Forecasting is for the weather man! When it comes to the economy, no one has any idea what’s going to happen in the near future! Idle speculation is all it is…

Growth predictions revised downwards in 6 months ? It’s usually every 3 months. But it’s hardly surprising as the ESRI & every other mainstream economist is accepting economic forecasting models that are based on completely flawed assumptions as to how the real macro economy works. This is why they did not have the vaguest clue anything was wrong mere weeks before the ‘crash’. Have they addressed any of these issues since? Not at all. Why would they, the top few percent who have controlled all this for years & thoroughly captured economics education institutions, are doing very nicely, thankyou.

It really is that bad. If you want to find out why, read Prof Steve Keen’s work here: (One of the very few who did make accurate predictions of the crash, and had a solid methodology for doing so – ie not a lucky guesser.)

http://www.debtdeflation.com/blogs/

Note to the Journal author of this article.

When writing about ‘growth’ or economic output for Ireland, +please+ do not just talk about it in terms of (total) output – GDP. Uniquely in the Eurozone, Ireland’s foreign (MNC) owned export sector is huge – some 5 times greater, at least, relative to the whole economy compared to any other country. This skews the GDP figures massively and masks what is really going on. This sector’s ‘inputs’ are largely imported with very little added value for Ireland except labour, and profits are also exported. Moreover, it tends to be more capital intensive & not job rich. The ‘growth’ in the sector that has given the illusion of some recovery has been mostly a ‘rebound’ phenomenon & there are even some serious downside risks related to expiring patents in the pharma sector that comprises over 50% of these MNC exports.

GNP (Gross National Product), that strips out much of the MNC export sector is a far more crucial & relevant measure of economic activity for Ireland & should +always+ be discussed alongside GDP to get a balanced picture. You will find that the GNP figures actually reflect what is really going on in the jobs market (still tanking) & what our real prospects are, given that most families incomes are dependant on the domestic, not MNC export sector.

If you find that ESRI or others only want to talk about GDP, they are most assuredly trying to ‘spin’ a PR line for the policies Ireland has adopted.

What are you on about? During the latter boom years, the ESRI was constantly coming out with negative (and ultimately accurate) forecasts about how this was all going to unravel, and for the most part people chose not to listen.

Back then people were calling them naysayers, and now suddenly they’re Yes Men? Great logic there, pal.

Ha

While this will look like schizophrenia I do need to ask what your solution is that avoid both borrowing and austerity, considering that one third of the cost of PS pay and SW is being paid for by borrowing from the troika?
We can avoid borrowing, or we can avoid austerity. But we can´t avoid both.
So what´s your plan?

Neil, you know as well as I do that asking for an alternative to austerity that allows us to continue to provide services, social welfare and current levels of public pay now and into the future is never going to be met with a rational or feasible alternative.

@Donal
I know, but I´m going to keep asking the question. Too many people are getting away with claiming that we can avoid borrowing while increasing spending and avoiding new taxes.

Neil, I could have sworn Greece were just let off €130 billion, but no, you are right, we should just pay back every red cent that every Tom, Dick and Harry decided to risk in our ludicrous no gamble economy, cos feck it, the moronic tax payers will just pay it back anyway.

Keith – you want to be Greece? Are you on drugs?

Also, forget the banks and the bondholders, regardless of them we have a massive gap between income and spending.

@Keith
Most of our national debts are from the government spending more than it takes in taxes. Most of our borrowing is from the government spending more than it takes in taxes.

We can tell the troika that we´re not going to take responsibility for the bank debts, but who do we then borrow from to cover the government spending? The bond markets? At what interest rate?

I do not wish to be Greece, but I would like you lot to realise that there are other options, austerity is choking the economy and is a vicious cycle increasing unemployment and reducing the amount of taxes the State takes in. I agree that PS and SW should be reduced, but I think this should be done at a slower and more manageable rate than you lot would wish for, this could be achieved if we weren’t having to pay regularar massive payments to a completely unsustainable debt. Why are you so keen for those that took advantage of our weak government to profit from the misery of Irish people?

Keith, less austerity = more Government spending of money we do not have.

The ERSI report confirms that despite everything austerity is not choking the economy. When we started down this road 3/4 years ago, the likes of Jack O’Conner predicted that austerity would lead to a deflation death spiral. This has not happened.

Not paying all out debts means our external funding gets cut off.

I don’t like having to pay for the mistakes of Anglo etc. any more than anyone else; however, I have yet to hear a rational alternative as to how we can avoid doing so. Just deciding to do so unilaterally would be a sovereign default, blocking us off from the markets for 10 or more years, and we would also be blocked off from the EFFS money. This would mean massive and immediate austerity.

You are all quite right, we should not be spending money we do not have, so why are we paying back 100% to unsecured lenders? Significant reduction of debts is needed, and at some point WILL be given.

Keith – that is not completely the case, junior bondholders have taken massive losses.

We are paying back all senior bondholders because the only people who will currently lend us money are making it a precondition that we do so.

If we get a good deal on the promissory note, our debt will become sustainable.

Donal
Are you for real ? A ”good deal on the promissory note ” .You do realise that this promissory note is to a DEAD BANK. I am sure you know right from wrong and ,black from white and up from down …….
So why is it you believe that we should all suffer to keep the very wealthy very wealthy ?
If we must suffer austerity then let us suffer it by doing what is right and not by paying off dead banks,and very wealthy bankers etc oh and don’t forget the UNsecured bond holders……
Why should I or my children do without so that some fat cat’s child can get another coat / shoes/ or get taken to a concert etc,.
It is NOT my debt. The ESRI could not predict the color of grass………..

Eileen,

Where did I say that we should all suffer to keep the very wealthy very wealthy?

