Brian Lenihan blames euro and Eastern cheap labour for recession

djpbarry

IIMII wrote: »

There was a massive shortage of labour in the Irish economy until May 2004 - post May 2004, we had the opposite problem precisely because we had had so much zoned land and cheap credit. The government knew this and should have regulated migrants from the new EU states.

Or implemented policies to divert resources away from construction.

PopeBuckfastXVI

asdasd wrote: »

bad for hosusing and negative equity.

It depends on your definition of bad, we need the short sharp shock, rather than the long drawn out Japanese style deflation, if we are to bounce back. A sharp return to the long term mean is the way to achieve this, and net emigration certainly helps that.

Sure it sucks to be in negative equity, but nobody had a gun held to their head when they agreed to sign over half their life for some kip in commuterville.

oscarBravo

free to prosper wrote: »

Thanks Scofflaw.
You should notice in my original argument that I did not state there was a causal relationship between the Spanish voting Yes and their high unemplyment rate.

I simply stated one fact after another. They voted Yes, their umemployment rate is currently 18 per cent. Nothing more.

I'm reminded of Jon Stewart's take on Fox News employing that sort of editorialising: "I'm not saying your mother is a whore... I'm just wondering where she gets her money from. I'm just saying, is all."

IIMII

PopeBuckfastXVI wrote: »

Migration had a tiny net effect, in my opinion.

Greed, availability of credit, low taxation, wage inflation, 'new paradigm' thinking, 'new paradigm' banking products, location location location, grand designs, the sunday independent, i'm an adult get me out of here, sherry fitzgerald, BoI, AIB, Anglo, Bertie Ahern, The FF Tent, Developer developers developers developers, the ladder, mammy and daddy, jealousy, spousal pressure, the neighbours getting rich, capital appreciation, skinny latté's, bmw, mercedes, range rover, well appointed desirable living, how much is your house worth?, tax breaks, get rich quick, portfolios, canny, savvy, bulgaria, spain, 'ryanair will be flying there soon', michelin stars, a piece of the pie.

All of the above contributed to the bubble, which was inevitably followed by the boom. We were oversupplied and overvalued way before the migrants came, and we will be for a long time after they leave.

You said it yourself, they justified the rise in prices due to 'demographics' and 'immigration', but it didn't save their asses, it never could, because it wasn't capable of having that much of an affect.

Sure immigration was part of the crazy mix, but to blame it for the bubble, and the inevitable crash is just wrong.

The cheap credit had a much bigger impact for sure, but then it was the Irish government, and the Irish people that decided what should be done with that credit.

I am talking about oversupply of housing, not the overpricing. Yes, houses were over valued. But we also built too many, and now many of our construction workers are facing emigration themselves because there is no work for them

djpbarry

free to prosper wrote: »

As I said earlier, it is a constant Yes side argument, if we vote Yes to lisbon, our economy will be great again.
I don't see any proof of that statement, do you?

I haven't even seen the statement, never mind the proof of it.

Scofflaw

free to prosper wrote: »

Thanks Scofflaw.
You should notice in my original argument that I did not state there was a causal relationship between the Spanish voting Yes and their high unemplyment rate.

I simply stated one fact after another. They voted Yes, their umemployment rate is currently 18 per cent. Nothing more.

Ah, so you did pick it up somewhere and never examine it. Thought so. It's really not possible to claim that one is just "stating one fact after another" when one has accompanied those statements with observations like "hardly an advertisement for voting Yes".

If you make an argument like this - and you have made the argument - and it is shown to be entirely baseless, there's more credibility to be gained from accepting that fact and moving on than in trying to either worm or dig your way out of it. You don't have to take that advice, but it's honestly meant, and I try to apply it myself.

free to prosper wrote: »

As I said earlier, it is a constant Yes side argument, if we vote Yes to lisbon, our economy will be great again.
I don't see any proof of that statement, do you?
regards

I don't see anyone making the claim, if it comes to it. The Yes claim is that another No vote will damage the economy further, which I think is perfectly likely. Who exactly is claiming that a Yes vote will magically sort out all our problems?

cordially,
Scofflaw

PopeBuckfastXVI

IIMII wrote: »

I am talking about oversupply of housing, not the overpricing. Yes, houses were over valued. But we also built too many, and now many of our construction workers are facing emigration themselves because there is no work for them

We built too many because the greedy developers (professional and amateur) believed their own crap about prices only ever going up, and soft landings.

Those construction workers better hope to god they get a better reception in whatever country they land up in, than some posters on this site are willing to afford our own immigrants.

asdasd

Those construction workers better hope to god they get a better reception in whatever country they land up in, than some posters on this site are willing to afford our own immigrants.

