Richard Delevan's sicNotes

moving to www.richarddelevan.com

noreply@blogger.com (R. Delevan) — Fri, 01 Feb 2008 15:04:00 +0000

to all those with whom I haven't been back in touch, my apologies.

quick version - back doing some writing, some media training, some other dark arts stuff can't talk about, and blogging about the US presidential elections over at Daily Telegraph 's Brassneck blog by Mick Fealty. (Yes, the Englightened one).

New website , thanks to assists from Gavin, is starting to come together.

In the meantime I discover this site's been nominated for journoblogging at the Irish Blog Awards - maybe. Anyway, vote for me!

Check the new address:

www.richarddelevan.com

Obama, Hillary, The New Yorker and TodayFM

noreply@blogger.com (R. Delevan) — Mon, 26 Nov 2007 12:39:00 +0000

Great in-depth piece by Ryan Lizza in the New Yorker on Barack Obama's relaunch against Hillary. It's revealing. Obama as a candidate has demonstrated that he's got some steel in his soul as he finally makes the argument (if still in a dignified way) against a Clinton nomination. He's figured out that it's not enough to wait for the media to make the anti-Clinton case. The media, he argues (correctly in my view), is rewarding Hilary Clinton for her tactical excellence at playing the established game.

He even shows that he knows he has to play at least some of this game, even if he is simultaneously raising the stakes in Iowa by rolling up his sleeves:

On November 5th, Obama’s campaign sent reporters a research memo that criticized Hillary Clinton for changing her position on ethanol, Iowa’s most parochial issue. The Des Moines Register, Iowa’s major daily, ignored it, but when the campaign offered Obama himself for an interview a story was assured; it appeared on November 7th, with the headline “OBAMA: CLINTON FLIP-FLOPS ON ENERGY.”
I asked Obama whether ethanol was a subject that merited such personal attention. “It has less to do with the particular issue and more to do with her change in position,” he replied. “Now, Hillary has been in the Senate for seven years now. She has consistently voted against ethanol, because the perception in New York state is that this is making gasoline more expensive and that it’s a boondoggle. Those of us in farm states, obviously, have had a different perspective on it. If she came here, and she made a cogent case as to why she doesn’t think ethanol makes sense and why she voted against it, that’d be one thing. After seven years, she comes here and suddenly she’s an ethanol proponent! Well, how did that happen?” He managed to sound genuinely astonished by such brazenness.

Maureen Dowd also noted the un-Bambi version of Obama last week. If he doesn't beat or effectively tie Hillary, is there enough in the tank for New Hampshire and beyond?

BTW, am I the only one completely freaked out about how this US presidential bears an eerie resemblance to Seasons 6 and 7 of The West Wing? Read Rudy Giuliani [or McCain, or Romney] as Arnold Vinick, right down to reassuring the social conservatives on judges; read Obama as Matt Santos?
Given how obsessively the English-speaking world's political class watched/watches the DVD set of The West Wing, and how everybody projects their guy/gal candidate into that universe, is it entirely surprising that they would appropriate, even subconsciously, some of the narrative as their own? Or not so subconsciously - as when the Tories nicked a parliamentary tactic explicitly from a West Wing episode?
Life imitates art?

Another BTW, kudos to Sam Smyth and the TodayFM Sunday Supplement for bringing on an Irish-American (Eddie Hayes, the inspriation for DA Tommy Killian in Tom Wolfe's Bonfire of the Vanities) not so tanked up on Clinton Kool-Aid that he can talk coherently about Obama and the race.
It was in marked contrast to what can charitably be described as a (disappointing and surprising, to me) recitation of pro-Hillary platitudes by Marian Finucane's RTE panel - with the honourable exception of ex-colleague David Horgan, who as usual talked sense...on the Dollar, Oil and China.
(Also a nice contribution from Damien Corless on hate figures - but about Heather Mills, not Hillary).

Making Money from BlogBang?

noreply@blogger.com (R. Delevan) — Fri, 23 Nov 2007 17:36:00 +0000

Every blogger I've ever had more than a ten-minute conversation with eventually comes around to a confession of their deepest, darkest desire. For love of the game, eventually, doesn't pay the bills. It's why some of the island of Ireland's best bloggers have, from time to time, had to scale back to focus on the day job.

Often this means quite sensibly dropping a bit of utopian rhetoric and pragmatically using the skills they've honed while blogging to advantage in paid-for work. Often using their blog - or a separate blog - to do some marketing for their line of work.

But for those bloggers who long for a more direct return on investment...well there's something for you. Even if, at the moment, it's not much.

The Wall Street Journal highlights BlogBang, a venture 60% owned by the Paris-based advertising conglomerate Publicis. In Ireland its most visible face is the award-winning ad agency Publicis QMP and related marketing and PR operations including Pembroke Communications.

The Journal's story focuses on the efforts of Nescafe to attract bloggers to take part in an ad campaign. But the real story here is something more interesting. User-generated advertising with real money to the winners:

BlogBang also has tried to draw bloggers into the creative process. Companies looking for new ways to pitch their products can post requests for bloggers to develop their own campaigns. BlogBang's members can then put their homemade ads on the site. The one that gets the most clicks is spread around the bloggers' Web sites, and the author of the winning ad earns a fee.

This sounds a bit like the Superbowl ad experiments last year or, in one of his least coherent moments (and that's saying something), seems to worry Cult of the Amateur author Andrew Keen. (or perhaps he'd prefer this one)

So in the same way that blogs have proven successful in helping aspirants become a paid MSM columnist, or YouTube a tool to help aspiring directors, is Publicis on to an idea that could offer a vehicle for aspiring AdLanders?

Facebook Ads Scarier for Privacy than Google?

noreply@blogger.com (R. Delevan) — Fri, 23 Nov 2007 17:18:00 +0000

Damien Mulley posted an unimpeachably comprehensive look at the hyper-targeting ad programme that Facebook's exponentially growing popularity - 167,000 Irish users and growing, according to my former colleague - is making possible. For advertisers it seems like a dream come true.

Maybe more of a nightmare for the advertisees, however.

Earlier this week privacy advocates started to get the heebie-jeebies about the formerly clean-cut Harvard-bred do-no-wrong social networking star when they realised that Facebook was tracking (and posting) users' visits to non-Facebook websites, alongside ads for those websites or related services and *pictures of the Facebook user*.

As the Wall Street Journal reported Wednesday (subs req - at least until Rupert gets full control next month, after which he's said he'll remove the subs wall):

Some users of the Facebook Inc. Web site have been startled by a new feature that tracks their activity outside of the site and shows it to their friends -- renewing questions about the privacy implications of a growing practice of exploiting personal information in online advertising.

The social-networking service earlier this month began posting updates about users' activities on Web sites outside of Facebook and on commercial pages within Facebook -- in some cases, alongside ads from the companies behind those Web sites or pages. Facebook is posting users' photos alongside certain advertisements, another feature that has alarmed some privacy advocates and users.

For instance, a user who logs on to Facebook might see an update in a section of the site called the "news feed" noting the movie a friend rented from an online site, along with a photo of that friend and a movie-rental ad.

Jeez, I don't know about you, but I know a few people who wouldn't like their video rental habits broadcast to anyone who might want to know. Even if it's opt-in, it just seems like a train wreck.

Isn't this exactly the sort of abuse of trust everyone has been afraid Google would commit all these years?

**UPDATE: Missed on the first read. *There is no opt-out for the service*. Again, the WSJ:

Users can't opt out of the program, called "Facebook Beacon," altogether. Instead, they have to opt out on a case-by-case basis when they use one of the outside sites.

Bad, bad, bad, bad move by Facebook? Your thoughts most welcome in email or in comments for use in future article - pls specify if you wouldn't like to be quoted.

Electric Cars Get Deadly Serious

noreply@blogger.com (R. Delevan) — Thu, 22 Nov 2007 10:41:00 +0000

This column first appeared in Business & Finance magazine in November 2007.

Richard Delevan

In Ireland we - or at least the 70% of us who use a private car to get to work - are worried that Brian Cowen will look to balance the budget on the back of drivers by raising taxes on petrol and diesel. Given that fuel prices have risen 15% and that even a strong euro can't insulate us from $100 a barrel oil, this seems like enough to worry about.
But events in China last month should be a warning about how bad things could get. In Shandong province, a man was stabbed to death and in Henan another man died in a brawl. Both were killed at petrol stations. By other motorists. For trying to jump the queue. Because China refuses to let petrol prices rise with the world oil price, refiners no longer able to make a profit have either stopped producing or are hoarding, causing shortages, long petrol queues and arguably the first direct fatalities of the era of Peak Oil.
Fortunately we're not (yet) in the scenario of the new "documentary", "Crude Awakening: The Oil Crash" that opened in cinemas this month, and there's some cause to believe that oil prices are now so high it might actually prompt some radical changes in the way we think about cars. Like maybe we should give them away for free and charge them for the fuel.
Crazy?
Not according to Shai Agassi, the Silicon Valley entrepreneur who was up for the top job at software giant SAP. In early November 2007 he announced he'd raised $200m for his startup, backed by venture capital from Israel and the US. But his company won't be making electric cars. Instead he wants to create a network of battery-charging forecourts across the US in order to keep a new fleet of electric vehicles going. Instead he wants to give the cars away.
It's like mobile phone operators giving away handsets in order to charge you airtime. And mobile phone operators are exactly the business model Agassi sees as the future of the transportation industry.
The economics are pretty stark. On his blog, "The Long Tailpipe" [actually stumbled across it when reading Chris Anderson's Long Tail blog] Agassi does some back-of-the-envelope calculations to make his point. He reckons there are 100m or so cars in Europe that are at least 8 years old. Each would cost you $5,000 to buy. Filling up with petrol for a year at 20 miles per gallon - which he says is roughly what the average performance of the European car fleet was 10 years ago - requires more than 600 gallons. Result? Even before the current price spikes, that meant it would take more than $5,000 to keep the car rolling for that year. (It gets even harder to take if you factor in longer commutes from further suburbanisation and petrol-guzzling traffic jams.)
So, Agassi argues, "the cost of the average used car in Europe is now cheaper than the cost of [petrol] to drive it for a year - talk about razor and blades businesses."
Agassi's new venture, "Project Better Place", isn't some warm and fuzzy attempt at fluffy PR from a traditional car company or oil company looking to tart up its image - despite the name. It's an archetype of a new kind of technology startup - one designed specifically to capture the opportunities inherent in the Peak Oil/climate change crisis. Besides the Israeli venture capital fund, other backers include VantagePoint Venture partners, a US technology VC fund, plus a former head of the World Bank. And Morgan Stanley.
What makes Agassi's business interesting is that, even though it's a Silicon Valley startup, it sees its main target market, initially anyway, in Europe. In part because the price of petrol is so high - he estimates we'll see €2 a litre in the next year - there will be more of an incentive to make the switch. Agassi says pilot programmes will be running - most likely taxi fleets in big cities - next year, with a build out from there. He doesn't specify, but the pilots sites look far more likely to be in Europe than in North America.
It would be nice to think an Irish city might be considered for a pilot, but it seems unlikely. If Ireland's electricity grid has trouble getting up to the basics of "smart metering", what hope it could adapt to moving a chunk of our vehicle fleet to plug into the grid.
There are two other facts that suggest Ireland will be a lagging, not leading, adopter of electric vehicles. First, most of our cars - as any commuter sees from the license plates - are less than five years old. So we're a while away from turning over the vehicle fleet. Then there's the cars themselves. Most electrics are as safe in a crash as your average golf cart, without being as fun to drive. But still.
It is easier to transport electrons than octane molecules, and the ubiquity of the grid makes it a lot more likely that the electric car will be the end state of 21st century vehicles - with ethanol or hybrids being merely a (very expensive) waystaion on the way. Agassi's case for the electric car gets more compelling every time the tank needs filling.

ends

After filing this story, I saw that the Irish Indpendent profiled the people behind GreenAer, a new venture importing the Indian-made (!) REVAi electric cars. Haven't sat in one yet, but it looks pretty small.

