Future Directions for the Irish Economy

This excellent point here is missed by the many superficial analysts:

“Growth policies typically play out over a 15-30 year horizon, such that 2014-2020 is not a sufficiently long horizon in evaluating the net benefits to various economic policy reforms. For instance, reforms to the education system might have a substantial long-term impact, even if there is little direct impact on economic performance over the next 5-10 years.”

For example, in exporting, most companies do not have unique products to sell and it usually takes many years to develop new markets. Besides, an economy needs a reasonable number of medium-size firms to build an indigenous export base – – Germany’s strength in this area explains much of the performance gulf with France.

Armchair experts see a 1bn+ market in China but while there is no reliable data, it appears that a lot of western companies lose money there.

Kevin Daly of Goldman Sachs says:

“Ireland could converge to the US average – and this seems reasonable as a central case. But it is also plausible that it converges towards the Silicon Valley or towards Detroit.”

Of course here, the FDI and indigenous sectors should be separated – – total direct jobs in FDI internationally tradeable firms in 2013 remained below the level in 2000.

So there was an exports surge but it was a jobless one and the related Department of Finance’s claim that a “continued competitiveness boost through reduction in unit labour costs with a 21% relative improvement forecast against the Eurozone average” is a fantasy. The average whole economy hourly labour cost rose 1% from Jan. 2008 to end-June 2013.

This week Bord Bia reported record food/drinks exports of almost €10bn — 5.5% of total exports value or 10% when discounted for excess transfer pricing and fake services exports.

(not sure where that smiley came from….)

@ Ninap

How would you recommend the pension money be invested ?

@ Prof Lane

What does prosperity mean ?

@seafoid

I think the NPRF or the NTMA could manage the ensuing sov wealth fund quite well. Ideally employers, employees and the State would contribute similar proportions, and the same pension entitlements would accrue to public and private sector workers.

@Brian Woods

I’m serious with the suggestions. Slightly facetious in saying they are easy (to implement).

@ Ninap: Fine.

1) Orient taxes away from labour, towards property and consumption

Yes – but watch the consumption one. Folk on minimal income and proportion of income paid in tax will be whacked – again!

2) Invest in infrastructure (transport, utilities, telecommunications)

Maybe. If trans is main-line and light rail I’d agree. We need more roads like we need a hole-in-our-head. The other two have been raped and looted. The unfortunate taxpayer will be left to pick up the debris when these go belly-up.

3) Reform public service – give managers incentives to manage, introduce accountability

Skip this. Undooable. But I’d support restructuring of national and local government.

4) Reform education – incentivise teaching and results in maths, science, languages.

I’d put my effort into getting children (5-6 years) to read fluently – in English. Dump the fetish with compulsory Irish. We already know where the best practice is in Math + Science teaching. Importing it is the problem. Know how teachers are trained?

5) Encourage entrepreneurship – make starting a business easy, and provide support for scaleable businesses

Fine. But … …

6) Introduce compulsory private health insurance, and compulsory private/public pension scheme

Now, you ARE being very un-serious here! How about a Health Service which comes up to the standard of care provided in Cuba or Thailand. I’d even settle for France and the UK. Ours is Two-tier. Private and Unspeakable.

7) Reduce authoritarian controls on various leisure activities and encourage different forms of tourism.

Pass.

Close to where I live there are two major arterial routes – both with serious lengths of Lána Bus. Outcome: increased congestion; increased transit times; increased fuel consumptions; increased air pollution. And they call that progress! Could I have some ‘failure’ – please!

Ninap, I rejoice at your enthusiasm. Regrettably, those of us with both the competence and the testicular tissue to undertake such restructurings as WE think appropriate! – have neither authority nor power. Which is probably just as well. But you are quite correct: things are a tad shambolic in some sectors.

One thing I always noticed when someone proposed a reform: it was blasted out of the water – but there was no parallel equivalent criticism of the status quo. Funny that – and the same persons who whinged the most (sotte voce – you understand) about the status quo – seemed to come dumb all over about the restructuring proposal. They gazed fondly and beseechingly into the eyes of the Leader (who invariably was against proposals) to seek inspiration and approval. That was not funny!

“Endeavour to persevere.” Some sh*t always sticks! 🙂

@ Ninap

It seems to me that you have put your finger on the conclusion that should be drawn from the analysis set out by Philip Lane viz. the Irish economy, as a small open economy, needs to be made generally efficient in terms of its productive capacity which should enable it to take advantage of external opportunities and cope with adverse external developments.

Why is this conclusion not drawn?

Perhaps the answer lies in the very limited number of countries, mainly Scandinavian, that have succeeded in achieving this outcome. The reason is the unwillingness to face up to the consequences for various interests of the steps you propose.

On reform of the public service, I would start rather with the issue of its definition i.e. a debate on what should be the responsibility of government and what should not.

The problem lies not in the existence of the general problem, but the lack of a general appreciation of its existence.

http://per.gov.ie/government-reform/civil-service-accountability-consultation-process/

The idea of an “independent panel” made up entirely of persons whose salaries or pensions, as far as I can judge, are paid from the public purse is simply ridiculous. This is not, of course, a comment on the integrity of the persons involved but an indication of this lack of appreciation of the need for a wider field of assessment.

http://www.rte.ie/news/business/2014/0110/496994-honohan-conference/

“Central Bank Governor Patrick Honohan has said that the EU-IMF programme for Ireland “delivered what it said on the tin”. ”

http://www.irishtimes.com/news/politics/gilmore-defends-labour-s-record-in-government-1.1612463

“Ireland would be going into a second bailout were it not for Labour, says leader”

But the numbers lack conviction. I don’t think this is what the tin said back in 2010 .

http://www.ft.com/cms/s/0/bfe2048a-640d-11e3-98e2-00144feabdc0.html

‘However, special features of the Irish economy mean that its future path is especially unclear. At a structural level, the very high international mobility of workers, capital and technology is a defining characteristic that means the range of possible growth outcomes is much wider than for most other advanced economies’

Wikipedia:
‘A small open economy, abbreviated to SOE, is an economy that participates in international trade, but is small enough compared to its trading partners that its policies do not alter world prices, interest rates, or incomes. Thus, the countries with small open economies are price takers’

Ireland is hugely vulnerable to imported price inflation. The problems of substitution are likely to be much more challenging than they were in the Emergency, because so much of our economy is imported in a box. The price of credit is already strangling Irish SMEs, and normalisation of already excessive ‘peripheral’ interest rates could be a Perfect Storm.

‘In common with many other countries, a fundamental challenge facing Ireland is to find the balance between maximizing growth and attaining a socially-sustainable income distribution, in view of the global trends (new technologies, globalisation) that are fostering greater inequality in market-driven earnings’

Financialisation is the really demonic process, but we are (currently) a beneficiary from profit shifting and other scams. What goes around comes around.

