Tuesday, March 23, 2010

Fine Gael: "Go back to your constituencies and prepare for (single party) government..."

A good point in an Irish Times piece on the Fine Gael National Conference by Harry McGee. He writes that:

What the conference dispelled were any doubts over him leading the party into the next election. And in part, he can thank the ghost at the Killarney conference; for George Lee’s name was not uttered once publicly in Killarney.

Isn’t that something? That the man who was most likely to… do something… despite crashing and burning in the most public way possibly could, barely a couple of months later be not merely gone, but…

In February, Lee’s departure could have ended Kenny’s reign. But before the Government parties could make any capital of Fine Gael’s implosion, they themselves were hit by a series of small scandals and resignations that back-footed them. The Lee affair is now almost forgotten.

In a way it provides a testament to the reality that political life is indeed like supertankers, making their way through the water, huge masses that change direction only slowly and with great effort. An individual, no matter how brilliant, or well-known, can deflect them, but usually only marginally. And Lee, hobbled from the start as much by his own expectations as the constraints of the job he took, hasn’t even managed that.

His departure has seen no significant attrition of the FG vote. No ramifications. No aftermath. He’s just… gone.

Although… although, reading Enda Kenny’s speech I couldn’t help but notice the following:

…[Indeed,] in Richard Bruton I know I have the right man to run the Department of Finance at this critical time for this country.

So different from the other fella, good old whatsisname.

And the Conference itself? Well, as has been characteristic of this era of Fine Gael, hardly earthshaking. Quite the opposite. The shambles of the New Era document has done little to dissuade those antagonistic to the Kenny regime of the error of their ways. The list system of last weekend is no more. What we seem to have is a Dáil that will be twenty members smaller… what larks, and a Seanad that will be 100% smaller. This may excite some, but most of us will wonder what the fuss is about, and, as noted last week, ponder on how much of even this will survive a coalition deal with Labour.

Although Kenny was attempting to boost the notion of single party government. That seems unlikely to happen, they’ll be doing well if they lift themselves above 70 TDs. And surely, surely they don’t believe that themselves? Because there’s a fair way yet to run with the current shower.

That said it is interesting to see them veer sharply from the economic consensus… I mean to say, veer even more sharply rightwards. For them, as expressed by Richard Bruton:

“The Government’s plans to take €3 billion out of the economy in 2011, mostly by cutting investment and raising taxes, is the wrong course. It will destroy many jobs and further damage competitiveness.

“Ireland would be better with a reforming budget that takes €2 billion out of the cost of running Government in 2011, €1 billion more than Minister Lenihan is proposing, and sets out a clear path for even greater cost-savings in future years but which avoids further cuts in investment or net tax increases.

Hmmm… so, let’s get this straight, ‘reform’ would see us eschew tax increases and cut further current expenditure? Well, I’m not sure how that’s going to fly. And although the Irish Time editorial is dubious about this from a more right of centre perspective…

Likewise, Fine Gael’s ambitious plans for economic regeneration raise some questions of affordability, at a time when the public finances are the big issue of the day. Much of what Fine Gael has proposed will be welcomed, but the party now needs to convince a sceptical public that its proposals can be financed without further borrowing.

…I’m curious as to what the cuts will be focused on. One thing we do know is that to fund a ’stimulus’ we could be waving farewell to state assets. Kenny himself said as much at the weekend.

This money will be raised from private equity, sale of State assets and investment from the European Investment Bank.

Although the jobs themselves have a familiar ring to them… I can’t help thinking that this list following has been delivered to us from a different source…A greener source.

These jobs will be in renewable energy, water quality and broadband. They will be delivered within Fine Gael’s first term in government and they will provide real opportunities for all people no matter what their age, and no matter what their trade or qualification.

But to be honest, what I find most interesting is his list of priorities…

That’s why, tonight, it’s important that each and every one of you know that my Fine Gael team has a clear plan to get us out of our current crisis of confidence.

THAT PLAN starts from five realities.

That we should never have ended up in this dire situation.

That Ireland’s downturn is more severe than other countries as a direct result of Fianna Fáil’s total failure to plan for the inevitable and for the future.

