March 17, 2016

With a few simple steps, State could provide social houses for €800 a year

Posted in Irish Independent · 108 comments ·

Years ago, I had the wonderful opportunity to work for Jack Welch of General Electric fame at close quarters.

It is the sort of invaluable experience that is hard to replicate, even if, at times, his pace of work was shocking for someone 30-odd years his junior.

During the period, we had time to chat about all sorts of things.

At one stage, we were talking about crises or challenges, not just in business but in life in general and he sat me down, almost pointing his finger at me, and stated that there are three things to do in a crisis, or when faced with a challenge.

First, define your reality, not as you would like it to be but as it is.

Second, do something about it.

Third, face into the challenge and it won’t be as traumatic as you first feared once you have defined your reality.

Our new government has to define its reality and that reality is that Ireland has a housing crisis.

This column documented, well before it was fashionable, how we catapulted from building an abundance of housing units in the wrong places, to building none at all. But there are solutions.

The key thing to appreciate is that the market acting alone can’t provide decent housing at decent prices for our country.

It was the free market, not the State, that built ghost estates.

It was private banks, not State banks, that blew their balance sheets and ransomed the national finances with the explicit “bail us out or we will take the economy down” threat.

Rightly or wrongly, fixing the housing problem will take massive government intervention.

It will be done via government borrowing and that government borrowing has to be ringfenced explicitly to build houses.

These are not social houses; they are houses. Let’s drop the social bit.

Before I explain how it will work, let me tell you about the true cost of houses.

If you want to write about building houses, who do you talk to? A builder, of course – these are the lads on the site.

An old mate is a builder in Dublin. He is a small builder, nothing too fancy.

He reckons it costs €110 a square foot to build an extension on your house. To build a whole house, that figure could come down a bit, and to build lots of houses, that figure comes down a lot.

He suggests that if you are building hundreds of houses, the cost could come down 30pc because of volume.

This implies that a new build house on an estate should be costing about €70-€75 a square foot.

Like most Dubliners, I was brought up in a three-bed semi, which would have been about 1,400 square feet.

This means that these houses should be costing €107,800 to build.

Now let’s say the new government were to build 50,000 such houses in Dublin over the next two years. This would meet demand and still have some change to go around.

It would also cause the price of all houses to fall, as such a supply shock often does.

So, how much would that cost?

It would cost €5.3bn.

Our new government can borrow for 30 years today at 0.7pc per annum.

This implies that a ringfenced special purpose borrowing vehicle for Irish State housing would have to pay around €38m per year.

Now we are talking. This is a tiny figure.

How much annual rent would you have to charge on these State houses to cover this interest rate cost?

The actual figure would be €760 per house per year. Not per month, per year. This would be affordable housing, wouldn’t it?

And what would happen to the lion’s share of the €5.3bn that the State borrowed to cover the cost of the houses?

When you think about it, most builders will tell you that 70pc of the cost of building is wages, so there would be a net injection of €3.7bn into the economy in terms of wages.

This has a multiplier effect on spending and taxes, which all leads to a boost in demand.

Obviously, there are other costs and charges you could add to these base figures but this gives you a sense of how the creative use of State borrowing at very low interest rates can get us out of this hole at almost zero cost.

If you wanted the State to pay back more, you could increase the rent paid on these houses.

Now, obviously, the other big cost is land. It is land prices, not building costs, that are sky-rocketing.

In this case, you simply rezone agricultural land and pull the carpet from under those who are hoarding land.

A more sensitive way might be a “use it or lose it” scheme, where the land owner has to start building within one year or the site reverts to agricultural use and the State can enforce a compulsory purchase order.

The State would simply be the buyer, as all these houses would be built by private building companies.

To those developers who are suggesting, rightly, that super-levies are increasing the frontloaded costs of building, the State could help them out.

For example, in Cherrywood/Kilternan/Glenamuck, which is a massive site in south Dublin, the levies on units are huge.

Levies are to pay for roads, drainage and special services such as the Luas.

Standard levies are €9,000 per unit, the Luas levy is €6,000 per house but a local surveyor told me that the super-levies in Kilternan/Glenamuck are as high at €40,000 per unit.

This is crazy and, as these levies are frontloaded, the levies are preventing developers from building, which may explain why so many sites are vacant.

The State could again smooth the payment of these levies over years by again deploying the 30 years’ grace the bond market gives any sovereign government.

The levies will be paid, but not all at once and not all at the beginning.

It is time for the new government to take Jack Welch’s advice regarding the crisis.

Define reality, do something about it and once you are prepared to face it by taking action, the crisis doesn’t appear so bad at all.

  1. McCawber

    As I started to read this article, I was thinking pie in the sky, so now we know David knows Jack Welch – big deal.
    As most people know, to solve problems you need to break the problem down into it’s constituent parts.
    And then the lights came on :-
    David did exactly that.

    This is a great article. Read (reed not red) it a couple of times.
    It’s a road map in commonsense problem solving.


  2. Deco

    After the banks went to the wall, the banks were carrying massive negative balance sheets. And the state was tied to this. The state system expanded massively to take in the banks, and the housing sector. And like always occurs when the state takes things over, paralysis ensues.

    In addition, we have had very effective pressure being applied by political parties to prevent urban residential development in urban residential areas. This is utter madness. It condemns a generation of young people to living in Carlow, and working in Sandyford. Interestingly enough, the Greens sat on their hands on this and proclaimed the solution to be less cows. They did not admit that planning restrictions in respect of housing inside the urbanized part of Counties Dublin Wicklow and NE Kildare was the problem.

    We have denial all over the place, in the body politic. And now they have the pressure valve building up. Basically, as a result of increasing taxes on labour, any sense of hope of being able to afford housing is dropping. So the housing list starts to grow. Those increased taxes on labour are a result of the bank bailouts, and the oversized institional state.

    In addition, there is the issue of transport efficiency in Dublin. And also now, Galway. Which causes all sorts of contortions with respect to housing policy. Simply put, transport is inefficient in the entire East region. One massive step forward would be the DART-U. It would cost 3 Billion. But, it would make the rail system one system.

    Then there is broadband. It is useful in terms os getting people in rural Ireland, and small towns to stay there and stop filling Dublin with traffic. And in particular it will reduce demand. But the state is obsessed with taxing internet usage, and giving the proceeds to the state propaganda organ.

    And finally, we have the insitutional state itself which seems to be subsidizing central Dublin, and the county towns of rural Ireland, in tandem, in a rather peculiar double act. The subsidization of county towns in Ireland is particularly inefficient. The HSE seems to be carrying the can there.

    So there you have it. The housing “crisis” is the result of state policy. The state is reducing take home income, result in increased demand. And the state is driving down the housing supply, via ridiculous planning laws, a determination to make the bank balance sheets look good, and a series of policies designed to make people live in the East region.

    In the short term, we need to do something quickly. I would suggest building upwards in the existing suburban belt. There are nice complexes in the Islandbridge district which are multi-storey, close to the rail but, and architecturally beautiful. Why the same thing cannot be replicated in Lucan, is baffling. In the area between the Liffey and the Royal Canal, there is high density lowrise. It is a midlands town within Dublin city. In the centre of this will now be added Grangegorman campus (DIT). This will take public transport out of much of the city centre (which is good idea considering demand is greater than supply). But it will also result in increasing housing demand in nearby areas. So I think that medium rise is needed in this area, in the interim period, apart from the Luas and a bus garage in this area.

    David is correct, the issue of supply must be addressed. But the state complex does not want it addressed. Politics within political parties, and within power structures like South Dublin CC, and Fingal CC takes predence.

    In addition, transport policy plannig continues to be abysmal. Travelling along the NW rail line, just beyond Clonsilla, includes stretches that are empty of residential development. And it is beside a rail corridor that goes directly to Connolly station.

    Semi-Ds are grand for a county town like Monaghan. But in a capital city/business city, there is a need for higher rise residential, and supporting fast/heavy usage urban transport.

    The greatest danger of all is that we simply have no integrated plan.

    • Deco

      So I think that medium rise is needed in this area, in the interim period, apart from the Luas and a bus garage in this area.

      Should be
      [So I think that medium rise is needed in this area, in the interim period. In fact this is needed very soon. This will be a serious problem. And students (unlike PAYE workers) can find time to organize large noisy protests in D2. If I were a policy maker, I would step forward immediately with a solution to address this upcoming row. In addition, there is also a need for better transport links (apart from the Luas – because the Luas itself is a limited system, and it is not fast). Maybe a bus garage / transport hub in Grangegorma (state ownd land anyway) might be a good idea.

      I would do something about this area, immediately. Because that has the potential to be a high publicity topic very quickly. The current housing planning in the area is providing neither amenity nor housing. Just a tiny garden for everybody that is of limited usefulness, and small bedrooms. That is a bottleneck on the horizon.

      I don’t expect the Luas to be able to cope with the demand either. Maybe Dublin bus might prove to be better organized.

      Remember 98% of students use public transport, cycle or walk. Forget about cars. Walking is dependent on being nearby (with limited housing supply). There is currently a hard limit on the quantity who will be able to walk, based on the supply of residential housing nearby. Cycling gives a longer distance, but certain suburbs are dangerous, and don’t expect cycling to be realistic for everybody. Ultimately, a lot will depend on public transport. Public transport in Dublin has been about inadequate reaction rather than thorough planning, for a long time. For reasons of safety, public transport MUST be good enough.

      18 months to countdown. How will this work out ? In the context of the institutional state and public bodies in Dublin, this is about as well planned as things ever get.

      The question arises – will it work ? If not, then there will be plenty of protest noise in October 2017 in Kildare street.

      • pat greene

        Deco, in you piece above you mention that the students can protest…if we had direct democracy where ‘people’ not governments have the right to call a referendum and the government of the day is legally bound to the outcome of the referendum there is no need to protest. Where David talks about “ring fencing” the funds/taxes for house building, this statement would become redundant because when the government tells the people that the taxes are for project X then that is the only project to get funded from those taxes. Direct democracy creates a more “honest” government body and a political class that needs to be careful of being ousted by the electorate every day not just once every 5yrs..which means that the challenge of our reality is dealt with to the peoples advantage and in the least destructive manor..protecting society..putting people first..

        • I’m all for direct democracy, I live in Switzerland and love voting every 3 months on local and national issues. However even here big business lobbies parliaments and is coming under more scrutiny.
          Ireland also needs land reform where citizens can create an association, and buy land together with approval for development as an alternative to local authorities. The Govt would only need to approve schemes and underwrite the loans pending mortgage securitisation once the project was complete and sold/rented. However this ownership model is not fully supported under existing land ownership/registration/leasehold concepts.

          Such “Genossenschaften” are encouraged by local govt communities in the Zurich agglomeration as an alternative to State involvement.
          However if I can’t organise a vote forcing my town to underwrite the credit required, then how can I really change things? (where I live: a year ago, after we forced a vote for our favourite most expensive option for a Family/Social centre to be underwritten by local taxes, a private Foundation also committed funds to help the project get started. The same could apply to housing). I can still recall the disappointed faces of the local politicians proposals being over-ruled by local families who packed the hall to vote with their kids on their tax contributions.

