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There are 7 days to go before UK citizens vote on whether or not to leave the EU, and its becoming increasingly more likely that they will choose to leave.
On a purely logical level, this is difficult to understand.
For instance, the UK economy has prospered since the joining the EU. In 1973, when the UK joined, its GDP per capita was lower than that of Germany, France and Italy. Today it is higher than all 3.
Beyond economics, the UK’s system of democracy is archaic compared to that of the EU. Not only does the UK have an unelected Head of State (the Queen) and an unelected upper house of parliament (the House of Lords), kamagra uk, but its system of electoral democracy does not produce representative parliaments.
For instance, in the 2015 General Election, UKIP obtained 12% of the vote but only 1 seat out of 650 in parliament. By comparison, UKIP won 24% of the vote of the European Parliament election in 2014, and won 24 of the 73 seats allocated to the UK in the European Parliament.
A lot of the momentum behind the move towards leaving the EU appears to arise from immigration, but even in this, there is no logic.
There are approximately 3m EU nationals living in the UK who were not born in the UK.ï¿½If they were all to leave, and all the UK residents living in other EU countries were to return home, the population of the UK would decrease by about 2m people, or 3%. At current natural population growth levels (ie excluding net migration) that decrease will be made up in under 10 years. The only difference would be that the UK would have increased its number of pensioners and reduced its number of people working and paying tax (dramatically).
Clearly then, there is some other more emotional force at work that is pushing people away from the EU. Commentators frequently lay the blame for this at the door of the EU itself. This is an easy argument to make. The EU is a form of government, but because it doesn’t look and feel like the national governments that we are all used to, its simple to make the argument that its “undemocratic” or “corrupt”.
Its much harder to explain that while the EU is a form of government, it is not a nation state, and the fact that its institutions are not exact replicas of national institutions reflects that. For instance, the EU parliament ï¿½has fewer powers than national parliaments because the EU parliament is not supposed to replace national parliaments, and the EU Commission is the only institution that can propose legislation as the EU Commission is the only institution that can place the needs of the Union itself over and above the needs of individual member states.
Its also easy to refer to the “EU” when in fact what we are talking about are member states. For instance, in dealing with the Greek debt crisis, or the refugee crisis, collective decisions were and are being made by national governments, not by any EU institution. The institutions of the EU merely facilitate the negotiate and implement the ultimate decision.
In reality, dissatisfaction with the EU is really just dissatisfaction with politics in general. For many people, politics is about well-paid, far away people making decisions that always seem to involve someone being pissed off. However, we tolerate it because we understand the alternative is chaos.
In the case of the EU, the alternative isn’t chaos, its returning to the way we did things before the EU, the good times, where we only remember all the good stuff and all the bad stuff has been removed from our memories behind a screen of nostalgia.
That’s the essential difference with the EU. We regard it as an optional extra, something that we’re not sure we need, and who many people think we don’t need, compared to national democracy, which we wouldn’t dream of being without, even when we regard it with searing contempt.
In this regard, its difficult to see how the EU can prosper. Politicians talk about reforming this, and changing that, and listening to the people, but in reality, for as long as the EU is something that is separate to national politics, it will always be an easy scapegoat for problems created by national politics that national politics can’t solve.
Perhaps, therefore, the alternative to the EU needs to be put to the test. What if one member state decides that they are going to step into the time machine, and return to the 1970s, when George and Mildred was on the TV, when Liverpool used to win the European Cup, and you could buy Duty Free cigarettes on your way back from your holidays, and you could leave your keys in the car outside the house and you had a job for life in British Leyland?
It might all work out. They might get on fine. It might not. They could disappear into a hole in the North Atlantic. But at least we’d know. At least we’d have something to point to and say: “Look, this is what happens when you go with the alternative.”
I see this as an inevitable and logical step in the evolution of not only the EU, but international co-operation and governance. We can’t allow the EU to die by a thousand cuts, or to be taken over by people whose only interest is in its destruction.
Let’s allow the boil to be lanced, to see how much puss it spews. If we are better served by retreating into our nation states and looking out at each other over fences and walls, then so be it. I don’t think we will be, but I’d sooner know for sure.
Political discussions about the overall merits of Ireland’s membership of the EU invariably make reference to our participation in the Common Fisheries Policy (CFP), and the value to the rest of the EU of the fish stocks extracted the Irish Economic Exclusion Zone (EEZ), which is a 200m limit around the Irish coast in which Ireland claims exclusive fishing rights.
Calculating the value of this catch, and the value foregone by the Irish fleet and industry in sharing fishing rights in the EEZ with the rest of the EU is obviously a mammoth statistical task, but this hasn’t deterred various commentators from presenting their own “back of an envelope” calculations as hard and cold fact.
Foremost of these is a claim by journalist Tom Prendiville, who published an article in Daily Ireland (and later Magil) in 2006 entitled “STATISTICS BLOW MYTH OF IRELAND AS EU BENEFICIARY”. This derived a figure of €200bn for the “contribution” made by Ireland to the EU in permitting accessing to the EEZ. The article doesn’t reference any particular year for the value of the €200bn, so we can only presume it refers to 2006.
Prendiville’s “work” has been referenced numerous times since. Various candidates contesting election to the European Parliament has used it to support their position that Ireland is being hard done by by EU membership. In 2014, Luke Flanagan used the claim as a central plank of his campaign. He was elected to the European Parliament with a massive share of the first preference vote.
