Lenihan: Doing OK?

So how is Lenihan doing? I was amused by the phrase that went round when Lenihan was first appointed to Finance by Cowen : "we is very intelligent". It made me laugh. Was he really? How do we know? And doesn't it saw something about the caliber of our senior public representatives that having a brain would make one of them stand out. Anyway, there is no way of measuring intelligence that would adequately capture the skills necessary for being a good minister - smart yes, but also courageous and possessing sound judgement and an ability to lead and, nowadays, communicate.
Here now in the middle of the storm, everyone is shouting about Lenihan's shortcomings. He didn't capitalise first off; he didn't wind up Anglo; he didn't fold the two big banks into one good big bank and dump the bad loans in a financial landfill. But actually, must of the commentary is just people letting off steam (the remainder is mainly just political game playing). People are frustrated because they still expect some kind of quick fix or rapid conclusion. The nation hasn't settled into the reality yet that the Irish economy is small raft which has just entered a long canyon with a series of rapids along its length. We don't know how long the canyon is, nor how many rapids there are, and we have no idea whether a little raft like ours can make it to the end without overturning.
In general there has been little effort to understand the situation in which Lenihan finds himself. He is not a financial expert and even if he were, it wouldn't guarantee success for we have entered completely unknown territory. Lenihan is faced with a set of circumstances which are rapidly changing and for which there is no agreed or known formula for making things better. Even the most powerful nations have been badly shaken by the global crisis and are to a large degree are making it up as we go along. How could any Irish minister expect to be any different?
True, we can disagree about specific measures : the distribution of taxes or the percentage of board members which should be replaced, but in general there is no over arching template which will lead us to safety.
We do need an opposition now - for all measures taken now need careful scrutiny. But the general public should also scrutinise the scrutiny. It is very easy for Richard Bruton for example to list off what the minister is doing wrong. "it's very simple" said Bruton "we need to set up a new bank with a clean balance sheet". But no actually it's not that simple. This route has not yet been chosen by any other country. It is by no means tried and tested. It may carry considerable risk. For example, much of the present banks function perfectly well - they have systemic knowledge of the Irish economy, they know Irish customers, they use methods which have been honed for years, they have division which functions well. It seems reasonable to me to try to resuscitate them. Yes, we need immediate changes of personnel, and medium term we need to build a brand new regulatory framework and to try to create a new banking culture. But much of this will take time and considerable thought, debate and agreement in order to make it work.
Overall, I think Lenihan has tried pretty hard and as proved agile and courageous when necessary. He also comes across as quite commanding and determined. And I would be tempted to give him the benefit of the doubt. That is to say, I would see no prospect of better performance by any of his potential replacements, from within FF or without. ( By the way, this is not the same as saying I would be opposed to a change of government. I think that while Lenihan deserves a certain understanding, FF senior ranks and its power fattened, arrogant culture, is way out of touch and there needs to be a far broader rebalancing in society between the very wealthy, the merely well off, and the ordinary working people).
True, Lenihan should have read the entirety of the report that mentioned the IL&P loans. It was a mistake not to have done so. But I'm not convinced it meant that he wasn't taking the whole Anglo thing seriously nor that he wasn't dedicated to getting past that particular hurdle. But everyone makes a mistake and that one wasn't catastrophic. With our without that revelation Anglo was a basket case. But of course Lenihan cannot get away with many similar errors. He will have to be hyper diligent now.
Nevertheless, I think it is far too easy to say what Lenihan should do and what he shouldn't. For every second day he has to take (and has taken) enormous decisions which will affect this country for a long time. And there is no easy way. As economist Dan O'Brien said the other night "this is a process". And it is unprecedented and so it is like fire fighting. It's about keeping going and there are no easy answers.

It's all your Fault!

There is a palpable anger in the Irish air. For many, their standard of living has already gone into decline. Some have suffered wage freezes or wage cuts. Others have been dealt the ultimate economic blow and have lost their jobs. The numbers now are quite stark - there is something like 100,000 more on the dole now than this time last year. That's a doubling of the actual figure.

Numbers for those who have suffered pay cuts or who fear their jobs will be lost soon are impossible to guess, but multiplied across the country it is easy to see why people are annoyed. Then there is the sense of impending doom - huge public sector cuts are about to be announced. And people know where this leads - for public sector workers it affects their standard of living, perhaps very sharply if you happen to be on contract and face the dole cue. The general public know it means longer queues for services and a likely decline in the quality of service when it does get delivered.

