January 11, 2009

Fight for our right to prosperity

Posted in International Economy · 238 comments ·

This is war. Waterford Crystal’s collapse followed by Dell’s decision to close has signalled the opening salvoes in the war for Irish prosperity. With unemployment soaring, we are fighting on two fronts.

On the first front – the external front – we are fighting to retain companies that have been here for some time. If we win this, we can advance to securing new investment and investment of our own.

The second front – the home front – is an intense battle to ensure that our domestic economy is not overwhelmed by the debt deflation associated with the property and banking bust.

We all know who is to blame for this predicament – no need to go into this again here.

If we do not fight, adapt and box clever, Ireland faces a recession the likes of which we have never experienced. Like any country under attack, a state needs to galvanise all the resources at its disposal to fight back. We have to do everything right, make no mistakes and really aim to be audacious, constantly using the element of surprise when we have a chance.

There is little point saying that we were unprepared or that the army was allowed to grow fat and flabby during the boom years of peace and prosperity. We know that the warning signs were ignored – wilfully – by a general class that is incapable of leading us victoriously through the new war.

We realise that our early warning system failed and that those alerting us to the upcoming conflict were demoted. As a result of this complacency, there is a sizeable minority who are still in denial, believing that this is a skirmish that will all be over by Christmas.

These difficulties do not change the dynamics of the economic conflict. If we do nothing, plod along with the same structures and content ourselves that someone else is going to do the hard work, our already brittle defences will be overwhelmed.

At stake is the Irish standard of living. If we want to condemn ourselves to a decade of recession, with mass unemployment and emigration, we can do nothing and pay the price in both social unrest and the dashed prospects of a generation.

The only way we can win this war is by becoming, once more, an exporting country. We were one up to 2000/01. We ran a current account surplus with the rest of the world and something close to a balanced budget, our debts were falling and our output per head rising. In the bubble years from 2000 to 2008, all that changed. We became an importing country and paid for those imports by borrowing other people’s cash – people who were prepared to work harder than us, save more and have money left over to lend to us. They were being paid interest; we were going further into debt.

Meanwhile, poorer countries, keen for our business, were doing the right thing, so that when the war broke out, they were prepared to take some of our lost prizes (such as Dell) as booty.

At the moment, we are fighting the new war with yesterday’s armory and we are trying to insulate the population from the reality of the situation by borrowing. By operating a large fiscal and large current account deficit, the Irish state is in the postponement game. If we were to live within our means this year, our living standards would fall by between 7 and 10 per cent (based on either the current account or the budget deficit as a measure of us living beyond our means). We can’t keep at this game.

Quite apart from the fact that we can’t keep borrowing, the risk is that our backers could drop us. Alliances and friendships based on self-interest that were forged in peacetime become fractured in war because everyone wants to be on the winning side.

Think of our multinationals as allies in this context. The near-term objective is to make sure that Dell’s decision does not frighten others into doing the same. Imagine the conversations going on now at Intel and Microsoft. We know that multinationals tend to cluster. They hang out together. When one of them bolts, we run the risk that the rest may follow. So we have to reduce costs by being more productive, cheaper or both.

There are two ways we can do this. We can do what we are doing now, which is to reduce our wages, throw more people on the dole and suffer a long contraction. This is what the Germans did after the unification boom of 1990-1994 turned sour. Germany got too expensive and had to cut back employment.

The other model is what the British are doing now. Britain is letting sterling fall so that the problem becomes someone else’s. In simple terms, the price of the British recession is being felt more in Dundalk than Newry.

It seems like a pretty clever thing to do, doesn’t it? But we, of course, have ruled this out by our euro membership, which now leaves us in the ridiculous position whereby traders in Dundalk, all along the border and the Dublin/Belfast corridor are having to pay twice – once for the Irish recession and once more for the British recession.

But the resulting unemployment is not shared. On the contrary, the remaining Irish taxpayers pick up the tab for these people, while British taxpayers actually get Vat revenue from Irish workers seeking exchange rate-driven bargains. What do you think of that?

We are choosing the most difficult fighting option by our euro membership. Last week, Ireland paid significantly more than Germany for €6 billion that we borrowed. We paid 4.07 per cent, while the Germans are paying 3.3 per cent.

This means that, even with a monetary union, the markets do not trust us. So we are paying twice for the euro. Once on the exchange rate – which is making us dreadfully uncompetitive in the eyes of foreign investors and shoppers – and once more on the interest rate, because we are not even getting the benefit in terms of cheaper borrowing terms to pay the unemployment benefit of those who have been laid off because the currency is making us far too expensive. Bizarre.

By keeping with the current policy, the state is ensuring that Ireland turns itself into a large debt-repayment machine. We seem to have arrived at the conclusion that the best way to proceed for the next decade is, without question, to knuckle down and get on with the business of paying back debt, rather than the possibility of turning ourselves into exporters.

Is this the sort of strategy that wins wars? Is this the type of imaginative approach that thinks the unthinkable when a country is in a corner? What do they say about generals who fight today’s wars with yesterday’s tactics? They are defeated by new enemies. Let’s not make that elementary mistake in the battle ahead.

  1. Furrylugs

    Eirigi Eireannaigh. A call to arms by the Leader. That article needs to be published in a less high brow newspaper so that all the country is aware of it, particularly our politicians.
    The evaluation of Irelands Euro membership would appear to be questioned. I wonder what new weaponry DMcW is mooting?
    This will be an interesting week ahead.

  2. Piaras Mac Einri

    It’s difficult to interpret this article other than as a call for Ireland to leave the Eurozone. The ramifications of such a move would be far-reaching and dramatic. First of all, any whisper that such a prospect was being considered would certainly precipitate a major run on Irish banks and financial institutions as savers rushed to convert or transfer their euros ahead of an inevitable sharp devaluation. Secondly, it would be dramatically unfair anyway to such savers, who have behaved prudently all along (contrary to rumour, not everyone is equally guilty for the present state of our economy) and have already been hit hard by the actions of irresponsible borrowers. Thirdly, it would mark a further stage in Ireland’s growing alienation from the EU.

    I’m not an economist. Perhaps DMcW’s view is correct, but I would be very concerned about the risks of floating an independent Irish currency right now. It might well restore competitiveness in the short term but could massively increase the costs of servicing our foreign debts (as happened to Iceland) and could also turn a restored Irish punt into a virtually worthless currency.

    It seems to me that the only credible short to medium term strategy is a severe cutback in the public budget, provided it is done equitably, and a broadening of the tax based, notably through a tax on property as well as other assets such as water.

  3. Skin

    Is this a call to ditch the euro? I dont it would be the first time either.
    Could it happen that David McWilliams could be pitched alongside the likes of Sinn Fein in the next European/Lisbon elections?

  4. nostramartus

    It’s a little bit late but i’d like to wish David and Ronan a happy new year, and as I’m an opportunistic Limerick gurrier I’d also like to nominate a few of my favourite posters of 2008, not for any reward just for unofficial recognition of consistantly good and useful posts.

    Malcolm McClure
    Shane Dempsey

    I don’t always agree with the above posters but I always learn something from their posts. This isn’t a definative list but my first post was in october 2007 , there were maybe 20-40 posts after david’s articles, now the posts are hitting 400 each week, my in-box is overflowing, I don’t think the nesting of comments has been a success, (sorry ron) perhaps a star or colour change to denote popularity with a link to a new page and expanded discussion would be helpful at this point. Censorship would be in my opinion a mistake as there are many posters who don’t consistantly post comments but do drop in gold nuggets from time to time which add to the discussion.
    If possible some shared self-evident truths among the posters might form the basis for a new blueprint for Ireland after the meltdown of 2009-10, ( I assume no one here believes flipping properties is the way forward for the irish economy = self evident truth No. 1 ).

  5. Furrylugs

    Dan O’Brien of the Economist Intelligence Unit has a useful back-to-back article here regarding the scenario should Greece default.


    The phrase that stood out for me is “fiscal incontinence”.

  6. There is much discussion about how to “re-skill” the thousands of Dell workers soon to join the dole queues.
    However all the Fianna Fail cabinet have unique talents and skills which could be exported worldwide now that so many political parties across the world are also in crisis.
    I believe I have the solution.I have been listening to our amazing government ministers on various chat shows and news programmes in recent days, and the “Eureka” moment came to me while I was having a shower today.
    I propose that the discredited FAS training service immediately receive authorization to set up a brand new agency to begin the task of recruiting all the current government ministers to join an emergency task force which would immediately re-locate to Limerick and commensive intensive training of the demoralized multitudes to prepare them for emigration.
    They are ready to grasp at any straw to save their families from hunger, and their homes from re-possession.
    If the programme is successful it may create some redundancies in public relations companies employed by various governments abroad, but this is a necessary corollary of my scheme as irish emigrants would replace them.
    The redundant “grand master”, Bart Ahern would be the man to lead the new training project to up-skill the unemployed Dell workers and prepare them for the Ryanair emigration airships.
    The whole world is crying out for people with the unique talents of irish government ministers.
    As for a name..well you could not call it anything other than what is will be: “The Waffle Training Agency”

  7. Jerry

    Yeah I’m not sure what to make of this either. David – are you saying Ireland should ditch the Euro? What you are trying to say is rather cryptic.

  8. AndrewGMooney

    DMcW: ‘Britain is letting sterling fall so that the problem becomes someone else’s.‘

    The Market is deciding the value of Sterling relative to the Euro and the Dollar. The British Government has limited powers of influence (interest rates for one). The recent rapid appreciation of the Pound against the Euro reflects the gathering concerns that the German Fundamentalist Hairshirt will decimate the economies of the Club Med countries and others such as Ireland. I will not use the insulting acronym that seems to be in vogue. Whilst some countries descend into despair, others posture ideologically. Where is the pragmatism? Roll on G20. London. April. Obama.

    David, you do not actually make a ‘position statement’. Leave the Euro or stay? Ireland’s joining was predicated on an assumption that Britain would be forced to enter by the supposed economic might of the Franco-Prussian alliance. This may have been a rational expectation at the time but, as I said in a recent post:

    The Brits are more likely to migrate to the Moon in the next 20 years than they are to join the Euro.

