Online banking, pshaw

Much to the annoyance of some of my consultancy clients and my bank — and the amazement of friends (“What? Call yourself a technology columnist and not use Internet banking!!!”) — I don’t use online banking for the simple reason that I don’t think it’s secure. So this report from Good Morning Silicon Valley is grist to my mill.

The high-profile cyberattacks continue: Citigroup has been hacked, too, it told the Financial Times Wednesday. The May attack allowed hackers to access the names, account numbers and contact information of about 200,000 North American customers of the company, according to Reuters. Citigroup says other information such as card security codes, expiration dates and customers’ Social Security numbers are kept elsewhere and were not accessed.

While the FT quoted a Gartner analyst who said that “for the actual breach to happen at a bank is a very big deal,” because banks’ online systems are usually more secure, Federal Deposit Insurance Corp. Chairman Sheila Bair said this morning that banks are frequent targets, according to the Reuters article. Bair said the FDIC may push banks to improve their online-security measures.

On a related note, and in case you missed it: What does happen when your bank gets hacked and your money is stolen? According to a judge’s ruling in one case in Maine, the bank can only do so much. Wired’s Threat Level blog reports that a construction company that fell victim to a password-stealing Trojan on an employee’s computer is out of luck in trying to recover about $300,000 from Ocean Bank. While Magistrate Judge John Rich agreed that the bank could stand to have a more secure authentication system, he said the law does not require it to have such a system, and that its system is comparable to that of other banks.

Quote of the day

“The Irish banking system is worse than too big to fail; it is too big to save. The first duty of the state is to save itself, not to load its taxpayers with obligations to rescue careless lenders…The Irish state should have saved itself by drastic restructuring of bank liabilities. Bank debt simply cannot be public debt. If bank debt is to be such debt, bankers should be viewed as civil servants and banks as government departments.”

Martin Wolf, writing in today’s Financial Times.

The boys from the IMF

The only Irish novelist with the range to encompass what has happened to Ireland in my lifetime is Colm Toibin, and so I live in hope that one day we will get a blockbuster novel from him about the Republic that wasn’t. In the meantime, his reflections on the current crisis are interesting. He begins by revealing that he got to know some of the IMF guys who came to sort our Argentina after its economic collapse, and in the process came to understand how they think.

I remembered my American friends this week as news came that a delegation from the EU and the IMF were to arrive in Dublin on Thursday. I think I have an idea how dedicated and serious-minded these fellows would be, especially on weekdays, and how little interest they might have in Irish history, Irish pride, Irish sovereignty or even Irish doublespeak. They like to get the job done and then get home.

On the night before these figure-crunchers arrived in the city, I watched a discussion programme on Irish television in which commentators, people younger than me, invoked the dead heroes who had fought for an independent Ireland, naming some of them, including patriots from the 18th century, and wondering how they would feel now were they to find out about the shame we Irish felt.

We had fought so hard for our freedom, they said, and now, with the arrival in Merrion Street, where the government is housed, of besuited stone-faced economists with German and Scandinavian names and number-crunching knuckles, we had betrayed our dead. Patrick Pearse eat your heart out, the Germans have arrived.

I hadn’t known that Toibin comes from a Republican background. His grandfather fought in the 1916 rebellion and was imprisoned afterwards. “I was brought up”, he recalls, “in the proud memory of his bravery. My uncle and my father worked all their lives for the Fianna Fáil party which has run Ireland most of the time since 1932 and which is in power now. I have never ceased to believe in their patriotism and idealism”.

But he puts his finger on what has always been wrong with our little Statelet:

The problem is not merely that there is no blueprint in Ireland now, no agenda, for how this might be done. The problem is also that it wasn’t there before the Celtic Tiger either, nor during its heady reign. In areas which really matter, such as health and education, Ireland has, since independence, been deeply divided.

There are two health systems here, for example. One is for middle-class people who pay health insurance and the other for those who can’t afford to pay. There are short waiting lists for one, and long waiting lists for the other. Often, both see the same doctors, who treat the first group in private hospitals, or private rooms in public hospitals, and the second group in public hospitals.

Everyone here knows that the difference can be a matter of life and death. Some of the doctors make a fortune. There has been no serious effort to reform this, but many efforts instead to copper-fasten it. This is one example of what sovereignty has done to us.

As for Irish “shame” about having to be rescued by “the Germans”, well, that’s also a bit rich coming from a country that has so manifestly proved unable to govern itself.

The more I found out about contemporary Germany, for example, and the more I travelled there, the more I came to admire it and the more I came to hope that some of its best qualities could come to influence and affect Ireland.

Thus when the Irish Times on Thursday mentioned “the German chancellor” I did not automatically feel that this person was in some way a malignant force in the world. Instead, I saw someone rational and prudent, sensible and deeply intelligent.

I’ve been thinking a lot about this in the last week. In the late 1970s I spent a year working in the Netherlands and it changed my life, because it gave me an insight into what a well-governed society could be like. Holland was devastated after the war, with its population starving and totally dependent on foreign aid. And yet out of those ruins the Dutch built a prosperous, liberal, humane democracy. So did the Germans, labouring under an even bigger psychic burden. What these societies did demonstrates what can be done with political will and intelligent outside assistance. That’s what Ireland needs to do now. And if the IMF and EU boys can get that process started, then more power to their elbows.

