Would a Mullingar Accord Government Have Handled The Bailout and The Economic Downturn Differently?

General Urko

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As it says on the tin, If Kenny and Rabbitte formed a Government post 2007 GE, would the absolute disaster that actually unfolded been handled diferently?
I think it's hard to imagine that for all their faults The Blueshirts and Red Blueshirts could have done worse than Biffo's Crew, it would be nearly an impossible achievement to emulate, once you're at the level of lowering the minimum wage and reducing the blind person's pension, it's virtually lowest of the low stuff!
Also once The Troika came in, there should have been another GE, as the administration in place had lost all authority to govern/misgovern!
Ultimately, the equation of Irish Politics is Fg + Lab = FF, but even with that, it couldn't have been as bad!
 


wombat

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As it says on the tin, If Kenny and Rabbitte formed a Government post 2007 GE, would the absolute disaster that actually unfolded been handled diferently?
Certainly but we would have perpetual FF govt thereafter.
 

General Urko

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Certainly but we would have perpetual FF govt thereafter.
It was the election to lose, alright.
And the issue is that FF suit The Irish Mentality, so are much more easily forgiven harsh decisions and misgovernment than any of the others and of course any amount of 'indiscretions'!
 

RadicalJacobin

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Its hard to imagine that any of that crowd would have done differently, the real question would come down to could it have been worse. I doubt it personally. The crisis was years in the making, combining all of our collective hubris and smug sense of "we know better" which meant warning signs were ignored. Unfortunately regardless of who was in power it was always the poor and middle class who would shoulder the gambles of the rich. 2011 was a time for real change in this country, too bad Fine Gael and Labour were the alternative that we chose.
 

General Urko

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Its hard to imagine that any of that crowd would have done differently, the real question would come down to could it have been worse. I doubt it personally. The crisis was years in the making, combining all of our collective hubris and smug sense of "we know better" which meant warning signs were ignored. Unfortunately regardless of who was in power it was always the poor and middle class who would shoulder the gambles of the rich. 2011 was a time for real change in this country, too bad Fine Gael and Labour were the alternative that we chose.
SEveral good points made there, but in reality we had to get rid of Biffo's Gang to such an extent that the other 2 main Troika Parties were the only alternative, it's a pity the Labour Party firmly established themselves as The Red Blueshirts, effectively The Blueshirt C team, in the subsequent administration!
In fairness to him, Enda will not be remembered as having been the worst Taoiseach!
 

devoutcapitalist

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I think the damage had been done by 2007, Fine Gael should be glad they lost in 2007.

It would have been better for Ireland if FG had won the 1997 election.
 

kimari

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dont like it
I suppose it all depended on the price how much does it cost to fxck your country over
 

General Urko

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I think the damage had been done by 2007, Fine Gael should be glad they lost in 2007.

It would have been better for Ireland if FG had won the 1997 election.
I agree!
 

automaticforthepeople

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Labour and FG would have collapsed politically at the 2011 General Election. SF would have reached their political plateau of 19% earlier and Gerry Adams would now be the Leader of the Opposition.

We'd now be in the 7th year of a FF single party majority government led by Brian Cowen with the drinks cabinet topped up with Dempsey, O'Dea, O'Cuiv and Cullen giving welly to the developers who saved the state from Rabbitte and Kenny.

Ahern would of course have been elected President in 2011 and he'd be a cert for re-election.

Never for one second forget that things in this country could be infinitesimally worse
 

devoutcapitalist

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Labour and FG would have collapsed politically at the 2011 General Election. SF would have reached their political plateau of 19% earlier and Gerry Adams would now be the Leader of the Opposition.

We'd now be in the 7th year of a FF single party majority government led by Brian Cowen with the drinks cabinet topped up with Dempsey, O'Dea, O'Cuiv and Cullen giving welly to the developers who saved the state from Rabbitte and Kenny.

Ahern would of course have been elected President in 2011 and he'd be a cert for re-election.

Never for one second forget that things in this country could be infinitesimally worse
I don't think a FG led government in 2007 would have lasted until 2011, Labour would probably have pulled the plug in 2009 as FG would have insisted on public sector pay cuts which Labour would probably have opposed.
 

SPN

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As it says on the tin, If Kenny and Rabbitte formed a Government post 2007 GE, would the absolute disaster that actually unfolded been handled diferently?
How much differently could it have been handled?

300,000 people depended on a bank lending bubble for their income.

One third of tax revenues depended on a bank lending bubble for their existence.

One third of Government spending depended on a bank lending bubble for their existence.

