Archive for July, 2012
The world is puzzled by how passively we have borne the gambling losses of the super-rich. Where are the marches, where the strikes, the riots? Are we stoic or fatalistic? Have we internalised the blame for the bankers’ catastrophe? Or is it, as some theorise, just too damn wet here to take to the streets? Whatever the reason, it seems that the Irish just don’t protest.
And then one of the super-rich is convicted in court, and people come out to defend him in their thousands.
What, you might well ask, the holy fuck?
The Irish just put personal loyalty above anything else – including the law? Well there may be something in that, but it is too easy to be a complete explanation. You need to see the perspective of people who believe, not totally unreasonably, that Sean Quinn was a kind of hero. For them the villain is Anglo Irish Bank, Quinn its innocent victim, a decent businessman sucked into its corrupt financial web.
Were Anglo villains? Absolutely. Not the only villains, it must be said. Virtually every financial institution got greedy, took risks, and broke laws. But Anglo it seems were the most egregious of all. Yes, they were villains.
Was Sean Quinn innocent? Was he hell.
Their dealings together were so extensive that his interests and the bank’s were inextricable. His family borrowed something around 2.8 billion from Anglo. Two point eight billion. Just his family! The Quinn group of companies borrowed another one point two. Four billion is not the sort of money you advance to an unsophisticated innocent. Four billion is the sort of money that’s difficult to even conceptualise.
They were a good business empire I guess, as business empires go, that got involved with the boom mania. They spent money to make money, and then borrowed to make even more. It is sad and unfair, yes, that a family that put decades into building a vast fortune can lose it all to some bad decisions. But they made those bad decisions. He created thousands of jobs, but put them all on the line because of ambition. He took huge risks with borrowed money.
And his supporters know that of course. They’re in denial about it, but they know it. Their interests have also been his interests – for so long now that they overlooked the horrifically suspect relationship with Anglo. They turned a blind eye to things that should have been warning signs.
Sean Quinn was not personally responsible for getting the country into this much trouble, no. Perhaps he was one of the biggest single gamblers, but it took a hell of a lot of people like him, doing things like he did, to get the country into this much trouble. And if people can know this but still support him because he was their overambitious, risk-taking billionaire, then they have learned nothing.
- Sean Quinn, son & nephew guilty of contempt of court (newstalk.ie)
- Bankrupt Irish billionaire Sean Quinn’s son and nephew jailed (irishcentral.com)
- Bankrupt Irish billionaire Sean Quinn launches bid to avoid jail – The Guardian (guardian.co.uk)
Well now it’s a stage play. I just saw it, it’s lovely. The Great Goat Bubble, as this incarnation is called, concerns a meeting in a lonely railway station between Irish innocent Jude and economics PhD Ibrahim Bihi, who recounts how he became unimaginably rich through exploiting a price inefficiency in the Somali goat market.
It is of course a satire on our recent boom and how it inevitably bust – though written before the bust actually happened. It is also a lesson in economics, delivered by a character with an economics doctorate, and it works brilliantly on that level, as good a grounding in market inefficiencies, asset price bubbles, futures, derivatives, and all the other shit that hit the global fan as you could hope to get in eighty minutes. And yet you forget this because it is a story about a man on a financial adventure, discovering for himself the flaws in supposedly perfect markets and exploiting them joyfully. And because it involves a heck of a lot of goats.
It expands on previous versions, in part to make it relate more to the particular bubble we knew in Ireland, where a decade of rapid but largely real economic development was squandered on worthless property. Also to go deeper into the intriguing character of Bihi and his feelings about the boom that made him both a billionaire and a pauper again. He has no regrets, seeing himself merely as an avatar of the Smithian Invisible Hand, and argues convincingly that to attempt to curb the free market is to fight human nature and so must lead inevitably to disaster. No critique is offered; only our perspective reminds us that there must be something wrong with Bihi’s seductive philosophy. We are left, I guess, to find the solution to economic instability ourselves.
Performances were note-perfect. Wil Johnson had me utterly convinced he was a Somali economist, Ciarán O’Brien made the outlandish character of Jude real. Mikel Murfi‘s direction was immensely subtle, turning a conversation into gripping theatre. A play for our times. I hope it comes to a town near you.
- The Great Goat Bubble – review (guardian.co.uk)
- Ending an endless game: an interview with Julian Gough, author of Minecraft’s epic finale (boingboing.net)
- The Jude in London, Not The Booker Prize, Flashmob Book Club (juliangough.com)
Estate agents insist that property prices in Dublin have stabilised. I remember the first time they said that, back in 2007. And they’ve stabilized regularly ever since.
