Morgan Kelly’s Hubert Lecture

Prof. Morgan Kelly delivered the Hubert Butler Annual lecture tonight in Kilkenny as part of their Arts Festival. The audio of his talk is below, just click play to listen.

Morgan Kelly Hubert Butler Lecture

By Stephen Kinsella

Senior Lecturer in Economics at the University of Limerick.

161 replies on “Morgan Kelly’s Hubert Lecture”

State injection to banking sector: €46bn + €18bn = €64bn
Haircuts to junior bondholders: €10bn + €5bn = €15bn
Erosion of shareholder equity: c.€25bn
Private investment: c.€1bn

Is this not enough to cover “€90bn to €100bn” of losses in the banking sector?

Or he could just think the losses will be

State injection to banking sector: €46bn + €18bn = €64bn + €30bn = €94bn
Haircuts to junior bondholders: €10bn + €5bn = €15bn
Erosion of shareholder equity: c.€25bn
Private investment: c.€1bn


@Seamus Coffey
I believe the 25 bn in equity is either illusory (in the case of Anglo and INBS) or has to be maintained (in the case of the other banks as you need to keep them going).

You can’t count it as losses if you want to have banks at the end of it.

Mind you, that is why some of us have been calling for the liquidation of all the banks since October 2008…

Mr. Kelly is seeing the additional losses mainly in mortgages. 10,000 professional mortgages of 1-2 mn each = 10 bn. A 50% recovery = 5 bn in losses just from that class alone. Add in the additional 30 bn in small development loans that NAMA was supposed to take but didn’t. Add in some more stuff based on unemployment. Pretty soon you come to the conclusion that you’re going to need a bigger boat.

At the peak the six banks had just under €400bn of loans on their books. Loan losses of €100bn needs a loss rate of over 25%. That would need to be near 35% if there are to be €135bn of loan losses.

Of that €400bn, €72 bn were transferred to NAMA with around €42bn of losses crystalised for the banks.

The stress tests told us that the banks had €312bn of loans at the end of 2010. The stress tests project that in the adverse scenario there could be €53 billion of losses on these loans. This is on top of the €10 billion provision the banks had already allowed for.

This again is more than €100bn of potential loan losses that have been accounted for in the system.

Why would the government think losses in the banks will be €60bn, when NAMA and the stress tests alone have already identified €95bn of losses?


You are right that the State injections and shareholder capital are not mutually exclusive as the State’s injection replace rather than add capital in the banks. The banks also some generate operating profits that could be included.

@Seamus Coffey
“The banks also some generate operating profits that could be included.”
To which Mr. Kelly pointed out that given the size of the national economy even including the excess of GDP over GNP, bank operating costs should be about 1.5 bn, whereas BoI and AIB together have operating costs of 4.5 bn. The other part of his argument is that they will become government pork barrels.

Given that equity has to be maintained, the losses required come down to 110 bn. Sidewinder on the propertypin was forecasting this amount in 2008 based on the size of the balance sheets and the combination of property crash and banking crisis. Not to be smart, just to point out that even a long while ago the amounts Mr. Kelly is talking about have been bouncing about for a while based on what has happened in other countries. “Controlling Fiscal Costs of Banking Crises” by Patrick Honohan and Daniela Klingebiel, places Indonesia in first place at 55% of pre-crisis GDP in cost of bank resolution. Perhaps we will simply rewrite the books.

“At the peak the six banks had just under €400bn of loans on their books. Loan losses of €100bn needs a loss rate of over 25%. That would need to be near 35% if there are to be €135bn of loan losses.”

And that would be a truely horrendous figure but not outside the bounds of possibility.

The 3 key drivers of the eventual bank losses will be residential property prices, commercial property prices and unemployment. There are lots of other factors but I think these 3 are the key.

The CB estimated the total banking losses using certain assumptions for these, clearly MK is using alternative and more pessimistic assumptions.

If he is still sticking to his prediction of 70% falls in residential property prices then plugging these into a PCAR style analysis would generate sufficiently more losses.
We already much closer to the adverse than the baseline scenario for unemployment.
And the predictions for commercial property prices used in the PCAR seem hoplessly optimistic IMO. 2.5% fall for commercial prices in 2011, just isn’t credibile IMO.

I think MKs prediction is overly pessimistic but the PCAR is looking overly optimistic right now.

Which matters more? Being on the high side of the eventual outcome or on the low side?

Kelly gave a clear and comprehensive assessment of what went wrong in the Irish economy. In particular, he lays the majority of the blame squarely on the shoulders of senior bank management.

It is interesting that he claims that most of these boom-time bank managers are still in their positions. This was also claimed recently in the Dail by Deputy Stephen Donnelly who said that “I am concerned that many of the senior teams [in the banks] are still in place.” Just how many boom-time senior executives–not directors–are still running the banks they bust?

@Seamus Coffey.

I don’t think Kelly was talking about total bank losses. I understood him to be talking about the approx €60 billion of State losses in the banks so far. Losess that he explicitly says will not be recovered.
He said that these losses will eventually €90-€100 billion. i.e Another 30 billion of State aid/ recap will be needed. I took the reasoning to be as follows:

1. No confidence in the stress tests and quite disparaging of Mr Honohan’s record on stress tests.
2. As Hogan has pointed out approx 10,000 mortagage in the 1-2 billion catagory, owed by many professional people that ‘could not buy you a cup of tea’ today.
3. That developer losses are underestimated based on fact that finished office blocks etc were bought at yields of 2% but will not be sold until the reach 8%. i.e 75% haircut.
4. That the property market still has a long way to fall as the banks are dripfeeding mortgage supply to better paid civil servants to give the pretence that they are still giving out mortgages. i.e The current market is based on a false floor. This deception cannot last.

He also placed the blame for the whole situation very firmly with the management of AIB and BOI, a management he says is largely still in place.
In addition he did raise the isuue of what is wrong with Ireland or the Irish that we sem to have a failure every thirty years or so. The did give some possible reasons but nothing definitive. However he did suggest the New Zealand and Finland idea of self reliance and their concept of having to continually excel and rely on their being ahead of others.

He said very forcefully that his biggest disappointment over the past year was actually not the economy, but the P? International Maths tests run by the Dept where Ireland came last.

Most entertaining talk, with a few good cracks, especially the one about the Honohan report being written in the ‘past exonerative’ tense. Also the one about the ‘shock and awe’ bank guarantee which turned out to be shocklng and awful.

No acknowledgement of Joe Lee’s work, or the Orange State, in his historical lead in. Sadly, all ‘non-catholics’ were not as fairminded and enlightened as Hubert Butler. Native intransigence and cruelty was also a product of history.
It’s a pity Morgan can’t move on from the Civil War. He has a good sense of where we are headed, an Italian style stagnation with successive generations of young adults failing to get an economic foothold and having to be subsidised by their parents. As for the have nots…..

@Seamus Coffey

Erosion of shareholder equity: c.€25bn

How does this pay for anything? That was simply lost boom-time share-value. And the capital behind the shares was simply lost cash, the only effect of which was to reduce the overall losses at the banks.

It seems to me that you are double-counting the shareholder capital here.

If a company has €100 in capital, and shareholders invest €40, if the company then loses €200 in debt then the total losses are 200-100-40=€60. You can’t subtract the shareholders lost €40 from the €60 loss a second time.

Interesting overview in the editorial in the Observer…truly frightening

“Of course there are profound underlying problems that should worry not merely financial market traders but the rest of us. The trouble is that the financial markets demand solutions in minutes which in the real world take years – even if politicians and policymakers could come up with good answers and then implement them. The world has a stock of $220 trillion of financial assets, nearly four times the world’s GDP. Almost $150tn of those assets are varying forms of debt. What has spooked the financial markets is that it is becoming obvious that the world economy, and a growing number of indebted governments, cannot create the surpluses to service the interest and principal payments on that volume of debt – whether in the public or private sector. Somebody somewhere is going to have to shoulder an enormous amount of financial pain.”

@ paul quigley

‘No acknowledgement of Joe Lee’s work’

You know Joe Lee is alive and kicking? You couldn’t get through to him and get his take on the current situation by any chance?

@ All

I found the speech to be pedestrian in the extreme, with a deal of unnecessary histrionics and a personalisation of certain issues which was completely out of place. Luckily, the first questioner raised the points that probably most people in the audience were thinking regarding the bits that MK was conveniently leaving out. It is a pity that the obvious question about where the money went was not posed, probably because a lot of it is in the pockets of members of his audience (and his own, which he had the grace to admit).

However, the most significant element for me was the fact that MK covered his bets and recognised the reality of Ireland’s situation within the euro area. One has to guard one’s reputation as the all-seeing seer!

It would be nice if he would now face an audience of his peers and debate his general thesis which would not get us very far, given that it boils down to saying that a democracy gets the politicians that it deserves, which is true of many countries other than Ireland.

Meanwhile, in the real world cf. article by Larry Elliot (who probably also wrote The Observer editorial).


Thanks for the links. Will Hutton says:

‘What is required is a paradigm shift in the way we think and act. The idea transfixing the west is that governments get in the way of otherwise perfectly functioning markets and that the best capitalism – and financial system – is that best left to its own devices. Governments must balance their books, guarantee price stability and otherwise do nothing.

This is the international common sense, but has been proved wrong in both theory and in practice. Financial markets need governments to provide adult supervision. Good capitalism needs to be fashioned and designed. Financial orthodoxy can sometimes, especially after credit crunches, be entirely wrong. Once that Rubicon has been crossed, a new policy agenda opens up. The markets need the prospect of sustainable growth, along with sustainable private and public debt’

Exactly. We have been fed the economic equivalent of junk food for the past 40 years. As the Dork puts it, petrodollars, robber barons, and western hubris. Led by the nose of business and vested interests for so long that we have forgotten how to think.

It’s all there in Karl Polanyi’s 1947 Great Transformation. A random quote:
‘no purely monetary definition of interests can leave room for that vital need for social protection, the representation of which commonly falls to the persons in charge of the general interests of the community- under modern conditions, the government of the day’

What we can reasonably expect from our government is that it would educate itself sufficiently so as to be able to take the broad and long view.
I am afraid they won’t get that in the Sindo.

Colm McCarthy states in relation to our banks:
‘They also need to restore public confidence and resume their role as distributors of credit. The reconstruction of a credible banking system is work in progress’

He goes on to call for more rapid staff layoffs and accelerated fiscal consolidation. How on earth can public confidence, or bank credit lines, be restored in an economy with falling asset values, SME insolvencies and rising unemployment ? Or is the real plan to get to primary balance and then default ? That would at least make some sense.

@ Paul Quigley

All very true. But it does not butter much bread.

On the last point, MK referred to the banks becoming “gold-plated semi-states” (he failed to make any observations on academia) i.e. they have too many overpaid staff for their new reduced role in life. Colm McCarthy agrees with him as must any reasonable observer.

Could I also refer you to the exchanges at the end of the Boone and Johnson thread. I think that there is an emerging academic consensus about the structural faults in the euro and in relation to how to go about correcting them.

I am not an academic, but I can recognise that academia spans a whole range of economic situaitions, from lowly temporary posts to highly lucrative and powerful academic administratorships.

Not everyone is a professor or a dean. As the sector is largely state funded and unionised, there is a broad middle ground of middle income employees with permanent tenure, good defined benefit pensions, sabatticals and other perks. Probably generous by UK/Euro standards. Like everyone else in the public sector, however, these folk have taken a hit, and we shall see how long Croke Park lasts.

There is another aspect to it all. As Pierre Bourdieu has demonstrated at length in ‘Homo Academicus’, the academic machine is structured in such a way as to allow the main players to profit from, and appropriate, the labour of those competing to gain status and security. Such routine abuses of power in the academic community probably have the effect of limiting the contribution which academics can make to society, and a bit of cleaning in those stables would be in the general interest.

The Winkler paper is nicely laid out. The history of the CBCH is interesting. It seems a key point in their presentation (p21) that the only real metric for assessing sovereign solvency is economic growth, which is by no means guaranteed to flow from a policy of fiscal consolidation. Just follying along the prescribed pathway may lead us over a cliff…


I found the speech to be pedestrian in the extreme, with a deal of unnecessary histrionics and a personalisation of certain issues which was completely out of place.

Au contraire. I found absolutely no histrionics whatever. It was an excellent one hour lecture delivered as far as I could see without any reference to notes etc.
Out of place? You seems to have missed one the main points of the lecture. The fact that Ireland seems to be unable to stop and arrest it’s now every thrithy years attempts at hari-kari. He posits that the reason is precisely that we are unwilling to take a stand and call a spade a spade.
As I recall this was said in the context of laying the blame for the crisis directly at tyhe feet of the AIB and BOI management that are still there.