That international factors are compounding domestic mismanagement.

That Fianna Fáil has turned a manageable problem into a serious crisis.

And that whether it be in banking or politics, the people who got us into this mess will not be, and can not be, the ones to lead us out of it.

If we are going to turn this country around, we need real change. Our plan for that change is based on three pillars: 1. Getting our people back to work; 2. Revolutionising the health service; and 3. Reforming our political system.

That’s it? Those are the three pillars? It’s not that they aren’t in themselves important, but… there’s something a little detached from each other about them all. Reform of the political system is important, no doubt there at all. But somehow that doesn’t particularly seem to gel with health service ‘revolutions’ or dealing with unemployment. Or perhaps it is that there seems no overarching theme that links them together or particular ideological strand that runs through them. Now, for many of us coming from parties with specific ideologies, that’s a problem… but I also think that it’s a problem for Fine Gael.

This seems to be a technocratic approach, that on paper is fine, but in practice? Well, I compare and contrast with Gerry Adams speech a fortnight or so ago, which while no great shakes at least had the concept of the ‘Republic’, however amorphous and inchoate that might be, running through it. By contrast Fine Gael gives us three concepts to chew upon, and subsidiary aspects of each. There’s the New Politics… that’s the one dealing with political change. Then there’s NewERA, that’s the job creation strategy. And then we have health service reform, but no snappy tag or neologism there to assist us. So that’s not ‘New’, at least not in this conceptual stew.

And there’s no ‘New’ anything sitting above them and encompassing them. Perhaps, at one stage, there was a ‘New Republic’ term or something similar used and perhaps the SF Ard Fhéis, or the Irish Times series of articles last week, put paid to that. Or perhaps the decision was taken to use ‘Fine Gael’, mentioned so many times as to become utterly repetitive throughout the speech, and often with the word ‘government’ close at hand, just so we know. Or perhaps Kenny is entirely sincere when he argues that… ‘This country is finished with slogans and repeated photo opportunities.’

Except for the NewERA, and New Politics. Those terms/slogans, they’re clearly okay.

None of this is to say that the ideas are awful, but neither is it to suggest that they’re great. And maybe that’s the point. He may use the word ‘revolution’ in relation to healthcare, but we know that’s not going to happen, at least not in any fundamentally revolutionary fashion. He may talk about stimulus, but it’s not going to be a social democratic stimulus. He may indeed talk about a new sort of politics. But, fingers crossed – on his part, that would sit at the far side of a negotiated programme for government with Labour and a referendum. So no reason to panic yet (and by the by, entertaining to read that ‘Fine Gael is the party that set up the institutions of this State’… It’s not entirely incorrect but neither is it entirely correct)

And even where the language goes up a bit in pitch… well…

And now they want further sacrifices from taxpayers and mortgage borrowers. Unless there is a change of government, the banks will get what they want. There is no limit to what Fianna Fáil will do to protect their powerful friends. Did the Taoiseach not say . . . that whatever cheque is required will be written? Cheques written by Fianna Fáil come out of your pocket.

Fine Gael has a fundamentally different approach. Firstly, we won’t borrow further billions to bail out Anglo Irish Bank. We will use that money to start a new State National Recovery Bank. It will get credit flowing quickly to protect jobs and support business.

And secondly, there will be no whitewash. The current secrecy will not be tolerated. We will carry out a rigorous and open investigation to find out exactly why the banking scandal happened. We will hold people responsible, even if they are Ministers. We will open the books.

THERE MUST be a clear message to bankers. They will never be allowed to destroy our economy and our country again. Those who broke the law in pursuit of greed and reckless lending must face the consequences and, if the courts decide, they must be sent to jail.

Who… though, is seriously arguing otherwise at this point? And I seem to recall the ICC and ACC, both semi-state entities not so long ago, before they were privatised (natch!), fulfilled the function of this ‘new’ State National Recovery Bank. Which again, is not to say it’s a bad idea, it certainly isn’t. But to suggest that nothing terribly radical is being proposed, and if for some it seems like it is they either don’t remember our history, or that the sociopolitical dial has now been wedged so far right of centre that we’re truly in bad trouble.

