Designcomment

Ladder

2011-10-14T15:33:00.000-07:00

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The state jobs agency FAS, in Ireland was criticised a lot in the media over the past number of years. But like a lot of things in Ireland I think we have it all backwards.

The state jobs agency FAS, was criticised because it tried to take manual contract cleaning staffers and depict them in expensively created promotional videos, becoming semi-conductor technicians and rocket scientists. This is what I think we have gotten backwards, here in Ireland.

Our problem in Ireland, is not taking manual labour and trying to reinvent them as skilled knowledge workers. Our problem rather, is that our skilled knowledge workers end up becoming manual labourers, or at the very best, in our periodic ‘boom’ times, they graduate to the level of trades persons.

You speak to anyone in the regional urban centres in Ireland. They will tell you about a succession of employers down through the generations, who have come and left again. It saps the will out of the people who inhabit these urban centres and surrounding hinterlands. It saps the life out of them.

I remember, at one stage I was a manual labourer and I had all sorts of ambitions to become an expert technician in semi-conductor technologies. I am sure I could have achieved that goal also. Ireland isn’t a bad location to get on a ladder, and make something of oneself. However, I do recall an instance in 1998, where I was mixed cement plaster and putting it in a bucket for a plastering tradesman.

We were high up on a scaffolding, which collapsed. It was prior to the time when health and safety was taken as seriously as it should do in Ireland. We got talking about life in general, as we tried to get our wits back following the accident (we all escaped un-injured thankfully).

The man told me of the two successive computer companies he had worked for in the city of Limerick. We talked about aspects of computer technology, engineering and management of projects in the high technology area. Then we both mounted back up, on a re-built scaffolding, and started throwing sand and cement at a wall again.

A couple of years later, I had obtained a job working at Dell computer corporation in Limerick city, and quite liked it. The scale of it, and management of such a massive labour force in one place.

The point of my telling the story really, is to say that the man I had crossed paths with for that brief scary moment in 1998, was heading in the opposite direction to myself. He had been in the high-tech knowledge economy in the 1980s, and was headed back towards manual labour.

I was trying to move up the ladder at the time. We both met for a brief and sorry moment, on the same ladder as it were. The modern knowledge economy landscape, is one such that, resources be they human, industrial, logistical or otherwise, do fall out of use very quickly. There is a worldwide crisis because of that.

In 2010, I watched a documentary on Irish television in which they looked at the lifes of ex. Dell employees from Limerick city. One man, who was vocal on behalf of the ex. workers of the plant, explained his neat idea to get into business for himself. He was going to install timber decking features to the backs of peoples' homes.

I wonder to myself, how many times has that cycle occurred in Ireland now? I mean, since the earliest days of industrialisation in Ireland. Have we ever spoken to the various generations of workers, who were discarded at one point or another from the system? Have we asked them as a collection of people to describe their experiences?

I wrote a short blog over the summer time about an interesting character in the field of management consulting, I have been reading for quite a while now.

Mr. VanPatter of Humantific is one ex practitioner from the architectural profession, who has a fairly good handle on the times we live in, and the kinds of challenges posed by the kind of economy in the 21st century.

My simplistic way of looking at it is, each economy today has to learn how to recycle its own human resources many times over. We simply don’t have the luxury any more in 2011, of hoping that another job on the not-so-well-built scaffolding we emerge for ex. transistor engineering staff, to occupy them throwing sand and cement at a wall, and hoping they don’t fall to their deaths in the process.

Brian O' Hanlon

Other Reading.

Blog entry, Recycle.

Sub Note: Smart Economy

A commentator at the Irish Economy blog wrote,

Conditions today in the highly educated, high tech market are quite frankly brutal. The days when a 3 to 12 month course would ensure re-employment are gone. I thank my lucky stars that most of my working life was in a high demand era.

I think it should be a priority though, in the coming years, that we change focus a little bit from the old fashioned FAS emphasis of taking people from the lowest, and raising them up. What needs to be addressed is those who are already up on the ladder, and how to keep them there. None of this sounds very good in speeches though.

It is like what the American legal professor, Elizabeth Warren says about the problems facing the middle classes. No one wants to do proper research in that area, because there is a natural assumption that the middle classes are boring and stable. Hence, the fact that very intelligent and aware people, get caught out in assuming that all of the cliches are correct.

As a nation, we spent a lot of money on agencies such as FAS, which had very mixed success. And I wonder if we could have made a lot more progress, had we taken a deep and detailed look at the high tech sector jobs, and how people in that area manage their careers over decades.

I am trying to keep this brief. But I would like to write a few words in relation to the smart economy. It is unfortunate in a way, that someone such as former Taoiseach Brian Cowen became the sales personality for this particular initiative.

Because I think the smart economy banner could be extended to become quite a good umbrellas policy for many disparate state agencies to coordinate themselves by. After all, this is the challenge of running a state at any time, in any context. How to find an intelligent way to coordinate the disparate efforts of so many.

I would simply relate the idea of a smart economy, to the idea as applied to the electrical smart grid for instance. I recall attending a lecture by the deputy chief executive in charge of Ireland's electricity network a couple of years back.

His main point was to emphasise, that Ireland's grid had become increasingly smart down through the years. In that, it becomes more self aware, better able to diagnose its own faults and so on. It helps those who manage the system, to get to the problems faster and figure out a strategy without too much confusion.

I believe, that if we look at the resource of skilled labour in Ireland, we need to add an extended time dimension to the equation. That is, children who move away from education in their 20's - we simply cannot allow those people to drift through their 30's, 40's and 50's - without some audit of the demands the enterprise environment places upon our human resources at different times.

I always get back to the generation who built the new semi-state companies for Sean Lemass coming out of the 1950s, and in the 1960s. Those people have retired at this stage, but are still around and available for interview. We aught to interview those people. We aught to do the same with the generations of 1980s, in various sectors.

In short, we should look at all sectors in the economy. We aught to interview folk from different generations in all sectors. We aught to build up a picture. The smart economy in my opinion, is one such that it is made more self-aware, and perhaps better equipped to respond to unfolding events.

My greatest fear though, is the conveyor belt of the Irish economy is one that disposes of large portions of labour at one point or another, and is so wasteful it tries to dispose of the same for good - and replace again with fresh young graduates from the bottom.

One could imagine in that case, why people who make their way to the top, in Ireland, realize the significant possibility they are due for disposal. This one inform a lot of decisions that are made by those who work at the top. It creates an unnecessary level of risk for those who have made it.

They could easily find themselves out in the cold, too quickly and this is the major source of the power of the trade unions in Ireland. And in turn, it takes away a lot of the legislative and policy making discretion from the government executive. The pressure upon them also, is not to change.

Not to try to make too many adjustments, for risk of unseating too many, who have worked too hard, to get to a certain level.

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Breakfast Roll

2011-10-13T13:31:00.001-07:00

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David McWilliams came out with an expression, in a recent radio panel discussion. He spoke about the Irish people being wonderful patriots, but not the best citizens.

The Irish were never afforded an opportunity to become the kind of citizens that they should be entitled to become. The economic boom period of the Celtic Tiger in Ireland, did not provide that opportunity either.

The Irish were always, a nation of pilgrims, who had to look for an angle to survive. The angles were usually construction based, small and opportunistic. You could view it in Darwinian terms, as like those creatures should scurry along the ground, underneath the radar.

It was one thing, to engage in bottom feeding in the 1950s-1980s in the United Kingdom. It was a brutal Darwinian shake-down, that occured when groups of Irish left their home parishes, to 'make good' for themselves abroad.

We all know many stories, of the Irish man or woman, who made good against the odds. I am in my late 30’s, but I am not too old to recall the very stagnant times of the early 1990s in Dublin in Ireland. I would attend jobs fairs and seminars about the construction industry I was working in.

There was an expression that gained some traction in the middle 1990’s, to describe a phenomenon, of how some of the Irish began gradually to trickle back into Ireland to work in construction again. They were called, The Irish in London, back in Dublin.

The principal thing we have worry about in such a small country such as Ireland, is that a tipping point can be reached very quickly. That is, the point at which the youngest, most energetic and most entrepreneurial citizens become active and collectively decide to perform a certain task.

When the Irish are in London, the tipping point cannot be reached as soon. The collective the Irish need to integrate with, is larger.

The Irish abroad can throw enormous energy into their enterprise. They carve out a space. They contribute forcefully and postively to the energy which defines a time, a place and a level of economic activity.

It is like certain sporting occasions, where you sense a certain kind of atmosphere or synergy, between the various supporting crowds.

In larger countries, the energy which the Irish bring into the equation has benefit. But in the 2000s in Ireland, we tried to achieve the same, on our home turf.

That was a major problem.

There were no boundaries in which the ‘bubble’ of economic energy and activity could be confined. It is pointless trying to regulate the Irish on their home soil. The achievement which the Irish have shown all over the world, time and again, to success, is to get over or around the regulation. To circumvent it.

Why should the Irish behave any differently on home soil?

The bubble expanded, and expanded. The Irish prime minister's phrase summed it up. The boom is getting boom-ier.

I recall, very vividly, in the mid 2000’s, my occupation was to ride shotgun in the passenger seat of a vehicle which drove around the midlands of Ireland. The property developer who drove the vehicle, had obtained finance from an Irish bank, and was a raw recruit from the Irish concrete industry.

It felt like one of those Vietnam war movies. Where the grunt soldiers, have to suffer because of a bad platoon leader.

He drove to various sites of football playing fields in towns around the midlands of Ireland. Large open areas of space, alongside centres of population. We rolled into those villages and towns, in our large SUV vehicles.

Equipped with folded up maps, satellite navigation and mobile phone contact numbers of local estate agents. They were like the informant network, who would leak intelligence about sites worthy of investigation.

In the early days of the Irish state, the prime minister Eamon De Valera waged a kind of economic war, with our nearest neighbour Great Britain.

In the 2000's, it felt like we waged economic war on our own inhabitants.

My job was to point a camera out of the window of the automobile, as we sped past various ’sites’. Such was the speed of operation and the fervour to build-and-flog projects, which today have become Irish ghost towns.

A wasteland legacy of breakfast roll man, and our internal economic conflict.

I would like to leave readers with an observation. In the absence of a natural ‘containment’ - as is the case for the Irish in London - when we ramp up our economic activities here in Ireland, we need to find some way to impose constraints upon ourselves.

We need a rules of engagement, to put it quite bluntly.

One could look at the labour supply, as a possible control nossle. The amount of construction specific labour, that is made available at any one time in the economy.

There are many who arrived home to Ireland from abroad during the 2000’s, who were shocked at the amount of Irish enterprise that had become specifically tied up in the construction sector.

Surely there is an index, or a reporting system of sorts, that one could use to monitor this.

At the present, Ireland is seeing its resources leak out. The real possibility is we will find ourselves dealing with inflation, owing to lack of resources to do anything.

Lone opportunist individuals, building themselves high-tech carpentry workshops in the middle of no where. Then selling the workshop for half nothing, and going to the southern hemisphere. That is far from being a optimal use of investment. But that particular story repeated itself frequently in Ireland.

Too small, too opportunistic and wasteful.

Every breakfast roll man for himself, is not the way to build a stable platoon.

Brian O' Hanlon

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Big Boot

2011-10-13T12:28:00.000-07:00

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Michael O'Sullivan writes at the Dublin Review of Books.

At a broader institutional level, the design of a cross-department, multidisciplinary education programme for senior civil servants may be one way of developing necessary technocratic skills.

This would arguably encourage better coordination across departments, a vital process that could also be enhanced by a “one country” office that would work to coordinate departments and state bodies on specific projects.

I would like to try to expand on Mr. O’Sullivan’s sentences.

Take a subject like energy policy in Ireland. I have read countless papers, views, comments on the subject over the past number of years. I have met many individuals working with this subject in some way or another, in some capacity or another. I have travelled to, attended and soaked up the conversation, lecturing and teaching of all kinds of voices, groups and interests in relation to the energy policy question.

But most of all, in my attendance of so many different events, so many different groups involved in some way with national energy generation, or conservation policy in Ireland - the one thing, that I believe struck me most forcefully about it all - was the apparent lack of a coordinating function, which aught to be performed by a departmental branch of the permanent Irish government.

The reason, this lack of a coordinating function was always so apparent to me, is perhaps, because it takes enormous effort and understanding to cross so many boundaries, and obtain the input from such a diversity of points of view. But that is really, where the leg work needs to be done. Otherwise, what we witness in the area of energy generation and conservation policy in Ireland is a whole lot of discreet, independent efforts - and huge loss of benefit from resources - and duplication of efforts from so many different angles. A huge lack of communication, from one side to the other side, of a large network of associations.

If the state isn’t able or willing to position itself in the middle, and on the spot, as things happen, as things roll out - then it doesn’t happen. No one does it. It remains, a maze of different cultures, divisions, niches and sub-cultures, operating in isolation. Each sub-division could be enhanced in its effectiveness several fold, if we could learn how to assemble the whole picture together, in some way, through a state effort of sorts.

I think that Mr. O’Sullivan’s sentences attempt to convey this notion. We often look to the Irish state to ‘do something’. To become, the driving force. The reality is, there is plenty of driving force, all around us. The problem is, it is pulling in twenty or fifty different directions at once, in the total absence of any coordination function being performed by anyone. The truth of the matter is, we don’t require an Irish state to become a driving force, of any kind. But we do require, the Irish state to provide some helpful coordination of resources, effort and time-line-ing, at some level in the system. That would be the biggest pay-back of all, for our taxation Euros.

There is a phrase from Cybernetics, which comes to my mind. The governor, is the element, which if removed, the system goes into disarray and collapses soon after. It doesn’t have to be a very elaborate device. But it is required to be present, doing the right thing, at the right time. This is the model of how the Irish state aught to be involved in the affairs on the island of Ireland. But we haven’t learned how to do it, like that, so far. Most of the time, the Irish state enters into the fray using it's hob nailed boots, or not at all.

Brian O' Hanlon

Sub note: Enterprise development.

What happened over the course of the last few decades in Ireland, is that we became extremely educated as a population. But unfortunately, we have no experience in Ireland of managing such a resource, because in the times that minister Michael Noonan and others were at school, hardly anyone got a high level education.

A basic education is what was available. What we have in Ireland in the 2010s, are armies of educated people, and no body in the country looking at how the same, can be utilised as a resource. The multi-national companies from abroad can come into Ireland, and visualise the situation they are presented with. They are able to assess much more quickly, than our own state boards and departments, the human resources that are available and how to organise them efficiently.

You look at our higher level education system. There are 17 institutes of technology, dotted around the place in addition to the national university institutions. And who knows how many smaller colleges and centres of higher level training dotted around in between the above. You look at the think tanks, the focus groups, the professional bodies, all doing their own thing. All trying to crack open the same types of problems, from their own angle.

But there is no wide angle lense available. There is no one tasked at the moment, with the basic job of understanding how ‘A’ relates to ‘J’, and then relates to ‘W’.

This is the outcome, of a situation, where the Irish state, newly born - is able to generate the resource of the educated population - but then, does not know or understand how to organise it. Look at what we do with the medical professionals we train for instance. I recall listening to historian Tom Garvin’s description of Sean Lemass, and his earlies policy initiatives to manage industrialisation better in Ireland.

The historian, Garvin, offered the example of a shoe making factory in Dundalk. There was a similar one situated somewhere in Cork. Both factories had been producing and working away independently for decades. But one was not even aware of the other. These were some of the early findings made in the department of Enterprise under Lemass, when they began to look at the question of how to organise the industrial capacity in Ireland.

In the 2010’s, we are in a very similar position with regards to knowledge and innovation.

During the year 2009, I was briefly involved for that 12 month period in at least a dozen bodies, and various events which happened and sought to enable enterprise to happen, in the energy conservation and generation market sector. I can tell you one thing. It took me only 12 months of burning through my own shoe leather, and funding most of the fieldwork research myself, to gain a comprehensive overview of the different groupings and sub-currents in this innovation sector in Ireland.

I recall, having a conversation with someone from Enterprise Ireland, or one of those state bodies about the lack of coordination efforts. I know, that I did not bump into any state employed persons in my travels during 2009. That was, at a time when Ireland found itself in one of its worst economic nightmares of all time. But the impression, I got from the state body, was that they didn’t appreciate my invading their territory. It was their job, to gain this magical overview of things. It was their job to come up with the comprehensive strategy document.

It wasn’t my place to point out some of the interesting opportunities and connections which aught to be made. It was strange.

If I had had the resources, I could have made connections even further afield, with work going on in other countries, involved in the same sector. In fact, many folk did travel here to Ireland, and those people I did meet here in Ireland. They kept asking me, where was the coordination and public representation at many of the events and meetings? How did all of the activity happening in such small discreet groups in Ireland feed into something larger? The problem was, it didn’t. The problem isn’t getting better either. It is getting much worse.

One often wonders how venture capitalists make their margin. How do they spot opportunities? How come they have a monopoly on luck, when it comes to seeing the future? The Steven Jobs or whoever it is. The answer is very simple. It would be difficult for venture capitalists not to succeed. Because so few other people have their eye on the ball, and can see how it is happening. No one else, will burn the required amount of shoe leather.

The energy that we threw into property development in Ireland, and such was the focus from the financial industry. It is a pity, there isn’t a small bit of the same given to enterprise. Ireland would be in a quite different league then. We all talk about multi-nationals investing in Ireland. The very least important part of what they do is invest. Very often, all they do is coordinate efforts and resources in ways we never learned to do for ourselves. We don’t even give it an honest try.

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Enterprise Policy

2011-10-09T16:32:00.000-07:00

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[ Draft in progress ]

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Niche Readership

2011-09-30T15:09:00.001-07:00

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A commentator at the Irish Economy blog wrote,

If you think your implied jeremiad against economists

[ break ]

applies to Krugman, I’d be interested in seeing some details — and documentation.

I would like to ask a simply question. How many visitors to economics blogs, were indeed, readers of Paul Krugman’s work, prior to 2008?

Lets ask the question, how many visitors to the economics blogs, prior to 2008, would official claim to be avid readers of material by Paul Krugman, Joe Stiglitz, Roger Lowenstein, Michael Lewis, Kenneth Galbraith or many others?

The fact is, quite few would openly claim to like reading an economics book, or an economics history book. What I mean is, the interest in that subject material was confined to a niche.

Then what happened in 2008? Let’s ask that question shall we?

I would relate it to the subject of property investment. I recall as a young teenager in the early 1990s in Dublin city in Ireland, I began to study a course known as Architecture.

At that time, it was no popular. Ireland had emerged into the decade of the 1990s, from a decade of the 1980s, which saw a lot of problems and very little solutions. But by the year 2000 and beyond in Ireland, it appeared that Ireland suddenly had a solution to everything.

In fact, we were supposedly a shining example to all the world. I was personally shocked by the fact that so many young, intelligent graduates from universities in Dublin came out in the 2000’s and tended to believe in all the hype.

I was suspicious. But what did that matter?

I was old school, out of date, and not trendy enough. Not willing to take a chance. Reach for the stars. Ireland had all the solutions, and anything else was officially un-cool.

Part of that idea, that a little country such as Ireland was invincible and possessed an solution to everything (even though it was all rotten to the core inside), was tied up in the subject of property investment.

Guess what? Everyone was an expert in property investment.

Everyone read newspaper articles, and watched programs on TV, and chatted in cafes and bars about property investment. Everyone had become an expert, and everyone had an iron in that fire. Or if they didn’t, they had some scheme to get an iron in the fire.

It’s easy to criticise banking institutions in Ireland today, in the absence of the social context that led directly to the property development in Ireland. But the fact was, much of the demand for the same, arose from the aspirations, beliefs and ambitions of the youngest, brightest and most able graduates from the universities in this country.

This leads me back to my point about Paul Krugman.

Essentially what has happened in Ireland in recent years, is that group think of one kind, has been replaced by group think of another kind. The brightest, the youngest and most able people in Ireland today, are all experts on economics and on figures such as Paul Krugman.

Where is that going to lead I may ask.

I was a frequent visitor to the Paul Krugman, or economics section of the bookstores in Dublin city, over the period of the 2000’s, prior to 2008.

However, I would say I was a lonely visitor to the same section. Not many folk in Dublin in that period when all the machinery of the Irish property boom was working full throttle, would even claim to have set foot in the Paul Krugman section of an Irish bookstores - much less, have an opinion about what he wrote.

But suddenly, that has all changed in Ireland.

Now, everyone wants to shout over everyone else, to claim how much of Krugman they have read, and understand, and can add to.

Now, like in the days of property boom, we are in the days of an economics bookstore boom, and everyone wants a piece of it.

Former Taoiseach, Brian Cowen liked to use a phrase, punching above our weight. I don't know what we are to do about this overly competitive streak in the modern Irish psyche.

My fear is that, by the time we are done, it will have been the ruination of the Irish as a people.

Brian O' Hanlon

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Change

2011-09-29T09:24:00.000-07:00

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Michael Hennigan commented at the Irish Economy blog site,

For example tarring bankers and developers as greedy and egotistical may bring some satisfaction but how do most people behave in a system with limited accountability; the absence of concern for conflict of interest and weak/selective enforcement of rules?

Four years after the onset of the credit crunch, has Ireland embraced change or is it more satisfying to focus on failures elsewhere?

The distinction which should be made, is between an area where change is forced upon individuals, and other areas of the economy, where change is something folk deal with only in the abstract.

Change, as a word incorporated into text in brightly coloured strategy documents.

When I think of Irish leaders of the late twentieth century - McCreevy, Ahern, Harney - what springs to mind is the brightly coloured, policy brochures about change and a minister's smiling face beside it in the photo opportunity on the steps of a government department.

The document tried to speak, as the minister tried to smile. Should it be the opposite way around?

The cult of the Sunday morning radio chat show panel, to discuss in detail the glossy new brochure.

The payment of public relations companies to make sure the launch of the policy document fits seamlessly into the news cycle, to gain maximum benefit for the reigning political establishment.

The public launch. The logo that cost a million bucks. The minister for ‘X’ with their big wide smile.

The politics of celebrity. The cult of personality.

The coffers full of over flowing cash reserves, to pay the private sector consultant for the glossy cover and the catchy sounding title.

The title which politicians must learned to fold their tongue around.

The text which incorporated the word change.

Then we discover what happens in the chamber of parliament is hardly anything at all. Change management, is that which can be facilitated between one bar stool and another, in a drinking lounge.

The question we need to ask:

Was the outcome of all our documents, and photo opportunities, to dilute the meaning of words such as change, as perceived by those in Irish society?

The words have been vetted, they have been tested, sanded down, polished and varnished.

But has society in Ireland developed an immune system, to shut out the words?

Has change became a de-valued currency, in our state?

Brian O' Hanlon

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Air Lift

2011-09-25T15:01:00.001-07:00

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[ More to follow shortly ]

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Shareholder

2011-09-25T14:04:00.001-07:00

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[ More to follow shortly ]

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Invisible Man

2011-09-24T14:49:00.001-07:00

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[ More to follow shortly ]

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Speech Writer

2011-09-21T17:23:00.001-07:00

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I will use the example of the speech writing process, to argue the design process in the real world for construction, breaks some basic rules. There are a few things which the speech writing process does correctly I think.

The process begins with an election campaign. That is like an initial filter. A figure head and/or parliamentarians are sworn into office. The representatives learn to think of themselves in terms of the office, rather than as individuals with buddies, mates or pals. In theory that is how it is supposed to work.

The figure head, or the governing body, is elected to carry out some kind of mandate. The mandate is a rough outline of policy and direction. It is tied to some kind of term or duration. The clock begins ticking the moment the office has been occupied.

The speech writer or speech writing team is critical. They must get to work, and use the resources available to the office, to send out drafts for perusal and observation by sub-branches of the office and/or linked agencies and bodies.

The message is gradually translated into a language which can be used for a speech. Compromises are made and balances are struck. The elected members or figure head may find that part of their message, upon analysis, needs to be altered or augmented.

At the end of the process, you have have the speech. It in turn may link to another proposal, a budget, a policy or other action.

I draw your attention to the sequence of events. It begins with a general kind of election process. A stage at which a large number of folk are able to cast an opinion, about a range of alternatives.

This leads to a set of chosen policies to be implemented over a period of time. The task then is to have the original message follow through into actual programs and actual signals. The full apparatus of the office is made available to accomplish that end.

In the design process (as far as construction is concerned), all of the above happens backwards and out of sequence. The rules are disobeyed, and the result is un-surprisingly, poor.

What tends to occur in the design process for construction, is a cabal of interests - ranging from political, legal, industrial and financial - all cook something together.

The mess thereby created is farmed out to private consultants (otherwise known as designers), who are asked to put form on it. It is like drafting the mandate first, and then searching for a figure head who can sell it.

In that instance, the speech writer is only working freelance. The speech writer does not have the dignity of being appointed by someone who has a clear aim or message to begin with.

Instead of the message being the starting point from which all else evolves, things are executed the wrong way around. The agencies, sub-branches and bodies start the ball rolling, and the speech writer (the designer) only gets involved at the end.

The speech writer is paid for the skill, of making something desperately incoherent appear as though it was thought out. It results in a sham. The competition amongst the design community, is for the opportunity to provide this sham service.

The process aught to work the other way around. It aught to be possible, to reverse the existing nonsensical process in many industries. It would lead to more value being created. It would see more designers being employed, and doing what they are good at.

As long as the system remains upside down in many industries, I don't believe we will hear a decent speech or message from anywhere.

Brian O' Hanlon

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Tree Rings

2011-09-19T12:42:00.000-07:00

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A commentator wrote on the subject of Anglo Irish bank, and its collapse within the Irish economy during the late 2000's.

It was a Ponsi scheme. If you want to understand the Psychology you can examine the investors in Bernie Madoff’s investments. People were making good returns for a considerable length of time.

They either had to believe it was an amazing company with a brilliant business model or a Ponsi scheme. People of all walks of life can get greedy.

There is nothing wrong with that explanation. In fact, for most people, it captures as much of the truth as may be required.

However, if I were to head the investigation team, and have the resources which Patrick Honohan or Regling & Watson (or that other fellow from Finland, whose name I can’t recall), had at their disposal during the ‘banking inquiry’, I would approach my investigation very different.

The fact is that economists try to analyse the symptoms only, and do appear to be very poorly equipped with the analytical and forensic instincts with which to understand the rubble, understand the train of events which lead directly to the collapse.

In my investigation, I would carefully build up an understanding of the real life stories, behind each €100k, each €1.5 million and each €4.0 million lump of money that for some reason, all found it's way into Anglo Irish bank shares during the 2000’s.

I think there is a lot of institutional memory out there, in each of the stories, which we aught not throw away. There is useful data, an investigator might use to build a more complete understanding of the wreckage left behind by Anglo Irish bank.

I would publish the above in due course, using names like ‘Mr. X’, or ‘Ms. Y’.

It would be possible to gain a picture of what wealth existed in Ireland prior to the financial collapse, and what its composition was. When one makes a saw cut through a tree trunk, one can learn a lot about the history of the species and the specimen.

At the moment, all of the stories behind the various decisions made by private individuals to invest in Anglo Irish bank, remain disparate and un-collated. Without joining all of this information together in some way, we cannot gain a truthful picture of what did occur.

It is one of the most catastrophic things about the collapse of the banking sector in Ireland. We had a tree ring type, source of a data about the wealth that had been accumulated in Ireland, since the foundation of the state in the 1920s. We seem to have lost that entirely, because no one cares to do the study.

Instead, in Ireland, we hang on every word that the French or German prime ministers have to say.

Investments in the public shares of Anglo Irish bank, came from an extremely wide cross section of Irish society in the 2000's. It is rare to come across such an interesting data resource. Ireland will not have the opportunity to perform research on this level again. The opportunity comes, but once in a century.

In the year 2011, Irish people are beginning to form the first tiny tree rings again, from scratch. It took many decades to assemble together the previous wealth. It took us a decade, to lose it. That should give pause for some deep reflection.

It was the smart money, the conservative money. It was money that had been earned on the back of painstaking work in a none too easy environment in Ireland during the twentieth century. We enter this new century without a ha'penny.

Although our wealth has all but vanished, it still holds a value to us, in terms of a data source.

That layer of slightly old wealth in Ireland, operated much like what Alan Greenspan called dry tinder. Greenspan would use that metaphor to describe a point about consumer price inflation. A subject that Greenspan could talk about with some degree of authority (unlike his ideas about asset price inflation).

It was the dry tinder, of older wealth in Ireland, which was responsible for setting off many of the problems we now endure in Ireland.

That is what concerns me. I will be in my 70s or 80s, by the time we re-build another layer of the same.

I believe it is something we aught to watch, several decades from now. What exactly happens when that basic layer of private wealth, all runs for the door at once? That is, when it all ran for the door of Anglo Irish bank.

Ireland faces a decade or more, where no new investment will take place. No new tree rings will be formed.

This is what future forensic economists will find, when they analyse the economy of Ireland, a hundred or more years from now. The early 21st century in Ireland, will appear as if there was a permanent winter. An ice age.

It would help, if some of the institutional memory surrounding the events recently passed, were captured and documented for future use. I am far less convinced that reports such as that by professor Patrick Honohan will provide anything useful years from now.

I do not have the resources at my disposal to conduct such an alternative investigation. I do know instinctively, that professor Honohan and others who walked across the wreckage of the Irish economy in 2009 and 2010, saw only what they wished to see. Not what was actually there.

If the economy in Ireland, prior to the collapse of 2008 were a tree specimen, Professor Honohan and his investigative group, tried to start from their own pre-conceived notion of what the tree had been. They proceeded to work out to the branches and tried to guess what the leafs were like.

This is not how to conduct science.

I would approach it from the opposite end. I would capture a realistic impression of the tree specimen. The realism or otherwise of the impression, is what constitutes the value of the resource for future generations.

Brian O' Hanlon

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Irish Bank

2011-09-18T15:33:00.000-07:00

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Irish Economist Colm McCarthy wrote in today's Irish Indpendent sunday newspaper.

It is unprecedented for bondholders in defunct banks to be paid by a country already in an IMF programme and unable to re-finance its own sovereign debt in the market.

Yeah, it is a very good paragraph. But in the vein of ‘what if’s’, maybe someone here at the Irish Economy blog can explain the following. During the 2000’s in Ireland, many people here seemed to invest in Anglo Irish Bank. It is three years since the 46 Irish economists signed their article. A lot of water has gone under the bridge. But in the past couple of years, I have encountered too many people who have lost money in Anglo Irish bank. I often wonder if any research has actually gone into this. I have come across folk in Ireland who sold out viable businesses during the boom, they liquidised very valuable and strategic assets, they sold stocks in what are still healthy Irish companies, to buy shares of Anglo Irish bank.

