The Trouble with AirBnB

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There’s been a massive increase in the number of spare rooms,or even entire flats, offered for rent on AirBnB, across the UK and worldwide. We’ve recently identified several within the building where I live. However this is cause for concern, because there are quite a number of issues with AirBnB. Put rather bluntly, if you are offering rooms on AirBnB you might be breaking the law and you are also possibly jeopardising your neighbours financial well being.

So what’s the problem? This clip from Adams ruins everything sums up the main arguments against AirBnB. Cracked also reviews the major arguments against it.

But for starters, if you are offering rooms on AirBnB what kind of mortgage do you have? Because if you’ve got a owner occupier mortgage that only allows you, your family and non paying guests to stay in the property. Even with a buy to let mortgage only registered tenants on a long term least (generally more than 90 days) are allowed to stay. If you are renting rooms, or worse the entire flat on AirBnB, then you are almost certainly breaking the terms of your mortgage. In theory if the bank finds out, they could tear up your contract and demand immediate repayment (i.e. you get 30 days to come up with say £100,000 or lose the house!).

And this issue of who is allowed to stay in the property is not some minor bureaucratic point. People tend to prioritise mortgage or rent payments above all else, as they don’t want to end up homeless. So the risk to the bank of you defaulting on a mortgage loan is relatively low, hence why they can get away with offering such a low rate of interest on such a large loan. By contrast hotels and B&B’s are a much more risky business (recall Trump’s four bankruptcies involved exactly these sort of properties). They are much more likely to go bankrupt, hence why they have to put up a higher proportion of starting capital and get charged a higher interest rate. While some banks are starting to offer AirBnB compatible mortgages, they generally involve a higher rate of interest and a larger deposit. So unless you are on one of these mortgages, you are likely to be committing mortgage fraud.

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Then there’s the issue of home insurance. Again, home insurance assumes you are either renting (long term) or living in a house you own. AirBnB type arrangements aren’t covered. Some insurers are starting to offer AirBnB compatible policies, but as with the mortgages these cost more than a conventional insurance policy. If you are renting out rooms under AirBnB and you lack an appropriate policy, then you (and any of your guests) are likely to be uninsured and there is very little chance of your insurer paying out in the event of a claim.

Also the above only applies to home insurance. There’s also the issue of getting liability insurance (in case you being sued by a guest if he falls in the bath tub or tumbles down the stairs). Then there’s your block insurance if you are in a larger apartment complex. Hotels and B&B’s have to comply with a long list of safety requirements to be given permission by the local council to operate and too convince any insurer to provide them with cover. e.g. does your building have a sprinkler system? I know mine doesn’t, but I know that in some countries hotels (above a certain floor height) are legally required to have one (and this applies even if the building is a mixed development). Hotels tend to have better security arrangements, CCTV, key cards and codes that expire every 24hrs, security guards, etc.

Hotels aren’t doing all this for fun, they are doing it generally because their insurance policy will be voided if they don’t. e.g. in the UK there are no sprinkler requirements, but your insurer (or fire officer) may insist on expensive modifications (e.g. putting in fire walls and new fire escapes) if you don’t have a sprinkler system.

Now I’m not usually the sort of person to get worked up about health and safety, but this is one situation where the H&S killjoys experts have a point – hotels, B&B and hostels do catch fire, there have been several large and often fatal incidents over the years (e.g. the MGM Grand fire or the Downunder Hostel fire in Australia, hence why the regulations are so strict. And no, small B&B’s aren’t exempt, you still have to comply with at least some minimum level of safety.

This raises the question as to whether, in the event of a claim, would the insurance company pay out. My guess is they’ll probably take it on a case by case basis. If a fire started say in an AirBnB rented property, they’d likely pay out to any of the neighbours effected, but refuse to pay out to the AirBnB owner (so he gets saddled with maybe £50,000 of fire damage and he’s still in debt to mortgage company). If it was an issue nothing to do with any AirBnB property (e.g. the roof caves in), they’d likely just pay out and not ask any questions. However in a scenario where say a large number of flats in a block are AirBnB and say the building burns down, the insurer might well argue that the block was essentially functioning as an illegal hotel, thus invaliding the policy and they are within their rights to refuse to pay out to anyone.

Suffice to say, its hard to say which way things could go, it will likely take a few test cases to sort out. However the implication is that if you’ve got AirBnB owners in your building, there is a risk that you might not be fully insured anymore. So anyone renting rooms via AirBnB is having a potentially detrimental effect on their neighbours. Quite apart from all the other issues with large numbers of people coming and going at odd hours.

And as I mentioned earlier, you generally have to apply for planning permission if you are planning to set up a hotel or B&B. And yes, this applies even if you don’t plan to make any alterations to your building (as you are changing the use of your property). In some parts of the world you will also need to apply for a license of some sort in order to operate a hotel or B&B. And this is not some bureaucratic rubber stamp process. Any application from an AirBnB owner for permission to operate has a very strong probability of being rejected. Why?

Well because, as noted, homes and apartment blocks often don’t comply with the same building codes imposed on hotels. There’s also issues like disabled access, which hotellers have to cater for (newly built apartments also have to have disabled access, but older residential blocks don’t) and possibly parking issues. Then there’s the provision of water, electricity, broadband and public services (e.g. bin collections, access for fire engines and emergency vehicles), which will be based on the assumption that all the apartments in a certain area are domestic properties, not defacto hotel rooms. This is why hotels pay business rates to cover these costs. An Airbnb might also need a different form of TV license to those used by a domestic property.

