July 14, 2010

This is no mere slump, it's the bankruptcy of a nation

Posted in Debt · 107 comments ·

IF Seanie Fitz is bust, well then so too is much of Ireland’s professional class. Because they were all at the same game — buying into syndicates, borrowing against their incomes and hoping to make fortunes.

But now that history is being rewritten, FitzPatrick suddenly is painted as a man who acted alone. This is ludicrous. But when you are white washing you need a “baddie”, and Seanie fits that bill for many of his erstwhile associates who this time four years ago were all “Seanie this and Seanie that”. He has, in classic Irish fashion, become a “moral skip” into which many can throw all the sins of the boom.

Meanwhile, unlike Seanie, these guys are busy lining up to throw their own commercial sins into that financial skip that we term NAMA. This is (as predicted) turning out to be a horrible mess where no one who runs it seems to have the faintest idea what they are at, how much the thing will cost, and what effect it is going to have on the property market. In fact, no honest man can put a finger on any of this because, honestly, we can’t know. So what we get is dishonesty dressed up as certainty.

But a few things are clear: NAMA is full of fees for the professionals who get on this peculiar gravy train; the cost will be borne by you; and the underlying land will eventually have to be sold off cheaper than NAMA (ie the taxpayer) is paying for it because that’s what happens when the only buyer in town eventually begins to sell.

The bankruptcy of Seanie and yet the saving of Anglo with your money reveals a pattern in Irish public life — where the institution is saved no matter how rotten, but the individual is sacrificed no matter that he is simply a small version of the corrupted institution. So Seanie is declared bankrupt and his assets are sold but Anglo is not and its assets are subsidised!

We are shifting the losses of the banks onto the people and, in so doing, shackling the prospects of the next generation to the mistakes of the last one.

What this means is, at best, a “jobless recovery”. In plain English, this means that unemployment and emigration remain high, take-home wages fall relative to profits in the economy and “after-tax” wages fall even further. The “growth rate” is driven mainly by multinational exporters who don’t employ many people.

We are entering into a period of many years that will be precisely the opposite of what we experienced in the boom.

One of the most striking things about the boom in Ireland — which made it different to, let’s say, the boom in the US — was that wages rose dramatically as well as employment rising dramatically. Now this process will go into reverse.

Equally, the bill for bailing out the banks — which should follow the Seanie example and be declared bankrupt — will be paid largely out of income tax and all sorts of other stealth — and not so stealth — taxes.

In a classic example of “gombeenism”, where the feudal land economy is still paramount even as the rest of the world has shown that trade and human ingenuity are what makes you rich, the Government has decided not to raise a property tax. So taxes will come from other income, despite the fact that the main lesson of the boom must surely be that property is a useless form of wealth creation — otherwise we’d still be rich!

Given that corporation tax is unlikely to be touched, you should expect that your savings will be taxed in a superannuated DIRT-style levy in the months ahead. After all, your savings are just lying there, they are simple to trace and easy to get at.

Contrast the ease of taxing savings with the obvious difficulty of tracking down tax evaders who have money under the mattress. One of the central tenets of tax-raising is that it should be easy — and taxing savings is easy. For the State, finding cash which is hidden is difficult and expensive.

And speaking of under the mattress, with tax going up and credit non-existent, many cash businesses (such as pubs and shops) will simply start going into the black economy by under-reporting turnover and keeping precious cash in safes. This is what always happens when taxation starts to rise and a public expectation of further tax hikes take hold.

Unfortunately, this cycle is what happened in the 1980s when we had economic growth in all but one year of the decade and yet the whole period felt like a depression.

Don’t forget, the 1980s was a period when Ireland stagnated while the rest of the world boomed. So too was the 1950s for that matter, so there is no reason to believe that a global recovery now will be enough to drag us out.

In fact, a global recovery, by putting up pressure on interest rates, might have the opposite result because the effect of interest rate rises on our heavily indebted punters greatly outweighs the positive effect of trade because most people don’t work in the exporting sector.

With a few tweaks here and there, this is what we face into. Ultimately, the huge debts will be defaulted on, leaving people to ask why we didn’t just declare ourselves bankrupt at the start of all this and move on. But “conventional wisdom” tells us that the nation has to soldier on pretending not to be bankrupt. So the banks pretend to be solvent, the Government pretends to have a strategy and the cheerleaders pretend that we have “turned the corner”, when in fact, on the ground, things are getting worse.

It is quite painful to see the broad consensus across the political landscape on this economic prognosis. There seems to be no party offering an alternative. If there is no alternative, then this is the way things will pan out and yet again Ireland splits between the “insiders” who hunker down and survive the recession and the “outsiders” who emigrate or go on the dole.

Seanie Fitz’s bankruptcy represents not just his personal bankruptcy, but the bankruptcy of an entire generation of Irish go-getters and their imitators. If we are not to lumber the next generation with the bill of the last, we must call time on the likes of NAMA and say “enough, move on”.

  1. Puschkin the Black and White Cat

    Perfect !, My exact reading, remember I saw this comming in 1998 !, I hope that this will make the people see. You are welcome for a pint in Ollie’s Place in Skerries anytime !

  2. Great article. What this country needs is a Boomtown Rat Party, and I do mean a new political party. This shutDownIsland is getting more cloaked/hidden/concealed than Russia. Banks/financial mess all behind closed doors, dressed up inquiries of no consequence with the real info buried where no eyes can see. With our blind taoiseach telling us we can be confident, the trickster!

    The RAT Party or R(esponsibility) A(ccountability) T(ransparency)

    We’ve forgotten what these terms mean. Lets examine them and apply them in public and require the politicos, currently transformed into the Irish AngloNama politburo, to state categorically under each of the above headings what their role in past and current shenanigans is. We need the documents published as to who, for example, is bankrupt, what are the details. We no longer have Government, its bankers with their political FF pawns who run the show.

    Why do we only get this concealed information indirectly through the commercial courts e.g Mr Justice Kelly


    The Government are embarked on a cover up of gargantuan proportions involving the rewriting of history.

    We need the RAT Party, dedicated to serving whistle blowers and people like Justice Kelly, now to hold them to account and let us have the truth!

  3. John Q. Public

    We overlook the fact that there are plenty of ‘outsiders’ doing relatively well in this country, they are called ‘non-nationals’. One group are doing the jobs we Irish won’t do and the other group have cost us billions of euros in welfare and legal costs i.e. Pamela Izevbekhai and her ilk.

    • Those outsiders have made a great contribution to Ireland and continue to do so and they should be welcomed. Re ‘Pamela Izevbekhai’ she’d have many parallels among the locals and is an exception rather than the rule. We don’t need racism on top of everything else. Arguably, the group who’ve suffered the most in the meltdown are the immigrants who were the first to take the hit. Lets not treat them the same way we’ve treated the travellers.

      • yadayada

        Here’s a little exception for you. Last week I met a Nigerian awaiting surgery through the Treatment Purchase Fund. He’s been here for 4 years as an Asylum seeker (came on a direct flight, did you?), has never worked and has free housing. He has 2 wives at home, where they somehow avoid the persecution he’s subject to, and has 2 here. He also has 16 children here in receipt of Child Benefit. Now he’s getting a free operation.

        We do not deserve to prosper. Discuss.

        • ThomasFergus

          2 wives and 16 children eh? Did you count them all?

        • Sabres of Paradise

          Public sector workers taken massive pay cuts, but I believe that the Bank staff in the big two (head count wise) bankrupt banks from the big noises like Doherty and Boucher, down to the divisional directors,executives to the regional managers have taken no severe pay cuts that i have heard of, am i reading the wrong papers ?

          All i read about is bonus payments, not being paid and unions going to sue to get them (sunday tribune)

          • Julia

            Here’s a little anecdote. I was on holiday in Prague recently and met an Irishman with a connection to Enterprise Ireland. He’s been living in Prague for a year now drumming up business to bring back to the old sod. He hasen’t bothered to learn any Czech language. The language of business is English he said. I’m sure it is. Prague is full of Tesco, Debenhams, C&A, M&S, you name it, they’re all there. Incidently, Tescos is considered an expensive supermarket in Prague.
            Anyway, this Irish patriot told me how he was out one night with some friends and a Czech man complained about the fact that foreigners weren’t making any effort to speak their language. Mr. Enterprise Ireland was proud to declare that that he put the man in his place and told him he should be grateful there were English speakers in his country. Put up and shut up. The poor man apparently went red in the face.
            Lack of respect for the people we deal with will get us nowhere, whether here in Ireland or abroad. Cultural colonialism has its limitations. Lets just hope he’s never sent to China. I just hope this isn’t a common attitude among Irish ex-pats.

          • adamabyss

            Julia, I lived in Budapest, Hungary myself for most of the period 1993 – 1999, and learned the language fluently but there were ex-pat businessmen (English, Irish, American etc.) just beginning to infiltrate the country/city, at that time after the collapse of the Communist system. They all drank in a pub called Becketts (actually it was owned by an Irish guy called John Sheehan; he offered me a job but then changed his mind because I had long hair). Anyway, these guys that drank there (we had to frequent the place occasionally to see English football on the TV; it was one of the only places in the city that you could in those days) – they never bothered to learn a word of Hungarian and I was ‘acquainted’ with some of them for the five or six years. They used to tell me I was wasting my time with the local language, English is the language of business etc. etc., just like you said Julia.
            In the end I got a job with a Hungarian/Russian company based in the Caribbean! Never would have got the job if I didn’t know this language that supposedly I wouldn’t be able to use outside Magyarorszag. Just shows you what some people know. Even if I was still in Hungary, I’m sure the lingo would have been beneficial to me on a continuing basis. It would have been immoral not to have learned it and not to have respected the local people and culture. Having said that, I’ve been in the Caribbean now for most of the last 11 years and I wouldn’t dream of moving back to Hungary for love nor money today, although I’m in Ireland at time of writing. All the best, goodnight Ireland, as some of you like to say.

    • I find the comment of JQP offensive. We are looking to export much more to a global economy to get us out of this mess and you have ignorant xenophobic nationalist idiots who fails to see the value of a diversified influx of culture adding to the quality of Irish society. Move on for goodness sake and take part in a global society.

      The added value for our foresight of an open labour society has resulted in the likes of Sisk being able to bid for Polish Motorway construction taking advantage of the highly skilled project managers of Polish migrants who helped to build Irish roads over the last few years.

      • yadayada

        Ignorant xenophobic nationalist idiots? My goodness, this is the sort of mindlessly intolerant attitude that gives this country such a bad name.

    • In times of economic trouble there are always odious creatures who crawl out from under a stone to share air their toxic views. Let us nip this in the bud right now because years ago in the UK if you wanted to know how to screw the benefits system you used to ask an Irishman.

    • tony_murphy

      I don’t see anything wrong with what John Q Public has said.

      Politically correct lefties are one of the main problems with society today if you ask me.

      Look at the state the political correct lefties have left Britain in. http://www.dailymail.co.uk/news/article-1294260/Council-kick-asylum-seeker-2m-house-say-neighbours.html

      Wait and see what Gilmore and his gang do to the country when they get their hands on power

      I now live in England, I am an economic immigrant, but I add value by using the knowledge and experience I gained in Ireland. The UK is the real benefactor of my Irish Education. 120,000 more like me will leave Ireland in the next year if the predictions are to be believed. I’d bet it will be more. All that will be left is the public servants, those on welfare and anyone who really has no option but to stay

      Pulling out the racist card to John Q Public is not fair IMO.

      • ruadh

        Quite right. After all, look at what a great job the right has made of Ireland. As for the Daily Wail….nuff said.

        • tony_murphy

          Recommend reading peter hitchens “Abolition of Britain” and see what the lefties have done and comeback afterwards

  4. Gege Le Beau

    I was thinking of an analogy of the low budget airlines and the Irish State this morning.

    Ireland was once Aer Lingus, shiny, green, clean, serviced, ‘trustworthy brand’ (lets now mention over priced etc)………now however we are the no frills carrier.

