March 15, 2009

This is not the time to panic

Posted in Irish Economy · 93 comments ·
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The other day, I went autograph-hunting with my son. We’d seen the rugby team at our local hotel, and nothing would come between a six-year old and the prize of an autograph. So off we went. The image of a giant Paul O’Connell bending down, while on his knees, to sign a tiny little man’s autograph book will stay with me for many years.

Likewise the excitement on a six-year-old’s face, his whole body shaking with the thrill of being picked up with one enormous hand by smiling Jamie Heaslip and popped up on the Number 8’s broad shoulder. Peter Stringer, Jerry Flannery and Tommy Bowe could not have been more decent, chatting away to the young fella, who could hardly contain himself. This is what sport and sporting heroes are all about.

Paul nattered away for awhile on the game, the championship, Munster and Ireland before the topic eventually turned to the economy. He professed to not having had any interest in the subject before this crisis, but now couldn’t get enough of it. Interestingly, he explained that the implosion of the economy was having a profound impact on these players.

He spoke of the fact that, in the past, international players, in a city like Limerick particularly, could have depended on a job in an insurance company, a bank or a car dealership when they hung up their boots, but not anymore.

The giant Irish lock – a man you’d have behind you in any scrap, a man who has faced the haka without flinching, who has stood up to and intimidated the hardest men in international rugby – was afraid. He feared the future. Make no mistake about it: this recession is going to affect us all.

This is why it is depressing to hear the uniformity of opinion backing the government’s emergency budget proposal. When the mainstream economic profession, the Department of Finance mandarins and the commentariat are foursquare behind any idea, it is time to worry.

Remember, none of these guys in the mid-2000s saw the bust coming and, possibly more to the point, back in the mid-1990s, none of them predicted the boom, so why trust them now?

A possible reason to explain why they did not see the boom coming nor the bust on the horizon is that they do not think like economists. They seem to have scant regard for something called the economic cycle, which in Ireland is largely driven by credit.

We experienced a credit-driven taxation boom as abundant credit flowed into the economy, which made the exchequer figures look great a few years back. Now we are experiencing a credit-driven taxation bust as credit has left the country. This is the crux of the issue.

Ireland is going through what is termed a massive de-leveraging period. At the height of the boom, the banks were lending 160 per cent of their deposit base to the domestic economy. A significant proportion of this tsunami of cash found its way into the government coffers and bloated the tax take.

Now the opposite is occurring. We are in a liquidity drought, where there is precious little new lending. The banks are trying to get their lending back to a ratio of one to one with their deposits and loans, so credit dries up and the tax take suffers.

No amount of tax hikes or expenditure cuts will change this. We are confusing economic and liquidity factors with accountancy and the balance sheet. An elementary mistake, clearly, and one which could be excused in Leaving Cert student, but not in paid professionals.

The upshot of this monumental policy mistake is that this budget will not make the underlying dynamic of our budgetary dilemma any different. In fact, it is guaranteed that we will be faced with another emergency budget in the late summer or early autumn. The cuts and tax hikes will do nothing to bring the liquidity back, and therefore tax hikes and expenditure cuts will beget simply more of the same – further tax hikes and yet more cuts.

This conundrum needs to be explained clearly. In a monetary union a liquidity crisis does not need to be permanent. The only reason membership of the euro is of any benefit to Ireland is if we regard the ebb and flow of liquidity as temporary, as a state like Connecticut does in the US.

When investment opportunities present themselves again in Ireland, money will flow back into the country. So, for the moment, the key thing is to hold the line, to preserve jobs and dip into this huge European pool of savings to tide us over. Cutting the number of teachers or reducing the number of beds in our hospital won’t change the big picture, but will undoubtedly affect many people’s lives detrimentally.

None of the above means that we should not be concerned about the public finances, but we need to disentangle cause and effect. Clearly, we need to broaden our tax base over the coming years, which will imply raising taxes on wealth, housing, corporations – and modestly on income.

Obviously there are expenditure areas that need to be reined in. But equally, we have to be ready for the next upswing, and so we need to have the infrastructure in both human capital and physical capital in place before that.

Ireland should implement a seven-year fiscal plan now, which would allow us to broaden the tax base gradually with the key notion of delivering proper services and productive infrastructure. Nobody needs to panic.

Cutting wildly now and raising taxes simultaneously is not the answer. In fact, this will precipitate another fiscal crisis – and another and another. Ireland’s problem is one of liquidity, and this is a short-term dilemma in a monetary union.

As this column argued last week, some time in the next few years, this problem will right itself, either through a Euro-wide bond issuance, a national recovery bond or through the international cycle playing out its course. We simply need to think clearly and stop behaving like accountants, terrified by the tyranny of the balance sheet.

We have loads of scope to borrow, both internally and externally and, more significantly, when liquidity flows again tax revenue will skyrocket and the deficit will disappear as quickly as it emerged.

There is no alchemy; this is just how the cycle works when monetary policy works. Today, monetary policy is not working, because the world is hoarding money. But this will pass after a period of interest rates at zero per cent.

It is crucial now that the world – and Ireland- creates inflation, not deflation. If we haven’t the stomach to print money (which would be by far the easiest exit route),we need to turn on the taps through government borrowing.

We are in exceptional times so we need exceptional measures. Like a good rugby team, you never learn nor win by doing the same thing all the time. If plan A is not working, shuffle the pack, try plan B,C or D until you find something that does the trick.

Nothing can be ruled out. In rugby parlance, we are sticking with the conservative economics of Eddie O’Sullivan, when what we need is the inventiveness and freshness of thought of Declan Kidney.


  1. VincentH

    Well, you will know that the main problem in WW1 was that the General Staff were fighting previous wars and not the one they were it. As with this situation and the Dept’of Finance, we have exactly the same problem.
    I suspect, that there are within the Service enough young thinkers who have a conception of what happened with union to the Euro. But I have this awful feeling that all they are allowed to do at the minute is dust off ancient policy documents.

    • Deco

      The first problem with WWI was that they started it over a fairly trivial matter. The entire episode came about as a result of one tragic mishap after another. Thanks to a high level of national pride, somebody stepping back to see the wood from the trees was just not possible.

      The second problem was that once it started, honesty just went out the window. Europe’s aristocratic class were fighting wars to preserve their own significance in their societies. They were also letting themselves express all sorts of outdate notions of inequality, privilege and prestige.

      Both these problems were derived from the fact that the leadership of Europe was short on brains, and heavy on (pride-based) nonsense. This is a very dangerous combination. We have endured it in Ireland since the mid 1980s. It always ends in misfortune.

      We need a more humble and more straightforward way of behaving in this country.

      • gadfly55

        try truthful, courageous, just, prudent, responsible, temperate, considerate, and generous

        • Deco

          The “Pride Construct” of the Irish mindset is a massive obstacle to it happening.

          We should drop the ‘pride contruct’ – and try and get back our self-respect. We lost our self-respect when Charles J.Haughey became Taoiseach – and we have to regain it yet. You only have to look at the way things operate in Ireland in both the public and private sector, to realise that Ireland is a society structurally designed to accomodate the gombeen mentality.

          Being Irish is all about obedience, going with the herd, believing all sorts of fairytales, and myths. There is a whole heap of stuff about Ireland that is complete nonsense. We spent the last fifteen years ‘celebrating’ like as if that was somehow or other an acheivement superior to the Dutch draining the Zuider See, or the Chinese building the Great Wall. And now we see the result. There is not one single Irish bank capable of functioning properly. We are Iceland six months on. There are people in Ireland who think that a drunken stupor is a cultural event. And they will not under any circumstance consider the fact that such a mentality might be incerdibly flawed – and even idiotic.

          With all the addictive and psycho-delusional tendencies in the Irish population, is it any wonder that this country is suddenly a bankrupt, depressed place, full of social problems and utter chaos ??

          I have read the work of James Kunstler and his critique of America. All I can say – is Thank God, he has not seen Ireland. Ireland has all the defects of the current American social model, and an insiduous layer of Irish problems in addition. The Americans have the 1000 mile Ceasar Salad, Ireland has the 1000 mile drinking binge. Americans have the mall, we have Liffey Valley, etc. bankrupt and being paid for by the taxpayer. Michael Moore has critiqued the US healthcare system. But at least it works. The HSE is failing, and is 18% filled with management. Americans fire their incompetent regulators, and jail the corrupt bankers. In Ireland both constituencies slip quietly out a side exit, claim full pensions and all have a get together in an exclusive golf resort in Portugal owned by the biggest tax avoider in the country.

