June 17th, 2014

BOURNE SUPREMACY: IEA Wonk Slaps Down Piketty

Woman-beating economist and Labour poster boy Thomas Piketty is factbombed by the IEA’s Ryan Bourne on Channel 4 News.


87 Comments

  1. 1

    This would still be lost on the left, and liberals:

    Vote UKIP :-D

    Like

  2. 3
    Ma­­qb­oul says:

    Why didn’t the frog just reach over and slap Ryan? Oh, I know, Ryan is a bloke who might hit back.

    Like

    • 8
      Tina Turner says:

      The greatest political system ever devised is Thunderdome. Two men enter. One man leaves. It concentrates people on what are the real issues. You would probably not have people willing to fight to the death to bring in new parking regulations.

      Like

    • 19
      Cinna says:

      French gobsh*te.

      Like

    • 58
      Two Economists talking bollocks and taking no responsibility when they get it wrong says:

      Like

  3. 4
    2nd says:

    2nd!

    Like

  4. 6
    PC Peecee says:

    I apprehended Mr Piketty as he left the studio for having a name that, if you removed two syllables, would be offensive to the travelling community.

    Like

  5. 7
    Ma­­qb­oul says:

    No doubt his wife is a libertarian who got two black eyes as she failed to understand socialist tax theory at the first explanation.

    Like

    • 13
      blog reader says:

      Or accept the infalliable data and use of this data to produce the irrefutable explanation, in french and english (UK and USA)

      Like

  6. 10
    Anonymous says:

    Always room for at least one comedy Frenchman in national life.

    Like

    • 49
      Wi Li Clunt says:

      Wonderful. But what is Cato doing meeting Bumsex this afternoon? WaveyDave isn’t auditioning for another career in films? He’s pretty dopey but he wouldn’t make a credible Clouseau. Anyway, by the time he gets his cards, he’ll be a slaphead like Wee Willie Wanker. It can cause bloom on the lens.

      Like

  7. 14
    Noble Savage says:

    Well I watched that and thought Picketty ran rings around the sickly looking rich man’s friend who couldn’t marshal toy trains, let alone facts. His naivety was astonishing – not least his belief that the rich tell the truth about their wealth.

    Picketty was right about the damage done to society by inequality. It’s not so much inequality in itself, but its effects – the unfair advantages it confers on children of the megarich who then get all the internships and squat in high income earning positions, the number of people it takes out of productive employment, the processes of demoralisation that set in among the general population who see that the megarich can fix everything to their own advantage.

    Arguing for inequality is like arguing for sclerosis.

    Like

    • 20
      Bill Quango MP says:

      So how does someone being rich make you poor? Do they steal your ideas or burn your business to the ground or something?

      Liked by 1 person

      • 23
        táxpáyér says:

        Rent-seeking

        Like

      • 46
        Noble Savage says:

        They control markets e.g. labour markets e.g. internships in highly paid professions.

        As Picketty said quite clearly, a degree of inequality is good but a situation where say 20% of the population could live in luxury off rental income or share income while the rest experienced declining real incomes, is not healthy. It’s not so much inequality that is the problem as the ethical nature of the inequality. If inequality actually reflected hard work and ingenuity for example. However, it is difficult to maintain that is the case.

        Like

        • 54
          Mycroft says:

          English is not his first language, in place of the term ‘inequality’ in these circumstances we naturalised English speakers would likely say something akin pay incentivised promotion (we shorten that to promotion), that is good and natural.

          Incentive is a fine and noble attribute of Capitalism, inequality per se is very bad indeed, it is not ‘inequality’ to pay a tyro a small salary/wage and an experienced worker a lot more, that is an incentive.

          Like

          • Noble Savage says:

            Well I take your point to the extent that for instance to pay someone £100 for x amount of work and someone else £50 for x/2 amount of work is NOT inequality, it is arguably (all else being equal!) an example of equality.

            However I think we know what we are talking about: inequality of outcome. Inequality of outcome is simply a necessary result of human activity and – as parents teach their children – life isn’t “fair”.

            But Picketty’s point – as I think you agree – is much stronger…that extreme inequality of outcome is self-reinforcing, corrupting and a drag on productive forces.

