November 3, 2010

Pray for new beginning to help Pope's Children

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A couple of weeks ago this column suggested that it would be a workable idea to freeze mortgage payments for a couple of years to provide some stimulus to the economy.

As is usual in our country, any suggestion of easing the burden on Irish mortgage holders is greeted with howls of derision from many sides.

Similar howls were heard a few years ago when an economist called for restraint. When considering new ideas, it is worth bearing in mind the mentality of the herd.

In the boom, the herd’s view of the economy could be aptly described as “expansionist”. Back then, the crowd contended that we could expand to a degree not seen before, because “this time it is different”. Well, it wasn’t different. The herd was wrong. Today, the same people who argued for infinite expansion and borrowing in the boom are now telling us that we can’t countenance any debt deferral for people who can’t pay. So the herd in Ireland has swung from wildly expansionist to crudely reductionist in three years.

Many people are against the idea of a mortgage amnesty. Their argument generally runs along the lines of: “I didn’t buy a house in the boom, so why should I have to pay for someone else’s bad decision?”

Others argue that an amnesty rewards “bad behaviour” and would lead to moral hazard. Maybe we should be less concerned by “moral hazard” and more worried about “real hazard”. Real hazard is when people — our neighbours, our friends, our families — begin to lose hope in the future.

On Monday there was another clear example of this when the very admirable (and desperately needed) www.newbeginning.ie was launched. New Beginning is a group of solicitors, barristers, economists and businessmen who have seen the gross inequality played out daily in the High Court where people are appearing in front of judges without any representation — because they can’t afford it. Bad enough that these misfortunates are losing their homes, which they can no longer afford, but down in our courts they are being harassed by legal teams paid for by the banks — and, of course, the banks use your money as it is your money that has bailed out these delinquent banks.

New Beginnning should be lauded for their excellent work in defending people who have committed no greater sin than to believe their government.

Remember the litany of politicians, so-called economists, and other “experts” from 2006 and 2007 telling us that “the fundamentals are strong”. These “fundamentalists” were the lads that brought you such fantasies as the “soft landing”.

The victims of this terrible advice can be seen daily in the High Court. In contrast, the people who dispensed that advice are shielded from the consequences of their actions.

It is worth reminding the people who hate the idea of helping those in dire straits what doing nothing could mean for the economy.

At last count there were about 36,000 people in the country who have not been able to make a mortgage payment in three months. This figure hides the number of people who are paying smaller amounts. It is easily possible that twice that number are in real trouble with their mortgages and are at risk of losing their homes.

So let’s say we do nothing to help them. It is fairly safe to assume that the majority of people in difficulty are under 40. In 2007, I wrote a book called ‘The Generation Game’ that focused on what would happen to this generation when the crash came. Most have young families. These people were Ireland’s “favourable demographic situation” that we heard would keep the property bubble inflated. These are the Pope’s Children.

If we do nothing, they are going to turn into our lost generation. Their children, born into the kind of poverty that comes with large unpayable debts, will be disadvantaged for years.

Simple analysis says that we had the party during the boom, now we have to suffer the hangover. In economics this is not hangover but an overhang or, more specifically, a debt overhang.

Some economists argue that we need to go through a type of cleansing period to learn the lesson and, therefore, people paying back debt and increasing their savings now is the only way forward. They argue that the savings in the banks will be borrowed by companies that want to invest. Therefore, the money which is now paid in mortgages will find its way out into the economy via funds for investment. I would go along with that view if the banks weren’t bust and incapable of providing credit to the economy. But the banks are the bottleneck and therefore, some other way of keeping credit going needs to be conceived.

The people who are shouting “unfair” and “moral hazard” are cutting off their nose to spite their face. By sacrificing their neighbours on the altar of “I told you so” they are ensuring their own demise, and more importantly, the demise of what is left of Ireland’s economy and, possibly, our social cohesion.

OF course, there is another way. New Beginning is a start. They intend to challenge some mortgages because banks did not take their duty of care seriously. It seems obvious to me that they are right, but Ireland’s contract law is as Victorian as our bankruptcy law, so perhaps we’d better wait and see.

What is really needed is a mortgage amnesty. I will not call it “debt forgiveness” because that implies a sin, and there are no sinners among the unfortunates in the High Court.

People made a mistake when they bought during the boom. They presumed that their well-paid jobs would last and that house prices would rise forever. They got caught up. By not helping them, we are all making a huge mistake that will prove costly.

I didn’t go mad in the boom, but I can see how my family’s prospects are related to my neighbour’s. Arguably, those of us who were vilified back then for predicting the crash should be the ones with the biggest motivation to see those who ridiculed us back then punished now. But societies don’t have to work that way.

When you look at history, you see that booms and crashes are always followed by a change in the way people look at the society and the economy. Roosevelt’s communitarian New Deal which followed the individualistic Roaring Twenties came with federal welfare, housing and work programmes, bank deposit insurance, prices and incomes policies, minimum wage legislation and mass debt amnesties. Ultimately, the US itself came off the gold standard and defaulted on its sovereign debts.

These moves were anathema to many who believed that the people who got caught in the share and property crash of 1929 had only themselves to blame.

However, the point is that by 1932 the world had changed and when the world changes so too do attitudes.

Who can doubt that our world has changed? Who can doubt that our attitudes will change too?

David Mc Williams hosts Ireland’s first economics festival from November 11. Details at: www.kilkenomics.com


  1. Gege Le Beau

    …….The Budget is not meant to be fair, it is meant to be unfair. Hierarchical society is only possible on the basis of inequality, poverty and ignorance. This new version is the past and no different past can ever have existed. In principle the Budget is always planned to keep society on the brink of starvation. The inequality is waged by the ruling group against its own subjects and its object is not the prosperity of society, but to keep the structure of a society, which benefits the rich over the poor, intact……..

    • TheFullRed

      You sound like a fresher who’s just joined the SWiMmies man. For crying out loud, we are not here to argue about ideologies. The fucking ship is sinking and there is no good to come by bleating on about inequalities. If the ship sinks, we are all finished.
      Now is a time to concentrated on preventing the imminent collapse of Ireland’s economic, social and industrial position

      • Gege Le Beau

        You must be new to the party FullRed?

        Thesis, Antithesis, Synthesis.

        Been going on here for years, you read the product of at least 2-3 years of reading and posting on this page alone, maybe I should send you an invoice.

        Wait till you come across Moon Wobbles……blow your fcuking mind. Ideology is the basis of it all and will have to form the basis of where we go from here.

        • TheFullRed

          Your talking about strategic changes, McW is talking about tactical movement in this article.
          Now is absolutely no time to shut down blood transfusions because they may conflict with some new ideology. Save the patient first, then put him on a new health and fitness regime when he has sufficiently recovered…

          • Gege Le Beau

            I’m no Jehovah. Time is now. ‘Labour can’t wait’.

          • roc

            Keep the blood transfusions going. But the patient needs a new heart. Have you not noticed that we’re running out of blood with bond rates at over 7%? We need to get a new heart in the patient as quick as we can – a heart that can be productive enough to make its own blood – the old heart haemorrhages blood at an alarming rate, in all sorts of ways.

            To make the metaphor explicit, this heart comprises our political and business institutions – and the ways in which it haemorrhages include deeply ingrained practices like, ‘rigging’ certain markets and fostering tacit cartelism; awarding lucrative and overpaid contracts, tax breaks and subsidies to cronies; facilitating rent-seeking gombeenism of all hues… but the list is as long as your arm.

            We need a new heart.

          • Deco

            ” Labour can’t wait”.

            But.

            The kids in the national school at the centre of the Gilmore’s half a million plus windfall…

            they have been waiting….

            waiting in prefabs mostly….

            waiting for years….

            while the Gilmores got a better deal

            for a field in the middle of nowhere

            a deal with the same department which has Mrs. Gilmore on the payroll……over a hundred grand a year….a mini-quango !!!

            Collection of corrupt shysters !!!

          • MadaboutEire

            @ Deco, you conflate the needs of working people with a deal down by the spouse of a leading politician.

            To have to point out that these are two entirely different topics is obvious, but still I make the point.

          • Deco

            MadaboutEire.
            Oh..right….if somebody makes a few PR stunts about being there to look after the working people….and at the same time screwing working people for their money….this is fine.

            Bertie Ahern did it for years. I suppose you are alright with him doing it also. No wonder there is so much corruption in Ireland, with all these people trying to deflect from it.

            I always knew that Gilmore was a fraud. This is the proof. Of course a lot of people have already compromised and decided that he should be allowed to get away with.

            If you condemn Ahern for his funny delaing, then you must also condemn Gilmore. Otherwise you are a hypocrite.

            Gilmore = Gimme-more…

          • MadaboutEire

            @ Deco – you are missing the point.

            Whether the Gilmore’s are people of integrity or not is a totally different issue from the issues of working people, you don’t seem to get the sense of this simple point. Is their hypocrisy in criticising the boom, property prices and then your spouse benefitting to a seemingly extraordinary degree on the sale of land to the State? Strikes me as a form of political suicide at the very least.

            Same applies to Ahern, his antics/hypocrisy but the needs of working people is something entirely different, and the issues are not to be conflated.

            You may enquire: what is the Labour party? What is their agenda? Are they just time servers, middle to upper middle class rebels? Architects, accountants, sons of former TDs, wrapping the red flag around them, but centrist in political essence, ineffectual, now that is interesting and worth pursuing.

            Labour were wrong on Lisbon, Rabbitte was on Vincent Browne’s show praising the role of Michael O’Leary – you are unlikely to see anything more absurd for a so called Labour member. And yes there are questions around the senior members taking ministerial pensions on top of large TD salaries.

            At least Joe Higgins lived in a council house and took the minimum wage, plowing the rest of the money into the Socialist party (not that I would agree with their stance or approach on issues), but I expect Labour are trying to appeal to a conservative population whose knees start trembling when the ‘Left’ is mentioned (a result of decades of right wing indoctrination and fear of independent thought). But then a former leader of the party pops up on the board of Eircom saying he had no money to invest in shares and would show people his accounts if necessary and the whole thing descends into utter farce.

            Sinn Fein, the ‘old bogey man’ party, seem to set something of the right tone in terms of policies and the actions of their deputies, and did a service to democracy with the recent court ruling but people still don’t trust them.

            Indeed, we ask of all of them, can any of them be trusted, and if not, how do we begin anew.

          • Deco

            It is clear to me that Gilmore is just another snout in the trough. I suspected it for some time, as he is unable to provide straight answers, and engages in all sorts of button pressing language with the electorate. Every now and then a serious question is put to him and he responds with a cop-out of an answer.

            The Gilmores have serious questions to answer.

            It matters a lot. The state is presided over, by a collection of liars and funny dealers. Gilmore has conned people into thinking that he will change this. That is bull. It is obvious that he won’t. Our state is bankrupt. We do not need another schemer in charge. Forget about recovery. The Irish state is an underperformed because of this class of politician. We need to get rid of evey single one of these types.

            Replacing one opportunistic liar with another is not going to bring about reform. It will only bring more corruption and chicanery.

        • Gege,
          since the Moon Wobbles have kept us on the straight and narrow, given that Dun Aengus is indeed a spaceship,one marvels at what ideology may emerge from the anti-deluvian chasms inhabited by our Troll-elites.
          One of these days I’m expecting that little bald ugly yoke from Lord Of the Rings to read the News and tell us that the recession never happened and it was all down to the Borg.
          And that DMcW is a Cylon, complete with sweeping red eyes.
          See ye all in Kilkenny. Should be fun since even the Garda Commissioner is jumping ship.
          What a country.

          • MadaboutEire

            @ Furrylugs

            Maybe the Garda Commissioner has had a Damascus moment and will reinvent himself as an anarchist, or worse, a popular economist :-)

          • @madaboutEire,
            apparently he@s seen as been a proper Guard amongst the Rank and File, a little like Sean Kelly when he steered the GAA throgh Article 42.
            We lost Kelly, who could have been the Architect of public service reform, to that quagmire that is Europe and now we have lost the man who set up the CAB. The CAB who really created havoc amongst the rotten and corrupt. A good man.
            Tis all the proof I need that when a career officer of An Garda Siochana is forced to retire because he is straight, particularily in view of the fact he announced just last week that his investigations were nearing conclusion re Anglo and that files were being sent to the DPP, that now he announces his retirement.
            That stinks to high heaven.
            What sort of animals run this country when they can force the retirement of one of the most respected Garda officers the State has ever produced?
            F

          • Harper66

            Hi Furry,
            “What sort of animals run this country when they can force the retirement of one of the most respected Garda officers the State has ever produced?”
            From what I have heard that is exactly the case. Also fair play and thanks to you to you for keeping your comments factual and informative.

      • Gege Le Beau

        @ FullRed

        You must have missed Orwell in your fresher year……..

        • TheFullRed

          I studied engineering

          • Gege Le Beau

            My condolences.

          • Colin

            Gege,

            Engineers create wealth and solve problems (all kinds of problems).

            I feel sorry for you now that you’ve shown us what contempt you have for the most important profession a country needs.

          • Gege Le Beau

            @ Colin – to borrow FullRed’s metaphor which graces this page more than once, you are badly in need of a humour transfusion.

            Have not read Wilde’s line “don’t take too seriously, you’ll never get out alive”.

            Come on man lighten up, even those dangerous North Korean communists that you say I should join, can break a smile on Leader’s day.

          • In fairness Gege, all us engineering types took the first hit in this downturn. The smart money dried up in 2006 and it took two years to complete works in progress. However, design works stopped dead in Autumn 2006 thus us Engineery people, all private sector with no golden cushions, are in full stop mode for almost 5 years now. Bet the ESRI haven’t factored in that little nugget.

          • MadaboutEire

            @ Furrylugs – I wasn’t being serious. Has humour died with the economy.

  2. adamabyss

    subscribe.

  3. paddyjones

    If there was a debt amnesty then the banks would take the hit and when the banks take a hit they pass it on to the government who then pass it on to the people.
    You can’t simply argue for an amnesty without explaining that someone somewhere will pay for it. Why should a good borrower pay the debts of a bad borrower? In every country there are house repossesions , in Ireland they are very low and these people get repossessed deliberately they are happy to get rid of the debt. There is always the safety net of social security.
    Buying a house is a gamble, borrowing money to invest in property. Would anyone borrow money to invest on the stock market? no so why is borrowing to invest in property any different.
    DMcW is getting increasingly desperate in his efforts to find a way out when there is no way out. It will be a long hard slog trying to deleverage the country, there will be no free rides or welching on debts like the developers are trying to do.
    DMcW ignores the gorrilla in the room our 20 billion deficit and 150 billion total national debt. Not to mention the probability of the EU/IMF running our country.

    • Gege Le Beau

      I think David McWilliams understands the issues paddyjones, he’s been writing about this stuff for years, he gets the fundamentals, the big picture. He understands people need a breathing space, he understands the need for a jobs stimulus package, the need to get consumption moving, the need for confidence to be restored. I think a moratorium on house repossesions is the least we can do, any money given to the banks should have come with major strings attached

      1) failure to pass on the bailout in terms of credit injection into the economy, you get canned
      2) failure to take a more ‘human’ approach to people in serious difficulty, you get canned
      3) failure to pay back the money with interest, you get canned
      4) failure to remove those responsible for the financial recklessness, you get canned
      5) failure to prevent bonus culture from taking off again, you get canned and so on and so on…..

