June 4, 2012

Why Germany needs Europe

Posted in Sunday Business Post · 237 comments ·
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I was only hit once with a leather in school. But it was worth it. Years ago, Pelé came to Ireland and trained in the grounds of our school. Four of us bunked off French to see the great man and get an autograph. What would you do: Pelé or French?

Apparently, this was a ‘mortaller’ and, for our punishment, a small, thick leather strap was produced from the drawer and a clattering was administered. But it didn’t matter because we had seen Pelé. Tragically for my throbbing hand, three days later, I went on a soccer trip with Dalkey Utd to Germany, and who was on the plane? Pelé. So I needn’t have suffered at all.

That week in Germany, I went to my first big football match to see Schalke 04. The fans were brilliant, full of colour, and Schalke at the time had the great Klaus Fischer – the master of the bicycle kick – playing up front for them. Many is the bruised arm was suffered on our road trying to emulate Fischer’s bicycle kick. Concrete isn’t the best surface for this one.

But since then, I have always had fond memories of the Bundesliga and German football. Two weeks ago, I was in Germany to watch football and got the chance to assess the great barometer of all things football and economics: the views of the local taxi driver.

When you travel to Germany and chat to the average bloke, it is surprising just how little he knows about what is going on on the periphery of Europe. Not that he should really care. The trip to Munich confirmed what we all know happens when things are going well. You take in your immediate environment and regard it as normal. After all, most of us trade with each other, buying and selling, so if all around you is going well, why worry?

The taxi driver couldn’t have been more courteous. We chatted about the upcoming game – Bayern v Chelsea – and then the state of the place. He told me that unemployment in Bavaria was less than 3 per cent, business was booming and life was good. I asked him about the rest of Europe and he shrugged his shoulders and said: “We don’t feel the crisis here.” He paused and then said: “Maybe there are a few more immigrants, but we don’t feel any problem here.”

This is the truth. Germany is booming. Unemployment is the lowest in a generation, exports to the rest of the world are booming, wages are rising, and so is property price inflation in the big cities of Hamburg, Frankfurt and Munich. In Hamburg last year, prices of apartments rose by 14 per cent and were up 12 per cent in Munich, year-on-year, in January.

In Cologne, prices of existing apartments rose 9 per cent. In the latest poll, 86 per cent of Germans said they were happy with their standard of living.
This week, that feelgood factor will have been reinforced by the news that people are now prepared to lend Germany money for nothing. The German government can now borrow at 0 per cent. This is because billions of euro are flowing right now out of the periphery, particularly from Spain to Germany, because investors and the average citizen believe there is a risk that Spain will leave the euro. In the first three months of this year, €97 billion has left the country. That is nearly 10 per cent of GDP, and that was before the crisis amplified in the past few weeks.

But interestingly, this meant that the Germans felt this in lower interest rates, allowing them to borrow more cheaply if they want to.

On this issue, my taxi driver took up the conversation and explained to me that German football, like the German economy, was better managed than any other. Unlike British teams, for example, German teams are not allowed go into debt. As we all know, football and how it is played, managed and followed tells you a lot about the culture of any country. The pair of us, like bar-room pseuds, warmed to the topic.

What he told me was fascinating.

First, all decisions of the club are taken by the members of the club, who hold 50 per cent plus 1 voting bloc. These are fans and other members of the club, not determined by the size of your wallet.

Every year, each club has to submit a set of financial documents to make sure the club is viable, is not in debt – which is banned – and is not over-spending.

Clubs must be financially accountable. A full set of documents has to be submitted each year before the licence to play is given, covering assets, receivables, cash and bank balances, liabilities and provisions, current overdraft facilities, loan commitments, projected and current profit/loss statements, and cash inflows and outflows.

These are judged by the German football league, and all clubs have to inject money into a fund to make sure that, if a club, even after all this scrutiny, does get into difficulty, it won’t go bust. No Bundesliga club has experienced an insolvency since the league’s creation in 1963 (there have been 92 in the top five divisions of English football since 1992).

Ticket prices are kept low, at around €10 a game. The fans feel real ownership, which was evident with the Bayern fans we met. The Bundesliga is the best attended of the big football leagues in Germany, with an average attendance of 45,726 in 2010/11 – 10,000 more than the Premiership.

This, he told me, was the secret to German success: good management and an aversion to debt. Not like the free-spending, profligate Chelsea.

He had a point, but only if German clubs want to play only against themselves. Without the free-spending, debt-financed English clubs or Spanish giants like Real Madrid or Barcelona, Bayern would have no one to play against. There would be no Champions League final in Munich and I wouldn’t be in his cab. Without the mental spending of the likes of Real, the Germans would have no competition to play in and no big names to play against.

Similarly, without the periphery buying their goods, the Germans would have no one to play economics with. Every creditor needs a debtor, every budget surplus needs a deficit to finance, every current account surplus needs a current account deficit. Similarly, every Bayern Munich needs a Chelsea, otherwise they can content themselves with trips to Leverkusen and Dortmund.
Similarly, if the Germans are not prepared to budge in Europe and think they can, in their own words, “do as much as necessary” (but actually do “as little as possible”) to save the system, then the system will crash.

Economics is not about morality lessons, but about trade and commerce. The creditor needs the debtor in the same way Bayern needs Chelsea, and Germany needs the rest of Europe. This demands flexibility in the way the euro crisis is now tackled. Otherwise the euro will collapse in chaos and Germany will have no one to play with.

Come to a state-of-the-nation debate entitled, “Is Ireland now a province of Germany?”, chaired with Teutonic efficiency by Barry Murphy (aka Gunter) at www.dalkeybookfestival.org on June 16.


  1. Deco

    The article has been amusing.

    1. Of course the Germans are oblivious to what is going on, in the periphery. In 2005 Irish people were completely oblivious to the modesty then existing in Germany. This was when we had soccer stars selling apartments in Portugal. And when mna na hEireann were finding cheap clothes in Manhattan (probably the most expensive real estate location on the planet). People who are content with their lot get oblivious to anything that might dampen the mood a bit.

    2. German real estate is bubbling. So is real estate in Scandinavia. Soon it will be overvalued. Which will be another problem for German banks.

    The ECB are at fault. The ECB’s low interest rates are pushing up German urban real estate prices. This will cause a misallocation of resources. And it will undo Germany. You can be certain of it !!!

    3. The Germans do have a well organized soccer team. But in the past four years Spain have been better than them. And Spain can hardly boast that it is as well run as either it’s national soccer team or it’s club teams.

    4. Incidentally Greece shocked everybody to win the Euro Championship the other year. And nobody gave them any credit for it, because they did not have any players who were sponsored by big name sports gear manufacturers. Incidentally, the Greeks suceeded because they did not have any egos to manage (unlike the French and the Portuguese, and eh..the Germans). Tells you a lot about teamwork.

    5. I get the sense from that Taxi driver that the Germans might getting ready for some sort of series of mistakes. Once people start gloating they start making errors of judgement. We did a lot of it between 2002 and 2007, at the high point of the mania in this country.

    6. Do the Germans know that this bailout republic of ours pays our soccer manager more than they pay theirs ? Or that we have fans who spent 400,000 Euro following a team that never won a trophy ? Or that this country, skint as it is, will send 20000 fans to blow a small fortune on a team that will play bravely and earnestly, but get outplayed by small tricks from first team regulars from Barcelona and Inter Milan ?

    • Deco

      Concerning Irish fans and money…..

      http://www.independent.ie/sport/soccer/euro-2012/irish-news/fan-spends-400000-to-watch-ireland-team-3125215.html

      If he does not drink/smoke/gamble and he spent this much following the team…how much have the rest of the fan base spent following the team ?

      Anyway he has the memories. But maybe if we were better savers in this country, we might be better prepared for the current debacle we have gotten ourselves into collectively. It is people who saved in the mad decade that kept the banking system solvent from 2007 onwards.

      • Tony

        Ah Deco, it sounds a little bit like you feel we should all live like the Germans. Save, save , save and keep the money for a one bedroomed retirement flat in the centre of a crowded city (so we’re close to the shops and won’t need a car).
        Many people believe life is for living and following ones passion. This doesn’t seem to be true of Germans who work for lower wages, don’t buy homes and are scared sh*tless to spend their money in case that satanic inflation may take hold. (By the way is it fair to say that Germans have a nasty irrational fear of inflation in the way we Irish have about having to own our own homes?)

        I’m using the stereotype here. I’ve never been to Germany, so my post is fairly tongue in cheek. But the Germans I’ve met over the years seemed to have a serious aversion to spending their cash. You know the type I mean, calculators out as the bill arrives in the restaurant and comparing the prices of cans of soft drinks to buy the cheapest as opposed to the one they actually want.

        I can’t see how living the austere German way of life from generation to generation is really all that attractive. Arent we as a race supposed to grow and achieve from one generation to the next? Is it not natural for each generation to try to succeed or grow more than the previous one? I predict the German “habit” of playing safe will haunt them in years to come.

        • bonbon

          Never heard of Weimar 1923? Look it up – it is the model for Draghi’s dreams and rants right now. And Geithner wants Weimar II!

          See the wiki – a lovely picture of kids building wals with paper, trolleys of paper for a coffee.

        • Deco

          I think that we should simply be better planners. And that starts with financial planning.

          But it extends to lots of things. We might be a happier society as a result. Here’s hoping, anyway…

        • C21living

          You lost me at ‘we as a race’.

    • Deco

      Europe probably needs Spain to win Euro 2012. Simply because they are going through the hardest time currently, and to give the Spanish something to inspire them to battle through the crisis.

    • Colin

      I’d like to share some views with the people of Ireland. The best seat to watch a game is the one closest to the TV. Attending matches had its merit back in the day when football matches rarely made the TV schedules. But now, you have all manner of matches broadcast. Modern broadcasting gives you a superior viewing experience. You can now see if the ball crossed the goalline a few minutes later on a replay, whereas those at the match are left in the dark. In short, attending a match offers a poorer view of the action.

      I was considering travelling to Poland, but it worked out too expensive (hoteliers have gazumped prices in a captive market), and with no guarantee of a match ticket, I’d be a hostage to fortune out there, so I’m returning home, to watch it in the pubs of my home town and do my (patriotic) bit for the local economy.

    • Excellent post. Pin sharp and very funny

      It made me think that there might soon come a day when the Germans might be laughing on the other side of their faces

      • molly

        Hi when I used to work in the late 70s ,the work shop foreman use to tell us over the tea break how great the German workers where,
        The story goes the German workers who where digging the road would arrive in the early morning in there Mercedes ,change out of there suits into there work clothes and do the work.
        At the days end they would shower and change back into the suit and go home like office workers.
        True ,or false.?i don’t know.

        • Sure I know a farmer Seamus who digs peat all day and lives in a big white house with those fancy mororised gates and drives a big black BMW. He looks sure important

          Anyway he leaves at 6 and when on the bog at 7 forty miles aways he changes into dungarees and a john wayne checkit shirt and steel toecapped boots

          He works all morning in all weathers and rests at lunch to devour buttermilk from a glass milk bottle topped with silver paper and an elastic band

          ‘Ye can’t bait the oul buttermilk’ he says to his trusty companions. ‘Reminds me of when I was a lad’

          All his life Seamus just wanted to dig peat and enjoy working with his oul companions. He never really wanted to be Celtic Tiger man and just wanted to go home. Simple

  2. Adam Byrne

    Ireland haven’t got a snowball’s chance in hell.

    Kevin Doyle is a unique striker in world football insofar as he has no clue how to score goals. An utter donkey.

  3. Deco

    Now Cyprus needs a bailout.

    http://www.telegraph.co.uk/finance/financialcrisis/9309588/Spanish-rescue-draws-closer-as-Cyprus-buckles.html

    And Spain is making signals that it will gladly accept one, if it is provided. (despite all the pretension that it did not need one in the first place)…

  4. nt

    1. You can be certain that a lot of Germans are aware of the situation in the periphery of Europe.

    2. You shouldnt trust all the governmentally faked statistics about employment, rising wages etc. in Germany. There are huge amounts of people that cannot make a living from their daily work anymore.

