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The Digest – Dec 13 2009

The weekly round-up. Last week’s here.

– HOME

How I missed this one last week, I don’t know; Fergal’s excellent piece on the social dynamics, misconceptions and misinterpretations of fascism, and around the word ‘fascist’.

Watch out, The Guardian; Elaine Byrne is looking for help investigating the accounts of a 1940s Irish politician.

Nyder O’Leary with the most thought-provoking piece I’ve read on the Budget, and wider economic thinking, anywhere – blogs or newspapers.

It was suggested several times that a third tax rate on high earners should be applied. This was rejected on the basis that it wouldn’t raise any real revenue, and that many of these people would probably up and leave the country (like, say, the owner of Newstalk). This is, quite probably, true. The tax wouldn’t be any great economic benefit; and yet it would set an entirely different tone to who we value most in our culture. It would have told the wealthy that a significant responsibility for the country’s well-being lay with them. It would have said that we don’t judge the worth of an individual in monetary terms. It would have sent a message that, if a rich individual felt they had no duty to society and wanted to retreat to a tax haven, then they could fuck right off and we’d be happy to pay for their ticket; that this super-class are due no more respect than a care assistant or street-sweeper.

John McGuirk in stirring-up-lefties shocker; “The Sickest part of Green Culture”

Ehem. Marc Colemanwrites in The Indo on Brian Lenihan;

Heroism is not an overstatement to describe the man’s achievement. But the Greeks do tragedy as well as mythology.

Like many other high achievers, Lenihan is a Belvedere boy. One of the few private schools on Dublin’s northside, Belvedere boys are known for their lack of snobbery, their decency and their charity to others. But they have a flaw: they have a sense that they alone are always right. And often, this is true.

“Hero; A person noted for feats of courage or nobility of purpose, especially one who has risked or sacrificed his or her life: soldiers and nurses who were heroes in an unpopular war.”

Might have to ask The Frontline Alliance about how they feel about ‘Fianna Fail ministers for finance’ being added to the definition.

Anyway, onto…

– WORLD

Continue reading “The Digest – Dec 13 2009”

"Same people… influencers, same holders of power"

I was on Adrian Weckler’s blog earlier watching recommended clips on Youtube when I happened upon the one below via the ‘related videos’ function.

It’s Matt Cooper talking at the Irish Institute of European Affairs Young Professionals Network.

Now, ignore the fact it was a “Young Professionals” event – seeing as he speaks about elitism, sameness, people being treated certain ways because they’re wealthy etc – and have a listen.

The last two minutes particularly (this was filmed a few days before the Budget…)

I worry, as well, about… I about things like… for example recently, the Farmleigh initiative whereby an awful lot of the failures of Irish life – the guys who were treated with extraordinary deference because they’re wealthy – went up, as if they had no responsibility for the mess we’re in [like] “we’re the guys who have all the ideas to dig ourselves out”. Continue reading “"Same people… influencers, same holders of power"”

A minister's short memory; A Govt's short-term policy

Minister Martin Cullen spoke to The Irish Times Travel supplement about the hotel industry on Wednesday, post-Budget;

He warned that a lot of the Republic’s hotels, which have an overcapacity of “about 15 per cent”, “will probably go, through Nama or one way or another”. He said: “In fairness to [hoteliers] they are kind of focused. What we want them to do is to focus on their own business, to stop worrying about what the other fella is doing, to focus on how you can be more competitive.”

The Minister was clear about where the Republic’s tourism industry got it wrong: “We priced ourselves out of the market. Golf is a very good example. We had and still have a fantastic golf product, but charging guys €400 and €500 for a round of golf on the west coast of Ireland was crazy. That is all gone, because they lost their market, and we have got to go and rebuild that market…”

Eh.

At one point in the late nineties there was a shortage of hotel rooms, partially weakening Ireland as a tourism destination. This would likely have changed naturally as the economy developed, accompanying the influx of foreign direct investment. In those circumstances the industry would have developed in same way as has elsewhere; with individuals or groups with an interest in building a reputation (and sustainable profit) in the sector setting up hotels. That would have quickly filled any vacuum in the market that existed.

Instead, the Government of the time, led by Minister Cullen’s Fianna Fáil party, altered the policy. Matt Cooper covers what happened thereafter better than I could in his excellent book Who Really Runs Ireland? The Story of the Elite Who Led Ireland from Bust to Boom… and Back Again.

My emphasis;

The support for development of the hotel industry made sense at one point. There was a shortage of suitable stock of hotel bedrooms and associated facilities, which put Ireland at a disadvantage as a hotel destination. Unfortunately the availability of massive capital grants to offset against income from other investments persuaded many land-owners and builders – with no experience in how to run hotels of real interest in the provision of the necessary service – to enter the hotel construction game. Continue reading “A minister's short memory; A Govt's short-term policy”

A Smart Budget for a Smart Economy?

