Whingeing

We have a narrow definition of whingeing in this country, it appears.

You might think that someone who represents a rich constituency complaining about value-based property taxes “punishing people for their address” could be fairly described as whingeing. Indeed, you might think that such a person should be reminded that “The country’s in crisis. We can’t put our fingers to our ears and pretend it’s not happening”.

Apparently not. Whingeing, it seems, is a concept that only applies to people complaining about cuts to the public services on which poor people rely, not to people complaining about higher taxes on people in expensive neighbourhoods.

163 replies on “Whingeing”

Would you mind pointing us to the bit where she complains about “higher taxes on people in expensive neighbourhoods.”? Exactly which expensive neighborhoods does she mention in the piece? You might also give us your thoughts on her proposal that “ability to pay should be taken into account.” when developing a property tax. She mentions that increments for the public service should be stopped, a policy that would have a greater impact on people with above average incomes and would reduce the need to inflict cuts on the “public services on which poor people rely”. Do you think this is a good idea?

Answer the question, where does she complain about “higher taxes on people in expensive neighbourhoods.”? She clearly refers to “urban dwellers” – ie the contrast she is making is between having urban and rural.

You might give us your perspective on the increments as well if you’re not too busy polishing your conscience.

@Kevin O’Rourke

“not to people complaining about higher taxes on people in expensive neighbourhoods”

That would be ‘legitimate and necessary lobbying.’

It’s good to be back.

@ All

This government’s “to do list”, provided by Ian Talbot of Chambers Ireland, if implemented, might obviate the need to raise income tax.

http://www.irishtimes.com/newspaper/opinion/2012/0904/1224323574395.html

It needs, of course, to be accompanied by measures in other – private – monopolistic sectors of the economy and coupled with other essential reforms as identified by the Troika (which, at least, have a chance of being implemented) as part of a national package deal.

On present evidence, the current government is incapable of organising and getting popular agreement for such a deal.

DOCM Says:

“She believes the Government will “avoid touching income tax at almost any cost”.

Why?

This is a very serious question. What the govenment is proposing re property tax and then banging the drum about not putting up tax on income is a farce. This is money that working people have already paid tax on, this is their after tax income.
It reminds me of the ad for insurance fraud, they are dipping their hand into your pocket, smiling at you and telling you they are not really taxing you. Yes they are!
It’s time that the government were honest, but I do not hold out much hope of that.

Johnny Foreigner: You seem to have missed this crucial bit:
“People should not be punished for their address”

Who said it was hard to make a man say the truth when his livelihood depends on saying the opposite. or something like that. No PR Guy I am not looking at you.

Young Jimmy down the road, 3rd class in primary, plagiarised Lucinda’s recent piece on fraternal relations with Germany in the Irish Times – and was delighted to get a “C” grade from his temporary teacher with the note: ‘had you mentioned the names of a few Germans it would have been a “B” grade’ but then again Germany is a big place far away!

@Dick_een Roche

Cum Bak – nearly all is forgiven – Oh for the glory days of your 11 hour tutorials to the EU Commission on ‘your’ Irish Economic Miracle! The gaps is Wikla are open.
@Colm Keavney

No need for an election. Simply swap places with Fianna Fail and do the decent thing. If Labour approves these €130 million cuts on the aged, disabled and helpless it is toast.

@Niall

Well done for what? The whole premise of the original post is false, Creighton did not complain about “higher taxes on people in expensive neighborhoods” as Kevin O’Rourke claimed. She complained about urban dwellers in general being punished by a value-based property tax. Someone living in a tiny two bed house in Crumlin will pay more in property tax than someone living in a 5-bed detached house in Cavan under these proposals – this is what she is complaining about. The original post misrepresents this.

Remind me again how many women post on this site?

@ paulr

I agree that it is a very serious question but among many others. One of the disadvantages of a rise in income tax is that it would penalise all taxpayers, including those contributing unequally to the resolution of the current crisis.

Coincidentally, the following letter appears in today’s Irish Times.

Sir, – Eighteen months in power and it has finally dawned on a Government Minister, James Reilly, that the way to cut our huge deficit is to tackle public sector pay, which accounts for 80 per cent of spending.

These salaries were set in the madness of the property boom by benchmarking. Tax revenues are back to 2003 levels, a 28 per cent drop, so that’s where salaries should be.

It’s time for the Government to do what we elected them to do, but as their own salaries and pensions are linked to Civil Service pay I won’t hold my breath. – Yours, etc,

CHARLES McLAUGHLIN,

St Kevin’s Road,

Portobello,

Dublin 8.

@Garo

The address she is referring to is urban address vs rural address – she clearly refers to ‘urban-dwellers’ as a class of people who are being discriminated against by the proposal.

@DOCM

‘Why?’

Grover says so. I’m sure you know Grover from your T-Party days, however ad_koch.

From the other IT article on the interview:

“She also said people living in Dublin and other cities should not be discriminated against and “punished for their address” when it came to paying the value-based property tax. Square footage should be taken into account, along with ability to pay.

In an interview with The Irish Times, Ms Creighton argued against a site valuation tax because “people living in houses where you literally cannot swing a cat in Dublin will be paying the bulk of property tax and I don’t think that’s fair”.”

http://www.irishtimes.com/newspaper/ireland/2012/0904/1224323575035.html

@Kevin

I got the impression “Whingeing” was almost exclusively reserved to describe anyone attempting to point out the absurdity of the Croke Park Agreement. Certainly appears to be so on this blog anyway.

I must say, I agree with JF in so far as she’s really referring to urban (expensive and inexpensive) vs rural, something I agree with, considering it is cheaper to provide services for people in cities why should the state incentivise them to live in the country?

Also she does mention PS increments, Im sure a fair few who voted for her has got them over the last few years. Shes also a Mayo woman, so arguing for high property taxes for the country isn’t 100% in her interest.

She’s only whinging about those whinging about what they’ve agreed. Which isn’t much to whing about.

She’s not my favourite politician but on this occasion I can’t find any fault with what she’s saying.

The Labour backbenchers are defending the terms and conditions of their electorate- CPA etc. That transfers the burden onto services DOD is being economical with the truth again. A good deal of the 130m cut is in capex lite- equipment. That of course means poorer service next year but when staff come first that is inevitable.
If you read LC comments, she seem to be arguing for a site value tax rather than a anti Dublin value tax. I thought that was what most of the commentariat wanted.

What does the good professor want- massive hikes in the MTR to preserve public expenditure on universal payments & the T&Cs of his erstwhile buddies.

“On property tax, she said urban dwellers should not be “punished for their address”.

This is Standard Indo spin. The poor Blackrock craythurs, god love them. Any chance of a map of Ireland broken down by income levels ?

@ Grumpy

“I got the impression “Whingeing” was almost exclusively reserved to describe anyone attempting to point out the absurdity of the Croke Park Agreement. Certainly appears to be so on this blog anyway.”

Really? That wasn’t my impression. I thought the peasants on the blog were mostly anti CP.
Did you perhaps fall down the banister this morning?

@ JF The Government of which she is a member, has a choice in relation to property taxes of going for a site value tax, which has been sidelined. This of course would be a more efficient basis.

In relation to general issues, I would add

“Here is an interesting fact from the recent EU Tax Trends Report: our taxation structure is characterised by a strong reliance on taxes rather than social security contributions.

In fact, social security contributions represent a meagre 5.8 % of GDP compared to an EU-27 average of 10.9 %. Indeed, we have the second lowest social insurance contributions in the European Union.

The very low social security contributions result in one of the lowest level of taxes on labour in the EU (11.7 % of GDP compared with 17.1 % in EU-27

The consequences of these figures have been starkly brought home to me by initial drafts of the actuarial review of the SIF. This shows that the fund has a significant short fall of about €1.5 billion.”

Joan Burton: Speech at the Tom Johnson Summer School

John Foody: “She’s also a Mayo woman, so arguing for high property taxes for the country isn’t 100% in her interest.”

Maybe just 99%. She represents a Dublin constituency. The reference to “houses where you literally cannot swing a cat” is obviously a plea on behalf of who live in expensive places like her constituency. (Admittedly there are some relatively inexpensive areas in Dublin South-East, but there’s not much doubt that she draws most of her support from the affluent.)

@seafóid

You are quoting out of context.

This thread is a classic microcosm of the standard of public discourse in Ireland. Here is what should happen next. Prof O’Rourke should post an apology to Lucinda Creighton and then close the thread.

But that won’t happen because it would be the honest and decent thing to do. Luckily it will live forever on the internet as a testament to what happens what you make a lazy dig at a supposedly easy target.

Five years into the crisis and we still don’t seem to be discussing the basics of money creation/destruction in a system that’s clearly unfit for purpose. It will be even more unfit for purpose as we tend towards a balanced budget.

Thankfully there have been four articles recently published in the Financial Times, the Economist, the Guardian and the Independent discussing fundamental reform of the banking sector as a solution to the crisis. I’ll provide the links if anyone wants to read them.

