“a call to patriotic action..”

Another intelligent report from Hearts and Minds‘ Julia Paul. This time it’s the Republic of Ireland’s Finance Minister Brian Lenihan’s budgetary patriotic call to arms shopping aisles.. Irish shopping aisles to be precise [as opposed to? – Ed]. Indeed. Adds Trade union Siptu are at it as well – “Union calls on members to buy Irish”

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  • Ulsters my homeland

    Irish patriotism?

    If the Irish government wants to learn about true Irish patriotism they should look no further than the brave men who gave their lives in Europe for their country’s freedom, not the opportunistic fascists who murdered, intimidated and tortured fellow Irishmen in 1916.

  • Pete Baker

    Try to focus on the actual topic.

  • Ulsters my homeland

    sorry Pete, couldn’t resist. Once a selfish fascist always a selfish fascist.

    Oh aye, buy Irish products……but I thought we were all part of Dublin’s Irish Nation (articles 2+3)….money talks!

  • George

    Every recession it’s the same old thing: the trudge to Newry to buy cheap goods in Argos and such like, the introduction of a tax to leave the country and the wielding of the machete on spending.

    At least we should be grateful that this time around we’re not going north on the 5 punt buses and can get up and back in a much more painless operation thanks to the M1. Not to mention having a hard currency this time around as sterling tanks.

    We also have a new phenomenon in 2008; the thousands of northerners who were employed down south who are now back home and out of a job as well as those northern firms dependent on the southern market.

    Northern Ireland never had to worry about a recession before but I reckon this time the pain will be felt.

    All those families in negative equity and those outstanding public sector bills that Robinson and McGuinness were begging Brown to pay for only yesterday.

    This from a man who is going to have to borrow 110 billion pounds next year alone for an economy with a currency that is going through the floor.

    It isn’t going to be pretty but UMH will always have 1916.

  • Pancho’s Horse

    Umh, what about the brethren yiz abandoned in the other three counties to the slaverin’ hordes of fenians? And how come you are british when none of your ancestors has been born in britain for at least ten generations?

  • Pete Baker

    As I’ve already suggested, could we focus on the actual topic, guys?

    Rather than bickering amongst yourselves.

  • Pancho’s Horse

    This is our nirvana,pete, the highest state we can reach. And exactly what you want us to say.

  • Sneakers O’Toole

    Tis a wee bit naughty of him. Nordies have been going South to shop and buy petrol for donkey’s.

    UMH is great. Either completely nuts or a brilliant troll. Can’t make my mind up.

    Could well be a chucky “Gilligan” trying to make loyalists look bonkers.

  • LURIG

    Well said Pete. I mean if we can’t stick to the original topic without resorting to sectarian agendas?? FFS will some of you give it a rest and actually debate the point. On the ACTUAL subject we are largely economic whores and will go where the bargains and business are. Nationality, religion and politics does NOT come into it. Those living in the border regions will testify to that. It’s swings and roundabouts, we all used to go South when it was good and now many Southerners are coming up here. Who can blame them? When many of the parking spaces in even places like Cityside/Yorkgate in North Belfast are taken up with Southern registrations you know it must be bad in the Republic. My sister lives in the South but now does her essential shopping (baby food, nappies, cereals etc) every few months in her native Belfast because she is saving 100’s of Euros of her salary up here. It’s unbelievable when you actually look at the comparable prices in both jurisdictions on many items. Allowing for the exchange rates there is NO doubt that Southern shoppers are being ripped off big time. We should welcome and be thankful for their invaluable trade because NO doubt some day it will be reversed AS IS THE NORM. Good luck to the Northern traders who are NOW making a few quid.

  • Modernist

    As someone who has lived in both Belfast and Dublin I am all to aware of the disparity in pricing between the two cities. Consumers in the south are being ripped off big time… Its simple economics if businesses in the south are not competing on price then they should sort it out or go to the wall. Hopefully FG win the next election and that guy Bruton can get down to actually sorting things out

  • The Raven

    Well done LURIG! All those words and only TEN of them in CAPITAL letters!

  • LURIG

    I just want to clarify something. When I said “Allowing for the exchange rate Southern shoppers are being ripped off big time” I meant by their own Southern government and traders and NOT Northern businesses. Even with the favourable exchange rate the average Southern citizen shopper is STILL being ripped off down South by their own politicians and business community. It’s a disgrace!

