August 5, 2013

Don't listen to the troika, just look at the statistics

Posted in Behavioural Economics · 95 comments ·

As well as setbacks on the field of battle, one of the main reasons behind Sweden’s retreat from being a great military power in the 17th and 18th centuries was because it was the first country to have a census.

The first Swedish census was held in 1749 and showed the country had a population of 1,764,724. The military high command was shocked, not by how many Swedes there were, but how few.

Back in those days, before real statistics, population sizes were largely guesswork. The Swedes, who in the previous 50 years had gone to war with Russia, Poland, Estonia and Denmark, were regarded as a great military power along the lines of France or Britain.

They fully expected to have a huge population commensurate with their political clout.

When they realised that their population was a modest 1.76 million, the first thing they did after the initial shock subsided was to keep it secret. They knew that the likes of Russia and France had huge populations, but those countries had no idea theirs was so small. They knew straight away that they hadn’t enough people to fight prolonged wars, so better to make peace now before their enemies found out how few Swedes there actually were.

This began the great period of Swedish peace and neutrality which has lasted right up until today.
The Swedes were the first country to embark on what could be called evidence-based policy rather than operating on the feeling or instinct of experts.

Statistics may sometimes be regarded as boring and humdrum, but in fact are a sign of enormous sophistication.

Sophisticated societies measure things accurately, and normally when you base your policies on measured evidence, outcomes are likely to be better.

With this in mind, let’s look at an important piece of statistical evidence presented last week by our own Central Statistics Office on the mindset of the average consumer. Every three months the CSO surveys 18,000 households. The statisticians collate the results and they give us a good snapshot of the types of financial conversations that are being conducted around kitchen tables all over the country.

The latest CSO survey data paints a grim picture of a stalled domestic economy.

Eight out of ten households in Ireland have cut back expenditure in the past year. Some 65 per cent of people are going out less often, two-thirds have cut back on clothes and shoes, and just over one in every two households is spending less this year on groceries than they were last year.

Of course, never far away is the massive mortgage timebomb which is primed to go off all around the country. An estimated 15 per cent of owner-occupied households with a mortgage were unable to make mortgage repayments on time at least once in the previous 12 months due to financial difficulties.

Interestingly, the fact that 19 per cent of all renting households failed to pay rent on time at least once suggests that, despite significant falls since 2006, rents are still too high. This could reflect unrealistic expectations from buy-to-let investors who may be keeping rents high simply to stave off missing their own mortgage payments. If this is the case, it reveals how the debt mountain jaundices all prices in Ireland, even those that might not be directly related.

Two fifths of individuals were concerned about their level of personal debt. Over half of these said that they were currently more concerned than they had been 12 months previously. Only one home in 20 indicated that their level of concern had decreased.

The survey also gives an insight into just how precarious the position of the average person is at the end of the month and the fragility of people’s financial balances.

For example, out of households which had experienced difficulty in managing bills and debts, 47 per cent stated that this financial insecurity was due to falling income, largely due to someone in the home losing their job, their hours being cut or taxes reducing take-home pay.

However, a higher proportion – almost three quarters of all those in difficulty – cited a higher than expected bill or something out of the blue that they hadn’t seen coming.

When you drill a bit deeper into the survey, you see that 90 per cent of those in difficulty mention that a higher utility bill was enough to tip them over. One in three mention a higher school bill or university cost. Here we can see the middle class suffering. These are households that on the outside might appear to be doing fine, but inside they are one small financial shock away from economic chaos.
Now we are into the marrow, because almost a quarter of all adults reported that they had spent some or all of their savings on basic goods and services during the 12 months prior to the survey period. For thousands, the rainy day has arrived.

But things are not the same across the board because, while 30 per cent had reduced the amount being added to their savings, 11 per cent either increased the amount being added to savings, or had kept their stock of savings at the same level, or had actually started to save.

But you know what happens when people start to save and banks aren’t lending? Demand dries up if too many are saving because too few are spending, and without spending there can only be falling income. And, of course, when income is falling, debts as a percentage of this falling income go up. This means we all have to run to stand still. But we can only run for so long.

This survey – the quarterly national household survey – is the type of evidence that our politicians should be looking at rather than listening to the debt service agency that is the troika.

Like the Swedish census of 1749, surveys like this show what is actually happening in the country. This is the power of evidence. The Swedes had a choice; they could have ignored the evidence and listened to the king’s council of experts at the royal court which claimed that Sweden was still a great military power with imperial ambitions. Instead the Swedes listened to the statisticians and considered the actual evidence.

