March 8, 2009

Who will take the blame for the Great Depression of 2010?

Posted in Irish Economy · 386 comments ·
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Is raising taxes the best thing to do in a crisis? What economic theory tells us that, in the face of a meltdown in the economy, the best thing to do is to reduce expenditure and raise taxes? There is none. The lunatics have taken over the asylum.

Making one drastic policy mistake in fuelling the boom with cheap money and tax cuts was bad enough, but making a second one, cutting expenditure and raising taxes in the bust, would be inexcusable.

I am now about to do an unfashionable thing, I am going to make the case for dramatic income tax cuts, offset by property taxes and an expansion of moribund monetary policy through mass debt deferral.

We shouldn’t worry our heads about the implications of this idea, because, if we believe in the logic of monetary union and the irrevocable nature of the euro exchange rate, we should not be too concerned about how big the budget deficit is, or our ability to finance it – because it will be financed.

In addition, if we believe (as I do) in the Irish people, in the long-term economic implication of our demography, in our ability to attract investment based on our workforce and in our ability to create our own companies, these tax cuts will become self-financing.

Granted, these are big ifs. However, we are now following a nihilistic policy which will turn our recession into a depression and will yield us absolutely no economic benefit, either now or in the future.

The consequences of today’s Herbert Hoover approach to the economy will be exactly what happened in the US at the beginning of the 1930s,where a bad situation is made worse by policy mistakes. The Irish depression of 2010 is going to be entirely man-made. Don’t forget this when it comes to apportioning blame.

Here’s the deal. With a few notable and well-known exceptions, the consensus economists who talked about how the housing boom would plateau and achieve a ‘‘soft landing’’ are the same people who are now suggesting that Ireland should deflate its way to growth. They are aided and abetted by mandarins at the Department of Finance who have got all of their forecasts wrong. Why are we still listening to these discredited people? They know nothing!

Let’s call these people ‘the fundamentalists’, because they were -and still are -constantly invoking ‘the fundamentals’. In the boom, they told us the fundamentals were strong. Today, in the bust, they are telling us the fundamentals are weak. Now, that’s enlightening.

The fundamentalists argue that, if we don’t cut now, our budgetary situation will spin out of control and we will end up in default. They are saying this while, at the same time, being faithful supporters of the euro. These are the articles of faith for the fundamentalists -balanced budgets and a strong currency.

But when you think about it, you shouldn’t be supporters of a currency union and agitators for budgetary austerity simultaneously, because at the core of your position is a misunderstanding of how and why the world works as it does.

In defence of their position, they will talk about concepts such as ‘‘market confidence’’ or ‘‘financial credibility’’. But these platitudes mean nothing. This market is finished. It is over. Bank of Ireland is trading at 12 cent (as this column told you it would right after the recapitalisation. In fact, our early February forecast of nationalisation by Easter still looks like a fair bet). We need to understand that nothing we do now in Ireland will turn the taps on.

There is no mythical pent-up flood of money waiting to rush into Ireland once we’ve shown that we can hit some budget target or other. Show me a country that has benefited from this argument in the past 12 months. They don’t exist. In fact, the country that has seen its government paper being sucked up in trillions is the US, which is running the most expansionary budget deficit in decades.

The core of the problem is that the fundamentalists are using the economic logic of a free-floating currency to argue the budgetary policy in a country with no currency risk at all. No mistake could be more straightforward and no misunderstanding more wrong.

Sure, if we had our own currency we would have to keep our budget deficit in check, otherwise there would be a run on our currency. If we chose to defend a certain exchange rate, we’d need to raise interest rates dramatically. This monetary contraction would reinforce the economic crisis, tax revenue would fall and rates would have to go higher.

But none of this will happen in the euro. The euro allows us to analyse without concerning ourselves with the trivialities of the foreign exchange markets. The euro allows us to think clearly (which is one of its modest advantages for us).

We now need to be radical. We need to cut income taxes, raise property taxes, cut all tax incentives to property and use the money saved to give grants to companies that are employing people. We need to accelerate the new euro-wide bond initiative and use it to borrow heavily.

We should stop getting het up about the budget numbers, because whatever we do now, I can guarantee our forecasts will be wrong.

We also need to introduce debt deferral for hundreds of thousands of mortgage owners who are in negative equity, and use this debt relief as traditional monetary policy. Debt deferral gives hope and – most importantly -i t injects liquidity directly into people’s pockets. The recapitalisation needs to be revisited and a huge distressed bank bond of maybe €40 billion needs to be raised to cover the losses in the banking system.

Every infrastructural investment that would make us more productive in the future should be fast-tracked, not abandoned. We should also raise the money internally, as well as externally. Ireland has close to €300 billion in deposits. We have loads of money. Let’s just raise a national recovery bond and invite our pension funds to participate. We could make it much more tax efficient to invest in the recovery bond than foreign equity.

There are always ways and means. This is all so simple. If our debt/GDP ratio rises to 100 per cent, so what? Most of it will be our cash anyway, and what is the sanction under a monetary union? In the euro, this is only a figure and, as the economy recovers -which it will – this figure will plummet. Implicit in this approach is a cull of many of the senior civil servants who are now acting as inhibitors, rather than facilitators of, change.

Such radicalism is the only way that jobs will be saved and our country can be stabilised. If we follow the current policy of the fundamentalists, we will end up where fundamentalism of every sort always leads -up a blind ally where the world is seen, not as it is, but as they would like it to be.

The world has changed, maybe irrevocably, and we have to change with it. This crisis presents us with the greatest opportunity in decades to shake up this country. Let’s hope we seize it.


  1. Taliban comes to mind here and tuesday is Osama’s birthday and that day is a Full Moon.Expect a surprise.

  2. Colin_in_exile

    David,

    I’m afraid Irish people have as much appetite for forking out on property tax on their houses as Osama bin Laden has for eating an Irish breakfast roll.

    It’ll take a long long time for the mentality to change.

    • McGoo

      Have to agree. “Property tax” is a posh ame for “rates”, and I believe that re-introducing rates is one of the few things that would actually get the ordinary Irish prople rioting in the streets.

      • Colin_in_exile

        I’m afraid I think you got the wrong end of the stick McGoo.

        I agree with David that property tax should be introduced, especially now since interest rates are so low, and will in fact go lower soon, meaning monthly mortgage repayments are down significantly.

        The problem here is the Irish mentality. Once someone becomes a homeowner, they somehow think that property tax is completely unfair. I believe that if you own a house, you are quaisi-priviledged, and therefore should pay tax on your priviledged asset. Now, if Interest rates reach 5%, then I think property tax should be lowered accordingly.

        I also believe we should have an inheritance tax. Passing down wealth from generation to generation conflicts with the idea of a meritocracy.

        We must reward work and keep income tax low for those low and middle incomes. I also believe VAT should be reduced.

        • paddythepig

          Colin,

          Passing down wealth through the generations expresses the valid right of a parent to look after his/her children. Time will tell whether the successive generations will have the smarts to preverse this wealth for their kids, or lose part or all of this wealth. That is highly meritocratic in my eyes.

          I didn’t undergo any attitude change when I bought my house. I thought then that there are more frivolous things in life that could be taxed, other than the roof over your head. Still do.

          And I think property as an investment should have been taxed long ago. This disincentive could have prevented the excesses of the recent property boom, and would have made the ownership of a home more affordable and accessible to those genuinely in need of it.

          Paddy.

          • Colin_in_exile

            Paddy,

            I agree that property as an investment should have been taxed long ago.

            Maybe you didn’t undergo an attitude change, but I know many people who did, once they became lord of their manor.

            Oxford Dictionary : meritocracy – An elite selected on the basis of ability rather than social background.

            I believe passing wealth down regardless of merit, purely based on genetic similiarity runs contrary to a meritocracy. In my opinion, Inheritance tax is one of the tools which we could help forge a meritocracy with.

          • paddythepig

            Colin,

            Did you know anyone who were suddenly a bit full of themselves if they bought a fancy new car, or splashed on fancy holidays, or designer clothes?

            Some people get off on having more stuff than others ; if it’s not property, it’s something else ; that’s just the way they are. Being envious of such attitudes doesn’t get a person anywhere ; I hope you’re not falling into that trap.

            BTW, we already have an inheritance tax in Ireland. I would not classify ordinary families trying to pass on the fruits of their hard labour to their loved ones as constituting ‘an elite’.

            I thought your ‘quasi-privileged’ comment was interesting. You forget that in the majority of cases, home ownership is funded by debt. There’s a new ingredient in the mix now – negative equity. And another – real pay cuts, and very high unemployment. Quasi-privileged – you sure about that?

            Also, by your own definition, you could sign on the dotted line to purchase a house, using debt, and be quasi-privileged in the morning.

            Paddy.

        • McGoo

          Colin,

          >Once someone becomes a homeowner, they somehow think that property tax is completely unfair

          A property tax will affect everyone who has a roof over their head. After all, landlords will ultimately have to pass the tax on in the form of higher rents, or else sell up and reduce the supply of rental accomodation. Either way, rents go up.

          >if Interest rates reach 5%, then I think property tax should be lowered accordingly.

          I’ll assume that was intended as a joke. New taxes, once introduced, only change in one direction – up.

          >I also believe we should have an inheritance tax

          We do.

          >I also believe VAT should be reduced.

          I agree, because it is such a regressive tax – it takes no account of the payers ability to pay. And guess what – neither does property tax. What about all the retired people, living in big houses that they needed when they were raising their family, who are now living on a small pension. Many of them would be simply unable to pay a property tax.

          >I agree that property as an investment should have been taxed long ago.

          Yep, something we can fully agree on. The tax breaks for property investors certainly contributed to the crazy boom, although it wasn’t the primary cause.

          • Colin_in_exile

            McGoo & Paddy,

            Either way, rents go up? I doubt it, pressure is on our landlord friends, they don’t want to lose their tenants. The boots on the other foot now.

            I should have said if Interest rates reach 5%, the property tax could come down 20%, 6% – 40%, 7% – 60 %, 8% – 80%. No joke.

            Forgive me for my ignorance regarding Inheritance tax, you see, I’ve never heard of anyone having to pay it. I did my research, and guess what?

            http://www.revenue.ie/en/tax/cat/leaflets/cat2.html

            So, revenue don’t touch the first €521,208.00! I mean, that must be 15 times the average industrial wage! You have to ask, qui bono? Well, the answer is the wealthy benefit. Why does there have to be such a large Inheritance tax free allowance? Surely it should be based on Income tax model?

            Finally, I’ve never been envious of homeowners. In the words of B.A. Baracus, I pity the fool.

  3. Hi David,
    Sounds right on the ‘money’ again, I mean the ‘money we used to have’. But how do we get the government to make these ideas a reality?

  4. gquinn

    One of the biggest mistake the US made in 1929 was that they raised interest rates and after awhile the Dow lost 89% of its value. Now before the US raised interest rates it was obvious that a depression was coming because the commodity markets lost more than 60% of there value.

    Fast forward to today. Its obvious that the World is going into a depression because all commodities with the exception of Gold has lost over 60% of its value. Industrial metals like copper, aluminium etc are still dropping this is signalling that on a World scale there is no demand. The Baltic dry goods index which tracks global shipping costs is down 90% this means that World trade has contracted hugely.

    At present Ireland is not looking to be in a good position but economist should look at the financial markets as they are forward looking, The markets tell you the following:

    Comodity markets: Tells you which way inflation/deflation is going to be in the future

    Bonds Markets: Tells you which way a countries interest rates are going to be in the future. (Some countries adapty an inflation rate approach but other contries dont)

    Equity Markets: Tells you which way the economy of the country will be in the future.

    Foreign Exchange: Which way the World views your country, economy and social policies.

    Ps: This is why I believe in the free markets as it ensures freedom and it also punishes the stupid and rewards the intelligent.

    • gquinn

      At present this is what the markets are telling us:

      Baltic Dry goods Index: Global trade has slowed down by a huge amount and will continue to be low for the next year at least.

      Commodity Markets: It is telling us to expect deflation

      Bonds Market:
      Irish Bonds: These have fallen of the roof and is expecting Ireland to default.

      German Bonds: The yield curve is upwards and so means to expect interest rates to start rising. The yield curve is currently saying that in 3 months time interest rates will fall to 0.75 percent and then wihin one year the interest rate will have risen to 1% and will keep going up as indicated on the yield curve.
      http://www.bloomberg.com/markets/rates/germany.html

      US Bonds: The yield curve is upwards and so means rising interest rates. The yield curve is telling us that interest rates will rise to 1% within 2 years.
      http://www.bloomberg.com/markets/rates/index.html

      Equity Markets:
      ISEQ: Has gone from 10,000 to 2,000. Expect devastation.

