Author Archive

De Rossa’s attack on Democracy

2009, March 12

The Phoenix
March 13, 2009
Affairs of the Nation, p.11

“The Czech Prime Minister, Mirek Topolanek, was dealt with in no uncertain terms by Labour’s Europhile Dublin MEP Proinsias De Rossa recently after the Czech leader, whose country assumed presidency of the EU in January, addressed the European Parliament.

“Topolanke explained that he would not be to upset if the Lisbon Treaty was rejected, although he would vote for it and that the EU could function without Lisbon under existing Nice Treaty arrangements. He also warned, with reference to Ireland, that ‘telling member states in advance that they have to ratify the treaty and that they do not have the right to decide whether to approve it or no, is absurd’.

“This seems an eminently reasonable attitude to adopt by a lukewarm supporter of Lisbon but De Rossa was having none of it and he tore into the Czech premier with abandon saying he was ‘appalled by your comment here this morning that Lisbon is worse than Nice … That is not only untrue, it is divisive and it is a breach of trust. You have to seriously consider withdrawing your remarks.’

“Eurosceptic British Tory MEP Daniel Hannan picked up on De Rossa’s remarks and derided the Labour MEP on his blog, hosted on the Telegraph website, pointing out that certain pro-Lisbon politicians could not even stomach allies who were not sufficiently ardent in their support for the treaty. Hannan also pointed out that De Rossa was dismissing his own electorate in Ireland who had rejected his pro-Lisbon position. Worse, Hannan posted a video of De Rossa’s speech on his blog, christening it: ‘De Rossa’s attack on Democracy.’

“A livid De Rossa then wrote to Hannan demanding that he retitle his video, a demand the Tory MEP graciously acceded to, telling his colleague, ‘You’ve always struck me as a decent fellow’, while nevertheless repeating to De Rossa that he had a ‘contemptuous attitude’ towards his own electorate.”


MEPs attack the Czech Prime Minister, the Irish electorate and the democratic principle
Daniel Hannan
http://blogs.telegraph.co.uk/daniel_hannan/blog/2009/01/15/meps_attack_the_czech_prime_minister_the_irish_electorate_and_the_democratic_principle

Video: Proinsias de Rossa: failing to support Lisbon is “unacceptable”
http://www.youtube.com/watch?gl=GB&hl=en-GB&v=QYMAPjb085g

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David McWiliams: the case for dramatic income tax cuts, offset by property taxes, mass debt deferral.

2009, March 8

http://thepost.ie/post/pages/p/story.aspx-qqqt=DAVID+McWilliams-qqqs=commentandanalysis-qqqid=40086-qqqx=1.asp
The Sunday Business Post
Who will take the blame for the Great Depression of 2010?
Sunday, March 08, 2009
David McWilliams

Extracts:

Making one drastic policy mistake in fuelling the boom with cheap money and tax cuts was bad enough, but making a second one, cutting expenditure and raising taxes in the bust, would be inexcusable.

I am now about to do an unfashionable thing, I am going to make the case for dramatic income tax cuts, offset by property taxes and an expansion of moribund monetary policy through mass debt deferral.

We shouldn’t worry our heads about the implications of this idea, because, if we believe in the logic of monetary union and the irrevocable nature of the euro exchange rate, we should not be too concerned about how big the budget deficit is, or our ability to finance it – because it will be financed.

In addition, if we believe (as I do) in the Irish people, in the long-term economic implication of our demography, in our ability to attract investment based on our workforce and in our ability to create our own companies, these tax cuts will become self-financing.

Granted, these are big ifs. However, we are now following a nihilistic policy which will turn our recession into a depression and will yield us absolutely no economic benefit, either now or in the future…

… There is no mythical pent-up flood of money waiting to rush into Ireland once we’ve shown that we can hit some budget target or other. Show me a country that has benefited from this argument in the past 12 months. They don’t exist. In fact, the country that has seen its government paper being sucked up in trillions is the US, which is running the most expansionary budget deficit in decades.

The core of the problem is that the fundamentalists are using the economic logic of a free-floating currency to argue the budgetary policy in a country with no currency risk at all. No mistake could be more straightforward and no misunderstanding more wrong.

Sure, if we had our own currency we would have to keep our budget deficit in check, otherwise there would be a run on our currency. If we chose to defend a certain exchange rate, we’d need to raise interest rates dramatically. This monetary contraction would reinforce the economic crisis, tax revenue would fall and rates would have to go higher.

But none of this will happen in the euro. The euro allows us to analyse without concerning ourselves with the trivialities of the foreign exchange markets. The euro allows us to think clearly (which is one of its modest advantages for us).

We now need to be radical. We need to cut income taxes, raise property taxes, cut all tax incentives to property and use the money saved to give grants to companies that are employing people. We need to accelerate the new euro-wide bond initiative and use it to borrow heavily.

We should stop getting het up about the budget numbers, because whatever we do now, I can guarantee our forecasts will be wrong.

We also need to introduce debt deferral for hundreds of thousands of mortgage owners who are in negative equity, and use this debt relief as traditional monetary policy. Debt deferral gives hope and – most importantly -i t injects liquidity directly into people’s pockets. The recapitalisation needs to be revisited and a huge distressed bank bond of maybe €40 billion needs to be raised to cover the losses in the banking system.

Every infrastructural investment that would make us more productive in the future should be fast-tracked, not abandoned. We should also raise the money internally, as well as externally. Ireland has close to €300 billion in deposits. We have loads of money. Let’s just raise a national recovery bond and invite our pension funds to participate. We could make it much more tax efficient to invest in the recovery bond than foreign equity.

There are always ways and means. This is all so simple. If our debt/GDP ratio rises to 100 per cent, so what? Most of it will be our cash anyway, and what is the sanction under a monetary union? In the euro, this is only a figure and, as the economy recovers -which it will – this figure will plummet. Implicit in this approach is a cull of many of the senior civil servants who are now acting as inhibitors, rather than facilitators of, change.

Such radicalism is the only way that jobs will be saved and our country can be stabilised. If we follow the current policy of the fundamentalists, we will end up where fundamentalism of every sort always leads -up a blind ally where the world is seen, not as it is, but as they would like it to be.

The world has changed, maybe irrevocably, and we have to change with it. This crisis presents us with the greatest opportunity in decades to shake up this country. Let’s hope we seize it.

10 Article extracts on the Lisbon Treaty

2009, March 8

Shorts –

Doug Bandow: “Europe is not disunited because it lacks a consolidated government. Europe lacks such a government because it is not united… even if the continent’s governments could paper over their own disagreements, they lack any popular support for a serious EU foreign policy.”

Bruno Waterfield: “The EU is not a system of representation or a public authority. It is a set of institutions and relationships that has emerged for the convenience of national state bureaucracies. EU treaties and texts are written for European officialdom, not for the peoples of Europe.”

Josie Appleton: “The unflattering terms used to describe the electorate became less and less guarded – which culminated, after the Irish vote this year, in two separate Brussels officials describing the Irish people as outright ‘bastards’.”

Tara McCormack: “Normally when European officials castigate some Eastern European or African state over their electoral procedures, they argue that the lack of non-governmental sources of information is a big problem – in Ireland, however, they think there are too many non-governmental sources of information.”

Frank Furedi: “Like Robert Mugabe, the EU oligarchs seriously believe that a referendum is simply a public relations exercise, the results of which don’t have to be taken very seriously. The main difference between Mugabe and someone like Jose Manuel Barroso, president of the European Commission, is one of style: Mugabe doesn’t mince his words; Barroso speaks from a script written by an Orwellian ghost-writer.”