And speaking of which, you are paying tax on any earnings you make from AirBnB, aren’t you? You’d need to declare this as income on your self assessment tax form (as well as paying those business rates, water charges, TV license, etc.). So its very likely than anyone offering rooms on AirBnB is not paying their taxes in full….like David Cameron’s dad, or Jimmy Carr.

Also the freehold (or leasehold) on many buildings may well prohibit any form of AirBnB like activity (mine forbids the operation of any form of business within the block for example). Getting around this is going to be harder than dealing with the council, as you’d need to get your neighbours or the leaseholder to agree (and they’d either say no or insist on a cut of any of your profits).

Another issue for councils is the fundamental matter that they don’t want all the apartments in a city turned into hotels. This makes it harder for people to buy or rent. If its possible for a landlord to kick out his tenants paying £1,000 a month on a 3 bedroom apartment and then move in AirBnB guests paying £50 a night each (i.e. up to £4,500 per month!) everyone would do it and city centres would be full of AirBnB‘s with nowhere for the people who live there to rent. So AirBnB is contributing to the housing crisis in the UK. Hence it is not unreasonable for the authorities to be resistant. And while some aren’t doing much about it at the moment, a crack down is going to come at some point. Already some cities are starting to take action and my guess is that this is only the start.

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Protests against AirBnB by renters facing eviction is a growing problem

Then there are other issues, e.g. lets suppose you are an AirBnB owner and one of your guests refuses to leave at the end of his stay (as has happened on a few occasions already), nor will he pay you anymore. What are you going to do? Drag him out by the scruff of the neck? Okay and then when the cops show up they’ll be putting the cuffs on you (for assault) and letting him back in. In the UK a landlord has no legal right to undertake an eviction. Only the courts can sanction an eviction and it can only be carried out by an agent of the court (e.g. a bailiff). Until your tenant has had his day in court, he remains your tenant, you can’t throw him out or harass him in an effort to try and make him leave, indeed doing so would likely make it harder to secure an eviction.

While yes it is true that certain providers of shorter term accommodation can get around the need for a court order, but they still can’t drag someone out of the building (there is a due process they have to go through as well). And they are operating within a tightly defined legal frame work. As I think we’ve established, any AirBnB owners is likely to be operating in legal limbo and is almost certainly in breach of the law. So it would be up to the courts to decide. While they would almost certainly authorise an eviction, that could take weeks. And one wonders what the court will make of someone admitting under oath to operating an illegal hotel, in violation of planning laws, building codes, while simultaneously committing tax fraud, insurance fraud and mortgage fraud.

And note that we are talking about the UK here. UK law blatantly favours the landlord, unsurprising in a country where the landlords and the landed gentry have been making the laws for several centuries. In certain US states or in Europe the legal situation is very different. It can take months, sometimes years to evict someone.

As for AirBnB guests they have to consider the risks they are taking. For example, what do you really know about the person you are renting off? There’s already been a number of clients who’ve been scammed by rogue landlords and con artists. You might find the room you’ve been offered is well below the standards, or even dangerous. There’s even been guests who’ve died during their stay at an airbnb (due to poor safety standards or carbon monoxide poisoning). You might find your host suddenly cancelling on you days before you travel. Note that a recent crack down by authorities in London caused many to lose their bookings. This link includes a few tales of woe from Airbnb guests and providers.

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And this brings us to the racial profiling. About the one thing you will know about your AirBnB guests or hosts is what race he is, as he will provide either a photo or a short video. Trouble is you can’t really tell a lot from that. You’re host could be fine, or he could be Begbie from Trainspotting, or an axe murderer on the run from Eastern Europe whose previous premises was the inspiration for the movie Hostel. As a result this has let to accusations of racial profiling or profiling by social class by both hosts and guests.

Certainly, the fact is that the law, factors, insurers and mortgage companies haven’t quite caught up with events. Once they do, they’ll likely re-draft laws and policies to accommodate things like AirBnB. However, this will almost certainly come at a price. AirBnB owners will suddenly find it costs a lot of money and hence there’s a reason why hotels charge £100 a night for a room (because that’s about what it costs to pay off all those bills!) and suddenly AirBnB isn’t the brilliant money making scheme they’d thought (much like Uber). Also changes to the law, while bringing AirBnB the right side of the law, they will probably allow more leeway for AirBnB operators to be blocked from operating, if for example other residences in a block object to it.

And inevitably further crack downs will come at some point, both by the authorities and perhaps private investigators operating on behalf of insurers and mortgage companies. And woe to any AirBnB owner who gets caught in this dragnet.

Festive catch up

Great balls of fire!
For Hogmanany I went to see the Fireballs in Stonehaven, best free show in Scotland in my view!…well aside from when I used to live opposite a police station in Glasgow! There was a lot of hanging around waiting, but of course this meant I could try the local delicacies…such as deep fried Mars bar. Incidentally, there’s a dispute at the moment between Stonehaven and Glasgow as to who invented the deep fried Mars bar….only in Scotland could they argue over something like that! These culnary habits also explains why there was an ambulance on standby…not to deal with burn victims but someone getting a stroke from a deep fried mars bar!

