Yanks singing Ireland's praises

snow scorpion

The European Model That Works
By Jay Reding

The Brussels Journal has a very interesting and detailed look at the failures of the European social welfare mode:

Why is Europe performing so poorly? Europe’s deficient performance is incompatible with its huge potential as the world’s largest single consumer market. Its slow growth contradicts its unequalled industrial productivity and infrastructure, its outstanding education level and labour ethics, its favourable climate, “fair business” morality, and not in the least its tremendous potential provided by the opening of the iron curtain. Obviously Europe’s fairy-tale is not materializing. Nor are the inflated expectations prognosticated by Europe’s political elite at the launch of the Common Currency and the Lisbon Agenda.

The reality of Europe’s ailing economy contrasts sharply with its economic potential and with the massive resources employed to cure its ailing growth. The whole arsenal of Keynesian remedies has now been tried and has failed one by one. Massive deficit spending throughout the eighties and nineties has left Europe with a public debt unequalled in history. The size of Europe’s monumental public debt is only surpassed by the hidden liabilities accumulated in Europe’s shortsighted pay-as-you-go public pension schemes.

The fact remains that what’s happening in Europe right now could very well happen here – in fact, it will unless we start working towards changing our current course. Europe made a very conscious decision to try to create a state based off of certain utopian principles – that economic goods such as health care and housing were “rights” and that the best way to promote a healthy society was to have a more “fair” tax system. Years of massive social welfare spending, confiscatory taxation, and Keynesian economics have failed to produce economic growth or significant prosperity. In fact, with Europe’s unemployment rates in the double digits and their total labor underutilization even double that, it’s quite clear that trying to emulate a European model is trying to emulate failure.

At the same time, one European country does provide a model for how to grow an economy in the 21st Century. Ireland went from being 22nd in the OECD prosperity index to being fourth. The Irish economy has grown at an annualized rate of 5.6% for the past 20 years. Granted, that sort of growth isn’t sustainable over the long term, but in a generation Ireland went from being under conditions that resembled the Third World to being one of the most dynamic countries in the EU.

What did Ireland do? They were the first in Europe to truly embrace globalization. Irish leaders realized that high protective tariffs were stunting economic growth and preventing foreign investment. The Irish government engaged in a policy of free trade, slashed taxes across the board, and worked to attract foreign investment. Ireland also has the benefit of having a large diaspora in the United States - one quarter of US FDI to Europe is invested in Ireland.

Ireland has the exact opposite set of problems as the rest of Europe - Ireland’s population is rising rather than falling, and immigration is still strong. The economic boom has meant that prices on everything from real estate to pints of Guinness have increased dramatically. The Irish economic boom has left government coffers flush with cash - which encourages the kind of spending that isn’t sustainable as the Irish economy completes its transition. Yet for all those problems, it’s far better to have to deal with a rising population and high growth than the opposite.

Ireland’s flat tax structure and pro-growth policies have done better at providing an increased quality of life than the European social model has - and because of Ireland’s economic growth they’re better able to build infrastructure and invest in education, continuing that trend of growth. Policymakers on both sides of the Atlantic need to understand that the quasi-socialist welfare state model doesn’t work. If you want solid economic growth and a better life for your citizens, you must embrace free trade, low taxes, and foreign investment. Ireland’s victory and Europe’s decline are living proof of what it takes to destroy and economy and what it takes to develop one. The question is which model this country will embrace over the next few years and which future we have in store for ourselves.

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Calina

You're not mentioning anything about the infrastructure development which came from Europe which enabled much of this prosperity, are they. And they've omitted the little detail that the largest exporter in the world bar none is Germany and that the issue isn't so much the figures as a lack of consumer confidence. Or that the policies that they are nicely deriding served Germany well for more than twenty years, and continue to serve Scandinavia well. Or that despite all the power of conservatives in the US, the US national debt is spiralling miles out of control and at some stage it will have to be paid for.

