Europe recognising it's mistakes

Laminations

Tomorrows papers on VB showed a story (front page of Indo I think) that reports on a top ranking European official admitting the ECB had a role to play in, and therefore share some responsibility for, Irelands predicament. A few of us posters on here have been saying that European policy needs to be factored into our bailout conditions while the more Europhilic posters want to lay all of the blame on the irish people.

Anyway it'll be interesting to read the story and flesh out the thread (someone feel free to stick up a link when available and ill update this) but another interesting piece regarding the necessity of a debt restructure comes from UCL economist Richard Portes. Groupthink in government and DoF (and circles here and the media) seems to be adamant that we have to pay back our debts at all costs and play nice with Europe (for our creditworthy reputations sake). Portes paints a different picture

History teaches that when debt burdens become excessive, they are restructured to make them sustainable (Eichengreen and Portes 1986 and 1989). Many, many countries have done this, including in Europe (e.g., Poland, Russia, Turkey in recent years). And the reputational costs are likely to be low. Unlike some countries, Ireland did not get into its present situation because of public sector overborrowing

Laminations

Boskowski wrote: »

Here we go again. It's not our fault boo fkn hoo...

If that was my argument I'd advocate paying nothing back. My point is that it is not all our fault, and therefore we shouldn't be attempting to pay everything back. Also our current course will crush the economy. Our fault or not, are you suggesting we can continue without debt restructuring?

Boskowski

Sorry usually not my style. Just hadn't the energy coming out of the other thread and typing on the phone too.

I'm suggestion we haven't shown any willingness or ability to reform this place. Were hiding conveniently almost behind those bank figures cos it makes it so much easier to ignore our house is a total mess banks or no banks.

But ghen im not sure much can be done We've manoeuvred ourselves into a cul de sac. We need to downsize big time on all fronts but we can't because personal debt levels are so high. I don't really see a way out. I think were fvcked tbh.

beeftotheheels

Laminations wrote: »

Tomorrows papers on VB showed a story (front page of Indo I think) that reports on a top ranking European official admitting the ECB had a role to play in, and therefore share some responsibility for, Irelands predicament. A few of us posters on here have been saying that European policy needs to be factored into our bailout conditions while the more Europhilic posters want to lay all of the blame on the irish people.

Not true. I'm a Europhilic poster yet I have said several times that the EU is not only in danger of making mistakes, but has made mistakes because the degree of federalism required to deal with a crisis of this magnitude is not the degree of federalization any of us have yet voted for

http://www.boards.ie/vbulletin/showthread.php?p=71615835

femur61

It is our fault, we didn't have to spend the money. Arrogance prevailed we thought we were infallable. We were very happy to listen and wanted to believe Bertie, borrow money for 4 litre jeeps to drive around Dublin, spend foolishly on weddings, buy xboxes for the kids. We behaved like teenagers discovering alcohol for the first time.

Zubeneschamali

femur61 wrote: »

We behaved like teenagers discovering alcohol for the first time.

Who's this "we", kemosabe?

RichardAnd

femur61 wrote: »

It is our fault, we didn't have to spend the money. Arrogance prevailed we thought we were infallable. We were very happy to listen and wanted to believe Bertie, borrow money for 4 litre jeeps to drive around Dublin, spend foolishly on weddings, buy xboxes for the kids. We behaved like teenagers discovering alcohol for the first time.

This is very, very true and it's one of the most important lessons that, I hope, will be learning from this (though I'll admit, I expect another recession in about 25 years).

However, whilst it is very true that an open bar doesn't oblige someone to make a drunken ass of themselves, a decent publician should know when someone has had enough. Yes, the Irish acted like students on a "toxic tuesday" but the europeans should never have allowed a country like Ireland to get to much credit.

I'm not playing this "It's not our fault!" card in the least, I'm simply making the point that, if the Euro continues, the ECB will need to keep an eye on its members books. This is especially true for countries like Ireland.

Spudmonkey

This is the article you were referring to I presume? EFSF Chief Executive Klaus Regling criticizing the European Commission for their lack of intervention.

The blame can't be put at anyone's door in particular. It has to be spread around.

kippy

Spudmonkey wrote: »

The blame can't be put at anyone's door in particular. It has to be spread around.

Indeed and a number of people/organisations have admitted to being part of the problem.
That does not however assist us in getting out of the situation nor should it prevent the prosecution of those who have broken the law. There were a number of individuals and organisations who very blatantly flaunted the law of the land in order to better their personal circumstances and cover over the chasms that were in their organisations balance sheets. It was only 3 years ago that were we told that Irish banks were well capitalised.
The debt will have to be restructured at some point - the earlier, the better so we can begin to move on. The uncertainty and death by a 1000 cuts of the past three years (and looks like continuing for another 3) is not the way, in my opinion to correct our situation.

Laminations

Spudmonkey wrote: »

This is the article you were referring to I presume? EFSF Chief Executive Klaus Regling criticizing the European Commission for their lack of intervention.

The blame can't be put at anyone's door in particular. It has to be spread around.

It may relate to that but the story I'm referring to is actually the front page of the Irish Daily Mail - still looking for online source

tommy57

RichardAnd wrote: »

This is very, very true and it's one of the most important lessons that, I hope, will be learning from this (though I'll admit, I expect another recession in about 25 years).

However, whilst it is very true that an open bar doesn't oblige someone to make a drunken ass of themselves, a decent publician should know when someone has had enough. Yes, the Irish acted like students on a "toxic tuesday" but the europeans should never have allowed a country like Ireland to get to much credit.

I'm not playing this "It's not our fault!" card in the least, I'm simply making the point that, if the Euro continues, the ECB will need to keep an eye on its members books. This is especially true for countries like Ireland.

I like your optimism i think we'll still be in this recession in 25 years. And i'm not buying into the issue that "we" lorded it up with our 4 holidays a year , fancy cars and jeeps. In the boom i bought a house and a 2nd hand vw passatt (which i still have) the worst mistake most normal people did was buy a house.

