My occasional longer publications on everything of interest to me. For my more frequent utterances in 140-character bursts, join me on Twitter.
Most Popular Recent Post: In Praise of Name-calling
Wednesday, January 29, 2014 at 08:22AM The context of this post is discernible from this news-story in "The Journal". Notably, the website has disabled the "comments" feature for this page which is a very, very, unusual occurrence.
No, I cannot think of anything satisfactory to write in praise of name-calling in this situation.
How about you ?
Sunday, December 22, 2013 at 09:38AM I recently spent a day in Dresden. The former "Florenz an der Elbe", while still a wonderful city, is a little sad looking these days, reflecting no doubt its dreary recent history as part of the DDR ("East Germany", as we knew it in the West) but also the horrific consequences of that night in February 1945.
By pure happenstance, on the same week that I returned from Dresden, in the incomparable Paris Review, I came upon an interview with Kurt Vonnegut which was hilarious more or less throughout.
You'll need to read it yourself to fully appreciate its humour, but as necessary background it is important to know in relation to Vonnegut that
Incidentally, I am not sure what to make of Vonnegut's use of a much higher number for deaths than seems to have been the case.
Saturday, October 26, 2013 at 09:07AM (This is not a post about the fashion business. Nor, despite deriving inspiration from discussions of an economic character, is it directed at such discussions exclusively).
We use models all the time. We have no choice: it is the principal way we humans have of putting order on, making sense of, the world of experience. No-one decides to do it, and it is pretty much impossible to decide not to do it. In the current jargon, we are "hard-wired" to be modellers.
Some of the models that we use were designed by others, but when a perfectly suitable one is not to hand, we will design our own. This is very rarely done entirely "from scratch": we usually adapt models we receive from others. (In this latter way, we can all be slaves to the ideas of some long-dead philosopher in Keynes' memorable phrase, especially if we fail to notice).
Models are not always so-called. Another word for the same thing, albeit not usually as formalised, is "narrative", or even less formally as in Tyler Cowen's talk in this TED presentation, which I strongly commend to you, as "stories". "Framing" is a cognate activity. "Paradigm" is yet another word for a model of this type.
Less benign or neutral words are "stereotyping" and "stigmatising", "labelling" - all of these are also consequences of a modelling process.
Whatever name is used, the process is similar. I am going to call it modelling.
The point that I want to make about modelling is that it is both inevitable, and yet inevitably is just as fallible as all human cognitive activity is. Only the simplest models remain useful for long; one that lasts even one normal human life-span is unusual. It is prudent to be sceptical of all models, not in a negative or destructive way (because all models have some useful function for someone at some time) but to avoid falling into error through over-attachment to them.
Why ? Because a model incorporates beliefs about how things are. Many of these beliefs will turn out to be incorrect. (In some formal models, the truth of the beliefs is explicitly a mere assumption.In less formal models, mere assumptions are unfortunately rife, and, worse, unacknowledged. Worse again, this is fairly common even in formal models).
Dangerously, a model may continue to work well for a long period even though it incorporates assumptions which no longer correspond as closely to reality as they may once have done.
Of course, this is a counsel of perfection: no-one can avoid this trap entirely. Even Socrates, who, as far I know, first formulated the radical scepticism which I am advocating, was, after a fashion, killed by his refusal to abandon a fatally flawed model.
So-called "scientific method" is a powerful tool in the service of this Socratic endeavour. It is not fashionable or popular in certain quarters to say so, but science, as we now understand the word, is not primarily a constructive activity: most of the time of scientists is spent discovering flaws in the models, sometimes their own, used to describe reality.
Friday, October 18, 2013 at 09:10AM Writing to a friend in 1881, Kickham, Chairman of the Irish Republican Brotherhood (better known as "the Fenians"):
Apropos of the banks - the Irish World wants to abolish credit - no power to recover debts, no interest, no gold or silver currency, merely green-backs issued by the State.
Some may think that this reform may be helped in Ireland by the refusal to pay debts. But people who refuse to pay lawful debts next take what they want. The law that is prevailing in the case of debts will be equally so a case of robbery.
'Tis no joke to appeal to the lower instincts of an enslaved people. That's what these Land agitators have been doing all along.
Disclosure: Kickham was a cousin of one of my great-great-grandfathers.
Friday, July 12, 2013 at 10:45AM 
Publisher: Princeton University Press
The ability of financial intermediaries, normally banks, to create money via the device called fractional reserve banking ("FRB") is capable of being both a boon and a bane.
When it works well, savings are mobilised, economic activity is facilitated, incomes increase, wealth accumulates and occasional set-backs are accommodated. It is a magical device without which the modern world could not exist.
In this, it resembles fire. Fire is essential to civilisation but is also extremely destructive when control of it is lost, Similarly,when money creation goes "bad", the consequences can be cataclysmic.
Some say that this is basically unavoidable, and that humanity is condemned to endure such disasters from time to time, just as we must expect another Ice Age sometime, no matter how well we restrain our pollutive natures. That may or may not be so, but I agree with the authors of this book that lessons can be learned and things can be done.
Admati & Hellwig are enthusiasts for the idea that Society can be spared future pain by a more conservative approach to one of the key fractions in FRB, the leverage ratio (often also called the capital ratio). "Whatever else we do, imposing significant restrictions on banks’ borrowing is a simple and highly cost-effective way to reduce risks to the economy without imposing any significant cost on society" is the message of this book, which also gives much space to rebuttal of many contrary arguments. It is a good book, and overall, I think that it makes its case well.
