Tuesday, 23 November 2010

Haircuts All Round?

A GUBU Day if ever there was one, I'd say : little Ireland threatens to crash the Euro simply by not rolling over immediately to the idea that they should all go back to potato farming and emigration. It's that pesky democracy thing getting in the way of sensible business decisions again. Cowan is surely done for, his reputation as well as career in tatters, surely now seen as little more than a pet Quisling of the IMF/ECB.

Fintan O'Toole is calling for a caretaker administrative coalition and a Italian 'Mani Pulite' ('Clean Hands') style re-founding of the State. Remarkably, he is calling for this to kick off with a national-popular show of strength based round the Trades Unions:

".... the people of Donegal South West have to refuse to vote for Fianna Fáil – at all. They can deliver a clear message that this Government has no mandate to conclude any deal.

.... hundreds of thousands of people have to get out on the streets for the Irish Congress of Trade Unions demonstration on Saturday. Forget what you think about the unions – this is the one chance citizens have to demand a choice. Whether you agree with Ictu’s alternative plan or not, the idea that there should be a coherent alternative is crucial to the survival of our democracy. Without it, an election will be an empty ritual.

.... I intend to put up on my website (fintanotoole.ie) by the end of the week a list of 10 basic demands for changing our political culture and system.

If people agree, they will be able to put their names to the demands, which include a €100,000 salary cap for public officials, a change in the electoral system, a shrinking and overhaul of the Dáil, and measures to kill the toxic three Cs: clientelism, cronyism and corruption.

What matters most is that we cease to be an invisible people. That our government is irrelevant is their fault.

That the people are irrelevant is ours.

Sovereignty belongs, not to the State, or the government, but to the people. We have outsourced it for too long to an incompetent, amoral and self-serving elite. Now we face the starkest of choices: use it or lose it." (my emphasis-CMcM)

Now, see these stirring words in the light of the news from Moody's, the rating agency; The FT is reporting that they now think that some European infrastructure and utilities companies are more creditworthy than their parent States because they are less likely to default.

The 'rescue package' being forced on Ireland is one that brings the country to the very brink of default - and much of the money is actually simply passing through the hands of the Irish State and the (predominantly state-owned) Irish banks to flow back to their foreign creditors in London and Frankfurt. Much of the discussion in the British left blogosphere - even at sensible places like Duncan's and Chris'- seems to ignore this dimension. A lot of that £7bn Osborne is coughing up 'for a neighbour in need' is actually going to end up in RBS and Lloyds.

&, yes, just in case you think I'm being simple minded here, I do understand money circulates: but it circulates under very precisely defined relationships of power- and the money is being provided to tighten those relationships in a way that erodes the democratic freedoms of the Irish people and maintain, at all costs, the capital of the European and City bond markets that made so many dodgy investments across the Irish Sea.

Whatever happens - poverty, mass emigration, the destruction of a State - these City Institutions must never, ever have a 'haircut' as their slang has it. (A haircut being the prospect of them losing money.) Whole economies must crash and burn before that happens.

I say: it's time for the Irish people - the people of all Europe - to pick up the scissors and advance towards the barbers chair. But not to ask if the bankers need 'anything for the weekend': democracy or bankocracy is the question.

`Addendum:& the inevitable xtranormal comment

The Death of Fianna Fail in Two Quotes and a Headline

John Naughton reminds us of Eamon De Valera rebuking the Brits for criticising Ireland's neutrality in WW2:

"Mr. Churchill is justly proud of his nation’s perseverance against heavy odds. But we in this island are still prouder of our people’s perseverance for freedom through all the centuries. We, of our time, have played our part in the perseverance, and we have pledged our selves to the dead generations who have preserved intact for us this glorious heritage, that we, too, will strive to be faithful to the end, and pass on this tradition unblemished."

From the Guardian at 2.45pm:

"Irish bank shares fell again today 24 hours after the government announced restructuring was on the way and the governor of the central bank confirming the Irish banks are "for sale".

Shares in 36%-state owned Bank of Ireland fell 23% to 30c giving it a market capitalisation of around €1.77bn (£1.5bn), half what it was a month ago. Allied Irish Banks, whose government ownership will rise to around 95% after a planned rights issue, traded down 13% to 35c.

Irish Life & Permanent, the only Irish-owned bank to so far not have received any state aid, fell 4.5% to €0.80, following a 27% drop yesterday.

