October 18, 2010

Chile's success is just one sign of a shift in economic power

Posted in Articles · 192 comments ·

How did you feel when you saw those Chilean miners being pulled out of that hellhole?

Wasn’t it wonderful to see one of the best news stories of recent times unfold in front of your eyes?

As each miner was released from their underground prison, the unbridled joy of their rescuers was infectious.

Rightly, this story has had blanket media coverage with 24hour TV coverage and many millions of column inches of comment.

Chatting to friends, I was taken aback by a casual comment I heard, to the effect of: ‘‘Wasn’t it amazing that a South American country had the resources, skill and wherewithal to mount such a rescue?”.

My friend was just reinforcing our Eurocentric view of the world, where Europeans and North Americans are developed and the rest of the world is in some way backward – or, to use the expression mostly reserved for South American countries, ‘‘basket cases’’.

This view is so outdated as to be dangerous. In reality, it is we who are falling behind.

For Ireland – as we grapple and bitch about the way out – the lesson from the rest of the world is that they are marching ahead.

No one is waiting for the Irish to sort out their house.

They are moving and it is we who will be forced to catch up, not them.

Another story that came out of Chile on Thursday is revealing.

Amid the national euphoria, the Chilean central bank raised the key overnight borrowing rate by 0.25 per cent to 2.75 per cent. In fact, the Chilean central bank has been raising the rate steadily since June, when it was at 0.5 per cent.

This is because the recovery in the Chilean economy has led to inflation worries.

But the point is that the economy is expanding again.

As usual with central banks, the bank statement on Thursday that accompanied the interest rate decision gives a hint of the risk factors they see on the horizon. Their biggest worry is us – the developed world.

This is what the Chileans had to say about us: ‘‘A slower-than-expected recovery in developed countries is an important risk factor in emerging economies.”

Click to view larger chart.

It is fairly obvious why a resource-rich South American economy would see the developed world’s sluggish recovery as a risk, but a chart published by the FTAlphaville blog earlier this month shows that there might be something more fundamental happening to the global economy.

For the first time since the 1870s,when thousands of Irish people left Ireland for Argentina and Chile, the contribution to global GDP of the G12 emerging economies (China, India, South Korea, Indonesia, Saudi Arabia, Russia, Turkey, Mexico, Brazil, Argentina, South Africa and Australia) has surpassed the contribution of the G7 (US, Canada, Germany, Italy, France, Britain and Japan).

It could be argued that the global crisis has passed emerging markets by, and they have had to do little themselves as the developed world fell below them. But this would be a huge over-simplification of the issue.

The chart shows that, yes, the G7 share of global GDP has fallen in recent years. But there has also been massive growth in the G12, as global growth has shifted from the developed world to the developing world.

While Chile is not in the G12, it is a great example of what an emerging market economy can do if it gets its economic policy right.

Chile seems to be getting a lot right at the moment.

In fact, one of the starkest observations is just how virtuous economic policy and behaviour have been within the developing world in recent years.

In contrast, the developed world economies – particularly the US, Britain and Ireland – have behaved like financial delinquents.

We are the ones who have comported ourselves like adolescents, borrowing other people’s money and blowing it. In the meantime, the developing world has saved, invested and done all the ‘‘right things’’.

If you have time to keep up with global economic developments, you may have heard of Andrés Velasco, the economist appointed as finance minister of Chile (imagine that, a Minister of Finance that actually knows something about economics).

He decided in 2006,when the price of Chile’s main export (copper) reached record levels, to save the surplus from the boom, rather than add it to current spending.

This was not an easy decision to stick to, as he came under intense political pressure to spend the extra money.

Had Velasco taken the McCreevy ‘‘if I have it, I’ll spend it’’ approach to economics, Chile wouldn’t be in the position it is today.

Politically, he prevailed.

In the first nine months of his office, he creamed $9.6 billion off the top of the copper price – 5 per cent of GDP – and squirrelled it away. Last year, that copper-based contingency fund amounted to 30 per cent of GDP.

It helps that the government owns the biggest mine in the country – the mine which mounted last week’s rescue operation. When the economic crisis hit, the war chest meant that Velasco could then spend the money in the economy to cushion the blow, thus preventing Chile from falling into recession.

And what did he spend the money on?

Velasco has won praise from Unicef for continuing to increase investment in early intervention in children’s education all the way through the global recession – he could do this because he had the good sense to save in the good times for the rainy day.

It would be easy to contrast the performance of the authorities in Chile with the authorities here, but that is not the point of this article.

What Chile is doing very well, and what policymakers in the developed world are failing to do, is to manage its economy.

Chile is flexible; its policies are set to meet the current needs of the economy, even if they are sometimes unpopular; and it is willing to move quickly as the need arises.

It may be that the global economy has reached an inflection point, where the countries that have driven growth for the last century will continue to fade.

For billions, this will be a great liberation. It is our challenge.

Are we up for it? If not, could our children again emigrate to South America, as they did 120 years ago? Stranger things have happened.

  1. Gege Le Beau

    Always more to it when you care to look beyond the ‘numbers’…..

    “The accident that trapped the miners is not unusual in Chile and the inevitable consequence of a ruthless economic system that has barely changed since the dictatorship of General Augusto Pinochet. Copper is Chile’s gold, and the frequency of mining disasters keeps pace with prices and profits. There are, on average, 39 fatal accidents every year in Chile’s privatised mines. The San Jose mine, where the men work, became so unsafe in 2007 it had to be closed — but not for long. On 30 July last, a labour department report warned again of “serious safety deficiencies ”, but the minister took no action. Six days later, the men were entombed.”

    Chile’s Lesser Told Story: The Mapuche Hunger Strike

    Major questions to be asked about the enforcement of health and safety legislation and lack of government intervention. Equally, the role of the company involved (now being sued by 29 of the families, 1.8 million has in profit has also been reportedly frozen by the State and may form some compensation for the miners involved) has to be examined.

    The President of Chile is a billionaire, made his money according to John Pilger after Pinochet exited the scene and the ‘Chicago boys’ arrived urging privatisation and the full implementation of economic policies which drove poverty through the roof (Naomi Klein’s Shock Doctrine outlines this in devastating detail).

    The income inequalities in Latin America are beyond belief, a small, European in origin, elite control the game totally, and indigenous people suffer exclusion and discrimination at every turn, it is not pretty.

  2. adamabyss


  3. A lot will depend on whether the USA can rid itself of the purges of deregulation which led to its FIRE economy and reinvent itself to serve better its innovative, creative and resilient population.

    If the west follows the route of Ireland Inc, we’re kaput. Huge concern would be the whole question of human rights, democracy in emerging economies.


    US now known as North MExico:)

  4. Deco

    Yes, countries in what we call the Third World are reforming themselves, getting their act together, and they mean business. Our cliques are behaving like the elites of the Third world used to behave previously. They are preventing reform, they are tying the citizens to their gambling losses, and they are preventing younger more agile competitors from taking it away from them. We even have a disgraced big shot hiding out in Switzerland. And he used to work in the tax system. And he is pals with many very prominent tax dodgers. That is the clearest sign that you are a banana Republic.

    { (imagine that, a Minister of Finance that actually knows something about economics). }

    Actually, I am trying hard to imagine it, but I can’t. Because we haven’t had one in decades. I think Martin O’Donoghue was the last time an economist became Minister for Finance – and he got shafted because he disagreed with Haughey. He then plotted with FG against the Proud Squire of Kinsealy, while staying inside FF.

    The current clowns are like a bunch of know-it-all brand name clad teenagers telling us what geniuses they are. They are loud, and forceful, but everybody knows that it a charade.

    We still are not serious about this crisis. Cowen might have no clue about the economy, but as Pat Leahy pointed out, he sure knows when the GP are getting ready to pull a PR stunt.

    We have a leadership problem. We have the type of leadership that promises something for nothing, that arranges pointless vanity projects in the name of “vision”, that buys votes, and spoofs endlessly – the type of leadership which the Third world is moving away from.

  5. Deco

    A measure of the ability of the state to manage the economy, can be seen in the countless interventions over the past decade, where as a result of lobbying by various groups and interests, the state “got involved”.

    The costs always went into overrun territory. The specifications were always unrealistic. The design was “bold and adventurous” (read expensive and an eyesore). The contract went to the well connected.

    It could apply to anything. The awarding of mobile phone licences. The National Conference Centre. The Binge Syringe. Croke Park. The Bertie Bowl, Adamstown Farce. The replacement for Landsdowne road (can we call that the “PAYE Stadium” after it’s main sponsor). The Port Tunnel. The Luas. The M50 bits and peices. The FAS ‘training institute’ in a bog in Offaly. NAMA. Anglo. Nepoto(INBS). etc…

    Other countries with a more rudimentary, and directly obvious approach to the application of resources are moving forward. Ireland with it’s centralized, convulated, expensive, cronyism-riddled, everybody on the take, silly process of “big” planning is going into reverse.

  6. wills


    Before I go on its interesting to note that the *drill bit* used in rescue innovated in Limerick http://www.limerickpost.ie/index.php/navigation-mainmenu-30/local-news/2212-shannon-expertise-helps-save-chilean-miners.html

    The *emerging economies* and the developed economies are they working for each other across the spectrum of trade in a symbiotic way.

    One can only but conclude that they are not.

    The controlling interests of all countries converge at BASEL and a financial hegemony. And the allocation of wealth produced from countries rich in resources flows upwards into the insiders bank accounts, whether they hold an emerging economy passport or not.

    The peasents and serfdom class of emerging economies remain in a type of bondage which hides the tyranny they live under.

    South American countries in the final analysis their economies slave under a rigged market place on the global scene which is dominated and controlled by Imperial power with its roots going back into the midsts of time.

    But, you already know this!

  7. In Context: INEQUALITY

    Concertación, a center-left party coalition governed Chile since 1990 until March 2010 , leaving behind the area of Pinochet’s dictatorship that lasted from 1973-1990. In March Billionaire businessman and technocrat Sebastián Piñera took over

    While Chile is hailed as a economic success story, it has to be highlighted that income distribution shows rather high inequalities.

    Bolivia has the highest inequality in the region, followed by Haiti, Brazil, Ecuador, and Chile, which is tied in fifth place with Colombia, Guatemala, Honduras, Panama and Paraguay.

    So I would like to add something to David’s article from a different angle. – My personal perspective is that the entire system is inherently flawed, hence any copy and paste job implements the very same systemic errors on foreign soils. This is deliberate, and is how the system is kept alive. –

    In Chile’s 17 million population, 39% of national income goes to 10% or people. If you look at the other end of the spectrum, the poorest 10% receive about 1.5% of national income.

    Of course, income inequality is only one aspect, others such as education, health care, culture and ethnic and gender inequalities do matter in that context.

    Take education for example, on average, Chilean families contribute 83.9 percent of the cost of their children’s higher education, with the state paying for the rest. The proportion paid by parents is the highest among the 36 countries studied. In Finland, families contribute only 4.5 percent of the cost of tertiary education.

    Chile’s society is fragmented by inequality and as such is doomed to continue spending significant amounts on police force and gated communities.

    It is striking to see what Chile and Ireland have in common in two areas.

    1. Low Income sectors have next to zero bargaining power
    2. The people became depoliticized

    Precisely these factor s legitimize status quo and prevent structural change.

    Chile as well as ireland are elitist driven societies.

    In contrast to Ireland however, in Chile this dimension is being addressed by the campaign ‘Bicentennial Citizenship: Creating More Democracy’ which was kick started this September by ACCIÓN.

    Inequality is a hydra with many faces, but certainly structure of work is the main force that promotes severe inequalities in societies, legitimizing elitist power and policies.

    The trend in our society is calling for a second labour market, a slave labour market where the unemployed will work for a token, to receive state assistance because work is not there. Of course, this concept has no roots in Irish genius, but is nothing but a cheap copy and paste of German 1-Euro Jobs and Hartz 4 policies, creating such slave labour markets since years. Once people are trapped in this, most of them will never again make it to the first labour market.

    Chile’s society shows another phenomenon that I would compare with Ireland’s situation, the society is imploding as anger is turned inwards, the outcome is impossible to predict, as fragmented and depoliticized their citizens are.

    In July 2010, The catholic bishops conference proposed all crimes against humanity, inflicted by the Pinochet regime from 1973-1990 to be pardoned for prisoners over 70, women inmates with dependent children, and prisoners who are terminally ill, as long as they have shown good behavior.

    During Pinochet’s terror regime, approx 30,000 people were tortured. 65 people of the regime are imprisoned in circumstances that offer special privileges.

    The former head of the Joint Command, retired general Enrique Ruiz Bunge, faced four sentences for murder, but has been released, and retired general Sergio Arellano Stark, sentenced for leading the ‘caravan of death’ — a special army mission that summarily executed leftist political leaders arrested around the country after the 1973 coup is at home, being cared for by his son.

    Unsurprisingly, victims disproportionately bear the cost of reconciliation. Equally unsurprising is that Piñera is amongst the richest people in Chile.

    While the mainstream media showed the rescue operations of miners, what has been kept entirely off the radar, was the hunger strike of indigenous Mapuche people, demonstrating against new laws that allow the regime to treat them as terrorist, laws that Piñera will rectify.

