Fitzpatrick ejected from elite dining room of the Celtic Tiger…

According to Colm Keena’s report that the Anglo Irish bank substantially deceived the financial regulator last year over the transfer of Sean Quinn’s 10% to the Golden Circle. That may explain why Sean “Seanie” Fitzpatrick, former Chairman of Anglo-Irish Bank had a lot on his mind when he was asked to leave the premises by staff at Shanahan‘s – the dining room of the Celtic Tiger – because of complaints from fellow diners last weekend!

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  • Harry Flashman

    If the restaurant story is true then it’s a bit churlish and very much in keeping with the herd instinct hysteria that regularly sweeps the Republic as the population swerves from one position to another 180 degrees to the opposite with breakneck speed like a shoal of fish darting this way and that.

  • Mick Fealty

    That herd thing IS the biggest problem at the moment; and something I was trying to hint at with my ‘eat the rich’ thread. Resilience has got to be the thing… Not vengeance, alone at least…

  • Greenflag

    Not churlish at all . Probably saved the greedy bastard from getting a public hiding by some irate member of the public . There’s a reason why Madoff the world champion thief is under house arrest and not in prison well not yet anyway.

    Fitzpatrick’s appearance at Shanahan’s just goes to show the complete and utter disregard that these ‘financial services ‘ con men have for the public they have deceived.

    Nice to see which side you’re on Harry not that it should come as any surprise . Well come the revolution you can display more of your empathy for the Madoff’s and Fitzpatrick’s of this world by sharing a lampost with them 😉 Separate ropes of course.

  • dantheman

    Maybe they thought that Shanahans had increased the price of the steak to €129 million??? (Or is that lowered in SHanahan’s case…)

  • Mack

    Lad’s we have this all wrong, these people are heroes!

    What I want to know is, is this the official Libertas position?

    http://www.libertas.eu/ireland/112-ulick-mcevaddy-joins-no-to-lisbon-campaign-

  • I strong suspect he means Series 3 Heroes cos they’re not a patch on the first series.

  • Dave

    Well observed, Harry. How quickly they choose to forget that every eager lender has an equally eager counterparty called a borrower.

    Fitzpatrick, having engaged in some questionable management practices, is an easy scapegoat for the general public and the financial elite to displace their own responsibility for borrowing vast quantities of the cheap and plentiful of credit that was supplied to them under the expansionist monetary policies of the ECB. Of course, now that those monetary policies have simply created debt instead of wealth (as they were told they would), the people who borrowed all of that money are now trying to blame the people who lent it to them, and political elite are happy to point them in that direction.

    They were grounded in fiscal conservatism during the McSharry years of austerity but now they’re just a bunch of self-serving pigs who are choking on the swill they mistook for heaven’s nectar.

  • Mack

    Dave, is that your single transferrable speech?

    It’s all Europe’s fault, they made us do it…

    Yawn….

    Do you regard the Golden Circle as heroes or villians?

  • Harry Flashman

    Side I’m on GF? Need I remind you whose side Madoff and Stanford were on? Put it like this they weren’t conservatives.

    I dislike what Fitzpatrick did but he was welcome in that restaurant before, presumably many of the people now complaining were once queuing up to be in his company. I find that sort of hypocrisy nauseating.

    If you were happy to be in Fitzpatrick’s company in the good days then at least have the decency to allow the man to have his dinner in peace now.

    I have little sympathy for whited sepulchres.

  • Dave

    Mack, they were responding to expansionist monetary policy as were designed to do. You’ll have a hard job pretending that expansionist monetary policy has no effect on economics when it has had the effect unfolding before your (averted) eyes.

    Of course, as it is tabboo to debate the merits of the EU, and as we have transferred sovereignty over monetary policy (a critical macroeconomic tool) to the EU, we must now simply pretend that monetary policy is a completely useless tool in accordance with Europhilic muppertry that censors all debate on the subject, right? 😉

  • Mack

    Harry Flashman, Greenflag

    Madoff and Stanford were corrupt investors, their political beliefs don’t really say anything constructive about the merits of the policies they believed in or opposed – they’re not politicians. (What would be interesting would be kick backs of some sort from politicians to them).

