Good News on the Labour Market

The CSO released the results of the Quarterly National Household Survey for Quarter 2 2013 this morning, together with their population estimates for April of this year and the components of population change over the previous twelve months.

The news is mostly positive, showing clear evidence of a recovering labour market.

The level of employment has risen, with full-time employment up for the first time since 2008. Private sector employment is growing fairly strongly, offsetting the decline in public sector numbers.

Although still very high, overall unemployment is down and long-term unemployment has fallen as a proportion of the total.

The population increased only marginally between April 2012 and April 2013. The slowdown in population growth was due to (i) the continued high level of net emigration, with an increase in the outflow of Irish nationals, and (ii) a sharp fall in natural increase, due to the drop of almost 5% in the number of births.

183 replies on “Good News on the Labour Market”

Great news! Would not be surprising to a lot of return migration by Irish nationals in the next few years if the Labour market continues its recovery.

Uptick in unemployment however : males up from 186.9 to 189.6 and female from 105.1 to 111.2, total


It is indeed good news, although I fear we are a long way from normal.
Still it confirms that the economy is trying to drag itself out of the swamp.
Imagine if we had proper debt restructuring such a making the PNs go away or writing down the bonds in the ECB portfolio to zero.

Now would be a good time to take action on strategic defaulters. Start with the BTL sector and sieze the property of some defaulters in Dublin and release into the market. A bit of social welfare reform to tighten up on the explosion in the. Numbers claiming DB would be useful.

Good news but the outlook all depends on what happens elsewhere.
Tull’s suggestion is worth a twirl.

‘… the continued high level of net emigration, with an increase in the outflow of Irish nationals …

A small human capital system that loses 3-400,000 of the mainly young & reasonably well educated of its citizenry, imho, would be viewed as negative.

The ‘nature’ of the neu-jobs in the private sector would be illustrative …

With a net change of about 10k on a seasonally adjusted basis, the sectoral composition of change is interesting. Employment in Industry continues to rise at about 3k per quarter, suggesting a gradual improvement in competitiveness. Employment in construction has bounced back a whacking great 7k in the quarter (seasonally adjusted) – probably with a lot of noise in the signal, but it still looks llike good news on the cyclical front.


You are using the quarter-on-quarter changes before seasonal adjustment. The seasonally-adjusted data show a slight fall in unemployment from Q1 to Q2.

The figures are heading the right way but the CSO has warned that the biggest sectoral rise of 16,000 in agriculture, forestry and fisheries, should be treated with caution. When a small farmer who has been working in construction losses his job, presumably he would then be viewed as part-time employed in farming?

There was a dip of 23,000 in employment in figures between Q4 2011 end and Q1 2012 but in that period the numbers on the Live Register fell. So the subsequent reported rise of 33,000 may have been less in the real world.

There were about an average of 75,000 people on various publicly funded activation courses in the quarter. JobBridge, community schemes etc.

They are not reported on the Live Register and some would be categorised in the QNHS as employed (about 53,000) and recipients of the back to education allowance would likely be counted as unemployed.

There is a rise in jobs of 16,000 in self employed (without employees) and ‘assisting relative’ categories. It would be fair to assume that jump does not reflect a surge in entrepreneurialism or economic prospects.

The survey margin of error is about 9,000.

@ All

The reality is that Ireland is dealing with the repeated mismanagement of her economy in the same old way; emigration!

What is different now from previous historical experiences could be summed up as follows; (i) the country is broke (ii) it is a member of a monetary union (iii) and of a European Union which guarantees free movement of labour and (iv) has an industrial policy based on low tax rates which attracts multinationals with a skilled labour demand which the country is incapable of meeting; leading to more emigration!

As before, a craft made more buoyant by emigration will eventually re-float with the permanent crew still aboard.

Surely migration into / out of countries and regions is part of the way labour markets adjust?

@ Peter Stapleton

Absolutely! Apart from those in PPE (permanent pensionable employment) in various “sheltered” sectors of the economy who stick like limpets to the rock of Hibernia; while they watch their children float abroad!

“You are using the quarter-on-quarter changes before seasonal adjustment. The seasonally-adjusted data show a slight fall in unemployment from Q1 to Q2.”
am old enough to remember the jokes told re Garrett Fitz “seasonally adjusted, you have a job”.
lets wait for a sustained trend. Employment has stabilized. Unemployment seems to have topped out, but at a horrendous cost in shattered families. Its 1992 without a prospective lawson boom to suck in our exports, competitive devaluation, euro structural fund boondoogle or massive slack in administrative capacity especially tax collection. So, one faint cheer. Come back in two years time

When I read this, the first thing that came to mind was…….less people about to drown as more people make their way onto the lifeboats…..Titanic 1912.

I wonder if anyone in the gub’mnt or Troika has considered charging them a grand a time to leave. I bet it’s crossed some minds!! An exit tax…..

Maybe Mary Coughlan summed it up when she said ” At least they are better educated this time” when referring to our dearly departed….

I have often heard marketing people talk about the “lifetime value” that a particular customer might represent for a business….I wonder has anyone calculated ( even back of a cornflake box) just how much wealth creation we are about to forego as a result of losing all of these bright young people…..I am sure the lifetime figure would run to many many billions…..

I wonder if we referred to them as “long distance commuters” could we add all the immigrants to the “employed” column……would do wonders for the figures……..forget about massaging the figures people, it is all about language and presentation…..


What new can be said that is original after 6 years?

In the run-up to the next general election, there’s enough fuel in the engine to maintain a narrative of progress: there will be some recovery bounceback and there will be more make-work schemes that will reduce the official numbers.

The common mantra of ‘moving up the value chain’ lasted for 20 years but eventually spin collides with reality.

So there is no real urgency in the short-term for those who matter to produce credible solutions and unemployment in Ireland appears to lack the level of political potency that can be observed in the United States.

The lack of interest in the pension crisis (what crisis?) illustrates how personal circumstances can impact policy priorities.

Forfas produces an annual survey of employment in agency assisted companies but the format of the survey is almost unchanged since the 1990s. Strange as it may seem, there are some data, policy makers would prefer not to know.

Mark Paul in today’s Irish Times refers to a rumour that Twitter in Dublin is offering staff a finder’s fee of €10,000 for individuals who are fluent in various European languages.

Of course Joe Taxpayer is funding part of that and many of these projects have low valued-added.

About 50,000 direct workers in a workforce of 2.1m are responsible for 60% of Irish headline exports.

People bemoan emigration but there’s is no automatic right to a first world standard of living. The model worked well for 10 years; it then needed a property bubble to keep it going and now what?

@ MH

We should be careful, it seems to me, not to throw the baby out with the bathwater. In overall terms, the CSO figures bring good news as Brendan Walsh points out. The question is the price being paid.

I am not even sure that any alternative policy exists to that currently being followed. What grates with me is the escapist nature of the debate (in which the looming pension crisis does not even get a mention). That it can take place in this way is, paradoxically, further evidence of a return to some – considerably lower – level of economic equilibrium.

The figures are encouraging. The major problem for us remains our banks though. There’s a lot of unrealised losses in there.
Will there be a need for another round of recapitalization – I think so. The magnitude of that need and the governments response will be important.

PR guy
Does it also mean that there is one person arriving every 10 minutes. 80k out, offset partly by 50k in.
The figures are a small step in the right direction that is all. They do not represent bad news.

Perhaps you would give us the benefit of your in depth analysis showing banks need more capital. Is is based on numbers or just another hunch?

@ Tull

Perhaps you would give us the benefit of your in depth analysis showing banks need more capital. Is is based on numbers or just another hunch?”

most of the vocal analysis is hunch based. Actual facts-n-figures analysis has generally suggested either no recap required or only a relatively small amount. Most people forget the banks have 8-9bn in spare capital still on hand, and that there isn’t actually going to be a need to write down 50% of mortgages.


Interesting observation….

“As before, a craft made more buoyant by emigration will eventually re-float with the permanent crew still aboard.”

However don’t forget.. those still aboard will have to shoulder the adjustments in services provided and adjustments in taxation measures imposed.

The debt still has to be paid back, it hasn’t gone away you know, if anything it continues to increase!!

I believe Ireland has hit bottom, and that a slight up turn has occurred, but will Ireland return to growth greater than 3% / year… I doubt it.

@ Tull & Bond
It’s the connectedness of things that causes the trouble
We are in for another tough budget which can only put upward pressure on the default rate and will hit growth next year.
I hope I’m wrong but I do think that there will be a need for recapitalization in the order of 10-15 billion across all banks. But it’s sunny and its Friday so I’m not going to worry too much. Could well be wrong


Do you think BKIR might manage a Price to earnings ratio by the end of the decade ?

If we go back to risk off with a jolt surely there is a possibility the banks will run out of stuffing.

@ Paul Quigley

The UK too is seeing private sector employment growth against a background of limited growth in credit. Admittedly, it is not as if the UK needs much more private sector debt.

Yes, BKIR will be trading on a. p/e long before the end of the decade. Wilbur target exit price is rumoured to be 45p implying 4p of EPS sometime by 2016-18. Remember Wilbur made his bones buying distressed assets in the steel industry in the US. While not a deity, he is smarter than all the assembled brain power on this blog.

Now when the Germans are forced to restructure all Peripheral EZ debt post the election this trade will be money good. This will give Francis apoplexy in his bunker in Dresden but that is a price I am willing to pay for the good of humanity.

@ Tull

Wilbur obviously has the smarts but the steel industry is not the same as banking. It still looks like a gamble.

“Banks are not an obvious fit for private equity. The traditional model, involving a debt-funded purchase, a few years of restructuring and a fairly quick exit, is tough to replicate in a capital-intensive industry known for its balance sheet woe, regulatory uncertainty and political pressure. Past experience is mixed. JC Flowers turned round Japan’s Shinsei Bank, but TPG lost $1.3bn investing in Washington Mutual.”

You are begging to sound like an actuary. Knowing the price of everything but the value of nothing.

Wilburs success will be predicated on restructuring of EZ debt easing the way for a resumption of growth. Less interest paid to Ze Germans means more cash to be spent on BMWs. It is going to happen or the EUrope will be destroyed for a third time in a century.

@ Tull
You equate smartness with ability to make money. Fair enough. They’re not necessarily the same thing though.
But if that’s how you measure people’s smartness that’s up to you

Didn’t mean make money – meant acquire. Make implies a productive piece. Most money is acquired by taking it off other people and not by making anything

I equate smartness with being correct on a subject, Wilbur is likely to have made a correct decision in buying BKIR at 10c

We must be the butt of ridicule of those sophisticated in the world’s financial and banking community. We toast Bank of Ireland’s stock price rise from 10 cent to 21 cent and accept it as the resurgence in our banking industry. Wilbur has to be wondering if there is “one born every minute” in Ireland and is it time to get out yet, or can he squeeze just a bit more before he makes that move. He will know that the reality is that Bank of Ireland has a gross loan book of €105 billion. €82 billion of that is lent to the home mortgage market, the buy-to-let market; and for development sites, commercial development and construction and property related loans. It has reserved €7 billion (approximately 6.5% of its loanbook) for bad debt……. But not to worry, it’s going to make €1 billion in 2015. Just buy the shares!

