While I haven't read the full article in detail I don't think that the author is equating actual human behaviour with rational human behaviour; I would certainly agree with that. People often behave in very irrational ways especially when bubble manias kick in and everyone tries to follow the crowd. But that does not excuse the bahaviour, when not all humans in all countries behaved that way.@chris, suggest you read first and then consider rational behaviour. Your combination of hindsight and self-righteousness is quite a heady naive mixture as your understanding of mental accounting, human behaviour and rational actors is manifestly flawed. In time we may become more German than the German's.
I don't think that the point was necessarily badly made I just think that your calculations were flawed. People were taking out mortgages for up to 7 or 8 times combined income. Friends of mine who bought in the 90s said that at the time the maximum you could take out is 3 times the higher wage plus one time the lower wage. This is the way it has always been in Germany and very similar in Switzerland (two countries that do not suffer from recurring real estate bubbles). But somewhere along the way people and banks decided that higher multiples were perfectly prudent, when even without hindsight they weren't.My point - probably badly made - was that even if you were cautious and applied sensible multiples back in 2005 (or earlier) you would still have been caught because no-one could have foreseen how bad this was going to get. Applying discounts based on what has happened would have meant that no-one would have bought.
This is where I disagree. I think that foresight should have told people that if you take out a huge loan for a very long time then you have to make provisions for adverse financial conditions. Way too many people did not look at the possibility of downside risk at all; it wasn't a case that they acknowledged it, but decided it wasn't a high risk, they simply did not take it into the equation at all.In fact taking out any mortgage or debt back then based on the PROBABILITY of reduced income/redundancy was, in hindsight, reckless.
Yes, you are right about the people who tried to warn us being silenced and ridiculed, but that does not excuse the fact that more people did not listen to them.Incidentally, Chris, the "official" voice of Mc Williams and a few others like him were advised to commit suicide by the most official voice of all -our beloved leader at the time - for daring to suggest any negativity.
steve -in reponse to the post prior to yours:-
- use of terms like " should have add the cop-on" , "looking to taxpayers to bail you out" are misleading and slightly offensive...
1) Are you saying that people should have known that buying property was such a risky business? That is, there was no need for the clever banks to issue any sort of warning to inexperienced buyers, as opposed to banks constant persuasion to buy? Did more than 1% of the population believe that property would crash over 50% and that unemployment would reach record highs ?
2) "bail you out" -I've never clearly understood this term .I think that you used it in the sense " pay for your debts" or "give you money ". Why take that extreme tone to people in difficulty? Some help, not "bail-outs" is what most need - help that need not cost "the tax payer" any more than not helping those in mortage trouble.
3) Your point about the "tax -payers" is assumedly because most banks are now owned by the taxpayer. The banks were stupidly guaranteed by the govnt and because of this crazy guarantee the banks were taken over . Absolute madness. But no way the fault of the individual person in trouble. If someone is looking for help ,or burden sharing from the bank this should not be denied because the govnt crazily took over the bank. Should banks deny loans to businesses because they are risking the "tax payers" money ?
Steve -you started your post "in fairness". It was anything else but fair.
Who is to blame for, the well documented view, that antibiotics are overused in Ireland ?
The foolish patient for demanding the antibiotic in the erroneous belief that antibiotics will cure illnesses that they don't or
The GP for prescribing the antibiotic ?
It seems fairly obvious to me that if the GP doesn't do the prescribing the patient doesn't get the drug ! I assume from some of the arguments on here that it's only the patient in this instance who should be held accountable or am I missing something?
Who is to blame for, the well documented view, that antibiotics are overused in Ireland ?
The foolish patient for demanding the antibiotic in the erroneous belief that antibiotics will cure illnesses that they don't or
The GP for prescribing the antibiotic ?
It seems fairly obvious to me that if the GP doesn't do the prescribing the patient doesn't get the drug ! I assume from some of the arguments on here that it's only the patient in this instance who should be held accountable or am I missing something?
no ordinary hard working decent person could have known what was coming
It seems fairly obvious to me that if the GP doesn't do the prescribing the patient doesn't get the drug !?
I'm afraid they have to share part of the blame. They fuelled the demand, many lied about their income. It was a state sponsored ponsi scheme. Some people recognised it as such, many did not.
I can imagine thousands like me out there, honest but being treated like dirt.
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