      DJIA: Has gone from 14,000 to 6600. The Dow is going to go to 5,970 and if it goes throught 5,900 it will definitly go to 3,000.

      Conclusion:
      There is going to be a depression. Interest rates are going to be kept low for about 2 years (US) and one year (ECB). The equity markets are pricing in more economic fallout and given the amount of time the bonds market are telling us interest rates will rise. The US will not be expecting economic activity to pick up until 2 years time at least.

      Lets see if the markets are right or wrong but the current picture does not look good. This is not what I’m saying but what the international markets are saying.

      • jim

        gquinn,I dont want to appear rude or crude but the so called International Markets are a croc of shit, I’d have more faith in Mystic Meg predicting future anything.Some of these clowns will talk about 1o yr,20yr blah blah blah. When the shit hits the fan its “no one could forsee” “unexpected results”.It’s all about their own commissions after the mugs have lost out.Just remember your own guess is as good as their’s unless you have inside information,or see balance sheets before there announced etc.Cowboy’s Ted,Cowboy’s.

        • Tim

          jim, again, good man, jim!

          The boys in the markets are only gamblers annonymous. Ther is even a section on Paddy Power’s website dedicated to betting on how much the DOW will rise or fall in any given 40 minute period.

          The markets are erratic; the people running them/working in them are erratic. If we want “stability”, let’s not look to THEM.

          • gquinn

            Government actually do need to look at the markets as they act as a boiling point. Any problems that are going to happen will first happen in the markets because of the forward looking nature of the markets.

            It is then up to the government to find a solution for the markets. The reason why the ISEQ was punished so much was because investors do not have any confidence in the Irish Government and they knew they would not have any solutions for the crisis and they were absolutly correct and the Irish Government still dont have a clue at what they are going to do.

            If Irish people had of being taken heed of the ISEQ and as soon as it lost 20% of its value then people should have been asking what the hell is going on at government level.

        • gquinn

          Dont get mixed up with brokers and bankers as they do not run the markets. The markets are run by ordinary people buying and selling there security. Due to human emotions of greed, hope and fear all markets exhbit a price pattern and from this price pattern you can call the direction quite accuratly as I have done so over the last year.

          I will not say that investing is not gambling as I would be lying. Everything in life is not stable and keeps fluctuating for examble: Interest rates change from month to month, Your currency changes every single second etc.

          A persons normal day of life is not stable because of the above factors keep changing every single day.

          • Tim

            gquinn, Thanks for the “edu”.

          • paddythepig

            Excellent postings gquinn.

            David McWilliams – he of ‘The market is over’ should read your post, and take heed. The market is very much alive and well ; the only problem is that the failures in our economy are being sustained on life support from the taxpayer, in a vain attempt to counteract the market’s verdict.

            One thing this crisis has proven is that, on aggregrate, Irish authorities do not have the judgement or experience to allocate funds productively. That applies to the banks, the Government, and regrettably many of Ireland’s individuals as well. Therefore what faith could an investor – either internal or external – have that their investment will be productively used. It is this oversight that makes David’s article misguided.

            To not raise taxes though, is a noble and attainable goal. Philip in an excellent post on the previous blog call this perfectly. Unfortunately, it looks like the Government is unable to quell it’s own spending and largesse, and is not paying heed. Once again, out of touch, clueless, and comprised of the wrong sort of individual.

            Can I commend the few posters who are rightly advocating the funding of entrepreneurial activities – a la Silicone Valley. This is the one ray of light I see. This seed needs to be funded, FINANCED, encouraged and nurtured. But until there is a complete reversal in the pecking order – a promotion of true entrepreneurship and innovation, and by necessity a relegation down the pecking order of traditional, safe ‘professions’ – this seed will not blossom. This is our best hope.

            Tim .. BTW .. in the late 70s, early 80s, the country did borrow to the hilt to sustain it’s day-to-day spending. Who created that crisis? Your lads. Fianna Fail. Fellas like you were handing out leaflets for the architects of emigration and failure. Ye still are. Time to walk the plank.

            Paddy.

          • Tim

            Paddy, not to antagonise or anything, but I think you will find that Garrett Fitsgeralds FG government did most of the borrowing that time. My recollection, (though I was only a young teenager at the time) is that FF took over and started cutting health and education. My teachers tried to stop them by going on strike in 1984, but they were ignored; I think the nurses did the same.

            My point is that temporary borrowing is better than crippling education and health by cuts from which they never recover and a generation gets lost, both at the youth end and the old age end – killing the wisdom of age and the promise of youth in one very foul swoop.

  5. goinghome

    The possibilities for acting that can be determined under the traditional range of economic theory amounts to no more than a hill of beans. (Fee Fie Fo Fum!!) It is refreshing to hear from such an expert that the forecasts will definitely be wrong! This with an effort to persuade that the emphasis should instead be on doing the right thing. Because of unusual conscious challenges in the world including climate change effects, growing inequality, unpredicted wild market oscillations, possessing excellent knowledge of the intricacies of standard economic responses may actually pose as much of a blinding miasma as do the sitting fundamentalists. The thing is to identify those proposals amongst all the disciplines, including but beyond the conventional models, that fit the problems, and amalgamate them into something dynamic and grounded, not too muddy but not too loftily ivory-tower-bound either. A multi-faceted approach that works for people, with less of the obsessive-compulsive headlighting on money. One candidate for consideration is Brian Milani’s 2001 book –

    “Designing the Green Economy looks at the ecological economy as a stage of human development, as real postindustrialism. The author argues that new productive forces based in human cultural development have redefined the nature of wealth–from quantitative to qualitative. Real development can now only be defined in terms of individual, community and ecological regeneration–and yet these growing potentials have been increasing suppressed or distorted by industrial institutions over the last century. Archaic definitions of wealth–as money and material–threaten to destroy the planet and what remains of human community, creating crisis, inequality and environmental destruction.

    The author argues that real social change today involves not just opposing exploitation and injustice, but implementing social and ecological alternatives which directly target human development and ecological regeneration. Postindustrial social movement strategy involves a fundamental shift in focus from opposition to alternatives. These alternatives must inextricably involve individual/spiritual change, community development, and ecological renewal.

    Designing the Green Economy attacks the dominant pop interpretations of postindustrialism–which reify computer hardware and the information revolution–as propaganda which justifies current trends of superindustrial globalization. By contrast, real potentials for qualitative development, for “doing more with less”, and dematerialization of economic life, depend on an ecological restructuring which would make information, like money and matter, simply a means to the end of serving human and planetary need. The author argues that mainstream forms of economic development serve to support corporate profit through the reproduction of scarcity. Since the Great Depression, waste has played the primary role of artificially generating scarcity. The creation of waste has also acted to suppress growing human and ecological potentials, and to reinforce relationships of domination. But this waste has also become a major source of crisis and stagnation for the System.”
    from http://www.greeneconomics.net/Book3.htm

    The core recommendations of the book are set out here – http://www.greens.org/s-r/37/37-09.html.

  6. Alleluia – David’s Strong Initiative for CHANGE has arrived – pick up yere pikes and charge to the top of Vinegar Hill and sing Boolevogue

  7. thepartysover

    Borrow and spend, borrow and spend. Yep, let’s do that.

    It worked great in the 80s, didn’t it??
    Emmm…

    Ah yes but we’re in the Euro now. Those lovely Germans will help us out, won’t they?? They’ll help us and let us keep their 12.5% corporation tax rate too coz we’re lovable paddies who know how to have the craic and we have leprechauns.

    But we said we wanted to leave the euro a couple of weeks ago, didn’t we??
    Humm…

    Keep floggin those papers boyz

    • Tim

      thepartysover, We did not “borrow and spend” in the 80s; we “cut, taxed and levied” – just as we are doing now. As a result:

      We now have: fewer hospital beds than we had in the 1970s;

      A higher pupil-teacher ratio than in 1972;

      More pre-fabs rat-infested and damp than in the 70s.

      Even during the “boom”, we did not recover what we lost in the slash and burn era of “cuts, taxes and levies” of the 80′s.

      37 years later, we are WORSE off than in 1972!

      “Radical” is what we need – not “more-of-the-same”.

      • Dilly

        Also, the top heavy management in Education and Health services, multiple pointless managers delegating work down the chain, and serving absolutely no purpose, using up money & resources that should been invested in the children and health instead.

        • G

          absolutely agree with this, have seen it first hand, spot on, low paid do the work, higher paid see it as their ‘mission’ to delegate.

          J’ai délégué, donc, Je suis!

          • G

            Courtesy of Tony Benn:

            There was a boat race between a Japanese crew and a crew from the National Health Service (UK).

            Both sides practised long and hard and the Japanese one won by a mile. So the NHS faced with this problem setup a working party which reported that the Japanese had eight people rowing and one steering and the NHS had eight people steering and one rowing.

            So they brought in management consultants and the management consultants confirmed the diagnosis, suggested the NHS team be completely restructured to make it more efficient, gain critical body mass, cohesion, streamlining and all-round better performance.

            As part of the restructuring, a number of appointments were made including three Assistant Steering Managers, three Deputy Steering Managers, a Director of Steering Services and the rower was given an incentive to row harder.

            They had another race, this time the NHS team lost by two miles, so management laid off the rower for poor performance, sold the boat for a higher than average pay award for the director of steering services and determined they had too many management consultants and not enough managers.”

          • G. You made me smile. Thank you.

          • Deco

            The Irish HSE are such a joke – that making jokes about them is just not possible…the HSE is the joke.
            Harney should resign. Drumm should resign. Their pals who got ‘titles’ for all the wrong reasons should resign. Immediately.

  8. Malcolm McClure

    David: I think your suggestions might work, if we could be sure of a continuing supply of crisp folding notes. I may be mistaken, but I am not aware of a Mint located in Ireland. If we don’t play ball with the ECB they can just slow down cash delivery. Existing cash in Ireland will trickle out into UK and Europe and there will be a cash crisis at the ATMs. No matter how much electronic money is borrowed, it won’t get around the cash shortage. Eventually we will be obliged to trim our coat to fit the cloth.

  9. Johnny Dunne

    You’re right the ‘worst thing’ we could do if we want to create and maintain employment now is to increase taxes on employing people and generating economic activity. Unfortunately, we can’t be competitive internationally with a strong euro operating from Ireland compared to the main trading currencies for indigenous exports — dollar and sterling

    In 2007, Enterprise Ireland clients had total export sales of €13.2 billion (c.10% of total exports ‘booked’ in Ireland). Enterprise Ireland estimates that export gains of up to €1 billion were achieved by its client companies in 2008 despite the global economic climate ? Assume indigenous companies exports grows to €15 billion this year which is unlikely considering the majority is exported outside the euro zone where our products and services are uncompetitive from a pricing point of view. With GDP (€175 billion) expected to fall by 6% this year, it could take less than a year to wipe out the benefit to national income of ALL indigineous exports – this is very serious !

    There are many good proposals being made to support viable businesses, we need immediate implementation plans and actions to support the maintenance and creation of jobs in companies based in Ireland. If not, the numbers could deteriote beyond repair.

    I agree the only reason the Government should be worrying about ‘the budget deficit’ 9which could be €25 billion) or more correctly keeping the deficit below double digit % of GDP is if they believe we will not be able to finance the deficit very soon ?

    If this is the case, are they considering why the ‘uncompetitive’ euro driving our debt level from €35 billion for over 20 years until last year and heading for €100 billion by next year !! It worries me when I read today we are borrowing nearly €2 billion this year to fund the NPRF which is being invested into the banks – do they understand ?

    We have ‘NO’ option/lever left except to reduce tax on employment and for businesses to promote Ireland as the most tax effective country for direct taxes and a ‘save haven’ for businesses to relocate to during the ‘recession’. If we don’t implement ‘radical’ fiscal policies to turn the tide and increase actviity therefore total tax take then we surely will be into a ‘depression’ without ‘safety nets’.

    Question is does any of our politicians have the ‘liathroidi’ to propose and more importantly implement the ‘targeted’ tax reductions ?

    • Tim

      Johnny Dunne, “If we don’t implement ‘radical’ fiscal policies”…….

      I agree. What about the idea of taking back the 7billion we gave to the banks and using it to recapitalise companies/homeowners in default with government cheques (made payable to the banks), thus saving the companies/jobs/home/people/economy?

      • Johnny Dunne

        Tim,

        The banks should be providing funds for companies and supporting homeowners where they lent ‘negligently’ money on unsustainable earning multiples at the height of a property bubble.

        One of the problems in using part or all of the 7 billion to pay of loans due to the bank, this would still leave the ‘massive’ hole in the banks balance sheet when the other property loans are written off. It’s a zero sum game, if you write off the loans someone has to match the liabilities with an injection of capital – the Government have volunteered for us all….

