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When Irish Eyes Are Crying

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Re: When Irish Eyes Are Crying

#61

Post by greenmachine »

Padraig wrote: post #42
greenmachine wrote: post #28

Earlier quoted context omitted.

Not much of a comparison between Ireland and Egypt obviously. That's why the comparison to France is more appropriate: where the people were actually unwilling to take it lying down - as they are doing in Ireland. It doesn't matter that a general election has been called. With the poverty of leadership in Irish politics at the moment, Ireland is in for more of the same incompetence that led to the current disaster fr…

I wonder about that. I view our (lack of) reaction as mature, not passive. People died in Greece and they burned all kinds of things. They still have a huge debt to pay back. We're taking it like grown ups and having an election.

If you have to choose between a mature reaction that keeps you in debt and an immature reaction that leads to reversing the bad decisions that have been made at the citizens' expense, I would take the latter. But most Irish seem too concerned about their precious "international reputation" to do that - I hear this refrain all the time. Many people seem more concerned with the effect of the crisis on Ireland's reputation abroad than with the impact on current and future generations. "Taking it like a grown up", as you put it, is not the highest aspiration one can have in this situation - you could simply refuse to accept the situation and create such a stink that nothing can happen in the country until some of these devastating economic decisions have been reversed. If Iceland can get away with it, Ireland can too.

Re: When Irish Eyes Are Crying

#62

Post by greenmachine »

fdghjkh wrote: post #51
greenmachine wrote: post #5

As someone currently living in Ireland, I found the subtitle of this article particularly appropriate: "Where's the rage?". The Irish government bankrupted the country many times over by putting the debts of the banks on the backs of the people. But, unlike France, for example, where people have taken to the streets and brought the country to a halt to be heard, in Ireland there is nothing like the level of activism…

Best reply I heard was an interview with a new graduate. "We will just do what we have always done when the government fucks-up - we emigrate!"

In France the corresponding response would be:

"We will just do what we have always done when the government fucks-up - bring the country to a standstill!"

Re: When Irish Eyes Are Crying

#63

Post by fdghjkh »

Padraig wrote: post #47
fdghjkh wrote: post #45

Earlier quoted context omitted.

There's a great book written by a civil servant in Ireland's foreign ministry in the 80s. He said he had two maps on his wall, one of the eastern bloc enemy and a bigger one of his minister's constituency - a crisis (eg a pothole) in the constituency was the priority.

Ha! That doesn't surprise me at all. What's the book called? There is an appetite to reform this stuff now, but it's hard to imagine the winners of the game when played by those rules deciding to change it dramatically.

Don't remember - got stuck at Dublin airport once and it was the only book not about whiskey, your Irish ancestors or pictures of green fields

Re: When Irish Eyes Are Crying

#64

Post by patrickk »

watchandwait wrote: post #24
dpapathanasiou wrote: post #14

It's interesting to compare Greece and Ireland. Greece was profligate, openly cooking the books since at least 2002 ( http://en.wikipedia.org/wiki/Greek_Financial_Audit,_2004 ) whereas Ireland was doing the noble thing by imposing austere measures on itself. Yet both needed bailouts by the EU recently, and both will probably wind up defaulting.

Ireland and Greece are COMPLETELY different. Greece's government budget is wildly fraudulent. Ireland's government was responsible, but decided to encumber taxpayers with private banking losses. Irish voters, like those in Iceland, may yet reject this deal. I know I would. The international banking cabal has captured the "democratic" processes across most of the West and is using those governments to plunder their pe…

"Ireland's government was responsible...." absolutely untrue.

"As a small, open economy, Ireland was always going to be vulnerable to global swings," says Ray Kinsella, an economist at University College Dublin. "But this is predominantly a self-inflicted crisis."

http://www.businessweek.com/magazine/content/10_48/b42050820...

There was an expensive, taxpayer-funded study done (can't seem to find it atm, but if you Google around you may find it) which basically concurs with the above statement - our crisis was largely our own making. The international credit crisis may have accelerated it slightly, but it would have happened eventually anyway.

I attended a great presentation by a guy called Ed Walshe, who is the former president of one of Ireland's biggest colleges (http://en.wikipedia.org/wiki/Edward_M_Walsh) where he laid out in black and white all the idiotic stuff the government got up too when times were good. Things like massively increasing the numbers of civil servants - not in front line services like doctors, nurses and teachers; but useless bureaucrats in offices in Dublin, massively increased civil servant pay - way ahead of inflation (this effectively bought them popularity for the next election), cutting income taxes across the board, 'throwing gasoline on the fire' by giving extra tax breaks to property developers (section 23 and section 50 tax breaks) when things were extremely overheated and the brakes should have been applied etc. etc. I can dig up a copy of the presentation on my hard drive if you are especially interested.

Also adding to the problem was non-existent regulation of the banks and construction industry in general. The head of the construction federation was a guy who was former Fianna Fail (the main party in government). The head of the banking lobby was a former member of a party that was in power with Fianna Fail. Basically at the highest levels in Ireland the whole scene operated like a gigantic old boys' network that would put things to shame in most other parts of the world.

Re: When Irish Eyes Are Crying

#65

Post by Padraig »

greenmachine wrote: post #61
Padraig wrote: post #42

Earlier quoted context omitted.

I wonder about that. I view our (lack of) reaction as mature, not passive. People died in Greece and they burned all kinds of things. They still have a huge debt to pay back. We're taking it like grown ups and having an election.

