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THE GOVERNMENT AND health officials have this week been encouraging people who return to working from home if they can.
Under Level 3 of the government’s Living With Covid-19 document, employees are encouraged to work from him if they can. Under Level 4, which currently applies to Cavan, Donegal and Monaghan, only essential workers should go to work.
The National Public Health Emergency Team has recommended the entire country move to Level 5 for six weeks. This would mean another prolonged period of remote working for employees who had returned to their workplaces after the first lockdown.
Chief Medical Officer Dr Tony Holohan this week said he was concerned at the number of people who had returned to their workplaces when their jobs could still be done at home.
He said this can contribute to increased numbers using public transport and also in-person mixing between coworkers that could be avoided. Minister for Higher Education
Simon Harris, speaking to RTÉ’s Today with Clare Byrne earlier this week, made an appeal to employers to “show the leadership they showed in March and April” and allow their employees to work remotely, if their work could be done from home.
He said the government would be engaging with business representative groups on it. “The rule needs to be quite straightforward; if you can do your job from home, your employer should try and facilitate you in doing that.”
Yesterday Tánaiste Leo Varadkar said the government is looking at giving workers a right to request to work remotely.
He said this does not necessarily mean they would have to be allowed to work from home, but it would be a legal right to make the request.
So let’s look at your current rights. We spoke to employment law solicitor Richard Grogan about the barriers to remote working, both for workers and their companies.
In most cases, they don’t.
Grogan said some contracts may provide for flexible working, but most will state that you will work at a location and if the employer says that is their office then you are required to work from there if you want to get paid.
Even if you decided not to go in and fully and adequately completed all of your duties for the day from home, the employer would still not be legally obliged to pay you.
And of course if your job requires you to be at the workplace in order to carry it out – such as factory work or retail – it would not be possible to work from home.
There are genuine problems with working from home. Companies may not have proper mobile IT, the laptops staff are using may not have proper security, there could be huge GDPR and security breach issues.
“Say if you’re an accounts person, you may not have the protections on your laptop to allow you access to the accounts,” he explained. Issues can also occur if an employee is viewing personal documentation in their homes that could be seen or accessed by the people they live with.
“Obviously we all understand the health imperative to work from home but there is also a knock-on effect on other workers,” Grogan said.
“If businesses have people at home for the next six weeks, the canteen staff are gone, the cleaner who cleans every day is not needed and is now out of a job, the person who works as a barista in the coffee shop down the road has no customers.”
Grogan said companies also have to look at their exposure in terms of insurance. They are obliged to provide a proper workplace with, for example, a sufficient desk and chair in an office setting. If they are unable to provide a similar set-up in a person’s home, they could be open to claims if an employee develops back problems.
“Litigation solicitors will be looking at what claims workers can make, if somebody has an accident at home during work hours and there was no risk assessment, it could cause an issue for the employer.”
It’s unlikely, Grogan said:
“If he’s going to bring it in he better provide smelling salts to every employment lawyer in the country because they’ll need them to get off the floor laughing. It’s incredible to give someone the right to ask for something. You can already do that.”
Workers can ask to be allowed to work home and while there is no obligation to consider or grant the request, thousands of employers across the country have facilitated remote working.
Grogan said giving people a right to ask to work from home without also giving them a right to work from home would be “pointless” and will lead to people believing they have rights that they do not actually have.
“For it to be serious, there’d have to be a whole mechanism to work out what circumstances it is ‘possible’ for an employee to work from home and then you’d also have to indemnify employers.
“And you’d still have the GDPR issues and the security issues and the rest to contend with. If the employers were to be forced to do it, they might look at it and think it’s just not possible and lay those people off instead.”
Grogan said many companies who moved to remote working during the first lockdown were “just making it work short-term” and do not have a longterm plan worked out. He said it would be more helpful for employers and workers if the government gave detailed guidance and more practical supports to facilitate longer term flexibility.
If the country does move to Level 5 next week, the advice will be to work from home unless it is for work in health, social care or other essential services and cannot be done from home.
While this is stronger advice than at Level 3, some companies – particularly those who had issues with remote working earlier this year – may still decide to tell their employees to come to work and if they want to get paid, those workers will have to turn up.