          Finally local tax reform at the county/authority level would be required in Ireland. The least of my taxes go to the Capital, the majority locally. However I don’t see this as part of any programme for government after the recent election.

          As it’s St. Patrick’s day, maybe we need an Emigrant Investment Fund/Bank where the diaspora can invest in improvements back home. Maybe it’s time to make remittances multi-generational like the sovereign wealth funds in Norway, Qatar etc.

    • Grzegorz Kolodziej

      “the Greens sat on their hands on this and proclaimed the solution to be less cows.”

      They did much worse things than that, dear Deco – they (how come people forgot?!) co-created NAMA and punished the Irish people with the carbon tax (I wrote an article about the Greens economic policies for a Polish libertarian website at the time, predicting that NAMA would lead to increased prices, decreased supply and properties sold at discounted prices to foreign speculative capital, which capital would then inflate another bubble like they have done in Latvia and Kraków, whereupon the foreign speculators will resell them to the squeezed local middle class (which could have saved all that money they had spent on rents and houses and have started manufacturing in Ireland instead) – and thus trigger another property crash by doing so).

      I know that lots of people vote for Green in good faith – from my personal experience I learned these are often the nicest, most selfless people.

      Just not economically educated, because – did you notice that? – in every EU country the school curriculum is set up against people receiving economic education.

      RTE and TV3 should educate people economically, not spend money on vulgar British and US TV shows, which dumb people down, which then makes them easier to be manipulated – so much so that they even voted the Greens back.

      • Agreed, however such economic education might increase reluctance to pay the non-libertarian licence fee.

        Irish people respond instinctively to songs, drama and comedy. (Look at Kilkenomics). Econ-romcom-economics soap opera anyone?

        (I’m imagining the RTE announcer intro in between Fair City and the News….)

      • Truthist


        Would u be in favour of having “Austrian” Economics / “Sound Money” Economics / “…ish Economics” as mandatory, & major, part of economic education for late primary years, & secondary, & university curriculum ?
        And, hopefully with qualifiers as to certain weaknesses with Austrian Economics, & then the modifications accordingly supplied to it for to offer it as the only real economics ?

        Not trying to put u in a spot, but I trust that u are will give Yes or No answers to the following :

        Are u against having Private Central Banks ?

        Are u against having an International Bank of Settlements ?

        Are u in favour of replacing Currency [ Paper Notes, & Digital Entries only of same ] with Gold, & Silver [ And, each valued in excess of "Spot" Value ] ?
        Gold Paper is possible as practical substitute for Fiat Currency Paper [ I.O.U. Paper ].

        Are u in favour of prohibiting Fractional Reserve Banking ?

        Are u in favour of Investment for business activity ONLY allowed to come from :

        Savings ?

        transfer of Assets [ other than Money or Currency ] ?

        direct issue of investment Money ?

        Treasury issued Currency backed by honor of the country only ?

        Treasury issued Currency backed by Gold & Silver Reserves ?

        Treasury issued Money [ i.e. Gold or Silver ; And, it at value in excess of its "Spot" Value ] ?

        Thanks Grzegorz in advance for your answers.

        • Grzegorz Kolodziej


          ” 1.
          “Austrian” Economics / “Sound Money” Economics / “…ish Economics” as mandatory, & major, part of economic education for late primary years, & secondary, & university curriculum

          I would be in favour of having mandatory micro and macroeconomics in secondary schools and universities; however, it should be taken into account that people have different sets of skills (even when it comes to sports – i.e. I won some competitions in go-karting when I was 20kg lighter and I am not too bad at ice-skating, but I was always last in all kind of group sports and hated them all; and what about those who are wonderful nurses or storytellers?). I think that early school teaching should be practical – we learn about DNA, but cannot name all trees in a forest.

          Having said that, since we have maths in schools anyway, some economics should definitely be mandatory (and it should be A-level subject of choice, as well as philosophy)

          I would not only have Austrian economics at schools – I would have all 4 major schools, Keynesism, Austrian economics, monetarism and the supply-side – and I would give students tools to arrive at their own conclusions (I would not have Marxism because it is not economics, but I would not ban it either).

          No person should obtain a university degree of any kind if he/she cannot answer a simple question:

          Profit-maximizing firm will shut down in the short run if
          marginal cost is greater than average total cost
          marginal cost is equal to average total cost
          price is less than average total cost
          price is less than average variable cost
          average variable cost is greater than average fixed cost

          Additionaly, I would make logic mandatory in secondary schools. Logic was mandatory in Poland until the late 40s (until social-realism) and, as a result, A-level exams guaranteed a very high standard of those who had passed them (i.e. one of the most famous logicians, the American, Mr Willard Van Orman Quine, came to Warsaw before WWII specifically to learn Polish in order to get in touch with the Lviv-Warsaw school of logic, at the time the most advanced in the world; one of its luminaries, Mr Jan Lukasiewicz, who introduced (in 1917) a three-valued propositional calculus – the first explicitly axiomatized non-classical logical calculus – chose Ireland over England or USA to emigrate after WWII and I happen to know a retired TCD Professor who is so old that he remembers him – from 1999 to 2004, the Department of Computer Science building at UCD was called the Lukasiewicz Building).

          As far as other questions are concerned.

          “Are u against having Private Central Banks?” –
          most central banks are private; I would not ban them, but like President Andrew Jackson, I would remove federal deposits from central banks and they would go bust.

          “Are u against having an International Bank of Settlements?”

          Same goes for the International Bank of Settlements, of which central banks are subsets. Without taxpayers money, that would go bust too.

          “Are u in favour of replacing Currency [ Paper Notes, & Digital Entries only of same ] with Gold, & Silver”


          But people often confuse gold standard with fractional reserve banking (you can have fractional reserve banking and gold standard at the same time).

          When I say that I am in favour of a gold standard, I am not saying that each currency should be backed by gold in 100pc, but tied with gold – gold standard as a 100pc bullion reserve system, in which each banknote is backed by an equivalent amount of gold bullion in a vault, had in fact never existed; in 1959, Mr Arthur Bloomfield published a book called “Monetary Policy Under the International Gold Standard: 1880-1914?; in it he shows that the reserve ratios, on this basis for 1910 – so the peak of the gold standard – were
          -46% in Britain,
          -54% in Germany,
          -60% in France,
          -41% in Belgium,
          -73% for the Netherlands,
          -68% for Denmark, 80% for Finland,
          -75% for Norway, 75% for Switzerland, 55% for Russia,
          -62% for Austro-Hungary.

          He provides references to major central bank balance sheets around the world (including not only gold bullion but also foreign exchange reserves, i.e., bonds denominated in foreign gold-linked currencies)

          In the US gold coins comprised $591 million out of total currency (base money) of $3,149 million in the United States, or 18.7%.

          (curious fact in 1914, 44% of global net foreign investment was coming from Britain and only 13% from Germany).

          Equally important as what is the currency backed by (if it is backed by something) is who controls money creation.

          Here gold alone would not guarantee a sound system: i.e., the gold content of the Crown of the Double Rose was reduced to 83 percen in order to regulate the money supply since Parliament has always been loath to lend the King money for wars.

          “Are u in favour of prohibiting Fractional Reserve Banking?”

          Either this, or, like President Jackson, taking powers of money creation from it, which btw (are you listening, David?), has led to better credit availability for small businesses (Bogart, Ernest Ludlow (1907), “The Economic History of the United States”, pp. 219–21) and the fastest growth in the history of the US.

          However, one has to be noticed that todays system is not really a fractional reserve system because it is not really limited by reserves. A fractional reserve system would be way better than what we have today.

          “Are u in favour of Investment for business activity ONLY allowed to come from :”

          a, b, e;

          f – no, not really, with todays levels of debt and populist politicians driven by 4-5 year election cycles (19th century US was more of a republic than a democracy, where, if you want to win the election, you must promise to give, and to give you must borrow from future generations; Karl Marx himself believed that democracy is the road to socialism).

          Hope this clarified my views a bit.

          If my landlord is reading David’s articles in Indo (he might be), then all he understood from them was that the rents are rising in Dublin and this is good for the landlords, for he had decided put up the rent for the house by 200 euro a month (which he announced me excited at 8am) and I have to find a new place by the end of April as I cannot afford that one for a new price, and has even decided to paint it (for the first time ever – at this rate of renovation, who knows, maybe some day he will even install some heating).

          But it can be much worse I suppose, I have just met a guy this week who sleeps in his car (I think this is illegal? – poverty is illegal) because he cannot afford renting after his divorce and he is afraid of junkies in shelters for the homeless (which btw is closing down in our town, maybe for that reason).

          • Truthist

            Much thanks Grzegorz for ur brilliant & detailed answer.
            My apologies for submitting my comment with questions not sweetly numerated, & some typos included also.

            I going right around the clock at the moment chasing corruption personally directed against me involving “the most precious” office in the Irish State.
            Hence,- my rough submission.

            Ref. Ur Answer

            Why would u include “Keynesism” when u are on record for dismissing as fallacious [ I too lazy to search blog archives, & going thus for lazy choice of word ] on account of 1 reason for sure ; Mathematical error, vis. Keynes performed faulty mathematics [ Ref. Hierarchy of Mathematics Operations ; B.E.D.M.A.S. ] in arriving at crucial theory of his ?

            What do u mean by “Supply-Side Economics” ?

            Please understand that I have no economics formal education nor have an economics qualification nor have I practised as economist.
            I just have curiosity about this subject, & some conclusions already.

            Whilst being very impressed with Austrian Economics I think that as it is offered presently it is flawed.
            Again, I must confess to having basic knowledge of it.
            But, already, I believe that the money [ Gold Paper & Gold Coin & Silver Coin & [ Silver Paper ? ] should be in the hands of the people only ; No reserves ; The government just issues the money.
            And it should be denominated according to Hugo Salinas Price’s proposition for introduction of Silver Coin into circulation by Treasury Department of each government [ His stated purpose is for to provide the poor people with smart Store of Value ], i.e. be denominated with reference to its mass of Gold or Silver ONLY, & have by law a value in excess by a fixed percentage greater than 100 % of the Spot-Value of the Paper or Coin ; Perhaps 120 % ; Thus, Value of “The Grzegorz Gold Paper Note” = 120 % x Spot Value in Gold Market on given time-point of the Weight of “The Grzegorz Gold Paper Note”.

            Perhaps some of the above points can help to prevent reduction of the Precious Metal content of the Paper Note & Coin.

            And, I repeat it here for convenience with some redacting for to get David’s overdue response. 8-)

            “Are u in favour of prohibiting Fractional Reserve Banking?”

            Either this,


            like President Jackson, taking powers of money creation from it ;
            Which btw [ Are you listening, David ? ] has led to :

            better credit availability for small businesses (Bogart, Ernest Ludlow (1907), “The Economic History of the United States”, pp. 219–21)

            the fastest growth in the history of the USA.

            However, one has to be noticed that todays system is not really a fractional reserve system ;
            Because, it is not really limited by reserves.
            A fractional reserve system would be way better than what we have today.