@ Sporthog

Indeed! It is the one consolation that those forced to emigrate have. Many will, nevertheless, remit earnings to relatives.

Dan O’Brien has a very interesting article in today’s IT which belongs on this thread.

He has the courage to state what is obvious but not PC.

“A large workless underclass now exists and there is limited political will and less money to help and propel people out of that condition.”

He is also right IMHO on all other counts.

The Irish are acting rationally as they have done for time immemorial. Emigration is a rational response when the opportunities are better abroad than at home. Of those who emigrate a rule of thumb is that 50% will return within five years. Some of those will do so because they could not fit in with the foreigners and others will have acquired skills that are salable back home.

Reducing the debt will be a severe drag on the economy unless the rest of Europe enters an era of robust growth. The result of the German election is likely to be a weakening of two major parties leading to a more balanced approach than exhibited heretofore by the thrifty Swabian housewife.

As long as the spuds, cabbage and milk continue to be plentiful we have little to worry about.

If we can accomplish the political miracle of weakening our two main political parties in 2015 the future will be brighter.

@ Sporthog

On the debt issue, there was another interesting contribution in the IT.

“Never do today what you can put off until tomorrow” could be considered for the national coat of arms.

The indigestible sums are in social spending (including unfunded pension commitments), health and education. It will be interesting to see what a shaky and inherently contradictory coalition makes of them in the next budget.

Of course, Tull may be right and Germany may be forced to write down debt burdens considered – at least by the IMF – to be intolerable. However, I doubt it.

The point is that they will be forced to do what they do not want to do to save the European project. And if they don’t agree to this they end up in the same company as Syria, Iran and North Korea. It is real politik.

I wonder What did Geitner say to Schauble when he flew to his holiday retreat last year. If you push the Grexit button bad things will happen.
Apart from this you are on the money. The Other side of a restructuring deal is balancing the budget now. Other liabilities will be restructured starting with Joan Burton & James Reilly’s department.

“Of course, Tull may be right and Germany may be forced to write down debt burdens considered – at least by the IMF – to be intolerable. However, I doubt it.”

It’s unusual to see Tull do the hopey changey stuff. But it is presumably backed up by sound data.

Where am I hopey changey. I am merely saying that it is either a good outcome or a really bad outcome but real politik dictates that a certain middle European country caves or….. Based on my limited knowledge of politics, I smell a cave in. There is an admission Greece needs more money and Weiideman appears to be tied up in a basement somewhere.

@ Tull

Are you serious in making these comparisons?

Courtesy Open Europe, this;

“Writing in Die Welt, chief correspondent Michael Stürmer argues that “While all eyes are on Washington, New York, Moscow, and on Damascus, Ankara, Cairo and Jerusalem, awkward silence reigns in Brussels…In the corridors of powerlessness in Brussels you can sense frustration and little momentum.”

It is a corridor down which the EU has been pretending to go but it is no more than that; a pretence.

Suzanne Lynch, again in the IT, sums up the charade that is the EU’s supposed foray into a common foreign and security policy.

Or maybe we could leave it to the inimitable Matt.

The Germans are not even at the races!

@ Tull

They are, however, supplying a lot of the racing equipment.

My point is that the issue of debt relief, if it arises, will be dealt with in its own narrower technical context which, for the moment, relates to economies that make up 6% to 7% of the economic weight of the EZ; not enough to tip the scales unless they are joined by the heavyweights of Spain and Italy. This is a receding possibility.


‘… The indigestible sums are in social spending (including unfunded pension commitments), health and education.





re Dan O’Brien’s comment:

‘“A large workless underclass now exists and there is limited political will and less money to help and propel people out of that condition.”

True, but the people at the bottom are part of a much bigger problem. For obvious and not so obvious reasons, they can know little, or do less, in most cases, about the systemic factors which limit their life chances. The Pearse St area is a couple of hundred yards from Grafton St but it might as well be a thousand miles for all the contact that there is. Pierre Bourdieu has a lot to say about the way in which we all ‘agree’ to maintain safe social distance. Until we don’t or can’t.

The emigration figures include many thousands who do not see themselves, and cannot reasonably be categorized, as part of any sort of ‘underclass’. We can’t even provide employment for highly qualified people with good work records at present. They must have a better sense of what is being denied to them, and who is responsible. Lets hope they don’t all pack up and go.

It’s not just our party political institutions which have failed. The business and professional classes have been inglorious to put it mildly. Even O’Brien’s ‘thoughtful’ IT rode the bubble and is currently taxing its readers to pay off a disastrous foray into online property marketing. The lack of accountability at any level is remarkable.

As for the banks………… if that is the sort of ‘free market’ which Dan is recommending as a cure for ‘social partnership’, nuff said. The SW budget may be bloated, but at least we still have a modicum of peace in society. I suppose that is partnership, Irish style.

@ Paul Quigley

I am not arguing in any way for a reduction in social spending on the basis that this is justified in terms of social equity. I am simply making the point that the areas of social spending, health and education – the bulk of government spending – cannot be funded to the same level as before because of the fall in tax income.

Dan O’Brien is referring to the a resident workless underclass which the system has failed both in good times and bad, not those who choose or are forced to emigrate.

As to why the system fails, it is my own firm conviction that it is largely attributable to the faulty system of electoral representation. Stephen Collins cuts to the chase in today’s IT.

What is curious is not just the lack of debate about the recommendation of the “constitutional convention” but of the convention itself. Another example of a typically Irish political charade!

The electorate may think that the government coffers are a “bottomless pit” and politicians be forced by the present electoral system to indulge them in this fantasy and the troika be used as a useful temporary whipping boy to explain why they cannot; momentarily. However, even when the troika leaves, the debt – that is still growing – will remain.

It is the fact that the public purse will have to be rigorously managed – and in a transparent way – for decades to come which will IMHO change the political culture.

@ Tull

It sounds as though Wilbur’s payday still depends on the “kindness of strangers”.

Everything depends on forces beyond our control. Current EZ policy is headed for disaster. Hence it will have to be changed or the European Union will collapse in acrimony.


Re : Remittances………….. indeed good point.

Your link to Dan O’Brien’s article…… makes some good points, but from my perspective.. it contradicts itself. For example…

“Ireland had the second-highest rate of workless households out of 31 European countries. ”

What does this mean…….. how can a household remain workless in a modern day society with all it’s various expenses?

What I understand from that statement is that Social Welfare payments are TOO generous.

It is known that since 2001 to the present, Social welfare spending increased by 266% approx… yet the cost of living increased by 33% approx.

This is what I don’t understand… here is the crux. How can workless households claim that they are on the margins, shunned, ignored, thrown on the scrap heap etc…. if they can continue to survive on welfare payments?

These so called “maginalised groups” must have been looked after somewhere, somehow. In other words… there must have been somebody on the inside, lobbying for better handouts when budgets where being discussed.

Perhaps what Mr Dan O’Brien is really saying… is that by buying off, throwing money at the so called marginalised… Govt policy has actually made the their situation worse?

Mr O’Brien quotes a Mr Paul Tansey “He wrote the following in 1998 “for the long-term unemployed, counselling, advice and the fashioning of individual pathways back to education, training and the workforce offer the best, and perhaps the last, hope of preventing the emergence of a permanent underclass””

Yet approximately 10 years later…. the unemployment rate had dropped to approx 4%. It is not possible for any nation to have 0% unemployment rate. There will always be a small percentage of people who for various reasons are unemployable.

I remember Ms Mary Harney stating this in the Dail in the early noughties.

However Mr O’Brien does make a interesting thrust … Ireland should be looking at what has successfully worked in other jurisdictions. Instead of trying to implement home grown internal unworkable fantasies with the purpose of either buying off votes or feathering one’s own nest.

I would make just one suggestion as activation measures for unemployed…

1) A tourist police…. this would help reduce crime in tourist areas, promote leadership skills, assist in tourism generation, reduce crime rates, reduce Garda overtime in solving cases, improve Ireland’s image as a tourist destination, increase a sense of civic responsibility, promote a culture of self worth.

A bit like the PINKIES in Dublin Airport, they don’t earn mega bucks, wear a ridiculous colour of shirt… but carry out a very important and worthwhile function.

I’m not surprised at the quote…

“A large workless underclass now exists and there is limited political will and less money to help and propel people out of that condition.”

Irish Politicians were never in a position to offer anything…. except buying off various groups. However don’t forget… Necessity is the Mother of Invention, Mr Oliver Williams was interviewed recently about Twist Soup Kitchens……a good example of a man motivated by necessity rather than sitting back and blaming others.

Oh by the way… your link to IT article by Peter Cross… an excellent hard hitting article.

Unfortunately falling on deaf ears, perhaps Brussels will dissolve the Irish Parliament and make Ireland a “ward of court” to be managed from afar… a bit like N.I.?

@ Tull

“Everything depends on forces beyond our control. Current EZ policy is headed for disaster. Hence it will have to be changed or the European Union will collapse in acrimony.”

Has anything changed in the last 4 years ?
It’s still a banking crisis magnified by inept policymaking.
But it could drag on for a lot longer.

@ Sporthog

Relative to what the country can afford, the level of benefits is clearly too high. But it does not follow that they are “too generous”. Every sector views the treatment of others as too generous. This is unavoidable when the method of decision-making is based on a clientilist political system where the decisive consideration is not the objective justification for a particular expenditure on the basis of an open discussion of the costs and benefits but the electoral impact on those doing the deciding. Being workless does not mean being vote-less!

There is clearly no political stomach for change either on the part of the electorate or those being elected. What is different is that the cabinet is now faced with a balance-sheet of unpalatable options. These have yet to see the light of day, apart from the various kites being flown by ministers trying to protect their patch of which one can be certain there will be a further supply in tomorrow’ press.

This is not the first time the country has faced this situation. But it is the first time that it has been facing such a budgetary black hole (including the drag of debt interest payments) in circumstances where, as a member of a monetary union, it is subject to bailout conditions preventing the adoption of the usual soft options.

@ Sporthog

The number of workless households in the UK has fallen to the lowest level since records began in 1996.

@ All

The Irish conservative mindset was on full display this week when the Constitutional Convention voted against changing from multi-seat constituencies.

So those who have time to compete against rivals in their own local parties for nominations will continue to be teachers, auctioneers, farmers and small town solicitors.

It will take time for people of adventure to shake up the sclerotic system. We are not alone.

The Convention was Eamon Gilmore’s only big idea in opposition but in 1996, a committee chaired by TK Whitaker had already recommended changes in the Constitution and and in particular the electoral system.

Gilmore evolved from a supporter of communism to a supporter of nothing and the Convention is another example of outsourcing of policy making to taskforces, review groups and management consultants.

