Minister’s Speech at Taxation Institute

Here are the slides from a talk the Minister for Finance gave at the Irish Taxation Institute on Friday. Lots of useful material in it, most of which I agree with. Slide 11 is great. It actually says Iceland! (Less fun is the repetition of the de-listing argument as a serious point.)

64 thoughts on “Minister’s Speech at Taxation Institute”

  1. I saw .pdf and I hoped I would see the Irish state’s first beamer presentation. First this government’s policies cost us billions, now their design skills remind me of the Drumcondra tests. They have lost all moral authority.

  2. The fact that they haven’t used Beamer shows they prioritize substance over style. Good on them. Not sure this has any implications for their moral authority either way.

  3. Slide 16 is also illuminating. Top of the list of measures in the Finance Act 2010 to boost growth is the Car Scrappage Scheme! The majority of the rest are tax incentives.

  4. @Karl Whelan

    I think this implies no net increase in jobs created in 2010 (far from it as we all know – more jobs lost just yesterday) and 20,000 jobs created in 2011? That seems to me like throwing a cup of water at a house on fire.

    I fail to see how this government is addressing the unemployment problem other than encouraging people to leave the country. Sadly, it’s usually the best and brightest that leave but the Minister appears to be suggesting that our best and brightest will be setting up SME’s to help Ireland back on the path to recovery. I wonder how they will do that if they are not in the country and swearing never to return.

  5. The fact Beamer was not used highlights how, due to a lack of technical expertise (in LaTex or LyX/finance) the government has opted for the expensive option (Powerpoint/NAMA) rather than the considerably cheaper alternative (open source software/nationalisation).

  6. This week Taoiseach Brian Cowen was reported to have said that the Fianna Fáil organisation needed to be reformed during a passionate speech calling for “unity of purpose” in the party at a meeting of its national executive.

    Stephen Collins says in the IT today that John Gormley “was in a highly emotional state in the immediate aftermath of Sargent’s resignation.”
    Maybe the passion and emotion will some day move beyond tribal concerns.

    Slide 13: Net job creation of 20,000 next year, and 45,000 each year thereafter.

    Before the 2007 general election, FF launched a brochure (as distinct from a document) setting a target of 50,000 new jobs each year over a five-year period.

    I went to a press conference as I had a question for Micheál Martin: What proportion of the 50K related to the tradable goods and services sector seeing that in 2006 only 6,000 of 83,000 jobs created were in that sector.

    Martin didn’t know but blustered by claiming the cited data for 2006 was not correct. Cowen then intervened and said I was ignoring services exports which I wasn’t.

    Page 14: Improving competitiveness will spur exports – – Ireland is the only country in the euro area in which unit labour costs are falling – last year there was a 5¼% improvement in unit labour costs vis-àvis the euro area

    A politician will never be short of some statistic to bolster a case.

    Lenihan used a forecast from here:

    European Economic Forecast Autumn 2009

    But this forecast is very different from actual data here:


    ECB year to Q3 2009

    or here:

    OECD
    year to Q2 2009

    More interestingly is that the EC forecast report notes: “Evidence of strong labour hoarding compared to previous patterns is found for Finland, Austria, the Netherlands, and Germany. On the other hand, the adjustment in Spain, Ireland, and the Baltics is stronger than what historical patterns would suggest.”

    For example, Germany had 1.5 million workers in the public subsidised Kurzarbeit part-time work scheme, at one point in 2009 — so its unit labour costs rose higher than Ireland’s in 2009.

    Why confuse people with facts?

  7. Talking of Iceland, I’ve been doing a little highly unscientific polling on what people think the unemployment rate is there. Funny enough, not that many have come in close to the real figure of 6.7% (Q4 2009, Eurostat).

  8. The most incendiary point in the slides is that the €3bn fiscal contraction this year (and perhaps the €6.5bn contraction 2011-2014 frontloaded) is to come from”payroll costs must be contained”. Does thios not contradict Mr Cowen several weeks ago who claimed he was not minded to return to the Public Sector pay pool for further savings?

    Sure capital programs will be retrenched but bullet point 1 is payroll costs.

