assembly.

Sin and cynicism


The Archbishop of Canterbury has warned of the dangers of lapsing into cynicism in the light of the ongoing scandal surrounding MP's expenses.
Scepticism is healthy, says Dr Williams, but cynicism is corrosive.
I must admit that I have some difficulty in avoiding the cynical view.
But is that the fault of the cynic or those whose lies foster his cynicism?
A sceptic is someone who doesn't believe everything he's told; a cynic is someone who doesn't believe anything he's told.
I am proud to be a sceptic, and I hope that I only become a cynic with good cause.
To take a hypothetical example: as a humanist, I am sceptical about Dr Williams' claims about the existence of God and the afterlife.
However, I am sure he genuinely believes what he says about the deity.
If it was to come out that he shared my view about the afterlife, but kept up the pretence of believing in it to enhance his career, a little cynicism would surely be in order.
But in that case my cynicism would be founded on his own cynical disregard for the truth.
It is difficult to think what other reaction someone should have to those, particularly politicians who have power over us, who set out to deliberately mislead.


Less spin

 

With the world recession in full swing, we hear less and less these days about plans to make things even worse by saddling our economies with ultra-expensive and unreliable renewable energy.
And it is not just the cost of wind and wave power that seems to be the problem because, according to the Director of Earth Sciences at the University of Osaka, Professor Imata Kindemiki, extracting large amounts of energy from the earth's atmosphere and oceans could bring about changes in weather patterns that would dwarf the predicted effects of carbon dioxide-induced global warming.
In a recent research paper, Professor Kindemiki also warns that large numbers of wind turbines and wave machines could have a dramatic effect on climate by slowing down the earth's rotation in line with Newton's Third Law (every action has an equal and opposite reaction).
Just to demonstrate how complex and contentious climate change can be, the head of the Norwegian Institute of Oceanography, Dr Olaf Allott, has recently published a paper which shows that the increase in global temperature and the consequent melting of the polar ice caps will also slow down the earth's rotation.
Dr Allott says that melting ice will transfer water from the polar regions to the lower latitudes where the increase in the earth's circumference caused by higher sea levels will have a profound influence on the earth's angular momentum.
And, by virtue of the Law of Conservation of Angular Momentum - the phenomenon that allows ice-skaters to alter their rate of spin by extending and retracting their arms - this increase in the circumference, particularly at the equator, will result in a slowing of the earth's rotation.
Despite their differences, both scientists point out that neither of these effects will alter the duration of earth's orbit round the sun, so longer days will mean fewer of them.
Both have predicted that, by 2030, a year could be a whole day shorter.
Which day should be dropped from the calendar?
April 1, and all the attendant silliness, must be a strong contender.

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