10.19.08
Posted in Domestic/Relationships, Irish Politics, Sunday Times Columns at 9:14 pm by Sarah
Announcement: My column in The Sunday Times is concluding this week! I start in The Irish Times this Wednesday (22nd). For the moment they are cool with me publishing the columns on the blog, so though I am posting very rarely I’ll still be checking in on at least a weekly basis. I am delighted to be joining the IT. I suppose this does mean I’m officially part of the establishment, but as soon as I start sounding like it, I hope you lot will slap me around the place. It also means that as part of a daily paper I’ll have more flexibility on column topics, so its exciting times ahead. The next phase begins……
Perhaps my inner masochist is revealing itself, but I rather enjoyed the budget speech. What about the call for patriotism at the end? I actually cheered. What a smashing way to end the lashing. Yes, Minister! That’s what we’ve been missing all these years. With a mediocre soccer team and a losing streak in the Eurovision, patriotism has been sadly lacking. If hard times are what we need to bind us together then so be it. We can take the pain! I don’t mind cutbacks. Just tell me how this humble housewife can do her part to save the country.
What can I say? I was reared in the 80’s and it left a lasting impression. I never quite managed to develop a sense of entitlement. I bought the clothes, the shoes and the facials. I ate out a lot and paid other people to look after my children. But always with the uneasy feeling that someone would phone up and say “ There’s been a mistake and we’ve just discovered you’ve been using the guest towels. Here – use this old sack instead”.
Now that I’ve finally been caught out, it’s all quite a relief and I rather relish the prospect of a Blitz Spirit. So Minister, I’m in.
The problem is that there appears to be some confusion as to how the housewives of Ireland should act best for the sake of the country. The government needs unity on this issue, so Brian Lenihan needs to have a quick chat with the Greens, especially Trevor Sargeant. A couple of weeks ago Sargeant said that we belong to a useless generation. Actually he said, “We probably are the most useless generation ever to have strode the face of the earth”. This is “because of many people’s inability to do practical tasks such as mending a broken tyre.”
I blushed reading it because the bicycle bought in a rush of environmental consciousness and enthusiasm for physical fitness is out in the shed with a flat tyre. I could mend a puncture easily when I was ten, but I’m not sure how to go about it now. Could it really involve a basin of water and old spoons? I dropped into our local garage and hopefully asked the mechanics if they’d have a crack it but they looked at me as if I was bonkers. I’m not mad; I’ve simply become accustomed to outsourcing certain tasks.
Sargeant says I must change my ways and he urged us “to adopt a World War two-lifestyle and approach to consumption in the current climate”. On the one hand, that approach appeals to me. I took up the hems on my son’s schools trousers myself. I’ve got a kitchen garden going and hens are my next purchase. I don’t mind having a crack at painting the kitchen myself. Didn’t I paint my own bedroom several times when I was a teenager? The problem is that if I DIM (Do It Myself) I may be responsible for bringing the economy crashing down.
When I discussed the issue with UCD Economist Moore McDowell on The Last Word recently, he warned of the grave threat posed to the economy if we all followed Sargeant’s advice. Capitalism appears to have outlasted communism by about twenty years. This relative success is due to the theory of comparative advantage and specialisation, first proposed by Adam Smith in The Wealth of Nations. The theory and practice of Comparative Advantage is that people and countries should identify what they’re good at, what earns them most money and then stick to it. They should specialise in those products and buy from others what goods or services they decide to abandon. The idea is that everyone will make more money at the end of the proverbial day. When a country decides what product they’ll trade, they need to take into account issues like opportunity cost – the cost of choosing one thing over another.
If you’re a Senior Counsel with a kitchen that needs painting, you could take the day off work to do it. But you could have earned ten grand down at the Four Courts whereas you could pay a painter a couple of hundred euro to do the kitchen. Not only does it pay you to pay someone else to do the job, but you’re boosting the economy by spreading your money around. Now the painter can buy stuff and the money trickles down the line making us all richer.
The opportunity cost for women is particularly high. When I was sitting at home congratulating myself as I sewed – badly – the hem on my son’s trousers, I would literally have been better employed paying someone else to do that job, while I scribbled out a column.
The bottom line is that Trevor Sargeant is both perfectly right and fundamentally wrong. We are a useless generation. We outsource basic jobs so frequently that certain skills once common will become increasingly scarce.
However by doing so we are actually helping the economy. Consumption might be our spiritual downfall but also our economic salvation. This is why Lenihan needs to tell Sargeant to zip it and make sure that us citizens don’t get confused by his budget message. The government needs to make cutbacks, but it’s vital that households don’t. If the country is to have a chance, the outsourcing must go on. Cleaning, decorating, repairing and baking are all tasks that came naturally to the 1950’s housewife. But we were poor and miserable in the 1950’s. If we don’t want to be poor again, the bad housewife can be the country’s great hope.
This might seem counterintuitive and you’re probably still in a post-Budget anger phase visualising all the cutbacks you’ll make around the house this winter. Stop and look at it this way. The budget wasn’t so bad at all.
