Thursday, May 26, 2011

Enda vs Chuck

One of my guilty pleasures is watching the TV show Chuck. In the show, the main protagonist Chuck, a mild mannered tech support minion, becomes a prized NSA/CIA asset who fights international terrorism while still being home in time to play Halo and eat pizza with his best buddy Morgan. But the thing of interest to us is that every episode is called "Chuck vs the Something". I want to take a look at Enda Kenny and the things he is trying to tackle and see how they stack up.

Enda vs the EU/IMF

Election promises from both government parties were all about making bondholders pay, renegotiating the bailout interest rate and the infamous "Frankfort's way or Labour's way" statement from Eamon Gilmore. Since taking the reins, Enda has had a couple of meetings with the various EU and IMF representative but it looks like nothing has changed. The draft MOU that was published a few weeks ago is pretty much identical to the one that would have been expected from FF had they stayed in power. We're still tied to the high rates and the bondmarket is still well north of 10%.

Enda vs the Seanad

Another of the major election promises was political reform, spearheaded by the abolition of the Seanad. Now I've written at length about this topic so no need to rehash the arguments here. Now it looks as though it will be at least another year or two before any referendum is brought before the people to abolish the Seanad. I guess it has turned out to be a bit more complicated than Enda originally thought. He has also taken full advantage of is nominating powers to put some interesting people into the Seanad including Eamon Coughlan and Aideen Hayden, but really, did he have to stick Marie Louise O'Donnell in there? Maybe she's going to fill the Eoghan Harris role in the new Seanad line-up.

Enda vs the Separation of Powers

Speaking of nominations to the Seanad another interesting one is Martin McAleese, husband of the President. While I am sure that he will be a fine contributor to the Seanad, it does see to fly in the face of the concept of separation of powers. Surely the Presidency should be completely independent of the Oireachtas? The other odd decision of this type was the decision to merge the Departments of Defence and Justice under the one person. Again, while it is unlikely that there will be an armed coup any time soon in Ireland, I think that the principle of separating control of the two security forces of the state is not one that should be thrown away lightly.

Enda vs the Speech Writers

Finally there's The Speech. While watching Obama's introduction on Monday evening, it struck me that the turn of phrase in Enda's speech was quite good, even if it was delivered in a bit of an All Ireland winning captain's speech style. "Tá an athás orm an Obama seo a glacadh ar son foireann na hÉireann." Only when I noticed Obama busting himself laughing behind Enda that I twigged where the lines were coming from. I have to say I thought it was a great idea to recycle the victory night speech into an introduction and I don't believe for one minute that Enda didn't know what he, or his writer, had done. Good man for having the balls to follow through with it.

I may come back to this list a some point in the future. I kinda like the format!

Tuesday, May 17, 2011

Here comes the Queen

As a republican (small r) I have big problems with the concept of a hereditary head of state. Being lucky enough to be popped out of the right set of loins at the right time seems like a pretty bad way to determine who should be citizen number one. But at the same time, I agree with the concept of sovereignty of nation states, and what rules and regulations other countries use to appoint office holders is their own business. So in that spirit I have to welcome the arrival of Queen Elizabeth to Ireland in much the same way I do any other head of state - with much indifference.

What I can't do though, is ignore the huge security operation that has been in place around the city over the last week or so. As an employee of TCD, where the Queen is due to visit later this afternoon, I have spent two days flashing my ID card to get in and out of campus and subjected to bag searches by the Gardaí. Normally I'd get a bit civil libertyish about such things but when you see the reports of the large number of IEDs that have been discovered and defused in the last few days I can appreciate the precautions being taken. The worst thing that could happen would be for a serious incident to occur during the visit.

The Republican (large R) movement are, of course, out in force organising protests and apparently even flag burnings. While I respect their right to protest, the tactics often employed by these groups, involving violence and intimidation are not acceptable. If you live in a civilized society then there is a certain set of standards by which you must abide. And really if you are going to try to burn a flag in front of the world's media, maybe practice at home first to figure out how to do it. Hint - use an accellerant of some sort.

The one thing that I do agree with them on is the timing of the Queen's arrival. The anniversary of the Monaghan/Dublin bombings might not have been the smartest choice especially considering the ongoing belief in some quarters that the British intelligence agencies and/or the RUC were involved in the bombings.

