An Fear Rua - Gene Kerrigan gets it spot on.

Larkin

(4,404 Posts)

Posted: 15-Jul-2012 12:28

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Gene Kerrigan: Poor always pay in tale of two Irelands
The Reilly and Hogan fiascos show yet again that the big boys can get off scot free, writes Gene Kerrigan

Maybe I'm just a soft-hearted sucker who can't resist a sob story. Listening to James Reilly, Minister for Health, explain his little spot of bother, I found myself feeling sorry for the guy.

I mean, you can see how it might happen. You're engaged in a bit of the oul' property speculation and the market goes pear-shaped and, well, you know how that goes.

Next thing, you and your mates owe someone almost €2m, you're being hauled into court. Ah, come on, now, says the judge, or words to that effect. Pay up or else. And you don't pay up -- for one reason or another -- and the next thing you know there's a High Court judgement against you and your name's in the papers and -- ah, sure, t'would wring a tear from a stone.

Leave the poor wee man alone, I murmured -- as various characters from Fianna Fail took the high moral ground and began sniping.

(I'll write that again, in case you missed it: various characters from Fianna Fail took the high moral ground. In matters of property and debt and acceptable behaviour, can there be any of us who needs moral instruction from anyone in Fianna Fail?)

Anyway, I caught myself empathising with James Reilly. A bit of property speculation, a bit of debt, a bit of a court judgement, name in Stubbs -- sure, it could happen to anyone.

Except -- no, it couldn't.

What do you make of this other thing, this Phil Hogan thing? I'm not sure what to make of that. Maybe I'm dithering because I haven't noticed the Fianna Fail chaps telling me what to think.

It was in this newspaper's business section last week. Tom Lyons and Daniel McConnell had a story about how Phil's loans from Irish Nationwide were personally approved by Michael "Mickey Fingers" Fingleton, head honcho at Nationwide and major player in setting the tone of Celtic Tiger Ireland.

Seems that Phil bought "a pied-a-terre house in Dublin 4 and a luxurious penthouse in Portugal". The story went on to explain the details of the "soft loans", but I had to take a break and look up pied-a-terre in Wikipedia. A town house, it means, separate from your main residence. Isn't that nice? Good man, Phil.

Phil got a normal mortgage of €330,000 to buy his family home in Kilkenny. Then, another €450,000 to buy the little place in Haddington Square, Dublin 4. That was, it seems, on a 10-year "interest only" mortgage. As was the next €430,000 borrowed from Mickey Fingers, to buy a luxury apartment in Portugal.

So, at the height of the bubble, as a very wealthy doctor, James Reilly built up a significant property portfolio. And, Phil Hogan ended up with property investments worth €1,210,000, personally approved by Mickey Fingers, who had the run of Nationwide. And Mickey's reign might be jaw-dropping, but it was all sanctioned by the wonderful Nationwide board.

What matters most when such stories emerge is what they tell us about the two Irelands. And the revelations of the finances of James and Phil gave us some details of that other smaller, richer, luckier Ireland, where most of us don't live. We learned, for instance, about "interest only" loans, and "soft" loans and "non-recourse" loans.

Let's say I had a dream, and St Teresa told me a horse called Celtic Tiger was a sure thing in the Grand National. So, I borrow €100 from the bank and head off to the bookies.

Suppose the horse collapses halfway down the course. I lose. The bank will demand its €100 back, plus interest, and will if necessary take stern measures to get it.

There are some lucky people, however, who are allowed take out "non-recourse" loans. Suppose they borrow a million to put on the same horse. And it loses. All the bank is entitled to is the losing betting ticket. It has no recourse to the other wealth of the borrower.

This applies to some lucky High Net Worth Individuals who borrow to buy shares or property. If it doesn't work out, you can hand over the worthless shares or the negative equity property -- and walk away.

If you're a normal negative equity mortgage holder, living in the Ireland in which the rest of us live, you could never just hand back the keys. You're pursued for every cent of capital and interest.

As the Lyons/McConnell story put it: "The favourable treatment of special borrowers contrasts with Fingleton's well documented treatment of ordinary people, with the society prepared down the years to chase widows to the Supreme Court and even send one borrower to jail."

In one Ireland, people are squeezed mercilessly by the Government. There's a policy of internal deflation, which requires an increase in unemployment and a decrease in the incomes of those employed, and significant emigration. It leads to a prolonged recession. The major pain is suffered by those on low and medium incomes, who never played the game that caused the collapse. Many had no idea such games existed.