    Everything has been stripped down, all frills for passengers dumped, first class done away with as those guys are saying they can no longer pay for the tickets (maybe the wife can pick it up?).

    The captain of the plane hasn’t the trust of the crew, has a documented record of poor decision making and has more affinity with the company shareholders than the passengers (no address over the airplane intercom system). The co-pilot is troubled by a serious illness, was hospitalised for four days before the flight is telling all to trust the team and that the plane will soon resume normal service and take to the air, despite all evidence to the contrary.

    The mechanics (Dept. of Finance) have a record of getting the sums for the plane (amount of fuel required, distance to be travelled, baggage load) completely wrong (which can have appalling consequences). All the air hostesses are called Mary for some reason, which is more in keeping with a Stanley Kubrick film

    The passengers onboard are generally terrified from the intially chaotic journey and are being asked to stick with the airline despite the obvious ‘issues’.

    The question is, under these circumstances would you get on the flight?

    • Deco

      Ireland is not no frills because Ireland is still the exensive, high margin, IBEC-in-control, Rip-Off Republic.

      Actually, we are a high frills carrier like Olympic or Alitalia. Borrowing a heap of money. Loaded with layers of cronies. And the plane has left the runway. With a first class section to keep the insiders from the chumps. And the fees are reverse logic. The outsiders pay up and sit at the back, and the insiders get paid to travel, and get a meal. The staff are overpaid, and connected. The pilot (Cowen) is drunk. He is handing over to Calamity, and she is equiped for this task with a degree in Social Science. McUseless is also snooping around to tell everybody of the need to feel proud of the plane, the staff, and the name of the plane. Mama Harney is in charge of service. The pilot has several plans, and is flying in compliance with all of them.

      Worst of both worlds. High cost, and declining productivity.

      Oh yeah, and there is a bomb on board in a package that has the label stamped “Long Term Economic Value” on it. Security clearance was achieved because of the LTEV stamp.

  5. dermo

    Banging Head against wall.We are now really starting to see what populist politics and vote buying is all about.This country is on it’s knees ,we have a government full of economic illiterates.
    The people of this country now have to ignore what government spout and their cheerleaders.The level of taxation direct and indirect in this country is savage ,the wastage is woeful and if we had a monarchy we would be using the guillotine.
    We are now seeing the demise of the welfare state just like it happened in Uruguay in the 1950′s.Government politicians are now like jumped up absentee landlords levying on the people left ,right and center while they still live in the same lifestyle they have become used too.
    The hupla by Western world governments that we have turn a corner are absolute spoofery .The so called developed nations in this world are so indebted it’s frightening .We started with a banking crisis ,now we have a sovereign debt crisis .The Government bailed out the banks ,then the banks bailed out the government buying their bonds ,its absolutely hilarious one bankrupt outfit bailing out the other and now we have the ECB printing billions in useless Euros.
    We may Have deflation now but when this money starts to filter through we will see inflation ,raised interest rates ,lower wages and stagnation in pay .This will happen and when it does Ireland may think it’s hard now ,the world of pain is going to be terrible for ordinary working people.
    What gives any government a right to sell it’s people and generations into bondage,serfdom,slavery using government bonds.
    They have no right and I hope the young people of this country that go into to politics repudiate the debt that these parasites have created and allow the people of this country to enjoy freedom and happiness again.

  6. Wallets Full of Blood: Roscommon Death Trip

    Rain falls on the snow. The Contagion has taken hold. Ghosts from the old Dead Republic are emerging everywhere as the day of judgement approaches.

    On Black Tuesday a guilt ridden political functionary runs from his job burying bodies in the city. He is tortured by voices of reproach as he journeys towards home. He recounts the history of his dealings with Fingers – a boss ‘who made the old boss look like Mother Teresa’.

    Meanwhile, back in the city, amid the spiraling negativity, Fingers and his acolytes lay the foundations for a new Easter Rising.

    ‘Roscommon Death Trip’ is the final installment of the ‘Wallets Full of Blood’ trilogy. The previous installments were ‘Houses on the Moon’ (2009): http://www.vimeo.com/3269259 and ‘Zombie Banker Blues’ (2009): http://www.vimeo.com/4292136

  7. Garry

    Back in December 2008 when the size of bank directors loans became public, I realized I was watching treason in action. That there was no point in making constructive suggestions on how to tackle the oncoming depression because the country has been taken over by traitors.


    These were the people who a few months before had forced a guarantee on all bank debts…. People making the decision… they knew the score… some of them were facing personal bankruptcy…. they all knew just how fucked the banks were, they were all involved in cooking the books for a few years before.

    The response to the collapse; i.e. the decision to stick the taxpayer with the bill and hand a blank cheque to the bankers….

    Just remember it wasn’t the nigerians, the poles, the gays, the protestants, the brits, the EU, the yanks etc…

    The decision to making us all liable for insider debts was made by less than 20 Irish people one night in September 2008.

    The alternative would have taken courage, integrity, bravery and honesty from our leaders… And would have resulted in a lot of pain for everyone also, but nothing like what is in store now.

    Remember this was an inside job.

    • Exactly. Ireland created it’s own problems through a national obsession with property gombeenism and people were only too happy to get down to the bank and jump on the gravy train by taking out mortgages to finance second homes and many other foolish notions. Serves then right for having designs on getting someone else to pay for their mortgage – now there are around 70 thousand on housing waiting lists.

      At the end of the day you need to take responsibility for your successes and failures in life because there is no-one twisting your arm and forcing you to take decisions foolish or otherwise. It seems that some people out there don’t have the maturity to admit they fecked up and prefer to shout and bawl and blame someone else.

      There are plenty of people ranting and bawling and damn few doing anything positive about it.

  8. paul

    In March 2004 I was explaining to a cigar smoking customer in my bar the implications of the soon to be implemented smoking ban.After I assured him he would have to remove himself every time he wanted to light up,he had quite a bad limp,he ranted and raved for maybe half an hour about the evil incarnate that was Micheal Martin,Bertie Ahern and Fianna Fail in general.After he calmed down he finished by saying “not but I”ll vote for them the next time again anyway”.
    This mentality is why “we are where we are” today,it’s getting more like Killinascully every day with councillor Willie Power firmly in control.

  9. Reality Check

    Our Public sector and Banks are robbing us blind – Too many in this country that only care abour numero uno and don’t care much about numero Duo.

    The Host becomes weaker and the parasites become bolder.


    • dermo

      The reality is that ex amount comes in 30 billion and 54 Billion goes out .This seems to be lost on the economic illiterate government,public and civil servants.This country is broke ,bankrupt ,kaput.The spin coming from government is rubbish you can’t have growth and austerity together.We would be as well repudiating the debt and starting afresh .The crap about investors not touching us is rubbish.Anyways the whole Global monetary fiat currency backed by nothing only thin air trees and ink ,fractional reserve banking system is going to collapse hold on to your hats!

      • Fergal73

        Dermo – if the fiat currency system is rotten (and I agree it is), then what do you recommend doing with whatever cash you have?

        I moved heavily (in percentage terms, the actual amounts are not that big) into cash in 2003 and missed the market’s boom years, but thankfully didn’t suffer the recent collapse with the global crisis. Now, what do I do?

        Gold funds? Actual gold? Get back into the market? Stay in cash? Do you think an Irish bank is a safe place for deposits?

        In short, if you were in the poisiton of X thousand / tens of thousands / hundreds of thousands in cash, what would you do?

        • michaelcoughlan


          This is a very good question which I asked on a previous article as I am due to receive an inheritance shortly of several thousands of euros. The answer I got was to put the money in Norwegian Govt bonds and use their currency. As far as I know they are the only country in Europe with a current account surplus due to their own oil which makes it a safe bet. You could also put the money in allocated gold through http://www.goldmoney.com. The trouble with gold is that no-one knows if we will have inflation due to monetising the debt, or deflation due to the de-leveraging that is going on. If you get a more definitive answer let me know.


  10. Deco

    The bankruptcy of Seanie and yet the saving of Anglo with your money reveals a pattern in Irish public life – where the institution is saved no matter how rotten, but the individual is sacrificed no matter that he is simply a small version of the corrupted institution. So Seanie is declared bankrupt and his assets are sold but Anglo is not and its assets are subsidised!

    I find this comment very insightful.

    Excellent article. Mandatory for anybody who wants to know what is going on right now in this country.

    • Gege Le Beau

      The neoliberal way (don’t think I ever saw the word on this site) Privatisation of profit, socialisation of risk (& debt), with one business party masquerading as a plethora of ‘concerned’, ‘in the public interest’ political parties.

      A nation of sheep begets a government of wolves ~ Edward R. Murrow………….while Gandhi’s several deadly sins include:

      Wealth without Work
      Pleasure without Conscience
      Science without Humanity
      Knowledge without Character
      Politics without Principle
      Commerce without Morality
      Worship without Sacrifice

      • coldblow

        Neoliberalism – I posted this great link recently (worth repeating!):


        Here’s one nice quote (nearly taken at random):

        ” find it remarkable that nobody has pointed out that Adam Smith did not say what neoliberals repeat when they count him as their patron saint. His aim, like that of subsequent classical reformers, was to free society from privatized land rent, monopoly rents, and financial interest and fees.”

        Ah heck, may as well throw in a longer one while I’m at it:

        “About ten years ago the mayor of London, Ken Livingston, sent his economist Alan Freeman over to the United States for an Eastern Economic Association meeting in Boston. I introduced him to my colleague Ted Gwartney, the property assessor for Bridgeport, Connecticut. Ted explained that his job was to draw up a land map of the city’s properties. His methodology in making this map was so simple and straightforward that he won every court case brought against the city by property owners who protested that his assessments were too high.

        “he British economist asked how long it took him to make such a map. Ted said that he had two assistants, and it took three months. The economist looked wide-eyed and said: “This is incredible. You should win the Nobel Prize for this! Are you the only person in the world who does this? I’ve never heard of such efficiency.”

        “ed laughed and told him that there are thirty thousand assessors in the United States that do just what he does. They do it for every city and county in the nation every two or three years. The Englishman was amazed, and we discussed whether London might sponsor a similar study.

        “The proposal never came to fruition, largely as a result of lobbying by property interests. Real estate investors certainly want to know what they are buying and selling, but want outsiders to know as little as possible. They worry that if the government measures land value — especially the appreciation of land prices — political pressure will arise to tax it.

        “The upshot is that governments measure wages and corporate profits, but have only the roughest estimate of wealth, its distribution and rate of growth. Only Japanese statistics have good measures of land prices. No national income statistics today measure the most important asset on which classical economics focused: unearned income and unearned wealth.”

        • Deco

          But – this unearned wealth….somebody, somewhere had to earn it at some stage…..Now, such a concept does exist…just look at the Boucher Bonus….but it is never a clearcut as that….I mean what about people who work hard to put a roof over their heads ?

          • michaelcoughlan


            Just my two cents worth but wealth can be created or accumulated but nothing can be done if it is not created in the first instance. If you can control the supply of any ingredient necessary in the wealth creation process you can accumulate wealth without ever having to earn it. For example if you control the world’s oil supply all you have to do if you don’t want to earn your way is park a large tank army on top of the oil field and say well lads yesterday it was $60 a barrel and today it is $200 a barrel. You can do it with land like the landlords of old by upping the rent on your tenants to keep them permanently subjugated or in the case of finance you can continue extending credit to the borrower until they are caught in a never ending debt repayment trap and all their productive capacity goes towards the repayment of debt to the people who control the capital and don’t earn anything. Sounds familiar doesn’t it?

          • coldblow

            Deco, good question. I can’t add tp Michael’s answer except to say taht it’s an enormous mess and establishing fairness will surely be impossible. Meanwhile here’s a bit more Hudson on the matter:

            Debt ridden economies turn down not for the reason that John Maynard Keynes worried about in his General Theory — people saving too much as economies become more prosperous. Economies are shrinking because of debt deflation.