Tuesday, May 10, 2011

Another thought on the Doom

Last night, watching Vincent Browne on TV and Twitter, a thought came to me about the financing problems that Morgan Kelly's article highlight. As outlined yesterday the theory goes that if we dump the banks back on the ECB and ditch the bailout that we immediately have to balance the books as we will have no credit. But is that true?

According to Kelly, in the run up to the bailout, the EU and the IMF had strongly different views as to how the bank debt should be treated. The IMF were all in favour of hair cuts for bank debts, the EU not so as the ECB would be the one taking the hair cut in the long run. In this discussion it also appears that the UK were generally on the IMF side with the US lined up alongside the EU.

The composition of the bailout fund is as follows: €22.5B from the IMF, €45B from the EU through EFSM and EFSF and €17.5B from our own funds (how this gets counted as part of the bailout I'm not really sure since it is already our money, probably borrowed on the market). I'm also not sure whether the roughly €4B in the bilateral loan from the UK is included in the EU funds but it probably isn't.

Now my proposition is that if we followed the Morgan Kelly route, would the UK and IMF money still be on the table? Obviously the EU would withdraw as the ECB would be left holding Irish bank debt but the other two seemed to indicate last November that pushing debts back on the private banks was the preferred route. Now Kelly is suggesting a complete ditching of the banks rather than haircuts but I wonder how far apart the two really are.

If this is possible, then assuming we have already drawn down 1/3 of the bailout (€28B) and that our own resources were burned first, then we have probably only taken about €3.5B of the IMF's funds. That may leave us with a line of €23B in credit, €19B of IMF funding and the &euro4B from the UK. That might allow us take an 18 month adjustment period rather than chopping the €20B overnight.

Obviously any such plan would need to be approved by Mr Chopra and his band of merry men, but is it even feasible? Again, like Kelly's plan, probably not but it might be worth investigating.

Monday, May 9, 2011

We're still all doomed

The purveyor of all things doomy, Morgan Kelly, was back at the weekend. Following on from his November article (blogged here) he paints a none too rosy picture of Ireland's economic future or the road taken to get us to our current position. He is particularly scathing of Patrick Honohan and his missed opportunity to cancel the bank guarantee when he was appointed.

Kelly does put forward a solution to the current mess that comes as a two-parter. Firstly Ireland walks away from the entire EU/IMF deal and foist the bank debts back on the ECB and secondly (or more specifically as a consequence of the first) Ireland immediately balances its budget.

The first part of the solution is easy. We stop drawing down any additional money from the EU/IMF, tear up the draft MOU that was circulated last week, close down NAMA and turn the ECB into the effective owners of the Irish banks. So far so good. This gets our debt back to a "reasonable" figure a bit north of €100B.

Now comes the hard bit. Because we will have cut off our line of credit from the EU/IMF and due to the outrageous margins the bond markets are demanding on Irish debt, we would have to immediately slash our expenditure to match our income. That means an overnight correction of about €20B give or take. This equates to about a 30% cut in all social welfare payments, public sector pay and pensions and a huge number of canceled procurements and service contracts with the private sector, not to mention a massive bonfire of quangos.

Ignoring the mantra of "The ATMs will stop working", which I seriously doubt would happen, the scale of the adjustment is massive: cutting job seekers benefit to around €135, child benefit to €100 and the contributory old-age pension to €160. It would also cut about €6B off the annual wage bill for the public sector, but assuming an average tax/levy rate of 20% (probably a low estimate) that would come back to less than €5B in savings. The knock effect of these cuts is further reductions in spending in the economy, thereby reducing even more the taxes raised through VAT and private sector employment which could end up in a further negative spiral of cutbacks.

Could the Irish economy survive such a shock? I don't think so but it is the only result possible if we ditch the bailout. Certainly the Irish people would find it very hard to swallow. But if given the choice between a lot of medicine now or a long, drawn out illness it is certainly worth weighing up.

