There is a quick and painful way out of this, by sacrificing the banks. It would mean substantial dislocation for about 18 months, but after that the system is reset.

Someone would take over toxic debt / assets of the banks though surely? Why would the system be reset? It'd just be a new foreign player in charge or a new entity altogether...

Im afraid I cant - I just dont know the full consequences of it - although on glance it sounds good (same goes for reducing wages and reducing cost of living all in a perfect world), all I can do is offer off the wall suggestions without looking at the figures. Im just generating debate which may be helpful. I refuse to believe there is no hope
But the earlier we act the easier recovery will be.




^^ maybe Im optimistic but cutting wages and bringing on, purposely, these defaults maybe we can start afresh faster?

Ah, a leading economist!!

They would get the assets for cents in the Euro, the outstanding debt could be halved and they still make a profit.. The original shareholders and savers in the bank would get shafted

So lets nationalise them.

Build them back up and sell them again. try the old semi state model.
I'm serious.

Ireland inc needs to start fighting.
Efficiency of the private sector is often at the expense of appalling Risk management.

Wall street and America are learning that unfettered freemarket idealogical zealotry is just as dangerous as communism.

So, rather than look at specific magic bullets, I thought maybe some general principles would be beneficial:

My general goal would be to maintain high levels of employment, even at reduced levels of income.
1. Support the export sector. Not sure how, but for sure the agriculture sector could do with some help if only in terms of farmers being able to hedge their crop prices so they know when they are planting what they will earn. The current 'how much will you give me for a bullock' system is a nonsense.

2. Increase productivity in both private and public sector. For the private sector, broadband infrastructure is a must. Add to this proper free training in basic IT skills. Send state trainers into companies free of charge. All the companies have to do is give the employees the time. Vastly increase the level of free online courses available for further education - accredit them and have paid exams at the end. Do away with the extortionate charges for Oscail. For the public sector, the solution is much the same. Upskill, upskill, upskill. Merge non-gov organisations where they overlap (even only slightly). Get rid of their corporate structure and have them report directly to the relevant department. We pay our ministers enough. They should be responsible for something. Whatever model the revenue seem to be using, use it elsewhere. Expand the revenue IT department (or whatever is the best IT department in the public sector) to be responsible for all public sector IT. Forget outsourcing, it is a road to nowhere. Either buy off the shelf (with source) or write bespoke.

3. Reduce imports, where local alternatives exist. Create the alternatives where they do not. Again in the ag sector, why do we import masses of veg that is grown in hot-house environments in the Netherlands? The big hit (that will also help exports) is to get secure cheap power, that is, power that relies on no external factors for its cost. If that means nuclear, then so be it. If it means coal, then build a big feck off Drax. Basically, I am not talking about autarky, just that an indigenous industry that reduces imports is as important as an industry that exports and should be encouraged.

4. Increase labour mobility. Bailout people in negative equity with low interest unsecured loans (or secured against their pensions) so they can sell up and move into rented accommodation.

5. Remove all distortions of the rental market apart from: secure leases for renters, CPI adjusted increases once a lease is signed and the renter maintains a good payment record, landlord can fine up to x% for late payment (but if so, it doesn't count as a black mark in terms of payment record), fast-track evictions, fixed deposits - one month up-front, one month for breakables.

6. Remove all distortions of the housing and land markets. No TRS, no section 23, no nothing. Land has one of two zonings - yes or no. Within yes, type of use is irrevocable - industrial, commercial, retail, residential. Only other consideration is based on building regs - council can't refuse build permission, they can only ask for modifications.

That would be transferring private sector debt onto the public, and as we don't have out own currency we can't monetize (inflation) that debt like the Nordic countries could. As part of the plan wages would also have to be reduced across the board to match the write off in debt.



If left alone the free market will sort out its own mistakes quickly, the dangerous bit is where the government attempts to step in and control everything (See Japan for 17 years and still not out of the woods.), the taxpayer/citizen pays a heavy price for this.

oh oh ! I have one!

teach programming in primary school
oh oh !
and european languages

I haven't been taught Irish in the school system for over 10 years, is still bashed into the kids in a learn by rote type formula? Heavy on the Sean MacFheorais?

Actually, if we really did some extensive work on grammar at primary level, then the European languages would come easy. Ireland is really ridiculously bad when it comes to that sort of thing, perhaps more emphasis on reading and expanding the critical interpretation skills of our kids might be helpful too...

Yup, every child should have passed the ECDL and know how to touch type. Primary school children are well able for it. I reckon basic is still king in terms of programming although some sort of scripting knowledge might be handy? Even just visual basic macros in word or excel would be a good start.

I wouldn't insult a kid with the ECDL...

Yes, the computer is something that takes education but it is a big tool in an economy of increasing returns - the more you buy, the more you buy more e.g. software. But the education base is necessary for it in the first place.

Also educate the parents to use a machine with more buttons than the remote control and run courses for the elderly (Fas could again be useful for this) because it's not all about lowering costs - you must try to grow some industries as well and get people involved in new technology culture. The radio, phone and TV/Cable were the precursors but the computer is all those combined and more; typing will be the next talking/walking.

We should have a proper decent broadband network with local television stations sponsored by Chambers of Commerce featuring programmes and ads created by school children, articles and features about the locality etc.

Education is a main part of this but is the will there?

Irish is taught terribly. I'm all for teaching it but the approach has to change dramatically. As for other languages, I think its an English-speaking country problem. The Brits aren't great with second languages and while Spanish is spoken widely in America, its nearly all immigrants that are bilingual.
I once had an american colleague who told me he was practically fluent in Spanish. Someone overheard us and asked him a basic question and he just stared. same thing for question 2. A+ for BS.
The point is, Europeans are forced (practically) to take up another language. Watching subtitled TV from a young age helps a lot I've been told. We seem to get by fine with English. For example, in research science, all decent publications worldwide are in English. There are some national journals but they wont reach a large enough audience so they only get shitty submissions. If you want a career in this area you are practically forced to speak english.

As for what we do well??
Its been said already. Food and tourism. The boom hasn't created any new industry and it may well have destroyed on of two old reliables.

I would agree with this.

My earlier post (tourism/agriculture/foreign companies) was really to illustrate that Ireland doesn't have a future. How many other countries can now also offer these?, and with better value for money?

Why I think this way;
Reason One
What would happen if American and European companies set up operations in a poor African country, providing work, then give the masses cheap, easily accessible credit? I suspect we would see a similar boom that happened in Ireland. Take away the cheap credit, and withdraw the companies and what are you left with?
Ireland didn't invest its new found riches in its future, so now we don't have one. Ireland is simply going to go back to being the poor man of Europe.

Reason Two
Very, very few Irish SMEs are innovators, or create something (apart from houses). Most of them are reliant on large foreign companies, other SMEs or the building industry. With the collapse of construction, the threads of the enconomy are being pulled.

We are probably now even in a worse situation than before the boom. Now we have lots of people with huge debts for fast depreciating liabilities like cars and houses etc.
Ireland has nothing to underpin the economy.