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Social Crisis Grips Ireland - IMF Hit Squad Arrives - Watcha Gonna Do When They Come For You?

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Fri, 2010-11-19 00:10

#1

NDPP

Social Crisis Grips Ireland - IMF Hit Squad Arrives - Watcha Gonna Do When They Come For You?

Social Crisis Grips Ireland

http://www.wsws.org/articles/2010/nov2010/irel-n19.shtml

"The accelerating economic crisis in Ireland is taking a terrible toll on broad layers of workers, particularly the more vulnerable - children - the elderly, those on law incomes and with insecure housing.

Hundreds of thousands of people face privation and suffering as every area of social life comes under intense stress from savage spending cuts and increased unemployment.

This is in advance of the measures now being put in place by the Irish elite, the European Union and the International Monetary Fund to implement another major subvention of public funds to the banking system..."

better start paying attention Canada...

Fri, 2010-11-19 00:28

#2

NDPP

Europe's Dirty Secret

http://www.wsws.org/articles/2010/nov2010/pers-n19.shtml

it's a secret...

Tue, 2010-11-30 11:46

#3

Catchfire

Catchfire's picture

Duncan Cameron: Ireland proves banking is too important to be left to the bankers

Quote:

As Ireland is finding out, there is no place in the bond market for empathy. Speculators smell out an economy that is weakening, and "go short" with Irish government bonds. The short sales drive bond prices down, and interest rates up. Eventually the high interest rates will attract people willing to forgo the risk of default, in order to pocket better rates of return than available elsewhere.

The dominant capitalist ethic is "whatever you can get away with." Concern for oneself is enough. If I look to my own self-interest, that is the limit of my responsibility to others. When each looks to herself and himself, none need worry about anybody else. However problems are inherent to capitalism, for a start, because it does not work for everybody, and it is prone to crisis.

Financial crises have their own logic grounded in the ideology and practice of banking. An economic boom generates feelings of prosperity. Bank lenders let consumer spending gets out of hand, fueled by easy credit, low interest rates, and the boom itself. In Ireland, as in the U.S., it was housing prices that sped upwards, creating sentiments of new found wealth among home owners. Others were encouraged to buy into a rising market.

The idea that the capitalist market is self-regulating is demonstrably false. When the Irish housing bubble burst, it was the Irish and European banks that were left holding mortgages -- they had themselves written -- on properties that were now worth less than the outstanding principle. Meanwhile, unemployed owners could not make their mortgage payments.

Underlying any spending boom is access to decent paying work. When unemployment rises, and the economy tanks, the bank loans are revealed to be bad debts. The call goes out for a bailout, but nobody should be fooled. The money is for the banks, the Irish just get the bill.

Tue, 2010-11-30 11:48

#4

Catchfire

Catchfire's picture

And my favourite explanation of the crisis in Ireland:

Tue, 2010-11-30 12:07

#5

NDPP

Cool Catchfire!

Tue, 2010-11-30 12:08

#6

Snert

Snert's picture

I know spelling "flames are lame" but it's really hard to listen to someone trying to speak authoritatively about finance when they spell principal as "principle". Just sayin'.

Tue, 2010-11-30 12:26

#7

Catchfire

Catchfire's picture

Thanks Snert, it's been fixed.

Sun, 2010-12-05 13:16

#8

Catchfire

Catchfire's picture

Leo Panich: Thousands Protest Irish Nightmare Economy

Quote:
Paul Jay: So, in your view, how do we get from this miracle economy of Ireland with so low unemployment, and apparently a booming middle class, to bust?

Leo Panitch: Well, we got to it via the bust of the financial sector that Ireland certainly didn't cause. It was very much a American-made crisis. But insofar as a good part of the Irish boom involved Irish Banks borrowing short in order to lend long to their property boom, and to some extent to lend to foreign investors who were creating jobs, a lot of them American companies but borrowing from Irish Banks, the result of that when the financial boom ended in the United States was that the knock-on effect meant that Irish banks were virtually bankrupt. And one of the first places on the face of the earth that that was felt apart from Iceland was Ireland, and the Irish government immediately guaranteed all bank deposits. And insofar as they did so, they socialized, took onto the public shoulders the private debt of the banks. And you see the consequences.

JAY: So people are saying what happened is the banks bet, helped create a real estate bubble in Ireland. They bet on it, they lost the bets, and now the Irish people are being asked to bail them out. Is that a fair characterization?

PANITCH: Yeah. And, you know, Ireland didn't have a large public sector deficit, but it now does by virtue of having taken on the burden of the private sector banking deficit. And the result of that is what you see with the Irish debt, the Irish fiscal debt, not being willing – the banking sectors, especially in Europe, who provided most of this lending, not being willing to, as I said before, roll over that debt, not being willing to, in other words, lend any more when Irish bonds come due.

