It is Obvious

Chris Rick has got altogether too much to say

Archive for June, 2010

Lest they be forgotten

Posted by chrisrick13 on June 28, 2010

It is obvious: goldfish have a short attention span but long memories.

Do you remember two years ago when there wasn’t a credit crunch?  There was one really and had been one for a while, it was just that the effects had yet to surface.

What was in the news at the time?  It was consumer debt.  Long before we realised how much the government was borrowing on our behalf we had stomped out there and borrowed it for ourselves.  The level of debt that we are prepared to incur is affected by many factors.  The level of debt we can support is defined by the ability to pay the interest.  In the previous 10 years of low inflation our salaries had barely moved yet we had nearly tripled our personal debt and servicing burden.  There were plenty of people close to the edge as a result…they still are.  The credit crunch has been their big saviour with interest rates down to 0.5%.

This month, for the first time, a member of the monetary policy committee voted for a rate rise.

It is obvious: goldfish have a short attention span but long memories both of which are a lot longer than those that humans possess.

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Bad Idea – 2

Posted by chrisrick13 on June 23, 2010

It is obvious: there are a lot of really good ideas.

I have been a software contractor most of my working life.  Some long time ago I formed a limited company and hired myself out by the hour to build software.  A lot of people did the same.  It was a way of earning big money and not having to give up the technical skills to become a manager.  This meant that there were a lot of people who developed very deep but narrow skills.  They did a job and moved on.  This meant that companies did not have to hire someone permanently when they only needed that job done for a few months.  They also got the deep skills.  In the UK there were a lot of very successful projects that used this model.  We had a lead on the rest of the world.

I paid myself a salary…and my wife, who did some stuff in the company but mainly brought up our kids who had to be introduced to me on the odd occasion that I was at home.  I also paid a dividend for an increasing amount of the money that flowed into the company and out to me.

I certainly avoided paying some tax and a lot of  National Insurance contributions (NIC) as it is not levied on dividends.  It was not all plus as there are plenty of downsides to being a contractor.

Then the Labour party came into power.  They introduced the infamous IR35 regulation which was a very messy way to stop contractors paying themselves dividends to avoid paying NIC.  It had the immediate effect of shutting down the lead that the UK had on the rest of the world.  Then a lot of bright people turned a lot of their energies from writing software to avoiding IR35.  A whole industry sprang up around it.  A lot of older contractors decided it was time to retire taking their skills with them.  The government predicted £600m income but actually lost more trying to implement it than they got in extra revenue…and destroyed a UK winner.

There was a better solution.  NIC is a tax.  It is just not called one.  It applies to the first £12,000 or so of income and therefore is uniquely targeted at the low paid.  Companies also pay it.  As it is on a per employee basis it is an added cost to employing someone.

What we should do is ban NIC.  Increase income tax.  Increase corporation tax.  Make it neutral (to start with).  A lot of low paid will be taken out of tax all together.  Companies will not pay to employ people but will pay when they are successful.  Administration of the tax collection will be hugely simplified.  A lot of people will move to a position of understanding their tax affairs fully.

I find it difficult to think of too many downsides other than the political one of increasing taxation and not getting voted in next time and by simplifying things reducing the number of voters that can be fooled in a budget.

So it hasn’t happened and it never will.  I wonder why not?

It is obvious: there are a lot of really good ideas but they never happen

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Bad idea – 1

Posted by chrisrick13 on June 13, 2010

It is obvious: I have a lot of bad ideas.

I am in a new job and have little time at the moment.  However I am keen to start my ideas thread if only to see the even better ideas that come back at me.  I have quite a few, but I can start with an old favourite of mine, get it out the way as part of the idea thread, and move on.

My local bank branch used to be a short walk away.  15 years ago they closed it and the nearest branch is a car drive away.  I could walk it, but it would take to much time.  When I get to the high street I can park in a side road next to the bank on a yellow line or down the road a ways in a council car park.