        The problem goes back to the Brian’s guaranteeing ‘ALL’ the liabilities in September without a clue of the potential impact and long term exposure. Lenihan was ‘fed’ with figures such as €80 billion in capital cushion from the Dept of Finance, Central Bank. Same people still providing advise !

        • Tim

          Johnny Dunne, I am sorry, but I don’t understand that. MK1 said something similar to me and I did not understan that either, but was too tired to reply, at the time.

          Why is it “write-off the loans and the liabilities are still on the balance sheet”, if we use the re-cap monies, INSTEAD, to “pay-off” the loans?

          I am afraid that my idea is too simple and “economics” is complicating it, and I am not being understood; perhapd I am not articulating it correctly for assimilation by the mathematical mind.

          1) Money is required (for whatever, nefarious, reason) by a bank.

          2) Government elects to give tax-payers’ money (for whatever nefarious reason) to that bank.

          3) Instead of just “Handing the money”, directly, to the bank, the government looks around at its problems, like the companies/employers who have debts at that bank and are in danger of defaulting and letting people go onto the dole (which the Govt. has to pay dole to and lose the tax they were paying while employed) and the government says: “Hey, Bank, you got problems, man! You got people and companies with emplyees that owe you money they can’t pay, cause we all scared the population into not spending any money …….

          What if the Govt./taxpayer were to pay you, Mr Bank, the money that company owes to you? “Great”, says the Bank; Thanks.

          But, then the bank goes and still expects the company to pay its money, as well. Company cannot pay, goes broke, employees on dole paid by Govt. and ex-employees default on mortgages to the banks. Ooops!

          Instead, Govt. gives the cheques to the company/defaulter; they hand that cheque to the bank.

          The debt is not “written off”; “written down”; or any other kind of “writing”.

          The debt is PAID.

          The “would-be” defaulter, is NOT a defaulter; Their debt is paid by the government-issued cheque.

          And the bank is “re-capitalised” by receiving the government money – just THROUGH” the defaulter.

          The taxpayer is giving the banks the SAME amount of money, anyway.

          But, THIS way, the taxpayer gets a hell-of-alot more “bang” for the buck.

  10. zohan

    David,
    You mention €300 billion in deposits but my question is…
    Could we actually get our hands on this money or has it been spent by the banks? Could the government guarantee these deposits in the event of a meltdown in the banking system …….or am I missing something. Why do I feel broke !

    • Tim

      zohan (great “handle”!), have you read wills’ contributions to the previous article? I suggest you do, if you can.

  11. werty

    its a great article ..first one to make me laugh, only a pity that such forward thinking is cramped by a self serving monolith that continues to refuse sound and {in these troubled times} free advice !

  12. lff12

    David, I totally agree with you but I am wondering why you don’t point out the simple reason why the government and its advisors have not touched property and have put insane policies leading to a fundamentally sick property market – quite simply, they themselves have a huge stake in it personally and don’t want to do anything that will hit them personally. Its the same reason why the PRTB registration is practically a voluntary system and various departments involved in the rented sector are coy about handing over information on potentially tax-dodger landlords to Revenue Commissioners. They are protecting not just cronies, but also themselves. (Hence also the reason why so many large businessmen and politicians register their property interests in wives and family members who cannot be touched).

    This stakeholding is crippling the government from being able to do anything about the chronically ill property economy. Incidentally, look at the makeup of the government and see how many of them themselves come from within the public sector. I think the suggestion that stronger anti corruption measures be taken would be useful, but that also needs to happen in the context of cultural change. There is no point in exposing the naughty politicians if their local gombeen electorate will return them to the Dail as the knuckle-draggers did with B Cooper Flynn etc.

  13. The best suggestion I heard recently was from a young entrepreneur Patrick Collison who suggested that we spend 50m euro enticing 50 start-up companies and give them 1m each as an incentive to move their operations to Ireland to form a cluster of high potential start-ups.

    As you build a cluster of technology you also encourage the investment to increase the wealth created on the back of such operations. VC money drives growth and we need more than the existing minnow VC’s that operate in Ireland.

    HPSU’s create wealth and employment and our high skill tech expertise can further stimulate growth around them. Sometimes the simple solutions not that expensive.

    • Tim

      Gerard, that’s a great idea. Would you consider adding to the “5s” list, where we are gathering anyone’s top 5 ideas for solving the problem? Since you present this idea tonight, perhaps you have others? If you list five, I will place them with everyone else’s for analysis; if not, will you consent to allow me to list this one?

    • Malcolm McClure

      Great idea Gerard. Keep ‘em coming.

    • Johnny Dunne

      Gerard, i was at the ‘pivate equity conference’ during the week when Patrick Collison (a 21 year year old) on his second business old first one for $ 5 million ‘presented’ in 20 minutes more ‘simple’ but effective suggestions to develop the ‘Irish’ economy’ than any politician or indeed many economists have highlighted recently.

      The one thing that occurred to me as John Bowman, the chair applauded his ‘ideas’ and suggested he go on the Late late Show to get a ‘voice’ for some of these initiatives – we are listening to the wrong people in the media, same ‘auld’ faces with nothing new !

      In summary, he was advoscating the opportunity for Ireland to be the 2nd ‘silicon valley’ in the worls. It would only take say 1,000 companies to race into 2nd place behind California. If €100 million was set aside to give out to ‘any’ ideas from inetrenational and local entrepeneurs, he felt you would have a flood of the best from all around the world coming to Ireland (or a region within). By way of proof, Silicon valley is 50 years old but none of the ‘great’ companies which are now household names founders were from there.

      Tim, imagine what could be done with €7 billion – we could overtake Silicon Valley overnight and create a slef sustaining ‘cluster of companies’ ! We have the schemse (BES etc), all that is missing is the vision and ambition….

      • Tim

        Johnny Dunne, agreed!

        We NEED that 7billion back – it’s USELESS where it is.

        Can you remember 5 of Collison’s ideas? If so, I will credit you (and him) with them and paste them on the “crisis-to-opportunity” article, where I have gathered the others, awaiting Ronan’s new “ideas-page”.

        Will you, please, help with this? There is a “synergy” growing on this site, I feel, that may help us all, if we continue to put in the effort.

        • justinf

          guess how much extra VC funding something as BIG as twitter.com got recently?

          35 million.

          and thats a huge site. some of the other smaller startups get by on rounds of 1 million.

          it doesnt cost much to kick start a silicon cluster.

        • Deco

          Well said. Giving 7 billion to two bad banks so that they can continue on the deluded path is a load of nonsense.

          The government would be better buying back the Industrial Credit Corporation for 100 Million – and capitalizing it directly as a state enterprise bank.

          Does anybody really think 7 billion will be enough in any case ??

      • gquinn

        Lets use the National Pension fund and start doing some real investment with that as we have about 12 billion euros in that and is currently being used to buy assets (stocks) that is decreasing in value.

        • Tim

          gquinn, I am sorry – of course you are “doing it as well”, from London. My only reason for reacting differently to you, when you first arrived, is that you were very angry in your first posts; that made me a little scared of you at first, but I knew you would find calm here.

          Now, you can help new people here. Welcome them …….. they are searching. MK1 and Lorcan can teach them.

          • gquinn

            I was just angry at the Irish Government and not at anyone in this forum. I apolagise if I cause any upset with my first posts in the forum as that was not my intention.

        • Tim

          gquinn, accepted and understood – we all have every right to be angry about this mess, while at the same time, we must try to generate ideas on ACTION to help us out of it. Let’s keep at it.

    • The thing about this great idea is it’s notionally what the government are claiming they’re doing anyway. They’re investing in HPSU’s and in some cases chucking in more than 1million. The problem is the link with foreign VC’s. When you actually get up and running here, finance is still an issue. Unless you wanted to buy property which some tech companies did.. bizarre!
      I know I’m banging on about it but we do need some kind of dedicated innovation fund that’s commercially focussed and allied with US/EU VC funds.

    • justinf

      great idea. and we could tie it into David’s tap-into-the-irish-abroad idea as well.

      for the record , i’m a web developer with over 10 years experience, having emigrated to the UK in the 1990s. as such i am “lost” to the Irish economy, despite having being educated in Ireland.

      And there are LOTS more like me in the tech industry worldwide.

      I am part of that untapped resource that David bangs on about. And he is dead right.

      • Tim

        justinf, agreed; However, you are “tapped” now, because you are helping. With that post, you are contributing to the bolstering of ideas that may save our country.

        Please keep doing it?

        I am firmly convinced that, if we keep developing ideas, we will find a new way of making things better. Come up with a new idea, or support someone else’s …. does not matter – encourage good thought.

        • justinf

          thanks. i will. i came across david mcwilliams when he was speaking about tapping into the diaspora on today fm – via my internet radio.

          my ears pricked up at that. i thought “wow – this guy GETS IT..”

          hence i have ended up here.

          i kind of feel its my patriotic duty to help out. unlike previous times, because of the internet i can listen to newstalk , today fm and RTE in my kitchen. even though i’m in the uk.

          i do wonder how many others in the diaspora are doing the same, not to mention all those irish-americans.

          for the first time in history being away from ireland doesnt mean that you are cut off from it. we in the diaspora can certainly help out. we’re here – the Irish gov needs to engage with us.

          • gquinn

            I’m doing it as well and I’m in London as well LOL

          • Tim

            justinf, I am delighted to make your aquaintance! I am a returned emigrant, in that my parents brought us home from NY.

            You can help (you already have, by posting an idea).

            There are 70 million people claiming to be Irish, world-wide. That is amazing; but, also, inspiring to me. It means that 70 million people understand.

            Let’s see how many we can ask for help – I bet “All”, if we can tap them.

            None of them, really wanted to leave home – they were forced – by exactly the same forces that are threatening to force today’s children to leave.

            They WILL help, if they can; I am sure of it.

          • justinf: Thank you very much. When I read you, I said to myself “Wow, this guy gets it.”

            May I suggest UK has a wonderful cheese sector – amazing variety – a fine tradition of using milk in deserts, and some good ice cream. And the countryside is much better kept and accessible there.

            Tim: I really wanted to leave home – so I left Limerick (in 1968) and went to Dublin (in 1975). I still wanted to leave home – I Ieft Dublin and found relief in London. I found home there, and eventually wanted to leave home again – so I left UK (2005) and moved to Cork where I’m making a home.

            I’ve had a great journey, and found you on the road.

          • justinf

            wow. thanks for all your kind comments. this is so interesting. this needs to be bigger. David is onto something.

    • Tim

      Gerard, just post your top 5 recommendations for recovery here and I will transfer them to the list on the other article.

      Please try – it could be THE ONE?

    • Gerard,
      Thank you for bringing this idea into the open here. I suggest we could reduce the cost of doing it by giving exemption from tax on profits for say 5 years and a slow tapering in of tax after that. Limited number of businesses to create demand chasing limited supply of funding.

      We could have such fun setting this up.

      I wonder if there’s any way we could set this up without it being subject to the dead hand of this government? A trust fund drawn from the Diaspora with sponsors entitled to be on some sort of interesting board?

      Massive use of most advanced social media to link every university in the world with this exciting social experiment.

      Children from other countries coming to Ireland, mixing with Irish children, on placements with such companies.

      Loads of room for volunteers to be mentors, coaches, supporters, fans, spectators. Deliberately drawing in every Irish sports person around the world – Padraig Harrington too – to associate with it.

      By the way, is this another good idea, or is it more than that? Is anyone actively pursuing this?

      How do I get in touch with that experienced entrpreneur who thought up the idea? Perhaps we could set up a ‘Dragons’ Den’ using a wide variety of support as the currency with which entrepreneurs could be given the help and challenge they need. I find it boring to be limited to investing money.

      Are there many people out here interesting in latching on to ideas and making them happen, without depending on others to do it for us?

  14. Tim

    David, thank you!

    Finally, a plan I like!

    Folks, in tandem (though I have reservations about HOW the property tax would be applied – should not be on family home, for instance), what do you think of this, from Taft?:

    No better place than with Sean O’Riain’s piece on TASC’s progressive-economy blog. His message is simple, his analysis irresistible:

    ‘The crux of the matter is that this gap is too huge to close with cuts and tax increases, even though those will play a part. We have scope for borrowing, given our low debt ratio but this will give a few years ‘breathing space’ at best.

    What can close the gap is growth.’

    ICTU would be well advised to hire loudspeakers and drive down every street, avenue, road and boreen of the nation, repeating this message until people say it aloud in their sleep: what can close the gap is growth.

    Let’s take this as a starting point but keep in mind Alec’s comment on a previous post on this blog:

    ‘ . . at what point will the deficit become too large?’

    For clearly the deficit has all the appearances of being out of control (and under current deflationary policies it will continue to be) and there is a point at which the deficit will so widen it will squeeze out resources for a stimulus programme. It may have reached that point already. Can we stimulate the economy while bringing the deficit under control? Let’s try.

