Tuesday, 27 August 2013


I bought “Speaking for England ...Leo, Julian and John Amery...the tragedy of a political family” in a bookshop in Kensington, when visiting my daughters who live in London. It is written by David Faber, a former MP, and published by Pocket Books.
Leo Amery was a middle ranking English Conservative politician who was in Parliament during both the First and Second World Wars.

It was he, who famously said to the then Prime Minister, Neville Chamberlain, after the disaster in Norway  May 1940  
“In the Name of God, go”
While Chamberlain had to follow Amery’s pithy advice on that occasion, Leo Amery was often too outspoken and too longwinded for his own good. He  assumed other politicians would not take political attacks personally, and lost many friends that way. Thus he did not really achieve the prominence, to which his talents and industry, would otherwise have entitled him.
He was no moderate. 
He helped draft the 1912 statement, in which the Conservatives implied they would support the use of force by Ulster Unionists against the inclusion of Ulster in Home Rule for Ireland .

At the time  an opposition politician,  he  was also in constant  contact with army figures, like Sir Henry Wilson, who opposed to Home Rule, in a way that would be seen as completely unacceptable, and almost treasonable, conduct by an opposition politician today . 
Although opposed to the inclusion of what became Northern Ireland in Home Rule in 1912, Leo Amery raised no objection he when the rest of Ireland achieved a greater degree of separation from Britain, under the Treaty of December 1921,than would have been entailed in Home Rule .
He subsequently was involved, in 1922, in having Lloyd George replaced as Prime Minister, thus ending of the three party Coalition Lloyd George had led.
Leo Amery, like Churchill, opposed the appeasement of Nazi Germany in the 1930’s.

He differed from Churchill on other matters. Though an Imperialist, Amery believed India should have been granted independent Dominion status much earlier than it was, whereas Churchill opposed any moves in that direction.
The tragedy of Amery’s life was his son Jack. Jack never settled ay school and seemed to have little or no sense of right and wrong, or of the rights of others.

Jack Amery lived from scams of various kinds, in Spain and France, during the 1930s, and was often financially supported by his father. He found himself in France in 1940, at the time of the German invasion, and made no attempt to come home, or to join his own country’s armed forces. 

While in France, Jack had fallen under the influence of Jacques Doriot, a former Communist who founded the Parti Popular Francaise, a fascist anti Communist party.

When Hitler invaded the Soviet Union, Jack was persuaded by Doriot that Britain should make peace with Hitler, and join with Germany in fighting Communism. He made broadcasts from Germany to that effect, and attempted to recruit British prisoners of war to the German army, to fight against the Soviets. 
He was captured in Italy at the end of the war, brought home to Britain, tried for treason, and executed, despite strong medical evidence that he was mentally ill throughout.

His father, Leo Amery, did his best to save his son, but the then Labour Government felt Jack deserved the supreme penalty for what he had done. His high profile did him no good.
This book gives an interesting insight into British politics between 1900 and 1945 and is well written, full of human interest, and never boring.

Thursday, 22 August 2013


This week I visited the battlefields of the Somme in Northern France
During the First World War a number of battles were fought in this area, but the most important of these commenced on 1 July 1916 with a joint Franco-British offensive, and lasted until November 1916.

50,000 French soldiers were killed, 95,000 British and Commonwealth soldiers, and 164,000 Germans.

Despite their heavy casualties the Allies gained only a dozen square miles of territory, but they did inflict proportionately more casualties on the Germans, than they suffered themselves.

Although launched to make a big breakthrough, the Allied offensive became a battle of attrition, wearing out German resources of men and material, and in that it was partially successful. The offensive on the Somme tied up German troops, relieving pressure elsewhere, notably on the French at Verdun, and on Russia in the East.
Artillery fire was more devastating than face to face combat. Artillery accounted for 58% of all casualties, rifle and machine gun fire for 39%, and bayonets for just 0.3%.

A large number of the 49,000 Irish who died in the Great War did so at the Somme.

One of those who died there, in September 1916 was Tom Kettle, an officer in the Royal Dublin Fusiliers, who was Professor of Economics in UCD, and had served as an Irish party MP for East Tyrone. He had written, shortly before his death

“I am calm and happy, but desperately anxious to live. If I live I mean to spend the rest of my life working for perpetual peace. I have seen war, and faced modern artillery, and I know what an outrage it is against simple men”

A colleague wrote of him to his wife after his death

He died for Ireland and for Europe”.

