January 12, 2015

Just like the '80s, only different

Posted in Sunday Business Post · 69 comments ·
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Leg warmers, Hall & Oates, mullets, Spandau Ballet, big hair, Bonnie Tyler, trickle down economics, overalls, shoulder pads and Charlie – my God! – Charlie Haughey. The 1980s are everywhere at the moment.

More than anything, this was the week of the Ford Granada, Austin Princess, Timotei shampoo and the Boss. Charlie Haughey dominated the Irish airwaves again. Last Sunday, we were catapulted backwards to a 1980s Ireland, which is both instantly recognisable and profoundly different.

However, it was not just the Haughey-fest in Ireland that made me feel like wearing matching denim. In Europe the ghost of the 1980s is at large. Russia in the east is a threat again, while in the west, urban terrorists are on the loose. As separatist movements are emerging in many countries, the ECB has hinted heavily that it will print money and buy up all sorts of assets in an effort to get the moribund economy going again.

Let’s take the last point first – because this is an economics column, after all – and then see the link running through all these recent developments.

The new economic policy supported by all eurozone governments is an extreme example of trickle-down economics, the type of economics favoured by 1980s right-wingers like Margaret Thatcher and Ronald Reagan. Yet, today, this right-wing policy – making rich people richer – is being demanded by left-wing governments in France and Italy.

Think about it. If the ECB buys assets, who gains? Rich people, obviously, because they are the ones who own the assets. Poor people don’t own assets.

Therefore, if the EU’s key macroeconomic policy is to buy assets via the ECB’s quantitative easing (QE) effort, its key policy is designed to make rich people richer. The hope is that these rich people will spend and this spending will trickle down to poor people! Making rich people richer isn’t the unintended consequence of policy – it is the policy!

But there aren’t enough rich people to buy all the stuff, so it won’t trickle down. The rich don’t make the economy go round; the average person does, spending the average amount, on average things, all the time.

By voting for the fiscal compact three years ago, Europe has tied all governments’ hands behind their backs because it limits state expenditure. We know that state spending on health and education is the single best way of making societies more equal.

The EU has replaced these laudable initiatives with QE. Therefore, the EU has embarked on a policy of making countries more unequal.

As wages – the income of poor people – stagnate, a policy of driving up asset prices makes the ordinary guy feel more left out. And consider the consequences of implementing such a policy at a time when your economy is, unlike in the 1980s, exposed to competition from China.

European industry has taken the brunt of the competitive pain associated with the emergence of China. It is the average blue-collar worker who has suffered because he is in the direct line of fire. His job is on the line.

In contrast, the protected professional middle classes have benefited from China, because they get cheaper smartphones without their jobs or wages being threatened by workers in Shenzhen.

Now consider what happens when all this undermining of the average local worker happens at the same time as mass immigration.

Immigration affects different parts of society differently. For wealthy people, immigration means cheaper workers. Immigration is a win-win option for the rich. In contrast, for poorer people, immigration means direct competition for jobs, for houses, for welfare, for schools, for hospitals, for transport and ultimately for a stake in their society.

So it is not surprising that, all over Europe, we hear representatives of big business argue for more immigration. It makes sense for them to do so: they get cheaper workers.

When the local white population try to argue that they are getting squeezed by immigrants or their kids can’t get work because the immigrants are getting the jobs because immigrants are prepared to work longer hours, they are slapped down and labelled racist.

But what if the local white people are just trying to protect their own interest? Isn’t that what everyone does?

Sometimes, the people who attack the poorer white indigenous population for being racists are protected behind some university department or other (paid for by the taxes of the working poor) and have access to radio producers or editorial pages in the media.

My point is that opinion-makers are not threatened by immigrants, so they would prefer the United Colours of Benetton approach to society rather than the more gritty and realistic notion that if some people gain, sometimes, other people lose out.

Now consider when economic growth stops – as it has done in Europe. The cake stops getting bigger and starts to get smaller. The local population, which was worried about its place when there were opportunities, suddenly finds itself in an existential struggle. But who exactly are poorer people struggling with? Not the guys at the top, but the guys with them closer to the bottom.

The protected political class (wedded to 1980s’ thinking) don’t see that on the ground, immigration, competition and inequality have made people nervous and rudderless.

The average guy goes looking for someone who speaks his language and echoes his concerns. And who turns up? Someone like Marine Le Pen of the National Front in France arrives who answers his questions about immigration, ethnicity and the fact that his son is kicking around at home in a hoodie watching daytime telly. She seems to have the answers, not because she knows the score but because, at least, she listens.

Then some Muslim extremist, invoking Allah, murders people in a magazine that the average guy has never heard of, but this confirms to him that, even though Mustapha in the football club is the nicest guy you’d ever meet, there’s something’s not quite right with these Muslims. There are too many of them.

Maybe, they think, now is the time to vote for the new party. Having voted the same way all his life, the average guy considers giving the National Front a chance. The other shower aren’t listening anyway.