    Chile was americas laboratory for free market policies under Pinochet.

    Harvard economist Ricardo Hausmann: “Chile is like California without Silicon Valley and without Hollywood The reason for that he see’s in the limitations of Chile’s business class, which tends to be a closed, conservative circle.

    • Gege Le Beau

      @ Georg – Excellent post. Context is everything.

      Without doubt the best documentary I have seen in years, which highlights the situation in Latin America, including a poor young couple in a Chilean slum complete with new born infant juxtaposed against the polished streets of the financial district of Chile’s capital, Santiago.

      John Pilger’s ‘War on Democracy’

      When talking numbers, and that is all they are, just numbers, economists have to factor in the externalities.

      13th October 08 – Interview with Noam Chomsky by Simone Bruno, Znet

      Bruno: I would like to talk about the current crisis. How is it that so many people could see it coming, but the people in charge of governments and economies didn’t, or didn’t prepare?

      Chomsky: The basis for the crisis is predictable and it was in fact predicted. It is built into financial liberalization that there will be frequent and deep crises. In fact, since financial liberalization was instituted about thirty five years ago, there has been a trend of increasing regularity of crises and deeper crises, and the reasons are intrinsic and understood.

      They have to do fundamentally with well understood inefficiencies of markets. So, for example, if you and I make a transaction, say you sell me a car, we may make a good bargain for ourselves, but we don’t take into account the effect on others. If I buy a car from you it increases the use of gas, it increases pollution, it increases congestion, and so on. But we don’t count those effects. These are what are called by economists externalities, and are not counted into market calculations.

      These externalities can be quite huge.


    • @ David,

      If you have time to keep up with global economic developments, you may have heard of Andrés Velasco, the economist appointed as finance minister of Chile (imagine that, a Minister of Finance that actually knows something about economics).

      Velasco is no longer Finance Minister:


  8. P.S. …desperately wishing for an EDIT function of posts!

  9. The Message from the Miners to the world is that THEY got themselves out of the Hole .

    We in Ireland have REFUSED to do the same .

    This is a National Tragedy that the world finds very hard to understand .

    We don’t seem to care and unlikely to do so.

  10. Malcolm McClure

    I know South America from tip to toe, so a few words of advice are in order for those who aspire to emigrate there.
    Firstly, the upper echelons in SA are far more sophisticated than 90% of our gombeen ‘leaders’.
    Secondly, don’t go to work there except in some sort of professional capacity, they already have an abundance of good tradesmen.
    Thirdly, don’t expect many people to speak English. Those who do will prefer to practice their skills on you rather than allow you to practice your language skills on them.
    Fourthly, life is precious and hazards many.
    Fifthly, the women are beautiful and want trophy husbands, but don’t expect ever to persuade them to live in Ireland.
    Sixthly, Good luck to those who give it a go. It will be an enthralling experience.

    • +1

      Nazi’s preferred country of emigration was Chile! Chile has a long history of racial discrimination, and it continues to do so with the approx. 1 million strong Mapuche people residing in the Araucanía region.

      Their current struggle to reclaim their land is answered with terrorist laws being out in place.

      Hanna Garth/Princeton University:

      The Impact of Globalization on the Public Health Crisis among the Mapuche People of Southern Chile
      With the gravest levels of poverty and the highest levels of infant mortality, the eighth region of Chile, specifically the sector Makewe, was studied to observe how the social changes of globalization and the loss of the Mapuche identity has affected the public health crisis of the region. Chile’s first intercultural hospital, Hospital Makewe allows the Mapuche to access both traditional ethnomedicine and basic western medicine. The objective of the study was to analyze how the social impact of globalization has played a role in the public health crisis of the region and analyze the usage of ethnomedicine versus western medicine.
      Methods: Over 30 interviews were conducted at Hospital Makewe, subjects included all employees, patients as well as a few neighboring residents. Participant observation was used both in the hospital setting and in two different homes. During the duration of the study I did stay in the homes of several different Mapuche families. Secondary resources were used as well, many of which were provided by “El Programa de Salud Mapuche (PROMAP)”.
      Results: With the sudden increase of forestation in the area, as well as the use of agrochemicals a number of public health problems have arisen. Problems with soil fertility and the leeching of agro chemicals rendering the water non-potable have increase poverty in the region. The increase in poverty as well as low soil quality has led to many nutritional changes which manifest as “western” illnesses. As the illnesses shift from being of Mapuche origin to western origin there has been a shift in the preferred manner of treatment and more western medicine is used. Conclusions: Because the Mapuche no longer own/control their land, and cannot afford to survive without subsistence farming there has been a great increase in poverty and social problems. If the Mapuche people were to reclaim both their land and their cultural identity, it would reduce the amount of social problems in the sector, in turn alleviating some of the public health problems of Makewe.

  11. As young man, still living in Germany, I was a member in this organization, which still continues their good work to highlight important issues around the globe here:


  12. Economics and human rights should go together, some info here:

    The chapter of the Compass Education Platform on legal protection of Human Rights


    Basic information on the European Union and Human Rights


    4. The history of human rights in Europe
    In addition, you should be aware of the history of human rights in Europe.

    This brief essay offers an excellent summary:


    In addition, the Council of Europe offers again an excellent overview:


    Above links from EYP(European Youth Parliament) docs, who like to debate issues around the above.

  13. My list of human rights links ‘is awaiting moderation’ Really?

  14. coldblow


    Your use of the recent mine drama to make a basic point about the realities of global economics (as opposed to the unreality of Irish policy) has been waylaid by ideologically-motivated posts, which I’m afraid I have to agree with!

    So I hope you don’t mind me adding to these with a quote from Crotty’s Ireland in Crisis (c1986). In an appendix he gives very brief descriptions of the typical patterns of agricultural inefficienty found in post-capitalist-colonial countries. (“The manner in which people’s lives are devalued and land is used inefficiently is considered next for different categories of former capitalist colonies.”)

    “The Latin American Case

    “The appropriation of land as property dichotomizes society into landed and landless. The landless can never, by their own efforts, acquire land, as the slaveless could acquire slaves (by conquest); or the capital-less can acquire capital (by saving). The landless have access to land, and therefore to life, on the conditions set by the landed… The logical consequences of dichotomizing society into the landed few and the landless many, in a post-capitalist-colonial setting… can be most clearly observed in Latin America… Control of the military, and therefore power, shifts unpredictably from military clique to military clique. Bolivia is the extreme case of this instability, having experienced 189 such unconstitutional shifts in power during its 160 years of independence.

    “Agricultural investment by latifundistos [large landowners] is discouraged by chronic political instability and the confiscation or destruction of exposed and liquid agricultural assets like cattle, which is probable at every change of rule. With the mass of the people denied access to the land, except on the conditions of the landed, and with the landed unwilling to invest because of chronic political instability, agricultural production lags. Simultaneously, because of the reduction of death rates population grows… Quite typically of Latin America: “By 1900… the condition of the great majority of Mexicans had sunk below what it had been at any time during the colonial period.” [don't know who he is quoting] Political tension and instability are exacerbated. The dichotomy of society and the reduction in death rates, combined, initiate a cycle of undevelopment: of inefficient land use, of low and declining incomes for the expanding mass of population, heightened political tension, less investment and less output. There is a chronic tendency in Latin America for agricultural output to tend towards zero while prices tend towards infinity.

    “… The long run agricultural supply curve tends to be backward sloping… with output tending to decline as prices rise.”

    The next category, as it happens, is “The Indian (Irish) Case” (!) (“Because land is valuable and because, ipso facto, its owners are wealthy, even if they cannot make use of it they have the resources to retain it, either because of inertia or in anticipation of further increases in land values.”)

    Malcolm made a point in a recent post about the absence in Ireland (I think) of an amateur tinkering-in-the-garage engineering culture as once developed in Birmingham, an innovating kind of environment that must be bliss for any boys or teenagers lucky to get involved in it. This surely thrives only under certain favourable social, political and economic environments (ie as found in the G7) and, just as the brief Irish Economic Miracle appears to have been unmasked I wonder also if the increased prosperity in the post-colonial contingent among the emerging economies will also be shown to be a false dawn. I just can’t imagine how an unstable, macho, corrupt, unjust, and politically and economically polarized society can successfully organize itself for sustainable broad-based wealth creation. I mean, how bad do things have to get here for people to consider emigrating to S. America? I hope I’m wrong (and not slandering Chile) and you’re right here. We all know that a balance has to be found between theory and practice, between analysis and action.

  15. @coldblow,

    Re your comment: “Malcolm made a point in a recent post about the absence in Ireland (I think) of an amateur tinkering-in-the-garage engineering culture as once developed in Birmingham, an innovating kind of environment that must be bliss for any boys or teenagers lucky to get involved in it. This surely thrives only under certain favourable social, political and economic environments…”

    Hold on there, we’ve moved way beyond the tinkering
    movement and now produce graduates of outstanding engineering talent who’ve got scientific qualifications to phd level and beyond.

    Taxpayers money has been spent in educating them.

    This talent is being forced to leave while gombeens rule!

  16. Gege Le Beau

    Just reposting this, think it of interest and relevanc….

    “Got to give it to Iceland, for a small country they are showing some leadership

    Iceland’s government will this week present a bill allowing debtors to walk away from obligations that exceed asset values and to nullify personal bankruptcies after four years, Internal Affairs Minister Ogmundur Jonasson said.”


  17. Deco

    One of the key differences between the development of the United States/Canada and the rest of the Americas in the 19th century was based on control of the resource base. In particular in the Northern states of the US, there was a more egalitarean feel to society, as there were few large landowners. Instead there were many small farmers and many farms, with most existing at subsistence level. This resulted in a push towards industrial development, and being able to afford to educate their children and generate a more equal society. The concept of American Liberty, is the defining difference. In the northern US, the spirit of self reliance, rather than master and slave, simply created a more robust and productive society. Perhaps it might have been the first post feudal society. This was transferred to the developing cities, and also the education system.

    South America, in comparison was more feudal in it’s distribution of resources and income. Educating farmers in the US, had the result of a surge of engineering and ingenuity, which acclerated America’s progress. In the 1800s, Education in the US was taken very seriously, much more so than today. It was everybody’s duty to become educated, to improve their lot and to work hard. Latin American in comparison was less dynamic, more feudal, and remained comparatively de-industrialized.

    At the only point when resources were being concentrated in the hands of a small oligargy, US General Sherman, devised the Anti-Trust Legislation, with the explicit purpose of opening up competition and preventing the population from being scelped. In effect, there was an emphasis given to enabling competition which influenced policies in a manner that was absent in South and Central America. Sherman, with the same zeal as demonstrated during the Civil War, went on a moral crusade to prevent the North becomming hostage to a wealthy clique, as had happened previously to the Southern States. This was moderately successful, though he was probably never forgiven.

    Unfortunately, the involvement of the CIA in Latin America, seems to have a resulted in a perverse kick back from Latin American oligargy, with unworkable ideas on societal formation flowing the wrong way back, into the US in the second half of the 20th Century. In effect, the US has lost it’s way from it’s early spirit of dynamic freedom, and openness.

    In comparison, it would seem that Chile is going away from it’s mediocre past towards the future that was once that defined as the best way for the US, but which is now neglected.

    • Gege Le Beau

      You forgot to mention to two critical factors in US development.

      1) use of violence – annihilation of native americans, seizure of land and resource coupled with annhilation of those in its colonies i.e. in Cuba, Puerto Rico, Guam and most noticeably in the Philippines where up to 200,000 were slaughtered in a bloody war of subjugation (at the end of the 19th and beginning of the 20th century) where Presidents and Generals alike expressed racist intent, and executed policies to match. Cuba (from 1899 onwards)was turnd into a virtual colony of the US where enormous landholdings were bought up by US companies with workers toiling under slave like conditions, this remained the case right down to the Revolution.

      A similar pattern pertained across Latin America, where the Spanish, Portugese, French and British carved the continent up, slaughtered millions (indigenous population fell from around 70 million to 3 according to Eduardo Galeano, the foremost writer on Latin American affairs), instituted the slave trade to make up for the indigenous falling like flies.

      The policy of Manifest Destiny (American belief that the United States (often in the ethnically specific form of the “Anglo-Saxon race”) was destined to expand across the North American continent,) became the Roosevelt Corollary (the Western hemisphere was a US sphere of influence which no Europeans should tamper with), this is how the contemptuously term the ‘US backyard’ originated.

      The slow retreat of the Spanish Empire saw its replacement with US dominance, working with local elites, running countries into the ground (explains high concentrations of wealth in each Latin American country). By the way, the Spanish slaughtered where ever they went, the Aztecs had a highly developed society (and violent). The capital of their Empire (where Mexico city is today) boasted 200,000 inhabitants, with water pumped into the floating city from surrounding lakes, they also had knowledge of mathematics, architecture and astronomy. The Incas similarly had a developed a sophisticated societal system.

      The second important factor is:

      2) US economic protectionism, which enabled US industries and manufacturing to flourish (something Britain also engaged in along with running down highly developed and industrialised countries like Egypt and India).

