Ireland's Taoiseach Bertie Ahern rejects ESRI Economic Advice, March 2000

hairybowsie

https://www.youtube.com/watch?v=THWbrFy5NWM

pebbles21

http://www.youtube.com/watch?v=a37sRjkLtWw

Amhran Nua

"A sign of our economic manhood". How did these people ever get elected. It reads like a prophecy now though.

gcgirl

Sure I've been saying since they got elected(1997) what the would do to the country and every thing has happened.

westtip

everyone shoudl watch that piece you have bought to our attention in the OP well done for reminding us all that some of us

DID SEE IT COMING A LONG TIME AGO!

Macha

And as far as I can tell from looking through Oireachtas debates on the issue, two FG back benchers raised the issue of the report but one merely requested a statement from the Minister for Finance and the other pressed only slightly harder.

So it's clear that the opposition wasn't exactly ringing any alarm bells on the economy at the time either, which, while it doesn't excuse FF for the damage that has been done, does put in perspective the howls of rage from the opposition.

thebman

Macha wrote: »

And as far as I can tell from looking through Oireachtas debates on the issue, two FG back benchers raised the issue of the report but one merely requested a statement from the Minister for Finance and the other pressed only slightly harder.

So it's clear that the opposition wasn't exactly ringing any alarm bells on the economy at the time either, which, while it doesn't excuse FF for the damage that has been done, does put in perspective the howls of rage from the opposition.

Well what were they supposed to do other than bring it up and question him on it?

They weren't in government but opposition.

Macha

thebman wrote: »

Well what were they supposed to do other than bring it up and question him on it?

They weren't in government but opposition.

If they were seriously concerned, they would have gotten the FG and Labour spokespeople on Finance to ask the questions or even the leaders. To delegate it to others is a sign they didn't consider it important. Labour didn't ask any questions on it at all.

My point is that the idea that Labour or FG would have pulled back on the economy if they had been in power is not supported by much evidence that I can see. I don't blame them - it would have been political suicide.

Nolanger

Irish politicians don't listen to people smarter than themselves and never will.

Macha

The fact that the ESRI is a state-funded body also makes this episode a bit more painful. What exactly were they paying them for?

ART6

westtip wrote: »

everyone shoudl watch that piece you have bought to our attention in the OP well done for reminding us all that some of us

DID SEE IT COMING A LONG TIME AGO!

I don't pretend to know anything much about economics, but I recall that something like five or six years ago my son and daughter in law were considering trying to get a mortgage before house prices became unaffordable. I said that this isn't going to continue, and sooner or later there will be an implosion just like there was in the UK in the early nineties. Fortunately they didn't follow through with their plans.

Still, what would I know? I don't have the intellect of Bertie and Brian. But I suppose I don't have their vested interests either:mad:

later12

ART6 wrote: »

I don't pretend to know anything much about economics, but I recall that something like five or six years ago my son and daughter in law were considering trying to get a mortgage before house prices became unaffordable. I said that this isn't going to continue, and sooner or later there will be an implosion just like there was in the UK in the early nineties. Fortunately they didn't follow through with their plans.

Still, what would I know? I don't have the intellect of Bertie and Brian. But I suppose I don't have their vested interests either:mad:

Exactly, this is something we always tend to forget. It wasn't just David mcWilliams and George Lee warning about the property bubble (incidentally, the former talked more about Breakfast Roll Man than the impending doom, that much is also ignored), but everyone knew we were in a bubble. Like I said before I was a teenager and it was a class discussion on more than one occasion, so you can be pretty sure most people would have known about it if even a team of 13 year old spotty faced kids did.

I can't remember who it was, Brian Cowen or Bertie Ahern who once said of the construction boom economy "we thought the demand would always be there, we were wrong". How stupid do you have to be to have such an ill informed and reckless belief when it pertains to such a finite market like that of housing. This island is a small island in the North Atlantic - you cannot have an infinite housing boom. Jesus Christ!

Macha

Were the opposition warning? Nope.

As I said, it doesn't detract from the responsibility of the government but it's a point that a lot of people are missing these days.

later12

Macha wrote: »

Were the opposition warning? Nope.

As I said, it doesn't detract from the responsibility of the government but it's a point that a lot of people are missing these days.

I take your point and largely i do agree with you. However the opposition did not, and still do not, have access to all of the information on the domestic finances that is in Merrion Street.

We saw recently what a change this can make to the opposition's approach to fiscal policy when they were invited into the department with their delegates to look over the books. Even the fact that they were invited in itself underscores the difference between the information available to the Government and that which is available to the public via Department of Finance publications.

Don't forget that the account breakdowns that are available to you and me online are usually the same as what the opposition must work with.

southsiderosie

later10 wrote: »

I take your point and largely i do agree with you. However the opposition did not, and still do not, have access to all of the information on the domestic finances that is in Merrion Street.

We saw recently what a change this can make to the opposition's approach to fiscal policy when they were invited into the department with their delegates to look over the books. Even the fact that they were invited in itself underscores the difference between the information available to the Government and that which is available to the public via Department of Finance publications.

Don't forget that the account breakdowns that are available to you and me online are usually the same as what the opposition must work with.

The information from the ESRI is publicly available.

The information on budget projections is publicly available.

The reason why looking at the books is significant is because the government has been funding the numbers for years. The ECB called them out on it a few years ago. Now that they have to account for the bank debt, they are really and truly screwed.