Maybe I had my head stuck in the ground for the last decade. Maybe I wasn’t in the loop. Maybe I didn’t have the right kinds of friends. In the last couple of years in Ireland, I have had conversations with all sorts of people who lost money in Anglo Irish bank. What exactly did Anglo Irish bank have, that enabled it to hoover up such a vast amount of secure, stable, smart private wealth in this country? What secret formula did it have? Maybe, I didn’t read enough newspaper business sections over the decade of the 2000s, and realize that I should put all my wealth into Anglo Irish bank. I know one person who still has the brass plate, that was at the entrance to a quite successful consultancy business in Ireland. He sold out his business, which he had built with his own bare hands over three decades, and you can guess where he put all of his money. Anglo Irish bank. I know of an Aristocrat who lived in a castle and grounds for the last twenty generations of his line, and he put all his money into Anglo.

Does any know what all of this was about, whose advice were these people taking and what kind of research, or light can be shined into this issue. I haven’t seen the book, or the TV documentary yet, which uncovers this story. It is a story, which I have pieced together myself over the past three years. When you talk to the ordinary people of Ireland, this is the story that emerges time, after time, after. It seems obvious to me, that the thing that allowed Anglo Irish bank to emerge as a dominant force in the Irish landscape, had a lot to do with this distribution mechanism, that reached into every small town and village in Ireland.

It seemed that this diminutive institution facing St. Stephens Green in Dublin, had a unique capability to reach into the pockets of a very widely dispersed community on the island of Ireland, which in totality can be termed the smartest, most conservative and astute money that there was here. I would love to know what brochures these folk were reading, and who exactly was dispensing with the advice that led so many of these folk, down the garden path. This story has yet to be written. In fact, for some reason, it has been kept rather quite.

Something else that we all need to consider carefully, in the Irish context. Something which isn’t that funny at all, from the point of view of Irish enterprise and further development. I am engaged in the occupation from time to time, of talking to folk about investment opportunities, and safe ways to use their wealth to finance one venture or another. Most of the time, I spend my time trying to talk people down from over ambitious goals they have set for themselves, in dispensing with their wealth into one project or another. It seems that common sense and reason is in quite short supply out there. But at the same time, I would hope to have something to offer people, which I believe to be sensible but also innovative and in some sense, ambitious.

I did quite a lot of looking into new computing platforms over the summer time, and at Ireland from the point of view of launching new data centre projects etc. Most of it, was just soundings I took from people I have grown to trust, from other parts of the world. There is already a lot of the ’smart’ money beginning to ask questions about these projects and about these ventures. Is it too early to get involved, or is it the right time. But the thing that I encounter so often, is the anecdotes about money lost in investing in Anglo Irish bank. In my opinion, we have the wrong departments investigating into Anglo Irish bank in Ireland. We should have an anti-terrorist investigative team looking into it. If we had to hire foreign expertise to come in and do the right sort of probing it would be worth it. Because what Anglo Irish bank had managed to do, it is quite clear to me, is to eliminate all possibility of private wealth investing into projects on the island of Ireland for some time.

This is the view of things, that we have not managed to understand yet in Ireland. The effects of Anglo Irish bank, go far beyond what economists focus on most of the time - the numbers on the balance sheet. Quite frankly, that has gotten far too much of the attention. Not enough genuine, intelligent reasoning and investigation has gone into the issue of confidence damage inflicted by that bank on the Irish private wealth sector. A lot of that same wealth has evacuated from the country in quite illegal fashion, because it was running so scared. Anglo Irish bank was an act of terrorism on Irish society, and nothing short of it. We all have to ask ourselves the question, seriously, if we intend to protect ourselves from the same. Or not.

The truth is, economists such as Mr. Kinsella, McCarthy, Gurdgiev or McWilliams aren’t capable of addressing any of the above. It is not even a matter of criminality, or criminal behaviour, or criminal brain work. The Irish financial collapse is simply a matter of national security. Economists aren’t trained to fix those kinds of issues. Much less, react, recognise or hypothesize. Our country should not place itself in the position, where these academics are required to sacrifice themselves reputationally, or any other way. Either Ireland, is prepared to address these issues for itself. Or it isn’t. That all there is.

The actual story of the Irish financial collapse has been kept quiet. It is a little like what professor Elizabeth Warren in the United States says about the problem there in the middle classes. Because the middle classes were assumed to be quite boring and 'safe', it never gained the amount of attention from researchers that it would deserve. Researchers tended to focus upon the extremes. In Ireland, there have been whole forest chopped down in order to allow our economists explain their views of 'what happened'. But none of them, seem to have any idea of what happened. Because none of them are actively enough involved at the front line, of actually consulting with real people on the ground in Ireland, in relation to the go-ahead, green-lighting or otherwise of actual projects.

Think of the hypothetical situation of Hollywood and the movie making industry. Regardless of your opinion of Hollywood and that industry, suppose that suddenly the investment, the projects, the ideas all dried up and the money all moved somewhere else in suitcases? Do you think the govenor of the state of California, would simply sit there and say 'oh well'. This is essentially what has happened in Ireland, I discovered. I have discovered such, from talking to real people, rather than reading Paul Krugman's blog. Not to say, that Paul Krugman's blog isn't worth reading. But it just doesn't enable one to understand what actually happened with Anglo and with Ireland.

I think the fact that Anglo Irish bank was involved and happened to be a bank is quite coincidental in the story. What actually happened, and what fuelled Anglo Irish bank to rise so quickly, was that super-charged, private wealth channel that extended deep into the most far flung places on the island of Ireland. Anglo was able to suck up all of that wealth, like you would use a straw to get the last drop of Coca Cola, from between the ice cubes while eating a hamburger. The fact that Anglo Irish bank was a bank, was only for convenience. It was only a vehicle, a device like a straw, to do the sucking action. It is very unfortunate now, that so many bright, intelligent and some brilliant Irish economists collectively now feel the irrepressible urge to stick their hands up, and show themselves off, to be the brightest kids in the class. And worse, they can't seem to get enough of the lime light. Go figure. When in reality, what Ireland needs to deal with this, is a crack anti-terrorist unit, capable of taking this investigation to the ends of the earth.

Brian O' Hanlon

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Buying a boat

2011-09-11T11:00:00.001-07:00

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I lack the technical understanding about the mechanics of big finance, the use of instruments designed to do lay off risk used by north American banks in the 2000's. I do understand, that many of the instruments did function in way they were intended.

The financial engineering used, did distribute risk more widely across system, across the entire globe.

Unfortunately, the way they were abused, meant we didn’t all get the omelette we expected. That is Robert Merton’s point. We aught not to ignore the many applications in which financial derivative contracts, can be used for good. The fact they were wholesale abused, and possibly by folk who come from a legal background, rather than a mathematical one, speaks for itself.

There is one scene from the West Wing TV series, in which Sam Seaborne (Rob Lowe's character, who ended up being the White House deputy communications director in the series), walked out of a meeting at his law firm, in which he was helping clients from the oil industry to protect themselves legally when buying a fleet of twenty year old, single hulled tanker vessels.

His clients were so impressed with their young lawyer. We have never paid less for a fleet. Outstanding!

I don’t know if the book or TV series has been created yet (with sufficient input from those who understand the mechanisms), to shine a light on how such deals were constructed for mortgage backed securities in the 2000's.

But I would imagine, we are back to the same idea, of the twenty year old, single hull vessel, without a modern navigation system to ferry toxic cargo on the windy high seas.

Seaborne remarked in the TV series, the reason the boats are so cheap, is because no one wants to buy them.

One professor from the London School of Economics made this point recently, in a lecture I recall listening to.

Some of these ‘products’ offered such an amazing return for such a low purchase price, that surely the buyers of the same, from Europe and elsewhere must have known what they were handling. It is that simple.

My question about the Irish situation is simple. What does the intermediary function of what is known as an Irish bank, buy for us in 2011? Or for that matter, what did it buy, that a simple securitization product could not provide all through the decade of the 2000’s?

I mean, what extra teflon reinforced, bullet proof, padded protection did six native and a couple of non-native bank institutions offer to Ireland? Except to tie the private debt of those institutions to the sovereign, in some sort of fantastic mix-up.

Would we have been better off all along without the extra expense of a bullet proof jacket? Would we have been better off running vest-less? That is, with Goldman Sachs as our intermediary to the outside credit markets and a wheel barrow load of securitization products?

Rather like Iceland’s banks did with UK investors. I’m not advocating it as a general policy. But does anyone know what our Irish banks provide us, that is extra or any better?

I’d like to hear a good answer to that one.

Brian O' Hanlon

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Fifteen Minutes

2011-09-10T15:08:00.001-07:00

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Stephen Collins writes in the Irish Times newspaper today,

They are now arguing for “debt forgiveness” across the board, as if that was a feasible option.

The public have a far shrewder appreciation of the complexity of the issue than most of the self-appointed experts.

According to the recent Red C poll, only 12 per cent of people thought the State should forgive debt for everyone and the vast majority said it should only apply after thorough means testing and on ability to pay.

In reality that is what is happening already.

All that the Red C poll demonstrates really, is that most people on the island of Ireland (and anywhere else in the world that had a speculative property bubble), understood exactly the gamble they were getting into.

The taxation on capital gains from land value inflation was non-existent, and if you could obtain the necessary finance to speculate to gamble, then you made no sacrifice whatsoever.

You weren't gambling with your own money. Who cared whose money it was, as long as you made use from it, while you had access to the same?

A bit like borrowing a lawn mower from the guy next door, running it into the ground, and then forgetting to give it back.

Real estate investment was the no-brainer, pre-packaged, off-the-peg investment opportunity for the masses.

It was the borrowed equipment that every one got to abuse. Everyone could be the 'smartest' guy in the room.

As Andy Warhol predicted years ago, 'In the future, everyone will have fifteen minutes of fame.'

The only thing that went wrong in Ireland, was that too many tried to avail of their fifteen minutes at the same time. The switch board got jambed.

Today, no one in Ireland has a dial tone any longer, and the telephone company is gone out of business.

No more free lawn mowers.

I am so good at telling this story, I could have made a highly successful sub-prime mortgage lender during the boom.

I could have caught out a lot of poor sods, and capitalised on their most basic ‘animal spirits’.

It is hardly a revelation to people who understood the gamble, that it was real pounds, shillings and pence, they had on the table. And not monopoly money after all.

I would venture to speculate, it was the sub-prime mortgage lender people, the banking institutions, who had themselves convinced they were using monopoly money, and not the real variety.

That is the strangest part about the current financial crisis. It was the educated and informed who got star struck, not the simple minded and ignorant, as is often claimed.

That is why there is so much cover up going on in the current financial crisis. There is more than balance sheets at stake here. There is loss of face to consider also.

A much more serious matter, for those with sophisticated education and reputation.

That is the currency of the privileged - not, the dirty, soiled printed pound or minted shilling.

Mr. Collins also writes in the Irish Times,

Many of those who are railing against the modest €100 property charge would probably make far less fuss if €1,000 a year was loaded on to their income tax bill and simply deducted at source.

The other party, which is affected most highly by the balance between tax on rental income from land, and tax on labour in an economy, is the entrepreneur.

A society and an economy heavily taxed from the point of view of labour, will find it difficult to generate a decent level of growth to stem the corrosiveness of mass unemployment.

In Spain there is up to twenty per cent of the working population sitting on their fists, and children going to school with empty lunch boxes each day.

In states such as California in the United States, there are people digging holes into the sides of hillsides to use as homes. These are sophisticated first world, economies.

So one can only imagine what happens in other parts of the world.

Brian O' Hanlon

References.

September 10th 2011, Irish Times newspaper, Public confidence in Coalition's austerity drive crucial.

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Legacy Shopping in Cuba

2011-09-08T12:31:00.000-07:00

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There is a nice expression from the TV series, 'The West Wing'.

Jed Barlett is coming to the end of his term in office. An elderly senator from the state of Florida objected to Leo McGarry, the chief of staff who paid a visit to Cuba to meet Fidel Castro. The two old men, Barlett and McGarry were legacy shopping in Cuba.

One could argue something similar about a STAR-itect. The ultimate goal for the architect, it would seem, is to become as widely recognised and praised as possible. Some architects become so famous, it enables them to go legacy shopping around the globe.

A young professional with ambition may assume, that is what they should aim for. Young designers will use famous peers as role models. They absorb what the famous designers say and embrace it. Some really take it to heart. They fear that if they don't achieve global renown, they will have failed.

The question should be, how does one improve the level of the conversation? How does one get a designer and a contractor, a town planner or a legislator to sit down together? To behave and think more rationally.

I was sitting in the audience at a lecture by British architect David Chipperfield a few years back. Chipperfield showed us slides of his work from around the world. He was renovating some old historic building in Berlin. He had a project for an art gallery in Anchorage, Alaska. He had various projects in Europe. All of his projects and designs were exquisite to look at in the slides.

He came to a slide of a project in north America and paused. It was of an office building. It looked like any other. It was surrounded by tarmac parking areas, which were full of cars. Why did he show us the slide?

It seemed out of context, compared with the exquisite attention to detail and design of his other projects. He included the slide was to explain a point. Chipperfield has worked all over the world. But he found that he could not work the way he wished, in north America. The architect is a small member of the team there, not carrying the required amount of weight.

The contractor has more influence with the client. Hence, the end result. A glass building, surrounded by a sea of automobiles. A project which didn't look like a David Chipperfield project at all.

The above is an example of the 'conversation' that may occur when a group of architects in the British Isles assemble together. The modern day 'STAR-itect' will travel around the world, and believe they need to create an large self image, to get through resistance they perceive to exist, which is preventing them from achieving their ambition.

The modern day 'STAR-itect' believes it is their duty to create such a large self image, and that clients hire them, in order to benefit from the same in some fashion. It follows, the larger the architect's ego, the larger the client that should follow and ultimately the larger the cheque book. Architects require substantial amounts of other peoples' money to do what they do.

Frank Llyod Wright was one of the first to be cast the role of a STAR-itect. Wright had a large and famous persona. He was larger than any contractor on any project. Wright could get away with stunts, no other architects could. It created the precedent for what would follow.

I know of other instances, where worldwide British consultancy firms found themselves curtailed while operating in north America. One engineering firm imagined it could re-write the codes to do with seismic theory for a densely populated state in north America. They didn't get far.

The north Americans are much too savy, to allow themselves to be instructed by a HIPPO's. Highly paid professional people with opinions for sale.

If you ask the British consultant, they claim they were not interested in the north American market at all. They had their eye on larger opportunities in such places as China during boom times.

The American codes in many areas of construction, have been developed and improved over many generations. There is no need for a global consultancy firm to come in and re-do everything from scratch.

Designers who found it challenging to throw their weight around in the American continent, found they could re-write the seismic theory books with more freedom, elsewhere.

That is what happened in Ireland in public procurement. The department of finance had deep pockets during Ireland's construction boom, and got fleeced by the powerful law firms. The department could afford to pay lawyers to write up a new set of procurement contracts. The likes of which, are too expensive to administer and work with now.

The obvious question has to be asked. Is there enough 'value' to be gained back, to make the effort of going through a change management process worthwhile?

In the instance, where north America has a well developed set of existing standards, which have stood over time, why change?

In other instances, such as the David Chipperfield project I mentioned above, perhaps a few degrees of freedom could be found in the process, to make change possible. To allow for the new and the original to emerge.

Brian O' Hanlon

Other Reading.

Blog entry, Export Industry.

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Export Industry

2011-09-07T16:52:00.000-07:00

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It is argued the Netherlands is very advanced in terms of architectural training. I remember when I was in architecture school in Ireland, going back 10 to 15 years ago, we were all very jealous of the Dutch schools of architecture, and some of those in the United Kingdom also.

At various times as students we travelled as groups to visit the schools in places like Barcelona, London, Glasgow, Amsterdam, Paris and so forth. I never got as far as Germany strangely enough, although I did make it as far as the architecture school in Helsinki on one of my last outings.

The system in the Netherlands in particular was very revolutionary in terms of architectural education. The schools there managed to attract lecturing staff from all over the world, and much public money in the Netherlands was invested in schools of architecture.

Usually, it is the other way around. The best architects from Europe end up teaching in the prime schools of architecture in north America.

There are many stories of Irish architects travelling to the United States, just to pursue masters level education at places such as MIT, Columbia, Princeton and so forth. Many Irish architects got as far as the United States and even met such people as Mies van der Rohe, but did not have the money to pursue their education there.

There is one true story of a pair of Irish architects (years and years ago), who sailed a yacht across the Atlantic ocean, and then proceeded to Taliesin West to Frank Llyod Wright's architectural school. They just showed up and offered to do farm work and cooking in order to pay for some architectural training from Wright.

I guess, that was in a time when borders were more open and people moved more freely than today. A time, long before, homeland security etc. But perhaps, back then you also had McCarthy-ism.

But the point is, many are now critical of the system of architectural education in the Netherlands. For all it's successes there are many who believed that all knowledge of construction technology was lost, in the architectural profession in the Netherlands, because of the new direction it took with its education policy.

Much of the time, you can read about the marvellous and famous architecture firms that have come from the Netherlands and done so many important completed projects around the world. In fact, most architects I know in their 20's or 30's want to move to the Netherlands for some time, to go and work for the famous architectural practices there.

But one cannot escape the criticisms of the system in the Netherlands, regarding how architects are trained in terms of construction technology.

I know some Irish architects who have built projects in the Netherlands. On one occasion they decided it would be good to visit their project under construction in the Netherlands. They arrived at the gates of the site, and said they were the architects. The contractor looked very puzzled. His attitude was, why would an architect ever want to come to a site?

I have heard mostly the same stories from the large projects in Beijing in China, where architectural firms from the Netherlands have been employed. That is, where the architects didn't spend an awful lot of time on site during the construction stage.

It is just the culture that has developed there, in the midst of what is a very successful architectural industry in the Netherlands. Maybe the reason that architectural firms from the Netherlands are so successful is that they spend so little time on site visits!

Architecture is a sizeable export industry in European countries. The United Kingdom, Spain and the Netherlands would probably be the most successful. That is why it makes sense to put so much public money into architectural education in those countries. Because it comes out, maybe ten fold in export business further down the track.

For much of the twentieth century, the United States was like the Netherlands is today. Many young designers from Europe wanted to go and work for the best companies in north America. That is where it was all happening.

During the bubble years in Ireland, Dublin city was the location that many young architects from around the world came to work.

But the strange thing was, while the designs and stuff in Ireland were performed by many very talented persons from all over the globe - when it came to doing the construction documentation for those projects - I know from working personally for property developers in Ireland, that the construction documentation was outsourced to Eastern Europe.

Imagine that. Some of the largest projects in Dublin were constructed using documents that were written in Polish!

The Polish and Eastern European construction technicians (many of the firms were Austrian based also), never set foot on Irish soil. They merely drafted the documents at home, and mailed them to Ireland.

At that time, not many people cared about how the thing in Ireland was built or put together - as long as they got their name on it - and some contractor 'just did it'. We were starting to use out-sourcing services from as far away as India also I recall, but that all dried up with the economic collapse.

Leo McGarry in the 'West Wing' TV series mentions, there are two things you never want to show to people how they are made - sausages and laws.

I think, we could add global outsourced architectural services to that list by now.

Brian O' Hanlon

Other Reading.

Blog entry, Pushing the Envelope.

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Recycle

2011-09-06T05:04:00.000-07:00

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Consider a few words written recently by G.K. VanPatter, one person who seems to be breaking into a new field which combines aspects of design thinking and management consultancy.

To compress alot of complexity here suffice it to say that many adult humans have numerous deep skills and very sharp tools from eras and contexts other than that being encountered today.

Suffice it to say that under numerous headings there is a massive skill adaptation shift underway among adult humans.

Presently one can see in the marketplace multiple generations of adult humans in schools, in businesses, in non-profits organizations all grappling with skill-shift adaptation.

Many of us have acquired those 'deep and very sharp tools' which VanPatter referred to.

However, we are facing into an entirely new century. One in which technology and new modes of communication, organisation and cooperation will have to be developed, from scratch, to enable us to continue on a forward path.

In terms of 'stepping back', or taking deep breaths, or getting on with it - or whatever expression one cares to use - at some point somewhere, we have to face up to the kind of thing that VanPatter mentions.

I like to think of it like this.

We have a finite supply of human potential and human resource capacity. It is not good enough any longer to simply discard human resources, the way we have become accustomed to doing with other goods.

Moving people around, as columns or rows, or cells on a spreadsheet, is what we have done for many years. Probably since the time of Ford and Taylor.

We have to get much, much better at getting optimal levels of performance within the 'group', the collective. We have to get a way more clever in terms of re-cycling our human resources for better use, from one generation to the next.

We can continue with announcements such as 'zero new jobs' created in north America in the past year.

But where is that going to get us? Where are all of these 'green collar' jobs that were to be created? What we need in addition to green collar jobs, is more sophisticated thinking about how we cooperate and organise, in the new century.

We owe this to ourselves, and more than anything, we owe it to our children.

In a rush and panic to develop green innovation in the 2000's, it was the weak link that failed. The critical intersection, where skill in cooperation and organisation, advances far enough, to give us the opportunity to pursue the mission.

Brian O' Hanlon

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Big Break

2011-09-03T16:25:00.001-07:00

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We are trying to define 'green' design motivations in architecture, as something with an extremely pure motive, something with no blemish or no second agendas. If we were to write the truth about green materials, eco-thinking and passive design, the reality would contain a few more aspects.

The analogy I might use, is that famous movie about the Watergate scandal, in which two young news reporters (not part of the existing established journalism scene at all), manage to capture their big break. That is what many young and gifted creative professionals have to do, in order to level the playing field. They are required to think outside the box.

There are two dozen different avenues that consultant architects can get carried down, and become quite insistent upon. If you look at each generation of architecture, there is always something new, something original which that generation discovers, which it uses to try to distinguish itself from all previous generations.

It has an awful lot to do with the lock that existing practitioners can get on the business of architecture - because it is a business, which is strongly defined by social tie networks.

That is, the amount of financial resources needed to finance the business, does not exist in an open market. Instead it travels around defined routes. You need something 'new' in order to disrupt those defined routes ever so slightly, so that it causes a little bit of chaos, and out of that chaos the up and coming generation of architects manage to win their deserved share of the market.

That is, this particular aspect of 'new-ness' that comes about with every generation of architects, has a lot to do with new generations trying to gain some market differentiation, with the previous one.

The architects who first decided to use concrete as a material, must have seemed a lot like the pioneering green architects of today. I am sure that the architects who used concrete, must have been looking partly for that factor that would enable them to 'stand out from the crowd', and to capture some of that market share, which younger generations needs to struggle to obtain.

Frank Llyod Wright for instance, was one of the first to use concrete. Wright himself wrote at some stage, that concrete had been the 'gutter rat' of building materials. I forget the example quotation, but he was describing a building material that had no pedigree whatsoever. It had been regarded by those in the loop, as something down right dirty and nasty.

Prior to his use of the material, it had been a civil engineering material mainly. It could never have been considered a material which a self respecting established architect would have included in his palette, in the way that Wright did.

But then again, Wright had nothing to lose. He was a young engineer and self-trained architect without any social network. If he was to put make some impact and attract any would-be innovative thinking clients, he had to think far outside the box.
You can witness in the work of Frank Llyod Wright, an effort in the prairie style of his earliest years to produce something which looking unlike anything that came before.

He used his special knowledge about cantilevers and reinforced concrete mechanics, in combination with a sense of spatial design to offer the 'market' for residential design, something entirely new and seductive. The early work of Frank Llyod Wright and the early passive house and eco home builders of today is separated by many decades in time.

But in other ways, the motivation is not dissimilar. The methodology of using scientific calculations, in order to understand the possibilities for design - that is not dissimilar.

Many people assume that Frank Llyod Wright was driven by some burning creativity inside of him, to reach for new boundaries. But in fact, part of that drive was tied up in the requirement of all young architects to stretch what is possible in the envelope of residential construction - in order to create a niche, a base station - in their assault on what is a 'locked' market.

Locked tightly, that is, by the previous generation of architectural practitioners, of whatever colour they may be.

My thesis is therefore, that if Wright and other young architects in previous generations, had had a ready supply of commission work from a pre-existing market (say they inherited a pool of clients through some means), their incentive may not be as strong, to go to the greater lengths as we see in the early Wright house, or the early north American passive structures.

Brian O' Hanlon

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Rain Maker

2011-08-28T16:17:00.000-07:00

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I've been thinking about the challenge or making it work, when you ask groups of students to perform assignments in the education setting.

I found it difficult to put my finger exactly on the problem. But after listening to a podcast interview featuring Tom Kelley of IDEO (and author of 'Ten Faces of Innovation'), a thought did strike me out of the blue.

Kelley was talking about a defibrillator his company designed. In the initial prototype stage they thought it would be a great idea to make it like a notebook computer. However, upon testing out this prototype, they found that people struggled to figure out how to un-latch the device and open it up like a clam shell.

That stopped the design team in it's tracks, and they changed course and worked with a 'brick' form instead. The user didn't have to waste any time on opening it up.

It was Kelley's comment about his process which I found of interest. He said with a prototype, he tries to use the feedback as a way to teach him about the problem. That is, instead of trying to defend the original idea.

In my experience as a participant in many of these group student assignments down through the years, I have found there was never any grades given to students for treating their team or group, as a prototype.

That is, learning from the feedback.

Instead, what I normally observed was tutors and mentors who would try to defend their original idea. This approach to team work has to work. It has to work, because I came up with it. People who have worked in industries for years, and are veterans of many consecutive real life projects are often the worst to have as professors, in charge of group assignments.

The reality may be, those professors have sold themselves in the marketplace as high value added people, with the right answers.

Surely to admit defeat in the configuration of a group assignment for students, would be a major come down! The simple truth of the matter is, that groups may fail and will fail in all manner of ways - some spectacular and some quite subtle, or multi-dimensional.

We can learn the most from the observation of how teams are set up often, to fail, by this setting or that adjustment. That is why I think, that at undergraduate level in education, the team should become a prototype, and a vehicle for learning.

Many students of third level education, leave to work and never want to be part of a team again.

An architectural colleague of mine in his 50's, told me that when he worked for companies down through the decades, he found all of the associate directors would shield their projects away from fellow associate directors and employees.

There is a gesture that kids in school make, when they hide their copy book, with the arm in a bow shape to visually obstruct your view of the copy book. That is how he described it using body language. So the problem has been around for a while.

When I engaged with that man on projects, we worked together inside of a company, where all of the construction professions were represented. He was the architect. I helped him with various project management aspects, and documentation, coordination meetings etc. We got along like a house on fire as they say.

It was like a mini university campus inside a company. He would always note though, how much better the engineers and financial or accounting departments were at working and cooperating on-the-fly in the office, compared to his department - the architects - and he would make the shape with the bowed arm.

He used say to me, that unless I found a way to divide up work amongst others - and avoid the impulse to carry it all on my back - I would never progress very far within the industry. Signs by, it is usually the engineers or financial people who have cracked the team work thing, a lot better, that end up running the show.

The tragedy is I think, that you can be so successful as an architect, and possibly as a designer in many instances, by operating as an individual - that too few in these professions try to use the muscles which you need to develop - to engage effectively with teams.

I think, it may have developed to the level today, where the contracts that architects operate under, are almost designed to provide them with shield defences from everyone else. Architects arrive at the conclusion that that is a good thing.

The Irish construction company I mentioned above, where we worked as a multi-disciplinary office - it fell to bits after the Irish property bust, owing to one financial scandal or another. Who knows.

But the point is, the reaction from the design community here was predictable.

Yeah, you see, that multi-disciplinary experiment - it never works.

Talk about reinforcing existing mis-conceptions.

It's true though. The smaller individual operation might weather it through a bad storm. It is hard to convince people, that the more ambitious team based enterprise isn't a bad idea.

A lot of things in business and in education, appear to contradict the positive view of team working and multi-disciplinary enterprise. That is why I have to look away totally from the construction industry now and again, and look towards a different industry, in my darkest moments.

I would like to pick up something else, worthy of mention, about students never wanting to engage in teamwork after their education. It relates in some way to the old architectural colleague of mine and the reluctance of his team members in a work situation to share projects.

I suppose, a simple reference that everyone has access to, is the DVD box set, the TV series. I am constantly plucking references from that dataset.

I guess, I imagine myself giving some clever public lecture some day, in which I can make the audience laugh by playing the appropriate clips to reinforce theoretical points.

But it is much deeper in reality than my simple analysis suggests. My TV show references only scratch the surface.

First on the exhibit list, we could think of Boston Legal, Denny Crane, Alan Shore and the Law practice of Crane, Poole and Schmidt. The reason why many of these sitcoms are so successful I guess, is because they remind people of real life.

The dysfunction-ality of the same.

The character I always recall from Boston Legal was someone called 'The Squid'. She was a very successful member of the firm, with a keen ability to get clients, even if it meant stealing a few from her fellow team members.

The other exhibit is from a more recent TV series, Madmen. The firm of Stirling & Cooper (and more recently, Draper). The problem at Stirling, Cooper & Draper was they had built their business around a key market segment: tobacco.

When Roger Stirling's old buddies, Lucky Strike pulled out and took their advertising consultancy fees to another shop, it put the firm in the red. Seriously in the red.

To the extent, where Roger Stirling looked for one of the younger expendables to pin the blame on, for ruining their tobacco business.

The reason for the above two exhibits, I think, is to illustrate a serious point. If we are to analyse 'team working' amongst professionals in the after education period, there is an eight hundred pound gorilla in the room, which cannot be avoided.

That is the fact, that the pyramid in many larger firms (and by larger, I mean, with numbers where the cutting edge team working techniques are most valuable), the promotional ladder, is based on the ability of young aspiring partners (the young Squid's, or Roger Stirling's), to become 'Rain makers'.

Denny Crane, in Boston Legal is portrayed as the ultimate 'Rain maker'. On one occasion the partners at Crane Poole and Schmidt worried that it was raining legal fees in Boston. But the firm, was not getting wet.

I would like to wrap this up by using one last reference, from an entirely different context.

I have listened to Karl Marlantes, author of best selling novel Matterhorn, about the Vietnam conflict of the sixties and seventies, speak in interviews. Marlantes is keen to try to explain to us, the actual definition of a warrior, or that of law enforcement.

