November 15, 2010

Have we learnt nothing?

Posted in Banks · 219 comments ·

Less than 20 years ago, the Irish currency was devalued amid apocalyptic warnings. Here we are again, heeding the same warnings, while the Irish people face years of austerity

Many years ago, while working in the Central Bank during the 1993 currency crisis, I witnessed a particular drama playing out. Back then, the Irish authorities tried to fight the inevitable – and lost. They tried to prevent the punt from devaluing within the old EU Exchange Rate Mechanism, and they used the same language as they are using today in the sovereign bond market crisis.

Words like ‘credibility’ and ‘reputation’ were bandied about. The story line was that, if Ireland devalued the punt and did what everyone expected, the credibility of the nation would be tarnished forever.

The consensus view was that the credibility of Ireland’s entire economic policy was tied up with the currency – as Germany’s was with the mighty mark. The problem was that sterling had devalued, famously dropping out of the Exchange Rate Mechanism on Black Wednesday in September 1992 and now Ireland was too expensive as regards Britain, our biggest trading partner.

The official line was that, if we devalued, we would be cast out into the wilderness of second rate nations. However, the Irish people did not believe the government and displayed their own views by driving over the border to Tescos in their thousands, taking advantage of cheap sterling.

In the end, we devalued and guess what? The sky didn’t cave in, the world did not end; on the contrary, the opposite happened. Money flowed into Ireland, interest rates fell and the economy took off.

In fact, everything that official Ireland said would happen after a devaluation turned out to be wrong. The economy thrived once the crisis was over.

In the final days of the crisis, having said that they would support us come what may, the German and French leaders supported the franc, which was much bigger and also coming under speculative pressure, but they let the punt go. This move was referred to as a ‘sweetheart’ deal by the then minister for finance, Bertie Ahern.

The same will happen again now. A solution will be imposed on us which ‘suits’ the wider European interest. There were already signs this weekend of pressure on us to sign up for the stabilisation fund. While it will not be conceded at this stage, in the long term, Ireland will not pay back all the borrowings of our banks. We simply can’t afford to. We will not pay the people who lent recklessly to the Irish banks, and the European leaders are opening up this avenue.

German chancellor Angela Merkel said last week that bondholders to troubled countries would need to share the pain – albeit under a new mechanism which will not come into force until 2013 for sovereign debt. In so doing, she is opening up an exit strategy for our leaders.

Surely now, in terms of our bank debts, it is clear that this principle of the private investor ‘sharing the pain’ must apply and we must do a deal. Merkel is saying, in effect, that, when things go wrong, private investors should share the pain and that it is ok to burn – or at least singe – the bondholders.

As she put it, there may be a clash of politics and the markets here, but sometimes the wider political interest has to win out. Yet our government has run so far up its own cul-de-sac that, rather than reach out for Merkel’s olive branch, it responded – and I am quoting Taoiseach Brian Cowen here -Merkel’s comments were not ‘‘helpful’’. Merkel’s comments were a ‘get out of jail’ card. This is one we can’t refuse. But what happened?

We will instead impose austerity on the Irish people to pay the creditors of our banks, when even the creditors’ boss is hinting that private investors must share the pain when things go wrong. We will take the route that favours the ‘markets’ and ignore the wider political interest of looking after the people.

Let’s look at Merkel’s instincts here. She realises, like former chancellor Helmut Kohl did in 1992, that Ireland is not the issue. We are too small to be the issue; the issue is Europe, not Ireland. Back then, the fault line was the franc and if, in order to ease pressure on the franc, the punt had to devalue, well so be it. Now the big issue is the euro. If, in a chaotic period, we slip into the European Stability Fund, so too might Portugal and then, ultimately, Spain.

This frightens the Europeans because Spain is simply too big for the fund to handle. If they can get a structured solution to the Irish situation, the EU leaders might stop the debt crisis on the periphery. In the same way, allowing the punt to devalue stopped the currency crisis in Europe in 1992.

This solution must involve some renegotiation of what we owe – though it may be awhile before this is accepted, because the current intention of the stabilisation fund is merely to tide countries over by giving them cash. Debts will still be repaid in full, we are told. The trouble is that the markets don’t believe it. This is what they are telling us by bond yields of over 8 per cent: sorry, Ireland, we simply don’t believe you are able to pay us back all our money back and also take on all the debts of your banks. Something has to give.

This is not to suggest that there is an easy way out. Any deal to restructure our debts – or those of our banks – will involve haggling and risks. Our EU partners will not give us an easy ride in any deal. They see a country which is still wealthy and ask why they should have to pay our bills. We still have a big hole in our exchequer finances which has to be closed. There is no painless route out of this mess.

Yet we can start on the road back if, as happened in early 1993 before the pound devalued, we finally accept reality. Just as was the case during the currency crisis, the financial markets are sending us a clear message: it won’t work.

They were right then. And they are right again now.

  1. michaelcoughlan


    Good article.

    It begs the question when are the politicians going to start listening?

    • CathalG

      More than Likely when its too late Michael, I suspect.

    • The Goverment wont listen that is for certain, that has been shown time and again, they have commited to a single track idea with the Bank Guarantee and are not strong enoughto say oops we were got that wrong. No they will carry on regardless rather than admit a mistake, great leaders in business, politics, life have one thing in common, they are pragmatists.

      You have to be able to look, listen and feel what is going on around youto able to assimilate the information and deduce the correct action.

      The only people speaking for us are a few Journalists / Economists, now it is upto the opposition to do the right thing and speak for us, that will be the measure of their worth.

    • shtove

      Karl Denninger has had his eye on Ireland for a few years. Here’s his “polite” advice to the Irish people:

  2. David is right on the button here!

    Batt, Mary Hanafin, Dermo Ahern zombies trooped out yesterday to say speculation Ireland going for EFSF was ‘fiction’.

    Moribund Government sinks lower in credibility as the bunkered crazies try to transform reality into their fictional delusion. The Great Birnam Wood of Dunsinane(international markets) is coming to this Government.

    If we had a smart,tough, reality based, negotiating team in Berlin, we could use the leverage of contagion of the euro, to negotiate a write down of Anglo’s debt and do a deal with bondholders.

    Instead, we’ve incompetent at best, corrupt at most, dopes leading the negotiations. They’re out now to extend the mess they’ve made of Ireland Inc to include the euro and a rotten deal with the IMF and EFSS to pay up Seanie’s debts and keep their croney bank open!

    Endgame approaches. Can the EFSF avoid the Grecian sirens being blown by these Irish gombeen demolition experts and do a smart deal for Ireland and Europe?

  3. David is correct, we are small, we are not the problem but we and our kids will pay for the incorrect decisions being made on our behalf. The Goverment do not have a mandate to inflict this on us. To say we should burn the Bond holders is wrong, it is nor a situation of burning, it is simply a case of them reaping what they sow, they are the risk takers here not the Irish Citizen nor the new Residents of our country.

    • ouldbegrudger

      Spot on, mac63. I read lately that our “banks” owe the German Banks 115 billion and change. The main losers if we default are going to be the big players. The relatively poorly discussed and understood global derivatives market is the invisible elephant in the room. In this largely unregulated and under-reported market, financial liabilities of all sorts are traded like insurance policies. A hefty portion and perhaps all bank bonds issued by the our banks are insured against default. The instrument is called a Credit Default Swap (CDS) and the size of this market in financial terms rivals the GDP of entire planet. The losses inflicted by Ireland by simply entering bankruptcy resolution processes would be shared by more than just the Germans. CDS payouts would have come from New York, London, Sydney, Tokyo etc. BUT we are going to cut the body core-temperature of our OAP’s to save the Christmas bonuses of bond vigilantes in New York and London who in any case can’t loose.

  4. Philip

    I think the official line is that Ireland is looking for a hand with the banks and no more. Is this a case of Let the EU look after our banks (nicely?)while not doing too much damage – the odd singeing etc. – while Ireland imposes austerity measures to handle the remaining mess within its own borders. Maybe the banks get the wine lakes while we get to munch on cheese.

  5. VincentH

    In Ireland, Value is the word that people are missing. And there just isn’t any, even now.
    And when will they realise that the Banks have to burn in a monetary union in order for things to devalue. If you cannot devalue the Issued Paper then you do the next best thing and devalue the secondry paper of the banks. The banks are Limited Corporations, so why the heck, and I’ve another word BTW, have we gone and acted like Names at LLoyd’s.
    I sorry, but the advise being served to the Government is criminally wrong. I’d even go so far as to say that traitorously wrong.

    • Gege Le Beau

      @ VincentH – spot on. Until value returns people will keep their few bob, we are over priced across the board by at least 30%, house prices have not bottomed out, another 12 months needed to shake the money men to their senses, still the hold out.

      Over priced, high unemployment + austerity = a destroyed economy.

      Lost decade after which we will be patronised all the over again by Lenihan, Cowen, O’Rourke’s offspring.

  6. Gege Le Beau

    British getting nervous, Guardian homepage, number 1 story

    Ireland bailout: UK taxpayers could face £7bn bill

  7. Gege Le Beau

    Age of Oppression 1172-1922
    Age of Independence 1922-Present
    Age of Economic Decline & Emigration 1922-1997
    Age of The ‘Paper Tiger’ 1997-2007
    Age of Collapse 2007-2010
    Age of Austerity 2010-2020 (Lost Decade)

    Periphery and Core – has echos of World systems theory by Wallerstein, useful language.

    Periphery in trouble (Greece, Portugal, Ireland, Spain etc), problems could potentially spread like a piece of paper on fire to the core. The same core that kept interest rates low and made massive amounts of money available to the periphery (do you think the Germans and French did not realise the risks involved, come on), easy credit, little to no strings attached.

    If the Irish Government had any cojones they should have looked at the books, worked out who lent what, let Anglo go to the wall and let the lenders and bondholders take the hit. Moral hazard works both way, especially in high finance, for lender and borrower, they know the game. Casino Capitalism where the players at the table should have take the hit not the spectators.

    But as we know, in business run societies where profit is priavatised and debt socialisrd, the average citizen takes the lash in the form of debt repayments, mortgage interest hikes, government taxes, and now this giant bailout. The corporates, the banksters, the politicos all emerge largely unscathed. Even those forced out off the table get golden handshakes, pensions and set themselves up as ‘financial advisors’ to the players, they have no problem reinventing themselves, no stigma, yet steal some food from an convenience store to feed your family and expect the SWAT team in an hour or less along with your photo in the local rag.