    3. Sure, every creditor needs a debtor, but it is in the creditors interest that the debtor can pay back his debts. It is the debtors fault if he doesnt understand the game of trade and commerce and sells himself whatever he can to earn the money to pay his debts.

    4. Stop grieving and playing around with your own people and sell some great products you produce to the Germans to make your money.

    • +1

      2.1
      that is something I pointed out here extensively about 15 years ago with concrete examples on the reality of Germany’s work enforcement, low wages, second slave labor market, the full time working poor, impoverished elderly, impoversihed young families, “Die Tafel” etc etc.

      I warned explicitly that the goal is to implement a labor market Germany style in the periphery as well and exactly that is EPP’s goal.

      It is a coup of Neo Feudalists, pretending to run after markets, and playing the victim with statements like “there is no other way”, where in fact they are well on their way to finalize this social engineering plan.

      • about 1.5 years ago of course. LOL

      • bonbon

        The Teuro started 12 years ago, Schroeder’s Neue Mitte (Blair’s New Labour translated from Mendelson’s manifesto) for German consumption.

        !-euro jobs, Icg AG’s swindle, nothing else than RAD – Reichsarbeitsdienst all over again.

        Add in Hartz IV, Agenda 2010 and now Merkel turning off 17 nuclear reactors that powered Germany.

        And that’s only the tip of the iceberg!

    • “You shouldnt trust all the governmentally faked statistics about employment, rising wages etc.”

      In Any country. Including this one

    • molly

      Remember we use to make Toyota in Dublin ,maybe we could start making Toyota cars again and the Germans might buy them.

      • Would they trust us to get it right and deliver quality on time every time

        It takes discipline and common sense to run a manufacturing operation. That’s all. No sleepng in, hangovers or any of that crack and there has to be a ready market with paying customers who pay on time

        Irish workers are more capable than people give them credit for and they are easily motivated as long as management treats them with respect. That is what I found found when I was at Motorola. Problem was the management was weak and too busy playing politics

        If people doing the work had decent pay packets every week they would work like hell for managers who know what they are doing and who are smart enough to grasp that it works both ways

        Irish manufacturing could recover because we have a fine capacity to work together. Anyone opening a manufacturing opeartion here would have a good and loyal workforce

        At least they would do if I had any say in it

        • molly

          Yes the Irish can and do work ,but there has to be fair play at the days end.
          Do you think that under the present government that workers will receive FairPlay I don’t .the joe soap worker will be on low money and the way this country is heading the cost of living will rise ,but the joe soap worker will stand a good chance of no pay rise in line because you will be told no money in the kitty or you are lucky to have a job,
          When in fact the lucky ones will be the government and there cronies protected all the way while we sit back and vote in more of the same.
          Somebody does you a bad turn shame on them ,somebody does it again the shame is on me,that’s why I feel we are beening made fools out of.
          The days of FairPlay are being destroyed because we need to fund the greedy,the corrupt ,the have it all merchants.
          Who will take take and would not think twice before they stab you in the back.

          • That is spot on. There is no fair play and never has been

            I can’t remember being contented as an umble employee. Ever. I felt like a whore and it was degrading. I’d rather be in rags and free and living on seaweed. I don’t need their fecking system

            I’d rather be poor, free and struggling and keep my freedom to sit and do nothing all day if I wish. There is healing in doing feck all and it is allowed. Believe it. Reassesment and all that. I know many people hate people like me with a passion. One day their pain will be over thank god

            I broke out young and was lucky to withstand the programming. Most didn’t. I was the guy who questioned the system and was made to turn my back on the class for two months staring out the window. It was heaven not to be a slave. I liked it and it taught me a lot. 1500 Lines were to be submitted in total and they were, eventually, but I never wrote one of them. I was against the system and fucken hated it. All my classmate wrote the lines for me and the Irish bitch knew so but was happy to save face. She was f f f found out. I disike her still

            I am not some hippy but I refuse to let go of the past. My Sligo Granny got me very young and made me Irish. She told the truth and it wasn’t nice but it was good enough

            The economy, shares and bonds my arse. In 1970 she would put on three horses and usually always win. Whe she won well the house was full of song on a monday night. Typical

            Still. Just some stories from an old guy that people laugh at these days. You sold out and it isn’t ever coming back

            I pity you all

          • molly

            In the late 1960s I was destroyed my brain was warped by the men in black in school who where savages ,most of the ones who thought me should have been locked up in dundrum.
            Add all the past to now and is it any wonder we ended up partly where we are,because when you are moulded as a child it carrys on in you for the rest of your life in some shape or form.DAVID you got the leather in school ,that’s mild to the treatment I got at the hands of the men in black,it’s funny when you mention that because I bought a leather on eBay ,why I bought it I don’t now maybe the past never leaves you .

  5. ross81

    Actually it’d be great if our Euro-American zombie banks were like English football clubs, cos at least they don’t get a blank govt cheque when they go bust.

  6. Right on David,

    Am curious how you think trade with China, and how a slow-down or even reversal of Chinese middle-class growth will change things for the Germans.

    Most people in Germany have very little sense of the real situation in place like Ireland, and this is the case right across society. As Deco says, people see what’s right in front of them, little else. Most people think things are fine for Germany, and see no threat from the collapse of Ireland or Greece, only countries with the begging bowl out.

    • molly

      People see what’s right in front of them,we there must be a lot of blind people living in this country.who vote for more of the same in FF FG LAB.

  7. Rory

    Greece won the Euro’s because they were managed by a German, Otto Rehhagel. (Oops, eh, maybe we should let them manage lots of other stuff too …)

    • Deco

      Well, maybe an agreeable compromise would be to have better quality brains running Ireland Inc. for a start.

      A good place to start would be to get rid of a lot of the idiots running the IBEC member companies, who rely of state assistance to keep them afloat….For instance the top three layers in the banking sector. London and New York have plenty capable Irish managers fit to run the Irish banks. Their only crime is that they never went to Trinners or Belfield, and were not fit for mixing with the clowns running this country.

      The professional establishment seem to be very are blocking any would be competitors.

  8. Reality Check

    “Without the free-spending, debt-financed English clubs or Spanish giants like Real Madrid or Barcelona, Bayern would have no one to play against. There would be no Champions League final in Munich and I wouldn’t be in his cab. Without the mental spending of the likes of Real, the Germans would have no competition to play in and no big names to play against”.

    Ah no David, they’d just pay the players less and live with in their means. The champions league doesn’t have some sort of stipulation in its rules that forces the huge spending & debt upon English & Spanish clubs.
    The Italian league was THE league in the 80′s look at it now!
    That’s where too much debt and over spending on players wages gets you eventually!

  9. Colin

    David,

    I’m surprised you didn’t mention the new stadium where the match took place – named after an insurance group. It cost €340m to build, it is symmetrical and good looking and holds 70,000, so it is clearly functional.

    Did it not remind you of another recently built stadium, built in the heart of D4, named after another insurance group? It cost €410m to build, it is absurdly assymmetrical, to such an extent it is difficult for rugby place kickers to make out the goal posts from the surrounding steelwork supporting the roof. It is lob sided, so is not good looking, holds only 52,000 and is of questionable functionality, with some seats having restricted views.

    • bonbon

      You mean Allianz (Arroganz) staium near Munich (I heard more like 700 million). And protestors blocked a high speed Transrapid airport shuttle just nearby!

      Football mentality (too much head-the ball)!

    • bonbon

      And do not forget Allianz wants to build the ultimate Solar power Desertec in Morocco to “help” Merkel turning off nuclear power.

      Football and Solar Power – banksters love it.

    • bonbon

      And do not forget Allianz wants to build the ultimate Solar power Desertec in Morocco to “help” Merkel turn off nuclear power.

      Football and Solar Power – banksters love it.

    • Deco

      The said stadium in D4, has a nick name.

      The Dole Bowl.

      The said sponsor laid people off, and moved their jobs operations to low cost location. However it still found 40 Million on appearing superficially patriotic.

  10. thirdeye

    In the present Airtricity League of Ireland aka that ALL Airtricity League of Ireland clubs from Athlone Town to Wexford Youths MUST have their financial accounts approved by Irish revenue and tax and audited BEFORE the season kicks off to avoid a club going out of business during the football season.This is the only common denominator with German football.UEFA wants to bring the German system into play across the various leagues in Europe but the UK,Italian,Spanish,French are against such proposal as may see many of the “leading european clubs” AC,MiLAN,Barcelona,Real Madrid,PSG,Man Utd,Man City,Chelsea being unable to compete if the new rules of financial fair play due to the large debts these clubs carry rules in enforced except in rebuild of stadia or paying for establishment of new youth training facilities are the exception of UEFA financial fair play rules.So solvent clubs like Arsenal,Shamrock Rovers,St Etienne and lesser well known european clubs due to their financial diligence partaking in future champions league still may not take palace as UEFA is know to be corrupt at all levels and any financial impediments of UEFA and its money making golden goose the Champions League as Clubs in Europe formed the G-14 of Europe’s biggest clubs to set up an alternative Champions league outside of UEFA control has been mooted int he past may come to pass.

    • No one wants to read what looks like an wall of text

      Space it out and provide some pace and breathing space with structured paragraphs

      Writing for the web 101

      I didn’t read it and nor will many

      • joe hack

        I read it, but I don’t get how a football can solve our economy,

        maybe it is just that I have no idea how economies work,

        but still it’s worth reading,

        some people are just lazy have to be spoon fed,

        I think they need Ladybird Book on economics,

        do Ladybird do a book on economics,

        maybe I could send a copy to Noonan?

        • We help each other

          I don’t know much about economics but am learning through self teaching. I’ve never read an economics book in my life and have no intentiomn of doing so

          I am not intersted in academics and what they have to say. It was academics who unleashed the nightmare fantasies of Free Market ideology in the Economics Department at the University of CHicago in the 1950s

          The long term results of their psychpathic visions are all too plain to see and they have been totally rejected by governments in South America. It’s over

          • Tony Brogan

            Hi Pauldiv

            “Free Market ideology in the Economics Department at the University of CHicago in the 1950s”

            I don’t think we have had free markets in 100 years and certainly not since the WW11. We have had managed markets and crony capitalism which is now approaching a form of fascism.
            The US has used the Working Group on financial markets since President Reagan. It now interferes in the markets on a daily basis.
            Government insiders get the contacts and corruption reigns.
            Not fair comment on “free”.All markets are manipulated.
            cheers
            T

  11. craxihuber

    Germany’s exports into the Eurozone have gone DOWN, not up since the inception of the Euro.
    This fact is conveniently ignored by nearly everyone in these discussions.
    So how is the Euro so great for Germany then?

    • Dear Craxihuber

      The latest info I have is that the Eurozone accounts for 42% of German trade. So its pretty important for them.

      The big change in German trade is China as Germany exports a significant amount of industrial machinary to China and as China is experiencing an investment led boom, not conusmer led this is good for Germany.The Euro keeps its exchange rate down.

      All the best

      D

    • EMMETTOR

      If a country has an export boom it’s currency gains value, making it’s exports less competitive, which puts the brakes on it’s export boom. In any properly-functioning system this operates as a normal check/balance. In the insane world of the Monetary Union, the weaker performance of other economies within the union keep the Euro from putting the brakes on Germany’s export boom. Of course, the very idea that there are several different economies within a Monetary Union shows how arseways the whole thing is, IMHO.

  12. China needs the EU 27, its biggest trading partner and it can only hope for the the best.

    Germany is the key player in Europe; it can do several things but it cannot itself create sustainable growth in countries such as Spain, Greece or Ireland.

    It takes two to tango.

    The growth crisis is not new. It was masked by property and related credit booms but pre-2008 is not coming back.

    The unemployment rate in Spain is the highest in the Eurozone at 24.3%; the record was 24.5% in 1994. It was 21% in 1997 and 8% in 2007 after a massive construction boom.

    Italy’s jobless rate was higher in 1996 than it is today. Ireland added no jobs in the exporting sectors in the past decade.

    Eurozone countries like Italy, Spain and Greece have had trade deficits with Germany since at least 1980 — 20 years before the euro launch.