            Re ; Ur Rent Increase Problem

            If Rent Allowance was strictly between Government & Tenant [ i.e. Landlord NEVER to be privy to Tenant able to get Rent Allowance ] ;
            ==+ No temptation by Landlord to profiteer
            ==> No distortion of Market Price for Rents being in excess of what they should be
            ==> Grzegorz would most likely not be having the Notice to Quit situation that is now forced on him.

            Ur friend is smart & brave ;
            But, it is gruelling.
            Actually, probably his only option.

            How about Trailer Park for ur friend, & u to Grzegorz ?

            If possible to get Rent Allowance for Trailer Dwelling in Trailer Park,- hopefully the Government do not oblige Trailer Park Owner to be privy to entitlement of prospective Trailer Dweller / existing Trailer Dweller of given Trailer Park to be pivy to that entitlement.

            Thanks again Grzegorz for outstanding answer.
            I aim to devolop upon it.
            And, expect me to return to u from time to time accordingly.

          • Truthist

            Typo again ;

            If possible to get Rent Allowance for Trailer Dwelling in Trailer Park,- hopefully the Government do not oblige Trailer Park Owner to be privy to entitlement of prospective ‘prospective Trailer Dweller’ / prospective ‘existing Trailer Dweller’ Applicant for Rent Allowance to apply for Rent Allowance.
            It is NONE of the Landlord’s business to know of the prospective tenant’s / tenant’s entitlements from Government.

          • Grzegorz Kolodziej


            1. “Why would u include “Keynesism””

            1.1. My Professor of economics had a brilliant method of examining students. For example, one of the questions he has asked me on the exam was: “explain the Great Depression from Keynesian, Austrian, monetarist and supply-side point of view, then point out flaws in their explanations”.

            I think this approach is the best way of shaping independent minds.

            1.2 As to Keynesism itself, I think that the core of it is based on incorrect maths and insufficient knowledge of the history of economics (on the latter:


            But there are some parts which are interesting (theory of imbalances in trade). Those parts which are incorrect (not wrong, but simply incorrect mathematically – fiscal multiplier) should be studied a l l t h e m o r e in order to teach students how to spot fraudulent maths.

            As to Marxism, this is different than Keynesim. Marx has simply falsified his data and hence the core of his theory is based on assumptions which relate to alternative history. His theory of exploitation is so unscientific (for example it completely ignores the dimension of time in production) that I wonder why people give out about creationism so much, if at the same time we have Marxism at UCD sociology department (which Marxism is based not on correct data and wrong interpretation, but on falsified data and lack of any economic knowledge).

            1.3 I would offer Keynesism in colleges for the same reason I would say that if a conservative or a libertarian wants to see what went wrong with 20th century, he should first and foremost read Rousseau – and Mussolini from modern politicians (a lot of economic solutions of Mr De Valera were modelled on Italian fascism).

            Keynes was the most influential “normal” economist of the 20th century, as much as Rousseau was the most influential 18th century philosopher in the 20th century (indirectly of course) – even if most of their influence was detrimental, quote from Allan Bloom’s book:

            “What was acted out in the American and French Revolutions had
            been thought out beforehand in the writings of Locke and Rousseau, the
            scenarists for the drama of modern politics. These Columbuses of the
            mind—Thomas Hobbes led the way, but Locke and Rousseau followed
            and were considered more reliable reporters—explored the newly discovered
            territory called the state of nature, where our forefathers all once
            dwelled, and brought the important news that by nature all men are free
            and equal, and that they have rights to life, liberty and the pursuit of

            and (these are quotes from “The Closing of the American Mind”)

            “It was Locke who wanted to preserve the primacy of the sentiments
            of nature in the civil order, and the result of his mistake is the bourgeois.
            Rousseau invented the term in its modern sense, and with it we find
            ourselves at the great source of modern intellectual life. The comprehensiveness
            and subtlety of his analysis of the phenomenon left nothing new
            to be said about it, and the Right and the Left forever after accepted his
            description of modern man as simply true, while the Center was impressed,
            intimidated, and put on the defensive by it. So persuasive was
            Rousseau that he destroyed the self-confidence of the Enlightenment at
            the moment of its triumph.”

            If I were to describe myself, I would say I am siding with Locke and against Rousseau. The said Professor Bloom writes:

            “Rousseau’s Confessions were, in
            opposition to those of Augustine, intended to show that he was born good,
            that the body’s desires are good, that there is no original sin.”

            Well, I – like Plato, Aristotle, St. Thomas Acquina and Tocqueville – and unlike Rousseau – believe that there is hierarchy of desires, some desires should not be indulged (which ones? a modern man is unable to say because he believes everything is relative and should be tolerated, but his LACK OF HARMONY WITH HIMSELF RESULTING FROM THAT BELIEF IS NOT RELATIVE BUT ABSOLUTE) and that the culture of authenticity has deprived us of tools which would help us to choose between them worthy and unworthy desires.

            A belief that a man should always follow his desires and never delay gratification leads to drug culture, naive voters and unhappy single people spending 100 dollar per hour for psychoanalysis.

            But to understand that, one should study the origins of those believes – same with Keynes in economics: someone who never studied Keynes will have trouble understanding why the West is so much in debt.

            2. “Whilst being very impressed with Austrian Economics I think that as it is offered presently it is flawed.”

            Yes I agree with you. That’s even more the reason why we should constantly challenge our Austrian analyses by studying other schools.

            But a lot of modern economics is even more severely flawed. For example the economist have not studied model theory in semantic so that they do not know that model theory in general is flawed due to limitation theorems (I have never met an economist who would know it, and mathematicians who do know it are too busy to have time for studying economy).

            As to flaws in the Austrian School, I would for example recommend listening to Messrs Mish Shedlock and Harry Dent as an antidote to Mr Peter Schiff (who is also worth listening to – btw, his father’s book was the only book that was banned in modern US), for Mr Schiff – as an Austrian – is right in 95pc – but where he is wrong, he is really inflexible (it is interesting to contrast modern Austrians with Hayek, who had been evolving with his views as opposed to some libertarians who are just provided with some sets of easy answers – even though libertiarian answers are infinitely better than Marxists answers; Marxism is so popular in some intellectual circles and among political commentators in Ireland (and it is even worse in France, Italy or Germany) – Mr Fintan O’Toole for example spoke at Marxism 2009 – that I am surprised that is has not yet become an official religion of Ireland – though we are not far from it, considering that there is a monument of Mr James Larkin in the heart of our city, a leftie spy who has managed to get sponsoring from the Indian rubber producers, Germany finally the Soviet Union, while it took 80 years to make a film about Mr Michael Collins, who was a real hero – surely Mr De Valera, himself suspiciously saved by the Brits, a man who lost his mind during the Easter Rising and urinated in his trousers during WWII when he heard there was a telegram from Mr Churchill, would not have allowed that kind of film to be created).

            Coming back to why only reading what we already believe in can make us delusional at times, Mr Schiff was predicting that FED would never raise rates while I predicted on this blog that it will. True, he predicted many other things right, but so did the non-Austians.

            3. What do u mean by “Supply-Side Economics”.

            A good article on supply side economics:


            4. “How about Trailer Park for ur friend, & u to Grzegorz?”

            There is a precedens:


          • Grzegorz Kolodziej

            Just one more thing to clarify.

            “If Rent Allowance was strictly between Government & Tenant [ i.e. Landlord NEVER to be privy to Tenant able to get Rent Allowance”.

            I am not getting any rent allowance. I have never got or even applied for any rent allowance. HE IS GETTING RENT ALLOWANCE (like many, if not most), and not declaring his tax income from renting – like virtually all landlords who advertise where I live).

            I am just in this house because the Garda officer I had been sharing with before had suddenly terminated the contract and I had to find something really quick and locally, while not really having time for it.

            And this new thing with landlords banned from advertising “no rent allowance accepted?”. I give up. Who comes up with such “solutions”? The only thing it will lead to is that now you will have to spend 20 euro and 5 hours on phone calls before you find out that they do not accept rent allowance anyway, which they won’t have to name as a reason. 100 people in the Dáil and it did not occur to anyone? And we pay 87,258 basic salary to them? 9 out of 10 interns on 238 euro would have figured that out before passing such legislation. Seriously, IQ tests are required for all candidates for the Dáil.

            It is like passing a legislation: “no comely maiden should refuse favours from anyone”.

          • Truthist

            Some Thoughts in sequence to ur Thoughts :

            I presume u meant ;

            model theory IS semanticS

            Re ; “Alternative History”
            Ur discussion on Marxism

            What do u mean by “alternative history” ?
            Awaiting ur answer, I presume that u are impressed with much of the work of the major names in “Revisionist History” ;
            A certain noteworthy revisionist historian defends revisionism by comparing it to the practise of the good detective delving into the case again.

            ” … a lot of economic solutions of Mr De Valera were modeled on Italian fascism.”

            Please give brief list if possible.
            No need for elaboration ;
            I conscious that u are even more than kind to provide another brilliant reply, & that & thus deserves maximum readership viewing.
            However, we are so close to archival time & also the extreme periphery of the screen, that yes I think better to give just brief list here, & best to insert as possible interloper post to next article [ Presumably not mentioning the Long Fellow ] 8-)

            By the way, I know something about De Velera that should explain a lot ;
            But, wise to not divulge presently on blog for sake of PC obedience.

            Re ;
            Locke’s mistake being [ I presume ; his creation of ? ] the Bourgeois

            It was Locke who wanted to preserve the primacy of the sentiments
            of nature in the civil order, and the result of his mistake is the bourgeois.

            Brief explanation if possible will be appreciated.
            Again, & increasingly so, I think best to save it for next article.

            Re ;
            Property V.s Happiness

            ” … rights to life, liberty and the pursuit of property.”

            Colloquial rendition refers to “Happiness” rather than “Property” per this phrase.

            And, Re ; Property Rights [ I presume includes "Private" Property ]
            This concept of “Private” Property is a big sin in the dogma of Socialists & Communists.
            I think they are absurd to hold that view.
            Private Property is inherent to every living being, & not necessarily to the detriment of others by being so.
            In fact, it can be a positive.

            Very Notable

            the Right and the Left forever after accepted Rousseau’s description of modern man as simply true.
            The Center was impressed, intimidated, & put on the defensive by it.
            So persuasive was Rousseau that he destroyed the self-confidence of the Enlightenment at
            the moment of its triumph.”

            And, there was I thinking that he was a champion of the Enlightenment.

            Please note, I have only superricial knowledge of Rousseau ;
            I only have read about him in passing.
            He seems to be responsible for the romanticism of the noble savage etc.

            Prof. Bloom’s view of Locke

            If I were to describe myself, I would say I am siding

            with Locke


            against Rousseau.

            there is hierarchy of desires, some desires should not be indulged (which ones? a modern man is unable to say ;
            he believes everything ;
            is relative
            should be tolerated.

            the culture of authenticity has deprived us of tools which would help us to choose between worthy desires & unworthy desires.

            And thus we end up with Aleister Crowley ? ;

            “Do as thou will ; That is the Law.”

            “Papa” Schiff’s book banned in USA

            “Papa” Schiff’s book banned in USA but none Eustace Mullin’s books even though Mullin’s book on USA Fed. Reserve was banned & burned by post WW 2 Germany with directive of USA Powers ?

            Re ;

            I is being told to me that even biz. faculties see great merit in Marxist Analysis for explaining matters in Economics & Biz.