Once the bank lending bubble ended, all of the above ended too.




I think it's hard to imagine that for all their faults The Blueshirts and Red Blueshirts could have done worse than Biffo's Crew, it would be nearly an impossible achievement to emulate, once you're at the level of lowering the minimum wage and reducing the blind person's pension, it's virtually lowest of the low stuff!
One third of tax revenues disappeared.

How would you have handled it differently.



Also once The Troika came in, there should have been another GE, as the administration in place had lost all authority to govern/misgovern!
There was a GE.

The outgoing Government set up a Troika deal of €50 Billion for Government overspending, €2.5 Billion for recapitalising the banks, and €15 Billion as a reserve in case the banks needed even more capital in the future.

The incoming Government changed this to €65 Billion for Government overspending, €2.5 Billion for recapitalising the banks, and SFA in reserve.



Ultimately, the equation of Irish Politics is Fg + Lab = FF, but even with that, it couldn't have been as bad!
What could have been done better.
 

Odyessus

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Labour and FG would have collapsed politically at the 2011 General Election. SF would have reached their political plateau of 19% earlier and Gerry Adams would now be the Leader of the Opposition.

We'd now be in the 7th year of a FF single party majority government led by Brian Cowen with the drinks cabinet topped up with Dempsey, O'Dea, O'Cuiv and Cullen giving welly to the developers who saved the state from Rabbitte and Kenny.

Ahern would of course have been elected President in 2011 and he'd be a cert for re-election.

Never for one second forget that things in this country could be infinitesimally worse
"Infinitesimally worse" means "an extremely tiny amount worse". "Infinitely worse" means "worse in an unlimited measure".


I assume from the tone of your post you mean the latter.
 

Brera

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The damage was done long before 2007 but having said that how things unfolded could have been handled differently. The great unknown is would it have changed the outcome ?

We would have had to deal with the deficit regardless but how we dealt with the banking crisis could have been different.

I remember watching coverage of the Dáil prior to the bank guarantee and Richard Bruton was looking for action, which Cowan & Lehihan dismissed and then they went off on holidays.

Maybe if Bruton or Rabbitte had been finance minister the banking crisis would have been handled differently. I suspect we wouldn’t have had the bank gurantee for example or could they have let Anglo collapse.

I also often wonder would an FG/Lab Government have gotten a different deal from Brussels. Government ministers at the time had a poor track record of engagement with the EU, while Cowan and Lenihan failed to grasp the gravity of the situation until it was too late. Forcing them into making unilateral decisions like the bank gurantee in the middle of of the night, which scarred the crap out of Brussels and the ECB.

Maybe if we had a government that had tried to get on top of the banking crisis earlier and engaged with Europe more directly, it could have resulted in a better outcome.
 

SPN

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The damage was done long before 2007 but having said that how things unfolded could have been handled differently. The great unknown is would it have changed the outcome ?
The most significant problem we had to deal with was the ending of the bank lending bubble, upon which so much of our (apparent) economic prosperity, and Government spending, was predicated.

I'm not seeing any "handled differently" option that could have mitigated the €20 Billion drop in tax revenues.



We would have had to deal with the deficit regardless but how we dealt with the banking crisis could have been different.
How?



I remember watching coverage of the Dáil prior to the bank guarantee and Richard Bruton was looking for action, which Cowan & Lehihan dismissed and then they went off on holidays.
What could have been done at that stage?

Once we got to 2003 we were locked into the path of economic collapse.



Maybe if Bruton or Rabbitte had been finance minister the banking crisis would have been handled differently. I suspect we wouldn’t have had the bank gurantee for example or could they have let Anglo collapse.
The Bank Guarantee(s) brought in revenues of €4.5 Billion. Only €1.5 Billion was paid out under the Guarantee(s).

Letting Anglo collapse would have had massive repercussions throughtout the economy of it happened in ordinary times. If it was allowed to collapse after Lehmans happened it would have taken down all the other Irish Banks, destroyed large swathes of the productive economy, and would have caused speculators to bet against other weak banks right across Europe and the World.

It would have been a spectacularly stupid thing to do.

The time to stop Anglo was in 2002-2004. After that the repercussions would have been disastrous, economically, socially, and politically - if any politician might have been stupid enough to kill the golden goose.


I also often wonder would an FG/Lab Government have gotten a different deal from Brussels. Government ministers at the time had a poor track record of engagement with the EU, while Cowan and Lenihan failed to grasp the gravity of the situation until it was too late. Forcing them into making unilateral decisions like the bank gurantee in the middle of of the night, which scarred the crap out of Brussels and the ECB.
The Irish Government was the first Government to be faced with the prospect of a complete economic collapse due to the failure of the liquidity markets after the implosion of Lehmans. They took a very pro-active and brave stance. It worked.