Of course, this wasn't the best week to talk about electric cars in Ireland. Not with this shower planning to turn off the country's lights for Christmas. Wankers.

The 10 Tribune Stories I'm Proudest Of

noreply@blogger.com (R. Delevan) — Fri, 16 Nov 2007 00:44:00 +0000

In the 20 months I was business editor at the Sunday Tribune, I was privileged to work with some superb reporters, subeditors and photographer. I'm glad we paid attention to topics before most others did in the Irish market. In particular, we paid serious and sustained attention to Dublin's relationship to the US subprime crisis beginning back in March 2007, culminating in Jon Ihle's still-controversial scoop of 2 September. Our attention to the Irish angle on the biggest financial story in our lifetime is not something I regret, even though a lot of vested interests began whispering. I was even quietly brought for coffee with a well-known Dublin PR, who explained to me that as far as Dublin's banking community was concerned, the very act of asking questions about Ireland's regulatory environment was the same thing as making accusations.

I am also proud of the sustained attention we paid to the Business of Green. The private sector is going to do most of the heavy lifting when it comes to dealing climate change, and we paid more attention to the issue, earlier, than any other Irish business section.

We were not afraid to call attention to Ireland's attitudes towards migrant workers, or highlight that a lot of US firms are thinking about reducing or eliminating altogether jobs in Ireland.

And I'm proud of the story that drew attention to the naked hypocrisy of property interests, mindlessly talking up a market despite what they know to be true.

Below I've linked to 10 stories with which I'm particularly happy to be associated.

Financial Regulator knew Ormond Quay risks three years ago
2 September 2007
Jon Ihle's important story that asked what Irish regulators knew about the Dublin-listed subprime spectacular that is still reverberating through the German financial sytem.

Half of US Firms Consider Part Pullout
20 May 2007
The American Chamber of Commerce in Ireland commissioned a survey by Indecon about attitudes at US multinationals. But for some reason they didn't want to release the most significant finding - that nearly half of US firms were considering at least some job cuts.

Immigrants make up 78% of construction job cuts
9 September 2007
A story that was right there but few other business pages seemed interested in.

Concern about ACC lending frenzy
5 November 2006
Bill Tyson's short-listed scoop about orgiastic selling at ACC Bank.

O'Brien says Ryanair bid would be "a disaster"
8 October 2006
Denis O'Brien, less than a month after he resigns from a bunch of Irish corporate boards but also in the middle of the Ryanair bid for Aer Lingus, decides to take a few press questions after a business breakfast in Dublin at 7.30 on a Friday morning. Why would O'Brien be doling out advice to Aer Lingus employees? We went big with the story. The next week O'Brien bought up enough Aer Lingus shares to halt O'Leary/Ryanair momentum towards control. We're still not sure why - the ad about flights to Malta alluding to O'Brien's tax residency there? Or did O'Leary really steal O'Brien's car parking space at GPA?

Ryanair worst carbon offender
30 September
Someday soon, the average investor will demand to know a company's carbon exposure - if nothing else because it will eventually affect the shareprice. We got carbon audit firm Trucost to look at top Irish public companies. It's not perfect - particualrly the Tribune's website version, which I note is still uncorrected, starting with DCC at number 1 instead of its real ranking, 11. But carbon disclosure is quickly becoming a mainstream investment issue. We were there first.

RTE and TV3 look set to miss as YouTube and Joost ready landmark video-content deals
17 June 2007
Our intern Jeff Moskowitz, with a little help, scooped a little story that Google was hoping to save for the following week at a big to-do in Paris.

Subprime loans could mean trouble at home
18 March 2007
Our first piece really looking at how the US subprime crisis might affect events here.

Irish-listed subprime debt threatens pensions
15 July 2007

Irish-listed CDOs are downgraded
22 July 2007

Why Obama Can Win

noreply@blogger.com (R. Delevan) — Thu, 15 Nov 2007 23:00:00 +0000

The guy goes 20 minutes with no notes. American politics hasn't seen anybody like this in a generation.

It's into the home stretch in Iowa, and it's like the guy is just getting into his stride. A few weeks ago when Hilary edged him out in fundraising it was looking dodgy, but he's still in it. Have a listen to the content and you understand why.

Goodbye to Journalism and all that...

noreply@blogger.com (R. Delevan) — Fri, 09 Nov 2007 19:59:00 +0000

This column was filed on 2 November and first appeared in November 2007 in Business & Finance magazine.

Richard Delevan

Journalism as we knew it died at about 11.15 pm Dublin time on November 1^st, historians may record.

It was the moment on the conference call, staged by Google, in which it unveiled how far it had gone in putting together an alliance of social networking websites that would challenge the rise of the social network, Facebook. When Chris DeWolfe, the CEO of MySpace, got on the call and said how happy he was to join Google's alliance, teaming up with rivals including bebo, LinkedIn and Google's own Orkut.

Google's PR coup surrounded the launch of something called OpenSocial, a software thingee for developers of "widgets" – little mini-applications that let people compare and share their favourite books and films, host their own opinion poll, or dozens of other things not yet dreamt of. OpenSocial will let those developers create a "widget" that will run not just on MySpace but practically all other social networks.

For people under the age of25, time spent on their online social network is quickly displacing time spent with other media like newspapers and TV. As wireless broadband gets better, devices like the iPhone get cheaper and the software wrapping social networks together gets smarter, it looks as if social networks may become the main portal through which people consume media.

That brings us to the second factor. Also in late October, an ex-RTÉ journalist called Donnahca DeLong emerged as the international poster boy for "old media". Now the editor of Amnesty International's website but presuming to speak for his whole profession, DeLong's byline appeared above a story in the National Union of Journalists' in-house publication headlined, "Web 2.0 is Rubbish". It was a preview of an official report to be released this month by an NUJ committee on multimedia journalism of which DeLong is a member.

"Isn't increased participation and feedback from our 'users' – readers and viewers – a good thing?" DeLong wrote. "Of course it is, but the problem with Web 2.0 is not how it introduces these elements to the media, but how it's seen as replacing traditional media."

DeLong was instantly transformed into a transatlantic whipping boy. Guardian columnist and new media evangelist Roy Greenslade announced he was quitting the NUJ – citing DeLong's attitudes as symptomatic of how irredeemably suicidal the union had become in the face of new technology. Shane Richmond of the Daily Telegraph laid into him. Even on the other side of the Atlantic, new media pundits Jeff Jarvis and Jay Rosen found DeLong a figure worthy of scorn.

Another quote from DeLong was held up as particularly revealing of attitudes about the emerging technologies: "In one of the main examples given to explain Web 2.0, Wikipedia replaces Britannica Online. Is that the kind of democracy we want – where anyone can determine the information that the public can access?"

With the much-ridiculed former RTÉ journalist now the English-speaking world's symbol of why the old order in journalism will be swept away and personally responsible for discrediting arguments in favour of professional journalism, DeLong has almost single-handedly robbed the credibility of fellow critics of what the internet might do to journalism.

Combining the two factors is a little-known project going on today at Chicago's Northwestern University, home of the famous Medill School of Journalism. But the project at the school likely to have the most impact on the media is happening not in the journalism department but in the computer science department.

News at Seven (newsatseven.com) is an experimental programme whereby an avatar – a computer-generated character – presents the news. The news itself is selected and culled from newswires, blogs and – wait for it – social networking sites, and packaged together in a news show done to simulate a news broadcast.

But because News at Seven isn't a broadcast, but something produced on the computer individually each time it's viewed, the news programme can be tailored to each individual's tastes, or those of your own social network. So that your own personal newscast could begin with stories about topics you'd responded well to before. It might include comments from like-minded people about politics or your favourite sports team. The entertainment news might well include the fact that your best friend, on her bebo page, has discovered a new band she likes, and offer to play a clip of their latest video, then offer to sell you the download of their album.

News at Seven is just one experiment, and it's in its most primitive stage. Soon, something like it will be a "widget" you can add to your personal webpage on your social network of choice. And it will change everything we understand about news.

But the time is upon us when the idea of mass media journalism as we understand it will be made irrelevant by something quite like it. Google's OpenSocial provides the means for delivering it to the social networks that have increasingly captured the eyeballs. And thanks to Ireland's own Donnacha DeLong, there's no credible critic to stand in its way.

ends

...what did you think this would be about? Oh. And on the other thing. Thanks to the many who sent such kind messages. And we did our own reporting and checked our facts.

Good night and good luck.

rdelevan@gmail.com

Gay Marriage?

noreply@blogger.com (R. Delevan) — Mon, 05 Nov 2007 15:31:00 +0000

This column first appeared in the Sunday Tribune on 4 November 2007.

A NEW SHAPE FOR MODEL FAMILY UNITS
Richard Delevan

LABOUR'S love lost its Civil Union bill last week, but in defeat there was a victory. The debate revealed that no respectable opinion in this country will now stand in the way of affording legal recognition to relationships other than the standard hetero semi-d marriage that has been the norm in human societies since the invention of "yes, dear".

Even Senator (just me or still weird? ) Eoghan Harris spoke movingly about his gay neighbours and how they should not be deprived of a status equal to smug (heterosexual) marrieds. His Seanad colleague David Norris, quelle surprise, still found a way to feel victimised by anyone who fails to surrender entirely to his agenda. When John Hanafin invoked Sir Thomas More to make the point that the state could no more redefine marriage to include same-sex partnerships than it could decree that the sky be a colour other than blue, Norris nagged that when Hanafin bothers to speak it's to blackguard "people like me".

The Seanad is becoming Ireland's best sitcom. Norris and Hanafin already sound like a long-married couple.

It's revealing. No one who matters will openly oppose recognising same-sex partnerships. Opposition will be in the closet. Carried out by stealth, delay and parliamentary skulduggery . . . something Norris is right to warn against and the Green pointman, Ciaran Cuffe, had better be willing to resign to prevent.

Cuffe, who offered a reasonable defence of the Green Party's necessary volte-face on Labour's bill, effectively made the point that a decent liberal state cannot exclude same-sex couples from rights equal to married couples, and that the government's planned bill is the best first step in that direction. This means inheritance rights, protection of the family home, pensions, health benefits, power of attorney, the right to adopt children, be extended through civil partnerships.

In a politically adroit move, Cuffe also expanded the constituency for civil partnerships beyond the particularly vocal minority whose boudoir activities John Hanafin would prefer not to think about. Ireland woke up in 2007 to the fact it is now a thoroughly modern European state where co-habiting is becoming as common as marriage. The EU reported in 2006 that 31.4% of all children born in Ireland are born outside of marriage, just 0.2% below the European average. So the traditional man-woman-marriage-family-unit is no longer dominant.

Cuffe's message . . . it's not about gays. It's about everybody. The argument runs like this. The state has no business in what goes on inside a private household and cannot restrict sexual activities between consenting adults.

It follows that domestic arrangements arising primarily to provide a socially constructed way to control sex, i. e. marriage, should also be beyond the state's control.