Even more encouragingly, the IMF recently published ‘The Chicago Plan Revisited’ which describes a very thorough analysis of full reserve banking and ultimately concludes its a system that would work better than the current one on almost every front. The full text can be read at:

http://www.imf.org/external/pubs/ft/wp/2012/wp12202.pdf

It’s well worth a read.

Aithníonn ciaróg ciaróg eile!

Here we go again with an argy-bargy much more preferable to setting out the serious choices facing the banjaxed country.

On Sunday, Colm McCarthy provided a credible blueprint on what should be done rather than the current commitment to no changes in public staff benefits and income tax rates.

http://www.independent.ie/opinion/analysis/colm-mccarthy-its-hard-to-pick-the-fruit-with-your-hands-tied-behind-3216849.html

The latest is that the €1.5bn in allowances maybe adjusted for new staff — this cowardice will surely meet its match at some point before the European Court of Justice.

I was thinking earlier that the academics had been AWOL from the blog in recent times and we get this.

At least Creighton has something to say. Are you going to remain silent for fear of upsetting someone’s applecart?

It’s not even an issue of public v private.

There are several sectors who are doing well from the lack of interest in reform in universities for example, the large number of private sector insiders who are directly in receipt of public largesse or indirectly because of the failure to change broken systems — wonder about the good times in the Four Courts.

It’s far from strange that a minister such as Brendan Howlin is not going to introduce any significant reform. He is doing well from the present system and like the silent academics, why would he become an iconaclast?

Besides, the euro has a much better chance of holding value than the stress of trying to keep a punt in the doldrums.

Meanwhile, pray for a miracle to bring jobs — another unpalatable issue that maybe should be avoided.

@ Niall

Are you arguing for a decent pension system for the private sector?

First things first;

Lucinda is about four years and at least one billion too late on ‘musing’ about not paying increments. i.e salary increases to people in secure employment. But I’m sure it was best to get elected to a well paid job and well settled in before bringing that up.

Secondly:
You can punish people for their age, their poverty, their lack of employment, their poor education, but damned if you can punish them for their address.

Thirdly: Nobody said the health budget was not big enough. The fact is that far too much of it is going to upmarket postal districts.

Finally: Does the failure to tackle allowances, have anything to do with the elected representatives unwillingness to reduce their allowances; such as the travel allowance of €5,000 paid in one month to a FG TD, from Sligo / Leitrim. Enough mileage, according to the media, to drive to Katmandu and back.

How about a 33% across the board cut in all allowances (ALL) which currently run to €1.5billion, thereby saving €500 million in 2013.
Any takers in the governing parties!

@JF

It’s high politics. Who gets shafted.

In the Indo they will keep the message to “urban dwellers are punished for their address” while “Square footage and ability to pay should be taken into account” is ignored. “Punished for their address” is the spin. Maybe PR guy knows who made it up.

Creighton is playing to her voters. The whole property tax moan is pure pantomime.

If the country can’t sort it out pronto the IMF will.

Reading political PR these days is very interesting.

And furthermore the big losers in the unwinding of the Tiger are the young and the poor but you’ll never hear any spin on those who are “punished for their age” or “punished for their Leaving Cert results”.

@seafóid

“you’ll never hear any spin on those who are “punished for their age”

From the article:

“Ms Creighton said young people have borne the brunt of the financial crisis and the situation could not be allowed to continue. “From what I have seen, the people who have been most disproportionately hit are the youngest people right across the Civil Service,” she said.

“New entrants, whether it’s teachers or civil servants, the entry-level salaries and pay and conditions that they are entitled to are a far cry from what people 10 or 15 or 20 years more senior are entitled to.

“I think young people have taken that on the chin. It’s a very difficult time. People have said, ‘I’m lucky to have a job’.

“But young people have borne the brunt of this crisis to a huge extent and I don’t think that can continue. I think it’s important that everybody shares the burden.””

@ JF

It’s more sophisticated than that. What people will remember is
” punished for their address”. And it’s going to come across the media.
And not all newspapers go into the depth that the IT does.

As for the young, it’s plámás. They don’t vote en bloc and they don’t organise.

Even “From what I have seen, the people who have been most disproportionately hit are the youngest people right across the Civil Service,” she said.

Really? CS boxwallahs have been hit more than anyone else ?

Irregular verbs: I express concern, you complain, he whinges.

Obviously Kevin O’Rourke is right about what’s going on here. It’s the usual ploy of delegitimizing an opponent’s agenda by protraying it as the the whining of a spoilt brat. Nothing new about that.

I can see why commenters might suggest that Kevin shouldn’t waste his beautiful mind on this shite, but I can’t for the life of me see why anyone can suppose that he owes Lucinda Creighton an apology for pointing out what she’s doing.

Perhaps the reason so many Irish academic economists tip toe around the question of public sector pay rates is that their own pay packet is reliant on the tax payer!

The silence on the issue from the ESRI, UCD etc is striking, compared with the animated commentary on so many other topics!

@John Foody

“I must say, I agree with JF in so far as she’s really referring to urban (expensive and inexpensive) vs rural, something I agree with, considering it is cheaper to provide services for people in cities why should the state incentivise them to live in the country?..”

Whilst this sounds about right on a per capita basis at an individual level the story can be very different. I live in a rural area, I’m a member of a local water scheme (sign up costs €4,950) and I’m metered, I have my own septic tank system – installed in accordance with EU criteria (installation costs and related €8,320) and it requires an electrical connection 24/7 *365, I had an ESB pole moved when I moved in (cost €4,390), I paid the local county council a fee on building my house (cost €3,650), I sweep the road in front of my house and cut the grass and weeds from the ditches close to my house so to avoid a potential accident (cost ??).

More costly to whom exactly in providing services ?

Bottom Line: No government can spend more that it steals, loots, sequesters, inflates from taxpayers -irrespective of the source of the revenue. If any gov actually borrows for day-to-day spending then that means future revenue is automatically curtailed. We have now arrived at that place: taxpayer incomes are declining, hence tax revenue will decline also. There will be no Miracle Grow to save us.

Politicians get elected because they keep promising their voters that ‘they will be taken care of’. Not because those politicians promise continued tax increases, reductions in public services and less salaries, wages and pension entitlements. Which is where we are headed.

Lucinda’s crying into her South Dublin Beleek China tea bowl. The big difficulty with any sort of ‘property tax’ (or whatever you want to name it) is that the asset classes of land (building site) and residential homes are decreasing in value (albeit at different rates) so any regime based on value has to take account of this diminishing return. And then you have the follow-on problem of diminishing nett incomes from which the property tax will be paid out of. Its one gigantic, political mess. But our heroes in Leinster House will rise to the occassion and produce an outcome proportionate to their desire for re-election. Count on it.

@JF

“Would you mind pointing us to the bit where she complains about “higher taxes on people in expensive neighbourhoods.”?”

It’s very simple. With a value-based property tax, people will pay more tax on a more valuable piece of land. Hence “punished for their address”. Hence, also, “higher taxes on people in expensive neighbourhoods”. With the corollary “lower taxes on people in less expensive neighbourhoods”.

Shouldn’t 10,000 square feet in Ballsbridge, attract a higher tax than 10,000 square feet in Crumlin? And 10,000 square feet in Crumlin be taxed more than 10,000 square feet ten miles outside Ballinasloe? You may not agree with that, but your argument with KO’R is a basic failure of reading comprehension on your part.

@Kevin Donoghue

He owes her an apology because he misrepresented what she said. Why is that so difficult to stomach – it’s just good manners?

@Fearghal

Kevin O’Rourke is the one who used the term ‘expensive neighborhood’. Lucinda Creighton made no such reference. She used the term ‘address’ in the context of a contrast between urban (as a whole) and rural (as a whole).

@seafoid

You are right, the blog’s plebs seem to be predominantly anti-CPA, but the plebs don’t matter that much beyond the cohort that makes up the regular readership. The blog’s gentry are basically silent. Maybe they have no view or think it of little economic consequence.

From the pro-CPA contributors, initially there was the ‘its our Keynesian duty’ defense, but that got kind of shot down a while ago since the money would have to be ‘saved’ elsewhere as a consequence. Lately ‘la la la la – I’m not listening’ has been the usual reaction, sometimes characterisation as ‘more whinging about CP’.

No problems with the banisters today. May have to re-assess the theory it was a predictive text virus spread by the banking lobby or the squid or something.

@Johnny Foreigner

Watch out. Your contributions have already been deemed “awful” after informing us of 6500 Euro increments last year and P@u l Hun£ seems to have become unmentionable.

@Kevin Donoghue

Contrast these two statements.

LC “people living in Dublin and other cities should not be discriminated against”

becomes…

KOR “people complaining about higher taxes on people in expensive neighbourhoods”

Unless Kevin O’Rourke believes that everyone who lives in a city also lives in an ‘expensive neighborhood’ then he has misrepresented Lucinda Creighton and he should apologise for doing so.

