December 29, 2010

We still have the financial means to save ourselves

Posted in Irish Economy · 137 comments ·
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If we separated the banking system’s debt from the rest of the State, we could borrow easily on international markets

Yesterday, I got into a Dublin taxi and started nattering away about the usual, the weather, the football and, of course, the state of the kip.

“How was the Christmas?”

“Not bad, considering, less boot work, but. Last few Christmases, me back was broke from all the boot work, none of that this time.”

“Boot work? What’s that?”

The “boot work” was the act of opening the boot for bags and presents as laden-down Christmas shoppers stuffed his cab with their goodies.

This year, there was none of that. He went on to tell me that the boot work has been on the decline for a few years now, but this Christmas it just stopped.

‘The Dublin taxi man’s boot work index’ of consumer spending works for me. In fact, sometimes in economics these common-sense indicators tell you much more about what is going on in the economy than many complicated models, so beloved of serious economists.

But when the common-sense indicators are substantiated by hard evidence, we can get a very interesting take on what is actually happening in our economy and how it could be remedied by taking a new political direction over the next few years. Interestingly, and maybe appropriately for the last article of a desperate year, the outlook for Ireland doesn’t have to be that bleak. Provided we do just a few things right.

Let’s look at what is happening in the Irish economy — what the people are doing, what the Government is doing and the relationship between them.

In short, if the people stop spending, then government spending has to rise to take up the flak, or else the economy will contract. If the Government spends more than the people save, it will need to borrow the money from foreigners. This is called the net foreign balance.

By looking at the economy in this way, we allow ourselves to gain altitude. The more altitude we get the better, because it helps us to see the big picture.

Check out the chart above. It gives us a snapshot of what is happening in the economy. It puts the Dublin taxi driver’s lament into perspective and more crucially, it tells us why a recovery is not only possible, but actually likely — as long as we do the right thing.

The green line shows us how much the people spend or save expressed as a percentage of GDP. The red line shows how much the Government is spending or saving — also as a percentage of GDP. The purple line shows how much money we have to borrow abroad to finance our habits. You can see the dramatic turnaround in the economy from boom to bust in the past two years.

Up to 2007, the Government was actually running a small budget surplus (the red line). But the surplus wasn’t enough to cover the private sector splurge, so we had to finance the boom from abroad. As a consequence, we borrowed from anyone who would lend to us, forcing the foreign balance (the purple line) to plummet.

Looking at the chart, it is easy to see what has happened since. The people have started to save and pay down loans like never before. We are petrified. Private sector savings are now 16pc of GDP. As recently as 2007, the private sector was spending more than 5pc of GDP. Now we are saving more than 16pc. This is a wild swing of 21pc of GDP in less than two years.

Such a swing is unprecedented in the western world and mirrors exactly what happened in Japan in the 1990s.

This is a classic “balance-sheet recession”, where the balance sheet of the country is ruined and the banks are effectively dead. On one side of the balance sheet is property, which is still collapsing, and on the other side is debt, the cost of which is rising by the year. This means that the middle classes are now paying back what they can, selling where possible and saving because they are worried about the future.

The mirror image of the private sector saving is public sector spending. After all, had the Government not spent in response to the private sector rush to save, GDP would have fallen by close to 20pc!

Obviously, the foreign net position has improved dramatically from a deficit of 9pc of GDP in 2008 to a 2pc surplus by 2009. All this private sector saving has ensured that even at present rates of government spending, there is more than enough savings in the country to finance everything. Today, Ireland is running a foreign surplus with the rest of the world.

What does all this tell us? Well, the first thing it tells us is that the country is far from bust — in fact it is running a foreign surplus. It tells us that the EU is completely wrong. It tells us that we have no need of IMF or European funding of any sort. It shows us conclusively, that, if we separated the banking system’s debts from the rest of the State, we could borrow easily on international markets.

It also shows us that we can finance the whole thing internally if we wanted. So the situation is not desperate. The only thing we need is for the people running the place to have a basic knowledge of economics and finance.

The chart also tells us that austerity will not work, because if the private sector keeps saving, austerity will only lead to less and less spending in total, which will cause the budget targets to be missed — as happened in Japan — and public debt will rise unnecessarily.

And all the while, Ireland will run a bigger and bigger foreign surplus, which means we will export capital to the rest of the world for them to use, while projects in Ireland are starved of capital.

This is the financial equivalent of what happened in the Famine, where Ireland continued to export food while its own citizens starved — and all because no one was in charge who had the interests of the common people in mind.

Do you want a financial equivalent of the Famine, where a country with plenty of money collapses for want of credit? Do you want a situation where we export our young, educated people rather than spend money we have here on investing in them?

Can you countenance being the citizen of a country that runs a surplus on its balance of payments to allow other countries to borrow that money to invest in projects that become profitable because our emigrant sons and daughters work for them? So we export our people and our capital to raise the return on investment for foreigners?

This is precisely what happened during the Famine and we are seeing the modern financial equivalent occurring today, complete with local gombeen men profiting from doing the foreigners’ bidding.

Is this what you want?


  1. adamabyss

    subscribe.

    • michaelcoughlan

      David asked a question adam and the answers is no.

      • adamabyss

        Yeah, sorry, it’s not what I want either mike. I await to see if any of it can be avoided. Despite David being bang on the money in everything he has said for the last 5 years that I know of him – the ‘government’ does the opposite (and wrong) thing every time.

  2. wills

    David.

    Defining a reality all about an interlocking cartel of insiders interests working in collusion a paper money ponzi scam all the while funneling the cash off into their own system while they pass the toxic waste back out onto the average worker.

    • paddyjones

      We have to accept the toxic debts for now. But we have some breathing space for the next 3 years due to the IMF/EU/ECB. After 3 years the banks will be off our backs and they will hopefully be in a position to repay some of the bailout money.
      Also in 3 years time our deficit will have shrunk to a more sustainable level. So we have got to suck it up for the next 3 years with high unemployment in particular and of course lots of austerity.
      David does not really accept the reality that the IMF are in charge and they will impose austerity as will the EU.
      I cant really blame people for investing abroad, Ireland is an economic wasteland for the foreseeable future. According to the CSO Irish people and businesses have 1.25 trillion in foreign assets compared to our total debt of about 600 billion.
      The world is moving on , Ireland is going backwards , asset values are depreciating and the economy is contracting while every other country is expanding.
      My advice is to move your money out of the country, over the border, buy European and US stocks and bonds and force AIB and Bank of Ireland to act as current account providers with small balances used to pay bills etc.

  3. Great article with or without chart!

    • + chart http://bit.ly/gGcsU6

      Basically, we need to burn senior bondholders. Trichet hasn’t done it for us, so we’ve to do this ourselves. Pressure against will come from the ECB, so we’ll need to leave the euro.

      If we do as DmcW says above, within two years we should be doing better than Iceland, which is well on the way to a turnaround.

      But we’ve a big political problem due to incompetence and gombeenism at the very top!

      • re “After all, had the Government not spent in response to the private sector rush to save, GDP would have fallen by close to 20pc!”

        Don’t give them any kudos for that.

        They’ve cut down on capital spending. Extra spending is coming from unemployment benefit, government pensions, expenses, banks, interest on loans…be interesting to see a chart defining the difference between 2007 and 2010, to see exactly where money is being spent!

  4. CiaranMu

    Yes, completely agree once again, but the big problem is how do we change where we are? The alternative government are seemingly going to follow the IMF deal. How can this message be spread to the masses and really implement change?

  5. BrianC

    Kinda proves the point of history repeating itself. An agrarian economy run by the wealthy few for the exclusive benefit of the few. Absolutely no need to understand basic finance or economics when looking to protect the interests of a few.

    And it would be fair to say we do not know our own history as the population at the time of the famine far exceeded the touted 8 million and it was not a famine but the first mass genocide.

    Just look at the facts straight on ‘Ireland is now an enslaved economy’ and the only way it will break from this slavery is through some serious radical thinking and action. Sadly more unlikely than likely.

    David the show is over make sure you educate your children well and I would suggest the language to learn is Mandarin Chinese.

    We are not free to exercise anything without the permission of the ECB.

  6. Malcolm McClure

    David: It’s good to give a positive interpretation of published data, but there are a lot of ‘Unknown Unknowns’ out there that we cannot anticipate, because they are unprecedented.

    For example, the ATM in the only bank in town here has not functioned for a week now. - – - Over the Christmas Rush. That is a previously Unknown situation, and the local shops have been generously allowing purchases ‘on tick’ pending the bank getting its act together. Inevitably shoppers don’t spend as much.

    10 days ago that was a little mini Unknown Unknown.

    Are there other straws in the wind?

    Could there be a humungous Mack Truck of an Unknown Unknown careering down the hill towards us, on ice, with locked brakes?

    • Deco

      Is this ATM issue in any way related to the fact that the Army are unavailable for security duty as a result of “snow” duty, and the fact that transport is restricted ? Just a thought. I mean banks are usually prepared for Christmas. Or maybe people are travelling different distances becasue of the cold, and for this reason have used up all the cash in their local small bank ATM….

    • wills

      Twas the week before xmas and AIB on Grafton street of all places and 1, 2, 3 ATMS not operational on an afternoon of my going about town.

  7. idc

    … but if eire burns the banks causing contagion and others do the same. are you sure there will be anyone left to borrow off? or indeed will the world economy be still the same as that on which you base your premis. perhaps i need more altitude!

    • LKSteve

      It’s a good point idc. The domino’s are stacked up nice & tidily for another massive GFC. I’m not sure the FED, the Bank Of England & the ECB can save us this time. If Ireland starts a fire in Europe it may spread around the world & then the game may be up for our Fiat Money Monopoly Game. Ireland’s situation is obscene but unfortunately, the country & it’s government may have made it’s bed. The powers ranged against any default are significant & the stakes are very high.
      I think what the people need is a good dose of gratification to wash down the austerity. Start locking up thieving bankers & corrupt politicians. Bankrupt developers & their wives. Stamp out the black economy & just get down to the business of paying back the debt. I don’t see any other way without endangering the entire global economy.

    • Firstly, we won’t be burning the banks, we’ll be burning the ECB, the lender of last resort.

      Secondly, as David points out, once we’re shot of the banks, we no longer have a problem and don’t require the ECB/IMF loans in the first place, and can borrow on the international markets (which we are currently effectively shut out of).

      Once we ditch the Irish zombie banks, sort out public spending with a plan for growth and jobs, it doesn’t really matter what the ECB or the rest of the Eurozone does, investment will flow in to the country.

  8. joycer

    Great article, I see the connection with the Famine, very strong (and scary) indeed. Question, where and how do we get hold of the private money on deposit… to save ourselves and regain independence? Do you know of any mechanisms? Would the people be willing to release their savings (@ 16pc of GDP) for the sake of “the country”…if this is what you are intimating in the article?

  9. daryl75

    Expecting my 4th child next march… I cannot sit around and wait for another colour of political opinion to wax lyrical and do nothing to stamp authority on the Banks.
    We need a political revolution… public floggings…
    Ofcourse it won’t help us.. but it will make the nation feel better whilst they are waiting to fill up their water containers…
    Only a handful of current serving TDs could manage their way out of a paper bag.. To cap it all German children are sending christmas boxes to St vicent de paul.

    Wake up folks!

    • Deco

      Nice of the Germans to do that. But we are not that poor. Just look at all the fantastic new German built cars driving around. The government ministers have one each. Can we send our government ministers to Germany to pick cherries in orchards, or maybe to help renovate some former heavy industry waste zone in the former DDR ?

  10. Deco

    {
    Can you countenance being the citizen of a country that runs a surplus on its balance of payments to allow other countries to borrow that money to invest in projects that become profitable because our emigrant sons and daughters work for them? So we export our people and our capital to raise the return on investment for foreigners?
    }

    I don’t know. It seems to be what China, India and Germany are aiming at…and they are in a very strong position at the moment….India bought half the IMF’s gold, China wanted to buy all of it and was stopped, and Germany has a banks that have their safety deposit boxes filled with precious metals. Of course, they are all taking a very long term perspective.

