Ciaran’s Peculier [sic] Blog

In a report the National Competitiveness Council has once again drawn attention to the lack of competitiveness in charges amongst the professions and locally-traded services. The council has been highlighting this for years and pointing to its manifest dangers to the Irish economy.

 But one fears that Dr Thornhill and the council, while sincererly committed to greater competitiveness, are whistling in the wind.

NCC chairman Don Thornhill

By professions we understand such services as those provided by doctors, dentists, accountants and other financial personnel, lawyers and architects. By their definition these are self-regulating professions, so no outside agency such as the legislature can tell them what to do; Furthermore, the vast majority of the senior cohort of most of our political parties, who in turn form our legislature, are members of these professions, so nothing will be done to rein in their anti competitive behaviour.

This morning I head a programme on the BBC World Service about microfinance: the provision of small, unsecured loans for business and investment outside of the conventional commercial banking system.

Most of what I know about microfinance comes from my studies of the Grameen Bank in Bangladesh. This was established in 1972 by economics professor Muhammad Yunus – thereby proving that not all economics professors are heartless drunkards. Yunus found that in a village in Bangladesh many small craftspeople were sunk in poverty for, in spite of their hard work, lack of access to small amounts of capital mean that they were prey to loan sharks and usurious practices. Of course, the established commercial banks didn’t want to know such small fry. Indeed they would have been brushed away brusquely from their shining corporate headquarters. The actions of such institutions were dominated more by social prejudice than by commercial good sense. Muhammad Yunus found that by providing loans without demands for collateral, combined with education about budgeting, the recipients were able to reap the rewards of their labours. While they didn’t become rich, they were rescued from the abyss of poverty, and what’s more the repayment rate for these loans has continued to be in excess of 90 per cent.

The idea of microfinance isn’t new in the developed world, only here is has usually been called co-operative credit and is frequently

Yunus: a decent economist

 identified with the credit union movement. In Ireland this has done much good. People will remember the difficulties the Credit Union movement faced from former Minister for Finance. Charles McCreepy. It is sadly only to be expected that our government will always side with the big bankers. It’s the old golden rule: the man with the gold makes the rule.

The commercial banking system is only interested in making larger and larger mounts of money. It can then spend these on the absurdly high salaries of its higher executives, who seem to believe they have a God-given right to be rewarded for their incompetence and recklessness. They have to have oodles of cash to spend on their expensive prostitutes (5k a night is bargain-basement rates there), as well as enough money to bribe politicians and capture regulatory bodies. At this time the whole of the Irish government is a hostage of the bankers.

There are worrying clouds on the horizon for microfinance. For decades it was viewed with derision by commercial banking. However their eyes started to sparkle at the high repayment rates, which no one in the developed world could even dream of. And so big banks started to push funds in the direction of those poor, filthy, illiterate souls they had formerly seen fit only to spit on. Some in microfinance organisations worry that the apparent splurge of available funds may actually undo the spirit of thrift and frugal economy built up by them amongst their clients. If Ireland is an example, we have seen how the sudden availability of money to previously poor people often leads to waste and the squandering of resources on useless baubles,

Monkeyman Cowen has once again shown himself to be the miserable pathetic Scrooge. His reply to Gilmore’s question was the

Better looking than An Taoisech = and more decent

long-winded and rambling equivalent of “Baah Humbug|”

 What a pity there isn’t a general election in the offing. I remember the time when Charlie McCreevy paid the Christmas bonus early in a vain attempt to win votes. I was in Dublin at the time and I remember you couldn’t get into a pub.

 We are being ruled by a pack of dishonest, lying criminals. Worse, they seem to be acting like hostages to a group of unseen eminences grises in the Department of Finance and the international finance community. In fact, they are showing advanced signs of suffering from the Stockholm Syndrome, where captives become partisans of the aims and objectives of their captors. The aims of those holding our government hostage are simply to excavate yet deeper the chasm between the haves and have-nots, and to consolidate the super-rich in possession of their wealth. It has nothing to do with economics and any attempt to say it has is purely mendacious. Cowen and his cronies continue to spin this lie about a drop in the price of consumer goods. This is based on data provided by the Central Statistics Office, a group in need of a long-overdue reality check. A basket of basic items deemed just satisfactory for nutrition and human health is aggregated. This may be going down, but the items in the basket do not correspond to many people’s ideal of a worthwhile and meaningful lifestyle. The choice of a more realistic basket would indicate that prices are going up. But what Cowen and his cronies are saying is that poorer people must be forced to choose the most basic items – they, as poor people, have no right to any other aspiration.  This has been termed the “collard greens” syndrome, because traditionally it was believed that the aforementioned brassicas were a prominent part of Negro diet in the US. Consequently, as many poor people in the US are black, collard greens were part of the basket of items on which consumer prices were based, even though many poor people wouldn’t touch them, preferring other more flavoursome vegetables.

