January 20, 2010

Our cupboard is bare, so we must sell family silver

Posted in Irish Economy · 331 comments ·

Like all nursery rhymes, the origins of ‘Old Mother Hubbard’ are more complicated that they seem at first. When I was young, the rhyme was repeated to reinforce the value of savings. The moral of the story was that if you don’t put away something in the cupboard when times are good, you’ll have nothing to fall back on in bad times.

For years, it was thought that the “bone” in the rhyme referred to money, the Old Mother Hubbard was shorthand for all of us who forget to save in times of plenty, and the dog referred to anyone close-by who needed something to tide them over.

In fact, the rhyme may have a more complicated, political meaning, referring to the demise of Cardinal Wolsey and Catholicism in England. Wolsey was Henry the VIII’s trusted adviser and head of the Catholic Church. When he couldn’t deliver the Vatican’s blessing (the cupboard) of divorce (the bone), poor old doggie (Henry VIII) got nothing from the church. So the King set up his own church and the rest is history.

Whatever the origin, let’s go back to the idea that Old Mother Hubbard is someone who needs cash and goes to find whether she has put something aside for the bad times.

Now think of Brian Cowen as Mother Hubbard and consider the next stage of the Irish recession.

In the next year or two, Ireland will have to go to the cupboard to see whether we can sell assets for cash. That’s what happens when you are broke and can’t pay your bills. It is already happening in the real world. Have you noticed the mushrooming in the “cash for gold” business in recent months? These gold-buying outfits are now becoming commonplace on our streets. It has been like that for over two years now in Belfast, but it is only beginning to catch on here. I spent a lot of time recently in Belfast and was amazed to see the amount of shops — in reasonably well-heeled areas — advertising “your gold for cash”.

Whether North or South, the message is the same. People need cash and are selling their assets to get lolly. Like Old Mother Hubbard, we now have to go to the cupboard. Countries have to do the same and — strange as it may sound now, because it has not been talked about for years — Ireland will have to sell some of the family silver to stay afloat over the coming years. Privatisation is back on the cards.

This should not come as such as shock because if you look at any country which has experienced a debt crisis following a period of economic mismanagement, privatisation is a normal result. The chaotic Labour government in the UK of the late 1970s, which had to go cap-in-hand to the IMF, was followed by the privatisation agenda of Margaret Thatcher. Likewise, the humiliated Carter administration, which allowed American government spending to get out of control, was followed by Reagan’s home-spun conservatism supported by his economic catechism of “sell everything” (to your mates). You could even see the end of the Soviet Union being down to state and regime bankruptcy, which led directly to the privatisation of the Russian oligarchs. All around the world, the government that bankrupts the nation — this one and the last one in our case — is followed by one that must sell assets to balance the books.

For those of the right-wing persuasion this is a godsend, the “natural” opportunity that comes from crisis. For those of the left-wing view this is the incarnation of Naomi Klein’s “shock doctrine” where a crisis is engineered to force through policies which move ownership from the people to private shareholders.

Whichever way you look at it, it is likely to happen because we have no money to fill the potholes or to re-line our leaking reservoirs. But what if, like Old Mother Hubbard, Cowen goes to the cupboard and finds that while the cupboard is not quite empty, what’s left doesn’t amount to all that much.

What’s in the cupboard? Well, did you know we have a semi-state company for seaweed? Or do you remember that we have a separate commercial semi-state body for greyhounds? Or horses? As well as RTE, TG4 and, if we are in the flogging game, the port of New Ross, or Dun Laoghaire Harbour, Dublin Port and the ports of Cork, Galway, Drogheda and Waterford. We could also flog the National Lottery and Radio na Gaeltachta. What do you make of the cupboard so far?

It’s unfair to judge yet because the really big semi-states include CIE. This is Bus Eireann, Irish Rail and Dublin Bus together. The total revenue is €789m. Unfortunately, the total cost of operation was €1.18bn in 2008. The company also has a net pension liability of €560m. Maybe it’s not worth so much, on the market.

Then we have An Post. It made a profit in 2008 of €31m. Although it has a pension liability of €582.3m due to the financial downturn, which means the company has a shareholder’s liability of €212m. It is basically insolvent.

Oh my, oh my, the cupboard looks bare. What else is in there?

Bord Gais is an interesting one because it has been spending lots on wind farms. This is one that might be worth selling. It has good cash and not unreasonable debt in relation to its assets, and has 900 staff.

Bord na Mona has a profit of €19m on a turnover of €400m, which is hardly an O’Leary-esque return. But with a decent enough balance sheet we might get something for it.

ESB made a profit of €273m on turnover of €3.5bn last year; its net debt of €2bn seems high but if you look closer it has a €2.6bn pension deficit — of pensions it has promised to staff who have yet to retire.

Taken together, it seems that although this Government or the next one might want to sell its assets, there is not that much of significant value in Irish semi-states. That doesn’t mean they won’t be sold. Like the hundreds now selling their gold jewellery for cash, the forced seller never gets a bargain.

Yet again, Irish taxpayers will be shafted by our politicians. Old Mother Hubbard Cowen will go to the cupboard at the worst possible time and sell assets for the worst possible price. Maybe, like Cardinal Wolsey, this signals not merely a bad economic deal but the end of an era.

  1. With all the free rooms in empty hotels now is the time to open up gambling and let Paddy Power or Dermot Desmond pay $1bn for the rights to run our own Las Vegas.

    The rights for gambling must be worth far more than the horses and greyhounds put together.

    • Ruairí

      Interesting Gerard.

      Incidentally, with a glut of hotel rooms apparent since before the rooms market peaked, it appears that those who should take such things as footfall and statistics into account, aren’t! The planners of Westmeath CO CO have just granted permission for a hotel in Kilbeggan, despite Tullamore, Mullingar and even Moate and castletown Geoghegan in very close proximity with ranges of room-prices and styles. Similarly, an 87-bed hotel is planned for Clara of all places,a mere 5 miles from Tullamore and Kilbeggan and ancestral home to Old Mother Hubbard herself.
      With this kind of planning, you would wonder what part of the programme for government Dan Boyle was actually awake for. ………

      • Deco

        Dan Boil is part of a government that will run the five years necesary to make sure that the GP troika get their ministerial pensions. Everything else is window dressing.

  2. Cowen could put the semi states up on Ebay !
    On a more serious note what happens next? They say that every society is only three meals away from revolution. Deprive a culture of food for three meals, and you’ll have an anarchy. Wonder how long till we get to this point if the cupboard is bare?

  3. Ruairí

    There’s also Coillte David who, as the largest landowner in the country have, along with Bord na Mona, the greatest site potential for industrial wind-farms. Plus crops in Coillte’s case. Be it trees or otherwise, depending on underlying soil quality. We all know that over the next 10-20 years etc, agricultural land prices will improve (on a world scale, obviously Irish farmland prices were being squeezed by one-off site developments plus a shortage on the supply side.
    Secondly, our drinking water is worth a bomb, as embodied freshwater will enable our exports to be more fruitful and more competitive on a world market. I have posted on this in previous articles.

    Thirdly, we have generally agreed oil and gas reserves that, until recently (until they joined government) the Green Party were calling for to be re-assessed and all contracts renegotiated. That would ensure a serious asset which we could then either sell to the highest bidder or keep and use for income generation.
    Fourthly, we have the huge cash reserves of the Irish people. We know that upwards of 180BN (is it?) is on deposit. Why not offer genuine government-backed bonds that would work towards dividend-producing infrastructure such as our water infrastructure (as we trend towards water rates and hope to keep our pharma and food MNCs); such as industrial-scale windfarms to lower our energy dependence?
    We do have assets. We have the “impaired” assets you speak of, TOXIC semi-states that have got used to waste like all of us (though some of them have a social remit so that’s not totally fair-minded of us) but we also have assets outside of the small box that this government, severely lacking in vision, insists on thinking inside of.

    • Fergal73

      I’m not sure about 180BN in deposits – even if the number is accurate (I’m not disputing it), it’s a safe bet to say that that money is not actually on ‘deposit’ as in locked in a safe room.
      The money held on deposit by the Irish banks was lent out again – and now we know, a large amount of it was lent on what turned into bad loans. Pointing out the obvious, if every Irish person went in and tried to withdraw their cash (even before the burst), it’s bye-bye banks. The state could step in (the guarantee), but if we still looked for our cash under present circumstances, it wouldn’t be there. Bye-bye FF and hello ECB / IMF.

      Oh dear. It’s not looking good. Maybe we can get a dig-out? How about a win on da horses?

    • Bamboo

      Hi Ruairí,
      Like your ideas especially your second point “water”. But I think that is for the next two or three generations.
      Regarding “genuine government-backed bonds”; do you think there is enough confidence in Ireland for people to believe in anything “genuine” coming from the government? The GP are supposed to be the “genuine” politicians, passionately looking after people and planet and make CHANGES. Now that GP are in Gov, who actually trust them besides the GP themselves? From what most posters are saying I conclude that it will take a whole generation maybe more to make a change (if any). A change towards a government that can be trusted by their own people. Somehow I can’t see that happening in our lifetime. Can you?

      • Ruairí

        @ bamboo & Fergal73, yes the idea of government-backed bonds is hazy and crazy for the reasons you both outline: – 1. they’re not liquid cash and would affect the government’s strategic intention of propping up zombie banks and 2. the people are all out of unconditional Jesus love for government.
        I was merely throwing extra ‘assets’ onto the table for discussion. I don’t believe in privatisation, in general, as it can allow for short-termism in operation and most definitely to short-termism in political manoeuvres. Kudos to Furrylugs for the privatisation quote provided elsewhere.

      • Ruairí

        I of course mean that the deposits are not in liquid cash and not accessible.

        I am all for the cutting off at the knees of errant commerical enterprises in order that oters may prosper, however. But clearly, government-bonds that touted for that same deposit support would be schizophrenic policy.

    • And would your facts above regarding Coillte ,Ruairi, have any connection with this announcement??


      • Lorcan

        For a company that (may) be looking at acquiring Coillte, that certainly would count as a ‘strategic’ appointment..

        • If Coillte is “acquired”, expect massive Government write downs and some form of indemnity against the pension obligations.
          It’ll be a bit like the Glazer family takeover of Man Utd – a complete asset strip.
          Keep an eye out for changes in ESBI too.

    • Jonathan Hannon

      Hi Ruairi, Some good points here. Firstly on Coillte, they’ve now decided to get in to the nursing home business. One has to wonder what planet their on. There is a much documented over supply of nursing beds. Anyway who are us mere mortals to lecture the semi states on their business models.
      The shell situation is turning into the love that dare not speak its name. There are various pictures floating around of Trevor Sargent holding an Anti-Shell poster. What caused them to suddenly change their position. Its beyond comprehension that a Green minister for environment and energy would support shells cause. This isn’t a can of worms, its bigger and nastier than that. A former member of Fianna Fails national executive is now a “media advisor” for shell. But the irony of the whole thing is that the corrib gas field is only a small part of a much bigger resource. At one of David’s talks in Galway I questioned fine gaels Senetor Eames about their intentions if they get into power. She agreed that it has to be revisited. She’s not a all a heavy hitter but its good to get someone on record and IF fine gael get into power it’ll be good to have someone to chase. We have torn this country apart in the public private battle, we have destroyed many essential services looking for 4 billion in cuts and there’s several hundred billion of oil and gas under the sea. All contracts can be negotiated again, so why hasnt it happened. Did you ever wonder why the international communtiy hate Chavez so much, well simple he threw out the oil companies and paid off the IMF and World bank debts..bad socialists…
      I went to see Alah Aherne speak in UCG the other night. In the imortal words of Gore Vidal “its socialism for the rich and capitalism for the poor”
      When will this country wake up???

      • Malcolm McClure

        Ruairi and Jonathan Hannon: Boggers here occasionally revert about undiscovered hydrocarbon resources on the irish continental shelf and refer to it as an asset. Do they seriously think that after 30 years of exploration, if there were economically viable assets out there, they would not already be on production? Our Atlantic Offshore is one of the most hostile environments for drilling rigs anywhere. It seems that the most prospective areas lie under very deep water, so only giant discoveries can be economically viable. We are lucky that Corrib is still going ahead, as I’d be fairly sure that Shell heartily wish they’d never come near the place.
        I have talked to the protestors at their camp and though they are mostly sincere in their opinions, they are steeped in old-style Irish truculence about property rights, and not open to negotiation or compromise for the common good of us all. I lived for several years much closer to a high pressure gas pipeline than any of their homes are to Shell’s route, and it never cost me an hours sleep.
        I think their attitudes can be traced back to the evictions, and a residue of bloody mindedness to anyone in authority. History peers down on all of us.

