What Should Ireland Seek To Excel In?

donegalfella wrote: »

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I hope that when you mention removing burdensome regulation you don't mean banking regulation.
Otherwise you just sound like seanie fitz and charlie mcgreevey. :rolleyes:
And we know where they have gotten us.

If anything the lax regulation in Ireland and places like the US has got us in the sh** we are in.
And coming out and saying the old argument, ala Alan Greenspan, that it was assumed that banks would should fiscal caution in order for self preservation has been shown to be very hollow indeed.
As has been shown around the world banks sadly are not like other businesses you can let fail because they have huge knock on affects on the greater economy.

IMHO government should plan for the economic direction of a country.
By that I mean they can facilitate growth of certain industries by targetting grants, tax policy and educational resources.
I don't mean they actually set up companies and create the jobs themselves nor decide to balloon the public sector ala bertie.

Even very successful countries like Singapore (with similar population not size ok) have recently AFAIK started backing certain industrial sectors as a way of seeing themselves out of this recession.

Amhran Nua wrote: »

Sorry, didn't the Titanic roll out of the Harland & Wolff shipyards in Belfast? Smart comments about what happened to that aside, looking at the short history of the state to decide what we are going to be doing in future is an exercise in futility.

You do realise that South Korea was effectively a third world country only a few decades ago.

H&W were setup hundreds of years ago when this country was part of the British Empire with the largest navy in the world.
Bit of a difference don't you think.

Yes I know what an economic miracle was created in South Korea, with thanks to Japan and US for investment.
But the big difference between South Korea and us is that they all pulled together, had cheaper labour forces, highly educated workforces and strict military dictator led governments with policies that enabled growth of
large diverse industry (heavey industries down to microelectronics) global multinational chaebols.
I don't think we would ever be capable of doing that.

donegalfella wrote: »

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Jeeze you think the American health system is something to aspire to ? :rolleyes:
It is such a great a system that millions cannot avail of treatment.
Sweet if you rich or have access to good healthcare plan, but otherwise tough sh** ehh.

We could make a big book listing off all the government cock ups.

And we could then claim the artists tax exemption on the profits made....

ei.sdraob wrote: »

donegalfella and others are right

Ireland would excel in whatever makes sense and profit to excel in

all the government has to do is not get involved!


notice how all my suggestions earlier in this thread are about relaxing laws or removing stupid artificial barriers to doing business (by anyone who is not connected to FF)

So who's going to do it, and provide the capital investment etc. if the government don't get involved?

This is going to be a big 'un

@imme

books are good for sure. Are there many books published annually on the Irish economy that deal specifically with barriers to economic development, either created by the state or otherwise.

Id like to see a book written by the likes of O'Leary on his views, but Id imagine he is too busy as it stands. He has talked about a change of guard at Ryanair so perhaps he will be freed up. However, his would only be one perspective

I'm unsure that bankruptcy is a barrier to entrepreneurship.

I believe research shows humans are more preoccupied with loss than gain on some psychological or even genetic level. I.E. they require more than a 50-50 chance of success vs. defeat. Given the cost of failure in business is bankruptcy where you cannot hold a bank account, get a loan, are marked as a bad debtor in public records and generally held as some sort of quasi criminal for about 10 years, people are going to weigh that more heavily against the prospect of success before they quit the day job and try to make a go of that idea they had sitting in the back of their heads. If Ireland was to look at bankruptcy law which is postively Dickensian in spirit, then it might encourage more entrepreneurs to have a go.

On a similar line, if a small bussinessman falls on hard times he is not eligable to unemployment benefit on anything like the basis of say a shelf packer down at Tescos ( not sneering, Ive packed my fair share of shelves). Again, given the pre-occupation with loss, worst case scenarios this discourages entrepreneurship. And let face it, any business is going to have to pay tax of some sort. Theres an implicit incentive to be an employee, and not to take the risk of being an employer in that arrangement.

That said, I am not trying to paint Ireland as some Stalinist state - it does have some postive aspects, as I noted already its apparently a very cheap place to settle your business tax. Which is great. But lets not assume job done. The government needs to focus on this aspect of encouraging Irish entrepreneurship. Not through grants, but through taking the same "Can do" attitude they apply for FDI, where theres not much sacred they wont sacrifice if it means Intel will open a new line in Ireland.