In fact, there’s something a tad pro forma about all this. We’re a year or more out from an election. Fianna Fáil aren’t going anywhere soon, but neither are Fine Gael. They can afford to play the odd populist card. So why not? Say nothing that will rock the boat and lose some percentiles of the support already gained. And I wouldn’t blame FG or Kenny in the slightest for taking that approach.

[Via http://cedarlounge.wordpress.com]

Sunday, March 21, 2010

Democrats backed into a corner or not?

You listen to the Health Care Reform debates and a lot of the logic would be comical if it wasn’t such a serious topic.

One example is this proposed theory that the Democrats are backed into a corner regardless of how they vote.  If they vote “no” on the current legislation, then they are screwed. If they vote “yes” they are screwed, but not as bad.

FACT:  Congressional approval is at nearly record lows, 18%.

FACT:  The American people, whom they represent, are against this bill.

FACT:  Even if this bill passes, it’s far from over with. Numerous lawsuits and Constituional challenges await it.

FACT:  The “far left” base that is for health care reform, at any cost, can not get the Democrats reelected this fall and 2012.

FACT:  The whole debate on this plays hugely to the Republican’s advantage. The more it remains on the news, the more the Republican’s benefit. If passed, long term it plays even more to their advantage. You want to get this off the news and fast, period.

FACT:  Even if it’s passed today, the voters are not going to forget about it by November. That strategy is oblivious to reality. The corrupt process and details will only continue to leak out over the coming months and will only increase the anger of more and more voters. Then numerous lawsuits and legal challenges to the legislation will go on for years. It will be a scar on the Democrats (election wise) that not only will refuse to go away, it will just get uglier over time.

FACT:  If this legislation is signed into law and it hurts jobs and the economy in the slightest demonstrable way….which it will in it’s present form. The Democratic Party will be little short of destroyed, 1994 will look like a pleasant dream. From a strategy standpoint, the Republican leadership couldn’t write this script any more to their favor if they tried.

IMHO there’s a third option for the Democrats that could save their bacon.  They could stop and say:  “Hey we hear you America.  We’re going to stop on this legislation. We’re going to focus on jobs and the economy non-stop till a clear recovery is in place. We will look at this HCR legislation later, break out the parts of the legislation that both sides can agree upon, and work on those reforms. But first and foremost we’re going to focus on getting jobs back. We’re not happy that the “good news” is that we only lost a few thousands of jobs this week/month. We will not rest till the “good news” is that we’re adding jobs at the rate of 5-6 digits each month.”

If they do the above, they quickly put 20-30% back onto their approval ratings and calm a growing powder keg of public sentiment towards them. If they do the above, then November 2010 doesn’t have to be a disaster and November 2012 a catastrophe.

So it’s up to the Democrats. Their fate is in their own hands, yet they seem oblivious to  reality or worse…delusional.  It’s either about ego and arrogance or the American public.  Yeah they’re backed into a corner, but it’s a corner of their own creation. A corner that they can walk out of at any time unless they really are as arrogant and ego driven as we suspect they are.

American’s want Health Care Reform, but not this particular approach. Ignore them at your peril. Yes, it’s really just that simple.

[Via http://wa4zko.wordpress.com]

American health-care reform: Pass the bill

Economist – It is wrong for a country as rich as America to have tens of millions of people without health insurance. Beyond them is the much larger number of people who fear falling into that position through losing their jobs; and the larger number again who cannot get affordable insurance because they have an existing medical condition, or because they are too old, or because they have exhausted the “lifetime caps” imposed by insurance companies.

America’s health-care system is a nightmare of perverse incentives. Because employer-provided health insurance is not considered to be a taxable benefit, people feel insulated from the real cost of their coverage and consequently over-consume. more> http://tinyurl.com/yklmnrp

[Via http://theneteconomy.wordpress.com]

Saturday, March 20, 2010

The economy needs to be fixed on a grass roots level.

As a data processor for Experian for I was able to observe from my desktop as the global markets crashed. When Northern Rock started to turn sour, there was a run on the bank. This was in 2007. No one, and everyone could have predicted what was going to happen.