Anyway, after the customary bag-piping, the “swingers” arrived (yes they’ve heard all the jokes, you could say I was at a swingers party :DD, the old couple are literally the oldest swingers in town :roll:…), they all went down to the dockside, having the balls lit just before midnight and parading out, starting to swing them just after the stroke of midnight, they then went around the high street swinging, while those of us watching tried not to get burnt! Checking your eyebrows are still intact is customary! After swinging with the fireball multiple lengths of the high street, they would go to the dock side and toss them into the harbour. With the last swinger heading for the water, the whole crowd would follow him and then sing auld-lang-syne, after which there was fireworks. Great night!

Carrauntoohil Dangers
I’d been back in Ireland for Christmas itself. It’s customary for a lot of people in Cork and Kerry to climb Carrauntoohil, Ireland’s highest mountain, on St Stephen’s day (what brit’s call Boox’in dai).

It was pretty wet so as we made our way up the devil’s ladder, which is the main tourist route up the mountain . We were literally climbing a waterfall with the amount of water coming down the gully! Take two bottles into the shower? no I climbed the devils ladder! :))

However, as neither I nor my dad had been up this way for a while it became apparent that the devils ladder is getting downright dangerous 88|. There’s lots of loose rock and increasingly a lot of large boulders towards the top. Some of the boulders being easily car sized in some cases and not attached to the mountain any more. In other words the only think holding them in place is friction and the weight of lots of smaller rock below….which is gradually being eroded by walkers. Eventually, there’s going to be very large rockfall in the devils ladder and I won’t want to be standing in it when that happens.

You may enquire, why if it’s so dangerous isn’t someone from the national park authorities putting up a cordon, or taking some sort of action? e.g. via ferrata the route, blast away the larger boulders, etc.. Well because inexplicably the highest mountain in Ireland isn’t within the boundaries of the National Park. The summit and its approach route up Hags Glen is on privately owned land. The summit itself is owned by three local farmers, with the land below a mix of commonage. Naturally, its asking a bit much to expect a couple of poor Kerry farmers to take on this sort of responsibility or expenses.

As I pointed out in a prior post there is a major problem in Ireland in that much of the country’s wild areas are technically in private ownership, with no right to roam and big question marks about who is responsible for maintaining things.

There was, for example, another safety issue for several years further down in Hag’s glen, where tourists and walkers would have to cross a series of rivers. These crossings were very dangerous when the rivers were in a spate, and there was at least one fatal accident here. With the co-operation of local land owners, the council, Kerry mountain rescue and the Swiss crane company Liebherr (who operate a factory in nearby Killarney as well as owning a number of nearby hotels) bridges were eventually put up. However, this took a good few years to sort out and relied on the generosity and co-operation of many different groups. I would argue, the current situation is too pressing to wait several years.

One obvious short term solution would be to direct people away from the ladder to a footpath that runs up the flanks of the mountain just to the left of the ladder. However, finding the beginning and start of this path (often called “the zig-zag’s”) is a bit tricky. Indeed the only reason why my dad and I were in the devil’s ladder was because we couldn’t find the start of the zig-zag’s path, even tho I’ve been up and down that way several times before!

You may enquire, why hasn’t a sign been put up to direct people? Well several people have done that, one guy even went up a few years ago with a tin of paint and marked a few spots at key points, only for any signs to be taken down again, or marks on rocks washed away. There’s a number of hillwalking puritans who want to preserve what they see as the “wild” nature of the mountain and want to eliminate anything that distracts from that (such as signs or cairns, etc.). A big part of the dispute revolving around routes up Carrauntoohil is the opposition of this lot to anything, even though its needed to help preserve the mountain and protect from erosion that they themselves are contributing towards :crazy:

The excesses of these purtians can be demonstrated by the fact that one of the reasons we were up on Carrauntoohil was to see the restored cross on the summit. Restored? Yes, some flaming vandals went and cut down the cross a few weeks ago. Now while I’d probably kick up stink if someone wanted to put a cross up there now, the fact is this is a monument that’s been on the peak since the 1970’s, and it was erected with the support of the local community, nobody has the right to just go and cut it down. Yet this is the sort of antics we’ve got to put up with in terms of dealing with the devil’s ladder or establishing alternatives, as there’s some crack pots who will oppose anything.

Inevitably, I see two outcomes, either the council or the government steps in and does something about it. Or eventually there’s going to be a large rock fall, possibly leading to some fatalities. This will of course, scare away many tourists (impacting on the local economy) and perhaps lead to the local landlords withdrawing access to the mountain. Keep in mind that while farmers should be safe from being sued in this situation, the legal limbo that exists means some might not want to take the risk anymore if there was a major accident.

Teaching economics after the crash
I heard an interesting piece on BBC R4 recently about something of a student rebellion brewing in several universities over how economics has been taught in the aftermath of the financial crisis.

Several student groups across many prestigious universities have accused their professors of doling out the same tired old economic models and ideology, even though a glance at any newspaper has shown how such economic theories failed and led to the biggest economic crisis of the century. Even Alan Greenspan now accepts there were failings in how neo-liberal economics models functioned, that contributed to the crisis, yet this seems to have sailed over the heads of leading economists in their academic ivory towers. And indeed, lecturer’s who’ve taken up the student’s position and tried to change the syllabus or propose alternatives complain that they’ve been ostracised by their colleagues and even lost their jobs as a result.