The late American historian Daniel Boorstin, wrote in an essay, “The Amateur Spirit and its Enemies,” published in his book “Hidden History”: “In the United States today there is hardly an institution or a daily activity where we are not ruled by the bureaucratic frame of mind – caution, concern for regularity of procedures, avoidance of the need for decision” – all of which, Boorstin suggested, was best summed up – “on a sign over the desk of a French civil servant: ‘Never do anything for the first time’.”

As regards debt and the euro, we may well get to a situation where a small economy leaving the euro will not be seen as a potentially catastrophic event.

The reaction to Peter Cross’ op-ed suggests that the cargo-cultists maybe a significant number. However, in future years if Ireland needs to force debt relief or default, it will be a basket case where the current calm waters for the elites would be a distant memory.

@Paul Quigley

You are right when you say the emigrants are by and large not an underclass.
Most developed countries are awash in unskilled labour and have placed restrictions on whom they will admit. Unskilled labour if admitted are under a class referred to as foreign temporary workers and given permits sponsored by an employer for 90 days to not more than two years or so. Engineers, graduate IT workers and a few others in the “professional” class are admitted without restrictions and eligible for citizenship in 3 years. The competition for skilled workers has driven down the citizenship residency requirement from 10 years in places like Germany to 3 years in most prosperous countries.

Some Irish did not avail themselves and their children of this opportunity when they returned during the boom.

Ireland has a history of the majority having an attitude of “I’m alright Paddy, let the devil take the hindmost.”. As my mother used to say “Social Partnership my derriere, the lumpen proletariat were put on earth to be exploited by their betters.” The downturn has exacerbated this self defeating behaviour and it is likely things will get worse before they start to improve. The stoic placidity of the Irish underprivileged has kept FF and FG in power for over half a century. That is not likely to change dramatically in the near future. We need more Stakhanovs and fewer oligarchs.


“A large workless underclass now exists and there is limited political will and less money to help and propel people out of that condition.”

Here’s a thought – increase the minimum wage. Force McDonalds to offer employees wages actually livable on.


Do you think that will be the final outcome for Ireland?

A basket case… with very choppy waters… social unrest… the elites in retreat…and eventually Ireland leaving the eurozone to re schedule it’s debt?

Possibly… but not certain.

I think Ireland has some way to go… the establishment will continue to cut services.. introduce more levies, apply more VAT on the Levies… roll the temporary levies into permanent levies.. then combine the levies into the USC, then reintroduce the levies again.

It’s just theft… plain and simple theft.

Remember the Health Levy Ms Harney introduced… the 1% health was increased.. then rolled into the USC… and I will not be surprised if it is reintroduced under a new name.

The PSO levy on electricity…going up 54% on Oct 1st to 42.87 euro / year… oh and don’t forget the VAT… 13.5%…. rounding up to 48.66 euro / year, needless to say it will be increased again next year.

I’m sure the broadcasting charge will be going the same way.

It appears to be the only form of originality our political class is capable of … levies… vat on levies… increase levies…. introduce more levies…

@ DOCM: “As to why the system fails, it is my own firm conviction that it is largely attributable to the faulty system of electoral representation. Stephen Collins cuts to the chase in today’s IT.”

The multi-seat constituency with PR-STV is not a real problem – its more to do with the fact that the elected Government has absolute control of all parliamentary business – government deputies are merely Yes Men – the opposition deputies are merely Niet Men. There is not a single person, nor group, that can hold the government to account. None! The electorate is powerless, other than at a general election. And then we are ‘presented’ with a Hobson’s Choice of candidates. Most folk vote ‘local’ anyways.

“It is the fact that the public purse will have to be rigorously managed – and in a transparent way – for decades to come which will IMHO change the political culture.”

I really wish all, the very best of luck on that one. In fact I fear we may have even less ‘transparency’ in future. Restructuring (aka: reform) will have to tackle the Terrible Twin of Financial Politics. Politics is now financialized, and finance is now politicized. Which is which? The only obvious differ is that one part of the twin gets elected by the voter, the other is self-elected. In terms of parliamentary democracy we appear to have regressed 100 years.

“Relative to what the country can afford, the level of benefits is clearly too high. But it does not follow that they are “too generous”.”

We certainly cannot afford the ‘benefits’ – in money terms. They are indeed ‘hardly generous’ – probably just sufficient to diffuse significant social unrest. But ditto for all salaries and pensions paid from tax revenues. That’s why we have to ‘get back to the markets’! We need to keep borrowing – for as long as possible. The principal may never be repaid. We might just be able to keep paying the interest. That is, if rates are ‘held down’. If not: its going to get very interesting indeed!

@ Sporthog: Yeah! Getting Revenue to do the collecting was a real “Winner all right!”.

Its possible (maybe probable) that the next two/three general elections will be ‘indecisive’ and we get a re-run of the late 1970s and early 1980s.


It is more a hope rather than an expectation on my part that our financially straitened circumstances, or rather the associated need to behave in a more responsible manner at the dictation of our creditors, will bring about a change in political culture. But the omens are not that bad. Apart from the greatly tightened budgetary procedures in a EZ context, there is also the role being played by the IMF.

I do not think that much attention is any longer being paid to the usual domestic suspects in the run-up to what will be a watershed budget, not so much in terms of content but approach.

Rather more attention is probably directed at the bodies raising funds on our behalf cf link to press release by ESM above.

“Alongside the ESM, the EFSF will remain very active in the long-term bond market in order to finance the ongoing programmes for Portugal, Ireland and Greece. This will continue beyond the end of these programmes as the existing EFSF bonds will have to be rolled over. Therefore, the ESM and EFSF, managed by the same team from Luxembourg, will both be active in the debt markets for the years to come.”

@ Sporthog

The lack of support beyond elites in countries such as Italy and Greece for abandoning the euro, suggests that savers in a country would be very reluctant to support the return of a rickety currency.

Recently, Glenn Stevens, Reserve Bank of Australia governor, said that 20 years ago pessimism about Australia’s prospects were rampant but it was on the cusp of two decades of growth.

He said:

Moreover, areas of the economy that we often don’t think about have proven to be major drivers of – and participants in – that growth. Over the 21 years to mid 2012, real GDP rose by about 100 per cent. Only 3 percentage points of that 100 per cent came from manufacturing. The largest contributions came from financial services (13 percentage points), mining (10 percentage points), construction (9 percentage points), professional services (8 percentage points) and health care (7 percentage points). The number of jobs in the economy has increased by around 50 per cent over the same period, with around two-thirds of this increase attributable to household and business services of various kinds.

Within these sectors, health care (around 9 percentage points) and professional services (around 7 percentage points) have made particularly notable contributions.

In other words, most of the time the answer to the question ‘where will the growth come from’ is that only part of it will come from the old traditional areas, and a fair bit of it will come from new things, often things of which we are only dimly aware. That is, in fact, the nature of a dynamic, evolving economy.

Ireland does have positives and it’s remarkable to see the editorial board of The New York Times paying tribute to Seamus Heaney, lauding him for being ‘friendly and open.’ Switzerland, another small country, has for example Roger Federer who presents a positive image in his area of excellence.

It’s striking though how much in denial Ireland is about the challenges ahead.

Elan, the biggest indigenous knowledge economy company is sold off to a white label manufacturer of flu remedies for the likes of Wal Mart and it evokes a shrug of the shoulders. While the shareholders who stuck with the badly managed company eventually got a good return, wonder if Enterprise Ireland have asked its accountants if Joe Taxpayer is due any return on years of largesse? I bet not.

Wonder why lots of money is available for well-heeled researchers while the apprenticeship system is a shambles?

In the countries where the dual work-education systems work well, Germany, Austria, Switzerland and Denmark, youth unemployment is low. Ireland has the worst system in Western Europe.

Who cares?

As for debt sustainability, it depends on developing a sustainable jobs engine.

Race horses cannot be made from mules.

@ MH,

Good points about Mr Glenn Stevens…. and the Dual Work- education system is another point.

About Elan… I sometimes wonder what does happen to all the innovation which comes out of 3rd level.

Do you think Ireland is missing the support steps between Invention… Innovation and final product in the market place?

There are clever people in Ireland some of whom have excellent ideas but are unable to get the invention / discovery to the market.

I sometimes wonder if there was a “One stop Support Shop” for these people to go to and assist with all market research + the bureaucracy in getting a product to market.

This might have nothing do do with long-term un-employments? Or even the behaviours of financial and political critters as the excrement enters the air condition system?

‘Poverty Impedes Cognitive Function’*

[abstract]: The poor often behave in less capable ways, which can further perpetuate poverty. We hypothesize that poverty directly impedes cognitive function and present two studies that test this hypothesis. First, we experimentally induced thoughts about finances and found that this reduces cognitive performance among poor but not in well-off participants. Second, we examined the cognitive function of farmers over the planting cycle. We found that the same farmer shows diminished cognitive performance before harvest, when poor, as compared with after harvest, when rich. This cannot be explained by differences in time available, nutrition, or work effort. Nor can it be explained with stress: Although farmers do show more stress before harvest, that does not account for diminished cognitive performance. Instead, it appears that poverty itself reduces cognitive capacity. We suggest that this is because poverty-related concerns consume mental resources, leaving less for other tasks. These data provide a previously unexamined perspective and help explain a spectrum of behaviors among the poor. We discuss some implications for poverty policy.

30 August 2013, Vol. 341, #6149

* Sort-term memory is limited to processing seven, plus-or-minus two, data ‘chunks, over a 30 second time interval. [BPW]

@ All,

Prof Richard Tol has a most apt piece in today’s SBP!story/Comment/Opinion/The+government+is+still+in+denial+over+welfare+traps/id/02a626c7-a355-46a1-a264-cf02e360ddbd

Govt still in denial over welfare traps.

Asking the question…. is Ms Burton any different to Mr Cowen?

Insightful last paragraph…

“The government has been making haste slowly. Last week’s events show that parts of the government are still keener on denying problems than confronting them.”

It would appear that the ignorance + denial which got Ireland into the mess… is not helping to get Ireland out of the mess.

Another interesting article… by Mr Cormac Lucey..

“The Myths of the Lockout are no more than ancient history”

SBP… 1/09/13

@ All

It may be worth noting that Ireland is not unique when it comes to the political difficulties associated with regaining control of public finances. Portugal, by way of example, has recently seen a decision by its supreme court that public servants cannot be fired!

This will not make the task for the Portuguese government any easier. However, as these slides associated with an advisory presentation in relation to the role of fiscal councils by Swedish experts illustrate unequivocally, it is a matter for political – not expert – decision.

In Ireland’s case, it is not even possible to argue that the government is putting the cart (fiscal council advisory role) before the horse (fiscal framework), as there is no horse (or even recognition – by politicians or the electorate – that one is required).

I have often wondered if Jem Larkin was a cross between Jimmy Hoffa and Arthur Scargill who did more damage to the workers they represented.

@ All

This is the associated paper. (Some charts are missing but are included in the slide presentation).

