December 7, 2012

Budget is yet another botched job from our impotent Government

Posted in Irish Independent · 215 comments ·
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JK Galbraith, the great American economist, said that the key job of a leader was to “understand the anxieties of the people, and do something to ease these anxieties”. The Budget is an opportunity to set out the stall of any leadership, to articulate a coherent policy and to get on with those policies that might assuage the anxieties of the people.

When judged from this standpoint, this Budget is an extraordinarily confused piece of financial gymnastics where the gymnast performs all sorts of tiny contortions, unconnected moves and ultimately lands unbalanced, pleading that the judges see some choreography after all the clumsy footwork.

If anything, it heightens the anxieties of the people because the people who have been hit most are mothers dependent on child benefit, homeowners already in huge negative equity and those who are paying PRSI which has been increased. In fact, one of the greatest myths from yesterday is that income tax has not been increased. What is PRSI, if not a tax?

The Government does not seem to understand that the ticking time bomb in this country is the problem of mortgage arrears, which is primed to go off as taxes rise and incomes fall. This Budget makes the average young worker considerably worse off. These are the very people who are part of the 128,000 who are in arrears, unable, not unwilling, to pay their mortgages. This figure is rising. Their anxieties must be heightened this morning.

There is a real sense that yesterday’s Budget was a botched job coming from two discordant partners that ends up satisfying no one. One measure pulls bits of the economy one way and then, just when you felt there was momentum in that direction, another measure pulls other bits in the opposite direction. For example, raising PRSI, which increases the cost of labour and will act as a disincentive to employing people, runs counter to any measures which may encourage SMEs to take on more people. These are basic things which any joined-up government would see straight away.

That said, it is not as if the Government has an easy task. The choices facing it are not between good and bad ones, but between bad ones and worse ones. Once it accepted the notion of five austerity budgets without mortgage debt relief or any concomitant link to a debt deal in Europe, it tied its hands behind its back. When it comes to the really big decisions, rather than respond to the anxieties of our people, the State responded to the anxieties of our so-called partners.

Ultimately, the Cabinet is responsible for this choice and this fundamental choice leaves the Government impotent.

An economy can only grow if its own people spend more or if foreigners spend more on goods we produce.

There is no way any informed economist can argue that this Budget will contribute to economic growth in any meaningful way. The opposite will be the case; the ongoing fiscal contraction at a time when there is a vicious “liquidity trap” allied to a massive debt overhang in the economy will lead to higher unemployment, higher emigration, lower economic activity and ultimately, as we saw on Tuesday night, lower and lower revenues, demanding yet more cuts and tax increases next year.

The anxieties of the people — centred on huge unsustainable mortgage debts and squeezed incomes — remain unaddressed.

In short, in terms of who is paying what, mothers, the average worker, their families and homeowners will have to cough up, while developers and land speculators get off scot-free.

The property tax, based on the value of homes, targets people’s dwellings while the thousands of hectares of zoned land, the developers’ legacy, gets away unmolested. So the property tax is limited to the small fry, while the big guys get away. Labour voters are entitled to feel uncomfortable because if anyone tells you there is no wealth in the country, just examine the deposits in the banking system.

Given that we are dealing with bad choices and worse choices, can we say with any certainty which way the Budget will nudge an already battered domestic economy? What will this Budget do to incentives?

Last night, hours after the Budget, there was a long queue at the till of the local off-license worthy of a particularly jittery Holy Thursday night. What that tells you is that people respond to incentives and if a government hikes up excise duty on booze, and wine in particular, people will bring forward their purchases to avoid the tax.

So expect long queues outside Sainsbury’s in Newry this Christmas, expect fewer houses to change hands, expect people to spend less because taxes on labour have increased and so too have taxes in the average home. Richer workers, who tend to spend more on imported goods, have been, despite all the conflicting leaks, left largely unscathed.

This is another deflationary Budget, which will take more and more money out of an already weakened economy. In terms of the split between tax hikes and spending cuts, we got €1.43bn in new taxes and revenues and €1.94bn in spending cuts. Both will drag demand.

In terms of “understanding the anxieties of the people”, the most charitable analysis would be hard-pressed to find the political leadership in this, the one chance a government has every year to set out its vision.

David McWilliams’ new book ‘The Good Room’ is out now.


  1. Adam Byrne

    subscribe.

    • EddieN

      feck it – was trying to get to subscribe before Adam!!!

      Next time Adam – next time!

    • ThomasFergus

      Sorry Adam, I think you’ve explained it before, but could tell us why you “subscribe” all the time? Thanks

      • miec

        Well done Adam you got in there first time again.

      • breltub

        Think he runs a script to gather all the comments to his email.
        Question for Adam. Do you store them all?
        Some people have probably written more on the comments than David has in the articles. You could probably publish a book of ideas gathered from people on this site.

        Everything from the lunar moon phases to some of Georg’s huge posts. We all know he still reads from Darwin and he will make a grand entrance again some day ;)

        • Adam Byrne

          Don’t keep them all breltub – only the good ones but believe it or not I have 2,000 of those in a folder dating back to early 2009. There are some classics and some of them need to be published. Maybe when I retire! Having said that, you can always look back on the archives – I don’t think David has any plans to remove them – or at least I hope not!

      • Adam Byrne

        Simply to get them straight to my email. Other people do it too. I am always on the move so it’s handier like that.

      • But tell us again Adam lad. You told me before but I forget :-)

    • DB4545

      When are people going to act with enlightened self interest? We have a political cartel in this State who are incapable of acting in the interest of its Citizens. A cabal of ministers with vast school-teaching experience between them and not an ounce of business experience or even basic common sense. Explain how this cartel is in anyway different from the politburo of East Germany/USSR or how RTE is different from Pravda? We have insiders paying themselves vast amounts of salaries and pensions which are uncoupled to the economic reality while businesses go to wall and ordinary people are ground into the dirt. A prime minister paid more than the US President? RTE presenters paid 400,000 euro (four times the going rate of BBC regional presenters across the water)? This insanity has to stop. If the people can’t dissolve this Government then surely the Government will dissolve the people? If we buy in to the dictatorship of a Troika why are we paying for 166 wasters in the Dail and whatever amount of other wasters we have in the Seanad? The centre can’t hold for much longer.

      • Adam Byrne

        They ARE different from the Politburo – they are WORSE.

        At least the Politburo never pretended to be democratic – despite the old GDR title.

        Kenny, Gilmore and their like deserve to go the way of Honecker et al – or preferably Ceausescu.

        Utter scumbags.

        • Adam Byrne

          #Kakistocrats

        • Ceausescu’s ‘crime’ was that he resisted the dictate of the global mafia. Read his Wikipedia entry if you don’t believe me. Where is Romania today?

          Kenny and Gilmore would do well to read it too. What they need to understand is that if you lie down with dogs you wake up with fleas. Personally I don’t envy their predicament and I don’t wish ill on them either. To quote David, “the choices facing them are not between good and bad ones, but between bad ones and worse ones.” But the die may well be cast where their fate is concerned.

          For their own sakes I hope they know what they are doing but I suspect they don’t. For the country’s sake it is a question of whether there will be a country or there won’t. Somehow I don’t think the country at large understands what lies ahead. We’re all being distracted by sideshows and lead down a blind alley. Nobody is offering an insight that is helpful. There are a few people who are trying to do as much but they are also blinded.

          • Adam Byrne

            If they can’t make choices (which they patently can’t) then they need to get the hell out and hand over power to someone who can.

            They should do the decent thing and resign but they won’t because the greedy pigs are hanging in their for their own selfish benefit.

            I wish nothing but ill upon them.

          • DB4545

            I suppose it’s easy to whinge when it’s not me making hard decisions. I don’t wish any ill upon anyone. I’m not that sort of person and I don’t think we’re that sort of people. We’re fairly laid back and that’s no bad thing. I think we’re being squeezed beyond our ability to pay and our political class need to take note. Solutions? If you’re in receipt of a Government or State pension you get ONE pension only,the maximum being 50,000 euro, taxable under Irish law. No exceptions. If you have a problem with this Bertie and Brian & Co.tough. We can’t afford to pay you any more.Employers use this argument in the Labour court. It’s called inability to pay. Really you should be in jail for treason so count yourself lucky. Year zero for social welfare. Everyone who is receipt of benefits must present themselves for interview. No show no pay.No exceptions. All businesses must generate a receipt for payment received. That means everyone from takeaways to trades to the professions.Non compliance to result in a fine which is a 50 time multiple of the receipt. All taxpayers to be allowed a 5% rebate for such receipts. We can’t afford a black economy and this helps legitimate business.

          • Adam Byrne

            I’m not that sort of person either but this has become a matter of life or death now and I don’t mean for me.

            I can look after myself till the cows come home and have options that others don’t.

            I totally believe in the free market etc. but there has to be a reasonable safety net – many vulnerable people are being abused and thrown callously on the scrapheap by these evil kakistocrats.

            This cannot continue.

          • Adam Byrne

            No offence dude but it’s gone beyond ‘taking note’ and more bureaucracy is not going to solve anything right now. You were on the right track when you said Bertie et al should be in jail. I would go one further.

          • http://en.wikipedia.org/wiki/Nicolae_Ceau%C8%99escu#Foreign_debt

            Read that and tell me if you can’t see parallels between CeauÈ™escu’s Romania and what Kenny, Gilmore et al are attempting to do today to appease their overlords.

            The tragedy for Ceaușescu is that his policy of austerity actually worked, in the sense that Romania had cleared it foreign debts and was in a position to enter a new period of growth on a much more solid footing than before. That was in 1989. A few months later the world had changed. Ceaușescu was gone. Stabbed in the back.

            In Britain they are talking about austerity lasting into 2018. It is very hard these days to look to the future with any sense of hope or optimism. Of course when people can’t see a future for themselves, the natural reaction is to either make one or to drown in despair. Either way, the omens are for future, far reaching and fundamental changes – a world that is about to be turned upside down.

            So, to repeat the point I made earlier, Kenny, Gilmore et al would do well to study the case of CeauÈ™escu’s Romania, and for their own sake as much as anyone else’s. Gilmore should be able to fill them in on the background info. Wasn’t he over and back to Bucharest a lot during his USI days?

          • Adam Byrne

            Thanks.

          • Grey Fox

            So what’s your suggestion Oscar?

