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Monday, 19 March 2012

Stupid times 5

One of the less flattering comments about George Osborne comes from Professor Laurence W. B. Brockliss, of Magdalen College, Oxford, courtesy of a daughter who studied there a few years back.  I cannot vouch for Professor Brockliss' impartiality on the subject (he is by all accounts a bit of a lefty), but his statement is unequivocal:  George Osborne was by far the most stupid person he had ever tutored.

And based on Osborne's pronouncements, that is not surprising.  Magdalen is one of the more academic colleges at one of the top three universities in the country, but even so, Osborne is living proof that that is no guarantee of smartness.

Stupid #1: Last week, we had Osborne's announcement that he was going to investigate the possibility of issuing long term bonds because of the UK's currently low cost of borrowing.  Elementary schoolboy mistake, George.  Or rather the sort of mistake that a dim banker makes at the lunch break on his first day of training on interest rate swaps and the yield curve.  Short term yields are low, but longer term zero coupon yields tend back towards historic norms and par trading bond yields will be an arithmetic blend of the two; except that as there is no market in 100 year bonds, there will be a premium to pay for the lack of liquidity.  If you really think you can outsmart the yield curve, you are in the wrong business.

Stupid #2: Then we had the idea that Civil Service pay should not necessarily be fixed at national levels (I can't disagree with that), but that it should be fixed at levels comparable to pay in the private sector (dumb, dumb, dumb).  There is of course very little employment in the private sector in many parts of the country, with the inevitable result that any pay comparison would drive down public sector pay and drive the more able public sector workers into the more prosperous parts of the country.  Do we set the pay of nuclear scientists at Sizewell according to the average Suffolk agricultural wage or the pay of brain surgeons by reference to the pay of FX traders or glass factory workers depending on whether they live in Mayfair or St Helens?  Thankfully no.

Does he think that MP's would accept their pay being calculated on the same basis?  Of course they wouldn't, but here is an alternative: pay MP's less in safer seats and fix their pay from the time that they enter parliament.

Stupid #3:  A still unresolved point, but as it stands it still looks as though a family with one wage earners on £43,000 will not receive any family allowances but will contribute to the allowances of of a married couple who may earn a combined salary of more than £80,000.

Stupid #4: The government is planning to privatise part of the road network - not a bad idea in itself if done properly, but Osborne’s preference is for the road network to be handed over to private companies on long leases. He thinks that means the government can avoid the word “privatisation”. Yeah, sure thing George, just like Eaton Square is on 99 year leases from the Duke of Westminster, so it doesn't really belong to the leaseholder.  Nobody is going to be fooled by that, nor by the enormous risk the government takes in getting the roads back in an appropriate condition at the end of the lease term.

Stupid #5: The Conservatives made the same mistake over rail privatisation, and they will probably do the same again, but for the really stupid comment of the week, year or maybe decade, we have Osborne's question:

"Why is it that other infrastructure - for example water - is funded by private sector capital through privately owned, independently regulated, utilities... but roads in Britain call on the public finances for funding?"

Why? You really want to know why?

I guess that it has something to do with the £40 billion (I'll write that out in big numbers: £40,000,000,000.00) that we pay every year in fuel and vehicle excise duties.

Let me ask a question back: How do you get to be Chancellor when you are so unbelievably stupid?

1 comment:

Sean said...


There is a good freakonomics type book called "why England lose"

Basically it comes to the conclusion that the backgrounds off the players (mainly working class) do not add up to a good enough "wisdom of crowds" bunch off players. This might change soon as football in England has become much more middle class.

Now there is another group who display the same set of profile failures and they hang out at the Westminster stadium.

Our MPs are mainly either spads (career politicos) lawyers (enough said) and Jounos..

How many have degrees or experience in engineering or science? Very very few.

Professor Laurence W. B. Brockliss I am afraid is part of the problem. The so called social sciences have run riot. It was not just banks that had formed a monopoly but social science academia too.

Did any off them think to get a few mathematics bods in to test some of their paradigms?

The fact is material hard science works on trial and error, social science does not. And it does matter.

Taleb said last week "A system just does not have to survive a crisis it has to improve because of it"

Now that is real science, I bet they are not teaching that at Oxford.