        • Ruairí

          Oops, shades of Eireannach there Malcolm?

          The boggers you aver to were deemed to have no less than equal rights to the citizens of Norway; hence why the Norwegian Prime Minister nudged Statoil out of Ireland. It wouldn’t happen on their turf, he said. I stand to be corrected.

          Malcolm, the reporting /taxation matrix was eased on a continuum, and, as it eas, so the finds increased. I know what that sort of self-regulation spells, and so does every other reader here.

          We should have a high income share in any resource projects within our territory. That is one of the core tenets of my ideological concepts of being a citizen. I don’t believe that is the exclusive domain of boggers? Again, I stand to be corrected.

          • Malcolm McClure

            R & JH: My apologies for the typo. I guess you were wondering ‘What the L?’. Actually, in my part of the country the pejorative term is ‘bog-trotters’ not ‘boggers’, so obviously no harm intended.

            The state’s take in resource exploration should be proportional to the state’s front-end investment. If an independent assumes all the risk, the state has to accept a lower share of the profits, which share won’t begin until all exploration and development costs have been written off against tax. The Norwegians drive a hard bargain, but even they understand that general principle.

        • Eireannach

          I don’t think the rural Irish attitude to property rights has much of a future. The banks will own so much property around the country that it will be more like state socialism – Poland in the 1970s or equivalent.

          Myopic boggers up to their gills in debt will have to emigrate to ‘start again’ in Australia or the US or Canada. Maybe those countries can modernize their attitudes a bit, because as it stands they’ll stay here on their hind legs huffing and puffing about their ‘rights’ forever unless they get ‘evicted’ and forced to learn the art of compromise by living in somebody else’s country, and therefore by somebody else’s rules.

          • Deco

            Eireannach – I think you have “issues” with people from the countryside. It results in irrationality that produces all sorts of absurd conclusions like comparing Ireland to Poland in the 1970s. Rambo Burke, CJH and Bertie Ahern were all Northside Dubs. Garrett ‘better sort of person’ Fitzgerald was from the southside and was obsessed by class. Incidentally, so is McUseless who comes from Belfast. This clear urban-rural division that you are providing us with is absurd.

            Provide constructive comment, please.

            I focus on the source of the problem – the gombeen elements in Irish society – as David mentions in his book, the insiders. And to fix it we need debates about the accountability of state institutions and bodies, large lobby groups like IBEC, cliques like the K-Club Set and the D4 banks.

            By there way, there is nothing wonderful about people stuck up to their necks with debt. In fact it is something that is to be seen as an indication of the grip that commercial interests have on this country when people are driven to this outcome.

            The real enemy is not some ordinary joe trying to make a living, keep a family, and pay bills. The real enemy is silvertongued overpaid wasters parasites like Fingleton, Neary, Peter Sutherland, Danny McCoy (IBEC), etc…These people are screwing working people of all types. And as long as you are at war with the ‘boggers’ the scoundrels and scions of influence can live in peace, knowing that people like you will misdirect your anger and let the continue with “business as usual”.

            And another thing, if you want to hurt a capitalist – give him competition – socialist politicians can always be bought. IBEC two biggest enemies are Senator Shane Ross and Eddie Hobbs.

        • Ruairí

          No harm expected Malcolm. Just jousting. As a committed culchie, bogger, bogtrotter, biffo even, I swell with pride when I hear my calling card………….! Noble Savage is preferable. It makes our existence all the more twee. Can you picture the roadside posters “You are now entering Noble savage land” ? A winning proposition.

          Yes, the Norwegians drive a hard bargain. We swell with the wrong kind of pride, as Deco continuously drums home, instead of a quiet, unfaltering belief in ourselves. The Norwegians have that, a quiet, strong respect for themselves i.e .each other.

      • Ruairí

        I ‘clashed’ with Senator Healy-Eames in regards to her attack on the sole sign of leadership I’ve seen from FF, belatedly, the mass school closure by Batt O’Keeffe. Her party spoke out both sides of their mouths, with Brian Hayes commending the Minister while she denounced him the previous Saturday in -10 to -12c conditions in the Midlands. Not a heavy hitter at all, but still their spokesperson……… Folks, there is NO opposition to FF in power. It’s very disturbing but reasonably true. God help us.

  4. Ruairí

    But then I suppose, looking at things over 10-20 years, is hardly the “going forward” that Mother Hubbard Cowen has in mind; more like as Tim Says “Confidence, confidence, confidence!!” with the zeal of a bowsie on a Sunday night promising he’ll pay you back…..

  5. Humpty DUMPTY :

    Humpty Dumpty sat on the wall
    Humpty Dumpty had a great fall
    All the Kings Horses and all the Kings men
    Could not put Humpty Dumpty together again

    We need to ask ourselves :

    Why was Humpty sitting on the wall?

    What did he see ?

    Why did he fall?

    What were the kings horses and the kings men paid for to do when they could not fix Humpty?

    Why was Humpty so fat?

    Was Humpty drunk and burping ?

    Why did he not wear protection before he fell ?

    Where did he hide the rules and why did he ignore them?

    Was Humpty pushed and why?

    Why was Humpty so rotond and what had he been eating to cause that?

    If it easy to fix an Egg why was it not possible to fix Humpty?

    Was Humpty an impostor?

    How did he consume so much?

    Did he not exercise?

    Were the Kings men conspiring to over throw him?

    Why did he not let the people play with him?

    Did someone throw egg in his face?

    Why was he so fragile?

    Who put him on the wall ?

    What did he know that we should have known?

    Why did he not tell us?

    Was this the first wall he was ever on ?

    Why did he not play in a Moate?

  6. Mother Hubbard – if the sum of the parts dont add up to the value of the whole we have ‘ fallacy of complacency’ and that leads us on to what happened in Japan over twenty years ago except to say ours will be worse because we have no idiginous industries that export value – added products/ services.

  7. Humpty Dumpty :

    Who was behind the wall ?

    Who built the wall?

    Will the wall fall too and why?

    Oh why Humpty do you make us all angry ?

    Can you smile Humpty ?

    Is there a river behind the wall or a flood?

  8. Mother Byer – if she were around she would ban all food imports that cannot be substituted by home grown foods on the basis of inability to pay in the future.That would be reasonable to the sellers otherwise they should face bad debts in the event of national inability to pay.This policy would enable farmers to increase their incomes and repair their roads.

  9. Deco

    Let’s not forget we have 800 quangos that are also of no worth to the people.

    Stick the quangos on Ebay and sell them to the highest bidder. And also I would like to know what the state got for the 400 Million Euro plus that Johnny Cash threw at the Farce Association of Ireland when the ESRI were holding off from telling us that a recession was coming.

    Anyone prepared to buy Anglo Irish Bank, or INBS. Or the rights to Ahern’s “work of art”. Let’s start by selling the rubbish.

    Coillte is a national asset, and if it is to be sold it should not be sold like our exploration rights for hydrocarbons which were sold for a song to multinationals. And our ports are strategic enterprises. But I think that Dublin Bus/Bus Eireann, and the trains part of Iarnroid Eireann(the state should retain the track and the stations). RTE could also be flogged off, and give TG4 to the Galway local authorities/Kerry CC/Donegal CC to ensure that continues it’s remit. The current scenario where Gerry Ryan earns more than twice Barrack Obama’s salary, is ridiculous.

    • Tull McAdoo

      @Deco “The current scenario where Gerry Ryan earns more than twice anybody’s salary, is ridiculous.” Fixed that for ye there Deco, ;-)

  10. Malcolm McClure

    W are a small country with widely dispersed and mostly unprofitable services. Like happened with Telecom, potential purchasers of public assets will cherry pick the profitable bits and leave the culchies to hang in the wind.

  11. G

    Asset striping, privitisation etc is the neoliberal way, in Bolivia the people rose up and kicked out Bechtel and some French operators who were trying to privitise the water supplies, it could come to that here but it would take time. As for one poster saying, a country is only three meals away from revolt, well again we are venturing into the area of Food Security/Insecurity – something developing countries have been experiencing with a lot more frequency in recent decades – Hait being yet another example of same.

    Time will tell, but it is shaping up to a vicious time especially if Cowen decides to sell off State/semi-State assets (which will lead to more problems in the short (unemployment) and long (inefficient, costly services) terms……………..

    If things go bang here and the IMF do come calling (after the ECB has been exhausted) then this will certainly be the Cormac McCarthyesque road, plenty of precedents.

    I said it in 2005 and I say it now in the words of Weimar Finance Minister Gustav Stresseman “we are dancing on the edge of a volcano”

    Might I suggest David that you pen something on the collapse of Weimar, the massive inflation that followed and the Depression (wipe out of the German middle classes and their savings) – you merge history with contemporary events in an interesting way.

  12. Deco – who does Humpty Dumpty look like ?

    • Deco

      Well, I am bamboozled. The list of potential humpty dumpties is long enough.

      I reckon putting Humpty Dumpty on the wall in the first place was Martin Cullen’s idea. Or maybe it came as a result of the vision of De Dithering Drunk from Drumcondra ? Maybe Noel Dempsey hit on a brainwave. And Johnny Cash was there to deny that Humpty actually fell. Mary Coughlan assured us that Humpty would be fixed by thinking smarter. Though by definition that rules her out of the solution plan for Humpty.
      Lenihan is telling us that in the Long Term Humpty will be fixed.
      Humpty Dumpty – I supposed the candidate would have to be fairly round, and unassuming. There would have to be a balance problem. The minister for Health maybe ?

      David – told Humpty to get down of the wall. And Eddie Hobbs told Humpty that he looked ridiculous up there in the first place. Senator Shane Ross warned Humpty that there was something fundamentally flawed with the wall.

      I just wonder who built the Wall. Captain Zoe or McNAMA.

