December 6, 2009

Stuck in an economic cul-de-sac

Posted in Debt · 267 comments ·

Will 2010 be worse than 2009 for Ireland? Most mainstream economists believe that the economy will stabilise next year, and I hope they are right. But there are many reasons to be worried.

The biggest issue is that we are caught in a downward spiral where prices are falling.

On top of this, the already over-valued exchange rate is rising, and so is unemployment. Monetary policy – the mechanism whereby lower interest rates are passed on to the average person – is broken, because the banks are in tatters. As the top brass of AIB made clear during the week, the banks are in serious retrenchment mode – with or without Nama.

This retrenchment is called ‘deleveraging’ in economics. What it means is that, over time, the banks will be taking money out of the economy, not putting it back in. For many people, this probably means the banks calling in their loans now, having been rolling over interest and putting things on the long finger for the past year. All this has changed in the past few weeks, with the banks getting more aggressive.

In the boom, the banks blew their balance sheets by borrowing abroad in the short term to finance their long-term mortgage lending here. The foreign lenders pulled the plug on this short-term financing last year, and the ECB moved to make up the shortfall. But, as evidenced by the wrap on the knuckles Greece received last week, the ECB is now thinking of ways to unwind these loans to delinquent banking systems.

The government must be hoping for another off-balance-sheet deal with the ECB in order to avoid a massive new credit contraction here. For the next 24 months at least, banks will have to cutback lending and raise deposits to make sure that they have enough capital. This means less, not more, credit in the economy.

So we have less credit available and taxes are on the rise, which means that we have less income to spend, even if we had the inclination. And, of course, government spending will be reduced, adding to the overall deflationary impact on the economy. In such an environment, where is economic growth going to come from?

Some commentators are saying that this tough budget – if that is what it turns out to be – will have an effect on the economy and personal spending similar to that of the Ray MacSharry budgets of the 1980s.

By this, they mean that, if the public sees the government getting to grips with the situation, we will conclude that the worst is over and this will prompt us to bring forward spending which we had been postponing because we were afraid things were spinning out of control.

In addition, traditional economics suggest that, when the country is in difficulty, we see huge capital flight, and that this capital is just waiting for the signal to come back in. We can usually gauge this pent-up capital idea because interest rates rise rapidly in a crisis to reflect the capital leaving Ireland.

The problem in this country is that the opposite has occurred. Interest rates have fallen so far in the crisis, but are likely to rise next year because the ECB will tighten rates as Europe recovers, leaving a heavily indebted Ireland in the doldrums.

Therefore, the idea that we will get an interest rate bonus from any government contraction doesn’t stand up to much analysis.

Some balanced budget fetishists argue that, if serious moves are made towards balancing the budgets now, people who have been saving because they are afraid of higher taxes, will see that higher taxes are off the agenda and thus will bring forward spending.

This theory is called ‘expansionary fiscal contraction’ and was first observed in Denmark in the mid-1980s.However, though not particularly persuasive because it has only been witnessed once, it is only likely in the case of massive contraction.

If we had a huge one-off budget, we might achieve the idea that people would say, okay, the problem has been fixed and the risk of future higher taxation has disappeared. But, of course, we have not chosen the massive cuts strategy. Our strategy is going to be based on four years of budget contraction.

So what’s going to be the likely outcome of this policy?

The balance of economic evidence is that Ireland is in a cul-de-sac, and that we are running out of options. We aren’t spending, because we think that prices will be lower tomorrow than today. Why spend today when you will get a better bargain next week or the week after?

This is the classic depression economics dilemma. The more the government cuts now, the more the economy contracts. When you take out a euro of government spending at a time when we’re not spending or investing, the effect is to make the situation worse.

Growth will not re-emerge, and so we get involved in a brutal campaign to grind down wages and prices in an economy that is already weak. The multiplier effect of cutting spending now will exacerbate the problem, and we will try to regain competitiveness by confrontation with the unions.

Already, we have seen just how hard it has been to get concessions from the union side, simply because the unions don’t think it’s fair that their members take the pain of a crisis caused by political and financial errors.

What is it going to be like when it finally dawns on people that, to regain competitiveness, Ireland might need wage cuts of up to 25 per cent to allow us to sell our goods profitably abroad? We are only getting a taster of things to come and, given this government’s inability to make a decision, the prospect for 2010 doesn’t look good.

If we can’t get wages and prices down dramatically, then we will fail the Newry Test. This is whether an item can be bought more cheaply in Newry than it can in Dundalk. Only when we pass the Newry Test will it be possible to suggest that Ireland is becoming competitive. When do you think that will happen? As long as we fail the Newry Test, the business model in the Republic is not working.

So if we can’t or don’t want to do a Ryanair on the economy (by this, I mean get the costs structure right down),then we risk the prospect of becoming a client state of the ECB. The productive marrow of the country will be hollowed out by an overvalued exchange rate and high costs, leaving manufacturing dead in the water.

We will have a large civil service, paid for by transfers from the ECB, because the Nama bonds are redeemable at the ECB and the resulting cash can be used to buy government debt.

While we remain in the euro, we will always have the comfort that they will not entertain a default in Ireland, so we can play games with the EU, cutting a little bit here and there to escape dramatic sanction, but never being serious about anything.

We will retain what remains of the multinational sector and a few big protected industries. Maybe this is the long game for some of the top union members.

This is how a once-vibrant country turns into a vassal state – and, more importantly, this is how the insiders protect themselves against the outsiders in a crisis. All the while, house prices continue to fall, defaults increase across the board, and the prospect of a Nama mark 2 and 3 emerges, facilitated by some other sweetheart deal with the ECB.

You couldn’t make this stuff up!

  1. severelyltd

    The passing of the Lisbon treaty marked the end of ECB support for Ireland. They got what the wanted so why keep giving us money. The only reason I can see for continued support is that Ireland has the ability to bring down the EURO. Our model for success was fundamentally flawed but was supported by the European institutions. This blind approach shows a weakness in Europe and is contagion that can easily spread to other stable countries especially in these times. We are being supported so the plan of economic equilibrium across Europe will not fail. A considerable controlled down gearing of our economy is required however for this to work.
    We are entering a new era where our faith will no longer be controlled by us but will be managed from afar. Let the unions have there say but there is no escaping reality. The downward spiral will continue and the bills will mount up. Until our government starts doing its job there will be no confidence restored and no economic recovery. Not one solid idea has been developed over the last two years, instead we listen to how great our public service is and how lost we would be without them. If they honestly felt that way then they should all put there jobs up for tender so the unemployed could compete for them. What are the chances of that happening?
    On the confidence issue I am way less willing to part with my first time buyers deposit now than I was a year ago because I know that it may be my only ticket out of the nightmarish country that this has become. When people get more upset about a handball than having their grandchildren sold into debt slavery with NAMA it is definitely time to consider ones options.

    • Jonathan Hannon

      Again, this article really makes the point. We are playing some kind of phoney war with the ECB. We all know not to take much heed of economic illiterates that call themselves politicians. We all know the line about nama allowing the banks to get capital flowing into the economy, helping small business and all that rubbish. But David hints at a much bigger play in this whole Nama game and that is the banks more or less directly supporting the government by buying their debt bonds. When the funds have been transfered to the banks and they pay back their short term debt to their european banking masters how much hard cast will be left form the 50 odd billion they will receive and what will they do with it. Think of it form the point of view, they borrow money to lend on the irish market, the people that lend them the money understand risk(or do they). These investments go belly up and the property market collapses. The banks still owe the money. So they irish tax payer then pays off this debt with the help of cheap ECB money. The europeans get all their money back or do they. We know that both BOI and AIB bought back really high risk sub-ordinated bonds after the first guarantee at half their value. So if their left with extra Nama cash where will it go. Currently the irish tax payer is debt to the value of 73 billion, this doesn’t include the 53 odd billion thats hidden in the Nama SUV. I find it perverse that we the taxpayer has bailed out the banks and in tandem with european law, the european bondholders have also got all their money back. Now there ius the strong possibility that the banks will invest cash they receive form the tax payer to invest in government debt bonds. We the tax payer borrowed this money to bail them out, we owe their debt and now we owe them money because they used this cash to invest in our government. This is robbing peter to pay paul but layered with multiple personality disorder. Its a mass conspiracy on behalf of a banking and government elite. Even though these apparently smart people invested in a bubble and in high risk bonds. Now we find ourselves in a situation where the ECB is using the Nama vehicle to invest in Ireland and save the Euro. They cant lend directly so they do it through the banks. This started with Peter Bacons idea of a bad bank. Bt has now under the guidance of Alan Ahern turned into something else. Remember ahern came out form under the wing of Greenspan, and in his defense, although he was right about flaws in the irish economic model, has set forth an extreme right wing agenda to save the system that got us into this mess. Nothing has changed, its the same system, the euro has been saved, the ecb is calling the shots in our economy and the mistakes of idiotic bankers legally working within european law has resulted in the economic enslavement of generations of Irish people. We are to passive a nation. We’re as much to blame for taking this lying down. Today is Naom Chomsky’s birthday. i suggest Mr McWilliams take Mr Chomsky to a few Leviathain debates. This country needs to wake up!!!!

      • wills

        Jonathan -

        Agreed, but, the ‘chicanery’ and ‘gambling’ are inevitable when countries buy into a fiat based funny money medium of exchange. Do not be surprised.

