European Tribune

A jobs programme for bankers and rightwing politicians

by Jerome a Paris
Tue Jun 26th, 2007 at 03:17:13 PM EST

I spent the day in Brussels today, where I was invited by Friends of Europe, one of the big think tanks over there, to their conference on energy in Europe. And I was actually invited to speak, as blogger and as editor of the European Tribune.

Keeping in mind the Economist's recent take-down of Brussels think tanks:

Too many Brussels think-tanks accept large chunks of their funding from EU institutions and national governments. Others depend on big corporate sponsors, so that the lines between research and lobbying become queasily blurred. Both forms of dependence are worsened by competition for the same pool of what Brussels considers star speakers: European commissioners, top officials and a few senior members of the European Parliament. Nobody seems able to change the default formula for Brussels policy seminars: good coffee and croissants, dull speeches and a brief exchange of conventional wisdom.

I set about to change that a bit with my participation... Another blogger, Willy de Backer was also invited (as the moderator of a panel) and contributed several pointed questions.


The format was a smart one: a short speech by each panelist (no more than 5 minutes), followed by a fairly long Q&A session with discussion open to the public (about 150-200 people, I'd say). There was indeed a combination of commissioners, top official and MEPs, but also representatives of the private sector and NGOs, as well as bloggers.

My speech went roughly as follows (from memory):

Europeans are confused about energy because they get conflicting signals. European energy policy can be described in two short sentences: "markets will provide" and "what is our gas doing under their toundra?" This reflects the fundamental sense of entitlement we all feel: public priority is growth, economic criteria dominate, and GDP growth requires increasing energy supplies. So we live in a world where increasing demand is a given, and where we are told that markets will solve all problems. Thus the liberalisation policies, which are sold (wrongly) as a way to lower prices (as opposed to potentially 'truer' prices), and which structurally encourage the private sector to invest in gas-burning power plants, making our import dependency problem worse and contradicting the objective to fight climate change. But blame is shifted towards others, whether protectionist, statist France or nasty authoritarian Russia. Liberalisation is a jobs programme for bankers and right wing politicians, which allows all to go on as if nothing needed to be done, and which ignores that the solution is on the demand side, not the supply side.

To be fair, my whole panel was about the demand side, and it was discussed at length, but various attendees told me that it was the first time that demand had been discussed at such length in such a conference...

I had various other opportunities to speak throughout the day; in particular, I was able to ask very explicitly EU Commission representatives (from the energy directorate, and later from the competition directorate) how they reconciled their push for liberalisation (and the issue that it structurally favors tecnologies that have lower financing costs) with the fight for security of supply and against global warming. There was no direct response from DG TREN, and a more combative one from the competition director general, Philip Lowe. I was also able to ask several pointed questions about our attitude to Gazprom, which were met by vigorous responses (from Philip Lowe again, as well as from Claude Mandil, the boss of the International Energy Agency) but also encouraging nods from various corners.

So the mission to spur the debate was accomplished, I think; hopefully a number of people heard some new viewpoints and will come to visit ET, which I was able to promote on various occasions.

Friends of Europe should have a summary of the debate on their website in the near future; I'll point to it as it comes online.

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I may not be around too much tonight, the day was long.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (jeromeguillet@yahoo.fr) on Tue Jun 26th, 2007 at 03:18:19 PM EST
Good work, Jérôme! It sounds as if you got the right points in, and there were some of the people who need to hear them present.

Correction: some of the people who need to hear these points made publicly in their presence.

When locusts move on, they leave nothing behind

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Jun 26th, 2007 at 03:31:36 PM EST
... a short speech by each panelist (no more than 5 minutes) ...

...

To be fair, my whole panel was about the demand side, and it was discussed at length, but various attendees told me that it was the first time that demand had been discussed at such length in such a conference...

<head explodes>

Can the last politician to go out the revolving door please turn the lights off?
by Migeru (migeru at eurotrib dot com) on Tue Jun 26th, 2007 at 04:53:49 PM EST
was about demand, i.e. 6 times 5 minutes, plus almost an hour of Q&A and discussion. So there was 'length', to some extent. Sorry I was not clearer.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (jeromeguillet@yahoo.fr) on Wed Jun 27th, 2007 at 02:48:19 AM EST
[ Parent ]
Yeah, I realised I had misunderstood that.

I shall not make jokes at 11pm.
I shall not make jokes at 11pm.
I shall not...

Can the last politician to go out the revolving door please turn the lights off?

by Migeru (migeru at eurotrib dot com) on Wed Jun 27th, 2007 at 04:41:09 AM EST
[ Parent ]
Way to Go Jerome!  One more clear voice in Brussels.

