Cowen tells us to shut up

Macha

Did anyone else hear Cowen saying that criticism of the government's handling could damage the Irish economy and advising the media and political leaders to desist from any negative comments?

Am I insane or is this censorship?

mike65

The words of a looser.

BroomBurner

Right up there with Bertie's suicide comments.

x in the city

Cowen is the ugliest mofo of a leader in the world, who would listen to him?

D.S.

Relax lads. He's not saying you don't have a right to say what you want. He's just pointing out (and rightly) that the amount of illinformed dribble that we are seeing in the press and generally spoken about is causing a crisis in confidence.

Personally, I think the media are making this whole thing an awful lot worse. We know they need to sell papers but all the papers are accountable for reporting sensationalising and misleading the public to some degree.

Things are dire, no doubt about it. But journalists, with no bank ground in banking, are attempting the joining the dots, and have on more than one occasion got it wrong or not painted the whole picture.

International confidence in Irish banks is paramount to kickstart our economy again and Cowen is simply stressing.

I'm not pro Cowen by the way - just think the man has a point.

Macha

So we should only listen to the self-designated "experts"?

This really is as far as you can get from Obama's comments on needing good ideas to get out of the financial crisis, wherever they came from, and how it wasn't an intellectual exercise.

I think a comment like this from the leader of a country smacks of desperation and does more to lower confidence than any attempt by the opposition to point out the all-too-common flaws in this government's flailing attempts to deal with the economic crisis.

This misconception that we "talked ourselves into a recession" totally ignores the very real causes for the mess we're in. And a huge one was people talking up the markets! Have we learned nothing?

tbaymusicman

its true what he says!!!!if you got diarrhea some of it will stick to the sides haha in other more appropriate words if all this **** thats been said about him gets out to potential investors there not going to want to invest now are they hence it effects the economy

bmaxi

I'd say hold on to your hats, this is the same Brian Cowen who said, there is no danger of recession but if people keep talking about it, it will happen.

Grudaire

bmaxi wrote: »

I'd say hold on to your hats, this is the same Brian Cowen who said, there is no danger of recession but if people keep talking about it, it will happen.

Needless to say they did keep talking about it, and look at what happened. The man had a point!

Liam Byrne

He's just pointing out (and rightly) that the amount of illinformed dribble that we are seeing in the press and generally spoken about is causing a crisis in confidence

Some of the ill-informed dribble was a quote from Manseragh that Cowen himself later corrected.

Just goes to show how organised FF are......

nesf

D.S. wrote: »

Things are dire, no doubt about it. But journalists, with no bank ground in banking, are attempting the joining the dots, and have on more than one occasion got it wrong or not painted the whole picture.

Exactly, and the problem is the public can a lot of the time take it on good faith that the author of a newspaper piece knows what they are talking about.

nesf

Liam Byrne wrote: »

Some of the ill-informed dribble was a quote from Manseragh that Cowen himself later corrected.

Just goes to show how organised FF are......

Believe me, if you've any formal training in Economics, specifically in banking/international finance it's as painful to listed to the FF members speak as it is the rest of the Dáil and the press a lot of the time.

It's a bit like having studied Physics in college and watching badly researched Sci Fi on television.

Macha

nesf wrote: »

Exactly, and the problem is the public can a lot of the time take it on good faith that the author of a newspaper piece knows what they are talking about.

It would help if FF had given us some proof that they know what they're talking about. I guess a lot of people end up relying on the media because they don't trust the government.

old boy

was he not the guy on telly who was telling us how he prudently managed the economy during the (good) times.

nesf

taconnol wrote: »

It would help if FF had given us some proof that they know what they're talking about. I guess a lot of people end up relying on the media because they don't trust the government.

Well if Malcolm Kelly is correct about the Department of Finance and the Central Bank not wanting the guarantee to extend to Anglo then FF have really been ****ing around (i.e. ignoring the people who would have a far better idea than an elected politician of what not to do).


Micheál Martin last night on Q&A did not at any point come across like he knew what he was talking about, depressingly neither did Eamon Gilmore. The only two people who struck me as some way competent were the Economist and the Tax Lawyer!