  9. YES Minister! Wall Street, The Mega-Financial Ferengi, The Cowboy Developer_Ferengi_Builders in the Galway Tent, The Cowboy Ferengi Bankers Shawnee, Fingers and co., and the BondHolders LOVE YOU.

    What Blind Biddy down the road thinks of you and yours is unprintable; and Joe and Joan citizen are settling in to a live of drudgery and slavery and are too exhausted, stressed out, and worried about the future of their offspring at the moment to say boo to a goose. And you and yours know it.

    You and yours were WRONG Minister: you placed interests of the rich, reckelss and powerful before the decent common interests of the ordinary citizens of this Republic, and you have raided the humble larders of the latter to fill the black hole created by the former. This is empirical, and these are the facts. This is political economy, and this used to be a republic, which by definition, give precedence to the interests of the citizenry over the kleptocracy; by your actions, you have reversed this logic and the basic principles on which both this state and your party were founded.

    GO.

  10. A car scrappage scheme is designed to squeeze capital out of the gullible who still have access to savings. As a fiscal measure, it could not be more stupid, encouraging the import of foreign cars and destroying others that could create jobs here for their repair. Not to mention the loss of native capital for a grant from the state!

    I am beyond despair!

  11. I just had to turn off Saturday View. Mary Hanafin was peddling the line yet again that Nama = credit flows. When Karl pointed out that at the Oireachtas Committee both the AIB and BOI CEO’s said it did not, instead of going back to Hanafin and force her to acknowledge that her point was obvious nonsense, Rachel English let Joan Burton in on a different point.
    This is why they get away it…….

  12. Slide 11 is one of the more disingenuous slides. Who pray tell was asking for statuatory pre-emptive takeovers? Maybe the labour party but I think that this is deliberate political watermuddying – again, for the n’th time : the hole in the banks balance sheet + the probable inability to raise funds in the capital market to the level that would de-zombiefy them = state supermajority ownership (aka nationalisation)
    Iceland- —– I despair. I really do. I really really do. Whoever wrote that slide is deeply mono-manically obsessive.

  13. @ DOD
    Wouldnt it be easier to rant on a street corner?
    Some one might offer you change!

    @ Sarah
    I think you hit the nail on the head with all spoken word media.
    It is easy to run out the clock. Perhaps interviewer are mindful of the fact that these people will be asked back in again in the future, so therefore it isnt responcable to ones interests to destroy an argument or a person making an argument?
    A form of relativism we dont need at the moment
    At least the VB doesnt let many off the hook

    Al

  14. @Al

    These are facts Al – based on readily available empirical evidence – with which fact, or facts, do you perchance disagree? Any substantive evidence to refute any of these facts Al? Challenge the validiy of any one of them! Ah go_on ….. even one?

    @Sarah Carey

    Yes I was listening in with Blind Biddy down the road. Biddy is absolutely apoplectic at Minister Hanafin’s spin on things – other than the few bob that Minister Hanafin raided from her Blind Pension – as in previous posts, I cannot reproduce her somewhat colourful language in an open blog such as this – but sure all will get the general drift.

    p.s. Biddy thinks Karl is cute! Now back to the rugby – humour Biddy is in at the mo – she could tog out at openside and take em all on!

  15. @ DOD

    “YES Minister! Wall Street, The Mega-Financial Ferengi, The Cowboy Developer_Ferengi_Builders in the Galway Tent, The Cowboy Ferengi Bankers Shawnee, Fingers and co., and the BondHolders LOVE YOU.”

    Facts indeed.
    Maybe if you get dressed before you turn to the computer.
    Now important match on now

    Al

  16. This week, the US FDIC, the federal deposit guarantee agency, said US lending growth in 2009, was the lowest since 1942.

    Most Irish official announcements are spin dominated; most politicians and media reporters are economic illiterates.

    So it’s easy to sell bs to the public.

    It’s not only a problem in Ireland and the IMF MD said recently that the advanced countries are fooling themselves on exports potential when all their aspirations are added together.

    Wouldn’t it have been wiser for the Irish political leadership to have acknowledged that after an out-of-control credit boom which brought the banking system to the brink of ruin but for a Sate guarantee, that lending was bound to be curtailed for some years rather than giving the impression that a banking system on a respirator would become vigorous lenders via NAMA?

