A Response to Vincent Browne

Vincent Browne's lament for lost sovereignty - invoking Rousseau in the process, who was born three hundred years old this week - adorns this morning's Irish Times.  It's an aspirational piece, without resolution and reactionary.  The language of what he would see as European neo-imperialism is versed in words like sovereignty and democracy, and this requires an examination of those principles.  The article is to be lauded for that.  But let's look at some of the themes - "freedom", the "arbitrariness of market forces", and the "common good".

First, on the notion of freedom, and man being born "free".  There is no such thing as absolute freedom.  Thomas Hobbes, a predecessor of Rousseau, argued famously on the state of nature that mankind was in before political order took hold.  The life of a man in that state of nature was "solitary, poor, nasty, brutish, and short," Hobbes wrote in his magnum opus, Leviathan.  Man is born dependent on mother, then family, then society.  His existence is relative, and social.  

Eurocrisis: Sovereignty, Federalism, and Choices

Funny, nein?

The current travails of Europe are not new.  A group of countries bound by proximity yet separated by terrain, for thousands of years the continent has been dominated by war, conquest and turmoil.  Today, we see her once more tearing herself apart as the unequal distribution of resources sets itself against capitalist economics and nominative socialist leadership.  While the things that bind us together – the Monnet and Schuman version of a shared heritage, the fledgling institutions of the European Union, and an increasingly pervasive English language – remain, the smaller things that separate us become exacerbated.  Even the recently held European Football Championships, or before that the Eurovision Song Contest, tend to reinforce the more serious political and economic rivalries within the Union.  Greece versus Germany was billed everywhere as David versus Goliath, Coloniser versus colonized, Merkel versus whoever the current Prime Minister of Greece was.  Some Irish fans hoisted an Irish tricolour with the words “Angela Merkel Thinks We’re At Work” emblazoned across it, an image that made the front cover of Bild and other news media around the world – the distinction was clear, Merkel and Germany was “them”, and Ireland was “us”, there was no such thing as a European.

Bankia Shares Still Falling

I know I should short Bankia shares, but not having traded open stock in ten years I'm too lazy to do it now.  They continue to fall, and the politics is mirroring Anglo.  The only difference this time is that Spain is so big, important, and relevant (unlike Ireland) that European leaders may once again revisit their comfort zone of double standards, moral hazard, and down-the-road-can-kicking and step in to articifially support the Spanish system.  At least until after French elections. Right?

I'll get my coat.

Is Spain "Turning a Corner"? (Of Course Not)

Meanwhile, in Madrid, things have got a distinctly Irish feel.  Spain's third largest bank Bankia was under pressure to raise funds, as investors saw it was too risky.  The State stepped in, taking a 45% stake.  "The Bank of Spain said Bankia and BFA, its parent company, had informed it that the conversion of €4.47bn of state aid in the bank into ordinary shares was "the most advisable option for strengthening the [bank's] financial soundness"."  OK, now where have we heard that before?

Well, way back in December 2008, the Irish Government decided to take a 75% stake in the country's third largest bank, Anglo Irish Bank, which was under pressure to raise funds.  "Dublin “will continue to reinforce the position of Anglo Irish and will make further capital available if required so that it remains a sound and viable institution,” the finance ministry said," injecting €1.5bn into the institution.

What happened next? Well, in Spain, Olli Rehn declared that the Spanish plan to manage the Bankia problem should dispel any doubts about the "stability of the Spanish banking sector."  In Ireland, the Commission approved the Irish government plan to recapitalise Anglo on January 14th 2009, but two days later, Finance Minister Brian Lenihan dropped another bombshell: "A €1.5bn (£1.34bn) recapitalisation package unveiled after a loan scandal at Anglo Irish is "not now the appropriate and effective means to secure its continued viability" and a full-scale nationalisation will be initiated," he said.  The hole was effectively too big for a partial nationalisation.  In Spain, there remains some uncertainty about the shortfall in Bankia.  As it was an amalgamation of lots of banks, hurriedly scooped together and floated in 2011, one suspects that there was some hope that any holes could be socialised across the new group.  In truth, no one really knows how deep the hole is in the Spanish Banking Sector.  Which was just like Ireland - the bank debt seemed manageable, but then got bigger, and bigger.

Today, Spanish Prime Minister Rajoy warned that Spain faced exile from the bond markets.  Ireland decided to withdraw from the bond markets in September 2010.  Ireland's decision was not theirs to make - they were priced out of the market, in the same way that the current trajectory of bond yields for Spanish sovereign debt is threatening to exclude Spain.  The banking system goes first. Private credit to the private banks becomes unattainable at reasonable rates, and so the government has to step in in order to prevent a banking sector collapse.  That nationalises an indeterminable amount of debt, or at least exposes the sovereign to the debt.  This is where Spain is now.  This is where Ireland found itself in early 2009.  We limped along for another eighteen months as the astonishing reality crept upon us, revelation by revelation, in one bank, then two, then three, then the systemic and cultural issues became evident.  Spain won't get 18 months, the markets are wise to the pattern.

I'm not worried about the Eurozone, I'm worried about the EU!