In the Dail debate last week, Dr Martin Mansergh, a guy whose IQ is as distant from many of his party colleagues' as theirs is to a carrot, made the key distinction. As reported in the Irish Times: "In the case of civil partnership, said Dr Mansergh, there should be no necessity for there to be a physical relationship, though of course the public might tend to draw its own conclusions." So sex is no more needed for civil partnerships than marriage is for sex. That insight means civil partnerships can't just be about samesex couples. Or about co-habiting heteros. To be just and logically consistent, civil partnerships, with all their attendant privileges in property rights and tax benefits, should be available to whatever domestic arrangements seem appropriate to consenting adults. The public might tend to draw its own conclusions about the presence or absence of a physical relationship, but the state must be blind in such matters. If cohabitees and same-sex couples, why not polyamorous relationships of three, four or five adults of mixed genders?

Why not an elderly mother and divorced son? Why not four women just out of university sharing a house?

And marriage? My more libertarian friends say abolish it entirely. I say let the state get out of the business of sanctifying relationships but let the church (any church) . . . or whatever private organisation you please . . . sanctify as it sees fit. Because the law can recognise whatever domestic arrangements you like. But you can't force everybody to call it marriage.

rdelevan@tribune.ie

The falllacy of the knowledge economy - riposte

noreply@blogger.com (R. Delevan) — Thu, 01 Nov 2007 13:46:00 +0000

Piaras Kelly - a PR guy far too thoughtful for the business he's in - weighs in on the "knowledge economy" fallacy with a great post. (Though I admit I was a bit nervous when I saw he'd kindly referenced me in the context of spreading a "fallacy"! Fortunately for me I came out OK.)

But Piaras makes a couple of points worth pushing back on.

1. Piaras leads with: "A running theme in the Irish media is the notion that we need to become a knowledge based economy"

But "Knowledge based economy" isn't a media term. Just Google the term in quotes and restrict the term to Ireland. Here. What you get is a quick rundown of where the term is most frequently used. We get a lot of hackery in reports from Irish Government departments, CEOs of major multinationals (including Jim O'Hara of Intel speaking as head of the American Chamber of Commerce).

I hate the lingo "knowledge based economy". I hate it so much I spent a whole column dissing it in August. A lot of other meeja types hate it even more than I do.

Like "paradigm shift", "knowledge economy" is a term so overused that it's become verbal shorthand, shorn of context, often misused. Like "paradigm shift" it's a turn of phrase coming out of a decent book worth revisiting from a few decades ago. "Paradigm shift" from Thomas Kuhn's Structure of Scientific Revolutions. "Knowledge economy" or "knowledge-based economy" from Peter Drucker's 1969 book, The Age of Discontinuity; Guidelines to Our changing Society. Or you could just read the Wikipedia entry.

So don't blame us for that one.

2. We can agree that workplaces as currently constructed are probably ill-suited for the "knoweldge economy" - if we're stuck with that term. But what to replace them with? It's not an easy nut to crack.

The 1991 HBR article Piaras cites on innovation in Japanese companies actually points up the problem reasonably well - even if leavened with now-quaint notions of Japanese corporate superiority.

It's interesting to remember the 90s buzzterm 'tacit knowledge' - the opposite of the "explicit knowledge" it's hard to write down. It seems to me that it does get to the heart of the "knowledge economy". How do you structure work and organisations to capture the best ideas and innovations? My "digital natives" spiel at the IIA event notwithstanding, it all sounds nice, but the problem with imagining that good ideas can come from anywhere in an organisation is that, while true, it isn't useful in organisations that are highly specialised.

Generally people tend to describe the problem as one of hierarchy and authority. Wikipedia co-founder Larry Sanger gave an absolutely brilliant presentation at the Institute of European Affairs in September about what he calls "the politics of knowledge". Listen here. Coincidentally someone put the link my way today, and I want to give it some thought before getting more into it. But here's a highlight, wherein Sanger describes online social networks as polities requiring good governance:

The idea that online communities are a kind of polity is, I think, very suggestive and fruitful. I want to talk in particular about how online communities, considered as polities, are engaged in a certain new kind of politics—a politics of knowledge. Let me explain what I mean by this.

Speaking of a “politics of knowledge,” I assume that what passes for knowledge, or what we in some sense take ourselves to know as a society, is determined by those who have authority or power of a sort. You don’t of course have to like this situation, and you might disagree with the authorities, or scoff at their authority in some cases. Nevertheless, when for example professors at Trinity College say that something is well known and not seriously doubted by anyone who knows about the subject, those professors are in effect establishing what “we all know,” or what we as a society take ourselves to know. Since those professors, and many others, speak from a position of authority about knowledge—a powerful force in society—surely it makes some sense to speak of a politics of knowledge. I just hope you won’t understand me to be saying that what really is known, in fact, is determined by whoever happens to be in authority. I’m no relativist, and I think the authorities can be, and frequently are, wrong.

If we talk about a politics of knowledge, and we take the analogy with politics seriously, then we assume that there is a sort of hierarchy of authority, with authority in matters of knowledge emanating from some agency that is “sovereign.” In short, if we put stock in the notion of the politics of knowledge, then we’re saying that, when it comes to knowing stuff, some people are at the top of the heap.

Our new online communities—our cyber-polities—are increasingly influential forces, when it comes to the politics of knowledge. When Wikipedia speaks, like it or not, people listen. So in this talk I want to discuss in particular something I call the new politics of knowledge. Any talk of a new politics of knowledge raises questions about what agency is sovereign. Well, it is often said that in the brave new world of online communities, everyone is in charge. Time Magazine’s “Man of the Year” is, by practice, usually some influential political figure. When its “Person of the Year” last year was “You,” Time didn’t break its practice. Time was rightly claiming that, through Internet communities we are all newly empowered. In the new politics of knowledge, we can all, through blogs, wikis, and many other venues, compete with real experts for epistemic authority—for power over what is considered to be known.

If this sounds like a political revolution, that’s because it is. It is frequently described as a democratic revolution. So what I’m going to do in the rest of this talk is examine exactly what sense in which the new cyber-polities, like Wikipedia, do indeed represent a sort of democratic revolution...

But what if the nub of the problem - how to best organise work to capture knowledge wherever it happens in an organisation - is less emotionally charged than issues of competition for power (or hierarchy or authority) and is actually something a lot more prosaic?

The West got pretty good at doing things because it was able to break down concepts and operationalise them by creating ever-more-specialised roles for people. Greater specialisation leads to greater productivity, goes the theory. And that takes you pretty far. Atomic bomb, man on the Moon, yada yada yada.

But - as the HBR article posits - ideas don't just come from specialist idea-makers. If competitive advantage is now to be derived from wringing every drop of innovation out of all your people, how do you get it and still keep people in their jobs? What if the shop floor middle manager, the cleaning staff or the receptionist has the killer idea?

All great in theory, but generally these flashes of insight from the periphery are non-recurring events. Not every workplace is so fabulously profitable and productive that it can afford to let its employees spend 20% of their time working on individual projects like Google.

So in the non-Google world of work, how do you capture these ideas - without encouraging people to spend all day on the company wiki to win a nominal prize instead of, y'know, doing their job? What about a workplace famously so lean and mean that you're not allowed to charge your mobile phone and you have to buy your own pens, like Ryanair? How can it be made to work at a place built on ruthlessly efficient specialisation to maximise near-term profit?

If feeling valued is an important part of motivating, how can you make everybody feel their (non-specialist) contributions are valued when most of them aren't valuable, most of the time?

Watch Delevan on RTE's "The View"

noreply@blogger.com (R. Delevan) — Tue, 30 Oct 2007 08:38:00 +0000

On the 23 October 2007 episode of RTÉ's The View (watch it here), hosted by the excellent John Kelly, I joined Hugh Linehan of the Irish Times and Izabela Chudzicka of City Channel to offer my completely unqualified opinions about books and films.

We watched Michael Moore's "Sicko" - and I apparently surprised people by pointing out that a broken clock is right twice a day. Moore's tendency to overstate and hog the screen is less on display here than in his other movies. His paean to the health services of the UK, France and Cuba is the movie's weakness - particularly his fellating of Castro's health services.
But his call for socialised medicine/universal healthcare probably suffers from being, ironically, too mainstream. For 10 years GM spent more on worker-health-care than steel to produce an average car. Ask the CEOs of GM or Chrysler if they'd take socialised medicine and see what they say in 2007? Ageing workers become a competitive disadvantage (versus younger, healthier workers at Toyota and Honda plants in the US) when you have to foot the bill.

David Cronenberg's "Eastern Promises" was the other film - a London Russian "Godfather" with that infamous bathhouse fight scene. Personally I was more freaked out by the "professional processing" of the film's first murder victim, but I can see how the sight of Viggo Mortenson's wobbly bits in close proximity to a sharp knife has caused some visceral discomfort.

Glenn Patterson's the third party was the book. Northern Irish writer goes to Hiroshima, should be shamed out of any idea he's a member of the MOPE (most oppressed people ever), but mainly moans about being a NI writer - which I can't recommend.
Then again, when you start out a book set in Hiroshima with a vision of an eagle flying over the city at dawn, you're not exactly being subtle with metaphor, are you?

"Paintings from Poland" - National Gallery, Merrion Square - through 28 January - Speaking of somewhat less than subtle...visiting this exhibition was a real treat. But the Symbolist movement couldn't have been accused of much subtlety either, on the whole. Lots of images of the 16th century court jester Stanczyk, famously pictured as he learns of the fall of Smolensk to the Russians - and the imminent dismemberment of Poland. The Partridges (pictured) by Jozef Chelmonski being a lot more subtle and poignant.

Izabela makes an interesting point - the collection gives Polish people in Dublin a chance to see paintings they studied in school but might never have a chance otherwise to see in person. I don't know enough about Polish art to judge the curation, but I did wish we had a chance to get further into a discussion about whether the swift move - after Polish independence - from heavy-handed nationalist symbolism in art to more abstract expressionist ideas in touch with European movements was fairly drawn. Did Polish art really move that quickly after Independence? Or is there a read-through of a contrast with the Irish experience?

Bonfire of the Properties

noreply@blogger.com (R. Delevan) — Tue, 30 Oct 2007 08:13:00 +0000

This column first appeared in the 28 October 2007 edition of the Sunday Tribune.

Fuel for the bonfire of breached trust
Richard Delevan

TWO THOUSAND AND SEVEN will almost certainly be remembered as the year trust went up in flames.

We saw the first bank run in 150 years as people fearfully queued up outside of Northern Rock because they no longer trusted the institution. We saw the former national airline drop its Shannon routes on a bank holiday weekend in the dog days of summer, six weeks after the Department of Transport's top official was told of the Aer Lingus plan.

And last week we saw a cancer at the heart of the Celtic Tiger property boom exposed in all its wretchedness.

Solicitors-turned-property-developers on the run.

Banks crowding the High Court bench, elbowing each other aside to be first in line as creditors, having learned that different banks had been duped into lending tens of millions of euro on the same property.

Somewhere in the background, individual investors in certain overseas property schemes come to the slow, icy realisation about the money they gave that trustworthy fella for a piece of that allweather resort in Bulgaria he was building. After all, he was a solicitor. What could go wrong?

Trust is the midpoint between ignorance and certainty that allows us to deal with other people with confidence. It's easy to forget that the difference between prosperous modern capitalist economies and aboriginal barter systems is the systems and institutions of trust we've built up over the millennia.

