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ERSI economist leaves and advises "Get out now"

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Comments

  • Closed Accounts Posts: 7,230 ✭✭✭Solair


    It's really hard to know what to. Do. However, I'm just so sick of the waffle and uncertainty that I think I'm definitely off later this year. I don't mind paying higher taxes, but not when they're coupled with ever decreasing public services.


  • Registered Users, Registered Users 2 Posts: 2,892 ✭✭✭Head The Wall


    I paid around 5% of my income to the govt last year via Income Tax, PRSI, USC etc. I have moved to London and will be earning the same wages here but in sterling and I will be paying 20%. I don't mind the increase because at least here I know I get proper services for it. At home you know it would just be pi55ed up against the wall


  • Closed Accounts Posts: 5,731 ✭✭✭Bullseye1


    I'm beginning to think he is right. 10 more years of this is 10 years too long.


  • Closed Accounts Posts: 7,410 ✭✭✭bbam


    Bad news for those of us not in any position to move anywhere...
    It's hard to know if one should knuckle down and try harder to keep afloat or just give up, sit back and see what happens...
    Long hard hours away from the kids and then not knowing if it's going to be enough :(


  • Closed Accounts Posts: 5,731 ✭✭✭Bullseye1


    bbam wrote: »
    Bad news for those of us not in any position to move anywhere...
    It's hard to know if one should knuckle down and try harder to keep afloat or just give up, sit back and see what happens...
    Long hard hours away from the kids and then not knowing if it's going to be enough :(

    I feel bad for people trying to bring up a family and stuck in negative equity. There is no clear route out of this mess even with increased taxes. The unions have the government over a barrel so don't expect any significant reduction in public expenditure. Socialism is finishing the job capatilism started.


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  • Registered Users, Registered Users 2 Posts: 182 ✭✭Taxi Drivers


    I paid around 5% of my income to the govt last year via Income Tax, PRSI, USC etc. I have moved to London and will be earning the same wages here but in sterling and I will be paying 20%. I don't mind the increase because at least here I know I get proper services for it. At home you know it would just be pi55ed up against the wall

    What proper services are you now getting?


  • Registered Users, Registered Users 2 Posts: 18,982 ✭✭✭✭murphaph


    What proper services are you now getting?
    I'd imagine he includes the ability to visit a GP without having to fork out €50+ for the privilege. Stuff like that.


  • Registered Users, Registered Users 2 Posts: 2,892 ✭✭✭Head The Wall


    Public transport that you can actually use and rely on. 5 minutes from a tube station with carriages coming every three minutes, buses every 6 minutes outside my door.

    Proper infrastructure, internet, good customer service from the Jobcentre, DVLA, NHS.


  • Registered Users, Registered Users 2 Posts: 2,207 ✭✭✭a148pro


    I heard he left because they wouldn't give him an album deal


  • Moderators, Motoring & Transport Moderators Posts: 6,524 Mod ✭✭✭✭Irish Steve


    Having seen a brief clip of the individual concerned on one of the news programs, I'm not sure if we will even miss him. He looked as if he would be very comfortable working very closely with the rest of the "bearded wonders" from the Social compact Trade Union representatives. We've seen what they were capable of over the last while, and I've yet to be impressed by the pontification that comes out of the ESRI.

    Shore, if it was easy, everybody would be doin it.😁



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  • Registered Users, Registered Users 2 Posts: 12,996 ✭✭✭✭Sand


    Having seen a brief clip of the individual concerned on one of the news programs, I'm not sure if we will even miss him. He looked as if he would be very comfortable working very closely with the rest of the "bearded wonders" from the Social compact Trade Union representatives. We've seen what they were capable of over the last while, and I've yet to be impressed by the pontification that comes out of the ESRI.

    Well, if you were interested in having an informed opinion on the individual (hey, lets go nuts) you could do worse than venturing over to irisheconomy.ie and searching for posts started by Richard Tol as he posted very often over there on enviromental issues/policies. He ruffled quite a few feathers amongst those who adhered to the idea that doing anything at all was better than doing nothing and various other theological positions. Id think that on balance we will miss him because he tended to be pretty plain speaking when he criticised bad policymaking in Ireland.

    His parting shot at the ERSI is pretty blunt for starters.


  • Registered Users, Registered Users 2 Posts: 7,246 ✭✭✭amacca


    He wasn't exactly pro trade union either was he?

