Here’s some food for thought
LAND ACQUISITIONS
Iceland: http://www.grapevine.is/Features/ReadArticle/China-and-Iceland-Friends-With-Benefits

DAIRY DEVELOPMENT
New Zealand court halts Chinese dairy deal

http://www.ft.com/intl/cms/s/0/03d0a622-57bf-11e1-ae89-00144feabdc0.html#axzz1uDBrhqPW

New Zealand approves deal for Chinese to buy 16 dairy farms

http://shanghaiist.com/2012/04/23/pengxin-nz-crafar-farms.php

China grows its dairy farms with global cattle drive:

http://online.wsj.com/article/SB10001424052702303863404577281302732745814.html

ENVIRONMENTAL RECORD
China’s environmental track record in Africa:

http://www.bloomberg.com/news/2011-09-09/africa-s-new-friend-china-finances-9-3-billion-of-hydropower.html

HUMAN RIGHTS
China’s human rights violations:

http://www.amnestyusa.org/our-work/countries/asia-and-the-pacific/china

PRESS FREEDOM
Al Jazeera’s Beijing bureau closed

http://www.journalism.co.uk/news/al-jazeera-beijing-china-bureau-closed-melissa-chan-visa-refused/s2/a549116/

Before we get into bed with the Chinese shouldn’t we be asking about the potential risks?

What do you think?

They climb the market and scrape their pocket
The Armani suits have got a tear
They waltz on their way to bank guarantees
And whistle at the Central Bank’s gold-plated lair
And underneath their wallet
They have betting slips on their mare
I even heard them singing in the Galway tent

He’s always avoiding punishment
But his PR-trained penitence is real
He’s always late for everything
Except for every salary fattened meal
I hate to have to say it
But I very firmly feel
Bust banks are not an asset to the country

I’d like to say a word on their behalf
Fat cat bankers – and their arrogance – make me laugh

How do you solve a problem like a bust banking system?
How do you catch property market speculators and pin them down?
How do you find a word that means the nation’s bankrupters?
A vampire squid! Ignorant politicians! A frown!

Many a thing you know you’d like to tell them
Many a thing they ought to understand
But how do you make Irish bankers stay
And listen to all you say
How do you keep their solicitor’s hourly fees under a grand

Oh, how do you solve a problem like unrepentant bankers?
How do you hold an old Irish punt in your hand?

When I’m with them I’m confused
Out of focus and bemused
And I never know exactly where I am
Unpredictable as an EU politician
They’re as flighty as a Ryanair technician
He’s an amadon! He’s a dunderhead! He’s probably a resident of D4!

They’d outpester any pest
Drive a Sarkozy from its nest
He could throw a whirling Merkel out of whirl
He is garrolous! He is wildly optimistic!
His strategy’s a financial riddle! He’s a hard one to abide!
He’s a tax-avoider! He’s the IMF’s worst curse!
He’s  really just a big girl’s blouse!

How do you solve a problem like unrepentant bankers?
How do you catch a piece of slime and pin it down?
How do you find a word that means bust bankers?
An ignoramus! A risk-o’-the markets! A clown!

Many a thing you know you’d like to tell them
Many a thing they ought to understand
But how do you make Irish “bust bank” execs stay
And listen to all you say
How do you keep their solicitor’s hourly fees under a grand

Oh, how do you solve a problem like frozen credit?
How do you hold an economy’s lifeblood in your hand?

The view that there is no alternative is “just wrong” he said. “There is an alternative. Play by the rules of capitalism – if you can’t pay back your debt, shareholders and bondholders lose.  If the Government puts in money, it needs to get control commensurate with the money put in. It also should get a return proportionate to the risk involved – in this case, it’s a big risk.”

For more on Prof. Stiglitz’s views see:
Trinity talk – http://www.irishtimes.com/newspaper/finance/2009/1008/1224256168742.html
State squandering money – http://www.irishtimes.com/newspaper/breaking/2009/1007/breaking45.htm
Opposition urges Nama rethink -
http://www.irishtimes.com/newspaper/breaking/2009/1007/breaking61.html

If you do not understand that then let me take on the persona of Princess Leia from Star Wars when speaking in a holomessage to General Kenobi: “Years ago, you served the planet in the Global Warming period; now your little green island begs you to help us in our struggle against the Fianna Fail-Bankers-Property developers Empire. I regret that I am unable to present the taxpayers’ request to you in person; but we have fallen passive under an attack of half-truth, financial jargon and PR speak. I’m afraid my mission to bring you to the ordinary people has failed. I’ve placed information vital to the survival of the Irish state  into the memory systems of some brave economists, business people, journalists and brave citizens. My people will know how to retrieve it. You must see this mission to destroy Nama safely delivered to the ECB.  This is our most desperate hour. Help me, Obi-Wan Gormley; you’re my only hope.”

