L
lightswitch
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My apologies Purple, I clearly mis-understood your first post as reading your response to mine would indicate. LS.
Is Ireland ruined, or is there a way out?
- Thread starter shnaek
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A bit OT, but can someone explain to me why Anglo could not be allowed to fold originally without any intervention by the govt?
If a business over-extends itself and runs up huge debts, it goes under. Why not a bank (or at least a bank like Anglo where very little of the deposits are held by the general public, I assume) ?
OK, so lots of private investors will lose their money. Is the fear that the govt could then let AIB, BOI et al do the same and so all investors will run and take their money out and leave the entire banking system insolvent?
Sorry for the OT query, but it's all related, isn't it ?
If a business over-extends itself and runs up huge debts, it goes under. Why not a bank (or at least a bank like Anglo where very little of the deposits are held by the general public, I assume) ?
OK, so lots of private investors will lose their money. Is the fear that the govt could then let AIB, BOI et al do the same and so all investors will run and take their money out and leave the entire banking system insolvent?
Sorry for the OT query, but it's all related, isn't it ?
Markjbloggs
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Because there are a lot of bodies buried in Anglo, and our political elite do not want us to know what they have been up to....
I was reading a bit about it at the weekend. Apparently the bondholders have about 15bn in Anglo, but have the same level of protection as depositors, so both would have to take a fall. This could make the Irish public nervous about having money in any of the Irish banks. Also, who are the bondholders? AIB and BOI perhaps? It is a real can of worms.
It is indeed a fascinating time, and a time when politicians did what they were meant to do, that is legislate and not interfere in the affairs of the public. You are right about Jefferson being suspect of the big capitalists, but more from the point of view that he feared crony capitalism and Hamilton's mercantilist ideas. He was in favour of free markets, opposed to The First Bank of the US, had read Adam Smith, Turgot and Ricardo, knew JB Say, and was outspoken against Hamilton's ideas of protecting corporations and banks.
While Hamilton got his way on many of these items, Jefferson decided that the constitution should specifically restrict the level of interference and power, through insisting on stating what it was and was not allowed to do.
Exactly, this is the main controlling and regulating function of the profit and loss system. Profits encourage risk taking, losses encourage prudence. Take a way the fear of losses and the system falls apart, just like it does in such regularity. This indicates a failure of government intervention, not of free markets, which simply do not exist.
This is exactly what our politicians would like us believe, that there would be a total and sudden collapse of banking and even society. Bankrupt businesses do not simply shut the doors, they are liquidated and sold off in pieces. Look at Quinn, it was declared insolvent, but for the customers it is pretty much business as usual.
This is a point that is often missed. People say capitalism brought us down and that we need more regulation - but we had plenty regulation, they were just utterly incompetent or corrupt. So what we are looking at is an increase in power and function for those that were incompetent or corrupt? Hardly the solution we need.
It also amazes me that people want bigger government when our government has been shown to be so useless. Why would anyone want more of it?
So the origional idea, as you pointed out, was the best. A government which legislates and interferes as little as it can in the day to day affairs of the people.
Complainer
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Because there is absolutely no hope in hell of the private sector providing equal access to essential services for everybody.
Yes, but we don't separate the legislature and the executive and that’s the biggest failing of our governmental model. Our electoral system only exacerbates the problem but it doesn’t cause it. It’s amazing that the Founding Fathers of the United States, with no template or examples to work from, instinctively understood this 230 years ago and we still don’t.
I’m a liberal so I am in favour of individual rights and minimal governmental interference. The problem here has been crony capitalism coupled with a ham-fisted attempt at social(ist) engineering aimed at an ill thought out “Social Justice” agenda. You put it very well yourself in this thread when you said “Equality is a term bandied about a lot, but the reality is that you either have equality or liberty - you cannot have both. And if that is the choice to be made, then the choice must always be liberty”.
Why would that require bigger government?
I hold much the same views, and it annoys me that socialists have stolen the 'Liberal' tag and applied it to their own ideas of equality and social engineering. The real liberals need to reclaim this tag and put it back in it's place - that of liberty.
And you think our government have been such a success in this regard that we should give them even more power?
Complainer
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Nope - I don't.
Feel free to attack for my views, but please don't try to put words into my mouth.
I was attempting to ascertain the foundations upon which your view was based.
You beat me to it. It annoys the hell out of me that when I tell people I'm a liberal, I have to annotate that I am a classical liberal. I am not sure whether the Orwellian Newspeak, i.e. liberalism, as in neo-liberalism = socialism, will be reversed any time soon, and personally I rather spend my time on arguing for the fundamental ideas. It's nice to see like minded people around that are putting in the effort to highlight that government is the source of not the solution to our problems.
But the problem with this is that governments have increased their size in order to take on the delivery or control of ever more "essential" services, resulting in all the services being at best mediocre.
