July 25, 2013

Time to break convention

Posted in Banks · 205 comments ·

According to the great American economist, JK Galbraith, “the conventional view serves to protect us from the painful job of thinking”. The painful job of thinking is what makes the difference between doing the right thing and simply doing the thing that everyone else is doing just because the conventional view concludes that it is right despite mounting evidence to the contrary.

Indeed, Galbraith went one better in summing up why many people refuse to change their views, particularly if they have invested much time, effort and credibility into establishing that view. The following quotation from Galbraith sums up what’s happening in the policy making of the insiders in Ireland: “Faced with the choice between changing one’s mind and proving that there is no need to do so, almost everyone gets busy on the proof.”

The conventional view on the Irish economy is that we must stick with the programme and that we must continue to grind down wages and prices, squeeze demand and raise taxes. This we have been told for the past five years is the only way and if we stick to this approach, the economy will rebound vigorously.

This approach shows that the people who run the country have actually no idea about how a small economy works and also have an entirely invented narrative which has never been evidenced anywhere in the world. The same story is being spun to the people of Greece, Spain, Italy and Portugal. Ultimately, the same will happen in France because it is a creditor’s view of the world imposed by the creditor nations of Europe against the debtor nations.

The flaw is that for an economy to grow, aggressive budget cuts need to be offset by a simultaneous massive easing of monetary policy – as was seen in Reagan’s America of the early 1980s, Thatcher’s Britain in the mid 1980s or indeed Haughey’s Ireland of the late 1980s. Without massive monetary easing, the economy will seize up in the face of rising taxes, cutting expenditure and an overvalued exchange rate at a time when the banks are not lending.

This is the stuff the average honours student doing economics for the Leaving Cert should know. Not surprisingly, therefore, with broken banks, the Irish economy is not responding positively to the present policy, in fact it is going in the opposite way.

Income is falling, domestic retail sales are on the floor, unemployment and emigration are rising and now we realise that the debt to income ratio – the one statistic that the Government seems to focus on as a litmus test for the success of the policy – is going the wrong way. Ireland’s debt-to-income ratio has actually risen by 12pc this year to 125pc of national income.

The reason for the deterioration in this ratio is straightforward. If your debts are greater than 100pc of your income and the growth in your income is less that the annual rate of interest you have to pay on this debt, the ratio of debt to income has to rise. Either you need to get your growth rate up or your burden of debt down. So what’s it going to be?

Before we answer that question, it is crucial to disentangle cause and effect. At the moment the conventional wisdom is suggesting that if we can only get the budget deficit down to some level, we will be okay. The logical implication of this approach is that the budget deficit is the cause of our problems. Therefore, conventional wisdom indicates that reducing the deficit is the solution to Ireland’s woes.

But what if the budget deficit is the consequence – not the cause – of our distress? A much more persuasive angle is to see the deficit as the democratic consequence of a massive balance sheet recession, where the savings rate of Irish people and companies has risen massively due to the collapse of the property market, negative equity and the general slump in confidence.

As savings rise, demand falls. If the Government doesn’t spend in the economy, the slump in demand will cause unemployment to rise even faster.

Proponents of the present policy don’t dispute this but they claim that foreigners will buy Irish goods in sufficient bulk to make up for the collapse in local demand. The implication of this would be that the Irish current account surplus would have to expand at a rate quicker than the Government is cutting spending just for the economy to stand still.

But this is not happening. In truth, the budget deficit is the consequence not the cause of the present malaise.

Saying the budget deficit is the consequence is not the same as saying that the State should run a deficit into perpetuity. But when a country is suffering from a balance sheet recession, with an overvalued currency and a banking system that is dysfunctional, rapid tax increases and spending cuts will make the situation worse.

It is quite obvious that our policy makers and the EU bosses, who are simply looking to keep the entire EMU project alive though all sorts of monetary tricks and sleights of hand, are falling into the Galbraith trap of avoiding the painful job of thinking.

No one is saying that there is a quick fix, but we must entertain the idea of an alternative involving “parking” huge amounts of domestic debt, dealing with our creditors fairly and leaving this currency union which has brought only disaster to Ireland both in the upswing with far too much credit cascading into the country and in the downturn with far too little credit available to refinance the country.

Either we leave the euro and instill a new, much weaker Irish currency, which reflects the much weaker Irish economy or we seek common cause with the other debtor countries within the euro. A united coalition of debtor countries to say to Germany “enough of this nonsense we must mutualise debts now, you take a large haircut, let’s fix this problem right away and stop pussyfooting around waiting for your election results”.

Europe’s economy is seizing up and the rest of the world is moving on. Are we to be sacrificed on the barbarous relic of yesterday’s monetary union and the whims of the German electorate just because we don’t want to involve ourselves in the painful job of thinking?

How much more evidence do we need to at least begin the process of doubting the conventional view?

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  1. A historic piece David.
    The demise of the West.

    • And to use that horrible American phrase, the incumbent elite here have too much skin in the game to effect change.
      It goes back to your old argument that this is a battle between young and old, where the old have the power and the young who should want it have been managed out of that aspiration through the usual channels, be that forced emigration, debt or an absolute control on job creation. These channels are managed to great effect here because we don’t have a critical mass of people to call for change. It’s noteworthy that since the foundation of the State and thereby the evolution of our domestic elite, that the population haws been kept at or below 3-5 million peasants. Any more and something might change and we wouldn’t want that now, would we?

      • Original-Ed

        I think that you’re being unfair here by intimating that the old are planning and scheming to exploit the young.
        The so called old went through far harsher times in their youth than the current ones.

        In those days you had to either pay or emigrate for an education and to add insult to injury, on returning you had to pay for the next generation’s free education through exorbitant taxes in the seventies. Mortgages were between 60% and 80% of house’s value and only mutual building societies were allowed to give them. The mantra back then was that the spend on education would liberate the masses from hardship and lead to an enlightened prosperous future. In fact it has done the exact opposite by creating unrealistic expectations in people who haven’t got the talent necessary to make things happen.

    • Adam Byrne


    • concannon

      David Why don’t you get organized with other like minded people and set up a new political party. You are just preaching to the converted. I agree with everything you say, but there is only so much that can be said about the corrupt system we are now living under.

      • David Why don’t you get organized with other like minded people and set up a new political party

        Because unlike some politicians he has recently admitted to being devoid of answers to the crisis

      • Pauldiv

        The idea has been suggested in the past but I came to the realisation we are stuck with the parties we have

        David’s talents lie in education and writing and he is a very powerful communicator. He plays to his strengths and works hard at his craft despite having chosen a shit vocation that is a a nonsensical pseudo-science dressed up to sound like logic

        He has the thick skin required of a politician but he isn’t one. Thank christ. I like him the way he is even if he chose a dodgy career and a crap football team ;-)

        We are stuck with the politicians we have and we are at the mercy of the tribes. They will vote for their man even if he has been raided more times than a whore maister’s sheebeen

        And that is the problem frankly

        It’s not you, I or David that is the problem but the lazy electorate whose moral decadence has sunk to such a low that they deserve all the shit that rains on them

        They want their entertainment and appear to have no interest in thinking nor the desire to debate. They just want a laugh

        Learn to laugh at it and try to survive. It is naive to expect a world free from corruption and gombeenism but we can lead by example as individuals by refusing to stay in step with the usual ‘don’t rock the boat’ mentality. Even if it means you know they will call you ‘a quare hawk’. Fuck them

        And stay away from politics and be your own man. They will only force you into positions that would make any decent person afraid to look in the mirror.

        Stay clean, play life straight and try to be a good person.

        • Adam Byrne

          Precisely Paul.

          • Paul Divers

            It will be the usual big two contesting the next election Adam and I know you and the others know it

            It’s as predicable as my prediction that daylight will appear again sometime around 4.30 AM tomorrow morning

            You have to laugh

          • Adam Byrne

            Yeah, I don’t really care at the end of the day, I can look after myself but the general populace are being ripped off, due in no small part to their own ignorance.

          • Paul Divers

            I was under the imprezzie you don’t really care. I’ve always had you down as a look after number one type of guy which is fair enough

            If people are being exploited then it’s their call. They can act or suffer in silence

        • Original-Ed

          Call it a pseudo-science is a bit harsh – it’s a non-deterministic science.
          Would the Brits have been so successful without the likes of Adam Smith ?

          It’s certainly more of a science than so called Political Science – calling that a science is pure fraud – look how far Michael D got on pure bull shit.