I really wasn't aware, before the book came to my notice, that the issue was so controversial, and I am still a little bemused at the pretty unanimous enthusiasm with which the book has been greeted by some. You can read The Grumpy Economist (No, John Cochrane - and he claims that he is "not really grumpy") and Patrick Honohan - who does admit to some "chafing", mind you - to get the full enthusiastic flavour, or just look at the reviews (including one by Ken Rogoff) summarised by the publishers here. Based on what I have seen myself, the selection appears, unusually for a publisher, to be quite representative. The Amazon ones are here.
My reason for buying the book, though, was because I was astonished by the authors' vehemence (visible in interviews and the Internet) on a point that I (still) think to be incorrect.
I agree that lower bank leverage will bring probably all the benefits that the authors say that it will. Furthermore, I note that they have wisely avoided pinning their colours to the mast of a specific figure, though it's clear that they have roughly 30% in mind (the current average figure is 3%, they say; others put it at nearer 11%). I also tend to side with them in the rebuttals of objections.
My problem is with their insistence that their plan is cost-free for the economy as a whole. I find it odd that there has been so little discussion or challenge of the view that higher bank capital requirements will not actually reduce the flow of loan finance out of the banks. Their approach to this in the book, in interviews and their website is not only wrong, in my view, but perverse.
It is perverse because it requires us to accept that banks' funding structure will have NO effect on banks' activities, whereas Admati & Hellwig spend quite a lot of space describing how the need to attract equity will improve lending standards. Better lending ceteris paribus pretty inevitably means less lending. Admati and Hellwig at different points appear to accept and also to deny this.
While one of the points well made in the book is that (non-bank) users of capital have become too fond of credit and too equity-averse, the authors appear to believe that this preference will frictionlessly pivot on both sides of the balance sheet i.e. depositors will voluntarily become more inclined to take an equity position in the institution where they keep their liquid savings, and borrowers will become more willing to pay in the form of a profit-share to lenders. If anyone doubted that before the Cyprus "bail-in", their fears will not have been assuaged by that fiasco.
I share Arnold Kling's view,
The non-financial sector wants to issue risky, long-term liabilities and to hold riskless, short-term assets. The financial sector accommodates this by doing the reverse..
Finally, though, I am dismayed by this book, and nearly all of its reviewers, because I see no appreciation of the multiplier effects of capital, and other ratios, on the dynamism of FRB. (Indeed, the words "multiplier", "fractional" and the phrases "fractional reserve banking" and "money-creation" are entirely absent from the text.) Central Banks wishing to dramatically slow down over-heating economies or sectoral markets always could (but very rarely did) increase the minimum ratios.
Raising the capital ratio, which is another way of saying "reducing the leverage ratio" even from 11% to 25% will drastically cut the money supply, even if the appetite for bank equity increases a lot. Raising equity capital may not be as difficult as it once was, but it is still and will always be slower than borrowing from money markets. For Klingian reasons, I doubt that bank balance sheets will, following such a change, end up as big as they were. This will have effects in the real economy.
But, even if this is, improbably, insufficiently optimistic, consider what the position will be going forward with a ratio of 25 instead of 11. Where before the multiplier was 9, now it is 4. For every extra million in deposits, 4 million can be injected as new credit, instead of 9 million. That is a formidably less dynamic monetary environment.
Of course, there will be positive aspects to this: less inflationary pressure and less reckless lending, to name but two benefits well worth having. And as we have painfully re-discovered, excessive dynamism is undesirable. However, as the authors say in another context, "it is impossible to discuss coherently the need for anything without considering its cost". The flow of credit will be reduced, and money creation will be suppressed considerably if we do, as we probably should, adopt Admati & Hellwig's proposal either in whole or in part. Those are significant costs. We should not pretend that they do not arise, even if we think that they are exceeded by the benefits.
Fergus O'Rourke
Fergus O'Rourke
Friday, April 5, 2013 at 06:45PM Readers will recall that the next, ninth, part of the series was to address the question
so, do they just get away with it, then ?
I was not very happy with the answers that I was getting to my own question, but patience has proved worthwhile, at least to me. While I was contemplating and researching the question, a number of things happened that affect things a little bit:
As I have previously observed, the crimes on which the Anglo Three will face jury verdicts are not of any real consequence as causes of the Collapse. It is matter of great regret as far as I am concerned that almost all of the time and other resources of the Office of the Director of Corporate Enforcement("ODCE") were diverted into the project of prosecuting these matters.
The other developments listed above are more significant, in my view. Together, they point the way to how, where the will is present, it is possible for the law to do something in recognition of relevant personal failures on the part of individuals even if, as it appears, no crimes of significance were committed and arrests are therefore ruled out.
Over the next few days, I will be sharing my conclusions in this regard.
Do remember, though: I am, I hope, not indulging in vindictiveness and my use of the phrase "getting away with it" must not be understood as suggesting that any crimes contributed to the Collapse, or that anyone guilty of a criminal offence connected to the Collapse is going unpunished. I cannot guarantee, of course, that the latter is not happening: all I can say is that I am aware of no evidence that it is, and everything that I have seen over the last five years suggests that such evidence is lacking.
Sunday, August 12, 2012 at 07:00AM Any resemblance of any hypothetical characters mentioned hereinafter to real persons, living or dead, is purely coincidental.