The claim has also surfaced in academia. In 2012, a lecturer in Lecturer in International Relations at Dublin City University, Dr. Karen Devine, re-surfaced the claim in a presentation to a joint Oireachtas committee re. the ratification of the Fiscal Treaty. She presented her analysis to the committee, which comprised an extrapolation of the value of the entire catch from 1975 to 2010 from on a single reference year (2008). From this, she arrived at a total value for the catch of €67bn (again, without reference to point in time value), and then added another €134bn on to this to account for added value in processing and marketing (67bn + 134bn ~= €200bn). Her analysis runs to a total of 4 pages, the bulk of which comprises screen shots of MS Excel spreadsheets from her computer. You can download it here. Dr. Devine is repeating the claim in her current campaign to be elected to Seanad Eireann.
To anyone with even the most basic knowledge of economic statistics, extrapolating information in this fashion is obviously flawed. In fact, its remarkable that a professional academic would add their name to what is such obvious chicanery.
In attempting to derive a more accurate value, most serious research refers to the Sea Around Us Project which is based in the University of British Columbia. The project is an international research initiative that assesses the impact of fisheries on the marine ecosystems of the world based on fisheries related data at spatial scales. The project has collected data on fisheries throughout the world going back as far as 1950. Data in relation to the Irish EEZ is available on their website.
This link shows the values of all stock landed from the Irish EEZ at 2005 US Dollar prices. There is a link in the top right of the screen to download a CSV file of the data used to compile the chart. This CSV file includes approx. 22k rows of data, one each for each type of fish landed by each country in each year. If this data is opened in an Excel spreadsheet, it shows that the total value of the catch from the Irish EEZ between 1950 and 2010 is approx. $26bn in 2005 prices. The value of the stock extracted between 1950 and 1973, when Ireland was not a member of the EU or the CFP, is approx. €7bn, which means the value of the catch between 1973 and 2010 is approx $19bn (approx. €15bn), a fraction of the value claimed by the “back of the envelope” commentators mentioned above.
Moreover, as the chart in the link above shows, the Irish fleet extracted a large part of that value, ranging from approx. 10% in previous decades to up to 60% at peak levels (1995).
There are other considerations which must also be included in this analysis. To claim that Ireland has made a “contribution” to the EU by providing access to the EEZ presumes that prior to joining the EU and CFP, Ireland had exclusive access to the EEZ. This was not the case.
Up to 1976, Ireland laid claim to fishing rights in only 12m of territorial waters, not the 200m that currently defines the EEZ. The wider EEZ was heavily fished by French, Spanish and Russian fleets. The Irish fishing fleet did not have the capability to exploit fishing stocks in the wider area (it barely had the capability to exploit the 12m area), nor the naval resources to patrol and exclude other fishing fleets from it. In fact, the decision to create EEZ was only taken on foot of membership of the CFP, which provided funding for both the expansion of the fishing fleet and landing facilities, and the naval patrol vessels required to police the EEZ (the EU paid for all 4 naval patrol vessels which have been deployed in the EEZ in the intervening period, the LÉ Deirdre, the Emer, the Aoife and the Aisling).
Crucially, since the creation of the EEZ in 1976, the Irish fleet extracts significantly more stock from this area that was the case prior to 1973, while the fleets who previously fished this area with impunity extract significantly less. Based on this, its credible to argue that the Irish fishing fleet has actually benefited from membership of the CFP rather than having foregone benefit, as argued by others.
Claims in relation to added value from processing and marketing also require scrutiny. To include this figure in deriving overall value involves a number of extremely tenuous assumptions. Firstly, it presumes that the “rule of thumb” in adding €2 in processing value to every €1 in landed catch value is accurate both across 28 countries and 35 years, an assumption that would fail even the most rudimentary statistical test. Secondly, in presumes that capital invested in fishing assets and infrastructure by other EU states would not have produced similar value if invested elsewhere. Thirdly, it presumes that if Ireland had not joined the CFP, that we would have expanded our fishing and naval capacity in the period post 1973 to exclusively fish the EEZ to the same extent as the combined fishing fleets of all other EU fishing nations. These assumptions are obviously ridiculous.
As noted earlier, deriving an overall value for the value to the EU of Ireland’s participation in the CFP is extremely difficult. Generally speaking, when all factors are considered, serious research agrees we have made some contribution, but that contribution isn’t anywhere near the value of €200bn frequently touted by people who are skeptical about our involvement in the EU.
The people who have the most interest in our involvement in the CFP, our fisherman, are quite clear that the value foregone is fishing stocks marginal and that Ireland has benefited significantly from CFP investment in our indigenous industry, access to British fishing zones and the extension of the EEZ.
In the article referenced below from 2009, Sean O’Donoghue of the Killybegs Fishermen’s Organisation, which is the largest representation organsiation for fishermen in the country, said in reference to the €200bn claim:
“I have researched it, and those figures should have been challenged long ago.”
In the general cut and thrust of politics and the formulation of public policy, it is generally accepted that proposing any measure that impacts on the living standards of old age pensioners is an act of political suicide.
It is therefore ironic that changes to how pensions are accrued and taxed are rarely controversial.
For instance, the current Government introduced a private pension levy in 2014 which skimmed 0.15% off the value of private pensions funds. This was withdrawn after 2 years, but still represented a system of double taxation that only applied to the holders of private pensions funds. The move did provoke a certain backlash, but many commentators welcomed it, and there was none of the outrage that followed the withdrawal of the medical card for all over-70s, millionaires and paupers alike.
The reason for this seems to stem from a mistaken view of what private pensions are. The system under which a taxpayer is allowed to deduct their pension contribution from their income before that income is subjected to the calculation of PAYE is referred to has a “relief”, as if the State is cutting the taxpayer some slack for saving for their retirement. Indeed, arguments in favour of this measure and frequently framed in the context of rewarding and incentivising people to save for the future.
