I'm reasonably convinced McWilliams is either a fool or a liar: isn't he one of the people delighted by the idea that the government is prolonging the economic slump here by insisting on anti-stimulus? He's building a story to distract blame from the Anglo-American style economics.
However his biggest mistake was to adopt pro-cyclical fiscal policies - reducing personal taxes at a time when the economy was already booming. This exacerbated a previous Fianna Fail Governments mistake of abolishing rates on private properties which destroyed the funding base of local authorities and led to the property boom.
Ireland probably has the highest home owner rate in the EU - not necessarily a bad thing in itself - but it created a huge class of people whose political interests were linked to zero property taxes and ever increasing property values.
This was Fianna Fail's answer - latter copied by Margaret Thatcher - to create a property owning bourgeois who would head off the rise of Labour and other left wing parties. The problem is prices inflated to crazy levels both becuase of the lack of propertry taxes and the availability of cheap credit from unregulated banks.
Now we have a huge class of property owners in negative equity, borrowed to the hilt, foreclosing as thier jobs go, and very vulnerable to even a tiny interest rate rise. No Nama for them. This is the economic reason why Fianna Fail's days as the dominant political party are probably over. notes from no w here
The Irish political system has been remarkably resilient and stable, and I don't expect a revolution or a left/right split on the European model any time soon. But their has been a consistent long-term decline in the Fianna Fail base in any case - from their 50%+ vote in 1979 to c. 40% in recent elections and less than 30% if current opinion polls are actually realised at the polls.
However the PDs, Sinn Fein and the Greens are also imploding somewhat - so there is a huge vacuum for someone to fill - hopefully not by some demagogue playing on people's fears. In the short term I would see this being filled largely by Fine Gael - and then by Labour as Fine Gael inevitably fail to address the core issues. But its all to play for. notes from no w here
The problem with Fine Gael is that they are almost "owned" by big business and the professional classes - and these are the quasi-monopoly operators who are really increasing our economic and social cost base at the moment.
But whilst I see Labour also being a major beneficiary in the short term, and perhaps the major beneficiary going forward, I don't see a huge ideological transformation of the country happening just yet.
People are looking for scapegoats - the banks obviously, and the Government - perhaps even the Eurozone a la McWilliams. But blame the Irish elite? Never! notes from no w here
I'm not sure I buy your contention that it's the professional classes what done it - and in most their income seems to have taken a pretty serious hit from the recession as far as I can tell. Probably much more serious than most middle earners (except those who lost jobs).
Isn't that prima facie evidence that it's them who dun it? En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
Who benefitted from the bubble while it was going on? If your income is strongly correlated with asset prices you will benefit when there is a bubble and hurt in the crash. You will also have a short-term incentive to encourage a bubble. You are likely to favour policies which will lead to bubbles. The professional class is also better politically connected than other classes (and lots of the politicians are professionals) and so they have a disproportionate amoutn of political influence. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
Have bank managers -other than top executives - taken a hit, have Barristers reduced their fees? Have Medical consultants or even your local GP? Half a million Euro p.a. is not unusual for a consultant - half of that from the Government for a part time job. Even top civil servants have managed to largely reverse the planned budget cut whilst junior civil servants take the full hit. These guys were earning way more that their EU counterparts in most instances, and indirectly they effect the cost of living and doing business here for everyone else.
Are Fine Gael going to socialise private medicine - never. Will labour? - not at the moment. notes from no w here
The whole medical system is a mess, and it's not cleat to me what good "competition" is going to do.
If you want to reduce the total cost of the medical system, you will have to socialise it, but as it stands our private system is damaging the competitiveness of the rest of the economy by creating huge costs for all that have to be reflected in wages and the cost of doing business. notes from no w here
My experience of solicitors at the mo. is that they are making work for themselves by abusing the legal system by maximising legal obscurantism.
That would be business as usual for corporate lawyers - and many other kinds of lawyers too.
When you're being paid a few hundred an hour for playing with your pencils and designing incomprehensible sentences, there's no particular incentive to be clear, concise and straightforward.
Of course this runs counter to the prevailing ideology, so here we are. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
Your imagination is the limit.
Perhaps on the balance sheet of another company. Usually on the balance sheet of a Special Purpose Entity (SPE). Your company's shareholders perhaps know it, perhaps not.
do you mean "creative accounting"? I prefer to call it "financial engineering".
Anyway, you can't fault the Irish for not trying it on... notes from no w here
So much pressure to reform accounting standards to reflect mark-to-market and it had to come to this... En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
Once the economy starts recovering it will be time to reduce public spending and raise taxes by 3% and more, not while the economy is still in a nosedive. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
Debt to GDP ratios be damned (assuming the debt is used to return the economy to a normal level of activity)
Normally I would agree but:
I don't think going back to a debt/GDP ration of c.100% is a good idea. ... Irish public and private foreign debt is c. 800% GDP, so we are huge over-leveraged as it is.
...
Irish public and private foreign debt is c. 800% GDP, so we are huge over-leveraged as it is.
The question is whether the ECB can and will be a lender of last resort to Irish banks. En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
I'm reasonably convinced McWilliams is either a fool or a liar
He's a newspaper columnist who needs to fill column inches and likes to be as controversial as possible. It's probably no harm that our Euro membership is debated if only to highlight the fact that the Government needs to use counter-cyclical fiscal polies to manage the economy now that it no longer has direct access to monetary policy mechanisms.
I suspect McWilliams real agenda is to put the screw n Unions to accept swinging wage cuts when I think the problem lies largely elsewhere. Irish wage rates - as I indicated in the text - are largely a problem in the non-internationally traded sectors where they have been allowed to get totally out of line with our EU competitors.
Certainly smaller Irish indigenous industries are suffering - chiefly where they are dependent on the Irish market - but also where they are employing old tech or small scale labour intensive production methods. However future real growth is likely to come in high tech pharma, bio-science, ICT and financial services sectors, and here I see no problems for Irish competitiveness at current wage rates.
If I were in the Govt. I would be hawking the Irish Financial Services centre to every Financial services company in London offering a huge vacant office capacity, low labour costs, a benign taxation regime (to put it mildly) and untrammelled access to the Eurozone - all in an English speaking country one hours flight from London City Airport.
A few multi-Billion projects could fill a large part of the hole in Irish taxation revenue very quickly - even if it is only a short term quick fix solution and not a long term strategy for sustainable development. When you are in a ]hole up to your neck in alligators, draining the swamp can be a parallel strategy. notes from no w here
