Where will it all end?

Bewleys, Dublin 4, now Liberty Hall. It takes the breath away. Wasn't there a rumour last year the RDS Showgrounds Ballsbridge was also being thought about for "development". The Abbey site is now deemed "unsatisfactory"?! and talk of building a new theatre "out of town".

Artist friends - visceral Dubliners - are forming a new diaspora from Scottish crofts to Brazilian rainforest in advance of the bulldozers. Are some of us crazy to think there is more to life and experience than investing patches of earth in specific locations with extraordinary value? The concept of burning money is not new; that's what we're doing in terms of imprudent energy-consumption. But burying money! A resurgence of the pantheistic pre-Christian religious rite perhaps?

Marie - have you been hitting the cooking sherry this morning or something? Trade makes the world go around and always has done.

Are some of us crazy to think there is more to life and experience than investing patches of earth in specific locations with extraordinary value?

No - but everybody still has to make a living of some sort. Just that some obviously want more than others. In a free, capitalist society that's their prerogative I suppose. Others are also free to choose alternatives.

Hello ClubMan. Granted we're in the stages of late capitalism which is about stimulation of desire rather than added value. Commodities and services will continue to make their owners/generators a living. However this is a small - very small - minority who become property moguls. For "ordinary people" who are not speculating but needing a patch on which to pitch camp, cook sleep and procreate their money - earned from generation of products and services - is, literally, "sunk".

I'm not standing out against capitalism. Even Marx and Engels didn't try that one. What I am interested in is the phenomenon through which money and gains goes to ground and "the good life" becomes even more elusive with the struggle to stand still. For example the parental generation worked to preserve the family roof but there seems to be a change in the quality of this struggle. Perhaps I'm wrong?

"now Liberty Hall"

Even though I wasn't at the cooking sherry I still missed out on the above - what's happening to Liberty Hall??? :rolleyes

Here's an extract from an Irish Times article today....

The 15-storey city centre building is in need of refurbishment and disposing of the property is one of the options to be discussed by the trade union's national executive early next year.

Click to expand...

Disposing of the building entirely is another option that will be considered. Mr O'Flynn (Union General Secretary) indicated this would not be his personal preference and said the decision would not be based on commercial grounds only.

Click to expand...

All emphases are mine.

Sluice

what next?

Marie
Good post
I think the conditions you describe are symptoms of a great inflation. An inflation of the monetary base that is. Interest rates are being manipulated by the Central Bank to conform with the mandate of the ECB. The Central Bank is in effect subsidising borrowers and penalising lenders(savers!). I'd say the natural interest rate in Ireland(if there was no Central Bank) is at least 4%.
The symptoms of an inflation are price inflation, asset bubbles, a scorn for cash as a saving vehicle and a rise in speculation. There is a scorn for honest hard work as a way of accumulating wealth particularly among the young as they see many become wealthy through speculation.
Finally there is a degree of social disorder as money loses it's oldest and most important role : to act as a store of value.
Where it ends I don't know. But the whole thing stinks of malinvestment particularly in the property arena.
STAY AWAY!

Re: what next?

To me, this topic is indicative of a persistent undercurrent in certain quarters that we should all have a certain sense of - for want of a better word - ennui about the times that we live in and, in particular, the fact that we are generally better off financially/materialistically than in the past. Things are not perfect (when are they ever?) but I don't really understand this sort of perspective to be honest... :\

what next

Clubman
Are interest rates appropriate for current Irish financial conditions? I believe they are not. They have been manipulated artificially lower. This has discouraged saving and encouraged borrowing, consumption and speculation.
It is a basic truth in life that that which is free is overused and misused. Well money has been almost free in Ireland for the last No. of years.
Furthermore the price of money is one of the basic characteristics of any modern capitalistic society. I do not think that you can manipulate it without major societal effects. Marie's observations are valid.They are not the workings of a free market. They are the unintended results of government policy.
Now A Happy New Year to you and yours!
Tyoung

Re: what next

Are interest rates appropriate for current Irish financial conditions? I believe they are not.

I would agree with you there - if interest rates were not set centrally by the ECB then they would certainly be significantly higher in Ireland. Be that as it may I'm still not sure that I understand or accept Marie's substantive points about the (potential?) knock on effects of this sort of situation.

Food for thought

David McWilliams has a piece in the SBP which clearly shows that he gets it. For some reason I can't do the link but here's a couple of quotes.
He's talking about food but the point is that the attitude and behaviour changes are the result of easy credit.

"Social status is actually more important in a booming economy than in a stagnant one. Years ago, when Ireland was poor, everyone knew his place. Our rigid social infrastructure was preserved by a lack of credit.

Without the lubricant of easy credit, the system rusted into position, the cogs of social mobility seized up and the only way to move up was through patronage, favouritism, professional exclusivity or marriage. Rich Ireland was essentially a club.

Easy credit has blown that club apart."

and further on down

"This strange behaviour is a function of money. When banks are lending hand-over-fist, the social landscape changes rapidly."
He's talking about food. Marie was talking about property. The point is that the changes in attitude and behaviour are the result of the artificially low interest rates which Ireland has been forced to pursue since it joined the Euro.
Regards

Re: Food for thought

"Social status is actually more important in a booming economy than in a stagnant one. Years ago, when Ireland was poor, everyone knew his place. Our rigid social infrastructure was preserved by a lack of credit.