RichardAnd

tommy57 wrote: »

I like your optimism i think we'll still be in this recession in 25 years. And i'm not buying into the issue that "we" lorded it up with our 4 holidays a year , fancy cars and jeeps. In the boom i bought a house and a 2nd hand vw passatt (which i still have) the worst mistake most normal people did was buy a house.

In 25 years, the effects of this mess will still be felt but to be fair, the effects of things that happened hundreds of years ago are still present.

Personally, I see Ireland stabilising within the next few years (not booming) with gradual growth again afterwards. The reason I think this is because the financial cycle is about 25 years. Things get good, some sort of bubble forms, pops and there is a downturn.

This happens again and again because by the time the next bubble arrives, a whole new generation are present and they think they're onto something but, as can be seen, that's never true. It's exactly what happened with the great depression and it happened again. Cycles, it's what it all comes down to.

Laminations

femur61 wrote: »

It is our fault, we didn't have to spend the money. Arrogance prevailed we thought we were infallable. We were very happy to listen and wanted to believe Bertie, borrow money for 4 litre jeeps to drive around Dublin, spend foolishly on weddings, buy xboxes for the kids. We behaved like teenagers discovering alcohol for the first time.

So you are saying we (collectively) were foolish? I don't like the broad brush but agreed. Now don't you think it's foolish lending money by the fistful to a teenager who is discovering alcohol for the first time? In your analogy it wouldn't be money, it'd actuallly be Europe throwing alcohol at us. The alco is not the only one at fault in that situation

dan_d

Might be an idea if we stopped flogging to death the subject of whose fault it is, and started (coz we still haven't) trying to do something about it?

Laminations

dan_d wrote: »

Might be an idea if we stopped flogging to death the subject of whose fault it is, and started (coz we still haven't) trying to do something about it?

Do something about it? We NEED to restructure our debt. We NEED to convince Europe to let bondholders take a haircut. I've linked to a Richard Portes article in the OP that suggests what we should be doing. To push this approach we need to highlight the faults of European institutions in Irelands predicament. How do you propose we convince them or are you disagreeing that we need a debt restructuring?

Spudmonkey

kippy wrote: »

The debt will have to be restructured at some point - the earlier, the better so we can begin to move on. The uncertainty and death by a 1000 cuts of the past three years (and looks like continuing for another 3) is not the way, in my opinion to correct our situation.

That's entirely separate. Even if we got rid of bank debt entirely we'd still have a deficit to contend with. One which we aren't going to grow our way out of over the targeted timeframe which means there are still plenty more cuts on the way.

What this admission does do is allow us to speed up whatever concession we are ultimately going to get from our friends in Europe.

Tipp Man

Lamintations the following is from the quote in your original post

"Unlike some countries, Ireland did not get into its present situation because of public sector overborrowing"
Is this guy living in Ireland or utopia?? How can he write of the huge public deficit that has been there for 4 years now and will be there for a the very minimum another 4 years.

How much will we have borrowed between 2008 and 2015 to pay for the excessive public sector spending, 120 billion or more? And this is irregardless of the banks

Even with the best, most sound banking system in the world we would have been heading towards IMF teritory

I find it hard to have any credability for a person who said that as it is merely burying his head in the sand as to a huge huge problem in the irish economy

kippy

Spudmonkey wrote: »

That's entirely separate. Even if we got rid of bank debt entirely we'd still have a deficit to contend with. One which we aren't going to grow our way out of over the targeted timeframe which means there are still plenty more cuts on the way.

What this admission does do is allow us to speed up whatever concession we are ultimately going to get from our friends in Europe.

The point I was making - I would have prefered a "cards on the table" approach in the first year of the crisis - two years at the most - make ALL the cuts then - cut out the uncertainty and hit to confidence over the next few years with the same ultimate end result anyway just a longer time frame of achieving it.

Also, as an aside but linked - It's not actually entirely separate. While we have a major deficit to contend with, the MAIN reason we could not borrow from the markets was because of our exposure the zombie banking debts of an unknown quantity. I would argue from here to eternity that without our exposure to these banking debts we would be able to manage the deficit over a period of time.
You cannot say that the two debts and issues are seperate - they are inherently linked and our ability to manage either are linked now whether we like it or not.

kippy

Tipp Man wrote: »

Lamintations the following is from the quote in your original post

"Unlike some countries, Ireland did not get into its present situation because of public sector overborrowing"
Is this guy living in Ireland or utopia?? How can he write of the huge public deficit that has been there for 4 years now and will be there for a the very minimum another 4 years.

How much will we have borrowed between 2008 and 2015 to pay for the excessive public sector spending, 120 billion or more? And this is irregardless of the banks

Even with the best, most sound banking system in the world we would have been heading towards IMF teritory

I find it hard to have any credability for a person who said that as it is merely burying his head in the sand as to a huge huge problem in the irish economy

Stall the digger.
The guy is saying that the situation we find outselves in now is NOT because we over borrowed to fund the public sector in the years 2000-2008. It was funded from income however this income was based on a bubble and that is where the flaw exists.
Of course - were we to have to continue borrowing 20 billion a year from 2009 onwards without doing anything about it we would find ourselves in trouble - but to be honest, it would be nowhere near the **** street we find ourselves in at this very moment and one would assume this deficit would be tackled a hell of a lot more easily that if we had another 100+ billion of banking debts hanging around the countries neck.

Laminations

Tipp Man (and others) also see http://www.voxeu.org/index.php?q=node/6017

A contributor on the Irish Economy blog asks some very good questions

* Why is support of the current bailout policy restricted to the centre right of the European establishment?
* Why are there no significant public intellectuals who support it?
* Why does opposition to it come from such a wide range of the political spectrum?
* Why does support for it disproportionately come from those involved in the European financial sector?
* Why is so much of the support for such a clearly political decision justified though reference to law rather than necessity or social benefit? (at least people have stopped bandying about “parri passu” as if major economic policy decisions depend chiefly on bond/equity/deposit privilege)

jmayo

femur61 wrote: »

It is our fault, we didn't have to spend the money. Arrogance prevailed we thought we were infallable. We were very happy to listen and wanted to believe Bertie, borrow money for 4 litre jeeps to drive around Dublin, spend foolishly on weddings, buy xboxes for the kids. We behaved like teenagers discovering alcohol for the first time.