Svalbard

Perhaps Cowen, like me, is sick to the back teeth of all the negativity in the country at the moment. Stocks and shares will rise and fall but the Irish will always love a good moan. Its not about ignoring reality. A positive, can-do outlook is a good start at getting this country back on track and a better way to live life in general.

BTE72

Brian Cowen clearly has no idea what to do next other than try to squeeze more taxes and cut public services from the common men and women to pay for the mistakes of himself his government , his banking and high end business buddies aka property developers.

An expert, a journalist or even a Leaving cert student could have told you for the last 6-7 years the rate of property prices were rising too sharply and the sheer blatent ignorance from Lenders added with the greed of the Department of Finance watching all that lovely stamp duty rolling in.

We should be calling for the heads of Cowen & co , Never mind keeping quiet.... No Leader of the people is he is just like a little lost puppy in this shambles of an economy.

He still sits back while money is steadily streaming out of our retail economy to the uk and beyond. People will now wisely shop around for bargains because it's the sensible thing to do until products and services fall in line with the uk.. And if that means cutting the rate of VAT back then do it. This may only be a little finger in a huge dam but it's a small start.


grrrrr.....

stepbar

D.S. wrote: »

Relax lads. He's not saying you don't have a right to say what you want. He's just pointing out (and rightly) that the amount of illinformed dribble that we are seeing in the press and generally spoken about is causing a crisis in confidence.

Personally, I think the media are making this whole thing an awful lot worse. We know they need to sell papers but all the papers are accountable for reporting sensationalising and misleading the public to some degree.

Things are dire, no doubt about it. But journalists, with no bank ground in banking, are attempting the joining the dots, and have on more than one occasion got it wrong or not painted the whole picture.

International confidence in Irish banks is paramount to kickstart our economy again and Cowen is simply stressing.

I'm not pro Cowen by the way - just think the man has a point.

+ 1

taconnol wrote: »

So we should only listen to the self-designated "experts"?

This really is as far as you can get from Obama's comments on needing good ideas to get out of the financial crisis, wherever they came from, and how it wasn't an intellectual exercise.

I think a comment like this from the leader of a country smacks of desperation and does more to lower confidence than any attempt by the opposition to point out the all-too-common flaws in this government's flailing attempts to deal with the economic crisis.

This misconception that we "talked ourselves into a recession" totally ignores the very real causes for the mess we're in. And a huge one was people talking up the markets! Have we learned nothing?

Maybe he's telling people to stop basing their opinions on the crap in the Mirror and a bit more from the Sunday Business Post...

Svalbard wrote: »

Perhaps Cowen, like me, is sick to the back teeth of all the negativity in the country at the moment. Stocks and shares will rise and fall but the Irish will always love a good moan. Its not about ignoring reality. A positive, can-do outlook is a good start at getting this country back on track and a better way to live life in general.

A good moan and someone else to blame.

Grudaire

Svalbard wrote: »

Perhaps Cowen, like me, is sick to the back teeth of all the negativity in the country at the moment. Stocks and shares will rise and fall but the Irish will always love a good moan. Its not about ignoring reality. A positive, can-do outlook is a good start at getting this country back on track and a better way to live life in general.

Did anyone see the article in the times by the American Ambassador leaving? He had a point that there is a general assumption of inadequacy in the government, and that a government can acchieve more with support from the people

To answer the question a polite open request to stop downtalking everything is not censorship. If the Times runs a story about how the government was putting pressure on them to stop talking about Anglo, then come back and we can talk censorship!

Mr Ed

Cliste wrote: »

Needless to say they did keep talking about it, and look at what happened. The man had a point!

I think we were heading into recession long before we were talking about it

nesf

Mr Ed wrote: »

I think we were heading into recession long before we were talking about it

You can't really untangle sentiment here, it's an integral part of the market and of what creates and causes booms, busts and recessions et al. There is some sense in saying that a country can talk itself into an even worse recession than would otherwise happen because the effect sentiment can have on aggregate demand etc.

