July 11, 2013

What if our brilliant young never come home?

Posted in Behavioural Economics · 101 comments ·
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In these soaring Mediterranean temperatures, spare a thought for the peoples of southern Europe and consider the similarities between what is happening there – and here in Ireland.

The Mediterranean economies are large, historical countries with profound civilisations and substantial populations, but they risk becoming denuded of young people because – as in Ireland – youth unemployment is corroding the very heart of the societies and the young are leaving.

Consider some statistics on unemployment and emigration for a minute and then let us pause and think about the consequences for all societies.

Specifically, let us think about how likely is it that the Irish experience of my generation will be repeated?

By that I mean, my generation – myself included – emigrated in enormous numbers in the late 1980s and the early 1990s.

However, we came back in our thousands in the late 1990s and the early 2000s because the growth rate, driven largely by the Irish economy “catching up” technologically with the rest of Europe, created opportunities.

These opportunities were then enhanced by the arrival home of people whose skills had been boosted by their experience abroad. Ireland experienced the virtuous cycle much spoken of, but rarely actually seen, whereby emigrants returned and greatly contributed to the society they had left years earlier.

The amount of our young people in Australia hit home while watching the thousands of Irish Lions fans in Sydney and Melbourne. Will these young Irish come home, as my generation did?

And if they don’t, what are the implications for us? A similar exodus has occurred in southern Europe; what happens if they don’t come home either?

The statistics about the human impact of the recession are quite startling and made more so when we acknowledge that behind every statistic and number is a person, a family and any number of intertwined lives.

Right now, there are more Spanish people on the dole than there are citizens of Denmark. There are almost 15 million Europeans below the age of 30 not in work, education or training. Fifteen million is about the population of the highly populated Netherlands. In Italy alone, there are 2.2 million people under 30 doing nothing – that’s one in four of all Italian young people.

Like Ireland, many thousands of young people all across the Mediterranean are not hanging around, they are moving. According to the BBC: “Greek emigration to Germany jumped by more than 40pc last year. A recent study by the University of Thessaloniki found that more than 120,000 professionals, including doctors, engineers and scientists, have left Greece since the start of the crisis in 2010.”

Emigration from Italy rose by nearly a third last year to 79,000. Those aged 20 to 40 made up 44.8pc of the total, up from 28.3pc in 2011. In a new development, many of the Italians who are heading off are not from the traditional emigration hotspots of the south, but from the historically much richer north of Italy – the heartland of Italian industry, technology and design.

The situation in Spain is even more worrying. In February, a study showed that “70pc of Spaniards younger than 30 have considered moving abroad”.

Across the Iberian border, more than 2% of Portugal’s population has emigrated in the past two years. Most were young, highly educated people heading to Switzerland, Brazil or the oil-rich former Portuguese colony of Angola. Here in Ireland, during the past four years, more than 300,000 people have emigrated: 40% aged between 15 and 24.

In Ireland, you regularly hear people saying something like, “If it was not for emigration, we’d be doubly screwed because the unemployment figures would be much higher”. But this is only half the picture.

When people leave a country they take their skills and enthusiasm with them. They contribute positively to other countries and obviously they pay tax and create businesses in other countries too.

The countries that suffer from emigration end up older and less productive by definition. This can have a permanent impact on economic growth if the emigrants don’t come home.

Public pension systems all across Europe are essentially pyramid schemes. By this I mean the income of those retiring at the top of the pyramid are dependent on the amount of young workers coming in at the bottom of the pyramid. The more workers coming in and paying tax, the more money there is for the older ones who are retiring.

In order to get money for pensions, when the demographic dynamic changes for the worse, taxes will have to go up. As the rates of taxation in the periphery go up to maintain the previous commitments to the older populations and without extra tax revenue of the younger workers, the societies are left in a bind.

This wouldn’t be so bad if the government debt ratios of the countries on the periphery of Europe were small and manageable, but they are not. As we have seen over the past few years, peripheral Europe is flirting time and again with bond market and government debt crises, which have only been staved off by massive central bank intervention (implicit and actual) in the debt markets of all the afflicted countries.

As a result, the recent calm in these government debt markets has been rented not earned.

So governments can’t borrow to keep the system ticking over and as tens and hundreds of thousands of young people leave the countries of the periphery, these governments will have to make a choice between either debt service or pension and welfare provision – or of course the more obvious route of changing their currencies.

If they want to stay in the euro, keep their pensions, not default nor restructure their debts, then someone else will have to pay and that someone else is going to have to be the countries of northern Europe who themselves are recipients of the migrants.

Is it any wonder Mrs Merkel wants to avoid such a daunting choice at all costs?

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  1. 5Fingers

    He heeee….

  2. Hi David,

    Return to Ireland? That’s a hard sell let me tell you. i spent 2011-2011 in Ireland, having not lived there for 13 years, the industry I work in doesn’t exist in any meaningful way in Ireland so the next job that came along took me out of the country. I have a life where I am that would simply not be possible in Ireland, and I don’t have to face the daily grind of negativity and misery that seems to have enveloped the place. Taking a wider view, its hard to pick a place where one’s future is remotely safe, the effects of the last few years of insanity will surely start to bite, even in the richest countries, but for now I see no possibility, nor do I have the desire, of returning.

    Of course the longer one stays away, the more one feels like a foreigner in their own country. I seem to be part of a herd of professionals that move from place to place. Half my Facebook contacts are scatter across the globe and I’d rather be a foreigner/expat/migrant where I am than to feel like one back in Ireland. There is a certain freedom that comes with that.

    • 2010-2011, that should be.

    • TrackerMan

      Hi Liam, I would echo those comments about friends of mine now being scattered all over the world, many have been in good jobs here in Ireland, but like you say there is an ebb & flow of opportunities in all industries and the locations of those opportunities chnages globally in response to crises / tax developments / economic & political circumstances. This is without a doubt driven by globalisation and the concentration of industry power being controlled within a small core group of companies. It is up to individuals whether they want to take on the opportunity presented by globalisation or let it pass you by. The downside from a socio economic perspective I believe is that it is damaging the job prospects for the vast majority of people within countries that do not wish to move and cannot move. This is a major cost and one that has big implications for society as a whole longer term.

