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SPEAKERS CORNER...by Tom McGurk

 

Ireland invented the boycott during the land wars, and perhaps it is time to take this effective weapon of resistance down from the thatch to deal with repossessions and resales Despite the spiralling economic crisis we are in, there was, last week, an epiphany at a small auction in Co Meath.

A 67-acre farm in Crossakiel, which had been repossessed by ACC bank, was up for sale. Despite a reasonable attendance by local farmers at the auction, there was only one derisory bid of €1.

There was, according to some present, ‘‘an atmosphere’’ in the room, and the auctioneer later told the Irish Times that ‘‘there was no question but that people weren’t bidding because it was being sold by the bank’’.

At one stage, one person present questioned whether the land was being sold with the goodwill of the owner - and was told that the bank had the authority to sell the land.

The owner of the land had reached this financial crisis after using the land to raise funds for a property development which then crashed. The farm remains unsold.

It is not difficult to imagine the historical ghosts which haunted that Meath auction room, and I make no excuse for returning yet again to the personal debt crisis that I have been writing about for some weeks now.

One result of this issue has been the emergence of the New Beginning organisation, a group of some 50 barristers, businesspeople and citizens who are prepared to give free legal support to those facing repossession. And three cheers for them.

The failed land sale in Meath is yet another sign that, if the banks think they can regain the high financial ground over the thousands to whom they over-loaned in a reckless fashion by repossessing land, they may have to think again.

This applies equally to the government, which scooped up so many million euro in stamp duty.

Given Ireland’s history, those silent farmers in the auction room in Co Meath last week would have had a far better sense of where all of this will lead than the men running our banks. If the banks and the political and financial establishment think that our current bank repossession methods and laws on debt and bankruptcy are adequate for the forthcoming crisis, they had better think again. Parallels with the land and eviction crisis of the 19th century are beginning to look pertinent, particularly when one considers that, by late next year, almost 20 per cent of Irish home ownership may be in negative equity.

At the outset of this crisis, most people didn’t really understand what had happened and were prepared to let the government get on with saving the banks since they were essential - so the government argued - to safeguarding our economic future. Well, we did that, but the economy is still in crisis.

As the months have passed, the government’s financial targets have been missed, the debt crisis has grown and the public mood has changed. The realisation that thousands of families in this country are so in debt to the banks, that their children and unborn children will be paying it off, is slowly sinking in.

The auction in Meath last week may prove to have been be a significant turning point.

There have been two recent significant interventions in this debate. Professor Morgan Kelly of UCD warned in an Irish Times article that we were headed to what he depicted as a new type of land war between those who could pay their mortgages and those who could not.

He summed up the public mood as follows: ‘‘The perception growing among borrowers is that, while they played by the rules, the banks certainly did not, cynically persuading them into mortgages that they had no hope of affording.

‘‘Facing a choice between obligations to the banks and to their families’ mortgage or food, growing numbers are choosing the latter," he wrote.

Last Thursday, a group of ten leading economists wrote to the Irish Times, arguing that some form of mortgage debt forgiveness was not only essential for our society, but also for the economy.

The group argued that, were mortgage debt forgiveness not introduced - and radical reform not introduced to our debt and bankruptcy laws - then our financial crisis would only deepen. At the core of their argument was the following assertion: ‘‘As there are three parties to the problem - the banks, the regulator (ie the state) and the individual - these three must also be part of the solution."

With the government having insisted on a year’s grace for home repossessions by the banks, we are currently in some sort of unreal financial hiatus. It means that the full dimensions of the crisis to come are still hidden.

But late next year,when property and water taxes have been introduced - and when interest rates begin to rise, as they surely must - then the personal debt crisis has the potential to become the most serious crisis in the history of the state.

If the banks attempt a process of mass repossession next year, then they must be met by organised citizens’ action. Boycotting was invented in 19th century Ireland, and the time to use it again may be now.

Like the Tea Party movement in the US, which was organised on the internet and through websites and social networking, people in Ireland now have the organisational resources in their living rooms to bring the full power of the boycott against bank repossessions and attempted resales.