    The EU partially funded a significant improvement in Greek infrastructure but Romania, Bulgaria and Turkey beats it hands down in attracting foreign investment.

    Greece has to take the lead in modernising its economy.

    Marco Annunziata, an Italian economist, says that implausible as it sounds, Italian voters have put up with an average youth unemployment rate of 30% for the last 40 years; Spanish voters with a rate of 32%. Italy experienced “strong” economic growth during 1994-2000, with GDP rising at an annual average of 2%. During this boom period, the youth unemployment rate still averaged 33%. In other words, one young person in three was unemployed when the economy was at its strongest. The rate never dropped below 20%.

    Spain’s economy grew at an average of 3.6% between 1995 and 2007. During this impressive run, the youth unemployment rate averaged 28%; it was below 20% for just three years, with a “best performance” of 18% in 2006.

    The global economy is no longer Western Europe, US, Canada and Japan.

    Countries like Ireland and France are living beyond their means.

    I don’t wish to have people earning less but that is already the case in Ireland for some workers who don’t even have a basic occupational pension. The State not only guarantees others permanent employment but gives them the best benefits in the bankrupt economy.

    The Wall Street Journal reports that Harley Gannon, sole breadwinner for a family of five in Union City, Michigan, got an assembly job 14 months ago at an International Automotive Components (IAC) plant in Mendon, Michigan, that pays $9.67 per hour, less than $21,000 per year and less than the Irish minimum hourly wage that has averaged about $11.30 in recent times. Gannon’s pay is down sharply from the $15 per hour he earned repairing electronic games at a Chuck E. Cheese outlet before losing that job six years ago. “Our hourly wage structure is competitive in the industry,” an IAC spokesman said.
    32 years old, who has a community college degree in electronics, hopes to be promoted to higher-paying maintenance work at IAC. For now, he is watching his pennies. Just filling the tank in his 1996 Ford Windstar eats up about a third of his take-home pay, he says. The family rents a three-bedroom home for $625 a month and relies on food stamps to stretch his paycheck. “My two older kids have just had birthdays, and I haven’t been able to buy them presents yet,” he says.

    For some manufacturers, the key has been encouraging older workers to retire and hiring.

    The Journal said that despite their near-death experiences of recent years, the Big Three US auto makers still pay some of the highest wages in manufacturing, but the average is declining. General Motors Co., Ford Motor Co. and Chrysler Group LLC have a mix of veteran workers making around $29 to $33 an hour in base pay; recent hires earn $16 to $19, according to the Center for Automotive Research, an Ann Arbor, Michigan, research group.

    “Workers really understand the global economy,” says Cindy Estrada, a 43-year-old vice president of the United Auto Workers. The rank and file know they need to be competitive on wages, she says. But some companies are pushing pay down so far – - $10 or $11 an hour with monthly health care contributions of as much as $400 a month – - that workers can’t afford to buy the cars they build, she adds.

    General Electric Co. (GE)- – America’s biggest manufacturing group – - announced plans to move production of electric water heaters to Louisville, Kentucky, from Mexico after US unions agreed to a $13-an-hour starting wage for new hires, $8 to $10 or more an hour below the previous contract.

    • Welcome back Michael,

      The re-industrialisation of the USA is well and truly underway. Its one of the big under-reported stories of the past two years.

      Best
      D

      • C21living

        The de-industrialization of the USA and Europe, due to peak oil production and increasing oil, gas and other energy prices, has only just begun.

        To say energy price hikes will ‘offset’ any and all re-industrialization efforts would be a total understatement.

        The metatrend is toward de-industialization and the collapse of the suburban lifestyle of car-dependency and commuting.

        • They don’t need the commuter who lives in the suburbs. Those people have been supplanted with private contractors and troubleshooters prepared to fly anywhere in the morning on huge bucks

          Suburbia is for losers living on a pipe dream. They should read The Wasteland by T.S Elliot and see the truth. Even more disturbing would be The Iceman Cometh. Brr. That is a real wake up call to anyone who procrastinates. Brrr

          The dosh is in private contracting and being politically connected while appearing neutral when it suits you

          I don’t have the stomach for it personally thanks christ but the people who sold you the yes vote might have

          ‘From the Makers Of’ was on the cover of every album from a very famous rock group. Name that group

          If you get it in one I will buy you plenty of beer if we ever we meet for a dram

          Goodnight Irish Bros

      • “The re-industrialisation of the USA is well and truly underway”. People would be fools to take this statement at face value and take comfort from it

        Hopeless optimism and wishful thinking straight out of the Sky News edutainment manual is the reason we lost our bearings over the last 15 years. FGS

        Do yourself a favour. Re-read The Shock Doctrine. Especially the chapters on Iraq and the blurring of the lines between states and corporations. Intelligent people will see straight through this blatent propaganda, laziness, ingornace or whatever the hell you call it

        Who is cutting your checks I wonder to make you deliver such nonsense. Last fridays job figures from America tell it otherwise. More people are getting poorer and less people are getting richer

        It seems as though you will grab at anything to deliver what sounds like good news. I believe that “The re-industrialisation of the USA” is true but in a way that you can can’t comprehend. Or maybe your Friednamite insticts are giving you palipations and yet another excuse to keep the discredited free market ideology alive. Forget it. It’s well and truly over. Those guys blew it in Iraq and are seen as total losers who would have led us into hell to make a buck

        You are walking down a dark alley wearing shades in a strange part of Glasgow on a dark night and can’t even smell the danger

        We are all in the jungle now and there is no reason to think that the old ignorant freewheeling days are ever coming back. This time round there is a price to be paid and paid it will be

      • EMMETTOR

        I’ll believe that when I buy an iPhone made in the USA.

    • Deco

      The Hollowing out of America. Walmart have contributed to the problem.

      Have an uncle in the US who is retired. Says he would rather starve than enter into Walmart.

      There are documentaries available concerning Walmart.

    • WB young Hennigan. Don’t be a stranger.

    • Great stuff

      Sounds like they are racing to the bottom

    • Thank you for the facts, without which a lot of people assume that unemployment rates in Italy and Spain have gone from what we consider normal to excessive when in reality they have always been abnormally high relative to other western developed states save for unprecedented credit inflated economic activity. The big factor seldom acknowledged though is that 25% unemployment in Spain is not the same as if that were the number in Ireland. Spain like Italy has a huge “off books” economy as you know and they’re are many recorded as unemployed who are receiving a regular income sufficient to sustain themselves. Clearly Spain and Italy should be allowed enjoy the freedom and bear the consequences of large off books economies and the Euro is a clearly failed concept, without which the credit fueled charade could not have occured.

  13. joe hack

    David only got the leather once; he must have been a goody two shoes;

    I received “six of the best” on several occasion with a far harsher instrument of torture that of the leather.

    The bamboo cane was cheaper to buy and replace when in split or in some cases when it was stolen from the unchristian brothers, I guess I can own up to that now.

    I lived in the fiscal periphery of Dublin and I think the leather was beyond the means of my school or could it be that my schools budget was equal to that of the fiscal core of Dublin, at least in the torture department.

    The periphery needed to kept in check or it was of less value, what if the periphery got a third level education and realised how capitalism worked who would feed and service the core of Dublin.

    My hands only got the pleasure of meeting the Leather once, when one of the lay teachers purchased his own or maybe he got a transfer from the core and took his sexy implement of repression with him.

    It was an amazing piece of leather craft; it had layers of leather of different thicknesses which were bound together with a tough solid stitch.

    The leather my hand had the pleasure of meeting had one of its stitches unravelled and I had an impulse to fix the weapon of my torture.

    I was in awe of its craftsmanship, I felt important because someone had spent so much time and effort crafting the weapon that was to keep me in place.

    I wondered what was in there minds as I stretched out one of my own hands to meet my repression.

    I was imaging them testing their leather art form on inanimate objects and the various craftsmen comparing each other’s works of art while discussing ways of improving its effectiveness over lunch.

    I imagined if some of the artisans sons got the core beaten of them with their fathers works of art and if their sons would follow in their fathers trade like that of the soldiers send out to murdered not by their enemy buy rather by the core itself.

    I started to giggle which is a bizarre thing that happens when under this type of stress and of which I have seen others do but I don’t know what thoughts were going through their minds, for my insolence I got another six of the best.

    I showed my pain to please my controller and got back to correcting the red marks on my copy book while using my inkwell and my wore out ink-nib, and of course lots of blotting paper just in case I got another opportunity to view the leather craftsmanship.

    I did not get to go to the German core on a school trip but I did get to go to Dublin core, that is, I got to go to Bullock harbour and do some fishing but even the core of Dublin would not let me have the one fish that bit my line.

    I was allowed a taste of the core not unlike some of the peoples of third world countries who taste the periphery/core that I live in, like that of the fist drag of a cigarette you become addicted, and if you carry the water for our team you too may get closer to the core.

    Democracy is a wonderful thing at the core; come join us, here is a little taste; With some fear thrown in, the core only needs enough people at or near the centre to get democracy to work for the centre of the core.

    ‘The Germans are not aware how hard others have it’, the PIGS are the same but the PIGS too forgot that there was a periphery out there while they were indulging in their assent to the inner core.

    • Colin

      joe hack,

      If you are sharp enough, you can adjust your behaviour accordingly to avoid getting the leather in the future.

      Definition of insanity: doing the same thing over and over again and expecting different results.

      • joe hack

        Colin, you made me “lol”,

        I did not adjust my behaviour my boldness (which some of my teachers admired ) along with that of millions of others continued and the insane people put down their corporal punishment weapons’ in 1982 nearly 200 years after the polish had, but it’s still used in the USA along with the death penalty for the poor the masters of Capitalism.

        My boldness now awaits a sane opportunity.

        Homer Simpson-Ouch! Duh! Ouch! Duh! Ouch! Duh! Ouch! – This is what the bankers and Capitalism does; its corporation punishment that is needed.

  14. joe hack

    I don’t have the bus fare to get to Dalkey as I live in a periphery within a periphery.

    I would have to borrow at high interest rates to be able to afford the transport costs to Dalkey and that would put me further into debt and as has been said it’s a snowball effect.

    The snowball smashing starts here and with Teutonic efficacy so if Dalkey is Germany, I am Ireland

    • Hi Joe Hack,

      Fishing in Bullock, not much of that any more with the seals. On that football trip, the centre half on the senior team was none other than the great Paul Mc Grath. Its funny how these things come back to you years later.

      As for the leather, the thing was a thick yoke as well. Very sore, but worth it in the circumstances.

      Best
      David

      • Julia

        Violence breeds violence David. It’s never worth it. But I’m glad you got to meet Pele.

      • joe hack

        Yes, I think the seals are been starved out of the seas (maybe we could blame the Spanish? But that would not be the full story) and are coming in scavenging for fish scraps from anglers bate.

        It’s the same in other harbours they even have names for the seals in Kilmore Quay, one is called “Blind Jake” blinded by fishing hooks I was told, or a prop ,they sleep on the slip at night.

        I was out at Bullock harbour recently and I seen a couple of young lads fishing with beer cans by their side, they are giving some excuses for closing off fishing on the piers in Dun Laoghaire I hope that don’t keep happing.

        I don’t know if kids today get up to some of the things we might have got up to but I hope they have a boldness that they may need in the future.

        I got to meet the Dublin team when they brought the Sam Maguire in to my class, I think we the rest the day of, no slaps.

        Bryan Cullen looked about Ten feet tall, Dublin 1-12 Kerry 1-11 1977 but I would not have risked the Rattan for it, Pele?

        I think the “slaps” hurts us redheads more, the skin is more sensate but the “core” is hard to penetrate, hard as nails, “Kerry for your holidays, Dublin for the Cup” thanks for the bringing me back, having a fish platter for dinner, product Of the EU, not Bullock?
        Enough that now back criticizing you when needed…that is the inner core talking now.

  15. wills

    The euro system is under attack by City of London.

    The financier oligopolists running their currency wars out of the Anglo / American axis used weapons of mass destruction CDS’s to undermine the euro.

    The Germans got on with building an economy the old way, the real way the unit of energy labour for unit of productivity way.