Good thread.
This is politics more than economics – FG roasting labour on a spit.
Labour took a gamble. They thought that there would be light at the end of the tunnel about now.
Labour have 3 choices
1: Stick to CPA (which will have to be renegotiated prior to the next election anyway)
2: Abandon the CPA (which they might be respected for)
3: Target hospital consultants rather than tackle CPA or welfare reform which buys time but not much and still leaves 1

And on another point there should be zero tolerance for any government minister blaming the Troika.
Article 6 of the Irish constitution states that only a government can “rule” the state. If the Troika are “ruling” the country then the constitution has been breached and the government are refusing to defend it.

So either accept responsibility for the cuts or defend the constitution (I haven’t put this well)

I think they’ll go for option 3

@ Grumpy

I thought at first that banister must have been some form of investment slang. Maybe it could become one.

What happened to PH ?

JF
There is not a snow ball chance that an apology will come from the Good Professor. The high point of his day is to dish out criticism to mere politicians irrespective of the merits of the arguments. Back to the common room for a good lunch, a decent claret and a moan about the Tories/GOP/Germans.

Fearghal: “Shouldn’t 10,000 square feet in Ballsbridge, attract a higher tax than 10,000 square feet in Crumlin? And 10,000 square feet in Crumlin be taxed more than 10,000 square feet ten miles outside Ballinasloe?”

That’s the issue in a nutshell. Johnny Foreigner, your attempt to turn this into an urban-rural issue simply misses the point. I see no reason to suppose that Lucinda Creighton had that in mind. AFAIAC “Square footage and ability to pay should be taken into account” is a statement which applies within cities just as much as between city and country.

Anyway I doubt that you would be much happier with Kevin if he had written:

You might think that someone who represents an urban constituency complaining about value-based property taxes “punishing people for their address” could be fairly described as whingeing.

His main point would be unaffected.

@TM

The strange thing about an apology is that once you’ve done it once, you realise it wasn’t as bad you thought, and lots of people respect you for doing it. Unfortunately we live in an age where saying sorry has become synonymous in many people’s minds with ‘defeat’.

@Kevin Donoghue

“your attempt to turn this into an urban-rural issue simply misses the point”

For the last time, this is what Lucinda Creighton said:

“people living in Dublin and other cities should not be discriminated against”

Do you see the words ‘and other cities’? What on earth do you think she meant if not that the proposed property tax was unfair to urban dwellers (a phrase she explicitly uses in another part of the interview)?

Whinging. Excuses. It’s all this country has done for 5 years.

We’ve whinged, whined, and kicked as the recession has taken away all of our toys one by one. And no wonder, as those who whinged loudest and kicked hardest had their sweeties given back by a coddling government.

Those of us who kept our mouths shut and tried to think of the country before ourselves ended up paying up, so that the brats in the ascendancy could continue to be spoiled in the manner to which they have become accustomed. Businesses go under and the disabled are left to die in their chairs so that bankers and secretaries can keep their bonuses and increments.

So whinge, whinge away sweet people of Ireland. The State is giving out prizes, fortunes untold, to the greatest whingers and kickers in the land. They who can screech most shrill, shall have their will—of the rest of us naturally.

Johnny Foreigner,

Yes, thanks, I do see the words you refer to. So what? She’s ‘whingeing’ on behalf of the propertied in Cork and Galway as well as those in Ballsbridge. So what? Does that make her stance any less deserving of a post tagged Chutzpah, special interests.?

@ All

This is a very lively thread because it is getting to the heart, indirectly, of a number of core issues which simply have to be addressed.

One of them is the issue of moral hazard – the buzz word of the moment – to which the writer to the Irish Times drew attention.

“It’s time for the Government to do what we elected them to do, but as their own salaries and pensions are linked to Civil Service pay I won’t hold my breath.”

The breaking of this link must be an absolute priority. As to how it arose (Chapter 7; page 57)!

http://www.finance.gov.ie/documents/pressreleases/2001/report38.pdf

P.S. The Chairman of the Labour Relations Commission should get out more and stick to his last.

@Kevin Donoghue

“So what?”

You said that my “attempt to turn this into an urban-rural issue simply misses the point” Lucinda Creighton was talking about an urban-rural issue. By showing you the actual words she used I was demonstrating that I was not missing the point.

@ JMK

You have hit the nail on the head with regard to the “hear no evil, see no evil speak no evil” attitude of the nomenklatura, of which academics are a significant part. But as you can see from its formal charter above, its ranks are serried (and banks now in state ownership seem to have clambered aboard). Unfortunately, the craft is holed below the waterline.

@docm

There are vibrant Naval Architecture forums on the interweb. I am confident that on any one of them an acusation such as:

“Unfortunately, the craft is holed below the waterline.”

…would elicit willing and intelligent discussion.

In economics you get “………..” .

21st February 2011

Dear Mr Corcoran

I am very aware of the strength of feeling on the subject of commercial rents and Fine Gael has addressed this subject in our manifesto as part of a drive to cut business costs by strengthing competition in sheltered sectors.

Specifically, in our manifesto we have committed to pass legislation to give all tenants the right to have their commercial rents reviewed in 2011 irrespective of any upward-only or other review clause.
Please do not not hesitate to contact me if you have any queries in this regard.

Best wishes
Yours sincerely

Sean Barrett TD

@DOCM
“The Chairman of the Labour Relations Commission should..”

He got a very soft interview on the RTE News at One. At one point he said that managers were trying to come up with ‘innovative’ schemes to reduce expenditure.
Well how innovative can you get! Cut the home help from from the sick and dying. How innovative is that.
From my perspective the interview was nothing more than a PR advert for the Croke Park Agreement, facilitated by RTE.

It seems to me that the CPA has taken on a status once reserved for Articles 2 and 3 of the constitution or for the GAA rule 21. Not to be questioned in polite company.

You are certainly correct on one point. The government, in any negotiation on PS salaries or expenses, keeps its keenest eye for the impact on their own pockets.

Folks, Johnny Foreigner is trolling (and not amusingly) and since the editorial policy at The Irish Economy is very generous show a little restraint and ignore him.

On Kevin O’Rourke’s initial post Lucinda is just defending the interests of her wealthy constituents who did not get rich by paying taxes – it is a perfectly understandable position.

I do not think she is even being hypocritical – Lucinda Creighton has no principles to betray.

She is simply serving her class interests rather than any national ones, her set of voters being far more likely to have access to private health care and far less chance of having chronic poverty related illnesses.

@ Grumpy.

Thanks

@all at all at all

The chutzpah and special interests tags have been gathering dust for a long time. Presumably the “Banking crisis” category could be subsumed into “special interests”

@Kevin O’Donoghue

If Kevin O’Rourke wanted to make the point that Lucinda Creighton should not have used the term ‘whingeing’ to describe people who are resisting public service cuts then he should have done so without misrepresenting her position on property taxes.

@Shay Begorrah

“Lucinda Creighton has no principles to betray”

Take a deep breath, walk away from the computer, talk to a friend. Think to yourself, ‘did I really want to type that’?

@Kevin Donoghue

Perhaps you are right, perhaps Kevin O’Rourke does consider urban dweller and ‘expensive neighborhood’ to be synonymous. The residents of Ballymun, Ballyfermot, Togher, Moyross et al may take some convincing.

Perhaps you are right, perhaps Kevin O’Rourke does consider urban dweller and ‘expensive neighborhood’ to be synonymous. The residents of Ballymun, Ballyfermot, Togher, Moyross et al may take some convincing.

Well, it would appear that Creighton needs no convincing on this matter.

Asked which categories of people she was referring to, Ms Creighton said: “Everybody: pensioners, potentially people on social welfare or in social housing. I don’t think that it’s right that anybody should be automatically exempt.

Council Tax. Occupier pays, just like they do in England. Neighbourhoods like Ballymun may turn out to be regarded as very expensive places indeed.

To al those sneering at Kevin. Recall that he left this state some time ago. He has, I’m sure, several dozen
Things more pressing than Irish political economy.

“Square footage and ability to pay should be taken into account.”

Hard to see how this isn’t a reference to heavily mortgaged professionals with small-ish homes in the our more salubrious urban locations. Does anyone really think she’s referring to people living in poky houses on run down estates?

JF,
Cut Shay some slack, half his party has run off with the developer class.
OMF,
What is wrong with pensioners and potentially people in social housing making a contribution towards the running of the state . Should Dessie Ellis be exempt just because he lives in a council house. Should Bertie be exempt because he is a pensioner?

At the risk of intruding on a private argument, as someone who has been making the case for a land tax in the UK for years, I believe that a value-based property tax with frequent revaluation would be good for macroeconomic stability and development in Ireland, whether it is a case of raising extra revenue or not. A land tax should restrain another housing boom, and ensure that those who benefit from development (or lack of it) compensate those who do not. And to the extent that such a tax reduces the value of urban land, city dwellers will soon have less to whinge about.