    There are jobs in the export sector here in Ireland, but it seems that too many of the locals are choosing college courses that are of no relevance. In particular there is a shortage of people with real technical skills and any of the latin based languages.

    There are plane loads of construction specialists heading out, and there are plane loads of IT specialists heading in. The hard sciences, and hard thinking in general, became fashionable areas to avoid in the last decade. We have a nationwide “scarlet O’Hara” syndrome in action.

    There are opportunities here, it is just that it has become more fashionable to sigh, demand that reality adjusts to fit our liking, and bum around looking good all of the time.

    It is the lifestyle stupid. I have the lifestyle, therefore I am. Believe in the lifestyle…

  11. Deco

    Concerning Ireland’s budget surplus, Constantin Gurdgiev always makes the point that we must differentiate between GDP and GNP. A lot of that surplus is as never going to enter the real economy. But, economic commentators think that it will – and if you are living on credit, then you will accept every lie that supports your creditworthiness, and that sustains the party.

    In other words, we are not as rich as we are telling ourselves. But we enjoy telling ourselves anyway – sure it is all about pride. And humility is banned, and is un-Irish, and is the mark or everything that is dispicable in the social code of this country.

    • Malcolm McClure

      Deco: It is not all about pride. It is about the habitual avoidance of rigorous thought, which catches emigrants out when they work in a country like Germany, where people are careful to mean what they say. Abroad they will find no Jesuitical ambiguous denial or soft soap flannel outside the entertainment or sports industries.

      In Ireland we worship our sports stars for what they do, not what they say. But when they come on with the Blarney, they infect the whole nation, until someone like Roy Keane stands up and tells it like it is.

      Who has not listened to sports interviews where every sentence is peppered with multiple “ye know” or “ye know what I mean” or even “an’ stuff like that” introduced so that there will be no interruption to the incessant flow of idle chatter.

      Where does this come from? Is it a Munster infection of language?

      Perhaps some Gaelge scholar can say whether “ye know” is a literal translation of “Agus”, which conjunction I seem to hear with similar frequency in Gaelic broadcasts.

      • Deco

        Malcolm – the persistent emphasis of pride for it’s own sake is the most visible impediment to any form of rigourous analysis. Basically, any form of practical thinking is driven out by concern for the emotional kick of maintaining the superficial.

        My theory is that Pride/Arrogance/Conceit/Superficiality/Looking good/creating an impression etc.. is the pervasive element that ensures that there is rigourous rational thought is effectively crowded out by noise. The second most pervasive element is the control that vested interests hold over the parameters of any public intellectual debate.

        • Deco

          a society can concentrate on the veneer or the body. It can think about the superficial OR the necessary. But you cannot resource both.

          As indicated by the current hyper-expensive Terminal 2 project, we have developed into a culture and a society that allocates resources with an emphasis on keeping up appearances, at the expense of the rudimentary and essential aspects.

        • Malcolm McClure

          Deco: I listened carefully to the repeat of Ivan Yates recent interview with Brian Cowen on Newstalk this morning. Cowen had practised his pat answers to perfection, until the final minute, when Yates asked him about his greatest regret. Then the taoiseach bean to prevaricate, revert to type, and the “ye know”s began to tumble out.

          Cowen’s deepest instinct isn’t pride but tribal loyalty. Not for him the notion of government ‘of the people, by the people, for the people’. His ideal seems to be government ‘of FF, by FF, for FF’. He sincerely believes that he has delivered those benefits to his loyal followers, and reminded them that no matter how bad things may seem, if they remained loyal to him, he would ensure that they would be looked after. (With the unspoken implication that the rest of the nation could emigrate for all he cared.)

          Basically he has adopted the Unionist policies of the 1950s and early 1960s that led to the Sinn Fein reaction in Northern Ireland.

          We might yet see a similar outcome here.

          • Tull McAdoo

            nail “ar an ceann” there Malcolm.That little sleep on the last topic seems to have done wonders for your powers of perception. HaHa.
            Cowen is tribal, and when you think of all the money that was spent educating that buck, it just makes you wonder what they are teaching these days.
            Even o’Cuiv or young DEV to some people was ranting on at the Donegal by-election about how certain sections of the media and else where were hell bent on trying to get rid of (wait for it folks) The Catholic Church, The GAA and Fianna Fail. Can you believe that shit from anotherr Minister……Jesus wept…..

          • Deco

            In fairness to Cowen, though he may be deluded he does think that he is doing the right thing. But that might not actually be true. He just has not figured that bit of it out yet….

          • Malcolm McClure

            In fairness to Cowen, I think you are right. He assumes that because he sought the best available advice, he is absolved from any blame in subsequent events.

            This morning he used the term ‘cross-collateralization’ to explain his support for Anglo. Thus, if he pulled the plug from it, the whole Irish banking house of cards would collapse.
            In other words, he knew already that the reported reserves in all the Irish banks was simply a three-card-trick. Now you see it now you don’t.

            And he made the positive decision to deny the public access to those facts. I wonder what level of insider trading went on in the days that followed? And how many pensioners watched the value of their nest eggs get decimated while that was going on?

  12. Deco

    If Ireland is exporting capital to the rest of the world, then does this indicate something about the competitiveness of Ireland for investment ?

  13. Deco

    David – you are correct. This is a balance sheet recession. We came close to a balance sheet recession in 2002, but the media and the establishment talked us into acquiring more debt.

    But, in the long term interest of everybody, fixing the balance sheet is necessary – and it will recapitalize the economy. The debt levels for many people are unmanageable. Basically, in the binge era everything went out of proportion, and it was unsustainable. We can rectify this now. In the medium term everything rests on the adjustment that takes place in the labour market. Basically, people who used to work in construction need to readjust.

  14. Deco

    I think that the saving is not the problem, but a result of the fact that people have wised up to how this economy is really operating. In other words all the binge era propaganda has become hollow, and people are functioning in a more intelligent manner as economic agents, now that they are doing their own due diligence.

    In other words, the savings rate is not actually a problem. The problem was the borrowing rate beforehand. The savings rate is actually the cure.

    • Deco

      I base my conclusions on the savings rate not being the problem – on the fact that the national income statistics are skewed – because of the GDP/GNP difference. In their own real world situations, people are calculating their own predicament, and realising that they are not as rich as the binge era media coverage would have them beleive.

      The binge era borrowing level was based on a lie. And that lie was that GDP was an accurate assessment of national income – and that the GNP differential did not matter, and neither did the net accumulation in borrowing.

      In other words, the lie of Irish economic growth being real and sustainable during the period 2002-2008. This was nonsense, but it did benefit the sectors that were operating in an oligopolistic manner in the Irish economy in this time period. Irish economic growth might have been a statistical fact, but on the balance sheets it was showing up in phantom asset pricing models. And the best example of the phantom asset pricing was what happened in the Irish property markets.

      Therefore the savings rate is not the problem. It is the cure for the problem that existed in the period 2002-2008. And it has to be accepted. Likewise a lot of people in the labour market, are going to have to accept that they must reposition themselves.

      We are seeing adjustments away from an unsustainable economic existence – to a more balance economy. This means strong gyrations for a few years, because everything is out of whack. In other words we will get through this. But we have to accept that to survive requires considerable adjustments.

      The first aspect that required an adjustment was the savings ratio. This is to fix the financial balance sheets. The second aspect that requires an adjustment is the labour market. Labour market rates in some sectors will have to fall in order to sustain employment levels. And Labour market participation in other sectors will have to increase in other sectors to avail of opportunities. These take time, but they are necessary for recovery. Unfortunately, it seems to be the popular view in both aspects to tell the people that neither adjustment is necessary, and that “business as usual” can continue. There is a market for this type of delusion, but in factual terms, in terms of addressing our predicament – it is utter nonsense. Unsustainable economics has to be thrown out, and sustainable economic models must take their place.

  15. michaelcoughlan

    Hi,

    I presume once AIB and BOI are sold on the new buyers will negotiate with the senior bond holders? There should be a return to the people from sale proceeds and we will have had the breathing space to sort the problem in the current account as well as doing our bit to save the Euro?

    I just don’t believe it is part of any plan for the banking debt to be with us for the long term because as Constantin has consistently pointed out the debts are too big to pay and default in the current situation will be a certainty. I presume if the two main banks are sold the will be sold at a price which reflects the reality of their balance sheets and the senior bond holders will be taken to task by the new owners?

    I am not an economist so I would welcome and comments that would help clarify the situation for me.

    Regards,

    Michael.

  16. Tim Johnston

    Spending levels were too high during the boom, why would we want to return to those levels? Let the economy contract – better that than going back to the days where we borrowed to maintain our lifestyles.
    “Spending” in and of itself is not the answer, spending on the right things just might be.

  17. wills

    An economy based on consumption is dying on its legs while the economy based on production is trying to keep alive under the strain.

  18. David is correct!

    From the 32% deficit, Anglo Irish Bank alone counts for 20%!

    I advocate for a fact finding commission since long, not this joke of a banking Inquiry that was spear headed by EU interests in form of Mr. Regling, but a peoples commission that can be trusted to not be corrupted by the current establishment.

    Without learning the truth about Anglo Irish Bank, we are deprived of finding closure and learning the lessons. This has to be avoided, then again, is up to the people of Ireland to demand. That this is possible to achieve do, we saw in Iceland.

    But this is not Iceland, and here Bertie Ahern is still active, sells out forestry of the size of two counties, to satisfy EU demands.

    You could not make it up!

    • Tull McAdoo

      Georg.. We the people have spent 100 million euro on reports , opinions, accounts, crystal balls, brass balls about Anglo Irish Bank since it was Nationalised.
      The only thing to emerge from these deliberations is that Anglo is indeed a “black hole” and it seems that its event horizon is just off St.Stephens Green.
      This event horizon is linked via some sort of “worm hole ” to Kildare Street. This worm hole is acting as some sort of vortex, sucking everything into it from loans, pension funds etc. even including former ministers for finance (dukes).
      I think there is nothing left to do but NUKE the fucker…..

  19. John-Paul O'Driscoll

    In the past two years, actions taken by Brian Lenihan and company to deal with the banks, economic doom, and the EU/IMF bailout have been swayed, not by wise words or counsel from sources like David McWilliams, opposition parties, trade unions, but from within Merrion Street and from Brussells. All the logic, wisdom, and persuasive recommendations given by David and others are wasted as long at this government remains. Since the self-serving Jackie Healy Rae and Michael Lowry did not pull the plug, it would fall to a few Fianna Fail TD’s to resign from the party in disgust over damage to their 90-year-old party or the years of penury that will follow from here. Is there anyone in Fianna Fail who puts country before party? That Man from Achill who parked his cement truck and cherry picker in the gates at Leinster House should be made Man of the Year for taking bold, decisive action.

  20. irishminx

    What Brian Lucey tweeted….

    brianmlucey brian lucey
    year on year household deposits in banks are down 6.7%, non-financial corporations deposits down nearly 15%
    4 minutes ago Favorite Undo Retweet Reply

  21. So far. A look at deposits in Irish banks tells a story of capital flight. This is the thing everybody is so scared of if the 2008 debt guarantee is revoked, but its happening already:

    http://www.centralbank.ie/frame_main.asp?pg=sta_home.asp&nv=sta_nav.asp

    See Table A.1 Summary Irish Private Sector Credit and Deposits and note the growth rates in cols 12 to 14.

  22. goldbug

    DAVID.

    DONT FORGET WHAT YOU ARE DEALING WITH.

    BOTH PARTIES WORK THE SAME CRONY NETWORK.

    THEY DONT CARE ABOUT DEMOCRACY.
    THEY WONT LISTEN TO “FIXING IRELAND”.

    THEY DONT WANT A FREE IRELAND.

    IRELAND IS BEING DELIBERATELY ATTACKED.

    WHY DO FILTHY SCUM WANT ENSLAVE THE IRISH?

    BECAUSE THEY ARE CRIMINAL, GREEDY, PARASITES.

    THEY WILL RAPE THE LAND UNTIL THERE IS NOTHING LEFT.

    ITS JUST WHAT THEY ARE.

