The Irish Economy: What Needs to Be Done?

McWilliams is saying on the PK show that it could be an opportunity and that we could end up either like Finland or Uruguay - boom or bust - depending on what we do.

He also says the fundamentals (debt to GDP ratio) have shifted from being a Government issue in the eighties to the pockets-of-people-issue today. He foresees the key being to solve the personal debt problems that will not today allow us the option of emigrating as we had in the 80s ...

McWilliams is withering on the banking sector's role in this.


The best are at this now
The scimp and scrape thread
http://www.thepropertypin.com/viewtopic.php?t=10815


Ideas for fixing the economy
http://www.thepropertypin.com/viewtopic.php?t=11036

I think we need to get our IT excellence strategy fully into gear very quickly. The strategy to rely on indigenous talent and training was misguided as it totally misunderstood the level of natural individual ability that is needed to drive this industry. The programmes to bring in top grade foreign workers need to be perfected and implemented immediatey.

I note the ESRI agree with me on the public services issue.

I think it is now a given that the banks have to be differently regulated in the future in order to maintain sustainable lending and to prevent a decline in funding to start-ups when times get hard.

One important thing is we have to accept that we are in hard times and that we will have to get through them together. We need a culture of national unity and cooperation.

What would be welcome at this point would be if we got some reassurance that most jobs are safe. The levels of stress and unease for workers in all industries is unhealthy for the economy and for the individuals. At the same time, I agree with David McWilliams that personal debt needs to be cracked.

Zhou_Enlai wrote:

I think we need to get our IT excellence strategy fully into gear very quickly. The strategy to rely on indigenous talent and training was misguided as it totally misunderstood the level of natural individual ability that is needed to drive this industry. The programmes to bring in top grade foreign workers need to be perfected and implemented immediatey.

I note the ESRI agree with me on the public services issue.

I think it is now a given that the banks have to be differently regulated in the future in order to maintain sustainable lending and to prevent a decline in funding to start-ups when times get hard.

One important thing is we have to accept that we are in hard times and that we will have to get through them together. We need a culture of national unity and cooperation.

What would be welcome at this point would be if we got some reassurance that most jobs are safe. The levels of stress and unease for workers in all industries is unhealthy for the economy and for the individuals. At the same time, I agree with David McWilliams that personal debt needs to be cracked.

I think there is plenty of ability, it is just moving in the wrong direction. Does anyone remember the young guys (brothers) from Limerick who were IT high flyers still at school? - they went to Enterprise Ireland who told them to go away and suck their lollipops and now they are at MIT or wherever and running megacompanies elsewhere etc. etc. There are loads of brilliant Irish people it is just that the conditions aren't here for people to take new ideas into production. Government is putting money into Phd.s at last, but there was a good little thread on P.ie a few months back that said Universities don't know how to sell on patents and have crazy ideas about what they are worth. Where we need people is at the strategic public investment level. No one in Government or the Civil Service seems to understand IT and they seem to think it is O.K. to pretend you have the capacities when you don't.

And what about our anarchist co-operative thread? From what I could read, the co-ops were much better at adapting to recession and surviving that conventional private enterprise. I wonder if there are lessons to learn from the Spanish worker co-ops or the Po Valley?

There is ability but they are all studying to get into Blackhall Place or are off in Aberdeen studying pharmacy. I agree that we can do a lot in the long term to promote IT excellence in the indigenous population. However, we cannot wait that long and even then we will not be able to compete with China/India. Silicon Valley has known this for years and has brought the talent to the USA from outside. We must do the same and we must do it straight away while we are still in the game. In any event, bringing foreign genius to our universities and farming out our genius to foreign universities is an important part of the strategy.

Myles Dungan or Brendan Keenan on PK said the level of house building dropped from 70,000 last year to 30,000 next year, other than that the economy is growing at 3.5% ... if true could that include spin-offs and trickle-down from the building industry ? If it does it can't include that much so if we got ourselves sorted out with the houses then maybe the rest of the economy is actually doing quite well.

Zhou what would you do for banking regulation ? I can't get it out of my head that Energy policy desperately needs to be addressed. The home building boom could sort of go on if alternatives were given more grant-aid and if banks could lend at rates where alternatives became viable.

On Clarefm recently they were whining about a Home Improvements (?) grant for the elderly which happens to be significantly lower in Clare than for others in other counties. It had "just recently come to the attention" of the FG politician on there, Pat Breen. How the feck do these lads not know what's out there ? Apparently even though there is less funding in Clare for heating and home stuff, a lot less money was applied for than could have been... Why the hell aren't FG and Labour politicians not knocking on people's doors with this news ? Do they not want votes ? Then again maybe the terms of the grants have changed where you get the grant after you pay for your dry lining, new boiler, solar immersion etc.