      • jeeaaan

        Declan Ganley is organising ,definately in the process of forming new party,is holding meetings around the country.One to watch!

      • onedmc

        Are we seeing the beginnings of something similar to rural depopulation where the perimeter will inevitably be depopulated in favour of the move to the highly developed.

  3. Steaf35

    I have two younger brothers abroad (USA & NZ) and neither of them have any intention of returning to this place…..and could ya blame them…absolutely not; Even considering going again myself as present administration are the same self serving oxymorons as the previous bunch.!! New politics and methods are required but the turkeys (electorate in general) unfortunately do vote for christmas on this isle..!!

  4. pauloriain

    David, can you please outline some potential scenarios, which could lead to solutions. Particularly can we hear some thoughts about making those who have lost their money take their loss and also, why we are bailing out banks instead of letting bail in’s occur, so those who’s money is gone, just accept that’s life and stop putting this crisis onto everyone, including the younger generations as you describe above.

    It’s zero sum game, when money is lost, it’s lost and that loss will manifest itself in one way or another, but it will manifest itself, otherwise it wouldn’t be lost.

    • bonbon

      It is manifesting itself, look at the destruction of the Med. Monetarists always think about their wallet manifesting painful losses. Tell that to the Cypriots!

  5. stevedublin

    I think young emigrants will come home as soon as there is a recession/economic difficulties with the global economy, especially in the country they emigrated to.
    It would be better for them to be in Ireland (where they have family/friends and feel more at home with the culture they grew up with as kids) and unemployed than abroad and unemployed.

    • Don’t know about that. What did Samuel Beckett give as his reason for remaining in France throughout WW2 and the Nazi occupation? Something along the lines that he found France during war preferable to Ireland during peace.

  6. There’s a knock on to this story insofar as the “Herd of professionals”, so aptly put, may be accepted in the host country by their peers, ostensibly middle class. But working class(I hate that description) emigrants are never as well received amongst their peers due to perceptions of job taking and culture dilution. We were no better here in relation to the mass immigration of eastern europeans during the Great Swindle.
    I don’t know the figures for sure but we can’t be far off the greatest displacement of young people ever seen in history. And look what happened when huge swathes of young people got disenchanted during the Arab Spring.
    Incidentally, Is this only a white Caucasian problem? Or is it pan-demographic? Have a generation of older, safer, cossetted generation been the cause of creating a new underclass of wandering intellectuals, prostituting themselves to the highest international bidder? And if a nation is its people, what price the nation state?
    If every country is going to be populated by a mish mash of nationalities, then countries will become similar to Premiership soccer teams. That is, geographically notional but realistically pan global.

    Another thought provoking article from David for those with thoughts to provoke.

    • 5Fingers

      We are aligned

      • The alignment of five fingers(presumably no thumb)and hirsute earlobes shurely means the genesis of a new political party, Na Fir Bolg??

      • 5Fingers

        A pan national party that reaches out to a diaspora who may shortly find that their government cannot or will not supply a passport :)

        • Only one amendment to that motion. Its a pan global party so all the Diaspora have a say in the mother nest. If we have to be a nation of cuckoos, we might try to be united cuckoos.

    • 5Fingers

      Excellent point on Professionals happily herding together while the less educated/ trained will be forced to mind their territory. I fear many who consider themselves “open minded” and “inclusive” may not get this very salient point. This is a major powder keg.

    • Professor Lugs, long time… :) There have always been home-birds and there have always been explorers, in my view, and it has only a little to do with economics.

      • How de doo dee Old Buddy.
        I was only hibernating until this weather came along.
        Good to see you’re keeping well in Germany.
        As my Mom says, “Keep the bad dog with you because the good dog won’t bite you”.

        Hope Prof Merkel is treating you well.

  7. 5Fingers

    This is an article that for me is getting to the nub of the matter of sustainability in an economy. It also highlights how better government policies and better run nations attract the talent while the rest wallow with lower average IQ to eventually turn into tourist destinations or locations for professionals who work remotely in pastoral idylls – migrating seasonally to maintain a pleasant climate – while giving their best to the highest bidder nation.

    Meanwhile in WALLOW land, the dynamics of youth unemployment derives preliminarily from risk. Risk for companies employing and training someone inexperienced and then having them leave etc is now too high relative to commercial viability.

    All of which is a bit strange when interest rates are sooooo low (financial risk to speculate was never so low). But lending has ceased Basically, the real economy based on employment is dying and enough said there.

    As with all nations insider/outsider, unions/ cronyism is more attributed to National public services. For them, there is a tax haul that keeps them safe. Commercial reality is never an issue. If there is negative pressure, they merely stop hiring. The snag with this of course is that serious TAX incentives are needed to mitigate risk for real companies and that would go down like a lead balloon for the public service. AND the poorer managed the Government and its policies, the more it wallows…

    Now….Add to the above the fact that our young tend to marry (whatever that means any more) later, have zero to very few children due to a physiology subject to more stress/ environmental shock etc. If your in Wallow Land, it’s not looking good – at all.

    So the future belongs to those who are happy to be professional gypsies, migrating to follow their favoured and less stressful climate. Question for me is…can we have billions of people doing this. Maybe this is the model we should be embracing and forget about trying to stay put. Global Warming, rising sea levels…get yerselves a boat and a satellite uplink.

    • Or put it another way, it won’t matter where you’re from rather than where you’re going to, provided where you’re from is recognised as a seedbed country for intellectual development and commercial acumen.
      Mind you, I’ve been doing it for 20 years and its got merit.

