Wallowing in recession

There can be no doubt that Ireland’s economy is suffering badly, but are some people enjoying it too much?

As this is my first official contribution to Slugger O’Toole I thought I would begin by bringing up some themes that would give people an idea of where I am coming from, politically speaking. It draws heavily on my own recent work. Finally, it’s only a think-piece, not a manifesto.


Wallowing in recession

To some degree the Irish border has always been imaginary, or at least so functionally non-existent that porous doesn’t even begin to describe it. Despite this there is no getting around the reality that Ireland is home to two separate polities, whatever any of us thinks of the issue. There was some feeling in nationalist and republican circles that the booming economy in the South made Irish unity an inevitability. This was, for the most part, idle talk among people who didn’t have their hands on the levers of power. Both Sinn Féin and the SDLP continued to recognise the question was fundamentally political in nature and couldn’t be simply ignored (though both parties did play the ‘let’s pretend’ game).

Much like the liberal conceit that the EU makes the national question an irrelevance, there is more than a dash of wishful thinking in the notion that political disputes will melt into thin air as history marches inevitably onward. Nevertheless, it was a feeling that had plenty of currency. Until the credit crunch.

For this reason alone, never mind the very real economic ties between the North and South, it’s worth taking a look at the Southern economy, specifically how the enthusiasm of recent years has given way to a case of the béal bocht that makes Peig Sayers look like an optimist.

So, where to start? The meeja, of course.

It is almost impossible to turn on a current affairs programme on television or radio without hearing about our impending demise. So shrill are the voices that one could be forgiven for confusing a typical news broadcast with a re-run of ‘Dad’s Army’. Newstalk radio presenter George Hook has been talking down Ireland’s economy for over a year now, claiming at some points that we were actually experiencing a depression. And Hook is far from alone. Celebrity economist David McWilliams and investment advisor Eddie Hobbs have been among the most vocal in attacking the government, with Hobbs in particular demanding deep cuts to income levels and generally doommongering.

Opposition politicians have, of course, had plenty to say – after all, it’s their job – but what is most interesting is the fact that the public mood is a strange cocktail of anger and resignation.

How the country should deal with a recession is a question that sharply divides people along political lines, but most people in Ireland – at the juncture anyway – seem to broadly favour an interventionist Keynesian approach. Taking that as a given, then, is it really right that all of that money should be spent in the way it is? Rather than patching-up the failing institutions, wouldn’t it be better to massively invest in creating a broad-based and productive economy?

Of course, like any good journalist, I’m not here to provide solutions, merely to note things. The significance of the question about how the recession is dealt with is that it indicates not only an unwillingness to face up to the matter of what makes a productive economy, but also contradictory attitude that we deserve to be punished and yet it is not our fault.

Economics, not moralising

It is perfectly true that Ireland’s boom was not quite the miracle it was once thought to be. If one was so inclined one might say that it was in fact a historical aberration, though that view does a disservice to the changes the economy has witnessed in the past twenty years: the Republic of Ireland went from 65 per cent of the UK’s per capita GNP to 140 per cent in just 20 years. What is indisputable is that the country’s improved economic performance transformed the lives of Irish people, even if the spoils were unevenly divided. Quite why many liberals spent their time criticising this is a question worth asking.

No-one denies that many were left behind by the boom but is it really possible that it was actually a bad thing for Ireland to experience rapid economic expansion?

With urbanisation (and, indeed, suburbanisation) came modernisation; with materialism came secularism; with work came personal freedom. As an example, increased car ownership tends to be viewed through an environmental prism, rendering it a problem. Another way of looking at it, though, is that people on lower incomes are finally afforded personal mobility and the freedom that comes with it. (1)

Anyone who argues from a liberal position that the boom was bad will quickly find they have some strange bedfellows: arch-conservatives. In 2005 John Waters bemoaned how increased wealth had brought with it alcohol abuse and gangland violence, and said the nation failed ‘to look beyond the impermanence of the material world, to put values of decency and compassion before money’. Surely this is topsy-turvy view of not only the relationship between crime and economics, but also a distorted and fundamentally anti-human outlook?

