Best of the Web

• ‘The Greek debt workout will establish a benchmark for sovereign debt haircuts across the Eurozone‘

  I tried to reduce the size of this quote, but I kept on leaving important stuff out. The whole article is a must read, particular the point made earlier that the negotiations being finalised now between the ECB and private bond holders will ‘establish benchmark terms for other struggling Euro sovereigns as well. Thus, it is possible that the valuation of sovereign debt across all Euro nations will be established in relatively short order’. Anyway, this article by a couple of ‘humble investors’ provides plenty of clarity.

  We have not reached the end of history. Mankind evolves, as does capitalism and its many brands. But not that much. An objective look at our modern economic ecosystem shows clearly one unified global banking system that is actually made stronger by predictable, publicly aired tensions among competing political and economic theorists and practitioners. As long as lawmakers and we, the people that must obey them, continue quarrelling among ourselves, those that control money are free to do as they like. When the people revolt against the symbols of political power (storm the Bastille, storm the winter palace), then the people succeed in forcing those that control money to alter the political structure. Only when lawmakers take steps to limit bank system access to the nation’s resources by indenturing the factors of production (dumping tea overboard, storming the Eccles Building), can the nation’s capital shift back to the people.

  Today we have an oligopoly of central banks issuing the world’s baseless currencies and, by having successfully promoted substantial household and sovereign debt assumption, can now dictate resource allocation and fiscal policy terms. Against this power there is fragmentation - (mostly) democratically elected officials overseeing republics of generally obedient populations. Lenin knew; “by continuing the process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens”. John Maynard Keynes himself agreed: “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose”.

  We argue that indebted governments have ceded that power to banking systems without conscience or public accountability. If the global banking system has ultimate power over how global wealth is perceived, (as it does), and it is the only institution powerful enough to keep indebted governments in control of their societies, (which it is), then the only reasonable strategy for an independent investor is to think like a Rothschild. Don’t fight the Fed - bet on it.

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• Protest at cuts in small rural schools Dublin, 1st February 2012

  Hundreds of teachers, parents and school children came from all over Ireland to protest at Minister Ruairí Quinn’s proposed cuts to small schools in Dublin when the Dáil was debating the bill.

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• Ireland has one of the most attractive tax rates for fracking companies in the world

  Very important point made by Natural Gas Europe here (posted on Shell to Sea) about the licencing agreement around Shale Gas (Fracking) and needs to be understood in the context of the news today that Tamboran Resources initial exploration in  north Leitrim has found that they could ultimately reach 2.2 trillion cubic feet of gas, worth $55 billion at today’s prices. Meanwhile Pat Rabbitte has asked the EPA do an environmental study, but this is very, very unlikely to veer from the assessment of the European Commission consultancy study on licensing hydraulic fracturing which found that there is no need for specific new legislation governing the mining activity.

  Besides the environmental impact, the financial cost of both that gas line and the potential shale gas excavation has caused consternation. Currently, Ireland has one of the most attractive tax rates for companies in the world. Companies in Ireland are, in most cases, required to pay only 25 per cent corporation tax, a much lower rate than most other countries with possible shale gas reserves; Ireland also does not require companies to pay any royalties to the government on saleable gas. Tamboran, Lough Allen Natural Gas and Enegi may be required to pay between five and fifteen per cent over this rate, but, even at a higher rate, the gain for the government will be lower than for most other countries in comparable situations. Pundits and protestors alike say that the government is effectively giving away a valuable resource, owned by the Irish people, to outside companies, for very little in return.