    Regarding the lack of ‘patriotism’ amongst Irish consumers, you ask ‘What do you think of that?’. Well, I think it reflects a dire lack of strategic thinking by the current Irish Government. In not factoring this into scenario-risk planning when adjusting Irish VAT upwards, they made the same parochial mistake of thinking in isolation as they did with the Bank Guarantee. The British Government will note the situation as it noted the possibility of large-scale corporate movements of funds to Irish Banks from Britain following the capricious move of the Guarantee. Other than that: You win some, you lose some. Move on, nothing here to see.

    Ireland is part of a complex web of relationships with three major trading currencies: The Dollar, The Pound and The Euro. The Brits and the Americans are more important to Ireland to Ireland than the Germans. Ireland is more Atlanticist than European currently. There is no point bemoaning the Market’s responses to the repatriation of footloose American Capital or the gyrations of floating currencies.

    There is only really one thing to consider. Double or Quits. Alan Walters may well turn out to have been correct in his prognostications on the Euro. He prophesised it would work for some time, but that it’s long-term viability depended on Political Union as well as Monetary Union. One without the other will not sustain. Hence: Double or Quits. Which leads us back to the toothache/balls-ache of Lisbon.

    The ECB is either ‘visionary’ with regard to it’s caution or idiotic. It depends on your chosen perspective. Ireland has limited influence on German decision making. Germany is entirely pissed as it’s gameplan always depended on Perditious Albion coming to heel to provide a counterweight. They apparently didn’t realised that ’The City’ is not a physical entity but a geo-political and economic vision which currently happens to be hosted in London.

    Ireland has to make some strategic decisions. I do not accept the current Government has any credibility to even structure and present this debate to the Irish population. The ‘crisis’ is also a unique opportunity not to be missed.

    My own view is that leaving the Euro during the current crisis is not an option as it would precipitate an even greater calamity. Forcing the Germans to behave responsibly is the only option available. Just as they must take responsibility for turning on the credit spigot to Ireland and others, they must now rationally respond to the abrupt closure of that spigot if they are not to entirely destroy the credibility not only of the Euro but also that of the EU itself.

    After the current crisis is managed, Ireland will have to make it’s decision. Remain Atlanticist or engage in full Political and Monetary Union. Either a New Punt, Irish Dollar or the Euro.

    It is war. But it always was. Economics is War by Covert Methods. Sun Tzu meets Machiavelli in Bruxelles, Washington and London. Wars are never pleasant. But it is helpful to define the battlefield and ensure you know who the enemies are. And where and how currently unrecognised foes may be hiding.

    Reading your passionate article in connection with Gene Kerrigan’s ‘They’ve got Obama, we’ve got buffoons’ and John Drennan’s ‘Who’s who in our government of unity’ in today’s Irish Independent give me some indication that the culture of denial and evasion in Irish Culture and Politics is finally collapsing.

    In that, I take great comfort and hope that the welfare of all the people I care about in Ireland will not be further threatened by mendacious officalese and absurd internecine Party Political point scoring.

    Now. What’s for Sunday lunch?

  9. Aidan

    Do we need to leave the Euro? According to this DMcW says it isn’t helpful at the moment because it is unevenly working – German Sovereign Debt is priced 30% below ours by the market and the Uk has cut the value of Sterling.

    The difference in sovereign debt is the worst part as Sean Citizen needs to do 30% more than Herr Helmut just service it… Forever or until it is repaid. The UK shopping spree based on cheap sterling lasts until UK retailers need to restock reflecting the, now reduced international buying power of sterling. The cost of stuff goes up as this is passed on. In theory, In reality they cut margins and bleed todeath or until things recover.

    Apparently we need to get back to what we used to be good at; bringing in US companies and persuading them Ireland is at the heart of Europe. All the old advantages remain: we speak easily understood English, have good education strong familiarty with US and, still sit between GB and the US in a great time zone, where we overlap Asian and US work days.

    It would be nice to think we could set up an indigenous export sector – with our banks in shreds we can’t, our best hope to export our way out of this is to go back to the crowded FDI market and shout louder in our better Enlish than the ex-communist countries and ringing the US slightly later in the business day than the guys in Vilnius. Prague and Bucharest. We can do it and do it well, we did it before and succeeded against better funded and bigger countries with better infrastructure for years. I don’t see the end of the Irish economic change just the end of it’s begining, we need to. Stop selling stuff and property to ourselves and get back out selling to products and services that are of value to others in countries around us priced in their own currency without the shifts like we’re seeing with sterling. We’re good at that and seem to forget this.

  10. Leaving the Eurozone would be the equivalent of hoisting the white flag before fighting a battle.

    American companies are responsible for 90% of total Irish exports and possibly 98% of service exports.

    It may seem like a panacea for Irish exporters to the UK but for a small economy like Ireland, it would be a cataclysmic gamble for desperate politicians to take, when they haven’t the balls to reform the system that resulted in the second period of monumental economic mismanagement in a generation.

    Thus far, rather than honesty about the challenges ahead, ministers, who haven’t a clue about business, dish out blather on upskilling, moving up the value chain etc?

    Ireland is one of the most expensive economies in the world and the question that should be asked is how bad do things have to get before there is an interest in serious reform to prevent another self-inflicted period of economic ruin?

    In March it will be 30 years since a government responded to a huge public demonstration demanding a fair tax system.

    Given the gulf that has developed between the Insiders and the rest in recent times, there is a risk of social upheaval.

    Why is housing in a country that is 4% urbanised, the most expensive in the world?

    Why were 2008 rents on Grafton Street among the top 5 for retail streets in the world?

    Why has a country of 4.2m 35 ministers?

    The battle should be against crony capitalism, a 1920′s governance system of limited accountability and an end to feather-bedding in the public sector. The lives of thousands in the private sector will be ruined by negligence, incompetence, short-term political self-interest and the laziness of political leaders during the boom. The public should demand an election if the current political leadership cannot respond to the crisis.


    • Deco

      Your questions display the absurdity contained in our state structure. It is organized to be neither efficient or effective. All those junior ministers, and all those quangoes need to go. There needs to be a radical overhaul of the management of the entire state system. I suggest that we study similar countries like Denmark and New Zealand to discover better ways to run the country. Both have better performing public services, and with less complexity and absurdity.

  11. Malcolm McClure

    David said “We are choosing the most difficult fighting option by our euro membership. Last week, Ireland paid significantly more than Germany for €6 billion that we borrowed. We paid 4.07 per cent, while the Germans are paying 3.3 per cent.”

    My reading of this is that we are not gaining full advantage from Euro membership. because we have retained control of our Central Bank (which has proved itself totally ineffective throughout the recent debacle), thus we are condemned to paying a higher spread than prudent members of the EU. If I understand ‘Quantitative easing’ correctly, it means that in our case the ECB would provide essentially unlimited cash at cost, direct to Dept of Finance. The ECB would presumably be able to raise this credit at favorable rates because of its AAA rating.

    Of course, the quid pro quo for such an arrangement would be confirmation of our commitment to EU values by our ratification of the Lisbon treaty. The government could do this overnight, simply by quoting ‘force majeur,’ in present circs. They could just leave constitutional issues to sort themselves out in the course of time and could butter the toast by pointing out that they were saving the cost of another referendum.

  12. Johnny Dunne

    David – well done for bravely bringing up the ‘euro’ question up again…now can we get a real debate going on this blog about the possibility of exiting the euro to stave off a very long recession in Ireland ? What are the pros and cons ? Is it possible ? Is it worthwhile ? What are the options ?

    Exiting the euro should be at least considered as an option for the Irish economy, especially if the government expects to be able to fund over €50 billion for public services expenditure from decreasing tax revenues. If not there is a huge risk now the country will have to borrow massive amounts in future years just to fund current expenditure. Could we convert personal private debt to a new ‘punt’ when revalued by the financial markets ? If we had our own currency the ‘mortgage laden’ young entrepreneurs could start living again and focusing on building productive Irish indigenous export companies. How could a growing company export competitively to the UK or US now?

    What’s worked in the past will not help future competitiveness as we can’t pay back debts (public and private) and export with an uncompetitive currency. US multinationals don’t worry about the Euro as they report results in dollars.

    Could we maintain EU market access like Norway, Sweden and the UK but come out of the euro for economic survival ? Have we debated the models of other European economies like Luxembourg, Switzerland and further a field like Singapore which trade successfully with a very high GDP% per capita and standard of living without straddling a whole generation with 30 year mortgages to fund properties which will continue to go down in value.

    Many may feel opting out of the Euro and allowing the debt to be revalued to a “new punt” is a non-starter due to a high % of the loans that Irish banks make are not covered by the domestic market. Maybe the banks could be able to get those international loans revalued into the “new punt”, the Government may have to bail out them anyhow ?

    Exiting the euro may sound ‘risky’ but all options should be debated thoroughly by those in the ‘know’ – economists – how about rasiing this with your economist ‘friends’ at tomorrow’s event in Dublin – ‘Responding to the Crisis’ ?

    Lots of things sound crazy until something ’suddenly’ changes and it’s too late – Dell pulling out of Ireland / tax revenue gone !

    • Nostradamnusalltohell

      “How could a growing company export competitively to the UK or US now? ”

      Well, same challenge faced by US / UK companies in their home markets! If there’s a cheaper foreign producer, then they are threatened.

      Some basics : cheaper goods from lower cost countries are usually made from intellectual property developed in now-higher-cost countries who created the products first and made money from them initially. After a while, the technology filtered out and now you don’t have to be the US or Germany to make stereos, cars (or nukes).

      So, you come up with something new that the lower cost economies haven’t come up with, and start selling that. Until they catch up. etc etc

      Monetary policy? Doesn’t make us smarter. It’s like deciding to eat in Maccers every day to save a few euros thinking that the goal is to fill our bellies. It’s not. The goal is to stay ahead. Economic isolation has come and gone across the millenia, usually accompanying times of crisis as doors are closed and defences go up as nations fear their own ability to compete openly against foreigners.

      If we can’t compete in the US or the UK it’s because we are making the wrong things to sell, it’s not the price we are selling at.

      Do it better than the rest, and you’ll have a market.

  13. Nostradamnusalltohell

    The article does seem to advocate leaving the eurozone, tacitly though. It could also be interpreted as chagrin that Ireland cannot participate in quantitative easing, or “printing more money” so that bills can be paid numerically, or indeed perhaps the article is merely analyzing and emphasising another aspect of eurozone membership. I think it would clear the air should David comment on whether he would advocate leaving the eurozone, or simply feels that being part of the eurozone means that we have too little control for his liking over our monetary policy given current circumstances.