Our knowledge has surpassed our wisdom. --Charu Saxena.
by metavision on Tue Jun 26th, 2007 at 05:02:37 PM EST
This is pretty funny: a banker telling politicians that liberalisation is bad because it creates jobs for bankers and politicians.

Can the last politician to go out the revolving door please turn the lights off?
by Migeru (migeru at eurotrib dot com) on Tue Jun 26th, 2007 at 05:51:12 PM EST
Jerome is the only banker I know of whose visual range extends beyond his pocketbook.

you are the media you consume.

by MillMan (millguy at gmail) on Tue Jun 26th, 2007 at 06:36:39 PM EST
[ Parent ]
This is indeed odd, and in a way, it is odd that it is odd, and unfortunate that it is odd that it is odd.

I suspect that this point requires some clarification.

There is a widespread norm that that one should either approve of the source of one's benefit, or forgo the benefit. For example, politician X favors rules against giant corporate campaign contributions, yet X accepts such contributions; or, Jerome criticises banking, yet profits from being a banker. This norm is what makes his stand odd. Some might call him a hypocrite.

Yet it is odd that this is odd, because the norm itself is strangely self-defeating. As I've noted before (I hope not in a reply to you -- I don't want to be that repetitive!), there is no contradiction between responding to incentives and deploring them. If we ask that one forgo benefits from a system as the price legitimacy in criticising it, then we raise the cost of supporting good policies. Not good.

Instead, we should encourage this behavior. It doesn't involve a hypocritical double standard. Nothing need be hidden, and one can act on this rule while simultaneously willing that it be universal.

Of course, if a policy permits profitable atrocities, there is every reason to condemn someone who benefits from it, regardless of their policy stance, but this is because the line right and wrong does not (indeed, often should not) correspond to the line between legal and illegal.

So, Hurrah for Jerome!

Words and ideas I offer here may be used freely and without attribution.

by technopolitical on Tue Jun 26th, 2007 at 08:25:48 PM EST
[ Parent ]
And there are certainly cases where leading by example is necessary and not doing so does smack of hypocrisy. I guess there is a difference between doing something legal but which you argue should be prevented, and doing something legal but that you label immoral or evil or something similary value-based (and not just legally based).

In my case, I'm reasonably at peace with me job considering that I'm doing what I can in the given framework to push something which is definitely good (wind power), while arguing for a differentframework which would make that good easier to attain, but without the input of bankers like myself.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (jeromeguillet@yahoo.fr) on Wed Jun 27th, 2007 at 02:53:21 AM EST
[ Parent ]
Yes, and I would emphasise the distinction you draw.

I'm not sure how to articulate it well, but dumping not-yet-illegal toxic wastes is clearly on one side, and paying low taxes while arguing for higher is clearly on the other.

As for the perception of hypocrisy undermining a position, changing that perception (in the appropriate cases) is of course part of the political/cultural task I'm advocating.

Words and ideas I offer here may be used freely and without attribution.

by technopolitical on Wed Jun 27th, 2007 at 04:18:38 PM EST
[ Parent ]
Another point is that for many issues only insiders can provide relevant arguments without being taxed of "incompetence".

Jerome is a case in point in the energy debate, contrast this for example with the totally obvious problems with unemployment measure: only outsiders were pointing out the problems (including me) and yet the issue will reach visibility only after insiders start embracing our positions (see my latest blog post).

That's also why I strongly favour more freedom of expression for public servants and whenever possible in the private sector.

It's not because you publicize/criticize the government policies that you will not apply the policy as professionally expected.

by Laurent GUERBY on Wed Jun 27th, 2007 at 04:43:24 AM EST
[ Parent ]
I expect that for many issues, only insiders can even be aware of the arguments.

See for instance this story from last yeat about destination clauses in gas contracts.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (jeromeguillet@yahoo.fr) on Wed Jun 27th, 2007 at 06:12:06 AM EST
[ Parent ]
for many issues, only insiders can even be aware of the arguments

Which pretty much reduces democracy to absurdity, sadly.

Can the last politician to go out the revolving door please turn the lights off?

by Migeru (migeru at eurotrib dot com) on Wed Jun 27th, 2007 at 06:14:43 AM EST
[ Parent ]
It's certainly one of it's weaknesses.
by Colman (colman at eurotrib.com) on Wed Jun 27th, 2007 at 06:18:14 AM EST
[ Parent ]
As Laurent pointed out above, a big part of the solution is transparency - at least if the information is available, enlightened amateurs and sleuths (like the ET Joint Investigation Forces) can discuss it and analyse it, using various competences.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (jeromeguillet@yahoo.fr) on Wed Jun 27th, 2007 at 06:48:48 AM EST
[ Parent ]
Yes, but transparency and independent analysis is still not going to cause most people to become aware of the issu, let alone understand it and form an opinion.