      The problem is not with people who have been made unemployed and can’t keep up payments, the problem is with the banks and the political system that walked people into this debt trap (no point in going over this as it is so obvious).

      People need a break, David is right to advocate for them just like the ‘New Beginning’ seems on the face of it a proactive and human gesture by professionals who have been badly tarnished by this economic implosion.

      This battle had to come, inevitable. If those who have brought us to the abyss do not have the sense or humanity to treat those suffering the most with some compassion, then they may yet reap what they sow.

    • Deco

      { If there was a debt amnesty then the banks would take the hit and when the banks take a hit they pass it on to the government who then pass it on to the people. }

      That is essentially it. Follow the money. The PAYE taxpayer gets suckered with the bill again. Denis O’Brien is in the Carribean, and Bono is another “Tulip” who regards PAYE as something to opt out of. Broadening the tax base will hit PAYE taxpayers also. Property tax, water rates, whatever else will fall on the PAYE taxpayer.

      The fact is that the chickens are coming home to roost for the entire Irish way of short-term impulsive spending, and the compulsive conformity of the ‘it has to be done’ lifestyle based on lemming thinking…we even have kangaroos popping up at 21st birthday parties and the country is completely broke….short sighted thinking as usual.

      The bond market has already decided that we are going to tank. There are too many commitments already.

      When the crisis first erupted, Minister Hanafin in a fit of genuis declated “from now on we will have to concentrate on sustainable growth”. That was the time to sell Irish bonds. Because when you hear that sort of nonsense then you know that a country has already bankrupted itself.

      • Deco

        My point about the kangaroo and the 21st birthday party is that in this country performing stunts and chasing celebrity stautus are now core activities. This is the current culture of this country. In terms of consumer culture we are still in binge mode.

        We are still following euphoric episodes of stupidity with serious economic implications. Wastage is not just a state sector speciality. It is rampant across our entire society.

        • Gege Le Beau

          Distractions. Media Porn.

          • Deco

            Media porn is sports TV for the men and celebrity/soaps for the women.

            ‘ Don’t read a book, any book in case you learn anything. Just sit with the remote in your hand and stay tuned for the next episode. (In case you miss anything “important”….).’

          • Gege Le Beau

            @ Deco – what I meant was Media is porn and by extension, when you turn on that box whether it be RTE~Pravda, ‘Around the Box-House’ or anything else, best beware. But you know the score, pints and circuses,

    • TheFullRed

      “Why should a good borrower pay the debts of a bad borrower” – Economics is not an expanded version of Personal Finance there Paddy. The reason we should consider some form of debt relief is that these people are part of the body economic too, and our fortunes are inextricably linked, even co-dependent.
      While your argument is well put, it is the economic equivalent of refusing a blood transfusion because youre a Jehovah’s Witness. Your argument is coherent, but will cause the patient to die.
      Ireland needs to step outside the normal parameters and come up with some creative solutions. To opine that buying a house is a gamble is to utterly miss out the salient point that we need to focus on what improves Ireland, and COMPLETELY disregard those who would focus on finger-wagging. We need to do whatever is good for the Ireland’s economic condition, and if this includes telling begrudgers to be quiet, then so be it.
      Further, you are ignoring the fact that the country was actively encouraged to buy buy buy by this current government, who were supposed to be guiding the nation.
      People who want the condition to improve will look at the merits of this proposal and analyse ways in which it can be effectively delivered. Those who view their society with a jaundiced eye will call for no relief, ultimately and immediately at their own and the rest of our expense.

    • BrianC

      Hi Paddy

      I hope you are well. I appreciate your comments and would find it very easy to agree with many of them. However, the duty of an economy is to engender cohesiveness and if we go back to the basics of Adam Smith greed is good and self protecting and nothing wrong with it. But when you introduce avarice this is the element in the equation that decouples everything. And averice is a very dangerous element because it encourages amoral behaviour which unfortunately impinges on the rights of others which usually boils down to costs that is who is left with the bill. So the point here is that you cannot just apply a balance sheet exercise to someone who finds themselves captured in an artificial market driven for the favour of the few in the inner circle.

      When you say ‘the net of social security’ I think you see this a a cost which on the face of it woudl be correct when paying out the bill. But it can also be an investment to deliver social cohesion which at the end of the day can be cost saving but only if planned to achieve that saving objective.

      You have a very valid point when you refer to house purchase as a gamble as you are in the property market and equating in the risk of borring to invest in the stock market reinforces your balance sheet arguement. But I would ask you how many people who buy a home equate this to property investment and shares/ stock investment. If you stand before a judge and are subjected to an assets and liability test then yes everything boils down to your state of balance sheet and they have little regard for the trial balance as to how you arrived there. If you look at Irish law and protection of the family home they see a distinct difference between and investment in a property and provision on a home for a family. So when David is promoting this idea I really think he is pushing for families to strengthen the cohesiveness of our Irish society. Do we really want to go back to forcing people from their homes which will have a cost as they will need social housing.

      Finally the elephant is in the room is not the 20 billion or the 150 billion in total national debt. The elephant is who controls the core collatoral to create debt and exponentially drive it via fractional reserve banking founded on exponential mathematics. How about going to the site on the following link and coming back and giving me your comments
      http://www.csper.org/bio.html

      Hope to converse with you later.

    • paulmc

      I am a long time reader of these posts, but this is my first contribution, and I feel it is needed to defend the view of Paddyjones and others.

      The idea that DMcW puts forward, and so many posters on this site seem to agree to, of a mortgage amnesty, is wrong. I appreciate that given the nature of article writing, and limits that that brings with it, that DMcW could not go into specifics as to how it would operate, but I have a number of concerns, which I shall list below. That said yesterday, Fintan O Toole made a suggestion to reduce the maximum public salary to 100k a year, Taoiseach, President, judges, all the high earners till 2014. This is one of the best bit-part solutions to the current mess I have heard. It was a specific plan with a realistic timescale, and would appeal to common person in the street. I would appeal to DMcW, to elaborate on the mortgage amnesty in a similar way, as I see the following problems:

      Who qualifies for the amnesty: Everyone with a mortgage? Or would this amnesty be limited to people who purchased after 2002 (or another consensus level at which property prices are seen at the moment), or would it be another date? It could be argued that in some areas of the country that prices are at a level lower that at this date, or maybe even higher? And what about those who bought since the peak in 2007/2008, would they qualify? Think of this example, on one hand there is a person who bought in the mid 90’s, saw the equity grow considerably on his property, utilized this equity in the boom, by buying other properties with that equity, feeding the inflated prices, which have subsequently reduced in value due to the price decline, resulting in his main residence and investment properties being in negative equity. Would he qualify? On the other hand, think of the person who bought in 2009/10, and have seen a decrease in their value, not as significant as those who bought prior to 2007, but still saw it, should they receive the same amnesty as the others? How do we set dates or amounts as parameters to who qualifies? If it was set as March 2005 to June 2009, for example, what about those just weeks either side of this period? How do we quantify the amount of amnesty? Should it be 100% relief of the mortgage debt for everyone? What about where people have consolidated car loans, and credit card debt into their mortgage, are these to be included wholly in the amnesty? If it was 100% relief on purchases up to November 2010, then everyone would buy what was on the market now for any price, as they will then see that entire mortgage relieved. So do we lower the %, and the timescale on a case by case basis? How could we do this in a fair manner?

      Would the amount of amnesty apply equally to those with income and those on social welfare? If so, that would not provide a realistic advantage to those in work, as they are receiving the same treatment as those without an income. Also, on this, would those who have received large redundancies, or none at all receive at the same level of amnesty?

      Who would pay for this new debt that Ireland would be taking on? Or would the mortgage debts simply be wiped clean from the bank’s balance sheets? This write down would almost certainly result in bigger problems for the banks/lenders, and they would have to turn to the people (taxpayer) again for more assistance given that their debtors have reduced considerably? I hate to suggest the alternative that would be for the people to take on the debt again from the banks, the result of which as Paddyjones stated, would mean that those who saw the danger and kept their mouth out of the trough, listened to DMcW’s warnings from 2003 on, and would have to assist, not only the banks for their reckless lending, but also the mortgage owners for their reckless borrowing. I agree that we are a society, and cooperation is key, but an amnesty such as this could split the country between more wealthy property owners, and non property owning tax payers, further disintegrating the cohesion we need to move forward, the cohesion New Beginning, and Irish Recovery are trying to promote.

      The impact of unknown future events does not appear to have been considered by DMcW either. I appreciate that things are grave, but we have a chance to put things right, and this suggestion, would just perpetuate the economic problem. In 20 years time, the taxes then being paid by the current children of this country COULD be to fund this mortgage amnesty from 2010/2011, and would directly have kept property prices too high, possibly too high for them to buy, and we the pope’s children become the accidental millionaires of the next generation. DMcW, amongst others, has mentioned in numerous articles that the average house price, by economic logic, should still be lower that it currently is. Therefore an amnesty would, falsely, reassure the market ( which I know most people would want, but not the future generation), and continue to keep prices in this country artificially high. They need to fall more to be in line with reality, also by falling more, it would allow the youth of today the potential to own a property in the future.

      Another future consideration is based on the performance of the current mortgages versus their property value. If a mortgage holder has 20 years remaining on their mortgage in 2010, where they currently have negative equity of say 40%, and they receive an amnesty of any amount, who is to say that there will not be enough equity built up by 2030 through property price increases up to that time to eradicate the relief received in amnesty? The result of this scenario would be current mortgage holders potentially receiving a winfall, while those who do not qualify for the amnesty, do not. A mortgage is a long term loan, should we not wait till these mortgages start to mature, when the country is in better shape, to approach this problem. The current problem is not overall mortgage debt, it’s mortgage repayments. No one like evictions, but they are a fact of life in a capitalist society, and that is one that Ireland has unfortunately signed up to.

      One of the final points I would like to make on this topic relates to an estate agent who I spoke to in the summer. Her husband and herself, bought an investment property in Dublin for 1.2m in 2007, and earlier this year, she reckoned it was worth 700k. She put it quite plainly to me, in relation to the bank bailout, “But who will help me?”, and I asked “Had you made 500k on the transaction, would you offering that amount up now to help those in financial hardship?”, she said “Well, no”. And that for me is the essence of our problem. Some, not all, mortgage holders thought that they would get one up on their neighbour, and become millionaires by buying property, and selling it at extortionate price. It was wrong to bail out the banks, and it would be wrong to bail out the mortgage holders. And two wrong don’t make a right.

      Finally, we need to end this need for division in Ireland, between public sector and private, mortgage holders and non mortgage holders, Collins and Devalera. I welcome any criticism of what I have stated above. Again, I repeat, despite agreeing with DMcW on a lot of issues, I strongly disagree with the idea of a mortgage amnesty. I don’t have the answers, and apologize for not suggesting an alternative solution, but I hope that someone, maybe even one who posts and uses the ideas debated on this site does eventually, and I thank you all for your contributions.

      • Colin

        paulmc,

        That’s a good honest post. I would have agreed with you before. Agreeing with the article is challenging in the sense that it seems to counter natural justice.

        “The people who are shouting “unfair” and “moral hazard” are cutting off their nose to spite their face. By sacrificing their neighbours on the altar of “I told you so” they are ensuring their own demise, and more importantly, the demise of what is left of Ireland’s economy and, possibly, our social cohesion.”

        - This is the crucial part of the article. Think about it. The way I look at it is using a desert island analogy. Consider you’re shipwrecked, cast adrift, with only 1 other person who survived along with you, the captain – the man who caused the shipwreck. You’re determined to get rescued. Do you
        (a) Murder him out of resentment?
        (b) Divorce yourself from him completely and work by yourself on getting rescued?
        or
        (c) Put your differences behind you, use his skills and labour to fashion some kind of a vessel from the island’s resources and through working together manage to get back into an area you’re likely to get picked up and rescued?

        • Eireannach

          @colin

          You’ve failed to address paulmc’s main point – where do you draw the line between those who qualify for a mortgage amnesty, and those who do not?

          FWIW I think DMcW’s suggestion of a mortgage amnesty is unworkable, for the reasons paulmc lists above. I’ve been renting all my life and I’m 37. I don’t have any schadenfreude for those who did buy, who are in difficulty now. But as a nation, we are astonishingly cry-baby when we don’t get money for nothing at all, which is what property equity is. Like the woman paulmc mentions who wants a bailout because she’s 500K down, but would find the prospect of sharing 500K of property equity gains, if she had it, totally proposterous.

          • Colin

            Anyone who took out a first time buyer’s mortgage after May 1997, when Bertie Ahern took over the running of the country. Its likely house prices will fall below this level in the future.

    • shtove

      Ireland is bust. Plain and simple. Good article here on Naked Capitalism:

      http://www.nakedcapitalism.com/2010/11/the-irish-mess-iv.html#comments

      I criticised DMcW on this site a couple of years ago when he supported the bail out. Now he’s playing the evil Paul Krugman card, pretending that bad debts can be made good while money printing and government spending cover the cracks.

      The system needs to be cleared. Bad mortgages must be buried. Debtors should be able to seek bankruptcy much more easily.

      In sum, fcuk the banks and give honest people a chance.

  4. stiofanc02

    Some recent reading has shown that the old cliche “the more things change the more they stay the same” is relevent and fresh, as are Davids ideas, here is a sample.

    1.In the field of politics there is a most insistent demand for new leaders, a demand that indicates nothing less than an emergency.

    2.The banking business is undergoing a reform.

    3.Industry calls for new leaders. The future leader in industry, to endure, must regard himself as a quasi-public official whose duty it is to manage his trust in such a way that it will work hardship on no individual or group of individuals.

    4.The religous leader of the future will be forced to give more attention to the temporal needs of his followers, in the solution of their economic and personal problems of the present, and less attention to the dead past and the yet unborn future.

    5. In the proffesion of law,medicine,and education, a new brand of leadership, and to some extent , new leaders, will become a necessity.This is especially true in the field of education. The leader in that field must, in the future, find ways and means of teaching people how to apply the knowledge they receive in school. He must deal more with practice and less with theory.

    6. New leaders will be required in the field of journalism.
    Napolean Hill
    New York, New York Sept. 1937
    Note the date and you will see that history repeats itself.

  5. waverider

    Freezing mortgage payments sounds like a good plan. But repeating this mantra that we have to stimulate the economy through consumer spending no matter what, is exactly what got us here in the first place. You cannot build a stable economy at the expense of sound lending practice. The mortgage forgiveness suggestion reminds me of the way the government allowed hundreds of drivers to get driving licenses without taking the test! No doubt some of the indebted had very bad luck. But a good few of them were spending money like drunkards, and some continue to do so even though they’re in financial difficulty. No one I know went to Thailand, or bought an IPhone, or a home in Portugal or even had a regular sun holiday. But I live in Donegal, where the Celtic Tiger never made an appearance and the term working poor definitely applies. Why should people who barely scrape by on their wages pay EVEN MORE tax to pay for the good times of many of those now in debt.