    I quite liked him and I felt a lot of what he had to say made sense.....I also felt he tended to speak from a strictly logical standpoint and didn't seem to engage in banging his own drum too often


  • Closed Accounts Posts: 7,570 ✭✭✭Ulysses Gaze


    I'd imagine someone from the ESRI will be on Morning Ireland tomorrow in damage limitation mode. Wouldn't be surprised if they try and get a few digs in on Tol while they're at it.

    10 years is what a lot of people I know in business have been saying, although not out loud.

    We're hamstrung by an obsession with property which means we won't remove rent reliefs and upward only rent reviews and a lack of cojones to take on the PS unions.

    It leads to one hypothesis - a long, long depressive cycle.


  • Registered Users, Registered Users 2 Posts: 182 ✭✭Taxi Drivers


    murphaph wrote: »
    I'd imagine he includes the ability to visit a GP without having to fork out €50+ for the privilege. Stuff like that.

    How often do people here have to wait two days (and sometimes weeks) to see a GP?

    http://www.dailymail.co.uk/health/article-2039833/Wait-weeks-GP-Some-patients-face-delays-fortnight-appointment-family-doctor.html


    The 48-hour waiting time target for a GP visit was scrapped in July 2010.

    http://www.bbc.co.uk/news/10364566


  • Registered Users, Registered Users 2 Posts: 1,511 ✭✭✭saywhatyousee


    Public transport that you can actually use and rely on. 5 minutes from a tube station with carriages coming every three minutes, buses every 6 minutes outside my door.

    Proper infrastructure, internet, good customer service from the Jobcentre, DVLA, NHS.

    Bit of a difference though London has 8 million people its easier to provide better standard of public transport when there is more people.Never had an issue when dealing with any Irish government agency.No issue's with internet either i live in Sligo and i have 100mb broadband.


  • Registered Users, Registered Users 2 Posts: 1,588 ✭✭✭femur61


    What proper services are you now getting?


    I've lived in London so I can speak for the poster. Doctors visits free, dentist free, better infrastructure, better telecommunications. My taxes were not paying for an inflated PS.

    TBH if I didn't have family here I'd move.


  • Closed Accounts Posts: 13,992 ✭✭✭✭gurramok


    How often do people here have to wait two days (and sometimes weeks) to see a GP?

    Flash that 60quid cash and you can be seen straight away. If you don't have it and you work, tough.


  • Registered Users, Registered Users 2 Posts: 2,909 ✭✭✭sarumite


    Bit of a difference though London has 8 million people its easier to provide better standard of public transport when there is more people.Never had an issue when dealing with any Irish government agency.No issue's with internet either i live in Sligo and i have 100mb broadband.

    I live partly in Dublin and partly in Gothenburg. Gothenburg has much better public transport than dublin and has a similar population size over a larger area.


  • Registered Users, Registered Users 2 Posts: 532 ✭✭✭Fergus


    How often do people here have to wait two days (and sometimes weeks) to see a GP?

    How often do people here skip going to the GP and hope for the best because they just don't have 60 Euro lying around?


  • Closed Accounts Posts: 2,491 ✭✭✭Yahew


    Public transport that you can actually use and rely on. 5 minutes from a tube station with carriages coming every three minutes, buses every 6 minutes outside my door.

    Proper infrastructure, internet, good customer service from the Jobcentre, DVLA, NHS.

    not living in the same UK as me then, or not living there very long. How come you were paying 5% in Ireland in any case.


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  • Closed Accounts Posts: 2,491 ✭✭✭Yahew


    Having seen a brief clip of the individual concerned on one of the news programs, I'm not sure if we will even miss him. He looked as if he would be very comfortable working very closely with the rest of the "bearded wonders" from the Social compact Trade Union representatives. We've seen what they were capable of over the last while, and I've yet to be impressed by the pontification that comes out of the ESRI.