            Rent Allow ;

            I was going to issue Addendum that I presume u are not going to apply for Rent Allowance.
            But, refrained from doing so because I thought that was understood.

            Landlords hiding Rental Income

            Surely too risky for Landlord to hide getting Rental Income since non-Rent Allowance Tenant can claim tax relief on Rent paid ?

            I.Q. Deficiency is Reason for flawed Decisions & Policies

            They have highly developed “sneeky” I.Q.
            Tha is part of the problem for us with them.

            Other aspect to their character that I make mention of elsewhere is their Malevolence / Sociopathicism / Psychoticism [ I lazy to look up correct Nouns for these perjorative but truthful attributions as to most Civil Servant Decision-Makers in Land of Raints & Rcholars 8-) today, & in times of Brit rule too.

            I hope that u publish 3 – 7 A4 page stiff card pamphlets A4 size per individual subjects to sell or gift.
            Internet is too ephemeral Vs the hardcopy book or pamphlet for ur most interesting insights & developing curiosties about important stuff.

            Again, I hope that u will reply to the above within future article blog only rather than this particular session, & then only at ur very convenience.
            Ur thoughts I wish not just for me ;
            I wish them for reading of most of the blog’s witnesses.

            Perhaps u can reflect on Hugo Salinas Prices proposal per Solution to the Money Problem that I wish to devise.

          • Grzegorz Kolodziej

            1. “model theory IS semanticS” – typos stemming from me not having time to review my comments. I mean the whole mathematisation of macroeconomics and the often careless usage of mathematical models, which is very misleading for students of economics as it leads them to believe that using sophisticated tools makes a theory more likely (I have met plenty of students who believed that textbooks of, say, Prof. Samuelson are some sort of Newtonian laws). The problem with mathematisation of macroeconomics towards using models is that is based on underlying model theory as developed in semantics and inititiated by Mr Alfred Tarski (a Pole, by the way). It assumes Tarski’s theory of truth is correct. But Tarski’s theory of truth, even though it is arguably the best theory of truth ever developed, is a) burdened with its own logical problems and b) although it works brilliantly in mathematics, in physics (let alone in economics) it has to be used with knowledge of its limitations (it basically allows to show very precisely what happens IF the model corresponds to reality but it does provide us with tools to identify models THAT are true – once again, I am talking about physics, in mathematics it works impeccably).
            Now, modern macroeconomicsts naively take the whole model theory as physicians use it and apply to a field where it really was not supposed to be applied.
            It is basically some sort of self-reproducing education complex, with bearded Professors like Mr Krugman using mathematical tools they really do not have clue about pretty much the same as some other people would use black magic to hypnotise their followers, and poor students believe that it is all science like logic only because they see these impressive formulas and graphs.
            Some of them are even awarded Nobel Prizes for it, like Mr Robert Merton.
            Then the black swan event occurs and they are all at sea when it comes to explain why their models failed (they do not understand that the model theory itself is flawed when transplanted from semantics to macroeconomics, and even in semantics it encounters its own problems) – it is a pity that usually when that happens they are not invited to TV stations – I would love to see the likes of Merton, Krugman or Stiglitz being grilled by, say, Mr Jeremy Paxman, as to why nearly everything they has predicted was wrong.
            Example – ask Prof. Paul Krugman does in his models exist an o-minimal first order theory with a trans-exponential rapid growth function and he will lose his bottle – yet these people let us believe that their models are true and that we should entrust them billions of dollars of taxpayers money (for example, Prof. Joseph Stiglitz models estimated the probability of Fannie May and Freddie Mac collapse to 500,000:1; of course, they did not collapse only because Messrs Bush/Obama bailouts, the ones talked about via Congress, the ones not talked about via FED).
            Another problem with model theory no economists I have met are aware of (and I studied with an economist who at the time was probably the best in Poland, an author of an alternative transition plan which was never implemented because the Balcerowicz plan, imposed by Mr Jeffrey Sachs and the IMF was implemented, which did to early 90s Poland what NAMA is doing to Ireland now – except not only in a relation to property, but to the whole economy) arguably the most important theorem which is a huge blow to model theory – the Loewenheilm-Skolem theory, which states that if a countable first-order theory has an infinite model, then for every infinite cardinal number ? it has a model of size ? (it simply means that no first-order theory with an infinite model can have a unique model up to isomorphism).

            2. “Please give brief list if possible”. For example the idea of social partnerships comes from fascism, and Ireland had a record number of them. By the way, Ireland has produced a highly interesting version of her own fascist movement, Ailtirí na hAiséirghe. It was very original – it was basically almost a non-violent fascism (if that makes sense, which I do not know if it does), whereby they had hoped Ireland will become a spiritual centre of Europe fascist movements.
            Of course, I agree that Mr De Valera made a wise decision to keep Ireland neutral, but he was a bit lucky too. The Baltic States which decided to be neutral were not that lucky. What if Operation Kathleen succeeded (the IRA/Sinn Féin wanted Hitler to invade Ireland, get rid of the Brits and then kindly withdraw – they would have been for a disappointment)? Or what if Mr Churchill (himself a devious person, though not as much as President Roosevelt) decided to invade Ireland (that’s why Mr De Valera urinated his trousers when he heard there is a telegram from Mr Churchill after his refusal to do blackouts to prevent bombing of Belfast).

            3. ““Our Nation, a great stage for the acting out of great thoughts, presents the classic confrontation between Locke’s views of the state of nature and Rousseau’s criticism of them… Nature is raw material, worthless without the mixture of human labor; yet nature is also the highest and most sacred thing. The same people who struggle to save the snail-darter bless the pill, worry about hunting deer and defend abortion. Reverence for nature, mastery of nature- whichever is convenient.”

            4. Locke would say without private property all freedoms are illusions, Rousseau would say private property enslaves us. Rousseau was a fine thinker by the way, it just I side against him. To me, like to Aristotle, city is a natural state for a man, not some sort of non-stressfully brought up spoiled brat whose all instincts all indulged because they are good by nature (Rousseau).
            Plato, Aristotle, Augustin, Thomas Acquinas = we should try to be better than we are.
            Locke = we are neither good nor bad, but we should delay our gratifications – the essence of work – the source of private property=freedom.
            Rousseau – we are perfect as we are. Children know naturally what is good for them. Rousseau cherishes (in his memoirs) moments when he was drafting on his raft and masturbating. He calls that happiness. No, I am not messing – this what he wrote. This (non-stressful behaviour and total indulgence, not masturbation) has ultimately led to this:
            These are the leaders of Europe.

            6. Crowley – you would never believe how influential he was in Hollywood. Did you read his book? He names the acting method as the most suitable for being getting yourself possessed. Fortunately Dublin’s OTO lodge has what? – 6 members (I might be wrong – this was the last time I checked – it maybe more now)?
            I is being told to me that even biz. faculties see great merit in Marxist Analysis for explaining matters in Economics & Biz.

            8. I had an interesting conversation with a UCD sociology Professor. Picture me, some of his students and economy talk. I am silent, observing. Finally I got a question from a Professor:

            “and what do you think?”. “I disagree completely with all you have said”, I said. I am more of an Austrian”. “I am a Marxist” – says Professor. “How germane you should say that. Is that even possible after Eugen von Boehm-Bawerk?” – says me; some of his students look at me like they want to stab, others smile though.

            Seriously, out of two things reading Mein Kampf is way less harmful than reading Marx – at least it is better written and it teaches you how to speak publically. Btw, did you know, that Marx wrote an article in which he proposed to exterminate the entire nation of Serbs?
            11. You should really read this regarding IQ and our times, when you have time (I know it is a big ask, but I read such things on buses; btw, what you would pay nearly 2,000 a year in Dublin, cost 360 euro a year in Vienna and some reader posted recently that public transport in Spain is equally depressigly – for Dubs – cheap):


            This in turn is much lighter:


            But it has really cheered me up because I have found out that most music that comes out from loudspeakers in public places should not exist and it should be destroyed with a hammer ;-)

          • Grzegorz Kolodziej

            “the Loewenheilm-Skolem theory” = the Loewenheim-Skolem theorem. There are 2, upward and downward (we had to prove them both from memory with chalk and board), but I do not want to go into details.

          • Grzegorz Kolodziej

            ? = K

            This website and symbols…

          • Grzegorz Kolodziej

            500,000:1 = 1:500,000.

        • Are u in favour of replacing Currency [ Paper Notes, & Digital Entries only of same ] with Gold, & Silver [ And, each valued in excess of "Spot" Value ] ?

          Attached is the short essay on having silver coin introduced into circulation. Not to replace current fiat but to run along side fiat as an alternative available to the public.

      • Deco

        You are correct. When FF ditherered about saving the banks, in case the cost would be paid by their canvassers in the institutional state, the GP kicked up a stink and demanded action.

        Dan Boyle (GP) producing the quote “we will save the banks before we will save the factories” on the state propaganda channel evening news.

        As a result the bondholders came first, and the rest of us paid up to pay for their comfort.

        I never vote GP, and never will. Never ever forget the treachery.

  3. Deco

    Just wondering, but is it not still the case that substantial land holdings on the edge of the city are held by a defined number of developers – and that these are in NAMA / or have been in NAMA ?

    Also, a suggestion – future planning in the urban Dublin area, be contingent on a minimum number of residences being contructed in a defined area. So as to push the developers to building more units. That would do more than “use it or lose it” taxation, in the short term. Perhaps change levies per area, instead of per residence. So as to drive up the supply.

    • Sideshow Bob

      Nope & nope. (See Housing Supply Capacity in Dublin´s Urban Settlements 2014-2018)

      And what developers are you talking about?

      Most were taken to the cleaners in 2008-now, if not wiped out completely. Any that survived are working mainly in the UK. There ain´t many capable players out there still with skin in the game,so to speak. This is a serious problem. The industry was decimated.

      There are very few valid PPs for residential building in Ireland, and not a lot in the pipeline. And an industry that is at skeleton levels compared to the boom to engage in speculation, development etc

      Do you think many developers, etc, want to get burned a second time?

      • Grzegorz Kolodziej

        “Nope & nope.”

        Yes & yes – Deco is right.

        “And what developers are you talking about?”

        From the ESRI report:

        “the lack of a supply response due to the increased prices may also be due to the expectation of even higher prices in the future, which would lead to land hoarding.”

        “Do you think many developers, etc, want to get burned a second time?”

        Not that they want to, it’s just that developers, like other people, believe the media pro-bubble propaganda.

        After all, how many people in Ireland, apart from David, Constantine, Prof. Kinsella, me, and a few economists from abroad noone wanted to listen to, predicted the property crash in Ireland (well, if they did, they did not go public about it)?

        Which, given the price/annual rent ratio was not that hard to predict.

        Most people believe what they want to believe, here and elsewhere.

        • Grzegorz Kolodziej

          Constantine = Constantin

          The fact that Dr Gurdgiev was right is too hard to stomach for some arrogant politicians even now, such as the FG TD Ms Áine Collins (who also complains she only gets 90,000 salary), who, to paraphrase her style, should not have made it through the natural selection process, let alone the Dáil:

        • Sideshow Bob

          Sorry, this is coming from the guy that thinks Part V doesn´t exist anymore?