For the past ten years the government flung money indiscriminately at people who could do without it. SSIA interest, automatic under-6’s child benefit bonus, over-70’s medical cards and inequitable tax allowances for high earners were all handed over as populist election winners. The money was crudely distributed and is being more crudely recouped, but I can’t help feeling it’s a case of easy come; easy go. What Fianna Fail giveth, Fianna Fail taketh away.
The trick to our future is to get over the snatching back of what we never should have gotten in the first place. Some people are poor, but if you’re reading this paper, I’d bet that you’re not. However, if you start acting poor then we’re really done for. The Blitz Spirit is all very well, but ultimately streets were bombed into rubble. If we don’t want to see our economy reduced to rubble, then we need to keep spending. Useless citizens of Ireland unite. Your economy needs you.
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Posted in Irish Politics, Sunday Times Columns at 9:01 pm by Sarah
n 1999 Jim Mitchell was chairman of the Public Accounts Committee when it conducted an important and uncommonly efficient inquiry into the wholesale avoidance of Deposit Interest Retention Tax (Dirt) by Irish banks.
For years, half the country were stashing their savings in deposit accounts that were supposedly “non-resident” and therefore exempt from tax on the interest. Senior banking and revenue executives were summoned by the committee to explain why they allowed this fiction to continue, at an eventual cost of €100m to the state.
The hearings were broadcast on TG4 and on the internet. It was a cheap, fast inquiry and was followed by a speedy, hard-hitting report. Nobody ever dreamt that Irish parliamentarians could be this efficient.
One day, in the middle of a side meeting, Mitchell received a phone call. He turned his back on his colleagues as he spoke briefly with his doctor. It was bad news. His cancer was back and, because a number of his siblings had died from the same disease, they both knew his chances of beating it were non-existent. He’d received a death sentence. Mitchell didn’t flinch, hung up, and returned immediately to his work. His colleagues had no idea what had just happened. It was brave, selfless and an act of heroism: public service over private troubles.
I couldn’t help thinking of him after I’d flung the Sunday Independent across the room last Sunday morning. Eoghan Harris, appointed to the Seanad by Bertie Ahern, informed us that senator Jim Walsh, the government whip, had called him in west Cork to wish him well and assure him his vote wasn’t needed to get the banks’ bailout bill passed in the upper house. Harris declared himself “glad to be able to avoid the cabin fever around Leinster House”. He decided to go for a walk instead.
Senator, I am sorry you are ill and I wish you well, too. But you are writing newspaper columns about long walks, hearty meals and the pleasures of staying up all night to watch the American presidential election debates. You are not supposed to be “glad” you don’t have to show up when the most important piece of legislation in decades is being debated. Your opinions on the American elections may be fascinating, but as a highly paid legislator, your opinions on the bailout should be on the record of the Seanad and not in a newspaper.
If your absence is truly unavoidable due to illness, an expression of regret rather than relief would be appropriate.
One week earlier Anne Harris complained in the same newspaper that Fine Gael’s decision to deny voting pairs to government TDs, as a protest against the taoiseach’s refusal to hold a full debate on the economy, was “hysterical” and “playing politics”. Why is it war on presenteeism from the Sunday Independent? What do they want — TDs and senators to text in their votes as if they were watching a reality TV show?
We pay our public representatives pretty well. Have our expectations sunk so low that even showing up is asking too much?
Fortunately, the taoiseach is taking the matter more seriously and gave Kerry North TD Tom McEllistrim and Donegal North East’s Jim McDaid a dressing-down in front of their colleagues over their absence from the same debate. Rightly so. McEllistrim had been canvassing in his constituency. I’ve no idea what McDaid’s excuse was.
I’m still shaking my head at the antics of Fine Gael’s James Bannon. He failed to show for the Dail’s opening week because he forgot the holidays were over. He forgot? So what is the penalty? A fine? Standing in the corner of the Dail with a dunce’s cap on?
Usually, politics is an irrelevant side-show where politicians, no matter how sincere or hardworking, make little difference. But in the past fortnight, politics was back in the spotlight and democracies around the world needed politicians to step up, rather than back, from the crisis we face. We don’t need politicians when everything is going well. When everything goes wrong, as it has now, turning up is a minimum requirement.
I think Fine Gael’s refusal to provide pairs unless absolutely necessary was the right move. For one glorious week we had an opposition. I’m only sorry they implemented the harsh regime for such a brief time. I’d prefer if Ahern stopped swanning around New York and got into the Dail to give us the benefit of his 10 years’ experience as taoiseach. Frustratingly, though, Fine Gael insists on being gentlemanly and points out that it’s traditional for former taoisigh to get a free pass from the Dail.
Oh, come on. Ahern showed up to pay tribute to Seamus Brennan last week, but was not around for the vote on the bailout. These are not priorities that comfort frightened citizens. Brennan was a good man and deserves tributes, but we deserve the contribution of a former taoiseach to a debate on the bailout. He’s the one who told us last year that people who made gloomy forecasts on the economy should commit suicide. I am extremely interested in his reflections on the current crisis.