Oh, time. They say it's a great healer, but it also papers over the cracks.  The European Union project has been an outstanding success.  Building on common interests, of trade, movement, security and even threatening to break out into a unified force in Global Affairs in the last few years, Jean Monnet would be very pleased.  But time makes us forget.  We forget what brought us together in the first place.  We forget the wars, the horror.  We forget the divisiveness of nationalism, let alone ultra nationalism.  And so, while in good times all boats floated on the success of the Eurozone economy, in bad times it's every country for themselves, and the strongest will dominate the weak.

Germany has enjoyed extraordinary privilege in its membership of the Euro, through persistently low interest rates and a willing export market at fixed, favourable exchange rates.  The Eurozone's success depends in many respects on Germany, but it is also true that Germany's perpetuation of its own success is dependent on retaining those privileges.  In simple terms, Europe needs to learn that when good things happen, they should be shared.  And when bad things happen, they should also be shared.  That has not been the case.

In a sense it was easy for Monnet, Schumann, and all the rest of them to cede sovereignty and make huge leaps in integration in aftermath of an appalling and hugely destructive war.  Nationalism seemed empty, useless, meaningless in the face of what we had all done to ourselves, and to each other.  We have forgotten all that.  Our motivations have reverted to isolated self-interest, and short term politics.  This is not a recent phenomenon.  The failure of successive governments and EU administrations to drive deeper integration, to make multiculturalism a success, to play down national pride in favour of regional belonging, has been stark. Our education programmes have not been strong enough, our political leaders have not been wise enough, and it appears now inevitable that we will all pay a terrible collective price for out naivete.  Great states and countries are born of fire - the new Europe came so close to building a single, federal state, but everyone failed.  Maybe we shouldn't be too hard on ourselves, it's never been done before.  And perhaps there are lessons in it for future generations who might be brave enough to have a go once more.

I am not feeling happy this morning.

Threatening and Bullying The Electorate

The Government has decided that the best strategy to win a Yes vote in the forthcoming European Stability Treaty referendum is to bully and threaten us into submission.  There's no backup fund, says Noonan.  Even the normally tempered Leo Varadkar warned how we would be denied access to the fund.  If the Lisbon Treaty was trumpeted as a "Vote Yes for Jobs", perhaps this could be trumpeted as a "Vote Yes for Cash" referendum.

The argument needs to be taken to its logical conclusion.  If it is argued that we would run out of cash, and be unable therefore to meet the public sector pay bill, and repayments on existing debt, our domestic banks would crash (not having cash for ATM machines), and the sovereign would default.  That would result - effectively - in an exit from the Euro, and would most likely trigger an exit of Greece and Portugal.  The alternative would be that Ireland finds money from somewhere else.

Saving that alternative for a moment, and presuming that this is indeed the alternative to a Yes vote, why has the government put us in this position?  This is Hobson's Choice.  It is not a vote at all, but a ridiculous proposition that unnecessarily exposes the State to the whims of an electorate who is angry, hurting, and not in a good place to make a rational choice.  How inept a government to put the state so at risk! 

Of course the truth of the matter is not there.  There is a backup, there is always a backup.  If we vote no, there will be other sources of funding.  There will be options, and other cards to play.  These are admittedly high stakes, but Ireland has choices.  It is offensive to me that the Government don't see fit to share them with us.

Forcing Europe to Face Its Demons

Richard Boyd-Barrett is many things.  He's well educated, well heeled, and well raised.  He's considerate, impassioned, and idealistic.  He's articulate, and convincing.  However, he is inexperienced in government, under-qualified in economics, and at times naive in his dealings with the Government parties.  Suggesting stratospheric taxes for the super rich, ignoring behavioural economics and the science of incentives, is crazy stuff.  Demanding a re-balancing of the wealth distribution, while campaigning against increased taxes, is similarly mad as a box.  But on RTE's The Week in Politics show last night, he said something simple and interesting.  To paraphrase, he said "the fiscal treaty is intended to save the Euro.  The Government say we have no option but to say yes, because otherwise we would have no access to money, and therefore our economy would collapse.  But if we collapse, then the Euro collapses, so Europe won't let that happen."

He's right, of course.  All of this is smoke and mirrors, designed to avoid the reality of Europe's crisis.  The Euro project has failed, and everything that the European political leadership has been doing for the last three to four years has been designed to delay the inevitable, in order that each domestic government can put in place the necessary structures to offset the impact of its inevitable termination. It's not a completely negative picture, of course.  Growth in global markets would provide the tools for a possible escape, at least until the next crisis. But growth has been sluggish, and even Chinese growth has slowed, with some fearing a hard landing there.  And even if growth were to come back, the weakness in the Euro structure - essentially that currency union cannot be divorced from political union - will not be easily overcome.

There are two ways to fix the problem.  The first is to scrap it, take the short term pain (two to three years) of the correction, and start again.  The problem with this is that most governments in Europe would likely fail, there would quite possibly be social unrest, even some attempted coups d'etat, and inevitable damage done to the EU.  Whatever about looking for growth, it would be likely that we would see contraction, and stagflation.   The global economy - denuded of one of its two key markets - would see recession again, and things would generally speaking be very bad.  Banks would be exposed as defaults on everything from car loans to soverign bonds accelerate, and the holes created by excessive asset leveraging over the past ten to fifteen years would cause them to collapse in on themselves.  Weeping and gnashing of teeth indeed.  On the other hand, it would force a correction over a relatively short period of time, and a re-boot of the European economy.  We would in effect have something akin to a blank slate, upon which we could begin anew, though like I said, not without a lot of pain.

