Why I'm thinking of voting yes this time to Lisbon

Amberman

I thought we were arguing about whether or not cheap credit caused/contributed to the bubble through inappropriate interest rates due to EURO membership. Im not saying it caused the bubble, Im saying it facilitated it, the bubble couldnt have happened without the wonky rates since the returns wouldnt have been there to drive the specualtion if the cost of capital was correct for the lcoal environment.

Did the irish government have a part to play...sure...if you want them interfering in these types of decisions (you really don't over the long term) but if you are saying that it could have taxed the Yen carry trade or the global CDO market out of effect locally, you miss the point.

The wealth wasnt coming from taxable income or capital locally (though you could have increased property taxes after the capital got here to pay for your wind farm), but it flowed here from savings accounts in Asia at the call of the banks...for consumer, not government lending.

The government was largely on the sidelines duing this process...and rightly so. Entrepreneurs were drawn to property since they had blind spots and got their sums wrong. Is this ideal? No...but its the way entrepreneurs make decisions. Over the long run, this is optimal.

When the state takes capital allocation out of the hands of entrepreneurs, everyone gets poor and we all eat turnips morning noon and night. You dont own a turnip farm, do you?

If it wasnt lent to the domestic property market, it wouldnt have been lent at all. The banks needed the relative security of the property market to be able to resell the debt. Investors will walk away from wind farms faster than they will walk away from their homes This makes the debt more appealing to yeild seekers. Same story in the US and UK. Green entrepreneurs could still raise the money they needed for the wind farms using other avenues apart from domestic banks. If wind farms are such a good bet, they will still get funded once normality returns.

Don't get me wrong, I'm not against a one size fits all interest rate, this isn't my reason for resistance to Lisbon, I think membership and a wonky interest rates opens up a lot of opportunities for investors. Im all for that.

But for the masses, its a disaster, especially when they start employing martingale systems on high gearing.

As far as the allocation of the cheap credit is concerned, I agree completely with you. It shouldn't have been used as it was, but the way it flowed in made sure that the hands it fell into were dumb since a lot of the money was borrowed by unsophisticated investors via equity drawdown to buy home 2, 3 4 and so on, people looked at expanding property prices, gearing and thought "I want a bit of that pie".

They borrowed the money for that purpose, they didnt have it lying around. So it wasnt excess capital that could be diverted per se.

They couldn't have walked into a bank with £50k and got another £450k for a wind farm investment....but they could for a 2 bed flat in Dublin...and all the lovely gearing that went with it.

Its harder for Joe the plumber to get gearing for a windfarm off the coast of Donegal...and not as popular at dinner parties.

Amberman

K-9 wrote: »

Why?

Because the country needs more savings, not more debt.

K-9

Amberman wrote: »

Because the country needs more savings, not more debt.

But people aren't borrowing.

I thought you posted low interest rates cause the bubble, why not now?

Amberman

K-9 wrote: »

Which explains why our Regulators failed. They warned about 100% Mortgages, 6/7 times income affordability ratios etc.

Instead of warning, they should have stepped in.

Its all well and good saying that now. Can you imaging if the government had legislated that 3 or 4 times income was the maximum mortgage allowable in 2004 with a min 10% deposit?

They would have been lynched.

Amberman

K-9 wrote: »

But people aren't borrowing.

I thought you posted low interest rates cause the bubble, why not now?

Most people aren't borrowing, but some are borrowing on your behalf and look set to continue at increasing rates for a while.

Availability of capital...its being rationed by a different mechanism now.

K-9

Amberman wrote: »

Availability of capital...its being rationed by a different mechanism now.

How? Is this EU Related?

K-9

Amberman wrote: »

Its all well and good saying that now. Can you imaging if the government had legislated that 3 or 4 times income was the maximum mortgage allowable in 2004 with a min 10% deposit?

They would have been lynched.

YEP, That's regulation for you.

Amberman

K-9 wrote: »

YEP, That's regulation for you.

It might have worked, but they still shouldn't do it.

The are a few ways...the banks have tightened lending standards and credit spreads have widened. Banks are rebuilding their balance sheets too. It not really EU specific...its happening everywhere.