  8. It looks like Angela Merkel is now on the side of the “ordinary” Irish people, because bless us, but our own ruling elite just don’t understand and don’t know what to do.

    Greed was not at the route of our economic collapse, it was plain old stupidity and incompetence on the part of the ruling elite across so many sectors of the “so calle” upper echelons of our society (trumped up). While they are still there, our country will continue to be managed stupidly, but hopefully for not too much longer. We are in the end game, big changes are coming soon and we must ensure they are the right kinds of changes.

    The question remains as to how bad the damage will be and what will be required to fix it.

    There are many smart and competent people in Ireland and we can fix the problems – we just need to get the current buffoons & incompetents out of the way so we can get on with the job.

    The day will come.

    • uchrisn

      I think the Europeans must be ired of the sight of Cowen and Lenihan by now. They must know that they are looking after the Irish elite. Remember the Europeans told our government that it was paying too much for the NAMA loans and ripping off the taxpayer. They are now saying this again for the bailout of the banks.

  9. NO HOPE

    Lenihan thinks ther is no difference between the state and banks. He is trying to cod the EU now with a plan for rescue “just” for the banks. Watch the bonds soar to 11% just on this news. he has to get out of there and we need soemone in quick who can run the country. God, it`s too late though. We are all FUBAR………

  10. dwalsh

    The Irish elite do not act in the best interests of the ordinary Irish people. They never have and never will. They act in their own best interests…which are bound into the European and global banking and political systems which now effectively determine our fate. Their hands are tied. Our sovereignty is a myth. The era of nation states is ending and a new global world order is emerging.
    The only hope for the ordinary people in all this is for senior political figures with some real power (such as Angela Merkel) to wake up and realise the insanity of what is unfolding — i.e. that the ordinary working people must pay not only their own debts but the debts and losses of the bankers and speculators; that the capital markets must be paid in full.
    To balance the cooked books of the casino capitalism that ran amok in the past 20 years will require generations of debt slavery. The real problem is a derivatives bubble that is estimated to be 1.5 quadrillion outstanding. On a planet with a GDP of maybe 65 or 70 trillion max it was sheer lunacy to think such a bubble was sustainable. Free market financial capitalism has bankrupted the entire planet and demonstrated that it is not a rational or sustainable system. Greenspan, one of the primary architects of casino capitalism, has admitted this much. But he and his masters should never have been allowed to play with the lives and livelihoods of the population of the planet in the manner they did. People like Greenspan and Soros and their masters should be tried for crimes against humanity. But they are instead feted by a sycophantic press and a benighted public.

    • Deco

      { The Irish elite do not act in the best interests of the ordinary Irish people. They never have and never will. They act in their own best interests. }

      100% correct. They always have, and always will look after themselves and use the rest of us as a bargaining chip to secure their own power and wealth.

      Capitalist consequences for capitalist misadventure is the solution.

  11. Deco

    Have we learnt nothing ?

    The headline at marketwatch reads “Dublin dithers over bailout”. Don’t worry folks we elect ditherers not leaders.

    The indications are that Kildare Street has learned nothing.

    Yesterday the main economist at ICTU was saying that we should have reduce expenditure by 1 Billion Euros. That means moving from a 25 Billion Euro deficit for the cost of the state in 2010, to a 24 Billion Euro borrowing requirement. This is the sort of stupidity you get from the number 2 influencer in public policy these days.

    ICTU have learnt nothing.

    IBEC still have not admitted that there is a serious problem with Irish management practices. No admission that the consensus approach of the social partnership is creating daft policies. No admission that certain IBEC members are responsible for our uncompetitive cost of living, and are continuing to extort ridiculous margins. No mention that the state simply cannot afford the spending plans being proposed by Honest Tom in the CIF.

    IBEC have learned nothing.

    And AIB. What is the sound coming from Ballsbridge. Nothing. Complete silence. AIB have circled the wagons, and have nothing to say. Nothing. AIB have produced scandal after scandal since the mid 1980s, and AIB still go from mess to disaster. AIB never learn anything.

    The problem at this point in time is not the state finances. The problem in 2011 will be the state finances.

    There seems to be a lot of presumption about austerity, as if austerity is some sort of choice, that is decided upon to put the public in misery.
    Look, we have not yet seen real austerity in this country. Just go to the centre of Dublin on Saturday night and you will see that austerity is still not here. Just watch the new motors moving around D2 and you will see that many are nowhere near austerity.

    Austerity is not a choice. It is a safer, more civil and more intelligent, option to outright bankruptcy. Austerity is inevitable, when your cost base has become uncompetitive, and when you have massive debts to pay off. We are dealing with both these issues. And the longer we postpone austerity, the higher the probability that we will eventually go bankrupt. The state has revenues that are equal to 2003, and costs that are higher than ever. We are not going to tax our way out of recession, though taxation increases are inevitable if you expect to fix as many short term commitments as the state is now trying to remedy.

    • Harper66

      Have to hand it to you Deco, right on every point.

      ” we have not yet seen real austerity in this country. Just go to the centre of Dublin on Saturday night and you will see that austerity is still not here….”

      I think this is the reason why there has been no real opposition to governement policy (or lack of)or anglo bail out. It will only be when people are hungry and genuinely doing without that people will start to sit up and take notice.

  12. David,
    Now that our economic woes are the topic of discussion 24-7 the fallacy that the savings of the German people had something to do with us getting easy credit is being aired a lot and you are being quoted. I think it is now time that you cleared up this misunderstanding of how credit is created and issued.

    German banks did extended credit recklessly to the PIIGS. The German people are too interested in generating real wealth through REAL CAPITILISM so their banks carried on their system of creditism with swine’s abroad. Banks will do their business which is to make profit from extending credit the ECB has known that the money supply was expanding at over 8%pa, they even report it to us monthly here . Even a donkey could tell that a system where the debt base money supply doubles every 9 years but wages which track CPI would only double every 30 years was going to collapse.

    While your analogy of the German saver was ok to explain our woes 3 years ago with a disinterested audience it is now destructive. Set the record straight.

    Besides this system being a total fraud the ECB are responsible for allowing this expansion to take place ignoring the bubbles it created just because HCPI was inline with their target. We should return to the PUNT but I would like you to step up. Should it be a Central Bank Debt based system or should our Treasury issues and spend debt free money into the system? Of course you may have other ideas but just to suggest going back to the Punt is not good enough.


    • Deco

      Never mind this idea that the German saver is the problem. What about the role in all of this of the Irish consumer and reckless consumption ?

      A bit like Peter Schiff’s China – America trading arrangement description.

      We have borrowed money from German banks to buy German cars, and to go on holidays in Franco-German Airbuses, so that we can keep up with the Joneses in or neighbourhood.

      All that baloney of “bullishly optimistic” and “spend it before it’s all gone”.

      Maybe the problem is the Irish lifestyle concept, and this tendency to go from euphoria to depression, and all the sacred cow intellectual contructs that are evident in everyday phrases like “sure, it has to be done”, “more where that came from”, “I am not worrying about tomorrow”, “I am not one for panicking”, “I had too much to drink and got into an accident/fight, etc”, “something will come along”, and “let’s celebrate anyway”.

    • wills


      Maybe just maybe skullduggery took place in the interbank markets and somebody was telling porkies to get their trotters on ‘pots of gold’ never before dreamt of!

  13. BrianC

    Firstly the Irish Govt does not have one iota of what they should do and how they should do it.

    Secondly the Irish state is bankrupt something they do not want to face up to. They bankrupted Ireland in the bailout schemes benefiting the few at the expense of those who cannot pay but must now do so out of futrure earnings. The ridiculous Croke Park agreement is far too expensive increasing the burden of debt further catalysing bankruptcy. And there is a whole pile more but no need to bore you and state the obvious.

    Thirdly FF know that if the IMF come into Ireland that is the end of their party forever as anytime they stand for election they will be met with the cry ‘not alone did FF bring the IMF to Irish Shores they installed them at the heart of Ireland which is no longer Ireland Inc but Ireland IMF (sorry David for using the Inc bit). The FFers know this so they have to find another guise to permit entry to Ireland hence the Trojan horse ECB money to refinance the banks.

    Fouthly the Irish people are too stupid to see this.

    Fiftly If you really think that Angela is acting out of the goodness of her heart appeasing her constituency of fighting to preserve the EU then you really don’t get the picture. This is not about saving the EU cop on we are less than 1% of the population of Europe the value of our economy to Europe is so little it is pointless even equating it. This is all about how to draw down the money to pay out to the bond holders that engineered soverign debt status. They just need to find the right wording to put on the receipt that will be handed to Sean agus Maire.

    Ireland is being forced to live a lie supported by the deceit of the Irish Government.

    • Yeah, just heard Dick Roche embarrass himself on News At One by not being able to answers some key questions re inter bank lending, capitalisation, central bank and NTMA management of current negotiations.

      He said ‘for good reasons’ we are kept out of the frame of this detail, but the gombeen went out to say speculation was damaging. Obviously he was inviting us to share his ignorance and blind belief.

      Er no, this type of political ignorance is damaging. It would appear the gameplayers in the NTMA and CB are issuing policy edicts to the gombeens without much explanation.

      The gombeens are sent out to dampen speculation in the media, but end up deepening speculation by their lack of grasp of what is going on.

      These guys are like shell shocked soldiers on a defeated battlefield after the battle has moved on.

      Listen to these sirens at your peril.

  14. Deco

    By the way, I see that the comparison is being made to the early 1990s, and there are definite parallels. And today Portugal in indicating that it might leave the Euro. No idea how this will work out, in fact it will be a disaster for ordinary people if it happens.

    This situation is actually worse than the early 1990s. The main reason being that the behaviour in the previous decade. In the 1980s there was nowhere near the level of debt buildup or nonsense that has preceded the current crisis. and people were very pragmatic in deciding how to deal with the crisis. Today it seems that nobody wants to give. Everybody is drawing battle-lines in the fight for resources, bailouts and entitlements. We have an environment where nobody can admit to being responsible. Everybody has an interpretation of Keynes and a belief in their demands being a Marxian necessity. Even the finance-capitalists are in line for the proceeds of other people’s sweat. And in addition we have clowns like Suds suggesting fixes that are so ludicrous, which in the 1990s would have been completely ridiculed – but today get media coverage. Maybe we have become dumbed down that we are all gone soft.