          I actually think that the entire ‘celebrating’ culture is to prevent us from actually thinking. Thinking is dangerous in Ireland. It makes you all sorts of enemies. Thinking is supposed to be a privelege of the gombeen classes – the sloggers are told to amuse themselves and not do too much thinking – in case they might realise what is happening, and end up causing some sort of revolution !!!

          • Josey

            Deco maybe you should just get a few cans in, watch x factor or “de match” and chill-ax for a bit.

          • Tim

            Josey, I think that you will find (if you read) that “Deco” is one of the most “positive” posters here;

            The definition that you use of “positive” is critical:

            If you believe that “praising-the status-quo” is positive, then carry on.

            If, however, you believe that altering the status quo might be a good thing, then “Deco” is worth reading.

            Good to see you here, by the way.

          • Malcolm McClure

            Excellent post Deco: You don’t even need to look as wide as America for a comparison; here’s California: “The budgets are completely hostage to the large and all-powerful public sector unions – police, fire, education and the ludicrously over-paid prison guards. It was a pleasure to hear the Governator’s call for measures to cut public “servant’s” wages and benefits. It won’t happen of course. There will be another stitch up and the debt will continue inexorably upward.”

            Sound familiar?

          • Tim

            Deco,

            “I actually think that the entire ‘celebrating’ culture is to prevent us from actually thinking.”

            Ahhhhh, “the opium of the people”; it might have been religion, at one point, Deco, but it is now booze and celebrating (watch the next two days) – now, I am all for booze and celebrating, but only in a thinking, conscious way (if you are not in control of IT, then it will control YOU!)

            I view the education cuts as a ploy in this regard; keep ‘em ignorant, and they cannot question power.

            Rather like the penal times, we reduce investment in education because, even though kept VERY lean over the years, the Irish populace has become too smart and is now DARING to challenge power in an intelligent and questioning way. How dare they? Cut education! While you’re at it, Cut health, too – let some of ‘em die so they can’t collect their pension.

          • Deco

            Josey.

            I will give you the consolation that the former Taoiseach (known by the posters here as the “Drumcondra Ditherer”) followed your ‘advice’. There are rumours about current cabinet members doing likewise. I consider it more patriotic to opt out of the national culture of intellectual descent and obedience to corporate Ireland and it’s empty promises. Something about 1916 being far more successful than the Rising of Robert Emmet and all of that !!! We have to sober up in order to fix our society. Then Robert Emmet’s epitaph can be written.

            Tim – thank you for your encouragement. We have a Welfare state in Ireland. But the Welfare state is effectively bailing out the results of the overwhelming power of the alcohol industry in our society. Regarding Education, I suspect that there is too much government influence on policy, in the sense that independent thinking is no longer welcome. The bureacracy of th HSE has basically become the key influential factor in all decision making. I fear that FF-PDs will try and create problems in education,and then respond by creating bureacracy as the cure. This is exactly what happened in Health.

            Tim – when you are talking this with other colleagues in your profession – be wary in case the govevernment turns it into another HSE.

            Malcolm Maclure. We have a level of nepotism in Ireland that would cause the Californians to start a state amendment. And the Nepotism has created positions in the public structure which is purely a reward system for cronies of politicians. I present to you the case of the HSE as evidence. When the HSE took over from the health boards, 8 regional managers were replaced with three layers and 488 staff – all above the previous structure. It actually delivered worse results. Because an awful lot of them have no experience. There is a cosy consensus between union bosses and political appointees. They stage mock combats. But they never threaten each other’s handy numbers. The front line staff get sold out again and again. You are right – but we need to approach the think the problem like the New Yorkers – at the top.

            Our society is facing possible collapse and misery. We can fix it. But there are a wide range of vested interests who would regard any reform as a disaster leaving their corrupt practices exposed. The world is moving fast. Asia will emerge very strong when the dust settles on this crisis. And we need to upgrade our societal thinking in order to cope with the new century.

          • Malcolm McClure

            Deco: I’m astonished that the west can be given lessons in democracy by Pakistan but the reinstatement of the Chief Justice by popular demand points in that direction. This piece in today’s Guardian will repay close reading:
            http://www.guardian.co.uk/commentisfree/2009/mar/17/moshin-hamid-pakistan-democracy

            If the democratic will of the people can work against oligarchic forces in Pakistan then it can work in Ireland. The government must grasp the nettle in the coming budget and push through root and branch reforms in every aspect of the economy. Half-measures are no longer enough. As the above article points out forcefully, new media like mobile phones, blogs like this and social networks have transformed the balance of power, shifting it from the government back to the people, where it belongs.

            I have no wish to foment trouble for the government, which is dealing with a very difficult situation that requires us all to exercise patience and restraint (which Irish people have shown admirably so far). But patience has its limits. Up to now, Inspector Plod has not felt any soiled white collars. Our justiciary have been indolent, so natural justice has not been seen to be done. The CAB has diverted our attention by seizing some armoured Beemers in Limerick but Maseratis are still well hidden under dust-sheets in D4.

            President Obama has expressed determination to change the bonus culture, regardless of contractual obligations. Force majeur measures by our elected government may be necessary to correct some of the recent excesses.

          • Josey

            Deco,
            apologies I was trying to be sarcastic. For some time it’s been fashionable to switch off the brain in Ireland and consume copious amounts of alcohol and then laugh about how “wasted” you were the previous.

            Sure I remember even in school lads getting punched by fellow students for answering questions. I know a particular part of the country where it is a bragg to say you failed the leaving.

            X Factor land seems all consuming and we’re heading in the direction seen in the film “idiocracy” if we’re not careful.

            Fcek the elite we can beat them with our intellects. We must however change our focus, make being drunk and disorderly a shameful thing like littering is or drinking and driving has become and raise the status of artisitic, academic and athletic talents

          • Deco

            Josey – I am so accustomed to the predominant mentality in Ireland that I am prepared to keep arguing. And I have heard people say this and they really beleived themselves to be more Irish than anybody else. Which explains why such a mentality is worth replaying in sarcasm :)))

            Though I do agree with the sarcasm that you express. It is exactly what the predominant assumptions need – good blast of logical argument to question them- and a blast of sarcasm at the same time. In the last twelve months I have listened to people talk about nepotism as part of the problem in this country. That never existed before. And it is falling apart.

            I hope that pride gets similarly taken apart. And this this thing of proud of being the Irish drunkard needs to be pulled apart. This stupid mentality is the basis of all the nonsense and irresponsibility that have caused this mess. It allows Ireland’s corrupt elite to proceed.

            You are right – we will reform this country and the people will reclaim it, undermine the elite, and be capable of functioning in a more egalitarean society afterwards. Ripping asunder the drink problem, and the ‘pride construct’ are both essential towards giving us a more egalitarean society, a true Republic, and a better society. The pride construct and the drink problem are only preserving the elite.

  2. Le Nabis ( hebrew for The Prophets )

    My office looks onto a fantastic park and in there is a childrens playgound .I can see the kids parents help their young ones ready themselves at the top of the slides while at the same time the parents are reassuring them to relax and remain calm and that everything will be ok ………………only after they reach ‘the bottom’.

    The kids sometimes say ‘can I get off half way down if I want ‘ and the parents say ‘you will be alright …after you reach the bottom ‘.The height at the top in the eyes of the kids must be a real challenge and the zest and ego to take it on must be exilerating .
    I have noticed in the recent week the ‘economic prophets’ on this Isle promulgating ‘ the new hope ‘ down the road as in a few years or some time denominated mantra.

    I have also noticed them propagate a new time clock that shows that we are after the anger stage and have already started the recovery programme

    If we are to be honest with ourselves and that includes most of the contributors and lurkers here I believe we are just witnessing the end of the denial stage and sometime soon the anger will will arrive .
    There is a long journey after that and at a cost that has not yet been quantified .We cannot recover until only ‘AFTER we reach the bottom’ .A week is a long time in politics .What must be more than a year be in economics?

    In the evolution of man species hopped accross and some dominated and killed the others .The Irish Rugby Team is a good example of a proxy team made up of the Munster Players that make the difference on the field .Who will represent The Munster Team in the new Irish Business Strategy Success in the near future ?Might it continue to be ‘ the colony of south dublin’ ?

    In this article the Gladiator comes to mind of the contest between Accountancy ( law of prudence and management of wealth ) and Economics ( Law of Supply and Demand and Club Membership ).I believe they are intrinsically dependent on each other .Before true recovery can commence in the real sense our Laws must be completely updated that will kill the adversatorial cult and release the quest for ‘the truth’.

    On the same site where the playground is there is a large high tree and this year it has over twenty nests perched on top higher than ever before .This is where I see hope in good things to come and they are – good weather this year and – strong fertility in the air .

