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THE PRESSURE IS now on and all over the country – ordinary people are being squeezed by banks, by the State in all its forms, and by countless other hungry creditors. And this is before a single cent is spent on the necessities of life or on a creative act of one sort or another.
This is a battle for the future of Ireland. The future will either be new and dynamic or the status quo will emerge stronger than before.
The idea of crisis implies the status quo has failed and crisis is supposed to herald in a new way of doing things, new ideas and new leadership. But in Ireland the status quo is fighting back with an unprecedented intensity. To win, the system knows that the new and the daring must be curtailed. So emigration and unemployment are the friends of the status quo because they weaken the creative and the innovators. The system may even support charity because it gives it the look of compassion. Navel-gazing and political intrigue are encouraged because they deflect attention to the peripheral and to the meaningless.
The system began its defence by identifying an enemy and blaming it for the crisis. The personnel around the table on the fateful night of the guarantee in September 2008 were lawyers and civil servants – the doyens of the status quo. They realised that the system had failed but as its champions they decided to place the blame elsewhere. Banks would be saved, the political machine would remain largely untouched, and the civil service would continue to stand all powerful. The hatchet when it fell would fall on the entrepreneur, on the private sector, on those in our society who have the ability to dream and to embrace change.
True it is that many so-called entrepreneurs in the Celtic Tiger were local speculators whose contributions are ghost estates on the edge of towns. Even among the most professional of developers there was an ugly swagger and sickening arrogance. But this is not the full picture and those that have declared war against developers have done so out of self-interest only. Many of those in our community who would otherwise have been involved in other forms of enterprise became captivated by property. That is the shame of the Celtic Tiger – the missed opportunity. Some built wonderful infrastructure that will benefit Ireland for generations. Others were good business people who got caught in the hurricane. The key, though, is that many were entrepreneurs and some were even visionaries.
Entrepreneurs and those who drive small- and medium-sized business in any community have vision and they take risk. They create and creativity is their contribution. Professional firms grow rich serving the projects dreamed up by these entrepreneurs. All the wealth created is subject to tax which then swells the State’s coffers so that health services can be run. The fact that the public health service is run inefficiently is not the fault of the private sector.
In Ireland today the system, to protect itself, blames the private sector for the ills of the past. If you have been self-employed and have fallen on hard times this is a truly awful society in which to live. The welfare system will reject you; the legal system will torture you; and when you move to improve your lot road blocks will be placed in your way such that only the very few can survive. And meanwhile emigration continues, unemployment continues, and official Ireland is alive and well and in full recovery.
A vibrant society is a free society where people are in control of their own lives and their own destinies. But the type of person who wants to shape his or her own destiny is a risk-taker, an adventurer, a non-conformist – and the status quo fears such people because they threaten the system. Ireland in 2020 will either by more stultifying than it is now or it will be free and that will depend on what happens over the coming few years.
The biggest and most immediate issue is how we deal with personal debt. It is a more important factor than public debt because private debt is the millstone that holds back enterprise and enterprise is the key to a better future. The debt is almost always property related. Whether it is the family home or investment property, the problem is all the same – debt that cannot and will not be repaid.
While banks have long since realised that this debt is never coming home they continue to enslave huge numbers in the name of public interest. At New Beginning we see on an everyday basis people who, if freed from unmanageable debt, could and would rebuild this broken country. Instead they are hounded by the State and its institutions and then we wonder why the economy has been in the doldrums since 2007!
The answer to our woes is fundamentally simple – debt must be written off and people returned to being solvent. Credit must be made available into the real economy at levels and rates that will allow commerce to start again. As this happens employment will increase and real prosperity can be established.
Waiting for government and banks is a waste of our precious time. People need to take control of the situation themselves, however hard that may be. Bankruptcy and Personal Insolvency will force the issue if we are brave enough to grasp the nettle. In bankruptcy all debts are written off immediately, giving the debtor the chance to begin again. In Personal Insolvency the majority of debt is written off so that the debtor can breathe and start a new life.
This is not rocket science. Debt write-off has been a part and parcel of the economic order since time began. The establishment will resist – as it always does – with the cry of moral hazard or whatever. But the future of Ireland, dark or bright, will be determined on this battlefield. Every citizen freed from excessive debt can herald a new venture and every new venture will bring employment and hope for the future.