 It is unjust that the fates of hundreds and thousands of people should be based on the ill-informed decisions of a group of statisticians.

Yes please, bring it on baby, at least some of them.

 Fine Gael leader Enda Kenny’s proposal to scrap the Seanad if in government is nothing short of a piece of hypocritical populist

They've killed Kenny - the bastards

posturing., not so much a red herring as a blue herritng.

 Enda Kenny surely realises the importance of the Seanad in the Irish political system, where it acts as a rest and recuperation home for TDs of all the three political parties who have lost their seats in the lower house. It also operates as a testing ground where aspirant members of the lower house can gain exposure, not to mention an endless supply of postage-paid Oireachtas envelopes, which will hopefully translate into success at the next election. And then there is “The Taoiseach’s eleven”, an evergreen source of patronage. Many, many years’ ago, when I was involved with The Organisation, I had to write a letter to then taoiseach Charles Haughey extolling the virtues of a would-be Seanad appointee, the most important of which was that he was the father of eight children. There was no hint in the letter that the man’s off-springs were facing incarceration in the poorhouse unless their parent were elevated to the upper house. Indeed I know one of the man’s children; he has used his hands and feet to has attain great and well-deserved success.

 Now let’s be honest; Enda has no more intention of getting rid of the Seanad than he has of joining the Hare Krishnas. This is all about deflection. It seems to have caught hold as a topic of media discussion, which helps take the limelight away from the fact that the Fine Gael party support the viciously incompetent, scorched earth economic policies of the present government – and why wouldn’t they? They are good, honest-to-God Blueshirt policies.

 What’s more this Seanad red herring may take attention away from the alacrity with which Fine Gael councillors are grabbing jobs for their families at local government level – larceny as great as any Fianna Fail or Green party minister at national level.

 But let us give credit where credit is due. The intellectual and professional pre-eminence of  relatives of Fine Gael councillors is awe inspiring. They possess some unique piece of internal genetic engineering which may be revealed one day when the mapping of the genome is finally completed. The scope of their abilities is truly kaleidoscopic, spreading from ward assistants in hospitals, to social workers through to Research Officers in crummy local museums. Just what is it that puts them head and shoulders above the relatives of councillors from other parties, or those people not related to councillors at all?

What a great coun try we live in. The poor, the disabled, the vulnerable are expec ted to pay for the arrogance, the incompetencwe and the greed of a super-wealthy elite. The people who are overseeing this is not some foreign government but are own legislato9rs.

This is the equivalent of the semi-starving cottiers of the ninteenth century having to pay exorbitant rents so as to supply the absentee landlords with money that they could fritter away on  the gaming tables of London.

Is this was Patrick Pearse died for? Where were the bankers in 1916?

The Public Spending Paradox is a feature associated with an important part of the economies of western countries. Unfortunately, it tends to be overlooked by many economists whose models and understanding are based on clear, measurable ,numerical variables. The true extent of the Public Spending Paradox often relies on rather complex even “fuzzy” variables, which may not be easily measured. What’s more it also relies on that most troublesome form of data – anecdotal evidence.

Put simply, when a government announces say a ten per cent increase in a specific area such as health, the people in whose interest the increase has been made (the sick etc.) don’t see any real improvement in the service delivered.

Let’s stick with health spending. The UK government has announced various increases in spending, yet hospital patients are still plagued by a host of problems, from bed shortages and inadequate clinical cover to problems like misdiagnosis; regional health trusts still report deficits leading to ward closures. Now if the government were to announce a ten per cent cut in health spending the results would be far more immediate (and no less dramatic), with widespread hospital closures and withdrawal of services such as physiotherapy.

In other words an increase in spending leads to indifferent results and no very clear cut improvements for the sick, whereas a cut leads to immediate disimprovements and hardship for those relying on the health system.

What is true of health is also true of education and the social welfare and training sectors, and what is true of our sister isle is very much true in Ireland.

The reasons for this? Well these areas are part of the public service and are dominated by hierarchical systems and bureaucratic mindsets. Inflexibility is the order of the day. Rules and regulations are to be observed tout simple. There is just no point in questioning them.