This view of private pensions is also promoted by frequent media references to the pension arrangements of senior private and public sector executives, as if to suggest that the only people who have private pensions are people who are already well-heeled and not in need of any more “relief” from the State.
This understanding of private pensions if mistaken, and in promoting it, the media is doing no favours to large sections of middle and low income earners.
Firstly, not having to pay PAYE on your pension contribution is not a “relief”. If you make a pension contribution, you don’t pay tax on that income in the current year because you are deferring that income until after your retirement, when you will pay tax on it. The State isn’t doing you any favours here. You’re just making an agreement with the State to defer your income and its associated tax liability to a later time. If you weren’t allowed make the deduction, you’d be paying tax on the same income twice: once in the current year and once when you draw down your pension.
Secondly, private pensions are not the sole reserve of the elite. Figures regarding how many people working in the Irish economy have pensions vary, but none put the figure at below 50%. A recent Friends First survey put the figure at 67%.
This level of engagement brings some of the proposals of the political parties contesting the General Election into sharp relief.
Several parties are proposing converting the Universal Social Charge, which was designed as an emergency measure, into a permanent feature of the taxation system.
Unlike PAYE (income tax), USC is charged on all your earnings, including any income you decide to defer until after your retirement (your pension contribution), and for retired people, any income they receive from private pensions. If the USC were a temporary measure, this would be logical, as you wouldn’t be paying it a second time further down the road when you draw down your pension, and if you’re a pensioner, you wouldn’t have paid it when you were building your pension: ie, everybody is paying it only once.
However, if the USC is to be made permanent, and continues to be chargeable on both all your income in the current year and income from private pensions, everybody who has a private pension will be paying it twice: once in the current year and once when you draw down your pension.
None of the parties proposing retention of the USC have addressed this anomaly, again reflecting the general view that private pensions are a “privilege” and therefore a soft target for rhetoric driven policy.
If the USC anomaly were not bad enough, one party is going even further.
Sinn Fein is proposing to standardise the tax “relief” given for private pension contributions. This is a somewhat obscure concept that doesn’t register easily, but it involves a significant drain on income for anyone earning more than €33,800 per annum (where the higher rate of income tax kicks in) who is making a contribution to a private pension.
Currently, if someone earns €36,000 per annum and makes a pension contribution of €1,000, their PAYE calculation begins at €35,000, not €36,000.
They then pay tax of 20% on €33,800 and 40% tax on the remaining €1,200. They don’t pay 40% tax on the €1,000 they used to contribute to their pension, which is income they deferred to pay tax on at a later time. As such, their tax liability is reduced *in the current year* by €400.
Sinn Fein has positioned this as a “gift” from the State to the taxpayer, and want to claw it back. What they propose is that the person in question pays tax of 20% on €33,800 and 40% on the remaining €2,200, without making any allowance for the income deferred to a later time.
Instead, they will give the taxpayer a refund of 20% of the pension contribution, which in this case will be €200. This represents an increase in income tax for that person of €200 per year (which is greater than their annual liability for water charges).
What is particularly unfair about this proposal is that it means 2 people with the same net income in a given tax year will pay differing amounts of tax depending on whether or not they have made a pension contribution.
Someone who earns €35,000 and doesn’t make a pension contribution will pay €200 less tax than someone who earns €36,000 and makes a pension contribution of €1,000, even though the person making the contribution will pay tax on the €1,000 they have deferred when they draw it down.
It also means that the minimum rate of tax on income on many pensions would be 40%, even if the total income from that pension is less that than €33,800 (the standard rate cut off point). Pensioners who earn more than €33,800 from their pension could be paying as much as 60% tax, depending on how their pension fund was accrued.
The intricacies of the tax system don’t often emerge in the heat of a general election campaign, but on this occasion, they probably should.
Sortition is the process of choosing public representative by lottery rather than by ballot.
While sortition might seems like a strange way to choose the people who govern us, it actually makes a lot of sense.
1. Election promises
Because elections are a popularity contest, getting elected means making promises, most of which are discarded after the candidate and their party is elected. This is hugely frustrating for voters, and undermines the credibility of the political system.
In Sortition, no promises are required, as every candidate has the same chance of being elected as every other candidate.
2. Political parties
Political parties are an essential feature of any democratic system based on elections. To provide the electorate with relevant choices, politicians need to be organised in groups that can campaign during the electoral campaign. This organisation is also required in the parliament, when one group of politicians governs and another provides opposition to whatever the group of governing politicians do and says. Parliamentary organisation is also needed to ensure that individual parliamentarians act in line with party policy, rather than according to their own views or beliefs, to underpin the stability of the sitting government.
There are certain advantages to this, but political parties are also breeding grounds for corruption. Membership of a party provides a conduit to those other members who govern, and decisions taken in this regard are invisible to the general public.
In Sortition, there is no need for such organisation. There are no elections, so no organisation around that activity is required. In parliament, members are free to vote how they choose, as they consequences of a vote being defeated does not undermine the Government, as the Government is chosen from all members of the parliament, rather than the political party with the most seats.
No political system can guarantee against corruption. If an individual is given power, there will always be another individual willing to pay them to use that power by proxy.
Democracy based on elections is particularly prone to corruption, because money is almost essential to political success. Democracy also encourages corrupt people to seek election, because success can be achieved with money. Democracy allows people who want power most to obtain power, when in fact those are the people who should never be in power.