K-9

Amberman wrote: »

It might have worked, but they still shouldn't do it.

The are a few ways...the banks have tightened lending standards and credit spreads have widened. Banks are rebuilding their balance sheets too.

YEP, How is this EU Related?

Amberman

It isnt really, its happening everywhere....but much of the cause is EU specific in Irelands case.

Scofflaw

Amberman wrote: »

I thought we were arguing about whether or not cheap credit caused/contributed to the bubble through inappropriate interest rates due to EURO membership. Im not saying it caused the bubble, Im saying it facilitated it, the bubble couldnt have happened without the wonky rates since the returns wouldnt have been there to drive the specualtion if the cost of capital was correct for the lcoal environment.

Not really - we really are debating culpability, in the sense that cheap credit was something that happened (and globally), and we are trying to to determine whether there was a way the Irish could have played it that meant that cheap credit was of benefit.

Why are we debating that? Essentially, because your view is that the centrally set interest rates were a bad fit for our economy, whereas my view is that the Irish economy made bad decisions in the circumstance of that cheap credit - and therefore, by the obverse, that it could have made good decisions.

In turn, your view leads to the idea that centrally set rates are a bad thing in general except when they coincidentally fit our economy, whereas my view leads to the idea that the Irish economy could have, and should have, taken advantage of rates that were and are lower than we could sustain ourselves to build a stronger Irish economy.

Amberman wrote: »

Did the irish government have a part to play...sure...if you want them interfering in these types of decisions (you really don't over the long term) but if you are saying that it could have taxed the Yen carry trade or the global CDO market out of effect locally, you miss the point.

The wealth wasnt coming from taxable income or capital locally (though you could have increased property taxes after the capital got here to pay for your wind farm), but it flowed here from savings accounts in Asia at the call of the banks...for consumer, not government lending.

The government was largely on the sidelines duing this process...and rightly so. Entrepreneurs were drawn to property since they had blind spots and got their sums wrong. Is this ideal? No...but its the way entrepreneurs make decisions. Over the long run, this is optimal.

When the state takes capital allocation out of the hands of entrepreneurs, everyone gets poor and we all eat turnips morning noon and night. You dont own a turnip farm, do you?

The state constantly interferes in the allocation of resources and investment in society - indeed, that's a large part of its job. What were the seaside resort tax breaks if not exactly such a method of steering investment - in this case, to something rather less useful than a turnip farm. You can't tar any government intervention with the same brush used for command economies, however ideologically similar they are to a libertarian.

Amberman wrote: »

If it wasnt lent to the domestic property market, it wouldnt have been lent at all. The banks needed the relative security of the property market to be able to resell the debt. Investors will walk away from wind farms faster than they will walk away from their homes This makes the debt more appealing to yeild seekers. Same story in the US and UK. Green entrepreneurs could still raise the money they needed for the wind farms using other avenues apart from domestic banks. If wind farms are such a good bet, they will still get funded once normality returns.

That argument works up to a point, except that what a lot of people were doing was using exactly the property collateral the banks like to see, releasing the extra value, and, unfortunately, investing it in more property rather than businesses.

Amberman wrote: »

Don't get me wrong, I'm not against a one size fits all interest rate, this isn't my reason for resistance to Lisbon, I think membership and a wonky interest rates opens up a lot of opportunities for investors. Im all for that.

But for the masses, its a disaster, especially when they start employing martingale systems on high gearing.

As far as the allocation of the cheap credit is concerned, I agree completely with you. It shouldn't have been used as it was, but the way it flowed in made sure that the hands it fell into were dumb since a lot of the money was borrowed by unsophisticated investors via equity drawdown to buy home 2, 3 4 and so on, people looked at expanding property prices, gearing and thought "I want a bit of that pie".

They borrowed the money for that purpose, they didnt have it lying around. So it wasnt excess capital that could be diverted per se.

They couldn't have walked into a bank with £50k and got another £450k for a wind farm investment....but they could for a 2 bed flat in Dublin...and all the lovely gearing that went with it.