    Ultimately, “leaving the eurozone” should be considered a last resort in the same way that monetary policy should be considered a last resort; at least viewed in perspective as a “painkiller”, not a cure. The core issues still remain, namely we are not a sufficiently productive nation given our degree of debt. Being in debt is fine, if we have a plan, and a going concern to get out of it. Business face this situation constantly.

    Being in debt because we have bought something expensive that ultimately does not generate economic rent (a general term for deriving income from an asset, not just the landlord / tenant relationship) could be solved in the short term by printing money. there would be repercussions however, namely :

    1. trust relationships with economic stakeholders will be altered : ( Imagine going to your landlord with a freshly stacked wad of Banalandia Dollars and paying the month’s rent with that – it’ll catch him on the hop today, but you know next month the rent is going to go up, or he’ll boot you out, or something will happen in reaction to it. There will be ripples. I’m not indicating that long term this is a good thing or a bad thing, but there’s no such thing as an economic free lunch. David’s right, we have to think about exporting more.).

    2. the nation’s clients, including the MNCs that use us as a eurozone production and taxation base will incur a cost in order to transfer to the new system. This will be added to the debit side of their P&L when looking at the Ireland business case. Again, just need to keep in perspective.

    3. the move will be seen to be reactionary by senior business decision makers who are also struggling to keep their ships on even keels in the current economic storm and they may wonder what other surprises could lay in store for their operations in Ireland in the future (similar to point 1 above).

    4. if you think the booing for Dustin in eurovision was anything to comment on, this on top of the Lisbon Treaty rejection would firmly establish Ireland as a nation that considered its natural role as a sideline player. (I find it interesting that the Riverdance Eurovision is mooted as one of the milestones of the growth of the Celtic Tiger. The passion, the verve, the hard work and creativity, the self confidence, the utterly emotional climax that signalled our entry onto the European stage…. then came Dustin, the product of a jaded, booze-weary, dumbed down republic that couldn’t be arsed coming up with anything decent and so decided that in fact they despised the Eurovision, its audience and their intelligences all along, a shambolic display a million miles away from talented performers who gave a damn enough to come up with hard work and crowd pleasers and celebrate victory in competition, something we felt we had transcended. That I think marked the end of the Tiger. I digress. But only a little. In the 90s we won friends with our pluck and talent. The only pluck in Dustin’s performance happened afterwards as our reputation as a creative force was stripped of its once-glorious feathers).

    5. it’s avoiding the real issue : lack of productive skills and technology, not the relative cost of goods produced in other currencies. Sure, the 1900 Dell jobs will be missed. The point is however that they should have been made irrelevant in the years since Dell came to Limerick : the cash inflow from the work should have financed the development of indigenous business that enabled Irish people to produce more goods and services more efficiently that the world needed. Dell gave Ireland billions for years. Now they’ve gone. And so they should : we had a good relationship while it lasted but it wasn’t going anywhere. Now there’s a new person in Della’s life, and this person doesn’t sit at home with a Man U t-shirt barely covering the beer gut; this one that watched Della from afar, and noted Paddy’s oblivion to the bigger picture while preparing in the background all along, delivers strong words, softly spoken, with a lean, six-pack infrastructure and the promise of a brighter future.


    I don’t believe (I hope!) that D McW is saying “leave the euro” (I’d be happy to know nonetheless). Japan is bonkers expensive but is superproductive and innovative, as Ireland should be too. It’s NOT A PROBLEM to be expensive, if there’s proportionate value being exchanged.

    Now, reinventing oneself means you’re taking a potentially open-ended, long time out of the game, and the world will have moved on by the time you’ve found your new identity, which may not be relevant to the new situation. In 5 years Europe may have pulled together at central level and decided to reward loyalty in trade and incentives to loyal member states. In its early days, Europe was incredibly egalitarian, the tiniest countries enjoying equal opportunities to the largest in some ways (politically at least, I know the economic argument is hotly debated). Luxembourg could be President for 6 months. But Europe’s growing up, and will have to make sterner and sterner choices. Whose team are you on? We cannot profess eurocentrism and secessionism simultaneously. Will there be a multifront economic series of adversaries competing for basic resources, influence and technological mastery, such as Russia, India, China and the US? Or will things be grand, and yerra will ye whisht with yer oul nonsense? Are we capable of seeing into the future and gambling THAT much? Not saying we’re not, I’m just asking. Zhou Enlai famously answered (in all due seriousness) when asked about the impact of the French revolution on Europe that it was too early to tell. it’s been less than two decades since phase 1 of the new world order rearrangement came about, and Ireland was caught in the upward wave of international economic activity, and briefly let the wind fill its sails until someone sold them an entirely unnecessary diesel engine that is now breaking down and adding unwelcome ballast. Next phase? Jayziz if we can’t see a credit crunch coming, I’m in no mood to predict Putin’s / Hu Jintao’s plans for resource management. Or where Ireland will lie on that particular chessboard.

    Now, all this would still not be a showstopping issue in my book were it not for one small fact : the leaders expected to guide Ireland into the creation of a new currency, renegotiation with MNCs and external country banks and leaders are incapable of grabbing distressed Irish banks, shaking out their leadership, rearranging our INTERNAL debt and acting in a calm, dignified intelligent manner. The people who would be expected to see into the crystal ball of geopolitics and climate uncertainty can’t find their arse with a map and both hands in daylight. Our financial regulator turns the other way when bank directors openly fiddle the books the day before audit through a system of cronies. Our leaders are not qualified or able to

    Leaving the eurozone needs to be well thought out, with the next 15 years prepared for, and worst case scenarios covered at least with potential upsides identified and scenario plans ready for extracting from the strategy files. The stuff of a well organised country with a dozen aces up their sleeves to say nothing of an unimpeachable reputation and whirring, well-oiled social structure and economy.

    I therefore conclude that Ireland has plenty to do before going it along on currency.

    Final (Asia-centric) note : a Malaysian friend of mine (ethnic Malay) chatted about the attitude of a Chinese friend of hers to the Malaysian bumiputera system, where non-ethnic Malays pay more taxes than ethnic Malays, and all listed firms must have a hefty minimum representation of ethnic Malay members. The point being that as Malays don’t have the same culture of hard work, and self-sufficiency as the Indian and Chinese minorities, they should be supported by the non-Malays instead. there may have been a case for wealth redistribution 50 years ago, but its bred the opposite culture than its intended one. Malays are less self sufficient than ever before. Anyway, her friend’s response to all this was, “[to hell with] them, I’ll just work harder and earn more money than them”.

    Sadly, this is what we need to do. Work harder. In time, we will learn how to work smarter as well. I know this may come across as patronising to the readers of this forum whom I have no doubt work damn hard. I mean that we have to view the next ten years as discipline and exercise, like losing weight after a massive Christmas binge that carried on for a decade. There’s no weight loss pill that’ll help. Avoiding everyone else in our (economic) community is to deny that maybe they have simply managed themselves a little better, and if we are seen to be working hard, then they’ll offer us their support.

    PS Nostramartus, have I accidentally plagiarised your forum name? from your posts it seems like you’ve been around a while, I am happy to change so as not to cause confusion. I was posting as Micheal earlier, I can revert.

    • nostramartus

      There is no need to change your forum name Nostradamnusalltohell , I rarely post a comment and I agree with much of your analysis , your explanation of Australia’s future woes and herd metality in the markets was brilliant but I think furrylugs key point
      “This mess will span the globe before the end of this year and shut off the emigration valve”
      is the message sooner understood by everyone the better. We live in a world of sound bites and text messages, in a war of ideas , quick victories in skirmishes pre-empting the vested interests propaganda might speed up their demise. The more nostra’s the better, I’m sure regular posters here will figure out we aren’t the same person, ireland is a small place and you have more freedom to speak by being based abroad.
      Marc Coleman some time ago described anyone pointing out the madness of the property market as being the fredo’s of the Irish mafia family, and we all know what happened to fredo. I think David Mcwilliams is being intentionally vague and possibly misleading in the above article so the government can’t take his idea and give it to one of their yellow pack economists, who are given an extra directive to protect the good old boys.
      A section of the Irish public absolutely believe the entire bank bailout was David’s idea, they refuse or couldn’t be bothered to read what he actually said, these are the very people who are going to be worst hit with negative equity, but they continue to parrot the spin of those who have switched sides mouthing platitudes like ” We knew it couldn’t last “. His plan was mutilated by an incompetent corrupt government, sooner or later the irish public will figure out the fastest way Ireland can regain it’s fiscal credibility is with a change of government and policys. Like the Lisbon treaty we keep voting governments in and out until they produce the policies we want.
      Paddy the pig below outlines what should happen, this is the best way to ensure we are the Michael Corleone of this story, the rightful heirs of the republic, we should be prepared “to go to the matresses” with those spinning why the celtic tiger bust happened and who was responsible.
      In the interim it’s a waiting game, custer’s seventh cavalry are already scalped and rightfully so, they got too greedy with their land grabbing and their prosperity was only an illusion that can’t be protected.

      • Nostradamnusalltohell

        thanks Nostra. Indeed, the more Nostras the better! I like that Nostra Thing, that Cosa Nostra…. the Corleones would love it….

        Mind you, speaking of the Cosa Nostra, it IS sort of why we are in this mess too :)

        Anyways, in deference to your exalted position as First Nostra, I name thee Nostra Prime. I shall remain Nostra Secundus…. Hmm… does that mean in the rules of this new secret society I have to carry out your errands…. I need me a Nostra Tertius (making up the latin as I go along…)

        So, who wants to be a Nostra? Great parties…

        OK, back to gloom. Dismal science and all that :)

        • Furrylugs

          That’d make DMcW Nostra Superbus

        • nostramartus

          All politics is tribal, the main ruling political parties have their family dynasties, there is no meaningful ideology, the dail has become a closed shop for solicitors, teachers, civil servants and publicans in real terms they are a mafia family.

          We have 20th century minds following 19th century rules, trying to govern a country that faces the reality of 21st century life.