        Paper credit produces the worst in human nature.

        The upside is, human nature is finally rumbled.

    • Deco

      Severelyltd “When people get more upset about a handball than having their grandchildren sold into debt slavery with NAMA it is definitely time to consider ones options.”.

      This is the point that I made months ago. To create a subprime crisis, subprime intellectual activity is required. And there is plenty in supply. Ireland still contains people who know more about the plot on Coronation Street than they do about how the incompetence of the bankers destroyed the country. And likewise there are hundreds of people who consider a handball in a soccer match something to be outraged about, but the escapades of “Johhny Cash” on a minister for sports allowance as something which can be barely noticed.

  2. wills


    Great read.
    An academic economic technical analysis of a country called republic of Ireland sinking into an abyss.

    A society riddled in economic civil war across all social spectrums and generations.

    An island community atomizing into a million pieces .

  3. Again, an outstanding article from Mr. Williams

    I agree wholeheartedly with severelyltd ,your observation about the (hand ball economics)
    It has being a sore point with me for the past year why we the unemployed have not gone out on a permanent demonstration outside the Dail and why we haven’t done the same outside the Banks
    With the passing of the Fraudulent NAMA legislation it would appear this and the next generation were sold into financial slavery
    However I have a suggestion as to what we can do to help the country and that would be a temporary withdrawal of our membership of the Euro say for 2 to 3 years period
    With the reintroduction of the Irish pound and a prompt 30% devaluation might just do the trick!
    In making us more competitive again but without the necessary deep cuts in the cost of doing business in this country we are screwed no matter what currency we use
    We need to lose about 100.000 jobs in the public service; we need to lose about 100 TD’s
    We need to do away with entitlements of perks and payments as a subsidy for perceived low salaries
    You should be paid your agreed salary and nothing else! which by the way should be under review every year and you should have to justify an increase with your boss ,needless to say in bad times you might just get Fired! Just like the rest of us
    Ps: I would not buy a house and certainly not an apartment as I expect to see prices for a typical two bed apartment in the City Centre at around 80 thousand euro by the end of 2010 and a three bed semi in and around 125 thousand euro
    Never the less, I love Ireland and will do everything to prevent these gangsters from getting away with their treachery

  4. Jungerland

    A great article David.If our country had strong leadership I would still have hope sadly that is not the case and that means we have no options.The disenchanted unions will strike and then we are on our way to socialism under bearded men that dream of North Korea and Jungerland.

  5. A succinct and crystal clear article again Mr McD followed swiftly by three excellent responses.
    Yes Machholz, what about the unemployed willing and able (UWA’s??) who’ve been scrapped.
    The best of the country dumped because they don’t have “pull”.
    Forget things being back toi 2001, we’re heading to the 70′s and if you factor in RPI etc, so are property prices.
    Wills should write a treatise on NAMA and the ultimate ponzi professors. Straight to number one with a Phd certain.
    Now there’s the mother of all potholes after appearing between Ballyvourney and Macroom. For certain we will lose many tourists in the spring though that won’t get it repaired. The reputational damage associated with toasting tourists might eventually get some attention focussed on Rural Ireland, or whats left of it after the deluge. If a few visiting FDI execs were pot-holed as well, maybe Dublin might sit up and listen.
    This is my only contribution. I read every post from the last few articles, good comments one and all, but rationale nor common sense holds sway henceforth.
    As David says, you couldn’t make this up. The yo yo brigade side shifted Neillie Kroes last week just when she was making hay with the Big Boys Club. Incidentally she’s now in charge of The Galway Innovator. Wow. Big things to come there then.
    Anyway, my puerile pothole index might prove a better economic indicator than the other old tosh we have to listen to.

  6. roadrunner

    The only thing that will get us out of this mess is Irish people working for €20k per year and liking it!!

  7. And dont forget to check out the government inspired website:
    featuring a vast phalanx of government agencies,departments and Quangos.!
    David could not make this up either
    Actually..I wonder who does?

    • paulmcd

      Well, Land of Youth, I just happened to write to an agency, CER – COMMISSION FOR ENERGY REGULATION – this evening, as follows:

      “I am very concerned at what seems to be the lack of regulatory oversight in the information which is distributed by Bord Gáis Energy. You will have other messages relating to this issue from me in your records.

      My concerns today relate to the misleading statements concerning “savings” or “price decreases” on page 3 of the AT HOME publication for OCT/NOV 09. The prices do not fully reflect the falls at wholesale level; however, my main concern is that BGE deliberately ignores the increase of over 15% – from €59.02 to €68.10 – in the standing charge for the Standard Residential Tariff. I have written to the Regulator before regarding misrepresentations of this nature but it looks like the BGE leopard will never change its spots. The message printed in red at the bottom of the page begins: “If you have any questions about these savings . . . “ The word SAVINGS should read PRICE CHANGES.

      The price increase I am referring to is REGRESSIVE, affecting those least able to afford it most adversely. It is a rip-off to recoup some of the monies being saved by people who are forced economise on fuel in the most trying circumstances we are experiencing today.”

      I don’t believe that this letter will achieve anything, but did anyone else who is a natural gas consumer notice this, yet another, deception?

      Surely “cost-cutting” should mean cost cuts right across the board.

      • paulmcd

        MESSAGE FROM commission for energy regulation, RECEIVED TODAY
        I refer to your email to the Commission for Energy Regulation in relation to the standing charge.

        The standing charge covers the upkeep of the network necessary to bring supply to your home, together with the cost of reading the meter, issuing and processing the bills, etc. These costs have to be met irrespective of the amount of gas used.

        In the most recent tariff review requested an increase in the standing charge (from €52 to €60) Bord Gais Energy stated that the standing charge which reflects the overhead costs of serving the customer has increased to €60 in anticipation of the forecasted decrease in customer numbers during the 2009/10 tariff year.

        Allowing for adjustments in inflation, customers numbers, volumes, a 3% efficiency factor and a sharing adjustment mechanism, the Commission approved the Bord Gais Energy total supply cost of €29.002m to cover the cost of serving the residential and small industrial and commercial sector. The Commission also approved an increase in the Standing Charge to €60.

        The Commission can also confirm that the effect of this standing charge increase is included in the overall average 9.8% reduction.

        Thank you for contacting the Commission for Energy Regulation.We appreciate the time you have taken to do this.

        Dear Sirs, I disagree profoundly with the judgement. BGE is succeeding in taking customers from the ESB and should be able to absorb the decrease in customer numbers for gas, especially in the difficult times we are in. You can still offer no justification for what was a misrepresentation of information. Again, I request that you vet their publications before distribution so as to ensure that this kind of deliberate misrepresentation should not occur.

        Press statements made no mention of the increase in the standing charge. However, if I am wrong please refer me to published statement or kindly send copy of same. It was MISREPRESENTATION OF INFORMATION which necessitated this correspondence. I suggest that a PUBLIC CLARIFICATION be issued by Bord Gais prior to the budget on Wednesday. Thank you.

  8. Malcolm McClure

    I’ve been following David’s blog for a long time and this article is the most pessimistic ever. Every paragraph contains a negative observation on the economic potential. Perhaps he is just softening his readers up for the crunch of a hard budget. But surely there’s no need to out-dismal all the other prophets in the dismal science? Having made his name by purveying justified pessimism about the housing boom, perhaps David’s mindset has now become schlerotic.

    Alternatively, let’s list our positive attributes and move on.
    1. We have a well-educated, cohesive and industrious workforce.
    2. We have plenty of fertile land, so nobody need starve.
    3. We have plenty of skills in textiles etc. so nobody need dress in rags.
    4. There are plenty of houses, flats and hotel rooms.
    5. There is a good road system.
    6. There is reasonable broadband coverage, accessible to those who need it.
    7. We have enough transport and infrastucture machinery to see
    us through several years of recession without further imports.
    8. We have the ingenuity and artistic talent to attract investment.
    9. We have the Diaspora.
    10. We have a modern fishing fleet.

    The main negative factors are a lot of debt and a grasping distribution and merchandising cartel.
    Stuff it. Let’s count our blessings and rebuild the economy.

    • wills

      Malcolm McClure –

      All true, each attribute listed. And your listing is calming the bleakness, a must.

      Here’s my but, david’s article is a list too, but it delivers bleakness.

      The bulletin points weaved through his article spare the reader of any false hope or christmas optimism. I suspect this maybe the cod liver oil we need to ingest.

      My reading of D’s bleak house is the overture he is playing too his readers. He is breaking it down and declaring a surrender on false realism.

      You, rightfully so malcolm, counterbalance with facts working in Ireland’s favour.

      But, if one calibrates the ‘debt’ noose against the good road system, fishing fleet,talent,fertile land and room and board one is faced with the simple conundrum on that therein lies the prison infrastructure in which the jailor’s / elites control and use too perpetuate a terminal servitude on their fellow countrymen.

      • StephenKenny

        I have to disagree with this premise. The fundamental problem that the economy has – as is the case with Iceland, US, UK, and Spain – is that it is structurally woefully unbalanced. The debt is one thing, but even ignoring the interest on the debt, the problem is the inability of the country to trade profitably.

        Even if Malcolm McClure got his way, and there was a great upsurge in activity, too much money would disappear into national ‘overheads’.