I reckon I have averaged a visit a week for that time which is 750.  Call it 700.  By parking outside the bank I have avoided £350 in car park charges and saved two 5 minute walks, which is about 5 days of my life.  If a meter-maid catches me it will be a £30 fine.  I can afford quite a few of those before I am behind the curve and in 15 years have not been caught once..

Suppose that the fine was upped to £100.  I think I might have opted for the car park.  If it was £300 I certainly would have.  If my car would be crushed for the offence then I certainly would not illegally park.  This is someone else’s idea because car crushing makes the penalty proportionate for your income.  If you drive a Ferrari the cost is much more than if you drive a Nissan Micra, and matches your means quite well.  It is very simple that if the penalty for an action is not appropriate it is ignored.  Along with this I could start to moan about not enforcing regulations.  Do not make a regulation unless you are prepared to enforce.  Not only will it be ignored, but it will dull people’s response to other regulations.

Therefor, big illegal parking fines will cut down illegal parking.  But it costs money to catch them and extract the money (better than crushing as the hard pressed government can get some much needed cash from illegal parkers.)

There is a way to stop illegal parking overnight and at little cost.  Introduce the death penalty.  Have just half-a-dozen wardens and put all sorts of rumours out about where they are operating.  After the first execution there would never be another illegally parked car…apart from suicide attempts.

It isn’t going to happen though I do know a magistrate I could try and persuade.  My point is that there ought to be some other mechanism out there that would have a similar effect.

Edward de Bono had an idea that was implemented in Australia somewhere.  The population could park their cars anywhere except for some places where safety was important.  To be allowed to park they had to have their headlights on main beam.  The wardens monitored safety places with zeal and a couple drove round looking for parked cars with no headlights on.  If they were off they were offending by staying too long and ran their battery out or just didn’t put them on.

That was some time ago.  There is a new twist to this.  Simply allow people to send in a picture of the front of a car with no headlights on to the parking wardens.  Just click on the Blackberry camera and text the picture.

I prefer the death penalty.

It is obvious: I have a lot of bad ideas and some of them are quite good.

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American Holiday

Posted by chrisrick13 on June 6, 2010

It is obvious: I have been on holiday.

I never thought to mention it.  Probably as well or someone would have worked out who I was and come round to empty the house…actually not a bad idea.  I could pay someone which would save me a lot of bother.

There have been some superb comments.  Thankyou to everyone.  They all improve my understanding of the world around us.

I didn’t notice any sign of a recession in the US.  Maybe I was in all the wrong places.  With the new slim-line pound everything was expensive.

Having been away for two weeks I can’t comment on economics in the UK as I have missed it all.  The US does not care two hoots about the UK or the euro with barely a mention of either all the time I was there.  The BBC World Service being the one redeeming feature of the radio as I drove around.

I did chance on the History Channel and saw an interesting programme.  It started talking about roads in the US.  They are breaking up and the road authorities have no money to repair them.  They talk of ‘patch and pray’.  Saw one road over a bridge where holes in the road allowed views of the river below.  Having driven 2000 miles these last two weeks I can believe it.

I walked across the Brooklyn Bridge.  This has thin slats on a raised walkway between the road lanes.  All was well until I looked down and again saw the river hundreds of feet between the slats.  From there, not daring to look down again, I could see three huge bridges.  I could also almost see the Verrazano Narrows bridge and was not far from the George Washington bridge and the Whitestone bridge.  Between them they exceed the large bridges in all the UK by some measure.  Travelling to Baltimore we crossed almost the same amount of large bridges again.  They are falling down, 50 times the bridges we have in this country at least.

They have 3,000+ dams, whereas we have less than 100.  They have already had several collapses and not nearly enough inspectors.  A lot of scared people living in the shadows of dams were interviewed.

The program then moved onto water sewage and leaks.  Their problems are the same as ours except 50 times worse.  Still there is not the money to fix them.  It even showed a whole town collapsing because of leaks from a very large main that runs under it.

In short the infrastructure that was built 50-80 years ago had a lifetime of 40 years.  They have a major problem.  It makes our infrastructure problems look trivial and most of the states have no money to solve any of the problems.

It is obvious: I have been on holiday and nothing has changed anywhere in the world.

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