August 17, 2011

A future where children are poorer than parents

Posted in Irish Economy · 230 comments ·

Every time I walk past a tiny house on Railway Road in Dalkey, it amazes me that my immigrant grandmother gave birth to six children there in the 1920s and 1930s. As is typical for many Irish people, our family history is one of upward social mobility in a generation or two.

My dad left school to go to work before doing the Leaving Cert; yet I got the opportunity to go to fourth-level education. This is social progress and a similar experience is shared by hundreds of thousands of us as free education, rising incomes and greater opportunities have allowed recent generations of Irish people to become more prosperous than their fathers or grandfathers ever expected.

When I look at my own children, I wonder if such upward social mobility is coming to a halt. Is the Irish middle-class about to disappear? This is a very real question. Will my children and their contemporaries be the first generation of Irish children in over 80 years to be poorer than their parents? And if so, should we do something about it?

This week there were massive protests in Israel which, to my mind, were of much more significance for middle-Ireland than the riots in London or the demonstrations in Syria. The Israeli middle-classes have had enough and are taking to the streets because they feel betrayed. Their grievances are easily recognised by the average Irish voter.

Most Western societies are based on trust; a trust which is anchored on the premise of social advancement. Politicians betray that trust at their peril. The idea that tomorrow will be better than today is extremely powerful and is the stuff that keeps societies reasonably peaceful. If there is a sense that we all have some stake and some chance, it allows us to go on.

This belief in tomorrow keeps parents pushing their children as best they can, looking out for them, making sure that they stay on the straight and narrow as much as possible. The notion of being reasonably well-behaved today because this “good” behaviour will be “rewarded” by even better economic opportunities tomorrow is the very fundament of social progress.

The rules are obeyed because there is a pay-off at the far side. This is the unwritten rule of our social contract with each other and with the State to which we are allied. We are citizens and in return for being good citizens, those we love will be protected by the State and our children will be given a chance.

One of the great unwritten stories of the boom, which is being forgotten now, is that it was a jobs boom. According to the EU, Ireland did not become more unequal in the boom, but more equal. The gini-coefficient — which measures the income of the poor as a ratio of the income of the rich — pointed to the fact that Ireland was actually more equal than the EU average.

But this has stopped, and worse, it has gone into reverse because the middle-class’s balance sheet is broken. On one side they have houses, which are falling in value, and on the other side they have debts, which are rising in cost.

As this “wealth” evaporates and turns into debt there is no way out. The only prospect for economic improvement is that income increases. But incomes are being squeezed by taxes and — in the areas where Ireland trades internationally — by intense competition, in particular from Asia. So tomorrow doesn’t look better than today, in fact, yesterday begins to look better than tomorrow and when that happens, politics buckles.

What happens when that social conveyor belt to prosperity and a better life stops? The middle-class begins to shrink. The gap between rich and poor increases so the middle-class gets squeezed to pay taxes for the poor, but at the same time they see their chance of social advancement scuppered by falling incomes, unemployment, negative equity and rising childcare and education costs.

The psychological costs of this are everywhere. How many Irish mothers today will be looking across the kitchen table at a despairing unemployed 22-year-old son or daughter, wondering how this happened?

And this is where an economic response is necessary. It’s not good enough to sit tight, hope that everything will pass and declare business as usual. The State has to react and change economic tack.

After all, when you boil economics down, it should be about making sure that demand in the economy is sufficiently strong to keep incomes reasonably secure and to keep unemployment as low as possible. It should be an instrument to give people hope and belief.

It should be about creating a system of trade where people can have a chance to fulfil their lives. If that system breaks it should be fixed. If a society divides whereby those at the top have too much and those at the bottom expect those in the middle to pay for them indefinitely, the middle will revolt.

Ultimately, if the middle decides that after all their good behaviour they have been led up nothing more than a social cul de sac, they will question the point of this system.

One million are expected to protest in Tel Aviv and other cities on behalf of the squeezed middle-class in Israel. These protests are fascinating because they are totally different from the mass protests in the other countries of the region. Israelis, unlike Syrians or Egyptians, live in a prosperous democracy with a well-functioning welfare state, like most Europeans. Their problems and their protests are much closer to Cork than Cairo.

In Israel, ordinary people with jobs are protesting that they simply can’t live on their wages. They are complaining about a country where the top is extremely rich and the middle, traditionally well-educated and secure, simply can’t live on their after-tax wages. Does this sound familiar?

Think about the prospects for the average family in Ireland for the next few years. We know that taxes will rise and rise to pay for a national debt. We know that demand has collapsed and that the banks are ceasing to function as providers of credit. We also know that the exchange rate is vastly overvalued — if you doubt this go shopping with sterling in Newry. We also know that interest rates are rising not falling and we know we have a Government that is intent on doing nothing radical to reverse what is a truly unprecedented challenge.

This combination of economic difficulties and political inaction means that the middle-classes will shrink in Ireland and that the conveyor belt which carried many thousands on this journey towards a better future comes to a grinding halt.

That’s when the problems really start.

  1. John Q. Public

    We will have to send a lot of immigrants home, especially those on the dole.

    • lff12

      Great idea. Just wait until the rest of the world reciprocates and sends 20 million unwanted Irish back.

      You reap what you sow.

      • “Just wait until the rest of the world reciprocates and sends 20 million unwanted Irish back.” Iff12

        actually most of the irish overseas work. Most of our immigrants worked then when it all dried up they realised what a soft touch and gravyh train this country is – of course this is unsustainable. Now quite a lot continue to work and claim the social – not an urban myth BTW, oh and get their rent paid and their childrens allowance for kids living in Warsaw etcetc. Yes it does happen – will it stop – I doubt cos no government ever listens or acts on what the common man has to say.

        Great article david – very true observations.

      • John Q. Public

        foreign born people still cost us hundreds of millions of euro per year. we are reaping there alright.

  2. paddyjones

    I have no sympathy for people who lived beyond their means for example plumbers, electrians and builders spent wildly and took on too much debt who are now penniless.
    In fact the entire country lived beyond their means, this enconomy boomed because of credit inflows from overseas. Still today the country is spending 18 billion more than it takes in.
    By next summer we will have to put into our constitution a balanced budget amendment. Italy has already done this and the meeting between the French and Germans yesterday backs this up.
    Just imagine over the next short while we will have to cut another 18 billion from spending , thats the entire social welfare budget.
    What David describes is what happened over the last few years , from now on it gets worse not better.
    Austerity is here get used to it we havent seen anything yet , the days of borrowing are over for Ireland we must balance our budget, yes another 18 billion in cuts and tax rises are coming.
    If the Italians can do it we can.

    • cmont

      The lies from our government continue. We are being told that 18Billion will have to be cut and or raised. However, this is only the half of it.
      What about the interest payments on the national debt? In a year or so, our national debt will be about 200Billion. Interest on this at 5% will be 10Billion a year.
      So, if we want to stop borrowing we also need to cut the interest payments from our defecit too. Add the 10B to the 18B and we get 28Billion. Oh, and if we ever hope to reduce the national debt we will have to beging to repay the national debt.
      Let’s say we want to pay back the national debt over the next 20 years, like a mortgage. Well that’s only 10Billion a year. Add that onto the 28Billion and we now have a figure of 38Billion.
      So, assuming we need to cut 38Billion from our annual operating costs where does that leave us?
      Well, current national spending is somewhere around 51Billion.
      If we deduct 38Billion from our current spend of 51Billion, that leaves us an amount of 13Billion to spend annually.
      Doing a bit of calculation (don’t mention the maths grades these days), we now only have about 25% of current spending to actually pay for our services.
      Being that there are 350,000 state employees we need to cut this number to say, 90,000 and depositing the other 260,000 onto the dole. That should round up the dole qeues nicely to over 700,000 , give or take.
      Now, what about all of our unfunded liabilities?
      Did you think that you were getting away without mentioning that?
      We have promised tens of thousands of state workers, new to be pensioners, patients, children and other groups, billions in payments over the next decade and beyond. And no, growth will not pay for all of those liabilities.
      We have developed a society that voted it’s self every conceiveable gratitude imaginable. We have burdened our grand children and their grand children with our desire for nice kitchens, plasma TV’s and an apartment in the sun. The game of debt is upon us and it will turn us into slaves.
      The banks of the world are contracting the money supply available to the little people. The banks will hoover up everything through repossetions including state assets and we will be left as tax slaves for the world banks.
      At the same time that the banks are creating a recession for the little person, they are printing massive amounts of money to bail out each other. This printing is driving inflation around the globe and shortly will lead to large increases in the cost of living for the little people around the globe. It’s already happening.
      Our national debt can never be repaid.
      The only option we have is to default in totality. Pay back not a cent to anyone and reissue the Irish Punt.

      • paddyjones

        Actually its much worse than that , our national debt will be 250 billion by 2013 thats when the bailout money runs out and then the shit will really hits the fan. FG/LAB know this but will try to kick the can down the road for as long as possible. Remember these guys are in it for themselves and will only be held to account when the money runs out, I reckon that will be December 2013.
        Long before that Merkel and Sarkcosy will be voted out of office only to be replaced by governments who are not so generous. Who knows the Euro may fail between now and then.
        Default is not an option , it will be more of a case that we simply will not have the money to pay back debts rather than us anouncing a default.
        And it gets worse the 250 billion is due for repayment between now and 2017 so we havent got 10 years to pay back.
        We are locked out of the bond markets and will never be able to borrow again we are just the same as Greece or Portugal , lets not kid ourselves.
        Just wait and see, the next budget will be alot more than 3.6 billion of cuts and taxes.

      • Deco

        We have developed a society that voted it’s self every conceiveable gratitude imaginable.

        Correct. But actually we voted for politicians who chose an undemocratic way to run an economy. And the insiders in the process themselves dreamed up schemes that were defined (by themselves) as “ambitious” and “something to be proud of”

        We even gave it a name.

        Social Partnership.

        In future, survival will come about as a result of more modest proposals. Otherwise, it will not come at all.

    • Harper66

      Nice bit of sabre rattling.

      1 – “In fact the entire country lived beyond their means..” Not true, despite your insistency on repeating it after every article posted. So please post one piece of data or evidence that EVERYONE partied.

      2 – Ireland was not bankrupted by “partying”. Taking on private banking debts bankrupted Ireland. This does not excuse a state living beyond its means however it is a fact.

      3 – Your comparison of Italy and Ireland is nonsense likewise is the delight you display at the thought of France and Germany dictating to us changes to our constitution.

      • blackcase

        Harper66, what you are doing here is blocking out the Herd of Elephants in the room with a few emotional deflections. This is what repeatedly happens on RTE where the public is distracted with emotional words and miss the point. If you have a problem with ANY of the figures, you could say that and enlighten people. If you do not, you could at least affirm. And recognise the catastrophe that is on the way. The quicker the normal people (i.e. non-politicians and favoured classes like Judges, Senior civil servants) understand the situation, the quicker the required changes happen. The politicians are delighted with people like you who deflect reality and keep the people passive. The Politicians know their first job is keeping people passive. Then they keep getting paid. And sadly that is their first priority (and I, like paddyjones I suspect, get no pleasure in saying that).

      • paddythepig

        Last week you were telling us Italy was suffering because of absorbing bank debt just like us, and this week you’re telling us Italy and Ireland are not comparable cases.

        • Harper66

          I take it your not going to answer my question?

        • Harper66

          Italy basked in zero growth for years and yet was able to build up a deficit of over a 1 trillion. This did not happen overnight and in fact continued apace. The Italian crisis was caused by a lack of confidence in the euro due to insolvent banks and inept and self serving EU banking policy. This was the tipping point for Italy. This is true across all euro zone countries hence Italy last week France this week…
          The systemic problem within the euro zone is of course the fact that a monetary union requires fiscal union to function but there is no such fiscal union. So while each country has aspects that they have in common the euro zone is essentially a mismatch. An important point to stress is that Irelands national debt was manageable it was not until” the cheapest bail out in the world “ when we took on private banking debt that we found ourselves bankrupt and locked out of the bond markets.
          Any expectation of a neat comparison is naive.If you like I could but it in terms easier to understand once upon a time there was an evil plumber hell bent on destroying the Euro…..

