Thursday, October 6, 2011

We're not done for yet

Ireland ranks 12th out of 82 countries in a new Global Creativity Index which puts Sweden at the top, followed by the United States, Finland, Denmark and Australia.

The rest ahead of Ireland are New Zealand, Canada, Norway, Singapore, The Netherlands and Belgium. Following us are the UK, Switzerland, France, Germany, Spain, Taiwan, Italy and Hong Kong. Israel, Russia, Brazil, India and China are middle ranked at positions 24, 30, 46, 50 and 58 respectively.

The Index was created at the University of Toronto as a more modern measurement of competitiveness and prosperity.

It is designed in the turbulence of the global economic recession as a broader way of measuring a country than the long-standing Gross National Product, which many social and financial experts believe has outlived its usefulness.

The Index measures in essence what the authors call the ’Three Ts’—Technology, Talent and Tolerance. It applies broader measures of economic prosperity, sustainability, happiness and subjective well-being than are done for GNP or GDP.

The technological aspects included are R&D investment, researchers, and patents per capita. On  talent the key element is educational attainment and the creative class. Tolerance is ascertained from surveys of the treatment of immigrants, racial and ethnic minorities, and gays and lesbians.

Without going into the nitty gritty of the Index, it must show that there's hope for us yet. If we win the Rugby World Cup, it should be worth a couple more rungs closer to the top.

Wednesday, June 29, 2011

Too much information

We're drowning in too much information.

About everything. But especially about the financial underpinnings of our way of life.

I'm a journalist. Have been for 35-plus years. I know that getting information out is not just important, but essential to making sure we are in some level of control of our destinies. It's the basis of what I have been doing for most of my working life. Besides which, it has given me a living.

Information is power. Spreading information gives power to more people. Making it absolutely available means that the power is with all the people.

Or does it? On another side of the coin, is it desirable? Maybe it opens up more possibility of manipulation? Or, less conspiratorially, mistakes?

Reporters, by the nature of what we do, need new stories every day. Even several times a day. On a slow news beat, we look towards possibilities. To avoid being bollicked by our News Editors. Who in turn want to avoid being bollicked by their Managing Editors. Who in turn ...

(Hmm—my iPad's word processor doesn't seem to understand the word 'bollicked'.)

Say, in a newsroom in America, a financial reporter looks at the situation in Ireland where (there's a potential that—in an as yet hypothetical situation) Ireland's economy has found itself exposed (again) to a (possible) substantial difficulty.

So our financial reporter fiddles around with some figures, comes up with possibilities, adds a dash of speculative future (hey, this is what the global financial market system does all the time, so there's nothing intrinsically wrong with this, right?). He comes up with a proposition that Ireland is (once more) on the brink of financial collapse (take out the round brackets in the par above and you have it). He files it and goes home (or to his favourite Irish bar on Wall Street).

The story is read by an intern in one of the financial rating agencies—Fitch, Moodys, Standard & Poor's. Take your pick (and ignore the wandering apostrophe). He hasn't yet got to the Irish bar, because he needs to provide a report before he can go. It is a given for somebody in his game that good news is not a valid report—financial rating agencies must be feared, or nobody takes them seriously.

On the basis of the 'potential/hypothetical/possible' but now 'factual because it is published' story, our intern downgrades Ireland's sovereign credit rating by a letter and then heads off to have an Obama-certified sub-standard pint of Guinness in the Irish bar.

The Wall Street Journal picks up the downgrading, and makes it a front-page, third column, below-the-fold item. The story is moved on by the news services. In most EU countries, they have much more to be involved with than stuff from Ireland, but it might make a 'kicker' for the next day.

The Night Editor on Morning Ireland on RTE Radio One hasn't yet realised that there's a jaded public out there in relation to Ireland's financial problems. He or she locks on to the latest financial bashing of the country. It's bad news, therefore 'good' news.

The next day the programme leads with the story. A brace of standard commentators—tame economist and on-the-make politician—are given space to fill. What they say becomes lead on the subsequent nine o'clock News. An hour later, Pat Kenny has a couple of different 'experts', working to make the matter more grave because otherwise nobody will hear them again. By the time the News at One broadcasts its version, Joe Duffy has Liveline listeners cued up to offer 'real people' views. Drivetime gets the hind tit, but that doesn't stop it from sucking furiously to get a last pull of the witch's milk before the country gets into Sport.

That evening, the Taoiseach, or maybe the Minister for Finance, has to deny—from an opposition query in the Dail—that Ireland is in even deeper financial manure. Denial is how small stuff gets longer legs.

What had been a mere 'kicker' in the European news channels now gains traction. It moves up the news schedule. Financial pundits are trollied out across the TV business spectrum. By the late evening, Ireland is further in the financial mire by a quantum.

A late desk American reporter picks up the story. It is something that will save him at his deadline ...

Nationally, and globally, that's possibly why we are where we are.

If we turned in our iPhones for smoke signals, we might be better off.

