As many readers of this blog will know I work for a research group in Waterford. I also have a gallery, have trained as a mediator and do a spot of IT consultancy in my spare time. I pay all my taxes and work a ridiculous amount of time during the week. I guess that, whatever philosophising I’ve done to the contrary, I’ve officially joined the rat race with the reasonable goal of wealth generation.
As part of my day job I help to create wealth for Ireland Inc by creating joint ventures between Irish industry and academia. Generally this involves getting software developed to a high standard such that the companies can help find new business opportunities, create wealth and employment. We do a good job and employ many people who have previously worked in a range of industry roles. We’ve organically created over 200 high-tech jobs in the South East. That is without a doubt a major success story and something I’m incredibly proud to have participated in.
My co-workers are demonstrably not passengers. Not so-called “public sector parasites” and all work well in excess of their expected weekly hours because they like their job, they NEED their job and they’re commited to what we do. We have NO baseline funding so anything we get is gained through competitive funding process against academics and professional research groups from every country in Europe. I have heard several ministers refer to our work as a pillar of the knowledge economy.
Our pay is not wild and we don’t get things like bonuses, share options or other private sector perks. Private sector workers have conveniently forgotten about these former benefits over the past few months. We regularly travel on the weekend. We don’t get overtime. We don’t have a “grade” and we’re not entitled to guaranteed grade increments on top of inflation. If this doesn’t seem like the public sector many of you love to hate then I’m sorry. Perhaps you should look for bogeymen elsewhere. We had one ace which was the entitlement to a defined benefit pension. However, even that was a bit odd as the ultimate aim of many of us is to setup a campus company.
Today the Taoiseach succinctly made the point to us that rather than punishing malfeasance by bankers. Rather than ending section 23 tax relief schemes. Rather than any other measure that might actually improve the economic situation he’d decided that all public sector workers, us included, were to be forced to pay an additional and substantial new income tax under another name. The second time in a few months a member of the government has invented a new term for taxation. It makes the late nights all worthwhile! Some of us have tried in the past to opt-out of the pensions scheme as we thought we’d reasonably manage our own over a long career. Ultimately, there’s little point if you plan to leave the public sector anyway. Yet, it’s nigh on impossible to opt out of the state pension scheme as my friend jonathan brazil will attest.
The Irish economy is a complete mess. All this measure will do is appease private sector employees who have taken pay cuts or are about to be let go. I sympathise with them but the obsession with blaming the public sector is unhealthy. The major public sector pay increases came at a time of seeming prosperity in the country where inflation had run rampant and pushed the price of an average Dublin semi to the same cost as a nice chateau in France. Thanks to the Irish Times we got a new comparison every week to make us feel bad. Private sector workers were happy with their bonuses then and they contributed to the lunatic property bubble that’s now tearing Irish society apart.
During recessions people always look for someone to blame. Foreigners, a cartel, a profession, a religion.. the list is endless & the targets are easy. Ireland has the public sector. It’s an easy target as there are endemic problems which need addressing such as the need for performance related pay and the disparity in terms between some fixed term and permanent public sector employees. These have been well covered elsewhere but the first step to recovery is admitting there’s a problem.
In typical Irish fashion the angry private sector mob can now look on and be comforted that someone else is getting screwed too. Is that not the history of this sorry sod? The ultimate result will be less spending, less consumption, less indirect tax revenue, higher personal taxes and lengthening dole queues as most of the retailers in the country go broke. This is not alarmist. It’s happening as I type. The only message that the present government have clearly sent to world leaders is “We don’t know what we’re doing, god/IMF help us”.
The message to the people is one of arrogant indifference. As I said in a previous post it’s about time that change came to Ireland. Economists like McWilliams, Hobbs & Aherne have pointed out that the government risks turning a recession into a depression by acting incorrectly and destroying public confidence. Mission accomplished!
Did it ever occur to BIFFOT that many younger public sector employees would actually be happy to opt out of a defined benefit pension scheme. How long can such a scheme continue? The main reason the defined benefit pension looked so friggin great is that the government SINGULARLY FAILED to implement an EU directive requiring them to safeguard employers pensions. This has recently been discussed in the wake of the Waterford Crystal collapse.
A good if pessimistic solution to surviving the current economic crisis has come from Eddie Hobbs. When asked what the youth of today should do he advised them to “get the hell out of Ireland“.
In a time of hardship the people of any country look to their leaders for statements of principle and solutions. Something to keep them going. Cowen is describing income tax increases as a “fightback by the economy”. He has no rational economic basis for describing it so. It won’t fix most operational problems of the public sector while hastening economic contraction. We need some real ideas for creating growth and stimulating the economy. Our banks may fail ANYWAY if consumer confidence is destroyed. Some of them are little more than financial rubbish bins at this stage.