I recall Dick Walsh of the Ir Times make virtually the same point several years ago. That Ireland lacked the ‘ hardy intellectual rigour’ of the British in questioning the status quo.

As for the first questioner who peddled the usual mantra of exports market, agriculture etc, he may as well have recylced JTO blog. Thankfully it was not as long.
His rather novel explanation as to why the ECB is so incompetent was interesting to say the least. So too was his understanding of the way German politics and attitude to the EU/EZ over the past twenty years has diminished its willingness and capability to deal with the EZ crisis effectively.

@Stephen Kinsella.
Thank you for posting this event. I decided immediately to go and am very happy that I did.


If I may just add an afterthought. Michael H has frequently, and rightly pointed out the poor economic return we have had from state spending on the knowledge economy. I would guess that most of the investment was swallowed up in the mysterious internal fiefdoms which dominate our academic institutions.

Our public sector is notable, though by no means unique, for its level of internal opportunism and private enterprise. Now if only we could get these energetic and amibtious folk to operate openly in the private sector. But then they would have to face a lelvel playing field, without the usual networks of inflluence. Not half as much fun.

@Paul Q:
“I would guess that most of the investment was swallowed up in the mysterious internal fiefdoms which dominate our academic institutions.

Our public sector is notable, though by no means unique, for its level of internal opportunism and private enterprise.”

It is hard to get robust figures about percentage internal admin costs of R&D granting agencies and enterprise agencies, university operating overhead costs levied on projects awarded to academic research projects, let alone the economic contribution of the Irish state’s SSTI.
What I do know is that quite a few academic researchers and enterprise agency staff have been able to use their monopoly access to certain categories of state RDI spending to help build private consulting businesses, during and after their retirement. While any capable enterprise in this area is to be welcomed, it would be nice if public sector insiders participated in such markets on the same basis as other taxpayers. Toleration and tacit encouragement of this type of ‘enterprise’ by the state tends to drive out entrepreneurs, perpetuating the RDI ‘desert’ in the SME sector relative to comparable EU states and accentuating the phenomenon of ‘free lunch entrepreneurship’ noted by Michael Hennigan.
The cure to this is to redistribute annual science spending from pure sciences into applied science i.e. technology and engineering, and to enforce the public sector ethical codes of conduct regarding conflict of interest. I suspect the latter would very difficult to achieve in Ireland pending effective whistleblower protection and a legal system that is affordable to all. Given these difficulties perhaps it is simply easier to shrink the size of the public RDI sector over time.

I agree with DOCM. The following points in addition —

Loss estimate is pure back of envelope, rental yield has to rise to 8% (source), hence 75% decline. No detailed analysis of properties, prices, and locations like Jagdip does.

Some Sindo-friendly speculation about the Green Menace starting a mortgage Boycott movement, indeed a bizarre pairing of FG and SF in this regard (Clann na Poblachta Nua?)

Very questionable political economy of Ireland — it was jobs as patronage up to mid 90s and then it became property? FF was in bed with the developers since the 60s (mohair suits and all that). I think it was more to do with the interaction of property, politics, and the beloved social partners — a point on which Frank Barry’s paper of a few years ago on benchmarking and property prices remains an under-studied masterpiece.

A Joe Stiglitz type bashing of the EMI as forerunner of ECB (in the same way Stiglitz bashed IMF as refuge for the weaker Ph.D. students) … if he thinks this explains why ECB is still talking about inflation, he doesn’t understand its roots in the Bundesbank or indeed can’t explain why Fed, OECD etc also highlight inflation risks. They may be wrong but citing mediocre HR policies in 1990s doesn’t get you far.

He’s right on our 30 year cycle of disaster but that’s not a new point. And it’s not like we revert to the status quo ante as each crisis evolves.

It’s a shame MK doesn’t regularly engage with his peers or the thoughts of his peers in a meaningful way. His strategy of popping up every 6 months and throwing a bag of cats at the pigeons contributes less than it otherwise could.

I also find that his constant ‘pops’ at people/professions (although sometimes warranted) takes from what he’s saying. It suggests a kind of bitterness that could (but may not) cloud his judgement.

His points on PISA are something that worries me too. Does anyone know any gifted mathematicians that want to be a teachers in this country?
The attitude to the teaching profession in Finland is far superior and consequently their kids perform are always in the mix for the PISA top spots.

Also I can’t help but think that property to Ireland was what financial services is to London and New York. A draw of talent that has left those new to teaching that bit more lacking than they otherwise could have been. Also despite being overpaid, pay cuts and resource cuts can’t be good for moral.

Despite the difficulties I hope he isn’t being serious when he says given the question:
x/5=2 solve for x.
20% of his economics class can’t answer.

I would defend Kelly. It’s true he throws the odd stink bomb, but he was right in 2006/07 and he’s likely right now too. The problem in my opinion with many of the mainstream economists is that they are compromised. They were wrong when they said the soft landing and many of them acted as cheer leaders for the toxic corrupt nonsense that passed for economic policy before the crash.

These economists are defending their ideology more than they are dealing with data. Try to pin one of them down on the potential losses to the system and you get so much double talk and blue sky projections that depend on economic growth. Where that growth will come from is a major mystery of course. The real economy (the productive bit) has to produce some amount more than before to generate the extra tax income that government needs to service debt. Also, the credit machine has gone from overdrive to reverse and finally, the global backdrop has gone from super fueled growth to stagnation. Yet, the numbers are sacred because the assumption that we will have growth is essential to the assertion that the debt load is manageable.

So to engage directly, one has to engage in politics and constantly point out the obfuscations. That is likely very tiring for Kelly and would distract him from his day job. Better to have him throw the odd stink bomb and let the mainstream economists fight it out among themselves.

Radical solutions are needed to respond to a changing global economy but the radicalism should begin within our own direct spheres of influence.

The Sunday Independent quotes Ray Kinsella of UCD today, proposing leaving the euro — a hugely consequential move – – and Morgan Kelly referred to improving the education system.

However, in Ireland, four years this weekend after the onset of the credit crunch, the default mode remains to leave the tough issues and choices to the politicians.

The people who know best how to get an improved education system on limited resources are likely insiders who keep their heads down to avoid upsetting sacred cows.

The performance of the university presidents in particular, has simply been shameful.

It’s the same with the €2.5bn science budget, as referred to above.
Like motherhood and apple pie, education and innovation get universal plaudits.

The minister for education, an intelligent architect, should not be expected to produce miracles; In Enterprise, Bruton/Sherlock have replaced O’Keeffe/Lenihan and their soundbites on innovation are interchangeable.

‘Ecosystem’ and other jargon surely papers over a lot.

As for radicalism, while the 2008 state bank guarantee is now generally discredited, could someone enlighten me as to what is the current rationale for providing a state guarantee to workers who have the best pay and perks in the workforce?

There is a big difference between residential and commerical property regards behaviour, income and law.

Behaviour: People are generally unlikely to ‘abandon’ their home, they will tolerate negative equity. They feel emotional attachment to their home, and in Ireland people tend not to do things like in the US: ‘jingle mail’ + migrate to new state.

Income: the income stream of a commercial property resident will likely corelated closely with the price of that property. E.g. if retail sales fall in value, retail shops fall. Thus fall in commercial priopert value, tends to suggest fall in income stream, and default. For residential property this is much less strong. As such people’s income stream is mostly independent of their house.

Law: it remains a lot easier for a limited company to fold than a person in Ireland.

For these 3 reasons I think property value price is a poor/weak indicator of propensity to default in residential. I know Blackrock used Nevada in the PCAR test, and it seems to me appropriate. Also the PCAR residential mortgage estimates were criticized as bearish. I’d need to see a pretty detailed model to be convinced that residential losses are underestimated.

@desmond brennan
I agree with the points you make, but I don’t believe they are the whole picture. If someone is not paying their residential mortgage, what is the book value of it? That is the basis of a 50% writedown – the assets will simply be non-performing whether they are repossessed or not.

Some of them will no doubt self-cure if employment returns. Enough of them, however, will not. Some 12% of the workforce have lost their jobs over the past few years. Is there higher unemployment to come?

In competitiveness terms, there is more to come in pay cuts. In terms of fiscal balancing, there is more to come in cuts in spending and tax rises. State sponsored inflation is well entrenched.

So it matters not whether mortgages default; it matters whether they are repaying. This applies equally to commercial and residential come to think of it (with 23% performing, does anyone think that NAMA have repossessed the other 77%?).

Interesting hour’s listening, but join Fine Gael or Sinn Féin?

I was surprised by Kelly’s reference to the Eurozone as too complex to collapse. Emergency G7 meetings, conference call of Eurozone central banks: hardly good signs. Just because something is generally recognised as a benefit doesn’t mean that all act positively and in a timely fashion towards ensuring a particular outcome.

Kelly was right to highlight the downward trend in literacy and numeracy test results among 15-year-olds: for the executive summary;,3746,en_32252351_32235731_46567613_1_1_1_1,00.html for the full reports; for reports and analysis.

As to any additional cost of the banks, S&P said on Friday that it didn’t think Irish banks would need additional capital. Against that ,commercial property in Ireland seems to be in line for greater drops than anticipated by the stress tests. 7% average fall in H1, 2011 with a projected 20-30% additional drop with the abolition of Upward Only Rent Review commercial leases would surely torpedo the adverse stress test scenario of a 22.5% drop. Residential by reference to the CSO mortgage-only index though is down 42% from peak against an adverse stress of 60%. Sovereign bond yields are now back at March 2011 levels. Morgan has taken a dark view previously on mortgage default. Who knows?

As for education, which Morgan says is a necessity for sustainability, these are the PISA results to which he was referring

BTW Colm McCarthy’s column from today’s Sunday Independent is now available online. He again calls for an October budget. It might also be helpful to get a steer as to where the €3bn is to be found in Budget 2013 and the estimated €3bn in 2014/5 – some people want to plan their lives in this country.


It might be interesting to compare and contrast the cost of the bank guarantee in September 2008 with the guarantee in the Croke Park Agreement…

@ JF: “Despite the difficulties I hope he isn’t being serious when he says given the question:
x/5=2 solve for x.
20% of his economics class can’t answer.”

Please try this one: 2 + 3 x 4 = X

20 or 24? You would be shocked at the proportion that opt for 20! 🙂

I enjoyed Morgan’s classes. Though the ‘sums’ were a tad trickier. He always threw in a ‘kicker’ to catch us out.

@MH-ff: “Radical solutions are needed to respond to a changing global economy but the radicalism should begin within our own direct spheres of influence.”

Agreed in Spades, but what has always perplexed me is the high level of inertia displayed by individuals who have both the power and authority to act.

Speaking as someone who used to show initiative: poor career move!

So the problem lies where? Or should that be with whom? Or perhaps what – institutionalization? The crafty, politically astute ones always seemed to rise (s**t and cream!). They NEVER showed any hint of radical behaviour.

“The performance of the university presidents in particular, has simply been shameful.”

Gosh, and here was I thinking they were merely Skilled Incompetents!

No one (well hardly anyone) would support any radical solutions. There are just no votes in it. So, where are we? I believe it is known as Covering Your (one’s own) Ass, time. Seems to work.

Brian Snr.

A bit off topic…
As PR Guy indicated the spinners are out in force today. Steve Forbes is telling everyone to buy shares and blaming all the economic woes on Obama. Larry Summers is blaming the Republicans and calling for stimulus.
In the meantime one of the only stock markets open is Israel and it is down 5%.
Hold on for a rough ride tomorrow.

The most disappointing part of Mr Kelly’s lecture is that he completely ignores the biggest elephant in the room – the Fiscal Deficit. He is fixated on the Banks and is ignoring the bigger picture that nobody whether in business, personal or in Government can carry on like ours has for the past 3 years and into the future in spending more than it can afford. While he spoke well last night for one hour without notes I felt that he was giving an Economics History lecture for a large part of the time. Most people now know the history of our economic woes and we look to people like Mr Kelly for solutions . His only suggestion was an upgrading of our education system which cannot be improved because it is controlled by powerful teaching Unions that will not deal with their incompetent overpaid overpensioned members who are at the heart of any reform of the education system. I came away from the lecture feeling this man may be a good historian but he is not in the present where we need advice as to how to fix the mess that is the Irish economy.

Please try this one: 2 + 3 x 4 = X

20 or 24? You would be shocked at the proportion that opt for 20! 🙂

I’m beginning to think that there are quite a few of Prof. Kelly’s former students around the economics scene these days. I’m not sure that Irish economics is an empirical profession, or even an arithmetical one.