Grudaire

Mr Ed wrote: »

I think we were heading into recession long before we were talking about it

Hey quick, get this man a sense of humour, quick I'm dying out here;)

Ah I agree, but to be fair it's the people who voted him them in (again), so I mean someone must be happy with them. (Note I didn't get to vote last time:()

gurramok

nesf wrote: »

You can't really untangle sentiment here, it's an integral part of the market and of what creates and causes booms, busts and recessions et al. There is some sense in saying that a country can talk itself into an even worse recession than would otherwise happen because the effect sentiment can have on aggregate demand etc.

Just to point out, that demand cannot be expected to flow when that demand is up to their eyeballs in debt
Private sector debt at €400bn, the highest in the EU and 80% of it mortgage related.
Along with mismanagement of the economy, one cannot expect people to spend money they do not have and where a large proportion of that workforce is in unsustainable employment.

I'd agree that the media do whip up some stuff in good times and bad where sentiment ruled.
Its a pity they were not screaming from the rooftops pre 2006 to educate the public and the ear of the politicians where all this bubble would lead to and that is tears.

nesf

nesf wrote: »

There is some sense in saying that a country can talk itself into an even worse recession than would otherwise happen because the effect sentiment can have on aggregate demand etc.

I'll expand this into an example for people because I feel it might be worthwhile to work through some of the logic that underlies this.

Say you have a bunch of lay offs. People see these lay offs and they make them nervous and they start to spend less and save more in case they get laid off too. This reduces what economists would call aggregate demand, there is less demand for goods because people are buying fewer things. This reduction in aggregate demand impacts on companies within the economy which causes jobs to be put at risk because companies might not be able to pay everyone if they aren't selling enough. This can create more lay offs which takes us back to the start again.


This is (for those who care) a simplistic Keynesian example, which was very much evident in the Great Depression in the 1930s. There is a similar problem with "company sentiment" where companies because they fear a reduction in aggregate demand start laying people off which can become a self-fulfilling prophesy as above.

Macha

stepbar wrote: »

Maybe he's telling people to stop basing their opinions on the crap in the Mirror and a bit more from the Sunday Business Post...

Well then he should say it in a manner that isn't so reminiscent of Soviet Russia. I accept that there is a lot of paranoia slopping around but I don't think he's addressing the problem in the right way.

He has also, apparently sent letters to Gilmore & Kenny telling them to keep quiet as well. I don't like the arrogance of a man who thinks he has all the solutions.

BTE72

Cliste wrote: »

Hey quick, get this man a sense of humour, quick I'm dying out here;)

Ah I agree, but to be fair it's the people who voted him them in (again), so I mean someone must be happy with them. (Note I didn't get to vote last time:()

---

Erm .... What was the alternative?

There is a deep set corruption within the government and it would have been all the same if the fine gael had gained power.

Cosy capitalism and perverted politics .... Tribunals tribunals tribunals and so the story goes on.

nesf

gurramok wrote: »

Just to point out, that demand cannot be expected to flow when that demand is up to their eyeballs in debt
Private sector debt at €400bn, the highest in the EU and 80% of it mortgage related.
Along with mismanagement of the economy, one cannot expect people to spend money they do not have and where a large proportion of that workforce is in unsustainable employment.

Agreed and this is actually getting into the meat of the issue regarding where aggregate demand should be given that credit has dried up (i.e. in the sense that where aggregate demand would have been if there wasn't abundant cheap credit in the economy). It's not going to return to 2006/2007 levels any time soon and we really need to adjust the budget to this reality.

Grudaire

gurramok wrote: »

Just to point out, that demand cannot be expected to flow when that demand is up to their eyeballs in debt
Private sector debt at €400bn, the highest in the EU and 80% of it mortgage related.
Along with mismanagement of the economy, one cannot expect people to spend money they do not have and where a large proportion of that workforce is in unsustainable employment.

I agree that at this stage we aren't getting back to where we were, we can work from where we are now though.

Just to highlight one part of that. Private Sector Debt is 400bn. My point would be that the Private sector is truely the root of the problems, and the government has failed to adequately monitor them some might say. However how can they, last week weren't the IFA arguing against stronger monitoring of the Pigs. I mean come on the state ends up cleaning up after their f'n mess, then they have the cheek to suggest that they are doing fine!?