A public representative who obtains power via a lottery system would still be exposed to corrupt influence, but the incentive to be corrupt is greatly reduced. Money confers no advantage on public representatives appointed via Sortition, so there is nothing to be gained politically from taking money to act in a particular way.
4. Fairer and more diverse representation
Because of the nature of electoral politics, the people who are elected tend to come from a restricted subset of demographics, income brackets and professions.
Wealthier people tend to fair better. People who have been involved in trade unions tend to fair better. People in professional occupations (solicitors, doctors, accountants) tend to fair better. Teachers (who have time off during election campaigns) tend to fair better.
Conversely, mothers tend not to participate. People from low-income backgrounds tend not to participate. People in 9-to-5 jobs tend not to participate. Farmers tend not to participate. In fact, a huge portion of the average population is generally excluded from representation.
In Sortition, none of this true. Anyone who wants to can add their name to the list of eligible candidates. No campaigning or money is required, and mothers, people on low incomes, 9-to-5ers and farmers are just as likely to be made members of parliament as anybody else.
Clientelism describes the phenomenon where elected public representatives act as advocates for their constituents who are faced with personal issues. This is a particular problem in multi-seat constituencies, where each politician competes with every other politician to see who can provide the best “service”.
This is not why we elect public representatives. We elect public representatives to consider evidence pertaining to national issues and make decisions based on that evidence. The ability of a public representative to do this effectively is greatly curtailed if they have spend half their time in their local area dealing with issues that should be dealt with by local agencies.
In Sortition, this problem doesn’t exist. The is no competition, so public representatives can focus entirely on national issues.
6. Electoral fraud / manipulation
In a democratic system based on elections, significant resources have to be deployed to protect against fraud. Agencies have to be established to monitor spending, to ensure balance in the media, to ensure that polling stations are secure, to ensure that votes are counted correctly, to ensure that the electoral register is valid and accurate, to ensure that only people who are entitled to vote can vote. This costs a lot of money, and fraud and manipulation still occur.
In Sortition, the system is simple. People who want to be considered put their name on a list. All the names go into a “hat”, and a fixed number are drawn. The process takes no more than an hour, and once it is done in public, is virtually incorruptible.
7. Universal participation in the legislative process
In typical democratic systems based on elections, legislation is drafted by the government and passed by a majority of the government representatives in the parliament. Members of the parliament who are not members of the governing party suggest changes to the legislation, some sensible, some just to get their name in the papers, but these changes are almost universally ignored, as conceding to such changes is seen as an admission by the government party that the other parties have sensible things to say, which is then used by those parties when the next election comes around.
This means that a very large number of public representatives in a parliament have no input into legislation for the 4 to 5 years they spend in the parliament.
This isn’t a feature of Sortition. There is no government party, and no elections, so public representatives who put forward legislation can accept changes and improvement to legislation without having to worry about how this makes them look or how it impact on their electoral prospects.
8. Political geography
In order for voters to feel like their local areas are getting a fair deal in the distribution of resources, decisions around public spending are often made on the basis of electoral impact rather than actual need. This leads to systems that are disjointed and poorly planned, in which valuable resources are wasted.
In Sortition, there are no elections, so public representatives can consider decisions entirely on what matters, leading to more efficient systems that can be planned with a long term perspective.
9. Politicians Pay
Because democracy is essentially a popularity contest, its a lot easier to succeed when you have money. The more football kits you sponsor, the more rounds you buy in the pub, the more donations you give to charity, the more ads you put in the paper etc etc the more popular you are amongst voters. That puts people who have less money, who are generally the people who need most representation, at a disadvantage. To re-balance this situation, elected politicians are paid well, to remove the temptation for them to obtain money from people who would seek to influence the way they act (ie corruption).
In Sortition, there is no competition. Everybody has the same chance of becoming a public representative as everybody else, so money is no advantage. It therefore isn’t necessary to pay politicians well.
10. Early pensions
Attracting capable people into politics is difficult. It takes a lot of work to build up your profile to the point where you can win an election, and even if you do get elected, you could lose your position within a couple of years, often through no fault of your own.
People who have built up careers in particular professions or who are self-employed are reluctant to sacrifice that to enter politics. Someone who spends 10-15 years as an elected representative is unlikely to be able to pick up where they left off after they leave politics.
To remove this disincentive, politicians are paid their pension earlier than people in normal careers.
In Sortition, a person chosen by lottery to be an elected representative would only serve a single term of 5 years. They would not have to sacrifice any more of their career than that, and their position would be secure during that 5 years. It would therefore not be necessary to pay them an early pension.
At least that’s what Diarmuid O’Flynn of Ballyhea says No would have you believe.
O’Flynn is various things. He’s a former staff sports writer at the Irish Examiner, which apparently qualifies him to advise Luke Flanagan MEP on “on economic and environmental affairs” (Flanagan appointed him as his Parliamentary Assistant in the European Parliament in 2014). He was also a candidate in the European Parliament elections in Munster in 2014, picking up a credible 30,000 odd votes. All of this came about from his involvement with Ballyhea says No, a group of people in Cork who go out every week and march in protest at the State’s handling of the banking crisis between 2008 and 2010.
O’Flynn regularly writes to the national and local media outlining his version of the arrangements to deal with the insolvency in the banking system. The narrative of these letters is generally the same, namely, the European Central Bank forces the State to borrow money, which the taxpayer must pay back, to give to the Irish Central Bank, which the Irish Central Bank then “destroys”. He obviously concludes that this is a terrible injustice and that the practice should stop forthwith.
