Friday, 31 July 2015

Jeremy Corbyn now predicted to win the leadership.

Veteran Labour MP, and long time voice of sanity in the labour party, Frank Field, ponders his decision to nominate Jeremy Corbyn for the leadership.

Thursday, 30 July 2015

Simple Solutions to complex problems: Pt 1. African Immigration. Sink or swim?

To ease us through the silly season the Internationally acclaimed Quango Lectures.
Here is a slice from the first lecture.

Immigration.  The statistics. 

28.5 million people employed in the UK in 2013.
85% UK born. 15% foreign born
of the 15% foreign born - 6% from EU - 9% from outside EU

{ok so far?}

Of those in work 12.9 million are in the category 'low skilled.' Which is some 45% of total UK employment. Low skilled covers entry level trades. Entry level administration. Customer service, leisure, travel, sales. Warehouse, entry level manufacturing. And drivers and the care sectors.

12.9 million low skilled workers
10.9 million uk born
2.1 million foreign born

{now we are getting to the numbers we need.- Not easy. Lots of conflicting reports. These are from the official migration report for the Home Office.}

UK net migration is some 300,000 a year since 2011. 250,000 average 1997-2010
{Pre New labour, and EU border relaxation it was around 50,000 a year.. With a minus figure during it 30,000 a year overall.}

1.2 million low skilled workers are from outside the EU.
1 million are from within the EU

Of the non eu two thirds came to uk more than 10 years ago.
Of the EU migrants 90% have come in the last 10 years.

So the EU migration is a recent event and these migrants are now performing jobs and consuming services and living in accommodation in the UK.

The National Farmers Union, among others, have said that farms could not survive without economic migrants and is a major reason, along with the huge subsidies, that agriculture uses to promote the benefits of EU membership. Farms claim they cannot attract low skilled UK workers even though wages are above minimum wage level.

Conclusion and solution to non-EU immigration.

1. Stop economic migration from the EU. This may require leaving the EU. But as the benefits to our coming decision to withdraw is mostly to other EU nations, they may well decide an accommodation to suit the UK.
2. In place of current EU workers use non-EU immigrants to do the low-skilled, no qualifications needed, basic understanding of English only, jobs in farms and factories. Perfect entry level occupations for low or unskilled workers.
3. The leaving EU migrants will leave accommodation, NHS and school places for the incoming, jobs to go to sub-Saharan workers to occupy. 
4. Net migration should remain stable as EU migrants return to the EU, new non-EU migrants fill their places.

The UK can feel good about rescuing and providing new lives from refugees fleeing war, famine, hardship throughout the non-EU globe. The UK will be able to say exactly how many migrants it could take. At present that would be 1 million working migrants and about 500,000 family members.
{These numbers do not include the Romanian and Bulgarian recent migrants, so add another 100,000 at least.}
The UK would be no better, or worse off, on pure numbers, by following this course of action and would have significantly solved the problem of asylum seekers for the next 5-10 years. 
At the expense of our EU neighbours coming to work in the UK..

Wednesday, 29 July 2015

Calais open thread

"Calais is suffocating. The tourists have stopped coming here because all they see on the telly is stories about migrants and they are afraid to come," said Gilles Duvauchelle, the owner of Le Bounty café in the town centre.
Several customers at the bar nodded in agreement, with one woman saying that Britons used to come in large numbers to stock up on wine and French food in the hypermarkets on the edge of town. But now they have dwindled to a trickle, she said.
"The government is incompetent," said Mr Duvauchelle. "When migrant camps build up in Paris they move them on. But when they're here in Calais they don't give a damn," he said.
He said he was a truck driver for 20 years and is shocked at what lorry drivers have to put up with now if they arrive in Calais.
"They get attacked, they get migrants climbing in and the police can do little to stop it because they are overwhelmed by the numbers."
There does not seem to be an obvious solution to this.  The comment highlighted above seems to suggest that Calais (for onward travel to England) is not the only part of France being swamped.  Recent news reports have also focused on Greek islands and the south of Italy.

This isn't only about border controls.  People aren't arriving in neat queues with their documents in hand, they are simply turning up in Europe by the boat-load.  We can protect our border slightly better here in Britain, what with having la manche to keep us at arms' length, and by being simply a bit further away from SE Europe and N Africa.  But even then we don't know how many are slipping through, and we certainly don't know who they are.

