David Higgins

It’s RTÉ radio 1 on a Friday morning and the nation is listening to a discussion on NAMA. In the blue corner is George Lee, one of Fine Gael’s top economic spokesmen. He’s certain to have a cabinet position after the next election and he knows his stuff when it comes to the banks.

Then the green corner, Fianna Fáil. Fine Gael have a heavy-weight out, surely the government will send either a minister, a junior minister or a Green Party TD to debate. No, all they gave us was Frank Fahey! He quite incorrectly described George Lee’s proposals as “11th hour” when all the proposals were made by Fine Gael before George Lee was even a politician, earlier this year. Also considering Fahey is deep in investor circles means he’s not exactly the most appropriate person to debate the NAMA legislation. See here for more information on his conflicts of interest in property and investments.

The most worrying part of this discussion was when Frank Fahey was asked about the property market. He was asked whether the market would rebound. His response was most worrying. “It has already started……”!

Also equally disturbing and alarming was his attitude to spending a suggested 30 billion euro of taxpayers money.
“It’s not. It is ECB money which will be borrowed at one and a half per cent”.

What planet is this guy from?

The Galway West TD was one of the many unknown TD’s we saw this week out to debate NAMA. Where’s the Taoiseach, where’s Brian Lenihan? To be fair the Minister for Finance did make an appearance mid-week to respond to Fine Gael’s bank proposals however it’s clear by the inaction of the rest of the cabinet that NAMA isn’t up for discussion, that it’s a done deal.

It’s not, and the protests scheduled for September 12th and 19th will prove that the public don’t see it as a done deal.

The American dream is quite simple. It’s only complete if you own a house. Renting is inferior and there’s no greater feeling than paying off your last mortgage payment in your 50s. The Kids have moved out and you and your spouse can enjoy retirement in peace with no financial worries.

The Celtic Tiger born Irish dream was quite similar. It also required that you own a house and renting was a frowned upon immigrant activity. Funny how things had changed from the days where up to 10 Irish guys would rent out flats in London during the 1980s.

As a result of this ‘own a house binge’, people paid huge prices for houses they couldn’t afford. They took out 40-year mortgages that they will be paying back long after they’re retired. Now most of these properties have devalued and many people find themselves in negative equity.

Today it was announced by property site daft.ie that rent prices nationwide have dropped by 15-20%. The highest drop was in Dublin of 20%. This compared with a fix rate mortgage is a huge saving and compared with a tracker or flexible rate it is still a substantial difference.

During the Celtic Tiger rents were high due to the lack of demand however it surprises me that people didn’t do so in order to avoid dangerous mortgages. People knew the property market was going to the wall yet people still threw fuel on the fire. It would have made perfect sense to rent in the past 5 years as all indications were that the prices would eventually go down.

Agencies like the Financial Regulator not only failed in “Regulating” the banks but their personal finance ads made famous by the quote “I don’t know what a tracker mortgage is” failed in advising consumers about the impending implosion of the property market.

This drop in rents is good news for consumers and a welcomed bad news for landlords who made millions on rents during the celtic tiger. The drop is due to greater competition and an increased demand for renting. It’s also good for those wishing to find accommodation for college and for those getting their first house or apartment.

However it a slap in the face for those conned in the so called prosperity of the past few years.

Today the government launched it’s legislation to set up NAMA – the national asset management agency.

This was met by many sound-bites from the opposition and the most of these were seen on the RTÉ 6.1 News. Arthur Morgan of Sinn Féin and Rurai Quinn of Labour both gave their reactions. They were negative and they highlighted the risks involved to the taxpayer. They also, however, drew attention to their own beliefs. They both want to nationalize the banks. Both were vocal on this however Richard Bruton failed to outline the Fine Gael plans.

Instead he gave another opposition style bashing of the government while providing no alternative. Even though we do have an alternative.

