“they were the best 20 years in our history..”

Irish Minister of State Martin Mansergh was one of the 11 junior ministers reported to be willing to fall on their swords. But according to this iol report he had added a caveat

The Minister of State at the Department of Finance said last week that he was willing to put his job “at the disposition of the Taoiseach” but that his constituents would not be happy if he was demoted.

Quite. And, whilst Finance Minister Brian Lenihan is reportedly telling the banks that “each bank had to take responsibility for its own bad debts” – even as internationally opinion varies on the best option to take – Martin Mansergh has had more to say ahead of Tuesday’s Dáil debate on the nationalisation of Anglo Irish Bank

Mr Mansergh, who last week offered to quit his junior minister post to save money, called on people to be retain their Celtic Tiger-style optimism and self-respect. “We’re not going to get anywhere by completely throwing overboard our self-respect,” said Mr Mansergh. “We have achieved a tremendous amount in the past 20 years – they were the best 20 years in our history. “There will be cycles – we rose very high and we are where we are now. We have to work our way out of this intelligently,” he told RTÉ Radio One. He added: “But berating ourselves as a banana republic will get us nowhere.”

[If the cap fits.. – Ed]

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  • Ulsters my homeland

    [Bee-have! – Mods]

  • the gross way in which constituencies or fiefdoms within them unduly benefit from their TD being a minister or mini-minister is one of the reasons their cohort has grown ever larger. In other organisations there would be a fear of seeming partial – it would almost disadvantageous to have one of your own in office. Not in politics though.

  • Selective

    You forgot to mention he was responding to a typically OTT rant from that well known master economist Eamon Dunphy.

  • Scaramoosh

    “they were the best 20 years in our history. โ€œThere will be cycles โ€“ we rose very high and we are where we are now.”

    The best twenty years for whom, the people who were given the false illusion of wealth, and in the process given free reign to drown themselves in a swimming pool of debt!

    It was a good twenty years for the cosy coterie of bankers and financiers, who lent money to each other, so that they could collectively reap the rewards of their selfish self-interest/s. They may all be sitting nicely with their three and four homes across Ireland, but the ordinary punters are the ones that will be picking up the tab (as per normal).

    Sleight of hand created the impression that Ireland was a rich and progressive nation; it wasn’t. The dream of wealth for everybody was constructed on weak foundations; the boom was nothing more than a house of straw.

    Ireland, up to its neck in debt, and losing all of its global competitivenes, amy seek to talk itself out of the mess that it is in, but in this instance the collective blarney will not work.

  • Actually, I think Dunphy’s anger is well-founded. Mansergh is an apologist for the widespread view in political circles that ordinary people are simply too stupid to understand the complexities of economics.
    Well Dunphy hit the nail on the head when Mansergh had the arrogance to dismiss criticism of the Irish establishment’s handling of the economy.
    Let’s face it. The Irish economy has more problems than simply bank solvency, Irish households and firms are up to their necks in debt and jobs are going down the chute. Ireland inc. faces the future with a combination of both the public and private sector in hock for the foreseeable future and shrinking economic activity.
    anemeconomy.info

  • Jer

    I used to think Mansergh was worthwhile but his antics around the time of the Bertie comedy show at the corruption inquiry was just too much. Top it off by him barking at people to respect their betters and that was it.

    He can scream and holler all he wants but Mansergh knows that he is on the way out from the Dail and thankfully so.

    People should retain the retain the Celtic tiger self-respect and confidence but not the credulity.

  • Greenflag

    Mansergh hits the right note . There is not a government in the western world that can escape from the present bout of finger pointing much of it justified . But nonetheless Mansergh is historically correct . Ireland did climb out of the economic doldrums of the mid to late 80’s into the fast growing investment boom of the 1990’s and into 2000. Who remembers now the 250,000 ‘economic ‘ emigrants of the period 1985-through 1990 ? .

    Too many Irish like too many Americans and British and Spanish etc etc made the simple mistake of believing that just because some people climbed on the property bubble and made millions did not and does not mean everybody can.

    This is a phenomenon as old as capitalism itself -From the South Sea bubble of London in the 18th century to the Dutch ‘tulip’ bust to the strangulation at birth of Spanish industrial development by the ‘importation /theft’ of gold from the Americas .

    It’s called getting rich quick by the fallacy of composition method ๐Ÿ™ What it means in the real world is that just because some kid from Ballyfermot or Ballyslapadashamuckerry gets to be captain of Manchester United means everybody can.
    We know instinctively that it can’t be true but we still want to believe that it might be in ‘our ‘ case .

    Mansergh will be back in the Dail imo .So too will the Irish economy – much chastened by this experience . And despite their attacks on the Government the Irish opposition parties have been woeful as regards any attempt between them to come up with a way out of this ‘mess’ either .

    Gilmore demanding an election seems to be the best they can come up with as if that would make any difference .

