2010-11-14

Will the young pay?

A nice socionomic indicator from the Guardian. I want to look at the politics and economics first though.

Even before the financial crisis, the amount of government spending required to fulfill promises to retirees was expected to trigger political conflict. In the case of a small county such as Ireland, where there's a strong history of emigration, the question has become whether the young will even be there.

Ireland's young flee abroad as economic meltdown looms
Kelly, of University College Dublin, was laughed at, scorned and even threatened when he correctly predicted, as long ago as 2007, that Ireland's property bubble was heading for a spectacular explosion.

Now he is forecasting mass mortgage defaults and an ugly popular uprising. The first stirrings are already visible, he says, with "anxiety giving way to the first upwellings of an inchoate rage and despair that will transform Irish politics along the lines of the Tea Party in America", giving rise to a new "hard-right, anti-Europe, anti-traveller party".
To the Guardian, where the story comes from, this is tantamount to Armageddon. However, anti-Europe probably would mean anti-bailout, which means Ireland could follow the path to rapid recovery enjoyed by South Korea and Russia in the late 1990s.

Mark Ward, president of Tallaght's student union, says that 1,250 students are leaving Ireland every month. One in five graduates is seeking work outside the country. The Union of Students in Ireland believes that 150,000 students will emigrate in the next five years.

Ward, a 26-year-old marketing graduate, said: "The government's to blame for bankrolling the banks who were lending to their property developer friends. They all thought the party would never end.

"Students shouldn't have to pay for the mistakes of the government and their developer pals. It's going to take years to sort this mess out and it won't be just my generation which will be blighted big time."

Is the social fabric of Ireland beginning to unravel? The Kingdom, one of the country's much-loved local papers, recently reported that nearly 200 Gaelic footballers and hurlers have left Kerry to play in Britain, Australia and the US in the first seven months of this year. The true figure is probably double that.

The charity Barnardo's said that children were asking it for food because there was not enough for them to eat at home. "Some of our services are being asked by children if they can take food home for later because there just isn't enough," said Carmel O'Donovan, a project co-ordinator with Barnardo's.
Folks who say the U.S. will be a Third World country if the currency rapidly devalues are definitely speaking in hyperbole, but with a grain of truth.
"I hope I don't get sick in the coming months because there'll be nobody to tend to you in the hospitals. Of course, a lot of people would be heading across the Irish Sea or the Atlantic if only they could sell their houses, but we can't do that either. So basically we're stuck on the Titanic as it goes down."

Next month the government will deliver its latest austerity budget with the aim of slashing a further €15bn from public spending on top of the €14.5bn it has already been forced to cut. But Kelly has argued that the public sector cuts are "an exercise in futility" when compared with the €70bn bill for Ireland's bad banks. "What is the point of rearranging the spending deckchairs, when the iceberg of bank losses is going to sink us anyway?" he asked in the Irish Times last week.

Put at its starkest, for the next six to seven years, every cent of income tax paid by Irish citizens will go to cover the banks' losses.
The article is a nice indicator of social mood as well. Nothing has changed for Ireland. The same crowd of economic forecasters who called the housing bubble and continue to warn about banks and government spending have never changed their tune. It was the rest of the world that followed the social mood towards greater optimism in the wake of bailouts from the European Central Bank.

Social mood is clearly on the decline and this article is one sign. Whereas Ambrose Evans-Pritchard and others will sound the same, having been bearish for some time, expect these stories to bleed from the business section into the culture and main sections of newspapers. Also, look for harsh and apocalyptic language as the media's favorite oxes are being gored.

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