A few complaints on a website about the levels of immigration, but not anything specifically about the immigrants, is hardly a real bad reception.

BTW there were demonstrations in Poland recently against Ukrainian immigrants.

What gets in my craw about immigrationists ( to coin a phrase for the lover of immigration) is that they dont really give us a figure where they would cull immigration, (and that is where the debate should lie) and they tend to expect universal support for a policy which - as a previous poster said - reduces wage inflation.

It didn't reduce inflation though, just wage inflation. And in certain sectors.

It is lunacy to expect people will support a policy that makes them poorer, when the people promoting the policy are not getting any poorer.

djpbarry

IIMII wrote: »

But we also built too many, and now many of our construction workers are facing emigration themselves because there is no work for them

That hardly makes Irish construction workers unique. I would have thought builders would be among the more mobile elements of the workforce; it goes with the turf, surely? There's only so many things you can build in one place.

free to prosper

djpbarry wrote: »

I haven't even seen the statement, never mind the proof of it.

Here's one from GenYes
Vote yes gives -

Our best chance for an economic recovery: Ireland can’t fight global economic forces on its own, in this financial storm the EU is Ireland’s safe harbour

.

http://www.generationyes.ie/why-vote-yes/

Quite the contrary - voting no retains more power with Irish people over the Irish economy.

What Ireland needs is hand on levers of economic control -

IIMII

PopeBuckfastXVI wrote: »

We built too many because the greedy developers (professional and amateur) believed their own crap about prices only ever going up, and soft landings.

Those construction workers better hope to god they get a better reception in whatever country they land up in, than some posters on this site are willing to afford our own immigrants.

Or find another bunch of eejits running another country that will zone half the country, facilitate cheap credit and invite us in to build 10 years worth of housing in a year or too.

The only problem with you putting the boot into us, is that if in percentage terms the Irish population of 5m were to supply the Polish population of 40m with the same number of builders as were here from 2004 onwards, every man, woman and child on this island would have to relocate as constuction workers to Poland.

Our population levels became unstable over the last five years, and fueled a construction market on afterburner. Pointing out that is not unwelcoming or rascist - it's fact.

PopeBuckfastXVI

IIMII wrote: »

Or find another bunch of eejits running another country that will zone half the country, facilitate cheap credit and invite us in to build 10 years worth of housing in a year or too.

The only problem with you putting the boot into us, is that if in percentage terms the Irish population of 5m were to supply the Polish population of 40m with the same number of builders as were here from 2004 onwards, every man, woman and child on this island would have to relocate as constuction workers to Poland.

Our population levels became unstable over the last five years, and fueled a construction market on afterburner. Pointing out that is not unwelcoming or rascist - it's fact.

It was also neither a cause of the bubble which preceded immigration, nor bust, which was inevitable once it finished. If anything the moderating force of immigration on wage demands will help us recover faster, along with the fact that they are a safety valve on unemployment.

What if all our construction workers moved to Malta, what would be your percentages then? Malta are also in the EU and are fully open to Irish migrants relocating there.

Should I buy property in Malta now because there's bound to be an immigration caused bubble and bust?

djpbarry

free to prosper wrote: »

Here's one from GenYes
Vote yes gives -

Our best chance for an economic recovery: Ireland can’t fight global economic forces on its own, in this financial storm the EU is Ireland’s safe harbour

I’ve highlighted the important part of that statement; not quite the same as “if we vote Yes to lisbon, our economy will be great again.”

asdasd

If anything the moderating force of immigration on wage demands will help us recover faster, along with the fact that they are a safety valve on unemployment.

ah you boys love the chape labour.

Scofflaw

free to prosper wrote: »

Here's one from GenYes
Vote yes gives -

Our best chance for an economic recovery: Ireland can’t fight global economic forces on its own, in this financial storm the EU is Ireland’s safe harbour

http://www.generationyes.ie/why-vote-yes/

Quite the contrary - voting no retains more power with Irish people over the Irish economy.

What Ireland needs is hand on levers of economic control -

That's not the argument you're claiming, though. I wouldn't have any difficulty agreeing that the EU is a large part of what's keeping us afloat at the moment, and that without them we'd be a lot more screwed - and that's a widespread view that you can find in The Economist and relatively neutral sources.

Also, judging by the performance of our government over the last decade, the last thing Ireland needs is for them to have their hands on the "levers of economic control".

cordially,
Scofflaw

IIMII

PopeBuckfastXVI wrote: »

It was also neither a cause of the bubble which preceded immigration, nor bust, which was inevitable once it finished. If anything the moderating force of immigration on wage demands will help us recover faster, along with the fact that they are a safety valve on unemployment.