        You also have the problem of moral hazard: The best paid jobs are outside the exporting sector, resulting in it not being worthwhile for people to bother.

        Several years ago, a lot of people on this site were asking this very question, and there have been no convincing answers.

        Modern economies are all about trade. To buy, you need something to sell. What are we going to sell?

        Creating a functioning modern economy is incredibly hard, and just fiddling with interest rates, currencies, and beating up a bunch of useless, opportunistic, bankers, will have absolutely no effect at all (except to make everyone feel better).
        If the ECB decided to offer a stimulus package, what would it be used to stimulate?
        It takes a politician of incredible stature to encourage the restructuring of an economy, and I don’t see a politician of any stature at all, in any of these countries.
        The easiest thing seems to be simply to wait for us to hit real hardship, and then they can blame ‘God’, or ‘The Markets’, while doing what is necessary (assuming they ever do).

        • Malcolm McClure

          StephenKenny; You got to the heart of the problem with “it not being worthwhile to bother.”
          it would be hard to find another country anywhere with all the attributes I listed above. Once a country has achieved these goals and ticked all the boxes, the hardest thing to do is to maintain diligent efforts to keep the show on the road. People bunk off on foreign holidays, have family celebrations or head down to the pub to congratulate each other on their good fortune.
          This is the real banana republic attribute. Life is too easy. They sit under a palm tree, waiting for the coconuts to fall and there’s nobody minding the shop.
          No there’s been a downturn, don’t sit at home moping, get out there and make something happen. Money is only the grease, it’s people who make economic machinery move.

    • tony_murphy

      I’d have to disagree on a number of those points Malcolm

      Well educated workforce – I’d say the majority are not. Most people I went to 2nd level did not progress onto 3rd level (approx 90%)

      Most of the workforce are now pampered – the eastern europeans will do the job for 1/2 the price and with twice the effort.

      There will be lots of pot holes – no money to fix

      Broadband is a joke, I pay £10 a month in UK and get 8MB. It’s at least 3 times as expensive in Ireland. The private equity firm which took over Eircom did what private equity firms do – take as much money out of the business as possible and now the country has fallen even further behind in terms of communications infrastructure

      Anyone who can leave will leave – those that are educated and not trapped by negative equity or have to stay for family reasons

      Ireland has worst politicians in the world. Until they are all replaced, then nothing will change

      The debt is enormous and can’t be paid back. 10Billion interest payements a year before even one teacher gets paid.

      Honesty is key to making problems more manageable

      • tony_murphy

        I read Deco’s post yesterday and he mentioned something like 18000 managers in HSE.

        Yet children who need life saving operations can’t get timely treatment. This is the real problems faced by ordinary people today

        • Dilly

          My father is a retired doctor, he used to do ingrown toenail ops in his surgery, and the patient would be back home for lunch. Now, you have to book into a hospital and get a bed for this operation. This is all designed to create paperwork, in order to keep these HSE managers in cushy jobs. My father cannot get over the fact that a simply thing like stitching a wound is now referred to a hospital.

          • Deco

            It would make excellent journalism if somebody got access to procedural documents in the HSE and compared with procedural documents in another country which spends less on health care, and provides much better service, and shorter queues.

      • wills

        tony -

        So, you are articulating that ‘debt’ slavery is so pervasive and the system so giving over too debt peeonage culture any innovation and gumption is strangled too ‘debt’.


        A ‘great escape’ is in order.

    • Deco

      Malcolm – you have made a list of positives. The problem is that the positives are nuetered by a culture in business and authority that I woudl call the “something for nothing culture”.

      Another negative – the Irish concept of management – which has completely failed – especially in the bigger enterprises – and is on life support called NAMA.

      • Malcolm McClure

        Deco: Irish people caused these problems and Irish people can solve them the irish way. Everyone knows someone who stoked the boom mentality and benefitted from it. Individually we can lean on them to restore the public perception of their integrity. This will be all the more effective if it comes from within the family.

        “Uncle Sean, you made a fortune, then you fired all those workers. Now nobody will talk to me in the pub. What are you going to do about it?”

        That sort of thing. The old ex-communication or boycott ploy brought up to date to apply pressure on family members.

    • G

      A list like this really hammers home the disaster with the modern fishing fleet (no. 10) turning me as pale as your proverbial stuffed haddock.

      We have the most indebted population in Europe, with crippling (rising) unemployment, with not a job in sight and a complete lack of political leadership/creativity, and a society where education is viewed as overqualification (personal experience of same), innovation and change as a threat to the Holy Trinity of farmers, merchants and professionals (all blessed by a conservative and corrupt church) – so lets start from a real point of view, we are f**ked beyond belief, and people think Tiger Woods got problems.

      The government are praying people will get the message and feck off as in times past, only for those same people to be lionised as the ‘diaspora’ down the line.

      The rich will stay rich, the middle class will remain mean, petty, and spiteful – fighting for the few scraps while the poor and unemployed will remain just that with single mothers coming in for attack from faux gentry of which there are too many to list (aspiring to the ways of the master).

      And don’t see anyone storming the Dail anytime soon, just a lot of talkers and inaction.

  9. Hi David,

    First up my knowledge of economics is fairly limited so i tend to have a simplistic approach in these areas.

    I have a question:

    What would be the international reaction if Ireland was to renegotiate it’s deal with Shell regarding our natural resources off the west coast. As it stands it appears we’re not getting a fair deal so should we be looking at it again with fresh eyes?

    I believe one of the African countries forced a renegotiation in the past and the immediate short-term reaction in the markets was fairly intense. My thoughts are around the medium to long term and whether getting an equitable deal would in fact inspire more confidence in Irelands ability to address its finances (at least after the initial uproar).

    I appreciate ‘a deal’s a deal’, but deals do get renegotiated when needs must (e.g: the public sector pay increase agreement), so surely not beyond the realms of possibility?

    A boardroom of tough oil executives is no doubt a scary prospect, but have we reached the point where we should leave no stone unturned.

    I think so, but maybe i’m being naieve.

    Hope you don’t mind me posting this but wrote a short article:

    I appreciate that many media organisations have a certain view on this subject, but would be good to get a purely economic perspective.

    best regards,


    • Tim

      Mick Regan, Absolute TNT.

      I Salute you, Sir.

      Your article is required reading for every person with an interest in the future of Ireland.

    • A fine article Mick and when you couple the other natura resources, wind and an abundance of water, we should be sitting quite comfortably. We’ve a huge customer next door who are about to spend billions on Atomic power to satisfy demand. If we could offset the building of even one Nuke station, they’d bite our hand off, given the state of UK finances.
      But that would take a bit of effort and imagination.

      • Hi guys, and thanks for the feedback.

        Furrylugs – good point, i hadn’t gone that far in my thinking. The more you ponder on it the greater the potential, even if it’s just to reduce our own dependency.

        Maybe someone somewhere (a leader perhaps) will have an epiphany.

        • AndrewGMooney

          Mick Regan, Tim. Furrylugs.

          There’s certainly a ‘negotiation’ to be done on ‘The Great Irish Gas and Oil Reserves’. Just not the one you think is gonna happen.

          As a bona-fide ex-Shell suit: Here’s the ‘epiphany’ you need – but almost certainly will recoil in horror from:

          Just read the first few posts, then ‘join up the dots’ to see why there’s no pot of gold at the end of any Mayo rainbow. I’m on the beach at Muursk, looking out to sea, sensing ‘trouble in the fields’ Not just a c/w song but an epiphany wake-up call / E.C.T regarding Corrib/ shale gas / defracking / peak energy.

          I’ve written about all this on this site before but everyone thought: “Him again! He’s nuts”. I don’t post on The Oil Drum anymore, crazy Luddites smoking Kunstler’s dystopian crack pipe. Wrong dystopian daydream/ nightmare, dude.

          LPG fuelled NASCAR cheese-doodle rallies looking good for the next 100 years. At least. Mad Max Redux a la Alabama. Trouble in the fields……

          As for ‘opposition’, well…. I did a search for ‘shale gas’ and it confirmed my worst nightmares….

          Anyway, Alasdair Darling thinks he has me on a ‘chemical lockdown’ till he does his Budget thingy, cause I warned DMcW’s about last year’s VAT debacle, but I’ve risen from the fog of Zyprexa to post this errant missive.

          ‘Mad Paddy From Brum’
          20:12, 20/12 2012

  10. Tim

    Folks, have a read of this: (by our own PaulOMahonyCork)


    … or is it more?

  11. YAYA

    It’s time to spell it out – all of this stuff that Banks and Government and EU are engaged in is negative actions that has no motivation for the Highest Good of anyone, even themselves. i include all those who collude either by working for or with these institutions and not registering their disapproval of larcenous/fraudulent practices no matter what they are called.Bad actions in the long run done with bad motivation create bad outcomes both short term and long term.Good actions done with good motivation create good outcomes both short term and longterm. This is the law of cause and effect or what Buddhists would call Karma which translates literally from Sanskrit as action. It’s time for us all as individuals and as members of organisations to really act and live our lives with the highest moral ethics, or else we are colluding with internalised, systemic corruption.

