Tuesday 30 September 2008

Financial and Economic Crisis will hurt the Greens

I was listening to Thomas Friedman of the New York Times talking on KRCW's To the Point. Friedman has been arguing for years that the US needs to drastically cut its dependence on oil and to transition to more sustainable technologies and behaviours. "The problem for the US economy" he said "is that it has become a giant money laundering system. We borrow money from the Chinese and give it to Saudi Arabia after running it through our gas tanks".

Friedman sees a world balanced at a delicate juncture. A new and radically different world lies before us. The future must be green. There are, says Friedman, huge opportunities now to spot the potential of new green sustainable technologies. And the US, he thinks, could be and should be leading the way.

Friedman argues that the world will take a new direction economically, like a mini revolution, and the Us needs to be at the front of the pack not lagging behind. If the US doesn't innovate and alter its course, others will. Japan, Europe, and even China, will quickly respond to price signals about energy and will drive hard from new technology. Already, the US is behind. Friedman finds it insane that one of the contenders for the White house holds to the mantra "Drill Baby Drill". He sees this as analogous to advocating more investment in type writing and carbon paper at the point when the PC was just being born.

But Friedman must be right when he remarks that the current financial and economic crisis is now going to kill off, for the time being, a transition to more sustainable technology. Any movement in a new direction will require innovation funded by generous amounts of venture capital and by heavy political sponsorship to alter taxes or set carbon limits so that signals are sent to the market to move to new technologies. In the current climate this kind of manoeuvring is unthinkable. Leaders will be forced to be parsimonious with spending. They will retrench and hold the line out of fear.

Surely when the tax payer is being asked for at least $700bn, it is impossible to start playing with taxes to give incentives to invest in green energy.

And so I thought of our own Green Party who entered government saying they were not a PD style watch dog, they were not powerful enough to dictate major policy, but that they would above all else, focus on moving Ireland on to a more sustainable path in terms of energy use and carbon footprint.

With the economy falling apart however, and public finances in deep trouble, there is now almost no scope for bold initiatives that might encourage investment in green technology. No capacity to reduce tax say on items that are environmentally friendly. No scope to pour funding into exciting new ventures for conservation or energy production. Instead, all we hear is that Ireland's carbon output has been grossly underestimated. Overall then, the Greens are facing a fairly sparse time in terms of what they can hope to achieve.

Some commentators have mooted that there may be bold new carbon plans or insulation incentives in the budget. I honestly doubt if there will be anything of the magnitude required to make a difference. Given the depth of the current economic crisis, it seemly highly likely to drag on for several years. This means that the latitude for generous green projects is reduced to almost Nil. And I feel the Greens will finish their first term in government will precious little to show.

Thursday 25 September 2008

Lisbon and the Irrational Voter

Voters are not ignorant, according to Bryan Caplan, they are irrational. Caplan is the author of the provocative “The Myth of the Rational Voter”, a book in which he lays a large part of the blame for poor political outcomes on the shoulders of voters. The voter messes things up because he or she makes choices about issues which they do not understand and about which they hold inbuilt biased opinions. Given the huge amount of discussion about how well or badly voters were informed on the issue, I immediately thought of Lisbon.

If the only problem were that voters are ignorant the so called Miracle of Aggregation would still hold. Suppose 90% of voters knew nothing about the EU or about the Lisbon treaty and the remaining 10% understood the EU institutions, how they work, and the exact nature of the proposed changes. Well, the 90% of voters just don’t know, so some are swayed to vote Yes, some to vote No. Overall they statistically cancel each other out. The remaining 10% of ‘informed’ voters effectively make the choice, and that choice, since these voters understand the policy implications, is the right one. (whether that is yes or No can be debated elsewhere!).

But Caplan calls on an impressive swathe of empirical evidence to show that voters aren’t simply ignorant, they are, he argues, irrational. They have inbuilt biases which predispose them to prefer policies which are anti-foreign, or pro-national, or to policies which are against the free market (Could this be why voters latched on to many of the very right, very left or socialist campaigners during Lisbon?) By bias here he means that they prefer certain policy choices that go against the accepted wisdom in the relevant field of expertise. He focusess on economics, but argues the same applies to other fields too. He cites a number of voter biases in economic and foreign policy and argues that it there are likely other biases, which haven’t yet been tested, which mean that the voters make the wrong choices.

Are the experts right? Well Caplan argues that most lay people on the whole accept the opinions of doctors in medical matters, physicists in nuclear energy, traffic planners, legal advisors and so on. Why then would they not accept the analysis of economists and foreign policy experts?

Caplan would not be surprised by the evidence that voters didn’t understand Lisbon - there is good evidence for this from polls after and since the vote. But he would go further. He would argue that voters are pre-disposed to prefer inward looking, anti-foreign choices.