    It’s a pretty basic logically fallacy, the old 90% of criminals liking chocolate, therefore chocolate should be criminalised mistake. Most of your comments are highly intelligent, but to me anyway, your barrelling down a blind alley arguing over these two fraudsters.

  • Mack

    Dave

    It’s really not relevant to alleged dodgy practices at Irish banks, unless you think (and given your other views I think you do not) that criminality is “societies fault”.

    ———-
    But to indulge you for a second, for the health of their business they should have recognised the circumstances for what they were – an extraordinary period of lax monetary policy (as it was in the USA, UK, Australia etc) and not have engaged in such aggressive lending practices.

    Let’s be honest, your beef is not with the expansionist monetary policy per se – it’s with Europe in general and the ECB in particular. Other central banks followed the same policy.

  • Dave

    You misunderstood Harry’s argument. He isn’t claiming that party’s should be tainted by the reprehensible characters of a small sample of their supporters. He is countering Greenflag’s attempt to do that by pointing out why Greenflag’s propaganda is self-defeating. So, you could properly read his argument and save us all the Wikipedia guide to logical fallacies.

  • Mack

    Dave, my comment was directed at both of them.

    A bit like the debates we have over Europe, the conversation is appearing on a large number of threads where it isn’t really relevant – and for me, it would be more interesting if they’d focus on the policies instead.

  • Dave

    “Other central banks followed the same policy.”

    They did, and they got the same results. What does that show? It shows that they ECB’s flawed expansionist monetary policies created debt instead of wealth. Like the Federal Reserve (whose policies the ECB copied in a futile attempt to keep the EU’s backward economy on the same speed), they kept interest rates too low for too long. The Bank of England, as its former governor admitted, made the same mistake. They all got the same result. So, we are now paying for the mistakes of those we delegated the sovereignty to.

    Your argument (if so far as you have one) is to claim that because a number group of people made the same mistake, that it doesn’t matter if we had the ability to set our own policy because we would have made the same mistake too. I suggest you pop back over to Wikipedia for an article on elementary logic in order to discover why you argument is seriously flawed. 😉

  • Mack

    Dave, I don’t know how many times I’ve posted my argument now – I suspect you’re wilfully misrepresenting me at this stage.

    1. Separate policy (expaniosionist / contractionist monetary policy) from it’s implementors (ECB, BoE, Irish Central Bank etc)

    2. We can judge the Irish authorities by their record. The Taylor rule has three (count ’em!) variables – the prevailing interest rate depends on inflation (over which Irish institutions had significant influence) and the productivity output gap (as a significant economic player the state also has significant influence over this).

    Irish authorities pursued pro-cyclical expansionist policies. They made no attempt to prick or counter-act the growing bubble.

    Other countries outside the Euro also had bubbles. So even with control over monetary policy the bubble may have still occured.

    Very simple summary

    Irish authorities pursued policies that fueled the bubble, they manifestly failed to respond appropriately to the monetary policy set by the ECB, and you think that by giving them more power they would have acted to contain it – (when bubbles were sprouting across the world)?

  • Harry Flashman

    Actually Mack I agree with you but it’s a common feature of Greenflag’s posting techniques that he continuously hammers on irrelevantly about some issue he’s picked up in some student union magazine about US politics and then bangs on about it relentlessly drawing massive conclusions from tiny evidence.

    His previous favourite was the “Rapture” nonsense, it took a long time for me to convince him to let that one go, if you count the number of mentions of “Madoff” (and ‘Stanford’ more recently) you’ll find GF is leading me by about fifty to one but I admit I’ve run up three or four recent posts in response to him in the past 24 hours to counter this inane name checking.

    I’m happy to let it go but I suspect GF will cling on tenaciously to Madoff and Stanford like a peculiarly stubborn terrier with a particularly chewy stick for weeks to come yet.

  • Dave

    “Other central banks followed the same policy.”

    They did, and they got the same results. What does that show? It shows that they ECB’s flawed expansionist monetary policies created debt instead of wealth. Like the Federal Reserve (whose policies the ECB copied in a futile attempt to keep the EU’s backward economy on the same speed), they kept interest rates too low for too long. The Bank of England, as its former governor admitted, made the same mistake. They all got the same result. So, we are now paying for the mistakes of those we delegated the sovereignty to.

