I will give them the merit they deserve given your relationship with colleages and sudden departure from the LC group.

Maybe instead of rabling on LC’c work on an economics blog you should consider looking for an architechural/construction blog where you can vent your feelings about where he went wrong.

It is not relevant to an economics blog at all - except for the fact that we are here in Ireland (at least I am at the moment), and every man, woman and child on the island has been lumped with the debt burden from a construction industry they had nothing to do with. I other words, 99 out of 100 people on the island at the moment, have become un-willing participants in a property casino against their better wishes. If that is relevant to the ‘economics’ on an island, I don’t know what is. Because if we decide to go down the regional boom route, in our policy approach, it might leads us to come to the same conclusions as major property developers in Ireland did in the past. I.e. That we need to provide residential, and hotel space, and retail space, and office space for the influx of all of that foreign capital and people onto the island. Any of that sound vaguely familiar from the last decade of Ireland’s economic development?

On the other hand, if we pursue the policy approach of the convergence theorists, which talks about Ireland catching up to the rest of the world - we are more likely to saddle ourselves with the risk of constructing large renewable energy infrastructure, and other forward thinking stuff. My own believe is that both strategies (based on their associated theories of convergence or regional boom, will lead to increased employment and GNP upturn in the short term. But will either approach lead to something sustainable? What was really worrying about the the regional boom phenomenon in Ireland of the 1990s and 2000s, was not the fact that it didn’t lead to sustainable economic well-being for the inhabitants of the island. But rather it lead, to something a lot worse. To a situation, where we will spend the next 10 years trying to do damage limiation on stuff that happened for the last 20 years.

The net result would be to assume, that if Ireland had done nothing at all for the last 20 years, we would probably be in a better position today. We now face the incredibly bleak prospect, of having to run, just to stand still. If any of this doesn’t seem relevant to economics, please pull me up. As for venting of feelings - I’ll leave that to the real movie actors or politicians.

As for this: ‘Agreed rules of measurement’ have nothing to do with economics in the architechtural world that you are talking about. Go have a proper look at the public procurement contract and come back to me. Whatever responsibility you hope to assume in the economy, or in construction in Ireland, over the next decade, don’t neglect doing your homework. That is all I am trying to get across. Just a friendly word of suggestion. All the best. BOH.

‘Agreed rules of measurement’ have nothing to do with economics in the architechtural world that you are talking about. Maybe instead of rabling on LD’c work on an economics blog you should consider looking for an architechural/construction blog where you can vent your feelings about where he went wrong.

I’ve an economics background myself

Delighted to hear that. One thing the sudden death of all the developers has shown to me, is the gaps there exists between various disciplines involved in construction. It is impossible to devise a solution for the construction industry, when one half of it doesn’t even know what the other half is talking about. We have IEI running some parts of the contracts. SCS doing something else, RIAI doing something else, Dept. Finance doing it’s thing, and CIF going off in some other direction. And yet we expect it all to fall into place, when the rubber hits the road, with millions and billions at stake. It is like expecting an international soccer team to come together and compete, even though they all play different sports.

If you asked ten architects what is the ‘Agreed Rules of Measurement’ are, how many out of the ten would give an intelligent answer? I think you would have to make your sample as large as 50, before you found one or two architects who know. Yet, it is so basic. It is like an architect asking a surveyor what Le Corbusier’s five points of architecture are. About one in five hundred surveyors might have some idea. It seems to me, that basic knowledge in the various branches of construction is completely unknown outside of that discipline. And yet we talk about new contracts to enable/force design team members to collaborate to offer integrated project delivery? It seems like we have a very up hill battle to fight - and I don’t see many getting that pushed about fighting the battle either. BOH.

I’ve an economics background myself and still find your writing hard to decipher-but thats neither here nor there…

My guess is you were one of the slouchs working in the QS department. Never did see eye to eye with those guys!