Consider this scenario:
It is a "stark and dormy" night. (Who said Bulwer-Lytton is forgotten ?) On an unlit road, a tanker's valve somehow spontaneously opens - nobody ever provides a satisfactory explanation as to how or why - and the road surface is soon covered in a black-ish, smelly, viscous liquid. Some minutes later, a motor-car encounters the liquid, the driver - whom I shall call Mr Cooper - loses control and a very nasty accident happens, resulting in several deaths.
Cooper survives, however.
Is he jailed ? Prosecuted ? Arrested, even ?
No. Instead, he lives on, a free man "without a (legal) stain on his character". As Pat Rabbitte once asked, though, is he happy ?
Many people consider this to be outrageous. Four years later, some - and not just the predictably ignorant or intemperate - still mutter about how "the crook got away with it" (and believe it).
Now, unless you are new here, you will not be surprised to learn that my natural inclination is to resist such talk. I will ask to know which crime the unfortunate Cooper is supposed to have committed, why his broken tail-light or out-of-date driving licence had anything to do with the tragedy, even though they were criminal offences - albeit very minor - and so on.
My guess is that, even if you did not "buy" similar arguments already made by me in this series, you might see some value in them in the context of the hypothetical Mr Cooper.
It's an interesting exercise to discuss - as I have done with some people - why "the Coopers" are likely to get more sympathy (and, in my view, more justice) than "the bankers". Let us not detain ourselves with that discussion now. (We can return to it if there is a desire to do so).
However, in this article, I am going to explore the other side of that argument.
Let's go back to Cooper, and make the picture painted of him a little less straightforward, and thus, arguably, more realistic.
Breathalysed at the scene, he tested positive and while the subsequent blood test showed the alcohol in his blood was well below illegal levels, it also showed traces of psychotropic substances. At the time, however, the law did not specifically make it a criminal offence to drive in this condition.
Police investigation also revealed that Cooper's vehicle had at least two tyres marginally "bald", and that he had almost certainly been both driving too fast for the conditions and, worse, had been doing so with a telephone clamped to an ear with one hand.
All that said, the police had no doubt that none of these circumstances contributed to the tragedy, in which Cooper lost not only his only two children but several close friends who happened to be on the road at the unfortunate time. Even if Cooper's vehicle had been in perfect condition, even if he had had no alcohol or other intoxicants in his blood, had had his licence up to date, and had been driving with perfect care and attention, the people would have all died anyway.
Despite these circumstances, should the police charge Cooper with DDCD ("dangerous driving causing death") or less serious offences under the Road Traffic Acts because, otherwise, he will "get away with it" ?
Am I alone in wondering how a man involved in such a horrific scenario will ever get over it ? To me, the question of him getting away with it is out of place.
I would like to hear from those with a contrary view.
(We are not going to detain ourselves at this point with exploration of the culpability of Lehman Brothers, the haulage firm which owned the oil-tanker - imagine that ! - or of any other dei ex this particular machina. But don't forget the disclaimer above.)
Monday, December 19, 2011 at 07:00AM "Engineering The Financial Crisis" by Jeffrey Friedman & Wladimir Kraus, University of Pennsylvania Press. Available from Marston Book Services, 160 Milton Park, Abingdon, Oxon, OX14 4SD, England / direct.orders@marston.co.uk. Price £29.50
This is a superb book, which deserves to be read by anyone who is serious about trying to understand how the Banking Crisis happened.
It has insights to offer on more general topics as well. These relate inter alia to the (alleged) delusions of the economics profession, the futility of some common expectations of democratic policy-making, and even to the limitations of human capacity to manage the complex systems that now dominate our lives. We think we understand these systems because it is we (or people like us) who constructed them, but even the most sophisticated of us are sometimes caught out.
A long time ago, the American wit H.L.Mencken observed
for every complex problem there is an answer that is clear, simple, and wrong.
The response of commentators, wherever located, to the Banking Crisis illustrate this quite well. The standard narrative (hereinafter "TSN"), not just in Ireland, is that what happened in 2008 followed years of reckless behaviour accompanied - indeed encouraged - by inflated salaries and ridiculous "bonus" payments to bankers. When the inevitable "feco-ventilatory intersection event" occurred, these same bankers then turned around and expected to be rescued from the consequences of their folly.
As Friedman & Kraus point out
... [these views have] immediate and important consequences. The informed public's impressions of the crisis are based in part on journalists' and scholars' hasty pronouncements. These impressions have now hardened into convictions. Political movements of the right and the left are already acting upon dogmas about the crisis that have little or no basis in fact, and policy changes have been made on the basis of these dogmas.
They go on to pick apart systematically the most popular U.S. explanations for the Crisis - which overlap with the most popular in Ireland, too - test them against the facts, and, one by one, discard them as unsatisfactory. (The authors might put it more strongly than that).
For example, they show that, as indeed in Ireland, the banks that failed most disastrously were also the ones led by men whose personal shareholdings were highest. This is counter-intuitive, as well as inconsistent with TSN.
They also show, in what they appear to regard as their most controversial finding, that the banks consistently chose security over high returns. This, too, is inconsistent with TSN, which takes it as axiomatic that "moral hazard" wreaked havoc by encouraging executives to take excessive risks, since it was (supposedly) a "tails I win, heads you lose" situation.
The book authors go on to propound their own explanation, which could be briefly summarised as
it was the Basel rules wot done it.
That is their précis, not mine. (The wording is not theirs, though).
And, more fundamentally,
the crisis was caused by ignorance on all sides.
That ignorance was not necessarily attributable to incompetence or similar faults. Nor was it otherwise culpable: it was a consequence, possibly not completely avoidable, of the complexity of the systems which had to be understood, and managed. Friedman & Kraus describe it as "radical ignorance".
