# Ex-IMF Chief: Ireland is Insolvent



## canicemcavoy (12 Sep 2010)

The summary of the summary: we're in trouble;

http://baselinescenario.com/2010/09/02/irish-worries-for-the-global-economy/




> Ireland’s difficulties arose because of a massive property boom financed by cheap credit from Irish banks. Ireland’s three main banks built up loans and investments by 2008 that were three times the size of the national economy; these big banks (relative to the economy) pushed the frontier in terms of reckless lending. The banks got the upside, and then came the global crash in fall 2008: property prices fell more than 50 percent, construction and development stopped, and people stopped repaying loans. Today roughly one-third of the loans on the balance sheets of major banks are nonperforming or “under surveillance”; that’s an astonishing 100 percent of gross national product, in terms of potentially bad debts.
> 
> [...]
> 
> ...


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## mercman (12 Sep 2010)

Brilliant, another piece of sideline journalism to tell us all what we all already know, and in the case that our local journalists have not rammed the point home, we now have a plethora of yanks fitting the press to justify their own wellbeing.

Why hasn't some persons made an effort to tell us all about the measures that have been made and the instances to incur confidence back in the nation. Mind, doing something like that just might be classed as sensible but no doubt will end up counter productive.  

OP as per the original script, did you obtain permission from the New York Times to reproduce this thrash ??


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## Robin Banks (12 Sep 2010)

mercman said:


> Why hasn't some persons made an effort to tell us all about the measures that have been made and the instances to incur confidence back in the nation.


 
Why dont you do it mercman.

Tell us about the measures and the instances.


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## mercman (12 Sep 2010)

Robin Banks said:


> Tell us about the measures and the instances.



These have been well documented and applauded by the International Community but only make the small print in reporting. If we all were aware of other countries problems we just mightn't have the same attitude and some confidence might return.


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## Robin Banks (12 Sep 2010)

Simon Johnson is part of the International Community and he is not applauding.


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## canicemcavoy (12 Sep 2010)

> Why hasn't some persons made an effort to tell us all about the measures that have been made and the instances to incur confidence back in the nationWhy hasn't some persons made an effort to tell us all about the measures that have been made and the instances to incur confidence back in the nation


 
I presume you kneejerked without actually reading the article. If you had, you would realise that the point he's making is that these "measures" and "instances to incur confidence" will have absolutely no affect.

Now, if you have any arguments to counter his facts and figures rather than just sarcasm, please lay them out.


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## mercman (12 Sep 2010)

No sarcasm intended. I simply fail to understand how these economists are so wonderful about playing the 'I told you so' game. There were very few who predicted this worldwide disaster only to say we could see it coming. Very much a case of they should have 'put up' or 'shut up'


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## canicemcavoy (12 Sep 2010)

Ah right, so you don't actually have an argument; this is just a repetition of the "no one saw it coming, noone's to blame (and therefore everyone's to blame)" meme we've heard _ad nauseum_.


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## mercman (12 Sep 2010)

I saw it coming -- partially wound down my business in Mid 2007 as much as possible.


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## Robin Banks (13 Sep 2010)

mercman said:


> These have been well documented and applauded by the International Community but only make the small print in reporting. If we all were aware of other countries problems we just mightn't have the same attitude and some confidence might return.


 
This is classic Fianna Fail codology that has the country banjaxed.



> Irish banking system 'a shambles', says top Swiss analyst


http://www.tribune.ie/business/article/2010/sep/12/irish-banking-system-a-shambles-says-top-analyst/

Today's editorial from the Financial Times



> It is time to let bank losses fall where they should: on unsecured creditors once shareholders are wiped out. *But* *Irish leaders are prolonging the uncertainty* in the hope that zombie banks will, Lazarus-like, come back to life.


http://www.ft.com/cms/s/0/07b06b20-be9a-11df-a755-00144feab49a.html

International Community applauding my foot.

It's interesting that the same people who were full of it during the bubble are still full of it during the bust.

You're (still) part of the problem mercman..


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## csirl (13 Sep 2010)

I think the IMF has a big grudge against Ireland which dates from the economic problems in the 1980s.

Back then, the IMF was gung ho about coming into Ireland and taking over. The Government thankfully told them to get lost and implimented a lot of policies which were at odds with IMF recommendations and made some of the IMF "experts" look very stupid. I gather than the author of this piece was one of the IMF "experts" back then? He was spectacularly wrong in the 1980s, so why should anyone listen to him now?


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## mercman (13 Sep 2010)

Robin Banks said:


> You're (still) part of the problem mercman..



Good man, personalise the issue. 

To date I have seen very few credible alternatives that one could say that the country might be best to move with.

Eh Smartie, have you not noticed the other countries that are in the same mess, or would you prefer if they were listed for you to realise that this is a world wide problem, not just an Irish dilemma.

Eh I forgot the opposition in this country have offered so many alternative policies !! This country needed a National Government which nobody realised could have been the saving grace.

But again people on the sidelines pasting insults know it all. In fact they know sweet FA apart from placing insults to those that are vague enough to even think about it.


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## mercman (13 Sep 2010)

csirl said:


> I think the IMF has a big grudge against Ireland which dates from the economic problems in the 1980s.