But you can’t exactly disagree. In a way, house prices are always stable. A house is always worth… about a house. A person can eat a lot or a little food, own a hundred cars or none, but houses tend to stabilise somewhere around the level of one per every two adults. Because try as you might, you can’t live in much more than one house at a time. Logically then, housing ought to be one of the most stable commodities on the market. It’s actually the rest of the economy that has been vigorously swung around this anchor point. During the housing boom, wages may have gone up on paper, but in house-buying terms they plunged through the floor.
Which gives me an idea… We need a new currency, right? The euro, well, it’s lovely and all. I like the colours, and the handy map on the back. But the thing is, we just can’t really afford it. Using the euro is like having a currency on the gold standard when the world is desperately short of gold. You can’t have a functional economy when the standard unit of exchange is hen’s teeth.
And what do we have plenty of? Why, houses! Too many houses, not enough euro banknotes. Think about it.
Of course you can’t put houses in your wallet or bring them to the shops. There will still have to be tokens. But the base currency unit should be fixed to the value of the standard house – say the sort of small two-bedroom starter home that was produced like popcorn during the boom. Notes should be denominated in fractions of a house. That way, the price of a home can never run away from you. Save up 1,000 of the new thousandth-of-a-house notes, and you can exchange them for one standard house at your nearest branch of NAMA.
It won’t stop people charging more than the standard house price of course, for bigger residences in better locations. But the existence of a perfectly adequate house at a fixed price – well, a price that money is fixed to – should act as a powerful stabilising influence. You’ll be able to look at a property ad and say “Well it’s a good house. But is it really worth two houses?”
At around 40 percent of GDP, the cumulative cost of supporting the financial sector accounts for half of the sharp increase in net public debt in recent years.
That’s probably as close to saying “Basically they’d be OK if they weren’t a pit prop for Europe’s collapsing banking industry” as the IMF can allow itself to get.
On the bright side, people have finally been jailed over the billions that were ripped off the nation. Some of the bankers, right? Well no, some of the borrowers in fact. But it’s a start.
(Actually when I saw the headline “Sean Quinn’s son and nephew jailed for three months“, I assumed it was one person. Ours is not to question what goes on within a family.)
Sadly though the jail term is not for social larceny, but merely contempt of court. Which reminds me… Now cases are ongoing I probably need to scatter the word “allegedly” liberally through the following. But it seems that the Quinn family, having invested well but not wisely in the failed Anglo-Irish Bank, attempted to hide their assets from their creditors. Which, since the state has taken ownership of this mess, is us the taxpayers.
There was a stupid debate on the radio today, where a loyal follower of the Quinn camp came on to argue that the family was being persecuted. It’s too late to act like innocent dupes of the big bad bank though, when you’ve been caught trying to hide your money down the back of Russia.
It was a big bad bank however (allegedly, allegedly…), and the other recent good news from the fiduciary front is that Anglo’s erstwhile financial director has been charged with sixteen fraud offences. Sixteen. Imagine, a banker could actually go to jail.
But for how long? A friend of mine did an interesting calculation. A few months ago, someone received a six-year sentence for not paying VAT on the garlic he imported. Don’t say that’s harsh until you see some of the garlic we get in the shops; you’ll agree that hanging is too good for them. The penalty was so severe because the tax he evaded came to €1.6 million. Which establishes that sentences are proportional to how much you rip off the State. Interesting…
Six years for 1.6 million – that’s 3.75 years for each million off-ripped. Anglo’s greedy machinations cost the exchequer €47 billion (€30.6 billion + interest). So if his punishment is to be kept in line, he’ll have to go away for… 175,250 years.
Not to despair though. What with prison overcrowding he’ll probably be out in just a few thousand.
Well I might have expected that would get a reaction… In brief, yesterday I argued that the genie is out of the bottle on US gun control and the only way to reduce shooting sprees is to end the easy availability of ammunition.
I may as well have said it would be more sensible for everyone to go round without pants.
Mostly the comments turned up in more private forums like Facebook, so I will edit for anonymity – as well as to make things flow a little more conversationally. I think we covered some pros and cons of the idea in worthwhile detail though, and I’d like to bring that to you. Especially as coincidentally (I hope) it’s a year today since the Norwegian massacre.
As a means to the end of controlling the supply I suggested people be required to return empty shell cases when they purchase fresh ammunition.
(For no clear reason, I’m referring to commenters as “callers”.)
Caller A – I am afraid you’re ignoring both the ready availability of ammo, at least in common calibers, and the availability of load-your-own technology.