            His remedies sound perfectly reasonable.

            Like

          • Mycroft says:

            To NS, I agree, your assertion is correct in my opinion.

            I’ll try to be clearer in my replies.

            Like

      • 56
        Mycroft says:

        For every gain there is a loss.

        The only way that is side-stepped is if there is primary production.

        For example a seed planed by a farmer and grown to cereal is wealth creation, the same applies to metals grubbed out of the ground.

        We are in a ‘Service economy’ we are not in a primary position generally.

        So there is a finite cash chest, if you take out more than others (as a group) then there is less for the rest.

        So that is how your question is answered correctly.

        HTH

        Like

        • 59
          classicist says:

          Fortunately, that is not true. In any free transaction, both parties are left wealthier, even though to a third party the total sum of ‘wealth’ looks the same.
          This is because the goods traded are more valuable to the party acquiring them in the transaction that to him trading them in.
          If they were not, the transaction would not take place.
          So wealth is created even in a ‘service’ economy.

          Like

          • Mycroft says:

            I think you’ve defeated your own reply from within.

            But can’t see it, which I find amusing.

            Think about ‘value’ and then think about ‘wealth’… compare and contrast :) and then hit ‘end user’… it should become clear.

            Like

          • Noble Savage says:

            No, Mycroft is right.

            The service sectors is entirely dependent on the secondary and primary sectors.

            However the service sector can:

            1. Improve the efficiency of the primary and secondary productive sectors.

            An example might be an agricultural consultant who can advise farmers how to produce more.

            2. Have no significant effect on the efficiency of the primary and secondary productive sectors.

            The physiotherapist might have been more productively employed as a factory worker…but perhaps they are marginally improving the productivity of the workforce by accelerating recovery from injuries.

            3. Reduce the efficiency of the primary and secondary productive sectors.

            A car finance company that diverts liquidity into car purchase, mostly from abroad, might be preventing capital being deployed more productively in the economy e.g.in building factories or investing in refitting factories.

            Like

          • Mycroft says:

            May I, to further illustrate the points made by me and filter-reasoned by NS, the following example of how the Service Sector can often take out a greater sum than it should and bring about devaluation and even failure of businesses.

            The link here is to ABC News (Oz) and is safe for work:- http://www.abc.net.au/news/2014-06-16/nrn-jamie-responds/5526426

            Effectively by taking too much so that cost is passed on to a primary wealth generator Mr. Oliver has jeopardised the very sector that allow him to skim a profit.

            So two service providers combine to kill the very source of wealth.

            This, in microcosm, is what Mr. Piketty alludes to in his book and myself here have tried to explain regarding the deleterious effects of a ‘unfettered capitalist system’, such a system is as finally nihilistic as any Communist inspired command economy.

            It is simply that they are political polar opposites that achieve the same result.

            I think you must agree that this also confirms what P. said and is the accepted truth in modern International Finance that it is not a left or right issue.

            It is more accurately about meeting conditions of growth and wealth generation and at times this will ‘seem’ variously left or right wing stances.

            Equally it is not ‘balance’, that too is a subtle killer, balance engenders ‘stag-flation’.

            The to and fro of seemingly left and right leaning policies are event driven and should be hand in hand with the cycle of Boom and Bust but slightly out of sync due mainly to the lag of enactment.

            I apologise to Mr. Oliver for using his example so starkly, and his ‘timing was purely a fortunate co-incidence, it is in illustration and no malice imparted on my part.

            Like

    • 37
      Mr Tony says:

      “the unfair advantages it confers on children of the megarich who then get all the internships and squat in high income earning positions, the number of people it takes out of productive employment, the processes of demoralisation that set in among the general population who see that the megarich can fix everything to their own advantage.”

      Sounds good to me.

      Like

    • 39
      yipperdeedoo says:

      All those internships which pay £0 wage.

      Like

      • 47
        Noble Savage says:

        Quite. That’s an even more effective barrier to the non-rich than anything else. Like the days of the barrister’s pupillage.