    The ESRI were predicting 4% p/a growth from 2006-2015. In predicting the GDP they are out by30-40%


  • Registered Users, Registered Users 2 Posts: 2,512 ✭✭✭Ellis Dee


    Easy for him (a Dutchman) to talk with a well-paid Professor's post in England to go to. And can he be certain that ten years of austerity lie ahead? After all, he's an economist, and if they were really the hot-sh1t-on-a-stick visionaries that they like to believe they are, our country would hardly have been led blindly into the morass it is now in.:rolleyes::rolleyes:

    Maybe it would be better in the long run to stick it out and try to get the country back on its feet again.:)


  • Registered Users, Registered Users 2 Posts: 7,246 ✭✭✭amacca


    Ellis Dee wrote: »

    Maybe it would be better in the long run to stick it out and try to get the country back on its feet again.:)

    not for him it wouldn't be imo

    obviously one cant predict the future (who knows what disaster, scientific discovery etc could change things) but the idea that there could be another 10 years of austerity in store for Ireland is definitely not beyond the realms of possibility

    also the idea that one should take information provided by the ESRI with more than a grain of salt isn't unreasonable either


  • Posts: 0 [Deleted User]


    Ellis Dee wrote: »
    Easy for him (a Dutchman) to talk with a well-paid Professor's post in England to go to. And can he be certain that ten years of austerity lie ahead? After all, he's an economist, and if they were really the hot-sh1t-on-a-stick visionaries that they like to believe they are, our country would hardly have been led blindly into the morass it is now in.:rolleyes::rolleyes:

    Maybe it would be better in the long run to stick it out and try to get the country back on its feet again.:)

    most of the economists wheeled out on tv worked for the banks, i remember them on TV some introduced on RTE as experts when some didnt even have qualifications.

    Tol just explained why state employed economists get it wrong all the time too.....because they are not independent and simply tow the government line.


  • Registered Users, Registered Users 2 Posts: 1,246 ✭✭✭daltonmd


    I listened to this guy giving an interview yesterday morning. He said, I'm paraphrasing here, that the ERSI was partly funded by certain organisation to conduct reports on their behalf - he said that the questions that really needed to be asked about this country were not asked for this reason. Giving his reasons for leaving he said that he had a young family and he did not trust this government to invest in education , he also said that he had taken a 32% paycut and while his job was secure, his wifes was not. On making enquiries he is of the opinion that his family will have a better standard of life in the UK. He said that it should be remembered that in order for this countryto reach the target deficit by 2015, that after that we start repaying the loans. Personally i found him very frank, not scathing of this country or indeed his employer, he was simply stating the facts.


  • Registered Users, Registered Users 2 Posts: 951 ✭✭✭robd


    I was lectured in economics by a deputy head from Central Bank. To say they towed the company line was an under statement. Remember the Central Bank is part of the ECB and thus not controlled by Irish Government at all. ESRI can only be magnitudes worse given they are really just a government funded quango.

    The most I could get with some of my very accurate pre-property crash predictions was a wry smile. Said person did admit that Central Banks line was to maintain stability which basically meant to water down every report and not scare the public or cause huge moves one way or the other.


    Ridiculous but there you go. That's the system.


  • Registered Users, Registered Users 2 Posts: 724 ✭✭✭Park Royal


    Guess if Charles Haughey had not fecked up the plans CIE had for Temple Bar,

    transport would perhaps be better in Dublin....??


  • Registered Users, Registered Users 2 Posts: 2,892 ✭✭✭Head The Wall


    Yahew wrote: »
    How come you were paying 5% in Ireland in any case.

    People don't pay enough taxes in Ireland thats why. Check your pay slip or deloitte's tax calculator, there's some truth to the story about 50% of the workforce paying no taxes.


  • Registered Users, Registered Users 2 Posts: 7,333 ✭✭✭Pete_Cavan


    Ellis Dee wrote: »
    Easy for him (a Dutchman) to talk with a well-paid Professor's post in England to go to. And can he be certain that ten years of austerity lie ahead? After all, he's an economist, and if they were really the hot-sh1t-on-a-stick visionaries that they like to believe they are, our country would hardly have been led blindly into the morass it is now in.:rolleyes::rolleyes:
    This is problem with this country, we would rather get our economics from media whores like Hobbs and McWilliams and then dismiss a guy with facial hair as someone who "would be very comfortable working very closely with Trade Union representative". Hobbs and McWilliams are soundbite merchants only interested in promoting their latest book/tv programme/seminar. And because very few economists predicted the banking crisis we will now dismiss all of them, even if they are experts in Environmental & Natural Resources and Energy, not banking.

    I have a lot of respect for Tol and he is exactly what we need in the ESRI - someone who owes nothing to no one and who is not afraid to speak his mind. Now he has had enough of being in the governments pocket and we will be left with spineless economists who will only be rolled out to back up the government because they know where their next pay cheque is coming from.