@ DOCM
‘Perhaps the answer lies in the very limited number of countries, mainly Scandinavian, that have succeeded in achieving this outcome. The reason is the unwillingness to face up to the consequences for various interests of the steps you propose.’

Joe Lee said it all in Ireland 1912-85. Those countries had governance, built up over centuries. We had rotten boroughs, corrupt local authorities and Dublin Castle placemen. I do not idealise the preceding Gaelic clan systems with their various grades of slave.

Please bear with me folks….

@DOCM

Perhaps the answer lies in the very limited number of countries, mainly Scandinavian, that have succeeded in achieving this outcome. The reason is the unwillingness to face up to the consequences for various interests of the steps you propose.

Perhaps there are a few pointers we could take from the Scandinavian countries to replicate their success?

* Higher levels of public sector employment (Sweden’s level of public sector employment per capita is twice ours, ditto Norway)
* More unionization. (The Scandinavian countries have no minimum wage because of the clout of collective bargaining)
* Free or nearly free health care in all three countries. (funded by taxation)
* Private sector employees enjoy the same protection as public sector employees (see Unionization)
* Less income inequality (all three countries have a better gini coefficient than Ireland)
* Not being in the Euro (duh!)

I could go on but you get the picture. The Scandinavian countries are essentially all social democracies with their own currencies, we are not. Please do not give the Scandinavian countries as an example of the need for neoliberal or supply side reforms. It insults our intelligence or your integrity, a bit like every reference ever to the Baltic Republic “success” stories (for very small values of success).

Which brings me to the digressive bit….

Reading the Irish Economy it seems to me that the right (and this means many of the contributors) are engaging perpetually in a combination of three things.

* Trying to fool the public (trickle down economics, rising tide lifts all boats, privatization improves the efficiency of service provision and so on) to advance political ends.
* Sounding like fools (the unfortunate Eugene Fama comes to mind).
* Fooling themselves about cause and effect (Marco Buti would be a prime example as Aidan Regan notes above).

Why is this?

There was an interesting study about US Republican’s level of educational attainment versus their attitude to anthropogenic climate change, the better educated they were the less they could be persuaded by the evidence and I think this is a general trend on the right, particular in public policy circles and academia where people are generally well educated and intelligent. They have strong beliefs, which though unsupported (or contradicted, as above) by the evidence they can rationalise (confidence is just around the corner, failing policies have not been pursued strongly enough (Alberto Alesina on expansionary austerity), John Cochrane on the US stimulus being doomed). Of course there is also Olli Rehn, who has a different excuse.

That is one of the reasons the Irish Economy has less left wing contributors than of old. The right is a political cult cum feudal social network and we do not have the time to deprogram them. But please carry on, it is only the world you are helping to ruin.

@P. Lane

“In common with many other countries, a fundamental challenge facing Ireland is to find the balance between maximizing growth and attaining a socially-sustainable income distribution, in view of the global trends (new technologies, globalisation) that are fostering greater inequality in market-driven earnings.”

I see no evidence of this key issue being on the agenda, nor do I see a focus on indigenous export, or on the form of taxation needed to take us in a Scandinavian direction.

That was a thoughtful and thorough article Prof. Lane and it laid out a number of the challenges (read “threats”) facing Ireland. Two counterpoints though.

While there needs to be much more (any?) long term planning in Ireland (education, Seafoid’s climate change and energy security all stick out) and patient investment we can not keep ignoring the short term negative effects of policy in the hope that there will be long term benefits. It is little use to save money for the education of the next generation if cuts now mean there is a matching loss of educational achievement for this one (and generational hysteresis has to be a concern in education, employment and health). It is the Hippocratic oath of economic planning – first do no harm; you can cut growth to try and achieve a sustainable economic equilibrium but EU style liquidationism in the hope of creating a leaner, fitter economy is at best a huge gamble unsupported by historical evidence or current experience and at worst a immensely damaging delusional grand projet of the European right.

I also have to ask whether the government should be paying more attention to the IFAC (no insult to its members), as far as I can see the requirement for “independent” fiscal councils was a sop to German ordoliberal thinking and their prejudice for paternalism (which has a mixed record in Germany itself) and also represents more or less the interests of the core economies (and we mean Germany and hangers on). Given the appalling record of the European economic consensus for the peripheral countries any body that hews as as closely to it as the IFAC seems a poor source of inspiration.

The overall point of the article is hugely important though, Ireland is a small country – smaller than many European capitals and we have to guard our resources closely and be more efficient and more thoughtful than our European peers per capita if we want to remain sovereign and moderately prosperous – our reliance on foreign multinationals in a time when tax arbitrage being seen for the monster it is is particularly risky, our tendency for patronage in public appointments is corrupt and severely damaging for the intellectual life of the country. The Republic needs to be reborn.

After all no one will look after us but ourselves – not the EU institutions, not our European partners and certainly not the market.

Excessive self indulgent posting splurge ends here, I promise ye.

When I said:

* Fooling themselves about cause and effect (Marco Buti would be a prime example as Aidan Regan notes above).

I was thinking about another thread Buti and Mody on Europe. My mistake – it is a good thread though. I can highly recommend reading Buti’s piece if your blood pressure is too low – utter piffle as pointed out by Grumpy. I dare anyone to read it and not be annoyed (not sure about the symmetry of his trillemmas either).

With men of the calibre and forthrightness of Buti and Rehn is it any wonder EMU has been such a success?

It seems that the DoF has mean reverted following the departure of the adults.

http://www.rte.ie/news/2014/0110/497114-department-of-finance-banking-crisis-files/

“Documents relating to the banking crisis have gone missing at the Department of Finance. The department has conceded that some correspondence forwarded from Bank of Ireland to former minister for finance Brian Lenihan can no longer be located.It says it has started a process to ensure the integrity of its records ahead of the banking inquiry.”

How much would you need to add to the bond yield to cover the cost of this kind of additional risk if you were invested in anything involving the DoF ?

Absent ideological blinkers myself 😉 , when I first read the Pew’s report of its polling on US Republican Party supporters on climate change science, the pro-science climate change environmentalists who are also anti-science on GM food, came to mind.

The camel seldom sees his own hump.

Sir John Beddington, the chief scientific adviser to the UK Government and professor of Applied Population Biology at Imperial College London, said in 2010 that more than one trillion meals have been made using GM crops in North America and there has not been a single case in the law courts of anyone suing after eating GM products. “America is probably the most litigious society since Seneca’s Rome, but I think there is interesting indirect evidence that this is not a problem,” he said.