Love your point about the press aswell!:)

Grudaire

BTE72 wrote: »

Erm .... What was the alternative?

There is a deep set corruption within the government and it would have been all the same if the fine gael had gained power.

Cosy capitalism and perverted politics .... Tribunals tribunals tribunals and so the story goes on.

I haven't seen your election manifesto... (maybe I have, I may be making gross assumptions here!) If there's no viable alternative, make one (hell I might help if you make more sense then the rest of em!)

BlaasForRafa

Svalbard wrote: »

Perhaps Cowen, like me, is sick to the back teeth of all the negativity in the country at the moment. Stocks and shares will rise and fall but the Irish will always love a good moan. Its not about ignoring reality. A positive, can-do outlook is a good start at getting this country back on track and a better way to live life in general.

Thats the kind of "ah sure it'll be alright" type attitude thats gotten this economy into the state its in now.

Under FF and Cowens watch (and I did vote for them in 2002 so I don't have a set political "side") they allowed public expenditure to run out of control. now that exchequer returns have collapsed we have a huge budget deficit (estimated at 12.5 billion but could go higher) which will mostly have to be paid by increased borrowing....just at the wrong time when lending is at its tightest.

Income tax returns have fallen, capital gains, vat, stamp duty, corporation tax ...have all fallen through the floor and the money to pay public "servants", hospitals, education and other services has to be found somewhere. Oh and the increased dole queue that was 4.5% at the start of 2008 and was 8% at the end of 2008 (the highest increase ever) is estimated to go up to 12% by the end of the year.

The economy is going to be hit by negative growth this year and quite possibly deflation. Should we just ignore this and blithely saunter on without a care? Ireland got rich for a short while and the country went a bit mad, now the mistakes that the government made in the last 7 or 8 years are coming home to roost.

I don't know if you were around in the 80's but I was growing up then and this country was an utterly miserable place. I don't want the country to go back to that type of era but I have absolutely no confidence that biffo Cowen or Lenihan has a clue of how to avoid it. This seems to be a disaster prone government...theres no guarantee that FG or Labour could do any better but I don't see how they could possibly do worse.

nesf

BlaasForRafa wrote: »

I don't know if you were around in the 80's but I was growing up then and this country was an utterly miserable place. I don't want the country to go back to that type of era but I have absolutely no confidence that biffo Cowen or Lenihan has a clue of how to avoid it. This seems to be a disaster prone government...theres no guarantee that FG or Labour could do any better but I don't see how they could possibly do worse.

Well the fact that they haven't run up huge public debt over the past decade makes a return to 80s style misery less likely at least. Though McCreevy's expansion of public spending was real bad thing to do and to an extent Cowen later inherited these levels of public spending which the public now expected since they had gotten used to it! That's where the real **** ups were made, early on in the boom.

gurramok

nesf wrote: »

Agreed and this is actually getting into the meat of the issue regarding where aggregate demand should be given that credit has dried up (i.e. in the sense that where aggregate demand would have been if there wasn't abundant cheap credit in the economy). It's not going to return to 2006/2007 levels any time soon and we really need to adjust the budget to this reality.

Just to add, you're right in the global sense of the aggregate demand. (you would be right domestically if we manufactured stuff on a large scale with some sense of a demand for that stuff here as well)

Just the other day, a car parts factory is laying off hundreds. Now, we can do nothing about that as they export based on that aggregate demand in international countries.
If that global demand returns with positive sentiment, then maybe some industrialist will replace those jobs with new similar ones. It will have minimal effect here as our cost base is so high.

For Ireland, because of mismanagement, there is nothing much the buying public can do to rescue the economy with positive sentiment because of:

A - record private sector debt at €400bn
B - we are so open to global events(that car parts factory)
C - Economy is mismanaged (that construction related activity accounting for 23% of GNP in 2006 thing)
D - We cannot really buy Irish as we don't manufacture much(where are the Glen Dimplexes?), maybe a few retailers would be saved where the big population centres are.
E - banks are in trouble due to some of A and bets on Residential/Commercial property here and abroad

So, to add to my post, we are getting crucified on 2 fronts, domestic and international. If we did not have that bubble, we wouldn't be talking much about a domestic problem and can rightly blame Bush

Hence Cowen is only hoping that everyone will shut up so international investors will buy Irish debt, rescue the country from bankruptcy and all will be grand.
Thing is, these investors are not stupid and they are big players and don't have their heads buried in the sand hence they do not believe Cowen.