    Your argument (if so far as you have one) is to claim that because a number group of people made the same mistake, that it doesn’t matter if we had the ability to set our own policy because we would have made the same mistake too. I suggest you pop back over to Wikipedia for an article on elementary logic in order to discover why you argument is flawed. 😉

    “Let’s be honest, your beef is not with the expansionist monetary policy per se – it’s with Europe in general and the ECB in particular. Other central banks followed the same policy.”

    By the way, as you are fond of spotting fallacies, can you spot your own one here? It is to suggest that argument about the merits of the expansionist monetary policies of the ECB should be ignored if they come from those who do not support the EU. As a good Europhile who believes in censoring debate, you suggest that only arguments from those who support the EU should be regarded as worthy of discussion. You’re probably not even aware of that, since it is common brainwashing by the EU.

    You still don’t have a counterargument to flawed monetary policies expect to claim that the Irish Central Bank would have devised the same policies. This is beyond idiotic, since it assumes that the Irish Central Bank would have mistook itself for a monetary union and devised monetary policies that were designed to stimulate growth in the German economy, paying you regard whatsoever to the needs of the Irish economy or what the fiscal policies of the Irish government were.

    Ireland has no control over its monetary policy whatsoever, as it is illegal under the Treaty that established the ECB for the Irish government or the Irish Central Bank to offer any advice whatsoever about what Ireland’s monetary policy should be. It is therefore not a case that we have a monetary policy or a policy rate that is appropriate for the needs of the Irish economy but rather that the monetary policy is completely arbitrary, paying no attention whatsoever to the underlining dynamics of the Irish economy.

    This is the same a doctor treating a patient by randomly picking the dianosis and treatement out of a hat: don’t be surprised when the patient dies.

  • Dave

    Whoops! I don’t know how the repost got in there, so just the top (reposted) part.

  • It was Sammy Mc Nally what done it

    Anyone ordered onion rings in Shanahan’s? They seemed to have a serious problem with portion ‘control’on my last (and only ) visit with the delicious side dish arriving in what could best be decribed as a small bucket for just the 2 of us. Did not complain (who ever complaints about too much food?) and we tried our best – but have never been so keen on onion rings since.

    Perhaps a metaphor there for the Celtic Tiger on just how hard it is to shout stop when you have had your fill?

  • Mack

    Dave –

    FFS, I’m not saying that at all. It doesn’t matter who implements a policy if it’s wrong. The Irish authorities, within their remit fecked this up. The Eurozone as hole held up pretty well, even the Spanish who had a monster bubble and have huge unemployment are performing better than us. We entered the Euro and knew the rules of the game – we just ignored them to enjoy the temporary good times.

  • Greenflag

    HF ,

    ‘Need I remind you whose side Madoff and Stanford were on? Put it like this they weren’t conservatives. ‘

    I know and they were’nt socialists either . They were ‘me feiners ‘ to the Nth degree and took full advantage of the loopholes that were made available to them by BOTH Republican and Democratic legislatures over the past couple of decades.

  • Greenflag

    ‘but I suspect GF will cling on tenaciously to Madoff and Stanford like a peculiarly stubborn terrier with a particularly chewy stick for weeks to come yet.’

    No need to worry HF . There are more of the ilk in the pipeline . The Union Bank of Switzerland has been forced to open it’s clients list as the USA starts hnting down it’s tax avoiders etc . Some 13,500 I believe . I suspect the name Madoff among many others will make a reappearance .

    Our own ‘Golden Circle ‘ will be unable to remain incognito for much longer either . The mob will demand it . Fortunately for Madoff & Co it’s 2009 and not 1789 or worse 1939 . Our latter day Robespierres will have to make do with conviction in a court of law followed by long prison sentences 🙁

    ‘Capital punishment for Capital crimes ‘ sounds like a winning slogan for the upcoming Depression era .