    I guess we want the same from out economists as we do from our politicians - people who will tell us what we want to hear but not what we need to hear.


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  • Moderators, Motoring & Transport Moderators Posts: 6,524 Mod ✭✭✭✭Irish Steve


    Pete_Cavan wrote: »
    This is problem with this country, we would rather get our economics from media whores like Hobbs and McWilliams and then dismiss a guy with facial hair as someone who "would be very comfortable working very closely with Trade Union representative". Hobbs and McWilliams are soundbite merchants only interested in promoting their latest book/tv programme/seminar. And because very few economists predicted the banking crisis we will now dismiss all of them, even if they are experts in Environmental & Natural Resources and Energy, not banking.

    If we had a few more experts in Environment and the like, we'd not be in the situation where a Carbon tax is not really a carbon tax, it's a consumption tax because there are no viable alternatives at the moment, and some of the supposed alternatives are only suitable for young people with a lot of spare storage space in their property, I don't fancy the idea of lugging 25 Kg sacks of woodchip around given the quantity required, amd storing it will be a nightmare compared to the equivalent in oil.

    Maybe the clip RTE showed was intended to be slightly disrespectful, he certainly didn't come across at all well on that clip. I tried looking at the economics site pointed to by another poster, and didn't find any articles by him that got my attention.
    I have a lot of respect for Tol and he is exactly what we need in the ESRI - someone who owes nothing to no one and who is not afraid to speak his mind. Now he has had enough of being in the governments pocket and we will be left with spineless economists who will only be rolled out to back up the government because they know where their next pay cheque is coming from.

    And maybe that's the problem. The brief clip left the impression of a man that is not a public speaker, he may well be good at producing the reports and working with the information, but not good at then standing up and presenting it, and both skills are needed for people in the public eye.
    I guess we want the same from out economists as we do from our politicians - people who will tell us what we want to hear but not what we need to hear.

    Surprise surprise, NO, we need politicians that will be honest, because a lot more of us than they realise have seen through the sham, and pretense, and all the other bullsh1t that we've been fed with over the years, and we're hoping that maybe they will have the courage to actually do some of the things that were proposed in the manifesto documents. We need, desperately. a new direction that's going to take Ireland into the future, it's not communism, that's been proved to be a busted flush, and so has the form of capitalism that's been tried in recent years, all that turned out to be was a different form of communism without dictators that still ended up with a select few getting the majority of the benefits that were there. Somewhere between the 2 there is a way to run things that doesn't end up paying obscene bonuses to people that have done little more than move electrons around a computer system or two, and things like the present medical system where too many people spend time working out which insurance company is paying for which paper napkin is also absurd. EU rules on the shape, size colour curvature etc of bananas (or cucumbers, or cabbages or whatever) are exactly that, rules for a banana republic, which we can neither justify or afford. A company I do work for has a small cleaning device that uses about 20 Litres of Kerosene. It's serviced every couple of months to replace the solvent, and the local authority charge for the paperwork relating to the "disposal" of the kerosene is €30. That's more than the value of the kerosene, and an absurd charge for what's involved, and we're full of all manner of similar regulations that are only providing work for people that might otherwise be unemployable.

    Why does an NCT serve as an acceptable proof of roadworthiness for a car, but a DOE certificate not provide the same for a commercial equivalent, and cost an extra €13 to change a certificate of test for an almost identical certificate of roadworthiness. That's just a jobs for the boys job at the relevant local authority to justify their existence.

    Need a new tax? How about putting a serious level of tax on imported bottled water. Bottled water is needed at the moment because the quality of tap water is sometimes questionable, but imported from all over the place, with the energy costs of shipping it to Ireland? That's definitely a luxury, so why not tax that significantly.

    Plenty of other areas that could be discussed as well, but danger of tl;dr if we're not careful, even in the politics forum, the attention span is sometimes limited.

    Shore, if it was easy, everybody would be doin it.😁



  • Closed Accounts Posts: 2,491 ✭✭✭Yahew


    Pete_Cavan wrote: »
    This is problem with this country, we would rather get our economics from media whores like Hobbs and McWilliams and

    McWilliams called the crash, years before the crash. He explained why too. He didn't just predict a recession, but the causes of it, and the trajectory of house prices. The problem isn't that he was a media whore but that nobody listened to him.
    Need a new tax? How about putting a serious level of tax on imported bottled water. Bottled water is needed at the moment because the quality of tap water is sometimes questionable, but imported from all over the place, with the energy costs of shipping it to Ireland? That's definitely a luxury, so why not tax that significantly.