The battlefields today are sparsely populated, open, rolling countryside. Apart from the memorials, and the rows of white and grey crosses, it is hard to believe that the area could ever have been a place of industrial scale slaughter.

I visited the modest memorial in Guillemont to the 16th Irish Division, in which Tom Kettle served. Although almost all those who served in that division were from what is now the Republic of Ireland, all the poppy wreaths I saw there had been laid by groups from Northern Ireland.

I also saw the much larger Ulster Tower, which commemorates the 36th Ulster Division, many of whose members had been drawn from the Unionist Ulster Volunteers, and visited the Newfoundland trenches, from which the Newfoundland Regiment launched an attack on the first day of the battle , in which almost every soldier died.
If anyone still needs convincing that we need institutions in place to maintain unity and peace in Europe, he or she should visit the Somme.

Thursday, 15 August 2013


A major difference between the United States and Europe is the size of the prison population.

Some figures recently published in the “Washington Post” illustrate the problem.
  • The U.S. prison population is now more than 2.4 million.
  • That number has more than quadrupled since 1980.
  • That means more than one out of every 100 American adults is behind bars.
  • About 14 percent of the prison population is in federal prison
  • The single largest driver in the increase in the federal prison population since 1998 is longer sentences for drug offenders.
  • The average inmate in minimum-security federal prison costs $21,000 each year. The average inmate in maximum-security federal prisons costs $33,000 each year. I believe the average cost per prisoner in most European countries would be much higher.
  • Federal prison costs are expected to rise to 30 percent of the US Department of Justice’s budget by 2020.
  • The most serious charge against 51 percent of those inmates is a drug offense. Only four percent are in for robbery and only one percent is in for homicide.
  • The most serious charge against 20 percent of state-prison inmates is a drug offense though it’s still larger than any other single category of offense in state prisons.

One of the reasons for the large prison population in the United States is the so called “war “on drugs, a war that has been going on since the 1970, without victory being in sight, or ever expected.

Another is the prevalence of mandatory minimum sentences.
I would be strongly opposed to mandatory sentences, as a general principle, because every offender, and every offence, is different.

I do not believe that a long sentence really relieves the suffering of victims, although it is routine for the media to ask victims and their families, on the steps of the court, after the sentence has been passed, whether they are “satisfied” with the sentence.
This cultivates the false notion that sentences are about a form of vengeance, when, to my mind, the purpose of a prison sentence is to prevent/deter future offences by this particular offender or by another.

Sunday, 11 August 2013


I spent two days last week in La Crosse, Wisconsin.
It is a city of about 50000 people, beautifully situated on the east bank on the Mississippi river. Across on the west bank of the river is the state of Minnesota.
The landscape of Wisconsin consists of bluffs and valleys. La Crosse  has a very attractive river side park and garden, which is divided into areas associated with the towns in other parts of the world with which  La Crosse is twinned, including Bantry in Ireland.
Wisconsin is traditionally associated in the public mind with the dairy industry, but this has recently been consolidated into large units, some with as many as 3000 cows milking. The city has a long industrial tradition and is the headquarters of Trane, one of the world’s leading manufacturers of air conditioning equipment, which was founded in the city 100 years ago. It conducts advanced R and D  there, cooperating with universities around the world.
La Crosse was originally inhabited by the Sioux and Fox Native American tribes, and the bulk on the current  population are descendants of immigrants from Norway and Sweden. 

Tuesday, 6 August 2013


Over the last few days, four different Irish economists have been offering their thoughts on the Irish budget, due to take place in October. Some are more realistic than others.
David McWilliams in the “Sunday Business Post”, who has, in the past, favoured Ireland leaving the euro , urged the Irish Government, in preparing the 2014 budget, to ignore the advice of the IMF, the EU, and the ECB, to complete the programme of budget consolidation it and its predecessor had agreed with them, and instead stimulate the economy.
The IMF, the EU and the ECB are lending the Irish government money to keep services going, at rates of interest below market rates, so David’s advice is daring, to say the least.
 And Ireland still has a primary deficit, it is spending more on day to day spending than it collects in day to day revenue, even before it pays a cent of interest on past debts.
 David justifies his advice on the basis of the Household Budget Survey, which suggests that many Irish households are cutting back on spending, defaulting on rent payments, and drawing down savings to meet day to day expenses. A good part of the problem seems to arise, not just from debts, but from higher than expected bills, for which families had not adequately budgeted in advance, like university or school costs, or unexpectedly high utility bills.
Of course, an easier budget would leave people able to spend a little more in the shops, and that would boost Government revenues. But a lot of any extra spending power, generated by a “stimulus” budget, would also go out of the country on imports.
Another problem is credibility. If people believe the stimulus is only temporary, they may decide to save whatever extra they get, and not spend it. To the extent that that happens, there would be no stimulus to the economy, just an increase in the debts the taxpayer would eventually have to repay, assuming some was prepared to lend it to them.
Then there is an even bigger question mark over David’s thesis.
Where, and from whom, would the extra money he wants to spend, be borrowed ?