Given the complexities of the banking crisis, which were spun out by the media as a vast conspiracy in which a cabal of politicians and bankers attempted to usurp the State, O’Flynn’s thesis is easily digested. What could be more evocative in the aftermath of a banker induced crisis that the biggest bank of them all is forcing the poor Irish to burn their own money? Its a story that writes itself and never stops giving (which is very handy to have when you’re asking people to vote for you).
Of course, like most theories offered by the likes of O’Flynn, Flanagan and the various other journeymen who emerged on to the political stage after 2008 (who were strangely absent in their criticisms when the good times were rolling), its a load of nonsense.
Let’s try and peg it down.
In 2010, the Irish Government was faced with the following situation. The 4 domestic banks – AIB, Bank of Ireland, Anglo Irish Bank and Irish Nationwide – were bankrupt, and living off emergency day to day funding from the European Central Bank. They were bankrupt because loans they had made were not being repaid and were never going to be repaid. If any one of them failed (ie if unpaid bondholders sought their liquidation), confidence in the system would be lost and the entire system would collapse, vapourising billions of euro in deposits held by ordinary citizens and small businesses.
Some of the banks were more bankrupt than others. AIB and Bank or Ireland were the better of the 4, and could be stabilised by transfers from the State’s current budget and the National Pension Reserve Fund. The other 2, Anglo and Irish Nationwide, were banjaxed, and needed far more money, about €30bn give or take, to keep them above water.
This kind of funding was not available to the State. The National Pension Reserve Fund was empty, and the interest rates being demanded on Irish Government debt were so high that it was impossible to borrow money from the bond markets.
In a country that doesn’t share its currency with others (like Iceland), this wouldn’t have been a problem. The State could have issued more currency (“printed money”) and used that to re-stock the banks. Ireland didn’t enjoy that luxury. We use the Euro, and only the European Central Bank can increase the supply of Euro, which it is legally forbidden to do for the purposes of financing deficits (eg bailing out banks) in member states.
At the same time, the European Central Bank had a problem. If the Irish banking system went bust, it could tear down the entire Euro system. A solution therefore had to be found, which became what we now know as the Promissory Note.
The Promissory Note basically allowed the Irish State to pretend it had €30bn spare, when in fact everyone knew that that €30bn would have to be borrowed at some time in the future when the Irish State could again borrow money on the bond markets.
The Promissory Note was what it said on the tin: a note promising to pay the holder €30bn at some time in the future. The State gave this note to Anglo Irish Bank, who then went to the Irish Central Bank and borrowed a real €30bn using the Promissory Note as security. The Irish Central Bank got this money from the European Central Bank, who used a mechanism called Emergency Liquidity Assistance to increase the supply of Euro available to the system. Anglo paid off its creditors, so that they didn’t try to liquidate the bank, and the system survived.
All of this was a roundabout way of doing what the European Central Bank was legally prohibited from doing, namely giving the Irish state money to sort out its budgetary problems (the €30bn shortfall required to sort out Anglo and Irish Nationwide), so the European Central Bank secured a firm commitment from the State that the €30bn that had been magic’ed up out of nowhere would disappear again as quickly as possible, so that the European Central Bank was not seen to be breaking its own rules.
The agreement made was therefore that when the State paid the €30bn it had promised to pay the holder of the Promissory Note, the holder of the note (the Irish Central Bank) would not add those funds to their balance sheet as real money. In that way, the original “pretend” €30bn would disappear out of the system and not be used by the State to pay for real things like schools and hospitals.
This is why when the State transfers Promissory Note payments (via the National Treasury Management Agency, who raise money on the bond markets on the State’s behalf) to the Irish Central Bank, the Irish Central Bank does not pass those through to their balance sheet, which effectively deletes the money from the system. This is the process that O’Flynn and others refer to as “destroying our money”.
Of course, it all amounts to the same thing. We, the taxpayer, bailed out the banks.
Whether or not this was the right thing to do will be a question for historians. What we do know is that while the bailout was expensive, our banking system survived and our economy recovered. Whether this would have happened in the event of the banks being liquidated remains unknown.
The Ballyhea Says No campaign believes that the State should stop paying the annual Promissory Note payments to the Irish Central Bank.
This is an option for the State, but in involves enormous risks, which are never referred to by Diarmuid O’Flynn in his various correspondence.
(Update: See note at the end of the article.)
Principally, it would destroy the trust that exists between the Irish banking system and the ECB, would would leave the Irish banking system without a lender of last resort to finance its day to day operations.
It would also undermine the State’s credibility as a sovereign debtor, making it harder and more expensive for the State to borrow money to finance both current and capital spending.
Both of these outcomes would evitably push the State in the direction of Greece, and the inevitability of a euro exit.
Obviously, many people view that option favourably, but it is still an option that no one seems to be willing to be first to try.
Note: In 2013, the Promissory Notes held by the Irish Central Bank were replaced by long-term Government Bonds. The idea behind this move was that the repayment period could be extended and the bonds sold when market conditions were favourable, accruing a capital gain profit for the Irish Central Bank that would ultimately revert to the State. The same arrangement in relation to the deletion of the face value of the bonds still applies, however.
Antiquities have been the news in recent weeks. After being closed since the US-led Invasion of Iraq in 2003, the Iraqi National Museum in Baghdad re-opened, having recovered up to one third of the 15,000 or so priceless artefacts that were looted in the days and weeks after the fall of Saddam Hussein.
Further north, pictures emerged of members of ISIS using sledgehammers to destroy a different set of priceless artefacts in the equivalent museum in Mosul. That these events occurred within days of each other is co-incidental, but they remind us that Iraq is still caught in the “1 step forward, 2 steps back” loop that characterises so much of its recent history.
