The Center of the Universe

St Croix, United States Virgin Islands

MOSLER'S LAW: There is no financial crisis so deep that a sufficiently large tax cut or spending increase cannot deal with it.

Angry Irish Voters Ready to Exact Revenge

Posted by WARREN MOSLER on January 21st, 2011

Notice that they are angry at the government, not the currency arrangements, as previously discussed.

What’s saving the euro is that it’s not intuitively obvious that the currency arrangements could possibly be part of the problem.

Rates are low, there’s relatively little inflation, and and the foreign exchange value is reasonably strong and stable.

And it makes perfect sense that they are now paying for past govt abuses and policy blunders.

So the widespread dissatisfaction is directed at the national govts in question.

And there is little or no inclination to abandon the euro.

Angry Irish Voters Ready to Exact Revenge

January 21 (Reuters) — Irish Prime Minister Brian Cowen’s government, called “The Muppet Show” by one newspaper on Friday, can’t die soon enough for most voters.

espair has turned to fury among Irish people over an economic meltdown that has forced them to swallow ever deeper cutbacks and tax increases, while ministers emerge from their luxury state cars to speak of the country having turned a corner.

Ireland has witnessed no Greek-style riots but voters are impatient for the March 11 election, called by Cowen on Thursday, to exact revenge on the political class.

“We need to hurt them,” said Bernadette, a mother of four and owner of a wine importing business that has cut its staff to three from 15, “Unless you hurt them they won’t pay any attention to you.”

Voters regard the political class as at best complacent and at worst complicit in the nation’s transformation from economic star to euro zone basket case.

Cowen’s Fianna Fail party is set for a record rout in March, according to opinion polls.

While voters are likely to elect the mainstream opposition, some will opt for independents or the hard-left nationalist Sinn Fein party.

“They should all be gone. There should be an immediate general election. Everyone is sick of it, said postal worker Gerard Williams, 43.

“I’ll be voting for independent candidates. The big parties have lost the run of themselves,” Williams said as he walked through St Stephen’s Green in central Dublin.

Outside Cowen’s home county of Offaly, it is difficult to find anyone with a good word to say about him.

In an editorial The Irish Times newspaper despaired: “God Almighty, no one thought it could have got worse! The Government is staggering like a drunken sailor towards collapse.”

The Irish Independent said previous comparisons between Cowen and the captain of the Titanic had been unfair: “Even the captain of the Titanic was able to rearrange the deck chairs.”

Cosy Culture

A botched attempt at a cabinet reshuffle forced Cowen to call the early election following scandals over his drinking habits and questionable choice of golf buddies.

Polls suggest the two main opposition parties – centre-right Fine Gael and centre-left Labour – will form the next coalition government.

But with Fianna Fail set for a hammering the field is also open for independent candidates and Sinn Fein.

Ireland’s crisis has its roots in reckless lending and lax oversight of bankers and property developers, groups actively courted by politicians for donations during the boom years.

Revelations that Cowen played golf with the former chairman of Anglo Irish Bank months before it was taken into state care cemented for many people their view that business and politics enjoyed a cosy culture.

The spectacle of ministers and parliamentarians resigning before the election with large pensions and reports of developers and bankers living well overseas have infuriated those who didn’t buy into the Prada bag culture during the boom years when Ireland was called the “Celtic Tiger” economy.

“It’s the ordinary man in the street, the middle classes, those in the private sector that are paying,” said Marion, 57, who worked in a multinational firm for 30 years.

“I didn’t benefit from the Celtic Tiger. I lived within my means. Will I even get a pension now?”

The downturn has forced Irish people, particularly young graduates, to seek work abroad, a bitter development for people who thought they had seen the back of mass emigration.

“There are no jobs; all of my son’s friends have left,” said Bernadette. “They are leaving because this is not a country to live in anymore. The government looked after the banks. For them, it’s like we don’t exist.”

8 Responses to “Angry Irish Voters Ready to Exact Revenge”

  1. strawberry picker Says:

    Not so fast Warren, from the guy that called you an idiot when you went on CNBC with liesman:

    http://globaleconomicanalysis.blogspot.com/2011/01/irish-government-collapses-six-cabinet.html

    The correct procedure is to announce intent to default with a statement something like “The Irish government refuses to bailout UK, German, French, and US banks too stupid to realize that Ireland was in the midst of a gigantic property bubble.”

    No doubt EU, ECB, and IMF will offer to cut interest rates to 2% or some such number, perhaps even 0%.

    The correct response to that sort of nonsense should be “This is not be a question of interest rates. This is a question regarding principal and principles. In regards to the latter, Irish taxpayers cannot and will not make foreign investors whole for their piss poor decisions. In regards to the former, and as a gesture of goodwill, we are prepared to offer 2 cents on the dollar for all debts owed.”

    That should set an appropriate tone for the “negotiations”. It will also send bondholders a very badly needed message.

    Reply

    Tom Hickey Reply:

    Even the arrogant big US banks are settling at 30% on the dollar on credit cards, I hear, and that is the offer from their side when they are pushed. Maybe it’s possible to negotiate even lower.

    Reply

  2. Tweets that mention The Center of the Universe » Blog Archive » Angry Irish Voters Ready to Exact Revenge -- Topsy.com Says:

    [...] This post was mentioned on Twitter by Sligo Hotels, Irish Hotels and Irish Directory , Australian MMTer. Australian MMTer said: RT: @wbmosler Angry Irish Voters Ready to Exact Revenge: Notice that they are angry at the government, not … http://bit.ly/ezX5ZH #mmt [...]

  3. GLH Says:

    “Ireland’s crisis has its roots in reckless lending and lax oversight of bankers and property developers, groups actively courted by politicians for donations during the boom years.” Is that Ireland or the US?
    Isn’t abandoning the Euro the only real solution for the Irish people?

    Reply

    vjk Reply:

    GLH:

    Apparently, the Irish NCB can print its own euros, un-collateralized even, as the article below indicates.


    A spokesman for the ECB said the Irish Central Bank is itself creating the money it is lending to banks, not borrowing cash from the ECB to fund the payments. The ECB spokesman said the Irish Central Bank can create its own funds if it deems it appropriate, as long as the ECB is notified.

    http://www.independent.ie/business/irish/central-bank-steps-up-its-cash-support-to-irish-banks-financed-by-institution-printing-own-money-2497212.html

    So, if the Irish NCB can produce E51B, every member-nation can do the same, it would seem.

    Reply

  4. Panayotis Says:

    Given that the EU has no central fiscal authority and the only public debt comes from memeber states, then it cannot generate default free savings instruments except euro currency and ECB reserves. The ECB can only exchange and/or use debt collateral with default risk except foreign currency swaps and sovereign foreign currency denominated debt. No wonder the ECB has capital adequacy constraints and a refinancing rate with a risk premium!

    Reply

    strawberry picker Reply:

    Dude don’t worry, as mosler has pointed out many times, the fed will loan unsecured to their euro buddies whenever they damn well please. Otherwise Bazooka hank my show up on the world stage with a nuclear weapon instead of just a bazooka – the banksters are doing god’s work and gonna save us all from ourselves. Idle hands are the devil’s work.

    Reply

  5. Rodger Malcolm Mitchell Says:

    The key word is “lending.” The ECB, and now the ICB, have been lending money to banks, which in turn, lend money to the needy. Lending to those in debt is not a solution to anything.

    What Ireland needs is a government that unilaterally can create money by deficit spending, not by lending. In short, Ireland needs Monetary Sovereignty.

    Rodger Malcolm Mitchell

    Reply

Leave a Reply

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>