          • Mainly what I am suggesting is that we are in for far more interesting times ahead, as if they haven’t been interesting enough already. I think Morgan Kelly’s prediction, made in 2010, is still on course:

            “Just as the Lenihan bailout destroyed Fianna Fáil, so the Noonan bankruptcy will destroy Fine Gael and Labour [leaving] Ireland in the interesting situation where the economic crisis has chewed up and spat out all of the State’s constitutional parties. The last election was reassuringly dull and predictable but the next, after the trauma and chaos of the bankruptcy, will be anything but.”

            One could probably add the caveat though that at this stage, the country will be so decimated that the eclipse of FG/Labour will be a mere footnote in history. No one will bother to take much notice of it.

            I agree with Adam Byrne that if they can’t make choices they should just leave. But what is preventing them from acting to avert disaster? As I said before, I think it is because they are langouring under the weight of external pressures. In these circumstances, maybe they feel that their best option is to put their own personal survival above the survival of the country. Roll over and ‘have their tummies tickled by their European overlords’ to use Morgan Kelly’s description. Ironically, it may not be the public anger – which is considerable but which they continue to demonstrate an astonishing capacity to ignore – that will ultimately seal their doom. It could just as easily turn out that those they are trying to appease who will throw them to the wolves in the end, when they no longer have a use for them.

            If they were honourable, they would do what Adam says. Or they could do what David McWilliams suggests – start articulating a vision for the country as a whole, instead to pandering to the various sectors they choose to represent.

            But you’ll knock me over with a feather if that ever happens. Maybe it’s just a case that the time for that has passed. Greater statesmen than the lot we currently have have come a cropper trying to solve what they are trying to solve.

        • bonbon

          Ceausescu, supporter of Pol Pot (remember the Killing Fields?) is not really appropriate, but Honnecker is with his “”Neither an ox nor a donkey is able to stop the progress of socialism.” : “Den Sozialismus in seinem Lauf hält weder Ochs noch Esel auf”, Berlin, 7 October 1989).
          Frau Merkel Honnecker’s version is “Den Eurorettung in seinem Lauf hält weder Ochs noch Esel auf” – and Noonan sings in cacophonous “harmony”. This kind of music kills.

          Notice how long after Honnecker’s DDR lasted!

      • cwigert

        As someone in New York City who had no idea what greedy pigs Ireland’s political class is, I think you’d be wise to THROW THEM ALL OUT. Their compensation is way too high even for competent leaders.

  2. Governments don’t do ‘the vision thing’ anymore, if they ever did. They are simply not allowed to. They are pawns in the service of bigger players and don’t expect that to change any time soon.

    It’s not just Ireland either. In the world of today, any country that tries to act independently – even if it is to save its own skin – will be immediately isolated, removed from the fold and ‘dealt with’ by some method until they come crawling back. It’s all a bit like something from a Victor Hugo novel where a man can be sentenced to 20 years hard labour just for stealing a loaf of bread to feed his starving family. The carnage that was perpetuated in Iraq, Libya, that is today being organised in Syria and tomorrow, Iran are warnings not just to those countries – but to all countries. I know some people like to cite the example of Iceland but my feeling tells me that all that is being contained in some way – possibly even tacitly endorsed.

    When someone like Hilary Clinton praises Ireland’s ‘economic re-bound’ at an OECD meeting such remarks augur something. It’s not just a case of a person being delusional. These people are highly delusional and it is precisely the state of being delusional that makes people dangerous, prone to violence.

    • bonbon

      Everyone in Obama’s shadow appears strangely distorted – Obama has that effect when they compromise with him. Have a look at what the ricist Susan Rice is doing, and shudder. It looks like Bill’s ode to Obama got him elected. Why? The wife’s situation.

    • bonbon

      Hilary shows the true cost of submitting to Obama, and in Dublin accused Russia of spearheading efforts to “re-Sovietise” parts of eastern Europe and central Asia.

      This is an attempt to start a renewed confrontation with Russia, Obama’s intention with the Patriot missiles now being sent to Turkey.

      Obama ( advisor being Mr. Blair ) is fully on the road to thermonuclear war unless stopped.

  3. miec

    David I totally agree with everything you said. I would love to disagree with you, say you are being a gloom and doom merchant but no I agree that the country will continue to detract and suffer terribly. What really sickens me is that the government have picked on the weakest sections of society again whilst those who caused the damage get away. This budget is another nail in the coffin and what makes me spitting mad is when I hear Eamon Gilmore tell the media that the burden has been shared fairly with the biggest shoulders carrying the burden. Total bull. It is the lower paid workers, the carers, etc who are receiving the brunt of this budget and I am only glad I could never afford a house and have that problem round my neck. There is real anger now amongst people, not the whiney anger but anger whereby people are going to resort to the black economy, screw the system in whatever way they can, abscond on payments (and who can blame them, if you haven’t got it you can’t pay), small businesses who will pull out because lets face it what incentive do they have. Our government could not give a damn about the anxieties of people, and I would like to add that all this crap we are dealing with is caused by our leaders and those who continuously rip us off, not Germany, not Britain, not the US, not anywhere but our government, the bankers and the developers.

  4. JPL

    W Edwards Deming’s recommended approach was to view business as a system. It is the job of management to understand the system and ensure it is continuously improved over time. In order to be an effective manager you must understand the system.

    The same model applies to government. Government is a system. However, if any one person understands the system I would be very surprised. As a consequence, you get this non-joined up “thinking” where policies conflict with each other. The management (in this case, the ministers and their civil servant minions) does not understand the system. Clearly management (political leaders) have failed and need to return to the drawing board. I won’t hold my breath.

    • ThomasFergus

      That’s fine as long as you realise that running a business and running a national economy is not the same thing. The household/business economics model applied to governance, as practised since the days of Thatcher/Reagan etc, has failed utterly, especially the largest backers of this regime, banks, large developers and certain corporations, have ingnored its principles and accepted “socialism” for themselves alone.

      • breltub

        It has never been run like a house, ever!
        Thinking that it has been since Thatcher/Reagan is wrong.
        It’s been run like a tax farm with the People Farmers [Government and Business] charging use for getting the vet in every now and then [healthcare] and training us to do tricks for food [education]

      • JPL

        The economic and management principles which Deming espoused are applicable equally to business and government. In fact, even though Japanese businesses adopted his ideas into their models after WWII, Deming’s first mission to post-war Japan was to restructure their government. He used many of the same principles in his organisation of government as he did with industry. Deming is highly regarded in Japan, even today where the Deming Prize is awarded for quality and quality management.

        Based on what we see from the Irish government do we really believe that similar focus on quality is emphasised in Irish government and public service delivery?

        You can read more of his ideas in The New Economics for Industry, Government, Education.

    • breltub

      Government is a scam. The system is the scam. Everyone understands it, and keeps their end of the scam going. Management are in on the scam, workers are in on the scam.

      Every now and then they complain when their end of the scam gets scalped by some other end of the scam.

    • cwigert

      The good and bad part of democracy is that you get what you vote for. If the choices are no damn good, you’d better find new choices. In 1688 the Brits had enough sense to lose a loser and bring in a Dutchman. Maybe Ireland needs to import political leaders from Switzerland or Singapore.

  5. ThomasFergus

    The country needs a left/right divide now more than at any other time in the state’s history. The big beneficiaries of this all things to all men populism has always been Fianna Fáil, and the new beneficiaries may well be Sinn Fein (a working class party supported by anti trade union magnate Sean Quinn), but the opportunism of Fianna Fail has always been the fault of Fine Gael (to some extent) and Labour (to a massive extent). It is labour that will pay the price at the next election, and deservedly so. “Gilmore for Taoieach” may well have been a nice catchphrase for Labour Party hopefuls in 2010 and 2011, but in private Labour should have been aiming for “Gilmore for Opposition LEADER”, with a view to presenting a real alternative to orthodox economic policy, and ultimately being leader of the largest party (and the country) in 2016. Instead they will be annihilated in 2016….at the polls, and it will be 100% deserved. They are a disgrace.

    • breltub

      This country needs a guillotine!

    • Qr96UThjJT7j

      Well said Thomas Fergus. I said exactly that in a conversation with a friend who is a member of the Labour Party, back when Labour foolishly decided to join Fine Gael in the coalition. His response was that “it’s very cold and lonely on the opposition benches” and that for certain senior Labour members it would be their last chance at power. They will be decimated at the next election. But of course, they will do a Greens on it, and hang in there as long as possible, until their hands are as bloodstained as Fine Gael’s, and only then will they bring down the government. I just pray that their decimation doesn’t allow Fianna Fail or Sinn Fein into power again. :-(

      • ThomasFergus

        Their problem is that they don’t understand the difference between power and office. Leading the opposition would not be a cold and lonely place; on the contrary it would be liberating for Irish labour. A labour party which is also the leader of the opposition (and hence the only real alternative) would wield far more real power than a labour party in government with either the corrupt (FF) party or the reactionary (FG) party, where it’s only duty is to act as mudguard “in the national interest”. You may pray, but I fear the next govt will be FF/SF. Either way, Labour are a disgrace.
        The country badly needs a Social Democrat Party.

        • Deco

          Socialism Irish style is ICTU calling all the shots. And it is failing abysmally. It is bankrupting the country a second time.

      • breltub

        I would love to see everyone just vote independent and throw out all this party nonsense! Then we would see huge change, whether good or bad I don’t know. But it would at least entertain!

        • Grey Fox

          Breltub,
          The only alternative out there at the moment is:
          Direct Democracy Ireland
          It is about Returning Power back to the People
          Successive governments have squandered the opportunity and most have actively plotted against the People for self serving reasons and to appease the financial institutions and European masters.
          The unfortunate element is that in order to gain power the “party” game must be played, but Direct democracy is a ground up organisation, Local people pick their representative who contests the relevant election with the ability to sack that representative if he/she is not carrying out the wishes of the People or acting in the interests of the Country.
          Direct Democracy Ireland has made it clear that it is a Service and not a party, but it is very difficult not to be referred to as a party in the Irish political arena.
          The sole purpose of Direct Democracy is to return the power back to the People of Ireland and in so doing, make all politicians fully accountable for their decisions, if this can be done, then Direct Democracy will have fulfilled it’s purpose.
          Party politics does not work and when it is gone, given the power, the People of Ireland will not screw themselves, this has been proven in Iceland!

  6. Tiny Tim

    “The choices facing it are not between good and bad ones, but between bad ones and worse ones.”

    This is certainly the perception but there were things that could have been done which would have led to a more balanced budget which were not mentioned, instead they opted for a sledgehammer blow to struggling people which you have highlighted while protecting their own salaries, expenses and massively overpaid advisors. They are as feckless with political optics as they are with the management of the economy, they have simply made a bad situation worse but are so protected, operating in such a bubble that they are blind to all advice and evidence that points out the looming disaster especially in the mortgage area. I would think collapse is more inevitable as a result of this budget than any other.