Theres a lot of talk about stimulus packages...the cheapest, and probably most effective stimulus package we can do is to shake up our approach to business and incentives to taking the risk of starting up a business in Ireland.

(2) How do you see this manifested? Back to 'what are the barriers?'

Probably simplest and quickest to cite an example I raised in an earlier thread: Bertie met the likes of Begg and O'Connor through an official mechanism called Social Partnership, giving trade unions utterly hostile to innovation and market practise a voice in the running of the economy. This wasnt considered strange.

At the same time, the most successful bussinessman and entrepreneur in Ireland, O'Leary, met Bertie perhaps twice by his recollection and neither meeting rose above polite greetings. This is not considered strange either. And mention of O'Leary in official circles is often followed by people looking fearfully over their shoulders and making the sign of the cross.

Its also worth noting that Begg is a member of the Central Bank board. O'Leary is not. Look at who is on the inside, and who is outside. Bureacrats, party loyalists, the risk adverse, the "green jersey" brigade.

The construction industry is a funny example to pick as an industry that was 'favoured' by the state. Who were they competing against.

The rest of the Irish economy? A tax incentive is just that. It tries to incentivise a particular activity. Its no mystery that we have a massive oversupply of empty hotel rooms - Irish tax policy incentivised building empty hotels. The rational choice in a situation where tax laws made building hotels especially profitbable when tax was considered was to build hotels. This is the impact of the foolhardy belief that the state can somehow perform magic tricks.

And this wasnt costless. All the money poured into building those hotels...wasted. All the brickies who didnt bother training up....wasted. All the young people who saw the wages offered in the construction related sectors and trained up as property focused lawyers and quantity surveyors and so on...wasted. All utterly wasted because the government used tax policy in an unwise and foolish fashion by attempting to pick a winner. The rationality of markets is overstressed, but the biggest irrational actor in any market is the state: others simply adjust to the irrationality which becomes the new rational.

We are going to see the same thing with this so called "smart" economy and "green" economy where the state desperately tries to pick a winner. It makes me despair to be honest. We have governments trying to run cornershops, putting shop owners out of work and neglecting their own duties in the meantime.

So NAMA shouldn't go ahead? What implications would this have for the banking sector.

Again, this is fairly broad. I dont have a crystal ball so I cant predict the future. However, I dont accept the "Mad Max" scenario proposed by the reluctant supporters of NAMA who argue NAMA is terrible but the alternative is some post-apocalyptic landscape where civillisation has broken down and Ireland is inhabited by gangs of mutants who practise cannibalism and inbreeding. All the time wailing "If only we hadnt let AIB and BoI fail...if only we hadnt listened to those maniacs!"

Let me put it like this: NAMA is not going to work. We are in a scenario where unemployment has risen massively, where we are facing tax increases, where public sector workers are facing a long program of pay cuts (hate to break it to ya lads, but with a 25 billion deficit, the 2010 budget was only the start) then the income profile of the average mortgage holder is going to decrease. Meanwhile, interest rates at the ECB can only rise. Falling income, rising expenditure = falling into arrears, defaults. There is an unspoken assumption out there that Irish people dont default ( based on the Dickensian bankruptcy laws where bankrupts are sub humans in Irish society) but Ireland has never faced this sort of epic negative equity, debt and mass unemployment. Just because it didnt happen before doesnt ensure it wont happen now.

Morgan Kellys recent paper makes it clear that even modest losses on residential mortgages will again imperil AIB and BoI. In a scenario where sovereigns are assumed to step in but are themselves considered to be in danger of default ( the UK apparently is running a deficit of 178 billion per year, and the extent of their austerity programme is that they will reduce the deficit to 100 billion or less by 2014...) its hard to see where Ireland ( shipping 25 billion a year, not counting recapitalisation costs - 11 billion so far, to double in 2010 at the very least - plus the epic losses on NAMA, plus the rising costs of all this debt) is going to find the fiscal resources for NAMA 2.0

Given that its not a question of if NAMA will work or not. It wont. We are throwing good money after bad. Given the inevitability of BoI and AIB meeting their makers, we shouldnt waste money on a futile effort to prop them up. We need to be looking at trying to manage their orderly rationalisation - forcing their stakeholders to accept their losses, whilst protecting the small depositors and keeping the staff/branch network intact under new ownership and management.