It’s very simple. The government wants a bad bank, we want a good bank. Richard Bruton himself wrote our policy document on it, yet he didn’t mention it tonight and it is rarely mentioned by anyone else in Fine Gael either. It must be publicized that we do have policies and we do have a plan for this country.

I think Richard Bruton should be the party leader however he needs to be more vocal on how we would do things. This goes for everyone Fine Gael member in the Oireachtas.

I believe that if Kenny steps down then the front bench would be an unstoppable team of Bruton as taoiseach and George Lee as the Finance Minister. We could even achieve an overall majority in the Dáil. Kenny is the only thing standing in the way.

Today Bank Of Ireland workers went on strike over pay. They are claiming for performance related pay promised to them before the financial crisis. The Bank says that it can’t afford this due to the recession and the fact that the country is experiencing deflation. For once the Bank is right!

Many workers will see this as a stand against the big bankers who were reckless however remember that everyone has recapitalised BOI and so if a pay rise is given that would be our money.

There is absolutely no scope for pay rises in any sector, especially in the financial sector which is the highest paid section of the private sector.

Deflation means that there is scope for everyone in the country to take around 5% pay cut.

However many people are indifferent when they are told that prices are dropping.

Oh well lots of things have gone up

If we’re experiencing 3% deflation then we’re experiencing 3% deflation, no ifs or buts! Some things have gone up but more things have gone down and it has resulted in savings for the consumer. Therefore anyone who wants a pay rise is greedy (read my post on electricians for more).

I think all those who begrudge bankers should take comfort in that the majority of bankers are feeling the pain that many presume they deserve.

Ok, maybe I’m making a meal out of nothing but this is just another example of government incompetence.

Today Taoiseach Brian Cowen is opening a new stretch of the M6 between Athlone and Ballinasloe. All the speed limit signs on the new dual carriageway currently display 100km/h however in 36 days the road will be designated a motorway with a 120km/h speed limit. To allow this, all the signs must be replaced!

Thankfully a large protest at the event ensured it wasn’t the usual cosy cutting of tape affair.

One thing that I had found astonishing was the use of signage for the National Development plan. Everywhere you go across the country there are signs like the one above for projects that were finished a long time ago, under the 2000-2006 project.

Many of these signs are also very inappropriately placed. One I saw recently was a huge sign for the national broadband scheme. It was on the main street of a rural town. There is no central place for broadband and you definetly couldn’t see any work happening so it really was a pointless sign. Nobody passing through cares that you have broadband and the local residents surely don’t need to be reminded.

There are huge political implications from these signs. The centre text reads “Funded by the Irish Government”. These signs are Fianna Fáil posters in disguise!

There’s even one of these signs in my school grounds. It refers to our school’s extension. Again like the above sign it only quotes the EU and the government as funders. In my school we fundraised tirelessly to raise the money needed however no government sign is acknowledging this!

Another sign that I feel is redundant are the Special Olympics 2003 signs. These dot the countryside in every town that hosted athletes from different countries. These signs were great at the time and the idea for each town to house a country was a very successful exercise. It’s the only decentralisation plan that the government has to its credit. However these signs are now confusing to tourists and to the younger population who don’t know about the event 6 years ago.

All these useless signs should be sent to the scrap heap and they should be made to better use elsewhere.

Today should have been the governments day. Big Announcement, invite the press and attach Eamonn Ryan’s grin to his face. The story was big, 50 Technology Jobs and 300 from a new upcoming tech firm. All went to plan however it’s place in the headlines was soon to be lost later in the day.

By the evening news nearly 300 jobs had been shed at Intel, Ireland’s largest multinational. Previous redundancies were to be mandatory however a drop in demand for their services has been blamed for this mandatory cut of posts.

300 jobs created, 300 jobs lost all in one day.

I find it hard to believe that Intel has seen a drop in sales. On this same day Apple has announced another record profit!

The American tech giant shipped 2.5 million Macs in its 3rd quarter and they all contain Intel chips.

5 million Iphones and 10 million iPods also helped Apple see it’s best non holiday quarter in history. Apple really is a company that knows how to ride out the recession.

