April 25, 2013

The end of austerity: the start of opportunity?

Posted in Irish Economy · 151 comments ·
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The forces of austerity are in retreat all around Europe and the world. Let’s make no mistake about what this means. The word ‘austerity’ has come to mean many things, but austerity is shorthand for the European policy of lumbering citizens with the debts of the financial markets and contending that the resulting increase in the national debts is the cause of the problem, rather than the consequence.

Then, in order to heighten people’s anxiety, the policymakers continued to genuflect to the financial markets’ verdict about the policy when it was financial market unsustainability via excessive lending that caused the problem in the first place.

Obviously not all the increase in the national debt has been due to the transfer of money from the citizen to the speculator; a significant amount of the debt problem is the consequence of the crash itself and the impact of the crash on people’s balance sheets.

When assets collapse at a time of high debts, four separate but linked things happen which propel the economy on a negative trajectory.

First, the balance sheet of the broad middle breaks apart. This is because the “assets” of the middle class – houses, apartments and land – collapse in value. So the asset side of the balance sheet shrinks. In contrast, the liability side of the balance sheet expands because it is weighed down by the debt that was taken to buy those assets. How many people do you know who are in that situation right now? Another term for this is negative equity.

Second, resulting from the broken balance sheet, people are worried about the future. This means that even those people who have money and an income save. Those without savings and whose income is under pressure try to pay their debt back. All this means domestic demand is punctured. Retail sales drop and spending falls.

Then something odd happens: retailers respond by cutting prices. But when people who are worried see prices falling, rather than conclude that there is a bargain to be picked up, they conclude that prices will fall further, so they actually spend less. We are witnessing this in the retail carnage in Ireland at the moment.

The third development associated with the collapse in asset prices is that interest rates don’t work. It doesn’t matter how low interest rates are, people have too much debt and they don’t want to borrow and the banks have too much bad debt and they don’t want to lend. So money gets stuck in the banking system.

The fourth thing is that the “paradox of aggregation” takes hold. The banks tell the customer to sell their asset to recoup losses. This sounds sensible, doesn’t it? But it is only sensible if one person sells and everyone else buys. But what do you think happens if everyone is told to sell their assets at the same time? Obviously, asset prices will fall rapidly and while the debt remains the same, the paradox is that the person who tries to pay down debt quickest gets into more debt.

So the upshot of all this is that the savings ratio of the country rises rapidly and tax revenues fall. This causes the budget deficit to rise because the Government has little choice but to try to maintain demand in the face of the quadruple whammy to the economy. If it can’t sustain demand from tax revenues, it borrows the money and the national debt rises.

So you can see that the budget deficit and the national debt increase are the consequence of the downturn not the cause.

However, somewhere along the way ‘conventional wisdom’ decided that the analysis worked the other way and that the national debt and the budget deficit were the cause of the problem. So we get the policy of reducing the budget deficit at all costs.

Anyone with a brain can see that if you cut government expenditure the economy will slow and poor people will be hit hardest because they are most dependent on the State for income.

Taking a bit of altitude, when interest rates are 1pc in Europe and unemployment is 25 million, there is no demand for capital and there’s a massive excessive supply of labour. That’s what Leaving Cert economics would tell you.

But even in the face of reality, the proponents of austerity had to come up with a faux theory as to why austerity was necessary. The main plank of this was research by two economists from Harvard, Ken Rogoff and Carmen Reinhardt, who came up with research saying that historical data indicates that when debt-to-GDP ratios rise over 90pc, the economy of the country falls. This was taken as gospel until last week when other economists looking at the same data proved that Rogoff and Reinhardt had made some elementary statistical mistakes and there was precious little evidence to indicate that a certain national debt figure triggered economic Armageddon.

The IMF has been making squeamish noises of late as they see European growth plummet, unemployment rise and income fall.

Now that the intellectual pillars of austerity are seen to be made of salt, the politicians are jumping ship. Jose Manuel Barroso, the boss of the EU Commission, has said that austerity may be reaching its limits.

Even Michael Noonan, a supporter up until yesterday, has had a volte face extraordinaire and is now saying that the Irish presidency has been working tirelessly to dismantle austerity behind the scenes. This is obviously why the Irish presidency oversaw the austerity-driven shambles in Cyprus two weeks ago!

If the policy is abandoned, you can look forward to relaxed budget constraints, some tax cuts and possibly even spending increases on public infrastructure. The debt burden will have to be kicked out for many years. Given that any relaxation of austerity in Europe would force interest rates up, there is a debt tsunami in the guise of defaulted tracker debt coming down the road. Now would be a good time for the Government to try to get a deal on mortgage debt.

If austerity crumbles, all bets are off, new deals will be signed and the old rules will be thrown out. This is an enormous opportunity. Ardent supporters of austerity, like ardent communists turned capitalists in Russia, will embrace the new reality. The King is dead. Long live the King!

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  1. Adam Byrne

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  2. Puschkin the Black and White Cat

    I have house plant that I sometimes forget to water. Sometimes he weathers but usually a bit of water will revive him.

    I just don’t think this will happen this time. My firm belief is that the system is broken. Also, we here in Ireland cannot benefit from a change in fiscal/financial doctrine, because we have failed as a country.

    We need root and branch political reform. If anything good could be said about the past 15 years it is that we (Irish) have become focused on our method of government and have realized the need for reform. Let’s hope this initiative will continue.

    I hate to say it, but beware !, the light at the end of the tunnel may be an oncoming train.

    Nothing has changed, still the gombeen rules.

    • joe hack

      The interesting about flowering plants is that when you starve them the plants automatic response is the flower. Take what you will from that:
      Survival instinct:
      Austerity is over?
      Famine torn country have more births that well fed countries?

  3. Grey Fox

    Barroso also said the the Austerity approach was 100% right! how can the 100% right approach have limits?
    also
    “But what do you think happens if everyone is told to sell their assets at the same time?”
    what do you think would happen if all 200k distressed mortgages suddenly placed “For Sale By Owner” in the front garden…..

    • Puschkin the Black and White Cat

      Perhaps such a scenario would not be too bad, it would lance the carbuncle of property and for once and for all demonstrate that property can NEVER underpin a functioning economy.

      Imagine an Ireland free from property were pure ability and hard work made money and not ownership and hereditary aggression!!

      Get into the front garden and let’s get the signs up.

      • Adam Byrne

        Hard work, haha yeah right. Hard work on get rich quick schemes is what people around here are interested in.

        • Peter Atkinson

          Yes Adam get rich quick schemes indeed. Schemes like iPhone Apps being designed by 10 year old smartphone junkies and being highly publicised by our media and our glorious leaders.

          I was talking to a primary school teacher recently who told me that he caught a young lad of similar age in the classroom on numerous occasions tapping away on his iPhone. When he challenged him he was informed that he was developing an App and needed to have it completed in the next week. Shocked wasn’t the word and when he probed this further he was informed that his parents knew of this and actively encouraged it. The first thing that came to mind when I heard this were the lyrics from the Pink Floyd song Another Brick in the Wall “we don’t need no education…… All ‘n’ all your just another brick in the wall.

          • clsnclsn1

            sounds great. This is exactly what we need. IT literate, creative kids…and conscientiously working towards a deadline. It’s a pity that his teacher did not teach him that

          • dwalsh

            That young lad is showing creativity and ingenuity.