So much to be angry about. Yet who should be the object of this anger. It seems that bankers are getting a very hard time. I've heard people curse them. "They should be locked up". Others blame the government. And of course, the builders get it too.

All of these groups deserve a certain amount of opprobrium. The top bankers in particular did us no favours - though they were keen enough to do themselves plenty of favours. The government though - and this essentially means FF and the PDs - bear a far larger share of responsibility. They are ultimately the group who have wielded power. It was even they who failed to create adequate regulation for banking. And of course it was our government, under Ahern, who fueled the train wreck that was the Irish property fantasy.

But as far as I can see, very few people, however angry they are, have been willing to mention the other group who bear responsibility: the electorate. As an electorate, collectively, we chose the FF- PD arrangement. Not only did we choose it in 97 (at that stage perhaps we could be forgiven for taking a chance with a new regime) , but after 5 years we returned them, reinforcing the direction they were taking. Five years later, at a time when we all knew that our property fueled splurge was a fantasy and doomed for a sad end, what did we do? Their leader was mired in an unsavoury mess of unbelievable tales related to uncountable sums of cash. So what did we do? We returned them to power.

True, the opposition was weak. Perhaps they were even pathetic, but the fact that they too offered us the same brand of fantasy is as much a reflection of us as them. We kept buying in to the fantasy that income taxes could keep on being lowered and expenditure keep on growing, because the coffers were flush. Even Pat Rabbit of Labour felt it necessary to satiate our appetite for lower taxes by offering to cut the lower rate. The Unions -- who profress to protect public services -- bought in fully and signed up to over a decade of seemingly endless tax cuts.

So FF-PD and Labour and FG alike, each and all, failed us by not offering us the leadership and courage to tell us we were tying ourselves in to an unsustainable strategy. SO yes, our political class failed us. But they did what the political system to a certain extent guarantees - they gave us what we wanted, even if that meant setting us on a path to destruction.

But we bought it. We kept on clinging to the impossible promise of ever lower taxes and ever more public spending. We heard the phrase that we wanted the public service of Sweden with the taxes of Texas, yes we heard it, and we turned the other way. As a nation we fully bought in - literally and figuratively - to the property and low tax nightmare. It seemed so good - we couldn't make a rationally sound decision to reject it.

In the end we are all to blame. No, not equally, and our elected leaders did us a massive disservice. Bar his extraordinary commitment and achievement in Northern Ireland, Bertie Ahern's legacy has now suddenly gone from questionable to disastrous. His successor, who was at the centre of the Ahern regime, is now struggling to save his own legacy.

But we as a nation failed ourselves too. We walked ourselves into this nightmare. We were either terribly easy to fool, or, no one fooled us, and we were heedless and greedy. Neither answer is particularly glorious.

That we to some extent share the blame is one good reason why we are wrong if we indulge in a further fantasy that one small group of people - the cabinet - can take us out of this. Leaving aside their dubious talent, it is simply not possible for government of fix even most of the economic problem facing the country. It will be fixed by working its way through the system and forcing individuals to take tough decisions -- managers, business leaders, trade unionists, workers private and public. It will be a deeply unedifying way to celebrate the 90th anniversary of our first Dáil if we collapse into a mire of blame and counter blame or retreat into the fantasy that it was all the government's fault so they should fix it. Time to start shouldering a little bit of individual responsibility.

Do your duty - holiday in Ireland!

Even before my good employer cast me mercilessly onto the dole cue last September, I had already decided that if God were to spare me, I would spend my summer holiday in Ireland in 2009. The reason for this was not patriotism, but economic. Bean Thomaltaigh had given up work to return to college (little did we know that I would lose my job within weeks of that). So after a nice stay in the Vendée last summer we decided that we'd spend 2009 at home.

But then today I was thinking about the number of trips abroad the Irish make and the amount they spend. In 2007 for the first time the Irish made more trips abroad than visitors came to the Emerald Isle. And the Irish spent more abroad than tourists spent here. In fact, we spent 4 billion abroad in 2007 on holiday trips (according to the CSO). This excludes business trips which was in the region of 400 million. So the Irish spent over 2% of GDP abroad that year.

Without question overall spending on holidays this year will be down dramatically. Yet a huge chunk of the population will take to the skies this year for foreign lands. Even if spending fell by 50%, it would represent well over 1% of GDP.

That would be in the region of say 2 billion euro. If Irish residents were to turn patriotic and spend this at home, it would be a huge injection into an economy where every billion counts. There will be a massive battle very soon to narrow the gap in the public finances by 2 billion this year. So an extra 1 billion in the overall economy would certainly mean a great deal.

