Osborne’s Autumn statement

Well, many of you will have seen the budget and Balls’ response which began with a good deal of stuttering, widely reported by no explanation. If anyone has a hypothesis about why Balls began his retort by effectively stuttering, I would be glad to know. Even though he recovered after a few minutes, his response wasn’t very effective.

The primary reason for that I would argue for his ineffectiveness is that Balls, and Ed as well, has no well developed alternative to articulate. Effectively, he and others in the Labour Party assume as true the neoliberal economic theories that underpin Osborne’s major policies, though he slightly modified them in this statement. Policies guided by neoliberal economic principles have failed not only this time but every time they have been tried, either in western countries or in developing countries. This is fundamentally because they have no empirical relationship to the real world. They only work in toy economies.

They look correct to some people because the Keynesian position has been distorted and Keynes didn’t quite get all of it right. After the publication of the General Theory, he was already thinking about how to revise it. The theory should really be called the Keynes-Kalecki theory, as in a review of the General Theory the year following its publication, Kalecki corrected errors in Keynes’ theory of effective demand.

QE, which King is so fond of, is ineffective re job creation because it directs funds to banks who either hoard it or use it to pay down their toxic balance sheets. Osborne almost seemed to realize this when he proposed infrastructure projects. However, it looked a bit too little too late. And he doesn’t yet seem to have bitten the bullet. Besides, the money that has been put into the various QEs undertaken by certain sovereign governments is not enough to even make a dent in the banks’ toxic balance sheets, so great are their debts. Basically, it is money thrown away.

An interview with Robert Choate showed that Choate, while not being able to criticize Osborne due his present position, showed that he knows that credit ratings are meaningless for sovereign states with their own currency and that government doesn’t have to borrow, unless it decides to because the relevant interest rate is low. As for the basic interest rate, it can be kept low in perpetuity. Taxes should be used to control inflation by inhibiting spending and to direct spending into certain areas, as well as legitimating the sovereign currency. They should never be thought of as a basis for government spending, because government doesn’t need taxes to back their spending, something Choate knows only too well.  When pressed by Paxman in the interview, to explain his hints, he only said that we will have to wait to find out in his memoirs. However, no one, even Paxman, later picked up on Choate’s hints in the interview about what he really thinks of Osborne’s policies.

To rely on exports when every other country with whom you would do business is experiencing the same difficulty is incredibly stupid and shows that Osborne doesn’t quite know what he is doing. His comments about those on welfare were exceedingly ignorant. The stupidity of his position is that people who aren’t working don’t really want to would only be true were there jobs to go to. The basic fact is that there are fewer jobs than there are people looking for them. The jobs have to be there first to justify his basic assumptions about people’s motivations. History does not support Osborne’s ignorant comments.
In fact, Osborne’s social policies and comments directed to those on benefits, who are obviously not well off, is redolent of the ideas of the late 19th and early 20th century social Darwinists. For those of you interested in the way in which evolutionary biological ideas creep into discussions of the nature of human society, it may be of interest to those who do not read in this area that Darwin did not subscribe to the view of unbridled competition even for the Primates. It follows mutatis mutandis that Darwin’s view of chimpanzees applies to human social groupings. This view of unbridled competition may have seemed self evident in the late 19th and early 20th centuries, but seems rather dated now. Yet, the idea refuses to die. A number of Osborne’s social policies could have come right out of early 20th century social Darwinist tracts. One of social Darwinism’s greatest critics was Lester Ward. Alas, no commentator has yet made this connection. It seems so obvious to me. Am I missing something?

Now, one problem with the post by Pilkington is that it is rather technical. And it is a piece on the political economy of the financial sector rather than economics per se. That should make it easier to read, but for some it might not. Basically his message is that by putting the money back into banks, it acts as a feeder mechanism for financial speculation, which is what needs to be toned down rather than reinforced.

I have also included a piece from the Independent by David Blanchflower. His position is that Slasher Osborne’s jobs policies are guided, not by empirical evidence, but by ideology. We all know this, but is is salutary to see figures from the Department of Works and Pensions that reinforce this view. It is impossible to believe that millions of people are scroungers. It defies rational consideration.