I have two posters up above telling me you can add shareholder equity twice to your profit/loss calculations. Back in May, there was significant disagreement among her economists over whether Ireland owed €160, €200, or €240 billion. The Department of Finance is perennially incapable of getting any of its figures right. The banks are institutionally incapable of doing their sums, and are quite happy to simply make figures up. One senior newspaper business editor does not know the definition of a billion. And the only way most finance men can even tell the time is with €10,000 watches.

The Irish economic, banking, and financial community is like a remedial mathematics class. The economists and commentators are the polite and well meaning boys at the front, eager to please but essentially dim. The bankers are the chancers and messers, handing in ink stained and slipshod work between bouts of riotous horseplay and pretending to be good. The Department officials are the meek and quiet ones who hand in impeccably neat but utterly incorrect answers, whilst being pressured by the messers for cog work and favours. The politicians are the dazed and confused mouth-breathers, hardly aware of where they are, much less what’s going on, and prone to making inane utterances.

Morgan Kelly is a far better student, whom unfortunate circumstance has brought amongst such worthies. He spends his time speaking his mind and pointing out all the faults and wrongdoings going on about him. He is hated by the eager boys for getting all the attention, by the messers for being a snitch, by the meeks ones for getting things right, and by the confused ones for disturbing the class and making everyone uncomfortable.

The teacher is a tall Hungarian schoolmaster, who bellows at the class and wags his finger whenever they get out of line. He gives them sums out of the agreed textbook, and corrects their answers from his own edition. But secretly, neither he nor the Principal really know whether the answers are correct. His job is to keep them busy with their sums, irrespective of whether they are getting them right or not.

The answer is 14. The shareholder equity do not count towards the bailout cost of the banks. The Irish state is going to owe €250+ billion. I’m sure someone will be along shortly with some account-a-mancy, or census figures, or PR release to show that Ireland isn’t actually completely banjaxed. Well, non credo. This class can’t do its sums.

MK’s comments on the educational system need to be heeded. The curriculum at primary level has too much time spent on Irish and Religion and the changes need to start there. The Department of Education and the teacher training colleges are very much Irish orientated for historical reasons and the churches control the schools and Religion is their priority. Vested interests need to be overcome but taking on the Irish lobby and the churches is a big political task. Perhaps the troika could put changes in the educational system on their list then they might happen. Parents need to speak up in the interest of their children. Wasting vast amounts of limited educational resources on vanity/fantasy subjects just cannot be accepted any longer.

For the full gen on maths order:
(Flip, I hope this site has it right!).

I think part of the problem is that when I was taught in primary school, I was only taught about left to right and not about precedence of multiplication and division over add and subtract. Maths just wasn’t a priority at the primary school I was at – basic literacy and of course Irish 🙄 were much more important in a class of 40. Along with ten or so others, we sat at the back of the class and worked our way through the textbooks while the rest got the basics of reading drummed into them. In sixth class…

Meanwhile, sarmetcozykel have punted again.

“Franco-German statement on euro zone debt crisis

“President Sarkozy and Chancellor Merkel reiterate their commitment to fully implement the decisions taken by the heads of state and government of the euro area and the EU institutions on July 21st 2011.

“In particular, they stress the importance that parliamentary approval will be obtained swiftly by the end of September in their two countries.

“They welcome the recent measures announced by Italy and Spain with regard to faster fiscal consolidation and improved competitiveness. Especially the Italian authorities’ goal to achieve a balanced budget a year earlier than previously envisaged is of fundamental importance. They stress that complete and speedy implementation of the announced measures is key to restore market confidence.

“As decided on July 21st, the effectiveness of the EFSF will be improved and its flexibility increased linked to appropriate conditionality, in particular through the following instruments: precautionary program, finance recapitalization of financial institutions and to intervene in secondary markets on the basis of an ECB analysis recognizing the existence of exceptional financial market circumstances and risks to financial stability and on the basis of a decision by mutual agreement of the member states, in order to avoid contagion.

“In line with 21st July decisions, France and Germany are confident that the ECB analysis will provide the appropriate basis for secondary market interventions as it will help determine the case when financial stability of the eurozone as a whole is at risk.”

@ Tony Owens

‘The cure to this is to redistribute annual science spending from pure sciences into applied science i.e. technology and engineering, and to enforce the public sector ethical codes of conduct regarding conflict of interest’

My feeling is that conflicts of interest are so deeply entrenched at senior levels of our public and private institutiins as to be literally invisible to the participants. In fact, an individual who did not have such conflicts, or was not patronised by someone who does, would likely be judged as unreliable. As the expression has it, candidates must be ‘suitable in all repects’.

The number of taxis for hire in central Dublin at midnight at weekends is striking.

The High Court had mandated deregulation in 2000 and recently the joint labour committee system was declared illegal.

Strange or not in a system of strong vested interests, where the political system failed, the courts have only been asked to rule or have chosen only to see the need for remedy at the bottom of the economic pyramid.

@ Brian Mercer

The primary system doesn’t resemble Saudi Arabia and teaching a number of languages is not an impediment to a successful educational system.

In fact our aspiration to restore usage of the native language, while not being willing to put up with the hassle, speaks for itself.

Gordon Brown has a very good take on the poor political response to Europe’s problems.

He argues that the actions of the European leaders results from ” from three years of wrong analysis. For, since the early days of the crisis, it has suited European leaders to believe that theirs is a fiscal crisis confined to the weaker states, and so they have presented their problem in a one-dimensional form – profligacy in the periphery demanding austerity, and if that fails, even more austerity.

But Europe’s problems can only be understood in three dimensions: not just as a fiscal crisis but as a pan- European banking crisis – which started as, and continues to be, one of massive unfunded bank liabilities – and as a cross-continent crisis of low growth, in part the result of the euro’s deflationary bias in a crisis.

Together, and in lethal combination, these three problems threaten a tragic roll call, year after year, of millions of European citizens unnecessarily condemned to unemployment and a wasted decade. ”

I believe he is correct to point to the futility of waiting for the present approach to turn the ship.

He looks for political leadership in Europe similar to that of US President Roosevelt in the 1930’s.

“At moments of crisis, statesmen and women have to lead markets and display irresistible resolve. The best example is when, pushing uphill against the constraints of the day, Roosevelt’s New Deal of the 1930s turned orthodoxy on its head and pursued stimulus instead of austerity.”

Where is there a Roosevelt in Europe for the present problems ?

@desmond brennan and related property commentators

I simply disagree that residential and commercial property markets beat to a different tune as you suggest. There is no doubt a wider held belief that they do and perhaps one could see why that may in fact be the case but unfortunately it ain’t so.

You see it’s about now that the penny for many property owners and so called property professionals is begining to drop in a rather large way. The long held belief that a property is only worth what someone is willing to pay for it is perhaps the most cring worthy statement that is frequently quoted about said market. The real truth is quite different – property in the main is only actually worth what a bank is willing to lend against it – nothing whatsoever to do with what you or I believe its worth it’s the banks opinion and actions that determine property prices. Nothing more nothing less.


@Phillip 11
Reuter reporting ECB will intervene in markets….quoting a source.
ECB due to issue statement. I suppose better late than never.

@ Aidan C

During the Great Depression, the talent that FDR had was not consistency; he was willing to experiment and change course.

What become known as the New Deal had evolved over time.

FDR had not begun with a plan and on March 10, 1933, just six days in office, he sent an emergency measure to Congress, requesting authority to cut the federal deficit by $500m, including a 50% cut in payments to veterans, which accounted for a quarter of the $3.6bn budget.

@Aiden C
That Gordon Brown piece you linked…..
“Today, because of the unanimity required in the voting structure of the new European stabilisation fund, European leaders are still seeking agreement on funding its first phase long after a second, bigger, phase is overdue; they remain unsure who is responsible in a crisis, not least because of their ambiguous relationship with the independent ECB; and few, even now, are able to contemplate the massive constitutional issues raised by fiscal integration.

But every time the big questions are avoided, and every time the outcome is a patchwork compromise, the next crisis gets ever closer and threatens even more danger. Without action on the lines I suggest, no one can assume that Europe’s historic strength is enough to prevent the most punishing of future outcomes.”

Is tonight’s announcement more of the same. I thought the ECB were specifically precluded from buying debt?

@ All

This intervention by Brown will deservedly go down like a lead baloon, that is if European leaders struggling with an existential problem, while the UK – as usual – watches from the sidelines, bother to pay any attention, which I very much doubt.

@Ceterisparibus et al.

Here’s the ECB statement.

The question was not whether the ECB would intervene or not, since there is no other choice. The question was who would ultimately assume the risk of default of the purchased securities. The way I read the statement is that the EFSF has agreed to assume the risk.

4. The Governing Council attaches decisive importance to the declaration of the Heads of State or Government of the euro area in the inflexible determination to fully honour their own individual sovereign signature as a key element in ensuring financial stability in the euro area as a whole.

5. It equally considers fundamental that governments stand ready to activate the European Financial Stability Facility (EFSF) in the secondary market, on the basis of an ECB analysis recognising the existence of exceptional financial market circumstances and risks to financial stability, once the EFSF is operational.

For securities that the ECB keeps on its own books, section 4 applies – the ECB expect all coupons and principal to be paid in full and on time (e.g. just as for the Greek bonds it currently holds, which were never part of the restructuring discussions). Note that the ECB say this was “decisive” – i.e. “you guarantee the bonds will be paid back or the deal is off”

The ECB also expect to be able to offload some securities to the EFSF – hence section 5.

So my take on this is that the EU Governments/EFSF have effectively indemnified the ECB against any losses they may suffer when buying Italian or Spanish bonds. They will have to find a way to manage this so that the headline “EFSF size” doesn’t get ridiculous.

I’m voting for Jagdip: 2 + 3 x 4 = 14 (on the basis of the rule I recall: ‘multiplication and division before addition and subtraction’).

We should stop all further comment on complex issues such as the survival of the Euro, etc. until we can sort out this basic issue.

The credibility of some posters is going to be severely undermined one way or another when the answer is revealed.


Apologies, I now see you’ve given the answer correctly at ’14’. I agree with your sentiments. Where I work in a part of the public sector I regularly witness ‘back of the envelope’-type calculations when making funding applications for major pieces of infrastructure. I once made a reasonably significant error when calculating funds required for an application to our relevant Civil Service Department. I could have acknowledged the mistake and lost a bit of credibility but then realised that no one would notice. No one ever did.

@ Bunbury

Where I work in a part of the public sector I regularly witness ‘back of the envelope’-type calculations when making funding applications for major pieces of infrastructure.

On Friday, S&P only overestimated future US deficits by $2 trillion.

“The magnitude of their error and combined with their willingness to simply change on the spot their lead rationale in their press release once the error was pointed out was breathtaking,” said White House National Economic Council director Gene Sperling on the US debt downgrade. “It smacked of an institution starting with a conclusion and shaping any arguments to fit it.”

@ Bryan G

I agree.

cf. the links and comments I have posted at the end of the Boone and Johnson thread.

I also think that this comment in the letter of 3 August by Barroso is relevant. Some serious inconsistencies – not to say fatal flaws – need to be sorted out possibly in the EFSF but certainly in the ESM (if the latter is ever invoked).

“I also take the opportunity to urge a rapid re-assessment of all elements related to the EFSF, and concomitantly the ESM, in order to ensure that they are equipped with the means for dealing with contagious risk”.


So what we have here is something like the Irish bank guarantee, in this case, an open ended commitment (mainly by by the Germans) to stand behind all EZ sovereign debt. What happens if:
* the dodgy sovereigns don’t get the necessary growth or
* austerity fatigue sets in or
* the markets test the commitment ?

Regarding solutions to our problem of bettering maths education while not spending any more money.

The homework at school and school work at home model seems to be to be a cheap and effective solution. Which seems to work particularly well with maths.

For those that haven’t heard of it, Bill Gates has been championing this guy:

Some on this blog that could do with watching a few of his lectures 🙂


“Ireland will have the sharpest V-shaped bounce out of recession of any industrialised country………..they have done exactly the the right thing – the opposite of the US , they have cut civil service pay by 15%, dramatically cut back capital programmes and cut welfare payments despite high unemployment and that is why we and some others bought Bank of Ireland direct from the government”…..etc,etc more or less.


At this point I agree that the ESM needs to be rewritten, and this is likely to be done along Trichet/Junker/Rehn lines, since Germany won’t be able to stick to its ‘mandatory PSI’ line now.

The ECB/EFSF are likely to end up holding a large portion of Spanish/Italian debt, as has happened with all bailout countries so far. From RBS today, via FT Alphaville

Over time, we believe that ongoing selling pressure will force the ECB/EFSF to eventually hold close to half of the traded Italian and Spanish debt or around Eur850bn.