For the purposes of this article, it is worth noting that prior to the fall of Saddam Hussein, both these facilities were open, well-funded, protected by State security forces and under no threat of looting or destruction.
Unfortunately, museums weren’t a priority in the ensuing US invasion, and the preservation of their history was added to the long list of sacrifices Iraqis had to make for the gift of western-style democracy.
Iraq is not the only example of where enforced democracy has gone spectacularly wrong. In 2013, UK, French and American armed forces put an end to the regime of Muammar Gaddaffi in Libya, bringing hundreds of thousands of people into the streets to celebrate. Within 2 years, ISIS showed up there too, beheading Christians on a beach looking out across the sea to southern Italy.
Egyptians too have experienced the reality of political freedom for which they were not ready. After forcing the resignation of their perennial President, Hosni Mubarark, they decided to plunge themselves into a civil war, as one leader after another came and went without being able to turn Egypt in Surrey overnight.
Meanwhile in Syria, where the current regime as so far managed to resist a popular uprising, the expansion is ISIS is meeting its most stubborn resistance.
For many in the Middle East and North Africa, democracy has been like a dose of chemotherapy to treat a common cold. The regimes under which they lived all their lives were brutal and repressive, but the vacuums exposed by the removal of those regimes are being filled with extremism, not the rubrics of sophisticated self-governance that we are accustomed to in the west.
Many commentators warned of this outcome before the West began its project of benevolence in the ancient world, but such arguments wilted before the certainty that democracy was always the least-worst option, because it devolved power to the people, who must surely know best how to manage their affairs. The fact that the people in these places had no experience of democratic responsibility didn’t seem to matter.
Indeed, extending this critique of western democracy to western nations themselves exposes an ever decreasing certainty that self-governance has lived up to the promise heralded by the defeat of Europe’s 20th century dictators. In fact, it could be argued that our blind faith in democracy has more to do with the sacrifices of the past rather than objective analysis of its merits and demerits.
In 2 years time, US voters will go to the polls to elect a new President. Candidates on either side or the Democratic/Republican divide have already declared their interest. The most notable Republican candidate to is Jeb Bush, son of former President George Bush, and brother of former President George W. Bush. The most notable Democratic candidate is Hilary Clinton, wife of 2 time President Bill Clinton.
If democracy is supposed to be “government of the people, by the people, for the people”, it seems preposterous that in a country of 270m people, the possibility exists that 5 of the last 7 Presidents will come from just 2 families. Political lineage this tight would put a 16th century European monarchy to shame.
The rise of political elites is not the only issue with democracy in its current form. One hundred years ago, in advance of the rising tide of democracy around the world, income inequality was greater than it is today. As the decades passed, and people became more accustomed to self-government, income inequality began to narrow. Democracy seemed to be making a difference. However, since the 1980s, the gap has begun to widen again, and will probably soon reach the same level as 100 years ago.
The cause of this is public debt, which has grown like a toxic plume on political waters that democracy promised would be clean and pure. Politicians, ever-eager to convince voters that they can best manage their affairs, indebt their nations to stay in power, using the funds to keep people happy rather than grow their economies. The result is that the lenders (the wealthy) see a greater rate of return on their lending than the rate of growth in economies to which they lend, which expands their wealth over and above that of the average citizen.
Thomas Pickety has expanded on this is his now famous “r > g” formula, which dictates the rich will continue to get richer for as long as the average Joe Soap is allowed to borrow money from them, but instead of focusing on the mechanisms that permit this (namely sovereign debt), Pickety’s acolytes instead suggest some grand conspiracy in which a cabal of politicians and bankers plot the demise of civilisation.
Wealth and money are problems enough with self-governance, but these pale in comparison to even more complex problems like how we ensure our planet is habitable in a couple of hundred years . Its true that previous generations had to deal with very big problems (eg world wars) but ours is the first generation which has had to deal with a pan-national problem on which a clock is ticking.
Thus far, the democracies of western Europe have made inverse progress on dealing with Climate Change (emissions are still rising), because telling people that they have to use less, or more expensive, energy simply doesn’t fit with day to day requirements of electoral politics. Conversely, the country that is making the most progress in reducing emissions and planning for a post-carbon world is China, where there has never, ever been a contested election.
If your starting point is that the people who want power the most are the people you least want to wield it, democracy as a system of government is fatally flawed. Politics in the 21st century is an exercise in media management, which means that the politicians with the most money are those most likely to succeed. To go back to Jeb Bush, the media in US is currently more concerned with how much money he is raising rather than how he is proposing to govern the country.
It might be interesting to compare the process of electing governments to the process of deciding whether an accused person is innocent or guilty of a crime. In a jury trial, jury participants are carefully screened to confirm that they are not known to or involved in the life of the accused or the victim, to ensure that the decisions of the jury are totally impartial and based on evidence alone.
If we allowed the same rules to apply to jury selection as we do to Government, we’d have juries populated by people who were intimately involved with either the victim or the accused, and the outcome of the trial would depend not on the evidence presented but the composition of the jury.
Leaving aside everything we know about politics, if we objectively analyse alternative systems of running countries, in truth, many of us would choose a system in which those selected to perform the task of governance were entirely impartial, and would make governance decisions solely on the basis of evidence rather than hearsay or articles of faith.
A precedent for such a system of governance exists. Sortition refers to governance in which legislators are chosen by lottery. In such a system, there are no political parties, no political funds, no electoral promises or manifestos, no pork barrel spending projects and no whip systems. The people chosen to legislate are presented with evidence and make decisions on the basis of that evidence. At the end of their term, they are replaced by another group of legislators, again chosen by lottery.
