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Ireland's austerity plan

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Paul Mason | 16:06 UK time, Wednesday, 24 November 2010

Ireland's austerity plan will look familiar to anybody who has studied all the others generated off the back of the banking crisis. Higher VAT, pension cuts, minimum wage cuts, tax rises for the lower paid, benefit cuts - and cuts in public services.

And it has the same hit-and-hope element as many: that growth will mean the cuts eventually balance the budget. And that growth will be driven by exports.

Ireland's two big export markets are the USA and the UK (at about 18% of total exports each). This month the USA has voluntarily tanked the value of its own currency, and the UK's central bank is revelling in its own past achievements in that regard. Indeed the UK has adopted the view that its own deficit reduction plans will be driven by export led growth. Yet Ireland cannot devalue its own currency to achieve the export-led growth.

So it is dependent on a) a more general recovery across the Eurozone and/or b) successfully competing for high value inward investment by, for example, speculative finance industries or high tech, high value global operations.

The scale of the austerity is massive: on average, each Irish family will pay an extra €3,000 in tax, while wages and benefits will fall.

Yet Ireland is predicting growth will bounce back to an average 2.75% from next year to 2014.

To be clear - if it does not, then even this draconian budget will not put Ireland back on track to meeting the Maastricht rules. And the markets clearly believe there is little chance of the growth story coming true.

Since 2pm the cost of borrowing for Ireland has crept upwards.

But slashing your budget it is something you can control. What we need to know now is the answer to the bigger question: can they save the Irish banks and does the EU/IMF bailout staunch the contagion that is driving borrowing costs up for all governments in peripheral Europe. This depends on factors they cannot control.

Commentators are now noting loudly - as they did on Newsnight last night - that there is now effectively a two-tier Eurozone: on bond yields, on credit ratings, on deficit reduction plans, on banking stability. The authorities, above all in Germany, have begun to speak regularly about the Euro being "under threat".

What is missing is an idea of a vision of what a post-crisis Eurozone might look like. As they focus on the near-horizon crisis, Europe's leaders (as opposed to national governments) are struggling to communicate what the desired end-state is.

Comments

  • Comment number 1.

    Irish Four Year Plan

    Just read part of the "Debt dynamics" section.

    3.4% 3.9% 4.4% 4.7% "Baseline" interest rate assumption for Ireland on their general govt debt 2011 - 14....are these credible whether they use their cash reserves or otherwise draw on part of the EU/IMF overdraft?

    Couldnt find much reference to bank bailout implications going forward although Mr Honohan talked of more stress testing early next year.

  • Comment number 2.

    The final paragraph above is, to me, the most interesting
    "What is missing is an idea of a vision of what a post-crisis Eurozone might look like. As they focus on the near-horizon crisis, Europe's leaders (as opposed to national governments) are struggling to communicate what the desired end-state is."
    ----------------------------------------------------
    Are the National Governments thinking about these issues also?

    If the eurozone breaks up, I would assume the treaties that formed the Euro will go also. But, in trying to negotiate some replacement, there will be a lot of bickering and it will take time. The markets will benefit, the citizens of Europe will not and the unrest that may follow might cause the downfall of the European experiment in its current form.

    Ireland's population is just over 4m; there will be a limited to what they are prepared to stand in the way of hardship. Their problems are showing that the EU is red in tooth and claw; there's no good samaritan around for the Irish given the price that is being insisted upon.

  • Comment number 3.

    Looks like just what the Corporate Nazi's ordered !

  • Comment number 4.

    sleepy - isn't the population of Ireland about 6.2M?

    Also how will "the markets" benefit. If investors are forced to take a haircut, "they" will loose a bundle. Who are "they"? Anyone with a pension, for one. You write as though banks just get get all the cash that debtor countries are borrowing every day to keep them in a manner they cannot afford.

    If anyone has benefited from this over the past 10 years it's the citizens of debtor countries who have borrowed from surplus countries eg Germany, and now won't pay back their debt, having spent it all in a big "wow my house is expensive" daydream.

    Funny how bankers are using "their" money when they make it, and "our" money when they loose it, depending on the polemic.

  • Comment number 5.

    It will be interesting to see how both Tech in Eire and Cameron's new Tech 'village' in the East End of London fair in the coming years. Both will be competing for the same companies and the same jobs.

