ECB, developers, bankers,..who else will we blame?

macraignil

andrew wrote: »

One of the main reasons I think is that there was a lack of political capital for such regulations. Look at the reaction to the LTV and LTI ratio caps - people are still complaining about these kind of regulations after one of the worst, if not the worst, property bubble the world has ever seen. Think about that; literally one of the worst in human history, and yet some people STILL question the appropriateness of these regulations.

It's very, very, very hard to be the bad guy and put an end to a bubble.

I agree, but is that not why we pay politicians and senior civil servants so much. Why do they deserve such big pension payments if they are not willing to take the tough decisions?

A gradual restriction of the overheating property market might have been much better for everyone in ireland than doing nothing until the entire bubble and economy burst at the same time. The complaints about new lending restrictions seem to me to be coming from those with a vested interest in property rising in value and just listening to this group alone is what got Ireland into trouble in the first place.

How are businesses and employers in this country ment to continuously increase wages to allow staff afford to live in an ever increasingly expensive place to live? Upward only rent agreements, affordable housing that was anything but affordable...To keep labour costs reasonable it must be possible for someone earning less than a politician or civil servant to stay living here and that means being able to have a home at a reasonable cost.

Jim2007

macraignil wrote: »

Yes there is something that separates politicians and civil servants from others in the country. While private sector workers struggled to cope with spiraling increases in living costs, politicians and civil servants gave themselves generous pay rises so they could still live here comfortably.

We are talking about ones ability to detect and act differently to the common disposition in a bubble and that is no different as has been proven over and over again in bubbles.

Jim2007

dlouth15 wrote: »

We need a revamp of planning policy to encourage building of this type in these areas. We need money to be put into it. Local opposition to development will need to be faced down. Even if you want a semi-d in the suburbs, decent quality high-density options in the centres will ease demand outside and lower prices all around.

No, what we need to do is recognise the reality - it not possible for everyone to own and finance their own home! nor for that matter is it a sensible idea to encourage banks to sink the major part of their resources in bricks and concrete rather than into local industry which would result in job creation.

What we need is a proper housing policy which results in adequate accommodation becoming available with out requiring people to borrow large amounts of money which they then struggle to repay over the next following 20 or 30 years!

Jim2007

macraignil wrote: »

A gradual restriction of the overheating property market might have been much better for everyone in ireland than doing nothing until the entire bubble and economy burst at the same time.

Yes but when would you apply this restriction, when the prices raise 10%, 20%, ??? or what and more importantly how would you carry the country?

In Switzerland during the recession a small bubble began to develop around the lake of Geneva and the government moved to stem it by increasing the minimum deposit required, by requiring that deposit to be from savings only and by preventing the pledging of pensions against borrowing. But here is the thing, the Swiss government can not be removed by the voters, otherwise they would not have acted!

dlouth15

Jim2007 wrote: »

No, what we need to do is recognise the reality - it not possible for everyone to own and finance their own home! nor for that matter is it a sensible idea to encourage banks to sink the major part of their resources in bricks and concrete rather than into local industry which would result in job creation.

Well it really depends. If there's a genuine need for housing there's no problem banks lending for it. The problem comes when banks lend purely on the basis of rising prices rather than any fundamental evaluation of value. But none of that was the focus of my last post.

Godge

macraignil wrote: »

Yes there is something that separates politicians and civil servants from others in the country. While private sector workers struggled to cope with spiraling increases in living costs, politicians and civil servants gave themselves generous pay rises so they could still live here comfortably.

That is an urban myth and an easy target to pass the blame onto.

macraignil wrote: »

I agree, but is that not why we pay politicians and senior civil servants so much. Why do they deserve such big pension payments if they are not willing to take the tough decisions?

A gradual restriction of the overheating property market might have been much better for everyone in ireland than doing nothing until the entire bubble and economy burst at the same time. The complaints about new lending restrictions seem to me to be coming from those with a vested interest in property rising in value and just listening to this group alone is what got Ireland into trouble in the first place.

