Irish academics, pension top-ups and poor private pensions coverage

This is a response to  a post by Hugh Sheehy on an Irish Economy thread. The system appears to have some gremlins at work.

This is the issue that has been raised: Irish academics get lavish pension top-ups as private pensions struggle

@ Hugh Sheehy

Hugh,

Thanks for the link.

I had written about this issue of top-ups in 2010 when the National Pensions Reserve Fund had taken responsibility for the 'old' university pensions that had a deficit of more than €600m, and it's not surprising that some of the supporting cast on the insider stage would try and drown out dissent.

This is a graphic illustration of the Irish caste system.

While profitable overseas companies and the small number of indigenous ones were shutting down defined benefit (guaranteed payout) systems; the finance minister was levying private pension funds; the social protection minister did not know what to do with  a report from PwC, the Big 4 accounting firm, that showed fees ate up an average of 17% of a fund over a typical fund's time horizon (Enda Kenny had promised Shane Ross that he would have the issue investigated when the levy was introduced in 2011 -- Kenny is not Bill Clinton and with 3 public pensions, even it had later crossed his mind, it would have been hard to convince the typical SME worker that he feel's their pain) -- over 500 academics in the bankrupt country were getting pension top-ups.

The basis for these top-ups is dodgy and the Comptroller & Auditor General said in 2011 that the issue required investigation.

The property clause in the Constitution is usually worth a try.

However, the right of 'legitimate de facto expectation' as outlined by a university official to the C&AG a years ago is similar to the 'droit du seigneur' in that only people within an elite could claim it.

Why worry about inequality when it's found mostly in places with funny names?

It's official state policy to keep employer social security low and thus the low level of employee pensions in the private sector.

Note the contrast with the racket organised by the insiders and when Brian Cowen at the outset of the Croke Park process proposed that the link with a current incumbent's  earnings be replaced by consumer prices, the unions said it would be a dealbreaker.

Why are bankers so selfish?

Forty-four sachets of sugar in beaker of Coca-Cola!

Calls are growing for high sugar drinks to be taxed in the same way as cigarettes to curb rising obesity. Does the drinks industry's resistance echo that of the tobacco industry denial in the 1960s? BBC Newsnight's Jeremy Paxman spoke to James Quincey, president of Coca Cola Europe.

FT editor Lionel Barber previews Davos 2014

Financial Times editor Lionel Barber previews the annual World Economic Forum in Davos, Switzerland. He tells economics editor Chris Giles that growing business confidence, Middle East instability, inequality and the impact of technology will top the agenda:

'Wolf of Wall Street' prosecutor lambasts the movie

Joel Cohen on how the new movie compares to the real prosecution of fraudster Jordan Belfort.

The Indian mother-in-law and what women have never done?

Veena Venugopal, author of "The mother-in-law: The other woman in your marriage," explains to The Economist why Indian women are increasingly treading on each other's toes.

An elderly woman in north India, laughing ruefully, recalls how, after her rural wedding, it took “three days to work out which man in the new family was my husband”. Even today, some honeymooning couples take along the saas. A woman in Delhi says that, when her Bengali mother-in-law visits, she insists on sleeping in the marital bed with her son; the wife budges over, or decamps to a sofa... Last year over 8,200 women were murdered over the non-payment of a dowry (which has been legally abolished), over half of them in three northern states: Bihar, Uttar Pradesh and Madhya Pradesh. In May this year India’s Supreme Court warned of “an emotional numbness in society,” whereby daughters-in-law are kept as near slaves or attacked out of “insatiable greed”. Brothers, cousins, even the husbands themselves, sometimes carry out the attacks. But the mother-in-law is often held responsible.]

Indian mothers-in-law: Curse of the mummyji

Mary Barra's appointment to lead General Motors is a milestone for women everywhere, but here are five jobs that a woman has never held.

A changed New Year outlook for Ireland

The improved Irish economic outlook for 2014 is a welcome change from grim past New Year forecasts.