The small number of departments and staff involved will be noted. A comparison with Ireland would reveal an ill-thought structure the outcome of a political coalition compromise rather than anything else. Were it not for the constitutional limitation on the number of ministers, the structure would be even worse.


Thanks for that Burton link. The bit that jumps out is where she points out that social welfare payments go straight back into the economy. I presume we can ergo have no economically based issue with having twice the level of SW payments as north of the border. The left should stick to the social arguments, which certainly have merit, but they should stay well clear of the economics and please stop quoting scripture with for example references to “stabilisers”.

If SW payments go straight back to shopkeepers, employees etc. it came in the first place from either of two sources. Either from the self same shopkeepers and employees through taxes, or it was borrowed.

Effectively I, and some others on this blog, are asserting that a continuation of a significant proportion of state expenditure on salaries, welfare, pensions, etc., using ‘borrowed money’ is a really bad idea and has to be reined in.

Saying this is fine, but attempting to put it into practice is also a bad idea. You first have to halt the forward momentum of a very large mass before you can attempt to put it into reverse. Then you have a hard grind toward the position where state revenues = state expenditures.

Unless the principle of this thing (long-term fiscal stability) is understood and agreed, nothing will occur except increasingly futile efforts to preserve what we call our ‘status quo. How far are we from the ‘moment of truth’ – I wonder? Will we (ever) exit the Mushroom Policy era?

As a somewhat ‘interesting’ mental exercise: assume all welfare benefits were abolished and all public service salaries and pensions were ‘capped’ at some low multiple of a Living Wage. All tax ‘incentive’ thingys would also have to go. Now work your way forward. Where will you halt? Explain why? And what does the term ‘full employment’, actually mean? – in the Irish context.

@ Sporthog

About Elan… I sometimes wonder what does happen to all the innovation which comes out of 3rd level.

Do you think Ireland is missing the support steps between Invention… Innovation and final product in the market place?

Science Foundation Ireland could meet its goal of Ireland being a big name in science by 2020 but the impact on innovation could be very limited.

Most innovation arises from the use of existing knowledge and the most successful commercial innovators are not the pioneers. Think of Apple, Microsoft, Google, Samsung and Facebook.

Advances in technology are not necessarily science-driven and the airplane and transistor are cited as technologies where the science followed. Historically, science does not breed technology. It’s usually the reverse.

In Europe, there is what is termed the “European Paradox” where good or excellent research does not result in innovation. However, the problem is that Europeans are poor at innovation in modern sectors. Most big companies predate 1950 and more research spending is not going to solve the problem (Nokia outspent Apple about 4:1 on research).

The Irish and European science lobbies push for a main focus of public spending on curiosity or basic research without an emphasis on applications but in the US, the biggest historical spender on basic research, has always had some goal: the Manhattan Project; the Cold War, the Space Mission and Public Health.

Louis Pasteur (1822-1895), one of Europe’s greatest scientists, had the goal of finding answers for big public health problems as the medical elite ridiculed him. He also engaged with industry, helping a local brewer in Lille to find a solution for vats of beer that were turning sour.

Ireland’s commercial research base is small and areas such as biotech have a high degree of risk: most companies never make a profit and in 2012, only 12% of 286 US firms on public exchanges reported a profit. International research shows that university-industry links improve research performance but as we have seen recently, foreign multinationals in Ireland are not interested. That is a huge roadblock as without them, research that may have the potential of being commercialised, would likely have a very small local market or none.

Only about 20% of tech firms reach their tenth birthday and Ireland has traditionally had a low rate of firm formation.

@ MH,

Most interesting…. “European Paradox”…. another example…I believe MP3 was a European design…. successfully exploited by various companies in the USA.


As has been discussed previously, the mandate given to the Irish fiscal council is geared towards making it an irrelevance. It’s in its members hands as to whether it does end up as an intellectual ornament.

So Michael Noonan, in his last job, allowed a conservative mindset to protect the status quo.

It’s funny that the same man would have been spitting fire from the opposition benches, in respose to such proposals.

@ All

When there was full employment, the welfare budget rose from €9.5bn in 2002 to €15.5bn in 2007 – up 63%. Beneficiaries rose about 80,000 to 1.58m.

In 2013, the weekly recipients are at 1.5m and the number of beneficiaries is at about half the total population, at 2.3m.

O’Connor in the Sindo mentions “political revolution”. I see anything but a “political revolution”, I see a population paralysed in the dazzler waiting to be shaken to death by a Greyhound. To understand Ireland you have to understand the concept of “giving it up” suffering is something you “give up” in this life to be paid back in benefits in the afterlife. There is also the factor of abject poverty being widespread into the 1960s’. If your leather belt broke you could always make a new one from sugawn rope.

Ireland will continue to fumble and bumble forward for the simple reason that our long and sorry past has made us deathly fearful of change. The Sindo poll shows that even sheep can be better organised and show more initiative than we Irish exhibit in a political sense.

I am sure some philosopher must have covered the ground of the underprivileged having the least to lose are most fearful of losing it.

@ Homer

I do not disagree. However, if the debate is reduced to one between the “Left” and the “Right” (I use quotation marks as the concepts are not really that relevant in Ireland), the cause is lost. The only left and right that matter are those of the balance sheet of Ireland Inc.

The Swedes arrived at a conclusion as to how to make them match after a crash which was small relative to that which has impacted Ireland.

We are looking at a twenty-year horizon. The political class in Ireland cannot look beyond tomorrow’s headlines.

@ Homer: “The left should stick to the social arguments, which certainly have merit, but they should stay well clear of the economics …”

The Right have to put forward their social arguments – its their country also. What do they ‘want’? A state populated by a minority of ‘wealthy’ – who pay minimal levels of tax and a majority who range from the ‘comfortable’ to the impoverished: the latter pay tax through their expenditures on their necessaries, the former paying tax at 60% on the margin? And welfare at a bare subsistence? What?

We need to pose these inconvenient questions – and demand meaningful answers. Is that possible?

@ MH: Are we that stupid? That dumb? That dis-interested?

@ Mickey Hickey..

Stumbling, fumbling, etc… yes but for how long? Ireland is still spending 14 Billion more / year. After this budget we might be down to 11 odd billion / year.

The Debt pile continues to get bigger.

In addition there is the pension crisis… again unfunded.

I don’t understand how in 2002, 1.5 million people managed to survive on a social welfare budget of 9.5 bn? How come there was not howls of outrage and indignation? Mass starvation, shoeless ragged children and beggars in the streets?

Yet here we are… 2013, a budget of over 20bn… and it is political taboo to mention bringing welfare payments in proportion back to 2002 levels.

Ms Burton seems to think the economy runs on Social Welfare payments alone… conveniently ignoring the money removed (via taxation and levies) from the economy to pay for her dept’s spending!!!

What planet does Ms Burton come from??????? Ms Burton needs to be replaced with immediate effect, and if it means the Govt will fall… then the country will be another step closer to balancing the books.

It’s going to be very embarrassing if Ireland falls flat on it’s face again… when it reenters the markets and the IMF / Troika are no longer holding our hands.

The problem of confining social supports to those who actually need it as opposed to those who want it and are prepared to vote for it is a world wide problem. In one well governed country I knew a well educated woman with in demand skills who worked for a pharmaceutical research company. Her conditions of employment as dictated to her employer were that she be laid off from July 1st to the second week of September every year. She drew unemployment during her period of “unemployment”. That is when it dawned on me that she was not alone and that unemployment benefits were designed for the well paid middle class and not the deserving people I usually associated with recurring unemployment.

The support for social benefits goes beyond those receiving it directly to include most small businesses, professionals, politicians and many others.

When we leave the Troika teat the weaning will begin. I am a firm believer that transfer payments to individuals should be confined to those under 16 to 18 (pick one) and those over 65 to 70. Then there are the people who are partially or fully mentally or physically handicapped who cannot be put out to starve and have to be fully or partially supported.

Things will get worse and at some point, hopefully short of total collapse the country will come to its senses. But then again “reality is for those who cannot face up to alcohol”.

The Troika has delayed and made the day of reckoning far worse than if they had not intervened. The whole mess could have been dumped on Brussels and Frankfurt in 2008.

I dunno about tech solving the unemployment problem

“Taken altogether, the tech companies in which he puts his money, he estimates, employ fewer than 15,000 people. Twitter offers job security to maybe five hundred in this country. He brands the companies and their leaders “escapist” and “autistic,” absorbed as they are in gadgets and a virtual world. “You have dizzying change where there’s no progress,” he says”

All the guff about Apple – “Jobs was a visionary” – but was he really ? White headphones and ?

Will he be remembered 20 years from now?

@Mikey Hickey
“If your leather belt broke you could always make a new one from sugawn rope.”

I remember from the sixties when some people wore the ‘Indian bag’ as an old overcoat.

Still I was at wedding last weekend, seated at a table of eight, all under 60. I was the only employed person.
There was one one pensioner with a handsome pension from a a plc. The other six people were all fully paid ‘pensioners’ from the PS, pensionati perhaps!
Part of the ‘unlaboured’ labour market. I wonder how they are counted in the stats.
Big Jim would surely be surprised at the opulence of a State that can afford it. He would be be more surprised that his heritage has been abrogated by the representatives for such opulence.
Its not over by a long shot.

@ Sporthog: ” Burton needs to be replaced with immediate effect, and if it means the Govt will fall… then the country will be another step closer to balancing the books.”

If only! Replace her, sure: and? We are as far from ‘balancing books’ as we are from Heaven! Actually, we are a considerable distance up our own rectum … …

We hardly face ‘collapse’, but things will slowly get a lot rougher for more and more folk – the weakest voices first! The loudest get ‘fed’.

We should start with cutting the the pensions of superannuated PS pensioners especially in the tertiary sector. Then move on to former Senior PS. A little birdie told me that a super annuated SG of a govt dept, long retired and on a large multiple of his final salary objected vigorously to any reduction in his T&Cs


‘Things will get worse and at some point, hopefully short of total collapse the country will come to its senses. But then again “reality is for those who cannot face up to alcohol”.’

They must get worse because nothing fundamental is fixed. Absent a major confrontation with the Masters of the Universe, the path of fiscal rectitude ends in debt deflation. Despite what happened in Cyprus, our government still thinks the IFSC is an asset. It’s Haughey’s little wheeze, as opposed to the City of London, which is a much more impressive wheeze. Eurodollars were such a great idea…for the 1%.

Alcohol is just the oldest, and most familiar, (sure we’re Irish) of our nostrums. The cannabis grow-house industry must be contributing quite a bit to GDP at this stage, if Garda seizures are any guide. Meanwhile the Dept of Health plans to tighten up prescribing of abuseable sedative tablets. Another horse that has bolted.

It has to be said that social equity is a complicated notion. People can draw the short straw in a lot of ways. It’s not always obvious who is ‘swinging the lead’ and or why they seem to be swinging same. Any society which celebrates conspicuous consumption, or regards that as a pathway to ‘economic recovery’ will, IMHO, always be manufacturing ‘losers’. A chemical path to happiness looks attractive in those miserable circumstances.

