Ever since the bonds of feudalism began to weaken, the people, in their march towards a fair meritocratic utopia, have looked to shed every bastion of privilege it spawned. The House of Lords is to some the final obstacle in this endeavor.
Indeed, for Liberal Democrats, this constitutional reform ranks as one of their most cherished aims. For them the almost entirely appointed chamber strikes at the very heart of the democratic process and society we all supposedly live under. What we need, they contend, is an almost wholly elected chamber. For them democracy is an inherent good which cannot be outweighed by the faults it brings or the benefits it rids us of.
These democratic devotees disregard the range and depth of knowledge an appointed system can provide. Unsurprisingly, many smart, enterprising and experienced people are uninterested in the enduring trials of electoral democracy – an appointed chamber allows them to help shape legislation without doing so. Nowhere is this more true than in the sciences.
By charging incontinently towards democracy, reformers risk ridding the chamber of the expertise which furthers parliamentary debate, challenges party dictates and improves this country’s laws. There are currently 37 peers serving in the Lords with a scientific background. A survey by the Campaign for Science and Engineering has shown just six would stand for an elected chamber.
Lost would be the former Presidents of the Royal Society, British Academy and British Medical Association. No longer would Robert Winston have the stage which allowed him to usher through controlled work into hybrid embryos, Phil Willis the opportunity to make the NHS the most research led health service in the world, or zoologist John Krebs the chairmanship of the Lords Science and Technology Committee.
The Lords is built for such experts. Replacing them with a ‘seraglio of eunuchs’ – inexperienced party devotees without the depth of knowledge or inclination to challenge a scientist can provide – would make a second chamber redundant. What is its point if not to be a body where minds from all backgrounds, the sciences included, can debate to help construct legislation when it touches upon their area of expertise?
I would understand the clamour for electing all our representatives if the Lords were a body with the power of other second chambers, such as the US Senate. But it isn’t. Ever since the 1911 Parliament Act, the Lords has only been able to delay legislation. In 1949 the length of time they could do so was reduced to just two parliamentary terms, or one year. And in 1997 all but 92 of the hereditary peers, just 12% of the chamber, were removed.
The Lords is there to provide expertise, not to be a pawn in Coalition negotiations. It is a product of centuries of deliberation, compromise and resolution over the way our laws should be shaped. We need its experts, and especially its scientists. Not only can they contribute to their specialism when legislation touches upon it, but they bring the type of questioning minds that elected democracies too infrequently produce.
Scientists succeed by being meticulous researchers, rigorously testing their assumptions, and challenging received wisdom. Martin Rees, Royal Astronomer and one of our Lord scientists, was right to say “we are all depressingly ‘lay’ outside our specialisms”. The point is, regardless of the subject, the scientist’s questioning mind is a useful (and refreshing) contrast to the passive political partisans who dominate the Commons. Let us not rid ourselves of them.
This article first appeared in Spark, the University of York’s science magazine.
Until last night the US election looked to be a forgone conclusion. The first debate between Governor Romney and President Obama has changed that. Mitt Romney, so often disengaged, vague and robotic, was likeable, passionate and specific. He spoke with clarity and confidence. He had a purpose to his words.
The President, who swept to victory four years ago on a wave of rhetorical brilliance, was equally surprising. The restlessly energetic passion of 2004 and 2008 was replaced with a professorial aloofness. His attempt to appear presidential left him cold and hesitant. When he turned to the camera at the end of the night and asked the voters for four more years, he did so with an utter listlessness in his words.
When Obama speaks with passion there are few sights like it. He stresses his words, leans into his sentences, and has a infectious energy. He raises his voice, he nods his head, he turns to the audience. He talks about the folks he met on a family farm in Iowa or a small town in Ohio. He names people, he pulls you in, he tells you their story and he shows you why they prove America needs healthcare reform, or more jobs, or better schools.
At his best he is unafraid to name and shame those who caused the mess he is rallying against. He talks about the excesses of Wall Street, the Republican faith in deregulation that facilitated it and the irresponsibility of the Bush administration.
Last night he did none of those things.
When Jim Lehrer, the night’s wholly incompetent moderator, turned to Wall Street regulation – something you think Republicans, especially one who earned $14m last year and paid Wall Street-level taxes on it, would be remorse to discuss ¬– he talked in the abstract of the need to regulate finance. He lazily recounted Keynesian theory without attribution or resolution, and heard a clarity that escaped him in return. He had no answer to Romney’s charge that his reforms have forced 122 small community banks to fail, or done nothing to stop Wall Street banks being too big to fail.
Rather than state something with assertion, as Romney did so successfully, Obama would qualify everything with an academic hesitance. By prefacing his answers with a litany of disclaimers – ‘it was estimated that…’, ‘independent studies looking at this said…’, ‘every study has shown…’ – they lost their force, and allowed Romney to say what most people watching were thinking:
‘Now, you cite a study. There are six other studies that looked at the study you describe and say it’s completely wrong. … There are all these studies out there.’