  • LURIG

    Thank you Raven, I have now got it down to ONLY one word. So reassuring to know you care so much! Shakespeare and Dickens would be so proud you smart arsed p***k!

  • Dave

    “My sister lives in the South but now does her essential shopping (baby food, nappies, cereals etc) every few months in her native Belfast because she is saving 100’s of Euros of her salary up here.” – Lurig

    Too true. The price of this TV in Currys’ Irish branch is €1,295. The cost of it in Dixon’s (owned by Currys) in NI is £686.00. Convert the currency and you get 686.04 GBP = 812.461 EUR. Irish shoppers are being ripped off by €483 compared to the price that the same group charges its UK customers for the same TV. Screw patriotism. I’ll be in Belfast next Tuesday and 2 of these TVs are returning with me.

    Irish consumers were not price conscious when the ECB was flooding the country with cheap credit to stimulate spending. Now that they are in the bust phase of the ECB’s boom-and-bust monetary policies, I think they’d be more inclined to boycott British and Irish retailers who continue to rip them off (failing, for example, to discount the cost of UK imports as sterling declines) in favour of retailers who offer better value for money.

  • An Ceilleachaireach Rua

    Just this very week myself and SWMBO were looking for a bedroom set for our spare room. Estimates of what it would cost down south (and by south, I mean Cork!) were about €500 or so – give or take. A jaunt up to Belfast Ikea on the other hand would do the job for about €150 less and the stuff is frankly much nicer. Likewise, I’ve been pricing a Christmas gift for the brother. Against all exchange rate mechanics the price of this item has gone UP on one UK-based etailer’s Irish site. Now, I’m happy to pay a small premium to keep business local (as I’ll probably end up doing for the present) for “patriotic duty” but Brian Lenihan would be better served sorting the high prices we are exposed to. If he could sort that maybe pay freezes wouldn’t be such an issue. Oil prices are back where they were in 2005. It’s about €1-1.05 a litre for petrol currently. What was it in 2005? Even allowing for three year’s worth of inflation on associated costs we are being taken to the cleaners by someone

  • Comrade Stalin

    A combination of the weak exchange rate and the higher rate of VAT in the ROI (a disparity which may increase if Gordon Brown decides to introduce a temporary VAT cut) mean that border traders must be making a killing. Fair play to them. This is the reality of a single market. The Irish government were not expected to take measures to deal with the fuel price disparity with the UK, so they can hardly complain now that the situation has been reversed.

    Dave, I still don’t see what this has to do with ECB policies. It may have escaped you, but the UK is facing serious economic problems as well. There’s no evidence that interest rates would have been substantially different under the Irish central bank. Cheap credit and living beyond your means has been a general western phenomenon. The folks in the far east with their high savings rates have the right idea – but governments here have generally moved to discourage this.

  • kensei

    CS

    Actually, I think over-saving and high trade balances can cause problems of their own — and any Eastern economy with a really high saving rate is only sustaining it due to high demand from the West Economics tends to like middle of the road equilibrium. We need to be more sensible, but not too much. And we really don’t need to save right now, because that will floor an already weak economy. The point to start encouraging saving is when we start ticking up.

    On prices, surely we are talking about arbitrage gains here, and shouldn’t that be forced into equilibrium over relatively short periods? Perhaps tax plays a role in keeping the differential. Anyone know?

  • blinding

    We live in a capitalist system.
    Price and quality are everything

    When shoppers get the opportunity to put the boot into those that ripped them off when it suited them Capitalism demands that it must be done.

  • Greenflag

    Comrade Stalin,

    ‘Cheap credit and living beyond your means has been a general western phenomenon.’

    Kensei,

    ‘We need to be more sensible, but not too much. And we really don’t need to save right now, because that will floor an already weak economy. The point to start encouraging saving is when we start ticking up.

    The US consumer should have listened to you pair 20 years ago 😉

    Yesterday the Dow Jones finished at 7,500 down almost 45% from 14,000 just over a year ago . Add that loss of stock value in American’s pension funds to the huge losses in home equity values and you have tens of millions of baby ‘boomers ‘ not looking forward to retirement at 65 but at having to work till they ‘drop’.