  4. Seanie

    Politician – “We’re sick of austerity, lets try spending more money”
    Market – “Go find your money somewhere else or get your central bank to print it”

  5. ps200306

    What does “the end of austerity” mean in Ireland? I can understand as well as the next man that too rapid a contraction of government spending can cause problems for the economy. We might need some counter-cyclical spending. But before we decide which is the best way to where we need to go — without wanting to state the obvious — we have to decide where we need to go. And could some kind person fill us in on where that is?
    During the bubble years, we had a completely false economy fuelled by spending other people’s money on credit. Clearly, that can’t be where we want to get to. That’d be like an unemployed kid saying “if only I could catch a break I could go back to living on the parents’ credit card”. No, we do not want to go back to where we came from, we need to go forward to a completely new type of economy. It can’t be one where 20% of employment is in constructing houses that nobody wants, needs, or can afford. So where is the evidence that we even recognise the problem, let alone are trying to fix it? Talking about ending austerity in Ireland is like telling an alcoholic that the empty beer keg in the cellar is finally being changed. They’re already queuing at the bar in anticipation, instead of seeing an opportunity to do something more productive.

    • Puschkin the Black and White Cat

      +1 , we need real change , lets do something new , in your analogy the beer what destroys the alcoholics is the property fixation that has and will ruin Ireland

    • markodxb

      well said ps200306, we cannot go crazy on borrowed money/time again.
      If the keg is filled we simply cannot keep the ‘tab’ open. we need control(s)/regulation. Unforunately we are not in control. We do not have our own currency, we do not have influence on european policy we just do as euro minions do and that is what we are told.

    • clsnclsn1

      How about going to a place where we invest in education. In maths, science, technology, creativity. A place where we embed a work ethic in our kids. Show them that they can compete on the world stage and even lead it, even thought they are born on a pissy little island on the fringes of Europe. A place where we show a sense of respect and caring towards those in our society that are struggling and down on their luck. Where we focus on how we interact and treat each other rather than how we compete with each other. A place with less religion and more civic value. With less of an sense of entitlement and more of a sense of self respect. That doesn’t sound too much to ask to me, or maybe it is. But I know that’s place that i would want my kids to grow up in.

  6. markodxb

    it’s a very simple scenario. Germany Lead Europe imposed austerity without due consideration of its effectiveness, or in another way they didnt care. They wanted ireland to take its ‘bad medicine’ along with the PIGS to teach us a lesson and set example. Merkel needed to keep her bunch happy also especailly since they were not all going crazy on borrowed money. Now German export is slowing and flags are being raised Merkel/Germany has changed her tune and their euro minions (Noonan, Barroso & the like) are being despatched spead the new word. Viva Deutcshland Ober Alles

    PS: once austerity goes, Ireland will no longer be the good little poster boy of PIGS.. i guess we wont see Enda Kenny on time magazine again!! how embarressing and transparent was that!!

    • Adam Byrne

      Kenny the Muppet.

    • Puschkin the Black and White Cat

      When the poster boy is no longer “good”, guess what ? , bet the “special” coporation tax will be gone in 2 years.

      Good or bad I don’t know, but grow up floks, this is only begining.

      Deep down I detect “change” is on the way. I like that !!!.

      The gombeen King Knuts won’t stop it then.

      • Eireannach

        The Irish corp tax is going to go into the dustbin of history in the next few years.

        If the Irish predicament could be likened to a game of chess, this will be like the Euro-Queen swooping across the board to take our ‘Queen’.

        We should all be thinking about this, it’s implications, it’s ramifications, how we might respond.

        But we’re not, we’re saying ‘we will keep our Queen’. Of course we would say that, but they lack of strategy in our gameplay is so obvious, of course we’re going to lose our Queen and of course we don’t have a plan B!

        We are in a power struggle in Europe and we are crap, reactionary players with no strategy of any kind. It’s humiliating to admit I’ve anything to do with this team, but I’ll remain in Ireland because in the land of the blind, the one-eyed mind will find plenty of open-goal opportunities, and I’ve found two already, even in this depression.

        • Eireannach

          its implications, its ramifications, excuse me.

        • clsnclsn1

          The tax rate is not disappearing. But it will not make any difference unless we address our foundations. Educated, mobile, creative staff. Ireland’s cost structure. Maintain the ease of doing business here. Our competitors will find ways to compete with us and undermine our competitive advantage so we need to reinvent to stay ahead. Same as any company/country. Ultimately the tax rate is irrelevant.

          • Eireannach

            Of course the tax rate IS disappearing!

            Herman Van Rumpoy wants a conference on the subject of tax harmonization. Do you think the Germans and the French have forgotten about our predatorily low corp tax? Of course not, just because they haven’t moved against us, doesn’t mean they are not waiting for the opportune moment.

            Another crap chess player, who thinks the Queen is safe because ‘they (France-Germany) are not moving against it’.

          • clsnclsn1

            they are already competitive. The French REAL corporation tax rate is lower at around 8%; far lower than the nominal. We are a whisker below nominal. The market has already adjusted. The low rate is NOT disappearing.

  7. crazy cat

    Cracking up… http://www.youtube.com/watch?v=fCBm_IESaVA

    New French labour laws were voted. Voted in the Assambley with 257 odd T.D’s present. Then voted through the Seeat , with the Governement using a procedure – repulsed by them when the others did it – of passing the whole law without full discussion on the amendments.

    Not being familiar with the terms in English , bit diffucult to explain, but the result will be slave labour and sucide.

    In French, an explination from Gerard Filoch, an ex work inspector, who somtimes must feel he is preaching in the desert. T.V., radio, papers , and all politicians avoided news or discussion.

    http://leszinzinsfrivoliens.over-blog.net/article-en-passant-117309467.html

    And a written article from the ever vigilant, Frédéric Lordon

    http://www.comite-valmy.org/spip.php?article3423

  8. joe hack

    Have they found a goat to escape on in Ken Rogoff and Carmen Reinhardt?
    BUY! BUY! Al that disco will come crashing down again?

    I Used to play a game when was five or so, the game was called “Follow The Leader” myself or one of the others kids got in front of a human train.

    When following the leader it was fun as you could slag the leader off when they marched us to a dead ends.
    When leading there nowhere to go that was much better that the last person’s attempt as the choices was limited in a garden.

    The stick you got when leader was hard to take in most cases we walked in snake like circles. When leader I would start to walk in circles until I crabbed the waste of the person on the tail end of the train it took quite some time before people realised there was no leader but ‘We’ still followed ‘Me’. Was I a leader?

    The doldrums have arrived now let change tack that might work after all we are stuck but this new tack is not based on intellectual discourse is it?

    Finding a flaw in some else’s calculations does not prove the opposite is the right “Just Cos” is not an intellectual augment I would follow, but then I am stuck in the circles with everyone else.
    Welcome to a rudderless ship
    Have they found a goat to escape on in Ken Rogoff and Carmen Reinhardt and have they balanced the books as much as the public will allow (have they sensed breaking point)

    Now the disco starts with a new mutation of the of our moronic money system see you back at the beginning or end which ever.