[Cross-posted on Irishelection.com – please appreciate I wrote this at 1.30am after a day spent reading official documents. Mistakes are a possibility, I’m open to discussion in comments section]

It’s about a year since An Taoiseach announced plans to develop ‘The Smart Economy’ (the successor to ‘The Knowledge Economy’, remember that?). In those twelve months we’ve heard constant mention, plugging and referencing of the phrase. It has become a Government mantra, said constantly when the state of the public finances is discussed. On Drivetime today Brian Lenihan spoke about it, on the Nine News Brian Cowen picked up the baton and later he handed it onto Eamon Ryan for Prime Time. You can be guaranteed we’ll heard it mentioned every few hours in the next week too.

“We need to settle the public finances with a view to developing a model for sustainable growth through the Smart Economy, going forward”, don’t say it doesn’t ring a bell.

I can’t find an explicit definition of what the Smart Economy would be constituted of, but if asked, I’d guess a Government representative would describe it as something like; “an economy that has a workforce that is able, educated, competent and competitive in areas and skills which will be needed by companies in growing industries, to attract those companies”. Fair?

Continue reading “A Smart Budget for a Smart Economy?”

FOI and the Gardai

Thanks to access-info for this one:

All that is needed for An Garda Síochána to come under FOI is the signature of Finance Minister Brian Lenihan, and some regulations to be implemented. Then we can take our place among such nations as Moldova, Georgia and Azerbaijan as a country that allows citizens to request information from their police force. The Gardai must be brought under FOI as a matter of urgency.

O'Nuallain, Gormley, DCU and the Employment Appeals Tribunal

While the Budget rightly dominates coverage today, a story that on other days may have been a page lead, sits quietly in the bottom corner of a late Home News page in The Irish Times.

Might be nothing huge to it, but interesting all the same. Olivia Kelly reports…

MINISTER FOR the Environment John Gormley intervened in a disciplinary dispute between DCU and a lecturer at the university, when he was a Green Party TD, an Employment Appeals Tribunal has heard.

Mr Gormley in 2002 contacted the president of DCU, Ferdinand von Prondzynski, on behalf of computer applications lecturer Dr Seán O’Nuallain. Prof Prondzynski told Mr Gormley it would be unethical to discuss the case, the tribunal heard…

Read the rest of this article on Irishtimes.com

The Digest – Dec 6 2009

Starting now, a Sunday night weekly round-up type thing.

The Digest will contain links to sources and stories worth reading – usually on topics kinda relevant to our terms of reference – from the week that was…

There’ll be about five links under each of three headings, Home, World and Other.

– HOME

Keiran Walsh, lecturer in UCC, writes about The Murphy Report and intra-agency co-operation on the excellent new Human Rights in Ireland blog. Walsh is currently pursuing a PhD examining the role of risk analysis and preventative measures in child protection. He’s also a former advisor to the Special Rapporteur on Child Protection and Barnardos. Subscribe to that blog.

Chief Cedar, union member and now union critic, WorldByStorm, eviscerates the union leadership for their negotiation failures…

That we are, as it were, being forced by orthodoxy to look at only one side of the equation of tax and spend, that being spend.

Indeed one could argue the the strategic goal of the unions should have been to act to put that argument front and centre before the Irish people, ahead of public sector wages, ahead of everything. Because once you accept the parameters of orthodoxy you’re lost, since then it comes down to how much is cut and not why there are cuts. And since the eschatological approach of those arguing for cuts leaves no wiggle room (look at the actuality of unpaid leave, effective 5 – 7% wage cuts, as against… er… 5 – 6% wage cuts sought by Cowen today from pay cuts). Truth is pay cuts may be less penurious than unpaid leave. But that won’t get through the filter.

Despite the impression held by many, just 16% of families traveled north of the border to shop in Quarter 2 (PDF link) this year, says the CSO. Continue reading “The Digest – Dec 6 2009”

The tax defaulters list; June to September

The Revenue Commissioners published their quarterly list of tax defaulters during the week. It’s always worth a scan through if you’re a nosey bollocks who doesn’t like tax avoiders journalist at a loose end.

Revenue Tax Defaulters List for June 1 to September 30 2009

€179.4m was recouped altogether, with details of the big-baddies being made public. It was a colourful bunch this time too, a postman, the owner of a lap-dancing club, a taxi driver, a singer and – with impeccable timing – a priest, were all amongst the redden-faced. The usual types were in there of course also – property developers, construction industry types, farmers, auctioneers, company directors, etc.