    Low Corporation Tax in Eire and a pretty decent quality of life versus expensive to work in and live in London plus, to be blunt, a perfectly ghastly place to site such a Tech 'village' in the UK.

    I can't see many Tech workers being attracted to the East End of London when Amsterdam, Hamburg and even Eire are EU alternatives. The banks in the City / Canary Wharf pay handsomely to get the brightest IT brains working in the misery of Docklands - in IT circles it is well known that you only go to Canary Wharf for the money.

    Cameron's new Tech 'village' will have to pay just as handsomely to get people working there. If not, people will chose the banks to work in or will opt for places like Eire.

    So, assuming that Eire can get to the end of the week, end of the month and end of the Depression, it could well be placed to keep and attract plenty more Tech jobs in future.

  • Comment number 6.

    There is no articulated vision because the whole trajectory of the EU is to function more and more for the benefit of globalised capital. Global firms have the resources to ensure they get what they want from the EU mechanism; and that is pretty much what the Commission is there for anyway.

    Lobbying bodies like the European Services Forum ensure this direction. And if you look at who are the members of the ESF, it includes BusinessEurope. And who is in BusinessEurope? Not'European' firms but global transnationals such as Exxon, Caterpillar - actually US based. So this is who is set up to use this EU mechanism.

    That is what the EU directives direct us towards, that is what the EU is a tool for. Corporations have the means and the access to ensure that, people dont.

    It is misconceived assumption, Paul, to assume that anyone is actually acting for the good of society, as in 'people'. Any sort of social agenda for the EU is pie in the sky. There are no mechanisms for the supposed social part of the EU agenda, but there are hard and fast directives for the liberalisation agenda.

    So they are not going to state that the vision is for increased corporate power, and for an increasing orientation towards corporate profit, which inherently means the demise of labour/people power.

    They are not likely to explain the aim of seamlessness between liberalisation within the EU and with the rest of the world through the EU's international trade agenda.

    Anyone who wanted to challenge this, esp if they were in a position to make a difference, could ensure that as much as possible the big picture was articulated and explained to the public which pays (their) wages. One part of this would be to unpick, rather than reinforce, phoney concepts and platitudes like 'being competitive'.

    Of course to do that, one would have to have a good grasp of it all onesself, wouldn't one?

  • Comment number 7.

    ...What is missing is an idea of a vision of what a post-crisis Eurozone might look like?...

    No Way to Run a Shop.

    There are thousands of small business people who successfully run their own economy. Running a country's economy is no different although all sorts of people [for their vested interests] will tell you it is. The basic discipline of economic laws are universal. The guy who runs the corner shop has a better grasp of economics than the ideologically driven political class who have been hoodwinked by voodoo economics they are told [in an emperor's new clothes way] are too complex for 'ordinary' people to understand but only the 'insiders' can.

    ignore or deviate from the basic laws of economics a window cleaner has to operate by and you will end up in lala land. Which is where we are now.

    So 'the vision' is to drop the voodoo and grasp the same disciplines everyone else has to abide by. ie pass audits, clear reporting, have a business plan, record keeping,make a profit etc. When was the last time europe passed an audit?

    This will also mean stop pretending pensions are anything other than a state handout. its not backed by investments that generate a return. A window cleaner could not afford to give themselves a luxury pension based merely on the taxation of his son who takes over the business.

    Basically there is a deep dishonesty in the system that can only exist because the political class throw public money at their fantasy model. Now the money for the fantasy has run out or is harder to get.

    the vision of sound finance was always there. Its just people departed from that for political gain or blind ideology [usually citing fairness which is an idol that demands human sacrifice].

  • Comment number 8.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 9.

    I wish that Newsnight and other media reporting of the Irish Austerity Plan would understand what I do - having lived in the country for 18 months!! While the cost of living is, and will be even after this austerity plan, no more than 20% higher than in the UK it earns per capita much more than UK citizens. That's why:

    'IRELAND IS LAUGHING AT US!

    - It takes companies and jobs from the UK by keeping its Corporation Tax at a very low 12.5%. IT'S A JOKE!

    - Many of the employed pay themselves huge salaries - even after some limited cuts in recent budgets! IT'S A JOKE! This is because:

    - Its minimum wage is nearly 50% HIGHER than in the UK. IT'S A JOKE!

    - Public sector wages are OVER DOUBLE those in the UK (with much better pensions and perks). IT'S A JOKE!