Anyone who would pay any attention to my online contributions and work since late 2008, would jump to the same conclusion. I had only started at the bottom of the ladder working for Liam Carroll in 2006, and my research since then, has indicated the game was up for Zoe developments as of that date. Except many of the directors higher up the ladder needed at least until late 2009, to finally realise that fact. When I work for an outfit such as Zoe, I am a very different bloke, from what my online persona would suggest. I am actually good at taking orders, and hopefully never tried to push my opinions on anyone. Apologises also, for taking up so much space on the Irish Economy blog over the past year or so. The funny thing is, while hardened professionals who understand the construction industry find my writing impossible to decypher - when it comes to people who understand nothing about construction - they can actually find my writing quite enlightening. That was the sort of balance I had aimed for. To write something that a non-construction professional might be able to read and like, as opposed to writing something directed for consumption by the CIF, RIAI, IEI, SCS etc. I am satisfied, I succeeded in that sense during the course of a year - and provided some level of information for the many thousands out there, who find themselves unwittingly paying for mistakes, of an industry they weren’t part of.

I did spend several year of my life at Dublin Institute of Technology studying in the architectural department. The largest portion of the time was spent slouching. I spent most of my time after studying architecture on the coal face with various engineer and construction employers. Some of whom had emigrated years ago to the United States and become accustomed to that kind of approach. I fitted well into that scene. As you probably know Liam Carroll worked for the US multi-national consultant Jacobs engineering, prior to doing his own thing. He would have imported a lot of the US notions of how to go about building. I.e. Where the designers and contractors have a closer relationship. It is getting new life at the moment, and they have invented a cool new term called Integrated Project Delivery. Below is a link to a recent magazine article by Construction Management Association of America. From my basic understanding of how construction procurement works, Liam Carroll was aiming for a type of construction management system. And that in itself was very forward thinking, and he deserves credit in that regard. I would understand this a lot better, if I had not slept my way through the construction economics lectures in the 1990s. Even though I hated those lectures back then, I would say construction management is one of my talents and I could give those guys in the QS department a good run for their money. BOH.

http://www.nxtbook.com/ygsreprints/ygs/p14053_tgd_cma/#/20

As a former member of the Liam Carroll empire myself I’d be interested to know how high up the ladder you were? I have followed your posts over the past year and have found your ramblings to be at best hardtofollow.

My guess is you were one of the slouchs working in the QS department. Never did see eye to eye with those guys!

@ R Tol,

The frontier is indeed multi-dimensional. But state-of-the-art represents where Ireland sees itself. Will these other parts catching up keep growth higher than 2-3%?

It is important to distinguish the virus from the transmission mechanism. I would argue that the statutory powers and duties of regulation were in place. The virus was the unwillingness to use/policy decision not to use? these powers appropriately. Wrt to financial regulation in Ireland some relatively minor changes in organisation coupled with key changes in personnel at the top demonstrate that the powers and duties existed; they simply needed to be applied.

However, your point about the origin of the virus is valid, even if it mutated into a peculiarly Irish strain. Having argued that Ireland should be viewed as a regional economy within the EU (and is perhaps even more so now that monetary sovereignty has been pooled and fiscal and economic sovereignty almost completely compromised), I also recognise that in some respects it exhibits features of being a regional economy within the anglo-saxon sphere of economic influence.

Light touch “regulation” wasn’t a USP as much as a virus imported via the medium of English from the US and the UK. If Ireland had a different language other than English would the virus have been so prolific ?

“So the 50/50 split in imports to the US between Scotch and Irish distillers before 1919 became a lopsided Scotch one from 1934.”

And I used to think that was all old Joe Kennedy’s fault.

However, I agree with your take on the regional economy perspective. For me the clincher takes us away from the pure economic perspective when one examines the political economy of Ireland in a historic context. Ireland moved from being a regional economy (as a colony of an empire) through a phase of autarky that led to a slow opening of the economy (e.g., the UK-Ireland FTA) and then to accelerating integration in the EU project from 1973. I suspect those who favour the convergence theory are motivated, unwittingly or not, by pleasure in Ireland ‘taking its place among the nations of the earth’.