The wreck of the Republic

The Economist has a wickedly funny front cover this week. It takes Gericault’s famous picture, The Raft of the Medusa, and Photoshops it to show the wretches on the raft holding Irish and other European flags, and adds, top-left, an RAF rescue helicopter winching in a particularly stolid-looking Angela Merkel to ‘help’.

The imagery becomes even more hilarious when you know the history of the original.

The painting depicts the aftermath of the wreck of the French naval frigate Méduse, which ran aground off the coast of today’s Mauritania on July 5, 1816. According to Wikipedia, at least 147 people

were set adrift on a hurriedly constructed raft; all but 15 died in the 13 days before their rescue, and those who survived endured starvation, dehydration, cannibalism and madness. The event became an international scandal, in part because its cause was widely attributed to the incompetence of the French captain acting under the authority of the recently restored French monarchy.

The references to cannibalism and incompetence are particularly relevant to Fianna Fail, hitherto known as “the political wing of the Irish construction industry”.

LATER: Lorcan Dempsey pointed me at John Banville’s essay in the New York Times:

It is the figures, mainly, that cow us into silence. It is estimated that the banking debt of this nation, which has a population of only 4.6 million, may be substantially more than 100 billion euros. That is 100,000 millions and rising. When we were at school it amused our science teachers to dazzle us with astronomical statistics — so many myriads of light years, so many zillions of stars — but the numbers that we are being forced to count on our too-few fingers now have nothing to do with the fanciful dimensions of outer space. They represent precisely the breadth and depth of the financial hole into which we have toppled headlong.

In the months after September 2008, when the Irish government, after a night-long crisis meeting, was forced to give a guarantee of some 400 billion euros — money we had no hope of ever having — to save the Irish banks from collapse, we used to say that it would fall to our children to pay for our financial folly. Now we know that it will be our children and our children’s children and our children’s children’s children, unto the nth generation, who will bear the burden of our debts, including the “substantial loan” from international lenders that officials now acknowledge is necessary.

There used to be a nice acronym that neatly expressed how the Irish people conceive of themselves: MOPE, that is, Most Oppressed People Ever. For a decade or so, when the Tiger was at its fiercest, we threw off the mantle of oppression, as once we had thrown off what used to be called “the yoke of British rule.” On Wednesday, the British chancellor of the Exchequer, George Osborne, announced in Brussels that his government stood ready to help Ireland in its hour of need. Oh, bitter day.

All the same, life goes on, somehow. We are learning a new resilience. Humbled as we are, we might even begin to learn social responsibility, a quality in which we have been singularly lacking up to now. Who knows, we may at last recognize the irreplaceable value of public and private honesty. But let us not light the firecrackers just yet.

Was it for this?

That’s the headline over an extraordinary Editorial in today’s Irish Times as the paper contemplates the wreckage and humiliation that a corrupt and incompetent Fianna Fail administration has brought on my homeland.

IT MAY seem strange to some that The Irish Times would ask whether this is what the men of 1916 died for: a bailout from the German chancellor with a few shillings of sympathy from the British chancellor on the side. There is the shame of it all. Having obtained our political independence from Britain to be the masters of our own affairs, we have now surrendered our sovereignty to the European Commission, the European Central Bank, and the International Monetary Fund. Their representatives ride into Merrion Street today.

Fianna Fáil has sometimes served Ireland very well, sometimes very badly. Even in its worst times, however, it retained some respect for its underlying commitment that the Irish should control their own destinies. It lists among its primary aims the commitment “to maintain the status of Ireland as a sovereign State”. Its founder, Eamon de Valera, in his inaugural address to his new party in 1926, spoke of “the inalienability of national sovereignty” as being fundamental to its beliefs. The Republican Party’s ideals are in tatters now.

Irish history makes the loss of that sense of choice all the more shameful. The desire to be a sovereign people runs like a seam through all the struggles of the last 200 years. “Self-determination” is a phrase that echoes from the United Irishmen to the Belfast Agreement. It continues to have a genuine resonance for most Irish people today.

The true ignominy of our current situation is not that our sovereignty has been taken away from us, it is that we ourselves have squandered it. Let us not seek to assuage our sense of shame in the comforting illusion that powerful nations in Europe are conspiring to become our masters. We are, after all, no great prize for any would-be overlord now. No rational European would willingly take on the task of cleaning up the mess we have made. It is the incompetence of the governments we ourselves elected that has so deeply compromised our capacity to make our own decisions.

They did so, let us recall, from a period when Irish sovereignty had never been stronger. Our national debt was negligible. The mass emigration that had mocked our claims to be a people in control of our own destiny was reversed. A genuine act of national self-determination had occurred in 1998 when both parts of the island voted to accept the Belfast Agreement. The sense of failure and inferiority had been banished, we thought, for good.

To drag this State down from those heights and make it again subject to the decisions of others is an achievement that will not soon be forgiven. It must mark, surely, the ignominious end of a failed administration.

