Remaining residents should celebrate people going home or abroad as the economy at any given time has a certain carrying capacity depending on how much credit money the banks decide to produce
During the boom the GNP was high but Irish nationals did not see all of this given the immigration rate - now that the banks have decided to contract the money supply the present economy cannot sustain this larger number and therefore the remaining population will have a larger proportion of a admittingly smaller cake.
We are a slave to global capital movements and therefore domestic planning and governance are but a side show in comparsion to such raw power wielded by our money masters.

Remaining residents should celebrate people going home or abroad as the economy at any given time has a certain carrying capacity depending on how much credit money the banks decide to produce
During the boom the GNP was high but Irish nationals did not see all of this given the immigration rate - now that the banks have decided to contract the money supply the present economy cannot sustain this larger number and therefore the remaining population will have a larger proportion of a admittingly smaller cake.
We are a slave to global capital movements and therefore domestic planning and governance are but a side show in comparsion to such raw power wielded by our money masters.

A small island of 6.25 million.

“Projections over the next few decades” : Statistical heresy!!!!

Motorways criss-crossing a small island with 5 million people: Bad idea

What ’small island with 5 million people’ have you got in mind’?

Can’t be the island of Ireland, as population of the island of Ireland is currently over 6.25 million and projected to rise to 8-10 million in the next few decades.

To my mind this is almost inevitable given the size of the monetary base and currencies tendency to zero credit money expansion in the long run which is just consumption brought forward in the hope that resources will be present in the future.
Why do we assume such wild fancy in our econimic calculations?

Because the life span of most major infrastructural projects is several decades, if not centuries, the idea that a cost benefit analysis will give you any useful insights if totally absurd.
My suggestion is to use a bit of “cop-on” instead.

here is a start:
Motorways to relieve traffic congestion in major cities and dissipate traffic to commuter towns : good idea
Motorways criss-crossing a small island with 5 million people: Bad idea

A lengthy document produced by the London Energy Partnership on the prospects for setting up ESCO’s. It offers a number of case studies with practical conclusions, and discusses the ways of providing finance to local authorities. BOH.

http://www.cibse-epg.org/downloadable/industryInformation/otherOrganizations/resource/0702_LEP_MakingESCOsWork.pdf

‘The problem is that now the government has announced its intention to lease property, a vast number of properties will rise in value automatically’

That’s the theory. But you have to factor in the sovereign fiscal position.
Them promissory notes are a divil.

You seen to have no idea what money really is - it is a token for energy yet to be used.
We are now losing more money then what we are making in this world economy because the investments globally are now net energy negative not really because of the high price of oil but because global capital extraction has reached a peak and is now declining therefore the debt nature of money has to change into capital. Real capital construction and not mass road infrastructure which is a form of state or corporate welfare needs to be phased out rapidily as the remaining credit money will destroy the remaining capital in a hyperinflationary event.
This process is perhaps unstoppable now but your policies will just make the problem even worse.

You seen to have no idea what money really is - it is a token for energy yet to be used.
We are now losing more money then what we are making in this world economy because the investments globally are now net energy negative not really because of the high price of oil but because global capital extraction has reached a peak and is now declining therefore the debt nature of money has to change into capital. Real capital construction and not mass road infrastructure which is a form of state or corporate welfare needs to be phased out rapidily as the remaining credit money will destroy the remaining capital in a hyperinflationary event.
This process is perhaps unstoppable now but your policies will just make the problem even worse.

Fintan O’Toole summed it all up yesterday.
They don’t do Cost Benefit Analysis because it would stop them making political decisions.
Minister Cullen delivers on a motorway to Waterford.
Minister Dempsey assures us the railway to Navan is still on track.

This is just the usual Fintan O’Foole nonsense. A man who spent the past 20 years of economic growth whinging about everything, who spent the past 2 years of economic recession whinging about everything, and who’ll spend the next 20 years of economic growth whinging about everything.

The fact is that it is not always possible to do a narrow economists’ type of cost/benefit analysis because, while the costs can usually be quantified pretty precisely in monetary terms, the benefits can not.

Example: the national motorway network

Along with other road development, this has led to a huge reduction in the road deaths rate in Ireland. In 1997, before the development of this motorway network, the annual road deaths rate in Ireland was 13.5 per 1,000 population, one of the highest in the developed world. In 2010, it looks like it is heading for 4.5 per thousand population, one of the lowest in the developed world. The number of road deaths annually in Ireland is now about 400 to 500 less than it was in the 1990s (after adjustment for population increase). How can this sort of benefit be quantified monetarily, although no doubt some economists will pretend that it can?

