We are "rich" - "Ireland will come out of this very well off" - Respected economist

[H.R. Haldeman]

He makes three comments in the two vids that I find baffling (which admittedly might be my problem not his). On the fly transcriptions, essentially direct quotes:

1. "[Ireland is] extraordinarily rich...the average income is almost the same as in the US and on an objective measure is about 1/3 ahead of France, Britain and Germany...Even if you take off more than 10% [from those wages] they'll still be very well off".

2. "At the end of '07 the net debt of Ireland was negative, that is to say they had net assets...even if they now have to spend 25% of GDP bailing out the banks, which they might do, [they are still below the levels of debt per GDP of Britain at 35%, Germany and France 40%, USA 45%]".

3. "I don't think Ireland is going to stop growing or stop being a healthy economy".


I don't understand any of this.

1. Our wages are high because there has been a wage-price spiral caused by the consumer and property bubbles, which in turn were fuelled by cheap credit, which in turn was fuelled by flawed risk modelling in financial institutions for the last 10 years. How on earth could such "high wages" actually mean anything?

2. On our "net assets", well, that was all just property, right? Those are not assets, they are vehicles for debt accumulation. The chap is talking as though our assets were gold or oil. But all those billions in assets were just people's debts on their mortgages and loans to speculators that we now know are garbage. Again, how can these "assets" mean anything?

3. On the "stop growing" bit....huh??? How can something that wasn't growing in the first place stop growing? Don't the exchequer number clearly tell us there was no growth in the economy in the CT years? All there was was 10 years of a property bubble making government rich off the back of taxes borrowed by citizens for houses from Irish banks that in turn borrowed that money from abroad. For the third time, how in Christs name can this "growth" mean anything?

[Edo]

Charles is now my new totem of hope. This guy should be replayed over and over again on RTE.

Regardless of all that though we do have a few tough years ahead, but we will come through it.

About time something like this was said before we panic ourselves into oblivion - I though he was spot on - yes we have issues and we are going to go thru the wringer in regard to recallibrating our economy and the way it is structured but FFS - its not the end of the world and we (the world) are doing rather better than what happened in the 30's so far.

I remember writing on a discussion board about 3 years ago in regard to the property bubble that just because it became totally irrational in the last few years on the way up , don't think that the descent down the other side would be any less irrational either - sometimes I think you can have too much information - the online and televisual media are as usual guilty of a lot of sensationalist headlines and comment - without a lot of real analysis in real time - probably because of the demands of the sector - I personally place very little value in the likes of CNBC, Bloomberg and other "business channels" - way too much "cant see the forest for the trees" nonsense and lots of hysterical over the top nonsense to fill up airtime - how you can make a judgement on anything after watching the deluge of talking heads there is beyond me.

Also on this site there are a heck of a lot of posters with agendas (ok - its a political site so there probably will be) - and given our current economic travails you can see that coming out in the neo-liberal (thats what they like to call themselves) battalion in looking for this to be a good reason to charge into the public services with a machete, pull social welfare asunder - on the other side we have the left brigade who want to hang ,quarter and draw apart anybody who ever invested in something and made a profit etc etc - personally I've had it up to here with the whole public/private arguement - everybody has had to take a shower and there will be more to come unless we stop panicking.

Unemployed as I am now for 4 months now - its no bed of roses - but its not the worst place to be in either - in a way you no longer panic and worry anymore - you are at the bottom - the only way is up from here - well thats the way Im looking at it anyway.

One thing that is worrying me and should be worrying everybody is the collapse in private spending in the country over the last 6 months - and I sincerely mean "collapse ". Funnily enough its the unemployed that are driving the economy in the country at the moment - we are actually spending the 200 odd euro that we get on Jobseekers benefit and that is going into local shops and services and I'd say a fair whack of it is going back to the revenue in excise duties and VAT - I haven't cancelled my daily newspaper, I still go the farmers market, I still run my car and I still have a few drinks on a Saturday night (about 2-3: my tolerance for large quantities of alcohol I have left behind me in my youth) , I have kept on my health insurance etc - but what I have noticed is that its the friends and accquaintances of mine who still have their jobs that are having the freak attacks and are cutting spending left right and centre - they are becoming tightest gits on Planet Earth - yet their bank accounts are very healthy - if this is being repeated right across the country - well its no wonder that jobs are being lost, left right and centre - the "elasticity" of our money in this country is being lost and that is the main problem we face IMO - confidence.