    • TheFullRed

      Come on man, do you mean to tell me it is not possible to create a scheme which will grant relief, which IS in the COMMON good, while at the same time ensuring that people keep their eye on the ball with regard to their debts? What about a part buy on mortgages by the gov, which is married to the property and will be activated at some determined stage in the future? This is not rocket science, and will allow the whole country to breathe.
      Your plaintiff complaint that the working poor of little Ireland blah blah blah completely misses the point. Those same little people you so care about will be totally screwed if we dont prevent Ireland going the way of Argentina in the nineties. The majority of them wont be working at all then, and most assuredly will be hungry.
      There is such a bitterness of spirit here that you would have utter national calamity as long as nobody gets anything from anybody. Redundant thinking and will get us nowhere.

      • s1lverbullet

        it seems that we as a people sit back and take it when our masters throw 50bn away to the banks but when someone makes the suggestion that we help the little people who were scammed by the professionals then the country cries foul. WHAT A GREAT PEOPLE WE ARE

    • paddyjones

      DMcW is selling himself as some sort of robin hood, sure I bought a house but I would not want my neighbour to bail me out if I couldn’t repay the mortgage.
      The sorry truth is is that the Irish don’t like repaying debt. Government rolls over its sovereign debt and pays interest on interest on interest…. Developers just plainly refuse to repay. And those people in the high court are happy to get rid of the debt and start afresh.
      DMcW reminds me of Joe Higgins ( Socialist party )

      • Gege Le Beau

        Haha, come on now paddy, are you one of these people who calls Obama a socialist, come on now, be a good boy, tell daddy……

      • TheFullRed

        IT IS NOT ABOUT YOU Paddy Jones. IT IS NOT ABOUT INDIVIDUALS. Your analysis completely misses the point. We have to take all steps towards rescuing the Nation’s economy. If that includes draining the Shannon, then it must be done.
        Your point of view either stems from an inability to identify the problem, or from a real mean-spiritedness that would have you drag the entire Nation down to emphasise your moral righteousness. As I said before, redundant thinking will get us nowhere.
        Some form of debt relief, amongst many other interventions, will allow this Nation some breathing space, and who are you to interject that this is against your high moral principles? That it doesnt suit your moral standard? Your principles be damned! Get around to offering some creative solutions and leave the hand-wringing till we save the Goodship Ireland.

        • paddythepig

          You are wrong. The net change in the amount of debt paid by the people in this economy will be zero under David’s proposals. The only thing that will change is who will pay the debt.

          • TheFullRed

            The net amount of blood in the nation remains the same. We still have blood transfusions.
            If the hard-pressed middle-class have the prospect of even a temporary easing of their burdens, this will have a positive effect on spending, which will stimulate the Nation’s economy, which will in turn create some growth, which leads to improvement in the Nation.
            The alternative, as far as I can see, is that the middle classes are hit further by unemployment, spend even less, and ultimately pay anyway, as we have to further re-capitalise banks, who are hit by domestic defaulters. Vicious circle. Not talking about absolving debt, merely restructuring the loan-book in a steady and rational way.

          • Talking about blood, way back in famine times it was the final option to bleed a cow and drink the blood. Occasionally though.
            If too much blood was taken, cow dies, man dies, game over.
            Economics is simple really.

          • paddythepig

            What’s being implied here is that those who would be helped would go out and spend their extra money, and those from whom the money is being taken would not spend the money. I see no evidence for this.

            Another problem with this mentality is it is based on the premise that consumerism is the way to boost the economy. This is only really true in an economy with a high percentage of locally produced goods. In an economy like ours with a high percentage of imported goods, the majority of the extra spending goes abroad. The car scrappage scheme is an example of the futility of this line of thinking.

            I think we should call debt forgiveness for what it is. It is not for the benifit of the economy. It is for the benefit of the individuals who would benefit. Whether it is for the good of society is open to debate as well, for if you bring the concept of citizens bailing each other out to it’s logical extension, we could for example just as easily pay everybody the same money regardless of what they do, or don’t do. Would that be right?

            The moral hazard of debt forgiveness is enormous, so I would only favour it in very limited and careful circumstances.

            The ‘Robin Hood’ approach is not a runner in my book, though no doubt it makes David popular in some circles.

    • insider

      waverider you must be joking. Donegal was by no means left behind by the Tiger. It had a devestating impact ruining the country side with mansions and gearing the locals up with fancy cars and 4WDs. I have no doubt that there would be an element of working poor but I would say there’s a bigger element of working geared.

      It is also one of the most corrupt counties in the state with a rampant black market cash economy – the forgotten county may well play the victim but in so many ways it’s the victor.

      • waverider

        insider. the overwhelming majority of mansions and developments were built by developers from kildare and meath. sure some locals made a killing but there’s no evidence that any of those in my locality at least invested those sums in local business. any profits went on to making a further quick buck in overseas property markets. u make a great point about the black market economy. killibegs is a great example of a small town with almost no amenities despite the vast amounts of money pouring through the town for decades. sure the fishing is almost over now but local investment in alternative business was never a consideration for those with the funds. the wealthy are given tax breaks because everyone says they invest money in business. i’ve seen no evidence of that in my locality.

  6. In this article David writes the parable of ‘Prayer’ where the mantra is always ‘ ask and you shall receive’.

    We need to learn more about how to ask and become better at it.My hunch is that it is profitable and there will be plenty to eat afterwards .And dont forget what you receive is ‘tax free’.

    • You off to Kilkenny John?

      • I am in Nice/Cannes supporting Sarko from his base in Blvd Carnot ,Cannes.I expect to return sat week.Everybody here still have smiles and hugs , respect and culture.It just seems like paradise and normal in everyway.It is hard to be angry here as long a you have the patience to watch them hug each other before they recognise you eventually and decide to serve you in the shop.Slow Time , Slow Service , and Slow Food ( I did not mean snails).

        • MadaboutEire

          Napoleon was around Toulon (got the British out and made a name for himself) but he didn’t hang around, change comes from the centre, not the sleepy provinces, however, endearing. Slow, indeed.

  7. cautious-optimist

    I go along with the idea of a freeze on mortgage repayments or better still a 20-25% write down of the mortgage for those who bought their primary residence at the height of the boom. Note the emphasis on their primary residence. I would have some difficulty with a write down for those that speculated on the property market and bought up a property or two in a buy to rent scheme.
    It’s been said here before,the property sections of the IT and Indo have to take a major share of the blame for hyping the residential property market to the extent that people thought 220k for a single room apartment in Finglas was their only hope of ever owning their own place.

    Had we had any half decent enterprise culture in this country think what could have been achieved if a fraction of what was put into speculative housing had been invested in small business start ups instead.

  8. CitizenWhy

    Questions.

    Do you build a secure middle class through prudent savings and spending, or through accelerated savings fueled by borrowing?

    Can you have a prosperous, slow growth economy based on prudent savings and spending?

    Can you have a fast growth, secure society based on growing debt?

  9. Deco

    David – I know you are trying to help people. But this country is heading for bankruptcy. The nature of the debt predicament forces everything. As Joan Burton commented when this crisis started “we are in this recession…because we have no money”

    We need a serious rational analysis of what is wrong with us a society that we allowed this cathastrophe to happen. That is something that we are deliberately being encouraged to ignore. Everybody in public life is assuring us that the lifestyle is fine. It is somebody else’s fault.

    The government are blaming Lehmans, the opposition are blaming the government, the left are blaming Reagan, the right are blaming benchmarking. We are all blaming Ahern. IBEC and ICTU seem to have disappeared and have nothing to say except their members expect to not give one inch. And the media provide emotional coverage to prevent any cold introspection which might affect ‘our advertising sponsors’. On top of this we have a range of opportunists trying to make sure that a good crisis is not wasted for the purposes of pushing their own agendas.

    The fact is that the current mainstream cultural mores of Irish society are responsible for the current situation. Our behaviour generated this mess. Having a collection of boozers running the country is representative of the society we have become, and means that delusion is far more likely that decisiveness.

    • TheFullRed

      Deco, your point is articulate and well reasoned, but you are slightly off point. Sure, we need to analyse how we, the Nation, the patient, ended up in the Operating Theatre. The surgeon does not start asking about the circumstances of the car crash, who’s fault was it, are cars ultimately the problem. Rather, he concentrates on saving the life of his patient, and leaves the blame game to others.
      I would put it that DMcW’s point is that this would be effective as economic surgery. The time for analysis of the body politic is not now.

      • Deco

        The problem concerning the repayments is the private sector employment market. That is the root cause of our mortgage problem. People on the dole or with one wage instead of two trying to pay the same bills as they were paying in 2006.

        I have questionned many policies pursued by this government with respect to the private sector.
        i) has the government got an industrial strategy ? It seem that the GP are pushing up the price of electricity, plus various other stealth taxes that make manufacturing expensive
        ii) why are the local authorities continuing to screw the retail sector for rates ? Every town in Ireland is seeing retail closures. Retailing empoyment has collapsed. Retail is responding to the crisis by letting staff go, and only employing family members.
        iii) We have many empty hotels, but we tax people to visit.

        Every single ‘jobs strategy’ amounts to politicians shoving money borrowed from the future into construction projects for Honest Tom and his mates.

        We actually have a system constructed that is anti-private sector jobs market. And only Constantin Gurdgiev is saying anything about it, and the media are completely ignoring him.

        • TheFullRed

          I am all for firing every single county counsel, lining up FF Parliamentary Party and forcing them to sign an agreement that they, nor any of their families will ever run for public office again.
          Rates are insane, so fuck out the County Councillors. They are no use to anybody.
          I think government as executive needs to be suspended for the time being and the trajectory of the Nation placed in the hands of people who know about what they are talking.

          • Deco

            the ‘leadership’ is incompetent to the point that no leadership at al would deliver better results.

            In fact if they failed to save Anglo, INBS and never bothered with the hamfisted effort to limit the supply onto the market that is NAMA, things would be better. The boyos with their deposits in Anglo on the IoM would be finished. But the rest of us would have survived.

            The behaviour of the local authorities gives us a clear indication of what the non-FF parties will be like in government. They will probably be just as useless, and just as much driven by the need to get their snouts into the trough and their relatives into state jobs, along with party activists.

          • Gege Le Beau

            @ TheFullRed – could not agree more with you on your FF comment, but please include former PDs, we need a de-fianna-fail-isation policy for the entire country.

    • Deco

      The problem I see it is that we do not think as a society anymore. In fact we haven’t for decades. This is an insider-outsider based structure. There is 6 billion on deposit in the Anglo Branch in the Isle of Man, and it says tons about the way Irish society operates. The group think is used to get people spending money on junk they do not need.

      There simply is too much selfish behaviour, too much deceit, and too much dishonesty in Ireland for this to work. There has been no reform. As we seen from the Gilmores everybody is at it. We need a complete cleanout of the leadership otherwise the people will not buy into it.

      • TheFullRed

        Just because you are of leftist persuasion doesnt mean you shouldnt personally benefit from the fluctuations of the property market. In fact, you would be frankly stupid not too. My family waited till we got the highest price for a quarter acre, it was rezoned, we knew it would be. And we would consider ourselves to be quite socialist in our outlook.
        So what if the Gilmore’s made hay while the sun shone? They have aright to hold property as much as any citizen, and to sell it as they choose.
        This does not deflect from their core principles, that society needs to be reformed along more egalitarian lines. A red herring entirely…

    • Ah Begod, The Deco at his\ Her finest.

  10. BrianC

    The day the Irish Government divested itself of its land banks is the day they sold out the Irish citizen. They tried to soften their remissful irresponsbile behaviour by forcing the responsibility of social housing onto the private sector. Virtually everything Irish Government does and say is innane. It is an awful pity that Frank Hall is not around to hold up the Hall Pictorial mirror so that they can truly see themselves.

    Yes the Irish Government has a duty to assist those in our ‘society’ who are in trouble with their mortgages. It is their duty because they created the artificial inflated property housing prices in the market and loosening of capital gains tax further fueling property demand along with pursuing tax breaks in property development facilitating the maxim of creating personal wealth on the money of others.

    The skill will be finding the right mechanism where all in society can regard it as equitable. On the other hand those in mortgage distriss can equally point out if legitimate to bail out the banks then it should be equally so for the ‘private home owner’.

    But nothing will change because politicians are full of inertia stuck in the middle status quo, drones with no imaginative ability save when making up their expenses and protecting their positions. Fintan O’Toole is dead right in what he says change will only be delivered from the bottom up and we need to support his endeavour to try and achieve this change.

    It is very disheartening to have listen to RTE parcel unemployment figures in a manner where they are trying to sell the idea of improvement when clearly the decrease in unemployment is more to do with factors of emigration students going back to education etc, rather than an increase in jobs. The editors in RTE should be ashamed of themselves then maybe not because they are pure stupid.

    In the last post how come some foreign based journalist can disclose the identity of the Anglo Irish bond holders. It says an awful lot for the level of investigative journalism in Ireland or may be there was not enough cocaine stamped over the issue.

    Yes most definitely we need a new beginning and no real point in trying to deliver it in front of a judge. The judicial system in Ireland is not about presiding over the law to deliver justice it is about administering law in the favour of those who can make money out of it – the four courts is just a money making machine filled with over paid barristers save the few who have to scratch out a living before the enter the priviliged fold. So the real new beginning is protecting the Irish Citizen and those under duress with private dwelling domestic mortgages deserve assistance but that will only come from the bottom up. After all as per the Irish Times today quoting Roy Kean “stupidity is doing the same things and expecting and expecting different results” which is a succinct sum up of what we have in the Dail. And I would add to that just because you go to university/ college and get a degree is no proof of your intelligence the only thing it proves is that you had a good memory and were able to pass exams the real proof of intelligence is being able to apply you knowledge in the real world and great intelligence is being able to solve problems which is definitely not a strength of any member in the Dail. And that aptly details the two Brians. They need replacement all of them because they are contaminated and the human intellect software pack to debug and remove the virus is just not available.

    Good luck with the idea but I doubt there will be any takers in the Dail and the Financial Regulator Mr. Elderfield already torpedoed such an idea if I am not mistaken.

    • Deco

      { today quoting Roy Kean “stupidity is doing the same things and expecting and expecting different results” which is a succinct sum up of what we have in the Dail. }

      Correct. Dithering is not a strategy, and repeated PR stunts is not solving the underlying problem.

    • Gege Le Beau

      //It is very disheartening to have listen to RTE parcel unemployment figures in a manner where they are trying to sell the idea of improvement when clearly the decrease in unemployment is more to do with factors of emigration students going back to education etc, rather than an increase in jobs. The editors in RTE should be ashamed of themselves//

      Spot on. They gave E&Y the oxygen of publicity with 300 intern positions (handy feel good story for the gov) but squeezed in ‘but weren’t they the auditors at Anglo’…thought it was a bit early for Christmans panto……nauseating.

      • Deco

        Two factors influencing the latest live register figures.

        i) summer is starting in the Southern Hemisphere. Young people are getting on the plane and going to Au NZ.

        ii) record numbers in third level.

        I am also slightly sceptical of the E&Y announcement. I suspect that a lot of it is based on increased bankruptcy related work, resolution of onsolvencies, and NAMA. Let’s not forget the E&Y connection to Anglo and INBS. (note to Mama Harney – people do not forget after a few months).

