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Theresa May, making the same stupid mistakes as Jeremy Corbyn

Thursday, May 18, 2017 3:26
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We’ve looked at Jeremy Corbyn’s waffle, now let’s look at Mrs May’s bizarre deliberate blurring of the fundamental difference between rent and earned income.

From The Soaraway Sun:

PM’s pledge to help struggling Brits is part of a drive to shift the Tories to Left — and follows her pledge to cap energy bills.

THERESA May will vow to target fat cat railways bosses, phone firms, landlords and lawyers who are ripping off struggling families. The PM pledges to tackle a stunning range of rigged markets to ease the spiralling cost of living crisis…

The scale of Mrs May’s desire to use the power of the state to intervene in failing markets will stun some traditional Tories who want to shrink the government’s reach.

The people whom she claims to want to ‘target’ are basically all collecting rents and/or abusing a monopoly position. These are not “failing markets”, that’s how markets work when a supplier has a monopoly; his income is largely rent, and rents have nothing to do with the supplier’s costs/efforts etc. The people she claims she wants to ‘help’ are the very people at the bottom of the ladder who are generating the rent and then being asked to pay for it

The obvious conclusion is that the government, acting as agent for society as a whole, is perfectly entitled to ensure a fairer distribution of these rents (by taxing them more and taxing earnings less, or rather more crudely by setting price caps).

(I’m not sure why she singled out mobile ‘phone companies, for sure, some of their advertising is misleading, pricing confusing and they gamble on people being too lazy to change providers, but all in all, you can get pretty good deals, like sticking with an old Nokia on a SIM-only contract for £5 a month.)

We did energy bills a couple of days ago, nothing to add to that.

The issue with “fat cat railways bosses” is that railway companies have a monopoly position as far as many commuters are concerned, so can charge pretty much what they like. And apparently, the so-called privatised railway operators receive twice as much in subsidies (net of franchise payments) as British Rail did (not doubt others will say it’s half as much, who knows?).

You can’t just go round capping train fares if trains are already over-crowded, that makes things worse, but at least you can stop subsidising them (which is halfway to taxing them properly). The “fat cat” salaries are a symptom of this malaise, not the cause. If you address the monopoly/subsidy issues head on, that all sorts itself out.

Unlike Corbyn, she actually mentioned landlords, that’s is always top of the list if you are trying to distinguish between “rents” and “earned income”, so we’ll give her half a bonus point for that.


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