Babylonians came up with the idea of the notary public, the idea that you could entrust part of the authority of the state in a trusted individual who would serve as an unimpeachable witness to, amongst other things, transactions of property. Banks as we understand them are a far more recent innovation, once medieval financiers found a loophole in Biblical admonitions against usury. Come to that, money itself only has value because we trust that it does and that it will be accepted by others.

The more trust relationships a society has, the better off it tends to be. If I can trust the bank with my money, it can go off and help finance the building of houses and roads, help people to start new companies. If I can trust a solicitor to register a mortgage against a property, it saves a lot of time and money.

The scandal involving Michael Lynn, Thomas Byrne and the other as yet unnamed solicitors of the Law Society is not just a matter of curiosity and titillation, though it has that in spades. For 20 years, solicitors have been given extraordinary latitude in property transactions. The vast majority of solicitors trusted with that power used it responsibly. But if the worst fears of the banks and investors are confirmed, the abuse of trust committed by these few strikes at the very heart of not just our prosperity but the rule of law itself.

The consequences? On a global scale this year, we saw big international banks simply stop believing what other banks were saying about how much exposure they had to the American mortgage market. One day in August, the international credit markets 'seized up', which is to say they simply stopped functioning.

No one trusted each other enough to carry on trading.

The fact Dublin was home to the majority of these dodgy debt securities is dismissed by those in authority who would rather you pay no attention to the man behind the curtain, but that's a trust issue for another day.

The "credit crunch" that ensued led directly to the spasm that convulsed Northern Rock. It couldn't get money to continue its operations, ultimately leading to the collapse of trust in the bank and queues of worried people as long as any this side of the Weimar Republic.

Less dramatically, the real cost of money has gone up, for mortgage borrowers, property developers and anybody else trying to start a business.

So what about our local trust-busting banks and lawyers? The fallout is unclear. One worrying sign is that, anecdotally, the Land Registry is seeing a small increase in people . . . solicitors, mostly . . . coming to their public window, rather than registering mortgages by post.

If actual property buyers start coming in, just to make sure they actually own the roof under which they tuck their children into bed at night, we can only stand back and watch the bonfire of our folly.

As anybody who's been burned before knows well, trust lost is hard to regain.

rdelevan@tribune.ie

A Laptop for Africa?

noreply@blogger.com (R. Delevan) — Fri, 26 Oct 2007 07:32:00 +0000

This column first appeared in Business & Finance magazine in October 2007.

Richard Delevan
This December the hippest gadget gift under Western Christmas trees may be a bright green laptop costing less than $200 but built for Third World children. A digerati version of the Make Poverty History wristband or a yellow "bracelet" sported by Lance Armstrong - a combination status symbol and conspicuous social conscience - according to Amazon.com founder Jeff Bezos, an early backer of the project. Will that make you more or less likely to buy one?
The $100 laptop concept was conceived by Nicholas Negroponte of the Massachusetts Institute of Technology - a vision to put ultra-low-cost computing into the hands of the world's poorest children as a way of radically improving their education and chances for economic success in later life.
Negroponte got the idea after observing the effects that the introduction of computers he'd helped donate had on children in a poor community in Cambodia. At the January 2005 World Economic Forum, Negroponte announced his intention to get a laptop produced at that unit cost and to ship it to the world's poorest children.
The result was an industry-wide reaction to Negroponte's call to arms. Just how far down could you drive the price of a laptop? And not just a laptop but one that would be designed for children, connect easily to the internet and other laptops, be rugged against the elements and usable in environments without adequate electricity supplies, and use free and open source software? Backers, each donating $2m to fund the project, included chip maker AMD, Google, ebay, Nortel, and others. Intel started its own effort, but wound up backing Negroponte.
The result is a machine called an XO. With a 7-inch screen and a bright green casing, the XO looks very much like a child's toy. But the laptop has some extraordinary advances that are likely to influence the way other computers are designed in future.
It has no moving parts - using a 1GB flash memory rather than a hard drive. Its stripped-down Linux operating system is very efficient in using the 256mb of DRAM. The XO has a video camera built in. It can connect to WiFi networks using the 802.11 standards. It's sealed against spills as well as moisture and dust. Its high-resolution screen (which can be seen easily in direct sunlight) and processor only need a fraction of the power of ordinary laptops, making it far more energy efficient to run. Its flash memory uses less power than a hard drive would have. Its battery stays charged for far longer, and can be recharged with a foot-wide solar panel, foot pedal or pull cord - handy in places where electricity is scarce or unreliable.
The XO, and the whole idea behind it, is not without its critics. Some in the development community rail against the absurdity of providing laptops to hungry children in villages where they don't have basic sanitation or reliable access to clean water. Microsoft founder Bill Gates has pointedly kept the focus of his philanthropic efforts to combatting disease. They also ask, what will happen when they break or don't have internet connections, hardly a rare occurrence in the Third World?
Environmentalists insist it will add toxic, hard-to-dispose of rubbish to piles in countries ill-equipped to recycle it. And others charge that the project has already failed to get to its goal - the $100 notional figure couldn't be reached, the XO costs $189. Finally, Negroponte all along had said it wouldn't be sold in the West but would be sold in bulk orders to Third World governments.
The criticism is misplaced. With the possible exception that the last thing the world needs is another cause-related piece of symbolic plastic the worthy Western middle class is expected to display.
But the laptop is less like those concerts headlined by Bono and Bob Geldof and more like their behind the scenes work influencing trade policy to level the playing pitch for Third World farmers: it's something that may actually make a difference. The very exposure to the basic tools of the information age at least gives those children an opportunity to escape the poverty trap by acquiring skills and access to the global economy in this life, not in some distant future.
When they break, the XO is designed for easy repair by the kids themselves. (See a video of an 8 year old replacing the motherboard http://blogs.techrepublic.com.com/tech-news/?p=1003). And when no wireless internet connection is present, the laptops automatically see each other - allowing for collaboration on shared lessons.
Far from being environmentally harmful, the XO laptop has so many energy-saving innovations that it is likely to influence the design of PCs and laptops generally. The very constraints of the project forced designers to innovate across a whole range of features, in fact.
Which leaves this somewhat questionable prospect of something that's been built as a serious tool for poor children becoming a toy for rich children. On November 12, the XO will be available for sale for just two weeks in the US and Canada, sold in pairs for $400. That money buys both laptops. One is shipped to you. The other laptop is donated.
The naysayers will continue carping on about it, but I think the XO is a breathtakingly smart bit of technology - more importantly, smart philanthropy. If the price is a few wristband-wearers swanning around with these little frog-like gadgets, it's well worth it.
The only catch is that there are as yet no announced plans to sell in Europe. But expect that to change soon. Maybe even before Christmas.

Richard Delevan is the business editor of the Sunday Tribune. rdelevan@tribune.ie

$100 a Barrel? If we're lucky

noreply@blogger.com (R. Delevan) — Mon, 22 Oct 2007 07:19:00 +0000

This column first appeared in the 21 October 2007 edition of the Sunday Tribune. As somebody who once predicted oil would be below $20 a barrel after the Iraq war, I should make clear this is not investment advice. I take all my advice from a dart-throwing chimp anyway.

From the bottom of the barrel to the top
Richard Delevan

SO, will oil hit $100 a barrel next week?

Well, the price for oil is determined by the last barrel sold. Like any traded commodity, the market price for oil reflects the balance between supply and demand. Demandwise, we're using a lot of oil.

Economic growth means greater demand, and despite some wobbles, the US (the biggest consumer of oil) continues to grow. China and India are also importing as much oil as they can.

Right now the world is pumping nearly all the oil it can, so supply is stretched.

Iraq has the third-biggest oil reserves in the world, most of it concentrated in the southern and northern parts of the country. The southern part is still pretty unstable, with Shi'ite militias vying with each other for regional control.

Yet it's in the south that Iraq is pumping what little oil it can . . . about two million barrels a day . . . and exporting it out of the Persian Gulf port of Basra.

The potential additional supply is in the northern part of Iraq. There is a barely used 600-mile-long pipeline going from the huge, but landlocked, oil field of Kirkuk, through Turkey, to the Mediterranean coast port of Ceyhan.

Until now, the northern part of Iraq has been stable . . . or what passes for stable in Iraq.

Iraq's five million Kurds are concentrated in the north. The US invasion in 2003 simply took away some of the last constraints on their autonomy.

For more than 15 years, they have been more or less selfgoverning. The Kurdistan Regional Government functions, more or less. Despite lacking a financial system, Kurdish cities are booming.

In September, property developers with more cojones than Sean Dunne broke ground on a $55m five-star luxury hotel in the Kurdish city of Erbil.

Kurds have two brand new international airports. Rather than wait for squabbling politicians from Iraq's factions to agree in Baghdad on an oil law, the Kurds passed their own and started divvying out exploration contracts to Norwegian, Canadian, French and US oil firms. There was just about enough production to convince Western oil companies that oil could start to flow through the pipeline from Kirkuk, promising to add new capacity to the world's oil market.

The Kurdish part of Iraq is what Washington neocons had in mind when imagining what the country could be like after the war: prosperous, relatively liberal and relatively democratic for that part of the world, something to build on.

But last week, things went badly off the rails. The Turkish parliament voted overwhelmingly to authorise the army to enter northern Iraq to pursue Kurdish PKK rebels.

Southeastern Turkey has lots of Kurds, and the PKK has been fighting on and off for 20 years for independence or at least autonomy. Once the Kurds in northern Iraq had something resembling autonomy, Turkish Kurds began using it as a base.

Iraqi Kurds speak a different dialect, but many feel a sense of solidarity with their Turkish cousins.

Twice in the 1990s, the Turks crossed the border into northern Iraq to go after PKK rebels. In recent months, the Turkish army alleges that the PKK has stepped up attacks.

A 7 October attack killed 13 Turkish soldiers. The Turkish government and military are under increasing and understandable pressure to do something about it.

In the background is an even bigger threat. Kirkuk, the oil-rich centre measured above, is sometimes called the 'Kurdish Jerusalem'. Saddam's policy was to 'Arabise' the town, by transplanting Arab-speakers from the country's south. Since 2003, the Kurds have come back. A referendum was scheduled for around now to determine whether Kirkuk would come under the authority of the Kurdish Regional Government.

The outcome is a forgone conclusion, but without a national Iraqi deal to share the oil profits, there is little chance of it being scheduled.

So the pressure continues to mount.

As it enters its last year in office, the best the Bush administration can hope for is to try and keep Kurdish Iraq from looking like the rest of the fiasco, keep the Turks out and get a deal done that secures a decent future at least for the Kurds.

But you wouldn't trust these guys to pour water out of a bucket if the instructions were written on the bottom.

So yeah, we're going to see $100 oil. Soon. So fill up your petrol tank and stock up on canned goods. It gets worse from here.

rdelevan@tribune.ie

Philing the Gaps on US Foreign Policy

noreply@blogger.com (R. Delevan) — Mon, 15 Oct 2007 09:48:00 +0000

This column first appeared in the Sunday Tribune on 14 October 2007.

Richard Delevan

Philing the gaps in US foreign policy

WHAT it lacks in decorum it's made up for in decolletage, but the world's oldest debating society ain't what it used to be. For a debate last Thursday, Trinity's Philosophical Society drafted in -- from Washington, New York, London and Dublin -- several serious and influential analysts of American foreign policy.

And Carole Coleman, RTE's former Michael Moorette.