Caller B – And that shell casings aren’t always recoverable, especially small caliber ones like .22. They don’t land neatly in a pile when you eject them, and where people hunt or target shoot in rural areas, there are tall grass and brush and gullies and so on.
Actually I am taking this into account. Yes, people who already have large amounts of ammunition would be able to bypass the system by refilling it. It’s not really relevant because they could achieve the same end more simply by only ever purchasing their legal quota at any one time. This measure in itself isn’t aimed at taking excess or illegal ammunition out of circulation, (though be accounting for all that is held legally, it would help to that end), but at stymieing people who decide they’re going to need a really large amount of ammunition quickly.
Caller B, there would need to be some leeway for attrition as you point out. Obviously shell cases are far more likely to be lost during actual hunting than range firing, so some evidence that hunting took place might be required – perhaps witnesses. Alternatively there are spent case catcher devices available for some types of weapon. [I see that as an issue of fine-tuning legislation, rather than a problem with the principle.]
Caller B – I realize you’re trying to address a current issue but there are already means of taking guns away from people who shouldn’t have them. And this is a state level issue as well. The Constitution is federal but each state determines the level of gun control (what kind, open carry, concealed, etc), and a county might have broad discretion depending on what judge is signing your pistol permit.
There are already laws in place where you can remove guns from people who should no longer have them, for example federal law prohibits gun ownership by anyone subject to an order of protection, or convicted of a misdemeanor crime of domestic violence. State law prohibits ownership by convicted felons, certain misdemeanors, those found to have a drug/alcohol problem, those with certain mental illnesses, etc. Guns can safely be removed from people, too, and are all the time. It’s not like every gun owner comes to the door locked and loaded. You’re making a jump to an extreme situation without considering all the existing laws and details that would prevent that.
Sometimes, tragically, people who shouldn’t have guns get them anyway. Bad things happen. That does not mean the system is entirely broken and extreme action needs to be taken. It may mean parts of other systems are broken, like that which supports and identifies people with serious mental illness or drug problems.
I question if these other parts of the system can be really fixed – if we’ll ever be able to reliably identify people likely to go insane and start shooting before the fact. Not at least without incredibly intrusive and illiberal measures. My idea is off the top of my head and sure to have its faults, but I think it’s really not so extreme. I’m working on the assumption that current gun ownership controls are indeed fairly comprehensive, and that extending them would come at huge political cost for very little effect. My thinking is that the only measure likely to reduce spontaneous acts of mass murder, carried out as is so often the case by people previously unknown to law enforcement, is to put a severe kink in the amount of ammunition you can obtain at short notice.
(And it could be argued too that as a matter of interstate commerce, the ammunition supply is clearly the purlieu of federal government.)
This doesn’t necessarily mean that everyone should be restricted to a day’s supply or whatever. Individuals in good standing – this might be a matter for local law – with established sports or even security needs (and the facilities to hold it securely) might be licensed to keep considerably more.
The idea is intrusive to a degree, yes. There would have to be searches occasionally, if there were grounds to suspect people were hiding ammo. It makes the amount of ammunition in a person’s possession a matter of public interest. But (a) perhaps it should be and (b), I think this would be seriously less intrusive than any other possible pre-emptive measure.
Caller B – So you’re OK with being intrusive on people buying ammo in some arbitrary amount somebody considers excessive, but not OK with being intrusive on people with mental illness?
Yes. Because it would be an incredibly intrusive process to find out who was mentally ill. Especially in a way that could actually identify those liable to murder, if that were even possible. Not to mention the enormous problems it raises around the presumption of innocence. Regulating how much ammunition an already-licensed gun owner possesses is hardly comparable.
Caller B – I think the system that treats mentally ill persons can be fixed IF (and only if) we put the money into it that it deserves.
Also: possibly, just possibly, we can’t make perfect systems for anything. Possibly, sometimes, tragedies happen and there was nothing that could have been done to prevent that. A person hell bent on mass murder will find a way to accomplish his goals. A person hell bent on suicide will find a way to do that. I’m not saying I don’t value people’s lives but band-aid solutions that affect everyone don’t actually solve the underlying problems that individual desperate or violent people have. I simply don’t think that a law restricting ammo purchases or possession is going to stop anyone. One brick of .22 ammo–the standard box size–has about 500 rounds in it. One box of .40 cal has 50 rounds. One box is all it would take to kill 50 people, if I’m a good shot.
