my view of the budget

alfa beta

The celtic tiger did a bad thing to a lot of people's brains. It stopped them from working properly.

It promised an entire generation that things would and could only ever get better, that wages would only ever go up, that property values would only ever rise, that living standards would continue to improve indefinitely - and, you know what, that generation believed those things. Of course they did, after all why shouldn't they?

As we now know, it was largely an illusion, a pyramid scheme perpetuated by a substantial group of vested interests who's profits and lifestyles depended on its continued existence - and driven by the ready availability of and insatiable desire for easy credit amongst the ordinary people who believed wholeheartedly in the promise it made.

People believed they had nothing to fear when they spent five or six times their wage on a badly built house. After all, it would of course go up in value. They believed they had nothing to fear when they took out a loan for a new car. If they could afford it today, then they would be able to afford it tomorrow and the day after and the year after. After all they weren't going to ever get a pay cut or, heaven's forbid, loose their job. That sort of thing didn't happen anymore.

What the celtic tiger did was simple - but hugely effective for those who stood to gain most from it - it stopped us, the general public, from considering risk when we made financial decisions (or at the very least it distorted our view of risk).

It said 'don't worry about the future, shur isn't everything on the up, and won't it always be like that.'

And it said it so often and so purposefully and so credibly and so loudly and by so many people...that we believed it more and more and more. And we began to take everything we had - and everything we had gained - for granted.

We took employment for granted, we took good wages for granted, we took our improved lifestyles for granted, we took substantial increases in social welfare for granted. In fact at one point we were taking everything so much for granted that we hardly batted an eyelid when the government introduced us to an unprecedented rate of return on our savings (with SISA's)

Now we all know that taking things for granted does one thing above all others - it ruins our appreciation for those same things. I see that in my own three-year old son. As I'm a big softie at heart I find it hard to leave a toy shop without buying him some small gadget to play with - the impulse buys near the counter usually! However, with Christmas looming and with things tighter in our household in general, I recently said 'no' to which of course he screamed and protested and then sulked for a while and then, well, he got over it and by the time we were home was quite content to play with his 'old' toys.

I saw the whole episode as his first little lesson in learning to appreciate both what he has and what he is given - and not to take everything for granted. It also demonstrated to him that he may not always get what he expects or feels he deserves - and importantly, this can happen through no fault of his own. After all, it was I who could not afford a new toy. He was not being punished for behaving badly; far from it in fact, he had been behaving excellently all week. It was simply a case of 'not now, not today, you got a lot of stuff during the year when I as making good money, but right now I'm a bit strapped so maybe next week - and in the meantime, you still have other toys at home to play with.'

The analogy may seem a bit silly, but I felt a similar tone sat behind last wednesday's budget. In the space of an hour the ridiculous upwards-only ethos that underpinned the celtic tiger was finally laid to rest. And it was done so in a way that was straightforward, somewhat brutal and - in my view - effective. It was done through the means of an unprecedented pay cut. It was a budget that said: 'the 'take-it-all-for-granted' philosophy of the tiger is well and truly dead and well and truly buried'.

It was a budget, in my view, that should urge us all to grow up a little, to realise that as individuals we do have to stand on our own two feet, we do have to take the good with the bad.

We're grown ups after all, so instead of screaming and protesting and shouting when we're told we can't have something we totally believe we deserve, we should figure out our own way of getting it instead - isn't that what grown-ups do!

And while we're figuring out how to get it, we should occasionally remember to appreciate what we have.

Peanut

alfa beta wrote: »

...
People believed they had nothing to fear when they spent fifteen or sixteen times their wage on a badly built house. After all, it would of course go up in value.
...

fyp :pac:

ei.sdraob

alfa beta wrote: »

The celtic tiger did a bad thing to a lot of people's brains. It stopped them from working properly.

well said, i feel like quoting you in my signature

alot of people complaining how bad things are, but all they have to do is travel a little. Ireland is a rich country compared to just about everywhere else, even with a recession were still not doing to bad at all in comparison

saol alainn

ei.sdraob wrote: »

well said, i feel like quoting you in my signature

alot of people complaining how bad things are, but all they have to do is travel a little. Ireland is a rich country compared to just about everywhere else, even with a recession were still not doing to bad at all in comparison

I agree.

Having said that, though, as the thread is about views of the budget, I'd like to mention two things I cannot understand. Why is the judiciary untouchable when it comes to salary (I'm sure it's in another thread somewhere, I'll look for it later on) and talking about Ted Kennedy, and investing in a Kennedy project of some sort. In my opinion, it's a very big white elephant, and another massive waste of money. It will not bring people to Ireland, except maybe for a select few americans. I cannot see europeans coming over for a visit just because of that.