Its harder for Joe the plumber to get gearing for a windfarm off the coast of Donegal...and not as popular at dinner parties.

Except, as I said, they could have released the extra €100K on their house and put it towards something more useful than another one - and been given tax breaks to do so. The banks will indeed lend on the basis of tax breaks, as our several disastrous run-ins with pointless forestry shows, and money will indeed flow in those directions. Those avenues that led to pointless property speculation could, and should, have been made less attractive - and if the political will wasn't there to do that, then it is likely that Irish lending rates would also have fallen in line with international rates.

cordially,
Scofflaw

O'Morris

djpbarry wrote:

To put it more simply, a vote based on a full understanding of the treaty is better than a vote based on ignorance, regardless of whether that vote is a ‘Yes’ or a ‘No’.

The next referendum won't be about the treaty, it will be about the consequences for Ireland of a second no vote. As much as we need information about the treaty itself, it's even more important that we be given information on the likely consequences of a no vote.

djpbarry wrote:

I would be reasonably confident that if the electorate fully understood the treaty, any objections would be minimal (in my opinion), eurosceptics aside.

I believe the exact opposite. I believe as well that if people fully understood the likely consequences of a second no vote that support for the treaty the second time round would be even lower than the last time.

Scofflaw wrote:

A fully informed voter, whether Yes or No, is obviously going to be better than one basing their decision on ignorance and fear - it's better for democracy, and it's better for Ireland in general that Irish voters should fully inform themselves rather than voting in the dark.

It's important as well that they be given the information to allow them to make an informed decision. The outcome of the next referendum will be determined mainly by the electorate's understanding of the consequences of their decision. That's why they need to be given as much information about those consequences as possible.

Scofflaw wrote:

Your assumption that the only reason we're not being told the consequences is to generate fear, uncertainty

It's not entirely implausible. You have to admit that the cloud we're living under does have a silver lining for those people who are so eager to get the treaty passed. I know if I was on the yes side of the debate I wouldn't be in any hurry to reassure people that there's no chance of Ireland being kicked out of the EU if we vote no the next time.

Scofflaw wrote:

(b) not being willing to create further fear and doubt by discussing the possible consequences.

Would discussing the possible consequences really create as much fear and doubt as exists already?

Scofflaw wrote:

Lack of a plan B might be reprehensible, but you're assuming there is a plan B and we're just not being told it.

There's absolutely no doubt in my mind about it. They may not have signed off on an exact course of action but I've no doubt that they have discussed the next steps privately among themselves and they all have a good idea of the direction they'll take if the Lisbon Treaty is defeated a second time. It's inconceivable that this didn't come during the last EU summit when the decision was made to hold the second referendum.

Scofflaw wrote:

All the evidence suggests you're wrong, and that there simply isn't one.

I think you're still confused over what it is I'm referring to. You seem to think that I'm talking about a plan B as an alternative to the Lisbon Treaty. That's not what I mean at all. I'm just talking about the next steps they are planning on taking if we vote no a second time.

Scofflaw wrote:

Everyone is - the whole point is that we don't know what will happen, because the actors involved don't know what they would actually do.

I think they know what it is in their power to do and what it is in their interests to do. If they think it's in their power and in their interest to punish Ireland for voting the wrong way in the next referendum then I'd like for us to know about this in advance of the referendum so that we have a better idea of the consequences of our decision.

Scofflaw wrote:

You're voting on the possible consequences to Ireland, which seems reasonable to me, given you're an Irish voter. That you don't know exactly what those consequences are is a natural result of them being in the future

The possible consequences are knowable. There are things that they have the power to do under existing EU law and there are things that they don't have the power to do under existing EU law. It just needs to be made clear to us which of those powers they might be able to use to do bad things to us if we decide to vote the wrong way.

Scofflaw wrote:

you are entitled to believe that they would be negligible, as others here are doing.

I believe they will be negligible but I can't be sure.

djpbarry

O'Morris wrote: »

The next referendum won't be about the treaty, it will be about the consequences for Ireland of a second no vote.