Today in Ireland, the equivalent of the Swedish royal court are the civil servants who obsess about what their counterparts in Brussels or in Frankfurt are thinking. Their concerns are buttressed by the small number of people who are making money out of turning Ireland into a large debt service agency. They high-five each other with a form of manufactured consent, suggesting things are going well, considering.

All the while, the actual statistical evidence screams the opposite.

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  1. hibernian56

    Morning all

    • Paul Divers

      Why not Hibernian1953?

      • Paul Divers

        Sorry I meant Hibernian_1952

        I forgot for a second. In 53 Hibernian were the pride of Great Britain and their famous five forward line caused fear and destruction thought England, Europe and Brazil

        They had only one weakness and that was their defence. They came a cropper at Hampden in front of 117,000 in the Coronation Cup Final and never recovered from an early counter attacking Stein inspired side with attacking genius

        All through the second half they battled for their crown but it was all in vain for the celtic supporters were shouting that day

        Too ra loo. Too ra lay

        Some you win and some you lose

        Here’s to wee George

  2. hibernian56

    Hi Adam, subscribe.

    Now to read

  3. [...] one in every two households is spending less this year on groceries than they were last year. Don’t listen to the troika, just look at the statistics | David McWilliams Sign in or Register Now to [...]

  4. Wilson

    I find this quote interesting:

    “But things are not the same across the board because, while 30 per cent had reduced the amount being added to their savings, 11 per cent either increased the amount being added to savings, or had kept their stock of savings at the same level, or had actually started to save.”

    Two questions:

    1) here, you account for 41% of those surveyed (30% and 11%)….what about the other 59%?

    2)Within that 11%, what % of them are civil servants or former/retired civil servants? That would be very interesting to know.

  5. hibernian56

    Civil Servants, mostly policed and managed by the “old school” bluffer, the department secretaries with nothing more than a brown tongue and an honours degree in Irish.

    My dealings with “Enterprise” Ireland are revealing a lot about their business acumen.

    The offer: €150,000 matched funding.
    The conditions: 10 full time employees by Year 3. Matched funding secured before they invest 50% of the funding, the remaining 50% paid in “traunch’s”. Minimum 10% equity. Vague exit strategy.

    Another startling fact is that they are VERY reluctant to put anything in writing, and that ultimately the funding must be approved by the EI “Board”.

    So lets punch the numbers…

    10 jobs: The reality is that there would be perhaps 1 admin job at minimum wage, while the remainder would be semi-skilled, sales and management. In simple figures, that means in Year 3 alone they would require a wages bill of €340k, including holiday pay. Premises costs in excess of €100k, equipment, rates, insurance, health & safety and utilities.

    Of course, you don’t just go out on a Monday morning and hire 10 people, you have to have training and a probation period, so in reality you would end up hiring the bones of that staff level in Year 2, with some in Year 1.

    So suddenly that “Enterprise” Ireland “Investment” of €150,000 has cost a fledgling company in excess of €500,000 over 3 years.

    Nobody from Enterprise Ireland asked the simple question, “Do you need 10 jobs?”.

    Lets remind ourselves that in simple terms approx. 20% of ALL expenditure goes into the Civil Service feeding trough.

    Am I the only one who see through the smoke? When I raised this with my partner and founders first they were incredulous, but then I produced a spreadsheet. Spreadsheets don’t bluff.

    We are deciding on whether to play the game with EI, but more than likely I will sell that 10% to REAL investors, once I have the offer from EI in writing. I might only get half of what I am looking for, but at least I know I won’t cripple the business in the process.

    They have a motive and it’s not to get Ireland back to work.

  6. Wilson

    about EI – isn’t that just the usual incompetence/cluelessness often found in government? Or is it really something more sinister?

    • hibernian56

      It’s very interesting dealing with them. They are so cock sure of themselves, know every cliche going and often attempt to bamboozle you with technical sounding waffle.

      They will ask you to produce umpteen “projections”. Try to get you to change your business model, basically they interfere and try to meet for the sake of an expenses form. It’s all about egos. It’s all about status. It’s nothing about enterprise.

      If €150,000 costs me €500,000 I’m not interested. They can f-off with their photo op. It’s “investment” like this that stifles growth.

      I’m called a “Cash Flow Merchant” by my partners. While interested in 5 Year projects, I’m more interested by whats in the bank today, tomorrow, next week, next month, six months from now and a year from now in decreasing levels of interest.