The second way to fix the problem is to combine austerity and "bridging bonds" with a fundamental restructuring of the Eurozone Fiscal Architecture.  This, over a long period of time, would see Europe remodeling its management structures through deep relationships between the countries.  Those who over-extended themselves - Ireland, Greece, Spain, Portugal, Italy - would need to correct their spending.  In return, those who were more cautious - Germany, emmm... - would underwrite their current accounts during the period of the correction.  (At the same time Germany demanded the support of the IMF in order to offset the domestic impact, which would otherwise have been too much for German domestic politics to bear)  The Fiscal Compact Treaty is the first major instrument in this; Lisbon went some way, but was framed at a time when none of these problems were seriously considered.  There will be others coming down the line - on tax harmonisation (the elephant in the room), bank regulation, auditing and monitoring, and hardening ever more the penalties and disincentives for fiscal recklessness.

Scrapping the Euro may seem like a much more chaotic solution, and a less elegant solution, and in many ways it is.  It won't happen because Eurozone leaders decide that it's the best course of action - they all think it would be awful (as do I, in many regards, as a good mildly socialist European).  It will happen because events take it out of their control.  A euroskeptic government takes office in France, or Holland - both of these events would be damaging, though not fatal.  All countries can still be expected to act with rational self-interest, and therefore can be brought onside.  Should Ireland vote no on the Fiscal Compact, it would need to be managed; as a small country, the cost of managing Ireland should be relatively small, and the integrity of the Eurozone can be protected.  Even if Spain was priced out of the bond market, there appears to be enough support there at this point to bail her out.  Just about.  But should any of these things happen together, then the decision to scrap the Euro may well be taken out of their hands.

For Ireland, unfortunately, there is only one choice.  She is already substantially feeling the pain of a Euro implosion.  There is a massive correction alongside great austerity underway.  While Foreign Direct Investment remains encouraging, unemployment rates are still enormous, and showing little sign of easing.  It appears that should Ireland continue to support the strategy of the Eurozone, that Ireland would continue to suffer for an indefinite period of time, without control of its own resources, the same as Spain, Portugal, Italy and Greece.  Not only that, but the Eurozone project is highly unlikely to succeed anyway, given the precariousness of its position.  Saving the Euro remains preferable, but is this country willing to see ten to fifteen more years of pain and suffering in the hope that they might pull it off?  And then, at the end of it all, see even more disaster if and when it does indeed fail?

Voting no on May 31st will tell Europe that Ireland has had enough.  Just like France is doing through Hollande, like the Netherlands are doing, and like the Bond Markets have been doing for some time in Ireland, Portugal, Greece, and more recently Italy and Spain.  And we will take the consequences.  Europe must face her demons, however painful that might be.

Ireland's Undignified Retreat

About seven or eight years ago, Joe Nye wrote a book called Soft Power, which talked about how non-economic, non-military power could be wielded in international affairs to great effect.  It discussed how the brand of countries was valuable and important, and how the desire to imitate could be leveraged towards the advancement of the admired country's ambitions.  There was an immediate relevance of course, with America in the process of burning a lot of international bridges in the aftermath of the invasion of Iraq, but Nye also made the case for small countries who simply didn't have military or economic power, and how important soft power could be.  If memory serves he mentioned Sweden's role in the development of International Law as a case in point. 

If ever Ireland needed to have or be building its soft power then it is now.  Ireland needs - as the Government is at pains to point out - "to rebuild its international reputation".  We need friends in the international community; we need people to think of Ireland in terms of its positive aspects, as a country to imitate, admire and respect.  In order to do that, a significant perpetual campaign needs to be run in order to improve Ireland's standing internationally.  Instead of that, we are retrenching, retreating, isolating ourselves in four key areas. 

1. We are closing embassies all over the world.  While the closure of the embassy to the Vatican grabbed most of the headlines, embassies were closed in Iran and East Timor, while other missions were scaled back and other cuts imposed on the diplomatic corps.  We should be opening new embassies, hiring more diplomats, and selling Ireland agressively internationally through our international relations.  The review, according to Eamon Gilmore, gave "particular attention to the economic return from bilateral missions."  Iran is at the eye of a worldwide storm right now, and buys a considerable amount of Irish food exports.  It needs friends, and a thoughtful, considered, Iran policy could have provided Ireland with some opportunities.  In addition, many countries have very active missions in Teheran because of the International Security concerns, and therefore Ireland's mission would have afforded an opportunity for her diplomats to meet with and develop relationships with many other countries.  The costs for such exercises are minimal.

2. We are reducing our international aid budget.  While relative to an atrophying GDP our contribution in percentage terms may not have declined as dramatically as the €200m cut in 2009 would suggest.  Foreign aid is a wonderful opportunity for Ireland to demonstrate leadership, particularly in growth markets, where burgeoning opportunities for food exports in particular offer massive potential. 

3. RTE is shutting the London office, and reducing investment in international journalism.  RTE has become more and more an odious, anachronistic and irrelevant institution over the years.  I believe it should be privatised and wound up, apart from its news coverage.  It is the only piece (though one can make perhaps an argument for culture) of the organisation that needs to be invested in, and though I don't know the complete economics, I would imagine that it is one of the most profitable areas of the business.  Journalists - news journalists, not "broadcasters" or "entertainers" like Pat Kenny, Marian Finucane and Miriam O'Callaghan - are not expensive, and the management and orchestration of news output (genuine news output, as opposed to sensationalist scandalising dressed as news like Prime Time Investigates) need not cost hundreds of millions.  In the area of international news reporting, Ireland's journalists abroad develop significant relationships with press corps in their host countries, and invariably become ambassadors for Ireland when Ireland is in the International news.  This is not recognised by RTE, who are short-sighted, under pressure, and acting in a ham fisted way, lurching from crisis to crisis.

