The Comptroller and Auditor General fells a few trees every year in reports saying they don’t.

”The tough budgetary measures we will endure from 2008 until at least 2016 are the result of our own mistakes, not any lost sovereignty”.???

Own mistakes??

I don’t recall signing a €100 billion loan offer Ronan.

I was going to say you were missing the point Paul but maybe your not. Looking at the article Ronan is saying that we should not get too hung up on this notion of economic sovereignty and at great lenghts explains why all for reasons that make certain sense. He then goes on to say that most countries undervalue society and why developing on it somewhat he concludes that the measures to measure the value for want of a better word of society are too subjective which is true. However if one were to take any basic measure of what one could consider an advanced society it could be summed up by “we take care of our own” and our own being society at large rather than a small section of it so maybe your quoting of the Priory Hall situation is a measure of how far we have failed/need to go (pick your own interpetation) of where we are as a society. And that is where our real enegy should be going to.

The argument cuts both ways. As the article states: “Changing these resource allocation decisions so that they are based on the return enjoyed by society on money spent – and not just on the amounts spent – is the single biggest challenge for public finances in the OECD over the next generation, in my opinion.”

Really rodrigo?

Have you been asleep these past 5 years? ‘Europe’, in the guise of the unelected Troika members ECB & EU Commission has forced some €65 billion of private financial losses onto the irish people. And not counting further similar amounts in both consequential losses & lost economic production of goods & services thru’ enforced ‘European’ policies since the banks’ bust.

Certainly our self serving politicians & civil servants happily went along with this because they see their personnel interests in serving the private financial sector elites of Europe, not the Irish people.

i assume you have also been asleep (doubtless aided by our establishment churnalist mainstream media) as regards Iceland’s progress?

In rejecting the pressure from private financial interests, sacking politicians inclined to pander to those & retaining their economic sovereignty their unemployment is now down to a mere 4% – their economy recovering rapidly.

Quote Ronan Lyons in the article:

“The tough budgetary measures we will endure from 2008 until at least 2016 are the result of our own mistakes, not any lost sovereignty.”

The ‘…we..’ here does not include Mr Lyons himself, since he is a very well remunerated member of the financial sector responsible for creating the mess.

‘…..the result of our own mistakes….’ No, Mr Lyons, not ‘our’ mistakes – very firmly +yours+ & the other mainstream members of your professional sector granted the well remunerated responsibility for prudent financial management. Instead of the latter, what we got was near universal ‘control fraud’ (to use Professor William K Black’s phrase) & a Casino, rigged in your sector’s favour.

Further ‘….lost (economic) sovereignty….’ in a deeply flawed currency union (designed by your sector) is very much responsible for our inability to introduce policies that could have already seen us quickly recover with likely 60% less unemployment by now.

Besides the example of Iceland (even with its imperfect choice of policy details), the US, UK, Japan & many others, all economically sovereign, enjoy government borrowing costs some 4 to 5 +times+ less than ours with considerably higher debt to GDP ratios.

Why is this?

The simple fact that financial ‘markets’ elites know full well that such sovereign +issuers+ of their own currencies do not in fact +need+ to borrow from anyone in order to spend their own currencies. That is to say, the costs (interest rates) are ultimately under sovereign control, not ‘markets’ (financial vultures), and indeed closely linked to the ‘base’ rate set by their central banks.

Of course, a proper understanding, and most certainly any such public expression, of macro economics & the monetary system of fiat currencies is completely incompatible with Mr Lyons’ well remunerated career.

However, readers here may wish to educate themselves. The MMT school of economics, who were able to predict with prior explanation both the financial crisis & failures of the last 5 years – the last thing the financial sector want you to know about – has the correct understanding & policy options.

Principle, and very informative blogs are here, University of Missouri Kansas City:

http://neweconomicperspectives.org/

and Professor Bill Mitchell, University of Newcastle, Australia:

http://bilbo.economicoutlook.net/blog/

A search thru’ will find numerous commentaries on the Eurozone mess.

Fair play Mike. I’m blue in the face telling friends and family to wake up.

