The Emergency is over

[Duke of Marmalade]

So says the Indo and apparently the public service cuts are to be reversed.
While I don't quite believe it, it still seems that we have made a much faster recovery than even the optimists amongst us hoped for.

Whilst no-one can say for sure what would have happened if other courses had been followed, I think some of our leading economists should blush when they reflect on their stance, as the below examples show.

Brian Lucey led the campaign against NAMA. He wanted the banks to be allowed go bust.

David McWilliams wanted us to leave the euro and forgive all mortgage debt.

Peter Matthews, Karl Whelan et al wanted us to tear up the promo notes.

The above and many more wanted us to burn the bondholders.

Even some wanted us to default on sovereign bonds.

Many, exemplified by Gene Kerrigan in the Sindo, argued that austerity was destined to fail on Keynesian grounds - we would be ex growth for at least a decade.

Even Doctor Doom, Morgan Kelly, who oh so correctly identified the banks as bust in Sept 2008, seems to have wildly overshot with his most recent predictions of Armageddon.

We have recovered because we have been allowed to recover. We have been allowed because we behaved responsibly. Any of the above nihilistic actions would have brought the wrath of those who count on top of us and the only winners would have been Sinn Fein, who would have loved the wheels to come off and for Ireland to have been left in isolation.

 

[Brendan Burgess]

Hi Duke

The fact that we are recovering faster than we were expecting, does not mean that all of these guys were wrong.

I still believe that the depositors and bondholders in the banks, especially Irish Nationwide and Anglo, should not have been bailed out. I understand the argument for keeping BoI and AIB open and it has cost very little to keep ptsb and EBS open.

But once we had issued bonds or notes, of course, we were right to honour them. It's the retrospective guarantee of bank deposits which I did not agree with.

Certainly the people who called for us to spend more to stimulate the economy, seem very wrong.

NAMA seems to have worked well in that it did not allow a flood of distressed property onto the market all at the one time.

 

[Steven Barrett]

Our national debt is €187,221,441,304

http://www.nationaldebtclocks.org/debtclock/ireland

 

[Delboy]

Recovery!!! More like an upcoming general election and the rise of Sinn Fein being the reasons behind the reversal of PS pay cuts....we're still going to be adding to our borrowing, but at a slower rate.

The mind boggles

 

[Duke of Marmalade]

I still believe that the depositors and bondholders in the banks, especially Irish Nationwide and Anglo, should not have been bailed out.

Boss I suppose we don't particularly want to re-open the debates of 6 years ago. In terms of size we could have let Fingers' crowd go under, I agree. Seanie's is not so clear, the potential domino effect on other banks is not known, I hope the bank enquiry will throw some light on this. My guess is that AIB/BoI advised Lenny that if Anglo went down they would follow.

 

[noproblem]

If we had responsible Bankers doing their jobs, responsible senior public servants doing their jobs, politicians who knew what was going on by having their fingers on the pulse and a small bit of honesty, then the trouble we were put into would not have happened. The thing is, it did happen and would also have happened if any other political party was in power. We the people also believed the good things we heard, didn't believe the few who said otherwise and "almost" everyone went daft. It's payback time and we've paid a price, even though there's still a mountain of debt to be paid. Things will get better and where ever that starts, be it public servants or private sector, we shouldn't be begrudging towards each other. Hope that the past will make us better people in the future and maybe we'll get somewhere that way. Just hope we as a people stop the begrudging, we're so bloody expert at it, especially as we never know what someone else is going through.

 

[Steven Barrett]

didn't believe the few who said otherwise

It was worse than that. Our leader of the time said he didn't know how these people didn't commit suicide.

 

[dub_nerd]

...it still seems that we have made a much faster recovery than even the optimists amongst us hoped for.

What??

Our debt is something like 120% of an artificially inflated GDP -- 150% of GNP would be a fairer measure. Our banks are still bust: AIB just declared a return to massive profits by getting rid of its bad loan provisions -- what a joke. Our sovereign bond yields are a fiction, held down by the current Draghi policy. One change of heart in Germany and the country will be instantly insolvent. We have a property bubble going on while we've barely started to address the effects of the last one. Employment levels are dismal.

Calling this a rapid recovery seems fantastical.

 

[MrEarl]

Our national debt is €187,221,441,304

http://www.nationaldebtclocks.org/debtclock/ireland

And that number continues to rise, day by day ....

Some things may be improving a little, but to say "The Emergency is Over" is absolutely stupid.

We continue to live beyond our means and while I've absolutely no problem with reversing pay cuts for the lower salaried and waged as early as we can afford it, we're far from that situation when our national debt is continuing to increase.

 

[Gerry Canning]

Hmn ! {the emergency is over}

Maybe the Hurricane part is past but ask.
1. People struggling to pay mortgages.
2. People struggling on income cuts.
3. People struggling on extra Taxes.
4. People on Dole Queue since 2008.
5. People on social welfare.
6. Banks still being permitted to set {facts} and run the agenda.

We still have a Gale force wind against us.

Could it be Politics wanting to save seats? I smell the stentch of elections coming up.

I hope my sarcasm is 100% wrong , and in fairness things are a bit better.

 

[Leper]

"Could it be Politics wanting to save seats? I smell the stentch of elections coming up."

Hi Gerry, When do you think the election will be called?

 

[Gerry Canning]

Leper;

Don,t be so cynical!

Reckon they will hang in as long as possible.