        Like

        • 52
          Tricky business says:

          Just as well Labour introduced the minimum wage as well as internships.

          oh…hang on a sec…

          Like

          • Noble Savage says:

            I’m not a Labour Party Member and neither is Picketty as far as I know so your comment is irrelevant. Of course non-paying internships should be banned.

            Like

        • 70
          Charlie says:

          Noble Savage. The major problem are children who learn next to nothing after 11 years at school, come out with an attitude which is surly, resentful to criticism and unhelpful and wonder why they are unemployable. The days when when one cold work in large factories and never speak to customers is long gone. Employees need to be be able to be helpful and polite to customers.

          Consequently uneducated and ill mannered people have problems obtaining well paid work.

          The Agricultural and Industrial revolutions were created by educated people who wanted to improve methods of production and in doing so, became wealthy .

          Like

    • 50
      Mycroft says:

      I agree, well reasoned post.

      Like

    • 80

      Picketty started off by showing that he literally does not understand the first thing about statistics, that first thing being that correlation does not imply causation.

      He said that high (83% average) top rates of tax in the US over a long period were associated with economic growth, productivity growth, etc and led the listener to think that the former caused the latter.

      When Bourne pointed out that high top rates of tax in the UK were not associated with economic growth, etc, Picketty just dismissed that as being caused by other factors.

      So it looks like he thinks that correlation *does* imply causation, but only when it suits his political thesis!”

      Like

      • 82
        Mycroft says:

        No no no… he did not ‘make the association’ he simply stated that it did not impede it, watch the damned video, it’s his first statement.

        You’ve started badly… but you continue… unabashed.

        After giving an entirely wrongful attribution you then slam him for a ‘contradiction’ it, a contradiction that was only present in you own mind.
        :)

        I think the only rightful ‘politicisation’ present is your own, specsavers and a hearing aid might be your salvation.

        But let’s give you the benefit of the doubt and you simply misheard the first few minutes of the video.

        The entire point is that even that dichotomy can be accommodated by dint of the fact that there are separated and only partially linked by inter-continental trade.

        What may apply to the UK psyche will not apply to the US psyche, these are now closing due to the instant access media, but in the past the dissociation was greater and more marked.

        The plain fact is that because his thesis is abhorred by the rampant greed sector those exact creeps will slink out of the woodwork to cry ‘rubbish’, in very much the style you have done.

        Economics, good economics, is NOT political in the partisan sense, but the vested interests will attempt to grasp or decry the thesis for their own gains dependent on what they want to gain, this is natural and quite healthy.

        What is not healthy is to misrepresent the thesis and the tenets that form it’s basis, that is why I have jumped on you, you are doing that, by misrepresenting things as you have done in your post the debate is started or pursued from a wrongful standpoint, that helps no-one except those that have only their personal benefit of the present status quo and the Country’s in a mess and we can’t afford to be misled.

        I don’t want to make an enemy of you and despite my brusque response I hold no desire to be seen as combative or aggressive, I would prefer to persuade you to reconsider your mind-set and realise that things cannot remain as they were prior to 2007 as the next crash if we don’t take measures soon will make this recent recession look like a walk in the park.

        The debate is essential, but it should remain focused on what is said not on what bias we put upon the words.

        Like

        • 83

          I am not going to waste time listing all of the errors in your piece.

          Let me just point out that you have the typical leftist trait of taking for granted who nice you are (“let’s give you the benefit of the doub”) but are actually full of bile towards anyone who dares to disagree with you (“specsavers and a hearing aid might be your salvation”).

          Like

          • Mycroft says:

            If you say so.

            But the record shows you are not doing too well.

            You didn’t understand the words in the Video.
            You accuse me of being ‘leftist’ when I’m a long standing member of that notorious leftist party UKIP
            You fail to acknowledge your errancy.
            You have a mightily thin skin.

            Let’s agree to differ, it’s the English way after all and I like it, it’s a charming compromise.

            Have a good day.

            Like

        • 85

          In response to your 2:21 pm post which does not have a Reply option.

          But the record shows you are not doing too well.
          I’m doing fine, as all the errors are on your part.

          You didn’t understand the words in the Video.
          I did actually.