Law enforcement is not the same as the warrior's trade, explained Marlantes.

He spoke about conflicts that his country became involved in, with the absence of a vision which the troops could use to guide themselves. That is, something they could define themselves within. A cause or a purpose.

Marlantes (himself a veteran of the Vietnam conflict) explained, that in the absence of a clearly defined purpose, the troops tend to rationalize their daily duties by all sorts of basic metrics, which I won't describe.

I cannot help but associate this, with the issue in the large consultancy firm, be it in architecture, or advertising or law.

The 'Rain maker' system, reduces the mission down to a basic metric: the number of clients.

Aspiring young professionals compete with each other to rack up, the highest number of the same, all in pursuit of the partnership offer.

Does it indicate an absence of the sense of a mission, amongst young aspiring designers?

Brian O' Hanlon

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Jobs at the Exit

2011-08-27T13:15:00.001-07:00

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If any of you ever watch a TV series such as the West Wing, on the campaign trail to get a candidate elected, there is an important division of labour as far as spin doctoring goes. On the one hand you have the campaign manager type.

He or she is responsible for the 'master strategy'.

Whether that master strategy is masterful or not, doesn't appear to matter that much. But it serves to unite the efforts of a very many helpers, assistants, volunteers and coax them to all pull in the same direction, at the same time.

Therefore the appearance of someone who can convey that sense of vision is important. As far as the West Wing TV series goes, it would be the Leo McGarry, Josh Lyman, Bruno Gianelli type of character.

Then you have the director of communications, who designs and polishes the message. They are responsible for invoking the myth of character in the campaign.

Build up the legend etc, and identity that people can relate to.

In the West Wing, that job fell to Toby Ziegler. Ziegler was purposefully portrayed as an odd, almost dangerous kind of character. But one who could peer into the 'soul of the nation' and extract the crucial stuff, that could find resonance.

Ziegler was also a guy, who could appreciate aspects of philosophy from both east and west.

Outside of the nation, and within.

The computer industry seems to be a lot like that.

I think, Steve Jobs was more the Toby Ziegler than the Joshua Lyman.

I would describe Scott McNealy as more of the strategist type. McNealy always seemed to talk about strategy, and always had a good one up his sleeve.

Whether it was executable or not, mattered less. For a while, the crazed investors of the dot.com era were lapping it all up.

If one reads very many biographies on these uber CEO people, it becomes quite obvious, they all envied Jobs's iconic status, that never seemed to disappear, from one generation to the next.

Like that risky aspect to Toby Ziegler, you didn't know where Jobs was going to hit from next.

Apparently, Larry Ellison (a good friend of Jobs) and even Gates a bit, tried to copy it at one time or another. With the predictable result. Like the best man at the wedding, who tries to be funny.

It turns out hilarious, but normally not in the way it was intended.

Brian O' Hanlon

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Virtual Shoe Box

2011-08-27T13:14:00.002-07:00

[ To be completed ]

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Group Work

2011-08-27T12:53:00.000-07:00

[ To be completed ]

Wisdom of Crowds

2011-08-26T05:23:00.000-07:00

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A lot of talk has occurred this year about 'cloud' computing. A good analogue when thinking about cloud computing, is the airline industry.

When we think of that industry, we can identify several distinct phases in its development. The initial non-regulated phase. What I might term, the Howard Hughes phase. That is the phase of cloud computing we are in at the moment.

We then move on to the regulated phase of the industry. After that, there is only one more thing left to do. To look at ways to game the regulations. The gaming of regulation phase has it's good points and bad points.

The good points are that it may unseat some of the long established , long standing incumbent operators who have a lock on the marketplace - so much so, that nothing moves in terms of service or price ranges.

The down side, is that it invokes a rush of low end consumers, and a race to the bottom. The low end operators aren't properly set up, to handle the rush of demand they have created themselves. Things go a bit crazy. It is like what happened in Ireland during the 2000's where people were doing Christmas shopping in New York.

The trouble in Ireland, was we ended up with a hard currency, the Euro, and couldn't handle it. We had been used to the mickey mouse Irish Punt for years, which didn't break any records in terms of spending power, but kept exports competitive.

Suddenly, we found we had a lot more buying power abroad than we had in our own economy. With low fare airlines, it made sense for people to fly to New York and spend, and take in Las Vegas too, rather than spend back home in Ireland.

A lot of money left Ireland in the other direction, to speculate on daft property schemes in Bulgaria and Turkey. Stuff that we didn't need at all. A lot of real employment and enterprise suffered at home in Ireland from cashflow starvation. The result was that half a million people (about a quarter to a third of the working population) lost their jobs.

Many of them had been flying to New York to spend their money, and returned to Ireland to realize their job was gone, and the party was all over.

There is no accounting for the wisdom of crowds, I guess.

Brian O' Hanlon

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Innovation Taskforce

2011-08-24T05:35:00.000-07:00

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What we have in the 'innovation taskforce', is an example of what Clayton Christensen described in the book, The Innovator's Solution.

It is akin, to RCA company, trying to develop the transistor radio to the same level of sound quality, enjoyed by the then existing market for their vacuum tube based radio products.

The transistor wasn't ready to make that leap yet.

Instead, what was required was a customer base, who didn't care about vacuum tube quality of sound re-production. What was needed was a different consumer base, who would enjoy the transistors for the advantages it possessed over any other technology.

Christensen gave the example of the hearing aid, and how users of hearing aids found the new transistor based products wonderful.

Because they were so lightweight and convenient.

But instead of pursuing that consumer base, RCA sold the farm to try and develop the transistor in their laboratories.

Cue the Japanese corporation of Sony, the transistor based radio for teenagers, the low end transistor based televisions and so forth. The rest is history.

I feel, that the Innovation Taskforce in Ireland fell into the same trap as the RCA effort with the nascent transistor technology.

It has set the bar for what it needs to achieve, so high in the sky, that it makes it impossible to achieve.

What we need to do for the Innovation Taskforce, is to find that group of consumers whose threshold for quality is so low, that it is very easily served.

I think that we do a more useful way to define Innovation, as far as Ireland is concerned in 2011.

What is the market we aught to be serving?

It is the young, recent graduates from the different faculties all over the country.

The existing consumers for innovation ideas, those agencies and sub-agencies and quangos are already vastly over served with slick reports, field trips and heaven knows what else, on foot of the excesses in the public sector during the Celtic Tiger.

They are like the consumers of those old vacuum tube RCA products. But they are not the future.

The students are in the market for something cheap, lightweight, convenient Innovation aware 'products', does exist in Ireland, and furthermore that that group is under served, or perhaps starved at the present moment in time.

The real consumers for Innovation seminars we aught to be serving are those with two euro in their pockets, and passion in their hearts.

Not a bunch of pensioned civil servants who look at it, as just another day at the office.

I like to imagine the sum of all human knowledge and skill, encapsulated by the Irish university system, as like mainland China.

Inside of mainland China, all of the faculties and disciplines are represented as the different regions, or sub-states of the super state.

They all speak in different dialects.

What is required is a single low level protocol that acts as a kind of router between all of the different sub-networks and conversations. That is my definition of Innovation.

What is Innovation?

I would describe it using the following sentence.

A very basic common dialect (sort of like Mandarin in Chinese) that young graduates from different disciplines (or parts of China) can use to facilitate the boot strapping of methods of cooperation between each other.

Brian O' Hanlon

Other reading:

Chris Horn, Possible end of the Innovation Taskforce.

Blog entry, School for Innovators.

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Spoiled By Poverty

2011-08-23T00:31:00.000-07:00

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Spoiled by poverty, was an expression used by Irish architect Sean O'Laoire, in an interview on RTE radio broadcast, The State we are In, that air-ed in the mid 2000's.

The series of broadcasts was about urban design in the context of the credit fuelled Irish property bubble.

I think the expression would make a dandy title for a book, which could attempt to explain the apparent contradiction in terms.

A book, that cannot be written by David McWilliams, but only by someone such as Mr. O'Laoire.

A person who has grown up and experienced both sides of Ireland.

I don't fully understand what O'Laoire's expression means, but I think I have a rough idea.

Being spoiled by poverty, seems to be a default mode, which inhabitants of the island of Ireland are happy to slide back into, at intervals.

It may have something to do with successive leaders that Ireland has endured down through the years.

You know the sort.

Gay Byrne for President.

Some head to fill an otherwise blank space on the television footage at national occasions.

Being spoiled by poverty, may imply a big, all-powerful state in Ireland.

The type of state, which means we don't have to worry about personal wealth or finance.

Because we won't have any.

Entreprise would mean selling a few sweets and newspapers to each another, along with the odd pint of milk.

The average government minister should be able to wrap their brain around that.

Keep it simple.

We would be content looking out of our mouths at the prosperity that happens else where.

The Jews have Israel.

Ireland would be our homeland.

A place to feel proud of, from four thousand miles away.

All you need is Mr. Spud head to be Taoiseach, and you're all set, to be spoiled by poverty.

It would be best though, if Mr. O'Laoire explained this himself.

Brian O' Hanlon

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Librarian Peter

2011-08-11T16:09:00.000-07:00

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I finished reading an article by Mario Vargas Llosa (using Bing Translator), about Nicholas Carr's most recent novel, The Shallows, in which he explores the question:

What is the Internet doing to our brains.

Having read Vargos Llosa's article, all I can think of is of the kids growing up today in the Internet age, compared to guys like myself who emerged into their 20's in the 1990s, when in Ireland at least in universities the physical library was still our source of research, and the world wide web simply didn't exist on anyone's desk.

I remember, I was appointed as class representative in 1995, by one of the tech geeks in my class (who read Wired magazine and all of the other cool magazines at the time), as the person to go down to Librarian 'Peter' in our college and demand to have the 'Internet' piped up to our faculty area for our access.

I still recall the weird conversation I had with Peter the Librarian, a man of mature years and considerable stature amongst his fellow librarians.

His only frame of reference seemed to be the collection of VCR tapes and CDROM media he had in shelving behind the desk, which you could access on loan for periods of an hour at a time, and had to watch on 'audio visual' terminals that were located at a strategic location nearby the main lending desk.

Peter said to me, 'the Internet is a nice little thing.

He had 'played around with it a bit' he told me.

But other than that, he saw no reason to get unduly worked up over it. Peter was an expert librarian, and I took him on his word.

I wasn't sure it was going to be enough for my Wired magazine reader friend.

It wasn't. He got furious with me, for having blown the negotiation as the class representative. I need not run for re-election.

I understood that my performance was below par. But I didn't feel like going down and strong arm-ing poor old Peter. He was too nice a guy. I decided to allow matters settle for a while.

Life went on. The world didn't stop turning on it's axis.

I had no idea what the Internet was anyway, while I was holding conversations. I was acting as the go-between, the two parties.

The clueless goodwill ambassador.

For all I knew, the internet was like some space shuttle that could whisk you away to another galaxy. It was the guy who read Wired magazine, who made me go down and have the conversation in the first place.

But I cherish the experience now.

It was uncomfortable at the time, to try and negotiate for something I hadn't a clue about. But today, it feels like a reference point, and a peg from which to hang things off of.

That is, in terms of my own neuro-logical development and use, or lack thereof, of new networking technology.

Having had access to the world wide web for several years now, I am trying to imagine how different it could make things for the equivalent young twenty year old kid, entering the same Library building in 2011.

The thing that springs to my mind, is that kids today must have less confidence in their own ability to develop a theory, speculate an idea or stand by an argumentative position.

The reason for such?

I propose, the awareness kids have today, anyone with a notebook computer and google search can research the same topic in a matter of seconds, makes things different.

If you are to speculate too far, venture into the unknown led by a daft hypothesis, somebody could easily nail you for an incorrection, mis-understanding or plain b***s*** merchant-ing.

It must lead to very boring talk times in dorm rooms etc.

Groups of twenty something year old's gathered around the camp fire. But, no one willing to go out on a very long, and dangerously isolated branch.

Those were always the best conversations.

When someone was so far out there, you didn't know whether they were winding you up, or opening your mind to some new, fantastic avenue.

Nowadays, it is possible, the kids may fear they will stray too far away from the search-enabled pack.

Brian O' Hanlon

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Apocalypse Now

2011-08-03T17:18:00.000-07:00

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The author Nicholas G. Carr writes at his Roughtype blog,

Facebook has always skewed toward conversation; Twitter started with a conversational skew but quickly shifted toward a publishing skew (though it continues to have conversational subcultures).

A while ago I sourced an article by Carr from 1999 in the Harvard Business Review which made reference to Richard Sennett's work. Carr talked about a society where people had numerous careers, or maybe had no career at all.

I often thought to myself, how appropriate a technology such as Linked In is for that world.

Lately in Ireland, almost everyone I know got dispersed from their earlier employment positions, and ended up on the other side of the world, or in a discipline, which was the equivalent to the other side of the world from where they had settled at first.

Forget about the Eurozone financial stability problems and so on. The big thing, the really big, big thing happening in Ireland and similar technological industry hubs at the moment, is the full realisation of the Richard Sennett type apocalypse.

Indeed, buried deep within many a Linked In branch network, are tiny nodes that are early conversational subcultures.

We have the Twitter subcultures in Ireland. But they offer more to individuals whose employment hasn't shifted around as aggressively as it has done for others.

Economic Tsunami waves arrive across Europe now in two week cycles, rather than two month ones.

The Twitter conversations provide a lot of foreground noise for these events.

But there is a deeper and more significant, static signal beneath that, made up of dispersed, migratory worker patterns, held together loosely by things like Linked In accounts.

The various connections and 'groups' are made possible by the walled garden approach of Linked In type of technology.

Linked In, tries to address the problem of physical dispersion head on.

People try to move along their chosen career path in linear fashion. But people are expected move erratically in physical space, in order to maintain the linear appearance.

Linked In further tries to emphasize the sense of linearity in a world that is anything but.

Brian O' Hanlon

References:

Blog entry, In Search of a Challenge.

Sub note: Calendars

Things like calendars have proven rather difficult to translate into the digital age. The stubborn paper version on the fridge door of every household, shows no sign of moving off the stage soon.

The felt tip pen and a sheet of paper with boxes and numbers appears resilient anything the digital arsenal has thrown at it, thus far.

The paper curriculum vitae shows some signs of moving off centre stage. But sign retains a strong foothold.

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Out of Memory

2011-07-23T20:20:00.001-07:00

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Someone wrote on line about operating systems that run on small devices.

This has happened with every "live" linux I've ever used (knoppix, ubuntu, etc) when you run out of memory.

It just dies with the CD grinding away (or silently in the case of USB boot).

In the old days I used to work as a Ken doll, for design companies.

The type of workplace that had a really 'active social program'. Events for everyone in the company, or bonding excursions. Workers are attracted into big named firms by giving them a false, temporary sense of entitlement.

New personnel were treated as hot property, and were highly valued. They were promised partnership by the end of two years, and so on.

You knew when these kinds of recruitment deals were struck, because the employee would get a present of a shiny new Apple or Dell workstation of there choosing. But none of them had enough system memory installed, barring a few miserable megabytes that came by default from the maker.

The fresh and vibrant new employees were required to give the client base an impression they got youth and dynamism for the buck they were paying.

Eye candy for rich clients.

In reality, the lack of system memory in every shiny new box, was like a hardware lock to re-assure incumbent creative directors, they couldn't be marginalised by young Turks with powerful digital tools.

If you were foolish enough to spend five to ten years of your life in this dump, you would do absolutely nothing useful except be a cardboard cut-out of youthfulness and vitality, whilst that same youthfulness and vitality drained slowly out of you, over roughly the same time frame.

By that time, you had likely or not grown to be dependent on the firm for your entire sense of self-identity.

My most vivid memory from those days, was of a young graduate out of university, who had spent a day doing a 50-layered Photoshop presentation visual. He arrived panicked into my cubicle at 7.00pm one evening, worried that his Apple system was responsive and not working.

It just didn't have enough physical memory in sixty-four megabytes to save his masterpiece!

There is one day of your life gone down the drain, I thought to myself. This was a regular occurrence where I worked, and I knew that someday the world might produce better clients, who knew when they were being had. But I doubted it.

A design or other creative profession should not exist to serve as a climbing ladder for company directors to scale, whilst forcing young people to stay at the bottom. A design profession should exist in order to offer real service to a market.

As we know from events in recent times, the market place is far from being perfect.

On that day, the phenomenon that revealed itself to me was the self-vulnerability of those in companies who are at the middle of their journey.

Those who have travelled too far to turn back, but are still far short of the finishing line. They risk getting caught out, of having their cheese left out in the wind.

I noticed a director sitting in the corner of the office quietly crack a smile on the side of his face, and say nothing to my young friend about his Photoshop mishap. That will teach you, he must have thought to himself, for trying to blaze a trail on my patch.

Territoriality is something that always emerges as a phrase sooner or later in the best episodes of CSI Las Vegas, or some other sit-com, where a team of crack investigators try to get one step ahead of a maniac on the loose. It usually involves a map on a board with a lot of little coloured pins on it. But what I saw in the company directors face, the day my old pal lost his multi-layered masterpiece to the Apple OS9 operating system, was territoriality enough for me.

I soon got out of that line of work, and am thanking myself ever since. If I had stuck around though, I'm sure I would have made it up to the level of company creative director, and developed the technique of cracking my own wry smile in the process.

Instead of buying new bling boxes with no memory in them, the directors should have given everyone a USB stick with a copy of Knoppix on it. It could have achieved the same purpose, for a lot less.

Asking around lately, I had to smile when someone told me the set up. The office was doing a multi-million Euro project for a new hospital.

Each system in the place had a license for a new intelligent modelling software. The largest memory in any box in the place was two gigabytes, presumably running a 32-bit operating system.

They couldn't open up the whole model to do what it is supposed to do - to allow you to run clash detective on the various disciplines' design information. To take some of the grunt work out of cross-checking blueprints.

I have to laugh. The incumbent directors in these design firms are on multiples the salary of their underlings who do the grunt work. The silent shareholders (owners) of these companies earn multiples of what the directors earn.

Everyone is being paid off at some level, in some way, to keep the whole status quo intact. The incumbent directors make sure that no bright, youthful individual is going blaze a trail, or gain notice by having a machine able to cope with the task.

Brian O' Hanlon

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Wrapping up Storage

2011-07-23T14:20:00.000-07:00

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It may be of value to read in one piece of writing about aspects of your desktop computer choices and/or requirements you had take for granted, or forgotten about lately. I know for myself in the past three years having moved exclusively to cheap, consumer notebook systems for most of my workloads, I have become confused and strangely forgetful about the unique advantages of a desktop system. I know that some of you will be in the same boat as me in that.

It was one thing to build gaming rigs years ago in your spare time. It is quite another today, to be staring at a plastic clam shell object all of the time, and not to know or even care what is inside in it. One of the key distinctions one can make between a notebook computer system and a 'desktop' is the performance of the drives in notebook systems versus desktop systems. You tend to end up with slower drives in notebook computers.

Experts have made suggestions in the last year, of putting a couple of solid state disks into notebook systems. That will no doubt remove a big part of the distinction between the desktop and notebook which currently still exists. One of the most important distinctions for me between owning and running a notebook computer system, versus a 'desktop', is the ability to have two hard drives instead of one. At the most basic fundamental level, that is the real distinction where I am concerned - all other things being equal (which they aren't of course, but for the sake of argument I'll pretend that they are for now).

Why is the one versus two hard drives thing important? Well, what it does is it tends to divide down the middle two important issues with any computer system ever conceived, or ever built. Looking at the storage configuration, you can optimize for:

System Uptime.

Data redundancy and/or performance, and/or power consumption.

You can optimize simultaneously for both.

That is to say simply, if the data drive blows out, you still have an operating system. If the operating system drive dies, you still have your data drive. That is why the two drive thing is important. It means, in all likelihood you will never have to deal with two separate problems at the same time, but only one, which is confidence building in the system you are using. Worst case scenario, you may have to go to optical, USB stick, external USB hard drive or online, to get your data. If the operating system drive goes, one late night and you are back on the road. No biggie.

The older you get, the more you tend to reach for the piece of mind, of knowing all the above holds true. That cannot be said of consumer notebook systems - and frankly, they scare me ALOT for any serious home personal use.

The last option above (optimisation for both system uptime and data redundancy) is expensive in terms of space, power consumption and money. For instance, a good way to optimize for system uptime in a smaller, compact, quiet case about a foot square, is maybe to go for a small single boot drive, which offers decent performance off a single platter and cool enough that it isn't heating up the inside of the smaller enclosure. In fact, in larger enclosures, I often speak to people and they tell me they are using a small, fast 250GB disk unit for their boot drive. This seems to be quite common, and people except things to go wrong with it over time. I guess, the smaller drive may save a few watts over the long haul.

This brings to an important question in the desktop world in 2011. You have a few degrees of flexibility with a mini ATX desktop bare bones kit, that you do not have with notebook systems. With a desktop system, the same system can be situated equally in a number of physical environments - with different case layout, power supply options and storage configurations. The case, the power supply and storage configuration options are totally interdependent, and it is best to think of them as being so.

You may decide to build a desktop system to fit inside a nice, compact, quiet enclosure. But over the three year lifetime of the equipment (or for however long you hope to stay attached to it), you may decide to that this mini ATX barebones and locate it into a much larger enclosure, which can accommodate a much beefier power supply, lots of power supply leads and many more fixed and removeable (drive caddy) drive bays for hard drives. Sometimes the opposite occurs.

You may take a barebones system and its attached operating system license and shift it down into a smaller case enclosure after it is a few years old. If I had to guess, this is how many clever people acquire their basic, everyday administration home computers. You can then proceed to use that same system, ported down into the smaller enclosure as a 'run all day long' system, for another few years.

I want to say a quick few words about the relative balance of system uptime versus data redundancy. This relates specifically to larger boxes I guess. The fact of the matter is, you need a lot of drive bays, a lot of ventilation, a lot of power available in the case, to optimise for both system uptime and data redundancy at the same time. There are certain ways you can approach this nowadays. For instance, you could use a single fast boot drive, and then your a mirror set of two eco-green drives for your data volumes. Or, maybe some people would be content to boot from a mirror set of eco-green drives to heck with it. And simply use external eSata, USB or Firewire storage as required for data.

You essentially have eco-green storage, in bag loads internal and external to your system, but equally close to hand. My own personal preference, if I were really to push out the boat, which I seem to be doing at the moment is to use a mirror set of two high performance drives to boot from. A mirror set of Eco-green drives in drive caddies (so each one is replaceable at intervals, and you continue to re-build the array using new parts as time goes on).

This sort of configuration I should point out, uses up two optical drive bays, still leaving room for one actual optical drive. It utilizes only two hard drive bays, and if you are lucky enough to have bought the beefier power supply and case that can accommodate it, you can easily add in another miscellaneous Sata drive or two (maybe off a higher speed controller or something in the future), to support additional storage for movie files, or very large data types like that.

That uses up pretty much all of the available ports that come as standard on a mini ATX board in 2011. However, you may want to consider lying the system on a sturdy trolley on its side if you go down the route of five or six hard drives turned on simultaneously. It seems that even the best of cases struggle to stay very silent and civilised with that much vibrating mechanical parts installed. There again, the solid state disk technology may open up avenues to the power desktop user, which were never there before.

The later sort of configuration is never going to be available in the notebook system, no matter how many solid state disks we throw at them. Although external networked attached storage available in neat, compact consumer type packages nowadays might not be all that bad. But I suppose the main thing to take away from this rant, is the degree of flexibility there exists with a desktop. What I like about it too, is that parts such as good power supplies, good monitors, good case enclosures and often storage components themselves, are rarely wasted. It should be possible to get many, many years out of those parts, if you buy wisely today.

The same has to be said about operating systems. If everything else breaks, is replaced or you simply grow out of it, in your desktop system, your operating system license usually stays through the thick and the thin of it all. That is, whether you decent to start compact and tiny, or grow to more elaborate arrangements, the operating system doesn't care too much what case enclosure, power supply or storage options you are using.

My own preference would be to have a cheap home edition available for when the mini-ATX makes its way at the end of its life cycle into a mini-ATX enclosure with single drive option. Leaving the more extensive ultimate edition to do the heavier lifting.

Brian O' Hanlon

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Throw Away

2011-07-23T13:41:00.000-07:00

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Someone commented the other day, about one of Apple corporation's new wares.

A majority of people prefer passive entertainment so the keyboard is superfluous for them.

Apple caters to that market now. Dropping various ports and interfaces makes things simpler for those users with the added benefit of product lock-in for Apple.

Hardware upgrades and battery replacements are easy. Just throw it away, and buy a new one.

I do wish to distinguish between passive entertainment consumers and those in the throw away and replacement category.

I know quite a few people who throw away stuff regularly and buy new. But those people are very active users of the technology.

On the other hand, I know people who throw away stuff regularly, they have never used.

Buying new and throwing away. This calls for a further qualification. The practice of buying new stuff regularly for some, means they get caught for special offers. I could operate a busy enough recycling business, off of the stuff that gets binned, when those folks go buying.

It isn't confined to small devices. It is everything. Microwaves, television screens, printers, washing machines, electric kettles.

They buy things like portable DVD players on special offer today, or waffle makers tomorrow, in order to have something to bring home from a shopping trip. By Saturday evening, the stuff is barely taken out of the box, and it is thrown away again. By Sunday, it starts all over again.

The strange part is, people who engage in such behaviours can hold contempt for the consumer wares they are buying. Every laptop has to have a mug of coffee spilled on it. Every mobile phone seems to be broken within a week. I wonder how these individual people seemed to get so much of the bad luck.

Some of them are end-of-aisle bargain hunters, constantly trying to 'beat the system'. That is more important than the purchase itself.

The goal is not to buy to use. But rather, to buy to decide within 24 hours the item is obviously defective and deserves a place in the rubbish bin. The act of figuring out if you need an item, and then proceeding to use cash to obtain it - has been reversed and disconnected.

This system only works because these people have (A) an inconsiderate appreciate of the value of real capital, and (B) the thrash removal mechanism in their city, is a service that they pay for, and they mean to get their money's worth.

Increased refuse charges (and waste segregation rules), has put a crimp on their consumer buying style. I detect a major amount of annoyance on the part of some, that they can't go out and indiscriminately buy way beyond their needs any longer.

It is a violation of their natural entitlements as consumers.

I understand the value of the concept, that you need to stay current with technology. There are few real advantages when you analyse it, to keeping old equipment running for decades or longer.

But for every circuit board, or nickel battery, or LCD device that I don't throw away, the slack is more than taken up by others. What we have in the entire electronics consumer industry is an un-sustainable model. It is a disgrace in terms of our lack of attention to the life cycle management of our wares.

It was only when I decided to observe in the past decade the behaviour of consumers, I began to realize how much of a disgrace the electronics industry really is.

Everyone has to take a bite of this sandwich.

Brian O' Hanlon

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Cooling Design

2011-07-21T05:31:00.000-07:00

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[ In early draft format only ]

Hard to find fault with this design from a cooling and air flow point of view.

Below you can see someone about the mod an old Apple G5 case with an ATX Intel board. Yeah, it's upside down for those used to Intel systems. CPU is at the bottom rather than the top. Expansion slots at the bottom instead of the the top.

Below is a shot of a single processor Apple G5 system as sold in the earlier 2000s. Without the second CPU in the bottom of the case, there is a lot of vacant area in there.

What we do in ATX boxes is very primitive really when I think about it - because there is very little control of what happens inside the case, when all of that air is in there. You can do your best with lower profile expansion cards, loomed power supply lines and thinner data cables. But at the end of the day that only nibbles around the edges of the problem.

Going to the heart of the problem

The Apple G5 designers went straight to the heart of the problem, and the CPU coolers are not considered in isolation from the rest of the case airflow. The CPU coolers become an integral part of a direct airflow path from the front of the chassis to the rear.

My guess is that everything inside the Apple G5 case, is done with such less fan 'revolutions per minute' aggression (slower, deeper fans in the right positions), that it enabled designers to have two or three very distinct and clear pathways of air flow.

One in the lower portion of the case for two CPUs and all the memory to support those CPUs. Another in the upper half of the case for all of the expansion cards, which is totally separate from the air path below.

I'm not sure if the third, top tier with the hard disks and optical drives is getting that much, or as much air flow as I would be comfortable with.

But there seems to be a fan at one side of the hard drives, and enough open grille area underneath the optical disk drive, to put some air flow through - which makes exactly three distinct, simple air flow paths, front to back in the G5 apple workstation.

The other critical design decision was to avoid that top rear corner chunk, which the power supply occupies in familiar ATX case designs.

The decision to mount the power supply (the weight-iest item in the rig, and its location can lead to good stability or not) in a long, thick zone at the bottom of the case, allowed the designers to maintain three very distinct un-cluttered air flow paths up top.

What the Apple configuration buys you

In a nutshell, no air flow path is getting mixed up with another one. That in turn enables the designer to work with a much lower 'revolutions per minute' fan budget, than they would otherwise have to.

In the case of the Apple G5 workstation it seems, significantly lower.

In ATX case design, the down pressure created on the CPU heatsink by its fan, is getting mixed up with the flow from the disk drive cage at the front to the rear case fan(s).

Secondly, the power supply is always pulling a little off up in its direction too.

Thirdly, if you use side blowers on your graphics card(s), and a top blow hole maybe which I have seen in some 'Sonata' type solutions, then you have air going every which way from Adam.

You would need serious CFD to figure it out, and even then I'm not sure it would show anything comprehensive. Except a design which doesn't really achieve any one clearly defined purpose.

The solution to the problem?

The only thing to do perhaps, is to turn an ATX motherboard upside down inside a mod-ed ATX case.

You would have to do some demolition work inside the case first.

You would physically saw out all of the 5 1/2 inch and 3 1/2 inch metal, and get some window for the back panel to point out where the optical drives used to be.

Then you would switch the front case fan(s) to push air out rather than pull air in.

Having a nice tall copper CPU heatsink with some kind of a side fan arrangement (like those I have seen from Zalman) would assist in achieving the overall design concept.

The CPU heatsink and fans would be at the bottom of the case, rather than at the top.

You would then have air to cool the expansion cards pulling in from what was previously the rear case fan(s).

You would probably mount the power supply somewhere at the bottom of the case, where the expansion cards used to be.

While you would get an optical drive to come out, where the power supply used to be on top.

Would the project work?

Hard to say.