In the other Ireland, the wealthy are slowly sorting out the consequences of their investments. That's what we see James and Phil doing.

Now, when the likes of Nationwide got into trouble, if you or I were asked what should be done, we'd probably have shrugged our shoulders. "Good luck to ye, but we're buggered if we're paying for your property adventures."

It was that other Ireland, that small Ireland of wealth and power and office, of circles and connections, that decided that the State should take on almost €70bn in debt, in order to save every bank. Bloody useless Nationwide alone cost us €5.4bn.

It was the well-off people who inhabit that little Ireland who decided to save all the banks. Along with the ECB, and all those shadowy people who now run our country. Because the money trail stretched back from the Irish property investors, through the Irish banks to banks in Germany and France and the UK, where other gamblers had been betting on the Celtic Tiger. And if you pulled a banking thread in Dublin, maybe something might unravel in Frankfurt.

It was that other small Ireland that decided, along with their comrades in the ECB, that bondholders should be paid every cent on their failed gambles.

And it is the bigger Ireland, where the rest of us live, that's being squeezed to pay for it.

In this bigger Ireland, it's not selling off an embarrassing nursing home property, at the right price, that concerns us. We worry about our jobs and our old age and our children's future. In this bigger Ireland, saddled with other people's debts, there are people who live in desperate hope. People who -- when they inevitably end up in the queue for a hospital bed -- can only pray that the queue moves faster than their disease.

So, good luck, James, but there's only so much sympathy to go around.

Kneebreaker

(541 Posts)

Posted: 15-Jul-2012 13:42

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Hear hear

Larkin

(4,404 Posts)

Posted: 15-Jul-2012 16:42

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Junior Government Minister Fergus O'Dowd has today defended Nama after reports emerged that it is paying salaries of more than €100,000 to 66 developers.

Three developers received €200,000 from the State's "bad bank" - the equivalent to the Taoiseach's annual salary.

Chairman of The Ballymore Group, Sean Mulryan, has confirmed that he is one of three developers earning €200,000 per year.

In a document prepared for the Oireachtas Public Accounts Committee, Nama said the salaries paid to developers were proportionate with the value and complexity of the €64bn worth of assets involved.

O'Dowd claimed that it would be a lot more expensive for the State if receivers were to be appointed instead.

"The assets have to be managed in the best interests of the taxpayer and the State," he said.

"The alternative to certain developers, and not all of them - I think it's only developers who actually fully and absolutely compliant - is to put in receivers who would be far more expensive, and if Nama is satisfied that they have transparency and accountability from the developers concerned - and they’re not actually paying them but I accept that the money is coming out of the accounts of the company - if that is in the interests of the State, that is the most efficient way to do it."
From Breakingnews.ie

When will the little people rise up?

zozimus

(367 Posts)

Posted: 15-Jul-2012 19:18

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Originally posted by Larkin:
When will the little people rise up?

What's stopping you?

Larkin

(4,404 Posts)

Posted: 15-Jul-2012 19:27

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Originally posted by zozimus:
What's stopping you?

I'm not little.

absent

(1,452 Posts)

Posted: 16-Jul-2012 17:36

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There is no accountability in Ireland for the monied or political classes and never will.The small people are accountable for everything.Will that ever change,I don't think so.

Larkin

(4,404 Posts)

Posted: 16-Jul-2012 18:07

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Ireland’s poorest get 20% poorer as richest get 4% richer
By Evelyn Ring
Monday, July 16, 2012
Ireland’s poorest families experienced an income drop of almost 20% in one year while income of the richest increased by 4%.
The figures released today by Social Justice Ireland are calculated from the latest CSO data and relate to 2010.

There was a drop of more than 18% in the disposable income bracket (after taxes are paid and social welfare received) for the poorest households during the year.

Social Justice Ireland has blamed government policy for continuing to increase the income of the richest 10% of households and widening the gap between the wealthy and the rest of society.

It says the top 10% of the population receive almost 14 times more disposable income than the poorest 10% — it was eight times more in 1980.

Social Justice Ireland director Sean Healy said the current strategy by the Government was making the situation worse.

"There is something profoundly wrong with government decisions that produce this lop-sided distribution of income favouring the richest when Ireland’s poor and middle income people struggle to make ends meet in these extremely difficult times."

The independent thinktank is concerned that decisions have been taken that have seriously damaged Ireland’s most vulnerable people.