  23. paddythepig

    What is David suggesting here? That the Government borrow the people’s savings, and forget the IMF/EU?

    What terms could savers demand or expect (assuming the Government would play fair and allow supply and demand to determine terms, rather than just grabbing or confiscating savings?).

    I’d expect to hit 3% fiscal defecit by 2013. I’d want 3% per annum for my money. I’d want the public sector wage bill brought back to pre-boom levels. I’d want all the quangos shut. I’d want foreign aid reduced to 100 million whilst a fiscal deficit remains, with a promise to allocate 50% of any future surplus to foreign aid.

    The idea that savers should finance the existing spending binge is a joke. The first whiff of such a scheme from the Government without any serious reform would see capital flight go into over-drive.

    • Not speaking for DmcW but I don’t believe anyone on here is suggesting the binge continue.

      Just about everyone wants the kinds of reforms you mention plus more such as the lowering of business costs, lowering of lease/rent/owner property costs, lowering of energy costs, labour costs. Reforms in the public service and government a top priority.

      Why we are holed beneath the waterline with this EU/IMF pig in a poke, is, as well as the penal 5.8%, the money is being splurged on keeping the binge going.

      By the way the awr on the Government Solidarity Bond is 4.14%, so if you only want 3% return on your money, you could invest in that and send the difference to me, or give to charity:)
      http://www.statesavings.ie/Pages/default.aspx

      The way the three stooges, tricky Trichet, Lenny Wrong and Biffo The Clown, are wrecking our economy you might want to give your beloved a gift made of gold or silver instead:)

      • paddythepig

        Solidarity bond is at 4.14% to attact people to invest in the current binge climate. A higher rate is not always a good thing. 3% is appropriate I think for the stricter terms I would like to see.

  24. Deco

    ” We still have the financial means to save ourselves”
    ….[ but intellectually we are more bunched than we ever were ]….

  25. Deco

    let us not forget….the Anglo “gang”…

    From the Cookie Monstor at politics.ie

    http://www.politics.ie/economy/140523-anglo-irish-bank-bondholders-revealed.html

    This, for those that never seen it before, is THE LIST.

    The list of the concerns who benefitted from the Anglo Bailout.

    And this is how Ireland is run by the people at the top. Just search for the word “Haughey”….and you get the interesting paragraph about how “business” operates…

    http://www.politics.ie/economy/140523-anglo-irish-bank-bondholders-revealed-8.html

  26. Deco

    I am beginning to suspect that media coverage of the recession is done in such a manner to provide every possible explanation except that the people were sold a pup and “out advertising sponsors” ran off with money.

    This is a country that spent 750 Million Euro on Property advertising in the binge era. That is correct 750 Million Euro to get people to bid up the prices of houses to statospheric and nonsensical levels.

    And there has not been a word about it. Instead it somebody else’s fault. Usually Seanie fitz’s fault. The point of this is to keep us in intellectual subprime territory so that if the opportunity presents itself the whole process can be re-run again.

  27. We have No Financial Means to save ourselves .When did cash/investments get an Irish Passport ? Cash is mobile and does travel fast and to anywhere at the touch of a mouse.

    Trust and loyality at the Irish social level that holds and manages that cash does not exist and soverignty of that cash does not require a passport to travel.

    That means Soverign Bankruptcy is a Reality and upon us and nothing will change that soon .

    We are in a Sovereign Camp ( call it Dafur #~) without a city or a management and all the way back for us will arrive at a tea field in India with swollen feet and exausted.

  28. dwalsh

    I think the figures and the argument that David lays out show us clearly that the European and global political and financial elites are trying to save the global banking system by nationalising the losses. I don’t see that our domestic political and financial elites can or will break ranks with their European and global colleagues.
    It might be argued that since we are so insignificant economically no one would notice if we jumped ship and sorted ourselves out — along the lines of Iceland for instance. But our European friends would notice and would resent the hammer that would fall on their banks when ours defaulted.
    I don’t see that we could choose that route as members of the EU; I don’t think we have that choice any more — unless of course we leave the EU; and there is no political will for that in Ireland…at the moment.
    This is a global event and I believe the only way forward will be a global solution. I think 2011 will bring further revelations about the true depth of the financial disaster that is facing the Western nations and the global banking and financial systems. Gradually their will be a social and political awakening. Only then will there be a possibility of a real solution — by which I mean a global solution.
    It will have to get worse before it can get better.

  29. Deco

    The Ditherer is stepping down as a TD. This makes no difference because he does not appear in the Dail anymore anyway.

    http://www.breakingnews.ie/ireland/ahern-to-retire-from-politics-487471.html

    The only accolade provider so far is the chancer he left in his role as Taoiseach. We can expect McUseless to issue more accolades tomorrow. There will be special coverage on the media. By the end of it you will wonder how we will ever survive with the hoor.

    No doubt lecture tours will be organized by his mates here, plus New Labour in the UK, and various other parties in the Euro Liberal group. And of course let’s not forget his chums in Tammany Hall in the US. So as to impart bad grammar, bull, makebeleive economics, sports verdicts, pints of bass, and fantasy financing on a paying audience. They will never be the same afterwards. I will rest my conscience that I will not consent to encouraging such drivel.

    Where is the feel good factor now ? Where is the Teflon ? What happened to grohtt ? And Faawss ?

    So the has come of the career of the Great Socialist who decreed that 800 quangoes bloom, – and stuffed them with his apparatchiks.

    • Deco

      I meant to say “By the end of it you will wonder how we will ever survive without the hoor.”

      • Tull McAdoo

        Aw for God’s sake, I went to bed last night, windows open, beautiful breeze coming in across the Indian Ocean, what we call the “Fremantle Doctor” down these here parts and I get up this morning to be met with the news that we are about to become Ditherer-less or Dither-less depending on your grammar and which foot you put on a spade ;-) ;-).
        Well now without further adieu, I would like to recommend the following gentleman, who to my mind has all the attributes necessary to make a good public speaker above in Drumcondra……

        http://www.youtube.com/watch?v=qkChjAW0E0E&feature=related

  30. Ze Rourke

    David,

    I have to say I don’t like this article nor the previous article ( on the trusty bus driver) for what I feel are an element they have in common. The general argument of both I think is that somehow the ordinary folk are not to blame for all of this and should in no way shoulder the cost. i can’t say i agree with this.

    For me both articles are a bit awkward. They express a patronizing note of solidarity with the common man, while making very big and unsupported assumptions and ignore some very basic truths about our collective involvement and choices at any point in this whole debacle.

    I have my own taxi-driver story I’d like to throw in this point.

    I remember speaking to a taxi driver on my way to a house on the SCR in Dublin two years ago or so. The driver – a normal enough Dubliner, mid-to-late thirties – chatted to me about his situation. He said he had a young family ( two kids ), a spouse with good income, they their own house and TWO others bought as investments, all out Tallaght direction.

    His problem which he was evidently preoccupied with was that the property market was foundering, and he was now struggling to rent the houses and was under a bit of economic strain. I was figuring, making a couple of assumptions myself that the guy had been able to get a million euro or so ( including the cost of credit for all his loans ) from his bank in a 10 year spell on the back of his self-employed taxi business, wifes second income and presumably first houses increasingly positive equity.

    To me this seemed crazy, why did the bank go giving this amount of credit this guy and his wife? And why would himself and his spouse with a small family, a home which probably had appreciated a lot in value, and what looked like two secure enough income lines wish to commit to paying an additional say one million euro to a bank across the course of 25 years in a leveraged bet ( as the author here would probably put it ) to get a lot richer in the short or medium term? Would having a happy home, 2 kids and two incomes with ample money to spare not constitute enough wealth for any pair of adults? Why did the bank think these people in particular, not being derogatory he just appeared pretty average to me with no real experience of constuction or property, could pull this off? What happens when everybody else does this ( which they already had it seems )?

    Of course this was no means unique.

    There were many forms of small scale individual speculation over the last 10 years, or acts that economically fuelled it all by normal run of the mill Irish citizens. For example ‘interest only’ mortgages – speculators buying homes in order to flip them in an ever rising property market. This created a huge pressure for anyone who wanted to buy a hpouse to beyes as intended a home! Then there were the loving parents helping their little Johnnys and Marys with that first step up on the property ladder by letting them live at home until they were thirty-something accumulating ever larger deposits and or possibly then or giving them 30K, 50K or 100K handouts to help them along as well, in the process hugely distorting prices by adding huge savings to them? Or sometimes they bought those second homes just because the money was lying around? The rational? Your money is as safe as houses.

    Estate agents, ‘property porn’ in the media, banks, politicans and the construction industry all have perpetuated this fallacy. But tell me honestly, aside from the buy property ‘message’ that was being delivered to us the Irish nation, was this not our national mentality to think this also? In societal gossip, in our most fundamental group psychological behaviour patterns, in our pub discussions and sibling murmurings did we not cultivate the myth of financical safety in houses and the easy money to be made? Of valuations actually being liquid and of those values reflecting in some way our own new found self worth? Did we not condition ourselves perfectly to accept all the fallacies when they were presented? Did this not permeate every pore of society in some way? Did the estate agents, bankers and the developers not dwell amongst us? Did we all not suffer a dose of the green eyed monster to some degree or other watching them making it? Is that not what encouraged people to get on board and speculate too? Did huge tracts of that rampant speculation, and economic propping up of the speculation, not get dressed up emotively as ‘ahh-its-just-to help little Johnnie / Mary get a small place for themselves’?

    Were we not central to it all? Was Bertie not re-elected twice? Was gombeenism and stroke politics not culivated? Is that not why Jackie Healy Rae and Michael Lowry exist as king-maker TDs today? Haughey got away with everything back in the 80s and 90s remember?, and when he was Taoiseach.

    Was it not the common man( if bus drivers and taxi-drivers can be held to be representative of that) who voted these people in ? They voted for tax cuts and SSIAs and public private partnership and bigger pensions and bigger social welfare? ( I’d guess the taxi-driver in my story voted FF – my hunch ). Were we not all bought in some way and did we not all tacitly agreed to play our roles in this giant sham?

    So I ask why do we deserve to be rescued from this fate that we were certainly not powerless to stop – but we didn’t – and in many cases, we essentially voted for it?

    Articles like these two here ,that I mentioned, don’t help the situation generally I feel, they play an unbalanced game of blame.

    People generally are only waking up to the full extent of the economic situation now. I think Morgan Kellys article of November last, the one where he visualised an Irish society in Stage 2 of this financial crisis almost tearing itself apart at the seams, is pretty much on the ball. This blame game will be a big element of the next part of the debate here. The politicans will try to obfusicate it all. They will put up smokescreens and zig-zag like some lone german capital ship hunted by allied forces in the atlantic in WW2. Don’t let them. Please, please use your influence well. You generally have to date.

    As for me, I’ll be getting out more than likely!

    • mishco

      This is a debate that has been thrashed out many times between posters here, which is maybe why you’ve had no reply: namely, to what extent are we as a nation responsible and to what extent are those who more directly got us into this mess (i.e the “insiders”) responsible? It reminds me of all the recriminations that went on both inside and outside Germany after WW2. To this day you will not find agreement on whether the whole German nation or simply its “insiders” were to blame for the hell of the Hitler years. On this site there are those who claim they had no part in the “mistakes made” and they tend to be among those who do a lot of the blaming. I do tend towards your view that everyone must share some of the blame; but also that there are a lot of people in high places here who will continue to try to cover up what took place in the Tiger days.

      But I don’t see Ireland tearing itself apart at the seams. It’s not the only country in dire economic straits right now. Nor is it in the same sort of straits as many a 3rd world country, for all the moaning. There are solutions and David and some other posters here keep on suggesting them. Let’s hope that those who have some positive and new ideas will use them in action by becoming the New Insiders (in the best sense of the word) on the political stage. There is still time, though not much.

    • idij

      Until such time as there is wholesale common man mortgate default, the blame lies elsewhere. It may feel good to berate the common man for his foolishness, and indeed he was foolish, but for the moment he is paying his way. That day may yet come when he is not, and defaults will multiply, but it is not here today. The current bank problems are caused by a small number of large scale speculators. This must not be lost sight of. Everyone is not to blame today.