          • Paul Divers


          • Paul Divers

            But. You can never persuade me he didn’t choose a shite football team!

          • Adam Byrne

            A useless waffler living the high life off people’s taxes.

          • Paul Divers

            His sound bites go down very well.

            Proud to be Irish is what they usually say on politics.ie when MDH forgets to take his blue tablet and has his customary outburst

            Like I said it’s all so predicable and makes good tv

          • Adam Byrne

            Proud to be Irish my ass.

            Anyone seen that awful RTE program “It’s an Irish thing”?

            The Irish – full of their own importance and couldn’t manage a piss up in a brewery

            - actually that’s a bad example, they could definitely do that – and that’s about all.

          • Paul Divers

            No Adam. He chose to support a shite football team.

          • Adam Byrne

            Football is not a matter of life or death.

            It’s far less important than that.

          • Paul Divers

            I know Adam. I don’t watch Irish television thank god but love/hate was good drama

            Often I’ve explained to people that you can make a film using a mobile phone

            Why not is my question

            Surely it it is possiible to make compelling art with a mobile

            As Davido says it takes imagination and thinking.

            I reckon I could create compelling art with a mobile. I have been thinking about it for some time.

          • Adam Byrne

            Love / Hate was decent.

            It’s hitting Channel 5 in Britain now:


          • Paul Divers

            Yes it’s far less important I know.
            In fact Adam football does not amount to a hill of beans.

    • bonbon

      Ochon ochon’o is easier than thinking is’nt it?

      Hand wringing, demise, and crystal ball gaping is comforting is’nt it?

      Put on the thinking hat!

  2. When an apple falls allow it to reach the ground .After that and only then ‘think’ what should be done with it .

    • michaelcoughlan

      Very insightful.

      • Some of us would go scrumping and not wait for the apple to fall. Bruised fallen apples are not the best eating. Make good cider though.
        Apples are big. Tempted Adam and dinged Newton’s noggin and was a tension producer for William Tell’s son.

        • Pauldiv

          I love the last line. Such mastery of understatement.

          • Paul Divers

            I am trying to imagine the sketch and it sounds like Monty Python.

            The young tied to the tree praying his father doens’t leave his side as he faces a strongbow with enough potential energy to split an oak tree

            Hey alright da it’s cool don’t worry. Just a little tense around here you know?

            Be grand in a minute sure. Calm down now da.

          • Strongbow is a good but not cheap cider available here in Victoria.
            Great hot summer day pint.

  3. In an older world the monarchy have been known to debase the ‘gold coins’ so that there are more to float around .

    In todays world Soaps ( Coronation Street ) demonstrate how to water down the alcohol served in a bar and try to get away with it .

    There were no regulators in the older world and there were preposters during the Reign of the Great Berti

    • hibernian56

      Soaps – One of the best tool of control. If the peasants are too lazy to read then show them how to behave. Over 30 hours of brainwashing a week. I once lived with a girl who’s routine was: Home from work, Neighbours, Home & Away, then, Fair City, Emerdale, Coronation Street, East Enders depending on the day of the week.

      Each show is “educating” people regarding different scenarios. It tells them how to cheat, how to react when cheated against. How to Lie, how to react when lied to etc. Mostly negative stuff. It shows social behavioural traits that are unacceptable in most scenarios, but are eventually becoming excepted due to repeated exposure / viewing.

      Have you noticed when walking around in a city centre how most young couples behave? It’s like watching an amateur dramatics review. Loud, crass, vulgar and always seeking attention. I remember recently being in a shop where two young peasants were screaming at each other, literally screaming, they are learning this from soaps.

      I would never have dreamed of such public displays growing up. But their parents are brain dead so why not their over weight off spring?

      I’m 43. Never watch soaps, I never saw the point. I always preferred going for a point and a laugh with friends. Today I try to avoid watching domestic TV. RTE is a vested interest propaganda whore machine. When I do watch TV, I will watch documentaries (nature / science). History is written by the victor as the small man once said.

      I think that CSI and all the “It’s ok it’s only murder” shows have raised the bar are far as sensitising the masses to violence. I honestly worry for our race when we find our entertainment in watching a show that not only demonstrates how to kill, but shows the autopsy, method and dodgy forensic work. What ever happened to Columbo? Was that not enough?

      I get my info from certain web channels. Although sometimes biased, it’s certainly more informative & truthful than the muck slung at us by RTE et al.

      My definition of soaps:

      Soaps – Why live your own life when you can watch somebody else?

      They need to be banned.

      • Irish PI

        plus 10,0000.
        Want to start change in your life and your fammlies?
        Kill the stupidifier in the corner of your living room!
        By that I mean take it outside and take a baseball bat,hurley or gun if you have one and clobber that thing into so many bits of plastic.
        Most people dont know this but when you are watching TV,your alpha brain waves are on a level of hyponsis where suggestions can be implanted.Why do you think subliminal TV advertising was banned in the 1970s??It’s been around that long.
        Get back to talking,discussing debating and finally hopefully angry enough to start demanding change in our society.
        I reckon if you wanted to be a feared terrorist group these days there is no need to take one solitary human life.Simply knock out the TV and internet masts on a regular basis,especially before some big football match or world cup.would that get people angry enough to demand change??

  4. Seanie

    As Erber wryly notes: “Austerity is everywhere but in the statistics.”

    The PIIGS are actually spending more in 2014 than at the end of their spending binge in 2008.

    “The PIIGS remind me of the patient whose doctor orders him to lose weight by eating less. The patient responds by doubling his calorie intake. He later cuts back by ten percent and wonders why he is not losing weight. The PIIGS went on a spending binge from which they do not want to retreat. They then blame their problems on austerity and the lack of charity of others.”

  5. Bamboo

    Thanks David, Great thinking.
    Isn’t that the same with religion for thousands of years and billions of people? We stick to some type of religion at all cost. This policy is looking more and more like religion.

  6. francesco lenzi

    Very nice piece prof. McWilliams. Unfortunately, also in Italy, we have exactly the same problems. Thinking is a very hard and painful job.

  7. michaelcoughlan


    Much of this article is a rehash of what went before. When you view the attitude of the govt against the backdrop of saving the euro at all costs which means saving the banks at all costs it all becomes clear.

    Max keiser David remember him from kilkennyoconimics? Listen to what he and reggie have to say about the Irish banks in the following video. Watch from 19.00 on for aib and from 12.45 for the overall view.


  8. The future King will be George .We already have our own George Mandarins professing as Public Pension Aristocrats by an order of a defining moment in the sand that enslaves every young Irish man and woman in the lands of this isle .

    We do not deserve to be called a country any more . Lets return to the jungle where life is free.

    • joe hack

      He is not my future king please if you must mention tabloid celebrities at least call by the correct title – The future king of the English?

  9. stevedublin

    waiting for Germany’s election results.
    - in fairness that wouldn’t be a long wait, elections are in September afaik.

    • joe hack

      Yep! but then there always elections somewhere else…

      when making decisions Ireland should and needs to be as independent as possible of those outside elections . The rest of the world is not waiting for the next Irish election nor does it much care if Ireland slips in to the the abyss of a 3rd world country.

      Ireland has to take control of it’s own affairs, wishful hoping is not a progressive…

  10. Gold continues to fall ……and Fall ,,,,and FALL

    • joe hack

      “like tears in the rain”

      • Paul Divers

        Very profound jh. I like that; something a poet could run with and see what happens after 15 mins of stream of consciousness writing. The Morning Papers – The Artist’s Way

        Biggest load of crap I ever read. We have it and nurture it or we don’t.

      • Paul Divers

        Smokey Robinson. Tears Of A Clown.

    • michaelcoughlan

      A good time to buy more and more and more then isn’t it?

      • joe hack

        I don’t need it as I can’t eat it but it is good for making electronic components it’s also used in medical devices which along some electronic components helps people live better lives.
        Buying gold just for the sake owning it sounds like something a miser or hoarder might do…

        • Adam Byrne

          A total waste of time, energy and money.

          • Irish PI

            yup.go get a gun liscense and stock up on ammo,ciggeretts,and everyday,small but high intrinsic valueble items.

        • michaelcoughlan

          You forgot to mention that it is also used as money for which it has been used for Manny thousands of years longed than electronic components.

          Misers can also hoard cash of diamonds or land or beans or shotguns etc.