How are businesses and employers in this country ment to continuously increase wages to allow staff afford to live in an ever increasingly expensive place to live? Upward only rent agreements, affordable housing that was anything but affordable...To keep labour costs reasonable it must be possible for someone earning less than a politician or civil servant to stay living here and that means being able to have a home at a reasonable cost.

It doesn't matter what you pay a politician if the electorate vote for gob****es.

Why should anyone be able to have a home at a reasonable cost. Irish people have an irrational and unhealthy attitude to home ownership wanting to own a home at any cost therefore tying them down to one locality for a job etc. Blaming politicians, bankers and civil servants is wrong, it is the culture of home ownership in Ireland that is to blame for what went wrong, all the mammys that wanted their kids to get on the rungs of the property ladder.

macraignil wrote: »

I think we did have tax exemptions for certain types of urban redevelopment at one stage but as far as I know once apartments were built there was no effort to make them affordable. I think that since it is in the area of comfortable family homes that there has been a shortage that it would be better to facilitate this type of development. With the population density in Ireland we should have the room for this type of development and not have to force people into high rise living as is necesary in other parts of Europe.

Thanks again for all the discussion on banking. It really surprises me, with the opening title of the thread, that so many posters have wanted to discuss the details of bank financing.

Do you not understand the link between high cost of living and dispersed population? Do you not understand the link between the high cost of public services and dispersed population?

Small schools, small police stations and small hospitals are inefficient and highly costly. The Irish attitude of wanting to build a house out in the countryside down on the family farm is the biggest root cause of our economic failures. It created the property bubble and the legacy of State debt and burdened us with costly public services forever.

The only way forward is higher density living in cities so that we can gain efficiencies in public service and build public transport and affordable fast broadband services

macraignil

Godge wrote: »

That is an urban myth and an easy target to pass the blame onto.

I don't agree it is a myth that government and civil service are paid more than most in the private sector.

It doesn't matter what you pay a politician if the electorate vote for gob****es.

Bad language, but I like the sentiment.

Why should anyone be able to have a home at a reasonable cost. Irish people have an irrational and unhealthy attitude to home ownership wanting to own a home at any cost therefore tying them down to one locality for a job etc. Blaming politicians, bankers and civil servants is wrong, it is the culture of home ownership in Ireland that is to blame for what went wrong, all the mammys that wanted their kids to get on the rungs of the property ladder.


A healthy society should allow people have a home.


Do you not understand the link between high cost of living and dispersed population? Do you not understand the link between the high cost of public services and dispersed population?

I'm not sugesting everyone should have to live in the remotest corners of the country as developed during the uncontroled property bubble that ruined the country. There are countrys in the world with a dispersed population that still maintain public services. Ireland is not that big for this to be a problem in my opinion.

Small schools, small police stations and small hospitals are inefficient and highly costly. The Irish attitude of wanting to build a house out in the countryside down on the family farm is the biggest root cause of our economic failures. It created the property bubble and the legacy of State debt and burdened us with costly public services forever.

The only way forward is higher density living in cities so that we can gain efficiencies in public service and build public transport and affordable fast broadband services

Yes let's close down rural Ireland as it is obviously people wanting a home on the family farm that is the biggest root of our economic failures??????

macraignil

Jim2007 wrote: »

Yes but when would you apply this restriction, when the prices raise 10%, 20%, ??? or what and more importantly how would you carry the country?

In Switzerland during the recession a small bubble began to develop around the lake of Geneva and the government moved to stem it by increasing the minimum deposit required, by requiring that deposit to be from savings only and by preventing the pledging of pensions against borrowing. But here is the thing, the Swiss government can not be removed by the voters, otherwise they would not have acted!

Not sure how I would carry a country?? Better than applying restrictions to price rises would be to allow increased supply and allow the laws of supply and demand keep prices at a more affordable level. While prices were rising far faster than wages here, planning regulations for new homes were made more complicated and restrictive, adding to the expense of meeting the market demand and making the problem of increasingly unaffordability of housing worse.

Godge

macraignil wrote: »

Yes let's close down rural Ireland as it is obviously people wanting a home on the family farm that is the biggest root of our economic failures??????

I would be very interested in your examples of countries in the world with a dispersed population that maintained excellent public services.