Sunday, June 12, 2011

Coffee with Joe

There's this guy. I'll call him Joe. Mainly because that's his name anyhow. Joe Bongiovanni.

Joe and his wife Helen like to sail their boat. Up and down the east coast of the US, and locally in Chesapeake Bay, where they live.

Helen's an artist. Joe is—

—well, hard to describe, really, what Joe does. Both he and Helen have reached the age where they get a Social Security pension. And Joe 'consults' sometimes. That's a vague description, because I don't know what he consults about. Though I suspect it's money-related.

Joe has this thing about money. He figures it needs a complete reinvention.

I got Joe's take on Money Reform over a wonderfully simple Italian dinner cooked up by Helen at their home in Harborton, Virginia. Helen had done most of the talking, catching up with her niece, my daughter-in-law, on family doings and undoings. A constant sparrage of words. Joe stayed quiet unless asked about something. Grey bearded. Lean, weather-browned. Laid back to a hippy level that nobody under 30 years of age might remotely recognise.

Then— "You're a journalist, I hear?"

Well, of course he would have. His niece would have set up the background to the people from Ireland she had brought to visit. We talked words and writing for a while, which led to blogs. I keep a few going.

"I do one too," Joe said.

"What about?"

"Monetary Reform."


Still, very soon we—well, Joe anyhow—were deep into the concepts of Joe's third passion, after Helen and sailing. I floundered a bit at the start on the idea of producing 'money without debt'. Fortunately I'm used to asking questions. And not embarrassed to admit it when I don't understand something.

Joe's father had turned him onto it. Had gotten into the idea himself when, as a local businessman, he had once asked his bank for a loan to expand his business. He was turned down.

"I employ all these other people," Joe's father had said to his unhelpful banker. "They all have loans from you. For their houses. For their children's education. If I couldn't carry on, they'd lose their jobs. What would happen to those loans then?"

The banker had shrugged. "I have collateral committed for those loans. I wouldn't lose anything."

Of course he wouldn't. And Joe's dad then understood the politics of providing money as a debt. The house—as the banker—always wins. That set him on a lifelong campaign on monetary reform. He didn't invent it. There were, and are, many others on the same mission on both sides of the Atlantic. He was so involved in it that he gave testimony before a government committee.

I didn't learn much more about Joe's dad, except that Joe himself didn't really accept his ideas until rather later in life. Finally, after his dad had challenged him to look at all the information and find any faults, he did so.

"And I couldn't disprove anything he said," Joe told me.

I had a difficulty during the whole encounter. I was the designated driver because nobody else was insured to drive the car I had on loan. Which meant I wasn't going to be able to drink my usual quota of red wine and thus keep up with Joe's flow of ideas.

But here's the short version. I mightn't have it absolutely right, but it's enough to be thinking about.

Basically, Joe and those who espouse the same ideas want the bankers taken out of the money production business. As things stood before the recent economic crash—and maybe still do—bankers were able to 'create' money to lend on the basis of having a fraction of that amount held in other people's savings. That's fractional capitalisation or some such description.

So, essentially, banking is a kind of virtual thimblerig, with nothing under any of the thimbles that represent money lent out at a usually exorbitant profitable rate. With the bankers—including the Federal Reserve Bank in the US, which Joe figures is just designed to make the whole shell game seem legitimate—in total control of the 'production' of money, there's no possibility of either citizens or their state not being in debt to a private enterprise.

What Joe and friends propose is a quite different way of doing the money game. Essentially by bringing back the 'sovereign' system of money production. "In the old days, the monarch manufactured money to pay for goods and services. I believe the state should get back to that, and produce its own money instead of leaving it to the private banking system."

Here's the thought. When a government sets out its budget for the coming year, it estimates what it needs to spend on the services required by the citizens. It then works out what can realistically be raised in taxes from those same citizens. Then it generally goes out to the private banking system to raise the difference.

The state is then in hock to the banks, and must find ways of paying back the debt. Sometimes with supplementary taxes, sometimes by cutting services, sometimes by rolling over the debt. Often a combination of all. "Money raised by debt," Joe says. "And outside the control of either the state or the people."

Instead, Joe proposes that the state 'creates' its own money as required, as did the sovereign monarchs of old. There would be a 'public money authority', which would determine the amount of money required to provide for what economists call the potential for national economic growth (GDP). Once that new-money amount is determined, then the taxation amount is the result of 'expenditures minus new money'.

Sure. But money is an artificial medium, which must be based on something of value. Preferably productivity, or the old way of pegging it to something made valuable by scarcity or high value useablity, like gold. Otherwise it's just a piece of fancy paper, signifying not much. Money is something which we trust as a promise that underpins the value of each of us in a format more negotiable than the barter system. Start printing it beyond real value and you're heading towards the kind of hyperflation in Germany that ended up bringing Hitler to power.