Great stuff Mike. A concise explanation of how and why our economy has been destroyed.

Sounds like a typical Mike rant to me, he lambastes Ronan and his profession for aiding and abetting the development of disastrous economic policy, which does have some merit in respect of the wider economic community but not sure about Ronan’s personal involvement, maybe mike can enlighten us with some examples. Anyway, Mike has also have chosen to complete ignore the substantive argument made in the piece regarding how we need to look at our cost cutting measures more holistically than we do now ,so as to properly value the social benefits of the services we offer. The way I see it Ronan is putting forward a position worth looking at, he argues Ireland could be at the forefront of such policies, maybe he is right maybe not ,but it’s a debate worth having. However , not according to Mike , no, instead Mike prefer to indulge himself in a worn out invective against the economic profession , of course the irony is who does he turn to legitimise his path to enlightenment , well more economist of course

@ Jason & Coddler

Thanks! I appreciate the support.

I do recognise tho’ how fortunate I’ve been in having the time to investigate thoroughly & study the economics of those few economists who have a methodology that actually conforms with the real world.

It’s very hard for people with families, children & tough work schedules to find the time & undistracted space to learn about what is often counter intuitive (or should that be counter mainstream propaganda?). It took me more than 6 mths & a lot of reading & thinking to fully grasp what MMT explains.

From another ‘strand’ of my studies into behavioural economics, I’m reading a very interesting book by research pshychologist Daniel Kahneman called ‘Thinking, Fast and Slow’. It’s very much an explanation of his life’s work into understanding the thinking processes of the human brain. Enormously insightful stuff, now repeatedly validated by the work of others & great strides made in the last decade thru’ the use of ‘live’ brain scan technology.

Essentially, his key finding comes down to a model with two simple proceses, which he calls System 1 & System 2.

System 1 is fully automatic, cannot be switched off & ‘thinks’ very fast. But in doing so it uses ‘heuristics’, kind of finding ‘similar’ patterns from memory, to make ‘conclusions’. However, it does all this sub conciously & we are not aware of the ‘data’ or processes using that data. Most of the time, the conclusions are sound & useful. An example might be from our evolutionary past. Having experienced, say, what a wolf looks like, noting it’s aggression & sharp teeth, when we encounter, say, a lion, System 1′s speed is essential & useful in avoiding being killed & eaten. System 2′s much slower process, say examining cave painting ‘data’ & discussing the details at length with tribal elders would not have produced a successful outcome – tho’ we would have doubtless been more ‘certain’ of the danger presented.

System 2 tho’ is a voluntary affair. We have to actively choose this mode & just as important follow thu’ carefully & slowly without distraction. Even, say, a moment’s distraction whilst trying to perform a simple maths sum is enough to either produce a System 1 guesstimate or give up on System 2 & the sum entirely.

Fast forward from our evolutionary past to our modern complex societies & one can readily see why so many poor decisions & conclusions are made. And repetition & wide publicity of those conclusions adds to the process whereby System 2′s more thourough examination of data is all too often excluded.

In the case of the ‘macro’ economics of whole nations, the temptation to use completely false ‘household’ analogies, for example, is near universal among non-economists, and includes politicians who should have been much better ‘advised’ by so-called experts. But as we repeatedly see, many ‘experts’ are not immune either from their own System 1 distortions. Many other fallacies exist deep in the bowels of mainstream macro economics, many quite blatant & uncorrected in economics textbooks. Another economist, Steve Keen, whose methodology also enabled his accurate prediction of the global crisis, has extensively identified these fallacies in his (non lay) book ‘Debunking Economics’.

So, add in the everyday pressures & complexities experienced by most of us, together with the pervasive power of wealth to distort & ‘capture’ thru’ mainstream media & political lobbying, & it’s quite easy to see why such lessons as were learnt following the Great Depression of 80 years ago have long been ‘lost’ to mainstream discourse.

Mainstream media propaganda, whether from an original source or derivative, is highly effective, not just in misinforming, but in ensuring ‘System 2′ analysis is not engaged by most people. This is no accident. Ever since Edward Bernays (Freud’s nephew & the ‘father’ of ‘PR’) the world’s wealthy elites have known well how to control opinion in their narrow interests.