  17. @Brian Lucey

    Look at slide 10
    This would imply nationalisation depending on the size of the NAMA discount
    but nationalisation might not be a good idea, given that nobody else has done it not the US, UK or anywhere else except of course the I place.

    Point about it being cheaper to call your broker and sell your stake rather than hire bankers, lawyers etc to peddle the story is factually correct.

    I read 10-11 as a strong message that nationalisation is on the way. Now we should be very afraid. It will take five years to unwind the banks and 10 years to unwind NAMA.

  18. “Point about it being cheaper to call your broker and sell your stake rather than hire bankers, lawyers etc to peddle the story is factually correct.

    Joe lawlor – any idea what selling a30% stake throughh your broker will do to the share price? I guess that was not thought through

  19. @Sarah
    Agreed re Rachel English. She had several opportunities to revert back to the minister on her misunderstandings but let her off the hook. Pull up your socks Rachel!

  20. @ Garo

    I was not talking about now but in the brave new world post clean up when the world will queue up to buy all the wonderful irish banking franchises.

    But to answer your question, if you tried to place 15% of BOI now the price woulld be close to zero.

  21. Surely one of the problems is we are so property focused through Nama that everything else has to take a back seat particularly if it might upset the Nama applecart.

    For recovery commercial and retail rents must drop but that will drop the property values and increase the Nama hit. Does the government care that retail businesses are going to the wall with high rents being a major factor? Yesterday it was Hughes & Hughes and they had been in business for over 20 years.

    @Michael Hennigan
    I agree with you, a bit of honesty about the position we are in might help the general public understand this is not some temporary little hic cup, everything has changed. 3 years ago the argument was Ireland was different and so safe from a collapse. No one outside Ireland understood. Well, it’s not different and the outsiders were right! We need to wake up.

  22. @Stuart

    Agree. The aim of Nama seems to be to keep property prices high. If we take a long term view, we need lower prices and lower rents along with less expensive housing. Only by doing this, can we restore competiveness and ease pressure on prices and wages.

    Another isssue is the urgent need to to create a third and possibly fourth banking force. I suspect that the Government would like to see Anglo part of this in spite of the fact that it is damaged goods. The fact that Halifax and Postbank are departing highlights the need to action. The worst possible outcome would be for BoI and AIB become the exclusive bankers for retail customers and small businesses.

  23. @Brian
    “Another isssue is the urgent need to to create a third and possibly fourth banking force”

    We still have Ulster Bank and National Irish Bank as well as TSB. These were the ones around back in the early 1980s. With the changeover of First Active to the Ulster brand they now have more branches and are probably best placed to be the effective third force. Anglo would have to start from scratch. Would you give them your money?

  24. @ Sarah and George

    We’re well off topic here but, for what it’s worth, I thought that Rachel did a good job coming back to the Minister on a number of occasions.

    One of things to remember about these kinds of radio shows is that they usually have one government representative and three or four other people, so the government representative ends up having to defend themselves a lot and it’s difficult for presenters to keep coming back to the government TD all the time.

  25. Well, I just had a phone call from Ireland and my sister (self employed, small business) tells me her rates are up 25% on last year.
    It seems to me that this government and the local authorities have always had one simple solution to all their cash shortfalls,-increase taxes.
    She also tells me that other small businesses in her area are disappearing overnight.
    We are now trapped in a taxation vortex, a downward spiral to destruction, as our political masters use the same old tried and tested formula that has always worked-until now.

    “You and yours were WRONG Minister: you placed interests of the rich, reckelss and powerful before the decent common interests of the ordinary citizens of this Republic, and you have raided the humble larders of the latter to fill the black hole created by the former. This is empirical, and these are the facts. This is political economy, and this used to be a republic, which by definition, give precedence to the interests of the citizenry over the kleptocracy; by your actions, you have reversed this logic and the basic principles on which both this state and your party were founded.

    GO.”

  26. @Stuart
    “Anglo would have to start from scratch. Would you give them your money?”

    Unfortunately, they have already received a lot of my (and your) money and will get more – about €5,000 (based on €11 bn from 2 million adults). I certainly would not wish to follow bad money with worse money.