Formal attire for guests and officers leads to some comedy. In an oversized hall, young men whose voices have just about stopped changing swan in ill-fitting dinner jackets. Their satinwrapped female colleagues sported Oscar-night-worthy cleavage, tittering as a pubescent chap read out minutes of the previous meeting with jokes on syphillis, Nymphomaniacs Anonymous and "Club Philth", as wine flowed and beer warmed. For those unimpressed with the awkward sexuality of today's Trinners, there was a racy flirtation with anti-Semitism.

Student Brian O'Beirne read a lengthy paper that was in essence a summary -- a poor one -- of a recent book by two American academics, John Mearsheimer and Stephen Walt. Mearsheimer-Walt argue, a priori, that the US's support of Israel may have made sense during the Cold War, but now lacks strategic or moral rationale and has made the US a target for Arab hatred and terrorist attack. Therefore, they leap, American support for Israel can only be explained by the power of "the lobby" (the missing adjective being either Jewish or proIsrael). They conclude, in a tradition harking back to the Protocols of the Elders of Zion, that 'the Jews' (under currently more acceptable label The Neocons) tricked the US into invading Iraq against its own best interests.

The format, as the American guests seemed surprised to learn, is for guests to respond to the paper and field constant interruptions . . . which in this case had little to do with the topic they were invited to address. The first speaker, Joshua Muravchik, of Washington's American Enterprise Institute and a leading Neocon, was quite overwhelmed by what he clearly felt was an ambush. As a former chairman of the Young People's Socialist League in the '60s, Muravchik should be used to fluid floor-debate, but he did himself few favours in spluttering rebuttals.

Next came once and future Dail candidate and Irish AntiWar Movement boss Richard Boyd Barrett -- now one of Ireland's most articulate speakers after five years in the public eye -- who started by distancing himself from the paper, declaring a "slight danger" of sliding into an anti-Semitic critique of US foreign policy.

Note to The Phil: when Boyd Barrett . . . who this weekend planned an event around a top propagandist for terrorist group Hezbollah (denied an entry visa by the Irish government) . . . says your views are unacceptable, you've got problems.

Some of Boyd Barrett's own critique of American foreign policy is spot on: that the US has propped up despotic Arab regimes to keep the oil flowing, a much bigger problem than the US-Israel relationship. He may not realise it's the same critique offered by some Neocons. Where he takes the argument from there . . . that it's all really about China . . . gets batty, but his views are at least arrived at honestly.

The evening really did threaten to be merely a depressing display of how shabby and shallow the scions of Ireland's elite can be, until James Risen from The New York Times spoke.

Risen politely dubbed the proceedings "entertaining" and expressed his thanks for the opportunity to visit Ireland and discover his Monaghan roots, delivered in a way that made clear he was unlikely to come back.

His own analysis of how things got this bad is both the most credible and the most informed of any you're likely to hear. For 18 months, US foreign policy was unmoored from its institutional base and was personally freelanced, day-to-day, by George Bush and Dick Cheney. Ignoring decades of built-up expertise, extraordinarily bad decisions were made. The utter failure to articulate a credible rationale for the war in Iraq -- instead building a case on non-existent WMDs -- left a vacuum filled by every kind of conspiracy theory, from 'the Jews' to 'the oil' to whatever you're having yourself.

Dumb is always a less satisfying explanation than Evil.

And definitely less sexy. So unlikely to be recorded in the minutes of the world's oldest debating society.

rdelevan@tribune.ie

Eircom's Broadband deja vu Ring

noreply@blogger.com (R. Delevan) — Sun, 07 Oct 2007 10:32:00 +0000

This column first appeared in the Sunday Tribune on 7 October 2007.

When money talks, competition walks

Richard Delevan

IRISH-American bank robber Willie Sutton became a folk hero not because he was particularly good at getting away with robbing banks (he was actually better at jailbreaks). It was his perverse wit. Why did he rob banks? "Because that's where the money is."

Sutton's Law is generally a useful tool for analysing why people do what they do and predict what they might do next.

Companies are just groups of people, where decisions are ultimately taken by just a small group or even one person. If you want to know why a company is doing something, the answer is almost never some hexagonal conspiracy that keeps Oliver Stone in work or keeps the Shell to Sea campaigners up at night. Companies do things to make money.

So what can we make of the latest dark mutterings from Eircom, who last week left open the exquisitely perverse prospect that it would sue the government to stop it building more broadband networks.

This former arm of the state made itself a poster child for market failure, failing to provide enough broadband, fast enough, to enough of Ireland.

To, in part, make up for the market failure, the government in 2005 did something unexpectedly bright. If Eircom wouldn't build in more capacity, the state would. So the government decided to build Metropolitan Area Networks (MANs) . . . rings of fibreoptic cable around towns, offering greater connectivity.

Now Eircom is reportedly considering legal action to kill the MANs. Some observers assumed . . . wrongly . . . that this was an old threat recycled on a slow news day and not to be taken seriously. But Eircom sources say that all options remain on the table to stop the government from creating what they see as an unfair competitor.

Arguments are being sharpened up: it's a waste of money, it's old technology; it's unfairly helping Eircom's competitors; it breaches EU competition law. Some will wind up in newspaper articles and on blogs. Some could end up in a complaint to Brussels.

Some could wind up in court.

The only certain thing is that Eircom isn't going to stop trying to undermine the project.

Why? Why would Eircom, under its newish Australian owners Babcock & Brown and PR-savvy chairman Pierre Danon, risk being seen as broadband spoilers? Taking its sweet time to offer worldclass high-speed broadband to the huddled masses yearning for movie downloads was one thing. But to take anybody else who tries to court in order to stop them, whining about how unfair it is? That's the PR equivalent of a suicide bomb.

The way to the answer is to apply Sutton's Law. Sure enough, we learn that Eircom's owners have taken the first step towards breaking itself up into two or three parts: the wholesale network business and the retail business, which could be split between the Eircom landline and retail broadband operator and Meteor mobile. Having bought the whole package for 2.4bn 18 months ago, Babcock & Brown could get 1.8bn back by selling the retail parts they don't want.

Babcock & Brown want to keep the wholesale part.

Because that's where the money is.

There are dozens of retail telecoms operations in Ireland.

But there is little effective competition at a wholesale level.

Outside of Dublin, in towns where they are available, many of the retailers use the MANs . . . the government-owned fibre rings administered by a firm called e|net . . . to connect up big customers for broadbands.

Otherwise, effectively they are stuck re-selling space on Eircom's network.

So if Babcock & Brown dispose of the messy, low-margin Eircom business of dealing with the masses, they can focus on what they do best . . . a higher-margin, more predictable cashflow wholesale business.

Eircom promise that this would free them up to ramp up investment in the network, and move us up international internet league tables away from Albania and closer to South Korea.

But they can do so, comfortable in the knowledge that they have a nice profit margin to lean on and borrow against, only if they don't have to worry about competition. If they can stop the government from completing the MANs and no other company is willing to out-spend them, Eircom (or whatever it winds up being called) will go back to being what they were before Telecom Eireann was priviatised in the first place: a highly lucrative near-monopoly.

Because that's where the money is.

rdelevan@tribune.ie

The Sputnik Effect

noreply@blogger.com (R. Delevan) — Thu, 04 Oct 2007 11:41:00 +0000

This column first appeared in Business & Finance in October 2007.

THE SPUTNIK EFFECT
Richard Delevan

Earlier this year I spoke at length with a senior official in the business of promoting Ireland as an international centre for research and technology. We were discussing what particular industry areas and research fields the country could and should invest its resources and time in attracting the international capital and talent. It's very much a policy of let a thousand flowers bloom and see what grows, with a few key exceptions.

Years ago, for example, the consensus in the Irish policymaking community settled on information and communications technology and biotech.

Now the most pressing issues of research, the ones on which not just our prosperity but a whole lot more depend, are in the areas of energy. There are a surprising number of areas in that space in which Irish R&D could play a leading role. Even though our electricity grid has been slow on the uptake for wind power, we're catching up fast with how to build windfarms quickly. A line of research led by Dr Maria Tuohy at NUI Galway has made progress towards the Holy Grail of alternative energy - producing enzymes that could lead to a new generation of biofuels made from agricultural waste, not crops that would otherwise be used for food.
But there's little real sense of urgency, despite oil selling at $82 a barrel. Not just here but in the West generally.
The metaphor that's almost always used to describe the sort of challenge required to solve the energy dilemma is the Apollo Programme that saw the United States land a man on the Moon and return him safely to the earth.
So I mentioned this to the senior official. Later in the conversation, we talked about Ireland's most important competitors for international capital and talent for R&D. Singapore and Switzerland are perhaps our most potent rivals. What would it take for us to mobilise our resources with a real sense of urgency? How do you get an Apollo?
Simple, the official replied. We need a Sputnik. You don't get an Apollo programme without a Sputnik.
Sputnik, the first man-made satellite placed in orbit around the world, was launched by the Soviet Union 50 years ago this month. In simple terms it was a relatively crude device. Its major feat was to transmit a radio signal for a dozen revolutions without de-orbiting and burning up in the atmosphere. But the psychological implications for the United States were startling. Its sense of security fractured. The good news was that its response was constructive, generating the biggest push in science and techology study in American history and fostering the generation of sceintists and engineers who would eventually flood complementary fields like computer software.
But since the conversation with the senior official I've tried to puzzle out what an Irish version of Sputnik would be. What event could have the right blow to Ireland's self image to motivate it to rapid improvement? Too hard a blow would simply destroy confidence. Too soft a blow would be shrugged off.
Would it be the loss of a major R&D investment project, like the announcement that Amgen's biopharma facility in Cork would be abandoned? That scenario doesn't require us to imagine, but it seems unlikely to produce that result. But there are enough long-term worries about rising costs eating into competitiveness and hurting Ireland's ability to attract and retain investment over the long term that, as a class of possible events, it seems most likley to produce the Sputnik effect. Earlier this year a survey conducted for the American Chamber of Commerce revealed that more than 40% of US-owned businesses in Ireland were in early 2007 considereing at least a partial pullout from Ireland. The loss of all or a large part of Dell, Intel or Microsoft would send profound shock waves through the whole sector here.
I'm still a little fuzzy on how exactly this translates into more science and engineering graduates, but the shock at the loss would certainly be disturbing and will either prompt people to study harder or dust off the rucksack and look for another Lonely Planet guide.
The main difficulty when - not if - one of the major Irish ICT success stories is no more and we have our Sputnik moment? That will be to convince people that the sky is not actually falling, and that the future is still

Richard Delevan is the business editor of the Sunday Tribune, rdelevan@tribune.ie

Heroes whose debt needs to be repaid

noreply@blogger.com (R. Delevan) — Sun, 30 Sep 2007 10:58:00 +0000

This column first appeared in the Sunday Tribune on 30 September 2007.

Heroes whose debt needs to be repaid
Richard Delevan

Two firefighters made the ultimate sacrifice last week . . . hopefully, it need not have been in vain

I VISITED the day after.

It was on my way home from work on Thursday.

Off the Dart. Through Bray. Over the bridge across the Dargle. The mountain ridgeline to the west outlined in pink. Kids in the People's Park getting in some football before the light fades.

At the disused factory at Adelaide Villas, a knot of people. Closer. The air thick with charcoal and day-old roses. A woman makes the sign of the cross. A man with a thick moustache and skin the colour of caramel holds the hand of a small boy with dark curls under a red ballcap as they stare at the site. The boy looks up and speaks in a language I can't understand but I see son look at father and father bite his lip and nod, and now I know the question: "This is where they died?"