Romney understood the need for clarity. Obama likely thought his answers recognised the complexity of issues, but doing so is pointless when done in a meandering and vague way. When asked about his balanced approach to cutting the deficit, Obama rambled criminally without any force for over 500 words, on everything from Medicare to schools to oil tax breaks and companies overseas. Romney noted as much and smartly promised to go through each ‘one by one’.
A CNN post-debate poll reflected the subdued mood among the Obama supporters here in Arlington, Virginia. By 67% to 25% Romney was declared the victor. While he went into the night trailing the President in seven of the eight swing states which will decide the election, and needs to win far more of them than the President, last night’s debate has finally made this a race.
This November Mitt Romney – former Massachusetts Governor, private equity millionaire and the Republican Party’s candidate for President – will attempt to prevent President Obama serving a second term. On Saturday Romney announced Wisconsin Congressman Paul Ryan as his Vice-Presidential nominee and the running mate with whom he will attempt to do so.
Romney faces a daunting electoral map. To become President you have to win the most Electoral College votes. You win these votes by winning states and states have votes according to their size. On the basis of past elections and recent polling, 43 of the 51 state contests can be labeled as either for Mr Romney or Mr Obama.
The problem for Romney is, when you add up the votes from these states, Obama is within just 22 of victory; he does not need to win many of the 100 electoral votes the remaining eight states offer. The second problem for Romney is that Obama currently leads in seven of the eight.
If Obama wins Ohio – where he leads by nearly 5% points and has a 7 in 10 chance of winning according to the New York Times’ Nate Silver – he needs just one other state, and Silver ranks his chances of winning Nevada as greater than 3 in 4.
This is the context in which Romney’s selection of Ryan must be seen. In choosing a Vice-President, Romney needed to pick someone who would either help him win one of the key states – Florida, Ohio, Virginia, North Carolina, Colorado, Iowa, Nevada and New Hampshire – or appeal to a key demographic. Ryan does neither.
The Romney campaign is claiming that picking Ryan puts his state, Wisconsin, into play, but it has not been won by a Republican since 1984 and Obama leads there by over 5% points. Analyses of the effect a vice-presidential pick has on his home state are full of qualifications, but, analysing data since 1920, the New York Times has estimated it does not add more than around 2% points.
The likelihood of Ryan helping Romney carry the state is also diminished by Ryan being a Congressmen. He represents only one of the state’s eight districts, and polling has shown he is relatively unknown in other parts of the state.
Picking Ryan does not help Romney with women or Hispanics, two key groups whom he has alienated by catering to far-right positions on contraception and immigration in a bid to win his party’s nomination. By choosing Senator Marco Rubio of Florida or Governor Susana Martinez of New Mexico, Romney could have appealed to the latter, whom Romney is struggling to support as much as any presidential contender since 1996.
Ryan, as one commentator noted this weekend, instead looks like Romney’s sixth son. At 42, and as a former Congressional staffer elected to the House at 28, he not only lacks the ‘business experience’ Romney has touted as justifying his candidacy, but hampers Romney from running the ‘outsider’ campaign which propelled four of the five Presidents before Obama to the Presidency. In Ryan, the Obama campaign has an embodiment of the Congress just 17% of Americans approve of.
Nor does he have the foreign policy chops which justified Obama’s selection of Senator Joe Biden in 2008. He is however, counter Romney’s aides, the man who crafted the Republican alternative to Obama’s economic policy, and the economy is by far the most important issue in any Presidential election. That is undoubted, but Ryan’s prescriptions are divisive and controversial, and Romney is far from campaigning on the swingeing healthcare cuts at the core of them.
The initial polls contained little to cheer the Romney camp. Ryan’s unfavourability ratings are the highest of recent picks, and, when asked whether they thought it a good selection, voters ranked the pick 6-7% points worse than the Biden and Palin choices in 2008.
Ultimately Romney is trailing and needed to use this, one of the few opportunities he has left, along with the party convention later this month and the debates in October, to change the dynamic of the race. By picking Ryan he has only managed to do so for the worse.
The LIBOR scandal is likely to further erode the public’s respect for and trust in the banking sector. Confidence in banks plummeted following the 2008 financial crisis, as a British Social Attitudes survey has shown. In 1994 63 per cent of the public said banks were ‘well-run’; by 2009 just 19 per cent said so, which was ‘probably the biggest change in public attitudes ever recorded by British Social Attitudes’.
This is the context in which the LIBOR scandal must be seen: it is likely to further worsen the dire esteem banks are now held in. This is likely because the scandal has uncovered criminal behaviour that the public has little reason to look favourably upon. Traders at Barclays and other banks manipulated the rate – which underpins $800 trillion -worth of financial instruments, from credit card rates to mortgages – to benefit their own investments.
