Friday, December 29, 2006

World Wide Wait in Malaysia

Located on the old site of the Royal Turf Club in the heart of the capital city, the Kuala Lumpur City Centre (KLCC) is truly a spectacular sight. Here, the 88-storey Petronas Twin Towers, the world's tallest twin structures, soars to a dizzying height of 452 metres. Inspired by the Five Pillars of Islam, this gleaming mega-structure was designed by Argentinean-American architect Cesar Pelli. Below lies a beautifully landscaped fountain park designed by prominent Brazilian landscape architect Roberto Burle Marx. KLCC is also home to the world-class Kuala Lumpur Convention Centre, Suria Shopping Centre and Petronas Philharmonic Hall. On the left side of the image is the KL Tower, which provides a 360° panoramic view of the city at night from its revolving restaurant.

In school I learned of the several efforts to successfully lay a trans-Atlantic cable between Valentia Island, off the coast of Kerry in southwest Ireland, and Newfoundland, Canada, that led to the opening of a permanent communications link between Europe and North America, from July 1866.

News that an earthquake off Taiwan on Tuesday (St. Stephen’s Day) had severed key communications cables may have surprised some people that old-fashioned cable is still an important feature of today’s digital age.

Malaysia-based Internet users including myself, woke on Wednesday morning to a crawl on the so-called information superhighway. Local access to Internet services and websites hosted overseas came to a practical standstill after international links were disrupted by the earthquake that struck southern Taiwan on Tuesday night.

The earthquake damaged submarine cables that form part of the region-wide Asia Pacific Cable Network 2 (APCN 2), disrupting voice and Internet communications over much of Asia.

APCN 2 is a 19,000km-long fibre-optic cable network linking Japan, South Korea, China, Malaysia, Singapore, the United States, Europe and Australia. The network has been up since October 2002 and is jointly operated by 26 Asian telecommunications carriers.

Malaysia's The Star newspaper, reported that one group that had been badly hit by the disruption of Internet access was the blogger community.

Blogger Joyce Wong said she only managed to upload a few sentences onto her blog. "It is really getting to me because I have all my information and contacts online and I cannot get my work done,” said Wong, who is known as KinkyBlueFairy online.

For radio deejay cum music producer Johan Farid Khairuddin, the inability to post his blog meant that he has been disconnected from his fans.

“I blog very frequently – every five minutes if I may say so – and this breakdown has affected me emotionally as I am unable to interact with others,” said the 26-year-old.

Student Adrian Teh, 22, who blogs and reads his friends' posts regularly, said he felt hopeless.
Tech and gadgets blogger Albert Ng said he was not affected by the disruption because his weblog was in a local server.

However, the newspaper reported that he has had difficulties going to his friends' blogs as well as international e-mail sites.

Noor Faridah Zulkiflie was planning to revert to paper and pen since she was unable to post her blogs online.

“I feel wretched now because I have lots of pent-up feelings but unfortunately cannot write about them,” said the 22-year-old student.

Life can be tough and the rerouting of traffic has eased the frustration for Malaysians. So we have access to the safety valve again to release all those pent-up feelings!!

Happy New Year!!

Wednesday, December 20, 2006

Bertie Ahern's " patriot to his fingertips" and the legacy of a kleptocracy

In June 2006, Taoiseach Bertie Ahern gave a ringing peroration at the graveside of Charles Haughey and he indeed owed his deceased predecessor a great deal and knew more than most that his fellow Dublin northsider had been on the make, on a gigantic scale.

Political courage is a rare commodity and not to put a tooth in it, Ahern backed the right horse and won hugely.

"If the definition of a patriot is someone who devotes all their energy to the betterment of their country," Ahern said: "Charles Haughey was a patriot to his fingertips."

"Despite the controversy, even political opponents acknowledge that he had indeed done the State some service," he said. "The ultimate judgement of history will be positive."

Ahern spoke of how he remembered as a teenager canvassing for "Charlie" at election. "He was one of us, he was larger than life," he said.

The Taoiseach compared Haughey to the poet WB Yeats whom he said was a great but complex man, "impatient for the progress of our country".

When Yeats wrote "I am of Ireland", Ahern said he could not have penned a better description of Haughey.

He described the former leader as a "consummate politician, who exhibited grace under pressure, incisive mind and superb parliamentary skills proud identity with all of Ireland and a profound respect in victory and defeat for our democratic institutions."

In his report, Mr. Justice Michael Moriarty said that Haughey "lived a lifestyle and incurred expenditure vastly beyond the scale" of his income and it concludes that Haughey "devalued the quality of a modern democracy".