          No, Deco is wrong. The edge of the city land banks are gone. Nothing but urban legend at this point.

          The SCSI report referenced above (p.12)shows in a simple colour coded map where zoned land is and points out that there isn´t very much, enough for 25,000 units at an absolute maximum.

          About half of it in in Fingal and over half of that again of that is in places like Swords, Balbriggan, Donabate, Rush and Lusk.

          As for these Developers you have been chatting to who are out there rearing to go will you be a dear and go on and name them please?

          • Grzegorz Kolodziej

            I said I was chatting to an ex-FF TD, a neighbour of mine and a decent person (despite all I wrote about FF), not to developers (I hope you’d agree that it would be extremely irresponsible from me if I named him (he has his small business in town).

            Now, as to developers, yes, there are some I could name, but I am a bit tired of having court cases with Dublin property magnates like the one a decade ago – I trust you’ll find that approach reasonable (even though he had lost that one, which should not have surprised him given he did not have a proper accounting system in his impressive portfolio of properties in Dublin – and this is a bank manager we are talking about in the context of accountancy).

            However, as far as corruption at the level land zoning and developers is concerned, some names had been named in the Mahon Tribunal report.

            Interesting and valuable comments of yours on planning, I’ll read them more thoroughly during the weekend.

            I think what we all need is a substantive debate, first and foremost in the media.

            Happy St. Patrick’s Day.

          • Sideshow Bob

            Many happy returns Grzegorz.

      • Grzegorz Kolodziej

        “There ain´t many capable players out there still with skin in the game,so to speak. This is a serious problem. The industry was decimated.”

        Yes I strongly agree. One has to make a distinction between builders (and subs), speculative capital and property portfolio owners. Their interests are not always the same, though it had been before the crash.

        Four letters which exacerbated the problem:

        N A M A.

    • Sideshow Bob

      I think I pointed out here to you that there are three semi-complete new town developments around Dublin before.

      Completing these three out would help as a starting point. They have infrastructure in already ( schools, rail stations, etc ) and were planned at a higher density they are Clongriffin, Adamstown and Pelletstown.

  4. EugeneN

    Ok. Get a windfall from Apple. This is exactly what we do.

    • Sideshow Bob

      Actually American Social Housing is part funded by Corporations that give money to Housing Associations in return for tax credits ( reductions) when they report their Corporate taxes.

  5. Sideshow Bob

    David McW.

    I would like to commend you on taking this topic on and bringing a serious economic voice to the national debate on this. Really it is great to hear you put the case forward in clear and plain terms. It is a huge national issue with repercussions all round and I am glad to see it put out there strongly, as you have with the last couple of articles that you have produced for various publications in Ireland.

    You are correct that the State needs to lead on this and that State has the capacity to borrow money at the cheapest rate and cut out the middle man. Or guarantee loans to similar effect. I don´t think you are pricing in risk adequately above, but I take your general point and agree wholeheartly.

    That said, I have some very strong reservation about your figures and they seem to have been formulated on the back of an envelope so to speak. The presumptions too underlining them aren´t supported by history or fact. I can expand on this and I hope to do so later, if I get the chance.

    Economists in general,I feel, like yourself or Constantine Gurdgiev, commit the mistake of treating Construction and Property economics with the Laws ( or Principles or Rules of Thumb or what have you ) of general Economics, and herein lies a major mistake. The likes of you guys are in a very good position due to your training to see the general trend to identify bubbles and overheating in a market and understand many of the fundamentals but if I may be critical you fall down when you get into specifics. This is understandable, it´s complicated and beyond the scope of your Education and knowledge.

    What is involved with Property and Construction Economics is quite different to regular Economics, particular as applied to regular commerce.

    Examples of that difference include price equilibrium, the role of sentiment in price making, other irrational choices regarding selling and valuations, the fact that you are selling individual products with no highly variable end of use dates which are created by bespoke project work and not repeated standard operations (say like cars, or phones, milk)and these projects have a lot of outcome uncertainty, uncertainty around Planning Permission (PP), time limits on PPs, lag time for production after PP, duration of production itself, cost inflation across that total project time or even a part there of (this is a huge element), credit funded not cash flow funding, project based vs operational based work, risk transfer pricing, changing land prices and other legal and planning minutiae can affect cost too and can be unforeseen at times.

    Also, how a booming Construction and Property sector affects the General Economy dosen´t seem to be well understood or even to have been well studied by Economists. This is clear from your calculations here above too. I think the Irish experience 1995-now is also testament to this.

    But back to my starting point I am very glad that you are tackling this issue, regardless of any reservations!

  6. Grzegorz Kolodziej

    David McWilliams claims in his article that “it was the free market, not the State, that built ghost estates”.

    First of all, the pace of credit expansion accelerated sharply in the years preceding the crisis because of the low interest rates, and these were imposed by ECB.

    Secondly, David writes about private banks blowing their balance sheets; however, the Irish Central Bank had not issued any directives to the Financial Regulator that would have indicated that their business was being conducted in a way that was contrary to overall Central Bank policy aims; furthermore, a report by the Oireachtas Public Accounts Committee said that a proper analysis of loan books of the banks was not done.

    Thirdly, while I think that out of two bad options, building social houses would be a far better idea than rent controls (for if

    a) there is a maximum price set, this did not even work in totalitarian states, let alone in a free country like Ireland; if for a change

    b) if rents are linked to inflation – this is an idea which works well in Germany, but in Ireland it would simply FREEZE the ridiculously high rents (which are on average twice as high as in Germany, which country has far better infrastructure – Ireland was so rich and had so much credit that Fianna Fáil could have built the best infrastructure in the world – I have to say I have some beef with them for that negligence), making it similar to the upwards-only rent reviews for businesses; FF neighbour ex-TD told me in our conversation that my criticism in unfair because they had built fine motorways instead, but did they really?).

    And of course David’s idea that

    “How much annual rent would you have to charge on these State houses to cover this interest rate cost?
    The actual figure would be €760 per house per year. Not per month, per year. This would be affordable housing, wouldn’t it?”

    would be like manna from heaven, but I see one problem:

    the investment in social housing would mean that w h i l e the benefits of increased supply would be felt IN THE DISTANT FUTURE (bearing in mind the time which takes them to connect TWO Luas lines – Warsaw for example has FORTY NINE + METRO), the cost of building those houses would be largely transffered onto renters and first time buyers NOW; besides, because the Irish social housing/rent allowance system is so random, you will end up with social housing beneficiaries living in nice houses paying low rents, this being financed by the working poor, the girls in Centra, the interns, the hotel workers, etc. – all of those who are not eligible for rent allowance or social housing – now, you cannot think of much more unfair Ireland for the centenary.

    Last but not least, developers supported by NAMA pay only 2.5pc for funding, while those not supported by NAMA have to compete with them in terms of their cost of funding at 14-15pc. Now, how is that a free market?

    All in all, David’s reasoning in that area reminds me of the reasoning of Prof. Rodgers in that exchange.

    SUBSTITUTE “Obamacare” for “social housing” and you’ll have David and me (me being Matthew) on social housing, except of course that David is far more eloquent, knowledgeable and infinitely better looking than Prof. Bill Rodgers.

    P.S. Finally Minister Noonan did something reasonable (with developers and NAMA).

  7. ‘The key thing to appreciate is that the market acting alone can’t provide decent housing at decent prices for our country.’

    The key thing to appreciate is that there is no such thing, anymore, as a free market. There is so much regulation, zoning, at so many levels that I personally wonder that anyone thinks it is worth the years of hassle to go through to get the requisite approvals. From concept to production takes so long that the market conditions or economic conditions will have completely changed to the point that the project will make no sense as it might previously have done. Each piece of government regulation adds to the cost.

    In the event of any success it has to be at a price level so high that it is not affordable to the average buyer.

  8. ‘Rightly or wrongly, fixing the housing problem will take massive government intervention.’

    Massive government and central banking intervention caused the problems in the first place. Only a confirmed opinion that the state knows best would think otherwise. You David need to go home and be under the dictates of your parents for your life to find out what you would have succeeded at or not. Only they would know best thing for you to do to be a success.

    Doing more of what caused the problem is insanity. Government is not the mother hen that provides all the remedies for mankind. Quite the contrary.

    • EugeneN

      It was lack of government over sight and low interest rates (effectively also lack of over sight) that allowed the free market to cause the problem. Which it duly did with over lending, over borrowing, over building and over financialisation. Lack of regulation may be governments fault but it isn’t big government.

      • Where did the low interest rates and loads of credit come from.
        Central bank policy.
        All the plethora of rules and regs add to the cost of the production of housing and to the relative shortage of supply. Hence the high prices for land and building costs

    • Deco

      You are correct. State intervention is at the root of the problem. State policy, is designed so as to save the banks, by bottlenecking the housing market. Everybody in the state system needs to state gamble on the banking sector to suceed. Otherwise there will be less money in the state system for beneficiaries of state position and privelege.

      The insiders in the state system, also need to sttae to suceed because it is a “moral” bet that the state is the ultimate moral authority. And that means that the state is always justified and vindicated.

      And, so we have the problem facing people working in the economy, ( who might even be in the state system themselves, but are in the lwoer ranks ) who are being undermined by this.

      State policy wants to reflate the asset bubble to the point of enabling an exit from the bank system.

      It is all about Ireland’s biggest bank. Ireland’s most scandal ridden, unaccountable, too-big-too-fail bank. The second spoiled child of the nation – after the state system itself. With loads of well connected directors and former directors connected to EU policy making and the FG party.

      Where is the line from Yeats, about Ireland as a sow that eats her own farrow ?

      Well, that is gombeenism. It all goes back to what David called “Insiders and outsiders”. One of the effects of the crash was the political implications. And the outsiders, believe it or not actually got even weaker as a result of the train wreck that was caused by the insiders.

      It is unbelieveable that this is a political effect of what happened. But it is true. It reminds me of the manner in which a certain catergory in Irish society survived the Famine, and then proceeded to cause as much emigration as possible for the next 50 years, plus the Dublin lockout, and the Civil War (as a means of repression of the more incendiary elements in the War od Independence).

      We have met the problem, and it is within us. Greed within us. This is no free market economy. And this is no free thinking society either. There is simply too much control. Too much monopoly or duopoly thinking.

      And that is a great curse on our society. Because we can be a powerfully creative, free thinking society. Instead we are controlled.

      What bothers me is the effect on the people. The Atlantic counties are dying, and they have taditionally provided an oversized proportion of cultural innovation. The worker bees in the Dublin area are all squeezed to the pin of their collars, and are becomming more negative and slef-destructive rather than destructive of the system that controls them. We are simply running out of ideas. Running out of fresh thinking.

      We are running out of the spirit of fresh thinking. We need to get serious, because our society is in a deep crisis. The GDP statistics (as Constantin reminds us) are a mirage that is irrelevant to most people. The real measure of economic progress is the primary domestic (work income led) demand. And that is deliberately overloaded with the banking bailout, and the costs of massive state expansion.

      And we are now about to see the state pose itself as the solution of the problem that the state has caused. In fact that is what the political class are promising.