    Long live the euro and down with the City of London and the lunatics that are running things there presently in an age of casino banking bonuses and narcissism and lazy arses.

    • bonbon

      Well, yes, cannibalism is a matter of taste. The masters of the Euro eat their offspring.

      Charming table manners, what?

      • wills

        Me thinks thou protest too much.

        The Germans built an economy out of hard work and innovation and chutzpah.

        Meanwhile PIIGs and USA and UK insiders went pare caught mad cow disease and tried to get rich on back of property bubble and did to the untold destruction of their countries and future wealth.

        And now hat do they do, point he finger at the Germans who carried on doing work and business like one is expected to do under the guidance of a moral code.

        • bonbon

          Right – the DM was the worlds most successfull currence ever in history, so pray tell why wouls anyone throw such away with not a single vote on Lisbon, Maastricht?

          Well Kohl did, when Mitterand and Maggie threatened after re-unification – and our very own London man Conor Cruise piped up ( a bit like Enda ), shouting 4th Reich!

          Remember any of this?

      • bonbon

        Never mind Bildeberg, this goes deeper. Population reduction is the theme, mass murder.

        Openly discussed at Bilderberg, but as I have repeatedly posted here, by some very “respectable gentlemenn”.

    • +1

      Someone is awake

      The City of London runs the whole shooting match and always will do.

      • bonbon

        So if and now the “shooting match” implodes as it is doing by the squillion Euro right at this moment, will they start shooting? Thermonuclear 450kt apiece, kind of ends that old game, what?

        Game’s up!

        • It is all about the squillion euro theft

          They are making tons of bombs and tons of security products

          The American, Israeli and British governements are impovershing their people by stripping the state bare and transferring as much profit making opportunities as possible into private hands. Guess what. You pay for it. Mug

          You are all being fucked over royally and still deny it

  16. Dorothy Jones

    All about the Germans isn’t it?

    I have to say, I disagree with the observation that the German people do not understand what is going on in peripheral; Europe….desperate stuff. But hey…what would I know..I’ve only been working in Germany/for German companies for the last 25 years.

    No doubt, in contrast, the very informed Irish people will be flocking in droves to no. 37 Merrion Square to get a signed copy of ‘Contemporary German-Irish Cultural relations in a European Perspectve, Exploring Issues in Culrural Policy and Practice’. This will be launched in ca. 2 weeks’ time and provides the perfect opportunity for the well-informed Irish to demonstrate their sophisticated approach to the lesser informed Deutscher Buerger…….hmmm……c’mon now….

    Anyway; Barry Murphy who apparantly is to chair the ‘State of the Nation’ debate at the Dalkey Book Festival 120616 with ‘teutonic efficiency’ will surely have red-lined the tome in anticipation of some well-researched questions. :)

    Best D

    • Jordan

      Good point Dorothy.

      I’ve been living in Germany for almost a year and from my experience people are quite well informed.

      Naturally the average person on the street is unaware of some of the details in Ireland but likewise how much do we know about the lives of Greek or Portuguese people. At the very least German people appear to be keen to hear about Ireland’s scenario and the opinions of Irish people.

      The German people tend to be very politically aware and their horizons seem appear broad. David paints a picture of rosy ignorance which is simply not the case.

      Having said all of that, I believe the press here in Germany tends to approach the argument from a moral perspective. There is a reluctance amongst most German people to reward profligate nations. Ireland, I have to say, has received nothing but respect in the many many conversations I’ve had with people here.

  17. Tony Brogan

    David,
    Why are we talking about soccer and peripheral events. why are we not discussing the central event.
    Why are we not discussing the real result of the adoption of the policy of the European Stabilization fund.
    What has Ireland voted for and what have the European nations already agreed to.

    Simply put, all countries have agreed to have their financial affairs run by the European central bank. All the countries have given away their sovereignty to a group of faceless bureaucrats. The ECB can now demand that a so called sovereign county MUST loan more money to the fund. That is, on demand, no debate. There is no limit on how much can be demanded.

    Here is a table of commitments but if a country defaults it appears the balance of countries must make up the shortfall.
    You will see that Irelands contribution per capita is the second highest behind Luxembourg

    Country Initial contributions Enlarged contributions
    (see enlargement section)
    Guarantee Commitments (EUR) Millions Percentage € per capita
    [citation needed] Guarantee Commitments (EUR) Millions Percentage
    Austria €12,241.43 2.78% €1,464.86 €21,639.19 2.7750%
    Belgium €15,292.18 3.48% €1,423.71 €27,031.99 3.4666%
    Cyprus €863.09 0.20% €1,076.68 €1,525.68 0.1957%
    Estonia €1,994.86 0.2558%
    Finland €7,905.20 1.80% €1,484.51 €13,974.03 1.7920%
    France €89,657.45 20.38% €1,398.60 €158,487.53 20.3246%
    Germany €119,390.07 27.13% €1,454.87 €211,045.90 27.0647%
    Greece €12,387.70 2.82% €1,099.90 €21,897.74 2.8082%
    Ireland €7,002.40 1.59% €1,549.97 €12,378.15 1.5874%
    Italy €78,784.72 17.91% €1,311.10 €139,267.81 17.8598%
    Luxembourg €1,101.39 0.25% €2,239.95 €1,946.94 0.2497%
    Malta €398.44 0.09% €965.65 €704.33 0.0903%
    Netherlands €25,143.58 5.71% €1,525.60 €44,446.32 5.6998%
    Portugal €11,035.38 2.51% €1,037.96 €19,507.26 2.5016%
    Slovakia €4,371.54 0.99% €807.89 €7,727.57 0.9910%
    Slovenia €2,072.92 0.47% €1,009.51 €3,664.30 0.4699%
    Spain €52,352.51 11.90% €1,141.75 €92,543.56 11.8679%
    Eurozone (16) without Estonia (°) €440,000.00 100% €1,339.02
    Eurozone (17) with Estonia €779,783.14 100%

    (° Estonia entered the eurozone on 1 January 2011, i.e. after the creation of the European Financial Stability Facility in 2010). Greece, Ireland and Portugal are “stepping out guarantors”, except where they have liabilities before getting that status. Estonia is a stepping out guarantor with respect to liabilities before it joined the eurozone.

    Seems to me this is a Faustian Bargain. All the Euro countries, including Germany, have sold their soul to the Faustian banksters . Current security for future enslavement.

    Surely these are the issues to be discussed and presented to the people. $700 Billion is just the start.

    • No offence Tony but no one is going to wade through all that text. A link to an online slideshow would be the job. People are tired and simply can’t be bothered any more

      We are tired of words and numbers as they never make sense because the numbers are always doctored and the words are meaningless

      Good Infographics is just the thing for Economists because infographics is a great way to express trends and comparisons over a given period of time

      Information Graphics
      http://en.wikipedia.org/wiki/Information_graphics

      • bonbon

        Somehow these missed the trend leading up to the present crisis. Intrinsic fault of statistical methods.

        People are way beyond that kind of incompetence by now, and smell a rat.

        It is hidden between the data points on those lurid graphs.

        • There are graphs and there are graphs. Like keeping two sets of books

        • I believe is it incompetence by deliberate design. The more confusion the more the flyboys and private contractors cream off the state. It is a well practised shock and awe tactic and the Irish credit Union debacle is a good example

          They were screwed for something like 25 million by a bunch of cowboys from London. Anyone with any street smarts would have blew the whistle but these people didn’t. They signed checks for millions without even seeing a single computer terminal. Unreal and surreal. Question. Who was the insider who let this happen. I’d like to see him banged up in Mountjoy for a very long time

          It is a gold mine when you know the rules and who is controlling who and who is cutting the checks

          They are overcomplicating something that should be simple

          We put man on the moon 43 years ago but don’t have the intelligence to run a sane economy for 4 million people. Who is kidding who here exactly?

          Can you see it?

      • Tony Brogan

        Hi Pauldiv

        Look above . There are three paragraphs plus the tables
        When I realized it looked as bad as it did when posted there is no way to remove it!!
        so I posted below a link to it saying it is better read there.
        Still point taken on monosylabic presentations.

        One of these days I will visit you and we will have a chin wag and fix the problems within 5 minutes. Commonsense but nobody listens

    • EMMETTOR

      +1 These are the big issues. We are reaching the end of our short-lived experiment with “Liberal Democracy”. The EU, with more than 300 million people can never function as a democracy, simple as that. It will be an authoritarian bureaucracy, it has been designed as such. It will enslave our future generations, unless they take up arms against it, to win back the freedoms that we are voting away. Hopefully it will fail utterly and be consigned to the dustbin of history. Hopefully.

  18. Tony Brogan

    http://republicbroadcasting.org/index.php?cmd=news.article&articleID=3590

    If the people express their preference by the ballot box will the authorities resort to violence to maintain the status quo. Is this the same as getting the strap?

  19. I’m glad to see David pointing out that every debtor has it’s creditor because analysing our creditor/debtor relationship can lead to the source of the debt crisis.

    When you think about it every Government, every business and every household all have bank accounts and all our money is in the banks, apart from the little bit of cash in the economy which currently stands at around 3% of the total of all out bank balances.

    And yet, the same Governments, same businesses and same households are all in debt to the banks. The entire money supply is already in the banks and yet, we still owe the entire money supply to the banks. How could this be?

    The reason for this is that banks create money, in the form of accounting entries, through lending and in doing so they create a matching debt to every euro they create. This is obviously the root cause of the debt crisis.

    Reducing our debts is not a solution either since when processing a loan repayment banks cancel the money out of existence along with the debt.

    This is the essence of how our economy runs and it’s a terrible way to attempt to run an economy.

    At the moment Germans are confident enough to organise loans from their banks and in doing so they are confident to create new euros. However this is an unsustainable system and one which cannot go on for much longer, even in Germany.

    One solution to the debt crisis involves allowing each country’s Central Bank to create bank-account money for their Governments as well as cash. This money would crucially be debt-free as source.

    • rebean

      Do ya think we could print a few bales of fifties up in Dublin there or where ever the printers are housed.I mean without the Germans figuring out we were doing it. We could drive a few artics over to the bondholders to pay them back so to speak. We could ask them for a write-down for cash. That would be a sight to see. I often wonder do they ever count all the cash in circulation ? They wouldnt know if there was an extra couple of billion in circulation surely ?

      • bonbon

        See below for “squillion” – the new basic unit of bailout paper. Not sure how much it would weigh, but then digital money weighs nothing, except on the shoulders of monetarists.

        • Would a two trillion euro print work? Undoubtably inflation would ensue, the key I assume would be to imposes as much of a loss as possible on banks just shy of insolvency, pay the rest of the debt from the print. 300 Billion to Spain, 500 Billion to Italy, 40 Billion to Ireland, 60 to Portugal (numbers may be inaccurate but for the used for the purpose of example). The rest as a lender of last resort for EU member states. Thus removing private debt from public debt. I have no access to the numbers but is the view that this would end up in a rapid depletion of savings and unmanageable savings, does anyone know how much the Euro would devalue by the printing of two trillion of them? When you print your own currency you can never be in debt, of course you can debase your currency into worthless state in so doing. Views?

          • Adam Byrne

            My simplistic view is, it’s worth a shot. I especially like the ‘removing private debt from public debt’ bit. Who knows what the inflationary effects would be though? Would it be possible to accurately predict? There could be chaos. On the other hand it might be minor. At this stage anything would be an improvement on the incompetent, corrupt and criminal mismanagement thus far seen.

          • The Americans did 3 trillion in QE as loans to private banks. UK has done considerable, I am not aware of all the data required to compile a projection. It would be really great to see someone do that based on real data. Possibly Constantin Gurdgiev he is usually on top of macro data.

          • “It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something”. It seemed to work out for Roosevelt of course it is easy to pontificate on potential economic solutions as if often the case here under the supposed assumption that the crisis exists in a political vacuum.

          • bonbon

            We will carry this theme to the next thread. Spain’s bailout is certainly 1 trillian Euros, salami slice revealed.
            The derivative overhang simply can never be paid. Any attempt to do so will doom us all.

            See the post on the TBTF 6 banks derivative holdings.