  27. According to Ken Rogoff former chief economist to the IMF and Harvard professor in his latest book, “This Time is Different” ‘eight centuries of financial folly’ once a country reaches Gross Government debt of 90% to 100% strange unpredictable things start to happen.

    Oddly, he maintains, that countries arrive at that point painlessly enough. As in Irelands case. When Fitch cut our ratings back in November they indicated that “Gross government debt including NAMA was going to rise to 110% of GDP by the end of 2010. Well beyond a sustainable level and well into the territory of unpredictable events impacting the balance sheet of the government. The relatively benign environment for sovereign debt that prevails at the moment cannot be extrapolated any distance into the future. Irelands crazy borrowing splurge has already guaranteed that even without a default we will be living with unemployment rates of 15 and 16 % shortly. Mitigated by our young people “going abroad to enjoy themselves” according to Tanaiste Mary Coughlan on a recent BBC “Hard Talk” program with Mr. Sackur.

    Mr, Lenihans speech at the taxation institute, indicated that as well as taking another 3bn out of the economy later in the year, he is sanctioning a raft of other indirect taxes and stealth taxes mostly at local levels. So their is even less money for main street. Ostensibly, the reason for this is that councils up and down the county are broke as is the government to fund them.

    One wonders about his “plan” for recovery or is this just a “plan” for the financial bunker that Mr. Lenihan has constructed and now occupies. This bunker mentality does not link to the real economy in any meaningful way nor does his choice of words and concepts reach out to those that are becoming unemployed every week as a result of his failed policies.

    On the day that another bank pulls out of Ireland Mr. Lenihan says “that we cannot have innumerable banks in Ireland, we cannot have innumerable lines of credit”. Maybe Mr. Lenihan would tell me where these lines of credit are and who these banks are? I am sure every small business in the country will be eager to know. Mr. Lenihan thinks that “this time is different” and has not learned from any of the people who have vastly greater experience in this area and that worked for the IMF and World Bank, he has listened instead to geniuses like Peter Bacon and Alan Aherne and this is why “we are where we are”.

  28. @ Karl Whelan, Sarah Carey,

    If you will allow me to insert just one point about the medium of radio. Yeah, the radio group discussion is a difficult thing to do. I heard Rachel English get quite irritated recently with Niall Collins, the Limerick West TD. After the Willie O’Dea’s notorious ‘Brothel-gate’ recording had been air-ed on national air waves, deputy Collins attempted to contradict the truth, even then. (Alan Shatter’s reaction was a radio-ified portrait of utter dis-belief) At which point, I think Rachel was about the lose her cool. But in fairness, she held it back. Must be a hard job. BOH.

    Late Debate 180210
    19 February 2010 12:00
    Rachael English and panel discuss the latest news and political stories. Reaction to the resignation of Minister Willie O’ Dea. Alan Shatter TF FG, Sen Dominic Hannigan Labour, Niall Collins TD FG (on phone) Shane Coleman Sunday Tribune, Gary Murphy Politics Dept DCU, political analyst Noel Whelan (on phone) and Eugene Phelan Limerick Leader (on phone)

    http://www.rte.ie/radio1/podcast/podcast_thelatedebate.xml

  29. Re slides 10 & 11, Niall (above) provided a link to the PE site. It now contains relevant Der Speigel links:
    “The links to the story “Piigs to the slaughter” is here
    http://www.spiegel.de/international/europe/0,1518,679502,00.html
    and to the graphic is

    http://www.spiegel.de/fotostrecke/fotostrecke-52107.html

    Since German banks seem to be the biggest creditors of the Irish covered banks, should we not simply sell them to the German banks for a notional Euro and let the German banks sort out the mess they financed?

  30. WRT Iceland – Iceland has gone the Sweden model in extremis – reconstitute the insolvent banks and wind down the bad debt. Unfortunately for Iceland, all its banks were insolvent, hence the large scale of the disaster. What is the case for Ireland? Ditto, it seems to me…

    Therefore we have gone for the Japan model – save the banks at the expense of the business of banking – zombies a go-go.