"As one of Mr Haughey's successors I want to acknowledge that he left a huge legacy of lasting achievement that this generation has based its own progress upon," Ahern said.

There were undoubtedly achievements as there were in the case of Richard Nixon.

Bertie Ahern was a bookkeeper in the Mater Hospital before entering politics and presumably it wasn't a place where blank cheques were floating about.

Bertie Ahern certainly knew aspects of Haughey that were unknown by many others including what Justice Moriarity termed the "elements of fear and domination engendered by him in individuals in both the private and public sectors."

Ahern said last June that Haughey would ruefully acknowledge to him that he enjoyed the proverbial nine lives.

"Charlie, Boss the last of those lives has now been extinguished. Today the most agile and instinctive of our political leaders is still," the current Taoiseach concluded.

Boss, indeed.

The Taoiseach says Haughey had a profound respect for our democracy while Justice Moriarty said that he devalued it.


Comment: All the King's Men - The Ireland that made Charles Haughey

Tuesday, December 19, 2006

Cúpla focail and more hypocrisy on the Irish language

Beautiful Gougane Barra in the Cork Gaeltacht, near the source of the River Lee (Photo: )

The Government today set out 13 key objectives in respect of the Irish language as it is due to become the 21st official working language of the European Union on January 1st. It is unfortunate that the revival of the language since independence has been a failed effort by both leaders and people. Apart from former teachers such as Opposition leader Enda Kenny, most members of our national parliament cannot speak the language and it is rarely used by members. So what the Government served up today is another cúpla focail and lots more hypocrisy.

The 13 objectives include;

  • Full implementation of the Official Languages Act and facilitation of the public's right to use Irish in dealings with the State.
  • Provision of a wide range of services to parents who wish to raise their children through Irish.
  • Continuous development of high-quality broadcast services through Irish, especially on TG4, RTÉ and Raidió na Gaeltachta.
  • Special support for the Gaeltacht as an Irish-speaking area.
  • Continuation of teaching of Irish as an obligatory subject from primary to Leaving Cert level while fostering oral and written competence.
  • Enhanced investment in professional development and ongoing support for teachers as well as in provision of textbooks and resources and in support for innovative approaches to teaching and learning.
  • Further development of all-Irish secondary education.
Speaking today, Taoiseach Bertie Ahern said that the statement marks "a major evolution" in national policy on the Irish language. A major evolution - yes if more lip service will serve any purpose. "The aim of 20th-century Government policies was to reinstate Irish as the main language spoken by the people, but the Government now plan to focus firmly on the practical development of a bilingual society where as many people as possible use both Irish and English with equal ease," Ahern said. Decades of lip-service and payments of grants has left the language in a parlous state. It is simply laughable that the Irish language would be used at EU ministerial level when most Irish politicians rarely speak the language apart from a few sentences if at all, at the start of a speech. Irish language content is also rare in the main Irish daily newspapers and it has never been a requirement to use Irish when communicating with public officials. So while this EU measure could be recognised as a belated recognition of an important part of Irish culture, it is sadly another example of what is wrong with the EU. Ahern may not even be able to speak Irish at an EU meeting, never mind one in Dublin but he welcomes a measure that at least until Ireland becomes a net payer to the EU Budget, will be paid in full by German, Dutch and British taxpayers.

Cynicism comes cheap, so here are views other than mine - the words of an official report that was presented to the Irish Government in 2002: The establishment of this Commission by the Government in the Spring of 2000 was a ray of hope to the people and friends of the Gaeltacht, people who for years have been concerned about the obvious decline and gradual extinction of the Gaeltacht. This Gaeltacht is all that remains of the large Irish-speaking community which was dominant in this country for hundreds of years, but has declined continuously in recent centuries. While the first major action taken by the Free State Government on behalf of the Gaeltacht was the establishment of the first Gaeltacht Commission in 1925, the proposals made by the Commission were not acted upon however, nor were the appropriate resources made available which would have been required in order to do so. Seventy-Seven Years Later... Taking into account the historical erosion of the Gaeltacht and the further decline in our own lifetime, the Commission is of the view that it will not be possible to maintain the Gaeltacht as an area in which Irish remains a community language unless a fundamental change occurs in the way Irish is treated and in the status of Irish in the rest of the country. Despite the progress made by individuals and language organisations it is not evident that any Government has the strategy or understanding to advance efforts on behalf of the language.

