´óÏó´«Ã½

MOSTLY HARMLESS?

"Thou shalt not kill", says the Christian God, who is loosely affiliated to Britain.

Terms and conditions apply. (Well - the Bible IS in small print!

Johnnie Foreigner AT HOME is disposable (his ox/ass, man/maid, children/wife, gerbil/budgie, as collateral damage) without sin. But thou shalt not send, even the most HEINOUS JF home to excessive haircutting (of counted hairs).

CAPITAL PUNISHMENT IS BARBARIC; we don't do it; only primitive Johnnie Foreigner (and some of our American special relations) do that. (Just as well, when our magnificent Justice System keep convicting the wrong people of capital crimes.)

And we DEFINITELY DO NOT TORTURE (but know a man who does - perhaps).

And friendly fire is not our fault . . .

can't they ask Ronaldo for a few quid?

David Grossman should take a look at the Select Committee evidence session last week, as shown on the Parliament Channel. The evidence revealed a level of government ignorance, complacency and ideological motivation that is quite frankly shocking.

Markets work through Supply and Demand. The Demand Curve normally shows people will buy more of a good if its price is low - less if its high. The Supply Curve is the opposite - suppliers are willing to sell more the higher the price - less the lower the price.

BASIC ECONOMICS.

I was quite simply gob-smacked to hear that unless a graduate is a really high earner - i.e. over £100K today - there will be NO DIFFERENCE in the amount they have to pay back regardless whether they were charged £6k or £9k per year!

The Demand Curve is therefore horizontal because THERE IS ONLY ONE PRICE i.e. what the graduate contribution is - this system has therefore created a price elasticity of Demand of ZERO!

Now if you look @ the supply side of the higher education "market", the fee range is unworkable - both because it doesn't go high enough and because it goes too high at the same time.

The Supply Side equation looks like this - Universities receive income from a range of sources, but the top two are (usually) the Teaching Grant and Student Fees, so as the government is planning to cap the overall level of funding if the fees are raised, the university will get proportionately less Teaching Grant. Because the balance has been massively switched away from the Grant - 80% reduction - fees will now become the main income source, so a 50% increase in fees brings in dramatically more money than is lost through a 50% cut in the remaining grant - so there's NO INCENTIVE TO CUT PRICES - indeed there is a big incentive to go for the maximum price both to get the most money in and to be able to stand shoulder-to-shoulder with the elite universities.

But from another perspective the maximum fee level is too low, in that a real market system like the Ivy League in the USA milks those able to pay to the hilt, then cross-subsidies poor gifted students - so a REALLY high fee ceiling would allow this "Robin Hood" approach to operate in the top UK universities.

So the Supply Curve is effectively nearly vertical @ a price of £9k, with a tiny tail of lower fees being charged by universities desperate to avoid going bust.

So the Price Elasticity of Supply is also effectively ZERO.

Where will this brave new "market" find equilibrium? Quite simply where the number of would-be students willing to pay the graduate contribution meets the Supply Curve @ £9k.

And as the graduate contribution is now being clearly spelt out, you can only draw one conclusion about this new "market" - IT IS NOT A MARKET AT ALL!

Messrs Willetts & Cable talk tough about making further cuts to the teaching budget, but their nightmare system can be entirely circumscribed by the Universities simply jacking the fees up to the maximum, which then leaves the Student Loan Company paying out hugely more money than was in the budget because the Government has committed itself to providing loans to all comers.

We need to look hard at this whole policy approach because we can now see the ultimate contradictions in it:

1. it is not a market at all - there is no effective price mechanism at work in supply or demand.

2. the justification for it is in the need to reduce government spending in order to reduce public debt. This policy WILL DRAMATICALLY INCREASE public debt.

3. The cost of administering this Byzantine system will drive up the overall cost of running higher education, so making it LESS EFFICIENT - money will go into paying for administering the loans system that should be being spent on teaching.

4. Universities won't be free of government interference - the student loan system offers them a blank cheque to funding that is not going to be sustainable without major regulation.

5. Saddling young people with vast debts but claiming they won't have to pay unless they have the income to do so doesn't change the fact that they have those debts, which will impinge on their ability to get a mortgage

6. Graduate will have the incomes that they have - if a large slice is going to repay their loans, they son;t make pension contributions which will store up a MASSIVE problem for the future.

The combination of Mr Willetts who thinks he's as clever as a barrel of monkeys combined with Mr Clegg who thinks he is so willy that he can water down any Tory policy to take the sting out of it has produced the nightmare Coalition compromise which is neither a full blown market solution nor a reformed public system either.