    • Philip

      John, Best comment to date from you. Very compatible with Deco’s comment as well. Yup, I think the effects of 2-3 months missing salary is going to start to hit. I really feel the sugary optimism I saw in a few newspapers over the weekend was very insensitive and suggested a lot of delusional output from everyone en masse. If they think this will sweeten people up enough to accept cuts and tax hikes without a whimper, they’d better think again. Denial is over. I just hope we can manage the anger bit.

  3. Johnny Dunne

    “When investment opportunities present themselves again in Ireland, money will flow back into the country.”

    This will only happen when ‘external’ export and ‘internal’ consumer demand returns to the market. There is no point in doubling our national debt in one year because the Dept of Finance think all will be OK soon. The economy will not turn around after the world wide recession is over unless we implement policies which make ireland the most attractive place to do business – lower taxes is the only option to stimulate economic activity where we have an uncompetitive currency. Public expensidture should be focused on stimulating this economy for example R&D spend on commercialisation of other countries research instead of wasting cash. if we focus on creating 50k new jobs – the rest will follow !

    David, I would be wary of ‘borrowing out of recession’. Throughout the ‘boom’ we had about €37 billion in national debt from the mid 1980′s, we never paid it down just looked lower as a % of our credit and MNC inflated GDP. Shouldn’t rely on future generations paying back massive borrowings just beacuse we don’t address the issues now !

  4. Deco

    Of course the hilarious thing about the current Irish rugby team is that it is the most meritocratic Irish rugby team in history.

    It is full of Limerick hardmen, Kerry farmers, hardnosed Northerners, and one Northsider. The rest it seems are ex-gaelic footballers and ex-soccer players.

    The best thing that happened to the Irish rugby team was that it became meritocratic. There used to be a time when it was two players from a few clubs on South East Dublin, a few Northerners who knew something about how to play the game properly, and a few token culchies for muscle and brawn. Putting the team together was an equation. It changed with the emergence of increasing levels of meritocracy, which probably

    Maybe we should put Paul O’Connell running the HSE ? I imagine he would know what to do with all the layers of besuited schemers and overpaid consultants. We could replace two layers of politically appointed titleholders with POC. That should put an end to a lot of “ambiguity” about who is responsible for doing what in the HSE.

    • Dilly

      My Dad played for Leinster back in the 60′s, He said that, to get on to the Ireland team, you had to wait for one of them to die.

    • G

      Agree with this, once the ‘game’ is opened up people of ability rather than those with ‘famous’ fathers or the right connections emerge. It was interesting to watch one Munster match when the commentator described the ‘find of the season’ as a player from Moyross – how times have changed!

      I never thought of rugby as a catalyst for social change but the old rulebook (thank Christ) has gone out the window with this crisis, it may lead to a better Ireland and not just the cliché version that FF pedalled!!! I sincerely hope it does because as Irish rugby has proved, when we give people from all backgrounds a chance, we all benefit.

      Time to throw off the old colonial/post-colonial bullshit way of doing things, give people a chance and let people cease the stigmatising of those from so called ‘disadvantaged background’s', of people who have often proven themselves more capable and with more hunger than those who seek to keep them in place!!

  5. gadfly55

    Admit it, you believe in Santa Claus and the tooth fairy, and the pot of gold in the bog, and metal detectors have a better chance of finding the solution to our problems than believing cycles. Well, put this in your pipe, and try entropy as a law of physics. Or Yeats as a law of disintegration in a time of decadence, in The Second Coming, which does not redeem us, but throws us into the Second world war. Anyone with a sense of history, literature and psychology knows that we are going down, down, down, and there is no arising and going now to any credit boom in the sky. Try to forget being an economist, and try to think survival of the litttle people, including big boys who play with inflatable spheroids.

  6. wills

    @David;
    I am reticent to say this but borrowing more in times of a slowdown (and this analysis is about the ponzi debt slave monetary system we all are forced to live in unless we hightail it into the mountains) is barmy. But any solution offered on this is barmy because we are exchanging ideas on how to fix a leak holding a rubber spanner.

    Your ideas proposed assume, 1; the bust was a surprise. are you serious do you really think the paper shufflers behind the scenes thought the boom would never burst. 2; There are other economic models that do not work along a boom and bust trajectory, are we being denied these models now, why..? 3; “the world is hoarding money”,….. so this means we all have net savings then so no debt really exists so why are we in a downturn then…?!! this is rather off the wall comment there…..4; “it is crucial we create inflation”,.. now when i studied economics in UCD if i remember correctly price decreases meant demand increases which means increase in business activity which is the point of economic exchange,…

    ..but here is the confusion…, if one pursues monetary policy as outlined above in Davids article one is de-coupling price from value,
    and in my estimations this is a no no in a free market system that functions for the benefit of all as opposed to a system that exists unto itself to pursue profit for profit sake,… anyhows…

    I do agree with it is daftness to tax hike and slash and burn to fix holes, but we differ as to why… You articulate they are dopes and don’ really get it… I articulate quite the contrary which is the upcoming mini budget specifically well planned gov op to raise ready cash to transfer over to main banks to shore up savers accounts which are empty in order to keep the banks ticking over and out of the bankruptcy courts for reasons im now goin to post..

    • Josey

      Wills,
      in my estimation the reason for the mini-nuke budget is to break the middle class. We are witnessing a new fuedalism, we’ll be left with two classes; 90% working class and 10% or less super rich.

  7. wills

    @David and Bloggers;

    If the mainstreet banks are let go under they will pull the feudal enterprise pyramidal structure it gives the banks give foundation too will collapse in on itself and the parasite ponzi master slave regime will be destroyed.

  8. wills

    @goinghome

    Your post yesterday i suggest providing essential information and real solutions to real problems…. two thumbs up

    • goinghome

      Thanks wills, it would be nice to think these often slightly unconventional finds of ours would be useful to anybody here who can implement practical and beneficial ideas contained in them, and especially to those in leadership positions. (The bright mind of AGMooney is missing in action lately, I notice; he must be due to make his mark again soon.)

      I’ve been reading a book called ‘Blink’ by Malcolm Gladwell, about rapid cognition. The conclusions sometimes seem contradictory but context is everything. The Business Summaries website has uploaded a helpful review, including some points relevant to David’s post, as follows:

      …”Remember that sometimes extra information is not helpful at all. Sometimes too much information confuses rather than helps when finding a solution or making a decision.

      Truly successful decision making relies on a balance between deliberate and instructive thinking. Deliberate thinking is a wonderful tool when you have the luxury of time and a clearly defined task.

      In good decision making, as well as in making snap judgments, less is more. Overloading the decision makers with too much data and information makes decision-making harder and not easier…

      …Executives and decision-makers like market research because it provides certainty. Market research is a score or a prediction that executives can point to if someone asks why he made that decision was made.

      Unfortunately, few realize that in making the most important decisions, there can be no certainty. This is the reason why musician Kenna did badly when he was subjected to market research. His music was new and different, and being new and different is always vulnerable to market research…

      …First impressions vary from one person to another and only people who are experts in their field are able to reliably account for their reactions. These experts can express their first impressions and gut feels more accurately and more extensively.

      It does not mean that the reactions of people outside their areas of passion and experience (i.e. not experts in a particular field) are always wrong. It just means that reactions from non-experts are hard to explain and easily disrupted. ..

      …The ability to extract an enormous amount of meaningful information from the narrowest slice of experience can be done through constant practice, training and expertise.

      To a beginner, an incident may have gone in a blur but this isn’t so. Every movement – every blink – is made up of a series of distinct moving parts. Every one of those parts offers an opportunity for introspection, for intervention, for reform and for correction…”

      The rest is at: http://bizsum.com/trial/2008/Blink.html

      Happy St. Patrick’s Day celebrations!

      • wills

        @goinghome;
        a1 post; invaluable ideas on rational economics and cognition and central to i my humble opinion to new solutions.

      • coldblow

        Goinghome: The attached link (to a recent short article by the Observer’s excellent management editor) gives a different slant and argues that our financial geniuses were the victims of their own (apparent) success – it points out how much seemingly objective and rational decision making is driven by emotions or is not there at all in fact but just instinctive reactions based on pattern recognition.

        http://www.guardian.co.uk/business/2009/jan/25/fred-goodwin-rbs-simon-caulkin

        I posted a chunk of Fromm recently and the following bit is appropriate here, it seems:
        “…In addition to the factors just mentioned there are others which actively tend to confuse whatever is left of the capacity for original thinking in the average adult. With regard to all basic questions of individual and social life, with regard to psychological, economic, political and moral problems, a great sector of our population has just one function — to befog the issues. One kind of smokescreen is the assertion that the problems are too complicated for the average individual to grasp. On the contrary it would seem that many of the basic issues of individual and social life are simple, so simple, in fact, that everyone should be expected to understand them. To let them appear to be so enormously complicated that only a “specialist” can understand them, and he only in his own limited field, actually — and often intentionally — tends to discourage people from trusting their own capacity to think about those problems that really matter. The individual feels helplessly caught in a chaotic mass of data and with pathetic patience waits until the specialists have found out what to do and where to go.”