          • paddythepig

            If EU banking policy and lack of confidence in the Euro caused the Italian debt crisis, how come this policy and lack of confidence didn’t affect German or Dutch debt to the same degree?

          • Harper66


            “The latest figures have shown that even the German economy is now experiencing almost zero growth, following other countries, such as France, that already reported sobering figures last week. A Eurostat flash estimate released today gave evidence for the generally poor growth situation in the EU-27 and the eurozone: 0.2% in both cases. So instead of solving the debt crisis, we have generated another crisis: a growth crisis.”


            “EU leaders’ attempts to defend the status quo only reinforce a vicious circle of enfeeblement.”

            Please respect’s ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email to buy additional rights or use this link to reference the article –

            From 2009 at the very begining of this madness

            “The Netherlands has seen its debt burden increase by 87 billion euros (114.3 billion U.S. dollars) because of the financial crisis, especially the billions of euros of government support for the banking sector, Dutch paper De Telegraaf reported on Thursday.”


            “CPB says Netherlands is in deep recession

            News item | 17-03-2009

            The Dutch economy is expected to contract by 3.5% in 2009 and by 0.25% in 2010. The budget surplus will turn into a deficit of 2.8% of GDP in 2009, growing to 5.6% in 2010.”


            “Opening parliament, Queen Beatrix warned the country faced an unsustainable deficit.

            “As a consequence of falling tax income and stimulus measures, government deficits have strongly increased,” she said.”


            Just in case you have not figured it out yet – those Irish “austerity” euros you take so much pride in have gone to part fill the gaping holes German and French banks.

          • Harper66

            It appears my reply contained too many links and was caught in spam trap. here is a very condensed version-

            “The latest figures have shown that even the German economy is now experiencing almost zero growth, following other countries, such as France, that already reported sobering figures last week. A Eurostat flash estimate released today gave evidence for the generally poor growth situation in the EU-27 and the eurozone: 0.2% in both cases. So instead of solving the debt crisis, we have generated another crisis: a growth crisis.”


            From 2009 at the very begining of this madness

            “Opening parliament, Queen Beatrix warned the country faced an unsustainable deficit.
            “As a consequence of falling tax income and stimulus measures, government deficits have strongly increased,” she said.”

            Just in case you have not figured it out yet — those Irish “austerity” euros you take so much pride in have gone to part fill the gaping holes German and French banks.

          • paddythepig

            The links you provide don’t answer my question. Your answer makes no sense to me. How come Dutch yields weren’t affected like Italian yields if they were both subject to the same conditions – both contributers to the bailout fund, both members of the eurozone. What is the difference between holland and Italy in this regard?

          • Harper66

            I see you’ve dropped Germany and are now just clinging on to Holland. :)

          • paddythepig

            Just trying to simplify the question Harper66. Why don’t you answer the question?

          • Harper66

            No, you didn’t simplify the question you changed the question and you changed the question because your use of Germany was blowing a hole in your argument.

          • paddythepig

            Stop avoiding the issue. If it makes you feel better, I’ll re-insert Germany into the question.

            Come on now. You’re a great one for telling us about ‘facts’.

            Back up your ‘facts’. Answer my simple question please.

          • Harper66

            Reality is not as neat and tidy as you would wish it.The euro zone defies strict comparisons like you the one you are trying to make. It is a case of oranges and lemons; while there are things they have in common they are also massive discrepancies between them. Where you have monetary union without fiscal union measures taken to remedy a situation in one area will generate problems in another area.
            The credit binge is over. European banks have taken a bath and are insolvent. Capitalism should have seen these banks fail. They did not, instead Europe took private debt and made it sovereign. This was a deplorable course of action to take.
            By not addressing the problem of the debt and containing it, it is becoming like cancer. Take Ireland , for example. While running a deficit, Ireland was in a situation where it could have managed its way out of it difficulties until the bank debt was heaped upon us and we found ourselves bankrupted.
            Things have grown exponentially worse and now confidence in European banks and, by extension, in the euro is nil. The peripheral countries are now zombie like, their economies are crippled by the effects of mounting massive private banking debt onto already indebted exchequers.
            Now the cross hairs are on Germany. Pressure is being mounted to create Euro bonds, France is happy for this situation because they are bolloixed too, so it is falling to Germany to shoulder the Peripheral countries and this is not possible – even for Germany. They are now under pressure and hence are rubbish example of a country being immune to the effects of EU banking policy.
            Except you see certain countries while basking in the perceived and actual proximity to Germany are beginning to beat a hasty retreat from banking bail outs. Finland, Austria and Holland are looking for collateral from Greece to continue to take any further part in the bailout fund. In other words they are refusing to expose their economies to anymore private banking debt.
            The links I gave earlier show at the beginning of all this, Holland was very negatively affected by the taking on bank debts, clearly now Holland realises it would be subsumed in time and so has chosen the course of action it has.

            It seems the clever money is now betting against the wonderful austerity.

        • Dorothy Jones

          @paddythepig, the DAX tumble and the fall of shares here in holiday time seem to be causing few concerns outside of the German press; but is not this the headline? German people are prudent but the banks here were not.

    • quote paddyjones “for example plumbers, electrians and builders spent wildly ” of course no teachers (overpaid in this state, lawyerss drs or dentists etc overstretched themselves with holiday homes here and abroad or bought brand new cars they didn’t need – it was those horrid working class plumbers electricians and builders who got us the mess!

    • gizzy

      Paddy I hope it always stays fine for you.

    • dwalsh

      @ paddyjones

      We’re in the middle of a global financial meltdown due to unregulated speculation with capital leveraged on anything the financial sector could get its tentacles into — pension funds, mortgages, savings etc; as well as completely virtual capital in the form of derivatives estimated as at least $750 Trillion and possibly as much as $1.5 Quadrillion…and paddyjones is blaming the plumber!

    • zoinks

      Hi paddyjones, i look forward to my next round of tax increases or as a (greedy)public servant a pay cut, either way i wont be able to pay for my house anymore, i am more or less living on same money a person on the dole is living on with no savings and big depths. Stupid thing is i had loads of savings 3 years ago, but i had the hard luck of getting married and having a child and buying a house.

      I’ve meet people like yourself in work guffawing to themselves that they were very clever being born 10 yrs younger or older then myself, it is a case of musical chairs, you were lucky. My whole generation is ruined by this whole thing and they are in therapy or suffer from depression. But when the cuts come, the mortgage goes. and you my friend will be left with the bill, enjoy your poison chalice

      • Eireannach


        I’m 37 and I rent. I never thought it’s was ‘dead money’.

        I always felt more educated than those who bought, because I understood the difference between an asset and a liability.

        Understanding that difference undeerpinned my decision to continue renting.

        As for what I think of my generation of 30somethings who bought houses at 5-8 times the combined salaries of the couple…Do NOT get me started.

        • Deco

          Actually, the best approach is this.

          When you follow a job, and rent in the locality – essentially – you are trying to make a profit for yourself.

          Now this is a dirty concept as far as the property industry, the state, the banks and the property advertisement obsessed media are concerned. Essentially you are thinking about yourself. You have it, and they don’t. And even more worryingly, you have already go into the habit of making up your own mind to look after yourself. That is highly dangerous, and incendiary in a country where the state bails out the property sector.

        • stiofanc02

          I will bet you rent the “bedsit” in your Mothers house. You are so smug and superior. What a creeep you are. 37? Loser.

        • zoinks

          Hi Eireannach

          I’m 37 also, i bought my house when house prices were falling, they had fallen 40% when i bought, thought i was very clever, very educated you may say, having a child can have a strange effect on people, they want to set up a home.

  3. Irelands current Economic condition is dire, however we are but a small vessel in a big ocean and the advantage of that for us is that a percentile increase in exports/market share into and of different global industries can yield disproportionately higher employment than the same percentile gains of market share will do for larger countries, although the world economy is in turmoil the world economy has never been more accesible to business in Ireland. There are opportunities out there for Irish business and what would be a tiny increase in global market share would generate the employment needed to make a profound improvement to the Irish Economy. Obviously we lack the political leadership to create the optimum environment for such results but Irish people in pursuing their own ambitions and targeting international customers can do it despite our incomepetent governance

  4. Good article David

    It is not new for children to be worse off than their parents as anyone growing up in any of the post industrial areas of Thatchers Britain will tell you. Thatcher as you know was a Friedmanite and admirer of the Pinochet Junta in Chile where in 1973 we saw the ‘social experiment’ that was carried out by Pinochet’s death squads to enforce Friedman’s evil vision of a free market utopia and it all failed miserably

    Today we are seeing the global results of Chicago School economic dogma and yet you sound surprised that there is inaction on the part of the politicians. You know all this yourself and so does the Irish media but it is rarely gets mentioned lest someone in Washington gets upset and takes offence. This is weakness personified and it is stomach churning and sickening

    Please get it into your head that the powers that be do not give a shit about middle class Ireland. That is the way the world works and will continue to work until the people of Israel, the people of Ireland and the people of just about every western democracy waken up and realise that we are at war

    We should have 1 million marching in Dublin and we should be having mortgage strikes etc because this is the only language that these bastards understand. Good luck David and keep up the great articles you have been turning out lately. I wish you would go even further and really tell us what you think

    • I Agree there is no shortage of complaining in Ireland and it has had a minimal effect on any of the crucial decisions , however there is no million on the streets and the policy at play was almost completely ratified in the last election. It seems that most people of the Irish State on an individual basis reflect the state as a sovereign rather than experience the inevitable turmoil that a fast return to fiscal independence would require prefer to sell out the next few generations to keep the incomes currently received being paid and to keep the creditors they owe money too in a bailout induced more benign state. People have tried to organise such marchs clearly the majority of Irish people don’t want to be a part of it

      • I Agree there is no shortage of complaining in Ireland and it has had a minimal effect on any of the crucial decisions , however there is no million on the streets and the policy at play was almost completely ratified in the last election. It seems that most people of the Irish State on an individual basis reflect the state as a sovereign, that is rather than experience the inevitable turmoil that a fast return to fiscal independence would require, they prefer to accept the bailout and sell out the next few generations so as to keep the incomes currently received being paid and to keep the creditors they owe money to, in a bailout induced benign state. People have tried to organise such marchs but clearly the majority of Irish people don’t want to be a part of it.

    • CitizenWhy

      Yes, the rich and their bankers have declare class war without using the term. Yet any thinker who calls what they do a class war is labelled a hater.

      We are in a historic period where a new global laissez-faire capitalist aristocracy and their faithful political retainers rule. They care nothing for any particular country, only for members of their own class. Without competition, free market capitalism and democracy have been replaced a globe hopping oligarchy beyond the laws or social reforms of any nation.

      • Gege Le Beau

        @CitizenWhy – The rich today are rich beyond all imagaination, certainly surpass anything historically even the Kings of France with their opulent palaces and gardens, and look what happened to that line of people.

        People may get tired of being screwed, there have been a few signs in bigger countries and I have heard anecdotally of plans by governments for such eventualities, all they have to do is redistribute and reduce the power of banks and the market, but they refuse, politicians are too afraid, so they may need a bigger fear, mass popular protest, which seems to be delivering something in Israel (no turning of tear gas on the Middle Class of course). The middle class in Ireland will not come out, too self-obsessed, aspirational, ‘hope things will improve’ and while being squeezed, still trying to keep up appearences instead of organising for change.

        There is also a major protest building in India of Gandhi like proportions, well covered by Channel 4 news, with a figure who even looks a bit like Gandhi and is using the emotive issue of hunger strikes to take on the government over corruption, millions are responding to the call, from such things change comes. Think population size plays a role (with Iceland being a nice exception), but larger countries seem to experience bigger changes with Ireland stuck in a social time-loop until relatively recently, but the old order is crumbling slowly but still they try and prop up the market, property and so on, a desperate gamble to outrun the tsunami of change sweeping across the globe.

        • Deco

          The aristocracy in France could not get moving faster than a horse drawn carriage. A man on a horse could easily catch up with him.