    To see the punch and judy display in the Dail when all this was unveiled with TDs dashing for the doors once the Minister for Finance had made his statement was quite simply sickening.

  7. Hannibal Budget

    Leeches and Blood letting agents sucking the decaying national corpse of a dying vision of old Ireland

  8. Pat Flannery

    You are right that spending is the key.

    In order to put purchasing power back into the economy the totality of private mortgage payments must be reduced. There is no other way. Mortgage payments are the real impediment to growth. There is not enough spending/ revenue capacity in the entire Budget to offset the drain of mortgage payments.

    It is already clear that there will be no “Promissory Note” deal with Europe. Waiting for one is like waiting for Godot. Instead of looking to Europe we must look to our own legal system for legitimate ways of mitigating the effects of past unrestrained lending practices.

    The good news is that asset discounting has already taken place in the markets. The original mortgage-backed securities investors, who financed our banks’ lending orgy, were mainly foreign pension funds who are required by law, in most Western countries, to mark their investments to market. Therefore, by law, they have already taken their losses and moved on.

    The current holders of this now highly speculative paper are predatory or vulture capitalists that bought from the original bond holders at pennies on the Dollar/Euro and are now trying to make a killing by demanding the original book value. That is who our fight is with, not the legitimate bond market.

    Are our legal professionals up to the task? I hope so because it is in our courts we must look for redress, not in Budget policies. The real fight is on the legitimacy of these rack-rent mortgage payments.

    • paddythepig

      The biggest impediment to growth is lack of innovation in the economy. You could cancel all the mortgages you like, but you’d still end up with an economy that is woefully short on innovation. Ireland has to import innovation in the form of the multinational sector in order to pay for it’s lifestyle expectations, and it should pray this continues.

  9. [...] davidmcwilliams.com There is no way any informed economist can argue that this Budget will contribute to economic growth in any meaningful way. The opposite will be the case; the ongoing fiscal contraction at a time when there is a vicious “liquidity trap” allied to a massive debt overhang in the economy will lead to higher unemployment, higher emigration, lower economic activity and ultimately, as we saw on Tuesday night, lower and lower revenues, demanding yet more cuts and tax increases next year. Share this:EmailPrintTwitterFacebookLinkedInPinterestLike this:LikeBe the first to like this. [...]

  10. As always, your article is very interesting. I worked in a large Irish company that went bust a few years ago, and leading up to insolvency, it seemed to me that the senior management of that company were living day-to-day trying anything to extend their grip on power and, more importantly, their incomes. The most important decision factor was the desire to keep their gravy-train running as long as possible. As a result, all decisions seemed potentially suspect and not made in the interests of the company, it’s employees, customers or suppliers but in the interests of the individuals on the senior team.

    I think the Irish Government is engaged in the same game. Rational self-interest is the prime motivator for our “senior team”. Their “vision” time-scale is the hyper-short-term.

    We, the people, need to either successfully convince our TDs to represent our real interests and stop this madness or be content to watch the country be further crippled.

    When the inevitable need to default comes, we will require strength to survive it. We will not have that strength if we continue on in this nightmare for much longer.

    As Enda and the ruling elite drift further and further away from the experiences of the people, like King Louis XVI and his court, there is potential for great danger.

    Senior team comments such as emigration is a “lifestyle choice” sound dangerously close to Marie-Antoinette’s “let them eat cake”.

    Are we there yet? Nearly.

    • Adam Byrne

      We are not sufficiently evolved as a species (nor is any other species – on this planet at least) to be able to make decisions for the greater good.

      Any action that is claimed as ‘altruistic’ is merely…

      1. purely superficial, or;

      2. possessing of an ulterior motive.

      Give it another 100 years and we might ‘get there’.

      • Joe R

        That would be a good justification for cynicism if it were true. But it is not. Plenty of societies are, and have been able to take decisions for the greater good.

        For many varied examples which are reasonably well explained go read ‘Collapse’ by Jared Diamond.

        I’m not the biggest fan of this guy as a writer but he makes his case thoroughly and repeatedly in that book.

        • Adam Byrne

          Great book. What do you not like about him as a writer otherwise Joe R?

          • Joe R

            He takes 3 pages to expalin what he could say in 1.5-2 normally and repeats himself a lot. Plus there is a little too much presumption present.

          • Adam Byrne

            Fair enough, I like his books though. Guns, Germs and Steel was also a good read but Collapse is better.

        • Adam Byrne

          I believe it is true Joe R. We will have to agree to differ.

          Try ‘The Selfish Gene’ by Richard Dawkins for another view of how so-called altruism actually functions.

          I have read ‘Collapse’ too: all the societies in that book drove themselves to extinction and destroyed their environments through pure greed and short term self interest so I fail to see why you use the book to explain ‘the greater good’. In fact, the opposite is evident within its pages.

          Good luck.

          • Joe R

            If I can jog your memory there for a minute Adam the Japan ( deforestation top down ) and Papua New Guinea ( deforestation bottom up )sections along with the Dominican Republic vs Haiti section and his description of some polynesian islands that ticked along ok despite adversity ( not Easter island ) offered examples of postive reactions by societies to crisises.

            My difficult with Diamond is that he takes 3 pages to expalin what he could say in 1.5-2 normally and repeats himself a lot. Plus there is a little too much presumption present.

          • Adam Byrne

            Ok fine. Those societies might make the same mistakes given long enough. Who knows? We certainly aren’t do a great job at the moment.

          • Adam Byrne

            ‘doing’

      • bonbon

        I presume you mean you are not sufficiently evolved to make statements about the General Welfare – wait 100 years (and write a biography).
        Meanwhile we the people know that time’s rate is changed by our actions. Our evolution does not follow some animal clock.

        Give the banksters another 100 years of George Soros’s Open Society and the entire species will be extinguished. No – they do not get any “extra-time”, the imperial game is over.

        • Adam Byrne

          I was wondering when you would catch up to this page Mr. bonbon after talking to yourself for the whole evening about those infernal Austrians.

          Take a break dude.

        • Adam Byrne

          I know it doesn’t follow an ‘animal clock’ Mr. bonbon but a moderate amount of generalization is necessary to enable any kind of concise conversation. Otherwise we’d be bogged down in interminable and irrelevant minutiae… oh wait a minute…

          [see previous comment re: Austrians]

          I am barely evolved at all myself Mr. bonbon – permanently running ponzi schemes will do that to a person.

          • bonbon

            That’s exactly the problem – generalizing from the animal phyla. Mankind is totally different, its time is beyond most scientific textbooks which are almost all generalizations from the animal kingdom. That is why economics is so discredited – it is simply ecology.

            The current ponzi finance is evidence of devolution, a deliberate destruction of human civilization – in other words reversing time. So called “primitive-societies” are all remnants of such destruction. That is why empires love to hold such as models as their stated intent is always population reduction.

          • Colin

            Mr bonbon, I would say your pals in the IRA would have more of a claim for evidence of human devolution. You know, people here have raised the Bridget McCole case, but Mr bonbon, what about your mates’ treatment of another Irishwoman Jean McConville? Forgotten about her? She was a widowed mother of 10, exiled from her own community for marrying a catholic, abducted and murdered by the IRA, her body dumped and buried, its location kept secret until by chance members of the public came across it decades later.

            So stick your Sinn Fein and Pearse Doherty pieties up your arse where it belongs.

      • dwalsh

        You are right Adam; the median level of human consciousness is not ‘there’ yet; but there is a significant minority who are. Unfortunately they are not the minority who own and run the planet.

      • transitionman

        Give it another 100 years and we might ‘get there’.
        Have we got that time?
        Meanwhile we are responsible for 200 species wipeout everyday.

        • Adam Byrne

          We probably don’t transitionman – given current practices.

          Then again the Ray Kurzweil school of thought (see ‘The Singularity is Near’) would argue that it’s all academic as the problems of the world are about to be solved by technology.

          Of course no one can see the future but I have some sympathy for his ideas.

          Like Ha-Joon Chang, I would say I’m very pessimistic in the short term but much more optimistic over the medium to long term – provided we make it to there.

  11. Having just read this article, I am glad that I emigrated to the UK in 2011. It just seems that the mandarins in the civil service are the ones who are really pulling the strings in Ireland. They seem to know the cost of everything and the value of nothing! Without hope of a better tomorrow, Ireland will descend further into darkness. I know that some may argue that the corporation tax remains very low and that Ireland is a great location for foreign direct investment. However, one cannot ignore the SME sector and the local economy. If you have a small business and were thinking of employing more staff, the increase in PRSI would put you off not just because of the direct costs but because of the significant indirect effects that it will have on national consumption.

    It is time to tackle the faceless bureaucrats who are stifling whatever chance the country has to get itself out of this mess. I also believe that it is time to send a message to Europe that austerity does not work and that Ireland intends to go in a new direction – one which lessens debt, invests in its people and its future and does not worry about solely saving face. We are bankrupt. Time to move on and start afresh.

    • “Ireland is a great location for foreign direct investment.”

      Correct but not for the people who actually live here and try to earn a livelihood from what’s left of this economy.

      They keep harping on about our ‘low rate of corporation tax’ as if it is part of some grand strategy. But it’s not. It represents the absence of any sort of strategy. It is the cry of the fellow who got fleeced at the market yet his pride cannot bring himself to admit that this is so.

  12. ShaneH

    David let me quote you two far more fitting Galbraith quotes “The Process by which bank creates money is so simple that the mind is repelled” and “The only function of economic forecasting is to make astrology look respectable”

    These go straight to the root of our problems. We have a privatised money system which creates perpetual debt and we have the “snake oil” economic profession, a profession that perpetually have failed. Steve Keen sums it up Quote “we don’t need to have economists to have an economy, but you do need an engineer to build a bridge”.

    Until we get real, these discussions are just futile nonsense.

    Shane

  13. rebean

    To Sum up therefore , A botched job indeed and the can is kicked on down the road. Status Quo at all costs ( for those people in high places) and thats not the rock band. We are all getting worse off gradually as a nation and we limp along to the next election hoping for a messiah.

    • ShaneH

      Yes that’s about it; we’re the proverbial frog in the water that’s gradually being boiled. The wealthier and more technology advance we become, socially and monetary the poorer we are. These forums are full of educated and well meaning people, yet educated and well meaning doesn’t equate to common sense.
      Shane

  14. gizzy

    Enda Kenny said today that they have changed the structures and the way we do business in this country. Now that is delusional, I could not think of one such change.