    Financing the Stimulus

    We need to get our hands on some cash quick and start turning it into jobs, economic activity, consumption and investment in a reasonably short time without exacerbating our deficit. Well, the Central Bank has about €20 billion sloshing around in its vaults. €4 billion of that is committed to redeeming a bond issue in April leaving €16 billion. That’s a darn good start. We can supplement that by diverting the €1.5 billion contribution to the Pension Reserve Fund.

    So, without going any further than the Central Bank’s ATM machine, we already have over €17 billion to put into an economic stimulus and investment programme.

    A second source is the state’s Pension Fund. Without getting into the thorny debate over whether pre-funding is the most appropriate way to finance future pension liabilities, we can transform the Fund in a way that meets investment needs while ensuring it’s still around in 2050 when the Celtic Tiger cub start retiring. The Fund could finance a range of infrastructural and capital projects with a long-term commercial rate of return here in Ireland.

    And we’d better start doing this soon or we won’t have much of a Pension Fund left:

    *

    Pension funds are getting hammered on the equities market. Last year, pension funds saw over a third of their value wiped out. In the first two months this year, over seven percent was wiped out. The Pension Fund used to have assets of over €20 billion. Now it’s worth only €15 billion. Every day it gets less.
    *

    The Government is draining the Pension Fund to blow it on recapitalising our banks. Talk about throwing good money after bad, really bad.

    Redirecting Pension Fund investment will not only pay long-term real dividends back to the Fund; it will get people back to work as well.

    So we have two sources for an economic stimulus package — immediate, in the form of Central Bank cash; and medium-term, in redirecting billions from the Pension Reserve Fund. While I don’t intend to go into detail here I will suggest two areas as examples (there are, literally, hundreds more):

    *

    ICTU’s No Child Left Behind. ICTU proposes that every child under the age of four be guaranteed an early education / childcare place. This would be an invaluable investment in our future in addition to addressing the inequities in our current lack of support for early education. And the thousands of jobs it would create — this is win-win today and tomorrow
    *

    The Irish Exporters Association has called for a €1 billion intervention — a combination of state and EU-aid – to save 45,000 jobs in our critical export sector. The IEA, noting that other countries have introduced such measures, stated:

    ‘Here in Ireland we have not responded to the deepening economic crisis with any enterprise/export stimulus measures. As a consequence we are now falling further back in the international competitiveness race, while the Government dithers on the issue. . . . An Enterprise Sustainability Fund of approximately €1 billion, rolled out in line with the EU’s recently released State Aid scheme of up to €500,000 per company between now and the end of 2010, is what is now needed. This would have the impact of saving markets and approximately 40,000 jobs over the next two years.’

  15. Tim

    Of course, there is still that matter of the 7billion we gave to AIB and BoI, and for WHAT? For them to sit on it and continue to starve SMEs of liquidity, of wages, of credit for the raw materials they need to keep people in jobs?

    It’s not working, this way.

    We must convince government to take back that 7billion; issue government cheques to companies and homeowners who are defaulting, let THEM repay these cheques to the banks to pay-off their debts and they save their businesses and its jobs; the homeowners save their homes. No-one goes on the dole and people will feel safe at home. Stimulous will help consumer confidence again and spending will start, with concomitant VAT/excise duty returns, while keeping retail/service jobs.

    Why not do this?

    The recapitalisation is not working as it is.

    Could this be ANY worse? No.

    It COULD be a hell of alot better.

    “Cut, tax, levy” is a FAILED policy – we need something different.

  16. Ruairi

    Tax wealth and not incomes? David, you are truly insane :-)

  17. Thank you David McWilliams.

    Thank you for the clarity with which you’ve expressed a plan that we can consider. You gain all my attention because your suggestions seem grounded in straight talking about reprehensible behaviour.

    “No” to income tax increases – because every euro taken from this household’s income is one euro less for me to spend paying a carpenter to do useful work on my house. I’m an ordinary, fairly well off person. I have money to spend in shops, and income to spend with small businesses which are horrendously strapped for cash-flow.

    I’m looking for a place to invest. I intend to stay living in Ireland and I feel it’s in my material interest to support local entrepreneurs. I also consider it my social duty not to hoard, not to live in fear. I spend most of my time developing business ideas and giving them away to others, in the hope that they will grow more entrepreneurial and realise that this is a good time for people with vision.

    Any old fool (pardon the colloquial; it’s from a 58 year old) can trade when cash is swilling round with no where sensible to go. It’s times like this, when people are watching every penny, that give us great challenges to develop our knowledge, insight, skills, competence and heart.

    This personal statement is my small contribution to pulling myself on the line for my child’s future.

    I’ve just read about 200 comment without leaving the seat. Crazy, not a good time now to express my thoughts. But let me thank you all for putting increasing shape on your contributions. For me, this is more than a talking shop; it is a prelude and stimulus, to innovative collaborations.

    My new idea:

    [If anyone wants to find out how I arrived at this one, may I invite you to google "omaniblog" and read a shot story I wrote about visiting the Crawford Art Gallery exhibition "The Hero with a Thousand Faces". I called it something like ' a toilet story from downtown Cork']

    There has been a lot of talk about Ireland’s need to move up the value chain, meaning to secure jobs for people with loads of computing, R&D, and other engineering skills.

    What about employment for those who can barely read, write, calculate and forecast? Those who’s social skills have never been developed in a coherent manner? Those whose enterprise skills were stifled in childhood? Those who couldn’t negotiate their way out of a paper bag? Who couldn’t organise a department to run anything, least of all a fast-moving activity?

    Of course I’m poking fun at our FF government. But I’d also like to draw attention to people who have only done the Leaving Cert. Those who stayed on at school past school-leaving age just to pass the time. Those who were very poorly taught by their parents, friends and teachers. Those who stayed away from school as much as possible.

    None of us can afford to ignore the possibility that there will be a lot of people in Ireland for whom there will not be jobs into which their skill set will fit. We need jobs which don’t require so-called advanced skills. Some of you might even think the civil service is full of such administrative jobs.

    There is a role for people to set up businesses designed to ‘up-skill’ people who have missed out on all the lovely ‘free’ education.

    FAS became a corrupt cesspool which wasted public money. A cadre of senior bureaucrats there stole taxpayers’ money and enriched themselves and their families – and certainly travelled well around the world, espousing the cause of Irish workers.

    FAS is not fit for purpose.

    The traditional educational system is not enough for this crisis. We need to attract entrepreneurs with integrity to the challenge of getting results fast. Going into places like Moyross with an agenda for personal and social development. Bringing hope of a future within which excluded people can hope to compete for scarce, valuable jobs – or set up their own business.

    The department of education, even without Batt O’Keefe, is not inspired and flexible enough to do what’s needed to avoid increasing lumpenproletarian impulses.
    [I'm tired: please don't hold me to that last phrase - I am, after all, someone who got educated through Marxism]

    I wish I had a life which permitted me to keep up with the never-rest nature of this inspiring blog. I’m forever catching up with you all. To help me, I’ve started noting the comments (with date & time) that teach me most in my “intimate journal”.

    To those of you who were good enough to say what you thought in response to my last direct appeal, thank you very much: you have helped keep my pecker up.

    Please say whether you agree with the thrust of this particular assertion that we need to remember basic education and excluded people.

    • Tim

      Paul, Agreed.

      Yet, I have found, that people who “drop-out” of education early, or spurn it in youth, though remain, develop “gifts” in other aspect of humanity. Academia is not a panacea. These people are often the greatest “helpers” in society and their “heart” and “street-wise” abilities are needed now, like never before (somewhat akin to your earlier appeal to the blue-collar criminals).

      Ideas are germinating here, Paul; You are helping. Keep the faith.

      • Tim, thanks.

        There’s no blue water between us on the talents of people who’ve escaped the education system. After all look at what education did for Mr Lenihan.

        By the way, the only thing that’s ever kept me from the ‘faith’ is severe depression. Otherwise I spend all my life looking to help people think things through to their advantage.

        True, flowers germinate. Next? Re-potting and watering

    • Ruairi

      Paul O’Mahony, you are of course 100% correct.

      This is a government who preferred to build an oversupply of shopping centres than support the rights of an autistic child to be educated.

      I had some office furniture to give away recently. I stated it was for a charity. I got 2 responses. One was from a ‘charity’ (legally one, mind you) which teaches corporate social responsibility to the likes of ANGLO, IL&P, etc etc. Need I go on? The other was a voluntary school for autistic children, set up by frustrated parents. You can guess which one gets the furniture. Not if the Army Rangers came on behalf of the CSR guys would they get it. They would all return in boxes. The lack of thinking on any level in this country is disheartening, confusing, saddening. All around, the cracks are showing where very few gatekeepers have been doing any work.

      begekel, if you are reading, lets lower the dole, lets lower everything. but lets kill the tax breaks first. Lets start seeing leveraged use of our tax money to create the best possible future from this mess. The government is caught inside the same set of economic rules, as David points out, that got us here.

      If it did get as bad as the Greek riots, you leaders in Dáil Eireann, who do you think in Europe would protect you or solve that probelem? We are your masters. Do we have to yank your chain hard to remind you or will you kill home rule with kindness?

      • Tim

        Ruairi,

        Wow! Keep sayin’ it, sunshine!

      • Ruari,

        I look forward to reading you. Your “we are collectively responsible” phrase is in my book because it challenges my thinking.

        Your “The lack of thinking on any level in this country is disheartening, confusing, saddening. All around, the cracks are showing where very few gatekeepers have been doing any work.” is powerful.

        I know plenty of thinkers here. I mix with some from whom I’m continually learning the limits of my own thinking. But I seek such people out.

        I know you are keen to point the finger in every direction, not simply blame the leaders. But is there any way I could persuade you that with good leadership a people can blossom and reveal hidden talents which were unrewarded during the reign of the likes of Haughey, Reynolds, Ahern and Cowen?

        • Ruairi

          Thank you Paul,

          that’s very generous of you.

          I do believe in leadership though, I do. We need a sign of greatness from a man / woman and then we can fan it (give them our power / endorsement). Unfortunately, no champion has stood up in the government scene. I believe Brian Cowen has what it takes personally to be a great leader. He has a good heart. But he needs to tap into his obtuseness, focus on the good of the people, past present and future, and obliterate anyone or anything that gets in his way.

          That’s not difficult to do. That’s what national self-interest is, more or less. There is nothing ‘wrong’ at the moment other than the wrong group of people’s needs are being catered to. Brian Cowen is a potential Sean lemass if he could only wake up to it. Start tomorrow and seize victory after victory. Why not before? Because there was no will for that from the people! let’s get real here! 70% of people liked the trickle-down McCreevonomics and lazily didn’t question the wisdom of it. Government liked how the banks credit expansion brought popularity (UK, USA, Ireland, Spain etc) so they were lazy too.

          A change of government is not required. The opposition is woeful, as befits a fat lazy labrador (my favourite) dog of a society.

          A sea change of attitudes is required, from you and I, right the way up to them. All they have to do is show a few sparks (equity in sharing pain and responsibility) and they ignite the will of the Irish people.

          Reality says we have a problem. Reality does not say we have to give up. If we do everything we can do at a personal (wasteful expenditures into non-productive assets and consumerism) and national level, then we will prevail.

          There is a battle of nations about to commence. I want a morality check for those in government, not inexperienced visionaries at the wheel. Do they want to be remembered like this? I would not.
          Forgive a man who expects your foot on his neck and he just may surprise you.

  18. Ruairi

    “We also need to introduce debt deferral for hundreds of thousands of mortgage owners who are in negative equity, and use this debt relief as traditional monetary policy. Debt deferral gives hope and – most importantly -i t injects liquidity directly into people’s pockets. The recapitalisation needs to be revisited and a huge distressed bank bond of maybe €40 billion needs to be raised to cover the losses in the banking system.”

    Money & Markets most recent assessment of the O’Bama administration’s attempts to soften the blows for homeowners is that they are wasting valuable funding on the wrong end of the problem. Instead of debt-deferral, they need to move rapidly; just cut to the chase and write down some of the principal on that house debt. If we all accept, in assessing banks, that their ‘assets’ (junk & quality) are now worth considerably less, then SURELY we can make that great leap of mind as a nation and decide that the houses owned by Joe Soap are also de facto worth less.

    That would give the light at the end of the tunnel that is being so deviously and vaguely waved in front of weary Irelanders hearing Ireland’s call.

    Then enforce property tax on those who have empty houses littering our scenic areas. Not single house owners obviously.

    There’s a constant mind control exercise being deployed on the Irish public where out of one corner of their mouth the government tells us that we’re in the calamity of calamities and out of the other corner they talk as if we have a 2 quarter slump on our hands! Is this war or phoney war? Get real FF & Green Party.