    Any import tax would have to be for non-European water, and would cause a retaliation.


  • Registered Users, Registered Users 2 Posts: 6,455 ✭✭✭positron


    No issue's with internet either i live in Sligo and i have 100mb broadband.

    I live in Drogheda and I struggle to get 2.4 mbps while paying for 8 mbps.

    I suppose what I am trying to say is that anecdotal evidence ≠ fact.


  • Closed Accounts Posts: 2,491 ✭✭✭Yahew


    A rural area close to an exchange will do better.


  • Registered Users, Registered Users 2 Posts: 2,912 ✭✭✭pog it


    Ellis Dee wrote: »
    Easy for him (a Dutchman) to talk with a well-paid Professor's post in England to go to. And can he be certain that ten years of austerity lie ahead? After all, he's an economist, and if they were really the hot-sh1t-on-a-stick visionaries that they like to believe they are, our country would hardly have been led blindly into the morass it is now in.:rolleyes::rolleyes:

    Maybe it would be better in the long run to stick it out and try to get the country back on its feet again.:)

    Really? And how are you planning to manage that, then?


  • Registered Users, Registered Users 2 Posts: 7,333 ✭✭✭Pete_Cavan


    Yahew wrote: »
    McWilliams called the crash, years before the crash. He explained why too. He didn't just predict a recession, but the causes of it, and the trajectory of house prices. The problem isn't that he was a media whore but that nobody listened to him.
    McWilliams may have been right about the property bubble (and he wasnt the only one) but it was he who convinced Brian Lenihan to guarantee the bondholders against the advice of the civil servants. What John Gormley refered to as the "the David McWilliams option". The problem isn't that he was a media whore but that Brian listened to him.

    The point that Tol made, and which I was defending, is that the ESRI should be free to speak out, not somewhere where “If you violate policy and upset people, you can get into trouble". Of course that is largely irrelevant here as people would rather listen to someone who is trying to sell them a book, after all if they can write a best seller they must be right, right? Ironically, Tol himself put it best when he said Media exposure should be linked with expertise – the mouth should not be larger than the brain (see tables here).


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  • Closed Accounts Posts: 2,491 ✭✭✭Yahew


    Pete_Cavan wrote: »
    McWilliams may have been right about the property bubble (and he wasnt the only one) but it was he who convinced Brian Lenihan to guarantee the bondholders against the advice of the civil servants. What John Gormley refered to as the "the David McWilliams option". The problem isn't that he was a media whore but that Brian listened to him.

    The point that Tol made, and which I was defending, is that the ESRI should be free to speak out, not somewhere where “If you violate policy and upset people, you can get into trouble". Of course that is largely irrelevant here as people would rather listen to someone who is trying to sell them a book, after all if they can write a best seller they must be right, right? Ironically, Tol himself put it best when he said Media exposure should be linked with expertise – the mouth should not be larger than the brain (see tables here).

    This kind of argument " would rather listen to someone who is trying to sell them a book" is designed to make you feel smarter than "people here". You are not. The evidence is lacking. Logically somebody's ability to write a book is orthogonal to their intellect.

    Its true that most commentators in public are not necessarily the smartest, but in the case of McWilliams, on the property bubble he was right. ( And if the even smarter are shy, that is their fault, not his). Your attitude is simple - if it is populist it is stupid, if not well known it is smart. Its a sophomoric argument, of little use.

    With regard to McWilliams he ranted against the bubble and thats all you have to know. He even turned up on the Late Late show to explain the bubble, to convince first time buyers they were going to be shagged if they bought a house, and still the thing continued. But that was useful, far more useful than complaining in the closed doors of the ESRI.

    As for Tol, I think you are impressed by his beard and by his ever say die attitude to the crisis now that the crisis is here; however the government was basing it's spending patterns on ESRI reports, and Tol presumably contributed to these reports. He is now leaving after contributing to a body which - and he now admits after a 30% pay cut - is slightly political, and too timid; and he is now warning about the bust and the ESRI's timidity, whilst saying nothing about that during the boom. Thats as useful as tits on a bicycle.

    If Tol came out with a report saying McWilliams ( et al.) were correct during the boom, where is it? Why not resign then? If not its just bandwagon jumping.

    Tol is defending the ESRI in that piece ( he was a member then). Here is what McWillaims replied.