To many people, Ted Kennedy only escaped jail because of his name and money. It is as if Ireland has run out of good ideas, and seems to be grasping at any straw. The Kennedy connection has been done to death, anyway. Surely, if such a project was needed, there are many, many other irish men/women who are more deserving of such an honour.

ardmacha

Good post by the OP. The only observation is that the Celtic Tiger was not a pyramid scheme. The real Celtic Tiger was the 1992-2000 period when Ireland had real economic growth and real increase in living standards. This was akin to a person getting a new highly skilled job which paid better. The second phase in the 2003-2007 was analogous to that person borrowing a lot of money on the basis that they were going to have further increases in income, but without changing their job to a more skilled one. Basically if you want increased living standards then you have to work smarter to pay for it.

alfa beta

Hi Ardmacha - that's a good point - I guess the fact that I moved back to ireland in 2003 sorta skews my view of the whole period. My experience of the celtic tiger (since living here) amounted to seeing an economy and a society getting off in a big way on an increasingly dangerous property bubble - and listening to a bunch of vested interests lying through their teeth about soft-landings and sound fundamentals.

I guess I missed the sensible part of the boom.

Do you think the movement from 'rapidly growing economy' to 'massive credit binge' was an inevitable one - or could we have avoided the latter with the right leadership?

thebman

alfa beta wrote: »

Hi Ardmacha - that's a good point - I guess the fact that I moved back to ireland in 2003 sorta skews my view of the whole period. My experience of the celtic tiger (since living here) amounted to seeing an economy and a society getting off in a big way on an increasingly dangerous property bubble - and listening to a bunch of vested interests lying through their teeth about soft-landings and sound fundamentals.

I guess I missed the sensible part of the boom.

Do you think the movement from 'rapidly growing economy' to 'massive credit binge' was an inevitable one - or could we have avoided the latter with the right leadership?

The problem is that it is how most western economies operated. America, Britain etc...

We could have avoided it but the government gets political donations from construction at the time so had no interest.

ardmacha

Ireland was absorbing "anglo" attititudes to irresponsible credit while being part of a currency union which provided low interest rates. The US and to some extent the UK have important currencies and can export the problems. The likes of Britain is now printing money to feed their habit, while we have to deflate to get things back on the rails. The only hope is that the present experience is a learning one and that we will be more responsible for a generation or so. Better government would not have completely helped things, but we had a government that was encouraging recklessness with Bertie as the cheerleader.

Sandvich

It was a budget, in my view, that should urge us all to grow up a little, to realise that as individuals we do have to stand on our own two feet, we do have to take the good with the bad.

We're grown ups after all, so instead of screaming and protesting and shouting when we're told we can't have something we totally believe we deserve, we should figure out our own way of getting it instead - isn't that what grown-ups do!

Bull**** and exactly the problem with this country at the moment.

It's a goading tactic - if you don't agree with these cuts, you're IMMATURE. Because people don't like to be immature, they tend towards this way of thought.

Do you really think the problem with Ireland has been that we don't have enough screaming and protesting? Are you sure you've been living in this country the last few years?

We've become hopelessly apathetic to the point where we're widely justifying bad things happening to us, because obviously if they're "Tough" decisions, they can't possibly be **** ones. Unless, they know, they are and you're trying to get people to feed bad by calling them immature just for opposing poorly reasoned cutbacks.

I also like that you make out that outrage towards the budget is out of greed- when this mess was caused by greed, and not the greed of people protesting(for the most part).

Wishbone Ash

saol alainn wrote: »

Why is the judiciary untouchable when it comes to salary

Under Article 35 of the Constitution, a judges remuneration cannot be diminished while he/she is in office. (Same for President).

It's there to prevent the Government/a Government Minister from exercising their influence or being vindictive towards a judge or President who may issue a judgement which goes against the Government's wishes.

To change that article would require a referendum which would cost much more than any reduction in their income. There is nothing to prevent them from volunteering to take a reduction.

thebman

Sandvich wrote: »

poorly reasoned cutbacks.

Which cutbacks do you think were poorly reasoned?

Rev. BlueJeans

I don't think they were poorly reasoned, in fact I don't think they went far enough.

-Garlic should have laid it on the line to the PS (and by implication, the private sector too, using the figures at hand), that the increases awarded over the last four or five years were a critical error, driven by narrow-mindedness, lobbying, and greed, and that they need to be universally rolled back. I can't understand why he can't turn around and say, yes, we made an arse of it. All of us. Property prices were merely a symptom of this trend, imo, at least in later years.