4. We are not allowing our political leaders to travel abroad on relationship building missions.  St. Patrick's Day is a magnificent international celebration of Irishness, but we begrudge the politician's the chance to hob nob in some far flung corner of the world.  It is politically incorrect to get on a plane and fly somewhere because that seems like a perk.  We've really corkscrewed ourselves here, with some undercurrent of "well, if I can't afford a holiday this year, then they're damn well not getting one either".  Every single national politician should be out of the country on St Patrick's day.  Matter of fact, every single national politician should be out of the country more than they are in the country - the civil servants can run most of it, and they can leave the politicians do what they're really good at - glad-handing, kissing babies, schmoozing.  They might actually do some good. 

Bórd Failte does not seem to have been hit by the cuts, which is some good news, though it could do with additional investment.  We need to change our foreign policy, our foreign affairs strategy, and our investment in foreign affairs.  Or else we're just making a bad situation worse.

Why I'm Voting No: A Post-Euro Ireland

Just over a year ago, I blogged that Ireland's imperative was to see the Euro fail.  A somewhat bleak picture, perhaps, but if anything I am even more convinced of that now.  The Euro project has been a disaster.  While politicians have been kicking the can down the road, past one election after another, at some point someone needs to carry the can (see what I did there? nice, eh!).  There are two important questions.  What is the trigger point for someone to actually call a halt to this charade of a currency union?  And what happens then?

I think the trigger point will be a de facto default in Spain or Italy, though it may take some time to take effect.  Spain looks the most likely.  The fundamentals of its economy are weak; its property bubble was as severe as almost anywhere else; its unemployment rates are appalling, and the black economy is burgeoning.  So Spain one day will go to the bond markets and find itself priced out.  that will result in a withdrawal from the bond markets, and a resort potentially to bilateral loans with major trading partners, or - if the shortfall can be reasonably contained at least in the short term - the EFSF.  However, the EFSF will include monitoring, and that's where the damage could be done.  The Euro project would not fail because of a de facto default, but because after the default the scale of the hole in Spanish finance - and by extension European finances - would begin to be revealed.  Heading towards a trillion Euro funding shortfall, possibly several trillion Euro, the impact on the Spanish financial system would be catastrophic, and the domino effect on French, German and in particular English banks would be crippling.

The net effect would be for Spain to withdraw from the Euro and devalue its currency by 50% or more.  Greece would immediately do the same, immediately followed by Portugal, Ireland and most likely Italy.  The Eurozone would effectively agree to dissolve itself, shaking hands with one another and wishing each country all the best, with some wishy-washy think tank established to understand the causes of the collapse, and make recommendations for alternate structures towards future integration.  The next thing likely to happen is the repudiation of debt - at such an enormous scale that bank collapses happen with alarming frequency.  The banks that are left standing will be banks that are asset backed, and controlled out of other parts of the world.

The rest of the world of course would not be immune from the goings on in Europe, but most American banks have either hedged their Eurozone exposure or reduced it drastically.  Chinese banks are heavily asset based, but would be exposed to the global slowdown that would inevitably follow a Euro collapse.

In Ireland, we would see an acceleration of the current austerity, but we'd get through it in two or three years, and everyone would be in the same boat both inside and outside the country.  Mortgages would be dramatically written down; the public and civil service would be thinned more aggressively than is currently the case; the national debt would be repudiated, and currency trading would be regulated heavily.  With no access to the markets, we would not have cash (which isn't really a concern given that the currency has just exploded) and we would have to rebuild our economy from scratch.  The government has to have a plan for this scenario, it's a very obvious one with a high degree (relatively speaking) of probability.

Teachers would still teach.  Guards would still do their work.  Doctors would still practice medicine.  Food prices would rise in the near term, and social welfare would need to go into overdrive, as would civic society.  And we'd most likely have significant political upheaval.  The new punt would take time to settle, there'd be no new cars for a year or two, and petrol could be in short supply for a time.  But we'd get by.  It would be a shock to the system, but we'd all feel better for it.  A fresh start.  Everyone would have to keep their heads, and stay calm, and for some this would be tough.  Leadership would come to the fore, perhaps not from politics but from local and regional organisations.  We'd probably make some of the old mistakes again, that's human nature.  But we'd do our best to fix them.  Most of all, we as a people would finally be able to take ownership of our country again, and I don't mean from the Troika.  We lost ownership of our country a long time before that, when our political system became poisoned, and the national movement ended.  It would be a wonderful thing to take it back.

So that's why I'm voting no.  We're already living in delusion, and I just want it to end.  I don't want my generation to have to suffer through 20 years of tortuous explanations about how well we're doing and how austerity is working, because, well, it's austere, and it destroys hope.  Maybe Spain blows up in the bond markets, or maybe we can accelerate things a little bit by voting no.  So to Old Europe, to the Old Establishment - Please get out of the new one, If you can't lend your hand, For the times they are a-changin'.