An increase in spending is like pouring water on a sponge above the mouths of the very thirsty. Now some will eventually trickle through the sponge and into the thirsty peoples’ mouths, (who incidentally are tied to a chair, so if the water coming out of the sponge is insufficient they can’t raise their hands to administer a vigorous squeeze.) And let’s not forget a not inconsiderable amount of water stays trapped in the sponge.  On the other hand a ten-per-cent cut means that no water it poured on the sponge and the thirsty people can cry all they want but no water will come out of the sponge because none has gone in (well hardly any, except for “essential” salaries), and all things considered the best thing is possibly to shoot the poor bastards to put them out of their waterless misery, so long as the petty cash extends to the bullets. But remember, the sponge remains: it’s a vital part of the system.

So public sector cuts in areas like health, education or social welfare hurt – far, far more than any comparable increases. Anyone who denies it is a bit like the parsimonious dentist offering cut-price extractions and fillings because he’s saving on anaesthetic. “I promise you, you won’t feel a thing, and you know it’s for your own good so open wide…”

I have the greatest of regard for some economists, people like Mohammed Yunus (founder of the Grameen Bank) and Oxford’s Professor Paul Collier.

 Sadly the aficionados of the dismal science in Western Europe have been taken over by nasty ideological corner–boys, puppets of the likes of Hayek and Friedman. Many of these people have never read Adam Smith’s Wealth of Nations – otherwise they would know what a contradictory book it was, albeit one penned by a genial Scotsman who did not wish harm on his fellow men.

 The McCarthy report could be summed up in one word, but, because I’m anxious not to encourage bad language I’m reluctant to use any of them.

 It is a rather tired and predictable recipe based on Reagano-Thatcherite principles. It is unoriginal and unimaginative.

 It is also cowardly as its recommendations seem to rely for their effectiveness on the Public Spending Paradox. They attack unfairly the weakest in our society, the sick, the poor and the nation’s children – those who cannot be blamed for the economic morass in which the country stands and who never benefited during the years when the Celtic tiger was roaring. But of course attacking the poor and the vulnerable is music to the ears of some right-wing commentators.

 More than anything it is dishonest. First McCarthy speaks about the almost imperative need to cut spending in areas like health, education and social welfare. One would assume that spending in all these areas stood on a high plateau of government generosity. The fact of anyone with exposure to areas like health and education is that they have been suffering for years from cutbacks and indeed cannot endure any more.

 But the report’s greatest dishonesty is in its aims; to pull the country out of an economic quagmire and restore it to health. Nothing could be further from its goals, which are to entrench and consolidate the economic hierarchy of this country, while strengthening, deepening and widening the gaping inequalities in Irish society. Put in fewer words, it’s about making sure the rich stay rich and the poor get poorer. This is why the report has been taken up with such unashamed glee by the right. McCarthy has pressed all the right buttons, or more accurately he has pressed the right button – he wants to cut social welfare payments. Indeed, it is only because he is too afraid of antagonising the liberal lefties that he has not advocated the real solution: cutting social welfare payments altogether and forcing the work-shy to work while throwing the poor onto the good offices of groups like the St Vincent de Paul society.

 Income disparity is a fact of life, and within reason it’s not necessarily a bad thing. This is not the form of inequality I’m talking about. The worst form is the way many jobs are held by people who try to shield their incompetence behind some self-important title. These people, more often than not, owe their positions to family and political connections. Others who would be far better in the jobs are confined to the bottom rungs of the economy and society, frequently have no jobs and are denied an opportunity to make a worthwhile contribution to society.

 We all know about the “haves” and “have-nots”; contemporary Ireland is about the “always-haves” and the “never-haves”. Why is it that those lucky to be born near the apex of the economic pyramid can take hope for granted. They know that hard work will be rewarded and even mediocre effort is tolerated. For those who are disadvantaged, whether by economics or say by disability, labour as hard as they might, they will never break out of the bottom rungs, so the smarter ones just don’t bother.

 I hate always reverting to personalities but I cannot but say there is something seriously wrong with a society that allows a person with a doctorate, who has written nine books plus over a hundred articles, speaks a dozen languages, to languor at the bottom, dependant solely on a miserable blind pension which he expects to be cut still further.

 I want to finish by asking a question of a historic personality, Patrick Pearse. What the hell did you bother for?

During the height of the McCarthy era in the United States labour leader Walter Reuther is supposed to have said. “If it looks like a duck, walks like a duck and quacks like a duck, then it just maybe a duck.”