I wish you and others would be more selective when using the word WE. :rolleyes:
Maybe you were in that group, but count me out sunshine. :mad:

dan_d wrote: »

Might be an idea if we stopped flogging to death the subject of whose fault it is, and started (coz we still haven't) trying to do something about it?

Yes, but it would be much easier to get people to move on if they saw that the ones that got us into this mess were not saundering off with millions in payoffs, or still living the high life as if nothing had happened.
The whole system is rotten to the core.

A judge allowed a developer owing hundreds of millions to be allowed hang onto more of his salary because he had to send his kids to a private fee paying schools.
What f***ing planet are we on as a people ?
Let's see some ordinary Irish mortgage holder in arrears or some ordinary indebted business man use that excuse and get away with it. :mad:

And yes I know life isn't fair, but the situation in Ireland is just taking the pi**.
It appears now that if you are of a certain class or hold certain positions you are no longer responsible for your cockups.
Hell you are often rewarded. :mad::mad:

As for responsibility.
I find it ironic that some, particularly the eurolicks, believe the Irish people, all of us now, are responsible for:
the wreckless borrowing of some (the toxic debts of the developers, big and small, not the ordinary mortgage holders is what have the banks in this mess),
the wreckless lending of our banks particularly to the above developer class,
and the wreckless lending of foreign banks and investors to our banks.

Is there any f**king thing that WE aren't responsible for ?

It is nice to see how some of the people who would probably despise communism the most are adopting some communist principles or at least terminology.
We have Socialising of losses, we have Nationalisation of defunct insolvent entities and we have the Collective of responsibility.
Hell we even have something of a 5 year plan.
Roll on the gulags. :rolleyes:

As for Europe and the Euro.
Wait until the cajas/caixas start tumbling in Spain and it is bye bye Euro.

Meanwhile napolean IV and merkel will still be playing politics demanding we cut our corporation tax. :rolleyes:

View

Laminations wrote: »

Tipp Man (and others) also see http://www.voxeu.org/index.php?q=node/6017

A contributor on the Irish Economy blog asks some very good questions

Those are indeed good questions. Essentially the centre right which dominate politics within the EU at the moment favour a conservative solution to the current problems. That is, to say, they essentially want to keep the solution at member state level with only minor additions at EU level - this shouldn't surprise anyone given the parties concerned (sister parties of FG) are not the ones you'd expect to favour either radical "free market" solutions or "socialising" the problem (on an EU wide basis).

Tipp Man

kippy wrote: »

Stall the digger.
The guy is saying that the situation we find outselves in now is NOT because we over borrowed to fund the public sector in the years 2000-2008. It was funded from income however this income was based on a bubble and that is where the flaw exists.
Of course - were we to have to continue borrowing 20 billion a year from 2009 onwards without doing anything about it we would find ourselves in trouble - but to be honest, it would be nowhere near the **** street we find ourselves in at this very moment and one would assume this deficit would be tackled a hell of a lot more easily that if we had another 100+ billion of banking debts hanging around the countries neck.

Thats the whole point though - Government spending is the problem

Look at the way government spending had doubled from about 2003 to 2008. That government spending (as you rightly point out) was financed by the bubble - a bubble which was entirely financed by borrowing. so although not directly borrowed our government expenditure increased on borrowed funds. They were receiving in vast sums of money on VAT and Stamp which was entirely borrowed money. And then to top it all off they were spending it more on current expenditure than capital

Just because the government wasn't actually borrowing for the large expenditure increases doesn't mean the money wasn't borrowed, it clearly was just not directly in the governments name

kippy

Tipp Man wrote: »

Thats the whole point though - Government spending is the problem

Look at the way government spending had doubled from about 2003 to 2008. That government spending (as you rightly point out) was financed by the bubble - a bubble which was entirely financed by borrowing. so although not directly borrowed our government expenditure increased on borrowed funds. They were receiving in vast sums of money on VAT and Stamp which was entirely borrowed money. And then to top it all off they were spending it more on current expenditure than capital

Just because the government wasn't actually borrowing for the large expenditure increases doesn't mean the money wasn't borrowed, it clearly was just not directly in the governments name

Thats obviously very true - but the very fact of the matter was that borrowing that finance that bubble was private sector debt which the State itself should never have been responsible for.
You could probably extrapolate what you have just said to relate to almost any country in the world.
The reason however WE CAN NOT get access to money markets is very simple.
We have exposed ourselves - as a nation, to the debts of private sector bankers, insurers and fund managers. We still don't know the extent of that debt - nor do we know who a lot of it is owed to.

Government spending in the Celtic tiger years matched income at least - yes that was based on a bubble supported by predominately private sector borrowing but then you are back to the argument of why the bubble wasnt stopped in the first place.

Ultimately every citizen of this country has taken on almost all the debt of the country and its banks, even the citizens who were "cautious" during the "boom" - and what do we get out of it - zilch - zero - nada, yet the guys who made the major decisions at every level - Irish Banks, Irish Government, International Banks, International Government, Ratings agencies, Audit firms, walk away with their pensions, bonus during the time and still now, and lifestyles intact.

The unknown of the black hole of banking debt and where it will end up is the major issue - we are reliant on ourselves reinflating the bubble to get rid of that and thats no going to happen.

femur61

jmayo wrote: »

I wish you and others would be more selective when using the word WE. :rolleyes:
Maybe you were in that group, but count me out sunshine. :mad:

.

Sorry I used "we" because I hate to gloat, I always saved for a rainy day and never borrowed, bought my house in full no car loans etc, the way I was brought up. I say that collectively becuase that has been used so much in the media so it is contagious. I had a plan B an am annoyed I'm paying for the mistakes of others but everyone has had a wakw up call.

dan_d

jmayo wrote: »

Yes, but it would be much easier to get people to move on if they saw that the ones that got us into this mess were not saundering off with millions in payoffs, or still living the high life as if nothing had happened.
The whole system is rotten to the core.

A point I completely agree with. But sometimes it seems that all we do is discuss the whole situation to death and focus only on who is to blame.