    The comments about developers are a bit of a throwback. I know a few developers and they have to a man lost everything and they employed hundreds and paid millions in taxes and levies over the years. Wasn’t their fault it was squandered on bench marking. Maybe others I don’t know are doing ok.

    We do not have leaders that requires right brain thinking and those were never popular in Ireland. We have managers and not v good ones. They are all left brain and cannot do vision or strategic thinking. Just the same behaviour with incremental change. The banks had and have the same profile of managers and no leaders.

  15. Deco

    What is most revealing of all, is the fact that the institutional state system has been left virtually unscathed.

    Also revealing was Phil Hogan living well off authority and enjoying himself while everybody else scampers around to figure out how to survive.

    A customer look at the increase in state expenditure since 1994, and the level of contraction of GNP indicates that we need to do something about an inefficient, ineffective, mismanaged, all over the place, state system.

    We are still an economy living high above it’s means. This is evidenced by the persistent dependence on accumulating debt to pay for the current economic level of existence.

    The state system has gone completely out of control. The public discussion is nonsense because it continually defers out of fear of prompting a barrage of criticism concerning state over-runs.

    This is going to end in an awful mess.

  16. Joe R

    When it comes to mortgage arrears stories I am a bit tired of hearing the universal emotional whine about the stereo-typical young family under financial pressure, with a huge mortgage and negativy equity, etc…this is not the true overall picture.

    Here is the fact – buy to let speculative mortgages are in trouble at twice the rate of residential mortages.

    http://www.irishexaminer.com/ireland/buy-to-let-mortgage-arrears-hit-29-215411.html

    Speaking in financial terms only I think it is clear needs to be two different solutions for the two situations. They need to be seperated in any narrativ eon it too..

    For me, houses should be homes not a stupid mass rich-quick scheme and so homes should be protected. The get-quick-rich brigade’s financial situation should suffer according to the real market situation. That is captalism. Bring it on.

    I bet however nothing of consequence will happen on all of this and that the whole mess will be let rumble on, as it has been to date…

    • Joe R

      Apologies – clarification + typos.

      *Speaking in financial terms only I think it is clear that there needs to be two different solutions for the two situations. They need to be seperated too, in any narrative on it all.

    • gizzy

      buy to let is easy do the american model hand keys to bank. Yours lads.

  17. DC

    There are only two real problems we face

    1 DEBT – which is not ours and cannot afford.

    2 Complaceny?,Inertia?, Cowardice?,Apathy?
    indifference?, You choose.

    As per Christy More below

    ”There’s no doubt they have us where they want us. We seem to have become a nation of docile, obedient shit-takers with a few exceptions the same galoots are in the driving seat, the banking elite have become, if anything, even more arrogant, the PAYE workers,the poor, the elderly, the infirm, the special needs, these are the ones paying for the sins of the greedy…for the laissez faire attitude of Bertie Ahearn and his Government,the Ray (Dublin Bay) Burkes,the Pee Flynns and Ray McSharry’s and their team of lickers, the Brian Cowans, Mary Hanaffins, Mary Coughlans, Mary Harneys most of them, and many others, gone out to ( the very long) grass with awesome pensions. The Johnny Ronans, Bernard McNamara’s,Tom McFeeleys, and their numerous counterparts are still lingering at the trough.The nameless Banker Tycoons who fed these monsters endless millions to chase sick fantasies, to fuel helicopters and Maybachs, champagne swilling lifestyles, endless acquisitive ego-boosting and criminal behaviours… all these lauded by the same Bertie who suggested that those who tried to call a halt, would be better of committing suicide…What a dirty slur that was. What sort of a ( repeatedly elected ) leader cur would utter such a crass and low exortation to his electorate from the platform…. At a time when thousands of families were suffering the pain of such loss and deprivation…

    They seem to have us where they want us alright…supine on the couches of the nation, hypnotised by Football, X Factor and Downton Abbey.
    We are are back again at the same spot…. countless thousands pay the price…..”

  18. Deco

    It just hit me last nigh, in an almost sleepy state.

    None of the morons in charge understand debt. All they understand is how to get their noses into the state system, and how to keep it there. They really have no clue what they are doing.

    And anybody who takes them at their word is in for an almighty amount of agony. Just ask anybody who trusted the Irish media or the Irish politicians in the boom era and who now has a mortgage.

    The budget was a mish mash of sops to various vested interests. Including the ECB, Merkel, French finance sector lobbyists in Brussels, the EU Commission, holders of debt of countries like Spain and Greece. And then you have the local vested interests. SIPTU, ICTU, IBEC, hundreds of quangos, etc…

    It is a political budget, in every sense of the word.

    None of them have a clue about debt. Not a clue. Never mind economics, they cannot even understand debt. Because if they did they sould stop pushing policies that push up the debt principal the entire time.

    • george

      Deco “mish mush” is correct!, some of the targets they want to achieve depends in sketchy estimates. They are creating another mess, and soon they’ll be back, trying to extort more money from us. Probably they don’t even realise it for themselves, until the EU, Banks, Elites, and Corporations will send them to hound us. Cheers!

    • Tony Brogan

      Debt is the problem DECO
      Starting with the central bank cartel where every unit of currency is loaned into existance and a debt created at the the formation of the nations money supply.
      Central banks must be closed ans fraction reserve banking outlawed.

  19. george

    David in times like this, little people like us count on people like you with a high public profile, to give an honest and unbiased opinion. And it is obvious that unless you would be a bad person or a total ignorant, you would have gone along and said the silly things, that the well polished an unashamed charlatans of the Government are saying
    .
    We all know we have to make sacrifices for to bring the Country back on track. I do like wine a lot, and I don’t complaint about the one euro increase in excise, and even if they wanted to put a 5 euro tax on it I wouldn’t complain, because it isn’t a basic necessity for living. And instead of drinking a bottle of wine every week, I can drink one every month. And for a just cause even one a year. Although I understand is hard in small restaurant owners, who are struggling with their businesses at the moment.
    And even for a just cause, I would be ready to pay a solidarity or emergency tax or contribution, that wouldn’t be linked to my family home, if I see that the Banks, Corporations, and the Elite, makes one too.
    .
    But for most of the other cuts and increases, we can’t accept the decisions of the recent Budget lying down, because the people at the top: Banks, Politicians and Top Civil Servants, Elites in the Public and Private Sector, are getting away with murder, while the small business person, and middle income families in the Public and Private Sector, and the most needed, have to carry the weight of everything. That is immoral and unjust, no matter how many laws you try to bring, to give it a legal framework. Laws that emanate out of a Government, that puts the entire burden on the backs of the People are totally unjust, because it violates the most basic principals of common decency, and basic human rights.
    .
    Do you or anyone else knows, that the new increases in carbon taxes are going to cost us, 2,50 euro over a bag of smokeless coal, and 50 cents per bail of briqquets? And that as a well known coal merchant from Crumlin said yesterday in Joe Duffy’s program (God bless Joe), is going to be an average 5 euro a week for two bags, on top of what we are paying at the moment. And that people is going to have to pay more in it , that what they’ll be paying in Property Tax, for an average house? And on top of everything, this will create a black market economy of cheap coal from the North; and the profit of it, will end in the hands of criminals, and the State as a consequence will loose revenue on it. Can anyone with a bit of a common sense, call this other than total stupidity?

    .
    As if we wouldn’t have enough to deal after the child benefit cuts, the increase in PRSI or INCOME TAX FOR THE LOW PAID, the respite cuts, the back to school allowances cuts, and the increases in education fees, the Government has put us a chain around our necks for the rest of our lives, in the form of a Property Tax on our FAMILY MOMES, to satisfied their masters in the EU.
    .
    And to make things even worth, The Property Tax as stands is open to be abused by the State. They know it, and they know as well that soon, they will be able to EXTORT from us more money, when they’ll need it. And giving their total incompetence and surrender to Banks, Elites, and Corporations, it will be sooner rather than latter.
    .
    They don’t care the mess they are creating for our future, because for then, all the members of this Government will be enjoying their lump sums and fat pensions, like the rest of the self proclaimed patriots that now are hiding in retirement, and ashamed to speak in public.
    When all will take to become a hero in the eyes of the People, would be for any Minister or Junior Minister with a shred of decorum, to resign now in solidarity with the needs and pain of the People, and let the citizens vote for a new Government.

  20. Philip

    Make no mistake, this budget gives the Government’s NAMA machine more time to do its work. While ordinary decent working folks and decent citizens are trying to obey the law…not these guys. The taxpayer is funding a time delay necessary for this organisation (the biggest property company in the world) to avoid the mother and father of all fire sales.

    BANKS, LANDBANKS, DEVELOPERS and their ilk will be left alone to churn mega amounts of loot while earning half million salaries.

    If NAMA is destroyed/ dismantled, this country will settle down nicely. But of course, I forget, the very basis of FF and FG and possibly Lab philosophy is to rent rent rent up up and away. When u cannot pay yer property taxes, you’ll be NAMAed or rezoned.

    I am serious guys…no talk of debt for equity swap or anything else until these guys are taken out or else you will walk into their trap. This and Anglo are an internal ponzi that needs urgent exploding apart.

    • They literally need to be taken out and eliminated from the equation because the social consequneces of their actions is tantamount to murder

    • george

      You are totally right, and Nama will give our homes in a silver plate mainly to Irish, German and British landowners who will profit from our misery. Back to the times when people where enslaved by the former Colonial Masters; assisted by the servile local Elite, ready to sell the People to keep their privileges.
      If you put a frog in a pot of boiling water it will jump out straight away. But if you put it in cold water, and slowly increase the heat, eventually it will be killed. What are we going to do?

    • gizzy

      Nama and IBRC now exist for their own sakes and that of hundreds of professional advisors.

  21. Good stuff. I know you echo the feelings of the majority by condemning this budget and recognising the anxiety of people up and down the country

    The best way to overcome this anxiety is to look to solidarity and I think you will see a lot of this in 2013. People are turning left just like they did in South America after being subjected to brutal experiments in economic ideology

    I predict in the end Irish people will put the common good before and above the selfishnes of the political classes. I smell a riot

    • george

      Pauldiv let’s hope we are capable as a Civil Society of doing something of epic proportions, in the nest few weeks and months, that will restore our rights to decide what kind of Country we want to have. If the one this Government want to impose and dictate on us, serving mainly the greed and the interest of the EU, the Banks, Corporations, and Elites; or our right to have a fair and just society for all its citizens.