The day I started for Experian, the 15th September 2008, it is the same day that Lehmann Brothers filed for Bankruptcy. Over the following months I witnessed a spectacular failure in the capital markets.

People I knew worked at major banks and told me to withdraw all the money I had as it probably wouldn’t be there at the end of the day.

The government then decided to bail out the banks. It was a necessary and immediate step.

What then happened is what I perceive to be the stupidist thing. Companies started to behave opportunistically, and some started to panic as well. So they then started laying off staff. Now those people who have been laid off, don’t have their money going in to the bank, which causes the bank more problems. Then all the places that those people would spend their money, like pubs, shops, markets, retailers, restaurants and so forth no longer have the money coming in, and so they have to lay off staff. Then the places where those staff would spend money, in the same sorts of establishments, those establishments would close down and the spiral continues.

People feel more detached from the financial world than they do from the political world.

This is why bailouts should have been at a more basic level. Our pubs are dwindling at an unparalelled rate, our markets are now all but gone and other businesses have panicked/been opportunistic. When I say a business has been opportunistic, what I mean is that they have laid off staff,and lowered pay and hours, citing the recession as a cause while many companies such as Experian and JCB have actually increased in size and year on year profits.

If, after the preliminary bailout, the government had instead decided to focus on keeping people in jobs, punishing companies who laid people off without reason, they wouldn’t need to bail the banks out. If they’d focused on aspects of the real economy, helping pubs, local markets and securing jobs in local authorities then they might not have to bail out the banks. Had the government looked after the real economy the banks could look after themselves.

For some reason the present government hasn’t done that. It rewards the bankers with tax payers money, while it will let Mr and Mrs Smith lose their house.

[Via http://benjaminbartonformp.wordpress.com]

Thai Airways : raising capital won't be enough... 50 billions needed

Thai Airways International’s board of directors approved the Bt10 billion capital increase, which needs shareholders’ approval at the April 28 meeting.

THAI President Piyasvasti Amranand said that proceeds from the share offering will be used for general corporate purposes, including to manage its liquidity, finance future aircraft investments, strengthen THAI’s capital base, and repay its debts. (Nation)

And then a few days later:

Thai Airways International must raise Bt50 billion this year and next to repay debts and finance business expansion, president Piyasvasti Amranand said yesterday.

Funding will come from a share offering planned for later this year, bank loans and debenture issues.

Once the debt-to-equity ratio is halved from 4 at present, whatever is left over will be used for business expansion. [...]

THAI recently won board approval to issue up to 1 billion shares, pending shareholder approval on April 28. The airline is now capitalised at Bt16.99 billion. [...]

THAI is due to retire Bt29 billion worth of debts this year. Earlier, it was reported that debentures worth no more than Bt11 billion would be issued, to roll over maturing bonds. (Nation)

10 billions ? 50 billions ? Different tools but only one reality : Thai Airways needs money. Badly.

Not to expand the business (“whatever left…” like says the president) put to face its obligations : to roll over debts.

Healthy ? Of course not.

And don’t be fooled by the so called return to profit in 2009… It’s an illusion. Most of the airlines in the world are badly hurt.

Apparently, the thai government (as main shareholder) has accepted to pay. The thai tax payers will pay.

[Via http://thaicrisis.wordpress.com]

Thursday, March 18, 2010

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[Via http://findapodiatrist.wordpress.com]

Casino shares up after CE’s speech

Shares in Macau’s United States casino operators registered a rise after Chief Executive Fernando Chui Sai On’s maiden Policy Address was announced on Tuesday.

Since Chui Sai On did not introduce any specific caps on numbers of tables or slot machines, Las Vegas Sands stock jumped 7.33 percent, closing at USD 20.06 – the first time in a while that the company’s stock has surpassed the USD 20 mark. MGM Mirage closed at USD 12.30, up 8.08 percent, while Wynn Resorts stock increased 4.48 percent, finishing at USD 73.63.

Chui Sai On pledged his government would control the size and growth rate of the city’s booming gaming industry. However, the new Government’s leader did not announce any specific cap.

> Read the full article at Macau Daily Times

[Via http://wgasia.wordpress.com]