The alternative is to allow our communities wither and die while government ministers applaud foreign visionaries who come here to take advantage of tax breaks and then repatriate profits home to lands where enterprise is valued.
Ross Maguire, Co-Founder at New Beginning.
A tad misleading on the effects of the ‘foreign visionaries’ setting up here. They give employment to many thousands of our brightest and best who in turn pay tax and spend here at home.
Many entrepreneurs set up businesses not for charitable purposes but for self enrichment and advancement.
To cancel the debts of all who took risks during the madness of the Celtic Tiger years and failed, without a corresponding examination of their ability to succeed would be foolishness.
Capitalism as we have experienced it failed and failed miserably.
Mary and Joe citizen will for years be paying the price for the unbridled greed which was the hallmark of the Tiger era.
Any new beginning should be carefully constructed so as to avoid the trap of the Market becoming our god. Humanity deserves more than economics.
Shave your head John and go to india
Mr. Maguire fails to mention whether he favours increasing taxes or cutting services to pay for the bank recapitalisations that would be required after the write-downs that he is looking for.
Exactly, Someone will have to pick up the tab if debts are written off and that someone will be variable rate mortgage holders who are already making huge sacrifices to pay up their installments every month. Alternatively there will have to be a tax on everyone or withdrawal of public services from everyone.
Can Mr. Maguire please advise us of how he will balance the books.
Obviously Patrick You’re a variable rate mortgage holder. I think i prefer a more balanced and unbiased comment
The banks are not managing the crisis and they have been hugely negligent. They have made commerically unsound decisions such as refusing to allow sales go through only to repossess properties and sell at a fraction of the price. No normal business would operate like this, but no other business is protected by a guarantee from the state. Read this http://louiseinflight.wordpress.com/2013/11/25/my-david-and-goliath-battle/ and you can see the extent of their negligence. I am sure my case is not unique, but then why whould they act, when their money is protected regardless.
Private debt is a serious & often ignored ‘millstone’ around the neck of the real economy, but it is enormously difficult to determine ‘fair’ use of what would have to be public resources to pay it off.
However, the biggest problem with it is not the debt itself, but the deliberate policies causing mass unemployment, reduced wages & higher taxation which is crippling our ability to manage it. (And in future, properly regulate banking to avoid another private debt bubble.)
There is, and was, no need whatever for these economic policies. By instigating a (MMT) Job Guarantee 5 years ago, all of Europe would be (near) full employment by now & have produced vastly more wealth – literally €trillions – for ordinary citizens.
The elites chose their own narrow interests over those of the majority. (Interestingly, not in fact choosing their own wealth in absolute terms, rather their +relative+ position to the rest of us.)
It would help enormously if a large amount of Public Debt was paid off right across Europe on an equal per capita basis. That way at least public services could function properly to assist those in financial difficulty. This could be financed by newly issued money from Central Banks at zero cost to anyone. It should spread out over a few years.
But there would still remain one major issue to be resolved.
The top few percent have accumulated far too much Capital wealth over the last 3 or 4 decades of Neo Liberal rip-off economics.
Think about it. The ‘real’ economy can only +productively+ use just so much investment finance before such finance simply becomes speculative, bids up the price of existing assets, and engages in various forms of rigged gambling or Pyramid schemes.
At the ‘macro’, overall scale, there can only be one loser in too rapidly growing Capital looking for a return from a lesser growing (or even shrinking) ‘real’ productive economy. Capital can only keep doing this by increasingly taking more as a proportion of all wealth produced – which means that the majority of ordinary citizens will continue to receive a smaller proportion of the total. This manifests not just in reduced ‘real’ personal income, but also in reduced services supplied publicly to all.
Exactly what we are seeing in fact. But rather than address this fundamental flaw & imbalance in the Neo Liberal version of Capitalism, the top few percent – Capital owners – instead attempt to squeeze whatever they can out of ‘developed’ world populations whilst moving large amounts of Capital to ‘developing’ countries. In order to exploit the vast low wage/long hours workforces with poor working conditions, no public services, environment for maximum return on their Capital.
