I am convinced that Ireland is in Serious trouble

KomradeBishop

dxhound2005 wrote: »

That link I posted starts in 1980, I didn't cherry pick it. It comprehensively debunks your argument that 10% or higher unemployment is abnormal in that 35 years. You are saying that you have figures from earlier years I think? Put them up and I will be happy to be proved wrong if that is what they show.

You're shifting the goalposts - you said that Ireland has never had less than 10% unemployment outside of the last two decades (a claim which is ignorant of the long term historical stats) - you are now shifting the goalposts to 'the last 35 years' to suit your argument.

Here are figures which go back to the 1960's - P9:
http://www.upf.edu/facecon/_pdf/blanchard.pdf

It should be obvious to anyone who knows their economic history, that all of our higher unemployment periods resulted from economic crisis or the aftermath of economic crisis.

geosynchronous orbit

KomradeBishop wrote: »

....

It should be obvious to anyone who knows their economic history, that all of our higher unemployment periods resulted from economic crisis or the aftermath of economic crisis.

The low unemployment rates of the 1960's and early 1970's were the result of an unprecedented wave of emigration in the 1950's where Ireland lost an entire generation. Ireland stood with East Germany as the only countries in Europe who's population declined.

So equally, the figures you choose to include in your thesis are the result of the aftermath of economic crisis.

Anyone who knows their economic history does not dwell on a single statistic to frame a discussion.

www ucc ie/en/emigre/history/

Cant post links

jimgoose

jank wrote: »

Yes, because Northern Ireland is like India by culture and geographical differences. If people are not willing to work for that extra 40 euro a day extra then that means the dole is too high.

I disagree. I think it means the cost of simply being alive, standing there breathing and scratching your arse, in this jurisdiction in criminal. :pac:

andrew

KomradeBishop wrote: »

None of the other points are all that convincing.

Why?

goat2

hfallada wrote: »

Young people are the most educated generation Ireland has ever seen. If they have gone to ucd or Trinity to study business or science for 4 years. Why would they go home to the village they came from in the west where they can't get a well paid job that relates to their degree? You can't expect a village to have a well paid jobs for every one related to their degree.

Also a lot of young people want to live in cities. Why live in a small minded kip in the Midlands. When you can do whatever you like in Dublin or London without people judging you. People like the anonymity that cities offer

and we the parents put everything on hold to help fund their education, our generation worked very hard to help in this way, and now we ourselves are still scraping due to the fall of the economy, it feels unfair that we are not getting some bit of ease, now that we have some time for ourselves, it would be nice to just have a holiday of a lifetime and celebrate a job well done, but we have less in our pocket and that is just a dream

KomradeBishop

andrew wrote: »

KomradeBishop wrote:

None of the other points are all that convincing

Why?

You took my sentence out of context there - I gave a brief explanation (instead of a point by point one), in the remainder of that sentence.

KomradeBishop wrote:

None of the other points are all that convincing, seeing as a success (avoiding deflation) for QE, will be very hard to achieve as subsequent efforts at QE have diminishing returns (which is how the previous US based QE programs went down); more QE doesn't mean you're going to successfully avoid deflation in the long term. Deflation, once set in, also begets more deflation.

To replace that with a point-by-point explanation:
a: I'd judge succeeding as hitting inflation targets (2%), and failing as failing to avoid deflation in the medium/long run.

b: QE is known to have diminishing returns - in Europe's case, I doubt that it's a sustainable way to successfully avoid deflation by repeat application.

c: Inflation expectations have to rebound to real economic conditions eventually, and trying to devalue our way out of this mess is just going to cause 'currency wars' where we provoke other countries into engaging in competitive devaluation; that's not sustainable.

d/e: It is exactly because the EU is a major trading partner, that will cause EU deflation to drag Ireland into deflation.

f: I fully agree here, and I view this as the only real solution for avoiding deflation, and for economic recovery in general. However, given the level of political dysfunction in Europe (particularly with Germany), and the EU's track record since the crisis began, I think it is wishful thinking to expect any kind of agreement like this - much in the same way as Syriza was engaging in wishful thinking, in its recent negotiations.

g: Virtually all institutions putting out economic forecasts, have been majorly wrong and have shown an extreme optimism bias, since the crisis began.
I do know what many of these forecasters do not appear to: The models they use for making forecasts, frequently use linear/equilibrium-based neoclassical models - which do not represent how economies actually work - and they should be using dynamic/disequilibrium based models, which are a more accurate representation of how economies actually work, and they should discard all of the macroeconomically-discredited neoclassical theories built into their models.