    So how do you get these people to start ‘spending ‘ again when you also have to factor in the many millions of 40 to 60 year olds who added to the above fear losing their jobs because of not just the American ‘recession’ but the worldwide one ?

    Unlike Irish people who can drive a few miles across the border to save a few euros there is no escape for the vast majority of 300 million apart from perhaps those people who live along the thinly populated 48th parallel with Canada or along the Mexican border .

    I suspect that this Christmas many ROI spenders will heed Mr Lenihan’s advice not though for ‘patriotic ‘ reasons, but for personal reasons and retailers in the Republic will not this year enjoy a spending ‘bonanza ‘. Those who are close to the border will do as they always have done -both ways – while those sitting on negative equity will be disinclined to indulge .

    I’ll not be travelling north to shop not because of ‘patriotism ‘ but simply because I don’t like shopping , never have and never will 😉 Scrooge is my Christmas hero . Shopkeepers avoid me like the plague -quite right too .

    It’ll be a case of we’ll buy your petrol if you’ll buy our asian manufactured grot . Sounds like about a fair exchange to me.

  • Greenflag

    Dave,

    ‘I’ll be in Belfast next Tuesday and 2 of these TVs are returning with me. ‘

    What do you want another two tv’s for ? Haven’t ye got one already in the living room , in the bedroom and in the bathrrom and then there’s the one in the greenhouse.

    How many heads and pairs of eyes have ye got 😉

    Buy GM stock instead . It’s at it’s lowest share value since 1942 . The CEO of GM along with the other CEO’s of Chryler and Ford flew into Washington DC the other day in their private jets to ‘beg’ the US Government for a 25 billion dollar bail out . Got to hand it to these lads for sheer brass neckery 🙁

    Should these turncoat former neo conservative now socialist former capitalists get it in the neck like Lehman’s or be bailed out like AIG and Fannie /Freddie ?

  • Greenflag

    Lurig ,

    ‘When I said “Allowing for the exchange rate Southern shoppers are being ripped off big time” I meant by their own Southern government and traders and NOT Northern businesses.’

    I just want to clarify something too. The other costs of doing business in the Republic are generally higher than in NI and this explains some or probably most of the price differentials .

    Gouging will of course take place wherever it can North or South .

    blinding ,

    ‘ We live in a capitalist system.
    Price and quality are everything ‘

    But not everybody has the same access to ‘info’ before they buy . In theory they are supposed to but in practice ? This is why US subprime mortgages worth shag all could be packed into nice 100 million dollar ‘tranches’ and sold as solid high interest bearing investments to ‘clever ‘ bankers from Iceland to Kaiserslautern to Wisconsin.

    Caveat emptor as always.

  • Ri Na Deise

    Lenihan and his cronies are gimps of the highest order. Our patriotic duty is to provide our familys with a good christmas. Our patriotic duty is not to help him and his fellow fools out of a hole by bankrupting ourselves. Our patriotic duty is not to stand for the blatant rip-offs imposed on the ordinary man and supported by this government.

    You wont be short this Christmas Lenihan. Go fcuk yourself.

  • Greenflag

    ri na desperate ‘

    ‘Lenihan and his cronies are gimps of the highest order’

    I’d not go that far . Middle ranking perhaps .

    ‘ Our patriotic duty is to provide our familys with a good christmas.’

    No it isn’t . It’s your patriotic duty to provide for your family EVERY day not just Christmas . People waste a lot of money at Christmas buying oul shite that ends up being thrown away and that their family does’nt need .

    Scrooge rules ok !

  • Dave

    “Dave, I still don’t see what this has to do with ECB policies.”

    As your friend Keynes said “Control the currency and you control the country.” By joining the Eurozone, Ireland transferred sovereignty over its monetary policy to the EU’s ECB. It is that body which sets the interest rates. It’s quite simple: set interest rates low and people will borrow more money with the purpose of spending it. Set interest rates at a higher level and they will borrow less. Keep interest rates at a low level for a long period and people will borrow lots of money and thereby accumulate massive debts. This is what happened due to policy and practice of the ECB.

    Monetary policy is the process by which the government, central bank, or monetary authority of a country controls (i) the supply of money, (ii) availability of money, and (iii) cost of money or rate of interest, in order to attain a set of objectives oriented towards the growth and stability of the economy.”