@Anewdawn

Yes indeed. Some of his top flight students might be able to talk their way into a post at an investment bank in the milk round if they listen very carefully to him and pile through the reading lists.

That way they might be in a position to out-earn an Irish graduate starting last year as a social worker or primary school teacher. Mind you they won’t have the job security though…

@Shay

I think there is an unfortunate tendency to brand anyone who persistently disagrees with a popular internet user as a “troll”. Johnny no doubt has irritated the gentry and others, but after this thread:

http://www.irisheconomy.ie/index.php/2011/12/29/dutch-bankers-bonuses-go-bye-bye-thanks-to-twitter

…I prefer to think of him as “whistleblower” – but we know what happens to them 😉

@Paul Ferguson

You are correct the IMF paper is indeed a very thought provoking piece which deserves to be read and understood because it does represent a very real alternative to the current bank credit creation disaster that we are living through. From the conclusion:

“..This paper revisits the Chicago Plan, a proposal for fundamental monetary reform that was put forward by many leading U.S. economists at the height of the Great Depression. Fisher (1936), in his brilliant summary of the Chicago Plan, claimed that it had four major advantages, ranging from greater macroeconomic stability to much lower debt levels throughout the economy. In this paper we are able to rigorously evaluate his claims, by applying the recommendations of the Chicago Plan to a state-of-the-art monetary DSGE
model that contains a fully microfounded and carefully calibrated model of the current U.S. financial system. The critical feature of this model is that the economy’s money supply is created by banks, through debt, rather than being created debt-free by the government.

Our analytical and simulation results fully validate Fisher’s (1936) claims. The Chicago Plan could significantly reduce business cycle volatility caused by rapid changes in banks’ attitudes towards credit risk, it would eliminate bank runs, and it would lead to an instantaneous and large reduction in the levels of both government and private debt. It would accomplish the latter by making government-issued money, which represents equity in the commonwealth rather than debt, the central liquid asset of the economy, while banks concentrate on their strength, the extension of credit to investment projects that require monitoring and risk management expertise. “

Johnny F: Perhaps you are right, perhaps Kevin O’Rourke does consider urban dweller and ‘expensive neighborhood’ to be synonymous.

This from a guy who has been bitching incessantly about KO’R allegedly misrepresenting Lucinda Creighton’s views.

Shay, you’re wrong on this one. The thread is tagged Chutzpah so you can’t call the man a troll for giving us such an exemplary display of same.

Why is there no discussion of taxing property equity, rather than value or size?

If a property is mortgaged to the tune of 120% and most after tax income is spent servicing that mortgage, it is not comparable to an identical property with no mortgage.

Could it be that the ever dependable grey vote will again determine government preferences?

@RebelEconomist

At the risk of intruding on a private argument, as someone who has been making the case for a land tax in the UK for years, I believe that a value-based property tax with frequent revaluation would be good for macroeconomic stability and development in Ireland, whether it is a case of raising extra revenue or not.

Are there estimates of the overheads for implementing such a scheme and do you think it should be standalone or perhaps integrated into a wider ranging wealth tax?

From an Irish point of view anything that depresses land values or encouraged efficient land use would obviously be a boon (though with a population density one fifth of England’s we have a less pressing need for efficient land use outside of urban areas).

@Kevin Donoghue

Honestly, I think that if Kevin O’Rourke read the full text of both interviews, he would admit that he made a mistake.

Why does it matter? Why be so pedantic about the words used by LC? Because I think our own political discourse is going down the same ‘gotcha’ road as we see in the US election. People leap on buzz phrases like ‘address’ which are politically toxic when coming from someone perceived as ‘posh’ like LC. Exactly the same thing happened to Barack Obama with the whole ‘You didn’t build that’ nonsense.

@shay

Just for the record:

“On Kevin O’Rourke’s initial post Lucinda is just defending the interests of her wealthy constituents who did not get rich by paying taxes – it is a perfectly understandable position”

There are, as a matter of fact, many people who have property that they own outright and who have managed to get into that position despite paying enormous amounts of tax over decades. Many have had either duff, or zero, tax advice, and similar investment advice. Don’t assume that everyone – or even the majority of those who are “rich” are so because they have failed to pay much tax – and no, that doesn’t imply I think there is anything wrong with a property tax.

@Kevin O’Donoghue

Shay, you’re wrong on this one. The thread is tagged Chutzpah so you can’t call the man a troll for giving us such an exemplary display of same.

If I have ever been wrong it is because I am an orphan, your honour.

@grumpy

I think there is an unfortunate tendency to brand anyone who persistently disagrees with a popular internet user as a “troll”.

You win on a technicality, I do not know whether Johnny Foreigner is chiefly a troll but I think that in this case it is reasonable to say that he is trolling.

HTML tag closing fail above. Apologies.

@Kevin O’Donoghue

Shay, you’re wrong on this one. The thread is tagged Chutzpah so you can’t call the man a troll for giving us such an exemplary display of same.

If I have ever done wrong it is because I am an orphan, your honour.

@grumpy

I think there is an unfortunate tendency to brand anyone who persistently disagrees with a popular internet user as a “troll”.

You win on a technicality, I do not know whether Johnny Foreigner is chiefly a troll but I think that in this case it is reasonable to say that he is trolling.

@Shay Begorrah

If you are not too busy refereeing the internet maybe you could give us your views on the original post.

@ RebelEconomist

A land tax could be a good thing but farmers land would be exempted.

This is a powerful group and even though Ireland will be assuming some responsibility for paying CAP welfare next year for the first time since 1973, the urban dweller will be mainly carrying the cost.

@ All

It will likely take another 5 years for the penny to drop that the status quo ante isn’t coming back.

This is the first panic, bust, depression or recession since the dawn of trade unionism where they are making common cause with comrades representing professional groups who are beneficiaries of the public purse as well as the private sector.

The pain has been very much unbalanced so far and measures such as a dual public workforce are temporary responses from people with their fingers crossed.

Last weekend in Germany, the Bild am Sonntag created a stir when it published a “Pension Shock Table” based on data from the labour ministry.

Those who currently earn €2,500 per month before taxes and work full time for 35 years will earn a pension of €688 starting in the year 2030.

That corresponds almost exactly to today’s poverty line for elderly people.
Recent data shows a jump of 60% to 761,000 in the number of pensioners working in ‘mini jobs’ to top-up their pension payments, including 120,000 people who are 75 years of age, or older.

About 36% of all full-time employees in Germany earn less than €2,500 monthly.

http://www.finfacts-premium.com/sites/default/files/bild_rententabelle_2012.jpeg

@ Seafóid: “What happened to PH ?”

He has been designated as a Non Person (in respect of this site). One cannot even use his full name or your comment will not up-load. Crass behaviour.

@ bazza: “equity”. Interesting idea. But it might prove a tad tricky for the mono-synaptic thinkers.

1. Restructure our ‘tax’ system. Its completely unfit for purpose.
2. Restructure Local Gov. Its shambolic.
3. Prohibit (by Constitution) a deficit budget for day-to-day spending.

@Brian Woods Snr

Why not completely devolve revenue raising powers and budget control to local authorities? Take Kerry County Council – why shouldn’t they have the power to collect (themselves) a property tax, rates or whatever they fancy? And then spend it however they fancy? They are, after all, a democratically elected body. It would make local elections meaningful and give a better alignment to the revenue-raising methods and the local needs. I choose Kerry CoCo because they are already very flush from the second homes tax – it was exactly what they needed.

If people in Donegal or Ballsbride don’t want a property tax then fine, vote for local representatives who have something else in mind.

Caveat – that something else cannot include money from central revenue – has to come from your own pockets I’m afraid.

@grumpy

There are, as a matter of fact, many people who have property that they own outright and who have managed to get into that position despite paying enormous amounts of tax over decades.

Absolutely. Owning a house outright does not speak to your character and people are understandably proud of having a concrete representation of their hard work and a place to keep their families comfortable and safe. Ireland’s history speaks of the need to avoid depending on the whims of a landlord – even if the law is now more favourable towards tenants.

Against that the intergenerational persistence of property ownership does lead to the emergence of a property owning and rentier class and this is most definitely not a good thing. The enactment of a property or wealth tax should help reduce this.

@ MH

Germans can thank Schroeder for this situation with his “reforms” so recently lauded in the Irish Times. And the reaction of the beneficiaries of it i.e. entrepreneurs now benefiting from a “low-cost” economy is no different to that in Ireland; “what we have we hold!”. The reaction to proposals from the minister responsible – Ursula von der Leyen – a possible successor to Merkel – has been almost uniformly negative.

http://www.morgenpost.de/politik/article108976969/Union-wendet-sich-im-Rentenstreit-gegen-von-der-Leyen.html

If JTO were here he might say that society in Tyrone has not broken down because people pay taxes on their houses and that it will not have any greater effect in counties to the south.

@ Grumpy

“There are, as a matter of fact, many people who have property that they own outright and who have managed to get into that position despite paying enormous amounts of tax over decades.”

