The cheeky Andrea Pappin and I have a tongue-in-cheek discussion on Newstalk 106 about President Nixon and Watergate on “Davenport after Dark” here. It’s the 40th anniversary, and we were invited. It wasn’t some sort of hijacky thing, just in case you are wondering. I’m not some sort of Nixon fetishist. Well…
One of the points most strongly argued by eurosceptics is that the euro was the trigger for all the follow-on problems of property bubbles, wild spending by governments, etc. How true is that?
It’s certainly true that exiting the eurozone creates problems that a country would not have if it had not entered the eurozone in the first place. But I’m not sure I buy the argument that Greece et al would still be competitive if it still had the drachma. Greek competitiveness has surely been hindered by successive Greek governments throwing borrowed money at their people rather than reforming their economy, and that would have happened inside or out. It’s the weirdness of the pro-devaluation argument that I struggle with: its supporters say that internal devaluation within the euro, that is, cutting labour costs, etc, hurts the poor. That can be true. But devaluation increases imported inflation which makes fuel and imported food and consumer goods more expensive which also hurts the poor. You cannot get away from actual economic reforms, and at least within the eurozone you have the benefit of currency stability. Selling devaluation as a pain free solution is a three card trick.
As for the cheap credit argument: Would Spain and Ireland not have had property bubbles if they had kept the punt and peseta? It is certainly arguable that Irish lending institutions would not have had as much access to cheap funds to lend out, but don’t forget that both countries were seen as attractive places to invest, and in the modern global economy that attracts capital. Ireland had a growing economy, a strong pro-business environment, a well-educated workforce and membership of the single European market. We should also not forget that the amount of money flooding into Ireland, even if it had been a smaller amount, was still going to be lent recklessly by a banking regulation regime that was not as much light touch as a financial version of shadow hand puppets.
Finally, don’t forget that Ireland had been a public spending nutcase OUTSIDE of EMU, and became a good boy once bound by the Maastricht criteria. EMU forced Irish leaders to obey borrowing rules that they would have struggled to create domestically.
Of course, the big question is what would have happened in a Europe where countries like Greece over borrowed but without EMU. Would we still be baling out Greece if there was no euro? That depends as to how integrated the banking system would have become. Is there reason to believe that the non-existence of a single European currency would have made cross border contamination less likely? That’s the big question to which I don’t know the answer, but it does raise another question: Did the problems of banks in other (non-European) currency zones have any effect on us? Is this a problem of EMU, or the intricate integration of the global banking system? Is the problem that we are trying to apply national solutions to what is essentially a European banking system?
"My friends, a few minutes ago I rang my opponent..."
I wrote this blog posting one year ago. I have decided to repost it with minimum change because I think it is still valid.
I am a committed Obama supporter. If I were a US citizen, helping to re-elect the president would be a project I would be devoting huge chunks of my free time to, because I have finally come across a candidate whose values I broadly agree with. Yet at this moment in time, I believe that President Obama is the underdog who will probably lose, and here’s why:
1. His victory in 2008 was a much greater freak result than people realise, as he was given an artificial bounce by the meltdown of the banking sector and the fact that John McCain struggled to separate himself from a deeply unpopular president. Also, McCain’s nomination of Sarah Palin was a one month wonder which turned into a drag on the ticket. Finally, John McCain’s journey from Arnie Vinick rebel loved by independent voters to Nasty John was only reversed in his election night speech. If that John McCain had turned up for the election (with Joe Lieberman as his Florida based for the duration running mate), it would have been much closer.
2. The African-American vote, which voted 95% for the president, will not be as high next year. You can’t make history doing the same thing twice. Polls currently put it at 77%.
3. Florida, Ohio, Virgina and North Carolina are where it’s all at, and with the exception of Virginia and Ohio, are within the margin of error and can be taken with a reasonable swing to the GOP. Florida will most likely go GOP because of the president’s tough-ish line with Israel. In short, if Ohio and Florida end up in the red column, in the normal scheme of things it’s game over.
4. The Bin Laden thing is well-eaten bread.
5. The economy. The American people do not re-elect a president who does not get unemployment down.
Having said all that, it’s not impossible. If the economy recovers, if he gets US troops out of Afghanistan, and if ObamaCare gets a chance to start functioning then he’s got a chance. Bear in mind that the GOP claimed in 2008 that he wasn’t experienced enough to be president. They can’t play that card now. The GOP in the house will do their utmost to stop it there, and there’s a good chance that SCOTUS will overturn it, but is that a good or bad thing for the president? Is the Supreme Court beginning to look like the judicial wing of the Republican Party?