    • Hi businesslunch.ie,

      I’m not trying to be pedantic but printing money is becoming an old fashioned idea and you couldn’t physically print two trillion euro. If you printed it in €100 notes, for example, and stacked one on top of the other it would look like a tower 1000km high while a plane flies at 9km.

      Such a sum can easily be typed into a computer though and, under the current system, money can only be typed into a computer with a corresponding debt. This is my main point. A huge portion of out money supply is created with a corresponding debt and it never used to be, we used to deal with far more cash.

      I would propose typing some money into the Government’s bank account and not recording a corresponding debt.

      This wouldn’t be as inflationary as you might think because most people would use this new money to repay debts to their banks. And when you repay a debt to a bank the money no longer exists. This is my other main point. When processing a repayment the bank lowers your current account, lowers your debt to them, and the money is canceled out of existence.

  20. Tull McAdoo

    The more things change, the more they stay the same (plus ça change, plus c’est la même chose)

    A proverb making the observation that, turbulent changes do not affect reality on a deeper level other than to cement the status quo.
    The proverb is of French origin and was used by the French novelist Alphonse Karr (1808-90). It also appears in George Bernard Shaw’s ‘Revolutionist’s Handbook’ (1903).

    “Nama, the NTMA and the Central Bank — guardians of Ireland’s finances — are bastions of secrecy, hiding activities from their ultimate owners. The state-owned banks, Anglo Irish, AIB and Irish Life & Permanent, are similar fortresses, still enjoying the same Masonic culture as they did when they were in the private sector”

    Welcome to Albania.

    - Shane Ross

    http://www.independent.ie/opinion/columnists/shane-ross/shane-ross-bank-on-emily-to-lift-the-veil-3126351.html

  21. Tull McAdoo

    I think there is no point in Ireland starting to point the finger at Germany and blaming them for the state that this country is in, now that we appear to have moved on from pointing the finger at the bloody Lehman Brothers (ala Bertie).

    I am also getting tired of hearing that Spoofer Gilmore telling us all about how “market confidence will be restored” and how we will be able to borrow from the markets in 214 as he likes to abbreviate it.

    I have spent most of my working life dealing with the same markets and I can tell Happy Gilmore that the markets would be far more impressed with him if he was to clear out the shower of bastards that bankrupted the country and at least deliver on some of the pre-election promises that he and his party were shouting about……..

    The problem with Gilmore and his Labour Party was that they started to believe their own rhetoric during the last election campaign when they were suggesting that Gilmore could become Taoiseach. Gilmore started to take on this statesman’s persona after that boost to his ego, and has confused himself and the general public with what he thinks are profound insights, but which we recognise as Gombeen spoofery……enough said….

    If Happy Gilmore had any Socialist leanings he would have pulled up Headmaster Noonan for insulting the very country that gave us democracy, philosophy and all that is good in life.

    It gives me great pleasure to re-post this little musical piece , from one of my favourite cultures on this planet, so it’s take it away Jakub and your dancing friends and Goodnight Ireland. Sleep well.

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

    • rebean

      Dont worry Labour will be wiped out by Sinn Fein next time out. Labour know it and thats why they are getting nervous. The mechanics of the Lisbon NO vote point to a real disillusionment with Labour.I can understand Fine Gael taking the present course of action in Govt but I cannot understand labour pandering to every Fine Gael wish. What have Labour ever done for their voters? Higher energy prices, Lower welfare rates, Higher fuel and food prices? When have labour made an effort for the poorer people ? Sinn Fein are proactive in their representation of their electorate and thats good politics whether you like them or not.

      • Tull McAdoo

        People on this forum, including David himself have quoted Einstein when he said:
        “Insanity: doing the same thing over and over again and expecting different results.”

        The point that I have been banging on about for a number of years now is:

        “Insanity: continuing to borrow vast sums of money (billions) from wherever and giving it to the same people who have squandered the previous sums (that they were entrusted with)and expecting them not to squander the freshly borrowed capital”

        Simple as people……That’s the problem in a nutshell…….

        • Colin

          There’s another definition of insanity: Stashing thousands of Euros into your curtains and forgetting about it and dumping the curtains in the local charity shop.

          There’s a lot of this insanity business happening these days.

      • joe hack

        I believe they are the only party that are representing those that voted for them, is this a first for Ireland.

        It will be interesting to see the makeup of the next government, I am not a fan of the party system which is not a requirement of our constitution Ó’Cuiv was good example of its failure and I am sure there were many more party members on the No side who kept their mouths shut.

  22. bonbon

    While some are heading the ball in bankster stadiums, how about a little mental exercise?

    Spain Careens Toward Squillion Euro Bailout

    June 4 (LPAC)–The following multiple choice question is submitted to loyal readers to test their attention to detail:

    QUESTION: The amount of bad debt on the books of Spanish banks, which has to be bailed out to avoid formal bankruptcy, is:
    A) 300 billion euros
    B) 375 billlion euros
    C) 475 billion euros
    D) 10 squillion euros
    E) All of the above

    The correct answer is letter E). Last Friday, Nomura said it was 300 billion; on Saturday, UBS said 375 billion; on Monday, the {Financial Times} reported 475 billion; and 10 squillion euros is a fair estimate of where this is all heading.
    Predictably, rumors are swirling across financial markets today about whether or not the Spanish government would be forced by Germany to go to the EFSF for their 10 squillion bailout (and submit to the “Greece treatment”), or if instead Germany’s Merkel would be bludgeoned by Obama, Hollande and Italy’s Monti–who jointly called her on Wednesday on this matter–into finally acquiescing to a direct hyperinflationary bailout of the {banks} by the EFSF, rather than lending the money to the Spanish government as a pass through.

    Either way, the eurozone system is gone.

  23. bonbon

    As well as the “firepower” FAZ and Handelsblatt, @Dorothy, here is the most important from Die Welt :

    Germany’s Exit Could Save the Euro, Economists Say

    June 4–An article in the German daily {Die Welt} with the headline, “Return to the D-Mark, Germany’s Exit from Euro: Seductive, But…” reported Clyde Prestowitz, president of the U.S. Economic Strategy Institute, and Jon Prout, former financial department head of the Crédit Commercial de France bank, as saying that the Eurozone cannot and will not recover, as long as Germany stays in. A German exit from the Eurozone would help, though, they say.

    The article then argues that an exit would be costly, giving the usual revaluation arguments, but also concludes that staying in the Eurozone would be costly as well. The article is illustrated with a picture of the pre-1992 hundred-mark note with the portrait of Clara Schumann on it–and which also resembles a widely-circulated 2011 BueSo mass leaflet, with the same Schumann portrait, and a call by Helga Zepp-LaRouche for Germany to exit the euro.

  24. rebean

    There will be a slowdown in Germany but it will not resemble the car crash that was allowed to manifest itself in this country.The Germans are good managers in Govt.They micromanage everything. Fair play to them. The Irish civil service have no exposure to proper management.Theres no proper training. They do all the degrees but they have no experience in the real world.Germany has a first class second level training and school program. The second level system in this country is run by people who went into teaching from college and never worked in a company or gained much experience outside the school system. The school system here serves those working in it not those learning in it.If you want proof Ask yourself why is there no programming courses in schools? Third level in Germany is employment focused and their research degrees are more relevant. In Ireland its just another extension for a college to get more funding ( alot of the time)

    • Rebean,

      I agree with you. My articles about Germany are always written with a sense of admiration and a bit of frustration too. Your points re our civil service are spot on.

      Best
      D

      • rebean

        Do you think we will need a second bailout David ? When will the funding run out from the present one ? You have probably written about these questions, Maybe you could direct me to these articles.I believe it could be a deciding factor in the whole debacle. Regards Rebean

        • Rebean

          I don’t think we will need a second bailout because i believe that the system will be over by then. We will be out of the Euro because it won’t exist and the entire discussion will be academic.

          Best
          David

          • Tony Brogan

            TPTB will print(digitize) as much money as needed to maintain the system as long as they can.
            QE to infinity.
            Hyperinflation is baked in the pie.
            World currencies will adopt a gold backed or partially gold backed system as the US dollar is shoved aside. See China and Russia, India too. Iran will sell oil for gold and escape the SWIFT sanctions.
            Ireland needs to adopt a silver currency that the people can use to save with. Inflation protected money.
            Those that do not want to wait for the state to acquiece can buy silver coin on the world market.
            Pay the tax and within 12 months it will not matter as silver will be up 50%.That’s Jacks for openers as Bill Murphy says!Silver will be multiples of its current price. It is in 12 years gone from 4 dollars to 30 or 7.5 times. It will do it again and faster as the fiat currencies head for their intrinsic value of zero just as all fiat paper currencies have in the past.
            Infinity for QE leads to infinity for the silver price. any value you pick for the silver price will be correct.
            For starters I’ll take 30 x 7.5 = $225 per ounce within 5 years.
            I have put what little money I have where my mouth is So I am believer!!
            BTW for gold to satisfy the US debt is 15,000,000,000,000 devided by 8.2 metic tonnes (of gold allegedly held), devided by 32,150.7466 troy ounces= about 57 million dollars an ounce. Already infinity! Seems cheap to me buying it at 1600 an ounce.

    • coldblow

      Re Civil Service (presumably the much larger Public Service is what is meant?) I wonder if the issue of management goes deeper and across the private sector too. Certainly Simon Caulkin, former Management Editor of the Observer (until he was sacked a few years ago) thinks so.

      http://www.simoncaulkin.com/blog/

      Search for his view on incentive schemes and shared services for a start.

  25. Sweet As

    David, Slightly off topic and more related to your previous article but this needs to be addressed. The importance of Ireland’s Diaspora is highlighted by you and Mr Kenny as very important. Why then are we prevented from voting on decisions that have forced us to leave? Especially as we are part of Europe and one of our Masters France has this privilege for its Diaspora. Considering the small turnout I would say 500,000 frustrated people would have had something to say?

    The Economist (@TheEconomist)
    03/06/2012 12:29
    Around a dozen countries, like France, give non-resident citizens their own advocates in parliament econ.st/K4951v

    http://www.economist.com/node/21556222?fsrc=scn/tw/te/ar/returningofficers

    • Dear Sweetas,

      I have been advocating that since a book I wrote “The Generation Game” in 2007. Very hard to get the local chieftans to go for this as it loosens their local stranglehold on votes. But we keep trying.

      Best
      D

  26. gizzy

    There has being a lot of comment about the Germans and what they do. It is of course very relevant.

    But what do we do. We only follow only follow others agendas. We cannot set our own. We will do cut and slash budgets and austerity because the troika set that agends. We cannot restructure our governemnt or civil service because no external party is setting that agends.

    We fight to maintain the 12.5% corporation tax and refuse to countenance a financial services tax because large business interests are setting that agenda. But we allow domestic small businesses to die daily and even as they are closing we pursue them for an unfair burden of rates and taxes, because nobody hss that agenda.

    Whatever the markets do, or the Germans or the US or whoever we need to get off our arses and promote some agenda. We need to start with new political party (parties). It needs to be started by someone with profile as modern politics is all fed by airtime. I would join in the morning. We cannot have a situation where Gerry Adams and Mary Lou become the alternative to the current weak office holders.

    Mike Geoghegan

    • rebean

      You are correct. The country we live in is a small country just emerging from the middle ages. You can get a job sometimes if you are friendly with someone. As far as the civil service goes its hard to get in but once you do you would need to really dirty your bib to be kicked out.You will have you pay paid in every other week and you will be on the pigs back. You will get you incremental pay increases whether you are doing the job right or not. I have never heard of anyone losing their job in the service ( thats not the foreign legion by the way). You will have all your holidays and you will even get paid for them. The Croke Park deal will ensure that your terms and conditions cannot change. The country that pays your wages may be bankrupt but no matter what you will be grand. great work if you can get it.I should of joined when I left school. I thought there might be a chance there might be opportunities in the private sector. It looks like thats on its knees

      • Adam Byrne

        On the opposite side of the coin rebean, you would be bored out of your mind for 40 years and would never really achieve anything of note. If someone wants to settle for that Theory X version of life then good for them. I’m sure David could still be in the Central Bank pushing pens if he wanted to be, but he’s out there making something of himself, as am I and many others on here so there’s no envy for the living dead in the civil service coming from this quarter.