    The ECB though, has decided to try and control this from an earlier stage, and not let it develop into a Greek style drama – where Greece was bailed out at the last hour. In fairness the ECB has learned something from the previous crisis.

    And Merkel is more afraid of the German taxpayers, than she is of the investment funds in Frankfurt. Effectively she has more courage than the collection of drunks and spoofers that sit in our government.

  15. Gege Le Beau

    Lenny’s Budget 2010 ‘the worst is over’ may well go down with Neville Chamberlain’s ‘peace in our time’ as one of the most shortsighted comments in political history (they seem to have a knack for it, with Lenny Snr commenting during a period of mass emigraton about the size of the island and the inability to keep everyone on it, and there is Lenny’s brother’s ‘kebab’ comment in relation to Turkish employees of a consturction firm who had pay
    withheld, nicely exposed by Joe Higgins).

    An election in early 2011 will sort a lot of them out. It is a real pity there isn’t a strong leader who will tell the markets to get stuffed and give some confidence and inspiration to the Irish people. You can see from a British perspective why Churchill is held in such high esteem, people disagreed with him on a lot but the man kept the country together at a critical moment when his cabinet in 1940 encouraged him to surrender to the Nazis, he said NO!, that was leadership. I know the Irish have their own take on Churchill and rightly so but for that one move he earned his place in British history and garnered enough votes in the recent BBC competition to make him the no.1 British personality of all time.

  16. Deco

    Wayalat’s interpretation of the Irish fiscal problem.

    As David stated in “Follow the Money”, it is a case of VietNAMA…trying to prevent the dominoes from falling with Cowen as LBJ…

  17. Gege Le Beau

    The Spirit Level, important book, just updated….

    Yes, we are all in this together
    Richard Wilkinson and Kate Pickett

    • ict

      The Spirit Level; One of the more insightful books that I have read for some time.
      If there is anyone on this site who has not yet read it yet, please do so now.

      Another recent publication, which has got less attention, but to my mind is even more thought provoking is
      “Prosperity without growth” by Tim Jackson (Earthscan 2009).
      I know it may sounds counterintuitive, if not sacreligious, to orthodox ecconomists (Even DMcW)but I would urge you all to read it with an open mind.

  18. As long as that solipsistic depleted mindset of whale blubber, the highest paid politician in Europe and his mandarins are allowed to continue to commit treason, Ireland is deprived from learning any lessons.

    • DavidIreland

      Solipsistic. A good word that fits – I had to look it up.

      I think that for someone relatively privileged, growing up being told how incredibly intelligent you are can be a big mistake. It’s good to give kids confidence but it has to be balanced. There’s a guy in Zimbabwe who has ruined his country with his arrogance and hubris and his tribe seeing no fault in him.

      Well, the scale of the problem is much less here, but it’s the same problem. Bad leaders with enough arrogance, hubris and brainless cheerleaders from your tribe egging you on can ruin a country.

      People in positions of influence across all walks of Irish life – from the president down – should have spoken up sooner.

      That’s my honest view.

      • Gege Le Beau

        I agree. But Upton Sinclair was right when he wrote

        “Impossible to get a person to understand something when their salary depends on them not understanding”.

        And so it goes for this little mad island.

        As Vincent Browne pointed out and William Golding alluded to brilliantly in ‘Lord of the Flies’, private, elitist schools can produce a type of sociopath, hell bent on power and status in accordance with their apparent birth right and own sense of entitlement and superiority. Browne to his credit questioned Father McVerry in relation to the Jesuit education system for instance and the possible role it played in leading us to this crisis, McVerry put his hands-up and said he was personally against it.

        Some may say not all received private education or it does not play a role, others may seek evidence or proof like Thomas’ finger in Christ’s side, but if you look across politics and business I suspect the vast majority were educated at elitist schools with a few exceptions coming up through the school of hard knocks. In any case, the discussion seems a tad academic perhaps given the firestorm about to break loose.

        Lord of the Flies

        • Deco

          I think we do have a problem with regard to the ‘education of sociopaths”.

          I remember watching a documentary a few years ago about a posh school run by the Jesuits near Naas called Clongoweswood. Not joking, but the entire program was about “rugger”. I did not see the teacher spend two minutes with them on Algebra or Wave Theory.

          At the end the teacher admitted…it is about freindships..building freindships with the people of influence and power…

          I get the feeling that were it not for the rugger, and the elitist “them and us” and “bonding through shared contempt” that the parents would send them elsewhere.

          Anybody who thought the that the Church was in charge, would be put in no doubt, after listening to the parents. A really superficial lot they all were. I got the sense that the Jesuits were there because they thought they might influence some of the kids. The basically accepted the power of these people as unmovable. And that they had to deliver what the parents wanted. Mostly the parents wanted exclusivity, and a experience with your own lot, and being absent from the others. The values of the parents showed us the values that the boys were really getting. It also showed what they would filter out. The entire experience was to make you feel special at being one of the elite. Their entire point of reference was which school and which year. If you don;t register then you get contempt.

          You will never tax these people. But if you allow capitalist consequences for capitalist disaster, then they will diminish themselves.

          The solution is to more meritocracy so that the kids outside this system, get everybody else gets an opportunity, on fair and equal terms. Unfortunately, due to the mindsight in the ISEQ and IBEC companies this takes a long time to build. But, it is happening in the multinational sector, and in technology professions. Americans, Japanese and Germans only care about your ability to get things done. Try telling an American that a Northside address or deep country accent is a reason to bin an application. That sort of medieval nonsense does not matter, except to the clique themselves.

          By the way, the biggest shock to the elite in Ireland was the Nouveau Riche of the speculator class. It spurned many dentists, lawyers, doctors and the like to borrow like fools and throw money at Quinlan Private – which is now on the road to bankruptcy. It also caused the duopoly, AIB/BoI to try and beat upstart Anglo. Basically these people don’t know how to handle competition, when it is beating them, and they lose the plot trying to respond.

          • michaelcoughlan

            Hi Deco,

            Your post started off talking about sociopaths and the point started to drift off into a critique about the private school system. I feel we should keep focused on the fact that sociopaths are a huge part of the problem and sideline the other issues. You could have pointed out for example that only a sociopath would drop off the heir and the spare to the school and leave them without the nurture and warm relationships of home life leading to the production of guess what? Another generation of dysfunctional sociopaths.

            One of the most important points which needs to be made I feel is how ordinary citizens can become lured and mislead by the behaviour of a sociopath. If for example a sociopath is in charge of a company whose shares rise in value as a result of his/her behaviour and subsequently the citizens get sucked into a rush to buy shares in such a company then the fact that ordinary shareholders are backing such people with their money will lead to a prevalence of such people in senior positions.
            As citizens of a great Republic we have the right to choose not to invest in such companies and thereby deny these people the oxygen to breath. I can’t imagine in the me Fein Ireland of today that my idea would catch on but then again I am one of those people with a particularly strong country brogue.



          • @michaelcoughlan,

            I think Deco was making a point re meritocracy in the US where gifts/talents mean you have a greater chance of getting ahead with these than in a croney, nepotism based society where often such talents are targeted as the enemy of society! Perhaps such values lie at the root of where we are now.

          • michaelcoughlan

            Hi Cweb,

            Thanks for your response. Deco started his post with a statement regarding the education of sociopaths and not a meritocracy. However your point is well taken regarding meritocracy but the cows will come home before I will be convinced that the USA is a meritocracy. This is because it was in the USA where the whole trouble with the Credit Default Swaps and securitisation of debt which has brought the world into such a mess originally started. I don’t believe that a meritocracy produces such a system I believe a kleptocracy does. And with the USA the sociopaths in control of such a kleptocracy always have recourse to the world’s largest military when things go as badly awry as they have. Not that the sociopaths in charge will lose much sleep over the whole issue mind you.

          • @michaelcoughlan says:

            Yeah, I agree with you re ‘kleptocracy’. It’s certainly the way US is going though some would say, just look at Obama’s roots, or say how the Irish rose to political power in the US. Certainly look at the Goldmann influence on the FED as another example of ‘kleptocracy’, or the way Obama has knuckled under to the banks! Re ‘sociopath’ or ‘lack of empathy’ these are medical clinical diagnosis that in the extreme I would imagine militate against any form of social relationships. This would be a burden that would damage any form of leadership.

          • michaelcoughlan

            Hi Cweb,

            I am delighted you responded because I can clarify the point further for you regarding sociopaths. You suggest that a “’sociopath’ or ‘lack of empathy’ are medical clinical diagnosis that in the extreme militate against any form of social relationships. This would be a burden that would damage any form of leadership.”

            If you define the world in a manner in which a sociopath would view it them I respectfully suggest that the lack of empathy is an enormous strength (twisted logic I know) because the sociopath is only concerned with one’s self not social relationships or effective leadership. Consequently they will never have to live with the physiological consequences of their actions because the part of the brain which would leave the rest of us riddled with guilt does not exist or does not function in such an individual. Therefore they can rob “a kleptocracy” with abandon their sole purpose being to impress other individuals with as sick and disgusting a world view as themselves.

        • tony_murphy

          I totally disagree the rich schools are too blame. Run of the mill socialist speak. Blame everything but the ordinary or poor standards one size fits all crap of the liberal left.

          Mrs Bucket types who hate to see anything that is not uniform, nice, tidy and equal. Behind it all, it’s questionable how much they really care about the less well off in Society. Some just see a gap in the market and go for it. Tony Blairs Labour anyone?

          Big government and the welfare state are serious problems, it’s the same all over Europe. Labour = Big government + welfare state = Absolute disaster

          I went to a vocational school, and it produced in the main, nothing but wasters who would add no value to any economy. I was lucky to escape with an education, it was in spite of the school I went to.

          The socialist egalitarians are what Irish people have most to fear from following the next election

          I’ve said it before and I’ll say it again. Ireland will not be fixed by socialism. Get with the programme and encourage the highest standards and let nothing get in the way.

          • Harper66

            Judging by the tone and tenor of your post, I don’t think you did escape with an education, not of any consequence anyway.

            I assure you the “highest standards” are not the sole preserve of such institutions or of those that attend them. In fact considering what has been done to this country and by whom I would say it would be very easy to offer an argument to the contrary without much effort.