  • Jer

    not sure sure Greenflag about the reelection. 0.63 of a quota last time out and relied heavily from Ambrose(FF)to get elected on the 8th count.
    Ind seamus Healy was 60 votes behind him. Thats not alot of trouser between a man and the boot.

    I think the objection many have to Mansergh’s type of analysis( or spin) is that its not the inevitability of this cyclical event but the failure to even attemp to manage it for long term gain rather than as a way to ensure consistent reelection for one party.

    Its not good enough to be fatalisic and say it was always going to end. We all knew that. The OECD was telling us in 2005 our houses were over priced. The real damage was only done in the last few years.

    Can anybody really say that the wealth created (and there was huge wealth created despite what some now say) was best used to ensure the economic future of the state. Instead countries like Spain which leveraged themselves to their eyeballs are hit hard and hurting but nobody believes the IMF is needed for them. We say IMF and everyone believes it. I wonder why?

  • Greagoir O Frainclin

    They were the best of times, they were the blurst of times…..

    Sniffle!

  • Greagoir O Frainclin

    Now tis the winter of our discontent….

  • Greenflag

    ‘A bail out a bail out my kingdom/republic for a bailout or should that be a tranche of collectivised debt obligations ‘ ๐Ÿ˜‰

  • Dave

    Scaramoosh, there was a Celtic Tiger born circa 1993 (when Ireland devalued the Punt to boost exports) but it was shot when Ireland delegated control of its economy to the ECB in 1999, and it died from the wound circa 2001 when Ireland became a victim of the expansionist monetary policies of the ECB. At that point we forsook Friedman (the driver of the Tiger) for Keynes, becoming a borrow-and-spend economy rather than an earn-and-spend economy. As Keynes said, “Whoever controls the currency controls the country.” Now there is just a festering corpse.

  • Greenflag

    jer ,

    Ambrose is an up and coming candidate . Mattie McGrath the other FF TD almost did’nt make it on to the ticket because of iirc an ‘assault’ case and has not ‘distinguished ‘ himself since his election . FF may run two candidates next time out and it will be tough to win 2 out of three . Healy may have been close behind but transfers will win the 3rd seat . The headquarters party (FF) will favour Mansergh and Ambrose imo . It’ll be tight anyway.

    ‘The real damage was only done in the last few years. ‘

    Indeed . But the roots of this problem go beyond Ireland’s open economy . With a more forward looking and adept government we might have been been able to have reduced the impact of this mess . But then such a government would probably not have been elected . The politics of the hair shirt variety and party pooperdom are not popular anywhere least of all in a country that had just emerged from a long ‘apprenticeship’ in relative poverty ‘

    We Irish seem to have more confidence in Mr Obama’s utterances than in our own politicians ๐Ÿ˜‰

    Odd that or is it ? Same appears true even in the UK

  • Greenflag

    ‘At that point we forsook Friedman (the driver of the Tiger) for Keynes, becoming a borrow-and-spend economy ‘

    Like the USA , the UK , and the rest of the Anglosphere and Spain , etc .

    ‘Whoever controls the currency controls the country.โ€ ‘

    Who controls the value of the US dollar ?

    a) the American Government
    b) the American consumer
    c) Chinese , East Asian and/or the Arabic dollar holders who keep buying enough Treasury bills to stop a freefall in the dollar exchange rate ?

    Who controls the value of the British pound ?

    a) The British Government
    b) Investors worldwide
    c) British businesses or consumers

    ‘Now there is just a festering corpse.’

    You are mistaking Ireland for Gaza ๐Ÿ™
    The difference between a dead Irishman and a dead Arab is that when an Arab is dead he’s dead . But you have to watch the Irishman for three days and three nights ๐Ÿ™‚

    We’ve risen before and we’ll rise again and it will be within the euro not without .

  • Mack

    The Euro is at least in good hands – the Schumpter / Hayek inspired German’s.

    Dave – there was a huge bust coming around 2000. We should have had it then, but delayed it. Compare and contrast the Ireland with the rest of the Eurozone – Spain aside – they did not have property bubbles of the same scale. But even in Spain the regulator was awake and the restrictive capital requirements have saved the Spainish banks. Devaluation, is a short-term beggar thy neighbour tactic. Not a long-term wealth producing strategy. Ireland’s growth rate was above average for some time before ERM devaluation, and I imagine the Tallaght Strategy that reduced public sector costs was a more important competiveness enhancer.

    Incidentally Friedman approved of Greenspan – the real architect of post-2000 loose monetary policy. He’s said as much himself :-

    http://online.wsj.com/article/SB113867954176960734.html?mod=opinion_main_commentaries

    Better to stick with the Austrians (that were Friedman’s own inspiration, as they are our own central bankers), I think.

    http://en.wikipedia.org/wiki/History_of_economic_thought#The_Austrian_school
    http://en.wikipedia.org/wiki/Entrepreneurship
    http://en.wikipedia.org/wiki/Creative_destruction

  • Ulster McNulty

    “…we forsook Friedman (the driver of the Tiger) for Keynes…”

    It wasn’t Keynes, it was the pope, the pope closed down all the potato microchip factories.

