In simple terms - why is the EU bailout so bad for Ireland?

[RIAD_BSC]

David McWilliams on RTE this morning saying exactly this. They played a clip of him on the Marian Finunace show from Jan 2009 and what he predicted then is what has panned out. He made this suggestion back then. Pity no one took notice.
He reckons we were in a much stronger position then to look for help and the government have basically been bluffing for the past 2 years.

I wish people would stop lionising McWilliams. In his book Follow the Money, he boasts that the banking guarantee was his idea, cooked up in his kitchen one night with Brian Lenihan. The guarantee is what is killing us. McWilliams is a skilled self-publicist, nothing more.

 

[Complainer]

I agree, the problem was not some obscure, hidden item in the balance sheets, that required hundreds of people to try and figure out. This is such a typical move by government: something is not working so lets through money at it.

The warnings were given, as far back as 2000. From http://www.independent.ie/opinion/l...ell-on-deaf-ears-1567890.html?ref=patrick.net

the article in the Irish Independent on December 20 2000 by Geraldine Collins and Brendan Keenan: "The Central Bank yesterday issued a warning that house prices could fall 'quite dramatically'. It cited the example of other countries which had experienced house price inflation on the same scale as Ireland. There has not been a single episode of such inflation which did not end in prices 'falling, in some cases quite dramatically', said the bank in its winter quarterly bulletin.

But no-one wanted to hear it, right?

 

[Chris]

But no-one wanted to hear it, right?

I agree that there were plety of warning signs that were completely ignored. But do you think that 400 more employees at the regulator and or central bank would have made a difference? That they would have come up with some magic legislation?
It is not failure of regulation that led us here but failure to allow free markets to impose the full force of the profit and loss system.

 

[Shawady]

I wish people would stop lionising McWilliams. In his book Follow the Money, he boasts that the banking guarantee was his idea, cooked up in his kitchen one night with Brian Lenihan. The guarantee is what is killing us. McWilliams is a skilled self-publicist, nothing more.

I'm certainly not lionising McWilliaims but if you heard his interview from Jan 2009, he predicted exactly what is happening know. Back then the government led the public to believe the bank bailout was the 'cheapest in the world'. They have been spoofing for 2 years and have been found out.
I'm sure McWilliams is not right every time but if he is just a self-publicist, why did our garlic-munching MOF run to him for a crash course in economics on that night?

 

[Purple]

I agree that there were plety of warning signs that were completely ignored. But do you think that 400 more employees at the regulator and or central bank would have made a difference? That they would have come up with some magic legislation?
It is not failure of regulation that led us here but failure to allow free markets to impose the full force of the profit and loss system.

You quoted complainer there not me... I'm sure he'll love that!

BTW, I agree with your post above.

 

[Chris]

You quoted complainer there not me... I'm sure he'll love that!

BTW, I agree with your post above.

Hehe, oops! Corrected it there.

 

[Complainer]

I agree that there were plety of warning signs that were completely ignored. But do you think that 400 more employees at the regulator and or central bank would have made a difference? That they would have come up with some magic legislation?
.

Yet again, you seem to be a bit confused about how things work. Regulator staff don't write legislation. Government Ministers set policy, and the relevant departmental staff write legislation, along with the AGs office.

 

[Chris]

Yet again, you seem to be a bit confused about how things work. Regulator staff don't write legislation. Government Ministers set policy, and the relevant departmental staff write legislation, along with the AGs office.

So the regulator's office provides no recommendations or feedback (however bad or good) on financial regulations? You're not serious are you?
You are also not answering my question. Do you think that 400+ more employees would have made one bit of a difference 10 years ago, or will make a difference in the future?

 

[Complainer]

So the regulator's office provides no recommendations or feedback (however bad or good) on financial regulations? You're not serious are you?

I'm very serious about what I said - that the regulator's office don't write legislation. Please stop twisting my words into something else.

You are also not answering my question. Do you think that 400+ more employees would have made one bit of a difference 10 years ago, or will make a difference in the future?

Yes - absolutely, more/better resources in the regulator's office and the ODCE would certainly make a difference, as the current regulator is proving.

 

[belview]

David Mc Williams is a very clever fellow but he is a prima dona economist.

Why does he not stand for election to the DAIL for either Fine Gael or Labour and put his talents to use for the country instead of pointing out all the mistakes made by others over the last few years.

It will take perspiration as well as inspiration to get us out of this mess.

Once the new government gets into office the lights should not go out in government buildings until we have regained our independence as a nation

 

[Chris]

I'm very serious about what I said - that the regulator's office don't write legislation. Please stop twisting my words into something else.

Your post made it sound like the regulator's office merely execute orders.

Yes - absolutely, more/better resources in the regulator's office and the ODCE would certainly make a difference, as the current regulator is proving.

This is the typical government answer, when something fails, throw more money and resources at it. In a previous post you correctly identified that there were very telling early warning signs that were ignored or deemed to be exagerated. It does not take 400 more people to correctly identify and assess now very obsvious warning signs. The financial mess is not a result of lacking regulation, it is a result of crony capitalism and an implicit guarantee that banks would not be allowed to fail.
And what exactly has the new regulator done that could fill anybody with confidence that such a crisis will not repeat again? This was a typical political move, just bring in new faces and claim that everything is fixed now.

