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Haughey's "Living Way Beyond our Means" speech: worth a closer look?


Question R24U

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The speech is fameous for a mis(or partial quote) of the following lines, but are there any lessons to be learnt from the speech as a whole?

As a community we are living away beyond our means. I do not mean that everyone in the community is living too well. Clearly many are not and have barely enough to get by.
Haughey was given elected Taoiseach just a month earlier. The tragedy for the country is that it was not followed through with by his or the next 3 governments. It was not until 1987, when he led a united political party (the establishment of the having removed the “troublemakers” aka PDs) and had the fortune to have a national statesman as leader of the opposition (in Dukes). At a time that he was able to appoint a hard man ad minister for finance. The result was the Programme for National Recovery (http://www.ictu.ie/download/pdf/prog...l_recovery.pdf ) in October, 1987. Unlike previous plans, promises and programme sit was implemented. The result being an embryonic Celtic Tiger which acquired the full benefits of a productive workforce, massive foreign direct investment, EU subsidies and subventions, low interest rates, a stable currency, a low tax economy that would come in the years ahead.

The speech in my view, read in that context of being put in place 7 years later , is therefore of far greater significance that that characterised by those who have not read it.

What do people think of it now?


I wish to talk to you this evening about the state of the nation’s affairs and the picture I have to paint is not, unfortunately, a very cheerful one.

The figures which are now just becoming available to us show one thing very clearly. As a community we are living away beyond our means. I do not mean that everyone in the community is living too well. Clearly many are not and have barely enough to get by. But taking us all together, we have been living at a rate which is simply not justified by the amount of goods and services we are producing.

To make up the difference, we have been borrowing enormous amounts of money, borrowing at a rat which just cannot continue. As few simple figures will make this very clear.

At home, the government’s current income from taxes and all other sources in 1979 fell short of what was needed to pay the running costs of the state by about £520m million. To meet this and our capital programme, we had to borrow in 1979 over £1000 million. That amount equals to one-seventh of our entire national output.

The situation in regard to our trading with the outside world in 1979 was bad also. Our income from abroad fell short of what we had to pay out by about £760 million which led to a fall in our reserves.

To fully understand our situation, we must look not just on the home scene but also on the troubled and unstable world around us. There are wars and rumours or wars. There is political instability in some of the most important areas of the world. A very serious threat exists to the world’s future supply of energy. We can no longer be sure that we will be able to go on paying the prices now being demanded for all the oil and other fuels we require to keep our factories going and to keep our homes and institutions supplied with light, heat and power they need. We will, of course push exploration for our own oil ahead as rapidly as possible but in the short term the burden of oil prices will continue to be a crushing one.

All this indicates that we must, first of all, as a matter of urgency, set about putting our domestic affairs in order and secondly, improving our trade with the rest of the world on so far as we can do so.

We will have to continue to cut down on government spending. The government is taking far too much by way of taxes from individual members of the community. But even this amount is not enough to meet our commitments. We will just have to reorganise government spending so that we can only undertake the things which we can afford.

In trying to bring government expenditure within manageable proportions, we will, of course, be paying particular attention to the needs of the poorer and weaker sections of the community and make sure they are looked after. Other essential community expenditure will have to be undertaken also. But there are many things which will just have to be curtailed or postponed, until such time as we can get the financial situation right.

There is one things above all else which we can do to help get the situation right and which is entirely within our control. I refer to industrial relations. Any further serious interruption in production, or in the provision of essential services, in 1980 would be a major disaster. I believe that everyone listening to me tonight shares my anxiety about our situation in that respect.

Strikes, go-slows, work-to-rule, stoppages in key industries and essentials services, were too often a feature of life in 1979. They caused suffering and hardship; at time it looked as if we were becoming one of those countries where basic services could not be relied upon to operate as part of normal life.

Immediately following my election as Taoiseach, I received countless messages from all over the country from people in every walk of life, appealing to me to do something about this situation.