Liam Byrne

femur61 wrote: »

It is our fault, we didn't have to spend the money. Arrogance prevailed we thought we were infallable. We were very happy to listen and wanted to believe Bertie, borrow money for 4 litre jeeps to drive around Dublin, spend foolishly on weddings, buy xboxes for the kids. We behaved like teenagers discovering alcohol for the first time.

Some did, some didn't, but the above us regularly trotted out in an attempt to justify shafting everyone in the country.

Wrongly, of course.

It's the inexplicable "acceptable" equivalent of "all Muslims are WWWW" or "all Polish are XXXX" or "all single mothers are YYYY" or "all itinerants are ZZZZ" and quite simply would not be tolerated as a generalisation were it not for the fact that it gets the powerful people responsible off the hook and allows indiscriminate application of sanctions, taxes, etc.

Liam Byrne

dan_d wrote: »

A point I completely agree with. But sometimes it seems that all we do is discuss the whole situation to death and focus only on who is to blame.

Because without that justice being done there is no closure and no sense of common purpose.

That is absolutely ESSENTIAL if people are to accept being screwed over to pay others' gambling bills.

SupaNova

In 25 years, the effects of this mess will still be felt but to be fair, the effects of things that happened hundreds of years ago are still present.

Personally, I see Ireland stabilising within the next few years (not booming) with gradual growth again afterwards. The reason I think this is because the financial cycle is about 25 years. Things get good, some sort of bubble forms, pops and there is a downturn.

This happens again and again because by the time the next bubble arrives, a whole new generation are present and they think they're onto something but, as can be seen, that's never true. It's exactly what happened with the great depression and it happened again. Cycles, it's what it all comes down to.

This is a little simplistic, the financial cycle is not a mythical 25 year cycle. It can be 5 years, 10 years, or 25 years, in the US they have had 3 housing bubbles in one generation as well as a dot com bubble, and the latest housing bubble is the mother of all housing bubbles. Its all down to central banks policy. Ron Paul is the only politician i know who focuses on this and our monetary system and is getting at least some media attention on the subject. The cycle is started by loosening credit, the more you loosen credit and the longer you loosen credit for the bigger the boom, and the bigger the bust. We have had the biggest loosening of credit for the longest period in the past decade and a half.

I recommend Rothbard's 'America's Great Depression'. You can get a pdf version free online. A lot on business cycle theories, fractional reserve and central banking, the analysis of policies undertaken during the depression.

Zubeneschamali

SupaNova wrote: »

Ron Paul is the only politician i know who focuses on this and our monetary system and is getting at least some media attention on the subject.

Ron Paul is a Gold-standard no-fiat-money nutjob.

SupaNova

Ron Paul is a Gold-standard no-fiat-money nutjob.

Lol , why does being for a commodity backed money as opposed to fiat make him a nutjob?

ei.sdraob

Considering that the euro is the next best thing to gold standard due to policy, what does that make us?

Zubeneschamali

SupaNova wrote: »

Lol , why does being for a commodity backed money as opposed to fiat make him a nutjob?

OK, nutjob is probably not the right term, I should have said crack-pot.

jmayo

dan_d wrote: »

A point I completely agree with. But sometimes it seems that all we do is discuss the whole situation to death and focus only on who is to blame.

Yes, but have you ever noticed a lot of the ones always saying we should move on are the very ones who got us into this mess ?

SupaNova wrote: »

This is a little simplistic, the financial cycle is not a mythical 25 year cycle. It can be 5 years, 10 years, or 25 years, in the US they have had 3 housing bubbles in one generation as well as a dot com bubble, and the latest housing bubble is the mother of all housing bubbles.
...

Just look at Japan, the last big construction bubble and the dot com tech bubble did not lift their house prices after their bust.

Zubeneschamali wrote: »

Ron Paul is a Gold-standard no-fiat-money nutjob.

Maybe he just reckons anything with the same name as that fine maker of Italian cars just can't be good long term.

Inverse to the power of one!

femur61 wrote: »

Sorry I used "we" because I hate to gloat, I always saved for a rainy day and never borrowed, bought my house in full no car loans etc, the way I was brought up. I say that collectively becuase that has been used so much in the media so it is contagious. I had a plan B an am annoyed I'm paying for the mistakes of others but everyone has had a wakw up call.

I'm in the same boat, didn't engage in the excessive spending or borrowing of the time and am all the better off for it now.

But i still say "We"

*We as a society kept voting them in
*We as a society said nothing while the money rolled in
*We as a society did not ask questions
*We as a society are not reforming
*We as a society have still not held anyone accountable in court
*We as a society still look to govt to do everything for us
*We will not change until we look in the mirror

You mightn't like it, but as an individual who disassociates of all blame you can do nothing......but as a society that recognizes it flaws, rolls up it's sleeves and cleans up the mess WE can do something about it.

It's like the old parable about casting stones without sin, even those of us who did not partake, in someway contributed to it. I'm not advocating guilt on account of this, but I am advocating the sense of responsibility we need to fix it. I only wish people could realise this and engage the sense of civic responsibility required to make the changes we desperately need a reality.

Tayla

kippy wrote: »

Ultimately every citizen of this country has taken on almost all the debt of the country and its banks, even the citizens who were "cautious" during the "boom" - and what do we get out of it - zilch - zero - nada, yet the guys who made the major decisions at every level - Irish Banks, Irish Government, International Banks, International Government, Ratings agencies, Audit firms, walk away with their pensions, bonus during the time and still now, and lifestyles intact.

.

This is what makes the whole thing so disgraceful.....maybe all this talk about 'all of us' having caused it and needing to take the blame would be a hell of a lot easier to stomach if the major players in the whole thing had to feel the same pain, they have multiple properties, huge pensions, wages, bonuses........why the hell are they not included in this 'we' that is so often talked of?

SupaNova

OK, nutjob is probably not the right term, I should have said crack-pot.

You must know something that i am unaware of, can you please point me to any material on the subject of money and our monetary system that would enlighten me as to why a gold standard as opposed to fiat money would be nuts.

Noreen1

Inverse to the power of one! wrote: »

I'm in the same boat, didn't engage in the excessive spending or borrowing of the time and am all the better off for it now.