      • I feel we have come to a line in the sand george. No more. No fucking way. It’s time to protest en masse because these people are clearly taking the piss and they don’t care. They are like aliens speaking in foreign leanguages when they tell us that it is acceptable for medical doctors to take extra jobs as TDs. Why?

        Probably because the potential profits in the private medicine racket are obscene and beyond our dreams. I bet the pin stipe suited pharmacists make more than drug dealers

        The bastasrds will make a killing if more serivces are opened to competitive tendering

        FG puppets look nervous on TV. Body language is everything and these people are utter fucking slimeballs

        I am prepared to get to my head cracked. I am single, unemployed and pushing fifty. I have nothing to lose and thank christ I don’t. I’ve never had a bank loan or a mortgage because I had a frugal Scottish mother who saw Hitler and all the wankers who came after him

        • Adam Byrne

          Never had a bank loan or a mortgage myself, never will. Avoid debt slavery. Don’t let the slimeballs get a hold of you. This ‘government’ are evil, greedy, despicable cowards.

        • paddythepig

          So what exactly do you want?

          • Adam Byrne

            In what sense paddythepig?

          • paddythepig

            Well I know pauldiv is angry about something, but exactly what I am not sure. I see a lot of bile, but I have no idea what pauldiv actually would like to happen.

          • Colin

            But Pauldiv isn’t angry about Solicitor Brian O’Donnell. No, in fact he has a lot of sympathy for the multi millionaire tax-dodging, high living, credit junkie seeking bankruptcy in the UK. Pauldiv seems to think it could all be Mrs O’Donnell’s fault – the love of a good woman and all that – so give the guy a break. Strange bedfellows indeed, angry man on the dole in Sligo and Killiney solicitor doing all in his power to keep the lifestyle he is accustomed to.

          • I want our government to grow a backbone and stop handing billions to the troika because it is throwing good money after bad. There is no incentive for paying back 100% of the debts we are committed to. Why? Simply because we can’t repay it without destroying our society

            I want more politicians of the calibre of Pearse Docherty, Stephen Donnelly and Joe Higgins. We do have some decent politicians here despite the assumption that they are all useless. The party system is the problem because it creates nodding donkeys and is not working for the majority of the people. It is financial dictatorship by a tiny minority looking after the vested interests of the one percent. I find that obscene and worth fighting against

            I want to see the government invest in training and job creation and want them to create conditions for people to take a risk and not be sent to a Coventry if they fail

            This government says it care about jobs and that we have turned the corner. We have not. All they have done is make sure that people will have no confidence in the future

            I know you are a big fan of austerity so please tell us why it is so good?

            I could do with a laugh

          • paddythepig

            The troika are giving us money, in fact they are helping to pay your dole. Without that money, your dole would be a fraction of what it currently is.

            Governments don’t create employment. It’s people, entrepreneurs, who create employment. We have too many people employed by the Government, not too few. Pearse, Joe and Stephen have never created a job between them, ditto the cabinet.

    • bonbon

      Correct on the (implied) reference to Pinochet, the Chicago Boys Friedmanite ideology applied in Chile, where President Michael D. Higgins clearly said there a few weeks ago, that Latin America recognizes the end to radical free trade economics.

      HereMilton Friedman, von Mises, Popper photographed at the founding of von Hayek Mont Pelerin Society gathering.

  22. SMOKEY

    Hillary Rodham Clinton praised the Gubment for doing a great job on this budget, and the Irish sheeple for, wait for it,.. “getting up every day and getting the job done” WTF? WTF I say? Did she actually say this bullshit?
    Who is she? Ross Perot?
    I read old items in the yesteryears papers and think Wow! they use to talk to the people like that? FLASHBACK! Hillary talking down to you, condescending.
    She has nothing but hatred and disrespect for you.
    AND she doesn’t know a damn thing about what is actually going on in Ireland and the economy, trust me on that one.
    I see this dumb bitch saying shit like this and I want to vomit. Puke.
    She looks like shit too these days, but that is part of the plan to make her look earthy and unglamorous and get the sympathy vote for being a hag.
    Jseus Christ she makes me fk’n sick.

  23. David, if you were in government, how would you do it?

    • Philip

      Shut down NAMA. The rest will come good.

      Is property was more available, and more people had it, it would be the basis of a good loan book and a solid bank. NAMA stops the from developing. It needs simply to be deactivated. It is secret, exceeds its mandate and only. makes the cliff of catastropic change higher. This will blow because it is full of nothing like a balloon blocking an artery.

    • transitionman

      default devalue depart?

  24. This is not our darkest hour because it is the beginning of something. Budget 2013 will go down as the day we crossed a line and said ‘Right that it is. This stops here!’

    The Irish people will not take any more of this dictatorship. Of that I am 100% certain and the reason why is we have nothing left to lose

    We are not the first generation to end up in a rage. Stay focused because we really are all in this together now. Stop taking shit. Please!

    Here’s one David will know:

    http://www.youtube.com/watch?v=oIiO8fX0pZM

  25. gizzy

    It’s very strange how quiet it all is about the biggest winners in the last few years, the farmers particularly the big ones. Huge winners from rezoning of land over the years most rezoned land was agri before the maps were altered. Low rates of cgt at the time. No commercial rates on farms. Nothing negative in this budget for them and cap still rolling. Clever country boys being minded by Fine Gael nice and quietly.

  26. chrissu

    I think that in order to rein in reckless politicans in good times, and to limit the damage they do in bad times is a slight refom in the political/government system is required. Remove their power to nominate persons to quangos (and especially their special advisors). Recruit an independent recruitment firm to get the best people on these boards/special advisors. Major recommendations from these new quangos must be debated as a bill at the Dail, whereby hopefully, cross party support is achieved. I say this in order for example to get good business people in the decision making process in national politics, or independent economist or socioloigists or whoever who actaully knows what they’re talking about so that its not just the usual claptrap or same old shower with not an original thought between them, running the country into the ground. Anyway just a though to get more expertise (independent) into the decision making process in this country.

  27. Hannibal Noonan

    Th Dictat delivered by the Minister was not a budget as defined in the spirit of the original Finance Acts, that body of law he proclaims his his duties, and his enforcement of an alien concept .

    His actions do not fall under the word ‘intransigence ‘ because that is too kind to him .Instead we have to borrow from French Politics because the English language again fails us in the significant moments we now find ourselves in.

    We now see a character flaw in the Minister when he now resorts to ‘ jusqu ‘au – boutisme ‘.This describes hardline political policies to the bitter end no matter.

    In Democracy in America , de Tocqueville discussed ‘the concept of self interest well understood’.It was
    in his views why democracy worked and explains what Americans do when they act in self interested ways that end up being good for everyone.

    • Philip

      It is easy for Noonan to be so when he and buddies are protected. You hear the one about gelding the cattle with a brick in each hand. You might ask might that not hurt? To which farmer Noonan would say, not if you hold yer thumbs back :-).

    • paddythepig

      I like Noonan. I think he has a brain in his head, and talks sense most of the time. I would imagine he is not too fazed by your gobbedlygook,

      • So you like Noonan . Have you forgotten that a wild animal when he bites once he bites always as this Minister did when in Health and did so on the death bed of a dying woman .He made the French counterpart Laurent Fabius then look like a Saint .

        Originally Posted by Irish Times

        Brigid McCole

        In February 1994, the Blood Transfusion Service Board (BTSB) announced that anti D, a blood product given to some women after giving birth, had been contaminated with the Hepatitis C virus. It was the beginning of one of the worst scandals in the history of the State, one in which hundreds of women were infected through the extraordinary negligence of a State agency. The authorities were reluctant to give the women full information and an expert group report left many questions unanswered. Brigid McCole, a member of the campaigning group Positive Action, took a High Court case against the State with the intention of forcing full disclosure. She was already very ill and died in October 1996 before her case could be heard. The minister for health, Michael Noonan, who approved the State’s plan of fighting McCole all the way, told the Dáil that her legal team might have picked a better candidate for a test case. The State’s opposition to McCole had been particularly cruel. It completely denied negligence, even though it knew very well that the BTSB had been negligent to the point of recklessness. It even insisted that McCole not be allowed to take her case anonymously in order to preserve her privacy. And it made a lodgement in court that meant that McCole would face massive legal bills if she did not get large compensation. Even as she was dying, McCole was warned that her family would be pursued for these costs.

        McCole persisted in the face of this onslaught and her courage had two effects. Her case forced the BTSB to disclose a previously hidden file that showed that it had known about the contamination as far back as 1977. And public outrage at her treatment forced the State to establish a public tribunal of inquiry and a statutory compensation scheme. In 2002, Michael Noonan, then leader of Fine Gael, told his party ardfheis that he deeply regretted his handling of McCole’s case.

        • The BTSB blood products debacle, the way the state pursued the victims to their deaths, the Lindsey Tribunal, it’s findings and the under-reporting by RTE and most national media were shocking at the time and still remain so. The state carries on the role of oppressor of the Irish people long after the British have gone.

          • This blood curling Minister has more up his sleeve and well documented too in the dark corridors of the Mandarins and Bonn . These secrets bind the collaborators and assure their extraordinary salaries .Only the X-File can reveal what the public has been denied so far and that file will not take 30 years to be found either .

        • paddythepig

          I am aware of the McCollum case. He made a serious error, and has since admitted so. Are you perfect? Ever make a mistake? He is a smart guy, and was the one Irish politician I ever heard speaking out against overheating the economy ; this would be around the same time your legal buddies started borrowing themselves into oblivion. Maybe if they had listened to him, you wouldn’t be pleading their case now.

          • paddythepig

            McCole case I should say.

          • Harper66

            “..one in which hundreds of women were infected through the extraordinary negligence of a State agency. The authorities were reluctant to give the women full information and an expert group report left many questions unanswered. Brigid McCole, a member of the campaigning group Positive Action, took a High Court case against the State with the intention of forcing full disclosure. She was already very ill and died in October 1996 before her case could be heard. The minister for health, Michael Noonan, who approved the State’s plan of fighting McCole all the way, told the Dáil that her legal team might have picked a better candidate for a test case. The State’s opposition to McCole had been particularly cruel. It completely denied negligence, even though it knew very well that the BTSB had been negligent to the point of recklessness. It even insisted that McCole not be allowed to take her case anonymously in order to preserve her privacy. And it made a lodgement in court that meant that McCole would face massive legal bills if she did not get large compensation. Even as she was dying, McCole was warned that her family would be pursued for these costs…”

            http://www.thepropertypin.com/viewtopic.php?f=54&t=36160

            I would call that more than a serious error but again paddy you’ve been defending the indefensible on here for years.

            Bully boy tactics.