As John Hearne noted, the international press had a field day reporting on Ireland’s woes, often exaggerating them wildly. Why, though, have we ourselves been so keen to be downbeat about our future? ‘Times is tough’, to be sure, but even the most ardent anti-Fianna Fáiler could be forgiven for thinking Bertie Ahern was on to something when he implied that some people are so down in the mouth that they should kill themselves.

Then there is the cod-socialism of ‘bash the rich’. Watching super-rich developers and bankers fall from grace is fun, no-one is denying that. But it isn’t helpful. Any pain experienced by the captains of industry will be meted-out tenfold to the rest of us.

Boom town rents

The common perception during the boom was that the construction sector slowing would have little effect Ireland’s wider economy because most of the work was done by immigrants. This was never true. In fact, in 2006 employment in the construction sector in Ireland accounted for a total of 252,100 jobs from a total of 1,929,800. Of these, 22,600 non-nationals were employed in construction, less than were employed in both the manufacturing and hospitality sectors – and, interestingly, only slightly more than were employed in financial and business services. (3)

The fact that, in 2006, the average price for a three bedroom house in Greater Dublin was €752,734 (approx. £515,214 at the time) (2) indicates a severely over-heated economy. In terms of house prices things were not quite as bad as they were in England where planning regulations meant that few new houses were actually being built. At least in Ireland many of the houses bought and sold were new and thus represented actual productive investment in the economy.

Of course, three years later we now know that when the construction sector tanked the economy went down with it. Worse still, it wasn’t a purely local phenomenon: the entire world economy wobbled badly and at some points looked as though it might actually fall over. Ireland fell as fast as it did because it wasn’t just construction in trouble, it was everyone, everywhere.

However, the fact remains that the Irish economy did not have a sufficiently wide industrial base. Over-reliance on construction was always a bad idea – as is over-reliance on any individual sector – but there appears to be no political will for building a broad-based economy through capital investment in productive new technologies.

As the dole queues lengthen it’s no surprise that people are feeling worried, but that’s no excuse for high-profile figures in Irish life, particularly ones who are still coining it for practically cheerleading the recession. Turning the economic recession into widespread psychological depression will do nothing for any of us. We don’t need therapy or a chance to have a go at politicians, we need an end to austerity starting with a decent economy that provides jobs and wealth.


Jason Walsh is the editor of forth magazine


Footnotes
(1) Between 1997 and 2007 the population of the South increased by 18 per cent while the number of registered motor vehicles increased by 71 per cent and the number of driver licence holders increased by 37 per cent. Source: Road Collision Facts 2007, Road Safety Authority/Údarás Um Shábháilteacht Ar Bhóithre
(2) As calculated by economist Constantin Gurdgiev in 2006
(3) Source: Here to Stay: Non-National Workers in the Irish Economy, AIB Global Treasury Economic Research

  • Henry94

    I used to feel sympathy for the people of Albania who having suffered under one of the most extreme versions of communism found that, when they tried capitalism, almost the entire country were caught out is a terrible pyramid scheme.

    Ireland has suffered a similar process. Our Catholicism was a fairly nasty local variety and when we threw it off we walked straight into the celtic tiger bubble.

    What happens next is easy. Emigration will be back with a vengeance. No talented and sane young person will stick around to pay for NAMA. They will be gone and that will help ensure that the NAMA bet is a bad one.

    With the left out of ideas to an almost embarrassing extent it’s hard to know where Ireland can look for solutions. I suspect that political reform is a necessary first step. There is a possible opportunity there for Sinn Fein if they are willing to offer leadership on the issue. But I doubt they are up to it.

  • kevin barry

    At long last, something sane being said about the South’s woes.

    As an Irish man, I know that a lot of people are finding it very difficult at the moment (to point out the blindingly obvious), however, while I am in agreement that we should hold our politicians to account, I am sick of seeing people wallowing, almost enjoying, in all the woes facing the country.

    It’s almost like some want to see those arrogant developers, business men and politicians who benefited from the massive growth in the economy come undone, even though the ramifications of this happening means that we all come undone.