Joe agrees. But his premise is, I think, that by the state creating the money to make up the difference between tax income and necessary services to keep the country operating in a manner that will promote growth, it is betting on the entrepreneurial spirit of the citizens to provide that growth. So it is 'created' money based on the potential of a vibrant economy. Therefore without the risk of the inflation that required German citizens to take home their wages in wheelbarrows.

And the bankers are out of the loop. At least in the finance creating end. They become simply the agents of fuelling growth by lending money which they haven't manufactured on margins. Rather it is the savings of those paid to provide the state's services, and those who run businesses with the help of those services. The taxes of both revert to the state which created the money in the first place, thus decreasing further the inflationary effect.

The politicians are out of the loop too, in terms of the creation of new money. Simply because otherwise they'd be tempted to print new money as a political policy, instead of making hard and practical decisions on taxation. "By having an independent monetary authority, the new-money amount is independently determined away from the political process. And the continual summing of new monies determines the permanent money supply."

Right, it is surely much more complicated than that. But I only had one short dinner at Joe's house. To get the whole thing in some better perspective, it is worthwhile to look at Joe's blog. Mostly video-based, it's a weekly chat with a colleague about today's financial situation, in a very laid-back format.

Google 'Coffee with Joe'. There are gems of wisdom there. Which I need to absorb myself.

In the meantime, Helen's Bolognaise pasta is beyond the value of anything we discussed that night in steamy Virginia.

NOTE: Subsequent to my musings above, Joe sent me a quote from Robert Hemphill, a former Credit Manager with the 'Fed', or US Federal Reserve Bank. He sums up a situation that is really kind of scary. Well, very scary.

"If all the bank loans were paid, no one could have a bank deposit, and there would not be a dollar of coin or currency in circulation. This is a staggering thought. We are completely dependent on the commercial Banks. Someone has to borrow every dollar we have in circulation, cash or credit. If the Banks create ample synthetic money we are prosperous; if not, we starve. We are absolutely without a permanent money system. When one gets a complete grasp of the picture, the tragic absurdity of our hopeless position is almost incredible, but there it is.

It is the most important subject intelligent persons can investigate and reflect upon.

It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon."

Sunday, May 8, 2011

Ads that make me worry

Obviously, given what I do, I am naturally inclined towards the unfettered dissemination of information. That people have the right to know, and on the basis of knowing can make up their own minds, about all sorts of things.

And in general, in this country we have a fairly free access to much in this regard, notwithstanding the blatant actions by the last Government to make the Freedom of Information Act too expensive for ordinary people to use.

But I have for some time been perturbed by a series of 'public information' advertisements which run on RTE Radio. I believe they are designed to manipulate our fears.

They are the 'medical problem' ads, urging us to have investigated a whole range of potential ailments, from erectile dysfunction to bowel cancer and stuff about practically every other part of our body in between.

I have no problem with people being encouraged to be pro-active about the state of their health. There is no truism more true than that a health issue caught early has a much better chance of being successfully treated than if left to fester quietly until later. Lives, and money, can be saved by making us aware of potential problems within ourselves.

What bothers me is the proliferation of these ads, mostly on radio, over recent years. Not because we are being pushed to investigate if we have the symptoms of the particular issue being aired. Rather because of who is pushing the issue.

Public health information provided by the State, whether through education or through such advertisements, can only be regarded as positive. But are these ads being provided by the State altruistically as a public service?

Because at the end of each one, you will have noticed that they are sponsored by one or more pharmaceutical companies. Each of which has a vested interest in fuelling health angst about the subject under discussion.

I remember being told some years ago, by a friend involved in the retail pharmaceutical business, that there was no money in being a local chemist until the era of 'preventative' rather than only 'curative' pharmacy. In other words, we now spend a lot more money on taking stuff to prevent us getting ill than on dealing with illnesses.

My bottom line on this is, rather than depend on the support of — and therefore the advertising of — pharmaceutical companies to provide such public health information, it should come independently and paid for out of a public health budget.

Am I being too picky?

Monday, May 2, 2011

Bertie on the (China) ball

Wondering what Bertie Ahern was up to last week?  

Well, as his economic legacy here continued to melt down faster than a nuclear reactor with a faulty regulatory system, he was busy congratulating the Communist leader of a province in China on their economic progress.

Our man of the yellow suit was dressed more soberly to chat up Zhang Baoshun, secretary of the Anhui Provincial Committee of the Communist Party of China(CPC), in Hefei, Anhui province, on April 28. He was leading a delegation sent by the Ireland China Cooperation Council (ICCC).

Describing Mr Ahern's promotion of Sino-Ireland ties as 'unremitting', Zhang said Anhui province and Ireland 'complement each other' in economy.

(Rich man, poor man?)

Bertie said the ICCC will strive to promote exchanges and cooperation between Ireland and Anhui province.

The Irish delegation was due to sign an investment memorandum about co-establishing a European industrial park with the Jiangbei Industrial Centralization Zone.

Good to know that, far from resting on his own laurels, and taking a break between Bank Holidays, Bertie was still working his butt off for us...