Well, yes. But the problem is that there is no knowing what kind of electoral result will follow from this catastrophe. With a bit of luck, Fianna Fail’s run as a serious political party has finally ended, just as — in the end — Italy’s Christian Democrats imploded. But what then? Most of the Irish political establishment is implicated in the disaster that was the Celtic Tiger. One option is that public fury will erupt at the next election in a Tea Party-type explosion of incoherent activism, and Ireland will wind up with an administration rather like that of the Netherlands, in which a party of enraged, contradictory, xenophobic weirdos hold the balance of power.

And then there is the sinister news that Gerry Adams, sensing an opportunity, has decided to resign his seat in the Northern Ireland Assembly to stand for the Dublin parliament.

LATER: In a discussion on RTE Radio this evening, the former Taoiseach, Garret Fitzgerald, made an ironic point — reminding listeners that the revolutionaries whose insurrection in 1916 eventually led to the founding of the Republic were also hoping for German aid!

Forgetting the rest of the trick

Bill Keegan, the Observer‘s economics commentator, tells a nice story about how the Labour Leader, Michael Foot, lampooned Sir Keith Joseph, Margaret Thatcher’s policy guru, in the early 1980s. Foot, says Keegan, gave

a virtuoso display in a speech which had both sides of the Commons in stitches. He was referring to Sir Keith Joseph, who had played the role of John the Baptist to Thatcher. Foot was speaking when, as now, the Conservatives were conducting a frontal assault on the fabric of British society. He had long tried to recall, said Foot, of whom the right honourable gentleman (Joseph) reminded him. It had suddenly come to him: in his youth, Foot had gone to the Palace Theatre in Plymouth on Saturday nights, where a “magician-conjuror” used to take a gold watch from a member of the audience, wrap it in a red handkerchief, and smash it “to smithereens”. Then, while the audience sat there in suspense, a puzzled look would come over his countenance, and he would say: “I’m very sorry – I’ve forgotten the rest of the trick.” Foot concluded: “That’s the situation of the government.”

Well, I suspect that is also the position of the present government. Thatcher at least had the excuse of fighting double-digit inflation. This government has invented an excuse – namely that the cuts are required to avoid the treatment that the bond markets have been meting out to Greece, Ireland and Portugal.

1931 here we come

Paul Krugman’s verdict on Slasher Osborne.

Both the new British budget announced on Wednesday and the rhetoric that accompanied the announcement might have come straight from the desk of Andrew Mellon, the Treasury secretary who told President Herbert Hoover to fight the Depression by liquidating the farmers, liquidating the workers, and driving down wages. Or if you prefer more British precedents, it echoes the Snowden budget of 1931, which tried to restore confidence but ended up deepening the economic crisis.

The British government’s plan is bold, say the pundits — and so it is. But it boldly goes in exactly the wrong direction. It would cut government employment by 490,000 workers — the equivalent of almost three million layoffs in the United States — at a time when the private sector is in no position to provide alternative employment. It would slash spending at a time when private demand isn’t at all ready to take up the slack.

Why is the British government doing this? The real reason has a lot to do with ideology: the Tories are using the deficit as an excuse to downsize the welfare state. But the official rationale is that there is no alternative.

Indeed, there has been a noticeable change in the rhetoric of the government of Prime Minister David Cameron over the past few weeks — a shift from hope to fear. In his speech announcing the budget plan, George Osborne, the chancellor of the Exchequer, seemed to have given up on the confidence fairy — that is, on claims that the plan would have positive effects on employment and growth.

Instead, it was all about the apocalypse looming if Britain failed to go down this route. Never mind that British debt as a percentage of national income is actually below its historical average; never mind that British interest rates stayed low even as the nation’s budget deficit soared, reflecting the belief of investors that the country can and will get its finances under control. Britain, declared Mr. Osborne, was on the “brink of bankruptcy.”

What happens now? Maybe Britain will get lucky, and something will come along to rescue the economy. But the best guess is that Britain in 2011 will look like Britain in 1931, or the United States in 1937, or Japan in 1997. That is, premature fiscal austerity will lead to a renewed economic slump. As always, those who refuse to learn from the past are doomed to repeat it.

The lost decade

Interesting, thoughtful talk by Umair Haque.

The real crisis isn’t about bankers, bonuses, and bailouts — it’s about an economy that’s geared to create thin value; value that’s artificial, meaningless, and often, actually worth little, in human terms. So the real challenge isn’t about eking out another penny of profit by laying off more another hundred people, offshoring with an even greater ferocity, crushing your fiercest rival more savagely, or churning out more lowest-common-denominator “product.” It’s about learning to create thicker value: authentic value, that endures, resonates, and multiplies. Unless, of course, you think you can survive another lost decade.

Why university websites suck

Ever wondered why so many university websites are totally useless? Well this explains it neatly in one Venn diagram.

You’d have thought that universities would have figured out the Web by now. The reason they haven’t, of course, is that their official sites are usually the responsibility of the development (aka fundraising) or PR departments, and these people are exclusively focussed on the messages they wish to project, rather than thinking about what users and visitors might actually want.

Thanks to Laura James for the link.