Speaking of cartels, I heard a media specialist saying on the radio that web based media had not created as “much value” as it had destroyed. i.e. the internet does not generate as much advertising and subscription revenue as the print media. I found it quite humourous that the business journalists discussing it saw this is a bad thing and discussed it in terms of value being destroyed.

I can imagine that if a set of professionals and professional services were made redundant by advanced web services there would be rejoicing in the media and it would be described as variously increased efficiencies, removing transaction costs and a cartel busting. Obviously, I am not painting you with that brush given that you are a practising media value destroyer !

@al
Now at the ECB , Gabriel Fagan did a nice paper in the JSISSI in 94 “measuring the size of Ireland’s Black Economy”. Its at http://hdl.handle.net/2262/2179
He concludes

“The available evidence indicates the existence of a significant black economy in Ireland. National accounts discrepancies together with official adjustments to allow for unrecorded incomes are consistent with the existence of a black economy amounting to around 5 to 6 per cent of GNP in 1992 while estimates based on various monetary based approaches suggest a range of 8 to 10 per cent of GNP for the same year. It is noteworthy that the various monetary indicators suggest that the share of the black economy rose significantly from the 1960s to the mid-1980s inline with an increase in the tax burden before falling somewhat in the remainder of the decade.
While black economy activity may result in some underestimation in the level of GNP, there is little to suggest that its growth rate has been markedly affected. Thus Feige’s claim that the size and growth of the black economy invalidates the use of official GNP growth rates for analysis and policy purposes does not seem relevant in the Irish case.”

Now, revenue are significantly more “tooled up” than in the past but even if this figure was to reach half of Gabriels estimates thats a serious chunk of activity.

“sustained emigration hitting at the families of even the politically privileged”

The offspring of the politically connected and financially sound may be the only ones who can take the emigration route.

For those who don’t have political clout or money emigration this time may look bleaker than the 50’s. The outside world has changed. I think this time a lot of young educated people will stay put, or return after working out that the world has become a lot more ugly. There may be a social upheaval as well as an economic one.

“Nobody has any desire to really really take an axe where needed.”

But Brian,

They know something you don’t.

The economy is going to grow at 5% compound for the next five years.

Property “values” increase. NAMA is hailed as the foresight of genius. Banks are made solvent. Government in fiscal surplus. Windmills for everyone in the audience.

Yea of little faith.

IMHO, if government starts increasing taxes, those with regular wages will want all sizeable transactions done in ‘cash’, while those on the other end of the transactions will be under pressure to knock off the vat/ do the transaction off the books etc.

I am unaware of any research work done on this, perhaps it is difficult to do so under the gaze of Revenue.
Alot of the construction industry will be in the shade for a few years before emerging back in the ‘white’ economy.

Al

“I see this weekend that some economists are calling for €5 billion in cuts (or savings) to be made in the budget.”

Pat, and that’s just for 2010. €4Bn for 2011 and another €3Bn for 2012. (cuts or tax increases).

In addition, the Social Insurance fund will need to be replenished and some progress needs to be made in paying back the debt that has been taken on.

If some elements of the G20 have their way, banks will have an absolute leverage limit so the scope for Irish (and other) banks to fund the deficit through repo will diminish, short of further capital injections. So the risk of rollover problems increases for the state.

Finally, if the world economy does recover, we will see a pullback on exceptional liquidity support and a rise in interest rates (probably in that order?) which will put further pressure on current finances. We should not bank on inflation being any help given the ECB commitment to maintain it at an average of 2%.

So if the cuts were to fall proportionally, this would see 180,000 public servants lose their jobs (total numbers around 360,000 including health?). I can’t see this as either a realistic or a desirable outcome.

Where then are the cuts to be made and on what timescale?

http://www.progressive-economy.ie/2009/10/exchequer-returns-fairy-godmothers.html

http://www.economist.com/opinion/displaystory.cfm?story_id=14548855

Caution is certainly in order and on a BBC World Debate from Istanbul this evening, Goldman Sachs economist Jim O’Neill said another US stimulus may be needed in 6 months.

Who knows?

Optimism is good as well but it’s always relevant to consider what is not being said as well as public positions.

It was interesting during the Lisbon campaign how business groups and some companies got directly involved in the campaign but they steer clear of commenting on general domestic policy or the lack of it

Stockbrokers and big business generally strongly supported the drift of policy during the boom.

Who wanted to risk a shilling in the game?

One forecast that is likely to be realised is that stockbrokers will not identify cuts that will hurt various business sectors but the vested interests range from hospital consultants, professional cartels and across the spectrum to farmers.