          Gold can be spent as money in exchange for goods and services so the real wealth lies in the skill of the individual.

          • Pauldiv

            Some men fight for silver and some men fight for gold.

          • Paul Divers

            But the IRA are fighting for the land the saxons stole

            I want to know what it feels like for anyone over 40 listening to the old rebel songs

            There is a cringe factor surely?

            Is singing Irish rebel songs a sign of delinquency in this day and age

            Do you like rebel songs and which ones.

            Just a simple question

            Our songs of rebellion are world famous but today we look and sound like a bunch of chumps

            Any input?

        • And you do not eat your paper, plastic money either last time I tasted it. Paper money is good for papering the cracks in the walls and for lighting the fire. So I read was the case in the dirty 30′s. do not recall anyone covering a hole in the wall with a silver or gold coin. funny thing that, as all money is the same. Can’t eat any of it.

          A miser or hoarder is otherwise called a saver. Savings used to acquire capital that builds businesses that provide jobs and raise standards of living.

          Your paper debt money does the opposite. Keep spending it and soon you will be broke and in debt, the money masters slave. Thank the hoarders you are still able to live.

          • joe hack

            Customers that have money to spend create jobs …money is a trust based iou system with flaws that need fixing.

            Gold is backward, money works best when it is not a commodity money buys commodities that we can eat.

            You are using fiat money to buy gold, money is tool that needs to move it needs to be spent to create jobs.

            Gold is medieval fear based money system
            hoarding is fear based – stagnation

          • Adam Byrne

            Well said joe.

          • Adam Byrne

            Gold is the “screw you, I’m alright Jack” (non) solution to the problems of the world.

          • Adam Byrne

            Gold is the “screw you, I’m alright Jack” (non) solution to the problems of the world.

            And the legions of goldbugs are it’s propagators.

          • Adam/Joe your denigrations are baseless ramblings without any foundation. You are talking about misers perhaps, not sensible savers.

          • Paul Divers

            I’d love to round up the goldbugs and make them eat it. I’d tell the paper bugs to start eating and I would tell any hoarder of any persuasion to start eating

            Hoarding is a mental illness

        • Paul Divers

          There are all sorts of hoarders and they are peculiar people. Quite odd actually and I’ve never understood hoarding. It’s a strange condition

          Some men collect metals and some men collect Hornby Railways and recreate famous railway junctions in their lofts. Some men collect toy soldiers made of glod

          At least hornby railways are fun

          Conclusion. People are strange.

    • cooldude

      Factually incorrect on the price of gold from the paper bugs. Gold has been on a ten year bull run and the correction which ended a few couple of weeks ago is nothing out of the ordinary in this run. From a price of around $350 in the early 2000′s the price of gold rose to over $1900 in late 2011. During this run there were a couple of significant corrections that always occur in any bull market when things get a bit frothy. The recently completed correction to below $1200 is not out of the ordinary in this run and the price is rising again and will go to an all time high within the next 12 months. The price is currently around $1330 and will rise to over $3500 as the debasement of paper currencies continues and accelerates. The ability of central banks to control the price is waning as the demand from Asia and especially China is relentless. Gold has always been a good form of money and the failed experiment of the last 42 years with unbacked paper currencies will be seen as just another failed attempt and gold will resume it’s role as a viable form of money.

      • rincewind

        Who would care about the current price of gold?
        Owning gold is not an investment. Over the long run the price of gold will go up as fiat money declines in value. That is certain.
        If there is a thrill that an ounce of gold may be worth $5000 or whatever in the future, then that is gambling and speculation.
        Gold will be worth $5000 and more at some point, but if one gains in real value depends on the entry point.
        Gold should be seen for what it really is: Currently, the ultimate, transportable store of value. If you had some, you could hand a few coins to your grand children each on your deathbed. Might save on some taxes.
        I believe in gold as a way to store savings, but I do not believe in all these wild figures flying around what it might or should be worth. Again, it is not an investment, but secure savings in the long run.

        • You contradict yourself over and over.
          A good store of savings but a speculation.
          I do not believe in these wild figures flying around but it will go to 5000 as the fiat currency devalues.
          Who would care about the price of gold but one could leave it to your grandchildren. Why? curious trinkets!

    • Wanna lay a bet for the next 5 years John.

      I’ll pay you 1 ounce for every euro it falls in the 5 years from today, and you pay me 1 ounce for every euro it goes up.
      I figure you will owe me 3,000 ounces. How deep are your pockets. Maybe you will hedge your bet on a futures purchase. Barrack gold is thinking of doing so again. Cost them 4 billion I think it was to buy out the contract last time.

  11. joe hack

    David McWilliams Is A Party Pooper – Boo David – There Still Some Fracking Beer In The Basement Suck Up Hard Enough?

    “Time to break convention” thinking hurts that is why most don’t do it and they don’t do it even when the approaching tigers outnumber the herd the wildebeests continue to stay with the ‘flock’ once more over a cliff…

    “Either we leave the euro and instil a new, much weaker Irish currency, which reflects the much weaker Irish economy or we seek common cause with the other debtor countries within the euro.” -It is Bizarre that Ireland’s is rated as the 15th richest country in the world – This is not a decision that needs much thought and this thinking does not hurt much but the effect will – our leaders dilemma- ‘we are living way beyond our means’ – political suicide – they knew the party was over before the last drinks had been served back 2007 but there were election looming and in anyway, who wants to be a party poop…

  12. joe sod

    the sad thing about ireland that being a small country and being an island it would have been so easy for it to adopt independent policies. Afterall that was the reason for fighting for independance. Probably the point where ireland truly was independent was during the second world war when it resisted british and american pressure and and stayed neutral. I did not agree with this policy but admire Devalera for his strength and eloquence in defending this position. I think ireland had alot better leaders in its first 50 years than it does today. De Valera is much derided today because of his conservative policies but he had a vision for ireland which he was prepared to defend. We need a political system which gets smart capable and visionary people into parliament and the top of the civil service

  13. Pauldiv

    A1 stuff but heartbreaking.
    We are facing an Iron Curtain.

  14. Debt is the biggest obstacle to economic recovery——-Period


    This morning, I wrote of the unsurmountable, catastrophic damage to the “so-called recovery” that even the tiniest interest rate increase would engender. And indeed, it didn’t take more than an hour after hitting “send” before concrete evidence of such SMASHED AMERICA IN THE FACE. Yes, at 10:00 AM EST, new homes sales data depicted the biggest two-month price drop in five years – and the second largest decline EVER…”


  15. Pauldiv

    In the face of ambiguity, refuse the temptation to guess.
    There should be one—and preferably only one—obvious way to do it.
    Although that way may not be obvious at first unless you’re Dutch.
    Now is better than never.
    Although never is often better than right now.
    If the implementation is hard to explain, it’s a bad idea.
    If the implementation is easy to explain, it may be a good idea.

    • Paul Divers

      This comes from The Zen of Python. I discovered Python recently as wonder why I was asleep for so long.

      When it comes to mastering technology you need to know about computer code. It’s a fact of life but code should not be scary. It’s no more difficult than understanding how the markets work and probably easier and certainly more reliable

      Once you know about code the intrusive modern world begins to make sense. It answers questions like : ‘how can they know that much about me’

      Code lets you express yourself freely and the sense of freedom is intoxicating and most of you guys would have no problem learning Python. From now on I will be encouraging people my way because I spent years feeling intimidated by inferior technologies that didn’t fit with how my brain is wired. They were popular because conventional thinking said so whereas I though they sucked

      Now I intend to be dangerous with it and want to teach. I love practicing what I preach and explaining things to the layman. I hope that sounds like an honourable way to focus my talents

      If you know someone who has the type of logical brain suited to computer programming then tell them to look at Python first. Screw Java and .Net. You get further with Python in a fraction of the time. Python offers simplicity and elegance and rolls royce comfort and working with it makes you feel in control

      Schools and colleges are behind the curve and not at the races. We need a workshop approach rather than a classroom approach.

      Let people rip computers apart and get the soldering Irons out. Get back to real learning and real hacking.

      Someone with ideas will get started faster with Python and if you are a businessman wanting to do things for yourself and hit the ground running then learning Python could be the best investment you ever made. Python is assuring whereas Java and .Net are tired old horses that are pain in the arse

      If we are to encourage more Irish people into embedded software development and economic growth then we need the right tools and the right teachers to create awesome products. But the kind of teachers I have in mind are not available. We are unemployed and on the outside. We shun Microsoft and use Linux and free software. If you have that type of mindset then you are considered dangerous and unemployable in corprpoate Ireland. Too smart

      They are geniuses but don’t hold all the right papers. That is why they don’t bother teaching and just work on personal projects outside of the mainstream. They would love to spend time teaching but in the meantime young Irish people are being trained by teachers who don’t have a fraction of the talent of the doers.

