Hashtag is #ieconf, this liveblog will host tweets and comments from the Croke Park conference.
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Hashtag is #ieconf, this liveblog will host tweets and comments from the Croke Park conference.
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41 replies on “Irish Economy Conference Liveblog”
It would be nice if the NTMA could have a stand at the conference selling homemade bonds.
No doubt you will be discussing the Irish meltdown.
One topic of conversation will not be a Bloomberg video of Angela Merkel blaming the greedy, ‘ the Irish people’, for causing the crisis; nope, Enda Kenny will be doing that for her instead 🙂 He insists on paying the bill for everyone; so no harm done !
Cartoon here for a bit of balance:
Will the slides be available anywhere afterwards ? Rob Kitchin’s talk sounds interesting.
This private sector employee feels pretty bummed out to be the missing the conference. I wish I could be there frowning and plotting.
Have fun folks, and do not go mad borrowing stuff.
Hope everyone has a productive and enjoyable day. I regret I can’t make it. Well done once again to the organisers (apparently relying on a shoe-string). I’ve registered my reservations, but I genuinely hope the event will inform and sustain much wider public debate.
I would like to make one prediction. Wrt to the parallel post-lunch sessions on “Banking and Euro” and “Economic Recovery – Can Competition, Regulation and Privatisation Help?” I reckon the attendance will split more than 9 to 1 in favour of the former.
This is a shame, but such is life. This is a balance sheet recession. The balance sheets of the banks and of the state are effectively under external direction if not control. The efforts to deleverage both sets of balance sheets are squeezing the economy. Apart from increased exports and favourable demographics, economic activity may be boosted only via increases in productivity and efficiency. The focus should be on the “Economic Recovery’ session, but, I fear that it won’t.
Folks may be interested in Q2 2011 stats on Ireland’s total gross external position and comparing it to other countries
Economic recovery may have something to do with dealing with Ireland’s gross external debt position in the trillions
Click and compare country by country: eg.
2,357,229 Ireland (figures here in mls dol US)
1,144,815 for ‘other sectors’ excluding banks is curiously interesting, what is that made up of?
There appears to be an inversion of the figures comparing Japan to Ireland under the heading of ‘banks’/’other sectors’ with the banks in Japan vastly exceeding their figures re ‘other sectors’; other way round in Ireland’s case.
“This private sector employee feels pretty bummed out to be the missing the conference. I wish I could be there frowning and plotting.”
I was actually on the train in, looking at the conference timetable when I got a call from a client about an unfolding disaster and went straight to their office at 8am – and it looks like I’m going to be stuck with them all day until late tonight 🙁
Has Karl been on yet?
If not, this from BOE via the FT, note the insolvent bit in particular and the democracy aspect.
The Bank has primary responsibility for financial stability and operational responsibility for managing financial crises. But consistent with the Treasury’s overall responsibilities, the Chancellor may, in some circumstances during a financial crisis, use additional powers to direct the Bank. This is provided for in Section  of the Act, which allows the Chancellor to direct the Bank to:
• conduct special support operations for the financial system as whole, in operations going beyond the Bank’s published frameworks;
• provide ELA in a support operation going beyond the Bank’s published frameworks to one or more firms that are not judged by the Bank to be solvent and viable;
• provide ELA in a support operation going beyond the Bank’s published frameworks to one or more firms on terms other than those proposed by the Bank; and
• implement a particular SRR stabilisation option
[…] those that were unable to make the crisis conference held today in Croke Park, please see below my slides on a possible future for banking. Note that […]
Liam Delaney posted this compendium of reference docs on the Irish economy on the twitter feed and it’s worth bookmarking
“We need to keep banking simple stupid and prevent this grand larceny ever happening again.”
Otherwise next time will be a total wipeout.
I wonder if they had any discussions in the room where the Croke Park Agreement was signed. The GAA make a big deal of Bloody Sunday where the Brits killed 13 people but how many excess deaths will the CPA be responsible for when the dust settles ?
• #ieconf Aedin Doris summary: It’s demand side, stupid. Great talk.
by DJDavisIE via twitter 1/27/2012 12:24:14 PM 1:24 PM
As Samuel Brittan points out in a passionate plea for reflation in the current Political Quarterly, there is nothing leftwing or rightwing about monetary management. “The remedy for depressed demand is action to increase demand. It is as simple as that.”