  13. Thinking it through: privatisation
    by Chris Harman

    Privatisation has been one of the great capitalist crazes of the last decade. From Moscow to Milan, from London to Lima, from Bombay to Budapest, it has been the device which is meant to give new zest to stagnant economies.
    That is why a trend which started with the most tentative steps by Thatcher in the early 1980s is now accepted as the only way forward by governments throughout the world. Yet the question, ‘What’s in it for the system?’ is not as easy to answer as it might seem.
    After all, in the previous 50 years statification, not privatisation, was the trend throughout the world system. Governments as varied as Hitler’s and Mussolini’s, Baldwin’s and Peron’s, took major industries into state ownership. The trend continued right into the 1970s, with the state ownership of major industries in bastions of Western capitalism like South Korea, Taiwan and Christian Democrat run Italy.
    Governments were recognising two important points. The crisis of the 1930s had shown that many capitalist firms needed the protection of the national state if they were to thrive in an anarchic world system populated by capitals more powerful than themselves. And there were many examples in the historical record of ruling classes who had been highly successful, not on the basis of individual private property but through collectively exploiting the mass of people via their hold over the state.
    Tories like the former prime minister Harold Macmillan were recognising these facts when they argued in the mid 1980s against Thatcher’s privatisation drive.
    Now the assorted enthusiasts for privatisation, whether veteran Thatcherites, born again Blairites or refugees from Stalinism, all claim privatisation is the answer because it introduces great efficiencies and cuts costs. State industries, they claim, are almost by definition ‘bloated’, ‘featherbedded’, ‘costly’ and ‘inefficient’.
    Amazingly, however, few figures are ever produced to justify such claims. Perhaps this is because studies of privatisation do not in fact bear them out.
    The most recent is a detailed study of 11 privatisations in Britain – all the major ones except for coal, electricity and rail. Published as a book entitled The Impact of Privatisation by Stephen Martin and David Parker, its conclusions are very detailed. But the overall picture it paints is that privatisation was rarely followed by any gains usually promised from it – except in terms of profitability – and even this was a short term and not a long term improvement.
    Thus it argues that ‘neither private nor public sector production is inherently more efficient’ and there are ‘mixed results on productivity’.
    It goes further and suggests that when there are big improvements in productivity and efficiency, they occur in the pre-privatisation period when managements prepare for sell offs (and aim to build up their own potential salaries and share options) by forcing through massive cuts in the workforce. There is evidence of this: ‘an initial shakeout effect, with relative value added growth improving following the announcement of an intention to privatise, was found in seven of the 11 firms.’ But after privatisation the picture is very mixed, so although in five of the 11 firms ‘relative value added growth increased in the four years immediately after privatisation’, in the other six it stagnated or fell. And privatisation certainly did not give new zest to the rest of industry, since ‘value added growth in seven of the 11 firms was less than in the economy as a whole’.
    The big ‘gain’ was in terms of profitability, with ‘an increase in 28 of the 40 comparisons’ that can be made between the situation in various phases before and after privatisation. The hype about privatisation was – not surprisingly for readers of this Review – not about efficiency or dynamism, but about creating conditions in which workforces were culled and those remaining slogged harder for a smaller share of the cake.
    But even this is not the end of the story. For, the study suggests, profits which were driven up in the run up to privatisation have not always endured, with ‘a number of companies suffering a deterioration in profitability’.
    It seems that workers who were thrown on the defensive by the threat of privatisation have to various degrees learnt to assert themselves under the new regimes. ‘Most recent figures show wage relativities recovering in most companies’, except for Associated British Ports, although ‘the share of income going to labour has declined in all instances’.
    In any case, privatisation certainly does not do more than slightly ameliorate the downward trend in profitability which Marx insisted was one of capitalism’s biggest headaches. But this leads us back to the question we started with: why the enthusiasm for a measure that has such little long term effect?
    The answer lies in the ‘short termism’, which, far from being some peculiarity of British capitalism as people like Will Hutton would have us believe, has always been the response of ruling classes as they become engulfed by a long term crisis of their mode of production.
    The fall in returns of private capital lead its bosses to look for quick takings from the former state owned sector. A host of Tory small businessmen and New Labour local authority managers and councillors see they can get in on the act. Big companies believe a fragmented workforce must be a weaker workforce. And governments see a magical way of getting the cash to balance their books as economic slowdown hits tax revenues – a modern equivalent of the desperate resort to tax farming that characterised European absolutism in its period of crisis.
    Finally, drawing all these strands together is the question of ideology. No ruling class in history has ever been able to admit that its system is going nowhere. It always has to have some scapegoat to blame for what has gone wrong and some magic remedy to return it to its golden age.
    Not only does privatisation provide the fat cats with cream. It also has the intoxicating effect of making them ignore symptoms of sickness in the system. But that, of course, can be disastrous for them.”

    • Tim

      Furrylugs, ah yes; cf: privatisation of waste-collection by local authorities in Ireland over the last ten years vis a vis the number of councillors/former civil servants in partnership with local business people that formed the private waste/recycling companies.

      • C’est la Vie as is most of the UK’s electricity system being owned by France (EDF).
        This is exactly what Lemass wanted to prevent. Critical resources remaining within the control of the State. Pity we can’t turn the State into a Semi-State and reform it.
        Selling the family silver goes hand in hand with throwing out the baby with the bathwater.

        • Deco

          We can’t even reform the semistates, never mind the state.

          Just look at CIE. It is nepotism, wastage, cronyism and incompetence wrapped in aluminium and all loaded onto wheels.

          First step – abandon the fee for accessing documents on public companies. (Yes, it truly is unbelievable that they are called public when nobody in the public seems to know what goes on in them except as a result of somebody like Senator Shane Ross/Nick Webb spilling the beans).

    • G

      Useful, thanks for posting.

      short termism in business and short termism in politics!

    • coldblow

      Good article. I googled Harman – SWP (not to be confused wth Healy and Redgrave’s WRP cult).

      Here’s an interesting article from Hutton (who Harman mentioned) which has some relevance to this.


      • Deco

        France actually has been going nowhere for twenty years. IS this from lack of planning, or two much planning.

        Hutton points out that nationalized sectors were squashed as a result of political interference in the 1970s. We have seen, and can expect the same here. Any sector where there is no natural monopoly, privatization makes sense, because falling prices and competition benefits the citizenry.

        But in any sector where oligopolies can be established, then there should be either competition policy or state ownership. Competition policy in Ireland is simply never implemented. IBEC make sure of that.

  14. Apologies to you all as I am back posting sooner than I had intended .

    Australian Government is not taxing its banker bonuses – because it sees the US and UK tax on bonuses as an opportunity for the Australian banking industry.

    Which brings up 2 points 1) Were the Irish Banks right to have tried to punch above their weight over the last 20 years (their execution being at fault) and 2) should Irish banks (and country in general) be taking advantage of the US and UK tax on bonuses.

    I recently posted that of 8 financial centres surveyed by Bloomberg; London (highest rate) bankers were being taxed circa 750,000 of every 1m sterling earned / Hong Kong (lowest rate) about 170,000 of every 1m earned.

    As part of my effort in trying to keep this site positive – I have an interesting idea for Dublin which might alleviate some of its property problems.

    On my vegetable patch I bought 4 types of potato seeds (all very English sounding names – altho they actually originated in Scotland) – which cost 21 euro. The economics here are not particularly beneficial as even if I achieve maximum yields – 21euros spent in the supermarket would cover much of my annual potato consumption. Throw in the 3 trips to the Physio for treatment on my back plus the capital cost of setting up a vegetable patch – it makes no sense. However my cholestrol profile change over the last year was quite remarkable – as my good cholestrol doubled. And Ruairi if you are still reading this far – maybe the Northerners know something about future direction of gold prices!

    • But if you added value by planting Marigolds throughout the patch(For pest control) thus enhancing the yield, they could have been sold on together with the pods of herbs fulfilling same function?

    • Ruairí

      Always reading Phil ! 24/7 on my smartphone (I let it do the thinking for me yes, yes, detractors…….)

      PhilRuss1, UI think we can be positive, solution-focussed and lay blame (if only to ensure that the same peoplewho made massive mistakes / committed deceptions) are not part of a flawed or skewed remediation also.

      Gold? despite the old argument about gold being a hedge against inflation, all bets are off now. Gold is a hedge against government stupidity and the worm has turned. Too many dollars, too many derivatives. Too many calls for payment. Get some gold. Digital is fine, IMO, once its Bullionvault or Goldmoney.com. Buy it in Zurich. Get your currency out of Ireland while you can :-)

      ps your two points follow closely the remit of a recent DmcW article on wooing a merchant bank or two to the IFSC. if you haven’t seen that article, 6-8 weeks ago, then when you post there, be prepared for vociferous interplay, as that was one of the most polarising articles of all of David’s recent writings!!

      • Ruairi

        I cant access the posts on David’s article re IFSC – only the article itself, of which I am in total agreement with. Doubly so since Obama’s punch yesterday.

        The idea I had for Dublin (along with cashing in on the politicising of the banking industry) was to set up a large scale “University of Europe” as a centre of excellence and EU academic integration in Dublin.

        The goal being to bring together the best 3rd level students from all the European Union – and set in progress a network of excellence for the future.

        Why Dublin: Its English speaking’; its on a gateway to Europe; it has the sites and accomadation (through NAMA);

        Gold – trouble with Gold is it doesnt provide an income – its appreciation only. Yes, with hindsight, wish I had bought some (Rabodirect have funds re same). 2 years ago I did not foresee / understand the extent of the precarious state of the world economy. Inflation I thought was the worry – and shares are usually a good hedge against inflation. I got it completely wrong.

        • Sod Dublin Phil.
          Why not Cork?
          Good idea but geographically challenged.

          • To close to home Furrylugs – its nice and tranquil living down in these parts.

            Counter arguement to the geography is that its kind of the same for everyone to get here (unless you are Irish – but we are challenged with a lot of other things).

  15. Philip

    Well, it is good to know that we have more empty houses than realised by our esteemed Mother Hubbards.. With a total of 300K plus and rising – and this with no input from the construction industry, I see a huge opportunity for mushroom farming (all types) and the cultivation of a lot of other things that like to be out of the wind and the rain and instead be in dark warm little rooms. Afghanistan….move over.

    • Tull McAdoo

      Philip ,I raised all this housing supply stuff, including highlighting Leitrim which Kitchen from Maynooth was on about yesterday on Newstalk, together with Mary Coughlan i.e. the Sociologist not the dumbass from Donegal. Are we getting to far ahead of the curve here on this forum and leaving the bulk of the people behind ???. or what I fear most i.e. the main stream media are staying just far enough behind the curve to give the impression that they are reporting on current issues but are really reporting after the FACT.????

      • Ruairí

        The graceful intellectual that is Mary Corcoran. Ah yes, a world apart from the Darwinian Donegalian.

        I studied under her for 3 years at Maynooth. A beautiful mind in every sense of the word. Still wowing the masses of fertile minds.

    • Dilly

      Ghost estate milking parlours.

  16. Philip – you are talking about ‘ Kat’ or q’at’ ( a drug ) what you really mean is ‘Squat’ is the new business for young people .

  17. Philip

    We could sell bankers or rent them out. They seem to have magical properties that defy the usual laws of economic gravity.

    Indeed we should consider doing the same with Feel and Fail. They look harmless until you start dipping them in loose credit. Economic gremlins all over the shop before you know it. CIA may be interested in them as a weapon of mass economic destruction. Maybe we could have an auction between between China, Russia and US.


    Humpty Dumpty =Biffo!.Ireland has missed the windfalls generated by privatisation, thanks to the crazy level of pension liabilities.How about turning Donegal, Cavan, Leitrim into forests ?.The climate is ideal and there will always be a demand for wood, it is environmentally friendly ,there won’t be many people living in those counties within a decade!, the land will be virtually worthless.Desperate times, radical measures.

    • Dilly

      There was planting carried out in the west about 20 years ago, but it was not nearly enough, just a token gesture.

      • Depends on what type of trees to grow.

        Our wet conditions mean that conifers grow at something like twice the rate of those in Scandanavia. However their stuctural integrity is about half – which is why much of it ends up for pulp.

        The thing is did we build our houses with Scandanavian wood or Irish wood? Because if it was the latter then in a few years time we wont have an excess supply of property…….

  19. Colin_in_exile

    Can we sell our social partnership model to some Godforsaken country? They’ll get ICTU, IBEC (including SIPTU et al) & we’ll even through in the Labour Court and a few hundred overpaid underworked technophobic Air Traffic Controllers!

    • Colin_in_exile

      Correction ; Can we sell our social partnership model to some Godforsaken country? They’ll get IBEC, ICTU (including SIPTU et al) & we’ll even throw in the Labour Court and a few hundred overpaid underworked technophobic Air Traffic Controllers!

  20. Were we to namatise the bankers whereby we obtain their expertise for 10 years plus, free of charge it could make better sense and a lump sum payment from their coffers depending on their age.

  21. Haveaniceday

    Seriously, who in their right mind would buy Irish stocks?

  22. Bit off topic but maybe pensions are an asset (or not?

    On the one hand, this is being said;

    But on the other hand come this glum assessment;


    Both reports by Mercer.
    My “Spin” detector just shot off the radar……..

    • Ruairí

      Not at all Furrylugs. I think bringing in pensions to the discussion is ‘airing the cupboard’. It stinks in there.

      For as long as we’re all posting, I think we can agree that we’ve been essentially talking about value for money, whether that is n houses, shares, public services, oil exploration rights, etc etc. And of course, moneylending, which Wills constantly points to as abused and purposefully convoluted (and StephenKenny discusses it as of yesterday, on the last article, which Malcolm rightly suggests he should re-post here due to its relevance).

      Any value investor would look at any company (semi-state or otherwise0 and factor in pensions (provisions, funds and future obligations). So yes, you are 100% right, they are an asset, although whether that’s an impaire asset or not depends on the fund in question and the snapshot in time.
      Bad time to sell anything.
      Anyone for a copy of “The Richest Man in Babylon”? I have only 5000 copies left and a start-up SAE home business kit for you. Just drop me a line at FF HQ, where all the good sh1t starts……..

  23. Philip

    Can NAMA approach ECB to extend its remit to include property in Spain and Greece? And maybe even distressed assets in other parts of Europe. we could leverage the taxpayer income from several sources and distribute gains evenly or to the benefit of the ECB. The way I see it, a combined effort could be used to muddle the Euro pond completely and create a Euro run which might solve export issues and spending mismatches in one fell swoop.

