Devaluing the Irish people
The government has finally admitted that they have a long term solution to the financial crisis, and have revealed it in all its glory.
During the boom years, prices soared and wages did their best to keep up with them. Ireland became an uncompetitive country.
This was no great problem to the Irish, as high wages meant we were able to pay high prices. However, when it came to overseas trade, it was a different story. Prices here were astronomical to someone who wasn’t on an Irish wage. Irish goods were too expensive to buy.
One simple tried and tested solution is to revalue the currency to bring our cost levels on a par with everyone else. That option is no longer open to us though since we joined the Euro.
The government strategy is quite simple.
First of all, you do not encourage the banks to lend to business. Starved of their cash flow, business start going to the wall, or at best, start cutting wages. This of course leads to massive unemployment, which is now increasing at 3,000 a week.
Next, you let the unemployed stew, and do fuck all to alleviate the situation.
Finally you feck off for three months holiday and let the situation simmer.
What will happen, of course is that employers are going to drop their wages, knowing that the fear of unemployment will ensure meek compliance. Also, the unemployed will eventually accept any wages to get off the dole queues.
This will work, and wages will drop across the board. From that point of view, Ireland should become competitive once more.
However [and it’s a big ‘however’], the government seem to have overlooked a small point or two.
They are assuming that prices will drop at the same rate as wages. Hah! How many business owners are going to see the drop in wages and salaries as a nice way to increase the profit margins? A lot.
They are also assuming that if there are price cuts that they will be across the board.
If there is an average drop in income of [say] 10%, then prices also have to drop across the board by 10%, otherwise I can see a future of endless disputes.
So there you have it.
Not only are the government not doing anything to stop unemployment, they are actually encouraging it.
And what else are they doing?
They are helping themselves to three months holidays on full pay, in the middle of the biggest crisis this country has ever faced.
At this stage it hardly comes as a surprise. Nothing that the government does these days is anyway grounded in reality.
At least we will be getting free flu jabs though. Administered by the HSE so there is even a catch in that.
.-= >> robert´s latest brainfart .. Sports day =-.
So as prices are high and wages low Mr. Company owner finds he can’t sell his product without lowering the price because with the low wages noone can afford to buy his product. He has a choice at this point go out of business because noone can afford his product or lower his prices(along with the lower wages he pays) and continue on in business.
It’s called being market driven! Not all business begs the state for money and markets.
Actually 3 months of the government doing nothing might be better then three month of what “solutions” they might offer. remember the scariest words in any language “we’re from the government, and we are here to help you”.
.-= >> Jim C´s latest brainfart .. 4 gone =-.
Robert – So long as the flu jab isn’t like their flaming iodine tablets. I’m still waiting on those!
Brian – That is very true, and that will be the situation in a lot of cases. However there is an amazing greed mentality here where some businesses would almost rather go bust than reduce prices. A case in point is the pub trade. Pubs are closing at a frightening rate, but I don’t see the price of a pint coming down!
Jim C – Actually, you’re right. Our government have fucked things up so royally, that things may actually improve in their absence. Certainly anything they do seems to make things worse!
“The fundamentals are sound”, isn’t that what they told us last year!!
I think it’s an oppertunity to get rid of the lot of them for good. Imagine the fuckers getting stranded in an airfield in Chad! Wouldn’t that be lovely?
Willy the Wanker with his pretend army would have a bit of a job trying to get them back!
.-= >> unstranger´s latest brainfart .. Palin Manoeuvres =-.
Lafsword – The sound of what? Laughter? Tears?
Welcome Unstranger! I don’t give a damn where they go so long as they don’t come back. This could be a good time to stage a coup??