 

[Complainer]

Why does he not stand for election to the DAIL for either Fine Gael or Labour and put his talents to use for the country instead of pointing out all the mistakes made by others over the last few years.

Probably because neither Labour nor FG would want him. We've had enough of celeb economists flitting into the Dáil on a whim.

Your post made it sound like the regulator's office merely execute orders.

No, it didn't. You have exaggerated and twisted my words again. My post just said that they don't write the legislation - no more, and no less.

This is the typical government answer, when something fails, throw more money and resources at it. In a previous post you correctly identified that there were very telling early warning signs that were ignored or deemed to be exagerated. It does not take 400 more people to correctly identify and assess now very obsvious warning signs. The financial mess is not a result of lacking regulation, it is a result of crony capitalism and an implicit guarantee that banks would not be allowed to fail.
And what exactly has the new regulator done that could fill anybody with confidence that such a crisis will not repeat again? This was a typical political move, just bring in new faces and claim that everything is fixed now.

And this is the typical libertarian response of criticising and undermining everything done by Govt. We clearly need more and better regulators, and we're seeing the benefits now of having the right people in these positions, e.g. Honahan has the cojones to tell people what's going on when FF are running scared.

 

[Purple]

we're seeing the benefits now of having the right people in these positions, e.g. Honahan has the cojones to tell people what's going on when FF are running scared.

I agree with this but it undermines your view that we need more poeple and more regulation. We don't; we just need the right people.

 

[ontour]

Honahan has the cojones to tell people what's going on when FF are running scared.

Honahan is good but the government playing out these negotiations in the media is not the way to go. Get in to the meetings with the IMF and get stuck in. Just because RTE and TV3 want to have it all out in the open does not make it the right way to do it.

All the media attention about corporation tax is just making it more of a topic for consideration. Now is not the time to pander to the media.

 

[Chris]

And this is the typical libertarian response of criticising and undermining everything done by Govt. We clearly need more and better regulators, and we're seeing the benefits now of having the right people in these positions, e.g. Honahan has the cojones to tell people what's going on when FF are running scared.

I do not critisise everything done by government, only the non-essential ones, so let's not get carried away there. We clearly do not need more regulators; regulators throughout the world were unable to foresee the mess (including Honohan), while there were plenty of economists warning of the monetary, fiscal and banking policies and practicies in place. Honahan may well be a better man for the job, and telling the public what's going on certainly is an improvement, but so far he has achieved nothing that would fill anyone with confidence. No new regulations are in place to avoid these problems; not that I believe there is a regulation that could avoid future crises, other than making it illegal for government to bail out private enterprises.

 

[bullworth]

The blame lies 100% squarely on the shoulders of Fianna Fail. They had absolute power over legislation and regulation for most of the last 20 years. They were the government. The government. Think about it and everything being the government means. They've promoted greed, dishonesty and corruption in almost everything they have done. I am thinking back over the last decade when the Bacon Report was ignored while tax reliefs were given on prime property which never needed any, the Freedom of Information entitlements of people was restricted etc because telling the truth to those you are elected to serve was inconvenient and against the interests of the party. We still do not have free access to the information about what happened inside the banks and noone wants to be accountable. Noone has been jailed yet the effects of this crisis will mean more suicides and poorer medical care resulting in the deaths of thousands of people. Government is a serious and grave thing yet FF appears to think it is something decided over in the Dail bar or at a racing tent. The power we give them every 5 years is a grave responsibility. Not the joke they have twisted it into.
It was all happening in plain sight but the media in bed with the government kept up the propaganda to keep the ordinary person's mind weak with soap operas and irrelevencies.
If Bertie/the FF government did not like what the regulator said he would have replaced him with a different puppet more grateful for the carrot of Senate seats, pension payments and golden handshakes etc. The whole apparatus of the state and media works on this principle. Its all puppetry with the left hand while the government tries to point the finger of blame away from themselves with the right hand.
They were the government , a serious, grave and honorable position which they have dishonored and made a joke out of. They cannot handle responsibility and accountability. They cannot be truthful. They have always put the party and its hangers on before the country for as long as I can remember. It looks to me like FF are not fit to be in government ever. We are where we are but like all serious crimes , punishment must follow otherwise no banker or conartist will fear to ridicule our Republic again. And thats what FF have done as our government. They have repeatedly disrespected and ridiculed the sacredness of high office.

 

[Bcommercial]

Wouldn't argue with that!

 

[ontour]

Bullworth, I agree with a lot of what you have said but they did what the people wanted. The Irish electorate thrive on the 'cute 'hore' mentality, we re-elect people found to be corrupt.
There is also an inference from you post that we would be living in some Utopian bliss if the opposition had been in power. There would be many things the opposition would have done better but probably an equal number that would have been done worse. Do you think a US MNC would meet Eamon Gilmore and think that this is the country they want to be in?
For these reasons serious electoral reform is required before the next election or we will have wasted the current pain and turmoil.

 

[Complainer]

Do you think a US MNC would meet Eamon Gilmore ?

Of course they would. Paul Rellis, MD of Microsoft Ireland was a speaker at Labour's pre-budget economics seminar last year.

He wasn't a great speaker, as it happens!

 

[Purple]

Of course they would. Paul Rellis, MD of Microsoft Ireland was a speaker at Labour's pre-budget economics seminar last year.

He wasn't a great speaker, as it happens!

He was invited and he went. It doesn't mean he likes Gilmore.