What if all our construction workers moved to Malta, what would be your percentages then? Malta are also in the EU and are fully open to Irish migrants relocating there.

Should I buy property in Malta now because there's bound to be an immigration caused bubble and bust?

Yea. Did I not say that mass immigration linked to the construction market acted as an accelarant? The scene was set with bad planning and cheap credit - the tidal wave of immigration brought our problems to a new level. If Malta wants to do what we did, grand. It might keep our builders busy for a few years until they can return here to their families when the prospect of some construction work in Ireland returns

asdasd

If anything the moderating force of immigration on wage demands will help us recover faster, along with the fact that they are a safety valve on unemployment.

we are talking about whether the euro was cause as well as immigration. I think we would be better off with real wage reductions, across the board, like with a currency devaluation. Like t'UK, where everybody has taken it on the chin - in Euro terms.

The moderationg in wages you are talking about had no effect on the protected sectors here.

PopeBuckfastXVI

asdasd wrote: »

ah you boys love the chape labour.

Not cheap, competitive. If internal costs are low (housing, food etc.) then you can have competitive labour, while maintaining living standards.

briktop

you see Brian and Brian , if only you had been able to run the country as you saw fit ...

oh wait ......

PopeBuckfastXVI

asdasd wrote: »

The moderationg in wages you are talking about had no effect on the protected sectors here.

It should do, especially in the public sector, the cost of which is borne by the private sector, who are very much experiencing wage deflation.

asdasd

If internal costs are low (housing, food etc.) then you can have competitive labour, while maintaining living standards.

Lets devalue!!!


oh, wait

PopeBuckfastXVI

asdasd wrote: »

Lets devalue!!!


oh, wait

Indeed, not a magic bullet, but certainly would have been an option were we not in the Euro.

oscarBravo

free to prosper wrote: »

What Ireland needs is hand on levers of economic control -

- like Iceland.

briktop

so , is Brian " legal man " lenihan saying the EU killed our country
and wants us to vote yes to lisbon ?

is that the gist of it ?

good man , its a NO so .

K-9

P. Breathnach wrote: »

Cheap money made that possible; it did not make it inevitable. A different taxation and regulatory package could have lessened, perhaps even overcome, the effect of cheap money.

Definitely. Mortgage Interest Relief on €20,000 a year Interest is madness. The Govt. was warned about policies like this but ignored them, even by the ECB etc.

IIMII wrote: »

Massive zoning was the gunpowder, construction-related immigration was the match. The economy then went boom, and we wonder why?

Yes, we had full employment so immigration was needed.

free to prosper wrote: »

Irish Ferry workers have been hammered!

Since May 2004 , half a million immigrants from new EU accession states have come to work in Ireland.

According to the CSO figures 90 per cent of new jobs in 2007 went to non-Irish nationals.

The latest Welfare figures show 29,000 PPS number have been given to non-Irish nationals in Ireland since the start of 2009.

Yet in the last year, over 100,000 people in Leinster alone have lost their jobs.

That's what I call hammered.

Immigrants are losing jobs at a higher rate than Irish people, probably because of construction.

free to prosper wrote: »

Thanks Solice,

Spain voted yes to the Lisbon Treaty and its unemployment rate has increased to 18 per cent.

Not a great advertisement for voting yes.

Better I think to vote No to Lisbon and keep as much democratic control of our countries future are possible.

Actually Spain is a good example. They had the same property boom and crash too. Again internal policies, not the EU.

IIMII wrote: »

Put simply, it was bad enough that so much planning permission was given out for residential development and that there was so much cheap credit at that particular point. But even with zoning and cheap credit, the tidal wave of (transient) construction related immigration has left us high and dry on the beach. If hadn't been able to spew out so many new homes over the past 5 years, house-building would have been more moderate, and construction work that might have kept x amount of Irish construction workers busy for ten years, would not have been burnt up in a fraction of that time by multiply our construction workforce so recklessly for that period.

No, many of those migrants are off again, and we have feck all work for our own construction workers for God knows how many more years. We didn't become multicultural from 2004 to '09 - we imported consumers and construction workers. No the construction is gone, so too are those consumers, leaving many without a pot to piss in.