Thanks Joe for the interesting article and thanks to the Journal for publishing something outside the norm.
Great article!
Banking Cartoon
https://www.youtube.com/watch?v=tGk5ioEXlIM
Here’s a possible solution:
They should stop bankers from availing of limited liability. The limited liability was first introduced for companies, banks were explicitly excluded and for good reason!
Fractional reserve banking
If, for example a 1000 is deposited the bank is then allowed lend out 10,000 which it creates out of thin air and charges interest on. This is how they make money.
A run on the banks would bring the banking cartel crashing down.
…and they wouldn’t want that would they?
(There’d be no point in keeping politicians in their pockets then either!)
No, if a bank has €1,000 tier one capital it can lend say €10,000. The extra €9,000 is funded by a mix of customer deposits and inter bank borrowings. Bonds are frequently used to fund various tiers of capital.
The extra “money” is created because the end use borrower will momentarily have the loan deposited in his account, the Bank will have a loan asset on it’s books, the depositor will still have the money in his account and the lenders to the bank will have the monetary asset in thier accounts.
So the single loan transaction has, at this stage, trebled the money in supply. However that is only the beginning.
Things get really interesting when the customer uses the money to buy a house, his loan is securitised and sold on to other institutions, the inter bank lenders swap out their loans to either fix or float the interest or loan term and the buyer of the securitised loan buys a credit default swap to off load the loan risk. Then we look at what the person who sold the house does with the money….and so on and so on.
Before the crash in 2008, astute use of derivatives would create at least €1,000 in monetary assets from €5 of capital.
Ben
Explain to me why governments have passed laws allowing banks to create money out of thin air but with a cap ?
This is the whole basis of fractional reserve banking.
If it doesn’t happen then why are there laws saying how much banks can create????
Glen, the problem is that it is only the Banks and deposit taking institutions that are regulated. Investment businesses and hedge funds are not regulated at all and lenders who are not banks are only regulated by the Consumer Credit Acts.
This is a timely article, still useful even though it still has a number of misleading facts in it, but I cannot go into all the details here.
Customer deposits are a ‘liability’ of the Bank and do not fund anything. They neither lend reserves nor deposits nor are constrained by them. Even where reserve requirements are supposedly made, these are always some weeks later in their accounts & in practice have no effect on Banks’ ability to create money as loans.
Banks are constrained by Capital according to Basel rules.
But as Ben Gunn points out, the ability to sell on loans, leverage and use derivatives with fantasy Capital ‘risk weighting’ means that banks have been effectively unregulated in their ability to create new money as loans.
Add to this the fact that thru’ effectively leveraging, securitising and selling on most of their lending, they bear little or no responsibility for the risk of their loans, except for their current ‘inventory’ before they are sold on.
In the US, this created a particularly criminogenic environment and led to the very widespread ‘liars loans’ which former US regulator (who jailed around 1,000 bank execs in the 90s) William K Black has termed an endemic system of ‘control fraud’ operated by bank executives.
Broadly, the Irish banks & many others in Europe adopted the same pattern, or formula, that Black derived from his work jailing bankers in the mass US Savings&Loan fraud of the 80s/90s. It is a fraud perpetrated by executives upon the shareholders and customers of the bank as well as the general public who often end up having to cover the losses to prevent a complete collapse of the banking system.
Black explains all in his book ‘The Best Way to Rob a Bank is to Own One’ and on his home blog here:
http://neweconomicperspectives.org/
(Also a primary blog for MMT economics)
Black and many others know exactly how to properly regulate banking. In many respects a reversion to how banks used to operate before the last several decades where near all the regulation enacted following the disaster of the 29 crash & Great Depression was removed.
Obviously, providing that the bankers cannot continue to bribe wholesale the democratic process as they have & do now.
In short, Black and his MMT economics colleagues at the University of Missouri Kansas City (and elsewhere) propose that proper regulation of banking, including separation of retail/payments system banking and (haha) ‘Investment banking’, is perfectly possible with political will.
And there state there are good reasons for the smooth running and maintenance of (near) full employment of the real economy to allow such much more heavily restricted and monitored banks the facility to create new money as loans.
