Archive for July, 2012
Down With The Bastards. Except Our Bastard
Posted by Richard Chapman in Politics on July 31st 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.
Related articles
- 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)
The Great Goat Bubble
Posted by Richard Chapman in Cosmography, Politics on July 30th 2012
I’ve previously mentioned The Great Hargeisa Goat Bubble by my multi-talented friend Julian Gough, how it was a chapter of the novel Jude In London, the first short story ever published in the Financial Times, and a BBC radio play.
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.
Related articles
- 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)
This – This – Will Fix The Economy
Posted by Richard Chapman in Humour, Politics on July 25th 2012
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?”
Complete This Sentence
Posted by Richard Chapman in Humour, Politics on July 24th 2012
Ooh! Ooh! We got our report card! The IMF has checked out what we’re doing with all the money they lent us. Let’s start with a choice quote:
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.
Allegedly.
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.
Related articles
Unbearable Arms
Posted by Richard Chapman in Politics on July 21st 2012
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 US Constitution‘s enshrined right to bear arms, 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.
How About A Meanness Test?
Posted by Richard Chapman in Politics on July 20th 2012
The IMF has some helpful suggestions about how we might meet our loan repayments. To sum up: Make the poor poorer. Social welfare rates that are “too high” are a disincentive to work, apparently.
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.
Related articles
- Irish dole and welfare payments are too high, warns IMF (independent.ie)
- IMF calls for Social welfare reform (newstalk.ie)
Weird Helsinki, In Pictures
Posted by Richard Chapman in Cosmography on July 19th 2012
Here’s one of my favourite photographs I’ve taken in Helsinki. A rather whimsical entrance tunnel to the Rautatientori (central station) metro. Note the ‘cave paintings’.
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.