You may well be right, but there are consequences to every decision. I would much rather people vote on the content of the treaty than vote on the hypothetical situations that may arise if the treaty is or is not ratified.

O'Morris wrote: »

I believe as well that if people fully understood the likely consequences of a second no vote that support for the treaty the second time round would be even lower than the last time.

Is that not somewhat at odds with the views that you have expressed in this thread?

O'Morris wrote: »

It's important as well that they be given the information to allow them to make an informed decision.

It’s equally important that people are prepared to inform themselves; you can take a horse to water…

O'Morris wrote: »

I know if I was on the yes side of the debate I wouldn't be in any hurry to reassure people that there's no chance of Ireland being kicked out of the EU if we vote no the next time.

That would be a little dishonest. While it’s highly unlikely that Ireland will be “kicked out” if we vote ‘No’ again (I don’t believe it is a realistic possibility), nobody can say with 100% certainty that it cannot happen (cue the calls of ‘scaremongering’ from the ‘No’ side).

O'Morris wrote: »

Would discussing the possible consequences really create as much fear and doubt as exists already?

Discussing the possible consequences would undoubtedly be interpreted as ‘bullying’. Better to concentrate on discussing the treaty itself, methinks.

O'Morris wrote: »

There's absolutely no doubt in my mind about it. They may not have signed off on an exact course of action but I've no doubt that they have discussed the next steps privately among themselves and they all have a good idea of the direction they'll take if the Lisbon Treaty is defeated a second time.
…
The possible consequences are knowable. There are things that they have the power to do under existing EU law and there are things that they don't have the power to do under existing EU law.

You seem pretty certain; so what might this course of action entail?

Amberman

Scofflaw

The banks like to see that collateral...its what they lend on easily to Joe the Plumber.

Ofcourse the state makes investment decisions....but you can't dismiss the commmunal forcing of investment allocations by the state on a populace with out referring to communism. It is defacto communism in many respects.

People could have put the released equity to more useful uses, but probably couldnt have enjoyed gearing, thats why property was so popular.

Ive already pointed out that the political will wasnt there to tax property speculation. Lynchings focus the mind well.

Cut it any way you want in theory, but in the real world where hinsight is absent and politicians follow the mob in general, this extra and inappropriate monetary laxness was bound to blow up bubbles. Property was, is and shall be the most likely asset class in this situation. The UK is a good example of this. They blew up a bubble less than 10 years after teh previous one got popped in this asset class. The key players rarely learn from one bubble to the next...because "this time, its different".

You can't look at this situation and conclude that the one size fits all Eurozone interest rate was blameless, or even peripheral. That argument marks you out as an unthinking Europhile. It is central to the argument becuase its a monetary and not really a political issue...in the real world at a local level.

Amberman

Scofflaw wrote: »

Those avenues that led to pointless property speculation could, and should, have been made less attractive - and if the political will wasn't there to do that, then it is likely that Irish lending rates would also have fallen in line with international rates.

cordially,
Scofflaw

There is no such thing now as Irish lending rates (in the way that you imply) in a properly functioning market...thats the point/issue/problem/accomodation for the bubble. Irish lending rates were in line with "international" rates, inside the EU, as they were supposed to be.

K-9

Amberman wrote: »

There is no such thing now as Irish lending rates (in the way that you imply) in a properly functioning market...thats the point/issue/problem/accomodation for the bubble. Irish lending rates were in line with "international" rates, inside the EU, as they were supposed to be.

If the Regulators had stepped in when the lending criteria was getting ridiculous, they could have reduced the bubble.

ShooterSF

nesf wrote: »

Nope, it wouldn't work for us because we're too small. We'd have similar currency problems to what Iceland went through. I'd also recommend checking up on how bad Sterling is doing because at the moment it's having a really rough time in the markets.

Tbh our membership of the Euro is the only reason we don't have a currency crisis right now and it has brought many more benefits to boot and that's the only sensible neutral economic analysis of the situation that you're going to get. In fact just look at Denmark at the moment and it's desire to join the Euro if you want an example of a country without serious economic difficulties finding it hard on the outside because of its size.