      I “PLAN” a structured growth, with realistic goals. I won’t do a plan to simply look good. If it can be done, fine. If it can’t, tough. It’s the same principles I used in 15+ years of project management. I rarely missed a deadline.

      “Cash is King”. FULLSTOP. Every decision has a cost, you need to identify it as early as possible and avoid it if necessary. Decide and act quickly. Bad decisions cost money, but indecision costs more.

      EI smack of “old boys” club decision by committee. They drive me NUTS. There is a 10 day pause between any decision, they always want to consult with somebody. They are in effect eunuch’s, as they have no balls.

      You will note that they only “offer” funding until you convince a real investor that you have a business worth investing in. I see their role as pointless, a pure stocking filler for Civil Servants.

  7. Irish PI

    Well now we are in the beginning of the end phase of things.Once a individual,corporation or Govt starts ignoring unwelcome statistics or information that doesnt fit the agenda things start going very quickly downhill.One of the main reasons the Soviet empire fell apart,back when Andropov came into power,the party knew the game was up and they were broke.It simply became a get yours comrades before the ship sinks,but keep the politariat dumb on these matters.
    Wonder how many Irish civil servants and govt figure heads are trousering everything and anything at the moment as they know this whole EUSSR project is heading down the drain.
    Wonder will we the people finally get off our arses and finally protest Greek or any other peed off European country style this Winter??Another crippling budget,and hopefully another extreme Winter with home heating oil being hiked in price along with gas and ESB should maybe get us focused to start demanding change?Not that it would matter to those in the Dail in the most unefficent BER Govt building in Europe

  8. Paul Divers

    These statistics are damning and yet from next month the the banks are intending to go on the rampage with reposessions and all the evidence says their mantra about strategic default is a sham

    The Government are planning another austerity budget and the only thing that is predictable is that things in this country are going to get much worse

    It’s worth remembering that the banks bankrupted the country through greed and stupidity and now we own them. They are state owned yet determined to suck the lifeblood from this country aided and abetted by a government without a backbone

    Roll Over Lay Down (and let me in)

      • hibernian56

        Thats a poll of 130 companies, members of “Ireland France Chamber of Commerce” who are affiliated to an organisation relating to direct trade with France, i.e. export driven.

        So, were the questions relating to Ireland / French trade, or domestic trade? It would appear that these companies would possibly not be reliant on the domestic economy, so what relevance to us?

        This would be more of the smoke and mirrors.

    • Stiofan

      Hi Paul. Is it not more accurate to say that Minister of Finance Brian bankrupted the country? He gave away the exchequer, and ultimately the future wealth of the country to ‘save’ the banks. Yes, the banks are scrum from Anglo on down, but they could not rob the state. Brian did it of his own free will. Poor, departed fool. Is it also accurate to say that the banks own the state, and not the reverse? When the mortgage nightmare really takes hold they will make another withdrawal from the tax base. The citizens are now farm animals, to be milked daily. Clever banks. Always a step ahead.

    • Paul Divers

      Good points. Smoke and mirrors for sure

      After reading David’s piece I headed to the Indo site and scanned the headlines. Two stories stand out:

      There is a piece on housing waiting lists which reveals there are 111,000 on the list. At the same time a house previously valued at 7m went for a song.

      Banks’ arrears clampdown to swell house waiting lists

      The piece about the mini mansion reads like a property porn centre spread aka 2006.

      House valued at €7m goes for €1.1m

      • hibernian56

        The most revealing part of the article…

        “This exclusive road is home to people like…. Ombudsman Emily O’Reilly.”

        Not bad for an ex journalist and magazine editor. But mind you, she did work for RTE at one stage, that probably filled the coffers. The ombudsman position is a strange position for a political journalist to hold don’t you think. What does that pay a year?

        What a potato republic.

    • paddythepig

      I have yet to see a single austerity budget.

      • Paul Divers

        What would you suggest?

        • paddythepig

          Slash all waste.

          Any suggestions yourself?

          • Paul Divers


          • 5Fingers

            Waste is GDP. Do not knock it. Accidents, storms and lightning strikes( in human and thunderous form) all contribute to a burgeoning economy.

            Now if you said…wasters. That puts a whole new complexion on it.

          • Paul Divers

            Have you been drinking 5f?

          • The reconstruction of damage may add to activity and add jobs but does not ad to overall wealth.

            If that were the case we could have full employment by burning down every house and rebuilding the cities again.