Our most skilled knowledge economy workers will be the first to leave the sinking ship. Who should blame them? Look at what we’ve seen over the past few years. The never ending tribunals costing hundreds of millions to the tax payers to investigate corruption in public office. How we wish we had that 400+ million back now? A financial regulator with the lightest of touches. A cartel controlled Dublin property market. The price of houses soared and degraded the quality of life. All the while, we were told we’ve never had it so good. The celtic tiger was veneer through and through.
Sure there were real achievements. We shouldn’t overlook the excellent work we’ve done in getting FDI from foreign multinationals and building some decent indigenous industry. We got these on merit. Revisionism may suggest it was all tax but that’s not the case. The Irish are thought of as an inventive and dedicated bunch. At least we were until the recent financial scandals. Yet much of Irish business is now being exposed as the trading of phoney wealth amongst ourselves. This is not sustainable. Eddie Hobbs was just raising a valid point for Irish youth. Perhaps the real opportunities are elsewhere?
Not for the first time in Irish history a generation may leave because of the incompetence and corruption of their leaders…
It goes without saying that the views expressed here are my own and do not reflect the views of my employer any commercial entity I’m associated with. They do reflect a personal despair for the values of modern Irish life and those we have elected to legislate & manage our country.
Author: shaned
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IRMA v Eircom
I can’t help but think that the settlement reached in the IRMA v Eircom case is going to be bad for Irish citizens. It’s not clear to me why Eircom capitulated but I presume their legal advisors believed a win was unlikely. . Silicon Republic has a piece here regarding the recent “landmark settlment”
The settlement isn’t actually a “precedent” as such but it does make it unlikely that other ISP’s wouldn’t atttempt a defence suggesting they didn’t have any responsibility for their customers’ actions using their access networks. Pity, it’s a bit like holding the roads authority liable for losses arising from bad driving. Maybe that would be a good idea 🙂
The problem that I have with this settlement is that it’s private in both its complete terms and the outline of its implementation. It’s unclear how Eircom will implement the suggested 3 strikes policy. I simply don’t trust the music companies or any company they subcontract to reliably identify those participating in P2P filesharing activities. Recollections of unscrupulous activities on behalf of the RIAA abound.
Evidence of false accusations arising from a similar activity in the US have already been documented. See el reg for more info. .
So under the recent settlement, as it’s been detailed so far, an Eircom ISP customer can be disconnected based on accusations, nothing more. The state is not involved in investigating and verifying these accusations. No coherent case is necessary beyond a computer log provided by DetecNet or whoever is subcontracted to provide this service. Quite frankly, that sucks.
Readers of this blog will notice that I normally come down hard on all forms of “freetardation” or the belief that people should be able to rip off other people’s products because it’s technically possible to do so. I’m not sorry for the publishers who find themselves as technological dinosaurs struggling to adapt. Their businesses will change. Some will prosper and some will die. Technology will always dramatically change some businesses. It’s the artists I feel most sorry for as they should be rewarded for their creative works.
This settlement doesn’t really further their rights however. The EU Parliament has already voted against such 3 strikes rules which have been introduced in France. Also described here. The EU parliament reasonably decided that only a judicial process should be able to disconnect someone from the internet. This is reasonable for democratic reasons. Think about the democratic abuse possible when citizens can be disconnected based on unsubstantiated accusations. If it happened in China we’d be agressively pointed fingers.
However, the European Commission, are doing their level best to overturn the amendment which would remove all obligation from ISP’s for content filtering and summary disconnection. This, in a nutshell, is why I’m going to vote NO for a second time to Lisbon. The European Parliament undoubtedly has a conscience but the Commission panders to big business, the larger EU countries and isn’t too concerned with the idea of separation of powers.
The media publishing companies might be over the moon but we now have a settlement where a disproporationate penalty can be imposed on any individual or business which is accused of engaging in this illegal activity without the oversight of the judiciary. Just because the publishers are sustaining loss doesn’t mean they should be able to act unilaterally or suspend the judicial process.
I sincerely hope one of the Irish ISP’s decides to fight this case rather than acquiesce.
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Us and Them
I notice that the private sector have now decided they’re supporting the public sector who are being described as “parasites” or “wastrels” by some commentators.
The whole private sector supporting the public sector thing is a bit of a crock. In effect both private and public sectors getting loans they couldn’t afford to buy houses that were over-priced and giving the government over a billion in stamp duty a year was a huge part of the problem.We’ve been living on an overdraft often provided by Arab and Chinese investors for the past 15 years.Our public sector didn’t look disastrously expensive to the exchequer when everybody was all spending like there was no tomorrow. Unfortunately, tomorrow came.