Anne Petifor and Warren Mosler offer critiques of the Martin Wolf/ positivemoney / Chicago Plan proposal on this basis here:
http://www.primeeconomics.org/?p=2629
http://moslereconomics.com/2014/04/25/comments-on-martin-wolfs-banking-article/
IMO, they are right. The crucial issue is the benefit of banks extensive network, localised loan risk assessment services (for lending they must be obliged to hold to maturity, not sell on) and perhaps most important the ability to provide new money to society in short and responsive time scales. Any ‘centralised’ (public) alternative cannot provide the timely & detailed service without which economic activity would be both hampered, and thru’ resulting money scarcity, be subject to unreasonably burdensome interest rates for borrowing ‘existing’ money.
MMT and positivemoney both propose that (sovereign fiat currency issuing) governments also use their facility to create debt free money to finance net fiscal spending, as required by the prevailing conditions of the real economy using the ‘Functional Finance’ principles developed by economist Abba Lerner.
Essentially, the main criteria determining whether a government net spends or taxes are whether stimulus is required to move toward (near) full employment and productive capacity… or a net tax position is needed (at or near full employment/productive capacity) in order to stem the risk of accelerating inflation.
The Euro system is deeply flawed and dysfunctional and would need significant reform to operate properly under such a system. But it is both possible and necessary to try to do it.
Necessary, because otherwise the Euro zone operates at a massive disadvantage to sovereign currency issuing states, even without those states operating MMT/Functional Finance. Witness the far higher unemployment and massive loss thru’ the consequent years of languishing under capacity of production in Euro vs comparable non-Euro countries.
This is a timely article, still useful even though it still has a number of misleading facts in it, but I cannot go into all the details here.
Customer deposits are a ‘liability’ of the Bank and do not fund anything. They neither lend reserves nor deposits nor are constrained by them. Even where reserve requirements are supposedly made, these are always some weeks later in their accounts & in practice have no effect on Banks’ ability to create money as loans.
Banks are constrained by Capital according to Basel rules.
But as Ben Gunn points out, the ability to sell on loans, leverage and use derivatives with fantasy Capital ‘risk weighting’ means that banks have been effectively unregulated in their ability to create new money as loans.
Add to this the fact that thru’ effectively leveraging, securitising and selling on most of their lending, they bear little or no responsibility for the risk of their loans, except for their current ‘inventory’ before they are sold on.
In the US, this created a particularly criminogenic environment and led to the very widespread ‘liars loans’ which former US regulator (who jailed around 1,000 bank execs in the 90s) William K Black has termed an endemic system of ‘control fraud’ operated by bank executives.
Broadly, the Irish banks & many others in Europe adopted the same pattern, or formula, that Black derived from his work jailing bankers in the mass US Savings&Loan fraud of the 80s/90s. It is a fraud perpetrated by executives upon the shareholders and customers of the bank as well as the general public who often end up having to cover the losses to prevent a complete collapse of the banking system.
Black explains all in his book ‘The Best Way to Rob a Bank is to Own One’ and on his home blog here:
neweconomicperspectives.org/
(Also a primary blog for MMT economics)
Black and many others know exactly how to properly regulate banking. In many respects a reversion to how banks used to operate before the last several decades where near all the regulation enacted following the disaster of the 29 crash & Great Depression was removed.
Obviously, providing that the bankers cannot continue to bribe wholesale the democratic process as they have & do now.
In short, Black and his MMT economics colleagues at the University of Missouri Kansas City (and elsewhere) propose that proper regulation of banking, including separation of retail/payments system banking and (haha) ‘Investment banking’, is perfectly possible with political will.
And there state there are good reasons for the smooth running and maintenance of (near) full employment of the real economy to allow such much more heavily restricted and monitored banks the facility to create new money as loans.
Anne Petifor and Warren Mosler offer critiques of the Martin Wolf/ positivemoney / Chicago Plan proposal on this basis here:
http://www.primeeconomics.org/?p=2629
moslereconomics.com/2014/04/25/comments-on-martin-wolfs-banking-article/
IMO, they are right. The crucial issue is the benefit of banks extensive network, localised loan risk assessment services (for lending they must be obliged to hold to maturity, not sell on) and perhaps most important the ability to provide new money to society in short and responsive time scales. Any ‘centralised’ (public) alternative cannot provide the timely & detailed service without which economic activity would be both hampered, and thru’ resulting money scarcity, be subject to unreasonably burdensome interest rates for borrowing ‘existing’ money.