Don’t forget that Mitt Romney has recovered a lot of the middle ground from the primaries, and if he can get the Anyone But Obama thing going, it’s game over.
Like many people, I tend to assume that people better educated than me, and paid vastly larger salaries than me in the great departments of state are thinking and planning about the big issues of the day. Sadly, as our property bubble and banking regulation proved, that is not necessarily the case, but I hope things have changed, because something enormous is heading down the track at us.
Now, it’s true, the very continuation of the euro and the EU is up for discussion, but if they go under we are living in a different world, and we’ll just have to deal with it. One issue, on the other hand, that we do know is almost certain to happen in the next ten years is Britain leaving the EU, and we need to start planning for that. What are the questions facing us?
The obvious one is whether we can remain in the EU without the UK, our single most important trading partner? Ironically, it will be in our national interest to ensure that Britain gets the best deal possible in terms of access to the single market, because the last thing we need is to be maintaining a tariff wall with the UK, and them with us.
The second irony is that we will almost certainly become Britain’s eyes and ears in the EU, representing British concerns at the Commission and Council. I would not be surprised if we even end up having some sort of Dublin based joint-secretariat to keep the Brits in the loop, in the same way the British have a relationship with the CIA. This would be in our own interest in terms of maintaining Britain in the single market and also in terms of giving us leverage with the UK on other issues.
The third issue is the joint travel area. With Britain out, we will come under pressure to join Schengen, which is worth considering but not at the cost of imposing passport controls between Britain and Ireland, and certainly not controls at the border. This is an issue which will require toughness on our part with our fellow member states.
Finally, we cannot overestimate the potential ideological shift in the EU away from pro-business policies, low taxes and free trade with the departure of the UK. Whilst we should not get a fetish about our corporate tax rate (we could consider tax harmonisation in return for permanent federal funds to subsidise business in Ireland) we should be more proactive in building a active coalition within the union of pro-business low tax countries, such as ourselves, Poles, Estonians, etc.
If we cannot deliver on the above, we have problems. We need to start wargaming this stuff now.
Note: Ralf Grahn, a regular and thoughtful comment maker on this blog, also raised the point about the effect of English as a working language of the EU. It’s a very valid and interesting point to make? Would there be an advantage to Ireland, or would France attempt a linguistic takeover?
There is a scene in Oliver Stone’s “Nixon” (I know, I’m doing a lot of movie references of late, but bear with me) where Nixon, played by Anthony Hopkins, pays a late night visit to the Lincoln Memorial to speak with young anti-war protesters. As he tries to explain why he cannot just “end” the war in Vietnam, one of the students remarks that he is just as powerless as they are, and that he could not turn off the machine even if he wanted to.
Watching Angela Merkel refusing to move on Eurobonds, etc, I’m beginning to become very queasy with the thought that she is not the problem, but that she just knows that the German people, her employers, will not accept her following that path.
Germany is, after all, a democracy, and that causes a unique problem. The people will savage her if she makes Germany liable for the debts of Europe. Yet if she doesn’t, and the euro and European Single Market were to collapse, Germany will feel that pain just as much as any other country, and her people will blame her. Yet they will never believe in that pain, or support the massive action required to prevent it, until they have felt it, and by then it will probably be too late.
Angela can see the iceberg coming, and know that by turning to her side she could rip the whole ship apart. Yet if she rams it head on, she will save the ship but be hated by those who will never believe that it could have sunk in the first place, becoming the mad captain who rammed her own ship.
Watching the enormous windfalls being enjoyed by various Facebook persons, one can’t help pondering the effect that new technology is having on the socio-economic life of the planet. The truth is, technical knowledge and ability, in specialist areas, will allow people of any class to rise to the top of the economic pile. Technology will be the great social leveller, and if you have the skills it doesn’t matter whether you come from Jobstown in Tallaght or the lowest caste in India. There’ll be a place for you in Silicon Valley.
But what about the other people, the majority who just aren’t smart enough, through no fault of their own, to reach those levels of skill? Are we seeing the development of a global economic caste system based not on race or creed but on merit, and is this a good thing? What a question, you may ask. Of course merit is a good thing! But what about the people who just can’t compete? Yes, we will always need people to stack shelves in Tesco, and I don’t say that disparagingly. I myself did not attend university or have any third level educational qualifications of significance, so Tesco could well be the place for me too. We should also recognise that not everybody needs to be a millionaire to be happy, and I have certainly encountered the odd miserable one.