As Colm McCarthy, in the “Sunday Independent”, points out, the government has been adding to the outstanding debt it owes at a rate of 1 billion euros per month throughout 2013.
 He claims
“Government revenue is still, after tax increases and expenditure cuts, running way behind government spending and the state is continuing to overspend on a grand scale”
He adds
“It is bizarre that continued borrowing, which will add to the debt mountain, is routinely described as austerity”
Colm is also critical of the notion that, once Ireland is no longer borrowing new money from the IMF/EU/ECB troika (hopefully next year), it will somehow be in the clear, and restored to full fiscal sovereignty.

As he puts it, all that would then happen is that the discipline, required now by” official lenders” (who are under some sort of political pressure to keep the government going), will then be replaced by the discipline of “volunteer lenders”, who will be under no obligation to lend any money at all, to Ireland.
These volunteer lenders would, he claims, be

 “easily spooked by signs of consolidation fatigue and political irresolution in over-indebted countries”. 
I believe they would also be easily spooked by the sort of advice offered by David McWilliams, because they would be afraid that, if it was followed, they simply might not get all their money back. And they have plenty of other places to lend it. As private institutions, they are not obliged to lend to any particular country.
Furthermore, even when Ireland has exited the EU/IMF/ECB programme, it will still be required to abide by the disciplines of the EU Fiscal Compact, approved by the Irish people in a referendum, and by close EU supervision which will apply to all members of the euro zone.

It is important to remember that the banks, who would be lending to Ireland once it had  exited the EU/IMF/ECB programme, would be lending money that ultimately belongs to pension funds, insurance companies, and savers , and they would have clear obligations to take every step to guarantee that they would get their clients money back, with interest.
Colm also points out that Ireland has to make substantial repayment or roll over of existing debts, in particular years in the near future, for example,
 12.7 billion euros in 2016,
 19.6 billion in 2019, and
 26.8 billion in 2020.

Constantin Gurdgiev in the “Sunday Times” analysed where the money Ireland is borrowing is going.
He says
“The two main current spending lines, social protection and health, are running at 65.2% of total voted current expenditure, up more than  four percentage points since 2010”, when they were “only” 61% of all voted spending.
In other words, these two departments are elbowing out  the others. He adds that health, social protection, and education combined, absorb 90% of all tax receipts.
He goes on to talk about the cuts that have been made so far.
He says
“Much of the current spending cuts hit temporary and contract staff, leaving permanent and more expensive staff protected.”
He says most the  “savings “ in public sector pay, achieved by the Croke Park and Haddington road agreements with the public sector unions,  are not sustainable, and will be reversed, when the latter agreement expires.  In this sense, they do not represent a permanent structural reform.
He advocates   cuts in long term unemployment benefits, and the means testing of state pensions and of medical cards for the elderly.

Meanwhile, on the excellent “Irish Economy “ website, Kevin O Rourke, formerly Professor of Economics in Trinity College Dublin and now in Oxford University, writes about the effect of austerity, and the fact that austerity, by reducing spending, thereby reduces government revenue somewhat, and is, to that extent, self cancelling.
He says
“This does not mean that fiscal consolidation is never necessary, but the time for it, is when times are good, not when times are bad”

Well, who could really disagree with that?

It is sound economics.....but unlikely politics.
When times are good, and revenues are nearly in surplus, it is, of course, theoretically easier to cut spending without real damage.

But in a democracy it is almost impossible, politically speaking, to do it, because voters, who might be losing some benefit, will point to the plentiful revenues, and say
“We do not need to do this, to meet some book keeping rule. We have the money, so we do not need to impose suffering on ourselves”
Politically, in my experience, it is actually MORE difficult to cut in a boom, than during a recession! In a recession, people will see the need for cuts. In a boom, they will not.
The science of economics, divorced from the art of politics, is not all that useful!