          Nowadays, there are private jets, and then we have the likes of Seanie Fitz and his seat in the national airline.

    • CitizenWhy

      Too true. The United States will have a lot to answer for in the future when people finally wrest back a workable economy and democracy fro the small class of ruthless capitalists and bankers who now rule without any effective opposition.

    • Gege Le Beau

      Good comment Pauldiv. A boycott aimed directly at banks would put manners on them, they wouldn’t be talking about the necessity of €500,000 salaries, their commercical aspect is both their strength and weakness but the lack of a collective in Ireland after 10 years of championing the individual has taken its toll. The elite must be wondering how they got away so easily with the greatest theft of the public purse in history.

      • Think about the benefits of such a boycott?

        Afterall what we are currently paying back is just being electronically zapped in black-hole debt space. It’s not being lent out again and it’s doing no Irish citizen any good whatsoever – in fact it’s harming them!

        So if we didn’t pay our mortgages to the banks but bought real goods and services instead – we’d actually put people back to work in the real economy! Which of course considerably reduces the deficit?

        Think about it….. As patriots – It’s almost our national duty!

        And while we’re at it we let the commercially irresponsible and incompetent banks and their debts die as they should under the laws of capitalism?

        Then instead we establish a new National Bank left the Euro in favour of our own sovereign currency.

        Would that be tantamount to the beginning of a national economic recovery?

        Or am I just being stupid?

        • Gege Le Beau

          Well if the government isn’t going to back the citizen but sides with banks with bailouts without apparently any strings then people are not left with much of choice but to organise.

          In Iceland it was interesting, because a kind of home guard (literally) was created and when people got word that a house was being repossessed they’d show up and prevent it. You are basically talking about a re-creation of the old land league struggle from the 19th century, people coming together and saying no more to oppressive, faceless authority and that campaign worked pretty well, I mean Ireland gave the world the word ‘boycott’, no reason why it couldn’t be successful again.

          As I said, for corporations and banks, their strength is paradoxically their greatest weakness, they depend on customers, spend huge sums on public relations, they bully and send people threatening letters etc, but their power is built on sand especially if/when people come together in large numbers, they would melt away, they might try to fight it out at the beginning, but it would be a bit like Gaddafi, the end would just be a question of when not if, I’d expect them to settle because that what bullies do.

          • Gege Le Beau

            The Daily Show with Jon Stewart interviewed a couple in Florida who had no no mortgage (i.e. paid in full) but received notification from a bank that is was instigating foreclosure proceedings against them. They took the bank to court and were awarded damages but the bank refused to pay, so they got the local sherriff, went to their local bank branch and started repossessing ‘the banks stuff’ in essence they attempted to ‘foreclose’ on a branch of the bank. The bank manager was ‘visibly shaken’ apparently. :-)

            The Daily Show

          • The peculiar thing is – it’s not radicalism now but logic!

            Don’t repay mortgages but spend the money in the economy instead.

            - I agree it would have been anarchistic dishonesty – but that was only true five years ago?

            But today it’s absolutely the better medicine for the patient!

            Stop paying Mortgages – Take the comatose Banks off the life support and issue new Bank Licences or create one National Bank and bring back the Punt!

            No banks – No repossessions – Anyway possession is nine tenths of the law

            Remember the boost that SSIA’s gave to the economy? Well if citizens started to treat their monthly mortgage payments as SSIA’s we could spend ourselves out of recession!

            It just means the banks will die quicker – And afterall if they hadn’t cashed our mortgages in for casino chips (without our permission) then we wouldn’t be in this mess in the first place!

            Think about it?

      • Deco

        I have been boycotting certain banks for years.

        And then the state, decides to use my tax money to support them, because they need a bit of a help for their stupidity.

        It seems the establishment, via it’s hold on the state has made sure that those who exercise their conscience will be scelped at least once, and everybody else at least twice.

    • Steaf35

      Just a v brief note; There is a broad spectrum of issues here that include economic, financial and social aspects; Politicians have a moral duty to tackle such issues but are failing miserably….again; One has to ask whether they dont possess the knowledge or the political will to undertake radical solutions; A quick look at the banks;
      - They suck in enormous volumes of taxpayers funds
      - They wont lend
      - Intrest rates are increasing
      - Now they wish to make staff redundant
      I could go on & on……..solution…..somebody please issue some new bank licences and let the rest of them go….let them go, let them go…!!!! ( EG-England and the Bradford & Bingley)
      This morning there are 11 proposed educational cuts… is the future and is not a burden to carry yet it is now in peril due to the continued existence of cesspool banks;
      As a nation we have become to complient and perhaps not willing to ‘upset the apple cart’; We should’ve been on the streets a long time ago;

  5. CitizenWhy

    Ireland’s wages and homes can be made livable, and culturally and spiritually rich without a return to the cult of super shopping and boastful consumption.

    • Fiscal independence is the requisite for any democracy and we need to get there asap, cutting alone will not do that but it would appear that short of being the first country to abandon the Euro or the collapse of the euro, the current track is what this country is on regardless of the inequity and unsustainability of it. When you look at it is anything but captured government controlled by global finance

      • Deco

        It was within our grasp – and we pissed our chances of keeping it up against walls up and down the country.

        The national pastime became squandering.

        And the national “leadership” led the way. Doing their bit of squandering.

    • Gege Le Beau

      @ CitizenWhy – in theory of course this is true, but in practice, with the Irish system, a particularly pernicious form of capitalism, it is not going to happen, I say this with considerable regret, we have business people, economists and politicians who would rather see us continually adhere to a failed socio-economic model than work towards a more egalitarian society, a true Republic, for they are the bears where the waters break devouring all the salmon even when they are sick from being full. This is even more the case now that we have lost all economic soverignty and fully indebted, every last man, woman and child for generations, they aren’t the Pope’s children, they are the children of eternal debt and their future will be marked by the deficit and payments, that is the future they have been bestowed by people who were blinded by greed, one of the seven deadly sins, deadly for a reason.

    • dwalsh

      CitizenWhy says:

      “Ireland’s wages and homes can be made livable, and culturally and spiritually rich without a return to the cult of super shopping and boastful consumption.”

      The entire planet can be made livable, and culturally and spiritually rich without the cult of super shopping and boastful consumption.

      • Praetorian

        @ dwalsh

        Further to our early conversation, here are some comments from Chomsky on ‘socialism’, basically US tried to blacken socialism by tagging it the totalitarian Soviet system and the Soviets called themselves socialist so they could benefit from the moral appeal that true socialism had with large parts of the population, but what occurred was as about as far from socialism as you could imagine, where working people were not in control of production or their lives, they were virtual slaves.

        • dwalsh

          Thank you Praetorian

          It is a shame so many cannot see or hear this truth. The propaganda machines have been very effective.

  6. Dodo Reincarnated and ~Unicorn to the masses

    Well if the genetics of the above brings them both back again there must be some hope in some future time that the Family can be rebuilt .We just have to wait .

  7. If the public sector waste and high wages was addressed,and the social welfare bill ruthlessly pruned there would be no problem.
    Instead,the still gainfully employed poor and the hospitalized sick,will bear the brunt of the pain and new taxation.
    There is we are told 86 billion Euros in personal savings waiting for the political pickpockets to purloin from our purses.?
    Who owns all this money?
    For God’s sake the incompetence of the Irish Civil Service is a legend,and their unions will guarantee no change.
    The IMF must drive a coach and four through their “Croke Park” codology-because no Irish government has the guts for it.

    • dwalsh

      I think you are wrong here in two respects. Factually: read the figures given in the comments above by paddyjones and cmont. Morally: heaping our own most vulnerable citizens onto a pyre wont resurrect the Golden Calf.

      At this time Irish people need to stand together; support each other. There is nothing wrong with people having good jobs and benefits.

    • paddythepig

      100% right tiranog33.

      The IMF and EU will do our kids a big favour when they turn off that tap, forcing the Government into action. Then the authorities will need to re-appraise what is a real job and what isn’t, and what is appropriate compensation and what isn’t. Given the intransigence of the Irish unions, that will be some circus.

      This should have all been done within 2 years of the crisis breaking.

    • Colin

      We have old people who willfully become sick because they do not follow directions on lifestyle requirements, and admissions to hospitals for stays of several days cost thousands which the taxpayer funds. An example would be diabetics who still eat the wrong foods and expect hospitals to make them better.

  8. Gege Le Beau

    This current government with its unimaginative economic plans and non-existent may well finish off what is left of the Republic but I get no sense whatsoever of a common movement of people willing to camp out in the streets, especially not from the so called Middle Class, what would the neighbours think. Feel it ends there. If I was to put nail my colours to the mast, if it didn’t happen under Fianna Fail and in particular with Cowen as Taoiseach then it is unlikely to ever happen unless you get some major catalyst.

    I would still love to know the precise political connections with Anglo Irish Bank and how many TDs were insolvent in the last Dail that voted on banking legislation and the bailout.

  9. A nice, self contained article David. Its an often mentioned view amongst many of my friends that the type of security and retirement that our parents had is something we will never experience, despite better education, better opportunities, better jobs, higher relative incomes. How exactly did this happen?

    I’m guessing there are many factors, but as usual I’d make the general points that:

    This isn;t just an Irish problem

    most of the giant problems like this that we face are related to population control, or a lack thereof, plus

    economic systems that rely on perpetual growth are silly.

    We are supposed to be an intelligent species yet we seem collectively too stupid to understand this and do something about it.

    Never a problem in Ireland mind you, we just export the excess population that is beyond our economic carrying capacity.

    I don’t know about all this talk of corporate corruption and fiscal independence, etc etc, its all very interesting but really unless we understand the root of the problem, rather beside the point. And its almost certainly impossible to fix these problems unilaterally.

    • Gege Le Beau

      Neoliberals and uber-capitalists call it ‘labour flexibility’, Trade Unionists and honest intellecutals call it ‘job insecurity’. It plays both an economic and political role, gives employers more power and helps keep a population subdued.

      “First they came…” is a famous statement attributed to pastor Martin Niemöller (1892—1984) about the inactivity of German intellectuals following the Nazi rise to power and the purging of their chosen targets, group after group. The text of the quotation is usually presented roughly as follows:

      First they came for the communists,
      and I didn’t speak out because I wasn’t a communist.

      Then they came for the trade unionists,
      and I didn’t speak out because I wasn’t a trade unionist.

      Then they came for the Jews,
      and I didn’t speak out because I wasn’t a Jew.

      Then they came for me
      and there was no one left to speak out for me.

      • Gege Le Beau

        So we are not alone when it comes to inaction, it is not just an ‘Irish thing’ but it is very troubling for those who see what is going on.

      • A good point. The difference between then and now is people are active denialists of problems of any kind that require a rethinking of the status quo.

      • Deco

        David Begg quoted that the other year in a show of ICTU power.

        Hilarious stuff from somebody who was a director on the Central Bank of Ireland since 2002, and never seen anything wrong with the massive borrowing. In fact he was outraged that McCreevy set up the National Pension Reserve Fund, when he had so many plans for the money himself.

    • Colin


      It happened when Employment Apartheid became National Economic Policy, blame Lemass if you wish. Multinationals were courted to set up and invest here and provide jobs. This came with a guarantee that American companies in particular could set up non-unionised workplaces. However in situ employees in unionised workplaces like the public service were unaffected. So, we had a twin track approach to employment and everything was ‘tickety boo’ until the late 90s when public service unions demanded Bertie devise and deliver on benchmarking so they could enjoy better pay and conditions than employees working in Dell for example. So, Dell pulls out, workers are left high and dry, no job prospects, careers all messed up, personal lives ruined, all the while benchmarking continues to deliver.

      Dell et al never promised to look after you with a job for life. The writing was on the wall for anyone who really wanted to know what the future held for them in FDI companies.

      No one will ever enjoy the wonderful benefits of benchmarking in the future. This generation of public servants will go down in history as being the most selfish greedy swines. FAS retirement adjustment schemes of 7 extra weeks holidays in penultimate and final years is the stuff of legends. Our Grandchildren will gasp when they hear about this carry on in history class in school.