  • Greenflag

    Mack ,

    ‘Other countries outside the Euro also had bubbles. So even with control over monetary policy the bubble may have still occured. ‘

    I pointed that fact out to Dave the other day and got a resounding ‘silence ‘. The chap has his mind made up about the EU being the Great Satan and that all our Irish problems have their source in Brussels . I suspect he’s a closet Sun reader 😉 His single ‘transferable ‘ will no doubt be old hat by the time the European elections swing around . Not that that will prevent this fanatical ideologue of the neo con right from desisting with his ‘Sovereignty Uber Alles ‘ monitone 🙁

    Very simple summary

    Irish authorities pursued policies that fueled the bubble, they manifestly failed to respond appropriately to the monetary policy set by the ECB, and you think that by giving them more power they would have acted to contain it – (when bubbles were sprouting across the world)?

    And a very good simple summary with which I can find no fault 🙂

  • Dave

    Mack, FFS indeed, let’s look at this:

    “…Irish authorities… manifestly failed to respond appropriately to the monetary policy set by the ECB…”

    You have it completely arseways in your typical Europhiliac manner: the monetary policy follows the fiscal policy of the government, not vice versa. Central Banks are nomically independent of government but still obliged to ensure that their monetary policy follows the fiscal and other policies of the government. That is to ensure that there is no conflict of economic policies between them, e.g. that the contractionary monetary policy is not used by the Central Bank when the government is acting to expand the economy, etc. With the ECB, you have a monetary union without a political union so you have no convergence between monetary and fiscal policies whatsover.

    You have given total control of the Irish economy to an agency that is not accountable to the Irish people and does not act in their national interest, and where it is illegal for the Irish government to even advise it on what monetary policy would be helpful to the Irish economy.

    Do you have any idea of what you are saying in demanding that the Irish government be a slave to the ECB? You are saying that more than that the ECB tail should wag the dog; you are sayng that the Irish economy must be controlled by an unelected elite who are not answerable to the Irish people for how they control their country.

    You’re a bloody Europhile of the first rank.

  • fin

    “Madoff and Stanford were corrupt investors, their political beliefs don’t really say anything constructive about the merits of the policies they believed in or opposed – they’re not politicians.”

    Mack, they’re not politicans, insofar as no-one ever elected them, Private Eye done an expose on Stanfords empire in Antigua and its not pretty, he more or less decided what the laws were for banking.

    These guys and the rest of Milton Friedmans fans ran governments around the world, I’m 1/2 through “The Shock Doctrine” and its not pretty reading.

    I suppose why bother running for election when you can just buy whichever party is in Government, it saves time.

    Asking Fitzpatrick to leave the cafe was petty, and Quinn (or I guess Fitzpatrick) isn’t broke just yet so the same diners could well be knocking on his door to do business in the future. They should take a leaf out of Blair’s book, he’s huddled down to prayer with Bush and Obama,

  • Greenflag

    IWSMWDI,

    ‘Perhaps a metaphor there for the Celtic Tiger on just how hard it is to shout stop when you have had your fill? ‘

    When your name is Madoff and you have 45 billion stashed away do you stop or go on for 50 billion ? If your name is Fitzpatrick etc etc ?

    Does a fish swim or is the Pope a Catholic ?.

    The American Legislature forgot to take greed for granted when they set down the path of allowing the unregulated shadow banking sector to grow so powerful so as to virtually destroy the entire world economy . That lesson should by now have been learned . After bank nationalisation the USA will have to come to grips along with the other major economies to address this issue .

    We forget that left to it’s own devices the ‘private sector’ would have everybody working for one euro an hour or on the edge of starvation . This is not because the ‘private sector ‘ is evil or oppressive but simply because in a completely ‘free’ market those who accumulate capital the fastest have generally been those who pay the least . That’s just the way it is . The ‘advance ‘ of democracy over recent centuries has countered that inherent tendency within capitalism but it’s still there . Without a strong ‘union ‘ movement the only institution left to protect the interests of the majority of people is Government and if that Government is seen to be aiders and abetters of the emisseration of the people then you will get ‘revolution ‘ sooner or later . The neo con ‘nutters’ have ignored in their quest for their ideological goal i.e complete market ‘freedom ‘. Meanwhile back at the ranch the country that has ‘benefitted ‘ most fom the neo con ‘nutty ‘ approach finds itself in hock and totally dependent on the Chinese communists to the tune of a trillion dollars ??

    History tells us how initially enormous capital was created in Britain as a result of slavery and the sugar trade -ditto for other empires . This was the start capital which enabled Britain to become the world’s firat industrial power .