This huge risk pooling exercise will not come easily and the risk of political fallout will be large. This might be the necessary and painful step required to pave the way for the creation of a common debt instrument, the quid pro quo for this might be the loss of fiscal sovereignty. Indeed, the EFSF will have by then become the defacto euro area common bond issuing institution.

The “EU integration” train is beginning to pick up speed now, and is unlikely to be stopped. This may plateau-out at a “several” guarantee level for a while, rather than a “joint and several” one, as that will a bridge too far for Germany for the immediate future. However the “several” guarantee approach is inherently unstable, since the more the EFSF is used the less credible the guarantees become, as each former guarantor becomes a recipient of funds, and so the change to a “joint and several” scheme is going to have to happen at some point.

For many reasons I think this likely outcome is damaging to Ireland. For example I think that the impetus and motivation for necessary reform (in education or elsewhere) would be much more likely to happen if Ireland were outside the Eurozone, on the basis that “it needs to be done to survive and retain sovereignty” rather than the current case where reform is seen in some parts as being imposed from the outside with Ireland as an “EU protectorate”. It is almost as if there is another outside power to “resist”.

Very disappointing , he bored the tits off me.
And this man is considered radical ?
What has Ireland got to do with anything – we are a cultural & economic freak show , a mad laugh of a thing.
We could disappear from this planet and not many would notice our absence, a sad little shit hole really.
After such manic economic & cultural shocks and this is the best we can do ? – this projection of the Pales private pondering is pathetic.
The madness has left this parish me thinks.

The great debate should orbit the twin planets of the freegold / debt money concept vs interest free goverment fiat tokens / full reserve banks.
That is the great monetory debate of the 21rst century as this present shit ain’t working too well.

Everything else is just bollox.

@Bryan G
So they do it on a tempory basis pending implementation and ratification of EFSF. What happens if it’s not ratified?
It also strikes me as being a great opportunity for the European banks to offload a lot of those pesky Italian and Spanish bonds whose worth is now under scrutiny. How nice of the ECB to announce the purchases in advance. Obviously they will have to purchase at prices which keep the yields down otherwise the exercise is pointless.
As for shock and awe…they don’t have the firepower in the EFSF. Italian 1.8 t in bonds. Spain ?
Maybe Gordon Brown is right.

Kelly says Irish banks will need to fire two thirds of their staff to reach profitability even after recapitalisation and recognition of all bad debts.

For evidence of this he cites total annual opex of 4.5bn for AIB & BoI combined.(He says it should be 1.5bn for our size of economy)

This looks wrong to me. AIB’s total opex in 2010 was 1.6bn. BoI was 1.8bn. So expenses were a total of 3.4bn or 63% of total gross income. (all figures before loan impairment and NAMA costs). And these figures relate to group performance; if we just look at the Irish operations, then total expenses were 1.8b or 74% of Irish gross income.

Do any of you believe that AIB and BoI are spending three times what they should be on opex?

I had a quick look at two foreign banks to see how they compare:
Rabobank has group income of 12.7bn, opex of 8.2bn or 65%
Danske has income of 6.4bn, opex of 3.7bn or 58%

Am I missing something?


“So they do it on a tempory basis pending implementation and ratification of EFSF. What happens if it’s not ratified?”

The ECB will stop buying the bonds, force a crisis point, and wait for the governments to fall into line. If the EFSF doesn’t get ratified, the ECB will view today’s agreement as null and void, since they view the new EFSF as “fundamental’ to their decision. Under a real threat to the existence of the Euro, Germany might be forced into a “joint and several” guarantee early (say if the True Finns refused to budge or something like that).

I don’t know how the governments will finesse the EFSF ‘firepower’ issue, but I suspect there are a number of ways to fund EFSF operations other than through the current scheme which involves borrowing the money from the Chinese/Japanese etc. up-front. More use could be made of “promissory note” structures, and also perhaps the ECB could provide much of the up-front funding, with the EFSF guaranteeing all the repayments. The Germans will be keen to avoid an “EFSF increased to €2 trn” headline in Bild.

I think the ECB may not have that many objections to providing this funding since
– it means all the private creditors will get their money back in full as redemptions are due
– the ECB will eventually get all their money back in full (guaranteed by the EFSF, if my reading is correct)

The only losers in this cunning scheme are the EU-taxpayers. In particular the German taxpayers will lose. However since Germany seems to want the benefit of a composite EU-wide exchange rate, but not to want to take the pain of a corresponding composite EU-wide bond funding rate, they won’t have much sympathy from anyone else, nor should they.

@Bryan G

I am reading that Italian and Spanish are set to come in by 100 to 150 bp so it seems that the bankers will win again and again and again. Nothing changes.

Will the Finns buy this? It is really hard to know. Blow up the ship or swallow your pride.


I checked and the True Finns are not part of the government coalition, and although some of the ruling coalition parties are also against the latest Greek bailout, I would expect Katainen to get the EFSF passed, probably with with some handwaving about EFSF loans being collateralized.

Now that significant private sector involvement is off the table, the remaining battle is the split between the cost to national taxpayers of an indebted country and the cost to EFSF/EU-taxpayers. If any of the EFSF guarantor contingent liabilities are actually realized, then I would expect a whole new level of conditionality to be imposed.

Morning all.

Summary articles from the Guardian.

‘Global financial crisis: five key stages 2007-2011’ Larry Elliott

“Policymakers are confronted with a slowing global economy and a systemic crisis in one of its component parts, Europe. To the extent that they are united, they are united in stupidity, wedded to blanket austerity that will make matters worse not better.”

‘Financial crisis: full force of US downgrade is felt around the world’

“But there is little glee in China about the west’s travails. Beijing has repeatedly expressed concern about the mounting US debt burden and the reliance of the global economy on the mighty dollar. Now, the gloves are finally off. The official news agency has accused the US of “debt addiction” and insisted that, as its largest creditor, China now “has every right to demand the United States address its structural debt problem and ensure the safety of China’s dollar assets”.”

That last quote is going everywhere.

@ People who might know an answer

In the Larry Elliott article he says:

“Markets are bound to remain highly jittery, although it seems unlikely that American bond yields will rocket as a result of the S&P downgrade. Japan lost its triple A rating long ago and has national debt well in excess of 200% of GDP but its bond yields remain extremely low. The reason for that is simple: Japan’s growth prospects are poor.”

This has been said a few times now. I don’t get it. Why should Japan’s bond yields be low because its growth prospects are poor?

@ Dork of Cork

‘What has Ireland got to do with anything – we are a cultural and economic freak show, a mad laugh of a thing’

Well that’s certainly one way of looking at what Kelly has ( and had) to say and it’s undeniable that many out here in non-Oirlind are coming to agree with you. ( Is that good or bad?).

Here’s another way (of looking at it).

Speaking as a former organiser of top level global business conferences and Summit meetings and having “managed” thousands of speakers at international events over a period of twenty years, I found Mr. Kelly’s analysis brilliant, fluent, understatedly provocative and amusing, and possibly seminal in “Irish” terms.

It is true that the speech did not posit a simple three or five-step economic or financial action plan for getting us out of the mess we’re in in a short time but then, according to Mr. Kelly, it took us a long time to get into this mess ( not just a Celtic Tiger boom) and it will take a long time to get out of it.

The two main points I took from what he had to say were:

1.) Irish society, reacting to its own interpretation of its history ( or at least one strand of our history), created a clientelist state enabled by favour-dispensing, grass roots-sensitive politicians and this extended to all sectors of the political and business elites ( including trade unions).

This society ended up exploiting and consuming itself ( with, no doubt, a lot of help from European” bankers).

The FDI Whitaker-inspired transformation and its ripples into the domestic economy deprived the political elite of its jobs-dispensing patronage until the Celtic Tiger credit, property and construction-driven booms restored this favour-dispensing roles to these elites.

2.) The recent implosion of our fiscal, financial and poltical sovereignty runs the risk of further enhancing clientelism in the surviving political and business elites, particularly through the mechanisms of ( and machinations) of “gold-plated semistates” as well as the possible rise of countervailing extreme right wing reaction just as it has in the US and Europe.

Mr.Kelly’s pointing up of the fact that many of the actors most responsible for our implosion are still at their desks, as well as the myth of our “world class educated young people” constitute two “action” points well within the orbit of our remaining sovereignty and, while they are not “quick fixes” for all our problems, they are certainly core strategic platforms for our long term future ( the former by its “elimination” and the latter by its radical “re-engineering”).

As elsewhere in the world ( The US, France, Germany, for example) our legacy notions of being “Irish”, French”, German” ( “Norwegian”!), “European” are anachronistic and flawed, certainly not up to the challenge of enabling us to survive and thrive in a world shortly to be dominated (rightly!) by competing, more valid contemporary Asian & BRIC constructs.

Viewed from out here in the “export” world, Mr. Kelly’s past and present courageous contrarianism resonates and, in my humble opinion, should be praised to the rafters in Ireland.

While we should definitely “lock up” the most guilty among the political and business elites still “at their” desks”, “we should all examine our “Irish” consciences and consciousness with the future, not the past, in mind

One more post for now.

ECB press release from Sunday night.

Point 2 (of 6 – it’s very short):

“The Governing Council underlines the importance of the commitment of all Heads of State or Government to adhere strictly to the agreed fiscal targets, as reaffirmed at the euro area summit of 21 July 2011. A key element is also the enhancement of the growth potential of the economy. ”

That last sentence. Anyone care to suggest what they mean, by all governments going for austerity and simultaneously encouraging growth? What does that actually mean in practise?

@ Gavin

‘Anyone care to suggest what they mean, by all governments going for austerity and simultaneously encouraging growth? What does that actually mean in practice ?’

Wage deflation and deregulation I suppose.

@cet. par.

Is tonight’s announcement more of the same. I thought the ECB were specifically precluded from buying debt?

It is specifically precluded from directly buying EU public debt: article 123 of TFEU (alias consolidated Lisbon). There is a loophole for indirect purchases of this debt. How far that loophole can be stretched without breaking is a question for a lawyer (IANAL). It’s a matter of fact that Frankfurt has been driving a coach and four through it for a couple of years now. The member states and the Union are also specifically forbidden to dig out member states: article 125. There’s no question that Lisbon was supposed to absolutely forbid exactly the kind of thing which is due to take place. In this case, if the member states are going to guarantee the ECB’s new bond purchases, then probably the best candidate for a part of Lisbon which is clearly being violated is Article 125.

I attended the MK Talk and found him very human. The man does,nt deal in cosy fire side chats and looking to get on committes. Bascially, he does,nt do ego. However, I was disappointed he did,nt deal with the deficit issue. I respect the way he takes on individuals who have messed up. We all know who they are. Overall, very good pres.

@ Gavin

re austerity/encourage growth

Loose monetary policy at the same time as tight fiscal policy, combined with deregulating industry and reforming labour/competition policy.

re Loose monetary policy – ECB, per market pricing, now not expected to hike rates until end-2013.

Wage deflation / without credit production means private debt will rot from the inside out.
The only thing that can balance the books in a debt based system is the useless metal.
Thats the plan lads.
This is all about the possible change of the worlds reserve currency.
The Euros creation was all about this.
Gold began to rise under pressure during 1999 until Gordon Brown followed his masters instructions
– what happened on the 1rst January 1999 ?……. poor Gordon is still suffering a form of mental anguish me thinks.

Its certainly more then just nice but dim Rugby / Bank managers making poor credit decisions.

@ Bryan G et al

“The only losers in this cunning scheme are the EU-taxpayers. In particular the German taxpayers will lose. However since Germany seems to want the benefit of a composite EU-wide exchange rate, but not to want to take the pain of a corresponding composite EU-wide bond funding rate, they won’t have much sympathy from anyone else, nor should they”.

That about sums it up!

After eighteen months of being dragged along a mistaken path by Berlin, in circumstances where, as Tomas Klau pointed out on RTE yesterday, both leading opposition parties, the PSD and the Greens, had conceded the need for E-bonds, combined global opinion (cf G7 statement), against a background of crisis and an investor revolt, has finally caused the present German governing coalition to concede.

I would not be as pessimistic as you appear to be about the impact on Ireland. The IMF will set the tone whatever interim solutions emerge.

I read a comment somewhere which seems to me to be commonsense to the effect that investors were crying out for safe investments if the EZ i.e. Germany, had the wit to provide them. In other words, the EFSF changes, which are now to be in place by the end of September (Dáil involvement?), and the instruments that eventually emerge, may not lead to greatly increased borrowing costs for Germany. One way or the other, it will be a cheaper solution than the train crash that Merkel’s approach, if continued, would have given rise to.