    • Tim’s pet idea – that we should simply wipe out the debt of some – wouldn’t that be better than debt deferral? After all we talk of cancelling the debt of countries that have run up huge debts.

      The best ideas are ideas that grab the imagination of people who then say why didn’t we think of this earlier.

      • Ruairi

        Yes, I think finding some way to say that, look we all know they were never worth that, so lets just reduce the principals owed. Debt cancellation. We’re on our way to 3rd world status possibly anyway if they don’t! Kill some debt, and let the economies breathe.
        The other solution, incoming and about as precise as a scud, is the debasement of all currencies to float away the debt.

  19. pera

    It is definetely an interesting article, and the basic theories are just as I remember from a social/macro-economic class I attended several years ago. So what David writes makes sense. but as all the now disgraced economists claimed during the boom. Ireland is a special case, thats why normal rules do not apply, we have a very specific demographics etc…

    Maybe they were right in one thing. Maybe Ireland is a special case or at least some sort of case.
    Ireland is planning to spend 55 billion this year and are forecasting 34 billion or so in revenue. To me that seems like a huge stimulus package. So Ireland is already stimulating their economy by 10-12% of their GDP. And considering that the GDP in Ireland is maybe a bit overstated a bit in the first place, the actual “stimulus” to the economy is considerable. Not sure if I know of any country that are spending that much more than they generate in income.

    But clearly this stimulus package is not working (well in principle Ireland has been running this stimulus package over several years, but it was funded by people borrowing money to pay their stamp duty, VAT and VRT) So clearly the stimulus package is not achieving its target, so maybe it should be targeted better. One way would be to see how much of the 55 billion spend is tied up in fixed operational costs, and see how that can be changed. So even before spending any extra money I would think it prudent to investigate what the current stimulus package is being used for. Putting more money into the economy now would similar throwing money at a problem in hope that it will fix itself. Enough money has been thrown into the economy already (if anyone knows ay countries in europe who are running similar deficits please let me know) Its time to find out what its being used for now, and see if it can be redirected

    So I am not disagreeing with David, but I just think that Ireland are already stimulating the economy with a lot of money, and that we are now at a stage were we need to analyze its effects and see if the “stimulus” package can be targeted better. But as David wrote this could be a good chance to shake things up.

    Here is something that I find very strange. You read in the paper these days that there are too many Oirechteas committees and that they costing too much money. TDs can get up to 20k extra a year by being in a committee, and this is used as example that the number need to be cut down etc.. To me the only relevant question is: Why do TDs get extra paid to be on a committee? Is that not part of their job in the first place, and do they not consider it an honor to serve as chairman of a committee. As elected officials should they not seek to represent their constituents in the best possible manner, and being on a committee would be doing just that, and should not be seen as a chore that they have to be compensated to do. Do they also get compensated for each time they say something in the Dail, or each time they participate in a vote?

    I think Ireland should really reevaluate the smart economy program. There is hardly a country in the world which has spent so much resources, and put so many bright minds and people into the construction sector. This amount of concentration of resources should have had a much larger synergi effects, in research and development and the green economy. Ireland should be in the forefront when it comes building technology, and when you consider Irelands energy dependency. You would think that they world would be looking to Ireland for insulation technology, building materials, renewable energy, smart houses, design etc… What happened?

    • Pera,
      Thanks. Thought provoking stuff. If I understand you right, I favour your empirical approach: analyse effects, target carefully. Problem is: the iron law of targetting = you are always wrong.

      As regard Oireachtas committees, I entirely agree with you. I was horrified recently to find out that politicians were paid extra for putting themselved in a better position to get reelected. They enhance their CV and get paid extra for not being lazy. What a trick has been played on us citizens.

      I’d love to see a referendum on whether politicians should be paid extra for doing the job they were elected to do.

      Thank too, for your view on what Ireland should be able to get for all the concentration on construction. I bet something happened but no one is going round collecting good practice and using it to build new enterprises.

      Tis a very conservative place which so often thinks it’s full of radical thinkers. I’ve never lived in a more conservative society. But is every conservative boat adrift on the might ocean, there are a few burning souls who could take over the ship.

  20. jim

    Right lets get this over with!!!! The Green Party are wrong,they have compromised the welfare of this State by propping up FF so long as they can follow a dream..Their long held ambition of controlling the Dept. of Enviornment is now redundant given that the bursting of the property bubble has left nothing for them to influence for the forseable future,and certainly until after the next election.Somebody needs to tell them that there will be nothing built here for years end of. None of their core policies will be funded and what’s left will be watered down by the spin doctors and kite fliers of FF.Their only role as I see it going forward will be to act as some sort of Policeman toa FF party that will be swamped by rumour and accusations as more and more revelations of wrongdoing come to light.They will be hung out to dry by their more wiley senior partner and suffer at the poles at the next election.Ryans dithering over energy will be found out as people realise how their being ripped off and how its badly affecting our compeditiveness .The carbon tax if implemented in the present climate will come back to haunt them at the next election.The sad thing is that these people are on the whole .well meaning.honest,concerned citizens of this state.My advice to them if any are reading this blog is to pull plug now on this regime,use the moral concience argument,re-align themselves with people who have more in common.The electorate wll not punish them for doing the right thing by the Country.The Green agenda is important and should not be undermined by being compromised by its association with this travesty of a Government.They could re-negotiate themselves back right away into Government and have a much better chance of having their policies implemented.Im a supporter of a more greener future but support for this regime is too high a price to pay.Sorry John ,well meaning speech but no sale here for now!!.

    • gadfly55

      Right on comrade, never a truer word spoken, but the power of office is irresistable, especially, when you know you will never see it again. They will hold on until Christmas, when they gain their entitlement to a pension. Watch and see.

    • Jim,
      Thank you very much. You may provoke a Green to come out here.

      On a trivial but important point, would you mind please using paragraphs.

      Already I find it hard to cope with the small typeface.

  21. Tim

    Pera, I like your “stimulous is the deficit” idea – I had not considered it in that way. Let me think about a suitable response.

    I agree with you on Dail Committees – gravy train has to end for these people.

    7billion has been wasted in recapitalisation of two banks that will not lend money and credit/overdrafts to companies that could be saved if they did. Take the money back and, if we MUST re-capitalise the banks, give the struggling companies/homeowners who are defaulting government cheques (made payable to the banks in question), so these companies and people can pay-off their debts to the banks and save jobs and homes, the banks get the re-capitalisation money anyway, but more people are helped along the way and more redundancies saved and more social welfare saved and mor tax continuing to be paid.

    Simple?

    • Ruairi

      Hi Tim, yes,. I think it could be that simple from the domestic banking side but our banks’s problem is that they have been caught with their trousers down on the interbank markets and that’s the only reason for the government guarantee. The government are in denial purely because they are protecting yesterday but alas, its gone.

      • Tim

        Ruairi, if so, then let’s STOP giving any more money to the bank “sink-hole”, get our 7billion back and put it all into stimulous and LEAVE the bankers with their trousers down. (You have seen that I have invited people to add to the “5s” – I hope you do not mind – I am crediting you for the idea; I am just the “grunt” trying to pool them together). Did you see that Ronan is working on a “special place” for them on this site? You deserve my gratitude, Sir, for the initial suggestion that will now, it seems, become a special “seed-pod” of ideas that may save us all.

        • Ruairi

          Ideas are a dime a dozen Tim : -) Its grunts that make the world go around. That’s what our bankers and Beowulfs forgot.

          • Tim

            Ruairi, Are we not “the grunts” on David’s site?

            So, let’s be the grunts and get the “5s” and analyse them and COME-UP with something that will work.

            It was your idea – don’t loose energy now; not just as it may be catching-on?

          • justinf

            i’m very happy to be a “grunt”.

            its grunts like me that actually built and programmed the internet that you folks all use now. VCs funded it – we grunts in IT built the darn thing.

            theres a lesson for Ireland in that. we built something of worth, despite the dotcom bubble. much like the railway bubble of the 19th century, at least there was an infrastructure left behind.

            ireland needs to think hard about that. we cant go back to the property boom – we need prosperity build on something more tangible.

          • Ruairi

            Hi Tim,

            no way they’re getting this grunt down !

      • gquinn

        Yes, I agree with everyone here.

        Basically the banks are leveraged they are leveraged by ten times to the deposits they actually have and they borrowed all this from the interbank market (Euribor) because of this high leveraging the banks actually need more money if they are not to fail.

        Dont get me wrong I completly agree with you as I was also against the banks receiving any money what so ever as these guys are meant to be the financial experts and they get caught with there trousers down and guess what, they were not wearing any underwear and one of them (Anglo Irish Bank) was a transexual.

        I think what should have been done would be the 7 billion euros that was to help the bank sector should have been used to create a new bank. Any Irish bank that fails. The new bank would move all the deposits from the failed bank and buy up only the good assets from the failed bank at a heavily redced price and let the rest fail. That way you are sending a message to the market that if the banks are reckless then they fail and at the same time protecting peoples savings and getting rid of the crap and keeping the good assets that were purchased cheaply using tax payer money.

        The problem is two fold. First of all the banks need money and secondly the real economy also need money eg Businesses and people. The government should have done two stimulus packages, the 7 billion euro one for the banks and another seperate 7 billion euros for the real economy.

        • Tim

          gquinn, why not use the SAME 7billion to do both?

          • gquinn

            because 7 billion Euros is not enough. We need more money remember all them 100% and 120% mortgages that were given out. Its not just the banks that were leveraged but also businesses and ordinary working people as well. We need to deleverage the entire economy which is very similar what happened in 1929.

    • Tim

      Pera, will you consider contributing to the “5s”, please?

    • Tim and Pera,

      There is no reason the “gravy train has to end”. The status quo is an option. What will disturb the balance which permits such payments to escape public scrutiny?

      How about we lobby for a charter to be signed by aspiring TDs? Something which includes a commitment to accept no special payments for doing the core job.

      May I suggest an “idea”:

      A Charter for Honest, Transparent Politicians – to be signed, published and discussed before next general election – composed by contributors to this forum and then sent over to other forums for them to support and even improve.

  22. L

    David is really getting to the heart of the problem that some macroeconomic experts have in not looking beyond the most publically available statistics. Some are constantly in reactive mode. They are either reacting to some projection or past related statistic. David is proactive because he is thinking in terms of the real nature of economic exchanges. I could be accused of fundamentalism in referring to von mises but what he wrote in human action p701 and p702 is as true now. There he acknowledges the role of the mathematical economist in quantifying the static situation. He explains that the mathematical economist “no longer deals with human action but with a soulless mechanism mysteriously actuated by forces not open to further analysis”. This according to von mises leaves no room for the entrepreneur. Von mises did not worry abnut the inaccurate projections of the experts.

    • jim

      L Interesting point re.soulless mechanism. If you take the present problem i.e credit crunch and when you understand the absence of logic by the market that blindly accepted ,David x li’s use of Gaussian copula for the pricing of risk for credit default obligations, even after the man explained that he only used credit default swap history’s going back 10 years when property prices were always rising as one of his key variables to simplfy the mathematics,the headlights were switched onn ,on all the rabbits.You now have the boffins and accountants floundering around trying to re-balance the books,because its all they know what to do.Most entrepreneurs know when a mistake is made,you fix it and move onn,and the more creative and forward looking solutions usually bring the greatest rewards.In Irelands case I would contend that it was the abuse of the Euro’s strength by Bankers/Builders et al who got us into this mess and maybe what David is suggesting and with which I agree is that by using the Euro’s strength in local bond issues etc we can if we have faith in our own abilities trade our way out of this mess.This can only be put into practice after we clear away all Bankers/Builders/Politicians/Regulators/Government Dept.Boffin’s etc. who’s interest’s are only served by maintaining a status quo and regime that has clearly failed since 1997/98.David like all of us want to get back to the formative years of the Celtic Tiger (pre 1997) and build on that foundation and spirit of entrepreneurship that produced a 10% growth that was not founded on any property bubble.History will show and all the statistics prove beyond any doubt that FF in order to maintain power adopted a PD agenda which with the aid of a one Mr. Charles mc Creevey as Minister of Finance was financed from the ill gotten gains of reckless and self serving policies.On a sidenote I’m sure the grassroots of FF would like to turn back the clock and wish they had never met the PD’S.

  23. Tim

    Shane Dempsey,

    http://www.davidmcwilliams.ie/2009/02/15/turn-crisis-into-opportunity

    This is the link to the “5s”.

    Ideas that visitors to this site have about how to fix Ireland’s problem.

    You have great knowledge and ideas, Shane.

    Will you consider adding to the “5s”, please?

    Just hone your thinking and suggest 5 points for rescue.

    I hope that you will consider. Thanks, Tim.