Maybe I’m wrong. Maybe the likes of McEllistrim are right. Consider again Jim Mitchell. What was his reward for putting dying aside while he worked late nights and weekends on the committee? He lost his seat in the next general election, in June 2002, and was dead by December. Who’d have blamed him if he’d decided not to run? Due to constituency boundary changes, he knew his chances of being elected were poor but Fine Gael was desperate for candidates and he agreed to run.
Maybe McEllistrim knows too well that many voters couldn’t care less what happens in Leinster House. Perhaps he was smart to stay in Kerry minding his seat rather than making a pointless contribution to a debate in the Dail. But what is he minding his seat for? Hand shaking door-to-door was supposed to be the means, but apparently has become the end too.
So maybe the results of Dail and Seanad votes are foregone conclusions. Maybe the standard of Oireachtas debate isn’t exactly soaring. And yes, I know it’s frustrating to move amendments that will inevitably be voted down by the government. But so what? That’s the system. The alternative is to count up the votes on each side after an election and send every TD, bar the cabinet, home to write letters about potholes.
Otherwise, Dail votes are mere symbolism and parliamentary debates are a game of charades. What about bearing witness, asking questions and demanding accountability? Say it ain’t so, Eoghan; say it ain’t so.
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10.07.08
Posted in Irish Politics, Sunday Times Columns at 9:18 pm by Sarah
I used to play poker. Sometimes you weren’t quite sure if you had the winning hand, but you’d go “all-in” and hope your opponent couldn’t see your heart leaping in your chest. Win or lose, it was quite a rush. Last week Brian Lenihan went all-in and our hearts are still thumping as we wait to see how the finance minister’s hand plays out. It’s terrifying and thrilling and I have a headache from trying to figure it all out.
There are bright sides: the arguments over Grey’s Anatomy versus Champions League have ended in our house. We’re watching one show — the news. Every night brings a fresh twist on the credit crunch: the outrage in Brussels over our guarantee to the banks, the mind-boggling “nouveau Europhilia” at Downing Street. My pre-packaged opinions are useless. There is only one line to which I cling, and it comes from a New York broker: “Anyone who thinks they know what’s going to happen next is deluding themselves.”
Last week I wrote that we shouldn’t trust Lenihan. This week it appears we have no choice. There are still plenty of reasons not to trust him. This is Fianna Fail we’re talking about, so builders and bankers get first dibs on the lifeboats. The taxpayers are the mugs in steerage who’ll be left clinging to driftwood. On the other hand, he is a Lenihan. His clan is full of desperately decent people, if unfortunately misguided on the subject of loyalty. All we can do is pray that, this time, the legendary fealty of the Lenihans will be directed towards us and not Fianna Fail.
Of course it would be better if it wasn’t up to prayer. It would also be more reassuring to have a section in the Credit Institutions (Financial Support) Bill 2008 stating that the banks’ chief executives will get 40 lashes for every ¤100m of state guarantees.
Lenihan says he will ensure there is oversight and accountability, but insisted that the Dail give him a free hand. You know what we’ve done? We’ve given him what Congress refused to give Hank Paulson — unlimited authority.
When Congress said no to Paulson, I recalled Conor Lenihan telling me that his father once observed it was a shame that history often fails to credit the great decisions to do nothing. Sometimes, doing nothing is the right option. Is this one of those times? Should we have let the “scum” (as Paul Gogarty, a Green TD, called them) go down? They tell us we can’t because as The Brother said when news of the bailout broke: “The banks have us by the short and curlies.” On the other hand, The Uncle arrived for coffee grinning from ear to ear: “Isn’t it great? We have them by the short and curlies.” They’re both right. The banks have us over a barrel and we have to bail them out, but this is also a chance for, if not revolution, then at least reform.
We’re all in shock at each new development, but we need to snap out of it.
If we don’t seize the initiative, the creeps will pull us deeper into the mire and we’ll be paying for it for another 10 years.
The author Naomi Klein calls it The Shock Doctrine. Every now and then a country faces a calamity, either a natural disaster like Hurricane Katrina; a terrorist attack like 9/11; or a financial shock such as the one we’re experiencing now.
While the public reels and tries to absorb the shock, the establishment is ready. It smashes the “Break in Case of Emergency” glass and pulls out pre-prepared policies which the public accepts because it is too busy trying to save itself.
In New Orleans, poor black communities fled their homes after Katrina and they are now being rebuilt as condominiums for the rich. In Washington, the Patriot Act was rushed into legislation after 9/11 and it introduced the corporatisation of national security. Every disaster in our health service strengthens the case for Mary Harney to build private hospitals on public sites. Every crisis is really just another opportunity for the right wing to protect the super-rich at the expense of the permanent poor.
So now, with people terrified that we’re about to go back to 1983, the bankers who over-leveraged their debt are seizing not just the public’s money but the state’s entire reputation, just to protect and advance themselves. We’re witnessing the wholesale dumping of private debt onto the public purse. The smug millionaires who extolled the purity of the market are exposed as being wholly without ideology. Government intervention, so long despised as an unnecessary and outrageous constraint on the wisdom of the glorious market, is co-opted as the new tactic in the pursuit of profit. Klein calls it Disaster Capitalism.