Let us clearly understand, however that this is not a one-sided affair. Managements that do not give first-class attention to their firm’s industrial relations, who ignore situations and let them drift into confrontation, are just as blameworthy as the handful of wild men who slap an unofficial picket and stop thousands of workers from earning their living.

Apportioning blame, however, is not going to get us anywhere. What we need is a new way forward and that is my primary purpose, as head of government, in talking to you tonight.
An Taoiseach, Charles J. Haughey, 9th January, 1980.
 

Question R24U

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In my view it is highly relevant in the current climate for a number of points he made, which still apply:
1. “... taking us all together, we have been living at a rate which is simply not justified by the amount of goods and services we are producing”. This remains the case.
2. He refers to the situation in regard to our trading with the outside world. This has not been mentioned much since 2001.
3. His reference to unstable world and need to “of course push exploration for our own oil ahead as rapidly as possible”. Shell to sea anyone?
4. His characterisation of government spending as “taking far too much by way of taxes from individual members of the community....We will just have to reorganise government spending so that we can only undertake the things which we can afford...But there are many things which will just have to be curtailed or postponed, until such time as we can get the financial situation right”. Move forward Budget Day 2010.
5. His call for industrial harmony. And his more balanced approach by attacking poor management as well would go down well now.
 

blacbloc

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I'm glad you raised this issue.

Shell to Sea are emphatically NOT trying to prevent oil and gas extraction. They are asking for two things: that the refining be done safely at sea as it is done in many other places and that an appropriate percentage of the revenue from oil and gas be retained for the citizens of Ireland! How ironic that you should bring this up, given it was under Haughey's watch that the whole fkking lot was given away! Just imagine how much better off we would be now if he and his fellow liar and thief Ray Burke had not done that.

There is NOTHING to stop the present government from putting its hand up and saying, 'we got this one badly wrong'. The deal with the oil companies is illegal. Responsible opposition parties should be howling to the rafters for reform of the terms.
 

Mitsui

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The actual content of this speech has never been the point that people took issue with, far as I know (apart from complete loo-lahs, that is). The reason people sneer at it (and will continue to do so) was the complete and totally hypocritical disconnect between the content and the self-serving git who delivered it. "Do as I say, not as I do" will always be a philosophy that attracts derision.
 

ballot stuffer

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I'm glad you raised this issue.

Shell to Sea are emphatically NOT trying to prevent oil and gas extraction. They are asking for two things: that the refining be done safely at sea as it is done in many other places and that an appropriate percentage of the revenue from oil and gas be retained for the citizens of Ireland! How ironic that you should bring this up, given it was under Haughey's watch that the whole fkking lot was given away! Just imagine how much better off we would be now if he and his fellow liar and thief Ray Burke had not done that.

There is NOTHING to stop the present government from putting its hand up and saying, 'we got this one badly wrong'. The deal with the oil companies is illegal. Responsible opposition parties should be howling to the rafters for reform of the terms.
So the Irish state will not get one red cent from Shell or have the ability to do so is that what you are saying?
 

blacbloc

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So the Irish state will not get one red cent from Shell or have the ability to do so is that what you are saying?
Absolutely. The government are charging a nominal 25% tax on it now. However the oil companies are allowed to offset any/all construction and set up costs for 25 years against this tax so they will end up paying nothing at all or a negligible amount. It's a total give away. We will have to buy our own oil and gas at full market rates like any other customers. Moreover, the 'security of supply' that the government talks about is nonsense too since the oil companies are under no obligation to sell the gas to Ireland.

We can't ask Haughey. But Ray Burke and Bertie Ahern should know all about it. It was signed off in 1992 when BA was Minister for Finance - during the same period that he was having all those money worries about Miriam and the kids - so maybe he didn't notice what was going on.
 

cactusflower

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The needs of the weaker and poorer were not looked after. They were left in ghettoes with no services, no policing and no access to jobs.

Haughey looked after himself and served the country up on a plate to be picked over by the wealthy.

He was in a way more dangerous than Cowen: that was a beguiling and lucid speech (although deceiving). No way could Cowen communicate so clearly.
 

adamirer

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I think the context it needs to be seen in is one of a washing of the hands. There no 'our bad'. The 77 election of FF led to economic ruin and while haughey 'said' the right thing, he didn't do it.