      Embedded software could be a growth area. It’s hard and to be good at it you need to be dedicated. This means no soap operas, newspapers and pissing around on Facebook and Twitter.

      If you love your work so much then you will not visit facebook, twitter and only check your email once a day. Heaven can wait

      Solving the problem at hand takes over your thinking and you drift off to sleep and waken with the problem fresh in your head of course you take it in your stride and don’t let it dominate you. It’s a buzz especially if you know that cracking the problem will feel like a massive achievement

      And I mean massive.

      I have ideas to create things of value. I see the light and the demand

      But right now I would rather look out the window at the late July colour and begin contemplating winter. I will still be here this time next year taking solace in the thoughts and shared wisdom of you small band of Irish brothers. There is no hurry

      I can tell you one thing. In a year’s time I intend to prove my abilities and reach my potential without spending a single penny

      And then I will take a holiday in Lisbon.

      All in good time.

      Meat Loaf – Heaven Can Wait


      • joe sod

        you have put your finger on the reason why there is a shortage of talented programmers. It is hard, requires focus and concentration, you cannot bulshit with it. It maybe hugely rewarding from a personal point of view to solve a difficult problem but this is not really rewarded by the company overall because most people might not understand the intricacies of the problem. All the company cares about is does it work now. When you go down the pub you cannot really talk about it whereas lawyers, accountants teachers have plenty of people to talk to about work because these are mainstream careers and it is possible to bullshit your way through them.They are also handsomely rewarded by society

  16. Europe’s economy is seizing up and the rest of the world is moving on. Are we to be sacrificed on the barbarous relic of yesterday’s monetary union and the whims of the German electorate just because we don’t want to involve ourselves in the painful job of thinking?————

    The developed and the undeveloped world are equally mired in debt. Nobody, no country, can handle higher interest rates.
    The only way to keep interest rates low is to continually expand the money supply. That is we have QE to infinity.

    UNTIL collectively nobody wants any more of the devaluing paper currency. The interest rates rocket higher, inflation reaches the hyper stage, and all but the prudent are flat busted.

    When? Where? Timing is everything as by the time you realize it is happening it will already be too late. Hyperinflationary episodes are fast, devastating and gone leaving rags and tatters behind.

    Resolving the debt problem , personal, corporate and national is essential to economic good health

  17. As savings rise, demand falls. If the Government doesn’t spend in the economy, the slump in demand will cause unemployment to rise even faster.
    Another kick at the prudent. you would think that saving is a sin to read your commentaries the last few months.
    If people had previously saved before buying then we would not be in debt suffocation and interest strangulation of the economy.
    You need to give your head a shake and take your own advice and rethink this opinion.
    Most of the problem of the lack of a customer is the accumulated debt not people saving before buying. Peoples income is eaten up in paying debts accrued. Ask the blog here. Majority I’ll venture will agree and many will themselves be in a debt trap. No amount of government spending will help these people.

  18. The conventional view on the Irish economy is that we must stick with the programme and that we must continue to grind down wages and prices, squeeze demand and raise taxes. This we have been told for the past five years is the only way and if we stick to this approach, the economy will rebound vigorously.
    Has it crossed your mind that the policies proffered are suggested by those who know it will fail and can not work.
    Has it crossed your mind that the boom and bust cycle is deliberately manufactured.
    Has it crossed your mind that there are those whose mission is to despoil the economy.
    Has it crossed your mind that these deliberate actions are designed to drive the population to dependence on salvation from ever bigger government.
    Has it crossed your mind that the ultimate goal is to enslave the populations to the benefit of a select few.

    If not you need to put on a new thinking hat and ponder these things.

    Individual liberty is constantly under attack and never more so than in the current age. A thousand years of progress is in danger of overnight evaporation.

    In the US, habeas corpus, a bastion of individual rights and protection from the state is already discarded. Any one with a finger pointed at and accused of being an enemy of the state has no rights. Just subject to the modern equivalent of the medieval torture chamber. Don’t make a flippant comment to the Homeland Security officials or you may never see the light of day again. I am avoiding travel to the US. You arrive on US soil at your peril. There is no longer the rule of the law, just arbitrary decisions.

  19. This matter is so important and so little understood, it must be made clear to you, even at the risk of some repetition. If you look at the physical reality of the productive system in the Western world today, you cannot fail to realise that we are living in an age of material wealth and plenty.
    · If you turn to the Press, which is paid to express the views of the financial interests, you will be told that only severe economy, lower wages, higher taxation, and other symptoms of severe scarcity can be deduced from the present situation, and that we have to accept them.

    Major Douglas, Newcastle on Tyne 1932

    Worth the reading 3 times.


    Put your head around the concept of Social Credit, David.
    Also the use of money as a tool of the people to engage in the economy rather than money as a control of the economy.

    • cooldude

      Interesting article Tony. It is indeed a pity that David wouldn’t exercise the “painful job of thinking” a bit more on the subject of our system of debt based money and the people who have the exclusive franchise in supplying it. Mervyn King said in 2010 ” of all the systems there are to organize banking the one we have is the WORST.” He couldn’t be more correct. Money should be just another very important good in any sane society which facilitates trade and enhances our lives. What we have is simply a medium of control which is issued solely to benefit the parasitic banking industry and causes endless hardship to everyone else.

      Banking should simply be another industry which should store people’s hard earned money and lend that money out if people allow them to. Instead we have this parasitic monster which is consuming our society with it’s endless greed and it’s ability to create endless booms and busts through it’s fractional reserve system. Until we as a people get rid of this parasite which is eating our economy and our lives there will be no real change and the only thing that we can look forward to is a life of debt slavery. The only useful invention that the banking industry has come up with in forty years is the ATM. EVEYTHING else is just fraud and deception and that includes all this securitized fraudulent packages, interest rate swaps and the massive one QUADRILLION casino that is the derivative nightmare. The holders of these toxic derivatives will actually be in front of deposit holders in the event of a bank failure in the now inevitable bail in.

      These bunch of criminals have hijacked our society and they control it through their system of central banks all of are owned by the private commercial banks and the families behind them. All politicians are under the thumb. Unless we face up to this reality and take steps to get rid of this parasite all talk of recovery or anything else is just a waste of time. This is where the “painful job of thinking” is really required.

  20. HoChi

    Talking to a Nigerian recently he said that c.70% of Nigerians were self employed (good?) but that the big problem was corruption (‘indirect taxes’ ?? ) and poor infrastructure (bad?).
    In my own little business here I am doing ok, a steady income , but if I was to think of starting any other business then I could end up on the rocks for the following reasons peculiar to Ireland –
    1) too many rules /regulations that are not necessary in most cases, but keep loads of former civil servants in cushy jobs playing with their biros every day
    2) lack of incentive / information to try to get people working again, a lot of people are skilled/knowledgeable but there are too many obsticles in their way
    3) lack of customers – we might not have much unemployment compared to Spain, but IF we play with the figures (the opposite way to the way the government spins it ) then we count all the emigrants as ‘unemployed’ ( who’ve had to leave Ireland because there’s no jobs here ) and what sort of figures would we come up with then ????
    4) Taking secondhand car sales here as an example, IF the government levelled the road tax system then people would buy the car they like rather than the lowest tax car and they would end up paying tax as they use the car ( petrol tax ). People would prefer to pay tax when they use the car rather than pay tax on something that’s sitting unused 4 days/week – the Government can’t fathom this and is therefore losing tax it could get by another (smarter) means ??
    There are loads of good cars lying around that could be used IF there was a fairer road tax system – the Government keeps shooting itself in the (tax) foot ?

  21. MollyMoppet

    David, my heart sinks coming across this same old spiel again and again on your page.

    I’m no expert but I suspect you are right. On the other side is the dead weight of certainty that the blockhead idiots who call the shots will never have the imagination to try it.

    The last shower were a pack of crooked ***** but at least they weren’t afraid to take a risk. Not that it took much courage to risk all that we had and nothing of their own.