            I cringe when I read you put down your classmates “as wasters who would add no value to any economy”. Clearly, Tony you’re a different breed entirely. You’re a man that looks at the big house and sees his betters. Good man.

          • BoCualain

            Another of the “take your medicine slave” brigade. The empathy and openmindedness you show is truly enlightening. Unlike what the establishment would like us to believe and have done so for the last 20 years, this is not an “economy” any more than a home is the weekly shopping. And the programme to which you refer is of course none other than the harsh medicine for those least capable of affording it and bigger bonuses for the crooks and conmen who got us here. Like a backstreet moneylender to a harried mother we are being threatened and blackmailed. We’ve had nearly 100 years of your high standards in provate enterprise, I think a small bit of socialist egalitarianism will hardly do any more damage, and more than likely will do far more for everyone including the small businesses on which the country is reliant on to get out of this crisis. I can’t say anything about your vocational school education except to say that if you are its example then I pity the rest.

          • Deco

            Tony Murphy.
            I hope I am not providing a perspective that in anyway can be justified for some Marxist interventionism.

            You are correct, when the Irish Labour Party gets into power there will jobs for all the cronies in watching other people’s affairs. This is exactly what happened in the 90s. The Greens, and what John Mcguinness called the FF Officer class are doing the same thing already. We already have 800 quangoes.

            My point is about the behaviour of the people at the top in Ireland. They are not educated like the rest of s to perform. They are educated to behave a bit like their peers in Britain. Now, the biggest thing that the British Labour Party use to get the vote out in Britain is the behaviour of the decadent rich in Britain.

            I suggest a different approach. Basically, let their ineptitude be their downfall. No bailouts above a certain level. And secondarily, we need to investigate how price rigging, is protecting people at the top in Ireland.

            One does not have to be a socialist to have an egalitarean outlook. But the socialists deliberately set out to control this in the public mind, making people thing that you do. By this means they can control voter behaviour. Because most socialist outfits aim towards a centralization and control.

            I agree with you regarding choice. But both crony capitalists, and socialists want to contain individual decision making to support oligopolistic behaviour. In Ireland we must understand the need for an alternative between these two. Because both wish for there to be only these two options. Just look at all the medical card millionaires, and the solicitors who make a mint from the Free Legal Aid Scheme with outlandish rates, in what is obviously a market distoring arrangement. The taxpayer needs to get a better deal. But the real beneficiaries always march out the plight of the underclass in their public negotiations in a tactic that is used to justify such behaviuour.

            At the end of the day, I suspect that we are probably all more in agreement with each other, than we currently realise.

          • Deco

            I am criticising these schools not because they are for the rich. I am criticising the disfunctional thinking that regards the socialiazation processe attached to playing rugger as something that is more important than an education.

            Education is about something more important than that. It is about the individual attaining a greater mastery of human intellect, which enables them to attain greatness in their ordinary lives, and attain some success. It is as much about the student as anything else, from what I have seen.

  19. adamabyss


  20. Gege Le Beau

    Cowen may not want to get branded as the Taoiseach who called in the IMF, enough money borrowed till mid-2011, so an election before then seems like a dead cert.

    Financial Times: Irish elite keen to avoid humiliation
    By John Murray Brown in Dublin – November 14 2010

    Coverage of Kileconomics

    Three economists walk into an Irish bar…
    By Daniel Pimlott in Kilkenny

  21. wills


    I think the articles dots you write on are connected there and I reckon its drawn a picture which to me reeks of ‘insider factional wars.’

    The insider crony networks in ireland creamed the retail banking sector inflating a property bubble using the euro experiment and the inter bank lending markets and money fell from the skies for 10 year!

    The ECB seem now to me judging by the noises across the media the ECB appear to be getting jittery regarding the specific point as to wether they’ve been taking for a ride too by the leprechauns are their pot of gold POnzi property pyramid lunacy.

    IMF / bail out fund coming in is a magnificent get out of jail free card for the Gov. The dirty work is left to somebody else to cut the fat off the sirloin stake.

    So, how is it the gov are stalling on this most excellent of get out solutions!

    Could it be that the gov are freaked by the prospect of any agency like the IMF or EU stabilization fund getting a good look under the carpet here. What might they find under there that up until today has remained unreported?

  22. paddyjones

    Economics do not apply to our situation, we cannot leave the euro because our debts are in euro so a deflated punt2 would result in even larger debts. We cannot do anything about interest rates either. So the only option open to us is austerity. We cannot default on debts as they are almost all ECB debts.
    We owe the ECB 90 billion in intrabank loans and then there is the ECB loans for NAMA of about 40 billion.
    We owe bondholders 90 billion for our ordinary national debt which will soon be converted into EU/IMF loans. So at the end of the day all our debts will be EU/IMF/ECB loans.
    You cannot bite the hand that feeds you. We will need to get to 3% of GDP by 2014 and after that it will be time to start repaying debt which will involve even more austerity. The bondholders will keep clear of Irish debt for years to come , that avenue is gone forever so the Government hoping to return to bond markets next year is not going to happen.
    We will eventually be governed by the EU/IMF maybe next year and Ireland will cease to being an economy and sovereign state. Ireland will become a debt repaying organisation.
    Economics do not apply accounting applies.

    • ict

      Maybe I’m showing my ignorance of ecconomics here, but are our debts in Euro?

      Or at least if we broke away from the Euro, and set up our own currency called the “Irish Euro” for the sake of argument, then who is to say that bonds bought in Irish banks or Irish Govt bonds etc would not now be denominated in (presumably devalued) “Irish Euros” as opposed to, for want of a better expression, “German Euros”.
      That is to say, which is the “real Euro”. Our breakaway version, or the Frankfurt one, (bearing in mind that there would probably also be Portuguese and Greekk Euros by this stage).

      Would that not be a way of using the market, as it were, to decide how much of a “haircut” those who were stupid enough to have bought various bonds in the Irish ecconomy during the boom should have to take.

      Or am I being naive?

  23. Philip and I suspect 12 months from now, Ireland will be no different with the added complication of the US going faster down the tubes because the Arabs have pulled the plug on the Dollar.

    I think we had a time about decade ago when so much money was looking for so much yield and like greedy little kid, lapped up all the ponzi schemes there were to be had. I do not blame savers (Germans or irish even). Blame the silly bankers who were competing with one another for commissions. This had to happen. This is hypercompetition and capitalism trading the most mercurial of assets…cash, money…

    Combine this with a nation who had recently learned how to tie its shoe laces, let alone be a buyer of beemers, a nation with the self confidence of a gauche teenager. Red faces among our elite.

    Our Elite are bust. It’s unravelling. Guess what? They’ll remain that way until we start making our shoelaces.

  24. Smiles of satisfaction from Government spokespeople the spreads are coming down currently around 8%!

    (OT anybody got comprehensive list of urls for breaking bond spread info).

    Smiles based on the view the markets following the declarations of same spokespeople that Ireland will not go for bailout and will pay back every last penny!

    WrooooooooooooooOOOOOng Aagain!

    Spreads lowering cause markets believe Ireland Inc might possibly be saved with a good bailout deal from the EFSF.

    Little do the markets know what our gombeens have in mind. If they did, spreads would be at 100% !!!!

  25. Agata

    Such a pity that young people will have to pay for the wrong doings of the country in years to come.
    It’s about time that government should stop crying over spilt milk and get their act togehter.
    When will we get out of this mess? Is waving goodbye to the euro a possible solution to our trouble?

  26. Tim

    How the BBC is reporting Ireland:

    It is simply not the case that our leaders do not know what they are doing; and FG and LAB have all agreed with FF/GP that the austerity measures already inflicted on the little-people have benefitted the wealthy so far, though driving the economy further downwards.

    The markets know this and so the spreads grow with promises of further cuts.

    Our politicians also know this, buth they will all continue creaming-off as much of Ireland’s wealth as they can for themselves and their friends, for as long as they can, before anyone else like the IMF gets to take over and discover the truth.

  27. Had a conversation with an American co. last week that were looking to move to Ireland in the recent past. They’ve abandoned that plan as they no longer believe our corporation tax rate will be sustainable. Ironically, this may lead to more jobs being created in Germany. First hand example of how Olli Rehn’s pronouncements are creating negative FDI sentiment towards Ireland. We need to stop kidding ourselves that we can prosper (or even just avoid falling into the ocean) without some degree of economic independence.
    Then we had the announcement last week that governmental bond investors won’t share in bailout costs (i.e. take a
    haircut) for any existing debt but will from 2013 onwards. Just putting myself in that position, I’d be VERY SKEPTICAL about the ability of struggling debt-laden countries to rollover debt in 2013. Indeed the closer it gets to 2013, this should increase EU governmental debt volatility. The EMU appears to be saying they hope things will be improved/stabilised within 2 years and that deficits will be cut. These aspirations will be contradictory in practice. I just can’t see their strategy working.

    • “Ironically, this may lead to more jobs being created in Germany.” No, it won’t. We can easily sustain a rise in CT to 18%, see debate here:

      • I suggested a possibility. You’re stating a definitive and that’s fortune telling. I’m not against a modest rise in corporation tax. It needs to happen given our economic difficulties but I don’t believe Ireland is so attractive to companies that they’d move here with a corporation tax of 25-30%. Are we really comparable in terms of infrastructure, critical mass of wealth, workforce, opportunity, education and power such that we withstand a direct comparison with the UK or Germany? Not on our nellies!
        “If we haven’t the confidence and self belief in ourselves to raise the CT to a decent 20-25% at least, we should shut up shop.”
        There’s [m/b]illions in the difference for our multinationals between 20 and 25%. Raise it to 25% and we will _have to_ shut up shop. It’s not a case of national pride. It’s the 1st hand experience of the IDA in attracting businesses here.

        We have wage stickiness due to personal debt so we can’t discount wages to compete with Eastern European countries. We’d probably write them off as not having as high an education standard or poor infrastructure. That kind of complacency isn’t backed up by significant economic strides in countries like Poland. I believe we’ll lose much needed jobs to other EU countries with different competitive advantages without the lure of significantly lower corporation tax. Some jobs we’ll lose anyway because of wages but companies leaving in a recession is a triple whammy. Lost jobs, lost tax take and increased social welfare.

        Ireland before the low-corp tax strategy was in the dark ages. 25% corporation tax could send us back there on a wave of hubris.