BlaasForRafa

nesf wrote: »

Well the fact that they haven't run up huge public debt over the past decade makes a return to 80s style misery less likely at least. Though McCreevy's expansion of public spending was real bad thing to do and to an extent Cowen later inherited these levels of public spending which the public now expected since they had gotten used to it! That's where the real **** ups were made, early on in the boom.

Thats true, one good thing the 90's governments did was to reduce the national debt which leaves us at least some leeway for the government to borrow.

Even during the 80's though at least the country had a manufacturing/exports led economy, now that sector will probably shrink greatly and move to eastern europe/china.

And the services jobs (aka call centres basically) are under threat from cost undercutting from India so its difficult to see where jobs are going to come from unless something is done about Irelands lack of competitiveness. We're never going to be able to compete on wage costs any more but the government has got to take the lead on reducing energy costs, red tapes etc so that we have at least some chance of competing.

nesf

gurramok wrote: »

Just to add, you're right in the global sense of the aggregate demand. (you would be right domestically if we manufactured stuff on a large scale with some sense of a demand for that stuff here as well)

Just the other day, a car parts factory is laying off hundreds. Now, we can do nothing about that as they export based on that aggregate demand in international countries.
If that global demand returns with positive sentiment, then maybe some industrialist will replace those jobs with new similar ones. It will have minimal effect here as our cost base is so high.

For Ireland, because of mismanagement, there is nothing much the buying public can do to rescue the economy with positive sentiment because of:

A - record private sector debt at €400bn
B - we are so open to global events(that car parts factory)
C - Economy is mismanaged (that construction related activity accounting for 23% of GNP in 2006 thing)
D - We cannot really buy Irish as we don't manufacture much(where are the Glen Dimplexes?), maybe a few retailers would be saved where the big population centres are.
E - banks are in trouble due to some of A and bets on Residential/Commercial property here and abroad

So, to add to my post, we are getting crucified on 2 fronts, domestic and international. If we did not have that bubble, we wouldn't be talking much about a domestic problem and can rightly blame Bush

Hence Cowen is only hoping that everyone will shut up so international investors will buy Irish debt, rescue the country from bankruptcy and all will be grand.
Thing is, these investors are not stupid and they are big players and don't have their heads buried in the sand hence they do not believe Cowen.

Aggregate demand can be as much for services as manufactured products though and we do have a very large services sector that will be impacted strongly by negative sentiment. I agree completely that international demand is what's going to be necessary for us to pull back up "into the black", but we can make things worse for ourselves with respect to our services sector.

We are very much dependent on the global economy picking up to bring us back up again though, that said we'll (potentially) benefit more from a global upturn than more closed economies like France or Germany etc.

nesf

BlaasForRafa wrote: »

Thats true, one good thing the 90's governments did was to reduce the national debt which leaves us at least some leeway for the government to borrow.

Even during the 80's though at least the country had a manufacturing/exports led economy, now that sector will probably shrink greatly and move to eastern europe/china.

And the services jobs (aka call centres basically) are under threat from cost undercutting from India so its difficult to see where jobs are going to come from unless something is done about Irelands lack of competitiveness. We're never going to be able to compete on wage costs any more but the government has got to take the lead on reducing energy costs, red tapes etc so that we have at least some chance of competing.

I can't remember who said it but someone on Questions and Answers before Christmas summed it up extremely well, the FF approach under Bertie was right one in the 90s but completely the wrong one since 2000.

gurramok

On the topic, we are really been pointed out in Euroland as like the Wild West.
http://www.irishtimes.com/newspaper/world/2009/0120/1232059661794.html?via=mr

The normally restrained financial daily Handelsblatt summed up the worsening situation under the headline “Panic Broadens in Ireland”, while the Frankfurter Allgemeine Zeitung reflected last week on how “Europe’s periphery is now losing the confidence of investors” and how states such as Ireland were finding it more difficult to borrow money.