MMT and positivemoney both propose that (sovereign fiat currency issuing) governments also use their facility to create debt free money to finance net fiscal spending, as required by the prevailing conditions of the real economy using the ‘Functional Finance’ principles developed by economist Abba Lerner.
Essentially, the main criteria determining whether a government net spends or taxes are whether stimulus is required to move toward (near) full employment and productive capacity… or a net tax position is needed (at or near full employment/productive capacity) in order to stem the risk of accelerating inflation.
The Euro system is deeply flawed and dysfunctional and would need significant reform to operate properly under such a system. But it is both possible and necessary to try to do it.
Necessary, because otherwise the Euro zone operates at a massive disadvantage to sovereign currency issuing states, even without those states operating MMT/Functional Finance. Witness the far higher unemployment and massive loss thru’ the consequent years of languishing under capacity of production in Euro vs comparable non-Euro countries.
Sorry for the double post, the journal’s system screwing up :(
Errmmm banks are SUPPOSED to be regulated you mean.
Here’s another good article on the topic with some very interesting comments:
http://www.theguardian.com/commentisfree/2014/mar/18/truth-money-iou-bank-of-england-austerity
Your understanding of fractional reserve banking is laughable Glen. Which conspiracy source did it come from?
It’s the central bank that creates money out of thin air, but the process is controlled by providing that money in the form of debt that has to be re-paid with interest. Banks like AIB and BOI don’t create money out of thin air, they borrow some of it from the central bank, get some of it on deposit and borrow the rest from other banks.
You are a disgrace to that icon. Anonymous are not a bunch of conspiracy freaks who get their information from idiotic sources like you. They deal with real problems from real sources.
Mike Hall, on the ball. As usual!
Hi Jimbo,
Banks like AIB and BOI do indeed create the money they lend.
We have published a paper on exactly how the process unfolds and it’s available to read at:
http://sensiblemoney.ie/data/documents/How-Money-Is-Created-And-Destroyed.pdf
Or for anyone else reading who would like a layperson’s guide to the system read:
http://sensiblemoney.ie/data/documents/How-Banks-Create-and-Destroy-Money.pdf
To summarise, if you get a personal loan from a bank they would credit their ‘Deposits’ account and debit their ‘Debtors’ account. And that’s the process. In doing so banks do indeed create the bank-account money they lend.
It could be argued that prior to a bank being in a position to create the money for your loan they must first borrow some a different type of money, that of central-bank money. They can borrow this central-bank money from another bank, or from the central bank, However, they cannot lend out this type of money – they always create bank-account money when they issue a loan.
Jimbo
You are flat wrong. The Bank of England recently published this fact that commercial banks create money from thin air when they make a loan. Loans create new money, repayments of Principal then destroy that money.
They also put up a more ‘lay’ version on Youtube with their spokesman standing in the gold vaults at BoE. He is quite explicit – “… loans create deposits… ” and also “… some economics textbooks are incorrect… ” (as regards how money is created & the banking operations that follow on).
That last quote is a monumental understatement – nearly every economics textbook in use for the last several decades is flat wrong. Nor the spokesman bother to mention that the implications of this fact turn much of mainstream macro economics on its head. Most is complete and utter tripe. Which is why mainstream economists had not the vaguest gnats cock of clue that the financial crash was coming. Debt and banking was not included in their multi€billion ‘models’ and financial fraud was also ‘assumed’ away. Unemployment also requires the assumption that it is only ever a ‘leisure’ choice by perfectly rational, all knowing ‘representative agents’. And there are many other completely absurd assumptions underpinning the economics thinking of the mainstream. Pure claptrap, the lot of it. But, note, it all works perfectly funnel wealth upwards to the already wealthy in increasing amounts whilst peddling the laughable idea that it ‘trickles down’ to a deliberately nurtured and mislead gullible public.
Presumably since all these mainstream macro economists have entire careers invested in peddling pure BS fantasy, they having done nothing in over 6 years to address their own systemic failure.