  8. TrackerMan

    It is up to nations to develop / encourage a diverse range of industries to support people of different educational / aptitudes. Look at the US now encouraging / being promoted as a manufacturing base once again via low cost energy via shale gas & higher productivity via superior intellectual technology. US / EU competing vigorously for plane orders through Boeing / Airbus, as this sustains high end technical / engineering jobs in Germany / France, similar to supports offered to the Auto industry, as these industries provide the backbone to the associated professional services that subsequently feed of these highly labour intensive industries. In Germany right now, they are very worried about a huge skills shortage as a large rump of their highly skilled employees in their medium sized companies are approaching retirement, so they are sucking in young educated, highly trained professional (trade & services) employees from Southern Europe and elsewhere, thereby invigorating their economy via younger higher spending youth who have a propensity to spend more / save less, need accommodation, all of which is boosting domestic demand there, while further depressing the periphery economies, as the less well educated stay at home and collect welfare in their respective states. In Ireland, as in an country, it is vitally important to have key industry participants (in industries where we have a comparative advantage – for whatever reason) formulating strategy driven by key industry professionals / knowledge, so as maintain that advantage, as there is always somebody behind us that wants to get our market share – this is where R&D and a desire to always move forward is required.

  9. Irish PI

    Hi All,
    Well as the wicked witch said” be careful for what you wish for.”In this case a Federal EU.Of course people will migrate to work.All you have to look at the US for this.The average American moves eight times in their lives.States that are poor lose pouplations on a generational basis,however they do have the advantage of speaking English,something that we dont have bin the EU a national lingua franca.THAT will be a fun one to decide as well…
    My biggest mistake was ever coming back here eighteen years ago,but family and duty to it comes first.However,even before the time of the great con,you could see three classes getting wealthy,builders,barristers and bankers.It certainly wasnt the normal man in the street.So TBH,if I have the opportunity when my elderly parent passes on,I might be in my 60s,but I would leave here in a flash too and not return…EVER!
    There will have to be a total sea change in Irish society for it to be of any value or opportunity for a young person with any gumption to stay here.

    BTW David,finished The Good Room as well…OK now after reading all your books,you have done a fine job of summing up Irish society of the oughties to the present day,telling us where the problems are and a few solutions as well..Next question is Where do we go from here???
    Are we going to have to hope that someone like your heroine is exactly in that situation who meets a lawyer who is going to take on the system and a sister who can get and has the gumption to steal the info???
    Somehow,I can see this all ending in blood and tears.

    • Irish Pi

      First thanks for taking the time for reading the books. I hope you enjoyed the Good Room.

      I don’t know where we go from here and try not to get depressed about it. I look at my children and think where are they going to make a living. I look at them as young teenagers and see how much they love life and how Ireland is a brilliant place for them to grow up and then I project forward ten years and wonder at 23 will they still be here?

      I am as flummoxed as you. But I do know that one thing is true there is nothing wrong in Ireland that can’t be fixed and – unlike other countries – there is no reason at all why our country shouldn’t provide a decent living for all of us.

      I travel alot, and can see there is nothing intrinsically that should seperate us from the sucessful countries of norther Europe, yet we fail and when we succeed we can’t seem to sustain it.

      Best

      David

      • hibernian56

        It’s simple, the reason we fail is Civil Service Unions.

        They are like leaving a labrador beside a 50kg bag of food. It will eat till it explodes, not caring about tomorrow, not remembering about yesterday.

        Civil Servants pamper the politicians, the politicians take the flack. As long as we the citizen are not represented in the loop the country is doomed to be a cyclical feeding trough for the civil service.

      • michaelcoughlan

        Hi,

        I mean this respectfully: I’m not flummoxed at all. To understand and arrive at a conclusion on the way forward we must first start by assessing the reality facing us. Since I dont believe in conspiracy theories I feel that this is important to try and figure out what is in fact going on from an unbiased perspective.

        Ireland as you have accurately pointed out is being turned into a debt servicing agency zombie state for the purposes of saving the euro. The interests of we the people are subservient to this. The administration know that we are going to have enormous outward immigration and may be privately sad but know this is good news from a politically expedient perspective. So therefore it doesent take a rocket scientist to figure out that the administration don’t give a shit about us. What are we to do therefore?

        Ans: stop looking to the people in charge to help us because they won’t they in fact want rid of us.

        Take stock of the skills and experiences needed in the situation we are in and not the increasingly worthless masters etc peddled by the ponzi artists in the universities. Tony brogan is blue in the face from pointing out that self sufficiency skills are in vogue and i can tell you from experience it is very satisfying when a
        new skill is mastered.

        Cut your cloth to it’s measure ie if you get a job on €10/ hr there are plenty of apts for sale now in Ireland that can be bought for 40k or a mortgage of €250 pm to start. My wife and I started of in a 1 bed shoe box apt in west Dublin 10 years ago.

        Stop bitching. It isn’t going to change the administration nor help you yourself.

        Try and live ethically and with concern for the environment even if there are scumbags all around you doing the opposite. You cant stop them but if you are not a scumbag there is one less scumbag to worry about.

        Seek employment and training in areas where there is still a demand for
        Skills which may not be what you had in your head when you went through college but are now required in the environment you are in.

        We must look to ourselves david as has ALWAYS been the case in Ireland. Remember the people who live in your neighbourhood are not your competitors or consumers they are in fact neighbours. See if you can cooperate with them and make friends out of them.

        The above is just a start. I’m following this advice myself by the way and I have had soon very satisfying results particularly on the self sufficiency side of things. I’m half thinking of setting up a blog called gettingoffmyass.com. to log my progress and get some synergy going. Someone said that
        wordpress is a good place to start so if anyone has any tips they would be very much appreciated.

        Sincerely,

        Michael.

  10. michaelcoughlan

    Hi,

    You ask the following question “What if our brilliant young never come home” in a way which implys there would be an enormous loss to Ireland if they don’t.

    Your are not observing how really and truly fucked up Irish society really is in asking that question so let me explain:

    We (the Irish) are perfectly prepared to export our best and brightest kids to good opportunities and salaries abroad and substitute them at home with equally intelligent and well qualified DIRT CHEAP Eastern europen labour.

    The answer to the question is sadly nothing whatsoever a very sad reflection of the race of unmitigated scum we Irish really and truly are.