SEE Ireland: GDP or GNP? Which is the better measure of economic performance?

On the use of GDP or GNP, since companies such as Accenture, the US management consultants, began switching their headquarters to Ireland in 2009, the GNP metric has become a less reliable metric. This tax-avoidance move makes these firms become Irish companies.

John FitzGerald of the ESRI estimated that in 2012 [pdf], these companies accounted for €7.4bn in retained profits or 5.5% of GNP. Incremental undistributed earnings boosted GNP growth by 1%. These earnings also pollute the balance of payments. 

This year the big entrant is Eaton, a US power manufacturer, with retained earnings of €4bn. So the boost could be over 4%.

As for the drugs patent cliff, which has cut industrial production and goods exports, it will resume in 2005 with several expirations.

Eli Lilly is taking a big hit this month with Cymbalta, its anti-depression drug, which accounts for about a quarter of revenues.

Amgen's white blood cell booster Neupogen, which had sales to Sept 2013 of $1.1bn also lost its patent protection in December.

The biotech drugs are more difficult to clone but Amgen, the leading firm, made a defensive move last year with the acquisition of a Turkish drugs firm for $700m.

The problem for the drugs industry is that sales of some of the recent launches have disappointed because the benefits compared with existing products have not convinced players such as insurers and governments.

Pfizer's Lipitor peaked at $13bn in 2006 and sales in the period 1996-2012 amounted to $141bn.

As for biotech, most firms never make a profit and the industry posted its first profit in 40 years in 2008, only because of the performance of a small number of firms including Amgen.

Irish Economic Crash 2008: Bubble and bust home-made

Irish Times columnist Fintan O'Toole's claim  in this film that German banks provided funding for the property bubble, has been shown to be wrong. Throughout the 2000s, the interbank market in the UK was the predominant creditor to the Irish bank-ing system.

******************

There were several factors that contributed to the Irish economic crash of 2008 and the overreaction of ratings agencies and bond investors (as claimed by Swiss-based economists) came after the main event. Whatever other issues that can be invoked such as low euro interest rates, the simple fact is that the bubble and inevitable bust were home-made.

The 3-year international bailout ended on Sunday and DPFOC, a Cork-based online marketing firm, has produced an infographic on the bailout (place cursor over image and maximise).

Enda Kenny, taoiseach, addressed the nation on Sunday night and it's a case of some work done and a lot to do: Kenny and Ireland's dead cat bounce

In a time of international crisis, small economies that are dependent on foreign investors to fund most of their debt sales are particularly vulnerable as the potential buyers may have limited knowledge about such economies.

In 2007 when the US subprime crisis and credit crunch signalled that the global financial sector was in trouble, Ireland and Finland, two small economies that had experienced economic crises over the previous two decades, were in sharply different positions in respect of vulnerability to an international shock.

Ireland's net public debt was 10.5% of GDP compared with Finland's minus -72.5%; household debt was at 210% of gross disposable income compared with Finland's 110%.

Both countries sharply cut public debt in the 1990s with the benefit of rising exports.

For a number of years, Ireland with less than 1% of Europe's population was getting over a quarter of US greenfield investment; there was a huge increase in labour participation with the number of dependants that every 100 workers had to support cut from 230 to 115.

FDI (foreign direct investment) peaked as a job creator in 2000 and during the 2001-2007 property bubble fuelled by tax cuts and bizarrely a raft of property tax breaks, credit growth, low euro interest rates and a large inflow of migrants from Eastern Europe, there was NO net jobs growth in the internationally tradebale sectors.

In 2007, DKM Economic Consultants estimated that Irish construction output represented 22.6% of GNP and 19% of GDP, when measured in gross output terms. The construction to GDP ratio was the second highest proportion (after Spain) and ranged from less than 8% in Sweden to over 21% in Spain and with an average ratio of around 12% in Western Europe and less than 11% in the UK.

By mid 2008, almost two-thirds of outstanding domestic Irish private bank credit of €416bn was property-related.