    • Hi TIm,
      I thought we were supposed to add ideas to the new ideas section rather than the older “5s” thread? I’ll get around to it. Just having a hectic week and travelling all day tomorrow. Thanks for your support.

  24. justinf

    some ideas into the mix. they might sound a bit offbeat but they are based on my observations on living in the UK and the differences with Ireland. i sense opportunity for any Irish company willing to step up and do these in the uk market:

    1. nash’s red lemonade
    only sold in a small little “world food” section in Asda. you cant get it anywhere else. why isnt it sold in Tesco in the main lemonade areas? theres a big opportunity there.

    2. Big thick rashers.
    i dont care who does these in ireland – but did you ever see what is on offer in Tesco over in the uk? very thin rashers. from Denmark.
    Big thick Irish rashers are missing over here. Again someone needs to market this and push it. Comfort food for the recession?

    3. Irish prime steak
    Over here in the UK the ones who are in the premier league when it comes to steak are the Scots with their Angus steaks. Marketing is superb – in English minds, a good steak is a Scottish one, from the highlands. We should up the ante and compete with that.

    4. Corner shop chains
    In the UK , corner shop chains dont have what your local Spar or Centra has in Ireland – they dont have a bakery. No wine selection. They dont have a mini-deli counter. And certainly no “breakfast rolls”.

    Walking into a Spar corner shop in Ireland was an amazing experience for me coming over from the UK. The difference was incredible, and the consumer experience was far far better than what i was used to in the UK. Again – that concept – of everything under one roof , but in mini-form, has not arrived in the UK to any great extent.

    5. Tech tech tech.
    It goes without saying that the Irish education system is in a league of its own compared to the UK system. Read in a newspaper today that almost 40 per cent of English students dont even get a GCSE.
    Thats “Inter Cert”. British Labour Party has had a long term aim of getting 50 – yes FIFTY – per cent of youngsters into Third Level education. Its fair to say that we’re way ahead on that one.

    Ireland has a very bright, very educated workforce – incubation of that is utterly key. Startups and VC funding utterly essential.

    But what will boost the tech sector enormously is not the Dublin Metro scheme – the billions spent on that could be better spent on deregulating Eircom and rolling out a nationwide fibre network.

    France is already ahead of us. Rural areas there can easily get 20 megabit internet. We need to catch up and overtake – quickly.

    • gquinn

      and there milk is awful. The UK does not seem to have any good dairy products. In Ireland we seem to have a specialist niche in the dairy product area.

    • Deco

      The Metro scheme is uneconomical because Dublin does not have the residential housing density to support it. More of the planning problem. As the continentals say in their case studies “Dublin-how not to plan a city”.

      Soon, it will be “Ireland-how not to run an economy/a health system/a financial regulatory framework/a semistate organization like FAS etc, etc, “.

      Authority in Ireland has failed. Here we go again. Saipan, again and again.

      Put Roy Keane in charge !! He knew what to do with the ‘passengers’ in Sunderland. He did not have much time for the celebtrity set in Manchester either. He will know what to do with Cullen, O’Rourke, etc…

    • More, more please.

      Anyone who can think of marketing red lemonade to the English deserves to be taken very seriously.

      I can see a book of such ideas as your’s. A pocket book that every Irish person could contribute to.

      Any one ever come across “13 and a half idea…?” Great book on innovation, and I can’t find my copy.

      • justinf

        it sounds crazy. i know it does.

        but guess what my 6 year old daughter just LOVES …

        red lemonade.

        and guess what her friends wanted to have at her birthday last year?

        NASHS RED LEMONADE.

        sometimes its the small things that are overlooked that can become goldmines if only they were marketed and pushed.

        and that applies across the board to all Irish products – Gquinn above – dead right about dairy products. Why arent we marketing “Irish Premium Organic Milk” from the mountains of Kerry , with Guiness production values on TV adverts?

        we dont just sell stout.

        all it takes is a will to do it.

        methinks we’ve gotten lazy on the property boom – its time to kick ass and think anew.

  25. justinf

    recession biz ideas on sky news now… from the uk

    chinese restaurant in reading :
    food is free. but you must spend £5 on drinks.
    folks from as far as London are queueing to get into the place.

    another one is a pub
    has a nightclub where you can bring your own drink. £5 entry free.

    both methods are a gamble. but it gets the punters in the door.

    • Dilly

      The bring your own drink is a throwback to the late 80′s, when I was in the UK. A few clubs did this in London, and they always had a crowd, people did what they had to do back then, as they are doing now.

  26. justinf

    low cost idea for irish government – push google to do a complete streetview of all of ireland.

    the benefits in tourism would be immense.

    if you arent familiar with streetview, go to maps.google.com – see the orange man? drag him onto the map of the united states.

    streetview is currently also available in some cities in spain, italy , france, and a large part of japan, australia and new zealand.

    have a look around – now imagine what that would do for our tourism industry.

    somebody in government needs to push google on this – offer tax breaks, internships for unemployed irish. whatever. but get it done.

    • Tim

      justinf, I feel you are missing home.

      Come for a visit.

    • Justinf,

      Stay there. It’s too dangerous to return here. You’ll be treated as weird with ideas like those. Better for us that your are over there, so that we can talk about you as an example of the quality of Irish people abroad.

      Is it true that the most enterprising of the Irish emigrated? How many top Irish politicians have emigrated and returned?

      Let’s compile a list … Fraid I don’t know one. Jim Kemmy would have been on the list.

      I’m serious about this idea. Help

  27. Tim

    Folks, MK1, Lorcan, Furrylugs, Phillip and Deco may “weigh-in” on this tomorrow, but this is good, I think. Thanks for all contributions. Oiche mhaith.

  28. Good morning all. I’ve read nothing yet but have some fresh ideas to share.

    (1) What % of contributors here are anonymous?

    (2) What % of the anonymous contributors are only expressing their ideas on here.

    (3) How many of those, with whom you shared your ideas off here, are sharing your ideas with others?

    (4) If I met you by accident in the English Market (Cork), or the back end of Dublin, would I realise it was you I was talking to?

    (5) The rate at which money is circulating in the national economy needs to be calculated, and reported on monthly, so that we can compare with this time last year, and benchmark with rate of circulation in other economies. MBA task eh?

    (6) Where can I find that stat please?

    Looking forward to reading you all, and not falling so far behind.

    • VincentH

      100% of contributors on here are anonymous for all practical purpose.

      If there are going to be tax increases, then they should only be put on those above a certain figure. There is little point in either cutting social welfare or savaging those below 50k.
      And taxing fuel is about the most idiotic notion I’ve come across. Only ideologically driven fools could dream up this one. What state do they think they are living in. Do they not have Goo’earth, where you can see exactly why half the people in this state have to have cars. The days of sitting at home working at a loom and spinning wheel are gone and somebody needs to tell them. And very very few of us are driving around in Rolls-Royce’s and that fact needs to dawn on the dept of Finance. It is not more tax on fuel we need, it is less.

    • gadfly55

      and who are you to say this is your actual, proven, legal name, for the purposes of court appearances? But of course, we are all legally traceable through our email address and ISPN, be sure of this in event of a message of some import and consequence to person or persons, with a little help from specialists, let us say from beyond the jurisdiction. In relation to money supplies, there are of course, various measurements, and we are never informed how much is in the country and how much is flowing out of the country in any given year, because there is no currency control, and no way effectively of stopping money being transferred to accounts abroad. More pertinently, we should have a number for the amount of money borrowed from abroad, and the amount of yearly payments in interest and principal leaving this economy. The private sector owes about 1600 billion and the public sector owes about 80 billion and 300 billion is due for payment out of the country by July, in an economy where the GDP is now about 180billion. Go figure how this money is going to be paid.

    • Is there no nerd out there willing to answer at least one of my questions?

  29. What a superb “New Ideas” idea in action. Thank you very much webmaster and David.

    Thank you especially for the line you have taken in relation to other places where people are doing their best at public thinking.

    Idea: Let’s construct a list of all the commentators who are helping to make clear what’s happened in Ireland, economically and politically. Let’s add names to this list, so that we gradually compile a register which people will want to be included on (no pseudonyms)

    This is the start of the list:

    David McWilliams
    Shane Ross
    Nick Webb
    Damien Kiberd
    Mark Paul

  30. mcsean2163

    It’s great to be inventive and dynamic!

    Let’s say we do as David says:

    We cut taxes and go on a borrowing frenzy in the hope that therest of the EU will bail us out.

    6 months later there are still no jobs and the world is still in recession. Our national debt is double what it was in 2007. The EU says stop your borrowing or we will expel you from the EU. We give them the two fingers and say you can’t expel us, we’re the Irish, we can do whatever we like.

    3 months later we’re expelled. The government try to raise debt on the international money markets but can’t. The teachers, gards, firemen, etc. don’t get paid. The country is completely ——.

    Don’t listen to David and his inventive untested nonsense. Communist Russia seemed a good idea. The worst thing the government have done is follow David’s advice of a blanket guarantee of the banks.

    By following David’s advice here, it could spell complete destruction for Ireland!

    • gadfly55

      It would mean total bankruptcy and penury and the end of the world as we know it, undoubtedly. David has now demonstrated irrational exuberance, to put it mildly. This is certifiable behaviour which will discredit any regard by reasonable persons for his comments.

  31. Philip

    @McSean2163 – I would not be that harsh. DMcW’s approach would be phased. I saw 2 messages…

    1) Be confident in the Irish grassroots (private enterprise) to get wealth generation going. Over tax it and it’s killed off.
    2) Cull the dampening down effect of the current mardarins. For me, I would dump all the quangos, committees and junior ministries left right and centre and show no fear in outsoucing what can be done abroad more cost effectively. You know, I recently had my GP recommend I go to Poland to get laser treatment for my eyes.

    @Pera, you are perfectly correct in pointing out the overstimulus that already exists and does nothing for the country.

    I really do not know how to put this diplomatically but…The Public Service need help – urgently. They are incompetent and they are enormously powerful. Firing 50% of the permanents tomorrow would result in a massive efficiency increase in PS expenditure. Once people know they can be fired on a relative whim, you’ll see people focus the mind. And I believe the 50% fired would result in a several fold job replacement in the private sector – meaning more tax revenue. The PS needs to be renewed from the private sector and it should be churned back into the private sector.

    As for giving a million here and there to 100s of companies to stimulate high potential start ups?? Hmmm….I dont know. I think you’d spend more administering this than what you’d get out of it. If we look at the economy as a garden, you need your perennials and annuals, your heebees and suculants and herbs and trees and grass…some take a long time to mature, others are fast and wink out or flipped. Some serious thinking is needed on the economic garden that is most suited for Ireland.

    I think we have seriously neglected the main commodities that are needed to make the country move…Energy and Food. We have assumed this was always available from abroad cheaper than we could make it here. This could be a catastrophic error we need to recognise and fix. Food stocks around the world are at their lowest ever. Nuff said about oil (try not to be too deluded about current demand drops). If I were addressing my economic garden, these would be the perrenials I would be focusing on guiding into position and increase strength while potting up the HPSUs. I’d be going Green and Nukes with Very high Yield Agri. As much tech as possible with very high employment potential.

  32. gadfly55

    You are on planet GAGA david, clearly, too much VEGAS, SEDONA and Pacific Heights. The calamitous equinoctical gales are pounding this benighted isle with the hard rain. The path of hyper-inflation, or worthless money, of no incentive to save, of interest free loans, has led us to the pandemomium in which we find ourselves. And you propose more of the same, but mulitplied. Is this the position that trained economists, with whom you disagree substantially and regularly, consider the most beneficial long-term solution to the crisis in global financial markets? Stop comparing Ireland with any large country, and stop considering this micro-dot society as subject to the economics text book analysis you relentlessly use and abuse. We are in the euro-zone and we follow their rules, and their rules in case you have not noticed, do not let the public finances spiral out of control. You are playing into the hands of the Anglo-Americans in the financial markets who are taking positions on government bond default and hope for the disintegration of the euro. In a choice between German government financial management of the euro, and your dangerous and frankly, irrational, advice in this column, there is only one solution. Perhaps you are taking a new angle on this crisis, to demonstrate how severe it it is as you slip into delirious ravings. Ah, such are the contradictions anticipated by Marx and Engels.

  33. tiamatr

    Economic crises happen because of the withdrawal of money from circulation. Industry collapses because of a systemic liquidity crises. Increasing taxation further excacerbates this.

    The most important thing to do is to get the economy moving again, reverse the explosion in unemployment and start creating jobs.

    The solution is to follow (copy) the British Governements approach and by-pass the normal means by which money is created and start putting money into the economy to reverse this crisis.

    Banks, because of their toxic debt, are no longer able to, or willing to, create money which could solve this crisis.