        • rebean

          I know but the rewards are great compared to the private sector. Surely the way it should be is if you are taking risks you need to be rewarded . In Ireland you are rewarded for not taking risks you are better off for taking the safe option. Years ago it was the case that the civil service was a secure job but there were no huge perks. Now its the place to work. They seem to have too many people on the books at the minute. I wonder why?

      • coldblow

        It’s interesting to hear calls for fairness now, which is not to say that they are not well founded.

        Six years ago, ten, fifteen, house prices were going through the roof. If people didn’t borrow and buy they were being fleeced renting. Where was the groundswell of indignation about the injustice (and absurdity)?

        • Colin

          The chattering classes couldn’t help themselves, they talked about how much their house was worth at every opportunity.

          I was pissed off with the injustice of it all. But convincing people of the merits of low cost of housing back in 1998-2007 was like warning smokers of the dangers of lung cancer – they just didn’t want to know, and all you got was a smart arse response for your troubles.

          Don’t forget, thousands every year crossed over to the dark side in a heartbeat, from quietly complaining about expensive property, to loudly proclaiming the virtues of home ownership – along with the condemnation of paying a landlord rent as it was dead money. Soon, they despised those who did not buy, calling them losers and so on.

  27. The next chapter… rising from the ashes…collateral damage

    Ireland has voted would be a undeserving statement for this ridiculous event of a referendum where barely 50% of voters turned up. Ireland failed to exercise solidarity would be a better description but this is history now.

    The split of Europe is the next chapter and collateral damage can be expected and is calculated. The recent Bilderberg meeting where Minister Noonan was seen, well it is the usual food for speculation.

    What is not speculation however are the next steps in this tragedy. The very people who steer Europe since 2007 now will demand and enforce the next stage.

    It will come to no surprise to the “well informed”, motivated, politically engaged, upright and honest Irish public who the worlds largest private bank note printer is, so please take my sincere apologies for this redundant information , it is only for the rest of us who are rather less informed and voted NO to this ridiculous piece of idiocy they called the fiscal compact.

    http://www.delarue.com/

    They will have quite some business opportunities coming along their way at De La Rue.

    The EFSM/ESM is, like all the other “measures” taken before, hopelessly underdeveloped and impotent to manage this disaster.

    However, EUROPE will see a transformation this year, and then again we will see the reaction of the well informed public, they don’t complain and protest, no, they moan….

  28. abutler

    I have to give credit where it is due, an excellent article this week, that them spawned some excellent commentary. Keep it up!

    It is good to have this treaty nonsense out of the way. All it served was to heighten passions on a trivial document that will be modified in the next EU treaty document; Eurobonds coupled with closer integration. That will be the real battle.

    It has to be said all the main economic powers are using the devalue and export model in an attempt to kick start their respective economies. The Chinese manipulating their currency, the US printing dollars to beat the band and Germany exploiting the euro crisis using the devalued currency. The fact that they are engaged in the same tactics together means they are cancelling each other out in Economic growth terms except the Germans because the Euro is willing the battle of devaluing its currency, maybe at a cost of its eventual destruction!

    This is all leading to massive imbalance in the world economy with countries like China having a load of US paper dollars that they are spending like crazy before the US devalues witness the Weetabix purchase a few weeks ago plus the buying spree in Africa and Australia.

    I am curious what Germany is doing with its massive hoard of money from the booming exports? Apart from the crumbs it has contributed to the EU crisis.

    Where this all ends in anyone’s guess….

  29. Puschkin the Black and White Cat

    Problem is, there is a long way to go before Irish people get involved. I helped to canvass Skerries for No vote, people just did not care. Watching a few English lads playing soccer on the telly had more meaning to the people I spoke to. Things will get very bad before getting any better, how bad, I don’t know. Lead in the air?, starvation?, I just don’t know. Cyprus is now going down (up to 157Billion). Spain crumbling. Any “good” government would be planning for the worst, and that’s how to feed 4.4 million people. Kenny sent crying after another slapping from his German masters, (however you got to laugh). We need an agenda to follow as follow the leader will lead to disaster.

    http://www.youtube.com/watch?v=x6cW779sBF8

    • joe hack

      I was looking for an opportunity to say “Subscribe” Thanks.

      The food supply in Ireland needs close attention even though we are one of only a few countries in the world, which if cut off would be able feed ourselves but don’t think food production in Ireland is managed this way.

      However unlikely your apocalyptic thoughts might or might not be, it makes sense that there should a plan in place, hell, we may even have other nations banging at door for food.

      I hope they pay for them and that they don’t use their gunboats to rob our spuds, but imagine the fear and panic that would follow if Enda Kenny made an announcement stating that he was setting up such a plan.

      Don’t tell anyone but I am slipping off down to the supermarkets to stock up on truck loads of tined beans.

      Does anyone know if there are emergency food management plans in place in ours or any others countries, I guess the Germans might have one?

      • joe hack

        Oh we f#*#k#d I just realised that would Phil Hogan department, I defiantly getting me tined Beans.

        I hear Hogan is sharpening up is pencils to tackle those pesky farmers and their septic tanks, I guess that what they get for voting yes?

        • rebean

          Speaking about big Phil I see that anyone who has a second house in the country might be in for a big bill if they havent paid their charges. Property has become a real liability now in Ireland. God help anyone with too much of the stuff

          • Colin

            Great, the sooner the average house price descends to three times the annual salary of the average worker, the sooner the country can live within its means. I guess the average annual salary is €40k, making the average house price circa €120k.

      • Adam Byrne

        Good question, but considering the absolute lack of forethought in evidence by the present government or any other previously in this country, I would say it’s extremely unlikely.

        And even if one did exist, it would be badly managed and would be constructed for the benefit of the corrupt elite both in its planning and execution.

        • joe hack

          We need to worm our way into the core and become the elite or would us plebs become as George Orwell suggests ‘the elite’? I think answer is education and that-the elite live in fear-their security blanket is money.

          Sorry for all my typos- I keep running out of ink and Blotting paper-don’t cane me- I will do better next time- I will soon need a sub-editor if I stay here any longer

        • EMMETTOR

          Well, virtually all our government has been Fianna Fail and, as we all know, there is only one thing FF are good at, winning elections.

  30. Peter Atkinson

    Anybody who did the Beer Kellers in the 80s in Munich etc will know that they serviced many a young man’s pocket with money for the summer through college and beyond.Oh and remember the scramble to load your pockets with 5p pieces on the trip over so you could flood the vending machines with something that was worth half the value of the corresponding German coin.Ten to a room, sleeping on the floor.The only thing that has changed from the 80s is the 5p coin in the vending machine but I reckon this could be coming to vending machine near you some time soon.Watch out mein freunds.

    • Peter,

      I have just written the opening of a chapter in a new book which I am writing with exactly this 5p story and lads on our road going to Germany in the 1980s. It still makes me laugh.

      Best
      David

  31. A great read. I like it when you talk football and economics

    Everything you said is lucid but there is one point I don’t understand. You imply that Chelsea et al play in the champions league just because they have money. If English clubs were sane and run like German clubs there would still be a champions league. Football people love to test themselves against the best and have been doing so for 56 years of European competition

    Jimmy Johnstone, the little guy who tormented and embarassed Franco’s team in the Bernabau in 1967 with long meandering dribbles would have played the game for nothing. He said scoring in front of his supporters was the best feeling in the world. Please don’t forget these men and assume that football is all about money. It is not. It is about self expression and art

    I often mention the importance of honesty and integrity and German football is an example of what I mean. Football clubs in Germany are run for the people by the people and it costs €10 to see a world class side such as Bayern??? That is the way it should be! Access to live football available to everyone ensures that the working man (who made the game) can go and see his team regularly

    I respect the Germans in many ways but think they are on a hiding to nothing if they think they can make us like them. We are too free spirited and individualistic for a start and always will be

    I could imagine Beckenbauer and friends playing the Lisbon Lions. There would only have been one winner

    The Germans can teach us how to run an economy but when it comes to football we like to do things OUR way and express ourselves. If the Germans don’t like that then tough. If they start their crap we can always threaten to nutmeg Beckenbauer, twice, before passing to Jinky who will take on five of them before passing to Lennox who slips the ball into the open net past the despairing keeper. You just can’t keep us down Irish Brothers

  32. Deco

    Another bailout ?

    http://www.telegraph.co.uk/finance/financialcrisis/9312326/Spain-makes-plea-for-EU-aid-for-troubled-banks.html

    And now we see that Facebook has lost almost half it’s value, compared to it’s IPO price. Zuckerburg could do no wrong – until he got out onto the open market. The sheer media hype has exploded.

    • The layers are being stripped from the onion Brother

      When we get to the core of the matter it will all be mush

      Try and see the funny side of life

      • joe hack

        There is no core in a football, just a periphery; David might have just discovered new form of economics.

        • Well Joe. Something poetical in this. Few words inspire many thoughts. Simplicity and economy

          Where’s the legendary poets from west of the shannon river. The wise ones. Maybe our past is a dream and a fantasy that never was. No. It’s been there for 5000 years and the land of savage wolves still awaits the imaginations of those who can lose themsevles in the wilds west of the shannon. The magic never left. It was always here right under our noses. It just got temporarily interrupted for a wee while

          The country is bursting with people who have something to say. Where will they say it and will their voices be heard. We are all wired up with nowhere to go. Long gone are the nights when then lighs went down low by the fire and we used to tell stories till bedtime that would give you the creeps. It’s all gone and no one noticed it. No one cared

          What happened to the storytellers. We are losing our Irish soul and need to turn the clock back. The storytellers will return soon some day and do what they were meant to do

          Football is nothing without fans. Jock Stein

    • bonbon

      Banksters have sued him – he did not deliver. Faust?

    • EMMETTOR

      The circles get smaller, the time-frame compressed. Instead of a dot com bubble it’s a Facebook bubble, all over in a few days. Capitalism will eat itself.

    • Bamboo

      Excessive publicity in the media or in other words: useless hype. Isn’t this what the European Cup is about with the so call 400,000 Euro spending spree?

      Most recently, we had it with the Formule 1 races in Dublin last weekend. How many have felt they have been scammed by Bavaria and paid a lot for nothing really?
      Before that it was jedward and the song festival. How many have put their money on jedward based on our own national media hype?
      Well, I guess no point in mentioning property market and Facebook as this is so old at this stage.

  33. Ultimate denial is being on the dole and spending the weekend at your girlfriends house in the sticks and joking with pals back home that you like to visit your summer house of a week end

    Eternal Optimism is hoping that your pals will always like you and want to hear your stories no matter how true or imagined

    • joe hack

      Eternal Optimism, yes, I thought this blog could solve our fecal liquid mess so I started to visit this blog hopeful that I might learn a little about economics, a year later I realise that I am on a blog about football, just shows you what I know about football and economics.

      • Fair play joe. I had the same designs a few of years ago and although the site is excellent it only one of many great sites. It’s liberating that we can educate ourselves outside of the mainstrame media and the ‘education’ system even though the spooks are watching every word

        Economics is tighly wound with politics like a two headed beast. If politics didn’t matter then all economic theories would work fine in principle. It is a case of poiticians keeping dreamers in their rightful place but some Economists would say that it is the politicians who are dreaming

        Personally I think they are playing chess. The longer the game goes on the more secure and richer they get where it gets to the point where they believe they are Nero

        Meanwhile the rest of us choose between sausages and bacon. After the next couple of budgets it may transpire that it will be toss up between carrots and turnips

        It is all a case of who do you believe. The best person to have faith in in yourself

        Keep coming back

  34. SPAIN: It’s A Bank Run

    An emergency phone conference took place today. Confirmed to have taken place by one, Jim Flaherty, Minister Finance Canada.

    Participants: Central Banks and Finance Minister from

    USA, Canada, UK, Germany, France and Italy.

    Germany holds 140 billion and France 110 bn in Spanish debts.

  35. joe hack

    “Spain calls on EU for help as bond markets close in”
    irish times

  36. Adam Byrne

    David’s comment above gives an inkling that it won’t be long.