Or that despite being apparently hugely wealthy, Ireland is wasting shocking amounts of money on things which don't work like e-voting systems and health salary payment systems.

bonkey

Europe made a very conscious decision to try to create a state based off of certain utopian principles – that economic goods such as health care and housing were “rights” and that the best way to promote a healthy society was to have a more “fair” tax system. Years of massive social welfare spending, confiscatory taxation, and Keynesian economics have failed to produce economic growth or significant prosperity.


Umm...can someone correct me if I'm missing something here:

- In Ireland, health care is seen as a right
- In Ireland, housing is seen as a right
- In Ireland, we don't consider our tax-system grossly "unfair" (hey - if they can use unqualified descriptions in quotes, so can I).
- In Ireland we have had, and continue to have, years of massive social welfare spending
- In Ireland, one of the precursors which drove our country to its Celtic Tiger position was massively confiscatory taxation, and this only eased after we had started in on the good times.

As for the "first to embrace globalisation" commentary....that also striked me as a somewhat disingenuous argument. One of the conditions of joining the EEC/EC/EU was that member-nations would not engage in "price-war" tactics against each other to attract (non-member) foreign investment. Ireland - as a developing nation at the time (comparatively speaking) - was granted an exemption from this, meaning it was given an artificially-created competitive advantage over its European peers in order to foster foreign investment.

To be honest...without knowing the slightest thing about economics, the following comment would still tip me off as to the level of intellectual honesty in teh report:

Ireland’s flat tax structure and pro-growth policies have done better at providing an increased quality of life than the European social model has

Why not compare like with like? Why not our social model against theirs, or our economic model against theirs? Why is it our economic model against their social model?

Could it possibly be that we wish to attack the European social model, and cannot do so if we have to admit that some of hte features we are decrying as contributors to the problem are also present in the model we are championing?

The whole thing reads like yet another "you'd all be much better off if you ran your country the American way" commentary to me. After all, the US budget deficit is far healthier....right?

Snickers Man

Actually, it's Belgians singing Ireland's praises.

zuma

bonkey wrote:

Europe made a very conscious decision to try to create a state based off of certain utopian principles – that economic goods such as health care and housing were “rights” and that the best way to promote a healthy society was to have a more “fair” tax system. Years of massive social welfare spending, confiscatory taxation, and Keynesian economics have failed to produce economic growth or significant prosperity.


Umm...can someone correct me if I'm missing something here:

- In Ireland, health care is seen as a right
- In Ireland, housing is seen as a right
- In Ireland, we don't consider our tax-system grossly "unfair" (hey - if they can use unqualified descriptions in quotes, so can I).
- In Ireland we have had, and continue to have, years of massive social welfare spending
- In Ireland, one of the precursors which drove our country to its Celtic Tiger position was massively confiscatory taxation, and this only eased after we had started in on the good times.

As for the "first to embrace globalisation" commentary....that also striked me as a somewhat disingenuous argument. One of the conditions of joining the EEC/EC/EU was that member-nations would not engage in "price-war" tactics against each other to attract (non-member) foreign investment. Ireland - as a developing nation at the time (comparatively speaking) - was granted an exemption from this, meaning it was given an artificially-created competitive advantage over its European peers in order to foster foreign investment.

To be honest...without knowing the slightest thing about economics, the following comment would still tip me off as to the level of intellectual honesty in teh report:

Ireland’s flat tax structure and pro-growth policies have done better at providing an increased quality of life than the European social model has

Why not compare like with like? Why not our social model against theirs, or our economic model against theirs? Why is it our economic model against their social model?

Could it possibly be that we wish to attack the European social model, and cannot do so if we have to admit that some of hte features we are decrying as contributors to the problem are also present in the model we are championing?

The whole thing reads like yet another "you'd all be much better off if you ran your country the American way" commentary to me. After all, the US budget deficit is far healthier....right?

I pretty much agree with almost everything you say.

You must remember where the article originated from as well and also that its comparable to treason to question the US economic model.

bonkey

Snickers Man wrote:

Actually, it's Belgians singing Ireland's praises.