Icelandic and Irish banks had the highest loan-to-deposit ratios in Europe; loan to deposit ratio rose very sharply, from 136% in January 2003 to a peak of more than 193% in October 2008. PermanentTSB peaked at 277%.

One of the factors that increased market jitters was the uncertainty about the extent of bank losses.

In February 2009, exactly 2 years after the subprime crisis broke out in the US, the Irish unit of Pricewaterhouse Coopers (PwC), the biggest of the Big 4 accounting firms, delivered a report on Anglo Irish Bank to the minister of finance.

It said:

These annual impairment charges were €2.3bn and €3.0bn respectively per annum under the two scenarios for the years ended 30 September 2009 and 2010. The two PwC impairment loss scenarios exceeded Anglo’s worst case impairment loss scenario.”

Jones Lang LaSalle valued a sample of 160 properties held as security in relation to the top 20 land & development exposures on Anglo’s books.

Anglo Irish Bank reported a loss of €12.7bn for the 15 months to the end of December 2009 - the largest loss in Irish corporate history - after charging €15bn to cover bad debts.

The main Irish story was that a massive bubble was followed by a massive bust. Ratings agencies and bond investors were among the extras in the cast of villains.

The Irish banks were not only exposed to the local property market, they enabled Irish investors to become the second biggest investors in commercial property in Europe after the Germans.

About 80% of Anglo Irish Bank’s €68bn loan book was secured against Irish and British property. Bank of Ireland’s loan book in 2008 at €135bn, had 71% or €95bn secured against property. AIB’s loan book was at €150bn, and 60% was secured against property.

Irish investment of €13.9bn was put into European property deals in 2007.  In contrast, the Irish business sector did not even get a total of €200m in venture capital investment.

VOX: Whatever happened to Ireland? - Prof Morgan Kelly 2010

Nelson Mandela remembered through a collection of photographs

Nelson Mandela who passed away December 5th 2013 is remembered through a collection of photographs in this video created with The Economist. The images were captured by South African photographer Jürgen Schadeberg who first met Nelson Mandela in December 1951. They formed a lifelong friendship and over the next 60 years.

Europe living in world increasingly dominated by Asia

Craig Willy, an EU affairs writer and a journalist with the German Press Agency (DPA), writes in a blog post that Economic development in China and other Asian countries has an impact on the role of European states in global affairs.

He argues that with the rise of Asian economies, the world is increasingly moving away from the model of free trade championed by Europe and other states in the West.

Unless Europe becomes a more cohesive actor which is capable of convincing other nations to respect Western legal and commercial principles, it will find itself forced to adapt to the East Asian development model.

Post

"Passed around like a dog"

Reuters TV: Anna Barnes was adopted from Russia when she was seven and brought to the US, only to find herself moved around the country again and again.

Irish Bailout Exit 2013: Sometimes prose is preferable to poetry

We reported on Thursday that the Irish government choreographed what it termed an "emergency Cabinet meeting" in advance of an announcement that Ireland will exit the European Union-IMF international bailout without what was termed a "precautionary credit line." The issue of a backstop in the event of an unexpected rise in bond yields in future was just spin as the European Stability Mechanism (ESM) rescue fund could be tapped at short notice while the European Central Bank has a bond-buying programme subject to conditions.

The Irish Times is impressed with underwhelming ambition:

'Coalition to press on with reform agenda to ensure market backing: Priorities after bailout exit will be water charges and legal profession'

The Competition Authority in April 2012 on reform at glacial speed, despite an economic emergency:

"In November 2010, the Government signed a Memorandum of Understanding (MoU) with the EU/IMF. The MoU included a commitment that, by the end of the third quarter of 2011, the Government must establish an independent regulator and implement the outstanding recommendations of the Competition Authority. In October 2011 the Minister for Justice, Equality and Defence, Mr. Alan Shatter, TD published the Legal Services Regulation Bill."

Dramatic?