@Seafoid

What’s your point exactly?

Mine is that there is a presumption among some commentators, demonstrated in the post I was responding to, that if you see someone who is “rich” (= lives in an affluent location, or has net positive assets) that you can safely assume they are in that position only through tax evasion or tax avoidance, they have therefore ripped-off society, and the appropriate response to any question of whether a tax proposal is fair to them is to laugh.

That is both incorrect and unhelpful – not least to those attempting to agree on and implement said tax proposal.

Property taxes are not the bete noire that they are depicted as in Ireland. There are a few items that need attention.

1) Assessments have to be done every three to five years by anybody but the local authority.

2) Changes of ownership, prices and transaction costs must be entered into a central Registry (national), maintained by a national agency. Stiff penalties for misleading entries.

3)Each local authority sets the taxation as a percentage of current valuation. This can range from 3 to 10% higher in low cost and lower in high valuation authority areas. A single rate for each authority. Why low in high valuation and low in high valuation areas you might ask. Because the cost of providing services is usually higher in low valuation areas and of course the take per property is less. This is where the Dail comes in with equealisation payments to the Authority if the political pressure warrants it.

This is Ireland and we do not trust our politicians. We are also quite incapable of rationally considering the pros and cons of property taxes. The answers are out there and we should not compare low home ownership jurisdictions such as Germany where tenants pay the property taxes on matchbox apartments with our spacious lots and stand alone houses.

Should Primary and Secondary education be under the local authority? Give that some thought.

On a related tax/charge issue, it’s interesting that a former minister in a toxic government is making a stand on principle in relation to a charge that would be peanuts compared with his public expenses. Taking shared responsibility for the economic crash is of course another story.

Eamon O’Cuiv, Fianna Fáil TD and former minister, has said he has not paid his septic tank charge, because the fee is an issue of equality i.e he chooses to live where there isn’t mains water supply but he doesn’t believe the tank should be his responsibility.

http://www.irishexaminer.com/breakingnews/ireland/ocuiv-refuses-to-pay-septic-tank-charge-565637.html

@ Grumpy

I struggled to see the relevance of how much tax people paid in the past to the property tax debate. Fingers probably paid lots of tax in the past. But you were referring to tax avoidance, I see now. Apologies.

Surely it can’t be that difficult to come up with a property tax that works – how come most other countries have one ?

Ian Talbot in the IT today

http://www.irishtimes.com/newspaper/opinion/2012/0904/1224323574395.html

“All economic evidence tells us that spending cuts rather than tax increases do the least amount of damage to the economy.”

How is this credible?

Surely in the case of the US a mix of tax rises and spending cuts to pork barrel themes like the military is the only way.

Didn’t super taxes on les rentiers usher in les trente glorieuses in France ?

Don’t IT readers get fed a lot of sh*te really ?

The whole focus is on the payment of property tax.

It is about time the focus shifted to what services the Local Authority will be responsible for. Then we will be able to determine how much revenue must be raised.

I saw the day coming when we would become adherents of handsome Ronald’s political philosophy such as low tax is good but no tax is better. Laffer and Phillips as the neoliberal gospel. We the public are not a bunch witless and idle feckers we are capable of analysing cause and effect and acting for the greater good of Irish society. I have lived in low and no tax jurisdictions. Believe me there is a direct relationship between tax rates and quality of life.

@seafoid
Apparently central banks tend to have looser interest rate policy in respond to spending cuts than tax rises , Explaining the apparent prefereabity of one to the other .
How’d have thought it, central banks act in a politcal fashion.

What’s really amazing is that although this information is widely available , yet still every few months Dan obrein and Co roll the same trope like it was the height of wisdom .

You quote one FG TD, above, another FG TD is on the Vincent Browne show player in recent weeks suggesting a 3 year emergency temp. very high income special tax, that would end talk about pausing P.S. increments to 2016 and tipping special needs citizens out of the frying pan and into the fire

Mickey
Not here there ain’t. The top rate tax payer is paying over the odds for lousy services delivered by overpaid staff.

@ JF: Thanks for your comment. I have no problem with the collection – its the spending I have a beef with. Its not under democratic control. Councillors are not answerable to their electorate (except in some timid legal sense). Each counciller has to be made personally liable for any overrun on their budget. That will concentrate their decision making. Biannual elections. And you can only serve three consecutive terms and five at maximum.

OK: Scrap the idea of ‘county’ councils as we know them. They are archaic. With a population of 5 mill we only need ?? local authorities. Two? Three at a stretch. We have 33!!! Madness.

Householders need some public services so they must pay for these. No exceptions. Payments have to come from an actual income. If a householder is unable to pay then the council has a charge over any sale or transfer of the property. Folk will then be most attentive to what their local authority is spending their money on.

Household charges are not a tax. They are a payment made by the occupiers for some public service. We pay utility bills. We do not class them as a tax – yet!

Ian Talbot: “All economic evidence tells us….” Who’s ‘us’, then?

“Prior to joining Chambers Ireland, Ian held positions as a Director of Citigroup and JP Morgan Chase in Ireland. He qualified as a Chartered Accountant with Price Waterhouse where he spent several years working in their Dublin and Luxembourg offices. Ian holds MA and BBS degrees from Trinity College, Dublin.”

Well, for those values of ‘us’ I’m sure it’s true. All economic evidence tells us what we want to hear. BTW, doesn’t the MA come with the BBS in Trinity, without the economically wasteful inconvenience of further study?

Sean Barrett TD
Dail Eireann
Leinster House
Dublin 2

Dear Mr Barrett
Many thanks for your very welcome letter of 21st February 2011 and your solemn pledge to allow all commercial tenants a rent review in 2011. We had sent on Gerard Hogan’s SC opinion stating clearly this was legally ok and Colm McCarthy’s enonomic report stating this was in the best interest of the Irish economy.

Yours sincerely
John Corcoran

One important item I left out of my Property Tax rant. It is of the utmost importance that the database be open to the public and that each property owner be entitled to information on ten properties of their choosing, free of charge with each one over ten Euro 15 each.

On the subject of how to divide governance pie in large countries it is quartered and in smaller countries there is usually local, regional and national.

Simpleton,
For the record, I am in favour of a site value based resi property tax with no exemptions. I am also in favour of lower tax credits. On the other side we need a third off the pay bill and an end to universal payments.
That is a minority view round here for bleedin obvious reasons.
It will probably require the collapse of the Euro to create the necessary mo! Ant bets on when?

@ Seafóid

Didn’t super taxes on les rentiers usher in les trente glorieuses in France ?

A study of US tax rates during the past century is very instructive, also.

@ Tullmacdoo

Should Bertie be exempt because he is a pensioner?

Is Bertie Ahern representative of anyone but a tiny minority of pensioners? So.

@ Simpleton

I work in the private sector.

Tull probably works in the Department of Agriculture. Or else the Dun Laoghaire Harbour Commissioners.

@Tull

“The top rate tax payer is paying over the odds for lousy services delivered by overpaid staff.”

To a certain extent that is true. But you get health care for a lot less than you would in Switzerland.

And a Leinster rugby camp for the kids is a a lot cheaper than a football camp in the Alps. Quality is also better.

Ireland has a lot going for it if you wear the right sunglasses.

This discussion is quite funny. All the contributors seem to live in a different world from the rest of Irish society. The government plan too come along and take on average 500.00 euro from peoples after tax income (wage/pension) and this will cure the countries ills according to what has been written here today. Yet incomes are falling, prices in the supermarkets are creeping back up, taxes are already up and people are excepted to spend money in the economy to help make it grow.
None of the contributors above can see beyond the black and white. Young couples stuck in small one bed apartments, unable to plan for the future, that the councils gave planning permission for that they will not be able to sell because the banks will not give mortgages on this type of property any more.
Then you have management charges that can amount to over three grand and are a big burden on many apartment owners and with property tax and water rates will ensure that the property will only sell if a miracle happens.
And yet after this and many other issues that mean this is not such a black and white issue the media will sell the government tale of how this form of tax is fair.
Yes FG promised not to but up direct taxes on employment but this is worse because this tax is from income that has been taxed if your a PAYE worker. Insidious is the best word to describe property tax because it will have a massive negitive affect on many people who are scared.
The EU did a survey last year and 47% of the Irish respondents said that if a unexpected bill of 1000 euro came that would not be able to cope. So might as well increase the number of people living in stress about how they pay just to live.

@ Tull

there will probably be a bonfire of the quangos eventually.
the whole post 2000 benchmarking and all the FF stuffed boards were as much a part of the bubble years as apartments in Beacon south for 500K.

And the equilibrium won’t support them.

Tull,
No idea whether Euro survives. But the only basis for survival will be same social welfare rates, same (state) retirement ages, same pensions, same teachers pay, same public sector everything in the euro area. Just as in the sterling and dollar areas. We are are two or three crises away from the plan for this being made explicit. The euro will lose one or two currencies along the way. But sensible people know that this is the only way the system hangs together. Whether it does or does not is a different question.