I would also be interested in the environmental cost in such cases.

Sheldons Brain

Godge wrote: »

I would be very interested in your examples of countries in the world with a dispersed population that maintained excellent public services.

I would be very interested in examples of countries which considered it appropriate to move its people around for convenience of the government.
Maybe Stalinist Russia, Ceausescu's Romania, South Africa. The object of government is to serve the people, not imply they live in the wrong place.

Godge

Sheldons Brain wrote: »

I would be very interested in examples of countries which considered it appropriate to move its people around for convenience of the government.
Maybe Stalinist Russia, Ceausescu's Romania, South Africa. The object of government is to serve the people, not imply they live in the wrong place.

Just look at most modern European countries and their restrictive planning policies forcing urban development.

You see you don't have to force anyone to move. You just apply full economic cost to their broadband, water supply and other utilities.

macraignil

Godge wrote: »

I would be very interested in your examples of countries in the world with a dispersed population that maintained excellent public services.

I would also be interested in the environmental cost in such cases.

Countries with modern public services and their population density per square Km. :

Australia 3.08
Canada 3.58
Sweden 21.5
USA 32.47
Norway 15.6
New Zealand 16.79
Finland 18

I never said maintained excellent public services as we do not even do this in our urban centres.

As a general guide to the area of country with a good environment here are the percentages of land under forest for the above:

Australia 19%
Canada 31.06%
Sweden 76%
USA 30.84%
Norway 28.99%
New Zealand 31.87%
Finland 72%

Ireland has an average population density of 65 per square Km and only has an area covered by forest of 10.85%. I am not aware of most modern european countries having restrictive planning forcing urban development as you say. I think many would be willing to meet the extra cost of utilities in rural areas or simply do without them in order to have a nicer environment to live in than the urban future that you seem to think is essential. Again I would like to make the point that Ireland is not that big for this to be a major problem. I know a couple from rural Australia that see no problem in driving the distance from Cork to Dublin to go buy food from their favourite fast food outlet.

Godge

macraignil wrote: »

Countries with modern public services and their population density per square Km. :

Australia 3.08
Canada 3.58
Sweden 21.5
USA 32.47
Norway 15.6
New Zealand 16.79
Finland 18

I never said maintained excellent public services as we do not even do this in our urban centres.

As a general guide to the area of country with a good environment here are the percentages of land under forest for the above:

Australia 19%
Canada 31.06%
Sweden 76%
USA 30.84%
Norway 28.99%
New Zealand 31.87%
Finland 72%

Ireland has an average population density of 65 per square Km and only has an area covered by forest of 10.85%. I am not aware of most modern european countries having restrictive planning forcing urban development as you say. I think many would be willing to meet the extra cost of utilities in rural areas or simply do without them in order to have a nicer environment to live in than the urban future that you seem to think is essential. Again I would like to make the point that Ireland is not that big for this to be a major problem. I know a couple from rural Australia that see no problem in driving the distance from Cork to Dublin to go buy food from their favourite fast food outlet.

Population density per se is not the relevant measure. The degree of urbanisation is the question.

We have the lowest urbanised population in Europe leading to an inherent higher cost for the provision of public services.

Jim2007

macraignil wrote: »

Not sure how I would carry a country?? Better than applying restrictions to price rises would be to allow increased supply and allow the laws of supply and demand keep prices at a more affordable level. While prices were rising far faster than wages here, planning regulations for new homes were made more complicated and restrictive, adding to the expense of meeting the market demand and making the problem of increasingly unaffordability of housing worse.

Well I don't think an European country has solved the problem. But there are better models out there than our current one. The big difference I saw between people loosing their job over here and Ireland during the recession was that here people did not have the same big financial commitments and because most people rent, they where more mobile to to take up jobs else where when the opportunity became available.

macraignil

Godge wrote: »

Population density per se is not the relevant measure. The degree of urbanisation is the question.

We have the lowest urbanised population in Europe leading to an inherent higher cost for the provision of public services.