Anders Borg, Sweden’s finance minister, said in 2012 on inequality;

“You need to deal with the social cohesion issue. You cannot have a society where the conflicts that are built in become so strong that you undermine the political ability to deal with problems. If I compared Sweden with Spain or Italy or Greece, one of the reasons we have been able to these reforms is that our income differences are substantially lower which also means that the political tension is on a completely different level.”

http://www.iie.com/publications/papers/borg20120423ppt.pdf

Michael Ignatieff, academic-turned-politician-turned-academic, said in the FT on Friday:

“Progressives have become closet conservatives, defending the welfare state and the public-sector middle class at the very moment when rising inequality is eroding the tax and voter base for welfarism…Progressives will have to make their peace with the creative destruction brought about by competition, while conservatives will have to accept that the state has to take care of the market’s victims. As governments’ powers of surveillance grow, progressives will learn new respect for the conservative instinct that state power must be kept in check. As the globalisation of finance multiplies the risk of systemic meltdown, conservatives will begin to appreciate the progressive insight that only the state can keep markets from dropping us into the abyss.

Beyond caricatures and labels, this is in line with my own views.

“Sir John Beddington, the chief scientific adviser to the UK Government and professor of Applied Population Biology at Imperial College London, said in 2010 that more than one trillion meals have been made using GM crops in North America and there has not been a single case in the law courts of anyone suing after eating GM products. “America is probably the most litigious society since Seneca’s Rome, but I think there is interesting indirect evidence that this is not a problem,” he said.
”
absence of evidence is now evidence of absence ?

‘In common with many other countries, a fundamental challenge facing Ireland is to find the balance between maximizing growth and attaining a socially-sustainable income distribution, in view of the global trends (new technologies, globalisation) that are fostering greater inequality in market-driven earnings’
It is not a proven fact that a high income inequality is favorable to growth ,many( e.g Krugman) disagree ,in fact quite the opposite might be true .

@ BWS

Having read the consultation paper in more detail, my view expressed earlier remains unchanged. The leitmotiv is that of accountability which can be expressed in the terms set out in the paper or more bluntly “how can we as politicians ensure that senior public servants carry the flak when things go wrong within their area of responsibility and we still get all the credit when they go right?” Or, as I seem to recall one former minister putting it, changing the situation where she faced the music at the weekend while the civil servants in question were at home “drinking gin and tonics”.

It is a vain endeavour. Political responsibility goes with the territory of being a political representative and, as the Irish Water controversy reveals, it cannot be off-loaded. The confusion arises, as I have pointed out, from a general failure to recognise that public representatives are not public servants and their functions are not comparable.

Public servants, whether senior, middle-ranking or junior, can, and must be, made accountable for their actions but this requires an entirely different approach to that set out in the consultation paper. It involves distinguishing between officials involved in the function of policy advice – much fewer in number than the present “all chiefs and no indians” approach would suggest – and those charged with overseeing the administrative implementation of agreed policies, whether by the department itself or an existing agency (there is currently total confusion between the two) and developing appropriate control mechanisms and output measures. For the monitoring of policy execution, the involvement of parliament is essential. Being a “Westminster-style” system does not prevent this.

Serial public uproar by taxpayers is not an effective means of doing so.

@seafóid

“And where would the money be invested ?”

Why….. in credible Irish start-ups that create jobs and exports of course.

PR Guy is returning to Ireland to set up a ‘disruptive’ (I’ve gone all interwebby nerd since I’ve been away) business in the digital content provider space.

The trouble is, I need a chunk of dosh…. and you have to jump through an awful lot of hoops to get that. By the time I eventually do, I could have set it up and be off and running instead of having to give a gazillion presentations to beg for the money and continually fretting that the longer it goes on, the greater the risk there is of someone else doing it first.

@seafóid

Will you be back when the US December job figures are revised up? Trouble at t’doom-mongers mill then.

@Michael Hennigan

Absent ideological blinkers myself 😉 , when I first read the Pew’s report of its polling on US Republican Party supporters on climate change science, the pro-science climate change environmentalists who are also anti-science on GM food, came to mind.

It is International False Equivalence Day and nobody told me. Just typical.

It would take a while to pick apart your refutation of points I did not make and it is now substantially off topic. However if anyone really wants me to do it I will. If not I might write something up tomorrow and post it elsewhere. Suffice to say for the moment that your post managed to roll in a lot of the characteristics that make arguing with the right an exercise in futility.

@ All

I posted this link on another thread some time ago (dealing with assistance being provided by Sweden to Portugal in terms of learning from the former’s emergence from an economic and banking crisis).

http://www.bportugal.pt/pt-PT/OBancoeoEurosistema/Eventos/Documents/LJonung_paper.pdf

It may be contrasted with the “Strengthening Civil Service
Accountability and Performance” document (which has the sub-title “Consultation Paper on Programme for Government Commitments”).

A striking line in the “accountability” document is the following;

“One of the primary aims of this consultation process is to assess how greater clarity, certainty and common understanding may be achieved regarding who is accountable to whom for what.” (Page 2).

One would have hoped for some inkling of a recognition that the country is still in a deep economic criisis and navel-gazing by those collectively responsible for getting it into it, and now out of it, is not what is most urgently required.

@ Johnny F: You know full well that the BLS metrics are semi-fictional and you have to view the whole thing on a quarterly basis – at least.

The most important US labour-force metric is – as I have previously mentioned, the ratio of those in Full-time Employments versus the Adult Working-age Population. Other labour-force metrics are whilst useful, might be misleading.

The US labour situation sucks! FtE/AWaP is at 59% – bad! It should be closer to 65%. And the Median Wage? Where is this going? Like down!

In normal times (no FED QEs) these statistics would send (and keep) the stock indices down. Not normal times.

Nah they could care less,A Rod got suspended,the Knicks suck..NFL playoffs on,dead war criminal that bout it..
Oh the bridge and tunnel gov closed a few lanes on the GW bridge…phew..delaying the hordes from jersey getting to the city….
@BWSnr…whats the unemployment rate here again, still falling I think ya can only wish:)

@ DOCM: Thanks for that update. One wonders.

“Serial public uproar by taxpayers is not an effective means of doing so.” Agreed, but look what happened when the Grey Tigers savaged the pols over the Med Cards! But: “Exceptions dear boy, exceptions!”

My longish experience of ‘public service’ types leads me to immediately dismiss as utter hogwash any, and all, proposals at ‘reform’ or ‘accountability. If folk had been genuinely about these, they would have been accomplished at least three decades ago.

@ JG: Thanks for those. Listen, what’s this story about Cristie and the Bridge? Sounds like some Hollywood disaster movie!