            Families, industry and the government have run too deeply into debt to afford to buy enough goods and services to keep the circular flow (“Say’s Law”) intact between production and consumption. Market demand and employment shrink. This is the problem that is plaguing economies today.

            National income statistics quantify the degree to which the financial, insurance and real estate (FIRE) sector (we may think of it as Economy #2) extracts interest and rent charges from the production and consumption economy (what I call Economy #1).

            Land rent and monopoly rent is paid out in the form of interest and other pseudo-costs (enormous paychecks and bonuses, stock options, etc.) that are not part of the production process as such. This is why Mill defined economic rent as what a landlord can make in his asleep — without working, without enterprise, simply by passively receiving what Henry George called “a payment of obligation.”

            The classical economic reformers addressed this problem by explaining that land is no more a factor of production than air, water or sunlight. It is a property right — a privilege to charge for access to a site for production or housing. Money and credit likewise are not factors of production. They are claims for payment or a commission (e.g., as a credit card or foreign exchange agio), created by legal institutions that differ from country to country.

            These rights can be traced back to insider dealings (as in America’s great railroad giveaways or the post-1991 privatizations in the Soviet Union), military conquest, monopoly rights granted by lobbying governments, and so forth.

            The fact that they are the result of specific historical circumstance provides an opening for post-classical economists to argue that they should be excluded from “scientific” analysis, on the grounds that they are not universally identical but are “institutional” and hence to be exiled to the academic sub-basement of “sociology.”

            What is universal, it is claimed, is individual psychic utility (pleasure and pain) and technology. The inference is that economics should focus on these “real” core relationships “in the mind,” excluding property and finance as “givens” or simply as “exogenous” considerations.

            Rather than making economics scientific and more relevant to policy making, the result has been to trivialize the discipline. The analysis of markets is reduced simply to measuring supply and demand — what individuals buy from the menu put in front of them. Micro-economists focus on individual choice, but few ask what creates the market in the first place — who created the menu’s contents, how high a price actually needs to be paid, and most of all, who gets wealth and how fortunes are acquired, e.g., by inheritance, special privileges, insider dealing, or by their own labor and enterprise.

            Yet these were precisely the issues that classical economists discussed. So economics has retrogressed, not gone forward. And the same can be said of economic statistics, especially regarding the FIRE sector. The last land assessment in Britain, home of the great Domesday Book, was in the 1870s.
            There hasn’t been one since.

            Traumatized by the writings of Mill and subsequent socialist reformers, the landed aristocracy pressured the government to stop estimating land value. The timeless guiding principle is that if the tax collector doesn’t see the land’s rental value, there is less chance of it being taxed. So land — which used to be deemed “visible wealth” (in contrast to finance as “invisibles”) became statistically invisible, not only to the tax collector but to government policy makers and the economics profession.

  11. adamabyss


  12. paddyjones

    The deficit for 2010 is now reported to be 19.5% by the ERSI due to the additional spend of funds to Anglo and INBS. This is a disaster.
    The EU will have to take control of the Irish public finances as the government can not administer the countrys economy. Our borrowing costs are going to soar and we will need to cut the deficit more agressively. David is wondering where we will find the savings , I don’t think there is any scope from increasing DIRT. Neither do I think that income tax will increase , it is going to come from decreasing our spending.
    3 billion of cuts this year will not be enough to satisfy the bond markets. Our national debt will be 140 billion including NAMA by the end of this year. 140 billion for 4 million people , Greece was 300 billion for 11 million people. Greece had to cut their deficit by 47% and they did it and now they are borrowing on the open market again.
    The options or the easy ways of cutting are diminishing for the government now they will have to take even harder decisions. Will it be social welfare, education or health. I reckon the EU and IMF will step in sooner or later.
    I really despair, if I wasn’t tied down to a mortgage I would leave the country as 150,000 others have.

  13. Giovanni

    ” the effect of interest rate rises on our heavily indebted punters greatly outweighs the positive effect of trade because most people don’t work in the exporting sector”

    In fact it’s only the export sector that can save us, we are a small and open economy and cannot rely on internal growth. The government should (and in fairness, is) very wary of choking recovery in the export sectors.

  14. michaelcoughlan

    One of the things which needs to be pointed out also especially in light of this article is that the Irish State is being slowly turned into a de-facto communist state. The banks will probably be fully nationalised in the coming months. Therefore the only job worth having will be, a state job like a bank clerk, Garda, or nurse, (and if this government continues loading us with the debts of the banks then each of us will also have to do all three), a contractor providing services to a government body, or a multinational who doesn’t need the patronage of the state. The only other options are the dole or emigration. This country is getting more and more like Cuba or North Korea everyday!

    • Gege Le Beau

      Think you may have been talking to the Tea Party people, we are farrrrrrrrrrrrrrrrrrrrrr from a social democracy or even Republic for that matter, so you may continue to take comfort in the extreme right wing socio-economic policies of the current government, the Red Scare was tried 80 years ago by good old Dev…………..

      • michaelcoughlan

        Hello Gege Le Beau,

        Thank you for your response although I am not sure of the point you make. I agree with you that we do not adhere to the principles of a republic or a social democracy. We were formerly a kleptocracy and are now being transformed into a debt servicing machine. I can tell you however I haven’t been talking to anyone in the Tea Party but I bet you if Mr McWilliams were writing columns in the US they would be even more pointed than here in ours considering the amount of debt being put on the US Balance sheet. The point that I was making was the fact that the more the government takes part in the running the various nationalised businesses the more cronyism will be strengthened. I don’t believe there is a conspiracy nor do I believe the Government is in control at all with regard to implementing neo liberal principles. The government has lost complete control and is simply reacting to and fire fighting the troubles in which it now finds itself. One issue alone which I find reprehensible and which has only occurred recently without even a whimper from the citizenry is the fact that the “new management” in the various banks have yet again been caught out lying through their teeth. This is in regard to the amount of loans that NAMA have found to be actually performing as opposed to what the banks actually told them. And what have our colleagues in the fourth estate been doing? Filling us with shit about a faster than expected return to growth in the economy! And can anyone tell me why this “new management” who now answer to Brian Lenihan and subsequently us (rather than the shareholders who is us anyway) are still in their jobs? I suppose the citizenry are far too busy watching Dead Enders or Fair Shitty to do anything about it. One final point regarding the remark about Mr DeValera and the “red scare” you referred to. 80 years ago Stalin was only a couple of years from the Great Purge in Russia http://en.wikipedia.org/wiki/Great_Purge#Purge_of_the_army when “dissidents” you know the usual crew, intellectuals, lecturers, top artists, top ranking middle class officers etc. were rounded up and “dealt” with. You know he SHOT them. If I were living in Ireland at that time I would be well scared or has any one told you that the only time everyone in society is truly equal is when everyone is living in abject poverty or terror or both! The first victims of Communism were the Russian people themselves and subsequently their magnificent country and culture.

    • Deco

      Micheal – one of the things that will occur over the next five years is that the assumption that state jobs are safe – will melt. Basically, when the state runs out of money, pensions, salaries, bonuses for being a Greek military officer with more than one unmarried daughter etc… the list of provisions provided by the state is gone. The welfare state was in trouble before this started. Welfare for bankers and the paupers living in government owned housing on Shrewsbury Road, Foxrock etc…is going to kill any chance of survival. And when there is a jobs crisis in the private sector, any chance of reform of the public sector disappears to nothing. Just look at the size of the HSE.

      You might ask where is the evidence that state jobs are no good. Well, look at the collapse at the other Marxist experiment, the Soviet Union.

      Though, I expect this to be ugly. Most Russians in 1989 had low levels of material consumption. They were able to live on a subsistence level. I cannot see yer average Dundrum Shopping Centre patron being happy growing lettuce and swapping the new motor for a commuter ticket.

      So the next step will be an escalation in commitment towards Marxism for the well to do/well connected. This has been introduced and regarded as an agreeable possibility in the West, for at least four decades.

      Yeah, one big powerful state, with the citizenry all fighting to control it. A society based on the promise of something for nothing. I vote, therefore I sit back and receive.

      The countries that are doing well in this crisis, Brazil, China, Taiwan, India, are all going in the other direction. They gave up on Marxism because of practical considerations. In the West, among the great intellectual influencers, such thinking and consideration belies a complete lack of sophistication. They never had a Paul Krugman or a Gordon Brown to devise a plan based on the JM Keynes’s General Theory. They simply cannot fathomwhat the sophisticated elites in the West have already resolved.

      Yes, you just gotta believe in the sophistication that exists in the West, and that it will save us from reaping the results of our incompetence. Never mind the fact that the whole system has been sucked dry by previous efforts to rebubble the consumption, debt and spending. Have confidence in our politicians. They are economic illiterates. But they are doing as instructed by IBEC, ICTU, and the media. They are the one part of the economy that is providing a service and pushing up profits from those that purchase the service. They are part of the public sector, but they have a private sector understanding of getting paid to get a job done. As Stephen Byers, the New Labour MP commented, hiring a politician is like hiring a London cab.

    • dermo

      Spot on , the EU is no better ,we have a bunch of elites running Europe robbing and pillaging worst than the vikings .What we are seeing is communism by stealth ,instead of bullets in the back of the head and gulags ,they are using political creep ,crippling taxation and welfarism .This country and the EU populated nations are signing away their liberties and freedom for a bit of security and false promises when in the end these rotten vote buying free loader,free lunch politico’s know that these things cannot be paid for because it’s one big ponzi scheme.

    • Garry

      I agree though I’m not sure it can be called communism… I think people get caught up in labels …… one reply on tea parties and neo liberalism seems to miss the point entirely

      But I see what you mean…. to get ahead in Soviet Russia, you had to be a member of the party. There was an official truth that could not be argued with, production was always up, targets were always met, officials proclaimed the public were better off yet it was obvious that it was all bollocks. But that could never be admitted.

      Here the state gets ever bigger, controlling more and more stuff and its being run on patronage. NAMA must now be the biggest buyer of professional services in Ireland. It is also the biggest company in Ireland. the biggest finance company, has security over the most assets in Ireland, decides which to develop and why… And never has to explain itself.
      The credit review committee to get the banks lending is another example of putting more and more power in the hands of the state. Or rather political appointees…

      Just like the Soviets officials, the NAMA boys are spouting statistics, business plans. Backed up by an army of consultants, PR people, lawyers and other scum. All trying to prove how ‘on message’ they are so they can keep charging professional service fees. Because nobody else will pay them.

      Even if the ideologies and imagery are different, the similarities are striking.

  15. Deco

    Well it is a ‘jobless something’ but it is definitely a ‘jobless recovery’ because recovery it ain’t.

    In consideration of what happens to tax revenues, we will see people spending less, and shoving money into the undeclared economy – as a matter of convenience, and as a matter of principle.

  16. David has managed to forensically analyze the entire sorry saga that is now The Irish Republic is this his latest posting
    We the people deserve no better than to become slaves to the gombeenisem that runs our country if we do not stand together against the Gangsters and economic terrorists that run amok in the Dail
    For god sake will anybody stand up with me and fight these crooks!

  17. Afternoon, thanks for all the comments and the suggestions. They are more interesting than the articles these days!

    It seems to me that we are arriving at the realisation, maybe far too late, that this country of ours has to make a choice. The end game for the present policy will be to turn the country into a “large debt servicing machine”. When this happens the place will cease to matter either for the international markets but more importantly, for us and our children.

    It takes a while for this to seep into the public’s minds but when it does, the docility of the past two years will be replaced by real action, driven by anger.

    The adult way to deal with this is admit that we can’t pay the debts and do a deal with our creditors under the umbrella of the IMF and do what is necessary on every front in a “big bang” move over months not years.