    The problem with Europe is down to a lack of synchronisation. Not everyone is in the same room making plans. So we have been getting the bum’s rush for “serious matters ” since we joined Europe from day 1. Well, the “serious matters” are taking place in the bum community and if they allow this sell off to happen, I could see a situation where Europe will loose control to the Chinese of the fishing area around Ireland and related resources. Interesting times it could be indeed.

    • Deco

      All that is required is a politician who would be upto the task of selling everybody out. We could call such a figure Rambo 2.0. Or seeing as you are talking about fish – we could just call him “Ray”.

  24. John_stafford@ireland.com

    Old Mother Hubbard
    Went to the cupboard
    To get her poor doggie a bone,
    When she got there
    The cupboard was bare
    So the poor little doggie had none.

    The Old Mother Hubbard referred to in this rhyme’s words allude to the famous Cardinal Wolsey. Cardinal Thomas Wolsey was the most important statesman and churchman of the Tudor history period in 16th century England. Cardinal Wolsey proved to be a faithful servant but displeased the King, Henry VIII, by failing to facilitate the King’s divorce from Queen Katherine of Aragon who had been his queen of many years. The reason for seeking the divorce and hence the creation of the Old Mother Hubbard poem was to enable him to marry Anne Boleyn with whom he was passionately in love. In the Old Mother Hubbard song King Henry was the “doggie” and the “bone” refers to the divorce (and not money as many believe) The cupboard relates to the Catholic Church although the subsequent divorce arranged by Thomas Cramner resulted in the break with Rome and the formation of the English Protestant church and the demise of Old Mother Hubbard – Cardinal Wolsey.

  25. coldblow

    Privatization? Bring it on!

    The assets will make a profit (well, short term anyway). All you have to do is export the people laid off as a result (for the common good) – I’m sure somewhere will take them in (and pay them a pension).

    Those remaining will therefore have a higher standard of living (going forward) as there will be less to share around. Fewer people means fewer roads, reservoirs needed etc. Foreign capital will flood in. And (‘to be fair’) the country will look so much neater too.

    Here’s an idea. Some of the ghost estates could be turned into Irish Legolands, but here’s the thing, only life-size!! What can we call them? Deckland, Debtland, Dell-land..

    But David has got it wrong. It won’t be a firesale because the government will sell the assets at……………………. LTEV!

  26. Humpty appears in Lewis Carroll’s Through the Looking-Glass, where he discusses semantics and pragmatics with Alice.
    “I don’t know what you mean by ‘glory,’” Alice said.
    Humpty Dumpty smiled contemptuously. “Of course you don’t — till I tell you. I meant ‘there’s a nice knock-down argument for you!’”
    “But ‘glory’ doesn’t mean ‘a nice knock-down argument,’” Alice objected.
    “When I use a word,” Humpty Dumpty said in a rather a scornful tone, “it means just what I choose it to mean — neither more nor less.”
    “The question is,” said Alice, “whether you can make words mean so many different things.”
    “The question is,” said Humpty Dumpty, “which is to be master — that’s all.”
    Alice was too much puzzled to say anything, so after a minute Humpty Dumpty began again.
    “They’ve a temper, some of them — particularly verbs, they’re the proudest — adjectives you can do anything with, but not verbs — however, I can manage the whole lot! Impenetrability! That’s what I say!”

    Sounds like the FF press officer,,,,,,,

  27. Jonathan Hannon

    All this talk about privatisation…there are many area’s that should be privatised, but we need strong regulatory bodies to ensure we don’t have another Eircom situation. Its interesting that a governement that contemplates privatisation as a fiscal and even an ideeological point of view could be fervent in their socialisation of debt. Now the debt belongs to the taxpayer. The system is saved once again. And here’s another little caveat that was kept quiet. The infamous Rothschild family have been appointed to “advise”, here’s the blog – http://fiddleferme.blogspot.com/2009/09/rothschild-as-irish-government-adviser.html. The sad thing about it is that the people on the streets have never heard of these people, dont really get Nama and have allowed themselves to be duped into the whole “bailing out developers” arguement put forward by the labour party. Truth is most of these developers weren’t smart people, they were just lucky enough to have a bank manager that could push their cause. The vast majority lost their shirt and bet the house!!! Yes Nama will take away their debts, but for these people image and impression was everything and now their driving second hand cars. Most of them are tragicly flawed people, once their money and possesions are taken away they have nothing. The real story is a simple bail out of capitalism once again. Judging by who the government have appointed there are far more sinister and powerful forces at play here. The government are happy to let the people think its really about bailing out half wit builders. The future and prestigue of the whole Euro is at play!!!


    • Dilly

      My Father was good enough to inform me about these guys, even when I was back in school. He used to also try and inform his friends during dinner parties, but they used to just laugh. He predicted a federal europe and a signle currency as far back as the 80′s. He also predicted an eventual one world currency controlled by groups, such as, the Rothschild’s.

    • wills


      excellent, i though would say a ‘bailing out of MONOPOLISTC capitalism’ moreso.

  28. wills

    Family silver is government bond issuance.

    The bond issuance / family silver is been thrashed by who can get to it and thrash it, do a smash and grab on it.

    Using the states bond issuance to set the banks up with 54 billion euros is thrashing the family silver.

    • wills

      ‘thrash’ should read ‘trash’.

    • paddythepig

      The banks are getting 54 billion, but are surrendering loan assets – some good, some terrible. The transfer to the banks is actually the 54 billion minus the true value of all the assets, whatever that may be.

      Plus, don’t forget the national debt explosion. That’s not selling the family silver ; it’s selling the family – especially our kids – down the swanny to pay for a state which doesn’t know how to stop blowing money left right and centre.


      • wills

        The bond issuance has been trashed before and will be trashed again until we remove the tyranny of a central banking model to run the economy.

        All of us will be better served by a banking system run on credit provision worked as a utility.

        The working as credit in a usury fashion will always spell disaster for all of us one way or the other.

        Mind you it all holds together by a simple confidence trick, which is the paper money confidence trick pulled on the serfs.

        Put simply, its conditioning the serf into believing paper money is invested with value.

        Break the spell on the sheeple and the central banking tyranny will fall.

      • Original-Ed

        According to Morgan Kelly’s paper in December, the Banks will have a shortfall of 6Billion for every 20 Billion transferred to NAMA and that’s with the generous 54Billion formula. How are they going to bridge that gap?

        • paddythepig


          Put everything – public service salaries, bank bailouts, NDP, quangos – on the Visa card, seems to be Govt policy. What’s another 6 billion eh? It is supposedly good for us that we are able to borrow all this money. Yeah right.

          Where are the industries that will pay even the interest on this in the future?


          • wills

            The ‘controlling interests’ understand that national debt is an illusion of sorts. They do not perceive the debt in the terms the meeja trained masses do.

            The ‘controlling interests’ realize that debt manufacturing is a means to power and control and the bigger the debts they can get away with making without undermining the central banking schemata over all the better as far as they are concerned in relation to their controlling interests.

            While the ‘controlling interests’ are cooking up the next POnzi scam to pull they have arranged for the masses to be loosing sleep in their beds with worry over a debt which is merely something built on paper for god sakes.

          • paddythepig


            Tim, you asked about Alan Ahearne and where he’s at. Well here’s the man himself in a recent lecture in NUIG.


      • Ruairí

        What’s the answer to this Paddy? Do we insist as a people that political pensions are tied into a performance basis and reviewed by multi-party committees? Its a hard one to call. But some mechanism must be introduced to head short-termism off at the pass.
        I mean, look at the Greens. Whether we agree or disagree with their ideology (professed, though I don’t ever see it), they have reneged on almost everything they were voted in for. Can that sort of anti-democracy go unpunished any longer? They used the Michael McDowell “Watcher” doctrine to get elected. It meant something to most voters, non-greens included.
        The national debt explosion is African in proportion. You are correct. We have set our people up for direct enslavement.

        • paddythepig

          Ruairi, I think it’s the same problem that any individual would face with a Visa bill. First step is to cut wasteful spending down to the bare minimum ; we’ve only started down that road, far too slowly in my view.

          Simultaneously, it’s time to think about how to generate more wealth, and with it more revenue. That’s a complex, multi-faceted question. Will post my own personal views on that when I get more time, others will have ideas based on their individual experience. For the country as a whole, we need the best ideas to come to the fore, to be nurtured, and to ultimately produce a return. It’s our only chance.

          Question is : is this possible in our current culture? I don’t think so personally, the odds are too stacked against the genuine innovator and risk-taker, and are too in favour of either ‘playing it safe’ or ‘scamming the system’.


  29. We have nothing in the cupboard no doggie and no bone and if you think about it we have no cupboard either.And mother cupbord has emigrated .

  30. wills

    Old mother hubbard / controlling interests,

    went to the cupboard / place of state bond issuance NTMA,

    and grabbed the bone / bond issuance (in of itself no value).

  31. Ah Nursery Rhythm’s myabe this is what WE Really Need , that is to learn from the ground up start again, learn to crawl before driving off in the over priced Mercs. !.
    The Irish cupboard is for sure bare and also lacking in any social fibre. Greed has surpassed ignorance, selling off semi state bodies will not solve our problems as what would our present bunch of school boys do with the win fall only bet it all on one of Charlie McCreaveys horse tips, that’s if they don’t set up a few hundred quango’s to study and do reports on international economies .
    Our Air traffic controllers are showing us what is wrong with the system and when you hear Our Minister for Transport saying it’s nothing to do with him !,…this should show you we need change , if it takes not having three meals for a day to start a revolution……well then I’m skipping my dinner this evening !

  32. Ruairí

    Hi Furrylugs, Bertie developing a structured, sustainable development programme? I’ve seen it all…….
    Maybe he’s the leader that we’re all crying out for. Socialist, environmentalist, writer, philosopher, father, grandfather, Republican, European, metrosexual, Dub urbanite yet son of a farmer…..

    If he ever returns, I’ll beat David to the razorblades in Aldi and top meself……

  33. Alan42

    We will at some stage in the near future privatise both education and health . We keep a core element of both in State hands for the less well off and offer tax breaks to the rest . it will save a fortune .

    The really big one is the outscourcing of the work of the civil service to the private sector . Some will actually do the work offsite but the real action will be for employment agencies to provide minimum wage casual workers for employment in the civil service .

    We will see a complete overhaul of employment law allowing for the widespread employment of casuals .

    When things get bad people tend to beome more right wing and are willing to acept right wing solutions . If you doubt this then consider the attitude towards immigrents , unions and the whole civil / private sector civil war .

    FF and The Greens who are both right wing . Lets face it the Greens are right wing . They are mainly upper middle class and love to tax anything that is not a tree . Check out their turnaround over Shell , their willingness to acept NAMA and their willingness to go along with social welfare cuts at a time of high unemployment .

    So the civil service is expensive and we are broke so we hange employment law , sack most of the civil service and employ casuals at a fraction of the cost .

    When fighting against pay cuts and pension levies the unions love to point out that most of the civil service are low paid . This means that they are also low skilled . Very easy to replace with cheap casuals then .

    I am not saying this is right or wrong , but this will definitly happen .

    • wills

      the bigger the government the more opportunity to loot.

      • Alan42

        FF could get away with anything at this stage . Banking inquiry to held in private , NAMA , social wefare cuts , reversal of pay cuts for top civil servants , total economic mismanagement resulting in complete meltdown .

        With the recent snow they had a God given opportunity to come out and show leadership and boost their poll ratings . They did not even bother .
        Anyone protesting outside the Dail ? I passed it a few times in the last couple of weeks and no sign of protests .

    • Alan42

      Sorry about the spelling , my C gets stuck on the keyboard . I do know how to spell ‘ accept ‘

    • Original-Ed

      If our air traffic controllers are paid €160,000 and the top ten percent €170,000 to €230,000 while the guys at Heathrow work for £60,000 and senior management £81,000 to £94,000, it’s time for a drastic change.

      • If those figure are fact then go over to Heathrow and offer the people there 80,000 sterling and throw in a house or two.

          • Alan42

            The Indo is a tabloid . I know somebody who works in Eurocontrol and earns 250,000 Euro for a 32 hour week . Air traffic control is a highly specialised job which few are suited to . If the Irish don’t pay well , the controllers simply up sticks and head for Eurocontrol which does pay very well .