The Politics of Water Meters

Enda Kenny and Richard Bruton were today out in force talking about water meters.  Kenny, amidst some hecking in Roscommon, repeated the position that someone had to pay, and so people would pay.  But, he added, nothing had been decided yet.  Which meant that, erm, maybe we didn't have to pay after all?  Bruton, quoted in the same piece, was talking all warm and fuzzy about water meters being people's friends, and friends of businesses, saving them from the odiousness of compensating for someone else's waste.

We're only talking about the water meters here, not the charges.  I mean, Dear Lord, where were these lads got?  And where's Big Phil Hogan, Minister for Sneaky Taxes when you want some cannon fodder?  Kenny shouldn't be fronting this thing, his role is above that.  On the Pat Kenny show today (podcast), Pat mentioned that his information had the meter's priced between €35 and €75, and the casing at €40, which is in or around €100, which isn't much.  Coming out fast with something that says people can pay fifty cents a week for four years for the meters sounds like a whole lot of sense.  Would completely take the sting out of it.  And a consultation group with the dissenters in the Dáil - ringfenced around water charges - would bring them into the decision making process too, and blunt their blade.

The ULA are doing serious damage to the government and its credibility.  People who would never vote for them are taking cover under their public quasi-official position of "don't pay."  The ULA folks are claiming this as an endorsement, but polls don't put them anywhere near the kind of 50% support they're claiming as a result.   The government is in essence allowing the ULA a false legitimacy, which will get progressively worse, and which is borne of the arrogance of the government.  Whatever you say about Bertie Aherne, he was never too arrogant to talk to anyone - anyone! - and that was one of the secrets of his success.  The government needs to sit down with the ULA and get them onside, fast.  

The Role of RTE in The State

The Celtic Tiger created an anomaly far broader than just the property market. Across all aspects of Irish society, culture, politics and economics, the bubble distorted perceptions of success, probity, and success.  This is just as true in RTE as it is in government, banking and social justice.  RTE is facing much more than a defamation scandal, or accusations of incompetence in handling the Presidential election; it is facing nothing less than an existential crisis, and a seminal moment in its history, a point of inflexion that is extremely important for the State and her citizens.

Like the legal system, the health system and the civil service, RTE is an anachronistic, poor imitation of British structures of the early twentieth century.  While those systems in the UK are not immune from challenge, their philosohpical foundations were well established, and well considered.  There were points of principle that aligned with the society that begat those institutions, and that supported their perpetuation.  Ireland had no such principles, and imitation was a poor substitute.  As a result, we developed a civil service without accountability, a legal system where ordinary people are not allowed to contract directly with barristers or with medical consultants because they are "gentlemen".  We also have a State funded broadcaster that actively crushes competition in the market, and remains in thrall to its advertisers as it decides on programming.

Today, RTE feels itself under pressure for funds, and knows it won't see a license fee increase any time soon.  Its high profile failings - in the Fr Reynolds case, and "Tweetgate" - have caused it to make some cosmetic changes in rebranding "Prime Time Investigates", moving one editor to a new job, and retiring Ed Mulhall off on a fat pension.  That last one rankles.  Noel Curran could never have walked, at 45 he's too young, and the pension wouldn't have been enough.  But Ed had 33 years under his belt, and will likely get appointed to a couple of Quangos and possibly the board of a production company or two.

The extent to which it overpaid presenters like Marian "four hours a week" Finucane was symptomatic of a fundamental failure in its remit - it was beholden to advertisers, justifying wages on ad revenues, and not on the quality or quantity of the output.  While newspapers are increasingly an online business, RTE Online competes directly with them based on state-funded journalism, further distorting that market, and wielding its massive power to the expense of private media.  Commercially, such decisions make sense.  But politically, socially, is this the kind of State broadcaster we should have?

The sensationalism of Prime Time Investigates (one remembers such over-egged installments about waste tyres and counterfeit cigarettes) was not editorially contrived to contribute to the state by holding people to account, but contrived to maximise the audience in order to generate audience, and ad revenues.  That was evident from the hype building that preceded every installment of Prime Time Investigates - this was not news, or even investigative journalism: it was entertainment.  With such a trajectory, the Fr Reynolds incident was unavoidable.  Perhaps not with such devastating consequences, but litigation was inevitable.  The cuts in ad revenue, and an absence of license fee increases have put enormous pressure on managers in RTE to find new revenue.

RTE is no longer an altruistic arm of state, it is a fully fledged commercial media behemoth.  It does not merely fail to deliver upon its remit as a national broadcaster, it undermines the entire commercial media structure in the state.  TV3 and the Independent are increasingly sensationalist and populist because they are driven to the extremes by the monster that is RTS hoovering up all of the space for "conventional" media.  And even The Irish Times is more given to polemic than genuine journalism these days.  Its battle against that trend is commendable.  But the pressures are odious.

The imitation of the British State has crippled our Heath Service, our Civil Service, and our Legal System.  RTE's pale imitation of the BBC has now been shown to have failed.  We need to rethink entirely our structures for State Media, and build one that suits Ireland.  Let the state run a news channel on television and radio, with no advertising, and privatise everything else.  Then we can work on law, health and the civil service.

The Democrats and America's Future

The Republicans are in trouble in America, and they know it.  It's not just because Romney will emerge from the primaries such a battered and bruised candidate, that any chance he had of energizing the base will have disappeared like an etch-a-sketch in a paint mixer.  It's longer term than that.  The Tea-Party movement was the first in what will likely be many splinter groups fragmenting the conservative right, as the demographics of America continue to change, and progressive liberalism asserts itself as the dominant force in US politics.  