If things keep (improving) they will hope to get a bounch over increased employment and feel good factor.
However sending signal that Public Service pay might be somewhat restored is double-edged .
If public servants, who are a large voting block reckon Fine Gael are just massaging/playing politics , they will vote them out.
If the rest of us feel this is poorly thought out attempt to garner (buy) public servant votes ie like old Fianna Fail , we will vote them out.

What odds on an Oct 15 election?

 

[Duke of Marmalade]

Leper;

Don,t be so cynical!

Reckon they will hang in as long as possible.

If things keep (improving) they will hope to get a bounch over increased employment and feel good factor.
However sending signal that Public Service pay might be somewhat restored is double-edged .
If public servants, who are a large voting block reckon Fine Gael are just massaging/playing politics , they will vote them out.
If the rest of us feel this is poorly thought out attempt to garner (buy) public servant votes ie like old Fianna Fail , we will vote them out.

What odds on an Oct 15 election?

PaddyPower: 3/1 an election this year. Next year Evens favourite.

I think you have the politics a bit mixed up there. This was a Labour ploy by Howlin. FG are already condemning him. As recovery gathers the political battle lines become very stark: do we roll back the PS cuts (Labour) or do we roll back the increases in taxation (FG)? This is a desperate but clever last throw of the dice by Labour.

My main point in opening this thread was to point out how wrong those various high profile economic commentators have been, and exposed so quickly. Will it stop David McWilliams telling us how he predicted it all and making more hair-brained suggestions? Not likely.

Prof Alan Ahearne expressed it well in last week's IT oped. "Those who argued against austerity for the last six years have been proved wrong". Any chance they will admit it?

 

[DerKaiser]

I'm with you Duke. I think we need to get 200,000 people off the dole and a stream of returning emigrants before most will agree with you. This will happen.

If Ireland was a non-entity on the world stage, we would be back to being a third world country again following the crisis. But that hasn't happened.

Somehow, we have made others believe in us. Maybe it's because we have excellent IT and pharmaceutical capabilities. Maybe it's because of our positioning on the world food stage (Kerry, Avonmore and anyone notice Moy Park Chicken at the World Cup?) and in Tourism. Maybe it's because we have a young, confident and well educated workforce.

I don't think Ireland will be down long. We have had our problems. We were mismanaged and to an extent lost the run of ourselves. Fundamentally though our prospects are good and that will eventually come home to roost with the secptics.

 

[Delboy]

Prof Alan Ahearne expressed it well in last week's IT oped. "Those who argued against austerity for the last six years have been proved wrong". Any chance they will admit it?

Is that the same Alan Ahearne who was sat beside Lenihan when the bank guarantee was brought in.
And don't forget it was FF that started austerity...they cut the dole etc before they lost power.

I think your being very selective in your choice of 'experts'

 

[Steven Barrett]

Will it stop David McWilliams telling us how he predicted it all and making more hair-brained suggestions? Not likely.

Repeatedly saying something will happen and then saying "told you so" when it does is not a prediction. I wonder how many people made shed loads of money in between him starting to predict a fall in prices and it actually happening

Prof Alan Ahearne expressed it well in last week's IT oped. "Those who argued against austerity for the last six years have been proved wrong". Any chance they will admit it?

Without knowing if their alternative would have worked, it's quiet easy to get around admitting that they were wrong.

 

[Gerry Canning]

to Duke of marmalade;

I dont think I have my politics mixed up.
Mr Voter will tar Fine Gael and Labour with the one brush as coalition (partners).

Interesting thread so far;

Not sure is the glass half full or half empty!

 

[Steven Barrett]

On the news last night, they showed the GDP growth of the US, UK and Eurozone since 2007.

The US and UK, both of whom have used QE are back past 2008 levels. The US achieved this in 2011. GDP in the Eurozone still hasn't got back to 2008 levels yet. So much for austerity.


Steven
www.bluewaterfp.ie

 

[DerKaiser]

So much for austerity.

I feel I'm stating the obvious here, but comparing economic policies for the US or even the EU to Ireland is not appropriate.

We are a small open economy. Relatively speaking, international competitiveness is more important than domestic demand, so a sensible level of austerity over a short(ish) timeframe is a far better strategy than trying to spend your way out of a recession, provided it actually does restore competitiveness.

International trade makes up a much lower proportion of economic activity for the EU and, to an even greater extent, the US. Stimulating the domestic economy is a far better strategy in these circumstances.

In short, a blanket policy of austerity across all EU countries is not a sensible EU policy. It would be far better to encourage economies like Germany to loosen the purse strings a bit and try ensure that there are not too many countries pursuing austerity strategies all at once.

For Ireland, however, our ideal strategy is for other countries to be growing / spending their way out of recession whilst we peg ourselves at a level that improves our competitiveness.

You can judge the success of this policy on our balance of payments with the rest of the world. The massive excess of exports over imports effectively means we are very steadily reducing the amount owed on international support we received through the recession.

 

[Jim2007]

The US and UK, both of whom have used QE are back past 2008 levels. The US achieved this in 2011. GDP in the Eurozone still hasn't got back to 2008 levels yet. So much for austerity.

Buying growth through debt... It is worth noting the the countries with lower debt also have lower unemployment rates!

Country|Net Debt % GDP|Unemployment
Austria|53%|4.8%
Germany|57%|5.1%
Switzerland|28%|3.1%
USA|88%|6.4%
UK|83%|6.1%