“Faced with the choice between changing our mind and proving the there is no need to do so, almost everyone gets busy with the proof.”
This wonderful quotation from the brilliant economist JK Galbraith sums up where most of the Irish establishment is with respect to the biggest question facing the electorate. The only question in this election is whether we default or not, how we do it and where we draw the line. Everything else is secondary because, unless we get this enormous debt monkey off our backs and devise a growth strategy, there is little point discussing the health or education service as there will be no money to translate aspiration into reality.
So rather than understand that the canard of paying back all the banks’ debts is futile and changing their minds, the establishment is trying to find more proof that the policy of keeping the banks alive is the right one.
This leads to “serious people” saying very silly things. “Serious people” is an expression used by the establishment and its media lackeys who have no mind of their own to describe people who we are told we should listen to. Typically these people are the classic insiders, people who have been inside the system for years. Usually they have never done anything but play the insider game and won’t countenance changing their minds.
So the establishment stick to their guns or, as Galbraith would say, “they get busy with the proof”. This is immature and this inability to change their minds leads so-called “serious” people to say things like Alan Dukes did this week, blithely plucking out a figure of â‚¬100 billion which he says is needed to keep the banking system afloat. Snap out of it! We should not pay another cent to this banking system. We simply do not have the money.
Who thinks it is clever that Ireland should spend â‚¬100billion buying a load of toxic bank rubbish when we only earn â‚¬31.7billion (ie Ireland’s total tax take from all sources in 2010)? This is not a serious proposal and makes us look silly and, more to the point, it leads to more capital flight because people realize that the establishment has lost the plot. Foreign investors are entitled to ask: “If they are prepared to put â‚¬100 billion into toxic banks, what would they do with investors’ money?”
Of course we are going to burn the bondholders; of course we are going to wind up the banks. Of course the ECB will have to take a big loss on the Irish assets it has taken on its books. Of course the Germans will have to put their banks’ expansion into Ireland via lending to the Irish banks up there with previous ill-fated German expansions in the past. That’s just life. We wish it wasn’t that way but it is.
The Irish establishment has got to stop looking for the proof that spending â‚¬100 billion in toxic banks is the right thing to do. There is no proof and it’s time to change your mind.
And if the establishment is not prepared to change their minds we should change it for them — after all, it’s our money, not theirs. The way we do this is by making available as much information as possible to avoid this catastrophe.
We all know that knowledge is power and we also know that if knowledge is power, those with power will try to limit the amount of knowledge disseminated. The easiest way to ration anything is to charge for it. So if you give something away for free, it empowers people and allows them to make proper choices for themselves. This rule holds for the average person as well as politicians.
The reason the establishment gets away with such flannel is that the average person doesn’t have access to the right information. In such an environment of suppressed information, certain economists or experts of all sorts play the role that priests played in the old days. The priest had the monopoly on information, interpretation and serious analysis. They were the “serious people” of the old days, a title bestowed on them by their position and their connections, their place in the system (and too often little else).
Fuelled by this sense of invincibility, they started making basic mistakes, such as selling indulgences and the like and there was a revolt called the Reformation where the experts were exposed and the myth of knowledge was broken. The people who dissented made the Bible available and declared that a personal relationship with God unmediated by priests was not only possible but was right.
In this election, economic knowledge is power and it should be made freely available to as many people as possible. It’s a democratic imperative.
I have just spent the most wonderful week working with people from all sorts of backgrounds to provide some economic information for free.
In response to requests for economic information from candidates – some from the main parties and others independent — we decided to create an economic information hub online. These candidates particularly the independent ones — the little guys – felt at a disadvantage because they couldn’t afford to pay for economic advice, which the big guys could fork out for. These little guys knew in their bones that the economics pedaled by the establishment made no sense but they felt powerless.
So two weeks ago today, on Facebook and Twitter we called for volunteers to help make some economics accessible on the net. To our surprise, dozens turned up to help. These volunteers, aided by a number of well-know economics professors, university lecturers and doctors of economics, have come together to make this happen.