@Joseph Ryan
I assume you are referring to the used Jute-Sisal sacks used for 8 stone bags of spuds.

There was a market for the cotton flour bags used for 8 stone bags of flour. Rumour had it that they were shipped to Limerick where they were bleached and made into bathing suits. There were people in Ballybunion who swore that they could make out the Ranks logo (blue) which had not been fully bleached out.

@ Brian Woods Snr,

You gave me a good laugh there… however if small adjustments were made in Social Welfare spending 5 years ago…. we might be able to avoid bigger cuts in the same dept today.

There does not seem to be any forward thinking at work, “a stitch in time will save nine” etc etc

@ Mickey Hickey,

All very good points…. however I think you have taken a leaf out of LBJ’s book…. “Things will get worse before they get better”.

Or is that “Things are going to get a lot worse before they get worse”

But seriously…. how is it that many Eastern European countries have social welfare payments which are but a fraction of what is paid in Ireland?

And yet they still survive?

Every country handles poverty differently. In Ireland it used to be taken care of by extended families and the Church. The Church has been seriously weakened and extended families in the age of 2.1 birthrates are no longer the bulwark that they used to be.

In Spain and Italy the family is expected to pull together. The ex communist countries have moved from the collective mindset to one step removed from barbarism on advice received from Americans. The pendulum will swing back in time.

The problem faced by most countries is not shortage of supply but shortage of demand. I expect the Irish Gov’t mindset is to stimulate demand and there is no better way than by giving to the poor who spend it all less than 5 km from home on goods largely produced domestically (staples). The virtuous cycle as it was called in previous recessions. Spend your way to prosperity. It has helped so far but the medium term outlook is uncertain.


Note how the Left argument has moved on from Larkin’s days. Then it was a question of injustice and inequality – a successful economy was not worth the price of unjust inequality.

These days even the Left accepts that the success of the economy is paramount, its distribution secondary. That’s why they seize at Keynesian style arguments to support patent fallacies like the more you spend on SW the better for the economy.

@ Spothog: “There does not seem to be any forward thinking at work …”

Exactly!! Glad you enjoyed the laugh. Humour for humans is like blood to a vampire! Actually, is there any ‘meaningful (engaged) thinking about our fiscal predicament going on at all? I gotta wonder! I wish I knew the answer to your final question.

Tull, whilst I empathize with you on the ‘cutting’ bit – its certainly necessary, there are parallel ‘cuts’ that also need attending to. The psychological (as opposed to political or social) difficulty with reducing or cutting anything, is that folk get very irate indeed. They will hold a very bitter, and longlasting grudge. And this, “hands off my property” bilge is just that – bilge!

Say, the min of finance stated that in the next budget all (and I mean all) tax incentives, writeoffs, writedowns, etc., etc., shall be abolished! How long would that run? The social rationale being that such incentives are inequitable since they are biased against taxpayers who are ineligible for the incentives. Actually, its effectively off-loading tax liability from A to B.

This of course does not mean that ‘do nothing’ should be the course of action. Someone, at some future time, will have to pick up and dispose of this lump of fiscal excrement – barehanded! Just not our current dozy crew.

Its hard for me to judge whether any Irish politician is truly ignorant and mis-informed about the national finances, hence incompetent to deal with them. (Some are clearly well informed, some are clearly ignorant) Or, that they have indeed engaged in a meaningful way with our fiscal predicament, but have decided that it would be better (less politically harmful for them) to follow the set of externally imposed instructions; instructions which we now know never worked, nor will ever resolve our fiscal predicament.

Unfortunately, the passengers go where the ship’s captain dictates (aka: RMS Titanic). That was fun, whilst it lasted!

Bye the bye: PS pension entitlements are calculated on basis of final salary x 1/80 x years of pensionable service. So, if you accumulate 40 years of pensionable service (which few now do) you get half your final. There is also a tax-free gratuity of 1.5 times final salary – subject to the same multipliers. Some of my former workmates ‘invested’ their lump-sums in Irish bank shares! Very sore loss there. If we had relied on private pension provision, we would have lost near enough 90% of our savings and would have below subsistence incomes to live on. This happened to several friends, who now are ‘homeless’ and had to apply for a non-contributory taxpayer funded pension. They live with their adult children. Interesting times indeed.

Save your wrath, and your vote, for the treacherous politicians who betrayed generations (born and unborn) of our fellow citizens.

@ Mickey Hickey,

Good points you raise… however I am not certain about your last one…

“on goods largely produced domestically (staples)”

If that was the case.. then I believe your argument would be much stronger.

However there are lots of things in a shop which are not produced in Ireland, even foodstuffs, remember the horse meat scandal… food is being transported like a spiders web all over Europe. What was labeled as Irish was not Irish at all.

For example… Irish Honey… it not Irish at all…. most honey comes from areas of Germany.

If one looks at the efficiency of the taxation system.. lets take 100e off a wealthy person… how much of it actually gets transferred into the hand of a poorer person? Because there is a cost involved in collecting taxes… and there is a cost involved in dispensing benefits. Both Revenue and S.W. depts have costs in just doing their job, the lighting in the offices, the toner for the printer, stacks of manilla envelopes, insurance, the cleaning of public offices, repairs to photocopiers etc etc etc

I am just surmising…. but it is possible that for every 100e taken off a rich person, perhaps only 80e gets into the hands of a poorer person who is dependent on SW, it could be higher or lower… but it would never be equal to 100% of the original amount. So for argument purposes.. lets pretend its 80%.

Of the 80e gets spent locally… some of it will be returned again to Revenue as VAT, some will go to the shop owner, some will go to the transportation company which delivered the goods, and of course.. some money must go back to the manufacturer of the product.

This is where the rub comes in…. for those products which are not made in Ireland… for example Nappie’s for babies( and you may not have known this astonishing fact)…. Comfies are the only Irish made Nappies, well at least according to their website

Therefore when SW payments are spent on other brands of Nappy… it’s money which is actually leaving Ireland, it does not stay in the local economy. In fact we are supporting another economy elsewhere.

If SW benefits were dispensed with the caveat… that it could only be spent on products actually made in Ireland… then perhaps I could believe Ms Burton more. But I can’t see it working, perhaps not even legally.

And what about products which are not made at all in Ireland, i.e. cigarettes etc? Does it mean they cannot be bought with SW money… not really workable, or alcohol which is only made in Ireland… again not workable.

To be honest with you… it’s hard to know what is actually 100% home grown Irish (apart from certain foodstuffs) with all the skullduggery going on in industry… It’s all “smokes and mirrors” as de Bert said.

As Richard Tol mentioned… at the very least require something to be done about Welfare Traps… a gradual tapering of benefits should be introduced to ease people back into the workplace. The current situation is unfair to dependents, employers and taxpayers and requires a bit of “tweaking”.

@Sporthog,snap cards aka food stamps…it’s workable.

“Households CANNOT use SNAP benefits to buy:

Beer, wine, liquor, cigarettes or tobacco;

Any nonfood items, such as:

— pet foods;
— soaps, paper products; and
— household supplies.

Vitamins and medicines.
Food that will be eaten in the store.
Hot foods.”

@ JG,

So it is workable then!!! Good news when good news is needed. But are they listening? Is there anybody in charge who is listening? Or are we wasting our time?

My mother owned and operated a general store bread to six inch nails, pig rations and everything in between. At the age of 7 or 8 onward one of my jobs after school was to take staples to families that customers had reported as having no milk for the young children. I have seen poverty that would bring tears to anyone’s eyes. Electricity cut off with a single candle for a family with 5 children. Furniture sold to buy food, a bag of hay in the broken window. Husbands in England delaying sending money home, tick advanced by my mother, my father was forbidden to advance tick since she decided he was too soft a touch and should stick to farming and selling agricultural machinery.

The real poor cannot afford nappies they use cut up towels and wash them. The staples of the poor are potatoes, cabbage, milk, crubeens, pigs heads, liver, onions tea, sugar, and the odd fag. The social supports of today look like living royally compared to the “good” old days.

The most heartbreaking of all was to see preschool children not able to go out because they did not have enough clothes to cover their nakedness. My mother used to phone the Parish priest, St. Vincent D. P., Public Health Nurse and give them a piece of her mind. I might add that the worst cases were people without relatives in the town or surrounding area. Social pressure could be applied to relatives quite easily and effectively. The children foraged for sticks for the fire and potatoes, cabbage, carrots, parsnips, there was some sympathy for that kind of theft.

While we are not a third world country today that does not mean that “pride” and the need to keep up appearances is not causing real suffering for adults and children in our socialist paradise.

If it was not for my circumstances at an early age I would have had no inkling of the depth or breadth of misery that existed in Ireland. I have seen much more of it on public view in under developed countries around the world. In Ireland people are very conscious of the shame of poverty. That probably explains why there was very little discussion about the Famines the last of which occurred around 1879.

@Sporthog,none off the welfare programs stateside for the work shy are considered “successful” but ehm that’s the point,they not really supposed to work,the people on them are!

Here I go again.

Yet again the only age groups where employment went down are 15-24 and 25 to 34.

What we are experiencing is Ireland a rapidly aging workforce, not just because of falling death rates but also because people are having to work later in life (which reduces demand for replacement and young people are not being taken into the workforce and are having to emigrate.
This poses some interesting questions
What are the consequences of a much older workforce?
What will the effects be on housing demand?
What effects will there be on the cost of private health insurance?
What will be the effects on long term demand in the economy (younger people spend more and save less)?
Also as as been pointed out before those who are getting a start on the employment ladder will be more likely have to spend the first while as an unpaid intern as this is becoming more popular. This will also have an impact on spending power for younger people who stay.

From what has been happening I think we can look forward to increased levels of inequality along the lines of the American model.
I think this what Dan O Brien has been getting at. What we are increasingly seeing is a larger underclass, a large upper/middle class (as those in their 50’s and 60’s have held on to massive unwarranted salary increases during the 00’s and a shrinking middle/lower middle.

@ All

The problem with looking at aspects of the problem of being broke is that it never leads to a viable solution. Indeed, I venture to suggest that it hinders rather than helps. The TOTAL budgetary picture has to be considered, as MABS might put it to a family in difficulty.

The most instructive comparison internationally is with that of Sweden in the 90s following a major banking bust. The extract below from the document I linked to above illustrates the radical nature of the reform and the time that it took. It consisted essentially of parliament deciding an overall budgetary envelope and setting up mechanisms which ensured that expenditure stayed within in. Irish politicians, other than the few ministers who get sight of the budget documents, know little or nothing about the state of the government’s finances because they are NOT consulted, although the Dáil has constitutional responsibility for raising taxes and deciding expenditure. (If the Senate is abolished, despite the fact that it has no role in relation to so-called money bills, this anomalous situation will become even more glaring. Indeed, the strongest argument to my mind for abolishing the Senate is the manner in which it will put into unavoidable public view the lack of oversight and control by parliament of the executive).