The big question that remains unanswered, at least to me, is what way the bond market would react. At the moment it seems as though an Irish default is already priced into our yields. We are out of the market because they won't lend to us. The government line is that if we default then the market won't lend to us in the future either. So if we're frozen out anyway, then does a default matter? Won't there be some enterprising hedge fund that will see an opportunity in lending to Ireland in the future once our spending is roughly back in line? Obviously this lending would have to be prudent and for serious capital investments such as rail, schools and hospitals rather than re-inflating wages. But it certainly seems like such lending would be likely in the medium term.

The other question is how a default would affect the Euro in general, and Ireland's participation in it. On that I have no clue. Perhaps someone could enlighten me a bit on the topic. Can we realistically move to the Punt Nua and is that even an advisable thing to do unless we peg to Sterling? And if Greece jumps should we follow or is the game over?

Monday, May 2, 2011

Campaign Review

I was initially going to write a post on Wednesday night when I got home after the long day in the Exam Hall waiting for the 1st count. But then I thought better of it and decided to let it lie for a few days before putting the proverbial pen to paper.

The Result

For those that haven't seen the figures yet, I polled 178 on the 1st count and by the time I was eliminated after the 6th count that had gone up to 206. With a quota of 3891, that means I was about an order of magnitude short of where I needed to be. David Norris was elected on the first count with over 36% of the 1st preference votes. Ivana Bacik took the second seat on count 10 having secured 2982 1st prefs and Sean Barrett overtook Tony Williams to take the final seat from a starting position of 1051 votes.


The first lesson learned is that you can't run a successful election campaign without a long planning phase. While I put out a few feelers the week before the General Election, we only decided to run the campaign three days before the close of nominations. That meant there was no chance to get friends and classmates back on the electoral register, no time to get the campaign website online before the candidates were announced in the press, no time to do some proper brainstorming on campaign message and tactics. In fact the rushed timescale meant even getting a valid nomination submitted in time was hard due to assentors not knowing which address they had on the register.

Incumbency vs Name vs Machine

While, relatively speaking, it is easy enough to get onto the ballot paper for the university seats, it is a whole other job getting votes. Looking at the top performers we have the two incumbents way out in front of the field. Next up you have Tony Williams who had the Shane Ross machine backing his candidacy. Next you had Sean Barrett who had run twice before as well as being a well known Professor of Economics. After that you have Maurice Gueret again a third time candidate who would be well known in the medical community and then Marc Coleman, economist and broadcaster.

What this points to is that having the resources to run a big campaign, having existing name recognition and having access to media seems to be key to running a successful campaign. Not that I am suggesting that any of these candidates didn't have policies and legislative agendas to back up their candidacy, but without these three components is is hard to get those policies across to the electorate. In each of these three areas I was blown off the field.


What would be interesting to know is how much was spent by candidates on the campaign. I have previously blogged about my costs to which I must now declare an additional €150 or so to Facebook for online ads during the campaign. From what I can gather, certain campaigns spent multiples of my total, potentially into five figures. Unlike the General Election there are no limits imposed by SIPO on spending in the Seanad election which is something that might want to be addressed in the future.


Similarly to finances, there do not appear to be strict rules in terms of media coverage in the Seanad election and in a way who can blame the media for going after the higher profile candidates as they are the most likely to win. But if elections are meant to be fair with a level playing field then there needs to be equal access to media for all candidates. I had three serious media outings during the campaign. I was disappointed with my performance on Pat Kenny but I feel that both the Vincent Browne and Newstalk shows went pretty well. Just a pity that both of them came so late in the campaign after most people had already cast their ballots.


An election campaign isn't a one person operation. Thanks are due to the following
  • My wife, Stella, for putting up with my crazy electoral notions.
  • My mother, Eithne, for addressing several hundred envelopes and keeping tabs on daytime radio for Seanad election news.
  • Dave and Moran for the blitz weekend on the flyer and website content.
  • Edward for doing the website design in double quick time.
  • Anyone who got in touch during the campaign to express their support.
  • The 177 other people who put a 1 opposite my name on the ballot paper.

So does this mean the end of my political career? Maybe, maybe not. But I am certainly a lot wiser now than I was a few months ago with regards to the mechanics of electoral politics. I'm glad to have done it, especially as it may have been the last ever election to the Seanad.

Finally, I will be giving a talk at the next Ignite Dublin session on 8th June on the whole election thing for those that want more detail or want to chat about it in person.