The new website is called www.thepeopleseconomy.com and is live now. The idea is to make economics — the most important issue in this election — accessible to all. Economics is far too important to be left to “serious people”; it affects everyone, it is our economy, not theirs. It is our money; not theirs and it is our future not just theirs. We hope you — whether you are a candidate or a citizen — find it helpful.
Chuchill once said that Soviet Russia was a riddle, wrapped in a mystery, inside an enigma. Ireland however is as transparent as it comes with people like Dukes cheerleading the Republic off a cliff. â‚¬100 billion just like that but from an elite perspective it makes perfect sense. Thankfully there has been no political bounce for FF with its new leader (and despite being given carte blanche on the media, especially RTE-Pravda, which just announced at the top of its report, 100 new jobs in the ‘financial services sector’ if you can believe it, over 3 years, with an â‚¬11… Read more »
I saw Alan Dukes on Vincent Browne. I assume this is the interview you are referring to. I had the impression from Dukes that he knows that we can’t pay all too well and was stating the facts to show how ridiculous they were. A bit like the 99 year old going to the library with an overdue book from when he was a kid and being asked to pay â‚¬ 40 K in late fees. It ain’t gonna happen, but it’s the rules !
Below is a very good read for those of you who think growth is the answer.
The end of growth — capitalists vs. capitalism
[…] This post was mentioned on Twitter by David McWilliams, TalentCoop, TalentCoop, Carol Hunt, David Miller and others. David Miller said: RT @davidmcw: New on the site: It’s the enormous debt, stupid http://dlvr.it/GYCD6 […]
China. ireland should learn from the Australian experience. Australin is a huge provider of education to foreign students. Students can gain entry to the country by studying certain courses. they pay for the course and it earns the Australian government colossal figures, from memory I think last year it was one Billion dollars foreign education added to the econlomy. Ireland has a chance to be the European version. Ireland should be a provider of all kinds of education to foreign students. It does not have to be trinity or universities, the Australia experience is student in the equivalent of our… Read more »
call this one of the diaspora ideas…..
*……..-after all, it’s our money, not theirs.*
Time for the people to see money is a utility and all have equal right to use it to live a life in health, wealth and happiness.
That quotation seems to apply to much of our establishment. Though they are quite adept at simply avoiding the question altogether. Not in agreement with Galbraith as a “great economist”. I think I recollect the elder Galbraith being an advisor to Lyndon Baynes Johnson in the 1960s on the War on Poverty, which accelerated poverty. A policy disaster if ever there was on. Galbraith as a committed Keynesian could not foresee waste being wasteful, or debt being a problem. The entire 1960s policy framework of 1960s America ended in unsustainable debt build up, resulting in Nixon taking the dollar off… Read more »
I agree with you concerning the parallel between Brussels in 2011, and Rome in 1520.
Basically, the same regions which broke with Rome over funny business concerning the transfer of real money, are being deceived again. At some time the entire thing will be called into question.
I think if a provisional team of technical legal experts were to make themselves available voluntarily and to start to decipher the written laws from legalise jargon into sustainable english we could feel safer .Maybe they could interpret the Codes of The Constitution and print it in an understandable way.We would feel more confident .
They could also write with their free thinking minds their suggestions on law reform and to invite the public to participate.
Even an Ozzy Osburn Guide to the Irish Constitution would be a good start .
Just heard a surreal todayfm news.. There was some fine gaeler wanting Cowen to be questioned by Gardai regarding Anglo.(backed up by all the denials that this is politically motivated, and no aspersions etc to be cast on Cowen’s good name…) followed by Micheal Martin talking in a Chinese accent.. saying something about how Ireland should be a software development hub and how every Chinese person has told him so (with a Chinese accent) just in case we didn’t believe him.
Did I catch an advert for the Savage Eye by mistake ?
2011 – It’s the economy stupid.
But, in 2004, “it’s the lifestyle, stupid”. The lifestyle created the debt. And there has been no admission about this. In fact it is completely absent.