I was up in Dublin yesterday for the first time in ages to meet up with some ex-work colleagues for our hearing in front of the Labour relations commission as we endeavour to get our Multimillionaire ex-chairman of the company we used to work for to pay us our statuory redundancy and wage arrears that he owes us after he locked the gates and kicked us to the kerb a few months ago. An observation would be to say fair play to our European neighbours - have never seen so many European tourists in town - especially midweek and I hope they are making up in some way for the spending shy Paddies - About 4 of us are thinking seriously about starting our own gigs and over coffee the same issues hit us all - the country has got its self in a fierce panic and nobody is spending a penny - that is not good news - espeically for people like myself who are prepared to spend their lifesavings and anything else they can get their hands on to start up ventures that will lead to employing more than ourselves within a year and hopefully be exporting within 5-10 years - but none of us are reinventing the wheel here - there will be very few Eureka moments that go from zero to 100 in six seconds and will be exporting from the get go - we will all be dependent on the domestic market to see us thru the important 2-3 first years and allow us gain traction.

there is a lot of money in this country in bank accounts, under mattresses that is being saved for a rainy day , or more pertinently because the people fear tomorrow and dont trust the institutions of the state - there was going to be a fallout from the whole property and banking blowout - but most important thing we have to do here is restore faith in our banking system , restore some semblance of credit into our economy and restore faith in our systems of governance - not to do this is just inviting the downward spiral and monthly revising of estimates to continue.

The main problem we always had in this country for the 50-60 years of its existence was a lack of credit in our economy which stalled our economic development - lets not repeat the same mistake.

This is what our governing classes have to do - maybe its time for a national government - a lot of people like myself who didnt go nuts in the boom years are still going to be collateral damage in the blowout and we are going to have to hold our noses in the writedowns and writeoffs and other measures that are going to be necessary to kickstart our economy - I dont like it - but unless it happens - there will be no future here for any of us.

I agree with dumas - but a lot of what happens here from now on will be in peoples minds and how confident they are about the future - getting to grips with the Banks and their debts once and for all would be a good place to start - I have my issues with the Public service - but reform more than cutbacks is what is needed there - dont forget that is the public sector that is pumping and redistributing money thru this economy after the private sector has seized up - so lay off the PS - they are taking a shower financially- but lets not go nuts on the abuse in which case they will seriously cutback on their spending too - a

As I said at the last FG constituency meeting I was at before leaving the party - we need a vision

we need some party or party leader to stand up and say where they want us to be 10 years time - we all know that tough decisions have to be made - but if we don't know where we are going - then it will be death by a thousand cuts and I'll be starting my new venture and another life in another country this time next year.

[marmurr1916]

Which phase of this do you reckon we're in? I think most Irish people are in the 'fear' phase:

[Edo]

Which phase of this do you reckon we're in? I think most Irish people are in the 'fear' phase:

Not sure TBH - can only speak for myself - Im expressed trained thru fear and capitulation directly to despair - now that I got there - its true - there is only one way to go - up

I would say most folk are in fear-capitulation at the moment - if there isn't quite a few in depair or very close to it.

[marmurr1916]

This is an actual graph of house prices in major US cities from 1988 to 2008:



The bubble started in about 1998 and, barring a couple of troughs on the way to the peak, has followed the model in the first graph fairly closely.

[youngdan]

[feargach]

Which phase of this do you reckon we're in? I think most Irish people are in the 'fear' phase:

I think we are in the denial phase, and waiting for a bull trap.

Look at it, the ISEQ has fallen 70% but gaffs are only down about 20% from the peak.

[agent]

Hmmm. It's just a little distressing that this new shining beacon of good golly-gosh hopefully-ness is a guy called Dumbass...