But i still say "We"

*We as a society kept voting them in
*We as a society said nothing while the money rolled in
*We as a society did not ask questions
*We as a society are not reforming
*We as a society have still not held anyone accountable in court
*We as a society still look to govt to do everything for us
*We will not change until we look in the mirror

You mightn't like it, but as an individual who disassociates of all blame you can do nothing......but as a society that recognizes it flaws, rolls up it's sleeves and cleans up the mess WE can do something about it.

It's like the old parable about casting stones without sin, even those of us who did not partake, in someway contributed to it. I'm not advocating guilt on account of this, but I am advocating the sense of responsibility we need to fix it. I only wish people could realise this and engage the sense of civic responsibility required to make the changes we desperately need a reality.

What do you suggest we do, then?

It seems to me that we were denied any say in the original bank guarantee, despite the fact that it could have been put to a referendum.

Not only were we denied any say on the Bailout - according to the Government of the day - it wasn't happening at all!

We were denied an election by dubious means (the withholding of three bye-elections) - until the Bailout was a "done deal".

When we were finally permitted a GE, our current Government engaged in electioneering spin to rival that of FF. (Not another penny to the banks, we will re-negotiate the terms of the Bailout, etc.)

Yet now, when our Politicians have effectively tied the electorates hands - we should accept all the responsibility, and find a way out of the mess, all the while being forced to pay back ridiculous levels of debt? Hmmm.

Inverse to the power of one!

Noreen1 wrote: »

What do you suggest we do, then?

It seems to me that we were denied any say in the original bank guarantee, despite the fact that it could have been put to a referendum.

Not only were we denied any say on the Bailout - according to the Government of the day - it wasn't happening at all!

We were denied an election by dubious means (the withholding of three bye-elections) - until the Bailout was a "done deal".

When we were finally permitted a GE, our current Government engaged in electioneering spin to rival that of FF. (Not another penny to the banks, we will re-negotiate the terms of the Bailout, etc.)

Yet now, when our Politicians have effectively tied the electorates hands - we should accept all the responsibility, and find a way out of the mess, all the while being forced to pay back ridiculous levels of debt? Hmmm.

My feelings are similar to yours too, but we'll have to do more then just simply electing FG/Lab. Our societies in need of a reformation, the debt and it's problems will be all the harder to deal with while special interests hold this country to ransom, we really do need to revisit the values of the state and what we want for the future, this is something all of us have an interest in.

An extremely severe symptom of what I'm saying is our inability to hold anyone responsible for their crimes, Michael Lowry and Sean Fitzgerald, not to mention the hundreds of others going scot free show how poor a state we are in.

Of course we are in no position to negotiate with the EU or IMF as long as we keep demonstrating ourselves to be nothing more then a slightly less corrupt/less extreme version of Greece, not only that, but our debt continues to grow because we won't tackle people such as Angela Kerins who takes half a million home from the state every year.

We are in no state to change our debt conditions with external parties when we can't even control our own internal special interests.

Only we as a society can change the direction of our state away from this reality.

beeftotheheels

Noreen1 wrote: »

It seems to me that we were denied any say in the original bank guarantee, despite the fact that it could have been put to a referendum.

This I would dispute. Takes about a month to organize a referrendum and if we date the point at which it started to become apparent we needed to act as the day Lehman's failed that gave Lenihan 2 weeks at most. Actually, for most of that first week the panic was so bad it wasn't obvious that our banks were being hit worse so I'd probably say he had ten days at most. If he didn't know how bad it was until the banks went knocking on his door he had less than a week. There simply was not time to put this to the people. However, it was put to the parliament of the people (there was time to do that) and our parliament overwhelmingly approved it. We might disagree in hindsight, but we can't claim that we should have had a say in it. We empower our parliament to make decisions on our behalf.

Noreen1 wrote: »

Not only were we denied any say on the Bailout - according to the Government of the day - it wasn't happening at all!.

Fair point.

Noreen1 wrote: »

We were denied an election by dubious means (the withholding of three bye-elections) - until the Bailout was a "done deal".

Again fair point, but the guarantee was earlier, and the largest opposition supported the government on that. And supported the bail out deal.

Noreen1 wrote: »

When we were finally permitted a GE, our current Government engaged in electioneering spin to rival that of FF. (Not another penny to the banks, we will re-negotiate the terms of the Bailout, etc.)

Yet now, when our Politicians have effectively tied the electorates hands - we should accept all the responsibility, and find a way out of the mess, all the while being forced to pay back ridiculous levels of debt? Hmmm.

The point is, that the FF governments up to 2007 were the ones who tied everyones hands. FG realized, in advance of the election, that they had European binds on their wrists. Despite what Leo said, did you not notice Noonan and Kenny rowing back about unilateral measures after they spoke with their European brethren?

I think they sent out mixed messages, those of us who assumed burden sharing would not be tolerated by Trichet chose to hear Noonan and Kenny, those who wanted to believe in burden sharing chose to hear Leo and not Noonan or Kenny (who were no where near as clear or press friendly in their statements of reservation as Leo was in his "not another cent" rubbish).

I too am angry with the helpless situation we find ourselves in now, but we are largely here because of our failure as an electorate in the two elections prior to 2007 when we allowed FF pour copious amounts of petrol on fires because we wanted to feel nice and warm.

We're not the only ones responsible, but we are responsible.

Noreen1

Inverse to the power of one! wrote: »

My feelings are similar to yours too, but we'll have to do more then just simply electing FG/Lab. Our societies in need of a reformation, the debt and it's problems will be all the harder to deal with while special interests hold this country to ransom, we really do need to revisit the values of the state and what we want for the future, this is something all of us have an interest in.

An extremely severe symptom of what I'm saying is our inability to hold anyone responsible for their crimes, Michael Lowry and Sean Fitzgerald, not to mention the hundreds of others going scot free show how poor a state we are in.

Of course we are in no position to negotiate with the EU or IMF as long as we keep demonstrating ourselves to be nothing more then a slightly less corrupt/less extreme version of Greece, not only that, but our debt continues to grow because we won't tackle people such as Angela Kerins who takes half a million home from the state every year.