      A lot of this is detailed in the book Year 501: The Conquest Continues and in Galeano’s ‘Open Veins of Latin America: Five Centuries of the Pillage of a Continent, a book incidentally President Chavez gave President Obama.

      Of all the countries in the Western Hemisphere, Haiti is an exceptional case study, it tells you all you need to know about how that entire continent was run down by Western countries.

  18. “This view is so outdated as to be dangerous. In reality, it is we who are falling behind”

    While we are preoccupied with Irish corruption and the mechanics of the money system the rest of the world is moving on. Ireland is irrelevant.

    “In fact, one of the starkest observations is just how virtuous economic policy and behaviour have been within the developing world in recent years”

    Many South American govenments are adopting socialist ideas and attempting to gear economic policies towards the needs of society rather than blood sucking capitalists

    “In fact, one of the starkest observations is just how virtuous economic policy and behaviour have been within the developing world in recent years”

    Chile are also leading the world in the field of Human Development


    One in 7 Americans on or below the poverty line.
    Homeless in NYC is approaching 1930s levels.
    The developed world is undergoing a financial coup designed to destroy the middle classes and turn them into wage slaves. Meanwhile Irish people are talking about whether biffo or the strawberry haired prince from the west is the more media friendly political stooge. As if it matters a damn.

  19. Afternoon,

    I should have realized that an article about Latin America would cause controversy. As an aside a few years ago in The Pope’s Children I wondered aloud why we Irish – maybe more than most others – have a fascination with South American politics and why most discussions on Latin America get ideological very quickly. I should have re-read that chapter before writing this piece. The point of today’s article to is illustrate the falling importance of the old world and the rise of emerging markets.

    This trend is not going away and their capital balance is in such better shape than ours, it will only be a matter of time before their savings are used in their own countries, giving them a bounce which is catapult them further.

    All the best David

    • There is nothing wrong with your article as far as I am concerned David.

      However, I felt it is equally important to highlight socio political realities in context and beyond pure economic views as well.

      My personal opinion is that the entire system of markets is inherently flawed, designed to be unjust and to promote inequalities around the globe, rigged on purpose and as a result serves only a minority of people who drive the system itself.

      The trend you describe is very true in my opinion.

      The wars and coups that were driven by US interests in Latin America are well known. I guess it is fair to say that the current administration in Chile brings a smile to vested american interests.

    • Gege Le Beau

      I think my posts at least seek to broaden the issue beyond the numbers which so often disguise the reality of Chilean life and give no hint of the country’s troubled history. We need social economics and to be fair to you David, your recent articles have cogently highlighted the impact of the recession on the Irish people.

      We have a passion for Latin America because Irish people generally dislike the injustices of colonialism and post-colonialism, there is a common historical experience, just look at the actions of the St. Patricks Battlion in Mexico or of General Daniel Florence O’Leary in Venezuela to name but a few.

      • Not sure if your post above on ‘use of violence’ vis a vis the US broadens the issues. It rather has a narrowed down view of the US which simply misrepresents the US.

        I have to say I go along with Deco’s analysis above where he writes of the growth of American egalitarianism associated with the free availability of land to homesteaders who came from oppressed and impoverished Europe and were given a real chance of liberty, fraternity and equality.


        There are subtle tensions acknowledged in the development of egalitarianism and concepts of equality in the US in above link well worth a read.

        Rich and poor from different ethnic backgrounds and cultures across Europe came to America and found a freedom that allowed them to prosper.

        South America, conquered by European colonialism, those countries transported ethnic, religious and cultural differences from their home countries duplicating locally inequalities and class differences they’d imported from Europe.

        There was a much broader, social and cultural mix and opportunity and ideas awaiting the people who migrated to the US from its foundation up to its Revolution and post Revolution.

        • Ravished By The Sheer Implausibility Of That Last Statement

          Sounds like you’re a true believer in manifest destiny

        • Gege Le Beau

          @ cbweb

          Can’t see how my comment misrepresented the US, everything I mentioned is in the documentary record and has been written about by leading scholars, the use of force/violence was of huge important in US imperial expansion, it could not have been done without it, just like it is used today in violation of international law.

          Plus land wasn’t ‘freely’ available, that is an imperial prespective, the land belonged to Native Americans, who were slaughtered in genocidal campaigns, focus on just one, US escapades in Florida, that slaughter alone was a template for future actions.

          One of the reasons why the US cavalary and Custer were hated so much was because one of their principle strategies was to go after Indian and women first as a means of getting the men to surrender, thankfully Custers appalling acts caught up with him at the Little Big Horn where he bit off more than he could chew. I need not mention the ‘march of tears’ where thousands of Sioux lost their lives on a forced march, the consequences of living on reservations (displacement) are very evident today, with North American Indians suffering unemployment, substance abuse etc a historical wrong that has not been apologise for nor corrected.

          To the credit of the North American Indians, one tribe, the Choctaw, heard of Irish suffering and sent corn and money to Ireland, President Robinson later thanked them for their generosity of spirit, we would do well to remember that next time we talk of ‘freely available land’.

          Mary Robinson’s address to the Choctaw people

    • wills


      The rise of emerging markets is an interesting angle.

      But, can it be safely concluded the wealth produced by renewed buoyancy is finding its way to the general worker equitably?

    • Deco

      I think there is still a part of us which feels helpless and loves feeling sorry for ourselves, even when we can do something about it.

      South American politics is a disaster zone. The biggest curse to hit Latin America was not the Spanish, or even the Portuguese. It was the fact that these South American countries became free about the same time as Bonaparte was Absolute ruler of much of Western Europe. There were no military dictators up to then, and the Habsburg regime was not particularly centralist compared to regimes of the same period.

      What actually happened was the various colonels who led countries to freedom, emulated Napoleon Bonaparte rather than Jefferson or the Congress of 13 States in Philadelphia. The template they created was a disaster.

      For most of the intervening time period, we have seen oscillations between military colonels, and Marxist gang leaders, and back. It has produced little of any good, and caused a great deal of harm. Both sides seem to think economics is about grabbing something off somebody else and arsing around with guns. It has been a complete dissaster.

      Even South American banana republics are reforming their ways. We on the other hand seem to be stuck in reverse, doing everything arse-ways, defending a bunch of gobshites who are usually avoiding tax, and sending their kids to expensive schools so that they will not end up like the rest of us peasants.

      • Gege Le Beau

        Simon Bolivar, aided by Corkman General Daniel Florence O’Leary, battled Spanish colonialism, just like Washington and his gang battled the British during the Revolutionary war. Bolivar had the idea of a democratic federation of States in Latin America, but it did not turn out quite how he wanted and yes, there were some ‘democracies’, mainly elites running the show with big brother up North keep an eye on its ‘students’, this was certainly the case from the mid 19th century and accelerated once the US Civil War was over and the brutal conquest of Indian lands was completed.

        There was interference from the North, just look at the case of William Walker who led a mercenary army to Central America from the US with the intent of setting up Enlgish speaking colonies under his rule, his forces were eventually defeated and he was shot by firing squad by the government of Honduras.

        Mexico is probably the most interesting example, it lost half of its land mass during the US-Mexican war (1846-1848), US forces got as far as Mexico city where the occupied the famous citadel, an imposing fort overlooking the entire city. The US got New Mexico, California, secured Teaxas and took a huge chunk of Mexican land.

        Today, for the first time in Latin America, there is the real prospect that Bolivars vision of regional integration, a Latin American Union, is finally taking shape, there are greater linakages than ever before, and the region does hold out the prospect, however tenuous given there have been several Western backed coups, that the world may yet been showed another way of socio-economic development, certainly the election of Evo Morales, the first indigenous Bolivian Head of State and the marches in Cochabamba which ended Western companies from privatising the water supply (including efforts to extend their grip to rain water if you can believe it), equally in the Amazon, the fight of native tribes against transnational energy companies is also yiedling success, while in Ecuador the people are seeking $27 billion in damages for alleged pollution by North American companies. All these point point to some terrific developments taking place.

    • Malcolm McClure

      I had a quick riff through The Pope’s Children but apart from a mention of Gabriel Garcia Marquez, I couldn’t find the chapter mentioning South American politics that David refers to above. Anyone know the page number?
      Anyway it was good to revisit some of David’s acute perceptions made in 2005.

  20. BrianMc

    Today’s Schumpeter column in The Economist complements @DavidMcW’s & is also worth a read:

    Some quotes:
    Subheaded “Emerging markets are teeming with young entrepreneurs”

    “..the emerging world will stay young while the rich world ages. In 2020 the median age in India will be 28, compared with 38 in America, 45 in western Europe.”

    “..entrepreneurial energies are moving eastward.”

    “The next Facebook is increasingly likely to be founded in India or Indonesia rather than middle-aged America or doddery old Europe.”



  21. wills


    Emerging markets resources are servicing the developed markets economies and its leading to buoyant economy, good, but, thats the first half.

    To what degree are the riches and spoils of this trade off reaching the general worker.

    No matter how busy and bouyant the emerging market economies are where is the wealth flowing toward the wealth generated, who is at the end of it?

  22. Deco

    For those of you that missed the most important rumour currently doing the rounds on the internet….


    For some commentator by a technical expert attached to prominent insiders, click on the next link and then search for the word “Tiger”.


    I found that fairly descriptive.

    A lot of the leading movers of this clique get detailed analysis in “Who really runs Ireland” by Matt Cooper, and “the Bankers” by Senator Shane Ross.

    You should make it your business to know who is in charge in your country, so that you will know how to not pay for their machinations with your customer. So that you can conscientuously object.

    And you can be certain, that IBEC is their tool to run Ireland. And IBEC is their second tool as it feigns opposition while getting a collection of useless union politicians NED’ships to comply with all of this nonsense.

    • Deco

      Actually, this is the page that you might want to see.

      Is this true ?

      Well, the government will not tell us who the bondholders are….


      Maybe if enough people look at this, and there are companies that want to clear their name, then maybe they might force the government to tell the truth.

      If there is a clampdown, then you can draw you own conclusions concerning whether or not it is true…

      • The list doesn’t quantify exposures, doesn’t say its a list of tier 1 or tier 2 bondholders.

        Comments to the list ask if ECB levered
        on behalf of German bondholders.

        EG Landesbank Baden-Württemberg “LBBW Asset Management”, one of the five largest banking groups in Germany, rated A+ by Standard & Poors. ” are on the list.

        Comments mention once again Suds with Goldman on the list. How compromised do you have to be?

        Curiously Millhouse Capital Abramovich investment vehicle is mentioned but afaik he’s been making sounds about his investment in INBS, not Anglo?

        OT Here’s excellent piece by Jim Stewart http://bit.ly/d0tgbl on IFSC as a tax haven:

        “In spite of these stated high standards, many of the funds that have collapsed in value because of liquidity difficulties are listed on the Irish Stock Exchange. The collapse of the subprime market in turn led to large losses at subsidiaries of two German landesbanks (Sachsen Bank and WestLB) as well as IKB, located in the IFSC. The largest and potentially most serious losses occurred at Depfa Bank, an Irish-registered bank located in the IFSC which became a subsidiary of Hypo Real Estate in 2007. Losses at these banks required large amounts of state aid from the German government. It has been reported to have led to a request from the German government to the Irish Government to assist in the bailout of Depfa Bank.”

      • jandal

        Have sent tweets to the Irish journalists I could find asking why they haven’t yet covered the Anglo Bondholders list – lack of corroboration re the authenticity of the list isn’t an excuse for not reporting such as list – isn’t journalism about getting to the truth…?

        If anyone feels like retweeting any of the list its here >> http://www.twitter.com/tinggg

        • jandal

          @harrymcgee said the Irish Times is going to look into it…seeing is believing – but can we keep the pressure up? RT or contact any journalist and if ou tweet post here and i’ll RT it.

      • Deco

        If you look at the list, you will see many prominent names.

        One name in particular really stands out. You be reminded of it every day in terms of advertising (if you still watch RTE television), and will probably hear it on the radio at least once per day. We are talking about a massive advertising spend. And connected to the organization which has reportedly the biggest PR budget in the country.

        In any case, we are now in a situation, whereby the media has refused to act, because of the importance of pleasing “our advertising sponsors”.

        I expect an attack on the English source of this document. It has to happen. In fact any media organization that can dismiss this peice of paper in any way, will get a lot of advertising revenue.

        The implications, in terms of commercial kick-back are enormous.

        Watch and see. This will educate you as to how the media work in Ireland. Whistle-blowers don’t get rewarded, they get ridiculed.

  23. Deco

    Defining South Korea as an emerging economy is something that is long past the sell-by date. I mean South Korea has passed out many of the so called rich economies, in many metrics.

    South Korea is already in a highly developed state.

  24. Fascism going from strength to strength

    Since I contribute here on David’s site, which is only since April, I am trying to warn on the emerging fascism that is happening throughout Europe.

    It is often marginalized as a Nazi nostalgic extreme phenomenon which would not affect Europe as a whole. This is not correct, people such as Geert Wilders in the Netherlands or the Jobbik party in Hungary explain why this new fascism is going from strength to strength.