        I realise I’m more on about the decision making that got us here while you are talking about the thinking needed to get us out of it. Nevertheless it does seem to boil down to one very simple question: how the hell was this nonsense allowed to continue for so long when the dogs in the street/ an intellegent 4-year old/ first year economics student (delete according to taste) could have told you it would all end in disaster?

        Yours (“convulsed in cognitive dissonance”),
        coldblow

  9. paddythepig

    I would appreciate any thoughts on the following article.

    The bond market has initially reacted favourably to quantitative easing from the Bank of England. Is the bond market under-pricing the risks of inflation down the road due to this policy? Or is it correct in adopting it’s somewhat counter-intuitive endorsement of this policy?

    http://www.bloomberg.com/apps/news?pid=20601087&sid=af81EoUv7m24&refer=home

    Opinions?

    Paddy.

    • Tim

      Paddy,

      ““At this point in time, the Fed has judged that buying long-term Treasuries is not the most efficient means of easing financial conditions,”

      I think that this is the most salient point in the article; it highlights precisely what our government is NOT doing.

      The slash and burn/tax and cut policy has GOT to end, because it is losing JOBS.

    • wills

      @paddy;
      my take on it is the fed is obscuring the bond market to maintain a bubble in bonds to keep dollar value up in order for vested interests to sell out paper assets before dollar meltdown in 6 months i predict.

  10. Josey

    Hello fellow patriots, keep up the good work :-)

    I know this may be totaly off topic but I found it very interesting and important;

    http://www.wiseupjournal.com/?p=830

    Slán

  11. coldblow

    Here’s a bit of historical perspective on thinking in the Dept. of Finance (from J.J. Lee’s “Ireland 1912-1985″ pp 563ff):

    “The market for ideas in the Department of Finance was probably the single most important influence, at least as far as policy was concerned, on long-term national socio-economic performance…

    “Other features of the reply shed more light on the Finance concept of ‘judicial and scientific’ analysis. When it denounces the suggestion of devaluation, for instance, it is mainly on the grounds that it is ‘a proposal to destroy blindly, and without advertance to justice, right, title or expediency, assets which are in the rightful ownership of large numbers, perhaps even the majority our citizens’. Devaluation was ‘an expedient of so desparate a character that it ought not even to be considered as a possibility unless the need for it were inescapable and unless that need were demonstrated by incontrovertible argument based upon hard facts’. It is indeed probable that devaluaion made no sense in the Irish circumstances of 1938. However, as many countries, including Britain, had devalued during the 1930s without catastrophic consequences, this was but one more dogma masquerading as science. Devaluation was a desperate expedient — but emigration was not. Finance confined its concern about the emigration that had resumed a few years before to the alleged departure of the non-Catholic population, whose presence conferred such disproportionate benefits on the country.

    “The Finance hero was Hjalmar Schacht. On Schacht’s authority, Finance concluded that ‘the work provision schemes’ of the United States and France were ‘unsuccessful’. Schacht is quoted three times to the effect that credit creation is a bad thing. Finance denounced the New Deal on the grounds that ‘the whole economic machine tends continually to run downhill to a standstill’ in the United States, proving ‘the utter uselessness of Roosevelt’s policy’. The New Deal was indeed far from being a resounding economic success. It was also far from being a resounding economic failure. To refer to the ‘utter uselessness’ of Roosevelt’s policies without deigning to provide any evidence was to make the wish the father of the thought.

    “…The Finance mind shared many of the assumptions of George O’Brien, who devoutly believed that he represented an “intellectual” approach to Irish economic problems in contrast to the “emotional” approach of his critics… O’Brien was correct to insist on the need for sanity. He himself, as well as Finance on occasion, stood courageously against irresponsible proposals. But his assumption that there was only one sanity, and that the only alternative was fanaticism, seemed to elevate economics to a scientific status independent of time and place… It implies a static rather than a developmental approach to economics, a reliance on eternally valid economic “laws” rather than on the potential for change in specific historical circumstances… And O’Brien deluded himself if he believed he ignored “the social consequences” of policy. Finance certainly did not. It had a highly partisan social perspective… …disturbing lack of perspective… …shallow understanding of Irish demographic history. Even more noteworthy is the failure of Finance to discern the emotional basis of its own proclaimed rationality.

    “While the Finance use of evidence must have raised a few eyebrows, it would be quite unhistorical to call Finance officials, with James Dillon in 1950, “the ‘con men’ par excellence of recent times”. Precisely because Finance was a seething cauldron of emotion, Finance men were not conscious fakirs. They passionately believed in their mission to save Ireland from profligacy. Behind the facade of bureaucratic detachment surged waves of paranoia. The Finance approach was more doctrinal than intellectual, more visceral than cerebral. The Finance mind was a repository of revealed truth. One is constantly struck by the failure of Finance memoranda to either systematic historical or systematic comparative reasoning. The arguments instead tend to descend from dogma. Here were no ‘scientific’ physicians and surgeons. Here were crusaders for truth, valiantly defending the ramparts of rectitude against the assaults of the unholy and the unclean.

    “… Not only did Finance feel little need for enlightenment. It felt equally little need for information. Early in the war it demanded that the statistics section of Industry and Commerce, the main source of national economic statistics, be reduced in scale…”

    And here’s a bit about ideas in Irish business, just for the fun of it:

    “If the public sector provided only a limited demand for ideas, the private sector offered an even more exiguous market. Most Irish businessmen were simply not interested in ideas. Indigenous industry consisted overwhelmingly of small firms enjoying a captive domestic market and enduring few competitive pressures. They were not, in this respect, very different from government departments or university departments. They were small, sheltered, and rarely obliged to cope with the threat of competition. When the threat materialised in the 1960s, their instinctive response was to seek subsidisation and protection through the “grants” economy, rather than face the challenge of the market. The voice might be the voice of the market, but the hands were the hands of politics.

    The Irish Management Institute (IMI), strove to change this attitude after 1953. Supply ran well ahead of demand. A long-serving former director of IMI, Ivor Kenny, could detect as late as 1984 ‘a suspicion of the intellectual process and the value of ideas’ among businessmen. Kenny attributes this primarily to the pervasive anti-intellectualism of Irish culture. Even this may be too generous. Much of the suspicion may be more sub-intellectual than anti-intellectual. Anti-intellectualism is too intellectually demanding…”

    • VincentH

      JJ Lee also points out that there was an active policy to force migration. A policy which was repeated by the Bishops with the exception of McQuaid, now there was something I would not have believed had I not read the Bowman book of his papers.
      But what none of them pointed out with any real strength, the real active and ongoing input from Whitehall. All very well the mention of the sterling area, but love a duck, the relationship was near on the same as KildareSt to the County Councils. Dublin could not pick her nose without sanction, if there was money involved.

      • coldblow

        As it’s a bit quiet here I’ve taken the liberty of using Vincent’s reply taking up the emigration reference in the first quote (and this would be the preferred if unstated way out of the present crisis for some) as a pretext for another:

        “Emigration was not unique to Ireland. But the type of emigration, the scale of emigration, and the impact of emigration were. In no other European country was emigration so essential a prerequisite for the preservation of the nature of the society. The interests of the possessing classes came to pivot crucially around emigration. But as the spread of emigration during the nineteenth century chanced to coincide with the growth of national political consciousness, with emphasis on the family as the source of social virtue in society, and with the decline of population, it came to be felt as a shaming indictment. But indictment of what? British malevolence, or landlord tyranny, could be conveniently, and to some extent correctly, blamed for the dispersion of families in the immediate aftermath of the famine. But that explanation began to lose force after 1880 once the land legislation put the axe to the root of landlordism. And it became wholly untenable after independence. Not even the eager hibernian imagination was prepared to adopt so robustly simple an interpretation as that of the TD who felt able to assert “without fear of contradiction” that “The main cause of that emigration, of all the poverty, and of anything else that is wrong politically, nationally and economically with the country is due to the partition of Ireland”. No other society found itself obliged to rationalise so remorselessly the subversion of the national and family ideals inherent in the emigration “solution” to the problem of social structure.