    Oh my god AIB have Increased their Mortgage rate – I better buy before in rises again? The Independent had huge headline telling us austerity is over – BUY! BUY!

    Austerity is an oxymoron Just Cos but my logic detects it is too Just Cos-the money system is flawed that need to be fixed before the next bubble kills us.

    Now I am off to dig up my bell bottoms and deco with the madden crowd until puck rock come back and says it like is? Too much disco killed the last goose.

    Ps David I wised you had more time to write that story above it seems a little rushed maybe you come back to it.

  9. molly

    the flawed system is going to crash and burn,to much money loaned out.
    infact the banks cant cover this they have nowhere near enought cast and the government dont have an endless supply of money,
    what chance we did have was givin to the bond holders.
    this country is been run by mad men and the dont seam to undrestand the word no they can understant no from banks.

    • joe hack

      Hi Molly,

      Money is not a “thing”

      Their are some MaD women out there don’t be sexist now.

      Keep your spirits up find a disco near you and be assured there is a rose out there that needs someone to smell it.

      Stop for a while and take time for molly to smell her rose.

  10. joe hack

    The definition of optimism has change beyond recognition in the last decade

    “George Osborne has welcomed news that Britain’s economy expanded by a stronger-than-expected 0.3% in the first quarter of 2013, avoiding a triple-dip recession.”

    Was that rounded up from 0.250009 % or down from 0.34999999%?

  11. Peter Atkinson

    Just been announced that Spanish unemployment is at its highest level since records began running at 27%. It now transpires that a new law is being passed by the Spanish government preventing property owners from renting their property to tourists. It seems that this is being driven by the powerful 5 star hotel lobby who state that this practice is taking food from their table and causing job losses. The government are also attacking the privately owned bars and restaurants by sending out inspectors and closing these establishments on a whim. A bit like our government closing B&Bs restaurants and bars in the city centre because The Shelbourne and other hotels want tourists to spend all their holiday money in their establishments.

    My advice to owners of bars, restaurants and holiday homes in Spain and its islands is sell up and get the hell out of it taking a loss now before you take a wipe out later.

    Europe RIP

    • joe hack

      Apparently austerity does not work!

      • Austerity works fine in a boom but not in a bust.

        The world is full of messages that one saves in the “7 good years” in order to survive the following “7 bad years”.

        The Pharoah had a couple of bad dreams. He was saved by Joseph.

        That is how Egypt became a super power!!

        Now the profligate want to penalize the prudent.

        Savings are bad, are anti social. Spend , spend!! How can I spend? The granary is empty.

        Your saving is my income. The more you spend the more I earn. It is selfish to save!

        The world is MAD. No saving a madman.
        So save yourself. To hell with the others income, keep your savings and only spend when you need to.

        Greedy, green eyes of envy abound.
        Grasping hands will rip you down.

        Personal austerity in a time of plenty will save you.
        Save for yourself, to save yourself.

        Mr McCorber. Income 20 shillings, spending 19s6d happiness.
        Income 20 shillings, spending 20s6d misery.

        • joe hack

          Enjoyed that good stuff:

          Micawber: Poor but lives in optimistic expectation of better fortune. Would that in these times be called Great Expectation and would Uriah Heep = the banking system.

          You can only save if you have a few shillings to spare the profligate did not save the fiat money because it did not exist they borrowed on expectation to buy greed based valued assets don’t be mixing it up.
          Remember the pension fund and the 1 for 4 savings scheme that McGreevy set up. I slight theory that he and, or the mandarins had Idea what was coming so he used the only tool he had remember we all in a euro system that the Irish government does not control they are but local councillors. The pension money has been deleted so much for saving faith.

          Money is not a thing of value it is used a “ tool”, I do for you if you do for me. Saving on mass removes money as a faith based tool it compounds the problem.

          Tony I am happy to do some work for you if the other guy, a famer maybe, gives me food based on the work I do for you.
          Let’s remember you are advocating saving in depressed economy not the reverse you are circling the wagons in a tribal village mentality sort of thingy. A bit like Young Un in North Korea and then the outside world is compounding young Un stance that is not a way forward.

          Tony what would you like to buy?:

          I have radiated apple in a bowl it has been there for six months or so it’s my only savings I expect in may last another six by the looks of it . I had realised at the age six or so that not all people can be rich as it would be similar to everyone been poor but I got side tracked so I can sell you a book on how to get rich this book has just made me less moneyed, you can have for a loaf of bread which I value more than your gold.

      • Confirmation biases contribute to overconfidence in personal beliefs and can maintain or strengthen beliefs in the face of contrary evidence. Poor decisions due to these biases have been found in military, political, and organizational contexts.

        http://en.wikipedia.org/wiki/Confirmation_bias

  12. Deco

    The only constant in any of this will be the obsession of the parasites at the centre of the power completx to increase and control the rest of society.

    In fact it has been the only constant in the entire EU Imperial adventure since the Treaty of Maastricht.

    This is what it is like to be in an imperial racket. We were in one before, and now within three generations we are back in one again. We never really attained freedom, because the gombeen culture survived independence, and is now back in business, at full throttle screwing the people again.

    They will only become sceptical about austerity when they realise that it is undermining their pwoer and credibility.

  13. Deco

    It is a came of poker.

    And if you are being honest, then the chances are that you are being robbed.

    The only honourable course of action, to preserve your own honesty is to be a tight as tuppence. That is the only truthful course of action.

    And all of you have been dosed to the limit of propaganda to make you think that this is the most dispicable and most vulgar behaviour considered possible.

    The system of social mores in today’s Ireland is highly effective at undermining any effort by people to be free, or even slightly autonomous.

    It is a “good room” type complex that is killing each and everybody.

    • Eireannach

      Deco,

      People will be ‘as tight as tuppence’ if they believe tomorrow will be worse than today.

      Anyone who studies peak oil, world water shortages, world grain reserves dwindling as annual grain consumption worldwide literally doubled (!) over the last 10 years dues to Chinese and Indians eating more animal meat, animals which are fed by grain, overpopulation, a burgeoning pollution problem, food quality issues….

      ….anyone who understands all of the above, understands that we are facing decades of contraints, adjustments and adaptations.

      It’s not the end of the world, but it is the end of squandering and overconsumption.

      Talk of ‘getting people back spending again’ is just economic blah-blah about economic cycles. Those same economists who want us to spend again, because their models tell them that the depression can’t end until the consumption lifestyles resume, those same economists are actually NOT READING the ground-breaking texts currently being published by the oil geologists of the Association for the Study of Peal Oil, food experts like Lester Brown, and so on.

      The MACRO-trend, for the next few decades, is contraints and contractions at all points, which obliges us to engage in the difficult hands-on work of redesigning our money and food and transport systems. As far as the pre-crash paradigm of ‘business as usual’ consumerism is concerned, the macro-trend from here to 2050 or later (!) can be called ‘constraints’ or ‘contractions’ or, even, the dread-word ‘austerity’.

      Yes, governments could and should invest in infrastructure for this world to come, but that’s not the same as a resumption of the consumer lifestyle of the previous decades.

      The ecological underpinnings will not allow us to expand – not our credit system based on debt, not our transport system based on oil, not our food system based on 30-50% waste.

      There can be no return to the old business as usual.