The following week the UK realised that it faced the same problem. They took a very similar approach.

The following week the EU realised that it faced the same problem. They took a very similar approach.

Liquidity was to be provided by the ECB (thereby replacing the Irish Government Guarantee to provide liquidity).

New Capital was to be provided by the respective States.



Maybe if we had a government that had tried to get on top of the banking crisis earlier and engaged with Europe more directly, it could have resulted in a better outcome.
Getting on top of the banking crisis earlier would have meant putting 300,000 people out of work, putting hundreds of thousands of people into negative equity, bankrupting every builder, developer, property owner and building services company, cutting the pay, perks and pensions of public sector workers by one third, cutting social welfare and other Government spending programmes by one third, and bankrupting the banks.

The outcome would have been the very same, except some politician would have gone down in history as having taken the decision to wreak carnage on the economy/society.

Much better to be able to blame the collapse of Lehman Bros.
 

Nipper

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The most significant problem we had to deal with was the ending of the bank lending bubble, upon which so much of our (apparent) economic prosperity, and Government spending, was predicated.

I'm not seeing any "handled differently" option that could have mitigated the €20 Billion drop in tax revenues.





How?





What could have been done at that stage?

Once we got to 2003 we were locked into the path of economic collapse.





The Bank Guarantee(s) brought in revenues of €4.5 Billion. Only €1.5 Billion was paid out under the Guarantee(s).

Letting Anglo collapse would have had massive repercussions throughtout the economy of it happened in ordinary times. If it was allowed to collapse after Lehmans happened it would have taken down all the other Irish Banks, destroyed large swathes of the productive economy, and would have caused speculators to bet against other weak banks right across Europe and the World.

It would have been a spectacularly stupid thing to do.

The time to stop Anglo was in 2002-2004. After that the repercussions would have been disastrous, economically, socially, and politically - if any politician might have been stupid enough to kill the golden goose.




The Irish Government was the first Government to be faced with the prospect of a complete economic collapse due to the failure of the liquidity markets after the implosion of Lehmans. They took a very pro-active and brave stance. It worked.

The following week the UK realised that it faced the same problem. They took a very similar approach.

The following week the EU realised that it faced the same problem. They took a very similar approach.

Liquidity was to be provided by the ECB (thereby replacing the Irish Government Guarantee to provide liquidity).

New Capital was to be provided by the respective States.





Getting on top of the banking crisis earlier would have meant putting 300,000 people out of work, putting hundreds of thousands of people into negative equity, bankrupting every builder, developer, property owner and building services company, cutting the pay, perks and pensions of public sector workers by one third, cutting social welfare and other Government spending programmes by one third, and bankrupting the banks.

The outcome would have been the very same, except some politician would have gone down in history as having taken the decision to wreak carnage on the economy/society.

Much better to be able to blame the collapse of Lehman Bros.
The problem is this

The steering committee of dept of finance, central bank etc had been firefighting liquidity issues in certain Irish banks since 2007, meeting weekly

One of these banks went bust in march 08

The head of this bank rang the minister for finance who immediately told the Taoiseach

The solution this bank used was to arrange a fraudulent transaction with another bank

This was a green jersey agenda e we were told (apparently a pj meara phrase)

A similar transaction six months later has been found to have been fraudulent and criminal

At this time the government and central bank were being lobbied to introduce the garauntee to cover Anglo, by Anglo customers

The bank garauntee was a conspiracy to profit those involved in a bank that was involved in massive fraud

It might have been to late to save us , but at what point do we stop allowing the same people who bribed haughey and Lowry from using the state as their piggy bank
 

GDPR

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As it says on the tin, If Kenny and Rabbitte formed a Government post 2007 GE, would the absolute disaster that actually unfolded been handled diferently?
I think it's hard to imagine that for all their faults The Blueshirts and Red Blueshirts could have done worse than Biffo's Crew, it would be nearly an impossible achievement to emulate, once you're at the level of lowering the minimum wage and reducing the blind person's pension, it's virtually lowest of the low stuff!
Also once The Troika came in, there should have been another GE, as the administration in place had lost all authority to govern/misgovern!
Ultimately, the equation of Irish Politics is Fg + Lab = FF, but even with that, it couldn't have been as bad!
" Biffo's Crew", mostly Brian Lenihan, solved the problem before they left office, all anyone then had to do was follow the plan as laid out.