            GDP is a number presented in currency value. In an inflationary environment like today an expanding GDP will not suggest a contracting economy, only show the expanding money supply. In digital and paper money this always happens but very seldom with commodity money. commodity money is not readily expanded and so in not inflationary but stable. just what an economy needs.

      • Wilson

        Thanks for that. And here I was thinking I had somehow missed it.

  9. strathspey

    Watch ‘Surviving Progress’. This film features the opinions of people we all respect: Chimpanzee researcher Jane Goodall, astrophysicist Stephen Hawking, and J. Craig Venter, the scientist and researcher who made history by sequencing the human genome and producing a living cell with a computer-generated genome. This 80-minute film, which I found on Netflix, melds together the environmental crises, the 2008 financial crash, poverty in developing countries, and the decline and fall of ancient Rome and Babylonia. The ancient empires examples are appropriate because they collapsed due to problems that afflict societies today: over-concentration of wealth at the top, and reckless and wasteful consumption of natural resources.

    • That’s a great film. Useful transcript available which is a motherlode of great quotes:

      Simon Johnson:

      “The bankers can’t stop themselves, it’s in their DNA, in the DNA of their organizations, to take massive risks, to pay themselves ridiculous salaries, and, and to collapse. And the more that reasonable, responsible people in the center, and the Left and the Right, see this, the closer we’ll get to finally constraining the power of, of these out of control financi
      al oligarchies.”

      So, don’t be too hard on David Frumm and his pals, it’s just their genes! The nature of money creation by private banks, the legal fiction of corporations and the exponential dynamics of debt could all be usefully reigned in. Won’t happen till there’s a proper collapse once the ponzi of shale oil/gas rapid well depletions works through and Peak Cheap Oil asserts it’s grim logic. Around 2014, I reckon.

      Michael Hudson:

      “Every society in history, for the last 4,000 years has found that the debts grow more rapidly than people can pay. The problem is a small oligarchy of 10% of the population at the top to whom all of these net debts are owed to. You want to annul the debts to the top 10%. That’s what they’re not going to do. The oligarchy is running things. They would rather annul the bottom 90% right to live than to annul the money that’s due to them. They would rather strip the planet and shrink the population and be paid rather than give up their claims. That’s the political fight of the XXIst Century.”

      The Troika are no different to the priests of the Maya: voodoo economics. Still, nice to see that the whole clown-project of the Euro has had a brief reprieve until Herman wakes up and storms out of the project:

      “Over recent years, a large part of the benefit of German export success has accrued to companies. Not much of it has found its way into the pay of German workers.”

      The domestic Irish economy is now being squeezed to meet Germanic mores. When the crackpots of the Troika decide there’s a ‘recovery’ interest rates will rise and then it will all kick off again….until then, relax, “enjoy yourself, it’s later than you think”. Regards to all.

      • Paul Divers

        “They would rather annul the bottom 90% the right to live than to annul the money that’s due to them.”

        and a fair proportion of the 90% would agree that this is only fit and proper

      • 5Fingers

        There is an implicit assumption here of global uniformity of thinking among elites. I think things are a little more multi-polar than that. So in the meantime, there is strength in numbers.

    • Adelaide

      Thanks strathspey.

      Most memorable quote from the film. “We are up against human nature.”

  10. Grey Fox

    Very Good article David, now we’re talking!

    • Good article.

      Social credit. An article was posted on the same subject just a short while ago which outlined the policy of the creation of debt free money.

      I note that Ford indicated the purchasing power of cash saved before buying, another point previously made. He did not suggest everyone borrow to buy. This boom was created by productivity good wages and little credit used. It endured.

      Ford is also credited with the following quote.

      “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

      That is the current monetary system that few on this blog could care less about. Authors of your own misfortune.

    • Paul Divers

      You are unusually quiet today Brogie.

      Keep the faith and keep talking. Just so long as you can change the record. If you try to desist from talking about gold for hmm let’s say one week?

      Can you do that for your friends?

      • nice set of teeth. Keep yawning :-)
        No escape–quite right.

        • Sorry Paul,
          the above was meant for 5fingers below.

          You might take note as I pointed out in the last theme. Others started the G debate and there were a dozen entries before I made mention.

          Then I commented on many other things without the golly G word.

          It is not an obsession but in my opinion and that of many others, the current monetary system is the root cause of all our economic problems. Others waste their time talking about all those things that the controllers of the currency want you to be distracted with. There is an abysmal lack of knowledge about the fundamental properties of money.
          The graft, greed and corruption today is as bad as anytime in recorded history. There is only one result in all this and all you need to do is read the history books to find out what that is.