      • lff12

        You make some good points.
        I can add two more.

        1. Heavily backed FDI foreign firms wiped out native competitors in many sectors: Dell, Gateway and others for example eliminated any possibility of having a native hardware industry and only Dell’s totally disastrous self-destruction of its own services division in 1997 prevented it from doing the same to native software and integrator services firms (ironically, firms such as PFH and Sureskills have been the lifeblood of Dell, selling packaging services to customers above and beyond the hardware offerings).
        In sectors such as retail, only the fittest have survived – Dunnes, BWG and Musgraves battle on against big stores such as the German hard discounters and Tesco but they are not the “best employers” by any means.
        The average government subsidy per employee 10 years ago was something like 114k per year – which in many cases provided a job paying maybe 15k a year for about 5 years – nice little profit going to the firm while getting a few years of free employees.
        How can Irish companies compete with this?

        2. The unions badly let down the workforce by tolerating the situation where large firms (including Irish ones) could veto union membership while existing firms could not. The secondary problem of benchmarking was inflating low skilled wages (21 year old mechanics on 40k a year? Clueless basic level clerical officers on 37k? Brain dead builders on 50k per year and more?) so that those losing their jobs could never hope to earn such wages again.

        • Deco

          Native HW industry ?
          Are you serious ?

          I share your scepticism concerning Tesco. Fascinating documentary in concerning Tesco.

          Masters of PR, advertising, media coverage, etc…

          The unreal deal…

      • dwalsh

        I think they will gasp when they hear in history class how in these days it was considered morally wrong and wasteful for ordinary people to have decent pay and benefits…unless they were working for a bank.

        • Colin

          Decent pay for you lot would be a return to 1997 pay levels. You already have Rolls Royce conditions.

          • Public sector in Ireland for the most part is earning excessive incomes solely as a result of disproportionate economic influence, of course people in a civilised society deserve a wage that affords them a decent standard of living and the global market alone usually acts to undermine such wages however there are many still on a gravy train and on any analysis simply receive too much for the value of what they contribute when one considers the cost of sourcing that value from other providers.

        • dwalsh

          @ businesslunch & Colin

          What the children of the future will gasp at is that everything in our times is linked to profitability…to greed…human life regarded as merely a market commodity.
          They will view this like right-minded people today view the medieval feudal system.

          • Colin

            I’m sure the famines in Communist North Korea and the lies that the Communist Ruling Class tells its people will draw larger gasps.

            It never fails to amaze me that the USSR contained Ukraine -the bread basket of Europe, and yet there were empty bread shelves in Moscow, and people there had to queue for hours in the cold weather for a loaf of bread. That’s how I measure how unsuccessful Communism was.

          • Deco

            The greatest acheivement of Soiet planning in 70 years was buying massive quantities of Canadian wheat every time that the harvest was mismanaged by the planners on the steppes of Ukraine and Southern Russia – and never being noticed.

            They figured that if they bought from the Americans that the Federal authorities would notice an anomoly – but the Canucks were just happy to sell to whatever buyer showed up, at the highest price that could be received.

            A triumph in terms of PR, to cover up a failure to actually produce anything on the ground. That was the essence of the USSR. And one of them S letters stood for Socialist. No denying that.

          • dwalsh

            Colin Deco
            Yes the brutal totalitarian regimes you mention will continue to draw gasps of horror…as will the myth that they were ‘socialist’.

          • The price of something can only be legitimately set by market forces, what you say is a fair wage ensures the entity paying it is out of business, what they say is a fair wage ensures the person working for it is exploited and living in poverty, so any system that allows people set prices out of their own interests is not sustainable, the market is the result of an imposition of all these competing factors and is best for selecting an equilibrium price. As you quite correctly point out sometimes the equilibrium price is a price that puts the receiver into destitution however a person should be then assisted to transition into a point whereby they have the skill to deliver service/product that gets a better market price. That system works alot better than central planning and history supports that view, where the market price comes in conflict with the interests of a decent and equitable society , then assistance must be given with the overall ideal of creating equality of opportunity and allowing for competition thereafter to determine the reality of income outcomes. This is what open market ecomies with social protection curbing the inevitable capital excess is all about and such social protection is what prevents human life being a market commodity because as you correctly point out in my view without any social protection human life is but a market commodity. That fear however cannot be used to paying people far in excess of the real price of what they supply at a huge aggregate cost to the taxpayer

  10. adamabyss

    The ancient sea pounds on the shore

    Twisting willows writhe against the clearing sky

  11. Harper66

    As Chavez Pulls Venezuela’s Gold From JP Morgan, Is The Great Scramble For Physical Starting?

    Venezuela has gold with, you guessed it, JP Morgan, Barclays, and Bank Of Nova Scotia. As most know, JPM is one of the 5 vault banks. The fun begins if Chavez demands physical delivery of more than 10.6 tons of physical because as today’s CME update of metal depository statistics, JPM only has 338,303 ounces of registered gold in storage. Or roughly 10.6 tons. A modest deposit of this size would cause some serious white hair at JPM as the bank scrambles to find the replacement gold, which has already been pledged about 100 times across the various paper markets. Keep an eye on gold in the illiquid after hour market. The overdue scramble for delivery may be about to begin.

  12. @fellow posters
    I went to an extremely interesting and thought provoking meeting last night as a result of “The Freedom Bus” parked near my office yesterday.
    Attended by about thirty people it went on for over four hours;


    - Don’t knee jerk… instead study very carefully, follow up and if you can; go to one of the meetings!

    As I said……. hugely thought provoking

    More at

    I would love to get an informed opinion from the posters on this site!

    Apparently the media won’t touch it!
    Apart from Max Keiser!

  13. Malcolm McClure

    Again to quote the inimitable Kenneth Williams: “The answer lies in the soil”.

  14. CitizenWhy

    I think any new cultural revolution in Ireland will have to emphasize a concept and practice off capital accumulation (cash built up over generations).

    Here’s where I am coming from.

    My grandparents’ house in ireland was burned down three times by the Black and Tans (for good reason from their point of view, given the family’s insurrectionist activities) and built again each time as a sign of defiance and independence. Where did the money come from? Capital accumulation. From money literally buried in a few places on the farm because a bank account could be seized by the British government. Their ancestors were able to accumulate capital and give each of the children a good “dowry”/stake because they could earn cash even under the penal laws, living as they did in the one area where Catholics were 40 shilling free holders/99 year leasers, or whatever was the term for people who were legally property holders (and voters) while paying some rent (cash, not crop) to a landlord, their landlord being one of the fairest in Ireland. But they preserved a good deal of the cash they made in order to be safe against the shocks that would be inevitable because of their determination to work and fight for a free Ireland. Of course after Collins was killed and Cosgrove executed the deValera rebels (whom they did not join, supporting Collins) they were disappointed with what that free Ireland turned out to be and they withdrew from any political involvement. But because of the inbred habit of capital accumulation they prospered – without lavish living and being good with their money towards their workers and the poor. But always putting aside capital.

  15. malone

    A very interesting article and also very interesting that you use Israel as a comparison
    You state that ” Israelis, unlike Syrians or Egyptians, live in a prosperous democracy with a well-functioning welfare state”

    That statement is correct but I think you missed out on a very important point

    1. Israel is in the same boat as Ireland

    Ireland is being baled out by the IMF and the EU and depends on that money. It also has to repay that money & interest.

    Israel also depends on the money from the US in the form of grants but however Israel does not have to pay the money back. It is free gratis

    Now if anything were to happen to the US, Israel would collapse like a house of cards

    If anthing untold were to happen to the the Euro / EU as you said before Ireland woud be in dire straits.

    Israel exists as a well functioning state with US support in the same way as Ireland did before the boom so long as the banking system functioned correctly

    But the banking system fell apart and it seems now that it may have been just the first bolt of lightning before the real storm hit

    How long can or will Israel continue to be a well functioning state given the present conditions ?

    • stiofanc02

      I was born in Newport R.I. My dad was a Washington D.C. cop as was his father in law. I lived in Maryland, Des Moines Iowa, San Francisco and Durango Co. Over the years I have seen politicians of the Amercian breed come and go. When this guy came on the scene I was worried because he ticked all of the boxes for the sheeple in my homeland. I was right and now he is exposed, moslty as an inexperienced politician without Joe Kennedy as a father to guide him. Clinton was too clever to fail completely. This guy Obama? Good looks, great voice, two beautiful kids. Apart from the nasty wife, I hate that bitch, he was a rockstar. We dont need rockstars as leaders. Look at the two goons, one with glasses and one without a comb, who want to be statesman over here if you doubt me. Just as we dodged a bullet with wtih the Norris presidency here we have a chance to turn things around in the U.S.with someone who actually is the real deal. Herman Cain gets my vote. Oh, and as for what happpened to Obama? Nothing.

      • adamabyss

        Lived in both Maryland and Des Moines myself. MUCH preferred Des Moines to Maryland. The people in the Midwest are far more friendly and welcoming than that assholes indoctrinated in the rat race on the East Coast.

        • adamabyss

          …than ‘the’ assholes I mean…

        • stiofanc02

          There is a saying in the midwest “assholes are a dime a dozen” so I know what you mean, Hey, what were you doing for a living in Des Moines? What year was it? I left for the last time in 1982.

        • CitizenWhy

          That rat race is called “meritocracy.” Liberals as well as conservatives love that concept. It means people get what they deserve in society.

          • stiofanc02

            The fact is, with a little luck and a lot of effort, you actually CAN do very well indeed in the good ol U.S.of A. Sufficient brains mixed with the right choice of mate and some encouragement can lead to fortunes there.

    • adamabyss

      Obama is, and always was, an imposter and a charlatan.

      • dwalsh

        I never got the Obama thing either adamabyss. I couldn’t see or hear what it was that was making everyone go gaga. It was really awkward at the time, to say that to anyone. People used to get offended and upset with me. When he took office I took note as Wall St. and corporate America moved the new watch into the White house.
        It’s surreal.

      • John Q. Public

        all Presidents of the US are tools in the hands of the rich.

      • Deco

        Show-Bama….It is all a show.

  16. BrianC

    Yes the future looks very bleak indeed. But perhaps it will be much better than we think if we are lucky. We could be very fortunate and move from obsessive wealth creation to living in the present and creating a new future not hostaged to wealth generation alone. If over unity energy is ever delivered mankind will be freed from the shackles of fractional reserve banking as the means to transfer value and true free enterprise will reign.

    ‘Moleskin Joe’ a book by by Patrick MacGill depicts the life of an immigrant navvy at the time of the First World War. It is replete with relentless hardship and harshness. And it is also a wonderful love story. At that time just as wealth is inherited most inherited poverty and remained in its grip all their lives. They had to endure their lives in abject poverty and suffering. Will our children be forced to inherit poverty. At the rate the Irish Government is going they will.

    Now I could go on at length but I think Moleskin Joe’s saying which circumcsribes his philosophy says it all ‘there’s a good time comin, althuogh we may never live to see it’.

    If you have read the book you may understand what I am trying to say when I say ‘I think that this saying reflects the Irish mentality’. We as a people through the burden of coloniasm have a subdued nature cowed by hardship and the boot of an oppressor are now innately predisposed towards the acceptance of misery and little belief in ourselves to have any faith in our ability to change our own destiny and create a better future. And any seeds of true self believe are destroyed by the Irish penchant for goombeenism which is totally reflected in our political structure favouring the status quo serving the interests of the few at the expense of the majority. It is a bit like how our national teams take to the sporting field. We enter the arena in a manner where we are trying to get our competitors measure before we really start playing and truly competing rather than from the offset forcing our competitor to get our measure. In other words rather taking the game to them we let them take the game to us. (But when our backs are to the wall we are the best you can get). However, despite our valiant underdog mentality efforts to win we too often loose the game the just reward for a weak timid lack lustre start. Just reflect on how Ireland handled the Troika and looked for every excuse we could muster to justify our subservient attitude. We just love being kicked around.