This too me is precisely why I’ve long argued that economics isn’t a proper science or subject and that universities or departments engaged should not be given the same credibility as the rest of academia, and indeed that they should be excluded from bodies such as the Russell group. I mean can you imagine what would happen if lecturer’s in aviation, ignored the lesson’s learnt from plane crash investigations and insisted on rolling out the same aircraft designs for 50 years without any changes?

Or how about if car designers failed to learn the lessons of car crashes? As this IIHS crash test shows, vehicle safety has improved massively over the last 50 years, or even just the last ten years, as this video (from Channel five’s “fifth Gear”) shows. And this has come about because in a “real” science such as engineering we challenge old ideas by critically analysing them and coming up with new ones. Look at Dyson, he took the humble vacuum cleaner and pretty much redesigned it from the ground up, often relying on new technologies such as CFD (computational fluid dynamics) to drive the design process.

Similarly to publish in an engineering journal, you need to have some sort of “evidence” to support your claims (experimental data for example) and your paper needs too discuss something unique or new, not trot out the same old clap trap (conference and journal editors know the engineering community aren’t going to waste time reading a paper that tells us something we already know). And outside of certain journals that deal explicitly in issues relating to politics (e.g. energy policy journal) mentioning of the P-word is generally discouraged. And even then, you must frame such discussion as part of a wider technical point.

Economics papers by contrast tend to rely heavily on politics (indeed one particular interpretation of politics), with little if any supporting evidence, other than a lot of maybes and wishful thinking. Reading an economics journal is like reading something published by the church of Scientology. And keep in mind, given that the physical laws governing engineering (e.g. Newton’s laws, Bernoulli’s theorem, Hooke’s law, etc.) are reasonably well established and proven (merely how we utilise them is what’s changed). The bar is set somewhat higher in areas such as physics, chemistry and/or maths, where new discoveries are being made.

So in short if the economics profession wants to be taken seriously, they need to realise that economics history didn’t end with the appointment of Margaret Thatcher and there is a need to reconsider old ideas and maybe try and come up with new ones. Otherwise, as things currently stand an education in economics is less an education and more a £9,000 a year lobotomy.

Another Greek Tragedy
Speaking of economics, we’ve got the story of an election in Greece, which raises the prospect of a euroskeptic party of the left, Syriza, coming to power. The fear is that this could ultimately lead to Greece defaulting on its debts and being kicked out of the Euro, if not the EU.

On the one hand, I’d argue that there is a need to shake the largely neo-liberal dominated EU leadership out of their reverie. As Robert Peston points out (and as I’ve been saying since this crisis started), the major threat to the eurozone isn’t economic, its political. Or more to the point a lack of political will to take certain actions. The threat of Grexit could well be what’s needed to do this, as well as promoting the idea that Dickensian policies of austerity need to be replaced with something more practical, humane and fair.

On the other hand, Syriza, like many populist parties across the EU, have made various outlandish promises that can’t possibly be fulfilled. It’s probable therefore that Syriza will be forced to compromise, row back on their promises, alienating both their supporters and the supporters of other populist parties across Europe. In short, a victory for them could serve to scare straight both the euroskeptics and the Junker Brigade.

On the other hand, what if Syriza don’t back down? Or what if the rest of the EU simply tells them to like it or lump it? This could easily see Greece chucked out of the euro and put on the road to economic ruin. It’s a fact of political history that a radical swing in one direction tends to result in the pendulum swinging to the other extreme, particularly if the party of one extreme screws up royally. So the long term risk is that a Syriza victory could eventually lead to the rise of the neo-nazi Golden Dawn party.

UKIP forgery
A UKIP councillor is going on trial accused of election fraud, relating to forged nomination papers. Again, yet another example of the infighting, backstabbing, sex scandals and institutional corruption that UKIP is increasingly notorious for.

Germany discovers racism
Speaking of which, there’s been a number of protests by islamaphobic’s across Germany, revolving around a group who call’s themselves pinstripe nazi’s “Pegida”. The protestors complain about being “swamped” by Muslim migrants, notably refugee’s fleeing conflict in Syria and the Middle East.

Naturally, these protestors…who obviously skipped the bit of German history between 1932-1945…have been condemned by many leading German’s and derided in the German press. Indeed, in many cases the Pegida protestors were outnumbered by counter demonstrators. It was also pointed out to them that in the few cities were the movement seems to have any sort of serious support, such as Dresden, there are actually very few migrants. About 2.5% of the population of the city are foreign born….and only a fraction of them are Muslim, about 0.1%. In the area’s of Germany where there actually are large Muslim populations, such Berlin, Pegida see’s very little support, suggesting its more a case of a handful of bigots who don’t like seeing dark faces.

Even so, given what we’ve seen happen in other parts of the EU, it’s certainly worrying. But equally, we need to remember why these migrants are in Germany and not say Greece…or back home! The unequal spread of the EU economy needs to be tackled, which means raising up the economic standards of countries in Eastern Europe. Also, the failure of Europe to do anything about the Assad regime or ISIS, as well as the train wreck otherwise known as the Iraq war, is one of the key issues driving all these immigrants towards Europe. Tackling Assad and ISIS would be the best way of stemming the flow of migrants.

What the youth vote wants
Another interesting story from The Guardian discusses a poll by The Observer about the political views and voting intentions of many young first time voters.