      So all this talk of the end of austerity is just bollox based on the population’s fatigue. But nobody can promise and end to austerity, and a return to business as usual.

      We are at a revolutionary point – we cannot go on with austerity, but actually we cannot return to growth.

      Expect people to start to go mad in the next few years as many of them will fail to adjust to this new reality.

      Debts that can’t be paid, won’t be paid.

      People that can’t adjust to a world of contraction, won’t adjust to a world of contraction, and we’ll have their mental illness problems to add to the rest of out mounting ‘to-do’ list of problems.

      • Excellent reply to Deco, Eireannach and glad you are calmer. I sometimes smile when you are letting rip but with all the shite we have to listen to every day a man can not be blamed for letting rip. Controlled pressure release is healthy

        Both posts were on the money and I agree this is the new reality; people can’t face it and they will go mad waiting for a glimmer of hope

        I remember the 80s and they were rough but this is far worse because we are entering a far more dangerous era where the walls are fast closing in on our freedoms and basic human rights. We are in day 80 of a hunger strike in Guantanamo Bay and no-one in Ireland is talking about it

        David is right when he says this is a time of opportunity. Thanks to the internet we all have the opportunity to have no excuses for being asleep

        The problem is that 95% of the population is asleep and won’t waken up

        • Adam Byrne

          …and never will….

          Obedient workers, as George Carlin calls them.

        • Eireannach

          Pauldiv

          Consider John Robb’s excellent blog on this:

          http://www.resilientcommunities.com

          His latest post is about the following:

          ‘My father had one job in his life
          I will have 7 jobs over the course of my life
          My kids will have 7 jobs at the same time’.

          -Seth Godin

          We’ll all have to do numerous odd jobs, like buying and reselling on EBay, a spot of kitchen gardening or manning a food stall in a farmer’s market, etc. I work as a self-employed tourist guide in French, and mercifully there is lots of work, but I need to diversify into tourism consultancy, travel writing for Lonely Planet, etc.

          The future is several sources of income.

          Now consider this – huge numbers of family men do a bit of taxi driving on the side.

          So we are ALREADY moving into a world of multiple skills, multiple sources of income, multiple odd-jobs.

          But nobody is talking about it, they are waiting for single job middle class consumerism to restart. This despite the 1000s of taxi plates proving that we are going to a different place, a multiple odd-job place.

          I don’t worry about people being asleep, it just means they’ll adapt at the last moment, after exhausting all their energy in pointless wishing and hoping for an ‘end to austerity’, whatever nonsense that is supposed to mean.

  14. Wills

    Good work D on writing a piece for the lay reader to understand and get a fix on the factual narrative of the so-called crisis underway.

    Excellent article.

    On the point about the insiders changing their script on austerity and its panacea I reckon what we are getting is simply another confidence trick gameplay to U-turn the narrative down a different route.

  15. Noelito

    A couple of points…

    1. I think that austerity should not be mistaken for profligacy. on the govt level for example, increasing public expenditure on a bloated and inefficient public sector will make things worse not better. We need to spend better not more.

    2. Similarly on a personal level, people need to be less material and more practical, change the car when you need to, not when your neighbour does!! We need to be a bit moer Germanic.

    3. Finally, we need to stop paying people ridiclulously high salaries which they do nto merit (this is a nod to the goings on yesterday re B of I), a very interesting and topical example, Borussia Dortmund last night were fantastic, they destroyed Madrid…Dortmnund have a cap on salaries 5m a year (I know it’s much moer than the rest of us get, but the point is, if any of them start thinking they are indespensqable and start demanding more, they are shown the door… and are replaced by players of equal skill, on the terms of the company not hte individual…again the Germans seem to do things right!!

    • Eireannach

      Germany’s sigil has always been Der Adler, the Eagle of the Holy Roman Empire.

      The Eagle is, along with the scorpion, one of the symbols which represents the character traits associated with the astrological sign of Scorpio.

      Scorpio, in its less mature phase, rules industrial pollution (like nuclear waste), dirty sexual tastes, and other blood and guts stuff. In it’s mature phase, it rules the heroic task of cleaning up industrial pollution and cleaning up sexual perversity and other toxic stuff.

      The Germany of the NAZI era was the less mature Eagle.

      The Germany of 2013 in the fully mature Eagle. Imagine if, somehow, Germany ruled Russia, or Britain, or Ireland, or America. They would clean up the nuclear waste in Russia instantly, and probably plant oak trees where once their was industrial wasteland, they’d clean up all the grimy rust-bucket towns of Britain and the US, and in Ireland they’d knock down all the ghost estates and lead a national movement to increase the energy performance of buildings to German standards.

      The Eagle of Germany, the characteristics of dealing with the legacy of the industrial and financial mess we have inherited, is absolutely the sign or ‘sigil’ to lead us through the next few decades, up to 2050 and beyond.

      Expect Club Med nations, where people smoke and throw rubbish out of car windows, to continue to resent this ‘clean it up’ drive, led by Germany.

      But we must ‘clean it up’, if we are to bestow a world of value to future generations.

      • Noelito

        Eireannach…I am laughing here as I read your (all too true) commenton Club Med nations, beause I am typing this frmo my current domicile of Bogotá, so I only have to look out my window to see the Latinos living the Latino way (which is lazy, inefficient and ill discplined), I have spent the last 5 years here telling/warning them, that if they don’t learn the lessons from Europe’s mistakes, they are guaranteed to repeat them (here in Bogotá for example there is already the sign iof a housing bubble, but will the Colombians listen?? to paraphrase that famous “will I get a receipt” from the planning tribunl…”will they fu[k!!!! haha…

        • Eireannach

          The ‘Eagle’ is a difficult initiation.

          If you master it, you are cleansed, purged, revitalized. Germany is leading the cleansing and purging of Europe’s balance sheets, industrial pollution, recycling, etc.

          If the Columbians just carry on being sloppy and half-arse, they will end up failing the initiation of the ‘Eagle’ – they will be in debt, demoralized, devitalized. They will end up with an ‘every (wo)man for himself’ culture because they failed to get to grips with the imperatives and mandates of the future.

          The Columbian honey-moon will end, and the rest of the period 2015 (or whenever their crash comes) to 2050-60 will be the day after the party and a shabby, sloppy, trashy mess to clean up that nobody wants to clean up.

  16. joe hack

    just for the record it was a 28 year old student that found the flaw and it took month or more before he was taken serious after all he only a student working on economic project for his college work!

    Rogoff and Reinhardt where given kudos by the USAs Republican Party of course the Democratic Party did not debunk it, most likely they did not even read it.

    The Republican Party spread it across the pond, a straw of justification to clutch to, WMD all over again. Follow the leader to a cliffs edge.

    Group-think and deference abounds ‘Just Cos’ Iodine Tablet Anyone!

    Why is this crap still happening when the dogs are howling and elephants are stomping everywhere!

  17. michaelcoughlan

    Hi,

    I like the article. In our totalarian eiruba there’s a fly in the tank track grease though. We are spending billions more than we are taking in on taxes. Someone better square the circle soon. Brogie is right every man must look out now for himself and his family.

