Monday, December 31, 2012

Cool Hibernia

The holidays have been a chance to catch up with some reading. One of the more interesting essays I've read is John Fanning's in the latest issue of the Dublin Review of Books. John worries that Ireland has lost its cool, explaining why in an essay on the origins of 'cool' itself as a cultural phenomenon in the United States (as part of the culture of African slaves brought to America).

John has written extensively on the subject of Ireland's image and brand before (see here, for example). Like many he laments the damage done to Ireland's image and reputation by the excesses of the Celtic Tiger. As to the task of 'restoring our cool' he looks to poets and philosophers for guidance, making much of our capacity for creativity and imagination, citing Richard Kearney:

Culturally and historically we have made a point for better or worse of occupying that territory called imagination ‑ this passion for the possible that imagination represents where you have to take a leap of faith is deeply rooted in the Irish psyche, that given our history and our set of choices in response to what seemed like a repetitive series of impossible obstacles, imagination became at once a mode of compensation.
Unfortunately I have no idea what this means. I'm not sure John does either. In fact, the essay is ultimately disappointing in that there is little beyond wishful thinking and platitudes in its conclusions and prescriptions (what few can be discerned). John seems somewhat fixated with ensuring that global surveys are used by the relevant authorities to continue to track Ireland's image. It isn't obvious to me what this has to do with restoring cool - even if that is a worthy ambition in itself (I'm not so sure).

The problem for prescriptions such as John's (and Richard Kearney's and the others cited in the essay) is that they fail dismally to understand the nature of the problem they are trying to 'solve'. It's a bigger problem than they realise. Simply put: Ireland is trapped on the other side of modernity, like the rest of the West. We are 'stranded in the present' in Peter Fritzsche's memorable phrase (quoted in Brad Gregory's magnificent book 'The Unintended Reformation' - also on the holiday reading list). Ireland, like the rest of Europe, no longer sees the past as a meaningful guide to the present and certainly not as a source of answers to the question of 'how shall we live'.

The result is that we have become just like everywhere else. Hence the decline in UK tourists visiting Ireland - what makes the Irish different to the British any more? The answer: practically nothing. What makes anywhere interesting - cool even - is that it is different. But the traditional sources of difference in Ireland - Catholicism, culture, nationalism, language - have faded away, or are almost gone. We're living in SkyTVland, only with euro rather than pounds. That's not a lot to get excited about, never mind hop on a plane to visit. The much lamented Irish psyche is now completely uprooted from Irish history; no wonder creativity and imagination are in such short supply.

If we want to restore Ireland's cool (though there might be worthier ambitions), then we need to preserve, restore and promote the things that make us different: religion, language, nationalism, and the deep sense of belonging and bonding that such elements provided in the past, in turn inspiring confidence in the future.

Though I suspect the authorities will be happier conducting a few surveys than facing up to that task. Can't say I blame them.

Friday, December 28, 2012

2020 Optimists

My company's latest report - Business 2020 - looks at the views of Irish businesses about life beyond the recession. The good news is that - despite these past few years - they're generally optimistic about the future...

Thursday, December 20, 2012

Man's Humanity to Man

The Christmas Truce of 1914 is a reminder of man's humanity in the midst of industrial scale inhumanity. But I wasn't aware of any similar story from the Second World War, until now. On this day, 69 years ago, an extraordinary act of chivalry took place above the skies of war torn Europe:
On December 20, 1943, the 379th Bomb Group (H) of the Eighth Bomber Command (U.S. Eighth Air Force) attacked Bremen, Germany. During that attack, Lt. Charles Brown from Weston, West Virginia, flying B-17F number 42-3167, witnessed an extraordinary act of chivalry by Franz Stiegler, the pilot of a Bf-109, who had taken off to attack him.  
As Brown guided his B-17, Ye Olde Pub, toward the target, an aircraft factory, it was buffeted by flak. "Suddenly," he later recounted, "the nose of the B-17 was mangled by flak. Then three of the four engines were damaged. The entire left stabilizer and left elevator were gone, ninety percent of the rudder was gone, and part of the top of the vertical stabilizer was gone. I quickly pulled out of formation so we wouldn't damage our other planes if we exploded... 
Brown's plane then plunged from 25,000 feet to 200 feet at which point he regained consciousness. Incredibly, Ye Olde Pub was flying straight and level directly over a German airfield. At that moment, Oberleutenant (1Lt) Franz Stiegler, who had been on the ground reloading his guns, spotted Brown's mortally wounded aircraft. He leaped into his Bf-109 and took off in pursuit. Eager to score a kill, Stiegler closed in from the rear to within ten feet of the B-17.  
As Stiegler described the encounter, "The B-17 was like a sieve. There was blood everywhere. I could see the crew trying to help their wounded. The tail gunner was slumped over his gun, his blood streaming down its barrel. Through the gaping hole in the fuselage, I could see crewmen working frantically to save a comrade whose leg was blown off. I thought to myself, 'How can I shoot something like that? It would be like shooting a man in a parachute.'... 
Stiegler then flew wingtip-to-wingtip with the crippled bomber, close enough for the two enemies to see each other clearly. The German pilot escorted the struggling B-17 to the North Sea. Then, to Brown's amazement, he saluted, put his plane into a crisp roll and flew away, allowing Brown to make it back to a British airfield.
ht Zero Hedge