The most effective nations at this are not totaliterian states like China or Russia – everyone there knows their media is tainted. Rather it is countries like the US, where the mechanisms of control are subtle, hidden & themselves the subject of propaganda. Division, distraction, lies & fear (most irrational, some not, like descent into personal poverty) are peddled 24/7/365. No wonder System 1 is badly distorted & System 2 doesn’t get a look in.

Thankfully, Ireland, perhaps because of its recent memory of such logical conclusion of this process as colonial oppression & slavery, is not there yet. However, the direction of progress is unmistakeable in the EU & especially the Eurozone, of which we are part. Whether it created the crisis deliberately or not, the ideology of rich elites is most certainly taking full advantage of it to further its cause.

Good on you Mike.
Iceland is well on the mend by now, but our bought out scholars seem to avoid making like for like comparisons between their situation and Ireland’s.

http://www.ft.com/intl/cms/s/0/0dabbb86-eabe-11e1-984b-00144feab49a.html#axzz2474yc2SO
http://www.irishtimes.com/newspaper/finance/2012/0820/1224322498419.html

Unfortunately we have very lazy, weak, ”leaders” who don’t dare rock the boat.

It’s vile the way our media, government, senior civil service and justice system are telling the the public that its ”their fault” and to ”take your beating”.

”Put an Irishman on the spit and you can always get another Irishman to turn him”
George Bernard Shaw

Sorry for being so pedantic but it was Newton who spoke of equal and opposite reactions not Einstein

If the alternative would be to turn our backs on Europe and become an isolationist state, I’d rather stick with our “mates”, thank you very much. I think you’re doing the Irish people a disservice if you think that they believe that the EU should be a love-feat. Very few are that naive. It’s business, everyone is out for themselves, but co-operation can be more profitable than competition. Google “the marraige supermarket” for a clear example. Remember also that Tibet was a country that followed an isolationist course, which didn’t work well for them. It was a country where the majority were desperately poor, uneducated and had little to no human rights. Their religious elite had a haughty isolationist relationship with other countries, which meant they had no political collateral in the bank to exchange for outside help when The Chinese occupation started. Now they want the world to love them, but the horse as already bolted. Self-sufficiency is not an option, England is sinking fast, and the US has enough problems on their own.

Thanks Hammie; was fuming when writing this . . . As for JTHM you mates are about to stuff you. . . co-operation is brilliant ‘ideology’ of youth to follow when it’s a two way street – so far this has not proven to be the case so far! And if you want a solution to get us out of this the fiscal mess we are in then read up what Roosevelt did in the thirties, this is not news either because Norway and Iceland followed suit – that’s not Isolationist, but facing up to reality – but again it’s all a facet of history completely ignored by the power brokers in Europe – aiming to suit their own ends – not yours nor mine . . . As for Britain they have a far broader range of options than we will ever have here . . .

You’re not going to win over many voters to your party if you’re going to sneer at them, Martin. None of your comparisons hold water – it’s not the great depression, we don’t have oil, and Iceland is a complete red herring, a point which has already been explained to death many times in this site. And are you really promising that, if you were elected to a position of power, that you’d tell the combined leaders of all the other EZ nations “thanks but no thanks”. You’ve yet to state in your website what you would do to improve the lot of this country. Give a concrete answer to that, not simplistic and misleading comparisons, and you might get my vote. Until then, I’ll float towards the opinion that’s least likely to put my kids into poverty.

Its not a sneer; but an analogy, based on the comments that apparently we so incredulously naive. Poverty is on its way like this generation has never quite known before. But I’m only the current spokesperson for Sli Nios fearr, and a lot of comparisons I make are having read plenty, from that time in the thirties, even David McWilliams has voiced much the same. We do have a very large skill base building in the party and I’m confident that such policies will arrive on due course. Rome wasn’t built in a day but I believe the basic principles are right – better than this corrupt bunch. It needs highlighting here that manifestos of parties are generally never fully published until an election is called; but even so if you looked upon the last election not much of those have see the light of day, so think you may be pushing the gun here a little. And as McWilliams has commented before, perhaps we should follow the examples that are already there for us . . As regards the website please read the policy page, there’s plenty there to be going on with . . .