          • Colin_in_exile


            How do you know few are suited to working as an air traffic controller? Do you need an mensa membership?

            Is it possible that this new technology would simplify the work required, therefore resulting in the “dumbing down” the job, to be followed accordingly with drops in pay levels?

            As far as I know, there isn’t any university to be found offering a degree in Air Traffic Controlling. No Masters nor Phd available either, so to become one, all you need is a Leaving Cert and a bit of on the job training.

          • Alan42

            Colin , the person I know in traffic control trains and weeds out the ones who are unsuited to the job . Afer 6 months training he is the one to tell them to go. Even with the high level of maths , study of weather patterns ete etc etc if they can’t handle the pressure of two 747′s merging on the screen during training they are out . I once went to a dinner party with him and some controllers . Their idea of after dinner conversation is maths and weather patterns .
            Irish air space may be not that busy but if wages are not competitive the ontrollers will simply move to Europe where the skies are busier but the pay is more . Market forces and all that .

          • Ruairí

            @ Alan42, if their skyhigh (no pun intended) pay is aimed at the character trait of split second judgement under extreme pressure then we have THOUSANDS of candidates for the job; all professional, all white-knuckle merchants, many about to lose their jobs. They’re called merchant bankers.

          • Alan42

            Ruairi , I move in weird circles . I also have a friend who is a merchant banker . Had some dinner with same who complained at length about the public perception of merchant bankers . As their bank has made a profit why should the public object to their renumeration ?
            Everything seems fine in the merchant banking world . Its only Ireland that has suspended action on its banks .
            How old is the GFC ? The world has moved on and Ireland just sits there with still no lending which will murder whats left of the economy and NAMA has not even started yet .

            I also have another friend who is a small time developer / builder who took me on a tour of some ghost estates .
            As we drove around I pointed out that some were occupied as a positive sign . He responded that they were owned by investors who have rented them to Eastern Europeans who are leaving in their droves . Thats a big problem for NAMA and thus the Irish taxpayer .

            Poking fun at merchant bankers is a bit silly ( not having a go at you personally ) But this has moved on from a global problem to an Irish problem .

            We have been left behind and have not even started to deal with our banking crisis .

          • hibernian56

            High pressure, nonsense… Train them on iPhone’s, Theres an APP for that

        • Deco

          Another Ahern deal for the ordinary punter, with vested interests laughing all the way to the bank.

        • Phil , that is a Brilliant idea ! watching Prime Time now and looks like Dublin won’t have drinking water in 4 years ….This is without doubt the most leaderless country in the northern hemisphere .
          Mugabe at this stage is bound to have Biffo and the lads up as his friends of facebook at this stage !

          • Deco

            Sorry – but this must be taking the p155 altogether. There is more than enough water in Dublin. Absolutely stupid. It is lashing down rain every second day.

            Of all the things to be thinking about, Dublin running out of water is the one that tells me that there is something severely flawed in the Irish concept of management.

            How exactly does Mexico City manage to deal with providing water for 20 Million people ? Even Mexico City can do better than Dublin !!!!

      • Alan42

        Check out what the traffic controllers are paid in Eurocontrol and for a 32 hour week !

        • Ruairí

          Alan42, this argument does not wash any longer with the sheep of Ireland.
          Hospital consultants too, said that their skills were mobile and in wolrd demand. But strangely, they stay here?? That’s a con-job. As a small shopkeeper once told my insistent grand-aunt from Glasgow (as respectfully as he could, God help him), who was complaining how much cheaper the apples, were in Glasgow, “Then why don’t you ‘feck off’ back to Glasgow and get them ma’am?” I still say there are thousands of bright, aptitudinally appropriate stellar citizens here to do that work.
          I for one have had enough of people who reckon like the ad “they’re worth it”. Based on pull an connections, no doubt. In a population of 4.5m, and with the world population to draw on, I think we could find able and high-performing replacements, don’t you?
          I refuse to kneel at anyone’s altar.

      • Deco

        We are the paying consumers. And we have a right to better negotiation. This is too much. The fact is that somebody always gets stuck with the bill for this sort of thing. We need to cut down the costs of Dublin Airport and change our attitude towards tourism.

        Otherwise NAMA will be the biggest Hotel chain in Europe and concentrated in one wet miserable cold corner where nobody will go on vacation.

    • This is the GW Bush approach, hollow government. Actually it makes a fair bit of sense, if (and only if) the contracts for providing the services are allocated in the right way, and not just handed to the head honchos best mate.

  34. Dilly

    Papaconstantinou is “afraid of the potential for social unrest if Greece were to issue huge cuts at once”.

    If only we had this problem. But the biggest talking point in Ireland is the latest sub plot on eastenders. The EU must be delighted with Eire’s docile minnions.

    • wills

      I reckon this is due to the fact that the %’s of sell out’s to the controlling interest rule, here, is very high, so, they are well paid off pimps or chemically lobotimized dulcets, and the rest of us are in the minority so as a direct head on physical threat nullified.

      Which is not necessarily a bad thing dilly. Revolting on the streets is easily used against those who are well intended.

  35. MaxKeiser

    When interest rates go up, we are finninshed

    • Ruairí

      Anyone care for any solid projections? Max, when do you see the first big interest jolt?

      Colin exile linked to house price stats yesterday as being at the Spring 2003 at the moment. Can anyone supply projected damage as the rates edge up?

  36. Tim

    Folks, Hubbard is the Irish people/taxpayers;
    The bone was supposed to be normal money-management, but turned out to be the disgusting treatment we are getting from Govt/bankers/oligarchs/IBEC/NAMA;
    The Govt. is the dog:

    Old mother Hubbard
    Went to the Cupboard,
    To feth her doggie a bone;
    But when she bent over,
    Rover took-over,
    And gave her a bone of his own.

    • Alan42

      Tim ( sorry about this ) But as you are an anti government poster how do you marry this with the fact that you are the President of your local FF Cumann and therefore a vital cog in keeping FF in power ?

      • Tim

        Alan42, as explained many times before, this is the reason why I work so hard to change it from within. (not “President”; “chairman”).

        • Alan42

          Tim ( and again sorry to be such a bore and nothing personal )
          You are the Chairman of your local FF cumann , yet you post nothing but anti FF posts .
          NAMA will bankrupt the nation and we have the worst crisis in the history of the State whih has been completly managed by FF . Your children will pay for NAMA and will pay for keeping broken banks alive .

          As Chairman of your local FF Cumann , FF will always point to you as supporting government policy as you are the grass roots and the back bone of the party .

          If you and other like you had the courage to resign then FF would have to take notice as you make up the backbone and power base of the party .

          But as you don’t , the leadership can do what they like . Your silence is support enough . And don’t give me the e mails to BL or BC . You reamain in your position and this is not traffic lights that we are talking about .

          As NAMA is the biggest gamble / scam ever in Irish independence history I wonder what it would take for you to resign in protest . If FF started WW3 ?
          Tim , I hold an Irish passport ( and thankfully an Australian one ) . However my children may decide to once again live in Ireland and when the place is bankrupt , I will hold you accountable . I will chase you down the street screaming ” You Fianna Fail F**cker , where is my money ”

          Tim , do you get my point ? Its nothing personal and I actually like you and if I ever met you I would buy you a pint .

          • Alan42

            I will compromise . When you post your handle could be ‘ Tim , chairman of xyz Fianna Fail cumann ‘
            The sites software will handle this as you just have to change your sign in name

          • Tim

            Alan42, resigning from FF will not change FF; The only candidate I supported in the last election was Joe Behan. He resigned in protest against the education and medical card cuts.

            As a consequence, he has not been able to continue to assist the rest of us in the grass roots who feel as I do about the current Parliamentary Party/Leadership.

            No-one outside of a political party can bring about change in that party. Only tenacious, conscientious, people from within a party can have any hope to influence its direction and future policy.

            The course of action you are suggesting is for all of the good and decent members to resign in protest, thus leaving all the shysters alone, without any opposition, to continue doing whatever they please. That wont achieve anything, except make their lives easier.

            If all of the dissenting voices leave the party, you leave the cronies and shysters to back-slap eachother all the way to the bank, with no-one “in the room” to shout “stop”.

            If that is what you want, I’m afraid I must disappoint you. I am not ready to surrender to these people. Even if I am replaced as Chair, I will remain, apeaking-out in opposition, from the floor.

          • Ruairí

            Alan42, I agree with Tim here. And this has been done so many times, that the angle is as worn as a TD’s handshake. Seriously. And nothing personal.
            The parliamentary party does get uncomfortable when the grass roots rock the boat and speak out. Its just not cricket.
            I have to say that the fact that Tim openly challenges his own party is healthy and politically very un-Irish . It reminds me of the English parliament where you have several dissenting camps in the same party. That’s healthy. Its not Bertie’s idea of paradise and hence the malahide gang and the Country & western gang made peace in FF. But it is the vibrant reality of good politics.
            I am glad that a FF voice of dissent appears regularly on this blog. I know my grandfather and many decent, ordinary Irish people never thought the party they supported for a fair Ireland (and FG have /had their own valid vision too) would end up being so Thatcherite in their implementations.
            Soldier on Tim!

          • Alan42

            Tim , I don’t buy it . Why do you remain true to FF ? CJH was as corrupt as you like . A Reynolds seemed honest enough but then we had Bertie with no bank accounts . He was leader for what ? 12 years or so ? Ray Burke ? Liam Lawler ? Galway Tent ?
            Happy to be in a party with P Flynn or his daughter ? Ditto for Willie O Dea .
            How about Minister for transport or the Minister for go F**k yourselves , I am on holiday . Mary Coughlan , happy about her ? Would you and your Cumann clap if she came and gave a speech at your Cumann ? Would you clap if BL came and gave a speech ? Or would you say he is great in how he is handling his illness and throw up a few objections about NAMA ?

            I ‘ll tell you what , they would laugh all the way back to the Dail bar at your blind support and tut tutting over NAMA because at the end of the day you are the party base and will turn out with leaflets at the ready next election willing to do their bidding .

            Through NAMA which you support we will see developers charging NAMA massive fees for their expertise . You will come on here raging against same but through your actions and support you have baked his to the hilt .

            You are in your 40′s ( I think you said that some where on this blog ) So give me two Taoiseach’s and 10 Ministers within your political lifetime that you really admire . In short give me some hard evidense to back up your Fianna Failness .

  37. Tim – you have explained your principles so many times and we all agree with you .Its a pity that some make you do it again.

    • Tim

      John ALLEN, It may not be a pity if new posters can learn something from it, by expanding their thinking. Thanks.

    • Alan42

      John and Ruairi , I am sorry . Its just me . I have this thing about meeting business people who have no idea about cash flow in 2010 and having to lay off hundreds of people with real life problems , responabilities and debt .
      I have this weird sense of worry of driving around ghost estates with a developer who is pointing out the Irish banks problems .
      I also had this weird sense of concern on hearing about another developer who I kind of know who owns about 200 million in Irish property ( conservative guess ) who spends his time in his office doing crosswords while waiting for NAMA who is rumoured to have had a nervous breakdown .
      I have problems with somebody who supports a party who is backing all of this to the hilt .
      Of all the scary stories and tours I had on my recent visit to Ireland the scariest was of a friend who owed 400 Euro on a credit card who also has 100,000 Euro on deposit in the same bank . They forgot about the payment and missed the date because they were going on holiday . The card was cancelled the very next day . Think about that . The banks have no money .

      I also have this thing about unemployment and the social rot that it causes . I have this thing about managers who pay themselves a fortune while driving the company into the ground .

      I have had it with this site . I like the articles but I live in the real world and I will leave you to your abstract ideas and glee about rising interest rates and conspiracy theories .

      • Ruairí

        Alan42, with respect, you get a few tours through warzones, like a tourist on a Paddywagon, then you offload that shock and horror onto us in the form of transmuted emotions?
        EVERYTHING that you have noted on your travels, we all, too, have seen and heard. We are all on the same frequency, I feel. You have, on the one hand cheerleaded for airport traffic controllers to get an increase in a deflationary car crash economy and, on the other, pointed out the outer limit ‘expressions’ of a credit and inflationary fuelled society.
        Stay and debate. What conpiracy theories do you refer to? Aliens (I was joking!?) or the fact that the government is running things for a distinct minority, against the flow of market economics?