    Without Government and even with an elected Government answerable to the people then ‘government ‘ can and often does pass into the hands of oligarchs or special interest groups (e.g the US oil industry influence on the previous USA administration or the South American ‘estancieros’ grip on some of the central and southern american states )’

  • Mack

    Dave

    You’re a bloody Europhile of the first rank.

    Lol. Brillaint!

    I’ve actually said very little positive or negative about Europe itself, I’ve focused mostly on what our governments response should be / should have been, but that did make me laugh.

    The common market has been an excellent resource for Ireland so far, and European laws certainly helped drag the olde restrictive Ireland of the 60’s and 70’s into something we all can feel comfortable in and proud of.

    Do you have any idea of what you are saying in demanding that the Irish government be a slave to the ECB? You are saying that more than that the ECB tail should wag the dog; you are sayng that the Irish economy must be controlled by an unelected elite who are not answerable to the Irish people for how they control their country.

    Yes, exaclty. We pooled sovereignty and handed over control of monetary policy to the ECB. The correct policy response from that point onwards was to manage the impact of that policy on the Irish economy – and not to pour super-strength poteen into the punch bowl as our authorities did / allowed happen.

    You’re arguments might be stronger if you focused on the inherent value or otherwise of the Euro system itself rather than focusing your ire on a policy decision that was broadly inline with policies of all the worlds major central banks.

    Our debts are in Euro, which means,in my opinion – that argument has been decided a long time ago. You’d better have outstanding, well-grounded reasons for reversing that decision – with a clear and realistic vision for negotiating the change-over to Punt Nua. But you’ll notice, that Ireland is still a sovereign nation we can make that choice if it makes sense.

  • Greenflag

    Dave ,

    ‘Ireland has no control over its monetary policy whatsoever,’

    The USA has control -so has the UK

    Both these countries seem to be thriving so much as a result of having ‘control ‘ over their currencies that the former opted to reduce their exporting of real goods and services and instead export bundles of waste paper called CDO’s via it’s shadow banking sector thus undermining the world’s economies including their own ? The latter hoped that the City of London would lead the world in ‘financial services ‘ and are now facing a financial crisis and loss of confidence geater than any in their history .

    Ireland meanwhile has had it’s first and lets hope last ‘property bubble ‘ thanks to our ‘greed ‘ and the cowardice (self preservation instincts of our elected politicians :

  • Greenflag

    Hairless Flasher 😉

    ‘It’s a common feature of Greenflag’s posting techniques that he continuously hammers on irrelevantly about some issue he’s picked up in some student union magazine about US politics and then bangs on about it relentlessly drawing massive conclusions from tiny evidence.’

    Another numerate ‘Nordie ‘ 50 billion dollars is tiny eh ? I guess Stanford’s 8 billion heist is hardly worth mentioning ?

    As for Fitzer’s 130 million euros sure it’s only peanuts compared to the 6 billion a year HMG religiously hands over to NI Ltd (limited only by lack of finance ) ;).

    Alas I don’t get to read Student Union rags only the Economist (nice article on shrinking Britain this week ) and Bloomberg radio via internet is a quick way to keep abreast of the latest neo con follies and revelations of gross theft and corruption of both the financial and political sectors of the USA and indeed the world .

  • Greenflag

    mack ,

    ‘The common market has been an excellent resource for Ireland so far, and European laws certainly helped drag the olde restrictive Ireland of the 60’s and 70’s into something we all can feel comfortable in and proud of. ‘

    Well said . We now need the Germans & French to help us buffet this largely self inflicted storm . The Germans and French meanwhile need the Ameicans as do the British . Meanwhile the Chinese keep bankrolling the USA to keep the dollar fom collapse . And the Poles , Hungarians regret they are not in the Euro zone .

    Yes indeed ‘sovereign ‘ control of our currency would be a great advantage for Ireland in the current world economic crisis . We would become overnight an international currency speculators ‘dream ‘ heist . A small county ripe for prey and for a swift devaluation followed by another and another a la some of the South Americans . If they can force the UK into devaluation in the 1990’s you can bet they do even better with a small country like Ireland .

    If there is one shining light in this crisis it is that we are in the Euro Zone .