  28. tony_murphy

    From todays Dailymail….

    The Dublin government is understood to have held ‘preliminary’ discussions with the EU about an aid package after fears grew at the weekend about its levels of debt.
    The EU wants Ireland to accept emergency funding but it is thought the loans will come with strings that will effectively dilute its sovereignty.
    And last night Treasury officials in London confirmed that Britain was prepared to help out because Ireland is a key economic partner.
    They fear the crisis engulfing the Republic will spread across the EU, which accounts for 60 per cent of UK exports.
    Sources close to Chancellor George Osborne made clear that the Government views the Irish crisis as much more important for Britain than the Greek bailout earlier this year – in which only members of the eurozone were forced to contribute.
    One said: ‘It’s not in our interests to see Ireland get into trouble.’

    Read more:

    • Black Cat

      If you read the guardian readers comments on this issue most of them are in favour of putting up the money for Ireland as they recognise our interdependence but guardian readers and daily mail readers are a different breed

  29. Black Cat

    Constantin on frontline says a bailout is bad – each individual Irish person will have 33 grand of debt over their head

    • joxer

      every economist David mcWilliams included says how things should be done and no matter what is done it’s easy being the hurler on the ditch, what good is writing articles and commenting on tv, its just more useless shite like we hear from fianna fail, as in fail,
      we are fucked and thats it,corruption cronyism and mass stupidity

  30. Freethinker123

    You got it in one!!!
    and whats worse is these situations are designed and not contrived, make no mistake about it, capitalism may like to poo poo its equally corrupted and ineffective predecessors of communism and socialism, but all of’em are one big feckin pyramid scheme. Those arrogant and mypoic institutionalised gobshites in gov, are their own worst enemies, and we’re equally wasting the opportunity to get out there and change the course of things, simply and unfortunately because we’re stuck to operate within the same defunked paradigm as they are,and indeed the greater EU and world for that matter!
    If we could understand for a moment that part of being here on this plane of existence is to master our abilities of thought and emotion, energy and balance in all aspects. It’s unfortunately the case all through economic history that, essentially the power and administrative structures that have come and gone, as much as today, is a self serving entity in the guise of diplomacy..governmentts don’t mean shit, banks and corporations rule the world through energy and money control via resources.

    However, right! you may say..then what the fuck do you propse to do about it..? well I know of one man who has spent his entire life defining and designing ‘a’ alternative by simply extrapolating what we have today, here is his website

    you’ll soon realise, and please imagine again for a moment, if we were all to get behind this what a world we’d have..i know that sounds ultimately corny and cliche, but this guy isn’t messing around he’s a professional offering a practical and capable solution..he’s the real deal!

    i’ll leave you with a clip from the movie ‘The network’ from 1976 I think it sums the world ‘at present’ up nicely

  31. Freethinker123

    Our aim is collect over 50,000 signatures and then present them to the President of Ireland and call for the instigation of a referendum on this issue to be held alongside the one deemed necessary on Childrens Rights.

  32. Who the heck is the pundit Prof John McHale, economist, NUI Galway. Every second day he’s hauled onto Pravda RTE to beat the Government drum that, ‘if we’re lucky’, our 4 year plan and our austerity budget, we can do it, we don’t need any bailout. A bailout would involve, ‘damage to Ireland’s reputation’. This is another howler. What reputation, what scrap of reputation do we have left. ‘Reputation’ at one time was gomspeak for not burning bondholders, or restructuring. But at spreads of 8-9%, ‘reputation’ one thing we don’t have to worry about. Pravda RTE then hauled two corporate spokespeople out to defend CT at 12.5%( I won’t go there, see earlier post). The spreads don’t matter for John, the run on both BOI and AIB that is now severely denting their balance sheets don’t matter. We just need to hold out with sinking banks till the markets get reassured by our mystery 4 year plan and our €6bn budget operation to cut the heart out of a patient already in economic coma. Holy shit! Fortunately, later on Morning Ireland Daniel Gras, Centre for European Studies, brought sanity back, we need to accept a bailout deal now when we can barter for a decent deal, rather than wait till later when a deal with all hell broke loose against Ireland may be the only game in town.

    • Gege Le Beau

      I too am curious about what is coming out of NUI Galway, welcome any insights.

      As for advocates of austerity, well, think the results are plain to see.

    • Deco

      I presume he knows Alan Ahearne, also an economist based in NUIG, and currently parachuted in to make up for the lack of brain cells in the DoF ?

    • Deco

      You are correct about reputation. Just look at all the funny business coming from the D4 banks in the last twenty years. Look at the nonsense of IBEC and ICTU deciding most of economic policy, and the politicians telling us that they made it happen. Look at how many things that have gone on in leading ISEQ companies, and which have never resulted in a fine, let alone a jail sentence.

      Why would anybody invest any money in Irish companies, given the level of ineptitude, incompetence, and funny business ? Shane Ross has been writing about this for over two decades. I am surprised that he never got silenced. As John Allen has told us, the influencers in the background in this country are very effective at closing down any form of bad news issuance. The courage of Senator Ross is to be commended !!

      The modern predominant Irish concept of management deserves a deep, introspective and massive critique.

  33. MK1

    Hi David,

    I hope you are well, and judging by the success of the Kilkenomics event, you most likely are.

    The pressure on Ireland now is different in this case of the euro than it was in the ERM. Back then, there was a weakness in the ERM system itself as currencies were floating yet fixed, and hence “market players” (Soros et al) could exploit that. With UKP exiting and IEP devaluing, it meant that the market could not rely on their ‘play’ of the guaranteed prices for currency X, a carry trade if you will.

    The Euro system was set-up to resolve that problem (plus others) by having one single currency, one central bank and full conversion of IEP, DEM, FRF, etc into EUR.

    This crisis is altogether different where a credit bubble has burst in the financial system which was then saved by Governments, and not those on the periphery such as Portugal, Ireland, Greece or Spain, but by ALL european countries and many also across the globe.

    They saved the banking system because the faith in the system itself was at stake. The euro rules of 3% were completly ignored, this was fire fighting on a Titanic scale. And we are still in fire-fighting mode in this slow motion ‘car crash’ that is the credit bubble crash. Crash is a word that should be used more rather than crisis. More apt wouldn’t you think?

    Ireland, seen as a small pawn, may be used as a test case to manage market perceptions and trust. And it is ALL about that. Our banks are insolvent, and our Government is too. The market perceives that with our bps spread over DE-euro bonds. The bailout fund would be a back door, a carousel of sorts, for funneling money from DE-euro bonds (+others) back to IE-euro bonds. DE money may go up in price as a result but its spreading risk, perceived or otherwise across the EU.

    Of course, no country is in a buyers market for debt. Hence the rates. It would be nice if we could get back to the 3% of annual deficit, and better yet if we could afford to say “No, we dont need to borrow”. Did you ever see an addict begging for money? Its not pretty. Thats what we have to do when Ireland has to go to the markets, we are a credit/debt addict, and now the “dealers” are making us pay top euro with the bps spread for our “addiction”.

    I write to you on this blog that the day that ireland’s guarantee was announed in Sep 2008 that this would all end up in tears. At least you and others got some tears of laughter in Kilkenny! ;-)

    DavidMcW> Yet our government has run so far up its own cul-de-sac

    Thats a poltie way of putting it David, but I presume you are using the euphemism of cul-de-sac for arse.

    But its ‘sac’ alright, very much so, its ‘bottom of the bag’ for Ireland. Speaking of sacking, shouldnt our government get sacked. Whats the point of having judiciary, an army, a police force and a president, if in the face of abject and extreme incompetence a government remains in power.

    Markets un point, Irlande nul points ….


  34. Deco

    From what I can see the problem currently is not the state finances.

    The problem is the silence coming from the BankCentre in Ballsbridge. Once again Ireland’s biggest bank is found to be run by a collection of inept turkeys. Incidentally, when AIB was being created from mergers in the 60s, they consciously headhunted senior civil servants to run the organization. Senator Shane Ross has termed them to be a “big bureacratic bank”.

    In fact, it is begining to look to me as if AIB was always going to be the problem all along. Maybe that Anglo was a gamble by the DoF, on containment until the world economy turned a corner and the rest of the world economy has been slow enough in making this happen.

    Of course officially, it is always termed a strategy. But it is not a plan as such, just a gamble. And it is looking like the DoF is running out of time to see it working out. As a gamble it has been very expensive. Of more importance – it is not working. Basically they failed to differentiate between the commercial property market, developer loans and residential property. It was like as if they tried to save everybody, when they should have been thinkgin strategically. That is why I call it a gamble. You only have a strategy if you are thinking strategically. They have not been thinking strategically. This type of interventions are liable to be spectacular failures. Now, maybe we might see an improvement in the private sector labour market, and net income growth if people find work. But this takes a long time to turn around. And there is massive potential to external shocks with Bernanke turning the rotors in the US, and China getting to the point that some problems are inevitably going to appear in 2011.

    In fact it was completely the wrong strategy. A better strategy would have been to allow Anglo, and INBS to wind down with a bank run. Then the remaining depositors would get their money. Then the “assets” would be sold been sold off, to pay for the deposit displacement. This would have left the bondholders getting probably nothing. A lesson in the importance of exercising due diligence when loaning to the elite in this country !!!

    And concentrate the resources on keeping the private sector labour market in functioning order, by various means including the abolition of commercial rates, on premises below a certain turnover threshold. Thereby providing stable demand for residential housing purchasing.

    That too would have been a gamble. But, I suspect the probability of it resulting in more residential property buying would have been higher. In other words you would be fixing the problem from the other end, using a different dynamic, rather than playing around with with levers. And anyway until we see the private sector labour market fixed in this country, we will never fix the banking system, or the property market. It is about much more than confidence tricks. It is about a change in mindset with respect to how business is done, and professionalism across society. In this regard serious reform of practices in the state system is absolutely mandatory.

    Portugal is now in serious trouble. Cowen will take the EU Bailout money if he can somehow or other manage the PR for it back home.

    Now, here is something that few are seeing. The Netherlands will be extremely reluctant to give any money to the PIGS. Most Dutch kids learn young about how Holland lost the plot in an asset bubble in the 1620s. However, it seems that the PIGS never learn.