    Let’s put things in perspective, the country is better now than it was in the 80s. It has come a hell of a long way and yes, it is facing a massive up hill struggle to widen the tax base, transform the economy towards a technology-centric one and cut on down on spending, but I am confident it can be done, not because of Fianna Fail but because there is enough public opinion and oversight on what is happening to make sure that we can hold people finally accountable for there actions.

    This may sound like nonsense to some and they will point to NAMA and the perceived lack of political oversight, however, I believe that NAMA is the only show in town to get ECB funding into the banking system as opposed to nationalisation.

    Sometimes, you just have to have some faith.

  • wild turkey

    Welcome Jason

    another free market advocate.

    now that is exciting.

    your analysis ignores the, and yeah i will catch shit for this, the explicit gombeenism of irish economic policy and its beneficiaries

    The Irish Gov’t, in collusion with the private and trade union sector made decisions that allowed the free market to operate as a barroom brawl.

    When the free market works, it is a prize fight.

    Not a fix.

    … and funnily enough to make the market work well, you have to have a lot of rules. just like boxing.

    in the final analysis you cutely condone the economic and ethical robbery that has, and will, take place.

    Sorry, robbery is perhaps a poor metaphor.

    The irish economic winds will blow very very cold before the key players; be it govt, private sector or trade unions, put their hands up.

    As your preferred option dismisses the ‘need for therapy or a chance to have a go a politicians’

    in the meantime do you expect us to swallow the results of their handjobbery?

  • Jason Walsh

    Wild Turkey, I’m not a free-marketeer. I’m a socialist. Funny old world, eh?

  • Jason Walsh

    Perhaps I should explain that. I am solely interested in ending austerity and increasing freedom (and not just freedom of the market) and living standards. I may not sound like a socialist buT i assure you that, back in the old days, they were concerned with productive investment and technological development.

  • Itwas SammyMcNally whatdoneit

    re. “Of course, like any good journalist, I’m not here to provide solutions, merely to note things.”

    One thing I think should be also be noted in any summation of how we have arrived at the current unpleasant location is the competence and integrity of the political elite – the media, the political parties and particularly the government.

    The political consensus that emerged on the back of a period unparallelled growth meant there was virtually no meaningful debate about the direction and pace of developement with FF still (correctly) able to taunt FG that before the last election the only thing that concerned FG was tinkering with stamp duty. When the question of house prices was raised either by the Socialist Party or by Sinn Fein, Berty, would dodge the issue by sugggesting those raising it wanted to turn Ireland into another Albania. (Something he may just have achieved himself).

    Even, the Irish Times, who managed to keep it’s readers factually informed during the ‘Emergency’ in contravention of the law, seemed to have lost its ability to pass objective comment or to spot that perhaps the only economic law that actualy holds true and certainly the most obvious one – that prices may go down as well as up – might actually apply to a crazy Irish Property market – though that might be partly explained by the fact that you needed a small truck to carry it home given the burgeoning size of the property section.

    And of course, the Plain People of Ireland dizzy from their new found remortgaged wealth decided that Berty – who as Minister of Finance didnt have a bank account and whose crying on prime time TV would have slotted in well with little editing as an extra episode of Father Ted – should be elected to run the country – even though he was facing umpteen corruption charges and spent a large percentage of Ireland’s pre-Celtic Tiger tax take on shirts for the Boss.

    This was a shocking collective failure by a nation that accidentaly stumbled on a secret economic formula which, we were all told by those who should have known better that anyone who dared question it’s special properties would by dint of begrudgery make it disappear again.

    Gross incompetence and hubris has done for us and as the Nation prepares to march on the French Embassy tomorrow to find consolation South American style it’s just a pity no one decided to march on the feckers in Leinster House about 5 years ago.