          • Harper66

            “was the one Irish politician I ever heard speaking out against overheating the economy ”

            Nonsense.

            He was spouting the same populist tosh as every other politician on the island. A look back over past manifestos should cure your selective amnesia –

            http://michaelpidgeon.com/manifestos/docs/fg/Fine%20Gael%20GE%202007.pdf

            http://www.irishtimes.com/focus/election_2002/parties/layout.pdf

          • paddythepig

            Harper66 and his usual sanctimony. How’s that halo round your head? I would have more respect for John Allen, pauldiv, tim, and even doflynn than you. They at least don’t distort the words of folks they debate with.

            Noonan made a famous speech in the dail opposing the budget in the late nineties, condemning the reckless expansionary thrust of Ahernes ireland. I was listening to him, what were you doing? Admiring yourself?

          • Harper66

            Don’t mind your opposition speeches in the Dail we all know what they are worth.

            I was busy reading their manifesto at election time. I have provided links to them here. FG manifesto was full of the same populist policies as FF.

            I haven’t distorted your words. I also don’t result to childish insults.

          • Dorothy Jones

            Don’t folks; not the way to go.

          • paddythepig

            So you never listened to what the man said. You then quote the 2007 manifesto, which Noonan had nothing to do with, he was in the political wilderness and not even on the front bench. He was only brought into the fold by Kenny when his shadow cabinet abandoned him en masse. In 2002, he did not engage in the populist electioneering of ahern and mccreevy, and got hammered by the greedy, shortsighted electorate, the 2002 manifesto is a sanguine enough document. You then appear here castigating the man without any grasp of what exactly happened? Do you ever read the news?

            You distorted my words many moons ago, and refused to extend the courtesy of accurately quoting another poster, despite being repeatedly asked to do so. And then you play the self pity card. Predictable. Typical.

          • Harper66

            Utterly irrelevant and not worth responding to.

            when some people lose an argument they result to insults.

          • Harper66

            …resort to insults.

          • paddythepig

            http://www.hark.com/liar-liiar/its-devastating-to-my-case

            Next time you post something, make sure you know something about the topic. You are making a fool of yourself by plucking documents off the Internet without having any knowledge of the broader context, who had input to those documents and who didn’t. You then for some reason disregard a speech made in the dail, as just like the Jim Carey character in the video, it would be devastating to your case. Then you dismiss what you’ve been told as irrelevant.

            Learn to research your topic first, and you might become a credible contributor.

    • Colin

      I find it very odd that you have huge sympathy for a well heeled solicitor living in a multi million euro mansion in Kiliney, complete with valuable artworks, who set up a company in the Isle of Man which owes €71,000,000 to an Irish bank, and he is seeking bankruptcy in Britain, where he rents an 8 bedroom house in Westminster for £4,000 a month, which they actually fucking own, whose value is £12,000,000.

      And after all this time you still can’t forgive Noonan for a mistake he made with Bridget McCole, a mistake he has admitted to and deeply regrets. For a man who advocates prayer, you seem to have mental reservation in your head, and set aside a part of your heart that is as cold as the Artic.

      What’s the problem John, did Noonan steal your teenage sweetheart all those years ago?

    • bonbon

      To put Noonan in perspective start with his direct connection to the Empire and its HSBC Bank

      His actions are clearly in line with British imperial policy which Mr. Blair so graciously explained at Chatham House Royal Institute of International Affairs – Brutal realpolitik

  28. molly

    David very well put .
    I am amazed when I watch the dail on tv and you see someone speaking from the opposition bench and while they make there point,you see the government ministers not listing ,playing with there phones ,looking at the ground ,letting on to read documents,picking there nose .
    It’s as if they hold the opposition in contempt ,like something you picked up on the sole of your shoe,the current government seam to forget when they where on the sideline ,what a bunch of tosspots.
    If we don’t get off our backsides and give them the gate we as Irish people will be destroyed .

  29. molly

    Gerald.Nash@oireachtas.ie
    This is the response I received when I emailed and said I would never vote labour again

    Thank you for your email. As you will understand, I have been in discussions with Ministers in relation to the Budget, both in advance of Wednesday and since decisions were announced and communicated in the Dail.

    There is no doubt that this is a tough budget.

    As a Labour TD, it was my priority to ensure that the budget is as fair as possible under the economic circumstances and that those who have the most will pay the most. In that regard, there has been surprisingly little attention paid to the radical package of wealth taxes we have introduced which, for example, target massive pension pots subsidised to the tune of Euro 200 million each year by low and middle income tax payers.

    I believe that there is a clear Labour stamp on this budget, protecting fairness. For example, we have protected core rates of social welfare for 1.4 million people. That means that core payments remain the same for pensioners, for the unemployed, for carers (full and half rate) and for those on disability allowance. Class sizes for primary and secondary (free) schools have been protected, while subsidies for fee paying private schools have been cut. SNA numbers were protected and disadvantaged schools were protected too.

    I very much accept that the reductions in the Back to School allowance and other such measures are hard for families to take. These are difficult by any measurement. I am only too familiar too with the struggle facing too many families who care for a loved one, in respect of changes made to the Respite Grant. This was far from an easy decision for the Minister.

    While there has been a reduction in child benefit which will be difficult for many families, the universal nature of the payment was maintained. This is an important statement of our values as a country that assistance should be provided to families to support child rearing.

    I understand that this reduction is a difficult measure for many families but there are measures in the budget to support those on low incomes:

    · Over 6,000 after-school places for children in primary school targeted at low income families
    · School Meals Programme for disadvantaged schools
    · Investment in a new approach to child poverty, starting with six of the most disadvantages areas.

    The additional after-school places will be targeted at low-income families where the parents are availing of an employment opportunity and will be specifically for children in primary school. The additional childcare will be of particular value to mothers who work outside the home and avoid the poverty trap where women who wish to work outside the home are effectively held back by crippling childcare costs. These additional places will not be a one-off. We want to build a system of universal free childcare to support working parents. Of course this should have been done years ago but we are now trying and will succeed in building it under the most appalling economic circumstances.

    We also protected the qualified child increases on primary social welfare payments and the thresholds for Family Income Supplement, which provides income support to employees on low earnings with children.

    With regard to the property tax, the reality is that Ireland is the only country in Europe apart from Malta that does not have a property tax and those countries also have stamp duty or an equivalent tax on property purchase (the rate is actually higher in the UK). The property tax which will be introduced here is as low as we could make it, being roughly only a quarter of what is paid in Northern Ireland. It would have been set at a higher rate if we had not secured the “mansion tax” for properties worth over a million euro.

    I would have very much preferred if it were not necessary to take €3.5bn out of the Budget (this was even agreed by the main Opposition Parties). It is simply not possible to do that without taking tough decisions. I do believe however, that the increased number of taxes on wealth (worth over half a billion) and the protection of core rates of social welfare, among with other measures, make this a budget that is as fair as possible under these unprecedented set of circumstances for our country.

    We have already lived through five tough budgets. After this budget, 85% of the Troika adjustment will be behind us. There is a very real end in sight to such tough measures. The Labour Party will continue to work hard to bring about recovery and jobs to our people.

    I would be obliged if you would keep in touch with me and if you wish to meet with me personally please ring the office to arrange a time that suits.

    Best regards,

  30. gizzy

    Heard a story from a guy who works in a bank last week.

    Client loan 15m security site in uk. site sold by receiver.

    How much? answers on a postcard.

    500k I kid you not. 3% of loan.
    .

    • molly

      At least the person who gave the loan in the first place in the bank got a good bonus hell he may even have got promoted and happy days for the Irish tax payer who’s left to pay for that fuck up.

  31. paul

    When FF were in power for years, FG and Labour voters waited and wished for the day “when we get in we’ll do it different”.Now that day has arrived. Anyone see any change?
    Time for a whole new mindset, starting with pols who are not full-time liars!

  32. Vichey Ireland

    During WW2 France was divided by the Germans into four parts Vichey in Northern France , Alsace annexed to Germany and Alpes Maritime to Italy and the South West Central to an exiled French Government .

    Ireland has been divided too . Vichey Pale ( Troika ) , Donegal ( Rebels ) , Shannon ( Ryanair & Aviation Moguls ) , Cork, Kerry & Westport ( Pharma Cuties all USA ) , The Fields ( Farmers & Foreign Whiskey & Dairy Companies ) .

    On a political level Petain = Brian Lenihan , Leval = Noonan .Don’t forget Leval was evil and sent unwanted French Commies and Jews to Germany to their death . Where have the Irish gone ?

    • bonbon

      Laval and Petain, collaborateurs, opened the door to that WWII invasion. And the Synarchists who ran ran that show were the Banque de Worms, now Lazard Freres of guess where. Same crowd. Synarchism, that bankere tool, dates from Napoleon’s time. Out of this came Mitterand and his demand for the Euro after German Re-unification, which yoke you now carry around your neck.

      Removing the DM was the price for Re-Unification, Mitterand and Thatcher said very clearly with the murder of Deutsche Bank Chief Herrhausen. Collaboration with this evil geopolitics is the cause of the FF/FG/LP debacle now. It takes very little homework to find the guiding hand of Synarchism, right next door.

      This time around WWIII is being set in motion with the Patriot missiles in Turkey. If not stopped it will have an insatiable appetite for cannon fodder. Will the collaborateurs

  33. transitionman

    Who will inform I am in Resistance

  34. george

    TO THEW PRESIDENT OF IRELAND MICHAEL D HIGGINS
    .
    Dear Sir,
    .
    1)
    I as an ordinary citizen wouldn’t mind paying a Solidarity Tax, that lets say would be the equivalent of what I’m going to have to pay for my Property Tax.
    But I’m totally oppose to the Property Tax because it is like putting a chain on the necks of people and families. And because people who is in negative equity, and already paid stamp duty, shouldn’t have to pay; not even rich people should paid it, because a home is a sanctuary for family life. Property Tax is the most unjust tax of all. It is basically another form of slavery.
    .
    2)
    At the same time I would like to see the Government of this Republic, to ask Corporations, Banks and Bondholders, for a reasonable and negotiated contribution to this so called Solidarity Tax, at least until a better solution is found, that would be acceptable by and for the People.
    .
    3)
    And I would like, that the President of this Country, Michael D. Higgins to show some initiative in this matter, and to say that he is ready to donate half or at least a quarter of the portion of his salary over 100.000 euro, to this so called Solidarity fund. And to call on all former and active Politicians, and top Civil Servants, who would like to show their patriotism, to follow suit. And that a Public Record is kept in this matter, at least until a better solution is found, that would be acceptable by the People.
    Kind Regards.