  31. Ze Rourke

    Sorry all – about the size of all of that ( above )!

    Smaller next time I promise!

    Happy New Year!

  32. With all due respect I disagree. Your conclusion that Ireland can pull itself up on its own capital is probably incorrect, because:

    1) The green curve (private savings) is strongly dependent on government employment (red curve), which in turns depends heavily on borrowing (not sustainable) and on taxation (one cannot pour out of an empty vessel).

    2) The hole is too deep. If the total banking liability are (were in 2008) ~600Beu – that is about 150keu per person. Even if reneged upon (which would be perfectly OK since they are, sorry – were private companies), it leaves about 120Beu of recent government borrowing – if that were in turn reneged then it would probably leave Ireland in a similar predicament as N.Korea or Cuba. You cannot recover economically being cut off of the international trade and business. One of your leaders (of the same party…) even tried that in the 1940-ties and 50-ties and it didn’t work.

    3) Too many people (probably ~50% of the population in my rough estimate) directly or indirectly draw their income from government which in turn drew its income from international loans and property taxation and duties. Both sources of “revenues” are now gone. Expect the real net GDP to drop hugely even by the same %, once the government will truly run out of cash.

    4) There is no industrial sector large enough that would employ sufficient people to drive economy out of the recession. The only good and self-sustainable sector is agriculture but that probably employs only about 20% of the people (quoting from memory).

    Regards,
    Stan B.

    • Tim

      stanb, Can you support your assertions/figures, please?

      “The green curve (private savings) is strongly dependent on government employment (red curve),” How? The majority of govt emplyees earn less than €40k pa; they can’t afford to save; rather, they spend all that they earn, to survive; thus, spinning their income throught the private-sector economy, before money returns to the exchequer through taxation/excise/VAT, etc.

      “Too many people (probably ~50% of the population in my rough estimate) directly or indirectly draw their income from government”. How can you say this? Ireland has over 1.8 million people employed; only a few over 300k are govt employees. The other 1.5 million are private sector.

      How can realistic discussion happen, if we defy/twist reality?

      • paddythepig

        Tim, with 300K public servants, costing in total circa 20 billion, that makes for an average of 66,666 Euro salary. Economically, it’s the average that really counts, not the majority.

        You might be interested in some of the following articles.

        http://www.sbpost.ie/news/irish-public-sector-workers-among-worlds-highest-earners-50628.html

        http://www.ronanlyons.com/2010/08/03/pay-bill-figures-show-the-need-for-public-service-transformation/

        http://www.ronanlyons.com/2009/02/04/public-sector-pay-in-ireland-the-e50000-question-its-not-that-difficult/

        A rapid large scale redundancy program for the public sector, with further pay cuts is a racing certainty in my view.

        Point number 4 in stanb’s post is the salient one, though a little pessimistic IMO. We have tourism, a large multinational presence, and a growing number of people at least trying to start businesses or thinking about doing so.

        • Deco

          The real question is this ….

          Are those 300000 public servants adding 20 Billion Euros worth of goods and services to the rest of the population ???

          And in the case of some people….are they adding any goods and services for the benefit of the population at all ??

          How many of those 300000 are actually increasing the efficiency of the economy, or the effectiveness of the society ?

          • Seven

            “Don’t burn the Bus drivers” unquote

          • irishminx

            Deco, Tim & Paddythepig,

            I challenge you to do the job I do! I am a public servant and my monthly salary is 1,600 Euro’s. I job share, for the record. I have worked in my job since 1992, prior to this I worked in the private sector. Between June 1999 to August 2002 I took a career break, because I needed to be with my children while their Dad and I divorced. BTW I didn’t return to my job in Dublin, I applied for the same job in a different county and then resigned from my previous position.

            In the first 6 years of returning to my public servant job, I worked 8:30 am to 8:30 pm without being paid over-time nor did I get time in lieu. In the last two years I still work unpaid over time, as my job entails making sure family get money to live. I do my job to the best of my ability and I give more to my clients than just a service or money, why? Because they are human beings in need.
            I have applied 4 times in the last two years to return to work full time. No joy on that front. As a result of college fee’s for my daughter and I, I had to go to the Saint Vincent De Paul for financial help earlier this year.

            And I work! I am not a spender, I did not benefit from the Celtic tiger!

            However, your comments above piss me off.

            Many people could NOT do my job or give the type of service I give to people who come into the office to see me. I don’t complain that I have no disposal income, given it has been taken off me in levies and pension levies. I travel 70 miles to do my job and it also means that I stay with my parents to cut down on my travel costs. I am 49 years old.

            How dare you ask if I am efficient or if I add to the goods and services in the society I live in. When in truth, you are pulling this out of the sky and not from a place of personal experience!
            Do you add as much as I do to our society??

            I know I benefit the population I work in and live in. I have people who ring me or call to my home, when I am not working, requesting my assistance in filling out forms, social welfare and HSE and sometimes even legal information. The last time I did this was last Monday and I am on annual leave just now!

            You are all generalising and my need is that you stop!
            Get your facts right first.
            And only when you walk in my shoes can you judge me and many of my colleagues.

            I believe your type of crappy judgement is what is inherently wrong with Irish society. Judge not, least you be judged!

            I know I am personalising this, which in my (2nd) profession is a cardinal sin. I own my own response.
            But at least I am big enough to own and admit it! Plus, I also know what I am talking about.

          • paddythepig

            Irishminx, I think Deco’s question is fair. All organisations need to appraise who contributes and who doesn’t ; that is all he is asking about.

            Taking your post at face value, you do your best, and contribute. If you were to follow Deco’s logic through to conclusion, you would benefit from his line of questioning, as the wasters would be gotten rid of, reducing the pressure to finance the true contributers.

            Surely you don’t content that there isn’t massive waste in the public service, as there are with almost all large organisations? Don’t you want that eliminated?

          • irishminx

            Paddythepig,

            Then make the questions specific to the top managers in the PS. They were not.

            I’d have all the front line workers run the services, as they know what is happening on the ground.

            Paddy, I say it as it is for me. You have my word what I write is honest. I was brought to my knees requesting financial help from V de P. Trust me on this, I worked for over 7 years as a volunteer with them. It was one of the hardest requests I ever made in my life. I will not forget their kindness to me.

            As for my work, I love it. Even if my employers make it as difficult as they can at times!

            I do wish everyone here a healthy and love filled 2011 and my wish is that we all make Ireland a more humane and mature society in 2011 and beyond.

            Slainte.

          • irishminx

            Deco,

            I have questions relating to what you write today and I also refer to your posting yesterday.

            If you were trying to make a direct and meaningful proposals at reform within the public sector, then why do you say, (Deco) …. “Those who provide services that get the consent of the people are safe.”
            I hear what you are saying, however, I have a different point of view.
            If I do a good job as a public servant, then under your reform of the public sector, I will be safe?
            This is my clear understanding of what you are saying?
            Is it yours?
            Does this then mean that if I have a colleague who is, well lets say, not as good as me in their job, then are they unsafe?

            Deco, coming from where I am, on a human and psychologically level, making a human being unsafe only heightens their defences and maybe you don’t realise this?

            1. Under Maslows Hierarchy of Needs, the next one up after food and shelter is Safety and Security.

            2. As a qualified Relationship mentor, (my 2nd profession), I know that when a human being is threatened in any way, their defences / protectors rise hugely.
            This is turn brings about many difference responses, to flight or fight scenarios within the persons body, physically, mentally, emotionally, creatively, behaviourally, spiritually and maybe even sexually.
            Why? Because you are not ensuring safety to that person nor are you honouring that persons presence.

            I ask you, do you think by making a person not feel safe that you will……………….(Deco) ….”make direct and meaningful proposals at reform.”?
            I think and know it won’t happen. Deco, I too am angry at our present Government on many levels.
            1. I know my anger calls me to take positive and safe action for me and others.
            2. I also know, when the Government fall and they will, that it will be my moral duty to ensure their and their families personal safety.
            Why?
            If I don’t make it safe for another human being to be self, then I know as night follows day, their defences will go up, because I am threatening their safety, as it is a basic human need.
            Why would I threaten another human being, when I know how unsafe I am, when my basic human need is threatened?

            I know I wouldn’t make any meaningful reform, if I threaten another human being. No positive change occurs in any human being where their safety is threatened.
            I felt threatened by what you wrote yesterday and indeed by what you’ve written today.
            I don’t think you have any real intention to make people feel unsafe.
            I feel you need to think through what you write. Bring it back to how you’d react if you are threatened. How would you respond?

            Why would I be safe Deco because you deem that I do a good job?

            The work I do, can not be measured in the main. Sure the amount of people I put through my hands can be measured, but not the service I give.
            My kindness, humanity, compassion and support can not be measured. Nor can the difference I make in their lives be measured.

            This is why Deco, when you say “Therefore I do not understand why my remarks could possibly be taken as an offence”, Because you judged me, I know not personally, you generalised
            by saying the public service. I did take offence Deco, because I felt you threatened my safety, judged me, from a place that wasn’t credible, authentic or from a solid place of life experience.
            Had you, you could not have written what you wrote yesterday and again today.
            I take it you don’t work in the PS?

            If you did, you’d know, I am accountable to the following, my line manager, the two managers above her/him, the HR department, TD’s, The exchequer and to the people who use the service. These are all my bosses.
            As for efficiency, any day I go to the office, I have a queue of at least 50 to 70 people that I must see before lunch.
            I spend the afternoon processing each application, answering phones, giving information, checking everyone out, doing house calls, plus, plus, plus.

            Now maybe you can understand my upset yesterday. Deco, I feel your BS’ed your way through your postings yesterday, I feel exactly the same way today.
            I feel you do not know what you are talking about. Bull shit upsets me Deco. I am a straight talker.
            I also think, to be fair, that you are trying to find solutions to our economic mess, like the rest of us, however, my need is that you stick to what you know and learn from other’s life experience and professions, like I do.
            I, no more than you or David or furrylegs or cbweb or Harper66 or wills or who ever else posts on David’s blog, have all the answers. We don’t!
            I believe collectively, we all have solutions, because we are all geniuses and powerful beyond measure.
            I believe this Deco because I also believe that we are all, each human being, are unique expressions of God’s love here on earth.

            I don’t have all the answers or solutions Deco, neither do you or David.
            Together though, in safety, we will muddle through to the solutions, if we are kind, loving, compassionate and patient with one another.
            Life after all is a school for each of us human beings.

            I admire your courage in responding to me Deco and I also appreciate your postings.
            I learn a lot from you.
            My need is that you don’t threaten my safety.

            Slainte, kindness, love, safety and compassion to you and yours in 2011

            Minx.

        • Deco

          And of course, how many are just constructing self-perpetuating institutional imperial concerns that serve their own ends, that repeatedly create problems to justify their existence, or which waste money so as to ensure their continued existence ?

          In addition we must ask if some of these services could be rationalized to provide the same benefits for less costs, or indeed greater services for reduced cost.

          We can also ask if outsourcing of certain services might be of benefit to the taxpayer, and the receiver of the goods and services.

          • Seven

            From “Burning the bus drivers”….
            It is public sector workers like this man who have kept the country running in the snow. It is lads like this on the average industrial wage who get up early, trudge into work and take the rest of us from A to B. People like this didn’t cause the bust.

          • Deco

            The busdriver has nothing to fear.

            But there are 1000 people working either for IFRSA or the Central Bank of Ireland. And on the basis of cost and benefit to the rest of society, they have serious questions to answer.

            Those who work are safe from such an assessment. But the wasters who get faced with questions concerning the justification of their wages are in trouble.

            And that is my central point. Those that can answer to the citizens are safe. It is those that run for cover that are in line for the chop !!!!