In doing so, they "take a pop" - one of several, mainly at him, but at the economics community generally - at Joe Stiglitz, the Nobel laureate:
Essentially, his solution to this problem is consistently to downplay the possibility of human error - that is, to deny that human beings (or at least uncorrupt human beings such as himself) are fallible. ...
Simply turning over all power to a Nobel laureate economist such as Stiglitz is no answer. There are many Nobel laureate economists, and they quite frequently disagree with one another. Which one of them should be the economist-king who will ensure that regulators do not make even worse mistakes next time ?
...If economists are our most important advisers, but their world-views have no place for genuine human error, we are in deep trouble
While the book is about only the U.S. dimension of the crisis - the authors say that all the data available there is not available for Europe or elsewhere - I believe that the basic analysis is accurate for Ireland as well.
What we have (or had) in common was an unquestioning belief that property values could never fall significantly. While I was previously aware of this fateful delusion, this book has brought home to me more than before the extent to which the Basel rules not only sanctified it, but incentivised banks to become more property-focussed.
In view of where we are now, the fact that the same conventions, in effect, also encouraged banks to over-lend to badly-run sovereign states is noteworthy as well.
Remembering that our own Nyberg report laid so much emphasis on the role of "group-think", the book’s observations on what it describes as "homogenisation" as a necessary effect of regulation are thought-provoking.
Another insight which merits attention, and helps to explain why "the bail-out keeps clocking up the billions", is the inappropriateness of the term "cushion" to describe minimum capital standards for banks. As the authors say, "hard-floor" would be a more accurate short-hand: as soon as a bank hits that level, those in control are in imminent peril of losing that control. They are naturally, and this is the intention, impelled to either raise fresh capital or to shrink loan-books.
That looks fine in theory, and may be considered to work well for a crisis confined to a single bank. As we have found, it does not work well in circumstances when there is a system-wide, and international, problem. In that situation, it is illusory to suggest that borrowers can repay quickly (or perhaps at all), and this will be so well-known that the normal suppliers of capital will not re-capitalise lenders.
In another finding which TSN ignores, Friedman & Kraus point out that
even the commercial banks that actually became insolvent had significantly higher regulatory capital levels than required by law
It is difficult to quarrel with their observation on that, viz.
This suggests that the chief cause of their insolvency was not (as a rule) deliberate risk taking but ... risk taking in which the bankers were ignorant of the true level of risk
I do not agree with every judgement of the authors. For example, contrary to their view, not every economist - and none of those who taught and still teach me - believes that any economist has precisely modelled reality. Also, while generally correct as to it having a major direct role in causation, their implicit view that remuneration models were of no relevance at all is one that I am not yet prepared to accept. As Steve Randy Waldman remarked recently on Twitter:
to the frustration of social scientists everywhere, a thing can be an important factor yet neither a necessary or sufficient cause...
Nevertheless I am grateful to them for their scholarship, and for their clear presentation of it, to which I cannot do adequate justice in a short review.
I heartily commend this book.
Monday, September 5, 2011 at 09:25AM Mary Harney, for good or ill one of the most influential figures in Ireland's political life over the last 30 years, said in a 2001 speech which is still debated
As Irish people our relationships with the United States and the European Union are complex. Geographically we are closer to Berlin than Boston. Spiritually we are probably a lot closer to Boston than Berlin.Now, I offer you more grist to that particular mill.
In the latest entertaining (but, um, scatological) article by Michael Lewis for Vanity Fair entitled as above, our old friend gives us much interesting detail on cultural differences. Read the whole thing; there is more in it than I can possibly précis for you. However, partly but not entirely because of my current series of posts on a related theme, I found this observation especially interesting:
The American bond traders may have sunk their firms by turning a blind eye to the risks in the subprime-bond market, but they made a fortune for themselves in the bargain and have for the most part never been called to account. They were paid to put their firms in jeopardy, and so it is hard to know whether they did it intentionally or not. The German bond traders, on the other hand, had been paid roughly $100,000 a year, with, at most, another $50,000 bonus. In general, German bankers were paid peanuts to run the risk that sank their banks—which suggests they really didn’t know what they were doing.
Reference to $150k p.a. as "peanuts" may be offensive to some, but in this context, is not hyperbolic: some American traders were paid millions, to sell what turned out to be "toxic" products, and for which in Lewis' telling, the less well-paid German fund-managers were actually the "ultimate patsies". He goes on:
But—and here is the strange thing—unlike their American counterparts, they are being treated by the German public as crooks. The former C.E.O. of IKB, Stefan Ortseifen*, received a 10-month suspended sentence and has been asked by the bank to return his salary: eight hundred and five thousand euros.
The emphasis is the author's, who thereby reminds us of American financial entrepreneurs who have made more than $805 million from similar activities.
In summary, in "Boston" people made millions by selling toxic stuff to relatively underpaid, naive, people in "Berlin". The latter, arguably victims of a kind, are the ones threatened with jail. In Ireland, my impression is that those doing most of the similar threatening tend to be those on the "Boston" side of the debate.
*Mr Ortseifen was charged and convicted, not of "losing billions" (though his firm, Lewis says, did lose more than $15bn under his leadership), but for allegedly making a false statement to the market. The conviction looks rather unsafe to me (for whatever that is worth), and I understand that it is under appeal.