Both Brown and Stiegler survived the war (Stiegler was one of only 1,200 out of 30,000 German pilots to do so). And even more remarkably, they met again...

Wednesday, December 19, 2012

Constitutional Pride

Quote of the day from a fascinating talk delivered by Judge Gerard Hogan to the Constitutional Convention:
18. While, therefore, some of the criticisms of the Constitution’s more contentious clauses are all too well-founded, the criticisms directed at the bulk of the document generally are not. It appears to be another example of all-too typically Irish characteristics of negativity, lack of self-belief and lack of civic pride in our institutions and in our own achievements.
His explanation of the European origins of our constitution is a healthy antidote to the Anglocentric manner in which our Commentariat tend to view such matters.

Christian China

There are now more Christians in China (68.4 million) than in Germany, France, Spain or the UK. The big difference is that Chinese Christians make up just 5% of the population (and rising), while Christians make up over two thirds of the populations in Europe's biggest countries (and falling).

Mind you, if we filter the numbers by 'practicing' Christians, I suspect (as does Niall Ferguson) that there are more church-going Chinese than Europeans...

From a fascinating report by Pew Research:

Tuesday, December 18, 2012

North South Collide

There's an interesting discussion over at Slugger O'Toole about the prospects for a referendum on Irish unity following the recent 2011 census results for Northern Ireland. I speculated about this scenario a few years ago - and I didn't expect it to happen following the census results. I still don't.

For starts, a referendum would have to happen on both sides of the border, and I don't see much appetite for it on the southern side right now. Besides, there are a few other referenda ahead of it in the pipeline - I suspect we'll have referendum fatigue long before there's a referendum on the border.

Then there's the economy: as Brian Groom reminds us in today's FT ('ten cheerful things to say about Northern Ireland'), the unemployment rate in the South is twice that in the North. The gap isn't going to close any time soon.

One final thought - again as noted in my previous speculation - if a referendum does go ahead then another can't be held for seven years. Those in support of a referendum might bear this in mind - in case they get what they wish for...

Saturday, December 15, 2012

An Emotional Year End

More evidence for our SAD economy - my company's monthly tracker of the mood of the nation (which coincided with Budget 2013) shows a further decline in positive emotions, and a rise in negative ones:

Friday, December 14, 2012


Quote of the day from the Boston Consulting Group:
The second-biggest Ponzi scheme in recent history—organized by the New York hedge-fund manager Bernard Madoff—led to losses of approximately $20 billion in 2008. The biggest, however, is still ongoing: the Ponzi scheme of the developed economies. It is not simply that the developed world has borrowed significantly from future wealth to fund today’s consumption, leading to huge burdens for the next generation. It has also reduced the potential for future economic growth, making it more difficult for the next generation to deal with this legacy.
We'll be borrowing a billion euro a month next year as part of our 'austerity' programme here in Ireland. I hope all our migrating youth will come back to make the repayments...

Thursday, December 6, 2012

Youthful Ambitions

My company has just released some research on the ambitions and goals of Ireland's under 25s. And it's quite reassuring really.

The majority of under 25s expect to have started their career by the time they're 25, and to have bought a car. Their parents will be relieved to know most expect to have moved out by then as well...

More interesting in terms of social trends: almost half expect to be married by the time they're 30 years old, and the majority expect to be parents themselves by the time they're 35.