If economic forecasters (or well, economists in general) were held to any standard of professional honour, for making false predictions, then practically all of them would be out of a job.

KomradeBishop

KomradeBishop wrote: »

Europe has been heading towards core deflation for a long time - changing the inflation stat picked, doesn't really suggest deflation can be avoided.

What's your problem with deflation? Deflation is only a problem where it enlarges the interest rate and where it has a causal effect on low demand and where it diminishes asset prices. Which of these do we have in Ireland or the Eurozone? None!

We all know how well Ireland is doing as the fastest-growing Eurozone economy. Spain, as another nice example, has been growing at the fastest rate in seven years, Germany has had to increase its growth estimates, and grew last year at the fastest rate in three years, higher than expectated.

Yes, the Eurozone is growing and there is no indication that Eurozone consumption has been postponed.

So what exactly is the problem here?

Everyone is panicking and saying we must do QE... why must we?

We're looking down the wrong hole. There is no deflation problem. There is sluggish growth.

QE will not tackle sluggish growth. It just won't. I'll bet you anything it won't.

KomradeBishop

A Tyrant Named Miltiades! wrote: »

What's your problem with deflation? Deflation is only a problem where it enlarges the interest rate and where it has a causal effect on low demand and where it diminishes asset prices. Which of these do we have in Ireland or the Eurozone? None!

We all know how well Ireland is doing as the fastest-growing Eurozone economy. Spain, as another nice example, has been growing at the fastest rate in seven years, Germany has had to increase its growth estimates, and grew last year at the fastest rate in three years, higher than expectated.

Yes, the Eurozone is growing and there is no indication that Eurozone consumption has been postponed.

So what exactly is the problem here?

Everyone is panicking and saying we must do QE... why must we?

We're looking down the wrong hole. There is no deflation problem. There is sluggish growth.

QE will not tackle sluggish growth. It just won't. I'll bet you anything it won't.

Virtually all economists have a big problem with deflation - it's viewed as such a majorly bad situation for an economy to be in, that you have the ECB engaging in QE just to try and avoid it.

Letting deflation set in in Europe, would make deflation self-perpetuating, and would grind-down all EU economies over time.

geosynchronous orbit

KomradeBishop wrote: »

Virtually all economists have a big problem with deflation - it's viewed as such a majorly bad situation for an economy to be in, that you have the ECB engaging in QE just to try and avoid it.

Letting deflation set in in Europe, would make deflation self-perpetuating, and would grind-down all EU economies over time.

Economists do.

Savers don't.
Fixed income recipients don't.
People without borrowings don't.

What's bad for the goose is not necessarily bad for the gander on a micro level.
Short term in any rate

Pinch Flat

http://www.wsj.com/articles/germany-sells-five-year-debt-at-negative-yield-for-first-time-on-record-1424871074

Edit - needs subscription for full article

KomradeBishop

geosynchronous orbit wrote: »

Economists do.

Savers don't.
Fixed income recipients don't.
People without borrowings don't.

What's bad for the goose is not necessarily bad for the gander on a micro level.
Short term in any rate

The EU trying to weather deflation, without doing anything about it, will almost certainly drive political/economic instability that leads to the breakup of the Euro - and the decimation of your savings when they are returned to a massively-devalued Punt.

Short term thinking indeed.

bb1234567

RobertKK wrote: »

Agree about real poverty. In the past I knew a person from Malawi, pen pals before internet. Incredibly poor, he thought I was very rich being from Ireland, and reality is yes compared to his circumstances.
I would send him stuff he asked for, he would send pictures of his country cut off from papers or magazines.