Ultimately, the decision whether or not to proceed with such projects is a political one, with the decisions being made by politicians responding to the wishes of the people - in other words, democracy. The decision should not be left to economists, applying some magic formula taken from some text book on cost/benefit analysis. Thank God we had a politician of vision in Bertie Ahern who was determined to give Ireland a world-class motorway network, despite the virulent and frenzied opposition of wacko environmentalists, idiot left-wing commentators like O’Foole himself, and various academic economists. The massive reduction in road deaths is the result.

Some very strong input above - and I can judge quite easily from the above, there are going to be some fairly blunt debate on the issue of infrastructural development in Ireland, over the coming decade. Thanks for sharing views to all. BOH.

We must at least plan for nodal development to sustain some semblance of a industrial society while we still can.

But that’s not what that article was about. It was about the allegedly pernicious effects of rural voters on sensible political decisions. Urbanites are right because their current demographic trend is on the up. Rural people only want to drive drunk and have train stations in their garage.

It was self-indulgent balderdash, built on nothing more than a contempt for people with a different lifestyle and values.

The problem is that now the government has announced its intention to lease property, a vast number of properties will rise in value automatically.

It is simply naked manipulation of LTEV efforts, such as they are, beign pursued by NAMA.

The reason why leasing is so important, and I think this really needs to be drilled into by the media, is that a lease is an income stream. In order to borrow from the banks, in the commercial world, an income stream has acquired much greater (more normal) significance than it did during the ‘Tiger’ (bubble) years. By creating income streams for developers, not only is the government (taxpayer) bailing them out on the double (NAMA + Long term lease with residual value) but it will also enable some of the same developers to go back into the market and in cases buy back some of their original assets at much reduced prices because NAMA will eventually have to put its assets on the block in staged firesales.

The initiative is no more and no less than another political scam to divert more taxpayer’s money (and how much will be borrowed to meet leasing costs?) into the hands of developers and artificially crank up the wealth of the construction industry.

The article might be elitist but sometimes the elites are right.

I speak as someone with family connections to both the Up Mayo and the Cost Benefit Analysis modes of politics.

Fintan O’Toole summed it all up yesterday.
They don’t do Cost Benefit Analysis because it would stop them making political decisions.
Minister Cullen delivers on a motorway to Waterford.
Minister Dempsey assures us the railway to Navan is still on track.

It was bad enough when we thought we could afford it.

And look at the alternative - a vacuous Labour Party and a 50.01% of FG that believes in “Up Mayo” politics that will no doubt “deliver” on the Western Rail Corridor and a west coast motorway.

Sarah Palin and her Bridge to Nowhere seems like an intellectual colossus
compared to most of these eejits.

They will be too busy digging spuds to take the time to read that little footnote in history

http://www.econ.ku.dk/okocg/Students%20Seminars%C3%98kon-%C3%98velser/%C3%98velse%202007/artikler/Flood-Hodrick-Bubbles-JEP-1990.pdf

Irish economists are now in a unique position to put the spotlight on rational and irrational expectations in a severe downturn. FF headed for damnation or redemption in the third year of downturn. Irish polticians paralysed by delirium tremens as cynical Irish public snub positive spin that worked so well up to 2007. Speculative self destruction resulting from rational expecations.
There is a place in Irish literary and economic history waiting to be filled.

Very good reference on the above - Norman Bodek and anything by the author in relation to quick and easy kaizen. BOH.

Good post. The interesting things to my mind are where there are cross-overs between several infrastructural investments. You get a kind of multiplication of returns, I would argue. For instance, transport infrastructure which enhances accessibility to health care. Road infrastructure which relieves pressure from Victorian built city centres (which were designed around horse and buggy locomotion). The really big one at the present I guess, is our energy generation infrastructure is reaching the end of its useable life, and needs replacement anyhow. Flood defense for instance, are also relics of our history. How much is lack of investment there going to cost. The argument in Cork city for instance, it is nonsense to see the ESB managing a hydro generation facility for 2.0% of the city’s power needs. The hydro dam infrastructure aught to be viewed as part of the city’s flood defense strategy, and its value as an asset would be increased dramatically. There we are not talking about asset disposal so much as asset re-evaluation for the next century. In terms of rivers, I would argue the big spade and shovel approach to river management needs to be offset against other considerations, such as rivers as corridors to ensure biological diversity and maintain overall stability of our ecosystems. There are green natural infrastructures which are valuable as well as engineered manmade ones. Except we need to manage our natural infrastructure over a long time frame. The average lifespan for a new road bridge is 150 years, and it needs to be disposed of.