At my feet, on the corner, are orderly ranks of bouquets by the dozen. Right at the front there's a green wrap bursting with white, red and purple with a card that begins "To the Greatest 'Da' ever".

Signed on behalf of "8 sons, 7 daughters and 7 grandchildren".

Brian Murray (46) and Mark O'Shaughnessy (26).

The two Bray firefighters who lost their lives on Wednesday when the roof collapsed in the building they were in.

It was only a few days earlier we moved into our house, a football pitch's length away from the fire.

Murray was a builder, it's reported. It's possible that as we got bits and pieces at the builders' yard or Woodies DIY off the Boghall Road, we brushed shoulders.

It doesn't diminish their sacrifice to recognise that their deaths have raised questions about the level of fire service in Co Wicklow. Just 15 "retained" firefighters . . . on call, not full-time . . . are available to all call-outs in Bray and its environs, covering 34,000 people. That amounted to 232 incidents in 2005, the last year for which statistics are available.

Last March, Wicklow County Council published a feasibility study of full-time fire cover in Bray, noting that population centres of comparable size in Meath, Louth and Waterford had at least some full-time cover.

The current system was already under pressure: "there have been difficulties in the past in maintaining a full complement [of 15 firefighters].

This problem is not unique to Bray. There is an emerging belief, nationally, that it may be necessary to restructure some retained services, so that firefighters may be available for different periods of time as opposed to the present system of general availabilityf" Brian Murray's wife, Mary, told the Press Association: "This week, there has been uproar about what has happened in Bray.

Next week, it will be forgotten. I want to know how many more will it take before we put a full-time service into Bray."

Ireland hasn't lost firefighters in the line since 1936.

Their sacrifice won't be forgotten; but it's all too possible it will be ignored by politicians when it matters.

Professionalising fire services is a worldwide trend. It goes hand in hand with higher population densities and more traffic and it's surprising it hasn't yet happened in Bray.

But there are other lessons.

This was long a brownfield site, neglected while furniture residues and the dumped rubbish it was attracting were becoming dry tinder. Why wasn't it addressed sooner?

Most boys, at some point, want to grow up to be firemen. Probably because what they do is an almost uniquely simple and uncomplicated thing of good. They face danger and save lives.

Brian Murray and Mark O'Shaughnessy died to protect us: the just and the unjust, the commuter and the retired, the old and the young, the native-born and the immigrant. They died protecting my wife and my baby boys when I wasn't there. People they didn't know and probably never have met.

They owed us nothing, yet they gave their lives.

In an age when men are small and talk is action, they were giants and they are heroes. The place where they fell is hallowed ground.

Simple decency requires we listen to Brian Murray's widow.

Common sense requires we heed her call. It can't begin to repay what we owe, but it's a start.

rdelevan@tribune.ie

Apple Needs to Get Back to its Core

noreply@blogger.com (R. Delevan) — Sun, 23 Sep 2007 11:44:00 +0000

This column first appeared in Business & Finance in September 2007.
Richard Delevan

Shoppers at the flagship Apple Store on Regent Street in the West End of London were not amused last week when they found their path blocked by burly-looking men in black and the shop's windows dressed in similarly opaque attire. But the high security was hardly necessary. Unlike crowds of fans in San Francisco or New York, the throng of pilgrims seeking a glimpse of London's first native iPhones weren't pressing forward like the front line of a festival mosh pit. Shoppers stopped for a moment to attempt to spot Steve Jobs or his new phone, but there was no pushing or shoving.
The muted welcome for the iPhone in London was never going to live up to the US launch, the hype around which would have pushed the Second Coming off the front page. In part this is because the world has seen iPhones, even in this part of the world. A shop on the Isle of Man even offers one for sale.
Another reason for the anti-climax of the European unveiling was the lack of mystery over the other main news point: which network was going to have the right to exclusively sell the iPhone for a couple of years. The Financial Times reported in July that Telefonica-owned O2 had clinched a deal - reflected in the deflation in the shareprice of Vodafone, which in late June had enjoyed a fillip on rumours it was close to the iPhone deal. As it turns out, the reasons Vodafone dropped out now become obvious. O2 proved willing to part with 40% of the price charged for calls to subscribers and share it with Apple. And like Apple's exclusive relationship with AT&T in the US, unless you're a reasonably accomplished hacker, you're unlikely to be able to use the iPhone on a network other than the one Steve Jobs wants you to use.
Two final reasons that Apple's UK launch had only a faint echo of the American cheers: The version of the iPhone to be sold in Europe this year won't be able to access the broadband-speed 3G networks, but only the GPRS technology that will seem crushingly slow to most users. And the iPhone itself is an iconic "locked-down" digital appliance mentioned in a previous column. Only the applications Steve Jobs wants you to have are the ones you can load onto the phone - a stark contrast to competing phones such as the Nokia N95, with music players, cameras and GPS.
In fact, from beginning to end, the iPhone demands that the only choice you as a consumer can have is whether or not to plonk down the more than €1,000 for the privilege of ownership.
It's occurred to some - fed, no doubt, by Vodafone's vengeful PR spirits bitter about its loss to O2 - that the iPhone's European launch could see Apple doing dramatically wrong-footed marketing for the first time in years.
In fact, the message that comes across from the iPhone seems an eerie opposite of the Apple brand values that captured the imagination of so many 23 years ago. Apple introduced its revolutionary Macintosh personal computer with a TV advert by famed film director Ridley Scott. It featured a tank top-clad woman with a sledgehammer running through an Orwellian dystopia of workers forced to stare at the same mind-numbing screen - until the female runner smashes the screen. The not-so-subtle message - Apple's technology will set you free.
This columnist has, since first seeing that advert - lo these many years ago - been an avowed Apple fan. And we admit that we were swept along in some of the initial euphoria - until it was clear that we'd know the identity of the next US president before we're likely to be able to purchase an iPhone in Ireland.
But we can't help but notice that the iPhone launch in Europe signals an outright abandonment of that original message. The iPhone is deliberately limited to just a small fraction of what it would be capable of it were opened up to outside developers and if buyers were not locked into an exclusive network in each market.
It's a point that Apple really ought to take on board - the whole idea of its corporate brand is threatened by the way its latest, greatest innovation is being sold.
Free the iPhone! seems an unlikely slogan for T-shirts, but you never know.

Richard Delevan is business editor of the Sunday Tribune. rdelevan@tribune.ie

David McWilliams' Optimism Overdrive

noreply@blogger.com (R. Delevan) — Sun, 23 Sep 2007 11:09:00 +0000

This column first appeared in the Sunday Tribune on 23 September 2007.

Finding hope in the whole wide world
Richard Delevan

DAVID McWilliams gets a lot of stick. Wannabe cheap-shot hacks, unable to forgive themselves for not getting off their arse in their 30s to write a non-chick-lit book that punters actually buy, accuse him of stealing all his ideas. Swaggering pols and snooty vested interests, having previously suggested that any commentator who doesn't mindlessly cheerlead for the economy should douse herself with petrol and spark a one-woman auto-da-fe in front of Leinster House, now content themselves with the sneering dismissal that any dissenter knows nothing about nothing.

The former I can forgive, for in a trade fuelled by malice and spite, who amongst us does not die a little inside when someone we know does well? (But those critics do need to change the record. For the ignorant still bought into the plagiarism slander, McWilliams is using demographic profiling common to marketers for 30 years and used by others, most recently in Microtrends: The Small Forces Behind Tomorrow's Big Changes, by Mark Penn, CEO of PR giant Burson-Marsteller and Hilary Clinton's adviser. ) But the latter . . . who pretend to believe that McWilliams is some idiot doom merchant willing the Irish economy to implode . . . are just embarrassing themselves with the magnitude of their error.

McWilliams' problem is not that he's an irrational pessimist. It's that he's irrationally exuberant about Ireland's future potential.

Specifically, to secure a new, prosperous Hibernia for this century, McWilliams calls for an Israeli-inspired "right of return", a proposal to turn Mary Robinson's Diaspora sentiment into an immigration policy. Having communed with the far-flung reaches of Greater Ireland . . . from the rejected repatriate Geoghegan sisters of Buenos Aires, to Wayne Rooney's Scotty Road Liverpool nan, to supremely tanned snowbird CEO Jack Welch . . . McWilliams senses a hunger for identity amongst this Global (Lost) Tribe. With 70-odd-million of them scattered around the richer parts of the world, Ireland is the Saudi Arabia of social networks.

In The Generation Game, McWilliams proffers a bargain to wayward Irish-Americans, told from boyhood that they are Irish, sent to the University of Notre Dame and aching for authenticity: "We can save their soul and they can build our economy."

Ireland welcomed tens of thousands of Yanks already . . .though most of them would have more affinity with the brand of their multinational finance, tech or pharmaceutical corporate employer than with brand Ireland. Most rotate through, leaving no more trace than a carbon footprint and a legacy of better coffee and bagels.

Some of us came for the drink and stayed for the company, even when the knowledge that you're not going 'home' to the US leads some to drop the failte pretence.

The fundamental and irreducible question is whether the society we've been invited to join is prepared to accept us as full members. As the saying goes, you import workers and you get people.

Indeed, there are Laverys and Barringtons who, with the effortlessness of aristos, can float back into acceptance. But for others, integration isn't so simple. Take the descendant of John Cullen, a Blackrock College boy from Stillorgan who got himself a gig digging New York's Subway tunnels by turning up, grabbing a pickaxe and refusing to leave on payday -- that week and for the next 30 years -- until he held the wages for a job he was never offered.

Cullen's grandson weds in the same church that baptised de Valera, St Agnes on E43rd Street. His son has said emerald-tinted boyhood complete with cupla focail, four years of student section cheering the Fighting Irish and fumbling awkwardly with the girls of St Mary's College, some tentative strolls through the celtic twilight. A century after his Cullen ancestor left, our nonIrish-passport test case returns to celtic tiger Dublin.

Basically, McWilliams wants Ireland to import more of... me. Well, actually he'd prefer better, brighter, more productive versions of me, and I have doubts as to how many of me the Irish market will bear. But it's a problem, because . . . as in Israel . . . the descendants of returnees and of those who stayed don't always make a "perfect fusion".

The reason there are few optimists in Europe is that most of them moved to the US. Ireland imposes an import tariff on hope. Some of us Global Tribesmen are willing to pay. But probably not as many as McWilliams hopes.

rdelevan@tribune.ie

Anita Roddick and Green Capitalism

noreply@blogger.com (R. Delevan) — Sun, 16 Sep 2007 11:30:00 +0000

This column first appeared in the Sunday Tribune on 16 September 2007.

The business end of saving the planet
Richard Delevan

WHEN Body Shop founder Anita Roddick passed away last week aged 64, the obits told the tale of how her ethic of green capitalism travelled from fringe to mainstream.

Now her ideas, once dismissed as anti-business, nestle comfortably on the business pages.

This year is a watershed for green ideas in business. In Ireland, Green Party ministers have turned out to be acceptable not only to voters and Fianna Fail but to many in the business community who see more opportunities than threats in the coming changes. At a Peak Oil conference in Cork this week, the Greens' Eamon Ryan will be joined by the decidedly non-hippy Micheal Martin.

Merrill Lynch unveiled an investment strategy arguing that companies working fastest to reduce their "carbon intensity" will turn out to be the best-managed and outperform the market.

Behind the new pragmatism, however, there has always been an apocalyptic strain to green thinking.

Human activity has driven the world . . . whether you see it as Creation or Gaia . . . to the brink.