Mr Healy, an SMA priest, said the Government’s approach to fiscal adjustment — emphasising cuts rather than broadening the tax base — was unjust and unnecessary.

"Decisions have been taken that have seriously damaged Ireland’s most vulnerable people, that place a disproportionate burden on their shoulders, and seriously damage the social infrastructure on which they depend," he said.

Mr Healy said the Government’s budget last December was likely to make the situation worse because it hit the bottom income level rather than the top.

He pointed out that both Social Justice Ireland and the ESRI had shown that the budget was totally skewed against people on low incomes.

Mr Healy said the Vat change alone — from 21% to 23% — had seriously affected people with the lowest incomes.

Social Justice Ireland has called for an assessment of the impact on society’s most vulnerable people of any proposed policy initiatives aimed at achieving the fiscal adjustments required by the EU/IMF bailout and the Government’s multi-year budgetary plan.

"The Government is facing a very difficult situation but there is a real danger that the policies to deal with it are going to produce a series of worse divisions in Ireland, where the vulnerable are bearing an unfair proportion of the hit," said Mr Healy.

Over the past two years, Social Justice Ireland showed how the Government’s borrowing reduction target could be reached without the vulnerable taking the major part of the hit.

Mr Healy said: "The Government does have options but it appears that it does not have the protection of the vulnerable as one of its major priorities. It may have it in rhetoric but it certainly does not have it in practice. I think in this area, it is what people do that counts, not what they say."

scelp

(1,695 Posts)

Posted: 16-Jul-2012 23:17

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In my opinion Gene Kerrigan is one of the tiny few commentators who is able to perfectly explain how this country operates.
He gets it right every time.
Note how he never gets on the current affairs programmes or even the chat shows.
We are a supine people who adore our betters and I include myself in that.
What should we do, i mean really do?

KeepOnHurling

(3,223 Posts)

Posted: 17-Jul-2012 10:25

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Originally posted by scelp:
In my opinion Gene Kerrigan is one of the tiny few commentators who is able to perfectly explain how this country operates.
He gets it right every time.
Note how he never gets on the current affairs programmes or even the chat shows.
We are a supine people who adore our betters and I include myself in that.
What should we do, i mean really do?

Whatever about rioting or protesting or whatever, we had a general election after the country went bust, we're lucky that the country is a democracy and if the voters of Ireland want change they can get it.

All people had to do was vote for a change of political culture, vote for a newly formed party or vote for somebody without the baggage of political corruption or propping up corrupt banks.

Instead we voted in Fine Gael. And don't forget Fianna Fail still got a nice few seats despite everything. We were told that we needed to pay off all these unsecured bondholders who had taken huge risks for high returns. High returns in good times, high returns compliments of the Irish taxpayer in bad times, effectively similar to the non-recourse loans mentioned above.

Sometimes people do really get what they deserve.

Coddler

(523 Posts)

Posted: 17-Jul-2012 10:32

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Originally posted by scelp:
In my opinion Gene Kerrigan is one of the tiny few commentators who is able to perfectly explain how this country operates.
He gets it right every time.
Note how he never gets on the current affairs programmes or even the chat shows.
We are a supine people who adore our betters and I include myself in that.
What should we do, i mean really do?

We should engage in mass civil disobedience to force the government to protect the Irish people instead of protecting the interests of the insider elite. We have seen the early stages of this in the Campaign against the Household tax and I dearly hope this action continues and is expanded. The power to force change is in the hands of the people if they are prepared to stand together and not allow themselves to be bullied into submission.

Get involved yourself scelp if you can. Go along to your local meetings, talk to your family and friends and encourage them to join up. I was knocking door to door last week in Dublin 15 asking people to ignore Hogan’s reminder letters and the response was mighty. 2 houses of the 40 or so I called at had paid up and the rest were boycotting the tax.

Hurling Expert

(113 Posts)

Posted: 17-Jul-2012 10:42

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Originally posted by Coddler:
Get involved yourself scelp if you can. Go along to your local meetings, talk to your family and friends and encourage them to join up. I was knocking door to door last week in Dublin 15 asking people to ignore Hogan’s reminder letters and the response was mighty. 2 houses of the 40 or so I called at had paid up and the rest were boycotting the tax.

Dublin 15 already has enough spongers and people who take from society and give nothing back.
No need to be encouraging them!

Barry

(492 Posts)

Posted: 17-Jul-2012 10:49

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As I said before,Hogan is some pr**k!