Well, if President Obama’s opinions are anything to go by it’s not much.  Today he told an audience in downtown New York, where Lehman was  headquartered, that:

“Unfortunately, there are some in the financial industry who are misreading this moment. Instead of learning the lessons of Lehman and the crisis from which we are still recovering, they are choosing to ignore them,” he was quoted as saying in the Irish Times. “So I want them to hear my words: We will not go back to the days of reckless behaviour and unchecked excess at the heart of this crisis.”

Ah yes, reckless behaviour and unchecked excess. That would mean three things: the outrageous bonus structure, insufficient risk controls and lack of regulation.

Bonus bingo
Let’s start with the bonus structure. Even when I was there (working in marketing so not eligible for big money) it was normal for traders and sales people to have a relatively low base salary and a POTENTIAL bonus that was many, many multiples of that number.

For example, someone who made a 75k base salary knew that if they hit certain targets they could make up to 250k. Each year, the potential for larger bonuses multiplied. Year two it could be 350k or 500k or any “monopoly money” amount.

This was very, very seductive. As incomes rose, most people increased their spending so all those Wall Streeters have an addictive  lifestyle habit to support – private schools and ski holidays for the kids; big suburban houses, flash cars and servants for the spouse; exclusive golf club memberships, holiday homes and designer clothing, cigars and single malt Scotch for them. (Lots of my friends in New York live this lifestyle so I ain’t making it up!)

The point is that it became both very difficult for people to leave the industry - would you leave 500k sitting around for someone else to take? – and almost impossible to keep reaching the new targets. Plus, most of their friends worked at the same thing so the lifestyle – and the conflicts – seemed normal.

Playing risk roulette
When a shopkeeper runs out of things to sell, he needs to get some more. On Wall Street, they simply start to make new stuff up and call them derivatives. These financial instruments are bits of this and bits of that combined to create something new like: asset-backed securtites (See Sub-prime time or Abbatior of Debt story on this blog).

To feed the increasingly voracious market for derivatives, financial product designers went wild and created things that not even a nuclear physicist could decipher. It’s a bit like those mad outfits you see on the catwalk during London Fashion Week…entertaining and outlandish but with no tangible value in the real world.

Because these things were so darned complicated no one was able to assess their REAL risk.

Ropey regulation
Finally we come to the policemen, the gatekeepers, the regulators. They were duped but they were also incredibly lazy. If they did not understand how something was valued it was their JOB to keep asking questions. They failed us in so many ways. (See post on this blog: Toxic tips from D’Oh School of Economics)

So, if we have learned something from the collapse of Lehman Brothers we should see changes to the financial sector such as:
1. Total product transparency with clear description of risks
2. Abolition of bonus structures that reward unrealistic risk taking
3. Proper regulation of financial markets
4. Regulators who have the ability to understand – or demand explanations for – the products they are regulating

Don’t hold your breath!

For one moment, why not imagine your Ireland. What would it look like if you had your say? Try this quick, very basic, exercise and see what you come up with!

 1.     Start with a blank piece of paper

2.     Imagine the society you would like to live in (safer, happier, healthier, well-educated, open, tolerant, more positive, entrepreneurial, socially active, community-focused, takes care of most vulnerable, more efficient).

3.     Write down some of the basic principles this society should live by: respect for others, transparency in government, efficient use of taxes/ public money…(This is your constitution)

4.     Choose a system of governance that supports this (democracy, social democracy, socialist, communist, libertarian, theocracy, dictatorship, anarchism, monarchy, republic)

5.     Choose an economic system that supports this:
a. general concept: private, state, communal?
b. level of control: hands-on or hands-off system?
c. most common types: capitalist, socialist, mixed economy. social market economy, the third way,

6.     Find the best and the brightest in the nation, ask them to govern and apply all of the above.

7.     It can happen. Make your voice heard. Write. Talk. Vote when you have the chance in every local and national election.

 For more information on our existing constitution click on: http://www.constitution.ie/constitution-of-ireland/default.asp?UserLang=EN