No, it’s not the 1980s, despite the cosmetic similarity and the lure of nostalgia. In Europe, we are somewhere very different, profoundly less stable and much more volatile.


  1. McGoo

    “key policy is designed to make rich people richer. The hope is that these rich people will spend and this spending will trickle down to poor people! ….. But there aren’t enough rich people to buy all the stuff, so it won’t trickle down.”

    “representatives of big business argue for more immigration. It makes sense for them to do so: they get cheaper workers.”

    Beautiful, David. Just beautiful. Economics is so simple, really.

    The bigger question is, WHY are our elected representatives so intent on making things worse for the people who voted for them? I assume the answer will include the words “power” and “money”? Or would the word “stupidity” be more relevant?

    • bluegalway

      This article is to be commended.
      A rare, honest appraisal of the reality of the situation in Europe.
      Given the booming populations in Asia, Africa and the Middle East, the rate of immigration is likely to accelerate, particularly if the mainstream political class of Europe persist in acting at the behest of big business.
      The truth is a line of gun powder – spanning a continent – has been lit.
      It is only a matter of time before it hits the keg.

  2. Roast Beef

    At some stage the beef on the pan has to be turned otherwise it burns. This is my interpretation of ‘trickle down economics’ . Its a repeat process to keep the taste and the cook is in charge and in this the cook is the rich and powerful. How can you change something that is impossible. Its not about right and wrong , it is about ‘change’ . I have no answer to this dilemma .

    A champagne Pyramid comes to mind where the drink does reach the bottom . ….eventually .

    It is the middle class in China and India that have caused the crush on the middle class in Europe and polorised the workers between rich and poor .This is the root problem .

    Irish Immigrant policies have been skewed against the ordinary Irish worker as explained in the article and if you were French your criminal background would be checked first and your skills be aligned to the French system before you can work in France .So French workers are protected as a State should be responsible to its citizens .

    • Deco

      Irish immigration policies are all about propping up a real estate Ponzi scheme.

      Same as everywhere else.

      The most important thing in society is Ponzi-economics.

  3. EugeneN

    Yes, immigration wouldn’t happen were it affecting the rich. Even in the US where all opposition to immigration is derided as racist the black population is more hostile to immigration than the white population, and is in fact being affected by it.

    Now you could argue that it’s racist to bring down black wages of course and thats why whiter elites are in favour, an anti-black racism. However the argument on racism runs the other way.

    I have recently studied the French left, once a formidable force at 30% of the vote they were often anti-immigration:

    “On the issue of immigration, the PCF’s positions have also evolved significantly since the 1980s. In the 1981 presidential election, Georges Marchais ran a controversial campaign on immigration which was harshly criticized by anti-racism organizations at the time. In 1980, the PCF’s leadership had voted in favour of limiting immigration. The same year, Marchais supported the PCF mayor of Vitry-sur-Seine who had destroyed a home for Malian migrant workers; the PCF claimed that the right-wing government was trying to push immigrants into ghettos in Communist working-class cities.[11] The Libération newspaper also alleged that PCF municipal administrations had been working to limit the number of immigrants in housing projects. Today, however, the PCF supports the regularization of illegal immigrants.”

    I would argue that it stopped being representative of the working classes and became more middle class and of course, is now lucky to hold a deposit ceding that entire constituency to the NF.

  4. michaelcoughlan

    Hi David,

    When I was reading this article I remember catching my breath at the thought of the amount of courage and the size of the balls it took from an economics commentator of substance to put this article down on paper and go forward to publish it. It really and truly is a seminal piece of work especially in light of the events in Paris. If you ever need a big fella to walk with you on a protest march you can count on me.

    In constructing my post this morning I am going to eat humble pie and say straight up I am not an economist nor do I feel my skills would be at the level to continuously produce articles week in week out like you do. It’s in that context I’d like to make an observation on two of the following points you make and offer an alternative opinion which may or may not be valid.

    From above;

    “The new economic policy supported by all euro zone governments is an extreme example of trickle-down economic”

    “Therefore, if the EU’s key macroeconomic policy is to buy assets via the ECB’s quantitative easing (QE) effort, its key policy is designed to make rich people richer. The hope is that these rich people will spend and this spending will trickle down to poor people! Making rich people richer isn’t the unintended consequence of policy – it is the policy!”

    In the first point I don’t believe what is happening is an example of trickle down economics I believe I is an example of trickle UP economics. I will explain in a minute.

    I don’t believe the second piece either it sounds conspiratorial even though you didn’t mean it that way and also I try to steer clear of conspiracies.