          You accuse me of being ‘leftist’
          I didn’t. One of your main problems is that you are reading what you think is there rather than what actually is there.

          You fail to acknowledge your errancy.
          As I haven’t made any …

          At least, none that you have poinrted out.

          You have a mightily thin skin.
          No, just not enough time to explain all of the problems with you rather long earlier post. RL and all that.

          I hope you have a good day too.

          Like

  8. 15

    :-)

    Like

  9. 16
    Picketty Witch says:

    !

    Like

  10. 17
    Picketty Witch says:

    When the freedom fighters return from their murderous exploits in the ME, for NHS patching up and heroes’ welcomes, would Dave consider refusing re entry please.

    Of course it would be anti EU and Rites but WTF.

    Does logical thought exist or are we so frightened by the cancer within that it cannot happen. Would the USA do the same?

    Like

    • 26
      LLC says:

      The enrichment afforded by the heroes clearly outweighs any negative aspects of the heroes return,of course we must be vigilant but perish the very idea. We cannot all be white and pleasant.

      Like

    • 40
      #bringbackourgirls says:

      The USA would have them in orange jumpsuits and undergoing assisted drowning practice quicker than you could say yoomunrites.

      Like

      • 67
        Out says:

        The freedom fighters should be made aware that their families will be joining them in their new location within the next week.

        Like

        • 77
          Fred the pensioner says:

          Excellent!

          Is Abu the Hooks family still here and being housed and paid for from my pension?

          If so, why?

          Like

  11. 18
    Anonymous says:

    Where, oh where eez Johny Eeenglish…..

    Like

  12. 21

    Piketty actually agrees with Bourne here that inequality per se is not bad.

    Yet Miliband clings to his badly classified predistribution which is only about inequality. It can only be about inequality.

    But that is about leftie dogma, not problem solving.

    Did not like the …joint Labour and Conservative problem. Those words concealed an agenda..

    Like

  13. 24
    EeeYepBlowing Whistles says:

    i’m all for bringing religious nutjobs being dragged kicking and screaming – into the 21st Century – but can we do the same with the fucking Judiciary?

    Like

  14. 25
    Anonymous says:

    Cameron, defeated, annihilated, isolated in Europe.

    It’s a farce to even believe we can renegotiate any thing with the federalist juncker, merkel’s puppet, in charge. Full speed ahead for a united states of europe, without a vote.

    Vote liblabcon get merkel’s puppet, juncker.

    vote ukip, get out of the EUSSR!

    Like

    • 27
      Anonymous says:

      Cameron’s empty threat of pulling out of the eu if juncker got the post.

      You must now know what a europhile cameron really is.

      He would never take us out of the eu, never. He will ignore any referendum vote, just ask him.

      Like

      • 79
        Civil Savant says:

        You’d be a Europhile too if you had read some of the intelligence reports from MI6 and GCHQ that find their way into the PM and Foreign Secretary’s red boxes. Unfortunately as spying on our “friends and allies” is a totally un-British thing to do and something we definitely don’t do, there’s absolutely no way I can tell you what is contained therein.

        Needless to say though, if we left the EU they’d all do their absolute best to screw us over, including secret annexes in trade treaties to prevent the UK from signing their own.

        Like

  15. 28

    Didn’t see any slapping. On the contrary what could have been an interesting conversation had someone been able to persuade Ms Newman to keep her mouth shut rather than derail the conversation with increasingly irrelevant questions.

    Like

  16. 31
    Maelstrom says:

    Like

  17. 32
    Frog Watch says:

    That cheese eating surrender monkey should learn to talk proper English. I hardly understood a word & those that I did reeked of garlic.

    Like

  18. 33
    Mycroft says:

    Piketty has put the fear f’cking christ up the career elite.

    He is absolutely correct.

    The idiot on the left of the screen starts with a falsehood.

    Tax was not 98% except when the BoE corset was invoked and the money that they were squirrelling away instead of investing was being taken from them for Public Works.

    The top rate was 83%, unearned income was hit only if it was not re-invested.

    It was brought in in an attempt to force companies to up-date and increase productivity.

    He carries on in the wrong.