Although the Gaeltacht is the primary concern of this Commission, the issue of the Gaeltacht cannot be separated from the issue of the Irish language in the rest of the country. The Commission is not aware of any Government policy in which the Government’s view of the Irish language in contemporary society is articulated, nor of any vision that demonstrates that the Government has discussed the role of the Irish language in the life of the country. Neither does there exist any action plan containing measurable targets. The Commission is not aware of any such Government policy or plan. The Commission is of the view that the State is out of step with emerging world views on the importance of linguistic and cultural diversity. It is now recognised that every spoken language is a valuable resource which provides us with a particular world view – a view which is shaped by the past, which is precious and which stimulates creativity. The death of a language is recognised as an act of negligence which represents a world tragedy. If Irish is allowed to die, one of oldest languages in Europe and Ireland’s native language will be lost. The revitalization of Irish and all that goes with it is the sole responsibility of this country. If its just the intention to keep the language as a national monument, for use on ceremonial occasions and with the ‘cúpla focal’ being spoken from time to time, it is unlikely that Gaeltacht people will have much interest in retaining the language. It is as part of a national policy for the revival of Irish as a national language that the Commission feels that progress can best be achieved. The Commission also believes that a unique opportunity now exists to undertake this work in view of the Good Friday Agreement.

The aspirations that were served up today could only inspire a fool to believe that they will have any impact on the slow death of the Irish language.

Friday, December 15, 2006

Whited sepulchres of hypocritical moralism

De Wallen, also known as Walletjes or Rosse Buurt, is the largest and best-known red-light district in Amsterdam, a major tourist attraction. It is a network of alleys containing several hundred tiny one-room apartments rented by female prostitutes who offer their services from behind a window.

Many of us Irish like to believe that we're open minded and progressive but whether it's prostitution, illegal drugs or same-sex partnerships, there is little fear that we would make any progressive moves until the rest of Europe has travelled far ahead of us.

This week in Ireland and the UK , all three issues received extensive attention.

In 2004, the Economist wrote in an impressive editorial on prostitution, that the puritans have the whip hand not because they can prove that tough laws will make life better for women, but because they have convinced governments that prostitution is intolerable by its very nature. What has tipped the balance is the globalisation of the sex business.

Today, the Financial Times writes that morality is choosing to live one's life by a code of behaviour. Moralism is inflicting a puritanical code upon others.

Moralism kills. It leads to making prostitution and the use of drugs illegal. That brings ghastly results. Now, when the murders of five prostitutes in Suffolk are gripping the attention of the UK, all must see just how ghastly these results can occasionally be.

Finding prostitution abhorrent is quite understandable. It is equally understandable that people find the sale of dangerous drugs abhorrent. But policy should focus on consequences, not such emotions. Prohibition merely drives these practices further underground, thereby making bad worse.

In the UK, prostitution is not illegal. The position is far worse in the US, where it is illegal in all states, except Nevada. But even in the UK, soliciting and advertising by prostitutes, as well as "kerb-crawling" and, most important, living off the earnings of prostitutes are all illegal.

A brief glimmer of sanity broke out, with the publication of a thoroughly sensible review, Paying the Price, by the often unjustly condemned Home Office in July 2004. It did not take long for the UK's tabloid press, that whited sepulchre of hypocritical moralism, to douse the light once more.

Nothing will now be done to make the business safer for those engaged in it. That can only happen if it is possible to establish businesses, with secure premises, with proper security and medical checks. In other words, it can only happen with the legalisation of brothels. Instead, action against kerb-crawling is being intensified and the idea of establishing legal red-light areas has been abandoned.

This will merely drive the business yet further underground, where it will remain intertwined with another business driven into the darkness: drugs. Paying the Price estimated there were 80,000 people working in the sex industry in Britain, with 95 per cent of the women involved dependent on drugs. A close link exists between illegal drugs and prostitution, with pimps often suppliers of both.

Unable to work within properly regulated businesses, prostitutes are far more vulnerable to violent customers. Nobody can now try to ensure the safety of prostitutes even, as we can see, from the deranged attacks of a serial killer. Public indifference to the fate of these women explains, but cannot excuse, this immoral policy.

We will never eliminate either prostitution or the demand for drugs. But we can minimise the damage done by these twin evils: prostitutes must have the opportunity to work in safe and secure environments; addicts must be allowed safe and secure access, through the health service, to the drugs they crave. This is not to condone vice. It is to recognise the limits imposed by human frailty. Those who persist in peddling moralism instead have blood on their hands.

