Dodgy data and malevolent mobiles

Afternoon all,

 Apparently Labour had a very cunning plan – a Sue Gray shaped conspiracy to bring down Boris Johnson. Which will be a surprise to anyone whose paid attention to the “more in common with Baldrick than MI5” Labour Party over recent years. It’s probably also news to the police who dished out fines galore for rather heavily photographed partygate piss-ups, or the MPs who think Johnson may well have misled Parliament. Basically the entire deep state must have been in on the act.

Tories trying to win the next election, rather than relitigate their second to last Prime Ministerial resignation, should probably worry more that Starmer’s appointment of Sue Gray is a cunning plan to get Boris/partygate back on the front pages just as Rishi Sunak was making some progress on his “I get problems fixed” message. That might actually be the most immediate benefit to Labour: with 18 months to an election and 9+ months gardening leave perfectly possible, it’s far from certain Gray will be able to do much of the transition planning she’s been hired for. Which might make the appointment a long way from cunning…

Enjoy our reads, and have a great weekend whether you’ve got energetic gardening or chillaxed gardening leave planned.

Torsten

PS – the key to the success of TOTC is the crack RF team that help me out with it. That team is expanding! So come join us – the deadline’s Wednesday….

Moving memorials. Memorials can change the present, not just remember the past. So finds new research on the impact on votes for the far-right AfD party of thousands of “stumbling blocks” (metal cobblestones engraved with Holocaust victims name/date of birth/fate) installed around Berlin. The memorials are associated with a 1 to 2 percentage point fall in the vote share of the AfD. The paper conjectures that one reason for this may be that these blocks are installed in front of the homes in which those commemorated lived, offering a clear reminder that the victims of the Holocaust were members of that very community. Making remembrance real is a powerful thing.

Feisty French. The French Revolution (1789) followed hot on the heels of the yanks’ version (1775-83), but how closely linked were they really? The French got the taste for it fighting with the Americans argues a new paper examining where the French troops sent to help fight against the British came from. Using a regiment which was unable to travel due a ship shortage as a control, the paper shows that regions that sent more troops to America also did more revolting (rioting/secret society forming/volunteering to fight) during the French Revolution. The effect is driven by soldiers who lived in America for two years (some were based in the Caribbean) suggesting exposure to US society, rather than just doing some fighting, was important. Turns out it wasn’t just Bruce Springsteen being Born in the USA.

Working welfare? Britain’s benefit system isn’t working, is the argument from the always impressive Kayley Hignell from Citizens Advice in her parting thoughts before maternity leave (good luck Kayley). The diagnosis is that a fixation on short-term cost cutting as the policy objective, and on financial incentives individuals face as the lens for policy making, has built a system that doesn’t work for those with remotely complex needs – particularly those in ill-health. Solutions-wise, the blog rightly notes that we’ve created a mad situation where people have a strong incentive to get themselves assessed as being too sick to work (DWP and No. 10 would agree) and calls for investment in occupational therapists to engage in the practical work of helping people into work. A long, but worth your time, read.

Texting teens. TOTCs regulars will know I’m a bit of a broken record on this so I’ll keep it short: phones are making the youth unhappy. Noah Smith spells out the argument clearly. 1) The surge in mental ill-health (of moderate and serious kinds) over the past decade coincides almost exactly with the roll-out of smart phones – and the instant access to social media they provide. 2) Almost every causal study finds phone use = unhappiness. There’re loads of benefits to modern mobiles obviously, but I reckon we’re going to spend a decade debating this before concluding it was mad we ever gave 11 year olds crack cocaine iphones.

Time trialling. There is a good warning for all of us doing economics research in Brian Albrecht’s latest newsletter. The basic point is obvious but important: picking the time period over which you look at data to prove the point you want – what he calls t-hacking – isn’t cool but is common. He focuses on the example of people looking at rising profits in the US since the early 1980s – noting discussions often ignore the fact that was the trough for profits. If you want a UK example think about labour market inactivity debates. If your starting point is inactivity levels since the pandemic you’ll say inactivity is up lots and panic. But if you go back to the financial crisis you’ll conclude inactivity is down and chillax. In research, like life, it matters where you start from.  And of course, your actual starting point should always be with RF research.

Chart of the week

There’s a Budget 12 days away – what’s it likely to contain cost of living wise? As we predicted, delaying the Energy Price Guarantee rise to £3,000 in April is a slam-dunk certainty with a £3 billion one off price tag. But another high-profile rise planned for the next month is more problematic for the Treasury to cancel given its permanent cost: the (estimated) 12p rise in fuel duty. COTW (a preview from our pre-Budget report out on Monday) shows there are actually two rises going on – the usual RPI uprating and the end of last year’s temporary 5p cut. Scrapping both would cost around £5 billion a year. That’s not cheap, and is part of a far bigger challenge for HMT: if there’s no rise in Fuel Duty this year real term revenues are set to have fallen by almost half this century by 2027-28. The routine cancelling of fuel duty rises + the more recent consumer shift from gas guzzlers to electric vehicles = a huge fiscal hole. What to do? In the short term, the Chancellor may cancel the RPI uprating but allow the temporary 5p cut to expire (petrol prices are down by around 40p/litre since the summer). And longer-term, road pricing has shifted from the interesting to ponder box into the urgent to implement one. Forthcoming research for The Economy 2030 Inquiry will show how that might be done…