This is Neo Liberal Capitalism, which has made ‘democracy’ irrelevant by ‘capture’ of politics & all supposed (majority) public interest Institutions, in virtually all countries.
This is the Neo Liberal Capitalism that sold itself on the lie that wealth would ‘trickle down’, ‘lift all boats’ etc. Just as critics said at the beginning, it was never going to do this. What we are seeing is inevitable & logical conclusion of it. Also definitive proof, in the lack of interest in reform across all public institutions these last 6 years, that ‘democracy’ – supposedly representing the majority’s interests – does not exist in any meaningful way. Political leaders & public institutions (including mainstream are showing even less inclination to address this glaring issue.
Why is that? Simple, they are all part of the top few percent who continue to gain even whilst the rest of us suffer. (Or are in a career where they aspire, and can reasonably expect, to join this cosy club at quite an early age.)
We see the same old games emerging. More property bubbles, Dublin, London and apparently land/property in Germany is now succumbing to the speculative Capital that it’s owners/controllers would rather gamble with than invest in our real economy.
The Finance sector, grown to an enormous size relative to the real economy (as a result of excess accumulation of Capital) has not been reformed one iota. The (rigged) Casino, financial derivatives, banks’ proprietary trading (betting against customers), both commodity speculation and involvement in commodity supply & distribution (to exert hidden control). All these are still in place.
As Professor Michael Hudson points out in numerous papers and books, there is only one logical conclusion if we fail to stop this. The top few percent – owners of Capital – will own everything, which will then be only available to ‘rent’ by the majority of citizens at the maximum possible rate of extraction. This is Feudalism, back to the 18th century and earlier, pre-democratic societies of indentured, dependent Serfs and their all-owning Lords and Masters.
At this stage, in my opinion, there is not one senior politician in mainstream parties, or senior public official who deserves to remain in office. We should rescind their absurdly high pension entitlements as well.
They have done absolutely nothing except give us more lies and flannel in order to simply maintain their own positions in the Top Few Percent gravy train.
Fcuk’s sake Mike save us the economics lecture. I’m sure someone is impressed with your thesis but mother of God why do we have to suffer it
TLDR version:
‘Its always someone elses fault’.
Banks Max Your Debt.
Gov’s Max Your Tax.
Yep .. EU citizens walking blindfold into Serfdom.
“Time to Bring Your Brains to the Polling Booths”
this is all about public debt which that gimp Lenihan and his FF cronies foisted on us and the current shower are running with. Beware Lawyers pontificating on Finance matters
Mr Ross , you are right about banks not getting back the money that they lent ..No-one held a gun to the banks heads , they were just too reckless ..
Cut out the middle man and shove a bankruptcy certificate in their faces , and as they say , deal or no money ..
I’m all in favour of debts being written off but only if the asset the debts are secured again is given up in return.
Getting debt write off AND keeping that asset for cheaper merely punishes those who have been prudent and didn’t over extend themselves. It punishes them twice because not only is stock being withheld from the market pushing up prices for others, those others then have to pick up the cost of the write off too.
In the US you can “hand back the keys” … a proper balance between lender and borrower … shared risk. The only charge on the loan is the asset (no debt till death). EU need to legislate for same. Until then EU citizens will continue to be treated like 12th century serfs. EU a failed society .. sad. EU citizens need to “Bring their Brains to the Polling Booths”
The lesson from the US “bailouts” of the banking and auto industries is this…if your government officials are unwilling to let “the marketplace decide”, ie let companies in the affected industries undergo bankruptcy proceedings rather than bail them out with taxpayer money and let the marketplace decide who survives based on real competition…then nothing changes except that the taxpayer loses more of their hard earned money. General Motors for example wasn’t forced to renegotiate contracts with suppliers or unions…they were simply handed taxpayer money and allowed to continue to do the things that got them into financial trouble in the first place. Most people in the US don’t know that when they spend $30K on a GM or Chrysler vehicle built in the US, $3K to $4K of the money goes directly to union pensions and healthcare. If they spend the same amount on a US made Toyota or Honda or BMW…companies that have no unions…, they’d get an additional $3K to $4K of quality built in or options added on.
Private debt?If the taxpayer owns the bank does that not technically make it public debt?
John as has already been demonstrated ultimately in the event of default it falls back on the taxpayer anyway
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