        • Gege Le Beau

          Government is desperation for a publicity bailout, RTE~Pravda was given the ball and they ran with it. Probably rationalised it as a need for a ‘feel good story’ or else help with the licence fee.

          455,000 unemployed, real number is close to 500,000 and people are wetting their pants practically over a few hundred token positions. Emigration as you say…illustrates just how broken an economic model the Paper Tiger was. If McWilliams does nothing else, he stood up 5-6 years ago and said ‘this is nuts’.

          • Deco

            It was a debt binge, based on easy credit. Asset price mania and low interest rates and crowd behaviour.

            There is a term for it – “crack up boom”.

            A crack up boom is always followed by a “crack up bust”.

  11. waverider

    I feel strongly that much of the mess can be traced directly to the supply side/”voo doo” economic theories made popular in the US twenty years ago during Reagan’s tenure. This insistence on increasing consumer spending, credit ratings be damned surfaced around this time. This core right wing mantra has gained unbelievable credibility in the politcal and economic spheres regardless of political persuasion in every developed country. Well it turned out to be the quick fix, suprisingly spearheaded by the staid Alan Greenspan, whose gravitas should have been to be utterly transparent when one considers his affiliation with that total crackpot Ayn Rand. No wonder we’re in this mess. It’s just a miracle it didn’t happen sooner. But then the real test of capitalism came. As an American, it’s almost bred in the bone, capitalism has an almost Darwinian feel to it, it’s about survival of the fittest. So when the banks failed because of their poor business practice, they were all rescued. I think it’s called socialism for companies. You can’t have it both ways.

  12. zohan

    “People made a mistake when they bought during the boom. They presumed that their well-paid jobs would last and that house prices would rise forever. They got caught ”
    Correct they made a big mistake,did people not think “what if I lose my job?” ,will I be able to get by on one wage or the dole?”…..Exactly it was greed and sheer, keeping up with the neighbours mentality,But , I blame the government they allowed this folly to grow .EVERY MEMBER of this current government should be marched out of the Dail and handed a P45 and stripped of all,pensions ,golden handshakes and any priveliges because they truly Ruined this country.ALL Civil servants should then have their salaries cut in half , but guess what , these are all the celtic tiger landlords ,and would hold the rest of us to ransome,
    Cut Cut Cut and only then can we begin to create a proper society..

    • TheFullRed

      Well said. It was/is the duty of government to guide the Nation through good times and bad. All FF ever wanted to do was keep getting re-elected.

      • Gege Le Beau

        A Nigerian colleague told me his government’s has a particular emergency reserve of 15-20 billion.

        Our fund on the other hand was about 15-20 euro, which was spent on teas and coffees and a taxi for Bertie to get him home after he wished his best to the soldiers of destiny who are currently getting slaughtered on the fields of public opinion.

    • Eireannach

      @Zohan

      How can you blame the government for a “keeping up with the Jones” mentality between members of our society?

      Deco is right – the problem is the foolish nonsense of the people. The politicians the people elect, repeatedly, and the policies the people accept, are all refelctions on the values and norms of the people.

      • TheFullRed

        It is the responsibility of Government to guide the Nation, to implement policy and strategic direction that guide the people in their hopes and aspirations. This government reneged on its responsibility and gave all-comers whatever they wanted, as they knew this would ensure continuing re-election. They utterly disregarded the principles of economic frugality, and the people cannot be blamed one bit for this. It is not the job of the people to set the tone of the country, that is why politicians are elected and well-paid. They took this country to the abyss, and they are to blame. The people were told the abyss no longer even existed. The government were supposed to be monitoring and guiding, and failed in their sworn duty.

  13. HBC

    I am sure there is a much deeper strategy that is behind this debt amnesty that I am just not fully understanding. There are over 400 thousand people out of work and supposedly approx 25% of those are tradesmen. If there is an amnesty how long is it for..one year…three years….five years? Do the government have a strategy to get these trades people and the other 300 thousand back to work? Maybe people will…spend …spend …spend and get new kitchens, bathrooms and walls built to their properties to increase the value…..and the rest can go into the knowledge economy…or the green economy…
    The idea of the 25% mortgage discount on existing primary homes….what happens if you took the hit and sold up at a drop already? Do we backdate the amnesty and give people cash back? Do I have to sell my his and her BWM, or my big jeep, or can I get a discount and the taxpayer will pay? My BOI and AIB shares that I bought at the bargain price of 8 or 10 Euro…..should I get cash back because they did not go up?
    I would be one of the many disgruntled taxpayers with this proposed strategy as there is still nobody locked up for the existing crimes and the old network is still in power. Maybe the best thing is to let it all collapse….banks…the country ….the government. Does anyone believe an overpaid embarrassment to Ireland in the form of Cowen and his cronies are going to deliver the country….in the next one…..three….five years…..

    • TheFullRed

      Youre right. We should just give up.

      • HBC

        I am not saying give up. I am saying we need some new fresh and clean political parties…we need to clean out the existing crap and start over. The catalyst for such a thing to happen might be to let everything hit rock bottom and not delay it be offering band-aids.

        • TheFullRed

          This quasi revolution may or may not happen. In the meantime, we should concentrate on what steps are beneficial in the greatest possible way, and call for whoever wields the power to implement them.
          Whoever likes can form a party, whoever likes can join. Doesnt matter in the short term, and in the short term, we need action, we need plans, we need innovations.

          • HBC

            I agree plans and action are required. I do not think there is a short term solution as too many things need to change. The best that can be done is to patch the gaping wounds that the government have already inflicted on the country with NAMA and the banks. That will stop the pain temporarily, it will not resolve any of the real issues. I agree there should be some form of governed amnesty for struggling families, but there also has to be political reform. The conditions are right for this in the current climate and it is badly needed. If a group like Newbeginning can be formed by like minded people then why not a new political party that actual represents the people of Ireland?

  14. John Q. Public

    Look at the contrast between being a member of the EU and being a country with it’s own central bank: http://www.irishtimes.com/newspaper/breaking/2010/1103/breaking11.html
    Not quite the same thing over here when we are being charged 7% to borrow money. Anybody think we should leave this EU? Instead of NAMA spending over €3 Billion over the next few years on advice over toxic assets, spend it on advice on how to run the country. That kind of money could buy thousands of the best brains in the world, besides, the IMF might have to do it anyway! Just a thought.

    • TheFullRed

      Certainly worth debate. The Reichsfuhrer doesnt seem to think that we should have any compensation for not being able to control currency or exchange rates, and despite the promises of Lisbon, EU policy seems to be exclusively aimed at the needs of Germany/France.

    • Julia

      John, Sorry, why should advice have to cost E3 billion? You are absolutely right. E3 billion would sort out a few problems for the citizens of the country, if only for a while. When I think of that Anglo list of bond holders and then remember Brian Lenihan trying to frighten us all, seemingly successfully, by telling us that he was protecting our pensions, and that Irish credit unions would suffer if we didn’t bail them out, I want to be sick. The League of Credit Unions pointed out at the time that a total of 1% of their investments are in bonds. He must have been completely intimidated by the EU people he spoke to. Naturally the Germans, French etc. wanted to look after their own billionaires and investments and are achieving their aim, because our lot are in awe of them and also probably afraid of them.

      I’m not sure that there is a lot of solidarity in this European Union. If we end up using the Solidarity Fund we’ll be paying through the nose for it forever. The wealthy billionaires of Europe will profit no matter what.

      Meanwhile we will all be scrabbling around squabbling with each other over 1% VAT or 5% reduction in social welfare or 1000 thousand nurses gone from the west of Ireland, all things which will impact our lives in real ways and not for the good. Town councils will continue to charge ridiculous levies to shop owners holding on by the skin of their teeth not realizing that they are biting their noses to spite their faces.

      Divide and conquer, a tried and tested method of keeping the masses down. Still, the barristers will do well, A&L Goodbody will do well, the CEO’s will do well, advisers ARE doing well – there’s always a silver lining.

      Speaking as a PAYE worker I say screw the system, because it will certainly screw you.

      And another thing, roll on the black economy. It’s the only way many people got through the 80s.

      • Maybe an organised taxation strike by SME’s and self employed might help bring some pressure to bear on the situation.

        • Zaphod

          That could be a start, but with no income…… a nationwide strike, peaceful like ghandi would do but in our way, stay at home…don’t take part, no work…nothing, spend some time with the family, stock up on a few supplies and refuse to take part until the government resigns, along with all bank directors involved pre 2009.

    • mrlennyman

      It’s no surprise that all this is happening – The problem stems from the time we joined the Euro and created access to billions of euro worth of credit. We are in a system similar to the FED in the US in certain respects. We cannot control our money supply. We have no control over interest rates and we are at the behest of the German chancellor, who in turn is at the behest of the Euro Cental bank. Whether we give some relief to the peopel who are struggling is almost immaterial. It would be a good idea. It might save some peoples lives. But the fundamental problem is still there – the way our society, government and banking system is set up is flawed and there has been nothing to to address this. Davis makes some great suggestions, but ultimately the whole thing needs to crash and burn before rebuilding. Get out of the EU monetary system. Elect people with vision and brains to power and start anew. Living an existence where childrens children are going to be enslaved to debt is no way for Irish to live. Im glad I moved to Oz.

    • crossroads

      Anyone know in what currency our mortgages and bank deposits would be denominated if we ended up leaving the Euro and devaluing our currency?

      Would citizens end up with devalued ‘punt’ bank deposits while being left with even more onerous ‘euro’ mortgage debt?

      (Hmmm, just realised how apt our currency was named for a nation of gamblers and chancers. “Who’ll have a punt on a euro exit in 2011?)

    • shtove

      I’m pretty sure the advice you’re suggesting would come from … Goldman Sachs. They did a great job helping Greece to deceive everyone. One of their brightest was Basil Geoghegan, a TCD law graduate who advised the UK government on the nationalisation of Northern Rock and was invited by Cowen to devise a plan to save the Irish banks and fleece the taxpayer.

      Do you really want to pay for that?

  15. wills

    David.

    I completely agree with your contention on Newstalk interview (link on D’s site) ;

    ‘the transference of wealth from popes children to baby boomers must be reversed back.’

    Brilliant and simple and the solution point blank

  16. Red, good to see another Eng about the place. Less of the dialectic nonsense, more of the pragmatic.

  17. wills

    David.

    I reckon its a very straightforward solution.

    The banks who made the loans are been bailed out of their sour loans by NAMA.

    Purely on that basis alone the borrower can be bailed out too through their equivalent accord to the accord NAMA came into life on.

  18. wills

    David.

    NAMA was a debt amnesty for the banks.

    x will be the debt amnesty for the dopes who took on bonkers mortgages.

    • TheFullRed

      The “dopes who took on the bonkers mortgages” are not the issue. You seem to be saying that we should not take certain actions which will benefit the economy if it means some people get assistance. That is not a rational or even half-thought-out view point. You should not be concerned with individual gain or loss, but with the overall picture. Spitefulness and pathetic begrudgery have no part to play in serious debate.
      If you think we should as a Nation seek to get our pound of flesh from those mortgage holders, then you are inflicting further damage on this Nation’s economy. Fools who reason along these lines should be told in no uncertain terms that their opinions are not worthy of being heard.

  19. wills

    David.

    Isn’t it fascinating though how it is that the baby boomers own now such a massive % of the wealth of the economy.

    In times gone by this general severe imbalance of prosperity precipitated a revolution.

    • Spot on Wills, though the demographics here differ, the bulge here starts at the Xers. No, it is because the equivalent of the boomers here wanted to ape their counterparts in the other anglo-saxon economies that this has all come to pass. And they won’t give it up without a fight. Logan’s Run anyone?

      • wills

        Thriftcriminal I wouldn’t be surprised if we took a trip back in time and discovered civil conflict within countries stemming from the insider / feudal class refusing to redistribute back into the community the wealth they confiscated through skullduggery.

        The feudal class over centuries took on many disguises and the modern times we are now in the feudal class confiscating the wealth of the economy are the baby boomers.

        Time for these old codgers and spoofers to divy up their swag and give it all back into the system.

        • TheFullRed

          That’ll be a hard sell. There is not much social conscience on display in Ireland these days, and people will naturally defend their own little patch.

  20. Colin

    Twelve months ago I would have disagreed with David since I didn’t buy property. However, I now agree because I can only now sympathise with the poor misfortunates who believed the Bertie bullshit. The chattering classes no longer discuss house prices at their dinner parties. The smug look of a first time buyer has been replaced with embarrassment. This is the penance. Its suddenly cool to say you don’t own property – the shame has been liquidated. This is the real moment of change.

    However, I know many young couples who own more than 1 property, and I’d like to see help only given to those who own only 1 property, meaning secondary housing will have to be sold on, even at a loss before they can qualify for help.

    • wills

      Agree with Colin on that.

    • crossroads

      Re.Colin’s, “I’d like to see help only given to those who own only 1 property, meaning secondary housing will have to be sold on, even at a loss before they can qualify for help.”

      I agree that some permutation of that would have to be built into the criteria of any scheme.

      Many people increased the mortgage on their principal residence, releasing the equity to go beyond simply wanting a roof over their head and jumping into the frothy market as property investors.

  21. StephenKenny

    In the classical crash model the next stop is political extremism. Just a reminder.

    I don’t believe that this idea will work as the money will not get spent/invested in productive areas. Sure, there will be a retail boom for a while, and China, Japan, and Germany will do very nicely. Tax revenues will rise and where will that money go?

    Just as the main problem with the US Healthcare system is nothing to do with healthcare (it’s a massive legal problem, and so can only be fixed with tort reform), debt is not a financial problem, it’s a legal problem. Bring them into line with US and UK, and underwater property owners have a much stronger position.

    We’ve had 10-15 years of consumers showing us what they’re made of, and capable of, and now we’re suggesting just more of the same.

    Back to Sputnik ……..

  22. Just a thought on NAMA since it owns most of the mortgaged property built in the last three years of the booooom.
    It was deemed at the time of inception not to be a money bill(definition here; http://www.taoiseach.gov.ie/upload/static/256.htm
    - to wit “Article 22

    1. 1° A Money Bill means a Bill which contains only provisions dealing with all or any of the following matters, namely, the imposition, repeal, remission, alteration or regulation of taxation; the imposition for the payment of debt or other financial purposes of charges on public moneys or the variation or repeal of any such charges; supply; the appropriation, receipt, custody, issue or audit of accounts of public money; the raising or guarantee of any loan or the repayment thereof; matters subordinate and incidental to these matters or any of them.”

    Now at the time of it’s noble inception it was crafted to achieve one set of deliverables, yet those deliverables and NAMAs standard operating procedures have been changed substantially.

    Does it now, in its present reinvention, Madonnaesque, fulfil the above Constitutional description and if so, is NAMA itself an unconstitutional entity.

    Discuss. Because debt amnesty, forgiveness or the like surely cannot be administered by an illegal State structure?

  23. murray

    David,
    I agree with you comments,
    We need solidarity among us all.
    This is our hour of need and the
    only way of getting out of it is
    by helping and forgiving thy neighbour
    (But not those Fianna Fail BASTARDS!)

