Monday, May 28, 2007

Springwatch returns

Springwatch returns to the BBC. I've been waiting since autumn for it to come back to our screens. Now I can watch the tumbles of barn owl, the stubbornness of a set of badgers, and the daft flirting and courtship rituals of the presenters Bill Oddie and Kate Humble. It also allows me to discuss Kate's great tits with my wife.

Lambeth's green wrapped money grab

I have just received by first letter from Lambeth Council since the present lot got voted back into power last year. And it should not be too much of a surprise, it will cost me money. The Labour councillors have decided to double the cost of parking permits.

Now, a tax rise of around £50 is probably a fairly modest tax rise. I am sure their next council tax increases will be bigger. But what is particularly objectionable is that they have tried to spin it as a environmentally-friendly policy. To quote their letter:

This policy is designed to persuade people to limit non-essential car use, and to encourage people to think how much cars pollute when they come to change their vehicle

There is no chance that this policy will achieve these stated objectives. Lambeth's tax is levied on car ownership, not use. Once someone has decided that they need a car, they will pay the same amount irrespective of whether they drive five miles a week or five hundred. There is no new incentive to limit non-essential car use. And while Lambeth will tax cars with larger engine sizes more, the extra is trival. Parking permits will cost £80 more for the largest cars, a bit more a full tank of petrol. Compared to how much more it costs to buy and run these cars, £80 a year will make no difference to people's decisions.

The main reason for Lambeth to increase the cost of parking permits is to raise cash. Yes, there are restrictions about where the council can use this cash, and the Lambeth will be investing the money into road safety schemes. But such hypothecation is also just a useful piece of PR which are easy to get round. The council can just reduce or slow the growth of funding for these safety schemes from central funds, and divert the savings for their own pet projects.

Saturday, May 26, 2007

How the police are the biggest drugs cartel

In its first annual report, the Serious Organised Crime Agency trumpeted the seizure of 74 tonnes of cocaine. It reckons that this hefty amount is about a fifth of Europe's supply, worth £3 billion on the street. Though street values are always difficult to estimate, SOCA suggests that the seizures certainty cost the criminals who owned them at least £125 million. These figures are wrong. And it's not wrong, as in the price of cocaine is not posted in the Financial Times, so a precise estimate is difficult. Its wrong as in the seizures have probably made the the drug traffickers money.

The reason the SOAC figures are wrong is that they considered only the 74 tonnes they got hold of. They didn't think about the 300 tonnes left behind which is now worth more. Like any other good, with less cocaine on the market its price will increase. So, even as the drug lords suffer losses as some of their merchandise taken, they gain as what remains goes up in price. Research suggests that for every 10% reduction in supply, the price of cocaine increases by 12%. Therefore, the best guest is that the seizures of 20% of the European supply will have benefited the criminals by £25m.

So why, if all that drug traffickers need to do toincrease their
profits is to reduce their supply, don't they do it themselves. Because
they are not, whatever they may call themselves, cartels.
If one supplier reduced the cocaine he sells, there's nothing to stop
another stepping in to fill the gap. But the police, by seizing a chunk
of the market, effectively enforce a partial cartel.

Seizing drugs makes no economic difference to the narcotics industry. Not unless you seize so much that their consumers can't afford the inflated prices. To do that you would need to seize more than half the supply, and that does not seem likely. Of course, that doesn't mean that taking 74 tonnes of cocaine out of circulation is a bad thing. There will be less of the stuff to go around. But whatever sums of money are banded around by the police or the media, it's never going to be unprofitable to met a demand for an illicit drug.

Try again

After about a year of doing nothing with this blog, I have now hope to be somewhat more committed to this blog, especially if Lambeth Council provoke me enough.

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