    - A single unemployed person in Ireland gets over 3 TIMES more than their British counterpart IT'S A JOKE!

    - Irish pensioners get OVER DOUBLE what British pensioners get (and free national travel passes, free electricity, and free phone calls). IT'S A JOKE!

    - Its Prime Minister, other ministers and MPs, all get MUCH HIGHER salaries and expenses than in the UK. (Its Prime Minister even gets more than Obama). This is while they represent less that one third of constituency residents than in the UK. IT'S A JOKE!

    - The Irish government claims to be about to deliver a harsh Austerity plan, while refusing to cut wages in the public sector and keeping their pensions and many other benefits virtually untouched. IT'S A JOKE!

    - It has guaranteed that their highly inefficient banks (some of whom only open to the public for 5 hours per day) are kept alive with huge Government/ECB/UK/IMF loans. So far NAMA refuses to call to account Banks' Boards of management, who still receive massive salaries. IT'S A JOKE!

    - It allows property developers, who owe huge amounts of cash, to go unchallenged, and has taken on much of their debts via their National Asset Management organisation (NAMA). IT'S A JOKE!

    If all that is not enough, and, believe me, their is plenty more, our UK government now intends to help bail out Ireland to the tune of £12 billion - while, at the same time, making our own poorest communities pay even more for the banks outrageous mistakes!

    NO WONDER THEN THAT THE IRISH AR LAUGHING AT US!!'

    IT'S FOOLING THE IMF, THE EC AND the UK into believing that they are sorting things out, while Ireland pretends to be bringing its expenditure on public sector wages and perks into line with the rest of Europe!'

    PLEASE NEWSNIGHT TELL IT AS IT IS!!

  • Comment number 10.

    #1

    Few of the assumptions about interest rates payable, level of exports and future growth rates (average 2.75 % to 2014) are credible.

    The reductions the government can control: lower minimum wage, higher VAT and property tax, etc. are more realistic.

    The glorious Four Year Plan cannot include the costs of the 90 bn euro loan because it has not been agreed yet.

    The plan has projected savings of an additional 15 bn to 2014, average 5 bn per year. The interest on 90 bn at 5% is 4.5 bn per year initially. How long do they get to pay back the principal plus interest?

    We don't know the split between the banks and the state for the allocation of the international loan. But either way, the figures don't seem to make sense.

  • Comment number 11.

    Four Year Plan?

    All sounds suspiciously commie to me. When do we get Chairman Brian's Little Green Book or the Long March from the Liffy to the Shannon? Cultural revolution time folks - everything by Yeats, Shaw, Joyce et al to be burned as reactionary neo-liberal corrupt imperialist propaganda.

    Long live the people, bring back the Punt, bring back the birch, bring back the British (whoops, typo, sorry).

  • Comment number 12.

    C'mon Paul, if you're still in Ireland, #9 requires some serious feedback.

  • Comment number 13.

    Before allowing the IMF coup d’etat of Ireland, the government of Ireland should have demanded that the IMF proves that it is solvent. The people of Ireland should have demanded to see some proof that the IMF is not bankrupt itself and not just using phony paper to acquire assets on the cheap. Oh well, too late. Bankrupt global banks acquired Ireland’s assets using wampun and trinkets. Now these banks, owners of Ireland’s assets, will leverage Ireland’s assets to put in place the facilities needed to extract rent from Irish citizens.

  • Comment number 14.

    #12

    UK minimum wage £5.93 per hour. Ireland 7.65 euros (£6.48) so higher but not 50% higher.

    Not sure about purchasing power parity between UK and Ireland - but would guess with high property and wage costs it is not cheap to live in Ireland (at the moment).

  • Comment number 15.

    @7 Jaunty "There are thousands of small business people who successfully run their own economy. Running a country's economy is no different"

    Sorry Jaunty, I've agreed with a lot of you're recent posts, but you're wrong on this one.

    If a small business is overstaffed it sacks people: it might have to pay a bit, but then they're gone.

    The only way a country could do this is shoot or transport the surplus. Neither options are politically feasable these days.

    Running a country is - or should be - more like running a family. Resources are pooled, fairly rather than equally, and you have to make sure everyone pulls their weight. But you care for your old and weak. Yes, we probably are a pretty dusfunctional family at the moment - daddy has remortaged the house wthout telling us, but we aren't murdering granny for the sake of her insurance - yet!