    Your analysis is based on a mindset of an economist with his heart in the right place who has taken a position that the head cases in charge of policy are people who believe in trickle down economics as the best way to achieve economic goals. Let me offer you a different perspective;

    The head cases in charge are scared to death that the unimaginable ginormous derivatives bubble is going to blow up and unleash unimaginable amounts of wealth destruction on the worlds financial and economics system. As a result their policy is to print money to bolster the balance sheets of the commercial banks to prevent this from happening. So they buy the assets and soon it will be more and more Govt. bonds. Then they pray the economy will recover so they can unwind the debt.

    My understanding is that the Fed returns the coupon payments to the Govt. minus its own expenses so the Govt. in the US seems to think they have a free lunch. However the payments for the coupons have to be recovered from the taxable population. This is where it gets ropey.

    The head cases know in an economy that has stalled or is contracting incomes of the population will fall so the only way they can INCREASE the recover taxes is through wealth taxes like a second proper tax, septic tank charge, water charges etc etc. a drip drip transfer of wealth UPWARDS to the head cases in charge. This is the explanation I feel is accurate.

    Max Keiser clearly states printing money is causing DEFLATION and in my view its for the reason I just outlined especially since total debt in Europe is over 250% European GDP. Rich people are indeed getting rich but it is a by-product of policy I feel.

    I really hope that if I am inaccurate someone point it out so that I can get a better understanding. May I respectfully suggest that Adelaide’s recent observation that the problems are monetary in nature, something I and Tony Brogan agree with is the perspective you should consider when analysing the motives of the head cases in charge and that Adelaide’s request for an analysis on the monetarism unleashing havoc on the world is in fact timely.

    I was at a wedding last weekend and many of the guests who you would think are middle class are struggling i.e. no savings and just making ends meet. Most disturbingly still another national school I was told about has an enrolment where now only 30% (THIRTY PERCENT) of the kids in the school are Irish.

    I wonder if in the future in Ireland one of those non national kids who may feel intensely angry at being disenfranchised watching his father and mother being fucked over for decades in Min wage jobs and zero hour contracts allowed into Ireland to provide an endless supply of cheap labour (like to two brothers in Paris their parents being Algerian as far as I know) arrive into the Irish times and mow everyone down?

    Such an act would be another example of a young fella turned rebel being driven to abominable acts looking for a cause justifying his barbarity by warping a religious text or any other crutch he can use to justify his act;

    https://www.youtube.com/watch?v=2Ox1Tore9nw

    yours respectfully,

    Michael.

    • In other words, we are all getting screwed over by central banks, corporations, banks and governments/politicians, etc.

      Doesn’t matter what colour, creed, nationality or religion you are – that’s a diversion – if you treat people like shite, eventually they’ll react and the nutters among them will carry out atrocities. Simple as that.

      Then psychopaths of the likes of Cameron, Merkel, Hollande et al, have the guts to lead marches for freedom. Give me a break. Those people are far more evil and dangerous than some French Algerian nobody.

      • michaelcoughlan

        “Doesn’t matter what colour, creed, nationality or religion you are – that’s a diversion”

        Yes. Plus the fact that you divert the population’s attention away from the fact that the Allied forces in Afganistan kill a lot more than 20 of the locals and the real reason they are there is to protect the oil pipelines bringing increasingly worthless oil from the caspian sea to the arabian gulf.

        Michael.

      • EugeneN

        Michael, take your “truther” nonsense somewhere else. Apparently the oil fields in Tukmenestein are “Zionist” owned. More Jew blaming, of the type that led to Nazism. If you believe that the reason for Afghanistan was an oil pipeline which could have been built anyway, and the oil fields are owned by Mossad, you probably also believe that the 9/11 was a fake false flag. Seriously David you need to control the commentators here.

        • michaelcoughlan

          FUCK you throwing your anti semetic shit in my direction. I don’t own the facebook link ass hole.

          Other than throwing balls of shit in my direction to divert from your incompetence in your analysis you might learn that others have points of view inconsistent with your own and part of the learning process includes self reflection and capacity to have your point of view disproved if your man enough not to throw shit in the direction of the person being honest to the best of his or her ability.. I will do as I please as for mcwilliams controlling the blog that’s his prerogative not yours.

        • Mike Lucey

          @EugeneN

          “Seriously David you need to control the commentators here”

          If DMcW did what you suggest, what would we have then?

          There are many shades in the so called thuther movement, some suggesting all kinds of things but also many just asking simple and sensible questions that should be listened to and addressed.

          • Eugene is all over the shop Mike, he’s a Je Suis Charlie head (Je suis Adam, fuck Charlie – am I free to say that?) for free speech but then in the next breath David is supposed to weight in with the censorship.

    • EugeneN

      Keiser is a dolt. Printing money can never cause deflation but it may not cure it with inflation either.

      I agree with Joesph Stieglitz on this. We would be better printing money directly to produce modern Depression era projects ( i.e. green energy, damns, roads whatever) rather than the piece meal QE which is spent by the rich on assets, assets which by definition would be over-valued precisely because monetary policy is loose.