    So my question is what Opportunity are you referring to? Wage levels are in the gutter. Local labour is displaced by cheap foreign emigrants who are being treated dreadfully, the skilled middle class who can emigrate are gone, the super rich are in tax exile anyway, no one can borrow to expand, no
    discretionary spend is available.

    Where’s the opportunity? I mean the question genuinely. I am trying to get a new business off the fround so any tips will be appreciated.

    • michaelcoughlan

      I didn’t think you would answer the question McWilliams. Your rhetoric is bland hollow and superficial.

    • Colin

      If you are only going to look after your wife and kids, don’t be surprised if others don’t have the inclination of looking after you, after all, won’t they be busy looking after their own loved ones, eh?

      David never claims to have time to answer questions from all and sundry looking for his advice, so just accept that and get over it.

  18. The Emperor is wearing nae gear. In the buff. Bereft of clothes. Apparel deficient. Stark bollock naked but still wearing his crown.

  19. gizzy

    Post Austerity we have lots of unemployed, a small broken Banking system, no new industries, a shattered self employed sector, politicians not up to the job, an expensive below par public service, a huge level of private and public debt , a subsidised agricultural sector so the answer is ????

    If Kenny Noonan Hayes et al come out now against austerity I will vomit

    • molly

      Yes gangsters in suits comes to mind but it always comes back to the same place we voted them in so it’s our own fault .
      I would not put them in charge of building a Lego toy.

  20. molly

    Hey David what about the pension bubble and the pension rip off .
    Pension providers who take there fees at the start and cover themselves and could not careless about the customer.

    • molly

      How come the small self employed person has no come back and are walked all over,
      These pension providers should be brought before the courts for steeling .

  21. StephenKenny

    Unfortunately, we seem to be being offered two options at the moment: ‘Austerity’ and ‘Optimism’.

    ‘Austerity’ involves the genius of the state deciding who gets what of the dwindling pie, and ‘Optimism’ seems to require the ‘magic of the market’ to make best use of all the money that everyone doesn’t save, and goes and spends instead.

    Given 20 years of experience, and our current institutional, legal, and tax structures, this seems to offer a choice of suicide by jumping off a cliff, or suicide by swimming in the arctic ocean.

  22. Excellent article David, very entertaining and a great analysis of the situation we’re in.

    One thing though – There’s less money during a recession because when a loan is repaid to a bank electronically the money no longer exists. If loan repayments are greater than new loans the money supply contracts.

    As well as this people may save more during a recession making it seems like there’s less.

    • 5Fingers

      It makes one wonder about spenders and savers. If we swing to either extreme we are in deep trouble. Spend too much and we lock up due to unsustainable repayments – money stops circulating. Spend too little or not take out enough credit and the economy that relied on that circulation starts to wither – again not enough circulating.

      Circulating money, like blood pressure seems to have some bounds. I am not sure it thoroughly relates to the MV=PQ equation. There is some other factor involved and I am convinced it is not being managed (or maybe it can never be managed).

    • bonbon

      See IT John Waters article linked below, on the “pseudo substance we call money.“

      Excellent! It is time to snap out of monetarist bewilderment, digital bedazzlement and deal with economics!

      • bonbon

        Quote from linked IT John Waters Article :

        “There is no famine in Europe, no absence of anything essential for human life or happiness. No essential material or resource has become scarce, apart from the pseudo-substance we call money, a token of exchange which becomes “essential” only by virtue of artificial rules enforced by artificial laws, including laws which enforce the artificial scarcity of this means of exchange.”

  23. StephenKenny

    Possibly off topic, but it’s too good not to pass on. Matt Taibbi has outdone himself again:

    http://www.rollingstone.com/politics/news/everything-is-rigged-the-biggest-financial-scandal-yet-20130425

    • cooldude

      It is a very good article and is in sharp contrast to the one above. I have read David’s article three times and i have no idea where or what this “great opportunity” is or how we are going to avail of it. By the way the debt- GDP ratio in the US is now 104% and rising rapidly. I just cannot see how this is in any way a good or desirable scenario. The only growth that is being produced by all this new debt is in the 50 million and rising Americans on food stamps and the wealth of the top 1% who are speculating with all this newly created QE money. There is little or no growth in the real economy. Real wages are falling and are now down to the level of the 1960′s whilst personal debt is back rising to even more unsustainable levels. And it’s more or less the same across the western world including the poster child of QE Japan. The only things growing there is the Nikei stock exchange and the cost of imported consumer goods. Again this only benefits the top elites who speculate on stocks and hurts ordinary people through higher food and energy costs. Again there is little or no growth in the real economy and more importantly the only beneficiaries of this massive increase in the money supply are the elite speculators. Maybe I missed something but where is this great opportunity.

  24. joe hack

    59 comments; take note David your income may depend on it. Porn sells, that’s why the business post is sunk and the indo lives.

    Call your next book “porn economics” it could be a best seller, now i think about it. that’s a great name economics book.

    Keep your pecker up

    Cheers

    • Porn sells?

      It’s certainly interesting. The word porn is used a lot on this blog as a euphemism for visual marketing junk. It’s like we are not adult enough to come right out and talk about it as an industry that contributes billions to the global economy. It is awash with niche money making opportunities

      All those clicks are a goldmine for a savvy webmaster who understands the industry and the needs of his / her customers!

      The types who are never on facebook because they spend all their time making money and becoming shit hot webmasters

      Or since this is Ireland maybe we could stick to property porn and make click money with dreamy ads that promise a life of eternal bliss to those who live with their heads in the clouds

  25. molly

    The truth is there has and still is far to much damage being done to this country and all the outside factors like oil ect.
    The government don’t live in my world do They live in yours.
    They said we would get change a new way of doing things,what we got was protection of the rich and a government that does its upmost to deflect from its self interest .
    It’s rotting to its core.

  26. 5Fingers

    Looks like a few things do need fixing first…

    http://www.rollingstone.com/politics/news/everything-is-rigged-the-biggest-financial-scandal-yet-20130425

    Lot of untouchables involved. Make you cry.

    But as a very wise friend reminded me…At some point our feudal lords were untouchable, then the absentee landlords, then the Church, then FF…

    Chin up!

  27. Pat Flannery

    I recently spent a few days in Canada, mostly Toronto, and asked a lot of questions. My contacts were mostly with academics and media types, both of which often have a somewhat skewed version of reality but at least they are well educated and well read. I wanted to hear what outward-looking Canadians thought of the present state of the world. They seem to be as puzzled as the rest of us.

    But Canadians are not as worried as Europeans. Canada has real wealth based on its vast natural resources. The U.S. has real power based on its military might – it can always send a gunship in the form of a carrier fleet as the Brits did in their heyday. Neither Country is therefore a Potemkin financial village like London and its corrupt sidekick Dublin. North America is in a better position to weather the coming storm of bubbles that is already threatening Europe.

    The Dublin Potemkin village, the IFSC, has already been exposed worldwide for the whorehouse it is. The Irish are seen to have acted as pimps by transferring massive wealth from the global middle class to a new financial elite. As a consequence Ireland will lose its 12.5% whorehouse license when the Eurozone inevitably harmonizes its corporation taxes. What then? As their pimp the IDA has given everything to the multinationals and left Ireland bereft of enterprise and indigenous industry.