Dukes and Fitzgerald knew what needed to be done in the national interest, but Haughey would not put the nation before FF's goals, leading FG to try and muddle through with Labour, and the creation of the PDs by frustrated FF'ers and FG'ers. FF created the mess, but refused to help solve it, unless they got the credit.. it's sadly, as simple as that.

Many have explained this better, but the 1987 programme was essentially a FG plan, which Dukes told Haughey he'd support, if Haughey was willing to do the right thing. Haughey did.. for 2 years and then played silly politics with it.

The reality is, a speech is just a speech. Haughey said one thing but did another. His legacy would be far more respected had he acted like the Statesman he saw himself as, rather than the self indulgent party leader he behaved as.
 

Question R24U

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That is a bit too FG candy coated for my liking.
I think the context it needs to be seen in is one of a washing of the hands. There no 'our bad'.

The 77 election of FF led to economic ruin
Is this not an overly simplictic version of economic history? Would the re-election of FG-Labour have saved us from the oil crisis and the ramping up of current public sector spending?



and while haughey 'said' the right thing, he didn't do it.
It took him 7 years to do it. But he did do it.

Dukes and Fitzgerald knew what needed to be done in the national interest,
but they didn't do it.

but Haughey would not put the nation before FF's goals, leading FG to try and muddle through with Labour, and the creation of the PDs by frustrated FF'ers and FG'ers.
Can Richard Bruton or George Lee save the nation from the opposition benches? (there are obvious overtones to the present but they should be let lie). Currently, the opposition have, in fairness, produced general plans for recovery, but they lack any detail to make them credible. They have also opposed specific cuts in an opportunistic manner (though not to the same scale as Nov 82 to Mar 1987).


FF created the mess, but refused to help solve it, unless they got the credit.. it's sadly, as simple as that.
Nothing is ever as simple as that. But generally, credit goes where it is due (Haughey 87 to 92, Reynolds 93 to 94, Bruton 94 to 97, and even Ahern 1997 to 2002) as does discredit (ie Lynch 77 to 79, Haughey and Fitzgerald 79 to 87 and Ahern 2002 to 2007).

Many have explained this better, but the 1987 programme was essentially a FG plan, which Dukes told Haughey he'd support, if Haughey was willing to do the right thing. Haughey did...
I would dig out that better explaination, because that reeks of rose tinted glasses. It really does not matter who comes up with the plan, but who implements it.



...for 2 years and then played silly politics with it.
Can you elaborate on this?

The reality is, a speech is just a speech.
Indeed and it was hardly on the "I have a dream.." scale of things. It was given at the outset of the 1980's - it took 3 changes of government and 7 years to put it into practice. It may have set the tone for the '80s, or as he called it the decade of endeavour and it is clear, set out in terms which a child can understand, whereas now there is just a muddle.
 

dmc444

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Haughey correctly indentified the problems in that speech but did a complete u-turn and increased taxes and borrowing but in fairness Lynch left him a terrible mess.

In 1982 Haughey launched the way forward, which led to the fall of his government but it did detail the tough measures that needed to be taken.

1987-92- I think was one of our greatest governments and i think a fine moment for Fine Gael too, Now matter what you think about Haughey, he brought Ireland back from the brink and led this nations to massive prosperity.
 
A

AMCW177

I think the real point of this speech is that in 30 years we've gone absolutely nowhere! We're almost right back where we started - and if the FDI starts to leave in the coming months then in 2010 we really will be exactly where we were in 1980, except with a few hundred billion in additional debt.

FF need to be completely eradicated or we'll just keep going on this merry-go-round forever.
 