        “The psychic impact of emigration on those who stayed, the price paid by the society for the subterfuge to which it had to resort to preserve its self-respect while scattering its children has only begun to be explored… It would be unnatural for any society enduring the traumas of nineteenth-century Ireland, including not only colonisation, but famine, depopulation, language loss and religious revival, not to have developed protective layers of ambiguity. Yet paradoxically this was simultaneously a society that had apparently come close to social and equilibrium by 1900, however precariously poised that equilibrium might be. The complacent bourgeoisie – haute, moyenne, petit or lumpen according to social and semantic taste — that emerged as the ultimate beneficiary of the post-famine settlement, had no urge to linger unduly on the implications of emigration. It naturally turned to the manufacture of ideologies of communal solidarity that shifted the onus of responsibility from itself to somebody — anybody — else. When the British government and the landlords had largely served their purpose in this regard, preachers, publicans and journalists began purporting to find the anxiety of emigrants, and especially of girls, to leave Ireland, increasingly incomprehensible. By the early twentieth-century they had all but completed their communal self-portrait of a simple, natural, warm, homogenous society, a veritable miracle of human and Christian harmony.”

        “…The mandarins, the bankers and the gombeen men may as well have lived in a different country from their victims. However blandly they might rationalise the experience that relieved the pressure on themselves to improve their performance, however opportunistically they might blame the victim for their plight, however frequently the emigrants might return as travel conditions improved, indeed however individually liberating emigration may in fact have proven (in itself, a sad reflection on the “imponderable values and liberties of our traditional society”), the emigration figures for the forties and fifties stand as a permanent commentary on the collective calibre of the possessing classes. In one respect only did they display true talent. So effectively did they master the techniques of indoctrination that many of the victims would continue to cherish the values responsible for their own plight.”

        And seeing as yesterday was our national day, here’s Lee’s take on the Irish self image which ties in with the above (worth an extended quote some time):
        “The self-image of “traditional” Ireland was, it may be suggested, characterised less by hypocrisy than by self-deception on a heroic scale. It was this that gave it such enormous emotional power, and could achieve such resonance even among those who might be objectively regarded as the victims… The self-portrait of traditional Ireland was a work of art, a triumph of imagination, will power and technique over refractory raw material… Traditional Ireland worshipped its authorised self-portrait with an idolatrous fervour. All peoples need their public myths. But all public myths are not equally mythical. Not all feel the same need to disguise so much of the truth as had the traditional Irish one.”

        Aren’t we all great! I thought of it yesterday as the local parade passed by: the Fire Service, Civil Defence, local GAA clubs, neighbourhood watch, vintage cars etc. Humming “For God and St Patrick and our native home” (as we used to sing in our London primary school). Then a half-finished float screaming “100% mortgages!” (builders and estate agents) and bringing up the rear, marching smartly four abreast, an endless column stretching back up the town as far as the eye could see, under the banner: “The Unemployed”…

    • Tim

      coldblow, I recommend Newman’s “The Idea of a University”.

      It is available here:

      http://www.newmanreader.org/works/idea/

      ….. and explains my view of education.

      We uswd to be great.

      • Deco

        Tim – I tried to read this. Some of it is quite heavy….
        But it is really positive to see that there are people in this country who get really grounded in their professional knowledge base.

        Hopefully, we will someday have an Education Minister in this country, who will be sufficiently intellectually grounded. And the same in other the other departments.

    • Deco

      “Much of the suspicion may be more sub-intellectual than anti-intellectual. Anti-intellectualism is too intellectually demanding”

      That is a very valid point. Kunstler talks about how the coach potatoes sit there listening to Pop-Idol (X-Factor in Ireland) carried along on a an emotional rollercoaster. People are conditioned to a conformity of sub-intellectualism. The people are being conformed to ‘outsource’ critical thinking to media commentators so that it becomes dumbed down.

  12. wills

    David;

    Could i also add on liquidity, best it flows from savings in preference to more borrowing.

  13. wills

    @tim;

    Best of luck with the solar heating…

    • Tim

      wills, Cheers! I am delighted!

      NOT paying the ESB crooks for hot water anymore (though, they will probably try to CHARGE me, anyway, so I will have to fight them);

      NOT paying VAT on the esb charge for hot water – WHAT is the “value-added”, again? Sorry, ….. I did not hear an answer, …..???

      • Josey

        Tim,
        I was thinking of installing a solar system. I’d love to get off the grid totally, I’ve heard of some people elsewhere in the world actually selling back to the grid…wow!!! Have you actually done it? Any info would be much appreciated.

        Thanks :-)

        • Tim

          Josey, (are you a different person from “josie”, with whom I have communicated before?)

          I have installed solar hot water, only. From my research on current technologies, photo-voltaic solar panels (which generate electricity stored in a battery, for light-bulb power, etc) are not very efficient yet; wind-turbines are too expensive (€28,000) for one large enough – 15m – to run a house, without guarantee to run a cooker – so that was not a runner for me.

          I am waiting for the tech to improve and looking at rainwater-collection as well. If and when it seems to be economically viable, I will do it and post here about it; For now, the solar tubes are doing it for me; and I recommend them. Free hot water for a family of 4 people for under 5 grand supplied and installed. Good job and “Y” the ESB.

          • Josey

            Tim,
            yes the one and the same “Josey/ Josie….taken from the film Garage. Thanks for the info, I’m doing some research on powering a house with wind and solar, visited some americn sites which seem very encouraging. There was an online book someone recommended here once but I can’t remember the name.

  14. wills

    @bloggers;

    Noticed over weekend across media we are all going to be saved by a tsunami of cash waiting in the wings… Sometimes i do wonder…., the loo laas in charge think we are all living in telly tubby land…. soaking all this nonsense up….., and bernanke on cbs telling the americans the trillion dollars bailout was needed to put out the fires….. and aig are taking 100 million bonus other day for hard work leaving obama to come out today in contempt for it,,,, the list goes on but this is a forum on networking…..

  15. Tim

    DMcW, I like this one – go for it!

    The “Tax ‘n’ Cut” has gotta stop!

  16. A very late good evening to all.

    I notice 86.6% of those who’ve commented so far on this thread are anonymous.

    Tim Nelligan assures me that you’ll be in trouble if your stand up in public and use your proper name, that many have suffered in the past.

    86.6% : I wonder what this says about Irish culture today? I wonder what it says about the type of people who blog their thoughts about the future of Ireland?

    And what’s so different about Malcolm McClure & Tim Nelligan?

    Tomorrow I’ll read what David had to say. All I’ve done is compile a list of anonymous people. Too tired to contribute more.

    • VincentH

      Paul, would you ever give the poor horse a rest.

      I could not care less, names or no-names. That is not the point. Many if not all come to this blog to find out ‘stuff’. To ask, is it really like this or that. Or am I correct, did I actually hear this.
      And your 86.6% says absolutely nothing about Irish Culture, because culture, Irish or otherwise has nothing to do with it.

    • Dilly

      Paul,

      This is the internet, you should be very careful how much information you give out to a global network of complete strangers. People sometimes get carried away and forget this fact.

  17. To be fair, when I began blogging in November 2005, I kept my identity secret because my wife has a conventional job and I didn’t want to embarrass her into having to explain my point of view.

    Also I got attached to Omaniblog, came to like the look of it.

    It’s been the severity of the current crisis more than anything else that’s made me want to be clear about who I am, and where I can be found – in case anyone wishes to link with me and make an alliance for change.

    I won’t mention this issue again until just before the budget. By then I expect I’ll be doing all my writing for the lurkers.

    • @ Paul , hiding who you are is silly, yet when I done a rearch for your company I can’t find you either …don’t worry your blog won’t bring down our current political mass

      • Ruairi

        I wholeheartedly disagree with the sentiments being expressed here bout full identity disclosure.

        In my view, it is foolhardy to reveal your identity unless required to do so. At any rate, we have all registered with the webmaster in order to blog here. Should anyone in government or military intelligence wish to uncover our identities, that is easily done.

        But Paul, why should anyone depending on the State in any way (most of us) voluntarily disclose their identity? For what purpose? And risk having delays in processing of various matters such as children’s benefit, unemployment benefits, unexpected tax audits etc etc. With the level of badness inherent in our social and civil service systems (research ho weasy its been for ANYONE in Revenue to get full status reports on ANYONE and then leak them…..), why would a perceptive soul voluntarily drop their guard. Richard Branson, that wily old Saxon fox ;-) often advises decision-makers to ‘limit the downside’.

        Some may wish to link via website and via warts n all identity disclosure. But when the key executive whistleblower, who shone a light on AIB overchargin in 2002, was let go / fired (revealed today in shocking Dáil committee hearings), then who in their right mind would stand up publicly to banksters or political mafia without first checking whether they were standing on a large sheet of clear plastic. . . . (only the gangster-lovers among you will readily understand such cleanliness among thieves.