Kevin Rooney: “This sums up everything you need to know about Ireland’s disgusted elite: they would rather stay in their little media world, far away from messy public arenas where people were debating the Treaty… Ireland’s political leaders have been given a lesson in democracy by the people – it is a shame that so few of them are in lesson-learning mode.”

Gerry Feehily: “The spectre haunting Europe these days is one of caring, sharing despotism – not Big Brother, but Big Mother.”

Brendan O’Neill: “The message is clear: the Irish should know their place in the European set-up and slavishly bow and scrape before their paymasters in Brussels… Welcome to the ‘democratic’ EU –… where the one country that is holding a referendum – Ireland – has been subjected to the kind of financial, political and emotional blackmail that would make even Imelda Marcos squirm.”

Kevin Rooney: “Something unusual is happening in Ireland: the referendum on the Lisbon Treaty has prompted an unprecedented national debate. Everyone wants to have their say. But the powers-that-be aren’t happy about it.”

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http://www.takimag.com/site/article/empire_of_nothing/
Taki’s Magazine: The online magazine for independent conservatives
Empire of Nothing
Doug Bandow
September 18, 2008

“…democracy is fine, as long as it yields the correct outcome. Kind of the Brezhnev Doctrine applied to European politics.”

“…even if the Irish public ends up giving in, the result would not be an effective, united Europe. The basic problem with the European emphasis on process is that it won’t work without underlying political will. But political will is lacking on both elite and mass levels.
The elite agree more on process than substance, most obviously the right of the elite to make all important decisions”

“Europe is not disunited because it lacks a consolidated government. Europe lacks such a government because it is not united.”

“However, while the Eurocrats agree on the basic governing structure, they do not agree on policy.”

“But even if the continent’s governments could paper over their own disagreements, they lack any popular support for a serious EU foreign policy. It might be possible to continue constructing an overbearing regulatory bureaucracy and impose it on a largely quiescent population. Without a firm popular foundation it is not, however, possible to create a quasi-nation state ready and able to play an active role in the world.”

“Finally and more fundamental, even with Lisbon the European “state” would still lack the sense of national identity and popular willingness to stand behind—and, if necessary, die for—EU policy. America’s greatest strength is not a truly national government. It is a people who believe in the nation, the union of individual states, and who will support the national government in making policy. That Europe does not have, and it would not be magically created by the Lisbon Treaty. Andrew Duff dismissed Irish concerns over maintaining their traditional position of neutrality: “Viewed from the perspective of Gori or Tskhinvali, Irish misgivings about neutrality rather pale into insignificance.” But from the perspective of Dublin the concerns actually are magnified by the Georgian crisis. Do the Irish people want to get dragged into a war with nuclear-armed Russia because a distant and largely unaccountable elite in Brussels, which has demonstrated its utter disdain for what the Irish people think, decides that war is necessary? Maybe their perspective isn’t so stupid after all.”

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http://www.spiked-online.com/index.php?/site/article/5350/
Sp¡ked Online
Monday 16 June 2008
Bruno Waterfield
‘The plan now is to quarantine Ireland’
BRUSSELS: The Brussels correspondent for the Daily Telegraph reports on the EU’s plans to forge ahead.

“The Irish ‘No’ counts more than any of the 18 Treaty ratifications carried out so far, because it was a popular vote. The 862,415 Irish who voted ‘No’ count more because they are more real than other EU populations who have been cited as political ciphers by their governments in the ratification process. Ireland’s ‘No’ followed decisions taken by people involved in a living political campaign. It was not another mere statistical ‘Yes’, to be marshalled by EU apologists after denying referendums in Britain, France, the Netherlands, Denmark, the Czech Republic, Poland and elsewhere. On 12 June, a survey published in the Volkskrant newspaper, a Netherlands equivalent to the UK Guardian, found that 60 per cent of Dutch people wanted the Irish to vote ‘No’. Across Europe, opinion poll after opinion poll has found that the majority of people are against the Lisbon Treaty or in favour of a referendum on it.”

“Such contemptuous references to the capacity of the Irish people to decide on a ‘complex’ document were a pivotal factor in the ‘Yes’ campaign. The truth of the matter was, and is, that Europe’s elites are instinctively uneasy about people reading a text that was not written for them in the first place. And Irish voters reacted accordingly. The EU is not a system of representation or a public authority. It is a set of institutions and relationships that has emerged for the convenience of national state bureaucracies. EU treaties and texts are written for European officialdom, not for the peoples of Europe.”

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http://www.spiked-online.com/index.php?/site/article/6002/
Sp¡ked Online
Josie Appleton
Are EU deaf or what?
The author of a new EU Phrasebook, launched in Brussels[…] analyses European leaders’ utter inability to understand the word ‘No’.

“Four times, European voters have said ‘No’ to European Union documents: in Ireland on 7 June 2001 (Nice Treaty); in France and Holland on 29 May and 1 June 2005 (European Constitution); and most recently in Ireland on 12 June 2008 (Lisbon Treaty). And all four times, European leaders responded by effectively saying: ‘No doesn’t really mean no.’

For most people, a vote is a question asked, and an answer received. Yet European and national politicians treated the ‘No’ votes not as answers, but as obstacles to be negotiated around. They deployed a variety of creative phrasing and reasoning to indicate why these votes did not really count, and how they could be avoided.”

“In every case, the rejection of the treaty only hardened leaders’ conviction that the treaty was necessary, and that they had been right to propose it and push it through. The problem was not the failure of their treaty, but of the electorate, which was apparently not sophisticated and grown-up enough to appreciate this elevated piece of political craftsmanship.”

“Over the course of the four ‘No’ votes in recent years, European leaders became more assured about brushing the votes aside like an irritating fly. They became more visibly irritated with what they described as a ‘block’ to the ‘policymaking process’, or an ‘obstacle to the timetable’. The unflattering terms used to describe the electorate became less and less guarded – which culminated, after the Irish vote this year, in two separate Brussels officials describing the Irish people as outright ‘bastards’.”

“At times, EU leaders have issued gloves-off threats to ensure they get their desired ‘Yes’ vote, as with German MEP Elmar Brok’s dark mention of ‘consequences for Ireland’ if there were another ‘No’. The transcript of the meeting between the presidents of the European Parliament and Czech president Václav Klaus shows the EU officials behaving like a band of heavies, ‘paying him a visit’ to warn him off associating with the Irish ‘No’ campaign. They fell short of threatening his family, but in all other respects it was pure Mafia tactics.

At other times, EU leaders have adopted the tone of an understanding primary school teacher, trying to be tolerant of her pupils’ mistakes. Vice-president of the EU Commission, Margot Wallström, favours this approach. She has said she is determined to ‘analyse’ the vote and discover voters’ concerns, to find out where they had gone so wrong. And then they would have a second try: Are you sure you want to say no? Why don’t you try again?

Whether in Mafioso or primary school mode, what is universally lacking is any respect for the electorate – any sense that votes mean something and should count. Any sense that, at base, leaders are answerable to the electorate, and not the other way around.”

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http://www.spiked-online.com/index.php?/site/article/5709/
Sp¡ked Online
Wednesday 10 September 2008
Tara McCormack
Hell hath no fury like a Eurocrat scorned
A leaked briefing reveals why officials think they lost the Irish referendum: because there’s ‘too much’ press freedom.

“… the Irish Times made public an apparently private briefing paper written by the European Commission (EC), which was mysteriously leaked[…] in the EC’s eyes, it is on the world wide web where things have really spun out of control. The rise of so-called ‘citizen journalism’, blogs and alternative websites not linked to the dominant media groups, has caused real problems for the future of the EU, apparently. The briefing warns that: ‘The internet has allowed increased communication between citizen groups away from government and traditional media dominated sources.’