          On a time scale it takes forever to resolve itself but on a historical basis 50 or 100 years is the blink of an eye.

    • 5Fingers

      Yawn…Mr Price is another boiler room for the metallists. Oh dear the world elite are going to control the world. Have a bit set aside when the pooh hits fan…as if that will make a difference.

      Wakey wakey…they always did control the world. That is how society works. The thing is they really do not get along. Egos etc.

      Anyway, you are all on the info grid. There is no escape. Da digital spider has got ya!

      • Actually Hugo SP is a very successful businessman who made his money undercutting the Japanese by making radios and TV’s and selling them way cheaper than the Japanese or anyone else.

        It was incidental to his business that he formed a bank and put a branch in every store that enabled people to finance the purchase on the spot. No loans longer than a 6 month term generally.

        It was only latterly that he learned of the general corruption in the international banking sector and is trying to warm people about what is happening.

        Your complaisance and dissing of character without previous research is unusual for you. Others may be more prudent notwithstanding we all have a life to live while this swirls around us. There is no material benefit to HSP for the time he takes from his other endevours and retirement in order to try to educate the great unwashed.

        • 5Fingers

          I say “yawn” to your comment – cos it is same boring old nonsense based on fairy economics relating to metal. You, on the otherhand have to be “ad hominem”. Always attack the man…that’s your style. That speaks volumes.

          HSP’s little operation is a corner shop and a bank built in a protected hi population market (big cornershop) in Mexico and a few of the similarly aligned countries there (not all of them as it happnes). Never globalised. The Japs on the other hand have globalised. They build high end – not cheap.

          • Pot calling the kettle black!!

          • The reasons for the success and preference for specie money have oft been stated and need no repeating here.

            What we have not seen is a logical account and reasons why this is not true or thought incorrect.

            So when you get through yawning why don’t you take us through a sequence of reasons why you think this not to be so.

            Then also state your position on the current financial system and then tell us about the system that you would prefer and why.

  11. 5Fingers

    A census is one thing. Asking a naturally coy race about their “circumstances” is completely different. You will get “woe is me” answer by default. The fact that a government agency is doing it does nothing to inspire confidence.

    Consuming less? Saving more? For a country like Ireland we do not have the domestic market size to make any significant impact on “real” employment. Exports are up up up. that is what pays for economists and other professionals. Like it or not they drive the economy.

    The new repossession laws are now going to have the effect of forcing bankruptcy. We need this flushed out asap. In addition if the USA is anything to go by 35% are likely to be strategic defaulters And the hope is that forensic accounting will be used to flush them out. This is a necessary healing process.

    I see a lot of comments announce the imminence of some end or showdown. I have been on this blog for a few years. Still no end. Life carries on.

    As far as business goes (telecoms), USA is ramping. Europe is starting to show encouraging signs of growth for 1st time in 6 years. Av revenue per user is climbing or steady. No sign of gloom or doom anywhere.

    Meanwhile Ulster Bank showing a fall off in defaults…

    Maybe a new ponzi scheme? I think the world is moving on. It is a multi- polar world now. Maybe we need to stop thinking like anglo saxon westerners for a while.


    The well connected rich get richer and the rest poorer under te inflationary policies of QE to infinity.

    Only in a debt based fiat money system where the corruption seeps into and oozes out of every seam and crack in the economy.

    when are you going to opt for a solid sound monetary system. Specie beats paper every time.

  13. Deco

    Sweden in the 1600s was a country that generated a large quantity of iron ore, and paper in an economic environment when these were key ingredients to prosperity and power.

    The Swedes also had a navy, and a sea to protect them from attack.

    And Sweden was agriculturally self-sufficient. They had military advantages with respect to defence.

    The Swedes had far more in relation to natural resources, than the Swiss.

    Yet, the Swedes found out two centuries after the Swiss that is was more intelligent to stay out of the imperial trajectory to exhaustion and hubris.

    Imagine how prosperous the Swedes would have become if they never had any imperial ambitions. Even they decided to simply follow the Swiss route.

    In any case, they at least realises at some point that it was all of no benefit, and pointless. I suppose they had to learn the hard way.

    • 5Fingers

      Personally I think it is all down to latitude. The higher it is, the colder it gets. The colder (or higher) it gets, the more cooperative you become to survive. Socialism is a characteristic of the colder regions, individualism is one for the warmer. Just look where all the riots and conflict are.