Tuesday, May 10, 2011 at 05:28PM In Ireland, female employees who are pregnant are entitled to 42 weeks maternity leave (26 weeks of which are compulsory). The timing is at the employee's option, but at least two weeks must be before the birth, and four weeks after. This applies to all categories of employees, whether permanent or temporary, up to and including the chief executive officer.
Recently, leading Dublin solicitors William Fry tell me, an employer sought to engage someone on a temporary contract basis in order to do the work of an employee taking such leave. A candidate was selected, who, like all candidates, had been informed of the reason for the employment, and had explicitly confirmed that she envisaged no difficulty in working for the required period of 42 weeks.
On being offered the position, however, she disclosed that she was herself 18 weeks' pregnant. Note that she was already within the period that could form part of her maternity leave, so that after one day's work she could legally demand to be given leave.
The job offer was withdrawn. The offeree complained to The Equality Tribunal, following which an Equality Officer, determined that she had been the victim of illegal discrimination on the grounds of sex was entitled to compensation of €12,697, the equivalent of approximately 18 weeks' pay at the Average Industrial Wage.
A fuller account is here. A hat-tip for informing me via Twitter of this story goes to Rossa McMahon.
Fergus O'Rourke
Monday, May 2, 2011 at 05:48PM My view on emigration is, understandably, shaped by my experience.
I was born in Canada, as was my eldest brother (we have joint citizenship).Of the nine children produced by my four grandparents, not one spent their entire working life in the State, and three are permanently resident abroad.Of my seven siblings, only one has not lived and worked abroad, and two still do.
I have 34 first cousins living, of whom 25 were born in Ireland. Nineteen now live in Ireland, of whom three have returned after being located elsewhere.
I have three children. One lives in Dublin (at least three hours travelling time away). The other two live abroad.
I have nine nephews/nieces: four live abroad.
To sum all this up: Emigration has always been part of the story of my family as I have known it.
It's not exactly that "it's no big deal", as it were; it is more a case that this is Life - if your desires, plans, ambitions, relationships need you to live a long way away from where you grew up, you do it. You do not wring your hands, and wish that it could be otherwise, and neither do those whom you are leaving behind. There is some pain in separation, but it's not "the end of the world."
Of course, it is very important to this mind-set that separation, albeit it may be prolonged over years, is not seen as permanent. For many Irish families, though not mine, the experience of emigration meant the departure of family members who were never seen or heard from again.
Next, I hope to address the topic of emigration in the context of Ireland's current circumstances in 2011.
Fergus O'Rourke
Sunday, May 1, 2011 at 11:22AM In Ireland, "emigration" is pretty universally regarded as A Bad Thing. (Attitudes to immigration are more ambivalent).
This attitude is generally explained in terms of the 19th century experience. Following the catastrophic "Great Famine" in the mid-1840s, during which a million died - the pre-Famine population was about 8 million - millions left the country. At its lowest point, the island's inhabitants numbered about 4 million, and the population remains below 6 million.
To put some context on this, the population of the neighbouring island of Great Britain increased from 19 million to nearly 60 million over the same period, despite wars and not insignificant emigration of its own to "the Colonies"(yes - net immigration played a part too). Europe, despite The Holocaust and similar horrors, also trebled in population.
For me, someone who has lived in Ireland for over half a century, and thought that he was historically aware, just recalling these bare facts has taken me considerably aback. It is probably fair to say that for anyone attempting to understand the Irish, ignoring the Famine is as crass as ignoring the Holocaust when considering the Israelis.
Behind the Irish statistics lie a multitude of family separations, destruction of communities, economic stagnation and, generally, a "world of hurt".
Insofar as there is a collectively shared narrative of what emigration means, it is still stuck in that historical recollection.
I trust that it is clear that I have considerable sympathy for that on a sentimental level. However, although there is still some reality in it, I dissent from the national consensus which accepts it as a rational approach to the present. I will be elaborating here on this view of mine over the next while.
Fergus O'Rourke
Wednesday, April 27, 2011 at 12:44PM ...may not be so nonsensical after all*.
Via "The Browser", I learn of an amazing historical study entitled "Persecution Perpetuated: Medieval Origins of Anti-Semitic Violence in Nazi Germany" by Nico Voigtländer and Hans-Joachim Voth (Economists are everywhere).
The abstract reads (paragraphing and emphasis added by me):
How persistent are cultural traits ?
This paper uses data on anti-Semitism in Germany and finds continuity at the local level over more than half a millennium. When the Black Death hit Europe in 1348-50, killing between one third and one half of the population, its cause was unknown. Many contemporaries blamed the Jews. Cities all over Germany witnessed mass killings of their Jewish population. At the same time, numerous Jewish communities were spared these horrors.
We use plague pogroms as an indicator for medieval anti-Semitism. Pogroms during the Black Death are a strong and robust predictor of violence against Jews in the 1920s, and of votes for the Nazi Party.
In addition, cities that saw medieval anti-Semitic violence also had higher deportation rates for Jews after 1933, were more likely to see synagogues damaged or destroyed in the Night of Broken Glass in 1938, and their inhabitants wrote more anti-Jewish letters to the editor of the Nazi newspaper Der Stürmer.
Wow !
*The reference will need no explanation for most Irish, but I have a few readers who are not so blessed. Next Sunday, it will in fact be 842 years since The Invasion led by Richard de Clare - better known as "Strongbow" - began our history as the Most Oppressed People Ever ("MOPE"). Allegedly.
Monday, April 25, 2011 at 11:18AM I am prompted to write this by a recent post by Professor Eoin O'Dell, for whom I have considerable respect.
Notwithstanding that respect, we have many disagreements. For our latest, see the comment I made to the said recent post.