For example, the blogosphere, says the briefing, was overwhelmingly negative towards the Lisbon Treaty. Apparently, where the ‘No’ campaign released creative and witty videos and songs through websites such as YouTube, official bodies, such as the Referendum Commission, used the new media ineffectively. According to the EC, this made it difficult for pro-EU officials and activists to connect with a ‘younger, internet-savvy audience’.”

“…it seems to get its messages mixed up. On one hand, the EC briefing warns of Murdoch controlling too much of the press in Ireland – yet on the other, it is equally unhappy with the rising number of independent internet sources.”

“… the ‘No’ vote in Ireland expressed people’s sense of alienation and disgruntlement with the EU oligarchy and their distant, aloof rulers in general. In this cynical briefing, which was cynically leaked, European officials reveal their elitist and censorious instincts, their distaste for a free and mixed media, which apparently allows for too much communication between citizens outside of government control. Normally when European officials castigate some Eastern European or African state over their electoral procedures, they argue that the lack of non-governmental sources of information is a big problem – in Ireland, however, they think there are too many non-governmental sources of information.

Beneath the cool and ‘factual’ nature of this EC briefing, there lies a snobbish and contemptuous attitude towards the Irish voters and the peoples of Europe more broadly[…]

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http://www.spiked-online.com/index.php?/site/article/5373/
Sp¡ked Online
Monday 23 June 2008
Frank Furedi
After the Irish ‘No’ vote: pathologising populism
The EU elites’ Mugabe-style disdain for their populist opponents only shows how cut off they are from the people of Europe.

“As far as EU supporters are concerned, democracy is a curse, which threatens to undo all the good things they achieved during months of behind-the-scenes wheeling and dealing. The remarkable thing about their reaction to the Irish electorate – who rejected the Lisbon Treaty in a referendum on 12 June – is that it expresses an intense hostility towards the European public more broadly.

Like Robert Mugabe, the EU oligarchs seriously believe that a referendum is simply a public relations exercise, the results of which don’t have to be taken very seriously. The main difference between Mugabe and someone like Jose Manuel Barroso, president of the European Commission, is one of style: Mugabe doesn’t mince his words; Barroso speaks from a script written by an Orwellian ghost-writer.”

“… the EU doesn’t want to come across like a tin-pot dictatorship, openly flouting the ‘popular will’; it prefers to take a more subtle, behind-the-scenes approach to undermining the impact and influence of public opinion.”

“One of the most disturbing developments in the EU is the spread of the idea that the public’s behaviour is irrational, extreme and potentially dangerous. Anyone who reads the European press will be struck by its powerful mood of suspicion towards ordinary citizens and their political views. There is a growing consensus that people are all too easily swayed by dangerous ideas, and thus they cannot be relied upon to exercise their public duties in a responsible manner.”

“Critics of referenda are often motivated by their own uncertainties, because they recognise that they lack any decent arguments with which to convince the electorate. Instead of doing something about the paucity of their own arguments, the EU oligarchs prefer to blame ‘populism’ for all of their troubles. In recent times, ‘populism’ has been rhetorically transformed into a twenty-first-century equivalent of an old-style fascistic movement. Those who question the legitimacy of the EU are frequently dismissed as naive fools who, as Barroso argues, have fallen ‘into the populist temptation of depicting the European Commission as the expression of bureaucracy and technocracy’.

In reality, contemporary angst about populism and populist movements reflects the profound gulf that separates the political class from the people. It is true that sections of the European public may be influenced by confused prejudices, and may have a narrow and parochial outlook. But so what? An open-minded and democratically inspired public figure would regard this as a challenge to be confronted through debate and political engagement. What the public needs is not cynical rhetoric about ‘respect’, but rather to be taken seriously in the political process.

The tendency to treat supporters of populist campaigns as the enemy, as foolish individuals who should be ignored or possibly saved, betrays the elite’s feeble attachment to democratic politics. After all, supporters of populism constitute an important section of the populace, and they should be taken no less seriously than those whose views appear more enlightened. It is also important to note that populist movements are influenced by a variety of contradictory things. Disenchantment with the political system and the EU elites can lead people to adopt a narrow-minded, divisive attitude of them-and-us in relation to other groups. But very often, populist movements are influenced by an aspiration for social solidarity.

Social solidarity, however, is a sentiment that most EU oligarchs wouldn’t recognise if they bumped into it.”

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http://www.spiked-online.com/index.php?/site/article/5347/
Sp¡ked Online
Monday 16 June 2008
Frank Furedi
Now it’s clear: the EU is an alien imposition in Europe
They have been libelled as an uneducated ‘horde’, yet Irish voters’ rejection of the Lisbon Treaty is a brilliant blow against the EU oligarchy.

“Oligarchs cannot stand public humiliation. So when, last Thursday, the Irish electorate pointed their fingers and shouted ‘The Emperor has no clothes!’, the political elites of the European Union pretended that it was not them who stood exposed, but the Irish people.

EU officials, politicians and their friends in the media all read from the same carefully rehearsed script following the Irish electorate’s rejection of the Lisbon Treaty. Adopting a kind of fantasy language, with all the hallmarks of classic Orwellian doublespeak, the EU and its representatives told the world that the ‘No’ vote did not really mean ‘No’, since Irish voters were thoroughly confused.

They argued that the vote lacked meaning or legitimacy because the campaign against the Lisbon Treaty – the name given to the rebranded EU Constitution – encompassed far too many different interest groups to be taken seriously. Apparently, a campaign that successfully brings together people from the far left to the Catholic right cannot be a genuine expression of popular will.”

“Consider the breathtaking cynicism of the EU Commissioner Margaret Wallström. She told the BBC that we must ‘analyse’ the Irish result and then conduct a public survey to find out what was behind the ‘No’ vote. Taking on the role of a disinterested doctor or scientist, Wallström believes that ‘research’ can discover the source of the Irish disease; such ‘research’ will no doubt lead to the cobbling together of a diagnosis, and then a cure.

The rejection of the proposed EU Constitution by French and Dutch voters in 2005 represented an important blow for freedom, and a challenge to the aloof, technocratic politics of the EU. However, even though Ireland is a small nation which lacks the economic and political influence of France or Holland, its ‘No’ vote was, in many respects, even more significant. Perhaps the most important contribution made by the Irish ‘No’ campaign has been to give some clarity to the disconnection between the electorate and the political class.

Voters and the political class do not only inhabit different worlds – they speak in different languages. Of course, the disconnection between the people of Europe and the institutions of the European Union has been evident for some time. Yet normally, this distance between voters and their rulers expressed itself in falling voter turnout and declining levels of participation in party political activity; surveys also showed that EU institutions lack legitimacy amongst the public, and that officialdom is out of touch with public sensibilities. The ‘No’ vote in Ireland, however, has revealed something far more important: that for a significant section of the public, elite EU institutions are not only illegitimate – they are an alien imposition.”

“The cultural dissonance between the elite and the people was on full display during the Irish referendum. It’s worth noting that those media commentators who denounced the rag-tag army of ‘No’ voters happily overlooked the rag-tag army of elite interests behind the ‘Yes’ campaign.”

“One of the most disturbing features of the EU’s propaganda before, during and after the Irish referendum was the systematic attempt to infantilise the opponents of the EU. The Irish were described as ‘ungracious’ and ‘truculent’, as school pupils who disobeyed their teachers; they were depicted as children who refused to show sufficient gratitude for all the presents they have received from the EU (see Ireland, you ungrateful wretch!, by Brendan O’Neill). The Irish were continually reminded that their recent prosperity has been founded on EU largesse.

