Boom bust economy?

Sunny Disposition · 31-08-2019 8:16am #1

Around where I live in the west of Ireland things are flying, no doubt, loads of work, people can hardly find a house to rent, place is doing great. Spoke to someone in Dublin last night who said he can’t even get trainees for quite prestigious, very well paid roles, said it’s the same in many sectors, lot of labour shortage.
Think it’s fair to say we are right back to a Celtic Tiger style boom, this one seems to have crept up, four years ago it was totally different.
Of course it’s great we have recovered, but why are things so hit and miss? Why are we always the fastest growing or the worst in Europe? A period of stability would probably be very good for us in the next five years, with growth, but a little less dramatic.

Ferajacka · 31-08-2019 8:18am

Brexit

wally1990 · 31-08-2019 8:20am

Sunny Disposition wrote: »

Around where I live in the west of Ireland things are flying, no doubt, loads of work, people can hardly find a house to rent, place is doing great. Spoke to someone in Dublin last night who said he can’t even get trainees for quite prestigious, very well paid roles, said it’s the same in many sectors, lot of labour shortage.
Think it’s fair to say we are right back to a Celtic Tiger style boom, this one seems to have crept up, four years ago it was totally different.
Of course it’s great we have recovered, but why are things so hit and miss? Why are we always the fastest growing or the worst in Europe? A period of stability would probably be very good for us in the next five years, with growth, but a little less dramatic.

Just an FYI, if your somewhat interested in economics or these related convos,

David mcwilliams has a great podcast and talks about economics in layman's terms

Its a great listen, give it a go

Pinch Flat · 31-08-2019 8:23am

We’re a small open economy that’s totally exposed to external shocks, brexit will be the next big one. Things go pear shaped here fast but recover reasonably quickly. I work in construction so have seen a few booms and busts at this stage.

Sunny Disposition · 31-08-2019 8:32am

Involved in that side of things too, no doubt our economy largely tracks the global one, but it often gets more extreme. I think part of it is the governments who always want expansionary policies, good times or bad. Wonder is there a quirk to us too, for some reason are the Irish a bit more excitable than other countries, do we barren down the hatches very quick if we smell trouble and spend like drunken sailors at other times. Would have spent many years in the UK and there is definitely more of an impulse to spend among many Irish people, more of a we-won’t-live-forever attitude. Not criticizing that at all btw, it’s a good approach to things.

Silentcorner · 31-08-2019 8:34am

We are a have a very open economy full of international companies, but we have a very parochial system of electing politicians and a government (Civil Servants) that is highly centralised system that is completely inflexible...it's why we can't achieve meaningful regional growth in my opinion making all of us depend on Dublin....it is not healthy.

If ever the global economy goes tit's up, we are in serious trouble.

PhilOssophy · 31-08-2019 8:58am

Paddy loves boom and bust, politicians would rather give the pensioners and dole wasters a fiver a week than pay down some of our national debt or save money for times when our economy needs a cash boost.
But Paddy wouldn't have it any other way.

Montage of Feck · 31-08-2019 9:02am

A rising tide lifts all boats and all that, except Ireland is more like the rubber dingy caught in the bow wave of a tanker.

SEPT 23 1989 · 31-08-2019 9:11am

The recession started months ago

El_Duderino 09 · 31-08-2019 9:12am

wally1990 wrote: »

Just an FYI, if your somewhat interested in economics or these related convos,

David mcwilliams has a great podcast and talks about economics in layman's terms

Its a great listen, give it a go

Loving the podcast. Very glad someone suggested it. There was an interesting point when he chatted about the factors that lead to the last recession and how they’re being replicated now. And the other just, John, said “so we haven’t learned our lesson from the last recession”. Who on earth said we are trying to learn a lesson?

The op will tell you they made their money in the last period of great growth, so they’re sorted. And they’re proposing the other people should t try to make their fortune now during a period of growth.

OP, why didn’t you take that approach of staying steady and not growing your business before you made your money in the last boom or the boom before that? You didn’t have to grow your business, so why did you?

This boils down to “ now I’ve made my money, I think other people should stop trying to make their money”

Unthinking stuff.

Mad_maxx · 31-08-2019 9:37am

Sunny Disposition wrote: »

Around where I live in the west of Ireland things are flying, no doubt, loads of work, people can hardly find a house to rent, place is doing great. Spoke to someone in Dublin last night who said he can’t even get trainees for quite prestigious, very well paid roles, said it’s the same in many sectors, lot of labour shortage.
Think it’s fair to say we are right back to a Celtic Tiger style boom, this one seems to have crept up, four years ago it was totally different.
Of course it’s great we have recovered, but why are things so hit and miss? Why are we always the fastest growing or the worst in Europe? A period of stability would probably be very good for us in the next five years, with growth, but a little less dramatic.