  12. YAYA –
    I absolutely agree with you however until we can start Karma and to rise we must hold together while we fall …… the bottom.
    Before our eyes are up to 25% reduction in take home pay since the beginning of the year due to reduction in wages in budget , increases in taxes , levies, stealth taxes and then cost of cleaning up the rising interest costs on home loans and inflation that will follow after ‘ a deflationary binge’.There will also be further cut backs in public transport and increases in car repairs due to Pot Hole apparitions ( a Healey Rae disclosure). Educational cut backs and restraints in provision of some academic courses in certain disciplines resulting in an inferior qualifications.Brain drains and emigration of our young people and disappearance of our sports teams to foreign lands.
    Just near the bottom appears the Ministers announcement on morning news of ‘his decision’ to devalue by 40% to YOYOS .
    Maybe after the yoyos we can do the yaya dance.

  13. YAYA

    Yes but it is imperative to behave in a highly ethical,and neighbourly manner while we fall,stating very clearly to leaders and banks and EU et al that this sort of bad action is not acceptable and one wishes to be in NO way associated with it. Sometimes our silence can also be a form of COLLUSION. The truth is all of our wealth , including the future generations is being harvested and stolen without impunity because the gangsters or should i say banksters are on the inside of government and civil service. And from the other side -From a first hand source – Government for years sat in the boardroom meetings of the major banks.
    We are a failed state and must rethink how we do things-otherwise it’s ECB Dole for the forseable future”

  14. I agree with you .I still think I am in a Bad Dream about all what is happening everywhere and somehow writing on this blog is a therapy.As David said you cannot make this up.We as a nation have created our own rotten eggs that have eaten into ourselves and all we see is a terminal end in itself .It is everything that FF was never suppose to be and how these IMPOSTORS can still hold face is mind boggling and worse again PATRONIZE the electorate.

  15. YAYA

    This failure of State is systemic-not just ireland.Recently Goldmann Sachs boss put a reg plate on his car 2BG 2 FAIL
    Understanding the truth of what is happening to you, how you are being abused, is what comes first. My father told me this truth about Nation States in 1983.
    This is some heartening stuff for you because we are not alone in this mess and harvesting of wealth see

  16. YAYA

    There is a wonderful article by Thomas Berry in the Book The Great Work ISBN: 0609804995 called the Corporation Story.
    It gives a good explanation of how things have come to be the way they are-humans confusedly do all kinds of bad actions in an effort to avoid suffering and find pleasure, all of which is unreliable and ends sometime. But most people have very good hearts, as evidenced in the recent flooding. It’s very important to point up and shed light on bad actions of government et al because it’s not doing them any good in the bigger picture. David does a good job at this. FFand FG are a sort of ‘Cult’ at this stage so people are in tatters realising the truth of the falability of their oracles. (Much like the Catholic Bishops).Remember the biggest Con Job against people is that we feel powerless and isolated.The pensioners stood together and knew they were n’t alone-made endless phone calls to FF Backbenchers who after all are like small family businesses-so they are afraid of them.
    We are in this together and can behave morally and ethically.

  17. econarchist

    David, I agree with a lot of what you write about the stagnation of the economy but I think that you’re getting things the wrong way round about deflation.

    “We aren’t spending, because we think that prices will be lower tomorrow than today. Why spend today when you will get a better bargain next week or the week after?”

    Prices are not falling so rapidly that they change significantly from one week to the next, or even from one month to the next. It’s the reduced spending of the consumer that is causing deflation and not the other way round. Retailers are being forced to drop their prices to attract customers.

    Even if the government were to do a complete U-turn and stimulate the economy with extra spending, deflation is going to continue anyway for at at least another year. This is because people will continue to shop around for the lowest prices, unlike in the boom years when people threw money around without worrying about prices.

  18. Deco

    David – you mention the NEWRY Price. The Newry price is itself a fraud. Because prices in Newry are rising.

    Here is an example.

    In September my niece (aged three) put an electronic car key in the Microwave and pressed “Auto-Defrost”. And started laughing. That was the end f the key. I had to get a replacement.

    1. So I phoned a large dealer in West Dublin. Howsagow en – yeah – yah want a key – riih – give us the chassis number – lets see now – yeah – that will be 229 Euro – including the VAT – 299 only, all in.” Eh, thanks. I will call back if I am going to buy. I had to get out of that.

    2. So I phoned Newry, to see if I could get your “Newry price”. { Hello theher – what’s the model – and can you give me the chassis number. Alright – we have a good price for you – that will only cost you 120 Sterling. Which for you is less than 140 Euros. }
    I was suspicious. But it was a lesson. I found the Newry price. But I was still a bit suspicious. I had this sense that basically he was ripping me off, and that all he had to do was be cheaper than the Dublin price.

    3. So I went back on the internet and got a phone number for a car dealer in Meath. Now I was drawing the conclusion that the Meath car dealer was probably fighting for business, and would do whatever it took to get the business.
    { Hello Yes How can I help yea ? Well I’ll tell you know there are two keys} And this stage I repeated the model because I was concerned that the person at the other end was getting it wrong. And he responded. {No, there are two keys. I know the car. And the keys there are two keys }. Oh, alright. (How come the other two ‘experts’ one in West Dublin, and the other in Newry never mentioned this ?) {Yes, there are twu keys….one is purely mechanical as such….yeah can’t bleep to close it…you can only close it by sticking in the key. And then there is the key that bleeps}. Still sceptical, I decided to say – and how much is each. The Meath dealer replied -{ Well the generic key will cost you 45 Euro. And the one that locks the door at a distance is 90 Euro.}.
    At this stage I was thinking to myself – I am getting a massive insight into business in Ireland. Naturally my business with to the Meath dealer – because he understands the customer, and gives respect to the customer. The West Dublin dealer has since gone into receivership. The Newry dealer and the West Dublin dealer were both dishonest and overcharging.

    But in any case, there is an important lesson. Basically Dublin prices are still excessive. Newry prices are priced to be cheaper than the mid point

    In any case, I think this should prove as a leasson, to those who assume that the Newry price is the price setting price. But I am suspicious about the Newry price. It is not always the case. Small town Ireland is fighting back. I remember David wrote an article about two ladies in the retail sector in Dundalk – and how they were having to deal with price competition, costs, and tightening margins. They were in trouble, but they were also very determined to persevere and survive. I don’t know how they are managing their retail margins now. But I get the sense that they are far sharper and more competitive than either Dublin or Newry.
    I managed to get a very competitive price south of the border – outside of Dublin. Basically there are people in this economy who mean business. And this was not the only case. I remember buying a USB stick in a country town for a quarter of the price of the cheapest USB stick available in a major British retail giant that advertises itself as the cheapest.

    We are seeing small scale retail Ireland fighting back with a vengence. Staff have been laid off. Every cost that can be cut, is cut. And this is the first thing that needs to happen to get this country out of the competitiveness crisis.

    • Deco

      Just reading back and I realise that made some grammatical errors.

      My advice – shop around – and if possible find somebody who is appreciates the chance of getting a new customer/new business.

      I have written about the gombeen culture in Irish business. But if we are to eliminate the gombeen element, then this means that we must take our business to the parts of the economy which are not extortionist and are just trying to earn an honest wage and serve the public in an honest and fair manner. This is the real reason that we need to shop around.

      There is something extremely disconcerting about the lemminglike crowds queueing up to get into Newry.

      Let’s find honest business people in our own economy and support them. And if any of you are going North shopping, you never know – but you might actually get better value in Louth, Meath, Monaghan etc….and you might never know about it. There is an Irish furniture industry cluster near Monaghan town, and another in Navan. Factory prices. There are other clusters in other regional centres.

      Being part of a hustling noisy crowd does not make the behaviour of the crowd intelligent. The same mentality that had people queueing for apartments in Castleknock, that had people queueing up for flights to Barcelona for pissups, now has people queueing up to shopping centre that provides a non-executitive directorship to the Ditherer.

      We need to stop rushing around like sheep, and have a good look around.

      • Makes sense for all except your supermarket stuff. I mean if you were stocking up with booze going North makes perfect sense as the duty/VAT is significantly lower. Totally agree on more one off items, though it has been the spot to get new tyres for a long time.

  19. Bearded Shopping Malls – maybe in jungerland after the appearance of the yoyos all retail trade will be state controlled and margins uniform.We wont have any price variations then ………and neither will we have a choice of product.

  20. YAYA

    Deco, we should make a video of this for you tube. You’ve a gift as a playwright-it came alive – jumping off he page!
    There is a lot of truth in what you are saying.
    Two thing that Country retailers have going for them (i was a retail manager one time):-
    1) Commercial Rents tend to be a lot cheaper than in the bigger Towns and Cities. Rent was the biggest factor in pricing goods when i was in the retail trade.
    2) In a smaller town, you rely hugely on retuning trade and not on either casual returning trade or passing trade. The biggest components of this are
    a) Fair and Honest Information to customers, with great respect for their coming to your place of business.
    b) Competitive pricing and/or decent quality of stock in relation to price-by this i mean durability and style of goods.

  21. Deco

    Listening to Newstalk – lots of coverage of the gardai and Blue Flu Two.

    Suggestions coming in to Eamon Keane – ‘take the gardai away from the ministers and let the politicians themselves around.’ That is an idea that I would agree with. Do we really need Gardai driving those wasters around. I mean could we not tender for it like we tender for everything else, and let the Gardai concerned protect the public instead ?