I would strongly recommend anyone who wants to discuss the economic impact of EU and Euro membership to visit the Economics Forum.

Hmm I won't claim to be an economics professor but if the U.K sink their currency, which they do, in a recession to force the price of imports up on their businesses forcing them to buy locally and strenghten their exports due to the exchange rate then a small country whose economy largely relies on exports to the U.K the ability to also drop the value of your currency surely makes sense.
I'm not claiming us still using Punts would have helped us avoid the recession. I did state that I feel it was gonna happen and Ireland are rather powerless to avoid it. I was giving an example of why blind further integration is not always 100% positive with no drawbacks and as such is not a reason to vote yes to lisbon.

nesf

ShooterSF wrote: »

Hmm I won't claim to be an economics professor but if the U.K sink their currency, which they do, in a recession to force the price of imports up on their businesses forcing them to buy locally and strenghten their exports due to the exchange rate then a small country whose economy largely relies on exports to the U.K the ability to also drop the value of your currency surely makes sense.
I'm not claiming us still using Punts would have helped us avoid the recession. I did state that I feel it was gonna happen and Ireland are rather powerless to avoid it. I was giving an example of why blind further integration is not always 100% positive with no drawbacks and as such is not a reason to vote yes to lisbon.

You miss my point, the usefulness of being able to devalue our currency (which would help us), is outweighed by the problems of a small country having its own currency. If you want to start a thread in Economics about this we can debate it further there we're getting off-topic for this forum with this.

emzolita

no way!!!!!!! just as a matter of principal, wat year are we living in, when if a government doesnt like the outcome it gets in a democratic poll it says, ok do it again? its a joke!
i did vote no the last time but even if i did vote yes the last time, out of pure "SHOVE IT UP YOUR ARSE" to Fine Fáil id vote no.
how dare they!!

democrates

emzolita wrote: »

no way!!!!!!! just as a matter of principal, wat year are we living in, when if a government doesnt like the outcome it gets in a democratic poll it says, ok do it again? its a joke!
i did vote no the last time but even if i did vote yes the last time, out of pure "SHOVE IT UP YOUR ARSE" to Fine Fáil id vote no.
how dare they!!

Remember the old saying "don't cut off your nose to spite your face". What's the higher priority for you, getting a dig in at FF or getting a better future for our country? Really, FFF.

While Lisbon is by my analysis a step backwards in terms of quality of democracy, the no alternative has become even worse. This is not a time for rash backlash, but clear calculation.

cozmik

democrates wrote: »

While Lisbon is by my analysis a step backwards in terms of quality of democracy, the no alternative has become even worse.

Fear Fear Fear Blah Blah Blah

You just don't give up do you?

Nostradamus

Scofflaw wrote: »

This leaves me pretty torn. On the one hand, I'm glad to see people voting Yes (since I think Lisbon is a step in the right direction, although not a long enough one) - on the other, unless some more rational No advocates step forward, the next debate here will be like playing Space Invaders with muppets. It's also a little depressing that the most powerful argument turns out to be fear - although I can also see what democrates is saying about being pointlessly (and unfairly, perhaps) in the firing line.

Eh, well, we'll see. I wish I could be more gleeful about it.

resignedly,
Scofflaw

I can't wait to vote NO again. My friends have I have printed 10,000s of flyers directly connecting the corruption in Irish politics and big business with the pro-Lisbon YES lobby.

We intend to plant the notion in Irish people's minds that Ireland voting YES to Lisbon would be just allowing our small time political/business mafia to join forces with the major political/corporate criminals in Europe to screw us all.

By the time Young Fine Gael get around to putting their posters up with YES on them, we the real people of Ireland will have already won the debate.

When is your 3d Lisbon Vote being planned then? You lot being so democratic and all that...

Nostradamus

democrates wrote: »

While Lisbon is by my analysis a step backwards in terms of quality of democracy, the no alternative has become even worse. This is not a time for rash backlash, but clear calculation.

I would not get too worried about what people on this board think as they are more than likely connected to the incresingly obsolete Irish polticial/corporate media structure which has no relevence to Irish society as a whole anymore.