      By the way, does anybody think that there will not be pressure on wages in Ireland’s competive sector, as a result of rent pressure ?

      It is very hard convince workers to continue living in Dublin, paying ridiculous levels of taxation, whilst encountering Luas strikes, and drunk-ridden A&E units, for an indefinite period. The sums are no longer stacking up for Irish people.

      All those jobs in high tech and the only people who will take them will be those who intend to stay here 36 months max. After which they will bring their high tech skills elsewhere.

      Banking policy, and the deliberate state sanctioned bottlenecking of the housing supply are going to increasingly be a problem for employers.

      Some of them might relocate to the provinces (thereby solving the problme). Or some of them might relocate to other countries.

      I reckon when the IDA start demanding multistorey development in Dublin to the annoyance of the gombeens in the local authorities, that then we will see housing and rents become more afforrable.

      • “And we are now about to see the state pose itself as the solution of the problem that the state has caused. In fact that is what the political class are promising.”

        Exactly, Deco.

  9. ‘It will be done via government borrowing and that government borrowing has to be ringfenced explicitly to build houses.’

    So more debt is the solution. Well, well, how stupid have we become. Wealth is gained by getting into debt. More debt the better. Ludicrous.

    Let us look at the debt. Where does it come from.
    It comes from borrowing in order to get today what you ordinarily would not have until further in the future. Thus debt mortgages tomorrows income for today’s gratification.

    Originally money was coin. Coin carries no debt and charges no interest. It has no counter party risk. There are no other parties.
    Current central bank money, conjured into existance, is all debt. Our money is issued as a loan. Otherwise it does not exist. The money issued is borrowed by some and lent by others. What is lent out did not exist before this action. If the debt is redeemed the money disappears again.
    This is not so with coin. The coin can be loaned by one and borrowed by another. It exists. It relies upon no counterparty risk to maintain its value as a medium of exchange or store of value.

    Government does not need to borrow to conjure money into existence. It can issue its own money as a sovereign state. This money does not need to be borrowed from a central bank so there is no loan and no interest charged. Thus at the stroke of a pen the fiat currency from central bankers can be replaced by money issued by Treasury. This replaces debt based money with free money.

    Why would we not do this David?
    It used to be done this way in Canada. The WW11 war effort was financed this way and the building of the massive St. Lawrence Seaway too.

    A few houses could be built this way too. What prevents this happening, David?


    So let’s crunch the numbers;

    Per Unit: Amount:
    Site Cost € 50,000
    Build Cost @ €100 psf, Size Average 1,100 €110,000
    Roads & Infrastructure € 15,000
    Utility Connections € 2,000
    Legal Fees on Acquisition and Disposal, Marketing, Estate Agency Fees. € 6,000
    Architects, Quantity Surveyors, Consultants, Homebond and Stamp Duty. € 2,500
    Part V Contributions € 5,000
    Council Levies € 10,000
    Cost of Finance € 7,500
    Total Costs €208,000
    Sale Price €236,080
    VAT @ 13.5% € 28,080
    Net Sales €208,000

    If the developer was a not-for-profit organisation he could sell houses at €236k to break even. However, the simple reality is developers are looking for minimum returns in the region of 15-20% of net sales. Any figure less than this will raise concerns as to whether the risk of completing a development justifies the expected return.

    A median return of 17.5% on net sales would mean a developer would look for a profit of €36,400 per unit, with VAT at 13.5% this would add an additional €41,400 per unit meaning a developer would be very reluctant to commence a new construction project in Newbridge if he did not believe a new three bedroom semi-detached would attract a price of €277,500 at the initial launch.

    As you move inwards towards Dublin site acquisition prices increase so that by the time you hit Naas, Bray or Swords prices per site will range between €75k-€100k this increases to between €125k-€175k per site in locations such as Rathfarnham, Tempelogue, Glasnevin etc. The affect this has on prices is that a developer will need to sell a three bed semi at €385K to break even or €450k to achieve his target return.

    The majority of new builds are purchased by first time buyers. Under the new Central Bank regulations in order for a first time buyer to acquire a new three bedroom semi-detached house in Tempelogue they will require a deposit of 10% of €220k (€22k) + 20% of the balance of €230k (€46k) a total deposit of €68k. This will leave a funding requirement of €382k divided by 3.5 times annual income meaning a first time couple between them would need to be earning circa €110k or €55k each in order to be considered for loan approval.

    Written by Rory McEntee

    Listen live to Rory McEntee’s interview on RTE radio

    Comments are closed.

    December 2015
    October 2015
    September 2015
    April 2015
    February 2014
    July 2013
    March 2013

    • Sorry about the tail on the above.
      It seems the average buyer does not earn a family income of 110,000 Euro.
      First time buyers will have to settle for older homes and/or lesser accommodation even at near zero interest rates. It is usually the case.

    • EugeneN

      Are you saying that all of those costs are per house? I doubt it. And council levies would probably not apply to council housing. Most of those taxes could be removed, reduced or amortised.

      • Sideshow Bob


        Tony´s figures are consistent with what the industry is producing, if I had any criticism it is that they are not likely to give the lowest ones, but the numbers are of that order. One thing to note is that the Government take in levies and taxes is a huge proportion of any spend, so Irish people when they buy houses in the future be forced to borrow once again to fund current government expenditure, just as they did in the past.

        Social housing usually costs more, despite a lower standard of finish and cheaper site costs. I am not sure entirely why, but developers don´t like to engage with it. Possibly because of uncertainty, unfair risk sharing and un-weildly forms of government contract or all three but the result is a strong history non-competitive tendering, resulting in high costs. Ballymun (Version 2.0) would be the classic example of that. Came in at twice or three times the budget despite the widespread use of fixed price tendering.

    • joebrolly

      I agree the SCS on their website quote the cost of building a 1400 sq ft house of €246,000

      I hope McWilliams does not rely on his mates for the rest of his economic data


    The Republican Party says it can fix who their candidate will be. The Primaries do not matter.
    Democracy in the US is dead. It is pretty dead everywhere. We are ruled by cabals and autocrats.

    If you get another chance vote for other than the mainline party. Pick a devoted democrat (not the party in the us).

    DDI would be my choice. Get yourself restored ideals such as referendum, initiative and recall. Return to constitutional government. Be involved.

    Remember, the best government is the least government. A good start would be to accept the fact that government and money cabals have robbed us all. It is time to be rid of them. Asking and expecting a government to solve a housing problem is aiding and abetting the enemy. Treason in any other times.

    • McCawber

      How could the Replublicans “fix” who is going to be their nominee.
      They would be treading on very dangerous ground. The US is an armed camp.
      It’s the one place a revolution would be possible.
      And for the first time in my life I get why US citizens want to keep their arms.


        “To make sure that Ron Paul didn’t qualify, the Romney campaign changed the threshold to require demonstrated proof of support from the majority of the delegations from eight states.

        The Romney campaign went even farther and changed the rules to prevent even the counting of delegate votes cast for candidates who didn’t meet the eight-state threshold. That unfairness threw out the votes earned by all candidates except Romney. This caused a bitter commotion on the convention floor in Tampa and hurt Romney in the November election.”

        I agree, that in the current climate, the US backlash, from those deprived, would be extreme. Martial law is a possibility between now and November!!


        “Beware the ‘Big Steal,’” Stone warned. “The leaders of the GOP establishment plan to steal the nomination from Trump and to thwart the popular will, and they don’t care if they lose. Trump threatens all the establishment GOP leaders’ cozy deals. He’s a threat to the lobbying class. He’s a threat to the consultant class. He’s a threat to the globalists.”

        • Deco

          Clinton II might be under investigation from the FBI before the convention occurs. In fact, controversy is unavoidable. Multiple incidents have proven that she is totally inadequate for great responsibility.

          Somebody who has been quiet for some time, but who could cause serious problems for Ireland Inc. is California Governor Jerry Brown.

          If Clinton gets into trouble, what if the Governor of the largest US state, gets asked to be a compromise candidate with Sanders as VP ?

          Or alternatively, Sanders might want him for VP. Against a backdrop of controversy, having the Governor of California as VP candidate might provide some legitimacy.

  12. McCawber

    Getting back to the article.
    The numbers may not exactly add up but the basic approach is right and even a bad plan is better than no plan.
    The main difficulty is to get the right people to plan organise manage such a project.
    Definitely not NAMA.

  13. mike flannelly

    ” Our new government can borrow for 30 years today at 0.7pc per annum. ”

    Jesus Christ.

    There are 1700 families on front of Irish courts for reposessions.

    Most of these people have been mentally tortured by the failed pillar bankers that overvalued debt by 900% for landbanks, 200% for apartments and 100% for houses.

    Noonan and Kenny failed these people for five years

    We are told that there were more than 1000 suicides from not restructuring false value debt.

    At the age of 52 I have never heard of anyone complain of house prices.


    They are devasted at not being allowed restructure their false value debt by our failed bankers. Interest only or industry best practice split mortgages for grossly overvalued debt ratios.

    The .7% @ 30 yrs must be directed to families with missold mortgages that were multiples of best practice debt ratios.

    We are in a ” 0% ” for debt at the moment.

    Banks should buy 25 yr fixed @ 1%.

    Sell @ 2%.

    Win Win.

    100% profit for banks and their GROSSLY OVERVALUED SKILLSET.

    A sustainable long term REAL VALUE DEBT solution for families to buy houses in their late 20′s and save for retirement in their mid 50″s

    Couples that earn the average wage would be able to afford a 250000 mortgage.

    We do need social housing for people below the average wage.

    All housing is NOT the same.

    The more you earn, the better location and quality of housing plus housing debt you can afford.


    • EugeneN


      1) allowing people who haven’t paid mortgage repayments off the hook.
      2) increasing credit again.

      Unless you build houses that will just cause another bubble.

    • oe1

      Why has there not been a bailout for the many people in negative equity. Only a small proportion of them had any formal economics understanding and many were trying to do the right thing.

      Currently banks are allowed get a bail out for making calamitous financial mistakes but well intentioned property purchasers and investors who do not have a financial education have had zero bailout.The only response to this issue has been lip service from politicians that banks do the right thing and pass on interest rate cuts.

      There should be a law that any property in negative equity automatically qualifies for a discounted rate. A fair proposal is to refinance these mortgages at something like 3% until the negative equity is gone. This will prevent speculative lending practices and increase deposit ratios into the future

      A just society would seek to put this right and then discuss the very needful plight of the masses on the social housing list.

      • EugeneN

        Many in negative equity are on trackers – far less than 3%. And there’s been very few repossessions. In fact that’s part of the problem for people stuck in rental accomodation.

        • mike flannelly

          The Irish debt problem was that intelligent professional bankers unbelievably ignored the basic principles of banking when grossly overvaluing debt products and paying themselves up front bonus payments as a % of the unsustainable debt ratios. These high debt ratio mortgage products have destroyed the finances of bank customers that expected best practice banking from state promoted banks.
          The most suitable solution for the bank customer that would limit further financial damage would be to restructure the high ratio debt with industry best practice split mortgage restructures.
          Not reposessions that would crystalize losses for customers with high debt ratio mortgage products.