    It is not in our backbone to get onto the streets and march and demand our rights to a better future for our children. In one of David’s articles he remarked that when the Irish attended EU meetings we never uttered a word and that is no surprise to me. Why is that? Simple, because we are still a colonial entity struggling to be an independent nation. We may have a flag but we have no conception as to what it truly means.

    I wonder what Michael Collins would have done? We would all be on the streets. So paddyjones is right there is much worse to come and the soft Irish with their smiling eyes will sit back and take it. And our children may have to accept that they must endure hardship and must prepare themselves to inherit poverty accepting the fact that their parents squandered the country’s wealth to save the bankers facilitating one of the greatest transfers of wealth ever to occur in economic history.

    The economic difficulties Ireland is facing is totally of our own making in socialising private banking debt and horrendous losses. And in four years time we will vote for more of the same and in the intervening years there will be no marches on the streets.

  17. BrianM

    In the 1980′s there was a recession. Massive immigration – highly educated young irish men and women left to work in bars and building sites in the UK and america. Special visa schemes came into play in the US. Those people had less than their parents. Instead of whinging about it they got on with it – they didn’t sit back with their hand out they jumped up and put their back to the wheel. Most of them made a success of their lives – some came back and some didn’t. DMcW, your philosophy seems more and more focussed on what others should do, on what people are entitled to expect rather than what people should do for themselves. This is a horrendous time, made worse because the extreme nature of it could have and should have been avoided. However telling people to whinge and moan is no solution.

  18. juliehogan

    Funny.. my son received his results yesterday. Did brilliantly thank god! Luckily, he is one insightful chap and was adamant during the year that there was no way he was signing up for a four year college course, to spend thousands on something with no guarantees at the end. Much to my protestations about having no chance unless he was prepared to get down and apply himself!! He carefully put together a portfolio for a course in music technology, radio production and journalism etc. Was accepted straight away and is looking forward to pursuing a career choice that he is determined will see him successful in a few years by taking baby steps. Looking at the coverage of the leaving certers receiving their results yesterday, I felt a little tinge of sadness. But for every chap that called to my door yesterday to start their celebrations in earnest, each one so positive and certain in their plans for the future, I thought “go on lads, learn from all our mistakes, knock em dead”! We have to all stay positive for the next generation and trust them. They’re far from stupid and have a lot more smarter than we think!

    • juliehogan

      Ha! And that should have been “a lot more ‘smarts’ thank we think”!

    • adamabyss

      Congraulations to your son. There is no substitute for hard work.

      • The idea that a few weeks lectures and routine exams over three or four years is a guaranty of a great career is clearly now evicerated. Few college courses guarantee anything yet people flock into college with the mindset that a great job is what they are entitled to at the end. Education is vital but Colleges around the western worl are full of course that may be interesting but of minimal value to anyone intent on a well paid position immediately thereafter. If you attend college aware of the distinction between earning power and education and you get a good education fair enough but third level education is clearly not the economi tool it once was and your son is right to follow his own path and not feel that he is foregoing economic progress in so doing

  19. David I notice that the comments below this article are much more interesting and humane that usual

    Maybe this is because you wrote about a more general topic rather than the mechanics of banks and the financial system. The ‘tiny techs’ who love discussing the finer details of the financial system are absent today and I for one am glad this is the case because frankly most of that nuts and bolts debate is meaningless to most ordinary citizens like myself

    They just want to switch off and rightly so. They are not stupid, they are just easily bored and can’t get a word in edge ways because others seem determined to make this debate as complicated as possible when in fact it should be much simpler

    You have to write more about the bigger picture rather focus on the world of financial jargon because most of that stuff just alienates people who could other contribute nuggets of gold (pun intended) to the debate

    The bigger picture is something most people can identify with hence that fact that most people who commented on this article are almost all agreed that the world is at war with the rapacious elites who have bled countries dry aided and abetted by Chicago School economics and the psychotic greed of the Wall Street hustlers

    Look at all the comments above and how similar are the sentiments barring those comments from the one or two posters who seem to want to see Ireland turned into some imaginary Friedmanite utopia which exist only in their deluded imaginations

    This article and the comments below proves that there are some people in Ireland who can come together and who genuinely care about the type of nation we will bequeath to future generations. It is for them that we need to fight and win this war

    I reckon the crap will hit the fan in 2013 and that the troika of IBEC, ICTU and our feckless government will tear each other apart. Wages will return to 1990s levels and hopefully we can send a message to Wall St that lets them know their card had been marked

    Starve them of our money and put some manners on the bastards. It is out duty and everyone here knows it

    • Dorothy Jones

      Nice one @pauldiv…

    • Deco

      I reckon the crap will hit the fan in 2013 and that the troika of IBEC, ICTU and our feckless government will tear each other apart. Wages will return to 1990s levels and hopefully we can send a message to Wall St that lets them know their card had been marked

      Nah – every time the crap hits the fan, they will try and sucker the rest of the population. Like they have being doing.

      I hope they tear each other apart. But I have learned from experience that they engage in “optics” so that you feel like as if one is protecting you from the other – when they are only protecting their own power and priveleges.

  20. Sean F

    Another great article. The one ominous sign for me is the excitement that i hear in politicians voices when the describe as a victory being able to return to the bond markets to borrow. This is the problem our aim should be to balance the books not create a bigger overdraft. If Michael Noonan had to go into AIB and present these figures he would be politely told to go ???????? As we all would be.

    Whats going to happen now is that Europe is going to force the balancing the budget issue and then we will feel the pain. We live beyond our means its that simple but now we have a debt of enormous magnitude on our shoulders it is time to default and go back to reality. We need to step back in time and start again while we still can.

    Be the first in Europe to say no more and in turn be the First to emerge from this financial disaster and leave something for the kids…..

  21. Adelaide

    The idea that this global/local recession/unemployment etc can be turned round and that we will return to an economic model that will employ the majority its citizens is a fallacy.

    “The Future of Work” by Charles Handy, first published 1984, charts the history of the ratio of Employment Vs Mechanisation/Automation/Digitisation and logically follows it through to 2050s where the author predicts it will reach its end point. Then the only ‘work’ requirig human input will be that which can not be replicated artifiically. This will require 10% of the population engaged in such activities on a part-time free-agents highly-skilled remuneration, another 10% engaged in transient low-paid hospitality service sector servicing the elite 10%, and the remaining 80% of the population are simply surplus to requirement.

    He accuratley predicts that by the 2000′s 25% of the global population will be surplus to economic requirements, which tallies with present statistics for most develeoped countries, not the massaged unemployment figures but the percentage of the population intentionally available for but without employment.

    The concept of a ‘job’ and its associate ‘pensions’ + ‘work place’ etc will be a historical relic. He proposes two outcomes for society depending on how it deals with this new world. Utopian where the wealth generated by the elite 10% is distributed as well as natural resources and all live modestly but comfortably in a highly-automated post-work society. Or. Drum roll, please. A feudal society where the elite 10% retain the wealth they generate to finance their own micro-economy while the remaining 80%-90% scavange for subsistence in a highly-automated version of the Dark Ages.

    The author’s biggest gripe is against governments’s propoganda and the smoke+mirrors schemes to mask the true scale of unemployment and its false promises of a ‘return to full employment’.

    ps I would not actually recommend this book as a read because it is very stuffy and statistics-heavy, but I would put it first on a reading list for would-be politicians-policy makers.

    • CitizenWhy

      Charles Handy’s analysis brings up the valid point that a large percentage of a nation’s population will be surplus. But 80% is too high. There will continue to be a professional class of doctors, lawyers, astrologers, psychologists, bankers, clergy and others who give advice and help solve problems. There will continue to be a criminal class, possibly larger, who will require policing, maintenance in prison, and “rehabilitation.” There will continue to be a need for people with builder skills to maintain or remodel the structures of the rich and the infrastructure. There will continue to be artists and entertainers and some form of media. There will continue to be a need for software and other tech people. There will continue to be a military. There will continue to be a need for hospitals, universities and other centers of research. There will always be sports. And other means of employment I cant think of right now.

      A new feudalism would not necessarily resemble the old feudalism. Just as St. Benedict founded a monastic infrastructure based n the old Roman city state, and monasteries often treated their peasants fairly as human beings with rights, churches and non-profits will buy up land and help people to create rural city states of villages and self-sufficiency in food and energy, along with some trading among these city-states and some production of cash crops. There would be teachers of various kind and organized sports and cultural/entertainment activities and technology. Ownership of the land could remain in common by repeating the old system of people who pay a certain rent and in effect become owners of the land, with full inheritance rights, while still paying rent to the “landlord” collective. Families would live a families.

      What I think is that globalization will succeed, that is, it will even out he economies and the societies world wide. The US certainly, and possibly much of Europe, come to resmemble India and Brazil as India’s and Brazil’s growing middle class makes India or Brazil look from the outside like a European type country. India and Brazil have growing economies and a prosperous middle class and a not miserable working class while tolerating huge numbers of economically surplus poor and unemployed. In the US we will see a huge number of surplus poor, including many trickling down from the middle class. This may not go over in Europe politically but it would in the US.

      In effect, for currently developed nations, globalization exports capital and jobs and imports high rates of unemployment and poverty, creating a roughly evened out world. With the super rich in charge, of course. A new Global Ascendancy.

      • dwalsh

        Good comment.

        In an interview with Charlie Rose prior to the election of Obama, in company with Kissinger and Scowcroft, Brzezinski made a comment which no one picked up on in the discussion but which got my attention. To paraphrase, he said that Americans would have to adjust to the fact that the excessive consumerism of the past decades was not sustainable. To my ears he was clearly signalling the end of the American Dream as we have known it.

        I think you are spot-on about America and the first world generally. And you may also be right that the only way humanity at this time can achieve a fledgling global civilisation will be under the rulership of a “new Global Ascendancy”; in the well known words attributed to David Rockefeller “the supranational sovereignty of an intellectual elite and world bankers”.

        I wonder is this crisis really a coup?

  22. StephenKenny

    Pauldiv talking about the UK under Thatcher got me thinking.

    This whole period reminds me of the UK in the 15 years prior to Thatcher: The great debt driven boom of the 1960s; the crisis of 1968 warded off by spending the state pension fund; 10 years of inflation, political unrest, destruction of the middle class leading to the 1970s, and finally the climax in 1976 when the ex-Communist UK Prime Minister James Callaghan announced to the Labour Party conference:

    “We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists, and in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step”

    and then

    “When we reject unemployment as an economic instrument – as we do – and when we reject also superficial remedies, as socialists must, then we must ask ourselves unflinchingly what is the cause of high unemployment. Quite simply and unequivocally, it is caused by paying ourselves more than the value of what we produce. There are no scapegoats”

    The period ended with almost total collapse, massive strife, class hatred, almost every service went on strike, electricity was only available intermittently, there was no rubbish collection for extended period (first time I ever saw an adult rat), and so on and so on. This was under a Government led by a man who’d said
    “I have not the slightest doubt that the economic measures and the Socialist measures which one will find in the countries of Eastern Europe, will become increasingly powerful against the uncoordinated, plan-less society in which the West is living at present.” He was profoundly humane, and a good man.

    My point is that history is full of warnings of periods like this. We must not fall into the traps seen so often in the past, although I have no doubt that the comrades of right and left are honing their smiles and promises, we must keep our nerve, and face off both sides. It is self-evident, and unarguable, that significant change is necessary, but from all of history we see that any change is not necessarily good change.

    • StephenKenny

      and just in case any of the party members think I’m suggesting it, any form of re-run of the UK in the 1980s, or the1970s, would see me down tools and move. I’m too old, I’m too tired, and I’ve just had it with all that wide-eyed fanatical BS.
      It’d be a shame, just as the new company was starting to take shape, too.

    • Deco

      Factually, he was completely incorrect, and clueless.

      The same policies that were wrecking Britain in the 1970s were doing even more long term damage to Eastern Europe.

      We are in real trouble when the quote of a deluded clueless fool becomes classified as “profoundly human, and a good man”.

      He was absorbed in his own self delusion. That has serious side effects, when it occurs to somebody in a position of authority. Much of what the left ran in Britian in the 1970s from electricity to British Leyland was a colossal underperformer.