@BWSnr here’s the skinny,the mayor of Koreatown aka Fort Lee,little kip just over the George Washington Bridge did not endorse slim for his reelection bid as gov.In a fit of pique someone,its a who knew what when situation,decided to conduct a ahem,traffic study resulting in lane closures and massive extra large traffic jams.Its a non event,quite a few people are amused by his,got ya style:)

http://www.motherjones.com/politics/2014/01/chris-christie-bridge-traffic-jam-emails

Or as the Jesus and Mary Chain sang in Dirty Water…f**k with me and I..
http://www.nme.com/artists/jesus-and-mary-chain/album/stoned-and-dethroned/4730/track/dirty-water#

@Grumpy,the NJ gov had let a few people go,some embarrassing emails turned up,perhaps the DofF what with the Minister,winning awards left and right could advise….
There truly is no political will to conduct any inquiry,I don’t think BofI even did one on what went wrong.
AIB I recall conducted a thorough inquiry and review after that rogue Baltimore based trader came apart.

In my says in the Watchtower documents never went astray. They always rested on several files usually in several depts. Things really got sloppy in the last three decades. This is really embarrassing for the current regime that documents generated by the past regime have fallen down the back of the filing cabinet.

@The Sage of Kuala Lumpur

You wrote: “People in Ireland would likely willingly pay more taxes if they were confident of getting the Nordic standard of public services.”

And there’s that old right-wing practical syllogism again:

We would gladly pay for Nordic standards of public services.
On the pittance we do pay, we don’t get Nordic standards of public services.

Therefore:

Slash spending on public services.

re: Reform not happening, or where to start.

There is no point in people talking about ‘debates’ on reform, while a golden circle of insiders, their friends, acquaintances and business buddies squander public money on each other.
It is not, as some people think, incompetence or stupidity. It is deliberate.
The State is being ransacked, for the benefit of its ‘managers’ and their professional South Dublin buddies. The bank heist was so perfect for the professional classes, that Irish Water was seen as another golden fountain.

A good start would be to fire the entire board and management of Irish Water.
They have burned 100 million last year and not one pipe fixed and not one invoice issued and money being dispensed like toilet paper. No pipe fixed, but I bet that all salary contracts have been sorted and I also bet that a defined benefit pension scheme is firmly in place, with no watery leaks in it.

What did Irish water need to get started?
A metering state, an invoicing system and a maintenance crew.
Yet, they seem to have paid €50 million to consultants to ascertain that much.
That they could not figure out that much themselves is reason enough to sack them all and shut Irish Water down now, before we have another HSE disaster on our hands.
Irish Water should IBRC’d right now.

What the betting that the some consultants were even paid to advise on the location of the head office, and to come us with the required answer,
Talbot Street, Dublin. Why Dublin? Why city centre?

Shut the sucker down.

@Paul W

Well, I imagine that it’s a complex problem but the fact that private health-insurance premiums have double-digit inflation while the budget for the public health system is being slashed, er, reformed might have something to do with it.

But if you’re unhappy with it, clearly the answer is to defund it until you can drown it in a bathtub. Look how well the almost-entirely-private system in the US works.

I don’t need to know you. It’s self evident. You’re damaged goods. Tell us why.

Too emotional for me, Ernie.

Looking at my last post, I need to improve my grammar, if I am to survive in the new smart economy.

JR,
In my day, every piece of paper that came in was put on a file along with all the other paper that it generated as it went up and down the line and around the building. So you would find copies in various places. This was done to protect the officials as we had a record of what we wrote and who we wrote it to.
. There would also be copies in other places. If I sent you a letter chances are you would retain a copy.
As to email disappearing. I did not think that was possible. I thought email was like a zombie. You could bury it but it would come back to haunt you.
This is v. Strange.
If as it is hinted the docs refer to an offer by a foreign investor to buy a stake in BOf I what would be controversial?

Good article here for anyone interested

http://www.thestraddler.com/201412/piece9.php

completly irrelevant to the post though (sorry)

Paul W
My touchy today arent tou
Ok..define risk (apart from price movements) and show me how irish or say spanish government bonds are at risk of non payment? Take your time. ..

@BWSnr,just had chance listen to this,WTF do people call the guards on themselves,did he do that old comic routine “do you know who I am”.He does make an interesting point on clients not be allowed to buy.Should price not be the only criteria,any other groups excluded?
5mins in.
http://vodhls.rasset.ie/hls-vod/audio/2014/0111/20140111_rteradio1-marianfinucane-niallmello_c20503739_20503758_261_/20140111_rteradio1-marianfinucane-niallmello_c20503739_20503758_261_.mp4.m3u8

http://www.voxeu.org/article/why-fiscal-sustainability-matters#.UtJOHju4K68.twitter
Oh now theres a lot of cats flung into the pigeon coot here by that mad raving socialist Willem Buiter…

@Joseph Ryan I am not expert in Irish Water, but they should be assessed in a balanced way and I for one do not have the information to do this. Do you? Any assessment needs to evaluate whether what they are trying to do is appropriate and whether they have done this in a cost effective way. There have been numerous criticisms of the HSE, which never standardised its operations across the State. There have been numerous calls for common procurement and the like. In my opinion, there is no way that Irish Water should just take the 34 existing water operations and leave everything in place, just having the same logo on the bills. There are real savings from integrating these operations.

As for the ‘world class’ inventory system, I repeat that the savings will come from reducing the leakage and from being able to efficiently identify leaks and schedule their repair effectively. A once off inventory process is needed to do this, given the poor state of record keeping in many cases. It is absolutely appropriate to do this, provided that it is done in a cost effective way. The likes of IBM and Oracle have genuine international expertise to offer, they should not be compared with estate agents, and if they are asked the right question they can contribute to productivity.

@ Brian Lucey

Also, glad to see that after many many years of denial and suggesting otherwise (blog comments, op-eds, a book etc) you have finally relented to the idea that banks and sovereigns will not simply go bust under current EU policy. This makes progress, even it is potentially incorrect on the banking front in my view.

@ All

Enjoy!

http://www.rte.ie/news/player/this-week/

I just saw the latest spin in the Indo. “Bill Gates buys Irish bonds as default risk evaporates”

Yesterday night I watched again “The Ghost and the darkness”, with some Irish engineers “sorting it out”

Some of the celtic tigers might be interesting in that the Tiger Mom Amy Chua is lashing out again in “the triple package”, this time joined by her man, and her tiger cup Sophia being in the Army ROTC, maybe a little underweight, like the

German tiger wiki/Otto_Carius, who still is available with medicine in his Tiger pharmacy : – )

@ All

An additional ghost at the feast; unfunded, or inadequately funded, and, overall, totally inequitable, national pension arrangements.

http://www.independent.ie/opinion/analysis/james-fitzsimons-mandatory-pension-funding-is-only-way-to-solve-crisis-29908478.html

@Tull
+1

I always find BEB’s opinions and facts relevant/informative–even though his opinion of mine is the reverse. Play the ball not the man,surely any distinguished academic like, a TCD Professor ,would agree?