From the point of view of economic stability, what we did from 2004 was suicidal

It was but I don't know, getting back to the OP, how this is the ECB's fault. We have even lower interest rates now and it seems to matter sweet FA! The common denominator seems to be the banks, not low interest rates.

free to prosper

K-9 wrote: »

It was but I don't know, getting back to the OP, how this is the ECB's fault. We have even lower interest rates now and it seems to matter sweet FA! The common denominator seems to be the banks, not low interest rates.

Loss of control of interest rates is a huge loss of economic control.
It is a major factor, probably the biggest factor in an economy.

The euro means we no longer control interest rates, nor can we devalue our currency. This is a not a good situation.

While the IMF report suggested that access to ECB financing has been an important source of liquidity for the banking sector, it also pointed out that Ireland’s Euro currency membership meant ‘since the possibility of adjusting through the depreciation of its own exchange rate is not available, further wage reductions will be required to restore competitiveness and growth prospects.’

free to prosper

I welcome Lenihan's honesty in this matter.
It is important to speak the truth.

The EUro and mass immigration led to overheating - fact.
The boom led to bust - fact.
We must learn from our mistakes and find a way out - fact

The same people who currently tell us to vote Yes to Lisbon,
are virtually the same people who told us to vote for
Maastricht - and gave us the crippling euro
and Nice - which gave us mass immigration from Eastern Europe.

These 'Yes Men' are abject liars.

They cannot be believed.

Quotes on East European immigration.

" There is no reason to believe...... that large numbers of workers will
wish to come"
[ Dick Roche I.T. Letters 12/7/2002 ]

"Mr. XXXX also repeats the line propagated by the No to Nice campaign that
only four countries are to permit immigration after enlargement. This
statement grossly misrepresents the position of the other member states."
[ Dick Roche I.T. Letters Aug/Sept. 2002. ]

" Ireland will be in precisely the same position as all other member states
on the question of free movement following any enlargement of the
Community."
[ Dick Roche - as reported in I.T. xx/09/2002

" It is the view of the Irish government and a number of other governments
that this idea that there is going to be a huge influx of immigrants is just
not supported. The evidence is just not there for it. They are not going to
flood to the west. The same rules are going to apply in all 15 states. There
is no evidence to suggest that the people of the Czech Republic or Poland
are less anxious to stay in their home as (sic) we are.
[ Dick Roche transcript of interview with The Irish Catholic, Govt.
Buildings 19/9/2002. ]

" It is a deliberate misrepresentation to suggest that tens of thousands
will suddenly descend en masse on Ireland." [ P. De Rossa I.T. Letters
20/8/2002 ]

" The expected trickle of immigration to Ireland will on balance benefit the
Irish economy."
[ P. De Rossa I.T. Letters 20/8/2002

" I estimate that fewer than 2,000 [ two thousand] will choose our distant
shores each year."
[ P. De Rossa I.T. Letters 20/8/2002 ]

" There is no evidence there would be a problem with free movement of
workers on accession." [ Bertie Ahern Dail Eireann 10/9/2002 ]

"Efforts have been made to foment fears that migrants from the new member
states could flock to Ireland. This is not only unpleasant but plainly
wrong."
[ Brian Cowan Sunday Business Post 7/7/2002 ]

" Ireland is already benefiting from the skills and energy of workers from
the applicant states, about 7,000 [ seven thousand] of whom received work
permits last year. There is no basis whatever for expecting a huge upsurge
in these numbers."
[ Brian Cowan Sunday Business Post 7/7/2002 ]

" The second myth is that the Nice Treaty will mean mass immigration from
the new EU member countries in Eastern Europe. This is probably the most
odious of the myths propagated by some in the "No" campaign."
[ Willie O'Dea Sunday Independent Summer 2002]

K-9

free to prosper wrote: »

Loss of control of interest rates is a huge loss of economic control.
It is a major factor, probably the biggest factor in an economy.

The euro means we no longer control interest rates, nor can we devalue our currency. This is a not a good situation.

They are important but we now have lower interest rates than we had during the bubble years. The common denominator is banks lending policies. They ignored all warnings about affordability ratios etc. during the bubble and are now putting extremely onerous conditions on lending.

Devaluing isn't as important as it was when we entered the EU. Britain isn't as big a factor anymore as it was.

Scofflaw

briktop wrote: »

so , is Brian " legal man " lenihan saying the EU killed our country
and wants us to vote yes to lisbon ?

is that the gist of it ?

good man , its a NO so .

It's more that he's saying "we didn't kill the country, please blame the EU instead". It seems to be selling surprisingly well...of course, it also worked for the Water Framework Directive.

cordially,
Scofflaw

Spiritoftheseventies

Put simply production costs too high, houses were over inflated, wages spiraled. Simple economics