Presentation to the ‘crisis’ conference?
Crisis? What crisis? This is crisis:
… and getting worse every day.
A worthy undertaking to hold this conference, without a doubt, but the insular nature of the discussion is quite remarkable given the action taking place in Europe with regard to Greece.
And the “austerity pact”!
Of course, one can always get amusement from the carry-on between an inadequate Irish media and an equally inadequate Irish political class.
What we need is to find some of the “airgead draíochta” to which the Taoiseach referred to in the Dáil recently (before the CB burns it!).
Very enjoyable conference.
Kudos to Stephen and Liam for organising it.
Thanks to Karl for more PN talk and same to Colm for his Panama humour.
Interesting article by the head of the FDP which is, unfortunately, disappearing, it would seem, down the plug-hole of German politics. Ireland Inc. could sign up to every element in it.
News on the Fitch downgrades (which do not include Ireland!).
How about putting up some of the presentations as irish economy threads ?
I was able to attend the conference today for the first three sessions and had the great pleasure of meeting Mr Richard Fedigan.
I attended the ‘Economic Policy and Evaluation’, ‘Unemployment’ and ‘Banking and Euro’ sessions, and am willing to respond to any queries on same.
As is the case with these things, I also had the pleasure of putting some swift questions between sessions to various attendees.
If I had known you’d tipped Rob Kitchin’s presentation I would have whipped into it.
@ Paul Hunt
The ratio could not have been 9 to 1 as the two rooms were fairly full throughout. It would be nice if the world behaved as our biases expected it to behave as we could go to bed confirmed as to the intractable folly of human nature. Which goes to:
In the presentations I attended the European dimension was well considered.
@ The Dork
“I don’t get Brian Luceys presentation.”
Neither did I really. At the risk of being mean he said some things that were funny, in the sense that he said some things after which he paused into the silence, and then went on to suggest we needed more smaller banks and co-ops which is fine.
Aedin Doris’s presentation was excellent, and very bleak.
The only silver lining really, was that young men may stay longer in education as result of the crash.
@ The Dork, et al,
The lectures I attended made perfect sense within quite a particular framework.
Nobody was really there to put up their head and howl.
@ Gavin Kostick
The “European dimension”?
What else is there?
If we were Sweden, by way of example, we could choose to ignore it. But we are not and debate outside it is a flight from reality.
The Irish Times have put up videos on YouTube showing:
(i) Alan Barrett, David Bell and John McHale discuss their presentations: http://www.youtube.com/watch?v=3wt24t5yFPw
(ii) Rob Kitchin discuss his presentation: http://www.youtube.com/watch?v=HrsAJJkMlIw&list=UUNNnna72yOMxXU4n9Fg1Agg&index=2&feature=plcp
@ Gavin Kostick
Another aspect to the “European dimension”. I do not happen to agree with the views of AEP or Tilford. Italy and Spain need to carry out the structural reforms needed. In the case of the latter, by way of example, the labour market is a total mess and is, in large measure, an explanation for the high level of unemployment. It is now what it was in 1995; this can hardly be blamed on the euro.
I would have loved to have gone but it was at very short notice. Beidh aris ann.
I read the twitter feed on the way home and there was some great stuff in it.
The near 30% young peoples’ unemployment rate is appalling. There is enough money in the country to do something about it. As someone said on twitter, it will just drag out the recession.
I get the impression that there are lots of cogs moving but very little co-ordination between them. WTF are the pension funds doing with 70bn invested abroad? Many people paying into pension schemes have either a family member or an aquaintance who is one of those unemployed under 25s. Only connect.
@ Gavin Kostick
The antidote to AEP!
In fact while many of the presentations were good, there were ‘no solutions’ on offer. Not even a hint or whisper that Ireland should look outside the box for solutions.
Colm McCarthy was quick to knock ‘shovel ready’ projects. Too quick.
If the ‘gangers’ in charge cannot provide ‘shovel ready’ work, maybe its time to remove the ‘gangers’.
