What a difference a night makes

There was a little girl who had a little curl,
Right in the middle of her forehead.
And when she was good, she was very, very good,
And when she was bad, she was horrid.

While Vincent Browne is neither a girl (fully grown man) nor has a little curl (lots of curls), this little ditty could easily have been penned about his late night show on TV3. Since the show started I have been quite the fan, but of late I have become less enamoured of my late night political gossip. Too many shows end up with the same old faces making the same old points and so since the start of the Presidential Election campaign I have actually given up watching except for odd occasions.

However, the last few weeks have seen my schedule become more regimented and I find myself sitting on the couch waiting for 1AM to roll around so I can give Ailbhe her final feed and then go to bed. This has led to my getting back into the swing of JML ads, snippets of Family Guy on BBC3 and relentless frustration from Vincent with all of his guests. And like the poem, some of the shows have been amazing and some awful.

Take for example the day that Sinn Féin produced their budget proposal (16th November). Joining Vincent were Pearse Doherty from SF and Simon Coveney from FG who spent the entire show tearing strips off each other. Coveney was shown to be either completely clueless, completely unbriefed or else told to fall on his sword to avoid letting any pre-budget strategy be revealed. It also helped that Marie Sherlock from SIPTU was on the panel and she made some particularly insightful contributions attacking both the SF and FG positions as required.

On the other hand the following evening Aodhán Ó'Ríordáin was part of the panel discussing the number of election promises that had been broken by the government since taking office in March. This was the most mind numblingly boring episode I'd seen in a long time. There was no real debate between the panelists and despite his best efforts, Vincent couldn't get the deputy to admit to any broken promises at all.

Last night was another doozy, where Constantin Gurdgiev destroyed Damien English on the potential collapse of the Euro. While I don't think the doomsday scenario outlined by Gurdgiev, he had the figures and the expertise to back up his position. English didn't want to even engage in a what-if scenario and could only repeat the mantra claiming the ECB would do the right thing this time. Again, maybe he was badly briefed, but English came out of the show very badly. One wonders why FG continue to send out people like him and Paschal Donohue rather than some of the heavy hitters like Shatter, Bruton, Noonan or Reilly. I guess it's the same reason Conor Lenihan was such a regular on #vinb before the election - plausible deniability for the government.

I'll keep on watching and hope for more fireworks in the next few weeks as the budget appears and the Eurozone continues to flounder from crisis to crisis.

PS - there's a really good piece written by Stephen Kinsella posted on Irish Economy. Definitely worth a read.

Reduced capital programme

I have written more than once about the major transport initiatives in the Dublin area, namely Metro North, Dart Interconnector and Luas BXD. With the publication the other day of the revised, and greatly slashed, capital budget it seems apt to mention them again.

It seems as though the only project that will now be completed will be the Luas extension from Stephen's Green through the city centre up to Broombridge Station. Of course, like all the big projects, it has been scheduled for the end of the time period of the project so it is the most likely to get chopped completely if there are further cuts required or other projects run over budget.

Two other projects in the North Inner City are worth mentioning. The Children's Hospital will go ahead with funding up front from the renewal of the Lottery license but the amalgamation of DIT onto the single campus in Grangegorman will not. It does seem odd that we will now have a Luas line missing its biggest source of passengers while we build a hospital without any mass transit to deliver patients, parents and visitors.

Slashing the capital budget is, in my mind, a short sighted and cowardly way to balance the books. By their very nature, capital investments are good for the country in that they provide employment while they are being delivered and then provide benefit to the community once finished. This is true of school building, hospitals, roads, railways and every other capital project. Borrowing for capital is good, and in many cases is to be encouraged.

It is far harder to hit the recurrent budget as it covers civil and public servants' wages and pensions as well as welfare payments. But it is the only real way to make long term savings that will close the gap between income and expenditure. With Croke Park freezing pay, it looks like natural wastage, retirement schemes and continued recruitment embargoes will be the order of the day.

The only other option is to increase revenue through taxation which sounds great to the Occupy brigade. Sure, tax the rich and make them pay. But the super rich will tend to up sticks and leave. The easiest target is the middle classes who are already paying at the higher rate. By reducing credits and bumping the top rate up a point or two more could be squeezed from this cohort (which includes me). And to be fair, we could probably take it. But we are also the very people who voted for FG and Labour so I'm not sure how politically astute it is to antagonize the very people who elected you.

Once I get time to trawl through some Revenue figures I'll come back to this topic. But for the moment let me finish by giving Minister Howlin's plan a 3/10 with a strong recommendation that he try a bit harder in future to make serious reform plans rather than tinkering at the edges.

New team member

At the end of my last post I promised a more regular stream of consciousness/rubbish would appear on this blog now that the election and referendums were over. To that end I had started in to a series of posts on the constituency review process and some related modest proposals when reality got in the way again. Early on Friday morning, about three weeks ahead of schedule, Pass Level Politics acquired a new contributor called Ailbhe.

So for the next 18 to 30 years my life will be somewhat changed. It also means this blog may take on a slightly different slant as issues that I previously never cared much about become the most important things in the world. I'll still try to stick to the general current affairs/politics remit and will leave baby specific stuff to John over on To The Max which has the huge benefit of teaching me everything I need to know about 4 months in advance. But I may just lapse once in a while, but I'm going to claim that as author and parent's prerogative.

Bonds and loose change

Tomorrow sees the repayment of about $1,000,000,000 of unguaranteed bonds owed by the rump of Anglo. This is the money that Dana was mentioning at every opportunity during the last few presidential debates. This equates to about €730,000,000 or in some more manageable terms, heading towards twice the total spend on Special Needs Assistants for a full year or about 20% of the cutbacks that are going to be announced in the upcoming budget.

The argument for paying goes along the lines of this: the EU/IMF deal has us going back to the market next year. If we don't pay back this bond the reputational damage done to Ireland will so great that we won't be able to afford to go back to the market at a reasonable rate. Therefore we must pay back these bonds at face value to have credit available to us in the future. Sounds reasonable, doesn't it?

Except it isn't. These are unguaranteed bonds that have been traded multiple times since issue with the current owners probably paying somewhere around 10c in the euro to mop them up. So the original lenders have already taken losses on these bonds. The current owners are hedge funds and the like who are looking to make a killing when Ireland Inc foolishly pays back face value on bonds that are effectively junk.

Of course I am just guessing that these bonds are held by hedge funds as nobody will actually say who holds these instruments. We have no idea who the owners are and whether they are the same institutions who will be our lenders in the bond market in the future. However, the cloak of secrecy surrounding their identity suggests to me that they are not the same people.

I'm also getting sick of Ireland trying to be the best boy in the class while Greece gets 50% hair cuts, second bailouts and a referendum on their financial future. while I wouldn't suggest becoming the rebellious punk that is Greece, we could at least ruffle our hair once in a while, open the top button on our shirt or wear mismatching socks. We still are, despite the best efforts of Fianna Fáil, a sovereign nation and should play that card once in a while. We have made some progress on the reduced interest rates, you just get the feeling that we're still sucking up to teacher in the hopes that someone else will get into trouble before us.

Speaking of trouble, I really can't believe that €3.6B was mislaid in a transfer between two state agencies, namely NTMA and the Housing Finance Agency. How someone doesn't immediately notice that rather than going up by €3.6B that their overall balance went down by the same amount is outrageous. I would certainly know if my wages were taken out of my current account on the 20th of every month rather than deposited. It makes you wonder what sort of quality control and monthly account reconciliation is going on over at the HFA.

PS - now that #aras11 is over I'll be getting back into more regular blogging. Huzzah say the masses!