    My friends have been passing this
    around the office today.

    http://www.youtube.com/watch?v=-REt8kCjCRo

    Sad day for Ireland,
    Masked men with dogs and sticks
    beating our young into the ground
    Fascism in all its glory.

    At least, I now know that Fianna Fail are finished!
    It all over for you Ahern, Cowen & Lenihan.
    May you rot in hell (and prison!)

  24. Alan42

    I really don’t get this . There is billions going into Anglo on a one way ticket . What is the figure again ? 34 Billion or something ? There are bankers walking away with massive payouts and pensions from failed and bust businesses .
    You can’t even count the number of pensions ex Ministers and TD’s have . They lose their seat and they get the consolation prize of a seat in the Seanad . The Seanad does absolutly nothing and yet costs a fortune .

    Yet the only time I hear of ‘ Moral Hazard ‘ is when the subject of personal debt comes up . To have any chance of a recovery you need people spending money .

    • ladygee2

      At last there’s somebody out there with a small grain of sense! As I’ve read down through all of the previous comments in regard to David’s article I’ve become more and more convinced as to why this country is in the mess it’s now in. Is there anybody out there with even the smallest grain of common sense? Well, is there??? The reason I ask is that ‘common sense’ has been sadly lacking in this country for the past 8 to 10 years.In fact ‘common sense’ has been sadly lacking since the foundation of the State.

      My friends, the day of the ‘wink, wink, nudge ,nudge’ style of politics are long gone and the only reason why it went on for so long was simply down to the fact that the Irish electorate hadn’t the ‘cop-on’ to think before they acted when it came to putting their 1′s, 2′s and 3′s etc on their ballot papers. Fianna Fail and their ‘buddies’ in the business community are the main reason as to why the country is in the state it’s in at the moment. Those ‘gobshites’ in Fianna Fail along with those fucking idiots in the Green Party would never have gotten into power if the Irish electorate ‘thought before they leapt’ back in 2007. Yes, the Irish electorate are the one’s at fault for voting the way they did back then! I’m one of the many thousands of voters who didn’t vote for them and we’re the ones along with those who did vote for them who have been suffering the electorates folly. The sooner that shower of idiots are voted out of office the better it will be for this country and it’s citizens.

    • MadaboutEire

      Irish Times 04.11.2010

      McDaid to get over €250,000 in first year

      “Dr. Jim McDaid, will receive more than €250,000 from the public purse over the next 12 months and will be entitled to a pension of €75,000 [notice the word 'entitled] a year after that.

      ….he will be entitled to an immediate tax free termination lump sum, followed by 12 monthly termination payments and then a tax free lump sum of 1.5 times his TD’s salary before his half salary pension kicks in.

      A TD with McDaid’s service is entitled to an immediate tax-free termination lump sum of €17,763.

      After that the former TD can draw down 12 monthly termination payments. For the first six months they will come to 75% of salary and for the nex six months 50% of salary will be paid.

      The total in termination payments will come to about €67,000 over the 12 months and is taxable like a normal salary.

      Once the termination payments are finished McDaid will be entitled to draw down his tax-free pension lump sum of 1.5 times his salary which will come to about €160,000.

      After that he will entitled to draw a pension of half a TDs salary, which comes to €53,000 a year. He will also have his ministerial pension of €22,487, which he has been drawing since he lost office as a minister.

      Last April McDaid refused to give up his ministerial pension when almost all of the TDs entitled to such payments gave up. McDaid said at the time that he did not believe he had a particular entitlement to these payments but argued that great harm would be done to democracy if media presure resulted in politics becoming the reserve of the wealthy………”

      • TheFullRed

        Infuriating, but irrelevant to this current exigent.

        • MadaboutEire

          Hardly irrelevant TheFullRed – symptomatic, illustrative.

          One easily dismisses at one’s peril.

          • TheFullRed

            It is entirely irrelevant as to how we will jumpstart the country. The funds required to service such payments do not amount to a drop in the ocean. The question on this instance is how large scale private debt should be restructured to engender a turn-around in the economy.

          • Gege Le Beau

            @ TheFullRed – can’t jump start a country that was once a lada economy with mercedes like pretensions, a would be onboard computer system that requires broadband to get it going, a mechanic who was not educated in a prefabritcated building, a driver with a sense of purpose and confidence, a honest passenger worth transporting and a destination worth reaching.

          • TheFullRed

            Gege, you have spent an entire paragraph below talking about what CAN’T be done… What is the point in engaging in such negative affirmation? It is entirely pointless, and the metaphors you use, while witty, dont really fulfill their purpose (ie to illustrate a difficult point).
            What in the hell is this Mercedes/Lada claptrap??? We as a Nation have to address 1) Where the major issues are?
            2) What changes would bring the . most benefit to the Nation?
            3) How we are to effect these . changes?
            What DMcW has done in this exchange is to focus on point 3. What you are going on about below is really exasperating, because it is so not pertinent to any discussion and only serves to undermine any confidence left in those who read it. Give opinion by all means, but leave out the jaded cynicism. No good for no body.

          • Gege Le Beau

            The point I was trying to illustrate (given your foundness for metaphors like blood transfussions, and getting engines started) is that you talk about tinkering under the bonnet, I talk about radical overhaul of the entire system, now is the time for a social and political transformation not status quo politics.

      • Deco

        The last time I heard about this nonsense, was when the Ditherer got a quarter of a million as a payout for his resignation. And PD Liz O’Donnell got 180 grand.

        This might have been tax-free. A sort of a redundo package for politicians who were on the gravy train.

        We need to have an upper limit of the size of this sort of ‘golden handshake’. The taxpayers have been robbed enough already.

        • TheFullRed

          If they were to receive nothing from this moment forward, it would do nothing to remedy our situation. These payments, as infuriating as they are, are trifles in comparison to what we need to do.

          • Deco

            Oh, that’s great. It doesn’t matter. Yeah, these are only “trifles”. Yeah let’s not worry about it.

  25. george

    David debt forgiveness, very well said!!!

    Although I wish it so, I think total debt forgiveness is going to be next to impossible, but given the fact that the Government pumped billion into Banks to save them, the least Government can do in behalf of the people whom they say represent is to demand from Financial Institutions that the Home mortgages be readjusted to the actual value of property, lets say for argument sake 50% less.

    Yesterday in “Ghost Land” the program that was shown in RTE many dramatic cases were highlighted about it. And a judge has to suspend court procedures because she couldn’t cope with the amount of repossession cases she has to deal with.
    http://www.rte.ie/player/#v=1083950

    If nothing is done all those people are going to go back to the State for some sort of assistance and in economic terms is going to be even more costly. And the law is such that even if you give back the keys of your home to the Banks, you still owe to them the original capital, you never break the chains around your neck, and you are still a slave for the rest of your live, and probably the Banks will become the biggest landowners in the land.
    Democracy, freedom, republicanism??? What a joke!!!

    • george

      I would like to add that David’s idea to freeze mortgage’s monthly repayments for a year or two is an excellent idea, because even if the repayments are reduce to the actual value of property some people has no money at all.
      And I take my hat off to the people of “new beginning” !!!

      • george

        Also I would like to add that family homes that were taken from people in recent times should be returned to them so justice applies to all.

    • Emigrant lass

      @ George,

      Well said, I totally agree with you. I do believe that Irish mortgage holders need some sort of relief but believe that the present value of the property should be taken into account when doing this. My fiancee and I were one of those who stupidly bought in 2007, not because we wanted to to make a quick buck but we wanted a home. We were sick of renting with others and did not see the point in paying 800 eur in rent a month for a small appartment. So we took the plunge and bought a townhouse with a mortgage of 285,000 eur in a well sought after estate. We both had good jobs at the time but unfortunately my partner was in the construction industry. We always thought that if we worked hard for a few years we could sell the property and build, not caring if we sold it for the same price or a little under! We knew that we were paying our own rent instead of another landlords who probably had 2 or 3 houses on the go!So when things started getting hairy in the Republic we packed our suitcases and left. Firstly for the mortgage repayments and secondly for my partners sanity!
      After 3 years of paying hefty monthly repayments we still owe 276,000 to the bank. I’m just frightened to ask how much the property is worth now but I have done my calculations! So yes, I’m complaining about having to repay this huge amount but only because we were stupid enough to think house prices would stay the same or go up.
      We are in Australia since Jan 09 but not by choice. We are here working our asses off! Yes its a fantastic country but we are missing out on family life and children growing up. I think we are doing the right thing though because we are of no cost to the state from here i.e looking for mortgage assistance or job welfare! We are sending home the dollar too which is a good contribution.
      I certainly don’t have the answer as to whether the people should get some sort of debt forgiveness. I’m only glad that we had another choice to leave. I just feel sorry for the ones who can’t! – The ones who settled at home with a couple of kids etc. What suitcase can they pack?? Only for a wknd away in a rip off Irish hotel (probably ownded by NAMA)once the have the bills paid.
      Its all gone pear shaped! Someone please tell me how Brian Cowen is getting away with not having red paint thrown at him too? Or how any chief bank executive hasn’t been shot? I reckon granades are the only job for him and the rest of the fuckers!

  26. CitizenWhy

    All problems come back to a coddled, mismanaged, and politically protected Irish banking system. Ireland needs t look at what worked and did not work in Sweden, especially making it clear that bank shareholders and bond holders would not a government bailout at the same time that depositors would get a guarantee of getting their money back. In effect government protected labor and the middle class, not Capital (corporations and their owners).

    Learn more about the way Sweden disciplined their banks into prudent and effective management without taking on responsibility for the banks’ irresponsible risks: http://aiwauca.notlong.com

    To sober up the Irish bank they should be compelled to buy back any primary dwellings they financed at 85% of the original purchase price or work out a deal with the mortgage holder that would keep the mortgage holder in the house and making payments.

  27. Deco

    Quangoes’R'us. The great thing about having so many quangoes is that your relatives and pals can always be assured of a job….

    http://www.independent.ie/national-news/cowens-brother-lands-dogs-job-2406939.html

    The Taoiseach is starting to behave like Michael D. Higgins, when Higgins realised that he would no longer be minister and appointed three dozen acquaintances to state jobs in his final two weeks.

  28. coldblow

    Henry Fonda in Twelve Angry Men trying to win over the jury. He’s convinced some of them but the hard cases are still acting tough. “Gimme a break, will ya? The kid’s as guilty as hell…”

  29. idij

    How about just allowing them to default if they turn over the house? (they can rent like the rest of us).

    Then NAMA puts all such houses, and all the other ones they own up for immediate public auction, so we reach a true bottom of the market in no time flat.

    • michaelcoughlan

      Hi idij,

      Your point about auctioning repossessed houses may be fine in theory but I would only agree to so when the credit markets are functioning normally. We don’t have banks we have zombie institutions. If the banks can’t lend the price you will get for any auctioned house will only be the equivalent of a couple of week’s wages.

    • crossroads

      RE. idij’s: “How about just allowing them to default if they turn over the house? (they can rent like the rest of us).”

      At least it would give the people a fresh start.

      One of the biggest issues with Irish Mortgage Debt is that it is tied to the individual and not the property so, after the bank respossess a house and dispose of it for a paltry sum they can then pursue the one-time house-owner for the balance of the debt and that person is effectively ruined.

      Other countries have non-recourse mortgages which are tied to the property and if the bank repossess the property they have no further call upon the one-time house-owner.

      Whether we should allow people to walk away completely unencumbered is a debate but I think we need to move to some form of burden sharing by the banks (and yes I know that this currently implies by the taxpayer).

      There may be legal obstacles to making mortgage contracts non-recourse retrospectively but we’ve seen the unthinkable pushed through many times over the past couple of years.

  30. paulmcd

    IRONY OF IRONIES

    Quote from today’s Indo

    Mr Bruton backed Finance Minister Brian Lenihan’s insistence that Ireland will repay its debt.

    “If this generation fails to repay its debts it would be a betrayal of the history of the country since the Act of Union in 1801,” Mr (John) Bruton said.

    John Bruton, former FG Taoiseach, must be thinking of the corn and wheat which was being exported from Ireland, during the Great Famine, to pay the debts of absentee landlords.

    Lord Rackrent would agree with you Mr Bruton.

    Mr Elderfield, this is another example of why we need clearer guidelines on disclosure of special interest by high-profile spokespeople who make these kind of pronouncements.

    • coldblow

      Revealing quote. Certainly there has been continuity in history for at least the past two centuries, certainly economically, which could be qualified by the following adjectives, to name some of the milder ones: squalid, callous and deceitful. A property holders’ republic, but without the institutional and social ecology that allowed this to work in western Europe and elsewhere. I wonder would he favour the reintroduction of a property qualification for the franchise to return us to a pre 1864 or 1832 condition, with rotten boroughs and the rest? A golden age (for some). They might yet have to do this if people insist on sticking around and ignoring the incentives to emigrate. Mind you, maybe it wouldn’t be a bad idea to return to the open hustings, let people defend their vote publicly(?) I’m sure Bruton’s a decent man, but that’s not the point. They talk about saving the nation, but for who?

    • BrianC

      Someone ought to hit Lenihan and Bruton over the head with an iron bar to try and knock some sense into their thick heads.

      But can anyone really take John Bruton with any degree of seriousness. What has Bruton ever achieved that is of substance and merit; a light weight non entity appointed to positions well beyond his capacity. He should have stayed in the US and done all a favour.

      Bruton may have studied economics and perhaps Irish history but has little grasp either subject hence his stupid statement. But like all other politicians he knows how to feather his own nest.

      You are most correct the Irish public should be protected from stupid people like Bruton making stupid statements. Bruton should pay more attention to those who voted for him in previous elections delivering him to his priviliged well paid positions and I reiterate roles beyond his capacity. And the only thing being betrayed here is the Irish people and the right to a future.

      People like Bruton and his ilk are pure parasites enough to make anyone vomit when you have to listen to the bile they spew out. Please do not tell me we deserve what we voted for; do we really need to be haunted by the past delivering us to abject servitude. His statement only declares his barren intellect. Not only is Bruton brutless he is shameful and should engage his brain before he opens his thick mouth. How I wish Elderfield could muzzle morons like Bruton.

      • BrianC

        With that type of statement meeted out by John Bruton he ought to consider giving lessons on how to deliver the Judas Kiss.

        • Gege Le Beau

          According to a friend, he didn’t cover himself in glory during a Hardtalk interview, washed his hands of the country.

          Proof is in the pudding, toppled by his own party.

      • Deco

        I remember when Big Ears had dinner in Dublin Castle. Brute was merry. And gave several loud donkey laffs.

    • TheFullRed

      Bruton is well known as a non-thinker, dont worry about him.

    • michaelcoughlan

      Hi,

      I hope you read this John Bruton. Would it not be more apt for you to say something more clued in like the greatest betrayal of the country was when an Anglo Saxon establishment allowed one million people to starve to death and one million people to exodus during the failure of the potato crop in the mid nineteenth century because in the Anglo Saxon mindset “gentleman’s genocide” is perfectly acceptable when the land could be more profitably used?

      Did you forget Mr Bruton that an Anglo Saxon establishment in the USA continued to buy and sell human beings based on the colour of their skin for TWENTY years after the “Gorta Mor” (more accurately titled the great hunger as food was still being exported as people were dying) in Ireland?
      Did you forget Mr Bruton that the same Anglo Saxon establishment in the USA also committed genocide against American natives when the combined human AND environmental genocide in the one stroke during their “Buffalo Harvest” the aim was by killing all the buffalo they could drive the American Natives off the land?