    Any such statements will stand in the background to the Germans concerning issues of moral hazard, if Merkel is telling the German taxpayer that this is necessary. The Dutch are fairly annoyed at the way money is wasted by Brussels, and they should be because they are getting stuck with a higher per capita bill than anybody else, and they have a very stern view on corruption.

    This also has implications for the British.

    It might take longer to hammer out a deal than expected – longer than occurred with the Greeks before. And time is now of the essence in this saga.

    And still, AIB stays silent like the boy who smashed a stone through the window, and who does not want to draw any attention in case he gets fingered with responsibility.

    • Gege Le Beau

      The rot in Dublin, the rot in London and the rot in Brussels (nicely exposed by Channel 4′s Dispatches programme), the whole rotten core is spewing out onto the floor (abuse of expenses across the board, dodgy deals), the people will never get a better opportunity to see what life is like in the belly of the beast, astonishing time to be around, hope the people can grasp it and really push for change, but the mechanisms for such change (bar a vote at an election event) do not exist, so I do not hold my breath.

    • Forget AIB/BOI, its all about Anglo. Impossible losses at Anglo transferred to the taxpayer have made the

      difficult situation of saving AIB/BOI more difficult. We had a chance recently to end the guarantee and

      Anglo. We blew it! Now we’re cap in hand for a bailout, or worse we refuse a bailout. If we accept a bailout and Anglo’s black hole is served from this bailout fund, the euro risks getting suckered by Anglo in the same way Anglo has suckered Ireland. Whatever the outcome, it looks like we’re left with a mess that has transformed national sovereignty into a vassal, debt servicing agency of the EMU.

      There could be a wild card in this that has Lenihan refuse to accept bailout and we eject from the EMU. So, fasten your seatbelts as we observe how EU responds to potential contagion from our zombies.

    • michaelcoughlan

      Hi Deco.

      You make very valid observations but I would respectfully suggest the problem is in fact the assholes in charge.

  35. Deco

    The last time we were told that the EU was facing a crisis of survival, was part of the guilt-trip foisted upon us for Lisbon 2.0.

    Here we go again. Another guilt-trip. Save Brussels (again). Before Belgium goes into a divorce.

  36. Gege Le Beau

    @ David McWilliams – good clear presentation on Pat Kenny’s show this morning. Well done.

    Nice reference to you being a ‘citizen’ of this country and not simply a ‘taxpayer’, something I have been advocating for a long time. Worth mentioning the ‘Republic’ as well from time to time, and if possible avoid the term ‘Ireland Inc’, which makes us sound like we are all working for a corporation.

  37. irishminx

    My over view on Kilkeconomics and towards a mature Ireland.

  38. Virility of T- Bone Steak :

    Politicians in France are successful when their electorate have evaluated the virility in their personal lives to be active and have given them the allure that they can exchange their savings at the end of a hard working week with the pleasures of ‘moulin rouge sur la Seine’.

    The virility of the T-Euro ( irish euro ) does not exude the saliva of hunger that we can feel that could digest even pigs feet in moores street .This non performance is liken to a rope on a snooker table .Unless we can see a transparent connection/ wobble between Kown and Kocklann then we are left to call on the sages of Sile na Gig and her poweress in strength of success in the bogs .

    There will never be another Moulin Rouge in Dublin again and nothing to spend on in the Isle therefore the money will flow out to sea .

  39. Deco

    An article in the most recent Sunday Business Post.

    Basically, the people have power, when they are prepared to work together.

    For the past twenty years, the “consensus” involved the big players, IBEC, CIF, ICTU, SIPTU, the banks, the senior civil servants, the bosses in the political parties, etc.. hammering out a policy for the rest of us to obey.

    Here, we see local action deciding the consensus.

    This frightens the big boys far more than a mob of angry Greeks losing the plot and wrecking the livelihoods of working people trying to make a living. In fact, this is a measured, tough and uncompromising approach. It is very intelligent, and places the banks in a serious dilemma. Completely outfoxed. The aim was not the attainment of “something for nothing”. The aim was renegotiation of terms from the bank, and no hidden terms in the loan contract between the bank and the customer.

    You know I reckon these farmers would have been far better at dealing with the Anglo bondholders instead of the besuited, well spoken, turn-of-phrase, lying, sophisticated muppets in the DoF, and the FF ministerial class. It would really be useful of you could get some consistency from the idiots in charge for once. Of course, this is not possible, when you are making it up as you go along…

    • Deco

      We should be on the alert for any efforts to control such behaviour in future, for the legistlature.

      Eddie Hobbs showed us examples of market rigging in recent years. This is market rigging, but in country where it is widespread, if there is a response from authority, then we should be prepared to ask why they have consistently turned a blind eye to all the other examples of oligopolistic behaviour in recent years.

    • michaelcoughlan

      Hi Deco,

      That particular article by McGurk is the work of a true genius and true citizen patriot. He has shown us the light as to how we are going to defend ourselves and our neighbours from the establishment when the mass mortgage defaults start next year after another €6bn is taken out of the economy. (As if the stupid bastards in the Dail think that cutting spending in a recession will close the gap in the current account. Where do the stupid bastards think the extra tax revenue is going to come from? The gap will in fact widen.)

      So McGurk has laid down the gauntlet to his fellow citizens in this great republic in his article to register a website called to register property forcibly taken from innocent citizens who are victims of all perverse and pervase corruption in the banks. Then all of us (most anyway) can choose to refuse to bid on any property for sale without the goodwill of the owner. Boycotting 21st century style!

      Adamabyss you said you have IT skills and are back in third level needing a few quid so I say to you that I will subscribe 2 grams worth of gold current spot price €31.8671/gg to help establish such a website and maintain it as a deterrent to the banking establishment and what they will visit upon ourselves neighbours and friends in the new year.

      Gege Le Beau you have asked the question umpteen times where are the leaders going to come from to lead us out of the mess? I say to you leadership starts with the citizen. Surely as a democratic socialist any initiative to help keep citizens being forced from their homes by corrupted banks is one you could subscribe to and demonstrate personal leadership? I think we should take up this gauntlet laid down by McGurk and remember those of us stupid and crazy enough to believe we can change the world are the people who go out and change the world.

  40. MadaboutEire

    Strong Article

    //slashing public spending at such a desperate rate at a time of high unemployment is economic masochism.//

    //At the moment, the living standards of the entire Irish public are being driven down ruthlessly to pay for the mistakes of wealthy bankers and greedy property developers.//

    //The crisis in Ireland and Spain stems from idiotic lending by banks, which pumped up housing bubbles.//

  41. biskalero

    I guys and gals. Just wondering why our government is not taking back all our oil and gas off our coasts ? We have by some estimates 420 billion in reserves. Ray Burke signed the lot away i believe back in the eighties i think, now can someone tell me what it would take to take these back into Irish Hands. 420 billion could sot us out fairly lively. Does anyone know how we can go about this ? Let’s take it back for the people!!

    • biskalero

      we are in dire need at the moment, drastic measures need to be taken right now , could we get a petition to take it back into Irish hands ? Let’s get this off the ground because it’s ours not big oil companies. Ray Burke has shown his true colours and Bertie. Let’s fix the giveway by these criminals.

      • StephenKenny

        For example:

        Similar to all that noise about oil off the Falkland Islands recently.

        • biskalero

          It’s that reason they had the falklands war, they knew exactly there is vast oil reserves there. These people send in innocent people to die in wars which are created for other reasons. This has been proven already and will continue to be proven. Gulf of Tonkin never happened, No weapons of Mass destruction in Iraq, but now the biggest embassy in the world resides there. The people of the world have been sent into wars which are started by the same groups the whole time. WAR IS MONEY!! it’s not to benefit the people. It’s time for History to be re-written.

    • Deco

      This is the law. Effectively they got great treatment.

      Can this be changed ? Yes, by having a higher Law. In otherwords, Article 45 of Bunreacht na hEireann. As far as I can see NAMA, and the Anglo bailout are both in breach of Article 45. Likewise the Rambo Law of Hydrocarbons.

      • biskalero

        Thanks Deco for that info, man this is blatant we should write to every politician about this because im getting sick of this to be honest. Just wrote to Micheal Creed from Macroom, thats where im from. Let’s get the word out feck this, we have a lifeline here. It’s ours not the Politicians or Oil Companies.

        • biskalero

          Just read article 45 Deco , you are dead right!

        • Deco

          Yes, you can write to the polticians. And if they do not get the finger out, then you can write it on the pavement, under bridges, or whereever you want.

          BIN ANIB.
          Article 45 ?
          NAMA is nonsense.
          No taxation without accountability.

  42. Deco

    Was in the car about one hour ago. There was an excellent discussion on the Joe Duffy Show.

    Duffy was asking for the opinions of Irish people who left Ireland concerning the current debacle.

    A man from Donegal, who spent a lot of time in the US, was full of praise for David McW, and traced this back to observsations in “The Pope’s children”. He lambasted the behaviour of people in this country, especially with respect to responsibility over and inside the political system. He blamed what I would term the lack of any form of systematic thinking for the level of stupidity and BS rampant in the state system, and in a significant proporition of the private sector.

    A man from Glenageary, living in the UK lambasted the process of doing business in this country – where the first question you get asked is who do you know, and “do you know so and so, and such and such ?”. He lost 300 K trying to do set up business in Ireland, and says that the Irish people are responsible for this mess with their complacency over the level of ineptitude, cronyism and favouritism rampant in the system.

    The Irish people who got out of here, tend to have a lot of clarity as to what is wrong with the country, much more so than those who are living in it everyday, and who are blasse to stench underneath their noses.

    • Gege Le Beau

      There are indeed many questions about who we are as ‘a people’, what we represent and how this country actually functions, but I fear most of these critical questions will go unanswered and we will limp on to the next crisis, forgive my pessimism but it is borne out of years of observation and knowing the insight track, with the vested interests waiting in the long grass.

      “Fumbling in the greasy till”, how right Yeats was.

  43. Gege Le Beau

    United Left Alliance (ULA) has been formed with a view to contesting the upcoming General Election.


    The newly established United Left Alliance (ULA), which will be publicly launched at a rally in the Ashling Hotel , Dublin on Friday 26 November, involves the Socialist Party, the People Before Profit Alliance, the South Tipperary Workers and Unemployed Action Group and the Independent Socialist group of Declan Bree in Sligo.