    The debt to income figure of 125% also the reality you’ve often highlighted. There are many people out there whose finances are in rude health and indeed most do happen to be in the 45+ age bracket. The figure for the minority unfortunate enough to fall outside this group is of course massively higher, and nothing will be done to narrow this chasm of inequality.

    I despair, I really do.

  22. joe hack

    “doth protest too much, methinks”

    “The Elite” as often debased here as an evil distort of a balanced society or as greedy bunch… – that might well be…- but individual geed exists with in the ‘poor’ – the would if I could be “elites”…

    Well it appears quite bluntly above that those who most strongly use this difficult to define word ‘Elite’ in a derogatory way are by their own definition just struggling “elites” … gold diggers who have staked a bad claim – jealous want to be “elites” who want to speculate – relatively ‘poor ‘? – Unsuccessful “elites”…

    “doth protest too much, methinks”

    No more different than “the elites” that so vehemently despise…

    Whatever methinks of David the propose of his writings here is to try to online the issues as he sees them and how those issues relate to the overall Irish economy – a benefit to all not just the gold digging “elites” or even the poor gold digging “elites”…

  23. joe hack

    ‘Tear down this wall’

    Gold as a form trusted money is used when fear is in abundance as in the dark ages…

    The gold hoarders propagate the fear mentality – the gated anti-community – the medieval witch-hunt…

    Tear down your portcullis and castle wall and let’s avoid fear or maybe your rush to a societies self destruction

    • cooldude

      Incorrect facts as usual. Commodity based money has been used almost continually for over 5000 years and on the whole has been quite successful. The problems arose when the money was debased such as when the Romans lowered the silver content of the Denarius from 90% to almost nothing. This caused widescale inflation and led to the money eventually being rejected completely. The first attempts at unbacked paper money were in China from the 12th century onwards and each and every time they tried it it led to the exact same economic problems we are facing today. There have been many more failed attempts including the failed Assignat currency in France after the revolution. Again this led to inflation and misery. An easily expandable money supply ALWAYS leads to these type of problems. The reason behind this is because inflation is actually any increase of the money supply greater than the increase in the economy. The price increases that result are merely a symptom of the inflation.

      So commodity based money has in fact been the most successful type used so far. The real “dark ages” occur when a dictator takes over and confiscates gold and silver and insists on fiat money by force of death. That is what fiat actually means- by government decree backed by force. The first thing Hitler, Mussolini, Mao and even your hero Stalin did on coming to power was to confiscate gold and ban the use of any alternative currencies.

      The wall that needs to be torn down is the franchise the bankers have over what we use as money. Why not simply change the legal tender laws and allow competition and choice in the good that is money. This would give people freedom of choice to use whatever they deem fit as both a medium of exchange and also a store of value. This can include digital money such as bitcoin or whatever else people freely choose to use in exchange for goods and services.

      • Adam Byrne

        Competition, freedom and choice in money – YES.

        Digital currencies, Bitcoin, etc. – YES.

        Obsession with useless gold that you probably don’t even own, can’t carry and is susceptible to being robbed as soon as the sh*t hits the fan – NO.

        • Yes and I can hear your bit coins chinking in your pocket as the governments shut them down.
          Use bit coin if you wish. Free choice of money to use is a free mans’ choice.
          Any thief can rob anything they can get a hold of. William the Conqueror stole the whole country of England lock , stock and barrel. Land included. “The Crown” owns vast swaths around the world, to this day.
          Obsession with the hoarding of “bit coin” is every bit as useless you claim gold to be. This time you are saving only what exists in your imagination. That’s the definition of obsession.

        • By the way. Commodity money can also be spent digitally whereas bit coin can not be carried across the street, in your pocket, to buy a package of fags, or a bottle of wine.

        • cooldude

          Each to their own choice is fine Adam. The main thing is freedom of choice and we both agree with that.

      • joe hack

        By your own admission gold is not a new approach

        You have a myopic view of an economic model that can serve all

        • Not myopic. Expansive. Inclusive for the use of mankind as a proper tool for commerce and life for the people.

          Most of the world are thinking that way. Those that do not are the myopic ones. Cast your eyes around the world and see what is happening in Asia, The Middle East and Russia. Even our own Western central banks.

          The paper money system is what is bankrupting us all. It allows unlimited expansion, the devaluation of money, inflation, that gives the “insider rich” more and the working stiff less.
          Fiat paper money is the root of all the evil.

          Peel the log from your eyes and see again. We need rid of the central banks and the current monetary system. It is feudal and enslaves.

      • joe hack

        “Incorrect facts as usual” I was speaking figuratively as well you should know.

        Explain “as usual” when have ever got the facts right or wrong as I general don’t speak on facts I general speak politically – - does it make feel clever to selected parts history as a argument for conformation bias.

        You have left out a lot including tally sticks the wars over gold and much more…

        • Adam Byrne

          Wars over gold are beside the point joe.

          No need to invoke the red herring fallacy.

          There have been wars over plenty of things, including the irrelevance known as football.


          • joe hack

            “The Football War (Spanish: La guerra del fútbol), also known as the Soccer War or 100 Hour War, was a brief war fought by El Salvador and Honduras in 1969. The cause of the war was economic in nature, namely issues concerning immigration from El Salvador to Honduras.[1] ”

            not about football then…

            “Wars over gold are beside the point joe” Yes to and fro facts don’ make a good point I was just reiterating the opposite on his selective history lesson which could go on and on pro or against, his history does not debate the money issue…

          • Adam Byrne

            Fair enough joe.

        • cooldude

          OK Joe “as usual” may have been incorrect. I am interested in your views on a properly functioning money and banking system which would allow society to flourish.

          • joe hack

            I writing thesis on that it should be finished by year end after that and to get a varied opinion I am going have it edited by diverging interests.

            I then expect to make addendums and corrections the expected final version maybe finished in mid 2014, maybe I should send you an unedited copy so you can pick holes it?

            The input of many makes for a good democracy but then again would economy built by a committee function well?

          • cooldude

            Whats the delay Joe. Surely you have some concrete proposals we can discuss. I have zero problem with input and am looking forward to some good ideas for the benefit of both ourselves and also our fellow man. Don’t be shy.

          • joe hack

            Wir Bank Switzerland – a barter exchange bank built on trust with very low unemployment no paper no gold just people and trust…part of my thesis you can search on line for it

            i conclude dude

    • Gold y for 4000 years. today is the aberration.
      People who save in a prudent fashion propagate nothing but good practice for a properly functioning capitalist society. Something discouraged the last 50 years at least.

      Spend , spend, spend has been the cry and still is. This is the onward rush, as you put it , of societies to self destruction. Unlimited devaluation (QE)of currencies will destroy all who are unprepared.

      You are the one with the medieval mind propagating hate, fear and witch hunts. Some of us face reality with a sense of optimism.

      Yours is the mind is behind the portcullis and the battlements. Do as David suggests and consider your prejudices and think around the ideas with a new approach.

      • Gold has been used as money for 4000 years, silver longer, paper 500 years with disaster every time.

        • joe hack

          By your own admission gold is not a new approach…

          Shit is around longer why don’t you advocate using shit or post a stone tablet to David with your comments your argued logic makes no sense–You have a myopic view of an economic model that can serve all. You have a I aright jack keep your hand of my stash approach.

          You could start communion money commune with it’s own gold money system like it was in the good old days 4000 year ago…

          I can only amuse that you watch to much of the Kaiser report this man admits he buys gold in the hope of been on the right side of a crash he is x factor for the gold hoarders…

          You continually post confirmation biased links in an attempt to convince yourself that you are right on a subject that has little or nothing to do with the topic for discussion by D.McW.


          • Bizarre statements expressed in gobblygook terms that are not able to be discussed as they are unintelligible.
            Your over all ignorance on the subject of money is startling. Gold has worked well enough over thousands of years when left alone as a free man’s money. Silver even longer.
            It is government that is greedy for tax money and debases the currency. Then we have a problem. all of us. Governments are greedy because the people are greedy wanting something for nothing.

            The prudent and hard working are penalized to the benefit of the insiders and wasters. Remember all taxes are collected under coercion and threat of life and liberty.
            My proposition frees all people to be able to exercise their talents in their own interest and the common good.
            The paper money is too easy to debase and enslaves the people in debt.

            You attack freedom and choice and disparage without a basic understanding of what has worked in the past.
            You seem to not wish to acknowledge that our current system is corrupted and controlled by the banking fraternity although a little research will show this to you to be true. The evidence is there in plane sight.