    “It may have escaped you, but the UK is facing serious economic problems as well.”

    This is a silly argument. Both the ECB and the Bank of England have sovereignty over their monetary policies. The reason you see similar outcomes is because both bodies implemented similar monetary policies (both kept interest rates too low for too long in order to stimulate economic growth on the demand-side by stimulating consumer spending). Ergo, spending money, contrary to Keynesian belief, creates debt and not wealth.

    “There’s no evidence that interest rates would have been substantially different under the Irish central bank.”

    Another silly argument. It’s true that the Irish Central Bank may have followed the monetary policy of the ECB just as the ECB followed the monetary policy of the Federal Reserve and the Bank of England followed the monetary policy of the ECB with the same intent of the ECB and the Bank of England to keeping parity with the US. However, they would have had the sovereignty to not make that mistake rather than to become a victim of the policy mistakes of others. This is like arguing that it doesn’t really matter if someone is a victim of a hit-and-run driver because there is no evidence that they wouldn’t have been a victim of another hit-and-run driver.

    “Cheap credit and living beyond your means has been a general western phenomenon.”

    True, and this shows the unmitigated idiocy of the ECB in fuelling consumer demand by offering ridiculously cheap credit to indulge the fetish of the consumers shiny trinkets. The problem is that at some point you are going to have to stop borrowing the wealth and start earning it as the means by which you sustain demand for goods. Any growth that was sustained by borrowing is now over, and you are now forced into a situation where you must earn the wealth to repay the borrowing and you must that wealth without borrowing. Good luck with that policy, and thank the ECB for implementing it.

    Greenflag, with teenagers and TVs, you have to go with equality or you get bickering.

  • Dave

    Greenie, slightly off topic, but I think you’ll enjoy this article from the eminently sensible David McWilliams arguing that it’s time for Ireland to ditch the Euro. 😉

  • Dave

    “There’s no evidence that interest rates would have been substantially different under the Irish central bank.”

    A better analogy would be that it is akin to arguing that no blame should be attributed to the drunken driver of a car who killed his passenger by crashing into a wall because there is no evidence that the passenger wouldn’t have been killed anyway if he was drunk, driving the car, and crashed into a wall.

    The ECB is responsible for the consequences of its flawed monetary policies. It was its policy to keep interest rates too low for too long in order to promote economic growth by promoting consumer spending with borrowed wealth. This policy produced short term economic growth as people went on a spending spree with the borrowed wealth but did not factor in the equation whether or not people were earning the wealth to repay the borrowing by their means or were investing the borrowed wealth in assets to repay the wealth by that means. In fact, people were living well beyond their means (as personal loans and credit card debt testify) and were investing the wealth into assets that were inflated in value by the availability of cheap credit and that would be vulnerable to rapid deflation of value when the bubble burst, thereby exposing both the lender and the borrower to loss. The problem this ECB policy has now left its member states with is that a huge proportion of the wealth they now earn will have to be used to repay the borrowing that sustained the short term growth they experienced, and not used to promote future growth. So, in effect, you have to earn the wealth to repay the wealth that you borrowed and you have to do that while in a recession.

    Would the Irish Central Bank, if it still had sovereignty, have followed the policy of the ECB? Judging by precedent rather than prophecy, probably not. They have usually been very prudent, and have very strict criteria for devising monetary policies that take account of the underlying dynamics of the Irish economy. It is easy to calculate what interest rates would have been set at by the Irish Central Bank under the Taylor rule. Davy, a division of Bank of Ireland, did the calculations and showed that the ECB was setting interest rates a full 4 percentage points below the needs of the Irish economy. If those interest rates were set at the appropriate rate of 6% by Irish Central Bank instead of the widely inappropriate rate of 2% by the European Central Bank, then it is undoubtedly true that Irish consumer would not have borrowed so much money and that Irish banks would not be exposed to massive write-down’s in the value of their loans. For example, 340,000 houses in Ireland are vacant. The reason that this cheap credit played a role in creating the housing bubble and creating so many vacant stock is because no tenants were required to repay the mortgage and to make a profit. The law of supply and demand went out of whack as a result of the ECB’s monetary policy because the buyer purchased the property for no function other than flipping it during a process of rapid hose price inflation. This model of creating wealth was akin to a pyramid scheme.