Only a disaster could allow a bill to be put through the Dail in the middle of the night which gives one minister, Brian Lenihan, extraordinary power to guarantee our banks to the tune of hundreds of billions and get absolutely nothing in return. The banks could literally take the money and run, and where would we be left then? With an enormous deficit and public services slashed for the next decade.
In the meantime, we want desperately to believe in strong leadership. It could be the making of Lenihan.
Here is the lesson for us: the banks knew what they wanted and they got it. We must get over our shock and do the same. The public has to be just as clear in its demands. There must be no equivocation on executive pay; any bank that avails itself of the guarantee should be banned from rewarding its reckless CEOs with bonuses. Their wages must be slashed before bank charges are increased. We must have government representation on risk-management committees so the banks can’t dupe us out of more money.
Since it was Lenihan to whom the Dail handed all this power, the finance minister must be the one who has to stand up to the CEOs. As the saying goes, he’s only as strong as the backbone we give him. We’re now far too middle-class to march on the Dail and demand our pound of flesh, but we do have phones, e-mail and pens. We need to remind him that the interests of Fianna Fail and the nation, so often confused, are not the same thing after all.
Lenihan’s hand was forced last week by the banks and now it behoves us to do the forcing. He’s gone all-in — with our money. If we allow him to let the banks continue to get away with their behaviour, we deserve everything that’s coming. Act now, for last week was only the beginning. My heart is thumping. How about yours?
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06.13.08
Posted in Domestic/Relationships, Irish Politics at 3:00 pm by Sarah
Wow..well there ya go. Looks like a No.
Well done to the No campaigners, they were good. They had great posters and a consistent message. The Yes was continually on the defence and had to explain why the No’s were wrong. They never gave a positive vision of Europe.
Now, I can just see the Irish Times tomorrow, blaming Enda Kenny for the whole thing.
Let’s just get it straight.
Fianna Fail spent 6 weeks saying goodbye to Bertie Ahern and two weeks getting pissed to welcome in Brian Cowen. When the hangover passed they suddenly remembered there was a referendum going on and Declan Ganley was a household name. (Though I still exclude Dick Roche from this). Waking up on the last weekend before polling day wasn’t enough. Meanwhile Enda Kenny had worn himself out going up to and down the country to public meetings while Cowen was singing drunken ballads in Clara.
Enda, take pleasure in the fact that you are not Taoiseach. Rent a house in France or Italy and take six weeks off. I know this is bad for the country, but there’s nothing you can do about it. Relax and come back in September refreshed and ready to take on Cowen in the Dail. We’ve already seen how easily he loses it. So it’ll be great fun.
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06.08.08
Posted in Domestic/Relationships, Irish Politics at 8:41 pm by Sarah
I took part in Seven Days today, the BBC Radio Ulster show which was being broadcast from Dublin today – a special on the Lisbon Treaty. (It’s the awful BBC iplayer though!)
Pat Carey, FF Government Whip (no relation) and John McGuirk from Libertas were on too. I thoroughly enjoyed the debate. I went gung ho in favour of the treaty and with Pat Carey also pro-Treaty I thought John McGuirk did a great job fending us off. He was also funny when we started to get teary eyed over the prospect of President Obama.
On the way to the Buswell’s I listened to the Marian Finucane show on RTE and what fun they had! Dermot Ahern was passionate! and got stuck into Eamon Dunphy, who considered getting morally outraged, though Gemma Hussey put manners on him (“Oh come off it Eamon”). Well worth listening back to. Also worth listening to was that Petrol Resources fellow, David whathisname. He explained why oil prices spiked last week and what the future might hold. It was most interesting.
I am off to the US in the morning and sadly leaving the debate behind me.
I really hope this treaty is passed. Europe has done great things for us, but an EU of 27 needs to work better and faster. Dermot Ahern gave a great example on RTE about how the current procedures prevented EU forces from entering Chad for months after the decision had been taken to intervene. People complain that we are ceding sovereignty to Brussels. Bring it on I say. Whether its equality issues, competition ones, the environment or trade, the EU beats up our government to introduce progress and positive change.
Look at it like this:
In favour, FF, FG, Labour, The Greens, IBEC, ICTU, the IFA, and good old Suds.
Against: Sinn Fein, Joe Higgins ( I love you Joe but you’re wrong on this one), nutter far right conservatives.
C’mon!!!!! Do the right thing!
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06.05.08
Posted in Irish Politics at 12:39 pm by Sarah
I cannot help but be moved and excited by his candidacy. Clinton would be a great VP but a volatile one. She would have to be extremely disciplined. McCain looks and sounds creepier each day that passes. I think its time to root out the rosary beads.
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05.26.08
Posted in Domestic/Relationships, Irish Politics at 11:11 am by Sarah
LAST Monday night found me in the Ardboyne Hotel in Navan with a bunch of farmers, educating myself about the World Trade Organisation. Unsurprisingly, out of the 100 or so present there was just one lady farmer, and a total of four women in the room. The farmerette, me, MEP Mairead McGuinness and her political and logistical supporter Emer Smith-Duff.