I just looked up percentage urbanized population on wikipedia and they do not show Ireland as the lowest percentage urbanised population in Europe. I would agree that we have one of the lower percentage urbanised populations in Europe, but I do not agree this should be used as an excuse for forcing people to live in urban areas. As I have already said this country is not so big that someone can not live in a rural area and still be within a relatively short drive of an urban centre.

I believe if somebody can afford the extra costs involved in living in a rural area and is happy with the lower standard of public services available they should be allowed to. I still do not understand how people being allowed to live in rural areas is the root cause of our economic failures as you have claimed. Our planning regulations for new rural housing are already very restrictive and this has only served to push up house prices in urban areas to unsustainably high levels in my opinion.

Jim2007

Godge wrote: »

I would be very interested in your examples of countries in the world with a dispersed population that maintained excellent public services.

I would also be interested in the environmental cost in such cases.

Well here in Switzerland most of the larger towns and cities have a population of less than say 30,000 and even the largest city, Zurich, only has a population of only about 350,000, so that is fairly fairly well dispersed. We also have some of the most challenging terrain in Europe and yet we do have very good public services. For instance, our public transport system ensures that almost every town and village is serviced at lest once an hour by either a train, bus, ship or tram and they are almost always on time

Each Kanton (similar to a county) has it's own Education department (set the curriculum, exams etc.), Police force, board of works, transport dept, revenue dept. etc... Not alone that but each town or village has it's own local police force, board of works, revenue dept. in it's turn.

We are more or less exactly what you claim will not work! And yet debt is only 48% of GDP!

View

Jim2007 wrote: »

Well here in Switzerland most of the larger towns and cities have a population of less than say 30,000 and even the largest city, Zurich, only has a population of only about 350,000, so that is fairly fairly well dispersed. We also have some of the most challenging terrain in Europe and yet we do have very good public services. For instance, our public transport system ensures that almost every town and village is serviced at lest once an hour by either a train, bus, ship or tram and they are almost always on time

Each Kanton (similar to a county) has it's own Education department (set the curriculum, exams etc.), Police force, board of works, transport dept, revenue dept. etc... Not alone that but each town or village has it's own local police force, board of works, revenue dept. in it's turn.

We are more or less exactly what you claim will not work! And yet debt is only 48% of GDP!

A quick look online shows Switzerland has an urban:rural population split of roughy 75:25, Ireland's comparable ratio is roughly 60:40. Hence it is much easier and less costly for the taxpayer to provide public services in Switzerland than in Ireland.

Also, Switzerland's urban population is spread out among many smaller cities/towns, which makes it easier to successfully organise a good public transport system in one place and copy it, whereas in Ireland people have no local government with the powers to tackle it in smaller cities and Dublin is such a mess that any time the issue is raised, everyone starts with the assumption that there is no point in even trying to fix as it is impossible.

Godge

macraignil wrote: »

I just looked up percentage urbanized population on wikipedia and they do not show Ireland as the lowest percentage urbanised population in Europe. I would agree that we have one of the lower percentage urbanised populations in Europe, but I do not agree this should be used as an excuse for forcing people to live in urban areas. As I have already said this country is not so big that someone can not live in a rural area and still be within a relatively short drive of an urban centre.

I believe if somebody can afford the extra costs involved in living in a rural area and is happy with the lower standard of public services available they should be allowed to. I still do not understand how people being allowed to live in rural areas is the root cause of our economic failures as you have claimed. Our planning regulations for new rural housing are already very restrictive and this has only served to push up house prices in urban areas to unsustainably high levels in my opinion.

That relatively short drive is a long way for a broadband line to serve only a handful of people and very expensive.

It requires that an extensive school bus system be put in place costing millions when children walk/cycle to school everywhere else in Europe.

As for the extra costs of living in a rural area, if people were charged for the school bus service and if they were charged for the extra cost of broadband provision, postal services, etc. then I would have no problem with it. The thing is, urban dwelling taxpayers subsidise the lifestyle of those living in the middle of nowhere.

macraignil

Godge wrote: »

That relatively short drive is a long way for a broadband line to serve only a handful of people and very expensive.

It requires that an extensive school bus system be put in place costing millions when children walk/cycle to school everywhere else in Europe.