    • Ravished By The Sheer Implausibility Of That Last Statement

      I believe you’re reasonable to be concerned about a resurgence of the far right in Europe, but I’m really concerned about the situation in the U.S, as much as I detested many of Bush’s policies some of the G.O.P’s new bedfellows make him seem like a benignly moderate commander in chief.
      Palin for President 2012.

      • There’s a disillusionment with Obama drift to the Tea Party ultra conservatives that should be of real concern in the US.

        Fascism in Europe is of concern but its not helped by the fact the closest semblance to a Hitler Germany with its Prawn District 9 ‘concentration camp’ is present day Israel and its treatment of the poor people of Gaza.

        Arguably Israel is the most fascist state in the so-called developed world today. Have a read of Einstein’s letter to the NYT in 1948. What would he
        have said of the treatment of the Palestinian people of Gaza:


        • Ravished By The Sheer Implausibility Of That Last Statement

          Isreal and the U.S are exempt from international pressure irrespective of their governments behaviour, helps if you have the selfrighteous belief that comes from being chosen by god. US/Isreal; which is the puppet by the way? I imagine every country has its ghettos.

        • Colin

          How can you say Israel is the most fascist state? They allow muslims to worship in the Al Aqsa mosque and many other mosques. They permit the loud call for prayer 5 times a day everyday. Where in history has a muslim conquering force shown the same tolerance for the beliefs of a conquered people?

          Would you not think Saudi Arabia is more fascist? There, you are not free to worship as you wish, or wear what you like, or eat what you like or drink what you like?

          • Ravished By The Sheer Implausibility Of That Last Statement

            Isreal is about to pass a law that will require all new citizens to swear loyalty to a Jewish state, that really seems to be a role model for all secular mordern states. Just because I wouldn’t necessarily like to live in Saudia Arabia doesn’t mean I’m not allowed to percieve Isreal as an apartheid state.

          • Colin

            My 9:17 reply was in response to cbweb’s post, not yours Ravished.

          • Saudi doesn’t have a concentration camp like Gaza they refuse to allow building materials into to build schools and clinics for little children, one of a number of other human rights abuses.

    • Colin

      So what’s your message for the would-be fascists and Geert Wilders voting citizens in Europe? Don’t worry about the mosques, the minarets in the skyline, the call to prayer on megaphones, the burkas, the mutilation of female genetalia, the implementation of sharia law, jihadist cells, halalisation of meat and an attempt to propagate islamic supremacy on the host nation? They’re all lovely people, following a religion of peace which is misunderstood by many of its followers?

      • Ravished By The Sheer Implausibility Of That Last Statement

        I’ll take my chances, I won’t take my chances with islamophobic, fearful racists though. Have you got a problem with decent people of Islamic faith Colin?

        • Colin

          You’ll take your chances? Well, why don’t you emigrate to a muslim country and find out for sure?

          • Ravished By The Sheer Implausibility Of That Last Statement

            What is your problem with Islam?

          • LOL…. I am just leaving at the RIGHT TIME…. otherwise I;d be tempted to comment on that, but we had that before Colin, did we not?

            Best wishes to you too, and I mean it!


          • Ravished By The Sheer Implausibility Of That Last Statement

            Colin you appear to be an ignorant bigot, or at least islamophobic and perhaps even racist in the tone of your argument, I most sincerely hope I’m wrong in this prelimenary assumption.

          • Colin


            All the best, I genuinely hope things work out for you and that your creativity returns and allows you to prosper. We disagree on some things, but I respect your opinions, and never meant any malice in my communication with you.


          • Colin


            No, I’m not a racist. I’ve even had some non-white girlfriends.

            No, I’m not ignorant. In fact I’m very well informed.

            No, I’m not a bigot.

            No, I’m not an islamophobe. I’m not afraid of muslims. I know not all 1,300,000,000 muslims are bad people. But I have a problem with some of those folks who are “misunderstanding” islam, using it to justify terrorism and intent on islamifying non-muslim lands.

            What I am is someone who speaks freely, and will defend free speech for others even though I may disagree with them. That includes you.

            So, are you still injecting heroin and visiting whores?

  25. LdvLon

    More than ten years ago I read an interview to a Chilean economist, in which he talked about a plan to make Chile a developed country in 20 years. In order to do that, they had to grow at 5% every year. I was surprised that they had a plan, and being Latin American, I wished them well, but was rather skeptical.

    Seems like things are going according to plan, and now I read that they have a date: 2018.

    I find the idea of being able to call a country “developed” judging only by the GDP per capita difficult to accept.

    I think an country is developed when a combination of factors are right, the GDP per capita being one of them.

    Rescuing these miners made us all consider Chile to be getting closer to being a developed country.

    Firstly because of the technical difficulties (never attempted before, etc), but also by the sheer cost of the operation, about US$20m. It’s impossible to assign a value to a human life, but Chile has shown the world (and themselves), how much they think these miners were worth. And that’s a sign of development indeed.

    • Ravished By The Sheer Implausibility Of That Last Statement

      They did’t have much choice with the the worlds media watching.
      As for assigning monetary value to a life it depends who you are, essentially it’s arbitrary, though it helps if your a rich white english speaking professional. By the way how many children dying from dehydration due to diarhhea could be saved by $20 million.
      The media coverage and peoples obsession with the mining story makes me very uneasy

      • LdvLon

        The operation started the same day of the accident, when no international media was present, as it wasn’t even widely reported at the time.

  26. ON A PEROSNAL NOTE: I wish I were a little red boat!


    I will be off the grid here for some time, and just wanted to thank all of you and of course David, for a most interesting information exchange!

    The fight against my own Bank, Bank of Ireland, is taking the better of me at the moment and is exhausting me personally on all levels since December 2009.

    I will eventually out myself in public with all the details on purpose to highlight to other people with what methods Banksters are working from my own perspective as a business man!

    After a brief conversation today with my solicitor who saw fit today to answer my calls and emails that I sent him since over 3 weeks and who lectured me on the binding legality of contracts, instead of offering help and advise, I consider myself to be without legal advise from here on.

    Two weeks ago, the bank manager made statements on the phone which dealt with liability. The statements were re assuring, however, having lost all trust in Banks and her in particular, I requested a meeting which I had last week, and at this meeting I asked her to put in writing her statements from the phone conversation.

    To no bigger surprise, she again made a U-turn, now claiming never to have made such statements, however, I witnessed the phone conversation, and with a clear conscience I can call her a Liar from here on.

    Twice now she mislead us on purpose, from the very beginning on, and as a result we ended up with a contract that we believed to be in our interest as we discussed with her and expressed in clear terms, and which would limit certain liabilities.

    So I am going to produce an affidavit, and have to walk the road of complaint procedures open to us, without any hope for justice I might add.

    All this is not only blocking my time, but equally my own business requirement for creativity and positive attitude. If you are or know artists, you will be aware that the creative process can not be triggered on demand, at a certain hour of the day, from 5-9 so to speak, but requires a minimum level of security and peace to be able to allow creativity to flourish. I have lost both now, peace and security.

    Oh, but I did not loose all my humor, in the meeting where she started small talk, and the subject was economy, I told her that German banks lent around 3K per Greek person, 2K per Italian person and asked her how much money she thinks was lent to the Irish people.

    200 Euro per person was the answer.

    When I replied that it was over 42,000 Euro, I deeply regretted that I did not have a hidden camera on me.

    I was asked when I believe the economy would turn around, and I asked her to let me know her thoughts upfront as she would be more the expert on economy compared to me….

    Two years at the very most was her answer….

    Well, another hidden camera snapshot would have had potential to become a best seller when I answered I rather believe that we talk at minimum 1,5 decades….

    I shall leave it at that, and wish you folks all the best!

    Georg R. Baumann

    • P.S.

      The few people I was in contact with privately as well, or anyone who wishes to stay in contact:

      Skype: OceanViewStudio

      • Hi Georg,

        Sorry to hear of your troubles there. Enjoy reading lots of your salty posts, not all:) Away myself in a couple of days for a week or so. Lots of luck! You could be a pillar of salt, but don’t look back or ye might get changed into a pillar of stone like PK or DM above:) Cheer up!

      • Dorothy Jones

        @ Georg: Best of luck – I am sorry to hear your news – I hope that you do not find yourself in a bind. You might want to look at the ‘Hedley Byrne Heller’ case [apologies if not correct, am typing from memory] and recent versions of same in relation to the legal test to establish negligent misstatement. The judgement in 2006 [I think] in relation to information given by an Estate Agent on a premises in Dublin 1 is also of interest. I can give further detail later in the day if you wish.

        • Thank you Colm!

          Thank you so much Dorothy, I really appreciate your thoughts! Skype me anytime you wish.

          • Hey Georg,
            I’d give you a call but I lost the number. Anyway, I’m a bit tied up meself as evident below;
            This sent to the OPW and Cork Co Co on foot of the flooding in the village last November;

            “Many thanks for the prompt response and candid explanation.
            We are indeed aware of our joint and several obligations under statute.
            However we await your consultants response to their identified failure, under public contract, to provide a suitable and sufficient explanation of their quite apparent failings.
            We are minded, with errors and exceptions provided and without prejudice, to put those responsible on notice, that we hold all relevant public and private bodies jointly and severally responsible under all current legislation that in the event of a recurrence of the events of the 19th November 2009, we shall seek recompense for all acts and omissions not dutifully enabled, under breach of duty of care.
            With respect,
            Joe Larkin SIIRSM”

            Cry havoc etc etc. Bring it on. Useless fools.

            Anyway, best of luck with the battle. Give me a shout on 087-144-0080 whenever.

            The one thing David omits to say about Chile or BsAs is that when you leave here on All Souls until St Pats Day,, you’ll never see a Winter again. Casa Verde in Reconquista, BsAs is highly recommended. Ask for Elba, she’s lovely.
            South America has been through the young and corrupt nation bit. They’re moving on. We’re catching up though I can’t see Pinochet posing in a cupboard somehow.
            500,000 Irish of old in Argentina alone and we’re heroes when we make the effort to go there.Great people.
            Au contraire, the craic in Dublin these days would make one gawk.

  27. Watched Frontline this evening, should be renamed Zombie TV. Woeful, appalling.

    Highlight was Dermot Martin telling us the church was not there to promote social justice, that was the role of politics.

    What a damp squid, turncoat zombie, Martin has turned out to be. While Martin dodged questions on his quest for resignations, Kenny and Martin were both plonkers skipping around soporific nonsense that went nowhere slowly.

    In contrast later caught the homage to Mary Robinson, one of Ireland’s greatest, proposed by David.

    Excellent, refreshing program. Camera work excellent. David had the presentation skills, grace, confidence and expertise, ease of a young Cathal O Shannon, John Bowman or Jonathan Dimbleby.

    Congrats to the team that made that one and hopefully there’ll be many more to come from the same gang!

  28. insider

    On the bus (never again) from Arica to Santiago in Chile last year I got to know a local lady (long journey) based in Europe but had come back to Chile to settle an inheritance. She told me when she was growing up people were happy even though they were poor. But now even though people have some money the place is littered with drugs and crime and people are very unhappy, feel very unsafe.

    And this reminds me on Australia TV a few months ago Cathy Kelly was being interviewed on morning TV. Her latest book RE some group of socialites in Ireland back in the day “when people had nothing”. Then she qualified that statement with “materially”. WTF!

    The Chile story is all about copper (resources) and the strong copper price at the moment – why else would the Government send miners down an old (previously mothballed?) mine. When these metal prices are high they extract the hard to get/dangerous stuff. It’s no wonder they got stuck in the first place and rescued by an Australian company (that’s what I heard not sure?). Still they do great chicken.

    Now talking of flexible – China is flexible – they want to build a road and your house is in the way then too bad you’ve got a month to move. India is not flexible as it’s the largest democracy in the world – want to buld a road then it goes through the hoops. Can Ireland be flexible – probably not given the current way of thinking, Government structure and democracy.

    So back to David’s point Ireland is being left behind now. There was a great opportunity to benefit from the boom but instead the Irish wasted wasted wasted. This will never change until we somehow change the psyche of the average person and the incompetency that runs the country.

    I think we should learn from similar sized, geopolitically positioned countries who do things well. Does anyone have any suggestions as to which country’s model would benefit Ireland? Or is the current psyche/leadership quality so tainted that it wouldn’t make any difference.

    • Gege Le Beau

      You answer your own question. To my mind, you have to have the correct people in place, with the proper values, people who do not worship money and who genuinely want to represent the interests of the people, people who truly see themselves as public servants and not people who pay lip service to that ideal. Getting the right people to particpate in politics is a huge challenge as it is a profession which has been run into the ground over decades, few people in their right mind, with the right values get involved, and for good reasons. It is a dirty game.

      People have enough common sense to know what needs to be done, its not rocket science, decisions have to made and well, you just do a quick mental calculation and ask: ‘is this in the interests of the people?’, that has to be the guiding principle. As we have seen, this question wasn’t asked enough not to mind the answer implemented.

    • Malcolm McClure

      Insider asks: “Does anyone have any suggestions as to which country’s model would benefit Ireland? ”

      There has been little discussion here of the extraordinary recovery Canada achieved after the mid-1990s. It was able to advance quickly from a fiscal laughing stock to become the envy of the developed world. Canada achieved this stunning progress in a mere three years by making a series of hard decisions, ignoring the policies of Keynes and Krugman and taking the bitter medicine of cut-backs. (Thanks, David Hay.)