Not only that, he argues that emprical evidence show that voters take an overly pessimistic view of policy proposals in general. He showed that voters had thought the outcome of previous choices at the time would be worse than they turned out. During Lisbon there was much of the hype about conscription and doomed farming communities. Caplan may have a point.

Some commentators pointed to the large Yes vote for Lisbon among middle class males a sign that this cohort favoured the treaty because they thought it would benefit them. Caplan would take a different view. First, Caplan says his findings show that voters are far less selfish than we might expect. In general they are more in favour of improving the general social welfare than merely their own welfare. (Caplan spends a lot of time demolishing the traditional public choice hypothesis of the Self Interested Voter). The problem is they don’t know which policies are best to bring it about. Second, Caplan would say that his studies show that as a persons level of education increases their views converge with those of the experts. So if middle class males happened to be (statistically speaking) better educated, they would be more likely to agree with the experts. Since most experts were for Lisbon, this is likely why middle class males voted Yes, not because they thought Lisbon would favour them as a cohort.

One of the most controversial aspects of Caplan’s work is the exceptionally dim view he takes of what he calls the median voter. Basically, he says most voters don’t know about issues terribly well and are biased against optimum policies. Therefore it would be WORSE not better if more voters come to the polls. This is because those who currently don’t vote are generally the least educated and knowledgeable about politics. If they voted they would bring down the average choice.

Caplan goes further. Because educated voters make ‘better’ decisions, it would be better if their vote had extra weighting. The result, he argues, would be better for everyone. (Caplan doesn’t go into the ethical or practical difficulties with this approach or the dangers of ending up aiming for philosopher kings and getting dictators). Perhaps next time Lisbon comes round the government will only give the vote to PhDs in European Politics.

Tuesday 23 September 2008

Getting a Start in Life

Twelve year old Rebecca has a hole in her heart. It is a congenital defect and it may cause her problems in the future. But it is not by a long way her biggest challenge in life. Rebecca's parents are both heroine addicts and they have abandoned her to her granny who is now in her eighties.

Granny does her best for Rebecca but raising a child at that age is an enormous challenge. And recently Granny and Rebecca got some terrible news: Granny has cancer. It is not yet known how badly or how quickly it will affect her health, but even the knowledge of having it is weighing heavily on her ability to cope.

Rebecca attends a school near where she lives in Dublin's south inner city. The school is designated as a disadvantaged school, a term which fails to convey the immense difficulties faced by both its pupils and teachers alike. Many students have acute learning problems. Some, like Rebecca, have attention deficit sydrome. Many more are hyperactive or have low self esteem. Some can barely read or write. And still more have behavioural issues which flow directly from family environments which are chronically dysfunctional. Then there are those who barely attend. One of Rebecca's friends, Natasha, attended for only one month over both terms last year.

Her teachers say Rebecca tries as hard as she can despite her ADS. But often she retreats from learning and finds it impossible to stay focussed. Even if Rebecca had one to one tuition, one teacher said, it would be a huge challenge to keep her from leaving school and to get her to Junior Cert level. As it is, with twenty others in the class, there is little hope that Rebecca will obtain a successful Junior cert.

Teachers in most shools are charged with the task of covering the maths or geography curriculum and getting their pupils to obtain reasonable grades in Junior cert. But in Rebecca's school the mission is of a wholly different order. The school's role is more social than educational. One major aim is simply to keep the children in school for another few years, so that they aren't on the street all day, every day. Another aim is to provide basic literacy and numeracy skills which are normally associated with the early phase of primary school.

It is tempting to think that the state ignores the plight of schools such as Rebecca's. In fact, the state has made enormous efforts in recent years to help children in disadvantaged schools. Through the DEIS (Delivering Equality of Opportunity in Schools) programme, disadvantaged schools have been identified and targeted for extra resources.

Rebecca's school has a much lower pupil teacher ratio than the average; there are extra resource teachers and special needs teachers; the school gets much higher capitaion grants and has state of the art facilities in terms of teaching equipment and classroom kit; and the pupils, many of whom would otherwise be malnourished, are provided with a lunchtime meal.

Yet the teachers in Rebecca's school face almost insurmountable challenges. Some of their pupils will drop out, get addicted to drugs, or fall pregnant. Parental support is often absent. A neutral parent is considered a bonus - a small number of parents have threatened teachers physically for reprimanding their often difficult children.

Some pupils who stay in school will be seen to make little progress. One teacher felt disheartened and said she sometimes wondered if all the effort and resources weren't a waste of time. But of course, we know we have to try. If society can be judged on how it treats its most vulnerable citizens, then it will fail miserably if it doesn't attempt to help these poor souls who are given such a terrible start in life.