      • Adelaide

        Just to correct you there, EugeneN, Max Keiser makes the point that QE dampens an economy by the side effect of investment misallocation and thereby results in deflation of real economy indices like wages, employment, fuel etc, while at the same time inflating asset classes.

        In summary, printing money causes deflation in the real economy and inflation in the financial economy.

        • michaelcoughlan

          “In summary, printing money causes deflation in the real economy and inflation in the financial economy”

          Spot on.

          Plus an increase in taxes required from ordinary people to pay back govt borrowings in Ireland’s (Poluba’s) case now around 200bn.

          • michaelcoughlan

            A more accurate summarisation would be (now I though about it);

            The hoarding of freshly printed cash by commercial banks results in deflation by the prevention of that hoarded cash from entering the real economy but causes inflation in world financial markets including bonds and assets through speculation and the misallocation of capital (for example fracking awhere cheap money and not good innovation makes oil exploration in this manner viable when oil prices are inflated through speculation with interest free money) and not because of genuine demand. Such a scenario leads to complete market failure explained as a failure of market forces being allowed to set the price the FED itself being THE market the controlling entity setting the price.

          • Adelaide

            Keiser: “QE is economic suicide.”
            “The contradiction between printing money and implementing austerity is so blatant they really are taking the piss, they’re too lazy to even hide their psychotic agenda, but the schmucks on the street don’t seem to care, it’s like, yeah, feel free to screw us some more.”

          • The schmucks are thick as pig shit Adelaide so they get what they deserve in my book.

            You see I’m not such a lefty after all.

          • michaelcoughlan

            @adelaide

            “they’re too lazy to even hide their psychotic agenda, ”

            Yes. And it scares the life out of me. As for people who think their is merit in the singularity idea as far as I know overt 70% of trading is now done by computer algorithims.

            https://www.google.ie/search?q=singularity&oq=singularity&aqs=chrome..69i57j0l5.4154j0j8&client=ubuntu-browser&sourceid=chrome&es_sm=93&ie=UTF-8

          • michaelcoughlan

            Back in the 80′s there was a film called war games where a runaway defense computer launched ww3 in a pre emptive strike to protect itself. It was stopped when a hacker hacked in and convinced it that a retaliatory strike would kill it and it formed the logical view the war was unwinable so it stood down the missiles.

            Machines are controlling the market No one knows where this will go.

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

      • michaelcoughlan

        The world my friend is awash in deflation DESPITE all the money printing or moreover because of it.

        As for Keiser being a dolt you might be right or wrong but once again no alternative analysis.

        Michael.

      • Adelaide

        Adam. To paraphrase George Orwell, “You get the despot you deserve.”

        Seriously, I have no time for blaming the corrupt politicians etc, as Orwell said, “The power-hungry will always seek and gain power, the question is how much will you obey them, being complicit in one’s own oppression.” or the more catchier phrase “Participation in your own Manipulation”. I believe he also said “An authority is only as powerful as the power the people bequeath it.”

        It’s difficult to argue, Adam, that people are NOT thick as pig shit when one surveys the present debacle. Maybe that’s it, the oft-quote 99% are simply dumb-dumb players and the super-rich 1% are smart enough to rig the game, like shooting fish in a pond.

        • The corrupt politicians and their banker mates are an odious lot and I’d have nothing to do with them but yes, the lumpen proletariat are only too happy to bend over and take what’s coming to them.

          They are so brainwashed, that they even organize a march and allow the psychopathic European leaders front and centre. Sickening.

          • DB4545

            I couldn’t agree with you more on that one Adam. It was absolutely disgusting to watch that bunch “lead” a march and claim a “victory” to make political capital from the deaths of those poor people.You could see Sarkozy testing the water for another run at office over the graves of dead police officers and civilians. He shamelessly pushed his way to the front of the march. He really is beneath contempt but judging by the French media they were sickened by it too. Collectively they demonstrated the leadership skills of Neville Chamberlain. Sadly the lumpen proletariat are moving sharply right and left because the middle offers them nothing and is turning Europe into a wasteland or Eurabia as the more extreme elements are calling it.

          • michaelcoughlan

            @db4545.

            Good observation the centre isn’t holding. It is very similar to europe just before ww2.

            Michael.

        • michaelcoughlan

          “It’s difficult to argue, Adam, that people are NOT thick as pig shit when one surveys the present debacle. ”

          I would think they are too lazy intellectually to make the connection in how their own fuck you jack I am all right mentality is so self destructive.

          • DB4545

            The parallels with pre-war Europe are chilling Michael. I don’t think people are dumb but they are scared and they feel powerless in the face of economic onslaught. What we don’t need is some messianic nutjob or nutjobs to spark it all off. I’ve said before I was in the Balkans just before Yugoslavia went tits up. I couldn’t believe that civilised people could change so quickly. I was talking to a man who was a teenager in Belfast in the late 1960′s. He couldn’t believe how the place went crazy so quickly. There was an article in last week’s Sunday Times about refugees in Lebanon. One man(an electrician) described his nice home in Syria with a beautiful garden with fig trees etc. Six months later he’s now freezing in a tent in the Bekaa valley with his wife and two young children.