  23. mishco

    David asks:

    “Will my children and their contemporaries be the first generation of Irish children in over 80 years to be poorer than their parents?”

    First of all, every family is different. The black sheep may end up worse off in his generation, the whole of a younger generation may be impoverished by the reckless gambling of their parents, and so on. So your question is too simplistic for me.

    What does worry me is how the whole world will cope with the impending crunch. In the past, civilizations have come and gone for a variety of reasons, but now that most of us are part of a global “civilisation”, we will be thrown back on our own resources when the fiat currency system implodes, and even more so as natural resources disappear.

    When this happens, where would you rather be living: Ireland or Saudi Arabia? They can’t eat oil (even while it lasts) or sand. Ireland or China? They can’t eat when there are too many mouths to feed. We are blessed with good land and a low population, and when the chips are down, whether my (great-)grandchild has a few more cents in his pocket or a wider-screen TV in the living-room will hardly seem like a relevant question.

    I’m not saying I do not agree with you that we need to take action now, but that action should include careful planning by parents together with their children to simply survive, to grow food and preserve it, to fix things when they break, to make things rather than buy them, to ride a bike rather than drive a car, and of course avoid television and banks. Get out of school as soon as possible to develop life-supporting skills, and, whatever you do, do not trust anyone who promises to make you richer. The family which does this is more likely to grow richer from generation to generation in the Brave New World all too close to us now.

    • Colin

      Catholic Merchant classes exported food during The Great Famine here, where 1,000,000 died. What makes you think history won’t repeat itself when you consider people haven’t taken to the streets here to protest about the debts of property developers and ponzi bankers becoming public debt?

      • mishco

        All the more reason to start growing and eating one’s own food now, Colin. I think, however, there is a major difference from the mid-19th century. The UN won’t allow another Famine to occur even if we become dependent on one or two crops again, as I don’t see our conditions deteriorating to N. Korean or Somali levels. But it will still be survival of the fittest, so we need to get fit!

        • Colin

          Good idea about self sufficiency there Mishco, but what if you live in a shoebox 2-bed Celtic Tiger Era apartment that cat swingers wouldn’t touch. You’re at the mercy of the marketplace.

          Also, what if the IMF/EU/ECB Troika tell us we MUST export our meat and veg to balance the books and to hell with the people, let them eat gruel?

  24. Deco

    The premise of the article is correct. Those who toil are being steadily scelped, and patronized for their willingness to be scelped.

    The moral of the age – when you are being patronized, it is because somebody sees a way of getting something out of you. The banks did it. The media still does it. The politicians do it. And it should be a warning to you all.

    To be honest I could see this coming when Clinton was in the White House and Michael Lowry was awarding mobile phone licences. In fact most people sensed it. And that was before the boom.

    Cheap credit has the effect of making a significant proportion of the population stupid when it comes to looking after their own interests. The proportion of the population that is obedient, and that trusts authority, the media and the institutions of state.

    The price is going to be very painful.

  25. Deco

    What happens when that social conveyor belt to prosperity and a better life stops? The middle-class begins to shrink. The gap between rich and poor increases so the middle-class gets squeezed to pay taxes for the poor, but at the same time they see their chance of social advancement scuppered by falling incomes, unemployment, negative equity and rising childcare and education costs.

    Bailing out the gombeens who to control the institutional state, and the ISEQ, makes sure that we are heading to dissaster.

    Those who can should plan their family’s future over a very long term.

    Intellectual freedom is important.

    • Deco

      I think people are realising that the Social Partnership management of the government is failing the young – giving jobseekers a cold shoulder, and loads of feint praise (patronising).

      The EU has been proven as a highly effective power body for looking after reckless French banks, and loans that by this stage should have been defined as sour.

      • Social Partnership seeks to preserve incumbents in the positions they are in and the salary they command, shielding them from market realities of the value they produce. Contrary to what some suggest it is not about a public vs private divide but an incumbent vs everyone else divided. Public sector unions have no problem throwing recent entrants and future entrants to any public sector under a bus once incumbents are ensured their high income and non viable conditions are continued.

        • Colin

          Its called Employment Apartheid.

        • Deco

          A very interesting study would be to investigate the age profile of people in the public sector unions…..

          Also bear in mind that the public sector is rife with people appointed because they come around knocking on your door every time there is an election – canvassing for a person of importance in the party hierarchy – because the party got them the job.

          It is the root of a lot of the morale and sloppiness in the public sector. It is also the antithesis of the “performance ethic”.

          As the Ditherer said “I did not appoint them to state boards because they gave me money, I appointed them to state boards because they were me frendz”…

          Just look at the behaviour of the PDs, and the GP when in government to see how the pigs behave when they get their snouts into the swill. Eventually they are too fat to walk.

          • Pedro Nunez

            Ni aon gombeen mar do gombeen fein!

            Ireland has always been a patronising, rigged and repressive state since its foundation, it has been founded on those that seek to profit or to supress the talents of others through Gombeen nation.

            It wasn’t the catholic church alone they were merely a useful ploy for the mediocratic, anal, cloying institutionals who
            “But fumble in a greasy till
            And add the halfpence to the pence
            And pray to shivering prayer, until
            You have dried the marrow from the bone”.
            W. B. Yeats, September 1913

          • coldblow

            Was it for this grey geezers bled
            The country and its future white?
            For this that all that sh*te was said,
            For this that Sean Fitpatrick l*ed?

  26. Deco

    { It should be about creating a system of trade where people can have a chance to fulfil their lives. If that system breaks it should be fixed. If a society divides whereby those at the top have too much and those at the bottom expect those in the middle to pay for them indefinitely, the middle will revolt.

    In Ireland the system is always fixed…fixed by the insiders.

  27. Deco

    The Irish concept of Lifestyle is up for negotiation. In fact it has met financial reality, and the health affects of it’s misconceptions.

    Who is Ireland’s Dick Cheney ?

    Who is defending the rearguard for the Irish concept of lifestyle ? 800 km round trip pissups ? New reg cars in January ? Shopping in Manhattan before Christmas ?

    I reckon it is Pravda-RTE.

    • followed closely by John Bruton of IFSC

      • Deco

        It is amazing how authority in this country has a cruel tendency to put a lawyer in change of a fiancial responsibility.

        Cowen as Minister for Finance.
        Lenno as Minister for Finance.
        Brute as IFSC envoy.

        I sure there must have been more.

        I mean you get young people training to be economists – and then they find that the lawyers have infested their main professional path.

  28. Colin

    Another aspect of children being worse off than their parents is a phenomenon called ‘grandfather rights’. It takes many forms, often amnesties. For example, if you are aged 60+, that generation who’ve had it handy and ridden the Celtic Tiger fairly well, known as the Jaggers in David’s books, well there’s every chance that they have a full driver’s licence without passing any kind of a test. Public Sector Unions (yes, those wonderful folks again) refused to allow more driving instructors to be hired in the 70s, which allowed more bad drivers on the roads, resulting in more fatalities and injuries on the roads.

    Another example was FF’s botched minimum wage fiasco, where they lowered the minimum wage for newly hired staff, but left it as is for existing staff. Again, grandfather rights reigns supreme, where employment apartheid policies are developed and become institutionalised further. Disgraceful carry on throughout. Young people are being screwed all over the workforce, a culture of treating them like shit has taken root, the work for your dole mentality and get some experience and maybe get your foot in the door.

  29. John Q. Public

    It could be argued that they were worse off in the actual boom as they had to juggle more and cope with higher stress levels than their parents.

  30. Pedro Nunez

    As Tony Benn was moved to tears by, ..’let our revenge be the laughter of our children’.

    • Deco

      Ah yes, but our advertising sponsors control television, and will dumb down the children, and make them too stupid to look after themselves….

  31. Deco

    Latest tweet from Paul Sommerville. (No wonder he is not let of the state broadcaster).

    App EU called P Neary to ask how short selling ban works,following his plan to a tee.Soc Gen —10 %,Cred Ag —8%,Comical if wasn't so serious.

    Now, I am absolutely astounded at the stupidity of the Brussels and/or the ECB.

    Patrick Neary is the last person you ask for advice concerning banks, bank meltdowns, and the management of a currency regime.

    From the clowns who brought you the Treaties of Maastricht, Nice, Lisbon and the Lisbon “cast-iron guarantees”. They will prevent the banks from collapsing by about two weeks.

    “Kick the can down the road” – except the road is a cul de sac – and they are facing the wrong direction.

    Just wait until DE, NL, FIN, AT find out the real story about P.Neary. Then we here will realise the serious inadequacies of our state’s corrupt and amatuerish institutional culture.

    • Deco

      Meant to say ‘no wonder he is not let on the state broadcaster’.

      P.Neary – the comeback kid. Happens to be an expert on financial regulation, in case you did not already know.

  32. So, seems to be a collision course developing between Troika and ILP. Merkel and Sarkozy want greater political cooperation = control of our economy; and our dullards policy of greater austerity towards greater economic sovereignty. IBEC during the week did a solo run on our economy bursting ahead with growth outstripping any other EU state. This culminated in a Primetime appearance of an IBEC gombeen playing his growth violin against the spectre on the news of falling world markets and the imminent collapse of exposed parts of the european banking sector.

    The euro is gone collapsed by exposure to its version of subprime a la Greek default and the state of PIIGS on verge of collapse.

    In the background there is the seething bond market fed by OTC and CDS exposures and self fulfilling shorting of markets attempting to save themselves.

    I’m thinking there was more to the Bank of America offloading of its european MBNA business than first appears to the eye. Rats leaving the sinking ship of the euro?

    So at what point do those sailing on the Titanic acknowledge the ship is doomed?

    • Deco

      Ruairi Quinn – the mouse that squeeked.

      I reckon that this is in the same category as the “public posture” episode involving Gilmore’s antics when Sarkozy declared that the Irish electorate would have to keep voting until the “desired” result came for the Lisbon Treaty.

      Another peice of showmanship.

      IBEC expressing an upbeat opinion yesterday, brought back memories of the Bertie years, when everybody was extolled and pressurized to spend like crazy borrowed money on kicks, gimicks gadgets and junk.

      These clowns at IBEC really miss the days when margins were inflated, and market rigging was rampant. Now they are trying jawboning as the only strategy to prevent margin deflation.

      As regards “deflation” – I don’t see an enormous amount it. People are simply not buying stuff. That is the re-adjustment that you are seeing. And it is a widespread feature. It shows up in German exports and in yesterdays Philly Manufacturing Index drop.

      Ireland’s corporate lobbyist clique think they can talk us into more borrowing and shopping. Another joke. They should concentrate on the one thing that they are good at – getting their bums on the seats of state quangos.

      • Deco

        If consumption in the economy drops by circa 35%, but price inflation stays between minus 2% and plus 6%, then this suggests that there is a massive hold up as regards deflation, and any hope that the cost of living will drop.

        Maybe the authorities will include the price of property instead of rent in the Inflation index to create “deflation” as a statistical feature of economic reporting.

        But most people will tell you that food, fuel, and utility expenses are going upwards not downwards.

        This is the problem with inflation. It drives up the costs of the essentials, in an effort to bail out the speculation that existed in shopping centres, holiday homes and shopping trips to Manhattan. It results in a re-allocation of resources from those who are careful, to those who listen to IBEC clowns telling people to buy more junk.

        • re ‘It drives up the costs of the essentials’

          yep, just another way to make the burden fall on the poorest, they get hit big time with ‘charges’, VAT, inflation they pay for up front because their incomes get burned as they need to spend straight away on retail for their families, education costs, health charges

          Meanwhile the mantra of no taxes is just a flag of convenience for our offshore, maltese offshore tax dodging falcons racked by the guilt that makes them pour millions into bad investments in soccer Traps:)

      • Deco, great post.

        I knew when I mentioned the word ‘IBEC’ your starship would immediately uncloak and aim for the target:)

        Deflation is there, its there in ‘the sales’ and should increase as we go backwards:(

  33. PRAVDA-RTE Primetime…sorry about the persistent rain in the post above, but what can you do:)

  34. dwalsh

    @ Colin & Deco

    Re: the Soviet Union and socialism

    Deco wrote:
    “And one of them S letters stood for Socialist. No denying that.”