The message is clear: the immature response of the Irish people to the Lisbon Treaty should not be taken seriously. This relentless attempt to infantilise an entire people is an alarming historical moment.”

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http://www.spiked-online.com/index.php?/site/article/5349/
Sp¡ked Online
Monday 16 June 2008
Kevin Rooney
‘After all the money you got. Ungrateful b*stards’
DUBLIN: Kevin Rooney reports on the Irish elite’s fury at the ‘unspeakable’ mass who dared to reject the Treaty.

“From the minute it became clear that the Irish people had said ‘No’ to the Lisbon Treaty, Irish politicians and commentators lined up to spew bile at the electorate.

Uneducated, racist, ungrateful, parochial, dysfunctional: those are just some of the insults hurled at the 53 per cent of voters who rejected Lisbon. Swearing is not normally allowed in Ireland’s quality papers, but an exception was made after Thursday’s referendum. The Irish Times quoted one Brussels official as saying: ‘Ungrateful bastards. After all the money you got.’

Leo Varadkar, a leading member of the Irish party Fine Gael, accused the ‘No’ campaign of exploiting the xenophobia of the voters. The Irish Times wheeled out Professor Richard Sinnott of University College Dublin, an ‘expert’ on the Irish voter, who explained that the Irish people were somehow incapable of understanding what was at stake in the referendum. Apparently this is a result of Irish people’s low level of education and their lack of confidence in their own ability to grasp ‘complex issues’.

The breathtakingly elitist view that the ‘No’ camp was basically too stupid to understand the Treaty and its implications was expressed everywhere in the media coverage of the result.”

“The Irish elite is disgusted by the ‘No’ vote because the electorate effectively voted against the recommendations of the entire establishment. This was noted in Ireland’s biggest-selling paper, the Irish Independent: ‘[The “No” vote] was made contrary to the urgings of the government, all the mainstream political parties, the business establishment, most of the trade union movement, and a significant part of the academic community and other respected elements of civil society.’ Yet instead of examining the paucity and patronising nature of its own agenda, which a majority of Irish people rejected, Ireland’s establishment is focusing on the alleged stupidity and wilfulness of the electorate.

In the run-up to the vote, and after it, many commentators came close to saying that a referendum was more democracy than the people of Ireland deserved. Commentators vied with each other to come up with the most derogatory terms possible to describe the ‘No’ campaign. Writing two days after the rejection of Lisbon, James Downey spoke for many when he said in the Irish Independent: ‘Never in the history of unholy alliances has a coalition ranging from the impossible to the unspeakable inflicted on the Irish establishment such a smashing blow… All of them [the “No” campaigners] should have been swatted away weeks ago by the forces of the establishment.’

Reducing voters to the kind of insects that can be ‘swatted away’ shows how serious and hysterical the Irish elite’s assault on the electorate is becoming.”

“In truth, the referendum was democracy in action. Yes, there was a strange alliance of interests in the ‘No’ camp, and of course there were some reactionary politics on display. It is probably true that some ‘No’ voters may not have understood the Treaty. But none of this detracts from the fact that – after debating the Treaty in bars, on the streets, on national radio, everywhere – a majority of the Irish electorate traipsed to the ballot booths to say that they were unconvinced by the arguments of their political leaders, and they would not be swayed by threats and insults from the chattering classes.”

“Instead of addressing the many political issues raised by the ‘No’ campaign, Ireland’s political leaders have shown nothing but contempt for the electorate. When the referendum campaign started, politicians thought it would be enough to plaster the country with huge posters showing their smiling faces next to the word ‘YES!’, as if that would be enough to convince the voters. They have paid a very high price for their impoverished view of democracy, and for undermining the self-respect and nous of the voters.”

This sums up everything you need to know about Ireland’s disgusted elite: they would rather stay in their little media world, far away from messy public arenas where people were debating the Treaty. No wonder they lost, arrogant bastards. Ireland’s political leaders have been given a lesson in democracy by the people – it is a shame that so few of them are in lesson-learning mode.

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http://www.spiked-online.com/index.php?/site/article/5348/
Sp¡ked Online
Monday 16 June 2008
Gerry Feehily
‘The Irish are not fun-loving goblins’
PARIS: An Irish writer in France tells of his heated TV debates with the Sarkozian critics of Ireland’s child-like voters.
‘Whatever they say we are, that’s what we’re not.’

“The spectre haunting Europe these days is one of caring, sharing despotism – not Big Brother, but Big Mother. This attitude was best summed up in one of the TV debates I took part in, where a Euro-deputy of President Sarkozy’s UMP party suggested that the Irish, and other EU citizens, needed pedagogy – that is, like children, we need to be informed of our best interests.

Indeed, amongst the EU elites, the Irish ‘No’ is being pitied in the way one pities a toddler who throws a tantrum in the high street. Such official pity can be seen in relation to other forms of legitimate protest, too, be they strikes or street demonstrations. One only has to think back to the ineffectual million-strong marches against Gulf War II that took place in Europe to see the indifference, if not contempt, with which contemporary leaders disregard traditional expressions of opposition.”

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http://www.spiked-online.com/index.php?/site/article/5304/
Sp¡ked Online
Tuesday 10 June 2008
Brendan O’Neill
Ireland: know your place, you ungrateful wretch!
The bile-filled assault on Irish voters who are thinking of rejecting the Lisbon Treaty shows just how corrupt and undemocratic is the EU.

‘Here, Brendan O’Neill argues that the attack on Irish voters who are thinking of rejecting the Lisbon Treaty exposes the anti-democratic elitism at the heart of the EU. Further below, Kevin Rooney says the Lisbon referendum has re-ignited political debate in Ireland.’

“The message is clear: the Irish should know their place in the European set-up and slavishly bow and scrape before their paymasters in Brussels. Anything else would be ‘extraordinarily ungrateful’, according to one commentator (1). Welcome to the ‘democratic’ EU – where most countries are bypassing their electorates and simply ratifying the Lisbon Treaty, and where the one country that is holding a referendum – Ireland – has been subjected to the kind of financial, political and emotional blackmail that would make even Imelda Marcos squirm.”

“The attacks on Irish voters for being ‘extraordinarily ungrateful’ – both for initially rejecting Nice in 2001 and for even thinking about saying ‘No’ to Lisbon this week – reveal a great deal about ‘democracy’ in the EU. The EU’s bureaucrats and backers seem dumbfounded that they cannot buy Irish people’s support; they find it ‘hard to fathom’ that a people who have received subsidies worth billions of Euros are not falling in line behind their rulers. It is the mark of corrupt, degenerate and anti-democratic elitism to believe that you can buy people’s votes. Indeed, in many civilised, democratic countries it is illegal for political parties to offer voters financial reward for their ballots. Yet, Mafioso-style, EU backers are telling the Irish: ‘You’ve received your monies – now do as we say.’

The assaults on Irish voters also show what it means to be a ‘democratic citizen’ in the EU: that is, someone who is financially cared for by caring-but-faceless bureaucrats in Brussels, and who should be ‘overflowing with appreciation’ for the EU elite’s grace and favour. This is the very opposite of political citizenship; it is a distortion of the traditional relationship between citizens and their governing bodies. In place of free and open debate, in which citizens are treated as adults who can have political views independent of any welfare they might receive from the authorities, we have a situation where those who dare to criticise or complain or say ‘No’ are denounced as ‘extraordinarily ungrateful’ and even ‘treacherous’ (11). This is the kind of relationship a child has with his guardian, or a mentally ill person with his carer – it has nothing whatever to do with democracy.