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• Conflict of interest is so deeply embedded in Ireland, no one seems to notice

  The cops were very swift to close down the demonstration in the NAMA building that  Unlock NAMA occupied on Saturday the 28th. They haven’t been as swift though to investigate Anglo Irish Bank. A big blow to that investigation is due, apparently, to the fact that the cop leading it went to work for Bank of Ireland. It is not unusual for people from the fraud squad to move into the private banking sector, we are told, just as we were told that it isn’t unusual for people to move from the regulators office or the Central Bank (when they were separate bodies) to the boards of private banks. Unlock NAMA revealed that the building they occupied was in a very bad state of repair. Add to that the difficulty in establishing that it was a NAMA building at all, considering that it was added to the foreclosure list incorrectly. This should open up discussion on what is happening to all the other NAMA buildings, at the very least. At the most there should be uproar about the massive stock of properties that NAMA controls the loans of which is being allowed to rot and devalue. These properties are being held on to simply to try and artificially hold the price on property and provide the means for future speculation.

  Senior garda fraud specialist retires to work for Bank of Ireland

  The senior garda detective who was in charge of the Anglo-Irish investigation for 18 months took early retirement at the end of last year and is now working with Bank of Ireland, it has emerged.

  Former detective superintendent Pat Collins, 52, was regarded as the Garda’s top expert in corporate fraud investigation. He spent much of his career in the Fraud Squad and before taking charge of the Anglo investigation he spent time on secondment with the Office of the Director of Corporate Enforcement working with its director, Paul Appleby.

  Former colleagues say his departure — on full pension after having served 30 years in the force — will be a major blow to the investigation.

  Coveney adviser’s patriotism stressed to secure special pay

  Elsewhere, Minister for Agriculture Simon Coveney is in the news for asking for a €130,000 salary for his special advisor Fergal Leamy, a former chief executive of Greencore USA. The cap as we are well aware after all the breeches of it is €92,672. Leamy didn’t last long, despite Coveney pleading that he was desperate to do the state some service he left after four months. He got an offer from an equity firm in the London that he couldn’t refuse. However, the story also reveals that Simon  Coveney’s brother, Patrick Coveney is chief executive of Greencore. Of course Greencore has a long and controversial history, which Shane Ross referred to as a template for the worst excesses of corporate Ireland, a close rival to DCC.

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• Can We Still Write Big Question Sorts of Books? | David Graeber

  David Graeber and the model of his ‘popular’ yet scholarly book Debt: The First 5000 Years

  So: what was to be the model for a big questions sort of book, and how to write a book that would still be scholarly, but not academic?

  This is what I came up with:

  Of all the models I considered, the most amenable turned out to be the approach adopted by Marcel Mauss. This might seem odd. especially because Mauss never actually wrote a book; he’s mainly famous for a series of essays. Yet many of these essays-not just the Gift, but his essay on the person, techniques of the body (where he coins the term “habitus”), sacrifice and magic-really have had a profound effect both on all subsequent scholarship, and, to differing degrees, political and social debates ever since. Mauss had an uncanny ability to ask the right questions-often, questions he was the first to pose, and which have become mainstays of theoretical debate ever since. His was also an appealing model because Mauss was both a serious, committed activist (he was especially active in the French cooperative movement), and a scholar of remarkable erudition. His problem-and this, I suspect, is why he never did write a proper book, despite numerous attempts-was that he was also almost unimaginably disorganized, and therefore, terrible at exposition. I suspect if alive today he would have been quickly diagnosed with severe ADD.

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• Irish ‘SOPA law’ another under the radar attack on digital rights by a craven government pandering far too easily to corporate interests

  Very strong and accurate piece from Karlin Lillington in the Irish Times today, making no bones about the motivations behind the changes in copyright law that Sean Sherlock and the Irish government are trying to sneak in. It’s odd at a time when the SOPA law in the US, which is similarly motivated to the Irish law, has just been dropped.

  FOR THREE governments in a row, “short-sighted” and “sneaky” seem to have become the relevant terms in operation when bringing in controversial, high-impact legislation on digital issues.

  In the past, from the government’s perspective, this approach has worked well in shoving in poorly drafted, unscrutinised law on the controversial area of data retention, giving the Republic one of the most severe, internationally criticised, anti-business retention regimes in the world.