..which is to say im sure its just a pseud that beb got stuck with..no harm. I think the evidence post 2008 is 85% + of people who speak consistently on the irish economy have some classof ideological/financial investment..so bets to take it all with a pinch of salt, or so ive found

“people who speak consistently on the irish economy have some classof ideological/financial..”

The irish economy as a totality, not the the irisheconomy.ie..no offense meant to the locals

@BEB
I think it’s very dangerous for the Sindo.to tell Independent Woman and her common law spouse that the default risk.on Irish bonds is zero. The future may be deflation which would make the current debt load even heavier and as the prof says debt isn’t being paid down. This is no time for complacency even if the bonds are selling reasonably well.

@Eoin

Some of the recent capitulations are beginning to make me wonder whether the top might be fairly close 😉

Grumpy,
You have been generally sceptical on the rally in Irish risk assets for a good part of the rally. Same with Seafoid, who is flogging the bear like well a dead horse. Eoin & JF have been generally right.

Most of of us here, self included have been pretty useless. Of course we have the odd correct call from time to time, pretty much like any punter on a Saturday. Or as one of my old bosses said strategists are like stopped clocks…right twice a day.

There are quite a few though that you would not send out to buy a newspaper.

@ Tull

The fact that interest rates are still on the floor is what suggests this motherfr has a good bit to go. I know it’s the Grauniad not the Telegraph but the words are Merv’s. And that was just last June

http://www.guardian.co.uk/politics/blog/2013/jun/25/mervyn-king-treasury-committee-live-blog

“On unwinding the stimulus
It’s a contingent path. And it’s contingent on conditions returning themselves to normal in order to allow interest to return to normal. We are nowhere near that yet. And I think people have rather jumped the gun thinking this means an imminent return to normal levels of interest rates. It doesn’t.
Until markets see in place policies to bring about that return to normal economic conditions, there is no prospect for sustainable recovery and without that prospect for sustainable recovery, markets understand that it will not be sensible to return interest rates to normal levels.”

Meanwhile Mario announced this week that interest rates are not going anywhere for the foreseeable.

John Authers said a few years ago that it takes at least 7 years to get over a biggie and that the intervening years are marked by booms and slides and generally sideways movement in equities

No sign of the great rotation either AFAIK. Various punters are still moaning about “financial repression”..

@ BEB

‘It’s interesting that Buiter now gets more coverage when he writes for think tanks than he does when he writes for his actual employer.’

Buiter didn’t, and couldn’t anticipate the fact that central bankers were going to throw away their own rule book, and prop up financial assets willy nilly without regard for the macro consequences. Driving people into risk assets is fine until it goes wallop.

Seafood,
You are a stopped clock.

Hmmm Thorsten Beck’s presentation:

Ireland’s Banking System – Looking Forward.

Hmmmm methinks a more precise title, from me usual citizen_serf perspective, would be:

Banking System’s Ireland – Looking Around.

“The clearest analysis I’ve seen of the relationship between economic elites and their political classes, and the global moneyed classes is The Quiet Coup, a lengthy piece by Simon Johnson, former chief economist with the IMF. He writes of “a political balance of power that gives the financial sector a veto over public policy”. The financial sector includes the banks, hedge funds, bondholders and their camp followers.

Simon Johnson: “Under duress, generosity toward old friends takes many innovative forms.” (See the bank guarantee, the bondholder bailout). “Meanwhile, needing to squeeze someone,” says Johnson, “governments look first to ordinary working folk — at least until the riots grow too large.”

Kerrigan again: Hmmme … riots? What riots?

Grumpy,
Now you are being really precious. As if your I markets would tremble if your identity was revealed.
Words do have meaning though and the phrase capitulation …. and top convey a simple message to most market participants.However, if you were referring to a top in wheat or cattle futures I do apologise.

@ PQ

“Buiter didn’t, and couldn’t anticipate the fact that central bankers were going to throw away their own rule book, and prop up financial assets willy nilly without regard for the macro consequences.”

Is this a joke? It was entirely predictable. Some would say it was incredibly obvious. Every CB in the world has done it in the past and will do it in the future, if push comes to shove. Further, Buiter couldn’t, and still can’t, get his head around the idea of solidarity being shown within the context of the Eurozone crisis, and that both politicians and citizens will actually go to extraordinary lengths to keep the Euro project alive.

@Tull

The way this works, or is supposed to, is that when you get to the point that it becomes almost impossible to come up with a plausible mechanism by which a market will fall, when the last bear has thrown in the towel, and it is actually embarrassing to try to contradict the optimism, then you are supposed to force yourself to believe the market is at a top. Think Irish property in 2006, Tony Dye being forced to resign etc.

Albert Edwards, Hugh Hendry etc etc, they have all capitulated, the bulls are so cocky its amazing…ergo?

To put it simply, a quirky, but previously reliable tool makes me suspect risk markets generally could be at or close to a top (ie don’t go higher) right now.

That’s just one guy’s suspicion, and markets are a lot harder to analyse than economies.

@Eoin

Used to go through Albert’s stuff years ago but found the best way to do it was to look at the pictures and not bother with the writing.

This is the relevant bit from HH

“”I may be providing a public utility here, as the last bear to capitulate. You are well within your rights to say ‘sell’. The S&P 500 is up 30% over the past year: I wish I had thought this last year.”

I don’t mind that people are perma-bears, its how sheepish or cocky they get that can be useful.

Its intriguing that I can currently make a very strong argument that almost anything with yield can be bought even now and is bound to be a sound investment. Most assume economics is going to dictate that interest will remain low for a long time, QE will be applied, probably even by the ECB, as necessary, and we even have Summers, Kruggy and, less impressively Greenspan etc all suggesting bubbles are acceptable and even desirable.

How can you rationally sustain a bearish outlook? Who are the noisy bears left? As far as I remember Nouriel ‘its a suckers’ rally’ Roubini turned bullish a while ago.

Maybe the key will be when Buiter goes back to the FT or acedemia.

@Michael Hennigan

Ta for that. The quote that I use recently from George Orwell ….

“At a time of universal deceit, telling the truth is a revolutionary act.”

@grumpy; seafoid

I see that Tull is throwing tantrums out of his pram again with his usual balls of candy_floss … take little notice.

@grumpy

“How can you rationally sustain a bearish outlook? Who are the noisy bears left?”

The absence of noisy bears should be a warning sign that investors are all standing one one side of the boat. Ditto for all-time highs in margin debt. Makes me pretty bearish.

To answer your question, John Hussman is still bearish (and credible) http://www.hussmanfunds.com/wmc/wmc140113.htm.