A very good diligent point csirl. Wait for it. You are about to be insulted by others.


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## Robin Banks (13 Sep 2010)

mercman said:


> Eh Smartie, have you not noticed the other countries that are in the same mess, or would you prefer if they were listed for you to realise that this is a world wide problem, not just an Irish dilemma.


 
"Miss, Miss the other boys were doing it too Miss."

Another line of bs straight from the Fianna Fail propoganda sheet.

You're a scream


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## canicemcavoy (13 Sep 2010)

csirl said:


> I think the IMF has a big grudge against Ireland which dates from the economic problems in the 1980s.


 
1. The article has 2 authors, one of whom worked for the IMF.
2. The author who did work for the IMF worked for it in 2007/2008, not in the 1980s. Indeed, he's 47, which means that in the early 80s he was in his early 20s - possible as young as 17, depending on how early, and presumably still in school or studying. Perhaps these foreigners hold long grudges for no reason whatsover.
3. His other qualifications include being the Ronald A. Kurtz Professor of Entrepreneurship at MIT Sloan School of Management, a senior fellow at the Peterson Institute for International Economics in Washington, D.C. and member of the Congressional Budget Office's Panel of Economic Advisers. I realise that none of these are as good as being a solicitor from Offaly, but there you go - these foreigners have weird notions about books and learning.


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## RMCF (13 Sep 2010)

Ireland is in a mess, we all know this.

But so is the UK, France, Portugal, Greece, Spain, Italy .... and yes, even the US. 

We are all screwed, its just degrees of being screwed if you ask me.

But its always nice to pick on someone who might be slightly worse off to cover up your own disaster, and make your own citizens think they have it good.


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## canicemcavoy (13 Sep 2010)

RMCF said:


> But its always nice to pick on someone who might be slightly worse to cover up your own disaster.


 
Er, is this a reference to the author of the original piece, who writes a blog mainly concerning the US economy? http://baselinescenario.com/ Can you explain how this one blog article somehow covers up the US disaster, and why a UK-born economist would do that? 

So, just to get the stories straight - when the preeminent economist Simon Johnson writes a single blog post criticising Ireland, it's because he has a grudge about Ireland from the time he was in the IMF at the age of 17ish almost 30 years ago, and also it's part of some grand conspiracy to cover up the problems of the US, a badly-run conspiracy since he spends 99% of his blog criticising the US economy.

Do I have that correct?

Just use the Bertie response - it was Lehman's and its testicles. It's equally meaningless and self-pitying, but doesn't take as long to type.


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## Robin Banks (13 Sep 2010)

Lads dont be listenin to any of dem forrin begrudgers tryin to talk us down

[broken link removed]

We are in year 14 of de latest Fianna Fail economic miracle


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## csirl (13 Sep 2010)

canicemcavoy said:


> 1. The article has 2 authors, one of whom worked for the IMF.
> 2. The author who did work for the IMF worked for it in 2007/2008, not in the 1980s. Indeed, he's 47, which means that in the early 80s he was in his early 20s - possible as young as 17, depending on how early, and presumably still in school or studying. Perhaps these foreigners hold long grudges for no reason whatsover.
> 3. His other qualifications include being the Ronald A. Kurtz Professor of Entrepreneurship at MIT Sloan School of Management, a senior fellow at the Peterson Institute for International Economics in Washington, D.C. and member of the Congressional Budget Office's Panel of Economic Advisers. I realise that none of these are as good as being a solicitor from Offaly, but there you go - these foreigners have weird notions about books and learning.


 
The individuals may have changed, but the institutional attitude is still there. The IMF simply cant accept that they are not always right and countries dont always need their help. I hate the way that they seem to get portrayed as an almost god like solution to all the economic problems that any country may have. They have their strengths and weaknesses and are as human as everyone else. 

The big flaw that many commentators seem to make is that they focus too much on the rate in which debt is increasing in Ireland. They forget that Ireland is starting out with a much lower debt than practically any other country in the world. Even with recent deficits and those projected over the next couple of years, or total debts are still lower per capita than USA, UK, Germany etc. etc.


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## Chris (13 Sep 2010)

mercman said:


> These have been well documented and applauded by the International Community but only make the small print in reporting. If we all were aware of other countries problems we just mightn't have the same attitude and some confidence might return.



Were these the same people in the International Community that were, as Bertie used to say, so envious of the Irish economy? If you do a search in French or German papers for Ireland, all that you find is negative reports. Back when Bertie claimed Ireland was the envy of Europe, I used to search the foreign papers for such indications. Guess what I found: nothing, except for some articles on the smoking ban.
The actual economic benefits of the budget cutbacks are dwarfed by the ridiculous amounts of debts taken on in order to recapitalise the banks.
The only ones in the International Community that may applaud the bank bailouts are the foreign creditors.


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## canicemcavoy (13 Sep 2010)

csirl said:


> The individuals may have changed, but the institutional attitude is still there.


 
But he's not in the institution. Unless you're saying that by virtue of the fact that he worked in the IMF for a small fraction of his career, his arguments can be completely ignored.