    The Irish government could have warned against the dangers of the ECB’s monetary policy of flooding the Irish economy with cheap credit, but that would have drawn the public’s attention to the folly of Europhiles surrendering sovereignty to third parties and this Europhilic government’s intent is to achieve full integration with the EU. It could also have imposed higher stamp duties on properties as a means of compensating for its lack of sovereignty over its monetary policy, but that would have been pissing in the wind since a government must avoid a situation whereby the agency that controls its monetary policy is using it to influence its economy in one direction and the government is trying to influence it in another direction. To avoid the conflict, that is why the Bank of England and the Federal Reserve are nominally independent from government but obliged to follow the economic policies of the government. Unfortunately, no such obligation applies between the ECB and the Irish government, so the Irish government must simply follow the monetary policies of the ECB and make sure that its own economic policies do not conflict with it. The ECB controls the Irish economy and it has now turned a solid growth economy into a dismal failure. You have the Europhiles in the Irish government to thank for that.

  • Dave

    ” The reason that this cheap credit played a role in creating the housing bubble and creating so many vacant stock is because no tenants were required to repay the mortgage and to make a profit.”

    To clarify: because the mortgage repayment was so low and the housing market was experiencing rapid inflation, an investor didn’t require a tenant to repay the mortgage. His model of creating wealth was to buy the house, wait a year for it to inflate in value, then resell it and realise his equity gain as a profit. Great, except that banks use a mark-to-market model in valuing property which assumes that the law of supply and demand attaches a value to the properly in accordance with either of its two functions, e.g. a private residence or a property which the buyer lets to tenants. This third category of ‘flipper’ knocked the equation out of whack and this category was the creation of the ECB’s monetary policy which created this category by suppressing interest rates, thereby allowing the flipper to hold the assets for long periods with a minimal mortgage payment that would be easily offset against gains in inflation of the asset. If the interest rates were set at the correct level, this category would not have arisen and 340,000 houses would not have been built – which means that folks would not be repaying mortgages on properties that produce no income or facing massive write-downs in their value, taking an entire generation of entrepreneurs out of the equation and ensuring that their disposable income along with their creative energy is disposed of in unproductive repayment of worthless assets. The economic effects of this wasted generation who are now prisoners of vacant properties will be wholly negative, ensuring that the Celtic Tiger is well and truly dead.

  • Greenflag

    Dave ,

    So if the ECB is the problem why are we not hearing about the property bubble bursts in Germany , France , Sweden , Italy etc etc ??

    World monetary policy and interest rates were in any event determined in the USA . There can’t be a major differential between USA and ECB rates otherwise there would be huge capital flight from one to another .

    ‘The ECB controls the Irish economy and it has now turned a solid growth economy into a dismal failure. You have the Europhiles in the Irish government to thank for that. ‘

    The Federal Reserve/Bank of England controls the American /British economies and have turned solid growth economies into dismal failures with the former leading the world into recession . You have the neo conservative Bush Cheney Republicans to thank for that in the USA and New Labour in the UK .

    By the way the ‘destroyed’ economies noted above are not looking to have higher interest rates to restart their economies . Wonder why ?

    The reason many ‘property’ speculators went bust was because they did’nt do their sums right and they fell for the old fallacy of composition line just as did banks , financial institutions , Lehmans , Bear Sterns , Merrill Lynch etc etc etc .

  • Earnan

    “If the Irish government wants to learn about true Irish patriotism they should look no further than the brave men who gave their lives in Europe for their country’s freedom, not the opportunistic fascists who murdered, intimidated and tortured fellow Irishmen in 1916”

    UHM

    Tell me, what had centuries of English misrule done for the native Irish that would compel them to take up arms for the British Empire? Or, alternatively, what had the Kaiser ever done to Ireland?

    and leave the “opportunistic fascists” of 1916 out of this, if possible. I know it would be hard for you

  • Earnan

    Also, who did the men of 1916 torture? If you can provide a source for that let me know.

    I have read quite a few books and first hand accounts of the rising and I have never encountered even a claim of such a thing. But maybe you are a privy to some new scholarly research.