As EU economic integration progressively increased during Ireland’s membership - culminating perhaps in the Single European Act - Ireland needed to establish a Unique Selling Point (or a set of USPs). There is scope for much debate about the contents of this set of USPs - and the relative importance of each, but they were established for a regional economy within a larger economic entity.

Of course, some of these USPs proved to be entirely bogus and ultimatley disatrous (e.g., world-class, but light-touch, regulation of financial and other sectors) and some have proved to be only temporarily unique, since they have proved to easily replicable, but some remain.

http://www.irisheconomy.ie/index.php/2010/08/03/selling-state-assets/#comment-62849

Could you plase point me in the direction of the entry by Paul Hunt. I’d be very interested in reading any commentary on lobbying.

I have tried to look over a few days before the 5 Aug but I didn’t manage to find it.

Thanks in advance

What is that they say about two men running away from the bear? You don’t have to run faster than the bear. You only need to run faster than the other guy.

It neatly describes the Irish notion of competition in the banking sector. There was an interesting comment by David Murphy when interviewed on morning Ireland radio program. If you look at BOI in the context of other Irish banks it appears stable. But if you look at BOI in the context of other European banks, it does not look healthy.

It reminds me of the period in late 2008, when all of the Irish banks professed to be healthy, sound, well capitalised. They would not accept any assistance etc. Obviously, the Irish banks knew there would be a consolation prize (more optical than anything else), for being the best of a bad lot. The race to decide who was the best of a bad lot seems to be won now by BOI. But AIB nor Anglo were not willing to give in so easily in late 2008.

This should tell us something about our definition of stable and healthy enterprise in Ireland. At the end of the day, it is not about being the best in international terms. Despite what the government tells us about centres of excellence etc. BOH.

I think Frank Barry makes a compelling case for the Regional Boom Theory.

Like every other nation, we don’t like to consider our shortcomings.

I would say an important factor in our economic history is that we haven’t had a strong trading tradition and it’s evident today.

People picking up ideas from other countries and developing new businesses/ selling new types of produce.

Why wasn’t fishing an important industry?; it wasn’t because a diet of spuds, buttermilk and bacon every day was so great or the fish on Friday rule.

It’s striking that in 1933 when De Valera/Lemass were implementing measures to support native enterprise, the surviving Irish whiskey companies were not ready for the end of Prohibition. So the 50/50 split in imports to the US between Scotch and Irish distillers before 1919 became a lopsided Scotch one from 1934.

In the first half of the 20th century, the most significant new industrial enterprise was an FDI one — Henry Ford’s family plant (it was separate to the Ford Motor Co.) in Cork. It motivated Dunlop to open a tyre plant, also on the Marina in Cork.

Is it not very important to understand the reasons for our growth in th 1990s, to face the challenges ahead.

On one hand we should look to EU partners and aim to convergence on their best practice and wait for the economic benifits to arrive. Whereas, on the other hand, we should aim to outsmart our competitors with policies such as low corporation tax.

For instance, a big concern that I have at present is that the banking guarntee while been aimed at secureing the banking sector was also designed with a view to out-smarting and getting-one-over our neighbours (Foreign Cash apparantly flowed in after its initail annoucement). If this was part of the aim then that has that portion of the guarantee has blow up in our faces.

On the night of the guarantee the policymakers might have had a choice between aiming for convergence based on what they expected standard EU-wide policy to be, or they could introduce a ’smartarse’ guarantee with the aim of gaining a competive advantage.

In this sense is it not very important to know whether our stength is in our convergence or our innovation?

I wrote a blog the other day, in which I attempted to un-pack some issues with regard to semi-state organisations - and their need to communicate and coordinate with one another. Which is actually relevant to much larger countries such as China and the US, where policy in one department can have all kinds of un-intended impacts on others. BOH.