    • joe hack

      Yep, it’s odd it’s like waiting for a climax

      I am off the smokes for five days now so I won’t be able to smoke afterward. I am going to stock up on the tinned beans. Oh no does that mean we will have to listen to David saying I told you so? Well I be happy to listen to him say it, but don’t overdo it David, no one like an I told so

      • Tinned Beans, a Loaf and Block of good Cheese

        • And a couple of bottles of good strong stout or Scottish ale. That should keep a man alive and happy until a damsel takes his breath away

          • Adam Byrne

            Have you tried any of the BrewDog range Pauldiv? Delicious. I recommend the 5am Saint.

          • I’d love to adam but they are so expensive. Some of them are £30 pound a bottle. It’s the kind of thing you’d maybe buy for a brother or best mate at christmas. I love the branding and the web site and think the marketing is excellent

            The best beer avalable locally in Sligo is Duvel … Belgian and 8.5%. It’s about €3 a go but world class in every sense of the word. Three bottles and you are four sheets to the wind

            I’d love to see craft brews appear in Ireland. It would be good for tourism and the economy

            Barriers to entry is the question

          • Adam Byrne

            Yeah, Duvel is nice, drank a lot of that in Minneapolis for some reason a few years ago. You are right about three bottles being enough. You can get bottles of 5am Saint in Superquinn for €2.49. I just get one every now and then just for the taste over the summer while not studying.

          • joe hack

            can u make potin out of beans?

          • Adam Byrne

            I was in the Porterhouse the other night, there some excellent choices there, it would be good if a few more micro breweries got going, I only drink in moderation these days.

          • I’m sure it’s possible to make some sort of dacent brew from baked beans. Can’t think what you’d call it. ‘Old Farter?’

            I was in the Porterhouse in Bray years ago and it was the best experience I’ve ever had in an Irish pub. It was so different from the mass market brewery pubs and felt like a proper free house

            The barman plied me with free samples of different stouts and I left happily pissed even though I’d only paid for two pints! Where do you ever get service like that in Ireland today. Five years later I am still recommending Porterhouse base on one visit. Now that is what I call marketing! I never forgot

            At the job interview next morning I did ok but kept smiling back at the night before on Bray seafront. I was not much interested in the job but enjoyed a trip east of the shannon for a day and night

            I thought I was the only person in Ireland who knew the difference between a brewers pub and a proper ale house

            There is a niche there I think

            If they can do it in Aberdeen then why not here?
            It would be great for our tourist industry if we were to take control of our own pubs and sell what we liked

            I have always felt that bespoke brewing could make this country better. We could compete against each other for awards and then put out beers into international competitions

            Only one problem. There is a cartel controlling the market. That needs correcting. Fast

            Give the little guy a chance I say. I think the Irish would be amazng at brewing if they had a level playing field

          • Adam Byrne

            I’ll invite you down for a few in the Porterhouse in Dublin this time next year Pauldiv when I’m finished my studies. My treat.

          • coldblow

            There was a real ale back in the 80s called Dempseys amd a real lager too (it was in sale in about 3 pubs, including the West Wicklow Arms in Blessington). The Smithfield Brewery used to supply an American-style real beer and a stout in competition with Guinness. There was no demand for any of these.

    • You are a gentleman Adam and I’d like that very much. Thank you

  37. Regardless of the pros and cons of an austerity policy for the EMU, a lot of people rallying against austerity seem to ignore the harsh reality that in the absence of finding an affordable lender austerity is not a policy choice but a fact of arithmetic.

  38. joe hack

    the end is nigh!

    • No Joe, Good News – Venus is crossing the Sun even as we speak. John Allen told us that everything would be okay so don’t worry.
      Maybe John might come on and give us an update?
      In the meantime I attempted to write a Limerick about the event but I got stuck…..

      There once was an astrological genius
      Who welcomed the crossing of Venus
      With good luck in the cards
      Life wasn’t so hard
      The only thing hard was his……….inability to rhyme

      Nah can’t do it?

      • lol. I remember old preachers in Glasgow in the early 70s walking the streets with blackboards proclaiming the end is nigh

        We are still here

  39. Did the Germans fly oer here da?
    Aye right above ye son.
    Fuckin heck!

    A wee poem to pass the time. I love Tuesdays. They are so predicatable. I draw my dole and David publishes another masterpiece. Simple pleasures are the best of fun. You can’t beat playing with words or sitting with a pencil. (a ‘pincil’ my faither use to call it)

    I never asked for much in this bloody life
    just to keep it free fae trouble and strife
    a simple life
    and mebbeye a nice wee wife

    I found a nice wee wife and she is nice as nice can be
    and found her a score of years ago and she found me
    she’d never be anyone’s wife
    so headstrong, single and full o trouble and strife
    but a rock

    How else could man live here
    among pleasures so mere
    like walking the dog now deceased
    in Atlantic breakers loud and clear

    Days cloudy boring and gray
    Days sunny, yellow and gay
    with turquoise waters in afternoon tides
    and navy starry skies as days subside

    after a score of years and more
    we stand at the door
    to spot the Orion and many more
    and rediscover stargazing from from forty years before
    when all was drowned in the shipyard’s roar

  40. Have the Irish brithers ever thought of letting cheeses into their lives?

  41. cooldude

    Here is an excellent interview between Max Keiser and Hugo Salinas Price about the reintroduction of a 3gram silver drachma back into the monetary system in Greece. As hugo says the monetary system of unbacked paper currencies is coming to it’s inevitable conclusion which is a complete breakdown. In the interview Hugo outlines how this coin could be introduced into the Greek monetary system and indeed any monetary system. This is the only way to protect ordinary peole from the oncoming massive currency debasement that is on the way. The interview starts at 13 mins if you want to get straight to it
    http://globaleconomicanalysis.blogspot.ca/2012/06/max-keiser-and-with-hugo-salinas-price.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed:+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29

  42. EMMETTOR

    To me, the Bundesliga is successful for several reasons. Watching their equivalent of Match of the Day, you notice a few things: full stadiums, great atmosphere with a huge amount of crowd interaction with the PA announcer, if a player scores, for example, the PA says his first name and in response, the crowd bellow his surname, everyone’s drinking beer & all the best German players play in Germany. The German clubs do not exist in some sort of fan-controlled socialist nirvana and their rules limiting outside investors to 49% ownership of the clubs are not unique, supporter ownership exists in Spain, also. The German clubs exist in a well-regulated capitalist market. Top German players still get wealthy, the likes of Bayern Munich, known as “FC Hollywood” by oppostion fans, are extremely rich but it’s the regulation that makes the difference. Allow any bunch of capitalists free reign and they will lay waste to everything for a short-term gain. When will this fact become an economic law, like marginal utility, supply and demand, etc? Man Utd, Man City, Chelsea, Liverpool, none of them have sustainable economic models and if and when UEFA enforce their Fair-Play rules, the English clubs are doomed to slip back into the role of also-rans.

    • coldblow

      American football (no less) is also geared to levelling out the inequalities between the teams in their top league, believe it or not. Those who finish at the bottom get first pick of the avaiable player the following season, etc.

  43. Philip

    There is a ongoing problem I find with a lot of economists. They confuse correlation with cause. Because we have a correlation of firemen with fires, we cannot say the the firemen caused the fires. And so it is with the correlation between Germany’s current wealth (and China’s) and the Ireland’s and PIGS in general’s demise. The cause is wrongly construed by our host and many of the economists and I think it is unhelpful and misleading and it creates conflict and we start slagging off Germany calvinistic attitudes versus the fickle nature of the Paddies etc. All is about creating conflict.

    Let’s be very clear – unless we identify the cause, asking Germany or China or whoever to fix it is plain stupid and amounts to racial incitment.

    Another correlative mishap is our political mismanagement and this crisis. Wrong again. That is not the fundamental cause. The more we bang on about our crappy institutions the more we are heading off to nowhere land.

    Our host says “Economics is not about morality lessons, but about trade and commerce.”. Actually I disagree vehemently. It is about the management of scarce resources in a finite world – where trade and commerce is but one set of tools for same. Right now, it seems the only metric in use by economists is financial and which is about as attached to reality (which is really about people’s real lives) as Startrek is to spudpicking.

    The root cause of our problems lies in natural tendency of unregulated financial systems to form oligarchies – who basically only see reality as a number on a bank account. These guys do not care if a few billion live on the breadline or basically die off and they issue a tool which drive that distorts demand to a point that you wind up paying interest in perpetuity with the capital staying firmly in their grasp.

    Any discussions which has us slagging off our institutions, our neighbour nations etc has these goups laughing their heads off cos they know we are creating a another money making opportunity – look at Spain right now.

    Unless we discuss this natural tendency of unregulated financial systems to form oligarchies we are screwed – all of us. Stop taking about the modern opiate of the people – soccer. It’s a game for numbing the minds of audiences – that’s all that is going on.

    • Dear Phillip

      Fair points and I don’t mean to incoite anything bar discussion. Regarding money there are those, you are one, Ie suspect that regard money as a “common good” and therefore it has to be protected by rules treaties etc. Most Germans feel this way. And there are people, like me, who see money, its deployment and manipulation as a “tool” to lever the economy onto some other level.

      Its a philosophical difference and runs very deep.

      All the best
      David

      • Philip

        I know there is no intent to incite. It’s a narrative I see evolving in the general media of its own accord and maybe we all need to be mindful is all I am saying.

        I sympathise with the idea of money as a lever. But once it becomes a casecade of levers and nothing else, we have an unstable situation that is all too lucrative and concentrating of wins to a very few “in the know” group. The incentivised structure of finance encourages instability becasue that is where the biggest bucks lie. What is more, it is self protecting by way of the influence and power of money and perpetuates itself to be reborn from one bust to the next.

        For me, there a point to boom and bust from a financiers viewpoint. A boom is there specifically to cause a bust to sweat out more assets to the centralist few – the thing is that this centralist few are not in the business of any genuine investment in humanity (unless it is to buy a few nice paintings for a few million as additions to a private collection). Speculate to accumulate – not to reinvest but to speculate more – that is the game.

        I have read you enough to know that that’s not entirely your philosophy either. Nah…do not see the philosophical difference yet.

        • Tony Brogan

          Money is a medium of exchange. as such it is never consumed and can be used over and over. therefore there is no requirement to increase or decrease the money supply. There is a reqirement NOT to.
          Any adjustments or levers pulled will create imbalances that create malinvestment, booms and busts.
          In the wrong hands these booms and busts can be created to the benefit of the lever puller.
          There is no place in a thriving economy for interference by any person oor government.
          central banks are the tool used by the power elites to control the economy and create the civil strife. Then can authoritarian government be obtained and political control solidified.
          With commodity money it is virtually impossible to manipulate the economy thus.

          Close the central banks
          Impliment commodity money
          Eliminate fractional reserve banking.

          Your thoughts, David, please, on the last three statements?

    • coldblow

      Re cause and effect I think you hint with your ref to calvinism to Weber’s Protestant Ethic and the Spirit of Capitalism which argued that protestantism encourages enterprise and wealth creation. I remember arguing agsinst this at uni using your argument, ie that this was if anything probably the other way round if anything.

      Agree also about morality and economics, in general, although David is of course arguing here more against those who argue their case in an over-simplistic eye for an eye way and I’m with him on that.

      Also agree about the simplistic accusations levelled against institutions. There is much to criticize especially in finance and law. Also simplistic arguments for managerial silver bullets (see my link to Simon Caulkin’s website earlier in this thread)such as incentives and shared services. Michael Hennigan, who I was glad to see posting back here again, has often criticized the Victorian nature of our government where change occurs “at a glacial pace”. This is true, but I have my doubts as to whether it is the nature of the organization that is critical here. (Note that a standard response to criticism of the Civil Service is to reorganize – this is simply ticking the boxes for whatever is the fashionable solution – it used to be privatization.)