          As DMcW has pointed out this is a generational war, so we have to learn to disseminate ideas to the target demographic of the popes children using popular imagery they understand, an academic thesis however brilliant is useless if no one understands it. This isn’t a dumbing down of ideas it’s just changing the presentation.
          The Cosa Nostra desribed themselves as “men of honour” it’s a matter of perspective, but there is no doubt a sudden change in lifestyle for a majority of the populace will have them frantically looking for scapegoats rather than accept their new reality. It wasn’t our omerta on the housing bubble that caused this catastrophe, we can defuse the enemies armoury by subverting their imagery for our own purposes, if the irish people are attacked with knives to implement public spending cuts, then we had better be packing a uzi of ideas :)to help counteract their detrimental effects, as men of honour it’s our duty to protect the weakest members of Irish society.

          It’s always good to have a second set of prints on an idea, thanks , but my view is more egalitarian, no first’s or second’s more of a collective thinktank, that can offer a selection of new ideas to problems yet to be faced.
          Looking at http://www.unitedminds.ie it looks like collective problem solving is an idea whose time has come.

          I think boiled down a concensus might be that the

          1. the dail has made itself irrelevant
          2. there is no support for mortgage relief
          3. we should’nt leave the EU or print banana republic money
          4. this titanic economy is sinking and we’ve only seen the tip of the iceberg
          5. the priority should be filling all lifeboats to capacity, women and children first, school buildings a priority ( this means decent social services , I think 26% of britain’s housing stock is social housing ours is 16%)

        • Deco

          Actually there is a big class issue in Irish politics also.
          But the real problem is sheer lack of talent. 164 TDs are present in the Dail. Only one of them has a qualification in Economics. And that one TD has been calling recommending recapitalization of banks that should be dropped. These are the people that have been filtered by the media to represent us, and they include some that even the media could not filter out like BCF and Lowry.

          I can’t recollect an industrialist in the Dail since Albert Reynolds left. (incidentally when he was present the Irish Times didn’t think he was suitable). In fact it would seem that we even have less accountants than at any time in the last thirty years. And they used to be the nearest the Dail had to business brains. Even they are in short supply.

          And what use is the Seanad apart from Shane Ross ??

        • Liam

          Nostra prime, and Furrylungs

          “this mess will span the globe before the end of this year and shut off the emigration valve”.

          Agreed, however under such circumstances its still not an equal choice: would you rather be a country run by ex-schoolteachers and a couple of people playing at being political leaders? or would you rather be in Japan, the US or even the UK or Germany? The crisis may be global but its effects, and the responses to it are not similarly symmetric. Sorry for being so negative, but I don’t see a way forward for Ireland as things stand. Hopefully I’m wrong.

  14. Thinking outside the box shouldn’t mean leaving it.

  15. David, patriotism is a seriously devalued commodity. Many Irish people abandoned the value of community and common cause, by jumping on the Celtic Tiger bandwagon. It was interesting to see a whole generation of Irish people willing to stampede with the herd, and price many of our more circumspect and risk-averse fellow citizens out of that most basic commodity – a home. In doing so, they became the ‘absentee landlords’ of the 21st century. Except this time, the enemy is more likely to be your next door neighbour, or a work colleague ; not some toff sitting in an English country house.

    The only patriotic thread linking us in this economic fallout is our common governance, and our subscription to a common tax base, which has taken the fallout upon it’s weak shoulders. Other than that, regrettably, it’s every man for himself.

    Only when the cheerleaders of the disgraceful excesses of the past 10 years fall on their swords, and face hard times in a personal sense – and let’s start with the gombeen politicians and banking elite – will the buds of a new patriotism emerge.

    The best tool to ensure this happens is to let the market do it’s thing, free of interference.


    • Deco

      We had the wrong sort of patriotism between 2000 and 2008. It was shown in that annual escapade to Cheltenham, or the Irish at the Ryder Cup, or the Monaco Grand Prix. It was very much in the travelling provincial rugby teams.

      It was what I would term – “attach some badge of identity to you, act like Paddy the Eijet, drink excessively, sing old songs badly, and then celebrate Irishness”. The whole thing equated to a massive load of horse manure. To see it at it’s worst extent, all that was necesary, was watch the Irish behave badly when abroad. Yeah, they loved the Irish, because the Irish were great for business. That was about the height of it. Besides those that were unimpressed never told us directly. Instead they remarked like the German Ambassador, in their own language to their own people concerning it. And then this resulted in idiots like Gay Mitchell going ape. Criticism of the national expression of arrogant behaviour was forbidden. You were Irish, and you were supposed to do certain things.

      We need a new patriotism, based on personal responsibility, fairness, social consciousness, and a refusal to support the vested interests that are bleeding the strength of this country.

      We need to have a culture of respect for our fellow citizen. We need a culture of personal, professional and community development. We need to build a society, not more houses. And we need to create, not simply to accumulate (junk). We need to start learning, and stop boasting.

      But first, we need to throw the culture of the “celebrationist drunken eijet” in the bin. That is our first step on the road to recovery. Our first step, before we will be able to write the Epitaph that Robert Emmet died for. Our first step on the road to self-respect as a society.

      • Liam

        Man, I hear you. I get this everywhere: “Oh your Irish! you must like drinking a lot, and U2″ (both of which i certainly DON’T enjoy). it would be a great aspiration to have for being Irish to be synonymous with enterprise, entrepreneurship and invention. But of course the first group of people that need to be convinced of this are the bloody Irish themselves….

  16. John ALLEN

    The Great Change :
    DMCW said : ‘ we realise that our early warning system failed and that those alerting us to the upcoming conflict were demoted ‘ – May I remind those that have read this blog for some time what happened to me when I ( qualified registered auditor) made my submissions to the ‘National Crime Forum’ in Civic Hall in Limerick in 1998 – Banks and Crime – I became ostracised ,ridiculed and the national reporters present never published anything what I read out to the committee .Nevertheless , it was all filmed by my private professional crew for the record.

    DMCW said : ‘As a result of this complacency ,there is a sizeable minority who are still in denial , believing that this is a skirmish that will be all over by christmas’- I must concur that we are an island nation and predominantly monoculture and we suffer from lack of insight at this most serious juncture of our existence as a nation .Today’s article attempts to show and explain what is Now happening and offering advise about what should be happening .It is enlightening us about what will be soon ‘after time ‘ ie in chinese ‘YU’ . Readers have difficulty in comprehending what this really means because this period of ‘after time’ will be upon us in a speed of lightening like a flash ‘ out of the blue’ .I would like to expand on this with readers and ask them to visualise ‘the ring fort ‘ on Dun Aengus on Inish More island http://www.mountainart.co.uk
    Imagine that the ring fort was a complete circle at one time and the remaining disapeared other half of the circle covered land jutting out into the sea /ocean .This would have indicated that if this was the case the nearby sea /ocean was covered in a vast landmass stretching out hundred of miles.Now visualise the picture as shown on the url and analyse its beauty and steep rugged rocks showing strong sense of cohesive security.This parting of lands did not and could not have happened from natural erosion but from something far greater than we could imagine .This original full circle ‘WU’ ( in chinese meaning ‘ before time ‘ ) is where DMCW is located now and where he perceives in his messages to the readers .
    The existing ring fort is only a semi circle and all lands disapeared and gone and almost without evidence it ever existed ,this moment is called ‘ YU’ ie chinese ‘ after time ‘ . This is the time we are now facing and must realise is upon us very very soon.We need to act to save ourselves before it is now too late .
    It would make good economic judgement for any business / political leader to fly Aer Arann and experience its presence so to understand its past – this a national duty .

    Altruism of Water : lets imagine the original circle as ‘The Euro ‘ now look at the ring fort again and you will see the euro is gone this is the forthcoming amageddon comming on the miday train from Dublin without breaks .Mr Lenihan please stop prevaricating and fall on the roman sword or do your deed for the nation.

    Water is full of beauty and we must learn from it . Adaptability is a key lesson we must quickly adjust to Now . I believe history also tells us ‘go to hell or to connaught’ and todays lesson also teaches us that we should demarcate our province ‘the state’ into a ‘euro state and ‘ a non euro state ‘ otherwise we are left in Hell.

  17. Glen Quinn

    I’m Glad Ireland is having a very big economic crises.

    It really shows the politions havn’t got a clue and in pricing up the price of a house to people like me.

    I had to leave Ireland in 2005 because I could not afford to live in Ireland as I found it too expensive to live in. After paying for rent and food stuffs, I had very little money left and I was working in an area that we deemed to be very good, I.T. Hopefuly the price of a house will fall by 80% and I can move back to my country and buy a decent home for 60,000 euros in Dublin (I anticapte unemployment in Ireland to reach 30%, I have also shorted the ISEQ and I am up a huge amount of money because I knew the politions would f@@k up).


  18. J Moran

    David, I cannot see your point here, you seem to suggest that Ireland should contemplate leaving the Euro, providing us a currency we can devalue, thus allowing our goods and services become cheaper overseas. But isn’t that simply the lazy option, akin to rewarding inefficiency, and ultimately self-defeating?

    The British will eventually loose competitiveness for their finished goods and services, due to the increase in costs associated with a devalued Pound. This will come sooner rather than later as they attempt to meet demand for their “cheaper” offerings. Worse still, as those companies haven’t become any more efficient in becoming more price competitive, they will be in a very fragile position should there be any future, out of favour fluctuations, in the exchange rate.

    A high currency, forces firms to become more efficient, by demanding they find innovative ways to reduce costs, in order to stay competitive. This ulitmately puts them in a far better and more stable position, than those companies operatiing in countries using the blunt instrument of currency devaluation.

  19. Deco

    David – you see the criris, you see the scale of it, you see what we are facing, and you try to deal with it. I am looking at the Dail, and I do not see anybody in there, who grasps this. And in the Seanad there is only Shane Ross who grasps the situation. We need you somewhere in our state structure making the decisions. I hope that you, or somebody who can grasp the situation like you can, will now run the FRSA.

    We are fighting to hold both our industrial base, and avoid debt deflation. It is extremely difficult to hold both at once. Basically, because of the Euro, we have to make a choice. You are right concerning the entire debt debacle 2000-2008. If we lose our industrial base, then we will get debt deflation, the hard way – as a result of mass unemployment and income collapse. Therefore you are correct when deciding which is the priority. Holding our export sector is the best way available to us in dealing with both problems.