        • oe1

          Of course there are many borrowers on trackers but equally many on variable mortgages between 4 and 5 %, that are higher than necessary because they are subsiding the tracker mortgages. If these negative equity mortgages were 3% there would be much greater chance of paying down the capital. Might even save the banks money!

  14. mike flannelly

    My Opinions.

    Im sure school teachers Noonan and Kenny’s oponions are different.

  15. mike flannelly


  16. survivalist

    No I don’t buy it. The plan outlined in this article may well represent the best form of submission to the state and private /state alliance in the particular context, but it is still an unwarranted submission to either or.

    It seems, at lease to me, that the false dialectic is no longer persuasive nor is it as effective as it once was. Neither private business nor the state managed communes are acceptable masters.

    The synthesis of the public and the private, that diabolical partnership must be recognised as an intolerable arrangement and resisted. Ben there, Dunne that, bought the Taoiseach :)

    We want independence, sovereignty and the freedom and the capacity to live unfettered by the state (especially political parties) as the corporate lobbied dictate that it is.

    If a person needs to build a house why is it that he cannot? Is this the measure of all the years of progress?

    Is the cost too high, his wages too low? Are the regulations to restrictive? Or previously were they not restrictive enough?
    Is there not enough land, or the available land sold? Are there too many houses already there, or too few houses in the unspoilt area?

    All of these justifications are offered to support the disenfranchisement of the people and not much more besides. But who has assumed the right to decide the appropriation of the land, and how do they maintain this seizure?

    It is past time to reject as our lot as either membership in the welfare’d herd or evolution into the liberal’d dupe.

  17. McCawber

    The size (within reason) of a countries’ black market is a measure of it’s freedom.

  18. Pat Flannery

    When David turns from kissing up to the Brits while excoriating the Germans and instead concentrates on finding Irish solutions to Irish problems I often find myself in agreement with him, as in this case.

    It is true that it will take massive government intervention to solve the housing crisis, just as it took massive government intervention to save the banks and thus our international credit rating, which may turn out to be our salvation. Access to the bond markets is the economic system we’ve got and within which we must work. If the Irish have done anything smart since the crash of 2008 it is in recognizing one fundamental reality: we don’t make the rules.

    How the new Irish political grouping will solve the water issue will determine how Ireland will pay for its infrastructure over the coming decades. If it goes back to financing everything out of the General Fund there will be little or no progress on the housing issue because as David points out the preloaded infrastructure levies will act as a block on all new housing projects.

    If Ireland is smart it will cash in on its massive sacrifice in bailing out the banks by going to the international bond markets and locking in as much as possible of the cheap money now on offer for revenue-generating capital projects. That is how successful countries around the world build their infrastructure. Who are we to say they are wrong?

    I therefore agree with David’s Jack Welch-learned three rules, especially the first: define your reality. De Valera tried to invent an isolationist Catholic Utopia and condemned the Irish people to generations of misery. Fidel Castro did something similar with Cuba and communism. Remember, we do not make the rules. We use them.

    • StephenKenny

      Absolutely agree. Borrowing cheap money to build a lot of houses in suitable places, would cut house prices, which would significantly cut most people’s overheads. Lower overheads means more disposable, which means consuming more retail and services.
      Property speculators would suffer, but there are too few to have any macro effect.

      • Pat Flannery

        Hi Stephen, the essence of securitization is finding revenue that has been legally pledged to paying off a well-defined debt. That is why securitization of exactly such debt came to overwhelm the mortgage industry worldwide.

        All that was needed was “bundling” which was new and thus unfortunately open to fraud. But that does not invalidate the process. The opportunities for “bundling fraud” have now been largely eliminated everywhere.

        If the next Irish Government can master the art of PUBLIC revenue securitization it can achieve wonderful things. The test will be the water fiasco. If we can create a revenue system that can be securitized into GOVERNMENT bonds, not utility corporate bonds, we will be on our way to creating an Ireland with a First World infrastructure, financed by the unlimited appetite of international markets for SOVEREIGN bonds.

        A Sovereign Government can borrow cheaper than any corporation, public or private. I hope that fact becomes better understood in Ireland over the next few formative months. The present Irish trend towards privatization of everything is an economic death-trap.

        I am glad that David McWilliams seems to be taking a lead on this.

        • Sideshow Bob

          About 13mins into this video from a year ago Yannis Varoufakis ( here with Joe Stiglitz ) outlines a way to fund investment using The European Investment Bank as an example as to how EU institutions could redeploy idle savings to be used to fund infrastructure or public works across Europe…

          • Pat Flannery

            Sideshowbob: the more I watch Ireland’s painful attempts at self-government the more I become convinced that the Irish will never overcome their inbred tribalism. The instinct for tribal loyalty such as to Fianna Fail and Fine Gael is more powerful than any instinct for good government.

            I think Yanis Varoufakis has reached the same conclusion with regard to his own country, Greece. I think that is why he is looking to EU institutions such as the European Investment Bank (EIB) for solutions.

            In this video he advocates a large-scale investment-led recovery for Europe. He points out that the much overlooked EIB has for many years been very successful in issuing its own bonds and can thereby act as a key EU financial institution.

            Yanis proposes that the ECB start purchasing these EIB bonds in place of its present policy of massive QE to private banks which in turn goes exclusively to their private customers. He even describes this approach as an FDR-like “New Deal” for Europe, which is exactly what it would be.

            He correctly points out that neither Ireland nor Greece, nor any other peripheral country, can achieve this level of infrastructure financing on their own, just as no individual American state could have done it in the 1930s. This recognition will eventually lead to more political integration, which is necessary to escape the straitjacket of national tribalism such as the Fianna Fail/Fine Gael vice grip Ireland is currently experiencing.

            Thank for your posting this video, it is a keeper.

        • Truthist

          No more borrowing please.
          Just repossess the ill-gotten assets from the corrupt, & I.A.O. ; Improvise, Adapt, & Overcome.
          If u were Robinson Crusoe stuck on a desert Island, would u be waiting for loans to come from Stiglitz [ "I just want to stop the hurt" ] bank loan “death-trap” ?
          Or would u be prepared to grab from them mean nasty dudes who wrongfully took from u & then u improvising, adapting, & overcoming with “Irish Solution to Irish Problem” [ But, foreign benign smart help is welcome ] of “no proper housing for the poor of its nation” ?

    • Truthist

      De Velera was correct in that a country should be self-sufficient.
      It is just that he & the bulk of the people were as good as they should have been at doing it.
      But, they were much much better at helping the country to be self-sufficient than the shower who took over since his tenure & continuing.

      Catholic means all encompassing ;
      So isolationist would be a contradiction in terms.
      At least among its own territory.
      But, yes, any well-run country should be able to close / isolate itself off from foreign interference.
      If we could do this,- then we could successfully “burn the bondholders” as David implores.
      Think how Malaysia closed itself off from George Soros attack on it during the South East Asian Financial Crisis of the 1990′s, & transformed itself into a highly successful economy & prosperous society.
      But, there is a price to pay firstly before becoming self-sufficient ;
      Country would need to become more moral & smart.
      And this would be too much a price to pay for the decadent EU-philes, & the corrupted underclass that naturally follow their upper classes.
      Ever care to investigate the shenanigans of the members of the European Court of Justice or whatever mumbo-jumbo it is called, & tally it with the EU-phile directives for Irish State to change its Constitution in an increasingly immoral direction ?
      U would be in for a shocker.
      And, it should naturally lead to investigation of Who is Who of the Irish Institutional State.
      Male & Female ;
      Leave no stone un-turned.
      The audit is long overdue.
      Would bring clarity as to why Irish State succumbed to so many retrograde “Agreements” in the “Non-Isolationist” / International arena.

      At least De Velera had a vision ;
      A publicly state vision too.

      Later Taoisigh have hidden agendas to please the Internationalists ;
      And, it is to Irish Nation’s cost.
      And, foreign innocent people’s cost too.

      De Velera protected the country from being annihalated in WW 2 as Churchill, or rather Victor Rothschild, wished to happen to the Irish Nation were Irish State to allow its Ports for starters to be used by the Allies.
      The Allies for sure forced / tricked Germany into war.
      Katyn Forrest Massacre of the Polish Elite Officers was not committed by the Germans.
      It was done by the Bolsheviks.
      And, it was done to overcome Poland for USSR & incriminate Germany & force Germany into war.
      Hitler also most probably a Tavistock agent ; Programmed or Willful.
      His Irish sister in-law indicated this to be so.

      If u need to consider the current direct consequences of massacre / genocide,= examine the Iraq Genocide [ Not a War ] committed by basically the same Allies [ bar Russia ], & with the involvement of Irish State courtesy of Sir Garret Fitzgerald, Sir Dooge, Sir Suds, Wee Willie O’Dee, Dame Enda Kenny, Fat Dick Roche, Alan-Contemptuous of ancient Irish-Shatter, Simon-Bilderburger-Coveney, & all them nasty Senior Civil Servants inter alia.
      Nearly 2 million dead ;
      Includes innocent Iraqi soldiers [ men & women ], & civilians [ men, women, & children ].
      Majority of NATO troops passing through Shannon are guilty of the most appalling crimes.
      And, they return to west as clandestine recidivist sociopaths.
      And, No the invasion by NATO on Iraq was not about Oil.
      Of course, u always knew that it had nothing to do with Weapons of Mass Destruction.

      Ireland [ Irish State + North of Ireland ] should be strictly neutral country.
      If Scotland does become independent, it should become strictly neutral too.

      No more Warmonering, & Wars, & Genocides please

      • Truthist

        Typo ;

        De Velera was correct in that a country should be self-sufficient.
        It is just that he & the bulk of the people were NOT as good as they should have been at doing it.

  19. Bamboo

    Quite an irritating article I must say, David. As if it is that simple.

    • EugeneN

      What’s your actual counter argument?

    • McCawber

      We await your solution/s.

      • Truthist

        Never forget ;
        ‘It is all about control !”

        And, they have u by the Liathroidi now.

        Loads of excessive regulations thwart ur room to manouvre.

        If u build urself a corrugated shed & were also military organised to have absolutely minimum negative impact on the environment,- the Apparatus would still send in the Garda-Landlord Shock-Troops [ Hey, come to think of it,- the Apparatus & the GLTS are the one & the same ]

        Anyways,- they would smash up ur little home, & beat u black & blue, & insult u, & prosecute u.

        • McCawber

          +ve feedback and you get chaos.
          -ve feedback and you get stability.
          The black economy is -ve feedback.
          Printing (too much) money (and we have) is +ve feedback.
          Debt is like printing money but investing it in infrastructure (eg building houses [in the right places and where and when needed]) reduces the +ve feedback significantly.
          It is up to the citizens to give our politicians a very clear message that we do not want a cashless society.
          Do you think the citizens know that this is the single biggest threat to their freedom.

          • EugeneN

            If Keynsian economics were applied correctly it would be -ve.

          • Truthist

            I am lost about what u mean when u speak of :
            +ve feedback
            =ve feedback.

            But,- I agree with what u propose.

            Homes must be provided as Deco propounds ;
            Apartments in multiple storey buildings.

            I suggest that talented persons writing to this blog or just readers of it should presently devise their own completed models for such housing.
            We need to be more than just opinionators.