But in the end of course this is purely a mental exercise. If people are cutting the heels of one another to get across the border to hand their taxes to he Crown, they are hardly going to forgo their tans for the sake of the greater good.

The notion I have outlined would have some practical issues, but in theory it is possible. But on reading it, you just wince at its naivety. And the reason of course is that you know that in reality people are willing to sacrifice precious little even if they knew it would make a difference to the overall state of the country. In short, people are governed by very powerful self interest, and there is no doubt we will see that in its rawest form very soon when various groups start screaming about why they are special and shouldn't have to make sacrifices for the greater good. It will be terribly interesting - though I predict unsightly - to watch how this plays out over the coming months and years and how it will reflect on what solidarity means in this country.

Job Loss, Part IV: Lumen

Last week I did two second round interviews. And by Friday I had an offer. I was very very grateful to have bagged a job offer in the current horrendous job market. Most of the companies I was initially interested in put hiring freezes in place after the financial crisis broke in late September and early October.

Today the second company contacted me with an offer. I was delighted, but had already decided to accept the first offer. So I rang immediately and explained that I wouldn't be accepting offer number two. I gave the genuine reason: the commute was two long (it would probably be around an hour and a half at each end of the day while the job I accepted is less than half an hour).

In some ways both jobs are similar, though the company I will work for is much smaller (around 30 people) than the one I turned down (recently taken over by a multinational). You could say the big one might be more secure, but in the current climate, it's not even possible to be sure. Job wise the one I turned down probably had the edge, but in terms of company culture and what the job really turns out like, well, these can only be discovered after.

So today I signed the contract with my new employer and I start in the middle of January.

I consider myself very fortunate to have found a job right now. It's certainly a nice way to go in to the Christmas period.

I had prepared myself for a much longer period out of work. And I think I had got myself into a routine that was workable - basically as much activity as I could. I was enjoying the extra time and I read quite a lot and even got around to writing a few bits.

Financially our household could have stuck it out for even another year - we had found ways to narrow the gap between various outgoings and modest income: this involved adding a few odds and ends to welfare. A few bits of writing for me, and some teaching work by bean Thomaltaigh. And of course a fairly tight approach to spending. That is not to say we had cut off all little luxuries. We were prepared to use some of my redundancy money for what it was designed for: keep us alive between jobs. But the idea was to not spend it all. It is easy to imagine more rainy days in the near to medium term.

So finance wasn't the main factor that would have nagged me going into next year still unemployed. Not finance and not idleness. It was more practical. First, I felt the job market would get worse next year not better. So being unemployed in April could easily turn into being unemployed by next September - a full year. That would lead to the second problem. I feel that many employers take a dim view of long breaks in a CV. I could be wrong but that is my impression. I think this is ridiculously narrow minded, but if it's a reality it would have to be dealt with.

Therefore I felt that if by next September I was still out of work then my odds would start to decline. This is what urged me to do all I could to get back into employment now.

I hope now that it turns out fairly decent and that it lasts at least long enough so that light starts to appear at the end of the hideous economic tunnel we have entered.

Sin a bhfuil a chairde. Nollaig shona daoibh go léir agus guím gach rath oraibh sa bhliain úr.
Tomaltach.

Peig is back!

Yes, that Peig: the one that a young conservative, nationalist, and Catholic state employed to revive its native tongue. This year marks the 50th anniversary of Peig's death and both the national broadcaster and some of the print media have been reappraising her significance.

For the guardians of the fledgling nation, Peig's world was not only an authentic remnant of a great, ancient and oppressed culture, it also contained the elements from which a modern, proud nation could be forged. The people of Dún Chaoin and An Blascaod showed perseverance in the face of hardship; their way of life was wholesome; their faith was unshakeable; they lived in a kind of pre-modern harmony; above all their culture was Gaelic, indigenous, and part of an historic continuity that had survived centuries of attempted annihilation.

And so it was that Peig was pressed into the service of the Free State, and later the Republic. That much is not terribly surprising. After all, the mythic belief in the power of shared ancestary and a glorious past reached its (often bloody) peak in the first half of the twentieth century. And the idea of employing the apparatus of state, especially the education system, to preach the nationalist myth was a familiar formula.