            As for following the script of DMW. He wants all to open their mind and look at the alternatives. Why don’t you get with the script.

            So what is your solution to allow mankind to benefit themselves and others in the process?

            Of course I post essays by others with challenging thoughts. Where are yours. Who agrees with your thought processes.

            Try some colloidal gold as it helps the functioning of the major organs including the brain.


          • joe hack

            “Bizarre statements expressed in gobblygook terms that are not able to be discussed as they are unintelligible.”

            If so then the rest of your rant is made up in your head and you demonstrate it clearly is.

            Nor does your rant relate to anything I have said, your imagination is in overdrive – A RANT

          • Just thinking outside the box you are in Joe.

            Go listen to carl Klang and take a dose of colloidal silver.

            Both will do you good.

          • joe hack

            Is that a logical response or is it ad-hominy

          • michaelcoughlan

            Gold is around longer than shit because it was created during the big bang before any lifespan capable of producing shit came into existence. Moreover since gold on earth is finite and shit is produced constantly why would you want to use shit as currency?

            As it so happens I’m starting a new business in Ireland called Irish Organic substrates which uses worm shit (vermicast) to enrich the growing substrate and I’ll be the first guy in Ireland to produce certified organic substrates.

            I’ll trade you my worm shit 160litres for a 1oz silver philharmonic coin if you like? You can grow your veg AND take the piss out of me for being so stupid to trade a valuable product like organic substrates/ compost for wordless metal like silver and I can assure you it won’t cost me a second thought!

    • Paul Divers

      You all wasting breath talking nonsense.
      It does not matter one bit.
      Get laid, drink beer or do some Python.
      Mix with the kids,
      Have fun today and don’t stop.

  24. Original-Ed

    There are all sorts of emotions running through the minds of the Creditor Nations – the first and strongest is jealousy . They see our public service being paid far more than theirs – twice in some instances and they’re politely telling us to F.O. and get real if you want their help.

    To help get out of this trap, i would suggest capping salaries at 100k or less and subsidise the lower paid in productive sectors with the savings from the cap.

    Have you ever seen a public servant splashing the cash – paying medics, legal and others 200k is absolutely of no benefit to getting this economy rolling again – they just don’t spend it and if they do it’s abroad far away from prying eyes.

    The deficit funds have to find their way into the hands of those who will make a real contribution to growth through their work and spend.

    You can’t expect the Germans to close their eyes and open their wallets

  25. joe hack

    Financially speaking what is needed here is good dose lighting followed a milli second later by a sound-bomb of thunder that would clear the air…

    From what I read above David is advocating we go back to to been a sovereign country.

    The hard part of that is that we will be relatively poor when compared to the pretense of been the so called 15th richest country on the planet while within the euro – this means borrowing money to spend on a flawed debt system.

    This would mean that we spend with in the real value of our own economy this is a hard choice that needs to be taken – political Suicide

    It’s not sticky now after that thunder storm phew I can breath again!

    • StephenKenny

      This is clearly the Plan B, that everyone denies exists, and I agree that it would be political suicide, at the moment.

      The alternative – Plan A – is to do what they’re currently doing – printing money to intervene in stock and property markets, hold down interest rates, and manage currency rates. The stated goal is to stimulate a great bout of inflation, so destroy the value of all the debts, and ‘reset’ the economies. Until then, everything is on hold.

      Plan A blows asset bubbles, so encourages gambling over longer term investment, and destroys savings along with debts; Plan B does the opposite.

      It doesn’t take much thought to figure out which Plan the politicians and financial services sector prefer.

      Quite frankly, I don’t think there’s anything left for us to do other than copy David, and just keep explaining to all those around us.

      • bonbon

        Quite frankly the time of Adam Smith’s Moral Sentiments is well and truly over. That includes “copying” instead of creative intervention.

        Operation Juarez (posted just below) shows just what people think of such silly sentiments.

      • joe hack

        A referendum on the euro in or out?

  26. Paul Divers

    Actually if you talk about the rebel songs it gets to heart of matter. Speak before you think. You can’t be Irish and ignore the songs. They are what we are. Today I would not sing half the songs I used to when I was young. I grew up.

    When I was 5 I wanted to hear ‘Merry Ploughboy’ but disappeared from the house fast but my granny knew the words and use to teach me them in private. My granny and I were two of a kind

    Good thing or bad thing I don’t know. All I know is that Merry Ploughboy is a great song

    • Adam Byrne

      Used to like a lot of traditional Irish music when I was growing up as my folks played it all the time.

      It’s been overdone now though, I have to turn it off anytime I heard it. Time to move on.

      New ‘artists’ like Damien Dempsey etc. are just not up to the quality of the likes of The Dubliners in the 1960s, and others.

      • Paul Divers

        We need a rethink.

        What would the NSA have to say about these songs and people who sing them?

        We could be taken away in the night for singing Sean South. Seriously

        You will be hearing less people singing Irish rebel songs now. They are part of the surveillance generation and will be easily programmed through accepted social behavioural ‘norms’ propagated via soap operas and conventional media viewpoints

        This brings us nicely back to the thrust of the article and makes it hard for idiots and bigots like your mate Colin to express themselves with credibility.

        Without a hook they are impotent. Don’t give the bastards a chance to tie to down and label you. That is what all mind fucking bigots do to dominate the debate.

        Think about that for a minute and consider the company you keep.

        • Colin

          You need to sober up and exit that drunken stupor you have been wallowing in. Sing all the stupid rebel songs you like, no one cares. You are the idiot, look at yourself in the mirror and you will see.

          I’m a bigot alright if I point out that there are rich middle eastern arabs who follow the instructions of a murdering paedeophile who waged war on innocents and stole from others, robbed, raped and plundered and claimed it all to be God’s instructions……. and these followers want to impose their will on us? But you won’t open your eyes to that because your hatred is directed at Christians and Jews, something you share with your rich imperialistic arab friends.

          Your fellow Scotsman Ian Brady was cast in the same mould.

          • Paul Divers

            You don’t know very much. For one thing I am sober and work hard and
            If I did drink then it would not be you who is paying for it. Neither
            do I listen to rebel songs and I did then so what?

            There is no doubt you are a bigot. As well as muslins you even
            appear to be bigoted against barbers.

            You have two days a week off and have plenty of time to visit
            a barber so it should not concern you. If barbers want to watch
            tv in the evenings and wash their cars that is also none of your

            Rather than contribute to the debate you come in here and have a go
            at vaious people. You are well known for it.

      • Ryu Hayabusa

        Good Call on Dempsey.. he’s been riding on the coattails of Ronnie & the Dubliners for yonks!

    • joe hack

      What do you want to rebel about today? when you figure it out put words to a 2013 rebel song and get with the moment I join in at the chorus – hang the bankers or a song about the repo man??

  27. bonbon

    DMcW must have had a chat with the Daily Telegraph’s Ambrose Evans-Pritchard, because this article evoked a certain Deja-Vu!

    Ireland, Portugal, Greece, Spain and Italy should go for a “Debtors Cartel”

    If this idea seems familiar, it may be because it was the major idea offered by Lyndon LaRouche in coordination with Mexico and other Latin American nations burdened by IMF debt in 1984, when it was often called the “debt bomb”.

    Read about the 1984 Debtors Cartel for Latin America here : Operation Juarez

  28. bonbon

    Washington Post Op.Ed on Glass-Steagall

    “Big Banks Dangerous Monopoly on Life”

    For example JPMC’s and others hoarding and manipulation of energy, metal prices, an “investors” cartel!

    See the Operation Juarez report above and the banker’s tricks : Mexico and Brazil were promised special “stretch-outs” and lowered interest rates as “rewards” for their agreement to implement the IMF’s demands as long as they stayed out of any joint debtors’ initiative. They played off against Brazil and Mexico.

    How long before Enda and his bosses offer stretch-outs? Will London start playing off European debtors against each other? Or is this already the game?

  29. 5Fingers

    I would like to see the currency change angle explored more. The idea is fine when you get there. What concerns me is the transition. If we recall the move to the Euro, we had an ECU which came into being in the early 80s and it limited the swing in currencies until it tightened up towards the mid 90s. Perhaps the reverse of that is what is needed now and depending on the country, the currency swing limits would be set to ease into better debt management and not so drastic haircuts and debtors and creditors become resolved.

    • 5Fingers

      I propose a new system called the PIGS (Peripheral InteGration System) :)

    • bonbon

      Why not simply say Glass-Seagall was still in place even if under attack.