The uncovering of such institutional behaviour reinforces the narrative on banking that began to be written when the financial crisis hit: bankers are duplicitous, immoral, and incapable of self-regulation. Calls for binding shareholder votes on executive pay and ‘claw-back’ powers for boards are likely to grow louder as negativity towards banks worsens.
The scandal is likely to have such an effect partly because banks have failed to show why the reputation the financial crisis earned them is unjust – loans to small businesses have failed to meet targets and the gap between executive and entry-level pay has continued to grow exponentially, without any corresponding growth in the effectiveness or quality of banks.
Manipulating LIBOR could be even more damaging for the banking industry than the 2008 crisis, because it cannot be blamed on the unseen consequences of the global financial system. Just 11 per cent of the public gave ‘British banks’ primary blame for the financial crisis when asked by Populus in October ‘08. But rate-fixing has fewer guilty parties and it is more evident its perpetrators knew it was wrong. The series of emails between traders – in one exchange, a trader wrote, ‘Dude. I owe you big time!’ to a submitter who had adjusted the rate for him – has left the industry incriminated in a way it was not before.
The LIBOR scandal is a product of banks’ investment banking divisions, but the commercial arms of the five major UK banks are also suffering by association. The Co-Operative Bank – an alternative – has seen a 25 per cent increase in applications in the past week; public attitudes towards high-street banking are not increasingly negative per se, but attitudes towards commercial banks with investment arms are.
As the Economist wrote this week, “This could well be global finance’s ‘tobacco moment’”. Lawsuits are likely, which will only further worsen attitudes as details emerge.
This graph shows how much the UK’s top 50 universities by teaching funding (actually the top 49 plus the University of York) spend per student. The figures are again from 2009/10 and 2008/09. The darker blue shows those who receive relatively little funding (c. £2,000 per student) – such as Leeds Met, UEL, and Warwick – and the light blue shows those who receive twice as much – Imperial and Queen Mary.
Oxbridge’s ability to set far more work than other Russell Group universities seems to have little to do with its HEFCE grant – their funding per pupil is quite ordinary.
This is a scatter graph showing the relationship between research funding and student numbers at UK universities. The data for research funding is from 2009/10, and from 2008/09 for the student population. Which isn’t brilliant, but I reckon more up-to-date data would be consistent with this picture.
The Open University, Institute for Cancer Research and London School of Hygiene have been excluded from the results as anomalies. The correlation co-efficient without them is 0.402, indicating a gentle positive correlation between student population and research funding.
This graph shows the relationship between teaching and research funding. These variables are similarly correlated; r = 0.435. No strong link though, again.
There is, however, as expected a clear link between teaching funding (x-axis) and student numbers (y-axis); r = 0.613. Generally, the larger the university, the greater the teaching grant. Universities with relatively small funds per pupil lie above the regression line (Leeds Met is the upmost point); those below it are relatively well funded per pupil.
In June 2010 George Osborne delivered the Coalition’s first budget. The economy, he declared, would grow by 2.3% in 2011, and a cut in corporation tax to record lows would help it do so. The rate, then at 28%, would fall to 24% by 2014, sending a clear message that Britain is ‘open for business’. Nearly two years later, after growth of just 0.4% in 2011, the Chancellor returned to the House to announce further cuts; the rate would now fall to 22% by 2014.
Mr Osborne’s reasoning is that if you cut tax for businesses they will have more money to hire workers and re-invest in their business. But such an analysis underlooks the fact that companies are often sitting on large cash piles, yet are not prepared to put them to use. What is needed are incentives to encourage companies to spend more of the cash they have.
As Andrew Smithers of Smithers and Co. has recently pointed out, there currently exist perverse incentives for corporate management to not invest in their business. Executive pay is largely linked to share prices, and in the short run shares are more likely to rise if management keeps hold of its cash.
The insecurity of management leaves firms run for short-term executive wealth, rather than long-term gain. The current system incentivises those running corporates to do exactly what is least helpful to the UK economy. Policy must therefore focus on combating these unhelpful incentives, and putting into place a system that encourages investment.
One such incentive the Chancellor could offer would be to make his corporation tax cut contigent on companies paying their workers more. Part of the reason growth is so sluggish at the moment is consumers are wary of spending the little money they do have. This is understandable when you see that pay rises have lagged behind inflation over the past four years (see chart).
Consumers need more money. If they have a higher disposable income, they will spend more. This is particularly true for those on lower and middle incomes. You could target the pay rise to these workers, both because they are more likely to spend an extra £1 earned, and because they are arguably more in need of a pay rise – the top 1%’s share of national income has risen from 6% in 1979 to over 16% as of 2005.