“3.2. The emergence of the fiscal framework

The crisis caused a sharp rise in the budget deficit and in government debt (Chart 8 and Chart 5). The huge emerging deficits became an embarrassment to the center-right government in power during the financial crisis of 1992-93. Fiscal consolidation became a top priority on the
political agenda of the social democratic government that came into power after the election in the fall of 1994. It built a reputation of being a competent and careful manager of government finances when in power during 1994-2006. A major goal during this period was to reduce the budget deficit and lower the government debt to national income ratio. Here the government was successful as seen from Chart 85 and Chart 58.
Eventually, as a lagged response to the crisis, a fiscal framework was constructed in a rather lengthy political and administrative process. Actually, this process still continues. A first step was a report published in 1992 by ESO, a think-tank of the Ministry of Finance. This report, put together by non-political experts and civil servants, recommended a top-down approach in the Parliament for the government budget, a stronger position for the Prime Minister’s office and the Ministry of Finance in the internal budgetary process and full coverage for the financing of government expenditures. The report was inspired by a study by Jürgen von Hagen demonstrating that the Swedish budgetary process was one of the weakest in the EU, next to that of Italy.

The ESO report contributed to a parliamentary reform in 1994 encompassing a top-down approach where the Parliament first decides the total volume of expenditures and then the distribution of expenditures across 27 specific expenditure areas. The calendar year became the basis for the budget. From January 1997 an extended fiscal framework was put in place, including a central government expenditure ceiling designed to cover three years ahead, a budget margin serving as a buffer between the expenditure ceiling and the expenditure appropriations, all decided by the parliament, abolition of open-ended appropriations and monthly auditing of government expenditures relative to budget decisions.

In 1998, a surplus target for general government net lending was introduced to be implemented from 2000. Public finances are required to show a surplus of 1 per cent over the course of a business cycle for the whole public sector. The surplus target is commonly viewed as a buffer for economic fluctuations and demographic changes. In 1999 a balanced budget
requirement for local governments was made into law to be implemented from 2000.”

@EM “From what has been happening I think we can look forward to increased levels of inequality along the lines of the American model”
Oh it’s not that bad,bleeding heart left wing propaganda for the most part,whining liberals going on and on….
10,000 illegal paddies and its rough here undocumente,they appear to like it enough not want go home.They get NO zero nada zilch beni’s yet they here!

@ eamonn moran

The issue of what constitutes equitable distribution of public expenditure, and the tax levels to fund it, cannot be decided to the reasonable satisfaction of all largely because of the current fog surrounding the budgetary procedure, which Irish politicians have every interest in ensuring does not dissipate.

The only light visible is that of the budgetary consolidation targets set by the country’s creditors.


From my non-economist, layperson’s perspective, the problem with Burton’s argument is that it is based on two fundamentally flawed assumptions.

The first is the ‘one person economy’ assumption – that all members of a particular class of consumer dispose of their income in the same way simply because their income in insufficient to permit savings or discretionary expenditures. The simplistic premise of the Minister’s argument is not only do they spend all of it, but they do so locally and thus keep local shopkeepers and businesses tills ringing and their doors open for business etc. No evidence is produced to support this contention, though statistics for the number of SME retail outlets that have either gone out of business, or let employees go, might be a reasonable place to start looking as well as a closer examination of the factors which you cite above with regard to levels of expenditure of the ‘average weekly shop’ on imported goods? As for what constitutes ‘local’, in the modern globalised economy, the threads of which are woven even through the most ostensibly isolated area of production I would have thought it is, as you say, very hard to define what ‘locally produced’ even means anymore.

Thus the logic of the Minister’s argument is that if you increase all social welfare payments up to a threshold whereby this ‘one person economy’ model suggests they will still spend all their income, then that amounts to a major economic stimulus. This is so patently absurd it does not merit discussion.

The second flawed assumption arises from apparent confusion about the purpose of SW policy and payments, which, as I understand it, have absolutely nothing to do with providing economic stimulus for SMEs for which other mechanisms exist within taxation/employment policy areas.

Either the Minister believes her assumptions are correct or the issue is being framed in this way for other reasons: (a) because nobody could be so mean-spirited as to challenge its assumptions (and expect to get away with it without being run out of town) or perhaps, more benignly, (b) because badly needed reform of the SW system is too complex and difficult a message to frame or to sell in the current political and budgetary context.

I didn’t see yesterday’s SBP, unfortunately, though I expect Richard Tol’s article would be helpful towards understanding what the reform issues are.

By the way, the Bertieism was “smoke and daggers”!


“The only light visible is that of the budgetary consolidation targets set by the country’s creditors.”

Deep in the grounds of a burnt-out hotel,
Among the bathtubs and the washbasins
A thousand mushrooms crowd to a keyhole.
This is the one star in their firmament
Or frames a star within a star.
What should they do there but desire?

and you didn’t mention growth either

@ Mickey Hickey,

Sorry to hear about those “unfortunate experiences”… however they seem to have stood you well, kept you “earthed” so to speak. And yes humility is a virtue.. we require more of it.

@ Veronica,

You made your points better than I ever could have..

Well remembered… “smoke and Daggers”… my brain is becoming “shot away”.

But something is going to have to give with Ms Burton… the situation is untenable.

If as say replacing Ms Burton will collapse the current Govt.. that could well be true… but this Govt is on shaky ground anyway.

If Ireland falls flat on it’s face again on attempting to reenter the markets in early 2014…. then the Govt will disintegrate into a blame game anyway. In which case a G.Election could be “just around the corner”.

If the Troika were unable to bring Ms Burton to heel… then perhaps the markets will.

@seafoid it’s a holiday here,no one wants ruin the buzz,so good news in NYT this morning…everyone is making money shorting the rupee and blowing up emerging markets.Europe is grand…
Incoming if you in Syria,batten down the hatches Uncle Sam is on his way…

If I’m not mistaken,social welfare payments in Ireland are now “electric” just give them a “card” say SWOT,social welfare outta work,prohibit retailers and ehm clients utilizing it to buy fags and gargle.Hand out a “reward” for grassing any retailer accepting it.Allow encourage local farmers markets to accept them,iPhones have apps.
Thankfully ,the price gouging post master/mistress with the alluring horridly expensive crap is finally out as middleman.

@ Mickey Hickey

Ireland is full of ‘secrets’ and the more we try to hide them the more they haunt us.

I wonder, in your experience, if any of the children of those families to whom you delivered groceries ever upped and disappeared? Back in the ‘fifties, as we all now know, there were people who were ‘paid’ a sort of bounty on the basis of the number of children whom they delivered to industrial schools and care homes and the like. I know of women, who had fled disastrous marriages, for instance, or had effectively been abandoned by husbands who went to England to work but were never heard of again, who lived in terror that they might be singled out for attention and, on some spurious basis, might lose their children. It happened.

Of course, tolerating that sort of thing in our midst is unthinkable in our transformed circumstances of the 21st century. One wonders what the equivalent horrors may be?

‘Sciolist’ is such a great word.

Forgive me… I spent the day listening to Spanish policians talking about unemployment, growth and job creation. They (most politicians) haven’t got a bloody clue have they? They are either detached from reality or are just ignoring it.

Next week I’ll be in England, trying to make annuities sound like a really great thing to put your money into. Silk purses…..

@ Veronica

Well put! But this debate should be in the Dáil, not in one of the refuges of the establishment; the summer school.

@ seafóid

Growth? Like South Georgia?

@Veronica Sporthog

At the time I was experiencing it I had no framework to put it into, to me it appeared normal. It was after a decade abroad that the full import of what I had seen became clear to me. There was nothing unusual about the people by and large they were normal Irish mothers. My mother’s attitude was “There but for the grace of God…” It broadened my horizon but only long after.

There was/is a high degree of social control in Irish towns where people are related to or know each other. My mother for example knew she had a role to play and an image to preserve. That was you do not abandon your customers in their hour of need otherwise you are known as the miserly bitch that let those children suffer malnutrition. There was no one that promoted improving social welfare more than shopkeepers. Of the children I knew most of them went abroad to relatives and work. I went to an electrical/electronic college in England where I met a few in Soho, Hammersmith Palais and places like that.Some did very well and some succumbed to alcoholism, that includes twins one of whom married became a postman and the other never married and drank himself to an early death. Of course some of the offspring of well off families also went off the rails.

Fitzgerald said “The rich are different from you and me.” to which Hemingway replied “Yes they have more money.

I would say the very poor differ from the rest of us in that they lack money and hence opportunity to improve their lot. That is where gov’t enters the picture with a hand up being preferable to a hand out.

@ veronica

The first is the ‘one person economy’ assumption – that all members of a particular class of consumer dispose of their income in the same way simply because their income in insufficient to permit savings or discretionary expenditures. The simplistic premise of the Minister’s argument is not only do they spend all of it, but they do so locally and thus keep local shopkeepers and businesses tills ringing and their doors open for business etc. No evidence is produced to support this contention

“No evidence”, really? As a proposition it passes both the common sense test and as an academic exercise (see Krugman and innumerable other economists who would laugh at you).

You’re allowing your Burton fixation to get the better of you in this.

@ sporthog

Therefore when SW payments are spent on other brands of Nappy… it’s money which is actually leaving Ireland, it does not stay in the local economy.

Err, nope. You’re attempting to strawman here. No-one has claimed anything about ‘made in Ireland’, we’re talking about local jobs in selling, shipping, and all the other ancillary trades which get sucked in like painters for the store and what have you.

On the other hand, you might want to consider the following exercise. That e100 in the pocket of a wealthy person goes towards one bag of nappies, and the rest goes into a bank account, towards buying a yacht etc. That e100 in the pockets of lesser-off beings gets spent on multiple bags of nappies, and the remainder gets spent locally rather than being squirelled away or going towards luxury items – producing your boost for everyone.

@ EWI,

Well the 100e in taxation does not “just come out of a Wealthy person’s pocket”.

It comes out of every taxpayers pocket, including your good self.

Indeed it could also be argued, that those “wealthy people” who own yachts in Dun Laogharie, Kinsale etc…. also support the local economy in the way of Ships chandlers, mooring fees, dry docks, ship yards and all the various services that are required to keep a yacht seaworthy.

So just as you mentioned… “producing your boost for everyone”, including foreign manufacturers of imported goods into Ireland.

As they say on the late late… “something for everybody in the audience”

@the well-heeled reactionaries

Labor Economics 101: Few Jobs Means Bad Jobs

Everyone knows the story about the two old men in a retirement home. The first one complains that, “the food here is poison.” His friend agrees with him then adds, “and the portions are so small.”

[author] did a very crude test of this story. I regressed the rise in the share of hotel and restuarant employment from 2007 to the first half of 2013, across states, against their unemployment rate in July of 2013. Here’s the picture. [,,,]
While far from conclusive, this looks like pretty good support for the bad labor markets lead to bad jobs story. (For regression fans, the coefficient of the unemployment rate variable was 0.0013 with a t-statistic of 4.65, which is significant at the 1 percent level.) There are of course other reasons than the lack of good jobs that could cause the share of restaurant employment to grow more in states with high unemployment.