While UKIP is high in the polls for other age groups, its clear the youth vote ain’t buying their racist rhetoric. UKIP poll at just 6% here, v’s 19% for the whole of the UK population, while Farage is the least trusted party leader at -51%. Young voters are also pro-EU at 19% to 67%. In terms of party support labour tops the poll at 41% with the Green party third at 19%, behind the Tories at 26%. The lib dem’s (aka the party that promised to abolish tuition fees and then yanked them up to £9k) are perhaps unsurprisingly at 6%. So clearly if the youth vote ran the country, we’d have a labour-green coalition, any EU in/out referendum would be an overwhelming vote to stay in…and the lib dem’s would become the liberal democrat (note lack of plural!).

That said, there is something of a traditionalist trend, with for example a large proportion of young voters supporting the continuation of the monarchy. Also devolution and the breakup of the UK tends to gain little support in this UK wide poll, in contrast to the Scottish independence vote, where a large majority of young voters voted Yes.

So I suppose there is hope for the future, we’ve just got to survive long enough for a couple of the old right-wing blowhard dinosaurs to die off…or lock up their zimmer frames the day of the election!

Windfall of a different nature
A wind turbine collapsed recently in Northern Ireland. Looking at the images, the reports of witnesses (who said that they heard grinding noises going on for hours…yet didn’t think to call someone it would seem :no:) and given that the tower appears largely intact with wind speed low, I would guess its an issue with the brake system failing (or a control failure) setting off a chain of events that led to catastrophic failure. Inevitably this has the anti-wind lobby practically foaming at the mouth.

Of course, it ignores the fact that all energy systems are prone to occasionally disruption, for example this last twelve months or so alone there was a major fire in a coal fired station, a power line failure (thanks to high winds) knocked out two UK reactors, forcing them to shut down for safety reasons, while issues with cracking in ageing nuclear plants forced several of them off line again in August.

Meanwhile in the US, Fracking has led to the contamination of the drinking water of many, not to mention the regular health problems and night-time explosions that come with having a fracking operation as a neighbour. The effects are such that leaks from US fracking operations can now be observed from space.

So like I said, its important we put this incident in context.

Two Reasons for me to learn German

I’ve two reasons to consider whether I should learn German.

Firstly, I bought some beer the other day, labelled “Kindl” which I assumed referred to Crystal beer (i.e. clear). However it seems it meant “light“. Was pretty much beer flavoured fizzy pop!

The other, somewhat happier reason, is that my sister, who is living in Germany, has had a wee baby boy, making me an Uncle :D.

A good start to the year!

Owning a bit of currency

I’ve long been interested in the idea of alternative currencies. Many have long argued that the current status quo of a few “fiat” currencies regulated by central banks for the benefits of government (and the good ol’ boys network), isn’t in the public interest. I posted last year about a system in one US town where local traders have created their own local currency system. I’ve also made several observations about a future Scottish currency, some admittedly a little tongue in cheek. However some recent experiments online with “digital currencies” are worth discussing, as Simon Cox of the BBC reports.

Several groups, many of them libertarians, have within the last few years set up alternative currencies such as the BitCoin, Liberty Reserve, Flooz or beenz. Such currencies would, so the supporters say, be much less prone to interference by either government policy or the hanky panky antics of banks, indeed they would allow independence from both. i.e. People would no longer even need a bank account anymore. Your boss would pay you via a I-phone app and you could then spend it via a digital wallet, something of particular use in places such as Africa, where practically everyone has a phone but few people have bank accounts (and it’s not exactly safe to wander around with lots of cash) and many African countries have extremely unstable currencies.

However many of these online currencies have proven far from stable. Currently of the four listed above only “Bitcoin” is still in business (although a number of others have started up more recently). The dot-com bubble took out the Beenz and Flooz. Liberty Reserve collapsed as a result of some rather serious money laundering charges leading it to be taken down by the FBI. Indeed Liberty Reserve‘s problems have been symptomatic of the problems afflicting all of these alternative currencies.

Bitcoin too has been prone to large daily fluctuations in its value with bubble’s building and market panics (which sort of makes a mockery of its claim to allow independence from government induced fluctuations in exchange rates). There has been the electronic theft of Bitcoins from mobile phones, illegal “mining” of Bitcoins.
And perhaps more worryingly, bitcoin seems to have become a haven for criminals, notably drug dealers, who frequently use the currency to conduct transactions between each other online.

In many respects one could argue that the woe’s afflicting Bitcoin actually serve to counter many libertarian arguments on currencies rather than prove them. I would argue the problems with global currencies at present are a lack of regulation not too much of it. The reality is that the US, UK and Eurozone are in trouble because the relevant governments were asleep at the wheel in the lead up to the financial crisis. They allowed a massive speculative bubble to build, when they should have been intervening (by for example pushing up interest rates or forcing banks to hold more cash in reserve, cracking down on “casino landlords“, etc.) to head it off. But politicians were too afraid of the short term politics (as it would have meant them deliberately slowing down the economy) to do anything.

Similarly the “solutions” to the crisis have been the equivalent of using a band-aid to treat a severed limb. “Quantative Easing” in the UK and US has given some temporary relief but not solved the underlying problems. And QE has ultimately amounted to punishing savers for the crimes of reckless borrowers. Similarly the Eurozone crisis has seen a lack of proper action, and what action has been taken (such as in Cyprus) has arguably made the problems worse in the long term. Indeed some of these actions may have been responsible for building bubbles in “bitcoin” as scared savers sought a way of getting their money out of the firing line.