We are an extremely open economy, if other major economies hit the rocks, it effects us in a big way, we also have a tiny domestic consumer market so cannot trade our way out of rough periods through our internal market

Slightly off topic but not Unrelated, Ireland is effectively a colony of the usa economically, Europe never really left the recession of 2008 to 2012, it's been teetering on recession ever since, the usa on the other hand has seen its longest ever period of expansion.

Rufeo · 31-08-2019 10:01am

Sunny Disposition wrote: »

Around where I live in the west of Ireland things are flying, no doubt, loads of work, people can hardly find a house to rent, place is doing great. Spoke to someone in Dublin last night who said he can’t even get trainees for quite prestigious, very well paid roles, said it’s the same in many sectors, lot of labour shortage.
Think it’s fair to say we are right back to a Celtic Tiger style boom, this one seems to have crept up, four years ago it was totally different.
Of course it’s great we have recovered, but why are things so hit and miss? Why are we always the fastest growing or the worst in Europe? A period of stability would probably be very good for us in the next five years, with growth, but a little less dramatic.

It's cos of greed.

Sunny Disposition · 31-08-2019 10:02am

El_Duderino 09 wrote: »

Loving the podcast. Very glad someone suggested it. There was an interesting point when he chatted about the factors that lead to the last recession and how they’re being replicated now. And the other just, John, said “so we haven’t learned our lesson from the last recession”. Who on earth said we are trying to learn a lesson?

The op will tell you they made their money in the last period of great growth, so they’re sorted. And they’re proposing the other people should t try to make their fortune now during a period of growth.

OP, why didn’t you take that approach of staying steady and not growing your business before you made your money in the last boom or the boom before that? You didn’t have to grow your business, so why did you?

This boils down to “ now I’ve made my money, I think other people should stop trying to make their money”

Unthinking stuff.

Of course I’d wish anyone going into business now good luck. The fact is in my experience dramatic economic swings makes long term success harder. It’s not all about business people either, workers hired for jobs created under boom time conditions see their jobs evaporate later.
Most of the growth in my own business actually was quite gradual, apart from a burst in my 20s when I got a few breaks. Even as that was happening I knew it would soon be time to get out of it, but for various reasons very few people can do that.

El_Duderino 09 · 31-08-2019 1:00pm

Sunny Disposition wrote: »

Of course I’d wish anyone going into business now good luck. The fact is in my experience dramatic economic swings makes long term success harder. It’s not all about business people either, workers hired for jobs created under boom time conditions see their jobs evaporate later.
Most of the growth in my own business actually was quite gradual, apart from a burst in my 20s when I got a few breaks. Even as that was happening I knew it would soon be time to get out of it, but for various reasons very few people can do that.

But why did you grow your business at all? That’s the question you’re asking everyone else but you could answer it yourself. Why didn’t you find a level of annual business where you could live and stop taking on additional business beyond that level?

Fr_Dougal · 31-08-2019 1:03pm

SEPT 23 1989 wrote: »

The recession started months ago

Do you have anything to back that up?

godtabh · 31-08-2019 1:03pm

Sunny Disposition wrote: »

Around where I live in the west of Ireland things are flying, no doubt, loads of work, people can hardly find a house to rent, place is doing great. Spoke to someone in Dublin last night who said he can’t even get trainees for quite prestigious, very well paid roles, said it’s the same in many sectors, lot of labour shortage.
Think it’s fair to say we are right back to a Celtic Tiger style boom, this one seems to have crept up, four years ago it was totally different.
Of course it’s great we have recovered, but why are things so hit and miss? Why are we always the fastest growing or the worst in Europe? A period of stability would probably be very good for us in the next five years, with growth, but a little less dramatic.

Explains it well

https://www.youtube.com/watch?v=d0nERTFo-Sk

Sunny Disposition · 31-08-2019 2:07pm

El_Duderino 09 wrote: »

But why did you grow your business at all? That’s the question you’re asking everyone else but you could answer it yourself. Why didn’t you find a level of annual business where you could live and stop taking on additional business beyond that level?

I’m not asking anyone why they want to grow any business! People have different reasons for that.

Good luck to anyone trying is what I’d say. I would advise them not to leave themselves exposed to much risk, something that it is hard with a boom/bust situation.