It makes me wonder whether Apple will lower its prices anytime soon. I forked out €1200 for this MacBook that I’m writing on and their phone would set me back half of that!

I bought my laptop during the boom however I can’t even envisage myself getting a new iPod in these times and there are many other people who are even more strapped for cash. How then does Apple produce an $8 billion profit?

The answer, I don’t know!

I’m middle class, I know it. Even before the crisis I was aware of the privileges that people in Knocklyon had over the likes of Tallaght or Finglas. Then the recession hit and I saw it as a positive thing for the middle class, a chance to get our heads out of the sky. To stop buying big cars and investment properties. To stop living beyond our means!

For the most part this has happened. Consumer spending is down and the housing market is gone, however there’s one thing that hasn’t left us, Holidays!

Everyday this week as I’ve checked my Bebo or Facebook pages, I’m met with virtually the same thing, uploads of holiday photos. Snaps from France, Spain, Turkey,  America, even Croatia (wherever that is)?

It’s clear then that the middle class of Ireland is still the upper class that it once was. I still see middle aged men wearing shirts driving Range Rovers with a smirk on their faces. There’s nothing to smirk about when you’re damaging the environment!!!

It’s clear then that more taxes must be imposed on our middle-upper class. Nothing too harsh to discourage productivity but I’d say you could squeeze a billion or so with a 3rd band of tax.

As if this strike on Monday couldn’t get any worse, SIPTU, the countries largest union has come out in support of the TEEU’s strike that is seeking an 11% pay rise in the midst of the worst recession this country has ever seen!

SIPTU president Jack O’Connor said that it was a stand against the profits of employers who are trying to drive down wages to their own benefit. I’ve never heard such crap. There are firms, particularly in construction going out of business everyday and one of the main reasons for this is that their wages are too high to maintain. That’s also why many employers are lowering wages. It’s an accepted fact amongst all economics and observers that we became a high cost and high wage economy. Now it’s time to go back the other way. Wage reductions are needed across all sectors, particularly at the top.

I know an electrician. He’s a family friend and throughout the years he’s fixed many problems in our house and he’s been a nice guy. That hasn’t changed however now when I think of electricians I now think of greed. An 11% pay rise is something that would only have been seen at the height of the boom as inflation soared. Now when we are beginning to see deflation, over 10,000 electricians are threatening to go on strike this Monday.

It is unacceptable that any workers group demand a pay rise in a time when we need to reduce costs, including wages. Electricians want to up their hourly rate to €24! People working in supermarkets only earn half the money and I don’t believe any trade is worth twice that. Electricians are skilled workers however they are below the likes of electrical engineers and the amount of time it takes to become an electrician is much less. I’m guessing that you could probably become one within a year or two.

Electricians benefitted immensely during the boom with small and large scale projects to be found everywhere across the country. From Office buildings to bathrooms, plugs and lights were needed and the Electricians did those jobs professionally. Electricians have also benefitted from nixers during the Celtic Tiger with no amount of that money going into tax. Fitting dozens of down lighters into South Dublin kitchens was a popular job I’m told. They are of course very complex and for some reason you can’t get energy efficient bulbs for them!!!

If this ridiculous strike goes ahead then electricians will pull construction projects to a halt. Construction firms are already feeling the pinch of the recession and this won’t help them. Consumers would also be left out as repairs on houses cannot be made. This could leave many people in the dark!

The stance taken by their employers is equally startling. They’re seeking a 10% pay cut which I fell is also excessive. I think both sides need to meet somewhere in the middle. The TEEU union needs to stop being greedy and try instead to maintain pay at current levels for their workers and the employers need to bring their demands down to something around 5%.

It’s likely that this strike will go ahead however it will not generate any public support. I certainly won’t give it any backing and most people will be shocked when the demand of 11% reaches the headlines. After about a week the strike will be over and everything will be back to normal. Both sides will then agree on something a little more reasonable.

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