On Saturday, Le Monde picked up this theme and listed Ireland as one of “black sheep” within the euro zone that are destabilising the currency. Portugal, Greece and Spain also share this dubious distinction from Le Monde , suggesting to its readers that Ireland is now some sort of Mediterranean of the north when it comes to finances.

Sort out the economy Cowen now instead of telling us to shut up, make the hard decisions and lets win back that trust.

nesf

gurramok wrote: »

Sort out the economy Cowen now instead of telling us to shut up, make the hard decisions and lets win back that trust.

Fiscal discipline is the order of the day tbh, and in the last Budget it most certainly not evident.

BlaasForRafa

nesf wrote: »

I can't remember who said it but someone on Questions and Answers before Christmas summed it up extremely well, the FF approach under Bertie was right one in the 90s but completely the wrong one since 2000.

It stems from the Macsharry budget of 1987, I can remember the misery caused by the hospital closures and the swingeing cuts in public spending but things had gone out of control by then. The tallaght strategy allowed the government time to get things under control allied to a reduction in taxation (which was massive) that got people spending.

The devaluation of the punt in 93 is where the boom stems from though, that allied to low wage costs, access to eu markets and low corporation tax made ireland the go-to place for inward investment. Both the rainbow and early bertie governments had prudent budgets which nudged the boom along.

The the loss of interest rate controls to the ECB and the housing boom came into effect around 2001/02 and the government did little to stop the property bubble. Like an earlier poster said people allowed themselves to get saddled with huge mortgage and credit card debt and low savings which means spending our way out of the problem is not really an option.

Also we can't devalue the currency any more to make ourselves more competitive. I'm not arguing for an exit from the euro though, thats probably the one area of stability we've got. I know it would be begging but at this stage some assistance from the richer and more stable euro zone economies would help Ireland out big time.

nesf

BlaasForRafa wrote: »

It stems from the Macsharry budget of 1987, I can remember the misery caused by the hospital closures and the swingeing cuts in public spending but things had gone out of control by then. The tallaght strategy allowed the government time to get things under control allied to a reduction in taxation (which was massive) that got people spending.

The devaluation of the punt in 93 is where the boom stems from though, that allied to low wage costs, access to eu markets and low corporation tax made ireland the go-to place for inward investment. Both the rainbow and early bertie governments had prudent budgets which nudged the boom along.

The the loss of interest rate controls to the ECB and the housing boom came into effect around 2001/02 and the government did little to stop the property bubble. Like an earlier poster said people allowed themselves to get saddled with huge mortgage and credit card debt and low savings which means spending our way out of the problem is not really an option.

Also we can't devalue the currency any more to make ourselves more competitive. I'm not arguing for an exit from the euro though, thats probably the one area of stability we've got. I know it would be begging but at this stage some assistance from the richer and more stable euro zone economies would help Ireland out big time.

The housing boom was there prior to 2001.

Some papers on this period that are worth reading (and available freely to non-academics):

Ó Gráda's paper: http://www.esri.ie/UserFiles/publications/20070724151930/QEC2002Spr_Policy_OGrada.pdf

Barry's summary of the two competing theories on the Celtic Tiger: http://www.nuigalway.ie/staff/alan_ahearne/documents/barry.pdf

Remember both these papers are from a few years back but the insight in there is worth looking at nonetheless.

BlaasForRafa

nesf wrote: »

The housing boom was there prior to 2001.

Some papers on this period that are worth reading (and available freely to non-academics):

Ó Gráda's paper: http://www.esri.ie/UserFiles/publications/20070724151930/QEC2002Spr_Policy_OGrada.pdf

Barry's summary of the two competing theories on the Celtic Tiger: http://www.nuigalway.ie/staff/alan_ahearne/documents/barry.pdf

Remember both these papers are from a few years back but the insight in there is worth looking at nonetheless.

The boom was there sure, but from my memory interest rates went down on the accession to the euro zone and things really rocketed from there.