There is no reason other than politics or mass collective hysteria why any normal person, not to mention politician could not have seen that Ireland's economy was overheated and heading for a cliff, especially by 2006.

Macha

That point would hold true if the opposition didn't have access to the same amount of data as the ESRI. But even in that scenario, they clearly had access to the ESRI report and its relevant appendices of data.

I just think people have short memories. The last time Labour was in power, I wasn't eligible to vote but I can still remember people talking about how useless Labour was. It's human nature to want the incumbent out.

I think we need to remember what Labour and FG policies at the time were. Even in 2007, I remember all three main parties having ridiculously high forecasts of GDP growth. It would be very interesting to back and read all those manifestos now!

later12

southsiderosie wrote: »

The information from the ESRI is publicly available.

Just to point one thing out - personally I disagree with some of what the ESRI were saying in that clip. That clip is from 2000 and cutting tax rates was still a good idea back then, the government were correct to pursue the policy of lowering income tax up until 2005.

They were also correct to attract skilled immigrants here, and continuing to do so was in our best interests. The ESRI report you posted condemned that practice.

Of course nobody is, or at least i am not, suggesting that its real estate polcies were correct. However, the ESRI did not, contrary to some apparent belief, predict the domestic financial catastrophe.

Iirc, that clip also forecasted an economic slowdown in 2001 - in fact, that did not happen, although a shift from manufacturing to property and finance did occur, but that does not have anything to do with the clip.

southsiderosie

later10 wrote: »

Just to point one thing out - personally I disagree with some of what the ESRI were saying in that clip. That clip is from 2000 and cutting tax rates was still a good idea back then, the government were correct to pursue the policy of lowering income tax up until 2005.

They were also correct to attract skilled immigrants here, and continuing to do so was in our best interests. The ESRI report you posted condemned that practice.

Of course nobody is, or at least i am not, suggesting that its real estate polcies were correct. However, the ESRI did not, contrary to some apparent belief, predict the domestic financial catastrophe.

Iirc, that clip also forecasted an economic slowdown in 2001 - in fact, that did not happen, although a shift from manufacturing to property and finance did occur, but that does not have anything to do with the clip.

The ESRI has consistently published reports on the state of the economy that were considerably less rosy than what the government was spouting, which gives lie to the assertion that there were no voices crying in the wilderness.

I also disagree on the tax issue, but that is probably a discussion for another thread.

For me personally, the raw wage and spending data from the government was far more damning of their policies than any compiled analysis. Spending trends and revenue projections in particular were disastrous. This information is publicly available.

As for encouraging skilled migrants...Well, as a non-EU skilled migrant who has since left the country, let me just say that Ireland is not quite as easy to get into as many people assume it is. In addition, the government did not and has not created a mechanism that would give people permanent residency, not a straightforward pathway to citizenship. But, again, that is an issue for another thread.

Blowfish

later10 wrote: »

Iirc, that clip also forecasted an economic slowdown in 2001 - in fact, that did not happen,

Actually, it did happen and it's even reflected in house prices of the time. It's essentially when the 'real' boom ended and we insead went into the unsustainable 'bubble' mode, due in no small part to the Fianna Fail policies that the ESRI were giving out about.

later12

southsiderosie wrote: »

The ESRI has consistently published reports on the state of the economy that were considerably less rosy than what the government was spouting, which gives lie to the assertion that there were no voices crying in the wilderness.

Of course, a ruling administration will always say things are better than economists will say.

However your use of the term "less rosy" is actually bang on. Saying things are less rosy is one thing, saying that we are at the latter stage of a boom and about to go into complete financial meltdown is, well, quite another thing. The ESRI did not predict that meltdown, and that clip - which pertains to turn of the century tax policy (largely irrelevant) and immigration is only very remotely related to the meltdown in that it mentions mortgage relief and construction in quite an incidental way.

I also disagree on the tax issue, but that is probably a discussion for another thread.

Why? This was in 2000 when our manufacturing boom was going at full throttle, we hadn't entered the property bubble by then and there was no need to be greatly worried about economic slowdown - their income tax policy at that particular period has been proven quite correct. It was about 5 years later when it began to falter.

As for encouraging skilled migrants...Well, as a non-EU skilled migrant who has since left the country, let me just say that Ireland is not quite as easy to get into as many people assume it is. In addition, the government did not and has not created a mechanism that would give people permanent residency, not a straightforward pathway to citizenship.

This is largely irrelevant. The point is that the ESRI was advocating a slowdown in immigration, when actually in hindsight that would have been an unwise policy.

So lets get one thing straight people, this clip is from a time housing was still at a growing but quite sustainable and relatively innocent level. We were not yet in a property bubble as we now know it back then in 2000 and were a long way from the current bust and the domestic policies that brought it about.

later12

Blowfish wrote: »

Actually, it did happen and it's even reflected in house prices of the time. It's essentially when the 'real' boom ended and we insead went into the unsustainable 'bubble' mode, due in no small part to the Fianna Fail policies that the ESRI were giving out about.

House prices do not indicate economic growth in themselves, and certainly did not do so in 2000.
Furthermore the economic slowdown you mention was envisaged as a long term event in that clip, in fact, in the end there was a slight blip - the reflection you speak of on your graph, as it happens, is just that - a blip.

Freiheit

and I see his trusted lieutenant Biffo by his side....almost a parody of himself....utter farce:(