Boycott.ie - when it is set up - should be the rallying point to help those facing eviction. It could lead to the organised boycott of anyone involved in the eviction and, most especially, the auction of repossessed property. In the forthcoming general election, independent candidates fighting the repossession crisis should be put up through Boycott.ie.

It seems that, in this crisis, everyone except the taxpayers and homeowners of Ireland were allowed to make up the rules as they went along.

Now is the time for the citizens of the Republic to take back control of their lives and their finances and, like the Meath farmers, bond together in an unbreakable moral crusade for justice.

Our great-grandfathers and great-grandmothers did this before, and we can do it again.


This article was reproduced with the kind permission of Tom McGurk and The Sunday Business Post Online.

Comments  

 
# robbie 2010-11-17 17:41
Mary Bell of Patrick springs to mind.


Pity the constituents that now try to lead a normal in that area are brainwashed labour poodles.
 
 
# rgweir 2010-11-17 17:50
The content on newsnet gets better day by day,i think we are witness to a revolution in news reporting in scotland.
 
 
# ds12 2010-11-17 18:33
A far more interesting story than some of the stuff we are getting on an hourly basis from Radio Scotland.
I look forward to them finding the time to go into such details on the UKs financial plight or perhaps we can get some coverage from Norway and how they are dealing with the current financial situation.
 
 
# rgweir 2010-11-17 19:39
I have had a wee peek at blether with brian(I KNOW,,SORRY)
He said that labour has the option of calling for a vote of confidence in the govt,i nearly fell off my chair.
 
 
# ScotlandUnspun 2010-11-17 19:47
on what basis?
 
 
# Merouane 2010-11-17 22:12
They don't, simply if the snp can't win enough votes to pass the budget then we'll get an election. The BBC would have us believe it is in the power of labour and only labour to bring down the government.
 
 
# mato21 2010-11-17 19:59
This just shows the power people can exert when they stick together.All credit to those assisting in their struggle.Our time is coming
 
 
# rgweir 2010-11-17 20:29
Iam not quite sure unspun.i think it was just taylor trying to make out that labour have it in their power to force an early election.
In other words it was best to say that than have to say how inept kerr was.
 
 
# J Wil 2010-11-17 20:31
"...group of some 50 barristers, business people and citizens who are prepared to give free legal support to those facing repossession."

I like the, "we are all in this together philosophy", railing against unfairness.

Instead of the, "it's every man for himself" approach.
 
 
# cynicalHighlander 2010-11-17 20:50
Viewpoint: Ireland's robust economy knocked off course: bbc.co.uk/.../...

But they convey an image of Ireland totally at odds with the reality of a country that last week was voted by the UN human development index as the world's 5th most desirable place to live.

The UK was - sorry to point this out - 26th. Our GDP per capita remains 30% above the EU average and well above Scotland, Wales and Northern Ireland.
 
 
# Merouane 2010-11-17 22:16
Propaganda simple as that. Ireland, the one that got away from the Brits (most of it at least) and it still bothers them. They won't let Scotland go the same way.
 
 
# mudfries 2010-11-17 21:56
I recommend anyone to go onto the 'James connolly internet archive' (a google search finds it on the 1st page) and have a read of some of the articles like 'what is a free nation?' (1915 section) etc, connolly was warning people capitalist banks would take everything they had in the name of profit 100 years ago! imagine what he would say if he were here now.
 
 
# Crazyhill 2010-11-17 22:05
Excellent article, and a warning to us all. I heard tonight that Osborne was offering to help the Irish government to overcome its catastrophic financal problems! The UK is in a worse mess than Ireland, for godness sake, and the Irish have long memories of the 'assistance' given to them by the British (well, English really)in the past few centuries.
If it was up to me, I would tell Mr Osborne where to put his offer, but the LibDems are there already!!
 
 
# J Wil 2010-11-17 23:47
It seems that Ireland doesn't want the bailout and thinks it can survive without it and the fact that the EU are worried about the consequences of Irish Banks failing, because of the knock on effect, seems to give Ireland a great deal of bargaining power.

At least some commentators think that Ireland coming out of the Eurozone could be to the benefit of the country.