Thanks for the links though, some good insights there.

nesf

BlaasForRafa wrote: »

The boom was there sure, but from my memory interest rates went down on the accession to the euro zone and things really rocketed from there.

Yup, but the ECB interest rates only aggravated what was already there. There is a false belief floating around the place that our housing boom was caused by low ECB rates which is utterly incorrect.

BlaasForRafa wrote: »

Thanks for the links though, some good insights there.

No problem, it's important that people realise that Celtic Tiger growth rates were a once off and that we can't expect to return to them without falling substantially behind the rest of the world again.

BlaasForRafa

nesf wrote: »

Yup, but the ECB interest rates only aggravated what was already there. There is a false belief floating around the place that our housing boom was caused by low ECB rates which is utterly incorrect.

Indeed there were a number of factors in play and the bubble was already growing.

Now we're stuck with an excess of houses (at least 40k unsold houses on the market), huge personal defts and from an aesthetic point of view...a country covered which crappy looking noddy houses. It seems like architectural taste went in inverse proportion to developer greed.

Svalbard

BlaasForRafa wrote: »

Thats the kind of "ah sure it'll be alright" type attitude thats gotten this economy into the state its in now.

Under FF and Cowens watch (and I did vote for them in 2002 so I don't have a set political "side") they allowed public expenditure to run out of control. now that exchequer returns have collapsed we have a huge budget deficit (estimated at 12.5 billion but could go higher) which will mostly have to be paid by increased borrowing....just at the wrong time when lending is at its tightest.

Income tax returns have fallen, capital gains, vat, stamp duty, corporation tax ...have all fallen through the floor and the money to pay public "servants", hospitals, education and other services has to be found somewhere. Oh and the increased dole queue that was 4.5% at the start of 2008 and was 8% at the end of 2008 (the highest increase ever) is estimated to go up to 12% by the end of the year.

The economy is going to be hit by negative growth this year and quite possibly deflation. Should we just ignore this and blithely saunter on without a care? Ireland got rich for a short while and the country went a bit mad, now the mistakes that the government made in the last 7 or 8 years are coming home to roost.

I don't know if you were around in the 80's but I was growing up then and this country was an utterly miserable place. I don't want the country to go back to that type of era but I have absolutely no confidence that biffo Cowen or Lenihan has a clue of how to avoid it. This seems to be a disaster prone government...theres no guarantee that FG or Labour could do any better but I don't see how they could possibly do worse.

Never for a second did I say our problems were small ones or we should ignore them. I just won't allow myself to become one of the miserable people who see doom and gloom everywhere.

BlaasForRafa

Svalbard wrote: »

Never for a second did I say our problems were small ones or we should ignore them. I just won't allow myself to become one of the miserable people who see doom and gloom everywhere.

Fair enough. Perhaps you could enlighten us as to what rays of hope there are for the economy at the moment?

Svalbard

BlaasForRafa wrote: »

Fair enough. Perhaps you could enlighten us as to what rays of hope there are for the economy at the moment?

In the short term there will need to be drastic cuts in public spending whilst maintaining a high level of investment in transport infrastructure and education. Assuming economic forecasts are true we should return to positive growth in 2010.
As has been spouted over and over, the future of our economy will not lie in manufacturing (obviously) but in developing service and knowledge based industries, home-grown niche industries. A certain amount of foreign and multinational investment is desirable, but should not form a disproportionate part of our economic output.

gurramok

Yes, the celtic tiger pre-2001 sort of justified the housing boom before then as the economy was in pretty good shape along with a housing shortage.

svalbard wrote:

In the short term there will need to be drastic cuts in public spending whilst maintaining a high level of investment in transport infrastructure and education. Assuming economic forecasts are true we should return to positive growth in 2010.
As has been spouted over and over, the future of our economy will not lie in manufacturing (obviously) but in developing service and knowledge based industries, home-grown niche industries. A certain amount of foreign and multinational investment is desirable, but should not form a disproportionate part of our economic output.

Public sector cutbacks will be painful for at least 1-2yrs to depress the economy further, i'd agree there.

I'm intrigued. What are these services and knowledge based industries?