And then you have to cast one vote for one guy based on a multitude of issuses, assuming you are aware and understand and care about a multitude of issues.

Which means electing people on their character is as good as anything else. Ultimately, the best you can do is to choose people that you can trust will make the right (informed) decisions when the time comes, and that will be transparent about it.

Can the last politician to go out the revolving door please turn the lights off?

by Migeru (migeru at eurotrib dot com) on Wed Jun 27th, 2007 at 06:52:38 AM EST
[ Parent ]
As Colman says, this is a weakness. Fortunately, it only requires a minority of traitorous insiders to provide the information needed by our (everyone's) alert media and voting public.

Another point -- sometimes, the insiders would benefit from having the rules of their game changed, as part of broad reforms, to make it less attractive. They'd exploit their capital (intellectual, reputational, political, or financial) to play a different game, while benefiting from the broad reforms.

A non-debased economic thinker would also give weight to some hard-to-quantify benefits: The value a person places on the good of others, and of having done good.

The above suggests that an enlightened, rational group of insiders should often see "an attack on their business" as a good thing.

And yet another, less related, point -- I am confident that business leaders often inadvertently regard (1) the effect on their business of a general prohibition against something they find profitable as equivalent to (2) the effect of a unilateral relinquishment.

Think of a change that raises production costs in a competitive market. Case (1): with zero price elasticity, zero effect; with moderate price elasticity, a moderate effect. Case (2): the business is uncompetitive, and fails.

Treating case (1) as if it were case (2) -- and there must surely be at least a tendency to do so -- greatly increases the perceived incentives of businesses to oppose virtually all policies that constrain their actions in the public interest.

If this point were more widely understood, the push and pull of politics would produce better results and the world would be a better place.
----------

I seem to be in a moral-philosophical mood again.

Words and ideas I offer here may be used freely and without attribution.

by technopolitical on Wed Jun 27th, 2007 at 04:45:02 PM EST
[ Parent ]
Alert media? What alert media?

Can the last politician to go out the revolving door please turn the lights off?
by Migeru (migeru at eurotrib dot com) on Wed Jun 27th, 2007 at 04:49:42 PM EST
[ Parent ]
Whoops -- There they go! You didn't see them zoom past?

Alertness at all times, my friend, and you too can see the ever-elusive Alert Media as they patrol the globe and scan the heavens on our behalf. But first, you must believe.

Words and ideas I offer here may be used freely and without attribution.

by technopolitical on Thu Jun 28th, 2007 at 03:15:58 AM EST
[ Parent ]
I guess I'm not alert enough.

Can the last politician to go out the revolving door please turn the lights off?
by Migeru (migeru at eurotrib dot com) on Thu Jun 28th, 2007 at 06:05:02 AM EST
[ Parent ]
If you insist...

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (jeromeguillet@yahoo.fr) on Thu Jun 28th, 2007 at 03:56:47 PM EST
[ Parent ]
The "destination clause" stuff was public matters since it was a judgment by competition authorities (and widely commented in the competition discussing circles).

But I agree in some case only insiders will be aware of some of the arguments but I think it's really marginal (I'm excluding whistleblowing in case of illegal practices of course).

by Laurent GUERBY on Wed Jun 27th, 2007 at 06:48:28 AM EST
[ Parent ]
This is good. I remember when we were discussing how to get ET's energy discussions more in the EU Bruxelles limelight. Congratulations! I look forward to reading more about the event.
by Alexandra in WMass (alexandra_wmass[a|t]yahoo[d|o|t]fr) on Tue Jun 26th, 2007 at 09:12:06 PM EST
Great Jérôme, keep up the good work.
by Fran (fran at eurotrib dot com) on Wed Jun 27th, 2007 at 12:57:20 AM EST
Congrats!

There was no direct response from DG TREN, and a more combative one from the competition director general, Philip Lowe. ... were met by vigorous responses (from Philip Lowe again, as well as from Claude Mandil, the boss of the International Energy Agency)

Could you go into details?

Also, would you give your personal impressions of the other participants of the panel? (I know many of the names, am curious.)

But blame is shifted towards others, whether protectionist, statist France or nasty authoritarian Russia.

Small note on rhetorics: from this from-memory summary, I don't know how prominent you made the they-always-blame-France theme, but it's good to keep it not too prominent: most Europeans have little or no awareness of FT lies, and could dismiss all you say as just stereotypical French nationalism speaking.

*Traitor*, n.
A benighted individual who perceives an illusory distinction between serving his nation and abetting the criminals who govern it.

by DoDo on Thu Jun 28th, 2007 at 04:11:35 AM EST


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