The old, right wing white middle and lower classes are becoming increasingly marginalised, and radicalized.  Krugman's acerbic deconstruction of Paul Ryan's budget placed the blame for this "fraud" with "the hard right’s grip on the GOP"  In the Globe and Mail, Doug Saunders highlights the long term trend in America towards progressive liberalism, but fails to consider the impact on the new minority.  The GOP is becoming less and less relevant to American politics, and those who it represented are in danger of slipping into dangerous territory.  The imbalance between left and right, the divisiveness of the politics, and the income inequality gap are combining to detach Washington from the rest of the country.  In effect, the march of progressive liberalism risks disenfranchising great swathes of America, and undermining its very legitimacy.  Choppy waters lay ahead.

Pee Flynn Resignation Letter

This just in - not verified, but what the hell...

Collecting the Household Charge

This is an absolute laugh.  Last week, Big Phil Hogan said that he was getting on extremely well with the Data Protection Commissioner.  He went on to say - if I can paraphrase - that should talks break down, notwithstanding their positive current bearing, he would look to legislate in order to get access to home owner address information.  I explained then that such a course of action would likely fall foul of a constitutional reference to the Supreme Court, which if not referred by the President, would have been challenged by any number of campaigners. 

Now we hear that county council workers may be calling door to door to remind people of their obligations. The public service trades unions - a heinous bunch if ever there was one - came out on the Six O'Clock news and said, essentially, that none of their members should participate in this terrible business.  It was bad for the workers (i.e. they should get paid extra if they have to do additional work), and bad for the country, presumably because the union rep on the telly wasn't best pleased with it himself.  It's not clear if the suggestion is to collect the tax, or simply to inform people. But what is certainly clear is that this is all about data protection - the government know all they need to know, they're just not allowed to know it for these purposes.  Hah!

Even though county councils, and local councils, may know the addresses of their people, they are not allowed to know that for the purposes of this tax.  But they can call to people's doors, and presumably in calling to each door inventory those houses that they have called to, by simply walking down the street, and calling to the houses that they see, which is not of course in breach of any law.  Getting into apartment blocks would be fun, of course.

In addition, people can refuse entry.  There is no compulsion to answer the door, nor to speak to them (even to confirm a name) when they do.  The council officials won't be able to write to them because they don't have their addresses (at least for these purposes).  If they could, they'd simply send them a bill - that's why no one is being sent a bill.  Because they don't have your addresses (for these purposes). 

Just now on The Week in Politics, Labour's Joe Costello said that the government will first be chasing people who have registered second homes for the second home tax, because they have a register of those people. I suspect however that it would be equitable to use that information for the purposes of the household charge (as distinct from the second home tax) because the information was clearly gathered in the first instance for taxation purposes.  But I suspect it's also true that they can't use it to chase them down for their primary residences, even if they gave that address as their contact address!  Can you imagine how smiley Big Phil must have been as the Data Protection Commissioner explained this to him (presumably while they were getting on extremely well!!).

In the week that the Mahon Tribunal reported on events of twenty years ago, and when Steve Collins and his family left Ireland because the State could no longer protect them from other lawbreakers, one wonders why it is so difficult to run this country expediently. Other countries tend to have far more effective legal systems where human rights are protected well, but not at the expense of justice.  If the protection of human rights - such as the rights to fair procedures, due process, and good name - results in justice in effect being avoided, then that protection is rendered moot.  We may have the wrong balance in this country, and one suspects - a la Big Phil - that perhaps we have sufficient swagger in government to change that.

Fianna Fáil and its Damage to the State

Barely 24 hours after the release of the final report, Fianna Fáil's has decided to ignore the allegation that Bertie's cabinet ministers tried to collapse the tribunal, because a) it's not "a finding", b) no one is named and c) sure, it was only a bit of school-yard name calling anyway.  It's a serious allegation, according to Micheál Martin; but not one that he accepts.  So we'll move on from that, shall we?

Wait a minute.  This is at the heart of the matter.  Let's look at the reasons.  That it is "not a finding" is irrelevant - this is not a court judgement, but it is the considered view of the State through the lens of a tribunal that - as Fianna Fáil so often complained about - left no stone unturned.  That it is in the headline section (under 1.85 and 1.86) is enough.  Is Martin suggesting that because it's not "a finding" that it's irrelevant, and doesn't need to be addressed?  It was clearly the Fianna Fáil members of cabinet - including Martin himself - who were involved, yet he's splitting hairs about what may or may not constitute an attack?  This cannot simply be brushed aside.  Remember when Cearbhall Ó Dálaigh resigned in 1976 when Paddy Donegan called him a thundering disgrace for sending a bill to the Supreme Court?  That wasn't merely a matter of confidence, but an ignorant disdain for the offices of state.  Martin and his colleagues in cabinet represented both the executive and the legislature, and their comments on the probity of the tribunal - an extension of the judiciary - was an appalling indictment on their disregard for Justice Mahon and his colleagues.