None of this mainstream are fit to advise a banana republic let alone macro policy in our globalised economy. The not just unforeseen, but assumed impossible (“the Great Moderation” they all touted, haha), Financial crash and 6 yrs and counting of mass unemployment and no recovery. They are charlatans of the highest order.
Most of the big banks are far more powerful and rich than the countries they operate in as we have seen over recent years. Can’t see this ever happening but it’s a nice idea.
Hang on a minute. Govt already controls the total money supply by fixing last resort interest rates and imposing minimum capital ratios. Last time out, most govts made a pig’s mickey of this, while countries like Ireland simply gave up one of those tools to a foreign power. And the solution to this is … give more power to the government???
You’ve hit the nail on the head Emily again.
The premise here is that banks behave recklessly (which they have) and governments don’t (which is clearly incorrect).
In addition, this would increase opportunities and incentives for corruption and cronyism.
There is evidence that the opposite scenario, free banking- where banks are treated as ordinary companies, provides a much more stable banking system. In other words, if they know they won’t be bailed out they will behave more responsibly. Canada had a free banking system until after the great depression. None of its banks failed.
Spot on Emily, things are bad now but hand over more control to the government and they’d be a hell of a lot worse. Think about it, look at they type of people who make up the government. Not one of them has a clue how to handle money. A load of ex school teachers and civil servants who’ve worked for years to overspend their budgets so they get more money next time.
Emily, it’s not correct to say that Governments can control the money supply, or indeed even influence it much thru’ the setting of a target minimum interest rate (via their Central Bank).
See the recent statements (& a useful short video) from the Bank of England on this common misunderstanding, here:
http://www.businessinsider.com/where-does-money-come-from-2014-4
Good point Expert.
Its bad enough that you have to go to your local fg/lab constituency office on bended knee to get your mother a hip operation or to secure planning permission to extend your home. Imagine crawling to your local TD to get a mortgage or student loan.
SME’s securing operating capital based on the generosity of political “donations”.
It’s like Charlie Haughey’s wet dream.
Banks are giant pyramid schemes… simple as. We loathe them and need them.
True. Also, the monetary system is the real problem. What’s the alternative though?
We loathe them and need them.”
No – u don’t need them . there are other institution – but the banks get money for near 0% Interest – and use this for gambling – and if the gambling fails – they are bailed out – or in the future bailed in .
Jim tell me another institution that I can borrow from and get my wages put in. Don’t say the credit union.
Here’s a possible alternative Mark:
Banks have too much power. One sensible first step in controlling how they behave would be for the government to return to the older system of paying salaries, pensions, benefits, etc directly to individuals rather than to their bank accounts. This hands control of their money back to the individual who can then decide whether or not to use the banks !
In an ideal world Michael.. I keep a bit of money in a bank account in Ireland just for sending money to my parents the odd time or withdrawing euros when I’m home the odd time. That Bank is AIB, every time I look at my account they have taken small fees here and there for this and that, In england some banks don’t charge transaction fees, why the f@ck do they charge in Ireland? can anyone tell me..Its actually gone too expensive for me to bank with Aib so I’m finally removing myself from their clutches. Its daylight robbery. Having banked with them for 15 years you would think they’d offer some sort of time incentive for years of being a customer. Nope, In the end greed is greed is greed.
Great Article!
“Loose screw” apt words indeed, and I would add to that”loose cannons”.
I mean when you consider management policy in Banking, for many years before the Crash, was not only to “create”/ loan out multiples of their deposit bases, but also to borrow billions more, short- term, and in turn chuck it out to a property developer to pay way over the odds for a dump of a site somewhere, as a speculative gamble.
What is most disturbing now is that, following the banking crash” these “loose cannons” have ridden off into the sunset with their fat retirement packages, and gold-plated pensions, leaving the rest if us to clean up their glorious mess. Probably something that will take 100 years or more to achieve.
This little wonder there’s revolution in the air.
Every thing that touches us is a con.
Right then Ted…..
I’m off to the bank to withdraw my savings.
Wouldn’t go down well in Cork. Banning De Banks???
Boi!
The current system is inherently flawed. There will never be enough money in circulation to pay off all the debt.
“I care not what puppet is placed onthe throne of England to rule the Empire, … The man that controls Britain’s money supply controls the British Empire.And I control the money supply.”by Baron Nathan Mayer Rothschild.