The new system may also throw major unforeseen wobblies with institutions coining it or or going bust depending on how the student numbers stack up.

Puff,puff,puff ; )

The ECB's decision to increase rates is because it wants to send a signal, rather than because the policy is likely to be effective. Rather like the old medical practice of bleeding the patient, it is as a result of ideology rather than reason.

Inflationary pressures in Europe are in general external and not internal at the moment. So far as I am aware, there is no part of the Eurozone where the economy is in danger of serious overheating. In fact, the aftermath of the Japanese earthquake is having a contractionary effect. The workers in the car plants may continue to get paid, but others dependent on this production will not be so lucky.

In fact, relying on interest rates is a cop-out. I remember Denis Healey threatening to increase personal taxes to negate inflationary wage increases. Letting the banks raise interest rates instead merely allow a private tax on sections of the economy, rather than a public one.

However, IF parts of northern Europe have overheating economies, which means too much liquidity causing inflationary pressures, then the PIIGS have the opposite problem. The rational thing to do then is to remove liquidity from northern Europe by taxation, and to inject it into southern Europe by either subsidy, or hidden subsidy, ie infrastructure or border protection. This will partly recompense the economies of the south for the damage that the single currency and lack of exchange rate flexibility is doing.

In general, wishful thinking, ideology and groupthink are the biggest causes of our problems at the moment. At any rate that's is my reading of this very interesting article by Nobel winning economist Joseph Stiglitz:

@4 A very interesting analysis Richard. Add to your mix that useful courses like science and engineering are considerably more expensive to run. Does the new system propose to compensate universities for running them?

Or will we see even more useful and prestigious departments follow the likes of my old Chemistry dept at KCL into oblivion.

Ah, Ecuador and Oil. Wonder if the ´óÏó´«Ã½ will interview man on the ground John Perkins:



"I was on my way to meet with the Shuars, the Kichwas, and their neighbors the Achuars, the Zaparos, and the Shiwiars—tribes determined to prevent our oil companies from destroying their homes, families, and lands, even if it means they must die in the process. For them, this is a war about the survival of their children and cultures, while for us it is about power, money, and natural resources. It is one part of the struggle for world domination and the dream of a few greedy men; global empire."

7

I think that there is a differential for science courses in the system, but the whole thing is now so ludicrously over complicated, goodness knows how anyone makes any sense of it.

Willetts is going to have to think long and hard about resigning if and when this all unravels... and he's supposed to be the cleverest of the Cabinet!

NOT A LOT OF PEOPLE KNOW THAT

In 2007 a bill was presented in Parliament entitled: ELECTED REPRESENTATIVES (PROHIBITION OF DECEPTION) BILL. It failed for lack of support from Cons and Labour.

Just what could have caused the originators of the bill to think that HONOURABLE MEMBERS MIGHT STOOP TO DECEPTION?

Nuff sed

TOO FREUDIAN TO RESIST (#4)

In reference to Numbskull Nick (Dedicated Dupe to Dodgy Dave) Richard employs: "Mr Clegg who thinks he is so willy". Oh, indeed he does!

So many 'called-for' jibes are begging me to set them down, but I am trying to be kind. Nick was needy, and Dave offered his price; Nick sold out. Also, if I succumb to juicy jibes Blogdog will have me for supper.

..Gaza Strip shore targets are pounded by Israeli navy..

why no airstrikes? wrong sort of freedom fighters?

..MPs criticise ´óÏó´«Ã½-Siemens £38m contract failure..



time to let some bbc 'talent' go earn more in the private sector?

IN FAIRNESS TO WIND (#5)

(I loved 'puff puff puff' Liz.) I'm a tidal stream man - me. But:

If 30% was maximum expected output and we are getting 20% - that is 66% of planned yield. (No idea if this years wind's were up, down or average.)

Payback time rises 50%. (Did I get that right?) IF that is still well within the life of the units, it's OK.

11

My spelling might be a tad off...

Anyway, what I really meant was:



And to paraphrase "Starry, Starry Night":

"but I could have told you Vince(nt),
the world was never meant for one as duplicitous as you!"

I always said, give Mr Willetts enough Cable and eventually he'll hang himself with it.

It was all your fault Barrie

Insensitive male chauvinism on show, 3 or 4 years ago . Don't know if I'm correct but it sure seemed like Kirsty was having a hard time of it and all you did was relentlessly criticise. Brought me on here to even up the score.