Osborne gives the impression that he is being kind to Ireland, but it is not his largesse that is driving him, just the reality that British banks have outstanding loans to Irish banks.
 
 
# Dougie Douglas 2010-11-18 03:33
I'm a little uncomfortable with some of this.

There is no doubt that the banks have been grossly irresponsible in lending beyond the means of some people. However it is wrong to also use that as an excuse to ignore the fact that many people have quiet simply been greedy and extremely naive by borrowing way beyond their means.

If we had not had an economic crisis these people who borrowed way beyond their means would now be sitting on a small fortune. Most people take into account that interest rates may increase and therefore repayments will increase also. Property like all investments go up and down in value - everyone knows that - right?

Yes, lets hold the bankers to account - they were driven by greed but many ordinary people borrowed way beyond their means - their primary motivation was financial gain - they were also driven by greed.

A bubble of greed has burst and those suffering the most are people who would have gained substantially, do not discount the fact that many people who borrowed modestly are saying under their breath 'serves you right you greedy *&#$*^#@^'. Those paying over-the-odds and beyond their means are partly responsible for the overheating in the property market.

P.S. I believe that many bankers are criminally negligent and that if they stood to gain massively in this irresponsible gamble they should now be losing massively. Clearly this is not what is happening - this lack of proportionality is the crux of the matter.
 
 
# ScotlandUnspun 2010-11-18 08:17
DD,
'At the core of their argument was the following assertion: ‘‘As there are three parties to the problem - the banks, the regulator (ie the state) and the individual - these three must also be part of the solution."

I think your point is well convered in the piece. Let's not forget that with low interest rates, money leveraging and printing that people were forced out of savings into speculation. That is a fact! You had to get on the bubble train or go into debt - there was little choice for most!
 
 
# Dougie Douglas 2010-11-18 10:38
C'mon!, people were not forced into the property market by lack of other choices - there was a fair amount of greed.

Whither we like it or not we like it or not in a capitalist system the concept of 'incentives' rules supreme. I'm not saying it is fair or just per se but it is the central driving force behind the market system. Sure the bankers are rotten, there has been a massive regulatory failure (esp. in Anglo/Celtic economies) but many people overstretched themselves.

The regulator should have been over this like a rash but in previous property booms people have been happy to benefit from the upside; unfortunately, this is the downside.

The article states: "The owner of the land had reached this financial crisis after using the land to raise funds for a property development which then crashed"

As a careful investor I have little sympathy, if he had pulled it off (partially driving up property prices for the rest of us) he would be rolling it in now. He made a series of serious miscalculations and gambled his farm, I am sorry about his personal misfortune but really - thems the breaks!
 
 
# fay fae fife 2010-11-18 09:31
I agree Dougie. The previous owner of the farm borrowed money from the bank to fund a property development deal which crashed. That was his choice. He secured the loan on his property, again, this was his choice and he did so with the knowledge that if his property development venture went sour he would lose his land. That is what happened in this case and the banks are being blamed? What about personal responsibility and living within your means. He willingly entered into a contract with the bank and if he had honoured that by paying back the money he would still have the land. I agree that banks did lend recklessly, but the people who took the money did so because they wanted to make a profit and were quite willing to take the risk. The ones I feel sorry for are the businesses who are at risk because they are not being paid by others because the other parties have overstretched themselves and they can't get finance from the bank to tide them over. Or the young people facing high rent prices and low wages who can't afford to get onto the housing ladder because the greed of the generation before them pushed property prices up so high they now need to raise more money than a family home would have cost 20 years ago just to get a deposit for a bedsit.
 
 
# Yorkshire Lass 2010-11-19 09:29
"the greed of the generation before them pushed property prices up so high they now need to raise more money than a family home would have cost 20 years ago just to get a deposit for a bedsit."

Don't know about Ireland, but in Scotland and England there is a serious shortage of decent housing available to rent, especially since the right to buy council housing policy. If you want a home in a moderately nice area, you have little choice but to mortgage yourself to the hilt and buy. This is not greed, it is a simple and basic human desire to have a pleasant, safe home. Even as your house goes up in value, you do not become rich, because everywhere else you could live has also gone up in value.

