Statism fails again: "Cash-strapped councils may send us back to dark ages"

Scofflaw

donegalfella wrote: »

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This bit:

Investors in a truly free market would respond to actual demand, not to government incentives. No free-market investor would sink millions into a hotel in the middle of nowhere that has prospects of attracting only an intermittent trickle of guests—but he might well do so if a corporatist government made it worth his while.

That seems to me to say that the problem that led to zombie hotels was the offer of tax breaks from "a corporatist government". Now unless you just happened to mention the corporatism of the Irish government by accident, then it seems to me you're mixing up the nature of the government with the specific actions of Fianna Fáil, the, er, "builder's party".

For what it's worth, I agree with you that the zombie hotels are the result of inappropriately targeted tax policy - where we differ is that I see that as an inappropriately targeted tax policy, whereas you see it as an example of the inappropriateness of targeting tax policy, or possibly tax policy full stop.

Also, I would say that the building of ghost estates rather than hotels was a completely correct response to the market - people were buying houses in the middle of nowhere. Indeed, they were queuing up to buy them, and to hand over vastly inflated sums to do so, so the building of housing estates all over the country was an example of a problem caused by an unregulated market.

regards,
Scofflaw

Scofflaw

ejmaztec wrote: »

I wouldn't trust any of them to hold back on the spending, or even attempt to strive for efficiency. The local authorities seem to be local clubs for jolly old pals, with unhindered access to an endless supply of funds.

A strong argument for raising taxes locally to spend locally - that way Mayo CoCo isn't squandering my money. No taxation without representation!

cordially,
Scofflaw

jimmycrackcorm

Cool Mo D wrote: »

What needs to happen is that local government should be responsible for raising and spending money independent central government. Therefore, if you're local government makes a mess of it, you get burned. After a few scandals, I believe that people will start to pay a lot more attention to who exactly gets into power in county hall.

So Dublin gets fabulous infrastructure while the rest of the country gets more potholes.

Permabear

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SlabMurphy

donegalfella wrote: »

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Ok I'll call it Fianna Failism.

Hotels were built all over the place because the government supplied tax breaks to incentivize the building of hotels all over the place. Between 1998 and 2008, the number of hotel rooms in Ireland increased twice as quickly as the number of tourists. Now, the country is full of zombie hotels, all begging people to come stay there on "cheap weekend breaks." But anyone can see that genuine market demand for these hotels never existed. Same thing with the many vacant houses around the country.

Investors in a truly free market would respond to actual demand, not to government incentives. No free-market investor would sink millions into a hotel in the middle of nowhere that has prospects of attracting only an intermittent trickle of guests—but he might well do so if a corporatist government made it worth his while.

" Hotels were built all over the place because the government supplied tax breaks " The govt. could have supplied all the tax breaks in the world but without Seanie and Fingers and co. throwing out money due to no regulation enforced, the zombie hotels would never have built.

BluePlanet

I'd also add that regarding: "encouraging people through a fake sense of prosperity to "get on the property ladder" on the demand side"

That's just plain ol' Marketing my friend.

Sure i though capitalists loved that sort of thing.

Permabear

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Permabear

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ejmaztec

Scofflaw wrote: »

A strong argument for raising taxes locally to spend locally - that way Mayo CoCo isn't squandering my money. No taxation without representation!

cordially,
Scofflaw

That's all very well, until some local authorities get a little carried away, and the Scofflaw has to pay more tax to bail them out.:(

Scofflaw

ejmaztec wrote: »

That's all very well, until some local authorities get a little carried away, and the Scofflaw has to pay more tax to bail them out.:(

Since they would be my local council, they could expect to be punished at the ballot box for it. If you're suggesting a situation where my elected local council had overspent - well, whose fault would that be?

cordially,
Scofflaw

Scofflaw

jimmycrackcorm wrote: »

What needs to happen is that local government should be responsible for raising and spending money independent central government. Therefore, if you're local government makes a mess of it, you get burned. After a few scandals, I believe that people will start to pay a lot more attention to who exactly gets into power in county hall.

So Dublin gets fabulous infrastructure while the rest of the country gets more potholes.

That's the essential problem with raising and spending locally - and it tends to be self-reinforcing too, as people and businesses move away from the areas with poor services to the areas with better services. It's the reason for the transfer of funds from the well-off areas to the poorer areas, at county, national, and European level.

Without such transfers, if you're born in a poor area, then you have bad services, under-resourced schools, under-resourced hospitals, higher infant mortality, and much reduced chance of a job unless you emigrate. Luck of the draw, eh?

cordially,
Scofflaw

Scofflaw

donegalfella wrote: »

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I know you think you do, but what you're objecting to there is clientilism, not corporatism. Indeed, what you're really objecting to is the favouring of particular special interests who are, in turn, supporters of the hand that feeds them - something that happens under every system of politics ever tried by mankind.

donegalfella wrote: »

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Or perhaps we never really hear about the ones that work. Perhaps we should assemble a list of all government tax policy initiatives ever used, and see just how many of them achieved their desired outcomes? Would the majority of them really have unintended consequences that outweighed their intended and realised benefits, I wonder...? I doubt you know, but I equally doubt you feel you need to - belief is a great substitute for knowledge, for the believer anyway.