    1) We need to do something about authority, management, cronyism, etc. in this country. Basically it is the root of all the problems in Irish economic performance. It causes massive disenchantment, and motivation problems. There are a lot of creative hardworking people in this country. Too many of them just end leaving for North America, or turning into alcoholics. We need to have a meritocratic culture. The most successful societies are the most meritocratic. Human institutions will have to now ensure upward mobility of ability at work, not ability at politics. Scandinavia, The Western United States, Israel, Japan and Singapore are away ahead of Ireland in this regard.
    2) We need to reform the institutions of the state. They need to be made more efficient. The old fogeys in charge need to be sacked – unless they “retire” like Neary. Our state is an embarrasment and does not inspire confidence. Maybe that is the source of the difference between interest rates charged to Gunther compared to what is charged to our Department of Finance ??
    3) We need to all take a pay reduction. And it needs to be the steepest at the top. Basically, currently our pay structure makes us highly vulnerable. And the Euro locks us into that situation. But pay cuts will have to be fair. We cannot afford overpaid politicians. Or overpaid company directors. It has to start there.
    4) We need to take the entire education system and have a good look at it, and ask if it is still competitive enough. Why are we creating surpluses of lawyers, architects, physiotherapists and arts graduates, when we have to import maths graduates. The education system needs to be fine tuned. We need to think about whether or not the school year is long enough. We need to think about school discipline, which is causing a lot of wasted resources. And we need to introduce effective reprimands to end dysfunctional behaviour in classrooms. But we need to do something with the University sector very quickly.
    5) We need to be honest about the damage done to our society by subsance abuse, including alcohol. And maybe we might need to have more social and community cohesiveness to help each other in hard times. Like what Ireland was like in the 1980s.
    6) Ireland needs to go on the couch and get it’s head examined. The collective consciousness between 2000 and 2008 went berserk. We seen a bull market, a euphoria in Bernaysian Consumerist BS, status obsession, corruption, and ‘pride-mania’. There was a bull market in arrogance between 2000 and 2008, which preceded all of the dysfunctional consumption. We need to find out why that happened and fix it. We might need to become more egalitarean and more ‘grown-up’ in many regards.

    David – your article – is worth more to us as a society, as we try to get ourselves out of this mess, than the entire commentary of Dail Eireann, The Irish Times, IBEC, ICTU, and the Irish Bankers Federation put together. You ‘get it’ with regard to our industrial base.

    • Nostradamnusalltohell

      @ Deco : great distillation of much of the forum’s discussions for some time now. It’s a very coherent, stepwise set of instructions. And I especially applaud the community angle, and emphasis on education. Education trains critical thinking; substance abuse, alcohol and easy money creates corruption at all levels.

      (On leadership / business practices) “Basically it is the root of all the problems in Irish economic performance.”

      No doubt about it. In Asia, it’s the biggest issue of all. The chairman of Diageo / Roche (believe it or not, the guy is boss of the two, he mixes pharmaceutical cocktails by day, and Johnny Walker cocktails by night I imagine! you can also imagine the breadth of the business world he sees through both companies) at a recent INSEAD symposium blurted out unambiguously that the most critical issue facing business in Asia was “business practices”. Which is the polite way of saying “corruption”.

      I’d like the forum readers to think about the following word : PERMISSION

      If you’ve got a little kid and you boost his ego, you’re giving him PERMISSION to achieve greater things
      If you’re a teacher and you listen patiently to your students you give them PERMISSION to challenge themselves
      If you’re a politician and you take 41k a year in the most egregiously greedy manner possible you are giving PERMISSION to everyone else to screw the system (as if it belonged to someone else, like I dunno, British overlords, oh wait, that ended a century ago)

      All our actions and statement define the PERMISSION we give others to behave in a certain way

      Remember ages back we argued over transforming the banks and the point was made that they are “rotten to the core”, and I said well it’s the top 5% etc that are the root of the cause? thinking about it, it is true that the system is rotten to the core, but because the other 95% are given PERMISSION to act this way. If they were given PERMISSION to act in a courageous, innovative, selfless, patriotic, outreaching, etc etc etc manner, then they would too.

      Like Clooney said in “O Brother, where art thou?”,”People, they’re always looking for answers”. In a sense, people are questioning ten times a day, “what do I do next?”. The leader’s actions give them PERMISSION to act in a certain way. And so people do. unless they have learned a core set of values.

      We have discussed Singapore versus Ireland here before. In Singapore, as I think Shane / mishko pointed out, it’s very Chinese. Damn me, but the Chinese have a tight culture. They have a set of rules / values, and they are proud of them. I wouldn’t be Chinese meself, but I see where they are coming from in many ways. Why does Singapore have no dole / pensions? Because if you can’t make it on your own, your family look after you. Like Ireland I suppose once upon a time. Now, what if there’s dole / pensions? Younger people leave home with a safety net, and leave their elders as well. The elders don’t contribute to the welfare of the youth. If you don’t work, someone takes care of you. In Singapore, it’s the family, in Ireland it’s the State. Now, if there’s an economic shock, who takes care of whom? in Singapore, still the family. In Ireland… well no money, sadly.

      Anyway, PERMISSION. What’s Obama saying when he shouts “yes, we can”? He is sayign “I give you PERMISSION to dream”, “I give you PERMISSION to start feeling better” “I give you PERMISSION to stop accepting the corrupt society in which we live, and to do something else”.

      So, let our actions determine how we affect the world around us. Let’s, as individuals, continue to express outrage, but lead through example as well. We’ve said it a dozen times on this forum, let’s be the change we want to see in the world. Let’s show each other that the answer to recession is not alcoholism, but work. Not begrudgery or infighting, but inspiration and community outreach. Not escapism, but education.

      Together, and individually, we can make it work.

  20. The Dude

    I don’t think Ireland will leave the euro that would be a bold a move by a government with a clue and some kind of plan

    The plan is wait and see, do nothing and things will get better at the end of the year and we the people at the top claim we have fixed everything
    the nile thats just a river in Egypt

    I was reading a few weeks ago that some older people in Germany look a the serial numbers on their euros and they only keep the euros printed in Germany, people laugh at them but the may have the last laugh

    it looks to me that Ireland could be kicked out of the euro

  21. tom barry

    What David is proposing is this:

    That we adopt The British Pound as our currency.

    Ganley has clearly paid him off.

  22. Furrylugs

    Lets say David was working quietly with the NTMA over the last 12 months because, as competent economists, they saw what was coming. They knew that the feeding frenzy would have to take its course before they got a hearing so they quietly set about building up a war-chest for the rainy day. They did this with minimal discussion with the Minister because he would have politicized the effort and probably screwed it up. Not that he or his staff would understand in any case.

    So now that everybody is all ears, the NTMA are bulking up their warchest whilst David is trying to impliment measures to protect it. Thus the dumping of toxics, known or unknown, into the “skip” will quantify the hit for the NTMA. Since it’s on the cards that we’re following Greece into default territory, High Level international bond renegotiations , or “McWilliams Bonds” would stave off meltdown. 20c in the Euro is better than diddly.

    Ted Kennedy pulls in the favour Obama owes him for shafting Hillery so we become the only country insulated from American protectionism, though it will cost us to keep our MNCs in rebates, training,capital equipment leasing or whatever carrot.

    A pre-emptive mature discussion with our European friends as to Irelands continuing membership of the EU (should Lisbon 2 fail, which is likely given the mood in the country) would set the sails firmly on the road to self determination. We would revert to being a Great Britain & Ireland trading entity effectively owned by the US due, in main part, to the inward investment repayable at punitive rates. Mainly to save us from being another Iceland.

    Given all that, lets say we’re on our own in 2010, the above having been a quiet plan all along by people that knew what was coming, how do we force a General Election. The only blockage in the system now is ,embarrassingly, the people who are supposed to be in charge.

    A director ordered me to slow down once, because I’d leave people behind me. I told him to catch up. I was slowing for nobody.
    If we have momentum for change starting, and I feel we do, we should drive straight through the old guard.
    There’s a New Ireland coming and sycophants have no place in it.

    • Furrylugs

      “we should drive straight through the old guard.”

      Rephrase that;

      “we must drive straight through the old guard.”

    • JJ Tatten

      Speaking of sycophants – I came across this piece on-line which just beggars belief – http://www.irishtimes.com/newspaper/weekend/2009/0110/1231515452724.html

      Entitled – The Long Road from Donegal – it charts the supposedly ‘difficult’ journey of the Tanaiste from small-town Donegal to Leinster House. Obviously she had to endure the crippling handicaps of:
      a) being both the niece and daughter of previous TD’s;

      b) having to work in Leinster House during the school holidays “for a few quid” (bless),

      c) coping with the social stigma of coming from a family who own a hotel, a shop, and a post office;

      d) being abandoned at a boarding school and forced to endure an exemplary education.

      My problem is not so much with Mary Coughlan – who has no control over the circumstances into which she was born – but with the journalist Keith Duggan who must either be a member of the extended Coughlan family or has been told the Tanaiste has pictures of him in compromising positions with a farmyard animal.

      He fails to pounce on Coughlan’s remark – “I have a daughter who would make a fine politician but I don’t know. . . she has the wrong surname for a start!” – and expose her family’s ‘tradition’ of nepotism. This is a woman who held the post of Minister for Social & Family Affairs and yet seems to think she can determine the optimum career path for a nine-year-old child.

      He also refers to the mourners at Couglan’s TD father’s funeral as … “a roll-call of the lions of late 20th-century Irish politics”.

      These people are not lions – they are parasitical men and women of straw who have repeatedly failed in the most spectacular fashion to chart a route out of self-serving, cute-hoor politics – and yet the Irish electorate continue to vote for them. Is it any surprise when a leading national newspaper glorifies them in this way?

      I can only console myself with the knowledge that Duggan had his nose so far up Coughlan’s rear, he must surely have suffocated.

    • I like the cut of your jib!
      Perchance ther is another chest, not visible to the naked eye, that will be drawn upon?

  23. Lorcan

    Good afternoon all.

    David > At the moment, we are fighting the new war with yesterday’s armory and we are trying to insulate the population from the reality of the situation by borrowing.

    Currency devaluation is certainly part of yesterday’s armory. It is not an option open to us due to our membership of the Euro. To be very clear, in my opinion, membership of the euro is currently Ireland’s only safety net. It is all that is stopping us from being forced to wind the economic clock back to 1980. Anyone here who has an interest in the stock-market will see how few IPOs are being offered at the moment, for obvious reasons. Imagine trying a currency IPO in the current climate. Any new irish currency would quickly become the ‘penny-share’ of the FOREX markets.

    At least we wouldn’t be worrying about deflation any more. Instead we would have imported hyperinflation by christmas.