McGuinness would be getting up at 4.30am to be in Strasbourg by 10am in order to table amendments to a food prices bill. Smith-Duff’s job is to get her out of the meeting before 10.30pm so she can get some sleep. But there’s no sign of tiredness when McGuinness takes the floor. She stays on her feet for 90 minutes, telling us about a recent trip to Brazil, the Lisbon Treaty and the WTO talks. Usually at these meetings people shift around in their seats, yawn, and check their watches. Tonight they are fully engaged as the Fine Gael MEP takes questions and explains both the big picture and the minute detail of how geo-political negotiations, consumer concerns, bureaucratic systems and national politics are colliding to dictate the future of the people in the room. I’d decided to find out about the WTO talks because I kept hearing farmers moaning that Peter Mandelson, the UK commissioner who is negotiating for the EU, is selling them out. Others are complaining that this is just the farmers moaning as usual.
The farmers say that Mandelson wants to agree to tariff reductions and increased importation of South American beef. This would effectively ruin Irish beef farming. The free-market libertarians say that Irish farmers shouldn’t get subsidies to produce beef in the first place. If Brazil or any other country can send us beef for half the price, so be it. Who cares if the beast is Irish, Brazilian or Australian? We live in a globalised world and if farmers can’t make money from their enterprise, tough. I’d a fair idea this argument was flawed, but I wanted to know precisely why.
The WTO sets the rules for trade between countries. The current phase of negotiations is called “the Doha round” after the city in Qatar where they started. They’re also referred to as “the development round”, as everyone agrees the rules have to change to help developing countries.
Most farm subsidies have now been “decoupled”, which means that farmers get their cheques in the post from Brussels no matter what they produce. This was done to reform the crazy system whereby farmers produced more and more just to earn bigger cheques, as a result of which the infamous food mountains and wine lakes were created.
While the reforms were correct, a problem arose with the collapse of the suckler herd, or cattle nursery, and beef supplies were endangered. Why go to the trouble of producing calves if you’re getting paid anyway? Since we need meat, a special subsidy was reintroduced for calves in order to encourage production.
One point on which I’m satisfied, having listened to McGuinness, is that the Lisbon Treaty is completely independent of the WTO talks. Whether the treaty is passed in next month’s referendum or not, the talks will go on.
There are many technical issues associated with the Doha round but you could boil it down to this question: should Irish farmers compete without subsidies against Brazilian beef?
McGuinness described the awesome scale of the cattle farms she saw in Brazil. She couldn’t help but be impressed at the way in which modern-day cowboys round up thousands of cattle on the massive ranches in the Amazon basin. The scale isn’t just romantic – it makes beef production cheap.
The MEP was also shown Brazilian beef-processing factories and observed the flip side of the industry. Tagged and untagged cattle mix together in a system that has little regard for the health and safety procedures that Irish farmers are required to follow. If cattle aren’t tagged, no-one will know where they’ve come from. Irish consumers are used to what is called “farm to fork” traceability. Every steak you eat can be traced, not just to a meat factory but to a farm and all the way back to Daisy, the cow that provided it.
So if Daisy turned out to be a mad cow, we can find out with whom she mixed and destroy her possibly infected herd. Similarly if it’s discovered that Daisy’s owner fed her angel dust or illegal medication, that practice can be traced and stamped out.
Implementing this traceable system is cumbersome and expensive for the Irish farmer. Those who call for free competition don’t understand that EU regulations render it impossible for them to compete effectively with the Brazilians, who are not so encumbered. Your zebu steak might be cheap and taste fine, but it’s not traceable. So what? Well, wait until the next outbreak of disease, and then you’ll care and probably complain bitterly that stupid officials let cheap, poor-quality food onto your plate.
The other issue of food security is even more important. Let’s imagine that subsidies are removed, tariffs reduced, and Brazil is allowed to import unlimited beef into the European Union. As it’s so much cheaper due to their economies of scale, the free market will win and Irish farmers will reduce production and turn to something else. Then suppose there’s an outbreak of foot and mouth, or China does a deal with Brazil to buy all their beef. Suddenly there’s a massive shortage of beef in Europe. Beef is not like oil. You can’t turn the tap on and off at the whim of a Saudi prince. Cattle are killed when they are two or three years old. It could take up to five years to crank up production again, and in the meantime prices would soar. The free market libertarians won’t be so popular when a pound of mince costs €15.
Subsidies can create disasters, as the policy of subsidising the conversion of grain into bio-ethanol instead of flour has demonstrated. Bread prices are increasing and millions in the developing world will starve this year due to soaring prices. But subsidies also ensure stability and a secure line of production.
The “cheque in the post” is an unnecessarily pejorative and simplistic way of describing the system that keeps good-quality, relatively cheap food on your plate. Like everything else, you won’t notice until it’s gone. Then you’ll be moaning along with the farmers.