    Best David

    • dermo

      Well David I was banging on about the rotten vote buying welfarism ,minimum wage,crony capitalism in this state , the EU, Euro ,ECB and the damage it was going wreck on Ireland and smaller nations .
      I was laughed at and looked upon as an idiot.
      The whole global financial system is dying on it’s legs and the major Central Banks are going to keep printing useless paper until we all go back to barter.This game is only starting and there’s along way for it to play out,it’s going to get nasty .

    • Deco

      I presume that policy is held captive to vested interests, who in defense of thier own objectives, have declared that this route is bad news for the entire country.

      We are once again, moving towards a consensus that supports nonsense. This is nothing unusual. This is the hall mark of most of the political establishment in many Western countries. It is a form of ‘convenient denial’. And it is enforced by the lambasting that is thrown upon any dissenting voice. It is by this means that the vested interest groups of this world control society, by stiffling the quality of intellectual debate about societies problems. And in this regard the advertising budget to be allocated via the media, is highly condusive towards getting results.

  18. VincentH

    My question is; Why are we making real a cheque written in Washington and Iowa.
    The reality is that China holds the paper.

  19. distributist

    We need to scrap the Irish State and start again a new State with a brand new constitution. Naturally, we would need to do this democratically. I am not advocating anarchy here. Sinn Féin did this to good effect back in 1918 when they achieved a landslide victory in the 1918 general election. What was it about Sinn Féin that turned the course of history and ultimately led to the foundation of our State? From my understanding of history it was the self sacrifice of rebel leaders and the signatories of the proclamation of the Irish republic in 1916 that ultimately led to the change in public opinion. Although what they were doing was utterly criminal under the law at the time, their knowing self sacrifice paved the way for a new confidence among the Irish co- conspirators(i.e. the ordinary law abiding people of Ireland) that there was now a real alternative to the existing administration. It was the selfless bravery or Pearce’s “blood sacrifice” that united the people to vote for Sinn Féin in 1918. David McWilliams is one of the few Irish people to exhibit this type of bravery. What he writes in each article contains a highly dangerous ingredient-TRUTH! We need men and women brave enough to speak the truth, to say no to gombeenism, to say no to consuming more in each day than they have produced, to say although I am a civil servant, I do not believe in “a job for life”. We almost need a cleansing blood sacrifice to purify the tainted blood of the Irish people. Something very dramatic is needed to give Irish people the bravery to follow an alternative, to say that they are prepared to go through the pain of having to work for one’s living and the living of others. It is not enough to allow the Chinese or Indian people to work as we consume. We all know deep down that we are thieves, and that we are living off the sweat of other countries peoples. Yes, by all means default on all our debt. Those were the debts of the old Irish Republic which had become contaminated after 61 years.
    Modern global capitalism has become a monster that is impossible to feed. Bank guarantees and NAMA will tame the rage of this hungry monster, but are only making him bigger and more brutal. And when there is nothing left to feed this bigger beast, he will devour this country. United, we can slay the monster, but we can expect to be wounded in the process.

    • PMC

      A lot of people are looking to lay the blame on the doorstep of others in this mess, some rightly so, but others most definitely not.
      “I never saw the Celtic Tiger” “The Celtic Tiger never knocked on my door” “Why should I have to pay”
      I know people who didn’t allow the car go over two years old, transformed their houses from top to bottom, took holidays abroad each year….., and yet this is the trash that they’re coming out with now. Blaming the same bunch of clowns that they’d ticked on the vote card only a few years previous!

      There’s a strain of greed and excess in Ireland made worse by an appreciation for downright odd behaviour, especially in rural Ireland. Like it or lump, I’m sick to the teeth of listening to people defending this group or that group, and you’re nothing but a this that and the next if you don’t tow the line.
      (Ivana Bacik towing the line on Primetime a few weeks ago, to the point where; she reckoned if two absolutely identical couples showed interest in adopting a child, with the ONLY exception being that one couple was heterosexual and the other homosexual – She steadfeastly refused to say that the child would be better off with the heterosexual couple. This was despite her repeatedly saying throughout the program that decisions should ALWAYS be made with the CHILDS best interest at heart – Unbloodybelievable)

      Anyway, this “Gombeenism” will take generations to get rid off. Plenty of booze, big plates of carvery each day, no exercise, mileage paid for, hotels paid for, tents in Galway, the new Avensis, fiddle the books, make a claim for some bit of an aul injury, stories of sneaky shenanigans by the divil over the road with the dayshent oul heart… The Irish just love it, we lap it up.

      Watching Darragh Calleary on The Frontline the other night, I didn’t know whether to burst my hole laughing, or curl up and cry. He was so far out of his depth it was frightening. There he sat, persisting with daft, boring oul rhetoric, known the country over to be nothing but lies, peppered with ludicrous “trained” hand gestures and the Fianna Fail waistline to boot.

      Politicians are arse lickers pure and simple. Its a rancid system here in Ireland where morons sneak in the back door and end up running the joint. This is probably why the likes of David would never get involved in it. Imagine, having to put up with it day in day out…
      Luckily though, we have Eamon Ryans experience in running a bike shop, otherwise the business community could have packed up and gone home. I mean for jaysus sake. The country should appoint admirable people who are intelligent, honest, have a proven track record in a relevant noted company or relevant specific field (in relation to the office being held), and to whom, we as a nation can look up to and be proud of. Not big daddy walrus, huffing and blowing lies out of his backside. All this re-shuffling nonsense as well… shifting eejits from one post to the next!

      I genuinely had a belief for a while that events over the past couple of years would force the nation to take a good hard look at itself and really question what we’re all about and which road we want to take in the future.
      I’m convinced now that this won’t be happening and that the best this backward greedy little town can hope for is that all that political hot air will be blown back up the arse of another disgusting property bubble.

      Glad now I got that off my chest :)

      • Gege Le Beau

        @ PWC – “The country should appoint admirable people who are intelligent, honest, have a proven track record in a relevant noted company or relevant specific field (in relation to the office being held), and to whom, we as a nation can look up to and be proud of.”

        This has a ring of the ‘big man theory of history’, what we need is democracy, people consulted and involved in the socio-economic decision making, local committees who nominate their representatives and tell them what they want, not rigged political meetings where the one deemed ‘most electable or connected’ gets a place on the ticket and turns up to tell you what they will do and how humbled they are to be elected!!!!

        What you want is ‘constant democracy’ not a country where you show up for an election event every couple of years with insider politicians for all parties get elected and sweet f’all changes for the masses.

        It would require a social transformation in keeping with the Second Coming, or a dramatic social revolution unseen since the days of Daniel O’Connell, mass popular meetings in public places across the country, a maturing of the country. How come these massive town hall style meetings have never been organised during the supposedly ‘greatest financial crisis in the history of the State?’, How can the elite continue to draw on enormous salaries during this period? What is being done for the unemployed? Are we expecting those at the top end of FAS to give a dam?

        The President, the Taoiseach, Senators and TDs should hold their heads in shame, how could any elected official pull over €200,000 (with expenses) a year when 455,000 lanquish on the dole, it is beyond my comprehension, the shame for a ‘Republic’!

        The system by its very nature, as illustrated in that example alone, is corrupt as be damned.

        David McWilliams to his credit wrote about insiders and outsiders, sadly though some of those shouting from the roof tops are bought off and brought into the golden tent. You don’t need ‘super’ individuals, you need a mass movement of people, for it is the people who will legislate in their interests, individuals legislate for theirs.

        Should a Taoiseach or a TD be allowed to have side interests, property across the globe, student block apartments, this is surely a conflict of interest, influences policy decisions, what about those TDs who are insolvent and vote on banking legislation? Look at the front of the Irish examiner, one of the senators sitting in judgement of Callely, his law firm is alleged to have provided legal advice on the purchase of the home in West Cork!

        Change comes from the masses, from the streets, from social movements, and that has not happened in this country since the Civil Rights Movement in the North, when did social change come from the streets in the Republic? Maybe that is why the army was brought back from Chad (just in case something kicks off, which I think is highly unlikely).

    • Deco

      Well, it should not be necessary.
      As Furrylugs has pointed out repeatedly, Bunreacht na hEireann is equiped to deal with the crookedness in Irish business culture. It is called Article 45.

      But nobody seems to take any notice of Article 45. NAMA got through the Dail (thanks to opposition TDs not being around-and the entire GP voting in favour of NAMA, something FF could not get out of the FF backbenchers), and there was no comment about Article 45. Then it went through the Seanad, where the opposition are even stronger in numbers – and not hold up there. And then NAMA was to be signed by McUseless, and she never raised even the slightest concern about it’s constitutionality. (And she is a lawyer).

      But in any case, as Furrylugs, Tim and countless others have stated, it is clear from reading Article 45, that NAMA is bordering unconstitutional, if it is not unconstitutional.

      Again, if people really wanted to stop this, they would bring up Article 45, and they would not be going the long way about – unless they don’t give a toss except to drive some other agenda.

    • coldblow


      While I agree with your sentiments in general, I don’t think it’s true that the Republic became contaminated over the years but rather it was set up that way right from the beginning. I’m not talking so much about clericalism or ‘folklorism’ here so much as the underlying economic system inherited from a colonial past etc etc. In other words the Republic was set up specifically to serve vested interests. The rest is mythology, sentimentalism, folklorism and camouflage; I’m sure all countries do this but we do it better than our European neighbours at least and so well that most of us still believe it! Ok, on one level you can agree that the early govt. had to curb the extremists and stabilize the state, that the books had to be balanced (‘in all our interests’) etc etc, but at a deeper level it was all to serve the vested interests (although some are more vested than others). And that’s the way they (we?) mean to continue. We don’t know anything else and that explains current policy. See Crotty, Lee. As always I am open to correction.

      • Deco

        The Republic was not set up to serve the vested interests. It was set up to be a holding body for institutions designed to serve the common good. Rather, over the last three decades vested interests became powerfully adept at controlling it and using the state to provide something for nothing, at the expense of the general populace. In fact it was plundered. And it has got worse with every decade. The Marxist premise that the state should exist to effect redistribution has been performed by every vested interest, in a form of Marxist capitalism.

        From what I can see, the intervention of Eddie Hobbs, and his series “Rip-Off Republic” was a defining moment, because it described this precisely to the populace. In effect, this was silenced, and Hobbs has never been given the potential to question the behaviour that exists.

        The response that we are hearing now, is that behaviour can be regulated.

        But actually, the more effective way is to have countering behaviour from the citizenry. But this is not possible, because the media is paid for by the vested interests. And both provide the basis of the behaviour of the political system. Jackie Healy Rae might produce comical moments, but he exists because the political establishment is already subverted by vested interests, and his own electoral base are responding to the subjugation of democracy. Therefore he must be ridiculed. The real problem is clowns like Callelly who will fill their own pockets, while professing to be serving the national interest in a party that is lecturing us on what is best for us. (and it could be any one of the political parties in the Dail – they only in degrees, but not in drection).

        I do not fear the Lowry or the JRE politicians. They are at the voters’ beck and call. But the politicians who lecture us, who rely on machinery and advertising to get power – these people are loaded with assumptions about the people being sheep. It is these who will subvert democracy.

        Let’s put it this way – who exactly voted for IBEC to be running the country ?

        • coldblow

          Ok so, it was set up for the common good – understood in terms of property interests. The austerity measures of the early 20s, for example, can only be seen as being for the common good with that qualification. Ditto for that half of the Irish population who were forced to emigrate following the founding of the state, generally those without property.

          Take your other points though.

      • coldblow

        Just a little bit more occurred to me on this. One reading of the drive for independence is that while the inability of the Irish propertied and prof. classes to hold the very highest office was frustrated under the Crown this irritant was insufficient to push them into secession. And the same can be said for their alarm that the British Lib. Govt’s embryonic welfare measures (eg old age pension) would be a drain on their own resources. But World War 1 changed matters. It was one thing for the poor and dispossessed to join up and take their chances in the British army – with a reasonable wage coming in they thought they were better off, despite the shellfire. And the old Ango Irish joined up and fell under the banner of ‘nobless oblige’. But the Irish bourgeoisie had done well in the war and life was sweet for them. What drove them to rebellion was the threat of conscription in 1916/17.