          • Seven

            “Are those 300000 public servants adding 20 Billion Euros worth of goods and services to the rest of the population ???”
            There are some services you just cannot measure financially and that is one of the problems facing the front line workers. Financially a cheerful bus driver or a public servant giving assistance above and beyond the call of duty cannot be measured and hence is seen as having no value. In the private sector, this is recognised as “customer care” and is considered to have a value, be it return sales or sales due to word of mouth. Put a value on the compassion shown by nurses on a daily basis, I dare you; ask anyone who has ever been in hospital.
            Outsourcing has it’s own difficulties, between consistency, responsibility and plain quality of staff and supplied services. Not to mention the rights and wages of the outsourced staff which in this day and age can be dictated by the agencies and companies which can make money by supplying said resources to the public services.
            All in all, it is a very difficult challenge to address but this challenge cannot be resolved by a ruthless stroke of a very broad brush.

          • irishminx

            Deco,

            There is always a temptation to “construct self-perpetuating institutional imperial concerns” that serve anyone’s ends! Mind you, that could be said in a more understandable form of English!

            Stop BSing Deco please.

            Scaring and frightening people is NEVER constructive.
            Nor does it heal.

            If you do not come from a place within self of unconditional love, then you threaten people and that is not EVER constructive.

            All human beings ARE unique expressions of God’s LOVE.
            And no, I am not a religious freak.
            I believe formal/church religion has taken individual power away from individuals.

            And because we are all unique expressions of God’s love here on earth, we all have his truth within us, yes, even the elite! Even though we may be broken human beings, it is still a truth. And truth will always out! It is, I believe within our brokenness that we become real and our truth shines.

            My need is that we/you/I stop scaring people and that I/you allow our, A Humans beings greatest gift to emerge and that is LOVE.

            Love is a human beings greatest gift to self and to our world.

            Allow your love expression………………

            It is all we have left Deco.

            Have a happy, Healthy and an unconditional loving 2011.

            Minx

          • Deco

            Minx

            I am trying to make direct and meaningful proposals at reform.

            The citizens have a right to accountability with regard to tax money provided for public services. At the moment there is none. Those who provide services that get the consent of the people are safe. And those who do a good job are safe. Currently we have no accountability, and the people who are in benefitting the most are the people who fill books like “The Wasters” and “Snouts in the trough”.

            It is not in the people’s interest to get rid of those who do a good job, and the people know this and are sensitive about this. I mean surely the public sector can trust the general public ? If not, then perhaps this in itself raises important questions.

            Therefore I do not understand why my remarks could possibly be taken as an offence. How could requiring accountability and efficiency in the application of people’s money be in any way offensive ?

            If you feel personally annoyed, then this was not an effort to annoy you personally. If you are doing good work, then you have nothing to fear. It is those that are not doing their work, or who are wasteful with the state’s money who will find difficulty answering these questions about efficiency and accountability.

            And yes, there is inefficiency in the private sector -but competition enables us to opt out of paying for such inefficiencies and corrupt practices – where competition is an option. There is unaccountability also, but in time, the business moves to the more accountable providers. With the private sector, we have options to enable us to avoid businesses that we whose practices that we do not like. This has the effect of a cleansing mechanism, maintaining choice, quality, and pricing for the benefit of the public. We experience this as improved efficiency. However, we have an efficiency problem in the public sector. The Ahern Socialism/ICTU solution set is no longer an option. And it is not all Seanie Fitz’s fault. It seems that this is the persistent line being advocated over the past two years. There is a fundamental problem with respect to the efficiency and performance of the state, even outside of debacles involving NAMA, Anglo, and the banks.

            If there was no asset pricing boom-bust cycle we would still have a shortfall every year of 20 Billion Euro in the state’s current account, which needs to be filled by persistent borrowing. According to Jack O’Connor and David Begg, such borrowing is “essential for the economy”. I am pointing out the seriousness of our predicament, with regard to state finances. The private sector has been shrinking since 2007, as shown by the unemployment rate, the GNP statistics, and the level of outward labour migration. This despite massive government borrowing to “stimulate” the economy.

            There is something inherently wrong with the economic performance of the state system. And it needs to be reformed or else it will end up in bankruptcy. If the savings rate is higher than previously, then this suggests that in effect people are already deciding with regard to their own financial situation, that state bankruptcy is increasingly probable in the not to distant future. Where will that place the public sector workers then ? Money printing, and borrowing are no longer options. This means that the delusionary politics and rhetoricism of the trade union movement in Ireland must be apprehended in a public discussion, before the country goes into bankruptcy.

            Now maybe I am pointing out something that can only be understood after national bankruptcy comes to Ireland. Maybe the consequences have to become reality, before they are seen. Well, all I can say is that I tried – and that unfortunately the conditions for an objective intellectual discussion on the matter were not present, that ICTU politicians had a far powerful more influence on public discussion in Ireland, than would have allowed such an analysis to be considered as remotely relevant, until after the fact occurred.

          • irishminx

            Deco,

            I feel, know and think that you have misunderstood what I wrote. In honour of my valuable time, I will not repeat myself.

            In relation to dole queues, yes people have waited 4 months for their dole. I don’t believe for a second that this is acceptable, however, civil servants run social welfare. It is a system designed by Government.

            Now if you went to your local Community Welfare Officer after you signed on for the dole, you can be paid that day, providing you have all the information required. Or you may be paid within a week.

            I’ve always known that Community Welfare Officers are more efficient than social welfare officers, mainly, because social welfare is designed a bit like a production line, in my opinion.

            CWO’s have a thing called discretion and social welfare officers don’t have this. However, this week see’s the 1000 Community Welfare Service staff, join the inefficient ranks of the civil service, however, they don’t become civil servant for another 9 months!

            The reason for these changes are many, Harney can say there are 1000 less HSE staff! Also the Government and social welfare wish to limit a CWO’s discretion. Not a healthy move, in my opinion. Also social welfare want the budget that Community Welfare have.

            The supplementary welfare service, which is the scheme of last resort, will, in my opinion, be watered down until it evaporates and will ultimately be lost to the public. Yes to you and I Deco!

            Slainte.

          • Seven

            Sorry for jumping in here again, Minx and Deco….
            I don’t see any tangible proposals yet, I do see threats and a rather biased attitude to the public sector. While I agree around the accountability, I cannot agree with the labelling you apply.
            “I mean surely the public sector can trust the general public ?” you state, this, after the last number of years of the general public being subject to the biased press, commentators such as yourself et al, eh Deco, I don’t think so.
            You remark “How could requiring accountability and efficiency in the application of people’s money be in any way offensive ?” without indicating how you intend to undertake this exercise, more staff to do surveys? use agency staff on minimum wage perhaps? Can you see any chance of the home-help getting a fair hearing there or an understanding of the nurturing and care involved? How do you measure “accountability and efficiency” there?
            I do agree there are inefficiencies within the public sector, while not disagreeing with Irishminx, I do recognise there are dedicated workers within the public sector, but the methodology of weeding out the inefficient would require the wisdom of Job.
            Who will adjudicate? As always, the only measurable, money will end up counting. So, while yes, I agree there should be more efficiencies, it may be that getting there in a positive and understanding manner will be the difficulty.
            I also agree with Irishminx when she states “My kindness, humanity, compassion and support cannot be measured. Nor can the difference I make in their lives be measured.” Yet, because she and many like her have a job, the results of which cannot be priced and therefore measured; how then, are they be categorised into “safe” and “not safe”?
            In addition, I believe Irishminx may also have concerns about personal safety, rather than just job security.

  33. Tim

    Folks, some people *still* do not seem to understand what we are dealing with. This may assist some to see the light:

    The following is the full text of a speech given by former Taoiseach, Bertie Ahern, to his local branch of Fianna Fáil this evening.

    In the speech Ahern indicated his intention to step down from political life at the coming general election.

    “Chairman, thank you for the opportunity to speak this evening to you my closest and my longest standing friends in Fianna Fáil — the members of the O’Donovan Rossa Cumann.

    It is 40 years ago, this week, since I joined Fianna Fáil.

    At the beginning of January 1971, I attended my first meeting of this cumann.

    I did not know it then, but that was one of the defining moments of my life.

    Through the long years and the tumultuous events since, the O’Donovan Rossa Cumann has been my political home.

    It remains my political home tonight.

    Decades later, I can vividly recall how proud I was then to join Fianna Fáil forty years ago. That same pride remains with me now.

    The members of this cumann have done so much to shape my political thinking and to guide my political life. I owe the O’Donovan Rossa Cumann an enormous debt of gratitude for the unstinting support given to me every single day of my political life.

    I learnt a fundamental lesson from those who had gone before me and from those who worked along with me in this cumann, that politics at its best is patriotism. Politics is about love of country and politics is about concern for one’s community.

    Those were the values I learnt in this cumann. Those are the values intrinsic to our party and to Irish republicanism then, today and tomorrow.

    Over the decades, hundreds of people have given of their energy and of their enthusiasm to build a better Ireland through their membership of the O’Donovan Rossa Cumann. Tonight I salute them, and from the bottom of my heart I thank them.

    All of us who are members of this cumann, are proud of the history and of the traditions of the O’Donovan Rossa Cumann.

    Named in honour of the great Cork Fenian, Jeremiah O’Donovan Rossa, this cumann has been at the core of Irish republicanism for generations.

    As a republican organisation, we can trace our lineage back to a Fenian cell which operated in Drumcondra in the 1860s and subsequently merged into Sinn Fein in the decade prior to 1916.

    Following the foundation of Fianna Fáil, the O’Donovan Rossa Cumann was one of the first cumainn to move en masse into DeValera’s new party.

    This is the tradition from which we come. This is the tradition of which we are proud. This is the legacy we aspire to nurture and to hand on. We share a belief in an Ireland that is free, an Ireland that is fair and an Ireland that is progressive. We believe in a truly republican society.

    Fianna Fáil was established to vindicate those beliefs. That is our purpose, yesterday, today and tomorrow.

    Today it is hard, and for some it seems impossible, to keep faith with Ireland’s tomorrow. I know and I understand that now we are in the eye of a great economic storm. People’s confidence has been knocked back. Plans for the future have been put on hold. Aspirations have been sundered. And for some, for those who have lost their jobs, there are truly difficult circumstances and really hard times.

    But if these are difficult days, we can have a genuine confidence for the future based on the real, the sustainable and the lasting gains which Ireland has made. Yes some gains have been lost, but in truth many remain.

    The truth about the achievements of the past decade and about the prospects for the one unfolding in front of us now is that, despite what the critics may say, neither extreme of arrogant overconfidence or self-defeating pessimism are justified or helpful.

    Ireland is not “banjaxed”. Ireland is not “an economic corpse”. Ireland is a country of real achievement and yes of real and pressing problems. The truth is that our country will recover. We will regain our stride and we will succeed in holding on to many of the gains we have made together.

    And the next generation will build on our success and they will learn from our mistakes. It is not just that life will go on; I believe that life will get better. We are an innovative, we are a resilient and we are an achieving people.

    As somebody who had the great privilege of leading the Irish people, I believe in the courage and in the capacity of our country.

    Now and out of necessity, we are forced to step backwards after years of unprecedented progress. But the race is not over, the context is not lost, the future is still ours to win.

    Ireland is fighting back.

    Every single hard day, we are regaining ground. If progress seems slow, it is sure. And it is surest of all because we are handing over our future to a rising generation of unsurpassed capacity and self-confidence.

    And I, for one, deeply believe in the next generation. They are the brightest, the best educated and the most capable generation this island has ever produced.

    That is the lesson and this is the great gift of Irish history. Each generation builds upon the achievements of those who have gone before them. And we do bequeath achievements, achievements that will serve Ireland well in navigating a way out of our current crisis.

    I dearly wish there was no crisis. I realise that it would have been better if somethings had been done differently. But I will not denigrate the good that has been done, or belittle the effort it took to achieve it. The onward trajectory of this island’s destiny is forward-moving, it is progressive, it is the fairer and republican society we aspire to.

    When I joined the O’Donovan Rossa Cumann as a young man of 19, I learnt the lesson of perseverance from older women and men who lived inspiring lives. In hard times, far, far harder than the times we are coping with today, they kept faith, they persevered and they succeeded triumphantly in ensuring that my generation had opportunity that they could only dream of.