The trouble is that the school is being expected to do far more than it can ever hope to achieve. The problem is not educational, but a breakdown in how society has provided for its citizens over the long term. Teachers in Rebecca's school deserve admiration and respect for facing up to a problem that wider society and its political masters have created. The lesson must be, try hard to help Rebecca make a better life for herself, whatever the odds, but try far far harder to build a more inclusive society where there are fewer and fewer twelve year olds in Rebecca's predicament.

Tuesday 9 September 2008

Job Loss: Part II

Yesterday I went to the welfare office. There remains a tinge of stigma on anything to do with welfare. I will admit that I'm not immune from it. As I made my way to the 'dole' office, something gnawed at my pride. Of course, this effect is shaped entirely by the orthodoxy that insists we must be working all the time.

We are not invited to look at it rationally, which would give a picture something like this: we work most of the time and pay in to a system that is intended to provide a safety net. More important, globalisation as made many jobs very volatile and Ireland has bought in particularly heavily to this model, therefore it is right that the state should provide adequate bridges to help people make their way between islands of work.

I was pleasantly surprised by my first visit. I had this image of nasty staff harassing applicants in a deliberate effort to discourage people from making further claims. In fact, the lady who dealt with me was courteous and helpful. And the process seamed relatively smooth to begin with. This all made it much easier. I need to go back in a few days with more documents, then I hope the payments will start. I view it as a refund of my own money!

Over the last few days I've had time to reflect on what has happened. Strangely enough, the downturn in Ireland is not the reason the company had layoffs. It is more to do with the fact that the firm never fully recovered from the dot com bust. It has been struggling ever since. Certainly, the bust in 2001 accelerated the phenomenon of offshoring which was already underway. This meant that while the market for our services (IT development) recovered, the downward pressure remained on costs and we kept on struggling to win projects. The company has an office in Eastern Europe and over the last few years that office grew while the Irish office shrank. It seemed like a deliberate ploy to keep costs lower. But even that wasn't enough.

The senior management too have been less than inspiring. They have been with the company almost since the start and are all engineers bar one, who is an accountant. I'm sure they read management blurb and are influenced by the latest trends. But they show a poor understanding of some elements of business. A poor quarter and they abandon their latest and greatest strategy for a new one. They cannot surrender pet projects – a few of which have been embarrassingly costly and were obvious dead ends. They seem to forget a very important fact: a service company relies on people! The latter failing has been catastrophic. While management grew more and more obsessed about building stories for the market and the press, they simply let the whole notion of a career in the company die a slow painful death. Morale ebbed away to reach biblical proportions. Cynicism spread through the workforce like a silent plague. A company that once gave people careers now gives jobs – mostly bad ones, and obviously not very secure ones either.

So while the layoffs were a bolt from the blue, with hindsight a few fragments of straw had been swirling by in the breeze. The company was doing badly and had been struggling for years. Over the last year our new owners, (we were taken over a few years ago), had become increasingly irritated by the performance of the company. They were stepping up the pressure on management to stop making losses, whatever it might take. And certainly a number of our business lines have been, to say the least, unimpressive. There had already been some mild restructuring – a department head removed here, a research project canned there, and so on.

But there you are. It's academic for me now and one merciful aspect of my recent experience is that I'm now liberated from an environment that had become infected with gloom.

Finally, just to say that, in a social setting, I have already met many of my ex-colleagues who survived the cull and their response was overwhelmingly, almost embarrassingly, sympathetic. I have felt a very genuine sense that they felt sorry or my situation. True, they now face going back in to a workplace where morale is even lower than is possible to measure, but still, I believe the good wishes were heart felt. That kind of reassurance is very welcome at a time like this. Not only were they re-assuring but helpful as well, in some cases providing me with a list of contacts they knew that might give me leads in a search for a new job.

And of course, there have been some very kind remarks here online as well. So there is such a thing as humanity after all! Alright, let's leave it at that. Time to move on and figure out what's next.

Monday 8 September 2008

Job Loss: Part I

A senior manager called by my desk last Wednesday and asked if he could have a word. There was nothing unusual in that. He had occasionally asked me to his office to discuss a project or a customer. And anyway, my immediate boss was on holiday and we had just put in a bid for a new project with a US customer, so he was going to ask about that, I thought.

But something in his tone of voice struck me as unusual, some timbre that was heavy with portent. And he turned more swiftly than usual to head back to his office. He had more or less avoided eye contact as he asked me to his office.

As I followed him down the corridor a brief thought shot across my mind that this could be serious. Some nerve quivered but rationality took over and insisted that I had just read the signals badly: no, this would be the usual stuff.

When I turned into the office I saw the head of HR was already there. Then I knew it was grave, but before I had time to weigh it up, I think before the boss had even taken his seat, the bomb had exploded. He was sorry to say that I was being made redundant.