The day of reckoning is nigh.

Until the more pragmatic brand of green thinking we've seen lately, the apocalyptic vision was a key way of motivating people to change their behaviour. Whether it's Al Gore's climate movie An Inconvenient Truth demanding little more than a change of lightbulbs, or the protestors outside Heathrow Airport demanding an end to air travel, the basis of the appeal is a moral one: we caused this problem. And if that doesn't convince you that we have a responsibility to solve it, perhaps the threat of doomsday will. It's no coincidence speeches from many environmentalists eerily echo medieval sermons about hellfire and eternal damnation.

Even now, behind the plans for shiny windfarms, solar panels and biofuels, that narrative . . . and the perverse thrill of contemplating destruction on a massive scale . . . still has power. There's evidence that even the greatest eco-sinners of all, Americans, seek redemption.

All summer, US bestseller lists have been topped with a surprise hit that takes as its starting point our total extinction. The World Without Us, by Alan Weisman, sketches an Earth in which humanity has disappeared. Not in a long, drawn-out climate collapse that takes the planet's other species with it. Just us. The cause isn't what concerns Weisman. A 28 Days Later type virus that wipes out humans works just as well as a Book of Revelations-style Rapture.

As someone who has spent his career covering everything from disappearing ozone over Antarctica to disappearing ice cap in the Arctic and lots in between, Weisman is interested in what would happen next. He paints an expert picture of what happens . . . and how long it would take for evidence of our existence to fade.

It would take just days, he predicts, for the New York City subway system to flood, once its 800 pumps stopped working. In a few years many of its streets would collapse. In a few decades, Manhattan Island would once again be home to coyotes, deer and bear.

While within 20,000 years, most artefacts of human experience would be wiped away, some would remain. Ceramics and bronze would last. But mostly, the billion tons of plastic we've produced would stick around . . . because no microbe has yet evolved to break them down.

Reviewers . . . and millions of readers . . . have found Weisman's post-apocalypse strangely comforting. The planet will get along fine without us, thanks.

His conclusion is that, in order to really reduce our impact on the environment, there needs to be less of us. So we should just stop having children. Or at least limit each couple to one child. In that case, the human population would drop to just over 1bn in decades.

It's prompted a revival of some less comforting thinking, like the Voluntary Human Extinction Movement, which asks people to "stop breeding" altogether.

If this kind of thinking gains popularity among greens, mass suicide instead of redemption, you can keep your Kool-Aid and count me out.

The coming conflict between our desire to save the planet and our survival instinct is one that pioneers like Anita Roddick have seen coming.

"It's going to be an interesting one, the environment versus human rights, " she told me in an interview last year.

She was clear where she came down: "For me it's always human rights and it's poverty eradication."

Amen.

rdelevan@tribune.ie

Kosovo's Messy Future

noreply@blogger.com (R. Delevan) — Sun, 09 Sep 2007 11:32:00 +0000

This column first appeared in the Sunday Tribune on 9 September 2007.

Richard Delevan

INTERNATIONAL relations used to be a lot neater. You had war, and you had peace.

Each state of relations between two sovereigns even had the now-quaint simplicity of being declared. Life was nasty, brutish and short in the international anarchy. But at least, like with gravity, you knew where you stood and what would happen when you stepped off the cliff.

For about 100 years, though, the international community has in its wisdom decided that war is bad and that international violence must have some quasi-legal sanction in order to be legitimate.

All probably for the best. Less killing over where the border is and all that. But it does present opportunities for bizarre outcomes that seem to defy the laws of nature. You go over the cliff but you don't fall.

This is true in a lot of cases.

Most aren't all that comic.

'Refugee camps' in the Palestinian territories are in some cases more permanent than most schools in Diswellstown are likely to be. China can be conquered by Communist revolutionaries but it takes 30 years for the world to officially take note of the government of its largest country. But on the assumption that the status quo is generally better than the (generally even bloodier) alternatives, we allow seemingly unnatural situations to get permanance.

Recently in Iraq some of the biggest players in the power game decided to give war a chance. That hasn't worked out. So we're back to the idea that lawyers, rather than soldiers, should be the ones fighting. (Personally I'm all for shooting lawyers, but most people may see it as a less literal form of combat. ) Bookending the 21st century's short retro experiment with freelance international violence is Kosovo. After Serbia's crackdown on ethnic Albanians in Kosovo, a Natoled 78-day bombing and cyberwarfare campaign compelled a Serbian withdrawal from the province. Though the action did not initially have UN approval, Kosovo in 1999 was declared a UN protectorate, even though technically still part of Serbia.

And that's pretty much where things have stayed.

There have been several UN administrations of varying success. Nato has maintained its muscle in the area, but it's not officially a Nato force. An Irish general is in fact the current commander of the force. Infrastructure has improved, though not fast enough for some residents. The ESB's international unit was in Kosovo on a contract to help improve the nation's power systems, with mixed reviews as to the results. But the situation has remained largely static since 1999. Kosovo is the Wile E Coyote of international relations. And as we know from the Road Runner cartoons, if you're defying gravity's logic as you're pumping your legs over the abyss, the key is to not look down. The problem is that a good number of people in Kosovo are starting to wonder how long their feet can keep levitating.

The impact on the canyon floor is scheduled for 10 December, when in the absence of internationally negotiated agreement over Kosovo, the locals look set to declare independence. This may go down well with the 90% of inhabitants who are ethnic Albanians. But it won't be something the Serbian enclave in the north is likely to approve of . . . much less Serbia itself.

Last week, the ground seemed to be coming up pretty fast. The Serbs, emboldened by their Russian ethnic cousins, made noises about keeping Kosovo by force. No one seriously thinks Belgrade is ready for a second round with Nato . . . the US may be pretty stretched in Iraq and Afghanistan but it's not about to surrender to Serbia . . . but the threat highlights the situation's deadlock.

Partition of Kosovo may become the preferred option, with the northern Serb-dominated enclave remaining part of Serbia and the rump free to eventually seek EU membership or to become the bestrun part of Albania. As an Irish commanding general would know, partition can be as tricky as any other solution, but it seems to offer the prospect of a settlement . . . with the idea that all of the parts would be integrated into the Nato-EU security-economic system.

It will be a key test to see if partition is something the international system can do these days. Kosovo may be a test case for future partitions in Iraq and South Sudan.

Until then, some advice for our man in Kosovo, brigadier general Gerry Hegarty: don't look down.

rdelevan@tribune.ie

Q&A with 1999 Nobel Economist Robert Mundell

noreply@blogger.com (R. Delevan) — Sun, 02 Sep 2007 11:52:00 +0000

I had the chance to speak with Robert Mundell at UCD's inaugural Confucius Institute conference, following his keynote address, for the Tribune. On the premise that if you're getting past the second question you've got some interest in the subject, I haven't explained every reference, but I've tried to add as many links as possible here for references I don't explain.

Some of Mundell's more intriguing notions:

that the 1985 Plaza Accord that allowed the Japanese Yen to rocket in value against the US Dollar - and probably helped wreck the Japanese economy - may not have been just a happy accident
that the Chinese shouldn't revalue their own currency
Europe is pretty much screwed
there will one day be a global currency

RICHARD DELEVAN'S Q&A WITH ROBERT MUNDELL

Sunday Tribune: First can I say I'm a big fan of your work, and not just the David Letterman appearances. Though the readings from Paris Hilton's autobiography were particularly good..

You're considered the 'father of the euro'. This year there were more euros in circulation than dollars, a huge milestone for a currency just a few years old. Are you a proud papa . . . proud that the currency you helped bring about has reached that milestone?

Mundell: Yeah. I have great gratification just to see it. I thought it would be almost necessary for Europe, a very good thing for Europe, and it's proven to be so.

ST: Does it matter that China is diversifying out of US treasuries and into other asset classes . . . for example, investing in the private equity group Blackstone before its IPO - and prior to that, the failed attempt to buy UNOCAL? What effect does that have? Does it mean anything?

Is it something we should be watching?

Mundell: I think what China has done is to inaugurate a new system of sovereign wealth funds, which are being talked about now and generalised and recognised as an important thing. China didn't invent this. Countries like Venezuela and others earlier on had funds when they had big oil reserves or something like that. China's the first in the non-oil category.

Also in the background in the 1960s, countries like Canada had a Canada development fund they could use for national purposes in some way. What makes China's significant is the huge power that China has. It has huge size.

So I think it's something that people are going to have to watch. They'll have to look and see how this goes.

ST: Is that something you think may be the trigger for a greater backlash, like the backlash against the Japanese acquisition of trophy assets than the '80s or early '90s?

Mundell: I think the Chinese recognise that they have to be careful to do this in a non-political way, to put a non-political face on this. The way they've done it with Blackstone is partly that. They haven't brandished it. They're not going to flaunt this.

Of course you'll have private advisers who will want to make some publicity and make a big thing of it, but I think the Chinese government is not going to want to do that.

But certainly control of a trillion dollars of US assets itself is a very substantial amount.

I think it has that big an effect on the bond market, for example. China can now carry out open market operations in the United States. It can carry out American monetary policy by its own activities.

ST: That's interesting. Is that something that will increase or decrease as China diversifies into other asset classes? Will China's effective open market power over US monetary policy increase or decrease?

Mundell: My guess is that what they're going to do is increasingly use marginal amounts . . .not to slow down or keep their own reserves and then call these something else. Put a different name on these so they don't count as reserves. So nominally they have only $1.2 or $1.3 trillion in reserves. Then they'll have another set of funds they will take for further increase of that.

You may remember that China took $45bn of its reserves and used it to dress up the assets of the Bank of China and the China Construction Bank . . . they divided it in half and gave them $22.5bn each. And that was one use they made of that. We're going to see a lot of countries that are in a position do that sort of thing . . . maybe Russia. If they have the power to do it, they might use it for some monopolistic purposes, in ways that. . . you think of the takeover funds that companies have. Take $10bn, $20bn, $30bn, it's a huge amount. But we're dealing with $200bn or more with China.

I think we just have to watch this. It's unprecedented. We don't know which way it's going to go. I believe China wants to be thought of as, to use someone else's phrase, a responsible stakeholder, and use that to operate. China now knows it does have the power to impact on the system and needs to use that in an advisable way.

They're certainly not going to do what some adviser suggested, to dump [US] treasury assets if Americans become more protectionist. That would be so stupid if they did it, I can't believe they would ever be that stupid.

The American power with respect to China is so enormous, to cut off the source of trade surplus of China, you cut off the gravy train that's making all of this possible.

ST: You think China should not allow its currency to appreciate against the US dollar, certainly not by 40%. Do you think, even if it wanted to, the US could force China to do this, or is it really China's decision?

Mundell: The US has the power itself to buy RNB and put the RNB up where it wants . . . put the dollar back down to 5 1/2, which it was at before 1994. It could do that. But in the process it would have to collect its own quantity of these, and that would itself be a substantial amount and it would be inflationary to do it.

In other words, if it bought RNBs this would create an equivalent amount of reserves in the United States. They could turn around and try to sterilise it . . . with bonds or something else . . . but it would be a mess.

If they did this, it would be a monetary war.

Small countries can fix the exchange rate, but the big country can't do it. The US could fix the Canadian collar, Mexican dollar [sic];

it can keep those currencies higher if it wanted to. It could do the same with China. I just can't imagine the US ever doing it. It would totally disrupt the global monetary system, and the history of the US as the centre of the global monetary system.