Fianna Fáil were in power too long.  They were the masters of the Universe, they were unimpeachable.  They bounced off the tribunals every now and again, but nothing ever stuck. Bertie, the teflon Taoiseach, was a miracle worker.  He carried them through thick and thin, somehow keeping the PDs, and then the Greens onside, and all those independents.  But at the base of it all was an ignorance of law, a disrespect of office, and a treacherous obsession with the spoils of office.  The country became their plaything, its wealth and structures their party fund, and if they could make a few quid on the side, whether that was Jim McDaid practicing medicine, or Ray Burke or Pee Flynn taking donations (not even trying to dress them up as consulting fees!), then so much the better.

All the while, the country was going to ruin.  Fianna Fáil blamed Lehman Brothers, the banks, Europe, the Euro, the Regulator, anyone but themselves.  The problem was that for all that time, since 1997, no one in Government was actually doing their job.  No one was interested in doing their job, least of all their leader,  Bertie Ahern.

By the time it came to Ministers attacking the tribunal in late 2007, the state, the people, the roles they were supposed to serve and the responsibilities they held meant absolutely nothing.  All that mattered was power, office, and the protection of their privileged position. That their actions compromised the rule of law didn't concern them.  That their actions breached the principle of separation of powers didn't concern them.  that their actions undermined the integrity of the state didn't concern them.  Whether Fianna Fáil decide to ban Bertie Ahern or not is irrelevant.  The party has done more of an injury to this state than the IRA and the British Government combined.  The leadership should be imprisoned, and Fianna Fáil should be proscribed as a political party. 

Militant Cynicism

I'm wondering if there is such a thing as militant cynicism. The whole occupy movement seems to be based on that kind of thing - "you's are all evil and bad and wrong and we're mad as hell and we're not going to take it any more!" Now, should that be a chant (and I'm sure better chant writers than me could make it a little more snappy!) one wonders how it escalates. It hasn't escalated, one suspects, because there isn't really an alternative proposition that people can support, as I blogged about yesterday. In the absence then of an alternative, are people just venting because they don't have stuff, or because they're just cynical, in an extension of a kind of teen angst? Perhaps as the world has gotten generally wealthier, particularly in the developed world (Occupy Bengaluru, anyone?) teenagers are hanging on to their angst for longer, perhaps into their twenties. But there doesn't seem to be a point to escalate to, because there's no real philosophical substance to cynicism, and therefore it's difficult to make the leap to militancy (at least for the protesters, whatever about the cops!)

Data Protection - Letter to TDs

My letter sent to my constituency TDs Sean Sherlock (LAB, Minister for Research and Innovation), Dave Stanton (FG), and Tom Barry (FG) today.

Gentlemen,

As my constituency representatives in government, I would like to register with you my abhorrence of the Minister for the Environment's proposals to cross-reference data from the ESB in order to prosecute his agenda on property tax. I have written to you Dave and Tom before about my concerns on the property tax itself and its equity - this specific concern is about information, and data protection.

Data protection is there for a reason. It is designed to protect citizens against improper or unauthorised access to personal data, or access to personal data that that citizen has not acceded to. It is not some abstract European imposition, nor a seemingly unnecessary layer of bureaucracy. Minister Hogan's dismissive and sarcastic reference to the commissioner (with whom, he said, he was "getting on exceptionally well") was an appalling indictment on his respect for, and ignorance of, the importance of the office. His admission shortly after in the same interview earlier today that he would turn to legislation should it be needed to access the data was an acknowledgement of the true state of the Commissioner's position. Legislating to access this data would be a grave and most likely unconstitutional step.

I am copying you Minister Sherlock not just because you are one of my representatives in government, but because there are ramifications in data protection far beyond simple property tax that impact your ministerial brief. If we are to undermine the authority of the data protection commissioner for so coarse and short-sighted a reason as tax collection, where next do we arbitrarily attack the principle of data protection? What about data based businesses, intellectual property, software, and business intelligence? What about businesses built on data monetization like Google and Facebook, are they next to be compromised? What about the new up and coming technology companies who rely on the protections afforded citizens by data protection in order to support these businesses? We are fond these days of the phrase "moral hazard" - while we are bending over backwards for the Germans in order to avoid one in Europe, we are seemingly blithe to its occurrence at home. Hypocrisy!

A final point in my argument - I don't believe that legislation to circumvent the power of the data protection commissioner would be constitutionally valid, as it would be in breach of a right to privacy, and possibly other rights. It would almost certainly fall foul of the European Convention on Human Rights, and in the absence of a derogation from the appropriate provisions, most likely in breach of European Law as well. At least we have Europe to protect us!

Minister Hogan is a coarse, heavy handed, indelicate and ignorant legislator. He needs to learn about law, about rights, and about his duty to the people of Ireland. There are limits to our patience - I have spoken to friends about this, who all agree; other Fine Gael voters are similarly astonished at his apparent disconnection from his voting constituency. I will continue to broadcast my concerns on social media, and try to build awareness for the perils of the Minister's proposed action. Alexis de Tocqueville, who wrote just after the French Revolution about Democracy described what he called the "Tyranny of the Majority" - perhaps this is what he meant. Michael McDowell acted in a similarly dismissive way when as Minister for Justice he convicted Frank Connolly in the eyes of Chuck Feeney even though the Judiciary had seen fit to acquit him, because it was politically expedient for him to do so. More generally, it was political expediency that got us into the trouble our country is in right now - more than anything we need leadership - political leadership, moral leadership, and social leadership.

