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My personal theory is that they gave up on government after Napoleon

14 June, 2012

Kitty's Kountry Rankings are below, with a description of how they are kompiled. This week, as every week, I give out three Encomiums to countries which have done Good Things, and award three Execrations for countries which according to my highly personal and partial views have done Bad Things.

Let's hope that the Indian Aviation Ministry's promise to cut aviation taxes is not just a ploy to get attention from the parts of the government that do actually have the power to get things done, meaning the Finance Ministry and, er, well I am sure there must be some others if only I could think of them. There's no question that the Indian aviation sector has lagged behind China, and that there are plenty of taxes on aviation. But so there are in China, the USA and the EU, to pick some places where aviation is sprinting ahead, in volume terms, at least. The Finance Minister, looking at the 11% growth in passenger numbers that India has clocked up in recent years, may think his largesse might be better spent elsewhere. We'll see. What the Indians ought to do, but won't, is to hold an international fire-sale of their clapped-out airlines, alongside a bonfire of useless regulations.

Not quite sure what a KORUS would be if you met one on a dark night; perhaps it would be cuddly and live in a tree in Australia. As I'm sure you know, our KORUS is the Korea/USA free trade agreement, which has already had more lives than a cat, being given up for dead umpteen times courtesy of the opposition in the USA (does the Democrat party count as opposition? at least it was for most of KORUS's nine lives) and in Korea, where only an unexpected miracle in the shape of the re-election of the Grand National Party last April saved the young KORUS from certain death. So, full credit to both countries for having persisted against heavy odds, bringing the promising animal to life. It will do more good than any cat ever did. Sorry, Mehitabel. And yes my name is Kitty.

Hollande's plethora of tax rises is just one of a plethora of bad country behaviours this week, and as a national suicide bid it has to rank alongside the Portuguese invasion of North Africa in the 16th century (sorry, BT300), or Japan's Pearl Harbour in slightly more modern times (AT42). The French can be forgiven most of their strange behaviours after 500 years of strangulation by a rapacious and arrogant monarchy; but how to explain constant bouts of fascination with far-left fantasies when they've had two hundred years of universal education and ample opportunity to realize that high taxes are destructive? My personal theory is that they gave up on government after Napoleon, if not before, and nowadays they simply concentrate on escaping from it in one way or another. Hence their extreme individualism. Politics and its economic consequences are thus simply a kind of game, a dream-world, without real-world consequences. That would explain why the French are unable (actually, just unwilling) to take on board economic reality as she is nowadays understood. There are other countries in Europe which could inhabit this paradigm, as we are about to discover.

As was easily predictable, the power-that-don't-have-any in Europe have been congratulating one another with lots of back-slapping over their splendid wheeze to give Spain EUR100bn to save its raddled banks. What does this actually mean? It means that Spain's politicians and their banker cronies have put the country's taxpayers into debt to the tune of another 100bn, that's all. This disgraceful game of saving the hides of bankers, their greedy developer partners and their foolish shareholders at the expense of hard-working tax-payers (I'm allowed a bit of poetic license) should never have been started, and the more it is played, the closer we will come to revolution. When, not if, the countries that are given this largesse go bankrupt in their turn, it will be the taxpayers of Europe that have to pick up the tab. Four countries have now swallowed the poison; it's only a matter of time before it kills them.

I don't know which is sadder: the news that some of the UK's 8,000 Olympic torch-bearers are selling them on-line before the Games have even started, or the fact that HMRC saw the need to issue a bulletin to explain the tax consequences of selling a torch. If I was lucky or honoured enough to be invited to stagger along a country lane in a remote part of Cornwall bearing a torch, presumably accompanied by a bevy of police motor-cyclists, the press corps, and perhaps a helicopter overhead, I would have it up on my sitting-room wall in no time surrounded by photos of the great event, as if it was an Oscar. I can't imagine selling it. Surely only a tiny proportion of torch-bearers are going to be so crass as to sell their torches? So what is HMRC responding to? A few sales by people who are so spiritually and financially poor that they will humiliate themselves in this way? The problem is that HMRC regards the British population as a collection of universal criminals, and has jumped unnecessarily and presumably expensively onto the band-waggon, making an ass of itself in the process.

Kitty's Encomiums and Execrations

Methodology: each week (this is the sixth) three countries are given encomiums and three are given execrations. Those are the entries below with descriptive links. In the following week, each encomium counts as 1 for that country, and each execration counts as – 1, being added to that country's existing score. Over time, therefore, a ranking will build up for each country, and further countries will join the listing. Germany has a ranking of – 1, since in the second week it had an execration and in the first week it had an encomium, leaving it at neutral; then it had an execration in week four, thus dropping to – 1.

The rankings are intended to be a proxy for business friendliness; evidently they are highly partisan, but hopefully one day they will become useful for decision-making, even if for the moment it is all just an amusing game.

Kitty's Encomiums:

Hong Kong 2

New Zealand 2

The Philippines 2

Canada 2

Dubai 1

India 'read my lips' says Aviation Minister

Ireland 1

Russia 1

South Korea and the USA Three cheers for the KORUS

Switzerland 1

In neutral territory:

Australia 0

United Kingdom 0

And Kitty's Execrations:

China – 1

Cyprus – 1

France in an orgy of national self-destruction

Germany – 1

Hungary – 1

Italy – 1

India – 2

United States – 2

Spain – 3

Spain drinks deep from the poisoned chalice

The UK turns the sublime into the gor-blimey


About the Author


Kitty was born in Argentina in 1960 to a Scottish cattle rancher and his Argentine wife. Educated in Edinburgh and at Princeton, Kitty worked for the World Bank as an economist, where she met and married an emigre Iranian banker. During her time with the Bank, Kitty worked in a number of emerging markets, including a spell in the ex-USSR as a Transition Economies Team Leader. Kitty is now a consultant in Brussels and has free-lance writing relationships with a number of prominent economic publications. kitty@lowtax.net


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