  22. gadfly55

    You should string the columns together where you repeat the phrase, “you couldn’t make this up.” Or, you should provide 5 models of the condition of this country in 5 years, from best to worst. You appear to be coming close to the eventuality in this article. The condition of the 96% who don’t own the country and the best means for them to survive the re-engineering of the economy to satisfy big money, foreign investors, etc. or in other words the development of a black market, barter economy outside of the official and declared businesses and organisations, state regulated and accountable to the state, should provide a direction for an alternative scenario of some benefit in providing the citizens with good advice for adaptation to the new order, same as the old order of feudalism.

  23. YAYA

    What about a Ministerial MiniBus?

  24. Any one remember Comical Ali??

    “Ireland’s banking system will emerge from the current crisis viable, well-financed and with enough capital to resume normal functions, according to Central Bank Governor, Patrick Honohan.
    He said he expected Irish banks to be so strong that there would be private capital ‘scrambling’ into Irish banks.
    Prof Honohan added there would be more capital injections into the banks early next year, but did not say whether this would come from private or State sources.
    “The global economy (is) recovering from the “V”-shaped collapse in global trade triggered by the sudden losses of credit and confidence,” said Honohan, who is also a Governing Council member of the European Central Bank.”

    As David says, you couldn’t make this up.

    • Maybe we should be beating people with our shoes instead of trying to reason with them.

    • YAYA

      What about Credit Crunch Mark II heralded by Dubai?

    • Deco

      Thanks for that information Furrylugs.
      I am relieved that the ECB, the Euro and our banking system are in “safe hands”. We should tell this to the Chinese and they might realise that buying gold is not necessary.

      I remember somebody in the Irish government making utterences in June 2008 “the Irish banking systems is sound”. “there is nothing wrong with the Irish banks – they are have all got solid asset bases”…”I want to reassure everybody…..”. Three months later he was in David McW’s kitchen “well….what would you do (in a crisis like this”….

      • That kitchen’s worth something now Deco. It should be put on display in the GPO. Along the lines of ” This is where it started……and this little shrivelled clove of garlic is where it eventually died”.

    • YAYA

      i can see the banks recovering all right at the cost of frozen liquidity in the real economy-they have interest free money to play the financial casino with!
      All these threads point to the Gulag Casino State-

  25. bankstershill

    France and Germany Called On ToSave Defaulting “PIGS”

    December 6, 2009 (LPAC)– A sovereign default within the eurozone has always been the nightmare of Eurocrats. This is now becoming a concrete threat, as Portugal, Ireland, Greece and Spain (the four countries named PIGS by piggish Anglo-Dutch bankers) approach insolvency conditions. A special report by French investment bank Natixis addresses the issue, while at the same time trying to scare France and Germany into bailing out these countries. Saving the PIGS means, of course, saving the British Empire banking nexus that holds their debt.

    The study first outlines where these defaulting countries stand: The foreign debt of Spain, Portugal, Greece and Ireland is respectively EU1,089 billion; EU166 billion; EU543 billion; and EU182 billion. In terms of percentage of GDP, this is respectively, 155%; 110%; 155%; and 966%. In terms of foreign debt service, it represents EU172 billion for Spain (10.2% of GDP); EU16 billion (8.8% of GDP) for Portugal; EU92 billion for Greece (10.9% of GDP); and EU167 billion (9.5% of GDP) for Ireland; for a total of EU447 billion in debt service. Through various calculations, Natixis economists finish up with the figure required to honor that debt alive: EU331 billion per year over 15 years.

    Natixis tries to scare France and Germany into bailing out these countries should they become insolvent, with the argument that France’s and Germany’s export-oriented economies would otherwise collapse. “Therefore, for economic reasons, it is highly unlikely that France and Germany will not help out the PIGS in case of financial difficulties, even if institutional solidarity (i.e. EU’s) fails.”

    Contrary to such arguments, a breakup of the eurozone will free large captive nations, France, Germany and Italy, which then can join the Four-Powers agreement and mobilize their industrial potential for the Eurasian Land-Bridge development project.

    • Deco

      Banker – can you check those figures again. Some of them seem to have funny percentages.

      From an ECB perspective there are two alarm bells waiting to go off.
      1) The example set by the most daring of the rogue governments – the Greeks.
      2)The absolute scale of the debt is Spain which is accelerating massively. This has been continually swept under the carpet at the behest of the EU Commisions and Barosso for political reasons. Basically, any news that alarms the Northern Europeans concerning the Euro gets swept under the carpet.

    • gadfly55

      Check the Economist last week , for graph of CDSs with 7euro economies, including Germany and France in the top 10. The GDP of Ireland is misleading, rather use GNP for indication of the money generated in the economy. FDI operations have totally distorted GDP figures, furthermore, the total personal indebtedness has beggared any possibility of consumer led demand.

  26. bankstershill

    The above extract was taken from

  27. Tim

    Furrylugs, it appears that our friend Mr Honohan has been using a keyboard (or dictation to a secretary, perhaps) for too long and has fogotten how to write the alphabet; When forming one’s characters properly, one always begins with a “V”, while making a “W”.

    Back to senior-infants with you, Patrick Honohan! (and sit in the corner, for a while, too!)

  28. Monetary Schism : After the defrocking of Irish Bishops Cowen will dress himself up and post to the door of the ECB ‘ default by a thousand lashes ‘ .The PIIGS will bolt from the barn and the farmer Charlemaign will hold his French Goose and His German Pig safely away from Irish Eyes and be happy to hold his own roost instead.
    The PIIGS will die under a thousand fleas.Cowen will be cemented thereafter .

  29. He’s just another financial parrot.
    “Pieces of Eight!! NAMA NAMA!! Who’s a pretty boy BRIAN??”
    From what I’ve learned on here Tim, if we’ve gone down and we have to come up(because capitalism fails otherwise) but we’re not ever going to see free money again like we have done over the last 40 years, shurely the recovery is going to be saucepan or wok shaped?? Or even up and down like a baking tray?
    No-one gives a toss about learning intellectually any more so we might as well go back to the symbols scratched out on the Dun Aengus walls??
    10-10 jA.

  30. Furrylugs – you know and I know da book is a ‘double think’ and dangerously accurate .Its frightening that it really is true .

  31. Tim

    Folks, here is a pretty good example of why our mainstream media is a big part of our problems, always trying to keep people in the dark about important things and feeding us bucket-loads of inane drivel:

    The questions Ursula Halligan asked Bertie Ahern on that show last week:

  32. MK1

    Hi David,

    Another good article from you.

    You ask “where is economic growth going to come from“?

    It can only come from a competitive private sector which is not being held back by an excessive cost base and salary expectations.

    We need to get all workers to work harder, faster, better and cheaper. Those years of living off credit have gone, and it IS painful to adjust. And no-one wants to adjust to a reduced cost base.

    The people that ‘made the money’ during the boom and have it ‘banked’ (elsewhere) cant be got at. Thats money taken out of the system. Yet the debts/credit that was used to pay those is still hanging over our economy and is problematic as people and businesses cant pay their loans.

    Remember that age cohort you labelled in your book that got the wealth transferred to them. I forget the label you put on them but they are the golden generation by accident rather than design. Or at least some of them are.

    One way to get some of that back is through wealth taxes. There is no reason not to do this even if it doesnt get much of it back, even if it dissuades others from investing in Ireland and even if most of it will be ‘sheltered’ away.

    We also need to get rid of those tax shelters and pronto.

    We need government to be cheaper, not as a percentage of an inflated GDP figure, but on a cost-per-output measurement.

    You are right, the Newry v Dundalk benchmark is one way of showing how competitive we are, or arent! Its however not an exact measure but we need to be close to Newry within reason and compete on other fronts as well.

    So would close be say within 10%?

    Now which Irish government is going to reduce the minimum wage to within 10% of that in NI? And reduce social welfare payments to within 10% of that in NI? And reduce Hospital Consultants to within 10% of that in NI?

    How about the levels in Poland where MNC inward investors are perusing as a choice in comparison with the green island to the west of Europe?

    Even a CEO with Irish extraction will be forced to look at all the options. And now that Ireland is part of an EU-27 and NOT the EU-15 which was more suited to our needs, now what will we do to get FDI in?

    Or should we look at indigenous businesses who we have neglected for decades and hope they will pull us out of the quagmire. Its easier and more profitable for Irish entrepreneurs to go elsewhere. Why waste the energy and effort trying to do it from here?

    Its a tough hole we have dug …. and the diggers are still scot free!


    • wills


      “we need to get all workers to work harder, faster,better and cheaper”.

      Are the ‘workers’ term including executives, middle management and investors and business owners.

    • Deco

      “where is economic growth going to come from“?