Here are the links:

Blanchflower: http://www.independent.co.uk/news/business/comment/david-blanchflower/david-blanchflower-ideology-rules-the-coalitions-jobs-policies-8374461.html

Pilkington: http://www.nakedcapitalism.com/2012/12/philip-pilkington-monetary-policy-and-metaphysics-how-economists-try-to-naturalise-terrible-policies-and-disappear-into-their-own-theories.html

Post contributed by Larry Brownstein

Radical Statistics Issue 107 – Editorial

This issue of Radical Statistics comes out of the February 2012 Radical Statistics Conference, which was held at the British Library in London. The conference focused on the Mis-Measurement of Health and Wealth and was the best ever attended Radical Statistics conference. Five of the eight presentations given at the conference are collected here (we hope to include the remaining three presentations in some form in a future issue of Radical Statistics).1 As a set, the papers published here are very much in the radical statistics tradition: they do not simply critique mainstream methods of measuring, but also reveal the social necessity of challenging such measures and begin to propose alternatives.

The issue begins with Howard Reed’s critique of the ways that UK debt statistics are constructed and interpreted. He unpicks the UK Coalition Government’s ‘maxed-out credit card’ explanation of current government finances, and demonstrates the links between this reading of the data and the ‘austerity’ policies which are responsible for slowing growth in GDP (and therefore exacerbating the debt/GDP ratio). Howard also points out that contrary to popular opinion, the previous Labour government’s real spending was very much in line with historical precedent. Continue reading

Why measure the take up of welfare benefits?

A critical submission on cutting government research and publication of the take up of welfare benefits has been sent from Adrian Sinclair, Professor Emeritus of Social Policy at the University of Edinburgh. He argues that cutting statistics of take up would be “neither acceptable nor responsible”, “would deprive policymakers and analysts of essential evidence for evaluating benefit effectiveness”, would weaken critics of government policy, and would end statistics that have inspired improved evidence in many other countries. Consultation on this issue has ended: Government expect to respond to submissions by 4th Januay 2013.

The closing of take up statistics would also be jumping the gun, as the benefits system in the UK is changing with the introduction by this government of ‘Universal Credits’. A different consultation on production and dissemination of Claimant Count statistics following the introduction of Universal Credit, closing 12th November 2012.

Royal Statistical Society considers cuts to statistics

At its conference earlier in September, the UK’s Royal Statistical Society (RSS) considered whether the government cutbacks had undermined the UK evidence base. The three presentations, two from the UK Statistics Authority and one from Radical Statistics, are summarised below. We will post a blog when a full written version of the Radical Statistics presentation is available.

RICHARD ALLDRITT, UK STATISTICS AUTHORITY kicked off the session, noting that the budgets for statistical work across government vary and are set almost completely independently of each other, restricting the scope for co-ordination in spite of other virtues. It is not necessarily wrong to reduce or reorganise statistical production, and to assess change it is necessary to have a means of assessment, as the UKSA has via its Statistical Expenditure Report series. Maximising value needs to become a conscious focus of statistical work in government.  The case must be made convincingly that expenditure on statistics is not only good value, but better value than alternative uses of that money.

JIL MATHESON, NATIONAL STATISTICIAN focused on the statistical profession within government. The number of Official Statistics had decreased from 1,085 in 2010 to 932 in 2012. Prescription cost analyses from the Health and Social Care Information Centre had ended for example. Statistical budgets were not easy to measure as statistical work was variously described in each Department as research or under policy headings. The Office for National Statistics budget has been reduced by 17% from £161m to £136m during the five years to 2015. However, demand was still strong for statisticians, and permission had been gained to recruit again. Economists and Social Researchers have also grown in number recently. The reduced budget had focused attention on the right question: ‘Are we doing the right things with the budget we have?’

LUDI SIMPSON, speaking for the RADICAL STATISTICS GROUP, gave evidence that analysis has suffered in particular, making statistics of less value and giving greater space for misinterpretation. Compendia and ONS publications had ceased, and health analysis removed from ONS priorities. The UKSA Committee on Official Statistics had commented that they didn’t know enough to assess changes in statistics and had made no comment yet on cessation of statistics. The cuts were greater in Local Government where many senior staff had left. Strategic planning responsibilities have been transferred to District Councils without research support, from Regional Offices and Regional Development Bodies which have been abolished. The further introduction of commerce to public service has resulted in measuring demand rather than need. A full report will be circulated soon to the Stats User Net for comment.