I have registered for and paid my property tax because it is the law, and therefore my duty as a citizen. I think it has been handled cack-handedly from the start, and continues to be deployed without political sensitivity, without planning, and without wit. Whatever the future holds for the property tax, let us not allow this debacle to further undermine the democratic structures of this country, and data protection as an important pillar of our personal rights.

Yours Sincerely,

Anthony.

Guillotining the Bankers: Beyond Democracy?

A subject that's I've been ruminating on a little in recent times has been the inadequacy of this trite quote from Winston Churchill that "democracy is the worst form of government, apart from all the others that have been tried." Another quote attributed to him was that the best argument against democracy was a five minute conversation with the average voter. Go back another twenty years and Woodrow Wilson lamented his country's descent to become "[n]o longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by
the opinion and duress of a small group of dominant men." Such deep cynicism in such vaunted leaders needs to be heeded. The problem, of course, is in Churchill's first quote in particular - what's the alternative?

Inequality was in many respects at the heart of the French Revolution. But the disproportionate wealth of the ruling nobility and higher clergy only resulted in civil disorder when the wealth of the bourgeoise in particular, and the masses in general, became an existential issue in absolute terms. People were starving, and could not afford bread. That was not a jealousy, or even a relative issue. It was straightforward - the people needed to overthrow the régime in order to survive, and survival is an extraordinary motivator.

There was however another critical factor that contributed to the revolution in France - the existence of a reasonably well thought through alternative. Rousseau and the Philosophes, with their publication of the Encyclopédie in the middle of the eighteenth century, and the other enlightenment philosophers Hobbes, Locke, Montesquieu and the rest of them all contributed to a new thinking about individual rights, equality, and society. A model was being articulated beyond religion, and beyond nobility. Reason was gnawing at the populace for years now, nudging them along - kings are just men; priests are just men; both just like us.

Today, we can see the inequality in the democratic structure and it is plain for all to see. Militants argue for civil disobedience, such as non payment of austerity taxes, but few coherent voices can be heard with credible alternatives to the appalling vista of businessmen guilty of despoliating the nation's wealth and creditworthiness playing golf on the Algarve while decent honest men see their family homes reposessed by the Banks their taxes bailed out. What is the alternative system? What is the alrernative to liberal democracy? Just "not paying" the debts incurred by the state - for whatever reason - misses the point. The system wouldn't be changed by such actions, it would merely play out the inevitable, for good or ill, within the structures already in place. Ireland may or may not be better off for it, who's to know. But on the other side of it, in a generation or so, when these difficult days are being forgotten by people who weren't even born at the time of the Celtic Tiger, the same system will breed the same inequality, and the same unfairness.

Perhaps - more disturbingly - it could even get worse. In the absence of a credible alternative, the liberal democratic system itself could be radicalized, pushing right wing extremism to the fore in a restatement of mid twentieth century facism. Inequality could be exacerbated, and the powerful and wealthy could become even more detached from the people. Plus ca change, then!

Choice Architecture and the Sean Gallagher Bias Problem

There's a story about the woman who managed school dinners in Chicago for many years. She had huge amounts of data, and did some analysis on the data to understand what the kids were eating, and how it related to menus and displayed. She began to play around with the menus, and the placing of food in display cabinets where the kids would queue to get their lunch. What she found was astonishing. To a substantial degree, with the data in hand, she could control the daily diets of 150,000 kids in the Chicago scool district.

The story is told in a book called Nudge, by a couple of academics in the field of behavioural economics. The woman had created a problem - now that she understood the value of what these guys call a "choice architecture", she was aware that her construction of that architecture would influence the behaviour of those supposedly exercising their free choice. Several moral and philosophical issues ensued, but you can read the book to find out more.

Fast forward to the RTE Frontline programme and allegations of bias against RTE. Whether they like it or not, RTE as the disproportionately large broadcaster in the state constructs such an architecture. It cannot by definition be unbiased, as the presentation of the candidates will influence the decisions people make. Sean Gallagher in particular understood this - the extent to which other channels were open to him were limited, as he had limited funds. So he concentrated on TV. And, ironically, it was TV that got him in the end.

The only real way to avoid bias in broadcasting is to have genuine competition in the broadcasting market, as there is in the US. There are problems with that system too, of course, as anyone who witnesses the lowest common denominator rush for advertising dollars on US TV will attest to, to the extent that the free market demands the rise of a public broadcasting service, PBS. And that is not a matter for RTE, but for government, and public policy. Few governments have dared to cross RTE in the past - but now, with a particularly strong government, and a particularly chastened RTE, is an exceptional opportunity. The question is whether this government has the leadership, and the awareness to seize what could be a transformational opportunity.

Sean Gallagher: Don't Look Back in Anger

A brief tragi-comic interlude then...

Sean "I'm Not Bitter" Gallagher has a new theme tune - an adaptation of the old Oasis classic, "Don't Look Back in Anger" - I just caught the first few words...

•Flip back to the Frontline Debate

•We were getting on great

•The Aras was in play

•I said that I didn’t recall

•Any fundraisers at all

•I thought I’d gotten away

•

•Then a fella sends a tweet into the show

•Where it came from no one really seems to know

•Out it comes, jaw hits the floor

•I didn’t know which way to look

•Martin smiled, “your goose is cooked!”

•‘cause now everyone thinks I’m Fianna Fáil

•

•And so it's not to be, It’s now Michael D, Could have been me

•I know it’s too late, but I don’t look back in anger - Positivity