The French unions aren't helping by going on strike the whole time, blocking up the roads with burning tyres and wrecking the ferries they used to work on.  Maybe the strikers are reacting to France's sad decline, but they aren't to blame for the thousands of people turning up on Europe's southern shores.

But what on Earth is the answer?  Is Simon Danczuk right to say that the problem will persist while Britain is an attractive place to live?  Does that mean we have to trash the joint? 

Are we surprised that the tourists have stopped coming?  Why would you queue up in Folkestone for hours if you had the choice, not knowing whether you were going to get back sensibly?  I am certainly not planning another booze cruise for the time being, despite the soft Euro.

I Thought Better of 'The Economist' Than This

Yesterday CU posted on a report covered in the Grauniad based on ludicrous calculations.

Here's another, featured in the same place, this time flying the colours of the Economist Intelligence Unit (and oddly sponsored by Aviva, presumably to provide top-cover for some bizarre new policy direction they are taking).  It pupports to establish that the Cost of Doing Nothing - about climate change, naturally - is as follows:
"value at risk to manageable assets from climate change calculated in this report is US$4.2trn, in present value terms.  The tail risks are more extreme; 6°C of warming could lead to a present value loss worth US$13.8trn, using private-sector discount rates.  From the public-sector perspective, 6°C of warming represents present value losses worth US$43trn—30% of the entire stock of the world’s manageable assets"
Oo-err, missus.  It runs to 63 pages but I can't recommend you spend the time.  However, as part of the usual C@W service to readers, here are a few comments.

1.  Gross mis-use of 'VaR'

The report states (correctly): "A core responsibility of asset managers and institutional investors is to manage risk, and the most commonly employed measure to assess it is value at risk (VaR)."  Just so, but the calculation of VaR as understood (and in the finacial world it is indeed well-understood, check google to see the wealth of serious work done on this metric) absolutely cannot sustain a horizon-period of 85 years. Most practitioners wouldn't trust it much beyond 8.5 days (- find me a company report citing VaR beyond 5 days).  Nicholas Taleb often writes as though he wouldn't trust it at all.

But they are clearly inviting us to accept it in the technical sense that the 'VaR' moniker is regularly employed for (as well, perhaps, in an ordinary-language sense for those who have no inklining it is in fat a technical term).   It is hard for a non-practitioner to grasp what violence has been done to the underlying concepts to push out VaR that far.  It's a bit like saying to a patient:  we need you to hold your breath for ten seconds while we do this test.  Good: now hold it for ten hours.

What they've done mathematically might have some ultra-qualified, very abstruse 'meaning'.  But they are trying to leverage the broad, intuitive acceptance of VaR as a financial metric: and VaR it ain't.

2.  Ludicrous scenarios / counterfactuals

A related issue is the craziness of projecting either scenario - a world without climate change (base case) and a do-nothing world of climate change (in varying degrees of temperature-rise) - on a continuous basis, with nice smooth curves.  One of the reasons VaR is properly limited to what might be lost over a few days is that much beyond that, (a) empirical data shows that the maths breaks down / ceases to be valid; and (b) a massive factor behind this is that people react to developing situations and re-optimise their positions.  Feedback kicks in.  So nothing in the human world carries on in smooth curves (check the price of oil since 1972 for an illustration).  Sometimes - retrospectively - 'secular trends' are identified, and how long do they last?  Only the benign ones last 85 years.

Why is it to be imagined that anything would drag on getting worse and worse for 85 years?  I don't mean "- because obviously we will all agree to install more windfarms at the next Paris Conference", I mean because (if you really believe this stuff) something will fundamentally bust a great deal sooner than 85 years.  (And I understand, of course, that a believer might advocate 'acting', for that very reason - but please don't tell us the financial incentive to do so is measured by an 85-year model.)

The way the world really works is, if something really bad is actually happening then a war breaks out (or similar extreme reaction) - in other words, a discontinuity results, much sooner than 85 years into the affair.  Do wars destroy wealth?  Well they do, and more - strongly to be avoided where possible.  But have a look at how WW2 turned out for the USA.  Or the aviation industry.  Or nuclear science.  Things change, and change a lot.

3.  Why call this stuff 'Climate VaR'?

Why not 'over-population VaR'?  It's every bit as good a conceptual diagnosis of what they think is going on.

I really thought better of the Economist than this.