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05.20.08
Posted in Irish Politics at 9:01 pm by Sarah
This is the column from two weeks ago but it sooo unoriginal I didn’t post it for shame. For the record though it should go up…
The Anglo-Celt reported on a meeting of the Kilnaleck Debating Society last week. One member asked for an explanation of the sub-prime crisis. He was told it was when banks lent money to people who had never repaid a loan in their lives. The meeting of this informal group which alternately masquerades as the Kilnaleck Philosophical Society took place in Brady’s Bar on the Main Street of the Cavan town. The newspaper account added that the barman offered his view. “It’s like me loaning €1000 to the local alcoholic who last week couldn’t pay for a pint and a packet of fags”.
If only the world’s bankers had the same sense as the humble barman in Kilnaleck. I should declare that the sage behind the bar and the reporter for the Anglo-Celt are one and the same: my Uncle, Peter Brady, a former Cavan Man of the Year no less. But you don’t need to be a person of such high standing to get the point. Terms we never heard of a year ago, like “sub-prime” and “credit crunch” have created a global financial storm.
The mess is not the result of a natural disaster, a mysterious economic bubble that burst or the fall-out from terrorism. It’s solely due to bankers behaving pretty stupidly. Some lent money to high risk borrowers and others rolled all the bad loans together, insured the risk and sold it up the money chain to other bankers. The bad debts were gradually transformed into A-rated financial instruments which were absorbed into pension funds. Have you checked the value of your pension fund recently? I sincerely hope you are not retiring this year.
The bonuses and dividends earned by all this activity paid for a lot of yachts and condos in the past ten years. Now we’re paying as the banks levy charges on their customers and increase mortgage interest rates.
Just last week, AIB increased the surcharge it imposes on people who overdraw their current accounts without permission. I’m not an AIB customer but you could say I have a flexible attitude towards my overdraft, so I can sympathise with those similarly afflicted. Someone with an unauthorised overdraft will end up paying 27.9pc in interest on the money they overdraw without approval. It’s not quite a pound of flesh, but Shylock wouldn’t be out of place on the board of AIB.
Still, if the bank is reduced to penalising its customers so onerously, you’d think they must be in trouble. Last year the AIB had revenues of €4.87 billion up 12% from €4.33 billion the previous year, despite the ‘adverse changes in worldwide banking’ referred to in its annual report. From these revenues they earned a pre-tax profit of €2.5 billion for 2007. That was down 4% on 2006. Oh dear, tough times.
The Bank of Ireland is having a torrid time too. In the year ending March 2008 it is believed they only earned €1.77 billion down from €1.95 billion in the previous year. If you’re a BoI customer you’d better watch out. With such disastrous results, they’ll be forced to charge you a vital organ if you miss a car loan repayment.
So what’s new? Banks like maximising profits. The problem is the effect their practices have on the entire economy in good times and bad. During the property boom, house prices escalated out of all control. Buyers blamed everyone from auctioneers to the government but neither auctioneers nor politicians set house prices. The price of a house is entirely dependent on the amount of capital available to the purchaser. If the bank is willing to provide more capital to anyone who wants it, then house prices will keep rising. And so they did.
The government was happy enough since they earned significant income from VAT and Stamp Duty. Occasionally they’d come under pressure to act to control prices but they claimed they were helpless as they had lost control over interest rates to the European Central Bank.
While the government was busy blaming “Europe”, banks and building societies carried on and without any apparent regulation introduced the 100% mortgage and the 40 year loan. No wonder house prices increased.
But in the past few weeks something odd has been happening. Although ECB rates have held firm at 4% since last June, Irish lenders have been quietly increasing your mortgage rates. What happened to Europe’s influence? Turns out lenders can increase rates anytime they want. This paper reported last week how some banks are even altering the terms of popular “tracker” mortgages. These products guarantee that your interest rate won’t increase unless the ECB rate does.
With the credit crunch in full swing, lenders have decided to dump the ECB linked product. Permanent TSB : the biggest lender in the country and IIB Homeloans have started the ball rolling by changing the terms of tracker loans.
More important than the ECB is the rate at which banks lend money to each other: the Euribor. Since banks consider each other a risk these days that rate has increased. That’s why when the ECB is holding steady and there are even predictions of a cut later in the year your mortgage is increasing. “Europe” can do what it wants and the lenders will carry on maximising their revenue from their borrowers.
When I asked one expert why the government and banks didn’t act together to increase rates during the property boom he said that would have been collusion which is illegal. When lenders act in unison to reduce rates its called competition. When they copied each other and increased them in recent weeks, that was an industry response to the global lending environment. In other words it’s fair and legal if the end result suits them. It’s only illegal if the result suits the national interest.
It’s hardly shocking that banks behave like this. But that’s why we have regulation. It’s the government’s job to make them behave in order to protect individuals and the economy as a whole. They could control the amount of money they lend customers through enforced income stress tests. They could also ask them not to leave laptops with detailed personal information about their customers lying around.
Domestically and internationally, there has been a collective failure of regulation with severe consequences. From sparking a global recession or allowing dictators to keep their billions in Swiss banks, banks do great wrong while governments stand back : until the crisis occurs and taxpayer funds are need to save the Northern Rocks. As Michael Glos, Germany’s Economy Minister put it last month
“It really is quite strange when those who tend to describe too much state intervention as the basic evil of the social market economy start calling for the state to act,” he said. “Privatising profits and nationalising losses — that’s not on.”