Here in Ireland we are living through our own McCarthy era, heralded by the appearance of Colm McCarthy’s cowardly,  dishonest and unoriginal report on the Irish economy.

(I would just like to paraphrase Reuther’s remark. “If it looks like a drunkard, talks like a drunkard … then it just maybe …”)

I know that not all economists can measure up to the oratorical panache of Ralf Dahrendorff or the engaging presence of the late John Kenneth Galbraith. But I find Colm McCarthy’s delivery repulsive. Had John Maynard Keynees ever met him he would have recolied in horror, while Milton Friedmanwould probably hvw called security.

He speaks with a  broad Dublin accent. Now after having lived for over twelve years in Dublin I came to like most Dublin accents, some of whic are very pleaswant, but he speaks las if he’s come up through a man-hole, in a slightly menacing monotone which is as unpleasant as one of John Gilligan’s enforcers. “”Ya can pay the fuckin’ money or say goodbye to your legs – it’s up to you.”

It goes without aying that I cannot listen to him. Podge and Rodge once described Sean Ban Breathnach’s singing as like a fellow tyring to cough up a piece of dog shit he’d swallowed for a bet. But with Colm McCarthy there’s no coughing up;  the dog shit flows out in an endless, rank-smelling torrent.

His delivery also  reminds me of a man who wakes up after spending the night on a park bench because his wife  barred his entry to the house  due to the drunken state in which he’d rerturned from the boozer. You just expect McCarthy to finish one of his nauseating rants about public spending cuts with the exclamation. “Oh Jaisus me fuckin’ head!”

Why has there not been a national outcry? Brian Lenihan has announced his plans for social welfare cuts. He believes the high levels of welfare payments are preventing the country from getting out of the recession, and like a good Thatcherite believes that current levels of welfare benefits are a disincentive to work.

 (This isn’t a Ciaran Parker hoax: it can be read here.

 While he is busy spending the country’s money on bailing out Anglo Irish Bank, it may have slipped his attention that there are very few jobs out there. So are people to starve? In many cases it is not the high level of welfare payments that are acting as a disincentive, but the fact that those seeking the few jobs available often find relatives of Fianna Fail (and Fine Gael) politicians always landing the jobs in front of them.

It seems that efforts have been made to keep this news story off the front pages and the television news. The Fianna Fail party obviously realise that were it to be generally known their opinion poll ratings would be in negative figures, so they wish to deceive the voting public.

I honestly think that Fianna Fail has been taken over by a Doomsday Cult. I don’t think they will care if they suffer electoral meltdown. After all they’re in government, and who are the electorate? A crowd of whingers. But while they may feel county councillors are an expendable group of yokels with no real power vis-à-vis local government executives, they should remember that they are the people who elect the bulk of An Seanad. I would not be surprised if, following the next general election – which may be sooner than later), there will be numerous Fianna Fail TDs looking for a back-way into the legislature through being elected as a senator.

These statements of Lenihan have nothing to do with economics. They stem from social prejudice. Also, let us remind ourselves that Lenihan is a lawyer and not an econom9ist. He is a hostage of the senior, well-paid officials of the Department of Finance, and he is demonstrating a bad dose of Stockholm syndrome.

Lenihan really has a cheek. A man who had his university fees paid from his third year in College (as well as free rooms in Trinity), and this as a result of a scholarship awarded on the results of an examination. This wasn’t a state examination like the Leaving Certificate, or an end-of-year examination where members of staff from other universities act as consultants or advisers, but an internal examination, marked solely by members of the College’s staff  – in this case the staff of Trinity’s Law Department. There was no secrecy here. Brian Lenihan’s identity was clearly evident to the examination markers. They could plainly see the papers belonged to the son of one of the country’s leading politicians. The markers did not have to think whether he was good enough for the scholarship; rather they had to wrestle with what might happen if they didn’t give him the scholarship, and how this might affect funding to Trinity in the future were Fianna Fail in power.

My personal recollections of Brian Lenihan Jr in Trinity College in the mid ‘80s was of an obese oaf. I recall how at cumann meetings (yes, I attended them) he would sit Buddha-like, surrounded by is arse-lickers and groupies, hanging on every word of drivel as if it were an intellectual pearl of great price.

I have set up two more blogs.

The first is dedicated to events in Africa. It’s called

• African violets

The second is concerned with discussions about business and strategic management topics. It’s called

• Building Cathedrals

Don’t forget to pay either or both of them a visit.