Something could be done in this respect that would have macro-effect, I'm sure of it.

Cactus I see your post now which shows how short-sighted we are with regard to technology. There is also a fund of money for rural schemes administered by Eamon O'Cuiv's department - about 500 million of it. It can be accessed if local people elect committees to deal with it in their areas. 50 areas have been identified as requiring those committees and 5 have elected their people. There's cash around alright but it's not getting to the right places or people...

Zhou_Enlai wrote:

There is ability but they are all studying to get into Blackhall Place or are off in Aberdeen studying pharmacy. I agree that we can do a lot in the long term to promote IT excellence in the indigenous population. However, we cannot wait that long and even then we will not be able to compete with China/India. Silicon Valley has known this for years and has brought the talent to the USA from outside. We must do the same and we must do it straight away while we are still in the game. In any event, bringing foreign genius to our universities and farming out our genius to foreign universities is an important part of the strategy.

I agree Zhou. The main thing is to go for world class people, wherever they are from. But if we don't have structures in place to capitalise on their work, they will just leave again, or the people they teach will leave.

Auditor #9 wrote:

Zhou what would you do for banking regulation ?

I m not an expert on this and I think we need the views of experts.

One thing that has occurred to me is that bankers remuneration cannot be linked to volumes of lending simplciter. A prudent banker who made the right decisions on lending will probably have made less in wages and bonuses than a banker who threw money at ill informed people buying loads of properties in all the wrong places. A banker of conscience who took a chance on medium loans for new productive businesses will have made less money than the banker lending to multinational companies and people buying tracts of land.

Whatever regulation is brought in must be unhurried, carefully considered and thoroughly bug-tested prior to implementation. We don't want a Homelands Security/Sarbanes-Oxley knee-jerk type reaction.

cactus flower wrote:

Zhou_Enlai wrote:

There is ability but they are all studying to get into Blackhall Place or are off in Aberdeen studying pharmacy. I agree that we can do a lot in the long term to promote IT excellence in the indigenous population. However, we cannot wait that long and even then we will not be able to compete with China/India. Silicon Valley has known this for years and has brought the talent to the USA from outside. We must do the same and we must do it straight away while we are still in the game. In any event, bringing foreign genius to our universities and farming out our genius to foreign universities is an important part of the strategy.

I agree Zhou. The main thing is to go for world class people, wherever they are from. But if we don't have structures in place to capitalise on their work, they will just leave again, or the people they teach will leave.

As long as they make their million and their contribution before they leave we wil be ok.

You need this country to be a good place to invest in for cutting edge technologies. You need a tax structure that favours that and links to Universities that produce relevant research. You also need to encourage all individuals who decide to take a risk and set up in business.

Agree we need to attract top grade people to our shores. One of the reasons I like London is you can get real expertise on virtually anything from tax structures in Nigeria to Hindu religious iconography. It is a brilliant place to put together whatever information you may need and check the assumptions.

Education is a good thing but some education is a lot more useful than others. Yes we need all sorts of people including the creative, the authors, painters, musicians as well as applied science. However there is a whole section of University courses that are very mediocre and of dubious benifit. I think we need to consider Education provision a lot more carefully. I am less and less sure that University is appropriate for many now going there.

Culture; you need a culture where people try and if they fail well at least they had a go attitude, instead of this stigma of he's a failure Ya Bo. All you need to do to see the problem is go to politics.ie and read the sack cloth moans. They almost wish the end of the world was nigh. Banks must fail, house prices must drop 60% do they ever think of the consequences of what they wish for? There is a difference between being realistic and wishing for purgatory.

Investment. I am utterly convinced that what causes economic bubbles is not too much money chasing too few goods, that is the symptom. The cause is lack of access to trusted alternative avenues of investment. We need to make it easy for people to invest in new technologies here and invest in pensions here. It must be a common place thing to do. To do that we need to clean up the financial and political sector. We need to have a reputation for financial integrity next to none in the world. Do that and that sector will thrive. We need to fall on people who are fraudulent and we need severe penalties that are rigorously enforced. Some of the politicians who are currently under investigation should receive the most severe penalties possible if found guilty. We need to set examples and continue in that course. The financial sector relies on trust and reputation.