In fairness, I never acquired the metal working skills at a young age, but I can see the spatial layout in my brain.

That isn't surprising given my architectural background I suppose.

I'll do an accurate measured model and visualisation maybe sometime in the next 12 months maybe. I can't make any promises, but around mid winter time time I might decide to try something creative.

Brian O' Hanlon

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French Impressionism, Mobility and MySpace

2011-07-19T11:03:00.000-07:00

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[ Based on a comment originally written to “Film and the Audience of Tomorrow”, at www.zephoria.org/thoughts in June 2007 ]

In his TED conference talk, Chris Anderson asks the question are people being born today before the technology and means of expression suited to them even exists? What if there were Van Goghs or Hitchcocks born in times before oil paints or movie making were invented?

Let me tell you something about oil paints in zinc tubes. That technology is what allowed the impressionist artists in France to become mobile. The painter’s ease of movement suddenly allowed the outdoor phenomenon of light to find its way onto the canvas. You couldn’t paint outside and not consider the properties of light. Think of Renoir’s paint of the frog pond, and of Monet who pained exactly the same scene on the same day.

Cezanne was another character who enjoyed the vast rolling landscape in southern France to pursue his painting hobby. Typically Cezanne would cast away in frustration a canvas that wasn’t working out, into a nearby bush or tree. Only to come back hiking in the same direction 12 months later and finish the canvas and begin working on it again. That man is credited to be the father of Cubism.

Gaugin travelled to the south sea islands to conduct his painting. Gaugin would have all sorts of adventures there. But more importantly, he would bring back the influence of native art to Europe because of those little zinc paint tubes. Van Gogh spent much of his like suffering from depression and living in various parts of Europe as an itinerant.

None of it could have been possible in an earlier age, without the portability of little zinc paint tubes. Using a medium as fast and portable as pastel on paper, Henri Toulouse Lautrec could transport himself into the Follie Berger each night. There he would illustrate for us, the social scene of La Belle Epoque Paris.

Without such level of portability would we really have the imagery of the time captured in such a manner as it was?

What I am talking about, is the opposite to the immobility of the teenagers in their bedroom causing them to decorate their bedroom walls in virtual space. We can study the twentieth century in the same vein of mobility and media expression.

Combat photography was evident as early as the Spanish civil war, the landing in Normandy and in later wars such as Korea. But think of David Bailey and fashion photography in the 1960s. David could go to New York for a weekend shoot and make cover of Vogue magazine using the tiny 35mm negative.

But he never told his bosses, because the perception was that large format was only good enough for Vogue. The only trouble with large format, was it restricted photographers to their studios.

We know of the Vietnam war, the first war to appear on television. But I really want to talk about another event. The kidnapping of Katie Hirst by urban terrorists in San Francisco. Katie and her kidnappers were hiding on campus at Stanford. Eventually a group of the urban terrorist group were surrounded in a house.

The police at this time were not used to live television cameras. Within no time there were camera crews standing in the middle of the battle. There is footage of a smartly dressed young lady reporter standing inches away from the corner of a building where live rounds are bouncing.

A mobile phone is in her hand, as she talks to her editor who urges her to get even closer to the action! As the shoot out unfolds and the police men struggle to restrain reporters who don’t understand they cannot stand in front of bullets, the live footage of this event went across the whole country.

I don’t think Howard Rheingold’s book, Smart Mobs of 2002 attempted to trace the concept of mobility back far enough. The Katie Hirst shoot out was a beginning of what I would term a ‘smart mob’.

It was also the beginning of a new invention called Live television. Like the French Impressionist painters with their zinc tubes of paint, Live television arrived with a similar kind of bang.

It was shocking to folk who considered TV to be a stable kind of media, building on the notion of theatre and stages as such. Just as in the nineteenth century when the great photographers captured portraits of native indians who were completely unaware of the lense, in the Katie Hirst debacle we see cops with assault rifles who are not too savy to the lense either.

The landscape of media has a strange sort of way of shifting underneath your feet.

Consider the comments by 'father of virtual reality', Jaron Lanier about radio versus the telephone inventions. The telephone it was assumed would be an ideal way to transmit over long distances, a sound version of a concert or an opera in another part of the country. As it turned out, as Lanier puts it, Chat, turned out to be the killer app, for the telephone.'

The engineers again got it wrong with the radio, when they assumed that chat would be the most popular use for it. On the contrary, the radio turned out to be the ideal way to transmit over long distances, a sound version of a concert or an opera!

Since then, the camera crews and reporting of live events has become more sophisticated. The policemen are very careful to maintain a perimeter around the scene. The people who are surrounded often use the cameras to their own advantage. Today people worry about the authenticity of what is being presented to them on the tube.

People worry if the information has been doctored to emphasise some particular point. Some people worry if a plane ever hit the world trade centre on 9/11.

These are the people who suspect their toaster of plotting against them. They actually believe their TV set is an evil device put there by a government in order to control their minds. Rather like big tobacco put a cigarette in their fingers, and damned the consequences.

I wonder if we will see a series of court cases against big ‘television’, like the ones we saw against big tobacco? We cannot see into the messed up contents of peoples’ brains in the same way a damaged lung organ can be photographed and mounted as evidence in a court trial. But they will get around that I have no doubt, using psychologists or whatever.

What is really happening with 9/11 and You Tube, is that information is arriving on peoples’ desktops in a way they cannot cope with. I am proposing we find a way to present information, and make it legible to people.

It might help to think about the scale of television and audiences using Peter F. Drucker’s point about the demise of the large department store. I am reading Drucker’s 2002 book, Managing in a New Society. How the department store retailer ended up knowing more and more about less and less. I wonder how much traditional television really knows about it audience today.

To restrict the interface to the LCD monitor on your laptop is not good enough anymore. The debate needs to be broadened, if my goal of presenting information more effectively is to be achieved. I am watching the Matrix movie series a bit of late. There are some wonderful scenes in those movies, which illustrate what I am talking about.

In terms of peoples’ efforts to fight against an assault of information and dis-information. I like Richard Dawkins analogy of how bats can use sound to negotiate space. They might see sound waves in shades of green and red in the way we can see colour.

Richard thinks our brain has found it useful to construct the perception of the hardness of a rock. Because it reminds us that our fingers will not penetrate it.

But if we lived in a world where our hands could penetrate rock, we would not have evolved that perception of hardness. Are computers change our perception of information at some deep level, equivalent to us sticking our fingers through rocks? Are they changing our perception of the hardness or softness of information?

Richard Saul Wurman is interested in the health care system. But he talks about the danger of revealing too much information to people too quickly. Through the wonders of modern technology, people can now learn a lot more about their own bodies. But sometimes the trauma of knowing is too much for people to deal with.

Because we have more and more detailed, accurate information about ourselves and our environment, doesn’t we will attain any higher level of understanding.

I am trying to build my thinking on John Thackara’s notion of design and the displaying of information in a way that makes it visible to citizens. But make the information visible in a way that people feel comfortable with. There is some large, centralised and monolithic about television, because it builds upon older paradigms of information transmission, some of which go back centuries.

Think about the medieval cathedral, which operated very much as a dashboard for the city in its day. The sculptors worked to create story boards which animated the great exterior of these urban landmark projects. Terence Riley of the MOMA in New York does a great lecture on this.

I listened to the Irish sculptor Michael Warren recently at a talk. Michael described the modern day sculpture department in our national art college. Absolutely no chisels, or pieces of stone. Not even plywood and nails. No, just miles and miles of wires and screens!

Today it seems the sculptors are more interested in virtual rather than physical. But although cathedrals are know longer being built, we still use this way to transmit information.

In his TED talk, David Kelley talks about making the mechanism’s of water purification, visible to the city’s dwellers in London. Certainly, clean water is something that approaches religious significance for todays inhabitants of cities. Access to clean water has been declared a human right by the UN.

Doug englebart’s always compared the act of driving a car, on a busy highway to the skill people should acquire in order to navigate information in a computer. I was in Dublin yesterday morning, and someone was driving an ancient 1920s automobile through the city centre.

It looked distinctly like a horse drawn buggie from the nineteenth century. That was the posture of the occupants in the vehicle. To my eyes it looked like a horse buggie, but there was no horse. Just a little engine driving the thing forward. How much of the same problem exists in the way we ‘harness’ computers today?

It should be noted that when cars first appeared, they used them in the same way horses and buggies where employed. That is the only model people had to think about travel and moving about. Before the car, folks went to town in their horse and buggie, with their driver, and the driver and horse and buggie ‘parked’ in a stable in the centre of town, while the good lady or fellow master went to do their business in the town.

When cars first appeared, they built exactly the same kinds of ‘stables’ for well-to-do people to park their cars! Maybe in fifty years time, we will look at My Space like those early stables built for cars.

There is no small amount of irony in that French Architect Auguste Perret (1874–1954), who was the first to use reinforced concrete - one of his earliest commissions was to build a 'stable' for the automobiles in Paris.

Reinforced concrete would go on to dominate as a material, the architecture of the twentieth century.

Italian Renaissance architect Donato Bramante (1444-1514), is considered to be the man responsible for the separation of architecture and the climate, the environment. It is only in the early 21st century that architects are finally trying put them back together again.

Bramante is also considered to be the last Design-Builder in our western history.

That is, he would instruct the crafts persons on the construction project, and manage the finances, whilst also doing the design work. It was no uncommon apparently for Andreo Palladio to ride out on horse back to sites, to organise the men building his villa projects outside Venice.

When Danah Boyd talks about social networking sites being used for advertising and commerce I am reminded of a point made by Peter F. Drucker about railways. In Europe, railways were never used for to haul freight. In Europe we were used to thinking of ships at sea to carry freight. It was off loaded at the dock and transported to its destination by horse.

Even the last great railways that the British built in Asia were only designed to carry passengers. It wasn’t until railways in America were built was the full potential of the iron horse realised. Trains being used to carry goods and extending the reach of commerce deep into the new world.

Commerce, mobility and representation have all been intertwined with one another down through history. This is not new. What is a bit new, is Danah Boyd’s own observation that immobility is driving the latest forms of media expression.

When we consider the nineteenth and twentieth century were all about mobility and visual capturing methodology, I guess it is not surprising to find we are now returning back to slowness and immobility of respresentation.

That movie by Denzil Washington, the Bone Collector was an early clue of where this new technology was taking us. I would like to end with a reference to Warren Bennis’s classic book on leaders. We have the technology today to study our leaders in greater detail than ever before.

Brian O’ Hanlon.

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Cookie Jar

2011-07-16T22:05:00.000-07:00

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Not many people know that with Internet on the mobile phone, cookies are now stored on the servers of the network. The new, smart platforms are different from older ones such as the PC.

Heavens forbid in the old days that people would give you cookies on your local drive. Now someone else gets to keep them. This represents a major new twist in terms of society's relationship to its gadgetry, in my humble opinion. Less stuff is your own in 2011.

I have put a good weeks thought into this, and analysed it from a couple of important angles. I have come to some conclusions, which I will try and share very briefly.

Yochai Benkler's thesis as put down in 'The Wealth of Networks' was that the major portion of the information creation and transmission infrastructure is owned today by the end user. Which is in very stark contrast to the image of the twentieth century information architecture, where all of the ownership and investment was heavily concentrated, to such a degree that sometimes only the state was able to offer the services.

It became quite a fad, I recall, in the last few years here in Ireland, for females to do something that females can do - exchange things. In the past, it might have been clothing. One tries on someone else's for the fun. You'll never see men attempt that. It's just too weird.

So it should have come as little surprise to me, that when the females in my life, took to technology in a big way, that I would sometimes come home to find my kitchen table strewn with opened up Nokia's and Samsung's and Panasonic mobile phones, and the females handing each other SIM cards, chargers, instruction manuals and what not.

Okay, it's all a little too weird for me to take, and I normally reverted to my television and switched on something mind numbingly dumb to watch. But here is the thing about the architecture of phones today. It was okay, when it was just SMS text messaging and telephony traffic on mobile phones.

Now here in Ireland, the big sell is underway to give you Internet on your mobile. The data connection between the new mobiles and your Windows 7 notebook system is also quite aggressive at shaking down your mobile phone, for any miscellaneous 1's and 0's, that it might think it relevant to grab, and show to you via some happy looking 'Sync' software, that tries to be your all time best buddy. All friendly and like.

You also have SIM cards inside USB broadband modems, and devices to share mobile broadband access over five Wifi enabled devices. You can imagine the scene, with folks having tablet devices, smart phones, PDAs, blackberries, netbooks, notebooks and did I say smart phones. Yeah, smart phones.

Smart phones are basically the new computers. No one knows if the desktop 'personal computer' as we knew it, will last another technology cycle, or end up in the dustbin of history as an idea. The trouble with it all is security and data protection.

I've spent the last month or so, doing something which has been very new to me at least. I have been doing more Internet based work, on the move, using a tiny mobile phone screen than I have been doing on my netbook, notebook or desktop Windows (various vintages) systems.

I have found the Internet on my mobile useful in a way that I never did with my netbook even. It goes back a lot to what Jeff Hawkins used to say. When he came up with the Palm Pilot device, he made up a list of things that he always hated passionately about desktop system. He then tried to design a device, which did not have any of the drawbacks of using a desktop computer.

But the problem with the architecture of the mobile phone network, and it's attempt these days to do more of what a 'computer' used to do, is as follows. The mobile phone has an Internet browsing software. It's only less than 200KB to install Opera Mini on the mobile phone's memory. But the thing I keep getting back to, is the group of women sitting around the kitchen table. People are sharing bits of the infrastructure over coffee and cakes. People did not do that in the time of the personal computer.

It wasn't like, here is a hard drive for you, and I'll have that motherboard thanks very much. In the days of Internet on the computer, the cookies from the web browsing activity arrived onto YOUR hard disk drives. You didn't decide to give that hard drive to someone else, next week. You didn't give your hard drive away ever!

In fact, some people take it to such an extent, that they almost boil the hard drive in an acid basin to dissolve it, and make sure it disappears out of existence. With hard drives, it is quite personal and there is always a kind of process in terms of their disposal, the data on them etc, etc.

We used to here a lot in the old days, and still today post financial meltdown here in Ireland, of the police rushing into a stodgy old bank headquarters that has just gone into financial calamity, in order to seize e-mails, servers, hard drives galore. Then they spend many years (at least here in Ireland they do), trying to persaude the bad bankers to give over passwords to unlock encrypted data files.

Anyhow, in terms of mobile phones, the Opera Mini browser requires cookies and various bits to operate and allow you to access your services online, and do various operations. In today's world, the cookies are no longer stored on the hard drive. They are kept under lock and key in the data vaults of the mobile network provider.

But you see, that is the way it has to happen nowadays. It is those people who see fit to share bits of minature technological gadgetry with each other at the kitchen table. One person offers another the use of a phone chassis, in which to mount their own personal SIM and use it for a while, to get the feel of it. Automatically, there is the pesky question of whose cookies are whose.

In all of the plethora of wheeling and dealing done by the ladies and their mobile phone components, everyone forgot to sort out the cookies! Therefore it is left to the mobile phone network provider to try and deal with it.

Never mind attempting to explain to the average smart phone user, what is actually going on, in terms of their own data protection and security. All that folk care about, is that USB sync connection, or bluetooth file transfer, while surfing the web using wifi shared with five other devices.

All people care about, is that the synchronisation software, shoves the relevant, nice and interesting stuff - the personal stuff - in front of your face each time you arrive home and boot up the notebook for a while. All this technology is trying desperately to become your buddy.

But the only truth that remains in 2011, is that mobile phone networks are not as simple as they once were. It is gone beyond the phase of SMS text-ing and telephone customer brackets etc. The intensive mobile smart 'device' user these days is willing and able to pay sixty euros a month flat rates for a hybrid bundle of all sorts of data, text, call and broadband goodies.

It is a veritable hodge-podge of information, connectivity, and personalisation. But the fact is, the envelope in terms of security risk exposure just increased by several orders of magnitude, to the extent where the mobile network operator is now barely managing to keep the lid on the cookie jar - whilst demand for monthly bundles and annual contracts keeps on growing, and growing, and growing.

Brian O' Hanlon

Sub Note: Calendar

I have a Nokia 6303 classic phone and Nokia's original PC Suite installed on a Windows system. It is handy for reading down through old SMS text messages, typing up draft messages and generally keeping things like contacts, and calendar in order.

Here is the thing. On Friday evening, I purchased a similar Nokia, the 6303 classic 'i' version.

The new Nokia 6303ci, can charge itself off of the USB connection cable, which is handy. It also has a keypad, which is less horrific, if you are trying to thumb in a couple of e-mails while on the mobile.

But here is the part, that I have found odd to say the least.

The Nokia 6303 'i' version comes with the Nokia Ovi software. It is similar to the older PC Suite, but with a big huge interface. The older Nokia PC suite, was a really compact little interface, that fitted into a quarter of my Vista notebook's screen. The new Nokia Ovi software, wants the whole screen, and is trying really hard to become my new buddy. I'm not really down with that.

But heck, new experiences etc.

The real nub of of the matter is the older Nokia PC Suite did not have to divert outside of itself to sync or organise the calendar on the phone. The new Nokia Ovi software wants to divert you out to Microsoft Outlook, or Windows Calendar, in order to Sync with the Nokia 6303ci calendar.

Now why would that be?

Okay, before I go off on a new tangent about Microsoft and its attempts to launch into its Window 7 phone platform. For more interesting discussion on that, check out Aceshardware 'The World in 2010' discussion thread here:

http://aceshardware.freeforums.org/the-world-in-2010-t949.html

What I really think is going on, is the Nokia Ovi software thinks that the Nokia calendar information may be a bit too hot to handle by itself. It needs the beef-ier, more brute-ish type cousin called Look-Out. Opps, I meant Out-Look.

(Old, bad Scott McNealy joke, couldn't resist).

The fact is, that in 2010/11, the calendar information is quite sensitive, because we have mobile devices today with memory and connectivity, which find your contacts on a map, and synchronise with your calendar, using GPS no less!

Yeah, I suppose if someone were to blow through my basic Windows Notebook protection, in a wifi location, and go routing around, the calendar dates and appointments may be safer in the Look-Out, I mean, Out Look app, than in Nokia's Ovi.

But that is all just speculation. I mean, at the end of the day, there is a technological and data privacy challenge here that is going to take the very best brains in engineering, two decades to sift through and understand - yet alone begin to speculate a solution for.

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Gambling Irish

2011-06-14T16:32:00.001-07:00

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A commentator at the Irish Economy blog writes,

Thus, what matters, in terms of assessing the degree of speculative logic driving buyers’ decisions, is not the expectations of increases versus the lending rates, but rather the extent to which the capitalisation rate on rental investment is below the mortgage interest.

We should view property at all times as a broad continuum between the polar extremes of rent or buy.

Peter Schiff writes a lot about the housing bubble in California during the mid-2000s. He has a couple of funny expressions, which somehow ring very true with the Irish bubble also.

For instance, he talked about the fact that in California you had to fill out all sorts of paperwork in order to rent a (residential) property. But almost none at all, if you wanted to buy a property (and you didn't even have the money).

Schiff used to say, that if you needed money in California during the bubble years, you simply put your name down to own a residential property, and sold it shortly after.

If you were to investigate almost every small or large town around Ireland, you would find everyone from window cleaners to the local shopkeeper, were engaged in precisely that game.

By virtue of the fact that we viewed the property sector in Ireland, as one huge gambling opportunity, we ended up with many ghost estates, which few people are able to explain today.

Having built the ghost estates upon which we gambled, we now want to build an actual casino in the midlands of Ireland and formalise, give face to, what has been a long established Irish tradition.

The purpose of a ghost estate was not to provide housing or shelter. It was only to provide the speculative window in which the local people flipped assets.

Journalist Neil Callanan used to tell the story of how many de facto business people in Ireland during the bubble, where encouraged by banks such as Anglo to get out of the business they were in, and engage in the property game instead.

So you had (innocent) folk who knew how to run a public house, restaurant or groccery shop, ended up becoming landlords.

If Yale professor, Bob Shiller has said anything useful at all about this crisis, it is that education of basic finance has to become a corner stone, in the future, if western capitalist society as we know, is to have any opportunity at survival at all.

You only have to turn on the national radio show, The Joe Duffy show, today on June 14th 2011, a mere three years after the crash in Ireland to understand that society here has not learned a thing.

On the The Joe Duffy show, today, you could listen in full audio as the 'mattress money' that still exists in Ireland was queueing up, in advance to take a piece of the action in a €450 million project in the wilderness of middle Ireland.

We are on the pig's back again.

I got a stomach full of this under my old employer with the speculative gamble on Greencore shares, and the plans to convert sugar factory sites in places like Mallow, into exclusive developments.

Make no mistake about it, there is enough of loose, highly speculative cash lying about in Ireland in the wait for the next trickster to come along, to make it all burn.

Internationally, I can imagine this phenomenon of the gambling Irish, is quite widely recognised, and that certain kinds of financial houses have already devised neat strategies to remove from our grasp whatever few pennies might still be lying around.

I expect in time, it will fully run it's course, and like a human being on an addiction, we'll have to hit absolute rock bottom, before any common sense is beaten in.

The loss of economic sovereignty in December 2010, was not rock bottom enough.

Brian O' Hanlon

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Right Angle

2011-06-08T15:23:00.000-07:00

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I remember what Alan Kay once said about computer science, and the teaching methods at Stanford university. Stanford computer science has become a vocational education he said. The institution has totally caved in to the vendors (of shrink wrapped products and software).

The idea of a computer science to Alan Kay was a contradiction. There is no science. He would compare computer science to the construction industry, which was able to organise large collections of labour to build the Empire State building in New York in the 1930s.

Alan Kay doubts that software engineers have the ability to organize any project of substantial scale today. The skills and the science that existing in construction a hundred years ago, have not been developed yet in software.

Kay said that Bill Gate's name on the front of a computer science building was one of the greatest oxymorons of all time. Kay believed, that if you had a mathematics graduate first of all, you could hire them as a software programmer.

You could then teach them whatever vocational add-ons they needed in order to do their work. Computing and software, Kay believed all had to tie back to mathematics.

Economist Seamus Coffey wrote at the Irish Economy blog site.

I found the following a little alarming.

“one in five students drop down from higher to ordinary level maths on the morning of the exam.”

When is this decision made? I presume it is not made on the morning of the exam, at least not in most cases. Still, it is a little disconcerting that the decision to take one paper or another is left until so late in a two-year programme.

The fact of the matter is, a few students do manage to pass through that filter by a roundabout means. Namely, a few students develop some understanding of mathematics via one of the two pillars (Algebra and Geometry), by taking the subject of technical drafting.

By learning how to measure, draw properly to scale, understand angles and intersections and use a set square properly - those (male, and a few females), are given a rare opportunity - to include mathematics as part of one's tool kit.

There is terrible resentment aimed at the mathematics subject in Ireland. Teachers in otherwise good-ish secondary schools, hold back resentment of the few foolish young people who do dare to challenge the Gods, and sit the higher Leaving Cert mathematics paper.

It is like: Who does s/he think they are?

Teachers would rather not have to deal with the subject at all.

I have to stress, that even the most gifted students in Ireland are unable to crack mathematics, unless they chance upon a good teacher in technical drafting, in which case they learn through the geometric route. It is not a question of lack of academic ability.

There have been a few times in my lifetime, when I performed some deed, or acted in some manner, for which I was later ashamed of myself. One of those instances, still lodged in my brain was an occasion on which a young lady (a very nice, gentle youngster), was asked to the blackboard during my Inter Cert maths class in 1990.

She was asked by the maths teacher to perform some simple operation in basic geometry using a piece of chalk and a large plastic set square. Draw a line at right angles to an existing line. Something that basic.

Us fellas in the class, thought that was great gas. To watch a young lady try various ways to manipulate the set square implement, without success, in trying to draw a right angle.

Looking back at that incident twenty years later, it may serve as a useful metaphor for Ireland and it's predicament.

All of us fellas (as tech drafting attendees), felt very smug about ourselves then, with our understanding of basic geometry. In 2011, I can safely say, my algebra is atrocious and possibly non-existent. Not to mention what crimes I might commit, if presented with Calculus.

It is coming against me in 2011, as I try to wrap my weary brain around statistics and probability with some basic functions thrown in, and try to execute it using digital tools.

It is all to do with confidence, that a young person develops in themself and in their use of a language (mathematics is simply an international way to communicate, in a modern global economy).

Anything that is broken in education in Ireland, we ignore, and we don’t talk about. Until a multinational ex. boss, decides to pull the plug. Then we ‘jump’ to some extent.

In Ireland, we can ignore a huge elephant in the room for decades, and then suddenly, out of the blue, for no better reason that political expediency, someone magically discovers the problem.

It was Craig Barrett who made mathematics and science education in Ireland a political issue.

But why aren’t we talking to 16/17/18 years old’s today, and asking them what they think?

Nobody asked me twenty years ago, and I could have given them the whole skinny on mathematics and education. No one does today either. That hasn’t changed. We have still got the ear plugs installed.

In a way, I have never left behind one side of mathematics. The geometric side. Being involved in architectural design projects all of my life. But even there, the anti-mathematical or geometric bias reigns very strong.

Much of my geometric tuition in computer aided design, was received from an ex. Intel employee, who was responsible for drafting and setting out of Intel fabrication labs at Leixslip for many years. In fact, in memory serves me, this man who taught me in computer aided design, would share breakfast with Mr. Craig Barrett to discuss project details (zero millimeter tolerance construction design), when Barrett was in Ireland on trips.

Bear in mind, what I have mentioned above about confidence in mathematics, about learning maths through the backdoor of technical drawing training, and about that poor young lady, who lacked the ability to even draw a right angle on the blackboard in 1990.

Those are all critical plot points, on the scatter diagram we are trying to analyse here.

Now fast forward to late 2008, during the time I was one of the senior architectural staff members of a developer here in Ireland.

It was interesting how there was a new paradigm coming in, in computer aided design at that time, which enabled designers to move beyond two dimensions, and beyond the third dimension also, into that of planning, scheduling and logistical/resource & cash flow management of complex construction projects.

It was interesting to me, how the senior architect involved, deemed fit to fire all of the Irish staff, and hire Europeans instead, who it was considered, knew best how to manipulate software within the new paradigm. Not to mention the years of on-the-job experience some of the Irish staff had, they were all (including myself), put out in the cold.

I spoke to a colleague of mine at the time, who worked on the national Childrens’ hospital project (approx. 600 million euro), in terms of the computer aided design, and it was the same story there again.

Rather than invest the confidence in the Irish staff, the senior architects engaged carpetbaggers from somewhere in middle America, who could use the software tools.

That is what occurred in the infamous North Wall Quay headquarters project for the defunct Anglo Irish bank. The concrete shell structure, which has become such a symbolic image in post-boom Ireland of the 2010s.

Our development company, Zoe developments, would send a cheque for a hundred thousand Euro's to a private consultant in Dublin city each month, for design services. They in turn would pocket some of that change, and forward another portion to operators in eastern Europe, who would carry out the actual grunt work of drawing the lines.

We had become so successful at performing that kind of trick in Ireland, by the end of the credit fuelled boom years. We had learned to massage over the fact, that we could not (or did not want to), operate the set square at the blackboard.

The reason why myself, or my colleagues were any good at all, in computer aided design was because we had mathematical brains. What we didn’t have were the employers who had developed enough confidence to allow us to exercise those same brains.

I enjoy buying packets of fresh sweet corn from Morocco, or the odd cucumber from Spain. I understand why trade is so important for the overall wealth creation process to occur. But there must be some tipping point.

You can see that we are retrenching in terms of our confidence in Ireland, while dressing it up as something else, like economic necessity or prudence. You compare the era of Craig Barrett, and my friend who gave me instruction, to today’s case, where we outsource it to the carpetbagger instead.

Brian O' Hanlon

References:

Blog entry, Open Book.

Sub note: Sitting on your school bag

A commentator at the Irish Economy blog site wrote,

You design pre-instruction math ability tests - at entry to 2nd level, to sort out the different sub-cohorts. Its not that A is good and B is not so good. The sub-cohorts are just different and you have to ID who belongs where.

The idea of a maths pre-ability test is interesting, and I would like to offer you my own experience from the year 1990, when I attended secondary school.

I did my Inter Cert that year, in a class of 120 students in a school. As I described above, there were three ordinary level maths classes for the LC program, and one higher level class. Here is the funny thing. We had a crowd of students in the higher level maths class in the year after Inter Cert, which is normally referred to as 'fifth year'.

It is technically the fourth year of the secondary school program. Go figure.

There was such a crowd in the higher level class. None of whom wished to sit the higher level paper. They merely wished to gain better standard of tuition in the higher level class for the two years of the LC program and then sit the ordinary level exam.

I can recall, the teacher asking the crowd assembled in the room, which much have comprised the majority of the 120 students in the year - that anyone who didn't score at least a 'D' grade in the Inter Cert was being asked to leave the class.

I recall that when all of the students had not received at least a 'D' grade in the Inter Cert had left the room, there were still 80 students remaining in one class, out of 120 in the whole year!

Absolutely no one in the class wanted to be thrown back into one of the ordinary level math classes.

I can recall sitting on my school bag, because I didn't have a seat, with my maths textbook balanced on my knee for most of the fifth year of my leaving cert. In the final Leaving Cert year, I finally did get a seat, because some of the 80 had been thrown out.

I also recall, being asked to leave the higher level maths class myself during my fifth year, even though I had scored an 'A' in the higher paper for the Inter Cert.

It was purely political who stayed or who went, in that higher level maths class, and I was an 'A' Inter Cert student being shoved out. Even though there were 'D' students still being allowed in.

But it wasn't a real high level maths class. Only a hybrid-ized version.

In my old school in north Kerry years ago, there were three ordinary level classes and one higher level. In the final Leaving Cert year, the higher level class split into two. One half doing higher and the other doing ordinary level maths. But both groups stayed in the same classroom with the same teacher. The teacher would teach half of the class ordinary maths, and the other half higher level maths.

The concept of a higher level maths class in a school was a misnomer.

Because all the kids want to get into those classes after Junior cert. Not in order to sit the higher maths exam at the end of the day. But rather, because the teacher in the higher level maths class, teaches to a much higher standard for the two years.

And then, the smart people simply ratchet back down to ordinary level, a few weeks (or days) away from the exam date. It is a smart play when you think about it.

But it ends up drawing away too many resources away from the de facto, higher level candidates. And as I say, by that late stage, the ordinary level students are left sitting where they are, and generally consume vital teaching resources in the final months prior to the exam period, as the higher level class becomes hybrid-ized downward.