[Disclosure: I own OTM June S&P and am not immune to wishful thinking]

Say Authers is right and the latest boom of 57 months is just an intermediate step since we aren’t at escape velocity and are due a slide that will be followed by another sequence. Would now bw the time to uncover the shorting machinery and are the people at Squid HQ likely to be thinking along these lines?

fyi
Marshall Auerback: When is a Bubble a Bubble?
Posted on January 13, 2014

“… the most astounding fact about the great bubble decade of the 1990s was that there were 84 months in a row in which the market did not fall by more than ten percent. The previous high in this figure was 28 months. So naturally people began to think that not only were returns so high that you could become rich quick by participating in the stock market; but there was seemingly no risk in chasing such quick riches.

I only mention this because while I think the economics literature from Keynes onward is very good on the propensity of markets to greatly overshoot and undershoot the fundamentals, economics per se does not adequately explain what makes the dynamics of bubbles more than an overshoot. In other words, what makes them recursive, explosive, parabolic? That is the difference between real bubbles and mere waves of pessimism and optimism that move markets all the time even when there is no rational basis.

To get a full measure of this one has to enter into the realm of psychology and neuroscience. That’s where the definition lies. Bubbles, like so much else, are too important to be left to the realm of economics alone.”

http://www.nakedcapitalism.com/2014/01/marshall-auerback-bubble-bubble.html

@ DO’D:

Maybe we should include Charles Mackay* on the reading list for econ undergrads.

*’Extraordinary Popular Delusions and the Madness of Crowds’. But would they read it? Have me doubts!

“So what’s new Pussycat?” 🙂

@BWS

Certainly think that psychology should be included – neuroscience prob a bit much but now influencing behavioural economics. Best would be a year on the fact that so called ‘instrumental rationality’ is one-sided and does not incorporate all of human rationality. Then another year on the structures and processes of power. One more year on a hermeneutic de-construction of Grimm’s Fairy Tales ….. and then dumb down to the mathematics of the ‘perfect’ market in final year.

Then again, I’m only an interdisciplinary generalist citizen-serf – what would I know?

@Prudent Hans

Hi!

A lot of bullish sentiment in the Irish business community:

http://www.rte.ie/news/business/2014/0113/497442-economic-surveys/

We might be growing as fast as 4% GDP yoy at the moment, what does that tell you about the value of Government spending in Ireland?

@ JF

48% of SME bosses say business is “good or very good”.
50% of SMEs have loans that are impaired. Do we know anything about the other 2%?

@seafoid

I think you might have this wrong. There are some big loan write-offs doing the rounds of the sun 20m impaired SME sector, foreign banks leading the way – usually no need to sell the business to more prudent businesspeople, no interruption to private schooling etc.

Coupled to that there is a mini-boom going on in some areas and has been for a few months.

@ JF

Yes, things do change and you should never bet against America and Kerry win an all Ireland every 4 years . But this crisis is serious- it’s 5 years in and interest rates are still on the floor. And things are still very fragile. So if there are a few animal spirits around, great, but there’s a lot more to do. There are so many structural and debt hangovers in the background.

I have shares too and I don’t see them growing much over the next few years. How about your portfolio?

@ grumpy

How can Ireland be immune from global trends ? This is a balance sheet recession. Given the private debt burden, it’s not realistic to posit a consumer led recovery here. Private schools in leafy suburbs depend on a whole lot of less privileged folks getting out of debt and back to work. Someone has to produce the surplus.

There may be a buzz here and there, especially in the ‘markets’, but the bread and butter issue is that credit is expensive in the periphery. 8% APR for a car loan if I recall a recent billboard (small print) correctly. Is that going to get better when interest rates ‘normalise’ ? As for the number of business startups, that could simply be an artefact of training programmes.

@Seafoid

Re Investment

I know little about it, but it seems to me that a sectoral approach makes sense. I have the broader agri sector in mind. People will always to to eat and to grow food. A company such as Yara would fit the bill. [If only my pension fund had invested in it rather than Anglo and AIB.]
http://www.yara.com/

On a different topic.
When the FED buys assets, I assume that it buys bonds, both bank and corporate bonds, paying market price at presumably yields of ~3%- 5%. I don’t understand why there is an explicit or implicit need for the FED to eventually unwind its level of asset holdings. My understanding is that private banks created a huge level of credit and the FED is simply countering the deleveraging of the private banks. [Creating money that the private banks are destroying through deleveraging or other balance sheet adjustments].
Eventually private institutions will have so much surplus cash, that buying back the FED assets will make sense, as they will yield more than the cash holdings, but there is need for the FED or any other CB to cause instability by dumping assets, is there?

After brief discussion of possibility of economic recovery, board mean reverts to normal doom porn setting.

fyi – looking around …

The Irish Media And Austerity

“… The study {UCD full report linked – pity about The Examiner} examined over 400 editorials and opinion pieces in Ireland’s three leading newspapers (Irish Times, Irish Independent and Sunday Independent). It found that only 12% of articles oppose fiscal consolidation, 55% support it, and 34% don’t voice any clear opinion. Worse, those numbers arguably overestimate the extent of the small opposition to austerity, because many of the articles opposing fiscal consolidation simply reject specific cuts without proposing any alternative policy. It is astonishing that only 3% of all articles support an increase in government spending, which could form the basis of a Keynesian stimulus programme. The media debate thus revolves around how best to implement austerity, without questioning it. Totalitarian regimes would surely be impressed by the effectiveness of this information control.

[…] The media have helped the government extensively in that task. One reason that explains why only about 12% of articles oppose austerity is that a large majority of writers come from elite institutions that favour austerity. Excluding regular journalists, 29% of the authors of opinion articles in the press on austerity are mainstream economists, 28% are working in the financial or corporate sector, and 20% are political officials in the three main political parties, which have all supported austerity. In short, the overwhelming majority of writers (77%) come from elite political or economic elite institutions. The remainder is composed of 9% of academics (excluding mainstream economists), 7% of members of progressive organisations, and only 3% are trade union officials. It is thus a very conservative cast of writers who are allowed to take part in the debate in the national media. Elite sectors dominate, but institutions like academia and trade unions are also relatively conservative, further reducing the number of progressive ideas.”

http://www.irishleftreview.org/2013/12/23/irish-media-cheerleaders-austerity/

… and on the blog???

@ Tull: “After brief discussion of possibility of economic recovery, board mean reverts to normal doom porn setting.”

That’s a big mouthful. Care to spell it out in simpl(istic) terms? If I inspect your car and inform you the brakes are defective … … That’s ‘doom porn’? Depends I suppose.

The recovery is underway and the market sentiment has swung dramatically from a year ago.

Last week Bankia, formed from a merger of seven banjaxed Spanish home loan lenders (cajas), which had to get a bailout of over €22bn in 2013, tapped investors for a 5-year senior unsecured bond, raising €1bn at a rate of 3.5%, after the issue was 3.5-times subscribed.

Business capital spending will sustain the recovery but pre-2008 will not be back after the classic recovery spurt in activity.