    That generation lived through harrowing times. Everything they achieved, even survival itself was a struggle. It was a struggle they never shirked. I remember them tonight with deep affection and with great gratitude.

    And what I remember most of all is their belief in my generation. Their faith and confidence in us as young people, to build on what had been achieved was generous and it was inspiring.

    I remember women like Roisin Page whose was in her 80s when I joined the O’Donovan Rossa Cumann and whose husband had been a civil servant in the First Dáil when Ireland’s struggle was literally for survival and for our legitimate right to national self-determination.

    I remember too Curtis D’Arcy who was a sacristan in the Chapel at Dublin Castle and who had lost his own brother in Ireland’s War of Independence.

    I remember men like Thomas Holohan, who had served as an officer in this cumann from the early 1930s, when Ireland was in the midst of the Economic War. Decades later, and now decades ago, Tom was Director of Elections for my first election campaign in 1977.

    I am talking too about people like the late Brendan Murphy and Emma Murphy, who is still with us.

    And people like Sheila Booth, my mam’s great friend, and her daughter Lorraine who brought a long-haired Bertie Ahern to his first meeting of the O’Donovan Rossa Cumann.

    From all of these people and from so many more, I learnt to believe in a better Ireland. I also learnt too that if experience is important, the passion, the vigor and the fresh thinking of younger people can bring a new vitality and new blood to politics.

    When people like me and Liam Cooper, who is today our chairman, Paul Kiely and, of course, Miriam were young men and women and starting off in the O’Donovan Rossa Cumann, we were always encouraged by those strong and experienced people who had been members for decades.

    I respect that inheritance but I also recognise that I only hold it in trust and not for myself.

    As a young man my motivation for standing for election in 1977 was to represent the people of my constituency; throughout my political life my greatest honour has been to represent them in Dáil Éireann.

    I have been elected on ten successive occasions to the Dáíl, first by the people of Dublin-Finglas and then by the people of Dublin Central as well as being elected twice to Dublin Corporation.

    In every election in which I have stood, this cumann has been my political bulwark and this electoral area has given me my highest vote.

    This evening, I want to say a special and a deeply sincere thank you to the members of the O’Donovan Rossa Cumann past and present. Your commitment and your friendship has never wavered. We have campaigned together and stayed together in good days and in hard times. I am deeply grateful.

    I want to thank all of those who have canvassed for me in election after election as members of this cumann and as part of our wider Fianna Fáíl constituency organisation in Dublin Central.

    During my time as Lord Mayor, as Chief Whip, as Minister for Labour, as Minister for Finance, as Leader of the Opposition and for nearly eleven years as Taoiseach, this cumann has helped me through every challenge I faced.

    Your advice, your friendship and your commitment were vital to me in carrying out my responsibilities in public life.

    And I knew that wherever those responsibilities took me, the O’Donovan Rossa Cumann and the Dublin Central Comhairle could be relied upon to keep the home fires burning.

    Your work always ensured I returned to Dáil Éireann with a strong mandate from my own constituency to continue our work on behalf of the Irish people.

    It was always my plan, and a plan I made clear as long ago as 2002, that I would step down from Dáil Éireann before I was 60. This evening I have come here, to this meeting of the O’Donovan Rossa Cumann, to say that remains my unalterable position.

    With an election due in the spring and my next birthday in September being my sixtieth, I want to confirm tonight that I will not be a candidate at the next General Election.

    It has been an incredible journey and an extraordinary privilege to represent the people of Drumcondra and Dublin Central for over thirty years. I am extremely grateful to all of my constituents from the Navan Road to East Wall and from Griffith Avenue to the Quays for their support in successive elections.

    For any citizen of this republic to become Taoiseach is the highest and the ultimate civic responsibility. It has been my great honour to have been entrusted for over a decade with the great responsibility of that office and of leading our country as Taoiseach.

    To follow in the footsteps of DeValera, and of Lemass has been the greatest privilege of my life.

    As a political leader, the Irish people have given me tremendous support. On great days and in difficult times, the Irish people were staunch in their support, fair in their judgement and deeply kind in their friendship.

    That wider network of support and of friendship, that as an elected leader I was privileged to enjoy, was a mirror of the friendship and the support so generously given to me here in my own community.

    I want to recall the words of the Irish patriot and poet, William Butler Yeats which this evening seem to me appropriate.

    He wrote and I quote:

    You that would judge me, do not judge alone/
    This book or that, come to this hallowed place/
    Where my friends’ portraits hang and look thereon,/
    Ireland’s history in their lineaments trace,/
    Think where man’s glory begins and ends/
    And say my glory was I had such friends.

    I entered politics because I wanted to serve my community, my constituency and my country.

    I passionately believed politics to be a noble profession.

    Decades later, and an older man, I still hold firmly to that view.

    I am proud of what I have achieved in politics and I am prouder still to have had the privilege to have worked with and for so many fine, patriotic and extraordinary people.

    It is not given to anyone in life who tries and tries again not to sometimes fail. Years of apparently great sucess then, are apparently tainted by great failures now. But the truth is more complex and in time it will be viewed more dispassionately. The raw emotion of real shock means it is too soon to take stock. But when that stock is taken, when the eleven years I had the honour to be Taoiseach are more coldly considered, the many positives will be put into the balance with the negatives. The perspective of what lasted and what was washed away will be clearer.

    I believe it will be clear that on health, on education, on infrastructure real progress was made and that over time much of the progress we made will be seen to have remained. These examples of Ireland’s lasting achievement are part of our capacity to move forward and to move on.

    Stating our strengths is not to ignore our weakness because I have said and I know that now we are in the eye of a great economic storm. I know and I understand that these are tough times.

    But if there must be recognition of where we went wrong, there has to be clarity about what we got right.

    At a time when in the wider world Ireland is seen in some respects, that are deeply exaggerated and grossly unfair, as a exemplar of bad behavior, we should not forget, nor should the world that Ireland remains a shining light of conflict resolution and peaceful coexistence.

    The cause of peace on this island is the single cause that more than any other I devoted my time, my capacity and my political commitment to.

    For much of my adult life, violence in Northern Ireland defined global perceptions of the island of Ireland. That dark cloud overshadowed not only what the wider world saw in us, but it deeply darkened how we saw ourselves. Over 3,000 men, women and children lost their lives in a vicious conflict that some thought would never end.

    The problems of Northern Ireland also defined the relationship between the islands of Ireland and Britain.

    When the conflict raged in Northern Ireland, it is fair to say that relations between the Irish and British Governments and, indeed, often between our two peoples, were characterised by mistrust, suspicion and sadly, at times, outright hostility.

    But thankfully old truths have been transformed into new realities. And that transformation has its roots in the Good Friday Agreement. I am proud of the role that Prime Minister Blair and I played in leading those negotiations to a successful and a successfully lasting conclusion.

    Cooperation and friendship now define relations between the people of this island and our nearest neighbour. This is as it should be and this is as I confidently expect it will continue to be.

    More importantly, armed conflict on this island has stopped. And if a mindless minority of dissidents clings to the tried and failed path of the past, violence as a means to political ends in Northern Ireland is over.

    Every single day, I thank God that I have lived to see peace fulfilled.

    I have met the families of the victims of bombings, of punishment beatings, of loyalist death squads and of republican gunmen. The years of murder and of mayhem have left a deep scar on people not just in Ireland but in the United Kingdom too, where terrible atrocities were committed by those who misguidedly believed that armed struggle could somehow supersede democratic politics.

    Peace is our generation’s greatest achievement. Continuing conflict would have been our greatest failure. And not to have had the courage to risk failure again and again would have been cowardice.

    Peace in Ireland has opened a window onto a new era of progressive republican politics. And this has the potential to bring hugely positive benefits for this and for future generations all across this island. The legacy of bitterness and suspicion is being slowly laid to rest.

    This was brought home to me on the day I resigned as Taoiseach, when I heard Baroness Paisley’s inspiring speech at the Boyne.

    She said on that occasion she did not want to hear anymore about disputes or division on this island, what she wanted to hear was about good jobs and families prospering.

    Since the Good Friday Agreement, the challenge for all of the people in Northern Ireland and indeed across this island is no longer defined in terms of old disputes about territory but rather the new opportunities we can make for ourselves together.

    The “Irish question” now is not defined by conflict but about how can we collectively do best for all the people on this island — better healthcare, better paid jobs, better innovation, better schools for our children and a better, shared, future.

    So the fruits of peace extend far beyond the mere absence of violence crucially important though that is.

    A peaceful society allows for an even greater focus on the key priorities of today like delivering jobs, providing quality education and healthcare and growing our economy. It is a peace we can prize even more amidst our economic difficulty.

    A peaceful society allows debate and disagreement where once there was only recrimination and fear.

    A peaceful society allows economic opportunities to be exploited and, by its nature, rejects the protectionist mentality that says you should only do business and trade amongst your own.

    And a peaceful society is one which encourages and fosters cooperation with neighbours, where once a psychological wall of distrust and doubt was a barricade to better relations.

    With peace, there is now no limit to what the Irish people, North and South, can achieve.

    In planning for economic recovery in past recessions, we never before had the immense benefits that peace and stability across this island can bring.

    That is why I am confident about the future. Ireland will rebound. The facts support a positive view. The most recent quarterly figures show that the economy is again expanding. Both GDP and GNP increased between the second and third quarters of this year. This is the first time both measures of activity have been positive since late-2007 so, I believe, we are on the road to recovery.

    And there are other larger reasons to be confident. Our society is stronger not only because much of the investment we made which will stand us in good stead. We are a stronger society because we are more republican in the truest meaning of that word. People with special needs have been brought out of the shadows of our society. Light has been shone into the darkest corners of Ireland’s industrial schools. Ireland is a profoundly more equal place for gays and lesbians than it ever was before. These and more are markers not of what we have done, but of the more we must continue to do. They are the signs of the stronger and more republican society we are in the process of becoming.

    So peace and progress, success and failure are all part of a whole. The continuing effort is the tribute we pay to a life that is always work in progress, and never ever work we can say is done.

    I have stood successfully in twelve elections. Now at the end of this long journey of learning and of leading I want to thank those who helped me along the way and whose friendship means more to me than these words can say.

    I am extremely grateful to all my colleagues down through the years in the Fianna Fáil Parliamentary Party. I especially want to extend my good wishes to our Taoiseach, Brian Cowen, who is a leader of great ability and decency. He has my enduring respect.

    I want to thank also not just you my fellow members of Fianna Fáil in Dublin Central but the party members and candidates, past and present, from other parties and of no party who I have contested elections with.

    I deeply admire all those who participate in our political life and who put themselves before the people. We might differ on ideology or in approach but there was rarely animosity. This is the healthy competition of people and of ideas that is essential for a thriving democracy.

    Public service is a noble calling and public service has been my life’s work.

    As an elected representative, I have tried and tried again to vindicate the hopes and aspirations that were invested in me by our neighbours and by our community.

    Now it is time to stand aside, to pass on the baton and allow others to continue the race.

    The future is always unfolding. The unfolding future I see is one of difficulty that will be surmounted, of challenges that will be met and of a country that will achieve its potential. A new generation will define that potential. They will strike out towards new frontiers and they will set a new agenda. Such is life and such especially is political life.

    It is with great faith in our shared future, with true hope and with no regret that I have come to my decision tonight. I am deeply privileged to have had this life in elected politics and now at the end and from the bottom of my heart, I say thank you.

    Go raibh mhaith agaibh go léir.”

    All I shall add is that it should be clear that economics and politics are different languages.

    I wish David and all contributors a much happier 2011. Thank you all, for continuing to try.

    • It would bring a tear to a glass eye.

    • Deco

      except…he did not follow in the footsteps of Devalera, or Lemass…he followed in the footsteps of Haughey !!

      • He did because Both were Virgos and each wanted their Own Perfect World .Each saw their perfect shadows in one another and would go to great details to achieve that alas …only to be found out .

    • As for the main text, delusion of grandeur is a pathological state of mind, and in this case it is evident.

      But apart from that, this here:

      But the race is not over, the context is not lost, the future is still ours to win.