Raising finance in this country should be more than just going along to the bank and paying them 2% arrangement and whatever they ask. Other options need to be a lot more accessible and we need to be able to promote our businesses to potential investors better.

That's my moan for the morning.

Squire wrote:

You need this country to be a good place to invest in for cutting edge technologies. You need a tax structure that favours that and links to Universities that produce relevant research. You also need to encourage all individuals who decide to take a risk and set up in business.

I think we're getting that right since I remember reading that NovaUCD was expanding because so many new companies were being established there in the past few years.

Quote :

Agree we need to attract top grade people to our shores. One of the reasons I like London is you can get real expertise on virtually anything from tax structures in Nigeria to Hindu religious iconography. It is a brilliant place to put together whatever information you may need and check the assumptions.

Well, with our immigrant population we have an infrastructure there to bring people together. We can build on those foundations like the US, Australia and Canada which are successful immigrant countries.

Quote :

Education is a good thing but some education is a lot more useful than others. Yes we need all sorts of people including the creative, the authors, painters, musicians as well as applied science. However there is a whole section of University courses that are very mediocre and of dubious benifit. I think we need to consider Education provision a lot more carefully. I am less and less sure that University is appropriate for many now going there.

Well, nearly everyone is going to University. I remember reading in the CSO: Measuring Ireland's Progress that we have the second-highest proportion of people going to university in Europe.

Quote :

Culture; you need a culture where people try and if they fail well at least they had a go attitude, instead of this stigma of he's a failure Ya Bo. All you need to do to see the problem is go to politics.ie and read the sack cloth moans. They almost wish the end of the world was nigh. Banks must fail, house prices must drop 60% do they ever think of the consequences of what they wish for? There is a difference between being realistic and wishing for purgatory.

Indeed. I think a huge, envious, begrudging streak runs through many people in P.ie. That upsets me. You are absolutely right in your point on "realism". In P.ie, pessimism is dressed up as realism.

Quote :

Investment. I am utterly convinced that what causes economic bubbles is not too much money chasing too few goods, that is the symptom. The cause is lack of access to trusted alternative avenues of investment. We need to make it easy for people to invest in new technologies here and invest in pensions here. It must be a common place thing to do. To do that we need to clean up the financial and political sector. We need to have a reputation for financial integrity next to none in the world. Do that and that sector will thrive. We need to fall on people who are fraudulent and we need severe penalties that are rigorously enforced. Some of the politicians who are currently under investigation should receive the most severe penalties possible if found guilty. We need to set examples and continue in that course. The financial sector relies on trust and reputation.

Well, our financial sector has blossomed over the past 20 years. We are the world leader in terms of international funds and the financial sector has roamed far from its humble beginnings in Dublin's docks. A sensible regulatory environment is one of the key reasons identified for our strong and sustained growth in finance.

Quote :

Raising finance in this country should be more than just going along to the bank and paying them 2% arrangement and whatever they ask. Other options need to be a lot more accessible and we need to be able to promote our businesses to potential investors better.

Exactly.

Quote :

That's my moan for the morning.

Squire, you're fantastic and a great person for our site. You have a very fair view of the world.

Thanks Ard-Taoiseach I blame a privileged but exceedingly hard childhood.

Is there a national book of accounts with expenditures and so on that could be printed each year and made available to the public maybe for a small fee of two or three euros ?

This slim book or couple of books if necessary (another for the HSE) would show what each TD gets paid, their expenditures as well as the expenditures of each department in the public arena, as well as social welfare, public salaries, tax intake, capital costs, infrastructure and so on - the National Accounts - published yearly and made into a slim and readable and critical form, possibly using comparisons with other EU paid public people etc. These figures turn up from time to time in the newspapers and it would be great if they could be collected yearly into an almanac type volume which people could fume at around Budget time.

If this is already available from the Department of Finance and somebody knows it could they please show me to it ?

Do you mean like a statement showing a breakdown of how we spend the 50+ billion euro ?

Christ. Did I spend that much

Here's the exchequer statement for 2007

Departmental breakdown on page 2. Enjoy!

PS: it would be interesting to do a drill-down (management speak ) on some of the bigger ones, Health and Education for example, just to see where these vast sums of money actually go.

PPS: Then you could look at The Book of Estimates

And The Capital Programme

Note the Land Registry fees of €75 million. I wonder is ths profit.

Land Registry fees are a significant cost in land transactions which they affect including switching your mortgage. These extra costs affect people randomly and are not shared by all. More importantly, they are a barrier to consumers switching their mortgages to more competitive lenders.