Indeed, the use of that T-word – treacherous – to describe Irish voters who have rejected EU treaties tells you everything you need to know about the EU elite’s view of the European masses. According to the OED, to be treacherous is to ‘commit treason against a sovereign, lord or master’; it is to be ‘deceiving, perfidious, false, disloyal, traitorous’. The EU clearly considers itself lord of all Europe, and the people its nodding serfs. That it can be described as ‘treachery’ to make a certain political choice inside the ballot booth shows the extent to which Lisbon, like Nice before it, is an already agreed document that parliaments and the people are merely expected to rubber-stamp. How dare the ungrateful, wretched, deceitful Irish jeopardise the EU elite’s already agreed-upon and carefully thought-through plans?

The expectation that the Irish should say ‘Yes’ to Lisbon gives the lie to the idea of equality in the EU. In Brussels and across the pro-EU commentariat it is assumed that poorer countries in particular – Ireland, and also southern states such as Spain and Portugal, and the new Eastern European entries – should behave like ‘the best pupils of the European class’ (12) because they receive generous subsidies from their masters. When the awarding of financial support becomes a key determinant in how states should relate to Brussels, then any notion of sovereign equality goes out the window. Richer states such as Britain, Germany and France can afford a more robust relationship with Brussels, whereas poorer states are told to be grateful, gracious, obedient and unquestioning. In the creaking, oligarchical bureaucracy that is the EU, the citizens of poorer member states are effectively disenfranchised, or certainly are ‘less equal’ than citizens in states that are not so reliant on EU subsidies.”

The Irish referendum has struck the fear of God into the EU and its supporters – and with good reason. The fact that the ‘No’ vote is gaining ground shows that, even in nations that have for the past 35 years effectively been bribed with subsidies by EU officials, the EU has not been able to win any sense of affinity and loyalty. It is still seen by large sections of the European people as an aloof, distant and authoritarian institution to which we should say ‘No’, ‘Non’, ‘Nein’; the EU has come to embody people’s bigger sense of dislocation from political institutions today. The Irish referendum is exposing the thin veneer of the EU’s legitimacy and stripping away its democratic masquerade, leaving it exposed as shrill, undemocratic, unequal and corrupt. Who wouldn’t want to say ‘No’ to that?

<>

———

THE RETURN OF POLITICAL DEBATE
by Kevin Rooney

“Something unusual is happening in Ireland: the referendum on the Lisbon Treaty has prompted an unprecedented national debate. Everyone wants to have their say. But the powers-that-be aren’t happy about it.”

“… the display of so many different arguments is also quite gratifying in an age when politics is so often managed, controlled and dull. EU-related issues are being debated in bars, workplaces, on radio phone-ins. There has even been a return of ‘soapbox politics’, with heated local meetings taking place in town centres. In an effort to keep up, the new Irish Taoiseach – Brian Cowen – has taken to the campaign trail; every day he can be seen on farms, high streets and going door-to-door asking people to vote ‘Yes’.

There is little anti-Europeanism in Ireland. There is no equivalent of the UK Independence Party or the eurosceptic wing of the Conservative Party. Very few people are hostile to Europe itself. However, opinion polls show that there is a growing suspicion of the aloof technocrats of the European Union, who presume to know what’s best for people without engaging them.

In essence, the referendum has provided an opportunity for the Irish people to express their exasperation with their political leaders (both domestic and European) and remind them that they cannot take people’s votes for granted. The Irish Times is outraged about this, arguing that ‘it surely says something about the dysfunctional state of Irish democracy that a majority of voters do not appear to be willing to trust the people they elected to govern them on a fundamental issue of national importance for this and future generations’. Yet it is in the nature of democracy for people to think about things, discuss them, to hold their leaders to account and to high standards.”

=========

Nassim Nicholas Taleb: Video

2009, March 4

Nassim Nicholas Taleb was a successful senior trading and financial mathematics expert in a number of New York City’s Wall Street firms, before starting a second career as a scholar (PhD) —which includes his “black swan” theory of unexpected rare events.

He is advocating a “Two-Tier” Financial system, and the nationalisation of the banks;
The banks – to protect taxpayers – would avoid risk, while hedge-funds etc. would be free to take risks for profit but with absolutely no fall back on tax-funded bailouts;
He regards banking as a public utility – “like getting running water in your home”;
He regards it as not only completely unjust (“privatising profits, socialising losses”) but systemically unsustainable to perpetuate the current system with bonuses for risk takers who do not have to incur the losses. Even though he is coming from an American perspective, this is equally applicable around the world.

His Key points for the future:
* “Robustness” and “Resilience” of society is paramount;
* Robustness is incompatible with systemic, structural, and institutional promotion of risk-taking without cost (e.g. bonuses for executives of failed banks);
* Socialisation of costs, privatisation of profits not only unjust, but “fragilize”/endanger society;
* Banks are utilities, like municipal water or electricity companies;
* Public utilities are primarily for conservative purposes of common good, not for risk taking;
* Other wholly private financial institutions should be free to take on risk at a profit, provided there is a cast iron guarantee of no taxpayer-funded bailouts; both rewards and risks should be borne by the companies and their investors;

Here are some succinct video extracts of Mr. Taleb:

Bloomberg at Davos ’09: The two-tier structure:
“You can not trust banks with risks… it’s the worst of capitalism and socialism, profits were privatised, and costs were socialised”
http://www.youtube.com/watch?v=_wf_EAuNxXc

Fora.TV
The Black Swan author Nassim Nicholas Taleb argues that banks should be regarded as performing a function similar to that of utility companies, and should be separated from riskier investment vehicles such as hedge funds. “Banks cannot be entrusted with risk taking,” he says:
“… because I pay their bills when they lose money”
http://www.youtube.com/watch?v=v05lVJzeQDQ

PBS NEWS HOUR Interview with Nassim Nicholas Taleb, famous economist and author of “The Black Swan” and Dr. Mandelbrot, professor of Mathematics. Both say that the present economy more serious than the Great Depression, and the economy during the American Revolution.
http://www.youtube.com/watch?v=H3zZ6qNWeGw

Nassim Nicholas Taleb BBC: the problems with banking and risks
http://www.youtube.com/watch?v=ABXPICWjFIo

IMedia Kentucky:
http://www.youtube.com/watch?v=ZbE3mTkeY_Q

Nassim Nicholas Taleb – What is a “Black Swan?”
http://www.youtube.com/watch?v=BDbuJtAiABA

His books include:

‘Fooled by Randomness’: “…about luck perceived and disguised as nonluck (that is, skills), and randomness perceived and disguised as nonrandomness (that is, determinism). It manifests itself in the shape of the lucky fool, defined as a person who benefited from a disproportionate share of luck but attributes his success to some other, generally very precise, reason.”

‘The Black Swan: The Impact of the Highly Improbable’;

His own description of himself:

“What I do: I am interested in how to live in a world we don’t understand very well –in other words, while most human thought (particularly since the enlightenment) has focused us on how to turn knowledge into decisions, I am interested in how to turn lack of information, lack of understanding, and lack of “knowledge” into decisions –how not to be a “turkey”. My last book The Black Swan drew a map of what we don’t understand; my current work focuses on how to domesticate the unknown .
More Precise New Project: To “robustify” society against Black Swans –activism against those who fragilize it (bankers, economists etc.)”

Audio: Inflation or Deflation?