It is tempting now to ridicule the naivety of our early leaders. How could they have been so wrong? But to do so is to apply the insights of a lesson in nationalism and globalisation of which our predecessors couldn't possibly have dreamed. Yes, huge chunks of straw were gliding by in the wind, but it is far too easy for us now to quench the idealism and hope which carried our nation into being. And idealism and hope which were only slowly ground out of existence in the unforgiving mill of twentieth century history.

Yet it is at least interesting, and possibly useful, to look back at exactly how different the future turned out. In the last two decades of the century, the Catholic church went into a steep decline. The latest development in many rural parishes is that there is no longer a priest to administer the sacraments. Parish councils are being established to run the affairs of the parish and lay people are carrying out much of the ceremonial aspects of church life also. Lay people who are not studying to be priests are being ordained as deacons in order to perform functions such as baptism.

It is hardly possible for me to chart the extraordinary transformation that has taken place in the last thirty years in how we live in Ireland – and the world. Suffice to say that we have melded in rather well into a world culture whose main values are consumerism, hedonism, materialism, and self promotion. We have probably become as rich materially as we have poor spiritually.

And leave it all to the Gaelic culture. The invented variety has thrived in the form of the Gaelic games. And traditional Irish music has enjoyed an amazing revival and has infused a whole plethora of modern genres in Ireland and abroad. But the key marker of national identity – the national language – is on life support.

I am certain that many people will not agree that the Irish language is dead. Under the strictest definition – no more speakers – Irish is surely alive, and probably kicking. But numbers alone say very little about the health of a language. The language has entered a kind of linguistic purgatory. It was put there by a nation whose attitude towards it has become schizophrenic. We profess to love it, but cannot learn it. We do not want it to die, but can barely keep it alive. We have recently legislated for its wider use, but we use it less and less.

There are thousands of people the length an breadth of Ireland who have learned the language. But the levels of competence varies so widely and their opportunity to use the language is so circumscribed that any notion of a speaking public is almost ridiculous. The language continues to die in the Gaeltacht (now many primary schools within the Gaeltacht are having to offer the curriculum in English because the locals cannot cope with instruction in Irish). Enthusiasts always point to the gaelscoileanna. But there is no convincing evidence that these lead to Irish speaking families much less communities. (And as I have noted elsewhere, the demise of the Irish language section in most major book stores must surely be another indicator).

Language use – and language death – are extremely complex social phenomena, just as language itself is one of the most complex capabilities we humans possess. And in truth, how the fate of a language plays out is dependent on a bewildering interaction of uncountable parameters, which must include cultural norms, identity, status, and the most severe of all, economics. When all this mix got together, it did for Irish what it is doing to thousands of other languages, and that is, it pushed it towards extinction.

But Irish will not disappear entirely. It will simply become the preserve of the enthusiast, the hobbyist, and alas the academic. And this is what brought forth my original thought about Peig being back. I heard a debate, indeed a very interesting debate, on Radio one in which a panel of academics discussed the merits of Peig's narrative style, her place in the feminist canon, her lonely position in a world being pushed out of existence by modernity, and her awareness of a readership and what it wanted to hear. The discussion was, of course, in English. And informed and sharp though it was, there was a faint echo of elegy in the timbre of the discussion, a kind of weak signal emanating from between the words, a signal from a world that is now dead and distant.

Peig's world is distant, yet strangely recent. In rural Ireland at least, the journey from a life that was simple, almost pre-modern, intensely local, and drenched in tradition to one that is frenetic, fragmented, and post modern, was dizzyingly swift. It often happened withing a single lifetime. In a recent talk at the Abbey, Seamus Heaney explained that the immense, disorienting changes since his childhood were at least partly at the root of a trauma that found its expression through his poetry.

It's as if we have been propelled into the future without time to consume history as it happens. It's a kind of time warp, a discontinuity in time, and probably all modern societies are reeling from its effects. We simply haven't come to terms with what has been happening. Hence the anguish, and the confusion about who and where we are. And I think this goes some way to explaining our difficult relationship with the Irish language. We know it is dead, but we cannot bring ourselves to bury it. We are in effect, attending an endless wake, and no one is prepared to take the body to the cemetery. A quote from Pearse captures the kind of intensity we feel for a truth that we love but which is no longer possible: "No man dies for what he knows to be true. Men die for what they want to be true, for what some terror in their hearts tells them is not true". Tá Peig marbh, ach mairfidh sí go deo.

Defending Economic Growth

For John Gibbons writing in the Irish Times yesterday, economic growth is "the secular religion infecting every society on Earth via globalisation". Economists are "priests of growth", "alchemists", or "sorcerers", peddling a creed that is leading us to exhaust natural resources and wreck the planet.