Hope its not the IT sector, i know people who are in competition with India on that front with jobs been lost:)
Financials are ruled out for obvious reasons. You suggesting R&D homegrown?

I'd agree but isn't it a bit late now with our cost base so high?

nesf

Svalbard wrote: »

Assuming economic forecasts are true we should return to positive growth in 2010.

Those forecasts are predicting bad things for 2010 as well now given the events in other countries over the past 3 months. The basis for a 2010 recovery was on the rest of the EU (i.e. our trading partners) not being as hit as hard as it is now clear that they will.

gurramok wrote: »

Yes, the celtic tiger pre-2001 sort of justified the housing boom before then as the economy was in pretty good shape along with a housing shortage.

Exactly.

gurramok wrote: »

I'd agree but isn't it a bit late now with our cost base so high?

Not necessarily, there are industries further up the value chain that aren't as wage sensitive (i.e. industries where wages don't form the a large part of the product cost). Whether we can attract these industries though is a whole other question.

NewDubliner

gurramok wrote: »

I'm intrigued. What are these services and knowledge based industries? Hope its not the IT sector, i know people who are in competition with India on that front with jobs been lost:)

At present India has only encroached on low-end, knowledge-based work. Call centre staff working from scripts, data entry, OCR, transcription, programming to designs and specs provided from outside the country.

The most profitable knowledge-based work results in valuable patents (e.g. new wonder drugs and medical devices) or in innovative, licensable computer software.

Any job that can be codified and scripted (e.g. assembly line, call-centre etc) is ripe for export or outsourcing to low-cost economies.

Not all 'IT jobs' are high-tech.

andrewdeerpark

The reason for the “join the dots” media commentary is the secretive nature of the whole banking issue even though we are over 4 months into the crisis. Have the minutes of any important meeting being published? What about the governments PWC audit report on Anglo Irish Bank, again to sensitive for public digestion!

In this post Bertie Ahern Galway tent developer-backslapping era, we must only assume that big business is calling in their donations that won the last 2 elections for FF.

Brian Cowen for your own political survival you must:

- Distance yourself for Bertie Ahern (his economic miracle legacy is sinking fast like Alan Greenspan in US); quiet difficult considering you were a key member
- Address the nation direct for 10 minutes prime time outlining the issues and your remedy
- Publish all banking details into the public eye regardless of content
- All top bankers to go; cannot understand how Allied Irish Bank’s CEO has not left after the last 2 days with BOI’s.
- Ruin several big developers or Insurance Moguls owing money to Anglo by pursing them through the courts and winding up their personal assets
- Have a cabinet reshuffle and promote young FF blood to the table
- Haggle a public sector pay freeze over 2 years covering all increments and increases in the public sector, freeze public sector pensions for 5 years
- No increases in welfare for anyone next budget; pensioners, dole etc
- No change in tax credits next budget
- Reintroduction of college fees for any household with a combined income of over 100K
- Slash public sector staff in IT & Telecoms, they contract out most of the work (i.e. contractors do the work at ridiculous rates) and are a major source of overstaffing

FF’s other option is to replace Cowen, call an election, leave Labour & FG (which they win) with the mess for about 2-3 years then after they have taken the unpopular decisions FF slides back in to power for another 10 years; as happened after the rainbow government.

Liam Byrne

^ +1, with one addition

Ditch the expensive consultants and talking shops and commissioned reports; we didn't elect them and whatever they're doing is useless anyways because it hasn't worked.

gurramok

I've leeched this from the Pin about the 9 o'clock news:)

http://dynamic.rte.ie/av/230-2477425-320-180.smil [realplayer required]

2 minutes 54 seconds in

Ann Doyle: In the past few minutes a spokesman for the Taoiseach says that people commenting on the banking situation, should take into account the impact of their comments on a vital national interest. He stressed that the measures taken by the government were designed solely to address the question of confidence and stability in the Irish banking system, and, that suggestions they could have other objectives could warrant a loss of confidence in banking institutions which could be immensely damaging.
{long pause} aaand joining me now our economics editor George Lee.

Was this a direct attack on Morgan Kelly? (see other thread where he divulged certain info in the public domain via the Irish Times about Anglo bailout)

I love conspiracies