2009, March 4

http://commoditywatch.podbean.com/2008/08/24/inflation-or-deflation-part-1/
From CommodityWatch on August 24th, 2008 (In association with Minesite. com), presented by Dominic Frisby:
Inflation or Deflation? Part 1
James Turk of Goldmoney;
Mish Shedlock of Global Economic Analysis;
and Michael Hampton of Global Edge Investors.

http://commoditywatch.podbean.com/2008/09/01/inflation-or-deflation-part-2/
From CommodityWatch on September 1st, 2008 (In association with Minesite. com), presented by Dominic Frisby:
Inflation or Deflation? Part 2
Bob Hoye of Institutional Advisors;
Dr Marc Faber of GloomBoomDoom.

H/T to Mike Shedlock.

Burj Dubai: The Skyscraper as Economic Nexus & Leading Index

2009, February 22

[Remember all those Irish property expo shows for apartments in Turkey, Eastern Europe… Dubai? All emphases mine]

“The common pattern in these … historical episodes contain… the following features. First, a period of “easy money” leads to a rapid expansion of the economy and a boom in the stock market. In particular, the relatively easy availability of credit fuels a substantial increase in capital expenditures.
Capital expenditures flow in the direction of new technologies which in turn creates new industries and transforms some existing industries in terms of their structure and technology.”

“This is when the world’s tallest buildings are begun.”

“At some point thereafter negative information ignites panicky behavior in financial markets and there is a decline in the relative price of fixed capital goods. Finally, unemployment increases, particularly in capital and technology-intensive industries…”

In the twentieth century the skyscraper has replaced the factory and railroad, just as the information and service sectors have replaced heavy industry and manufacturing as the dominant sectors of the economy.”

The skyscraper is the critical nexus of the administration of modern global capitalism and commerce where decisions are made and transmitted throughout the capitalist system and where traders communicate and exchange information and goods, interconnecting with the telecommunications network. Therefore it should not be surprising that the skyscraper is an important manifestation of the twentieth-century business cycle, just as the canals, railroads, and factories were in previous times.” (Thornton – Ref. 3)


“A DISTINCTIVE FEATURE OF FLUCTUATiONS of both construction and real estate prices over the last 150 years in the United States, Great Britain, and other countries is the regularity of cycles of roughly 20 years… Clarence Long… observed that a decline in building precedes general business declines in major downturns… a phenomenon that has continued to the present day.”

“The United States has had a real estate cycle of roughly 18-year spans, starting as early as 1800, The peaks of the U,S. real estate cycles prior to World War II occurred in 1818, 1836, 1854, 1872, 1890, 1907, and 1925, Cycle bottoms occurred in 1819, 1843, 1858, 1875, 1894, 1908, and 1933… Upward movement in real estate prices persisted in 1819-1836,1860-72,1894-1907, and 1908-1925, Sharply falling real estate prices occurred in 1818-19,1837-1840,1857-59,1873-75,1892-94,1907- 08, and 1929-32… Detailed histories of these cycles are related in Hoyt (1933), Sakolski (1932), Hicks (1961), English and Cardiff (1979), and other works.”

“The congruence of the real estate and business cycles is seen clearly in the Great Depression and preceding 1920s boom. In 1920, the total value of U.S. urban land in cities of over 30,000 was $25 billion. By 1926, urban sites rose to over $50 billion… During 1925, $500 million of northern capital had poured into Florida real estate, where speculation was most extreme… In the fall of 1926, the Florida land boom collapsed. Construction in the cities continued with undiminished ardor during 1927-1928; from 1923 to 1929, the square feet of office space in Chicago almost doubled. So powerful was the 1920s boom and subsequent bust that no new office buildings were erected and no new large hotel was built in Chicago from 1931 to 1950…”

“If the production of capital goods, especially construction, was the key element of the “second derivative” of the 1920s boom, its decline after 1925 would eventually bring the first-derivative growth to a halt. The timing, in the midst of the boom, was right. Hansen (1964, p. 46) calls the drop in construction in 1928 “catastrophic,” and states, “No explanation of the boom of the twenties or the severity and duration of the depression of the thirties is adequate which leaves out of account the great expansion and contraction in building activity.” Hoyt (1970, p. 532) remarked that the increase in the number of foreclosures in 1927 “was a barometer of approaching financial storms…”

Land is essential for all production. In any particular economic region, the quantity of surface sites is fixed… When a boom is underway, the anticipated increase in rent induces speculators to buy land for price appreciation rather than for present use, which causes the current site value to rise above that warranted by present use. Once widespread speculation sets in, land values are carried beyond the point at which enterprises can make a profit after paying for rent or mortgages. The rate of increase of investment slows down, eventually reducing aggregate demand as the slowdown ripples through the economy, increasing unemployment and bringing forth a depression. Thus a fall in demand follows the initial cause, the rising cost of land…”

“Murray Rothbard (1975, p, 86) reports that the money supply of the United States increased by 62 percent during the 1920s boom. The major increases in credit expansion took place in 1922-25, Here again, the money and credit system, this time orchestrated by the new Federal Reserve System, fueled the speculation.”

– (Foldvary – Ref. 1)


“In the overheated speculation of the 1920s, as land prices rose, towers grew steadily taller. Or should the order be: as skyscrapers grew taller, land prices rose? The variables that contributed to real estate cycles were even more complex than this “chicken and egg” conundrum. (Willis 1995, p. 88)”

1818    —         LAND price peak
1819     —        BUST
-24         $    [recession: harvest & bank failures, widespread farm foreclosures]

~~~~~~~~~~~~~~~~

1836     (18)     LAND price peak
1836    —        CONSTRUCTION peak
1837     (18)     BUST
-43         $$$    [“Panic of 1837” American banks stop payment in precious metal – speculation markets greatly affected]

~~~~~~~~~~~~~~~~

1854     (18)     LAND price peak
1856     (20)     CONSTRUCTION peak
1857     (20)     BUST
–60          $    [recession triggered by Ohio Life Insurance & Trust Company bust, European bubble in US railroads]

~~~~~~~~~~~~~~~~

1871     (15)     CONSTRUCTION peak
1872     (18)     LAND price peak
1873     (16)     BUST
-79             $$$    [“Panic of 1873” largest bank in US fails, bursts post-Civil War speculative bubble]
$    [Coinage Act of 1873 demotes silver in favour of gold – effectively cuts credit of Western & rural populations]
-96             $    [“The Long Depression”]
~~~~~~~~
1890     (18)     LAND price peak
1892     (21)     CONSTRUCTION peak
1893     (20)     BUST
–96         $    [recession triggered by failure of US Reading Railroad & withdrawal of European investment]

~~~~~~~~~~~~~~~~

# = NEW RECORD for World’s tallest building.

1907     (17)     LAND price peak
$    [“Panic of 1907”, run on Knickerbocker Trust Company deposits]

# Singer Building    New York     (Completed)

1909     (17)     CONSTRUCTION peak

# Metropolitan Life    New York    (Completed)

# 1913         Woolworth         New York    (Completed)

$    Founding of Federal Reserve System:
“…The Panic of 1907… widely considered to be a key event in the passage of the Federal Reserve Act in 1913…”

1914-18             WWI

1918     (25)        BUST
–21         $    [severe hyperinflation in Europe,
rampant real estate speculation in Germany]
Depression         Jan 1920-Jul ’21

~~~~~~~~~~~~~~~~

Sharp Recession    May 1923-Jul ’24
1925     (18)     LAND price peak
(16)     CONSTRUCTION peak
Mild Recession     Oct 1926-Nov ’27
1929     (11)     BUST
-39         $$$    [stock markets crash worldwide, the Great Depression]
Depression        Aug 1929-Mar ’33