The potential engineering candidate student gets caught in a vice grip, of decreasing availability of time, and teaching resources, when they most need both.

There were only three students remaining, who wanted to do engineering, by the end of the second LC year. And those three students took out their grind homework and ignored the teacher for most of the final LC year.

I believe, that without students who wanted to do Engineering after secondary, the subject that is higher maths would have died off, about three decades ago. In fairness, it is like lobbying in politics.

The smaller lobbies generally have an uphill battle to maintain adequate resources and standards.

I believe I was the only student in the 120 kids in that year at my school, who didn't do a maths grind, hung in there in the faux higher level maths class, and still managed to scrap an honour by managing to muddle through an Algebra question in the final exam.

The maths program in my school was entirely broken.

The ratio was 120 to 1, against you. I assume my experience was repeated again and again, all over Ireland.

I somehow managed to beat those odds, despite having only half a course done, and sitting on my school bag for a whole year. These are the kinds of stories I could have told Craig Barrett about Ireland, twenty years ago.

Politicians in Ireland talk about having discovered the problem in the 2010s. That's a laugh!

Sub note: Jerusalem

I suppose in writing in the above, it has made me realize something, that I don't think I had consciously understood before now.

You are present in a higher mathematics classroom the year after Junior Cert. A room that is designed to carry maybe forty students. There are 120 students in the year, in the school. There is excess demand, not for the higher mathematics subject, but for basic good tuition mathematics itself.

The market for mathematics tuition in that school, had decided en masse, that the ordinary level mathematics classrooms (of which there were three, kitted out with teachers), were not the place to be.

No one who designs education policy, or looks at statistics on student performance in a subject, could have predicted that a classroom would be too full of students who DO NOT WANT TO DO A SUBJECT.

At least, it does seem counter-intuitive to me.

It has to with the fact, that first year in many college courses becomes quite difficult unless you have gone through the paces of a higher maths syllabus in secondary.

On the other hand, from a points race view of things, sitting the higher maths paper, simply doesn't add up.

What happens to the handful of potential mathematical nerds in the classroom I described, is that they are crowded out of their own territory by masses of non-nerds.

If the medical system in Ireland is supposed to be Angola. Then what is the mathematics education system? Jerusalem?

A piece of ground that religions, majority and minority fight for possession over. But no one has the ability to acquire outright. The fact is, no one has access to quality mathematics education in Ireland. Too many religions want that piece of rock.

Sub note: NTMA

It should be noted, actually, that the reason the National Treasury Management Agency, in Ireland was proposed as a solution, has a lot to do with the crowd struggle over possession for mathematics education I described above.

It was a sad reality, that the private financial institutions in Ireland operated like gorillas for a long time. That is, have the Irish state invest the resources and time in training the financial experts that could control Ireland's finances in that department.

But as soon as the Irish state had invested it's money, the private financial institutions were more than capable of robbing the same valuable human resources from the department of finance. So you see, you find this same kind of problem, at every level in the Irish economy and in society.

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Open Book

2011-06-08T15:16:00.001-07:00

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A commentator at the Irish Economy blog wrote,

If we want to examine understanding and ability to apply, rather than memory, why not make it (Leaving Cert Mathematics) an open book exam?

In the past year, I have witnessed in my own experience the changed nature of third level education for undergraduates, where the lecture notes are uploaded to a system online, where students can access it through their student login.

What tends to happen, when assignment work is un-coordinated, and over-assigned (seven subjects in the course I attended last term), is that students stop going to the physical lecture, and instead adopt a strategy, based on the fact that they know the lecture notes are available to them.

Rather than attend a physical lecture - they divert time instead to completing assignments, and simply, memory cram the lectures notes available online before exams.

It has the effect that the major component of capital investment in the third level education system - the professor and the lecture space - to which the class is allocated a time slot each week of term, becomes sort of redundant, with the professor addressing an empty room.

It is ironic. The consequence of allocating more PROJECT-BASED assignment work to student(s), was an increase in the use of memory-based techniques. The last-minute information cramming by student (non-) attendees!

The teaching staff should try to appreciate the situation as a manifestation of complex demand-supply systems behaviour, involving numerous free-willed agents, who are trying to optimise given the parameters. Instead, they stick their heads in the sand, or bellow at the empty chairs in front of them.

I know, it is not exactly like an ‘open book’ exam, but it is an open lecture notes course, using new web technology. As more lectures are distributed via podcast, webcast and so on, it becomes even still more problematic.

I can imagine a time, when students enter an exam with a video iPhone, and engage in some pathetic attempt to scroll down through available webcasts, in search of answers!

Open iPhone exam. You heard it here first.

I do use iTunes a lot at the moment, in conjunction with a couple of well presented collections of webcasts from the north American universities (Ibser from Berkeley who uses about ten roll up blackboards, and is covered in chalk dust by the end of each session is good on statistics).

I also use Tim Joyce's webcast from Engineers Ireland a bit. It is an augmentation of what is in the printed books, and it sort of animates it, when a guy is getting really animated in front of a blackboard.

That seems to be a dying art within colleges here in Ireland, with many reliant on sequential PowerPoint slideshows and overheads. Stephen Kinsella has offered some thought provoking observations on that, in his 'Sans Slideware' blog entries.

They use a thing called a document camera at Berkeley too, which works quite well. Mr. Ibser is able to demonstrate playing of hands in blackjack using the document camera to the budding young statisticians.

Give me John Geanakoplos or Bob Shiller any day of the week, with a piece of chalk and a couple of roll-up blackboards, and that is all you need.

Nicholas Carr offers some pithy remarks, as usual at his Roughtype blog.

I want to add one observation on the social class dynamic point, to add to what I said earlier. After introducing project work into the curriculum at my course, the next step they were asked to embark upon, was to expose the students to the group project working experience.

I realised through my participation in that group project work, that things became yet more ironic. Students were worried that fellow group members would cause them to fail the group project, so students became hostile towards each other within the group.

Finally, I noticed over the ten week duration of the group project, that group members exercise mild intimidation outside classrooms and such, if you attended, rather than spend the time ensuring that all of the work was done for the group project.

I got the staff involved in the loop, to become aware of this behaviour. But what ensued afterwards, I suppose, was predictable. There was one staff member in charge of the group, another in charge of the biggest part of the group project. Another in charge of the year. Another in charge of the course and its direction.

Before you received any response on anything, all of those people (working to very different schedules), had to consult with each other, and return with the expected response - no, we don't accept there is a problem of internal group intimidation.

Like I said, empty chairs and bellowing voices.

It is interesting, that in introducing more and more project-based work, and group interaction, the net result is to encourage more of the student population to stop attending. And then the thing to do, is to pretend there is no problem.

Brian O' Hanlon

References:

Blog entry, Right Angle.

Blog entry, Top Student.

Blog entry, Honey Bees.

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Connected to the Power

2011-05-10T14:39:00.001-07:00

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Regarding credit flow understanding and problem fixing.

My suggestion would be, there needs to be amalgamation of local authorities in Ireland, into regional districts, with plans for credit application tied to positive and well structured medium term employment and local economic growth plans. If we do not begin to foster some of these skills at local government very soon in Ireland we will never be able to break out of the cycle we saw in the Celtic Tiger.

I think that Ireland created the likes of the builders during the boom period, because there was such little competition for credit applications coming from our regional government levels. Regional government bodies aught to be required to borrow directly, as opposed to being delivered funds from the national levels of government, through some quango or daft kind of distribution policy or scheme.

The national level government in Ireland sourced much of its funding from the private sector of the economy, who obtained the same to bet on the property market.

The national-to-regional government credit distribution system is very expensive, and as far as I can see, the regional levels of government don’t seem to appreciate where the credit comes from.

No more than the Irish borrowers in property did, in the private sector. In fact, in many instances where there was a public private partnership vehicle created between the two, it turned out to be a disaster, because neither side were up to the task.

The national-to-regional government credit distribution system has the unfortunate side effect of creating dangerous cycles in land values.

Glass monoliths

The impulse of some local authorities was to erect glass monoliths all across the country to signify their own perceived importance. There is one such building beside me, which costs the local authority €80k per annum to get its fantastic structural glazing feature cleaned by mountaineering specialists.

Like they say, it is good work if you can get it.

There is no framework for doing post occupancy evaluation, especially in organisations who are building out the same infrastructure again and again. Take third level campuses as an example.

There are 17 institutes of technology around our small country, each one, a mirror image of the other, for all intents and purposes. We have nine university campuses I think. But there is not framework for sharing of ideas between them, in terms of solutions that work or don’t work.

You can look at the same in our hospital infrastructure.

I visited a new part of a hospital recently, where the food intake/outgoing pathways crossed, and therefore half of the new building was un-usable for fear of cross contamination of waste and food.

Again, absolutely no framework for post occupancy evaluation.

And these kinds of projects, remain in use for generations un-changed, so it is a huge problem which could be avoided. Now, it is very difficult for such bodies, to find their own credit supply lines, unless they begin to take their economic responsibilities and investment management and planning seriously.

It has been argued that no Irish government department developed skills in financial management, because it was always assumed, the department of finance took care of it.

It is interesting to note, that under our new public procurement system introduced by the department of finance, the trend seems to be to remove even further financial responsibility from departments and concentrate it even more in one location.

It should also be noted, that the department of finance took over the public procurement administration during a period in Irish history in the 2000s, when the private financial institutions were running amok.

I would argue strenuously in Ireland, that we need to re-look at de-centralisation of financial management back down to department(s), but also back down to region(s). I believe that to be the best route to restoring our reputation in sovereign debt markets. Once we do that, that situation will ease for the private debt markets, vis-a-vis Ireland.

Anything we do in Ireland in terms of credit policy, development policy, employment policy depends on the reputation of government branches, not at national level, but at this granular level I believe.

That is, our ability to gain capital, make efficient use of it, and track the expenditures.

This in my view, is how to work intelligently within any kind of credit distribution system.

It is unfortunate though, during the Celtic Tiger, we ended up with the version of the credit delivery system that we did. I would argue, it was not a credit delivery system at all. But rather a primitive way to do off-balance sheet creations, for the purposes of moving assets off of principal banks’ accounting books.

We gave our off-balance sheet creations arms and legs, we lauded them as risk takers, we included them in our 'rich lists', and gave them cuddly names like 'The Dunne-r.'

Brian O' Hanlon

Sub note: Many contributions

You have folk who are expert in engine power, transmission systems, electrical systems, control systems, suspension systems, steering, braking etc.

Most of my contribution above, stems out of an interest in the distribution of power, as opposed to the creation of it.

I have been listening to voices such as Constantin Gurdgiev for a number of years, now. If you want ‘the power’, you need to go to Gurdgiev’s stall. He understands the capabilities of a 2.0 million approx. working/tax paying population on an island, and has modeled what is possible, in terms of turbo-boosting that engine, and extracting every last drop of performance from it.

But it appears to me, that Gurdgiev’s fascination or concentration is not with the other parts of the system.

It is not much use in producing the power in the raw state unless one can also see, how the distribution aught to function.

The ideal thing from an Irish economic point of view, would be to have a number of stalls from which one can gain the ideas/services one requires to build the ultimate vehicles, fit for the road, in the 2010’s, 2020’s, 2030’s etc.

The observation I have made is that trade unions in Ireland appear to be particularly focussed on the public service as being some kind of engine for the rest of the economy. That point may still hold, and may even find some relationship with the point advanced by Gurdgiev. But my instinct is, that neither party have moved further down the line, away from the engine block and towards other parts of the system.

A form of Land taxation is what is required in Ireland badly to smooth over some of the bumps and hollows in our cycle. I believe that Morgan Kelly instinctively looks at things from the point of view of fuel injection (and creation and sustainable management of debt levels), and the timing at which the same occurs. It is a huge part of the whole problem.

It would be interesting though if a fully trained economist were to take the analogy of the automobile and the economy a little further. Steering being the regulation, braking being the monetary controls etc, etc. Employment is really all about passenger comfort at the end of the day. Can this vehicle carry around the occupant(s) in comfort and safety.

It would be nice some day, if someone could put together a comprehensive paper to look at the finished product, with all of the system carefully integrated like a Toyota corolla. It could inform our debate about political intervention in the Irish economy, and the consequences of getting it wrong.

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The Wall

2011-04-27T06:12:00.000-07:00

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[ Update on blog statistics: This blog entry was originally posted on April 7th 2010, but i decided to re-post it with a different name, in the home it will stop generating so many hits because of it's original name, Berlin Wall. For so reason that 'search term' appears to attract a lot of internet traffic, in comparison to all other blog entries, and makes the statistics for this blog site, appear imbalanced. Note, by far and away the highest traffic to a blog site such as this one appears to come from Twitter accounts. When a blog entry goes onto the Twitter links, there are huge traffic spikes generated, which are about three times larger than the next largest traffic spikes, and fifty times larger than general internet traffic to a blog such as this one.]

An old Irish expression says,

“You’ll never have in your pocket only what you earn yourself after a day’s work”.

On that subject of a day's work. I guess if you look at communism, they had zero unemployment. I found George Lee's documentary series on the Berlin Wall quite good.

Recall for instance the young lady whose parents could not compete with the price and quality of flowers being imported from the Netherlands after the wall came down. That is in a situation where the product the people were producing was needed in the market, they could not compete with the Netherlands.

Imagine for instance, in Poland it was the only country the USA could buy vacuum tubes for their ancient air traffic control systems up until the 1980s. It was not economical to produce vacuum tubes anywhere else in the world except in Poland.

I commented to Michael Hennigan and company on the Irish Economy blog site about a paper produced for antitrust institute in the USA, by Albert A. Foer. Here is one quote from it.

Such a system has long had a name: administered pricing.

And it has implications, as the fallen socialist economies crushingly demonstrated, for generating the right products and services in the right quantities in the right places at the right time.

But these implications of the departure from market pricing are not mentioned.

If you think about it, all of the large builders and banks in Ireland during the Celtic Tiger were strongly integrated, like the 'keystone' strategy described in Iansiti and Levien's book The Keystone Advantage. However, take a look at Simon Kelly's article from the Sunday Tribune on April 4th 2010, Thank you, Anglo, for being there for business.

What Kelly's article reveals is how Anglo did play a crucial part in Ireland's economic regeneration during the Celtic Tiger - the Ireland of Lemass, as George Lee would say. That is, if one waited for a multinational company to land on the shores of Ireland, there wouldn't be the time to build the factory or office building. In other words, it made sense to build square footage of office space speculatively, to prempt the process as it were.

Of course, the bankers worked hand-in-hand with developers, as part of a whole ecosystem, to use the leased square footage of office space to create collateral for further borrowing. This model worked as long as Ireland needed to build more factories and office space, financed by Anglo, as outlines in Kelly's Sunday Tribune article. And if Ireland didn't have that builder-politician-banker process set up, many multinationals might have moved on.

But of course, if you bear in mind Albert A. Foer's comment in the antitrust paper, what we set up in Ireland was state authorised production of something, and we ended up with excess inventories very, very quickly. Frighteningly quickly.

And as other commentators have suggested, John Fitzgerald in Sunday Tribune October 4th 2009, Shock therapy needed sooner rather than later to spur recovery, for instance, the industry set up by Anglo actually drew labour away from other parts of the economy.

I think some intelligent economist should analyse the Celtic Tiger experience, with Anglo and all of the multinational companies in Ireland, as a kind of exercise in central planning - 10, 20 years after the collapse of the Berlin wall. What we have in Ireland today, is another kind of collapse of the Berlin Wall. Bearing in mind, many multinationals might have been drawn to Ireland as a result of the enlarged access to trading with the eastern block countries.

Brian O' Hanlon

References:

Albert A. Foer, Antitrust Institute paper, Do the “New Dynamics of Business Ecosystems” Spell the End of Antitrust?

Video Links

Fintan O'Toole talking about the model of the Celtic Tiger.

I listened to the podcast Michael Spence on Growth. He talks about the Washington consensus, which had many of the ingredients right – but the trick is to execute in such as order, as to make adjustments politically feasable to do.

What Fintan O’Toole describes in his 20 minute talk about Ireland and the Celtic Tiger boom, is not very far away from what Michael Spence was talking about.

Sub note: About Albert A. Foer

Albert A. ("Bert") Foer is founder and President of the American Antitrust Institute. His career has included private law practice in Washington, DC (Hogan & Hartson, Jackson & Campbell); the Federal Senior Executive Service (as Assistant Director and Acting Deputy Director of the Federal Trade Commission's Bureau of Competition); CEO of a mid-sized chain of retail jewelry stores for twelve years; trade association and non-profit leadership; and teaching antitrust to undergraduate and graduate business school students. Foer has published numerous articles, book chapters, and reviews relating to competition policy. He is a graduate of the University of Chicago Law School, with an A.B. (magna cum laude) from Brandeis University, and an M.A. in political science from Washington University.

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Sunk in the harbour

2011-04-26T15:14:00.000-07:00

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[ Preliminary draft ]

I remember in 2009/10, no less than three former employers of mine, went clean out of business. I mean clean out of business. Murray O’Laoire architects, Zoe developments and Dell computers in Limerick.

Many other companies, familiar names, I knew from my daily work were being bombed around me too. Being in Ireland during that time, was like being in Pearl Harbour when the Japanese roared in.

All that anyone could do, was dive for cover.

Not only that, but I had known quite a few people who had worked for those companies, and went on to work at additional employers again, who went out of business since. It appears as though, many of the companies I am familiar with had quite brittle models to work with.

I think it was the boom, which was the problem.

As the boom continued in Ireland, many businesses which may have been better off closing shop, kept hanging on. Some of them, were even bought up by ‘invaders’ from the UK, who wanted to buy out native Irish companies and form them into new super-conglomorates.

There was a lot of conglomoration happening during the boom in Ireland, and each time, many workers found themselves being promoted to directorships in larger entities, made up of smaller parts in which they had started.

The transition from 20-40 employee companies, to conglomorate companies composing 200-400 employees, was often poorly managed.

Often, the employees of the original units, where all the value was, departed from the scene.

You had the opposite of Eircom.

Instead of a large company being bought on the open market, and shell out – you can conglomorates of small Irish companies being made up by the foreign invaders – and expanded to enormous size, but at the same time, losing the talent contained within the original units.

I think of an analogy such as concentrated orange juice. During the credit bubble in Ireland, our companies and our economy became a victim of its own success. The original, small, tightly knit units became the concentrate admixture to much larger volumes of watered down product, which was sold in bottles at inflated prices to the market.

The value became too watered down. The scales were all wrong. In the end there was really no product to sell.

This happened in the case of all three companies I mentioned at the start, in my opinion.

Also, in my opinion, the really valuable human resources from all of the above, have been left now without a life raft to jump on to, and hence they are at a lose end. They were the kinds of people that were very valuable to companies, but were not people who were about to make their own company.

This could all have been managed better. But the problem was the boom. The boom resulted in a temporary situation, whereby companies expanded at a rapid rate to meet with demand, and good workers got promoted to directorships – and then the bottom fell out of everything.

Their raft got punctured, and they all found themselves in the water all of a sudden. It was a really shocking sequence of events. But I am sure that leaders in industry, should have seen the risk, and there should have been new, smaller vessels created during the boom, with radically different markets than the domestic one, so than many of the best workers could have been transferred when the time was right.

Instead many of the leaders in industry, simply got out of the game, and there was nothing in the harbour left that would float at all. In fact, the analogy of a Pearl Harbour type of scene would be very appropriate.

Ireland should never have left it's whole fleet in the harbour.

Brian O' Hanlon

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Conference 2008

2011-04-24T09:26:00.000-07:00

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From a more innocent time?

October 17th 2008 to be precise.

Notice the fish jumping from the small bowl, into a larger bowl.

The best part about the conference brochure, is that in late October 2008 in Dublin, listening to David Drumm speak about banking and property, counted towards 'six hours of continuous professional development' at the Society of Chartered Surveyors.

I suppose in mid 2011, the symbolism of the fish has changed somewhat?

Maybe it is Drumm and company jumping from Ireland into north America?

Will we need more than a turbo-boosted goldfish to see us through our current predicament?

Brian O' Hanlon

Society of Chartered Surveyors Conference 2008

Dublin, Ireland, 17 October 2008

Special Report of SCS in the Irish Times.

FIG President Stig Enemark attended the Annual Conference of the Society of Chartered Surveyors, Dublin, Ireland, 17 October, 2008, entitled Ireland´s Future in a Global Economy.

The one-day conference included welcome address from SCS President Sean McCormack and six key presentations addressing the conference theme:

David Drumm, talking about banking and property at home and abroad;

Prof. John Fitzgerald, addressing Ireland´s economic performance on the world Stage;

Tom Costello discussing the forecast for Irish construction;

John Bruder discussing Ireland in a global economy from a developer's perspective;

David Strahan, looking at the global oil crisis and the life after oil;

and FIG President Stig Enemark talking about property development and the role of the global surveying profession.

References.

Blog entry, Pack Horse.

Blog entry, Rodeo.

Blog entry, Docklands Disgrace.

Blog entry, North Wall Quay Time Line.

July 9th 2010, Simon Carswell writes in the Irish Times newspaper.

Minutes of a crucial Anglo board meeting on December 18th, 2008, show the close involvement of the department and its legal advisers in controversies arising at Anglo that led to the nationalisation of the bank four weeks later.

At this meeting, chairman Seán FitzPatrick and chief executive David Drumm tendered their resignations after Mr FitzPatrick admitted he had hidden multimillion euro loans at the bank using loans from Irish Nationwide.

[ break ]

Before the Anglo board meeting of December 18th, the department was told that Mr FitzPatrick was considering resignation but that the board would meet later that day to consider the issue.

[ break ]

Donal O’Connor was then appointed chairman, a move that had the support of the department officials, the meeting was told.

[ break ]

The department was in particular interested in how the bank intended to disclose “a cash payment in lieu of pension benefit for David Drumm”, the minutes state.

New Phone

2011-04-23T09:10:00.000-07:00

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It seems as though consumer credit in a very general sense, was like a new found commodity within the Irish republic, as of the early 2000s. We seemed to consume credit like we consume bread, electricity and transportation fuels.

Anglo Irish bank seemed to be the main distribution system for that new kind commodity in the 2000s.

Perhaps so many people took the bet on Anglo, because they believed they were buying into the new version of a supermarket or something. A supermarket for a brand new consumable, without which the Irish population could not function in the 2000s.

I would use the analogy of mobile phones, and how the Irish population, having gotten used to that new technology, wondered, how did we ever cope without this?

Except mobile phone technology didn’t bite us back, the way that Anglo’s product did.

In fact, there were a lot more health warnings about mobile phones in the early days, than there ever was about Anglo’s wares.

Too much of the analysis (and it is considerable in volume now), of Anglo Irish bank, appears to be about its demise. But not nearly enough accredited research has gone into Anlgo’s emergence as a force.

Like all disruptive innovations, Anglo Irish and its product seems to have evaded the radars of the incumbent Irish banks, through much of its emergent phase. What I am saying is that the period of the 2000s was one, in which so many technologies and innovations which didn’t exist before, became embedded and absorbed into Irish society and Irish lifestyle.

That is why Anglo Irish bank did not scream trouble as it grew up. But someone aught study this properly, and not necessarily Irish researchers either.

Brian O' Hanlon

References.

True Economics, Gurdgiev, Lucey, Mac an Bhaird and Roche-Kelly.

Sub note: Academic Paper

At least a whole generation of Irish professionals and business men and women had grown up inside the new Irish economy, before the same began to move its focus onto easy borrowings and leverage, as opposed to that which it came up with - hard work and committed/sustained performance.

This is what attracted me most of all, to the graph of the three Irish bank stock prices over a ten year period. (See link to Constantin Gurdgiev's blog entry above)

My question is, how did such a behemoth as Anglo emerge, from the early part of the boom, where much of the growth had been sustained as opposed to disruptive?

Anglo appears to have been a disruptive business model, which at some stage sucked much of the market share out of the grasp of the existing incumbents.

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The News

2011-04-23T06:56:00.000-07:00

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I believe, one of the bodies who can be most accused of group think both during the bubble era, and in the post-bubble era, are the journalists in Ireland. But that is not really the journalists fault.

It is the institutions in which we teach the journalists, both educational institutions and the media organisations. Many of the ordinary folk of Ireland, who are looking for their voice, simply adopt what they read in print in newspapers.

Ireland is a country that is very influenced still by the printed media, moreso than in other countries.

I do not believe that television or radio media has had a deep impact in Ireland. It may be because of our pub culture. But whatever gets printed in our newspapers, gets re-cycled into pub conservation, and most other conversation within hours.

I am not convinced that it supposed to work that way.

Rather than our newspapers prescribing what the Irish people should say to one another, maybe the newspapers and journalist community should offer possible starting points from which real debate and conversation might begin.

But in my experience in living in Ireland, the newspaper view seems to represent more the end of the conversation, instead of a beginning.

Politicians on the other hand, have simply adapted their language and their message to this unhealthy newspaper-public population relationship. Even the dissenting voices such as economist Brian Lucey, have described themselves as using the newsprint media to speak to their own elected government.

This should worry us all.

Not from the point of view of restriction of access to government, but also that dissenting voices such as Lucey, have this unhealthy relationship to the newspaper media.

There is too much voice in Ireland given to journalists.

Not enough to ordinary people. For instance, how many TV crews or journalists were in secondary schools in 2011, interviewing the young teenagers, asking them their opinion, on the taxes their are saddled with for the next few decades?

Theirs (the teenagers), is a voice we have not heard, amongst all of the clatter from print journalists of every shade and persausion.

Now more than ever, is a time in Ireland, in which we should consider givinng young people the vote, and encouraging those in the 18 year old bracket to exercise their right.

Brian O' Hanlon

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Pack Horse

2011-04-21T03:51:00.000-07:00

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Tyler Cowen writes in today's New York Times newspaper,

If enough depositors fear frozen accounts, the banks will be emptied out, and they also will require additional government bailouts, on top of the bailouts for the bad real estate loans. The banks come to resemble empty shells, conduits for public aid but shrinking and unprofitable as businesses — and, to a large extent, that is already the case in Ireland.

I listened to Ivan Yates on radio this morning speak about Eircom company after privatisation, and he compared it's situation to that of Manchester United, when it was purchased by a family a while back.

How those institutions become shell-ed out by their new owners, loaded up with huge debt levels they never had in the past.

I would also argue, that a proper explanation of the 30 largest property developers now in NAMA, requires this kind of analysis. Effectively the Irish banks were using the largest property developers, like their own personal Eircoms.

The Build-er(s) were vehicles, or pack horses upon which the Irish banks loaded mountains and mountains of debt. To levels beyond which a property developer would need to trade successfully. The pack horses believed, or were convinced by the banking institutions, that they would only have to carry their burden a certain distance, and that the banks had a plan for what to do, further down the track.

The pack horses like innocent beasts, said okay!

There is a very big aspect like that, to the Sean Quinn, Anglo Irish bank relationship. The bank recognised a fellow was in trouble, and used him as a vehicle to expand the asset side of their balance sheet. What happened with the property developers is the opposite to what has happened with Eircom.

In the case of Eircom, the privatisation was done and that was the end of things. Nothing came back to the taxpayer except a communications infrastructure that was below standard. We have been managing with that, and trying to build a smart economy, on top of inferiority.

But with the property developers, they were shelled out first, and then the nationalisation of their debt was undertaken by the Irish political establishment.

Ivan Yates went on to point out this morning on radio, that at the height of the speculative property boom in Ireland, a total of €3 billion euro of property changed hands. Yet NAMA somehow expects to off load a total of €8 billion in the next two years, according to its business plan.

The fact is, that in order to create €3 billions worth of property transactions in Ireland in 2006, all kinds of artificial incentives and market manipulations were introduced, to support activity.

Much of the media conversation, and political conversation by ministers for finance in Ireland focusses heavily on the idea of excessive lending by Irish banks.

The finance ministers do not seem to understand, it is not enough to give the guy the finance to make the sausage. You have to guarantee the guy a market for the sausage also. In the creation and support of the said market, the greatest damage was done.

Former minister for finance, Brian Cowen was under enormous pressure from Anglo Irish bank to establish the legislation, that would allow Anglo to sell securities of commercial property on the London market.

Anglo were anxious that so many of their sausages were approaching the sell-by date.

Brian O' Hanlon

References.

Blog entry, Conference 2008.

Blog entry, North Wall Quay Time Line.

Blog entry, Push and Pull.

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Charlton's Army

2011-04-20T03:17:00.001-07:00

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Economist Kevin O'Rourke writes,

And can we not also agree that the people who could have participated, but chose not to, because they could see that there was a housing bubble, are also not to blame for the speculative frenzy?

I would compare it to the Jackie Charlton days in soccer, when the real Ireland soccer supporters, who had held with their team through the lean years, were put out of the running for tickets and matches etc, because of the sudden influx of Johnny-come-lately's.

There is nothing worse and more herd-like, than a bunch of Johnny come lately's, who jump on the bandwagon for the victory lap. To the extent where the wagon itself, is in danger of grinding to a halt, before the victory lap is half done.

Everyone wants a taste of victory, even if it is bought so cheaply. On the other hand, one has to balance this, with cautionary behaviour to avoid elitism.

The victory wagon cannot be a place for elitism. Chequebooks, credit cards and all forms of reliable credit are accepted on the victory wagon. The taste of victory gets a little more expensive, and then a lot more. After a while, the victory is forgotten. It is all about the credit card.

Queue the entrance of lenders who want to facilitate supporters to pursue the dream.

Like the soccer supporter who witnessed the coming of the Charlton era, I was in an ideal position to observe it happening in Irish property. I had struggled to be involved in the construction and planning industry in Ireland, before it was the sexy thing to do.

Before the herd had arrived.

My earliest memories of construction and planning in Ireland, were of the herd running in the opposite direction. I could work with that baseline to form an opinion.

As the boom in Ireland continued (Bertie said, got boom-ier), I found myself like the endangered species at Landsdowne road. The real supporter. A lonely figure on the terraces.

I was surrounded by folk who were experts. They were invested in the future of Irish property and speculation. They had waded in all of the ways. I had no idea where this crowd had suddenly come from. I found it a bit weird.

I had received a professional training in the art of playing the game. But it was dangerous to give air to any of my considered views. The crowd needed to hear we would we win by a cricket margin. It was a question of, how many would go in the net.