    The ULA is a joint slate or alliance of candidates that will put forward a real left alternative in the general election and challenge the austerity and capitalist consensus amongst all the parties in the Dail, Fianna Fail, Fine Gael, the Greens but also clearly including Labour and Sinn Fein.

    • michaelcoughlan

      Thank god that some real leftwing alternatives are being produced. I would sincerely welcome any updates and information on how this group progresses and any websites or blogs they register to get their messages across. I live in Tipperary north and if they field a candidate in the coming general election may even considering voting for them.



    • tony_murphy

      There will be no need for the EU to force Ireland to give up it’s low corporation tax if that lot get anywhere near power.

      It’ll be curtains for all business in Ireland. The grey bearded ones will up taxes left right and centre.

      A proper disaster they would be.

      • michaelcoughlan

        Hi Tony,

        When US Business’ set up in china or the Middle East they have to hand over %51 to a local partner. It doesn’t stop them though. I think we should challenge the status quo on the %12.5 a bit more. Sooner an extra modest %5 on the corporation tax rate than starving freezing pensioners at Christmas wouldn’t you think?

  44. Aido

    Rumour has it the proviso for the country being saved will be an agreement to to move to a “normal” European corporate tax rate.

    This would be the final act of national suicide / treason. Let’s not fool ourselves that our “well educated”, English speaking, flexible workforce is the reason US companies are in Ireland.

    Any agreement to normalise tax would mean the complete exit of the
    - Chip and computer industry
    - Pharma industry
    - Funds admin industry
    - and countless others

    Figure the multiplier impact on law firms, accountants and the wider community and you talking another 250,000 unemployed

    Time to speak out and default / restructure rather than save German banks, raise the tax rate and commit economic suicide

    • Deco

      Correct. We greatly over rate ourselves and the extent to which we are “educated”. Standards have been slipping since the mid 1990s.

      • Pedro Nunez

        We have peasent class education system, we rote learn and no fcuk all about how to think and we might have shaken off the church but what goes for proper analysis and critical thinking in Eire is pitiful.

        Not saying the UK is ideal but compared to Ryan Turbidy and Pravda RTE comhaile, and FF spoofery ´four legs good, two legs bad´´ shite, its still light years ahead.

        In Argentina at mo, just look at what they´ve achieved here (infrastructure, industry, future)without the greasy FF fingers in the till, like Mary O´Rourke and Ericom, pouring weedkiller on every bit of meritocratic, bone fide growth initiative by Irish persons outside the ´golden circle.

        As someone who left in the 80´s, I loath the day I duped myself for coming back to this sceptic Isle!

    • Aido, see earlier threads on this. Our 12.5% CT is embarrassingly low. We are not Guatamala or Somalia. If we’ve any self respect to not put ourselves out there as a banana republic, we should increase CT to respectable rates. FDI in other EMU states has not led to any significant flight of capital or jobs or shortening of FDI.

      We do need to lower the cost of doing business here with lower energy, rent, construction costs a top priority. Also lets examine the type of jobs we’re talking about, mostly 1000′s on contract only short term. Perhaps we should look at developing a model of CT based on a competitive rate compared to EMU competitors and not the ridiculous ‘beggar thy neighbour’ current rates which are sometimes over half equivalent rates across Europe.

      “Ironically, this may lead to more jobs being created in Germany.” No, it won’t. We can easily sustain a rise in CT to 18%, see debate here:

      By all means restructure/default rather than save bondholders whose lack of due diligence and no fiduciary responsibility alongside that of bankers got us into this mess.

      Part of the resolution of the mess has to be Bono, Dennis O Brien and fellow tax exiles, alongside those on higher rates of pay being capped with fair tax, but also CT should be at a fair and competitive rate, not the absurd low rate of 12.5% fomented by propaganda that spreads unfounded fears.

      • michaelcoughlan


        As far as I know Bono isn’t personally a tax exile. We need to be sure before we point the finger. His companies may be though.

        • his companies are, that makes him a tax exile!

          • michaelcoughlan

            Hi Cbweb,

            No it doesn’t as his companies have a separate legal presence. As far as I know (and I could be wrong) only the holding company is located in Holland I think?

          • Deco

            Oh, right….so if your companies are “tax diaspora” category companies….then you are clean from being called a member of the “tax diaspora” yourself…..yeah….all very simple really.

            Sounds a bit like the Liam Lawlor and the money was resting in the account, I don’t know how it got there….

            This sort of wishy-washy thinking is responsible for the tolerance we have in this country for gombeens who continually screw us over.

            Bono = tax avoider.

            Now in fairness, in previous years when paying tax to Bertie Ahern was feeding the cronyism in Ireland with a caterpillar digger shovel. But now, he might want to start chipping in and stop trying to use Irishness as a way of getting his songs played on radio stations in North America, and Australia.

  45. hammond

    “German chancellor Angela Merkel said last week that bondholders to troubled countries would need to share the pain”

    It is to be feared that Frau Dr. Merkel is merely engaging in a display of rhetoric destined both for her domestic audience and for the international currency markets: she creates an aura of fiscal rectitude and fairness for herself (cosh the Banks), and she pleases German exporters by talking down the Euro (again). She has yet to exhibit any real intention of challenging financial institutions; in fact, if anything, the contrary is true.

  46. Gege Le Beau

    From the Guardian live blog on the ‘Irish Crisis’….

    3.18pm: Some breaking news from Dublin — the Irish government is going to release a statement on the economy at around 5pm.

    That’s an hour after the eurozone finance ministers’ meeting is expected to start. We are also anticipating a press conference in Brussels around 7pm.

  47. petercice

    just been watching bloomberg and they have said that clown is going to make a statement on the economy at 5 pm people remember this day 16 nov at 5 pm when our so called government signed away our national rights to eurocrats and the imf.
    i was watching bloomberg alot today and there was one of there own investigators on and he was saying that the irish problem was not down to us but rather the euro said all the things david did about our economy not suiting the euro and that the irish people are the ones paying for political mistakes.
    lets watch the croke park agreement going now when the imf move in a close friend of mine that work with the ministry of economics in latvia told me that when they had to lay off all the civil service the got 1 months notice and also no big redundency just there statutary entitlements.
    this country is going to explode over here very soon and the insiders will be sitting back laughing as there massive money they built up is sitting in there swiss bank acounts nice and safe.
    i think what we need to do is to create a run on the banks by the ordinary people of the country forcing the hand of the government to put there hands up and leave

    • Clown turned out to be his usual damp squib, ‘Ireland is not asking for a bailout’.

      Because of the guarantee, bank debt is now sovereign debt.

      Best way to solve the mess is for the ECB to take over Anglo, and bring it under ECB conservatorship, buy it for €1.

      This would allow Ireland Inc to wriggle out from under the sovereign debt problem and give it a fair chance of sorting AIB/BOI

      • Deco

        Yeah. Cowen promised the world that he would make some sort of extremely important statement at 17:00 yesterday.

        The world’s media set up to cover Cowen in the Dail. In expectation of something important, groundbreaking – waiting for a defining moment.

        And they got a replay of the same nonsense that Cowen has been mumbling for the last six months.

  48. Fergal73

    I’m not convinced that Europe / IMF managing the country would be worse than FF. The Irish democratically elected government squandered 10 – 12 years of boom and will leave Ireland with a damaged economy for at least another decade.

    Can anyone else do worse than what the Irish Governments have done to themselves? The Irish electorate voted those governments in.

    Europe will want Ireland to act responsibly and not put the Euro in danger again. They will not want a ruined economy on the periphery, as that would just mean more EU aid into the future.

    While the powers in Europe will not have Irish well-being at the centre of their agenda, neither did the Irish governments of the last (CJH – tighten your belt / Planning corruption / Healthcare waste and inefficiency / Blind eye to the Catholic church abusers / emigration of the 50′s – 80′s and now again / Bertie’s wins on da horses / expenses in the dail….. )

    The Germans rebuilt a ravaged economy and infrastructure after WWII. We would do well to follow their example.

    • mishco

      We would do well to follow the example of the Germans in rebuilding our ravaged economy. So true, but is it possible?

      Here in S. Korea the country also recovered remarkably quickly after a major IMF bailout in the late Nineties.

      But we need major changes, not only in the approach of our elected representatives, but in our overall national mindset. Two huge asks.

      A change in politicians will come very soon, but without people like our host walking the walk and actively entering politics, who can see any major change, any radical new approach, there?

      As for a change in national mindset (including Deco’s “Irish theory of management”), is that also an unrealistic demand? Can we as a people be changed to act more like Germans or Koreans when faced by a national disaster?

      I see two ways the mindset could be changed, one negative and one positive. The negative way is through force of circumstance. Despite the bailouts of ECB and/or IMF, the economy still implodes, and mass social deprivation forces us to realize we have to make honest, hard, eco-friendly work not only the main goal, but an achievable goal. Then, after much hardship, bitter experience informs the design of a new system which allows small businesses to prosper, natural resources to be exploited for the people and not just for multi-nationals, corruption to be vigorously rooted out, etc.

      The second, positive way the mindset could be changed is through education. This requires a major shake-up of the media (people like our host are only scratching the surface at the moment), but more deeply it requires a major redesigning of the school curriculum, starting from primary and working right up to the apex. The position on teaching Irish would be altered, and there would be far more concentration on numeracy, business skills, foreign languages and – dare I say it? – moral education (which, incidentally, is a compulsory subject in Korean schools). I would not let the Church too near this process, by the way.

      Moral education would have to be completely redesigned to include notions like: getting something for nothing is wrong, your own borrowing and lending need to be carefully considered and controlled, giving a job to someone you know over a better qualified candidate is wrong, etc. Such ideas need to be spelled out in simple English with modern examples, not in Biblical fashion.

      Irish people will never be very like Germans or Koreans. But some of the attitudes of nations like these two (and of Finns, Israelis and others) towards life, success, even happiness, need to be examined more closely by us, because at the moment we are clearly dysfunctional as a nation.

      This indeed should be the first step in redesigning the school curriculum. This redesign should start now, even if – especially if – the first agent of mindset change, economic implosion, takes place, as well it might.

      Any number of bailouts are only sticking-plasters on an amputation. We need to go much deeper, much longer-term, for the sake of generations to come.

      • adamabyss

        Good writing mischo.

      • coldblow

        Hi Mishko, thoughtful comments but I don’t really agree.