            I have no problem with nice middle class people talking horseshit on taxpayer funded TV when all is right with the world. It’s nice that they never have to face the business end of an AK47.But that’s not where Europe or the World is right now. The PC world is over and is time to start calling it as it is. The centre isn’t holding it’s looking for a lifeboat.

  5. Les Miserables

    Feel the passion of redemption in a new republic and touch the matrix . Attend the best performance of Les Miserables in march at Lime Tree Theatre – Limerick . Tickets are selling fast .

    http://limetreetheatre.ticketsolve.com/shows/873525783/events?TSLVq=5d31dfaa-f7ed-4cb7-9a9c-fd54e778ab00&TSLVp=41592e79-9f99-4482-89d6-1b9577953d19&TSLVts=1421067909&TSLVc=ticketsolve&TSLVe=limetreetheatre&TSLVrt=Safetynet&TSLVh=68a49c3897ae21a35eba785250420895

  6. From the FT today:
    Marine Le Pen, the leader of the far-right populist party that came first in last year’s European elections, complained on Monday that the government, by not formally inviting her to the march in Paris, had chosen to “exclude 25 per cent of French” voters.

  7. michaelcoughlan

    Hi David,

    I wonder if the Dept of Finance officials in the 1980′s were as blatantly idiotic as the shower at the moment;

    http://www.irishtimes.com/business/financial-services/goldman-sachs-and-carval-buy-2bn-irish-portfolio-from-lloyds-1.2023252

  8. george

    David let me start by saying, that this is one of your best articles I’ve ever read from you. And very much in tune, with the general feeling of the citizens of any Country.
    *
    I wasn’t born in this Country, and although I’m living here for longer than I did in my birth Country, I’m not offended or hurt, by anything you just have expressed.
    *
    Now the problem with this Globalization process as it stands, is that it was done purely from the interests and point of view of big Companies, without any regard whatsoever for Social Justice. The same hype that they want to create at the moment, in making us to believe, that we are going to colonize Mars, was created back then, when this Globalization process began.
    *
    Let’s take for example the case of big Corporations, that can operate in any Country, and send back their profits to their “mother company”, in concept of “royalties”, somewhere in a fiscal heaven, where nobody can get them. While individual business people, operating in the same category (lets think for a moment in the owner of a small coffee shop, in comparison to a big foreign chain of coffee shops), have to pay a considerable percentage of every euro or sterling they earn, in income tax. It’s total unfair and discriminatory. . And the most awful thing, is that Governments take the side of big Corporations and Private Banks, and the Financial Sector, sometimes citing International Trade Agreements that were signed behind citizen’s backs, as an impediment to do something about it.
    *
    Then let’s take for example the foreign workers coming to Ireland, Britain, Germany, Holland, Belgium, France, and the Scandinavian Countries, with proper Social Welfare Systems. Why homogenisation doesn’t apply to the Social Welfare aspect of Globalisation? Why countries in Eastern Europe that wanted to join the EU, were oblige to fulfil certain requirements, but never were required to have in place a proper Social Welfare System of their own, to protect their citizens, or any other EU citizen moving to those Countries?
    *
    Why Globalization allows Big Corporations, to move to China and Asia, and the rest of the World to open the borders for their goods, that are being produced over there, under working conditions, that in Western Europe would be considered totally unfair, illegal, and cruel?
    *
    The only reasonable answer I find to these fundamental questions is that, the Globalization Process as it stands, had legalized corruption, cheating, and exploitation, by allowing big Companies, Private Banks, and the Financial Sector, to run the Show.
    *
    Yes we are better off, than those poor unfortunate human beings in Eastern Europe, without the safety net of a Social Welfare System. And the Chinese, and other Asian workers, working twelve hours a day, seven days a week. And the poor African or Latin American masses, without drinking water and sanitation living in shanty towns. But it seems to me that not for long, if we analyse how societies even within Western Europe, have deteriorated after the recent collapse of the Global Economy. The structures are only working in favour of big Companies, Private Banks, and the Financial System, and eventually they’ll take everything they want!
    Within these fascist structures, globalization itself, voting and democracy, it has no real meaning.

  9. Pat Flannery

    Now that the EU seems to be moving away from its inter-governmental Fiscal Compact towards unrestrained American style ‘Quantitative Easing’ monetary policies David attacks the very development he so ardently called for as an alternative to the formal European Fiscal Stability Treaty. The Brits, at the urging of their America monetary masters, refused to sign because it ran counter to the unrestrained looseness the British and American Ponzi scheme depends upon.

    It now seems that David will attack anything the Europeans are for, even when they bow to British and American pressure. At least he is consistent, a knee-jerk Eurosceptic and an irredeemable anglophile.