My experience of following the team showed that it was about ups and downs. But that knowledge held no value in such a crowd.

The road was one way.

Now the terrace is draughty, cold and isolating. I find myself huddled up there, keeping the attendance from dropping to zero. There are still a few Johnny come lately's around, who have ideas and schemes.

Hopes and dreams of future greatness. They seem like a reasonable bunch, and I think I a like them. They still don't put much stock in my words of guidance.

They have their own ideas, and that is not too bad either.

I do enjoy having the odd bit of friction with them. I am glad though the noisy rabble have evacuated. I am sure they will be back in their own time. Their loud horns and whistles blowing as loudly as ever before.

Things are cyclical. There will always be another big match day.

Brian O' Hanlon

Sub note: Concentration Camp

A commentator on Peter Nyberg's report on the Irish banking collapse writes,

How can economists explain to the public that asset price inflation does not make (most) people rich? Where are the economic models taught in undergraduate classes that show the role of asset prices?

That is the key problem. If you ever have a chance to watch Spielberg's documentary series, Band of Brothers, there is a disturbing scene where the elite first airborne unit discover a camp inside of German territory, and they don't understand what it is for, what it is doing there beside a very pleasant and prosperous village.

What was even more disturbing in the episode was how the medical experts on hand had to prevent the troops from handing out any more food to these poor misfortunes, and had to close them back into the enclosure.

Apparently, more damage can be done by eating too quickly. The stomachs aren't ready to take it, and the poor souls have lost the understanding of how to stop eating. I was thinking about this scene quite a bit today for some reason, and about the Nyberg report. We can have enormous fun and games with the herd analogy that Peter Nyberg used in his report to describe the inhabitants on the island of Ireland.

But there is a more serious side to it.

Having scribbled by short piece earlier today about Charlton's Army, in which I used the analogy of the World Cup successes and soccer supporters to have fun with the herd idea, it made me think about the recent boom and bust in Ireland, on a larger time scale. At first, I thought it would make sense to blame the European banks who were sort of like the First Airborne unit who 'discovered' Ireland and its inhabitants in the early 2000s.

But then I decided that didn't work either, in helping my analysis. It made a lot more sense to look at it in a wider global view, as Alan Greenspan or others may have done in 2008 in their writings. Which mention the existence of some much capital from the former socialist regimes in the financial system globally.

In effect, it was that global phenomenon of so many millions joining the world market, and Ireland's exposure to the same, as such an open economy, that enabled us to eat more than our bellies were able to take.

Sub note: Altitude sickness

A commentator on lending practices writes,

The problem wasn’t how many people borrowed, the problem was the level they borrowed at due to price increases which led to further price increases in a continual cycle.

I think that is a very fair point to make. I watched a Ray Mears survival documentary on mountain climbing and altitude sickness, Pulmonary edema and Cerebral edema. The expert on the documentary noted how people thick if they persevere with their climb, and somehow they will get out of it.

Worse, sometimes they decide to make camp at the current altitude an wait until they get better.

The expert made the point, that all of these altitude sicknesses though extremely dangerous, are avoided if the climber on the mountain only desends a couple of hundred feet, where they can recover again very quickly.

What seems to have happened in the Irish property market is similar to what happens to climbers on mountain tops. Where they believe in their minds they can persevere, but only make things worse, and end up in a terminal condition.

I don’t honestly know how best we can enforce mechanisms which will prevent people from making these mistakes regarding credit and asset bubbles.

What I am certain of however, is that Ireland continues to be described in many conversations I hear, as an open economy. It strikes me as strange that for all our open-ness, we are denied access to financial markets.

It seems that Ireland is an open economy, which has been ring-fenced effectively by the IMF and EU.

For no better reason than to put Ireland’s economy into the deep freeze, until such time as the IMF and EU can get around to doing something about us. It sounds like something Stalin would do with a peripheral state that was causing him more bother than it was worth.

There is a strong sense I think, in which the financial markets will not lend to Ireland or to Greece - because the market has discovered that Ireland’s organs and digestive system is incapable of using the finance the market may have to offer.

It is safer to deny Ireland a cash flow therefore, than risk losing the patient altogether.

I have ears, and I could listen to conversations amongst people of my own age group during the boom years. It would go something like as follows.

You need to leverage yourself at least ten times.

Otherwise, you will not have enough motivation to pursue employment and opportunities. That is what people my age, were telling each other in Ireland.

Buy yourself something really big, and then get serious about your career or whatever enterprise you engaged in.

That doesn’t sound like an organ system capable of digesting heavy fuel such as bank credit, and it was not.

I am afraid, that unless Ireland does something sensible to reassure the market, we won’t binge again, as soon as the credit taps are turned on - we will be left inside our enclosure for our own safety and well being. We can talk about being an open economy all we want.

Sub note: Land ownership

A commentator on the asset bubble in Ireland asked,

Did Nyberg say anything about the developers who controlled most of the land banks around Dublin ? They are covered in Fintan O’Toole’s “ship of fools.”

In Fingal 15 developers owned 50% of development land in 2003. Before the boom land made up to 15% of the cost of a house. By the top of the boom it was 40 to 50%.

Blaming the punters who bought in 2007 is easy. What about the system that brought the market to where it was by then?

This is the other side to the story. In addition to the credit availability and the asset price bubble, there was also the land values doing something strange underneath it all, and how the owners of land banks were up to something funny in trying to create a bottle neck in supply.

I wrote about this in some of my earliest ramblings at the Designcomment blog.

To be honest, if one is to look at only the engine of the credit bubble, and the associated asset price inflation, one can come up with a pretty accurate analysis.

But in order to fully represent the sequence of events that occured in Ireland in the 2000s, one has to include that third leg of the stool, and all of the associated political weaknesses which led certain individuals to believe they could corner the market with regards to development land.

The truth is, no property developer would require borrowings of such enormous volumes as suggested in the case of the top 30 NAMA developers.

Construction alone (no amount of it, which we could ever do in Ireland) requires the sort of financing that our top 30 NAMA developers sought.

What the NAMA developers were at, was akin to the cold war and the missile silos. They wanted to scare one another by the grand display of a huge arsenal.

That world is so distant from the average Joe soap. The issue of land-banking in Ireland, rarely gets the kind of coverage it warrants in analysis. It is surprising how little intelligent analysis has been published on the largest NAMA developers - either before or after their loans were warehoused.

It is almost ghostly how the larger developers operate underneath our noses. At a scale which most ordinary and decent folk could not wrap their head around.

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Lucky Strike

2011-04-19T13:51:00.000-07:00

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Journalist Sarah Carey writes,

I’ve been wondering about this for years. It was the standard method of lending in the early 90’s when I worked briefly in the EBS. Can anyone tell me if the income multiplier was an actual regulation or simply a common practice? If it was a law, who abolished it?

A lot of people I listen to recently, use a sentence which goes something like, the best guy I’ve come across, who seems to have some answers and who seems to have gotten to the bottom of it all . . .

My Leaving Cert year 1992 was before we knew much in Ireland about financial crises like the current one. It was before ‘the mainstream’ started to worry (or think) about the planet, the environment etc.

One of the topical news stories I remember studying for an oral examination in Irish or French, was about drug use by Olympic athletes. I remember watching Ben Johnson steaming up the 100 meter race track and passing out Carl Lewis.

I remember it like it was yesterday.

I remember trying to describe the aftermath to that train wreck in my atrocious French to an oral examiner in 1992. It would be a useful exercise today, if an RTE film crew were to visit a school to interview young folk for the archives.

Quite frankly, I am jaded from listening to middle aged experts tell me what they think. I would like to hear from the younger generations. They will pay the most for our mistakes.

Eugene McErlean commented on radio, about a skateboard teenager he observed on a train journey through Dublin. The teenager sat down and pulled out a copy of Too Big to Fail.

A parent phoned a radio show the other day. Her husband had said at the breakfast table he had some money in a cheque account for the family business. The eight year old present at the same table remarked, that is the money for Anglo.

I listened to a London School of Economics podcast before Christmas last. A man called David Harvey related the recent credit bubble to labour strikes in the more distant past.

Having broken the workers in the 70s and 80s and achieved competition in wages and salaries told Harvey, the problem became, how to afford the same workers the credit required to consume the goods they produced.

Fintan O’Toole commented in today’s newspaper about the culture of capitalism in Ireland, and a lack of sufficient braking power.

The economist Tom O’Connor spoke on radio this morning. O'Connor noted how on a shortfall in tax take in 2008, of €17 billion appeared out of nowhere. It is at the root of problems today in Ireland. But the banking crisis gathers most, if not all of the attention.

We should bear that point in our minds.

Somewhere amongst all of the opinions referred to above, there may be an answer or some measure of truth.

I still remember the photograph of the Irish civil servants whose job it was to announce the €17 billion hole in the exchequer balance sheet in 2008/9. I think that photograph (perhaps from the Irish Times) was a classic the day it was shot.

The mandrins had expressions of utter horror and disbelieve. This is not supposed to happen to us.

I am following Mad Men television series at the moment. There is an interesting plot line at the moment, which involves the charismatic creative director of advertising Don Draper.

Draper has discovered the loss of the Lucky Strike client account. He knows that his enterprise is circling the drain.

Draper's action after some thought and consideration (and smoking), was to publish a letter in the New York Times, in which he announced his advertising agency would no longer seek commissions from the tobacco industry.

It would make sense for the Irish government to publish a similar letter.

We will be seek no more easy money from transactional property taxes.

The transactional property tax in Ireland, was the Lucky Strike account that propped up our business too much, for too long.

There is no Don Draper mentioned in Peter Nyberg's report published today. We have to imagine a fictional character instead.

Brian O' Hanlon

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De-Centralisation

2011-04-19T13:49:00.000-07:00

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[ More to follow in due course, if/when I get an opportunity to process the contributions to Kevin O'Rourke's discussion at the Irish Economy into something like an essay. ]

Brian O' Hanlon

Sub note: Quinn Country

STATEMENT FROM SEAN QUINN
18 April 2011
Issued by:
James Morrissey

The decision by Anglo last week to appoint share receivers was the greatest upset for me and my family in my entire business career. My colleagues and I have spent the past year developing a proposal that is economically sustainable and which would allow us to discharge fully all of our family's obligations to the Irish taxpayer.

During this process we consulted with and secured the support of some of the most respected and experienced individuals in Irish and UK business. I am utterly convinced that our proposal could achieve the retention and increase of skilled employment in the Group.

The Quinn Group businesses are among the best and most progressive in the world. I would like to sincerely thank both our customers and staff for their huge contribution to the success of the business and their allegiance to both me and the Group. There is no workforce anywhere that has the talent, commitment, loyalty and determination of the Quinn workforce. They have created and sustained skilled employment in regions where this was not seen as possible before. At this time my concerns are for those who have made such an enormous contribution to the success of the Group.

Our mistake was to place an overreliance on the Irish banking system and the many predictions for continued sustained growth in the Irish economy from some of the country's leading financial services experts. Ireland needs enterprise and entrepreneurs more than ever at this time but mistakes in business should not result in a life sentence. I value the friendship and support of the many people I have worked with during this difficult time and to the many thousands who have voiced their support in so many ways I say "thank you".

I would like to acknowledge the support of my family. The Irish family unit is quite unique for support, loyalty and compassion. Despite all that has happened I am fortunate to have the most wonderful family and it has been their steadfast support that has sustained me during a most difficult time.

Understandably there has been extensive media coverage since last week on many aspects relating to me, my family and the Group. Amid all of the coverage there has been inaccurate and false reporting. This is the only statement I have made in relation to the current issues and I would ask that reporting of matters relating to me and my family be based on fact rather than speculation.

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Carrying the Burden

2011-04-13T04:51:00.000-07:00

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Michael Taft writes at the Irish Economy blog.

So we will be carrying the burden of past measures for years to come; that we are absorbing new contractions only compound the deflationary burden going forward.

I have been listening to this argument on the TV channels, on the radio talk shows and in newsprint for at least 12 months now.

I cannot turn on the late night Vincent Browne show any night of the week, without hearing from someone who has been put on the panel, simply to exercise their vocal chords in making this point. What everyone seems to have missed, in all of the debate and all of the talking is as follows.

We are collectively (Ireland and in Europe), unable to understand how situation from the point of view of the group dynamic. Michael Taft says, we in Ireland will be carrying.

Everyone seems to be reciting that argument nowadays. But has anyone questioned what it means? The truth that everyone needs to get on board with now, is that Ireland will not be able to carry anything. Europe will be doing our carrying and it's own carrying.

The fact remains, that in situations which involve a group dynamic, there is the strong tendancy for the stronger members of a group to fence off the problem. That is, the fact, that some members of the group are weaker.

That is the first human response. It is rational. But that is what is wrong. In order to make the group work as a group, a collective or even aspire to anything approaching what we call team work, one has to behave irrationally.

One has to work tirelessly to raise the performance of the weaker group member, and there are several ways to create incentive and fairness in that deal. None of which have been explored, discussed or much less mentioned in most of debate in Ireland.

If Ireland cannot carry itself, Europe will end up doing so, and in the long process of things, will experience much difficulty in trying to carry itself also. Before we dish out the responsibilities for who should what, we could bear some of the above in mind.

Brian O' Hanlon

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In Search of a Challenge

2011-04-11T14:15:00.000-07:00

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John McHale writes at the Irish Economy blog.

One of the frustrating things about doing macroeconomics during the crisis is that it is so hard to pin down key empirical parameters. The size of fiscal multipliers is probably the main case in point.

The combination of short time series and a wide range of conditioning factors – confidence effects, the state of credit markets, import leakages, etc. – make it hard to identify the causal impacts of changes in taxes and government spending.

The best gauge I have found by far, is to search through the connections of ex. colleagues of mine in Linked In.

It is easy enough for me to ascertain, from browsing through the links to my linked in colleagues, the people who are capable of running whole companies by themself, and know how to do that, are at loose ends.

The thing about those kinds of people who know how to keep the wheels turning, is that they don’t know how to do anything else. They are no like me, or others, who know how to devote more time to guitar practice or astronomy studies, or fly fishing or mountain biking, to fill a gap in their life.

They are people, who when they find themself at a loose end, they are at just that. The kinds of people that where an economy sheds has to shed them, it is really broke.

Broke like the way things got broke in Eastern Europe, under the communism regimes. The under-utilisation of human capital for extended periods of time. Ireland is not a ex. communist country. But yet it has happened.

Less Boston, more Berlin and heading for Bangladesh.

Particularly in the last few months, I have been keeping an eye at Linked In, and the kinds of people I see emerging into the In Search of a Challenge, bracket, in the numbers that I see recently, is the best indicator or barometer of the Irish economy, that I have stumbled across.

Simply put, you could not acquire these kinds of people not so long ago, if you needed them.

Nowadays, if any entrepreneur who had an idea to do something and required the human capital to make it work, we are simply walking and climbing over it here in Ireland at the present.

Brian O' Hanlon

Sub note: China

Regarding the Chinese, looking at it from the outside, and listening to some observers who have visited it and been asked to advise etc, these theme of spare industrial capacity, over-capacity and redundant investment in the same, seems to crop up a lot. That is, there is a price to be paid for such over capacity, such a surplus of machines ready for production of goods and all sorts of items the world may need as we enter the 2010s.

Ireland is on the complete opposite end of the spectrum, in scale. But in some sense, the Chinese example does remind one of the Irish example at the moment. You have to replace industrial capacity with human capacity, and one has to come to the same conclusion. If I was to lay a bet, at how folk outside, view Ireland and other places at the moment, it is like this. They see the rows and rows of infrastructure, mental capacity that Ireland has managed to assemble over the last decade or two, and the mind must boggle, as to why so much of it gathers dust.

Sub note: Wacko Jacko

Liam Delaney writes at the Irish Economy web site,

A lot of official Ireland have got stuck in a “sure the market has to sort this out” or “migration broadens the mind” approach to unemployment policy.

We are now in the third decade after the decade of the 1980s generation in Ireland that we trained and education and saw leave on boats and planes. Surely after 20+ years of studying the problem, creating initiatives, setting up agencies, taskforces and producing documents, we have zero-ed in a small bit on the specific nature of the Irish unemployment issue. That is, the rate at which we can produce trained professionals exceeds the rate at which our economy can absorb and fully utilize the same.

This is my broader question about Ireland. When we see something, we identify it as a major problem: Do we then have the organizational capacity to tackle and get to gribs with some solution instead of two or three decades?

The worst thing about the Celtic Tiger, aside from the huge hangover, is the annoying realisation that a major problem we all thought we had whipped for good, under-utilisation of our human capital, has come rearing back out of the grave, like one of those zombie creatures in Michael Jackson’s Thriller video. After how many years, and how much squandered trying and put a dent in the problem? Is the unemployment problem in Ireland, the equivalent of the war on drugs in north America? We pump money in, and nothing comes out.

Sub note: Irish Pension Fund

Pension fund money is sometimes referred to as naive money. Liam Delaney writes at the Irish Economy web site,

However, it unleashes a lot of naive money into the system and this needs to be debated closely before the final decisions are made.

One could argue that about the money collected by the Irish government, and re-distributed back to its origins via different programs run through state agencies, major projects and grand visions. We are pretty used to the idea of naive money in Ireland. In fact, we seem to like our money ending up more on the naive end of the spectrum, than the other.

That is not to say, in recent history that the naive money in the public sector side of the Irish economy was any different to that in the private sector side. But I would say the money in the private sector side was running scared into bricks and mortar, than identifying real opportunities and using them. In 2011, we still do not expect the private money to have much more intelligence than it did five years hence.

The one thing I will say about private sector money in Ireland though, was it got a lot of working over, to ensure it did not clash in any way, overlap, or double up, on what the naive public sector money was doing. Very much the opposite in fact. Because, in the smartest of the smart private sector money, it got the naive public sector equivalent to do the heavy lifting. All the private sectore money had to do was shown up and accept the actual prize. A bit like a middle class high school student in north America paying some developing world kid online to do math homework. You see my point.

Sub note: Market Distortion

Jagdip Singh writes at the Irish Economy web site.

Why provide liquidity?

(1) Avoid fire sales
(2) Jump-start the market
(3) Get cash deposits from buyers without needing to spend cash
(4) Encourage more property funds that aren’t vultures to consider Irish property

[break]

One big problem I see is distinguising between NAMA avoiding fire sales and NAMA artificially distorting the market by providing credit.

What is a distorted property market? The only definition of a distorted property market, I am comfortable with, is a property market that causes too much problems in other more important markets, such as those for labour and productivity. Our property market in Ireland has done enough damage in those markets already.

Irish journalists never talk about firesales of human capital. But if a house is burning, it instantly gets miles of paragraphs. The defintion of a property market we have been using in Ireland was invented by journalists to sell newsprint. Fire Sale is a journalistic word all, like burning the bond holders. It is about sales of opinions and column inches, and human interest side bars.

Those terms have nothing to do with the operation or functionality of markets, of any shade or colour. Imagine a component of an automobile engine for a second. Say it is a piston, a crankshaft, a flywheel or a belt. I don’t know. We could never talk about that component in isolation.

The debate about Irish property markets should not be about Joe Soap’s emotios as he sits in slippers reading Sunday newsprint. It should not be about whether property markets start, stop, or go up in flames. The coverage should be about if the rest of the Irish economic engine can run at all, without an isolated part of the mechanism causing a lot more trouble than it is worth.

In Ireland, we cannot integrate components such as property market(s) into the greater whole. That is the sad truth of the matter. Fears of distortion of property market(s) are misplaced. The debate should be about property markets distorting everything else.

Sub note: Self Employment

There are a number of markets in Ireland which do not function, and which do require attention. I normally duck this issue altogether, because I want to avoid going down that whole avenue about central planning.

We have a habit of warehousing labour resources in Ireland, in all kinds of daft ways, and the public sector, is just another way of doing the warehousing. It is slightly better than a dole queue arrangement, but in many ways, not much better, because we fail to extract enough of value from the labour, while it is at its best. It is a bit like stocking fruit in the storage room and forgetting about it.

The property market is the other market which is broken of course. So there are a couple of markets which are having trouble functioning, and there are interactions in strange ways, between all of the same.

Take for instance a conversation I had with a neighbour a while ago. I know he is restricted from moving to a different part of the country by his negative equity, on the residential side of the property market. But consider this.

He was to set up a new business in partnership with someone, who would become his landlord in the retail business. He knows retail, he works in it, and is doing well. He was set to move into his own operation in a new retail unit in another part of the country.

But guess what. Some one of those crazy NAMA developers came along, without knowing the retail trade at all, and paid double for the lease for the unit he was interested in.

Subsequently the same NAMA developer went belly up, and owes billions. The shop unit is sitting empty, the lease having been agreed, and everyone has lost out. It was the habit of panicking Celtic Tiger developers in Ireland, when the cat was out of the bag that residential was bust, that they all shoved their way into commercial property.

They made a series of bad moves, which ultimately caused of them to go bust even faster.

The point I think is interesting, is the young man who can create his own employment is being beat two ways by Ireland's disfunctional property market. He is beat from the point of view of finding a premises in which to trade. He is also beat from the point of view of his home.

Bad behaviour of the property market is sickening the labour market, and how it functions.

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Honey Bees

2011-04-09T03:52:00.000-07:00

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By coincidence, I experienced in my life a chance juxtaposition of a 10-week group project at university, and a further intensive study project in Contruction contracts. Reading about Construction Contracts, I analysed that they are based upon group working and group dynamics.

Our course notes, offer a practical definition of the 'Contractor's profit', where Nominated Sub-Contractors are concerned. They call it profit, but actually it is a risk premium the Main Contractor is entitled to price for, for the potential trouble they may encounter while integrating the N.S.C. into the 'group'.

In my experience in the real world with N.S.C's - I noticed that a N.S.C's product or service may be excellent. But skill in other areas (areas of crucial importance to an Main Contractor trying in running a job), might be terrible.

For example, health and safety practices of the N.S.C. may be under-developed. Their programming capability, their project administration capability, their communication abilities and so forth may be at incubation stage.

It is the nature of the Nominated Sub-Contractor beast.

Construction marketplace

It is how the N.S.C. companies emerge in the construction marketplace. One 'mad scientist' may devise a new way of doing things, or a new solution, which the construction market is eager to acquire.

One individual identifies a demand in the construction market, which is not being served. He may foresee a new technical standard coming down the tracks and sets up a business in advance.

It is similar to how Ireland operated as an economy within the European economic union. At once, brilliant, new and dynamic, but at the same time, reckless.

Perhaps the European economic union should have extracted a premium for dealing with us to begin with, instead of shutting the gates once the horses had bolted. Europe allowed Ireland to blaze it's trail.

No small amount of strutting and chest-thumping ensued.

Killer growth

To return to Contruction contracts for a moment: the construction industry is always evolving, and opportunities for nimble 'fast movers' always present themself. The N.S.C. company can grow from being small to being large very fast, in a construction boom.

But growth is a killer.

The N.S.C. has to service a demand which they have skillfully identified. Shortcuts are taken.

The 'mad scientist' may have worked in research or the engineering department of an incumbent, and now has to step into the role of running a N.S.C. company, without fundamental knowledge about logistics and best company management practices.

In many cases, the 'mad scientist' will last a year or two, only to be bought out by his previous employer. In many cases, the scientist will be glad of this life raft and an opportunity to avoid potential ruin. To save some face, and live to fight another day.

The expectation of such a short window of opportunity, acts as a dis-incentivise to the N.S.C. company, to invest in developing the good planning, logistical and managerial standards.

The main Contractor in a construction contract will look at the newbie N.S.C. with suspicion and rightly so.

As part of a construction project, the M.C. will have to compensate for the shortcomings of the N.S.C's at various times. The N.S.C. may have the killer product, but take short cuts in conventional areas of project management.

In assembling the group day one, maybe, it does encourage the M.C. to accept the N.S.C. if he has the knowledge, he is getting paid a risk premium. That is something, over and above the general/special attendances.

Application outside of Construction

This general point from the world of Construction contracting, does have practical application in the areas of group-work in any context. That brings me back to the example of the group project I participated in at college in Ireland.

There aren't many educational authorities that would accept my logic, but maybe it would make sense to offer high performance students a premium, to work with weaker students in groups.

It would be a 'carrot' part, of a carrot and stick approach to encourage better integration.

For a description of the the 'stick' part of my strategy for group working amongst students, you can read an earlier blog entry of mine, which I named Top Student. The danger with introducing group work into the syllabus of many educational programs is as follows.

The professor may find himself inside the classroom trying to encourage attendance from all members of his class. But the establishment of the group project, and subsequent formation of a sub-classes of dominant and weaker group members, may result in the following.

The dominant student group member may stand outside the door of the classroom, trying to stop the weaker student from entering the classroom, until they complete their submissions for the group project. In my experience in the real life situation, this did happen.

It also happens without the awareness of the professor in the classroom. He doesn't know, there is a whole drama unfolding outside of the classroom, which affects the reality inside his classroom.

Bee hive Analogy

A good analogy to think of may be the bee hive. Where the professor in the classroom is replaced by the Queen bee, and the students in the classroom have now become the drone bees. The weaker student group members flying outside in the vicinity of the hive are the worker bees, who have to collect nectar and deliver it to the hive.

The Queen bee, is a well recognised misnomer, in that it implies some power of command on the part of the Queen. In the real bee hive, the Queen does not exercise this function, but is lifted around and managed by the drone population.

The drone bees maintain a guard at the entrance to the hive and deny access to any worker bees who may wish to enter without their payload. The Queen bee, and all the rest are in the hive making honey out of nectar and are blissfully unaware of the plight of the workers outside.

The 'stick' part of my group strategy, was intended to remove some of the power away from the dominant member in each group, and return it to the weaker members of the group. In other words, to avoid the organisation of the bee hive, coming into being in the duration of the group student assignment.

If you read my blog entry, Top Student, you will understand, the penalty attached to non-attendance, by weaker parts of the group is designed to give the weaker student the bargaining power, which they may otherwise lack, in negotiations with the dominant group member.

That is, when the worker encounters a drone at the hive entrance, they are given a fighting chance. The weaker student can claim, if I don't attendant class, there is no point in I trying to contribute to the group, because I will not get credit.

That is the 'stick' part of my group incentivisation strategy.

Taxpayer investment

The idea is, to try and blunt the sword of the dominant group member, whose instinct will tend to be, to stand at the door of the classroom and fight off any weaker group members who try to enter the classroom, unless they submit their part of a group project.

The entire mechanism, consisting of the carrot and the stick parts, is designed carefully to avoid the emergence in school systems, which introduce group work to the syllabus, of a split class system in the student population. Whereby dominant members in student groups are elevated to a sub-lecturer status, and weaker members in student groups are downgraded to sub-student status.

It is a rather bad deal from a tax payer point of view (those fine people who fund the education system in Ireland in largest measure). The bulk of their investment goes into providing a classroom and a member of staff to teach in it.

The inclusion of group working, into the syllabus of many education programs around Ireland, may seem good, to prepare students for the 'real world'. But should this shiny new feature be bought at such a price that it makes redundant the tax payer's investment in the classroom and academic staff?

I would argue not.

Program implementation

Implementation of the syllabus in education, and especially, the inclusion of such new features as group working, should be carefully examined and monitored from both a teacher and student point of view.

There is no point in implementing policies poorly, to allow staff members to buy themselves kudos in a department, at the expense of the taxpayer. It is the same at the level of our European economic union. The economic union was something introduced into the syllabus and implemented for the member states.

We have ended up in Europe today, with a split class, two tier system of drones and worker bees. A situation, where it is the job of workers to service a debt, and of others to consume the honey.

The analogies that can be drawn from the classroom and the group student assignment, and applied to European union, are many. The intention of my blog entry, has been to show how the student classroom analogy can shed light on the actual dynamics of the situation in Europe.

Brian O' Hanlon

References:

Blog entry, Top Student.

Sub Note: Mechanism for fair grade distribution

The following is a carefully considered mechanism for use with student groups who collaborate on assignments in numerous subject areas, over an extended period of several weeks. This group working component is required more and more in the syllabus in schools these days. It is a notoriously difficult thing to integrate into program, because of challenges presented by the students being a different levels of ability, committment and so on.

The group mark is composed of a mixture of different grades for each subject assignment the group attempt together. Say the group has five subjects they have to attempt as a group. There are five lecture series for the five subjects. Attendance in the various subjects by individuals may vary amongst the students.

The proposal is that contribution to the group effort should be related in some respect to attendance levels of the group members. There are two ways it can be achieved. It probably requires some mixture of both ways to offer a fair system.

There is a base level grade for each of five subject assignments the group did together. But that base level grade could be adjusted up or down as follows, by the course administrators.

1) R i s k P r e m i u m

You could retro-spectively offer a 'risk premium' to individuals who clearly had a better attendance. My argument is that they had more to contribute because the assignments were based on the tuition available to all the students.

It could be a one or two percent bump to their overall mark depending on how poor the attendance of the other group members was. If there was no major difference difference in attendance levels, then the risk could be considered equal.

It levels the playing field a bit between attendees and non-attendees. The trouble with non-attendees is,

A) They have more free time to do projects (albeit badly) owing to non-attendance.

B) They put pressure on their group, because they don't understand a subject they have not attended.

2) P e n a l i t y

You can subtract also from the mark for the non-attendee, in increments. This has the positive effect, if all students know this can happen, of creating incentive to all members of a group to attend in the first place.

Whether they like it or not, they get a grounding in a subject or risk being marked out of 80%, 60%, 40% etc, of the group mark for that subject.

This also levels the playing field in another way, as the non-attendees now become attendees, and have less time than they otherwise would have to do projects - and they also have the ability to contribute more to the group assignments.

The Theoretical Underpinning

The second item is harder to apply retrospectively. To work properly, all students have to be aware of the mechanism in the beginning. Otherwise it is less lightly to alter behaviours. The second item is there also, to avoid a situation whereby a dominant group member instructs weaker team members to dodge classes in the hope they get a bit of their project done.

It is a hard fact, but it is not accounted for in a simplistic group mechanism (without features such as the above), that the dominant member can be quite selfish, self-interested, and doesn't care about the longer term welfare of the weaker student - as long as he/she gets their pound of flesh when they need it.

The second item above, may appear harsh towards the weaker student, but it actually gives them protection against abuse from stronger students.

Likewise, item 01 above, gives the stronger student some measure of protection against the rogues. It might not be a daft idea at all, for students doing 'group' projects to have such a contract document to begin with, which they all sign.