    I couldn’t help comparing the atmosphere driving around Toronto and driving around Dublin. Toronto is barely 100 miles from the U.S. border while Dublin is nearly 3,000 miles. Yet Dublin seems closer to the U.S. than Toronto. In late afternoon I was the only car at the southbound border checkpoint at Niagara Falls. The Canadians get on with a vibrant life largely indifferent to their powerful neighbor to the south.

    How did Dublin and Ireland become such an economic basket case, totally dependent on foreign corporations? It seems to me that the IDA has a lot to answer for, it became a government within a government with disastrous consequences. As a result Ireland has no indigenous industry worth speaking of and no policy in place to create any.

    Until the Irish take ownership of their country, as every other successful country has done, their future is blight and perpetual emigration. Maybe what the Irish need is a bevy of celebrity psychiatrists not celebrity economists. But then Fraud said that psychoanalysis is wasted on the Irish. Economic analysis certainly is.

    • bonbon

      You need to travel a bit farther north to realize Canada’s predicament. The Arctic is now the new Frontier, Russia knows very well. And Canada, that Royal Dominion, following Decree, has made most of the frontier a “nature reserve”, blocking Premier Diefenbacher’s Arctic plans.

      As it happens the IFSC was pimping for London, the home of that financial empire.

      The way to realize a common future for sovereign nations, is NAWAPA 21 for all of North America and Mexico, and the Shannon Deep Harbour for Ireland. See
      http://laroucheirishbrigade.wordpress.com/ireland-an-economic-revival/

    • Harper66

      Fraud, whoever that is, may have said psychoanalysis is wasted on the Irish, Sigmund Freud however did not. The quote is wrongly attributed to him thanks to a line from the movie “The Departed”.

      Sigmund Freud did say “America is a mistake, admittedly a gigantic mistake, but a mistake nevertheless”

      You make some valid points but just wish you could make them without the name calling and impotent rage (speaking of Freud…)

      • Pat Flannery

        Sorry about the “Fraud” misspell, as you correctly deduced it was meant to be Mr. Freud. I will take your word for the history of the quote. I’m afraid I don’t get your “name calling and impotent rage” bit. Where or what is that all about? I am unaware of having indulged in either. If so, like the misspelling, it was unintended. Regards.

        • bonbon

          I do see a Freudian Slip here, a mistake?

          Freud’s problem is he never had a childhood, as he actually did say himself. A complete nutcase.

          • Adam Byrne

            Takes one to know one Mr. bonbon.

          • bonbon

            But he did have a Lodge, the B’nai B’rith, nutcases charlatans and cabbalists. His sheer hatred of human creativity is well documented.

            Need I say more?

          • Pat Flannery

            Mr. Freud or Mr. Fraud aside, I do think that Ireland needs its head examined. It is not like any other country I know of.

            How could its Minister for Finance, Brian Lenehan, guarantee billions of gambling debts of unregulated, easily-licensed-by-just-about-anybody “banks” and not get lynched?

            That is not a matter for economists (and don’t get me wrong, I actually like David McW even though I have never met him), it is a matter for psychiatrists.

            And yes, Sigmund Freud needed his head examined far more than any of his patients.

          • bonbon

            Sure there is psychosis at work, induced. Look up the Tavistock Institute – I can give a load of links, for social engineering, applied to Eire (and the entire Islamic world via Saudia). Masters they are indeed. Look what they did to the USA! Look at Boston!

            Bertrand Russell is the best place to start. Add in Hayek. If you are really serious in following up, most Ami’s “don’t go there”, I’ll supply the file.

    • michaelcoughlan

      Superb post Pat.

  28. molly

    Ireland might get its country back but what will we be left with .
    The public sector costing a fortune .
    The HSE like wises.
    The social well fair .
    The cost of living going out of controll.
    This government talks about making new jobs
    When there is thousands of jobs going,
    The main problim is no disposial income you can make all the jobs you like but with no disposial income it’s not going to make a difference .
    The only difference is dole figures but this will be over taken by Jobs cutting numbers like banks and people not being replaced .

  29. bonbon

    German Government Advisor Predicts End of Euro

    25 Apr. (EIRNS)Speaking to the German Sunday tabloid Welt am Sonntag on April 21, Kai Konrad, chairman of the scientific advisory council of the Ministry of Finance, said that for him, “Europe is important, the euro isn’t. And I give the euro only a limited chance of survival, in the medium term perspective.” Welt asked what he means by that, maybe five years? Konrad: “It is difficult to define time spans; that depends on many factors. But five years, that sounds realistic.”

    Konrad also said he disagrees with the austerity course of the EU and of his own government, because it does not improve the situation and provokes Germanophobia throughout Europe. Neither does a return to the Maastricht criteria make sense, because the criteria can only be kept if there is economic growth. Governments should be allowed to borrow, if it serves the promotion of growth, Konrad said.

    So begone with austerity, Maastricht and the poisonous xenophobic Euro. The DM was a real Peace Prize currency, bring it back!

  30. molly

    Put in the over payed and the lump sums and dont forget the to die for pensions, now tell me who’s supporting the living beyond you means gang.
    This country is run like a banana republic and the poor and the middle class are supost to shut up and pay for this.

  31. Received an email from Ulster Bank informing me that from June anyone who doesn’t have 3k in their account will pay €4 per month.

    Your salary counts and if you are lucky to be pulling 3k per month then you will not pay the levy. Not that you would even notice it!

  32. “If austerity crumbles, all bets are off”

    Not so fast brother. It depends on how you see the future. We can’t just return to the buccaneering ways of the past and grab all we want.

    For too long we have been sitting back watching and listening to the Alpha Male ego talking crap, grabbing what it needs to feed it’s inherent sense of insecurity and polluting the rest of us with their propaganda through sheer volumes of white noise. It’s time for a bit of quiet and some serious thinking about our future

    We have had 5 years of austerity and you have always said it would not work. You win that point but life is not about winning points. That is for the emotionally immature, politicians and other assorted idealogues who are living in a mind prison of their own choosing.

    They choose it because they can’t stand to be alone listening to their own thoughts driving them mad. They don’t trust themselves deep down and need the mob to empathise with them. You don’t think they give a fuck about the country, society and the bigger picture surely?. As George Carlin says they don’t give a fuck about us

    They are not mentally and spiritually equipped for an inner journey of self refection that will let them become less of an Alpha Male asshole

    Everyone is living in an open prison of some sorts just like Bob Dylan says in his song You Gotta Serve Somebody. Everyone should listen to this song and take note

  33. Harper66

    Events of note this week –

    http://namawinelake.wordpress.com/2013/04/19/noonan-says-he-wont-vote-on-bank-of-ireland-remuneration-at-agm/

    In 2012 Richie was paid a salary of €690,000 plus pension contributions of €186,000 plus perks of €34,000; Richie handed back €67,000 of his salary as a waiver.Bank of Ireland made a comprehensive loss of €1.5bn in 2012.

    Minister Noonan confirmed that he will abstain from using his 15% stake in Bank of Ireland to vote in favour or against the remuneration of Bank of Ireland’s board.

    http://www.irishtimes.com/news/consumer/gilmore-rejects-calls-to-intervene-in-aib-rate-hike-1.1372415

    Tánaiste Éamon Gilmore has rejected opposition calls for the Government to intervene in AIB’s decision to raise mortgage interest rates. AIB is state owned.