    • Tiamatr,

      Well said. I fully agree that one of the most important things to do is to get the economy moving again.

      My own view is that the most important thing is to cause this government to resign or completely change it’s attitude.

      May I sugget that there is no such thing as “the solution”, no matter how attractive the action seems. Many solutions working in concert, even overlapping, perhaps competing…

      As for our banks, they are still run by the same intelligences with some slight indication that the government is intent on moderate adjustments, on all fronts – except perhaps higher taxes and cuts in the services we most need.

      But then, I’m an old extremest.

      Thanks again for giving me something good to bounce off.

  34. Deco

    What caused the problem ? Human stupidity. Humans seem to become intellectually lazy, and contragulate themselves as they ease into intellectual subprime behaviour. This is what we have seen in Ireland since 2002. The ideas emininating from both the public and private sector became increasingly stupid and delusional. Same as the Great World Depression – which is now in danger of being renamed the First World Depression. There are parallels with The Great War becoming the First World War.

    It took a generation of incompetence. In fact the roots of the failure stem from the success that followed the post-War economic revolution (mostly based on oil) in the 1950s and 1960s. In the midst of the success all sorts of stupdity emerged. First and foremost television outsourced a lot of critical thinking and replaced with all sorts of assumptions. One society after another became addicted to what James Kunstler called the “Something for nothing” ethic. The ‘something for nothing’ emotional pulse from the media became the chief marketing pulse of all polticians.

    The biggest scam on the ‘something for nothing’ ethic was Reaganomics. A complete load of nonsense. We had Ahern Socialism here which was very similar. Both promised rising asset prices, increased leverage-ability, and the ‘feel good factor’. And British New Labour economic policy was a similar feat intellectual stupidity applied to real world economics. In Spain Zapatero proved you do not have to speak English to have an Anglo-Saxon style Financial circus – but if you do, then having a Mediteranean approach to government transparency prevents the rest of the world from finding out.

    If we look at the upper echelons of Western Society, we a similarity to the pre WWI Western World. Basically after a long period of contentment, loads of imbalances, and inadequacies. The biggest inadequacy is the intellectual inadequacy in authority. Authority in the West has become saturated with pretenders, and the pretenders have been found out. The Spoiled Brat Revoutionaries have got old and fat, created their own consumer behaviour group, and enjoyed themselves. Their concept of responsibility has been deficient. Authority has become obsessed with privelege. Only a few countries (the Lutheran belt in Northern Europe) seem to be more immune than average from this flaw. I do not know why this is the case – it seems to be just the way things have freakishly worked themselves out – because in this blos, Iceland turned out to be an absolute disaster. And we also see Canada, India and Brazil as exceptions – as they all remained Financially conservative for their own specific reasons.

    The generation that grew up on TV, learned to dabble in all sorts of chemical substances post 1967 to alter their minds and create new illusions, never really got off the illusionary state. They adapted to consumer behaviour, and credit binging from the mis 1980s onwards. With this they blew their own minds, and the minds of their neighbours as well. Hey, they even managed to blow the minds of the politicians and banker who became boundlessly and recklessly optimistic.

    The West needs to change intellectually. And the West also needs to change it’s authority concept. The Germans get this-possibly as a result of their own history. The Canadians get this, thanks to their strenuous efforts to keep their country together on the basis of competence. And the Americans are getting it now, though if Obama had lost the DNC to Clinton, America would still have a massive intellectual gap at the top. In trying to address the human structural inadequacies, these countries are trying to mend themselves and adapt to the crisis.

    But, in dear old Ireland, we can expect the usual concert of vested interests, to ensure change is directed to uphold the vested interests. The Oldest Bank in the country have replaced one incompetent clown with another. The largest construction materials producer is sliding-with one analyst after the other popping up on the media, to tell us that the said company is ‘solid’, ‘dependable’, etc… The newest bank in the country are adament that they did not break any laws over that 8 Billion Euro loans that matured after something like 48 hours. And another nationalised bank are still ‘under investigation’. Meanwhile the political parties continue to be a fountain of privelege, and distortion as usual. We have rumours rife across Ireland, concerning government ministers, corruption, and all sorts of wrongful behaviour.

    Authority has failed. Very similar to WWI really.And the sooner that we admit it, the sooner that we can fix it.

    Who is responsible ? The idiots who never stood up and asked questions – who believed all the rubbish that was in circulation for the last twenty five years. Intellectual laziness, and the human tendency to prefer delusion to the requirement to be responsible, and to do something requiring active intelligence. Well, that is the way I see it at any rate.

    • VincentH

      The one difference in Northern Europe, that if you are going to target inflation, then you target it. Not shift it to another area. All very well holding the wage costs in a vice. But if you do not hold everything in the same vice, all you are doing is shoving counters on a board.
      The main driver of costs, from the 90s onwards was the costs of housing. Where at one point, in Dublin, no one driving a bus could afford to live within the confines. This situation went across every sector.

    • gadfly55

      Excellent post, with which I concur on every point. The problem is cultural, and the consequence is financial, economic, and pragmatic, as in what is the meaning of human existence in terms of education, employment, reproduction and family life, sustainable living and lifestyle, civic responsibility. The inflation of expectations with the notion of unlimited growth has now crashed into the reality of payback on borrowing and limited sources of energy and raw materials to provide work-free lifestyle for humanity. The rush of money in the last 10 years nto the hands of an elite, operating off-shore with no regard for social responsibility, in a shadow banking system with no regulation, using private equity, hedge funds, sovereign funds, etc. to effectively indenture the planet on a never never scheme of interest only payments, while the principal was leveraged and insured against default, has now collided directly with governments attempting to manage public finances with insufficient tax sources. The money is gone, out of their control, and they intend now, to get control of it, for once and for all. Witness Brown’s recent statement on off-shore accounts, the shadow banking system, and excessive bonuses for short-term banking profits, and witness the US tax authorites targeting the Swiss banking system for identity of American citizens with 50000 accounts in UBS. Tax evasion must be made illegal and punishable by fines and imprisonment in Ireland, on the income of its citizens world-wide.

    • Dilly

      What an excellent post !, we are taught in school not to question, if you stray from the path and ask “why”, you get an F. This continues into adult life, and polictic’s, don’t rock the boat and you can feed from the trough.

    • Me too Deco. What a sustained challenge. It covers so much that I feel like writing one of my MBA papers for Glanmire University on it alone.

      “The biggest inadequacy is the intellectual inadequacy in authority.”:
      I’d like of offer an alternative hypothesis.

      That those in authority are intelligent, purposeful and successful.

      How would I set about refuting this hypothesis? I would seek out evidence that those in authority possess low IQ, inadequate thinking tools and a track record of losing power as the external world throws up challenges. I’d expect to find that those in authority have lost their grip and are a very different gang than used to be in authority, say 25 years ago.

      [I'm doing my best to apply Karl Poppers' approach to scientific reasoning.]

      However I can’t find evidence to refute my hypothesis.

      I offer this as a taster, a fragment of the sort of analysis I’d like to apply to your reasoning.

      Thanks again for your very interesting perspective.

  35. SLICKMICK

    Abudget defecit of 30 billion next year is a given-so expect the economy to crash within 18 months.At that stage it will be man the lifeboats.A rerun of the fifties is the most probable scenario-the economy cannot recover @ the present euro/Sterling exchange rate.Nice 2 see Seanie enjoying a round of Golf in 2days herald.

  36. Deco

    There is a picture of the current Minister for Education, and a known gambler and tax avoidance expert who is providing a scholarship scheme for students in Third Level. Now, I think scholarship schemes are great. There was a time when the top rank of the Civil Service of this country were all scholarship recipients at some stage. This eventually was eliminated – when the state decided to take an increased role. Scholarships are fundamentally meritocratic. And meritocracy in Ireland that exists in the CAO, and on getting on the Kilkenny hurling team. After that, grafting seems to be commonplace.

    Basically, the idea of meritocracy is that the best get ahead. It is a great way for advancing a society. I think that meritocracy would be a great idea if introduced more in Ireland. It does not mean the most priveleged, or the richest, or the best connected get ahead. It means the best workers. It is fundamentally pro-worker.

    But I have to ask the question – O’Keefe has a massive bias towards third level. Now I think that our third level institutes are a mixed bag. Some are excellent. But some are not. And even within the good ones there are some mediocre performers. Apart from the odd survery into our third level sector by the OECD, very little light gets shown on this sector of the education system which seems to be getting a larger and larger slice of the budget. If we are not careful we will end up with ‘a Californian scenario’ – underperforming education as a whole, and expensive third level institutes full of non-local students. We also have a serious problem with the universities. They are generating far too many graduates in areas like law, and business administration. We then get the scenario of too many lawyers – which creates a massive lobby group for complicating the legal framework, and increasing the legal overhead to be carried by the rest of society. We have laws that are full of loopholes. In fact the position of lawyers in our society is very dangerous-and is akin to a power-broker. Small wonder that lawyers are the largest professional grouping in the Dail and the Seanad. We have one economist in the Dail, and one ex-banker (Shane Ross). Interestingly, he is an ex-banker – because he could not stand the incestuous networks, the nepotism and the corruption.

    We are funding the wrong third level institutions, and the wrong departments within institutions. We are also giving far far too much money to lecturers in the universities, many of them teaching subjects that are of marginal significance to either our economy or our society. I think that we need to reassess this urgently. And while the gambler will make life better for many hardworking students, the question has to be asked – what value is the taxpayer getting for very well paid academics ?

    • gadfly55

      Meritocracy created the financial chaos we are in, because all the masters of the universe came through the same system enabling them to progress into Wall Street, and take as much as they could when they had their chance. Societies which are stable, always have an elite class, not wealthy, but comfortable, who serve as administrators and managers. The sense of noblesse oblige sustains societies where families have reputation carried through generations. Now, its all get rich quick, instant celebrity, make it when you can, damn the consequences to other people, to the environment, to society. The heroes are not persons of integrity, of character, they are lucky. Life is a casino, and most of us are losers. Why bother working hard?

    • Deco,

      I better declare an interest before commenting on your analysis here: my grandfather was a state solicitor; my mother’s cousin was one too; I’ve often wished for another life in which I could be a supreme court judge

      You say:

      “We then get the scenario of too many lawyers – which creates a massive lobby group for complicating the legal framework, and increasing the legal overhead to be carried by the rest of society. We have laws that are full of loopholes. In fact the position of lawyers in our society is very dangerous-and is akin to a power-broker. Small wonder that lawyers are the largest professional grouping in the Dail and the Seanad.”

      You have, I think, put your finger very exactly on something incredibly important. Right now, the government has pulled a brilliant stroke, in the full glare of public view. It has asked the Office of Corporate Enforcement move in on bankers, thereby protecting the public from access to information.

      Yes, by calling for the Gardai to move into two banks, Mr Lenihan has ensured as much as possible will be sub judice. He has played the public mood for vengence. By threatening the full force of prosecution, and help up the promise of jail for those found guilty, he has protected himself, his party, his leader, his bankers from public scrutiny and public disgrace.

      The matter is not dead in the legal process.

      I hate saying I told you so, but for the start I’ve done my best to persuade people to give immunity from prosecution in return for full public scrutiny and total co-operation with forensic parliamentary work on TV.

      Most have fallen into the trap. Even if a property developer is found to have colluded with a banking clique for the purpose of fraudulently manipulating share price, what will be the period of time in prison served by any of the parties?

      And how much will layers earn, on both sides? Lenihan is a skilled man. Cowen no fool. Cowen has never practiced any profession but politicing in his life: he is a man used to manipulating people. His intelligence has never been deflected by time in business or abroad. He understands one role: put in place structures to maintain the power and wealth of those he admires most.

      Before anyone says, but look we all gained, we too are all guilty, let me assure you all that we are small beer, minute pimples on the face of a powerful ruling class. A class that understands all about hegemony. Underestimate the ingenuity of that class and you fail to respect those you might love to replace.

      Forgive my lot of words: I haven’t had the time to write you a succinct note.

      I’d love to know who agrees this way of thinking about what’s been going on?

      • I meant ot write: the matter is now dead in the legal process…

      • Tim

        Paul, please post confidently. Depression notwithstanding, you are a positive influence here.

        I think we all see that – trust us.

        We may, well, rail against you from time-to-time in the future, but that does not devalue your posts;

        au contraire!

        Please, “keep-at-it”, Sir.

        • Tim

          Paul, dala an sceal: “Deco” is more than equipped to understand.

          He had my measure, very early on……… and has yours as well, I am sure.

          Keep feeding.

    • G

      @ Deco “We are also giving far far too much money to lecturers in the universities, many of them teaching subjects that are of marginal significance to either our economy or our society. I think that we need to reassess this urgently.”