Not to mention that NAMAs efforts to prop up the commerical property market (intentional or otherwise) are in direct opposition to the efforts to reclaim Irish competiveness. As is the policy that AIB and BoI cannot, ever, ever, ever, ever be allowed to fail apparently forced the Dutch backers of ACC bank to accept they could not compete fairly in Ireland and they should instead simply cut their losses and exit. Again, we are picking champions...in this case AIB and BoI at the expense of the taxpayer.

@Amhran Nua

Which is dogmatic libertarianism.

My view of the citizen-state relationship (citizen>state where-ever is possible and reasonable) is pretty moderate I would have thought. You condemn that view as being dogmatic libertarianism in what I assume is supposed to be a disapproving, negative fashion. I find it hard to conceive of a view that considers such a balance of power in negative terms is anything other than dogmatically statist, where the state always knows best...assuming you are the state of course.

I have to give you credit Amhran Nua, whilst I like to laugh at the near weekly "Lets start a new political party - Heres my crazed quasi nationalist socialist manifesto" posts in the Politics forum, you at least have the quality of longevity. Whatever about the quasi nationalist reaching with the name in a language no one speaks but apparently everyone wishes they could. But if your root philosophy somehow sees the state as the generous benefactor of the righteous citizen, as opposed to the servant of citizens then I am quite glad your power and influence extends only to casting a vote, posting on boards.ie and maintaining a web site.

Speaking as a citizen who prefers to see the state serving my interests, rather than as a grateful slave competeing for the favour of the state.

Adam Smith also postulated free markets where all participants have perfect knowledge,

I dont doubt your claims, Id only point to Adam Smiths more famous postulation of the "invisible hand" which directly references participants without perfect knowledge.

his free market meanderings are a little out of date.

If only - the state is probably a bigger factor in markets now than it ever was in his day.

See police forces, health care, street lights, garbage collections, water and roads for examples of macro projects that worked.

This comment was made in a line of responses to the concept of tax incentivisation. If you think law enforcement and natural monopolies can be achieved efficiently though tax incentives you are more of a dogmatic libertarian than I am.

So all risk analysis is gambling? A somehwat jaded point of view, but you're entitled to it.

Trying to pick a winner and then championing it by trying to make the irrational rational is not risk analysis.

As for taxation being a blunt instrument, its sharp enought to have kept the Irish economy afloat for years with its corporation rates.

I was waiting for someone to try make that "point". A low corporation tax rate is an even playing field for all corporations. A high corporation tax rate is an even playing field for all corporations. Which ever are the most profitable, wealth generating corporations will thrive in relative terms under either regime in *relation* to the other participants.

This is different to then also adding incentives on top of that low/high corporate tax rate to particular corporations which are not available to other corporations. This is where bureacrats try to decide which industry is going to being the wealth generator for years to come...and this is why we have an oversupply of empty hotels in this country. Given the current chit chat we are going to have an oversupply of unused windmills and other castles in the sky...

By ignoring the effects of state incentives and legislation you ignore the only real tool there is to direct the national economy, which is, I think anyone would agree, folly.

LOL - I am not ignoring the effect of state incentives. I am well aware of the ill effects of such incentives. What makes me laugh is that you are oblivious to the effect of such incentives despite championing their power to achive great things. I dont doubt they can achieve...things... I just sincerly doubt those things are somehow universally good and great but I think our difference on that that comes back to your own belief that the state is somehow guided by philosopher kings that are always more correct than their grateful serfs toiling in the fields to fund their great works, or that it ought to be. You're hoping to guide the future of this state, right?

I remember a wise man recognising that wisdom was recognising that you didnt know everything. Funnily enough, free market economics is based on the same basic philosophy.

Its flailing about without a direction that has landed us in the situation we are in.

Nope, it is being certain of our direction and not entertaining any naysayer that has landed us in the situation we are in. Like I said, its not only those who believe utterly in the rationality of all markets that need to learn from the past decade.

When the socialists are calling you too right wing and the libertarians are calling you too socialist, you know you're doing something right.

Im a dogmatic libertatarian by your interpretation - given I have already noted I dont consider libertarianism efficiently workable ( vs. a properly run liberal democracy) Id be willing to consider that people you describe as socialists believe there ought to be some sort of safety net for citizens. Incidentially, that would describe me as a socialist....and a dogmatic libertarian simultaneously...I feel special, maybe I ought to go lie down now.