If you have to choose between a mature reaction that keeps you in debt and an immature reaction that leads to reversing the bad decisions that have been made at the citizens' expense, I would take the latter. But most Irish seem too concerned about their precious "international reputation" to do that - I hear this refrain all the time. Many people seem more concerned with the effect of the crisis on Ireland's reputat…

My argument is that violent protests would do very little to help. We're having an election that will throw the ruling party out. The next government are campaigning on the basis that they'll get a better deal. I doubt they will succeed, but rioting on the assumption that the problems can be decided away won't make it any more likely.

Re: When Irish Eyes Are Crying

#66

Post by benohear »

sp332 wrote: post #16
seanalltogether wrote: post #12

Earlier quoted context omitted.

Whenever I hear about people wanting to break away like that I'm always reminded "There's strength in numbers". As the world economy starts to flatten out, we're all learning that it comes down to a population game. I wonder if we'll see a point where two countries vote to merge together to create a stronger economy.

See: the European Union. Shared currency, very little restriction to travel and trade, made it possible to compete economically with the UK.

But which is actually worse off right now? If the currency markets are anything to go by, the GBP has sunk from 1.5 to 1.2 Euros, and that's after the beating the Euro has taken in recent months.

Re: When Irish Eyes Are Crying

#67

Post by benohear »

yequalsx wrote: post #37
duke_sam wrote: post #26

The bank bailouts made very little sense, the biggest toxic bank, Anglo Irish Bank, was not a retail bank. They specialised in property financing. Letting them go under would not have resulted in the Irish Government having to cover huge amounts of deposits. The current majority party (Fianna Fail) has a history of connections to property developers and this connection is what a lot of people though spurred the savin…

I'm in Berlin now and it appears the Germans feel these so called bailouts are rescuing countries that don't have their affairs in order. I think these bailouts are mostly to prop up German and French banks. Banks in Europe and the U.S. have finally figured a way to socialize their losses and privatize their gains. Big bonuses are still the norm at American banks even though it was their bad bets that led the U.S. to…

I think both are true: Those countries do not have their affairs in order and it is also propping up the banks.

Re: When Irish Eyes Are Crying

#68

Post by benohear »

fdghjkh wrote: post #49
bhavin wrote: post #7

Pardon if I deviate a bit from the main topic. I live in Ireland, and it was quite disheartening when the last budget cuts appeared. Taxes were increased across the board. If you were earning 25,000 Euros a year, you would pay an extra 1000 Euros in tax (and surprisingly enough, this low earner class was the worst beaten income group by hike in tax in percentage terms - 4+% more tax!). Since its general consensus tha…

The UK spent the last 10years in a period of genuine economic growth - but still managed to increase it's national debt. There is no limit to how much government's can spend, however they get the money!

Until 2002 it was actually going down. Then the increase was moderate and it finally exploded in the 2007 recession.

Re: When Irish Eyes Are Crying

#69

Post by benohear »

patrickk wrote: post #57
sp332 wrote: post #16

Earlier quoted context omitted.

See: the European Union. Shared currency, very little restriction to travel and trade, made it possible to compete economically with the UK.

Yes, the EU has those advantages, but it's bloated, unwieldy, mainly tries to serve the interests of Germany (biggest economy) and is ill-structured to deal with the type of problems currently affiliating the 'peripherals' (or 'PIGS': Portugal, Ireland, Greece, Spain). The features of a common monetary policy are great when times are good, but allows the problems of one nation to spread like a virus when times are ba…

I find that statement a bit weird. Germany are on the hook for something like 120 billion in this bailout. That's €1500 for every man, woman and child in the country.

And that's after essentially funding the EU for the past 20 years. Though things have levelled a bit of late, they used to have net contributions about 3x higher than the next one (the UK).

Re: When Irish Eyes Are Crying

#70

Post by ebiester »

yummyfajitas wrote: post #33
ebiester wrote: post #27

Earlier quoted context omitted.

On the other hand... for the equivalent square feet in Tucson, my rent went up 50% over a decade for the same square footage. When you see your rent go up so drastically, while everyone is getting low interest rate mortgages, you start to question your "fiscal responsibility." If I had bought in 2006, I couldn't have sold my property today. However, we didn't know where the "new normal" would even out. People took on…

People took on these home loans, in most cases, because of the fear of rent increasing past their ability to pay. This is one of the most retarded ideas I've ever heard. Renting: a small, liquid, short duration, unleveraged short position. Owning: a large, illiquid, long duration, highly leveraged long position. So basically, to follow a short term trend, people decided to tie up a large chunk of their life savings i…

It gets more complicated than that.

Historically, a person put 20% down on their property as a down payment. The interest rates were high, at least 8%, sometimes over 10%. Take the house in 1970s tucson that was $30,000. Interest rate was about 10%, the down payment was 6,000, so the payment was about $250 a month.

Now, drop the down payment requirement, and drop the interest rates to 5%. that same $30,000 dollar property suddenly costs about $175. But, there are plenty of people who can afford $250. So, they value (perhaps erroneously, but follow me here) the object not as its purchase price, but rather as a comparison to what they pay as rent.

Suddenly, people are valuing the property as $45,000. But more importantly, people who don't have savings but have income are looking and saying, "I can afford a house!" Thus, demand rises along with the perceived value of the property. Then, the people with rental property look at increasing mortgages and adjust their rental properties' prices accordingly. Investors look at increasing prices and create a follower effect. Demand increases.

Rent increases. The bubble has renters facing higher costs looking at property not as an investment, but as a hedge against increasing rent costs. This isn't necessarily a bad decision: consider if you are buying in 1999. You can barely afford the property, but you are averaging 3% raises. That $35,000 salary in 1999 is $48,000 in 2010, but the housing cost is the same.

The problem is if you run into this in 2006.

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