  • fin

    Greenflag, to a certain extent, devaluation is not a bad thing and it might be what saves the UK, its a shame we don’t have a manufacturing base of note anymore, however, it will still draw tourists and property speculators. It’s also attracting people to NI.
    Other than that, we can sling mud around all day on past mistakes. I honestly don’t think it was possible to run the countries finances any other way as it would have been to out of step with Milton Friedmans grand plan. Today there is a window of opportunity to make a new plan, unfortunately all governments (cowards that they are) seem intent on just patching up the old one.

  • Greenflag

    Fin ,

    ‘to a certain extent, devaluation is not a bad thing and it might be what saves the UK,’

    That’s true – as a shot stop measure it can help but it’s a policy that seems to work for larger countries than smaller ones and probably was more effective at a time when currency speculators did not have the clout they have now . It can be argued that George Soros did the UK a favour by ‘stealing ‘ a billion dollars from his 1990’s raid on the UK. They did eventually devalue by 15% and recovered quickly thereafter . Britons were somewhat mystified at the time that an unelected currency speculator and hedge fund manager could basically direct UK economic policy along lines favourable to Soros’s clients 🙁

    However for smaller economies and especially those outside the protection of the main currency zones such as the euro or dollar ‘devaluation’ is these days a very risky endeavour and as has happened in some countries in the not too distant past it can be the precursor to currency collapse , political upheaval and indeed the utter destruction on an economy .

    For all our problems Ireland is still a lot better off within the Euro than outside notwithstanding our Governments ‘failure ‘ to staunch the headlong rush into the property debacle . NI will benefit temporarily from the present unofficial devaluation but longer term growth depends on currency stability and a less uncetain world economic outlook . That outlook will only change IMO at such time as the USA nationalises it’s banks and brings to heel (i.e ) regulation of the shadow banking sector which will probably only be effective if such regulation is done in cooperation with and with the agreement of the Eurozone countries ,Japan and the emerging economic powers of China , Brazil , Russia etc etc . Most of the world’s economies ‘blame ‘ the present credit crunch in the USA and the proliferation of worthless CDO’s still buried in the American , European and world wide banking system on the Wall St ‘hedge fund ‘ gangsters and their ilk . Our ‘local ‘ property ‘ meltdown was up to a point within our own control to ameliorate as far back as 2005 . Anybody with half a brain could foresee that property values could not continue to increase and would have to come down .

    What no one saw was that the property meltdown in the USA would drag down the banking systems of so many countries via the shadow banking mechanism .This is why Alan Greenspan a devout follower of the Milton Friedman
    school is now on record as support USA bank nationalisation as being probably another necessary step to financial recovery along with Obama ‘s Keynesian priming the pump . But there is another underlying issue behind America’s relative decline which is slowing down and may cancel out American attempts at economic recovery and that is the ‘stagnation ‘ in American ‘middle class ‘ incomes over the past decade or more despite huge productivity increases . More later .

  • Rory Carr

    It is my understanding that Mr Fitzpatrick, after cracking open his twenty-fifth oyster of the evening and, finding yet again that it did not yield up a pearl of great price, broke down sobbing, “It’s not fair. Everything happens to me. Why me?”. Whereupon he was assisted towards the egress and advised to rest upon a bed of banknotes of large denomination – which I believe is the current regime in treating such cases.

    But then that is only my understanding. Perhaps I have it wrong.

  • fin

    Greenflag, I hear you and yeah mostly agree, strangely the plunging value of the pound is been largely ignored here.

    But, would a worthless Punt have kept Dell in Limerick? and attracted more business?

    I finally got around to reading Naomi Kleins ‘Shock Doctrine’ not sure if you have (if not I think you’d enjoy it) and I wonder if this is not an opportunity for a leftist/developmentist agenda to take central stage. Largely I’ve been disappointed that SF have not launched a republican agenda by now, I’d be surprised if they don’t have some radical suggestions in the pipeline.

    Do you think devaluing the Euro would be best for Ireland? cos even short term solutions are not a bad idea in the current climate.

  • scaramoosh

    The people behaved like a herd on the way into this mess, and they sure as hell are going to behave like a herd as the dream fades.

    Calling for some sort of rational response to the current crisis is futility par excellance.

    Ireland has been destroyed by a bunch of spivs and speculators, who believed that they were beyond the law and that they had slain the dragon that is called risk.