    • Michael,
      I’m one of the exported who imported myself again, so I could commute and have the best of both worlds. That was my solution. Other people I know found other ways of reconnecting. Some I’ve met weren’t in the slightest bit interested nor even bothered about Ireland as was their right.And then there are those born outside the Island of diaspora stock, who are probably more Irish than some of those living at home. My son falls into that category, despite being called a Tan or a Brit every time he visits by some of our more enlightened citizens.

      Some were lucky to find work here and more were lucky to have worked outlined for them from an early age. The “Pull”, as we used to call it.And that was, still is, galling to tose who just want an equal crack of the whip.

      So there are many aspects to being Irish but to generalise my people as a race of unmitigated scum is a bit strong, don’t you think?

      • michaelcoughlan

        Hi,

        I’m Irish too. We live here in Ireland at the expense of our kids. We are perfectly happy to send our kids to better paid jobs abroad but won’t put in place the structures to allow them to prosper here? And what jobs are available are handed to misfortunes from overseasvwho are disgracefully treated here and even more so in their home countries?

        We just dont get it here.

        We are getting what we deserve.

        • 5Fingers

          No structures are put in place in Ireland simply because the educational quotient is still too low to cause the election of a sufficiently competent set of politicians. I think it is great kids go abroad and as more come back (albeit a small percentage perhaps), they too will cause some change. Having experienced the 80s, we are still much better off and a little more enlightened. Asia will have a profound effect in the coming decade and we need to embrace accordingly. The fact that they are so different may be the shock we need to wake up out of our anglophile and western value driven hubris.

    • DB4545

      Michael I hear the anger in your comments but we certainly are not a race of scum. We have some profound social and economic problems which have been mostly self inflicted. We have cultural traits which are ruthlessly exploited by elements at both ends of the economic spectrum in our society. We’re easygoing by nature and have a long history of being deferential to “authority”. At the top end of the spectrum we have a parasitic political class tribal in outlook who are extremely efficient at extracting hard earned tax revenue from the working population.
      At the bottom end we have the permanently unemployable. I’m not referring to people who have contributed to our society and are now unemployed due to the recession. I’m talking about the scum you may have referred to who have an entitlement mentality and see the dole, council house, medical card etc. topped up with drug dealing and other criminality as a divine right.
      The less visible but much more dangerous scum in our midst are elements of our political and business classes.They are creative but are just as unproductive as
      the previous group but have done much more damage. They soaked billions from our economy with overpriced construction and other projects during the “boom”. They pervert tender processes for public contracts allowing “business”cronies to milk taxpayers for millions. I could give countless examples of how they corrode our economy but you get the picture. There are solutions.
      We need local accountable democracy. Switzerland is an example of a system that works. It’s not perfect and it has it’s faults. We don’t have to re-invent the wheel, just adapt it for our needs. We can work hard and aspire to be a Switzerland or allow our complacency and easygoing nature let the place descend into a third world country for our children. The choice really is ours.

  11. tomahawk

    Good examination of the obvious reality.
    This country is spending borrowed money plus its austerity taxes helping maintain a top tier elite and loads of sacred cows.
    Michael D. is lauded for his anti austerity rant while allowing his personal advisers to breach the salary cap. The Irish language soaks up much needed millions. The motto of ‘what we have we hold’is our mantra.
    If you’re young and mobile and have a choice of scaling the ramparts and overthrowing the gombeens or taking your chances and getting out you will take the latter.
    The country within 10 years will be a wasteland but we will have the mea cupla focal.

    • DB4545

      Tomahawk I think we all know the problems and we’ve endlessly re-stated them myself included. Time for fast practical enforceable solutions.
      1. A public sector salary cap of 150K for everyone including politicians. Michael D can rant all he wants on a hundred grand a year less. His role serves no purpose and his rants put no food on my table.
      2. A public sector pension cap of 600 euro in total per week for all and payable only at retirement age. No multiple pensions. If retired politicians can’t manage on that tough, people are rearing families on a lot less. The political and civil service gombeens who were supposed to be minding the till on behalf of the taxpayer screwed up, time for them to face the consequences of their incompetence.
      3. Drastically curtail the foreign direct aid program. We’re bankrupt. We can’t afford to borrow and then hand over 630 million annually in foreign aid. Many of these aid programs are a middle class “dole” for the politically well connected.
      4. Abolish the grant system for third level education.Replace it with a student loan system. This works fine in Australia and elsewhere. It’s a fairer system for all and stops elements of the professions, self employed and farming community hiding income and assets to milk the system.
      5. The recent property tax allows revenue to clearly identify homeowners and all taxpayers.Create a receipt for services system linked to pps numbers for all self employed people. The idea is that Doctors, dentists, builders, plumbers etc. and anyone who is self employed must issue a receipt for services. Allow a tax rebate of 20% of receipt value for paye taxpayers. It reduces the black market and helps honest self employed people from being undermined by rogue traders.
      6. Scrap the price differential in road and agricultural diesel(everyone would pay road diesel prices)in conjunction with UK revenue services and replace with a tax credit system for the industries affected. Revenue services would get the money up front, the trade in laundered diesel would be eliminated, the clean-up cost to the taxpayer would be removed, a large source of income would be removed from organised crime and custom & excise resources would be freed up in both jurisdictions.
      7. Introduce a two tier welfare benefit system. If you’ve contributed to the welfare system by working for a minimum fixed period including self employment (say five years or more) this gives you access to enhanced normal benefits. If you haven’t
      contributed you get a basic welfare payment for a time limited period and must enrol in an education or training program in order to extend this limit. This would reduce welfare tourism and curtail the home grown dole culture.
      This list is not exhaustive but it is capable of being implemented. The working population is at breaking point. Time for change.

  12. volvoman

    It’s funny how the more ‘trivial’ things can be telling. Back in 1993 I spent some time in Germany (was going out with a German girl at the time) and being over there was a real eye – opener. They had remote control garage doors, a swimming pool in the basement, and 2 widescreen TV’s. The father drove an Audi S2 Avant, the mother a Golf GT … both brand new. These people weren’t rich, but saved their money and worked hard.

