Sadiq Khan’s Monstrous Decision On Uber

The problem with Sadiq Khan’s – and sure, it’s TfL but let’s not be stupid about the Mayor’s influence or not – refusal to renew Uber’s licence in London isn’t the triviality of the objection, it’s that it’s not even Khan that should be making the decision.

The objection itself is trivial of course. It’s that some 45 drivers faked their ID to get onto the system and provide rides. That’s out of 45,000 rivers in Uber’s system.…

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The Unbearable Contradictions Of Monetary Policy

An interesting little note from Ambrose Evans Pritchard. There are two different things we’re trying to achieve at present. We’d like to have loose monetary policy, thus quantitative easing. We’d also like the banks to not fall over, thus higher capital requirements and restrictions upon lending. Yet, as we all know, 97% of wide money – credit that is – is created by the banking system itself. Thus, if we restrict the ability of banks to issue credit through capital requirements and the rest we do rather restrict our ability to have loose monetary policy through QE:

Europe’s banks will have to raise up to €400bn (£343bn) of fresh capital or slash lending to meet the draconian demands of Basel III regulations, risking an investment crunch across the region and a second decade of economic stagnation.

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WeWork And A Fundamental Misunderstanding Of Capitalism

I’ll agree that WeWork wasn’t the brightest idea ever. Well, except perhaps for Neumann. But that doesn’t excuse some smug git in New York getting the very basics of capitalism wrong:

The WeWork story is now a disturbingly familiar one, in an era when the economics of major start-ups can seem as surreal and ludicrous as whatever happens in the White House. Capitalism has always been a deeply flawed way of arranging a society, but big business, until around the 21st century, was at least bound by a few basic laws of monetary gravity.

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The Terrors Of Price Comparison Websites

This is one of the less strong complaints about the current body politic. Advertising costs money, so it does:

Up to a third of drivers’ insurance costs go on secret commissions charged by price comparison websites, which can be as much as £160 per policy.

These websites charge insurers to display their policies to consumers. Most insurers have little choice but to pay up, as the majority of car insurance is bought through price checking companies.

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It’s Microsaving That Matters, Not Microcredit

The beginning of this pieces is a little elision around a political point. Yunus and Grameen are not flavour of the month in current Bangladeshi political circles. A certain amount of boots biggism perhaps. But after the talking down of microcredit from the PM there’s an important point to get over:

But what is the specific thing that micro-credit experimentation taught us? The poor might like a bit of credit, and they’ll benefit a bit perhaps.

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The UK’s Credit Outlook Was Cut – Don’t Panic!

Moody’s cut the UK’s credit outlook – that means not the rating, but which direction the rating might change in next time they have a look – rececently. It being important to understand what this means.

Not a lot.

Sovereign credit ratings aren’t paid for, they’re based on no private information. That means that the information they’re based on must be public information.

Which brings us to the efficient markets hypothesis. Which, as everyone other than the Senior Lecturer knows, in its weak form so universally agreed upon that it’s a tautology.…

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It’s True, The iPhone Increases The US Trade Deficit – But How?

It’s entirely true that the iPhone, Apple’s practice of building it in China, increases the US trade deficit. But how and by how much is something worth examining at a greater level of detail. The answer being that it’s very much less than you think:

How the iPhone widens the US trade deficit with China: The case of the iPhone X
Yuqing Xing 11 November 2019

In order to pursue ‘fair trade’, the Trump administration has imposed a punitive 25% tariff on $250 billion’s worth of Chinese goods.…

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If Only Robert Reich Knew Anything

We’re told that American capitalism is fixed:

You might say the $110bn man deserves this because he founded and built Amazon. But Amazon is a monopolist with nearly 50% of all e-commerce retail sales in America, and e-commerce is one of the biggest sectors of retail sales. In addition, Amazon’s business is protected by a slew of patents granted by the US government.

50% does not make you a monopolist. Further, it’s about 38%.…

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It’s Free Trade, Not Tariff Walls, That Drives Excellence And Competitiveness

It’s competition that drives up productivity – why bother to do that hard work if you don’t have to? Foreign trade is simply that competition from foreigners that similarly drives up productivity. We have historical evidence of this too:

Early 20th century American exceptionalism: Production, trade and diffusion of the automobile
Dong Cheng, Mario Crucini, Hyunseung Oh, Hakan Yilmazkuday 08 November 2019

As the current narrative goes, the loss of US manufacturing jobs is due to competition from China and one way to get the jobs back is by running tariffs up the proverbial flagpole.…

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Owen Jones Doesn’t Understand Steve Jobs And The iPhone

Owen Jones insists that billionaires simply shouldn’t exist. Because for everyone that does millions have been deprived of the value they create.

Dan Riffle, senior adviser to Ocasio-Cortez, says every billionaire is a policy failure. He’s right. A billionaire is someone who has concentrated wealth that is collectively created by the hard work and graft of others. A significant portion have inherited their wealth. But even the majority who haven’t are not “self-made” by any accurate use of that term.

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