IMF loan - what's not to like

Complainer said:
Again, nothing to do with hindsight. Labour had the foresight to oppose the unlimited bank guarantee. That's a matter of public record.
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Sure what else are they going to do in opposition other than oppose everything the government do?

We have no idea what Labour would have done if they were in power in the same situation (rather than on the comfort of opposition benches) and we have no idea whether our whole economy would have been done irreparable damage if Anglo and INBS depositors (as well as the bondholders) were burned so spectacularly.

Complainer said:
I guess you'd have tried the Bertie/Brian/Brian approach of blaming Lehman's for all our woes instead.
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Do you not see the irony here, you're the one looking for scapegoats to absolve yourself of any possible involvement in the mess right down to believing that your vote for Labour would have somehow saved the country and all those who voted FF were the villains.
 
Can someone ask Complainer a question (I’m on his ignore list because he doesn’t agree with my views. I however am in favour of free speech and am open minded). Anyhow. question; In relation to the banking crisis what would Labour have done instead and how much would it have cost?
 
DerKaiser said:
Sure what else are they going to do in opposition other than oppose everything the government do?
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Oh enough with the melodrama. The other opposition parties, FG, the Progressive Democrat and SF all went along with the unlimited bank guarantee. Opposition don't always oppose everything. Labour showed the foresight and judgement to know that the unlimited guarantee was a bad idea.

You have a pretty good idea of what Labour would have done based on their voting record. They opposed the unlimited guarantee. They would have struck a better balance between protecting taxpayers, protecting depositors and protecting bondholders. There was no balance in the FF solution.

And while the impacts and outcome of this are somewhat hypothetical, we know that we would have a spare €50 billion or so floating around to cushion any blow.


I think I see where you're coming from. FF have been in power for the last thirteen years, therefore our economic problems are Labour's fault.

Illogical, Captain.
 
The only way we can save ourselves from Labour is to vote FF in the election (Labour have always maintained they wouldn't go into gov with FF). This also gives us the Brucey bonus of saving us from Enda. What with the IMF and ECB in control anyway, would FF be such a bad thing? (Tongue in cheeck)
 

There's a strong possibility there could be no money in the country if Labour's position came to pass.

The ECB have prevented a run on our banks for the last two years (with funds measured in hundreds of millions) and propped up our whole financial system in doing so.

The conditions attached to this are not consistent with burning depositors or bondholders.

You can choose to believe:

1) Anglo and INBS operate in a vacuum and burning their depositors and bondholders would have been a situation that could have been contained with no further contagion or threat to our ability as a country to independently raise funds to pay for public sector wages, the health service, etc.

2) That the EU would have stood by and tolerated this

I believe, however, it would be very naive to dismiss the probability that labour would have had to dance to the tune of Europe in order to avoid the country grinding to a halt.

I could put forward a hypothesis that they would have been pig headed and crashed the entire financial system, but I simply believe Europe would not have permitted them to do this.

Complainer said:
I think I see where you're coming from. FF have been in power for the last thirteen years, therefore our economic problems are Labour's fault. Illogical, Captain.
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I'll help you with the logic, we have no way of knowing where we'd be if labour had been the ones in power.

One thing we do know is that the Eurozone would not let the situation play out in a way that threatened the stability of the Euro.

You should probably stick to the line that Labour would not have got us into the situation we were in by 2007/2008 in the first place rather than trying to envisage how they might have saved us from that point.

It's a lot easier to avoid awkward explanations in that hypothetical situation, just claim they would have been smarter about regulation, no one can argue with that.
 

We can agree on one thing - we have no definite way of knowing where we'd be if Labour had been in power. So let's look at what we do know for definite.

FF have been in power for the last 13 years, and for 15 out of the last 17 years. FF have driven this country into the arms of international moneylenders. A generation of Irish workers will be paying huge amounts of tax and forgoing important public services to repay money lent at punitive rates by ECB/IMF. Much of the money lent by ECB/IMF will go back overseas, to repay debts owned by German/UK/other foreign banks.

FF underwrote an unlimited guarantee of all Irish banks in Sept 2008, including Anglo and INBS. Labour opposed the unlimited nature of this guarantee at the time, and opposed the inclusion of Anglo and INBS as 'systemic'. Patrick Honahan's investigation into the guarantee confirms that went too far. He said "The extent of the cover provided (including to outstanding long-term bonds) can – even without the benefit of hindsight – be criticised inasmuch as it complicated and narrowed the eventual resolution options for the failing institutions and increased the State’s potential share of the losses."

This not hindsight. Labour would not have underwritten an unlimited guarantee that included Anglo and INBS. Labour would not have taken the actions that caused the run on Ireland to take place. Labour would not have driven Ireland into the arms of the moneylenders.
 


In relation to the banking crisis what would Labour have done instead and how much would it have cost?
 

Because of what FF did, voted and agreed by the Irish people, we need the IMF to sort us out because we as a people are incapable of voting for anyone who is competent enough to run this country properly. Wonder has anything changed on that score. We'll soon see I guess. Meanwhile at least we have the IMF.
 
Bronte said:
we as a people are incapable of voting for anyone who is competent enough to run this country properly.
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In fairness to us, I don't think we are now (or have been in the recent past) presented with anyone competent to run the country - my voting has generally been reluctantly for the lesser of two evils.