    The same story was replicated all over the neighbourhood. Practically everyone was driving a late – model car: the only people with cars 8 – 10 years old seemed to be immigrants who were working their way up the ladder. It made me laugh when Harold Wilson’s “we’ve never had it so good” (which I believe wasn’t a correct quote to begin with) was bandied about here. All that happened here is, we came to the dinner table for the first time.

    What made me seriously uncomfortable with the situation here – and no, I didn’t see the epic crash coming – was the fact that our ‘success’ was packaged, marketed and sold to the people. That’s always got to be fishy!

  13. [...] “In these soaring Mediterranean temperatures, spare a thought for the peoples of southern Europe and consider the similarities between what is happening there – and here in Ireland …” (more) [...]

  14. StephenKenny

    So David,
    You accurately called out the crash (I was given the Pope’s Children in 2006), warning those who would listen.

    Is there anything you would similarly warn us about, now?

  15. Wills

    Being that we are in a ponzi-banking gangster economy is it any surprise that the young and the not so young are handled by the power elites as human canon fodder.

    • bonbon

      Or carbon footprint fodder as the greens, billionaires and Royals would have it.

    • cooldude

      I think David needs to look a little deeper at what are the root causes of all these problems that he writes about so well. Only last week he was saying that the Fed were about to start “tapering” their purchases of toxic debt off the insolvent banking system who are actually the real bosses of the Fed for anyone who is interested in actual facts. It now seems that the parrot in charge of the cartel that is the Fed has changed his mind (as I said he would and has consistently done since 2009) and now this “tapering” carry on is cancelled. I have to be clear here because David stil believes all the crap these guys spout every couple of weeks. The Fed’s only agenda is to look after their shareholders who are the commercial banks whom they bailed out with billions if not trillions of dollars in 2008. This money was at ZERO cost to them but it actually debased the existing units of currency in existence. I would prefer if the next time David actually mentions the non existent and never will be existent “tapering” policy he actually waits until it starts. The reason he won’t be doing this is because as soon as this ponzi scheme of debt based money slows down the whole shebang will come crumbling down. It is QE until infinity because we are now at debt saturation stage in the ponzi and any slow down brings the whole scam down. For anyone here who wants to understand how this scam has worked for the last 100 years and who these guys really represent here is a good overview of their criminal organization
      http://www.zerohedge.com/news/2013-07-11/what-every-student-america-needs-know-about-federal-reserve

      If someone comes back with a Wiki quote on the source of this article it will only accentuate their inability to engage in reasoned debate and their own lack of critical and reasoned opinion.

      • michaelcoughlan

        +1.

        It’s not the first time or second even that McWilliams has taken as given the nonsense from official sources. Can’t understand it.

      • 5Fingers

        Without referring to sites which engage in hysteria inducing conspiracy theories, how do you know DMW is talking nonsense about the banking system.

        Personally I wish there were some elite who had control. It would mean humanity has the skills to really sort out this mess.

        What I do see are opportunities lost. What I observe is an Asian ethic around hard graft and good education. This is not as prevalent in the West where many seem hell bent on clutching to old ways and pretending it is only a financial problem caused by an elite. How convenient. It certainly is easier to read waffle sites than study and do exams in the hard stuff and then get out there – but it is easier to complain as we get older.

        • cooldude

          David isn’t talking nonsense the Fed are. He takes them at their word when they say they are going to reduce their QE purchases from $85 billion per month. My point is that they have no intention of doing this as they are now unable to without causing serious repercussions in the equity and the bond market. The so called “recovery” in the US is totally delusional. How can losing 170,000 full time jobs be a sign of recovery. There won’t be any ending to these purchases because they simply can’t do it without bringing the house of cards toppling down.

          • cooldude

            As to your advice to only look at websites which give the mainstream media point of view I will definitely be giving that one a miss. Since I began my reeducation a number of years ago I have developed the ability to think critically and to take make informed decisions after looking at all the facts. This ability is totally discouraged in our education system and is something that has to be learnt. Thankfully this is something I can do and I get my information from many diverse sources.

            Before you dismiss an article as being waffle you should really read it and then point out which facts in the article are incorrect. This would show that at least you have the intelligence to understand the points being made and you can then either dismiss them completely or counter them a different argument. If we all took our viewpoints from the likes of RTE or whichever sources you deem to be correct then there would be no debate just uniform opinions. What is or isn’t waffle is something that is very debatable as I would consider most of the stuff on the likes of RTE as complete and utter waffle. I would still have no problem in pointing out which items I find unacceptable and which facts are incorrect or inconclusive. That is the beauty of being able to think critically and not being totally blinkered in one’s views.

          • 5Fingers

            No Cooldude, I do not think you will find anything of value on the net in mainstream or entertainment or hysteria sites anywhere. Education only comes from working with professionals and doing the courses. One of the things you learn from a thorough education and with years of exams and peer reviews and people nit picking every little finding in your work is that it never is black and white. Reality is complicated.

          • cooldude

            Here is a very simple chart showing in some detail just how effective the Fed’s policies have been in effecting this so called “recovery”.
            http://www.zerohedge.com/news/2013-07-12/are-you-smarter-3rd-grade-economist

        • 5Fingers

          Yes, it is simple and too simple. Question 1. What is the baseline?
          Question 2. What % is related to UnEmployment/Downturn, Immigration, Storms etc. There are lots of reasons for food stamps.
          Question 3. What relationship exists between Agri Employment and Foodstamps. Cause and Correlation is not the same thing. Agri Employment will fall for lots of reasons – not necessarily due to Country’s GDP.

          Not that simple.

  16. whatamess

    times , they are a-changin’

    Enda Kenny and his coalition government are on course to push through the protection of life in pregnancy bill, which will allow for abortions only when a woman’s life is under threat if her pregnancy continues or if she is suicidal.

    http://www.guardian.co.uk/world/2013/jul/11/enda-kenny-ireland-abortion-reform-bill

  17. douglaskastle

    An excellent and timely piece.

    I have been living in Sydney for 11 years (9 down on Bondi beach surprise surprise). I have had a lot of Irish friends come and also go. One thing I know for a fact Irish people want to go home, just give them an excuse.