Meanwhile, the game of pin the tail on the donkey representing the size of Ireland’s debt can continue.

I don’t really blame the parasitical elements of the middle class anymore or indeed the foot soldiers of destiny in the lower ranks.

They just are – they cannot be something they are not.
These sections of society were merely responding in a predictable manner to various stimuli both cultural & economic – they were effectivally automans.
I love this Late Late show interview – thanks for the link Gavin.
After a period of time it becomes quite clear the band is playing with the audiences perception of money.
I don’t think they would have got the same reaction in a Scottish audience for some reason.
We are just designed for colonization in Ireland – the age of enlightment only kissed these shores , it never stayed.
Same as it ever was same as it ever was……….

@ Dork of Cork

Well there you go with your reductionism (not in a perjorative sense) again! And nothing wrong with that position. Indeed, if that’s you’re view, and to be cohérent/consistent, you can’t “blame” anybody for anything, past, present or future.

I suppose contributing to this blog IS a stimulus. Or a response. Or an expression of alienation. Or Anguish! Or a way to fill up the time! ‘Cos life ( except for those already dead, dying or scrabbling to survive) is actually very LONG!

Fair play to ya!

Ugly out there again today. Stocks getting destroyed again. ECB now priced out of the market til Q4 2013/Q1 2014. Low growth, low rate, ultra-loose monetary environment is the end result of the EZ austerity-led fiscal retrenchment. I think at some stage in the next 12 months we’re going to see the start of a discussion about the merits of an inflation-targetting policy being brought in (ie 3-4% inflation). Rogoff is a big fan of that.

You don’t understand my postion , the euro masters changed a small part of the basic monetory programing but it will have quite dramatic consequences.
The wealth will not disappear , but credit money is dying – this will change the structure of society.
They have for the first time freefloating Gold on their CBs balance sheet competing with the fiat money.
They essentially want fiat as a transactional currency & Gold as a store of value – before this fiat money had both of these attributes at least in the western world.
I am not a fan of either the old or possibly new monetory system coming down the tracks but it just is.
The primates including myself will respond in a predictable fashion.

@Ossian Smyth

Whilst I haven’t checked your numbers I’ll work on the assumption that they are correct however such analysis is largely missing the real point.

The primary reason for the the Irish banks continuing with the rate of employment as suggested, despite their loan book and operations generally being less than half of what it was in the boom years, is more of the same old problem – potential bad debts.

It’s not terribly well appreciated that the employees of AIB have borrowed well over €1bn themseleves through various property ventures and the prospect of that debt ever being repaid is diminishing rapidly by the day.

Pushing thousands of said employees out the door merely crystalises the write down. That’s what’s going down at the moment. AIB can’t ‘afford’ to let these people go as loans and mortgages were, as suggested here many times, given to employees on ‘affordability’ based lending models as opposed to underlying ‘property value’ metrics.

When the tide goes out its all to easy to see whose swimming naked – and in this case its the AIB staff and management who sought and were given loans based on flawed lending models.

If there was ever a situation which now proves beyond all doubt that these times salary based lending metrics should be confined to the bin this is it.

@ Dork

‘You don’t understand my position’.

Well, I think I do but, believe me, I’ll try harder ( for a limited time!).

‘ The primates including myself will respond in a predictable fashion’

While I’m trying to understand ( your) current position, fast forward us a bit. What will/SHOULD our (future) position be, when and how do we get there?

You say it’s “predictable” after all!

The stated use of the EU-bonds is the ‘noble’ cause of ‘help those poor bankers’.

What is happening in the US is plain to see, still we have some people so ideologically wedded to the idea of converting the EU to a federal union that they even now are arguing for it to happen.

EU-bonds won’t help the EU any more than federal bonds are helping the US. Individual states in the US are fast becoming insolvent, so is the federal government.

So, Lord Morgan Kelly of UCD now fancies himself as a political and economic
historian. I thought that he was an economist. I didn’t know that they were
the same thing. As an historian, he clearly belongs to fellow-UCD academic
Conor Cruise O’Brien’s revisionist school of history. Leaving aside all the racist
piffle, that would have been more appropriate to Punch magazine circa 1860,
Kelly makes two ludicrous claims in his sweep through the past century or so
of the economic history of Ireland.

Kelly states:

“While Irish incomes had been ABOVE the western Euopean average at the time of independence, by the mid-1980s they had fallen to half of that – a
dismal performance only maintained by mass emigration.”

First, the issue of Irish incomes at the time of independence.

Naturally, Kelly gives no source for his claim. I expect he heard it in the UCD
staff room when O’Brien was still around. It sounds extremely Cruiser-like.
But, it raises the question: if Ireland was so rich at the time of independence,
why did the people at the time go to the trouble of having a War of
Independence against the then-mightiest empire in the world? Doesn’t sound
like the sort of thing a happy contented well-off people normally get up to?
And, if the people were so well off, why did the population fall, as a result of
millions emigrating, at every census from 1851 right up to the time of

The reasons are, of course, that Kelly’s claim is bunk.

Without pretending that I can do a complete analysis of the economic history
of western Europe in half an hour, thanks to wikipedia, it is now possible to
unearth very quickly enough statistics to show how absurd Kelly’s claim is.

This source gives GNP figures in 1925:

And, wikpedia also gives population figures for most European counties
annually from about 1900 to the present day (google ‘Demographics of …’

Putting these together, I have constructed the following table for 11 western
European countries in 1925:

GNP (PPP), population and GNP (PPP) per capita in 1925:

[01] Switzerland $4,300$ – 3,910thousand – $1,099.7
[02] Belgium $7,658bn – 7,748th – $988.3
[03] U. Kingdom $43,700bn – 45,032thousand – $970.4
[04] Netherlands $6,696bn – 7,366thousand – $909.0
[05] France $36,262bn – 40,460thousand – $896.2
[06] Norway $2,370 – 2,747thousand – $862.8
[07] Denmark $2,893bn – 3,425thousand – $844.7
[08] Sweden $4,627bn – 6,045thousand – $765.4
[09] Germany $45,002bn – 63,110thousand – $713.1
[10] Austria $4,314bn – 6,582thousand – $655.4
[11] Ireland $1,862bn – 2,972thousand – $625.5

So, far from having incomes higher than those of neighbouring western European countries at the time of independence, Irish incomes were actually
much lower. That was why the movemement for independence triumphed. If
Kelly’s claim was true, the Irish Parliamentary Party would not have been
swept away in the Sinn Fein landslide.

Second, the issue of mass emigration.

In true Conor Cruise O’Brien style, Kelly makes it appear as if this started after
independence. The results of every census since 1841 show that Kelly is
standing history on its head:

population of Ireland (26 counties):

1841 6,528,799
1851 5,111,557
1861 4,402,111
1871 4,053,187
1881 3,870,020
1891 3,468,694
1901 3,221,823
1911 3,139,688
1926 2,971,992
1936 2,968,420
1946 2,955,107
1951 2,960,593
1956 2,898,264
1961 2,818,341
1966 2,884,002
1971 2,978,248
1979 3,368,217
1981 3,443,405
1986 3,540,643
1991 3,525,719
1996 3,626,087
2002 3,917,203
2006 4,239,848
2011 4,581,269

The facts are simple:

At the time of independence, the new government inherited a country that
had been depopulated on a scale that no other European country has ever
experienced before or since:

–between 1841 and 1926, the population fell by 54.5 per cent

Even if we exclude the immediate post-famine period,

–between 1881 and 1926, the population fell by 23.2 per cent

Post-independence, there was an immediate improvement. It took 35 years
to reverse the tide of depopulation that the new government inherited.

Even so,

–between 1926 and 1961, the population fell by only 5.2 per cent

which compares with a fall of 14.3 per cent in the previous 35-year period
from 1891 to 1926.

And since 1961, of course, we have seen a complete reversal of the tide
of depopulation that the new government inherited in 1926. Thus:

–between 1961 and 2011, the population rose by 62.6 per cent

which is by far the largest increase of any European country.

So, contrary to Kelly’s claims, the factual situation is that Ireland inherited a
situation of unparalleled depopulation (down 54.5 per cent in the previous 85
years), went through 35 years of gradually reducing depopulation (down just a
further 5.2 per cent in that time), before triumphantly reversing the depopulation and achieving unparalleled population growth of 62.6 per cent in
the next 50 years, which, contrary to ESRI, continues to this day.

FF were in government during most of this time. The above figures represent
the real record of those FF governments in respect of reversing the inherited
depopulation and mass emigration, not the travesty that the joke historian,
Lord Morgan Kelly of UCD, tries to present.

@ David Burke

I agree about the ommission of any reference to the Fiscal Deficit which is the Elephant in the room. He was asked by a questioner in the audience if he should take a “pay cut” and confirmed that he should. He referred to himself as a well paid Civil Servant. The median salary of a University Professor in the US is $100,000 around €70,000 whereas the top of the scale in Irish Universities for a Professor is €135,000. There is a long way to go. I would like to see him being more forceful about dealing with the Fiscal Deficit and that means the ridiculous Croke Park Agreement has to go and he should be stating that but then his colleagues in UCD Economics Department might send him to Coventry.

It depends on the future equiliberium price of Gold , this could just be just $3,000 a ounce or it could be $30,000.
I have no idea really but this will determine the true leverage withen society and thus its actions.
They whoever they are really have set up a quite elegant monetory system – but the growing pains could be terrible – they perhaps want another few decades of slow change rather then rapid recoil.
The one structual problem with this is the possible future US treasuary , however the tea baggers seem to have been adequately propagandized with dollar centric nationalists such as Karl Denninger effectively marginalised.
Everything seems to be going preety much as planned.

@JTO: Conor Cruise O’Brien was a TCD not a UCD man. Elementary error, and I hope not the only one you make.

@ David Burke: Why do you compare the median US academic salary with the maximum Irish one? Also while your Irish number os broadly correct, what is your source fro the US one? Such a nice round convenient figure of $100,000.

FF were also in power during the great stagnation as well
Dev’s dancing at the crossroads / zero growth policies helped stoke emigration for decades.

The situation only improved when O’Malley/ Whitaker /Lemass brought in reforms to modernise the state
O’Malley’s education reforms laid the foundations of subsequent growth.
Ironically it appears that education has become the weak link again.

@Yields or Bust
“It’s not terribly well appreciated that the employees of AIB have borrowed well over €1bn themseleves through various property ventures and the prospect of that debt ever being repaid is diminishing rapidly by the day.”
According to the 2010 half-year presentation, 7% of the 27.1bn RoI mortgage book was to “Staff and Others”.

The Mail reported 3bn owed by staff… there’s a thread about it

So, Lord Morgan Kelly of UCD now fancies himself as a political and economic historian. I thought that he was an economist. I didn’t know that they were the same thing.

That’s because you’re living in a parallel universe. Political and economic historians is EXACTLY what all economists are. An economist who doesn’t know his history is like a banker who doesn’t know how to calculate compound interest. I know we’ve got a lot of both in Ireland, but the more you know.

But, it raises the question: if Ireland was so rich at the time of independence, why did the people at the time go to the trouble of having a War of Independence against the then-mightiest empire in the world? Doesn’t sound like the sort of thing a happy contented well-off people normally get up to?

Are you really from Ireland? I thought you said you were from the North, in which case you would be acutely aware that Ireland’s War of Independence was not something which had universal support among the population in any part of the country. A lot of the country was still doing quite well out of the empire, particularly during the first world war. You might want to factor your income level calculations into that one.

thanks to wikipedia, it is now possible to
unearth very quickly enough statistics to show how absurd Kelly’s claim is.

This source gives GNP figures in 1925:

It was bad enough that you used Wikipedia, but you could have at least remembered that Ireland gained its independence in 1921. I don’t know, maybe time and space have different properties in Northern Ireland or something; it always seemed that way to me.

FF were in government during most of this time. The above figures represent the real record of those FF governments in respect of reversing the inherited depopulation and mass emigration

You’re a troll. You’re a shameless, gleeful troll whose only purpose is to get other posters wound up so that they bite on your bait. Well congratulations, you got me to bite down hard, and here I am calling out your post as a deliberate effort to ignite a flame war in the comment thread with deliberately misleading information and ludicrously inflammatory statements. Fianna Fail!

Your whole 32 county republican protestant FF supporter moving his money to the republic is just too outlandish, and about as believable to me as a lesbian blogger from Syria. At least the likes of the Dork of Cork–demented as he is from reading libertarian sites–are giving their own honest opinions to the debate. You’re just posting whatever’s most likely to wind people up. Even your handle is part of the act.

Please just go. People here are trying to discuss how to fix the country, not argue over whether it’s broken anymore.