    Them fools, them fools, they have left us their debt trails….

  • Dave

    Mack, I actually like the ECB in that it is strongly monetarist and guided by the economic ideas of Milton Friedman (much loved by Greenflag), so it tends to be right more often that it is wrong. My objection is based on a democratic belief that a nation should determine its own affairs in accordance with its own national interest. The ECB, of course, is an executive body that is not appointed by the people of Ireland, does not act in their national interest, and is not accountable to them for the how it uses macroeconomic policy to control their economy and thereby control their livelihood. So, even if the ECB acted exclusively in the Irish national interest and did not destroy the Irish monetary system, I would not agree that an unaccountable, non-national agency has the legitimate right to do that.

    That brings me to my second objection to the ECB: it does not and cannot act in the Irish national interest. Indeed, it is illegal under the Maastricht Treaty for the Irish government or the Irish Central Bank to offer any advice to the ECB about what Irish monetary policy should be. Not that such advice would actually matter since one-size-fits-all means in practice that no size fits anyone – or, at any rate, it should mean that. The reality however is that Frankfurt devises monetary policy in accordance with the needs of one member state: Germany, which is the member state whose economy contributes the lion’s share of the EU’s budget. That means that whatever Germany needs, we get. One-size-fits-all monetary policy simply cannot work because all economics are not the same. That is irrefutable, and it cannot be circumvented by citing the GSP as creating convergence (the Irish economy still has not converged a decade on and is in violation of the terms of GSP). It was a political decision to join the eurozone, not an economic one. It folks want their macroeconomic policy to be decided by a criterion that ignores their economy, then they need only observe the consequences of that lucky dip to know why they were sold a pup by Euro-federalists.

    So, when Ireland needed higher interest rates to control overheating in its economy (and the excessive borrowing that was fuelling it), Germany needed lower interest rates. Guess which way interest rates went? That’s right: downward to 2% and lower, fully 3 times lower than Ireland’s economy required. The result of that inappropriate policy rate was to strap a turbocharger onto the back of the booming Irish economy and to send it hurtling at rocket speed toward a brick wall. That inevitably resulted in bubbles as too much money to chase too few investment opportunities. Using expansionist monetary policy to stimulate growth in this way is a violation of the Treaty, wherein the ECB is required to concern itself primarily with price stability. That is how the Federal Reserve operates, and it seems that is what the ECB would like to be. So they increased the supply of money and lowered the policy rate to increase the demand for it.

    Now, read these two detailed research papers where it is proven that the ECB is operating in the interests of the German economy in violation of the Treaty under which it was established.

    “Empirical results based on Taylor rules suggest that ECB interest rate moves were dominated by considerations focusing on economics developments in Germany and France rather than the euro area as a whole.”

    http://www.uni-mannheim.de/edz/pdf/zei/b01-18.pdf

    “Why did some countries have proper focus on inflation while others did not? Germany’s long standing influence may explain why they had proper focus on price stability. As the largest economy in the Euro-area, it is important to make sure that their economic needs are met.”

    http://www.eurojournals.com/irjfe_19_13.pdf

    This is an even more outrageous scandal than anything that has occurred within the Irish banks, but where is the Irish Times and other Europhiliac muppets when it comes to highlighting it?

    Back to topic before I receive a reprimand from Mick Fealty: will the Irish government force the ‘Golden Circle’ to repay their outstanding loans to Anglo Irish Bank or are we to assume that they had no gold after all?

  • fin

    Mack, regarding your comment earlier regarding Stanford not been a politican, he was so much more than that….

    http://www.guardian.co.uk/world/2009/feb/21/allen-stanford-banking-antigua-barbuda

    Dave, The economic ideas of Milton Friedman are basically undemocratic and against natural order, proven by the methods and the countries where they were imposed by his devotees from the Chicago School, in South America, Indonesia, the UK, the US and Iraq

  • Greenflag

    fin ,

    ‘But, would a worthless Punt have kept Dell in Limerick? and attracted more business?’

    Countries with worthless currencies do not attract investment . They instead ‘attract ‘ capital flight – financial and human – Zimbabwe being a prime example at this time . Bad money drives out good always . This is the point which our ‘Dave ‘ fails to take account of in his standard anti EU crusade and pratings on the irrelevance of 19th century notions of ‘soverignty’ in the globalised world of the 21st century .