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## PaddyW (13 Sep 2010)

This post will be deleted if not edited immediately, talk about in fighting. If things remain in Ireland, as they are on this forum, things will never get sorted. Someone mentioned a National government. That's exactly what is needed at the moment, get the best of the best (if there is such a thing) together to try deal with our country's problems and stop the knife throwing!


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## csirl (13 Sep 2010)

According to the IMF's own projections, the general Government debt in Ireland will be 93% of GDP and the budget deficit will be 11.5% by the end of 2011. The corresponding figures for the UK are 94% and 12.5%.

Therefore, however bad we've got it, the UK is in a worse off position and, according to IMF figures, more likely to go bust. 

The debt figures for USA and France will be even worse at 100% and 99% respectively.

So you must ask yourself the question, why so much negative press for Ireland? You would think that given that the UK is a much bigger economy and is in worse shape than Ireland, that it would be getting all the headlines?


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## RMCF (13 Sep 2010)

But the UK has its own currency and in the worst case scenario can devalue.


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## Chris (13 Sep 2010)

csirl said:


> According to the IMF's own projections, the general Government debt in Ireland will be 93% of GDP and the budget deficit will be 11.5% by the end of 2011. The corresponding figures for the UK are 94% and 12.5%.
> 
> Therefore, however bad we've got it, the UK is in a worse off position and, according to IMF figures, more likely to go bust.
> 
> ...



I fully agree with you that the UK and US are in at least as bad a shape as Ireland. The problem is that the investment community does not believe the IMF, at least not in regards to Ireland. I for one believe the estimates are too optimistic.



RMCF said:


> But the UK has its own currency and in the worst case scenario can devalue.



Devaluing a currency is only a short term solution. And to foreign debtors, which Ireland has many of, currency devaluation is the same as defaulting on debt.


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## mercman (13 Sep 2010)

Fair play to Chris, csirl etc. At last some people are showing the fighting spirit of making an effort of keeping Ireland afloat, instead of playing Party Politics and damming the Government on a Public Forum. We are all collectively going to try and help pull the country out of this mess. By in fighting and making false efforts to try and dirty our own door steps will do nobody any good whatsoever.


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## Chris (13 Sep 2010)

mercman said:


> Fair play to Chris, csirl etc. At last some people are showing the fighting spirit of making an effort of keeping Ireland afloat, instead of playing Party Politics and damming the Government on a Public Forum. We are all collectively going to try and help pull the country out of this mess. By in fighting and making false efforts to try and dirty our own door steps will do nobody any good whatsoever.



Unfortunately, nothing anyone on this forum, or country for that matter, can say will be able to soil our doorstep any further. If I had any faith in any of the politicians I would gladly accept a national government and their solutions. But adding more economically inept politicians into the decision making process will only result in more disaster. Until I hear a politician or party advocate reducing debt and putting an end to the constant interference in the free market I see no other solution than to critisise everything they do.


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## Troy McClure (13 Sep 2010)

csirl said:


> The individuals may have changed, but the institutional attitude is still there. The IMF simply cant accept that they are not always right and countries dont always need their help. I hate the way that they seem to get portrayed as an almost god like solution to all the economic problems that any country may have. They have their strengths and weaknesses and are as human as everyone else.
> .


 
It's like saying I'm still annoyed about a comment someone made to me while one a night out away on holidays a few years ago. Do you really believe the IMF care about a drop in the ocean like Ireland? They are ruthless to all, it's not personal. Hell why not just blame it on the brits like times of old!

That said - The level of applied knowledge in hindsight in this country at the moment is typical Irish and sickening. Cowan, when finance minister, raised the stamp duty threshold to 317K for FTB thus fueling house prices. FG and Labour criticised him for not making it higher! That went on and on!
The record of the opposition is proof that no matter whom was in government during this time, the same to very similiar would have happened. 
We had an independent Banking regulator who clearly was not doing his job. If he was under political pressure not to do so he should come out and say so. Why is this guy not been put in the dock? He was only appointed in 2001, I think, so it's not as if there was a culture established within his office.
If Bertie Ahern was not so in bed with the trade unions we would not have have to pay for bench marking or the pay agreements which are crippling the country's competitiveness. Manufacturing is dead in Ireland due to our ridiculous minimum wage been too high. This is where FF did individually make a hames of things. 
I would love to see a new government.. But have you seriously looked at the opposition? Enda Kenny and Eamon Gilmore!!. Mr 'I'm having whatever will get me in' and Mr 'I'm great at slagging the gov but I wont tell you any real policy's' - The country is broke and Eamon Gilmore would be bertie M11 with another trade Union 'love in' the country cant afford. Unless of course you want Sinn Fein's well thought out economic policy's.. FF wrote them on the back of an envelope but at least someone wrote them down.
Rub your hands together Enda, it's your best talent and seems like your a shoe in for the next dumb and dumber (general election) contest.


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## mercman (13 Sep 2010)

Tony McClure, what a well presented thought out post. I echo your sentiments 100% despite been slagged at supporting FF. 

Well done -- 100%


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## mackthencack (13 Sep 2010)

but where did the money go?