Question R24U

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I think the real point of this speech is that in 30 years we've gone absolutely nowhere! We're almost right back where we started - and if the FDI starts to leave in the coming months then in 2010 we really will be exactly where we were in 1980, except with a few hundred billion in additional debt.
.
What are talking about? The economy is four times the size it was in 1987. It is through silly points like this, when believed and then disproved, which serve to ensure the same economic management is repeated.
 

blacbloc

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What are talking about? The economy is four times the size it was in 1987. It is through silly points like this, when believed and then disproved, which serve to ensure the same economic management is repeated.
But the eocnomy is contracting rapidly. The whole thing was just a bubble. Nothing durable was achieved. We will be back to where we were very shortly.
 

adamirer

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The reality, and without the rose tinted FF view, was That both FF and FG recognised tough measures needed to be taken, but FF wouldn't support FG trying to take them and opportunistically attacked them at every corner.

When FF got in, FG did the honoourable thing and supported the measures, something Haughey wouldn't do in opposition. One placed doing the right thing over power, once placed power over the right thing.

If Haughey had the moral courage to do the right thing, and do a Dukes in 1982, the mess would have been over a lot quicker. But when did FF ever put the nations interest before its own.

The 1987-92 government implented FG policies and all of Haughey, Dukes, Bruton, McSharry and later O'Malley & co are due some credit, but don't candy coat it. FF in 1977 bought the election without oytlandish promises that ruined the country and FF acted very slowly in taking the measures required to resolve the problem.
 

dmc444

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Haughey published the Way Forward in 1982 which detailed a plan for economic recovery and this led to the workers party withdrawing support from the government and Did Fitzgerald support the goverment in tackling the economy? No, Fitzgerald brought the government down.

Sorry but if FG did always put the country first then why didnt Fitzgerald stand up to Dick Spring from 1983-87?
 
A

AMCW177

What are talking about? The economy is four times the size it was in 1987. It is through silly points like this, when believed and then disproved, which serve to ensure the same economic management is repeated.
By the time the 30-40% total contraction in GDP plays out, and adjusting for inflation since 1980, we'll be no further forward.

You still don't get it. It. Was. A. Bubble.

A mirage, funny money, smokes and daggers, a three-card-trick, a scam, con-job, snake-oil, cooked books, palms greased, creative accounting, not real, made up, fiction, imaginary, hallucinagenic, smoke in a bottle.
 

Question R24U

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But the eocnomy is contracting rapidly. The whole thing was just a bubble. Nothing durable was achieved. We will be back to where we were very shortly.
The economy would have to contract by 10% for seven consecutive years to be twice the size of the 1987 economy! Can you provide any credible source to substantiate your point that 1987 to 2002 was 'just a bubble'?

In relation to Haughey only implementing FG policies - I would have thought it more to FG'S discredit that they could not get them through and had to wait for someone else to rob their clothes. There is no copyright in politics and the only way of checking success is a government's record and the vote of the People in an election. Haughey was judged well in 89 as the dail re-elected him and the economic turnaround occurred it that 5 years. He implemented what he had set out in the above speech.

As for support of opposition - it remains open for fg to usurp an bord snip nua with its own cuts, it could suggest 4bn worth of cuts, it could have provided political cover on the pensions levy. No reasonable person would accuse richard bruton or enda kenny of abdicating political responsibility by failing to do there things. Why the double standard with haughey?

(i also think that if dr fitzgerald had delivered the above speech, that no one would offend by mentioning his living beyond his means in 93 after his involvement with share deals, preferential bank loans and write-offs and the speech would be hailed as a vision of economic salvation)..
 

Question R24U

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By the time the 30-40% total contraction in GDP plays out, and adjusting for inflation since 1980, we'll be no further forward.

You still don't get it. It. Was. A. Bubble.

A mirage, funny money, smokes and daggers, a three-card-trick, a scam, con-job, snake-oil, cooked books, palms greased, creative accounting, not real, made up, fiction, imaginary, hallucinagenic, smoke in a bottle.
GDP growth or contraction figures already have inflation or deflation factored in. Your criticism of me, not getting it, is somewhat undermined.
 

Question R24U

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What if Dr. fitzgerald had delivered the speech instead, would it be hailed as a receipe for saving the nation or just simply a footnote? Is the speech only remembered for the personal hypocracy rather than its content?
 
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