Slugger O'Toole

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Latest comments from Aaron M (see all)

Aaron M has commented 10 times (0 in the last month).

1. Comment on #Aras11: Sinn Fein’s pathfinder election?
   on 28 October 2011 at 4:49 pm

   To change the subject a little, if residents of the North were entitled to vote, would there be a unionist candidate? I guess it would be an abstentionist candidate?

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2. Comment on Second Republic: The 1937 Bunreacht was designed for a very different society…
   on 6 February 2010 at 10:16 pm

   Take the U.S. constitution and replace the right to guns with the right to health care.

   The separation of the executive from the legislature is necessary on both sides of the border here.

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3. Comment on Mortgaging the poor to bail out the rich
   on 8 April 2009 at 6:49 pm

   blinding,
   You might find these graphs from Paul Krugman, the most recent Nobel Economics Prize winner, an interesting appendix to my final paragraph.

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4. Comment on Mortgaging the poor to bail out the rich
   on 8 April 2009 at 4:10 pm

   blinding,
   There are many ways in which even the most ardent capitalist does support state involvement in banking. The state, at a minimum, should enforce contracts and debts. Hence, if the state allows deflation or rampant inflation, it has failed in this most important duty. If I owe you €100, then it’s not fair on either of us if the debt magically goes up or down because of unexpected inflation/deflation rates.

   Similarly, bank deposits are protected by the state. If an employer owes me money, then there is no moral justification for that money to disappear after payday just because a third party (a bank) has gone bust.

   For these reasons, the state quite rightly is involved in and is responsible for the enforcement of and transfer of debts. And it would only be some anarchists who would reject this.

   Given this appropriate involvement by the state, the consequences are that the state has a duty to heavily regulate the banks, banning some activities if it so chooses. Splitting investment and retail banking are one such option. Strict capital requirements. Ensure all assets are tradeable, and regularly traded, on markets. Any new type of derivative must be tested and approved and be designed to be traded in utter transparency. No unregulated markets. No sane capitalist would advogate deregulating the stock market (believe me, it’s all very heavily regulated), so why were CDOs allowed to invade the banks’ balance sheet without any regulation or transparency? Banks should never be allowed to grow too big to fail; simply split them or stunt their growth. Banks should not be allowed to be cross-border; for any given bank it should be clear to the world which central bank and which fiscal authority is responsible for it (this raises questions for the EU). Regulate pay and bonuses to ensure incentives for long term stability. The state, representing the depositors, is in effect entitled to the full ownership and control of any bank. No sane individual would guarantee another’s debts without getting detailed control over their lives, why does the state often fail in this basic responsibility.

   Enforcing of contracts and debts is the most important responsibility of the state, according to the most extreme anarchists/capitalists, and thus the state has a duty to heavily regulate banking in all its forms.

   The casino capitalism of the last decade or two, and its equivalent in the 1920s, are just temporary blips. Between the 1930s and 1970s, banking was regulated heavily and it was boring and banking salaries were low; as a result the world economy had the most sustained growth ever seen. Unfortunately this temporary blip will probably last a decade or so and there will be plenty of looting by the criminal banksters, aided and abetted by cheerleaders of ‘pseudo-free-markets’.

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5. Comment on Mortgaging the poor to bail out the rich
   on 7 April 2009 at 5:19 am

   Comrade Stalin,
   Why do you, like so many others, breathlessly say things like “the taxpayer, having taken the risk, will reap a large profit later on when the now-fixed institutions are sold back to the private sector.”

   The bank shares are relatively low today for a very good reason. That reason being that their loans books are awful. Ergo, the bank will never be worth very much. So the current forms of bailouts will never make a profit. Agree or disagree, but don’t just repeat it as if it’s something obvious that doesn’t need a detailed and robust defence.

   Look at Anglo’s balance sheet on page 33. Barely half of the liabilities are customer deposits, and it is only these that we need be concerned about in any way. All other creditors would, quite properly and in accordance with centuries of capitalism, be wiped out if bankruptcy were allowed to proceed. Therefore, it is clear that the bailout do not increase one iota the safety of deposits. Instead it protects the investments of gamblers. Businesses fail every day, with all investors losing much of their money, so why should investors in bank shares or bonds be special?

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6. Comment on Mortgaging the poor to bail out the rich
   on 6 April 2009 at 6:56 pm

   Karl Whelan’s proposal is nonsense. He says “so the relevant issue here is not whether a “bad bank” is introduced, but how.”

   That is false. We already have bad banks, they are the current banks that exist. We don’t need to create new bad banks. We just need to remove the good assets from the existing bad banks, or at least keep their hands off them.

   Willem Buiter, former external member of the Bank of England’s Monetary Policy Committee, has the the correct solution. You simply split the existing banks in two. Create a new bank from the easy-to-value assets and liabilities, including the branch network, of the existing bank. The old bank will then own the new bank but will not be able to manage it nor will it be allowed to do any banking itself any more. The existing management and shareholders will form the ‘asset management company’ that Whelan wants to see. It will live or die by itself without any help or hindrance from outside.

   The new bank, being a boring bank with boring assets should be able to borrow from the government for any shortfall in capital. And being a boring bank it’d be fairly safe and therefore the loan wouldn’t constitute a subsidy.

   Allowing the existing banks to go bankrupt, wiping out the idiot shareholders and the criminal management, isn’t such a bad idea. Buiter’s plan is merely a much tidier way to allow the market to take its natural course. This reorganisation could happen at the stroke of a pen, and then the new bank wouldn’t even notice if its parent company went bankrupt a few months later. And even better, the reorganisation can be undone in future for any of the bad banks that survive.

   Why in the name of all that is holy should one cent of taxpayer money be used to buy shares or bail out creditors of banks? It’s trivial for a non-corrupt government to ensure a revitalised and active banking system, protecting conventional depositors, without any need to ‘lend’ (i.e. lose) money to black holes.

   Even the US might be finally realising that the existing management and shareholders need to be mercilessly wiped out, or whatever course the free market deems for them. Unfortunately, I wouldn’t be surprised if we of the Republic of Ireland are so myopic and stupid that it allows the FF elite to continue its looting. Socialist my arse. We’re being offered a false dichotomy. Both Whelan and Bacon are wrong. Only the Germans can save us from ourselves. Hopefully, they’ll refuse to give a single cent to anything but the soundest of boring new banks.

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7. Comment on The Ulster Fry on your mobile phone…
   on 1 April 2009 at 4:35 pm

   Other ‘Ulster’ apps for your phone include ‘Ulster Satellite Navigation’ which includes a trip down the Garvaghy Road as part of every journey.

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8. Comment on Rebels with a cause they can’t win…
   on 28 March 2009 at 2:23 pm

   To clarify: read “distance itself from” for “reject” in my final sentence.

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9. Comment on Rebels with a cause they can’t win…
   on 28 March 2009 at 2:18 pm

   from Ogra’s post: “Here in Ireland we are trying to build an inclusive and demilitarised society”

   Seems pretty clear they’d be against any army recruiting on campus, be they republican or British or whatever. It is very mischievious, in the least, to hint that these Ogra might be in favour of the dissidents.

   I think the post is perfectly on message and that SF would have no difficulty in it. Belfast Gonzo, why do you think that a peaceful political organisation should be required to reject clear unambiguous protest against militarization?

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10. Comment on Warm up the printing press Jean-Claude!
    on 27 March 2009 at 11:36 pm

    Talking of helicopters, the pic in this post is hilarious.

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