Not all about business people though, what we have now is a boom and a young fella in his twenties would have to borrow a lot for a house. Do that at 25 while single in good times is okay, but it’s a problem if you end up with three kids at 35 and you’re dealing with the impact of a bust. It happened a lot of people here a few years ago, similar in the UK back in the 1980s. Unfortunately there’s a fair chance it’ll happen again here in the 2020s.

Not trying to be pessimistic, would love to see more of a demand from the public for sustainable growth.

JohnnyFlash · 31-08-2019 2:17pm

wally1990 wrote: »

Just an FYI, if your somewhat interested in economics or these related convos,

David mcwilliams has a great podcast and talks about economics in layman's terms

Its a great listen, give it a go

McWilliams is to economics what Jedward are to popular music.

L1011 · 31-08-2019 2:19pm

JohnnyFlash wrote: »

McWilliams is to economics what Jedward are to popular music.

Jedward were never right once. McWilliams was and lives off it. Was wrong a lot more often!

dotsman · 31-08-2019 2:24pm

It's because we haven't done anything to rectify the biggest problem in our economy - property.

In the late 80's early 90's Ireland began to modernise. We all know about the social and economic changes. But there was a third change. As we moved from an agricultural economy to a modern economy and as we moved from net emigration to net immigration, we forgot to do the one big glaring task - plan our cities to cope with these changes. As a result, since the 90's there has been a massive shortage of suitable properties (for both homes and offices). This has resulted in constant critical problems in our property market causing massive swings over the last 30 years.

Coupled with 30 years of government budget's and planning focused on short term "vote-buying" rather than long-term strategic planning, we are completely at the mercy of extreme market sentiment.

BorneTobyWilde · 31-08-2019 2:26pm

One thread on here

'' I applied for 50 jobs and can't get one''

Next thread on here

'' 1000's of jobs and we can't even fill the roles'''

Sunny Disposition · 31-08-2019 2:34pm

dotsman wrote: »

It's because we haven't done anything to rectify the biggest problem in our economy - property.

In the late 80's early 90's Ireland began to modernise. We all know about the social and economic changes. But there was a third change. As we moved from an agricultural economy to a modern economy and as we moved to net emigration to net immigration, we forgot to do the one big glaring task - plan our cities to cope with these changes. As a result, since the 90's there has been a massive shortage of suitable properties (for both homes and offices). This has resulted in constant critical problems in our property market causing massive swings over the last 30 years.

Coupled with 30 years of government budget's and planning focused on short term "vote-buying" rather than long-term strategic planning, we are completely at the mercy of extreme market sentiment.

There is a good bit of truth in this in my opinion. I don’t think Dublin has been planned right at all.
But it’s not just Dublin, the traffic in Galway is a huge problem, plus the villages within 30-40 miles are growing in population, but in many cases with very little strategy.

It’s a related problem to the boom bust stuff I think, in good times when recovery is happening the construction industry gets indulged too much and people making objections or who have concerns about anything get dismissed. Then people end up wondering why we are car dependent and have large populations in areas with poorly planned facilities.

If we had a history of less intense booms and less deep recessions our officials would look at things a little differently.

This is before you even take into account corrrupt planners/councilors and ignorant builders happy to grease their palms.

El_Duderino 09 · 31-08-2019 2:41pm

Sunny Disposition wrote: »

I’m not asking anyone why they want to grow any business! People have different reasons for that.

Good luck to anyone trying is what I’d say. I would advise them not to leave themselves exposed to much risk, something that it is hard with a boom/bust situation.

Not all about business people though, what we have now is a boom and a young fella in his twenties would have to borrow a lot for a house. Do that at 25 while single in good times is okay, but it’s a problem if you end up with three kids at 35 and you’re dealing with the impact of a bust. It happened a lot of people here a few years ago, similar in the UK back in the 1980s. Unfortunately there’s a fair chance it’ll happen again here in the 2020s.

Not trying to be pessimistic, would love to see more of a demand from the public for sustainable growth.

You don’t honestly know much about why booms and busts happen, do you?

Ipso · 31-08-2019 3:44pm

Boom and bust, as in constant? Isn’t it more like a giant bust from the countries inception up until the mid nineties boom and then bust?

31-08-2019 4:18pm

godtabh wrote: »

Explains it well

https://www.youtube.com/watch?v=d0nERTFo-Sk

The Stability and Growth Pact has gone a long way in preventing pro-cyclical economic policy, and although it may have been the proverbial sledge-hammer cracking a nut, is bound to insulate us from the next economic shock to a large degree. As will the reports of the Fiscal Advisory Council, which are fairly well-heeded, and the advice of the Central Bank.