If we were able to default on the socialised banking debt in the morning, there would still be a huge deficit that we’d have to borrow to fund, and a substantial debt to still pay off.
That’s not to say that we shouldn’t try to default on some/all of the banking debt – that will help but it’s not the magic bullet for our troubles.

An example of what I am talking about: http://www.finance.gov.ie/documents/exchequerstatements/2011/enddecexcheqstat.pdf

As FinFacts puts it: “The Exchequer deficit in 2011 was €24.9bn compared to a deficit of €18.7bn in 2010. The €6.2bn increase in the deficit is due to higher non- capital expenditure resulting primarily from banking related payments. The majority of these payments are once-off payments relating to the recapitalisation of the banks and an exchequer deficit of €18.9bn is forecast for 2012.”

http://www.finfacts.ie/irishfinancenews/article_1023716.shtml

We really have a massive problem already and the banking debt is just adding to it.

A corrupt government which we elected. Yes they allowed a bad situation get worse but in 2007, the people of Ireland voted for the continuation of policies and practices that had no bearing on reality.
If we are to learn from this crisis, we have to take responsibility for our part for not recognising the truth ‘if it seems to be too good to be true, then it is’. The political leaders told us lies and we as a nation chose to take their word for it ( how naive is that? Believing a politician!!!) because we enjoyed the party too much.

Darryl, the reason that we cannot finance our deficit is because we bailed out the banks. Most countries including Ireland have a budget deficit most of the time. They finance the difference by borrowing the money in the market. Even in the depths of the 1980s recession, Ireland was always able to go to the market until Brian Lenihan bailed out the banks in 2008. The markets began to realise that Ireland would not be able to cover the massive banking losses and pay them back and so the interest rate they demanded rose to an unaffordable level.
This pushed us into the hands of the ECB/IMF who now lend us the money (with interest) so that we can pay the banking debt as well as our budget deficit which ensures that the financial speculators suffer no losses. In addition, they attach onerous conditions to the money they lend to us demanding cutbacks, tax increases and new taxes so that the debt burden will be borne by the people. If we stop trying to pay the astronomical illegitimate banking debt and are reimbursed for the €65 billion that has been wrongfully stolen from us, then the markets will lend to us again at a reasonable rate as we are a perfectly viable economy without the private debt millstone.

Coddler, did you have a look at the numbers from the Dept of Finance that I linked to? It doesn’t appear that you have. I have very familiar with the narrative of how we got here. But our tax take was collapsing before the bank debt was added onto all our other borrowing. We are now borrowing 18B euros before we have to think about paying bank debt. We would have been thrown out of the markets at some point on that alone.
If we did manage to repudiate the banking debt, and also go back to the markets and ignore the Troika, are you confident we can fund the deficit at a reasonable rate of interest? I, for one, don’t think so.

I should have said, we are now borrowing 18B euros to run the country before we have to think about borrowing more to pay the bank debt.

Darryl, We need to repudiate all the outstanding banking debt that remains. We also need to be reimbursed for the cost of the banking bailout which has been illegitimately imposed on us. The direct capital that has been injected into the banks to date is €65 billion. On top of this is NAMA which has taken €72 billion worth of bad loans off the banks balance sheets. We will be very lucky if we recoup 50% of this, so let’s say another loss of €35 billion.
That leaves a conservative estimate of €100 billion which has been extorted from the Irish people so far.
So to answer your question. Yes I would be confident that we could borrow from the markets again at a reasonable rate if refuse to pay any more banking debt and our national debt was reduced by €100 billion.
None of the above quantifies the indirect damage done to our economy by the banking collapse. The banks have not been providing the normal flow of credit to the economy for the past 4 years and thousands of viable businesses have folded as a result. The tax revenue from these businesses has been lost and many of their former employees are drawing social welfare delivering a double blow to nation’s finances. This destruction of the real economy is responsible for a large part of the €18 deficit figure you mention above.
Hopefully a lot of this damage could be reversed if we stopped the charade that the existing Irish banks are functioning financial institutions and created a viable alternative. A state owned/controlled retail banking network (like An Post) might provide the solution.