Unfortunately for Glos and for taxpayers and banking customers around the world, it is very much on.
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03.31.08
Posted in Irish Politics at 3:08 pm by Sarah
I turn down a lot of radio and tv stuff these days: I am just too busy and distracted. But there are some programmes I’m always happy to do including Spirit Moves on RTE Radio 1. This one hour long show gives contributors a chance to discuss issues in a reasonable fashion and without pigeon holing the guests.
Yesterday’s show was about religious involvement in primary schools and there was a great panel – David Quinn, the Indo columnist and Iona Institute director, Bishop Leo O’Reilly, John Carr, head of the INTO and Paul Roe, head of Educate Together.
We agreed that RC domination of primary education will begin to ease as new State Primary VEC/Community schools will be built. We also agreed that this will see the emergence of a two-tier system – the “good” catholic national primary schools and the lesser state VEC schools – just as the “tech’s” were seen as the poor relation (and therefore had to take the poorer student at secondary level).
We also agreed that the church won’t walk away from their existing schools. There’ll be no question of a handover.
Finally we agreed (there was a lot of agreement!) that the teaching of religion in the new community “multi-faith” schools is practically very difficult since all the teacher training colleges are denominational! We speculated that the system might operate along the line envisaged by the then Chief Secretary Stanley, who in 1831 set up the Board of Education. He planned that the schools would be secular and that religious teaching would be done at specified times by local clergy so that students could be separated at that stage. By the 1880′s the clergy on both sides had defeated him and set up their own denominational schools.
However, towards the end of the show I asked Bishop O’Reilly why he put up with parents who clearly had no interest in religion but showed up for the first communion just for the day out. “Would you not run them?” I asked.
He replied “Well I wouldn’t be as judgmental as that”.
Driving home later I was laughing to myself: ‘Gee, a bishop not being judgmental! Now there’s a turnaround. Sure, what’s religion without a bit of judgement? Isn’t that the whole point?”
But by this morning I had turned around. Here’s the thing: he genuinely meant it. He didn’t judge people. And our local priest who has every right to run me when I show up needing things signed or being a tourist at mass, despite my publicly proclaimed atheism honestly doesn’t judge either. I think they really believe in keeping the door open. Let everyone come in on their own terms and take whatever they want home. The most malevolent interpretation you could make is that they are arrogant because they have the kids so they don’t have to worry about the adults (the McDonalds approach). You could also claim that they know adults are like teenagers, they know we’ll have our little rebellions but we’ll all go through their doors at the end.
With the monopoly on schools and funerals, they hold all the aces.
But my real feeling is that O’Reilly, and our local men here, honestly don’t see it in those terms. I think they are happy to make themselves, and their services, available to anyone that wants them however selectively. I also know that if someone in this house dropped dead tomorrow I could call our local PP and he’d be up here straight away to offer practical help and words of comfort. No questions asked. Like Cromwell said, God will sort us out in the end 
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03.25.08
Posted in Domestic/Relationships, Irish Politics at 9:40 am by Sarah
(Sunday’s column: this is the unedited copy – so a teency bit more ranty than that which appeared in de paper).
There are 33 million refugees across the planet. To hear some people talk, you’d think every last one of them would arrive in Dublin Airport tomorrow unless those two gardai at passport control keep their wits about them. We can relax. When people flee war, famine and systematic rape they usually run to another neighbouring poor country. If they are just hungry, as opposed to victims of violence, they’ll seek work in, yes, another neighbouring poor country. The world’s 80 million South to South migrants, as they are called, take the lowest, dirtiest jobs going in developing countries with a contiguous border to their own and send home whatever money they can to keep their family from starvation. They’d probably like to move to Ireland, but they there’s no way they can afford to. They’ve probably never even heard of Ireland.
So, yippee, we’re safe from the hordes of black “so-called” asylum seekers who in reality are “only” economic migrants. To be specific: last year the Office of the Refugee Applications Commissioner received around 4,300 applications for asylum status, 400 of which were granted. Can we handle 400 refugees? Apparently not. Apparently we’ve made it far too cushy for asylum seekers who are running around the country living it up with their social welfare and free flats. Don’t worry. The government has proposed tough new legislation to sort out the process and soon we’ll be able to ship those lying, free loading Africans back to where they came from in double quick time.
Chad on the other hand has taken, so far, 200,00 refugees from Darfur. I wonder can they handle them? With Sudanese militias attacking Chadaians on bordering towns, it must get a bit tricky at times. Oh well, that’s their problem. Give John O’Shea €50 and he’ll get them some clean water. Or something.
Now back to our problems, and in particular how to handle those cases of photogenic African women with cute children and sob stories about female genital mutilation. Or as Michael McDowell once called them “cock and bull” stories. Pamela Izevbekhai has two daughters, Naoimi (7) and Jemima (5). She had another daughter Elizabeth, but she died aged just 17 months from blood loss after she was mutilated in the brutal procedure that is common in certain areas of Africa including Nigeria.