    Next week the European Central Bank is expected to cut its key lending rate, which will benefit tracker customers.

    A rate cut from the ECB is also expected to make it difficult for banks to hike their variable rates.

    Experts said today AIB was getting a rate hike in ahead of the ECB’s next decision on rates.

    http://www.broadsheet.ie/2013/04/26/a-e140-million-write-off-from-bank-of-ireland-and-aib/

    Independent News and Media, of which Denis O’Brien is the biggest shareholder, is to get a debt write-off worth €140 million from Bank of Ireland and AIB.

    Sick.Sick Sick.

    • Adam Byrne

      Harper66,

      It IS sick, you are right.

      I suggest you email that post off verbatim to:

      taoiseach@taoiseach.gov.ie

      Something has to give, this can’t carry one.

      Kenny and Gilmore deserve to be hung, drawn and quartered on O’Connell Street.

      • Harper66

        Adam,
        Good suggestion, will do and thanks.

        I spoke to a man this week who is pretty much on the edge,lost his job, married, two kids, interest rate rise this week for him. He applied for college got a place but had to leave because he could get no financial assistance.This is a man who worked and paid his taxes for 25 years.

        We were talking about bank pay and the interest rate rises and he said to me he cannot understand how banks are not being defaced by the public such is the level of contempt the banks are displaying. I was taken aback to hear this from a person who was also previously so level headed. But on reflection perhaps this is they way way things are heading.

    • dwalsh

      The rationale of CEO compensation seems to be they must be given enormous sums to incentivise them; otherwise their performance suffers. Maybe BOI would lose less or even turn a profit if Richie were paid even more.

      • Harper66

        Ha Ha yes.

      • gizzy

        You could almost stretch a point if they were international and he had big strategic decisions to make. They are retrenching and selling off assets. It is a small domestic Bank, Salary should be 200k at most. Put these jobs out to tender.

  34. Adam Byrne

    I have taken to emailing Enda Kenny every day now and I think as many other people as possible should to likewise. Today’s offering:

    Enda Kenny (taoiseach@taoiseach.gov.ie)

    You say you can’t interfere with the salary of the likes of Richie Boucher

    Yet you have the gall to tell workers at the bottom of the scale to take pay cuts

    You, Mr. Kenny, are a THUNDERING DISGRACE

    and a lapdog for your bankster pals

  35. dwalsh

    Excellent article and summary David.

  36. bonbon

    John Waters Hits the Nail On The Head Again

    In his latest Irish Times article, ‘Austerity’ deflects us from true nature of economic crisis, John Waters hits the nail on the head again, on what he calls the “pseudo substance we call money. “

  37. bonbon

    U.K. Independence Party Leader Farage Endorses Glass-Steagall

    April 24, 2013 (EIRNS)–UKIP leader Nigel Farage endorsed Glass-Steagall, answering a {Guardian} journalist’s question after a speech at a press gallery luncheon in Westminster on April 23. Reporter Michael White reported on the exchange in the {Guardian}’s “Politics” blog: http://www.guardian.co.uk/
    politics/blog/2013/apr/24/nigel-farage-ukip.
    “As a City of London man himself (dad was in the metals market for 60 years, granddad for 50, and both his sons are there today), how would he have tackled the City’s self-inflicted banking crisis of 2007-09, I asked. Well, he wouldn’t have repealed the U.S. Glass-Steagall Act of 1931 [1933--ed.], which separated retail from investment banking and he wouldn’t have messed around, as Gordon Brown did, with the Bank of England’s regulatory role, which it has played since 1694: ‘useless, tick-box bureaucracy’ is no substitute. Fine, fine. But be more specific. ‘Personally, I would have let Northern Rock go bust,’ he said.”

  38. bonbon

    John Law Practiced Quantitative Easing

    April 25, 2013 (EIRNS)–Schroder’s “Dialogue” newsletter paraphrases Philip Coggan at the Secular Market Forum, the article saying that none other than top hoaxster John Law is one of the fathers of quantitative easing:

    “Following the reign of Louis XIV at the start of the 18th century,” the article runs, “the French monarchy was essentially bankrupt and so turned to a Scottish mathematician, gambler, and economist called John Law to come up with a way of paying off the huge debts.

    “He did this through a scheme that involved the creation of a joint-stock company, the Compagnie d’Occident, to exploit France’s colonial possessions, and by creating extra money with which to buy shares in the company and keep their value rising.”

    Little surprise, then, that “the scheme became one of the greatest bubbles in history and failed.”

  39. molly

    can somebody explain what the national pension reserve fund is and what happens if it is empty.

  40. molly

    So the government takes the money and bail out the banks, people need to wake up this government should have asked the people to vote on this because this Is life changing .
    Now it’s to late because the money is gone.
    This country gets worse by the day.
    Why can’t we vote on any thing that is life changing, the government are handed to much power.

    • Steaf35

      You are perfectly correct Molly….yet the same bunch gets voted in again in the recent by-election. It seems turkeys do vote for Christmas….!!! On the same not the DDI vote was interesting!

  41. joe hack

    Some bad news, austerity must continue, see link:

    http://www.youtube.com/watch?v=4-bSKsVDr_M

  42. joe hack

    Well holy no god!

    Martin signals shift in Fianna Fáil position on austerity, Pearce Doherty must be grinning ear to ear… SF FF any one

    This puts more pressure on FG for an about turn

    I TOLD YOU SO! lol
    YOU TOLD THEM SO!

    Reminds me of the forest grump movie when forest grump started running for no reason and then people just ran after him for years – then he stopped – what next!

    So the emperor has new suit but we need to be vigilant and make sure it’s not just a new birthday suit.

    DAVID, where would you invest /spend some money
    David Miliband has new strategy to get the dole money working it’s called “A Living Wage”? Apprenticeships for all ages might be great idea / incentivising innovative start-ups etc …

    Yes I know I have all ready spent the debt money
    But do we need to borrow to do this?

    • StephenKenny

      Of course, all this chat about ‘austerity’ or ‘not austerity’ is all very nice, but the real problem is, and has been for the past 5 years here, what happens after the debts have been sorted out/ignored?

      The employment structure that we had property/public sector/financial services has turned out to be unsustainable, so now what?

      The politicians, public sector, and media say ‘restructure’ and ‘innovation’, and then move on to start planning how they’re going to spend the fantastic profits that the economists tell them to expect.

      It is self evident that we need to ‘restructure’ – given the fact that the structure we had has collapsed – that isn’t even an option, but restructure towards an economy based on what?

      So sure, we must give everyone a living wage, and a guaranteed job, and all the rest of it, but to what commercial/industrial end? A government ministry to decide which businesses get investment?

      OK so, let’s be honest, no one has any idea how to do this, and trying would result in massive misallocation and waste. So perhaps we can change the economic environment so as to encourage and enable the right things to happen in the economy. Like the Germans perhaps. So we change the tax laws, employment laws, etc, to encourage longer term planning, longer term training and employment, growth of wealth generating sectors at the expense of others, and most of all, to very significantly discourage all asset speculation, zero-sum speculation, and al that associated middlemen/broker nonsense.