So now we’re figuring out who to blame when nobody is spending in an economy reliant on spending and extravagance for tax revenue. Spending has decreased much more than unemployment so it’s not that everyone is on the dole. Are we so much poorer on a monthly income basis than in 2007, excluding asset value from houses? I don’t think so. Spending is depressed as people have actually started to think about saving based on a panic and an inability to get more debt to fund more things they don’t need. This isn’t the fault of public or private sectors. In particular a big chunk of the shortfall is a collapse in the housing market, the biggest sign of our extravagant tiger years. It’s not that nobody can afford to buy houses anymore, it’s that the prices haven’t dropped far enough. The only people who don’t publicly admit this are auctioneers and/or politicians. There’s a lot of overlap between the two 🙂
I’d contend that there’s something worse than mere deflation, it’s long term consistent deflation. It’s depressing and discourages all sorts of investment. David McWilliams suggestion regarding a 20 year moving average for property valuations is one mechanism of drawing a line in the sand regarding the current house prices versus their actual value. Helping developers to cling on to delusional notions of a recovery in property value is actually only harming the situation. Everyone is waiting for the collapse so nobody will buy now. The end result is that the property chain is frozen and stamp duty revenue is being lost.
Now that the builder bank is nationalised, the government could call in NPL’s and put the resulting already developed properties to auction to find their true market value. We’re better off to get people buying at knock down prices now than to perpetuate a bluffing game that’s already gone on for more than 12 months. At worst we’d confirm what the markets believe, that our banks face a huge asset write-down. Remember that perpetuating this is now costing every taxpayer in the state as we’ve guaranteed the interbank loans of these banks. Whatever our investments are used for it shouldn’t be kicking out maturities or allowing interest holidays for breakfast roll men while they wait for pigs to fly and the market to recover.
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Blue swan with pink spots
Could perhaps be created using genetic engineering in the future 🙂 I’ve been reading Nassim Taleb’s The Black Swan. It’s an engaging book once you get beyond the pages and pages of insults directed against professional statisticians.
They key point could be summarised as follows. Professional statisticians have become obsessed with applying gaussian distribution models to real world phenomenon which don’t match the model for a range of reasons. Primarily the gaussian model attaches a lower probability to rarer events than is actually the case in many real world phenomenon such as degrees of wealth. When these models are used for prediction and risk management the results may be acceptable when making predictions about data close to the median but are hugely error prone about rarer conditions. The seeming success of the model in limited predictions promotes over-confidence and encourages further bad predictions.
Mr. Taleb goes on to point out that Mandelbrotian randomness more accurately depicts many phenomenon as it allows for greater deviations within a sample and more probable outliers. The point is made enthusiastically and in an idiosyncratic style. It’s accessible in a way that encourages most people to understand the contents and query current models for market analysis. It’s not an in-depth mathematical treatise and this is ultimately a weakness given some of the grand claims. However, Taleb’s rage at the amount of bullshit spouted by should-know-better financial and quantitative engineers is understandable. You only have to watch market analysts in programmes on CNN, MSNBC to figure out that, with a lot of jargon, there’s often not a lot of actual knowledge or understanding. Differences of opinion and rude/crude arguments abound but few of the experts called the current crisis. What’s the point of accepted financial models if they’re not just unsuccessful at predicting (a very hard task) but cause risk to be discounted (a very bad thing)? The Black Swan is essential reading for anyone who’s blithely applying statistical models to whatever economic, marketing or social science application they’re working on. It should give them pause for thought.
So, back to my headline. Mankind are great at producing huge inequalities and surprising outliers. History is littered with them! The more power we achieve over our environment and, indeed, our genetics the more probable the improbable becomes. I’d content that the number of potential black swans increasing (if that isn’t too wild any idea). Not in a linear way of course. More of a giant leap, black swan, kind of increments 🙂 We’ve found black swans on the moon, black swans in space, black swans in the earth, on the earth and with genetic engineering we can create human black swans. Scary.
So the current market models are deeply flawed. Indeed they don’t seem so much models as talking points for TV debates. Who predicted the crisis? Currently in the “Deep Financial Shit is Nigh” hall of fame are international players like Peter Schiff, Nassim Taleb and local players like David McWilliams, Alan Ahearne and Morgan Kelly. Very few economists correctly predicted the current crisis nationally or internationally.
I believe one reason for this is that it became fashionable for these most miserable of analysts to predict boom followed by a soft landing. Economists by their nature are supposed to be pessimistic and risk aware. They should be over-predicting recessions, which is the butt of the famous economist joke.
“An economist is a person who predicts 10 of the last 3 economic recessions”
In this case, there seems to have been an international fear of being caught out in predicting an end to this boom, fueled by financial innovations in the bond market. Many economists simply suspended disbelief even when scandals like Enron encouraged skepticism. Conversely this old joke gives the lie to the belief that economists create recessions. They make predictions and pass comments. Some may add to recessions and further despair but if they could really create economic turmoil then their predictions would never be wrong!