So much opportunity in Ireland compared to where absolute poverty exists.

but we still probably complain about being poor x10000 times more than them

geosynchronous orbit

KomradeBishop wrote: »

The EU trying to weather deflation, without doing anything about it, will almost certainly drive political/economic instability that leads to the breakup of the Euro - and the decimation of your savings when they are returned to a massively-devalued Punt.

Short term thinking indeed.

Hedge accordingly.

KingBrian2

KomradeBishop wrote: »

The EU trying to weather deflation, without doing anything about it, will almost certainly drive political/economic instability that leads to the breakup of the Euro - and the decimation of your savings when they are returned to a massively-devalued Punt.

Short term thinking indeed.

I thought we had put the punt behind us.

Zen 2nd

After reading all 39 pages of this thread (I should really find better ways to spend my Friday night ) I have come to a few conclusions:

The EU is currently using QE to tackle deflation. This much seems to be true, right? Why else would they be using it? It's what I've read anyway.

If QE fails to prevent deflation, I don't think we'd be absolutely FUBAR though it wouldn't exactly be rainbows and lollipops either, but hopefully it would spur the EU into taking immediate and effective action. I would imagine they wouldn't sit idly by twiddling their thumbs (ha! I hope!). Essentially anything to stop the Euro from failing.

Yes, in Ireland unemployment has dropped but it needs to continue on that trend.

Yes, it seems certain sectors of employment are fairing better than others.

Cities are always more robust than rural towns.

KomradeBishop

Zen 2nd wrote: »

If QE fails to prevent deflation, I don't think we'd be absolutely FUBAR though it wouldn't exactly be rainbows and lollipops either, but hopefully it would spur the EU into taking immediate and effective action. I would imagine they wouldn't sit idly by twiddling their thumbs (ha! I hope!). Essentially anything to stop the Euro from failing.

I'd hope so, but I'm not optimistic on that front - especially not after what happened with Greece's negotiations.

I think people should be prepared for the real and ugly possibility, of the 'unthinkable' happening - the Euro breaking up, and collapsing several EU economies in the process; it's a very real possibility, which I hope is avoided.

Amalgam

A feature playing on RTE Radio 1 as I type, should be available on the RTE Countrywide Radio page in a day or two. Negativity countered by local efforts to stabilise the issues at hand.

RTE Radio 1
CountryWide Saturday 28 February 2015
RURAL DECLINE OR RURAL WHINE?

http://www.rte.ie/radio1/countrywide/

---

The decision by Bus Eireann to drop and change some of its rural routes prompted the outcry this week from various groups and individuals describing the decision as another blow to rural Ireland. Is the demise of rural Ireland overblown? Eugene McGee, Longford native, GAA commentator and highly respected journalist gave Damien his not entirely negative outlook. And to confirm his view Louise Denvir showed how one community is fighting back. In small village of Kilbride in County Roscommon locals are doing it for themselves.

JamBur

Streetwalker wrote: »

Nice try at lumping everyone into the same basket. I'm 100% anti water charges but pay all my other taxes, I work full time and also a part time job and guess what I think eirigi are a pack of gobsh1tes. Doesn't suit your agenda that though

I don't have an agenda, I just stumbled across the thread. I do see a lot of overlap between the afore mentioned groupings. Just an observation on my part. We, the majority who don't have an issue, are as entitled to our views as the loud shouting minority.

KomradeBishop

KomradeBishop wrote: »

Virtually all economists have a big problem with deflation

You have to apply some critical thinking to determine when 'deflation' is a problem, and when it isn't.

For example, the ECB has been counting the fall in oil prices as deflation. Madness! The fall in oil and commodities contributes to demand. And demand has been continuing to rise, and the Eurozone is growing faster than expected.

As well as this, long-term interest rates are adequately low, relative to the growth rate of every eurozone member, with the possible exception of Italy. In some people's eyes, that's the real measure of deflation.

So what's the problem here?