  18. Alan42

    Ireland must hit rock bottom and it must become an economic wasteland . If not we will never get to the root of our problems . We elect bad government , bad opposition and we expect even less . Lets face it we accept corruption in our political leaders . We knew full well that they were recieving ‘ donations ‘ from developers . But we never asked why . It was so they could build houses on flood plains filled in with pyrite so that they could sell them to us at inflated prices . In 1999 I sat in casuality in the Mater hospital . It was third world conditions . I sat beside a guy with a broken leg who had been waiting 26 hours . How can you have a boom when something as basic as a hospital is in crisis ? Outside the media was screaming about the ‘ Celtic Tiger ‘ and I remember seeing a property magazine ( I wonder is it still going ? ) and on the cover was a couple who were off to Budapest to make a killing on a apartment . They scoffed at the idea that they would be pricing the locals out of the market . Basically they did not care such was their infectious greed . I thought that they were crazy to go to a country that had just emerged from decades of Communism and did business in a foreign language to buy an apartment in a market that they knew nothing about . People went wild with credit . You don’t need to be an economist or educated to third level to know that this is just crazy . It is basic housekeeping . You must spend less than you take in . It is a simple rule of households , business and government . Yet this government spent big on the back of something as unreliable as building . Building is one of the first things to go in a downturn , even the mildest of downturns . This government had at least 10 years of high tax returns and yet they did not put one cent aside for a rainy day . Instead they just spent more and bloated their public service . We have one of the worst governments in the world . They spent months stuffing the unopened bills under the bed and responded to a massive fall in tax revenues with a pension levy that looks like it was worked out on the back of a cigarette packet in a taxi after a drunken night in the Dail bar . Now we are looking for ideas . Whats the point ? We could become the hub of renewable energy and Sean and Mary would rush to the bank to get a loan to buy a wind farm in Albania if they thought they could turn a quick profit to buy a bigger SUV . Basically whatever ideas we come up with are doomed as long as we keep on electing the same low quality governments .We had a situation where we were putting our economic wellbeing in the hands of a man who wonders around turning his wages into Sterling for no good reason . And we wonder why we are the basket case of Europe . We are also a country with ‘ Celebrity Economists ‘ No offence but would that not indicate that we are just as addicted to quick fixes as we are to credit ? There will be not one single idea worth a jot if we don’t take a long hard look at ourselves and change the very foundations on which this state is built on .

    • Dilly

      I was speaking with a few of these people who rushed out to buy property in places they I couldn’t even point to on a map. They are being slowly bled dry by these properties, and they are stressed to bits. I think we will start to see ordinary Joe Soaps filing for bankruptcy over the next 12 months. Some will become suicidal, but of course, no one wants to know you when you are like that, especially the Church, it is swept under the carpet and not talked about.

  19. I forgot to say that another reason – and actually the main one – is that in 2005, being new to Ireland, I wanted to build up my business (OMani & Co) and I took to blogging as ‘omaniblog’ in order to become more widely known and develop my brand.

  20. wills

    @bloggers;
    on vincent browne last night george hooke played a blinder…, “it is now clear that Ireland was not a live economy for the last 15 years” plainspeak straight to camera. (*i’m not a hook fan)

  21. wills

    @tim;
    You might discover a vat charge on sunlight, mmm how to measure sunlight mmm ultraviolet ray units no, mmm, frequency hertz consumption mm no too much leg work ,… mmm

    • Tim

      wills, I’m sure someone is trying desperately do find a way of taxing it – look at the VAT on the equipment, for instance: €547 vat on an installation attracting what gov. spin calls a “grant” of €600; so, …… the grant is really €53, then ….? Spin!

      While we’re at it, wills, I urge you and everyone else here to scrutinise your ESB bills: I see largescale thievery hoing on here with millions of households overcharged by “estimated meter-readings” and meters that are rigged to run too fast.

      We cannot recover from the economic crisis while leaving schemers like this in charge of essential utilities, using them to rob the people.

  22. wills

    http://www.project-syndicate.org/commentary/gusenbauer2/English

    @bloggers;

    Check out above link for overview on the unfolding narratives.

    • Tim

      wills, excellent article! I particularly like this bit, as a lesson for the Irish government:

      “There is a wide difference between pragmatic and opportunistic politics, and governments had better keep this distinction in mind in the months and years ahead.”

      All our politics seems to be opportunistic here, with no pragmatism at all.

      We have to stop being “sheeple” and INSTRUCT those we elect to work on our behalf.

  23. Original-Ed

    David, I agree that this tax and cut solution will tip us into to freefall – it’s back to the eighties, tax, tax and tax again until the economy is in ruins. What really scares me, is the fact that our highly qualified civil servants went along with and actively promoted the expansion of their empires and increases in their remuneration on the back of a housing bubble. These professionals have overseen what ,in effect, was an act of economic suicide orchestrated by the government.
    This is going to spiral out of control, just like it did in the eighties and all we can do is watch as the country grinds to a halt.
    Churchill’s take on taxation still stands “ we contend that for a nation to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle”

    • Tim

      Original-Ed, NO! We must prevail; you are 100% correct, of course, and that is why we must INSTRUCT our elected TDs to stop this “Tax and Cut” policy – we simply must.

      Put pressure on them; if you use email, bombard them; if you have a fax machine, bombard them; put their phone number on “speed-dial” on your own phone and USE it!

      This is the ONLY thing these people respond to: WEIGHT of people-power; a hand-full of activists make no difference.

      Here are the links to all of your elected politicians:

      Budget 2009

      Lobby Your Representatives Against Education Cuts!

      The ASTI is urging all members to contact their local TDs, Councillors, and candidates for the 2009 Local and European Elections to inform them of the direct effects of budget cuts on their schools and students. It is important to make representatives aware of exactly how the budget cuts will impact on individual schools in their constituencies.

      Give specific examples of:

      - Teachers lost
      - Larger class sizes
      - Reduced subject choice
      - Cuts in grants and supports for students, programmes and subjects
      - Withdrawal of substitution cover

      Local and European elections will take place in 2009. Ensure that your representatives are aware of the anger among teachers and parents at the impact of cuts on schools and on education.

      Remind your representatives that schools are at the heart of communities; damage a school and you damage the community it serves. Ask what they propose to do to reverse the cuts to education and to support their communities.

      Click on the links below to find contact details for your local representatives.

      Representatives Contact Details

      Fianna Fail TDs & Senators

      Green Party TDs & Senators

      Progressive Democrats TDs & Senators

      Fine Gael TDs & Senators

      Labour TDs & Senators (Map with Links)

      Independent TDs & Senators

      Sinn Fein TDs & Senators

      County Council Contacts

  24. goinghome

    On our national feast day, this spoof Tourist Guide, called “Ireland for beginners” that has been doing the rounds over the years, gives us a little laugh at ourselves…

    – Pub etiquette:
    The crucial thing here is the “round” system, in which each participant takes turns to shout an order. To the outsider, this may appear casual; you will not necessarily be told it’s your round and other participants may appear only too happy to substitute for you. But make no mistake, your failure to “put your hand in your pocket” will be noticed. People will mention it the moment you leave the room. The reputation will follow you to the grave, whereafter it will attach to your offspring and possibly theirs as well. In some cases, it may become permanently enshrined in a family nickname.

    Woolly jumpers:
    Ireland produces vast quantities of woollen knitwear and, under a US/Irish trade agreement, American visitors may not return to the States without a minimum of two sweaters, of which one at least must be predominantly green. Airline staff may check that you have the required documentation before you are allowed to disembark. Note: under no circumstances will you see an Irish person wearing a woollen jumper. These jumpers are worn solely by Americans to identify them to muggers, thieves and knackers.

    Irish people and the weather:
    It is often said that the Irish are a Mediterranean people who only come into their own when the sun shines on consecutive days (which it last did around the time of St Patrick). For this reason, Irish people dress for conditions in Palermo rather than Dublin; and it is not unusual in March to see young people sipping cool beer outside city pubs and cafes, enjoying the air and the soft caress of hailstones on their skin. The Irish attitude to weather is the ultimate triumph of optimism over experience: Every time it rains, we look up at the sky and are shocked and betrayed. Then we go out and buy a new umbrella.

    Time-keeping:
    Ireland has two time-zones: (1) Greenwich Mean Time and (2) “local” time. Local time can be anything between ten minutes and three days behind GMT, depending on the position of the earth and the whereabouts of the Man with the keys to the hall. Again, the Irish concept of time has been influenced by the thinking of 20th century physicists, who hold that it can only be measured by reference to another body and can even be affected by factors like acceleration. For instance, a policeman entering a licensed premises in rural Ireland late at night is a good example of another body from whom it can be reliably inferred that it is fact closing time. When this happens, acceleration is the advised option. Shockingly, the relativity argument is still not accepted as a valid defence in the Irish courts.