Of course, like any system of government, Sortition also has its flaws. There is a supposed absence of legitimacy, in that laws passed by democratically elected politicians may be more widely accepted than laws passed by legislators chosen by lottery. This presumes that people’s national inclination to abide by the law is based on democratic legitimacy, rather than a more fundamental acceptance of rules based society, and ignores the fact that many laws passed by democratically elected politicians are widely flouted.
The is also an argument of accountability. Democratically elected politicians will typically have to renew their electoral mandate, and as such take account of the views of those who elected them when making legislative decisions, which is the bedrock on which parliamentary democracy is built.
However, when faced with decisions in which the national interest is at odds with some local sectoral interest, politicians will frequently place the need to be re-elected above the national interest, which is at odds with the design of self-governance. Sortition removes this flaw, because the a legislator chosen by lottery will never have to seek re-election.
If we go back to our starting point, that the people who want power the most are the people you least want to wield it, Sortition ticks a lot of boxes. In fact, Sortition establishes exactly the opposite situation: people who are selected by lottery to govern probably have no interest in governing, which makes them exactly the most suitable people for the job, in exactly the same way that people who have no association with the accused in a trial are exactly the right people to pronounce on whether they are innocent or guilty.
Politics as we know it is currently caught in a downward spiral. Elections are no longer fought on the basis of competence or vision, but on the basis of which candidates can lie most passionately about doing the exact opposite of what the sitting government is doing, even if that is totally at odds with the ideals of the candidate doing the lying (Socialists opposing property taxes is a good example).
This is the nature of democracy in the media age. Power can only be achieved by deception, and deception is best practiced by those who long most to wield power. As each government comes and goes, and the party that forms it gets found out of lying through its teeth, the electorate becomes more and more cynical, and more and more open to extremes.
In Europe we tend to view extremist as something foreign and historical, that could never happen in places like Berlin or London or Rome ever again. Residents of Mosul probably felt the same way when they were visiting their museum and libraries less than 15 years ago.
The Chairman of the Turfcutters and Contractors Association, Michael Fitzmaurice, has been elected to Dail Eireann.
Fitzmaurice is opposed to the preservation of any raised bog anywhere in the country, despite the fact that only a tiny fraction or our raised bogs remain intact. Specifically, he is opposed to a ban on peat extraction from 53 raised bogs which have been designated as Special Areas of Conservation. He is supported in this by Luke Flanagan MEP.
Fitzmaurice believes that the mechanical extraction of peat, which industrial equipment, should be allowed to continue unabated.
Part IV – Shifting Sands | Part V – Children in the Trenches
Children in the Trenches
Just outside Beaumount-Hamel, on the banks of the River Ancre in Picardy in France, the Canadian Government maintains a permanent memorial to the Newfoundland Regiment, who suffered 85% causalities on July 1st 2016, as they attempted to storm nearby German trenches on the first morning of the Somme offensive.
The soldiers of the Newfoundland Regiment, who had volunteered from practically every fishing village along the Newfoundland coast, were victims of both circumstance and incredibly bad luck.
Their planned attack was part of a wider attack along the entire front, but due to delays and various reverses, the other units who were supposed to attack at the same time were unable to do so.
Furthermore, the Newfoundlanders were not able to move up to the forward trenches, due to congestion from earlier attacks, and were forced to go over the top from a trench several hundred yards to the rear of the front line. These difficulties were compounded by the poor standard of field communications, where prevented seniors commanders from informing the unit to postpone its attack.
The result was that when the citizen soldiers of Newfoundland climbed out of their trench, they were the only unit visible from the enemy’s trenches, drawing fire from German machine gunners and artillery along a front of almost half a mile. They were also exposed for considerably longer than was necessary, having had to attack from a trench in the rear, which unknowingly silhouetted them against the skyline behind them.
Within 20 minutes, the unit was practically wiped out. No man reached his objective. Of the 780 men who had gone over the top, only 110 survived unscathed, and only 68 were available for roll call the following day.
The memorial to the Newfoundland Regiment is unique in the catalogue of memorials in the area of the Somme Offensive.
The area of the front across which the unit advanced was purchased by the Canadian Government shortly after the war, and is preserved today in much the same condition as existed at the end of the war. This includes the network of trenches which were used in the offensive, through which visitors can walk and peer over the lip.
It is difficult to imagine how any soldier could have had the courage to relinquish such cover, and expose themselves to the horror of German machine gun fire, which would have been fully apparent, given that the Newfoundlanders had remained in their trenches for nearly 2 hours after the general advance began.
Of all the memorials in the area of the Somme offensive, the Newfoundland Memorial Park is by far the most popular. During my visit to the area, it was one of only two memorials (the other being Thiepval) at which I saw children on school tours. It was perhaps inevitable that their attention was divided between the mass grave beneath their feet and their mobile phones, but it was at least encouraging to see that they were there.
The children on the school tours were British, both at Thiepval and the Newfoundland Memorial. I also encountered British school tours at the Vimy Ridge Memorial, which commemorates action from the Battle of Arras in 1918.
North Eastern France is a short ferry and coach trip from anywhere in southern England, so the prevalence of British school tours is inevitable, but it nonetheless gave me pause of thought.
Of all the European Union’s member states, the UK is clearly the most reluctant. Such is the antipathy towards the Union of British voters that the Conservative Party leader David Cameron has been forced into promising on referendum on European Union membership should the Conservatives form the next British Government.