I think the argument that some people will kill or commit suicide no matter what you do is invalid. Yes they will – but the harder the means are to come by, the less likely they are to attempt or to succeed at mass murder. Explosives and (the ammunition for) firearms are the surest means to killing a lot of random people. It isn’t seen as problematic to put some fairly steep restrictions on access to explosives.
Caller A – I also have a minor unrelated quibble with charts that one occasionally sees comparing gun deaths in different countries and in the US. The other countries usually include ex Canada, but I’d like to see them include places like South Africa and Brazil. I don’t think Americans are the shootin’est people out there, and it’s not because we can’t get guns. Similarly, pro-gun freedom types like to look at the UK, which has a higher overall violent crime rate (unless they fibbed about that, would have to look). They use this to argue that gun laws don’t prevent violence. To me, it argues that prevalence of violence is socially and culturally based. I shudder to think what a Saturday night in Glasgow would be like if everyone had a concealed handgun.
I have heard the argument that there’s a higher violent crime rate in the UK than the US, but I am extremely dubious – especially in the light of these figures, which put the US murder rate at over four times the UK one. I suspect it’s the result of different definitions being used. If there is anything in it at all, it may be that there are higher rates in the UK for violent crimes other than homicide – simply because the chances of surviving an assault not involving a gun are much better!
The US is definitely not the shootin’est place in the world, not by a considerable distance, so that is one thing to get in perspective. China and Venezuela are quite comparable. Brazil and South Africa have far, far higher murder rates. Jamaica is just insane. But are these comparable countries? Placed alongside other wealthy democracies where the rule of law runs and there is no serious internal security issue, the US is roughly twice as murderous as its nearest rival (which is, oddly, Luxembourg). Twice. And if, as above, we compare it to the countries most of us are familiar with, that are arguably the most similar in cultural values, the murder rate is strikingly higher in the US. This seems to correlate very strongly with the civilian gun possession rate.
Interestingly though, it doesn’t seem to account for all of it. There are two non-gun homicides per 100,000 people in the US, compared to about one in the other English-speaking countries. Americans are therefore more likely to commit murder in general, for reasons we might go into some other time. This muddies the picture somewhat, but it remains clear that this is only one part of a much larger difference in homicide rates. It seems indisputable then that American murder would be reduced if guns – or as I argue, ammunition – were less readily available.
- What To Do About Guns? (i.doubt.it)
President Obama will have to act on gun control – and fast. Otherwise it becomes an election issue, and the Republicans can say that he is going to take everyone’s guns away. Or make everyone carry Gay, pink guns with feathers and sequins on them. Or that only Muslims will be allowed guns. Or that anyone with a gun will have to donate their organs to illegal immigrants while they’re still alive. Anything, really. It’s perfect for them. Mad stuff like him being a Muslim Kenyan will only be believed by people who, let’s face it, weren’t going to vote for him anyway because he’s Black. But the Republicans can say “Well we know he has to do something with your guns. And he hasn’t said what. So obviously it’s going to be worse than you can even imagine.” He needs a policy, now.
But as I said yesterday, how do you control the gun ownership of people who have guns? Well yes, if it came down to it and if the Supreme Court – or a new Amendment – allowed, you could take their weapons off them. The theory that a personal stash of assault rifles guarantees liberty can de refuted with one word: Airstrikes. That’s not to say that a few gun-rebels wouldn’t be able to hold out for years and years in a campaign against government; guerilla warfare is tough and America is a big place. But the vast majority would be defeated easily, the remainder only as free as anyone in hiding can be free.
Of course no one wants another American Civil War. Well OK some people do, but even they want one they can win this time. Nobody wants to see the US descend into armed conflict to protect people from the dangers of guns. Except seriously big fans of irony. There has to be a safer way to lower the danger level. Confiscating legally-purchased weapons would be hugely difficult politically and certain to lead to fatal incidents. But there is a way to mitigate the harm that can be done with them:
Limit the supply of ammunition.
Restrict not the amount you can buy, but that you can possess. Have people bring back spent cartridge cases to show they’re not stockpiling. If they want to lay in more supplies than might be needed for a normal hunting expedition, have them produce an annually-renewable certificate of mental quietude. Give them that Voight-Kampff human empathy test. Have them say why.
It won’t stop all the nuts, no. The survivalists and paranoids and “patriots” will smuggle ammo, buy it from criminals on the black market, even manufacture their own cartridges in secret factories. It will be far from perfect. But it will make it significantly harder for a disturbed person to tool up the moment they feel a delusion coming on.