Aldi and Lidl, the German discount retailers, had their best UK Christmas seasons since they set up operations there in the early 1990s. Absent credit on tap and pay rises, Christmas shopping was also restrained in the US. It was estimated in 2010 that the top 5% of Americans by income accounted for almost 40% of all consumer outlays. Outlays included consumer spending, interest payments on installment debt and transfer payments.

On investments, the ISEQ at end-2013 was back to Feb 1998 levels; it’s likely that not many individual investors cashed out when the market peaked on Feb 21, 2007 – it was almost 2 weeks after HSBC announced multi-billion dollar losses on US prime mortgages. For several years there were reports of a massive rise in interest-only mortgages. Nobody heard the news!

On the long-term, forecasts of growth are not reliable but multi-decade trends do generally matter.

The European Commission is not optimistic about the long term:

Eurozone living standards could fall to 60% of US levels by 2023 – a mid-1960s ratio

@ Seafoid

“50% of SMEs have loans that are impaired”

what is the source of this statistic? If you are refencing the Fiona Muldoon comments, please note that they have long since been clarified by the CBoI as being inaccurately described as “impaired”. Apparently the correct description should be that the banks have 50% of their loan book that they are worried about, ie could still fully current, and may never get into trouble, but are under some sort of watch or increased focus.

@Bond

According to the Bloomberg article that I referenced above the definition of a bad debt is actually up for discussion within the EBA so who the hell knows if Fiona Muldoon or the CBoI are actually correct – it seems nobody really knows.

The right answer will be the one that allows the Eurozone banking ship to continue sailing and that will likely mean rule changes because without a rule change the capital deficit will likely be extreme.

Anyone for fudge??

@JF

“We might be growing as fast as 4% GDP yoy at the moment, what does that tell you about the value of Government spending in Ireland?”

It tells me that that if we can pump that up another 1.5%, we will manage to get to a net nuetral position for the economy as a whole in terms of meeting our interest payments on debt for the year. Any growth below 5.5% will be taxed in full to service debt….what does that tell you about debt sustainability?

@ BEB: I am vanquished! The following is for Tull.

“Early afternoon Tull!”. Here’s one for you to ponder on. Human economies are physical processes embedded within a finite (fixed volume) container with finite (fixed) amounts of raw resources (air, water, commodities, etc., etc.) with which to conduct that economic activity. Money is not a limiting (finite) resource. Of course, there are us pesky humans. We just keep increasing in number. Bit inconvenient that.

Climb a stairs often? How about Coagh Patrick? Think about the effort (energy) needed to climb. If its a normal domestic-style flight of stairs, then each successive step up requires the same effort (energy) as the previous one. An interesting thing (in terms of the effort needed) is that although your total effort increases the more steps you climb, your marginal effort (climbing each succesive step up), is smaller and smaller relative to your total effort already expended. Now back to that mountain. And for ‘climbing’, mentally substitute ‘economic growth’.

Skip Croagh P: lets think Everest. The lower approaches require little effort, but slowly, inexorably, the slopes become steeper, the terrain rougher. More and more effort is needed to climb. Eventually you have use both your hands and feet to keep climbing. Above a particular altitude you will need protective clothing and climbing gear. Go much higher and you need to have a cylinder of compressed air as well. Climbing at those altitudes – even over a gentle slope is completely exhausting. Your marginal effort increases the higher you go. That’s the analogy for our modern, mechanized economies and our use of finite fossil fuels to grow them. The farther (or faster) you go the greater and greater your marginal expenditure – not of capital (that does indeed increase, but more like the marginal increase in effort in climbing a flight of stairs), but of our expenditure of our finite fossil energy resources.

Fossil energy makes our world go round! Our expenditure of fossil energy resources (even allowing for some very sophisticated prosthetic technologies) is exponential, that is, our marginal economic effort in ‘growing’ from where we are currently, to where we need to be – requires the expenditure of an amount of fossil energy equal to everything that we have already expended – and then some! There be limits to this sort ‘economic growth’ thingy. But that’s Nature. And its Nature that calls the economic growth shots, not us. Mind you, we are such arrogant sons-of-bitches that we DO know better. Indeed!

Now, this is not your normal subject matter for undergrad study in economics. So you are quite unlikely to encounter it – except on this blog courtesy of Brian the Merchant of Doom Porn. “Your welcome!”.

QE – the emission of electronic, virtual money, is like climbing that flight of stairs. The marginal cost of emitting extra billions (or is it trillions now) gets less and less the more you emit. No sweat here. So to ‘grow’ consumer demand – which is what is desperately needed – just let the ECB send everyone a free-of-charge, electronic ‘selfie cheque’ onto their iPhone – or similar. Economic problemo solved! Eh, no. But you will have to think hard and slow about that one. And do ye know what? I do believe its kinda doomy and porny. Interesting times, as they say. Oh, I almost forgot. Us pesky humans. Now we would not be part of the overall economic growth problemo, now would we? Naw!

“QE is alive and well. Long live QE!” Its costless!” Depends, I suppose.

@Bond. Eoin Bond

Julien Mercille (2013) ‘The role of the media in fiscal consolidation programmes: the case of Ireland’. Cambridge Journal of Economics 2013, 1 of 20
doi:10.1093/cje/bet068

Manuscript received 24 January 2013; final version received 7 July 2013.
Address for correspondence: School of Geography, Planning and Environmental Policy, University College, Dublin, Belfield, Dublin 4, Ireland; email: jmercille@gmail.com

http://dublinopinion.com/downloads/cje-mercille-published2013_irishmediaandfiscalconsolidation2.pdf

Economics (or Political Economy) is NOT the sole preserve of ‘trained economists’, to use a phrase from a regular on here. Neoliberalism and ‘austerity’ are also of interest to other disciplines and to interdisciplinarians such as meself. I don’t take too much notice of being ‘guttedby Dan O’B – a bit like being walloped by Tull with his candy floss balls.

Any empirical glance at the meejia around here would agree with Mercille.

You note: ‘But austerity simply had to happen given the restrictions on the ECB’s mandate and the real-politik of Eurozone policy.

… the restrictions on the ECB’s mandate and the real-politik of Eurozone policy.

These were, are, policy choices – there were, are, alternatives.

That said, keep up the work – but beware of DanO and his little tantrums.

Wonder how many rejections DanO might have received from The Cambridge Journal of Economics?

@ Grumpy/Shay/DoD et al

here is the transcript of the debate between the two of them

http://www.broadsheet.ie/2014/01/06/on-a-right-wing-and-a-prayer/

Please show me how DOB doesn’t get by far the better of this argument. Mercille eventually has to admit that the newspapers did provide coverage, just not on the front page etc. Mercille ends up using vague, subjective argunment and Dan gives him actual facts. As one of the commenters suggests, Mercille’s main argument is that there is a conspiracy in the media to not allow balanced opinion. Its not a very strong argument to be fair, given that Fintan O’Toole is such a strong influence within the Irish Times.