      - Canada reduced government program spending by 8.8% over two years.

      - As part of this radical spending rationalization, federal government employment was reduced by 14%.

      - Federal grants to the provinces were reduced by 14% as well, but the trade-off was that they were allowed to control how the money was spent.

      - While some taxes were raised, spending cuts were 4 ½ times tax hikes.

      - Canada’s welfare system was dramatically modified. Benefits were cut for single, employable individuals and aggressive efforts were made to get them back in the work force.

      - Despite accusations from the far left that the poor would suffer due to these changes, the percentage of welfare recipients fell in just a few short years from 10.7% of the population to 6.8% by 2000. From 1997 to 2007, the percentage of Canadians classified as low-income plunged by over 30%.

      - The tax structure was dramatically redesigned. Corporate tax rates were cut by nearly a third, taxes on corporate capital were abolished, and personal income and capital gains taxes were reduced.

      - The General Services Tax (basically a consumption tax or VAT) was instituted to pay for the tax cuts described above. While initially very unpopular, it was a key part of the rehab plan.

      - The Canada Pension Plan (CPP), the country’s version of Social Security, also underwent major surgery. Instead of payroll taxes gradually rising to 14%, the increases were pulled forward but capped at under 10%. This produced immediate surpluses that were invested in higher-returning corporate securities. The CPP today is well-funded and actuarially sound.

      - As a result of these actions, the federal budget was balanced within three years.

      The main difference from our situation in Ireland is that Canada’s dollar was allowed to decline to bolster its exports, whereas we are stuck with a strong Euro.

      • coldblow

        Blimey Malcolm, you’re consistent, I’ll give you that. Didn’t you express similar views a good while back, alongside mention of Milton Friedman? I think you may even have mentioned Chile?

        • Malcolm McClure

          coldblow: Consistent and pragmatic. First achieve stable national prosperity using stern measures, then let the benefits trickle down through the medium of full employment, as in China.

          Only bleeding hearts and Dev followers think they can reverse the process and build a strong nation up from a foundation of happy peasants dancing at the crossroads.

          • coldblow

            Malcolm, stern measures are unavoidable but the gombeen elements have to be in the first ranks. I can see no case for them to be spared from taxation if others are to take the hit. OT did you see Panorama (?) last night and Osborne’s tax avoidance wheeze using a Cayman Islands trust – worth about £4bn I think and I don’t think he has to register an interest in the House of Commons?

            Canada presumably benefited from favourable world trading conditions at the time. Don’t we already pay high Vat?

            By the way, as you probably know, Dev never said that. According to J Waters (The Intell. Person’s Guide…) I think the crossroads bit may have been added in by his officials. Certainly the dancing is down to popular imagination.

          • Methinks those happy peasants will be dancing on the croissants if that little nyuck in Paris gets his way.
            Anyhow, how in the name of the seven pot-bellied stoves are we going to get from 32% to 3% in 4 years? That’s pure horse since we make virtually nothing to sell and we’re exporting all the brains. The world has gone clean stone mad.

          • insider

            Do you think that Canada is like Ireland? They are resource rich, we are resource poor. They are a huge landmass, we are tiny. They are a federation, we are a bunch of local councils. In common I guess they have the seperatists in Quebec but they want to go the other way to N. Ireland.

            Certainly not questioning the fiscal reform techniques – sounds like Ireland could do with a dose of that medicine.

          • Malcolm McClure

            Insider: of course ireland isn’t like canada fr the reasons you mention. As I pointed out above, the main difference from our situation in Ireland is that Canada’s dollar was allowed to decline to bolster its exports, whereas we are stuck with a strong Euro. This is the key factor in our present bind. As David says in the Indo today, our situation requires an increase, not a decrease in the velocity of money to achieve growth. However his solution, a two year mortgage payment holiday, represents a 10% haircut for the mortgage holders (PV €907 in every €1000 @ 5%)
            This is a mere 1970s style haircut, with sideburns and ‘tache intact.
            We need a Rooney style haircut to eliminate Trinidadian dreadlocks of debt and restore the market’s confidence.

          • insider

            How much more do we need the Euro to drop?

            Jan 09 Euro1 = $AUD2
            Today Euro1 = $AUD1.4

            That’s a fair drop. And it’s floating mid range v the USD (QE city) over the last 5 years.

            It’s relatively strong though against our big trading partner Britain. Granted I can see why that’s a problem.

          • Malcolm McClure

            Insider: Ireland will only partially benefit from a Euro drop, because although its main market if UK the multinationals are here to benefit from its access to Germany France and Benelux. So long as the contiguous northern Europe countries have the same currency as Club Med and Ireland, we are in trouble.

            There is hunnish light at the end of the tunnel though, as Merkel’s comments decrying Grmany’s multicultural responsibilities and the German ambassador’s flip remarks about the Irish made plain. They are going to leave Titanic survivors to sink or swim and dump the Euro.

          • Problem is the exposure of German banks to the PIGS and ‘they want their money back’. We’re an anchor around their necks as well!

    • 20yearsagrowin

      I agree with you. In terms of which country model we should look to? Well, right now we are probably a hybrid of Puerto Rico( without the sun ), Taiwan without the tech skills and Denmark without the stable economy/language skills.

      We probably want to be more of a New Zealand than anything else. Small Island nation on the periphery of a large Economic block. Low unemployment and Lowish cost of living. Small population.

      In my view we can never be a manufacturer of anything long term so we need to push for capital inflow on a consistent basis from other sources

      Grow the food sector 10 fold. China demand is massive. They are buying up farms in africa to plan for the future.

      Maintain and grow the chip and drug industry at sustainable levels. X% of the economy? Not sure what that should be.

      Grow high end services which are high margin to serve Europe and Americas, get your cost base down and invest in Education and Languages. Get Irish and Religion off the menu and invest more in German, Chinese and Spanish.

      How else do we increase wealth of the economy? Well, who has disposable income to spend? Pensioners and Tourists? How can we attract more of them? Get the price of flights, buses and trains down. Incentivise to upgrade B&B facilities and cap daily rates. Make sure services are high standard.

      Think about it. If you can double your tourist to Ireland in a year from 4MM to 8MM or 10MM and get each of them to spend a grand each per year, then you have brought an extra 4 to 6 Billion into the economy. Thats massive when you are a small economy. No imagine you could get 20MM a year to visit the country. Well, if you make it cheap to get here and reasonable in terms of expense to spend a week on food and board, then tourist will spend the monsy on discretionary items.

      If you make it very expensive to get here and then all your money goes on food and board, who the hell would bother coming? Whats the fun in leaving all your hard earned cash to second rate accomodation and third rate food?

      Pensioners…Why not make it attractive for overseas pensioners to retire to Ireland? Germans, English etc etc….again….large disposable income…howcan we make Ireland be seen as a good final destination?

      Please dont give me any clap trap about the weather….a lot of people would consider the irish weather pretty good relative to what they have.

      Anyroad, just some random thoughts….

  29. Full Moon Friday >>>>>> Go Slow

  30. @Colin,

    Just as ‘christianity’ has its intolerant fascist and racist extremists, Islam has its extremists also eg The Mahdi militia who took over Basra, Iraq during the occupation who executed and terrorised the local Moslem population with killings and other terrorist acts. Most religions perform a Darwinian service to mankind bringing order, justice, social cohesion that help people survive in otherwise turbulent circumstances. They should be respected for this. You might be surprised to discover that just as Americans had problems with the secret society of the Ku Klux Klan after the American Civil War, Islamic peoples have suffered the most under the extreme fanatical elements of Islam represented by eg Al Queda in Afghanistan. Often, fanatical brainwashing leads to terrible acts. We saw this here in Ireland with the censoring of literature, banning of contraceptives, the blind eye turned by the state to rampant child abuse. Professor Dawkins in the UK does a good job of highlighting the negative sides of religious belief though he understates its better side such as support for the old, the sick, the infirm and its support of the ‘loving nature’ of the human spirit!

    • Colin


      I don’t remember Methodists flying into buildings, or Anglicans blowing up trains, or Presbyterians blowing up double decker buses or Catholics blowing up foreign embassies.

      The IRA were terrorists who happened to be Catholics- lapsed Catholics at best, as they never committed an atrocity against protestants with the words “In the Name of the Father, the Son, and the Holy Spirit, and blessed St Patrick”, they never quoted the Bible to justify what they did, and they did not attend Mass in the main as they were the ones standing outside the church while the mass was taking place. Now take a look at how Muslim terrorists justify what they do.

      • Oh really, you don’t remember the IRA bombing campaigns in the UK http://bbc.in/SxzHd or last August the story of the north Antrim priest implicated in the Claudy bomb http://bit.ly/95gMCf

        Obviously not all terrorists were standing outside the church as you describe it.

        The truth is religious extremism, sectarianism and bigotry is deeply embedded in Ireland and other countries. Both Catholics and the Orange order frequently use interpretations of the bible to justify differences. Differences are exploited for political ends leading to intolerance, discrimination and civil rights abuses on all sides.

        Often these differences are used as a flag of convenience for gangs ruling communities for profit from drugs and crime.

        Al Queda in Afghanistan arguably are similarly more interested in the proceeds from the heroin drug trade than they are about religion or nationalism.

        You have to look deeper than ‘look at how Muslim terrorists justify what they do’ Islam is as diverse as Christianity, have a look at Caucasian Sufi orders here:


        See any similarities between the Chechen resistance and the catholic resistance movement in NI?

        Combine nationalism or ancient beliefs and religion
        and occasionally you might find an unbelievable story like this:


        “Sister Gertrude Mukangango and Sister Maria Kisito were sentenced to fifteen and twelve years’ imprisonment, respectively, for their roles in turning over to their Hutu killers seven thousand Tutsi who had sought asylum in the nuns’ monastery. In addition to betraying those who had found refuge at the monastery, the sisters willingly provided the gasoline used by Hutu militiamen to burn down a garage in which five hundred Tutsi men, women, and children were hiding. The two women subsequently fled to Belgium, Rwanda’s former colonial ruler, in the hope of escaping prosecution by the Rwandan Patriotic Front (RPF), the Tutsi-led government now in control of the traumatized Central African country. ”

        Of course examples of atrocities carried out in the name of Islam abound as well.

        cheers:) ^ó^

        • I should clarify again there be billions of good Christians and Moslems also, so not everyone should be tarred by the same brush:)

        • Colin


          You’re missing my point. I remember many of those atrocities. The IRA terrorists did not justify what they did by quoting the bible. Of course not all the 1bn+ members of the catholic church are angels, there’s some bad people in it and serving in it. My point is that theologically speaking, the IRA cannot point to a single piece of scripture that justifies what they did. Now, the links you supplied detail how individuals like those priests who brought the sacrament of confession into total disrepute. Fair enough, I’m sure some of those murderers who sought confession were accommodated by certain priests, but the priests were clearly not following the catechism of the church (a dereliction of duty, done in secret), call them renegade priests if you will, so perhaps those “confessions” have been annulled?

          Now, what I’m asking you to do is contrast that with Islamic terrorists. They operate like IRA terrorists did but they justified it through their faith. Where in the koran I hear you ask? Excerpt K 9:005
          Set 33, Count 91; “slay the idolaters wherever you find them…take them captives and besiege them and lie in wait for them in every ambush.”
          163 others in the koran are there. These are not secrets. An immam quoting them and firing up terrorists is literally quoting the word of allah to them. There’s no ambiguity.

          Remember, what’s written in the koran is intended to be taken literally as the word of allah. Most Christians do not take what’s written in the bible as “literally” the word of God. Show me where Jesus tells us to slay our enemies.

          Final point, I did not raise this issue, I never do, but when its raised by someone who’s got an axe to grind with “multiculturalism”, even though its got nothing to do with David’s posts, I’ll challenge it. So, if you want to keep it off these pages, I suggest you and others do not raise it, as I will not and never have instigated a discussion on it.

    • coldblow


      I think ‘fanatical brainwashing’ in relation to Catholic Ireland is pushing it a bit. Some of the aspects of Catholic doctrine hardly amount to ‘terrible acts’. I’m not trying to excuse the Church over child abuse but surely this was all done with the collusion of the state and people? On the wider question of the baleful influence of the Church on the state, which is aired here from time to time, couldn’t an equally strong case be made for the negative influence of the state on the Church, hence the willingness of the latter to support the established order, private property and ‘respectability’ in general? As I said already a few times, I’m becoming increasingly economic-determinist in these matters: start by following the money. Anway, haven’t we experienced other forms of ‘fanatical brainwashing’ in recent years?

      I enjoyed Dawkins’ the selfish gene and mentioned the clever models (eg hawks/doves) to my history A level students when I used to teach in London. They were not impressed on the whole and saw it as a cloak for atheism. Dawkins was not widely known then and certainly not for his views on religion, so they were very perceptive! There was a strong evangelical born-again religious movement in the school (actually 2 schools: boys and girls) and I don’t think they approved of me being RC. Interestingly, it was acknowledged in the staff room that the born agains were the worst offenders when it came to doing their homework.