Of course, Ireland is not the US! Merely a subset …!!


Your illogic, at times, is impeccable. I hear that the ‘state’ might even be paying your salary for same. Well done! St. Joan, a pragmatist, is most impressed.

@ sporthog

So, the future is in us plebs scrubbing the yachts of the rich? Good to know.

And a gentle reminder that we have a progressive tax system here (in theory), so our hypothetical rich person is paying a greater share to match their greater disposable income.

@ EWI,

“So, the future is in us plebs scrubbing the yachts of the rich? Good to know.”

Well………….. when you are in need of a job……….!!

@David O’Donnell

There has been a trend in the USA since 2007 to reduce the hours of work weekly to eliminate the necessity for employers to pay their share of s deductions. To get a true picture you would need to know total hours worked which may not have changed. The USA is the new frontier of zero benefit, reduced work week, disposable employees. A’int freedom grand.

@MH google ObamaCare get back to me..
I find it patronizing and insulting to the hard working people who get up and do work,that the loony left now think …oh those jobs not “good” enough while safely tenured and ensconced in ivory towers,courtesy off same taxpayer.
PK….on “labour”….
“But obviously that’s not the way everyone sees it. In particular, there are evidently a lot of wealthy people in America who consider anyone who isn’t wealthy a loser — an attitude that has clearly gotten stronger as the gap between the 1 percent and everyone else has widened. And such people have a lot of friends in Washington.”

What can at least be said about Joan Burton, a native of Stoneybatter, is that the impact of unemployment and urban deprivation are not abstractions to her.

When I read on Monday the report on Seán Healy’s Social Justice Ireland plan for spending €7bn including funding from private pension funds, to create between 56,000 and 84,000 new jobs and provide up to €2.9bn in additional tax revenues, my first thought was ‘only if it was so easy.’

The record for jobs fantasy remains with the 28-strong group of civil servants, enterprise agency heads, university heads, the head of the university lobby group, and mainly reps from foreign companies, called the Innovation Taskforce, that imagined a Silicon Valley in Ireland within a decade and even bigger than the original with up to 235,000 additional net jobs.

Joan Burton wants full employment but there is little of substance.

The EU needs a new approach, based on investment, growth and job creation – with full employment the overarching goal.

And I take great heart at the very basic rethink of economic philosophy that President Obama is leading in the US.

This back-to-basics re-evaluation recognises the failure of the trickle-down approach that has been dominant since the 1970s.

This is a simplistic analysis that ignores the impact of the workforce in the global market doubling to 3bn by 2000, in that timeframe – following the collapse of communism in Europe and the entry of China and India to global supply chains.

What is striking about it is Burton wants the EU and the US to take action…and Ireland will hopefully get full employment.

What is also striking about the Irish situation is that while half of Ireland’s population is on welfare, so many more whether in farming, sheltered professions or business generally are dependent on public funds.

Irish Budget 2014: Half of Ireland’s population on welfare

@ JG

“hard working people…loony left .. ivory towers”

had me in tears. But a lot of those new jobs have a lot less in terms of benefits than the jobs the previous generation had. And you can argue that this is more “efficient”, whatever that means, but one of the main trends since the 70s has been the passing of risk from the employer to the employee.

One example is pension investing and the move to 401ks.
Costing a lot of those benefits the net result has been a transfer of wealth from the middle class to the rich.
In the US 30% of consumer spending is driven by the top 5% of the food chain. 70% of GDP is consumption. You won’t get that economic recovery from the Hamptons.

I saw a Harpers Index snippet about Russia recently. A Majority of Russians do not believe that “if you work hard you’ll be rewarded”
Is the US going the same way ?

” [This] is a simplistic analysis that ignores the impact of the workforce in the global market doubling to 3bn by 2000, in that timeframe – following the collapse of communism in Europe and the entry of China and India to global supply chains.”

Just keep reading this, again, again and again, until it becomes characteristic of you way of thinking about work (employments of all types) – other than those employments which are ‘tethered’ locally. In ECON 10001 they taught us something about Supply and Price. Read that too!

And another thing (I’ve asked this before): Why do we ‘need’ to work anyway? Define work. If, as being claimed, less and less folk will find ‘work’ – I presume they mean Waged Labour, and many of these will enjoy less and less pecuniary rewards for their effort – whence this great Consumer Society then? Oh!, I Know. They can ‘eat’ credit. Jesus wept!

@ JG: There ain’t no Looney Lefties left – they have all emigrated to the Right. No work on the Left! John! But there sure are a large bunch of very concerned folk. And for all the non-physicists on this site. Money is the only entity with positive mass which can, unaided, float upward against the force gravity – and increases its potential potential energy as it ascends! Think about this also!

And as for those ‘sheltered and tenured’ ones. Fine, as long as there are a bunch of Sheeple paying taxes. But … …

Methinks a lot of folk have a lot of slow, hard thinking ahead.


Agreed on JB. Further, being left to do the ‘vision thing’ on one’s own is a tough ask, particularly in a party that on the basis of current tracking opinion polls is heading for electoral meltdown.

Came across a paper recently which contains some useful insights as to why the expectations of some elites – academic, economic, scientific – of the political elite are often hopelessy unrealistic; including the following:

“Stepping forward to represent one’s
fellow citizens constitutes a claim to
understand and serve their best interests—
the good of society. This claim
must be vindicated and re-vindicated
under the eyes and subject to the changing
interpretations of all, as filtered by the
vagaries of media coverage, until such
time as representation ceases. It must be
sustained, especially and above all, in the
face of a stream of events which are
entirely unpredictable and intractable,
and which press the ‘good of society’
into unceasing metamorphosis. Finally, it
must be tested against the claims of others
who indefatigably seek one’s place. The
existential reality of politics is not power,
it is the ever-present prospect, under the
vicissitudes of competition, publicity and
uncertainty, of its loss.” [French (2012) Political Quarterly Vol 83(3):534]

@ Brian Woods Snr

I suppose a slave to a master, who appears to do nothing, would have an idea of what work means.

Define work! Going to the shop for food or having a jolly in the rain forest when hunger strikes.

For most of human existence, life was nasty brutish and short. Then this thingy called the industrial revolution came along and with the help of new inventions man could match brains and machines to multiply loves and fishes.

My mother used to say: “Expect nothing and you’ll not be disappointed.”

However, humans have aspirations and as a guy named Maslow said, once basic needs are met, we expect more.

Modern drugs are not delivered by the god like manna. Handy really when a remedy can be delivered.

Pre-industrial revolution, the prospect of the good life was available in the ether and religion was a useful social control.

I was making the point in my post that there was more than trickle-down at work in the 1980-2000 period and as for supply and price, so? It seems that’s why Foxconn is working for Apple in China.

Try spending some weeks in an urban society without money and it could clarify some things.

Why should Europe expect ever rising standards of living?

@ veronica

That’s a good quote on politics and there are always more pundits doing the handicapping than players.

@BW snr “Why do we ‘need’ to work anyway? Define work.”
Fools rush in and all that.

It seems to me that anywhere that a bunch of people is gathered, they will attempt to use the available resources to jointly improve their environment; that is what a community is about. Different values will lead to different outcomes: Hitler did not emulate Ghandi, but there is the similar drive to improve.

It became work when the reward was money from another in exchange for improving the environment to their terms.
If a social worker organises self-help classes, that is work: if a volunteer does the same, it is volunteering. They are both improving the environment but the payment of money for services defines what is work.
It also defines the volunteer as someone who is not paid. But working for free is a material distinction: the real difference is in the values. You cannot buy values.

Money is just a symbol way of comparing resources in order to use them more efficiently. For instance to put them aside by saving or to bring them forward by investing.
We are now in a situation where the resources that are defined in monetary terms for changing the environment, whether economically or socially, are very, very limited. ‘Eating credit’ is not an option.

The resources are still there; it is a question of finding ways to bring them into play. That is likely to mean a change in values. Values do change. As MH says pre-industrial revolution religion was a useful social control: but the values changed.
Politics in the broad sense is making the tools according to particular values and asking/using economists to interpret what is happening!

@ MH: Thanks for that! Good laugh!

“For most of human existence, life was nasty brutish and short.”

Medieval peasantry – despite the best efforts of Hollywood, had the Church as their trade union! Mandated lots of Holy Days! Lots of ime outs! Apart from harvest time, when everyone had to go into the fields. Later, everyone had a ball. No crops: no food, no drink, no fun!

Mandating that folk ‘work’ – when employment opportunities are limited, is intellectual and social masochism. Perhaps that Northern Europe Protestant Work Ethic waffle (Weber?), is just another load of academic bilge? The Soviets had Gulags. The Victorians, Workhouses. Pol Pot just cut short the misery with a bullet!

God preserve us from social do-gooders. Life’s great mischief makers – on steroids!

@ veronica: Thanks for the quote. I shall print out and keep.

@ Conor: Thank you also. Thoughtful, again! Appreciated.

Now if you can excuse me – I need to ‘go to work’! ‘She Who Must be Obeyed’ has directed me to apply some paint to some nearby woodwork!

My reward is a negative one; I shall not be ‘beaten’ – again! Funny that. One can get used to being ‘beaten’ – and you even get to like it! “Ah!, well! – that’s work for ye!”.

Thanks again, to all here who provide me with enlightenment.

@Seafoid,Detroit was once a thriving booming metro area,the rich people ruined it ..or maybe some unaffordable pension/beni packages were a factor…

@Brian Woods,Snr it was “labor day” yesterday a celebration of work and workers,my comment was in relation to a link from DOD above.

Income inequality,the end off the American dream is hardly new news….

@ JG

Detroit and the Ruhr Valley were both hit hard by the convulsions of the 1970s.
One of them had a heroin epidemic and other didn’t.

@ Michael

“My mother used to say: “Expect nothing and you’ll not be disappointed.””

Obviously not a Tiger cub

Did she know Mrs Hickey?

Is it true that SF have dropped the wealth tax from their pre budget submission & are backing away from the 48% 3rd rate of IT. FF are the only socialists left now.


SF’s commitment to the socialist economic policies has always been skin-deep; more a cover for their irredentist nationalism than a position that had been genuinely thought-through. Various commentators have long anticipated that SF would begin to move towards the centre in respect of economic and taxation policies. They need to broaden their political base. Meantime, the centre, as a political space, begins to look a bit overcrowded.

@ JG

Isn’t Detroit some sort of a doughnut with all the black poor in the middle and the whites in the more prosperous suburbs ? How come they couldn’t bring them all under the same tax base to spread the cost of repairing the centre ?

@ seafóid

As the French might say; “quelle surprise!”.

The obfuscation by the FF representative on the PAC, or whatever committee of our esteemed Dáil is involved, on RTE this evening was a sight to behold.

@ seafóid

I see from your link that it is the Finance Committee.