  • wild turkey

    ‘I’m not a free-marketeer. I’m a socialist. Funny old world, eh? ‘

    … and fair enough Jason, I may very well have read you wrong. let’s say i have.

    in terms of specific policy adjustments, what do you suggest?

    i would welcome your views on fiscal policy (i need not mention monetary policy as that is the gift of the ECB)and govt regulation of the banking sector,

    oh yeah, and what role does the trade union sector have to play, especially with respect to pay and practices in the public sector?

    i do not think the TUS has been an innocent bystander to the train crash.

    funnily enough, i am enough of a socialist to believe that being pro-market; ie an efficient allocation of resources, is really quite contrary to being pro business.

    the tripod of govt, inward investment, and public sector trade union has created the problem you write about… and neither they or the ‘meedjah’ has the capacity or will to execute a fair and progressive solution.

    on personal note. it is ‘pudsy’ bear nite here. my kids love it, i loathe it… hence some misdiredcted irascibility on my part.

    over and out for now

  • Fabianus

    Jason

    You have a mean rapier there, my man. You write well. I bid you welcome to Slugger O’Toole.

    Celebrity economist David McWilliams

    Groan. I saw that RTE have for some bizarre reason commissioned him to chair an Irish rip-off of “Have I Got News For You”. The panelists are comedians, as one would expect. Who ever thought an economist could generate humour? Or is McWilliams somebody’s sick joke?

    In 2005 John Waters bemoaned how increased wealth had brought with it alcohol abuse and gangland violence, and said the nation failed ‘to look beyond the impermanence of the material world, to put values of decency and compassion before money’. Surely this is topsy-turvy view of not only the relationship between crime and economics, but also a distorted and fundamentally anti-human outlook?

    LOL. John Waters wasn’t so au fait with Irish history, otherwise he’d have known that alcohol abuse and gangland violence are practically a cornerstone of the Irish national psyche. And one that was enthusiastically exported to the USA.

    I’m afraid the bottom line for Unionists like myself is that the last place we’d like to be part of (Albania not being on offer) is the Republic of Ireland. I honestly don’t know why Shinners and other Republicans imagine that sentient beings like myself could ever be cajoled into bidding adieu to the very satisfactory UK and choosing to embrace the Paddy Republic.

    No thank you. It’s quite enough that their shoppers steal our parking spaces.

  • Scaramoosh

    At the centre of the current malaise, lies a tame and compliant media. One that has been unwilling to ask the questions that matter; to expose the spiders web that links the banks, the developers, the politicians and the press. One that has been unwilling to expose the old boys network, and the rules of the game that govern membership of it.

    The notion of good old Mother Ireland, so embedded in the Irish psyche,seems to engender a culture within which it is best to deny the truth that stares us all in the face….the country is corrupt from top to bottom.

  • aquifer

    ‘At least in Ireland many of the houses bought and sold were new and thus represented actual productive investment in the economy’

    Yes but… the money was borrowed and must be paid back, usually even if the value of the house crashes.

    We are now driving on tyres with slow punctures, but we may get away with it if we keep checking them. Ireland has the beginnings of a great economy, and the infrastructure for a grand one.

    The thing that will kill us again is failing to make necessary changes quickly enough. Taxing fuel and property, parking, traffic jams and excess consumption, might look like political hari-kiri, but the patient is bleeding out and needs stitches. Meat and two root veg may seem a tasteless now, and the car is looking a bit tired, but we really cannot afford imports. Especially of oil that will only get dearer.

    A good way to make money is to stop losing it. Time to insulate those dodgy hollow concrete block houses the developers sold in the 1960s.

  • Jason Walsh

    Lots of stuff there. I’ll respond tomorrow.

    One tiny thing for now, aquifier, good god, you must be the only other person on earth that knows about that. Did you know the nine-inch hollow-block is disallowed in residential construction everywhere in Europe including in Ireland, except, wait for it… Greater Dublin. Apparently due to its unique climate… Or something.

  • exile

    [i] ..choosing to embrace the Paddy Republic.[/i]
    Posted by Fabianus on Nov 20, 2009 @ 11:20 PM

    Oh fuck off.