      While I agree with your points about the socially beneficial aspects of religion, the main point by which religion stands or falls (certainly Christianity) is as a way for a society to relate to the transcendental, if you know what I mean (not so sure I know myself).

      A great book on Islamicism is the Islamists by Ed Hussein (Ed as in Mohammed). His account of his activities on behalf of the political Islamist extremists at college in East London is quite entertaining in places – but it ends in tragedy with (I think) the planned murder of an African Christian student near the campus. Hussein talks about a humanist, mystical strand of Islam called suffism which is thankfully a world away (apparetnly) from the Islamist (who seem to know very little about their own religion). He is very critical of the attitudes in Saudi Arabia and the way pilgrims are treated there.

      I happened to be looking through a book by VS Naipaul, colected essays or something, the other night. He had been visiting Pakistan and it was some anniverary or other of the ruthless conquest by the imperialist Arabs of the ancient kingdom of Sind (s. Pak and Afgh.) in the 12th century or so, for the purposes of stripping the country of wealth and slaves. It brought home to Naipaul how all enveloping Islam was as a culture, and he tells of a recent newspaper article which had discussed the tactics of the local resistance in not entirely negative terms and which was accordingly heavily criticized by the univerity’s historical (no less) society for its lack of historicl rigour in that it had somehow cast albeit the slightest of doubts on the orothodox devout view that the victory of the alien invaders had been anything but an unmixed blessing.

      • Gege Le Beau

        Sadly two peas in a pod, multually supportive relationship (interesting to note that the colonial occupier allowed Maynooth to be built as a means of keeping the Church partially on side).

        Even Diarmuid Martin admitted last night that the Church was too quiet during the boom (horse has bolted), it has also been exceedingly quiet on the use of Shannon and the pillage of natural resources off the Mayo coast (it once served some social purpose). The Church hierarchy seems to do silence pretty well, but has no problem asking for money. You couldn’t make the following up:

        Bishop asks confirmation children to give cathedral cash

        Bishop of Ferns Asks Parishioners to Pay Abuse Bill

        We are witnessing a convergence of failure by the so called institutions of the State, while the emergence of a new Republic is being headed-off at the pass.

        • coldblow

          Hi Gege

          €5 donation to restore fire damage in Longford Cathedral sought from the children’s ‘confirmation money’? One man said he was ‘shocked’. 2 questions: 1. what planet is that man on? 2. why did I never get any confirmation money? My guess is this money is substantial. I’m rather annoyed that I had to fork out €30 for swimming lessons for my son (‘it is part of the school curriculum’) whereas we both consider this a waste of money as we don’t happen to like swimming. Religion, swimming – it’s all much of a muchness really.

          Parishioners asked to contribute to child abuse fund. Is the church as an institution a separate entity from its members? Could we do the same with ‘Ireland Inc’s’ bills? Can we whittle down the identity of the ‘institution’ a la Dan Brown? What would be a suitable number of officials for a satisfying witch hunt? 50? 100? 1,300? Or are we referring to bricks and mortar? You can still see the traces of Cromwell’s New Model Army on the statuary in England’s country churches. The ecclesiatical equivalent of the mysterious bondholders?

          A new Republic. We are all agreed that change is required, but are we anywhere near agreement as to what changes are involved?

  31. Josey

    Time for heads to roll,
    when are we going to get f*&Kin agnry?

    When is the soma going to wear off??

    When are we going to act like real MEN???

    When it’s too feckin late, that’s when!!!!!

  32. MK1

    Hi David,

    I hope things are well with you as we watch the ‘Irish car crash’ in slow motion being played out.

    Interesting about that chart of G7 and G12 as it looks at the ‘old’ and ‘new economy’ groups.

    If you add them both up, they are around 80% of global output in 1820 and about 80% of global output in 2010! And not much of a change really in those intervening periods either. So its more a slicing of the pie really.

    Plus, if factors such as population changes are taken into account, and trade blocks and agreements, discounting wastage on wars of course, and disease, and re-normalizing based on access to readily available resources and commodities (spices back in the day, gold, oil, copper in Chile’s case now, etc), plus then re-normalizing once again based on levels of corruption, how brainpower is used to share and carerfully exploit the bounties of the areas, etc, the levels of wage unfairness and society unfairness, the social aspects of a society (eg: saving homeless people from dying on the streets costs!), etc, etc ……. Does all of the above in fact result in a graph which is more or less flat for G7+G12????

    ie: in other words its just us the People and what we do with things which results in the graphs, which results in what is ‘developed’ or not. The G7 may be in perceived ‘decline’ now BUT is it really ‘decline’ and what is ‘output’ anyway? Should output be ditched as a metric?

    And what is money that is used to measure this output when it is printed like confetti or multiplied in a computer system. Its a fiat system.

    If I have to pay 1,000 dollars for a tonne of copper today, and I print 1,000 dollars to do so, who is better of, the miner, the mining company or me doing sweet fanny adams!

    Maybe Nepal has it right with the happiness index. I wonder though can we even measure our own happiness.

    And some people (like Grumpy Old Men) are only ‘happy’ when they are giving out about something!

    And happiness is relative, if my perfectly liveable house is valued at 500k less than someone elses, am I less happy? If my Car goes from A to B but is not a Veyron, am I sadder? If I didnt know Veyron’s existed.

    As one person replied to me the other week after a meeting, I said “Person A should be doing XYZ, it makes sense surely”. “Yes”, was his reply, “of course it makes sense, he should be doing XYZ, but we are dealing with Humans!”.

    To be Human, is to Err. QED.

    Hence poverty, unnecessary deaths, unfairness, crime, …. WE are to blame, and although we have the IQ to solve it, so far, we have failed ….

    Back to watching the car crash …. Begg says that the pain should be delayed, which in mathematical terms can be put as scenario B below:

    A) -4 + -4 + -4 = -12
    B) -2 + -3 + -4 = -9

    Sorry, David Begg, -12 != -9. Its back to junior infants for you I’m afraid!


  33. Malcolm McClure

    Merkel’s rejection of muticulturalism seems to be a precursor for a resurgence of nationalism in Germany and its possible withdrawal from the European Union.

  34. Anyone else believe not touching corporation tax has become a sacred cow in Ireland?


    “The standard rate of Germany corporate tax in 2010 is 15%. There is a reduced rate for part of a corporation’s income.

    An additional tax has been imposed to help the merger of the two Germanys. This is “solidarity tax” which is 5.5% of the normal rate payable. The tax is levied on corporations and individuals, subject to the conditions specified in the law.
    In 2010 the effective corporate tax rate, including trade tax and solidarity tax is about 30%-33%.”

    Perhaps in our time of dire need we need to copy the example of Germany above and introduce a “solidarity tax” that would set the rate for four years and effectively healthily increase the rate of corporation tax paid by multinationals in Ireland.

    corporation tax 12.5%
    solidarity tax 7.5 %
    total: 20%

    This would still leave us under equivalent rates in Germany.

    Yes, our status as a tax haven would be reduced. On the other hand, we can’t be very attractive to foreign investors given the present state of the economy and the banks.

    So we may not lose out to multinationals currently looking at Ireland as a destination for investment.

    Raising corporation tax would be taken as the contribution of multi nationals to stabilising of our economy, obviously in their interests also.

    Increasing corporation tax flagged as a measure to stabilise the economy should imho be on the agenda.



  35. coldblow

    Just a couple of random thoughts.

    If anyone wants to see a good thriller, then Missing, starring Jack Lemmon, is a fine film and conveys the menace which existed at the time of Pinochet’s coup. When I say ‘the menace which existed at the time’ I have to admit that this is more or less all that I know about that event. Lemmon’s son is one of the missing, he was apparently an idealistic young American caught up in the excitement of the previous regime. This may not speak well of me, but I did thin he and them were rather plonkers, but I think this may have been intended by the makers of the film.

    I caught the first half of David’s programme about Mary Robbo last night. He played a blinder and almost had me converted. All right, everyone needs a set of beliefs to live by but, no, really… I think it was more a case of: ambitious rich girl catches the Zeitgeist and runs with it. (sorry David!) I think you mentioned a great aunt of hers, a nun, who set up the Foxford Woollen Mills. I wonder if they still have the exhibition there in honour of Admiral James Brown, or Irish stock and a hero in Argentina? It’s an interesting way to pass an hour while the women are shopping there.

    The Frontline before it was, as Colm says above, really lame. The people on it didn’t seem to have a clue: we need to stop moaning, we need to stick together, the govt should hand out computers to the schools. Great material for a satirist.

    And talking of a set of beliefs to live by, I still have Crotty in mine. And sharing his more or less economic determinist view of things I don’t have much time for talk of personal profligacy, Irish cultural subservience, German prudence etc as explanations of why we are where we are. Yes, they are ‘there’ of course but it doesn’t really explain things. So I still see it as the US and the Dominions as being free of the structural flaws as they were essentially empty lands to be settled, where land was essentially free (yes I know there were people living there but it was easy to kill them or push them aside.) Now the likes of S. America and Africa were different, there it was a case where capitalist colonialism sweated the human assets for the profit of the metropolitan power, and where the native elites of the later independent states were really identical to, or cast in the same mould of, the original colonial ones. So I would hazard a prediction (knowing, as I said, very little about he country) that Chile’s land is in the hands of a small number of wealthy owners, that its agriculture is inefficient with low output and high food prices, and that the bubble will burst there sooner rather than later. Now if I’m wrong (and I really hope I am) I’m prepared to chop down this part of my theoretical scaffolding but I don’t think Ray and me will be parting company just yet.

    • re: “I think it was more a case of: ambitious rich girl catches the Zeitgeist and runs with it”

      Begrudging rubbish. Taken as a whole Mary Robinson has a long distinguished career defending the poor, the downtrodden and the marginalised. She deserves all our respect.

    • Re “And talking of a set of beliefs to live by, I still have Crotty in mine. And sharing his more or less economic determinist view of things I don’t have much time for talk of personal profligacy, Irish cultural subservience, German prudence etc as explanations of why we are where we are.”

      What we have to be careful of here, and I apply this not only to quotes refs to Crotty, Hudson, Chomsky et al, is that, frankly, a lot of these writings are out of date. They don’t cover the Greenspan era of FIRE and deregulation that has caused so much havoc since then. More particularly, we did get it right here before McGreavy and FF blew the boom by igniting the property bubbble, so that, in itself, requires further refinement of the lens we use to look at our own situation. Furthermore, we are a lot different to Jamaica and a lot of good development took place here before we blew it. If you’ve been outside the country for the past decade, also, the ‘rose tinted glasses’ you may use to look at the place since then, may not be giving a true picture. OT, Mary Robinson herself made a huge contribution to the selling of Ireland to the diaspora that led to the setting up here of many international companies. That contribution she made to Ireland should not be overlooked.

  36. coldblow

    On the Sarf American them and having mentioned Naipaul above I can’t help posting this extract again from another of his essays, about his Trinidad homeland.

    Does this quote from V.S. Naipaul remind you of anywhere familiar?

    “The enemy is the past, of slavery and colonial neglect and a society uneducated from top to bottom; the enemy is the smallness of the islands and the absence of resources. Opportunism or borrowed jargon may define phantom enemies… But at the end the problems will be the same, of dignity and identity.

    “In the United States Black Power may have its victories. The small islands of the Caribbean will remain islands, impoverished and unskilled, ringed as now by a cordon sanitaire, their people not needed anywhere. They may get less innocent or less corrupt politicians; they will not get less helpless ones. The island blacks will continue to be dependent on the books, films and goods of others; in this important way they will continue to be the half-made societies of a dependent people, the Third World’s third world. They will forever consume; they will never create. They are without material resources; they will never develop the higher skills. Identity depends in the end on achievement; and achievement here cannot but be small. Again and again the protest leader will appear and the millennium will seem about to come.”

    • The usual torpid, self serving codescending class conscious whinge from NAipaul: he came from Trinidad himself and got a scholarship to Oxford, so his own bio contradicts the above, read this:)


      • coldblow

        Really? I find it a rather clear well-written self-serving whinge!

        I wish I could find that article that one of the Sindo’s young journalettes wrote about him following his Nobel. She travelled to England and made an appointment to see him but he was quite offhand to her, especially when she said she hadn’t read any of his books. It’s such a shame, she mused at the end of the article, that a man of his stature should let himself down so much.

      • coldblow

        Yes I know he’s from Trinidad. That’s part of the ‘point’. The other part of the ‘point’ is that, being a post-colonial country it seems to have resemblances to Ireland. Naipaul is a very perceptive writer and his travel writing has valuable insights, IMHO. There is a danger of our perceptions of reality to be lost in encrustations of clichés and we need fresh insights.

        This reminds me of some dealings a colleague of mine had with the High Commr for Trinidad, or the deputy. A jovial outgoing woman by all accounts, she gave him a cd of local tin drum music which is now in my collection (propping up the bottom of the stack I’m afraid). This colleague has read every book written (in English) and can quote whole paragraphs from memory. Anyway, she asked him with a big smile: What comes to mind when you think of Trinidad? Now, at the time they were in the World Cup and it was obvious that this was the answer she was expecting. So she asks him the question: what do you think of when you think of Trinidad. And he replies: V. S. Naipaul, and the smile vanished.