The issue is linked to the on-going discussion about how we in Ireland got ourselves into our current economic mess. Many commentators believe that a)there are identifiable culprits (many of whom are criminally liable), and b)all are members of the property developer, political, higher civil servant, financial regulator, banker or estate agent classes. (I propose to restrict myself in this post to the domestic targets - I may discuss the foreign scapegoats another time). I have even heard bankers, property developers and estate agents express the view that their own excesses should have been prevented by one or more of the other groups.
The link I see is this: both narratives posit that Irish adults cannot discover value or its absence without top-down guidance.
Supposedly, property buyers cannot divine, unassisted, that properties selling at 30 times annual rental value - the multiple reached much crazier levels in the supposedly more sophisticated areas - are over-priced and/or that there are times in every market when the market price is a signal not to buy. Similarly, clients of lawyers are allegedly incapable of understanding that a charge of €300 per hour to handle a straightforward probate matter is an offer which should be refused.
It is not that I don't see a real problem. There is a thorough-going failure of society here. Even property investors with millions at stake and bankers with billions at risk, to my personal knowledge, still resist the notion, ignorance of which has cost all of us so dear, that capital values of property relate to other variables such as market rent levels and trends.
And, though it is sometimes exaggerated, there is considerable reluctance among end-users of legal services - even ones who are otherwise sophisticated - to adopt a rational approach to selecting and paying their lawyers.
I suppose that another variety of the same thing is the commonplace reaction to reports that petrol station A is charging 10 cents per litre less than petrol station B: "B is a price-gouger", it will be said. The next day, or sooner, the same people will say of a report that stations C and D charge exactly the same price that it is clear evidence of illegal collusion.
Along the same lines, one constantly encounters people who bitterly complain that Tesco will not reduce their prices - all of them - to the same level as Lidl or Aldi, but who will not actually switch their custom from the former to the latter. (Yes, I know that for some, it is not an available option. And, one must exclude those who will not patronise Aldi or Lidl because they are "full of immigrants".)
How to characterise this ? "Irrational" seems too mild. Is "juvenile" too harsh ?
Whatever, it seems to me that the answer cannot be for government to attempt to put "crutches" in place so that adults are protected from their refusal/failure to use their brains when buying legal or financial services. Apart from anything else, recent experience has confirmed that the people who will be implementing such measures are no better at using their brains than the rest of us.
(None of that means that I oppose all regulation of the financial or legal services markets, and I do not.)Monday, March 8, 2010 at 10:31AM A common meme of discussion on politics and politicians in Ireland (and elsewhere) is that politicians are "out of touch" with the feelings, concerns and even the requirements of the voters to whom they are responsible and accountable.
Maybe they are - some of them certainly are - but it seems to me that it is unlikely that, as a class, politicians are more out of touch than anyone else. To the contrary, in fact.
Since so much of our discussion of these matters takes place in the mass media, almost always in contexts chosen and moderated by journalists, and in which journalists are often the only interlocutors, it is inevitable that the voters to whom reference is made in those discussions are not the generality of voters but those voters with whom the journalistic class identify.
I do not intend to suggest that journalists as a class identify solely with a narrow group rather than with the generality. They do tend to so identify, however, and I do intend to insinuate that journalists, and the "lay" people with whom they like to discuss current affairs, may well be more out of touch than politicians are.
As always, I may well be wrong.
But I ask you to consider this:
- Elected politicians owe their jobs to being in touch
- Out of touch politicians lose their jobs
- In Ireland at least, journalists have a dreadful record when it comes to predicting election results
- Journalists who are out of touch with the general electorate do not lose their jobs
It is not guaranteed to be so, but I suggest that people whose future depends on getting public opinion right are more likely to succeed in that than people whose futures are not so dependent.
Friday, January 15, 2010 at 07:17AM Actually, I really do not know whether he was or not, although I would not have said that pretence to virtue was one of the things that distinguished his public persona as I remember it. However, my purpose in this note is not to holistically assess the man or his life, but to focus on two episodes which are often said to illustrate his alleged hypocrisy.
The first of these was what has come to be regarded as his "infamous" broadcast soon after taking office as Taoiseach for the first time. In that, he correctly (in my view) diagnosed a national economic emergency and delivered a stirring call to action, including the phrase "we must tighten our belts". It emerged a decade or so later that he did nothing of the kind himself, and I have lost count of the number of times that this has been wheeled out as an example of Haughey's alleged hypocrisy.
Well, of course, it wasn't an attractive way to behave, and arguably he had a duty to set a good example, but hypocritical it wasn't, I suggest. (And even if it was, I would argue that it was necessary: was Haughey supposed to neglect his undoubted duty to inform and admonish the citizenry just because he had a thrift problem himself ?)
The second putative example of Haughey hypocrisy is said, by Fintan O'Toole and others, to have been his resistance to reform to Irish marriage laws and specifically his opposition to the 1986 proposal to lift the constitutional ban on divorce. This, the argument goes, was blatantly at odds with his cavalier attitude to his own marriage vows.
No, it has never made sense to me. I do not see that opposition to divorce implies a pretence to virtue in sexual matters.
Besides that, Haughey was not totally free to indulge his personal views in arriving at political positions as leader of his party. Even if he was personally in favour of removing the divorce ban - I don't know if he was - he had not only a duty to represent his party but a vital need not to be seen to betray their values for merely personal reasons.