      Humans/ economics are more victim to the whims of environment than they care to admit and shroud all in culture and mysticism to confirm their biases.

  14. michaelcoughlan

    Hi all,

    Back to the knitting of the piece written by the owner of the site: A well written piece David. Trouble is that no one in oficaldom is listening. Frustrating and terrifying isn’t it?

  15. Deco

    The Swedes in 1750 realised that the policy framework was a disaster.

    The Irish in 2013 are telling themselves that the policy framework is not a disaster.

    The state is now morphed into a structure of perpetual gombeenism. It hoovers up oincreasing quantities of the people’s toil, for purposes of controlling the people. Obedience to the madness of the age, Euro-centralization, is the standard by which every policy is to be measured. You only have to look at the BS from Pravda/RTE to see this.

    The state has gone “gombeen”. And it is running out of control.

    Most people are too busy trying to survive. We are the same as the Greeks, except we are entertaining a different form of illusions.

    My advice to eah of you is to know where things are intellectually. And by that I mean that there is a massive intellectual dishonesty in the public debates in Irish society. Which is exaclty what David is telling us.

    This dishonesty is necessary to shove through a policy framework that sucks out of a large portion of the population and gives to a small proportion that are part of a population elsewhere. The bank bondholders were given an opt out of capitalism, but the people were never given an opt out of cathastrophic policies.

    The greatest calamity to befall Europe since the Iron curtain, has been the centralization of policy making, that now counts as “involvement” in the EU. It is also the most absurd concept. And it is the source of much corruption. But no mention of that on the state propaganda quango.

    You can no longer trust the state, because the quislings runing it are more interested in themselves than they are in the people.

    The state has gone gombeen. It is collecting the rents, pocketting something for itself and sending money away to gamblers. As a result Ireland is a whirlpool economy. The greatest sacrilege of the current age is to ask what exactly is going on in the entire EU bailout program. It is simply unmentionable to say that there is anything wrong with any of it. Obedience is the objective of the state system. This tells us that there is a growing disconnect between the state policy mechanism, and the will of the people. But this ws not born in 2008. It was born in the Treaty of Maastricht, where it was decided that the will of the people was not a good basis for lawmaking anymore. Instead consent of political families was more reliable.

    Like the Swedes in 1750, Ireland in 2013 needs to get out of a bad policy. Ireland needs to opt out of the madness engulfing the continent.

  16. 5Fingers

    The 18th Century was a disaster for a lot of Europe. The Tabellverket (stats office) set up to do the census had the support of a now strong Lutheran clergy (Calvanism is a Northern colder climate effect) to tidy up and unify a country as a Lutheran stronghold. The agenda was control – ALWAYS. As it so happens, less European war (a characteristic of the early 19th Century meant higher population as more males survived.

    The thing about statistics is that it is about gather information for better control. The famous British nurse Florence Nightingale and her work in statistics and their display showed how many were lost due to accidents!

    Not trying to knock David’s argument. But I think the situation is a little more complicated that merely ignoring stats. Stats are used by everyone to yield what they like there days. Confirmation bias is hard to avoid. Anyone shouting the loudest has an angle. Stats are a STATE invention for the good of the community and to socialise same. Stats are used by marketing for other reasons.

    Fundamentally the argument is as follows…Troika as bad / EU is Bad/ Irish Government is bad……Versus the opposite. Frankly I do not buy it and I think argument that hinge solely on this premise will not progress to getting any closer to the truth unless we see hard non-confirmation biased facts.

    • joe hack

      Sometime there is truth in what you have said? Sometimes the opposite is the case?

      When is A Swede Not A Swede? A Turnip Is A Turnip, A Neap Or Tumshie Is Swede In Scotland But What Do They Call Turnip in Scotland.

      When is horse a cow or when thumb a finger.

      Sometimes a finger sticks out like sore thumb and sometime the fence people sit on breaks.

      We need to call spade a spade and we don’t need statics to figure out Ireland is economical is dysfunctional.

      Normalcy Bias is form of Conformation Bias!


      • 5Fingers

        I am for no Bias. No comfort in any view. Let’s admit it. We do not know.

        What I do know is that the collapse that everyone has been predicting on this blog for many years…has not happened.

        • joe hack

          That is what I was hinting at, but I know this now, Ireland is economically dysfunctional and it will not get better unless something is changed … what happens next well…if nothing is changed Ireland will be in more debt…and we may be growing more swedes to live on…

          The dollar will not be the reserve currency it will collapse………….