We are in no state to change our debt conditions with external parties when we can't even control our own internal special interests.

Only we as a society can change the direction of our state away from this reality.

We certainly need to change the direction of our state away from this reality.

However, I know of no initiative a citizen can take to achieve the necessary reform.(apart from petitioning our politicians) Therefore, unless someone has knowledge not available to me, only our Politicians can begin the process of reform.

It remains to be seen whether the new Government will make any real changes, or engage in a little window dressing.

My intuition is that turkeys don't vote for Christmas, though.

Noreen1

beeftotheheels wrote: »

This I would dispute. Takes about a month to organize a referrendum and if we date the point at which it started to become apparent we needed to act as the day Lehman's failed that gave Lenihan 2 weeks at most. Actually, for most of that first week the panic was so bad it wasn't obvious that our banks were being hit worse so I'd probably say he had ten days at most. If he didn't know how bad it was until the banks went knocking on his door he had less than a week. There simply was not time to put this to the people. However, it was put to the parliament of the people (there was time to do that) and our parliament overwhelmingly approved it. We might disagree in hindsight, but we can't claim that we should have had a say in it. We empower our parliament to make decisions on our behalf.

Fair point. But I'm not convinced that, had Lenihan been so inclined, he couldn't have introduced some temporary measures. A time limited guarantee would be one option, a limited capital injection would be another - and that's just off the top of my head. I'm sure that, given the amount of expertise Lenihan could have called on, there were other options, too.

As to empowering our Parliament to make decisions on our behalf, we surely have a right to expect that the decisions made on our behalf are in our interest, and that decisions with such major implications for the future of the nation are taken with due consideration, and after advice from competent professionals is taken , where necessary.

beeftotheheels wrote: »

Fair point.



Again fair point, but the guarantee was earlier, and the largest opposition supported the government on that. And supported the bail out deal.



The point is, that the FF governments up to 2007 were the ones who tied everyones hands. FG realized, in advance of the election, that they had European binds on their wrists. Despite what Leo said, did you not notice Noonan and Kenny rowing back about unilateral measures after they spoke with their European brethren?

I think they sent out mixed messages, those of us who assumed burden sharing would not be tolerated by Trichet chose to hear Noonan and Kenny, those who wanted to believe in burden sharing chose to hear Leo and not Noonan or Kenny (who were no where near as clear or press friendly in their statements of reservation as Leo was in his "not another cent" rubbish).

I noticed Noonan and Kenny rowing back on unilateral measures. I didn't quite expect them to roll over and play dead, though.:D

beeftotheheels wrote: »

I too am angry with the helpless situation we find ourselves in now, but we are largely here because of our failure as an electorate in the two elections prior to 2007 when we allowed FF pour copious amounts of petrol on fires because we wanted to feel nice and warm.

We're not the only ones responsible, but we are responsible.

It may be fair to say that those among the electorate who voted for FF were unwise.
However, 40%+ of the electorate is not the entire electorate, and it certainly is not the younger generation, who had no say in any of this, yet will be expected to pay for it, both in taxes, and in lost opportunities.

Therefore, it is fair to say that some of the electorate are partly responsible, just as some people took out ridiculous loans/mortgages.
The majority, however, are not responsible - yet, they are expected to pay for the debts of private speculators, and supposed to feel responsible (guilty?) for these debts, also.

Ehh - no!

beeftotheheels

Noreen1 wrote: »

It remains to be seen whether the new Government will make any real changes, or engage in a little window dressing.

My intuition is that turkeys don't vote for Christmas, though.

Certainly not if they are elected by other fowl!

We need wholesale reform of our political system to put national interests above local ones, a list system might help in this regard.

As an alternative to a list system we could have an executive not answerable to the parliament (a more US/ French model of the President being elected by popular vote and having real powers). Without going the whole hog we could expand some of the powers of the president allowing that office challenge bills on public interest grounds other than on their constitutionality, or allowing the president refer bills to the people by referendum on public interest grounds.

Failing that, we the electorate need to maintain vigilance and demand real change. We've shown that we are prepared to punish poor governance (a day late and a dollar short but we got there in the end) so we have to keep up the pressure. We can't allow FG and Labour behave like New Labour in the UK and remain in power despite annoying the people because the opposition were more unsavory.

If our politicians start to get the message that we will change them if they don't vote for Christmas, it might influence their vote.

beeftotheheels

Noreen1 wrote: »

As to empowering our Parliament to make decisions on our behalf, we surely have a right to expect that the decisions made on our behalf are in our interest, and that decisions with such major implications for the future of the nation are taken with due consideration, and after advice from competent professionals is taken , where necessary.

Alas, you would hope so, but it ain't always the case - Tony Blair led the UK into a war the majority of the people wanted no part of. The people's only recourse in a democracy is to eject him from power in the next general election.

I actually don't think Lenihan had many choices, and I'm pretty sure that some of the other choices open to him would have been as disastrous. The problem is, with 20 20 hindsight we know the decision he made was a bad one, but we don't know if the other options could have been worse. So commentators can happily shout from the sidelines saying their ideas would have worked out better safe in the knowledge that the veracity of their claims cannot be tested since we cannot go back in time.

I really think that by September 2008 Lenihan was playing Russian roulette with live amo in over half the chambers.

Noreen1 wrote: »

I noticed Noonan and Kenny rowing back on unilateral measures. I didn't quite expect them to roll over and play dead, though.:D

This is a fair point and comes back to the living experiment we are a part of - the EU. Trichet can't control Merkel, Merkel can't control Trichet, Trichet controls interest rates for the whole but national governments are left to counter balance interest rates through fiscal policy which our government monumentally failed to do. I'm very pro EU, but it has problems in that responsibility is split in too many ways and things fall between the gaps, and having seen so much fall between the gaps it is now trying to fix things while arguably making them worse.

Noreen1 wrote: »

It may be fair to say that those among the electorate who voted for FF were unwise. However, 40%+ of the electorate is not the entire electorate, and it certainly is not the younger generation, who had no say in any of this, yet will be expected to pay for it, both in taxes, and in lost opportunities.