  • Closed Accounts Posts: 21,727 ✭✭✭✭Godge


    amacca wrote: »
    He wasn't exactly pro trade union either was he?

    I quite liked him and I felt a lot of what he had to say made sense.....I also felt he tended to speak from a strictly logical standpoint and didn't seem to engage in banging his own drum too often


    His main publication interests seem to be climate change, vegetarianism and research output. Hardly mainstream analysis of the Irish economy.


  • Closed Accounts Posts: 4,556 ✭✭✭Nolanger


    daltonmd wrote: »
    “Ireland is facing 10 years of austerity. Leaving Ireland is the best thing you can do at the moment if you are responsible for a young family.”
    Thought more people knew this already. Only fools think it wil be over in 2015.


  • Registered Users, Registered Users 2 Posts: 7,333 ✭✭✭Pete_Cavan


    Yahew wrote: »
    This kind of argument " would rather listen to someone who is trying to sell them a book" is designed to make you feel smarter than "people here". You are not. The evidence is lacking. Logically somebody's ability to write a book is orthogonal to their intellect.

    Its true that most commentators in public are not necessarily the smartest, but in the case of McWilliams, on the property bubble he was right. ( And if the even smarter are shy, that is their fault, not his). Your attitude is simple - if it is populist it is stupid, if not well known it is smart. Its a sophomoric argument, of little use.
    First of all, the point I was making about McWilliams is that people would rather listen to squeaky clean Dave and not the guy with the big beard. Im not trying to make myself feel smarter, I just dont see him as the be-all and end-all of economics. It may have been better if the government had listened to McWilliams in the early 2000s, but how do you feel about Lenny listening to him in the run up to the bank guarantee?
    With regard to McWilliams he ranted against the bubble and thats all you have to know. He even turned up on the Late Late show to explain the bubble, to convince first time buyers they were going to be shagged if they bought a house, and still the thing continued. But that was useful, far more useful than complaining in the closed doors of the ESRI.
    Tol only joined the ESRI in August 2006 so he has nothing to do with policies during the boom. And as I already said, he is involved with energy and environmental economics, not property or banking.
    As for Tol, I think you are impressed by his beard and by his ever say die attitude to the crisis now that the crisis is here; however the government was basing it's spending patterns on ESRI reports, and Tol presumably contributed to these reports. He is now leaving after contributing to a body which - and he now admits after a 30% pay cut - is slightly political, and too timid; and he is now warning about the bust and the ESRI's timidity, whilst saying nothing about that during the boom. Thats as useful as tits on a bicycle.
    Err, he is the guy that does question government policy, most recently the plan to sell a minority share in ESB. It is very worrying to me that he decides to leave the country because he doesnt believe in the independence of the state sponsored think-tank he works for. The fact that he is willing to put his money where his mouth and take a pay cut to leave the country because he feels his family will have a better life elsewhere (despite the lower income) is not good. But sure what harm, if there is one thing we dont have enough of in this country when it comes to formulating government policy, its yes men.
    If Tol came out with a report saying McWilliams ( et al.) were correct during the boom, where is it? Why not resign then? If not its just bandwagon jumping.

    Tol is defending the ESRI in that piece ( he was a member then). Here is what McWillaims replied.
    The ESRIs forecasts being inaccurate, thats what Tol was getting at - he criticized the independence of the ESRI with respect to its funding sources and the conclusions of its research. It seems the government form its own policies, assisted by various vested interests of course, and the ESRI is used to back it up.


  • Registered Users, Registered Users 2 Posts: 7,008 ✭✭✭not yet


    What proper services are you now getting?

    Do you ever give it a rest............


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  • Registered Users, Registered Users 2 Posts: 7,333 ✭✭✭Pete_Cavan




  • Registered Users, Registered Users 2 Posts: 182 ✭✭Taxi Drivers


    Yahew wrote: »
    Its true that most commentators in public are not necessarily the smartest, but in the case of McWilliams, on the property bubble he was right. ( And if the even smarter are shy, that is their fault, not his). Your attitude is simple - if it is populist it is stupid, if not well known it is smart. Its a sophomoric argument, of little use.

    With regard to McWilliams he ranted against the bubble and thats all you have to know. He even turned up on the Late Late show to explain the bubble, to convince first time buyers they were going to be shagged if they bought a house, and still the thing continued. But that was useful, far more useful than complaining in the closed doors of the ESRI.