        My dad told me that he as a young lad he was helping his father to drive a pig along the road to the market in Sept. 1939 when he met someone on the road who told him that war had been/ was about to be declared. “This will drive the price of pigs up”, said my grandfather. “We’ll leave it a few more weeks.) And with that they turned around and went home.

        • Deco

          colblow – not sure what to say – obviously your grandfather had capitalist leanings – this must come as a major shock to you.

          Or maybe he just realised what was really going on ?

          • coldblow

            He was right of course. This was about survival – he had 20 or 30 acres of boggy land. I’m no lefty, if that’s what you are wondering, by the way. Seeing the politicos at uni would put you off that – “Point of order, Chairman” etc. Actually that’s more the political class for you rather than ‘leftiness’, as George Lee found out, it’s just that most of them professed to be ‘broad left’, at least until they left and got a job. Sue Slipman and other student leaders ended up in the SDP apparently. Actually I suppose I probably am a bit of a lefty although I never gave a preference to ILP in my life, but that may change. I think they got sidelined onto soft, social issues and ideological twaddle and neglected the important economic ones, the ******s! These two works might help explain my confused thinking: Ivana, Bacik. The point I was trying to make is that the ruling class will use any available camouflage ( be it ‘morality’, ‘revolutionary mythology’, ‘libertarianism’, ‘nationalism’ or ‘globalism’ etc) to pursue their own interests at the expense of everyone else. I’m not even criticizing the Irish for voting in their own narrow interests (eg PS union members voting for the two right-wing parties as they best represented their perceived real interests) as it’s always been about survival. It’s just that as a system it always leads to failure here.

  20. coldblow

    I siuppose the article could also have mentioned the sell off of state assets as they try to postpone the inevitable.

    Also I’m not too sure what David means at the end in his reference to the bankruptcy of an entire generation of go-getters and their imitators. Does he mean those looking for the easy money or genuine entrepreneurs?

  21. R(esponsibility)A(ccountability)T(ransparency) Party would look at Ivor Callely expenses and be appalled at the limited 21 day suspension sanction. Probably change sanction to include losing seat in the Senate. Regarding the fact West Cork house not even his own, then its embezzlement and a matter for the Garda.

    Government, government parties, institutions e.g HSE, individual politicians, public service workers would require a RAT declaration to state precisely the terms upon which a job is fulfilled or failed and the sanctions available for non compliance in keeping with the purpose of a job, department, institution.

    Freedom of Information Act would have to be strongly strengthened to satisfy the public good. Transparency would have to use a model based on professional and efficiency and satisfy criteria around this objective.

    A new improved and modernised constitution, improvements to the party system with an added list and preferment system. Plenty of eye opener RAT legislation based on R&D of known croney, insider, corruption around NEDS, quangos and a halving of number of politicians and halving of politico salaries and across the board halving of expenses.

    Public suggestion boxes re improvements to Public services, deficits in public services, failures/improvements in services part of an open R&D project built upon transparency.

    Anglo would be closed down immediately, its affairs would up in a least cost scenario presented to the public. Banks would require a comprehensive RAT report based on open standards of boolean true or false….Rat sieves.

    Back to the reality of new baNama Ireland of communist corporatocracy, bankocracy and gombeen rote learning of ‘Tell this to them’, pawn and puppets confidently milking the mad cows of money and power..Keep smiling.

    • coldblow

      An old point of mine: you’d really need a form of FOI for all citizens, living here or abroad, stating all assets and cashflows and published for all to see.

  22. Gege Le Beau

    @cbweb – could not agree more, and said more or less the same thing in response to Dan O’Brien’s article in today’s Irish Times (see comments section). Let us see the books, private business and banks should be required to declare their interests. The latter in particular is back to its profit making ways while the country suffers. Culture of impunity.

    “No slashing of elite wages in politics, business, media, academia, the judiciary, semi-state quangos, no scrapping of the Presidency, Senate in our time of crisis, no Garda investigation (unlike England) for fiddled expenses but don’t pay your TV licence…….no, none of that, back to the well a third time and take from those on the PAYE scheme or pension roll, no opening of the books at the Dept. of Finance or private sector so we can see the true figures (is this yet another con job like the 1980s?), the great race downwards in the effort to become more ‘competitive’? With who? China, India?”

    Judging by the responses, he is getting a pasting, but then he did work for the Economist, think his neoliberal bluff is getting called here in Ireland though.

  23. Original-Ed

    David, when some elements tried to rubbish you some weeks ago it was a clear signal that the end game is very near. Last weekend we had Willie O’Dea calling for confidence, in what, I don’t know, but it’s another clear signal of desperation.
    Reflecting on Seanie’s demise and on the whole insider thing there appears to be one common source to most of our problems and that is UCD. Charlie, Seanie, Cowen et al were all indoctrinated there – there’s something in it.

  24. Sabres of Paradise


    “For example AIB grew its loan book by an astonishing 154pc in the five years from 2003 to 2008, the period when Mr Sheehy started to come under pressure to leave. Much of the increase was accounted for by property lending — a mess now being cleared up by Colm Doherty and a partially new management team.”

    love these unsigned ghost articles, the AIB Pr machine, Funny how this Doherty joker is seem as some sort of white knight.

    he gladly took all the coin sheehy gave him, But more importantly his own Treasury department were the ones who went out into the market to fund all these property deals….He was aware on a daily basis what was going on…As David says, we all need to read through the lies more lies and more lies…The irony not lost on you all that Big Brian was wobblin through the NYSE…

  25. tony_murphy

    I heard about some guy called Eugene Regan who is a senator. He is in the news in relation to something he said about Ivor Callagey.. Some interesting links can be found using google.

    Looks like NAMA has some high profile opponents

    Look at goldman sachs funds and board of directors and the Irish connections


  26. Gege Le Beau

    Slavery – old and new.

    As we see the neoliberal agenda being ruthlessly imposed, the way of the slave master is official policy. Cowen even showed up in Wall Street recently in an ill conceived and desperate looking attempt by an out of sorts looking man to drum up business (the origins of the name Wall Street are quite interesting and well worth looking up, but it was once a wall designed to keep black slaves from escaping). Ironically, Irish people are once again the slaves of an indifferent marketplace, they are debt slaves, wage slaves, slaves to the economic Gods.

    Where the High Priests of this modern day slavery such as economists advocate cutting the old age pension, or business people and ‘Professors’ in solemn tones push for cutting the minimum wage (but never focus on the maximum wage). Where ‘politicians’ like Cowen and Lenihan invoke nationalism (the last refuge of the scoundrel) in this Upside Down world (why not just give us the election boys?)

    As the Irish government scatters asylum seekers in Mosney to the four corners of Ireland, in a deliberate attempt to break up their social contacts and survival mechanisms, it would be worth reminding ourselves of how we were once portrayed…….the absence of any context in the following piece (the Great Famine had just kicked in when this was published), as in the absence of any context around the violent suggestions to cut the minimum wage (on Vincent Browne one individual refused to answer when asked if he could live on €15,700 per annum) etc suggests a great deal, the more things change, the more they stay the same:

    “The Irishman loves his pig as the Arab his horse, with the difference that he sells it when it is fat enough to kill. Otherwise, he eats and sleeps with it, his children play with it, ride upon it, roll in the dirt with it, as any one may see a thousand times repeated in all the great towns of England……….Drink is the only thing which makes the Irishman’s life worth having, drink and his cheery care-free temperament; so he revels in drink to the point of the most bestial drunkenness. The southern facile character of the Irishman, his crudity, which places him but little above the savage, his contempt for all humane enjoyments, in which his very crudeness makes him incapable of sharing, his filth and poverty, all favour drunkenness. The temptation is great, he cannot resist it, and so when he has money he gets rid of it down his throat.”
    ~ Frederick Engels, The Condition of the Working Classes in England, 1845.

    Full ‘appraisal’ of the Irish by Engels here:

    200 meters from where I live is a triangular block of houses known locally as Gallows Green. On that spot, the British led political and other prisoners from Elizabeth Fort on Barrack streets to the Hangman’s noose (one 12yr old boy was hung there for robbing a potato from the English market to feed his starving family – once again the ‘market’ literally raises its ugly head. Simon Schama to his credit does an excellent analysis of this in the following programme – The Empire of Good Intentions:

    The only item to commemorate these appalling acts is a small plague on the wall which acknowledges those hanged for fighting with the United Irishmen in March and July, 1798, I wondered, is this the Ireland they fought for, where the poor, the unemployed, the carer, the blind, the old age pensioner are all targeted by politicians making over €200,000 per year.

    To conclude, Frederick Douglass, the noted orator and abolitionist, spoke in Cork’s City Hall in October of 1845, he said the following: (to me it seems our feet are tied, a boot is on our neck, we are kept ignorant and we remain slaves):

    “I must grant, that the Negroes in America are inferior to the Whites. But why are they so? is another question–and a question to which I will call your attention for a few moments.–The people of America deprive us of every privilege–they turn round and taunt us with our inferiority!–they stand upon our necks, they impudently taunt us, and ask the question, why we don’t stand up erect? they tie our feet, and ask us why we don’t run? that is the position of America in the present time, the laws forbid education, the mother must not teach her child the letters of the Lord’s prayer; and then while this unfortunate state of things exist they turn round and ask, why we are not moral and intelligent; and tell us, because we are not, that they have the right to enslave [us].”

    • coldblow

      Good post. I remember Crotty using that Engels quote as evidence that he clearly didn’t understand the situation here. Can’t find it unfortunately. Isn’t it strange that we have become so brainwashed that it’s somehow regarded as bad manners to discuss maximum wages. I remember broaching the subject with an Irish nurse back in the 80s and she reacted ferociously to my very tame suggestion that perhsps a differrential of no more than a factor of 20 should separate the very highest and the lowest wages. Doctors and consultants apparantly had the right to unilimited earnings!

      • coldblow

        Here’s someone else who mentions a 20 to 1 pay multiple:


        “This is the case for a pay multiple, a recognition that pay will be greater reflecting effort and contribution, but within bounds. It is an effort, applicable as much in the private sector as the public sector, to recognise the importance of some basic human motivations both individual and social. Where there is a fairness deficit, organisations and societies start to become dysfunctional.
        That is the review’s starting point, but questions crowd in. Nobody really knows the extent of disproportionate top pay in the public sector, its impact on morale and performance and why it is happening. The review will set out to discover the best answers it can. To what extent has the rise in top pay in the private sector had an impact on the public sector? The presumption behind the entire exercise is that people and society value fairness so much they would respond well to a pay multiple of 20-to-one in the public sector, and it might help set a social norm more widely. Britain would become a better and more productive place and constrain the public sector pay bill.
        This is an opportunity — the first in my adult life — to engage publicly with what constitutes fairness and to define our expectations of the pay of those we entrust with power. Please join in.”

        Nice to see I’m having some influence, but a little worrying. 20 was just a number that sprang to mind at the time… perhaps 5 or 6 would be fairer…

  27. Deco

    Well, on the jobs front we are seeing some good news.


    Now, the government funded project is not actually creating jobs – but creating jobs out of taxes on those who are lucky enough to still have jobs.

    But, maybe we might be getting some things right again. Though, having Calamity involved in the official announcement might not be one of them.

  28. Gege Le Beau

    A tad overblown, but you get the picture……….failed ideology which is still being followed………..

    “The credit crunch has shattered America’s ‘neoliberal dream’The global financial crisis marked the end of the dominance of free-market capitalism, and even the IMF is now questioning the ideology behind it”

    • IMF has a history of supporting banks and institutions at the expense of taxpayers. We should be wary of the support they are giving to our Gomernment. There’s a history of recent IMF failures from Argentina to recent accounting failures that impacted badly on Austrian banks:


      “In the late 1990s, when a chain of financial crises broke out in Asia, particularly South Korea, Thailand and Indonesia, the IMF provided rescue funds, but demanded high interest rates, corporate and bank restructuring, spending cuts and privatization. At the time, South Korea also experienced a drastic fall in its growth rate and high unemployment as a result of those policies. The “IMF Incident” is still remembered by South Koreans as one of their most difficult economic periods.”