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## Robin Banks (14 Sep 2010)

mercman said:


> I echo your sentiments 100% despite been slagged at supporting FF.


 
Could all the Fianna Fail fanbois should show their love for de party by paying a special 10% "voting for corrupt incompetent gombeens levy" until the national debt is back down to the €38 billion figure it was when they took over please?

Mercman, has your mate Bertie got his tax clearance certificate yet?

I heard a team of researchers recently sequenced the Fianna Fail genome and found it to be mostly reptile crossed with donkey


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## mercman (14 Sep 2010)

Smartie Banks, do you really have to personalise this thread ? What alternatives have the opposition stated that they would put in place ? We have all waited for months for this and nothing has been forthcoming.

You are simply not prepared to accept that there are many countries in the same dilemma as Ireland. If Fine Gael wish to enter the gutter Politics mode let them play their own game, and have the small fry shouting from the sidelines, but I know enough about the misgivings of their hierarchy  which would not really float my boat.

Until the personal insults to me have ceased, I'm finished on this game of charades.


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## csirl (14 Sep 2010)

Mercman - I believe in fighting our corner when its clear that we're not in as bad a shape as the media make out. However, I dont have confidence in the government. 

Given that the figures for Ireland are not as bad as those for the UK and we've a lot more scope for raising revenue through taxation as our tax rates are lower than the UK, then its not the economic figures that the financial world has no confidence in. So what is it?

My guess is that its the Government - the finanicial world has little confidence in FF/Greens. I do think we should have a national government, but only AFTER an election so as to give the national government a popular mandate.


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## PaddyW (14 Sep 2010)

Is raising taxes the right way to go though? Will that not stop people spending, as they strive to hold on to what money they can???


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## shnaek (14 Sep 2010)

PaddyW said:


> Is raising taxes the right way to go though? Will that not stop people spending, as they strive to hold on to what money they can???



Also, when people say Ireland is a low tax economy, it is low tax for people on low income. Around 50% of workers pay little or no tax. It is high tax for anyone earning between 35 and 80k - quite high compared with most western economies. So when people say we have scope for raising taxes - is it on the 50% of workers who pay little or no tax that they speak? The only other area in which we have low taxes is with regard to our corporate tax rate, and without that particular incentive Ireland would be a lot worse off. Very high income earners have been able to shelter their income, but as far as I understand it, some of those tax shelters have several more years to run, so the scope for clawing back taxes from them is limited.


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## Protocol (14 Sep 2010)

When Ireland is described as a "low-tax" economy, it is in respect of all taxes added up.

The total level of tax in Ireland has been, and continues to be, much lower than other EU contries.

Here is the 2008 data across the EU:

[broken link removed]


Yes, it's true that tax on low incomes is particularly low in Ireland.

I feel that it could be increased a bit.


Note that although the headline CT rate of 12.5% is low, the CT yield is higher than other countries.


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## csirl (14 Sep 2010)

> So when people say we have scope for raising taxes - is it on the 50% of workers who pay little or no tax that they speak?


 
Yes. Everyone should pay something.


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## Robin Banks (14 Sep 2010)

mercman said:


> What alternatives have the opposition stated that they would put in place ?


 
Inda said he wont stay up all night getting hammered before giving an interview on national radio 








Era c'mon lads, another song before bedtime !!!

€350k a year for that mumbling oaf. Worth every penny wha mercman?


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## Troy McClure (14 Sep 2010)

Originally Posted by [B said:
			
		

> mercman[/B] http://www.askaboutmoney.com/showthread.php?p=1081520#post1081520
> _I echo your sentiments 100% despite been slagged at supporting FF._






Robin Banks said:


> Could all the Fianna Fail fanbois should show their love for de party by paying a special 10% "voting for corrupt incompetent gombeens levy" until the national debt is back down to the €38 billion figure it was when they took over please?


 
I am not a FF supporter. You may be replying to mercman but he was replying to me. - Please take the time to read my post fully before wrongly having a go. 
You ask me they are all the same as each other and along with bankers and unions who have all raped this country. Your incredibly naive to think otherwise or that the petty opposition has any better acumen. 

Simon Coveney's behaviour today has cost this country by his parochial political point scoring. 
You may not have thought of that as it does not occupy the space that is clearly a one blame fits all.
Argue for a meritocracy or something of real change instead of the opposition supporter 'I am angry' spin. 
Please!


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## Robin Banks (15 Sep 2010)

Troy McClure said:


> Simon Coveney's behaviour today has cost this country by his parochial political point scoring.


 
Troy, Simon merely pointed out that Emporer Cowen has no clothes.
Not popular maybe, but it has to be said. 

The country does not need to be listening to slurred waffling from an overpaid half cut buffoon who's been singing in the pub until half three in the morning.

On the subject of the quality of the opposition vs the Fianna Fail gangsters - I am not naive, but don't think FG or Lab come anywhere near the levels of corruption, mefeinism & stroke politics that are the hallmarks of the Fianna Fail gombeen. This is the second time in thirty years that Fianna Fail have bankrupted the country.

Fianna Fail are not a political party, they are a cult. And they have destroyed Ireland, again.