# 1929        40 Wall St         New York     (Completed)

# 1930        Chrysler Building    New York     (Completed)

# 1931        Empire State        New York     (Completed)

Depression        May 1937-Jun ’38
1939-45           WWII

~~~~~~~~~~~~~~~~

1947-91           Cold War
-51                [Marshall Plan]
Sharp Recession    Nov 1948-Oct ’49
Sharp Recession    Jul 1953-May ’54
1956                [Federal-Aid Highway Act – “Dwight D. Eisenhower National System of Interstate & Defense Highways”; construction absorbs more than half the world’s commodities in 1950’s. (Holmes, Ref. 4); The golden age of Suburbia & Los Angeles (designed for cars)]
Sharp Recession    Aug 1957-Apr ’58
Mild Recession    Apr 1960-Feb ’61
~~~~~~~~

1967-72            “An old-fashioned real-estate boom finally developed, especially for apartments, from 1967 to 1972, coinciding with increased inflation. Baby boomers increased the demand for rental housing. Prices of apartment buildings were rising faster than their rents, but ‘investors didn’t care . . . they were buying into the rental property market in order to speculate on future price increases’…
$    The Tax Reform Act of 1969 had made rental property more attractive. Tax shelters used negative cash flow as a tax advantage. Real estate became a favored hedge against increasing inflation, the stock market having topped out. ” (Foldvary)
Mild Recession    Dec 1969-Nov ’70
1972     (47)         CONSTRUCTION peak

# -73         World Trade Center    New York

$$$    Real Estate Investment Trust (REIT) assets grew from $2 billion in 1969 to $20 billion in 1973. Commercial bank mortgage loans increased from $66.7 billion in 1969 to $113.6 billion in 1973…” “Then vacancies began to increase. ‘With catastrophic swiftness, the money machine sputtered to a stop. The financial suptirstructure collapsed; the REIT industry faced bankruptcy’… “Interest rates were also increasing. Many REITs and developers went bankrupt. Apartment units begun dropped from their peak of 1,047,500 in 1972 to 268,300 in 1975…
‘More money may have been lost in the Apartment Crash than in any of the more celebrated crashes.
But it remains an unheralded financial crisis’ … It was the worst recession in the U.S. since the 1930s.” (Foldvary)
Sharp Recession    Nov 1973-Mar ’75
Ben Bernanke (2003): “… the deep 1973–75 recession was caused only in part by increases in oil prices per se. An equally important source of the recession was several years of overexpansionary monetary policy that squandered the Fed’s credibility regarding inflation… ”
1973     (48)      LAND price peak
(44)      BUST

# 1974        Sears Tower        Chicago     (Completed)

US Population growth rate & Wholesale Price Peak (Long-Wave IV): “Baby Boomers”

~~~~~~~~~~~~~~~~

1978     (6)         CONSTRUCTION peak
1979     (6)         LAND price peak
1980     (7)         BUST
Mild Recession    Jan 1980-Jul ’80
Sharp Recession  Jul 1981-Nov ’82
-94        $     [Cheney: “Reagan proved that deficits don’t matter”]
[1,600+ banks insured by FDIC closed or received financial assistance. L. William Seidman, former chairman of both the FDIC and the Resolution Trust Corporation: “The banking problems of the ’80s and ’90s came primarily, but not exclusively, from unsound real estate lending.”]

~~~~~~~~~~~~~~~~

1986     (8)        CONSTRUCTION peak
$    [Tax Reform Act removes many tax shelters for real estate investments.]
-89             [FSLIC closed or otherwise resolved 296 institutions with total assets of $125 billion.]
-95            [number of US federally insured S&L’s in the US declined from 3,234 to 1,645;
primarily due to unsound real estate lending.]
1987             $$$    [Oct 19 Black Friday Stockmarket Crash worldwide]
1989     (10)     LAND price peak
-95             [Resolution Trust Corporation agency resolution of an additional 747 thrift banks.]
1990     (10)     BUST
Mild Recession    Jul 1990-Mar ’91
[Douglas Coupland’s “Generation X” in their 20’s, originally referred to as the “baby bust” generation]
1986-1991      [number of new homes constructed dropped from 1.8 to 1 million; lowest rate since WWII.]

~~~~~~~~~~~~~~~~

1989-91           [End of Cold War: Fall of Berlin Wall, collapse of Soviet Union & Comecon network;
Former Soviet populations and resources now accessible – Fukuyama’s “End of History” & rise of global – IMF enforced – neoliberalism]
[1991-present: Al Gore invents Internet (!); rise of World Wide Web, cybernetic Information Technology networks]
$    [1995–Mar 2000 Dotcom & Information Technology Bubble – Newt Gingrich invents “Information Superhighway” (!), & NAFTA – puts Contract on America]
1993-96          $    [Foreign debt-to-GDP ratios rise from 100% to 167% in the four large ASEAN economies.]

# 1997         Petronas Tower    Kuala Lumpur    (Completed)    “Asian Contagion”/”Asian Flu”

-98         $    [Thai government floats the baht, cuts peg to USD, after exhaustive efforts to support it;
foreign debt-to-GDP ratios beyond 180%; severe financial overextension part real estate driven; Russian Government default on government bonds; Long Term Capital Management loses $4.6 billion in less than four months, almost crashes system]

~~~~~~~~~~~~~~~~

2000             $    [March, Dotcom crash]
2001                 [June 13, Taipei 101  “topped out.”]
# 2004        Taipei 101    Republic of China/Taiwan    (Completed)
[Burj Dubai – Construction start]
2005                [China uses half of world’s cement and 40 percent of world’s steel (Holmes, Ref. 4)]
2006                [China plans to build 14 express highways, six railways and a dozen new seaport facilities before 2010; energy consumption expected to be 69 percent higher in 2010 than in 2002, according to the FEIA; growth rate 5X US, >15X Europe; India invests 3.5% GDP on power plants, roads and other infrastructure, financing “industrial townships” (Holmes, Ref. 4)]
2006     (17)     LAND price peak
2006     (20)     CONSTRUCTION peak
2007             [“subprime mortgage financial crisis”]
2008                [Sep 1: Burj Dubai is tallest structure ever built.]
2008!     (18)    BUST
$$$ [The Crisis of 2008-20??]
2009                [Jan 17: Burj Dubai “tops out” at 818 m – half a mile]
# 2009         Burj Dubai     Dubai     [September-December, estimated completion date!]

# 2012         Shanghai     China     [estimated completion date as of 2005]

“In the overheated speculation of the 1920s, as land prices rose, towers grew steadily taller. Or should the order be: as skyscrapers grew taller, land prices rose?

“The common pattern in these … historical episodes contain… First, a period of “easy money”…

“…the money supply of the United States increased by 62 percent during the 1920s boom. The major increases in credit expansion took place in 1922-25, Here again, the money and credit system, this time orchestrated by the new Federal Reserve System, fueled the speculation.”


[A note on Ireland and the Crisis… if I remember correctly, there were plans by Sean Dunlop to build a skyscraper in D4 not so long ago? How’s that U2 tower going?]

“In a way, Ireland offers a lesson in how not to handle your newfound riches. Alan Ahearne, an economist at the National University of Ireland in Galway, worked for the U.S. Federal Reserve. When he came back to Ireland in 2005, he was unnerved. House prices had rocketed, outpacing incomes and rents [Remember US Apartment Crash of 1973: “worst recession in the U.S. since the 1930s”]. In 2006, the census found more than 250,000 empty properties, in a country with a population of just over four million. Many were investments their owners didn’t bother renting out, so good were the gains from rising prices. “That, to me, was a scary sign,” Mr. Ahearne said.