    David’s obvious bias in no way detracts from the many excellent comments made on foot of his otherwise interesting article. I especially enjoyed the discussion on wealth distribution. I would only add that it is interesting that the distribution of wealth today is about the same as in pre-revolutionary France. At some stage the tension between the 1% and the 99% will spark something. The only question is what and when.

    • michaelcoughlan

      “I especially enjoyed the discussion on wealth distribution. I would only add that it is interesting that the distribution of wealth today is about the same as in pre-revolutionary France”

      Very Prescient.

      It’s not about sunnis or shias, catholics or protestants, democrats or republicans it’s about HAVES and HAVE NOTS;

      https://www.youtube.com/watch?v=ZINu-IC7eVw

      Michael.

      • Dead right Michael.

        That’s all diversionary bullshit so the greedy bastards at the top can milk everyone else everyone else out of existence.

        Divide and conquer tactics. The proles fall for it each and every time though so in some ways they get what they deserve.

        Personally I don’t give a shite where someone comes from or what their religion is, I get on with everyone, except the occasional nutjobs – who can be found in all corners of the earth – steer clear of them.

  10. Deco

    We live in a world where the rich make political policy. In fact that has been the world since the fall of the USSR.

    Before then you had an approach that dictated that the rich needed the poor, the workers, and the professional classes to have one collective solidarity.

    That ended in the US with Reagan. It ended in Europe with Thatcher (though Thatcher was mild compared to Reagan). Reagan was only a front man for the rich. And the very richest have always had their way, in the American system. Two political parties, very little choice, and lobbyists instructing both.

    The problem is that we are now heading to the point that Reaganomics plus consumers plus debt plus monetarism/Friedmanomics plus an oversized institutional state are all working in tandem to destroy Western civilization.

    And the most frightening part of the current scenario, is that anybody who questions this slide is immediately categorized, dispatched, and demonized as fringe (either on the left or the right).

    There is something that is bigger than money, and it is SOCIETY. Thatcher was wrong. The PDs were wrong. Reagan was more wrong than anybody else.

    And now we are about to witness a gigantic mess, as we see stock markets get out of balance again, and debts rocket.

  11. Deco

    The biggest difference between 2015, and 1985, is the pervasive lying that is occurring in the media.

    CJ Haughey was an amateur compared to Peter Sutherland.

  12. [...] comments on Immigration from D McW. Just like the ’80s, only different | David McWilliams Sign in or Register Now to [...]

  13. Deco

    Media organs or political parties who can “deliver” for the richest 1% will get very well rewarded.

    Better even than the Drumcondra ditherer, this time.

    • Deco

      Though, they same individuals or groups will also bear responsibility for societal misery, and damage.

      • michaelcoughlan

        “Though, they same individuals or groups will also bear responsibility for societal misery, and damage”

        It’s not something they care about deco. Good observation.

  14. SMOKEY

    David Mc Williams, shame shame shame on you,
    Sept 11th, the London subway,7 7, Mumbai slaughter of Jews in a hotel, lets see, uh Westgate mall, 67 dead, the Boston Marathon, I don’t need to go on, but how can you all of a sudden say a SINGLE attack makes us suspicious of islam and muslims. Bullshit David, these vermon have been wreaking havoc week in and week out for many years now. Cut the politically correct bullshit, you of all people should be above that. You are in danger of allowing it to happen here with that head in the sand attitude.

    • DB4545

      Smokey here’s the deal. You may remember the bit of trouble we had in the North East part of the Island some years back. Our neighbours didn’t really understand the situation. The place was a backwater to them and they were busy dismantling an Empire. When people started shooting at them it turned out that many of them had Irish accents. They made a fundamental attribution error and concluded that all people with Irish accents must be responsible for these shootings. The estimates suggest that most Catholic homes in the North were raided at least twice. We had the whole internment business. Then it just spiralled out of control.We had the crazy security screening of all Irish people. The resentment it created turned it into a recruitment campaign for the paramilitaries. It cost Irish and British Citizens thousands of lives, insane amounts of money and lost opportunity for a generation.

      We don’t need to repeat those mistakes or squander our resources fighting this menace. We need to engage in asymmetrical warfare and target selectively just like these maniacs have. Targeting innocent people is counter-productive and a complete waste of resources. Smokey I have no problem with crazy people who want to blow themselves up with suicide vests. I’m happy for them if they want to go to paradise a bit early. If they want to use an AK47 to blow their own heads off I won’t stand in their way. My problem is when they force the rest of us to join in their madness. Then it has to stop.

      • Colin

        ‘My problem is when they force the rest of us to join in their madness. Then it has to stop.’

        The only way to stop it coming to a street near you is to stop muslim immigration.