    • george

      Sorry for the typing error should read “THE”

    • bonbon

      That’s a bit silly – FG is paying BILLIONS to foreign “funds” and a couple of hundred thousand ( in lovely popular church silent-collection style ) will change that?

      Totally at odds with reality.

      Be a brave man and take on those vultures, no mere sparrows mind you, and singe their flightless feathers with Glass-Steagall burn the bondholders. No meek, weak-nerved need apply.

      • george

        Bonbon don’t be silly yourself! I know it won’t change everything, but at least we’ll see who is a real patriot and who is a charlatan.
        .
        I’m ready to pay a tax other than property tax as an emergency measure, and like me probably thousands more. But I don’t want to see people in negative equity, or people who already paid thousands of euro in stamp duty, to pay any solidarity tax. And Property Tax is as bad as paying bondholders, in the second I agree with you, and I admire your effort; so in the first you should at least agree with me. Cheers!

        • bonbon

          So it won’t change anything and give a “good feeling” – that’s Tiger’s at it again.

          The Troika, Austerians, Empire just love to see the masses destroying each other over crumbs. It gets that culling going, they are frothing for population reduction.

          Why perform this Holbein spectacle for entertainment of the Empire?

          • george

            Bonbon I said it won’t change everything not anything. And to get a big change sometimes is enough to start with a little something. If people get together and start to put massive pressure against these policies things can be change dramatically. How can you unite all the anger people feel and channel it through a movement that would be acceptable for all will be difficult, but if this is achieved they be “shiteing” in their pants! So what are we arguing about? From now on we should channel all our efforts in devising an effective and powerful way of organising massive protests…any ideas?
            To pay unguaranteed bondholders is as bad as Property Tax on Family Homes!

  35. The Laws of Exclusion

    During the Vichy Regime the French puppet government imposed the law of exclusion of Jews denying them of their rights and despoiling their dignity and fairness .

    This budget does that too to The Poor and Vulnerable.

    This is the first enactment only of many more.

    Hannibal Noonan is the author .

    • george

      John you are totally wrong in one thing…all this had been dictated to them by the Banks, Elites, and the EU. He is one of the many, among the active and retired politicians, that are ready to enslave our futures, in order to keep their inflated salaries, lump sums, and pensions.
      They are selling their soul to de devil, in order to please their masters. I feel even sorry for their relatives. Shame on them!
      .
      We need politicians able to write its own scripts, and the guts to fight for and with us!

      • totally ? amazing……just amazing

        • george

          John: totally wrong in ONLY ONE THING, he is not the author, it has been dictated to him, and to the others.
          Do you understand the joke now?

          • Well ..No…I don’t .

            The Minister for Finance has been vested with the Power of the Citizens of Ireland to fulfill policies as under The Constitution .That is what he is paid for doing .

            Are you saying he is receiving an extraordinary salary liken to a authorised legal bribe to act otherwise ?

            Are you happy in yourself that The Minister play the Samba with Bonn to their rhyme and music no matter what his responsibilities are under the Constitution ?

            If The Minister is doing what you say then is he the Minister we elected and if so who are WE ?

        • george

          John listen, first let me apologise for a bad joke.
          But then let me tell you this. I didn’t vote for this people, I voted Sinn Fein and Independents, because I thought we needed people ready to fight for us. But most of the people in this Country wasn’t ready for it, and most were quite infantile in their analysis, and hypocritical in their attitude, because they were asking people in the North to accept SF and implicitly they were saying we in the Republic couldn’t trust them; even as it was clear they had better ideas and the willingness to resist.

          The Constitution here is being use as an excuse, not to do any changes, that can affect the Elites in the Public and Private Sectors. As somebody said today they are there to legislate, and the laws can be changed. Most of them are a bunch of charlatans surrounded by spins doctors of every kind.

          I put to you the same question I put to Bonbon. So what are we arguing about? From now on we should channel all our efforts in devising an effective and powerful way of organising massive protests…any ideas?

          • This is a Forum George and you play well .

            My take on all of this is that we have no credible oppossition and most importantly no Leader . France had General De Gaule who both made the best leader and reformed the Constitution of the 5th Republic and embraced Absolutism for the Presidential Powers .

            We only seem to have a forum in Phoenix Park to hold poetry competitions.

          • Mc Dowell recently said that many of those in The Rising were Gang Criminals and all your men and women .And if anybody today were to replicate The Rising they have to prepared to be Shot .

            Is this what we are waiting for ?

            Love/ Hate has a large following .Can we deduce from this ? Will our next generation politicians morph from this enigma ?

            And …the meek will inherit the earth.

    • bonbon

      Hannibal, son of Hamilcar Barca[n 1] (247 — 183/182 BC)[n 2] was a Punic Carthaginian military commander, generally considered one of the greatest military commanders in history. He took on Rome itself, defeated them at Cannae, a battle studied at all military academies.

      To compare Noonan to Hannibal is a bit daft. It you mean the disgusting movie character, well that’s fiction and just shows the Tiger ignorance of history, something Noonan is likely not aware of either.

      It is the 5th or 6th austerity budget and SF have clearly said it is the step too far.

    • bonbon

      More acutely, Noonan brought in 2 “finance experts” from Dope Inc. HSBC to advise him.

      This shows the direct play of the Empire’s “invisible hand” at work.

    • bonbon

      Stiglitz fails to mention that the repeal of Glass-Steagall was under Cinton’s Democratic watch. The GOP deregulators are bad enough, but Obama is doing their work, so the party system is simply terminal. That entire system is from Andrew Jackson, the destroyer of the US National Bank and effectively blocks the restoration of a functioning economy. Its the party system itself that’s the problem.

  36. Adam Byrne

    The ‘Austrians’ are mentioned in this one:

    http://www.guardian.co.uk/business/2012/nov/22/income-equality-killing-capitalism

    I may have created a Monster!

    Over to you Mr. bonbon…

    • Tony Brogan

      Hi Adam
      As usual the guardian gets the solution backwards.

      “If governments, with their already high level of indebtedness, believe that they cannot borrow any more from the public, they should borrow from their central banks and spend the extra money themselves on public works and infrastructure projects. This is the only way to get the big economies of the West moving again.”

      I am afraid this resoution is more of the same.Big government borrowing by going into debt created by the continuous printing of more central bank funds added to the nation debt. Same falicy of adding debt to debt will solve the problem.

      “But, beyond this, we cannot carry on with a system that allows so much of the national income and wealth to pile up in so few hands. Concerted redistribution of wealth and income has frequently been essential to the long-term survival of capitalism. We are about to learn that lesson again.”

      There is demonstated no understanding that the inequality in earning and savings is caused by the very policy espoused as a solution above. That is the continual printing of money and the constant expansion of debt based credit.
      Adding to the money supply is the only cause of monetary inflation. It is the inflation in the total amount of money in the system that lowers its value per unit and thus one needs more of the money to buy the same amount of goods and services.

      Because of the waty the money is issued the beneeficiaries are the first to receive it. That is the chartered banks and the businesses closest to the banks and government contracts.
      They rerceive the extra money before its unit value is reduced by its introduction into the economy.
      These usually are the well conected businesses close to government or those that act interwoven with government in the modern neo fascist way.
      As the currency is recycled through the economy it is diluted buy the debasement of its value and peters out and those at the lower end of theeconomy receive little or no increase at all. BUT their current wages are debased as all currency units now buy less.

      So do the rich (well connected) get richer and the poor get poorer under our current mandate of central bank expansion of the money supply, and especially when borrowed and added to the national debt for all taxpayers to repay.

      For the Guardian to promote such policies as a solution demonstrates the usual lack of understanding of the banking system OR If they do understand their complicit involvement in the process of bankrupting the nations in favour of the central banking cartel.

    • bonbon

      There is a huge problem in the UK, and Europe right now. The best way to see their dilemma is this report from Frankfurt which I post in full. All “discussions” revolve around this :

      German Bank Officers Say, the Banking System Is Dead; We Want Bank Separation, But Not Glass-Steagall

      Dec. 8 (EIRNS)–Two German bankers, Christian Olearius (MM Warburg, Hamburg) and Bernd Thiemann (Nord LB, Rothschild, Hypo Real Estate) have a sarcastic one page essay in the {Frankfurter Allgemeine Zeitung} daily, headlined, “Bank Crisis Ailment Based on a System,” which states that banking, as it has dominated the past 500 years, is coming to an end. The extreme, short-term banking of today, the lack of any longer-term strategies, survival from one minute to the other, the bailout mania, all are clear evidence that the present system has reached its limits. Therefore, one is compelled to assess, they write, “that the financial sector is about to kill itself. One must pose the question to the bankers, whether they want to go on to apply mercy-killing.”
      “Speculative trading or structural policy, are not what banks shall do,” they write. Banks must return to the old and good practices of avoiding bad business and focus on good business, instead. “The first step to be taken,” they explain, “is to install a system with fixed demarcation lines between what corresponds to the genuine role of banking, namely to finance the (real) economy, and what serves speculation in one’s own or foreign interests.”
      “That must not imply a return to the old banking separation system,” they conclude, “not a replica of the fixed Glass-Steagall.” Well, what their arguments reflect, has shaped up in recent weeks as a specific German view of affairs: No real separation, but something in between that and the present universal banking system. Separation of bank functions would occur under one common roof, but with stronger fences than in the Vickers Report between the different sectors. That would imply clear rules on where real economic loans are to be granted, where the investment branch is to be placed, where the covered bonds are to be issued, and so on.
      The proposals made recently by German Social Democrat Peer Steinbrueck, as well as aspects of the EU’s Liikanen Report are reflections of that position. But they will not be the last word, because what sparks these proposals is the fight for Glass-Steagall in the United States, to which the Germans and Europeans have to react–whether they like it or not.

    • bonbon

      So these bankers see a 500 year banking epoch ending now but are not able to endure the idea that indeed it is ending, and to step out of it with full banking separation. Poor bankers, it must be a nightmare! They are trying to “triangulate” by adding a bit of the past to a little bit of the future to get the present mess, a comical scurrying spectacle. Glass-Steagall has them all in motion all right!

  37. bonbon

    Sinn Féin will table a Dáil motion of no confidence in the Government next week.

    “Fine Gael and Labour have broken their contract with the electorate and torn up their election promises. During the election these parties stood on a platform of standing up for Ireland’s interests in Europe; of ‘not one more red cent’ to be given to the banks; of protecting child benefit.”

  38. Deco

    Big public and political discussion concerning “the fiscal cliff” and the unsustainable trend in US Federal Debt Financing.