Great to have a range of views on the site.

well the September live register are obviously a green shoot, though obviously we need to understand a bit more how the numbers are getting to where they are and if there are any significant explanatory factors. The surprisingly less bad GDP figures are also postively noteworthy, and combined with the jobless data led most commentators to significantly upgrade their economic assessments for next year. Yes, its only small crumbs and could still turn back down, but like i said, we have to explore the chances of it continuing to improve/stabilise just as much as we have to consider it being a blip and the downturn continuing.

Re the huge queues for the temporary work. I think the positive we can take from this is that 2 yrs ago the same people would’ve refused these types of jobs and instead looked to be real estate agents or builders or something involved in the property sector. I know its not nice to be in that queue, but i think an adjustment in our attitudes to pride and what we’re willing to work as is going to be an important part of our recovery process. I currently know a guy who is sitting at home on the sofa ‘waiting’ for a 60k+ a year job to just arrive on his lap.

I cannot see any of those outlying suggestions. Watching the qualified people lining up for temporary Christmas jobs really brought home to me the extent of the malaise. 500 million a week borrowings (up from 400) demonstrates deterioration to my simple mind. A Government doing nothing but talk- the Greens with their escalating demands as the price for staying in Government - none of this would inspire confidence. |The unions threatening chaos - the taxi guys causing chaos -show me the green shoots please.

well i’d call that more an ideology issue rather than a bias issue. We all agree (apart from David Beggs, aparently) that we have to get the deficit down, and quickly, but there is lots of room for debate as to how the mix of tax and expenditure changes get us there. My point was more that if a professional economist at a bank or stockbroker comes out with a positive spin on either policy or data, then its generally greeted with at best scepticism and at worst complete rejection by a lot of the nay-sayers prevalent on this site. At the moment most commentators on this site are still quite (or very in a lot of cases) downbeat about the prospects for recovery, but very often in life and economics its the outlying suggestions that signal the first signs of the change in the trend (ie recovery). This is as true now as it was when Morgan Kelly was ahead of the curve in predicting the crash in property prices.

Brendan Keenan’s article on the deficit in todays Indo states “Exchequer borrowing is now set to reach €500m a week this year”.
The response from banks and stockbrokers-
Simon Barry, chief economist at Ulster Bank, said the €4.75bn in spending cuts and tax rises in the December Budget must now be seen as the “minimum to be achieved”.

Alan McQuaid in Bloxham Stockbrokers said the cuts in the McCarthy report must be made sooner rather than later.
“If this mean conflict with the public sector unions, so be it. The Government needs to put its foot down and show who’s boss,” he said.
Its not that the contributions from these people are meaningless, its simply
that they are so obviously biased.
Bail out the banks and their shareholders - massively cut essential services
and impose draconian tax increases. Now that solution may appear right to the bank and stockbroker economists but I venture to suggest that even the IMF might baulk at inflicting this level of pain on the citizen.
This small bunch of bank and stockbroker economists have far too much influence and are being constantly quoted without meaningful input from other less partisan economists.

agreed re Dr Fitz. I recall comments being made on thie site about him living in his sons basement and lots of suggestion that some preferential treatment by AIB way way back in the day had influenced his current line of thinking. There was also comparisons with Nixon in terms of ethics, that he was arrogrant, fatuous and not competent to comment on NAMA, and that he should “depart the stage”. It was pretty shameful stuff to be honest, and while the vast vast majority of people posting here were very civil, there didn’t seem to be as much hoo-hah about those comments as there is about your far milder and more reasonable ones.

I really don’t see that I was that personal or rude in my posts above, but sincerest apologies to anyone offended if it came across that way. I am that rare breed, (a strongly pro-United Ireland Northern Protestant), so it is possible that, along with the rest of my tribe, I am a bit more blunt in my use of language than the softly-spoken well-mannered people south of the border.

In my first post relating to the Garret Fitzgerald v Karl Whelan clash, I merely pointed out that it now looked as if Garret was correct. At the time of the debate, there were very offensive comments posted about Garret Fitzgerald (who is Ireland’s greatest-ever statesman, in my opinion), alleging that he was a bit senile at age 83. I am not referring so much to this site, as other sites. There were just one or two such comments on this site. But, I specifically excluded the ‘gang of 46′ from this. I said in my post: ” the gang of 46′ themselves were a model of politeness (fair play)”.
As for the phrase, ‘gang of 46′, I’m sure most people just treat that as humorous.