  • Sam Thompson

    the problem in Ireland was that when an underdeveloped country (in western terms) reaches the take off stage, it inevitably grows too fast, because the system is based upon capitalising when things are good. Ireland will not again reach those heady days, but that promises a more economically stable future. I think its very interesting to note that the EU is no protective barrier to economic downturn, and maybe the southern Irish political class didnt realise, or wouldnt countenance this during the good times. Its a long road to recovery, but when you get there, it may have given the institutions of state the experience not to let things grow in such a free-for-all fashion in the future. What is clear is that like in the UK, there is next to no differential between the parties on key issues, and as such, governmental change is only tinkering at the edges unless everyone collectively realises that such a boom cant be allowed to go unchecked again. In NI, our current executive’s policy is ‘any investment is good investment’. We can only get away with that because we’re a regional talking shop, not a national government with hands on the main levers of power

  • Sam Thompson

    ‘good god, you must be the only other person on earth that knows about that’

    i’m a student of urban regeneration, i read about this, it would be laughable if not such a monumental waste of energy, and consequently money

  • barnshee

    “12…choosing to embrace the Paddy Republic.
    Posted by Fabianus on Nov 20, 2009 @ 11:20 PM

    Oh fuck off.”

    He/she did -effectively 80 odd years ago

  • Mr Brightside

    You’d think the South behaved like some sort of tin pot banana republic from the pessimism of some.

    At least they invested in infrastructure, building a motorway network that puts us in the North to shame and the first phases of a Dublin underground. Their universities, TCD and UCD especially, are among the best in the world and unlike many other EU states, they have a favourbale demographic.

    The boom times may not return with vigour but the foundations are there for a very stable and prosperous future.

    One interesting consequence of it all though is that through SF’s abject failure to understand the concerns of the Southern voter or FF’s plee to abstain from shopping in the North, a united Ireland is as far away as it ever was.

  • Dave

    A bigger problem than post-nationalism is post-realism. This holds that everything is a state of mind, and that reality can be altered by altering one’s state of mind. A lot of the peace processing crap in NI plays on this mindset, whereby instead of attempting the difficult task of removing the border (and gaining sovereignty over another state), you say that border is only in peoples’ minds, and that it can therefore be removed by changing one’s mindset to remove it. That’s easier than altering reality, I suppose. I think John Hume won a Nobel Prize for a variation of that shite. So there is no reality, but rather there is only perception which is either a prism of pessimism or optimism. In regard to NI, that leads to the crap you mentioned about the EU changing people’s minds and thereby changing reality to make sovereignty irrelevant (until, of course, they recognise they are no longer sovereign and must reassert the right to same all over again) or other variations of it such as some bizarre belief that Chaos and Complexity theories apply to politics such that the border will simply remove itself if folks take no action to remove it because that is the inevitable outcome of some type of emergent phenomena. Still, it’s a tad hard to be optimistic when you paid half a million for a shoebox that is worth a quarter of that and when you recognise that the ECB will increase interest rates irrespective of your optimistic state of mind, making it a tad hard for you to pay the mortgage when you’ve lost your job or taken a pay cut. These would be the optimistic muppets who thought that it was a fab idea to no longer have sovereignty over this area, and who are encouraged to stay optimistic when the events that the pessimistic folks who told them that reality exists independently of their perception of it have come to pass. I guess if you want to trade your economy for a credit card, you should try to develop a state of mind that doesn’t allow you to max it out. And that’s all that Ireland had since it joined the eurozone: a credit card that is now maxed out. That rising tide that lifted all boats (or just ones in the Leinster area to listen to the rural whingers) was a tide of credit that must all flow back out to sea from whence it came, letting the elevated boats crash where they will. Then, of course, there is always Keynesian muppetry to add more debt to the mix to be repaid by future generations, so we can always be optimistic about being able to dump our debts on the next generation since that is a reality that actually benefits us but whether or not that next generations remains optimistic about it remains to be seen.

  • Comrade Stalin

    Jason

    i assure you that, back in the old days, they were concerned with productive investment and technological development.

    The trouble with technology is that it puts people out of work. Socialists and trade unionists have, in the past, resisted it because of that reason.

    Mr Brightside, well said. Ireland did piss quite a lot of its wealth up the wall, but a lot of good investment was done, especially in the rail network (which has been almost completely transformed), the motorway upgrades, especially Belfast-Dublin, the port tunnel, the Luas, the forthcoming Metro, the forthcoming interconnector tunnel. The National Development Plan and National Spatial Strategy were perhaps not radical enough for some, but they embraced the need to invest. Where’s our visible investment in Northern Ireland ? Pretty much the square root of fuck all over the past ten years, with the slack all being taken up by countless quangos and jobs for the boys.