Zhou_Enlai wrote:

Note the Land Registry fees of €75 million. I wonder is ths profit.

Land Registry fees are a significant cost in land transactions which they affect including switching your mortgage. These extra costs affect people randomly and are not shared by all. More importantly, they are a barrier to consumers switching their mortgages to more competitive lenders.

I presume it is Zhou. It's effectively a tax is it not ?

EvotingMachine0197 wrote:

Here's the exchequer statement for 2007

Departmental breakdown on page 2. Enjoy!

PS: it would be interesting to do a drill-down (management speak ) on some of the bigger ones, Health and Education for example, just to see where these vast sums of money actually go.

I had a quick look at that but I'm not sure if it's detailed enough - do you know if the expenses of TDs and other officials are available ? Also there are items in there that I'd like to know more about - Receipts - Marathon dividends - does the country have shares in Oil companies or is that Royalties from oil companies who are raping and pillaging our resources ? Why did Bord na Mona pay out 3 million last year and 8 million this year ? Receipts - what's local loans and advances ?

I wonder could we get the breakdown for other EU countries ? Could some of these terms be explained in bogman's terms by Ard Taoiseach or Kerrynorth or anyone who knows ?

What's land registry ? I buy land, I register it, I pay ?

It is effectively a tax but in theory I would have seen it as a processing fee for work done rather than as a tax. The Purchaser is already taxed by way of Stamp Duty.

Auditor #9 wrote:

Is there a national book of accounts with expenditures and so on that could be printed each year and made available to the public maybe for a small fee of two or three euros ?

This slim book or couple of books if necessary (another for the HSE) would show what each TD gets paid, their expenditures as well as the expenditures of each department in the public arena, as well as social welfare, public salaries, tax intake, capital costs, infrastructure and so on - the National Accounts - published yearly and made into a slim and readable and critical form, possibly using comparisons with other EU paid public people etc. These figures turn up from time to time in the newspapers and it would be great if they could be collected yearly into an almanac type volume which people could fume at around Budget time.

If this is already available from the Department of Finance and somebody knows it could they please show me to it ?

Auditor, the CSO publishes this excellent annual account.

The accounts for 2007 will be published soon.

Squire wrote:

Thanks Ard-Taoiseach I blame a privileged but exceedingly hard childhood.

You're very welcome Squire.

Anyone for a civil service pay freeze?

Under the leadership of Ahern, anyone who put their hand up got a pay increase. Utter madness. Public sector wage is way beyond private sector, thanks to the union arse licker Ahern.

EvotingMachine0197 wrote:

Anyone for a civil service pay freeze?

Under the leadership of Ahern, anyone who put their hand up got a pay increase. Utter madness. Public sector wage is way beyond private sector, thanks to the union arse licker Ahern.

As a private sector worker - I'd normally be all for it - particularly given the big rises over the last 6 years.

However I have to agree with Begg and his comments about our upper managerial and directorial oligarchy and the fact their renumeration is never affected by the general economic climate or even the performance of the companies they supposedly run - the stockmarket has a lot to answer for.

If everybody is to be convinced to tighten their belts - then that better be everybody - too much "do as I say - not as I do" coming from the employers organisations at the moment.

Agreed. We need to start at the top with some reductions in the crazy money Government members have voted themselves. It goes without saying the current round of increases should be permanently binned.

The higher Civil Service grades should be frozen until their wages+benefits are comparable to similar work in the private sector and similar grades in comparable EU states.

The Bench Marking Commission, who are clearly dangerous, should be sacked.

The lower clerical grades may be a different matter - I don't know for sure.

We urgently need to give increases to people on the old age pension and social security and other people on very low fixed incomes who are being hit for six by food and fuel price increases and everyone else should be prepared to hold off so that this can be done. We should also be insulating their houses and giving them solar panels.

Edo wrote:

If everybody is to be convinced to tighten their belts - then that better be everybody - too much "do as I say - not as I do" coming from the employers organisations at the moment.

When I heard Danny McCoy and David Begg on the radio about that, I kept thinking of John Maynard Keynes. He argued that economy-wide pay cuts and freezes just weren't the right thing to do since they depress aggregate demand and simply worsen economically-straitened conditions.

Who will be able to afford McCoy's colleagues' goods and services if people are taking pay cuts?

Perhaps we need to go back to the old mechanism of reducing taxes to increase after-tax income but leaving salary levels unchanged. This means that labour costs do not rise for business, workers get more money and the Government gets more tax revenue since the reduced taxes stimulate activity.