      I have a small piece of advice for Anglo Saxon minded people like you and “Suds”.

      SHUT YOUR MOUTH YOU ARROGANT BASTARD!

      • coldblow

        Michael

        I’m not arguing with you (you might shout at me too!) but here’s a little experiment in imagination that just occurred to me. If Ireland had gained independence before the Famine, and the Famine occurred all the same, would the outcome have been any different?

        • michaelcoughlan

          hi Coldblow.

          Thanks for your response. We only have the record as is to go by and the answer thankfully is yes. But your point is well taken considering the amount of mistakes which have been made by successive native governments.

    • coldblow

      I shouldn’t really, but here are a few more random thoughts on this.

      1801 is an interesting date to choose. Is the Act f Union seen as the high-point of Irish civilization and it’s down hill all the way after?

      Farmer John believes that a gentleman always pays his debts. Can all the debt here, and in the whole world, ever be repaid? Here’s Hudson quoting Richard Price, a mathematician and Anglican minister (funny how they often seem to be Anglican ministers), who once calculated in his Observations on Reversionary Payments, first published in 1769:

      “A shilling put out at 6% compound interest at our Saviour’s birth would . . . have increased to a greater sum than the whole solar system could hold, supposing it a sphere equal in diameter to the diameter of Saturn’s orbit.” He concluded that “A state need never, therefore, be under any difficulties, for, with the smallest savings, it may, in as little time as its interest can require, pay off the largest debts.”

      http://michael-hudson.com/2004/01/the-mathematical-economics-of-compound-rates-of-interest-a-four-thousand-year-overview-part-i/

      A 4,000 year overview. I like that.

      “A shilling put out at 6% compound interest at our saviour’s birth” – sheeesh!

      Perhaps Bruton’s colleagues are a bit irritated that he saw fit to air these views in public, and I am sure the revelations about land deals have badly dented Gilmour for his part, but aren’t they instructive in terms of the ‘disconnect’ (as they say nowadays) between political rhetoric and political reality? Doesn’t it all just boil down to the haves and have nots in terms of ownership of property and sinecures? They might be ready to offer sympathy but they won’t give up anything more and will do whatever is needed to make sure of it (in the privacy of the voting booth)? In short, that Irish politics is nothing but BS?

      And can’t the same be said for Irish history? The corridors of Govt Buildings and the Dáil are plastered with the mugshots of the Taoiseach’s illustrious predecessors, as is I believe his own office, and so on and so forth. Is this iconography then the pure, distilled essence of Irish nationhood, what is held most dear, and the rest mere unsightly graffiti in need of a “cleansing”?

      Just trying a bit of empathy here.

      What’s that, nurse? I told you I don’t need that injection…

      • BrianC

        Loved the link.

        The one thing you can be sure of ‘the application of exponential mathematics to economics’ guarantees that just as wealth is inherited so too is poverty. And the core capital holders know this they inherit this knowledge hence their extreme efforts to retain economics built on exponential maths.

        The main problem is that most all politicians are too dumb to work this out hence the grip of the core capital holders on the politic body. I wonder if Suds knows this hard to believe not given the position of chair he has held in financial institutions. But you can be assured of one thing air head Brainless Brutless Bruton would never be able to work it out like most of our Irish Politicians – all Gombeens.

      • coldblow

        Should have read: a gentleman always pays his gambling debts.

  31. @pulmcd

    I saw the report last night and blogged on it here

    http://wp.me/pBbF3-ax :

    You may as well have it here in full, every news outlet should be asking how come Europe is now actively considering restructuring while our dark forces are campaigning against it?

    ………………………………….

    There was a gathering of 400 Irish chief executives in the National Convention centre last night reported on by RTE news last night, available here http://www.rte.ie/player/#v=1084039 Checkout approx 18:55 into the news.

    Given its drop jaw content I made an .avi recording of the relevant section of news reporting available here: http://www.cbweb.net/download/Bruton041110.avi

    The relevant piece occurred in a section introduced by referring to cost of borrowing rising for Ireland internationally. As the report contained a piece each from Brian Lenihan, Minister for Finance and John Bruton, chairperson of IFSC and was broadcast to the nation coming from a venue with 400 top chief executives in National Convention Centre, its significance should not be understated.

    Firstly, Brian Lenihan referred to international comment that both German and French leaders were considering the option of a structured bailout for Ireland, that this was effecting the spreads against Ireland on the bond market, that these statements would need to be clarified.

    What is astonishing about this statement by Lenihan is the lack of information at his disposal given the supposed high level exchanges ongoing between his department and Brussels on the management of our debt position. Equally astonishing are the implications that eurozone leaders are now keeping Lenihan ‘out of the loop’ and perhaps considering positions on Ireland that will require him to move aside. Two scenarios present themselves; either the IMF will be brought into the picture sooner rather than later and Lenihan asked to step aside; or, consideration is being given to the electoral prospects of FF having little to none electoral possibility of returning to power and therefore having no hand, act or power in negotiations down the line. Once again, it appears ‘sofar’ Lenihan is given the role of ‘catchup’ where news and events have once again gotten ahead of him. There is of course another interpretation, that is that the ‘restructure’ scenario has been actively promoted and advocated by many such as yours truly in the heat of opposition and criticism by Lenihan and FF and now with this revelation from Europe, Lenihan once again is forced to eat humble pie.

    But the drop jaw aspect of Lenihan’s comments above are nothing compared to these comments by our erstwhile ‘soldier of destiny’ John Bruton Chairman IFSC.

    “..given that we fought a war of independence to get the right to borrow, I think we are a country that is going to be insistent that we accompany that right by exercising the responsibility of repaying every penny we owe on time.”

    Did you know that the brave men and who fought and gave their lives in 1916 were fighting for the right to pay back the casino €50 bn debts of Seanie Fitzpatrick and the Irish banxters whose greed and incompetence compounded by lack of regulatory, fiscal and competence in governance, was a right to act in moral hazard and take debt reparations from an innocent citizenry while allowing qualifications/exceptions to this along the lines of 20% of the country owning 80% of the wealth?

    Now you know! What a horrendous, twisting of our national heritage. What a disgusting, abomination of the truth? Heroes of 1916 would turn in their graves if they know the depth and breadth of betrayal of Irish citizenry by this disgusting, self serving, citizen serfing, betrayer.

    http://bit.ly/a3OQoh

    Word is leaking out there will be a foreced debt restructuring involving Portugal, Ireland and Greece.

    http://bit.ly/aW6qqw

    It would appear there may be an amendment to the European Treaty to establish the risk for bondholders regarding sovereign default, that the tab won’t be born by taxpayers but will be shared by bond holders. This is driving up the spreads at the moment.

    Seems to me EC is perfectly placed to negotiate a default bailout to bondholders by dangling the promise of European Rescue Fund monies, current and future, only upon condition bond holders agree to get partially burned.

    Otherwise, why give rescue bonds to peripherals that will only be used to pay creditors bondholders when they will be defaulting anyway@? Taking Rescue funds down with them?

    Hopefully some decent proposals based on realistic and achieveable terms and goals will be gained for Ireland to allow a structured default and reignition of the Irish economy.

    If these proposals arrive, we’ll have Merkel to thank, not Trichet or the hapless dudes from TeeShock’s Office, Clown Row, or Cloud Nine Merrion Street. One thing for sure, judging by the hapless comments by Lenihan above on these matters, we’ll get no insight, or clarity from him on these important revelations re ‘restructuring deal’ for Ireland on the cards.

    This matter should be headlined on every newspaper and news outlet in Ireland today. Instead, its buried in the news. Hopefully, reporters of the calibre of Gene Kerrigan and Shane Ross can use their sources to get a stronger lead on this important and emerging story.

    Ironic isn’t it, Trichet/Merkel would appear now to be advancing towards the position of the Irish critics of DoF and Lenihan policy?

    Before this game is fully played out there will be more surprises!

    Rather OT but this will provoke your gag reflex: £380 ml will go unspent this year, money allocated in last years budget for Education this year.

    Last year there was an underspend and they spent some of it on free IT equipment eg laptops for schools. Arguably, these are a lot less needy and generate a poorer return than school buildings.

    Consider one million spend in school building generates 9 jobs…..

  32. Re David’s ‘mortgage freeze’ Those who got burned by their mortgage and can’t pay it back, they should be offered innovative solutions including restructuring, deferment, interest only, shared ownership, outright purchase and renting back, etc.

    Our gormless politicos should be proposing a raft of solutions to help families in desperate circumstance due to mortgage arrears and unmanageable debt.

  33. Colin

    Paul Sommerville says Ireland is being shut out of the bond markets now. He’s on Newstalk now.

    • Colin

      “Markets have had enough of the spoofing from Lenihan and Cowen”, “General Election needed before Christmas”

    • Dorothy Jones

      Colin
      Paul’s always right, just listened to it. This is exactly what he predicted at a talk he gave in Delta 2 months or so back. It should scare the bejaysus out of us all. If the only way not to get into the IMF by Feb is to have a general election is to get onto the streets now, this weekend.

  34. petercice

    irish bonds now stand at 7.8% this morning there is no sign of this going on the lower trend

  35. TheFullRed

    The World wont loan Ireland money. The Dail is in a shambles as could be heard around the world today. The Unions ensure none of their Public Service members bear any of the upcoming load. The traitors of Fianna Fail wont call elections without the intervention of the Courts. That twit Jackie Healy Rae subordinates the abject needs of his Nation to those of his backwater constituency. Violent revolution anybody??? I nominate yours truly as your Benevolent Dictator…

    • There must be a way to restore democracy. Media is largely compromised and has done a fair job at hiding the rubbish.

      Without the courts, Justice Kelly et al, the bubble of whitewash, lies, coverups, incompetence and zombie craziness that stands for democracy here, would be even in worse dire straits than it is in now.

      Story from Ireland is the financial elite have taken a big hit and are out to sting the taxpayers to get their money base back!

      Money For Nothing….dire straits

      http://www.youtube.com/watch?v=dlPjxz4LGak

    • Deco

      { That twit Jackie Healy Rae subordinates the abject needs of his Nation to those of his backwater constituency. }

      They are all at it. Healy Rae gets stick because he makes it obvious. They whole lot of them are a disgrace.

  36. DarraghD

    If there was a fund that I could buy into to take a punt against this country right now, I’d take half my dole every week and take a punt against this place, and I say that as an Irishman. This country is the most backward, dysfunctional, smarmy, “I’m grand so f*ck you Jack”, despondent place on the planet, David referred to his friend on the dole recently who is dreading another 10% cut in December, well that’s where I’m at. I wouldn’t mind if the mentality was if you have some sort of an idea where you can take yourself off the dole, then you might get some kind of a fair hearing, I’ve been trying to do that for the last 12 months and I’ve been sent from the Social welfare, to the Dublin City Housing Dept, to the County Enterprise Boards, to Partnership Programs, FAS, back to the Social Welfare office, the beaurocracy you encounter in each of these places is emotionally destructive and mentally caustic, it drains you every day of the drive you have mustered together to go forward.

    Then you look at the funeral of little Leana Martin this week, God help her poor grieving parents & family for their loss and I mean that genuinely, but you look at all the TD’s that turned up, I’d love to know how much they all claimed in expenses to show their faces and sympathise with the Martin family.

    If I had my small business up and running, if one of my suppliers God forbid had a child that died tragically, would I be burdening my (cash strapped) business with reams of travel and subsistence expenses in order to be able to express my sympathies to my supplier and his family???

    This country has hopelessly fallen into a dark place, and it’s not that we have not got the ability to pull our way out of it, it’s that we are stuck in the fatal glue that is a public sector that doesn’t support innovation, all it understands is, “fill out the form and then you need to get a letter from X, Y or Z, because we need it for the file”…

    The whole system is constipated with a defective “I’m here to clock in and create paperwork”, attitude, the notion of doing something different is alien to those who sit at the counter. “Just fill out the form and go off and get a letter for the file and then we’ll get someone else to review it and we’ll get back to you in 6 months time and then you can appeal and fill out another form and get another letter and someone else will talk to you”, the whole thing stinks to the f*cking high heavens…

    • StephenKenny

      Form a business startup self help group in your area.
      Start with this site – ignoring the article content, repeatedly ask if anyone wants to join. Just meet for coffee at someone’s home and talk about experiences and ideas. When there’re enough of you, you can make a noise that will interest the media (one pissed off person is one story and is not news – 20 stories is).

      Ask the boss of a local company to join, and then another. Just for coffee and business startup chat. Some will say no, others will want to help.

      It’ll take time to get going, and some of your early meetings no one will actually turn up, but keep trudging on and word will creep out, and it will work. People with drive attract other people with drive – they just have to hear about them and get used to the idea.

      A lot of us know how lonely and difficult it is to start on your own. You’ve got to have a thick skin, but anyone who is against the idea is clearly a pretty sad person so should be ignored.

      Go for it.

      • DarraghD

        So I turn myself into a kind of quasi political business mentor when the actual mission is to get off the dole, get my life back in order and get back on my feet again??? I’ve a degree in management, I’ve run a business before and very sucessfully, until this recession caused it to fail. I’m all for coffee’s but I’d rather be processing orders and running a business.

        • StephenKenny

          Fundamentally it’s a business network:
          1. Build a group with a common cause
          2. Attract existing business leaders
          3. Attract media coverage
          4. Keep iterating 1 to 3.
          Throughout, everyone uses each other, and the exposure, to find the people they want to meet – backers, funders, customers, whatever.

  37. uchrisn

    The regular bolgger might be a bit tired of me pointing out again that Housing is a basic human necessity and so like basic food, clothing and social services should not be used to make excesssive profits.
    It is a key factor again in this argument. People have said to me ‘aren’t the people who bought in 2005 etc just dumb and they deserve their commupance’.
    I always say, look they don’t really have much of a choice, they need shelter both houses and rents are exhoborant, what can they do? So the people who bought out of neccesity, i.e first time buyers in my pinion are entitled to debt forgiveness as there was criminal price-fixing by the developers/auctioneers overlooked by the banks and governement.
    The people who bought a second or investment property basically were buying stocks and they should suffer losses.

    • michaelcoughlan

      Hi Uchrisn.

      You make valid observations. Regarding people taking losses on investment properties I would only agree if they made the losses through bad judgement and not because the whole system was totally corrupted by the banking system. Many People who invested in properties in good faith are victims of what the banks hae done because the banking system failed first in Ireland and subsequently the property industry unlike the USA.

      • uchrisn

        Thanks for the reply Michael.
        I understand your point about if there was criminal activity in price-fixing involing auctioneers and developers and perhaps including the banks then shouldn’t everyone be looking for their money back? Well yes.
        However this may not happen, I think there are too many interests at play to prevent this.
        So we are talking about a government bail out.
        Really I am trying to point out there should be a special rule for people who bought out of nessecity i.e for basic shelter. Remember if they lose their houses they will have to be put in social housing.
        I don’t think the government should bail other profit seeking investors no more than they should the bank bondholders.