    We are caught between going to hell in a handcart and hell in a handbag – zombie or bust. Fine, but we should have taken a view on what would be better for the rest of the economy – the fact that we plan to create fewer jobs than the workforce will expand by for the forseeable future is a result of the japanning of the economy – we will have a veneer of hustle and bustle with nothing much happening underneath… swimming with our arms only and slowly drowning…

  31. @YM,

    Rarely have you seemed so pessimistic or apocalyptic. I remain convinced we will muddle through – mainly because Ireland has relinquished so much of its sovereignty. The ECB and the European Commission are acting as proxies for the German banks by exercising detailed oversight of the bank resolution exercise – such as it is. Minister Lenihan is taking the promised 4b out of the fiscal deficit this year and is committed to extract a further 3b next year. This may be enough to satisfy the gods of the bond market.

    The existence of enormous over-capacity in the real economy – primarily measured in terms of high unemployment (that will be eased by increasing emigration) is of no concern to the bond markets or German banks once there is a capability – and a government commitment to maintain this capability – to service the sovereign debt and to pursue the current approach to bank resolution.

    The German attitude is: “you had your party – largely financed by our largesse while we experienced serious pain to remain internationally competitive; sorry about the hangover, but we’re going to get our pound of flesh”.

  32. @Paul Hunt
    I think you are absolutely right, but a little optimistic.

    There are two crises ongoing in the eurozone – a sovereign debt/structural deficit one and a banking system one. There will be a significant casualty from each of them to make the closer union that the euro requires happen. For a good while I thought we would be both of them (it would be awfully convenient if a small economy on the periphery of Europe was the suicide bomber for both unsustainable activities). As it is, Greece is doing its best to rip one of the bomb vests from us (as our sovereign debt position is not that bad and hard cuts would at least get us to a bottom from which we could grow).

    Our banking system, however, appears beyond salvage and the government seems determined to bring the rest of the economy down with it in a hard landing.

    So, yes, I’m thoroughly fed up.

    Still, I’m all right Jack, my export business (eh, me!) is doing just fine with its punitive tax rates. My brother in Hungary tells me there’s new tax-free company status for people like me if I fancy moving over there. Hmmm family or chips, which to choose?

  33. @yoganmahew
    The reference to Iceland! came with an explicitly guaranteed ministerial wink. Irisheconomy.ie readers would be churlish not to congratulate the minister on a successful humourous sally. Unfortunately I fear that the wider government’s efforts to cheer up the entire country after the budget were doomed. The government were right that there is a huge mood of pessimism and as John The Optimist pointed out there was a significant rise in confidence after the budget. Unfortunately ever since there has been continued bad news and unemployment, it is agreed by all, will keep on rising for many months. Even if confidence does remain higher, or rises further, it is still so brittle that people may not spend which would lead to higher unemployment, then lower confidence and even lower spending. We are in a cycle of fear. Reports that retail rents have RISEN to increase anticipated NAMA valuations are therefore deeply disturbing.

  34. yoganmahew,

    “family or chips, which to choose?”

    Chips.

    Your family will follow the chips.

  35. I would say that Brian Lenihan (in his budget) definitely convinced some people things were about to get better. I think we’ll see this reflected in new car sales figures for Jan/Feb period.

    Since then though we had the following outside leinster house:

    – Halifax and Postbank leaving
    – Bank of Ireland raising the cost of credit.
    – Drip drip unemployment news.
    – Greece mess.
    – Sterling getting weaker again on hung parliment concerns.

    and the inside

    – Obvious disconnect characterized in:
    Mary Coughlans – they’re leaving for fun comment & Hanger 6 mess.
    Tension between Greens and FF – Dan Boyle obviously doesn’t have
    much faith in the lasting power of the current government. His twittering
    and Vincent Browne appearances have been telling.

    From what I can see, the only people out for my (the tax payer) interests are the EU. I’m for surrending more power to Brussels. Let those in leinster house do what they do best – worry about getting votes via pot hole filling.

  36. @ just a punter

    they’re not even good at that. instead they tell you that pre-existing potholes the result of the extreme winter we had.

  37. ” I’m for surrending more power to Brussels. Let those in leinster house do what they do best – worry about getting votes via pot hole filling.”
    +1

  38. @Brian Lucey,

    I view this as a counsel of despair. Yes, I know, reforming the system of democratic governance is a huge task, but further erosion of democratic legitimacy in the current dysfunctional system cannot, in my view, be the way to go.