    I was lucky in some respects, while I was slightly a victim of the Dotcom bubble, I wanted to travel, I wanted to see the world. I had also spent 2 years living and working in the States. Though it has been sobering to meet the more newly arrived Irish here that are only here because they have to, not because they want to. I feel for them and also get a bit disappointed as they don’t truly get integrated in Australia because they try an recreate as much of Ireland as they can over here.

    Michael Noonan got himself nailed last year when he said it was good for the young people to get out and “see another part of the world”. I personally think it was great and while I agree some what with the statement, it is caveated with “if they want to”, been forced to is a whole other story and I think that is a shame on the government for creating an environment where families are been forced apart because of financial concerns.

    Last christmas Ryan Tubridy radio show ran the “Fly home for Christmas” campaign and I listened to some of the podcasts, actually it was only one and I couldn’t get to the end of it because it was that grueling. It was a woman who was left in Ireland wit the kids as her husband had to go to Perth, Australia to work in the mines. When she got to the part of the story when she couldn’t go to the airport to see him off as she couldn’t handle it really affected me and this is the true pain felt across the country. I have also said goodbye at the airport to family in my time. Saddest places in the world are departure lounges, Happiest are the arrivals.

    However, we are at a crossing point. I lost my australian job in technology, which about 100 other colleagues, and have been job hunting here for 6 months with limited success, my wife, an accountant, while still working has been contacting recruiters since November with similar problems. Australia is having problems. So we have decided to move back to Ireland. It was a tough decision, but it looks like we can. There are jobs in the tech industry at least and I have had 3 phone interviews in one week already, wow.

    We want to come home, we were planning to do so back around 2008, but finally it looks like Ireland is turning a corner and at least in my case there is something for me to come back to. Hopefully Ireland has taken it’s painful medicine and other beleaguered industries improve, and grow and look for experienced talent. If there is work, people will come back. It was the bet the IDA threw down when they enticed Intel to Ireland all those years ago, and it was and still is a safe bet.

    We are a resilient people, every where I have gone and traveled the Irish are always noted and respected for been hard workers (also like the drink a little too much). I hope we can apply that to fixing our own country. We are moving back to have kids, I am hoping that generation can finally live without the spectre of forced emigration hanging over their heads as it has done for pretty much every living Irish person.

    Now if we could get a more progressive political party going that is more sensitive to the new challenges Ireland faces in the 21st Century. Would Fine Gael be in power for any other reason than is is NOT Finna Fail. During the last election David I think you were trying to set that up, has there been any movement on that?

    • Bamboo

      That is a great post douglaskastle. Sorry to hear about your job.

      Although my wife and myself have left Ireland two months ago I’d like to welcome you back home in Ireland. Some may say that you are crazy to come home but I am sure your family and friends are delighted to see you coming back. At the start you may find it very difficult to acclimatise to be back again but you will make it.
      Ireland needs positive young people like you and your wife and I wish you all the best in starting a new family.

      • douglaskastle

        Thank you Bamboo. I wish you and your wife all the best where you have settled. We’ve already been called mad to be thinking about moving home, but we’re not getting any younger.

  18. goldbug

    DAVID – DO YOU WANT TO KNOW ABOUT OUR BRILLIANT YOUNG?

    ENDA WANTS TO ADD IRELAND TO THE LIST OF COUNTRIES THAT MURDER

    DEFENCELESS LITTLE CHILDREN

    WHAT AN ADVANCEMENT OF IGNORANCE.

    SAVITA? -> DEATH BY DELAYED INTRODUCTION OF ANTI-BIOTIC?

    WHY IS THERE NO INVESTIGATION INTO HOW THIS INDIAN WOMANS WATERS BROKE?

    WHERE IS THE INVESTIGATION FOR THE INDIAN LITTLE GIRL?

    SO SUICIDE? -> WHO SAYS KILL A LITTLE CHILD SO I CAN LIVE?

    WHAT KIND OF PERSON IS THAT?

    ENDA WANTS TO GIVE IN TO BLACKMAIL FROM THREATS OF VIOLENCE?

    WHERE IS THE STATE TO PROTECT THE RIGHTS OF THE CHILD?

    WHY CAN THE STATE NOT PROVIDE FOR THE MOTHER IN AN UNWANTED PREGNANCY?

    WHY CAN THE STATE NOT AGREE TO PROVIDE FOR CHILD ONCE BORN?

    THE WOMAN DOES NOT EVEN HAVE TO BE CONSCIOUS FOR THE BIRTH.

    RAPE? -> SO THE CHILDREN OF RAPE VICTIMS SHOULD BE MURDERED?

    FOR WHAT REASON? -> THE CHILD PAYS FOR THE SINS OF THE FATHER?

    A LITTLE CHILDS DEATH WILL MAKE YOU FEEL BETTER?

    CAPITAL PUNISHMENT BY PROXY

    WHY NOT MURDER THE CHILDREN OF ALL CRIMINALS?

    ARE THEY ARE NOT EQUALLY TAINTED?

    WHAT IS ABORTION REALLY -> THE MURDER OF THE HELPLESS.

    PEOPLE OF THE FUTURE WILL LOOK BACK AT OUR WORLD

    AND SAY -> THE SAVAGES THOUGHT IT WAS OK TO MURDER CHILDREN.

    JUST KEEP THE MURDER HAPPENS BEHIND CLOSED DOORS -> RIGHT?

    ITS NOT YOUR BUSINESS, RIGHT? A LITTLE PROBLEM TO BE TOSSED AWAY?

  19. Dorothy Jones

    Sitting in Hamburg airport heading home to Dublin. 40% time working in Dublin, 60% in Germany. It’s a short flight and reasonable, so could be a good option for anyone who can’t get full employment in Ireland. There’s plenty of work, you almost always need to have the lingo.
    Just caught up on Irish news now. Mad!

    • Dorothy,
      Have you heard about Dr David Ralph?
      Just met him a couple of weeks ago and he’s doing research into the economic commuter phenomenon. Very interesting guy who’s trying to build up an accurate picture of this situation. I haven’t a link to hand but he’s easily found on google working out of UCC.