All the contributors seem to live in a different world from the rest of Irish society.

The posters around here generally fall into two camps

a) Public, and “semi”-state(newspaper, bank, etc) employees, either towing the Government or ECB line or else engaging in mild academic discourse on the alternatives. This groups salaries are largely dependant on the largesse of the banking ascendancy.

b) Headbangers. People with a lot of time for posting on the internet and little else. Most don’t live in the same “real world” as the majority of the population. To their credit, they are at least independent voices, if at times inchoate ones.

Mostly, Internet forums like this are a distraction, wasting energy that could be expended on more productive projects; e.g. a political movement, rallies and protests, setting up a newspaper, or heading a lynch mob.

@ All

Of the many headlines since the crisis broke in Ireland, this is one that is likely to be remembered.

http://www.independent.ie/national-news/imf-asks-government-to-explain-whats-going-on-3220182.html

P.S. Debating the motives of posters to a blog is about as useful as asking why the chicken crossed the road. There are basically only two rules (i) stick to the topic of the thread and (ii) avoid ad hominem – especially abusive – comments. Anyone breaching them can legitimately be considered a troll, although breaches of the first rule are of little significance compared to breaches of the second.

@ All

I will break the first rule by adding this link.

http://www.ft.com/intl/cms/s/0/6b6c940e-f688-11e1-9fff-00144feabdc0.html#axzz25Zy8juhm

This internal German debate is of fundamental importance, IMHO, with regard to the future of the euro, which is not totally unrelated to this thread. Even at this early stage it reveals an important fact about the operation of the German economy viz that the mercantilist approach driving it is a function of the economy’s corporatist structure.

Wolfgang Munchau had an interesting comment earlier in the week.

http://www.ft.com/intl/cms/s/0/b3c7d492-f2a6-11e1-ac41-00144feabdc0.html#axzz25Zy8juhm

His fears are well founded. However, Barnier has already signalled a compromise i.e. his proposals will imply acceptance of the principle of global coverage but on the basis of a phased introduction.

Simpleton,
No , it is worse than that. Teachers in London are paid more than teachers in LLandudno. Cops in Albany are paid more than peelers in Montana. We are the other way round.
Small victory yesterday for the consumers of services over the producers.

@DOCM,

That Independent headline will have resonance with many people in that it reinforces the ‘loss of sovereignty’ meme with which we are all so familiar since the bailout. Not to mention the ‘green jersey’ meme which translates as ‘whatever you say, say nothing or you will sabotage the national interest’ with which we are equally familiar.

But the Independent story lacks substance – what are the resident IMF observers in the DOF and CB supposed to do with their time? Make paper-clip chains? Or observe what’s going on around them and make the odd enquiry about it?

As for the original IT interview with Ms. Creighton, her views on the property tax issue or on health cuts or on any other issues exclusive to her European Affairs brief are of no more import than those of any other junior minister, or backbencher, among the government parties. She is not a Cabinet Minister and will have no direct input into any final decision on policy and, likely, will only hear about it the same time everyone else does.

But as a party political mouthpiece – which is how I interpreted this article – she has a function to perform in cross-party communications; delivering a message to her colleagues in Labour that FG will stand up to them if they keep rocking the boat with foolish warnings about preparing for imminent elections and the like. Such interparty shenanigans distract from the real question: are the cuts as proposed by the HSE/Minister the only way in which the clawback in health over-spending can be achieved?

It takes a small group of disabled people who camped outside the Department to force that crucial question back to the centre of the public debate. That their protest has resulted in a ‘U-turn’ on the element of the cuts that direct affect them indicates that there are, indeed, alternatives to the current proposals as well as further undermining confidence in the way in which this government is going about its business generally.

@veronica: “Such interparty shenanigans distract from the real question….”

Bismarck: “The making of laws like the making of sausages, is not a pretty sight.”

Sorry, but Bismarck was right. The squabbles are not a distraction from the decision-making process, they are essential to it. It doesn’t much matter whether “confidence in the way in which this government is going about its business” suffers; the outcome is what matters. Lucinda lost a little ground to the ‘whingers’ last night, but there’s more to play for.

@ Kevin Donoghue

Indeed , yes, such squabbles are very much part of how policy is formed but when that sort of shaping up takes place within the way the issue has already been framed by the government for public consumption – TINA – it tends to exclude the possibility of any other policy options being considered. It was the highly articulate people who camped outside the Department and bore witness to the actual implications of one of the proposed cuts on their lives who forced a Government U turn, not the inter party squabblers. Magically, the 10m euro required can now be found elsewhere – as if it couldn’t have been ‘found elsewhere’ to begin with!

@Veronica

‘It takes a small group of disabled people who camped outside the Department to force that crucial question back to the centre of the public debate. That their protest has resulted in a ‘U-turn’ on the element of the cuts that direct affect them indicates that there are, indeed, alternatives to the current proposals as well as further undermining confidence in the way in which this government is going about its business generally.

+1, Blind Biddy

@all
Is Lucinda Creighton the worst Minister for Europe ever? Can anyone name a single positive contribution that Ms Creighton has made in this role? Just one!

@OMF

I have often considered calling my IT man to stick this blog behind the webfilter but occasionally there is a technical discussion which adds to my understanding.

@paulr

+1.

@DOD

For me Lucinda has drastically expanded what was an outrageous and ridiculously gapping glut in ways I can now describe ludicrous and preposterous absurdities that ought to have been unequivocally and categorically blindlingly obvious to someone who would otherwise be better off in cloud cuckoo land living in a complete and utter fantasy world.

…as for the negatives…

@David O’Donnell

“Can anyone name a single positive contribution that Ms Creighton has made in this role?”

Er, um, er…… no.

Am I a whinger?

@Simpleton

“Does anyone on this thread work in the private sector?”

Yes. Sometimes, the very private sector. But you still find as many idiots there as elsewhere.

@simpleton

Does anyone on this thread work in the private sector? (Apart from Tull)

This dog at a laptop has worked in the private sector exclusively for the last eighteen years including about six years self employed.

@OMF

Mostly, Internet forums like this are a distraction, wasting energy that could be expended on more productive projects; e.g. a political movement, rallies and protests, setting up a newspaper, or heading a lynch mob.

There are certainly more constructive things we could all be doing but perhaps not between waiting for tasks to complete at work?

I agree on the lynch mob though. It is a great shame that our government has always been more afraid of losing face in Europe rather than of their personal safety at home. It would have focussed their minds.

@OMF

“Mostly, Internet forums like this are a distraction, wasting energy that could be expended on more productive projects”

Insight is not easily wasted. I think the representatives of the shafted could be far more effective if they spent some time on this site.

Anyone up for an open whinge thread about the ECB?

“European Central Bank President Mario Draghi’s bond-buying proposal involves unlimited purchases of government debt”

BUY EVERYTHING!!!

“that will be sterilized to assuage concerns about printing money, two central bank officials briefed on the plan said.”

YEAH, SURE.

“Under the blueprint, which may be called “Monetary Outright Transactions,” the ECB would refrain from setting a public cap on yields, according to the people, ”

SELL EVERYTHING!

“and a third official, who spoke on condition of anonymity. The plan will only focus on government bonds rather than a broader range of assets and will target short-dated maturities of up to about three years, two of the people said.”

KEEP SELLING!

“Draghi will stress conditionality of the program tomorrow, with the ECB likely to stop buying the bonds of any government that fails to meet the conditions it agrees to when it signs up for aid from Europe’s rescue fund — a precondition for ECB action — two of the people said.”

SELL!

“Another proposal is for the ECB to sell the bonds it has bought if a country doesn’t comply with the conditions, two of the officials said.”

WOT!…..SSSEEELLLLLL!

…or go to the pub 😉

http://ftalphaville.ft.com/blog/2012/09/05/1147061/some-more-draghi-day-prep/

@grumpy

If I understand the proposal it is that the ECB will buy short term government bonds only as long as the government commits itself to the economic policies that have not worked so far but which the ECB and Germany both deeply believe in.

SOo having beaten the European economy half to death the ECB (and presumably Germany) might be agreeing to supply pain killers care as long as the victim pleads guilty to assault. Fantastic.

Lets try that again:

@grumpy

KEEP SELLING!

If I understand the proposal it is that the ECB will buy short term government bonds only as long as the recipient government commits itself to the economic policies that have not worked at all so far but which the ECB and Germany both deeply believe in.

So having beaten the European economy half to death the ECB (with German approval) might be agreeing to supply pain killers as long as the victim pleads guilty to assault.

Fantastic.

@ grumpy

Is “2 people who were briefed on the situation” not just an upmarket version of Lucinda ?

I expect things to get a lot more panicky in Q4 before the real action starts. Last November the FT ran a piece on the concept of “uninvestable” peripheral assets and lo and behold didn’t Mario have a plan within a week.