      You have really not realized what has happened have you?

      • 5Fingers

        GS is but one input to a very large and rapidly evolving system. There are a lot of other inputs as well and level of understanding about the many outputs and how they can be used to moderate inputs is woefully poor.

        Then again…maybe there are a few geniuses among ye there who can prove that there exists a reliable compensator or stabiliser in the use of GS which could stabilise same. Be my guest…http://reference.wolfram.com/applications/pcs/FunctionIndex/PoleAssignmentAndStateReconstruction/Dyadic.html

        • bonbon

          The monetarist trap has taken you hook line and sinker has’nt it.

          Glass-Steagall is not an input to “the system”, but the end of that system. Take a look at this, A typpical Collapse Function

          The intervention needed is then not a “compensator”, but a radical 3-fold sudden change. I’m afraid Wolfram has very little to say about reality.

          • 5Fingers

            Proof you do not understand anything you are talking about. GS is a control or an input. The outcome is what is measured.

          • bonbon

            You have not the slightest idea – look up Riemann’S Habilitation, the question of “power”. This is not an engineering question, economics is not either.

            The productive power of labor is not what monetarists and mathematicians, never mind programmers think.

            So forget the “control theory”, “systems analysis” and statistical frauds. They gave us the current disaster.

  30. Paul Divers

    We stare into a German Iron curtain of ideology and are expected to feel shame. Tied up in knots and impotent for decades.

    We need to tell them how the game will be played. It’s our way or go fuck yourself. I am up for it. We’ve done it before and we can do it again

    I would rather take the chance than sit still in purgatory. I can understand why men in Guantanamo are prepared to die than live not knowing their fate. Such fundamental decision about life puts everything in sharp perspective doesn’t it?

    It makes you wonder what you have to moan about
    Fuck it. Come out you Black and Tans!

    • Paul Divers

      The Celtic spirit can’t be dominated. Ever.

      This is your strength but you were made to feel ashamed of it.

      You don’t lift European Cups without steel and a determination not to be bullied by sun bronzed European sophisticated posers.

      We showed them we could swagger and be pushed around my no-one.

      And in the centre of the nine flags on the jungle roof flew the green, white and gold.

  31. bonbon

    Former New York State Attorney General Eliot Spitzer is running for Comptroller of New York City on the theme that bankers will flee Wall Street, if he wins his race.. In a 30-second campaign ad titled “Empty,” the only sound accompanying shots of an emptied-out Wall Street is a cheerful American Revolutionary War-style fife and drum corps. The camera finally rests on fluttering copy of an abandoned New York Times with a headline, “Spitzer Rejoins Politics,” to conclude with a five-word clincher. Watch the commercial to enjoy the ending here:

    Hey banksters, listen to the spurs! And the Revolutionary War fife and drum corps!

  32. Paul Divers

    It would be awesome if there was a virtual padded room where people could retire to argue about gold and paper money.

    This is the the mindset the article addresses but it has gone straight over so many heads. Everyone has to be right. It’s boys stuff and pathetic

    Opinions are ten a penny

    • Paul Divers

      Just like Onions

      • cooldude

        Its not so much about the medium of exchange Paul its more about that people have choice on what type of money is foisted on them. To me its more of a personal freedom thing and once we are required to use the banksters money all freedom will cease.

        • Adam Byrne

          I’m fully with you there cooldude. I have many years experience with digital currencies and the possibilities are increasing.

          The way some people (not necessarily on here) go on about gold and the price and gold etc. etc. etc. is just ridiculous though and self-defeating.

          • 5Fingers

            I think we need a reverse shock absorber like an ECU. I think politically there is a need for a digital fudge that gives a back door. The original ECU was a virtual currency device that facilitated some mechanism of readjusted inter country exchange rates while the laws were negotiated. A digital version of this regulated by the piggies might provide a way. A piggy PayPal perhaps with an ESM backstop.

        • 5Fingers

          First thing you have said in a while I 100% agree with. The whole thrust of this article and many others of DMW’s articles is about “choice”.

          The only savings worth having are health, friends(trust and love) & skills. I have an attitude that if I need money, I just go out and get some – the emphasis is on “some”. A bit here and a bit there. Yes we have debts…here’s one…food…you have to keep buying the stuff. It surpasses the repayments on most debts.

          I am not trying to water down the seriousness of this crisis

          • 5Fingers

            The biggest debt out there is the lack of goodwill and trust. The fallout of that is scapegoating, confirmation bias and anxiety which reinforces the negative attitudes and neediness. Disasterama is what sells.

      • joe hack

        “Just like Onions” I do like onions

  33. 5Fingers

    The first comments of this blog by Mr Furry Ears hisself sets the scene. We have a stand-off between interdependent groups. While the social contract which bonds these groups is in danger, a sudden change will likely cause more bother.

    One way or another, we will have a similar social hierarchy. The question for me is does it allow a sufficient flexibility and transparency to allow a unified buy-in. For me the answer is no. But rather than belittle as Galbraith tended to do (given his tendency to be a bit overbearing and arrogant) maybe this is a time to understand the conundrums faced by different groups and focus on making wiggle room. All due respect to this article by the way.

    As the saying goes…how do you eat an elephant…with a spoon.

    • bonbon

      Very endearing, “focus on wiggleroom”. Have you not noticed it has gone far beyond that?

      As to wiggling, watch Wall Street/London try to escape what’s coming down the line – we are going to take away their toys, “instruments”. Watch the wiggling turn to frenzy!

      Just say Glass-Steagall and watch!

  34. Adam Byrne

    There’s a lady called Jackie speaking on The Business with George Lee right now about alternative currencies.

    She has a book out called Rethinking Money.

    Worth a relisten?

  35. Gold is an illusion .What you see is captured light fractured inside a useless metal .The sun plays the tricks and when it winks the shine is gone.

    • joe hack

      jOHN allen, You are a passive aggressive evil man but you also right…

      • Truth detoxifies the soul . How you experience it is how you serve it . Just like Gold that is an illusion too .

        • Truth s , it is not the glitter of gold that has relevance but the function it performs as a medium of exchange and a store of wealth.

          Chosen by more people world wide than any substance other than silver it is immutable, easily divisible, fungible, easily portable and acceptable.

          Not my opinion, just the facts mam just the facts.

        • Dorothy Jones

          Agreed John. Gold is an illusion.

          • StephenKenny

            But only in the same way as life itself is an illusion.

            This whole question of the place of currencies in a global economy is interesting.

            Gold’s place as a currency has been the same in every civilisation, in every age: That of a bulwark against corrupt rulers.

            In any age, as soon as politicians realise that they can create their own money, they eventually give in, and start to do it – no doubt with the best of intentions.
            Look a little closer into every great civilisation, and you see a whole raft of collapsed currencies, all debased by corrupt emperors, pharaohs, kings, warlords, etc.

            Gold and silver obviously don’t have any special features, except for a set of physical characteristics that make them uniquely suitable to play the role that we want from currencies.

            Of course those who make a living from debasing our currency, or who benefit from it, are obviously not keen on the populous having access to high quality currencies.

            There are obviously alternatives to gold and silver, at the moment high quality farmland is one – having risen in price about 400% in 3 years, in the mid west of the USA.

            The UK government is currently printing about £120bn per year – their currency has been hopelessly debased over the past 15 years, unless they would suggest that their economic output has been rising at about 8% per year over the period.

            All this is no more sustainable than the property prices of 2000 to 2008.

            Gold and silver, as well as farmland, are merely “currencies” that are not debased by governments.

            If you trust your politicians to be reasonably sensible with the finances of your country, then you having nothing to worry about.

          • joe hack

            “Gold and silver, as well as farmland, are merely “currencies” that are not debased by governments.” oh no they not

          • joe hack

            “Gold and silver, as well as farmland, are merely “currencies” that are not debased by governments.” oh yes they are

          • StephenKenny

            Oh yes they are.

          • StephenKenny


          • There is a “solid” argument that fiat paper money and digital money are illusions. Created out of nothing they return to their intrinsic value = to nothing.

            Commodity money must be hewn from the soil or rock and so acquires intrinsic value. Because of the chemical substance and formation gold and silver have the best properties as voted by billions of people to be the best money there is.

            There is a difference between currency and money. Much of what we call money is in fact currency, a representative of money. Originally the paper currency was a promise to pay money.