By way of comparison, many libertarians also favour the gold standard and argue that if economists knew a bit more about it they’d all be in favour of it too. However economists counter that actually they know full well what the gold standard entails, they remember the events leading up to its abolition and that’s why they’re against it! (and that libertarians are poor students of history).

I’m somewhat on the fence about this incidentally, but tend to come down on the side of the economists (even thought there not exactly my kind of people!). Although I did come across this site awhile ago that backed the idea for an energy backed currency (where say every dollar would be backed up by say 10 kWh’s worth of energy).

And similarly Bitcoin and its contemporaries suffers from the same problem, those behind it are letting their ideology run counter to economics. Or as Dr Adam Posen (of the Peterson Institute for International Economics) puts it:

“many of the same right-wing nut jobs who distrust the government viscerally are more likely to believe in bitcoin…it’s those who are angry about being defrauded who are likely to be the ones defrauded again”

Or in another quib:

“…gold is the investment for silly people. bitcoin is gold for people who don’t save…”

The truth is there is a reason why many see the dollar as a safe haven, even thought, thanks to QE, its been weakening in value versus nearly every other major currency since the financial crisis began. But investors are banking on the fact that they believe the US federal reserve will do whatever it takes to defend the stability of the dollar…even if it has to invade countries! (if you believe certain rumours regarding the Iraq war). It’s a case of a dollar in the hand is worth two in the euro bush….and a hundred in the bitcoin hedge!

Unfortunately it would seem that if there’s anything worse than a fiat currency backed up by nothing other than ones trust in “the government”, one has to question how sensible it is to advocate as an alternative a virtual currency that is backed up by nothing at all.

What’s in a kiss?

I’m just getting back into blogging again after a wee break, but one story I missed commenting on was the apparent “protest” against Russia’s anti-gay laws that occurred when two Russian relay winners kissed on the podium. Both quickly denied that this was a protest, or anything of the sort, they were just pleased to have won.

Even so, whether intentional or not, it shows the hypocrisy of such laws, as strictly speaking this arbitrary Russian law would appear to say that any such kissing is illegal only if the parties involved enjoyed a kiss too much. I mean two French guys who are old friends meet and you’ll see more mouth on mouth action than in a Swedish porno, does that count? :??:

Elsewhere a Swedish athlete who painted her fingernails rainbow colours (apparently this was an actual protest) got told off by the IAAF (these are the same types who cosied up to Hitler and the Soviets in the 80’s, good too see they ain’t changed much!). So now it would seem Putin is censoring the colour of women’s finger polish, I wonder if he’s ever seen 1984.

I’m somewhat sceptical of mainstream religions for many reasons but one of them is this apparent hypocrisy over issues such as gay rights. Granted the bible does idly mention its disdain for “that sort of thing”, twice…in passing. However I also recall the bible goes to great lengths to discuss the evils of greed, how one should help thy neighbour, the virtues of charity and good will towards others, how the rich who aren’t charitable are going to have a hard time getting into heaven, and the evils of usury. And were talking pages and pages of the bible here, not one or two little footnotes.

And while, like homosexuality the bible is a little non-specific as to what does and doesn’t count as usury, its not difficult to conclude that what many city traders get up to on a daily basis (short selling, commodity price speculation, etc.) has to count as usury. And we have good evidence of the enormous hardship such activity can create, from causing companies to fail, wiping out people’s pensions and savings, driving up food prices for the very poorest on the planet, etc.

And of course there’s the many wars nations start with one another, flying in the face of Christian doctrine. Yet religions worldwide seem to ignore these inconvenient little facts, doing or say nothing about the crimes of the financial markets and governments against the church, but instead go gay bashing to make up for it.

I mean do they honestly think on the day of judgement when they stand before god and he points out that, say our Republican voting bond trader has broken nearly all ten of the commandments, thou shalt not covent thy neighbours goods, thou shalt not steal, thou shalt not worship a false god (these guys clearly worship money above all else!) at the very least….indeed I’d throw in thou shalt not commit murder (G. W. Bush and Tony Blair’s war in Iraq), thou shalt not coven thy neighbours wife (on grounds that they’ve screwed most of us over enough for it to count as adultery :b) and bearing false witness (as much share speculation consists of essentially trying to drive the price a certain way, this has to count as “bearing false witness against thy neighbour”). I mean is the plan at this point to shrug one’s shoulders and say to god, we’ll at least I ain’t gay or nothin!

In short religion, particularly the Christian types seem to adopt a policy of “selective blindness” to a host of pretty serious crimes against their faith from the rich and powerful, but will quite happily pick on some hapless minority group to compensate for it, how very Christian of them!

Road twits

There is a case ongoing on Norwich of a young lady (Emma Way) who ran over a cyclists, then boasted about it on twitter (the twit! :no:) apparently trying to claim it was the cyclists fault because:

“I have right of way, he doesn’t even pay road tax”

Naturally this has been brought to the attention of both Norwich Police, who have since twitted back (nicked via Twitter, what is this world coming too!) that she should come see them as she is now under investigation for leaving the scene of an accident, dangerous driving…and texting while driving (she sent a photograph taken while driving a few weeks ago too!). And indeed her employer has also been contacted (I think she can rule out that big promotion!). A cyclist has since come forward, and while it seems he wasn’t badly injured, naturally he was a bit shook up by the whole thing.