I think we have to agree to disagree here. I don’t think that we can borrow as cheaply as you imply from the normal sources. We are simply living beyond our means – banking debt or no banking debt. Because you are right – and wrong – on this point: “That leaves a conservative estimate of €100 billion which has been extorted from the Irish people so far.”

But it hasn’t been extorted. Its sitting on the national debt and only a few bill has been paid so far. The banking debt is to be paid over many years, decades even. It can be cancelled and the 18B for day to day government still has to be borrowed each year and does not appear to be reducing despite the cutbacks (because gov spending is going up in other areas). The banks are broke because they lent based on government policy and encouragement. The government was elected by the people on promises in multiple elections to keep the gravy trail going. There were many who shouted stop but I’m sure you remember what Bertie suggested that we go do.

I agree that politicians/bankers/etc are corrupt/awful etc, but it suddenly seems news to a lot of people. It was well known during the boom years too, but the electorate didn’t appear to care. Now people are in a state of shock. They blame their leaders and elite. But when are we going to have a good luck of how we allowed our leaders to push the country to this point and how we allowed ourselves to be bought? We’re at the anger stage – there is some distance yet to go, before we get to acceptance.

We’ve paid a lot more than a few billion already Darryl. The National Pensions Reserve Fund alone was raided for €20 billion in hard cash which was pumped directly into the banks. The bulk of the remainder of the bank bailout was added to our National Debt. Our National Debt was €38 billion before the bank bailout and now stands at around €130 billion. The debt needs to be serviced every year and in 2011 it cost €5.4 billion in interest payments which will rise to €7.5 billion this year.
The budget deficit money is spent for the benefit of the Irish people on health, education social welfare etc. We get nothing in return for paying the banking debt except a pat on the head from Europe. I sincerely hope we never lose our anger over this monumental swindle and begin to accept it.

No, I mean that we accept the problem, not the situation. Our deficit, not the debt, is wrecking the country. You don’t seem to be accepting this, but I may have read you wrong. All countries pursue deficit policies – our deficit however is unsustainable. The bank debt is a travesty but also a red herring.

We need to get on from this anger and bargaining with ourselves and accept the problem. We can’t continue to borrow money like this. We are totally stuffed. If we default on the bank debt, then why would anyone else lend to us? How can we default continue to borrow money at the same time to fund our crazy deficit?

We either have to default and accept the dire consequences, but hope that with control back of our own currency and interest rates we can have a better long term outlook. Or we continue along the Troika line – where our short-to-mid term outlook is better than defaulting, but the long-term outlook is very grim.

But there is no easy way out. We are just kidding ourselves if we think this. The situation is dire. We need to figure out what we need to do and accept the consequences. Personally I am in favor of defaulting on the bank debt. I also know we will get thrown to the wolves if we do. So if this is what irish society wants, we need to prepare for it – and not be surprised by the very negative impacts.

Sean! Europes elite are a far safer bet than Ireland’s elite! Wasn’t it the corrupt, self serving, thieving Irish elite that got us into this mess in the first place?

Rodrigo, and what makes you think that Europe’s elite will treat Ireland any better than Ireland’s elite? And why is it necessary to just accept a bad lot? The Irish elite were not alone in getting us inti this mess. No need to massage Fianna Fáil’s ego further. You may be happy to accept Ronan Lyon’s economic spin but I expect better for my country and her people.

Rodrigo, you misdiagnosed the causes of this crisis. Irelands political elite are guilty of corruption and have been negligent in their duties. Irelands bankers were negligent and also corrupt. This is not unusual behaviour during credit bubbles. But resolving this (and it must) does not resolve the dysfunction that created this crisis.
Europe’s leaders cannot save Europe. If this is not already clear, it soon will. There is only one institution that will save Ireland’s society and return her economy to growth. That institution is Ireland’s society. Rhetoric extolling the advantanges of yielding sovereignty to Brussels/Frankfurt reinforces the fallacious idea the Ireland’s people are helpless in the face of this crisis. The solutions to this crisis are within us not Leinster house or Brussels.