The Economist wrote two years ago that it is not surprising that many of the rich world's prostitutes are foreigners. Immigrants have a particularly hard time finding jobs that pay well; local language skills are not prized in the sex trade; prostitutes often prefer to work outside their home town. But the free movement of labour is as controversial in the sex trade as in any other business. Wherever they work, foreign prostitutes are accused of driving down prices, touting “extra” services and consorting with organised criminal pimps who are often foreigners, too. The fact that a very small proportion of women are trafficked—forced into prostitution against their will—has been used to discredit all foreigners in the trade, and by extension (since many sellers of sex are indeed foreign) all prostitutes.

Abolitionists make three arguments. From the right comes the argument that the sex trade is plain wrong, and that, by condoning it, society demeans itself. Liberals (such as this newspaper) who believe that what consenting adults do in private is their own business reject that line.

From the left comes the argument that all prostitutes are victims. Its proponents cite studies that show high rates of sexual abuse and drug taking among employees. To which there are two answers. First, those studies are biased: they tend to be carried out by staff at drop-in centres and by the police, who tend to see the most troubled streetwalkers. Taking their clients as representative of all prostitutes is like assessing the state of marriage by sampling shelters for battered women. Second, the association between prostitution and drug addiction does not mean that one causes the other: drug addicts, like others, may go into prostitution just because it's a good way of making a decent living if you can't think too clearly.

A third, more plausible, argument focuses on the association between prostitution and all sorts of other nastinesses, such as drug addiction, organised crime, trafficking and underage sex. To encourage prostitution, goes the line, is to encourage those other undesirables; to crack down on prostitution is to discourage them.

Brothels with brands

Plausible, but wrong. Criminalisation forces prostitution into the underworld. Legalisation would bring it into the open, where abuses such as trafficking and under-age prostitution can be more easily tackled. Brothels would develop reputations worth protecting. Access to health care would improve—an urgent need, given that so many prostitutes come from diseased parts of the world. Abuses such as child or forced prostitution should be treated as the crimes they are, and not discussed as though they were simply extreme forms of the sex trade, which is how opponents of prostitution and, recently, the governments of Britain and America have described them.

Puritans argue that where laws have been liberalised—in, for instance, the Netherlands, Germany and Australia—the new regimes have not lived up to claims that they would wipe out pimping and sever the links between prostitution and organised crime. Certainly, those links persist; but that's because, thanks to concessions to the opponents of liberalisation, the changes did not go far enough. Prostitutes were made to register, which many understandably didn't want to do. Not surprisingly, illicit brothels continued to thrive.

If those quasi-liberal experiments have not lived up to their proponents' expectations, they have also failed to fulfil their detractors' greatest fears. They do not seem to have led to outbreaks of disease or under-age sex, nor to a proliferation of street prostitution, nor to a wider collapse in local morals.

Which brings us back to that discreet transaction between two people in private. If there's no evidence that it harms others, then the state should let them get on with it. People should be allowed to buy and sell whatever they like, including their own bodies. Prostitution may be a grubby business, but it's not the government's.

...back to Ireland

This week, the High Court declared that same-sex marriage is incompatible with the Constitution but there is no rush to strengthen partnership rights such as in relation to inheritance, which would surely provide the rights that gay people demand.

As to illegal drugs and prostitution, there is no public debate on moving on from the status quo.

That would surely require political courage and vision - two very scarce commodities.

Monday, December 11, 2006

Fair Deal, Irish Nursing Homes and Harry Truman

There is surely an irony in the Government’s use of the term Fair Deal - President Harry Truman’s name for his political programme – for its new nursing home proposals.

President Truman had a sign on his desk that read – The Buck Stops Here. It would surely merit a cross on the mantlepiece if the Government adopted that principle too.

When has a Government Minister or senior civil servant last taken responsibility for incompetence or negligence in delivering public services and contracts?

There are about 1.7 million subscribers to health insurance to cover private health care because of the lack of confidence/trust in the public health service.

On the other hand, there is a greater trust in public nursing homes than private nursing homes that are largely viewed as giving primacy to moneymaking.

As the role of the religious withdrew from nursing home services, the Government response was to provide tax incentives similar to one available for car parks and holiday homes, to encourage the building of nursing homes.

So people with significant income to shield from tax who never had any professional involvement in a health service, got their accountants to produce business plans and hired a matron to run the nursing home.

Should we then be surprised that many of these nursing homes have been poorly run?

Compounding the issue, was the typical lack of "software" in the system i.e. no credible inspectorate.

As to the proposals to claw back up to 15% from the sale of a house on death, with 900,000 Irish workers without a pension, the equity in a house is an important cushion that wil now be reduced in potential for a significant segment of the population.