I have noticed this attitude gradually creeping in across the UK among some motorists who seem to think that because cyclists “don’t pay road tax” you’re entitled to break the rules of the road and basically behave like a complete twat…if that’s the case I’m going driving around London with a sticker on the back of my car saying “I don’t brake for Non-dom’s tax dodgers” and enforce it ;D

And I’ve seen plenty of such antics from motorists where they seem to assume that someone on a bike has less rights than they do, e.g. I once nearly got run down by some woman who was turning off a side street (onto a main road) and decided that the white line and stop sign didn’t apply to her, when she was forced to brake as she realised I wasn’t going to stop (I sort assumed she was going to obey the rules of the road, silly me!), she then beeped me for getting in her way! And that’s just one of many examples (same thing happens all the time when I’m walking across a road, even at pedestrian crossings). If you cycle regularly in the UK for example you often become accustomed to the sound of a taxi’s engine behind you, as that usually means trouble. I’ve actually stopped cycling to work recently as it’s just too dangerous on UK roads, largely because they are not the least cycle friendly and motorists are just too rude and incompetent.

Now before anyone starts with the “I saw a cyclists who broke the lights/on the pavement/thro a zebra crossing” yes and I suppose car drivers are perfect and never break the rules of the road! There are as many bad drivers as bad cyclists, probably more in fact. Indeed as both a cyclists and a motorists, I find that when cyclists do this they are often cycling defensively (i.e. they’re trying to avoid being killed by some idiot motorists whose not looking where he’s going).

And perhaps motorists need to remember that intimidating cyclists off the road is not in their long term interest. As inevitably it will just mean more people driving to work instead, hence the queue at rush hour grows ever larger and taxes go up to pay for road improvements.

No road tax? Neither do drivers!
Indeed while were talking about it, not only do cyclists not pay road tax but neither do car drivers either! Instead there is Vehicle Excise Duty (VED) which is charged to certain vehicles based on engine size. Not all vehicles pay it, electric cars, farm machinery, police, cars, army, vehicles built before 1973 and the Queen (another foreign tax dodger!) are all exempt from VED. I presume said aggressive motorists are going to try and ram cops, farmers, the queen, army and milk floats off the road too?

And of course, lest we forget some cyclists (such as me) also drive and thus also pay VED. Does that mean I can expect a written apology from every taxi driver or bus who’s ever cut me up?

There are of course several major taxes on motorists, VED is one, petrol duty being another, but the question is do these raise enough in revenue to counter the costs associated with running the UK’s highway network? The Clarkson brigade would say that they are being fleeced, but the environmentalists would argue that once you factor in the costs of building (important given that money would likely have been borrowed and were still pay the interest on it via part of the national debt) and maintain roads, plus the costs of fire, police (what do you think we invaded Iraq for?), etc. the truth is that its car drivers who are the worthless scroungers, not cyclists (at least those cyclists who pay income tax!).

The need for a road budget
Again, part of the problem here is that there is no set “road budget” like there is for say, the NHS. Instead the funding of roads has always been this ad-hoc arrangement whereby government doles out cash on road building projects via various local, national and even EU budget headings. Then, usually in economic hard times, the government suddenly realises that roads cost money and it needs to squeeze motorists for some cash and the state invents some arbitrary tax to slap on motorists that may (or may not) take in sufficient cash to cover the relevant costs, or might (or might not) over charge motorists.

And this is still going on. I’ve pointed out for example, how the Highway’s agency is now starting to charge for various costs associated with police time and road repair in the event of accidents (whether the accident was the victim’s fault or otherwise). Inevitably this will sneak into people’s pockets in the form of higher insurance costs, so it’s a stealth tax on motorists. And with plans by the Tories to privatise motorways expect more of the same in future.

To me the solution is simple, set up a properly audited road budget that will give the true costs of motoring and allow government to make informed decisions about how much it plans to spend on roads and how we’re going to charge people for it.

….and road pricing
And the way I would favour charging would be to abolish VED and petrol tax and replace it with road pricing, where everyone is charged (based on vehicle size and CO2 emissions) a fixed price per mile. This would be not only fairer but also set a clear link between what one pays to use the roads and what it actually costs.

Of course the opposition of the roads lobby to such a process does tend to suggest that secretly they agree with the environmentalists and think we’re undercharging!

But going back on topic, clearly many motorists need to learn the rules of the road, the “I pay my taxes and therefore can drive like a cu&t” argument doesn’t stand up, either morally nor (as Emma Way is I suspect about to find out) in a court!

Blogging Hazards

I had a slightly disconcerting message the other week. Another blogger whose blog I occasionally followed seems to have upped and deleted his entire blog. He said in an e-mail (it was linked to a page that disappeared with his blog so I never got the full picture) that he seems to have had a rather bad encounter with another blogger (don’t ask me who) after making a comment on his page. Now I would consider his decision to delete his entire blog a bit of an extreme reaction (then again I don’t know the full story) but certainly given that I’ve had a few bruising encounters with people before online (never much on Blog.co.uk mind) I can certainly sympathise with his position.

Not only do I blog here, but also I keep an energy blog, and am an occasional contributor to a number of other blogs, as well as a regular commenter on various blog strings around the internet, so I do “get around” and unfortunately there are some people for whom the term “troll” doesn’t quite do it justice.