Therefore, it is fair to say that some of the electorate are partly responsible, just as some people took out ridiculous loans/mortgages.
The majority, however, are not responsible - yet, they are expected to pay for the debts of private speculators, and supposed to feel responsible (guilty?) for these debts, also.

Ehh - no!

I'm with you in terms of never voting FF, in terms of being debt free because I thought it was a bubble etc.

However, the problem with democracy is that all the people get a say, not just the clever people, not just the young people, all the people over 18.

I can say no more than to quote our illustrious compatriot George Bernard Shaw

Democracy substitutes election by the incompetent many for appointment by the corrupt few.

Democracy is a device that ensures we shall be governed no better than we deserve.

The latter one is particularly apt for us n'est pas? We as a society need to change, our political system needs to change, we need to learn from, and correct our mistakes.

Noreen1

beeftotheheels wrote: »

Alas, you would hope so, but it ain't always the case - Tony Blair led the UK into a war the majority of the people wanted no part of. The people's only recourse in a democracy is to eject him from power in the next general election..

Part of the problem, imo. We need a facility where we can eject the Government, in extraordinary circumstances.

beeftotheheels wrote: »

I actually don't think Lenihan had many choices, and I'm pretty sure that some of the other choices open to him would have been as disastrous. The problem is, with 20 20 hindsight we know the decision he made was a bad one, but we don't know if the other options could have been worse. So commentators can happily shout from the sidelines saying their ideas would have worked out better safe in the knowledge that the veracity of their claims cannot be tested since we cannot go back in time.

I really think that by September 2008 Lenihan was playing Russian roulette with live amo in over half the chambers.

In fairness, it doesn't need huge levels of intelligence to understand that you neither sign an unread contract, or stand as guarantor for an unspecified sum of money. That, imo. was, at best, extraordinary incompetence.

beeftotheheels wrote: »

This is a fair point and comes back to the living experiment we are a part of - the EU. Trichet can't control Merkel, Merkel can't control Trichet, Trichet controls interest rates for the whole but national governments are left to counter balance interest rates through fiscal policy which our government monumentally failed to do. I'm very pro EU, but it has problems in that responsibility is split in too many ways and things fall between the gaps, and having seen so much fall between the gaps it is now trying to fix things while arguably making them worse.

True. I'm not particularly pro-EU, though, because I dislike the idea of lobbyists being able to skew political decisions in favour of the highest bidder.

beeftotheheels wrote: »

I'm with you in terms of never voting FF, in terms of being debt free because I thought it was a bubble etc.

However, the problem with democracy is that all the people get a say, not just the clever people, not just the young people, all the people over 18.

I can say no more than to quote our illustrious compatriot George Bernard Shaw





The latter one is particularly apt for us n'est pas? We as a society need to change, our political system needs to change, we need to learn from, and correct our mistakes.

Yes, all the people get a say - and I would argue that all the people deserve a say.
If someone is not "clever" - does that mean they deserve to be ripped off?
I don't think so. People pay for expertise, through taxes, to ensure the countrys finances are managed effectively.

For Democracy to work, the primary requirement is for ethical, honest Politicans, who are dedicated to representing all of the people - not the privileged few.
This is where our Political system has failed us - not because there are no honest, ethical politicians - but because the system chose to leave them on the sidelines...........

Prakari

Major boom and busts have been happening for centuries across a range of economically and socially diverse societies. The causes and solutions will not be found in analysing any one economic crash but determining the factors common to each crash.

beeftotheheels

Noreen1 wrote: »

Part of the problem, imo. We need a facility where we can eject the Government, in extraordinary circumstances.

We really don't. If we had had the power to remove our government when the EU/ IMF came to town what would have happened? Chaos. No one to sign the agreement, the markets would have gone frantic, and we would probably have defaulted. You may argue that we should have defaulted but bear with me. Three years later, with our economy sound we try to go back to the bond markets, who by now are aware that the Irish people can repudiate any decision made by the Irish government and turf them out at will. They will price this risk into the interest rate they lend to us at, what's to stop the Irish people deciding not to repay the next loan after all?

The Irish government want to sign up to the "Free choc-ices for everyone" treaty and are told they cannot because the electorate can repudiate it at will.

We become a pariah in the international community because there is no sense of certainty that our government can act for us. Would you sign a contract to buy a house of Joe Bloggs if it was possible he had no right to sell you that house and that giving him the purchase price did not necessarily mean you owned the house?

This is why most developed countries temper democracy in the name of certainty.

It is abused by governments, of course it is. But the certainty aspect has a value. That we've just come through a horrific example of the excesses does not mean we throw the baby out with the bathwater. We got rid of FF. We should be vigilant of their replacements. We should have no qualms about turfing them out next time around if they don't do their jobs. But we have to have a government which is actually capable of functioning.

Noreen1 wrote: »

For Democracy to work, the primary requirement is for ethical, honest Politicans, who are dedicated to representing all of the people - not the privileged few.
This is where our Political system has failed us - not because there are no honest, ethical politicians - but because the system chose to leave them on the sidelines...........

So we change the system. We hold our politicians to account. But every time the people of Tipp North vote the message is sent that we are not prepared to do this if it impinges on local interests. Change society so we no longer accept "low levels of corruption", all corruption is wrong and should be punished. And change the voting system to negate the issues around parish pump politics.

Noreen1

beeftotheheels wrote: »

We really don't. If we had had the power to remove our government when the EU/ IMF came to town what would have happened? Chaos. No one to sign the agreement, the markets would have gone frantic, and we would probably have defaulted. You may argue that we should have defaulted but bear with me. Three years later, with our economy sound we try to go back to the bond markets, who by now are aware that the Irish people can repudiate any decision made by the Irish government and turf them out at will. They will price this risk into the interest rate they lend to us at, what's to stop the Irish people deciding not to repay the next loan after all?

The Irish government want to sign up to the "Free choc-ices for everyone" treaty and are told they cannot because the electorate can repudiate it at will.

We become a pariah in the international community because there is no sense of certainty that our government can act for us. Would you sign a contract to buy a house of Joe Bloggs if it was possible he had no right to sell you that house and that giving him the purchase price did not necessarily mean you owned the house?

This is why most developed countries temper democracy in the name of certainty.