Some academics have no common sense. No barrier to the label “elite” though. Bearing in ming his definition at (1) above for ‘proponents of fiscal consolidation’ consider this summary of what they believe:

“Proponents of fiscal consolidation maintain that public borrowing to make up
for budget deficits ‘crowds out’ borrowing by the private sector that would lead to investment and pushes interest rates upwards, reducing private investment further. Moreover, politicians are subject to electoral pressures, which entail wasteful spending, in contrast to the private sector, which is subject to the efficiency of the market. Furthermore, governments may be tempted to finance their accumulating deficits by printing money, leading to inflation.

Advocates of fiscal consolidation assert that it can be expansionary and pull countries out of a recession. The rationale is that balanced budgets lead people to expect taxes and interest rates to remain low. This should increase the confidence of investors and the public, which will be inclined to spend more, thus stimulating the economy. The confidence of bondholders and international financial interests will also increase, as the likelihood of default on sovereign debt is reduced. If investors in government bonds do not have this confidence, interest rates will move upwards, making it more difficult, and eventually impossible, for governments to borrow.”

No mention there of the fact that you might be opposed to increased deficit spending for the simple reason that Ireland was shut out of the bond market and the only financing available was conditional on…..drumroll…. yes, you guessed it, fiscal consolidation!

Word counts:
“austerity” 42
“borrowing” 3
“conditionality” 0

Just goes to show the value of “peer reviewed” publications.

In my view, the flaw in the position of those who opposed what became known as austerity, is that there was not an alternative offered to appeasing private lenders and later official ones.

Iceland was a different kettle of fish and it was often the fallback but downsides were really not detailed: debt default – the ECB would have to capitulate was the easiest option, and the practicalities of suddenly exiting the euro in an economy that hadn’t a sustainable indigenous tradeable sector, were too much of a hassle to deal with. It wouldn’t arise as the rest would raise the white flag.

The mainstream media organisations were boom cheerleaders whether it was INM as a private sector group, The Irish Times as a charity, and RTE as a public sector organisation – it was either good for the share price or your bonus.

In 2004, The Irish Times had 2 accountancy partners, a managing director of an advertising agency, the former head of Waterford Wedgwood and a prominent banker, on its trust board.

It would have been difficult to sail against the prevailing wind with that amount of orthodoxy on its board.

So at that time, dissenters were as welcome as they were to Bertie Ahern.

After the bust, dissenters were given some space in the IT by the same people who had previously thought that the free lunch had been invented.

However, as David Begg, central banker and trade union leader suggested, in reference to myself, arguments made by “people of status” – at the ESRI – should be taken more seriously (RTE Radio One’s News at One, Dec 15, 2010).

@MH

According to David Begg – the former credit-fueled-boom-time central bank guy, – pundits at the ESRI were “people of standing”, wheras you were not.

@Michael Henigan

However, as David Begg, central banker and trade union leader suggested, in reference to myself, arguments made by “people of status” – at the ESRI – should be taken more seriously (RTE Radio One’s News at One, Dec 15, 2010).

Being denigrated for your seriousness by David Begg is the auld “being savaged by a sheep” experience. I was at an anti-austerity rally where I remember him being roundly booed by the crowd of nurses around me as he spoke. An unloved insider.

Oh and Shay, it has nothing to do with him not being an “economist”.

Can you even define “economist”?

@grumpy

Tell you what, your google toolar will let you do a site search instantly. Try to find a single comment from me advocating either ’austerity’ or ‘fiscal consolidation’ for a country other than Ireland.

OK grumpy, my mistake and I apologise for it. I’ll comment no more on this thread.

@BEB

As both an economist and one of the 75% that voted for the ‘alleged’ pro austerity parties I fear you have deliberately or otherwise muddled a number of topics to generate a narrative you are seeking to support. I am far from left wing mainstream, yet I am wholly opposed to the so called ‘fiscal consolidation’. This is purely because fiscal consolidation is a function of our governments abject failure to make any progress on getting a fair deal on debt. I was one of the 75% of people that voted for them – not because they were pro-austerity (“labours way or frankfurts way”….”not another red cent” (vardkar)) – They did not sell themselves to the electorate as pro-austerity. That they turned out to be just that in no way supports your case to denegrate Mercilles.

Btw, I can think of nothing more right wing that supporting a position that says you should not subsidise/reward failed investors.

Finally, DO’Bs ridiculous drawing of paralells with the global warming debate is still ridiculous with what happened in this country being much more analogous to taking the route promoted by global warming deniers than concerned and scientific majority.

seafoid,

Marc Faber is called Dr. Doom

and QE suppressed US mortgage rates, very substantially, and therefore building the next price bubble, that is the purpose of QE.

They pushed it about 20% above what I consider “fair value”, and the resulting wealth effect is a 13% higher wealth / income ratio, resulting in a one-time GDP push of about 2% (my estimate)

http://www.federalreserve.gov/releases/z1/Current/z1r-5.pdf table R.100 line 22 / line 23

And when you follow this table periodically, you will find, that they are constantly changing the numbers, at least 3 years back, to the tune of 5% in the last half year.

The same gimmickry as in the UK, spend now, suffer later.

@Joseph Ryan
Irish Water

In the video link below,produced in March 2011 by James Coyle a candidate for the Senate election; the then Dublin City Manager John Tierney,now the CEO of Irish Water,is asked hard questions;

@ seafóid,

“50% of SMEs have loans that are impaired”

The Central Bank’s Macro-Financial Review usually includes a good chart on impairments in SME lending. In Q1 2011 the impairment rate on SME/Corporate lending was around 15%; the latest figures are for Q3 2013 when it was put at around 27%. Note the the rate doesn’t give the amount. At the start of 2011, there was €60 billion of SME/Corporate lending outstanding of which 15% is €9 billion. The latest figures show that the banks have around €40 billion of SME/Corporate lending so the total impaired is around €11 billion.

The 50% figure comes from combining ‘vulnerable’ loans to those which are actually ‘impaired’. See chart 32.

http://www.centralbank.ie/publications/Documents/Macro-Financial%20Review%202013.1.pdf

John Waters discovers Mercille ….

The study treats in passing the ideological role of media in stoking the conditions which gave rise to the boom, particularly in the housing market. Mercille cites a 2010 study of Irish journalism practices – “Irish Financial Journalism and the End of the Celtic Tiger”, published in the Irish Communications Review, which found that journalists “were leaned on by their organisations not to talk down the banks [and the] property market because those organisations have a heavy reliance on property advertising”.

http://www.irishtimes.com/culture/media/we-are-poorly-served-by-the-media-s-uncritical-support-for-austerity-1.1657820