    Prior to the fall of the Berlin Wall East Germany was officially known as the ‘German Democratic Republic’. Would you argue on that basis that East Germany was democratic…hardly.

    Similarly the use of the word ‘socialist’ in the name of the Russian regime was a misnomer.

    What it says on the tin is not always what’s in the tin.

    • Gege Le Beau

      Precisely, as a friend said to me, in the Bible says even the devil can quote scripture.

      One of the great pieces of advice came from Christ thousands of years ago, which is more applicable now given all the double-think/double talk State propaganda: by their fruits they shall be known.

      The fruits of the Soviet Union were: repression, large Gulags, poverty, economic stagnation, decline, war and collapse. The fruits of the biggest capitalist country on the planet are: staggering gap between rich and poor, chronic poverty, high unemployment, job insecurity, tent cities, privatised health care, education, absurd property prices as wages decline and war (military-industrial-political system).

      We can talk about ‘isms’ all we like, and some do represent the good of the people and others the centrality of the individual but at the end of the day it comes down to common sense and what is in people’s hearts. If we want a world where profit is put ahead of people, ahead of the environment, ahead of society, ahead of people’s health and right to educate themselves then we won’t have long to go as a species.

      Politicians who wrecked Ireland have their €300,000 lump sums and annual pensions, but they have lost their names, their reputations and I like many people wouldn’t have them inside my door, high price to pay for that cheque and a few twilight years spending it.

      • Pedro Nunez

        Re: ‘Politicians who wrecked Ireland have their €300,000 lump sums and annual pensions ……..high price to pay for that cheque and a few twilight years spending it.’

        Don’t know about that, the brass neckers (vermetelheid, нахалство, drzost, culot, faccia tosta, įžūlumas, descaramento, olla otsaa, frekkhet, uforskammethet) were ready to pull a stroke putting Gaybo in as a stalking horse for the presidency.

        Frank Gallagher in shameless wouldn’t have a look in with these guys

    • Colin

      All the ills in the Soviet Union were as a result of Communism. Those ills could not have occurred if Russia was Capitalistic.

      Regarding GDR, it was a lie. There was no democracy because true democracy is incompatable with Communism (please give me an example of a country where this is true). Communist regimes generate the bigest lies, there is no free media to call it otherwise. Or maybe the East Germans were very humourous and loved a bit of sarcasm.

      • Gege Le Beau

        Communist regimes is anachronistic.

        You have totalitarian regimes who cite themselves (surprise, surprise) as communist. Bit like capitalist regimes calling themselves democratic, there is nothing democratic about capitalism where power and wealth is concentrated in the hands of the few thanks to the labour of many.

  35. dwalsh

    Gege Le Beau wrote:

    “If we want a world where profit is put ahead of people, ahead of the environment, ahead of society, ahead of people’s health and right to educate themselves then we won’t have long to go as a species.”

    Absolutely. What we need is return to human values…not market values.

    Most of us live and work in the ordinary physical economy; and it is in our natural interests that supply and price are stable; we value stability. But the financial markets which gamble on the prices of the commodities we rely on for life and livelihood do not profit from stability; they value instability; and they have managed to convince many people that price instability and their gambling is good for us all.

    The interests of ordinary people and those of the financial markets are opposed.

    • Gege Le Beau

      Indeed, in the rollercoaster than is the market coupled with state economies on the brink selling the kitchen sink for half nothing, a few people are making enourmous sums of money, this is a crisis for many but a golden opportunity for some who are profiting from making a bad situation worse.

      • dwalsh

        Yes…the IMF slash and burn policies are preparing the way for the asset strippers…or ‘thriving capitalists’.

        As you say above many democracies are such only in name. The GDR was an extreme example…but in my opinion the USA is not a true democracy either. Very intense educational and media propaganda hides the reality from the majority of its citizens that America is an oligarchy. Capital has long ago usurped the political order in the USA and many other western democracies.

        • Completely agree the US is now an oligarchy and the “Citizens United” decision in the US Supreme Court affirms corporate control over the “democratic process”. It is really baffling how people are exploited in the US, no other western developed country is that manipulated by the wealthy elite, it is completely disgusting but the average american is too unaware of the world around them to really see how much contempt some of their fellow “citizens” have for them. The only glimmer is that the US does have an ability to change that is greater than in older countries although as they election of Obama showed it was a charade. Americans are some of the most decent people in the world, yet their society is rotten and under complete capture of a tiny elite

          • “Interest carried” IRS concession ensures that all invesment income deploying this technique pay only 15% of their income and tax breaks for oil companies and private jets are in full effect. The top 1% have more of the national wealth now since anytime before the great depression, healthcare , education costs never higher, the national accounts are in unprecedented debt and alomsot 10% unemployment and yet the democratic process cannot extract another dime from the ruling financial elite. What more evidence does one need of an Oligarchy in full effect.

            The counter argument and the ideology used to try and justify the absurdity of it all, is that with hard work the average citizen can join them , anecdotally that is clearly nonsense but also the “Land Of Opoortunity” is now way down social mobilty tables and competing with Russia and Iraq in terms of income/wealth inequality.

          • dwalsh

            It is also remarkable that the Land of the Free imprisons a significantly larger proportion of its citizens than any other nation or regime on earth. Russia comes in a very slow second; and the USA’s bogeymen of oppression and terrorism such as Iran and Libya imprison merely a third and a quarter respectively of the American figure. Canada imprisons a seventh of the American figure.

            I wonder why this is. Are American people really more criminal than other nations?

            Could it have anything to do with the partial privatisation of the penal system?

            Or with a class system, unacknowledged but real?

            Are Americans as free they believe they are?

          • Praetorian

            Nothing like convincing people of something when the opposite is true, arguably more totalitarian than the Eastern European sense because at least those people knew they were being screwed by corrupt regimes. But this is hardly new, the British portrayed the global empire as being concerned with trade with a dash of the civilising mission. The Spanish in South America were bringing God to the savages. When Hitler invaded Poland, he said he was responding to Polish aggression on the German border, when he invaded Soivet Russia he said he was freeing the world of Bolshevism and international Jewry.

            The US sees itself is a reluctant policeman of the world, Blair has said over and over that he was doing the ‘right thing’ by invading Iraq. Gaddafi and Assad attempt to justify the slaughter of their respective populations by saying they are fighting internal terrorism (Gaddafi even claimed Al Qaeda was involved), the Israeli’s despite having one of the most advanced militaries in the world and unknown numbers of nuclear weapons see the Palestinians as a threat to their security and so on and on down through history.

            On the US domestically Seinbeck said:

            “Socialism never took root in America because the poor see themselves not as an exploited proletariat, but as temporarily embarrassed millionaires”

            Although Robert Reich commented on this recently saying:

            “‎20 yrs ago most Americans didn’t want to raise taxes on rich; they expected to be rich someday. Now 72% favor. They’ve given up hope”

            Looks like the dream factory is also suffering the effects of the recession, watch out for the double dip. We can only hope more people will be awakened to the naked financial theft that is taking place and attempt to restore democracy in some shape or form, through activism, protest and electing the right people but it looks tough especially with the recent Supreme Court Ruling in the US as pointed out in the post above, which allows unrestricted corporate funding of elections, this surely secures the nomination of ‘corporate candidates’.

  36. Tull McAdoo

    Step aside here folk’s and make way for the latest gobshite with a vested interest……yes I am sure you have guessed already ….It’s our very own Comical Danny…….

    • Pedro Nunez

      Ya Noonan’s face shows he believes it!
      ‘four legs good, two legs bad…..’ take it away Napeolean and Snowball…

    • adamabyss

      hahaha plonkers

    • “We should not discount the significant progress made towards reviving our economic fortunes. The economy has stabilised and begun to grow again. Fiscal targets are being met and the next challenge is sustainable growth and getting people back to work.”

      Can we gather all these DebtPayers or PRAVDA-RTE Comical Debt Danny’s and send them to Dail Eireann to send out a note of confidence of us all?

      Pretty soon they’ll be the only one’s left on the island and maybe Danny can star in a I Am Legend 11


    A good suggestion there from Morgan Kelly to bring relief to homeowners on the end of a mortgage facing 50% plus negative equity, rising interest rates, charges, taxes, loss of earnings, maybe unemployment in the great go slow our economy is experiencing.

    Morgan was attacked last week by Ronald Quinlan Sunday Indo Aug 14 on his figures.

    Quinlan: “…2005 and 2006…In those two years, a total of 7,435 properties with values of €635,000 were sold. And while that number is also substantial, it does not tally with Prof Kelly’s estimate of 10,000 mortgages on properties valued between €1m and €2m.”

    Quinlan: “Professor Kelly shocked his audience at the Kilkenny Arts Festival last weekend with predictions of additional banking losses of several billion euro, which he said would come from 10,000 mortgages given out “at the peak of the bubble” to “lawyers, solicitors and estate agents” to purchase properties of €1m to €2m.

    Quinlan ridiculously goes and researches the number of
    professionals practicing in the above professions and finds out the figure doesn’t come to 10,000 and on he goes with cock eyed propaganda attacking Kelly typical of rubbish journalism.

    Its embarrassing here to have to defend the fact that MK was 100% probably using the list not in a definitive sense but in an illustrative sense. Obviously professionals outside that short list bought property….maybe even university lecturers or even populist economists:)

    Then there is the figure difference between €635,000 and €1 – €2m. Lets apply a bit of logic here. Lets assume above €635,000 80% were in the range €1 – €2m while 10% were beneath and 10% above that range. There is no significant difference between what MK and Quinlan are saying.

    Then there’s the figure of 7,435, a figure Quinlan apparently has garnered from Revenue statistics, approx 75% of MK’s 10,000 figure. Quinlan is not familiar with the ruse widespread at the time of remortgaging your house to use the proceeds to purchase another property. Nor is Quinlan familiar with the widespread practice of investment in property abroad using similar devices. Again there is substantial agreement between MK and Quinlan, approx 25% of disagreement.

    I take MK’s figures against Quinlan’s blinkered one’s anyday!

    But here, folks, is the nub of the matter. Both Quinlan and MK are hobbled by the secrecy of the banks. surely now that we now own them, we can get the data and the precise stats to put them on the table to settle all arguments!

    We’ve had nothing but lies from the banks!

    We need to follow MK’s brave stand against the banks and expose the rot from the financial sector that has taken over politics; and infected journalism with plain and ignorant propaganda seeking to pull the wool over all our Titanic eyes.

    • If not evident from above, the point re stamp duty is not everyone who bought property paid stamp duty on it!

      • I know our banks have smothered our Garda CAB inquiry into the banks with possibly millions of files and documents.

        Could we just examine in forensic detail one loan granted to one developer? Perhaps the Glass Bottle site, the one with Seanie sitting on DDB and Anglo at the same time.

        Take statements from everyone who worked on the loan and move on to The B&B loans?

        What’s the hold up? Or maybe a more pertinent question would be, what’s the coverup?

  38. CitizenWhy

    Latest trick by Goldman Sachs to continue ruling the world:

    A Goldman Sachs executive changed his name so he could take a job with Rep. Issa (R-CA) in order to gut any financial reform legislation using the Congressman’s committee as the vehicle. But it’s still not clear what pay-off/bribe the Congressman got.

  39. Fascinating article here:

    dark pools, gun slingers, day traders, owning the house and the ending of the uptick rule

    “But the biggest advantage these venues have is that they “see” what orders are coming into them. And, regardless of whether or not it’s legal, they trade against them and take advantage of knowing the specifics of other pending orders that can be used to backstop losses. I’ll get to that is a moment.”

    “The New Abnormal

    Wall Street finally got what it wanted on July 6, 2007, when the Securities and Exchange Commission (SEC) did away with the “uptick rule.” As of that day, it was no longer necessary to wait for a stock to go up in price before short-selling it. Without the uptick rule, short-sellers can short any stock, at any price, at any time.

