Monday, May 28, 2012

(Opinion) Bad Laws and the Great Irish Debt Trek

People can argue eternal how to create opportunities for growth but nothing compares to the power of a badly thought out law to start new growth industries. 

Badly thought out laws have single-handedly started growth industries with no better example than the US prohibition of alcohol in the 1920's and early 1930's which made millionaires out of criminal figures such as Al Capone and anybody prepared to exploit a product everybody wanted but were told they cant have. Another badly thought out law has started another growth industry in writing off Irish debt.

This is due to Ireland's punishing regime regarding bankruptcy which has led to UK and Irish law firms exploiting the UK's comparatively lax bankruptcy laws, writing off debts running into the billions. This is good for debtors who would face years of hardship under the Ireland regime but disastrous for creditor and the Irish  taxpayer as they stand to lose out.

Creditors are duking it out in the courts as they seek to stop this growth industry which to see banks make major losses in unhealthy climate for banking institutions and banking in general. The 21st century already looks to be a miserable century for banks as the markets, and more importantly, depositors have very little confidence in them as their hard earned money has lost value, are punished for saving due to low interest rates and the notably hostile nature banks have towards borrowers.

However, this booming industry seems restricted to Ireland debtors and is likely to put under considerable pressure  when the Irish government draw up bankruptcy law reforms guided by common sense and not moral fortitude.

In conclusion, badly thought out laws have started many growth industries in the mainstream and underground economy and many shady character have flourished but these laws have a tendency to be corrected when the consequences become hard to ignore but by then it is too late. In an era where banks are looked upon unfavorably, a growth designed at bailing out borrowers through the courts does not help, but in light of the government's extensive bailout of banks, it about time debtors found theirs. 

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