Ed Miliband proposed a similar policy last February as part of his campaign to get firms to pay the living wage. Critics of the idea highlight how pay is just one way workers are compensated – what if a firm did not offer a pay rise but gave their workers some other, more lucrative compensation? Equally, some divisions within a company may be able to pay their workers more when others cannot. And some companies cannot afford the price of such a tax cut, but may be just as in need of one.
These criticisms are valid; the issue is complex. But simple corporation tax cuts seem to be an inadequate solution. The government needs to find a way of boosting consumer spending without slashing spending even further. Such a policy could encourage investment from firms currently reluctant to invest in an uncertain consumer. Similarly, firms could be offered tax breaks for investing their cash in capital projects. The government’s current prescriptions are failing. A more direct approach is necessary.
Last week Kent Conrad, the Senate Budget Committee Chairman, seemingly introduced a budget. But the bill he marked up will not be brought to the floor of the Senate – doing so would be pointless in the partisan environment he now operates in.
With no one party controlling all the institutions of government, one might expect legislative gridlock. But divided government has not always led to such inaction. For all but two of the 28 years Presidents Eisenhower, Nixon, Ford, Reagan and Bush Sr. were President, Democrats were in charge of at least the House. And yet those Presidents managed to govern. As David Mayhew has argued, divided government did not lead to the introduction of fewer innovative policies. And while the innovativeness of policies is contestable, what is undeniable is that a spirit of bipartisanship existed then and no longer does.
Olympia Snowe’s recent decision to not seek re-election attests to this. A long-serving moderate Republican Senator, she highlighted Reagan’s 1986 tax reforms, which passed through a Democratic House, as an example of a bipartisanship that no longer exists. As Snowe said, ‘there’s no longer a reward for consensus building’.
Why is this intractability so acute now? It has a great deal to do with the rise of the Tea Party. This rise of the Republican Party’s less moderate and more ideological wing has enforced an ideological unanimity, and deterred policymakers from compromising. As this publication noted in August, moderates feel far less able to make a deal with Democrats when the threat of a primary challenge from the Right hangs over them. Those that do face the prospect of being ousted, as three-term incumbent Senator and moderate Bob Bennett was in 2010. As this blog has noted, the Republican Senator Orrin Hatch only survived a recent Tea Party challenge because he moved to the right over the past two years.
The power of this wing of the Party has helped leadership whip their members into an uncompromising block. One might expect this would marginalise the GOP, but quite the opposite has happened: Republicans have managed to drag politics to the right. The only way for Democrats to pass anything now is to capitulate to the absolutist position Republican leadership sets down.
The GOP’s refusal to countenance tax rises during the August debt ceiling crisis led to a deal made up solely of spending cuts. The recently passed JOBS Act forced Democrats to gut investor safeguards in a bid to get any legislation on jobs – a deal which even Bloomberg thought inadvisable. As Paul Krugman has said, bipartisanship in Washington now really means a compromise between the centre-right and the hard-right.
Part of the problem for centre-left Democrats is that there is no equivalent ideological force discouraging moderates in the Party from compromising. But, even if there was, that would not come without its disadvantages. When Democrats took back the House in 2006 they did so largely because they choose centrist candidates to compete in Republican districts. This ‘big tent’ approach gave them majorities in both Houses two years later, but meant they had a large number of Democrats In Name Only when they attempted to enact leadership’s agenda following Mr Obama’s election.
Many of these Blue Dogs were voted out in 2010, but by forcing those who remain to follow the party line Democrats would imperil their colleagues’ re-election chances. The consequence of the ‘big tent’ approach is that you are the party who compromise, because you are the party who has moderates. But if the price of accommodating moderates is capitulation, for what purpose are you accommodating them? If doing so does not help Democrats achieve what they ran for office to do, perhaps they try adopting the uncompromising absolutism that has served Republicans so well.
 Mayhew, D. (xx). Divided We Govern. Mayhew comes up with a mean number of 12.8 innovative policies introduced under unified government, as opposed to 11.7 under divided rule, giving a t-value equal to 1.13, p < 0.5; statistically insignificant.
 The Economist, ‘Time for a double dip?’, 06/08/2011: ‘Any representative who strays too far from the party line will face a challenge from an ideological purist’. Also, ‘the present House…is the most starkly divided yet’
 New York Times: ‘The Hijacked Commission’, 11/11/10
With the news that George Osborne is set to give a detailed breakdown of how taxes are spent in the Budget tomorrow, here is government spending by department for 2010/11:
|Welfare & Pensions||23.2%|
Following today’s announcement that Apple, the world’s largest company, was to start paying a dividend for the first time in 17 years, I was curious to see whether there was a relationship between how big a company is (market cap) and how much it returns to shareholders each year (dividend yield %).
I looked at the 100 largest companies in the UK, as listed in the FTSE 100, and, interestingly, there was no correlation; the correlation coefficient was just 0.105.