'Analysis: Dramatic developments but bailout exit will give big boost to Government'

Stephen Collins is impressed by the spin:

'Significant signal of sovereignty restored in Dublin: Big contrast with shambolic way entering the bailout began in 2010'

The real test at a time of low growth or stagnation despite the official Irish data, is to build an economy that creates durable jobs not just add more schemes not knowing which of the existing ones work or not, while claiming credit publicly for even 20 jobs over 3 years.

Modern economies are complicated and comprise vested interests, chunks of engaged and disengaged coupled with the people who do not count, while leaders are better at winning elections than governing.

Process is boring whether in Ireland, Germany, France or Italy but it's what matters long-term.

The current health reform in the US is potentially the greatest advance since former president Theodore Roosevelt advocated national health insurance in 1912 but while the Republicans have staged about 40 votes to strike down Obamacare, the biggest threat to the reform program has come from President Obama's lack of attention to execution and over-promising.   

"We campaign in poetry, but when we’re elected we’re forced to govern in prose,” Mario Cuomo, New York governor, said in a speech at Yale University, in 1985.

Sometimes prose is preferable to poetry.

Kennedy on the limits of US and presidential power

In a television interview on his first two years in office, John Fitzgerald Kennedy, 35th president of the United States, discusses the limits of US and presidential power coupled with frustrations with Congress, that are all familiar themes today, a half century after his death.

US financial TV journalists shocked that top US bank is paying $13bn fine

The Week magazine says Wednesday night's popular US 'Daily Show' hosted by Jon Stewart focused on JPMorgan Chase, which agreed to a $13bn fine by the US government for selling dodgy mortgage-backed securities in the run-up to the 2008 financial crisis.

In 2008, the bank had acquired Bear Stearns, a failing investment bank, and Seattle based Washington Mutual, a home loans operation, with the cooperation of US regulators.

To Jon Stewart, and most of the financial press, JPMorgan's tentative settlement with the Justice Department and New York State is "a mutually negotiated compensatory agreement for outstanding liabilities related to some shady business dealings," as Stewart put it.

Stewart suggested that the talking heads on CNBC and Fox Business News should be equally pleased that somebody is finally facing some consequences for helping cause the Great Recession. Nope. To Jim Cramer, Maria Bartiromo, Charlie Gasparino, and the other stars of financial TV news, he noted, the $13bn fine is "a shakedown witch-hunt scalping jihad!" And Stewart has the video evidence to prove it.

As for JPM, an analysis by the NYT says Bear Stearns and Washington Mutual may have contributed $16bn in net income since the end of 2008.

Besides, the assets were deeply discounted when consolidated in JPM’s accounts.

Paul Collier on migration and diversity

Paul Collier is the co-director of the Centre for the Study of African Economies, Oxford University and professor of economics and public policy at the Blavatnik School of Government. He took a five year Public Service leave, 1998-2003, during which he was director of the Research Development Department of the World Bank.

The author of "Exodus" explains why debates about immigration should really be about estimating the value, and limits, of diversity in society.

A woman to head Federal Reserve 100 years after its creation

President Obama nominates Dr. Janet Yellen to succeed Ben Bernanke as chair of the Federal Reserve. Dr. Yellen has served in leadership positions at the Fed for more than a decade, including the last three years as vice chair. She also served previously as the chair of the Council of Economic Advisers, and was a leading researcher in monetary economics at Harvard and Berkeley.

If confirmed by the Senate, Dr. Yellen would be the first woman to hold the position of chair of the Federal Reserve, 100 years after the creation of the US central bank.

Janet Yellen who is 67, was born in 1946 in Brooklyn, New York. Her father was a family doctor and her mother was a teacher.

At high school, she won a place to study maths at Brown University, but switched to economics, a subject she saw as more useful.

In her first job at  Harvard in 1971, she lectured to Lawrence Summers, the former Treasury secretary, who was expected to get the nomination.

Yellen took office as vice chair of the Fed in October 2010, for a four-year term.  She is professor emeritus at the University of California at Berkeley and her husband George Akerlof is a professor of economics at Berkeley and the winner of the 2001 Nobel Prize in Economics. Their son, Dr. Robert Akerlof, is an economist at the University of Warwick in the UK.

