Bit’s and Pieces… Anglo’s art, IBEC and boosting spending, that referendum… privatisation and Kenny and the crash redux!

Had to smile at the news that…

HOPES THAT Anglo Irish Bank’s art collection could help to raise significant money for the State have been dashed by the bank’s discovery that many of the paintings “have no value” – just like its once highly rated shares.
When Anglo became the State-owned Irish Bank Resolution Corporation (IBRC), it inherited Anglo’s art collection – some 320 pieces – along with other assets and liabilities.

And…

Another 100 paintings have an estimated value each of between “€0 and €500” while there are just 100 artworks that may be worth more significant amounts. The entire collection has been valued at “less than €1 million” and more likely just €750,000.

But this, this is just cruel…

About one-third of the paintings have been valued as worthless – in financial, not necessarily artistic, terms – consisting of “the type of art that could be bought from the railings on Merrion Square”, according to a bank spokesman.

IBEC are a frustrating crew. Always putting out half wrong statements, often putting out statements with a grain of sense, and unfortunately for them often the statements are one and the same.

They’re full of optimism:

He said that the focus to date has been on correcting the public finances and the banks, which are now both back on track.

But:

IBEC says it believes that consumer spending will fall by 2% this year. One of the ways it is suggesting this could be counteracted is by allowing people to draw down part of their private pensions or additional voluntary contributions to spend now. It says that such a move could release €1.3 billion in the economy.

I’m surely not the only person who is wondering if that’s the best way to do this. That said, if they think that a mere €1.3bn is a good start doesn’t it demonstrate the absurdity of the sums being thrown into the banks and also the imbalance between them and more immediate economic needs. But hard to disagree with this:

The group says it believes consumer spending will fall by 2% this year, before recovering by 0.5% in 2013.
It said that the challenging economic outlook for this year, both domestically and in the wider euro zone, reinforces the need for the Government’s jobs strategy to include ambitious new stimulus measures to support jobs and growth, including a major investment in physical and human capital.

But wait, at the same time they [implicitly] argue for pay freezes, and even cuts in both public and private sectors. So their prescriptions seem directed towards supporting [or unlocking] expenditure from those in the middle class with money while broadly speaking suppressing that of those in the lower middle and working class.

Like the Irish Times they know their base.

I was intrigued by this headline: Sexual diseases rise among elderly

Until I read the following:

THE INCREASED use by older men of drugs to reverse erectile dysfunction may be producing an unexpected side effect. The incidence of sexually transmitted diseases for men and women in the 50-90 age group has doubled over the past decade.

50? Elderly?

Worried about the Fiscal Treaty? Even Arthur Beesley in the Irish Times is anxious. And not just about the lack of democratic legitimation for it – which is a core issue.

Thanks to the EU-International Monetary Fund bailout, Ireland is no stranger to the hazards of intrusive external oversight of its internal affairs. There will be more of the same for ever in the new dispensation, with considerably less national discretion over fiscal policy, and heavy-handed treatment for any government which flouts the pact.
It is one thing, of course, to submit to the unforgiving writ of the troika in an emergency situation in which the State is shut out of private debt markets. It is quite another to accept the hands of future governments will be tied by Ireland’s expanding obligations to Europe – even when the State can stand on its own two feet again.

And:

It can be argued that dire times call for desperate measures to ensure recovery from crisis and prevent any repeat. At another level, such measures and the vigorous policing which is promised under the pact would severely restrict the room for manoeuvre of elected governments in perpetuity.

After the financial disaster that has befallen the State, many people could well take the change as a good thing which will keep manners on sharp-talking politicians who practise wayward economics for electoral gain. They might prefer a choice in the matter, however, and they well might decide that reflection is merited on the limits of a permanent balanced-budget policy. If the crisis has shown us anything, after all, it is that economics is a very imprecise science. As EU leaders distort language in their attempt to promote “growth-friendly” budgetary consolidation, the tension between the demands of economic growth and the reduction of debt and deficits remains unresolved.

The thing is that this is, as Beesley notes ‘a prescription for virtually the entire European economy to remodel itself on Germany. ‘ But it’s not Germany in the round, but instead Germany as Angela Merkel and the Christian Democrats would have it. In other words the ideological and party perspective behind these measures has largely been ignored. Happy for the right of centre that the crisis took place at a conservative moment when the EU was dominated almost entirely by governments with that right of centre hue when ironically it was capitalism that was in crisis, indeed the very capitalist approach that these parties had largely championed – low regulation, retreat of the state, etc, etc. That the policy implications of this are so little spoken of is often perhaps since they are regarded as aligning with the neo-liberal orthodoxy, but that’s not entirely correct. For example, at Davos it was notable how Danish leftish PM Helle Thorning-Schmidt, who is pursuing a rather different course, was open in her disdain for the thrust of EU policy making. There aren’t many alternatives within the system, but there are a few. Yet it is a sign of their almost complete isolation that they are now so evident in their isolation.

Greece goes from bad to worse. The technocrat government hasn’t played ball in the way its sponsors in the EU expected. And even though it’s now said ‘yes’ the markets don’t believe it. Perhaps it’s that small issue of not being able politically to implement plans which on paper seem feasible.

Greek leaders have baulked at EU-IMF-ECB troika’s demand for a 25 per cent cut in private sector pay and a 35 per cent reduction in some pensions as a condition for further aid. However, euro zone finance ministers warned the government on a weekend conference call that there was no scope for flexibility.
“The sense was that they should stop messing around,” an EU official said of the Greek negotiators.

“Messing around”? The complacency and arrogance of that statement.

Meanwhile our own dear Leader has words to say on privatisation:

The Taoiseach emphasised again there would be no firesale of State assets. However, he agreed that those considered suitable for disposal would need to be sold by the end of 2013, as that is when the bailout programme would come to an end.

Er, why Taoiseach given privatisation is not compulsory under the terms of the ‘bailout programme’? It’d be nice to know.

To follow up on the piece on the CLR about Kenny’s words in Davos, Vincent Browne recently did some heavy lifting in terms of Enda Kenny’s own role in the ‘Celtic crash’. Browne notes that:

In every one of his speeches on five budgets (from 2003 to 2007) as leader of Fine Gael, he complained about high tax and governments’ failure to spend even more. In the latter two of those speeches he urged changes to stamp duty that would have inflated the property bubble further.

To me this points up not just Kenny’s lamentable – but expedient – amnesia in terms of his own actions during that period but a broader malaise where the idea of low taxation as a good in and of itself took hold in the most unlikely places and the idea that the state and society could somehow avoid engaging with the much more challenging issue of sustainable [and higher] tax levels and revenues in order to build credible public services became the norm. There’s no way around it. Progressive [in every sense of the term] public services require an higher tax take. That the orthodoxy still holds to the low tax model demonstrates that little if anything has been learned.