Irish public to rescue its bankers - why?

Posted on Friday, November 26, 2010 at 08:30 AM

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At what point, I wonder, will the penny drop? The rest of Europe is looking on with incredulity as the average Irish citizen - instead of protesting - just shrugs.

There have been no shattering public protests, no riots, just - for the most part - sad acceptance. So far.

Why? Why are they going so quietly?

Today, in The New York Times, economist Paul Krugman writes that Ireland's bailout seems to be mostly about the government imposing even more pain on its people, in exchange for a credit line. "But it’s a strategy that isn't working," he says simply

"Before the bank bust," Krugman writes, "Ireland had little public debt. But with taxpayers suddenly on the hook for gigantic bank losses, even as revenues plunged, the nation’s creditworthiness was put in doubt. So Ireland tried to reassure the markets with a harsh program of spending cuts."

"Step back for a minute and think about that. These debts were incurred, not to pay for public programs, but by private wheeler-dealers seeking nothing but their own profit. Yet ordinary Irish citizens are now bearing the burden of those debts."

These so called confidence building measures have not built confidence. In fact all the economic austerity is depressing the Irish economy, and investors are now fleeing. So why are we taking the pain?

"Ireland is now in its third year of austerity, and confidence just keeps draining away," writes Krugman, who invokes the savage indignation of Irish writer Jonathan Swift to make this point. "And you have to wonder what it will take for serious people to realize that punishing the populace for the bankers’ sins is worse than a crime; it’s a mistake."

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killowen | Nov 26, 2010, 09:24 PM EST

the manipulated sheep always bleats to little effect. Too much turning of the other philosophy which renders 'em easy pickings and brain deads.

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Economythoughts | Nov 26, 2010, 05:45 PM EST

Oh, by the way, if you want to find out who is guilty for this crime of lesa humanidad, just follow the money and look at who benefits!

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Economythoughts | Nov 26, 2010, 05:42 PM EST

It is really very simple, governments DO NOT have the right to transform private debt into public debt and instantaneously transform its citizens and their progeny for generations in to pauper. That right is given to them by the acquiescence of the governed people that by their silence, accept the burden of a debt that is not and should not be theirs. Paul Krugman and I dissent in many things (see Economythoughts@wordpress.com for details), but not on this. The behavior of Ireland's government and mostly of its people is condemning the Country to poverty for many generations, since not only the decision is a criminal one toward human rights, but the wrong one from an economic point of view. It will never work. Ireland is in positive feedback loop towards reduced economic activity and the gain of the feedback loop has just been increased by the conditions that the new loans impose on the Country.

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hollabackgurl | Nov 26, 2010, 01:57 PM EST

The government and the bankers ran Ireland like a high stakes casino. When disaster struck in Iceland they threw out the government and the corrupt bankers, put the former Prime Minister on trial and told the bond holders to take a hike. Ireland should do likewise.

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seamusmoore | Nov 26, 2010, 01:41 PM EST

Everyone wants to throw the bankers in jail but what specific laws did they break? If they broke specific laws, let them pay the penalty; however, bad business judgment and stupidity are not jailable offenses. Are the developers who borrowed the money that they now can't repay not equally culpable? The wealthiest man in Ireland back in 2007 was Sean Quinn,who lost over $1 billion in Anglo-Irish Bank when he bought a 25% interest in it in 2007-8. Bank regulation and oversight clearly needs to be overhauled but ex-post facto laws are a clear indicator of a banana republic.

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mhichil | Nov 26, 2010, 01:16 PM EST

not to worry, the world is a small place, we know Who and where all our bankers and government people work and live. They have to leave their building sometime and the laws of retribution and karma are eternal. Ya know what happens when someone steals a neighbors bull now, doncha? complacent my ares, civil maybe.

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hollabackgurl | Nov 26, 2010, 12:38 PM EST

These private 'wheeler-dealers" should be in jail. Irish bank regulations should be rewritten. The Irish political class who allowed it should be thrown out. But the poor people of Ireland should not be stuck with the bill.

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Paulinebyrne | Nov 26, 2010, 11:03 AM EST

Its just more of the same, Bankers just about brought the world economy to its knees, look at it to-day, it is business as usual. It is incredible that these institutions are allowed to continue on their merry way, with maybe a slight reduction in their bonus. You and I pay the consequences, if you dont pay your wages are garnished, that is if you are lucky to have a job, then they seize assets, finally you are bankrupt, out on the street with nothing. What is wrong with people? It is time to change our system.

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Searlit | Nov 26, 2010, 10:54 AM EST

It's the relationship between the bankers and the taxpayers that causes the trouble. If we are all in this together then we have to negotiate a better deal for all of us, otherwise the abuse in the relationship continues... @ Portia777: Something eternal can't be lost or broken, it can be transferred or transformed - it still lives.

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Portia777 | Nov 26, 2010, 09:39 AM EST

Because the puppets from outside Ireland have always controlled the strings for centuries.The Greedy bankers should be in jail. The destruction of TaRa was the real beginning this time around, but the people of Eiru have forgotten who they really are, broken down by the men of Rome and the British, forced to become Catholics and patricks/patriarchs, had their history changed, brainwashed that money and greed were good for the country. The most of them sold their souls and now all is dead and barren. All in accordance with the law of the Universe.

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