    Irish Dancing:
    There are two main kinds of Irish dancing: (1) Riverdance, which is now simultaneously running in every major city in the world except Ulan Bator and which some economists believe is responsible for the Irish economic boom; and (2) real Irish dancing, in which men do not wear Frilly blouses and you still may not express yourself, except in a written note to the adjudicators.

    The wearing of the green:
    Strangely enough, Irish people tend to wear everything except green, which is associated with too many national tragedies, including 1798, the Famine and the current Irish soccer team. It’s possible that green just doesn’t suit the Irish skin colour, which is generally pale blue (see Weather).

    Gaelic games:
    St Patrick’s Day brings the climax of the club championships in Gaelic games, which combine elements of the American sports of gridiron and baseball but are played with an intensity more associated with Mafia turf wars. The two main games are “football” and “hurling”, the chief difference being that in football, the fights are unarmed. There is also “camogie” which is like hurling, except that in fights the hair may be pulled as well. Hurling, “the fastest game on earth”, was best described by a Cork man to an American tourist when he said “its like a cross between ice hockey and murder”

    Schools rugby:
    St Patrick’s Day also brings the finals in schools rugby, a game based around the skills of wrestling, kicking, gouging, ear-biting, and assaults on other vulnerable body parts. The game is much prized in Ireland’s better schools, where it’s seen as an ideal grounding for careers in business and the law.

    Fauna:
    It is well-known that St Patrick banished the snakes from Ireland. Less publicised is that he also banished kangaroos, polar bears and Vietnamese pot-bellied pigs, all of which were regarded as nuisances by the early Irish Christians.

    Signposting:
    In most countries, road signs are used to help motorists get from one place to another. In Ireland, it’s not so simple. Signposting here is heavily influenced by Einstein’s theories (either that or the other way round) of place/time, and works on the basis that there is no fixed reference point in the universe, or not west of Mullingar anyway. Instead, location and distance may be different for every observer and, frequently, for neighbouring road-signs.

    Language:
    Ireland is officially bilingual, a fact which is reflected in the road-signs. This allows you to get lost in both Irish and English.

    Clothes:
    Visitors to Ireland in mid-March often ask: What clothes should I bring?

    The answer is: All of them!

    Religion:
    Ireland remains a deeply religious country, with the two main denominations being “us” and “them”. In the unlikely event you are asked which group you belong to, the correct answer is: “I’m an atheist, thank God”. Then change the subject.

  25. St Patrick’s day – have you been watching many americans talk on US channels in gaelic it’s amazing today .Here is what they wrote :

    “The Irish banks,” writes a reader from the Emerald Isle, “were not brought down by subprime lending (and their ugly sisters, the derivatives that were spun off those loans), but by reckless lending to property developers AND delusional, greedy home buyers who didn’t just borrow to build and buy in Ireland during the so-called Celtic Tiger era, but all over the world. The Irish were actually the biggest property investors in the U.K. and Europe by 2005 because we sucked up the bank-spin that we were the second richest people in the world (after the Japanese — ha) because of our huge property-based asset wealth. (Ha, ha.)

    “Now the bubble is just a bitter memory and house prices have crashed, the exchequer finances have been decimated (our national budget is 55 billion euro; tax returns are down 20 billion euro!) and the Irish government and the European Central Bank are propping up the bank failures by nationalizing and recapitalizing them.

    “People have a notion of how costly to future generations this is going to be; and now they are also thinking that despite these efforts, the banks could still fail. Shareholders have already been wiped out… but what about our savings, they ask? All the Irish-owned bank deposits are already covered by a 100% state guarantee and the non-Irish ones have a 100,000 euro guarantee.

    “Personally, I doubt if the guarantee is worth the paper it’s written on… we don’t have a printing press anymore in Ireland. Instead, euros are printed in Frankfurt by the European Central Bank on behalf of all the EU member states. The cost of issuing Irish bonds is still on the rise.

    “Finally, here’s a laugh. Our political leadership is so bereft of ideas that the trade unions are the ones producing agendas for change… and the Irish people are desperately hanging on O’Bama’s every inspirational word.”

    Slainte,

    Addison Wiggin

  26. .and some more :

    ye, on this St. Patty’s Day, the Emerald Isle is suffering the mother of all hangovers: the embodiment of a boom gone bust.

    With official unemployment now over 10%, GDP shrinking at a 6.5% clip, a proper housing crash and a 10% federal budget shortfall, Ireland has seen its glory days crumble into one of the eurozone’s most beaten-down economies.

    Ratings agencies are on the verge of downgrading Ireland’s sovereign debt, which will assuredly make the whole matter even grimmer.

    The opening joke is so pointed, Irish Finance Minister Brian Lenihan is now on a global PR tour to help rekindle the world’s love of shamrocks and Guinness. Despite Lenihan’s denials, many expect the IMF to swoop in and become Ireland’s banker of last resort. A reader pins the blame squarely on the leprechaun, below.

  27. According to a graph I am reading comparing Iceland and Ireland and the 6 months snooze clock tic tic …..we are down the sink in april 2009 alongside Iceland

    • Mother of Three

      April 2009 just about right. The IMF will be the only way to get us back on track. First thing being to dispense with all those grossly overpaid politians, close the Senate, the tribunals, cut back staffing by 30%. Pretty much the same as most small businesses have been doing over the past year. With sales down over 40% all costs have to be reduced to survive, even then it does not look good, and thats in my own small enterprise. Question: What are all the bank staff doing?? There are over 1700 in Anglo Irish Bank alone. I have not read of any redundancies except Ulster bank. What are they doing in AIB and BOI? They are definately not lending money?

  28. Tim

    Folks, I tried to post them all seperately for you, but it will not “submit” on this site. Try this link on the asti website:

    http://www.asti.ie/politicians.htm

    All of the links are there to EVERY politician in the country – find YOURS and BLAST them with all the communication you can before the new budget.

    Kind regards to all,
    Tim.

    • Robert

      Presumably Tim you are referring only to TDs of Fianna Fail and the Green Party – that is, the parties who voted to entirely dismantle our education sector on behalf of the likes of Seanie Fitz.

      • Tim

        Robert, yes. But he other parties are “in on it”.

        • Tim

          Robert, please contact them. We are on the same side, though you think we are not.

        • Tim

          Robert, In fact, “NO”.

          I have supplied to the great people on this site, the contact details of EVERY politician in the country, of everfy party, of every “HUE”.

          Let people make of that, what they want. I have supplied the information.

          People may choose to do nothing with it; that is up to them.

          But, IF they do not use it now, they will have a hard time, after the budget, explaining WHY they did not use it.

          All I can do is GIVE the information.

          I am trying, here!

  29. Philip

    I liked the Sub-Intellectual slant taken by Deco as one of the causes for the problems we have in our institutions.

    I wonder if this could explain the poverty that exists in our planning for things like roads, utilities etc. For that last 4 decades,I have been looking at roads dug up and re dug up for expansion by one utility after another with no hint of cooperation, or planning ahead to a) reduce the frequency of roadworks and b) reduce costs and c) speed provision of expansion of services. I was chatting to a guy from one of the road construction companies working for one of our esteemed semistates. They suggested that laying twice the amount of duct capacity while a few percent more costly would be more than pay for itself within 2-3 years by reduced need to retrench. Answer: Ah sure, this is the way it is always done and it would be too much trouble to change it now. -> We Tax and Cut because that’s the way it was always done…

    One personal observation of my own is the complete lack of systems thinking among our ruling elite. By systems, I mean the ability to think across silos of speciality to try and come up with an overall more elegant and cost effective solution. Most of our European cousins seemed to be very good at this – but not here. Why? Well again, I have witnessed the usual nepotism and cronyisms etc which prevent groups from cooperating – it’s a kind of tribalism really and more worryingly, I have seen this reluctance to even bother entertain alternative ideas – because this was always the way we did it and really it’s too much trouble etc.

    As recently as last year I have listened to a senior enginner in the county council tell me that this recycling “lark” as he called it, would never really work except for the few would were interested in that kind of thing. A passing fad.

    Sub-intellectual does not come near it. More like institutionalsed sloppyness.

    I would like to believe there was some evil mastermind engineering all this nonsense. It would give us a focus that provides some kind of unity. But I think the truth is mundane – we have a culture of contented idiots are running the place with not sense of real self respect or sense of duty.

    • Tim

      Philip, I am afraid, you are RIGHT. We cannot rely on the likes of THEM to help.

      We must rely on eachother – that is why PaulOmahony is so important.

      Don’t you see?

      He wants to help his local community – and he IS doing that.