"The market is on its way to deciding there is no equity left in the banks," said Gary McCarthy, head of Quest, the quantitative research unit of broker Collins Stewart."

So, we have a government who announces it wants to sell its banks -and the market immediately tells them that they're worth sod all.

Friday, 19 November 2010

Why Academies (or Any School) Shouldn't Control Their Own Admissions

Here's the lead story from the front page of my local free sheet newspaper:

"A disabled 11-year-old girl has been rejected by an academy school because she poses a “health and safety risk” to other children.

Idayah Miller, from Norbury, was told she could not go to the elite Harris Academy in Crystal Palace because her wheelchair would restrict the movement of other children in the crowded corridors.

In a letter to her parents, headteacher Steve Kenning also said the little girl would suffer low self-esteem because her “academic ability is quite low” and Harris is “a high pressure, high performing academy” where she would struggle to keep up with her friends"

The school's primary admissions criteria seem to be based on a banding system structured by distance, although the precise nature of the banding test, and what proportions of clever/middling/less clever kids they take, is not very clear. 10% of places are reserved for those with a 'aptitude' for technology, the school's specialism. The admission of kids with Special Education Needs (SEN) is described as 'a concession', even though all schools are legally obliged to take a certain proportion of such children unless they can show good reason otherwise.

Plainly, this case would seem to be a decision which offends against the Disability Discrimination Act. But I'm aware of the perils of making legal judgements on specific cases based only on newspaper headlines, so I'll leave that one to the lawyers.

I want to ask a broader question about admissions. 'Banding' is, in certain defined circumstances, especially in big cities, a perfectly reasonable way of allocating school places. It just means you test them and then, assuming equal proportions of kids with different ability levels have applied to different schools, allocate them places which leave each school with a broadly similar entry cohort. It can be a way of attempting to slow down the drift back towards a covert form of the old Grammar/Secondary Modern divide which is so evident in so many inner city areas.

But doesn't this case illustrate that if you let individual schools do the banding that they'll just use it as means of covert selection and rejection of 'low ability' pupils? As someone comments in the local newspaper article - would the school have rejected Stephen Hawking if he was in a wheelchair?

Meet the Academy Sponsor: Cameron's favourite carpet fitter it would appear.

I'd quite like it if one of the more mainstream leftie blogs picked this up, so I'm going to link to Liberal Conspiracy, Hopi (who, like me, doesn't live that far away), TCF and Don Paskini in the hope of attracting more coverage of this case and the general issue.

Thursday, 18 November 2010

Every Picture Tells A Story

The green postbox tells you the picture has been taken in Ireland. We have the Guardian's word for it that the bloke on the left is the deputy director of the European department of the IMF. All in all, I think that bloke begging is going to have to get a bigger cup....

Let's be clear about what's going on today. A small country has attempted to take on the debts of a disproportionately sized banking sector and has been unable to support those debts. It is teetering on the edge of sovereign insolvency. That can't be allowed to happen as, by absorbing the debts of the Irish banks, the Republic finds itself owing huge amounts of money to the British and German banks, and to banks across Europe. Once all the arcane jargon of high finance is stripped away the basic reality is that Ireland cannot possibly pay this money back. It's gone. Kaput.

So the High Priests of European and now World finance are arriving to attempt to avert the crisis whereby rich institutions in rich countries might have to suffer losses. Expectations on this front are lowering: even the editorial in the FT is saying that the centre cannot hold and that its time for those institutions to bear a slice of the pain. But so will Ireland, so will Ireland....

Addendum, from the Irish Times:

SAD NEWS just in from Our Lady of the Eurozone Hospital: After a sudden worsening in her condition, the Irish Patient, formerly known as the Irish Republic, has been moved into intensive care and put on artificial ventilation. While a hospital spokesman, Jean-Claude Trichet, tried to sound upbeat, there is no prospect that the Patient will recover.

It will be remembered that, after a lengthy period of poverty following her acrimonious divorce from her English partner, in the 1990s Ireland succeeded in turning her life around, educating herself, and holding down a steady job. Although her increasingly riotous lifestyle over the last decade had raised some concerns, the Irish Patient’s fate was sealed by a botched emergency intervention on September 29th, 2008 followed by repeated misdiagnoses of the ensuing complications.