Is there a more arrogant condescending person alive?

As Bob Geldof said "A Banana Republc" except we've no bananas!

Hurling Expert

(113 Posts)

Posted: 17-Jul-2012 10:54

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Originally posted by Barry:
As I said before,Hogan is some pr**k!Is there a more arrogant condescending person alive?As Bob Geldof said "A Banana Republc" except we've no bananas!

Every other country in the developed Western world seems to pay domestic charges and water taxes.
Why should the Irish keep this freeloading mentality?

Coddler

(523 Posts)

Posted: 17-Jul-2012 11:05

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Originally posted by Hurling Expert:
Every other country in the developed Western world seems to pay domestic charges and water taxes.
Why should the Irish keep this freeloading mentality?

Stick to the hurling. Other topics seem to be beyond you.

Hurling Expert

(113 Posts)

Posted: 17-Jul-2012 11:13

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Originally posted by Coddler:
Stick to the hurling. Other topics seem to be beyond you.

Yes of course, money for nothing.
Keep the bailout billions pumping in from Europe, for ever and ever and ever.

Coddler

(523 Posts)

Posted: 17-Jul-2012 11:13

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Originally posted by Hurling Expert:

Dublin 15 already has enough spongers and people who take from society and give nothing back.
No need to be encouraging them!

Correct. Leo Varadkar and the Lenihan family have been sponging from Irish society for a long time. They need no encouragement from me.

Coddler

(523 Posts)

Posted: 17-Jul-2012 11:18

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Originally posted by Hurling Expert:
Yes of course, money for nothing.
Keep the bailout billions pumping in from Europe, for ever and ever and ever.

Well you’re half right. The financial speculators got €65 billion from the Irish people for nothing and now we’ll pay for this for generations through property taxes, water taxes, health and education cutbacks and whatever else you fancy.
Do you think Galway will finally win the big one this year?

Jesper

(1,114 Posts)

Posted: 17-Jul-2012 11:41

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so the people rise up Coddler. And then what happens? What are your solutions to closing the budget deficit of €12bn+?

Deise Vu

(1,658 Posts)

Posted: 17-Jul-2012 11:43

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I have no quibbles with the Kerrigan article. What went on (is going on?) in the exalted circles of power in this country would make Mugabe blush. One slight quibble is his leap from the specifics of Big Fat Phil and "let me through, I'm a Doctor" O'Reilly to the generalisation about non-recourse borrwoings is a low blow. I very much doubt Fat Phil can just hand back the keys of his Portuguese apartment and O'Reilly is very much on the hook for his loan.

I take serious issue with the ravings of Fr Sean Healy however. Assuming the poorest of the nation are on social welfare I cannot see how their disposable income has decreased by 18%. Social Welfare rates haven't changed and the only fact quoted is that VAT increased from 21% to 23%. That in itself wouldn't remotely account for the claimed decrease. Then you factor in that there is no VAT on food and fuel / electricity didn't change from 13.50% (I assume this is how the poor spend most of their money). I'm afraid it sounds like Fr Sean has gone off the deep end. Again.

One of the biggest problems we face in tackling our problems is our newspapers freely print blatant propaganda as fact (from all sides). There is never going to be rational debate when misinformation is more freely available than fact.

This message has been edited - 17-jul-2012 @ 11:44

Coddler

(523 Posts)

Posted: 17-Jul-2012 15:23

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Originally posted by Jesper:
so the people rise up Coddler. And then what happens? What are your solutions to closing the budget deficit of €12bn+?

In summary it would be a combination of reducing public expenditure along with immediate cessation of any more bank debt repayment such as the promissory notes. In addition we should extract the money we’ve already pumped into the banks by taking control of the their mortgage books and have people pay their monthly mortgage repayments to the state coffers rather than the bank vaults.
On the taxation side we should look at introducing Wealth taxes and a Financial Transaction Tax so that those most able to pay and those most responsible for destroying our economy respectively will help to lift us out of the mess.

Any suggestions yourself Jesper?

Jesper

(1,114 Posts)

Posted: 19-Jul-2012 13:27

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Coddler: are you serious? A Wealth tax? Whatever wealth is still in this country will walk out the minute that's introduced. A financial transaction tax won't make a blind bit of difference only reduce employment in the financial services sector.

I love how you start off with 'reducing public expenditure' and swiftlymove on to red herring city and give us no details on what these public expenditure reductions would be.