        • Alan42

          Bloodly hell , I am back already . Ruairi , I know business people . I know some very big players who employ hundreds of people . I know one guy with a contract with the biggest company in the world . None of these people can get cash flow . I asked the guy with the contract what he will do . His answer was ” Well there’s another 100 people on the dole ”
          My point about ghost estates is that there is a lot of small time investors involved who will not be going into NAMA and as you can’t get blood out of a stone that is the banks problem and therefore the taxpayers problem .
          They just took 4 billion out of the economy in the last budget but take a look at how much they are going to throw at the banks with recapitisation sometime soon .

          Myself and my Brothers are in business . Have you any idea how many people have approached us for a lifeline in the last two years ? These people are friends . But do we throw cash at them or take a controlling interest in their business or let them go to the wall ? If you think personal guarantees are limited to property developers well think again . Most businesses took out loans on this basis in the last few years .
          Do you think its fun to have a guy’s wife on the phone looking for us to step in to save their business and thus their house ? Thats not a good experience .
          Another guy I know with a good business just wants out . He’s burnt out after 2009 and just can’t face 2010 with the cash flow problems and having to explain to staff about wage cuts and lay offs . He’s been in the labour court 3 times last year with difficult employees . Call him a lightweight but he has been in business 25 years but can’t get a cent out of the banks .

          And finally Air Traffic Controllers . You pay them or they move to Eurocontrol where they will get big money . And as traffic controllers work through English its very easy for them to do this .
          Its a waste of money to train them up only to see them move to Eorocontrol . Not even O ‘ Leary can get around that one .

          But really I am gone from this . I can’t stay on a site with a FF diehard who only posts anti FF posts . Its so Irish .
          Good luck . And thats final .

      • Colin_in_exile

        Alan, I appreciate your comments. Keep it up. They are obvious and valid points.

        Tim, would you be able to explain to us in summary how effective your internal opposition in FF has been so far? What are your goals by staying in FF? How realistic are you in achieving your goals? What has to occur before you contemplate leaving FF?

        Please don’t take this the wrong way. Its not just about NAMA. Its about running the country.

        By the way, I would have attended the march against NAMA, but I was in exile at the time and was working unsociable hours at the time.

        • Tim

          Colin_in_exile, I have no objection to answering the questions that anyone asks, including Alan42′s questions.

          I have a problem with spending my time typing answers that appear to remain unread. Over and over and over, again.

          We should continue to address the real issues. The question, “Why is Tim a member of FF?”, has been answered many times-over.

          If you have read what I have written so far, I find it difficult to understand why you are still asking the questions that you are asking.

          • Colin_in_exile


            I’m not interested in why you are a member of FF, that’s your free choice and you do not have to explain to anyone who you choose to assemble and associate with.

            The above questions are new questions, you say you are trying to effect change from the inside, and I’m only enquiring how well you are progressing with your aims, and how do you measure how successful you are in your efforts in achieving your goals so far. That’s all.

          • Tim

            Colin_in_exile, clearly, so-far, my efforts and those of thousands of grass roots members, have FAILED completely (but, I have posted that before, too).

            That does not mean I should surrender to the shysters; it just means that I/we have to try harder/come-up with something new.

            Giving-up will achieve nothing.

            I continue to add to my arsenal, by learning here.

            I appreciate what I am learning.

  38. paddyjones

    David always puts things in such a round about way, he is a bit like Geramy on top gear its all in the presentation.
    But I was genuinely astonded by the shortfalls in pension schemes, these semi state bodies are insolvent and thus are worthless. What potential buyer would pay money to inherit Irish workers of their ilk anyway, most of them are overpaid, lazy and unemployable elsewhere.
    To me it is a non question realistically privatisation cannot happen even in better times.
    The solution is simple, cut government spending drastically now, more than the current plan of 2014.
    e.g. cut public pay by another 10% , cut quangos , reduce social welfare, etc etc. It is going to be hard but needs to be done

    • Tim

      paddyjones, factor-in the fact that over 60% of private-sector workers have made no pension contributions/provision whatsoever (and will rely on the state-pension instead), coupled with the fact that the NPRF has been raided to throw some €11 billion into bank black-holes………

      …… with plans to steal the remaining €13 billion in the fund, put aside to cater for future pension requirements.

      • paddyjones

        Tim , who said private sector pensions are a good idea anyway. It is money you spend that you can’t touch until you are 65 even then you only get 25% of it as a lump sum the rest they buy an annuity with taking their cut ….sounds like a bad deal to me

  39. Tim

    Alan42, Do you read anything?

    I am not trying to “sell” you anything and, really, the means by which I oppose the injustice of the ruling party in this country is none of your business.

    I chose, freely, to post on this blog in an honest fashion and declared my political activism, rather than hide the truth because hiding truth is one of the elements I am trying to defeat.

    If you think I support NAMA, there is no point in ever responding to you again. (and I refuse to rise-to-the-bait of your “test”).

    I do not know why, but you try this same tactic every now and then with me and I answer you and I explain, in terms as clear as I can muster, as patiently as I can.

    I just always seems that you do not read what I have written.

    “And that’s all I have to say about that…..”

    • Ruairí

      Ok Tim, but can you clarify, for me, the following. I need to know who I’m dealing with: -

      Are you a satanist?

      Are you a communist?

      What is your view on alien craft at Boyle and Tara?

      Do you accept that Offaly beat Kerry fair and square in 1982 and the best team won on the day?

      And, to quote Monty Python “What is your favourite colour?”

  40. wills

    I was on an anti NAMA march with tim, i saw him, in real life, marching against NAMA.

  41. Tim

    Folks, I was only trying to give you a bit of light comic-relief by twisting the Nursery Rhyme at No. 38 above. (sorry for the distraction it seems to have invited – but that is over now, as I will not post on it again tonight.)

  42. G

    As Obama is ‘talking’ about introducing banking legislation that will ‘radically’ overhaul aspects of speculative/casino style transactions in derivatives etc only RTE could lead the ‘main evening news’ about some murder court case and follow it later with a story on con-joined twins.

    Only RTE could say a slight increase in ‘support’ for the government was something positive for Cowen and his beleagured cabinet, the fact that a staggering 76% of the population are dissatisfied with the government’s performance only got a passing mention, these are numbers akin to the lowest levels for George Bush.

    Only RTE could produce such a shabby report yet again from Charlie Bird who ‘filmed’ a ‘Concern’ truck off loading some aid – ‘”I asked a simple question of the crowd around me, who had lost someone in the quake? Everyone put their hand up!” – are we supposed to be stunned, shocked, surprised by this ‘remarkable revelation’, it is appalling stuff, think its time to come home Charlie and give someone else a shot, or will it be the case that like so many others you’ll hang on and on and on and on……………………..

    I am running out of invective!!

    It’s depressing, depressing, depressing!!! It’s like living in 1821 or something, do these people think we are complete intellectual peasants!

    Even Sky led with Obama’s latest move against the major banks, big falls on the DOW and NASDEQ followed, now that you would know it here, living in Ireland is like livingin a moron bubble, created by morons, maintained by morons! Thank Christ for Al Jazeera and Channel 4 news.

    Prime Time about to start with a non-story on water! ugghhhhhhhhhh, no wonder Mark Little shuffled on. for f*****************************

    • wills

      The news is an instrument of the ‘controlling interests’ mind control over the sheeple from waking up.

      The fact that it is so blatant maybe a sign of how desperate they are clinging a power base under some type of existential threat.

      • G

        It’s like putting a blanket over your head while the rest of your body is on fire.

        Anne Doyle can smile all she likes at the camera but these people are keeping the Irish public firmly in the dark!

        It is the Public DIS-SERVICE broadcaster from what I have seen over these past 10 years or so, with light F. F. Tubridy on Friday’s………

    • Tim

      Deco, Ah yes! But those in RTE can see what is coming down the tracks:

      Public-sector pay-cuts? DONE.

      Semi-State pay cuts by IAA? Almost DONE.

      CIE paycuts? as-yet, un-DONE.

      ESB/ESBI pay-cuts? as-yet, un-DONE.

      RTE pay-cuts? as yet, un-DONE.
      (I know some top presenters have accepted reductions, but they are not “employees”; Kenny, Ryan, etc. are registered as private-sector companies that negotiate contract-fees, year-on-year.)

      Next: ISME Companies’ employees pay-cuts?

      Minimum wage pay-cuts?

      Down, down, down, dow, do, d………..


      (That’s why I did not mention IBEC)

    • G, you shock me , you should know why RTE put out such dribble it’s like Tim ‘fighting from within’ ,
      Our State Media also has the perk of advertising unlike other state television set ups like our nearest the BBC. RTE gets a nice revenue from the lads in AIB, BOI, et al. so if you think for a nano second that you will EVER get a proper ‘news’ worthy story from this shower , you must be going Mad !

      • G

        BrendanW – it’s not that I am unaware of the subserviant role the media plays within the poweR structure, ‘manufacturing consent’ especially State media which derives large revenue from taxpayer

        I am just totally exasporated with RTE and Irish media generally, I find it so insulting, Charlie Bird’s woeful performance in Haiti was the straw that broke the camels back – ‘the place is destroyed, people are starving’ – Jon Snow actually went to a Haitian house with a man whose wife is due to give birth at the weekend, Snow “your washing machine is there beneath the rubble, how are you coping? How are you feeling?, Your second floor has become your first floor” – instead of telling us, Snow showed us, it was powerful stuff and rule 1 in journalism school.

        Anderson Cooper on CNN has also done some amazing stuff, really plugged into the emotion, the human side of this catastrophy. Bird should pack his bags because he has done more of a disservice than anything else.

        But you could be right, I could be going M-A-D!
        Mad with mediocrity from people on MASSIVE salaries (paid to do better)!
        Mad with a sh1tty health service, mad with non-existence IT and road infrastructure.
        Mad with the Irish for not rising up and throwing off the yoke of financial oppression and inept (complicit) political ‘leadership’.
        Mad with the fumbling in the greasy till and adding half pence to pence (grubby peasant behaviour)!

    • hibernian56

      Has anyone seen this classic bit of reporting by the BBC not RTE…


  43. wills

    Old mother hubbard here has had enough of getting the bone.

    Good morning, everybody. I just had a very productive meeting with two members of my Economic Recovery Advisory Board: Paul Volcker, who’s the former chair of the Federal Reserve Board; and Bill Donaldson, previously the head of the SEC. And I deeply appreciate the counsel of these two leaders and the board that they’ve offered as we have dealt with a broad array of very difficult economic challenges.
    Over the past two years, more than seven million Americans have lost their jobs in the deepest recession our country has known in generations. Rarely does a day go by that I don’t hear from folks who are hurting. And every day, we are working to put our economy back on track and put America back to work. But even as we dig our way out of this deep hole, it’s important that we not lose sight of what led us into this mess in the first place.

    This economic crisis began as a financial crisis, when banks and financial institutions took huge, reckless risks in pursuit of quick profits and massive bonuses. When the dust settled, and this binge of irresponsibility was over, several of the world’s oldest and largest financial institutions had collapsed, or were on the verge of doing so. Markets plummeted, credit dried up, and jobs were vanishing by the hundreds of thousands each month. We were on the precipice of a second Great Depression.

    To avoid this calamity, the American people — who were already struggling in their own right — were forced to rescue financial firms facing crises largely of their own creation. And that rescue, undertaken by the previous administration, was deeply offensive but it was a necessary thing to do, and it succeeded in stabilizing the financial system and helping to avert that depression.

    Since that time, over the past year, my administration has recovered most of what the federal government provided to banks. And last week, I proposed a fee to be paid by the largest financial firms in order to recover every last dime. But that’s not all we have to do. We have to enact common-sense reforms that will protect American taxpayers — and the American economy — from future crises as well.

    For while the financial system is far stronger today than it was one year ago, it’s still operating under the same rules that led to its near collapse. These are rules that allowed firms to act contrary to the interests of customers; to conceal their exposure to debt through complex financial dealings; to benefit from taxpayer-insured deposits while making speculative investments; and to take on risks so vast that they posed threats to the entire system.

    That’s why we are seeking reforms to protect consumers; we intend to close loopholes that allowed big financial firms to trade risky financial products like credit defaults swaps and other derivatives without oversight; to identify system-wide risks that could cause a meltdown; to strengthen capital and liquidity requirements to make the system more stable; and to ensure that the failure of any large firm does not take the entire economy down with it. Never again will the American taxpayer be held hostage by a bank that is “too big to fail.”