UK job vacancy statistics changing

From ScotStat News 31 Aug 2012: “In late autumn 2012, there will be fundamental changes in Jobcentre Plus handling of employer vacancies and services in support of job search.

“This means that existing National Statistics on Jobcentre Plus vacancies will cease and there will be no further releases on Nomis. Statistics will be made available from the new job-search service. However, definitions will not be consistent with the existing series.

“DWP have opened a consultation with users of the statistics on 15 August 2012. This will run for 13 weeks until 14 November 2012. The consultation can be found on page 4 of the latest DWP Quarterly Statistical Summary. Users are encouraged to respond to this consultation.”

Current use of the vacancy statistics were discussed in July at the Labour Market Statistics User Group. Paul Bivand’s presentation mentions the upcoming changes.

The DWP quarterly statistical summary is also suspended pending revised reporting tools.

Is it useful for government to publish the take up of welfare benefits?

The UK Department of Work and Pensions is running a consultation from July 12th to October 4th on the future of the annual statistical publication Income Related Benefits:

Estimates of Take-Up. It is proposed that the publication is discontinued. The Take-Up publication is sourced from the Family Resources Survey and shows the level of take-up of entitlement to benefit for the six main income-related benefits in Great Britain:

Income Support, Pension Credit, Housing Benefit, Council Tax Benefit, Jobseekers’ Allowance (Income-Based) and Employment and Support Allowance (Income-Related).

The full National Statistics publication can be found at:

http://research.dwp.gov.uk/asd/index.php?page=irb_arc

The consultation can be found at:

http://statistics.dwp.gov.uk/asd/income_analysis/july_2012/take_up_irb_consultation.pdf

Please direct any questions on this to Simon Lunn simon.lunn@dwp.gsi.gov.uk or 0207 449 5361.

Riotstats – Issue 106 of Radical Statistics

Aside

Editorial – by Alastair Greig

The following is a reprint of the Editorial in the special issue of Radical Statistics: Riotstats.

The August disturbances, we are led to believe, brought out the “best” and “worst” of contemporary British society. It is not difficult to find a range of views on the causes and the most appropriate response to the rioting that followed the death of Mark Duggan in Tottenham, London, in the summer of 2011. In this issue of Radical Statistics a couple of articles question the statistical basis for making sweeping empirical claims about the riots. We also have a debate about causes of the riots, which mirrors the one which has taken place in the public domain. Ultimately, however, the statistics do not provide any simple answers, and it remains up to individual readers to decide upon the most compelling approach to understanding the cause and effect of these riots and to contribute to the analysis and dissemination of our understanding of these events.

Roger Ball and John Drury provide, in time-honored Radical Statistics style, a critical analysis of the way in which data have been used, particularly in the media and by politicians, to support various ideological interpretations of the disturbances. The article refrains from putting forward the authors’ own account of the causes of the riots, while providing a convincing account of the way in which dubious statistical evidence appears to have been used to promote narrow sectional and political interests.

Carly Lightowlers and Jon Shute, using the Index of Multiple Deprivation (IMD) and Manchester court records, show that individuals from deprived neighbourhoods were disproportionately represented in the criminal justice system as a result of the rioting. To Carly and Jon, the dominant narratives do “not acknowledge the structural roots of the problem or the counter-productivity of ‘get tough’ policies designed largely to appease voter’s concerns”.

Nigel Williams and Nick Cowen argue that the IMD should be disaggregated. Their analysis shows that not all forms of deprivation were associated with areas in which those ‘rioters’ charged were living. Nigel and Nick argue that although crimes were committed in part due to the deprivation-related incentives of the rioters, these would have been averted with a more conspicuous policing deterrent. This aspect of their analysis echoes similarly dispositional interpretations of the riots (Waiton, 2011), which Carly and Jon take to task in a rebuttal. Among other things, they argue that the “rational choice” explanation that Nigel and Nick present inhibits understanding of the myriad of plausible situational factors at work.