The farmer in this particular case may have been a speculator, but the article also states "by late next year, almost 20 per cent of Irish home ownership may be in negative equity." I think it is a little harsh to categorise almost 20% of Irish homeowners as greedy pushers up of property prices.
 
 
# Roll_On_2011 2010-11-18 06:05
Katherine Butler - The compelling plot behind Ireland's woes:

independent.co.uk/.../...

What cruel timing for Ireland that the bottom has even fallen out of the misery-lit market. There's sufficient material at hand for at least a few blockbusting epics worthy of the Frank McCourt genre; poverty, double-digit unemployment and the heartbreak of families being torn apart as mass emigration returns for real. But beyond the familiar pattern there is, this time, a stranger-than-fiction rags-to-riches-to-rags-again plot line. There are rich, scheming and still unpunished bankers, property tycoons and gullible middle classes who joined what turns out was a vast Ponzi scheme, buying apartments in absurd locations like Cape Verde or Islamabad. And there are, of course, those irrational faceless villains: "The Markets".

The current crisis is a test of the political solidarity that is supposed to underpin the European Union and at the hour of Ireland's greatest need, Angela Merkel has shown a disappointing parochialism. But the Irish people need to look closer to home for the real traitors. Their own leaders are the ones who egged on greedy bankers and builders to rape the economy and flog cheap loans as they defiled every available green space with gaudy McMansions, pointless gated communities in rural hamlets and tax-incentivised holiday villages the length of the once beautiful coastline, many of which now stand empty or half-built, ghostly indictments of a rancid political culture.

And Ireland's politicians are the ones who recklessly committed the public purse to guaranteeing nearly £39bn in bank debt even as they moved to inflict the kind of cuts to health, education and public sector workers that make the British austerity plan look like a picnic. If conditions imposed from outside do anything to end the cronysim, clientelism and corruption that has prevailed in Ireland for generations then the sooner the better.
 
 
# Diabloandco 2010-11-18 07:33
Dear Ireland , please do not take the offered " aid" from the Westminster Government, they do nothing for the good of it and there will be mighty strings attached.You will find yourselves hog-tied by a debt of gratitude and money and goodness knows where that may lead.
Remember , they need you as a market place.
 
 
# J Wil 2010-11-18 11:31
Agreed. What price independence?
 
 
# ScotlandUnspun 2010-11-18 17:07
Quoting fay fae fife:
I agree Dougie. The previous owner of the farm borrowed money from the bank to fund a property development deal which crashed. That was his choice. He secured the loan on his property, again, this was his choice and he did so with the knowledge that if his property development venture went sour he would lose his land. That is what happened in this case and the banks are being blamed? What about personal responsibility and living within your means. He willingly entered into a contract with the bank and if he had honoured that by paying back the money he would still have the land. I agree that banks did lend recklessly, but the people who took the money did so because they wanted to make a profit and were quite willing to take the risk. The ones I feel sorry for are the businesses who are at risk because they are not being paid by others because the other parties have overstretched themselves and they can't get finance from the bank to tide them over. Or the young people facing high rent prices and low wages who can't afford to get onto the housing ladder because the greed of the generation before them pushed property prices up so high they now need to raise more money than a family home would have cost 20 years ago just to get a deposit for a bedsit.


Yep, I know it all seems strange but the reality is people are forced into these kinds of speculation. It's not how we're made to think about how banks work but there you are.

Take for example quantative easing. If you save your money prudently in the bank at 1% interest or whatever it is you are losing a lot of money because the purchasing power of your money is going down maybe 20% in that year. That's a fact (check out the value of the pound) So, your savings are devaluing by 19%.

So, anyone with half a brain takes their money out and does something else with it. You're forced into the stock market or property speculation other wise you'll never be able to afford to send your kids through college.

In comes the predatory banks telling you sweet little lies about how easy it is to get a mortgage or about how low interest rates are and show you nice graphs.. The banks take the savings (fools deposits) multiply it by 50 and lend it out. This keeps property prices going up and up. The propaganda campaign kicks in - owning property is like a piggy bank and then there's all your friends telling you not to be stupid and get on the ladder.