We have to get away from this idea that inflation with a negative sign in front of it is a bad thing, 'just because'.

In exactly what circumstances is it bad, and which of those circumstances are we displaying?

KomradeBishop

The price of oil has been falling in part due to a drop in demand:
http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/11160831/World-oil-demand-slashed-by-top-energy-agency-as-price-fall-continues.html

Europe's 'core inflation' - which excludes food and energy - has been heading for deflation for years and is just about there (QE will arrest this, but only temporarily):
http://www.tradingeconomics.com/euro-area/core-inflation-rate

Your argument that deflation is not a problem, completely lacks any credibility, as the vast vast majority of economists regard it as a bad thing, so the burden of proof is on you there.

Have you actually gone out and tried to read what economists say about deflation? What do you know about the negative effects of deflation on an economy?

I really wish people would actually read up on these things and be realistic about them, instead of reflexively trying to put a positive spin on economic conditions; the latter is just harmful/destructive, and is the kind of thinking that led us into the crash in 2007/8.

KomradeBishop

KomradeBishop wrote: »

Your argument that deflation is not a problem, completely lacks any credibility, as the vast vast majority of economists regard it as a bad thing, so the burden of proof is on you there.

I don't care what the vast majority of economists say if their argument doesn't have a practical application. As it happens, plenty of people disagree with this narrative. (Not anyone in the Irish media, obviously, because they never disagree with anything) I don't know how good your French is

http://cib.natixis.com/flushdoc.aspx?id=81294

Have you actually gone out and tried to read what economists say about deflation?

Seriously?

I've given you plenty of rationale, do you want to counter them or not?

Mr. teddywinkles

Idbatterim wrote: »

possibly increase the minimum wage and reduce employers PRSI on low income workers, paid for by not increasing welfare rates. We need more jobs and with the cost of living in Dublin particularly so high, I think it is time the minimum wage was reviewed, maybe put an extra 40-50c an hour onto it...

We need more jobs and we need the lower level jobs to compensate fairly and make working more worthwhile...

Maybe locate these jobs outside the pale so living costs like rent are lower.

Ben D Bus

KomradeBishop wrote: »

Your argument that deflation is not a problem, completely lacks any credibility, as the vast vast majority of economists regard it as a bad thing

I'm not arguing for or against your point, but how can you use the opinion of economists to back up your view when you've previously trashed their opinions based on how they are taught? Or did I misunderstand (or I'm mixing you up with someone else)?

Mr. teddywinkles

RecordStraight wrote: »

You know that the rate of repossession in the UK is TEN TIMES higher than here PER CAPITA, and they didn't even have a crash?

Do you not think these properties in arrears were worth what they were bought for at the original price or more that the banks wouldn't have people out in the street 10 mins flat selling that asset.

RecordStraight

Mr. teddywinkles wrote: »

Do you not think these properties in arrears were worth what they were bought for at the original price or more that the banks wouldn't have people out in the street 10 mins flat selling that asset.

I doubt it, seeing as they are under huge political pressure not to repossess, plus there are armies of goons waiting to protest at any repossession, and the courts are doing their best to drag their feet on every single one, giving people months and even years to get out of the houses they don't own and are living for free in while other suckers rent in dumps.

DarkyHughes

yipeeeee wrote: »

But we are.

All other countries in Europe must like ****.

Just a little Samba

Ben D Bus wrote: »

I'm not arguing for or against your point, but how can you use the opinion of economists to back up your view when you've previously trashed their opinions based on how they are taught? Or did I misunderstand (or I'm mixing you up with someone else)?

Your arguement fails because pretty much all economists agree with KB's position, regardless of their schools of thought.

It's like how there are different schools of thought on climatology but every credible scientist in the field will agree we've f*cked the planet over and it's getting worse, they disagree with a lot of stuff, but not everything.

Father Ted Crilly

The rural towns are usually invaded by "undesirables". There are better names to call them but they aren't politically correct.
Anyway, I hate towns/cities of any size. I prefer nice quiet country roads. Especially ones with no other houses in sight.