        • paddythepig

          Not everyone was predicting collapse. I never predicted anything.

        • Harper66

          No collapse?

          Ask anyone running a business. Things have never been worse.

          We are living in a bankrupt nation we cannot afford to address sovereign over spend because we bankrupted the country to pay private banking debts.

          Consider for one moment there was no Family income supplement, medical cards, rent allowance, mortgage interest relief, social welfare etc. The country would stop.

          Now consider private business. Government contracts are keeping many sectors afloat, for example construction.

          When an entire economy is reliant on state subsidies things HAVE collapsed.

          What did you expect buildings on fire and three headed dragons?

          • michaelcoughlan

            “When an entire economy is reliant on state subsidies things HAVE collapsed.

            What did you expect buildings on fire and three headed dragons?”

            Excellent observation!

          • Dilly

            People are expecting chaos, fire and brimstone, but, that never happens. even the Roman Empire died with a whimper over many years. The first thing to suffer in Rome was the infrastructure. Over about five years, it started to fall apart and the collapse continued from there.

          • Paul Divers

            This is an excellent point re medical cards, rent allowance etc. Without them we would be thrown back to the poverty of the 1930s or even worse

            But there are some people who think this would be a good idea!

            If you doubt me then I have an excellent article for you by an Irish blogger who visited Auschwitz and could not talk about it for 5 years such was the shock and realisation re the human psyche

            Humans are barbaric under the surface and have a capacity for unfathomable sadism. We all need to stay awake and keep our masters and their arselickers in check. This article is a warning to us all. Do yourselves a favour and read it:

            Old Europe, Old Civilisation and Old Savagery


        • michaelcoughlan


          No collapse?

          Try removing your head from between your kidneys and it will help you see better.

          This post reminds me of bonbon: Posts so daft that intelligent people will meerly chuckle and think to themselves keep posting you moron and there is no need to oppose you as you will destroy yourself all on your own.

  17. Adelaide

    “Don’t listen to the Tripe…

    I recently read that the US has officially introduced a new formula for calculating GDP, this new method overnight increases their official GDP by 3%. Snigger. A good read is “Stagnant Economies, Stunted Lives”

    “Health and economic data are highly political as they reflect the success or failure of government policies and have real economic consequences to foreign investment and therefore the data is routinely ‘positively’ falsified. Official data serve the administration’s goals and is packaged as public relations propaganda for the receipt of good press internationally. This propaganda is perpetuated by the government and consequently its citizens in a delusion of First World status.”

    The book mainly deals with trickle-down corruption-bred basket-case that is Argentina. Accounting for a time-lag the parallels with Ireland are uncanny. Our media-spouted laughable analogy of Ireland-Iceland should be more honestly Ireland-Argentina. Here is my favourite knock-out piece.

    “When the quality of its citizens lives is deemed by the government not worth maintaining then the end game is the murder of its citizens for profit. All the better if the murdered citizens are deemed enemies of the state. Political agitators and the insane make good business sense.”

    Tragically the author is not being melodramatic but referring to the real-life state-approved-slavery horror for-profit exploitation-of-incarceration of patients and prisoners and their ultimate disposal for their valuable human organs.

    Can there be such a thing as a ‘functioning failed state’?


      Peter Schiff discusses how the governments make adjustments to the calculation of the statistics to achieve the desired results.

      So the adage “lies, damn lies and statistics” rings more true today than ever.

      “Sophisticated societies measure things accurately”. This may be a true statement where honesty is implied but today where corruption rules everywhere just about all statistics are manipulated and cannot be trusted.

      One might say it is no way to run a country, and it would be correct.

    • michaelcoughlan

      “Can there be such a thing as a ‘functioning failed state’?”

      Absolutely! The nazis did a highly efficient job organising the industrial slaughter of the Jews. Failed and success mean different things to different people. GSucks sees the failure of the worlds economy as the fruition of their successful policies of short selling sovereign debt. The more mayhem the more profit! You have to be able to think like a nazi to truly understand the terrifying logic and pervesness of the people in charge.

  18. joe hack

    Has any one seen the straw? the camel is been run around in circles been forced to avoid the elusive straw.

    7 cent in Brazil was close straw? it might be the buses that will a straw here?

  19. joe hack

    Has any one seen the straw? the camel is been run around in circles been forced to avoid the elusive straw.
    7 cent in Brazil was close straw? it might be the buses that will be a straw here?