So the future of family life looks fairly secure for another generation. Assuming they haven't emigrated (1 in 3 by the time they're 35):

Wednesday, December 5, 2012

Usurious Barriers to Growth

Quote of the day from Megan McArdle (defending Ross Douthat):
We are facing an unprecedented transition, and it is going to be nasty.  All of our institutions are based around the expectation that the economy will be bigger in the future, not smaller... 
The problem with this is that our economic system revolves around a lot of debt.  Biblical and Islamic bans on "usury" (lending money at interest) strike most modern people as pretty silly.  But in the very-low-growth world of historical Palestine, they probably made a lot of sense.  These days, it's easily possible to borrow money at 5%, invest it in something productive, like an education or a car to get you to work, and end up with both parties better off: the lender gets their 5%, and the borrower has so much extra income that the 5% will not be much missed.  But at a time when economic growth was under 1% a year, this would have been extraordinarily dangerous behavior.  Many, maybe most people who borrowed money at interest, would end up dramatically worse off.  So the bible forbid it. 
In an era of economic growth, on the other hand, debt has become an integral planning tool for almost everyone.  I mean debt, broadly construed, not simply actual bonds and loan documents.  Social Security is a debt.  So are pensions, and Medicare.   And of course, savings accounts and and t-bills and municipal bonds are also debts.  They are all promises to pay folks later, out of future earnings.  And those are not per-capita promises; they are fixed.  If GDP shrinks, those promises become unpayable, which is what we've already seen it Greece.  
We face the same usurious barriers in Ireland of course.

Tuesday, December 4, 2012


I've blogged before about The Intention Economy waiting for us in the future.

Well, we didn't have to wait very long:

More at Yumani.


Anti-Fragile Currencies

The news from 2020, via Naked Capitalism:
Most agree the vision-shift began with the final collapse of the Eurozone in 2019, an event which had been forecast for some time. The surprise was that the unraveling had begun with Italy, instead of Greece as everyone had expected. It turned out to be the hot Italian blood that first reached a boiling point over the crippling cruelty of the long imposed austerity: the island of Sicily threatened secession and deadly street riots broke out in Rome, Naples and Milan—and then everywhere else. The government capitulated on September 12, 2018, declaring not only that pensions would be reinstated—with payments made in “the Italian national currency”—but also would be increased by 10%. It further declared a twelve month federal tax holiday: income and value-added taxes were put on hold for what was called the “National Transition.” 
The dire predictions of hyper-inflation never materialized. Instead, people went back to work picking up the garbage and debris that had piled up for months, working for Lira, rebuilding burned out buildings and repairing roads and utilities that hadn’t been maintained for over a year. What caught everyone by surprise, however, was a decision by the Italian Ministry of Finance about how to affect the transition from Euro to Lira: Why go to the expense and trouble of printing Liras again? they reasoned. Cell phones for some time had been capable of making credit and debit card transactions. Why not, the Ministry decided, dispense with cash Lira entirely, and issue to every Italian citizen a “Digital Lira Card” (DLC) which could be loaded with Lira at any ATM machine, and then debited by any vendor with a cell phone. Why not indeed?
This story is a great example of what Nassim Nicholas Taleb calls 'antifragility'. As he puts it:
The European Union is a horrible, stupid project. The idea that unification would create an economy that could compete with China and be more like the United States is pure garbage. What ruined China, throughout history, is the top-down state. What made Europe great was the diversity: political and economic. Having the same currency, the euro, was a terrible idea. It encouraged everyone to borrow to the hilt.
Whether our currency union will eventually become a real monetary union remains to be seen. I wouldn't want to bet on it. But what I would bet on is the 'antifragile' value of having more than one currency in circulation. Just in case. Which is why Ireland needs the ePunt.

This was reinforced for me by David Halpern's presentation last week to the Irish Economics and Psychology Conference in Dublin. Halpern heads up the Behavioural Insights Team at No.10 Downing Street. In his talk he spoke about the economy of regard (first coined by Avner Offer), which refers to the observation that:
...what really makes a nation happy, once its basic needs are met, are the giant web of relationships that we have with family, friends, and fellow citizens. These relations usually take the form of long circles of gift-giving, which more or less even out in the end. We do these things for others not for money, but for regard - our regard for them, and theirs for us. 
The economy of regard... is much larger than the economy of monetary exchange. Indeed, quite a bit of what we work for and buy is to give to others out of regard. Happy nations have a healthy economy of regard. Since we work much harder and better at measuring the economy of monetary exchange than we do at measuring the economy of regard, the major wealth of nations is hidden.
Halpern describes the concept in detail in his recent book On the Hidden Wealth of Nations and proposes that complementary and alternative currencies will help unlock the potential value of this hidden wealth.