This from the associated comments;


4% of all mortgages is 4%/12%= 33.3% of all mortgages in serious arrears are strategic arrears and 66.7% are distressed arrears. So basically the same as my rough estimate 10 months ago.
4 Hours Ago.”

Duffy says 20% – then again one, based on recent evidence, is wise to take all ‘estimates’ from Irish bankers with EXTREME CAUTION.

@Mickey Hickey

Trade union membership in the US is 5-7%. The Universities peddle the ‘unitarist’ ideology – tenure and research grants probably depend on it in most of them.

p.s Now don’t be tellin any tales from the Hammersmith Palais …

p.s.s. Blind Biddy [from Beirut] sends her regards to Mrs. Hickey.

@DOCM/Gregory Connor

Somewhat mathematically-challenged – AIB ain’t BOI etc.

Methinks the Citizenry is in distress to the tune of 110 BILLION, most it odious financial. ~66%GNP. Shock Horror ….

@seafoid,that idea already won a ‘darwin’ award for stupi….so like say spread the failure to govern around….bit like the BTL mess in irl 🙂

“Detroit is defined as the larger metro area that includes its suburbs, it has enough money to provide all its residents with adequate if not good public services, without falling into bankruptcy. It would come down to a question of whether the more affluent areas of this Detroit were willing to subsidize the poor inner city through their tax dollars and help it rebound. That’s an awkward question that the more affluent areas would probably rather not have to face.”

“In a nutshell, Reich wants to make things right in Detroit by expanding its boundaries. Or does he want to expand the burbs’ boundaries to encompass Detroit? Doesn’t matter, really. The key to Reich’s ingenious plan is for miserably failed Detroit to glom onto the burbs for resources — that would be money, in plain English.

@DOD ya got a link there david on union density………or you just picked a low number………..

Gregory Connor and Karl Deeter are to be congratulated for calling a spade a F……g shovel months ago. They were excoriated by the right on luvvies on the left and the Chancers mostly but not exclusively in FF but also in the media who want to get their buddies off the hook.

Maybe Gregory could give us his estimate of strategic default by OO or BTL. My estimate that given the buoyant rental market and rent supplement, BTL won’t pay fraud is close to 100% as makes no differ. Carpe Diem.

@DOD here in case link does not work…..5 would be like ehm less than half,oh well lets not let facts get in the way huh-need more links r u good now ?

“In 2012, the union membership rate—the percent of wage and salary workers who were members of a union—was 11.3 percent, down from 11.8 percent in 2011, the U.S. Bureau of Labor Statistics reported today.”

@ JG

That’s American capitalism, I think.
Detroit didn’t have to end up bankrupt.
But saving it would have been socialist.


Duffy sez 20% and Gregory says 35%.
So how to square the numbers ?
I wonder what the BoI figures are.

In respect of ‘strategic defaulters’ a key statistic is the percentage of BTL mortgage holders who have not given a personal guarantee. Those mortgage holders have every incentive to withhold rent. I know one investor with several BTL properties who was not asked to give a personal guarantee on his – by now – severe negative equity houses and apartments. You can imagine what he is doing with the monthly rents. I’ve no idea if the non-seeking of personal guarantees was widespread but wouldn’t it be interesting if this statistic was available?

Seafood is a golf club cocktail party leftie. There should always be someone else who should be tapped to pay for your Dutch Gold and methadone lifestyle.

@ JG

I had forgotten that! Krugman is equally wrong; and not for the first time.

“The business of America is business” as Calvin Coolidge famously remarked. The Irish can live with it when they live in the US but want different rules to apply at home.

@ seafóid

I simply quoted Gregory Connor. When those that created the present mess represent themselves as defenders of the victims, I take leave to doubt whether they have real victims – innocent young couples investing in their dream home (is there any other kind?) – in mind. Rather, unlike in the US, they want the rules adjusted to allow many of their supporters to pull their financial irons from the fire.

How sloppy of me – 5-7% of the private sector workforce. Keep up the good work – never know – you might eventually learn!

Now get us the private/public breakdown – deres a good lad! A useful id… er labor and time saving device.

@DOD-its ok to be wrong…you should be used to it:)
here ya go link above,now what can i ‘learn’ here,that you just plucked a number from out the air,oh you meant ‘private’ sector union density-do you have a point here,you have had plenty time to make it ?
“Public-sector workers had a union membership rate (35.9 percent)….

@ Tull: “There should always be someone else who should be tapped to pay for your Dutch Gold and methadone lifestyle.”

If those critters had jobs and all, they could pay for their own ‘lifestyle’. What do those Masters of Wall Street sniff: Bollinger and Coke – as in aine? No matter. Hoodies bad. Pinstripes good. Orwell would enjoy this.

And as for this slimy guff about ‘strategic defaulters’. There is always some critters who will not pay their bills, ever! So sue them, and shut the **** up!

The chief officers and directors of our financial institutions who lent into a bubble residential housing ‘market’ (together with the financial regulator, senior civil servants and government ministers)are individually and collectively responsible for the current financial mess. They were, allegedly, in charge of things. What part of the word No do they fail to grasp? They were/are simply incompetent oafs. Anyone have evidence to the contrary?

@ Tull: “There should always be someone else who should be tapped to pay for your Dutch Gold and methadone lifestyle.”

If those critters had jobs and all, they could pay for their own ‘lifestyle’. What do those Masters of Wall Street sniff: Bollinger and Coke – as in aine? No matter. Hoodies bad. Pinstripes good. Orwell would enjoy this.

And as for this slimy guff about ‘strategic defaulters’. There are always some critters who will not pay their bills, ever! So sue them, and shut the **** up!

The chief officers and directors of our financial institutions who lent into a bubble residential housing ‘market’ (together with the financial regulator, senior civil servants and government ministers)are individually and collectively responsible for the current financial mess. They were, allegedly, in charge of things. What part of the word No do they fail to grasp? They were/are simply incompetent oafs. Anyone have evidence to the contrary?


As has been commented on many times, stupidity is not a crime, either on the part of the lender or the borrower. Mortgages are advanced against the property as collateral and if the borrower cannot keep up the payments, something has to give. If it does not the entire system of mortgage finance will break down and the banks providing it with it.

To quote Wikipedia;

“A mortgage is a security interest in real property held by a lender as a security for a debt, usually a loan of money. A mortgage in itself is not a debt, it is the lender’s security for a debt. It is a transfer of an interest in land (or the equivalent) from the owner to the mortgage lender, on the condition that this interest will be returned to the owner when the terms of the mortgage have been satisfied or performed. In other words, the mortgage is a security for the loan that the lender makes to the borrower.”

It suits politicians to ignore the distinctions between this and other forms of lending because it also suits those who elect them to do so.

cf. the situation in Greece as reported by the FT.

Thanks Tull.

And isn’t QE social welfare for balance sheets ? Everyone likes a hand out, really.

Über-bear Albert Edwards gets a mention in the FT every so often. This note of his sounds very interesting. I wonder what the chances are of the crisis morphing to a stage beyond which CB string pushing works.

“Not invited to Jackson Hole was Albert Edwards, Société Générale’s famously bearish global strategist, who warned this week the crisis would not be confined to emerging market economies with yawning current account deficits. “I see this as the beginning of a process where the most wobbly domino falls and topples the whole, precarious, rotten, risk-loving edifice that our policy makers have built,” he wrote in a note”

@Brian Woods Snr,no pinstripes or coke these days,the feckers have introduced random drug testing,no longer just at the interview go figure…
It’s khakis,polo shirts and lashings off adderall,they like smarties here in NY.
During and after TARP,the bean counters clamped down on the bubbly too,it’s just not as much fun these days…..
Instead of first mover advantage,go for last mover status,cooperate a bit,throw a few bucks at it every now and then….the courts will be overwhelmed BTL foreclosure/repo should be non judicial….

@ DOCM: Yes, that def of a mortgage is correct.

But … ‘duties of care’ and all that jazz! As a lender I have NO interest in asking, politely of course, for each potential borrower to provide a ‘true and fair’ account of their financial situations? – which of course the lenders into the Irish residential property sector did, and they have the paperwork to prove it. Or is it, “They have like ****!” Someones made a grand b*llsup.

And yes, you’re correct again. It suits the Suits!

@ JG: Hi there, again! They sure sound like nice uniforms. Labels to the front, then? GA? D+G? The mind boggles! And that Mortgagegate scam. I hear its brewing up nicely.

@Brian Woods Snr,Hi Brian hope the garden is good this year, the uniform depends on a lot of things.The arrivistes and easter europeans do tend like to let you know who made their clothing….but most go or a more subtle/knowing look.
Augusta golf club has the flag in the green logo,the Maidstone Club in EH the whale,bit of Brioni adds a nice dash of color….etc.

There is a scam a day,those dastardly rakish bankers heavens above-this morning its SP whining that the yanks targeted them in revenge for a s**t sherlock !
Sure you would hardly get out bed if you listened to half it,I’m blessed with a sunny disposition and bright outlook…

“The Justice Department said that federally insured banks and credit unions bought debt deals rated highly by S&P because they thought such top-notch ratings indicated there was less risk than lower-rated securities. But behind the scenes, the government alleged, S&P was assigning high ratings to deals in order to please bankers and other clients. S&P has said such claims are “meritless.”

Brian,on a more serious note i think AIB has bout 6,000 clients pleading the fifth,if you know anyone this is just about the worst thing one can do.
Engage,obfuscate,negotiate make a deal break it,pop by,write letters wear them out but DONT ignore them.
Hang around the hoop by making one payment say every 3 months or so,you never know wait long enough the ball may bounce your way,but do NOT ignore them.Decent yank paper on CPO’s compulsory purchase orders off read it..

@seafoid i hope i never end up in a foxhole with you……

@ JG

Do you think the US is close to exit velocity ? The recovery is supposed to be driven by the housing market.
Europe is still mired in debt. There’s prolly loads of debt hanging around in the background in the US as well.

Maybe it’ll all work out.

@seafoid,trying get up speed on Philip’s link/paper regarding eminent domain/cpo’s ireland.
here is what most people in NY read every morning………a lot the other stuff is just noise:)
Looks like im gonna have a good day…

“Some kind of setback could throw you out of your stride today but overall things are very much in your favor at the moment so there is no need to panic. The recipe for happiness is simple: worry less, love more.”

@John Gallaher
Did you know that the NYPost is touting Ireland as the second best place to vacation alone, right after Australia.

@Mickey Hickey,Hi Mickey I truly did not despite reading it every morning.I read it “backwards” in that the sports section is terrific,then my horoscope I kid you not and “page 6” the “terry keane” or gossip section.
It’s a Murdoch paper,competes here with the Daily News,it’s a great read.

The vacation alone thing is a bit odd,why Australia and Ireland ?
Any rational reason given for Ireland ranking so high on the list,assume Venice or Paris solo would be a bit much….

@ JG: That is good advice. I tried it on a school class-mate – he funked out. Now he will ‘lose’ his home!

The whole 9 yards is a mess. ” … and if not, it’ll do till Mess gets here!” Cheers.

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