Blind Biddy and Mad Ould Jozie (freshly dolled up and lookin mighty) are in the pub – think I’ll join them.

Don’t forget the ESM!

09/05/2012
Opening the Umbrella
ESM Permanent Bailout Fund Prepares for Prime Time
By Sven Böll, Martin Hesse and Christian Reiermann

The court battle against the permanent euro bailout fund, the ESM, has become the largest in German legal history. Yet despite widespread concerns, fund head Klaus Regling is preparing for action. The most important question surrounding the fund, however, remains to be answered: Will it work?
Stacks of paper make it impossible to get an unobstructed view of the Balinese island paradise. For the past two years, this idyllic scene carved in wood has been propped up on a sideboard in a Luxembourg office. The picture’s owner hasn’t found time to hang it on the wall. Instead, he has allowed it to gradually become submerged under a sea of documents.

The office belongs to Klaus Regling, head of the European Financial Stability Facility (EFSF), the temporary euro backstop fund. He brought the picture back from Indonesia over 20 years ago, when he did a stint there for the International Monetary Fund (IMF). It has long since morphed from a souvenir to a symbol of the crisis. The message is “look here, we don’t have any time for trivialities” and “our work environment is just as temporary as the rescue fund.”

http://www.spiegel.de/international/europe/permanent-euro-bailout-fund-esm-prepares-to-go-live-despite-law-suits-a-853892.html

I blame the croke park agreement. For everything. Including the weather. And the Irish soccer team. Scrap the CPA and all will be well.

Exactly Seafoid. My time reading this blog tells me that there is nothing that cannot be blamed on croke park

@ veronica

Thanks for the reply. I would not disagree. My point was, however, that an important outside body was reported as asking a very pertinent question; what is going on? Does anyone, including this inept government, know?

As to criticism of the CPA, I, for one, have never said that it is the only issue. But it must form part of the eventual “national package deal” solution. My own belief is that a majority will find a balanced outcome acceptable, even if it means pain for them individually. But the omens hitherto are not good.

DOCM,
You call this govt inept. But as I look back on your exchanges with me, I get the impression you want higher social protection, lower PS pay, a bigger internal devaluation, a front loaded fiscal adjustment, probably higher marginal taxation rates and a strict adherence to European orthodoxy.
Pardon me, bur you are the last person that should judge this govt inept. Your world view makes no sense.

Indeed. What is going on? Henri – the existential cat, viewed by over 4m on Youtube, probably knows more about it all than the good Lucinda or the rest of us:

http://www.youtube.com/watch?v=Q34z5dCmC4M

Well worth a look, believe me!

I am very angry about the way in which this has all been handled. It seems to me that what is happening is that categories of ’employee’ within the HSE are being identified who do not ‘belong’ within the scope of the CPA. These people are extremely badly paid – less than 10 euros per hour on average. They do not qualify for CS ‘mileage’ rates, or any at all in some areas. Cut them and the services they provide out of the system and there’s no impact on the terms of the CPA.

So, they can be ‘excluded’ without infringing the terms of the CPA. Brilliant! Draw a red line through it. The services which they provide, however, are essential to people like the disabled. Not just them. Home helps and ‘respite care’rs as well are affected.

It’s stroke of pen stuff. No thought goes into it; no strategic visions that people left without this minimal level of care must eventually end up in hospital or full time institutional care which will cost the state 1,000 euro a week de minimis.

Forgive me for getting a bit angry. Last week I was told that my dear godmother, who’s over 90 years of age and who helps her middle aged son and his wife in the care of a severely disabled son, had her family informed that the two weeks ‘respite’, whereby the young man gets a holiday away for two weeks out of 52 and his parent and grandmother get two weeks rest, is now cancelled forthwith. These people will cope, because they are proud and straight, and will continue to care for the young man they love, even if it kills them.

They will do so with dignity, without any public complaint. Their despair will be private. They’re the sort of people who are in your ‘majority’, so to speak, who will make room for that extra burden, that realistically, physically or mentally, they can’t cope with. But they’re the sort who’ve always doneit, down through the generations, and so can be relied upon to remain passive – even if it kills them.

Anger, as Colm McCarthy memorably put it, is not a policy. He’s wrong. Anger becomes a policy when the level of injustice becomes so grave that the consent of the majority to the system of government can no longer be reasonably sustained.

The government faces some real moral dilemmas in making almost impossible choices. It’s not that they’re inept, DOCM. It’s that they always take the line of least resistance from an electoral perspective. In short, it’s more cowardice than stupidity. Or else, it’s the perspective of Henri – the existential cat.

@DOCM

Sorry, should have headed up my previous post as specifically addressed to you. But if you read it, the intention will be clear enough.

All the best. V

Anger, as Colm McCarthy memorably put it, is not a policy. He’s wrong. Anger becomes a policy when the level of injustice becomes so grave that the consent of the majority to the system of government can no longer be reasonably sustained.

Not exactly. Anger becomes a policy when policy makers feel very real an immediate threats to their personal safety unless they take action. I firmly beleive that at this stage, a serious outrage would ultimately solve more problems than it caused.

Anyway, anger may not be regarded as a policy, but Hope certainly is. Our government runs daily on Hope, plans around Hope, appeals to Hope, and clings to Hope as dearly as a drowning man clings to driftwood. Unfortunately, Hope is but the first step on the road to Disappointment.

The cut n carers is the fault of the CPA. As is the fact that people need care. It’s clear. Cut the CPA, and the blind shall see, the deaf hear, and our books balance. And the weather will improve.

@ Veronica: “I am very angry about the way in which this has all been handled.”

Good. We need a great many more people who are angry. Not throw the crockery about anger, but the slow, grim, focused determination to reverse an injustice.

Anyone who suggests that anger is counterproductive is someone who has never reflected on one of the key survival attributes of humans. Basically they are embarrassed by a persons anger. They are incapable of understanding and responding (engaging with the problem) and seek to mask their incompetence and unwillingness by displacement activity. Strategically focused anger always works. Takes time and great skill.

Are there any REAL economists about this site? This is a serious question. We have a festering, intractable economic predicament. On several occassions I have alluded to the complete cluelessness being displayed by so-called economists in respect of their commentaries and proposals for dealing with this economic predicament.

Specifically: The economic paradigm of Permagrowth. Do folk really understand the long-run consequences of this paradigm. Apparently not. Its the only reasonable conclusion I can come to. Why? Perhaps its never mentioned in any undergradute or postgraduate economics course programme.

So now you know. Our economic advisors ARE clueless (about reality). So why bother attending to their catechisms? You would be wise not to. They are proposing hazardous social experiments on humans, which if performed on Henri would get them a jail sentence for neglect and cruelty. Be mad. real mad. There is nowt left.

@ Vernoica

A very impressive contribution. The situation is, indeed, shameful and the disabled are not the only ones to suffer.

My point about the ineptitude of the government relates to its failure to recognise that your sentiments are widely shared. They need to have the political courage to table a comprehensive package which stops the descent to even further levels of inequality cf. Reuter’s take on the IMF press release.

http://in.reuters.com/article/2012/09/05/ireland-imf-idINDEE8840GV20120905

@Veronia et al
Yes, a very impressive contribution. But let’s try and tell the whole truth and inject complete and uncomfortable honesty into this debate. The shameful retraction of respite care arises from lack of resources. That cash has to come from somewhere. Logically, it can come from resources elsewhere in the system or through higher taxes. If it is to come from elsewhere it has to be from reduced services elsewhere or lower wages.
Cuts in wages are ruled out by assumption- the CPA. So it’s reduced provision elsewhere or higher taxes. Now, I am prepared to do my bit. I pay 52% marginal taxes and, thanks to my comfortable, for now, salary, and the very high progressivity of the tax system, my Average rate of tax is also very high. But, cards on the table, I think I have done my bit. There is, logically, a point at which a taxpayer believes he/ she is making a fair and just contribution. I think this is it. I see my taxes going up next year, again, to maintain public sector pay at close to the highest levels in Europe. I do not think that is within an a€€es roar of being fair, just or even economically sensible. It just isn’t sustainable, whether or not it is fair.
So, who do you think should pay for that eminently justifiable respite care?

@simpleton

Indeed public service costs are far too high as indeed are the salaries that most public servants are paid when benchmarked against current private sectors in the RoI and equivalent public sectors in the EZ.

It seems too simple but surely the basic medicine is amend the CPA and life as we now know it would/should improve right?Wrong.

As Karl Whelan has consistiently pointed out any reduction is salaries to public service staff also reduces the tax take. This is ALWAYS overlooked. So the maths is not at all simple as reducing pay rates has knock on effects on VAT and Excise duties aswell – again ALWAYS forgotten about.

But the more important elephant which is never questioned when amendments to the CPA are discussed is the likely impact on further mortgage stress and defaults. Reducing pay rates simply has to make this problem a lot worse given that the public sevants in the country are likely to be disproportinately larger owners of mortgaged property in the country given their ‘safe’ job status and borrowing capacity. So we’re back to square one. Too much debt.

