Since picking Mitt Romney would violate all known economic models of rational choice....

Given that John McCain "doesn't do" economics, that's him as a shoo in then, is it?

If that is true then we would expect to see less crime in places that are more equal and more crime in places that are more unequal.

The usual measure of such inequality is the Gini (index or coefficient, depending how you display it) and, to the great delight of social democrats everywhere the Nordic countries have some of the lowest such measured inequality. The US has one of the highest for a developed nation.

New York City has one of the highest in the US what with Wall Street and all that (just as London does in the UK).

So, if it's inequality that causes the crime then we'd expect there to be more crime in the US, more in NYC, than there is in the Nordics, yes?

So, is that in fact true?

Oslo had the highest rate per person in Scandinavia in terms of reported crimes, with 90 reported crimes per 1,000.

Copenhagen had 50 crimes reported per 1,000 and Stockholm had 79.

In New]]> 2008-08-28T11:43:23+01:00 http://www.spectator.co.uk/business/trading-floor/2045231/if-you-say-so-bill.thtml Barack Obama is the man for this job,” Mr. Clinton says.

“Barack Obama is ready to lead America,” he says, a line that brings the conventioneers to their feet. And here’s the money quote: “Barack Obama is ready to be president of the United States.”

Well, yes, but that's not the point, is it?

The question is, is America ready to have Barack Obama as president? It is a democracy, you know, the people choose thing?

He wants to know how to sell a Cabinet.

Surely that's entirely the wrong question for us plutocrats and members of the intelligentsia.

We want to know how to buy one, don't we?

Yes, business structure is just as much a technology as anything else is. For example:

The executives behind the Kaiser Chiefs and Primal Scream are backing a new website to allow people to buy a stake in the artist.

It could provide musicians with an alternative to large labels and give unsigned acts the chance for much-needed finance.

“Bandstocks” will let the public buy a share in the artist in increments of £10 and once the pot reaches a certain level it will be released to the musician to record an album.

Investors will then get a copy of the album, a credit on the sleeve and a share of the profits.

Ronald Coase rather unwrapped the point about why we form companies at all. Why not just have contracts with everyone to do what is required? Why have anything at all inhouse?

The answer is transaction costs (in his]]> 2008-08-27T14:46:53+01:00 http://www.spectator.co.uk/business/trading-floor/1801626/that-euro-economy.thtml There's a definite whiff of something rather scary here.

"The euro's surge over the past two years has caught up. We've seen a hollowing out of the euro area's industrial sector, an oil shock, and tightening credit conditions, made worse by the European Central Bank's decision to raise rates in June," he said.

Nobel economist Robert Solow said the ECB had made a bad mistake and was now moving far too slowly to stop the downturn engulfing the region.

"I get the feeling that the mandate of the ECB is based on the notion that controlling inflation in a modern industrial economy is enough, with no further need for anything else. This not a view that is accepted any longer in economic circles. Central banks should not try to reverse oil supply shocks," he told The Daily Telegraph.

Prof Solow, an expert on growth theory, questioned whether the eurozone is capable of responding to a crisis given the lack of a single economic government to co-ordinate policy. "You could say that every political entity gets the central bank it deserves," he said, speaking at a Riksbank gathering of Nobel laureates.

So, we've had]]> 2008-08-27T14:55:45+01:00 http://www.spectator.co.uk/business/trading-floor/1782706/internal-strife-at-ms.thtml Marks & Spencer has suspended a whistle blower who revealed the retailer’s plans to cut redundancy terms for more than 60,000 staff. Unsurprisingly, Stuart Rose and his senior managers are facing an angry backlash from staff over the plans.

And it's not just M&S staff who are angry. Paul Kenny, general secretary of the GMB union representing the whistle blower, told The Times: "Why do people at the bottom get the sack on the cheap while the top bosses get large payouts even when they leave having messed up?"  

(Incidentally, the US has a hefty exit tax, punishing companies that leave: why not here?)

That would be because we're members of the European Union dear. You know, this free movement of goods, labour and capital? It applies just as much to companies as it does to individuals: the freedom, the right, to change domicile as one wishes.

It's true that we used to have a hefty exit tax (roughly speaking, the company had to dissolve and reform, requiring the crystallisation of all of the decades worth of unrealised profits, a very expensive tax manouvre), but our membership of the EU has put paid to that.

Something old of mine on the subject here but while the name of the Directive underlying this might have changed the basic concept is inherent in our membership.

It's a basic requirement of case law from the]]> 2008-08-26T09:20:53+01:00 http://www.spectator.co.uk/business/trading-floor/1417841/social-tradeoffs.thtml At last, we have someone explaining this social mobility problem as it actually is.

First, they need to be clear which of the two fundamentally different versions of social mobility — absolute and relative — they are most concerned about. Absolute mobility defines how much better off we all are compared with our parents, telling us how a whole generation is doing compared with a previous one.

Relative mobility, however, concerns itself with a more problematic question: what are the chances of children from less privileged homes prospering in adult life compared with those from richer backgrounds?

A common analogy used is to think of the nation as a long caravan crossing the desert, with the poor struggling to keep up at the rear and the rich racing ahead at the front. An increase in absolute mobility would see everyone speed up and progress more quickly across the full length of the caravan, but no one would change position.

An increase in relative mobility, however, would see those undernourished but naturally strong travellers at the back advance more quickly than the rest, overtaking others in front of them at the start]]> 2008-08-26T07:54:21+01:00 http://www.spectator.co.uk/business/trading-floor/1416646/which-way-does-the-causation-run.thtml Thought this was interesting:

Staff who have worked at the Priory for more than five years are currently entitled to six months off sick on full pay. Employees who have been there less than five years get half pay for the same period.

The Priory wants to reduce this to no pay for the first three days with a maximum of six weeks full pay - half pay for those who have been with the company less than three years.

But staff say that the same terms are standard for the NHS and the public sector - and health workers have higher sickness levels because of the stressful nature of the job.

We know that the taking of sick leave is substantially higher in the public sector than the private.

The question we'd really like the answer to though is which way does the causation run? Is working in the public sector really more stressful? Or does the greater availability and more generous terms of sick leave encourage more taking of it?

Me, cynic that I am, would argue for the latter: incentives do, after all, matter.