    McWilliams went on The Late Late Show in 1999. In the third quarter of 1999 the national average house price was €137,211 based on the PTSB/ESRI house price index. Although this index was ceased at the end of 2010 it has been inferred using the CSO House Price Index that the national average house price in November 2011 was €168,669 (courtesy of Namawinelake).

    I have no idea where prices will go in the future (probably lower) but since McWilliams made his forecast of doom in 1999 house prices are 23% higher.

    If in July 1999 an "average" couple had bought that €137,211 "average" house with a 10% deposit and a mortgage of 4.5% over 20 years they would have an outstanding mortgage of €59,483. The couple would now have over €100k of equity in their house.

    Over the 11.5 years since they will have made €53,282 of interest payments at an average of €386 per month. Over the next 8.5 years they will be due to pay €10,730 of interest. Over the full 20 years the average monthly interest bill will have been €267 a month (64,012 total). The rent equivalent for the same house would definitely average more than €267 a month over the same period.

    After the 20 years they will made €137,211 capital payments (€13,721 deposit plus payments on €123,490 mortgage). At present they would have an asset worth €168,669. It will take a 56% drop from peak until the asset is equal to the amount they paid for it. By November 2011 prices are 46% off their peak. A drop of 56% or more is possible but it will take an even greater drop to offset the gains they have made under the 'rent versus interest' calculation.

    There are many other costs and benefits in the buy versus rent analysis but it is pretty clear that if someone in a position to buy in July 1999 had followed McWilliams's advice and not bought they are worse off by doing so.

    Of course, the same calculation from about July 2004 on (and possibly even earlier) would come out hugely in favour of the renting option but this "advice" was been provided for five years before that.


  • Registered Users, Registered Users 2 Posts: 18,982 ✭✭✭✭murphaph


    To be fair to McWilliams, he states that he did not advise Lenihan to simply blanket guarantee the bondholders etc.

    He maintains that he advised Lenihan to follow the Swedish model, which would have included setting up a bad bank and other measures.

    Guaranteeing the bondholders was only one prong in what was meant to be a multi pronged approach, so McWilliams says.


  • Closed Accounts Posts: 2,491 ✭✭✭Yahew


    McWilliams went on The Late Late Show in 1999. In the third quarter of 1999 the national average house price was €137,211 based on the PTSB/ESRI house price index. Although this index was ceased at the end of 2010 it has been inferred using the CSO House Price Index that the national average house price in November 2011 was €168,669 (courtesy of Namawinelake).

    I have no idea where prices will go in the future (probably lower) but since McWilliams made his forecast of doom in 1999 house prices are 23% higher.

    If in July 1999 an "average" couple had bought that €137,211 "average" house with a 10% deposit and a mortgage of 4.5% over 20 years they would have an outstanding mortgage of €59,483. The couple would now have over €100k of equity in their house.

    Over the 11.5 years since they will have made €53,282 of interest payments at an average of €386 per month. Over the next 8.5 years they will be due to pay €10,730 of interest. Over the full 20 years the average monthly interest bill will have been €267 a month (64,012 total). The rent equivalent for the same house would definitely average more than €267 a month over the same period.

    After the 20 years they will made €137,211 capital payments (€13,721 deposit plus payments on €123,490 mortgage). At present they would have an asset worth €168,669. It will take a 56% drop from peak until the asset is equal to the amount they paid for it. By November 2011 prices are 46% off their peak. A drop of 56% or more is possible but it will take an even greater drop to offset the gains they have made under the 'rent versus interest' calculation.

    There are many other costs and benefits in the buy versus rent analysis but it is pretty clear that if someone in a position to buy in July 1999 had followed McWilliams's advice and not bought they are worse off by doing so.

    Of course, the same calculation from about July 2004 on (and possibly even earlier) would come out hugely in favour of the renting option but this "advice" was been provided for five years before that.

    I was thinking of a later LLS appearance. However, impressive sums. You missed inflation, ( the real price of the house has dropped) but I suppose that does not affect their interest repayments.


  • Registered Users, Registered Users 2 Posts: 182 ✭✭Taxi Drivers


    murphaph wrote: »
    To be fair to McWilliams, he states that he did not advise Lenihan to simply blanket guarantee the bondholders etc.

    He maintains that he advised Lenihan to follow the Swedish model, which would have included setting up a bad bank and other measures.