The problem wasn't the 2007 Government, it was in part the 2002 government, but as you just demonstrate if you don't understand the problem, you're unlikely to learn the necessary lessons or come to any useful conclusions.
 

SPN

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The problem is this

The steering committee of dept of finance, central bank etc had been firefighting liquidity issues in certain Irish banks since 2007, meeting weekly

One of these banks went bust in march 08

The head of this bank rang the minister for finance who immediately told the Taoiseach

The solution this bank used was to arrange a fraudulent transaction with another bank

This was a green jersey agenda e we were told (apparently a pj meara phrase)

A similar transaction six months later has been found to have been fraudulent and criminal

At this time the government and central bank were being lobbied to introduce the garauntee to cover Anglo, by Anglo customers

The bank garauntee was a conspiracy to profit those involved in a bank that was involved in massive fraud

It might have been to late to save us , but at what point do we stop allowing the same people who bribed haughey and Lowry from using the state as their piggy bank
Agreed.

But at that stage the landmine was already primed.

300,000 people depended on the bank lending bubble for their income.

The public sector and social welfare recipients depended on the bank lending bubble for one third of their income.

No matter what anyone was to do, the implosion that followed the collapse of Lehman was always going to happen, no matter what route was taken.

There was no easy way out of our utter dependence on a massive flow of cheap easy money coming from the banks.

From memory, the nett new lending in 2006 was €60 Billion. In 2007 it was €67 Billion.

In 2010 it was minus €10 Billion.



Lets look at a different scenario at the end of September 2008.

Imagine if the ECB liquidity regime that was introduced on October 13th had been introduced on September 13th.

No need for a Guarantee.

Imagine if some mechanism had been put in place to keep bank balance sheets and share prices in suspended animation after the collapse of Lehman.

This would have meant no "bank crisis" as we have come to understand the term.


But the collapse of Lehman meant the end of the cheap money that was pouring into the Irish economy.

It meant that the €67 Billion of new money in 2007 would not be followed by a €77 Billion of new money in 2008, or an €87 Billion of new money in 2009.

Instead of €87 Billion nett new lending in 2009 we had minus €10 Billion of nett new lending in 2009.

That's €97 Billion of expected money gone out of the economy.

Without this new money the 300,000 jobs were gone.

The >€20 Billion of windfall tax revenues were gone.

Support for house prices was gone (so negative equity).

All the problems we faced since 2008 were down to the ending of the lending.


The bank liquidity and recapitalisation issues, while real, are actually only a sideshow.

It was the turning off of the tap of never ending increases in cheap money flowing into the economy that did for us.
 

SPN

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The problem wasn't the 2007 Government, it was in part the 2002 government,
The 2002 FFuktard Government was totally the problem.

They were the ones who allowed things to get totally out of control.


but as you just demonstrate if you don't understand the problem, you're unlikely to learn the necessary lessons or come to any useful conclusions.
Oh, the irony.
 

wombat

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It was the election to lose, alright.
And the issue is that FF suit The Irish Mentality, so are much more easily forgiven harsh decisions and misgovernment than any of the others and of course any amount of 'indiscretions'!
Everybody involved in construction knew by 2006 that it was slowing down and a lot voted for FF in the expectation that they would protect their mates and save the building industry. An awful lot of people were dependent on the property market in 2007 and voted accordingly. There was also the fact that the entire leadership of FG had been removed from the Dail in 2002 meaning that they were offering inexperienced TDs to handle the growing problems.
 

The Rahenyite

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As it says on the tin, If Kenny and Rabbitte formed a Government post 2007 GE, would the absolute disaster that actually unfolded been handled diferently?
I think it's hard to imagine that for all their faults The Blueshirts and Red Blueshirts could have done worse than Biffo's Crew, it would be nearly an impossible achievement to emulate, once you're at the level of lowering the minimum wage and reducing the blind person's pension, it's virtually lowest of the low stuff!
Also once The Troika came in, there should have been another GE, as the administration in place had lost all authority to govern/misgovern!
Ultimately, the equation of Irish Politics is Fg + Lab = FF, but even with that, it couldn't have been as bad!
Kenny not getting into office in 2007 was a blessing for him and Fine Gael, a bit like UK Labour not winning the 1992 UK general election with the subsequent economic downturn and Black Wednesday. A Mullingar Accord government may not have lasted long, perhaps 2 or 3 years, and Fianna Fail losing the election on mid to high 30s would have experienced a huge poll bounce after the crash with Brian Cowen as leader being heralded as the economic messiah returning to save us as Taoiseach with a huge FF majority.
 


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