    Now, limits on the risks major financial firms can take are central to the reforms that I’ve proposed. They are central to the legislation that has passed the House under the leadership of Chairman Barney Frank, and that we’re working to pass in the Senate under the leadership of Chairman Chris Dodd. As part of these efforts, today I’m proposing two additional reforms that I believe will strengthen the financial system while preventing future crises.

    First, we should no longer allow banks to stray too far from their central mission of serving their customers. In recent years, too many financial firms have put taxpayer money at risk by operating hedge funds and private equity funds and making riskier investments to reap a quick reward. And these firms have taken these risks while benefiting from special financial privileges that are reserved only for banks.

    Our government provides deposit insurance and other safeguards and guarantees to firms that operate banks. We do so because a stable and reliable banking system promotes sustained growth, and because we learned how dangerous the failure of that system can be during the Great Depression.

    But these privileges were not created to bestow banks operating hedge funds or private equity funds with an unfair advantage. When banks benefit from the safety net that taxpayers provide — which includes lower-cost capital — it is not appropriate for them to turn around and use that cheap money to trade for profit. And that is especially true when this kind of trading often puts banks in direct conflict with their customers’ interests.

    The fact is, these kinds of trading operations can create enormous and costly risks, endangering the entire bank if things go wrong. We simply cannot accept a system in which hedge funds or private equity firms inside banks can place huge, risky bets that are subsidized by taxpayers and that could pose a conflict of interest. And we cannot accept a system in which shareholders make money on these operations if the bank wins but taxpayers foot the bill if the bank loses.

    It’s for these reasons that I’m proposing a simple and common-sense reform, which we’re calling the “Volcker Rule” — after this tall guy behind me. Banks will no longer be allowed to own, invest, or sponsor hedge funds, private equity funds, or proprietary trading operations for their own profit, unrelated to serving their customers. If financial firms want to trade for profit, that’s something they’re free to do. Indeed, doing so — responsibly — is a good thing for the markets and the economy. But these firms should not be allowed to run these hedge funds and private equities funds while running a bank backed by the American people.

    In addition, as part of our efforts to protect against future crises, I’m also proposing that we prevent the further consolidation of our financial system. There has long been a deposit cap in place to guard against too much risk being concentrated in a single bank. The same principle should apply to wider forms of funding employed by large financial institutions in today’s economy. The American people will not be served by a financial system that comprises just a few massive firms. That’s not good for consumers; it’s not good for the economy. And through this policy, that is an outcome we will avoid.

    My message to members of Congress of both parties is that we have to get this done. And my message to leaders of the financial industry is to work with us, and not against us, on needed reforms. I welcome constructive input from folks in the financial sector. But what we’ve seen so far, in recent weeks, is an army of industry lobbyists from Wall Street descending on Capitol Hill to try and block basic and common-sense rules of the road that would protect our economy and the American people.

    So if these folks want a fight, it’s a fight I’m ready to have. And my resolve is only strengthened when I see a return to old practices at some of the very firms fighting reform; and when I see soaring profits and obscene bonuses at some of the very firms claiming that they can’t lend more to small business, they can’t keep credit card rates low, they can’t pay a fee to refund taxpayers for the bailout without passing on the cost to shareholders or customers — that’s the claims they’re making. It’s exactly this kind of irresponsibility that makes clear reform is necessary.

    We’ve come through a terrible crisis. The American people have paid a very high price. We simply cannot return to business as usual. That’s why we’re going to ensure that Wall Street pays back the American people for the bailout. That’s why we’re going to rein in the excess and abuse that nearly brought down our financial system. That’s why we’re going to pass these reforms into law.

    Thank you very much, everybody.

    • G

      Thanks for posting this, unlike RTE, you obviously thought it important too!!!

      Obama knows his numbers are in big trouble, mid term elections coming up could be a slaughter for Democrats.

      The timing is the key – the loss of Senate seat in Massachusetts has forced the joker’s hand – but too little too late – he has been behind the ball on all issues and has been caught out again.

      As I said in a 2009 article: “It would seem that ‘Brand Obama’, that creation of the advertising industry during the 2008 presidential election, is slowly unravelling to reveal an inexperienced politician, beset by crises that seem destined to doom his presidency before it has begun.”

      Gore Vidal maintains he will be a one term president, I think he could be right. Obama has managed to annoy just about everyone, can easily happen when you stand for nothing.

      Obama put so much effort into winning the White House that now he doesn’t know what the hell to do with it – too inexperienced and now caught out.

    • Tull McAdoo

      How about a trip down memory lane Wills, do you remember back when you were going through your credit /utility phase and Jim posted this…..4. Total ban on AIB & BOI lending for speculation, including purchase of securities on margin, leveraged buyouts, leveraged hedge funds, derivatives trading and all other exotic and potentially toxic financial vehicles to be outlined by the Regulatory bodies as unsuitable for Banks which are systemic to the Economy of Ireland………… Now David there’s a wheel I’ll put my shoulder to.(non-negotiable instrument)
      February 27, 2009, 2:26 am

      He then posted this for you…Wills just to cheer you up I think what will emerge from this meltdown is a type of Hybrid system where on the one hand you have a “Systemic” Banking system which embraces some of the ideology behind your credit as a utility proposal and on the other side you will have a more regulated “Commercial” Banking sector for the speculators and manipulators etc.Hopefully the “systemic” system will become the more dominant one…..”if I’m to have any life anymore” to quote Pacino from Any Given Sunday.Now smile…and enjoy your weekend.,,,,,,,,,,What that sly old dog did’nt tell you was that he worked for the Fed Reserve in Oz for a good few years…To tell the truth I really never trusted that fella. LOL.

      • Tim

        Tull McAdoo, I remember that. Of course, jim was correct (he usually was!).

        I think most people have guessed ;-)

      • wills

        Excellent recall and i do remember Jim’s comment.

        Can i ask you tull did you save comments ‘cos i’m trying to retrieve the comments back too sep 2008.

  44. Ruairí

    I imagine that David has his own framework for the rollout of themed and timely adjusted articles.

    I for one, would love to see a wargaming of where we are now, where we’re headed within 12 months and where we should have been headed.

    Roll back, roll forward etc. What if we had gone with a good bank and the bank guarantee lapsed as intended? I’d love to see those scenarios spelled out with approximate economic indicators. It would be a nice wake-up call to the Independent / SB Post readership that we don’t have to be where we are, without a paddle.

  45. Tim

    Ok, Folks, I will ask some questions:

    What success has anyone here had in their “fight” against the FF Parliamentary party from outside that party?

    If you are a member of no political party, who/how are you actively trying to influence to bring about change; and how is that non-membership working-out, for you?

    Who, here, is a supporter of a political party, other than FF; and how is that working out for you and will you be honest and declare that support?

    I am a member of FF who does NOT “support” the current Parliamentary Party. I am as opposed to what the current government is doing as any of you here. I spend both time and money to oppose it. I will continue to do so.

    I am fighting this on policy, with principled, relentless debate, with time, with money;

    How are you fighting it?

    • Colin_in_exile

      I’m not a member of any party. I intend to use my vote in supporting parties that are currently NOT in government.

      Whenever I meet someone who displays sympathy for this government, I explain to them how this government is screwing this country, and I hope the person leaves with some more knowledge and will use this knowledge next time they walk into the polling booth.

      If I join a political party or independent candidate, you’ll be the first to know.

      • Tim


        “Whenever I meet someone who displays sympathy for this government, I explain to them how this government is screwing this country, and I hope the person leaves with some more knowledge and will use this knowledge next time they walk into the polling booth.”

        If you read my posts, you can surmise that this is exactly what I do, too.

        The only difference is that I get the chance to point it out at Party meetings, as well; and push towards change.

    • wills

      If political party members all agreed in unison with party policy surely this then is a cult.

    • Fergal73

      “Ah, shure I just wish all those whiners who don’t agree with me would just go off an commit suicide.”

      If you don’t drink the Kool Aid in FF, you’re not in the fold. Some paraphrasing of Bertie’s words there, but that was the message, if you don’t agree with FF policy, you’re a crank.

      Would you change the Nazi’s by joining them?

      Outright opposition, abandoning FF to a footnote in history is the only way forwards. FF leadership point to their base as a strength, assuming the support of members.

      I advise anyone who can get out, to get out. Corruption and FF adoration runs too deep in Ireland and the population is too passive. I’ve given the list of examples many times here:
      CJH, gun running, yacht owning, island / charvet shirts, inexplicable wealth – ‘tighten our belts’ / Port Tunnel too small , way over budget, leaks / LUAS – only light rail system in the world with two lines built by the state that don’t meet up, vastly over budget / tribunals costing over 1 Billion, virtually no-one punished / the Flynns / the dig-outs / de wins on de horses / brown envelopes / bad planning / loand s from Anglo to senior FF figures (and the Haughey family) / NAMA / semi-public investigation…………

      and still……

      Tim, you’ll change them from the inside! You cut a cancer out. You kill the diseased tree in the forest, we slaughter the herd with CJD / TB.
      FF must be consigned to the past.

      In direct answer to your question. I emigrated. In 2002 I saw the problem coming down the tracks, my friends and colleagues said I was mad, it took two years to get it all together, but I emigrated.

      My advice remains : Emigrate, give up on Ireland, not on yourself.

      If you don’t emigrate, your children will anyway.

      • Tim


        Godwin-guage is now “off-the-scale”!

        “Been-there, done-that”, comes to mind. The reason that I was born in America is that my parents had to emigrate to there in the ’60s.

        They returned in the ’70s with their kids.

        I am determined to stay here; I am determined that my kids will stay here. I will try everything possible to make that so.

        I am not giving-up; neither on myself, nor on Ireland, as long as I have the strength and tenacity to continue.

        I could “cut ‘n run” anytime I like: I have a US passport and my children are entitled to it, as well (my wife would be allowed to accompany us, but she would not qualify for an actual passport until she has spent 6 months living with us in the US – they are the current rules, as far as I can discern).

        I do not want to do that; I do not intend to do that.

        I intend to fix it; fix what is wrong.

        Or exhaust myself, trying.

        • Fergal73

          Given the acknowledgement you make above; that to-date reforming FF has been a failure, it seems strange to continue to pursue a failed strategy.

          Logically, it would appear to me, that right-minded individuals who wish to topple the leadership of FF would abandon the party, perhaps set up a new one, or join an existing party that actively opposes FF. If there are enough right thinking members leaving, the party leadership will fall. If there are not enough to make a difference when they leave, then you will exhaust yourself trying, and fail in the end.

          Most communist countries ultimately abandoned communism, when the people realised that capitalism, while less idyllic than the utopia envisioned, actually delivered more to the common man than the communist ideal.

          I vaguely understand your apparent idealism for reforming FF from within, but given the history from CJH on, corruption has been at the core of FF for over 35 years. 35 years has not changed the culture within the party.

          Logic says to try another tactic, leave the party.

          I hope you get your kids US passports, because with NAMA, I can only see 15 – 25 years (or more) of pathetic performance in the Irish economy and I predict the 2020′s will look and feel like the 80′s. 65% top tax rate, a much larger black economy, companies surviving through the nod and the wink, growing unemployment and mass emigration. Your children will very likely seek economic refuge outside of Ireland.

          FF has created this as its legacy.

          • Deco

            Fergal – When you consign FF to history, the ILP will become like them. The behaviour of certain ILP ministers in government in the mid-1990s proves that they are ambitious to follow in the wake of FF.
            And FG are still not the finished product yet. Deasy and Creighton have been told to keep quiet and stay out of media attention.

            If Tim can upset FF from below, and force FG and ILP to better their proposals for the Irish people, then that would be an improvement. Otherwise we need something very new compared to the other three.

          • Fergal73

            So leave FF and help build FG into a ‘finished product’ or build something very new.

            FF corruption goes back at least 35 years – it is systemic and after 35 years, apparently incurable.