The papers and broadcasters, as is their perogative, covered the stories of the lads and lassies fined big numbers. I prefer the other stories though, the ones that tend to get glossed over… you know, the people fined just forty or fifty grand – as opposed to millions – for trying avoid contributing to the country’s coffers…

It’s been a tough few months for Michael McDarby and Séan Acton. Back in February 2008 the two lawyers from Mayo were dragged before the Solicitor’s Disciplinary Tribunal (SDT), where they were found guilty of eight counts of professional misconduct. An embarassing incident, no doubt. According to the Mayo News, the counts included… Continue reading “The tax defaulters list; June to September”

BOI & AIB: A year? More like a week…

Four days ago on this site I noted Miriam Lord’s article in The Irish Times about representatives of Bank of Ireland and AIB appearing before the Oireachtas Finance Committee. Ms Lord wrote…

The Bank of Ireland went so far as to say it wouldn’t have to go back to the Government next year for a further handout. Sheehy was similarly upbeat about AIB.

Today RTÉ Business Editor, David Murphy spoke on the One O’clock News (TV) on the likely repercussions of this NAMA-related story…

Previously people expected that the discount on the loans would be in the region of 18% for Bank of Ireland. [Today] Bank of Ireland has got more information regards how the loans will be valued and it has checked it against its own loan portfolio and as a result it has given a broad hint that the figure will be 25%. That’s a big change there, that means they will require more capital…

Later on the Six One Mr Murphy went a step further…

Bank of Ireland had expected a discount of 18% on the €16billion of loans it will transfer to NAMA, now that discount will be more like 25%. That means the bank will need more capital, potentially a billion euro more than expected.

If things are bad for Bank of Ireland they are worse for AIB which is to transfer a much bigger €24 billion of loans to NAMA.

The weaker position of both banks means using the stock market to raise funds is a less likely option. The only alternative is getting State money to stay above water.

RTE News understands one option under consideration by Government is for the State to convert the €3.5 billion already given to both banks into ordinary shares to plug the gap in their finances – but that would imply massive state shareholdings.

It looks like Cearbhall was right to be sceptical…

What I find odd – and believe me I’m no business expert – is during the cited exchange at the Oireachtas Finance Committee Deputy Michael McGrath said to Richie Boucher of BOI that the discount was never going to be near 18%. Not that he should have needed notifying. This, Mr Boucher conveiniently ignored in his reply…

Richie Boucher: … Bank of Ireland’s modelling, based on various assumptions with regard to what could be the discount, means that we can take the discounts that might be envisaged and still be in a position to meet the regulatory capital requirements. However, in the medium term we will be obliged to look to the level of capital that is appropriate. The level of capital we require is also proportionate to our balance sheet.

Deputy Michael McGrath: Realistically, if the write-off is going to be of the order of 30%, or a further €4 billion to €5 billion, what level of additional funding – whether from the State or from international investors – would the bank require to satisfy the requirements of the markets?…

Richie Boucher: …Based on the modelling we have carried out, our core tier 1 capital will be significantly ahead of the regulatory requirements and will in fact be such that we believe it will satisfy the bond markets on which we are reliant. We are satisfied, taking into consideration the potential discounts we would be obliged to accept in respect of the transfer of such loans, that the bank will be significantly in excess of the requirements relating to its being able to continue to fund its balance sheet on the markets. I do not believe that this will be an issue.

Bankers appear before finance committee… this time

There’s a most interesting and pertinent piece of political writing in today’s Irish Times by Miriam Lord. She watched high-ranking bankers appear before the Oireachtas Finance Committee.

Eighteen months ago…

…when the same Oireachtas committee wanted to ask the same banks about the way they conducted their business, fewer chairmen and chief executives deigned to turn up. To add insult to injury, the bankers then proceeded to talk down to the worried politicians, assuring them their fundamentals were sound.

…Richie Boucher, before his big promotion, was present back in July of 2008. “Unequivocally,” he declared, “we do not believe there is a Northern Rock lurking in Ireland.”

His colleague, David Guinan, stated: “We pride ourselves on the fact that we have been and continue to be very prudent and responsible.” Donal Forde of the AIB offered the following gem: “In regard to lending standards in AIB, we have behaved very responsibly in recent years and we have maintained a very prudent credit stance.” (Correct. There was a whole shed load of them.)

The highlight of the committee meeting was supplied by Willie McAteer, then executive director of Anglo Irish Bank. “Clearly, the whole perception of Ireland and the negative sentiment towards it are obviously of concern to us. However, this sentiment is not borne out by the fundamentals.”

Here’s another rib-tickler from Willie: “I reject the suggestion that banks have been foolhardy in recklessly lending and driving up values . . . in my experience, the banks have been prudent.”

Yesterday…

The Bank of Ireland went so far as to say it wouldn’t have to go back to the Government next year for a further handout. Sheehy was similarly upbeat about AIB.

Do you believe them this time ’round?

Read Miriam Lord’s article in full on Irishtimes.com