      The above would represent a fair bench mark of their approach, privatization often happening to the extent of public utilities being sold for a song in Argentina. In place of high interest rates we might expect a slashing of spending on home grown job creation.


      This somewhat dated but worth a read:


      Calls for Sharply Reduced Role for Institution

      A report on the impact of IMF economic programs in five countries concludes that the programs have led to serious economic, social and environmental problems.

      The report is based on local studies commissioned by The Development GAP and Friends of the Earth in Mexico, Nicaragua, Hungary, Senegal and Tanzania. It concludes that the IMF has “greatly increased the economic vulnerability of nation after nation.”

      In Mexico, the report states, IMF programs have “caused an economic depression, pushing millions of farmers out of agriculture, bankrupting thousands of small businesses, and drastically slashing jobs and wages.”

      In Nicaragua, the study says, “financial-sector deregulation, narrowly focused and without adequate prior institutional reform, has directed capital toward short-term, high-interest deposits and away from productive investment, particularly the activities of small-scale producers in both the agricultural and manufacturing sectors.”

      The research found that, in Tanzania, IMF programs have reoriented agricultural production toward exports and have thus produced “expanding rural poverty, income inequality and environmental degradation… Food security, housing conditions and primary-school enrollment have fallen while malnutrition and infant mortality have been on the rise.”

      Senegal, after 18 years of IMF programs, “has experienced declining quality in its education and health-care systems and a growth in maternal mortality, unemployment and the use of child labor.” The study says that women have suffered the most under IMF programs.

      In Hungary, under IMF tutelage, liberalized trade, tightened money supply and rapid and ill-considered privatization have led to greatly increased unemployment and a redirection of resources away from education and social services and to wealthy bond holders.

      Carol Welch, International Policy Analyst at Friends of the Earth, said “The IMF has a consistent record of environmental and economic destruction and poverty exacerbation. We have to expose this and stop the Fund’s attempt to establish a permanent austerity program for the poor countries.”

      Doug Hellinger, Executive Director of The Development GAP, added “At a time when the IMF is seeking an enhanced role for itself — in the poorest countries and in the global financial system — its record of rewarding investors at the expense of the majority of citizens around the globe speaks for itself.”

      It’st deja vu the support the IMF is currently giving to our Goms for bailing out Anglo, the banks, at taxpayers expense, while the Gomernment prepares to roll out its blanket of austerity across the whole economy, doing what it has been most successful doing in its lifetime, making a bad situation worse.

      • Plus I should add both The World Bank and IMF were set up after the Second World War in Bretton Woods, New Hampshire, basically the financial system they would oversee was designed to rebuild Europe. It was successful in this regard. It’s ironic the IMF supports austerity measures across Europe that will make a bad situation worse, while at the same time observing the success of the stimulus applied to the US and China by their respective regimes. Perhaps it is a case of supporting the CEO of the global financial system, the US, against the threat of competition from the EU, or maybe others have a view on the IMF support for austerity measures across the PIIGS, against the argument for stimulus as a counter weight against recession? The argument for stimulus in Ireland should be very compelling given the context of our status as an open economy relying largely on exports into a growing US economy, and possibly China in the future, both of whom are growing.

        • coldblow

          Hudson describes the IMF and World Bank as the ‘collection agents’ for the financial rentier class.

          • Gege Le Beau

            Chomsky writes about the IMF and World Bank in harsher terms, calls them the financial enforcers/heavy guys for the US, see his ‘Mafia Principle’ as applied to international relations.

            Stiglitz is also hard in his forensic analysis of the failures and dreadful ‘Washington Consensus’ polices the IMF pursued, stating not only did it not anticipate crises, but vastly exascerbated them (including in Southeast Asia, Africa and Latin America), there is a lot of literature on this.

            Should be pointed out that Stiglitz worked for the World Bank, but I find his books and commentary a good cut above the rest in terms of honesty and straight talking but he is a ‘capitalist’ and an advocate of privatisation, interested in regulating/moderating the harsher aspects of the beast, so not terribly radical, but then if he was he would have got neither the post as advisor to the Clinton Administration or the Nobel Peace Prize. Chomsky never got the latter for instance and he has done great service for the struggle.

          • Gege Le Beau

            sorry that should have read ‘Nobel Prize for Economics (2001)’ not peace ;-)

  29. As the godd Doctor Gurdgiev would say “Hat-tip to Deco”

    A45 Para 2 here again for those who may not have seen it yet…..

    2. The State shall, in particular, direct its policy towards securing:

    -That the citizens (all of whom, men and women equally, have the right to an adequate means of livelihood) may through their occupations find the means of making reasonable provision for their domestic needs.

    ii. That the ownership and control of the material resources of the community may be so distributed amongst private individuals and the various classes as best to subserve the common good.

    iii. That, especially, the operation of free competition shall not be allowed so to develop as to result in the concentration of the ownership or control of essential commodities in a few individuals to the common detriment.

    iv. That in what pertains to the control of credit the constant and predominant aim shall be the welfare of the people as a whole.

    v. That there may be established on the land in economic security as many families as in the circumstances shall be practicable.

    Pretty simple and ethical really. But then ethics has been a major casualty of this economic rearguard action to protect vested interests.
    I never thought I’d live in a one party state. Interesting times.

  30. Harper66

    Reality Check – “Our Public sector and Banks are robbing us blind — Too many in this country that only care abour numero uno and don’t care much about numero Duo.

    The Host becomes weaker and the parasites become bolder.

    Pauldiv – In times of economic trouble there are always odious creatures who crawl out from under a stone to share air their toxic views.

    So while it is odious to comment on foreign nationals our public servants are fair game? It is true what they say in difficult times the mob will find some one to blame.

    It is safe to assume then that this mob is pointing its finger at public servants? Shame.This kind of talk is back lane, what makes it worse is that it has gone unchallenged in what is supposed to be a forum for educated debate.

    The majority of public servants are not earning huge money and like every other decent person in this country is going to bed at night wondering how to make the money stretch to meet mortgage, food bills etc.

  31. Tull McAdoo

    I remember years ago when I was at College studying Economics and being introduced to the writings of Adam Smith and his notion of this “invisible hand” and how it acts as a force to return markets to equilibrium, to where demand meets supply, or to what some people call “the market clearing price”. It was pointed out to me back then, by a wiley old Professor, that while Smith’s idea was grand in theory, in practice it will never be allowed to work as most of the power brokers who like to control societies would not be willing to relinquish their control to some “invisible hand” as it might move the market in a direction that does not suit their objectives.
    It was in the context of the above that I was reflecting on where Ireland’s market is at the moment, and indeed where it was at before the bust. Now I know that people have strong opinions at the moment on whether a Keynesian stimulus of some sort should be employed, or whether a more “Austrian school” approach of free market or neo-liberalism is the best approach. If we could leave the debate on the medicine that’s needed to one side for the moment and look at the patient and see if we can determine what exactly are the ailments that require attention, prioritise them so that we can have complete recovery as quickly as we can.
    Cowen and his people, from what I can see, seem to have decided that the Banks are the heart of the Country and their pumping of credit around the various arteries is Priority A. They then see their own Government Departments as Priority B, as they are the brain where all decisions are made, and therefore must be supplied with credit from the Banks (bond buying) and oxygen (taxes and other borrowings) to sustain itself. This brings us to the main body or the bulk of the Country, the people, the “free” market, the private sector, call it what you like but its where most of us live and breathe, and eek out an existence to varying degrees or Priority C.
    I think the Government have misdiagnosed the problem (intentionally perhaps so) and as a result have got their priorities mixed up and the result of all this is that neither the Keynesians nor Austrians will be able to revive the body. What we have at the moment is a “heart” on life support, a “brain” that is totally confused and suffering from a degenerative disease caused by crony in breeding, and a body that is paralysed from the neck down as a result of a massive downward deflationary fall.
    That’s what I see lying on the trolly in the corridor awaiting attention and treatment when the chief consultants Cowen and Linehan and Matron Mary (take yere pick on that one) return from the great affairs of State, Priority ZZZZZ by the way, so there ye have it folks, its all about looking after Priority Z.
    When Cowen is jarred he like to finish up the night with a few verses of “the offaly rover”, I would like to think that I had more taste than that, so I’ll leave ye with one of my favourites Mr. Billy Paul who picked up a Grammy back in 72 for this timeless classic, so Goodnight Ireland, sleep well and take it away Billy……

  32. Deco

    This is unbelievable. And to think that this scoundrel got away with a full pension etc…


    Patrick Neary – another “safe pair of hands”. A consumate insider. A man of sophistication. A man with an answer for everything. A man who could talk for hours and tell the ordinary citizen nothing.

    The type of public servant that IBEC need to have running state quangoes.

    And Shane Ross told us in his book the bankers, that the bankers who give the regulators golf games, and hand them ‘customer’s privelege’ (this means that the bankers would deliberate allow the regulators to win.

    Strangely enough, the markets had already driven the ANIB share price to the floor at that stage. So we had a private sector / public sector difference of opinion concerning the real value (sic) of Anglo Irish Bank.

    So there you have it. Ireland had regulation. And it was mostly written in Brussels. And it failed. Only as good as the clowns who were put in charge of it. And the good news is that they are still on the job. Or advertising sponsors should be happy with this.

    • Garry

      Deco, I have no time or respect for Paddy Neary… he’s one of the 20 Irish people I referred to earlier.

      But he has been paid off… and is off the stage…. Now his name is being dragged up again on the front pages of the papers…. Why and why now?

      That article is a leak about papers that are due to be released to the Dail public accounts committee…. Its the PR boys trying to deflect blame from the paymasters, who are still at their work. Others who knew what they were doing then when they made the decisions on Anglo, NAMA etc and are now looking to deflect attention.

      From the article…. The details of Mr Neary’s communications with the Government will be revealed in documents supplied by the Department of Finance to the Dail’s Public Accounts Committee.

      The committee is planning to publish almost 50 documents on its website today.

  33. Deco

    I reckon that with the state borrowing 20 Billion Euro per year, that the ICTU bosses don’t want to do anything that will stop the inflow of borrowing. That means compliance with whatever policy pleases the bond markets.

    • Hi Deco,

      I still don’t get it. How come the bond markets are pleased with US and China stimulus measures and ‘apparently’ are negative against EMU stimulus measures. I say ‘apparently’ because e.g in Ireland Inc we know stimulus measures are not being tried. The method instead is slash and burn presumably to get 60,000/per annum off the live register onto the emigrant boats?

      • paddythepig

        7 billion euros this year is being spent on intrastructure development. There is stimulus.

        The real problem is that the nation is not commercially productive enough, and spends & stimulates like there’s no tomorrow.


        • http://bit.ly/c0rHa1

          “This year, spending on capital spending will fall to €7.3bn or 11.5% of all the €64bn the government will spend this year.

          Colm McCarthy’s July report on pay and public staff numbers, which identified a €5.3bn menu of potential cuts, properly returned the focus back onto current spending — by far the biggest slice of the government cake. But the pressures on the government finances are so great that it will again fail to resist raiding the capital spending sweet tin in the December budget.

          Political difficulties in delivering €4bn savings from the overall current and capital spending in 2010 means that capital spending — and the badly needed jobs that depend on it — will again take a disproportionate share of the cuts.

          As a strategy of keeping unemployment as low as possible to limit the demands on welfare payments, slashing the €7.3bn capital budget makes little economic sense.”

          I’m not talking about spending on white elephants such as the construction of the National conference Centre, €47 million first installment due next month, according to Lifetimes, a €713 million project requiring €47 million annually for the first 5 years, then €23million annually for the next 20 yrs. Or the Gormless attack on money already spent on the Ringsend incinerator. But projects based not on croneyism but proper R&D, e.g Shannon/Dublin water scheme, tourism that can give immediate employment to many and immediate return.