To distance themselves from the ‘local’, Irish governments talks about ‘international best practice’. They talk about introduction of proceedures which are deemed to be ’state of the art’. They talk about receiving advice from ‘international experts’.

http://designcomment.blogspot.com/2010/08/all-things-local.html

Is there any sense in the idea, that in Ireland we tried to resist the process of convergence for too long - and our political and social structure is geared almost exclusively to hope and press for regional booms?

The say when a new born is first conceived, that all of the ‘instructions’ for the creation of the entire organism are present at cell level. The region boom impulse seems to be something which is written in at the cell level in Irish society and our particular blend of politics. No matter how far we try to pursue the path of convergence on the island of Ireland, there is always a magnetic pull away from it, and back towards the boom mentality.

Maybe that is what has economists in Ireland so perplexed. It is highly possible, depending on where you look and when you look there - to see both aspects at work. My guess is, that as young people go through school they are exposed to the influence of convergence. As they grow older and mature, they are more likely to fall back into the pattern their parents before them followed, which is towards regional-ism.

How does one affect that? Does one want or need to affect that? BOH.

What is now the accepted theory of the causes of the Celtic Tiger. I thought that Honohan and Walsh’s - Convergence theory was the accpeted theory (I’ve read a lot on the decline of the Economy and most people start by starting that the intial growth of the Tiger economy represented Ireland catching up with its European peers); but I have to admit after reading Frank Barry’s piece and taken into account our current situation (i.e. being close to Uk, France etc doesn’t like like it’s going to be enough to kick start our economy) I’m more inclinced to go with the Reginal Boom theory.

However, I’d be very interested in hearing what the view of Irish Economic Community is.

Population growth on its own is not enough to either generate or sustain economic growth. If it were then you should be looking to buy into the Liberian, Burundian and Afghani economies because they, according to the UN World Population Prospects Report, have the highest population growth rates.

That’s why I said ‘all other things being equal’.

If two counties have roughly equal education and skills levels, roughly equal infrastructure, and roughly equal levels of government competence, but one has much faster population growth than the other, then the chances are that the economy of that one will also grow faster.

Compare U. States and Germany:

between 2000 and 2010, U. States GDP grew by 25pc

between 2000 and 2010, Germany GDP grew by 6pc.

I’d say that the much faster population growth in the U. States was a factor.

I am delighted that someone else is interested in this huge planning and environmental issues. But to be quite frank, the sheer scale of these issues scares me off. The issues are so large, as to almost make discussion pointless. But then again, the problems appear to be so large, that we have very little choice except to try and gain some grasp.

In the above podcast I linked about the water crisis in north America at the moment, I was interested to listen at how interconnected these large scale problems are. The fact, the farmers who grow biofuel crops are competing for water in certain parts of the continent. And to process the biofuels, having grown the crop it requires additional water supplies. It is hard to get one’s mind around the sheer scale of things involved. I mentioned Walmart, I think, because it is the kind of organisation that might sell biofuels in the future, and possibly interface with supplier(s) and supply chains. But wrapped up in all of these environmental issues, are also the social issues.

A question to all. To what degree have companies such as Walmart simply lived off the existence of infrastructural investment by the federal government in the United States down through the years? I.e. The creation of the inter-state highway system, and the internet communications infrastructure. The point is, much of the infrastructural investment in the United States has not worked in the way it was predicted to. I read commentators such as Danah Boyd at her blog site describe the conditions for teenagers in the US today. Where they cannot even visit the local mall or the cinema, because parents keep them locked up safely in the suburban home. In other words, the acceleration in development of the internet, has much to do with realities in the physical world. If there is anything such as a Chinese model or an American model, and so forth - clearly, we need to look at them in social dimensions as well as economic and political.

Another CMAA podcast which might enable us to grasp some of the numbers is this one. Michael Hennigan and others are much better with the numbers and statistics than I am. But clearly, when we get to this scale of policy creation, we are dealing with a different language almost. BOH.