      Well it s not going to come from

      1) NAMA
      2) ANIB
      3) The other banks
      4) The rest of the corporate elite listed in the ISEQ – as Shane Ross comments – the incestuous network that governs the boards of the ISEQ listed companies.
      5) The cronies and parasites who are fit into the The K Club Clique.
      6) D2 – the Sir Humpfrey factor.
      7) Kildare Street
      8) IBEC
      9) ICTU
      10) The FAI, or the national soccer team (despite what Bertie Ahern thinks).
      12) The drinks industry who also seem to think that we need delusional thinking to get us out of this mess.
      13) RTE or the Irish Print Media sector who talked us into record debt levels – and took the advertising penny from our advertising sponsors.
      14) Management consultants hired to make ridiculous recommendations, and blame nobody so that they will get rehired to perform future consultancy analysis for the state.
      15) Idiot commentators like Dan McLaughlin or Austin Hughes.
      16) The pretenscious useless waster in the Aras who thinks that we should celebrate and feel proud. (BS costing over 300K).
      17) The HSE management hierarchy.
      18) The beneficiaries of nepotism running the rest of the semi-state and state sector. Especially CIE and the ESB.
      19) Eircom and their hold on the broadband network.
      20) The IAVI (Auctioneers).
      21) Tom ‘now is a great time to buy property’ ‘value’ Parlon. The CIF.
      22) The Accounting profession – who gave CJH a lifetime acheivement award once.
      23) The legal profession and judiciary who regard the citizenry and the taxpayer as a suitable for being scelped and shorn on a continual basis. (rumours about legal professionals who are on cocaine does not inspire confidence).

      We can only rely on the Economics profession to lead the intellectual charge against all the nonsense. Which is why we are here on David’s website. To offer our support, and to help in any way that we can.

      • wills

        Deco -

        I looked through the list and can you throw in there as a waste of space,

        24) climate change wasters

        • Colin_in_exile

          I saw a report on the news about 120 (Yes, One Hundred And Twenty) Protesters/Activists/Hippies/WhateverYourHavingYourselfs marching in Dublin.

          What’s the story with the blowing of whistles? Do they think they are refereeing a match? And banging drums, do they think they are on stage doing a gig?
          Why did RTE report this? What’s the threshold? 100? 75? 50? How few people have to turn up for RTE to decide its not newsworthy?

          A whole new generation of do-gooders like Mr Roche of Oxfam on show. God help us all!

        • Colin_in_exile

          Yes, I saw a report on the news over the weekend about 120 (Yes, One Hundred And Twenty) Protesters/Activists/Hippies/WhateverYourHavingYourselfs marching in Dublin.

          What’s the story with the blowing of whistles? Do they think they are refereeing a match? And banging drums, do they think they are on stage doing a gig?
          Why did RTE report this? What’s the threshold? 100? 75? 50? How few people have to turn up for RTE to decide its not newsworthy?

          A whole new generation of do-gooders like Mr Roche of Oxfam on show. God help us all!

        • Deco

          :~) I would do that if it gave me the chance of including Gormless, Whine and Boil, twice on the list of useless entities.

          I am prepared to keep an open mind on the matter. And that includes being open to the fact that academics are trying to get more money from the taxpayer – so that they can FLY to Antartica. (No chance I suppose, that they might go “carbon nuetral” and row there in a kayak :~))).

          Gordon Brown has just made a big issue of Global Warming. Now, based on his track record in knowing what is happening, and making public pronouncements, this means that in likelihood there must be global cooling taking place :-))))

          I don’t suppose those hackers could hack into Department of Finance and find out the contents of emails between the various officials and the bankers. It would make hilarious reading. If Cowen ever pulls a “Yeltsin” on the tarmac of a Russian Airport – then we might infuriate the Russians to the point of doing something like that.

          25) Dithering ex-Taoisigh who hold directorships in shopping centres in the North, who blew hundreds of millions for the mates in the FAI, who can never remember how money keeps getting into their accounts, and who had no bank account when they were Minister of Finance.

  33. I’ve seen this all before. In a company I worked for. It boomed in the late 90′s and then dot com bubble screwed it. The utter lack on imagination of management and the sudden lack of competitiveness due to high salaries relative to the now open for business India meant long term stagnation, and even that was won off the hard work of all concerned. It limps along still, but is fairly banjaxed all the same

  34. Philip

    Maybe we have hit a limit. …”We need to get all workers to work harder, faster, better and cheaper.”… Crack goes the whip for increased wealth…work and shop ’til you drop. Compete with China…be like Germany…educate your children for the next generation of debt enslavement. Maybe the time has come to stop. Irish people work too hard or work stupidly and are all too used to ignoring the realities around them. Child Abuse, Mounting Indebtedness etc.

    I vote for disengagement. Full national strike. Everyone out. A tax strike is needed as well.

    Strike for
    1) Deactive NAMA
    2) Ditch Euro
    3) Nationalise Banks
    4) 100% ban of Catholic Institutional involvement in any state led organisation.
    5) Back to basics with top priority on education, music and GAA – people need to get a life and learn to appreciate it.
    6) Proper Unions which represent the workers, not some elite sector.

    Ireland will become ungovernable unless people can see the light at the end of a tunnel. Vision is seriously lacking. David’s highly negative article is but a taste of the trouble that’ll soon hit. Banks are booking losses against taxes for now. I figure when this runs out of steam, the property firesale will begin together with mass evictions. Then you’ll see trouble.

    • wills

      Philip – an all out protest use of paper credit.


      Every time one uses ‘paper credit’ in the quiet of one’s mind reject it as a concept, use it but reject it mentally.

    • Deco

      Don’t nationalise the banks. Let them face the music and stop bailing them out. It is cheaper to let them fail than to carry on the current arrangement. The policy of “no banker left behind” has to be abandoned.

  35. coldblow

    Just a quick response for the moment. I think Wills said above that this article gives all the negatives about the present policy. I’d agree and I was expecting DMcW to then give the exit-Euro scenario and devaluation to restore competitiveness. I suppose he ran out of space.

    Someone recently quoted a figure for the huge amount of savings on deposit in Ireland. In this total is the proceeds of my house sale last December as we are still looking for what we want in our new location. Exiting the euro would be painful for me, so imagine how those with multiples of this on deposit might feel. But I agree with him, this is the only sensible way forward, ‘going forward’ as it were.

    Just on the issue of reducing costs all round, Newry is the wrong end of the country for me. Wouldn’t it be great if you could get, say, a Doctor’s consultation over the internet and get a more competitive price from a GP in Newry. Or a solicitor in Bradford etc etc. When we were moving I put my foot through the ceiling and had to get it repaired asap. A small hole cost me more than 300 euros – it would nearly be as cheap to fly someone in from Riga or somewhere, say if there were three or four jobs to be done?

    • wills


      Would it be fair too say what you are getting at here is the following;

      the market making functionality in Ireland is kapeash!

  36. Blue Moon – the second moon in december is 31 st and by then maybe the ….men in blue might have strike on their agenda …if that is so…..were all gone to jungerland north korea

  37. Deco

    How to save millions

    We should have been doing this years ago.
    The state can buy office space from NAMA for 25% of it’s official value. And then stop paying hyper-rate rent for city entre property. The state does not need to rent office property anymore. The state owns property as a result of the NAMA debacle. Alright – forget Long Term Economic Value. What about getting short term economic value from the NAMA properties ?

    • donkeykong

      Wouldn’t this have the unfortunate effect of pointing out the sheer stupidity of NAMA as it would be forced to take an immediate loss on the value stated for such property?
      For the ‘long term economic value’ bullcrap to ‘work’, there can be no selling of NAMA properties at the real market price for a long time.

  38. wills

    Posters -

    One second the banking spokes people tell us its a v shaped recovery and all is on the up and then next second IMF loolaa in charge tells us banks are still hiding massive losses of books.

  39. paddythepig

    All-out strike? Ditch the Euro. Gather your pitch-forks. Storm the Dail.

    Lads, get a grip.

    I won’t be impressed though if they fail to make the requisite cuts on Wednesday.


    • wills

      agreed, cut the bankers in two.

    • Tim

      paddythepig, would you be impressed if they taxed the rich and cut the pay of public servants earning more than €100k, instead of hitting ordinary workers, children and social welfare, instead of what is planned?

      Or, will you be impressed, only, if the “requisite cuts” are made to low-paid public sector frontline workers, while leaving the wealthy untoched?

      • wills

        tim, show paddy TASC link on taxbreaks for the rich covering 5 billion euro’s.

        • Colin_in_exile

          What I don’t understand is this; the Unions were offerring to improve efficiencies and increase flexibility and obtain unpaid leave in the Partnership talks. Benchmarking was introduced 10 years ago or so, and the idea behind it was that Public Sector workers would get increased pay if they agreed to improve efficiencies and increase flexibility.

          They subsequently received these increases, yet here we are 10 years or so later and apparently there is still plenty of scope for improving efficiencies and increasing flexibility. Are the Union leaders drip feeding these improved efficiencies and increased flexibility, keeping more of them locked safe away to bring to the bargaining table as and when they need to use them?

      • paddythepig

        Come on Tim, I’ve posted my views on this before, as you well know. Biffo et al need a 50% haircut, cuts should then be tapered lower as salaries get lower. No-one, except the very lowest, should be spared.

        They should also enforce the productivity improvements that came up during the recent talks. This should not be a matter of negotiation.

        They should also slash waste, quangos, and all unproductive staff.


  40. Deco

    There is something hilarious about Richard Branson releasing a plan to send people into space, at enormous cost in terms of the carbon footprint, the day that the Copenhagen Environmental Summit starts.

    • wills

      Branson is an innovator and knows the climate change fake green tyranny is a SCAM.