  • Jason Walsh

    Response to some points raised, in no particularly order:

    Henry94, indeed emigration is back. Why is the political class so insistent that either Nama or an equivalent (FG’s “good bank”, Labour’s “nationalisation”) are necessary? I don’t mean the self-serving reasons (clearly they have a lot to lose). If AIB and BoI had collapsed what would have happened? Foreign banks would have taken their place. Would the likes of you or I notice the difference? I doubt it.

    Fabianus, surely if we accept the primacy of politics it’s my job to persuade you to join a united Ireland – and yours to persuade me to prefer union with Britain?

    Economics aren’t everything, but I will say this: as I wrote above, Ireland went from 65 per cent of Britain’s per capita GNP to 140 per cent. What is it at now? 130 per cent? 120 per cent at worst?

    Sammy, I’d like to return to the question of the media in detail later (soon), assuming I can do so without shooting my paycheque in the foot.

    Ireland’s trade union movement is as much a part of the political elite as the government and opposition parties and Ibec are. The social partnership project resembles nothing so much as (Italian-style) corporatism. Now that the government is openly attempting to lower the living standards of many union members (public sector workers) social partnership has fallen apart. The question is, do unions still know how to fight for their members? And even if they do, what strategy will the use? Will they come up with workable plans? Is there no such thing?

    Three links on Irish unions, one short article, one blog and a response from a reader:

    Article: http://forth.ie/index.php/content/article/two_cheeks_of_the_same_arse/
    Blog: http://forth.ie/index.php/content/article/an_apology/
    Letter to the editor: http://forth.ie/index.php/content/article/one_big_onion/

    That said, there is clearly a lot of anger among ordinary working people in Ireland, both union and non-union. It is possible to see the occupations of Waterford Crystal, Thomas Cook and the DIY store in Cork (and Visteon in Belfast) as rejections of the TU bureaucracy with workers taking matters into their own hands. Of course, as reactions to closures and force layoffs they don’t offer a specific alternative, but they are interesting nonetheless.

    Aquifier, “We are now driving on tyres with slow punctures, but we may get away with it if we keep checking them. Ireland has the beginnings of a great economy, and the infrastructure for a grand one.”

    Indeed – and that is literally what I’ve been doing in my car for some months now. I hope the metaphor follows through because although it’s a pain, but it is possible.

    On your earlier point, no question that improved energy savings in residential construction, including retrofitting, would be good for everyone. I don’t accept the Green Party line that this, renewable energy and the Ponzi scheme that is carbon trading will save the economy, though.

    Mr Brightside,

    I’m not sure that Sinn Féin is as disconnected from voters as people think. Perhaps the leadership is (and perhaps that is indeed a consequence of being focussed on the North, though any demands for a Southern leadership ignore the fact that the current leadership is the first successful one since either DeValera or the Workers’ Party – depending on how you choose to calculate these things). In Dublin at least, Sinn Féin activists are very, er, active. The problem seems to me to be a disconnection between the middle-class ex-SDLP vote in the North and the resolutely working class vote in the South, something that is exacerbated by Sinn Féin’s being in government in the North.

    Dave‘s point about post-realism is one of the things I’ve been wittering on about for some time now and I hope to return to the theme here.

  • Comrade Stalin

    If AIB and BoI had collapsed what would have happened? Foreign banks would have taken their place. Would the likes of you or I notice the difference? I doubt it.

    What about people with deposits/savings ?

  • Jason Walsh

    Comrade Stalin A number of things, possibly:

    – Any banks that bought AIB and BoI’s debt sheets could have been forced to also honour the savings etc.

    – Weren’t they supposedly guaranteed by the state since 2008 anyway?

  • Henry94

    If AIB and BoI had collapsed what would have happened? Foreign banks would have taken their place. Would the likes of you or I notice the difference? I doubt it.