      Since we’re also talking about Britain, you can forget it, their reliance on the the property and financial services sectors is such that a fall in either would shatter the economy, and take the standard of living back 20 years, or more. With the entire public sector and media promising that it’s all pretty easily solvable (innovation), it is clearly politically impossible even to consider trying anything.

      Compared to the past five years, this is the really hard bit. It’s a bit like food – it’s really easy to make popular food if you simply fill it with sugar and salt, but to make food that’s popular and healthy is really hard.

      • bonbon

        You have been absent, or absent-minded. First as I pointed out here you have not the faintest clue why the mess happened, and now with such sham “honesty” you claim no one else has a clue what to do?

        This kind of liberal vacuum parading as opinion-maker is precisely the West Brit kow-towing, and actually pure Beal Bocht act for the Squire that is rife in the blog. After all, your oft admired Adam Smith Moral Sentiments is precisely prescribed cluelessness.

        Britain’s financial empire, the keeper of the Continental concentration camp, is crumbling. Glass-Steagall is the shove-over. Then Carey’s Hamiltonian Credit for the thus freed nations of Europe will be unleashed.

        So shove the empire, honestly, it’s the only way to survive.

        • Adam Byrne

          What happened to you last night Mr. bonbon?

          We waited hours in the Palace Bar for you

          We had a great night but it would have been even better had you showed up as promised.

      • joe hack

        Mr Kenny,

        I think if they start the conversation the way we have, we (they the leaders) might have chance. People focus on “the politician” as some sort demigods (they) and blame them when all is not well but people need to look at themselves, the politician, I am sad to say, is no more ingenious than me, but yes some are dumb. The politicians were elected so who is responsible for that, the uninformed, or the partisan, it may involve conformation biases or even; ah, sure he is lovely man and he fixed a pot hole but whose money did he fix the pot with? Was it borrowed and has the hospital queue has lengthened as a result?

        (On face book there are pages with save this and save that, I know of one person who saving everything so if we save the local community seesaw do we still get to save the local community swing. )

        An honesty is need to happen not just in party politics but more importantly the public need to be informed and they need to be aware of what is actually happing, news bulletins and sound bites tend to be uninformative. What percentage of the public has a real understanding of what the promissory note was all about 10 %… 20%…?
        Borrowing money puts you at the mercy of others so they get to control you that is why we are where we are.
        Ireland has very little the rest of the world needs to buy so in most jobs , private and public there is no real difference in that respect and no net gain to Ireland.
        Since most jobs don’t create a net gain for the economy we borrow.
        The last government bent over to the car sales lobby men (Paul Cullen, the apprentice, Penny apples! everyone can be rich if everyone sells imported goods! Logic is missing here )circa 2008 to help stimulate car sales well that just compounded the problem as we then exported money to car manufactures outside of Ireland, this is some of the logic of the system we live we in, GUARANTEED IRISH! We Are Living Be Hone Our Means!

        So what would make a great country with proud and optimistic outlook? Well helping someone next door or someone who is struggling gives a people a great sense of optimism but why we laud the Paul Cullen’s and Denis O’Brien is beyond my simple comprehension they create no new net gain for the this land they export money so why the pedestals. Welcome to Ireland Inc x Factor
        So borrowing money is great temporary Buzz but with all highs comes the inevitable hangovers, the party is over again and the Solpadine is not working aymore. So I agree we need to build a community called Ireland but I fear that a quick fix (borrowing) will prevent an awaking.
        GUARANTEED IRISH!

        Education is key and an emphasises on civic responsibility should be to the fore of that system. We are training people for export (exporting money while importing junk) and they run away they are not part Ireland they are global mercenaries of sorts welcome to neo-liberalism were I care but for myself the sad thing is that it stays to haunt us.

        Generally speaking they are making the same mistakes they made after 1929 the masses are on low wages which means no spending so how do we fix that.

        A country should not prostitute itself to the dictate of a market it should control dictate its own destiny.

        Reality is harsh and thinking is hard that why we don’t do it?

        Smiley face symbols here:

      • Noelito

        I think that we should become one big tourist resort!!…let’s face it until the 1st world can compete with today’s 3rd world on wages we have to do something else…I would say that a lot of Chinese aspire to seeing the Eiffel tour, so there is no option other than to go to Paris and spend their tourist minburi there!! we don´t have an Eiffel tour or Big Ben (let’s not go there with the spire jokes!!)but I think a lot of Asians would like to holiday in Ireland, the craic of the Irish is known world wide!! also there is the angle of them wanting to speak English, so let them come…

        On the other side of the equation, Ireland and the rest of today’s 1st world are going to have to get used to significantly lower standards of living, which in turn would make it better value for the tourists here, because tourism prices will have to come down considerably!

  43. bonbon

    Warning from Inside the Southern European Concentration Camp

    26 Apr. (LPAC) Portuguese Socialist Party figure Manuel Alegre, a 76-year-old poet, former Deputy, and twice candidate for President (2006-2011), who in the past has called for following the Argentine model on the debt, wrote a short March 26 article, published in Jornal i under the title “Cyprus and Us,” which speaks for itself.

    Let’s be honest, there is a concentration camp in Europe, again! To continue with this Euro disaster is plainly obvious for what it is.

    All of this is because Europe simply cannot muster, again, a tradition to break the banks and reject the British barbed-wire camp. Britain of course wants nothing to do with the camp it set up with the Euro for the Continent. The inmates are trying to be practical to please their tormentors, again.

  44. great article and comments. loving my trip to Dublin. had a queit night in hotel. scrabble and an orange then early night . woke up sweating from a nightmare. dreamt i met some of the folk on this blog and got pissed and started talking shite in a pub. thank god it was just a bad dream. phew! off to the RDS now to address FF. ill

    • joe hack

      No need they have already just figured out that Austerity means that no one works! so you have a calling to the bar don’t forget your briefs.

    • ill…feels like a hangover….terrible dream…cant understand it…hey bonbon! u got a face pic? u on grindr? if you’re in Dublin …let’s hook up!

    • Adam Byrne

      Hahaha, so it was a nightmare after all??!!

      • Colin

        Adam,

        How did your argument for allowing millions of Somalians into Ireland go down with Mad Mooney and the boys?

        • Adam Byrne

          Great Colin,

          After all, it is irrefutable.

          Regards,

          Adam.

        • ‘mad mooney’?

          let’s get the protocol right… it’s

          MaD pLaStIC PADdY fRom BrUM’

          it wasn’t me,it was an imposter, ‘the Morrissey Clone Relicant’ not ‘AndrewGMooney’ as Wayne Rooney/George Clooney etc

          in McDonalds on O’Connell St deciding whether to invite thigs Nortside gurrier & his girlfriend back to Ballymun Travelodge for a few jours sex mayhem before 6am flight. *thinking*

  45. molly

    does anybody know how many jobs are being lost compaired with new jobs being made,proper jobs and not the mickey mouse jobs ,that the government use in there figures.
    like part time jobs,fass,intermships ect.
    most of the jobs that are lost seam to be full time jobs,proper jobs.

    • Colin

      Ah Paddy, sure do you not know our teachers are struggling to pay mortgages on their holiday properties in Croatia and the like (where is our liveline moaner from 2007 these days?)? Where are they supposed to go for 3 months of the year with Irish summers the way they are?

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