      This is even worse, as it clearly displays the total lack of knowledge let aside understanding of the situation, and from an analytical point of view, I would say, he requires high dosage of medicine for the rest of his life, and…. throw the keys away! With the knowledge of our days, no chance of healing!

      x x x x

      I wish David and all contributors a much happier 2011. Thank you all, for continuing to try.

      The only truthful and valid word in the text above. I wish the same!

      Best
      Georg

      • Happy New Year to ye all from me and Mrs Furry.
        Getting shot of Bertie is a great start. The election should deal with FF Blacksuits and a realignment with our biggest market next door should see us on the road to some form of recovery, provided we put a bit of clear water between us and Trichets Folly.

        And maybe this coming year, someone in power might finally listen to David McWilliams and Constantin Gurdgiev.

        Many thanks to ye all for another brilliant year of analysis and debate and I wish a particularly prosperous New Year to all those forced to leave these shores. Hopefully those of us left might be able to create the way back for ye some day.

        All the best,
        F

    • Bertie in the Sunday Independent of Jan 2:

      “I didn’t see the difficulties of the banks here. I wish that someone would have advised me of it, but no economist did. There’s a lot of them now who knew everything about everything, but unfortunately, none of them ever told me.”

      Mr Ahern said he felt sympathy for young people who had to emigrate.

      http://www.independent.ie/national-news/ahern-wont-run-for-presidency-2480893.html

  34. Good Article David and it was nice to see you using the lives of ordinary working people to illustrate the main points of your last two articles. Any high profile individual who uses public transport is leading by example and such actions speak far louder than words in my book. Matt Busby also used the bus by the way

    Anyone who has ever succesfully managed a project of any complexity will tell you that altitude is a position which you often need to visit if you are to stay on track and keep a sense of perspective. It is also the position from which we measure how much we have learned and how much our understanding has improved. Sadly our politicians have learned nothing and we still have ‘socialists’ commanding salaries approaching 500k

    Since Ireland fell over a cliff in September 2008 millions of words have been written and spoken about why we are in this position and now the government is constantly attacking the people. The Wikipedia definition of a Kleptocracy might be instructive – http://en.wikipedia.org/wiki/Kleptocracy

    In 2011 I expect to hear more about the shadow banking system and believe that what we know now is only the tip of the iceberg. I wish there were more Max Keisers in Ireland because the Irish do not seem to have the ability to call a spade a spade. Bah. The time for those with influence sitting on the fence is now up and they need to act now if we are to rid ourselves of this blood sucking monster that is sucking us dry and systematically destroying our society. However pigs will probably fly first

    Wishing yourself and all your readers a very Happy New Year.

  35. Deco

    The economic legacy of Bertie Ahern – by the economist who has been calling repeatedly for a cull on wasteful useless quangoes.

    http://www.independent.ie/national-news/bailout-is-his-legacy-says-snip-economist-2479591.html

  36. Who would ever guess The Ditherer could make such a large contribution to the quenching of Ireland’s flame?

    Good piece last April by Jody Corcoran here:

    http://bit.ly/9fqWjr

    http://www.breakingnews.ie/ireland/ahern-to-retire-from-politics-487471.html

    http://www.woodlandleague.org/

    [ link above provided by Deco last article ]

    “The Irish Government is moving closer to a huge sell-off of the public forests managed by Coillte (The Irish Forestry Board) to private investors. An area greater than 1 million acres, equivalent to two medium sized counties will be lost forever. This will include some of our most valuable native woodlands, wild places and some of the last refuges of our native flora and fauna.”

    Thread here how Coillte has instead of developing our forests on behalf of the Irish people, has instead been plundering and pillaging them on behalf of private investors.

    http://bit.ly/fefUIz

    “The Irish Government is moving closer to a huge sell-off of the public forests managed by Coillte (The Irish Forestry Board) to private investors. An area greater than 1 million acres, equivalent to two medium sized counties will be lost forever. This will include some of our most valuable native woodlands, wild places and some of the last refuges of our native flora and fauna.

    Interest has been expressed by Swiss finance company Helvetia Wealth – who own the International Forestry Fund (IFF) – chaired by Bertie Ahern, (ex-prime minister of Ireland) as well as The China Investment Corporation.”

    Speaking engagements must have earned him upwards of €.5 ml in 2009 over 16 ‘sickies’

    http://www.rte.ie/news/2010/0315/politics.html

    http://bit.ly/eFiCNd

    “I learnt a fundamental lesson from those who had gone before me and from those who worked along with me in this cumann, that politics at its best is patriotism. Politics is about love of country and politics is about concern for one’s community”

    What hypocritical shite is being revealed here by our friend of the Bush and Blair warmongers!

    Bertie defended Irish citizens (irony) and turned this country into a banjaxed economic corpse on life support with the EU/IMF.

    Patriotism for him and FF is a charter for banks and private financial interests to pillage and ransack this country to line the pockets of private interests and to con the people into the belief this is for the public good.

    Bertie’s patriotism is not about the protection of citizens from exploitation from private interests local and foreign. Its a bastardization of the term that, for example, includes socialisation of the banks, NAMA FF tent for developers and EU/IMF trough financial feeders.

    Founders of this state would puke in their graves at Bertie’s ‘patriotism’. Good riddance to him.

    Hopefully we may get real patriots at some stage in the future in Dáil Éireann before it totally disappears into the EU/IMF.

  37. Freemantle Doctor of Political Economics :

    We all stand at a point on the globe somewhere having arrived there to that point on a magic carpet that someone made and at a moment that the heavens saluted .At this moment the Irish Political Scene is liken to a ‘farm in south Kerry’.

    This Kerry heavens tell us something and we must try to understand it now.

    The Moon Wobble does not exit eventually until Jan 20th so much has yet to happen eventhough it is already impacted mostly before Christmas the amazon proverbial fly might yet arrive here too in the meantime.

    So…

    Haughy and Ahearn were both Virgos (~ Earth )and are seen through the eyes of the Wheat ( field plant )in the fields that once were seeds and through the benovalence of the Earth became a perfection namely a plant .Both are different and the same .

    Next chapter will be the arrival of the Farmer to reap the harvest with his hands…so who do we have …it will be a Taurus ( another Earth ) …Enda ….so is…Noonan ( he is the supporting actor to Enda’s endgame ) ….and we have Bono….

    Next Chapter will be the Donkey and Cart taking the harvest to the Barn ( Capricorn another earth sign) where it will be documented on record …..and this is where …Cowen holds the mantle .

    The chain of events shows how the Virgo used the farmer to ensure that the products arrived intact with the Barn Record keeper via the opposition ( useless bags of air) .

    The question I am asking now is what happens next .If more plants continued to be sown ( GNP ), this time the products will not be as good a quality cause Berti is gone and we have no more virgoes left that I know, so where do the Products ( national GNP) go to next ?

    Well allow me confirm the oracle .Remember it is the Donkey that brings the products to the barn and that Donkey is Bacon who is a shy aquarius ( air sign ) and stubborn and who holds the handles on NAMA under the tutelage of another air sign Lenihan ( gemini ) .So from what I can see within my scouted Irish eye we are all destitute ……..for ever.

  38. Alf

    Hi David, we have the means but we don’t have the will. It’s really a sad state of affairs. What your article makes clear is that the problem with Ireland is not the banks, it’s the government. Without wasting billions on bankrupt banks, the state could easily self-fund. The solvent banks would be lining up to do business in Ireland. Instead we have an economy being systematically destroyed with illegitimate debt. Banks are nothing special. A bank takes depositors money, gives them a tiny bit of interest and uses their money to lend out at a higher rate than they gave. It is not complicated, any fool could do that (and it looks like any fool tried!). The only skill is to make enough good loans to cover the bad. The Irish banks have shown they can’t even do this, so why do the Irish government insist on wasting tax payers monies to prop failures up? If they want a bank then start a new one. Move the deposits and collateral over to the new bank and hire new employees (preferably experienced ones!). Without the debt, the economy could recover, tax revenues would spike and the new bank should return a healthy profit. Unfortunately, we will have to suffer under arrogant wasteful politicians until the masses wake up to just how stupid they are.

  39. Dorothy Jones

    Happy New Year to you David; thank you for the articles, Outsiders, Kilkenomics et al. In a strange way it helped make 2010 bearable!

    The article in Village Magazine Issue 12 Dec-Jan entitled ‘Irregularities at the Regulator’ might provide an engaging end of year read for posters on this blog. It deals with the liquidity breach by UniCredit in the IFSC of 50%; the reaction by the Regulator, media, politicians, and the bank itself. It ends outlining links to the Vatican….

    As Georg R. Baumann sometimes says on this site: ‘You couldn’t make it up’!
    Best to all for 2011.

  40. paddythepig

    The ‘boot work index’ is worthy of deeper analysis.
    Is it a good thing to have taxi’s bringing home boot loads of goods for Irish shoppers?

    That depends on the contents of the boot. If the boot contains lots of goods designed and made in Ireland, it is good. If it contains SFA made in Ireland, and instead has stuff made in Germany, Japan, China, UK, US and so on, it is bad. Unfortunately, the boot work that the taximan was referring to was the latter variety, with imports outstripping exports during the Celtic Tiger. All fuelled by debt.

    One could envisage a similar index in Germany for example, where the taximan would be driving a car designed and made in Germany, carrying goods that on aggregate were made at home. That is the good variety of boot work, from an economical standpoint. The taximan doesn’t care of course, where the goods come from.

    Just before Christmas, I saw a headline on rte that our balance of payments had improved and was now in positive territory ; the fine print revealed that exports had shrunk in Q4, but that imports had shrunk even more. This correlates nicely with the shrinking of ‘boot work’. It says people are cutting back on extravagances like stuffing a taxi with consumer goods, and are finding alternative ways to get the shopping home. Also, they are cutting out the consumer items they don’t need, most of which are imported.

    The bottom line is. Consumerism is not necessarily a good thing. We should not aspire to a return to Celtic Tiger style ‘boot work’. We should aspire instead to make the goods that will fill the boots of taxis in countries all over the globe.

  41. Harper66

    As 2010 draws to a close in this house as in many others people are occupying themselves waiting for midnight to arrive in order to celebrate the arrival of a new year. Perhaps not so much to welcome a new year but to turn their backs on 2010. A final act of defiance? The only act of defiance to the disastrous chain of events that was 2010.

    People are not just waiting for midnight. They are also waiting for someone to lead them out of this mess Ireland now finds itself in. They are driving their buses. They are driving their taxis and they are waiting for some spark to “kick this thing off”.

    They are waiting for some act or someone to say you are not crazy – what is going on is wrong. You have been wronged and you should endure this no more.
    But it is not coming.

    For me tonight the penny dropped. It will not come from here. I realise by and large the majority of people posting here have not really been affected by the brutality that has been dished out by Fianna Fail and the Greens. Those who have been affected are too afraid to act or speak or worse still they are unaware and just swallowing all this down.

    2008 — 2010 saw the government take care of themselves and their buddies. We see this in their insane policies in regard to the banks .I have little doubt that 2011 will see the debt of the average person come into the firing line and there will be no mercy, the banks will be taken off their leash and the little people of Ireland will seriously suffer. Unless something is done.

    I read posts by people complaining about public service workers and it reminds me of slaves allowed access to the “big house” bickering amongst themselves. Another poster advises us to appease the plebs by allowing them to wash down the austerity by public displays of “justice”. The world economy must not suffer!I am equally offended and angered.

    I am waiting.

    My thanks to David for his articles. Continued success and happiness to one and all.

  42. Tim

    Seven and Irishminx, It seems to me that you are trying to say similar things in your posts to what I have been saying here for years. I salute you.

    However, there are some contributers here that will never address your points properly.

    Make your point, by all means, but do not expect that it will be dealt with by those at whom it is most properly directed. What a pity.

    Please keep doing what you do and continue, justifiably, to be proud of the contribution you make in your job. Educate others in your way of thinking and nevere, ever, become deflated by the “nay-sayers”; they will never help, or do what you do; there is no “profit” in it, for them.

    Happy New Year to all.

  43. ALL:

    A little, hopefully peaceful, tune that I made a few days ago. It is somewhat epic.