    • uchrisn

      I would like to see an investigation into price-fixing and collusion in the property market in the boom years. How could there be so many empty properties in Ireland and the prices so high? Even now its still going on. The auctioneers meet in their hotels and suggest knocking down all the empties so they can more easily fix prices. Developers who dared reduce the price of their apartments were bought up by other developers to keep the prices high and outcast. The banks nightmare was a drop in prices so they didn’t pursue the developers or make them sell.
      The governments knew the issue with the banks and they too didn’t and still don’t want prices to fall.

      Anyway if there was a criminal finding of price-fixing of properties would this be a legal case for non-payment of debt.

      I think it would.

      • michaelcoughlan

        Hi uchrisn,

        The reason many prices are still high is because people who don’t have to won’t sell property at an enormous loss. You wouldn’t sell a property if you didn’t have to at an enormous loss would you?

        • uchrisn

          Michael, personally I would like to see a large property tax bought in for people with 3rd and subsequent properties. This might start to help to rectify the situation where tens of thousands of people are on public housing waiting lists while tens of thousands of properties lie empty.
          Cheaper housing could mean people would demand less salaries, feel more secure and confident in themselves and our economy would be more succesfull.
          Signapore has the highest percentage of people who own their own home in the world and also one of the highest GDPs.
          How? Great housing legislation and plentiful public housing.

          • michaelcoughlan

            Hi uchrisn,

            Italy has a tax similar to the one you describe as far as I know. I disagree with your assessment about taxing subsequent properties would make housing more affordable though. The reverse might in fact happen as no one would bother to increase the supply of houses if the citizens were restricted to two properties through punitive taxes. You know what happens when items in a market are in short supply. The price goes up. Rent would most certainly increase. In order to make housing more affordable you need to tax land speculation very highly as opposed to houses to prevent speculation in land and land hoarding.

            Home ownership is more prevalent in Ireland than it is in France where many people rent homes for their entire lives due to strong social legalisation and no longing for outright homeownership as in Ireland. Perhaps the idea that a landlord could drive us out of our rented homes has left an indelible mark on our collective psyche since the famine.

            I also feel that a better distribution of wealth to the working and middle class sections of our society would give these people better purchasing power to afford a nice home and would help to restore a normal functioning house building sector moribund since the banking collapse brought down the property industry.

          • idij

            It’s only necessary to tax the empty ones. A 2nd or 3rd property is a perfectly legitimate and socially beneficial use of capital if it’s let to someone else. The tax ensures that people would rather let at a reasonable rate than leave empty while holding out for a high rent payday.

  38. george

    And the only ones that are doing an effort to think, and brought to the table practical ideas that could have an immediate effect are the guys from Sinn Fein, but the media is ignoring them completely, they are more interested in watching the other Parties masturbating. If they are going to save us I don’t know but at least they make a bit of practical sense.

    According to the economic plan Sinn Fein have announced if we cap the salaries at 100.000 euro for Politicians and Public Sector, and we reduce the fees of solicitors and accountants by 25% we can save half a billion per year, that without a readjustment for pensions in that sector that I imagine can bring the bill to a billon a year.

    But only if we have “that” half a billion we can buy a bullet train to the Japanese or the French, or fill the land with windmills and generate cheap energy.
    Here we have two choices. We start to be logical thinking people, or we’ll keep indulging our monkeys with peanuts and become for ever a nations of wankers.
    http://www.sinnfein.ie/contents/19445

  39. Deco

    We need to fix the failing private sector jobs market. It is as simple as that.

    • DarraghD

      That’s all we need to do Deco and it isn’t half as hard as it appears. I’ve done it before, in ordinary times you would go to a bank and talk about getting seed capital. Have done it and they haven’t a pot to p*ss into. Same for CEB’s, which are nothing more than politically appointed waffling shops that are BROKE.

      It’s all about job creation, nothing less and nothing more, we are three years into this and the only strategy we have for job creation is the endless regurgitating of the words “green economy” and “smart economy”. Repeating these words in front of TV camera’s is not going to create any jobs, when the f*ck are we going to start digesting that simple fact?!?!?!?!?

      • DarraghD

        This is the kind of illogical woodenheaded bullsh*t I’m talking about…

        http://www.irishtimes.com/newspaper/breaking/2010/1104/breaking39.html

        Conor Lenihan talking to a room full of 7 year olds about what he dressed up as for Halloween and what he will be asking Santa for… Obviously this is the priority at the moment, and not job creation.

      • Deco

        DarraghD. We are living in the age of the soundbite.

        If the local authorities stopped collecting rates there would be a massive increase in employment in the retail sector. Instead retailers are closing their shops earlier every day, sticking to employing family members and often closing down.

        And what exactly are the local authorities doing with the money ? Sending gobshites to St. Patrick’s Day parades, and on fact finding missions to the Med and the Carribean in the middle of winter.

        Gormless wants more stealth taxes for these little emperors, and baby governments. I would not mind if it produced more politicians to pick from, but most of them are useless and even dangerous when they get promoted to the rank of TD.

  40. uchrisn

    I read an interesting comment over on Simon Johnsons blog. I wonder if David is an acquaintance of Simons.
    Anyhow he says thats its funny how the Obama adminstraion bailed out the finance industry, then the finance industry used the same bailout money to contribute to the republicans campaign and to their recent election success. All because they’d be lighter on financial regulation.
    I wonder what kind of candidate the Irish financial industry will be backing/contributing too for the next election.
    Hope the greens get to pass their legislation on capping contributions.

  41. DarraghD

    Maybe we should all just move down to Kerry and let Jackie Healy Rae and his little runt look after us, I wouldn’t be surprised if he is asking for his constituents to be protected from dole cuts.

  42. Tim

    Folks, Alarming but accurate piece in Telegraph about how bad things are.

    http://bit.ly/95EylH

    • michaelcoughlan

      How are we going to save our families if they cut off the money supply to the government? Wholesale cuts in the public sector and all the extra spend taken out of the economy? Tax revenues will drop to 20bn or less? god help us all.

    • Re “The EU bail-out fund is a bluff that cannot safely be called.”

      I disagree, this triple bailout is the only game in town, the only game that can save the eurozone in its present form.

      There are 2 sides to this story. Too little credence is given to the startling situation of bondholders faced with default.

      It’s in their interest to lose a little or be faced with the prospect of massive default and lose a lot!

  43. Gege Le Beau

    Was wondering when part II would show up……………

    Leading economist who predicted housing crash says now is time to buy
    http://www.independent.ie/business/irish/leading-economist-who-predicted-housing-crash-says-now-is-time-to-buy-2405035.html

    • michaelcoughlan

      Hi Gege,

      He probably is telling you the truth.

      • Gege Le Beau

        That’s a big probably Michael.

        With €6 billion in cuts and government banking (pardon the pun) on mass emigration, well as the song goes…………
        http://www.youtube.com/watch?v=7miRCLeFSJo

        • michaelcoughlan

          Hi Gege,

          That’s the difference between me and you. I think positively and you go off on your solo runs. The reason he has come to this conclusion is because the cost of buying the house versus renting the house is now much more in favour of the buyer. If the banks weren’t so fucked our recovery would happen a lot faster because people still want to get on with their lives and would borrow money to buy the bargains out there at the moment. When house prices were sky high you are unhappy now that they are great value you are still unhappy? You can’t have it all ways Gege.

          • Gege Le Beau

            Michael,

            You would want to be out of your mind to purchase a house in his climate.

            OUT-OF-YOUR-MIND.

            12 months from now they will be giving them away (fire sales) for €90,000 or less, but first we have to reach year zero, which is just around the corner.

            Let not the madness of crowds be reignited.

          • michaelcoughlan

            Hi Gege,

            Your response highlights your way of thinking very vividly. As an avid socialist why would it bother you about the price of a house now or next year if you see it as your home and not an investment?
            Even a child will tell you that in order to make a capital gain you buy an item when it is cheap and sell when it’s dear. Most people are too stupid, ignorant, greedy or cowardly to do just that in a real world situation Gege. That is why it is so difficult to do in practice because the only time houses will be as cheap as they are now is in a crash.

            You will get a house now Gege for €40k in one of the harder estates in cites around the country if you choose to live in it but that is why they are €40k because no one will live in them. I bet you Gege you won’t get a nice hose in a nice suburb for €90k in a year’s time, 2 years time or ten years time because once the compromised sellers are liquidated no one will be building houses for that money nor will existing home owners be selling for that money.

            Finally if you read your own link in your previous post you would find that the guy said that if you buy a house now he reckons you will be buying one year from the bottom. And he predicted the crash. He has come to this conclusion because he knows that when Ireland is refused money from the bond markets early next year Ireland’s only option will be to renegotiate our debt with the Germans and once adults sit down in a room the conclusion will be that a sizable portion of our debt will be written off to allow our economy to recover and grow. House prices will then start rising again THANKFULLY.

          • Gege Le Beau

            @ Michael – forget it Michael, its down, down, down.

            Trust me, they will be giving away housing stock, houses at an auction.

            As a social democrat, I believe, in decent, affordable housing, in viable communities. Just like I believe in a decent, viable and F-A-I-R society.

            The banks that were reckless, should have taken the hit and gone under, Anglo was not critical to the domestic market like AIB or BOI, should have been left go to the wall, would have saved us €22 billion.

          • Julia

            I’d wait another while yet, Michael. Houses need to be priced at 2 and a half times your income. Thats what worked years ago and would work again. We can’t go back to buying for 3,4 and 5 times our incomes. That would be too dangerous and again, unsustainable. This will be good news for buyers in the near future. Some houses have come down to those prices but I suspect many have still a way to go.

            I’m listenig to John Murray on RTE. Also check out Hopinn videos on Youtube. Absolutly hilarious.

          • michaelcoughlan

            Hi Julia,

            Thanks for your response. If the average industrial wage private that is is 30k then two and a half times this is 75k. Assuming two people are working at that salary level then the figure is 150k. There isn’t a snowballs chance in hell a house in a nice suburb in Dublin will ever be bought for that kind of money. You might get a house for that price in a remote part of the country. What will determine house prices is access to capital. You might get a 1 bed apt for that in a nice suburb in Dublin but unless we get sustainable growth in housing values people will have to keep saving a new deposit over and over again to trade up as their family grows which means the whole country will wind up living in a remote part of the country or in 1bed apartments. Not very appealing I would think.

            regards,

            Michael.

          • Julia

            Hi Michael,

            Exactly as you say, the average industrial wage is 30k and a couple would be looking for a house for 150k. In my area, north Wicklow, ex-council houses, nice, small houses are still for sale for around 200k. They are not selling very well. Who can afford them? Not every one will have access to capital exept by saving as I had to. There are always more employees than employers. Employers and self employed people can sometimes get access to lump sums. Employees have to save deposits slowly. I think the prices will have to come down some more. Those houses will be in Lucan, Leixlip, Tallaght, Bray, lots of nice suburbs. And in Galway, Limerick and Cork too. It seems logical to me. And fair. Buying a house to live in shouldn’t be a torture for more than a year or so as you get used to it.

            Anyway, no offence intended, but I hope I’m right and you are wrong. No one should have to spend 40 years paying a mortgage.

          • michaelcoughlan

            Hi Julia,

            It is true to say that prices will still go down no question. The trouble is no one knows where the bottom is. To help you with regard to buying homes without having to save a deposit check out purple pig or rent to buy/ rent to own in your search engine. I really hope this helps you.

            best regards,

            Michael.

          • Julia

            Thanks a million Michael. Fortunately I bought my one and only house many years ago just before the boom. I just worry about young friends and colleagues. You are really kind.

      • BrianC

        I think prices will fall a lot further before those with the wealth under the bed will be attracted to enter the property market.

    • StephenKenny

      My concern with all this are the obvious legions of people waiting like coiled springs to leap into the property market.
      It isn’t necessarily the case that the previous bubble will simply be followed by another.

      • idij

        The buyers of NAMA properties will be Irish. What kind of price should they, as good nationalists, buy at? If they buy low, then they bankrupt the country. If they buy high, they cause a bubble that will bankrupt the country.

        • uchrisn

          They should buy at low price.
          There would be a low price if the Irish market wasn’t sown up by collusion.
          Remember the car insurance companies that were found in the Courts to be making ridiculous profits from young drivers – collusion.
          Remember the case in the courts where the different Car importers got together in a hotel and fixed the mimimun price for different categories of cars such as a four door family model? – collusion
          While there has been no ivestigation into price-fixing and collusion in the Irish property market, it is painfully obvious.
          The governments/Nama strategy is the same as the banks. Leave the properties at unrealistic prices. Rent the properties for 10 years and sell them when the price goes back up.
          Take out loans now to pay for the capital lost into the economy by not selling the houses.

    • Tim

      Gege, don’t trust him; I know him personally. Not good.

      • Gege Le Beau

        Interesting Tim, would like to learn more but understand this forum may not be the most appropriate.

        Common sense and gut says no just like it did during the boom.

        And Michael Coughlan, I hope I never purchase a house as an investment and have someone pay off my mortgage for me, I never want to be a parasitic landlord, I would like my own home, but not at the extortionate prices that were such a feature of the so called boom during the Paper Tiger. I think the call to buy now is ludicrous.

        • michaelcoughlan

          Hi Gege,

          Your honesty is refreshing. I don’t agree that all landlords are parasitic. Some are complete scumbags altogether. But like all walks of life I am sure you will find that there are landlords who take their responsibilities seriously.

          • Gege Le Beau

            Thats fine and dandy Michael, but they take their ‘responsibilities’ seriously because they want the rental income. People are being exploited because the system is corrupt, prices were inflated, and housing is overpriced. If a person actually had a choice between rental and their own affordable house what do you think would happen? It is a no brainer.

            A houses should not be commodity to be horse traded, with agents making up numbers over the phone, a home should be affordable and available, but the game is twisted, just like everything else. People making profit off the backs of others – investment houses – who ever heard of such nonsense, total exploitation.

          • michaelcoughlan

            Hi Gege,

            You are perfectly entitled to your own opinion.

            regards,

            Michael.

  44. george

    The students were protesting yesterday on the streets because the Government is threatening to increase the fees. And at the root of it are another bunch of overpaid academics with huge pensions, four-month holidays in the year, and many other perks, whom we have to support. I wonder how much would they be earning in other EU countries? Probably half?

    These exorbitant salaries paid in Ireland have distorted the value of money completely, and fuelled a hype that has cost us billions, and leaves them in a privilege position, while most of the people have to pay extremely high prices for goods and services.

    The McDaids, the Mc Manusses and others to come, can buy a house with their “good-bye money”, and with their annual pensions another one, for every year they’ll live. The problem is that if the IMF comes (that is if they are not here already) and makes a cosy deal with the Politicians and the high ranking civil servants, they will force most of us to emigrate, or to kill one another over a piece of auld bread.

    And unless we start with “One Voice” to demand the capping of salaries to 100.000, and give them a taste of their own medicine, we will end as victims, of our own stupidity.

  45. paulmcd

    NEW BEGINNING BUDGET – 6 BILLION EURO ADJUSTMENT IN ONE YEAR

    This would be equivalent to the UK, with a population of 60 millions, taking all its 4-year proposed adjustment of 81 billion sterling in JUST ONE YEAR!