      • Dorothy Jones

        http://conference.hi.is/ngm2013/abstract-david-ralph/
        Yes indeed! I particularly like this article by him from last month : Ireland’s ‘extreme commuter’ families
        I’m one of them extreme commuters: and lots of us do.
        Your fur must be killing you in the heat :) It’s so lovely here by the sea today. It’s great to be home :) :)

        • 5Fingers

          Here’s a question for you…if you had a choice (and I am presuming and hoping you do), would you ever stop commuting. Maybe I am biased, but for people who have less need to be rooted due to family commitments (Kids, Parents etc etc), I think this sort of 50/50 way of working is literally the best of both worlds.

          • Dorothy Jones

            Hi Philip! Everyone is different, but in my case work between the two countries is the preference. I know others who travel for work not by choice. It can be very hard if people leave families at home and sometimes it’s sad to see the goodbyes at the airport.

          • 5Fingers

            Welcome back Dorothy. Hope the weather stays up while you refresh your Oirishness. Yes, everyone is different. But on balance, being abroad is for most a positive experience – at least for the Irish. If you only see the world thro’ the Internet, TV or Radio, you only looking down a straw. People to-ing and fro-ing as being multi lingual can only be good for this place and for themselves.

        • Bamboo

          Unless you want to write a paper on it – not sure what the issue is in “extreme commuting”?
          This is the way we earn a living for generations in the past and in future generations all over the world and in all walks of society. Commuting for hours everyday, commuting to another country everyday, every week, every month. There is nothing new, unusual or extreme about it.
          In my opinion, the extreme commuters are the ones who can work from home, work around the corner from home or cycle to work.

          • 5Fingers

            To be honest, the US is one giant super commuting culture for a century or more. Upping sticks and moving a few 1000 miles several times in ones career is nothing to these lads. Maybe it is the final barrier that needs to be properly sundered in Europe – by which I mean the natural boundaries due to language.

    • martino

      Hi Dorothy, I spend a bit of time in Hamburg too, flying home next week after six weeks out there. I like the idea of international commuting because it gives you the best of both worlds and you don’t lose touch with family and friends in either country. Do you mind me asking what line of work you’re in? All the best, martino.

      • Dorothy Jones

        Hi
        Lots of different jobs, but mainly start to finish construction projects for German clients who outsource these things. Our office is in Speicherstadt. If you would like to touch base : @DorothyJonesDJ

        • martino

          Hi Dorothy, Speicherstadt ist doch schoen! I’ll be back in Hamburg in a couple of weeks, maybe we can meet up then. Is that an email address you posted? Tschuss, martino.

  20. Adelaide

    The article poses the question, “What if our brilliant young never come home?” and its answer is “Bye Bye Pensions”

    Alas the Pension Ponzi Scheme is presently unfolding.
    “Irish Government warned of unfolding pension ‘catastrophe” http://www.rte.ie/news/2013/0712/462089-pensions/

    So, no jobs for the young, no pensions for the retired. The Money Creators Monetary Model is reaching its end game.

  21. 5Fingers

    + 1 Adelaide

    We focus too much on Money/ Bond Yields/ GDP/ Export numbers and so on. But really all of these can show amazingly positive trends in an environment of high social injustice or structural weakness…e.g. aging demographic of the working population, distribution of prefessional classes and so on which can be very worrying signs that can jump out and bite you.

    The key problem for me is how you measure the health of an economy. Current measures are downright misleading. For example, GDP – can increase if you have a natural disaster or if you rev up and economy – but it never measures “Social Wealth” by which I mean – the thing you notice when you are in a place for a little while an you sense wealth, safety and justice and a sense that there is an alignment with a social contract.

    Did I hear of a new metric they are trying called “social profit”. Anyone ideas on this concept and is it going anywhere?

  22. Adelaide

    “…measure the health of an economy?”

    You may be interested in this engaging documentary on that very topic.
    “Who’s Counting? Marilyn Waring on Sex, Lies and Global Economics”
    http://www.nfb.ca/film/whos_counting/

    FYI She was the youngest member of the Parliament of New Zealand at 23 and single-handily brought down the government in 1984. Her best known work “If Women Counted” is the subject of the documentary but it covers a lot more and Waring herself is worth the watch.

    • 5Fingers

      Totally agree we have another blind spot and it can debilitate over half the world. I would say that the 20 and even more so the 21st cent is the feminine enlightenment and it has yet to flourish properly. And I think it is also assuming greater importance. So remain positive.

      Question is can we put teeth on yhis that most pragmatists can buy into. What I am looking for is something akin to this http://economics4humanity.wordpress.com/2013/02/05/profit-for-social-purpose/

      Basically I wonder if there a metric that can better inform businesd decision making at a government and company level.

  23. 5Fingers

    This is why I am optimistic. Let the youth fly and stand back…

    Jack Andraka: A promising test for pancreatic cancer … from a teenager http://ted.com/talks/jack_andraka_a_promising_test_for_pancreatic_cancer_from_a_teenager.html #TED Air: http://goo.gl/2Aftm

  24. Well David. I am impressed that you can admit to not knowing what the solution to the problems are. But not impressed that you have no answers!!

    We do know that the most overriding problem is debt.
    We know that it is endemic and far reaching.

    There are a few other things we know too.

    The primary one is that our money system is debt based and designed to enslave and impoverish.
    It is a fact that all fiat central bank currency is loaned into existence. Therefore 95% of all money is an IOU.
    We know it is created out of thin air and loaned to government or major favoured commercial banks and thus into the economy.

    It would seem rational to wish be rid of this system if we wish to be rid of debt. Therefore central banks should be closed. all central bank fiat money abolished and replaced free with treasury bills and credit at no interest.

    Ireland can be a beacon to the world. Leave the EU monetary system and reclaim sovereignty by issuing a debt free national currency.

    This would be a good start and there are many other things to follow up with. Your comments on this please David, Yes, no or maybe and reasons thereof.

    Thanks.

    • Forgot to post the article on the Federal reserve. The current grand daddy of central banks.

      http://www.zerohedge.com/news/2013-07-11/what-every-student-america-needs-know-about-federal-reserve

    • bonbon

      Ireland will certainly not be an Austrian School cheerleader beacon. Of course FG, Enda, Noonan would like it to be!