@John Sheehan

Conor Cruise O’Brien was a TCD not a UCD man.

JTO again:

Same thing. Yawn!


Dev’s dancing at the crossroads / zero growth policies helped stoke emigration for decades.

JTO again:

Dev was in power 1932 to 1948, then 1951 to 1954, then 1957 to 1959 when he handed over. The economy was growing allready rapidly in 1959 when the handover occurred.

From 1932 on, there was a little event called The Great Depression. I think you will find that few countries experienced growth at that time. Shortly after 1932, the UK declared Economic War on Ireland, because Dev refused to compensate the UK for handing back the land to the Irish that the UK had stolen in the first place.

From 1939 on, there was a little event called World War 2. I think it might have been a trifle difficult to promote export-led economic growth from 1939 to 1945. Most people were happy that Dev kept Ireland out of it.

Although I will need to check out what the growth rates were from 1945 to 1948 and 1951 to 1954, your tally of decades of zero growth under Dev doesn’t add up. FG were in power for almost half the period up to the commencement of the Whitaker /Lemass era, and the other half, when FF were in power, is when both The Great Depression and World War 2 occurred.

However, I haven’t posted here to praise Dev or go back over the 1930s, 40s and 50s, but to challenge Lord Morgan Kelly’s claim that Irish incomes were above the western European average at the time of independence, which is central to the political and historical anlaysis he gave in his lecture.

There must be some economic historians who read this site?

Do any of them agree with Kelly’s claim? Let’s hear.


You’re the one who interpreted the recent census as indicating that 500,000 were leaving annually. Enough said.

I am well aware of the date on which part of the country became independent.

I think you’ll find that economic statistics were not published so regularly back then. Hence, 1925 was the closest to 1921 that I could get in the limited time available.

Calling someone a troll is always the response of someone who can’t argue the point. If you can produce figures that support Morgan Kelly’s claim, let’s be having them. If you can’t, then go back to biting.

Looking at staff numbers in AIB and BoI, I’m not seeing a massively overstaffed system – certainly not 2X or 3X.

Avg. compensation / employee : (includes pension)
Rabobank: 83K
BoI: 71K
AIB: 65K

Total bank revenues/ employee:
Rabobank: 216K
BoI: 196K
AIB: 183K

AIB and BoI groups have 14K employees a piece at end 2010 and intend to cut that by 2K each over the coming years.

If 7% of mortgages are to staff and one in 7 staff is due to go then that’s 1% of the mortgage book affected.

Presumably, most departures will be voluntary or retirement so that’s less than 0.5% of mortgage book impaired as a result of staff reduction. Assume that some staff actually find jobs elsewhere and a recovery rate of 50% on the remainder and you have a relatively small problem (<.25% of mortgage book over a number of years).

Also I’ve just noticed that Kelly’s estimate this month of Irish bank operating expenses at 4.5bn/year is the same as his estimate in May 2010, before asset disposals, cost cutting and job losses.

Anyone want to make the case that AIB and BoI are still hugely inefficient and incapable of turning a profit for the state without losing two thirds of staff?

Your figures do not disprove Kelly’s claim that Irish income were above european average at the time of independence.

Independence was in early 1922 not 1925 that you provide figures for.
The period 1922-1925 which incorporated a civil war, emigration (some say forced) of many wealthier protestants from Southern Ireland and a huge flight of capital with the banks acting in the words of a former minister ” as a conduit for money leaving the country”.

The European economies on the other hand, had since 1918 been recovering from a devastating war and going in the opposite direction to Ireland during that period.

The 1925 figures are therefore a very poor point of comparision for the argument you attempt to make.

Further it was none other than Fianna Fial, that gave us the pro-consul in Dublin, in the person of the tall Hungarian ‘who shouts and wags his finger’ at the no longer independent Irish underlings.

However, it is clear that you are unable to form any rational response in relation to Kelly and have reverted to ad hominen remarks and vitriolic abuse.
I am sure that there are many senior bank executives, present and former government officials and assorted others who would encourage you in your vitriolic attacks.


‘Lord Morgan Kelly’s claim that Irish incomes were above the Western European average at the time of independence which is central to the political and hisporical analysis he gave in his lecture!

Out of interest in what a commentator who called the coming Irish débacle at a time when it was neither popular or profitable has to say today, I listened to MK’s speech a few days ago.

I am at a loss as to where you get the extraordinary “centrality” of Irish income at the time of independence to what he he had to say!

I summarised what I thought he said in two points above. What do YOU think his two ( or three, or four) main points were?

So one of the authors of “Market Contagion: Evidence from the Panics of 1854 and 1857” is now trying to pass himself off as an historian? The cheek of him! Next thing you know, Paul Krugman will be spouting off about geography.

You’re the one who interpreted the recent census as indicating that 500,000 were leaving annually. Enough said.

That’s the second time you have deliberately misrepresented what I actually said. This is exactly what I’m talking about.

I think you’ll find that economic statistics were not published so regularly back then. Hence, 1925 was the closest to 1921 that I could get in the limited time available.

And you should have known that Ireland in 1925 had just emerged from 4 years of war, including a civil war, and was not part of the 20’s boom, and yet your own figures put it at 11 out of the then ~15 European countries. Number 9 of which by the way, is 1925, post hyperinflation Germany. I’ll take Kelly’s word for it; he’s been right so far.

On the subject of Irish incomes at the time of Independence, I refer to Angus Maddison (‘The World Economy: Historical Statistics’ OECD 2003).

In Table 1c he gives data for per capita GDP in 29 western European countries (in ‘1990 Geary-Khamis dollars’).

He gives the Western European average in 1921 as $3,130 (ranging from $4,439 for the UK to $1,290 for Portugal).

His figure for Ireland in 1921 is $2,533. The figures for Ireland are higher is all subsequent years. We overtook the European average in 1998.

Strange that we’ve gotten this further into the thread since JTO’s claim about per capita incomes without any references to Kevin O’Rourke’s work.

If I understand the speech correctly, then the claim is that mass emigration contributed to incomes being ONLY one half the European average in the 1980s. In other words, if there hadn’t been mass emigration then incomes might have been LESS THAN one half of the European average in the mid 1980s.

I wonder is that a widely held view – that in order for this country to have respectable levels of income, there has to be emigration. There is certainly a suggestion that emigration will act as a valve to reduce unemployment but is it not a sickness in our politics that we see emigration as a positive?


I didn’t understand Morgan to be making any comparison between pre- and post-independence emigration. On the basis of population staying more or less static for 40 years after independence you could say that there had been mass emigration in this period, though as you correctly point out, pre-independence it was at an even higher level (depending on what time frame you used). But Morgan didn’t compare the pre- and post-, did he?

Also, can I ask you where did you get the 26 county population figures pre 1926? I had understood that for a variety of reasons (fires destroying records for example) these weren’t available. Indeed a book by Angus Madison (which co-incidentally makes reference to our per capita GDP being 54% of the rest of the UK at independence) states that these figures for 26-county population are not available.

Back to more mundane matters I see the Dow is paring earlier losses rapidly.
But the ISEQ at 2430 is very sick. What was the low point over the last few years.

He gives the Western European average in 1921 as $3,130. (ranging from $4,439 for the UK to $1,290 for Portugal). His figure for Ireland in 1921 is $2,533. The figures for Ireland are higher is all subsequent years. We overtook the European average in 1998.

JTO again:

Last time I checked, 2,533 was less than 3,130. If anyone claims it isn’t, I shall claim that 15 is greater than 22.

Bottom line is: Ireland was supposedly part of the UK in 1921, but its GDP per capita was only 57 per cent that of the UK. It remained at roughly that level relative to the UK until 1958, then increased in the 1960s and 1970s, fell back briefly to something close to that level at the low-point of the recession in the 1980s, before soaring to above the UK level by the end of the century.

However, there is another important point. Ireland’s GDP per capita while part of the UK was only kept afloat by the fact that it was being systematically depopulated. Newspapers like The Times (London) openly boasted that the Irish would soon go the way of the Native Americans (or Red Indians, as they called them then) and become extinct. The population fell each and every decade between 1841 and 1921. It fell by 54.5 per cent between 1841 and the time of independence. No other country in Europe, even the poor ones like Portugal, had that experience. In nearly every other European country, the population more than doubled between 1841 and 1921. So, naturally, such depopulation kept the GDP per capita figure from sinking completely beneath the waves. Even so, even after its population collapse, GDP per capita in Ireland was barely half that in the UK at the time of independence.

Contrast that with today. Ireland’s GDP (even GNP) per capita has caught up with the UK and western Europe, even after its population growth in the past century has far excceded both. The combination is the exact opposite of what was occurring pre-independence.

The thesis that Morgan Kelly is advancing, to great media acclaim, in respect of Irish economic history, is in line with the revisionist falsification of Irish political history that some of his academic colleagues have been engaged in for several decades, also to great media acclaim. It boils down to: Ireland was prosperous and well-run pre-independence, but the post-independence politicians (especially FF) have ruined it. However, as the figures show, its all tosh.


Whilst I appreciate your numbers it now seems per hogans post above that my €1bn for AIB employees is actually closer to €3bn (I hadn’t believed this €3bn number when I heard it some while ago – I recently checked into it and it seems there maybe significant related party debt included here).

Regardlesss of the exact numbers what sort of signal does this send out when potentially significant swathes of this will simply not be paid and are required to be written off?

Your defintion of ‘a relatively small problem’ may very well mushroom into a dire news event if this was to ever get into the mainstream that AIB staff who on leaving were able to negotiate mortgage write downs that was not available to the citizens at large.

Even thinking about it reminds me that the elephant in the room that few are willing to debate, aside from MK it seems, is the truly spectacular error in the value banks placed on Irish property from 2001 to 2007 and the fact that the onus of this asset pricing mistake simply cannot be left on the shoulders of novice property consumers.

The Govts recent put down of the FF paper on this matter indicates the Govt is completely at sea in relation to the matter because of its decision to instruct their Senators to reject the Family Home Bill 2011 before the Seanad debate had even taken place!

@ Eoin Bond or anyone else that might know
Roughly how many Euro would the ECB have to print to bring the price of the 10year Italian bond yields down by 1%

20 th century historical comparisons are of only limited value – sure 1929 & perhaps more relevantly 1914 are of some value as examples but did we ever have the leverage we do now ?
Did we ever had so much exposure to foregin markets ? – maybe during the Edwardian era but you cannot transport a Cork dairy farm like you can do with a multinational.
Almost all of the population are no longer agrarian so the most basic of redundencey of all – the ability to feed yourself is gone.
Our openness & consequent efficiency is our weakness.
The biggest misunderstanding withen the economics sphere in my opinion is the relationship between efficiency & productivity – they are not always the same phenomena , there comes a time when increased efficiency erodes potential future productivity.
Ireland and the western world in general has reached its leveraged efficiency boundaries – using derivatives to reach close to its theoretical peak

@jagdip Singh

I wonder is that a widely held view – that in order for this country to have respectable levels of income, there has to be emigration. There is certainly a suggestion that emigration will act as a valve to reduce unemployment but is it not a sickness in our politics that we see emigration as a positive?

JTO again:

I can’t speak for others, but I certainly don’t see it as a positive. Quite the reverse. I see immigration as a positive.

The experience since 1961, when the population has increased by over 60 per cent, while per capita GDP has increased from around 55-60 per cent of the western European average to around 100 per cent, doesn’t support the thesis that you refer to (although I am certainly not saying that you agree with it). Especially when contrasted with the period from 1841 up to independence and the several decades post-independence, when the opposite was the case.

@jagdip Singh

Also, can I ask you where did you get the 26 county population figures pre 1926?

JTO again:

They are on the CSO website.

They publish them as part of every census report.

Table 2 in here.


If you can work that out you are cleverer than me. If they were to print it rather than mop most of it up, it would itself put upward pressure on yields. That and the imponderable of how keen holders are likely to be to take the bid the ECB provides means I think you could only guess.

For most of the period since the famine Ireland has exported its people and food to Britain. Its relationship to Britain was of a colony similar to the relationship between many Latin American countries and the United States. Such a long term trend was not going to be reversed immediately following independence. However, in the last 50 years it has been reversed. Irish Independence has been successful.

The following statistics come from an article written by Paul Sweeney of the ICTU for a conference in Canada in May 2004.

Net Emigration from Ireland from 1850 to 2010

1850s 800,000
1860s 697,000
1870s 502,000
1880s 597,000
1890s 396,000
1900s 262,000
1910s 116,000
1920s 136,000
1930s 101,000
1940s 250,000
1950s 409,000
1960s 135,000
1970s minus 104,000 (net immigration)
1980s 208,000
1990s minus 37,400 (net immigration)
2000s minus 353,200 (net immigration)

The figures are determined not only by the condition of the Irish economy but other factors such as the condition of the rest of the world. It is interesting to note that in the 1930s net emigration at 101,000 was quite low in historical terms.