JAY: Paul Krugman wrote a piece recently where he compares what happened in Ireland to Iceland, where he said Iceland took a different approach toward a somewhat similar situation. What do you make of that?

PANITCH: Yeah. They tried to make the Dutch and the British bear some of the burden and came under a lot of pressure from the Dutch and the British for this and had to compromise somewhat, but they did spread it around a little. But you shouldn't think that the Icelandic people haven't had to carry most of that burden they have. Now, I must say, this is now a larger situation. And when the Germans, who always do this, since they never want to take responsibility for this themselves, it always falls more on the American state to organize the bailout. The Germans said that in the future, beginning in 2013, the banks ought to be taking some of the haircut themselves, rather than have the EU states lend – or the IMF or the Americans – lend the Irish state the money, provided they engage in this terrible austerity program. And as soon as the German banks heard that, and not only the German banks, they all the more wouldn't lend money to Ireland, because they didn't want to be caught holding Irish debt if they were going to be the ones who would have to take any of the haircut for this.

Sun, 2010-12-12 01:14

#9

KeyStone

Funny, it was just two years ago that the Adam Smith fanatics were holding up Ireland as a shining example of how to run a country. By bringing in deregulation, and dropping taxes, Ireland has achieved great success.

But now they are on the verge of bankruptcy? Peculiar.
Clearly, the answer must be further deregulation and lower tax rates.

That will fix everything.

Sun, 2010-12-12 16:21

Fidel

[url=http://www.reuters.com/article/idUSWLA043620101209]Ireland's Labour party to vote against bailout[/url]

[url=http://online.wsj.com/article/BT-CO-20101209-710614.html]Sinn Fein To Vote Against Ireland's Bailout Package[/url]

[url=http://online.wsj.com/article/BT-CO-20101212-703304.html]Fine Gael Likely To Vote Against Aid[/url]

Is this the beginning of the end for the neoliberal corporate superstate? Will debt restructuring transform Ireland into an impoverished Weimar Republic? Hopefully Irish MPs will vote NO and strike a blow against EU corporate and financial elites.

Sun, 2010-12-12 16:59

2dawall

KeyStone wrote:

Funny, it was just two years ago that the Adam Smith fanatics were holding up Ireland as a shining example of how to run a country. By bringing in deregulation, and dropping taxes, Ireland has achieved great success.

But now they are on the verge of bankruptcy? Peculiar.
Clearly, the answer must be further deregulation and lower tax rates.

That will fix everything.

It is more than funny, it is sickenly hilarious and ironic that here in Winnipeg the Frontier Centre was going on for several years in their Free Press op-eds about the wonders of Ireland. Yet now when I go to their website I could not find any overt links on the frontpage. It is so strange that the 'free marketer' types talk about a free market of ideas as well but all of their positions and behaviors, etc are so completely uniform, so much the same. They all promote Ezra Levant's ethical oil without hammering about all the subsidies for oil and mining. Now they are silent about Ireland; its as if they are actually a well-oiled, well financed PR chimera for corporate power and that they are all liars and stooges. Its as if they talk one way but function and operate in an entirely other way. Its as if they are completely dishonest and incapable of budging on one point lest the whole curtain fall. Has anyone seen or witnessed anyone from the Cato/Reason magazine/Taxpayer's Federation/Fronteir Centre come clean about their advice and commendations for Ireland and for New Zealand before that? This is not a rhetorical question; I am genuinely curious if one of them has stepped out of line, stepped into a shining light, away from the omninous herd of complacency and conformity like an Ayn Rand character and called out all of this for what it has been?

Mon, 2011-01-24 11:27

Catchfire

Catchfire's picture

Joe Higgins: 'Irish people owe nothing to banks & billionaires - refuse to pay now!'

Fri, 2011-05-20 12:10

Catchfire

Catchfire's picture

Germany and the Eurozone Sovereign Debt Crisis: the Lessons of History

Quote:
With pig-headed persistence, Germany is continuing to prioritize the rescue of German banks from their reckless lending to europeriphery banks and governments, over the wellbeing of millions of working people in the so-called ‘deficit countries.’ As financial journalists are now pointing out, the markets for Greek, Irish and Portuguese government bonds, and for the credit derivatives used to insure them, already show that the German obstinacy lacks any credibility. In the short term, forcing the repayment of debts through savage cuts in public expenditure is having exactly the consequences that Keynesian economics predicts: slashing public sector employment and incomes leads to a worsening of the public sector deficit, as tax revenues fall (from both incomes and consumer spending) and the state welfare bill rises. In the medium term, continuing austerity makes it impossible to undertake the investments, both public and private, that are essential if the indebted countries are to improve their international competitiveness. Sooner or later, sovereign bondholders are going to have to be forced to accept losses, and that means that ultimately banks all across Europe will have to do the same.