Finfacts: The Federal Reserve and the paranoid style in American Politics - -

Irish office values could rise 20%

Financial Times Ireland correspondent Jamie Smyth speaks to Enda Luddy, head of the Dublin office of property advisers CBRE, about his prediction of up to a 20% rise in office values in the Irish capital, in a sector which still faces major problems in rural areas.

Finfacts report: Irish commercial property returns rose in Q2 2013; Highest in almost six years

Irish tax haven red herring and massive profit shifting

Feargal O'Rourke, head of tax at the Irish unit of PricewaterhouseCoopers (PwC), the Big 4 accounting firm, writes in The Irish Times that "we need to be a lot less supine in our defence of the Irish tax system so that the next time the 'tax haven' story rears its head, we’re much quicker to shoot it down."

He of course is in tune with the official line: the tax system is transparent and he does not acknowledge that there is any profit shifting. The data suggests that it's on a massive scale.

This year Microsoft was declared Ireland's biggest exporter with an annual jump of 37% in revenues -- this of course did not reflect activity in Ireland because when a resident of Madrid or Athens buys a Microsoft product, it's booked in Dublin as an Irish sale.

The issue of whether or not Ireland is a tax haven or not in accordance with a particular definition, is a red herring. Only a fool would argue that there is no evidence that Ireland or for example Switzerland, do not engage in tax haven activities.

******************

This is my comment on The Irish Times website:

This is the certitude of a man with a strong professional interest to defend his biggest clients but who appears to be oblivious to the shifting sands under his feet.

The arcane debate on the definition of 'tax haven' enables the defenders of the status quo to avoid dealing with the truth.

All the developed countries are members of the OECD and among them, neither Ireland, Netherlands, Luxembourg, Switzerland, the UK (with responsibility for 10 island tax havens, known as Crown Dependencies and Overseas Territories) and the US (in Delaware it’s easy to set up shell companies with no questions asked and 1209 N. Orange Street, Wilmington, Delaware is the legal address of companies such as Apple, Bank of America, General Electric, Google, among up about 285,000 other corporations), meet their definition of tax haven -- and for good reason.

All view it as a pejorative term and in 2009 when President Obama termed the Netherlands a tax haven, the Dutch government protested and the Treasury Department adjusted documentation to please them.

Bloomberg reported last January that multinational companies routed €10.2tn in 2010 through 14,300 Dutch “special financial units,” according to the Dutch Central Bank. Such units often only exist on paper, as is allowed by law.

The Dutch foreign direct investment flows make Cyprus look like the corner shop and in recent weeks, the Dutch government announced measures to combat tax haven activities including the use of letterbox companies by overseas tax residents.

The Financial Times reported last April:

The Netherlands has 23,000 such letterbox companies, managed by 176 licensed trust firms. These companies attract huge flows of money, making €8tn worth of transactions in 2011 – 13 times the country’s gross domestic product.

It is not just financial letterbox companies that realise the tax benefits of the Netherlands. The Rolling Stones and U2 both have companies in the same 17th-century Amsterdam canal house, which they list as the owners of their intellectual property, taking advantage of the lack of Dutch withholding taxes on royalties."

So the Netherlands isn't a tax haven?

Last May after the US Senate's report on Apple's use of what were termed 'stateless' Irish companies, Ambassador Michael Collins sent a letter to Capitol Hill on behalf of the Irish government, stating that Ireland wasn't a tax haven.

Senator Carl Levin and Senator John McCain, responded to the Irish letter:

Most reasonable people would agree that negotiating special tax arrangements that allow companies to pay little or no income tax meets a common-sense definition of a tax haven."

So the key focus should be on tax haven activities and all but fools and the self-interested would deny that for example Switzerland is in this boat.

The OECD in 1998 defined the following features of tax havens: no or low taxes, lack of effective exchange of information, lack of transparency, and no requirement of substantial activity ('Harmful Tax Competition: An Emerging Global Issue').