We need solutions to the situation we are in. There were no solutions on offer today.
@ Joseph Ryan
If this is a fair view, then the comfortable among the 85% will need something more seismic to rattle the failed status quo.
Ireland has been very poor at project management (I’m just not referring to big construction projects but also running huge consumers of public funds such as the HSE and FAS. It extends to issues such as the cost side of the Quinn Insurance administration when a High Court judge cut administrators’ fees by 20% — showing in effect that the Central Bank wasn’t doing its job).
Colm McCarthy is right to be sceptical about ‘shovel ready’ jobs and both the OECD and ESRI in recent times have highlighted the lack of back to work programmes – – retraining etc – – for the unemployed . However, who could have confidence in the local running of such programmes and their quality?
A team should be brought in from Denmark to operate them.
The big issues facing Ireland are – – enterprise/jobs policy, public and private sector institutional reforms and how the country should live within its means as 2006 is neither coming back for Ireland or Europe.
In Ireland baby steps have only been taken so far in response to the new challenges qand teh begging bowl remains an enduring symbol.
So began a fable published 50 years ago, in the American Economic Review titled ‘The Golden Rule of Accumulation’. In it, Edmund Phelps, the American economist (b. 1933), proposed a simple rule for a nation’s wealth to grow and provide the highest standard of living for its citizens – – present and future. The rule essentially specified how much people had to work, save, and invest today so that future generations could be at least as well off as they were.
This week the World Bank published a report on Europe, ‘Golden Growth: Restoring the Lustre of the European Economic Model,’ taking its inspiration from the Nobel laureate.
Europe spends more on social protection – – pensions, unemployment insurance, and social welfare – – than the rest of the world combined but has to face the challenges of living within its means.
Today, Americans work an extra month compared with the Dutch, French, Germans, and Swedes, and work noticeably longer than less well-off Greeks, Spaniards, Hungarians, and Poles. Men in Poland, Turkey, Hungary, and France retire more than 8 years earlier than in the mid-1960s. By 2007, French men expected to draw pensions for 15 more years than they did in 1965, Polish and Turkish men more than a dozen.
For example, in Ireland in 2001 spending on social protection stood at €7.84bn; by 2010 this had grown to almost €21bn – – an increase of 266% while inflation increased by 30% during the same period. As a ratio of expected total government revenue of €56bn in 2012 [taxes, PRSI and other receipts], the cost is at 37%.
The report says spending more than 10% of GDP on social protection may be risking underinvestment in activities that improve growth.
“spending more than 10% of GDP on social protection MAY be risking underinvestment in activities that improve growth”
Very true as would investment in health, education, roads, pencils and basically anything else, if it is spent on anything it cannot be spent on activities that improve growth. The one thing that social protection almost guarantees is that the vast majority will be spent in Ireland. It is best to think of it as the idea of a rising tide lifting all boats or my personal favourite that the money will “trickle down” but in this case the money will flood upwards (much more efficient) and then the capitalist system will make sure this money is directed to the best and most efficient enterprises that will improve growth. Job done and much better than allowing public sector vested interests decide where the money should be directed.
Flowing the #ieconf tweet stream and looking at the two slide seers already up we see proposals. We mightn’t like them but they’re there. It’s astonishing people are saying there’s no solutions. Read the stream. Read the slides. Watch the videos when they come.
Or wallow in carping pre judgements from afar. Your choice.
The Phelps paper:
@ Philip II
Once an ignoramus, always one — lacking basic decency, behind the shield of anonymity.
How pathetic — the validity of an opinion is related to the proximity of the parish!
I was responding to Joseph Ryan’s view who usually has something of substance to say without claiming anonymity with no sense of obligation – – that some like you apparently believe imparts a right to pollute the web. .
I was responding initially to your remark on the “insular” nature of the conference and indicating that I would not agree with that description.
Indeed, the very issue of Spainish unemployment you cite was discussed.
A brief summary of the conference for those unable to attend.
I was initially curious as to why the venue had been changed to Croke Park and the sense of strangeness was further compounded when, after giving my name at reception, I was escorted swiftly and in silence to the Away Changing Rooms.