Here are some of our "essential" services to name just a few:
1) Agriculture, fisheris and food
2) Heritage and Local Government
3) Tourism, Culture and Sport
4) Enterprise, Trade and Innovation
And all of these are filled with committees, agencies, offices, etc. And while all these extra services are being provided, the most essential ones (health, education, justice/policing) are in such a dire state that you would think the boom of the last 15 years never happened.
The main role of government should be restricted to protecting the citizens from foreign or domestic violence, and enforcing property rights. I'll even accept if they take on education, a Swiss style health system and some infrastructure. But until they manage to provide this at an adequate level, they should not be taking on extra responsibilities that they pay for through taxation in order to provide a crap service, and get their hands out of the free market.
A look at the international money pages gives the thumbs up to Ireland's management of this economic hole. The WSJ has OK'd it, The Herald Tribune has wafted to and fro. But the overriding comments overseas is that Ireland's media and opposition parties keeps crucifying and regurgitating the bad news like a pernicious mother-in-law. Stephen Stanley says that USA's figures do not herald a double-dip ......... but that doesn't stop the homegrown soothsayers in the opposition from flinging this cliche around (like snuff at a wedding). Ireland (and the world) will get over this ........ much to the chagrin of the Jeremiahs.
Do you know why they think we're doing well? Because the Government has chosen to protect foreign investors. Their analysis has nothing to do with what's best for Irish citizens.
Complainer
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Your faith in the free market is quite touching. I have absolutely zero faith that the free market will take any role in keeping BSE out of the Irish cattle herd, or protecting our national heritage, or keeping 'bungalow blitz' planning out of our rural areas. I'm no expert, but I'd imagine there is a pretty good return on the Govt services to tourism and sport. We've seen the US take on 'small Govt'. Small Govt is great for those who have the funds/resources/networks to ensure they stay on top of the pile and exploit the rest. For those not on top of the pile, it doesn't tend to work so well.
Some public services are indeed crap, and fundamental changes and improvements are needed. But that is no arguement for a fundamental shift towards Small Govt. You don't fix an ingrown toenail by amputating above the knee. You fix the toenail.
By what reasoning would the free market not keep BSE out of the system? If a farmer's herd is infected, it will have to be killed off meaning a major loss and possible bankruptcy. Therefore there is every incentive to ensure that the herd does not get infected. The free market punishes bad behaviour. The role of government would be to protect citizens from physical harm, and if BSE in cattle is scientifically proven to harm human's then any action taken to bring infected beef to human's would be akin to poisoning, which is a criminal offence. This is actually a role that government should have.
The problem with claims of "good return" on government spending is that you cannot possibly calculate what the actual return is. Take tourism, while I don't have their budget figure at hand, they do spend millions sending people abroad to "promote" Ireland and in other campains. How many people actually come here because of this advertising is not knowable. The tourism industry would be better served with less taxation and leaving it up to individual businesses, or groups of businesses, to promote their services directly. Governments are the biggest wasters of money, I don't think anyone can argue with that. If the tourism industry used their own funds, you could be damn sure they would make the best use of it.
Why do you assume that society wouldn't protect "national heritage". If society or part of society believe it worth protecting then they will do so, making better use of available funds.
The US is hardly an example of small government, it is one of the largest and most bureaucratic systems in the world, with an impossible maze of government agencies. If you want an example of small government working well, then take a look at Switzerland.
But how do you fix a service that when it misallocates money and provides a crap service, is rewarded with more money. It just doesn't work! Private companies often introduce new products and services, but if they cannot get them right they abandon them. Government does the exact opposite, it throws more money at it, and in many cases creates another bad service to counteract a bad service. To extend your analogy, if the ingrowing toenail has caused infection and gangrene, then there is only one option.
Markjbloggs
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You know that bit in "Titanic" where the ship hit the iceberg and broke in half, but then stayed afloat for a while. Well I think we are at that point - and based on credit stress indications this morning, this may well be the time to jump overboard before the rest of it sinks.
Have a look at the Irish 10 year
http://www.bloomberg.com/apps/quote?ticker=GIGB10YR:IND
Bad and getting worse by the minute .......
Have a look at the Irish 10 year
http://www.bloomberg.com/apps/quote?ticker=GIGB10YR:IND
Bad and getting worse by the minute .......
I accept this is not entirely on topic but it is interesting to see the differing approach of the Irish public versus those of Greece and more recently France.
I am not arguing the rights or wrongs of such actions but surely, by our actions, we have accepted that austerity measures must be taken? Otherwise, would there not have been hundreds of thousands on the streets when the retirement age notched up to 68? It was accepted here with not more than a shrug, as if it were a fait accompli.
So I guess I am saying that we must have some hope as a nation if the public begrudgingly accepts that actions must be taken.