            E.G I promise to pay the bearer on demand the sum of (name your money here) 5 pounds sterling. As such the money per se backed the IOU note we call currency, which is now called money.

            When the countries that issue these notes refuse to deliver the money in exchange for the iou then a contract is broken.

            Nations did this one after another until only the US dollar note was convertible to bullion but even only between nations and not for the ordinary folk. That was Bretton Woods Agreement in 1944.
            In 1971 Nixon broke this promise to pay and since then there is no currency that can be converted to bullion.

            Most notes now do not bother with anything except a number on the paper But the Pound says it promises to pay the bearer one pound. Of what it does not say.

            However the note is as always an IOU. It is issued as a loan in exchange for collateral and so as the money supply increases we are further indebted. The only money not issued as a debt is that commodity money still issued. Sadly of little value as a base metal coin. Thus it is correct to say that the currency is debased to near worthlessness.

            Recently it was realized that the copper content of a penny was in fact valued more than a penny as denominated as so is going out of circulation. The government is ceasing to make a penny coin.

            So metal retains a value regardless of what is stamped on it while the paper does not.

            Gold and silver likewise retain a value regardless of any stamped or government pricing. As Stephen says they protect people from the inflation induced into the currency by the production of too much. The inherent value or intrinsic value is maintained despite any actions by government or central banks to tell us otherwise.

            No gold and silver are not an illusion but a protection from the illusion of other currencies of all kinds.

          • joe hack

            To Mr. Stephen Kenny

            “Gold and silver, as well as farmland, are merely “currencies” that are not debased by governments.”

            Tony Brogan disagrees; Nixon / Breton woods.

            And if that is not enough to prove your statement a little a skew even though the sentiment has merit have look at the follow – Executive Order 6102 -To extradite, I used Wikipedia here – however I believe it to be more or less factually for the purposes of this discussion…

            “Executive Order 6102 is an Executive Order signed on April 5, 1933, by U.S. President Franklin D. Roosevelt “forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates within the continental United States”. The order criminalized the possession of monetary gold by any individual, partnership, association, or corporation.” http://en.wikipedia.org/wiki/Executive_Order_6102

            Interestingly the fines were in dollars 10,000.0 of them and not gold.

            “The order was rationalized on the grounds that hard times had caused “hoarding” of gold, stalling economic growth and making the depression worse.[1] The New York Times, on April 6, 1933 p. 16, wrote under the headline “Hoarding of Gold” “http://en.wikipedia.org/wiki/Executive_Order_6102

            And also check out the following or similar headings: ‘Irish Land Acts’ ‘land grabs’ or ‘land reclamation acts’ and not just in Ireland all but over the world form past to the present day…

          • joe hack

            To Mr.Tony Brogan,

            Gold may not be an illusion but it certainly delusional…

  36. bonbon

    James Galbraith Asks: Why Fund Economics Departments That Are Incompetent?

    In an interview with the Argentine daily Pagina 12, American economist James Galbraith pointed out that the economists and professors at the Economics departments of most universities have spent the last 20 years insisting that the type of global crisis occurring today, “couldn’t happen.” They aren’t connected to the real world, he emphasized, and “no one is going to pay attention to the theories that brought us to this point. They’re finished!”

    Galbraith added that Economics departments have become “sealed-off redoubts in which neoliberal economists only talk to each other, but their influence is sinking. These people once thought they would be remembered as great thinkers,” but that won’t happen, he underscored.

    It’s time for university officials to start asking questions, Galbraith told Pagina 12. “For example, why fund an Economics department whose theories can’t conceive of the possibility of a global crisis? What social function does an institution of this kind perform, if all they teach bears no relationship to the problems we face?” Galbraith recommends that these departments be reformed “so that people who know something about these issues, who’ve been excluded for a long time around the world,” can participate.

    • joe hack

      bonbon university are not bastions of free unscripted thinking a point that Einstein made in relation to is inability to learn the formulated education prescribed but he did work in a university, but bonbon what do you think of your above post?

    • joe hack

      John Kenneth Galbraith /James Kenneth Galbraith = JK Galbraith both went to university and both worked in university’s?

  37. joe hack

    Wir Bank Switzerland – a barter exchange bank based on Silvio Gesell Monetary Theory there is little unemployment in Switzerland as a result and this is not due to the Swiss frank based baking system…

    Silvio Gesell:’a Strange, Unduly Neglected Prphet’? A Reappraisal of a Forgotten Pioneer of


  38. Doggone

    We, as a nation are dab hands at self-delusion. Much of the evidence is seen at a personal level. For example, two thirds of the Catholics who actually to go to mass think that the main ‘body and blood’ scene is as much drama but they still think of themselves as ‘good’ Catholics and that Ireland is a Catholic country (When I hear that silly phrase I always enjoy an image in my mind, of the mountains and bogs standing at the back af the church, trying to be quiet). Then there is the more dreamy stuff revealed in the evidence, that many more of us speak Irish on census night than at any other time. This sort of nonsense is bad enough but the structural make-believe such as the gushing over-generalisations about the ‘skilled’ workforce and how motivated we are or that we have one of the best education systems in the world. The list goes on. Mix this all up in the sticky goo that is the pan grease of our endlessly refried collective memory and the hard work of thinking in a straight line gets harder. Throw in god and Dev. and everyone is on their feet for one reason or another but they have nothing to say when they get there.

  39. Original-Ed

    Acording to Gurdgiev in today’s Sunday Times the real unemployment figure is approaching 30% when all the forced training schemes are taken into to account. Then there’s the good old safety valve of emigration keeping the figures from really exploding.

    As for the myth of a skilled workforce – it should be a workforce with the potential to become skilled. Four/Six years in College doesn’t produce a skilled worker – skill is something that’s acquired through study and practice, not through study alone.

  40. joe hack

    Do we need an in out referendum on euro?

    With reference the David McWilliams article: (as as should be the case?) Since it would be political suicide for a government to suggest leaving the euro due to the initial hard ship that would follow and its political and social consequences “Ireland living beyond its means” ‘Ireland living within in means’ ouch!

    It appears obvious that the only way to overcome Irelands lack of leader ship is to allow the people to lead but again there seems to be lack of enthusiasm for a ‘Plan B’ from the public.
    We may believe it is important to stick by our neighbours who we have signed up with but are their pockets are not as neighbourly as their sentiment appears to be nor is it likely that our hardship is what’s prevents from having a goodnight sleep which is likely no more than the individual that might skip past those sleeping on the streets of Irelands feels before nodding off to a good night’s sleep in a warm cosy bed.

    At no time in the history of the world has the hardship of people’s distress been ever considered a paramount importance by those not suffering a hardship. In all but the few cases it was those or small groups of those suffering that stood up to the powers that be and said stop. Sometimes violent sometimes peaceful but in most cases less peoples suffered in the long term and in most cases the methods for change improve the wellbeing of all.

    We need to go with “Plan B” and initially it easy to implement and it can be implemented without even the need for a stone to be tossed we simply need out of the euro and that only requires a referendum. Some have said that even the threat of one might shake up the EU but it is doubtful they care that much no more that we care about others, we may sympathise but no more that that.

    Certainly wishfully hoping will not work as we get deeper and deeper into debt…

    125% of GDP and rising is unsustainable…

    • StephenKenny

      Is it really feasible, politically?

    • And what money would you replace for the Euro?
      Would you change the monetary system and close the central bank?
      Would you issue the money from treasury?
      Would you repeal the legal tender laws?
      Which debt would be revoked and which paid?
      Would people have a choice of which currency they can use?
      Or would it be a fiat paper currency the same as we have?

      What is your definition of money Joe?
      What constitutes good money?
      What constitutes bad money?

      No good just saying get rid of the euro.
      How would you stop everyone getting deeper into debt?
      How would you reduce or eliminate the national debt?

      What is your plan of replacement for the Euro?

      Never mind if you think it could or could not be done or whether it be politically feasible.
      What would King Joe like to see?

  41. Ryu Hayabusa

    And all this fresh sabre rattling about sticking to the austerity path.. oh no we can’t deviate from that now, down with that sort of thing.. ever downward on that debt deflationary spiral. . .. … WHEEEEEEE-EEEEEE…. Time to instill the fear of God into Paddy again lest he be inclined to engage in that oh so dangerous of practices.. to think for oneself! Uppity little spud munchers!!
    It’s an easy message to sell to pre-programmed automatons like Kenny& the gang.

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