In my second post, addressed to Dreaded_Estate, I merely pointed out that he had upped his forecast considerably since August and that his latest one was much more optimistic. I can’t see where I was personal or rude. In fact, I congratulated him on doing so and suggested that his greater optimism might be due to reading my posts (that was just a joke). As a statistician, I think it is a sign of an agile mind that, when newly-published data indicates that your previous forecasts are likely to be wrong, you change your forecasts. I do it all the time myself as mine are often wrong. I wish that politicians would follow the same practice. In my statistician’s mindset, saying that he had changed his forecast was not intended to be in any way offensive. But, if Dreaded_Estate thought that I was being personal or rude to him, again I apologise. Just to note, his and my forecasts are now quite close (31.6bn v 32.9bn).

I don’t remember that I’ve ever been deliberately personal or rude about anyone who posts here, although I’ve often disagreed vigorously with them. But, again, apologies if, in the heat of the moment, it came across that way at any time. The only people I’m ever personal or rude about are Morgan Kelly, Vincent Browne, Declan Ganley, Gerry Adams, and that silly woman who runs the Shell-to-Sea campaign in Mayo, whose name I forget and have much better things to do than to try and remember right now. But, apart from Morgan Kelly (whose views on Lisbon I don’t know), the others are now licking their wounds after their well-deserved humiliation in the Lisbon referendum, so I will lay off them for a bit.

What I am concerned about is the risks that are being taken by the government both with the deficit and with NAMA. Public spending is still rising. Public income (despite large tax rises) is still falling. The national debt is still rising and Anglo is, as yet, an unqualified drain.

I fail to see the bright side in any of this for taxpayers?

Most on here are simply calling things as they see them, whether that is positive or negative.

I’ll admit that things are slightly better than I thought they would be but they are still absolutely terrible.
And we are really only splitting hairs about the differences.

i have no issue with you providing downside figures. They are of course extremely important contributions. However i wasn’t aware that this was a purely anti-government sounding post, or a blog dedicated to delivering negative scenario analysis. I would have thought that there was just as much onus on the contributors on here to look for positive developments as much as negative. In the end, the true picture can only be found by looking at ALL developments, positive or negative. Do you disagree with this assertion?

Also, not entirely sure where the “do you really work in financials” fits in with the “no personal or incivil attacks” clause we’re all apparently supposed to be adhering to.

And having answered that question, we can then discuss how the answer to such a sum might lead to a biassed estimate of what the 2009 figure will in fact turn out to be.

Incivility is not acceptable on this forum, full stop.

The government is providing upside figures. It would be irresponsible not to provide downside figures. Some of these same naysayers gave their downside figures a year and more ago. Those figures have been met and exceeded.

What figures have you given for the budget deficit? For government income? For unemployment? For GDP & GNP?

The Exchequer borrowing requirement for 2009 is now likely to be at least €26 billion. This comprises the €20.35 billion borrowing requirement cited in the supplementary budget, the €4 billion that was subsequently injected into Anglo Irish Bank and an additional €2 billion as a result of the tax shortfall.

Is this correct or is the 4 million to Anglo already accounted for in the 20.35 bn? If Irish Times report is accurtate, then were the 46 guys not closer than Garret Fitz Gerald in their estimate?

There are people clouding the issues of fact and trend as they have additional interests to protect. Not all of the glee club are anonymous, shrill (DeLong-ism) shills. But many are. The IP addresses are known. If they were to be exposed at the right time, and linked to physical addresses, etc., the identities of the shills would become apparent and usefully expose their true interests.

But it would not change what is going to happen to the wider economy. It might alter perceptions on the matter of Nama! Particularly for those who do not appreciate that not all opinions expressed here are as honest as mine! There may be paid advocates twisting and moulding as fast as they can. There is after all, 60,000,000,000 euro at stake! There are a lot of crumbs to fall onto the floor here. Sadly, Irish taxpayers will be providing this money.

Expose shills? They have been given rope ……

Only when income taxes are high, will cutting public expenditure impact strongly upon revenue. So cutting expenditure may be premature, given that high taxes are coming. Obviously.

Deflation is taking hold and therefore a cut in public pay of 10-15% is appropriate. There was a precedent in the thirties. This time it is worse!

Obviously!

“The yea-sayers who got us into this mess have received plenty of abuse - and probably rightly so in many cases - so I think it should work both ways.”

Thanks for that, Concubhar, it gives me some clarity on the ad hominem attacks.

You are of course right. One should not accept at face value the yea or the nea.

I prefer to stick to facts if I know them and open my opinion to ridicule if I do not have fact.

I find I learn more that way.