ST: Do you think that US policy-makers look back at the Plaza Accord, and think, it kind of worked out nicely for us. It effectively took out Japan, a competitor on the global stage for 20 years, more. In your speech you were hedging whether you thought it was intentional. Do you think China has absorbed a lesson from that?

Mundell: I think that both in the case of Japan and China it's a stop-China policy . . . cut China off at the knees. There was a view in the administration . . . there was for a long time in the 1990s . . . that if the US has to fight another war it will be with China. Better to do that now before China becomes too powerful. No reason to deal with China with a velvet glove.

A confrontation wouldn't do any harm. Better to have a confrontation now than 25 years from now. It's a view, people have held that. That view, it's a model of the world, and it's not an incoherent model, as long as there's a single superpower, as long as the US is a benign superpower, that's the best the world can have. If you had China in the position of the United States it would never be a good world.

You could never trust China to act in the way the United States acts.

ST: You mentioned that between the 1950s and the 1970s, exports from Japan grew while exports from Britain fell. If there is to be a loser in that equation from Chinese exports. . . when you see German factories bought and moved lock, stock and barrel to the banks of the Yangtze. Is there a risk that Europe will be the main loser from China's rise?

Mundell: The Germans have a great machine tools industry. They don't think they're going to have much of this in 10 years' time . . . it's all going to China. Germany has been the great beneficiary of these machine tools exports. But these machine tools are producing the materials by which they will be replaced.

By the way, I don't think that Germany is likely to be, in the long run, the loser. Germany has enough freedom and flexibility that they'll find other things to do. They'll be able to evolve. It will be a weaker economy but it will remain one of the top economies, not in absolute size but in efficiency.

ST: At a recent Asia Society conference, you predicted that the dollar era would last another 100 years. But this morning you talked about the euro and the dollar being a bipolar system. So are the next 100 years a shared era between the dollar and the euro?

Mundell: The euro, in terms of total size, is of equal importance to the dollar in some ways.

But remember, in the long run, the European economy is not going to grow like the American economy. It's the end of population growth . . . at least for a while, until that resumes. And the older population doesn't pick up the new technology and grow innovations as rapidly as others.

Also Europe can't defend itself. It's not completely independent. It's still part-attached to the United States. Nato is what makes the Euro, in a curious way, strong. As long as Europe has Nato it has no problems of defence.

If they ever gave that up and decided it was no longer important, in the future the euro would go down. Europe is vulnerable because it's not completely independent. Like Japan, it depends on the American defence.

ST: What about Ireland? After years and years of very fast growth, Ireland is now going through a transition of its own. It is no longer a low-cost manufacturing base. Land is no longer cheap. Labour is no longer cheap. Is there anything to be learned, in terms of what's happening here after the phase of fast growth, about what might happen in China, say 10 or 15 years from now? People already say the deflationary effect [on world prices of manufactured goods] has tapered off, that the cost of manufacturing is creeping up. . .

Mundell: First, from the Irish standpoint. The Irish miracle is magnificent. After 1,000 years of having half or one-third the per-capita income of the UK, it has now surpassed that.

This is a great thing, what's happened to Ireland. The problem is, once you've achieved that success, and you become rich again, you get like everybody else. You are no longer unique.

China's still unique. China's got a base . . .it'll run out of skilled labour . . . but it has the ability. There's very low investment in education . . . like India too, very foolish, because you really need more education so that those older people are going to be able to survive in the cities, without government support). So that's the problem.

The education system is very low, and it's going to take time to correct that, and it's going to be very difficult to do.

ST: Professor, thank you so much for your time.

__________________________________________________________________________
Some other reporters were there and wrote about it:

Brendan Keenan, Group Business Editor of the Irish Independent, "Radical rethink may be needed to stop boom turning to bust"
Constantin Gurdgiev, group editor of Busines & Finance publications, also was there.

And I originally filed this news piece for the week of the event itself:
"EU may be headed for another China crisis", building on Mundell's prediction that the EU would be forced to re-impose tariffs on Chinese textiles in early 2008, a new battle of the "Bra Wars"

Ireland's Mickey Mouse Financial Wizards

noreply@blogger.com (R. Delevan) — Sun, 02 Sep 2007 09:22:00 +0000

This column first appeared in the 2 September 2007 edition of the Sunday Tribune. After this was written, Jon Ihle's front-page business story revealed that Irish authorities were warned about the worries being expressed by the German regulator as early as 2004.

Financial Alchemy Spells Disaster
Richard Delevan

THREE months ago in this space, at the end of a short list of national business and financial worries, I mentioned "Dublin's little-understood role in inflating a global liquidity bubble". This -- plus the fact this newspaper has pursued this story for months -- annoyed a few people, some of whom accused this newspaper and others of trying to undermine Ireland's reputation as a well-regulated global financial centre.

Turns out there were 17 billion items posing a far bigger risk to that reputation than a few journalists' questions.

The Financial Times broke the story last month that Dublin-based Ormond Quay, an unregulated conduit through which its owner, German bank Sachsen LB, invested in American subprime mortgages, required a 17bn bail out. That bank's CEO has resigned. The entire German banking sector is in turmoil. In part because of the "sloppily-run pig sty", to quote an expert, that was the Dublin operation.

Ireland has a lightly-regulated environment for international financial services which, along with our very favourable tax regime, we've been marketing to the world.

In a few years we became a world leader in the complex financial engineering alchemy called "securitisation".

This was supposed to be a good-news story for Ireland.

"I am pleased to be able to mark the success of the Irish securitisation sector, " Bertie Ahern said two years ago in a speech launching the Irish Securitisation Forum, a venture of our smartest bankers and the Irish Stock Exchange.

"It has demonstrated just how vibrant the Irish financial industry is and, when it is appropriately encouraged and supported, what it can deliver."

Now that things have turned out differently, everyone from government to the Financial Regulator to the banks to the Irish Stock Exchange are curiously unwilling to talk about the whole mess.

Some commentators have dubbed Dublin's light-touch regulation 'El Paso' . . . a sinister, unsafe place where no one is in charge. But I think that's overegging things. It's absurd and slightly unreal, more Beckett than a Western. And has just as hard a time getting an audience.

Nor is it just Dublin, though being ground zero for the European poster child of this crisis suggests we attracted the subprime end of the subprime debt securitisation trade.

The whole global financial system has been entranced with its own financial alchemy. Lead into gold. Subprime into prime. No-fault investing. Yield without risk. Too good to be true.

Meddling with forces they didn't really understand, furiously bright young lawyers, investment bankers and traders decided that the problem with Enron wasn't that they'd tried too much financial engineering but that they hadn't gone far enough.

Nobody seemed to understand the new financial wizardry. "No one really seems to understand them but the people involved in creating them, " Dan Freed, a senior writer at Investment Dealer's Digest, told the Washington Post. "They assure everybody that everything's going to be okay, and we are forced to believe them."

It makes me think of the sorcerer's apprentice, the old, old story made into a ballad by the German poet Goethe.

Made most popular by Disney in 1940 in the film Fantasia.

Mickey Mouse is left behind by his boss, the old wizard. Mickey is supposed to fetch pails of water. It's drudgery, so he enchants a broomstick to fetch the water for him. Because Mickey's not much good at this trick, the floor gets soaked. He tries to stop the broom, which continues to bring in buckets of water. Finally he tries chopping it in half with an axe.

Each piece becomes another full broomstick, and now they're bringing in twice as much water. It splits again and again, more and more torrents of water filling the wizard's hall. Just as our poor apprentice is about to drown, the old wizard appears and, scowling at his wayward protege, sets the world to rights with a wave of his wand.

We're about neck-deep in the water. The problem is that our Mickey Mouse financial wizards don't have an old sorcerer about to come home and sort it out. The usual suspects -- government, the Financial Regulators, the Irish Stock Exchange -- were wearing the mouse ears too.

rdelevan@tribune.ie

Making way for a kinder, gentler Saddam

noreply@blogger.com (R. Delevan) — Sun, 26 Aug 2007 11:46:00 +0000

This column first appeared in the 26 August 2007 edition of the Sunday Tribune.

Richard Delevan
"I HATE Iraq. I wish we had never gone to the place." Winston Churchill reached that conclusion in 1926 when asked for more funds to continue a tricky occupation.

On 15 September US commanding general David Petraeus reports progress about the "surge" . . . the last effort by the US military to establish security in Iraq.

As support among Americans for the war continues to decline, all sides are gearing up for the debate that will follow about what to do next.

The case for remaining in Iraq . . .pitched to an American audience . . . is neatly summed up in a TV ad made by a group called Freedom's Watch. It features Iraq veteran sergeant John Kriesel: "If we pull out now, everything I have given in sacrifice will mean nothing. They attacked us, and they will again. They won't stop in Iraq. We are winning on the ground and making real progress. It's no time to quit."

A recent New York Times article by two analysts from the left-of-centre think-tank the Brookings Institution, headlined 'A War We Just Might Win', seemed to give the argument . . . that a US victory in Iraq is still possible . . .some intellectual respectability.

In the video, Kriesel emerges from a doorway with two artificial legs just as he says "sacrifice." The ad sets up a 'stab in the back' narrative for after the US leaves, arguing that leaving now will repeat the "real" tragedy of Vietnam for some on the right: the US could have "won" had it not been forced by anti-war protesters to betray south Vietnam.

Last week John Warner, the silver-haired Republican who has represented Virginia for 30 years in the Senate and supported the invasion of Iraq, argued that the US should begin a withdrawal.

Warner's comments offer cover to other former supporters of the war who want out. But the reasons offered by proponents for withdrawal are generally couched in a shameful 'blame the victim' argument: the US should pull troops out of Iraq to force the squabbling, incompetent Iraqis to get along and start governing themselves.

Neither the 'blame the victim' nor the 'stab in the back' narrative challenges the underlying premise that the US is leaving Iraq. It's simply a fight about who is to blame.

And there are signs the question may not wait until after the next US election for an answer. Since the invasion, the US military effort focused on getting elections underway and protecting the status quo. Now, the US has realised the quasi-democratic status quo can't go on. The new, new, new idea for what next in Iraq, it turns out, is dictatorship.

Earlier this year a New York academic conference published a report of a one-day seminar identifying three plausible scenarios for Iraq in 2010. The best-case scenario, from a US point of view? The emergence of a 'National Unity Dictatorship'.

Following a significant US withdrawal, someone from within the Iraqi Army, perhaps commander lieutenant general Aboud Qanbar, steps up and seizes power in a coup, tapping "dormant strains of Iraqi nationalism" to defeat al-Qaida in Iraq, Sunni militants, Iranian agents, Shia militias . . . and copperfastens power by getting the US to finally pack up.

It's the 'best case' because it's the only one that sees Iraq not partitioned into Kurdistan, the Islamic Republic of Basra and the Sheikhdom of Anbar. Never mind that a regionally negotiated partition seems the least appalling and least bloody option.

That paper has made the rounds. There are signs it's now US policy to allow the 'best case' scenario to unfold.

Last week, Bush distanced himself from the elected prime minister, Nouri al Maliki. And in a trial balloon, a US commander, brigadier general John Bednarek, told CNN: "Democratic institutions are not necessarily the way ahead in the long-term future [for Iraq]."

So after four years, thousands dead and billions spent, it could turn out the US went to war to make Iraq safe for a kinder, gentler Saddam Hussein. Kriesel's sacrifice wasn't meaningless.

It was far, far worse than meaningless.

I hate Iraq. I wish we had never gone to the place.

rdelevan@tribune.ie