      Agree too about the 1%. Gore Vidal has long been going on about them (and the American “Imperium”). I posted before a couple of times about the (German) writer Michel who identified (“Poliical Parties” 1911) the tendency of parties to work in the interests of cliques and to abandon the grass roots – I think it was his study of the current German Socialist Party (or whatever it was called) that led him to this conclusion. Hudson too is always on about how these disastrous policies are being implemented (can only be implemented) by social democratic parties – he mentions the US Democrats, New Labour.

      http://en.wikipedia.org/wiki/Political_Parties_(book)

      • coldblow

        I found Caulkin’s website only recently and it’s worth reading even if the articles don’t quite reach the standard of what he used to write for the Observer (if memory serves). Still, he has no time for the “if you can’t measure it you can’t manage it” mantra and this lifted my spirits for some reason. Another lump of received wisdom came to mind the other day and made me smile. I’ll get back when I think of it. (It wasn’t the one about having to have a shower every day.)

        What was that mnemonic we were given at our PMDS indoctrination (the owner of the ‘communications’ company came and sat next to me at the break as he had identified me as a potential troublemaker)? SMART or something. Simple? Measurable, Achievable. Recordable? Targetable? But not Memorable. I blame the Christian Bros. I went to school in England but they seem to be the guilty party.

    • joe hack

      There is an X-factor approach to David writing style, Marx’s said something like the following, X-factor is the drug for the masses, but is David attempting to bring economics to the masses or his he just trying to achieve a larger market share and improve his personal gain or both.
      As far as I am aware he does not use his media appearance to advertise a personal financial advice service nor am I aware that he has he has one unlike some that I would like to mention.
      There is no bombast here or pompousness he has allowed all who blog here to criticize him and has giving you a forum to challenge him and your views have now reached his audiences.
      I don’t remember having to look up a dictionary once when I read is opinions, which I don’t always agree with.
      I think when I come here (which I am doing a lot over the last while, maybe because I stopped smoking recently) that I am in school, that is, that there is a bit of teacher in David, sometime I sit at the back of the class and just listen.
      Philip, I liked a lot of what you had to say and will looking out for your views in the future.
      I have a feeling at the moment you may be the tutors pet but watch out he bites I not a blogger type person but I this blog can be an insightful informative and vicious.
      My jury is still out on David, that is always the be case with me

  44. EMMETTOR

    Economics is a science, an organised body of knowledge, built up in logical steps which enables us to predict what results may come from given circumstances. As soon as it starts to become philosophical or political it is Political Economy. Because economics is a Social Science it will never have the exactitude of a physical science, people are involved and thus we end up with the different “schools” of “economics”. Anyway, I’m probably about to be told by WordPress that I’ve already said this, happening to anyone else?

    • cooldude

      Economics, at least the Keynesian variety which is the only one taught in universities across the world, is a failed experiment in pseudo science. The main reason politicians are attracted to this failed brand of economics is because it allows them to spend far more than they take in on their pet projects. At least it did until now where we have reached the debt saturation stage which this brand of economics was always going to lead us to. Stimulus is no longer working because all parts of the economy from governments to companies to ordinary citizens are simply overwhelmed with the level of debt they are under and are struggling to cope with the effects of the asset bubbles that this pseudo science constantly creates. The asset bubbles are created through excess liquidity combined with negative real interest rates which punish savers and force them into risky leveraged assets such as property. We are now entering the Keynesian end game, which was always inevitable, and will soon turn into a currency crisis as the debasement of currencies really hits overdrive. The basic problem with this pseudo science is the type of money needed to run it which is unbacked paper or digital money which can be created at essentially near zero cost and is constantly debased through excess supply. The solution is to wean ourselves off this monetary system and go back to a tried and succesfull system of commodity backed money which cannot be debased at the whim of some politician. The reason this system is constantly ridiculed by the mainstream media is because it takes away the bankers control over the monetary system. This is the real reason they hate precious metals because they know under a commodity based monetary system they would lose their ability to engage in all their dodgy shenanigans such as fractional reserve banking and dodgy derivatives. This will happen anyway either voluntarily or through a collapse of the current currencies which is now inevitable.

    • bonbon

      Well then don’t repeat yerself!

      As to your concept of “economics”, it is exactly what a FG/LP clueless Bilderberg guest Noonan would say. Not the faintest concept under a blue moon!

      Kein blassen Schimmer, in German!

      This is an economics blog. Let’s discuss economics!

      • cooldude

        By all means Bonbon lets discuss economics. Michael Noonan’s concept of economics has nothing whatsoever in common with mine, which as you know is to give people a choice in the type of money they use, thus taking away the extraordinary power the banksters have been given over our money supply. A clear path to do this is given in my link to Max Keiser’s interview with Hugo Salinas Price and his plan to reintroduce a silver drachma to protect ordinary Greek citizens from the devaluation of their currency. You see Bonbon commodity money has always protected it’s owner from inflation and debasement. This is why both gold and silver have risen between 500-1000% in EVERY paper currency in the world over the last ten years. They are not really rising in value rather the paper currencies are losing their purchasing power, which is a deliberate aim of Keynesian economics, with its excess liquidity and inflation targets. So there is just a part of my economic theory. And your’s is to introduce a Hamilton style system of central banking linked with a reintroduction of Glass Steagall. Firstly central banking is a major part of our problems and along with fractional reserve banking should be gotten rid of. As for Andrew Hamilton he was a Rothschild agent whose sole mission was to set up a central bank which the Rothschilds hoped to control. This attempt failed but the Rothschilds got their way in 1913 with the introduction of the privately owned Federal Reserve Bank which, like all central banks, is controlled by the leading banking families such as Rothschilds and Rockefellers. Now lets have some coherent economic views from you which would be a welcome change.

        • bonbon

          I’m afraid this “sound money” is simply the Keynes Gold Standard warmed up. And that from an Austrian School.

          I would stuggle with this apparent confusion, but happily I have done my homework.

    • StephenKenny

      I don’t agree that economics is science because it’s not really possible to carry out tests, or measurements, that produce data that mean anything. It seems to me that it’s no more valid than, say, witchcraft, or alchemy. Both of which were very serious studies and bodies of knowledge for hundreds of years.

      At almost every step of an economic theory, there are assumptions made that not even vaguely verifiable. Consider trying to test the so-called ‘Paradox of thrift’, let alone something like Keynes’s ‘General Theory’.

      A lot of subjects have gone through a sort of ‘maths envy’ period, Geography did it in the 1960s and 1970s, when everyone was keen to be seen walking around the campus with six inch thick, green, fan-fold, line-printer print-puts. They got as far as trying to apply quantum theory to human movements in towns – shopping patterns, or something, I expect – before everyone, sort of simultaneously, realised it was a load of nonsense. Town planners have tried to develop formulae for describing optimal urban layouts.

      Astronomers have a lovely time forecasting what a couple of colliding spiral galaxies would look like, and then go off and tell all the sky-watchers what to look for.

      Economics can’t do this. I think that the final proof, if proof be needed, that economics as a useful predictive tool, simply doesn’t exist, was the complete failure of the brightest and the best in the subject to accept that the current down-turn was a down-turn even after it’d started, let alone forecast it.

      If you think about it, they should have been shouting warnings from the rooftops, from 2004 onwards. Greenspan, Bernancke, and Krugman should have been buying time on TV to warn people of the oncoming multi-trillion $ disaster. Instead, they were assuring us that it was pretty much OK, and Krugman’s only piece mentioning possible problems came in a section underneath adverts for secondhand false teeth and unwanted kittens. The Economist magazine devoted a whole front page to it – that’s one whole front page out of about 300.

      All their ‘theories’, all their ‘models’, showed sunny uplands as far as the eye could see.

  45. kg2601

    David’s article is very similar to the one I wrote 11/11/11 and which can be found here: http://www.tff-onlinetrading.com/market-analysis/2011/12/22/germanys-love-of-the-euro/

  46. “Ticking away the moments that make up a dull day
    You fritter and waste the hours in an offhand way.
    Kicking around on a piece of ground in your home town
    Waiting for someone or something to show you the way.”

    ^ From Time by Pink Floyd.

    John Taylor Gatto has some interesting takes on compulsory schooling:

    “All of us are to be made perfectly and dependably manageable, using every trick of psychology, social pressure, or brute force known to history. Also, to make us more dependably predictable, in the interests of an economy of very big business, a tightly layered social order like England’s, and a big government whose agencies will coordinate and schedule just about everything in the life of the utopia.

    To bring about such a result requires that most of us have to be infantilized–made childish–lifelong if possible. School has been the training laboratory for this project for between fifty and one hundred years, depending on the location. It is the most ambitious piece of social engineering in modern history, and has been a brilliant success in reaching its goals. Of course, these are hardly the goals of ordinary citizens, of families, of religions, or of cultures, but they most certainly are the goals of management, whether of business, army, or government.”

    Makes you think with the passing of the financial treaty, an infantile population voting the way our betters tell us to, just interested in new shiny gadgets or the latest episode of coronation street\fair city(whatever mind numbing shit watched in order to pass the time), always waiting for someone or something to show us the way, not going it alone,

    “Whatever an education is, it should make you a unique individual, not a conformist; it should furnish you with an original spirit with which to tackle the big challenges; it should allow you to find values which will be your road map through life; it should make you spiritually rich, a person who loves whatever you are doing, wherever you are, whomever you are with; it should teach you what is important, how to live and how to die.”

  47. joe hack

    EMMETTOR, you, I am assuming are not Irish or are you calling yourself names?

    Do you believe that greed makes a society including Irish or Greek greed or do you work for German industrial advertisement agency?
    I am Irish and I am certainly not fecal mater, I do not know any that are nor am self loathing of my culture.

    I do not subscribe to the German advertisements found here on this Blog; you only need to look at the recent history Germany to see how that society is constantly on a course of self destruction and the demolition of others now and in the past.

    It is not to long since 4.67 billion marks was only worth 1 USA dollar Ireland has been around for milieus as has Greece whose understanding the world was destroyed after been it was taking from them, by Italians and later some of it made its way to a new Germany you can find some stolen frieze marbles from the Parthenon in a English museum stolen by an Englishman called Elgin.
    Antikythera A 2,000-year-old Greek computer was built before Germany entered the dark ages it’s far from feta cheese or strudel.

    There was a reason Germany was split in two after the war there is still reason why they are not allowed develop nuclear weapons.

    Helmut Kohl assured the Russians and others that it was safe the unify Germany he made commitments to the European project which is now been held to ransom again by some in Germany.

    Ireland was true to that commitment in that it bailed out the Irish banks which in turn supported the German bank that lent the Irish banks the money and in doing so the euro project, that is now for debate.

    Some poetry for you;
    If you need a German car buy one, it will rust and end up in a land fill site.

    • EMMETTOR

      I’ve had an Irish passport for a few years now but I’ve lived here most of my life. I’ve always felt that the Irish pat themselves on the back and tell themselves how great it is to be Irish and I’ve always found this slightly delusional. Sure, we’re a artistic nation, musicians, writers, painters and poets abound but our political life is and always has been a debased, immature exercise in self-enrichment, greed and meaningless tribalism. In reality, 80% or more of our voters opt for one or the other of our two biggest parties and both of them are right-wing, conservative, even reactionary organisations. The Irish suspicion of “-isms” has given us the political system that allowed Fianna Fail to develop a toxic combination of incompetence and arrogance that sold us into economic slavery and social disaster. This is a complex subject and I’m an incompetent writer but I’m not self-loathing of my culture, just realistic in my approach to it, I think.

  48. Harper66

    The Ballyhea Theses – nailed to the door of the ECB in Frankfurt at midnight
    Following the example of Martin Luther and his 95 Theses which he once pinned to the door of the castle church in Wittenberg in Germany, the Ballyhea Bondwatch protest made its way to Frankfurt yesterday and pinned its own theses about the failures and unfairness of the bondholder payouts to the door of the ECB, the bankers’ own cathedral

    Journalist Diarmuid O Flynn, of bondwatchirealnd was denied access to the ECB press conference at the last minute (despite being granted accreditation) because he had been protesting outside. Otherwise great reception from passers by and lots of interest from other journalists

    https://www.facebook.com/contact.ie/posts/323741001033740

    http://thechatteringmagpie14.blogspot.ie/

    Once again kudos and thanks to Diarmuid O Flynn.

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