        Please don’t ask me for the ‘point’ of that anecdote because there isn’t one. Otherwise it’s PFO and handbags at dawn. Colm, what is up with you?

        • Hi Coldblow, sorry to get a bit tetchy. I’m fairly widely read myself and before becoming a tech nerd I did at one point get a postgrad from UCD on Mod Eng and American Lit and I’ve read Naipaul. Sorry, but introducing Naipaul and Trinidad as a reference point to deal with our current fiscal crisis and our EMU problems seems remote. I also think Crotty has valuable insights but he’s missed the Greenspan deregulation EU money hose era as well. Thx for your earlier Hudson links I found very informative, but again, his later work takes into account recent developments, see my comments to Dilly below. I also take these economic matters we currently debate very seriously indeed, as we all should. Best, Colm

          • coldblow

            Hi Colm

            I take your point about Crotty being out of date and it’s something I have often considered. I suppose it comes down to whether the whole Tiger thing was a bubble or only the latter stages, and then that won’t be decisive as our development appears to have been almost entirely dependent on FDI. As Michael Hennigan/ Finfacts puts it, without the FDI we’d be in the same position as Albania. Your remarks about having studied Eng. Lit. are interesting but not relevant here – I don’t mind normally but I just don’t feel in a forgiving mood just now (smiley). By the way (and I could have been misreading you) I wasn’t out of the country for the lsat decade, I don’t view the situation through rose-tinted spectacles (where did that come from?) but arrived here from London in 1987 aged 29 and 2 months.

            Crotty was not just a theorist but put everything on the line in the 1987 referendum. He regretted not having put more emphasis in his campaign on the economic undevelopment theme of his but ‘rowed in’ behind the headline neutrality banner, and he said that one of the weaknesses in the anti side was that many had nothing in common apart from their opposition to the SEA. I can see the same thing happening this time round. I for one won’t want to march under a banner of the usual clichés, though I’ll probably end up doing so anyway.

            I don’t accept that comparisons with other ex-colonies are all that remote, if only in the light of the above. Granted, there is a thin line between Naipaul’s fiction and an non-fiction, but the quote I gave was from his travel writings, not his fictional work, and to dismiss this out of hand in the terms you did is not in the spirit of give and take.

            As the ex-Pres, if you had taken the time to consider my remarks you will notice that I was almost swayed by David’s presentation, which is tribute to his persuasive powers and to the respect I have for him (despite his faults – smiley) in terms of knowledge and, in particular, his instincts. I thought the humour in my remarks was obvious and I don’t think we really need to resort to smileys to telegraph the construct known to human life forms as ‘humour’. While I accept that my posts can be judged to be ‘rubbish’ (must try harder and all that) they are not consciously ‘begrudging’ (whatever that means), although John Walters wrote convincingly once about its social usefulness. My reservations about Robbo, or perhaps more accurately the public persona, are relatively inchoate, but relate to her position in ‘progressive politics’ as a whole and more specifically to her apparent advocacy of some of the less defensible aspects of feminism. (There was one damning quote in particular which I had been searching for but could not find – probably just as well.) My remark here about progressive politics is that it has, to my mind, gone off the rails at some point in the past and concentrated on ‘soft’ social issues rather than address the power imbalances in the economic end of things – Hudson says something about this in his Neo-Liberalism article. You probably don’t agree with that but I think it’s a valid point of view. In any case I would hope that the benefit of the doubt be given to any poster in terms of assuming that they have at least some sort of reasonable grounds for their remarks, unless otherwise shown?

            I resent taking up my valuable (to me anyway) time to explain the bleedin’ obvious, but one of the problems I consider to be central to Ireland’s predicament is a lack of pluralism and an absence of restraint in debate and for that reason I didn’t pass on the subject as I usually do. Richard Sadlier once explained why footballers are instructed to claim every deicision – it’s not for the present decision but to get the benefit of the doubt for the next one. Making personalized remarks is analagous and I believe it has the effect, if not the intention, of deterring the expression of similar views in the future. While I have no doubt that you are acting out of the best of intentions I don’t think ‘tetchiness’ is an adequate defence here. While this will not put me off it may have that effect on others.

            Nothing personal Colm, I know you are doing what you think is right, it’s just that I don’t agree with how you go about it sometimes! (smiley) I could go down the trading insults route, but I don’t know if I’m good enough. Hopefully this post will have a deterrent effect of its own and help right the balance. I can’t believe I’m writing all this tight-ar*ed sh*t – ah, responsibilities…

          • Gege Le Beau

            I was beginning to think Crotty was out of date but then thought he analysis was yet another example of a warning from history, therefore his commentary is even more pertinent given its sheer foresight.

            If he knew, how many else knew but were ignorned, marginalised. All I know is that Ireland produced some seriously shady characters who were supposedly running this country, there is a reason why people refer to FF as a mafia.

  37. coldblow

    Lest we forget – and for a laugh:


    I thought it was a piece of satire until I got half way through.

  38. And the point of your links and Naipaul meditation?

  39. http://www.youtube.com/watch?v=LXhvdHrC1RM

    German racist, nazi, overbearing, short tempered, unfriendly, rigid, strict, stern, mean, beer, lots of meat, east german women change their gender due to doping steroids, cars, good scientists, militaristic, holocaust engineers, polka dancing, suasage saurkraut eaters…?


    British lager lout, football hooligans

    Stereotypes have more to go with blind ignorance than much else. Lots TO laugh at, but there can be a nastier side:-(

    • coldblow

      Sorry to go on at you there Colm. While I can’t access the links would I be right in surmising that they give broadly humorous examples of national stereotyping and you feel it necessary to add an explanation to the effect that they have no real basis in fact and a warning to say that they can be dangerous in the wrong circumstances? Do you really think the readers of this blog don’t already know this?

      Please say it ain’t so!

      I’ll leave you in peace now. Serious!

  40. Malcolm McClure

    Further to the American foreclosure story:

    Bank of America announced on Monday that it would resume home foreclosures in nearly two dozen states, despite the running controversy over how banks handled tens of thousands of cases of homeowners facing eviction.

    Still, it is far from certain that banks will be able to calm the public controversy easily or quickly.

    • There’s lots of pressure building here both locally and from abroad against the lenient stance being taken by the banks against those in arrears.

      Wouldn’t surprise me if its coming from the EU as well!

      Right now, the message is ‘hands off’ but, bet ye, soon as the banks are sure of their money from the taxpayers, their sheriffs will be knocking on doors once again.

      At the moment, both they and the government, have their hands out with the begging bowls, so they can do without the negative publicity.

    • http://bit.ly/dnkKET

      thx, that video is priceless.

      Message there for the junk arguments they made to Irish taxpayers re NAMA:

      “No way tax payers can make a buck on the toxic waste, that’s why nobody will buy it”

      “Annulling of personal debts in a jubilee law, or when a new ruler would come into office. When the debts rrow in excess to pay, they need to be cancelled, they need to be returned to ability to pay or market price…..
      allowing debts to be cancelled, save the economy or save the creditors, government’s not acting democratically, they are acting in favour of oligarchical kleptocracy http://en.wikipedia.org/wiki/Kleptocracy

      …fincance sector wrapped around the real economy, extracting rent, parasites, parasite takes over the brain to make it think it is part of the economy. You cant serve the parasite and the host at the same time.

      Most interesting in his critique of the mathematical models used to build the financial sector, derivatives etc that got Nobel prizes. They’ve been proved to be wrong.

      Economic growth follows an S curve whereas debt follows a doubling formula, (70 rule mentioned on this list) so debt will naturally exceed the ability to pay.

    • paulmcd

      I missed that last comment, Furrylugs. You will have to speak up!

      • Mea Culpa Paul. I end up replying to some excellent comments quite late at night and then forget to mark the “Keep in touch” box hence a quick fullstop so that my mailbox is full in the morning.
        A good dose of McWilliams beats a Latté everyday.

  41. CREST

    Off the topic, but how many reading this forum get paid milage when they travel more than 6 miles to their work place. Greedy Judges, thank God I’m now living in a State where this would not happen.
    Wake up Ireland.

  42. Interesting article below:

    From Global Depression to Global Governance
    The role of the corporate elites’ secretive global think tanks


    So while things have never seemed quite so bleak, there is a dim and growing beacon of hope, in what Zbigniew Brzezinski has termed as the greatest threat to elite interests everywhere — the ‘global political awakening’. The global political awakening is representative of the fact that for the first time in all of human history, mankind is politically awakened and stirring, activated and aware, and that generally — as Zbigniew Brzezinski explains — generally is aware of global inequalities, exploitation, and disrespect. This awakening is largely the result of the information revolution — thus revealing the contradictory nature of the globalization project — as while it globalizes power and oppression, so too does it globalize awareness and opposition. This awakening is the greatest threat to entrenched elite interests everywhere.


    There is hope because I think this article is on the money regarding political awakening. People in Ireland are wakening up and there is a sense that this country is soon going to change and change in a big way.

    People want a fair society as opposed to the social genocide that is being perpetrated under the misnomer of globalisation.

    Good luck to us all

  43. I was glad you wrote about Chile David and some of the comments from the guys have been illuminating. South America has a lot of left leaning governments and I wanted to know why this was the case. Everyone knows about Pinochet and the Caravan of Death and all the other dark forces that have been at work in Central and Southern America in the past.

    We also know that Thatcher was one of Pinochets bum kissers and that Chile was used as a bolt hole for Nazis escaping justice. We also know that conservative politicians in England in the 1930s thought Hitler was a beacon of light and that some of them openly cheered in the house when he invaded his neighbours.

    On my Electonic travels I stumbled across the link below which mentions the Chicago School of Economic thinking and Milton Friedman. There is also mention of Chile and Pinochet in the same article. I also found a book called The Shock Doctrine by Naomi Klein and the contents appear to be the stuff of nightmares.


    According to the above Article, under the tories there is a pattern emerging where quangos that are of use to society are being abolished whereas those which offer money making opportunities to the rich are being preserved. It defies logic. Is this what is termed ‘Disaster Economics?’

    If there is such a thing as Shock Doctrine Economics I would suspect that Ireland is being subjected to this kind of thinking and that there are plans in store for us for of which we are not yet aware of.

    I am now wondering if there are many people in Ireland who have anything good to say about Mr Friedman and his school of economics. It is disturbing to imagine that such minds has so much unconstrained power

    • Gege Le Beau

      //If there is such a thing as Shock Doctrine Economics I would suspect that Ireland is being subjected to this kind of thinking and that there are plans in store for us for of which we are not yet aware of.//

      This can hardly be in doubt. Our current economic champions are fans of Greenspan who came under the influence of Ayn Randand and Milton Friedman.

      Shock doctrine/disaster capitalism – just open the papers on any given day.

      Ideological it most certainly is.

  44. Interesting snippets from the above link:

    “The Chicago School’s catastrophic programme pushed almost half the population below the poverty line and left Chile with one of the world’s highest rates of inequality”

    “The poor world’s debt crisis was used by the IMF and the World Bank to impose Chicago School programmes on countries that had no option but to accept their help. The US hit Iraq with economic shock and awe — privatisation, a flat tax, massive deregulation — even as the bombs were still falling. After Hurricane Katrina wrecked New Orleans, Friedman described it as “an opportunity to radically reform the educational system”


    Re Foreclosures Ellen Brown, author of Web of Debt was on the Max Keiser show talking about a massive scam.

    There is a mechanism whereby a lender can insure a loan 30 times over. They cite an example whereby a borrower takes out a loan of 300k to buy a house. That is no good to the bank because if the borrower defaults then the bank makes 30 x 300k, ie 9 million.

    I am having trouble believing some of this stuff because it sounds too far out.


  45. insider

    Food is a good short term play. Ireland is blessed with good farmland. The global population is falling – but plenty demand from the East in the meantime. From what I have seen agribusiness in NZ is much more productive/efficient. Maybe we can learn from our cuzzy bros.

    What about energy – harness the oceans (just don’t impact the waves), wind. Reduce Europe’s dependency on the Russian gas valve. That has to be considered – I’m not sure what investment has been put in place to date. I saw lots of wnd turbines on my last visit.

    Ireland should still benefit from MLCs having Euro HQs on the island. But should decrease dependency on it.

    Pensioners – as long as they don’t put a burden on existing health services. Can’t really speak for the Irish health system as I was generally healthy as a kid and have lived overseas since I was 17. But I believe it is not great.

    Tourism has much potential. For such a small country with strong cultural links and attractions, Ireland should be able to generate a disproportional amount of revenue in this sector. A few things though I would say from my last visit:
    The airport – what an introduction. For any visitor the first impressions on average must be poor.
    the food variety is below standard.
    Eating out is very expensive, very little BYO.
    accommodation is ok but still overly expensive for what you get.
    Generally everything is too expensive, especially in the country and Dublin.
    Television – was I in Ireland or Britain? Why does English soccer take precedence over local matters?
    We should make more use of the natural resources, understand the environment, respect it and promote it.
    the country hasn’t much evolved to either accommodate or take advantage of the climate.
    In Dublin city where many tourists go is dodgy – even in broad daylight. Honestly what’s with the pyjamas? Are they the new tracksuits? My last trip home I witnessed a drug deal (near the metho clinic on the way to the IFSC) and an attempted robbery on Henry street within the space of 10 minutes.
    Dublin must be ranked 3rd in the cheap suit capital of the world, behind Shanghai and Buenos Aires. This is not a criticism, just an observation. It hardly makes Dublin resemble a fashionable city.
    Loved the port tunnel!