This is the reason we are where we are today. Certain wealthy elite Banking family lines control the world’s wealth and pretty much everything else.
Good idea but its never gonna happen. Banks are the most powerful institutions on the planet. They surpassed the catholic church about 60 years ago. Barack obama has the most powerful army on the planet, guess who the main contributors to his election campaign were? Jp morgan chase bank and goldman sachs. They were also the main contributors to his rival, sneaky buggers.
Well said, don’t forget the Israeli lobby AIPAC.
Ah, now you’re getting to the real issue ;)
Bank Fraud is one of Biggest industries on planet and many banks in UK and US and other counties do it – and if a govt says ” that’s wrong ” !!!!!!!!!!!!!!!!!!!!!!!!!!- but if they do –
they would /have been told -” we will bring the whole system down if u touch us ”.
So the banks get away with robbery and their endless Rehypothecation .
Also THe EU has passed laws ensuring bail -ins
http://www.irishtimes.com/business/sectors/financial-services/eu-agrees-bail-in-rules-for-deposits-1.1626033
and don’t worry that figure of €100,000 is I am sure is” flexible ”.
The other way out of the mess banks have created is just to shoot corrupt bankers as in Vietnam and China – that might put manners on those who are left .
Perhaps someone can solve something that has always bothered me about banks ‘creating money’ by lending, why do banks get into trouble when there is a crisis like we had? If lots of the people they lent money to start defaulting, why is that a crisis for the bank if they invented the money?
I understand why it is a problem if the bank borrowed the money they lent out elsewhere, or used deposits, but if they ‘created’ the money out of thin air, who do they owe it to?
Banks according to the Rules of Monopoly
Yes if credit cards are used say 100 euro is borrowed that exponentially increases the amount the bank can lend out ,It’s a crazy situation and its an ingenious way for the banks to legally rob people.
This is timely given that the ECB is running stress testing exercises.
Perhaps these stress tests will be instrumental in creating a new crisis. I expect the results of the tests will require fresh thinking at ECB level and that the rules of fractional reserve will be changed.
I stopped reading after this line ….”The typical person probably thinks about a bank the way it’s depicted in the movie ‘It’s A Wonderful Life’. Patronizing and condescending to say the very least – especially to someone who stopping using corrupt Banks over 25 years ago.
Best piece of education on banking
I’ve read. I thank your correspondent
Now to digest it
Banning the banks controlled by the elites is a good idea – giving money creation power to governments who are representing the elite is not the answer. We will still need banks in the short term at least – however they should simply be community controlled – run by the people for the people. Our constitution allows us to self-govern and thats what should happen – party politicians are part of the elite connected to banking and the IMF who enforced austerity on us – by essentially putting a gun to our previous leaders heads. Either way our leaders would have done what they wanted anyway since they are part of the club. Hence the fact that Ireland has paid for 42% of EU banking debt at €9000 per capita and 25% of GDP – compared to the next biggest Germany at €491 per capita and only 1.5% of GDP. http://www.thejournal.ie/readme/banking-crisis-bill-ireland-755464-Jan2013/
Ideas similar to the gift economy or ubuntu contributionism are the best long term solution – yes they are ideal, but a moneyless society completely removes the problem of greed and it is workable in terms of exchange of skills and goods based on necessity and sharing of each persons strengths. To get there on a national level would require major societal mobilisation/restructuring so intermediate systems like mutual credit exchange systems could work to bridge the gap. Not sure about a national currency solution – I think the EU investment elite would just try to destroy an Irish currency as punishment for leaving.
Either way yes we should take our money out of elite controlled banks and put it in our own hands or in locally controlled banking systems and as Michael G O Reilly said – pay salaries directly to people – not to banks. That arrangement is just a collusion between big business and banks to take all control away from people.
As long as we keep using banks and as long as we don’t have our own currency or exchange systems – we have no power to control policy and they will continue screwing us for every last penny.
But the very least we should do is vote non-party in the upcoming elections. e.g.http://peoplescandidates.ie/ or similar.
The fact that the irish people have accepted paying 42% of eu bank debts is a disgrace – we should be tearing down the walls of government not sitting on our asses talking about what we can’t do!
have your say