    However, I suspect this continuous transfer of sovereignty – without any explicit popular consent – has considerable traction among many posters and commenters on this site (and, perhaps, among an increasing number of people). Of course, it’s perfectly legitimate to hold this view, but I think it would be useful if the nature and extent of the transfer – and its implications – were spelled out more clearly.

  39. Minister for Car Accidents Lyin’ Brenilan arrived at the scene of a bad car crash, in which a man, D. I. Rish, was trapped in an overturned SUV. Emergency response workers were about to use the Jaws of Life to extract the badly injured man from the wreckage.

    “No!” the Minister called, “Don’t use the Jaws of Life! There was an accident in Iceland yesterday and they used the Jaws of Life and the driver looked a complete mess when they took him out.”

    “But the Jaws of Life aren’t the cause of that! And we can’t just leave him there!”

    “My government has a plan in place to deliver him some emergency care in through was is left of the driver’s side window. Furthermore, we have not completely ruled out the possibility of taking him out of the wreckage at some future point in time.”

    “But, Minister, he is critical, he needs to get to hospital immediately!”

    “Look, taking him out too quickly would be a shock to his family. They need some time to get used to the idea of Mr Rish being an injured man. Also, there’s a vomiting bug in the hospital and of course, the ambulance could crash on the way over there and another reason and a few half thought-through excuses and we are where we are and its the only show in town…”

  40. Paul
    I have never made any secrets of my eurofederalist leanings.
    Why on earth is it despair to say “this shower of X$2!’s have made such a mess of it (shower = all elected politicos here since, oh, 77). Can Brussels be worse? ”
    Its a perfectly legitimate question, I think. But maybe not for this board.

  41. @Brian,

    Not disputing the legitimacy of the question. And I’m not not sure why it may not be appropriate to discuss it here. My contention is that the current financial and economic debacle – following on from the GUBU decade from 1977 – may be directly related to, on one side, the decline into impotence of the Dail and, on the other, the increasing power of government, the “permanent government”, the quangocracy and the unions. This is the context in which economic and regulatory policy has been designed and implemented. As a result I would contend that enhancing the power of the Dail relative to that exercised by government, its agencies and “partners” provides a means of ensuring the design and implementation of more sensible economic policies – and avoiding the repetition of this and earlier debacles.

    It may be possible to abstract consideration of economic policy from the dysfunctional system of governance – and that seems to be the preference of many on this site. It is equally possible and legitimate to assert that the track record of elected public representatives has been so disastrous that more policy decision-making power should be transferred to Brussels.

    I just happen to believe the former is misguided – and entirely ineffectual; and the latter is undemocratic – unless the consent of the people is sought explicitly.

  42. Paul
    Ok – see your point. The problem is this – who will reform the dail/permo-gov? My contention is that by the time anyone gets to the level therein where they could effect/initiate change, they are selfselected to not do so.

  43. @Brian,

    “..who will reform the dail/permo-gov?”

    For some time FG has been trailing a “New Politics” initiative – it gets sporadic attention in the media highlighting specific features that may or may not reflect its overall thrust. We’ll simply have to wait and see.

    However, it is only right and proper that this initiative seems to be coming from the political classes – or at least from one significant strand. And my latent scepticism is fully in tune with your “self-selection” contention.

    And yes, on this site Frank Barry has raised governance issues, there was a post on Niamh Hardiman’s paper to the SSISI and Philip Lane has made an excellent case for an independent fiscal committee, but I think there is scope for more engagement on these issues to highlight the link between dysfunction in democratic governance and economic, fiscal and financial debacles.

  44. These are just a bunch of titanic lies, the truth is NAMA is a titanic doomed to sink the taxpayer and the Irish economy along with it. Witness the distortion of business currently caused by NAMA in the hotel industry and the banking and property industry.

    The slides are typical lies and propaganda by this inept and incompetent, feckless and gombeen government.

    As for the Iceland slide, arguably Iceland is currently in a better place than we are as it is facing up to its problems. Then of course there is the blindly inept ideological blindfolding of the nation by avoiding mention of successful use of temporary nationalisation as practiced in the nordic countries.