Friday, December 08, 2006

Asians opt for global phone brands to show-off about how well they're doing even if their earnings are relatively low

Being reasonably familiar with life in the Philippines and Malaysia for family and other reasons, the results of a survey on the importance of brands in Asia is no surprise. At least some of us Irish tend to be more subtle by comparison.

In Asia, it's not uncommon to see people with their mobile phones suspended from their necks to show others that thay can afford Nokia handsets. Borrowing more for a car than a house is also not unusual.

I recall seeing a cringe-inducing Seiko watch advertisement in the Singapore Metro earlier this year, with the slogan: It's Your Watch That Says Most About Who You Are.

On Thursday, US tech research IDC published a multiclient study and survey of mobile phone and smartphone subscribers across five countries, which reveals that top global brands are in demand not only in developed countries, such as the U.S., U.K., and Germany, but also in emerging countries such as India and China. The relative influence of brand on product choice (especially in China and India) suggests that many people seek out global brands and the prestige that they carry.

Logic dictates that one would expect to find the proliferation of relatively inexpensive devices and brands in developing countries, but IDC's survey reveals quite the opposite phenomena. Chinese subscribers look more at the brand and style (top two purchase criteria) rather than being concerned with the underlying technology and product features.

In India high-end products like the Nokia Communicator 9500 do well precisely because they show off how wealthy and successful an individual is, and users tend to be loyal to the smartphone brands they carry. IDC's survey revealed that 69% of respondents in India were likely to recommend their smartphone brand to others, higher than other countries surveyed, except for the U.S.

"When you look around the world there is a growing prevalence of premium brands in emerging markets among populations with substantially lower income levels," said Randy Giusto, group vice president for IDC's Mobility, Computing and Consumer Markets research. "Brands such as Nokia, for example, dominate the Indian and Chinese markets from a market share perspective and are much sought after because of the image that they project."

Thursday, December 07, 2006

PM calls Finance Minister "a perfect ass" for leaking Budget

Bertie Ahern (right) with Jean-Claude Juncker, Prime Minister of Luxembourg

In 1947 British Chancellor Hugh Dalton was forced to resign after leaking details of his Budget to a reporter. Details of his Budget appeared in the London Evening Star before he had finished addressing the Commons and he resigned the following day.

The Prime Minister Clement Attlee said Dalton had been "a perfect ass".

Times have indeed changed and last weekend, one or more Irish Ministers leaked themselves or authorised leaks to journalists of key aspects of the Budget that was presented on Wednesday.

In today's age of spin and media manipulation, there is no gaisce in it.

The reason why I comment on it is because when Governments are on the other end of leaks, the normal response is synthetic indignation and posturing.

Just two months ago when the Irish Times published leaked confidential information that had been provided by Taoiseach Bertie Ahern to a corruption planning tribunal, in respect of financial support that had been provided to him when he was Minister for Finance in 1993, related to a 1987 marital separation, Ahern himself and colleagues fulminated against the leaker as if it he had done something that was so reprehensible, in contrast with how they would behave.

PD leader Michael McDowell even justified his decision to support Ahern partly on the basis that to do otherwise would be to reward the leaker.

Jacob Weisberg, editor of Slate, writes in today's FT: all of a sudden, the Bush White House is leaking like, well, every other White House. Aides are gabbing to reporters and passing along classified documents for the same reasons aides always do – to build themselves up, to show they are not to blame for mistakes and to get the president’s attention. Though the leaks are anonymous, it is clear that various officials are trying to extricate themselves from the train wreck and advance their post-Bush careers.

For the press, an administration without leaks has been like a very long Christmas party without alcohol. Covering an administration where people do not gab leaves little operational space between stenography and commentary. After six dry years, White House reporters feel giddy, vindicated and perhaps a bit vindictive.

Weisberg writes that: some level of indiscretion is also essential to healthy relations between the presidency and the press. In reality, the interchange between reporters and “sources” is more a two-way street than what is often depicted. Officials talk to journalists to get as well as give information, including about how major news organisations think and operate. And over time, if you do not feed journalists, journalists are sure to feed on you – see under Rumsfeld, Donald.

So, great Irish ministers on high, spare us the manufactured outrage from your white chargers, when the leak traffic is on a contraflow.

Tuesday, December 05, 2006

A story like Xerox can spoil the Budget Party

Irish tax revenues are expected to rise by 16% in 2006 and the Exchequer is awash with cash as confirmed by the detail on the public finances that was published on Tuesday.

The reliance on a property boom that provides 17% of annual tax revenues, up from 4% a decade ago plus tax revenues from sectors benefiting from property related spending that may well put the revenue reliance in the range 25%-30%, is a clear vulnerability.