    • Tim

      Deco, (thanks for encourgement, btw), you are correct and right to raise this here;

      Since I have been reading here ( and I have been doing so for more years than I can remember, there have been people educating others – you have been dedicating your time to doing so since about 2007, early 2008, if I am correct), you have, since your arrival, been helping people to understand what is happening in our country.

      You are still doing it.

      Although I was reading for a long time before I plucked-up the courage to write something here, when I finally did, you encouraged me to continue.

      I began posting on what I knew best: the importance of education for the children/people of Ireland.

      You encouraged me by, after a debate or two, accepting that education is paramount.

      Since then, you and everyone else here has educated me on matters that I was ignorant about.

      I think that I have learned so much from all of you here.

      What we must continue to do, Deco, is raise such questions and ideas and contradictions as you raise here, run with them and discuss/debate them and try to educate everyone who drops-in here and help them to understand; the way you and others have helped me (you know who you are).

      Let’s keep at it!

      • Deco

        I don’t know if I am on this board that long. I must be getting old faster than I can remember. I can remember making entries from the time that Lenihan started making reassuraces to everybody in June 2008 concerning the banks. Reassurances are a great clue that there is something troubling in the works that has about to emerge.

        Tim that you for your encouragement, your honesty and your intelligent contributions !!

    • liam

      Cost per person might be huge, but the total impact is virtually nothing. He’s simply taking advantage of a market of people with more money than sense.

  41. wills

    Snappy link here breaking down the numbers the big time developers back in the day, 2005.

    • wills

      choc a bloc Intel at this link on NAMA.

      Also, NAMA’s utter ‘couldn’t give a sh1te where the property is located’, as is pointed at in link, prove’s NAMA is not what it is put forward to be. If it was, geographical location would be high on it’s list of asset consideration. So, more proof NAMA is another criminal syndicate banking fraternity POnzi SCAM.

  42. Tim

    Folks, there is a MAJOR problem arising: those who might “buffer” the sheeple from the onslaught are faltering.

    There is a major “push” by government, the media and Trade-Union leaders, to silence the “ferrets” that would overturn them.

    The “Officer-Boards” of union branches, FF cumainn, etc., are feeling “worn-down” and are on the brink of resignation from their positions-of-organisation, due to the constant hammering they are receiving.

    If this happens, the “divide-and-conquer” tactic of the elite will have succeeded.

    We cannot allow this to happen.

    If you know someone who is involved in organising workers at a local level, you should encourage and support them in their efforts to support jobs.

    Please do this, instead of falling for the “public versus private” sectoral propaganda that the sheeple are being fed on an hourly basis on the radio, television and in the newspapers.

    Ask yourself these questions:

    Who are the “winners”?

    Who are the loosers?

    Who caused the problems?

    Intelligent people, given the right information, can make the right decisions.

    (Unless, of course, they are CORRUPT).

    Now, decide for yourself who fits into which category on that one.

    • Colin_in_exile


      Isn’t a General Election Campaign the best forum for dealing with all these queries?

      Is there a chance the Govt might not get the numbers to pass the budget? If not, then General Election?

      To answer your questions, here’s my take;

      Who are the “winners”? Farmers, Bankers, Lawyers, Doctors, Accountants,

      Who are the losers? Unemployed, Stupid Young People who bought houses 10 times their salaries, Greedy Amateur Landlords who bit off more than they can chew.

      Who caused the problems? A combination of Stupid Young People who bought houses 10 times their salaries, Greedy Amateur Landlords who bit off more than they can chew, Auctioneers, Laissez-Faire(Couldn’t be Arsed) Government and Bankers.

      • Tim

        Colin_in_exile, may I add to the “loosers”:

        People who never benfitted from the Tiger, on fixed incomes, who bought their homes before the rules were relaxed, but are being FORCED to pay for the mistakes of the loosers you mention?

        • Colin_in_exile


          In my opinion, they would only be semi losers or quasi losers. Its unfair to group them with people who have no income, no hope of income in the short term, are in danger of losing their home.

          For example, my parents did not benefit from the Tiger, yet they have their own home, no debts and enough income to have a nice standard of living. I certainly wouldn’t compare them to losers who will soon have nothing.

          • Tim

            Colin_in_exile, but why should they pay for those who were, really, foolish?

            They paid their dues…..

          • Colin_in_exile


            I am anti NAMA, always have been, always will be. The fools (your average Joe Public) who bought at the peak who are now in negative equity and can’t make repayments are in danger of losing their homes. NAMA has nothing to do with this. In a NAMA free world, the banks would pursue them, just like they will in the NAMA world. They gambled on buying a house, and they lost, and soon will have nothing.

            You are not being forced to pay for Joe Public’s mistake. You are paying for the Bank’s mistake in lending Joe the money. Your govt has decided that it will take some more of your money, to feed the banks to keep them alive.

            To be honest Tim, credit to you for not taking part in the bubble Ponzi scheme – I’m sure people at the time told you that you were crazy not to buy a second property and keep as an investment. However, you must also feel fortunate that your house is safe, mortgage repayments are low, income is maintained (marginally reduced) and is guaranteed, including your retirement years.

  43. Tim

    Liam, wills and Malcolm may have an interest in this twitter list.

    It is a live contribution exposition from people involved in the Copenhagen summit:

    • liam

      Tim, thanks. My curiosity over Copenhagen doesn’t extend to watching their every move on twitter, I think I’ll wait until they are done. In any case, FF will just use it to tax you even further.

    • wills

      tim, thanks for link, i feel like it’s a bulletin board for a monty python pagan worship jamboree, or, a sequence from the ‘wicker man’ not too sure which?!

  44. Josey

    Fellow posters,
    David’s latest article made for stark reading, it made me feel cold inside. Your posts as accurate as they are made me weep for the first time since I don’t know when. I’m so sad for our country for our people. To be honest, it’s getting harder and harder to bare reality, I can see how x factor has such a following. Even the handball incident was a distraction.

    Where is the hope? Everything dear and trusted is collapsing!!!
    I feel frustrated, depressed and lost.

    • Colin_in_exile


      Yes, it is bleak, but you’re not alone, many of us are suffering, including myself – work is hard to find at the moment. We Irish have a survival instinct in us, so you just have to hang in there and wait for things to get better.

      I’m surprised no one has come up with a guide on emigrating. Surely it would be a Christmas No. 1. Picture the scene on Christmas Day, the thirtysomething year old son tears open the wrapping, looks at the cover “The world is your Oyster – Why Leaving Ireland makes sense, by Paddy McAdoo”, ah thanks Da, just what I was hoping for.

    • Tim

      Josey, do not feel lost.

      We will never give-up; we will never surrender.

      We will fight til the bitter-end.

      Eventually, after cronyism, intelligence will defeat stupidity.

      Innovation will defeat stagnation.

      Let’s keep at it!

    • tony_murphy


      Look at what Philip said in 34. It was refreshing

      It’s time everyone just gave a 2 fingered salute to all politicians + banks + the rest of the rat race

      Once people have their health, have enough to eat, then to hell with everything else.

      I lived though the 70′s, 80′s & 90′s with little or know money and it wasn’t all that bad. I’d rather go back to having nothing, then they bankers + politicians couldn’t tax any of it off me

    • Josey

      Thanks folks, much appreciated. I think I was thinking too much about all the negativity and it overwhelmed me.

      You’re all right, post 34 by Phillip is spot on. I was reading on some website where in California a small gruop of people have started a campaign to not purchase on the 15th of every month, to disengage from the system for 24hours. If this spread surely the Gov and powers that be would sit up seeing that their tax revenue and greasy profits were at stake. If it didn’t get noticed it could be increased to two days a month. We have the power and it would save us all money too. We could barter on such days or only buy local or at markets.

      What ye think? We need to protest somehow, I for one need to vent this frustration and feel that I have power and influence!!!

      • Hi Josey,
        I’m now in Argentina this week flying home on Sunday ,trying to self property on a new golf course and finishing with the course been played under flood lights Saturday night. Even with a sunnier climate the units are not moving while we have 200 golfers teeing off on the course some will bring partners, but real estate ( apart from Hong Kong ) is depressed.
        We are setting our selves up here for years of depression both economic and climatic with the cycles we are now in.
        But we can stop this too.
        Let the Garda take a vote, let them break the law. For who will arrest them ?
        Look at The Dutch they took from the sea and Made land , we’re loosing it !.
        Gormless and his Frog count , are the joking paying to see how many french folk live here !,..oh sorry the slimy green things with four legs that ( those) people eat !…..Why does Anyone need to know these figures. Is it the Chaos theory maybe ?.
        Let them bring in the Budget this Wednesday and then we will see what cards they have in their hands ……Then we’ll take the stack from under them …

      • Gandhi took this form of mass protest to extremes Josey and look what he achieved.

    • wills

      Josey -

      D’s article is pragmatic. And looking at the reality as it is can only be but a positive step forward.

      Look upon the ‘shakeout’ as a pile of ashes from which a phoenix will rise.

      • wills

        Josey -

        I see the POnzi ‘shakeout’ ushering in a society purged of paedo preists, fixation with property speculation, fixation with been rich and wearing bling, ireland’s going through a growing up stage and on the other side will be something better.

        • wills

          Josey -

          the internet, access to info will see us all through this horror show, everything comes full circle and so will this Ponzi cultural funeral pyre.