    ‘I finally got around to reading Naomi Kleins ‘Shock Doctrine’ not sure if you have (if not I think you’d enjoy it) and I wonder if this is not an opportunity for a leftist/developmentist agenda to take central stage. ‘

    I read Naomi Klein’s ‘Shock Doctrine’ about 6 months back and found it ‘not shocking ‘ per se as most of it I was aware of in individual bits however Klein wraps the Friedman ‘legacy ‘ up in an almost evil conspiracy mode which I think is a step too far . But the general gist of her thesis is not far out and it does seem that the ramifications for American foreign policy implicit in Friedman’s economic doctrine have been to a great extent responsible for the loss of American economic and political power around the world . I read that yesterday Kirghizstan have issued the USA with an ‘eviction’ notice ;)?

    ‘ Largely I’ve been disappointed that SF have not launched a republican agenda by now, I’d be surprised if they don’t have some radical suggestions in the pipeline.’

    The problem for SF and indeed any party on the ‘left ‘ in the developed world is that whereas they may ( and I say may )have analysed what has happened and why their is no individual ‘national ‘(Ireland ) or provincial (Northern Ireland ) escape from this mess . The crisis of ‘neo conservative’ capitalism which finally hit the shan in Aug 2007 will not destroy ‘capitalism ‘ but it will bring major changes to the regulatory climate in which banks operate both in Ireland and across the world . What the political ramifications will be are yet unclear so it probably suits SF to play a low profile in terms of solutions given that ‘experienced ‘ governments with access to the best and most ‘creative ‘ economists in the world are still running around like headless chickens 🙁

    The ‘left ‘ generally is faced with the dilemma that the State (and thereby State ‘solutions’) have been just as much discredited in this crisis as the private financial services and banking and corporate sectors. In Ireland both North and South there is at least a ‘social ‘ safety net which in theory should keep a complete societal breakdown at bay until a worldwide recovery begins . But what if there is an extended ‘depression ‘ ? The ‘left ‘ and the ‘right’have to accept that in this situation ideology of either extreme has NO obvious solution . At present every major Government in the world is throwing as much ‘manure ‘ at the problem wall as they can, hoping that some will stick.

    ‘Do you think devaluing the Euro would be best for Ireland? cos even short term solutions are not a bad idea in the current climate.’

    There is no European Central Bank with the powers of the US Federal Reserve or the Bank of England so the Euro will float in relation to the other major world currencies and because it ‘represents’ the combined economic power of almost 500 million people it’s about the safest currency for Ireland and other smaller countries to have at this time . As of now the US dollar , the Euro , and the Yen are probably the best bets with the British pound being the most ‘exposed ‘ and liable to predatory attacks on it’s value . The dollar has made a modest recovery in the light of reducing oil costs and Obama’s stimulus package but it’s continuing value is dependent on ‘light at the end of the tunnel ‘ emerging some time soon and it’s still extant world currency reserve status . As most of our (Ireland’s ) trade is within the Eurozone it makes sense to have that ‘stability ‘ in the midst of this crisis.

  • Mack

    Fin

    The Shock Doctrine was a good read, but based on the areas it touches were I had picked up in depth knowledge from other sources it was often sensationalist and / or economically wrong. E.g. The piece on “The Volcker shock” was just pure nonsense.

    To put it bluntly Klein doesn’t get the bigger picture (& I don’t think understands economics either :-0! ) – e.g. I think it’s important to remember that up until 1989 the USA and USSR were fighting a cold war & Paul Krugman’s “Return of Depression Economics” may give you some insight into why the IMF operates the way it does – from someone who is best described as a neo-Keynesian rather than a Friedmanite.

  • Mack

    Fin

    Also on the Shock Doctrine, I think it’s useful to highlight that the Bush regime did not follow Chicago School policies economically either – and the conquest of Iraq looks suspect to me – but I would regard that as a completely different kettle of fish to the legacy of the preceeding US executives.

    Anyhoo – a couple of videos of interest?

    Klein versus Friedman – a rebuttal

    Continued..

    Friedman on Greed..

    North Korea or South Korea?

    Thought so 😉