            I will try myself ;
            Although, it would be very difficult for me to execute this project as I would normally do given that I am presently engaged in pursuing corruption involving the most “precious” office in the Irish State.

            Ref. ur question
            Is “Cashless Society” the single biggest Threat to the Citizen’s Freedom

            No ; Not specifically.
            It is just 1 of extremely sinister further encroachments in the lives of the citizens.
            Please accept that I am not denigrating its seriousness versus the level that u McCawber put it to be.
            Rather, I am stating that it is not alone fellow at its level of threat.

            Anyway,- we are already NOT free ;
            We exist in an “Open” Prison.
            But, most citizens & visitors do not realise it.

            Beware of the Garda-Landlord Shock-Troops [ GLST ] 8-)

  20. Mike Lucey

    Been thinking about David’s suggestions / proposals. I’m not in agreement with everything but overall it makes sense particularly making cheap finance available for house building.

    A couple of points that might be worth considering!

    I mentioned in a previous post (in another thread) that it might make sense to give a serious look at setting up Housing Co-Ops financed by Credit Unions.

    I think there could be merit in having this type of self-help house building developed in this country which would, to a certain extent, bring back the irish ‘meitheal’ mentality. This may sound like a fuzzy ideal but its one that worked for generations past. Both my grandparents houses were built by meitheals.

    This approach leaves out the two nasty elements that screwed things up the last time, banks and speculators.

    Not placing blame on Government for the ‘ghosts estates’ is not fully the case. It should be remembered that Local Government Planning Authorities granted permissions for these estates with little or no due diligence. From what I saw (at the time) they were far more interested in the planning fees / contributions for their big spends on not needed extravagances.

    We still have a building industry, skilled workers, managers and designers that are more than willing to jump in and get things done even if it involves booking a Ryanair flight! What they don’t want is to find themselves in a dark hole after a building frenzy controlled by banks and speculators. Once bitten, twice shy!

    • “” The word meitheal describes the old Irish tradition where people in rural communities gathered together on a neighbour’s farm to help save the hay or some other crop. Each person would help their neighbour who would in turn reciprocate. They acted as a team and everybody benefited in some way. This built up strong friendships and respect among those involved in the meitheal. GIY meitheals are small groups of 6-10 people who meet up approximately monthly to carry out some growing-related task in one of the meitheal member’s garden”"

      It sounds similar to the traditional “barnraising” as prairie farm folk came together to help each other. Socialism that works!!!

    • Sideshow Bob

      You made some good points Mike. I saw the earlier post before but I didn´t get to reply.

      The Dutch model of using a widespread interlinked and ultimately self supporting network of Housing Associations to provide social and affordable housing about 30-40% of all housing stock is a good target to aim for. The financing model of the system is stronger and more sophisticated than what you are suggesting with the Co-op / Credit Union approach.

      There are a few other other points are are instructive about the Dutch situation; one is that the percentage of rented social and affordable accommodation is so high and of such good quality that the population living in it are not stigmatized in any way by the experience and also they form a large constituency within the Dutch political system so no political party will mess seriously with that constituency and the quality or standard of social housing provision. Also, and very critically, people who design, build and run the housing associations are frequently also tenants who dwell in the same, or similar units, which is a big difference from Ireland where social housing was seen as a sort of hand-out from the rich to the poor, with those calling the shots, all well-off civil servants from middle to upper class backgrounds were not from such places, probably did not have friends from such places nor did they ever have to live in them. This difference in lived experience was critical in effective provision and why places like the center of Amsterdam which has more than 50% social housing is a delight to be in.

      I mean would you fancy a weekend away in Bally-er?

      There are other points of interest too, but I am getting a bit tired!

  21. Mike Lucey

    Yes indeed Tony, Socialism that works, instead of folks sitting on their arse expecting the ‘government’ to mollycoddle them from cradle to grave.

  22. Stockmarket rebouding in the US – up 10% over the past 5 weeks.

    So much for the Great Impending Crash.

  23. mike flannelly



    1) allowing people who haven’t paid mortgage repayments off the hook.
    2) increasing credit again.

    Unless you build houses that will just cause another bubble.

    1) An industry best practice split mortgage restructure is defining the ratio of debt that is affordable for a mortgage with very high debt to income or debt to rent ratios.

    It is not letting anyone off the hook. It is where you warehouse the false value portion of debt that made the mortgage unaffordable in the first place.
    Today for a home we are told that 3.5 times joint incomes is affordable.

    Warehouse the portion of debt above 3.5 times joint incomes. This makes the mortgage affordable again.

    2) I did not say to increase the ratio of debt to income.

    3.5 times the joint national average wage ( 3.5 × 70000 = 245000 )

    245,000 @ 2% for 25 yrs = 1038 e/mth

    Just about room for property tax and house insurance and still remain below the 30% of net income for shelter needs.

    Social housing is needed for couples living on incomes below the national average wage and in some locations (Dublin) couples living on the national average wage.

    David is attempting to marry the ZERO INTEREST money with our housing crisis.

    “AT LAST ”

    THE ZERO INTEREST MONEY should also be married to our mortgage arrears crisis where the DEBT to income or rent ratios is too high.

    Restructure debt to REAL VALUE DEBT.

    REAL VALUE DEBT has NOTHING to do with free markets. It is an affordable portion/ratio of your income or rent.

    For investment mortgages the REAL VALUE DEBT is that mortgage payments be 77% of rent or that rent be 130% of mortgage payments. This is standard banking rules for investment mortgages.

    The investment mortgages sold between 2006 to 2010 had mortgages that were 140% of rents instead of 77%.

    You cant talk about a rental crisis or housing crisis without


    The solution is always industry best practice split mortgage restructures.

  24. mike flannelly

    ” When you think about it, most builders will tell you that 70pc of the cost of building is wages, so there would be a net injection of €3.7bn into the economy in terms of wages. ”

    I dont think that 70% of the cost of building is wages.

    I dont think that you will build 50,000 houses of 1400 sq ft for 110,000e a piece.

    Best of luck David if he can. That would be a true patriot achievement if he could pull it off.

    What would Tom Parlon think of Davids construction maths ?

    David needs to go back to his builder buddy and write all the labour and material costs down on a spread sheet.

    Then print it for us all to examine.

    Otherwise the figures dont stack up.

    He is 100% right that we need to sort out housing issues with ZERO interest.

    Plus mortgage arrears issues that have a huge mental health cost for the state also.

  25. redriversix

    Good article.

    However . i am still at a loss to understand how people still feel that the Government has a desire to provide Housing , social or otherwise.

    The first thing to be done is for people to accept and acknowledge that Governments , in our case , a right wing Government has no desire to assist those in need of Housing.

    The Americanization of the Irish Government & its policies is well under way.

    It is shockingly simple… If you make it , great , if you don’t , you will be cast aside , some people already have been.

    Government believes that everybody should fend for themselves.

    That’s fine if you are not paying taxes , Taxes which, a portion of , are supposed to contribute to public health and housing and to offer benefits in the event of losing a job or illness or in need of housing.

    Modular temporary housing was / is a good idea. But in twenty years time when thy resemble trailer parks in shitsville , north Dakota, people may ask “why did we not see this Americanization of our poor coming down the tracks” ?

    Taxes pay towards your welfare, when you need support in bad times. We will continue to pay taxes for this support , however supports will be taken from you or reduced, but your contributions wont.

    Governments do not care about you or your neighbor , they have no stake in your welfare , they do not suffer if you do.

    Their job is to get reelected , to look after themselves , to feather their nest , to sell off / privatize everything asap.

    Social services
    etc etc etc

    Acknowledge this..? then we can come with solutions or enact solutions already devised.

    If I am wrong ? all that will mean that those who did some research will be better educated and more prepared for tough times.

    It was a month ago yesterday that we had a General Election.Some say, we still do not have a Government, …well, you see…we do.Senior civil servants run the Country, with their advisers and think-tanks.

    We have the illusion of free elections because people don’t like the idea of unelected Civil servants running this or any Country.

    Do you really think the various political parties or T.Ds are having sleepless nights worrying about us ? , the Electorate ?

    Its about power baby !

    Many Countries and their people and resources are simply commodities to be traded on the Worlds Markets.

    Treat every euro as a prisoner , look after yourselves and your family.

    Paddys day pre and post piss up , Cheltenham , Kim Kardashian’s naked selfie, cute cats on you tube, The X factor…….

    These are the really important issues today.

    Gotta go…their is a video of Lions playing with a ball on facebook….

    Sempri fi

    Have a great day

    • Truthist

      Agree ;
      But, most of the Public / Civil Servants & Quasi-Servants [ Ref. Quangos ] are not genuinely interested in giving public service ; And this despite their handsome salaries & perks & conditions & expected pensions.

      • redriversix


        They just do their more no less

        No accountability.

        As long as they get paid.I am probably stating the obvious here..but this is the way it is and it will not change


        • Truthist

          Actually,- most of the decision-makers are handpicked for having sociopathic [ specifically psychotic ] character.
          I have this from a senior civil servant deep in the matrix of picking & training senior civil servants, & also deciding who gets the OK for the most important elected political office positions.
          The “Ability to say “No !” was one of his euphemistic descriptions for the necessary characteristic.

          And, even outside of the decision-makers u have the Nurse Ratchet types.

          Of course, there are excellent civil / public servants who are true & noble & competent irishmen / irishwomen.
          And, not forgetting those foreigners here as Irish public servants who are also true & noble & competent.
          Unfortunately, they are an becoming more a minority.
          One must be alert as for spotting them.
          They can sometimes go out of their way to help the citizen AND at risk to their career prospects.
          So, one must also protect them when acting on their good guidance.
          Ultimately, the Civil Service is an Intelligence Agency ;
          And, its members are Spies.
          U must be very careful in dealing with them.
          This is how it was when the Brits controlled us directly.
          And, this is how it is when our local betters are delegated to control us on behest of the E.U..

    • Deco

      Interesting line of thought there.

      The purpose of many media participants is to provide a level of distraction that effectively neutralizes the critical faculties of members of the audience.

      Classic example is sports TV.

      Please pass this around. Especially to the males.

      The determination of the FF party to build a second sports stadium, in the face of an economic crash is noteworthy.

      Imagine what 400 Million Euro could do in terms of residential construction !!!

      Of course – how stupid of me. That is the last thing that is required. Far more important is to invest the public’s money in infrastructure to dumb down the public.

  26. “”That this metamorphosis in the banking industry was made under the supervision of Washington’s political class and their market regulators best explains the establishment’s current deranged reaction to the prospect of either Senator Ted Cruz or Donald Trump becoming the next President. They must fear the consequences of one of these strong-willed outsiders appointing officials loyal to themselves, (and not to the current clique now in control of Washington’s financial and criminal investigating apparatus) to key positions in the Federal bureaucracy. Small wonder a number of supposedly “conservative” Republicans have publically professed a preference for Hillary Clinton as our next president rather than Donald Trump.”"–Mark Lundeen

    2008 deja vu

  27. [...] benefit everyone in the country except the banks and landlords, but they won't be implemented. With a few simple steps, State could provide social houses for So if you want to blame anyone for repeating unsustainable policies then blame the Government. [...]

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