Without the lubricant of easy credit, the system rusted into position, the cogs of social mobility seized up and the only way to move up was through patronage, favouritism, professional exclusivity or marriage. Rich Ireland was essentially a club.

Easy credit has blown that club apart."

Sounds like a positive impact to me!

ez credit

Everybody loves easy money at least initially. There are more borrowers or potential borrowers than savers so it's politically popular as well(Can you think of any politician who ever called for a rise in interest rates?). But as it progresses asset bubbles, excessive debt and overconsumption can become problematic.
In Ireland in particular, I think that the artificially low interest rates have fanned the property boom engendering a "can't lose mentality".This has not only pushed up prices but encouraged overbuilding and the building of inappropriate shoddy properties in poor locations sold to marginal buyers. Whether this view is correct remains to be seen when interest rates normalise.
Regards

Re: ez credit

Here's the Sunday Business Post [broken link removed]

ez credit

Thanks for the interesting article. I like the "ingestion denial" idea.....that one can eat and eat but not get fat reminded me of research done a decade ago in London with children who failed to thrive - despite provision of food which for other children was adequate and nourishing - which the psychologists doing the work traced to unconscious anger with the world, the carer, the self and could eventuate in the child's death.

ClubMan, far from this being "ennui" or negativity I assure you I have a passionate interest in emerging social and group-psychological phenomena in the world around me and feel the sinking of money in land is such a phenomenon and worthy of socio-economic as well as ethnographic investigation and especially interested in these developments in Ireland since joining the EU and the common currency regulation mechanism (of which I only have a lay-persons knowledge and would love to know more from posters such as Max Hopper who seems involved in these areas). Ireland is one of the EU member states which has moved directly from a rural/agricultural/peasant base to part of the EU superstate. Such rapid transition without mediation of industrial revolution as occurred in UK and other prominent member-states produces inevitable culture-shock which "as a group" the state or nation deals with (unconsciously) in such manner as to stabilise the changes.

My hypothesis is that this is the basis, in the Irish psyche, of the obsession with property and the enormous (and irrational!!!) "belief" in it.

The fact is that on avrage annual real per capita growth in gross domestic product of the eurozone's "big three" (Germany, France, Italy) was 1.5% over the past 10 years whilst growth in the UK was 2.6%. This means the UK economy is 12% larger relative to its European neighbours than it was 10 years ago because of a kind of gross manipulation of a "one-size-fits-all" character across all the member states based on distrust of rather than encouragement of competition and market forces.

I look forward to comments from others.

Re: ez credit

brink back george bush!

ez credit

Could you enlarge on that sentiment a little, Setanta?

Re: ez credit

lets just say I doubt if he would come up with your wording.
I partially agree with you but if I own something and I want to sell it ie Bewleys or Liberty Hall or a second hand car then surely that's my right?

ez credit

Setanta - Thanks for clarifying what you meant about Bush and words.

Ownership of a thing implies control over its disposal in our current culture and of course people have the option to continue to live in an ex-Corporation house which cost 3,000 old Irish pounds to build, 10,000 "punts" to buy out and is now worth quarter of a million Euro.......or sell it and buy another for half a million Euro which they hope will continue to appreciate in monetary value. Of course!

However there are not one but two "versions" of the property. One is the real physical object.........bricks, mortar, the land ithey are sited on. The other is what that combination and their importance. In other words how highly regarded is that particular thing. A high regard of one kind of thing in a culture takes precedence over other events or things such as, for example, a shorter working week, or money to spend on the activities of living and socialising, or investment in the health of the nation.

The equivalence of property to other kinds of things has changed radically in Ireland or at least to my mind this is suggested by the reduction of different kinds of things (Liberty Hall, RDS, Bewley's, Dublin 4) which differentiated the culture into a variety of experiences are now - through the focus on property - all being turned into "the same thing" and the machinery of this transformation is the developing of land for investment and speculation.

This type of reduction of diverse things to "the same thing" is - as Tyoung suggests - being fostered and manipulated by artificially-low interest rates. This gives the illusion that profit is inevitable and there is no risk. Neither of these things is true. There is a fantasy quality to it all which like any religion involves people "believing" in it.

How does a culture with a powerful connection with the land both as source of food, life and sense of self deal with being quite suddenly exiled from that land and without the intermediary step of "industrialisation" is precipitated straight into the technological information and service culture? Perhaps by an extraordinary and irrational "sacrifice"? Burying its wealth in the earth!

Re: ez credit

Marie: the biggest problem I have with the overvalue we put on property in this country is that it has devalued the 'value' of work. we dont all work for multinationals or in the IT sector with attractive salaries. Some of us have quite mundane jobs and are paid accordingly. I have a number of friends who work pretty hard in ordinary jobs but who in real terms fall futher behind (in monetary terms)others who just sit on escalating property prices. This has other sides too, a friend a few years ago purchased a property with a mortgage. shortly after this he was purchased a beamer, based purely on the grounds that he had purchased property valued at xx, borrowed xx and now the property was worth xxx so he borrowed the additional x and now drives around in a car which according to him he 'earned' by the increase value in his property. and I sure he is not alone.

ez credit

Yes it is terrifying! It's about fantasy instead of the real productivity of work!

Following yours and Tyoung's point to a logical conclusion - if we have "free money" (devalued) and work which earns money has virtually ceased or shrunk so no more money is being generated you get............. O!