What happened in Egypt and Tunisia, on all accounts and rightly so, should have happened in Ireland, Greece et al. two years ago.
Thanks a lot to all the Initiators!
I am spreading it to everyone I know, the least I can do, hoping others do the same.
Why not just explain to people that defaulting will not cause any normally managed nation to be cut off from future loans — for the same reason that a new credit card offer appears in your mail just after you default on the old one? The bank understands that you are not a deliberate welcher — that you did not want to get in trouble and will work ever harder not to in the future — and the bank wants to make some of that money back that it lost by making new interest. Argentina did it — and did… Read more »
“The Irish establishment has got to stop looking for the proof that spending â‚¬100 billion in toxic banks is the right thing to do. There is no proof and it’s time to change your mind.” … Amen.
I would suggest an idea to everyone who read the Doorstep Questionnaire to be asked to candidates knocking at your door here:
Has your iPhone, camera, handycam, camera whatever you might have available and
FILM THE CANDIDATES ANSWERING THESE QUESTIONS!
I thought you might be interested in the results of a poll, conducted by the Transition Year students in ColÃ¡iste Eoin, and carried out in ten separate locations in Dublin City and County on Thursday 11 February 2011. A total of 545 people were interviewed for the purpose of compiling the poll. Between 50 and 60 people were interviewed in the following areas; Stillorgan, Dundrum, Greystones, Rathmines, The Temple Bar, Blackrock, Henry Street, DÃºn Laoghaire, Delgany, Grafton Street. The following were the questions that were put to the participants along with their results in percentages. (1) Do you intend voting… Read more »
Great idea to film answers to the Doorstop Questions. Also remind the candidates to be brief and to the point so they can make sense on YouTUbe.
The role some economists have played in the financial meltdown should be closely examined (with honourable exceptions of course :-) Some were ideological drivers of the neoliberal, trade liberalisation/export led model, others played along working for investment or property firms, predicting soft landings or lower rates of growth. Some have apologised for their roles, however, as a whole it has been business as usual from the ‘experts’ meanwhile an overexposed, overly dependant economy continues to produce horror stories, 460,000 unemployed, 300,000 households in negative equity, 100,000 households 3 months in arrears, thousands having their utilities switched off etc. A noble… Read more »
Know it’s probably been covered before, but does anyone know what the current legislative status is regarding the Dail and conflicts of interest? For instance; if you have the Dail voting on guaranteeing banks, like Anglo, would it be mandatory for these members to disclose investments such as stocks and shares, property dealings, and deposits in the institutions? If there are any constitutional lawyers viewing this site, can we get your advice on this? Know it’s a long shot, but this must be key to true Dail reform if there’s no mandatory disclosure for conflicts of interest.
Your back to your best here David, well done.
I haven’t heard any candidate say that “we should have cheap property, cheap food, cheap electricity, cheap petrol”. I don’t know why but until we do, we’re screwed and heading for an unprepared default.
Can anyone describe the scenario of what will happen as soon as the doo doo inevitably hits the fan? The Doo Doo refers to the inevitable admission by all (From IMF, to ECB to Bondholders to…) that no way no how is this money (manufactured out of thin air) will be paid back. I suppose it’s a bit of a prisoner’s dilemma as to who does it first. Timing is of the essense. As a matter of utmost urgency David et al should now start advising what we need to do next for forget about giving out about our useless… Read more »
FULL MOON FRIDAY So here we go again only this time we are closer to call .Are you ready ? Do you know how you will cope? You saw how badly the Irish Rugby team made simple mistakes ! I wonder why ! And how badly Munster team lost .Now there is another reason why for them.Its a Big Secret and they have lost countless matches all for the same reasons.Who wants to listen anymore .Its not Rugby stupid . Ok.Lets share the next experience .Lets watch tonight The Debate .Watch who caves in .Who triumphs .And Why .Who does… Read more »
You have matured David McWillaims and now you are who you were made to be.
Keep soaring. My heart is flying.