    • Lidl are now flogging black pin stripe suits in cardboard boxes for 20 euros a throw and you can get a pair of ‘pyjamas’ for a fiver. The ‘leisure suit’ has for two decades been the attire of choice for British couch potatoes and pregnant girls with their hair tied back n a bun.

      It would be easy to cast Ireland off as a toilet but other countries are not exactly shining examples of progressive society.

      Re tourism. If Ireland dropped it’s prices by 40% they would get much more business. Why sell something for a high price and get few customers when you can sell it cheap and get lots of them. The mark up is obviously to pay off high debts or maybe they just think the world is willing to pay them more just because they are Irish. Either way they are not taking their businesses seriously and deserve to fail.

      • Gege Le Beau

        //If Ireland dropped it’s prices by 40% they would get much more business//

        As Upton Sinclair wrote ‘hard to get a man to understand something when his salary depends on him not understanding. Of course prices in Ireland were ridiculous, just ask any American tourist, but businesses across the board were happy to inflate those prices (look what happened when the euro came in), now a lot of these people blame the worker and the supposedly high minimum wage and do not look at their own actions which played a major a role in inflating the economy beyond all sanity.

        Prices across the board should have come down by 30-40%, but not happening because people think tourists will pay, well they won’t, and is one of the reasons why there are few to zero tourists staying overnight where I am from because the place is a rip off from top to bottom.

        But lifestyles have to be maintained, SUVs and inflated mortgage(s) paid off, hence the assult on the minimum wage, which few major employers are living on.

        They are intent on driving people into poverty, and a lot of it is down to their own greed, a co-operative model of business seems more appropriate, where profits and hard times are shared equally, and where money is put aside for the inevitable rainy day which comes along with clockwork frequency with this casino capitalism system that so many are intent on preserving.

        The co-operative model is beautifully depicted in Michael Moore’s ‘Capitalism a Love Story’, a film I recommend to believers and non-believers.

  46. Philip

    Fintan O’Toole’s article says it all for me. http://www.irishtimes.com/newspaper/opinion/2010/1019/1224281440930.html

    We are getting the mushroom treatment. What we see going on in France is harmless compared to what might explode from the depths here in Ireland. Irish people are being subject to a criminal level of psychological abuse.

    • Gege Le Beau

      Think this a very important point, the population are being terrorised.

      I suspect the cuts will fall between 3 and 5 billion (4.3 billion to be precise with Lenihan saying “because of lower rates of growth we have been forced to make more sizable adjustsments to government expenditure in the national interest, hard decisions have to be made now in order to safeguard Ireland’s future economic growth and restore the country’s international standing, these are challenging times for the State’s finances but if we implement these measures now we will restore Ireland to………patriotic duty…….necessary…….hard decisions…….”

      The fact the government have not gvien the precise figure speaks volumes of our dying democracy.

      • Fintan’s article reminds me a little of the film, Zulu,


        The garrison soldiers are of course the taxpayers, the zulu warriors are the bondholders, NAMA, the debt reparations assembling now and making ready to attack on budget day..

        • Gege Le Beau

          Or the ‘citizens’ as oppose to the ‘taxpayers’ because everyone is being sucked in (apart from the extremely wealthy of course), the term taxpayer to my is reductionist and inaccurate. People on lower wages who do not pay taxes are getting caught in a number of ways. Ireland is supposed to be a Republic, not a country of taxpayers, if it was otherwise we might as well call Eire, P-60-LAND.

          At least the Zulu’s succeeded in wiping out a massive British column at Isandlwana, illustrating the limits of power and the dangers of hubris.

          The current situation in Ireland reminds me of the character Patroclus from Homer’s Iliad. Patroclus is itching to fight the Trojans, Achilles alllows him to lead the Greek forces into battle but warns him of his limitations and not to exceed them. Patroclus agrees but in the midst of battle he ignores Achilles’ warning and pushes his troops on further, he is eventually surrounded by Trojans and is finished off by Hector (if I remember correctly he is beheaded).

          If only the government, banksters and the so called ‘business community’ (because it is a community of its own, detached from the general community) had heeded the warnings from a multitude of people, hubris as demonstrated by Homer, is always resolved by Nemesis, the Goddess of natural justice.

          We are all playing bit parts in an unfolding Irish tragedy of epic proportions of last nights Primetime programme is anything to go by.

          • Nice Patroclus analogy, brings to mind Honahan railing against the markets and the bond spreads..

            Also brings to mind the disaster of Gallipoli where the analogy might be our ‘consensus’ attempting to open an effective supply route to growth, not Russia:

    • @Philip

      “What we see going on in France is harmless compared to what might explode from the depths here in Ireland. Irish people are being subject to a criminal level of psychological abuse”

      Well spotted Philip. I think this is an important point and I believe the Irish are capable of making the French protests look like a bun fight. It is psychological abuse and we have had it up to here.

      In the article I referred to above there is mention of the abuse the people of Chile suffered at the hand of Pinochet and the Chicago boys. Even after the deaths and when half the nation was living below the poverty line the Chicago boys were urging Pinochet to hit then even harder. Even Pinochet did not have the stomach for their psychotic wishes and he threw them out. In the US the electorate saw through them and the world saw them for what they are.

      Friedrich Hayek was Thatcher’s intellectual mentor and he tried to persuade her to unleash a campaign of psychological terrorism on the British people after her disasterous first term. She told him that such measures could not be perpetrated in a democracy like Britain so instead she went to war with Argentina and won the next election as a ‘war hero’. Later came the battle with the miners and the country felt like it was fast becoming a fascist dictatorship.

      The British people would never let this happen then and they would not let it happen today because as we speak the unions are organising while the Irish unions are burying their heads in the sand thanks to the Croke Park agreement. They are behaving like ostriches.

      On The Frontline show the other night there was some silly peroxide blonde from Dun Leery trying to pacify everyone by saying that the Irish people don’t need to get angry. And Some people clapped her!

      • Deco

        If Britain felt like a Fascist dictatorship, then why were so many Irish people getting on the boat to go there and beleived it was a land of opportunity ?

        • Because the grass is always greener on the other side.
          Because Ireland was like Albania.
          Because Ireland was a mind fuck and Britain offered them the chance to loosen up and get laid more.
          Britain has Celtic and Manchester United.
          Need I go on?

          When you have seen police cracking peoples heads open to enforce an alien political and economic ideology then you will know what fascism looks like.

          As I said earlier Thatcher was a disciple of the Chicago boys who destroyed Chile. I rest my case.

          • Gege Le Beau

            @ Pauldiv – Precisely, could not agree more.

            Klein’s section on Chile is very insightful, the Chicago Boys arrived en masse and wrekced that place, increased GDP but what they failed to mention was that ‘poverty sky-rocketed’, just like the term ‘Celtic Tiger’ papered over serious social inequalities, graft in public office and a banking system that was off the wall.

            Ridiculous, reductionist language, with ‘Ireland Inc’ thrown in for good measure. Sick.

            Remember Chile suffered its September 11th, but in 1973, when Salvador Allende was toppled as the democratically elected leader of the country in a bloody, CIA backed coup, thousands more disappeared, were murdered and tortured in the years of the military junta, including the famous traditional singer Victor Jara. John Pilger recounts in his ‘War on Democracy’ how the fascist military broke the guitarists hands before they executed him in the national stadium along with countless others).

            Klein’s take on Chile

            “As for the argument that Friedmanite policies are the reason Chileans live in “houses of brick” instead of “straw,” it’s clear that Stephens knows nothing of pre-coup Chile. The Chile of the 1960s had the best health and education systems on the continent, as well as a vibrant industrial sector and rapidly expanding middle class. Chileans believed in their state, which is why they elected Allende to take the project even further.

            After the coup and the death of Allende, Pinochet and his Chicago Boys did their best to dismantle Chile’s public sphere, auctioning off state enterprises and slashing financial and trade regulations. Enormous wealth was created in this period but at a terrible cost: by the early eighties, Pinochet’s Friedman-prescribed policies had caused rapid de-industrialization, a ten-fold increase in unemployment and an explosion of distinctly unstable shantytowns. They also led to a crisis of corruption and debt so severe that, in 1982, Pinochet was forced to fire his key Chicago Boy advisors and nationalize several of the large deregulated financial institutions. (Sound familiar?)

            Fortunately, the Chicago Boys did not manage to undo everything Allende accomplished. The National copper company, Codelco, remained in state hands, pumping wealth into public coffers and preventing the Chicago Boys from tanking Chile’s economy completely. They also never got around to trashing Allende’s tough building code, an ideological oversight for which we should all be grateful.”

          • Deco

            What about the FAI who had no problem providing validation to the Pinochet regime ?

            Surely, they are a collection of Fascists as well ?

        • StephenKenny

          Because it was. Compared to today, 1980s UK was a free and easy place to live and work. I remember the ‘enterprise society’ and everyone talking about starting businesses and doing their own thing. I also remember 3 years ago, when everyone was talking about buying property, and the idea of working was just for the stupid.

          Saying that, compared to the 1980s, the 1960s was a much freer and easier time, fuller of hope, optimism, and energy.

          Hayek? Keynes? and all the rest of the economists people talk about. It was someone like JK Galbraith who put it best for me “Economic forecasting was invented by people who wanted to make astrology look good”.

          Economies are about people doing things that other people want and find useful. How it’s financed can only come after that’s’ been sorted out. The problem with all these ‘cuts versus borrowing’ arguments is that they are predicated on the fallacy that we have any idea at all of what these activities are.

          Having half the population digging ditches and the other half filling them in, isn’t going to work, in spite of providing full employment and the wonders of Keynes’s multiplier. Similarly, cutting out a load of unwanted, or less wanted, activities, so as to bring down the deficits, isn’t going to grow the economy either.

          The problem is that, as has been said may times but never by a politician, economic growth is hard, and in spite of their siren claims to the contrary, there’re no cunning levers that can be pulled to make everything well.

          • coldblow


            I’ve been reading that “Fantasy Island” book you recommended and it’s excellent.

          • Deco

            We had PAYE rates of 67% in the 1980s. People were doing ‘nixers’ non-stop and drawing the dole.

            Bono and the Isle of Man brigade, were doing well. But the rest of the population was snookered. The Public sector was bloated. And most people could only afford to get out of the country on a boat thanks to Sealink – as Aer Lingus were obscenely expensive, and regarded flying as something forbidden to the working classes.

  47. MK1


    I think that we need to have a system where taxes on businesses are close to that of the individual. And that taxes should be ‘progressive’ to reward companies that do not ‘fleece’ their market position and that who employ as many people as possible. As a small nation (population-wise) we definitely want to keep MNC and FDI in this country so need to attract companies based on tax reasons, plus other reasons of course.

    A flat tax rate whilst being simpleton to apply in calculations is not serving us very well and doesnt make any reference to employees.

    So, for example a company that may emply a person for every 1 million euro of revenue, then tax could be maintained at 10% (Note: entry level personal income tax should also be 10%). For each extra 1 million of revenue that they have they need to employ another person or lose 1% of tax margin, ie: will be taxed at 11%. Thus a company that employs say 1,000 people and has 1 billion revenue without excessive profits, should be taxed low.

    The details need to be worked out to include values for excessive profits, which to most would be anything that would be say 15% ROS plus.

    Of course, economically, a company could ‘insource’ people, cleaners, canteen staff, IT staff, HR staff, sales, etc, rather than use external suppliers so there is in many cases a ‘moot’ effect as to actual numbers of people employed.

    But it might send out the right signal. Of course, it could send out a signal to others that the labour market/tax conditions are too stringent, etc.

    And should taxes not be set at the EU level for businesses? Shoule we compete on tax levels, as surely as part of the social raison d’etre for the EU is the betterment of people’s conditions supported by tax. Countries should instead perhaps be competeing on what they do with their tax rather than the raw levels.

    Another idea I’d like to float with readers here and David is that although it can be labelled as partially xenophobic, do we in the EU now need non-EU nationals to work here in non-specialised area where skills are lacking? Given the recerssionary times we are in and the high unemployment in Europe. Does it make sense to anyone that Chinese people are delivering food for Pizza places? Or Indian nationals working in petrol stations?

    From a business owners perspective, they want availability of staff and skills and low wages/costs to boost their margin, so they want non-EU staff to increase the supply of labour. But do unemployed people want that, and should we (Ireland plus EU) actually want that?

    External labour is used by many countries as a tool, cheap labour benefits others in that country, from Dubai, to Israel, to the US and Germany still has ‘gasten werkers’. But do we not have a social responsibility to those unemployed to reduce that tap of supply?

    Businesses wont like it, it may be seen as xenophobic, but should we try it ?????


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