The other pillar of our prosperity is US investment and today, one of our big US employers Xerox, confirmed that it is reviewing the future of its 1,300 person workforce at Ballycoolin, near Blanchardsown, Dublin.

So as some marvel at the unprecedented flows of funds into the Exchequer, there is no urgency to undertake reforms in governance structures and removing the privileges of vested interests. It's a depressing situation and there cannot be much hope of change.

The following is from a 2006 OECD paper:

A combination of entry restrictions and price regulations has resulted in an uncompetitive, distorted and expensive retail pharmacy sector. Ireland is the fourth most expensive country in the euro area for medicines (Department of Health, 2003). Pharmaceutical prices at all levels of the distribution chain are set by government-industry agreement. Wholesale prices are set by comparing UK prices and an average of five other countries, taking the lower of the two.

The retail margin depends on who is paying. For medical card holders, the government fully reimburses the patient and pays a fixed disbursement fee of around 3 per item to the retailer; other prescriptions and non-prescription medicines have a 50% markup. Overall, the retail margin is around 33%, which is one of the highest in the European Union (Purcell, 2004).

Moreover, unlike in many other countries, pharmacists are not permitted to reduce costs to the consumer and insurer by substituting a cheaper generic equivalent.

The two pharmacists in the Oireachtas - Junior Minister Tim O'Malley and Senator John Minihan are members of the Progressive Democrats.

Remember in October, when competition in aviation became an issue of admiration or lip-service by politicians and trade unionists?

Why would politicians take on vested interests when they are part of the system themselves?

Saturday, December 02, 2006

Who cleans up at Goldman Sachs?

Henry "Hank" Paulson responds to President George W. Bush Tuesday, May 30, 2006, after the President announced his nomination of the Chairman and Chief Executive Officer of the Goldman Sachs Group to succeed Treasury Secretary John Snow, who announced his resignation. White House photo by Shealah Craighead

Who cleans up

  • Lowest-paid City cleaners: £5.35 an hour, £11,128 a year
  • Average ISS cleaner: £6 an hour, £12,530 a year
  • London living wage £7.05 an hour- rate approved by unions/London Mayor, £14,664 a year
  • Average Goldman Sachs pay in London £134,875; average bonus £205,332 - - Source T&G and Bloomberg

Earlier this week, 30 cleaners who are members of  the U.K.'s Transport & General Workers Union (T&G) occupied the lobby area of Goldman Sachs Group's London headquarters on Fleet Street, seeking improved employment conditions at a company part-owned by the top US investment bank.

The cleaners were reported to have chanted “Goldman sucks” and waved placards as police sealed off the area and stopped anyone leaving for about two hours.

The cleaners who are employed by Copenhagen-based ISS and earn between £5.35 and £7.20 pounds an hour according to the  T&G, don't get sick pay or pensions. Goldman itself, isn't among the companies in London serviced by ISS cleaners.

Bloomberg News reports that Goldman and the Swedish Wallenberg family's EQT Partners, bought ISS in April 2005 for about $3.8 billion. The purchase more than doubled ISS's debt load to $3.9 billion, dropping its credit ratings to junk status. The company said in August that first- half profit fell 9.7 percent to 430 million Danish kroner ($76 million) on higher interest expenses.

Goldman set aside $13.9 billion for salaries, bonuses and benefits for its own 25,647 employees through the first three quarters of the year, or about $542,000 per person on a global basis.

That already tops last year's full-year record.

The New York-based firm, which is scheduled to report fiscal full-year profit on Dec. 12, is expected to say it earned $8.8 billion on revenue exceeding $36 billion, according to the average estimate of 18 analysts surveyed by Thomson Financial.

Last month Finfacts reported that tensions are running high in London, amid the rainmakers and shooting stars of the City as bosses at some of the world's biggest investment banks decide who should pocket multi-million dollar bonuses. More than 4,000 workers are likely to receive bonuses of at least £1m, according to some predictions.

The most profitable investment bank in Wall Street history

One of the world's top moneymakers hasn't got such general media attention in London, since a fraud trial was told in 2004, how a personal assistant at the Fleet Street HQ was able to steal up to £4 million from the bank accounts of Goldman bankers Scott Mead, Jennifer Moses and her husband Ron Beller.

Mead had made about around £50m when Goldman Sachs floated in 1999 and masterminded the infamous £100 billion takeover of German company Mannesmann by Vodafone in 2000.

The bankers were so busy and rich that the PA was able to pilfer from their accounts for several years.