And we don't have to wait until 2020 to do it.

Sunday, December 2, 2012

The Selfish Meme

Ross Douthat observes that:
The retreat from child rearing is, at some level, a symptom of late-modern exhaustion — a decadence that first arose in the West but now haunts rich societies around the globe. It’s a spirit that privileges the present over the future, chooses stagnation over innovation, prefers what already exists over what might be. It embraces the comforts and pleasures of modernity, while shrugging off the basic sacrifices that built our civilization in the first place.
(ht Marginal Revolution)

Douthat seems to think that we just have to pull ourselves together and the retreat will be reversed. Wishful thinking, methinks. What he fails to recognise (though some commentators on his column and on Tyler Cowen's post do) is that the 'decadence' he describes is the result of a revolution in sexual economics which is not about to go into reverse any time soon. As Baumeister and Vhos note in their seminal essay:
The social trends suggest the continuing influence of a stable fact, namely the strong desire of young men for sexual activity. As the environment has shifted, men have simply adjusted their behavior to find the best means to achieve this same goal. Back in 1960, it was difficult to get sex without getting married or at least engaged, and so men married early. To be sure, this required more than being willing to bend the knee, declare love, and offer a ring. To qualify as marriage material, a man had to have a job or at least a strong prospect of one (such as based on an imminent college degree). The man’s overarching goal of getting sex thus motivated him to become a respectable stakeholder contributing to society. 
The fact that men became useful members of society as a result of their efforts to obtain sex is not trivial, and it may contain important clues as to the basic relationship between men and culture. Although this may be considered an unflattering characterization, and it cannot at present be considered a proven fact, we have found no evidence to contradict the basic general principle that men will do whatever is required in order to obtain sex, and perhaps not a great deal more. (One of us characterized this in a previous work as, “If women would stop sleeping with jerks, men would stop being jerks.”) If in order to obtain sex men must become pillars of the community, or lie, or amass riches by fair means or foul, or be romantic or funny, then many men will do precisely that. This puts the current sexual free-for-all on today’s college campuses in a somewhat less appealing light than it may at first seem. Giving young men easy access to abundant sexual satisfaction deprives society of one of its ways to motivate them to contribute valuable achievements to the culture.
Add to the sexual revolution the newly dominant religion of progressivism (which treats the past as evil and our ancestors as stupid), and the loss of the optimistic vision of politics and you begin to realise that the Selfish Meme is taking us in a scary new direction that leads not just to Douthat's 'exhaustion' but even to reversal and decline. 

A process that will, like Mark Twain's description of his own bankruptcy, proceed 'at first, very slowly, then, very quickly'. Nature has a way of weeding out unsuccessful memes as it does unsuccessful genes.

Saturday, December 1, 2012

Give a Dog a Bone

From Citi's sweeping preview of what's in store for 2013 and beyond:
We have long argued that we consider the fiscal trajectories in Ireland and Portugal to be unsustainable, despite the fact that both countries have generally complied with the conditions of their existing troika programmes. In both cases, we expect extensions to their currently existing bail-out programmes on their expiry in late 2013 and 2014, respectively. Both countries grapple with the strongly contractionary effects of deleveraging by a highly indebted private (household and business) sector and of fiscal tightening. Of the two countries, Ireland is in a stronger position, as its economy is more competitive (with a current account surplus and the economy is not in recession), it has met fiscal targets and austerity fatigue is moderate. But despite years of austerity, Ireland’s fiscal deficit remains the highest in the EA (above 8% of GDP in headline terms and 7-8% of GDP in structural terms), growth is highly dependent on external demand, and contingent liabilities to the banking sector remain high. In the light of Ireland’s commendable performance in meeting programme targets so far, we expect that it will be allowed a restructuring of part of the €64bn of debt incurred through bank bail-outs (e.g. through maturity lengthening and coupon reductions on its outstanding promissory notes) in 2013 and that its full troika programme will be followed by a ‘conditionality lite’- type (ECCL) programme, similar to the case of Spain and Italy (including potential ECB OMT support). But unless and until Ireland restructures its bank recapitalisation costs or sovereign debt more broadly, the country's chances of regaining fiscal sustainability are low.
Which is why their medium term forecast for Ireland is, well, grim:

Still, they are expecting things to pick up generally from 2015 onwards...

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