Maybe if socialists and libertarians are disagreeing with you, you are just wrong? It cant be discounted as a possibility. I mean, christ, shipbuilding? Castles in the sky.

@HashSling

We are surrounded by water, its fairly windy to me it just seems wasted!

Hmm, again we cant discount the possibility that the water around Ireland is not wasted, its just that theres no real profit to be made in vast quantities dirty salt water. I dont rule out the possibility you can turn a profit out of it, and Ill happily argue if you can turn a profit out of it, fair play to you. But Id rather you risk your own money it, rather than my tax money which I give to the state on the basis of services returned, not as some sort of venture capital fund.

I'm sure over the next decade wave and wind generators will become more efficient

Right, well go buy their shares with your own money, not mine. Cheers.

@Donegalfella

for some reason feudalism seems to escape critique

Perhaps becuase feudalism best describes the state-citizen relationship for socialists?

ei.sdraob wrote: »

they can talk all they want its only that, talk

all politicians like making grand promises that dont materialize


lets take an example of Renewable Energy

if government wants Ireland to be a leader in this, then they can build a topclass infrastructure such as DC supergrid offshore (being called on by Airtricity) and more interconnectors
they can also help train engineers to build and mantain any equipment and infrastructure

i hope your see where im going with this

their job is to provide a fertile facility and like others said then stay out of the way

i will have to quote Reagan here



while i dont like Reagan, he was onto something there...

No you misundertand....

If you dont want the government to do it.. then who exactly is going to put up the seed funding for any industry we want to build on?

@Welease

no VC with half a brain will spend billions to move shipbuilding to Ireland at the current cost base.. simple fact..

Luckily we have a government with less than half a brain willing to spend billions to move shipbuilding to Ireland at the current prohibitive costbase...:rolleyes:

Seriously, do you lads hear yourselves? The economic philosophies here could double up as stand up routines. At the very least the signatures ought to be "Ba-Dum-Tish!"

Thats kinda the point.. I want to hear those who want to do it without government intervention explain how they move ANY industry here.... irrespective of the stupidity of doing so.

Uh the point is that if people with at the very least half a brain dont see a return for shipbuiling in Ireland, perhaps then theyre right? Perhaps the defintion of stupid is doing what those with half a brain dont see as offering a return? In the immortal words of Wesley Snipes, some mother****ers are always trying to skate uphill.

I am happy to be proven wrong, but Id rather those utterly convinced of the absolute certainty of the great future of Irish shipbuilding either found their own company, or buy the shares of whatever prophet does so.

With their own money. Not my tax euros which I gave to my government, not some misguided venture capital fund. I will make my own investment decisions, thanks.

I agree 100% but you quoted me like i said i think shipbuilding is a good idea.. I didnt

My point is to those who advocate 0% government involvement in their schemes.. where are they getting the investment from?....

And I asked how and why someone would fund the movement from other countries to here.. doesnt make sense to me (or you either it sounds)...

Welease, it soiunds to me like youre trying to say (badly?) if there was no government investment no business or industry could start up.

Investment and enterprise precedes the state. It certainly precedes the modern Irish state.

TBH, the idea that we ought to be looking for some sort of government investment to fund the transfer of industry to Ireland from abroad is actually a symptom of the underlying problem I alluded to when I cited the example of primitives clearing runways to encourage the great iron bird to land. Govt policy is so focused on encouraging this alien, foreign, strange concept of entrepreneurship and private enterprise to land here, like some sort of quasi pacific cargo cult, that it doesnt even bother to consider why they dont encourage their own entrepreneurs.

The ideals of foreign entrepreneurs are so alien that no one ever stops and says...why wont venture capitalists support our crazed shipbuilding castles in the sky. Instead its just assumed, right, they dont see a realistic return, but we really, really, really, really want shipbuilding in Ireland.

The reason VCs invest is because they see a good possibility of a return on *their* money. Theyre not interested in dreams and castles in the sky. Only returns. Thats why they are venture capitalists. Overpromoted county councillors and publicans who cant run a bar in Ireland are interested in castles in the sky. Thats why we are bankrupt.

That VCs arent interested in a project without incentives ought to turn all the governments dashboard flashing red. That it doesnt implies our government are idiots.