    • paulmcd

      Lenihan’s figure is a cruel GUY FAWKES DAY joke, isn’t it?

      It must be: if not, let me be the first to predict that the total tax take in the coming year will fall by at least the same amount as that which Lenny the Liar proposes for it to rise.

    • Deco

      It won’t be enough.

      The economy has contracted back to it’s 2003 existence. Tax receips are quivalent to 2003. And expenditure is higher than ever.

      Figure out that one, if you can.

      • paulmcd

        Deco, you are right, of course, primarily because the banking situation has us in such a bind, on top of the structural deficit.

        The figure would be 4.5 billion but we will have to pay 1.5 billion on the 30 billion Promissory Note alone; unless they will be hiding that sum using accounting chicanery, where in fact the ‘cuts’ may in reality amount to 7.5 billion.

        At the hyperlink below I outlined another manner in which NAMA could be made to work, allowing for the realities of the structural deficit and massive banking bailout costs. It needs updating but I believe that in principle it could be made to work in the same way as rationing in wartime can be made to work.

        http://bankermathews.com/blog/

        • Deco

          We have three fiscal problems.

          i) the money that is rescuing the bondholders, bank staff, and bank shareholders. That is money wasted. But IBEC, Brussels and ICTU have interests to be served.

          ii) Money that has been squandered on all the various efforts to prop up the real estate markets. That includes NAMA, and various state schemes for paying above market prices for houses.

          iii) Even if i) and ii) did not exist, we would still be down 20 Billion per annum, every year, because of the way the state is run. Just compare the state next door and see how far out of whack Irish state spending is.

          Over the period of a decade, any one of the above would bankrupt a country.

          When the three are together, it will happen even faster.

    • paulmcd

      Have just listened to Brian Cowen. Apparently every other country is going to be taking the ‘same’ tough decisions. Phew, what a relief! – I thought we were alone in this.

      It seems that the problems are due to those dastardly Americans again: simply not growing their economy as fast as they should.

      • Colin

        He’s spoofing. He’s clueless. He’s irresponsible and corrupted. Dobson gave him a soft ride. Typical Pravda performance. Did you see the elephant in the room behind him? The Croke Park Agreement on his desk?

        Why are the unemployed gonna take a hit when there’s so much wastage in the Public Sector full of useless c**ts? Where’s the f**king stimulus? Where’s the attempt to get people off welfare? Why don’t they just come out and tell us unemployed people to f**k off somewhere else because we’re not economically viable?

        • Ravished By The Sheer Implausibility Of That Last Statement

          I for one an emmigrating and feel a sense of shame at leaving the country rather than contributing to reviving our fortunes. Sorry

          • michaelcoughlan

            Hi,

            There is no need to feel ashamed as you had no responsibility for the mess we are in. The government actually see your emigration as contributing to an ease on the burden of the Irish State so you are only following unstated Government Policy anyway.

        • petercice

          Colin they already are telling the unemployed/sick/pensioners to f**k off as the DOF are calculating of around 100,000 people to emigrate over the next 3 years that is roughly the population of dundalk driving up to the airport paying there tennerr to leave the country on a cheap ryanair flight each year for the next three years and not coming back.
          i say stop the maddness if this is the attitude of the government we need to stop it now before it gets to late so how some way.
          also listened to gilmore on the radio this evening and he was asked about what he would do with the country he said that yes we need to take the 6 billion out of the budget and reduce by the agreed amount over the next 3 years in line with FF and no he wouldnt look at the croke park agreement to reduce spending.
          so he is basically going to do the exact same as FF if he gets into government this is suppose to be the labour party the social party the ones that look after the poorer in society and all they are doing is the same as there ff buddies in government.
          we need a new party now. apart from SF who have shown there budget and growth the rest are all the same cloth .
          i am really starting to hate the people in this country that pretend to care about the rest of us.

        • paulmcd

          Yes, Colin, the guy is a buffoon. His government are either corrupt or clueless or both. They seem to want to raise 50 million from third-level students while withdrawing educational services and funding; BUT, at the same time they want to cast 300 million at subordinated bondholders at Anglo who should not get a penny.

          The sub-bondholders recognise weak, incompetent financial managers at work and will try to hold out for more than the 300 million which they do not have the right to obtain.

        • BrianC

          Yes you are correct about the Croke Park elephant.

          No matter the magnitude of the cut they make to package the austerity product the markets already know the product is tainted with the Croke Park agreement and other unsavoury underlying elements compormising Irelands abilty to reposition for competitiveness.

          They are aware of the key fundamental that if you cannot devalue your currency then you need to simulate it by cutting your core costs to deliver the efficiency to create the devaluation to increase the competitiveness. The greater proportion of the core cost is the pay in the public sector. This is basic 101 economics but the Irish Government is not up to the mark.

          Not alone do the markets understand that there is no intellect to cut in the right key areas they also are aware of the dithering and lack of will. The absence of decisiveness only compounds the problem through procrastination. They now have no faith in any decisions the Irish Government makes.

          The opposition is no different Noonan is smart he knows a change in government will not change circumstances and their economic thinking is generically the samde as FF. All he can do is advocate stuck in the middle thinking economics.

          Gilmore is an absolute dead loss and has not made one positive contribtion since the debacle began and Joan Burton is a lost cause, name one positive proposal she has made. Burton has the same barren thoughts as Gilmore ‘we need to make the Croke Park Agreement work better’.

          There is no strategic thinking and a complete inability to think differently to problem solve. The markets are very aware of this becaue if they had faith in the Irish Government the yield on the bonds would at least stabilise and then recede given the previous cuts and telegraphic signals to the cuts announced today. You have to look at what they see. They see a Government that protects artificailly high electric costs sacrificing industry costs/ competitivenss for the stupid ideology of attracting in private enterprise into the engergy market. These action defy belief. It goes to the heart of the matter. They recognise that those in the Dail are not up to the job of turning an economy around.

          The markets clearly recognise that the cuts support an uneconomic equilibrium protecting the few privileged and their administration body. They clearly see that there is no true attempt to achieve growth to drive the economy and know that Ireland is now exclusively relying on the export of side of the economy where foreign based multi nationals are more capital intensive with relative low levels of employment operating in highly structured markets with protected margins where profits will be repatriated offering limited growth opportunity to Ireland’s economy. They can clearly see that the agri side of the economy is loosing competitiveness via the strength of the Euro burdened with artificially high engergy cost and non competitive wage structures impinging on their ability to export to the new emerging economies.

          We are not just living the Chinese curse of interesting times but times that will also be horrifically penal. And for a Government to highlight an outflow of people of 100,000 from an already low population base to support an economy is pathetic and shows their inward defeatist thinking.

          • george

            It’s exactly as you describe it. What baffles me is that Sinn Fein presented the only sound economic proposal and people and commentators keep ignoring it, and don’t even want to take it seriously, don’t take the trouble to analyse it, and point out to others the benefits and faults. Absolutely absurd!!!

          • Gege Le Beau

            @ george, because Sinn Fein would be a direct threat to the vested interests right across the spectrum. Do you think the RTE ‘stars’ and the rest would be on the money they are on if there was a Sinn Fein run government, possibly not, and it is that ‘possibility’ which ensures they are ignored.

        • michaelcoughlan

          Hi Gege,

          I agree with your assessments of Sinn Fein’s threat to the State. What ensures the refusal of the people of Ireland to endorse Sinn Fein is the following:
          Some of Sinn Fein’s members and many of their former associates were a direct threat to the life and limb of many of the citizens who inhabit the island. They have over the last forty years attempted to hijack the civil rights problems in Northern Ireland to impose Marxism on all of us and failed miserably to do so. After 35 years of mayhem the people who inhabit the island signed up to a document which copper fastens partition in direct contravention of Sinn Fein’s stated aims.

          The people of our great republic have recently voted John Hume a democratic peacemaking nationalist as one of Ireland’s greatest. This is why the citizenry won’t vote for them because their party is replete with human beings who think it is perfectly acceptable to blow other human beings to pieces in order to impose their views and politics on them. Hope this clarifies the issues with Sinn Fein for you.

          • Gege Le Beau

            Hi Michael,

            There is the small matter of a 15 year peace process, decommissioning, power sharing, things have moved on a lot since 1971. Sinn Fein have proven themselves capable of holding office, of managing the affairs of Northern Ireland and from what I have seen in the Dail, their deputies courageously speak up for the disadvantaged and those with no voice, and if you noticed just won a major democratic victory in the Irish courts.

            The gun has been removed from Irish politics, by the way FF’s roots are in violent revolution while FG has the fascist blueshirt leader, Eoin O’Duffy, as one of its founders, are they held to ransom by history? Because if you are opting for that argument then it should be applied equally, across the board.

            Sinn Fein and its members also found itself abandoned by the Irish Republic, its people (including my aunt and 6 children) chased and burned out of their houses by a violent, discriminative, Unionist State that didn’t give a tuppence for Nationalists/Catholics, context is everything and before you get any ideas, I do not condone violence, all life is sacred even for a**holes.

    • michaelcoughlan

      Hi Paulmcd.

      The politicians in this country just can’t see the wood for the trees. The more they cut the WORSE the deficit will get. In times like this in a normal economy as McWilliams has pointed out ad nauseum governments INCREASE spending until the private economy has deleveraged and starts to grow again.

      What will it take to get this message through to the idiots in the Dail? Spending on the most vulnerable increases spend in the economy as people in these socio economic groups spend 100% of their disposable income.

      The markets know the more the government cuts the more the interest rate will rise on our bonds because in order to try and cure the patient we are using a medicine that is killing her (Roisin that is). The only way to solve the problem is to face down our colleagues in Europe and remind them that lender and borrowers take the pain in a collapse like this and restructure our debt ie. Make the GERMANS write off a sizable portion of it to allow Eire recover.

      Currently the only red spilled on ministers in our great Republic has been watered down emulsion. Please God let not the day arrive when it is blood that is being spilled.

        • Ravished By The Sheer Implausibility Of That Last Statement

          I very much doubt German taxpayers could be persuaded to write off even more of our debt, and why should they ?

          • michaelcoughlan

            Hi,

            The German tax payers won’t have a choice because we are so f***ed. McWilliams has pointed out that the markets are forward looking in that they will accept some money rather than nothing in a complete melt down scenario.

          • Ravished By The Sheer Implausibility Of That Last Statement

            The Germans must make an example of us

          • michaelcoughlan

            The Germans won’t cut their nose off to spite their face. It’s better to recieve some money than none just to make an example out of us. This is the message McWilliams has been preaching all along. In any event they are also responsible for not being more prudent in their lending and also because you can’t have EMU and not take responsibility in the good times but not the bad.

  46. Dorothy Jones

    David, Posters on the site

    Paul Sommerville on Newstalk lunchtime today, about 25 mins into the lunchtime programme @ ca.12:25. What he says is what we knew was happening [a maust-listen]:

    The bond markets have shut Ireland out, interest at 7.7% and rising
    Ireland’s Government has lost all credibility and the country will not be able to borrow the money it needs [20 b?] when it goes to the market in Feb 2011
    The only way to have any chance of not going cap in hand to the Stability Fund or IMF before Feb is by having a general election by the end of this year.

    This is terrifying and we have run out of pavement. We need to get out on the streets – now. This weekend. There is no more time. It’s black and white. Either we get a change in politic -now- or it’s cap in hand by next Feb. There is a tiny ever-decreasing hatch of opportunity to cut the cancer out. Sunday? That leaves tomorrow and Sat for emails, facebook, twitter and so on.

    Ideally it should be every day thereafter until the current government is gone.

    The situation should scare the bejaysus out of any irish person enough to get us saying :
    no, enough, change, now. This is what the markets are saying.

    • crossroads

      Hi Dorothy,

      The govt have shown that they will cling to power for as long as they have the slimmest of Dail majority to the point of kicking bye-elections to touch for as long as possible. Democracy and the citizen don’t seem to have any role in their philosophy.

      Perhaps we could appeal to a couple of FF backbenchers or Greens to do the right thing for the country and withdraw their support for the govt.

      As I understand it we need two to switch sides or four to resign.

      Whatever about the comments re. McDaid’s severence pay and pension (which are the system and not necessarily his doing), I feel he should be applauded.

      From the Irish Times yesterday…
      Dr McDaid said the country would be gripped by instability and uncertainty in the spring unless a new Government was brought in and claimed Government was “focusing on what is politically possible rather than what is economically necessary”.

      We just need a few more to act for the good of the country.

      (Though turkeys don’t generally vote for Christmas)

    • Ravished By The Sheer Implausibility Of That Last Statement

      All the markets ever say is “we want more,give it to us” irrespective of the true cost. Sorry for being naive but wasn’t it the markets that created this mess in the first place ?

      • michaelcoughlan

        Hi,

        McWilliams has addressed this point when he observed that once they have lent the money the ball is in the court of the borrower. All we need is the courage to face our creditors ie German banks and make them aware of our true position. They may not like us but that is the reality.

    • paddythepig

      If you’ll join in a chorus of ‘bin the Croke Park deal’, I’m with you. How about a chant of ‘Abolish the Quangos’. Or ‘Sack the Wasters’.

      • Colin

        Just remember Lenihan is the biggest waster of them all. €35bn of taxpayers’ money wasted into the big black Anglo hole alone. The sooner you wake up and smell the coffee on that one, the better for you.

  47. Deco

    I think somebody had a headline “Ireland running out of time”. Maybe you might give the link again.

    I think that this is the most description of the current situation.

    I suspect that time is running out very fast. Very fast indeed.

  48. george

    BrianC it’s exactly as you describe it. What baffles me is that Sinn Fein presented the only sound economic proposal, and people and commentators keep ignoring it, and don’t even want to take it seriously, don’t take the trouble to analyse it, and point out to others the benefits and faults. Absolutely absurd!!!

    • Ravished By The Sheer Implausibility Of That Last Statement

      Sinn Fein have been the only party that have not prostituted themselves to the almighty invisible hand. I’m concerned I may have to vote for them again.
      GERRY ADAMS FOR PRESIDENT!!!!!

      • Gege Le Beau

        Sinn Fein do look like they’ve got common sense and humanity. Could be time.

        • michaelcoughlan

          Are you f”"king joking? Democratic socialist my a*se!

          • Gege Le Beau

            Well they appear to be managing the situation in the North, working with the DUP for instance and the place hasn’t gone up in flames. We’ve tried everything else and look where it has got us, sure I have reservations, but I have more reservations when I look at FF & FG.

          • michaelcoughlan

            Hi Gege,

            The country needs NEW Left wing parties without blood on their hands capable of articulating credible alternatives. One of the guys I admire is Des Geraghty and would suggest people of his calibre. The electorate in Ireland are sophisticated and are sick sh*t of being patronised by the hypocrites in labour. Perhaps you could take this point of view on board.

          • Deco

            That would be same Des Geraghty who has been on the baord of FAS alongside Rody Molloy and Peter McLoone.

            The same Des Geraghty who has nothing to say about the FAS expenses scandal. Who never had any issues with Rody Molloy.

            Eh..I don’t think that would be such a good idea….

  49. Tim

    Folks, in case you have not seen this yet:

    http://bit.ly/aPUuJM

    REALLY helping people in default, with @Stephenkinsella and @Brianmlucey

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