There's nothing left to do but join the casino and boy they'll suck you in.

Then the banks make money when the bubbles bursts.

We live in a kleptocracy. Savers are being robbed by speculators. You are either a fool saver or join the speculators - that's the way the system is skewed..

Don't worry, once austerity comes there'll be a lot more economists out there blogging helping to educate the public about these realities..

I wouldn't just blame them and I think the economists who are now calling these big bankers financial terrorists deserve a hearing..
 
 
# enneffess 2010-11-18 20:10
I learned my lesson about debt years ago; credit cards, loans, store cards and a nice big overdraft. I now have a rather modest mortgage and that's it. I need new double glazing and a kitchen, but buggered if I'm going to borrow again.

I have little sympathy for those who borrow beyond their means, but at the same time anger at how the banks were quite happy to throw money at people and then rely on the taxpayer to save them, while the borrowers have no such lifeline.
 
 
# John Souter 2010-11-18 20:49
Here's the sequence - the financial wizards create masses of collateral by opening the floodgate on mortgage debt. These are all valued at book cost plus profit on returns.

Eventually like any pyramid or Ponzi scheme the returns or income doesn't match the projections so they decide to offload the monopoly funded schemes. But this time since they've all climbed into the same boat, they're all grasping for the few available functioning life jackets at the same time.

Since there's not enough to save more than a insignificant minority, they decide to adopt a community approach and they all scream "HELP" Adding; "we're too important to drown and too big for you to do without us."

Now here's the clever part. The governments believe them, or say they do; or perhaps, are simply in too much of a spin to think of any alternatives. They react by giving the financial wizards an open cheque based on the book values that have already been seen as overvalued and consequently seriously discounted.

By doing so, the governments have thrown good (real) money after bad and the financiers have cashed in their dubious chips and now have real money in their accounts. Not bad eh! Alchemy in its purist form, or money laundered whiter than white?

Of course, now that the wizards of finance are back in real funds, they're not going to risk that real money so they buy into the commodity markets. Which has the effect of raising commodity prices and adding pressure to the recessionary forces while increasing their profits.

Meanwhile the governments cheques have to materialise their real money and the only real collateral they have is the real people they're supposed to serve. So these real people have to bare the real brunt for the financiers surreal sleight of hand and casino tactics.

So whether you were a sideline player or a non participant, they, along with their incompetent political sidekicks have taken us all to the cleaners big time.
 
 
# ScotlandUnspun 2010-11-19 09:58
Interesting angle.

Given that this is systemic it just isn't fair to start pointing the finger at individual borrowers. I mean if it was isolated cases here and there but a large percentage of the population is either under water or soon will be. That means the problem is the system and no other serious conclusion can be made.

When the fraud hit and Brown decided to bail out the banks (and print money for them too) he could have for less money cancelled all mortgage and credit card debt.

The option that Brown took - bailing out fraudsters in the financial sector has achieved nothing except bankrupting Britain and we will soon see what austerity will visit on us.

Very few people have complained about this.

If he had taken the second option, the financial sector would have been in liquidation and sold to investors with better management skills and with better regulation. The population would be saving and spending and there would be no austerity or job losses/pay freezes.

The problem here is envy. Economically it makes sense but who wants to see thier neighbour being let out of their debt obligations?

People would rather see the economy go down the tubes than their neighbour get a break - that's the attitude above. Not that we can blame people for that as we are encouraged to compete against each other and fight among ourselves. These are Thatcher's children..

Many kept out of speculating and saved. These people should have been rewarded but that wasn't government economic policy.

Savers should be lauded but it was the government who shafted you not people who took the bait. They were prey to a very manipulative and predatory, and fraudulant, system. Now they're suffering just like the rest of us. I personally can take no pleasure out of that.
 
 
# Somerled 2010-11-20 17:23
I have just come home after spending all of last week in Ireland.
In my opinion the whole of R.o.I.
is in a total mess :financilally,p hysically and mentally. We have nothing to learn from them except how not to do things.
 

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