KomradeBishop

A Tyrant Named Miltiades! wrote: »

I don't care what the vast majority of economists say if their argument doesn't have a practical application. As it happens, plenty of people disagree with this narrative. (Not anyone in the Irish media, obviously, because they never disagree with anything) I don't know how good your French is

http://cib.natixis.com/flushdoc.aspx?id=81294


Seriously?

I've given you plenty of rationale, do you want to counter them or not?

Eh...if economists near-universally say deflation is a bad thing that harms economies, then yes, their views have a practical application.

The author of that report is an idiot, with a well established history of claiming "everything's grand" just before everything turned to crap - and making either deliberately misleading, or hilariously mistaken basic stats errors:

March 22, 2007, Patrick Artus wrote a note "Flash Markets" [5] published by Natixis where he explains why there is no need to fear a future financial crisis:

"Financial markets believe anything. Successive corrections in equity markets in February-March 2007 is related to a series of market fears [...] there may be a recession in the United States; [...] The mortgage crisis "subprime" [...] the US will trigger a banking and financial crisis. Now all these claims are false. Credulity and lack of composure in the financial markets are remarkable. »

This thesis is taken May 24, 2007 in an editorial published in the magazine Challenges :

"The potential is huge in European stock markets. [...] In a world economy that can work with the United States in low growth and inflation seems defeated, it is possible to believe that the only CAC 40 , for example, to reach 7,000 points in the first half of 2008 [ 6] . »

His predictions are contradicted, however, by the global financial crisis starting in 2007

He believes in a new note in May 2008 as the financial crisis is "finished" [7] , and that "can be considered the worst of the financial crisis that began in the summer of 2007 is behind us: bank provisioning is enough confidence returns on most financial markets, banks are consolidating their balance sheets. " [8] This is again contradicted by numerous bankruptcies and bank rescues in September 2008, particularly Fannie Mae , Freddie Mac , Lehman Brothers , Merrill Lynch and AIG

...

Some analysts accuse him of making gross errors in its analysis, in order to push the austerity policies [20] .

In September 2013 , attempting to show that the countries with the highest public spending are the countries with the lowest growth, described in a document that Sweden is a bad example. For this it uses a graph Sweden noted SD (fastest growing) and Switzerland SW (weaker growth) and explained in the document as Sweden, noted SW to lower growth. Or, Sweden and Finland, which have the highest growth that year, also are those who make the most of public expenditure [21] .

In another document, also known as "Flash economy", he tries this time to make a correlation between higher minimum wage and rising unemployment figures among young people. It will base its decision on an erroneous figure for Australia, which has the highest minimum wage countries such as the ratio of youth unemployment and unemployment in the general population is 4.2, cloud against an oscillating between 1.5 and 3 for all the other countries mentioned [22] . However, based on figures from the OECD in the youth unemployment rate (15-24) [23] the ratio was 2.1 this year, placing Australia in half of the countries with the lowest ratio unemployment among young and whole working population [24] . Australia is also also one of the countries with the lowest youth unemployment rate at 11.3% unemployment in 2012, against a set ranging from 7.7% to 46.4% and an average of 16 2% [23] , but also the active population, 5.4% against an average of 8.2% and a swing set between 3.3 and 25.2% [25] .

https://fr.wikipedia.org/wiki/Patrick_Artus

I've already countered your weak narrative in my previous post.

KomradeBishop

Ben D Bus wrote: »

I'm not arguing for or against your point, but how can you use the opinion of economists to back up your view when you've previously trashed their opinions based on how they are taught? Or did I misunderstand (or I'm mixing you up with someone else)?

I did say that, yes - even the economists who successfully predicted (and even modelled) the economic crisis before it happened, and who are leading the reform of economic curricula, and who have the most coherent theories of economic crisis and best solutions to it - they also take the position, that deflation is bad.

It's one of the things that the good economists, and the vast majority of the terrible economists, agree upon: Deflation is Very. Very. Bad., and the history of the Great Depression provides plenty of proof of this.