From my perspective we need to increase/introduce taxes in a targetted way (including property and water taxes), cut or at least mean-test a whole range of social protection measures and ruthlessly cut the layers of fat from the public service.

inbetweeners

(413 Posts)

Posted: 19-Jul-2012 14:14

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Originally posted by Coddler:
In addition we should extract the money we’ve already pumped into the banks by taking control of the their mortgage books and have people pay their monthly mortgage repayments to the state coffers rather than the bank vaults.

Coddler I agree with very little you have to say but can you at least think about your idea on what to do with the banks. Just think about it, really think about it and never suggest it as an idea to anyone ever again.

Coddler

(523 Posts)

Posted: 19-Jul-2012 15:06

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Originally posted by Jesper:
Coddler: are you serious? A Wealth tax? Whatever wealth is still in this country will walk out the minute that's introduced. A financial transaction tax won't make a blind bit of difference only reduce employment in the financial services sector.I love how you start off with 'reducing public expenditure' and swiftlymove on to red herring city and give us no details on what these public expenditure reductions would be.From my perspective we need to increase/introduce taxes in a targetted way (including property and water taxes), cut or at least mean-test a whole range of social protection measures and ruthlessly cut the layers of fat from the public service.

So your policy in a nutshell, is to introduce a host of extra taxes and cutbacks to make the general populace pay for the economic crisis they did not cause. Simultaneously, you absolve the financial sector and the wealthiest from shouldering any of the burden for the mess they did play a significant part in creating.
This line of thinking is straight out of the FG handbook which is failing the country miserably at the moment.

The solution to the flight of wealth you are so worried about is to eliminate the Non Resident Tax Exile status and adopt the U.S. income tax model where all citizens face the same federal tax obligations whether they live in the U.S. or abroad. This model could be introduced in Ireland to drag most of the extremely wealthy tax avoiders into the tax net.

On the Financial Transaction tax, see the article in the Independent from May by Elaine Byrne titled ‘IFSC living by its own rules and not in the real world’ which explains the benefit of a FTT in deterring the highly speculative trading that financial institutions engaged in which caused the global economic crisis. In the long run this will protect jobs in the financial sector as it will protect the system from it’s own greed and stupidity which has collapsed many of the institutions for which we now pick up the tab.
You’re complaining that I’ve given no details on how to reduce public expenditure while completely avoiding any specifics yourself when you say you would ‘ruthlessly cut the layers of fat from the public service’.
I agree that the public sector pay and pensions bill needs to be significantly reduced. The reform should begin with the upper echelons of the Public sector who are grossly overpaid such as state agency and semi-state chief executives (e.g. HSE, NTMA, ESB, DAA), hospital consultants, university heads etc.
Let the lower ranks retain their annual increments up to a basic salary of say 30-50k depending on the job role. Any increases after that would be strictly performance and promotion based. Pensions also need to be looked at with an obvious change being a fixed retirement age of 65 before the full pension entitlement kicks in. If you retire early then you take a reduced pension as is the case in the private sector.
I’m not claiming to have all the answers to this economic crisis Jesper so if you have any other suggestions that have not been copied from Leo Varadkar’s school jotter then bring them on.

Coddler

(523 Posts)

Posted: 19-Jul-2012 15:33

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Originally posted by inbetweeners:
Coddler I agree with very little you have to say but can you at least think about your idea on what to do with the banks. Just think about it, really think about it and never suggest it as an idea to anyone ever again.

I’ll take the first part as a compliment. You’ve obviously given the banking question some deep thought inbetweener. So save me some time and tell me where I’ve gotten it so badly wrong and I’ll never mention it again.

inbetweeners

(413 Posts)

Posted: 19-Jul-2012 18:19

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Originally posted by Coddler:
I’ll take the first part as a compliment. You’ve obviously given the banking question some deep thought inbetweener. So save me some time and tell me where I’ve gotten it so badly wrong and I’ll never mention it again.

Take it what ever way you want. You made a few sensible points during the referendum. The wealth tax and the FTT are reasonable things to suggest but they will either raise very little or are wholly unsuitable to implement in Ireland. I have no issue with you suggesting them and we can argue about why they are suitable/unsuitable in Ireland. No problem there at all.

Re the banks. If you do what you say about the state appropriating mortgages or other loans(Why stop at mortgages) how do you think the bank is going to fund itself? It will wipe out a huge chunk on the asset side of their balance sheets. What do you propose to do with the liability side?

This message has been edited - 19-jul-2012 @ 18:19

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