Ireland is changing fast.

Nostradamus

emzolita wrote: »

no way!!!!!!! just as a matter of principal, wat year are we living in, when if a government doesnt like the outcome it gets in a democratic poll it says, ok do it again? its a joke!
i did vote no the last time but even if i did vote yes the last time, out of pure "SHOVE IT UP YOUR ARSE" to Fine Fáil id vote no.
how dare they!!

I heard this same statement from everyone I meet. Other than Scofflaw, various oddballs and maggots in the Young Fine Gael, FF, Lab and the current quota of still employed Irish corporate journalists currently cutting back on their booze and fag allowances I meet nobody who intends to vote YES to Lisbon II.

Scofflaw is gas, he is really just a pro-EU extemist survivialist. Wonder how long before these pro-Lisbon types are holed up in bunkers in the Wicklow Mountains with stockpiles of Lidl and ALDI tinned Sauerkraut writing letters of national apology to the Social Democrats in Germany.

nesf

Nostradamus wrote: »

I would not get too worried about what people on this board think as they are more than likely connected to the incresingly obsolte Irish polticial/corporate media structure which has no relevence to Irish society as a whole anymore.

Are you serious? If not, best joke I've seen on here in ages. The idea that boards.ie's Politics forum is well connected to the Irish political/corporate media structure!

Nostradamus

cozmik wrote: »

Fear Fear Fear Blah Blah Blah

You just don't give up do you?

It called the truth. Deal with it.

Nostradamus

Nostradamus wrote: »

I heard this same statement from everyone I meet. Other than Scofflaw, various oddballs and maggots in the Young Fine Gael, FF, Lab and the current quota of still employed Irish corporate journalists currently cutting back on their booze and fag allowances I meet nobody who intends to vote YES to Lisbon II.

Scofflaw is gas, he is really just a pro-EU extemist survivialist. Wonder how long before these pro-Lisbon types are holed up in bunkers in the Wicklow Mountains with stockpiles of Lidl and ALDI tinned Sauerkraut writing letters of national apology to the Social Democrats in Germany.

Finally, someone posting something on here that starts to make sense.
I have been thinking these things myself for a long while, but am afraid of scorn if I mention them to other people.

Nostradamus

nesf wrote: »

Are you serious? If not, best joke I've seen on here in ages. The idea that boards.ie's Politics forum is well connected to the Irish political/corporate media structure!

Oh come on now. There are more plants in here than in the Botanic Gardens.

Nostradamus

Deleted User wrote: »

Finally, someone posting something on here that starts to make sense.
I have been thinking these things myself for a long while, but am afraid of scorn if I mention them to other people.

Watch though. I'll be banned and my posts deleted by some "moderator" who considers themselves enlightened and progessive cos they watch Vincent Browne.

NEVER STOP TELLING IT LIKE IS IS. Scorn and riddicle is a weapon that the politicial and social elite in Ireland have used for decades to silence the truth.

This is the only weapon they have when you think about it. Make sure to make your feelings known about Lisbon II to everyone you meet. Why not, the pro-Lisbon shower do not restrain themselves from pushing their propoganda, and they are also the ones who do ALL the ridiculing and smarmy comments. Often using your taxes to pay for it. Honestly, am I the only person in Ireland who is sickened by the slithering Dick Roche calling Irish people morons for not following his personal wishes and setting him up with a cushy job in the EU?

The truth will set us all free. This country is in a shocking state right now and the people who led us here are the same ones who told us to vote Ireland deeper into the EU every single time. If that isn't a wake up call, then I do not know what is.

Frankly, for me it has come down to the reality than anyone in Ireland who is pro-EU really needs to hand in their citizenship and move to a totallitarian state because they obviously have a serious issue with democracy and national self determination. That fact that a YES vote is the top agenda for all our corrupt mainstream media, politicians and tycoons tells you all you really need to know about what the EU is really like.

The choice is easy enough; you either want to be Irish citizen, or live under the mandate of some bizzare unelected EU Commission.

nesf

Nostradamus wrote: »

Oh come on now. There are more plants in here than in the Botanic Gardens.