Was there ever really a Celtic Tiger

Bob Z

Mods if this is in thee wrong place could it be moved

This is more of a question than a point but was there actually a celtic tiger? Or was it just inflated by Grants from the EU?

If we had managed the economy earlier could it handle better so that we wouldnt be doing too bad now? or was it awlways going to go this way?

murphaph

Bob Z wrote: »

Mods if this is in thee wrong place could it be moved

This is more of a question than a point but was there actually a celtic tiger? Or was it just inflated by Grants from the EU?

If we had managed the economy earlier could it handle better so that we wouldnt be doing too bad now? or was it awlways going to go this way?

There was a real Celtic Tiger from the late 80's/early 90's which lasted roughly 10 years. It began with a devaluation of the Punt coupled to the opening of the IFSC.

Ireland was a very competitive place with inexpensive labour (compared to other EU states) and a reasonably well educated workforce.

We began losing wage restraint towards the end of the 90's (I distinctly remember getting payrise and payrise) and this was ultimately our downfall. The government then began heavily incentivising construction through a myriad of reliefs. This provided alternative work for those losing their jobs in manufacturing during the decade and provided a "cover" for the deteriorating position which was really quite obvious to me (and I'm no economist, it was clear to see though!).

So could it have been avoided? Absolutely. A more intelligent electorate would have recognised the loss in manufacturing jobs being covered by a massive increase in construction related ones. The electorate would have then pressured the govt to introduce cooling measures to the economy (removal of tax breaks, minimum ratios for mortgage lending etc.) but the electorate did the exact opposit: the re-elected the populist FF party again and again and again.

It could have been totally different. The only issue now is have we learned a damn thing from our mistakes...

Denerick

Yes, we had two economic booms. The first was the classic model based on wage restraint, productivity, and international competitiveness. The second was based on the now notorious 'money illusion' - the delusion that if you keep getting payrises of 5% a year your standard of living will be 5% a year better off. Not so. Most of the higher wages went straight into a heavily inflated property market. An over-reliance on a property bubble couple with exponential increases in government spending (built on the back of temporary increases in revenues such as Stamp Duty, capital gains, as well as higher returns on income tax) characterised our second, and far more unsustainable economic boom.

travelguru

I don't believe there was.
According to wikipedia , historically tigers are known to exist throughout the south and east Asia.

Once again, we have been fooled.

Daniel S

travelguru wrote: »

I don't believe there was.
According to wikipedia , historically tigers are known to exist throughout the south and east Asia.

Once again, we have been fooled.

I'll vote for you if you go for election, you spot the things most don't see :P

galwayrush

It was the great Celtic Overdraft.:rolleyes:

nesf

The first half of the Celtic Tiger was "real". It was mostly due to a "demographic dividend", i.e. we grew mainly due to an increase in working population due to the children of the late 70s and early 80s coming of age and joining the workforce, as well as people migrating back to the country. It was also a time of catch up, we got most of the productivity improvements done in the 80s and early 90s and we were poised to reap the benefit of this.


Will we see another period like this? Most likely not. 3% growth on average is a good target for the future for us once we get out of this recession.

charlemont

galwayrush wrote: »

It was the great Celtic Overdraft.:rolleyes:

I agree with that..

blinding

No twas only my old stripey moggy.

He is a woeful cat for the airs and graces though.

I think some feckers were egging him on though. And sure he was only messing.

Its not my moggys fault. Mind you he does appear to be having a laugh on that rather expensive settee as I fight his corner here !

sarkozy

Yep, the 'Celtic Tiger' is said to have existed between 1985 (around the time of the emergency budget and major policy changes) and 2001 (when exports consistently dipped below imports). I haven't any more to add that hasn't been said.

What is IMO worth mentioning is the name's allusion to the 'Asian Tigers'. That, somehow, Ireland followed a similar path. It's interesting that some Irish Academics have since the mid-2000s been arguing that a very different model to the Asian Tigers was pursued by the Irish government. The Community Platform paper, A Better Ireland is Possible, explains how this was so (pages 6-10 and beyond).

In college, I remember feeling strongly that our growth in the mid-2000s was a fiction. That Ireland was then a semi-peripheral, semi-dependent political economy, which meant that we would be incredibly vulnerable to a global systemic crisis, particularly as we were becoming more service-based - a conveyor belt between two worlds, not just a transatlantic conveyor. The less we invested ourselves in social protection, and the more we became reliant on speculative forms of (debt-based) income, the farther we would fall. The National Economic and Social Forum (a government-sponsored think-tank answering to the Office of the Taoiseach), and relying on findings of development economists like Dani Rodrik, made this case in one of its earlier documents.

Well, now look at where we are. And in years to come, we'll be all annoyed with ourselves at how much profit the investment banks made off our debt like they have since the Rothschilds and Morgans kicked off this whole bond racket.

galwayrush wrote:

It was the great Celtic Overdraft.

I like this.

sirromo

Yes Virginia, there is a Celtic Tiger

If you don't believe me, read this article appearing on the BBC News site.

As for the current state of the economy - the majority not constituted by the property market - exports rose by 7.8% in August, manufacturing output was up 12% in September, unemployment fell for the second month in a row in October and tax revenues overshot expectations in the same month.

And, unlike Greece, Portugal and Spain, Ireland is heading for healthy balance of payments surpluses in coming years.

And did I mention that US investment in Ireland exceeds US investment in Brazil, Russia, India and China put together?

But they convey an image of Ireland totally at odds with the reality of a country that last week was voted by the UN human development index as the world's 5th most desirable place to live.

The UK was - sorry to point this out - 26th. Our GDP per capita remains 30% above the EU average and well above Scotland, Wales

Never mind what the doom-mongers say. There's life in the old boy yet.

PeterIanStaker

murphaph wrote: »

It could have been totally different. The only issue now is have we learned a damn thing from our mistakes...

I dont think people will learn, and also the media will play a huge part in downplaying and whitewashing things so that in 10 years time, or even less, there'll be another bubble. Its all about doing people out of their money, over and over again.

I hope I'm wrong.

sarkozy

sirromo wrote: »

Yes Virginia, there is a Celtic Tiger

If you don't believe me, read this article appearing on the BBC News site.





Never mind what the doom-mongers say. There's life in the old boy yet.

Dan O'Brien wrote about export growth in the IT a few months ago. Then he retracted his optimism because the trends changed again. A blip isn't a recovery; export growth is still too volatile. The other issue is, of those exports, how much income remains in the country. I agree though, we have the capacity to recover, but it'll take time. We're talking about structural change here. We also need political change, but I'm not so optimistic about that. And that affects how structures change.