Boom : shock and awe. There was no warning, nor no warning signs. I was in utter shock. Sound became muffled and a mild form of tunnel vision narrowed my view. Only words followed: amalgamating departments, board decision, Q4, profits, support staff.

The HR manager, who managed to convey a sense of genuine empathy, was now going through the figures. A package was mentioned and statutory and tax. That's when I stopped him. I'm sorry, I said, can we talk about the details later? At this point, I'm not taking much in. Ok, he said, we could talk later. But my PC had been disabled he said and it was probably better if I could just leave the building now.

I made my way to my desk, picked up my bag and headed for the door. Then I stopped. I had to say goodbye to a few colleagues. After all, I'd known some of them 8 years. I told them I was gone. There was a round of layoffs. They were stunned, but those who survived said later that I looked like I'd seen a ghost. I went to the lobby phoned by wife, who was calmer than I thought, and then I left for home

Tuesday 2 September 2008

Palin - not all plain sailin

McCain's choice of running mate is not as inspiring as it looked at first. Tomaltach's first reaction was very close to that of his old friend, An Spailpín, who gives a glowing assessment of McCain's choice. True, on the face of it, Palin's selection is a stroke of genius, a relatively young woman with considerable political experience, and who is sufficiently conservative minded to pull in republican voters that were put off by McCain not being too centrist.

One thing which I had assumed was that the candidate had been rigorously vetted. This would have implied that many senior hacks in the GOP would have known in advance and would have given their approval. An Spailpín too assumed that the Republican camp were thinking advance and pulled this stroke of genius. But that seems not to be the case.

According to the NYtimes the appointment of Palin was a belated and hasty response to rejection of McCain's originally preferred candidate, Joe Lieberman, by the conservative wing of the party. The whole thing was rushed. Basically the feelers for how Lieberman would go down in the convervative wing went out too late, and when the cold air came blowing back, a touch of panic set in. A name was needed - for the convention at the latest, but preferrably in order to make the news the minute Obama closed his acceptance speech in Denver. A fresh news cycle would obliterate Obama's glow and the stage would be set for McCain's nomination.

But events dear boy, events. The hurricane shattered the notion of a smooth transition into the Republican convention. But the real trouble is starting to flow from the Palin nomination.

Now that we've had time to digest the McCain's surprise, however, calmer assessments can take place. Moreover, a few things are coming out now which may undermine McCain's bid from a number of directions.

First, Palin's credentials among the chirstian, conservative wing of her party . One of their cardinal values is the importance of the family. How important can your family be, however, if you have a down syndrome child and a pregnant teenage daughter and you choose to be second in command of the most powerful nation in the world? Family may be important to Palin, but not as important as power. Simple as that. The same applies to men. Famliy could hardly have been that important to Tony Blair when he sat out an extra term despite having a young family. That was his choice, and his family I'm sure were well looked after. But no-one can argue they were more imporant to him than remaining in power. The same thinking can be applied to Palin. Family, yes, but power first.

Second. Again the breaking story now of the rushed decision on Palin exposes another flaw: judgement. Is McCain the determined but clear sighted maverick, or is he simply erratic. The latter certainly seems plausable. Certainly there is no ground for the notion that he and his camp burned the oil in the small hours over recent months building a solid strategy for running mate. Instead it was poor planning, and in the end and improvised effort tinged in all likelihood with no small amount of panic.

The third problem, achlowledged by shocked insiders in the republican campaign, is that there is now no plausable way to launch attacks on Obama's experience. Democrats could defend this, but it was a weakness in terms of Obama's youth and his lack of executive power. But I disagree with my friend an Spailpín here, when he says "While Senator Obama has done nothing, Ms Palin has governed Alaska. For a little less than two years, granted, but she has had hands-on gubernatorial experience.". This would sound reasonable if the word Alaska were replaced with say, California, or Florida, or, well almost any other state. Alaska is the ultimate nowhere in American politics. Geographically, demographically (Dublin has a far bigger population than the entire state), and of course, politically.

I'm sure there will be passionate exchanges between fanatics in either camp extolling the great experience of Obama on the one hand and the great leadership of Palin on the other. But without getting into the gritty, I would say Obama through his hard won nomination race, and his term in the Senate, is far better prepared on issues such as Foreign Policy, Security, and National politics. But either way, Palin's nomination now gifts the democrats with a defence on the experience argument, which was seen as a significant Achille's heel for Obama.

Finally, it will not help in reaching out the ever present and important patriotic element (another angle of attack against Obama) that Palin was a member of the Alaskan Independence party for a couple of years. She is now campaigning to lead the union she sought to cede from.

While seeming an inspiring choice at first glance, Palin promises more than anything to complicate things for McCain.