However, Dutch letter box companies can operate within this definition and the Eaton Corporation with over 100,000 staff, can move its headquarters from the US to Ireland to avail of the low tax rate, and effectively become an Irish company but with no substantial activity in Ireland.

The taoiseach and ministers have been using the term 'transparent' about the tax system in recent months but the claim is false.

Following a Wall Street Journal report in 2005 that two of Ireland's biggest companies by revenues were virtual companies operating from the office of a Dublin law firm, their owner Microsoft was advised to convert them to unlimited status to avoid filing accounts with the Irish Companies Office. Apple took the same route and the 2003/2004 financials were the last that were publicly available; Intel Ireland is a branch of a Cayman Island letterbox company and its Irish accounts are kept secret. Pfizer Ireland is a branch of a Dutch partnership and its Irish financials are not publicly available.

Feargal O'Rourke says:

What can be said with absolute certainty is that every company within the charge to Irish tax pays tax at 12.5% on their activities."

This is not the reality.

When Google books almost half its global revenues in Ireland, it uses intercompany charges to minimise net income before tax.  In 2010, Google Ireland's net income before tax as a ratio of revenues was 0.18% down from 0.60% in 2009.  In 2011, revenues were at €12.4bn and net income before tax was €24m. Tax on trading activities was €3m.

Google Inc.'s net income before tax ratio of revenues in 2009, 2010, 2011 was 36%, 37% and 31%.

In Microsoft's case, 1,914 employees in Ireland, Singapore and Puerto Rico from Microsoft’s total head count of 90,000, were responsible for 55% of 2011 profit before tax.

Microsoft’s Irish operating centres account for roughly 30% of the company’s global revenue, so the Irish entities contribute 30% of the cost of research and development to the global cost share pool. However, Microsoft Ireland Research (MIR) in Dublin only accounts for less than 1% of the company’s total R&D.

Feargal O'Rourke knows well that the Revenue is much more likely to audit a local firm compared with  the likes of Microsoft - - until this year the Revenue was unable to say if even one R&D tax credit claim was rejected in a decade.

US Bureau of Economic Analysis (BEA) data shows that in 2010, 98,500 Irish workers accounted for more sales than 598,000 in Germany ($324bn compared with $316bn) and German majority affiliates of US firms could only manage a net income/revenue ratio of 3% compared with 30% in Ireland.

The UK's 1.2m in US affiliates produced revenues of $682bn and net income of $87bn. Profitability per Irish worker was $970,300 and $72,500 in the UK.

Net income in Ireland jumped by 37%.

What profit shifting? What crisis?

...and Feargal O'Rourke puts his faith in transfer pricing rules! Perish the thought as our merchandise trade surplus vapourises! In services, intercompany charges are used to wipe out the surplus.

The March on Washington DC, August 28, 1963: 50 years later

The Economist: Ernest Green, raised in segregated Arkansas, remembers August 28th 1963:

Finfacts: Famous speeches and their impact from Pericles to Hillary Clinton

The Economist: Sam Leith, author of "Are You Talkin' To Me?: Rhetoric from Aristotle to Obama", reveals the multifarious influences that combined to produce one of the greatest speeches of the 20th century.

Wednesday, August 28, 2013, will mark 50 years since Dr. Martin Luther King Jr. delivered his iconic “I Have a Dream” speech at the base of the Lincoln Memorial; a moment which served to punctuate a movement that changed America. 

President Obama, the 44th president and the first black among the 43 men who have served as president of the United States, will be joined by President Jimmy Carter and President Bill Clinton, members of the King family and other civil rights leaders at the Let Freedom Ring Commemoration and Call to Action event at the Lincoln Memorial, to commemorate Dr. King’s soaring speech and the 1963 March on Washington.  