But what happens in a generation, when the very successful are intermarrying and interbreeding, creating a new class of global citizenship? Genetically alone, they will be more attractive (money attracts good genes), more driven (successful people tend to be), smarter (the vast majority of wealth is generated by intelligence, despite what our modern celebrity age might tell us) and quite logically attracted to each other. In short, by the mid-21st century we will have a global aristocracy not unlike 19th century European royal families except, admittedly, on a much broader scale. But you will only be talking maybe 350 million people out of a population of seven billion. As a class, it won’t be as exclusionary as a royal family, but with access to expensive education, its children will be more likely to intermarry. Of course, just because your forebears were smart and hardworking, it does not mean that your grandchildren will be, but you can’t fight the genetics. The old rich families merged through snobbery, whereas it will be the right mix of genes that will bring this new class to the top table.
That does not mean, I should stress, that they will be bad people. Some of the greatest social reformers came from the wealthiest classes, but it is worrying nevertheless because we will even begin to eventually see physical differences between the Skillocracy and the rest of us. Smart people eat better, exercise more, look after their health, and attract people like them.
Watch them eating their rocket salads at Davos as we chomp down our Dominos.
Coincidentally, although I wrote this post a few weeks ago, I recently saw this piece in The Daily Telegraph which makes some interesting points on this.
There’s a funny scene in Woody Allen’s “Bullets over Broadway” where John Cusack’s character, a playwright, is distraught at selling out commercially and opens a window in the middle of the night to scream out “I am a whore!” I sometimes wonder do young first term Fine Gael or Labour TDs wake up at night in a similar cold sweat, wondering what happened? Not all of them, obviously. Some of them just wanted to become professional politicians for pretty much whatever party would have them. But there are others who must surely must have run for the Dail and Seanad to change the world, or at least Ireland. Yet when you look at what they have let their government do to the Constitutional Convention, they must be puce with shame.
Conor O’Mahony’s (no relation) analysis in this week’s Irish Times hit the nail right of the head. Fine Gael and Labour have shamelessly conspired to trivialise the CC and ensure that anything that comes out of it will not upset the current massive centralisation of power in the cabinet.
So, if I were a genuine FG or Labour reformer in the Dail or Seanad, what would I do? I’d push for the one reform that opens the door to every other reform, that is, to allow for citizens, with safeguards on turnout and to prevent unfunded spending implications, be able to initiate constitutional referendums without Oireachtas approval. Overnight, well-organised groups of citizens could overrule the single greatest obstacle to political change in this country: our politicians.
Of course, that would require the young reformers to decide whose side they were on, and to choose possibly between being a Noel Browne-style politician who does one thing that is remembered forever, or being one of the boys who sits in the house for thirty years, forgotten the day after he leaves the house. I know which way my conscience would force me.
In Sligo they were being cleaned and brought to the girls' tents.
I’m not, as I have stated previously on this blog, big on nightclubs. I did, however, have reason to be in the Velvet Room nightclub in Sligo this weekend, and was struck by a number of things.
The first is that Irish women are as comparable, beautywise, to women in any other country. Yes, I know, it’s shallow and sexist and very Clarkson of me to be commenting on women purely on their looks, but we live in a shallow age where a generation have more familiarity with Britney Spears’s genitalia than the Universal Declaration of Human Rights, so what are you going to do?
Secondly, Irishmen aren’t. It was striking to look through a room of women and see a wide range of levels of conventional beauty, and then look at the men and not see it. There were a few men who were very good looking, but most were not. There simply was not the same proportion of good looking men in the room as there were good looking women. Interestingly, and maybe because I’m getting older myself, I noticed the older women in the room, and they were just as attractive proportionately as their younger compatriots.
Finally, and this really struck me, the attitudes of both sexes are changing. The men arrived late to the nightclub, pissed and clustered in groups as the women, not quite as well oiled, pretty much picked out the men they wanted. It was like a scene from Spartacus.
I’m going to do something odd here. I’m going to recommend a book even though I’m only a third the way through it, but I’m enjoying it so much that I thought I might as well let it out there for you guys.
“Race of a lifetime” by Mark Halperin and John Heilemann tells the inside story of the 2008 US presidential campaign from all sides, and is, quite simply, one of the best inside accounts of an election campaign I have ever read. It manages to be highly readable, fast paced, full of juicy inside quotes and details and just enough gossip to make it as entertaining as it is informative. On top of that, it’s written in such a way that I think even a non-political junkie could enjoy it. This is the book, by the way, that the HBO movie “Game Change” staring Ed Harris and Julianne Moore was based on.
Is it slanted slightly? Hmm. Certainly, Obama comes out of it the best, and John Edwards and his wife come out of it as awful people, with Bill and Hillary as Democratic royalty who seem to be completely stunned by the Obama insurgency.
I haven’t even got to the Republicans yet, and that was the bit that got all the publicity. But this is a great book.