    So lets not talk about leaving the euro, the constraints it puts upon us makes macro-economists uncomfortable, but the safety net it provides protects us from our politicians.

    So what other bullets do we have to fire in this war?

    I’m stepping away from traditional weapons here, but please indulge me.

    David looks with envy at the UKs ability to devalue their currency. We do not have that, but we may have the ability to devalue our economy. i.e. give the effects of a currency devaluation without the devaluation.

    15% across the board pay-cuts for all in the economy (public sector, private sector and social welfare), and 15% price-cuts in all domestically produced goods would have the same effect as a 15% currency devaluation.

    Yes, all imports would be more expensive in real terms, as would our debt repayments but so would they if we devalued our currency.

    David > At stake is the Irish standard of living.

    The Irish standard of living was built on cheap, easily available credit and unsustainable asset price inflation. The plan seems to be to sustain this standard of living by ignoring the asset price correction and replacing private borrowing with government borrowing.

    This plan is just as unsustainable as the past ten years of economic growth is proving to be.

    We need domestic wealth generators, not debt generators to have a sustainable economy.

    The current cyclical downturn is going to be nasty. David’s war analogy is not misplaced. But fighting a war always involves sacrifices. There is no plan that will see us through this fully intact. But if we don’t choose our tactics well, and use them only in the battles we can win, the amount of collateral damage we will sustain may be too much.

  24. John ALLEN

    Towering Inferno – I am very surprised how many in the room are really in denial still and remaining too far away from ‘battle zones’ while the enemy is encroaching rapidly to your door steps – i have upgraded my prognosis to a Euro devaluation within 4 weeks .Only the Bank Chiefs are funnelling their bunkers and in good time too to get ready to hide and avoid the outcry. This should be marked with a government warning – its Time to run for Your Life

  25. Irishabroad

    As a native Irish citizen currently living in Germany, Munich to be precise, I sense some frustrated frantically fear based outbursts in the above and after spending 2 weeks at home in the green Isle, understandibly so. For the record I wasn’t forced to emigrate but in the last few years having worked for almost a decade in a leading multi-national with subsidraies in Ireland I felt it was time to jump ship before the water truly came cascading in. As DMW rightfully predicted for the last couple of years.

    Having time abroad and reflecting back to my homeland, I can see the beauty that is worth fighting for. Lets not run frantic proposing to jump the euro ship, instead lets see the positive and the way through this current storm.

    Munich in particualr at this very moment isn’t being hit so severly, for example top Munich based insurance companies like Allianz, SwissRe and MunichRe are holding their own. The mentality and work ethic of the Germans is to be admired, I must admit that I too used to scoff at the frugality of the Germans while we sploshed our dosh around. Now I truly appreciate their relentless demand for value for money, an ideology that has still to reach our western shores. This should and needs to be one of our longterm goals.

    In the medium term, yes, we are very much linked with the US and UK markets. However if we see ourselves as Europeans we need to market this unique positioning of ours to our European colleagues. Our Geographical , linguistic, cultural and social positioning needs to be marketed to our European colleagues who are from my experience struggling to bridge the gap (I say this from current work experience dealing with many multinationals here in the Bavarian/ Austrian area). The short term solution may appear to hold hands with the UK and US but unfortunately we have been there done that…. lets take the new road of showing our European colleagues that we are committed to making Europe work , we need to show them that we can use our unique skills as an English speaking, highly educated, young and dynamic workforce. The independent online this week said that Ireland was one of the leaders of Europe with birth rates and life expectancy with Germany having one of the lowest birth rates in Europe. Quite frankly an issue Germany seems to have no interest in rectifying. So in brief, instead of running from the Germans and the Euro at this stage we need to set our price and show them that we know our worth.
    Instead of running up North buyng UK sterling goods, hold strong, be frugle, buy local, buy Irish… Its a war after all…

    • Deco

      You said {English speaking, highly educated, young and dynamic workforce.} Would you be talking about Poland, Eastern Germany, India or Singapore ?
      This is the usual ‘rally around the flag – you have to be proud to get any respect in Ireland’ BS. This is the type of rubbish that was propagated by the clowns in the Irish Times Business Supplement for the last ten years. Pride was the source of all the stupidity in the last yen years. Everything from those ridiculous ‘bullishly optimistic’ forecasts of Dan McLoughlin, to the minister who declared “these banks are orphans to the world” in October.
      Time to stop deluding ourselves about our ability. This pride – come – we are something special – aren’t we nonsense.
      Dell don’t seem to care. And it doesn’t seem to be of any use to Waterford Crystal. Our workforce is fighting competition. And, evidently, and our workforce is losing. So we need to make ourselves competitive. We need to get our costs under control – but the problem is that there is an established, entrenched and powerful coalition ensuring that this will not happen – I call it the Economic Rent Infrastructure(ERI). The ERI is the real government. Cowen and Co are just imagining that they are in charge. But they are checked every inch of the way. Just look at the latest comments from the ICTU – the ICTU is against deflation. The ICTU clearly doesn’t understand economics. We are uncompetitive. Therefore we will get deflation – regardless of what the ICTU or anybody else thinks. We just better learn to adapt to it, and remain competitive.

      We need to get honest with ourselves. Our educational standards are slipping. And we are preparing people for the wrong occupational groups. We need to prepare people for work, not positioneering etc.. We need to reform FAS – because it losing also. We also need to establish a new philosophy of management in both private and public sector, to reward effort and transparency. The Irish Management Institute should be sacked in it’s entirity. It is only a self-praise association full of incestuous networks, mainly obsessed with golf and rugger. It is not professional. Not based on what we have seen in 2008.

    • Deco

      Irishabroad – sorry if I sound annoyed. But we need to go back to rebuilding the capabilities that matter to us. Ireland Inc has gone on a binge of self-congratulation since 2000, and we need to get real with our deficiencies. I am annoyed because I am listening to the Dail, and they are firing shots at each other and solving nothing. And I do not think that we are any better than anywhere else with regard to our workforce.
      We need to get honest with the human infrasctructure, and it’s deficiencies. The loss of Dell will reduce this countries GNP by up to 5% (depending on suppliers affected). That is 5 % of the national income. We need to get our act together. It is now getting bit like that scene in “The gladiator” – when the chariots charge in and Maximus and his pals are standing like skittles in front of them. We need to get down low, (deflate the cost base), make a defensive formation(defend the industrial base), and stand together along the same level(no more cronyism). Anyone with their head in the air(still ‘celebrating’ and feeling ‘proud’), will be chopped into minced meat and will not survive.

      • Irishabroad

        Deco, no apologies necessary, I’ve been so annoyed by so much of the diddly di dancing leprachauns in the last few years that I felt it was better to leave the emerald isle. On many levels I’m still annoyed most especially at the lack of leadership in Ireland. We all know that we can bitch and ball on for the rest of our days be it here on a comment board, in the bar or to the TV set, how often have we done it in the past and how long more will it go on for. The GAA mentality of Irish politics is appalling… We’re a FF family, we’re FG supporters.. FF being re-elected last year hit a low punch. Brendan O Connor on the NYE Tubridy show rampaging on about the good auld Bertie days…Hello what engratiations has he been receiving (apologies I again fall into the GAA trap).. Its true Ireland is sinking and fast… With regards to your comments on Poland, Eastern Germany India etc. Having experience on setting up subsidiaries in these countries I still see our vantage point. I agree education IS the key, if it takes loosing our manufacturing jobs to realise that higher education more specialist training of our workforce is needed, then so be it. My comments with regards Ireland being an English speaking country are in recognition that the world is becoming more and more globalised in its workforce. Globalisation of industry implies the need for tiered structures within the global firm. Ireland needs to look upwards , away from the manufacturing line level , up to the management and service delivery level. Look at the jobs that are being retained in Dell.. the higher level jobs. The Pols the East Germans the Indians don’t have the natural gift of the gab. In gloabalised industry, English and IT are key to each organisation, we have English thanks to our 800 year occupation , we also have a somewhat educated IT workforce where we fall is again back to the lack of government initiative, The island of Ireland is small in global standards its a disgrace that broadband isn’t nationwide, that Eircom still have a monopoly on line installation. The way I see it our mentality needs to change, this whole parochial approach to politics has to be thrown out. Will it ever?? I say this having first hand watched fantistic young people try to break through into Irish politics only to be blocked again and again by the powers that be, all hudling together all following each other like sheep. We need a leader and we need one now. We also need accountability and integrity, the begarragh begosh diddly di drinking dancing image we’ve sold ourselves as for so long needs to be put to bed and we need to remember where we truly come from, we were once the land of saints and scholars, bringing education back to Europe. Unfortunately we’re now the land of beggars and robbers… Deco will you be our new Leader??

  26. Ciaran


    Completely agree and I’ve set up a group on facebook to get support for conveying the same message to people, i.e. we are in crisis and need to get competitive quickly, cut public spending but keep investing in infrastructure. As a first step I have suggested people join the group and email their local government TD to convey the message for urgency.

    For those interested in helping this group put pressure on the government or with their own ideas, it’s called:

    ‘Send the government a message’

    search for it in ‘Groups’ on facebook

  27. Get real Ciaran,
    the day of placing hope in petitions is long past.This gang in power are bankrupt of everything except their Mercs and their massive salaries.
    Question is -when they go-(not if) who will then confront all of the vested interests;reduce public sector wages; double capital gains tax to the European norm; (a bit late-but better than never),hike up the top rate of income tax by at least 10% (less confrontational than reducing public sector wages-but the same result); chop 1 billion off farmers grants and subsidies;and abolish all the crony jobs such as Ministers of State,Quangos and so forth.
    Nobody!- is the answer.

  28. John ALLEN

    R28551 – reveal your name if you are over 6 years old

    • Deco

      Or maybe they are telling us they made a mess of it, to such a scale that only now they are beginning to comprehend how much damage they did….

  29. Ciaran

    Look, I don’t support this government at all, but I’m trying to raise awareness of how serious the situation is as people seem to still be in denial. As long as the current lot are in power we must pressurise them to do the right thing…but also try and force them from power by making people aware of the crisis.

    • Josey

      maybe i’m in denial too, though this week we were told to take a 15% cut, so that was a shock. In plain english how bad is it?

  30. John ALLEN

    Limerick Bacon – once upon a time when the pig slaughtering house was in the city center ~I use to visit it as a young boy to watch ‘the process’ – the pigs were placed in a pen awaiting the slaughtering beside the rotating roasting circular oven they all looked normal , I noticed that the pigs only started to squeal when they smelled the blood and at that stage they went completely frantic .