“A leader is best when people barely know he exists, when his work is done, his aim fulfilled, they will say: we did it ourselves.”
Lao Tzu

Might I suggest not using the word “sheeple” when making a point? Whenever I read it, I envisage the author as a crusty in Jesus sandals carrying a copy of David Icke’s latest tome.

Europe’s elite couldn’t find Ireland on a map.

It’s time we stopped looking for a sugar daddy and realized that we need to be responsible for ourselves. That doesn’t mean isolation, it means having some sense of integrity and self determination. Look at Iceland.

Spot on Censored!
Makes my point in a more succinct and efficient (less rambling) style.

Maybe we need to look a bit further away from home to see how others are looking to bring about change for the better… Check the link below and then dig a bit deeper and think might this work better If each country tried to establish a similar well organized alliance to challenge the corrupt systems we all complain about on a daily basis….!!! This can work in every country which was ever under British common wealth rule because in general the laws were built upon the English law system and the bank system based upon the English banking system.

http://www.newera.org.za/

Everybody should take the time to look and study what they are attempting to do….

Tom Newell

You are quite right.

But note that the key to the elites maintaining their dominance & control is their universally pervasive spreading of the Big Lie – ‘TINA’ (‘There Is No Alternative’)

The way out of this for us ordinary people – the 99% – is to educate ourselves on the real alternatives that do exist with a proper democratic counterbalance to society solely in the interests of rich elites. Make no mistake, the ruin & rape of Greece & Spain are just the beginning.

Please see my post above for web links on where to start to properly understand macro economics & the monetary system.

Mike. you’re talking even more crap today than usual! Greedy Irish bastards caused this mess! And even greedier Irish bastards agreed the terms of the bailout! It’s not as if European banks forced Irish banks to behave recklessly, and it’s not as if European leaders forced us to take the bailout money. Irish people caused this through a combination of greed and ignorance! I’m just glad that same said people don’t have the same power as in regards fixing it! As I’ve said before, Ireland’s not capable of running itself. We’ve proved this countless times in the past! The fact that almost all of the so called elite who caused this disaster still have their liberty says it all really! Then when an incumbent TD admits on national radio to grand scale theft, the present government insist its not their business to interfere! In all seriousness Mike, could you really see this happening anywhere else? I say give complete control to Europe. Then we might just have a chance!

Rodrigo, it is you who is talking crap. By your rather defeatist line of thought, no country should have the right to govern itself. It’s funny, isnt it Rodrigo, that this crisis is not actually unique to Ireland – or hadnt you noticed? It might perhaps suggest that at least some blame needs apportioning to outside our borders. Alas, that fact will fall on deaf ears I fear – you have demonstrated your disdain for anything Irish on many an occasion.

if we cannot coin our own money and control the interest on it then we were never sov

Dave! You’re completely deluded if you can’t see the facts in all this! We elect the same people over and over, and they’ve continuously proved that they’re not up to governing a country! These people created the conditions, (despite being advised by people who should know) that caused the mess we find ourselves in! You are beginning to sound like Bertie Ahern and co when you try to blame external forces! Politics in this country is rotten to the core, and I personally don’t trust anyone that’s involved anymore! The socialists workers even managed to reveal their true colours in regards to Mick Wallace. That was the last straw for me. Ireland has been ruined by gangsters and vested interest groups, who turned a blind eye because it suited them. We had our chance to become a great little country, but an epidemic called greed killed all notion of that ever becoming reality! I for one sleep easier at night, knowing that people outwith Irish politics has some semblance of control!

Agreed. We don’t trust our own politicians and we don’t trust the EU. I don’t think anarchy would be too much fun and I don’t think we should give the reins back to the church. Someone needs to administrate, even if it is the best out of a bad lot.

What has that got to do with anything in this article ???