I’m at pains to point out that we go nowhere until every sector of society realises that this is the real underlying problem i.e. private debt, not public debt. Fixing the private debt mountain requires a different logic and pretending we can rejuvenate the economy and hope that it dissolves away is a daft policy response. We need a debt forgiveness policy ahead of all other policy choices and a personal insolvency approach is completely missing the point and won’t work.

@yob
Just because something is complex or difficult doesn’t mean it is wrong. If our public sector cost structure is too high it is too high. I’m sure Karl W would not put this interpretation on his work but using your logic and his argument would seem to point to raising public sector wages as the solution.
Complexity does mean that public sector costs are but one of our problems. Debt relief is certainly another. Progress needs to involve tackling every problem. But complexity seems to have overwhelmed our dear leaders.

@ YoB: “As Karl Whelan has consistiently pointed out any reduction is salaries to public service staff also reduces the tax take.”

True – to a point. But the means of raising state revenues is in need of significant re-structuring and the spending of those revenues has also be tackled. These are political economic problems. If there were a constitutional prohibition on deficit budgets for day-to-day spending the issue would be sef-regulating. The Dáil could only vote for expenditures that matched the current tax take. Likelyhood of this? Zero Kelvin. Problem will fester.

@ Simpleton: “But complexity seems to have overwhelmed our dear leaders.”

It surely has! And they are thrashing about attempting to solve their problems using ideas and actions which are inappropriate and will fail. Its the Model-in-Use. Its banjacksed and they have no replacement

Our Dear Leader is currently praising Reilly for his “courageous U-turn”. These critters are completely devoid of shame.

@ Simpleton

“So who do you think should pay for that eminently justifiable respite care?”

Your question is entirely reasonable, particularly in the context which you outline of already contributing your fair share of tax, and willing to do so, but with a gnawing resentment of those whom you perceive as overpaid already and and enjoying absolute protection of such incomes and privileges courtesy of the CPA.

Teh straightforward answer to your question is that society should pay for the respite care. First, because it is a matter of basic social justice. Second, because it is economic madness in the long term to demolish supports of this kind, whether respite care or home care for the elderly or teh availability of personal assistants for the disabled – their removal will inevitably result in greater social misery for those affected by such cuts, increased stress on their already precarious health (and the health of their immediate family carers) and inevitably, referral to hospitals or long term institutional care. Increased referrals and institutionalisation will cost many multiples of what has ostensibly been ‘saved’ by cuts to home care, personal assistance or respite care. You’ll be asked to pay for that too.

The government parties are so hell-bent on protecting their respective constituencies – for Labour their public service vote, hence making a talisman of the CPA and no cuts to social welfare rates allowable since that might leak votes to SF; for FG, preventing as much leakage as possible in the 100 seats between Dail and Seanad they acquired in GE 2011 resulting in the mantra of no increases in income tax – that all they can do is cherrypick amongst the options remaining open to them that will do the least damage to their electoral prospects. Which is a bit tough on the elderly, the disabled, families who can hardly put bread on the table but will be hit with a poorly thought out, ill-considered and likely badly designed ‘property tax’ on their after-tax income in due course anyway.

If as a country we want a social failure to match the scale of our economic failure, it seems to me we’re going the right way about it.

DOCM and I regularly spar on this site. But I think his remarks above get to the nub of the issue: “They [the government] need to have the political courage to table a comprehensive package which stops the descent to even further levels of inequality.”

We need a new politics.

And if you want a snapshot of the mentality of those whom we elect to govern us, this column in the Sunday Independent is worth a look.
http://www.independent.ie/opinion/columnists/john-drennan/john-drennan-politicians-to-row-back-on-seanad-abolition-3210244.html

@Y O B

“As Karl Whelan has consistiently pointed out any reduction is salaries to public service staff also reduces the tax take. This is ALWAYS overlooked. So the maths is not at all simple as reducing pay rates has knock on effects on VAT and Excise duties aswell – again ALWAYS forgotten about.”

Of course it isn’t. We have been over this previously on this site. Some people like to imagine, and to sell the line that it is always forgotten, because their agenda is to opt out of the internal devaluation the country has opted to bark upon by keeping the Euro.

There are a lot of guys in the pub whorls the
Mistake you refer to and this is used to tar what some might term “the economically literate” with the same brush in order to try to stop their arguments being heard.

Opting out of the internal devaluation is a rational thing to try to do, but it requires those unable to opt out to really be shat on. People outside CP also spend money and reduced services to protect public sector payroll costs impact their capacity to contribute to economic
activity and tax take.

Yes, as I and others have pointed out, there is a mortgage Market impact and it needs addressing too.

CPA beneficiaries have effectively become the new gentry. It’s simply wrong.

@Veronica
Your anger is well put and totally justified. We have no right to describe ourselves as civilised if we do not care for the sick and the elderly. As Clinton put it so well last night, “make a choice: we are either in this together or you are on your own”.
But I am not just being asked to care for those who cannot help themselves.

And I am afraid your answer, “society”, doesn’t really answer the question. Yes, collectively, we have to care for those who cannot do so themselves. But where do we draw the line? And, right now in 2012, who, precisely, should pay for the future respite care of your sick relative?

@veronica

I can concur with virtually all of your comments however I still suggest that until the powers that be realise that trying to fix the public debt problems ahead of the private debt disaster won’t work on an economical, mathematical and quite obviously a social level. The private debt levels will eventually undermine and negate cuts and adjustments of all types.

The household debt straight jacket is the problem which if properly dealt with will allow many other doors which are today being shut, remain open. Why this can’t be grapsed is beyond me. There is a constant school of thought that believes writing down mortgage debt to a correct model house price is simply a sop to the middle classes without understanding that the overwhelming mortgage distress problems lie significantly further down the the social food chain.

@simpleton

Don’t get me wrong here I’m no advocate of the CPA I”m simply pointing out that the simplistic view that cutting salaries etc will deliver mass savngs is incorrect – the mass media analysis and discussion of this never takes into account the other side of the issue in terms of lost tax revenue and ongoing mortgage distress.

@DOCM
“They (the govt) need to have the political courage to table a comprehensive package which stops the descent to even further levels of inequality”

+1 Not much sign of it though.

@OMF
re Hope. You need a more positive definition.

Alan Price had some lyrics back in the 70s that I still recall.

“Hope springs eternal in a young man’s breast
And he dreams of a better life ahead
Without that dream you are nothing, nothing, nothing
You have to find out for yourself that dream is dead (la la la la)”

@all,

Having watched the Minister for Health, Dr. James Reilly’s interview on ‘Prime Time’ last night, it is now clear to me that I am in error and should hang my head in shame for having so woefully misinterpreted last week’s HSE announcements.

There are no cuts in respite, carer, personal assistant etc. services. There were never going to be. It was all a figment of our collective imagination at best, the creative enterprise of a hostile media, and a hotch-potch of political malcontents, at worst.

Those who identified 30m euro of cuts aimed at services directly affecting their lives were imagining it. People who received letters over the past while informing them that services they had relied on were no longer available to them imagined that too. The Taoiseach, Enda Kenny, who told the nation we should congratulate the Minister on his ‘courageous’ U-turn had been equally misled by the background ‘noise’, as Dr Reilly put it around the HSE announcement. Enda Kenny imagained a U’turn which never existed in the first place. There was no U-turn, because there was nothing to U-turn about. It never happened. We just all imagined it was happening.

This is great news! It means: We’re imagining the economic maliase in which we are mired for the past five years and for many more to come. The unemployed imagine that there are no jobs for them to go to; the youth that their talents may be wasted through lack of opportunity. The indebted should stop reading those fictitious bank statements that signfy their predicament. The elderly and disabled reliant on basic services to maintain dignity and independence in life should cease to worry. We’re all just imagining everything that has happened.

Henri, the existential cat, makes a lot more sense.

@Grumpy
“CPA beneficiaries have effectively become the new gentry”

Maybe the new farmers. But not the gentry.

Most of them are ordinary people who buy titles such as the RTE guide and the Indo as well as VIP magazine . There are a certain percentage in the quangos but the majority are teachers, gardai, civil servants etc.

@Veronica

I watched the interview! Dr Reilly badly needs a tutorial from Fianna Fail on how to bullsh1t ….

He should quite the bull and tell it as it is …

‘Henri, the existential cat, makes a lot more sense.

+1

@seafoid

You weren’t meant to take that “gentry” reference
literally. “the New Farmers” rings very true.

In my experience in business laying employees off even with severances up to three years was looked upon as one of the guaranteed sweetest returns on investment that can be made. Nobody likes to cut wages or lay people off apart from sociopaths or psychopaths. Sometimes it is necessary to sacrifice a part to save the whole.

I am sure KW is being quoted in part, the part that was kind and gentle. If it was profitable (positive cash flow) for Gov’t to employ more we could solve Ireland’s problem by hiring all the unemployed by the end of the year.

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