  • Comment number 16.

    13 - So the Irish take a forfeit for bad business. I feel sorry for the people but as a financial entity it's not like there is no cost to placing huge bets and getting it wrong.

    And if Irish banks hadn't been totally and utterly useless, and had instead made a great profit, would they have said "if this had gone bad we would expect a bailout, so come and share in our good times - here's your implicit kickback".

    I have to say this liberal thinking on BBC blogs is quite amazing. Do you really think in this thing we call the human race, where resources are scarce and countries jockey for position, that countries (US accepted as they are the big boys!) can place their bets on red then walk away from the table when it lands on black? This is serious stuff. How many extra ambulance staff would the UK £7bn buy, which would lead to more lives saved? Or should we just write that off and say "don't do it again"?

    Superpowers are after owning spheres of influence. Yes, they are going to make Ireland sit up and beg for it, rightly or wrongly it's the world adults live in.

    ps re IMF solvency - what is solvency in a fiat money system anyway. Again one can debate the finer points of this but reality bites hard and in reality we have fiat based currencies.

  • Comment number 17.

    Paul,

    You're usually one for telling it as it is. So why are you, and everyone else, now ignoring the real issue in all this bail out/austerity plan/budget/political crisis guff? And the issue is: how can the household sector take on the full cost of restructing Ireland when it is itself hugely overgeared and unable to service its own debts never mind those of the State?

    It appears to be accepted that around 12.5% of all mortgages in Ireland are non-performing in some way. Most will be on interest only terms, ie just stretching out the length of the loan. A survey out this week showed that over 30% of people say they are strugglig to pay the mortgage, a figure that rises to 42% for expectations for 2011. I doubt that number is falling tonight on the back of the package of measures announced. There is plenty of evidence that house prices are down about 50% from their peak, and the majority of home owners are now in negative equity. 20% of all residential property is empty, unable to find buyers.

    Given the above, there can be no appetite in the banks to repossess. Leaving aside the political impact in a country where forced evictions are still a keenly felt historical topic, the fact is repossessed properties simply add to the loan impairments that the banks would have to recognise. Keeping homeowners on some sort of life support is in the interest of all parties here: owners, banks, politicians.

    However, a budget that continues to peddle the myth that all Ireland's problems can be paid for by the household sector is also a budget that guarantees ongoing Euro uncertainty. The Irish bail out facility is for three years. There is as much chance of that happening as there is of everyone continuing to struggle to pay their mortgage.

    The bailout funds earmarked for recapitalising the banks look remarkably like the number required to cover a 20% writedown of residential mortgage debt, which itself looks like a reasonable prediction for defaults based on the survey quoted above, together with the total absence of a housing market right now.

    There will be massive losses on the residential mortgage books. It is just a question of whether that is via a structured debt forgiveness plan, or the tossing in of the keys as people realise that there is very little consequence of such action when so many others are doing it too.

    In the meantime, those not imprisoned by their mortgage are voting with their feet. 1% of the population emigrated in 2009, a further 1% will have emigrated by the end of 2010, and I doubt the numbers are going to get smaller in 2011 and onwards.

    Merkel was right to suggest that bond holders need to take some of the restructuring pain. Her only error was deferring that to 2013.

  • Comment number 18.

    4. Ben wrote:

    "isn't the population of Ireland about 6.2M?"

    Only if you're in Sinn Fein :)

    Population of the Republic is about 4.2m (and falling). Population of the North is about 1.6 million.

  • Comment number 19.

    15. Sasha Clarkson wrote:

    "If a small business is overstaffed it sacks people: it might have to pay a bit, but then they're gone. The only way a country could do this is shoot or transport the surplus. Neither options are politically feasable these days."

    Isn't mass emigration just a quasi-voluntary version of your transportation option? It's what is happening in Ireland now, and is pretty much what has always happened in Ireland at times of economic difficulty.


  • Comment number 20.

    @19. JayPee

    You are quite right, that's why New York is considered by some to be the largest Irish city in the world. Many many Irish are in the UK of course, and it's the UK I was thinking of. There are too many of us surplus to requirements, and we'd be better off keeping most of those who would actually be able and willing to go.

  • Comment number 21.


    I have just found a great antidote to all of this to restore my faith in humanity.