          • Josey

            Yes I think you’re right Wills. Things are darkest before the dawn and all.

            But nothing has happened yet to left the powers that be know we are angry as hell…we need to do something to let them feel our power. I’m not talking of rioting but what about using our purchasing power, a national go slow or a national go-fast as seen in japan???

            How can we lean on them??? It’s time for action not just a talking shop.

          • liam

            Josey, the Stakhanovite working practices of the Japanese are somewhat mythological. I don’t think I’d be using there economic experience as a reason to take hope, its either a producer economy, Ireland is not.

            What you can take away from Japan is that it took nearly twenty years for them to get rid of the self interested cute-hoor-sans that caused the mess in the first place. FF hopefuly won’t last so long.

          • liam

            Having said that, here is something we would do well to follow the Japanese on:


  45. Tim

    A certain “Renault” dealer was able to buy, four years ago, or so, the last-remaining renault garage in the country, that he did not own for €25 million. (the owner was getting divorced and the wife wanted “half”, so he was pushed into selling).

    Nothing has been done with this site in the interim.

    The buyer, the main “Renault” dealer in our country earns so much money that he can “sit” on such a land-bank on Rochestown Avenue in Dun Laoghaire, for so long and not have to worry about having spent €25 million on it.

    Now, there are three possible reasons for this nonchalence:

    1) He is soo rich, he does not have to care about what mistakes he makes;

    2) He is so rich, no matter what mistakes he makes, he will never have to pay for them, via taxation, nor any other method;

    3) He is so rich, that he can lift the phone and get a TV station to pay him exorbitant amounts of money to be the “Hinge-pin” in a “reality” show that pays him so much through advertising-revenues that the sheeple pay for, that he will never have to worry.

    Now, what does that tell you?

    My wife is watching him on the TV right now. Go figure?

    • Deco

      But Mrs. Renno Irl did mention that “we had to get rid of the chopper – we just could not keep it – considering what so many other people were going through now”.

      And now we are seeing ads trying to force the government to reduce car taxes. There you have it. Media, corporate sponsors, and government policy.

      I don’t hold a grudge against him personally. In fact he should be thanked. He is probably the only speculator who spent 25 Million Euro on a site that he still owns who is no presenting headaches for NAMA.

      Personally I find Alan Sugar more entertaining. We should get Sugar in to sort out the HSE mess.
      “Whot ? You’re a bleeding iddiot – I asked you to do something very simple – something just about any fool could do – and you failed. Sorry, but unless I am gavely mistaken – there is sumting seriusly rong wit yu – I meen I just don’t get it wit you – you can do notting within the budget – absolutely notting – and I ask myself what iz the problem here with this person – and know I tink I know – and it’s your bloomin attitude – you don’t listen, you don’t think of what you is suppozd to be doin – and you don’t share the responsibility – I am fed up lissening to you telling me it is sumbody else’s fault. I can’t put you in charge of even the simplest of tasks – without you making some sort of disaster outofitt. I can’t have you in charge of anyting – you would cost me a fortune. Prof Drumm – I am happy to say this – You’re Fired !!!”

    • Deco

      Maybe should start a reality TV show for millionaire called “sponsor a NAMA development”.

      In it various multimillionaires can go about providing millions and millions to refinance NAMA developements. It would be the ultimate “makeover TV” meets “reality TV” show. One a massive scale – like NAMA itself.

      I am thinking about trying to get Russian Oligarch and Asian Billionaires into this – and to get them before they spend a few hundred million on English soccer clubs. In return they can get access to the members of the Irish Senate, and our EU Commisioner. In fact we can give them seats in the Seanad just for sponsoring a NAMA development. Democracy has already become an auction in this country – let’s just make it profitable. (Just like the Brits do). Unfortunately our EU Commisioners tend to be much less open to corruption than the Brit Commisioners -so we will call get a few political consultants from NuLabour over to provide advice).

      And in return the billionaires can develop NAMA sites into all sorts of projects. Internal ski slopes. Campus Ireland style projects with a swimming pool that leaks etc..They can start a sports club and then buy a county football team or a League of Ireland outfit. We can also get Hollywood celebrities into the NAMA business – giving them fields in Fingal for them to go around on horseback like aristocrats – just like Lord Kinsealy once did. And in return for their milliosn we can give them a LTEV bonds in NAMA. Or we can give them CFD holdings in ANIB.

      We can turn the whole country into a Celebrity Island. And we can bring back bertie and make him Celebrity Taoiseach 2.0. (Because everything Bertie did had a 2.0 version – Nice, Lisbon, Benchmarking, The Bertie Bowl, his evidence in the Tribunal, his explanations of how the money got into this account….)

      • Deco …your scaring me …I thought this Whole Country was One Big Reality Tv show already !

        • Ruairí

          I would like to be the first contestant please, representing all of us gathered here tonight on this windy wet rock, on “I’m a contrarian saver, get me outta here!!!”

          We could also make each of the government TDs responsible for particular debts and put a telematics system in place where a paedophile style electric collar would be worn by the ‘offending’ TD and if his toxic investment went south, he’d be electrocuted. Live on camera of course. Dáil TV. I think it could be syndicated and sold too. All of the South American and central american banana republics could use it in their newly founded schools to ensure their fledgling post-revolutionary democracies stood a good chance of not being overthrown themselves.
          And the Japanese would just buy it anyway. Because its morbidly funny and people are in pain.

  46. Colin_in_exile

    “If we had a huge one-off budget, we might achieve the idea that people would say, okay, the problem has been fixed and the risk of future higher taxation has disappeared.”

    Yes David, I like it, I presume you mean cutting spending by about 7bn or 8bn. Close down all quangos, 50% reduction right across the board on Public Sector salaries over 100k, 20% reduction on salaries between 50k and 100k, 10% reduction on salaries below 50k. Close down all tribunals regardless of progress being made there. Sell of ESB and all the other Semi States.

    • Tim

      Colin_in_exile, I was with you until the selling-off of the semi-states.


      • liam

        Agreed. And I’ll give further examples: British Gas, British Rail, British Telecom… Flogging off strategic national assets is never a good idea. Far more productive to insist on transparency, and the recently aborted negotations with the Unions was the perfect opportunity to force change in this area.

        Publicly published accounts online, full coverage of all state and semi-state orgs by FOI legislation. Even if they created a new department to handle transparency, it would be far cheaper than the shenanigans that go on at ESB, CIE etc.

        Of course actual reform was thrown out the window at the last minute.

      • Colin_in_exile

        OK, I take your point Tim. Can I suggest a leaner semi state sector, free of FF & Union cronies? Something has to be done here, reform is badly needed.

        • But Colin ..think of the Tree’s and then the climate and The Greens , of course the Coilte CEO does he not been soo talented deserve his €500,000 plus a year take home ?

  47. Tim

    Folks, in case anyone missed this:

    Everyone should proliferate this link in evry social medium that they can,

    • liam

      A perfect example of evidence for nation states being reduced to the status of change agents of corporate power. Pretty clear evidence I’d say of whom is calling the shots, and it damn well isn’t climate scientists.

  48. liam

    David, this is pretty dismal stuff. One wonders what the appropriate response should be. I am seriously torn between Malcolm McClure’s optimism (with some reservations) as expressed above and those who say the emigration is the way forward.

    I’m not sure that I agree with the contention that Ireland is a vassal state, nor that this is some new condition. What is so different about how things are now, with insiders and outsiders, compared to how it has been for the majority of the history of the state, including the last ten years? Debt created the impression of independence, dynamism, opportunity and personal wealth, but I would argue that all of this was illusion.

    I have a tendency to look at what an industrial designer might call ‘use cases’ when trying to figure out what is going on. I ask myself, what practical, pragmatic advice would I give to someone with young children in order to secure their future? Or what advice would I give to somebody about to complete their Leaving certificate or graduate from University? Or to somebody who has been made redundant?

    It seems to me that the decisions made by or on behalf of all of these people will be quite important in the longer term. What advice would you offer, with your economists hat on?

  49. tony_murphy

    Some ramblings…

    Our Irish version for greenwash

    I heard one of their members on TodayFM yesterday defending scientists in East Anglia

    So Carbon Dioxide has being declared harmful to humans and Obama doesn’t need to ask congress to approve what he is going to do in Copenhagen?

    The illusion of democracy is crumbling fast if you ask me

    Having followed one of Wills links – which led me to Alex Jones Fall of the Republic. And I think it was Alan Watt who said that “our rulers study history you know”. Now I was never one for history, I couldn’t see where I’d get a job with a history degree, but apparently it’s very useful – it teaches them how civilizations act. I wonder how many Irish politicians studied history?

    Well, even though I have never studied history, I was fortunate enough to grow up on a farm and so I studied sheep. I chased alot of them in my time, much of it without a good dog. It was great when the all complied and went into pin to take their medicine or up on a trailer on the way to the abattoir, but alot of the time, there was one or two who decided to make a break for it, jump a few walls and run for the hills. They were the smart ones

    Speaking of sheep and dogs, in the UK, the conservatives have being grooming David Cameroon for many years. He was plucked from Oxford straight into Conservative HQ. He is going to be top dog next year by the looks of things. So he is the chosen one..

    To steal a phrase, “you couldn’t make it up”. How thick do they think we are?

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