China addicted to debt

Until five years ago China's economy relied remarkably little on debt. But China lost its debt inhibition in late 2008 when the global financial crisis erupted. With growth slowing sharply and 20 million people losing their jobs overnight, the government unleashed a giant stimulus that was powered almost entirely by bank loans. The debt genie was out of the bottle -- and it has been extremely difficult since then for China to stuff it back in. The FT's Simon Rabinovitch reports from Guiyang.

Apple under pressure in China's smartphone market

Apple's seen its market share in China dwindle as homegrown smartphone makers crank out feature-packed budget models. Could the launch of a cheaper iPhone restore its flagging fortunes?

Finfacts report from China in Jan 2013: Apple's shares slide; iPhone 5 selling in China at up to ¥7,200

Vladimir Putin walks alone in St Petersburg

Vladimir Putin, Russian president, has looked gloomier than usual in recent times. In June, The New Yorker reports a television reporter approached Putin and his wife, Lyudmila, in the Grand Kremlin Palace. The First Couple was leaving after the first act of the ballet “La Esmeralda.” After a few minutes of small talk about music and dancing, she asked a most impossible question: Why did they appear so rarely in public together? Putin’s response, confirmed by his wife: they had decided it was time for them to divorce. This is not the first time ballet happened to be the setting for a Russian personal and political drama: back in August, 1991, state television was playing “Swan Lake” just as Communists attempted a coup.

The New Yorker added that Putin has never appeared in public with his family; the Russian people have never even seen either of his two daughters. On the very rare occasions that he even mentioned his daughters, Putin hasn’t said their names—he just refers to them as “they”. His wife Lyudmila barely acted as the First Lady. After the first years of his tenure she stopped accompanying him abroad, and more or less disappeared from the scene. A common half-serious suggestion was that Putin had had her locked in a nunnery—just as the Russian tsars did when they sought to get rid of unwanted tsarinas.

The London Independent reported Friday that Putin cut a lonely figure after he was spotted wandering by himself through the streets of St Petersburg.

On Friday, the Russian leader was seen pensively walking through the city following the funeral of his Judo instructor Anatoly Rakhlin. Putin marched on wearing a moody look and avoiding eye contact, while his aides and security rushed to catch up with him.

The newspaper said Putin is known to be a master in the dojo when it comes to Judo and it is clear that the death of Rakhlin has affected him deeply. Rakhlin had reportedly been battling a long illness and considered himself to be a second father to the president.

Finfacts, Aug 09, 2013: Russia has more than 110,000 small business owners in jail

China's executions fall from 30,000 to 3,000 annually in 30 years

China executes far more people than the rest of the world combined, but numbers have fallen dramatically in recent years. The Economist estimates that the numbers have fallen from an estimated 30,000 annually in the 1980s to about 3,000 today. The number of executions in the 1980s was itself very low compared with 30 years before when a large number of suspected revolutionaries were executed. 

Reformers worked quietly within the system to bring about the change and panels now review every death case.

Death Row Interviews (BBC Documentary - 2013)

Every Saturday night in China, millions gather around their televisions to watch Interviews Before Execution, an extraordinary talk show which interviews prisoners on death row.

In the weeks, days or even minutes before they are executed, presenter Ding Yu goes into prisons and talks to those condemned to die. Combining clips from the TV show, never-before-seen footage of China's death row and interviews with a local judge who openly questions the future of the death penalty in China, This World reveals a part of China that is generally hidden from view.

CNN reported last April that China, the United States and three Middle Eastern nations carried out the most executions in 2012, rights group Amnesty International said, but a global trend toward ending the death penalty persisted.

Daniel Goldhagen, an American author and former professor of political science and social studies at Harvard University, who has written two books about the Holocaust, 'Hitler's Willing Executioners' (1996; review) and 'A Moral Reckoning' (2002). He is also the author of 'Worse Than War' (2009), which examines the phenomenon of genocide, and he wrote in the latter:

From 1949 to 1953, when the Chinese communists were consolidating power and laying the groundwork for their vast country's social and economic transformation to communism, the regime killed on the order of ten million people, mainly in their camps.