        1. Dropping Irish – this would free up room on the timetable, but what would take its place? I think this goes against your bigger ‘meaning of life’ point.

        2 Keeping Church away from education system (if I’m not misrepresenting you) – as Lee points out in his history of modern Ireland it was one of the few instituations to embody (in some of its activities anyway) the ‘performance principle’ as opposed to the ‘possessor principle’. Think of Deco’s old image of a Micra-driving nun running the health service.

        3 Fostering a modern morality. How would we get agreement here? Who would design it? (We have various quangoes already in place who I am sure would claim some expertise in ‘educating’ the rest of us.) Would it be an off the peg pc-lite morality (‘inclusivity’ etc) or a deeper one based on our ‘profound Celtic spiritual roots’?

        4 Education. This is really where I take issue as I was thinking about it only yesterday (again), and Deco and Tony made some thoughtful posts earlier in this thread. In the Civil Service they introduced a PMDS (staff training and development system) and one of its main ‘legs’ is training tailored to the needs of the individual. It sounds ‘great’, but it turns out it is the same training courses that were always on offer that were to provide this ‘tailored training’, the same trainers, the same concepts, the same ‘facts’, assumptions etc. Who is going to do all this shiny new education in the schools? Are the numerous wasters Tony refers to going to ‘embrace change’ and undergo a miraculous attitudinal transformation? I think the scholars have enough on their plates as it is and my sympathies are with the teachers too (having been there myself and I think you might be one too, of English?). Language teaching interests me, but in the end you are stuck with the same teachers (with all their virtues and faults) and the same students (ditto), and presumably you will get the same outcomes.

        Let’s just take German again for example. It’s one thing learning it at school but where do you take it from there? A few years ago you could get Deutsche Welle radio on the cable in Dublin (I mentioned this before too) and I never met anyone in the Goethe Institute who ever listened to it. I’d be prepared to bet I was the only one in Ireland who did, if offered reasonable odds. When the cable company got rid of TV5 (French), possibly because of lack of demand, they forgot about Deutsche Welle for a whole year before they finally twigged their mistake and replaced it with a pop station (they were right: why carry it if nobody was listening?). My parents in the country still had TV5 for a while after but I couldn’t record it as the geezer who’d tuned in the video had selected it (as being the most useless station available) as a default video channel which meant you couldn’t record from it. But you could record the Shopping Channel etc.

        In short: no further redesign of the school curriculum, at least for some time. Enough is enough.
        No offence intended of course, it’s just that your post articulates (and well) various points that I have big reservations about. Without caricaturing your arguments (though of course I am) I think they put the cart before the horse. Instead of seeing how we can change schools so as to engineer the desired economic outcomes we try another, more direct approach, towards the former (starting perhaps with a land tax, and wealth taxes) and so help to make school a bearable place for children. Ditto the national mindset, morality, etc. (Economic determinism rules ok)

        • coldblow

          Towards the latter I mean.

        • Deco

          I actually think that before we need to create any new morality, as much as that we need to rip down all the bullshit and inherent hypocrisy in the current morality. Maybe when that is done, we will be able to see that we do not need to enforce standardization of a new morality, as much as to get a clearing first. And anyway, I am sceptical because any new morality will exist as a superficial layer on the current ‘moral code’ (sic). Basically, we should be wary of people promising new moral codes, because this is the sort of thing that could be a lifesaver for the establishment. They will adopt it (superficially) and we will be screwed again.

          Instead time to get nasty on the nasty element in Irish society, which is at the top, and which fixes everything, from social programs to market regulation so that the people in the middle get screwed, and the people in the bottom are perenially dependent and used as a rationale for schemes that only really benefit the insiders.

          Basically, cut deep, and root out the rot. A start would be to recommission Spike Island prison as a dedicated facility for white collar crime, corruption, grand scale theft, embezzlement, fraud, commercial deception, waste of other people’s money and abuse of the market by oligopolistic behaviour.

          Nice and damp, with strong breeze coming in from the sea in winter. And importantly, it is a long distance from the leafy suburbs of the Dohrt loin in Dublin, very different in terms of social networking to the K-Club, and the resort complexes on the Med. Basically, they are well isolated from their relatives and cronies. To get there you need a boat. These sort of criminals need to be removed from their social environment and be given physical hardship and solitutude so that they can reflect on their behaviour. A culture has to be smashed and this is where it will start.

          When this starts, then there should be some form of clearing.

          I expect that the insiders themselves will get involved in any new moral code construction, so that the rules of the game are fixed, same as always.

          These people are control freaks. They gravitate towards the centre of power, and the centre of wealth. They have considerable clout with regard to the media, as evidence by current coverage of the several large banks which are in serious trouble.

          • coldblow


            Thinking along the same lines myself just now.

            Just who would be the designers of a new curriculum, inlcluding the new civics element (or should that be ‘module’?)? There are plenty of qunagoes who would claim some expertise in this area, so that might be the way to go.

            Here’s one suggestion for the course content: the same laws apply to everybody and punishment for crime should be applied accordingly. (I see you have beaten me to that one!)

            Another one might be: when I have advocated a course of action which, looking back, has proved to be disastrous, I will acknowledge my earlier mistake rather than keep my head down and pretend I never said it. How about all those who ever said “you can’t go wrong with property” go public on it? They could wear little green dunce’s caps (all proceeds to Mortgage Relief), politicians, the RTE ‘stars’ etc would be expected to wear them.

          • Deco


            When I see something happening, which is wrong and corrupt, I do not open by mouth straight away.

            Instead, I stay exactly there, and observe it entirely. I take note of everything. And I pause, to make sure that I remember everything.

            Then later, I go through it in my mind. And I go to the trouble of trying to connect the various bits.

            And then when I have figured out what is going on……I tell everybody I know, what I have seen.

            This way, other people are informed. And they also monitor what is happening. And this information, empowers other people. It changes the power balance. Deceit no longer works. Instead people opt out of becomming willing participants of the scam.

            A slow intellectual change takes place. It is very balanced and calm.

          • coldblow


            Me too. You need a good memory.

          • mishco

            @coldblow and Deco

            Thanks for your thoughtful comments – I think the Irish issue and the role of the church and of languages are to some extent side-issues, but not the role of morality.

            I think I am more pessimistic than you as I do see a serious economic disaster looming (not just for Ireland), and one result of this will be that everyone in the country will become outsiders; those insiders who have any money left will be in Cape Cod, the Algarve or whatever. This form of economic determinism will allow us to apply a fundamental rethink to the school system (and everything else).Maybe I am looking at things in a slightly longer-term fashion. Easy to do when you’re thousands of miles away, but other members of my family are directly involved.

            Deco, your idea that a slow intellectual change in the minds of people willchange the power balance is interesting. Do you mean that you think that enough people see through the scams now (on this I agree) and that therefore they will change things at the next election? If so, where are the new candidates with the new information to change things? Until people like DMcW stand for office I can’t see the power balance changing at all. Who would send the insiders to Spike Island? Perhaps you mean in the longer term, at the election after next, but I think that will be far too late.

            I fully agree we should be very wary of anyone promising new moral codes. The people who do sit down to work out new guidelines for children in schools should represent all sectors of society, including business and (OK) the Church. Call it a quango if you like, but it would at least have the support of all those who are or who have become outsiders. Just as ex-Communists did not run away after their system imploded, so some of our more able (?) current insiders will be involved. On a small island you can’t prevent this. But hopefully they, like everyone else, will be chastened enough by circumstances to see clearly what went wrong, and how certain basic rules can be taught our children, rules that will help us avoid getting into such a mess again. Coldblow, the details will only emerge once the discussion starts. My own preference is neither PC-Lite nor Celtic Roots, but one based largely on a combination of Rudolf Steiner and McWilliams economic sense (for want of a better paraphrase!).

            Of course at the same time major changes in tax law will be essential, not just to fund the educational revolution, but to set the economy in general back on its feet. But, as a teacher, I am more interested in the long-term, moral changes which should be carried out. As this website shows, there are plenty of able people with the ideas to sort out the rest of the mess.

          • coldblow


            Good reply, I enjoyed reading it. You are right about using the same people as we’re a small island and have no choice. I am pessimistic about an intellectual sea-change, but hope I’m proved wrong. The insider thing spreads down too far, the whole society is permeated on pull and vested interest, to some degree or other, so nobody is going to shout too loud – except those who have nothing, and what can they do? I have heard it said that families are conspiracies of silence. Anyone who spills the truth won’t be popular. Getting back to Deco’s point, I just don’t see Ireland being anywhere near being able to engage in an objective, dispassionate ‘national conversation’, an ‘adult’ conversation if you like, as they seem to do across the water. Here it’s BS all the way baby…

            About creating, or making explicit, a new moral code, just to add that it recalls a book by Desmond Fennell (My Sweden Years) which covers an extended stay (or two) of his there in the early 60s when he was a young man. He also describes a time where a new society is being laid out, this time in an optimistic setting, by intelligent young people. He had serious misgivings at the time about this Project. I can’t see a moral sea-change any more than an intellectual one, I mean that in times of stress people probably revert to an innate, or inherited, set of values. I’m not sure that’s a good thing or not, I dunno (have to think about it – these values would include prejudices and Morgan Kelly made some dark reference in this regard in his recent IT article). There’s a lot of BS to be washed away, that much I do know. Morality, like most things, seems to be the prerogative of the powers that be (TBTB). I understand that one of the biggest growth areas in employment in Britain is service (as in servants) so this might give us a clue as to where a return to traditional values might lead us.

          • mishco

            “nobody is going to shout too loud — except those who have nothing, and what can they do?”
            Thanks – this give me hope. I hope that those who have nothing now will one day become part of “the powers that be” to create a slightly less dysfunctional society in my country. When the BS has been washed away by hard realities (can’t we see this happening quite quickly now?) perhaps something more dynamic and productive will take its place. Perhaps a new set of values can be hammered out by people open to such ideas (and there are many flying around this forum). I think if anything good is to come out of this crisis it may be that it has woken enough people up from the illusions of the old traditional sets of values, as perverted by the current political parties.

    • biskalero

      The IMF are a bunch of parasites looking for what they get take from our country, we may aswell burn our constitution now and burn the Irish because this country has been hijacked through deception and lies once again.
      Have a look at a guy JOHN PERKINS ( Confessions of an economic hitman ) you will see the through colours of the IMF. Here is the Link

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