The figures do not tell the reasons for emigration or the quality of work Irish emigrants obtained abroad. It is likely, for example, that the expectations of those Irish who emigrated in the 1980s were far greater than those who emigrated in the 1950s.

Note 1: The figures from 1850 to 1924 reflect emigration from the island of Ireland. From 1924 onwards the figures relate to the 26 counties.

Note 2 : the figures for the 2000s come from the Central Statistics Office.

Not if the money flows to a useless metal…. interest rates have nothing to do with real inflation – thats a central bank meme.
Interest rates depend on continued monetory inflation yes but what if credit can no longer expand ? – where does the money to pay interest come from ? – it comes from base expansion rather then credit expansion.
Interest on debt is the extraction of wealth – if there is no more wealth to extract the hyper inflated credit will flow towards a dead monetory asset.

Remember credit has already been hyper inflated to extract oil wealth at the maximum possible rate – when oil production becomes static or falls then credit can really only flow backward to Gold.
Notice the weakness of oil this past week which is really dollars chasing declining returns & the strength of Gold.
Thats the most important signal of a change in the worlds monetory dynamics in my opinion.

@Eamon , Grumpy
Italian are in 79bp now and I doubt if they have spent anything much. The mere threat has the shorts running for cover. incidentally, I understand there is a way to short Italy.
The ECB have enabled all the banks to unload Spanish and Italian …for seems they may be facing a bill of about 800b just for these two.

Dow now going down rapidly… Off 3.23% or 369 points

Anyone know why the DAX is off so much…under the 6000 level now for a loss of 4.3%?

“What was the low point over the last few years.”
1949 in March 2009.

Fwiw, now that holders of Spanish and Italian bonds can offload with little loss to the ecb, it’s interesting to see who’s next in the line. French -bund ten year yields are double what they were a couple months ago…

@Grumpy, Hogan

This market is not making sense. Dax down 5% and 10 year into 2.6%.
Dow off 3% And 10 year down to 2.36. Inverted?

I’m sure I’m one of many silent readers out there who enjoy reading the blog but don’t contribute (due to whatever reason whether it be lack of insight, too busy etc.)

I’ve said this before but I think it’s worth saying again – with the deluge of bad news, economic turmoil etc. it is good to be able to turn to a domestic source of analysis. Thanks to all those who post articles and to all the commenters – reading your thoughts helps make sense of it all…


Looks like a real rout in the USA with the Dow going through the 11,000 level
Gold at 1720.

“This market is not making sense. Dax down 5% and 10 year into 2.6%.
Dow off 3% And 10 year down to 2.36. Inverted?”
It is only not making sense if you believe what RTE are saying about the concerns being about the S&P downgrade and the eurozone sovereign crisis. It is not, I believe. It is about austerity in countries that don’t really need to be doing it (countries that are not Ireland). It is, I believe, a feeling that there is another recession, further deflation and no counter-cyclical spending to come.

If you can get bonds at 4%-5%, fully backstopped by the ECB, would it make sense to dump risky equities and buy bonds? Even Irish ones!.

I concur. It’s about a double dip and if the markets keep falling like this it will be self fulfilling. Dow off 600 at one point I believe and now down 517.

@ Joseph
Short answer is no. On Irish the debt of 200 to 240 b is not sustainable. And what is a backstop of the ECB worth? It is going to be filled up with dodgy paper in no time. I do not believe the German public will buy this scheme.

The market is a monster , the shadow bank sector was bailed out by goverments in 2008 – now if it cannot get “risk free” bonds above inflation it will turn towards Gold.
The Italian situation has finally blown the market up – it was using dollars to get yield in the real economy and destroyed it piece by piece – now all it can do now is retreat to Gold.
The banks are defecting from the prisoner’s dilemma box now – the monetory metals will soak nearly all of the useless credit built up over the last 3 decades.

These S&P guys are working overtime with downgrades of Freddie and Fannie and now threatening Warren Buffets company. Must be because he has 40b of US treasuries.

@John Foody

Don’t you get it, at that point there won’t be any price, just golds. As in how many golds will it take to buy a pack of cigarettes.

@John Foody
Maybe the M0 but I think it will go to the M1 – however the signs on Monday are screaming freegold will oil & silver down & static.
The best & only freegold commentator(FOFOA) in my opinion predicts $55,000 a ounce ! or M3 as Eurodollars & everything else find a home
Thats a sign of a guy following a intellectual position without worrying what other people think of him.
Its sounds crazy but such a large gold price may not bring hyperinflation in the eurozone as dollars will lose their power to bid up basic commodities.

Still the man could be wrong – dollars may be good hedge against geopoltical risk given that America may decide to throw the dice one more time.

Well the Dow fell 634 points and the NASDAQ is worse off 6.9%. So much for Warren trying to talk up the market. Hold tight…the question now must be will the worldwide market rout scupper the ECB bond buying strategy. I can’t see the Germans being flahoolach now that their pensions etc are in danger.

I have seen estimates for the eventual gold price of anything from US$300 to $80,000. The best is indeed around the $30,000 to $50,000 mark, based on a 10% reserve requirement on a global monetary base of $100tn.


I can see some method in the Dork’s “astronomically midget minded” madness and lots of good fun, particularly as his thesis that migration from fiat money ( as a transactional currency in the west) to free-floating gold as a store of value in CB balance sheets will change the structure of society ( no less!) is based on his estimates of the future equilibrium price of gold/ounce ( although he does admit “I have no idea really”) has ranged from $3,000 to 300,000, $300 to $80,000 before settling down now ( for how long?) to $30,000 to $50,000. ( forgive me if I inadvertantly added or subtracted a zero somewhere in there!).

So, on that/those solid bases, what should we DO to anticipate this radically changed society? In which we are are more or less “reductionist” pawns or actors depending on your point of view!

No response yet, on the other hand, from JTO to my challenge ( on the subject of this thread, after all!) to summarise the two or three ( or four) main points of MK’s speech so that he might coherently deal with them! Apart from pre-independence average income in Ireland. Which is somewhat irrelevant today, Tuesday, in “Black August”, 2011. Nest pas?

@ Ceteris
Italian are in 79bp now and I doubt if they have spent anything much. The mere threat has the shorts running for cover. incidentally, I understand there is a way to short Italy.

Eh not exactly, 2-5 billion according to RTE or 8-10 billion according to Eoin Bond was the total intervention. And would guess they bought more Italian then Spanish.

@ Eamonn

2:1 ratio of Italian to Spanish buying it seems. Estimates of yesterday’s buying being pared back to 6-7bn now, but they’ve been as aggressive again this morning, and 10yr yields now around 5%. Equity markets genuinely in a frenzy, opened higher, went into complete freefall, and stabilising at -2% to -3% levels now.

@Richard Fedigan

No response yet, on the other hand, from JTO to my challenge ( on the subject of this thread, after all!) to summarise the two or three ( or four) main points of MK’s speech so that he might coherently deal with them! Apart from pre-independence average income in Ireland. Which is somewhat irrelevant today, Tuesday, in “Black August”, 2011. Nest pas?

JTO again:

My dear Richard, I do apologise most humbly for not rising to your challenge quickly enough for you. I do have a day job, and work is extremely hectic at present, currently requiring 10-12 hours daily. That’s the private sector for you, as I am sure you know. I am not a French public sector employee with a 30-hour week, the whole of August off, and retirement at 50. Time is precious for me. As if this wasn’t enough for my simple northern mind, I am confused, because ObsessiveFreak is requesting me to leave the site, while you are complaining about my slowness in posting a reply to your own.

I think you are being optimistic in thinking that Morgan Kelly would deal with any points I make. He doesn’t do that sort of thing. He doesn’t deal with points that much more distinguished people than myself make. His modus operandi is to make wild predictions, then disappear for six months. Even in his newly-deceased state, there is as much chance of Osama Bin Laden posting on here to deal with any points I make as Morgan Kelly doing so.

I didn’t actually attend Morgan Kelly’s lecture on Saturday night, and I haven’t the time to listen to a one-hour recording. I only have the Irish Times report of his lecture. At the time of his lecture, I was attending the match at Croke Park, the only event taking place in the entire universe that night, which was more depressing than a Morgan Kelly lecture. Compared with the gloom on leaving Croke Park, reading his predictions of financial armageddon and economic destitution in the Irish Times on Monday morning was positively uplifting. However, to keep you happy, as you seem a very civil sort, I will deal with some of his claims, as reported in the the Irish Times. I won’t deal with his claims on Ireland’s debt, as these have been comprehensively demolished by much more competent persons than myself elsewhere.

(1) Kelly claimed that ‘Irish incomes had been above the western European average at the time of independence’.

This claim has now been disproved, both by myself, and by the far more eminent Professor Brendan Walsh. Kelly should withdraw it.

This is not some small point. It goes to the heart of why Ireland fought for its independence from the UK. Kelly is trying to rewrite history, in true Conor Cruise O’Brien revisionist style, whitewashing British rule in Ireland up to 1921, telling us everything was hunky-dory when we we were ruled by the Viceroy, only to have it ruined by the politicians (mainly FF) that the Irish electorate democratically voted for after the Viceroy got the boot. If it was true that Ireland was a rich country in 1921, it would have been stupid to have a War of Independence to end it. It is precisely because it wasn’t true, that the War of Independence took place. Next thing, he’ll be claiming that there was no famine and that nationalists north of the border were well-treated after 1921.

(2) Ditto with emigration. Kelly is pinning the blame for emigration on the misgovernance of successive Irish governments, mainly FF. In fact, As I showed with the figures above, Ireland inherited in 1921 a situation of unparalleled depopulation and emigration, gradually reduced it over the next 35 years, before reversing it completely from 1961 on, so much so that, between 1961 and 2011, the population rose by over 60 per cent, far more than in any other European country and almost identical to that in the immigrant-devouring US, an outcome that would have seemed a pipedream in 1921.

(3) Kelly keeps banging on about the number of houses built in Ireland during the Celtic Tiger era. He keeps saying that Ireland built X times the number in the UK (per capita), Y times the number in Germany (per capita), Z times the number in France (per capita), and so on. He keeps presenting this as if all the houses were unnecessary, as if it was all some sort of crooked scam organised by FF politicians to enrich their developer friends. He appeals to the simplistic minds of the mob in the way he does this.

The facts are far more complex. Ireland faced an unprecedented housing challenge from 1991 on. At that time, housing conditions in Ireland were very poor. The urban areas were full of slums (see The Commitments). The rural areas had tens of thousands of houses that were over a hundred years old and nowhere near the standard required in the modern world. Back then, people from south of the artificial border in Tyrone were horrified, when they travelled north of the artificial border to Donegal, and saw the much inferior standard of housing, particularily in rural areas, there.

Factor in the unparallelled population growth that Ireland had between 1991 and 2011. The population rose from 3,525,719 in 1991 to 4,581,269 in 2011, an increase of 30 per cent. Most European countries recorded population growth of under 5 per cent in that period. Even the immigrant-devouring US managed only 20 per cent.

Factor in the sharp fall in average household size in Ireland between 1991 and 2011, partly as a result of the introduction of divorce and partly due to other factors. Combined with the growth in population, this resulted in an unparallelled increase in the number of households. Between 1991 and 2011, the number of households in Ireland rose from around 1m to around 1.7m, an increase of some 70 per cent. In most EU countries, it was around 10 per cent.

So, Ireland had an unprecedented requirement for new houses between 1991 and 2011. It required not far short of 1m new houses to be built in that period, some 700k for new households, close to 200k to replace poor quality and very old houses that were part of the housing-stock in 1991, and something in the region of 50k or more for second or holiday houses. Up until well after 2000, nearly every report on housing in Ireland highlighted the fact that there was a shortage, rather than a surplus. Even as late as 2002, by which time annual completions were above 50k, an ESRI report highlighted a ‘shortage of new houses’ as a major constraint on growth and advocated a number of measures to increase the supply of new houses. In the event, the house-building industry did over-supply. Too many were built. But, it was relatively marginal, and not a factor of several multiples as Morgan Kelly keeps claiming. Between 1991 and 2011, something in the region of 10 per cent too many were built, producing a significant, but greatly-exaggerated, surplus. I don’t have the exact figures to hand. But, something just under 1m were required to be bulit in that period, and something just over 1m were actually built. Hardly a great crime. Forecasting housing demand in advance is not an exact science, especially when both population and the number of households were growing at the unprecedented rates that Ireland experienced between 1991 and 2011.