We will not go hungry for irony today. Many people have reposted this picture (©DC Comics without permission, but I don’t think they’ll object), reminding us that a central pillar of Batman’s character was that he considered guns to be intrinsically evil. When they are used by unbalanced individuals to massacre helpless, trapped people – and used that way over and over and over again – you can see his point.
But what can be done? US gun control is an intractable situation for two reasons:
- People want to have guns.
- They have guns.
A classic example of a problem that, by the time you realise it is a problem, has already gone too far to do very much about. Armed people are defensive people. Indeed, paranoid people. Why wouldn’t they be? Everybody’s got a gun.
To justify their weapons, owners must fantasize that they need them to defend against government tyranny. (Masturbation optional.) Any attempt to control the proliferation of firearms therefore is presented as evidence of that very tyranny.
To sum up an entire worldview in one sentence: They need guns to prevent the government taking their guns.
How did it happen? We tend to blame the‘s enshrined , but that’s really a red herring. Plenty other countries considered gun ownership a right without it leading to this. America’s peculiar gun culture has its roots in the middle of the 19th Century. Before that, firearms were not considered a social problem because only the ruling classes could afford them. Mass production began to bring down the cost, but in most countries there wasn’t the demand. Why would most law-abiding people need a gun? The US though was unique in that it combined the industrial revolution with a frontier society. Demand was higher, prices lower. Guns became a mass-market commodity.
This is the reason why the United States ended up an armed camp. Not any sacred passage in the US Constitution designed to prevent government oppression, not ideals or the pursuit of liberty. Market forces. Guns were cheap.
Ask yourself though, what level of unemployment assistance would be low enough for the IMF? Just one euro a day would be sufficient inducement to stay at home, if the job market was also only offering one euro.
And right now the job market is offering most people precisely no euro at all, because there are no jobs for them. To those, even a zero level of dole payment would still act as a disincentive.
To follow the IMF’s logic to its conclusion therefore, we need to fine people for not working.
It is orthodox nonsense of course. All lowering welfare can do is make more people desperate for work, so increasing the labour supply. It doesn’t magically create jobs. If viable employment just appeared because people wanted it badly enough we wouldn’t have a lot of famines in the world, would we? The only thing lower welfare can magically create is poverty, and poverty in turn increases despair, dissent, conflict and crime.
I don’t know if you’ve noticed, IMF, but we have already lowered the social welfare rates. Several times. Did it lead to an increase in jobs? No. Funnily enough, the number of unemployed actually rose.
Oddly, the proposal which seemed to get all the media attention is the idea that means-testing might be introduced for child benefit. I think I see why. We have come to expect that the poor will routinely be taken outside and kicked bloody at every budget. Means-testing child benefit though, that could hit middle class people. Controversial!
(Though I noticed that Radio 1 immediately hosted an argument about whether we need child benefit at all. “Why should I pay to bring up someone else’s children?” etc. RTÉ once again failing to distinguish between socially useful public debate and the entertainment value of terrible people shouting at each other. There is really not that big a step between Liveline and the Jeremy Kyle Show.)
Well, should families who don’t actually need child benefit still get it? It seems illogical on the face of it, but there are some good, idealistic reasons behind the payment. One is that a mother, especially of young children, usually doesn’t have much income she has real control over – and that can be true in rich homes as well as poor. This makes her hugely vulnerable, her children effectively hostage to whoever holds the purse strings. The children’s allowance makes here less dependent on her husband or other family members, less vulnerable to bullying and manipulation. It seems like a good thing to me.
Now we may ask is it any business of society to intervene in that way. And in these days of ascendant right-wing selfishness, I am sure there will be plenty willing to debate it. But you know what? That’s our debate. I don’t let the bank tell me what Christmas presents to buy or what food to eat, even if I’m buying them with money they lent me. They can dictate the interest rate and the repayment schedule, but not my values.
IMF, if you want a role in formulating social policy then stand for bloody election. Otherwise, butt out.
- Irish dole and welfare payments are too high, warns IMF (independent.ie)
- IMF calls for Social welfare reform (newstalk.ie)
Speaking of whimsical, here’s a little kiosk in a city centre park where we bought coffee.
And this… Well this goes beyond whimsy into the nightmarishly strange. In the background here, Helsinki cathedral. In the foreground, something I bought in its gift shop. Emo ice cream. A Gothic lolly.
This is licorice flavoured. Salty Nordic licorice flavoured. NO ICE CREAM SHOULD TASTE OF SALTY LICORICE! It was the most nausea-inducing thing I actually managed to eat since I had sea urchin in an all-you-can-eat Las Vegas sushi bar.
Oh yeah – and inside it’s grey. ASH GREY.
Excuse me a minute.