        Bring the poor Hindus from India, the poor Buddhists from Burma, the poor Christians from South America, the poor Pagans and Christians from Sub Saharan Africa, the poor Confucians from China into the country if labour is really really needed. I mean, how many have been killed in Europe by immigrant Buddhists unhappy with the media portrayal of Buddha?

        But someone got the great idea in the 1950s and 1960s of not bringing the above in in large numbers, they thought, hmmmmm… maybe we’ll bring in the people who tried to conquer Europe in three attempts over the last 1400 years, you know, the Arabs, the Moors and the Turks, yes, great idea, it doesn’t matter that they take their imperialistic creed very seriously and believe they are supreme and better than Christians and Jews and can invoke their ‘God’ and quote their ‘holy book’ which states there are 3 options, convert to islam; pay tax and live as a second class citizen in your conquered land; death.

        • DB4545

          Hi Colin,
          If you read my comments in David’s previous article I’ve suggested legal methods which would help to curtail most illegal immigration from problem cultures. The last time Europe faced a major threat a former colony (the USA) and Russia came to our rescue. Mr. Putin(he has his faults) has said that if Europe doesn’t act it’s in danger of becoming a colony of its former colonies. He may be right. The West (the USA, Europe, the Russian Federation, Australasia, Latin America and Canada) needs to get its sh** together and fast.

        • SMOKEY

          +1 Colin! Exactly. DB4545 is the kind of guy who would advocate everyone getting searched as they get on a plane. I say a 75 yr old Swiss woman, or a child in a wheelchair, or some Irish Nuns don’t fit the “profile” of bearded 20 something Arab males that I would prefer be searched. And once again the so called moderate Iman’s have a chance to rally Muslims and march en masse saying “not in our name” but, you wont see this happen. And you will be told by the mainstream media that this is not an Islamic problem it is a terrorist issue. They just all happen to be Muslim. Fact is we have to look at these people closely. Understand they don’t think like us and realize they have completely a different world view. And who on this blog feels in any way comfortable around someone in a burka?

          • DB4545

            Jesus H Christ Smokey will you please start using your brain. They shot a MUSLIM policeman as well. Did you know that a Turkish newspaper published the pictures from Charlie Hebdo today? We can pontificate all we like on this forum but do you realise the balls it takes to do that in a MUSLIM Country? A Catholic Archbishop was beheaded and three Christian missionaries were tortured and murdered in Turkey less than eight years ago. Ray Kelly the former NYPD Commissioner has said that racial profiling does not work.
            I don’t know if you’re taking the p**s but can you not see the danger that you would place people in? Your idea doesn’t work and is counter-productive it’s been tested and has failed. The 9/11 terrorists behaved like Westerners and were even drinking in local bars. They’ve already used a 10 year old child for a suicide bomb. These people think well outside the box so we have to as well. Conventional prejudice doesn’t work with these people.

  15. michaelcoughlan

    Hello Dathi,

    I watched you last night on prime time and everything was going swimmingly well in your spiel until Miriam 280k pa asked you how the European crisis should be solved. Your answer was Dragging his ass Draghi should buy everything that isn’t nailed down. If O’Callaghan wasn’t such an economic illiterate she would have asked you the obvious question; And where David will Mr Draghi get the moola?

    Where will Draghi get the moola Dathi? Every country in Europe is bust!

    If my post is wrong I am more than happy to have it exposed so I can learn.

    Here is an article which explains the difference between good deflation in the mid 1800′s as a result of phenomenal increases in productive capacity and bad deflation as happened in the 1930′s after the crash in 1929. Why don’t you read it and you might learn something.

    http://online.barrons.com/articles/SB105718154982975200?tesla=y

    I was thinking two thoughts during your performance and one was; if it comes to pass Draghi will buy everything how could I get him to buy the skid marks off my underwear and the other though was; it’s a pity ISIS isn’t full of people like you as the world would have no worries because ISIS would be full of people experts at shooting themselves in the foot.

    Let me explain to you something which you don’t seem to have considered there is a difference between spending and Investing see link below.

    The Germans need to INVEST in Europe and the ECB needs to FUCK OFF out of the equation altogether. For Keynesian counter cyclical investing to work it must meet at least two criteria as far as I can see which is; there must be a legitimate return on investment to the investor or the Germans are welcome to my underwear and the capital invested must be sourced in a sustainable manner from the population.

    In fairness to you David the head cases in charge don’t know the difference between investing and spending either as we recently witnessed the inclusion of money SPENT on hookers and cocaine being added to GDP figures. GDP itself being warped into GDS Gross domestic SPEND as opposed to gross domestic PRODUCTION.

    Such a brilliant article and such a dreadful epilogue.

    Michael.