          • paddythepig

            So 11% of all spending this year is capital spending. I look out the window from my house, and what do I see? I see an extension to the local school built financed by the capital spending budget. This is replicated all over the country.

            This is economic stimulus by the government.

          • Don’t think its as high as 11% and worry is it will be cut even further, no harm in better school buildings? Yes, it is stimulus of a sort, it provides jobs and is an investment in the future. OT, lots of the high management wages in education and the public sector were even too high during the boom. They could easily be slashed. In many cases, money saved could create 3/4 jobs extra with proportionate return via taxes… have a good weekend.

          • paddythepig

            Hi cbweb, It is 11.5% to be exact. I agree with your last comment though, if they went to work on wasteful public spending with a slash-hook, some of this money could be used for productive stimulus, not a bad thing at all if the money is wisely spent. This would get a greater end product for all the money the Government spends.

            I think the last thing they’ll do is stop wasting money. It’s all they know, and they haven’t the bottle to tell the thousands of makey-up job wasters they pay a wage to to go swing. They will only do so when the private sector either can’t or won’t finance them anymore.

            Bon weekend.

      • Deco

        The US is fudging the figures. And besides it is a confidence game. Several states are in dire trouble. In much worse trouble that Greece. I mean in such troubel that the schools work four day weeks, and the kids stay at home on Friday in order to cut down on expenses. And the most indebted of the bankrupt states have something amazing in common. They have all consistently elected Tamany Hall Democratic Party cliques since the mid 1960s. These are US states that elect the odd Lt. Governor or Governor from the GOP – but generally elect legistalatures with Democrat majorities.

        The worst of these are Illinois, and California. Illinois is a worse than Greece in many respects. It’s state budget deficit is uncontrollable. It’s unions don’t need to protest – they are in control of the state political system. The state politicians are notoriously corrupt.

        Now, I can understand why the bond markets are punishing the PIGIS. But I cannot understand why Illinois, California, New Jersey, and others have escaped any bond market attacks. Maybe the US Fed is propping up their bond markets.

        And likewise, there is sparse coverage from the media here concerning this. Coverage is completely non-existent in the middle-class left leaning media like the BBC, the Guardian, and the IT.

        By the way, I think that the term Stimulus Package is a PR term for borrowing money to prevent reality setting in. Gordon Brown almost pulled off staying in power with this trick. Zapatero, Berlosconi and others are trying the same trick. Maybe Clowen and Gormless think that they can do the same ?


    Does Neary have any qulifications?-an apprenticeship in plastering doesn’t count!.Nice to Seanie is still getting his daily round of golf-yesterday’s Mail.Losing 120,00 people in the next 2 years is the equivalent of the UK losing nearly 2 million people over the same time frame.I magine the outcry in the British media.Here, it’s just accepted.

  35. Gege Le Beau

    Paraphrasing from the secion on Rapa Nui and its people on Wikipedia…………….

    “The history of the island of Ireland is rich and controversial. Its inhabitants endured famines, epidemics, civil war, slave raids, colonialism, and eventual bankruptcy (see NAMA); their population has declined precipitously more than once. They have left a cultural and historical legacy that has brought them both fame and infamy disproportionate to their population.”

    There is an old Irish story called ‘The Last Native’, we are not told how all the people came to be wiped out, but wiped out they were leaving only one desolate ‘native’ travelling the land in the futile search for his fellow natives……..could that native in time be, David McWilliams, the ‘lone voice’ warning other peoples to heed the lessons of the lost tribe ‘The Irish’…..

  36. Alan42

    Its hard to know how to go forward and deal with this mess . Yes Ireland is and will continue to be a debt servicing machine for decades to come . Economic growth will return but at 1 or 2 % will result in little or no jobs . We have been here before in the 50′s , 70′s and the 1980′s . FF will never default or confront bond holders with a take it or leave it deal . TD’s from all parties , ministers , Kenny and Cowen have a job with great levels of pay , expenses and several pensions on the go while still working . If we default with FF at the helm the bond market will never again lend to Ireland under a FF government . They will demand change as they were more than happy to start lending to Russia again under Putin once Boris was gone . This would be the end of FF . And who really wants to put themselves out of a job ? FG and Labour are happy enough in their roles as opposition as nobody is stopping their pay . The Greens are nothing but a joke really . Middle class dinner party types who are more concerned with Stag hunting than the shocking rate of under 25′s who are unemployed . Hanging around with nothing to do but to leave or turn to crime or drugs . As long as people pay some tax and the EU throws money at them they don’t really care .

    Look at it like this . Between 20 and 28 billion has gone into Anglo which is a dead bank . It is being leaked slowly that maybe NAMA will now make a loss ( the shock ) and yet Irish people are not storming the Dail .

    If somebody robbed my life savings and told me that I was going to have a very poor quality of life until I die because I was going to be servicing their debts , I would be pretty angry and storming all kinds of things ( I live in Austraia now and from my cold dead hands will you prise that Aussie passport from me ) .

    They did care in the 50′s , the 70′s , the 80′s and neither do they care now . Its not a conspiracy . Its how Ireland is run that is the problem . At the very least we need a new constitution .

  37. Alan42

    Havea read of this http://www.irishtimes.com/newspaper/weekend/2010/0717/1224274880645.html

    Now if I was paying a 40 year 100 mortgage , was unemployed or getting taxed to the hilt , I would be raging . Paddy however is not to concerned .

  38. Tull McAdoo

    Here ya go Deco, and all your auld talk about these great bastions and protectors of our society. Its not that IBEC hav’nt lifted every rock in Ireland to find suitable people, but the sad truth is that there jus’nt enough of the right sort of people to go around.


    p.s Not blowing my own trumpet or anything, but I do have a Masters in Business and a PhD in Economics and over twenty years experience in the Fed in Australia. I can be on a Johnny Qantas next week if they put me on the IBEC rates. Some chance I would pass the interview after I mentioned that I was cavorting with McWilliams and ye Bucks and Buckettes around here of course.
    Anyhoo given that Mary Harney is sharpning her scalpels to cut over 600 million from the usual suspects, I’ll leave ye with a nice tune from Nina Simone, listen out for her piano playing on this one, classically
    trained but never given a chance because of the colour of her skin
    . You just cannot beat the Anglo/ Saxon culture, just look at all the “foreigners” that IBEC have recommended for the Boards of Irish Institutions, sure Bank of Ireland And AIB and IL&P board meetings resemble the UN for Gods sake.Goodnight Ireland , sleep well and take it away Nina….


  39. @Tull McAdoo.
    Sharp as a button as usual but remember we live here in the middle of this shambles. I have the means(thankfully) to shag off if I want to but this is my patch and I like it.
    Be advised that the latest FF mantra is that we are governed by too many foreigners and greeny people. This is the latest wheeze to come out of the weekend PR-fest ran by old Dumpsey, he of the TARA Motorway(Feck The Pyramids)Drive On Regardless Munister Fur Das Alles Krect shade of what masquerades loosely as an elected official round these parts.
    I digress.
    Maintaining focus one ones primary point is futile when one is consumed with anger.
    Two things are remarkable insofar as they are diametrically opposed yet first cousins.
    Brian Linehan is the first Minister to ask advice from our host and the last to listen to him. Positively Faustian.
    And we all suffer, at least those of us who live here.
    My own view, since I’m taking the time to make it, is such.
    Seanie is now slobbering along on the few bob he threw Mrs Seanie before he got nobbled.That particular tip of the iceberg will be joined by others, because the great God IMF deems it so.
    The man below beside me in West Cork still calls the shots because he’s got the power to. Goldman Sachs et al have made a tidy profit from selling the world short for much of my life. Good luck to them, if thats what floats their boat.
    They have no plan B. That concept is alien. All they see, blindly, is profit. They cannot see that they have not only killed off the Golden Goose nor even the Golden Egg, but that they have created the Golden Glugger, a useless meaningless fanciful thing that, at full term, will produce absolutely nothing, at all.
    Live Long And Prosper.

  40. paddlemeowncanoo

    Can someone tell me what exactly happens at end of September when the bank guarantee runs out ? should I transfer all my money into Rabo (guaranteed by the Dutch govt I think) or what ?

    • coldblow

      I get the impression that it’s not entirely clear what will happen. Indeed I saw it argued several monthas ago that to avail of the full deposit guarantee here you’d have needed to open your account after some date in late 08 or whatever. I’m not sure if that’s true or not. I haven’t asked my bank as I doubt they know themselves, factual accuracy not being their strongest point.

      I opened a Rabo account. At the time I think they said they were covered by a 100k Dutch guarantee (per person), but I couldn’t find this assurance when I looked on their website just now. Maybe they’ve quietly dropped it. Even if not, who’s to say they won’t just quietly drop it in a week or a month’s time? You are covered by the Irish guarantee.

      If you want to open an account with Rabo you need to have various proofs of ID and residency, including original utility bills within the last 2 months I think. They are very stric on this and I nearly told them to take a jump when they refused to accept photocopied bills from one utility going back over a long recent period. They said their hands are tied by strict regulations enforeced by the………. Financial Regulator. (The irony being that it was due to same Regulator that I was opening the account in the first place.)

      I presume you need similar documentation to open an account in another country. Obviously if you are well-connected the above need not apply to you.

      I don’t know what the effect of default would be on your savings. When you think of it debt is mirrored by somebody’s savings (or rather deposits) and if it is defaulted on savings somewhere will be affected. Ask yourself, when the chips are down whose savings are going to be given priority as regards protection, yours or, erm, Other Interests? My own savings are not in the main savings as such in that they are our unearned capital gains on the crazy roulette table that was the Irish economy precipitated by having to sell our house a year and a half ago. David’s talk above about a levy on savings is actually more reassuring than anything else as my own hunch is them going up in smoke before we get a new place sorted out. Che sera sera and all that.

  41. Philip

    Cheer up everyone. Take the Motorway to Galway from Dublin. 1hr 40mins or the maybe you want to run down to Cork – 2hrs 45mins or a run up to Newry – about an hour? Drive from southside of Dublin to the Airport…25mins? The Mad Cow roundabout is a magic intersection. Things are moving smoothly and quickly. Wider roads, fewer cars, even fewer trucks, Sunny and windy at 18-20C…it’s lovely. As for the tolls – 16 Euros round trip to Galway etc etc. Tis only money.

    And all those empty apartment blocks and estates down there in the flood drenched plains will be accessible to more than ever before. We need to start selling this place. Get everyone to come to the land of plenty. The land with natural aircon and freshwater that just keeps coming out of the sky.

    We need about 8 million people on this Island before it starts firing up properly. Let’s pull them in working at anything. Let’s twin our cities and towns with ones in China and India. Let them have big reservations. We are offering quality of life at low wages. We just tax the paddies that feed them. Out 500Bn debt would be wiped out in months.

  42. coldblow


    The attached is the text of an IT article about this from the start of the year. I don’t know if the issues raised in it have been clarified since. Sorry I couldn’t do this as a link.