  46. Tim

    Folks, this is actually worth posting, in full:

    Thursday, January 21, 2010
    Who really took the hit in Budget 2010?
    Slí Eile: Once upon a time there was a thing called ‘poverty proofing’. And there used to be Agencies (State ones) that specialised in looking at ‘poverty’ (and not just inclusion or equality or human rights although some of these things are not quite a la mode anymore). We have not heard a lot about poverty or poverty-proofing in recent times. If anyone has seen or heard about ‘poverty’ in the recent deluge of official reports and 2010 Budget official documentation they might post a link and reference.
    However, the poor know all about it and so do the many organisations working to deal directly with people who are poor either by way of direction financial and human help See http://www.svp.ie or by way of advocacy and policy research (SVP, The Poor Can’t Pay or Social Justice Ireland and others)

    One way to examine poverty is to assemble some statistics about it. There are, now, more official indicators and statistics than ever about poverty — relative, absolute, consistent etc and the information is available internationally from agencies like Eurostat, OECD, UNDP etc. One of the difficulties with statistics is that that’s all they are — things that stand. Or is that so? The Etymology is interesting. The German term is Statistik given as ‘study of political facts and figures’, or the New Latin term is statisticus which is derived from Latin status state

    Now if statistics is the ‘study of political facts and figures’ there are three types of ‘facts and statistics’
    * Awkward known facts and statistics (from the point of view whichever values-based or ideology-based argument one is trying to advance)
    * Convenient facts and statistics (from the point of view…ditto)
    * Unknown facts and statistics (which one would love to know but which by definition are unknowable either temporarily or permanently and which could be awkward or convenient depending on their place a larger narrative)

    Government spin aided by some researchers who should know better is simply that:
    A Prices are falling so people are no worse off in real terms; and
    B Irish social welfare rates are high by comparison with other countries
    C In light of A and B above, any cuts are not going to entail that much hardship.

    A is misleading because, for the basket of goods bought by poorer households, prices are dropping less than for all consumer prices taken together including mortgages. B is simply not true. Take out the UK and we are average to below average among the EU15. Previous posts on this website have explored the international comparative data. See here for example.

    To wrap up the spin, some are lumping together two Budgets in succession to discover that Budgets 2009 and 2010 together were in some way ‘progressive’ (Budget 2010 took back some windfall gains for SW recipients in Budget 2009 due to unanticipated price deflation).

    And now I am going to explore some issues by reference to the following media headline on page 1 of the Irish Times in December:

    “Higher earners hit hardest by recent budgets, claims ESRI” was the headline on 23 December. Really? It depends on the data and it depends on which rung of the ladder you are standing on as you peer downwards into the choppy waters. That ‘we should all tighten our belts’ has dramatically different implications for someone who takes a hit of X amount equal to Y percent while standing on an income of Z. That equal removal of children’s allowance for over 16s for the coming summer months can make a mighty difference to someone on half the industrial wage and someone on 5 times the average industrial wage.

    The claim was put forward by the ESRI in their Winter 2009 Quarterly Economic Commentary QEC (for a summary see here). They wrote:

    ‘while Budget 2010 was clearly regressive, the combination of Budgets 2009 and 2010 placed most of the burden of fiscal adjustment on higher earners’

    In a very short piece by Callan, Kean and Walsh (‘Distributional Impact of Tax and Welfare Policy Changes’) which is in the full QEC and is not available to non-subscribers the researchers asses the impact of Budgets 2009 and 2010 against ‘a neutral benchmark’ What is this neutral benchmark? It is crude, to say the least. The ESRI have assumed a fall of 2.5% in nominal wages in 2010 (see first summary table in Overview) and compare changes in income for different households divided into five income groups from lowest to highest. Figure A in Box 2 (Page 24) shows a fall of 4% in income for the lowest income group compared to an increase of roughly 1% for each of the other 4 groups. These estimates refer to income units in terms of family units. In other words, income is equivalised in the following way (‘Income Tax and Welfare Policies: Some current issues’):

    Family units are ranked by income, adjusting for differences in family size and composition using a simple equivalence scale: 1 for the first adult in the family, 0.66 for a second adult and 0.33 for children.

    As the ESRI authors point out, ‘Much of this effect is driven by the very sharp reductions in Job Seeker’s Allowance for those aged under 25.’ Alternatively, the ESRI present the data according to household units. Here, the comparison by income group shows a much smaller drop for the lowest income group (1.5%) and modest gains for all other groups. In comparing on the basis of a households, a household consisting of one member — say a pensioner is treated the same as a household with 2 adults and 3 children.
    The ESRI authors also concede (in a separate place here) that:

    It is difficult to assess the scale of impact of Budget 2010 on specific groups since many of the policy changes entail shifts within particular groups. Hence, for example, cuts in job seekers allowances impact more on new applicants and the withdrawal of early childcare supplement for all children under 5 with its replacement by a new scheme for young children in the 3-4 age-group.

    No allowance was made for the impact of public sector pay cuts (per QEC document)
    This latter point is significant because a low-paid worker in the public sector (yes, they are many) had taken an additional hit over and above the other adjustments used in the ESRI calculations. This effects particular groups of public sector workers more than others and needs to be taken into consideration.

    So much for Budget 2010.
    The ESRI then show a graph for the impacts of Budget 2009 (Figure B on page 25) benchmarking on a 3.5% fall in nominal wages in 2009. Here the pattern is reversed somewhat compared to Budget 2010 — high income earners take the biggest hit at 6% (reflecting among other things income and levies) while the low income households take a lower reduction (or an increase if household composition is taken into account). The income group second from the bottom see an increase in income against the benchmark. Recall that most basic social welfare rates were increased by 3% in Budget 2009 (although other payments were reduced including the Christmas bonus and various discretionary payments and allowances were curtailed in the 2009 Budget).
    Having found —according to these estimates and this modelling — that Budget 2010 was ‘regressive’ and Budget 2009 was ‘progressive’ what did the ESRI do? You have guessed. They lumped the impacts together to estimate a ‘Combined Distributional Impact of Budgets 2009 and Budget 2010 versus Wage Indexation (-3.5%)’ and hey presto: the rich were soaked and the poor were less soaked when both budgets are brought into play. Alas, I am a dreadful sceptic refusing to believe the ‘facts’ and sniffing spin somewhere. What about the following:

    Supposing the rich took a 10% cut — on average — in 2009 (quite possibly as various types of incomes on assets and employment took a dramatic hammering in the downturn) and the poor took a 5% cut — are we comparing like with like in terms of hardship, health and psychological trauma? Is the tipping point different for someone who is already insecure, anxious and worried that a breakdown in some appliance simply cannot lead to replacement anymore?

    Exactly which types of income are taken into account in this model? Do we know anything about those parts of income that are completely or partially outside the tax net? (undeclared income, tax-free income, profits accruing to those companies least hit by the recession?

    As the old saying goes
    ‘First get your facts, then you can distort them at your leisure’! I am not suggesting that the ESRI or other economic commentators have been doing this. However, some folks in the media and the political world are — for their own purposes and researchers and other independent commentators should be careful about how their findings and facts are picked up somewhere else

    The Poor Can’t Pay document states:
    Government said it had to make difficult decisions. But the decisions now facing many of Ireland’s poorest households will be much more difficult. How can I feed my family tonight? Can we afford to heat the house? Which bill can I pay this week, and which must I hope can be postponed? How will we manage when the bills cannot be postponed any longer?

    Based on CSO EU SILC data, the three groups in relative poverty are, in descending order:

    Lone parents (36%)
    Couples with 3 children (25%)
    Others with children (16%)

    In other words, working age households with children. These are the groups most heavily targetted in Budget 2010. This is also confirmed in the early post-budget analysis by Social Justice Ireland (refer to Chart 6.1 in the analysis here).

    Following an examinations of the Budget 2010, the ‘Poor can’t pay’ research document gives details of how various individuals and family types are affected with reference to concrete examples:
    Case Study 1: Unemployed lone parent
    Case Study 2: Student about to graduate
    Case Study 3: A person claiming the Blind Pension
    Case Study 4: A carer for a person with a disability, with an unemployed son
    Case Study 5: An unemployed couple with children
    Case Study 6: A working lone parent
    Case Study 7: A family managing on unemployment and part-time work

    How many bankers, senior civil servants, academic and stockbroker economists have a clue what it is really like to live in any of the above real situations? Lets get real.

    • Ruairí

      Fascinating articles on that website Tim. Thanks for that.

      Both Sean Quinn and the irish head of Intel have strongly stated that wage inflation / deflation is not the magic button that their MNCs seek in Ireland. It is investment by government, pure and simple. In roads, infrastructure, education, health. A government’s job description, in other words.
      The article, and follow-on comments, coherently point to a narrow cabal of IBEC & government deluding and spinning the public.

    • paulmcd

      “Supposing the rich took a 10% cut — on average — in 2009 . . . etc.”

      Assuming the “rich” are individuals with a substantial income surplus in relation to most people’s basic needs – a disposable income which is used mainly for investments and for enhancing the family’s wealth and prestige – then they are a class which will have experienced a dramatic increase in the real value of their mostly discretionary income, precisely because of the recession and asset-price deflation. THEIR REAL INCOMES HAVE ACTUALLY INCREASED, AND SUBSTANTIALLY SO!

      I suspect that they could now buy two properties for the price of one similar investment in 2007. The Budget failed to recognise this effect by failing to introduce a new higher-rate tax on surplus income.

      I am astonished that the ESRI produces so much drivel and is failing to examine the real inequities in society. The Dublin 4 set is closeted in a cocoon of its own spinning and will never make a worthwhile contribution on helping the nation to extricate itself from its perilous state.

      On the general issue of privatisation of state or semi-state assets, I can think of only one word, “Eircom!” For those of you who wonder why you are paying c.€25 monthly for your fixed-line communication, as opposed to €8 per month which you would be paying for a similar service in a well-regulated country like Finland which has state-of-the-art telecommunications, think of the difference as your contribution to the retirement fund of people like Michael Lowry, Soros & O’Reilly, plus Tony O’Reilly’s Australian buddies and the employee benefit fund.

  47. Tim

    That article is, I think, well put-together, backs-up it points with references that are linked and hemmers-home what the elite is doing.

    Wherever you find yourself on the “scale”, at the end, try to think of how those beneath your “rank” may be feeling?

    • Fergal73

      Tim, I’m pointing out the obvious; these budgets are FF budgets.

      But of course, your position is that you don’t agree with your own party’s actions.

      What is unique to FF that is not to be found in an existing party, or could be generated in a new party?

      I can think of a few things, none of them complimentary. Just what is it that attracts people to into its fold?

      Once in, why stay when you see the depth of corruption?
      Is there an element of having spent so long labouring to change them, that to admit defeat and leave would be too bitter a pill?

      I’d love to hear answers to the above. I know you have explained your objective of changing them from within.

      • Tim

        Fergal73, I have explained my thinking on this before, too, but here goes:

        The most unique thing about FF is that it has been in power more than any other party; I believe that trend will continue, after the next soujourn in opposition. Therefore, it is extremely important to try to ensure that the “shape” that the renewed party takes-on, before regaining power, is different from and better than the shape it has now.

        That task can only be performed from within. We need more good people in order to overthrow the bad ones, not fewer.

        • Fergal73

          Agreed, power is one major differential.

          Your point is interesting – that you expect the trend of being in power to continue. On that basis, of course staying in the party of poweris likely to be more rewarding (in ways not limited to the brown envelope).

          Why do you expect the trend to continue. We have seen how FF through corruption and incompetence mismanged the boom years of the late 90′s and early 2000′s, and caused/contributed to the bubble that has Ireland where it is now. We saw a similar pattern of overspending in the late 70′s, leading to the 80′s recession.

          Why will the Irish electorate elect FF again? What is it that attracts people to a party which has proven itself as corrupt and incompetent? Is it simply an attraction to power? Power corrupts; it’s a saying for a reason. FF have had too much.

          If the good people leave, the bad in FF will fall. No need to overthrow – make collapse.

          • Tim

            “If the good people leave, the bad in FF will fall. No need to overthrow — make collapse.”

            Unfortunately, this is not what experience has shown us: remember Dessie O’Malley versus Charlie Haughey?

            It must be changed from within.

          • Fergal73


            by that logic, the overwhelming majority of FF must be bad. If the “good” are of a number so insignificant that the party can continue to operate, then the idea of changing from within is ludicrous.

            I still wonder:
            Why will the Irish electorate elect FF again?

            What is it that attracts people to a party which has proven itself as corrupt and incompetent?

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