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## serotoninsid (15 Sep 2010)

Robin Banks said:


> Fianna Fail are not a political party, they are a cult. And they have destroyed Ireland, again.


Politicians are a reflection of the folks who elected them.  Dail Eireann needs to be reformed so that there are less TD's per head of population - so that 'parish pump politics' can be brought to an end.
(sorry if i've gone a little bit off topic...)


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## Robin Banks (15 Sep 2010)

It's not off topic because the property bubble, the banking crisis, the budget defecit and NAMA are all due to the failed economic policies of Fianna Fail which were designed to enrich landowners and property speculators at the expense of everything else.

Just 1,500 borrowers are responsible for the 80 billion euro of NAMA debt. These were the Fianna Fail Galway tent lads and they have destroyed the country for a generation with their greed.

Then Fianna Fail have the cheek to turn around and say "we were all responsible" and set up NAMA to make sure "we will all pay for it".


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## Troy McClure (15 Sep 2010)

A Labour/FG government almost bankrupt the country in the 80's they over borrowed so much. Labour especially are incapable of making any kind of hard decision in case it offends their trade union stock. Harsh decisions are what is needed to get us through this. Cowan was always a lousy politian never mind lousy leader. Lenihan at least is doing a good job. Do yo think Joan Burton would have the backbone to do what he has done. She is queen of the sound bite with little real knowledge. Richard Burton had given me some hope but I would rather a drunk Cowan than a sober Kenny as Bruton is marginalised.
As for that interview, I heard it and he answered the questions. I dont care about his/the presentation. It's just political point scoring nothing more. They are all the same... Ireland is insolvent but thats Ok as Joan burton will tell us when she is in government that the damage done by FF was too bad while borrowing to fund her pals in the civil service unions, while the IMF hover closer and closer with real harshness. From gombeen to incompetent if that makes you happy..


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## canicemcavoy (15 Sep 2010)

Troy McClure said:


> A Labour/FG government almost bankrupt the country in the 80's they over borrowed so much.


 
What an incredible rewriting of history. It was Fianna Fail behaviour in order to get elected in 1977 that initially bankrupted this country:

http://en.wikipedia.org/wiki/Economic_history_of_the_Republic_of_Ireland#1980s




> The 1980s in the Republic of Ireland was one of the state's bleakest times. An extremely irresponsible budget by the majority Fianna Fáil government in 1977, which included abolition of car tax and borrowing to fund current spending, combined with some global economic problems to ruin the Irish economy for most of the 1980s, causing high unemployment and mass emigration. The Charles Haughey and Garret FitzGerald governments made this bad situation much worse with more massive borrowing and tax rates as high as 60% (with one Fine Gael finance minister suggesting people were not being taxed enough). After joining the ERM in 1979, Ireland was also saddled for much of the 1980s with an overvalued currency, which wasn't rectified until the 1986 devaluation. Much of the capital borrowed in the 1980s went towards propping up this overvalued currency. Foreign investment, in the form of risk capital, was discouraged by all the evident difficulties.
> This was also an era of political instability and extreme political corruption, with power alternating between Fianna Fáil and Fine Gael, with some governments not even lasting a year, and in one case, three elections in eighteen months. The problems were eventually dealt with starting in 1987 under a minority Fianna Fáil government but with help from the opposition led by Alan Dukes of Fine Gael under what was known as the "Tallaght Strategy", with economic reform, tax cuts, welfare reform, more competition and a reduction in borrowing to fund current spending. This policy was largely continued by succeeding governments. Considerable support from the European Union was the only positive aspect.


 
I'm reminded how Tea Partiers now pin the blame on 8 years of Republican spending on the Kenyan Muslim.


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## Robin Banks (15 Sep 2010)

Troy McClure said:


> From gombeen to incompetent if that makes you happy..


 
No Troy from gombeen_ and_ incompetent to untested.


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## canicemcavoy (17 Sep 2010)

> I am not a FF supporter.
> 
> [...]
> 
> Simon Coveney's behaviour today has cost this country


 
Let's nail this Fianna Fail hack excuse in the head yet again. Coveney twittered about it one hour after this issue had already gone mainstream and two international journalists had already written about it. Blaming it on Coveney was FF's headquarters no. 1 excuse, which has now backfired; they appeared to think the masses out there would accept the excuse that Coveney was King of Twitter (I thought that was Dan Boyle). I suppose it was Coveney who also made Cowen mock people with speech impediments.


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## Troy McClure (17 Sep 2010)