``We're saying to Goldman that they can't wash their hands of the way the company treats its cleaners,'' a T&G spokesperson said, adding that the group staged the sit-in after picketing and talks with ISS didn't resolve the workers' concerns.

``We take our responsibilities as a shareholder of any company very seriously, and we support responsible union representation and the right for people to earn a living wage,'' said Lucas van Praag, a Goldman spokesman. ``The management of companies that we're involved with know this, but it is of course their responsibility to negotiate issues such as pay.''

Power Relations and Modern Marie Antoinettes

The huge gulf in earnings between those termed Masters of the Universe in Tom Wolfe's Bonfire of the Vanities cannot be simply rationalised as a working of the market.

While the renowned advocate of markets Adam Smith, emphasised the motivating force of self-interest and gains from free trade, he also viewed freedom in a broader sense than economic freedom and championed the disadvantaged.

Smith was concerned about the encroachment of government on economic activity, but he was sometimes tolerant of government intervention, "especially when the object is to reduce poverty." Smith argued, "When the regulation, therefore, is in support of the workman, it is always just and equitable; but it is sometimes otherwise when in favour of the masters." He saw a conspiracy on the part of employers "always and everywhere" to keep
wages as low as possible.

US economist Robert Gordon estimates that real median earnings per hour in the US have hardly increased since 1966.

He says that the top 10% have captured 50% of the income gains in the past forty years. The top 1% gained more than all the bottom 50%.

This week, the New York Times gave attention to the Living Wage Action Coalition, a collective of students and recent grads from campuses across the US that share experiences from their living wage and student-worker solidarity campaigns with new and existing campus campaigns.

The NYT wrote that when Mary Hampton landed a housekeeping job at Vanderbilt University in 2004, she looked forward to the boost that the steady, full-time work and benefits would give her and her two young daughters.

Instead, she says she now makes $7.92 an hour and brings home less than she did in factory and warehouse jobs. She moved to a shelter for the homeless about seven months ago when her daughters’ father stopped paying child support.

The fragile economic state of some of Vanderbilt’s union employees like
Hampton and the contrast with university spending elsewhere, like the $6 million renovation of the chancellor’s 20,000-square-foot house, has become a point of contention between the administration and a loose coalition of labor, students and community members.

A “living wage” campaign, which is picking up steam alongside contract negotiations between Hampton’s union and the university, is hardly unusual. There are more than 35 campus-based living-wage campaigns in progress nationwide, according to the Living Wage Action Coalition in Washington.

The newspaper says that what makes Vanderbilt’s situation unusual is that Vanderbilt’s chancellor, E. Gordon Gee, is one of the highest-paid university executives in the nation, giving the union and its supporters added leverage in their bid for higher pay, said Paul F. Clark, a professor of labor studies and employment relations at Penn State.

“It gives them a significant opportunity to generate community support, to get attention to embarrass the university,” Professor Clark said. “I would be surprised if they didn’t take advantage of that.”

The coalition calculates that a living wage for unskilled workers in the area would be $10.18 an hour.

A spokesman for Vanderbilt, Michael J. Schoenfeld, said it paid market wages, as well as generous benefits.

“Vanderbilt is committed to and does pay market-competitive wages for all of our job positions,” Schoenfeld said. “In addition, the university offers what we believe is the most comprehensive package of benefits to all employees, regardless of their job classification.”

In the past six years, Gee has labored to burnish Vanderbilt’s reputation and reshape the university into a prestigious research institution of national stature.

Chancellor Gee earns almost $1.2 million a year, according to recently
released figures on executive pay at universities, making him the third highest paid university president in the nation and like the fabled Queen of France Marie Antoinette, if the low ranks of his staff have no bread, they can find cake!

The NYT says that the campaign for Vanderbilt workers occurs at an awkward time for the university. Gee has had to respond to what some board members saw as runaway spending. He has said spending on the chancellor’s house, for example, was necessary, but he nonetheless agreed to tighter scrutiny of future spending.

Cliff Buntin, 44, who has worked as a Vanderbilt housekeeper for five years, said some of that money should be spent on employees.

“How can you be a leader if you let workers live in poverty?” Buntin said.

Schoenfeld said it was simplistic to argue that university spending could be shifted to pay higher wages.

“Any large, complex university, any large institution, any large company,” he said, “is going to have to make an almost infinite number of decisions about how to expend resources and what is consistent with the mission.”

The issue of the huge earnings gap is not solely of relevance to those at the bottom of what President Franklin D. Roosevelt termed the "economic pyramid."