Please don't take economics instruction from You Tube. It's simplistic and borderline conspiracy-theorist.

JohnnyFlash wrote: »

McWilliams is to economics what Jedward are to popular music.

One positive outcome of the successful implementation of the Financial Aid Programme for Ireland has been the complete rubbishing of the (attention seeking?) proclamations of so-called celebrity economists like Bryan Lucey, Constantin Gurdgiev, Morgan Kelly and, above all, David McWilliams. They espoused economic policies that were completely at-odds with those proposed by professional Irish and European economists, and even published books which have now been appropriately discredited.

Other recessions will come, but we must never return to the fad of annointing high priest celebrity economists.

EmmetSpiceland · 31-08-2019 4:29pm

A Tyrant Named Miltiades! wrote: »

One positive outcome of the successful implementation of the Financial Aid Programme for Ireland has been the complete rubbishing of the (attention seeking?) proclamations of so-called celebrity economists like Bryan Lucey, Constantin Gurdgiev, Morgan Kelly and, above all, David McWilliams

Don’t worry, they’ll be back. It’s hard to shift books or get the air time when things are going well.

They’ll be back on the air shilling books on “what went wrong” when things, inevitably, goes bad.

JohnnyFlash · 31-08-2019 4:32pm

I’d ignore the advice and mutterings of most economists to be honest. The most dismal of sciences.

El_Duderino 09 · 31-08-2019 4:43pm

EmmetSpiceland wrote: »

Don’t worry, they’ll be back. It’s hard to shift books or get the air time when things are going well.

They’ll be back on the air shilling books on “what went wrong” when things, inevitably, goes bad.

I think that’s harsh on McWilliams. He’s not saying the recession is here. He is saying that some of the economic indications are looking like the current boom is running out of steam.

But he hasn’t tried to predict a time and date of the next recession. I think it’s pretty important to try to understand why the economy works the way it does or why it went well or poorly.

riclad · 31-08-2019 4:48pm

We depend on exports to other countrys,
companys are finding it hard to recruit new workers.
Workers need to live some where ,
our housing policy is mediocre at best.
There may be plenty jobs in dublin but its very hard to find good quality rental accomodation.
Theres a cycle of boom and recession every 10- 15 years .
The financial crisis was caused by lack of regulation in the banking industry and we saw the slowdown in 2008.
The next crisis may be caused by trade wars ,and brexit.
All the government can do is to have good regulation in banking and
finance .
they should also start to pay off the 200 billion debt we owe.
While interest rates are very low.
Irish governments seem to think maybe 2-3 years ahead.
We need to think 10 years ahead .
We need to get on with the national broadband plan.
this will help small firms and encourage growth in rural area,s.
Instead of just having most investments focused on dublin .

To a large extent we are at the mercy of international trends
in business and finance .

Franz Von Peppercorn II · 31-08-2019 6:42pm

PhilOssophy wrote: »

Paddy loves boom and bust, politicians would rather give the pensioners and dole wasters a fiver a week than pay down some of our national debt or save money for times when our economy needs a cash boost.
But Paddy wouldn't have it any other way.

I’d ban everybody who lazily stereotypes Irish people with the term paddy. Moronic crap.

Nobody likes boom and bust, not the bust anyway and often not the boom. I’d prefer to live in an economy growing at 1-2% a year without shocks than 4% a year with occasional shocks.

Franz Von Peppercorn II · 31-08-2019 6:44pm

A Tyrant Named Miltiades! wrote: »

The Stability and Growth Pact has gone a long way in preventing pro-cyclical economic policy, and although it may have been the proverbial sledge-hammer cracking a nut, is bound to insulate us from the next economic shock to a large degree. As will the reports of the Fiscal Advisory Council, which are fairly well-heeded, and the advice of the Central Bank.

Please don't take economics instruction from You Tube. It's simplistic and borderline conspiracy-theorist.

One positive outcome of the successful implementation of the Financial Aid Programme for Ireland has been the complete rubbishing of the (attention seeking?) proclamations of so-called celebrity economists like Bryan Lucey, Constantin Gurdgiev, Morgan Kelly and, above all, David McWilliams. They espoused economic policies that were completely at-odds with those proposed by professional Irish and European economists, and even published books which have now been appropriately discredited.

Other recessions will come, but we must never return to the fad of annointing high priest celebrity economists.

I find little fault in McWilliams. He was right about the reasons for the last bust and correct in his understanding of the problem with housing now, also correct that this boom is less of a bubble and we can survive Brexit.

Boom bust economy?

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