  This time around, the Government is trying again to use secondary legislation - a statutory instrument requiring no discussion and no debate in the Oireachtas - to (supposedly) protect intellectual property for a narrow band of hard-lobbying entertainment industries.

  For despite what the ‘hard-lobbying entertainment industries’ might say internet piracy is not killing off its profits. That assumes for a start that the amount produced is static, which given the amount of ‘content’ flooding towards us each day is absurd.

  But more importantly, there is evidence (from numerous mainstream studies and reports) that industry claims about piracy decimating revenue, jobs and creativity are vastly overstated. A careful analysis of such claims by Julian Sanchez on Ars Technica ( iti.ms/wT8l02), picked up and further discussed by Forbes ( iti.ms/xQJXhg), indicates piracy has actually had only a minor impact on these industries.

  The record industry in the US, for example, has about double the new releases it had a decade ago, when piracy was barely on its radar. The film industry also has more releases now than in pre-piracy days and its most pirated movies are also those that made staggering box office profits. Sanchez cites evidence that the music industry is making back profits lost to piracy through “complementary purchases” such as concert tickets. And a recent report issued by a US anti-piracy lobby group rather farcically indicates its clients are doing quite well, thank you.

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• Davos dilemma | Michael Roberts

  The majority of those at Davos think that Capitalism isn’t working, but don’t feel there is a need to change anything because its working rather well for them. It’s up to those not in the 1% then to change it.

  The strategists of capital are attending their annual jamboree in the snow playground of the super-rich in Davos, Switzerland for the World Economic Forum. Many of the top 0.1% of income earners are there. And this year the main theme is whether capitalism works and is fair.

  Capitalism is in crisis - and this time the word ‘crisis’ is not hyperbole. Even the 2600 attendees at Davos recognise that. According to a survey by the financial broadcaster, Bloomberg, almost 70% of those asked believed that the capitalist system is in trouble, with 32% saying it needs “radical reworking”. Less than 20% reckoned ‘free enterprise’ is working. Most Davos 0.1 percenters are really worried that this failure of capitalism to work could lead to ’social instability’ in one form or another.

  And more than half who were asked at Davos thought that inequality of income and wealth under capitalism was damaging economic growth. But only one in five wanted any urgent action on the issue! It seems that greed triumphs over economic logic - or should we say, class interest rules

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• The Promissory Notes | Tom McDonnell

  Economist Tom McDonnell of TASC provides a brief primer on IBRC promissory notes, which is available on Slideshare. Click here to view it in it’s own web page.

  Tom mcdonnellpromnotes240112

  View more presentations from TASCslides

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• Michael Taft talks to Doug Henwood of Left Business Observer about the Irish Economy| 7th of January

  Michael Taft talks to Doug Henwood of Behind the News in a detailed 30 minute discussion about the Irish economy which was posted on the 7th of Jan. The second half of the show is given over to a discussion with Jodi Dean about Occupy Wall Street and ‘demands’. It’s also worth reading Jodi Dean’s article on Occupy Wall Street and the Left which was published today on Critical Legal Thinking.

  MP3 Link.

  [display_podcast]

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• What are bankers doing inside EU summits? | Corporate Europe Observatory

  Important information here on the extent of bank lobbies influence in the resolution of the Greek debt crisis, particularly when it comes to plans which require ‘private sector involvement’.

  At the Euro Summits in July and October 20111, crucial decisions “to save the Euro” and “to save Greece” were made. It was agreed to restructure Greek debts and banks were asked to accept a ‘haircut’ to their profits to avoid a Greek default and the risk that some banks might default as a result. In Summer 2011, the press was full of stories about the informal negotiations between EU leaders and the banks about the level of private sector involvement in restructuring Greece’s debts.

  The Institute of International Finance (IIF), a lobby group established in 1983 by the biggest banks and financial institutions in the world to deal with the question of sovereign debt2, became the EU’s interlocutor on the Greek debt issue. Its proposals -described as ”offers”- received red carpet treatment.

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