      Agree with your points, spot on about Universities, we don’t have a single world class univiersity, but unfortunately we do have a whole bunch of highly paid people with silver tongues who talk a great game.

      Ireland could be a world leader, but how many times have I said that, people are just not serious enough, hence the current debacle, totally predictable and yet we head to 500,000 unemployed, why? nature of the political game, short term, parochial bulls*it…………………..

  37. G

    Courtesy of Tony Benn -

    Few if any senior people in the political and banking sector have ‘lost’ their jobs – jobs are never lost, they are taken away from you, this has happened to plenty of ‘working’ people. who didn’t get golden handshakes.

    “There was a boat race between a Japanese crew and a crew from the National Health Service (UK).

    Both sides practised long and hard and the Japanese one won by a mile. So the NHS faced with this problem setup a working party which reported that the Japanese had eight people rowing and one steering and the NHS had eight people steering and one rowing.

    So they brought in management consultants and the management consultants confirmed the diagnosis, suggested the NHS team be completely restructured to make it more efficient, gain critical body mass, cohesion, streamlining and all-round better performance.
    As part of the restructuring, a number of appointments were made including three Assistant Steering Managers, three Deputy Steering Managers, a Director of Steering Services and the rower was given an incentive to row harder.

    They had another race, this time the NHS team lost by two miles, so management laid off the rower for poor performance, sold the boat for a higher than average pay award for the director of steering services and determined they had too many management consultants and not enough managers.”

  38. gadfly55 – I always admire a radical independent mind in a room – what are you proposing and what are your honest views of ireland now?

    • gadfly55

      The current position of Ireland as outlined just today in terms of competitiveness, just above Italy, demontrates there is no future prospect for recovery. There is not one sector in this economy with a positive outlook for global competitiveness in ten years. The implications of this for payback of the 1600billion in borrowing from the private sector are catastrophic. This country is now insolvent, it cannot pay its way out of its debt obligations, it cannot sell its assets to international buyers, because they are debased, devalued or non-productive. The primary asset of the country is its educated work-force, but they have been trained to comply with the requirements of non-unionised American multi-nationals, and have no capability or sustaining themselves without control. In order to make a future, the old order must totally collapse, and be seen to offer no hope to the children in school now. Parents will soon figure out that it is a waste of time disciplining their children for the demands of the system, and new co-operative groups will devise ways to survive without debt, without an ATM, without a lifestyle worth advertising. The rich will get richer, until they are brought down, in more ways than one, and everybody else will have to become much wiser, much shrewder, much smarter everyday, throughout the seasons, and across the rest of post 19/11, Lehman brothers meltdown.

  39. gadfly – reconable income of irish citizens worldwide is taxable as it is .can you be more specific what you mean?

    • gadfly55

      Oh really, that is if they are here most of the time. Ask Denis O’Brien or Michael Smurfit, just a couple of the most public of persons with residence abroad. The Finance Act adjusted the measurement of presence, which previously discounted a day if you were in the air, out of Irish airspace, at precisely mid-night, which created ballooning of a different proportion, in calculating residence days.

  40. Lorcan

    Hello all.

    I wrote a post here the other day looking at Income Tax reform (and increases), while also calling for a suspension of the NDP.

    Looks like David doesn’t agree. :)

    Anyway, onto the article.

    David > What economic theory tells us that, in the face of a meltdown in the economy, the best thing to do is to reduce expenditure and raise taxes? There is none. The lunatics have taken over the asylum.

    Could I offer that the lunatics have been running this asylum for a long time? Economic theory was roundly ignored during the good years, with government, when they did act, only acting to add more gas to the bubble. Ten years of pro-cyclical policies and ten years of paying our bills from taxes raised on an asset bubble have left us in this position.

    Income tax is too low. To use some market parlance, it is under-priced. This artificially low rate has to be normalised, along with our artificially high spending expectations before we can return to any kind of meaningful growth.

    I am not speaking in favour of a sur-tax on high incomes, but rather a returning of income tax rates to sustainable levels. Income tax is too low and needs to be addressed.

    The NDP is a very good idea. But it is also a very costly idea and as with any infrastructural development there will be a long time-lag between investment and return. You argue that it should be maintained and, if anything, increased. This is sound economic theory. But how does it stack up to a cost-benefit analysis? Where the cost of spending the money on infrastructure might be insufficient funds (or at least increased cost in raising funds) for the current account?

    I don’t expect the DofF to balance the books any time soon, they’d be mad to try. But we do need to unwind the excesses of the boom years while readjusting people’s currently unreal taxation expectations for the level of services they demand.

    The Euro does mean we don’t have to be overly concerned about the level of our national debt. Irish GDP is only 2% of the eurozone’s, so we are not big enough to cause any major problems for the area on purely economic grounds. But we could come against sustained political pressure from our neighbours. We in Ireland are blaming the banks for our dire straits and looking for our pound of flesh. Lets hope the eurozone don’t decide to scapegoat Ireland, to make an example of us, just to sate their domestic political goals.

    Don’t want to seem like I am disagreeing with all your proposals, in fact I think they are all good and make a lot of sense. But I do think that before we step forward we have to deal in some way with our recent past. Your ideas will have to be put into practice in the medium term, but we have to survive the short term before we can build for the long-term.

    Perhaps a Jubilee is the way to go. As soon as we get around to nationalising the banks we can start unwinding the debt. A debt laden population is less likely to take the risks we need to take to flourish in the future.

    All that said, I agree fully with your closing line. “This crisis presents us with the greatest opportunity in decades to shake up this country. Let’s hope we seize it.”

    • Lorcan,

      Thank you for such a thoughtful and bridge-building comment. It is good to see someone confident enough to challenge David’s view on taxation.

      Your “A debt laden population is less likely to take the risks we need to take to flourish in the future.” is an interesting hypothesis. Time will tell. My own view relies more on the idea that people follow the leader. If politicians say ‘you need to borrow more, and join the property ladder’ people tend to follow.

      Most outsource their thinking. I think this might be why a forum of ideas like this one is likely make a restricted impact until, at least, everyone on here declares the name by which they are known in their local community.

      Thinkers need to be outed, I say. Being presented with a great opportunity is one thing, making something happen is something else.

      We tend in Ireland to get excited when we see anyone standing up for their own ideas. We immediately recognise an unusual type. Many look on admiringly.

      However…

      • Lorcan

        Paul,
        I have never made a secret of who I am. My full name is Lorcan Roche Kelly, and I posted under that name here until about christmas.
        I had several reasons for shortening it to just Lorcan, but my intention has never been to hide behind a nom-de-plume. I say what I think and am willing to stand behind it.

        As for being confident enough to challenge David, any student of economics can argue either side of an economic debate, Hoover’s famous request for a one-armed economist comes to mind, when he became sick of listening to his economic advisors saying “on the one hand….. or on the other hand”
        Or Churchill when he said “put two economists in a room and you are guaranteed two different opinions, unless of course one of them is Lord Keynes, then you are guaranteed three” apparently the genius Keynes was well able to have a disagreement without any outside help.

        Keep up the campaign, Paul, there is always a chance that it will make a difference.

        • Tim

          Lorcan, “True”, and well said.

        • Tim

          Paul, I am “Tim”. My full name is “Tim Nelligan”.

          You can “google it” all you like, but you will probably only get the ASTI, trade unionist crap that the “papers” printed years ago, until they “blacklisted” me for speaking truth.

          For the Record: I stand over EVERY thing I say and do.

          Sometimes, I am incorrect and need to be educated on certain matters – but I am NOT hiding from anyone. I have nothing to hide.

  41. Volcanic Eruptions – Our Time on Fire – to morrow the MOON PULL maximises and right now the DRAG is Hurting – watch gadfly and lorcan releasing their radical minds and revealing the underlying flames of passion and Lorcan adds more ‘Lunatics ‘ to his last submission .Big CHANGES ……..Listen to the Music .

  42. sirganja – your last contribution on Fromm was interesting can you do it again and perhaps submit more ideas .

  43. gadfly – are you proposing karl marx socialism or something else ?

    • gadfly55

      Radical anarcho-syndicalism, why don’t you jump in a box, pull the lid over it, and go out with the tide, because you are not contributing anything to this thread other than provocation.

      • Tim

        gadfly55, John Allen contributes ALOT of worthwhile postings here;

        Leave him alone to do what he does, please?

        I say ” please”, because I learn from your posts, too. Just, “let it flow, man?”

  44. Ruairi

    The Belfast Telegraph reports that Branson is considering morphing Virgin Financial Services into a retail bank. http://www.belfasttelegraph.co.uk/business/business-news/richard-branson-ponders-virgin-bank-14218985.html

    I know it can take 2 years to get in place but please please Sean Quinn or dermot Desmond, do likewise? God forbid that An Post would help a genuine Irish Beowulf instead of a foreign bank like Fortis.

    Let the merchant bank wings burn. Just keep those ATMs ticketyboo Leno.

    • My god, there’s a man out there distinguishing between a genuine Irish Beowulf and an ungenuine Irish Beowulf.

      I wonder if he thinks Seamus Heaney wrote the genuine version? Or is his an oblique reference to the dedication of Heaney’s translation to Ted Hughes.

      What is Fortis: I’ve never heard of it – maybe I should act as if I know it?

      Burning wings… Icarus? Ah Leno… that must be the man who’s lot cuter than he looks.

      “They say that of all the kings upon the earth
      he was the man most gracious and fair-minded,
      kindest to his people and keenest to win fame.”

      May I suggest Ruairi that you look in that water.

  45. Philip

    @Deco, you are spot on. I see no element of the polemic in anything you say. That said what can you do?

    When I started looking at this blog some time ago, I was dealing with a group with a diverse view of what was about to happen in 12, 18 or 24 months time. My outlook was negative. Now, I find that reality was indeed far more negative than I could have imagined. My naive expectation was for a rational response to try evade the worst aspects of this recession and bring people to their senses.

    I have found that I was correct on one point. The response is completely rational. What I forgot was the immense power of those doing the rationalising. Their gameplan is personal survival and maximisation of personal gain and not doing what is best for the country. The TDs (all parties on the Government and Opposition benches), Civil Service, Trade Unions, Lawyers and Bankers are one big clique that will barge on to the detriment of the rest of the country. The electorate are the expendable fodder with no voice.

    What do you do when so powerless? Well, we have the suggestion box concept. This is very compatible with the idea of the elevatior pitch and it plays right into the media hunger for more daft nonsense of false hope to keep the electorate calm. Similar to this is throwing a few crumbs here and there for nice innovative ideas sounds nice too for HPSUs – which as a concept is a nonsense idea. I mean, how do you know it’s high potential when you have no idea how the market will develop in these wacky times.

    Let me give you all an idea…Ideas are self evident. Simple as that. Ideas are a response to problems. But the trick is finding the problem and agreeing that is the problem. That’s all DMcW has been doing – trying to get a consensus on what ihe suspect was an emerging problem. He and similar think individuals have been proven correct, but new problems are emerging and we do not know what they are and there are so many ideas which are diluted as a result.

    Right now, we all one big problem which has exaserbated the effects on this economy. They are this clique I mentioned above. Question – What do you do about it? How do you reduce the influence of these people? We know elections will not work. Maybe a visionary will come along. Who knows?

    My view? Let it blow up – nothing can stop it. Get on with your community and help where you can.

    • Philip,

      I am so relieved to be reading you. “Get on with your community and help where you can.”

      You’ve put what I’ve been grasping for. The shortness of my comment is my best way to pay homage to your words.

    • Tim

      Philip, You are so right! I have seen this at FIRST hand from within the trade union movement and from within Fianna Fail.

      “The TDs (all parties on the Government and Opposition benches), Civil Service, Trade Unions, Lawyers and Bankers are one big clique that will barge on to the detriment of the rest of the country. The electorate are the expendable fodder with no voice.”

      Let me tell you this, from my TU perspective: When we found out that the GS of our Tu, who was a brother of an advisor to Bertie Aherne, had been embezzling money, for years, and tried to fire him, ALL HELL BROKE LOOSE. There is no “seperation-of-powers” in Ireland.

      There is no “government” in Ireland; all there is, is a CABAL.

  46. gadfly55 – if you have a good proposal you would not submit to a question ( & moon drag ) and refuse to clarify .what are you afraid of?

  47. gadfly55

    Webmaster, when I click on John Allen, I get None.co.uk, a credit card website. What is this about?

    • Ruairi

      John Allen is Dermot Desmond. Its a pseudonym.

      John / Dermot is going to launch a new currency called credit, placing it on cards for ease of use, making consumer spontaneity an economic lubricant once again

  48. Philip – I agree with your statement

  49. gadfly – i am asking you questions and you are evasive and you still criticise dmcw article ….you are not very clear .

  50. …easing the multiplicity of moons to ensure the fertility of our Irish Currency

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