    There’s plenty more that Wall Street has done to ratchet up volatility. It has flooded the world with derivatives that aren’t regulated, and blessed high-frequency trading. It also introduced innumerable securities and financial instruments that it can arbitrage for healthy profits against unsuspecting institutions and the public.

    Not surprisingly, market volatility is now a tradable product. And now that Wall Street has taken us down this path of entrenched, institutionalized volatility, there’s no going back.

    Don’t expect any respite from what’s going on in the markets now. On the surface, it’s all about Europe, debt, downgrades, earnings, fundamentals and technicals. But underneath all those prime movers are the real shakers, the greasy palms of the markets hidden hands.

    Abnormal is the new “normal.”

    Progress of civilisation itself could depend on how we clean up these financial opium Houses! Unfortunately, Merkel, Sarkozy and Obama the blind, can’t see the dangers posed above:-)

  40. dwalsh

    re: fair wages and market forces

    Setting general parameters and minimal social standards through a variety of mechanisms such as employment legislation and social protection etc are surely necessary in a civilised society and need not interfere with the operation of markets.

    Surely also markets ought to serve society and civilisation…not the other way round.

    We are on the eve of the possible collapse of the global financial system and economy. If this happens there will be not merely be a loss of savings and assets but a loss of lives on a catastrophic level.

    This situation was not brought about by overpaid minimum wage workers or plumbers; not even by overpaid civil servants. It was brought about by unconstrained market forces. The market itself has failed society and civilisation.

    As many commentators here have pointed out the real cause of this crisis is speculation or gambling in the form of derivatives; which are completely unregulated. I don’t need to rehearse the story or the figures here.

    I suggest that the market as it is constituted today cannot fix this crisis because the market is the crisis.

  41. adamabyss

    I consistently like Paul Mason’s work for Newsnight -

  42. Regulated Out of Existence

    Our children are regulated out of existence by the Government .What did children do in the 50,s and 60,s ? In those times there was very little money and there were No Regulations to talk about that hindered their choice to do any kind of work.So on a typical old housing estate as it was then some started doing the following :

    Join the local milkman doing the daily mild rounds and get a few pence ; and

    Collect old pallets and resell them to a warehouse; and

    Collect waste paper and sell it to a recycle it ; and

    Grow a small garden and sell to the local shops or hotel lettuce , onions and rhubarb; and

    Sell old toys on the road side; and

    Make your own money with bottle tops and dobbers ( marbles) and play games to win and end up as the owner of the largest bottle top bank or marble bank in your area;

    Visit the local farmers in the country and pick vegitable and fruit; and

    Go to the local market and be obliging to any old lady to carry their messages ( or pluck her chicken ) ; and

    Write to some newspaper kids column that might publish your ‘interesting story’ and be paid a few bob; and

    Collect Stamps and Penpals ;

    Join the civil defence and army reserve ;

    Sell second hand comics etc etc

    Today there are ;

    No milkmen , no pallets or buyers ,no waste papers to find or someone to sell to ,no gardens big enough ,no durable toys ,no interest in community bottle tops or dobbers , the old ladis in the markets are too poor now and have little messages , no kids paying colums in national press anymore , Stamps and Penpals have been replaced by the internet , there is a stop to recruiting in civil defence and army reserve and there is no market for second hand comics as it replace by the free internet .

  43. Commodity Control

    In Ireland one of the largest and earliest commodities produced was Flour .It was commenced and developed by The Quakers and their flour factories flourished mainly in Munster and Leinster and Belfast .Thes great people had simple religious beliefs and their bonds and trusts formed the basic for great things that did follow subsequently.Many of the family names were :

    Shackletons of Carlow & Dublin
    Spicers of Navan
    Odlums of Naas
    Budds of Craigue
    Browns of Waterford
    Davis of Enniscorthy
    Bannatynes of Limerick
    Reeves of Newbridge
    Andrews of Belfast
    Alexander of Belfast
    Going of Cahir
    Webbs of Mallow
    Brown & Crosthwait of Bagenalstown
    Mc Glynn of Kilrush
    Ranks of Limerick
    Hallinan of Fermoy
    Johnston Mooney & O Brien Dublin
    Shaws of Lurgan
    Gibbens of Dublin
    Malcomson of Tipperary
    Max & Blain of Waterford
    Davis & Strangman of Waterford

    Pimms , Goodbodys , Grubb and Haughtons

    All the above were direct contributors to the formation of the first Irish Banks in Ireland ( not The State as known now ) and Stock Brokers ( eg Goodbodys) .It was the Nalpoleonic wars that caused the end of the flour milling in Munster and now only a handful remain in the country.

    During their time of stewardship of the commodity trade and stock broking, and banking their puritan principles were practiced and enforced .It has only been in the emerging years of The State from the 70′s that Irish Politicians and Cronyism took a path of distruction and corruption that caused the new poverty of the young people of Ireland .

  44. The ‘I am ‘ Mantra

    Today society seems to only care for their own personal self indulgence and how much they can get .There is no longer any agreed common belief order of authority to follow between the people that matter ie Irish Men and Women .All that has been distroyed in the recent process of events in our lives and what has been perceived to have been amassed in self indulgence and personal self worth has no longer any currency to follow as it is now socially and economically debased .Thus the coin ‘I am ‘ is a Big Hole and becomming bigger .

    The inverse , ‘ I serve’ must now come to play in our lives either enforced or voluntarily and it is the determination of which path this takes will decide our economic society tomorrow and how it functions on this isle.

    If it is enforced our ability ‘to think’ will be gone forever .

    Were we to chose as did the 1916 leaders in ‘The Proclamation of a Republic ‘ then we restore our lives again in accordance with what that proclamation will say .

    A Second Republic is called for NOW .

  45. Colin

    I find it very remarkable that a few Communist/Socialist posters are spreading their propaganda and liberal elite nonsense on the website of a Capitalist and Free Market Economist.

  46. Dorothy Jones

    Oooh..I read that yesterday Moody’s wrote to the branches of Germany’s Sparkasse bank indicating that they wished to amend the basis of their credit rating, the requirement is for direct contracts between the rating agency with the public agencies ‘behind’ the Sparkassen…..using strong-arm tactics re continued allocation of triple AAA to obtain new contracts….hmmm

  47. george

    David have you read Mihcael Moore’s letter to his fellow compatriots? Have you seen his documentary last week “American Capitalism a Love Story”?
    He talks about a simple principle: the “Common Good”, and how people at the top has to lead by example. And although he doesn’t talk about it, during Roosevelt’s presidency in the USA and almost up to the mid sixties, the difference between the average industrial salary, and the top CEO of Banks and Corporations, and Universities Graduates, was only about five times. You go and check it for yourself, and correct me if I’m wrong.
    And then You go and explain it to the Elite of this Republic, to the Politicians and the Top Civil Servants, to the Tax Exiles, to the Professionals, even to the young graduates, that they feel they have a god given right to earn ten, twenty, or thirty times more, than the others.
    In my neighbourhood, the Doctor, gets according from the figures published by the Health Board, half a million Euro a year, to look after patients with Medical Cards. And on top of it they get fifty euro a go from private patients, even if the only thing they do, is to write you a prescription for tablets in twenty seconds. And if you don’t have the money to pay them, you are as good as dead…so much for vocation ah!
    You go and explain it to the members of TUI that are not happy with three month holydays and other annual breaks, and a very well paid and secure jobs, that oppose continuous evaluation of their pupils. And then we have the lawyers, the dentists, and others, and the County Council, charging more than anyone will charge you even in Berlin.
    So in the name of the Common Good we the “Indignados of Ireland and the World”, have to demand first from our Politicians and Government that they show some courage (I was going to use other five-letter word), to tell the Banks that some debt forgiveness has to be given to the people, that are paying for home loans that don’t match with the the actual value of their properties, because it is their responsibility to do so.
    Ones this fundamental first step is done and we have a plain field, the Government without changing the actual currency can restore the “real value” of it by reducing the Salaries, and the bill that we have to pay for Public Services and Social Welfare. We have to make the Economy more competitive, with salaries and a tax system that for example can relate to the one in Germany.
    After that I think it is time to talk not only about a Minimum Wage but a Maximum Wage as well, and to reduce the gap between the two, so we can recreate for Society the same conditions that made possible the Golden Era of American Capitalism, where rich people paid in taxes, as Warren Buffet suggested last week, “their fair share”. And where the Citizens are not at the mercy of Big Corporations, Banks, Elites and an inept Political class.

    • +++1

      Absolutely excellent post!

      These people are suffering from bloated self esteem and should look up the word

      S E R V E

      It’s actually quite a privilege!

      • george

        Lets hope people’s attitudes will improve. Because first we have an immediate economic crisis in our hands, but also we have a population time bomb, a cultural crisis, and an enormous environmental problem as well. And the world can’t carryon with old political and religious attitudes if we really want to change things before Nature do it for us. Thanks!

    • BrianC

      Yes superb post.

      Some are more equal than others and I paraphrase Stepen Kenny post refering to James Callaghan former British PM ‘there are no scapegoats in the fact that the true problem resides in paying ourselves more than we are worth’.

      • george

        “in paying ourselves more than we are worth” we create poverty for the majority, and we feed the myth of perpetual economic growth as a solution, whose only real meaning, is the paying of interests to investors who don’t use money for anything productive and beneficial, but for pure mercenary and speculative purposes.

  48. Hope this might help someone have a better day

    Human consciousness is evolving quickly thanks to an unlimited amount of information and
    the realisation that the concepts of authority and societal rules have proven to be a facade
    which long shielded us from the immoral, criminal and incompetent minds of politicians, bankers, professionals and academics. The elites are exposed for what they are and everyone can see that
    they are wearing no clothes

    People know that they have been fooled collectively and those who are conscious and on a quest
    for personal enlightenment are examining their own part in the movie called life and looking for enlightenment rather than being a slave to the ego which demands it’s daily diet of identity, materialism and social standing. All that is meaningless because it is not you

    We can’t change the world but we can change ourselves individually and how we perceive the world. This is where the trouble starts because we are prisoners of our minds and mistake our minds to be our true selves. Thinking is not the answer because thinking is chaotic and often destructive. I
    know this is true because I am reading a book where the author describes a state of mind he reached
    at the age of 29

    Woke up during the night in a state of terror and with a deep loathing of the world. Thing he hated the most was his own existence. Continuous suffering and personal misery made him wish he was dead

    Reached the point where his consciousness said enough is enough and he lets go. Dumps the concepts of ego, money, job, property and all that crap and strips away all those onion layers he thought were, but which are in fact, not the real you

    The mind stops dead, you are fully conscious and you become the real you living in the here and now. Enlightenment is the end of suffering as per the words of the Buddah

    That magic feeling you get when looking at a sunset can be reacreated at any time of the day if you let your thinking stop and spend a few minutes in awareness of your being. I do it and it works and it had nothing to do with religion as I see religion as an intellectual handicap anyhow and never trusted the bastards. Now people who knew me years ago get confused because they wonder what I changed to turn myself from someone who was pretty unhappy into someone who appears to be happy every day

    This is why I can now laugh at the antics of what is happening in the world and the divine comedy of life in Ireland

    You can read about the concept of living in the here and now by reading the book The Power Of Now by Eckhart Tolle. Amazon link:

    • adamabyss

      Very useful and interesting, thanks Pauldiv. I have added that book to my Wish List.

    • george

      Excellent book indeed especially for when one feels a little bit down and dejected. Something that in this social crisis we are going through, many people will experience.
      And much more enjoyable and healthier, than going to the GP for antidepressants. Something that in the long run, not only negatively affects the individual but Society in general.
      I’m not in favour of this “attitude” of solving personal or psychological problems with tablets.

      • Colin

        Absolutely agree 100% with you here. Pills are bad. People feeling down or full of despair need to know that the best way to deal with it is to face up to it and beat it. Basically, you gotta re-connect with your inner self and know yourself, develop mindfulness and become content with what you have.

        • george

          Colin I feel pity for persons that think that a tablet can make their problems go away.
          “Infantilised” people are easy prey for unscrupulous Banks, Corporation, Professionals and Politicians. The future looks bright…people is “connecting” !!!

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