      It is, PRECISELY, what you have been advocating, all along. You are not-so far-apart, you know?

      • Tim , for the sake of The Children You cannot have Your cake and eat it too !, it is people like you who have placed these fools in charge yet when Philip is knocking your Party , Your agreeing with him …. Make up your mind what side your own , playing the Lad on the fence is not the way forward

        • Josey

          Brendan unfortunately the political structure we have been playing is just a punch and judie show, both arms are connected to the same body. It was all just a distraction to keep us at eachothers throats.

  30. Concept : is it fair to say that aspects of Irish Life were ‘exoteric’ and ‘esoteric ‘ .Could that include that most Irish were denied a right to share real national wealth but now indentured to share the national loss .

  31. jim

    Looking at it from a slightly different perspective,imagine for a minute that its last year,you are asked to invest your time, money,family future etc in this company, call it BB ltd.The obvious questions would be, who’s the CEO,Board of Directors,Financial and Legal advisors.Who’s looking after the Accounts Dept.What plans are there for expansion,what’s their vision for the future,where do they see themselves in 5 years time.What stops and checks are in place to avoid any problems going forward.Are there any Coporate governance issues or conflicts of interest that could cause concern.What’s the track reckord and how qualified are the key people employed by the co.How was previous income invested and what were the resulting gains……….So your in the Boardroom trying to decide,when the door opens and in marches BB ltd to make a formal presentation with a Q&A session to follow.The first thing you hear from BB ltd is that the market has just caught them totally unawares and that their waiting for a Consultants report before their prepared to answer any questions.As your sitting there some guys arrive in an start removing the coffee machine,water cooler,etc and your given an embarrased excuse that there’s no need for concern as these are merely cost cutting measures to make BB ltd.more compettive.Just a few moments later your told that the last remaining chair on which you are sitting comes with a small tax or charge which can be paid at the door on the way out.This measure your told is to help the Co.’s cash flow requirements.So you sit there a little longer,surrounded by BB ltd, people are doing a lot of uneasy shifting about without saying very much.The tension in the room at this stage is becoming a little hard to take.Question is (1).do you wait for the Consultants report or (2). do you high tail it out of there while you still have your shirt on your back…………yep that what I thought.

    • jim

      Time to send in Paul Appleby or who ever and wind up BB ltd in an orderly manner.Otherwise the Director’s run the risk of being dragged before a Tribunal accused of reckless trading,trading while insolvent,gross negligence,price fixing,stock market manipulation,Directors dealings,and so onn and so onn and onn and…………….

  32. David McWilliams,

    What a joy it is to read such clarity and inventiveness. You find wonderful ways of hooking my interest and ground your analysis in uncluttered thinking. Thank you very much.

    I’m off to Spain in the morning and won’t be reading over there. For those of you who find my obsessions intolerable, it’ll be a welcome relief, I suspect.

    It’ll also do me good to take a break for the commentary on here. I’ll have a fresh view when I get back. I won’t bother to catch up then, but if anyone particularly wants to bring their comment to my attention, please use the Facebook Group site.

    Yes

    “Ireland should implement a seven-year fiscal plan now, which would allow us to broaden the tax base gradually with the key notion of delivering proper services and productive infrastructure. Nobody needs to panic…”

    Saturday’s FT reported:

    (1) Equities round the globe surged. Anthony Bolton, fund manager @Fidelity INvestments said “I think there are the first signs of things maybe changing for the better”

    (2) Peter Mandleson said France was better at setting strategic goals and objectives than UK – as in energy and transport

    (3) David Cameron “admitted that his party had failed to do enough to warn about rising levels of corporate and banking debt. The Tories also erred by predicating their policies on the basis of the ‘cosy economic consensus’ that economic growth would continue, he stated.”

    On my blog I’ve asked ‘what’s the worst that could happen?’, and have begun to collect views. I’ve taken the same question around the small housing estate where I live. So far, there is concensus that none of us will be out on the street, homeless; no one electricity will be turned off, and my next door neighbour is starting to grow his own food.

    If you have a roof over your head, food to eat and your mental health intact, you have enough. Anything else is a bonus.

    Of course, we have had a particularly awful shower of politicians. But I expect them to be there when I get back.

    It’s a pity that there are only about 19 individual contributors on here. If it’s going to remain healthy, it’ll need to attract more voices in. Cliques tend to form where …

    In case you’ll like to read my most coherent piece on how to grow your business during a deepening recession, click over on to “www.goodbiz.ie” tomorrow where it should be published.

    If you’re a really really generous person, please let me know what you think of the piece.

    In case you’re wondering, Spain is all work: nothing but looking for new business ideas, sharing them and ensuring a bit of balance in life. And that’s where the golf comes in.

    • Tim

      Paul, relax ….. there are more than 19 people here…….. Don’t worry…….

      …. in fact, STOP worrying, ……. lots of people are here and appreciate your posts. Please stop worryong about who is here and continue your posts about DMcW’s article?

    • Josey

      I’ll have a look at your site Paul. Keep the faith.

  33. The article’s there already @http://goodbiz.ie/

    • @ Paul ‘ Most people will give good advice for Free’ quote from front page of goodbiz ,…yet you want folk to pay You for reading your pages ,…double standards.

  34. Robert

    Vincent Browne, in todays Irish Times, has summed our taxation system up in a nutshell.

    http://www.irishtimes.com/newspaper/opinion/2009/0318/1224243006908.html

    Will the political “establishment” take on his advice?

    Of course they won’t. Those in FF and the Green Party will continue to screw the weakest in society by raising taxes on those who can least afford to pay whilst the rich (many of whom are bankers are property developers) get off scot free.

  35. Malcolm McClure

    These days, we must grasp and treasure every shred of good news appearing on the economic scene: “Mr Cowen said Mr Obama had made it clear he did not consider Ireland as a tax haven.” This seems to indicate that Obama doesn’t intend to call his Irish domiciled MNCs back home again. Our Irish ambassadors over there seem to have done an exceptional job as Cowen was accorded a much warmer reception than Gordon Brown got a couple of weeks ago. If Lenihan follows Vincent Browne’s tax suggestions in the budget, we might even pull through the recession without reverting to soup kitchens.

    • Tim

      Malcolm, DV Lenihan was watching Vincent Browne’s show. I hope, also, that Obama told Cowen that “tax and cut” policies do not work and to try a little stimulus, for a change.

  36. @ Paul and the ’19′ bloggers here ,…Is it me or did the Sun start shining here the day Biffo left to head to The Big Apple ?. .. Could this be our chance of keeping him out ,could we possibly stop him flying back in here ?
    I was down in Waterford yesterday ( outer ring road is taking shape too ! ) and pubs were full and streets were busy Sun was shining and Really when you think about it , it was only a Tuesday.
    Could our problems be as simply solved with some fine weather ?

  37. MK1

    Hi David,

    > we need to have the infrastructure in human capital … Cutting wildly now and raising taxes simultaneously is not the answer.

    I agree that we need to invest in human ‘capital’ – ie: capability, skills, capacity, etc. But this ties in with the ‘cutting’ and raising taxes. The reason why we need to raise taxes is to PREVENT massive cuts in the Public Sector. On a macro-economic level, the prudent thing would be to CUT taxes and cut PS spending by even more, yet “BALANCE” (= borrow a reasonable amount) the ‘books’. But that is impossible to do due to the backlash it would generate and a slashing correction such as that is hard to absorb in any economy in such a quick space of time.

    We dont need to slash and burn, but we do need to cut plus cover for “what is acceptable to spend”.

    Thus, PS workers that are no longer needed should be redeployed in the private sector and provide that human ‘capital’ you correctly call for. Its all about productivity and output, ie: real jobs. Not jobs paid for by government loans. They aren’t real jobs!

    > Ireland’s problem is one of liquidity

    Not only. Yes, there is a global credit bubble which has burst and which is having global ramifications that we are feeling locally, but the exacerbation of that problem locally and its local manifestation has nothing to do with liquidity per se. Its just because we over-binged on the credit. Ireland was (is) not short of funding. Indeed, the country’s public sector debt is increasing and although I dont have the data I would hazard a guess that private sector credit hasnt substantially decreased yet. So its not a case of funding having dissappeared. Its a case of us having to pay for those loans! Thats not illiquidity. Its bill-paying time, thats all.

    Re: previous article and ‘networking’ (LinkedIn) micro-economics. The thing is that the current global credit bubble and the locally (Ireland) exacerbated version of that problem have been macro created and will be helped by macro solutions. The ‘structure’ of Micro economics didnt get us into this problem nor will it get us out of it. Networks will happen one way or the other as will micro economics and they have since time immemorial.

    MK1

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