Yes, if his conscience dictated something, he could be said to be morally obliged (i.e. on pain of hypocrisy) to pursue it, even at the cost of his position, but there is no sign that it was issue of conscience for Haughey, any more than it was for most voters on both sides of the issue.
Thursday, January 14, 2010 at 11:23AM I have been thinking about hypocrites and hypocrisy and whether they are useful terms any more. My conclusion is that they are; read on if you wish to learn why.
Hypocrisy has no friends. Hypocrites - i.e. the people as distinct from the thing - might be a little more popular but it's a "in spite of" rather than "because of" thing.
My own tolerance for hypocrisy is possibly higher than average, but that tolerance has limits (and maybe it's hypocritical of me to even claim to have any !): I suspect that we humans may be "hard-wired" to abhor the phenomenon.
The dictionary definition of hypocrisy is "the pretence of virtue" but in common discourse, this meaning has been abandoned and the word has, unfortunately I think, come to have two possible meanings, both very similar though subtly distinct from each other. The first refers to not practising what one preaches. The other is holding others to standards which we cannot uphold ourselves.
Using "hypocrisy" as having either of these meanings leads to a similar problem: the word loses its power, because as far as I am aware there is no human being who is not guilty to a greater or lesser extent. No-one is able to conform perfectly to what one preaches, or to always uphold the standards one wishes to be generally followed. I am certainly guilty myself, and I have no doubt that both the Pope and the Dali Lama would also acknowledge that they are not "without sin".
Does this mean that logic demands that all aspirations to do good and to avoid doing ill be eschewed ? Does it even mean that no-one should criticise or hold to account those who have failed to "keep to the rules" because to do so is necessarily hypocritical ?
I say "no". I also say that we should retain the dictionary definition and reserve the label of "hypocrite" for those who pretend to a virtue that they do not in fact possess.
Of course, I do accept that very often those who hold others to standards that they cannot, or will not, observe themselves are in effect pretending an unmerited virtue, and are therefore hypocrites. (Some especially nasty people do this, though, without any attempt to pretend consistency). Similarly, continuously and with great sanctimony preaching what one fails to practise will often be associated with a pretence to possession of unmerited virtue.
However, this is not as common among the usual targets for accusations of hypocrisy as many younger people (influenced by some whited sepulchres given vent in the mass media) believe.
I tend to believe that humility or the Socratic principle (the wise man is conscious of his vast ignorance) in ethical matters is the best course. For all its faults, Christianity's official line is still that "we are all sinners" and I respect it hugely for that, no matter how many of its adherents or prelates often forget it in practice.
Fergus O'Rourke
Having - yes, belatedly - checked on the accepted meaning of "whited sepulchre", I find that it is the worst kind of "hypocrite", a person full of evil but apparently perfect on the outside. I did not really have that meaning in mind. What I have in mind is the kind of shrill outrage of those who are not evil or especially hypocritical themselves - that would be too hard on them - but who, with imperfectly suppressed relish, sternly "shovel" enormous moral indignation on people who have fallen from grace e.g. dismissed bank executives, convicted bouncers, dead bishops, disgraced politicians.
This behaviour makes my flesh crawl, not just because of the lack of a proper humility but because it is usually a case of "kicking the man when he is down".
Wednesday, May 27, 2009 at 07:47AM In a note written in 2006 (you'll find it here) I confidently asserted
No-one in Ireland goes to prison because they cannot pay a debt
Though correct as to the position in law, arguably I was wrong because of the failure to observe due process by some judges.
Earlier this year, it was reported that the relevant legislation was to be challenged on constitutional grounds, with the Irish Human Rights Commission supporting the challenge.
A decision reported in "The Irish Times" this morning (See follow-up note dated 26 October 2013 below) suggests that this may not be necessary.
The report is, as is normal, written for the general audience and is not necessarily complete as to what lawyers would regard as the relevant details, or the detailed ratio decidendi. (I note that Eoin O'Dell has recently repeated his criticism of the delay in publishing the full judgments of the Irish superior courts.) That said, O'Neill J.'s decision as reported seems to me to admirably set out the standards which ought to apply when a creditor applies to a court to have someone imprisoned for failure to pay.
(As an aside: why are so many of the cases which get publicity initiated by credit unions ? Does it reflect sub-normal attention to public relations ?)
Note that a failure to pay by itself is not a ground for such an application: the failure must be to comply with a previous order by the court that the debtor pay a specific amount. Now, it may not be generally realised, but in Ireland, when such a failure occurs, the creditor may realistically have very little legal option but to apply for such an order, even if putting the debtor in prison is of no use, and indeed may be counter-productive. The creditor may not be unreasonable in believing that to apply is the only way to get the debtor's attention.
However, this is by no means always the explanation for the application, or if it is, something is going wrong on a regular basis, because yesterday's case, as well as the case referenced here (and here), all appear to be cases of "can't pay" rather than "won't pay". In all of the latter cases, and, I suspect, in virtually all cases of this kind, the debtor has failed to turn up in court, or, as it is often censoriously expressed, has ignored the summons to attend.
Judges are invariably wont to take umbrage at this, and my sympathy for debtors notwithstanding, I tend to agree with this, at least up to a point. I cannot agree, though, that, as has happened, it is appropriate to sentence someone - in absentia - to prison for up to three months because the judge is annoyed with failure to turn up.
It appears likely, as well, that creditors are either encouraging judges to do this, or failing to suggest more suitable alternatives such as adjournments.
Presumably encouraged by Conor Devally S.C., the debtor's counsel, O'Neill J. has now made such inappropriate happenings much more unlikely, if not completely impossible, by interpreting section 6 of The Enforcement of Court Orders Act,1940 in a new way.