    Imagine you walk on a large ice field, a glacier, the Himalaya, Mount Everest…. Your very own quest for Shangri La…..

    Forgot to master the version for loudness, so you might want to turn up your speakers a bit more.

    http://dl.dropbox.com/u/4914840/shangrila.mp3

    Best
    Georg

    • BrianC

      What Hz was that?

      Personally a walk on ice etc would be a little cold and would prefer one in a nice warm meadow with a soothing river with music tuned to 528Hz

  44. Insiders and Oursiders 2011

    This year the above will have a new meaning .Those outside ( depositors) the bank that have their money inside the bank cannot get inside to it ( it’s frozen ) and those inside the bank ( New Stakeholders – taxpayers ) cannot get outside ( sell the nationalised stakeholding )and are bonded slaves indefinately.

    This new circus act can also be called a Junkie and a Monkey business.

  45. Incident

    The diagnosis, prognosis and cure for our problems lies in David’s article “Forgive the ‘legacy debts’ and save the economy” of November 8, 2010. I have copied it in its entirety below. In my opinion it should become a mantra for our way of viewing and solving our current mess.

    Quote-

    “Let’s say you own a company. It’s a retail company which you set up in 1999. It traded well in the boom, but to grow quickly, you took on debts commensurate with your turnover. Every time that you wanted to increase turnover, you had to rent a new outlet and invest.

    This took money — and, while you tried to reinvest cashflow, you needed to go to the banks because the costs of your premises and rents were so huge.

    Your turnover hit €2 million in early 2006.You expanded by opening two new outlets to capitalise on the demand and you incurred more debt — but it was manageable because turnover was rising. You employed more and more people.

    Trade was good, but your costs were high and margins were still tight.

    You convinced yourself that, over time, you would get the systems right and the cost to income ratio would move in your favour.

    After all, you were still learning, putting in the hours, but you were building something and you believed in the future. By early 2008, you had six outlets, a turnover of €3 million and debts proportionate to that figure.

    You could service your debts out of your cashflow. Then, crash! People stopped buying your wares.

    Today, your turnover has halved. You own a company, which has a turnover of €1.5 million, but debts appropriate to a company with turnover of €3 million. What do you do?

    Do you borrow more to try to tide you over, so that you incur more debt to pay for already too much debt? Do you close down and sell everything to pay off the debt? Do you slim down and keep two of your six shops, which may trade through the recession? But even if two shops are trading at full tilt, they won’t generate the cash to pay the debts which were incurred for an operation of six shops and a turnover of €3 million.

    You go to the bank and explain that there is no cash, and ask the bank to consider some negotiation on the debt.

    The bank refuses and claims that it will now go after your other assets.

    But you don’t have any. What about your family house? Didn’t you put that up as collateral? Well, yes, but it too has fallen by 50 per cent in value since the peak.

    You leave the bank, despondent. Remember you still have three outlets that are trading well, employing people, generating Vat and income tax and corporation tax revenue for the state. You are also taking a modest wage out of it.

    The suppliers with whom you have done business are also depending on you, as are their suppliers, and on and on down the chain.

    If you close now, the ramifications will be felt far more widely than just your firm. What are your options?

    Either you can enter debt renegotiations with the banks and your other creditors where they will get something — not everything, but you all stay afloat — or receivership, where you fold and your creditors get far less in the subsequent fire sale.

    The banks refuse to budge, and you don’t want to admit to some of your suppliers that you can’t pay your bill because of the shame of not being able to meet your obligations.

    So you try to trade for a bit more, but the figures don’t add up.

    Reluctantly, you go into receivership. The receiver tells the creditors to line up in an orderly queue to see what can be salvaged from the business. The banks and the other creditors get much less than they would if you had all done a deal on ‘debt forgiveness’.

    The business is closed, the jobs and tax receipts are lost, and all because the ‘legacy debts’ of the boom strangled a good but much slimmed-down business in the bust.

    This is a typical example of what is happening all over Ireland now. More significantly, it is also the reason why the state cannot convince any investor that the country is solvent.

    The people who use silly expressions such as ‘Ireland Inc’ do not seem to realise that Ireland Inc is only the aggregation of us, the Irish people. If our businesses are going under because of the legacy debts of the boom, our country will also default because of the aggregation of the legacy debts.

    Debt forgiveness is essential if the country is to recover. This can be called default, renegotiation or repudiation. Call it what you like but, without wholesale reduction of the legacy debts of the last ten years, the Irish economy will become mired by the politics of retribution and recrimination.

    True capitalism is based on the idea of the second chance. All of us who have ever tried something, ever taken a risk, have all failed at some stage.

    In my own case, I have written books that sold over a hundred thousand copies; I have also written books that sold poorly. I have presented TV and radio programmes that were successes, and I have been fired from TV and radio stations.

    I have invested in companies which have returned multiples of the original investment, but I have also had to write off entire investments because companies went belly-up.

    This week in Kilkenny, with another investor/partner, I have put my own money into Ireland’s first economics festival http://www.kilkenomics.com. If it works, we will succeed; if it fails, we lose.

    That’s the nature of capitalism and enterprise.

    Failure is part of the equation and there is no shame in failing — the shame is in not trying.

    The ability to recover after a defeat, to dust yourself down and to get back up, is based on being ‘allowed’ to do so. If we allow a person to get back up, the only issue then is personal character and whether they want to have a go again.

    I talked recently to a receiver who told me that, in his 30 years in business, he has never been appointed to a receivership twice with the same individual.

    He told me that, when people make a mistake, such as borrowing too much in the first venture, they learn and don’t make the same mistake again.

    He said that most entrepreneurs get back up.

    But they are cleverer for the experience of failure.

    We all know that failure and success are first cousins.

    Therefore, the idea that we can run a healthy, capitalist country without debt forgiveness is ludicrous.

    Debt forgiveness is the beginning of the recovery. It will have to start at the firm level and the individual level.

    Ultimately, the state will have to renegotiate all its debts.

    We will not have a successful fiscal adjustment unless it is accompanied by a national debt amnesty.

    This is the way the world works.

    The question is not if, but when.

    The nature of default is what is important. If we are seen to have tried to pay, but failed valiantly and honestly, then we will get a second chance.

    New money and new creditors will emerge; they always do.

    The world is full of money. The reason it’s not coming here is that the markets expect a default or some sort of nasty financial event.

    Why not bring it on, face the reality, and move on?

    That’s what a capitalist economy, an entrepreneurial society is all about. Isn’t that what we are supposed to be?”

    -End quote

  46. Happy New Year!

    Thanks again DmcW for the chart analogy. Simple chart like that goes such a long way to rebut false allegations made by imFFers against critics of its financial and economic madness.

    The more charts like this the better.

    Anyone with even the simplest grasp of finance and economics able to understand your chart will be described as a radical left wing loon! Lol. Such criticism comes from the IMF football club:)

    You can see the inevitable outcome of increased borrowing and increased saving will inevitably lead to debasing the capital upon which the economy is built. This will stunt the growth of our economy and makes default inevitable.

    The new government will have to renegotiate the EU/IMF bailout if we are to remain in the EMU.

    We must burn the senior bondholders of Anglo on the basis of the argument presented by you above and Wolfgang Schauble below, see his last paragraph.

    We either renegotiate a sensible deal now based on ability to pay, or we default following even more dire and serious damage to our economy over the next few years.

    Of course we also have the option of opting out of the EMU.

    http://bit.ly/emC0Ct

    Conquering Europe’s debt mountain
    By WOLFGANG SCHAUBLE, German Finance Minister.

    “Welfare benefits account for more than half of Germany’s federal spending this year. So there is little choice but to cut welfare spending, at least moderately. But this sort of fiscal consolidation can be achieved only if a majority perceives it as being socially equitable. Recipients of social and corporate welfare alike, as well as civil servants, must share the sacrifice.

    Thus, German corporations will have to contribute to fiscal consolidation through reductions in subsidies and additional taxes on major energy companies, airlines and financial institutions. Similarly, civil servants must forego promised pay increases, and the government is looking for annual savings in the federal armed forces of up to three billion euros through structural reforms.

    Germany’s binding fiscal rules set a positive example for other eurozone countries. But all eurozone governments need to demonstrate their own commitment to fiscal consolidation in order to restore the confidence of markets and of their own citizens.

    Recent studies show that once a government’s debt burden reaches a threshold perceived to be unsustainable, more debt will only stunt, not stimulate, economic growth.”

    The new government has to act quickly to remedy this mess.

    • @Incident, problem is even though Merkel and Schauble
      and others understand this concept of unsustainable debt, the message is too unpalatable for our gombeens who prefer to grab more debt to gorge on, rather than bite the bullet and act in the best interest of citizens.

    • The charts are very good because they bring a sense of altitude to the debate :-) A good picture can say more than thousands of words and I would like to see more charts in future if David has the time and resources to create them. Cartoons are also a great way to get a point across succinctly if there are any weekend artists among the readership

      Regarding rates of welfare there was a report on Russia Today about Estonia’s entering the Euro. The Estonian Finance Minister was complaining about the fact that they will be required to provide 800 million to the pot while the Irish social welfare rate of around 800 Euros per month is more than welfare recipients in Estonia receive in a year

      An unemployed woman was telling reporters how it is impossible to make ends meet on Estonian benefit rates. She made the point that she didn’t understand why the Irish were moaning about their lot compared to life in Estonia and her resentment towards the Irish was palpable

      I would say that she has a point but is she suggesting that the rest of Europe become peasants through austerity just to make the Estonians feel better?

      • irishminx

        is this lady from Estonia aware of the cost of living in Ireland?

        I doubt it!

        A person’s perception is their reality!

  47. Malcolm McClure

    cbweb: I was talking to a German a few days ago and asked if German people wanted the Mark back, as they seem to be contributing disproportionately to the support of the fringe Euro countries.
    He said that there was no way that they wanted to leave the Euro, because, if they refloated to the mark, it would quickly become so strong that no other country would be able to afford to buy German cars, etc.
    I guess the best way to show our gratitude for their bailout of Ireland is to continue buying german cars. Maybe that’s why government ministers are all swanning around in their Mercs!
    Happy new Year to all.

    • @malcolm Interesting, I thought there was tremendous political pressure on politicians to return to the deutschmark, that everybody’s mattress had old marks ready to pull out, so sick are they of our mess, that polls show a significant majority in favour of a return to the mark.

      I suppose we should be grateful (irony) to them for giving us the money to pay for continuing the ministerial pension/expenses binge, pay their senior bondholders, Croke Park, their banks’ credit binge and Mercs.

      But German banks have significant exposure to the problems in the PIGS plus their debt to GDP has been rising significantly in recent years.

      There’s a debt blowout threatening the euro itself.

      Happy New Decade

  48. Gege Le Beau

    I got the bus from Hueston station on Dec 27th heading to the airport to catch a flight to Poland, interestingly, the bus passed down the quays, past the SIPTU building, the IFSC, the empty Anglo building, (which reminded me of a scene from Full Metal Jacket), quite a triangle, two Americans behind me commented – this isn’t a very nice.

    Poland, a country which has been through a huge amount, didn’t engage in a mad banking/property ponzi scheme, growth was 3% in 2010, it is estimated to be 4.3% in 2011. Irish people are arriving here (some irony) as indicated by the recent article in the Irish Times, Dec 24th, (a GAA cumann has been established in Warsaw for the first time).

    I was in an Irish pub last night with 8 Poles, enjoying the Guinness, the music, pictures of Irish doors, famous writers and castles occupied the place, there was talk of the great crisis that had befallen the countrz, however, despite what was being said, I thought we still have so much to offer, I think culturally we have tremendous strength, it would be good to get back to doing what we were good at, a welcoming, open-minded, friendly country with true human values, amidst the madness and fallout, we have a huge chance to get it right.

    Best to all in 2011.

  49. Deco

    I would like to wish happiness, prosperity, and survival to all of you in the New Year.

    And also I wish progress to DavidMcW – the man who brought everybody to this forum, and who helped many escape the greatest “hard sells” of the past decade !!

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