    “There is a dearth of information and a lack of understanding in the bank sector itself about the new scheme to replace the blanket guarantee, writes CAROLINE MADDEN
    THE GOVERNMENT’S blanket guarantee of Irish bank deposits — introduced in September 2008 to safeguard the banking system — was due to run out on September 29th, 2010. However, late last year it was updated and amended by the new Eligible Liabilities Guarantee (ELG) scheme, with the result that the guarantee has been extended for some deposits, but savers have been left in the dark as to what precisely this means for them.
    The Irish Times has received a significant number of reader queries on the issue, which is not surprising given that the implications of the ELG scheme have not been effectively communicated to the public by either the Government or the banks.
    Not only is there a dearth of information (and what information is available is difficult to find, confusing and in some cases incorrect), but there is a bizarre lack of understanding of the new guarantee landscape within the banking sector itself.
    When asked by The Irish Times about the ELG scheme, some banking sector representatives admitted that they had merely glanced briefly at the terms of the scheme, and had a vague belief that the original blanket guarantee had been extended for all deposits — which is not the case.
    Even more worryingly, the creators and administrators of the scheme — the Department of Finance and the National Treasury Management Agency (NTMA) — still seem to be figuring out how some aspects of the new scheme will work in practice.
    Here we try to shed some light on the situation by examining the various guarantee schemes in place and how they relate to different types of deposits and savings.
    In September 2008, Minister for Finance Brian Lenihan announced that the Government would guarantee all savings held by depositors in the seven Irish banks and building societies: AIB; Bank of Ireland; Anglo Irish Bank; Irish Life Permanent; EBS; Irish Nationwide Building Society; and Postbank. This was known as the Government bank guarantee scheme and September 29th, 2010, was set as its expiry date.
    Separate to this is the Deposit Guarantee Scheme (DGS), which covers all financial institutions (and their subsidiaries) that are authorised by the Irish Financial Services Regulatory Authority to operate in Ireland, which accounts for the majority of high-street institutions.
    Deposits of up to €100,000 per person (per institution) are covered under this scheme, which does not have an end date. A list of institutions covered by the DGS is available on the Financial Regulator’s consumer website (www.itsyourmoney.ie).
    On December 9th, 2009, the Government introduced the ELG scheme, which extends the original bank guarantee scheme for a maximum of five years, but only for certain types of deposits with institutions that join the new scheme.
    A list of participating financial institutions can be found at http://www.ntma.ie/ELGScheme/ParticipatingInstitutionCerts.php.
    To date, AIB, Bank of Ireland (and its subsidiary ICS Building Society) and Irish Life Permanent have joined the scheme.
    According to a spokesman for the NTMA, which is running the scheme, Anglo Irish Bank is due to join this week, while Irish Nationwide and EBS are expected to join within the next week.
    All deposits in An Post are already guaranteed by the Government as it is State-owned, but it is believed that Postbank (the joint venture between An Post and BNP Paribas) does not intend to join the ELG scheme.
    On-demand deposits
    If you have up to €100,000 in an on-demand deposit or current account (ie an account from which you can withdraw your money immediately if you need to), then all of this money is covered by the DGS, assuming that the account is with a participating institution.
    However, if you have more than this amount saved in such an account, say €150,000, then the excess — €50,000 — will only be guaranteed by the Government until September 29th, 2010, as the new ELG scheme does not extend the guarantee for on-demand deposits.
    It is possible that the Minister for Finance could decide to change this some time between now and the end of September, but this is unlikely unless the banking sector destabilises.
    One bank representative pointed out that very few savers would keep such large amounts on deposit anyway as they could earn higher levels of interest by locking it into a term account.
    But any individual who is in this position should consider splitting their savings between a number of institutions so that the amount in each account is below the DGS cut-off point of €100,000, and therefore fully guaranteed.
    Fixed-term deposits
    The main effect of the new ELG scheme for savers is that it extends the guarantee for some fixed-term deposits, ie money that you agree to lock away for a fixed amount of time, for example six months or three years.
    However, savers must tread carefully if they are to qualify for this extended guarantee. Firstly, your term deposit account must be with an institution which is participating in the ELG scheme. Secondly, the deposit must be placed with the institution after it has joined the scheme but before September 29th, 2010.
    Therefore savers must take care to find out the date on which their particular institution joined the scheme, as this varies. For example, AIB joined on January 21st whereas Bank of Ireland was admitted on January 11th.
    If you succeed in ticking these boxes, then your fixed-term deposit (in excess of the €100,000 covered by the DGS) will be fully guaranteed under the ELG scheme for a maximum of five years from the date on which you placed the deposit with the bank.
    The guarantee will last until the deposit matures or September 29th, 2015, whichever is earlier.
    However, you may not meet these conditions. If, for example, you placed a one-year deposit with AIB on January 1st, 2010, it will not be covered by the ELG scheme after September 29th, 2010, as AIB had not joined the scheme when you opened the account.
    But, again, this is really only an issue if the amount deposited exceeds €100,000, as anything up to this level is covered by the DGS.
    Notice accounts
    The question of how notice accounts (where the account holder must give a specified number of days’ notice before withdrawing their money) are to be treated under the new scheme was met with a great deal of headscratching when put to bank spokespeople and indeed the NTMA, even though it is running the scheme.
    Clarification has yet to be provided as to whether the guarantee has been extended for this class of personal bank account.
    At the time of writing the NTMA was in the process of trying to figure this out with the Department of Finance.
    If those in charge do not know how the ELG scheme is to be applied, then one wonders how individual savers are expected to get to grips with the new savings landscape.”

    • Hi Coldblow, pity you don’t have link to CAROLINE MADDEN full article. Bit you have above is misleading insofar as it relates only to deposits. The banks have unfortunately other contingent liabilities guaranteed of a far more worrying kind, such as the €13 bn thereabouts loss on Credit Default Swaps about which there has been nothing in the media, though I, for one, would like to know a lot more about. Did Seanie, facing losses on the loan book, go for a big bet on the CDS bond markets and lose? So you thought Anglo lost only on the property market, no it was a true investment, casino bank. We need a whistle blower to get it all onto paper and beat the inquiry cover ups! Come on, Seanie, there’s a good book in it, Anglo’s Unwritten Story!

  43. Notice how Lenny is wringing his hands of blame for the financial meltdown. In his Ballroom of Romance fairy tale, the DofF slowly leaked power into the Dept of Taoiseach during the time Cowen was in charge of Finance.

    Here’s another reading of the meltdown. Its all about Anglo. From early 2008 warning signals were coming out of Anglo all was not what it seemed.


    “An investigation was launched after it emerged that Anglo had transferred €7.45 billion to IL&P as an interbank loan — but when that money was lodged back to Anglo from IL&P it was treated as customer deposits rather than an interbank loan. The effect boosted the balance sheet of Anglo Irish Bank, potentially misleading investors into believing the bank was more stable than the precarious position it held.”

    There’s a good chance under the Regulator, Neary, the above scam wasn’t implemented once, but a number of times.

    Similarly on the date of the guarantee, http://bit.ly/cM2FRT the possible exposure/liability of the state to Anglo was given at €8 bn, yet its now flagged as €22 bn , with a total cost to the state if Nama tranfers are included of upwards to €50 bn.

    Given the emerging catastrophe scenario of Anglo following the time of the guarantee, Lenihan still persists in calling the Guarantee exposing the state to upwards of €500 bn , the correct decision.

    Sadly, given the growing shambles of NAMA and deteriorating ratings by Moody’s http://bit.ly/ce5dOO , Ireland INC Lenihan/DofF bailout of Ireland is reckoning up to be the worst and most expensive bailout of any country in memory.

    The markets are not reassured by Lenihan’s ‘fools rush in’ blanket guarantee, NAMA and subsequent response to Ireland INC’s banking crisis, in spite of warnings by Merrill Lynch et al. Its clear the blanket guarantee put everyone on Ireland Inc into an economic ferry feted like the Titanic as it set off with Ballroom of Romance celebrations. Few saw the rear cargo door of the ferry was not properly closed and water was beginning to pour below deck.

    It would appear Ireland INC is creating the perfect storm for an
    even more catastrophic double dip recession that will hit as soon as austerity measures hit the fan.

    All of this was not meant to be.

    In the Ballroom of Romance the ugly sisters of Anglo and Nationwide were leading the ball. The notion they could fail flagged by Merrill Lynch et al was bagged and buried throughout 2008.

    When the ball was over, the notion that Anglo could be excluded from the guarantee was stamped out by politico/FF cronies of Lenihan including Lenihan himself. The blanket guarantee bet the country’s taxpayers against the potential losses of Anglo and the Irish banks. NAMA was made ready to fly away into profit on the updraft of recovery fed by the blanket guarantee.

    The roulette wheel was spun. The downgrading of Ireland INC by Moody’s represents the defeat of Lenihan’s policy to save Anglo at any cost to the Irish taxpayer:


    Moody’s downgrades Irish government debt rating
    (AP) — 4 hours ago
    DUBLIN – Moody’s ratings agency on Monday downgraded Irish government bonds by one notch due to a deteriorating economic outlook, a heavy debt burden and liabilities in the banking system.

    Ireland was hit hard by the global financial crisis as a collapse in the property market nearly took down the banking system. It was also among the first European countries to impose painful austerity measures to tackle the outsized public debt load.

    In a statement from its office in Frankfurt, Moody’s s Investors Service said it dropped its rating on the government bonds from Aa1 to Aa2.

    “Today’s downgrade is primarily driven by the Irish government’s gradual but significant loss of financial strength, as reflected by its deteriorating debt affordability,” says Dietmar Hornung, Moody’s lead analyst for Ireland.

    Moody’s noted that government tax collections have fallen has gross domestic product has declined since 2008. The general government debt-to-GDP ratio has risen from 25 percent before the crisis to 64 percent and is still rising, Moody’s said.

    The rating agency said it was also concerned about Ireland’s weaker growth prospects because of the severe downturn in the financial services and property sectors, and a contraction in private sector credit.

    The third factor worrying Moody’s was “the crystallization of contingent liabilities from the banking system, as represented by a series of recapitalization measures” and the need for Ireland to create a National Asset Management Agency (NAMA) to take away bad loans from banks.

    Standard & Poor’s downgraded Irish bonds from AA+ to AA in March last year, while Fitch Ratings cut Ireland from AAA to AA- in two steps last year, according to Barclays Capital.”

    Notice the ‘third factor above’. Its a formal statement the rating agencies are deeply worried at the policy chosen by Lenihan and DoFF, the policy of saving Anglo, the FF croney bank.

    Anglo is a leech on our democratic freedoms, a travesty of justice, a casino bank that should be wound down asap with a proper Garda fraud investigation.

    Should Neary be behind bars for his role in the schenanigans? Instead of which, the Irish taxpayer is being milked for upwards €50 bn squandered on a property roulette monopoly by the FF/Anglo/Nama oligarchy.

    Lenihan has lost the bet and all bets are off as we head towards default.

  44. MK1

    Hi again David,

    I hope you are having a good summer, and the same to all contributors on here.

    DavidMcW> One of the central tenets of tax-raising is that it should be easy – and taxing savings is easy. For the State, finding cash which is hidden is difficult and expensive.

    You mentioned the cash under the mattress. One simple way which brings some equality to the credit-boom-bust is to implement a Wealth Tax which claws back excessive profits made on thos during the boom.

    Lets take that oft-quoted example of the field outside Athlone that was purchased on the back of a loan of 30m.

    Seller S, received 30m from Buyer B, using a 30m loan from Bank A. The ‘asset’ is now valued at 300k! So, Buyer B is bust, Bank A is out of pocket. Meanwhile Government G(ombeen) has got some stamp duty plus capital gains tax which is already now spent. BUT, Seller S still did recieve the money, it is NOT all gone in a puff of smoke. True, they may have spent a lot of it by now, and that what was cycling through the economy (ie: much of the credit was fuel for our economy but, an economy based on credit can never ‘survive’).

    So if Seller S still has wealth, that wealth can be taxed. True, that person may move away from Ireland and their wealth and spend less, but they may have more permanent ties that using Ireland as a ‘hotel’. They may have family, they may actually want to live here. They may actually have to live here. Of course, if we get rid of non-residency tax-avoidance larks, and tax anybody that ‘moves’ and can breath in this country, then we should be able to clawback some of this money through a wealth tax. Set the level according to your social needs!

    Btw, in terms of there being no political party. I agree, choices are few and far between, which is WHY there is a HUGE OPPORTUNITY To form a new party and to get the support by many that are dissaffected by the bumbling incumbents. Rather than try and change the ‘sick parties’, bring in a new party. Like the banks, the parties arer bust of their ideas and management. Bust Parties, new Good Parties.


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