Tuesday, June 8, 2010

Today’s Financial Times.

I’ve read some daft articles in my time, but this one by Jeffrey Sachs of the Earth Institute of Columbia University takes some beating. This is not the first time I’ve spotted nonsense emanating from this “Earth Institute”.

Sachs ends by claiming that “To rebuild our economies the watchword must be investment rather than stimulus.”. Given that we have record amounts of investment lying idle as a result of the recession, investment is not the immediate priority is it? Doh.

Update (9th June). After writing the above I noticed that Sach’s article came in for a drubbing by Bill Mitchell. As for some of the anti-Sachs language used in the comments after Bill’s article, I wouldn’t repeat some of it – not even on this verbally risque blog.

On the opposite page of the F.T. there is a better article by Philip Stephens, “Free bus passes will test Cameron’s mettle”. As Stephens rightly points out, it is a farce to hand out free bus passes to those who can afford to pay the full bus fare.

But there is more nonsense involved in the whole pensioner travel concession farrago.

First, there are good arguments for some subsidies (e.g. health and education). Thesearguments do not apply well to pensioner travel. For example in the case of health,many people in the absence of the National Health Service would face sudden largebills for medical treatment. In contrast, the bill for essential travel, like going to theshops, is a predictable and modest weekly expense of the same order as the weeklycost of food ( for which pensioners are not given concessions ).

Also, concessions are a poor means of supplying transport facilities to pensioners since about a third are not well served by public transport.

In contrast,if we abolish the entire pensioner travel concession system and hand out the money to less well off pensioners virtually all less well offpensioners get “transport subsidy money” since this money is contained in anincreased state pension. Under a no concessions scenario, pensioners can spend their“subsidy money” on for example home delivery of groceries, taxi trips or subsidisingrelatives’ car running costs where the latter do the shopping.

If memory serves, the rot was started many years ago by Ken Livingstone (former Mayor of London) when he was in charge of a London borough. That borough was the first in the country to issue pensioner bus passes, I think. Winning votes by handing out bread and circuses has always been Ken’s main skill.

For more on this, see here.

Unfortunately there is great emotional appeal in "helping pensioners get around". And emotion beats logic every time.

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