    The legacy of this inept minister for finance is:

    1. The bank guarantee that has crippled us with the legacy of Anglo’s toxic debt and that of its AIB/BOI/Nationwide cartel

    2. The most unfortunate solo run the minister went on without consultation and communication with the European Commission in acting on 1 above.

    3. The inept and disastrous way the minister’s croneyism led him to be hobbled by Irish bankers in developing the bankers lifeboat, NAMA, a titanic for taxpayers

    4. The destruction of Ireland’s future through emigration of Irish young people and impossible burdens on taxpayers through the blind policies above. Emigration of the youth is used to lance the boil of emigration.

    What the slides ignore is the drip by drip toxic effect of these policies upon the Irish economy, instead of a jump from the cliff, we get a slow slide into
    perdition. Or am I hearing things from hoteliers stating NAMA is crippling the industry with 15 – 20000 rooms that the industry needs to shed, the product of zombie hotels kept alive by this minister’s zombie NAMA(not another mess again). Multiply that effect across the economy with deflation everywhere! Construction industry dead.

    Only jobs available are through expensive NAMA, evaluators?, estate agents and bankers. No more propaganda, take the gloves off and tell it like it is, folks!

  45. @Brian Lucey

    The problem with your premise that all elected govts since 1977have made a horlicks of the situation is to put it mildly unsupported by fact or in the vernacular…”bo””oc”s. There has been periods of competant governance by both sides from 1987-92 under CJH, possibly 1992 -97 under Labour/FF and FG/Lab/DL and from 1997-02 under Bertie. The 1977-87 period was god awful while Bertie II and Cowen is a complete mess and getting messier.

    I suggest you run on a platform of transferring power to Brussels and see where it gets you. There are elected politicians quite capable of providing good govt for the Irish people.

  46. @Brian Lucey & Paul Hunt @ all pragmatists

    It is a perfectly legitimate question – and it is more than appropriate to discuss it on this blog – which is Political Economy – if not on this particular thread. Politics, Economics, Democracy, Law, & the Lifeworlds of Ordinary Citizens are inextricably inter-linked – and linked to the broader issue of Governance at local, regional, national, corporate, European and Global levels. Life is inter-disciplinary.

    I’ve decided against writing the great volume on The Eras of the Errors of Judgment, and moving to governance instead: anyone interested in joining the European Kantian Pragmatist Republican Party – ‘Citizens First – Cowboy Ferengi Last’ is the rallying cry!

  47. @ yoganmahew

    Agree with you, but effects here because of NAMA may well turn out to be worse than japanese experience, NAMA can bankrupt our economy, sooner rather than later, can’t see it lasting anything near 10 years in its present form, its already wiping out large sectors of our economy!

  48. @ Brian Lucey,

    Re the problems of lack of diligent governance and the euro federalist solution, it is not a Hobson’s choice question.

    What matters more is the raising of standards and quality of leadership in Ireland across the board.

    Whether we go euro federalism or not belies the real question, this is how we reform the public service and our system of governance. We need this whether we are part of a federal europe or not.

    A european type list system would generate new standards in public office for office holders, eg Michael O Leary Minister for tourism. Our democracy can at least asap dump the present feckless lot next time round. Arguments that paint all politicians with the same brush have to seriously consider the titanic disaster foisted on the Irish economy by the present lot.

    Ministerial office holders should be relieved of constituency obligations.

    Science and Maths, as Intel tell us, standards need to be raised with bonuses at second level to reward the extra work required for these subjects. Professional teachers of talent in these subjects should be rewarded.

    Croneyism and nepotism and the failure to properly support our educational system has led to the dumbing down of our nation.

    We need political leaders with PhD’s and a return to standards that will enable us to compete intellectually, politically and economically. Not one’s that through croneyism will fall under the sway of errant bankers at the drop of a hat!