Yes and no.

The two paragraphs the OP quoted are from the Belgians. Everything else below those two paragraphs is from RightWingNews - an American, Conservative website (which I refuse to call a news site).

If you read the original article in the Brussels Journal, you'll note some siognificant differences to the commentary offered by the author of the RightWingNews piece.

For example, the BJ (ahem) author attributes the significant differences almost solely to a differing tax system. The author also clearly explains what is meant by a fair tax system - something the RWN author both glosses over and decides is worthy of quotations (as if to imply that "fair" might not really mean fair).

Brussels did somewhat sign Ireland's praises....but more along the lines of acknowledging that sustained >5% growth rates are possible because Ireland achieved it over the last 20 years. Out "flat and fair" tax system (which is relatively new...but there you go) is listed as one significant factor of this.

In other words....Brussels wasn't really singing our praises, but rather showing how Ireland appears to have taken a better track in some areas over the European norm. This has been taken by RWN and spun into some attack on all sorts of social ideals - whether they be mentioned in the original article or not - and Ireland is being used as the stick to beat the mainland down with....ignoring whether or not we have the same social ideals in the process.

In short, the final (RWN) piece bumps us to front-and-center and sings our praises as the shining light for Europe. The original piece does no such thing. Indeed - it even acknowledges that our >5% growth rate is not sustainable:

The Irish economy has grown at an annualized rate of 5.6% for the past 20 years. Granted, that sort of growth isn’t sustainable over the long term

Why the difference? Well....because the RWN piece is - as I said - a "Europe should be more like America" piece and should be taken as nothing more.

jc

bonkey

<footnote>
You may notice the logical inconsistency in the original article as well...which comes across in my post above...

If the BJ author recognises that Ireland's 5.6% rate is not sustainable....why is he holding Ireland's approach up as proof that Europe can achieve and sustain growth-rates in excess of 5%????

samb

bonkey wrote:

If you read the original article in the Brussels Journal, you'll note some siognificant differences to the commentary offered by the author of the RightWingNews piece.

For example, the BJ (ahem) author attributes the significant differences almost solely to a differing tax system. The author also clearly explains what is meant by a fair tax system - something the RWN author both glosses over and decides is worthy of quotations (as if to imply that "fair" might not really mean fair).

Well analyzed bonkey, it is an incredibly biased and selective article. It picks Ireland without looking at all the individual factors that contributed to the 5%+ growth rates, and income tax imo is certainly not significant. What about;
Investment in education over many years.
Huge growth in workforce due to woman starting to work
50 billion from Germany and Britian (predominently)
English language (espeically when Britian and US doing well)
Started from such low base (5% was not a huge growth early on)

and probably many more....not considered in this simplistic article.

To be counter selective...
They don't look at the scandinavian countries who use the 'european social model', aren't they doing well?
What european country's economy is stagnant right now, Berlesconi's.

Well....because the RWN piece is - as I said - a "Europe should be more like America" piece and should be taken as nothing more

Well said,

p.s snow scorpian, I don't think that is the best website for balanced political reporting or commentary....look what it's called.

meepins

horse**** propaganda article

dathi1

50 billion from Germany and Britian (predominently)

Just as a matter of interest where does this figure come from?

samb

dathi1 wrote:

Just as a matter of interest where does this figure come from?

Sorry don't have a link or anything. I read it in the Irish Times a few weeks ago. It's obvously only an approximate figure also. I'd like to know if its accurate also.

Anyone? How much money have we recieved from Europe? Is this figure of approximately 50 Billion correct?

clonycavanman

Well said, Bonkey, I like the suspicion with which you regard apparent praise, well done. That was a cracker; that Ireland was exceptionally permitted to attract inward investment from other EU countries. Surely important factors in the celtic tiger were also; universal free education ( very social model) and at last, after some hundreds of years , Ireland was in a trading environment where the rules were stable and not changed to it's disadvantage the moment the economy became competitive.