On the one hand, this antipathy is understandable. Britons fought two wars against Germany during the 20th century (not to mention wars with France during the 19th century), so ongoing harmony between these neighbours was always going to be hard won.
On the other hand, it seems illogical. Britons who died in the European wars between 1914 and 1945 died because the political structures of Europe in the early part of the 20th century were incapable of dealing with aggressive nationalism. The self-interest of nation states was more powerful than any obscure concept of unity, and only when there was no one left to fight did the idea of unity gain any traction.
Today, that vacuum has been filled. The European Union has condemned militaristic nationalism to the scrap heap of history, for now at least anyway.
As they plot their way through the trenches of the Newfoundland Memorial, tapping messages on their smartphones and joshing with their classmates, I wonder does this conundrum reveal itself to any of these children. Do they regard the lives of the soldiers who died here, some of whom were their own age, as in any way relevant to the political choices they will have to make in future years?
And if they do, either now or as they reflect on their trip at some point in the future, will they be able to distinguish the significance of unity amid the noise of day to day politics and economic reality?
Their ability to do so, and that of their peers in other member states, which seems lost on many of our current politicians, will determine whether the Union survives for their children.
In the first decade of the 21st Century, Europe found itself in the eye of a perfect storm.
Globalisation had slowly filtered its way into the continent’s industrial heartlands, obliterating jobs in places that hadn’t known economic privation since the end of the Second World War.
At the same time, economic migrants from Eastern Europe were appearing in towns and cities throughout Western Europe, as the initial restrictions on free movement of people, included in the Treaty of Nice for the comfort of skeptical voters, expired.
Voters began to make a link between their declining living standards and the EU, as embodied in the free movement of people rules that allowed Poles and Slovkaks live in the same neighbourhoods as they did.
Then, in 2008, the Eurozone debt crisis hit, even deeper economic contraction ensued, and the countries of the European Union divided into 2 camps.
On the one side were the apparently rogue states, who had run up unsustainable public debt, and who now couldn’t borrow any more, forcing them to borrow from their more prudent neighbours, who in returned demanded painful fiscal reforms.
On the other side were the apparently more prudent nations, who had lived within their means, and who were now un impressed with having to bail out their seemingly profligate neighbours.
Every couple of weeks, the leaders of the member states seem to be facing down a new crisis, and the value of the currency plummeted as investors readily speculated that the Euro would not be a part of Europe’s future.
The credibility of the European Unions institutions, particularly the European Central Bank and European Commission, sank to new lows, as both struggled to explain they did not have the legal remit to make the decisions the media demanded of them, and finding a solution to the crisis was the responsibility of elected politicians, not bureaucrats and central bankers.
Gradually, as painful reforms were implemented, and risk adverse investors ran out of alternatives to sovereign debt, the crisis abated, and the Euro began to recover its poise and value.
The political fallout was more sustained, however. Both left and right wing governments were unceremoniously removed from power by angry electorates, pathing the way for further discord as their successors failed to live up to their grandiose pre-electoral promises.
Most notably, the European Parliament elections of May 2014 returned the largest ever quotient of aggressively anti-EU MEPs.
In particular, both France and the United Kingdom returned a majority of hard right and anti-EU MEPs (from the Front Nationale and UKIP respectively) while the Italian populist party, the 5 Star Movement, who advocate Italy’s withdrawal from the EU, and are led by television comic Beppe Grillo, also significantly increased its presence in the parliament.
Even Germany, ever the bedrock of the European ideal, managed to return a neo-Nazi MEP.
While euroscepticism had always been present in the European Parliament, it had never previously been regarded as a threat to the political mainstream. This European Parliament elections of 2014 changed that, and now Europe’s latest batch of political leaders, most of whom have no personal recollection of horrors of Europe’s military history, were tested on their commitment to Schuman’s ideals.
The results were not encouraging. First out of the traps was the French President Francois Hollande, whose Socialist Party had replaced the centre-right government of Nicholas Sarkosy in 2012. At the time of the European Parliament elections, Hollande’s popularity was at an all time low, after spending the 2 years since his election failing to deliver a series of spectacular pre-election promises.
In a televised address in the aftermath of the election, Hollande gushed with typical hubris:
“I am a European, my duty is to reform France and to change the direction of Europe.”
He elaborated on what he meant by “changing” Europe.
“This cannot continue. Europe has to be simple, clear, to be effective where it is needed and to withdraw from where it is not necessary.”
Hollande’s sentiments were echoed around Europe by other political leaders, but his intervention had a significance all of his own.
Firstly, Hollande’s comments have to viewed in the context of his startling fall in popularity, and his party’s abysmal performance in the European Parliament elections. Hollande’s political difficulties had nothing to do with the European Union, and everything to do with his mismanagement of both the French economy and the expectations of French voters.
Secondly, Hollande is the leader of one the Unions largest economies, and founding members, and of a nation that has probably suffered more than any other from military conflict. It is the same nation from which Robert Schuman derived his ideal of European co-operation, having seen at first hand the potential for destruction in the absence of that co-operation.
Hollande’s lurch into anti-EU populism, in an obvious attempt to shore up his political future, is a perfect example the primary threat to the future of the European Union, namely that Europe’s current political class, both Europhile and Euroskeptic alike, are not imbued with the historical significance of European unity, and instead regard the European Union as a convenient scapegoat on which to project the political failings of the respective nation states.
If the leader of France can so readily engage in self-interest, at the expense of a political project that quite literally saves lives, many of which would probably have been French, what hope is there for the continuing existence of the European Union?