Worse Than War (PBS documentary)

Twenty new jobs at Enterprise Ireland to trigger 1,200 additional Irish jobs!!!

The Irish Government claimed on Friday that 20 new jobs planned for the overseas offices of Enterprise Ireland, the public agency responsible for assisting indigenous exporting firms, will trigger 1,200 additional Irish jobs by 2015.

This pearl of wisdom from a management consultancy, makes job creation seem easy and what if 100 or a multiple were employed?

Richard Bruton, enterprise and jobs minister, said 20 additional staff will be recruited locally on fixed term contracts and will be assigned to offices in key target markets including in particular the BRICS countries (Brazil, Russia, India, China and South Africa).

The Government says:

"It is estimated the deployment of the requested additional resources can drive export growth across the specified markets over and above what can currently expected to be achieved with EI’s existing resources in place. It is estimated that this incremental export growth of an additional €250m per annum by 2015 would result in an estimated additional 1,200 jobs in Ireland. This request for additional resources in selected markets is based on a clearly identified market opportunity which is matched by clear evidence of EI client demand/capability and which will result in a substantial increase in exports and resulting jobs in Ireland."

What is striking is that after 60 years of public support for the indigenous sector, there is so little data available on what works or doesn't. EU enterprise reports often have blanks for Irish data.

No  longitudinal studies are done that would track success and failure over time.

There is a lot of detail in Friday's statement but key data is deliberately missing. 

There is no data on indigenous exports to the BRIC countries. Wonder why?

Total exports of goods (2012 ) and services (2011) amounted to €7.7bn -- 4.35% of the total headline exports value of  €177bn in 2012.

Most of these exports are from foreign-owned firms in Ireland.

The reason why no data on exports is highlighted is because indigenous exports to each individual country, are at a decimal point.

Earlier this week, Eamon Gilmore, foreign affairs, trade and deputy prime minister, made the stupid claim in Beijing that China is crucial to the Irish recovery. However, what he did not reveal was that indigenous exports are at about 5% of total exports to China or €200m in value.

This reality raises a question on the wisdom of trying to sell everywhere when outside of the UK, Irish-owned firms have limited success in Europe.

Gilmore says China key to Irish recovery; Exports at 2% of total

Irish Economy 2013: Only growth in Ireland is in freelance 'jobs'

An experiment on discrimination among children

One day in 1968, Jane Elliott, a teacher in a small, all-white Iowa town, divided her third-grade class into blue-eyed and brown-eyed groups and gave them a daring lesson in discrimination. This is the story of that lesson, its lasting impact on the children, and its enduring power thirty years later.

Finfacts: Famous speeches and their impact from Pericles to Hillary Clinton - - including the 'I have a Dream' speech that was made in 1963 by Martin Luther King, the black civil rights leader.

He was assassinated in 1968.

Germany's Mittelstand: Hidden champions of the economy

The Harvard Business Review says that the amazing resilience of the German economy is often attributed to its reliance on Mittelstand companies, small to medium sized enterprises. These typically family-run businesses employ more than 70% of all German employees in the private sector, and are export-oriented, making Germany the second-largest exporter in the world. There is a wonderful account of these companies in the book 'Hidden Champions' by Hermann Simon, former INSEAD professor and now Chairman of Simon, Kucher & Partners.

Germany's more than 1,300 'Hidden Champions'

The Washington Post said in 2010:

"Buy a bottle of champagne and it puts money in the pocket of Schneider and Co., a family-owned manufacturer that from a remote perch in the German countryside has created a global monopoly on the wire cages that secure the corks on sparkling wine. Obscure in a country of marquee exporters such as Mercedes-Benz and Siemens, the company's international focus is common among small and often family-owned firms in Germany.

Schneider's highly automated plants (in Germany) and in Italy, Spain and Brazil churn out 2bn of the devices a year. Its dominant market share -- amassed over 30 years -- helps explain Germany's complex and controversial role in the European economy."

2008 presentation: How Germany's mid-size companies get ahead and stay ahead in the global economy [pdf]