    The reality is that by reducing tax on the extremely high earners has only promoted the accretion of money to a singular sector whilst in this Country the low wages are topped-up by the middle classes.

    The career elite are side-stepping their responsibility, they are also for the large part utterly f’cking useless.

    From Fred the Shred to the Co-op Coke sniffer, the career elite are almost invariably under achievers, under achieving or cash-cow milk-maids and are actually destroying this Country’s production rates as yet again investment suffers.

    This is happening right in front of peoples eyes, in open sight, and yet rather than wake up and realise the real issue we concentrate on him being a (allegedly) a wife beater or similar.

    Anything to distract the stupid masses and divert attention.

    Right here, people are apparently unable to make the tiny intellectual leap of understanding.

    The stunted jerk-pillock on the left of the screen claims there isn’t a lot more disparity, utter, utter rubbish, the gulf is enormous now.

    Defending wealth inequality as not bad in all aspects, but too much destroys incentive and mobility and diverting to other aspects is the usual dumb diversionary tactic.

    In total, the man on the left is a moron.

    Piketty has all the right ideas, decrying them is condemnation to things only getting worse in the future.

    The point made by P. about a mansion Tax that is collected annually is quite correct, the ladder that is the property market is missing a few rungs and is ricketty.

    We are forming an entire generation that will only ever be on low wages and cannot accrue property/savings wealth, that is the recipe for public disruption and agitation.

    That has to be avoided and the solution must not be talked out of the public consciousness.

    P. has scared the career elite to their very core, they might have to actually do some worthwhile work and earn their money, for the lazy and feckless that infest the UK Boardrooms that is the scariest idea to ever enter the public’s mind.

    The Public Sector elite will do all they can to bring him down, he represents the means of them losing their comfy Board positions and huge salaries after the retire on huge pensions.

    I agree with P, he is right on the money.

    Like

    • 38
      Mr Tony says:

      Not in my name.

      Like

    • 48
      so it was hit then says:

      “unearned income was hit only if it was not re-invested”

      Do what you are told with your money or it will be confiscated.

      In 1971 the headline tax rate was 91%, and for the “super rich” such as the Beatles it was a marginal top rate of 95%.

      Like

      • 51
        Mycroft says:

        OK, it’s the 60s… money is being taken out of the Country despite exchange controls through the Vestey loop-hole… (read about it, it was the originator of the *bucks, Goggle etc scams)

        We were in trouble, many firms had been taken over and the parent Co. was in the US and there seemed no way to avoid the further death of the economy.

        So… what do you do?

        The wrinkle of the Vestey 2 schemes of the 60s was to bank the money then pass it on over time, so hit the interest fully and tighten the corset around it, it was all the armoury we had.

        Remember it was 95% of the unearned income, not the capital sum, re-invest it and you got lower rates, it put off our decline by ten years maybe.

        The real bone of contention for those wanting to drain the Country of wealth was not the rate on unearned income it was the corset on outward flow that came with it.

        It worked, but it was done in desperation.

        Like

        • 53
          I doubt you are in high finance says:

          ‘Money was being taken out of the country despite exchange controls’ Oh no. Surely not. People were actually finding ways t move their money (not their as in belongs to them) to wherever they wanted. We can’t allow that can we. We need controls to keep their money in the socialist paradise.

          Like

          • Mycroft says:

            It is only different these days because the exchange controls were brought it to force people to the table on free-trade, until that time we had to follow the rest of the World, just as we do today with the agreements in place.

            Prior to the free-trade agreements money was haemorrhaging out of the UK because the rest of the World had their own form of exchange controls.

            We had to stop this, my guess is that you’ve never quite aligned the prevailing circumstances with our position at the time before you posted, which is a shame.

            It is in simple terms not sewing up a hole in our pocket when the rest of the World was following us around picking up our hard-earned as it fell out.

            Like

          • Charlie says:

            Noble Savage. The major problem are children who learn next to nothing after 11 years at school, come out with an attitude which is surly, resentful to criticism and unhelpful and wonder why they are unemployable. The days when when one cold work in large factories and never speak to customers is long gone. Employees need to be be able to be helpful and polite to customers.

