Wasting a good crisis

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I’ve been reading Fintan O’Toole’s new book about the Irish banking catastrophe. As in his previous book — Ship of Fools: How Stupidity and Corruption Sank the Celtic Tiger — the analysis of why the disaster happened is spot-on: the Republic has had a dysfunctional political culture ever since it was founded, and the dysfunctionality became pathological over the last three decades. O’Toole thinks that the only way of ensuring a decent future for the country is radically to re-think the governance of the state, and he’s right.

For example, the system of proportional representation based on multi-member constituencies has been good at ensuring parliamentary representation that is proportional to the level of public support, but terrible at delivering good governance, because it favours sectionalism, clientilism, cronyism and parish-pump politics to the detriment of overarching national concerns. Most Irish TDs (i.e. MPs) spend most of their time attending to the detailed needs of constituents: if a haulier wants a contract from a local authority, for example, his first step will be to contact his TD who will in turn contact the authority in question; a developer who wants planning permission to build on the foreshore (which is forbidden by planning regulations) will write to his TD, who will then… You get the picture. Yet these are also the guys who, as ministers, are expected to regulate banks, negotiate treaties and generally run a modern state.

I remember a salutary example of how attentive Irish TDs are to their constituents. My father was a totally non-political person who never had anything to do with politicians. But one of the TDs in the (multi-member) constituency in which we lived happened to be also the Taoiseach (Prime Minister) at the time. Da died of a heart attack around 7am in the local hospital. At 7.30am a telegram from the Taoiseach arrived at the family home expressing his sincere condolences at our sad loss. Someone in the hospital had phoned the local Fianna Fail office and relayed the news of a constituent’s death. And that’s the way everything worked.

Ireland desperately needs better governance. It needs to re-invent itself as a truly modern Republic. The chances of it doing so, however, are close to zero. And yet, pardoxically, this is the time to do it. As the Obama crowd used to say: never waste a good crisis. The moment when people have been shocked into confronting reality is the best time to get them to take serious ideas seriously.

In his column in today’s Irish Times, O’Toole makes some really good points. “In their quiet, dark moments”, he writes, “Cowen [Taoiseach] and Lenihan [Finance Minister] must have been haunted

by the ghost of their political progenitor, Éamon de Valera. Dev’s moment of greatest national popularity came in May 1945, at the end of the war in Europe, when he delivered his magisterial reply to Winston Churchill’s bitter attack on Irish neutrality.

Remaining neutral may not have been the most noble of causes, but it was the ultimate declaration of Irish sovereignty. At a time when three great powers – Germany, Britain and the US – contemplated an invasion of Ireland, de Valera managed to maintain the idea that the State would make its own decisions. The quiet gravity of his broadcast embodied for Irish people of different allegiances what sovereignty is ultimately about: dignity.

This sent me hunting for the text of Dev’s radio broadcast, which makes an interesting read in today’s circumstances. de Valera was responding to a taunt in Winston Churchill’s VE-day speech about Ireland’s decision to assert its sovereignty by remaining neutral in the Second World War, and by denying Britain the use of the so-called ‘Treaty’ ports which Churchill (and the Allies) thought would be essentially to combat the U-Boat threat in the North Atlantic. “It is indeed fortunate”, said Dev,

that Britain’s necessity did not reach the point when Mr. Churchill would have [invaded Ireland]. All credit to him that he successfully resisted the temptation which, I have not doubt, may times assailed him in his difficulties and to which I freely admit many leaders might have easily succumbed. It is indeed hard for the strong to be just to the weak, but acting justly always has its rewards.

By resisting his temptation in this instance, Mr. Churchill, instead of adding another horrid chapter to the already bloodstained record of the relations between England and this country, has advanced the cause of international morality an important step-one of the most important, indeed, that can be taken on the road to the establishment of any sure basis for peace. . .

Mr. Churchill is proud of Britain’s stand alone, after France had fallen and before America entered the War.

Could he not find in his heart the generosity to acknowledge that there is a small nation that stood alone not for one year or two, but for several hundred years against aggression; that endured spoliations, famines, massacres in endless succession; that was clubbed many times into insensibility, but that each time on returning consciousness took up the fight anew; a small nation that could never be got to accept defeat and has never surrendered her soul?

Mr. Churchill is justly proud of his nation’s perseverance against heavy odds. But we in this island are still prouder of our people’s perseverance for freedom through all the centuries. We, of our time, have played our part in the perseverance, and we have pledged our selves to the dead generations who have preserved intact for us this glorious heritage, that we, too, will strive to be faithful to the end, and pass on this tradition unblemished.

Why do these words resonate today, so many decades after they were uttered? Simply because Brian Cowen leads the party that Dev founded. It probably explains the incomprehensible state of denial Cowen and Co have been in from the onset of the current crisis — to the point where it was left to an official — the Governor of the Bank of Ireland — to tell the truth about what was happening, in the process flatly contradicting his own Prime Minister. The current Fianna Fail leaders have surrendered the sovereignty that Dev prized so highly. So somewhere, deep down in even their bovine sensibilities, there must lurk a visceral sense of shame and failure.

“Ireland”, writes O’Toole,

is being placed under adult supervision. And that cuts right through to the most tender nerve of a former colony. What colonial overlords tell their subject peoples is: “You’re not fit to govern yourselves.”

That taunt is deeply embedded in our historical consciousness. Much of modern Irish history has been shaped by the attempt to disprove it. The Proclamation of Easter 1916 declares “the right of the people of Ireland to the ownership of Ireland, and to the unfettered control of Irish destinies, to be sovereign and indefeasible”. The struggle to assert this idea of popular sovereignty goes back at least to the United Irishmen of the late 18th century. Their revolutionary idea of the “sovereignty of the people” is the cornerstone of modern Irish nationalism.