Effective Solutions for Transportation Infrastructure Needs
Bruce D’Agostino With John Horsley

John Horsley is Executive Director of the American Association of State Highway and Transportation Officials (AASHTO). He has spent more than two decades analyzing solutions to many of the nation’s toughest transportation challenges.

http://www.jackstreet.com/JackStreet/WCMAA.Horsley.cfm

The FT had a graph a few days ago showing projections of global GDP by country and there was a sign of a clear shift from the G7 towards Asia. The Japan figures you cite are very noteworthy. And now China seems to be the world #2. It is going to be interesting. But dependent on continued open borders and trade so things could change.

I defer to your greater familiarity with India than I have myself.

I have however some familiarity with the area of the world that Rudyard Kipling called East of Suez, having lived in Jeddah, currently in Kuala Lumpur and having a long-term interest with the Philippines.

The return of China as an economic power has had a huge impact in reducing poverty in the region. As with other parts of Asia, there are advances and challenges.

The advanced countries no longer have a monopoly on knowledge jobs and in the US, the world’s biggest economy, middle class earnings have stagnated over the past two decades. In Japan, currently the second-biggest economy, about 35 per cent of the workforce are temporary workers earning less than the Irish minimum wage, while the number of the working poor, earning less than ¥2m (€17,600) annually, continues to rise.

Globalization and Asia’s return to economic supremacy

“But is the infrastructure of a country such as China going to have to ‘catch up’ more in order to accomodate big box traders? ”

Walmart have a goal of serving one billion customers per week within 20 years. I presume that will mean selling a lot of stuff in China. I think the goal is deluded and the environmental consequences don’t bear thinking about.

“Think about giving everyone with a mobile device the platform and the information they want to buy, the exact product they want at the absolute best price anywhere in the world,” Mr Duke said, in his most wide-ranging speech since becoming chief executive in February last year

http://www.ft.com/cms/s/0/0c92f88c-703a-11df-8698-00144feabdc0.html

Re the US and people not returning to the cities, didn’t cheap oil have a lot to do with it? If oil goes to $200 or $400 a barrel what happens the US model ?

I am just back from 3 years in Bombay. Pigs in the parlour Ireland had a population of 3.5 million. Easy enough to fix in an EU context. Uttar Pradesh is hopeless. India’s population adds over 50m per decade. How many of those people will ultimately qualified to even work in a call centre ? Most of them will still be playing the caste system.

India has a fabulous education system for the 2000 people who get into the IITs every year. Great.

China is different. Maybe the party can engineer it. I don’t see it happening in India. There comes a point with population growth where the increase in population drowns out everything else and that is where India is now.

The India of analysts is like Lenin’s view of the Soviet Union. The kulaks and white russians were the unwanted residue of the sick dysfunctional past that had no place in the glorious Union of the future. India’s blast from the past on the glorious journey to tomorrow is the vast majority of its people who are poor and ignorant .

Investing in India is nothing more than a levered bet on world growth. September 2008 showed it. Nobody on Wall Street really believes in India either if push comes to shove.

There is nothing in what you say should dent optimism about India or China.

Best of luck to you if you believe what’s happening in Asia is spoof dreamed up by Western analysts.

India has huge problems in the area of tax collection. And then there is the Naxal Maoist issue

Welcome to ‘pigs in the parlour’ Ireland in the 1970s.

Problems with tax collection?

That may be a good thing in an emerging economy!

The Water Crisis:
The Construction Industry’s Role
Bruce D’Agostino With Robert Glennon

Robert Glennon is the author of Unquenchable: America’s Water Crisis and What To Do About It (Island Press, 2009) His previous books include the highly-acclaimed Water Follies: Groundwater Pumping and the Fate of America’s Fresh Waters (2002). Glennon is the Morris K. Udall Professor of Law and Public Policy in the Rogers College of Law at the University of Arizona.

http://www.jackstreet.com/JackStreet/WCMAA.Glennon.cfm