Madam, – It is encouraging to hear illustrious politicians and economists such as Dr Garret FitzGerald and Peter Sutherland predict possible recovery of the fractured economic system in a couple of years’ time. I, like so many others, would very much like to believe them. There is, however, the niggling problem of production jobs and their inevitable decline in Western societies, ie, Europe and North America.
The remedy being proposed, and already under way, seems to be the indiscriminate pumping of money into the affected economies, which is exactly what the banks were doing, and which is credited, (excuse the pun) with causing the collapse in the first place.
The banks did not cause the collapse: they simply reacted to demand and camouflaged the effect of real job losses for some years by making huge amounts of credit available to borrowers who had no hope of making repayments. This is what governments and society demanded. This policy seems to be exactly the same as that now being advocated and pursued by governments under the guise of being necessary for economic recovery.
The real problem is the advance of technology; the ability to manufacture and move goods in abundance and at low cost, and the consequent reduction and shift of jobs to low-cost countries. This glaring fact is being largely ignored. Nothing in the real world will initiate an upturn. The flood of “paper money” being injected will only serve, if it works at all, to camouflage the problem for a further short period and give the illusion of recovery.
The great difference between the present economic crisis and all previous ones is that this one is caused by excess rather than shortage, success rather than failure. Nothing need be in short supply in the world; what we need is a revised social system to distribute the wealth we can create.
Jobs no longer provide an adequate avenue for doing this. World leaders must accept this reality and begin the necessary changes, or our ability to cope with success could be mankind’s greatest failure. – Yours, etc,
PADRAIC NEARY, Tubbercurry, Co Sligo.
Madam, – We have all heard the maxim “Those who cannot learn from history are doomed to repeat it”. And yet this Government wants no analysis of what – and who – caused our current disastrous economic crisis.
Most, if not all, respected commentators insist that Ireland’s economic crisis is almost entirely of our own making. The American sub-prime debacle was only a small contributor. Irish property developers and their banking accomplices were allowed, even encouraged, to run absolutely wild. However, even though we are all having to pay the piper, we are not allowed to ask who wrote the tune.
Everyone knows that the Budget from hell was born in the Dáil chamber. But let nobody forget that it was conceived in the infamous Fianna Fáil tent at Galway Races. – Yours, etc,
MICHAEL CUNNINGHAM Wyckham Place, Dundrum, Dublin 16.
Madam, – Under euro-zone rules individual states cannot devalue the euro currency for understandable reasons.
In the case of Ireland, economists, bankers and your readers are largely agreed that it is just as well. However, another form of devaluation is in process.
When Nama takes over the toxic developer debt it will effectively have devalued those holdings by at least 50 per cent. When the national banks are finally and inevitably nationalised their viable corporate debt and remaining toxic exposure will also be factually devalued by a similar percentage.
So devaluation by any other name is well in process and by that model only benefiting those who have orchestrated our disaster.
In mitigation, I propose that the Government unilaterally decree a reduction in value of all mortgages of property (commercial, speculative and domestic) in the Republic on a given day and date with no caveats and by not less than 30 per cent.
This would show some parity of concern for the private sector, recognise the current value of the Irish homes market and undoubtedly drive activity in home sales across every section and locality.
It would also release much disposable cash into the retail sector. Most especially it would compensate the regular tax payer who is being obliged to carry the burden of profligacy for generations to come. What say the economists?
DAMIEN J BRENNAN,
Aughamore,
Near Sligo.
A chara, – I know times are tough, but how about this for a sales pitch, spotted on Ballyboggan Road, Finglas: “To let, dynamic apartments”. – Is mise,
JOE KELLY,
Montpelier Gardens,
Infirmary Road,
Dublin 7.