    • Frank mc Court aint got a patch on you john…maybe some chapters on the hard life in Limerick way back when will tap into another market for the new book? The yanks love that stuff.

    • Colin

      I remember as a young fella walking down roches street on a saturday morning and hearing a loud squeeling sound.

      I’d ask daddy what’s that, and he’d say that’s the sound of making sausages!

  31. Mary

    David, I’d like to see your draft of a bulleted pros and cons of leaving the Euro. I’ve been thinking about this approach for the last couple of weeks but I don’t know enough about economics to know that it’s the way to go. Perhaps what Lorcan said may have the same or similar results…

    ’15% across the board pay-cuts for all in the economy (public sector, private sector and social welfare), and 15% price-cuts in all domestically produced goods would have the same effect as a 15% currency devaluation.’

    …and if so it might be wiser to take that approach first, along side other measures.

    The economic situation of our Nation is catastrophic, however, the catastrophic absence of leadership in the government is a huge problem.

    If we had a leader with vision and intelligence to take the necessary stringent and dramatic steps to begin to create a better Ireland we would have some chance of survival. I think the citizens would make their best efforts to pull together and support their leader, no matter how painful the cutbacks were. Leadership inspires, motivates, and creates trust. With a competent leader survival followed by success would be the Nations future.

    I too have been describing the economic situation as a ‘war’ and I would like to see an economic ‘war room’ in government headquarters with ten of the best economists on the planet sweating over a dynamic plan to get us out of this mess.

  32. Enjoyed the WWI feel to this artilcle. We are indeed facing not only Total War but a Total War of Attrition. The question is how long can we hold out under this current government and its ad hoc strategies before the enemy (from within?)decides to come at us and “go over the top”? (Trench Talk)

    The approach that has really bothered me in the last while is the one spouted out by Hannifin, Lenihan, Coughlan and o Dea to name but a few and it is that we they must find cuts of 2 billion euro. These esteemed folk are the countries best and brightest no? I mean they are the best paid poiitcians in the free world! So why the hell are they so focused on finding 2 billion to slash when the clever and productive thing to do would be to create ways of generating 2 billion euro? They are embarking on a course of action that I or any other joe bloggs could have chosen i.e. the obvious easy options and soft touches. This is not what we pay them hansomely for and i for one am not impressed.

    My pridiction for 2009 is that the resulting League of Nations from this econ crisis will find Ireland FC some where in the conference.I

    • VincentH

      Exactly, find the 2 B’ by making it, or examine the tax code and strip out all the roadblocks designed to protect sections. Also remove all bits where the getting it in cost more than the get.
      At the moment the problem is one of liquidity. And we have enough of that if we stop the banks hoovering up. And they will, they cannot do anything else, the debts require that they do that. We need to control the when and the amount.
      There is a certain amount of BS with the statement that the economy needs the banks. And while we do need bits of the banks we do not need all of them. Remember, the banks are Ltd. Each bit of them.

  33. Ed

    Michael Hennigan and Irishabroad above, have outlined what is to be done – it’s time for a reality check and a true appraisal of what we’re actually doing versus what we could be doing to maximise the benefits of being within the European market – do we have to depend on US MNC’s to create jobs for us in such a vast and wealthy market ?- the answer should be no! Let’s face it, we’re lazy when it comes to languages and that’s the problem. Hundreds of millions of sophisticated consumers on our door step and we don’t do anything to avail of the opportunities that that offers – we just leave it to the Americans and hope that they’ll drop the odd crumb while passing through.
    For me, Europe is my saviour and all the effort put into to gaining market share is paying off handsomely. Over the last number of years, while driving, I don’t listen to any of the overpaid RTE presenters, but hone my language skills by listening to a disc instead – it’s turned out to be a very profitable investment in time.
    Europe is where our real future lies and the sooner we accept that fact, the faster we’ll recover from the excesses of the past number of years.

    Terry Prone’s piece in today’s times – Ditching corporate altar worship is a big opportunity – has a certain resonance about it.


  34. John ALLEN

    Into the West – there are no high brow cliffs on the east coast only remnants of earlier eroded fields on sandbanks that stretched to UK – In the west you have high brow cliffs with rugged sharp coarse surfaces that once belonged to a greater kingdom – now all lost and beyond out there in the Atlantic – Ireland Inc is heading that way ……where no man has gone before ..or maybe !..Welcome to Galaxy Universe where nothing happens …..your captain calls you ‘please take your pill of morph ‘ we are going to morph to Dolphins to join our cousins already there in the Deep Dark Ocean. ( da yu yu code )

  35. The game of chess, is like a swordfight
    You must think first, before you move
    Toad style is immensely strong, and immune to nearly any weapon
    When it’s properly used, it’s almost invincible

    wu tang clan,,,,,,,cheese boxing

  36. Davros

    “The independent online this week said that Ireland was one of the leaders of Europe with birth rates and life expectancy with Germany having one of the lowest birth rates in Europe. Quite frankly an issue Germany seems to have no interest in rectifying.”

    Ingenius. We send our unemployed youth to fertilise Germany! They get children, we get BMWs and sausages.

    • Deco

      The problem is that many German women don’t want to have kids. But I am applications would arise for such a program, if proposed :)))

  37. John

    I’m not an economist, but is it not blindingly obvious with the national obsession that we have for buying property, that it would be in the self-interest of Ireland to have an affordable housing-stock? The cost of a mortgage must feed into the cost of employing a home-owner, so if cheap housing is plentiful then wages will be relatively lower, which would help on the cost-competitive front.

    I think if the government could keep a lid on three variables, the cost of education, the cost of health and the cost of housing, then I believe it would help with maintaining a nice steady mix of manufacturing and “higher-end” jobs in Ireland.

    The mantra that we need to go up the value-chain, is a nice theory, but no country is made-up solely of Ph D. students, society is a mix, so we need a good mix of unskilled, semi-skilled and skilled opportunities.

    • Deco

      It takes years to have people going through univesity/technical colleges. How do you pay for everything when the bright sparks are all studying biochemistry ? That is if they are studying the stuff ?
      Does Irish society still produce studious types ? I thought we spent the last ten years celebrating the acheivements of the wheeler dealers, bureacratic chiefs and soccer stars ??

  38. Philip

    I agree with the general view that DMcW is not calling for a walkout on the Euro. Anyway, screwing around with exchange rates, Monetarism, Keynesianism or whatever “ism” only affect transient behavior. They do not tackle the core problem. We are expensive with respect to the value we generate. FULL STOP.

    We know how we got here. Over the months of being on this Blog, the notion of economic rent forms the basis for a lot of the difficulty we have here. Charging money for use of an asset in the most inappropriate of manners leads to bother. Economic rent forms the basis for a lot of what is wrong in this country – call it cronyism, nepotism etc. There are a lot of people here (too many it seems) who make a good living from being blood suckers on the productive capacity of nation.

    Lorcan has hit the nail on the head. We have to take a pay cut across the board. That means everything. And all economic renters should pay big taxes on their assets in proportion to their yields.

    I have worked with Dutch & Germans. Very organized and straight and frugal and value conscious. They are no more intelligent or brighter or effective or organised on an individual basis than your average paddy. And they have just as good a sense of craic. But we need to mimic their sense of collective focus which we lack.

    The paddies can be collected and motivated. But their medium is music and craic. Our entertainers, our social commentators, poets need to come out and call this and lead the nation into a common theme where we can work together. We need to roll back all costs of domestic goods and services and back to 1995 levels. We need to provide a buffer for those (means tested) with large debts to reschedule their debts. We need to recognise that Ireland has never really economically developed to the extent we were led to believe. This, combined with our achievements in shaking off our past taboos relating to our past religious mores may mean we could be back to current levels in very short order.

    The choice is stark. Take the hit now or have it forced upon us.

    • L

      Philip, I see great danger in all of these big labels such as capital labour renters bloodsuckers. We need to be far more forensic than this. I am neither conservative nor socialist because i do not see the people as a blind herd that need to be pushed around all of the time. The next real boom will be driven by outsiders mavericks and even some castaways. In the meantime we could get a green boom but this will probably overshoot in the absence of another more real boom taking place simultaneously.

  39. Philip

    We need Seamus Heaney, Nell McCafferty, (even Bono !), getting concerned publically.

    Current lot has to go, now.

    We need a full review of what is stopping unit costs from being pulled down and triage what we can change in terms of input costs and go for it. This is an emergency mission that needs major focus and I believe we are small enough and Irish enough to pull it off. It should be seen as a project with a short term with agreed ramp on and off. It’s open book negotiations. Lets look at the margins people are getting – Private and PS and let’s peel it back to what we can work with. Visibility is key and people should be encouraged to whistle blow (as in Sweden).

    One area where costs can come down considerably as they have no uncontrollable input costs are Legal.

    • Deco

      Does this mean that Bono is going to offer to pay his share of PAYE like the rest of us ???

    • Colin

      If Nell McCafferty is someone we must look for leadership, then we are destined for damnation. Having a big mouth is no reason to be listened to. Empty vessels make most noises. Nell McCafferty is a pseudo intellectual who has never done an honest day’s work in her life. I can think of 40 women along the road I grew up on who’d have a better idea of what’s to be done with the country than NMcC. Just because RTE/Irish Times love her doesn’t mean she should go unchallenged. Its time we slew the sacred cows we were told were sacrosanct, and that includes NMcC.

      We need people like Ed Walsh, Shane Ross, Michael Smurfit, not some wishy washy thespians.

  40. I usually only get the indo on sunday for the jobs, dion fanning, kerrigan, ross and to re-affirm my dislike for the smug irish….o connor, o dea and harris etc. (Mind you Brendan has become a little more in touch since his introduction to fatherhood, natually) Interstingly, two journalists that i usually only give a cursory glance to (dudley ed and ?) both touched on something that i recently read on this blog and agreed with (shane dempsey?). It was not the first time i heard of this peculiarly irish ‘mindset’, a mate of mine once explained his enthusiasm for following the dubs in the league as well as the championship as being more than fanaticism, he shouted to me at the top of his voice that it was Tribal! It was 1983, he was 14.

  41. Ment to add….I lived abroad like many on here for a good number of years and the question I was usually asked when meeting someone for the first time was ‘What do u do?’ particularly in the states….when i came home the question always changed to ‘Where are u From?’ weird

  42. shtove

    Hold steady, don’t panic.