    The debt picture in Ireland is way out of control.

    And there is no debate concerning the issue.

    We even have the news media in Ireland describing the US Fiscal cliff in such a way as to teach the Irish public that more borrowing is the solution. In the Irish context the borrowing is to carry the inefficiencies loaded into a wasteful, largess laden state system.

    • Tony Brogan

      No doubt debt is the problem. Where and how it arrived is the general ignorance.

      Very few understand the money creation inplications by the central banks or the legal fraud that is the fractional reserve banking system.

      not just Ireland either but world wide.

    • bonbon

      We know here and all over the press, that Glass-Steagall, burn the bondholders, is the way to go, and it will happen one way or the other.

      Its not a good idea to sound like those FAZ bankers, trying to triangulate. That’s a symptom of a past epoch. Then massive projects held up by the austerity flagellants, will begin.

    • We need a five year plan with worst case scenario where no growth is foreseen. Maybe that would at last bring home the fact that in fact we are not progressing toward a solution.
      The objective of returning to the markets means simply paying more for the money we have given to the banks and / orburned in the promissory notes. Reality check please

  39. bonbon

    Something very familiar is going on in Iceland :

    The Iceland model was to refuse state responsibility for the international private debt of the banks. To keep the nation going, the domestic side of the banks was saved. It was an absolutely crucial decision, but it means that there is a lot of cleanup to be done left in the domestic part.

    Discussions with representatives from the organizations of debt owners on Iceland, bring out the point that more or less every middle-aged person or small business is in debt, which is out of control. The domestic debt problem for most Icelandic families is blocking their economic activity and that of the nation.

    The website of Homes Association of Iceland describes the vicious system of mortgage loans indexed to inflation or foreign currency, which has been conserved in the new banking system. Some of the mortgage contracts were bought up very cheap in the crisis and are now reclaimed for their full value by the new banks, which are behaving like vulture funds. The Homes Association writes:

    “While rampant inflation would ordinarily cause inflation-linked mortgage payments to rise sharply, these loans have additionally been engineered with graduating payments and negative amortization schedules, leading to compounding interest accrual and in the long run exponential growth of monthly payments. The ever increasing costs inevitably lead to a variety of economic calamities and human tragedy.

    “Since originally introduced, such contracts have become so widespread as to currently represent 85% of the Icelandic mortgage market or around 75% of GDP, one-third being accumulated cost of inflation or around 25% of GDP. Through the years, this risk transfer mechanism has imposed enormous liabilities on the homes which for many have turned out to be an impossible burden to bear, resulting in thousands of families defaulting on their payments and facing foreclosure. Additionally in the years 2005-2008, some 10-15% of the market moved into loans linked to foreign exchange rates, which has since then doubled in price forcing many families into bankruptcy.

    “These lending practices have repeatedly sparked protests, even riots in the streets, and 15% of registered voters signed a petition for abolishment, but have gone ignored by authorities despite polls indicating 80% support of the public at large. In 2010 a Supreme Court ruling the [foreign exchange] FX-indexation turned out to be illegal since an amendment was made to the law in 2001.”

    The Supreme Court decision has not been implemented, so index loans are brought to foreclosure, even though it is illegal. On the other hand the financial market is blocked by the Supreme Court decision, since a big part of the assets of the new banks are not settled. No one knows the value and neither the banks nor the mortgages can be traded or used as collateral. The banks are keeping a big part of the foreclosed houses on hold, waiting for a new housing bubble to make it possible to reclaim their values.

    With the introduction of Glass-Steagall, Iceland can get a domestic banking structure more dedicated to productive credits for the real economy and which would therefore be more open to an orderly write-down of all the index loans according to the Supreme Court decision. The Iceland model needs Glass Steagall.

  40. transitionman

    Finally they find the balls
    “The fact of the matter is we can’t pay” says Min Rabbitte.

    • Adam Byrne

      I’ll only be happy when they are all shown the door. They have no balls, they are all cowards. One sentence doesn’t make up for that. We need new blood in a totally reformed system.

  41. Philip

    The key couple of words in the article is “Inpotent Government”. I wonder if the party based system is causing us and possibly many countries a lot of problems.

    Just to take an extreme, one observation about extreme decision making in combat and war (to commit any level of cruelty needed to get the job done – lots of historical examples abound) is that the motivation has little to do with politics or ideology but the devotion that exists for a soldier’s band of brothers. In times of extreme crisis the bonding among brothers is at its most intense. (The Killing – Little, Brown 2009). In a party, we do not blindly follow the whip or the control of authority, but the cues provided by the baseline morality of our immediate communities. I am paraphrasing and extending to any power group that comes under attack like FG, Lab and like what FF were. There is actually a name for it – Identification-base followership”. In effect the leaders become garrisoned from the people. So if you take the case of Noonan in the Hep C case – it was either “the Party” or the unfortunate woman. No contest. And so it will be for NAMA, IBRC or anything else. Blaming individuals is a waste of time. This structure combines with an arse covering civil service is always going to be problematic.

    To make matters worse, many of the party members are 2nd and 3rd generation. These guys genuinely believe they are natural rulers with special rights over us.

    I look at the DDI and the independants and it is painfully clear that as a nation we have bought into the party system hook line and sinker and not realised it has created a monster who very existance conveys a special treatment from foreign elites (Bankers etc) and makes them not so much leaders, but increasingly brutal administrators.

    December 10, 1948, the UN General Assembly (UNGA) adopted the Universal Declaration of Human Rights. In 2012 it is under attack in many ways. I think people of many so called democracies need to pay more attention to this as they give away their voting rights to groups who will put the party before the people.

    • Philip

      Maybe the time has come to risk the fresh ideas of the untested few rather than risk extinction by over relying of the atrophied ideas of just sticking to what we know. We have to move out of our comfort zone.

      • transitionman

        Well said that is why I threw out the idea of The 4 angry men running Ireland.
        We urgently need to get people to think rather than assume everything stays the same. Some posters here can see FF FG Lab SF will not be the future.

    • bonbon

      The so-called party-system has destroyed the US. Andrew Jackson brought this disease in to demolish the US National Bank. Since then this legacy has poisoned every attempt to re-instate Hamiltonian Banking.

      Arthur Griffith wrote that “Sinn Féin is not a party. It is a national composition…. We must sink ourselves, that the nation may gain from our unity.”

      We have a historic precedent!

  42. george

    The mantra of most of this Government goes something like it:
    .
    “We are an island surrounded by water” (*of course, do you know of one that isn’t?),

    “cut off mainland Europe” (* you mean like Britain and Iceland?),

    “and we all agree we are not going to increase the lowest Corporation Tax in the World one iota, not even half of one percent” (* don’t you think you should, when it is several points below of what they pay in most Countries of the EU?),

    “and we are going to pay all unsecured bondholders up to the last penny to safeguard our reputation” (* you mean as a bunch of eejets?) and now we are turning the corner (* you mean to hell isn’t it?).

    • george

      “and believe us that there is anything else we can do to improve the economy, like lowering our salaries and high pensions, debt forgiveness for the people, and other things like it, because our legal advisors told us that it could be unconstitutional” (* you mean the spin doctors that are earning as much as you do?)

  43. My main issue with this article is the following sentence:

    ‘An economy can only grow if its own people spend more or if foreigners spend more on goods we produce.’

    It’s not a completely accurate description of how an economy expands at all. Ultimately an economy expands because its own people organise loans from their banks and in doing so the banks create more money for the economy.

    Once again David, I know that when people save rather than spend there appears to be less money during a recession but again this is an incomplete description of how recession occur. During a recession people pay off more debt than they repay and you repay a loan to a bank the money no longer exists.

    • bonbon

      Calling this a “recession” is completely inaccurate – it is a Depression, the worst ever in history. And the way out of a Depression is well proven by FDR’s methods in the 1930′s, now urgently to be applied by all sovereign nations with Glass-Steagall to hive off the utterly non-legitimate debts which then will no longer exist.

      The breakdown in the physical economy hidden by the fascination with monetarism’s simple logic, must be remedied with public credit for massive programs. This is not a matter of someone’s private account or wallet. A Reconstruction Finance Corp with full Hamiltonian banking is the way to go.

    • KD

      Dear all,
      Once again these pages demonstrate a serious problem – the economic belief in infinite growth!
      Paul, David and, even you “bonbon”, are all singing off the same hymn-sheet.
      The problem with the modern economy is the fundamental belief that money begets money. This hides that fact that the reason we have been successful as a species, and in the context of these discussions, why money can beget money, is that we have been able to throw cheap energy resources at the fundamental human needs: food, shelter and health. Does anybody reading and contributing to these pages really believe that population growth and economic growth are not fundamentally correlated with the free availability of energy? (And it is effectively free – notwithstanding the hype about the expense of petroleum). The Greeks were probably as technologically advanced as us: their only problem was that they literally hadn’t enough energy (cheap or otherwise) to accelerate development.
      So when I read that “ultimately an economy expands because its own people organise loans from their banks and in doing so the banks create more money for the economy”, I begin to despair. And David, I find I wince a little when I hear you speak of “my spend is your income and your spend is mine”. Where is the productivity in these equations? – they are by definition zero sum – perpetual motion machines. If we don’t make something, expend effort (even using cheap energy), then I fail to see how there will not be a day of reckoning. All that is happening, to my economic uneducated eye is a borrowing from the future. bonbon, you’re in the same boat: government throws money at projects and then the whole merry-go-round begins again.
      This is not to say that we will not get out of this mess. And in fairness to all three of you, your suggestions are actually valid in the context of infinite growth economics. But if the contributors here don’t fully appreciate the complexities of the relationships between resources, money and population, then I’m not too optimistic about the future! The only question in my mind is (selfishly) whether that is the short, medium or long term future.

      • transitionman

        Thanks KD we singing off the same sheet

      • bonbon

        We all understand very well the utter failure of the monetarist idiom. And the totally false beliefs pervading economics that it is a form of ecology where bacteria are no different to people lead to incredibly greenie “Limits to Growth” in the swamp. Nothing is more daft than that moldy idea.

        The key to this is a metaphor :

        Triple Curve typical Collapse Function

        What is crucial to assimilate is the simultaneous action of all 3 curves. The almost infinite monetarist “growth” is sickening enough, but look at the collapse in the physical economy, the very basis for human civilization. To propose to cut that economy is literally suicide, and as we know assisted suicide is a bad idea.

        The way to counter the entire crashing disaster is this metaphor – that economic collapse is the key. Put it on the table, firmly – it gets monetarists frothing! And do not Whistle Dixie!

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