Fat cat? Please, take some anti-cliche pills or something. The banks and bondholders are only part of our problem. We grew our spending on the basis of property tax income that no longer exists and will never come back. We have to cut spending and raise taxes no matter what.

The real question is, what is your alternative? One that keeps the lights on.

PS Donal
I forgot to mention we need a growth in Employment .
Make Interim Jobs . There are so many unemployed construction workers
out there on the live register …. Create jobs for these lads and lasses.

We need jobs for the unemployed
Low capital.
Jobs should be created for the workforce .
Then start retraining programmes
And as for the fat cat comments ….
Well manners prevents me from calling them what they really are .
But Donal , Please answer me this . Are you prepared to allow your loved ones
do without unnecessarily to increase the pile in some very wealthy ”fatcats” bank or bank account , for the
sake of ”looking ”good ?
I will do with out if it means getting ourselves out of this awful mess ,but not while we are lining others pockets.
Raising taxes never solved a recession . We need Employment .

Eileen,

Any large construction project has to out to a tender that any European construction company can put in for.

Personally, I would rather that we try and keep teachers in schools rather than building any white elephants.

Also, any major construction projects have to get Troika approval.

Remember Michael Howard on Paxman? “Did you threaten to overrule him?” and all that.

Fourteen times, he asked that question. Fourteen. And not once did he get a response. Instead, he got a full-show demonstration of all the things people hate about politicians, from ducking to diving, squirming to swerving, and basically pulling every move available in order to avoid answering the question.

I hope the people who continually refuse to answer the “what next” question, the people who abhor austerity and balk at the bailout and detest debt while never even hinting at the idea of an alternative, are aware that this is exactly how they come across.

Eileen,

Of course we need to increase employment. However, if we do things like attack people or business with capital then foreign investment will cease or trickle off to nothing. It is people and organizations with capital who create jobs. However, increasing employment doesn’t solve our immediate problems of keeping the lights on.

And it’s not a question of ‘looking good’ – far from it. It is simply that we have to do as we are told if we want to continue to access external funding.

Again, I ask you to explain how we continue to provide services, social welfare and current levels of public pay now and into the future without doing what we are currently doing.

Donal this is the problem right there
Who said anything about BIG constructions.
Think small , local community based schemes.
What comes to mind ?
”Any large construction project has to out to a tender that any European construction company can put in for.
Personally, I would rather that we try and keep teachers in schools rather than building any white elephants.
Also, any major construction projects have to get Troika approval.”
This is a BULLSHIT comment and You sir are a trouble maker and UNREASONABLE .I have children to collect from school . Good day.

Sound Eileen – you keep on going NAHNAHNAHNAHNAHNAH and refuse to answer the question.

Did you threaten to overrule him?

Donal
” It is simply that we have to do as we are told if we want to continue to access external funding.”

Do as we are told !! … That is a pathetic argument !
Do as we are told…..| I have heard it all now .
When has that ever solved anything ?
Oh I get it now …..It is the teacher pupil thing just like your little leader Mr Kenny…..
You have not answered one of my questions .
I can understand if you are afraid , but if you say enough is enough
then that fear will go .
Chance it . It is liberating ! :) :) Bye !

Eileen, you didn’t ask any questions that I didn’t answer but as per usual you refuse to answer the below question.

I ask you to explain how we continue to provide services, social welfare and current levels of public pay now and into the future without doing what we are currently doing.

Also, your responses are becoming juvenile. I always try to remain civil and not resort to personal insults, even if I strongly disagree with what you are saying.

The thing is ”Donal” ??
I have answered as have many other people answered you .
You are the one who refuses to answer anything I have put to you .
So there can not be a reasonable discussion with you.
Like I said Have a good day !
I am glad that I will stand up and be counted
and not somebody who will do nothing only what they are told to do :) :)

Why when talking about the troika and borrowing everyone seems to mention SW, why not for once mention the ones who are immune to austerity and remain untouched by recession and how much of the troika money goes into their wages, expenses and other perks they receive by virtue of being career politicians?.

Well said jj :)

Whatever ya say say nothing

Indeed. A stunning and timely intervention from jj in the debate. If only all comments were as short and snappy and as erudite.

Or crystal meth

So the bank guarantee had nothing to do with all this eh?

Why’s that Tony? Do you believe they’ve got it wrong? If so, on what basis?

Or is there actually any substance behind that supposedly witty remark?

@paul mc, All we are hearing is negative stuff, and where were the ERSI when the “boom” was ending????

So, because all we’re hearing is negative stuff, that means there can never be a recovery. Right.

Anyhow, during the boom years — and I don’t put it in quotes like you did, because to pretend it wasn’t a real boom is just stupid revisionism — the ESRI were telling us it was going to end. Just because you, or we, didn’t listen, don’t act like the warnings weren’t made.

Richard Tol confirmed on departing the ESRI what many had suspected. That the ESRI are unduly influenced by government and lack objectivity.
Yet again a report that is sympathetic to government policy. Claims that the government is succeeding in gaining control of the public finances despite continued failure to meet deficit targets or reign in spending.
http://businessetc.thejournal.ie/irish-government-will-miss-deficit-targets-for-2011-imf-119981-Apr2011/

The ESRI were yelling anyone who would listen that there was going to be a crash, as were the university-based economists. Rather than listen, they were bullied to keep quiet and, in some cases, threatened with dismissal and legal action. If you’re looking for someone to blame, don’t look there. They were given short shrift when they tried to inform, you can’t give them short shrift now for not succeeding. No-one wanted to know what was happening until it was far too late.

Tony, you got served. paul mc WINS.

Eileen: Explain, please, how the personal circumstances of these researchers could possibly have an impact on their study.

Exactly !