    Guaranteeing the bondholders was only one prong in what was meant to be a multi pronged approach, so McWilliams says.

    From what I can tell we have followed virtually every element of the Swedish model. We didn't leave any "prong" of it out. We have a bad bank; two of them in fact! NAMA and the IBRC.


  • Registered Users, Registered Users 2 Posts: 182 ✭✭Taxi Drivers


    Yahew wrote: »
    I was thinking of a later LLS appearance. However, impressive sums. You missed inflation, ( the real price of the house has dropped) but I suppose that does not affect their interest repayments.

    That's a great point. I was thinking of it purely in terms of cash flow and nominal asset value.

    From the July 1999 to November 2011 the CPI has risen 40%. This does mean that an asset that has risen 23% in the same time has not beaten inflation. This does not affect the 'interest versus rent' calculation but does matter when trying to work out the return on the investment. I'll leave that to someone more able than me.


  • Registered Users, Registered Users 2 Posts: 3,259 ✭✭✭Good loser


    I was impressed with R Tol from the first time I saw him on TV.

    He is a big loss to the country.

    Reminded me of an impressive ESRI economist of the early 1970's Professor Keim-Caudle; think he was a Hungarian.


  • Registered Users, Registered Users 2 Posts: 3,553 ✭✭✭lmimmfn


    murphaph wrote: »
    I'd imagine he includes the ability to visit a GP without having to fork out €50+ for the privilege. Stuff like that.
    or having to spend 100 euro just to be seen in accident and emergency for follow on work from an issue you had abroad. Having said that you can save 40euro going to the midoc just for them to write you a letter to say you need to be seen, no bill of course if youre a dole head.

    First time in years i have witnessed what a disgrace the health system is in this country, especially the 2 teer system if raping workers and everything for free if youre on welfare. There are legit folk on welfare of course,im just making a general comment. I drove 35 miles today to get seen, told i had to pay 100euro, went to the work gp another 30 miles away for a referral, drove back and collected my xray scans without being seen because i had the kid to collect. Would be fine if i was on the dole and had nothing else to do.

    Richard Tol is right, stay in the country if youre middle or low income and want to be raped, leave otherwise. For all other groups its well worth staying.

    Ignoring idiots who comment "far right" because they don't even know what it means



  • Registered Users, Registered Users 2 Posts: 3,553 ✭✭✭lmimmfn


    From what I can tell we have followed virtually every element of the Swedish model. We didn't leave any "prong" of it out. We have a bad bank; two of them in fact! NAMA and the IBRC.
    no, the swedish model grabbed all the banks into public ownership, in ireland they pumped billions into banks trying to keep them afloat to keep investors and their shares happy, it got so bad they ended up taking them, no doubt once speculators had lots of fun making money off it in the meantime.

    Ignoring idiots who comment "far right" because they don't even know what it means



  • Registered Users, Registered Users 2 Posts: 182 ✭✭Taxi Drivers


    lmimmfn wrote: »
    no, the swedish model grabbed all the banks into public ownership, in ireland they pumped billions into banks trying to keep them afloat to keep investors and their shares happy, it got so bad they ended up taking them, no doubt once speculators had lots of fun making money off it in the meantime.

    I think you're talking fairy tales there.

    Sweden provided a blanket guarantee for all of its 114 banks. They nationalised two of them. They took some stakes in others but shareholders were not rendered null and void. No bondholders were burned.

    You can be fairly sure that virtually all of the shareholders in Irish banks were extremely unhappy that we put money into them. None of this was to "keep investors and their shares happy". The State contribution hugely diluted the ownership of shareholders.

    At the peak shares in the banks were worth a combined €60 billion. That is shareholders wealth that has been obliterated. Shareholders in IL&P were completely wiped out even though PTSB had no developer loan book and the €4 billion that the State has put in was not based on actual losses but on the projected losses from a consultancy report.

    This injection was more than the market capitalisation of the group so the State nationalised the company. Shareholders were wiped out because the State put money in. It did not keep them happy.

    The shareholders would have been far happier if the State had put nothing in and they had the chance to see what actual losses would accrue on the PTSB loan book. Remember the company also has the hugely profitable Irish Life insurance arm which would have generated profits to cover much of the losses. The shareholders would have been in a position to meet any shortfall and they would still have ownership of the group.

    The State's insistence that the entire €4 billion had to be raised in 2011 meant the shareholders were wiped out. And as for your claims about Sweden...


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