    I agree Jason. Indeed the knowledge that they would not be allowed fail made them act accordingly.

    Comrade Stalin

    It is fair for a government to guarantee deposits up to a certain level. But after that we should be on our own. I don’t trust the current guarantee anyway. I have moved my small few bob out of the Irish system. NAMA is a bet that property prices in Ireland will rise again. My view is they will fall.

    Fabianus

    I’m afraid the bottom line for Unionists like myself is that the last place we’d like to be part of (Albania not being on offer) is the Republic of Ireland. I honestly don’t know why Shinners and other Republicans imagine that sentient beings like myself could ever be cajoled into bidding adieu to the very satisfactory UK and choosing to embrace the Paddy Republic.

    The issue for unionists may be thousands of southerners coming to the same conclusion and moving north. That would not surprise me at all.

  • Drumlins Rock

    Jason it would be good to see a balance sheet for Ireland, UK, iceland and say Holland for comparison, I can sorta get my head around the UK situation and how things got close to bust but Gordon Saved the World at the last minute we are made to believe, and baring unknown unkowns things have just about turned, at least he has the power to control things and can look back on lessons from the past.
    Ireland I havnt worked out yet has the problem been got under control, or is everyone holding their breaths till NAMA kicks in, I’m guessing that once the banks dump their bad debt they are prime for takeovers from overseas? as are quite a few other household names?
    Ireland did alot of work to improve big physical infastucture in the boom years, but public administration seems to be long overdue an overhaul, I dont think Ireland will sink to Albania levels, but I could well slip to below the UK and Germany and France, it wont be alone there Spain is in a very similar boat, there will be tension in the Euro family before 2010 is over I predict.
    Finally as you mentioned nationalists and republicans used to gloat that NI would be much better off in the booming celtic tiger, you cant blame unionists for a bit of a gloat when things have turned, just hope both realise either view is short sighted.

  • greagoir o frainclin

    “The issue for unionists may be thousands of southerners coming to the same conclusion and moving north.”

    So there is a great possibility then of a passive ‘colonization’ of NI by the southern Irish. BTW, I know a chap who married a girl from Omagh, built their house there and are now rearing a family. The Irish folk shopping up north, while welcomed by NI business people is basically a foot in the door for them.

  • Itwas SammyMcNally whatdoneit

    Jason,

    re. the Trade Unions – they were understandably kept happy by above-inflation and above-competitor pay rises – much of which will have to be reversed as we simply cant afford it.

    But my main issue is with the cosy consensus and lack of debate amongst the amongst the 3 main political parties FF/FG/Labour and their aversion for rocking the economic boat and a media which seemed to simply sit back and enjoy the increase in advertising revenue rather than getting on with a bit of critical ananlyis.

    I look forward to your article on the media and you will no doubt inform us whether you, unlike so many others, realised the big light at the end of the tunnel was not in fact perpetual economic prosperity but something big and nasty and dangerous coming straight for us.

  • aquifer

    Ireland is succeeding for a number of reasons. Great families and schooling, an embrace of enterprise, hard work, and new technologies, low corporation taxes, more rational infrastructure investment, the English language, membership of the Euro, a lack of administrative corruption and an absence of economic dogma in politics. An ideal place for ideas intensive American firms in Europe, and maybe others, transport costs permitting.

    The inflow of investment into housing development was a bad idea in retrospect, and has lumbered us with too much debt.

    Eddie Hobb’s inflation will not take care of all of it though. Doommongering has its uses. It prompts us to ask what would we or anyone else want to pay inflated sums for.

    What are the must haves? We should grow or make those, whether they be foodstuffs, energy, smart technologies, pharmacuticals, tokens of status for the global elite, or safe and clean urban environments for those who must stay here and work late.

    Having people walking the streets in yellow coats picking up litter may and reporting breakages and harassment may not be glamourous, but inward investors and mobile specialists may demand it.

  • aquifer

    Oh, and the state should just take over boarded up property and sell it. Just a couple of those in a town and call it loserville.

    And if immigrants pay cash it is their cash and energy we need.

    Our absence of domestic rates should not be a license to blow out our prospects of recovery.