The said Section 6 reads as follows
- ( a ) where a debtor is liable, by virtue of an instalment order, to pay a debt and costs either in one payment or by instalments and such debtor fails to make such payment or fails to pay any one or more of such instalments accruing due while such order is in force at the time or times appointed in that behalf by such order, the creditor may, at any time while such order is in force or within twelve months after it has ceased to be in force, apply to a Justice of the District Court for the arrest and imprisonment of such debtor;
- (b) on the hearing of an application under the next preceding paragraph of this section, the Justice may, if he so thinks proper but subject to the next following paragraph of this section, order the arrest and imprisonment of the debtor for any period not exceeding three months, and thereupon the debtor shall be arrested and imprisoned accordingly;
- ( c ) the Justice shall not order the arrest and imprisonment of the debtor under the next preceding paragraph of this section if the debtor (if he appears) shows, to the satisfaction of such Justice, that his failure to pay was due neither to his wilful refusal nor to his culpable neglect;
- ( d ) on the hearing of an application under paragraph (a) of this section, the Justice, if he so thinks proper, may, in lieu of ordering the arrest and imprisonment of the debtor, treat such application as an application under the next preceding section of this Act for the variation of the said instalment order and thereupon the said next preceding section shall apply as if such application were an application thereunder;
O'Neill J. appears to have decided that section 6(c) may not be interpreted so as to place the onus on the debtor to satisfy the court as to his or her inability, as has been the practice - in accordance, to be fair, with the most obvious meaning of the words - but that it must be shown beyond reasonable doubt that s/he is either wilfully refusing, or is culpably neglecting, to pay. This, the standard of proof in criminal cases, is appropriate because the criminal sanction of imprisonment is involved.
Fergus O'Rourke
Sunday, November 30, 2008 at 08:47PM
Despite the fact that we agreed on how to vote on the Lisbon Treaty, there are not many things that I find attractive in Declan Ganley.
The feature that I probably find least attractive is his political amateurism and his unsophisticated tendency, very reminiscent of the British euro-sceptics, to see the "evil hand of Brussels" behind every question that he finds uncomfortable.
Some of his other unattractive debating faults can be seen at work here.
However, it is quite clear that "they" are indeed out to get him. Having, as they see it, single-handedly sabotaged "the project" by his intervention in the Lisbon referendum, and having managed, as they see it, to get the EU's most euro-philic electorate (see statistics quoted here) to deliver a perverse decision, the forces ranged on the other side of that argument are naturally keen to weaken Ganley before the re-run of the referendum which they plan to have next year.
On last Thursday night,"Prime Time",Ireland's leading television current affairs programme, broadcast what struck me as more or less a 40 minute hatchet-job.
It was not completely unfair to Ganley. It did
However, the programme's most interesting sections concerned Mr Ganley's activities in Latvia,Russia, Bulgaria, Albania, and the U.S..
Latvia
The chief focus of this was what seems to have been an exaggeration by Ganley of his influence as a very young man on a junior minister in the first post-soviet government. It was careful,though, to allow an "expert" to explain to us that the area of Riga in which Ganley worked was largely controlled by gangsters and illicit traders.
What was the point of this ?
Russia
The only point of this section seems to have been to note that Ganley held his Russian forestry venture through a Cypriot company and to give time for another "expert" to dilate on the lack of transparency associated with use of Cyprus-registered companies and how the Russian gangster class were very fond of using Cyprus.
So, if you use a Cypriot company, you are ipso facto a gangster, right ? I don't think so, but I would be surprised if most viewers did not take that impression.
Bulgaria
For some reason, all we heard about this was that Ganley made a lot of money from the sale of his cable-television investment in Bulgaria. No detail whatsoever was given.
Albania
This was the most sensationalistic section of the programme.
We were shown the body of a man lying on a deserted roadway. The body is of someone who worked for Ganley's company at one time many years ago. We are told that shortly before being murdered just recently, this man had started to reveal secrets of criminal activity.
Ganley denies ever knowing him, but eventually concedes that he may have been connected. So what ? We are not told.
What we are told is that Ganley was involved in Albania's "privatisation voucher" scheme, and we hear a very old man tell us at some length, through an interpreter, how he lost all his life's savings through the collapse of the scheme. How Ganley was alleged to be culpable is not explained. One of Ganley's American associates says that the Albanian government aborted the scheme, which cannot be blamed on Ganley, but I suspect that the significance of this will have escaped the television audience, for the most part. Was this accidental ?
United States
We get a fairly detailed account of an alleged attempt by Ganley to acquire by stealth a mobile-phone operator's licence in Iraq. The response of Ganley and his associates suggests that this was a very murky episode one way or another. Which way is impossible to judge. Why the full story could not be summarised for us in comprehensible way may be a story in itself, but the way it is presented is not to Ganley's advantage.
SIPO
SIPO is the Irish government body which regulates the spending of money for political purposes.
It was suggested on the programme that Ganley had failed to "engage" with SIPO, which he denied, and quotation was made from a leaked letter, allegedly on its way to Ganley from SIPO, which gave him an ultimatum. We were not shown the letter; it does not appear that Ganley was, either. (And I gather from a not-particularly-reliable source that it has been reported that he still has not received it).
Summary
This was a shoddy piece of biassed reporting. I would like to think that we won't get any more of this, but I suspect that I will be disappointed.
However, I am not so certain that the cumulative effect of this kind of story will be as intended.