As for the extra costs of living in a rural area, if people were charged for the school bus service and if they were charged for the extra cost of broadband provision, postal services, etc. then I would have no problem with it. The thing is, urban dwelling taxpayers subsidise the lifestyle of those living in the middle of nowhere.

I live in a rural area and do not have a broadband line like most people living nearby. I do not miss having a broadband line or see why you view this as such a vital public service. I pay a local internet transmitter service that provides adequate internet access for me and I would actually not be too worried if I had no internet access.

The school bus service available in this country applies a charge to the service user. The citizens information website quotes a standard charge of 350euro per child. It may be subsidised by central government but so are public services and infastructure in urban areas. Everone in Europe does not walk or cycle to school and there are rural areas in other european countries.

Compared to the massive investment made in urban infastructure projects the money spent on rural infastructure here has been relatively small. Rural communities are also providing low price food to urban dwellers and without a rural community we would need to import all of our food instead of being a successful exporter of food. Rural areas also provide the raw material for a sizable industry that for example is a world leader in products like infant formulated foods. There is no urban area that can support its population without rural areas providing them with essentials to life like food and clean water.

Jim2007

View wrote: »

A quick look online shows Switzerland has an urban:rural population split of roughy 75:25, Ireland's comparable ratio is roughly 60:40. Hence it is much easier and less costly for the taxpayer to provide public services in Switzerland than in Ireland.

Take a good look at where we have to build roads, tunnels, bridges, lay phone and electricity lines etc... and explain to me how it is more expensive to lay a line from say Galway to Sligo???

We are currently working on the Gotthard Base Tunnel, that will cost the Swiss taxpayer about €12 billion, that is not cheap in anyone's books.

View wrote: »

Also, Switzerland's urban population is spread out among many smaller cities/towns, which makes it easier to successfully organise a good public transport system in one place and copy it...

The systems are completely different because of the terrain and the business is run by completely different companies, each with their own operating structure. Some operations consist mainly of trams and busses, while others might operate mountain trains, ships and busses etc.... the ticketing systems are different as well, so that you can weekly, monthly and annual tickets in some locations where as other only offer monthly tickets etc...

View wrote: »

whereas in Ireland people have no local government with the powers to tackle it in smaller cities and Dublin is such a mess that any time the issue is raised, everyone starts with the assumption that there is no point in even trying to fix as it is impossible.

At the beginning of the 20th century, local government was a key element of administration throughout the British Isles, but you are right over the past century it has dwindled to almost a talking shop in both countries. But there is no reason it can not be a key element of administration again if the people demand it.

AlekSmart

Jim2007 wrote: »

Well here in Switzerland most of the larger towns and cities have a population of less than say 30,000 and even the largest city, Zurich, only has a population of only about 350,000, so that is fairly fairly well dispersed. We also have some of the most challenging terrain in Europe and yet we do have very good public services. For instance, our public transport system ensures that almost every town and village is serviced at lest once an hour by either a train, bus, ship or tram and they are almost always on time

Each Kanton (similar to a county) has it's own Education department (set the curriculum, exams etc.), Police force, board of works, transport dept, revenue dept. etc... Not alone that but each town or village has it's own local police force, board of works, revenue dept. in it's turn.

We are more or less exactly what you claim will not work! And yet debt is only 48% of GDP!

Jim2007 elequently describes the functional Swiss model,and explains the reasons for this functionality as he types.....the repeated references to "We" and "Our" underline a country where people not alone see themselves as stakeholders,but fully expect to be treated as such.

That's not really how it is in Ireland....:)

jank

I mentioned in another thread that we think Ireland is socialist but its not, we are much more individualistic than we give credit for, yet pretend to be socialist. I think that dishonesty in ourselves is a big problem in our society.

Head The Wall

Godge wrote: »

I would be very interested in your examples of countries in the world with a dispersed population that maintained excellent public services.

I would also be interested in the environmental cost in such cases.

You're always saying that unless there's a report something isn't really substantiated so can you provide us with the report that backs up your statement of

"The Irish attitude of wanting to build a house out in the countryside down on the family farm is the biggest root cause of our economic failures. It created the property bubble and the legacy of State debt and burdened us with costly public services forever."