    It is called 'Test Match Special'

    Geoff Boycot is giving us the benefit of his Yorkshire wisdom at the moment.

    ''If your a batsman you have got to make runs, if you are a bowler you have got to take wickets'' he just said

    Ahhh blisss.

    If only economists were all Yorkshiremen, non of this would have happened :)

  • Comment number 22.

    'Ireland's austerity plan' - doesn't look credible to anyone, least of all those whose jobs it is to implement. There must be someone who believes it is going to work though otherwise why would they be doing it ?

    'Ireland's two big export markets are the USA and the UK' - both of which are trying to limit imports in favour of their own exports (Doh!).

    'The scale of the austerity is massive' - implausibly so ?

    'Yet Ireland is predicting growth' - the biggest growth area will be a flourishing non-contributary (black) economy and the tax take will drop off a cliff.

    'Since 2pm the cost of borrowing for Ireland has crept upwards.' - it is only the speculative cost of Ireland theoretically coming to market today and wanting to borrow, Ireland aren't in the market so it doesn't matter.

    'Commentators are now noting loudly' - it's more like 16 soon to be 17 tier (hello Estonia if you are still up for it :) individually coming to the market for appraisal, one failure and the whole team suffers.

    'What is missing is an idea' - How about the ECB issues its own EuroBonds which it places on the market and all Eurozone countries sell their bonds direct to the ECB, this removes the competetive speculation of playing one EZ country against the others.

  • Comment number 23.

    Where's the economic theories to explain the crisis?

    Why did the banks get into a mess?
    What forces were at work?

    Does the concept of fictitious capital help?

    http://www.metamute.org/en/Fictitious-Capital-For-Beginners

  • Comment number 24.

    #16 Ben

    "So the Irish take a forfeit for bad business. I feel sorry for the people but as a financial entity it's not like there is no cost to placing huge bets and getting it wrong."

    This makes the assumption that the risk & reward pay-off structure is currently balanced. A more equitable (and indeed proper "market based") solution was offered yesterday:

    http://www.bbc.co.uk/blogs/newsnight/paulmason/2010/11/euro_big_wednesday.html

    The current situation is not lefty liberalism, and your solution isn't even true Capitalism. It is privatised profits on the up-swing, and socialised liabilities (i.e. losses) on the downswing.

    The cards are marked, the dice are loaded, and the roulette wheel was rigged all along. We're all just marks in one giant financial hustle.

  • Comment number 25.

    Paul Krugman blog Feb 13 2010: "I think this is especially important in the European context. As I’ve been writing in a number of posts, the period 2000-2008 saw a huge divergence in price levels between the capital-inflow nations of the European periphery and the European core...almost surely, that divergence now has to be reduced. Yet with a low overall inflation rate for the eurozone, that means large-scale deflation in the overvalued economies if convergence is to happen any time in, say, the next 5-10 years. (Actually, in Eurospeak I think this is cohesion rather than convergence, but never mind). The task would be a lot easier if the eurozone had 4 percent inflation instead of 2. So yes, let’s have modestly higher inflation. Alas, Ben Bernanke — at least when speaking publicly — doesn’t agree. And I can only imagine what Trichet would say."

  • Comment number 26.

    I now read from this site everyday in my attempt to gain some perspective on Irelands crisis.
    buddie @ comment 9 calls it like it is, Yes its a " joke " but it has been that way long before this crisis.
    If I can just make a few points.
    1, Austerity plan is not credible " True, the numbers do not add up.
    2. " Politics of cronyism and parish pump ideology " This attitude and mind set has existed always, It has created policies and politics which were always a shambles but can no longer be hidden on a global stage.
    3. It is nigh on impossible to separate the Irish " mind set " from Politics and Governance, It appears to me that our sense of suffering and punishment is inextricably linked to our sense of self righteousness and begrudgery.
    4. The lack of diversity in our thought process and the rational action which could result from same will now, I believe come to the fore.
    5. On a more positive note, There are people here who are very concerned, very rational,very knowledgable, very insightful,They may be a minority but they are there, Unfortunatly it is highly unlikely the present Government will tap into this fund of knowledge.
    My apologies for lack of Political comment in this post, I will leave that for later !

  • Comment number 27.