-He should have taken a hardline on welfare, in real terms it wasn't cut significantly at all (cue roaring from those who think that welfare is designed to replace a salary), but only for those who abuse it.

-He should have announced a root and branch reform of the administration of welfare here, fraud, and opportunistic fiddling of the system should be wiped out once and for all, as much as humanly possible. This is Hanafin's baby ultimately, but he holds the pursestrings.

-Tax evasion, sorry, I really mean tax avoidance, not quite the same thing, endemic to this country, and among a certain class, carrying somewhat of a grudging admiration, a little like the guy 15 or 20 years ago who could make his way home in a car after a feed of drink. That has become socially abhorrent, so too should evasion of ones fiscal responsibility to the revenue.

-Rigid regulation of the banking sector. 500k should mean 500k. Simply employ a 100% levy on any and all earnings paid to bank executives over and above that figure, including share packages. Sorted.

-Introduction of draconian penalties in relation to white collar crime. Most of the laws are already on the statute books, but seem to be ignored, particularly in the case of that odious little Anglo executive.

-No more capitalisation! It has been an error, particularly in the case of Anglo. If they can recoup some of what they threw in there already, even better.

-NAMA seems to be here to stay. The valuations of the loans therein should be adjusted to take proper account of the state of the market. Half the place is in negative equity, why should we insulate the banks from this. Protect the deposits, sure, but leave it at that.

-Root and branch review and reform of local governance.

-Health. Oh boy. Harney has failed, that much is certain. However it would be outside the budgetary remit to remove that particular elephant from the room. I gather a myriad of reports and reviews have already been done on this matter, but the inefficiencies there need to be tackled too. The cossetted consultants are whinging already, I gather.

Just a few thoughts

saol alainn

Sandvich wrote: »

Bull**** and exactly the problem with this country at the moment.

It's a goading tactic - if you don't agree with these cuts, you're IMMATURE. Because people don't like to be immature, they tend towards this way of thought.

Do you really think the problem with Ireland has been that we don't have enough screaming and protesting? Are you sure you've been living in this country the last few years?

We've become hopelessly apathetic to the point where we're widely justifying bad things happening to us, because obviously if they're "Tough" decisions, they can't possibly be **** ones. Unless, they know, they are and you're trying to get people to feed bad by calling them immature just for opposing poorly reasoned cutbacks.

I also like that you make out that outrage towards the budget is out of greed- when this mess was caused by greed, and not the greed of people protesting(for the most part).

I have to say I understood the OP's post differently. As in, now we're here and we should help ourselves get back on our feet again. Getting people to grab each other's throats will only delay any recovery, however slight.

It is a very tough budget. I don't think anyone is denying that. What's the best way forward to get out of this mess, now rather than later?

Personally, I've no faith in FF any more than anyone else, unless they're one of the faithful, of course. But that's not important, as I cannot vote anyway. However, you are right when you say that people are hopelessly apathetic. I remember, about 3 years ago, during a conversation with some friends, mentioning how the minister of health wasn't doing a very good job of it. And neither was the then minister of education (then Mary Hanafin, I think it was). They all said things about being poisoned chalices and such ridiculous notions. But isn't that what they signed up for? And why keep voting them in? They're all the same, I was told many times. But that's all dead and gone. It's no use going over the why and wherefores. As long as everyone learns the lessons, there's no harm in trying to improve things. There'll be more than enough time, later, to make sure such a thing does not happen again.

One way of doing that is making sure people become more politically aware. Not to be obsessed by it, but by not taking for granted that politicians/government know what they're doing. Or that they're doing it for the country, rather than for their own world. Most of the time they do know exactly what they're doing, for sure. But at least if we're politically aware, it wouldn't be as easy for them to feed us all that koko del toro.

That's what I think, anyway.

Sandvich

It is a very tough budget. I don't think anyone is denying that. What's the best way forward to get out of this mess, now rather than later?

Shut up and put up is rarely the best way out of any situation. All it does is take the pressure off the government to actually expend effort in coming up with the best solution possible.

Eliot Rosewater

saol alainn wrote: »

Why is the judiciary untouchable when it comes to salary

Separation of powers, and its really the only way it can be. Imagine, for a moment, a case goes before the Supreme Court regarding something controversial, say abortion. If the Government had the ability to change the Judiciaries' wages they could threaten them with no pay if the Judges didn't return the verdict the Government wanted. That would erode the separation of powers.