Firstly a report stating that public service costs were cheap before the boom and secondly a report that has building rural houses as the biggest blame of the boom

Jim2007

AlekSmart wrote: »

Jim2007 elequently describes the functional Swiss model,and explains the reasons for this functionality as he types.....the repeated references to "We" and "Our" underline a country where people not alone see themselves as stakeholders,but fully expect to be treated as such.

That's not really how it is in Ireland....:)

Oh no, I've become Swiss! Well I guess you can't live here for over 25 years and not have some of it rub off....

But you are correct, there is a very strong emphasis on putting team/group/community before self. And it is very much enforced in school life, so that kids just grow up with that attitude.

AlekSmart

It looks like it's taken their Brittanic Majesties a hundred years to pay off their Bondholders...so,can we beat their record ?

https://www.warhistoryonline.com/war-articles/great-britain-almost-great-war-debt-free-century-wwi-outbreak.html

Jim2007

AlekSmart wrote: »

It looks like it's taken their Brittanic Majesties a hundred years to pay off their Bondholders...so,can we beat their record ?

https://www.warhistoryonline.com/war-articles/great-britain-almost-great-war-debt-free-century-wwi-outbreak.html

Well you could argue the most debts are never paid off, since bonds are often paid off by issuing another bond...

Have you ever heard of the BIS? It handled the WWI repayments from German and it continued to function right through WWII, with Germany appointing NAZI party members to the board of directors!

macraignil

jank wrote: »

I mentioned in another thread that we think Ireland is socialist but its not, we are much more individualistic than we give credit for, yet pretend to be socialist. I think that dishonesty in ourselves is a big problem in our society.

Signing generations of Irish taxpayers into paying for the mistakes of a short sighted government allowing a rediculous property bubble could not count as socialist in my opinion.

Diddley Squat

Sea Sharp wrote: »

We borrowed recklessly but European banks lent recklessly and didn't complain about profits made from these reckless loans.

They borrowed recklessly .............

ricardo1

realitykeeper wrote: »

This letter from Jean Claude Trichet that the government keeps going on about is a joke. Nobody forced Ireland to accept a bailout. Ireland choose a bailout because it was to cowardly to do what Iceland did.

Iceland may not have had a choice but to reiterate, Ireland did have a choice to accept a bailout and it took that choice. Since Ireland choose to be bailed out, it cannot now pretend that it was forced into it.

Besides all that, the housing bubble and overall structure of the economy was all the fault of the Irish government with its light touch regulation.

Ireland and Ireland alone is solely responsible for the mess it is in.

The finger of blame points directly at The Department of Finance.

Not the builders, the banks, the politicians nor the ECB.

I doubt few if any in the DoF lost their job livelihood, pension or have been forced to work unbearable hours for years since the crash.

GCU Flexible Demeanour

ricardo1 wrote: »

The finger of blame points directly at The Department of Finance.

Not the builders, the banks, the politicians nor the ECB.

Why, precisely? I'm just mindful of a useful contribution today in the IT from the former head of NTMA

http://www.irishtimes.com/opinion/letters/oireachtas-banking-inquiry-1.2046651

Before we joined the single currency, we could deal with our excesses through resetting the clock, ie we devalued the Irish pound.



We then joined the German club, where we continued to play by our own rules. At times, we seemed to think we had discovered a new economic theory that applied to Ireland and allowed us to do things that others could not do.


Sometimes there may be an inevitability about a catastrophe.

I think he's right in pointing to the decision to adopt the euro - or, at least, the decision to adopt the euro as if all Eurozone membership entailed was telling everyone it was worth about 80 pence - as the main strategic error.

The EU's adoption of a common financial regulation regime as part of the 1992 Single Market reform was another strategic error that contributed hugely to the problem.

The main contribution that you'd trace to DoF is the retention of property-related tax reliefs or, at least, the lack of evidence that policy advice was suggesting the retention of those reliefs was gonzo. But would you suggest DoF was driving that approach to tax policy?