    Mostly we need aspiration of citizen’s to value these new goals and to refuse the feckless solutions provided by the current lot. We have paid dearly for the dumbing down of politics in the recent past

  49. @ALL
    There are many similarities between our current situation and that of Britain in the early eighties but there are also important differences. Perhaps it is good then that the government wants to remain in office until mid-2012 because I doubt they will get out of jail as Thatcher did with the Falklands and the swift recovery. The government is currently pursuing Thatcher’s counter cyclical fiscal policies. But Thatcher did not inherit a hugely indebted Britain with a smashed banking system. She also benefitted from an international recovery and the boom in financial services – a British strength. Finally she took on many protected sectors, slashed current spending and public services and then cut taxes.

    Ireland’s current situation is not comparable to Britain, let alone the South East of England, awaiting the Thatcherite boom. Instead we are the North of England after all the industries closed down but with no government transfers to cushion the blow. Ireland in 2010 is the North of England in 1981. At the time of the next election it will be 1983 in the North of England. Unless FF/PDs/GP/Inds, under a new charismatic leader, triumphantly liberate the Aran Islands from an invasion by an Icelandic Junta, we will then witness a gigantic defeat for the government parties. They will be totally smashed in Dublin for instance. Judging by the progress of the Anglo investigation and the outcome of the DCC case that is all the justice we can expect.

    Ironically if the government’s policies do work (a huge if) then their successors will reap the rewards. It is hugely more likely though that we are in for massive unemployment followed by massive emigration followed by – depending on the damage done by NAMA – a decade of stagnation or a decade of weak growth.

  50. @joe lawlor:
    “There are elected politicians quite capable of providing good govt for the Irish people.”

    Agreed, but unfortunately the two of them are in two different parties.

    bjg

  51. @Tony Demello:
    “There are many similarities between our current situation and that of Britain in the early eighties but there are also important differences. Perhaps it is good then that the government wants to remain in office until mid-2012 because I doubt they will get out of jail as Thatcher did with the Falklands and the swift recovery.”

    Aha!

    I think you’ve just explained why the L E Niamh has been sent to Argentina.

    bjg

  52. Where’s John the optimist? I think this thread could do with his unique brand of ‘everythings going to be ok’.

  53. Okay Joe.

    Sneak peek at one of the questions.

    Which of the following country do we not want to be like?

    (a) Greece
    (b) Spain
    (c) Portugal
    (d) Iceland!

  54. @ Punter

    JTO’s off in California and apparently has sworn off contributing until his return later this year. We’ll see if he can stay away. If I had a penny for every commenter that swore blind they were giving us up and then didn’t, I’d have … well I’d have at least three or four pennies.

  55. @joe lawlor – “”I suggest you run on a platform of transferring power to Brussels and see where it gets you.”

    That’s already been done – last year – it was called the Lisbon referendum II.

  56. @ Joseph

    Fair point. On reflection, sovereignty was transferred to Brussels in early 2009 with the 2009-13 fiscal consolidation plan and the design of NAMA. FF is now implementing a soft IMF plan, along the lines of the scheme currently being negotiated with Greece. Its just that they have not bothered to tell the electorate.

  57. There is a lack of real information here. Who actually rules the parties? CJH clearly used to do it. So who now actually causes all the TD’s to be craven, grasping accomplices? Is it as Big Ian says, the papal nuncio? Is it the freemasonry within the permanent government, keeping women out of power, and within banking?

    Michael Henigan made a good point, albeit one that has been made before, it bears repeating. The government has acted contrary to the interests of voters and of politicians. Why?

    Remember that Brussels cannot turn away a depression. It can help by getting markets freed up and NAMA is dedicated to keeping the land market “close”. A technical term meaning almost a monopoly. Is it possible that allowing the banks out of our misery quickly will destroy the power of one or more of these groups?

    There will be increasing misery no matter what. But one will be worse than the other.

    All——– chiding so skip if you alone are without sin!
    Rhetoric has entered these posts and the debate is suffering because of it. This is a site dedicated to economics an imperfect art, masquerading as a science. Let us stick to this or go to politics.ie or twentymajor.ie OK?
    What are the economics of the speech?

  58. A journalist from Morgunblaðið, the Icelandic paper of record, rang to ask if there was interest in Ireland in recent events in Iceland. I pointed them to “slide 11”, which may make an appearance in their next edition.

    I will be in Reykjavík for the Icesave referendum (assuming it goes ahead) this Saturday.

Comments are closed.