  • greagoir o frainclin

    ……and we also have to thank today the absence of guilt ladened Catholic life should success appear…it marred many a conscience in the past.

  • Fabianus

    Jason

    “Economics aren’t everything”

    They are for many of us. All my southern Irish friends go north to have their teeth done and they buy their booze in Newry. Try telling my northern friends it would make more sense to live in Dublin or as part of the RoI. They’ll laugh in your face.

  • Mack

    Fabanius –

    Ask them to compare wages north and south, and for most people taxes (over 40% of southern workers pay no tax), and that, should just about clinch it.

    Even after this recession has ended our GNI per capita will be over 20% higher than the EU average, it will be significantly higher than the UK average and a lot higher than the NI

  • Fabianus

    Dublin is absurdly expensive, no question. It doesn’t necessarily make more sense to live in Belfast, though, as wages are higher here. It depends on any number of variable factors.

    Anyway, economics are almost everything for me too. I’m just saying that they’re not always the sole, or even primary, motivating factor in people’s politics. All manner of things, both logical and illogical, are involved, otherwise we could easily predict the outcome of any election.

    That said, polling prior to the 1979 UK general election predicted a Labour win. Attitude surveys, however, based on consumption aspirations predicted a Tory win. We all know what the result was.

    As an aside, the dentist thing is fascinating. They’re actively scouting for work down here now. Dentists in East/Central-European countries are too.

  • Mack

    Fabianus –

    http://www.brightwater.ie/documents/SalarySurRevised09.pdf

    HR Director – Dublin €80 – 140k, NI £50 – 68k

    Almost double.

    Commercial Law, Salaried Partner – €100 – 190k, NI £45 – 70k

    More than double.

    Senior Engineer – Dublin €55 – 70k, NI – £35 – 45k

    Substantially higher

    Database Admin – Dublin €35 – 70k, NI £25 – 35k

    —-
    Public sector –

    Average Public sector salary – ROI
    €50600.68k
    http://www.cso.ie/releasespublications/documents/earnings/current/psempearn.pdf

    Average Public sector salary – NI
    £28558.4
    http://www.dfpni.gov.uk/2009-10_pay_and_workforce_technical_annex.pdf

    —-
    Benefits

    Dole – ROI

    €205 per week

    NI –

    £60

    http://www.belfasttelegraph.co.uk/news/local-national/northern-ireland-dole-tourists-fleecing-the-republics-welfare-system-14166164.html

    More than enough reason to live on the southern side of the border..

  • Fabianus

    Mack

    “Dole – ROI

    €205 per week”

    Wow, where do I sign? 🙂

  • Dave

    “More than enough reason to live on the southern side of the border..”

    Public sector wages might be something to consider as a reason to live in Ireland if the state didn’t have a gap of circa 58% between revenue and expenditure and if the inability to deflate the currency didn’t make wage cuts in the private sector a necessary reality. Try looking at the figures again in 5 years when they half that level and when jobs aren’t available.

  • Mack

    Dave –

    There’s no doubt that wage gap will narrow somewhat. It’s wide as it is today, because Sterling has collapsed. By allowing Sterling to depreciate the UK has protected jobs (protected the outsiders who otherwise would have lost jobs) at the expense of the insiders (the real wage levels of those with safe jobs).

    In Ireland our Euro membership has done the reverse.

    The mainstream economic position in this country is that of the ‘real devaluationists’. Ireland’s cost competitiveness has depreciated by around 30% since 2000. Funnily enough our export growth stalled around then too, and we know that most of the actual growth in the economy since then was due to a credit bubble. The trick now is to reduce “state fees, charges and rates, business costs, prices and [real] wages” (per Marc Coleman) in that order in order to restore Ireland’s competitiveness to the position it once held. The effect of doing so will allow Ireland’s indigenous industries to compete internationally once again. The vast bulk of our exports our made by foreign multi-nationals. Again per Marc Coleman & Garret Fitzgerald – you can be high productivity and high wage, but that does not describe Ireland’s indigenous industries. In order to enable them to scale and grow jobs, Ireland needs to restore their ability to compete.