    And it wasn’t Friedman, it was McWilliams, he was the driver of the Tiger, he rode it in search of the pope’s children.

  • Ulster McNulty

    Mack

    “Dave – there was a huge bust coming around 2000. We should have had it then, but delayed it..”

    Yes, too much “Celtic Tiger optimism”, someone should tell Mr Mansergh.

  • kensei

    Dave

    At that point we forsook Friedman (the driver of the Tiger) for Keynes, becoming a borrow-and-spend economy rather than an earn-and-spend economy

    Except it wa smonetarists that drove down the cost of borrowing via lowering interest rates int he event of the last recession. You could argue that the US had a Keynesian-style stimulus aftyer the last recession in the form of Bush’s big tax cuts, but generally you are talking a lot of nonsense here.

    Mack

    No, we should not be “following” anyone. We need to recognise that there is a set of tools available and apply as best we can based. Slavish dedication to single economic theories are what got us into the mes sin the first place.

  • Mack

    Kensei

    Slavish dedication to single economic theories are what got us into the mes sin the first place.

    My take on the causes is the exact opposite of yours – which explains the difference. What we have now is a hodge-podge mix. The worst of both worlds. Because it’s a mix, powerful wealthy, well connected business men lean on their cronies in power (and vice versa) to scratch their own backs and change the rules when the current rules don’t suit.

    Companies fail – they have to be let go bust. That’s the nature of capitalism. It’s not politically palatable – which is why most young idealists prefer socialism. Socialism is a saccharine sweet, it sounds caring and sharing and will make the world a better place – except that it doesn’t work. There’s no mechanism for disruption.
    Capitalism works because there is that mechanism that allows disruption. Unfortunately that process is painful. People lose their jobs – the rich can lose everything (which they fight tooth and nail with their abundant resources to prevent).

    Then there is the inequality issue – the CEOs on the huge pay checks. Psychologically, despite the fact we have nice cars, computers, iPods & luxury holidays for the masses – we see some guy getting rich and we think – Bastard! Unfortunately it’s capitalism that drives the innovation that leds to those goodies that make life better, but the price is the inequality that seems so unfair.

    I digress…

    It’s not just creative destruction – it’s moral hazard. If you mix and match, well when the powerful hit a wall with one system they demand a change (& the little guy gets screwed until there’s a revolt).
    So if you have increased salaries to such a point you can’t afford the wage bill (Irish public sector) – print money and devalue your currency (call it Keynesianism in the UK).
    Would we (in Ireland) have gotten into that mess if the consequences were clear? That the ECB will defend the value of the currency – Austrian style – there will be no devaluation. Pay yourself too much – pay the consequences? Who will come out stronger – the muddled Brits or Ireland under Kayak-Schumpter inspired Alex Weber and Jean-Claude Trichet?

  • Mack

    Kensei –

    I’m not arguing that there shouldn’t be a state.

    Simply that the Austrian analysis – particular of the nature of money & money supply (an increase the money supply leads to an increase in prices – not rocket science), the value of entreprenuership & creative destruction, the dangers of monopolies, totalarianism and central planning, the cyclical nature of investments, the dangers of bubbles & malinvestments.

    I do think that any state intervention – anywhere at all – is distorting (that is to say it has an actuall effect & consumes resources preventing others from consuming those same resources). Therefore any state action needs to be very carefully thought through, every cent needs to be justified. The people who pay for it (tax payers) need to see a return in the quality of services delivered. The harsh reality in Ireland is that increased public spending did not lead to a proportionate increase in service quality – but rather led to more feathers in special interest nests. (I read only yesterday that our heroic Electricity Supply Workers have taken the 3.5% pay rise this year on top of their average 90,000 euro salaries).

    The state has a role, but we need to be mindful of the consequences.

  • Mack

    First sentence –

    Simply that the Austrian analysis – (stuff) – is the most useful I’ve come across.

  • runciter

    Psychologically, despite the fact we have nice cars, computers, iPods & luxury holidays for the masses – we see some guy getting rich and we think – Bastard!

    It’s not quite as simple as that. The desire for fairness (in resource allocation as in everything else) is a natural and reasonable human trait. A lack of fairness leads to alienation, with real social and economic consequences.

    One should also consider whether it is economically effective to have so much wealth concentrated in so few hands.

    I do think that any state intervention – anywhere at all – is distorting

    Sustainable markets can only exist within the framework of ‘state intervention’.

    Otherwise, who creates and control currency? Who creates and enforces law? Who mandates and manages infrastructure?

    Better to say that state intervention is a necessary attribute rather than a ‘distortion’.