I think I know what Mr Gibbons is trying to say: that our consumer society, with its insatiable appetite for resources, and its spiritual emptiness, is hideous and unsustainable. Unless we change, we will bestow a damaged and depleted planet on future generations, and they will hardly forgive us for it. If these are Mr Gibbons sentiments, then we are in agreement.

But Mr Gibbons has taken aim at the wrong target. Economic growth, per se, is not the problem. Economic growth is merely an increase in value created. Its consequences are an increase in our standard of living. From economic growth we have acquired all the great things that we could never surrender – longer healthier lives, education, leisure time, the ability to travel widely. Indeed, civilisation itself could not have come about without economic growth.

The key ingredient in economic growth is innovation -- not a hike in the level of resources used. In fact, the beauty of innovation is that it allows us to do more with less. Think of how the miles per gallon has extended for a family saloon. Given the understanding we now have of climate change, we may need to reduce this to near zero. With innovation, it is possible to imagine such an outcome. Standford economist Paul Romer, one of the profession's eminent scholars on growth, explains it using an analogy:

Economic growth occurs whenever people take resources and rearrange them in ways that are more valuable. A useful metaphor for production in an economy comes from the kitchen. To create valuable final products, we mix inexpensive ingredients together according to a recipe. The cooking one can do is limited by the supply of ingredients, and most cooking in the economy produces undesirable side effects. If economic growth could be achieved only by doing more and more of the same kind of cooking, we would eventually run out of raw materials and suffer from unacceptable levels of pollution and nuisance. Human history teaches us, however, that economic growth springs from better recipes, not just from more cooking. New recipes generally produce fewer unpleasant side effects and generate more economic value per unit of raw material.

The key, therefore, is innovation. But the direction innovation takes is usually driven by our values as reflected in consumer tastes or in government regulations. Today, with the evolution in technology, all cars in Ireland could be say, twice as efficient as those we drove in the 80s. But instead, many people have chosen to drive SUVs. The challenge then, is not to curtail growth, but to shape our values in ways that lead to a sustainable way of life.

The demonisation of economists is far too easy. The field of political economy is so huge that tarring all practitioners with the same dismal brush, is as naive as it is ungenerous. Remember, for every hack babbling on the radio about the housing market or interest rates, there are thousands thinking about how inflation affects unemployment, how firms can be efficient, or what developing countries need to break free from poverty.

Mr Gibbons accused economists of placing no value on forests. Economists have used the term 'externality' for something not directly involved in an economic decision or calculation. But this is merely the economists way of saying that this cost does not matter to us here and now. And this decision in turn is usually based on the values assigned by society at large.

Once we became conscious of pollution as a major negative result of production, we, as a society, forced it back into the equation. The results were stunning (rememer smog, CFCS, etc). While Mr Gibbons expects the economist to be our moral compass, I would say we need to look into our own hearts. If that forest has a value, let's express that as a society, through our elected representatives, through our membership of support groups, or by hugging the trees if necessary.

Sinn Féin on Lisbon - Waiting for the Revolution

Sinn Féin’s stance on Lisbon shows us that they remain irredeemable purists. Despite all the evidence that governments across Europe have no stomach for re-opening the decade long reform process, Sinn Féin doggedly persist in arguing for renegotiation (Mary Lou McDonald, IT 2 Dec).

After ten years of painstaking talks, compromises, and fudges, Europe found a formula that all governments could sign. Referenda in France and the Netherlands saw it rejected, yet no essential changes could be made to a formula that is perhaps the only accord that can allow twenty seven nations to move forward. Do Sinn Féin have any grasp of the bewildering multitude of views that political leaders across Europe hold on how the Union should be reformed? The differences are so vast and varied that arriving at Lisbon at all was something of a miracle.

But no matter. Sinn Féin cannot bear surrendering their ideological purity. Not for them a pragmatic compromise. But wait a minute. Isn’t this the party that began by trying to bomb its way to a thirty two county socialist republic, and ended sharing power with Ian Paisely in a devolved UK government? An astonishing compromise by any measure.

Why now the retreat from pragmatism and reality? In the North, Sinn Féin had to painfully relearn the lesson that Collins taught us: seize the best on offer, then build on it.

Lisbon is flawed but workable. It can make Europe more fit for purpose in the twenty first century. We should seize it, and build from there. No point hanging around for a revolution that will never come.

PS: McDonald made a number of points about the workings of the Oireachtas committee which its chair, Paschal Donohoe refutes here.