In case you’re not familiar with FGM it involves partial or total removal of the external female genitalia. That can mean “just” cutting off the clitoris or labia minora. In Nigeria the version of FGM practicised is called infibulation. That’s where they stitch the labia majora together to seal the vagina, leaving just a small hole for urine and menstrual blood. The girls legs are bound together for several weeks so that it heals into a barrier. When she gets married the husband is then assured he has married a virgin. He’ll break the barrier either forcibly with his penis or cut her open. Whichever. I think its safe to say I’d get myself and my daughters to the other side of the world to escape that if I could. Especially if I’d seen one daughter die from the procedure.
It’s a terrible story and Pamela has won friends and supporters in Sligo where she has lived for the past few years. The story has been backed up although witnesses in Nigeria have been intimidated and are reluctant to talk about it anymore. But, as Amnesty International have pointed out, the facts are not disputed by the Irish state. They officially know. They just don’t care. Even if my daughters weren’t at risk of FGM, if I had the chance to get them out of a poor nation where they had few prospects to a rich one where they had some, I’d take it. After all, its what Irish people have done for 200 years.
Pamela has had a lot of sympathy and support though none from Justice Minister Brian Lenihan, who at the time of writing, wasn’t on for giving her a safe home in Ireland. You can see his point : if you let one in, they’ll all be over on the next flight.
Though there are many cases like Pamela’s, hers has received a lot of attention possibly due to both the prettiness of the daughters and the strength of her friends in Sligo. It has exposed something I have long observed about Irish people and our capacity to hold completely contradictory and indeed, hypocritical positions simultaenously.
Position 1. We can’t allow those Nigerians to come in here, living off the State with their made up stories. If we let some in, they’ll all want to come. The government should do something.
Position 2. That poor women. It’s so sad. She should be let stay. The government should do something.
Position 3. Sure, half of them aren’t asylum seekers at all, they’re only here after money.
Position 4. It’s not fair. My cousin in America couldn’t come home for her father’s funeral cos she’s illegal. The government should do something.
Give us a name, let us meet the woman and hear her story and we will literally march in the street to demand that she be rescued. But this year the government will push through the Immigration, Residence & Protection Bill which will cut out cumbersome appeals procedures, broaden the basis under which foreigners can be deported and insist that a foreigner who wants to marry either another foreigner or an Irish citizen can only do so with the permission of the Minister for Justice. The opposition will make a little noise about it but I’d bet the price of storing unwanted electronic voting machines that the bill will go through without too much fuss. Irish people can find compassion for individual cases but get panic stricken at the thought of “them all” coming over here and so support draconian legislation to keep them, and their stories, out of the country.
Whenever I’ve challenged someone on their desire to protect the illegal cousin in America and their complaints about refugees in Ireland, they’ll usually claim that the cousin pays his own way while the refugee gets services that are being denied to more deserving Irish people. Refugees aren’t allowed work and personally I find it morally reprehensible to let the people at the bottom of the pile fight it out for rent allowance for disgusting flats. We could put the electronic voting machines on a bonfire and free up a few quid for something more worthy.
Still that fear and resentment can’t be shifted. Why are we so afraid of helping these people as we sought help in our millions, in the past? What can they possibly do to us or take away from us? Money? We have plenty of money, just no idea how to spend it fairly.
Jimmy Devins and Eamon Scanlon are the Fianna Fail TDs for Sligo-North Leitrim. If the Minister for Justice thought one of them could lose a seat over Pamela Izevbekhai she’d have some chance of staying here. Their seats are safe but her daughters are not.
Update : Myers makes a good point today (loaded with all the usual provocative statements, but ANYWAY)
” Two-and-half-years ago, a Nigerian idiot named Osagie Igbinidion was found not guilty of the reckless endangerment of life, after a little boy he circumcised, 29-day-old Callis Osajhae, bled to death. The trial judge, Kevin Haugh, told the jury not to bring their “white, western values” to bear upon their deliberations. Describing the case as a clash between two cultures, he added: “This is a relatively recent matter that Ireland will have to deal with now that we have a significant migrant population. You are not asked whether this form of procedure is acceptable in Ireland. If you start thinking on those lines, you are doing Mr Igbinidion a great injustice.”
Just one commentator in the media remarked upon this extraordinary case, in which a man walked free from a court having sexually mutilated and mortally wounded a little boy. Me. I wrote: ” . . . had the dead child been female, I believe that no jury would have been told not to bring their white, western values to bear on the case — or if they had been, we may equally be sure that the judge would not be dangling from the nearest lamp-post . . .”
I do not know what that fine fellow Osagie Igbinidion is doing today.
He has not, to my knowledge, and considerable regret, been deported — nor has he been issued with a court order compelling him to desist from his merry trade (he is a fourth generation circumciser; ah the joys of multiculturalism). So it is as legal to chop little boys’ penises off today as it was then, and if they die as a consequence, the judicial advice rings down the years, not to bring our “white western values” into the case.
But when the infant in question is a girl, then those white, western values are suddenly all we care about; hence the uproar over Pamela Izevbekhai and her two daughters.
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