The idea of the said contract, is more to enforce the idea that everyone is aware of how the system works beforehand, rather than trying to impose a contract on a group for the sake of it.

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Top Student

2011-04-05T15:25:00.000-07:00

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Ken Rogoff sounds to me like a very common sense kind of a guy who has the ability to see the reality of a situation, as opposed to operating to some kind of theoretical model, which bears little resemblance to the same. Rogoff talks about indexing the debt of European countries to their level of economic growth.

According to my recent research with Carmen Reinhart, debt-to-income ratios are already at, or near, postwar highs across advanced economies. Many are close to the roughly 90 per cent debt-to-income threshold which, historically, begins to be associated with lower growth. And this does not account for the adverse demographic trends or hidden debts that inevitably jump on to the books when a crisis unfolds.

Can I break this down into very simple terms, in the form of an experiment. Having entered back into participation in education recently, I found myself part of a group of four students who were all asked to worked together and complete a 10 week assignment. This is risky territory for sure. A lot like herding cats.

Towards the end of the same project, I suggested to those in responsibility, that their grading system for group projects was inadequate. Needless to say, such observations are rarely greeted with approval when they come from the direction of a student.

But my point was fairly simple. The 10 week assignment was based upon a series of lectures and notes delivered by the staff in 5 subjects. It appeared to me that only two in my group (including myself) turned up to the same lectures and even possessed a set of notes. My point was, those who did not turn up to lectures, had less to contribute to the group. They were not of great utility to the group.

I suggested a series of steps, whereby if someone broke a threshold of 80% attendance, one would qualify for 100% of marks available to the group for that subject. And over 60% attendance, you would get 75% of the marks. Over 40% attendance and you would qualify for 50%, or half marks that the group earned, and below 40% you would not qualify for any marks at all.

What I was suggesting, was that in marking the group, the professors would create a spreasheet which contained a percentage attendance for each student for each subject, that would in turn generate a weighting factor which was applied to the overall group mark.

The idea was to see if a different mark could be found for each individual, based on their contribution to the group, which was weighted by attendance. It does not mean, that each group would have the mark pulled down by lack of attendance by certain members. Only that the mark for that individual would be modified if it ran outside a certain threshold.

The keener reader might understand what I am getting at here, without my having to write a whole thesis to explain. The idea was to display the fact to the individuals before the project, the scoring system was sophisticated enough to pick them out, if their behaviour was under scratch.

They could not find shelter under the group umbrella. My personal observation was alarming, in how many did opt to use the group umbrella as a shelter, and therefore an advantage.

Now all of this may seem a bit pedantic. In the ideal situation, the individual's score with weighting factor applied would not radically differ from the actual group score. The job of my little model, was only to pick out instances where wild irregularities occured.

If the deviation between actual score and theoretically weighted score, was outside a certain range, says 10%, then a penalty would be applied to that student. If the deviation between the weighting factor applied mark and the actual mark was 20%, then a more severe penalty would apply, and so on.

Here is the most important point about my suggested scheme, so here is where I lost my teachers I think. The ideal scenario under my scheme is where the individual students do not have to be penalised at all. Because their weighting factor applied mark and their actual mark would never show a large enough deviation to justify changing their individual mark.

The goal of my marking scheme was to publish all of the above before the project began. To deliver a lecture on the same, before the group project began, to explain the system properly.

My own theory on human behaviour would say, that the knowledge of what could happen to their marks would be sufficient to modify the behaviour of students in the groups so that no modifications would be required later on.

There would be a dis-incentive for one or two in the group to have poor attendance and not possess their lecture notes. There would be an in-built incentive not to lie back and take it easy, to allow other group members to make up for their individual lack of effort.

But the failure of the professors to twig this, created a real incentive for the most devious group members, to game the system. It is Ireland after all. Why should we be surprised?

In this real life example, I found myself in a group where I found myself pulling the sled on my own for three quarters of the project. Having done so, I found myself out of energy, and the last quarter of the project I was late handing up.

Lo and behold, guess which quarter of the group project the other members concentrated their focus on? You’ve guessed it, the last quarter of the project.

Worse, they were so viciously devious that they handed up the last quarter of the group project with only their three names on it, and I had to hand up my half-finished piece with only my name on it, which automatically dis-qualified me for that seven days worth of work I had completed.

The theoretical model for group projects does not suggest that individual will optimize for this much self-interest, but in real life, they actually do.

My basic point is this. When dealing with groups, and group dynamics, and group incentives, you can run some of these experiments using real actual agents or lab rats for want of a better term, and observe how they behave. It is easy to generate a nice pictorial gantt chart for the teams and how they allocate their resources and efforts, when working under one scoring system or another.

A clever department of economics in the world somewhere could create quite a nice study out of this and publish it properly, unlike my brief rant aove.

Brian O' Hanlon

References:

Blog entry, Honey Bees.

Sub note: Theoretical Model

I have been thinking about ways to apply the above model, to see how it might assist us to look at individual EU member states. The point I want to make is that you expose the inner workings of this model, to the market place and allow it to 'learn' how to work with it. That is, rather than the strategy used by the European Central Bank at the moment, which doesn't appear to be working, where they expose so little information to the market, and allow it to guess, and guess very poorly.

We will pretend that the 'group score' is the German bond yield, the yardstick by which we are all measured at the moment. Pretend the individual 'students' are the EU member states. Instead of ten weeks, imagine ten years. Instead of five 'subjects', we will use five different types of borrowing instead. That is, public, bank, corporate, mortgage and personal borrowing.

Now, to calculate an analogue for 'attendance' of the students in their subject classes, which equates to their ability to contribute to the group effort, and therefore the 'group mark or score'. For each of the six subjects above, for each year of the ten years, identify if the economy grew fast enough to support the level of each five types of borrowing for that particular year.

Say, if the gap between economic growth and the type of borrowing was too wide in a given year, then that goes down as 10% absenteeism, for that 'subject'.

Like in my student group model above, if the attendance rate drops below 80% you are penalised. A weighting factor is applied to the best group score for that subject. Below 40% attendance and you get zero marks or score for that subject.

For instance, if the co-relation between economic growth and personal borrowing was so poor over ten years for that EU member state, then they would get zero share of the mark(the German yield for that type of borrowing). Obviously that EU member state does not know how to manage itself on the level in the economy that is to do with personal debt. That is, the lending institutions are not responsible for their actions.

So that is how a weighting factor could be derived, using five measures based on types of borrowing. We can apply the weighting factor derived to the German bond yield figure as of today.

Where the difference between the two breaks a certain threshold, a penalty is applied. This gives you the fair and reasonable bond yield figure for the individual EU member state.

You can check out how much of a premium the market is charging at the moment over the German bond yield. Now, if the difference between our theoretically 'fair' premium and the market applied premium for risk is very different - that is probably where the Troica of the IMF, ECB and EU should step in.

What I mean is, once the market has time to absorb the knowledge the Troica will intervene immediately according to the mechanism I describe above, then it will influence how the market behaves.

The market will have to learn there is no longer a profit to be made from charging excessive premiums over the best bond yield for peripheral nations. The other thing, hopeful the market could learn, is that it shouldn't loan too much to that peripheral EU member state to begin with.

Sub note: Virtuous Cycle

Governor of the Irish Central Bank, Pat Honohan wrote in the Financial Times newspaper.

Here the policy dialogue with the rest of Europe, all too often portrayed as a zero-sum game with each side seeking to secure concessions from the other, will be key to avoiding this kind of trap. Instead the focus should be increasingly on measures that can help unblock growth.

When we attempt to visualize the dynamics of a complex economic situation, such as the Euro debt crisis at the moment, it may be useful to work with a more simple analogue for markets behaviour. In the above writing I created this situation involving a group of students in a classroom who have an assignment to complete together.

This analogue may seem daft initially, but it has got some legs, and the coolest part is that it neatly dovetails with expressions used to describe Germany (top of the class), and Ireland (fill in the blank).

I had my final assessment for our group project at university today. I made some reflections on the matter afterwards, which might enhance the model I tried to create above.

Basically, what happened in our group was that one very dominant fellow took charge and encouraged half of the group (2 of the 4 group members that is), to specialise on one part of our assignment.

In other words, he did not trust them to have enough ability to spread themselves over the entire project. He was trying to be rational and sensible (that is normally where problems start).

Half of the group was dis-couraged from keeping an attendance in most course subjects. There role was defined as one speciality and only that. In my model, I equated attendance with a leveraging of various borrowing types in different levels of the national economy.

The outcome in my real situation looked something like as follows. The more attendance the weaker half of the group lost, the less they contributed to to areas outside of their specialisation. In turn the put more pressure was exerted on the other half of the group which was deemed to be strong. The stronger group members needed to work harder to compensate in their allocated tasks.

If any of this sounds suspiciously familiar to the European debt crisis, my intention is to built that familiarity into my argument.

The final nail in the coffin came, as the areas of overlap between the two halves of the group (you could call them, perhipheral and non-peripheral), which were intended to be areas of virtuous cooperation, and the main philosophy for having the group in the first place, began to suffer badly.

Communication inside the group got atrociously bad. That is to say, having expressly decided to devote the resources of half the group to a speciality, the achievements within that speciality were much less anticipated.

The fact was the group no longer operated as such. The members were reduced to simply issuing demands to each other, for this submission by this date, or that. Then lumping it all together, and slapping a sticker on it that said 'T H E P L A N'.

A bad strategy. It is very clear to me there is an impulse in human beings to mis-diagnose group dynamics and fail to employ the mechanism of the group to best advantage.

The optimal way to use the group-ing, and it is quite easy to diagnose in retrospect, is as follows.

It is better not to divide the group. It might make you feel safer, in a sense that the problem is isolated. But the way group dynamics work over time has an important feature which humans fail to recognise.

The trick is, in my estimation, to create an incentive for the weaker half of the group to maintain a high attendance level in their tuition classes. That higher attendance level will generater a greater capacity from the weaker half to contribute rather than depend.

This contributions which may seem trivial, may come at key stages on the time line of the group assignment. This takes a little pressure off the stronger half of the group at critical points. It gives the stronger half of the group enough margin that they can spend it on developing the finer points. Those finer points, which in turn can become the basis upon which a really solid group performance is to be built.

The virtuous cycle which I describe has the effect of un-locking the full potential of the group. The less-than virtuous cycle I described earlier, tends to achieve the opposite. Namely, that the group performs below par.

This can be modelled and played out using simple human agents in my own experience. I believe it offers us a robust, admittedly very simple, model with which to view the European debt crisis and the inter-government relationships. How we aught to handle the same, and how we aught not to.

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Boom Town

2011-04-03T13:27:00.000-07:00

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Colm McCarthy writes at the Irish Economy blog,

When sovereign debt gets junked by the market, it does not recover over short horizons like eighteen months. You go down in the elevator and come back up the stairs.

What ‘the market’ has really done since 2008 in regards to Europe, is to establish a new kind of debt classification, and one that superceeds all earlier classifications which were based upon sovereignty and private-ization. If ‘the markets’ can claim any intelligence of any sort, it is for this.

It suggests the old classification system for debt based upon sovereignty or private-ization, was out-moded, inappropriate and mis-applied in regards to the Eurozone project, for a long, long time.

The debt classification system, ‘the markets’ have forced us to examine and consider a part of the business landscape in for the foreseeable future in Europe is, this new type of EU peripheral debt.

It doesn't matter any longer if it is sovereign, private or some combo of both. It all has to be considered from now on, underneath a new primary level classification, which the market has established of its own accord.

I am not experienced enough in Economics history or otherwise to cite examples of this, or parallels in other parts of the world. But one thing does spring to my mind, which may be considered a parallel.

It is the case, when the north American economy was growing in the 1800s and trying to set itself up financially in order to expand westward into new territories, establishing whole new infrastructure, towns, communities and so forth.

It is unreasonable to use the analogy of the wild west, as appropriate to compare with the Eurozone in 2011 I admit. But, they did print a lot of money in that north American expansion.

It was a bit of a risk to the whole currency system then. Because the wealth had not yet been created, the contracts, rights and property systems had not yet been established, to underpin the monetary expansion which was used to fuel the drive westward.

What has happened in the peripheral nations in the Eurozone in the 2000’s was akin to the monetary supply expansion of the 1800s in north America. But the wealth that should have been created to justify such a policy did not materialize.

The German bondholders received ghost estates in places like Laois and Offaly instead. In 2008, the Eurozone's bluff was finally called to account and it could not answer.

We like to think we are more sophisticated and more advanced in 2011 than we were in terms of economics in the 1800s. But really, are we?

A split in the dollar currency never occured in the 1800s in north America. There wasn't a new dollar for the west, to serve its needs because could no longer keep up to the pace of wealth creation back east.

Even though both sides of the north American land mass were operating differently from each other. Because, somehow, the westward drive managed to create enough real collateral to underpin and sustain it's wild monetary expansionism - and thereby its inclusion in the dollar currency system.

My question is, what would have happened in 1800s north America and to the dollar system, if the west hadn’t been won?

Brian O' Hanlon

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Dockland

2011-04-02T14:28:00.001-07:00

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I listened to a debate on RTE radio this morning. The debate had politicians, a news reporter and a couple of university professors. I thought what economics professor Karl Whelan said, made quite a lot of sense. That as long as the ECB is a perceived threat, to pull the rug on Ireland, it is difficult for small or corporate depositors to look at Irish financial institutions and feel confident.

Would there be any merit in extending the analogy? The ECB’s position providing liquidity to Ireland, is like that of a certain superpower providing troops on the ground in a volatile region of the developing world?

It is quite difficult for that region to attain stability, owing to the fear the troops may be removed. Unless the troops are removed, you are stuck, in trying to achieve the goal of stability.

There is a phenomenon in logistical science to do with shipyards and container goods transportation, that also comes to mind. There was a series of ships carrying an order, which consisted of hundreds of containers of cargo. The ships proceed to unload their cargo at the dockside. But the dockyard becomes full, before all of the shipment is unloaded.

Then you are kind of stuck in a bind. Some of the ships are stilling waiting outside the harbour to advance, and they aren’t moving. The stock that is left in the dockside cannot move either, until it all arrives and is accounted for. So the system is jammed up basically and nothing moves.

This was one of the failure scenarios that some bright spark envisaged could happen to the first Internet back in the 1950s. But no one believed him. So they tested it out the network and found, surprise, surprise, it was a point of failure in the network, which they had not designed for.

I often wonder with the Europe central bank, have they got a clear picture of what the ‘failure conditions’ may be, in dealing with peripheral nations? The more I think about it, the more the Eurozone financial crisis appears to me, like a networking problem.

The European central bank tends to view the bondholders kind of like the ship yard views those few ships out in the harbour unable to unload their cargo.

It should come as no surprise, that captains anchored in the harbour have gotten tired of waiting. They are off-loading their cargo to other ships that are buying it at a discount. That second set of cargo ships, have time to wait around and see what happens. They know that someone somewhere will have to break a rule. To unlock the system. To retore some degree of movement.

Brian O' Hanlon

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Defiance

2011-03-23T12:47:00.000-07:00

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Karl Whelan writes at the Irish Economy blog,

And you can compare Irish income tax rates for low and middle-earners with other EU countries and reckon there’s room to raise more income there.

However, the vast majority of these people have entered into commitments (mortgages, car loans, childcare payments) that cannot simply be reversed at the drop of a hat and many are already under enormous pressure.

This is why fiscal adjustments are so small and gradual elsewhere.

Karl Whelan and others may not understand the Irish culture well enough. It comes out of a long history of being told what we cannot do. As in the phrase, no dogs, no blacks or no Irish. The Irish learned to simply go ahead and do things anyhow. If one was reprimanded for so afterwards, then nothing was new. Only the sequence of events had been altered slightly.

When the international authorities issue warnings, not to fly to a war inflicted area such as Libya, Egypt or Tunisia, I often imagine the numerous Irish folk who are compelled to buy airplane tickets to those very destinations. To do so in defiance of what they are being told. The Irish do not protest en masse through the streets as other cultures do. But that is not to say, the Irish do not protest.

Irish people have a terrible tendency to go ahead and do something, and afterwards to ask authorities to defy them. To that end, an Irish man or women, will risk an awful lot.

You only have to look at the planning system in Ireland. Where one of the wealthiest builders in the country decides to erect a structure, many stories in height beside the River Liffey, without any planning permission. It took the action of another rival builder to highlight the contradiction, and ask for the same structure to be demolished.

The defiant builder lost everything, and I lost my source of employment. Such are the disasters one has to endure, to live in Ireland.

Which leads me to my point. Why were Irish people in such a rush during the Celtic Tiger to pay so much money for their homes? It cannot all be explained, as some authors like Morgan Kelly try to, by the willingness of banks to lend to the Irish population. Although, the case that Kelly presents in his academic papers is very difficult to argue with.

The point is simple, if one really understands the Irish culture. This is where pure economic theory, and social science theory need to interact. Especially given the small population sample that is the Irish population, relative to the size of its banking system (a point that Krugman, Boone and Johnson etc, often repeat). In simple terms, Ireland does not represent a very large ant colony.

I think of the analogy of a rubber device that one may purchase at a hardware store to keep a door open. A door stop. The pay agreements during the Celtic Tiger were generous across the board. Every Irish person knew, they would be subjected to review very quickly. They knew instinctively that the government was out of control, drunk on power and spending like the same.

The fact is, the Irish citizens did not trust their own government that was paying with money it couldn't sustain. The fact that Fianna Fail were so woefully voted out of office in 2011, by the exact same electorate, only underlines this point. It wasn't the Irish people who were fooled. It was the Fianna Fail electoral party who were led into a situation, which led to their own wipe out.

What is the instinctive thing to do in that case? To employ a door stop, to force the door to remain open, even though it will want to close. If Fianna Fail were the door openers, the property market became the door stop. The closest thing to a door stop, to prevent downward salary and wage reviews, the Irish people could reach for at the time, was an overpriced house and mortgage.

During the Celtic Tiger in Ireland, the prevaling culture of the time, was such that if one didn't run with the 'herd' and take out a huge mortgage, then you were promptly excluded from your herd. With the net result, many intelligent people purchased homes for themselves, owing to nothing else than peer pressure. This is the sordid underbelly to the Irish problem, that few will discuss openly today.

Former minister for Finance, and current Dail deputy Brian Lenihan hinted at this in his infamous RTE Prime Time assertion, that we all party-ed. We all party-ed. There was a strong collective aspect to Irish behaviour during the Celtic Tiger years. Which cannot be explained by staring at the Irish bank accounting books.

Because the overpriced house, and houses in general, in Irish tradition have been a scarce commodity, Irish citizens believed that the value could be locked into the bricks and mortar, or the land it sat on. National conversation during the Celtic Tiger in Ireland did not have one sentence which did not contain the word property. Property was the door stop.

If the mortgage for the property at 'X' price had been locked in, by the wage or salary earner, then their wage or salary could not go down, because the Irish as a herd had set the cost of living, to co-relate to the inflated price of houses. That is the inflated wage or salary had to remain so, to match the house price. It was the Irish way of saying, defy me. I have just bought this house, so now you have to pay me 'Y' to make 'X' attainable.

That does not make logical sense to an Economist. But what has that got to do with the price of turnips? Who said the Irish herd, were going to be logical? Heck, you only have to consider the international reputation of the Irish down through history, to see how out-of-character it would be, if we did behave logically.

If you read Morgan Kelly's last Irish Times newspaper article, he presents a version of this, but he gets it wrong.

Kelly's theory is sound (as usual), but he mis-applied it. The Irish will not do the herd-like thing, of mortgage default en masse. The Irish were never backward about being forward.

What the Irish have done, is the herd-like thing, of all putting their foot behind the door, and saying to the government, the establishment, all and sundry, defy me, to remove my foot. We are even saying it to Europe now, and the International Monetary Fund. The Irish people want their elected representatives to go all the way to Brussels, to tell Angela Merkel to her face, 'defy me'.

What baffles me most, is why folk such as Karl Whelan, Morgan Kelly etc, are taking this long to figure it out!

Brian O' Hanlon

References:

Blog entry, North Wall Quay Time Line.

Sub note: Irish Economics

The trouble with Irish economists, is they frequently get the theory correct, but they get the sequence wrong. The trouble with folk such as George Lee, is they believe the property bubble in Ireland led to the fiscal expansion by the Irish government. It didn't.

The fiscal expansion (before the Celtic Tiger), led to the property bubble.

It was during the initial stages, when the public service all started to load themselves up in terms of wages, that they began to 'lock in' their advancement in wages, by buying property. Of course, as the wages of the Irish public servants became larger, more and more money was chasing the same amount of available property.

The Irish construction industry wasn't building fast enought to meet the new demand. Demand, often came from the youngest recruits into the public service in many cities and towns all over Ireland. Hence the tax incentives to build blocks of small starter units, apartments, for these public servants to buy.

Of course, as the value of their starter units catapulted suddenly owing to excess demand following supply, the people who weren't public servants became to notice and began to panic. That is when the lending institutions came into the equation. They had to supply credit to the non-public servants, to compete in the market.

The earliest of the entrants to the apartment property market in Ireland did well. They had very little equity going into the deal, and saw the value of their 'investment' shoot up immediately. Enough so that they could sell their starter unit, and put their profit towards a larger unit in the suburbs.

By the later stages of the Celtic Tiger, it was in full swing. Standard procedure on the part of all young people by that stage, before their settled and married was to acquire on credit, a starter unit apartment in a town or city centre. Which they would thereby sell after the wedding day, and use the profits to put towards a deposit on a proper home.

It wasn't the property boom which led to the irresponsible fiscal policies of the Irish government, as the economists will say. It was the opposite. the fiscal policies of the Irish government, which led to the never-ending cycle that became the Irish property boom.

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Odd Job

2011-03-19T07:39:00.001-07:00

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The story hasn't been told properly. One could look at Dublin during the Celtic Tiger era, and compare it to other cities in the world that have absorbed waves of population influx. How those waves gradually became part of the community, the society, in some way.

The object of conversation amongst Dubliners for much of the Celtic Tiger era, was to find ways to discuss people working in construction, without seeing them as part of the community.

Those men or women were described in other terms. They brought money in, they spent money, they created opportunities to earn money. New arrivals to Dublin, were viewed as an economic opportunity, or a unit of economic generation. A kilowatt hour, that was piped into our system. But not as men or women who would become part of anything.

If one scratches the surface of Irish society, what one will find is a nation of small jobs. A nation of odd jobs. Ireland does not create wealth, but instead finds ways to stay busy.

Being busy, of itself, confers status. Status which is not enjoyed by those who remain idle or un-challenged. This is the major fault line along which Irish society is divided currently. A nation of small jobs must find ways to look down at others.

Dubliners looked down upon the construction worker, the new arrival. Their status could be held in check, by treating them as the outsider. The situation of the construction worker in Ireland today is worse. The relegation from temporary status to black economy status, or no status at all.

That is how a nation of small jobbers, deals with waves of new arrivals. It repeats itself in Ireland, always the same way, but finding some form to fit the age. Upon reflection, as one has appropriate time and calmness to reflect, one can assess how a society has treated you, looked at you. As a former construction industry member, it has occured to me, there is an important side to the story of the Celtic Tiger which has never been told.

Brian O' Hanlon

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The Individual

2011-03-04T14:11:00.000-08:00

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Leo McGarry was the character of Chief of staff to president Barlett in the hit TV series The West Wing. Leo would joke that he came from the generation of Americans that were promised space travel. He felt he had been cheated out of his tax money. Where is my jet pack? He would ask.

The McGarry generation explored the extremity of the notion of the individual, to the point where it might have been farsical.

Is the individual person defined by one’s occupation, by one’s place in society, or by how the mind operates?

Cormac Lucey's article for the Irish Times newspaper, Wright report is wrong - Department of Finance failed to warn cabinet of bubble, triggers questions for me, on all levels, about the individual.

I do understand the point that Cormac is making. It is a very good point. We have a long ways to go in Ireland, to try to be pro-active about problem solving.

We have reached the limitation in our current approach.

To wait for an elected official to come and do a ‘walk around’ with an RTE television crew bringing up the rear.

Norman Bodek tells a good story about the worker in the Japanese factory who has to wheel his trolley over a bump in the floor each day. The Japanese attitude was, to build organisations in such a way, as the worker is encouraged to find a way to fix the bump in the floor.

In Ireland, the worker who tried to fix a bump, would soon have a bump of his own to worry about.

The other issue, that springs to mind, while reading Lucey's Irish Times article is local and centralised governance issues, on the island of Ireland.

What we seem to do in Ireland is collect taxes at a local level. We then transfer this funding to central government. Central government try to execute spending programs, whereby the funding that originates at local level is funnelled back down again.

It seems like a very long route to follow, for such a small economy.

Sometimes an independent parlimentarian is elected to an area, who may have the ability to swing things in favour of the area.

That is, the bump may get fixed alot faster, with the requisite influence from the top.

But is this how we should go about fixing bumps?

The taxation money moves too far away from source. All it has to guide it, is a vague, abstract document which tries to apply to the whole island. It is not even broken down into region.

The last issue, that Cormac’s Irish Times article reminds me of, is a blog entry, where I got into the territory of Tony Judt.

A global consensus view that existed in 2007 and 2008, and the Irish were so willing to buy into that view.

The individual, quite apart from generating their own idea, must wait for something pre-ordained.

There were two friends of mine in 2007 and 2008 - one an astute economic observer, the other an astute political observer - who commented that Ireland was headed for an economic and political meltdown.

How they had developed powers of observation, far better than mine, I do not know.

But I do know, I was unwilling to listen to either of them.

Brian O' Hanlon

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Cheese Block

2011-03-02T05:11:00.000-08:00

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An interesting point raised by Cormac Lucey,

Consider the public reaction to the news that Tallaght Hospital had not passed on GP referrals to consultants for consideration.

The focus of public attention was on Mary Harney, as minister, and not on the staff at Tallaght Hospital who had actually caused the problem.

We still do not know their identities.

I can appreciate the problem, of the public having no appetite to hold permanent servants to account. But perhaps, that is all the reason to present the findings, in such a way, underneath the noses of the same public - and foster a real debate.

A real debate.

There was a very good episode of The West Wing, where presidential candidates Arnie Vinnick and Senator Santos, found themselves on a television set, and spontaneously decided, to have a real debate.

That can happen sometimes, on the fly, just by mutual agreement.

Something else contained in an early department of finance memo, in the new Wright report says,

the department . . . is poor on Human Resources Management.

I believe the point of the department is not to manage to resources in its own organisation - but rather to try and manage those in the elected play pen.

All of the Irish government departments have excellent human resources capabilities - but those capabilities have been mis-deployed.

Take for example, how the minister for Agriculture, in the last government was finessed by his department, to the extent where he thought it was a good idea, to go on national morning radio and announce the availability of blocks of cheese.

It takes some impressive human resources management, by the department of agriculture, to make such a stunt even possible. But as I said, the capability is mis-deployed.

Viewers of The West Wing TV series might recall, that one of chief of staff, Leo McGarry's favourite monthly pastimes, was to tell the story of the block of cheese.

The block of cheese, was something a past president positioned in the White House, with the intention of inviting ordinary people into that institution. In the hands of Mr. McGarry, the block of cheese, became a metaphor to convey to his staff members - that every month, each senior person had to invite one group into the White House, to discuss an issue they believed in.

Of course, some of the groups invited were unconventional. But the intention was to throw a curved ball at the senior staff, and get them to exchange conversation with a wider diversity of opinions.

One can contrast and compare the respective uses of the block of cheese, by the Irish, and those in the West Wing. One is about be-little-ment. The other, perhaps, is more about empowerment and enablement, conversation and even real debate.

Brian O' Hanlon

Sub note: Common printing facilities provided under new competitive contracts in third level educational institutions.

1. Student 'logs in' to the printer using the touch screen display on the equipment.

2. Printer becomes un-responsive.

3. Printer is turned off using the switch and turned on.

4. Student 'logs in' for a second time.

5. Student finds there is no paper in the machine.

6. Student tries to choose another paper tray.

7. The printer displays a message telling the user it is 'calibrating' itself.

8. The printer finally sends out the copy.

9. The student wishes to make another copy, but the printer has 'logged out' the student after the delay which occurred above.

10. Student logs in for the third time.

I am told, the procedure is, to keep one's lips sealed shut, about such problems. Mums the word.

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Play pen

2011-03-02T00:33:00.000-08:00

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It is a day after the publication of a study document on the performance of the department of Finance in Ireland.

This study was commissioned after a series of events ranging from a blanket bank liability guarantee, to an injection of money by the International Monetary Fund and the European Central Bank, into Ireland's economy. It may be an understatement to say, that questions are being asked in Ireland, as to our abilities to manage finances.

You cannot turn on a national radio station in Ireland this morning and not hear reports of negotiations, that are under way, to agree a program for government between the two largest elected parties to the Irish house of parliment.

What this betrays more than anything, is the inability in Ireland to execute negotiations properly. Furthermore, we do not seem to understand, who should be present at negotiations, and to what goal the parties should aim for.

This sounds pretty basic, because it is.

But it is at this basic level, that Ireland as a nation seems to have been de-railed. It is a bitter disappointment to those of us (myself included), who had hoped for a more complicated theory to explain our woes.

The truth is, I like complicated theories. But in Ireland's case, the problems appear to be easy to define. The solutions however, seem far away.

Question:

Is it not the case, the permanent government in Ireland considers itself somewhat separate from the house of the Oireachtas?

Indeed, if one were to be honest, the permanent government do not appreciate a rag-tag band of loud country people, making their way to the capital each week of the parlimentary term.

This is one of the reasons the holiday period for elected government members in Ireland is so long. The permanent government in Ireland would prefer, if the elected government, never came to Dublin at all.

The focus of the permanent government, is not to work with the elected government. But to assign human resources staff, to lay on and supervise 'activities' for the group of loud country people, for the time in the big smoke.

This is the nature of the relationship as I understand it. The permanent government is the responsible parent. The elected branch is the child opening the cabinets and pulling out the pots.

The procedural manual terms it, reading into one's brief.

Did this system ever work, in the whole history of the nation?

I am open to opinions on that.

I have a large degree of experience in project management and I have read a lot into group working theory.

I would be happy to offer my services, in the execution of any further investigation of the dynamic that exists between permanent/elected branches of government in Ireland.

Given the collosal figures of the losses, is there anything to be lost by throwing a few euro at a group of lateral thinking individuals, including myself, to investigate the nature of the work process as it now stands.