    The old jokes are often the best. Here is Jonathan Swift's "modest proposal" brought up to date:

    http://www.davidosler.com/2010/11/irish-bankers-a-modest-proposal/

    http://art-bin.com/art/omodest.html

    http://en.wikipedia.org/wiki/A_Modest_Proposal

  • Comment number 28.

    #27 Sasha Clarkson

    In your last Wiki link I note that Jonathan Swift did not think too highly of the way Jews acted with regard to the poor Irish.

    I guess that *retrospectively* makes him a racist WASP!

  • Comment number 29.

    Hi Hawkeye:

    "The current situation is not lefty liberalism, and your solution isn't even true Capitalism. It is privatised profits on the up-swing, and socialised liabilities (i.e. losses) on the downswing."

    Agreed. This requires proper regulation by the Irish government so they make sure institutions don't get too big to fail, then when they get it wrong, let 'em fail.

    The regulatory failure is the government's fault, hence I feel sorry for the people.

    However, are people really so different to bankers?

    * Short term gain over long term stability
    * Forget the moral compass and follow self profits
    * Never mind about shareholders lets hollow this thing out

    These could be about bankers or voters who choose politician's who promise the earth at the expense of a deficit.

    So as I said we sorted banking out - hooray! How about the deficit Hawkeye? Or aren't we allowed to mention that because it's not the banker's fault? And because it requires hard choices and we haven't finished sacrificing our straw man yet. I look forward to your thoughts :-)

  • Comment number 30.

    #29

    I agree. The trick has been to suck everyone in to the take-take-take society. Regulation has been there in the past to save people from themselves. It's a social convention to prevent a self-destructive outcome (i.e. if everyone tried to maximise their self interest it would lead to a collectively sub-optimal solution - look up the Tragedy of the Commons & also Easter Island collapse).

    Removing regulation was (as you suggest) only half the problem, as most people share the dream of becoming the rentier class. Rather than be discouraged (through regulation or tempering of expectations through society and role models) it has been actively encouraged and glorified (e.g. BBC property programmes pimping the housing market, or portraying the elderly generation as bitter & miserly, when we could have a learnt a lot from their scepticism of Utopian promises). Instead the rationale resorted to is "we're just giving the people what they want".

    Anyhow. I did posit a solution to the deficit yesterday. Convert creditors to shareholders and restore symmetric risk & reward. See below:

    http://www.bbc.co.uk/blogs/newsnight/paulmason/2010/11/euro_big_wednesday.html

  • Comment number 31.

    @28 DebtJuggler

    Afternoon! :-)

    (1) I think it's pointless to apply modern value judgements anachronistically.

    (2) I think that Swift was referring to the fall of Jerusalem and Galilee to Vespasian/Titus and the story of Flavius Josephus. In which case he would have effectively been referring to "those" Jews, rather than "the" Jews in general. This is my guess, but I'm not certain.

    http://en.wikipedia.org/wiki/Flavius_Josephus

  • Comment number 32.

    Received from an Irish friend today:

    "It will be interesting to see how the Irish people take it, with the two main national papers calling for mass demonstrations at the Parliament. This is likley to happen on Saturday and continue aftewards. there are some who think that its time to do to the Parlaiment what the mob did to the Britsih Embassy in 1972; burn it down. The media, especially abroad, are not getting the public mood, not helped by the two idiots leading the Government, Cowan and Lenihan."

  • Comment number 33.

    Hi Hawkeye. Ok I'm not disagreeing with the shareholder thing. Again imagine we do it. Hooray for us. We saved the day twice now!!

    So, that wipes out the debt. No interest payments. But we still have a trade deficit that means we borrow billions a month to keep our population in XFactor t-shirts. So do we offer them shares next month. Then the month after that. And again. I'm thinking this isn't sustainable. So here we are, back to the deficit.

    I'm saying your suggestion doesn't sort the deficit. And I'm asking how you would. I'm saying cut government spending from socialist maniac levels.

  • Comment number 34.

    #33 Ben

    Long term benefits claimants are just one part of the non-productive sector in our economy. There is bigger fish to fry as our western lifestyles generally are unsustainable. Ostracising a large chunk of the population isn't tackling the big picture, and exaggerating an already large income / wealth gap will only make things worse in the end.

    If you've never come across Max Keiser then I strongly recommend this recent episode. The 2nd half has Nicole Foss:

    http://www.youtube.com/watch?v=cTdLgtzD9eU&feature=player_embedded#at=889

 

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