Here I was instructed to put on full safari gear, and though others also arrived, there was little conversation due to nerves and uncertainty.
After an age we were moved into the Home Rooms, where various experienced Irish economists, with whom you will be familiar, were similarly togged out – though their gear was clearly more professional and more worn than ours. The only pecultiarity was that Brendan Walsh in a cap was stood, very erect, next to Brian Lucey in a pith helmet and natty shorts, and one was reminded unavoidably of the Sargeant Major and Lofty from the golden TV comedy ‘It ain’s ‘Alf Hot Mum’. The innapropriate laughter was hard to suppress.
“Choose you guides!” came the voice of the invisible Philip Lane over the Tannoy.
Shamfacedly I moved behind Mr Colm McCarthy, muttering something about wanting to hunt Macro.
Other attendees shot whithering glances and said, ‘you should start with micro’, or ‘by all means choose Macro, but they never actually make the kill. Micro’s the one where you can actually score.’
“Ever fired one of these?”, rumbled McCarthy, handing me a bolt action Mauser, he apparently had ‘left over’ from the Asgard.
“Well, in a play I once fired blanks at….. ” I stopped at his look of utter contempt.
“Try not to get in the way”.
We were off. Four sturdy UCD undergraduates raised McCarthy in his sedan chair, and carried him through the doors to where one would have thought the pitch to be.
Only, instead of the hallowed turf, we were in to the high savanna grasses of East Africa, waving over our heads and cutting out all view. All spendidly arranged by Stephen Kinsella and a crack team from the Botanic Gardens.
“What exactly are we hunting?” I whispered to the nearest Undergrad.
“Why the elephants in the room, of course”.
On we went and it was almost absurd how quickly we came upon the first. A massive fellow who stood upon two legs and had obviously been in some freakish accident.
“Pah” and with that McCarthy hoisted his rifle and dispatched the beast with shocking directness.
“What was that”
“The elephant of the disfunctional two pillar Irish banking system”, said McCarthy. “Too easy”.
And on we went, the sounds of our fellow hunters now near, now far, and a distant, “the elephant of energy depletion”, or “the elephant of the sheltered sectors”, until I began to feel I had indeed made the wrong choice.
By this time we were moving through a grove of rather sweet fruit trees.
“Don’t speak”, muttered McCarthy, “Look up!”
I peered into the cherry tree.
“There’s one hiding there!” I exclaimed sotto voice.
“Bag it”, said MCcCarthy, “But not from directly underneath”.
Again ashamed, I moved a little to one side, slid back the bolt, and looking deep into it’s elephant eye, shot it.
A mighty crash.
“And that was?” I asked trying to cover a sick feeling with studied off-handedness.
“The elephant of Irish agricultural success. It all depends on CAP and Cap will soon vanish.”
“I’ve never heard you say that – don’t you write for the ‘Farmer’s Journal’?”
“Shut up”, he said, swigging from a small silver naggin of Jameson.
“There!” I shouted, excited, for suddenly I had caught the rear of another pachiderm.
“Idiot!” Roared McCarthy, and laid his big gun across the shoulder of the front right undergrad. “Don’t move son, or you’ll be earless.” The elephant pounded determindly for the exit.
McCarthy shot it.
“Which one was that?”
“The elephant of emigration. And well done son”, this to the half-deaf undergrad., “A two:one for you”.
From here, I thought there would be nothing more to report for hours of tedious, marching, sweating, loading, resting marked the rest of the day.
Indeed, it was only as we turned for home, that we stumbled right into a grove of dull, hopeless light with the most massive bull-elephant stood dead still at it’s centre.
Now of course, I had sympathy for the beasts, but I must say, this white, tusked monster seemed quite alien and strangely terrifying with an air of enormous and unrelenting unhappiness.
“My God! What is that”
“The real elephant in the room”, murmured McCarthy, “My old friend, my old nemesis, the real elephant in the room – the elephant in the room of unemployment”.
I had locked loaded and fired even as he spoke, but my bullet flew wide, as McCarthy knocked the barrel away.
“He’s not for you.”
“Dammit, I’ll do with with this shovel”, I roared, “and see, all those other elephants of dispair, idleness, social collapse will not survive without him” and I made my shovel ready.