      Monetarism of this particular School blinds the hapless as to the economics best shown by the Triple Curve

      Address the physical collapse with well thought out reconstruction, and the Credit System necessary for immediate action, reminiscent of a Marshall Plan, and then maybe someone will answer your questions.

      • Bon bon you are asked by DB4545 to explain the triple curve. So have at it and demonstrate your expertise and understanding. Never mind the above cop out reasoning to not answer a question.
        I suspect that if I hold my breath waiting for a cogent answer I will simply expire.

        While you are at it. You could explain the proposed credit plan and how it works and also while I am thinking about it, “Hamiltonian banking” you also propose.

        I do not need your reply for myself as I am fully aware of the effects of your proposals but I wonder if you do , so I would like to see your explanation. Then maybe it can be properly evaluated in a reasoned discussion. That would be beneficially illuminating.

      • Bon bon, I was not asking a question per se!! but enquiring as to the opinion of McWilliams. He unfortunately seems devoid of answers. You posit reasons and opinions where none exist and also are devoid of explanation for how your proposals work in the real economy.

  25. bonbon

    It is popular, and populist in the Beppe Grillo sense, to be “flumoxed”. But there is no excuse for it. Perpetrating “flumoxification” is endearing, but as things careen to the next crash looming ahead, others seize the moment :

    Bill to restore Glass-Steagall unnerves Wall St

    Wall Street and London are not flummoxed at all, and see what is coming down the line at them, make no mistake about it.

    This is not going to be pretty!

  26. DB4545

    Bonbon..you seem to be passionate and earnest about economics. I try to be better informed if sometimes none the wiser about where we’re heading. I read everyone’s contribution with respect and interest. I’m reasonably bright about some things and not so bright about others. I’ve tried to digest this triple curve business with limited success. Can you explain in simple non-technical language and in a few short sentences what the triple curve is, and it’s relevance/importance to the ordinary Man/woman in the street? Kind Regards..

    • bonbon

      It is difficult, the monetarist disease is pandemic. Buthow else could this disaster be tolerated?

      One must be clever enough to admit that something very deeply, passionately believed, almost as precious as “my wallet” is simply totally wrong. that is the first step. It boils down to admitting a belief in the insane wildeyed magic that economics springs forth spontaneously but in an unknowable way from mere monetary tokens of any kind. Think about it – that is the dominant trend of the blog, the patron, the politicians and Tom, Dick and Harry. Even parents and siblings have this secret belief! But I am absolutely sure none were born with this insanity. It is a decree to bow to.

      Is that non-technical enough for you then?

      • DB4545

        Bonbon granted it is non-technical but It reads like James Joyce portrait of the artist as an economist, and just as unfathomable. Bonbon please don’t take this as a personal attack on you but I don’t like priesthoods of any kind( i.e. religious, legal, medical) hiding behind language to practice their craft and using language to remain aloof from the herd. The real gift of intellect is to inform and educate the herd. If Glass-Steagall is economist shorthand for the separation of investment and commercial banking, or defining the risks of investment bankers using commercial bank depositors money as an ATM for reckless and criminal gambling well just say so. If paper money or electronic money is now useless and we can’t grasp this because it is so deeply embedded in our psyche as a symbol that has intangible value well just say this too in plain english. It may not be as elegant as Latin or the nomenclature of economics but at least I can f**king understand it.. Kind Regards..

  27. There are a lot of places one can go to. The grass is always greener on the other side of the fence. I emigrated for personal reasons rather than economic directly. Those friends of mine who stayed put did well enough by working and maintaining local roots.

    Many countries are falling into fascist societies. one may well be better at home than in a foreign land. Better the Troubles you know!!

    http://dollarvigilante.com/blog/2013/7/14/tdv-week-in-review-july-14-2013-police-morphing-into-domesti.html

    • Bamboo

      +1
      Indeed “many countries are falling into fascist societies”. IMO Ireland is no way near anything like that and I am sure ROI will never ever fall into such a society – at least not in our life time. For those of us who have travelled a lot and lived in diferrent societies we should know that the grass is not greener on the other side.
      One should try and lIVE in different cultures not just a different country. Then you’ll find out very Quick it is not so bad at all in Ireland.

      • bonbon

        I’ll give Tony a +1 on that, fascism is now rampant. It is amazing how it is explained away, even with Snowden doing real patriotic work. It was explained away in Europe until about 1938 last time!

        What is being done to healthcare, pensions, the economy is pure fascism. Hitler was a bankers boy, never forget, his Finance Minister Hjalmar Schacht, head of the Bank of International Settlements, invented Austerity. Schachtian economics is fascism. Promoted by the Economist Mag (Schumpeter), Wall Street, with open complaints now that Europe has too many laws blocking fascism.
        Top Global Management Consultancy Calls for Shock Financial Asset Wipe-Out, Which “Requires an Environment Last Seen in the 1930s”

        Don’t delude yourself for a minute – this is now policy!

        • Plus 1 from bon bon, I nearly fainted.
          I said months ago that we are not so far apart on many items. It is a matter of understanding expression and having a common sense debate.
          Thank you bon bon.

  28. According to the use of electricity , the US and many other countries too , are in recession. (Depression). The economies are not expanding in economic terms only in monetary terms. Can you spell stagflation yet?

    Soon the monetary economy (bonds ) will follow.

    Gold and Silver Markets are Looking Up Stock and Bond Markets are Looking DownMark J. Lundeen

    • bonbon

      Hamilton’s bank was destroyed by a favorite of the Austrian School and Wall Street, Andrew Jackson. FDR was only able to manage a very limited effort (the FED being what it is), and after both Nixon and Greenspan deleted Bretton Woods, and Glass-Steagall, impossible now.

      So First Step – Glass-Steagall as the Financial Times again called for called for last week.

      Then Hamiltonian Credit on a truly massive scale where nations can reconstruct. This has nothing to do with Mad Helicopter Bernanke and Daft Draghi.

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