Princeton university professor and New York Times columnist Paul Krugman, wrote in a column titled Graduates and Oligarchs in February 2006:

Ben Bernanke's maiden Congressional testimony as chairman of the Federal Reserve was, everyone agrees, superb. He didn't put a foot wrong on monetary or fiscal policy.

But Mr. Bernanke did stumble at one point. Responding to a question from Representative Barney Frank about income inequality, he declared that "the most important factor" in rising inequality "is the rising skill premium, the increased return to education."

That's a fundamental misreading of what's happening to American society. What we're seeing isn't the rise of a fairly broad class of knowledge workers. Instead, we're seeing the rise of a narrow oligarchy: income and wealth are becoming increasingly concentrated in the hands of a small, privileged elite.

I think of Mr. Bernanke's position, which one hears all the time, as the 80-20 fallacy. It's the notion that the winners in our increasingly unequal society are a fairly large group - that the 20 percent or so of American workers who have the skills to take advantage of new technology and globalization are pulling away from the 80 percent who don't have these skills.

The truth is quite different. Highly educated workers have done better than those with less education, but a college degree has hardly been a ticket to big income gains. The 2006 Economic Report of the President tells us that the real earnings of college graduates actually fell more than 5 percent between 2000 and 2004. Over the longer stretch from 1975 to 2004 the average earnings of college graduates rose, but by less than 1 percent per year.

Krugman asks why would someone as smart and well informed as Bernanke get the nature of growing inequality wrong?

Because the fallacy he fell into tends to dominate polite discussion about income trends, not because it's true, but because it's comforting. The notion that it's all about returns to education suggests that nobody is to blame for rising inequality, that it's just a case of supply and demand at work. And it also suggests that the way to mitigate inequality is to improve our educational system - and better education is a value to which just about every politician in America pays at least lip service.

The idea that we have a rising oligarchy is much more disturbing. It suggests that the growth of inequality may have as much to do with power relations as it does with market forces. Unfortunately, that's the real story.

Should we be worried about the increasingly oligarchic nature of American society? Yes, and not just because a rising economic tide has failed to lift most boats. Both history and modern experience tell us that highly unequal societies also tend to be highly corrupt. There's an arrow of causation that runs from diverging income trends to Jack Abramoff and the K Street project.

And I'm with Alan Greenspan, who - surprisingly, given his libertarian roots - has repeatedly warned that growing inequality poses a threat to "democratic society."

It may take some time before we muster the political will to counter that threat. But the first step toward doing something about inequality is to abandon the 80-20 fallacy. It's time to face up to the fact that rising inequality is driven by the giant income gains of a tiny elite, not the modest gains of college graduates.

Friday, December 01, 2006

Irish Venture Capital Investment in 2006 will amount to 4% of Investment in Commercial Property

Battersea Power Station was operational from 1937 until 1982

The acquisition of the iconic Battersea Power Station in London, by Treasury Holdings controlled REO, is just another high profile Irish property acquisition in the UK.

The largest brick building in the world has been sold for 40 times what its last owner paid for it, even though it lies derelict and undeveloped.

Victor Hwang's Oriental Property company sold the London site for £400m to Johnny Ronan and Richard Barrett, two Irish developers.

The Taiwanese Hwang family, which bought it for £10m 13 years ago, had been frustrated in its development efforts despite spending millions on advisers and consultants.

Best of luck to Treasury but beyond property, there is little of consequence happening in the Irish investment area.

CRH, the largest building materials group in the US and Ryanair, an airline of global consequence, are the only two Irish companies of international significance that the Celtic Tiger period has produced.

In the first seven months of 2006, the Dublin-based Cosgrave development family, spent more than three times on two UK shopping centres than the total of venture capital that will be invested in Irish business in 2006.

It is forecast that less than €200 million in venture capital will be invested in Irish business in 2006 - a derisory (more objective than its use by Aer Lingus) 4% of the total of €5 billion that will be invested in commercial property - principally overseas - in 2006.

Today US company Magna announced the planned closure of its plant in Kildare with the loss of 280 jobs.

Property and US investment is what underpins Irish prosperity but it is hardly a recipe for a permanent prosperity.

On Tuesday last, Micheál Martin T.D., Minister for Enterprise, Trade and Employment announced a major investment of €11m by Cavan-based Foamalite Ltd, with support from Enterprise Ireland.

Martin said that the investment will lead to the development of a purpose-built R&D facility at Foamalite’s Lough Gowna site and will lead to the creation of twenty six new jobs, including five high-value R&D roles, over the next three years.

Martin made no public comment on the loss of "high-value" jobs in Kildare.