  16. SMOKEY

    You, DB4545, are a Quisling and a moron. I will allow you to have the last word as you are a politically correct useful idiot for the new Hitler’s in filthy headscarves who would love to cut your throat on a video and show the world. Good luck with that, I will however fight to keep this human offal out of the communities of law abiding citizens who want to have a family, that means mom and dad, not dad and dad or mom and mom, but a traditional way of life where one builds a family in a safe community and some level of respectability to pass on to future generations. Not one of your arguments is worth responding to, so, you have lost this argument and you can lick your wounds privately. I will not waste my time responding to anymore of your infantile leftist and racist propaganda. Ever. Slan.

    • DB4545

      Smokey that’s the thing about a democracy there is no last word. I’m happy for you to make any comments you want all I ask is that you do a bit of research and think before you comment. You commented that you want to round up the usual suspects for pre-boarding searches and you call me racist? If EL AL profiled its passengers in the manner you suggested it would have planes falling out of the sky every day. The fact that it doesn’t is a testament to the Israelis using intelligence always and muscle when necessary. Far from being a “leftist” or PC I’m a libertarian who is fiscally conservative and socially liberal. I believe in first amendment rights and the secondment amendment rights which secure them in the US Constitution and I hope Europe enshrines those values into it’s political and legal system before it’s too late. I wish you well.

  17. Grzegorz Kolodziej

    A courageous and honest article.

    “When the local white population try to argue that they are getting squeezed by immigrants or their kids can’t get work because the immigrants are getting the jobs because immigrants are prepared to work longer hours, they are slapped down and labelled racist.”

    Though the article would be much more courageous if it admitted that it’s like the local white population of Australia getting squeezed by Irish immigrants ;-)

    However, as much as I agree with lots of what David says, I think he misses the point somewhat, a point made by one of the commentators called Deco:

    “Irish immigration policies are all about propping up a real estate Ponzi scheme.

    Same as everywhere else.

    The most important thing in society is Ponzi-economics.”

    The reason David misses the point is that he believes in inflation (and even though he exposed in his articles in the past various Ponzi-schemes in the Irish property market, he still believes in the biggest Ponzi-scheme of them all which is money printing) and quotes economists who earned much deserved opprobrium such as Josepf Stiglitz and Paul Krugman, who were wrong on nearly everything they wrote.

    For example, in 2002 Stiglitz suggested that the probability of a shock as severe as that anticipated in the new risk-based capital standards for Fannie Mae and Freddie Mac was less than one in five hundred thousand and possibly less than one in three million and that, given the extremely small probability of a default by these institutions the expected monetary costs from exposure to their insolvency would be ‘relatively small’.

    Turning to China, Stiglitz claims – on the basis of just a few hours spent interviewing some local officials – that stunning economic growth since 1979 is due to the existence of Township and Village Enterprises (TVEs) which are publicly owned but which simulate market competition owing to their being controlled by lower tiers of government, which is completely at odds with reality: of the 12 million recorded TVEs it turns out that 10.5 million are in fact privately owned or in a position of de facto private ownership – many of them having arisen following the process of rural privatisation that ran from 1979-1989.

  18. Fat Tony

    So what does this mean for Irish House prices (the only assets that matter), in the context of market interference from Central bank rules and from rent control meddling???

  19. Grzegorz Kolodziej

    First of all, in what way does the Irish House prices matter? Property in Ireland and the UK is the same what the stock market is in the US – it’s based on fiat money and it has no relation to the real economy. In recent years the growth in house prices has been fueled by debt. Keyensians like Paul Krugman just do not get that. The only index that matters is how many people come in to the country and how many people leave (heaven forfend that I turn a blind eye to terrible human tragedies of African nations, but this does not include asylum seekers).

    Now, to answer your question:

    1. House prices grew partly due to demand from immigrants (and other factors such as those you have mentioned. I.e., 325,000 PPS number issued to Polish citizens – obviously it does not mean that all of them stayed here, but it is a certain indicator)
    2. House prices have fallen again partly due to both Irish Citizens and non-nationals leaving (i.e., 122,585 Poles in Ireland in 2011)
    3. Now house prices are growing again due to factors indicated by you plus limiting supply plus demolitions – remember what media were saying only 2 years ago?:

    http://www.independent.ie/business/irish/itll-take-us-43-years-to-fill-all-empty-houses-26863864.html

    plus a strange feature of the Irish and British psyche which is a belief that house prices never go down – I heard that even from people who lived in the early 90s property-bubble burst London and I bet you we will soon start hearing it again).

    If the government wanted the house prices to fall, the first thing they would do would be to abolish the Rent Allowance and incorporate it into a general social welfare system the UK-style, which would immediately bring huge savings from people who are not entitled to it.

    David’s diagnoses have always been spot-on, but his solutions have often been wrong.

    He lives in fear of deflation while Dublin Bus ticket prices went up by 7% again, despite of the price of oil falling down by nearly 50%.

    He is worried about manufacturing moving to China, but he is not worried about Quantitative Easing which depends on the mercy of China buying the US bonds; not only he is not worried, he urges the ECB to make us more dependent on China by printing more soon-to-be-worthless euronotes and eurobonds

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