It is abused by governments, of course it is. But the certainty aspect has a value. That we've just come through a horrific example of the excesses does not mean we throw the baby out with the bathwater. We got rid of FF. We should be vigilant of their replacements. We should have no qualms about turfing them out next time around if they don't do their jobs. But we have to have a government which is actually capable of functioning.

I think we really do. If we had the option to remove our Government very shortly after the Banks were guaranteed, then we'd be in a lot less trouble now, since the Sovereign would have less debt, and the markets would have the ability to distinguish between Sovereign and private debt.

Therefore, even if we had required a bailout, it would have been for less money.

To say that a people should never have the right to remove their elected Government in extraordinary circumstances, seems to me to place far too much blind faith in the system.

For example, what if, hypothetically, an unpopular Government decided to hold elections every 15 years, and to change the law to allow this? I'm aware that the Seanad is there to act as a balance - but suppose the Seanad could be persuaded/duped/rigged/abolished to allow this - do you think the people should have no option but to accept it?

Where there is any possibility that elected representatives can act in either a corrupt fashion, or act in a manner that is not in the interests of the electorate, then I believe that in extraordinary circumstances the electorate should have the power to demand a General Election.

beeftotheheels wrote: »

So we change the system. We hold our politicians to account. But every time the people of Tipp North vote the message is sent that we are not prepared to do this if it impinges on local interests. Change society so we no longer accept "low levels of corruption", all corruption is wrong and should be punished. And change the voting system to negate the issues around parish pump politics.

How do we change society?
I'm in favour of educating society, though I think society has received a rather rude education during the last few years, but setting out to change society is something that could have singularly nasty connotations.
eg. Who sets the direction of change, how is that change implemented, and what are the potential motives for such a change.

Changing the Political system would be a lot easier. Start by demanding that Politicians actually tell the truth in their election promises.:D
Fair enough, this would require access to the Dept. of Finance by opposition parties before they set our their manifestos - that shouldn't be too difficult.

Add a clause whereby the electorate can remove any td from office for dishonesty/corruption and they may just get the message that people are serious about accountability.

I haven't given your idea about our voting system a great deal of thought, tbh, but my instinctive reaction is that the calibre of the Politician/Political party is more of an issue than the means of electing them - to begin with, at least.

beeftotheheels

Noreen1 wrote: »

I think we really do. If we had the option to remove our Government very shortly after the Banks were guaranteed, then we'd be in a lot less trouble now, since the Sovereign would have less debt, and the markets would have the ability to distinguish between Sovereign and private debt.

Are you talking about an impromptu revolution (which we could have had and didn't), or a legislative avenue? If the latter, who is to define the extraordinary circumstances when we can remove our Government? Do we have to take them to the Supreme Court to get rid of them which could take years? If we have such an avenue such that we can rescind the actions of our government if we don't like them, no one in the international community will play with us any more.

Noreen1 wrote: »

For example, what if, hypothetically, an unpopular Government decided to hold elections every 15 years,and to change the law to allow this? I'm aware that the Seanad is there to act as a balance - but suppose the Seanad could be persuaded/duped/rigged/abolished to allow this - do you think the people should have no option but to accept it?

The president would not be able to sign such bill since it clearly breaches the constitution. Bunreacht na hÉireann Art 16(5) provides

The same Dáil Éireann shall not continue for a longer period than seven years from the date of its first meeting: a shorter period may be fixed by law.

Noreen1 wrote: »

How do we change society?

By each man and woman in the country learning the lessons of this debacle, and taking it upon themselves to be more vigilant of our politicians in future, to be less tolerant of cronyism and corruption than we have been in the past.

Noreen1 wrote: »

Changing the Political system would be a lot easier. Start by demanding that Politicians actually tell the truth in their election promises.:D
Fair enough, this would require access to the Dept. of Finance by opposition parties before they set our their manifestos - that shouldn't be too difficult.

Add a clause whereby the electorate can remove any td from office for dishonesty/corruption and they may just get the message that people are serious about accountability.

I haven't given your idea about our voting system a great deal of thought, tbh, but my instinctive reaction is that the calibre of the Politician/Political party is more of an issue than the means of electing them - to begin with, at least.

You're forgetting that we have produced some excellent fair minded politicians, who were in the game for the good they could do rather than for personal benefit over the years, from the likes of Mary Robinson, through Garrett (shame he didn't manage to balance the budget). I think increased vigilance along with an amendment to our voting system could get us headed in the right direction.

I agree we need to increase censure for politicians. Not sure we the electorate should do it (the people of North Tipp wouldn't censure Lowry), but allow a majority of the Dáil to remove him, or allowing the president ask for his removal if he committed certain clearly laid out infractions makes sense.

Idbatterim

imagine europe said they would write off a large amount of debt, I still think upper and mid PS salaries and pensions are too high, too many not paying PAYE, too many taking p*ss on welfare... the beloved pensioners havent been hit, 3rd level fees should be reintroduced... I hope the IMF sort out as much as possible of the "p*ss taking" before there is any talk of restructuring or interest rate reduction etc...

Inverse to the power of one!

Noreen1 wrote: »

However, I know of no initiative a citizen can take to achieve the necessary reform.(apart from petitioning our politicians)

There really is no easy single answer to this one, but yet this is where the society must look to itself and reflect the changes it desires. In this respect I can only make suggestions:

*That we as individuals become intolerant of all unfair behavior in this country, no more admiring the chancers, rules are there not to be avoided but to be respected, if you don't agree with the rule then society expects you to work to change it not circumvent it.

*That we look towards new political avenues and parties rather then expect the current structures to carry us through.

* That we look to become more industrious, self-reliant and that a sense of pride emerges in not taking handouts.

* That a common sense of society arises such that in the crises such as the current one people worry less about denying their part and worry more about how we may resolve the situation as fast a possible.

* That we look less to politicians and govt to solve our woes.

At this age, I shouldn't be so ff'in idealistic (normally quite a cynic), yet despite myself I can only see Ireland rescuing itself by changing at it's very core.

What can the individual do?.....not much, but more then you'd suspect at the same time, and if we don't embrace this then we become the non-participants of history.