“I forbid it” roared McCarthy. And the Undergrads wrestled me to the ground.
“Then you do it, damn you!”
“Never!”, and I saw what Ishmael must have seen in the eyes of Captain Ahab, “He’s mine I tell you, and he must be left alone. For now.” And we turned away.
Perhaps I should speed now to the conclusion and fly over the long, slow sickening trek away from the elephant in the room of unemployment.
A great feast had been arranged in the upstairs bars, and slowly but surely the conversations changed from truthful, almost modest accounts of nerves, near-misses, anxiety and so on, to perfect kills, great successes.
It was noted that Richard Tol’s one kill had been mentioned most by the other economists (as in, ‘I don’t think it right that Tol should use a bazzoka, even if it is more efficient?), and thus in some bizzare way he came out as the best hunter.
As various elephant heads were displayed in the light of thousands of burning copies of ‘Atlas Shrugged’. there was only one moment of embarrassment when one economist – who shall not be named – displayed the head of Angela Merkel.
It turned out that he thought that Angela Merkel was an elephant in the room, not the honoured guest and observer she actually was.
However, the mood lifted as the sight of John McHale trying to explain to the German ambassador via iPhone that the fact that Angela Merkel had been mistaken for an elephant was in no way, shape or form a reflection on her physical person but, indeed, a gesture of praise for her stature of a political kind: could not help but raise the spirits.
And there the great elephant in the room hunt ended.
I am sure both Seamas & Colm know we are in a non optimum currency ,we always were , the european project only “worked” for us when we had massive fiscal flows from the core while the continental banking sector extracted the corresponding interest surplus.
Now thats ending – they are in the pure extraction phase now.
Shovel ready projects will be almost immediately available when / if we eject from the Euro.
And it will be shovels – as we will have little capacity to import machinery & oil.
Thank you for the run down on the various talks, it sounds interesting but depressing.
EMU, a single mandate central bank and the dominant strain of German political conservatism is the Gordian knot that prevents us escaping the current crisis, we all know it needs to be cut but every peripheral country hopes someone else will wield the sword.
No sooner had Seamus Coffey made the tentative proposal above (on capital spending as stimulus), than Colm McCarthy rubbished ‘shovel ready’ projects on the capital side.
It is disappointing that Colm McCarthy is still stuck in the post Keynesian but pre global financial crisis mindset. The Keynesians seem to have much less discredited pre GFC intellectual baggage (well, actually political baggage). Reading Krugman or Stiglitz today they both seems humane and current, Fama and Lucas sound like dangerous, callous fools unable to acknowledge where their philosophy led.
It is strange to me that the classic conservative love of privatization and belief that “freer” markets will help us out of the trap that they stampeded us into still have such traction, even in academia.
Ahistorical would be a kind way to describe it.
‘I think the central problem with modern Ireland is that it is trying to reinstate nation state tax policy over a now entrenched market state foundation built since 1987.
The two don’t go together……… they just don’t’
This is not just our problem, although we are a textbook case. It’s the penetration of states by increasingly co-ordinated, netwworked and well disguised internal and external private interests. A bare-faced subversion of democracy. Ireland of today is a confused mid-atlantic swamp.
‘Goverment is a natural monopoly , therefore it should have control over the money supply’
+1. Your petrodollars theme stands up to scrutiny. Destruction of the commons is a serious offence by any reckoning.
@ Gavin@ fishamble
@ Joseph Ryan
As good a comment as any we’ve seen on here in the last few years. Bravo sir.
So Karl Whelan shows that, in effect, if the ECB/CBI allow it, this can be treated as akin to “unsterilised” cental bank intervention. The promissory note is. Pittance in the contest of a ten trillion euro area M3. As noted, the concern is that the others will want this too. Well, so be it.
What I want to know and I suspect others also is this: in whose court is the ball? Does noonan have to ask? Or does he ask honohan to ask? Have they asked? If so when and what was the answer?
@JR: “…I am fully aware that the Western railway project was money down the drain as I can personally see the low numbers on trains every week at the level crossing.”
Please wait until liquid hydrocarbon fuels are so costly (two – three years time? – probably), that road and air transport are only for the v-wealthy and there will be plenty of sorry bums on those seats.