Janet Burja and Jenny Pearce recently authored Saturday Night & Sunday Morning: The 2001 Bradford Riot and Beyond, which documents years of work dedicated to making sense of the rioting that occurred in Bradford 10 years ago, and the legacy it has had on the city. Those riots had a particularly striking racial dimension, not entirely dissimilar to the August Riots and in other ways the participants were very similar to the more recent rioters. Janet argues that, in Bradford, local institutions – the police and local government – needed to recognise legitimate grievances of young, deprived individuals. Perhaps to the shock of some Radical Statisticians, Janet argues that statistical analyses have limitations in understanding, and developing responses to, such grievances.*

We are then left with a letter from Brian Quinn, which argues that the Radical Statistics overpopulation working group in its contribution to issue 105, has overlooked the ecological impact of having another child. This is followed by a brief response by the working group in which they address Brian’s points. The issue ends with news from the newly formed Reduced Statistics group.

Changes in Editorship
I would like to thank Janet Shapiro, who is standing down as editor. She had done a miraculous job as editor, and lately had taken on a hefty workload by herself. I am sure I am not alone in thanking her for the marvellous work she has done for Radical Statistics over the years. Rachel Cohen, from the University of Surrey, will take over from her and I am sure all our members look forward to her contributions in the months and years ahead.

Radical Statistics is a not-for-profit membership organisation, and our journal does not aspire to be exclusively academic. We look for contributions from all walks of life and, thanks to our diverse membership, offer a peer review service upon request. If you would
like to help review for the journal or contribute, feel free to contact any of the editors for further information. This year, we are particularly interested in receiving shorter articles from as wide a range of authors as possible. These may highlight the misuse of statistics or promote results, which may not be given a fair hearing in other settings.

References
Waiton, S. (2011). Wellfare Culture: the English Riots and the Collapse
of Authority. Journal of Scottish Affairs, 77, 54-78.

Housing and communities in England

A briefing paper from Reduced Statistics investigates the UK Department for Communities and Local Government. It had  a 7.8% cut in the 2010 Budget, with further large yearly reductions to 2015. Under the doctrine of ‘localism’, much of its core policy and analysis work in housing, planning and regeneration has been devolved to local authorities. A number of its non-Whitehall agencies which produced statistics have also been abolished or merged. Read the full five page Reduced Statistics briefing on housing communities in England.

Comments are welcome to expand and improve the content of the briefing.

Scottish Government Surveys amalgamated from 2012

The annual budget for four major Scottish population surveys has been cut by £2.8m, reducing the sample size for some questions and omitting a nurse visit and its blood samples. On the plus side, core questions will have a larger sample size in the combined survey. The four affected surveys are:

    • The Scottish Crime and Justice Survey
    • The Scottish Health Survey
    • The Scottish Household Survey
    • The Scottish House Condition Survey

The Scottish Government report summarising these changes was published in November 2011. Comments are requested by michael.davidson@scotland.gsi.gov.uk.

Another Statistics Canada chief quits over cuts and control

Philip Cross, StatsCan’s chief economic analyst, has resigned, citing the reduction of reliable basic information from the Census, and the politicisation of the national statistics agency.

The resignation comes 18 months after the head of StatsCan Munir Sheikh left, forced by the Federal Government to take responsibility for its decision to replace the Census detailed questionnaire by a voluntary household survey. The Federal Government felt that a compulsory census was invasive of privacy, a comment also made by journalists supporting a ‘Mind your own business’ campaign during the 2011 UK Census.

The unknown bias in the Canadian voluntary household survey is blamed for serious uncertainty in Canada’s price index. The consequences of the decision to make the NHS voluntary have only begun to manifest themselves, say economists in Canada. Statistics Canada has had a long deserved worldwide reputation for its independence and authoritative contributions to official statistical methods.  These cuts to the Canadian Census and other surveys caused an outcry and fears of similar downgrading of the statistical base in other countries, as reported in previous entries to this Reduced Statistics blog.

Further cost cuts, due to be announced in this spring’s federal budget, mean the Canadian agency is preparing for the possibility of layoffs.