And then, of course, there is the small matter of our relationship with our former colonial masters. During the roaring years of the Celtic Tiger, a new, unprecedented respectfulness on the part of the Brits entered the picture. O’Toole remembers George Osborne, then Shadow Chancellor,

writing humbly in the London Times about the Irish as the model for Britain: “They have much to teach us, if only we are willing to learn.” Osborne’s reasoning was daft, but for many Irish people there was still an extraordinary resonance to the idea of a Tory Old Etonian* with aspirations to lead Britain adopting such a humble approach to a former province of the empire. It was further proof that Ireland had definitively left behind its long history of failure and inferiority. There were no more forelocks to be tugged.

And now? Osborne is Chancellor who, at the meeting of EU finance ministers in Brussels, spoke in

the emollient, gently patronising tones of a disappointed but supportive parent: “Britain stands ready to support Ireland to bring stability.” We probably should be grateful for such support, and Osborne was obviously trying to be helpful. But it is hard not to cringe at tabloid headlines like “Britain ready to bail out Ireland with £7 billion”.

That’s a bit over the top. Osborne isn’t entirely the “disappointed but supportive parent”.** He’s realised, as the Financial Times pointed out yesterday, that the implosion of the Irish banks would have really serious implications not only for the Eurozone, but also for British banks.

Footnotes:
* Osborne is not an old-Etonian. He went to St Paul’s — which is presumeably why Boris Johnson & Co used to call him “Oik”.
** Here’s the really funny bit. Osborne has an Irish Ascendancy (i.e. protestants-on-horses) background. He is the heir to the Osborne baronetcy (of Ballentaylor, in County Tipperary, and Ballylemon, in County Waterford). Arise Sir George!

The wreck of the Republic

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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.

The ‘Ghost Estates’ myth

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One of the most depressing aspects of big news stories is the herd-like way in which mainstream media construct a narrative and then select only the facts that fit that narrative. Part of the narrative of the Irish economic collapse is the factoid that there are 300,000 unfinished or unoccupied houses in the Irish Republic at present. So it’s refreshing to find this careful piece by Bill Nowlan which tries to take a more dispassionate view.

LAST April I wrote a paper on so-called “ghost estates” for the Irish Planning Institute’s annual conference. At that time, the topic was red hot but all the debate was based on media reports, academic number-crunching and hard luck stories – there were no hard facts.

In my paper I called for a detailed survey and analysis so that Government, financiers, academics and planners could separate facts from fiction and develop action policies.

That survey has now been completed by the Department of the Environment It has been a big job with Government inspectors visiting each of just 2,900 estates – but the output is good. It turns out that there was, and is a lot of misinformation about so-called ghost estates. The survey shows that whilst problems do exist with empty and incomplete developments, they are far fewer than media and other reports would have us believe.

The survey identified more than 2,800 housing developments where construction had started but had not been completed.

This translates into just 180,000 housing units for which planning permission exists. Construction had begun on more than 120,000 of these dwellings with 77,000 dwellings completed and occupied.

A further 23,000 homes are completed and vacant. Another 10,000 are part-completed, requiring final fit-out and connection to services. The remaining 10,000 dwellings are at earlier stages of construction, from preliminary site clearance up to wall plate level. The balance are the units which have planning permission but have not been started.

These figures have already been reported – so why am I revisiting the issue? Well I suppose facts make far less interesting reading than much of the speculation to which we were treated for the past 12 months with sensational TV programs and acres of newsprint about disastrous estates with more than 100,000 vacant houses – the implication being that they were so-called ghost estates.

In fact there are only 23,000 new houses built and unoccupied in what I will call new estate developments. This is just 2 per cent of the overall national stock of homes in the country. The number of part-built houses at 10,000 is insignificant, equating to about three months work in a normal property and construction environment.

The survey shows that much of the vacancy in such estates is in western counties and numbers for the greater Dublin area are so low it could be argued that there is a potential shortage of new houses in the area when the economy recovers.

The detail of the survey does not support the idea that there are large numbers of tumbleweed estates. A few do exist but these are mainly outside the areas of normal demand…

Was it for this?

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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!

Why prediction is futile

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At Tuesday afternoon’s Web 2.0 Summit in San Francisco, Vinod Khosla, founder of Khosla Ventures, took the stage to discuss the difference between innovation and punditry. He started off by mentioning a 1986 study that forecasted that by the year 2000, there would be just under one million cell phones. They were off by 10,000%. There were 109 milllion cell phones in the year 2000. AT&T spent $1 million and then ended up scrapping its whole cell phone business based on this forecast. Why? Because the 1980 ‘mobile phone’ was the size of a cinder block.

He then moved on to a Berkeley study that followed 80,000 forecasts over the course of 20 years and found that “experts have about the same accuracy of dart-throwing monkeys,” said Khosla. “You don’t do unreasonable things by being reasonable.”

Twitter, for example, did not exist five years ago, Khosla added. Which pundit could have predicted that a 140 character tweet would ever take off the way it did, or that a series of 140-character tweets could outline the whole culture and character of a city, like San Francisco when the Giants won the World Series?

Things like Twitter are created by innovators, not pundits.

“In every generation, you’ve seen radical shifts…Almost certainly, the next big thing won’t come from Google, Facebook, or Twitter.” To drive his home point, Khosla pointed out the fact that in the 1980s, no one thought there would be a PC in every home, and in the early 90s, no one could have predicted that email would’ve taken off. Even more shocking, the iPhone didn’t exist before 2007. “Now, it is conventional wisdom,” said Khosla.

[Source]