  20. Wills

    I can’t help but think when I read the above article it reads like a scathing review of a rent-seeking economy gone bezerk – which is exactly what the economy is now.

    Free enterprise system has been destroyed by a parasitical element which if we do not wake-up on will keep going and force feed us all test-tube burgers and poison us to death.

    • 5Fingers

      It’s probably more cynical. I refer to a previous comment of yours a while ago. I think it is about how you can stretch the social contract just to breaking point but no further until you know people have a tolerance for this new norm. The idea is not to collapse but to train.

      Like all service contracts (call it gov services, call it maintenance or insurance or many forms of rent) the idea is to maximise margin by delivering the minimum. Once there is no alternative you get used to it or get nothing. And truth be told we are still a long way from nothing and hence there is loads of scope for future tolerable (re-election likely) squeezes.

      We will muddle along until the next destabilising cockup occurs.

      • Wills

        By my reckoning the social contract is broken which is what the power elites want because been broken it removes them of any responsibility to the outsiders.

  21. Power…..a little bit at a time!

    “9/11 has allowed the government to use fear to get unlimited power. But when you get power, it doesn’t mean you can quickly spring it on everybody, because that shocks and startles them. So you use the power a little bit at a time, and let the people get used to it, and in that way you never meet any opposition.” … Paul Craig Roberts~


    The Dreadful Summer Wind

    James Howard Kunstler

    The world is swiftly moving to the dangerous place where nations won’t be able to do business with each other because they don’t trust the institutions that control wealth, which includes central banks, commercial banks, and governments

  23. “To combat depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about; because we are suffering from a misdirection of production, we want to create further misdirection – a procedure which can only lead to a much more severe crisis as soon as the credit expansion comes to an end.”

    Friedrich Hayek, 1933
    QE to infinity will only lead to disaster.
    The train seats are still very comfortable until the point that the train goes off the rails.

  24. Another essay demonstrating that government stats are not to be trusted

  25. Harper66

    I find it interesting that the very same people who were cheer leading the banking bail out are the very same people cribbing that they have yet to see an austerity budget.

    The choice we had in 2008 was simple tackle government overspend through cuts in public spending OR allow the state to take on private banking debt and fund this through cuts in public spending. The money was not there to do both.

    Take government spending out the economy (childrens allowance, rent allowance, government contracts, FIS, social welfare, mortgage interest relief, etc etc etc )and everything will grind to a halt. The Irish government has boxed itself into a corner and there is no where left to turn.

    I know of businesses that have had a rise of anywhere between 50 -200% in rates despite business is down by a similar amount! The government is unaware the well is dry and as David rightly says they refusing to face up to facts.

  26. Paul Divers

    Kenny tipped for plum job as head of the EU

  27. [...] before our eyes and as a people we are tipping over the brink into the developing national slum. Don’t listen to the troika, just look at the statistics | David McWilliams When you drill a bit deeper into the survey, you see that 90 per cent of those in difficulty [...]

  28. After The Battle of Clontalf the O’Brien Clan realising how diminished their clan numbers were retired from fighting so to replenish their herd numbers again.

    Have you ever heard of the Murphys fighting ? They were too smart and thus reason why so many proliferate the World.

    • joe hack

      @ John Murphy Murphy Murphy…ALLEN

      I knew a family with the name Allen it turned out the mothers name was Murphy and so to was her great great… fathers, I even believe some of them were incestuous ‘pure blood’ , right back to the time of The Battle of Clontarf.

      Best regards,


  29. joe hack

    Has anyone noticed how Quite the collapse of the Irish economy was?

    Did you hear that? No!-I did not hear anything ‘that’s what I mean something must be wrong’

  30. joe hack

    A man that tried to walk in to a high street shop is suing Dublin council. The man suffered severe concussive injures and was in intensive care for weeks. The man claims the council set up a booby-trap to entice him to walk into a solid wall. The man claims he had tried to enter his local shop which is now bricked up and that the council had painted it to look like as a busy open shop. The man also claims he now has a fear of shops. A council spokesman quipped that most men have fear of shops and that it appears now that most people also fear shopping under the present economic climate, he added that, perception is everything in economics.

  31. Again David, “Demand dries up if too many are saving because too few are spending, and without spending there can only be falling income.” implies that you’re not aware that a loan repayment destroys money.

    Have a read of for more info on how money is destroyed.

  32. [...] George asks…Getting a home loan with low credit score?My aunt has owned a home for the last 10 yea… [...]

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