I dont know where you get your info from. You must be in FG to be so defensive and blinkered. I have heard it nowhere that the interview was picked up internationally before Coveney's comments. I even spoke with an FG TD yesterday at an event who thought Coveney would not have wrote it if he had of known the fallout would have been as such. That was their take on it. You seem to be trying to spin him out of the equation.
That said Cowen is a plank and is costing this country dearly at the moment. He needs to go. 
I love you quoting wiki for a history lesson. You do realise anybody can edit it.. I wouldn't disagree with anything in the quote. It's just a little thin my friend thats all. It's great to see such a long period of time can put in one synapse. That settle that one then!
As true as your short wiki sum up of that period is, a fg/labour gov did almost bankrupt the country in the 80's. I didn't read that in wiki by the way I remember it. However I merely pointing this out to another poster, as some people seem to be under the illusion the current opposition can do, and never have done, anything wrong or even suspect. I even recall AIB getting bailed out in the 80's and later it been disclosed Garret Fitzgerald received a £200k interest FREE loan from them. That was a lot of free money in the 80's when there was none. Was that in wiki or should I edit it?
Fitzgerald was a good politician and we could do with him today. It's a pity he is not in opposition at the moment, or Alan Dukes. Someone who actually understands the problems. 
I think we should have a central committee to oversee any government, as like I said earlier they are all the same generally speaking and due to the void of talent all round, the country should be protected. A central committee of academics and scholars and experts (domestic and international) would give us more of a meritocracy with genuine intelligence and independence. Why are we letting former school teachers run the country at the most inappropriate of times..


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## canicemcavoy (17 Sep 2010)

> I dont know where you get your info from. You must be in FG to be so defensive and blinkered. I have heard it nowhere that the interview was picked up internationally before Coveney's comments.


 
[broken link removed]



> pat leahy, who was there, confirmed yesterday that *the reuters correspondent* was filing this story well before coveney did anything.
> 
> fianna fail's attempt to blame this entire thing on simon coveney (who i don't have a massive amount of time for myself) is risible and embarrassing. it wasn't coveney doing philip walton impressions in the bar at 3am.


 
..



> It's a pity he is not in opposition at the moment, or Alan Dukes.


 
I don't know if you've noticed, but Dukes is the public interest director in Anglo, and what a wonnnnnnnderful job he's done there.


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## soy (17 Sep 2010)

I cannot understand the FF vs FG vs Lab arguments in this thread.

THEY ARE ALL THE SAME. FF may have been in power but the others were not opposing any of the measures that have led to the worst of the problems.

We need a National Government with subject matter experts appointed as ministers (we will probably have to recruit beyond Dail Eireann to get this).
We also need to radically overhaul polictics to cut the numbers and try to ensure a better quality of person is elected (rather than the gombeen councillers we have right now). The country is shagged and it will not get better without drastic change. Sometimes I think we would be better off just asking the EU to run the place for us.


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## Troy McClure (17 Sep 2010)

soy said:


> I cannot understand the FF vs FG vs Lab arguments in this thread.
> 
> THEY ARE ALL THE SAME. FF may have been in power but the others were not opposing any of the measures that have led to the worst of the problems.
> 
> ...


 
Poster I could not agree more. It seems impossible to talk about this subject without the need to be pigeoned holed for doing so. Anger and blame are the way forward apparently. 
Half the TD's in the Dail are school teachers and it's likely we will end up with one as the next Taoseach! This is the elephant in the room. George Lee naively tried to do something on his part, and was cut at the knee's.
The IMF will eventually be here and we wont know what hit us. The civil service unions can protest all the like then. But sadly all we do is the usual.. The blame game.


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## Chris (18 Sep 2010)

soy said:


> I cannot understand the FF vs FG vs Lab arguments in this thread.
> 
> THEY ARE ALL THE SAME. FF may have been in power but the others were not opposing any of the measures that have led to the worst of the problems.
> 
> ...


I agree on the part that any type of government would have led to the same problems we are facing now. The reason being that governments are inherently focused on interfering and intervening in the market. I don't know whether a national government is a solution, unless you first introduce new laws, at the highest level, i.e. constitution, that limit the powers of government and specifically prohibit economic interventions.




Troy McClure said:


> The IMF will eventually be here and we wont know what hit us. The civil service unions can protest all the like then. But sadly all we do is the usual.. The blame game.


I agree, especially after a news piece on RTE last night saying something like "it has been officially denied that the IMF will have to be called in". As the saying goes, do not believe anything until it has been officially denied.


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## Potatoeman (23 Sep 2010)

I don't know how anyone could vote for FF after this mess but then I couldn't believe people voted for them in the last election after it came out Bertie had no bank account when he was minister for finance.
  The government needs to cut spending. To do this they firstly need to cut their own salaries to reasonable levels. The civil service has never been cost effective. They need to get rid of guaranteed pensions, jobs for life, cut staff levels and cut salaries. I find it astounding the level of entitlement in this sector.
  To cut social welfare payments they need to bring in rent control. Something like the French system where it’s set by zone and square foot as the mentality here is that the person renting from you should be paying your mortgage.


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## Chris (24 Sep 2010)

Potatoeman said:


> To cut social welfare payments they need to bring in rent control. Something like the French system where it’s set by zone and square foot as the mentality here is that the person renting from you should be paying your mortgage.



Price controls, including rent control, always fail in the long run. Because they result in a reduced profit opportunity you will see less investors. This results in less competition and ultimately in a shortage of adequate housing. And those that already own rental property will invest less in the upkeep of the property to reduce their costs and increase profits, resulting in lower standards of housing. 
I've moved rented accommodation 3 times in the last 3 years, because every year I have been able to find a way better deal and quality of home. This is an inconvenience, but I'm happy with that. I'm now living in a 5 bedroom detached house in a lovely small estate, for lower rent than I paid in 2002 for a Cork City center 2 bedroom apartment. Rental costs are still going the same way as the housing market.