I am bursting here. :))
Brilliant article, I’m loving the new phrase that has emerged recently from David, “snap out of it”, absolutely excellent verbage directed at our gang of economically constiptaed political orangutans… But there is always room for constructive criticism, I have just finished listening to the article on peopleseconomy.ie, I just can’t bring myself to agree with David’s last comment on the video, to the effect that, “there is nothing unique about the problems in Ireland that cannot be attended to”… It seems to be to be a uniquely Irish thing that we are unable to get credible people to present themselves… Read more »
And Bertie said nobody told him.
Philip says: “Can anyone describe the scenario of what will happen as soon as the doo doo inevitably hits the fan? I started reading this site in 2007 after reading that Irish banks stocks had crashed on an american website. I then began to realise that irish mainstream media were not covering our real news and started looking elsewhere to find out the truth. In 2007/8 reading David’s articles and comments from MK1 (and others here) put me well ahead of the posse and I was well prepared for a bank collapse by the time sept 08 came. Since then,… Read more »
That is correct. Serious people. Why are they serious ? Because they are involved in an act to pretend that they are more adult that everybody else.
And if you can be more adult that everybody else, then supposedly you can treat everybody else as children. You can patronize.
Patronizing people is the one thing that authority does persistently to the people of this country.
So yes, there you have it. An adult-child form of chastisment for grownups.
Debate in progress. So far all the leaders have been patronizing. Every single one. Gimmemore and Martin seem to be the worst offenders. Gormless must not have been in government for the last four years, and Micky Martin is talking out both sides of his mouth.
David you keep producing the information. But you mention the word establishment several times. According to what the three main political parties are saying, they will only postpone the agony. So I am not going to watch the TV debate. I have no political affiliation, but I’ve read the manifestos, and the most convincing one for me, is the one from Sinn Fein. The Country is bankrupt and cannot pay such a debt. And we cannot pay ourselves higher salaries than in the rest of Europe, especially than Germany. And to start to fix the problem, the first thing we… Read more »
For those looking for information – the UK and Ireland are particularly poorly served by the internet. You really have to look at US websites, where a fair degree of interest in Ireland is shown by people who understand economics and finance.
Easily the best Irish website is namawinelake:
“Faced with the choice between changing our mind and proving the there is no need to do so, almost everyone gets busy with the proof.”
Nice Galbraith quote and an excellent piece, David.
Ireland must default.
There is absolutely no shame in defaulting on bank loans which failed the risk management test. You DON’T advance big moneys against bubble-inflated land prices. Never. They, not the Irish people must pay the penalty.
THE LEADERS DEBATE IN DEPTH ANALYSIS The winner in the facial acrobatics section tonight was E. Kenny. The Altar boy who fucked up the Health system had a hissy fit, his name does not deserve to be mentioned here. In the discipline ‘Look Ma I can pet my own back’ discipline, J. Gormley made it first. The chap who shouted ‘Economic Treason’ at Biffo facilitated the finance bill, E. Gi,,more won the special award for missed opportunities calling for a general strike when it became clear that Ireland is supposed to bailout German, French and UK Banksters. The guy with… Read more »
Deco -I’m interested to know your views of Australia’s impending downfall. I’m living out here now & the country is definitely in the throes of a resources boom. Although it’s been hit hard by the Queensland floods & Cyclone Yasi, as long as India & China still want the stuff in the ground, the party looks like it will keep going. The only wobble I can see is if oil prices continue to rise (similar to 2008) & the world cops on that an economy mostly based on the availability of cheap oil can’t work if it doesn’t have cheap… Read more »
Folks, The sheeple will vote for FF/FG/LAB *sigh* The enlightened will vote for #IND or #SF #ge11 There, I said it.
Am still laughing at John Allen’s sorcery and predictions. Bang on the money. SF won. The rest were rubbish. To be fair Enda held his own. I think it was too crowded to allow a good fisty cuffs.
SF might get my vote yet and any Ind that’s not playing the business as usual card.