My problems largely occur due to my habit of pointing out pesky little “facts” to people, notably right winger types, in particular US Tea Party or UK Tea Party (otherwise known as UKIP) types. Reality it seems has, as they see it, something of a ”liberal bias” so they prefer to wallow in fantasy and get quite upset with people who come along and burst their bubble. Just look at Nigel Farage’s meltdown on in Scotland over a bit of heckling from some rowdy students. As I’ve learnt (the hard way!) these guys do not understand the concept of irony, humour or context, nor can they absorb any fact that contradicts their position. As you can imagine this has led me into quite a few nasty encounters online.

For example in one post on my energy blog I was doing a critique of various nuclear reactor designs and I included a quib (i.e. an amusing comment) at one point. One pro-nuclear fanatic immediately took exception to this quib (even though I’d labelled it as a quib) and promptly began running up vast blog strings on my site and his over it…then again, I’m sure Gollum in Lord of the Rings wouldn’t be happy if I made a joke about his “precious”.

Some seem to have an attitude not out of place with the Spanish Inquisition, that if they burn the heretic, the heresy dies with him (you know, pesky little facts like the Earth revolving around the Sun). I blame Fox News and the Murdoch tabloids for this attitude, as this is essentially how they operate, so its no surprise to see the people who read/watch them using the same tactics.

For example I was on a blog with a discussion with a scientist who was critiquing (via a peer reviewed paper) a number of ideas close to the heart of libertarians (nuclear power and the limitations of mineral resource supplies, notably those of Uranium). Their response was to resort to the good old fashioned “gish gallop” where they would posse many irrelevant and quite frankly silly questions to the guy one after the other. When inevitably he got sick of answering the same question (phrased slightly differently) over and over again and stopped replying, they declared “victory” on the basis that they’d managed to shut him up…even thought they had not contradicted a shred of the evidence he had presented!

After a number of encounters with libertarians (notably on Reddit, my advice, stay away from there!) I’ve seen sudden increases in the level of spam into my various page accounts. My e-mail address (the one I published on one page) was actually hacked and I lost access to it (fortunately its not the one I control that website with). In another unrelated encounter one blogger even put up a page on his blog wishing I’d get cancer or something.

So all in all I think we can conclude there are some genuine crazies out there in the blogsphere and one has to be careful where you threat…or simply develop a thick skin…or don’t learn the hard way what I’ve learnt, let right wing freaks putter in their sandbox and don’t annoy them with a lot of pesky little “facts”. If they wanted to base their opinions on fact’s they’d have gone to university rather than bible school!

In defence of Pastafarianism

Anyone living in Britain will have by now got you’re hands on your census form. It brings up the issue of how will you answer question 4-13, what’s your religion. Last time some 400,000 people claimed to be Jedi’s. This time I’d suggest professing ones deep seated belief in his Noodleness, the Great Flying Spaghetti monster (or FSM). Let me give you the pro’s of this religion, they’ll make Catholicism suddenly look like a whole load of boring work.
http://en.wikipedia.org/wiki/Pastafarianism

Pastafarian’s (those who’ve been touched by the FSM’s noodly appendage) believe in a 3 day weekend (as the FSM rested for 3 days after making the universe, althought that was largely cos he was hungover!)…is there anyone reading this whose still unconvinced. Furthermore the main religious holy day of Pastafarianism is September 19th (international talk like a Pirate day). Now if you think about it that’s the perfect time for a public holiday, just when those winter blues are starting to hit, if you’re Pastafarian you’ve the perfect excuse to bunk off work.

All different religions get various concessions for them, for example there’s an increasing availability of Halal food. Well, if you’re Pastafarian you can demand the provision of food appropriate to you’re religion, such as Spaghetti and meatballs…served by a guy in Pirate regalia of course! Who can argue with that! Also we can demand a lower rate of taxation on Pastafarian friendly foodstuffs, just like the Christians get a tax break on wine and bread. You’ll be pleased to know that the stable of Pastafarian drinking is Beer (heaven to Pastafarian consists of beer spouting volcanoes as far as the eye can see).

Actually the real benefit of Pastafarianism is the ability to get others to shut up about religion. I mean a load of Jehovah’s witnesses show up and you tell them that you’re Atheist or something and rather than fecking off, they go into overdrive “oh! oh! oh! so what you’re saying is that the whole universe just popped out of nowhere, just like that!…is that it ya! ya!”. On the other hand if you state a deep rooted believe in the FSM and begin preaching to them you’re creationist believes, chances are they’ll suddenly remember some prior pressing engagement and beat a speedy retreat. After all the only way for them to disprove you is by making a mockery of their own belief system (and Mormons believe in some pretty crazy shit anyway!). In fact put an FSM symbol on you’re door and you can be all but guaranteed never to be bothered by any such people ever again.

And those global warming deniers get it to. You see according to Pastafarianism the scientists have it all wrong, its not carbon dioxide causing global warming, but a lack of pirates on the high seas (pirates being divine beings according to Pastafarianism and thus the FSM is punishing us for their decline). Again mention this to any global warming denier and watch him shut the hell up as again the only way he can disprove you is by disproving his own case against climate change.

So enough with you’re Jedi knights, embrace the one, the only true path to Heaven (with endless beer volcanoes) and tick that box for Pastafarianism. I’d recommend the Church of the Invisible Pink Unicorn who lives at the bottom of my garden, but there’s not enough space in the census form to fill that one in. Religious discrimination me thinks, they should sue!
http://en.wikipedia.org/wiki/Invisible_Pink_Unicorn