            Consequently uneducated and ill mannered people have problems obtaining well paid work.

            The Agricultural and Industrial revolutions were created by educated people who wanted to improve methods of production and in doing so, became wealthy .

            Like

    • 55
      Economics 101 says:

      ‘Money they were squirrelling away”. Don’t ant that do we? We need it forced to be invested in ‘Public Works’ because they are such a fine use of capital aren’t they? Great returns they generate. So good that we needed to coerce investment in them. If they produced an adequate return they could attract capital.

      An companies needed to be forced to up date to increase productivity. You actually think that returns on capital increase if you increase the amount of capital invested don’t you?

      Your views on Mr Piketty’s work are somewhat coloured by the fact that you appear to be a command economy economic illiterate.

      Like

      • 60
        Mycroft says:

        I have no issue with saving, it’s good, but the schemes at the time were part of a tax avoidance scheme and one that was entirely detrimental to our economy.

        The Public Works is a cover term for the general fund of taxation, it was not about investing in them per se, it was to incentivise the re-investment within the UK and not flit it away to Swiss Accounts.

        Yes, it does increase production, newer better machines increase productivity, one look at Germany at the same time shows the value of that.

        I abhor the command economy, it doesn’t and can almost never work in full implementation, the consideration of it though by the state can spur private investment as the target can be incentivised by the state.

        Piketty remains valid and accurate.

        Like

        • 61
          Mycroft says:

          “…were part of a tax avoidance scheme…”

          Should read “were part of a Capital Sum scheme…”

          Apols.

          Like

    • 87
      SIZE 15 CARBON FOOTPRINT says:

      The very idea that income could be ‘unearned’ is typical socialist dogma .

      Like

  19. 42
    Mycroft says:

    I think O-O needs to employ someone who knows at least ‘something’ about International Finance.

    Making stark errors of fact and also making a bit of a prick of yourself is not a ‘slap down’… it’s being a prick.

    My guess is that there is some form of jealousy, the Piketty fellow has out-researched, out-thought and out-gunned almost the entire World’s economists.

    Like

  20. 45
    uknowitmakessense says:

    Interviewer is crap but at least she gets to suck Picketty off when its finished.

    Like

  21. 68
    Thecommentsonhousingareballs says:

    The comments on housing are balls though – the fact that the planning regs are biting so hard for the UK housing market shows you just how crazy immigration has got. Sort out the immigration problem first rather than complain you can’t build unlimited houses on an island.

    Like

  22. 73
    Let's be clear says:

    Guido the attack against Piketty is beneath you.like him or not his work is impressive and worthy of serious debate.This is a big issue in particular the inequality point.Rubbish the economics properly don’t just knock the guy.

    Like

  23. 74
    Anonymous says:

    “factbombed”
    Ah! The original (and never bettered) precision guided ordinance. Why not deploy it against Isis, and for good measure every other ideologue loose on this planet? We could use warheads like this: Given that your narrative is completely correct. Do you have any excuse for refusing to explain in detail, the infallible means you personally used to verify your assertions?

    Like

  24. 86
    Anonymous says:

    Wealth inequality leads to many negative effects not only on those with no access to wealth but also to the wider economy.

    For example, Property.

    Up to 60% of new builds in London are bought off plan by foreign investors. Presumably a way of investing their money safely and making a profit should local governments like China and Russia feel the need to go on their own tax raising sprees.

    Up to 50% of any new build in London is then left uninhabited.

    Take a tour of the new builds around the Thames. Many of those properties are bought but vacant and there is no intention on the part of the owner of letting them.

    The result is a huge number of vacant but paid for properties in London.

    No one would care except for the the fact that thousands of people in London can not afford housing and the government cannot afford to build any in London.

    Needless to say housing prices rise as a result of demand but if that demand is coming from wealthy foreigners buying houses they do not intend to live in, then surely this isn’t a policy we should allow to continue on the basis that it ‘stimulates’ the economy. Whose economy? Certainly not that of the local working population.

    Taxing those properties would not stop foreign investors buying them. But it would create a useful pool of money to alleviate the housing problem.

    Like


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