donegalfella wrote: »

And this had nothing whatsoever to do with government policies that fuelled property development on the supply side, while encouraging people through a fake sense of prosperity to "get on the property ladder" on the demand side? By negotiating generous wage agreements with the so-called "social partners," introducing a high minimum wage that in turn pushed up other wage levels, lowering income tax, making up the deficiencies with a asset-related tax bubble, boosting public-sector employment by 85,000 people, and encouraging a seemingly self-perpetuating reliance on the construction industry, the government led people to believe that they would enjoy far higher levels of disposable income over the longer term than the economy could realistically sustain. People borrowed and banks lent on the basis of those false levels of disposable income—even though a house is not a short-term investment.

In short, I honestly don't know how you can look at Ireland from 1998-2008 and claim that the housing bubble was not largely engineered by misguided government policy.

Can I honestly say that in the absence of any government interference whatsoever we would still have had a property bubble? Why, yes, I can. Bubbles have happened in every age, with and without government interference - they're pretty characteristic of any economy that becomes suddenly prosperous, because people start looking for somewhere to invest the surplus money. If enough people choose the same investment vehicle, be it property, shares, or tulips, then a bubble starts, because each person who rationally chooses to invest their money in the fastest-appreciating asset on the market becomes part of the problem, and it becomes entirely rational for lending institutions to extend credit to those who wish to buy such assets. Without intervention, bubbles will naturally inflate through entirely rational responses to market conditions.

The Irish government certainly encouraged the bubble in a grossly irresponsible way, but they didn't create it - people did that themselves. Indeed, Irish people were off buying properties that would never benefit from Irish tax breaks, in Spain, Bulgaria, China - wherever there was a decent chance of being able to sell on to fellow Irish bubble investors.

So, once again, it seems to me that you're looking at what we all agree to be bad aspects of government, and coming to the conclusion that government itself is therefore bad - even though other countries manage to run corporatist governments that aren't clientilist. There's not even any particular link between corporatism and clientilism, except for the fact that they look superficially similar - which may be what's confusing you.

regards,
Scofflaw

Euro_Kraut

donegalfella wrote: »

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I see. Its seems private road associations look after the very minor roads (often in Swedens extensive forests).

By traffic volume these roads account for just 4% of all traffic. To be a private road is generally must have less than 50 vehicles a day passing through it. In Ireland 'botharíns' would fall into this category.

It worth pointing out that while local do pay some of the cost and often carry out the maintenance work, the PRA do get get funding from central government (USD $70million in 1999).

I would have no great difficulty in local communities paying more for the upkeep of minor roads in the area and taking responsibility for them.

Permabear

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Laminations

Euro_Kraut wrote: »

I see. Its seems private road associations look after the very minor roads (often in Swedens extensive forests).

By traffic volume these roads account for just 4% of all traffic. To be a private road is generally must have less than 50 vehicles a day passing through it. In Ireland 'botharíns' would fall into this category.

It worth pointing out that while local do pay some of the cost and often carry out the maintenance work, the PRA do get get funding from central government (USD $70million in 1999).

I would have no great difficulty in local communities paying more for the upkeep of minor roads in the area and taking responsibility for them.

Neither would I but DF is using this example of publically subsidised minor pruvatisations as proof that an entire road network and indeed all infrastructure would fare better in private hands. I suppose you can't argue with his beliefs

Scofflaw

donegalfella wrote: »

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Your contention is that the majority of government tax policies work out badly - I assumed you were basing that on some kind of facts, and would therefore have access to those facts. Was I wrong? Is this just something you feel to be true?

donegalfella wrote: »

Can you give some examples, please, of bubbles that have happened without government interference?

The Tulip Bubble would be the most famous, and the most obviously free of the hand of government. The South Sea Company bubble was a speculative bubble driven only by market mechanisms (in other words, there was no advantage to the stock but the appreciation in its price), but I suspect you'd say that because it was a government-granted monopoly it was the government's fault. The Mississippi Company bubble was another speculative bubble driven only by the piling in of investors to what looked like a hot investment, as were most of the other bubbles all the way to the Dot Com Bubble.

You don't need anything more than floating liquidity to generate a bubble - it's pretty much a mathematical outcome of multiple independent rational investment decisions. Even the day to day fluctuation of stock markets is fundamentally a bubbly effect, since what drives price is often nothing more than price, as per Mandelbrot.

donegalfella wrote: »

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Again, a rise in wages was happening before benchmarking (I know, because I was running a company at the time), which, again, is a perfectly predictable outcome of economic growth in a restricted labour market - that's what benchmarking followed on from, and the rise in welfare and the minimum wage. It's almost certainly why the government opened our labour market to the new accession countries immediately.

It's undeniable that the government could have taken steps to cool things down, and didn't - but in both the labour market and the housing market that's not the same thing as creating it.