I would like a system similar to France where actual competent people can be appointed to important government jobs - eg Christine Lagarde to Finance.
 
orka said:
I would like a system similar to France where actual competent people can be appointed to important government jobs - eg Christine Lagarde to Finance.
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Finance should be taken away from politicians. Overall budgets should be set independently and politicians can spend money as they see fit but the days of politicians using the National Finances as a political tool have to end.
 

How would Labour not have caused the run on Ireland? You still haven't answered the question. All Labour suggested was nationalising the banks. What would have happened then?
Also, that is very selective quoting from Honahan's report. He actuallly agreed with the guarantee scheme and he agreed that Anglo was systemic. He only disagreed about the inclusion of exiting debt in the guarantee scheme.

Pointless argument anyway. I couldn't care less about what could or should have been done. If Labour can show me they are the party to take us out of this mess, they will get my vote. However, I remain to be convinced. Same goes for FG although they have upped their game in recent times by keeping Enda under lock and key. (And before you ask, I am not voting for FF)
 

As someone less familiar with Labour policy suggestions, could you clarify how Labour would have achieved this? Over the past 2 years I have not heard one politician advocating one hard and short adjustment through defaulting on debts and liquidating banks. It was always said that that would put Ireland in a position like Iceland. Strangely enough Iceland is now on a path to recovery with less debts.
 
Sunny said:
Finance should be taken away from politicians. Overall budgets should be set independently and politicians can spend money as they see fit but the days of politicians using the National Finances as a political tool have to end.
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Wonderful idea, but I think it is an over-complicated solution. How about a law that simply forbids governments to borrow for any expenditure. Debts have to be paid back out of taxes, but debts allow for taxation to be deferred thereby obscuring them from view; and politicians do not exactly have a long term view when it comes to finances. For the public there should be no difference between increased taxation now or debts that increase taxation later. However, the majority of people wrongly do not look at it this way.
If politicians had to finance all expenditure through taxation, they would be forced to convince the public of every tax increase. This is a much more honest approach and keeps a check on government spending.
 

Certainly worth examining Chris. I don't have a problem with debt in certain circumstances though. I do have a problem with debt to meet day to day expenditure. The Eurobond idea floated yesterday is interesting in that it attempts to deal with this issue.
 
Sunny said:
. I couldn't care less about what could or should have been done. If Labour can show me they are the party to take us out of this mess, they will get my vote.
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Pity more people didn't think like that. More's the pity that no one party is showing how they will take us out of the mess.
 
Bronte said:
More's the pity that no one party is showing how they will take us out of the mess.
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I'm with Chris on this - the more governments get involved the worse they will make it. It's IMO akin to the Gardai taking over the traffic lights - jams on all sides. We need a smaller government will a lot less "fat" around the edges. I'd reduce corp tax even further to send out a very important message to the ECC/IMF and more importantly to those multinationals both here and contemplating on moving here
 
orka said:
I would like a system similar to France where actual competent people can be appointed to important government jobs - eg Christine Lagarde to Finance.
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Don't they do this in the US as well, where the Secretaries are often taken in from industry. It would be interesting to see an analysis or comparison of this.

Sunny said:
Finance should be taken away from politicians. Overall budgets should be set independently and politicians can spend money as they see fit but the days of politicians using the National Finances as a political tool have to end.
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Independently by who? If Govts don't control it, then who dies?

Sunny said:
How would Labour not have caused the run on Ireland? You still haven't answered the question.
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Labour would not have written a blank cheque to cover the debts of Anglo and INBS, in line with Honahan's position that came out two years later. The run on the Irish state was caused by market doubts/fears that the figures quoted to fix the banks were wrong, and that our debts were (and possible are) unmanagable.

Chris said:
Wonderful idea, but I think it is an over-complicated solution. How about a law that simply forbids governments to borrow for any expenditure.
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Strangely enough, I might even agree with Chris, but probably for different reasons. We have to get away from economic terrorism, where entire countries are at the mercy of a few financiers on Wall St or in London. Seeing these folks profit by shorting a country is revolting, and has to be stopped.

Maybe this can be done by international legislation and agreement. Or maybe it can be done by Govts simply avoiding the need to borrow.
 

Nobody dies. I am not saying the Government doesn't control expenditure or taxation policy. They do. They just get told how much they have to spend based on how much they raise through taxation. I don't care who does it. The Central Bank would be a good start. Just as long as it is someone who doesn't have an interest in buying people's vote.

Again, you are simply incorrect, Honahan who you seem to like has said that the Guarantee was the right thing to do. He did not say Labour's idea of nationalisating the banks was a good idea. Anyway, Labour got as far as nationalising the banks and then their ideas stopped. I want to know how Labour would have saved us from this mess like you claim. Nationalising the banks simply transfers the debts of the banks on to the National balance sheet anyway so what exactly were Labour suggesting?
 
I just don't get this. Why would a Central Bank (whose board is appointed by Dept Finance) be better at setting tax policy than Government itself?


I haven't mentioned nationalising the banks at all. To the best of my recollection, Labour's proposals for nationalisation came AFTER the guarantee was in place, and were intended as an alternative to the guarantee itself. Instead, the Govt flaffed around for another year before then proceeding to nationalise Anglo, and our kids will be paying the bill for this.

What I have said repeatedly is that Labour would have have put in place an unlimited guarantee for INBS and Anglo. How many more times do I have to say this?
 
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