Prospects for the Irish property market
Rob Kitchin’s speech summarised
Dreamliner debuts in Dublin
Perhaps more worryingly the IT video with Alan Barratt, John McHale and David Bell have half the views that Kitchin does. Besides the thought of leaving the country on a Dreamliner is better than staying and going down with the ship. The neighbours actually took the kids to the airport to see it up close.
Further to the excellent comment from Joseph Ryan above.
I was sort of waiting for particular threads to arise, but I may as well add here before I completely forget everything:
Tom Healy (CERU) made the take home point that the balance of tax-and-spend decisions are still in government hands, and that according to research (IMF I think), if we (ireland) carries on down this road we will still be an extremely low tax economy relatively speaking.
Frank Covery essentially argued that the recruitment process for economists in the public sector ought to take in more than cleverness and technical achievement and look for more rounded features, eg showing an engagement with the practical world. He cited Alfred Marshall who built up his knowledge from five years of on-the-ground observations, when he was not required to publish a single paper.
Frances Ruane (ESRI) responded a bit and then talked about best practice in economically assessing public projects and programmes. It was a nice clear talk, and the take-home was that such assessment should be systemic and culmulative, in that lessons learned in each case should be available for the future. She did say that the ESRI did highlight problems in the boom, but not loudly or long enough and the media did ok, but the politicians essentially did not want to hear.
Robert Watt’s speech (PER), was frankly odd. I take it that he is a Civil Servant, as he began by congratulating himself by bothering to turn up at all, saying that others in his department thought him strange for even trying to engage. He then pointed out how much they were engaging with the public through FOI, etc. He dismissed Tom Healy entirely, as being all wrong, but whether this referred to factual assertion (eg the tax levels), or ideological or other was impossible to tell. He sort of agreed with the other speakers, and said that the department was working on these things and more was changing than the public realised. He then said something about economists being lonely at times.
The presentations of the second and third speakers would be of interest, I think, to Michael Hennigan and Paul Hunt.
More On: Unemployment.
David Bell, from Scotland, was the one making international comparisons. One thing, Ireland already has a ‘flexible’ labour market – it’s not that hard to sack people, so more ‘flexible’ reform is perhaps not the key issue.
Aedin Doris: Additional comment: gloomily underemployment is also a problem, as people have taken hour cuts (trying to avoid wage cuts). This means that as growth returns, the ‘underemployed’ are likely to expand their work before the unemployed are taken on. I asked at the end if she could make a link between recent Irish employment/unemployment and emigration/immigration – it was a bit hard to hear the reply, but I gather it was generally, not really as the key stats., still aren’t in. Key point – it’s a demand problem.
Philip O’Connell (ESRI), another one for Michael Hennigan to chase up as he was essentially talking about best practice in retraining programmes. Take-away – too much focus on construction skills still, and training in specific useful skills is more productive than general skills. Some talk about people taking more control of how they take control of their own skills development.
Odd chairing by Joan Burton was made a few political points, cut short some questioners but not others, then ignored some questions then not others. On the whole, I like Joan Burton, but this was odd – and indeed I suspect angered some listeners, as essentially she used the ‘chair’ to bend things her way – should have been a guest.
Brian Lucey: I feel I may have been a bit unfair. Anyway, I think it was as there was a disjunction between the rhetoric at the start – which suggested he was going to say radical stull, and the meat – maybe more smaller banks and co-ops which seemed fairly unexceptional. Perhaps he might have a pop sometime at how the banking system can best be set up to pay back the state the money it has required.
Frank Barry: Very good on ‘asymetric shocks’. Anyone who wants to get this clear should watch this.
Personal opinion: there was quite a bit of ‘we knew the euro design was flawed’ in the room. I feel we heading to a flawed fiscal compact, and I really don’t want to be back in 5 / 10 years saying well of course it was flawed from the start.
Karl Whelan: discussed elsewhere.
Patrick Honohan arrived just at the end of this, and I was impressed by C Gurdgiev’s (rather cheeky), ability to makde some quick remarks as chair about useful info being needed that were clearly for the governor’s ears.