Just listened to Brian Lenihan and Pearse Doherty along with another 1,000,000 souls (allegedly) on Morning Ireland.
Did I hear correctly?
BL stated to the Nation that “last September the banking debt was segregated from the sovereign debt” and also in the same month “the bank guarantee ceased”.
Somebody please tell me that I actually heard these statements or am I really losing the plot.
If my hearing and sanity are entact, what is going on? Who is telling the truth?
How kind they are …and its me …just found it :
D Debate Personally I thought the horns interlocked between Gilmore and Dame Enda .Had Fagan ( ml noonan ) been there he would have physically beat the crap out our Gilmore for upseting his dame.Its not surprising how the Dame refers always to ‘hairdressers’ in his vision of job creation.Just look at his waves and maybe that tells us something.Perhaps he will be talking next that he will be ‘combing the interest rates down ‘and blowing ‘the possessions away’…..while fagan snneers in the corner to bite anyone who dare ‘fluffs his image ‘.The Dame is a real Doll that Fagen… Read more »
read : re-possessions
Full Moon Arriving to a Place near U
Please Drive Slowly
This website is an excellent initiative. Actually the main way that the ‘insiders’ gain from the ‘outsiders’ is lack of education of the outsiders. This is enforced by the grip of the insiders over the media orgainisations. In Latin America some governments purposly spend hardly anything on education so that the poor cannot wake up to the injustices in society. Then the insiders own the banks, newpapers, journalists, and politicans through funding and bribery, often in each case the same family has a foot in each one of these areas. To be honest we are lucky in Ireland and much… Read more »
While I was in said Latin American country I visited the uncle of my room mate. The uncle wrote some articles for a daily newspaper. He lived in a massive estate with a Mansion with home cinema, tennis courts pool, maids personal gaurds the whole shebang. The rest of his family were comfortable but nothing like that. I started asking myself, does a journalist earn that much offically in a country with an average wage of 3,000 usd a year. L In Ireland it might not be as obvious as that but you can be sure that the majority of… Read more »
Money as Debt II Promises Unleashed
Good article again. I know why David is doing it but I’m not too keen on the Reformation metaphor for the idea of the Irish people having a direct, “unmediated”, relationship with The Truth (although one has to find one’s analogies where one may, know what I mean). My (limited) experience of discussion with “Born Agains” is of dealing with sweeping assertions that everything is contained in the Bible (centuries of religious thought and learning being discarded out of hand). From a historical point of view you have to ask yourself whose interests were ultimately served by the Reformation and… Read more »
The debate last night was nonsense.
I proposes a proper debate.
IBEC on one side. ICTU on the other.
Then let them do their horsetrading.
And let Brussels set the parameters.
Everybody else can be ignored.
Because this is far closer to reality.
debate last night was rubish, should have been on single topic like the UK debates. In fact, as they debate Rome burns, there is only one topic worth debating, the bank debt that is crushing this economy. Re dmcw website above, its pretty goofy and horrendous, can’t make head nor tail of it, and it does a disservice to its contributors, though the kinsella contributor had a set of rubbish arguments against moving our of the euro, that were inane in the extreme. But there is no coherent message on the site, or coherent set of information and facts and… Read more »
“We all know that knowledge is power and we also know that if knowledge is power, those with power will try to limit the amount of knowledge disseminated. The easiest way to ration anything is to charge for it. So if you give something away for free, it empowers people and allows them to make proper choices for themselves. This rule holds for the average person as well as politicians” This is key. This is not merely a question of Economics, which David is a specialist in, it is also a question of understanding the Psychology of Hierarchical Power Systems.… Read more »
Can we not let the bond holders burn themselvs?
If they were presented with the option if they take their money out of our economy in the nex12 months they will suffer a 90% discount a 80% discount after 24 months 70% after 36 months and so on.
This will leave the ball in their court ant it would be their decision as to how much they want to get burned for.
In effect this is a guarentee of up to 100% of your deposits you just have to leave those deposits with us a bit longer.