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About LinkBacksSo what's the solution chief?Originally Posted by Cael
So what's the solution chief?
"Je n'ai pas besoin de cette hypothèse." - Pierre-Simon de Laplace to Napoleon Bonaparte.
Why do they suddenly have no need to here?
I was hoping they'd play 'Near My God To Thee', with clips from 'Titanic'.
Sure, it's nice to hear positive news.
But it's also very dangerous if, in fact, the truth is very harsh.
I'm not an economist, but it struck me that what Charles regards as one of our strengths - the fact that we are "very rich", with salaries on average about 33% higher than the UK - is actually one of the biggest millstones around our neck, that is making us less and less competitive and driving away foreign investment.
He also fails to mention the plunging tax revenue and bloated public sector and the fact that the country's (not just Government's) foreign indebtedness is sky high compared with other EU countries.
Charles may be a pleasant fellow, but a sick patient needs a doctor who is competent and honest, rather than a jolly nice chap!
Right now, Ireland is an extremely ill patient, and the treatment won't be quick or easy.
I think the point is Ireland is coming from a posistion of strength much higher then most other countries - we have not had a mass pull out of multinationals - there have been some job losses, don't get me wrong, and that is painful for those affected but we have scope for correction and wages etc can contract more then most in this country and it is not critical. The foreign press sees the deflation rate of 4% as a disaster - it is not. It is the level of correction we need - it is proportional to the level we were at. People here will welcome that rate. We have to be careful it does not become runaway of course but we have scope and people will have to accept that we will have reduced living standards - and not do what the teachers are doing for example - which is nothing short of treason in this environment. Our living standards will fall but if people accept that we will still be well off even after this correction then we can have some confidence and be getting back on the right track.
This is an important factor: many of these multi-nationals have made such huge losses in the USA recently, that they may not be liable for any tax at all in the USA for a while yet. So it may make sense for them to shift their Irish ops back to the Land of the Free.
There again, they mostly do hope to return to profitability and thus a US tax liability at some point.
When you see the words "Mises" or "Hayek" in someone's post, just ask yourself: do I really want to ban paper money and go back to gold?
You have to pity the kind of people who buy into conspiracy theories. I find the following to be the saddest words on the internet: "Re: connection between Bilderberg puppet lady gaga and viral outbreak in ukraine "
The solution, in my view, is to turn this economy completely away from the Chigago School model, nationalise the banks, and the land, start building a native industry and start building homes - we are still very short of homes by European standards. Many of the estates built in the middle of nowhere over the last ten years will probably have to be torn down and returned to agriculatural land. The model of having Ireland as a parasite on the US and UK economies has been shown to be a dangerous fraud.
Indeed, a change in the US tax regime could wipe out the multi-nationals here in one go, then we are shown to be where the Irish economy really is - still a semi-feudal economy.
[ame="http://www.youtube.com/watch?v=v4eoPlPtl7o"]YouTube - In-Depth Look - Fitch Cuts Ireland's Credit Rating - Bloomberg[/ame]
I am not a doommonger, over on the propertypin, I am probably considered one of the more deluded optimists (it's all relative) but, unfortunately there are significant flaws in what this guy is spouting. GDP is not a reasonable measure of Irish national income because of the unusually high MNC presence.
So he is significantly underestimating the level of debt as a proportion of national income in the Irish economy, which is an elementary flaw. I get the impression he has not looked at the Irish economy in any great depth and is just providing a very broad strokes commentary.
One question the interviewer ought to have asked him - if the fundamentals of the Irish economy are so sound, how come the Irish stock market index is down by 80% from peak, whereas in the US, UK, etc, shares indices are down by only 50% or so?
London economist upbeat on Ireland
SPOTTED IN Dublin yesterday: the one overseas economist who doesn’t think Ireland is a complete economic mess.
Charles Dumas, chief economist at London-based analyst firm Lombard Street Research, says Ireland should not be “massively pessimistic” about long-term growth. The Irish economy is “not exactly a disaster zone”.
In days when everyone from the New York Times to al-Jazeera is pausing to highlight Ireland’s boom-to-bust horror story, this is as positive as it gets.
Net public sector debt here is much less than it is in Britain, France and Germany, Dumas begins.As far as real buying power goes, measured in terms of purchasing power parity (PPP), Ireland is still richer than other western European countries.
The bank guarantee means the chance of a Northern Rock-style crisis of confidence among depositors “doesn’t really exist”, while the emergency Budget was “a step in the right direction”, he believes.
“My point is not so much that there isn’t a problem, but that it’s a problem that can be coped with,” says Dumas, who has worked for JP Morgan, General Motors and the UK Conservative Party. He’s about as fond of the euro as the last group.
“Obviously the problem would be much less if you had a separate currency,” he says. “The disadvantage of the euro in the current condition is that if you’re reducing your income to a realistic level, then you’re increasing your debt burden, because the debts are already fixed in euro.”
So should the Government get it over with and nationalise the banks? “The best thing to do is keep your heads down and stop talking about it. Always a difficult thing to do in an Irish context.”
Indeed. And in a newspaper context.
“It’s not the normal modus operandi of a newspaper, of course, but if you’re asking what the best policy is, I think that probably got something reasonably good in place.”
The trick is to play for time. Where Dumas, Brian Cowen and “Erin Go Broke” author Paul Krugman agree is that the recovery will be export-led. Happily, Dumas is as bullish about the economies of our trading partners as he is about Ireland, forecasting a recovery in Britain and the US from the third quarter of this year.
That soon? On Wednesday, the City of London laughed at Alistair Darling’s suggestion that the UK would bounce back in 2010. “I’m in the embarrassing position of being less pessimistic than Alistair Darling, which takes some doing,” he admits.
Dumas, who has written extensively about the balance of power between China and America, is equally optimistic about the US economy, describing its quantitative easing policy as “a genuinely enlightened piece of work”. It is the “balanced-budget obsessives” in Germany who are making the biggest policy blunders.
But overall, things are not as gloomy as the headlines suggest:
“If you read George Orwell, you will find that the 1930s was not like this.”
This article appears in the print edition of the Irish Times 24th April
Certainly refreshing.
This is false economics from the youtube guy.
We cannot simply wish away our serious problems as Cowen, Lenihen and FF in general would like us to do.
We cannot say we are poor now but we will be rich tomorrow as Donnie Cassidy was spouting today in the Seanad.
There are deep systematic problems in Ireland. In two or three years our national debt will be well over 100 billion and may cost 6 or 7 billion in interest payments alone each year just to service.
Given that most experts believe the turnaround won't come for two years, by then we could have 800,000 on the dole.
I don't want to paint a depressing picture, just a realistic one. If you think things are bad now, they can only get far worse over the next couple of years, all because of FF corruption and idiocy regarding their developer friends and the banks.
We are certain as a country to run out of cash probably sometime in 2010. With dminishing tax income, rising welfare bills and rising national debt repayment costs, at some stage something has gotta give.
All we can hope is that Cowen is kicked out before then before he completely destroys the country. Hanging onto office for dear life just so people can think he is like De Valera or something will be his biggest misktake.
He's not up to the job, the job is far far beyond his capacity, he is and always was a follower and not a leader, and it's time for someone else to lead.
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