Ireland’s membership in the euro zone brought benefits, but also hazards. Low interest rates brought a flood of credit, which the Irish put to work buying homes.

The period of low rates was “fine for the German economy, which was very weak at the time, but it wasn’t for the Irish economy, which was very strong,” says Mr. Ahearne. To regain its footing, he says, Ireland will face painful “real devaluation” — falling wages and prices that bring the living standard down.”

http://online.wsj.com/article_email/SB123397193880159399.html

Wall Street Journal, FEBRUARY 7, 2009, Ireland’s Boom Falls Hard in Global Crisis, By CHARLES FORELLE


https://eriugenasnotes.wordpress.com

Other references:
http://www.wikipedia.org
(1) “The Business Cycle: A Georgist-Austrian Synthesis”, Fred Foldvary (Economist, Santa Clara University), American Journal of Economics and Sociology, Vol. 56, No. 4 (October, 1977).
http://www.findarticles.com/p/articles/mi_m0254/is_n4_v56/ai_20381871
http://www.foldvary.net/works/cycle.html
(2) The Concise Encyclopedia of Economics
Recessions
by Geoffrey H. Moore
http://www.econlib.org/library/Enc1/Recessions.html
SOURCE: Based on table A-2 in G. H. Moore, Business Cycles, Inflation and Forecasting, 2nd ed., 1983. Note that the brief and mild recession of 1945 is omitted here.
(3) “Sky Scrapers and Business Cycles”, Mark Thornton,  The Quarterly Journal of Austrian Economics, Vol. 8, No. 1 (Spring 2005), 51-74.
http://www.mises.org/journals/qjae/pdf/qjae8_1_4.pdf
(4) The Rise of the Chinese Consumer
By Frank E. Holmes
July 12, 2006
http://www.kitco.com/ind/Holmes/jul122006.html

Total Fiat Money (& Credit) Deflation Model – Mish

2009, February 22

Mike “Mish” Shedlock (Sitka Pacific), Global Economic Trend Analysis:

I don’t agree with some of his attitudes – for example: “Fiat Money” is backed not by a physical commodity, but by trust – one of the most precious forms of social capital, foundational to all human relationships and behaviour. “My word is my bond” is not backed by a physical commodity, but by trust – that hardly means it’s not worth anything. The fact that the States of Weimar and Zimbabwe betrayed that pooled trust, is symptomatic of a complete bankruptcy (literal and figurative) of trust and the social contract or order in those states. A kind of bizarro mirror-image is Kim Jing Il’s refusal to let his subjects use “fiat” (or any other) money until recently – a totalitarian, sociopathic Scrooge McDuck’s hoarding of all trust and exchange to himself.

I think that money is a measure, a bit like inches – a meter would still be a meter even if that rod in Paris was not there to physically back it. Money is a relative measure of all other goods that operates more like a daily index or telephone exchange that transmits messages. I can see how the system can be rigged and devalued, but don’t see that it’s value needs to derive from only one physical good.

The attraction I see with gold is that it has no counterparty risk: it’s unforgeable and limited, though fungible, so the social value derives from the trust itself derived from gold always being gold, and being limited as is trust, but also being transferable and dividable.

But I think the following is a really clear and succinct summary of what is happening – something absolutely missing from all the talking heads. He puts into relatively rigorous and logical terms that metaphor of the growing pile of money the banks are storing in case they need to plug those growing “black holes” of collapsing credit. It is also a useful way to navigate all the different definitions of inflation and deflation, and their resultingly different conclusions, I think:

Fiat World Mathematical Model

Fm = Fb + MV(Fc)

Fm = Fiat Money Total
Fb = Fiat Monetary Base
Fc = Fiat Credit, the amount of credit on the balances sheets of institutions in excess of Fb

MV(Fc) is the market value Fc

Inflation is an expansion of Fm
Deflation is a contraction of Fm

If only base money was lent out (no fractional reserve lending), MV(Fc) would equal zero. The equation ensures we do not double count credit in Fm.

MV is a function of time preference and credit sentiment (ie. Belief that one can be paid back). As long as that belief was high, banks were willing to lend.

Because (at the moment) Fc (credit) dwarfs Fb (base money), the system can only hold together as long as there is belief credit can be paid back and as long as there are not defaults. Needless to say, the perceived belief that Fc can be paid back is under attack, both by rising defaults, and by sentiment. That is why MV(Fc) is collapsing.

In other words, the mark to market value of credit is contracting faster than base money is rising.

See also:

“SGS M3 Continuation” – John Williams

2009, February 18

John Williams, Shadow Government Statistics:

http://www.shadowstats.com/alternate_data

SGS M3 Continuation: shadowstats.com

SGS M3 Continuation: shadowstats.com

SGS Consumer Price Index continuation: shadowstats.com

SGS Consumer Price Index continuation: shadowstats.com

SGS GDP continuation: shadowstats.com

SGS GDP continuation: shadowstats.com

SGS alternate employment data

SGS alternate employment data

“M Prime” (M’) – Mike “Mish” Shedlock

2009, February 18

TMS: A Truer Money Supply?

http://globaleconomicanalysis.blogspot.com/2008/07/tms-truer-money-supply.html

M Prime

Using Shostak’s definition and with much charting help from Bart at Now and Futures, I came up with M Prime (M’), arguably what TMS is supposed to be. For more details on the origin of M’, please see Money Supply and Recessions.

M Prime 1968 To Present

M' (M Prime) 1968-2008, with percentage changes

M' (M Prime) 1968-2008, with percentage changes

M’ dips below 2.5% or so are a strong signal of recession.

M Prime vs. TMS

As for measuring inflation or deflation, I do not think any of them will suffice for the simple reason that credit marked to market is plunging and that is the way things need to be looked at. Unfortunately, there is no accurate measure of the plunge in credit because financial institutions are not marking credit to market. Instead much credit is still in SIVs and/or hidden in Level 3 (marked to fantasy) assets.

… That is on top of the distortion I mentioned earlier in that M3 and MZM are expanding because credit lines are being tapped and parked in money market funds.

Judging from collapsing real estate, people walking away from homes, risk aversion sinking in, and banks unwillingness to lend, together with the idea that credit that should be marked to market isn’t, I believe we are in deflation, right here right now. Those focused on M3 or energy and food prices are truly missing the boat. Trillions of dollars of destruction in housing wealth (with much more coming) and another trillion markdown in bank credit coming (on top of what we have already seen) are far more important and far more representative of the state of affairs than is M3, or any other monetary aggregate for that matter.

M' (M Prime) versus TMS, 1968-2008

M' (M Prime) versus TMS, 1968-2008

Is Big Inflation Coming?

…a perfect 15 out of 15 conditions experienced in the great depression are happening today as discussed in Humpty Dumpty On Inflation.

Of course Humpty Dumpty can and does pretend that deflation is specifically about money supply, totally ignoring credit. And those same Humpty Dumpties were amazed by the collapse in commodities and were crushed shorting treasuries because they did not see this coming.

“Actual Money Supply” – Paul Van Eeden

2009, February 18

http://www.paulvaneeden.com/Actual.Money.Supply

PaulVanEeden.com: "Actual Money Supply"
PaulVanEeden.com: “Actual Money Supply”

PaulVanEeden.com: AMS comparison

PaulVanEeden.com: AMS comparison


PaulVanEeden.com: AMS historical

PaulVanEeden.com: AMS historical