    Paying down debt is an excellent idea, because debt will be a hangman’s noose for the next ten years. And it doesn’t stop the Irish from thinking seriously about their position in Europe.

    Wait to see what happens to the UK. They run a financial/services economy, which makes the debasement of their currency a disaster. Bye bye NHS, huge public sector redundancies, exponentially unaffordable pension system – fewked!

    The Tories will come around to the euro in a couple of years time, and Ireland can make clever gains from that political shift.

  43. Tim

    Lads, It may take a while to digest this article – there are probably machinations in the background that David is privy to, but we don’t know yet – but I do not think he really wants us to leave the emu.

    We do not have anyone currently elected who is capable of guiding a lone-ship currency anyway.

    Johnny Dunne, “Exiting the euro may sound ‘risky’ but all options should be debated thoroughly by those in the ‘know’ – economists -”

    ………… most economists are not in the know – or, if they were in the know for the last ten years, most of them apart from DMcW have betrayed us for some personal gain and ramped up the bubble. How many warned us? DMcW and maybe George Lee to a lesser extent.

    Lorcan, I like your idea about the 15% across-the-board; however, if we apply Deco’s analysis of D4 cronyism (because he is right), only the ordinary workers would have the cut forced on them. Now, I realise the cut would be offset by the 15% reduction in prices, but I do not believe that the knobs and the golden circle boys would give themselves the 15% reduction and give up their helicopters. This would simply, yet again, widen the gap between the wealthy bosses/leaders and ordinary working people. The rich getting richer and the poor getting poorer – just as it always has been here. That is just doing what we have always done, therefore we would only get what we’ve always got.

    We need to do something DIFFERENT, and IF the 15% could REALLY be forced on ALL (which I doubt), then that might be it.

    Deco, I think support for indigenous production should be credited to you – you have been saying it here for a long time and I agree with it; I think it should include agriculture and fisheries, though, because we have such wonderful natural resources in these with the damp climate giving excellent groth in the soil and being surrounded by water, but our leaders have sold these out to the EU and handicapped them to the extent that it may prove prohibitively expensive to revive these two sectors and that is a GREAT pity. It would also involve convincing people that soldierofdestiny’s commonly held approach to farmers is erroneous.

    • Deco

      Time – yes – it all starts with resources. We need to amplify whatever resources we have so that they produce.
      Farmers are like every other worker in the economy – some are heroic, some are dossers, and there is a large body in between. And the resources they have vary a lot as well. There is an issue concerning underproductive, or non-productive land – it is a wasted resource for the society. Often this is as a direct result of EU policy !! And it can be a result of land held by specualtors like developers, millionaires,etc…In the Irish stock exchange the most successful company in the last twelve months has been Kerry Foods. Kerry Foods does far more for Kerry than Jackie Healy Rae or that fool O’Donoghue will ever do.

      Fishermen are all heroic. But our political leadership had no idea of the resources in our seas, so the sold out to the EU. That was disgraceful. Their votes were taken for granted.
      Our industrial base took generations to build. We have to hold it. David says this is war. He is right. We have to fight to preserve our industrial base.
      Then there is our intellectual resource. I think we are in trouble here, and nobody sees it. I think that having Hanafin in charge of education, and Harney and Martin in charge of FAS resulted in wasted years. We need to encourage the nation to develop their intellectual capacities also – I learned that from you Tim. We are not keeping ourselves up in front. We are not serious enough about it. Yes Cowen did make a massive amount of money available to the Universities. But it was a bit like the Saudi sheikh approach – it was all on buildings. Build and they will come. I think it needs even more effort.
      We need a deep honest discussion about what is needed to push our students and our workers to the top of the league again. Maybe it is smaller classrooms. Maybe it is longer school years. Maybe it is different methods. But we have to get ourselves to the top, and stay there. I am very wary of the politicians and the teachers union bosses creating a HSE style organization full of unqualified cronies and relatives to “run and administer” education. It would ‘Harneyize’ education. We need to get this right. Especially in maths and the sciences. I would say that we definitely need to change the balance in third level because we are producing far too many solicitors, physiotherapists, and architects. We need to be asking Intel and MicroSoft what are required.

      Nostradamustohell has provided a really inspirational quote [Let’s show each other that the answer to recession is not alcoholism, but work. Not begrudgery or infighting, but inspiration and community outreach. Not escapism, but education. ] is the path to us fixing this. It has it perfect. Bin Cowen’s Framework – Nostro has the real plan.

      Lastly, we need to ask the question, has the Irish school of management practice failed ? I think that the Irish way of big organization management has failed. And it needs to be thrown out as fast as possible, and replaced with simpler, more effective and more accountable structures. Like exists in Scandinavian and Japanese organizational models. Irish organizations are top heavy with wasters and incapable liars. They need to be rooted out. This would result in a massive improvement in the performance of the economy.

      • Furrylugs

        You’ll always get that with macromanagement Deco. Co-operative micro-economy funded locally in the regions and linked to regional Institutes is the way to nurture seedbed business. I’ve seen several examples flourish until they hit Enterprise Ireland level. Then they flounder or sell out abroad to the highest bidder.

  44. Mary


    Dr Alan Aherane (NUI Galway) predicted what is now happening to the economy. The link is to an article he wrote in the BP in Oct, 2005!


    • Tim

      Thanks, Mary; and that makes three ……… So, Johnny Dunne’s idea would have three whole expert economists in the room discussing recovery – that might actually be enough, really.) …….. any advance on three, people?

      • the mediator

        Tim. Mary et al

        There have been many economists who have predicted what is currently happening. I’m an academic and myself and many of my economist colleagues
        often participated in discussions where we predicted dire trouble for Ireland inc on the back of what was happening re housing etc… We were generally dismissed as doom mongers (usually by accountants – economic rent specialists) and I myself was often accused of being of being bitter because I missed the housing train.

        The issue is not that there are not economists (or others) who told things the way they are – its just that RTE only bring on the same two or three vested interest accountants (Jim Power, Austin Hughes etc…) to fool the sheeple. RTE never try to source a variety of view points and rarely tap the vein of academia for genuinely independent voices.

        Similar argument applies to the papers. The problem is the mainstream media and the sheeples blind following of same.

        • Tim

          Mediator, that makes sense, alright.

        • Mary

          Mediator, thanks for explaining the ‘vested interest economists’ and the lack of variety on RTE. I’ve rang RTE and requested (by name) economists that I think the listeners might benefit hearing from. In my experience, making such requests does, at times, prove successful. Time will tell.

      • the mediator

        Sorry I meant “vested interest economists” not accountants

  45. Well what a wet Sunday it has been here in The Sunny South East, and Mr McWilliams opens his column with the very word War shows us what a silly game this deluded economic think tank of life really is ?.
    There is no need to throw away The Euro it serves us well when we leave here and go to Beligum and up to Holland before we drive down to Germany before we fly back home again. What we need to do is some Honest Work, like the old Paddy did when he worked in the U.K. or New York, we have to do that now and Leadership from the Front is required. By a simple stroke of a pen Brian Leno could stop the tripple and double pensions been paid to ex politicians while they continue today in other high paying roles.The 6 banks in trouble all their top level management retired , without pensions. How can any man on a 1 million a year salary , need a pension for the last few years of his retirement.
    Greed is what has us here and hypocritical nepotism Why do we pay the men who are in daily charge of our Army, Navy, and Garda more than we pay the ministers who run these institutions ?. Why in Ireland do we pay the Lord Mayor of Cork more than a US Senator.Why did a civil servant buy a new s class merc for Biffo and now he won’t use it and they have to keep it plugged in other wise the on board computer will die ,..and they can’t give it back to the dealer !.
    David Mc Williams Your Time has come , Its time now in Dublin South you too went forward as an independent voice of reason with Your Mandate for not just those of south Dublin, but of their brothers sisiters and friends across the whole island simple really .
    Other wise all here has been just for idle vanity , while we wait for our hookers with the coke to arrive out side in the limo , Ah sure isn’t Ireland Great !
    It’s time we worked our Land instead of putting up un planned buildings , if The Irish Horse Board can have my cousin out in Dubai for Christmas with his boss there, why can’t we have Dairy Boards down in South Africa to help them feed the World Cup Fans ,or visit Dubai and sell our quality food to their oiled citizens, we have to wake up and Bono if he ever wants to see his tower , he can pay tax just like Michael O Leary does , or fuck off to the south of France.
    By starting with local economics the first page we can fix this country for the betterment of the people not just for the few, Last year I tried to create 150 jobs here producing http://www.niclite.com but because I would not pay the fee to the Irish Medical Board , I cannot sell it here, yet when I fly out of L.A. I can grap a bottle at the airport and even take it on the plane . My point been we have an elite Family of Families here and like the Mafia or criminal under world we have laws ,Anarchy is an entirely other state of mind .
    As Mr Allen points out at time it is periodic moments as the fall of Rome this time it’s of Ireland from Wealth to Slum in a decade of descendant double standards.
    It’s time for a ground swell with the chaos principle of the butter fly building the hurricane , we as a group of Islanders are owed proper leadership in stead of the joke and watching RTE.

  46. Tim

    Lads, I think Kerrigan has been boning-up here, too ……. the article is remarkably familiar. Glad some sense is in the mainstream media still and written by someone who has remained steadfast in the face of ridicule. Thanks, Gene.


  47. Tim

    What if David is parodying The Beasty Boys’ song here and, actually, warning us that the back-room fools are considering pulling out of the euro because they know they can’t get Lisbon passed and they are still trying to maintain house prices so the D4s can maintain thier right to “party”?


  48. brian

    Not for the want of attracting allegations of being a racist.

    If Irish people are forming long and longer dole queues and non – eu foreign nationals are still getting the free ride from the tax payers, how long more will the cead mille failte last, or is that sign gone.

    I firmly believe that Mr. Obama with the wieght of the world dumped on his shoulders is going to make changes….
    To the United States of America ….we and european community aint his problem.

    We need to do the same fix this country first, worry about others afterwords…..

    Time for some of that tough love our parents and grandparents know all about.

  49. brian

    one other thing, if the waterford wedgewood pension fund has a 120 million black hole,
    is Sir T. O’Reilly going to fill it from his personal billion fortune.

    He has his Pr people working the British media , what a brown bag article in the Observer business section today.

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