A long time in politics

Early this week, the bishops were telling the government not to cap child benefit (src).

"Right on," said the left, "It's great to have bishops who stand up for what they believe in and are willing to speak up against public opinion."

"Shut up," said the right, "It's not your place and the public are against you."

"Can't you lot quit meddling in policy and talk about Jesus?" I wondered.

Today, the Archbishop of York tells the government not to legalise gay marriage (src).

"Right on," say the right, "It's great to have bishops who stand up for what they believe in and are willing to speak up against public opinion."

"Shut up," say the left, "It's not your place and the public are against you."

"Can't you lot quit meddling in policy and talk about Jesus?" I wonder.

What is a question?

The BBC reports that Alex Turbot Salmond knows what question he would like to ask:

The SNP leader said Scots would be asked: "Do you agree that Scotland should be an independent country?" in a ballot which he wants to hold in 2014. (src)

This is, of course, an immediate contender for a Rentoul: a Question to which the Answer is No. Indeed, like Lady Thatcher to another question, I would be inclined to reply, No, No, No.

(No man is an island, entire of itself -- or so we are told. But ask the SNP, and apparently this island is able to break a piece of itself off without damage to the whole. As an Englishman brought up in Wales, I have a firm appreciation of the benefits of the Union, and would mourn its passing.)

But apart from that, this question seems to me a prime candidate for a Formal Raspberry from the Electoral Commission, which Mr Mackerel Salmond says could oversee the referendum. For it contains an unnecessary frame around the question, which could far more simply and less suggestively be posed thus:

Should Scotland be an independent country?

I would be surprised, and not a little disgusted, if the Commission let this first, highly leading, proposal pass.

Is there too much money in the economy?

This could, of course, be one of John Rentoul's famous Questions to which the Answer is No (link). Indeed, one of the redeeming features which partially prevents this is that I am not, and have neither a desire nor an intention to be, a writer for the Daily Mail.

However, this striking idea is suggested by the fact that the Treasury recently auctioned £700mn of fixed-rate bonds at a real interest rate of -0.116% (src). Of course this should be heavily caveated: not least, there is an assumption that inflation doesn't come down from its current level over the lifetime of the 35-year bond. If it does stay significantly lower for a prolonged period, then the interest rate will turn out to be positive in real terms, and it is quite possible that people in the bond markets are expecting inflation to come down eventually. [EDIT: I should have known better than to trust financial journalists. This was an index-linked bond.]

However, it does suggest that the Government's current economic strategy needs some fine-tuning. This bond issue of £700mn is several hundred times smaller than the Bank of England's total quantitative easing, which stands currently at £275bn. But it is beginning to look even more as though the Government is borrowing money on the markets and then putting the money back into the hands of its lenders, only to borrow it once more. It would be silly to do this and have to pay interest for the privilege: but it must be madness for the Government to get paid.

Yet this is the effect of policy: money gets put into the bond markets, but it doesn't even leave those markets. Instead, traders are now just queuing up to put the money back with the Government. So we return to the original question: is there too much money in the economy? Perhaps not; but may there be too much in the bond markets?

If this is true, then it suggests that the central bankers need to look at the structure of policy, rather than putting blind faith in the aggregates. Already there have been murmurings about a small-scale 'consumer stimulus' which might be achieved from redeeming the War Loan: this is mostly held by retail investors, who would be more likely to take some of the windfall and spend it. The money would not sit in the bond markets but would go out and do something different. [1]

Quantitative easing was the weapon of choice when interest rates had hit the zero bound. To push rates any lower would have been, in the central bankers' phrase, 'pushing on a string'. But could it be beginning to look as though QE, too, has hit its buffers and the central bankers are once again pushing on a piece of string?

[1] I'm not altogether convinced by this story, though I can see where it's coming from. However, I am convinced that the structure of policy is at least as important as the aggregates. One of the things which has frustrated me about QE is that central bankers seem to assume monetary velocity is effectively infinite, when we know full well it is not.

Predictable competition time!

Easy rules: below the line, guess the newspaper and guess the, um, 'think tank' which generated this headline. (Anyone who listened to Start the Week is disqualified.) You have to post both correctly to win this [year's] quiz and carry the kudos of current quiz winner. I expect the first post to contain the correct answer.

Cut the working week to a maximum of 20 hours, urge top economists
Job sharing and increased leisure are the answer to rising unemployment, claims thinktank

For extra credit, explain which famous economic fallacy these 'top economists' (ho, ho, ho) have committed, and why they are obviously deranged.

Mr. Murdoch, tear down this paywall!

Well, not quite. Though it may be a good idea: let me explain a few interesting little absences recently which I have noticed. I think they are rather telling of a couple of things.

Firstly, the Today programme ran an item a little while back about nominative determinism. Time was, the Times' Danny Finkelstein would have been all over a piece like that, as he is an avid collector of examples of the form. No-one even mentioned him.

Secondly — and perhaps there's an element of confirmation bias to this — I get the sense that the Telegraph is slowly becoming the paper which gets the 'jointly signed' letters. There's one in today's about care for the elderly, for example. In days gone by, it would have been the Times.

Thirdly, one sees and hears somewhat less in general of the Times' journalists and commentators, as well as its (distinctive) content. We don't know who's on staff any more; we don't know what they're saying. For example, apparently Alex Salmond was its Briton of the Year. This will doubly appalling for Salmond: firstly he doesn't want to be British, and secondly, since it was in the Times, he has gained precious little publicity out of it. (Alex Salmond's top ten political principles are publicity for Alex Salmond, nine times, and then Scottish independence — as a means to more publicity for Alex Salmond.)

I am getting the impression that putting the Times' whole content behind such a high paywall has done little good for the paper's involvement in and influence on national debate. Now, this is not particularly good for Britain: I think the Times' fairly mainstream, liberal centre-ground position is quite helpful. But it's also not so good, in the long run, for the Times. If it remains absent from the Internet, it is becoming clear that it will eventually be absent from everywhere, including the newsagents'.

One might cavil that the FT is holding its own, but of course, the FT has next to no competition in its corner of the marketplace. A better solution for the Times might be to lower the paywall: have some features which are permanently open, like Comment Central, one of the cartoons, the letters page; and also have a handful of articles each day which are free to access. Opening up articles after a period of time (say, a year) would also help the Times advertise its wares while providing subscribers with a distinct benefit.

That the Times is remaining resolutely closed off to non-payers suggests that Rupert Murdoch is not particularly bothered about using the Times to influence UK politics. (This may be a different story for the Sun.) Presumably, he sees the Times more as a money machine: but perhaps someone should warn him that geese which lay golden eggs need to be free-range for best results.