The Irish economy, 5 years into the Celtic Tiger period of growth, was hitting the bumpers - there was virtually full employment, which necessarily meant that wages rose, and had been rising as we achieved full employment. The rise in wages in turn produced greater disposable wealth, and that in turn created increased demand for property, because every Irish person prefers to own their own house rather than be at the mercy of an Irish landlord. The mantra of the property bubble wasn't "there's a tax break in it", though - it was "rent is dead money", same as it's been for years.

donegalfella wrote: »

You are representing the "optimistic statist" position, which suggests that if only we had a good government implementing the right policies, all would be well in the world. Your position has a long and noble history, going all the way back to Plato's Republic. The fact that powerful governments have been wreaking havoc in the world ever since clearly has not thwarted the hopes that statism can somehow, one day, make good.

My far more realistic position is that government policy generally ranges from the merely wrong-headed to the outright tyrannical. To hold out the possibility that governments might occasionally do something right is no justification whatsoever for the level of intervention and control that governments exercise over our incomes, our economy, and our daily lives.

"Far more realistic position"! One that somehow requires you, time after time, to distort or ignore reality and logic in order to bolster it? It's not a realistic position at all - it's an almost farcically fatuous and blinkered belief, as you repeatedly demonstrate.

regards,
Scofflaw

Laminations

I'm actually coming round to the idea that statism has failed. Look at the failings of totalitarian /authoritarian statism- terrible, unwirkable stuff. Even looking at moderate and centrist or even liberal government I see problems, I see weaknesses - there are many examples of bad governance so therefore I conclude government is bad. Now you can argue that that is a logical fallacy but I'll ignore you. And anyway I have a better way, a way to solve all the worlds problems!

Magic mind beans!

Now I know I don't have any proof of their existence (there is no consistent working example of magic mind beans) but remember I DO have proof of bad governance. And I know that people producing magic beans with their mind flies in the face of human behaviour and psychology but let's ignore that. If I believe in a world like this, it'll happen- it's sort of a field of dreams ideology. so I realise that my magic mind beans ideology is completely untested but I think it's so cerebral that it justifies dismantaling government and hoping for the best. Now I won't hear one bad word said about magic mind beans and I won't concede any good aspects of government.

come and join me one and all on my magic mind beans train of crazy! And if this is not your sort of crazy you can always try libertarianism

Scofflaw

Laminations wrote: »

I'm actually coming round to the idea that statism has failed. Look at the failings of totalitarian /authoritarian statism- terrible, unwirkable stuff. Even looking at moderate and centrist or even liberal government I see problems, I see weaknesses - there are many examples of bad governance so therefore I conclude government is bad. Now you can argue that that is a logical fallacy but I'll ignore you. And anyway I have a better way, a way to solve all the worlds problems!

Magic mind beans!

Now I know I don't have any proof of their existence (there is no consistent working example of magic mind beans) but remember I DO have proof of bad governance. And I know that people producing magic beans with their mind flies in the face of human behaviour and psychology but let's ignore that. If I believe in a world like this, it'll happen- it's sort of a field of dreams ideology. so I realise that my magic mind beans ideology is completely untested but I think it's so cerebral that it justifies dismantaling government and hoping for the best. Now I won't hear one bad word said about magic mind beans and I won't concede any good aspects of government.

come and join me one and all on my magic mind beans train of crazy! And if this is not your sort of crazy you can always try libertarianism

Perhaps we need to update that Winston Churchill quote?

If a man is not a socialist at twenty, he lacks a heart - if he is still a socialist at thirty, he lacks a brain. If he lacks both, he'll be a lifelong libertarian.

cordially,
Scofflaw

P. Breathnach

Scofflaw wrote: »

Perhaps we need to update that Winston Churchill quote?

If a man is not a socialist at twenty, he lacks a heart - if he is still a socialist at thirty, he lacks a brain. If he lacks both, he'll be a lifelong libertarian.

Are you mocking libertarianism? That's unkind.

Scofflaw

P. Breathnach wrote: »

Are you mocking libertarianism? That's unkind.

I am unable to resist mocking ideology and ideologues. Regrettably, it's an extremely time-hungry character flaw.

cordially,
Scofflaw

Laminations

Libertarianism involves a fictional universe in which liberty is their MacGuffin.

Oh what I wouldn't do for a bit more liberty.
would you sacrifice government for a bit more liberty?
would you accept injustice for a bit more liberty?
would you enslave generations to poverty?
would you tolerate sexual harrassment and other forms of exploitation?

No?

then you are not a libertarian

caseyann

Make the criminals do the work for free

Permabear

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sceptre

Right, I'm calling time on both of these "statism" threads. Mostly because there's hotheadedness going on here that I don't particularly like with my moderator hat on. Fault on both sides and I'm locking this before I just ban about four of you to make my life easier.

Public bit: terms like "statism" aren't well defined as people disagree on what it means. Additionally it's one of those trigger words like "trots" or "teabaggers" that's often thrown to make an insulting point. Start with that sword (at least it'll be perceived by some to be so) in discussion and there will be blood as people assume there will. Just a seed for thought.

Private bit: by PM to relevant parties / the guilty when I have time to write it.

Enough, for those with hot heads, find a cold shower. Yes, I'm aware that locking this leaves no-one happy. I can live with that.

/mod