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## Potatoeman (24 Sep 2010)

Chris said:


> Price controls, including rent control, always fail in the long run. Because they result in a reduced profit opportunity you will see less investors.


  Lack of price control in housing is what caused the current crisis. By keeping rental prices below mortgage rates it attracts long term investors with capital rather than investors without capital that cannot weather a downturn.


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## Chris (28 Sep 2010)

Potatoeman said:


> Lack of price control in housing is what caused the current crisis.


How do you figure this one out? What caused the crisis was government intervention and too much easy credit made available by central banks.



Potatoeman said:


> By keeping rental prices below mortgage rates it attracts long term investors with capital rather than investors without capital that cannot weather a downturn.


No, this is not correct. Keeping rental prices low will keep away *all* investors, especially long term investors who will seek higher profits elsewhere.


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## Firefly (28 Sep 2010)

Potatoeman said:


> To cut social welfare payments they need to bring in rent control.


 
It's a free (renters) market - cut social welfare and rents will fall. A landlord can only charge what the market will bear.


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## Purple (28 Sep 2010)

Potatoeman said:


> Lack of price control in housing is what caused the current crisis.



 Rubbish. Governmental interference in the market, stimulating demand that wasn’t necessary or desirable, is what has caused the current crisis. The government should have acted to discourage house building over the last ten years by introducing a property tax but instead they stimulated it by cutting stamp duty (or removing it in many cases), providing tax incentives for investors and employing inept regulators to oversee the conduct of banks. That’s what caused the problem.

You don’t reduce cost by stimulating demand!


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## Potatoeman (28 Sep 2010)

Chris said:


> How do you figure this one out? What caused the crisis was government intervention and too much easy credit made available by central banks.
> 
> 
> No, this is not correct. Keeping rental prices low will keep away *all* investors, especially long term investors who will seek higher profits elsewhere.



 Easy credit was available in many other countries too it was our governments lack of action to control unsustainable house prices and actively encouraging them that compounded this.

Keeping rent prices below mortgage rates is not keeping them low. We have extremely inflated rent prices. I'm not saying that we need the Swedish system where there is little or no profit for investors there is a happy medium.


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## mercman (28 Sep 2010)

Potatoeman said:


> Easy credit was available in many other countries too it was our governments lack of action to control unsustainable house prices and actively encouraging them that compounded this.



And the UK, the US, Portugal, Spain, Bulgaria, Romania, Dubai etc... But no doubt many posters will want to blame the Irish Government for these countries' problems as well.


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## Purple (28 Sep 2010)

Price controls never work in a diverse and open market.


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## Chris (29 Sep 2010)

Potatoeman said:


> Easy credit was available in many other countries too it was our governments lack of action to control unsustainable house prices and actively encouraging them that compounded this.
> 
> Keeping rent prices below mortgage rates is not keeping them low. We have extremely inflated rent prices. I'm not saying that we need the Swedish system where there is little or no profit for investors there is a happy medium.



It was our government's constant interference in the housing market that propped up additional demand where there was none. The solution to a problem created by government is not to give government more power.
Whether prices are high or low is an entirely subjective matter and no person or government should pretend to know what the right price is. The right price is what people are willing to pay without being coerced.
Here is what the price system does. When prices for a product go up it is due to an imbalance in supply and demand. So let's say demand has gone up and supply has stayed the same; then prices will go up. This sends a signal to the market that higher profits are available, and will thus attract more competition who want part of that profit. This increases supply, and unless demand has also increased that will lead to lower prices. What price controls (even a little bit) do is destroy that mechanism, so that even when demand increases supply will not keep up. This is one reason why life in socialist and communist countries was/is utter misery.
There is also no logical correlation between mortgage rates and rental prices that would make any sense to try and fix.



Purple said:


> Price controls never work in a diverse and open market.



You say it. Prices are like the road signs of the market. You start messing with road signs in a city, even just a little bit, and you will cause a mess.


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## Potatoeman (29 Sep 2010)

The rise of house prices had a direct impact on the rise of rents. House prices have fallen roughly by half but rents have yet to follow. We spend a much higher percentage of our income on housing than most countries which considering the population density is madness.


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## Complainer (29 Sep 2010)

Chris said:


> Prices are like the road signs of the market. You start messing with road signs in a city, even just a little bit, and you will cause a mess.


Agreed - Road signs must be managed by a competent authority - perhaps maybe, the Government?


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## shnaek (29 Sep 2010)

Complainer said:


> Agreed - Road signs must be managed by a competent authority - perhaps maybe, the Government?



Funnily enough I thought I read today that drivers are having trouble reading the road signs erected at a cost of 250k on the new motorways - something to do with not taking into account the Irish weather - though I can't find any reference so maybe I just dreamt it!

As for competance and government - hahaha (laughs like the guys in GalaxyQuest)


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## Chris (30 Sep 2010)

Potatoeman said:


> The rise of house prices had a direct impact on the rise of rents. House prices have fallen roughly by half but rents have yet to follow. We spend a much higher percentage of our income on housing than most countries which considering the population density is madness.