Many people who argue against expenditure on renewable energy generation, point to the fact that it is very expensive. Indeed, there are some good arguments to that effect and we do need to be careful. But what is often left out of analysis, mistakenly, is that our old coal/oil/gas burning infrastructure has reached the end of its lifecycle anyhow - so it isn’t merely a choice of working away with what we have got - we need to replace it with something. The trouble today is that the power stations tend to be move to the fuel - rather than the fuel being moved to the power station - and that in turn influences decision making, with regard to the superhighways needed to transport the power from point of generation to points of consumption. Which are very far away from one another. The nuclear advocates can argue that if we go down their route, our existing investment in transport infrastructure for electrical power remains viable and we don’t need to built any new superhighways. The other side of the argument seems to be, if we go down the renewable energy generation road, there is a much better chance we can own the technology, develop it and gain expertise in that area.

Anyhow, this is a very big area for discussion and I have enjoyed sharing some views with you people. In 2009, when I found myself between occupations, I attended several seminars, approached many experts and investigated many investment programs and framework documents. But nobody is doing that at present. As a nation we tend to assume that things just come together by themselves - when in fact they don’t - things have to be brought together through effort. The northern peace process being a prime example of where we failed miserably for decades, at considerable long term cost. I began to wonder, why no one in our vast public service have not been encouraged to look at coordination strategies. To try and join up some of the conversations, and get a real picture of different groups who are working on similar problems from different points of view. I think our government is too strong. Our power structure is too centralised. We wait for an Taoiseach to deal with the minutiae of our problems. That is our achilles heel in Ireland. We tend to value our privacy a bit too much, and are content to work away for 30 or 40 years on our own little departments - with some union boss figure at the top, as our patriarch. The system must incentivise that behaviour, and must punish the opposite. More is the pity, it will cost us more and more, further down the road. BOH.

Your false analogy completely misrepresents Colm McC’s argument. His argument was that economic activity is severly down - and will be for many years - over projections made in 2005/6 for the period in question. Such is the extent of the drop in activity, he argued, that the projected requirements for capital investment ought to be revised downwards.

Yet I tend to disagree with McCarthy. The drop in capital use - at ports, airports, and other transport networks, may have overshot on the way down, and might rebound quicker than expected. Exports and car registrations for example are considerably higher than last year we thought they would be now. But even if the rebound is slow, the other flaw in McCarthy’s argumentis that it assumes we had roughtly aqequate infrastructure to begin with.

True there has been an enormous improvement in our road network, but it remains the case that our public transport network, right across the country, is utterly lamentable in comparison with say France and Germany. And I don’t just mean the main routes between cities : obviously the main routes in those countries justify massive investment. But I mean on a more local scale. In many parts of rural france you can still pick up local train services and efficient bus services. Here, on the other hand, unless you are travelling from one of about four cities to Dublin, there is barely anything. Try getting from say west donegal to Westport. Our rural transport networks are abyssmal.

But the focus ought not be on transport alone. What other kinds of infrastructure do other countries have to a very high standard that we haven’t. What about social infrastructure such as creches, libraries, swimming pools, schools, etc.

Even looking at a purely economic angle, many of these items do in fact provide good returns. For example a study in California showed a return of $2.60 for every dollar invested in providing universal pre-school education. Few would argue that most of these items of social infrastructure do provide good returns - and over a long term.

Despite the downturn then, I would argue there are many areas of infrastructure where we lag our european counterparts.

The trouble isn’t, as McCarthy would have it, that the downturn means we no longer need large investment in infrastructure. The real problem is finding the money at the right price : the very question which has featured so much on these pages.

‘If this was a plan [NDP] for a farm, and it emerged that the scale of operations had to be adjusted to three-quarters of the previous assumption, that extra shed would get cancelled for starters.’

The crop has failed in one out of four fields. Colm’s answer is never sow there any more. Slaughter some of the livestock. And increase the tick at the grocer’s.