With the Irish Patient now clinically dead, her grieving European relatives face the melancholy task of deciding when to remove her from life support, and how to deal with the extraordinary debts she ran up in the last months of her life . . .

Thursday, 11 November 2010

On Watching Some Windows Getting Broken as a Family Group

Interesting times last night - not just at Millbank, but here at Chez McMenamin. Now, time was when Mrs. McM and I would have happily sat watching a few broken windows at Tory HQ on TV, chugged away at the Merlot and gleefully quoted Jim to each other ('If there's a lesson in life we should all learn is that students must never break windows unless they're members of the Bullingdon Club.').

We are both behind the students, both recall that sometimes - but only sometimes - riots do work and, lets be frank, we are both perfectly aware that there seemed to be almost as many camera operatives in Millbank as there were occupiers so the world was getting a rather skewed view of the demonstration. The violence was all a bit small scale to be truthful - not a Poll Tax Riot in miniature at all. We both have memories of being caught up in .....well, lets call them 'spots of disorder' in our youth and early adulthood: she still dines out on the Greenham fence she pulled down and we both have various memories of seeing bottles, bricks and fireworks being tossed around on various demos - and of running away, frightened, from police charges. So our reaction to the events was perhaps entirely predictable.

But what was different last night was the presence on the sofa of a young master McMenamin who is fourteen tomorrow. Now he is a well behaved boy with a lifetime's training in doing the decent thing and a default assumption that violence only really happens in video games, despite living in a not entirely salubrious part of South London. He knew the students were marching - and indeed rioting - for him. He was wide eyed with excitement as the glass window broke, cheering on the students as if they were his football team, just high on the apparent disorder.

His mother and I shifted in our seats uncomfortably, and started murmuring things like,

'...that lad with the wedge haircut has made a mistake not to have a scarf over his face, he'll be nicked before the end of the evening and probably chucked off his course as well...';
'...have we ever explained what kettling is?' ;
'..of course its important to have a spare battery for the mobile if you do get into a sticky situation, just so you can ring someone.."and
'...actually, it's really frightening when things kick off like that and you don't know how to get away from it..."

He calmed down and asked us what we really thought of the TV news pictures. I looked at his Mum and she looked at me. I cleared my throat to launch into some lengthy dull diatribe from half remembered EP Thompson on the long English tradition of 'negotiation by riot' when Mrs.McM quietly spoke up,

" I wouldn't want to smash windows, and I wouldn't want any of my family to do it...but I'm glad it has happened".

We went to our beds a family united on that thought.

Tuesday, 2 November 2010

QE2: Pass the Parcel Redux

Blimey: Mason has explained it in a way even I can understand. Hard to believe he was originally a musical academic.

My precis: basically the Western financial system remains sitting on a time bomb of unacknowledged (i.e. unwritten off) debt. Quantitative Easing is a potential path - actually, the only potential path - out of this. But with that comes the real possibility of other bad stuff. Not inflation - suddenly, that's not the Big Bad Wolf any more (well, not for the moment) - but stagflation and, as seems to be already starting, a currency war. Oh, and no one can explain why QE might work.

But QE isn't enough on its own:

"There needs to be a defibrillating moment where ... large amounts of bad debt are written off in the private sector - above all in the housing market. Then consumers suddenly get access to credit again and then the big cash mountains of the private sector get thrown into the economy in the form of investment.

But for that to happen somebody has to take losses who has not already taken them. That means the banks: they have to take the big hit on mortgages and commercial property they have refused to take; that in turn hits the government, which in the US and UK has "guaranteed the losses" on hundreds of billions of bad debt for the cost of a few tens of billions.....

On top of that, once the final cathartic moment is over, the central banks then have to get out of money printing in an orderly way, allowing quite a bit of inflation to avoid choking off the recovery. One way to do this would be to temporarily abandon inflation targeting - to say: we will keep printing money whatever happens to inflation, until growth reaches a set target and stays there. Bernanke has toyed with this, and it will be interesting to see if he keeps the idea alive.....

QE2 will buy time. But in that time the governments have to act at micro-level to restructure the finance system so that it starts working again."

I think he's saying its time for another round of pass the parcel: when the music stops, someone is going to have huge losses in their hands. Mason says it has to be the bankers if this QE thing is to work - but this government seems to want it to be everybody else.