The achievement of a small amount of productivity enhancement in the interface between the major branches of government, may make such a study worthwhile.

This is the negotiation that is important and should be undertaken at the moment.

This is what both sides, may in fact be crying out for, if asked in the right way.

This is what the national radio broadcasting companies should investigate.

The coverage of the mandates mixture dilemma, of the blues and reds. A dilemma, which may be more important to the blues and the reds, than to anybody else trying to live in the real world.

Everyone knows that blue and red, makes purple.

Perhaps, we should just have a purple electoral party, with a straightforward mandate, and be done with it?

You could paint the walls with it.

I would like to cite, deputy Enda Kenny's recent comments about ministers, 'plaques on pumpstations, and forest trail ribbons'.

There is a suggestion implied, that an activity or adventure camp, theme exists within the offices of the various government departments.

That does not comply with the purple theme we should be aiming for.

When I listen to a civil servant speak about the house of the Oireachtas, it feels like I am being told about a care centre for kids, with a big rambunctious play pen in the middle.

Why do I detect this opinion on the part of civil servants?

Should education in political science be mandatory for all branches of the civil service?

What are the new approaches we can take to the problem?

I would to be involved in looking into this more.

Brian O' Hanlon

Sub note: General Guiding Principles

A commentator at the Irish Economy blog states,

The DoF should have told the pols to tighten, not to expand by just a little bit.

That’s what a 2011 Sir Humphrey would do, knowing that the way that frames the debate ensures that the pol won’t do too much harm.

Pols have learened, pavlovian style, to just double whatever the Mandarins say they are allowed to do. DoF stiffs, stuff in 1922 ways of doing things, just didn’t, and don’t, get it.

Anyone familiar with the in's and out's of project management, will find a familiar ring to that paragraph. Indeed, the common link across many projects and endeavours is the behavioural patterns of human beings, when working together as groups.

Which leads me to theorize, there is nothing outstanding or exceptional about the elected/permanent government interface - except that it needs to be assessed, optimized and even improvised - as these important interfaces always need to be, in most other walks of life. The patterns we find in group behaviour of humans are fairly consistent, across cultures and across time. With some wrinkles here and there.

But if you know what to look for, and have awareness sufficiently honed, you can usually find your bearings in any circumstance, which involves the cooperation of numbers of human beings. Situations which require the analysis of group behaviour, are situations which can really benefit from the involvement of a good generalist, who understands their science.

Take health and safety regulation as an instance. At its root, it is a study of group behaviour and what people are likely to do, in a given situation.

The main 10 or 12 principles were well laid out in a European directive back in 1989, and all of the legal stuff ever since, has tried to build on top.

Council Directive 89/391/EEC of 12 June 1989.

What we should be working on in 2011, is a similar set of principles for departments of finance, across Europe.

Which may guide elected and permanent officials, well into the future. This as I understand it, is along the lines of what economist Colm McCarthy spoke of, on the radio this morning. There is a wider European aspect, to the financial instability affecting Ireland at the present time.

We cannot continue to devote our entire attention to a financial crisis for ever, as fascinating as it all may be. There are other things to deal with too.

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Antiques

2011-03-01T17:14:00.000-08:00

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I listened to an RTE News at One broadcast with Sean Whelan, Economics Correspondance, on the report commissioned into Ireland's department for finance. One comment he made surprised me. The report says, the department claimed in 1999, the construction activity was over-heating in Irish economy.

Here is the problem though. 1999 to 2009 is an entire generation. The persons who were in a position of influence things in 1999, may not be there in 2009.

It is hard to trace a line of responsibility through individuals. It makes more sense to trace a line of culpability, through institutional identities.

Coming from the construction industry myself, I know that anything the department of finance would have warned of in 1999, would have been fought off, by the construction industry. To the extent the Construction industry would actively have sought to squash any institution that threatened it's prospects.

By 2007/08, the Irish Construction industry, as an institution, had become positively balsy. We were still talking about the shortages of labour to build all of the projects we would need.

It stands as a fact, that in 1999, the department of finance did send out many warnings. But we cannot rely on individuals to be around over extended periods of time - like ten years - to carefully monitor activity and send out the correct signals, to the correct people.

It would be much better to rely on 'institutions' rather than individuals. Because 'institutions' might retain an institutional memory, that doesn't clear away, with regular staff turn over, promotions, retirements and so on.

This is all I can think of.

We should try to recall, that the period 1999-2009, was a period when so much suddenly changed in Irish institutions. The move was to expand, modernise and enhance public services. Old patterns and old procedures were thrown out of the window everywhere.

So much institutional memory was scrubbed, erased, altered or lost.

Sometimes for good reasons that were technological, for process, or for political reasons. Not to mention the reason, we were flush with cash, and had to spend.

It is noticeable the way in which we re-brand departments even still. We give them fancy brochures, headed paper, brass plates and new policy slogans every few years.

A constant effort to polish things up. But does too much institutional memory get swept away, I ask? We have a modern pre-occupation with rationalisation, stream lining and cleanliness.

But too often, a good antique, is destroyed by a bad restore-r.

Brian O' Hanlon

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Safety Net

2011-02-27T16:24:00.001-08:00

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It is interesting to listen to breaking reports about Ireland's election 2011. While at the same time, inserted between the reports, are international statements about affairs in North Africa.

During much of the Celtic Tiger period in Ireland, I was aware of our country's committment to human rights protection around the world. It was common to hear Irish people discuss this on social occasions. I thought to myself, what a privelege it is to live in a country where people felt it important to maintain a consciousness about events that happen far away.

It was evident during the years in Ireland when Fianna Fail and Taoiseach Bertie Ahern held control of our democracy, we had become a destination on the map for people of many origins, who sought a home on our island.

This lured me into a sense of security. The fact, that one's island becomes a suitable home for so many, seems to reassure, that one is safe from crimes. Like you have a safety net to fall on if danger looms.

In 2011, the reassurance is less strong for the Irish. We realise, how poor an indication of domestic security, has been our consciousness of trouble abroad. It seems that we in Ireland, had very poor structures to report and illustrate what happens on our own island. We didn't know what was going on, in our highest office. Or much worse, we knew and choose not to care.

Our lack of sincerity in Ireland, with regard to domestic affairs, casts a poor light on our sincerity of intention to matters foreign. The results of election 2011 were not good for democracy in Ireland. They were a reminder that Ireland knows how to take a group down an alleyway and lynch them, in preference to engagement in real conversation.

That does not bode well for the future.

For all of the satisfaction that Irish people may have derived out of the day that was February 26th 2011, and for all the anticipation of that day, the after taste is not sweet.

The day that was February 26th 2011, has not changed the international image of Ireland in a meaningful way. The day has not presented an image of a country able to exercise its right of speech.

It does not bode well for the future.

For all progress that February 26th 2011 supposedly represented, it draws attention to the matter, that three years after the Irish economy was destroyed, we cannot point to any party who has or will assume a responsibility.

That issue has been lost, once more, in the commotion and confusion, that surrounds political election. That is what makes February 26th 2011, Ireland's day for democracy, bitter sweet.

Brian O' Hanlon

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Access Management

2011-02-20T16:09:00.000-08:00

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The formation of a ‘National Asset Management Agency’, betrayed a legacy of old fashioned thinking in Ireland. The sort of thinking that gripped the country during the Irish property bubble, and is still allowed to control the destinies of people.

Our asset bubble is well and trully over (notwithstanding the argument of professor Brian Lucey and others, that NAMA inserted an artificial floor in the property market). Our apprenhension in Ireland is not focussed any longer on asset values, but on survival and the difficulty of access.

Our effort would have been better spent, by establishing a: national ACCESS management agency, to coordinate the re-building of bridges to valuable networks.

The debate in Irish politics and in the media about Anglo Irish bank, and the bank guarantee gives me pause for consideration.

The most disappointing part about the debate I have heard, is the way it split down the middle, between those who believe Anglo is systemic to our financial system, and those who do not. But having proved or dis-proved either, there is no where to go beyond that.

It was an academic dead end, and one which Patrick Honohan (of the widely respected Honohan report), failed to surmount.

The question is not whether Anglo Irish bank was systemic or not. It is a question of how Anglo Irish bank related to the ‘network’ and the ecosystem, in which it lived. Instead of attempting to become a keystone participant, and thereby add value to the network, Irish corporates wanted to occupy the hub landlord position.

In commentary about the work of Iansiti and Levien, Albert Foer summarized.

A hub landlord, the most anti-social species of dominator, “eschews control of the network and instead pursues control of value extraction alone,” providing little new value to its network, leaving a “starved and unstable” ecosystem around it.

I couldn't think of a better way to describe the Irish situation now. Instead of using the economic boom to create more access, we tried to create more assets. Assets, which we are now pretending to manage.

The reality, that Irish young people venture into today is a world of networks. Authors such as Iansiti and Levien remind us of this in their Keystone Advantage publication.

Ireland's reputation internationally is shot. Politicians tell us that bridges have been burned with our European neighbours. Our access to funding at all levels of business is gone. Our paranoia with (lack of) access to ‘markets’ features in national news every day.

All doors have shut in our face. We have still have our assets.

The property bubble sucked the life out of our system, and replaced nothing. Economist John Fitzgerald's published an article in the Sunday Tribune which describes a situation very well. An article, in which he documented how the construction industry robbed labour resources from other industries.

Our young economics and business students have to learn to understand why this happened. The ‘hub landlord’ in our case, was our national obsession with property. That is how we positioned ourselves, and still do today.

Brian O' Hanlon

References:

Blog entry, Cold Turkey.

Blog entry, The Wrestler.

Blog entry, Berlin Wall.

Blog entry, Corporate Tax.

Economist John Fitzgerald wrote for the Sunday Tribune newspaper, Shock therapy needed sooner rather than later to spur recovery.

To get the resources the building sector needed during its period of excess, it had to rob resources from elsewhere in the economy. This was done by bidding up prices, wages and costs. While the boom lasted, to get the resources it needed the building sector outbid firms that were exporting. The effect of the rapidly rising costs, especially wages, was that firms that depended on export markets were closing even in the good times. Because of the general buoyancy in the economy these losses went unnoticed.

Sub note: Funding a Tax spend

Stephen Kinsella remark in a Sunday Independent newspaper article:

“Dr Coffey did a shameful, shameful thing — he looked at the evidence on the Central Bank’s balance sheets of the national ownership of outstanding bank bonds.

The result?

Close to half those bonds are owned by Irish people.”

I wrote a blog entry, which I entitled ‘Corporate Tax’ a long while ago, in which I theorized the National Treasury Management Agency had become a vicarious landlord to the multi-national companies situated in Ireland, through the ‘vehicle’ that was Anglo Irish bank.

That is, the NTMA was a bond holder of Anglo Irish bank. I theorized, that Ireland was secretly trying to fund the tax breaks it offered to the foreign multi-nationals, by earning back to tax break ‘spend’ through being a landlord to the same.

As much of a stretch that arrangement was to imagine in my brain, it still captured something of the real truth and the whole ‘circularity’ of our predicament. One must try to find a theory, I believe, which fits with the facts of the situation. Even fit the resultant theory looks completely crazy, it cannot be that wrong, if it somewhat fits the facts.

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Wide Screen

2011-02-04T20:11:00.000-08:00

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RTE radio broadcaster Philip Boucher Hayes had a task of interviewing several un-decided voters on the Drive Time program, as part of coverage for the Election 2011 in Ireland.

The contributors to his piece, complained that political candidates have nothing to say.

On Newstalk 106 early morning radio show, political veteran Ivan Yates observed that Election 2011 hasn't heated up yet.

What does it all mean? How should one respond to the apparent lack of enthuasiasm from the Irish voting public?

We are reminded sometimes, the inventor of television broadcasting technology was disgusted at how society chose to employ the medium. The inventors of internet technology had similar cause for concern, in the late twentieth century.

I was a student of architecture in 2002. That was when the internet appeared on the horizon for Irish people. The professors warned students, the Internet is not the source of all knowledge. They would say, there is not much on the Internet at all.

In 2011, as I participate in a higher level course again, I am interested to see, professors relate to the Internet in a different way.

The internet is not a medium, where one waits passively for content to arrive to you.

Professors in Ireland have realised, the Internet is an excellent way to deliver their own content, to their own students. Professors in Ireland have begun to fill the void with stuff of their own creation. Students can access at their discretion and leisure.

Many of the world's best thinkers have commented about television and society's relationship to that medium. The theories suggest that on-screen content may appeal to our basic human instincts. We are being manipulated by corporations for profit.

I listened to Fine Gael's Leo Varadkar on RTE's Morning Ireland radio program. He is finding a lot of anger on the door steps around Ireland.

When Mr. Varadkar tried to make this point on the radio program, he was abruptly cut off by the RTE presenter. It seems to have escaped notice, that so little is transmitted from the Irish public, via our political candidates. Except anger.

Our un-decided voters heard nothing new from our political candidates. What were they expecting? A full length, high-definition, block buster movie?

We have come a long ways since Daniel O' Connell and the hundred thousand people meeting. Human speakers used to relay the message through the crowd, by shouting.

Our political candidates now upload video content, and generally bend over backwards to give us a message. But still, nothing gets through.

We feel so clever in 2011. Our Sky digital subscriptions, and wide screen televisions allow us to view the image of the candidate on screen, in fantastic detail.

But Irish society has never had so little to say, when given the opportunity of a democratic election.

In Toyota city in Japan, the manager used to say, it is not my job to tell the worker what to do. It is my function to receive suggestion from a worker.

That was an idea Norman Bodek had translated from Japanese in the twentieth century - attributed to the inventors of the Lean manufacturing system.

It may have been Jim Glennon, in conversation with George Hook (Hook, the friendly face of the Sky advertisting campaign in Ireland), on Newstalk 106 radio, who offered a translation of the Gaelic terminology used in our political system.

A Teachta Dála usually abbreviated as TD in English, is a member of Dáil Éireann, the lower house of the Oireachtas (the Irish Parliament).

More literally, it translates according to Mr. Glennon, as voice of the people. The notion, that the function of the parlimentarian in the house, is to convey the voice of the people onto record.

Maybe it is a symptom of the rot in Irish society in 2011, that we must complain - our politicians have nothing to say.

What Daniel O'Connell fought for in 1843, was not the right to speak to a hundred thousand, but for a way, the hundred thousand could speak to him.

Valerie Hanley, reporter for the Irish Mail on Sunday, tells us that in March 2008, 12 members of an Irish golden circle paid €60,000 for time with minister for finance, Brian Cowen.

That is a measure of progress we made in 150 years.

Until the small island of Ireland re-discovers its voice - the voice it found, when O'Connell was alive - then our statesmen and women, will have nothing to say.

Political scientists in Ireland during election 2011 wonder if we need to write a new constitution. I ask myself, if Irish society is worthy of the one we have?

It is not only a matter of having the best written constitution. It is for nothing, if we cannot live up to it. It becomes as useless as my New Year's resolution, to do more exercise.

We are busy in Ireland trying to succeed as individuals, but we fail as a collective.

One of Mr. Boucher Hayes's un-decided voters commented, it is not appropriate for the Irish government to impose higher taxes on people who earn over one hundred thousand euros.

As Jed Bartlet, would say on The West Wing, that is the problem with the American dream. We all want to protect the rights we will have, when we are millionaires.

Brian O' Hanlon

References:

Blog entry, Cold Turkey.

Blog entry, North Wall Quay Time Line.

Blog entry, Development as Freedom.

Sub note: Twitter accounts

Paul Gogarty of the Green party, replaces the abbreviation 'TD' on his Twitter account, with 'GRN' instead, having lost his parlimentary seat and status thereby as voice of the people, for Dublin West on February 26th 2011.

Sub note: Bertie Ahern's last day in politics

Colm McCarthy contributed a blog entry to the Irish Economy website here.

The most worrying thing, is not that Mr. Ahern expressed doubt as to the quality of advice he was offered by his civil service. It is not the fact, that radio programs such as those hosted by Marian Finucane, almost break down in misconduct, owing to discussions between experienced economists about the inability of the same civil service. Forget that.

Remember what Amartya Sen has said about democracy and freedom. Remember that no where in the final statement from political veteran, Mr. Ahern, did he mention what his own people, the Irish citizenry, may or may not have told him.

We need to measure our progress over centuries, rather than decades. That is difficult for modern Ireland to do. It requires recognition of traditions and cultures different to our own.

There is much reference to the period between 1920s to 2010s in election 2011. It is as if the island history came into existence then. We are ashamed to speak of the period before. The political parties in Ireland have depended too much, for political cache on that story, and only that story. Those who claim to offer an alternative to civil war politics, inadvertedly define themselves within the same framework.

That is an obstruction to us, and our thinking, in election year 2011. The 1920s in Ireland happened. It was messy, dis-organised and rushed through (the same characteristics which define the Ireland of today). The 1920s produced divisions in all kinds of ways. We must remember an Ireland and a time before divisions or be defined by the same.

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Savings

2011-01-13T08:10:00.001-08:00

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Economist Kevin O'Rourke writes in his blog entry, Divide and Conquer, at the Irish Economy blog site recently.

Of course ordinary French and German taxpayers are going to be angry at lending their money to an insolvent state with lower tax rates than their own. Why wouldn’t they be? Of course ordinary Irish taxpayers are going to be angry at having to pay for high interest loans designed to bail out foreign banks. Why wouldn’t they be?

And while ordinary Europeans get angry with each other, with unpredictable political consequences, capital walks away scot free.

There is a useful word, which I find conspicuously absent in the above extract. I find it strange. Kevin O'Rourke is a world renowned Irish economist. One who knows a lot more about the financial crisis than I ever could.

A word which should not be left out of the above extract, is savings. It is a word used consistently and to effect by the author (and money manager) Peter Schiff in his book, Crash Proof, 2.0. In the case of Schiff, he talks about the north American citizens using the savings of other nations, instead of generating their own.

If you are to believe some of the ideas of minister for Energy, Communications and Natural Resources in Ireland, Mr. Eamon Ryan, there is a similar idea emerging. That is, the unit of power (or spending), that you do not use, is that which generates the real wealth. Real wealth, as opposed to the invented kind, we have been pursuing for so long and vigourously, via property speculation in Ireland.

It must be that, vested interests within the Irish economy (and the European), would rather that Ireland's national savings were not used to their fullest potential.

There are vast corporate profits to be made, when citizens are forced to over-leverage themselves. That is, through the huge transactional cost associated with the over-grown financial services sector.

That was clearly the case, during the Irish property bubble. Most of the profits generated, were harvested by middle men such as property valueers, auctioneers and media advertising.

We also saw the example of the Anglo Ten. They borrowed on a non-recourse basis, in order to buy shares in the same bank who lent them the money. That happened in 2008. The penny really dropped for me, when I listened to Newstalk 106 radio in January 2011.

The Irish radio prsenter corrected Labour party deputy, Pat Rabbitte, in saying: Lets be clear about this Pat, that was never proven to be illegal.

As of today's date, I have no reason to believe the law is changed. All I can think of to say is, well why the hell not?

In my mind, in 2011, the Irish taxpayer is selling its future health insurance payments, to fix our wrecked banking infrastructure. That is, the person who has cancer in their bones, not only has to pay for their own, but that in a banking industry as well.

Bits and scraps left of the welfare state, in Ireland are inter-meshed with capitalist dis-functionality. It appears, in 2011, the only things the Irish have left, which resemble real money, are payments for services they do not receive. I am no legal expert, but I detect some breach of bargain or un-fairness, in such an arrangement.

It is one thing to deny benefits of a welfare society to people. That is north America. It is quite another, to use the same as disguise for something rotten. That is Ireland.

That is how sad the market capitalism experiment has turned out to be, inside the shores of Ireland. This is a point I tried to argue in a recent blog entry, Cold Turkey. Which I know is my most inflamatory blog entry to date. In fact, I am distressed that my rare, un-structured contributions to the national debate, have now been reduced to that.

Brian O' Hanlon

Disclaimer:

I am nothing like a rampant socialist. I used to think they were wing nuts. Now, I am not so sure.

I would like nothing better at this moment to sit down and read a chapter of Alan Greenspan’s autobiography, or leaf through F.A. Hayek. But I hope that I keep such ideologies to myself, and do not try to impose them on a whole island population, such as is the case, with Ireland visa vis the European Union experiment.

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Cold Turkey

2011-01-12T05:12:00.000-08:00

The long saga of the Fianna Fail dynasty was always going to end like this. But it doesn’t say much for Tanaiste Ms. Mary Coughlan when she remarked in the past couple of days: Taoiseach Mr. Cowen just happened to be ‘paired off’ with the two guys from Anglo Irish bank in July of 2008 at Druid’s Glen. It is like saying that a dealer and an addict happened up to bump into each other in a parking lot.

The Anglo Irish pair and Ireland’s minister Cowen had to meet on the golf course on that occasion for one reason. To get their alibies in synchronization. It would be the last time that they would meet again, face to face. Unless they were wearing stripes.

It is a week after all 'Plan B' customers of the VHI health insurance company in Ireland had their charges raised by no less than 45%. Minister for Health, Mary Harney had informed the parliment it would require three years to revise legislation on health insurance. That was on foot of a judgement by the Supreme court in Ireland. It isn't the first time the Irish government has cited reasons of legal impediment to avoid changing some fundamental part of the system.

The real delay in legislation has more to do with Ireland's banking collapse. Our health insurance industry, property industry and banking industry became intertwined.

It is with no pleasure that I level such an assertion against the political heavy weights in the Irish scene. But there is no avoiding the scale of the mess, those politicians have created. A mess that they and their families will also suffer from also. There are no winners in all of this. It would help if we could explain the truth and outline the extent of connections within our mess.

Without Quinn healthcare, Anglo Irish bank collapses. The only way that Anglo Irish becomes sale-able, is if it is sold with a charge on the Irish healthcare industry. We are attempting to sell the future policies of thousands of health insurance customers in order to try and save our banks. The origins of the story go way back.

The date of September 29th 2008 is often cited as the important date in the Irish banking crisis. But it is obvious, the Fianna Fail incumbent government were trying to patch up our banks, a long time prior to that. Indeed, the Irish government was trying to acquire share positions, behind the backs of the rogue bankers themselves. The rogues were trying to out-smart one another.

In the early days of the construction boom in Ireland, our prime minister Bertie Ahern gave Mr. Sean Fitzpatrick 'the inside track', having appointed him as 'Chief Risk Manager' on the board of the Dublin Docklands Development Authority. The region controlled by the DDDA, is home to many of the world's largest multi-national firms.

Next, Mr. Cowen forced through legislation to enable Anglo Irish bank to sell risky securitised shares of Irish commercial property on the London market. There was no end to the number of creative ways, that Ireland could borrow.

We had become junkee's for designer credit products. Ireland was party central. Party politics writ large. Minister Brian Lenehan informed us on television in 2010, that we all partied. It is ironic. In 2011, neither Ireland's banks nor the state can access credit. Ireland has to go cold turkey.

Minister for finance, Mr. Cowen tried unsuccessfully in 2006 to re-inflate the property market in the jurisdiction of the Dublin Docklands Development Authority - to allow breathing space for Anglo Irish bank and its troubled asset portfolio. Mr. Cowen does not have a good grasp of the property market. The purchase of a site for over €400 million he authorised in October 2006, now has a negative land value, a couple of years later.

It is a sad affair. €400 million seems like small change compared to our total problem in 2011. It was minister Cowen's style to invade industrial sectors in Ireland. The energy industry in Ireland was another area Mr. Cowen dabbled in.

When the International Monetary Fund is called into a state, which has suffered from undue interference by a tyrant, that person is normally removed. In Ireland's case, the architects of the downfall are still in charge. Because the tyrants in question were always willing to do the bidding for the European Union.

The Irish government executed their duties as good little European Union servants, not as Irish men and women. 'Market competition' was artificially imposed on the tiny island of a few million citizens, in a way that resembles Joseph Stalin more than Joseph Kennedy. Despite our attempts to be more ‘Boston than Berlin', we have become more ‘Berlin than Boston'.

Europe has always been a beauty contest between socialism and capitalism. Ireland became a stage for that pageant. We used to describe ourselves as the 'envy of Europe'. Ireland was a destination where all Europeans wanted to move. If the Ukraine is a bread basket, then Ireland is now just a basket case.

Having failed miserably to patch up the problem that was Anglo Irish bank through insider dealing and dodgy commercial real estate securitization – the next step of the Irish government was to hatch a plan behind of the backs of the executive bankers. Instead of digging down, they dug sideways aswell.

The anonymous trade using 'Contracts for Difference' by Ireland's richest man, Sean Quinn, came un-stuck in early 2008. Not even the executives of Irish banking knew what exact percentage of the toxic bank that Mr. Quinn owned. The Irish government knew a bit more then, than they are willing to admit in 2011.

Before all of this unfolded, our former prime minister Bertie Ahern was forceful on behalf of Mr. Quinn in negotiating a deal to acquire ownership of BUPA Ireland health insurance. By all accounts it was a real ‘Bertie’ transaction and a filty affair. Palms were greased. The senior management of the insurance company were locked outside the boardroom, while Bertie and his mates from the trade unions sat around the table, at the sale of BUPA Ireland to Mr. Quinn.

In early 2011, many customers are driven towards Quinn healthcare. That is by design rather than by accident. The VHI, the Irish state owned healthcare company was coerced into raising its price, to create a comfortable margin for the new market entrant.

The insurance business belonging to the Quinn group is under control of the Irish financial regulator. The property development arm of the Quinn group was borrowing money from the insurance part of the group. Money which was required under regulation to act as a buffer of capital. That is, real money to you and me.

The banking problem, the health insurance problem and the property bust are all intertwined, owing to premeditated actions of siting government ministers. We are all going down with this ‘Ship of Fools’. Ireland has a pretend parliament. The bottom line is, decisions were made on the golf course rather than in public. We must be prepared to suffer the consequences of that as a society.

Brian O' Hanlon

References:

Blog entry, North Wall Quay Time Line.

RTE news reports on January 9th 2011,

Taoiseach Brian Cowen had two previously undisclosed contacts with former Anglo Irish Bank Chairman Sean FitzPatrick in the months prior to the introduction of the bank guarantee. In a statement to the Sunday Times, Mr Cowen confirmed he had dinner and played golf with Mr FitzPatrick at Druids Glen in Co Wicklow in July 2008. However, Mr Cowen said that the affairs of Anglo Irish Bank were not discussed during the day. Mr Cowen also confirmed that he took a call from Mr FitzPatrick concerning Anglo Irish Bank shares four months earlier when he was still Minister for Finance.

Irish Mail on Sunday.

‘Golden Circle’ builder paid €5,000 to meet Brian Cowen

August 23, 2009

by Valerie Hanley
The Irish Mail on Sunday

A GROUP of businessmen – including one member of the notorious ‘golden circle’ of secret Anglo Irish Bank investors – paid €65,000 for a private meeting with Taoiseach Brian Cowen, the Irish Mail on Sunday can reveal. The 13 company directors and property developers met Mr Cowen in March 2008 in the splendid surroundings of the five-star Shelbourne Hotel’s Constitution Room. Among them were two beneficiaries of the infamous Ansbacher trusts set up by Charlie Haughey’s corrupt accountant, Des Traynor, and one of the 10 Anglo shareholders being investigated by the Garda’s fraud squad for potentially illegal share trading.

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Rodeo

2010-12-26T13:03:00.001-08:00

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I do recommend Simon Kelly's book Breakfast with Anglo. I recommended it to my colleagues abroad too. Apart from painting a true picture of construction in Ireland, the book does paint a true picture of the industry anywhere in the world. I only wish it had included an explanation of terms.

That was a glaring omission on the part of the publisher. A brief explanation of terms could have done so much to future proof the title for later generations to read. Not many will understand in a decade or two, the exact purpose of NAMA. Not many understand its function even now.

Few north Americans today know what the Tennessee Valley Authority, set up in the Roosevelt years, was intended to achieve. It is useful to provide a footnote on such organisations, and explain how they came into being.

I was impressed by the explanation of terms in a Vietnam war novel, Matterhorn, which was written by ex. US marine Karl Marlantes. In the appendix, I could read the definition of such things as a super grunt. A semi-derogatory, semi-complementary name to describe a type of soldier, all but lost to history.

In an interview, Marlantes recalls a lady friend who never spoke to him after she had learned of his involvement in Vietnam. She ran up the steps of her apartment building and I never saw her again, said the author. Marlantes described his book, as an attempt to communicate with that person, thirty years later.

Debate has emerged in Ireland about the new public works construction contracts. I am not qualified to offer comprehensive analysis on the subject. But I have observed the industry over two decades. There is a cosy cartel operating on the island. One in which mediocrity goes un-punished, and genuine effort goes un-recognised. I owe it to the industry, to give it that assessment.

Of the forms of construction contracts available hence, there was a major divide. The divide between contracts for building works and engineering works. The later, it has been said, required an engineer to involve himself at the works stage. It seems logical, for the engineer or architect to insert himself into the process, of how things get done.

My approach to building works projects, borrows from my experience in engineering projects.

An analogy I like to use, is that of working with beasts who prefer not to be tamed. In general, the safest place to be is up close and personal with your adversary. I have witnessed many times, in building works projects, where consultants are too clever. They leave distance between themself and the project, and end up being kicked or bruised badly.

Kelly's approach to building and property development, is unlike mine. He is fascinated by numbers. He trusts what the numbers tell him. He knows the specific numbers required to complete his model. Kelly is un-interested in the dirt and grime of the game.

The essence of the rodeo craft, is to maintain close contact with the beast for the brief duration of the relationship. When you are flung clear, you make sure that is exactly what happens. You are flung as far away as possible. In the instance of Simon Kelly, the partnership structure he had built, tied him to the animal.

The equivalent of a rodeo rider getting his foot caught in the stirrup. The poor beast gallops around the ring, doing its best to hop the rider off every obstacle it can find. Normally in the rodeo ring, the guys in clown suits are supposed to rush in at that point.

Reading Simon Kelly's account, I understand the Irish guys in clown suits (the Irish bankers), stood by and watched.

I have no doubt, that if the National Asset Management Agency, engages in partnership with Mr. Kelly, the public works contract will not be an obstacle.

The new suite of contracts, designed by the Irish department of Finance, will facilitate a distanced approach, favoured by Irish property moguls. Which is the problem. Very few NAMA developers, and much less the employees of the agency, are able to compete rodeo-style.

My prediction is, that before long, we will find ourselves spectators to some spectacular broken bone incidents.

Brian O' Hanlon

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