Kelly ignores these complexities. He never produces any figures for population growth or growth in the number of households in Ireland in the past two decades, as comapred with other countries, which help explain why there was a much higher requirement for new houses in Ireland than in other countries. He simply says that Ireland built more houses than the UK, Germany, France and so on and, rather than attributing this mainly to Ireland’s much different demographics in the period, he whips up the mob and attributes it to the crookedness of FF politicians and the construction industry.

I agree that house prices rose too much during this period. But, this is entirely separate from the issue of the number of houses that were built, and Ireland’s house price experience, although not its house-building experience, was replicated in many countries. Indeed, if far fewer houses had been built between 1991 and 2011, as Kelly says should have been done, then houses prices would have risen even more. Supply and demand. The oldest law of economics. Given Ireland’s population growth and growth in number of households between 1991 and 2011, if the number of new houses per capita built in Ireland between 1991 and 2011 had been similar to that in the UK, Germany and France, as Morgan Kelly says should have been the case, then, not only would house prices in Ireland have risen far more, but there would now be a massive housing shortage in Ireland, and hundreds of thousands od people living in overcrowded conditions.

(4) Kelly also greatly exaggerates the figure for the share of national income from building houses. He puts it at 15 per cent in the mid 2000s. This is nonsense. The actual figures are given by the CSO in here:

Q4 2007:

GDP at factor cost (all sectors): 40,085bn euros
GDP at factor cost (construction) 2,306bn euros

percentage: 5.753%

Q1 2011:

GDP at factor cost (all sectors): 36,507bn euros
GDP at factor cost (construction) 865bn euros

percentage: 2.369%

These are the figures for the entire construction industry, not just house-building. Kelly’s claim that house-building alone accounted for 15 per cent of
national income in the mid 2000s is bunk.

(5) I notice that, every time one refutes Kelly’s claims, accusations from his supporters on here of making personal attacks quickly follow. Well, Kelly is never loathe to make personal attacks on his political opponents. As they are now out of office, let’s ignore all the personal attacks that Kelly has made on FF politicians over the years. Let’s look at what he is saying about FG politicians. From the IT: “Want a mortgage? Maybe you should join FG. As Kelly sees it, political patronage will revolve around the power to dispense bank funds”. I am no supporter of FG. Very few northern nationalists are. But, the idea that FG ministers are now going to decide who gets or does not get a bank loan, on the basis of whether or not they vote for FG, is ‘pre-adolescent revolutionary’ bunkum. Frankly, they should sue him.

(6) Finally, all of Kelly’s hysterical predictions of civil and social unrest in Ireland, of a breakdown of the political system in Ireland, and so on, are spectacularly failing to materialise. The most recent polls show combined support for FG and FF is up since the election. Unlike most European countries, extreme right-wing, extreme left-wing, racist, fascist, marxist parties have made no headway at all. There has been a complete absence of civil disorder in Ireland during the recession. It is not Dublin and Cork that are on fire this morning, but London and Birmingham. It is not the Dail that has had to be recalled for an emergency sitting, but the House of Commons. It was not the Dublin v Tyrone match that had to be postponed because of riots on the streets (although I wish it had been), but the England v Holland international. Kelly should look elsewhere for his civil, social and political breakdown.

Not sure you can add all currencies to calculate this new number – the freegold thesis is very dollar centric as it is the reserve currency until it becomes not.
So I think its max at M3 is $55,000 a ounce I think – but thats very extreme even for this Dork.
Once it approches M1 I am out.


‘as you seem a very civil sort’

Well, I hope I am a fairly civil sort but, although I was an Irish “civil servant” of sorts ( in a “marketing” semi-state in Dublin and France) for a very short period (7 years) many moons ago, I have spent the rest of my career in the private sector, virtually all of it in what are called “export markets” in Ireland and have certainly never been a French public servant with the list of perquisites you mention.

In a last piece of full disclosure, I should “confess” that, in a youthful “left wing” phase of my development (sic), I knew quite well and worked quite closely with “revisionist” Conor Cruise O’Brien ( before and while he was “in government” in the early 70s) and even accompanied him on many occasions as he fielded doorstep complaints about cracked walls from harried housewives ( and potential electors) in some of the North Dublin Commitments-style Corpo “slums” you refer to in your post. ( He was completely out of his depth and helplessly admitted as much).

I believe you when you say you’re very busy, “time is precious” for you and can only conclude that you wrote your very long ( even by your standards) post in response to my challenge because you didn’t have time to write a short one!

( I already SUMMARISED in two points that I took from his talk much earlier in this thread and was particularly taken with his “patronage” thesis, instantly recognisable to me at least).

After almost 40 years doing business in “export markets” ( nearly 30 based but still “global/international” in France) I tend to look at Ireland if not as a “foreigner” then through “foreigner” eyes. ( Believe me, the French get quite a shock when I turn my eyes on them ‘cos they think I’m fully assimilated, integrated, call it what you like).

Listening to MK’s speech through “foreign” ears and eyes proved an enlightening experience and an accessible alternative to the sound-bite view of us as a bunch of fiscal dumpers who lost the helicopter and mansions run of ourselves and ended up where we deserved to be with the Greeks and other spendthrift peripherals currently ruining the Franco-German economic and political miracle. “And haven’t the Catholics started killing the Protestants again? Or is it the other way ’round?”

I respect your statistical scholarship and precision on issues like pre and post-independence income, population, emigration, exact housing numbers and proportion of the economy/national income construction represented.

Your conclusions ( “I agree that house prices rose too much but”) read from “out here” like quibbles ( ‘tergiversations’) and prevarications as well as free passes for some of the political and financial criminals that most Irish people seem to agree were hugely responsible for our sorry state.

I happen to agree with you ( and disagree with MK) about civil unrest and breakdown of the political system in Ireland, for now, but salute his pointing up of a phenomenon that is a major threat in Europe and the US right now.

All in all, it would be awful if you took ObsessiveMathsFreak’s advice to “leave the site” ( I’d miss you terribly!) but maybe Morgan Kelly’s speech ( which already would resonate with an international audience) would benefit from a few of your “corrections” if you were a bit more ‘synthétique’ and got out ( of Ireland) a bit more.

Anyway, yor a terrible man!

@Richard Fedigan

I have certainly never been a French public servant with the list of perquisites you mention.

would benefit … if you were a bit more ’synthétique’ and got out ( of Ireland) a bit more.

JTO again:

I do apologise. Sloppy wording on my part. I never meant to suggest that you lived the life of a French public servant. I know that you are a businessman.

However, I do get out of Ireland a lot. I work a couple of months of the year in California. I spend several months a year on business in Britain. In the past couple of years alone, I have made business trips to China, France, Switzerland, Belgium and Austria, and pleasure trips to China, Vietnam, Turkey, Soutern USA, French Alps, Iceland and Morocco. In fact, I am posting from outside Ireland right now, from Britain no less, although I hope to catch the last refugee train back to Ireland tonight if the riots continue.


‘However, I do get out of Ireland a lot’.

Well, good for you ( and thanks for the gracious apology).

I suspect it’s only thee and me reading this thread now that more pressing issues ( like the civil unrest exaggeratedly predicted by Morgan Kelly, albeit many miles “away” in London)! are claiming the world’s attention so just a few points.

I have an extremely well-traveled and well-educated (French) friend ( he even speaks passable English, gasp!) about whom, in our very “multicultural” ( and therefore “failed model”) circle the consensus is that he has seen pretty much everything but understood very little.

Although he comes from a very different “class”, he’s a bit like the early wave of English package tourists in Costa d’El Splash self-catering villas who couldn’t find a decent cup of tea, crinkly chips or Watney’s Red Barrel anywhere.

He regales everybody with tales of how the boudoir arts of Louis XIV’s mistresses were central to establishing France’s global greatness and usually ends up with confident predictions of how many gold medals France will win at the Olympics in fencing, archery and, of course, handball.

If Myles ( na Gopaleen, of course) were still around, my friend Alain would feature prominently in his “Dictionary of Bores” and not just because of his alphabetical precociousness.

Here in France at all education levels and in all “classes” there is a shared, orthodox historical “catechism” that has never benefitted from “revisionist” re-interpretations à la Conor Cruise. “We” are therefore fully “on song” and sure of our “exceptional” position in the world, a Great Power, militarily, economically and culturally.

This global “positioning” is regularly and ceremonially reinforced ( at some public expense, it must be said) by, for example, military parades down the Champs Elysées ( not in period costumes but with “modern” up-to the minute, made in France heavy weapons and jet fly-pasts) as well as celebrations of heroic résistance heroes. Of which there are/were almost as many as in the GPO at Easter 1916.

Last year in Paris, I had the great privilege and pleasure of meeting and chatting with (Professor) Robert O. Paxton, whose “Vichy France: Old Guard and New Order 1940-1944” was banned here when it first came out in 1972. Sales of his new edition are not going well in France.

During our chat, we came to the conclusion that, despite the copious German, US, Russian, British source material and statistics ( not so much French – embargoed or unavailable!) in his old and new editions, perceptions of the (Vichy) period, although it has now been officially condemned, have not altered France’s fundamental perception of its past, present or future.

Based on a certain “non-revisionist” i.e. ignoring the facts and statistics) concept, shared by those who are really “French” ( although the government-sponsored national debate on “French identity” reached no consensus and not-so-quietly collapsed) France’s future is assured, y’see!

I heartily recommend Bob Paxton’s book to a statistician like yourself.

Another tome you might peruse ( time permitting of course) is “Dangerous Games: The uses and Abuses of History” by Oxford’s ( Warden of St.Anthony’s College) Margaret McMillan.

With your permission, I’ll end with a quote from her “Paris 1919” which, I believe, neatly links Morgan Kelly’s short ( and no doubt imperfect) “historical” speech, his identification of education as a key vector for Ireland’s future and a possible negotiating position for Ireland as a hopelessly indebted peripheral economy vis a vis Germany and its bankers, the, at the time Ms. Mcmillan was writing about, twice-defeated Great Power in Europe.

“On October 3 ( 2010) Germany Finally paid off the interest on bonds that had been taken out by the shaky Weimar government in an effort to pay the war reparations imposed by the treaty Of Versailles ( 1919).

…” In 1953, West Germany agreed to pay the interest on its interwar bonds and make compensation to claimants who were forced into labour – but only when it was reunited with East Germany. The Agreement is often held up as a model to economically troubled countries for how to settle outstanding debts.

Perhaps Greece and Ireland and thir debtors should be taking a look at it. And perhaps we should not be so quick to condemn the decisions of the past, but recognise that sometimes there are problems for which there are no easy solutions.

In my view Germany could and should have made reparations for its aggression in Wprld War I – but was the risk of renewed war worth forcing it to do so?”

So, John, plenty in there for an orthodox historian and statistician like yourself.

Oh! And anything you can suggest to help me convince my “orthodox”, statistics and “revisionist” history-impervious friend Alain of the relevance of Dublin-Tyrone at Croke Park ( as opposed to French world mastery in handball) would also be much appreciated.

Très Cordialement, Richard.

I think Ireland might qualify against all the odds. We can certainly rely on Fedigan and DOCM to neutrailse the Franco German threat in midflied. We could be doing with a few more scouts in the Italian and Spanish camps though.


Well I thought this thread was over but it’s interesting that Miriam, in her amusing Irish Times “live action” piece, also took away one clear message, nothing to do with the international crisis, about what got us into the mess and will keep us “banjaxed” and in “unfolding misery” for ten or more years: the political patronage/”clientelism” point.

Perhaps with our dumbed down educational standards unlikely to rescue us in the short term, we really should ( as I’ve said before) examine our own collective consciences more rigorously and embark upon real, root and branch political reform at least to curtail the power of “gold-plated semi-states” dispensing resources we don’t have and patronage that has no real substance.

A gold-plated empty banana to replace the harp on my/our passport(s)?

And a showbiz version to be awarded in a glitzy ceremony ( why not in the Pro-Cathedral?) to the political, financial or economist “patron” of the year, every year, until all our debts are paid back?

Maybe the intermission(s) would produce another “Riverdance”. Enough! Ca suffit!

@ Richard Fedigan

Tout à fait!

Politics is also an inexact science. Perhaps learning from our ‘experience’ (here’s hoping), I like to think that we’re slowly filtering this type of ‘politicking’ out of our ‘system’ – well to some degree anyway – via more divestment in wasted Fas-like bodies, Regulation, Accountability … and hopefully a greater tendency to watch our pockets and votes!

Just for now, I’ll vote to keep the harp, but I will hold off getting the beeswax out just yet….

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