Your statement cannot be backed up with any facts. The only impact on rental prices is supply and demand. That is why rental yields on investment properties went down to as low as 2% at the peak. There just wasn't the demand for rental as everyone was obsessed with buying.
Rental prices did not increase even remotely at the same level as real estate prices. And from my own personal experience I can tell you that rental prices have come down significantly, because all those empty investment propoerties have been forced on the market and so many renters have left the country. Increased supply and decreased demand equals lower prices.



Complainer said:


> Agreed - Road signs must be managed by a competent authority - perhaps maybe, the Government?



You are hardly arguing that road signage in this country is at any level good enough. I lost count of the amount of foreign drivers I have heard complain about the totally useless and misleading road signage. 
And as for government being competent: you cannot be serious!?!?!? The government has proven that it cannot manage road signage, education, water supply, helath care, etc. and you think they can "run" an entire (or even part of) economny?
Hayek put it nicely in this quote: "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."


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## PaddyW (30 Sep 2010)

Chris said:


> Rental prices did not increase even remotely at the same level as real estate prices. And from my own personal experience I can tell you that rental prices have come down significantly, because all those empty investment propoerties have been forced on the market and so many renters have left the country. Increased supply and decreased demand equals lower prices.



Just on that point Chris, I've noticed prices starting to rise out around my area, Swords. What would be your view on that, as I can't see any great rise in demand in the area.


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## Complainer (30 Sep 2010)

Chris said:


> You are hardly arguing that road signage in this country is at any level good enough. I lost count of the amount of foreign drivers I have heard complain about the totally useless and misleading road signage.
> And as for government being competent: you cannot be serious!?!?!? The government has proven that it cannot manage road signage, education, water supply, helath care, etc. and you think they can "run" an entire (or even part of) economny?


I don't think Irish road signage is noticably better or worse than other countries. I've lost count of the number of times that I've got lost in Italy, France, Spain, USA etc.

And yes, Governments can and do manage the whole gamut of public services all the time. They're not perfect, and there is always room for improvement - just as is the case with any large organisation, public or private. Our Govt's problems are related to their abilities to administer. Our Govt's problems relate to the absence of any value system.


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## Smart_Saver (1 Oct 2010)

Hi
At this stage could this thread not be placed into the 'Rant' section ? It began with a reference to an Ex-IMF chief......way back 40 miutes ago when I began reading it. Now its onto signs on the side of the road.

This thread surely is now totally redundant.

Please guys - there is a DEDICATED section for "Letting off Steam".
If you want to make personal criticisms isn't that where they should be ?


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## Chris (1 Oct 2010)

PaddyW said:


> Just on that point Chris, I've noticed prices starting to rise out around my area, Swords. What would be your view on that, as I can't see any great rise in demand in the area.


Rental prices can only go up if there are people willing to pay the price. If prices are actually going up, I'm not disputing they are, then it means that there are either more people who want to rent in the area or less houses available to rent. This is what the law of supply and demand dictates.




Complainer said:


> I don't think Irish road signage is noticably better or worse than other countries. I've lost count of the number of times that I've got lost in Italy, France, Spain, USA etc.


I've got lost by car in Spain and Italy as well, but due to a lack of fluency in the respective languages, not lack of road signs. And on foot I have noticed that in all European and North American countries I have been to there is a street name on every corner, which makes it very easy to find your location on a map. I cannot say that for Ireland. A Canadian tourist looking for directions in Cork a few years ago was totally baffled when I told him that it was pretty much hit and miss with street names being displayed.




Complainer said:


> And yes, Governments can and do manage the whole gamut of public services all the time. They're not perfect, and there is always room for improvement - just as is the case with any large organisation, public or private. Our Govt's problems are related to their abilities to administer. Our Govt's problems relate to the absence of any value system.


No, they don't manage the services well they merely take responsibility and dictate a monopoly for the services, and they are making an abysmal job of it. Some countries may do better than others, but no matter where you go and ask people about the quality of public services they will always complain. But let's say that road signage actually is reasonably good here. What about all the other "services" that government provides, how many can you list that you can actually say are well functioning? 
This does not happen in the private sector. If a private sector company provides a product that people don't like, then they don't buy it and the company is forced to improve it or go out of business. The very opposite happens in the public sector, in that if the service is bad, then it is put down to lack of funding and more money is pumped in. But the service never improves in line with actual amount of money pumped in, because the incentive is not there to improve the service. And this is the case no matter what country or what political party is in government.


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## Bcommercial (1 Oct 2010)

Chris said:


> If a private sector company provides a product that people don't like, then they don't buy it and the company is forced to improve it or go out of business. The very opposite happens in the public sector, in that if the service is bad, then it is put down to lack of funding and more money is pumped in. But the service never improves in line with actual amount of money pumped in, because the incentive is not there to improve the service. And this is the case no matter what country or what political party is in government.



+1 Well said! ..and so therefore on, and on, the wastage goes. In fairness very many PS employees admit that they could make savings if listened to, but since it's always their superiors who make the decisions, and turkeys don't vote for Xmas, nothing changes! ...Maybe we're now entering into different times though...some sort of national consciousness appearing at last?


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