Part of Ireland’s prosperity rests on its attractiveness as a foreign direct investment hub. Ireland’s big idea since the 1950s has been to get other people’s money here and turn that money into good jobs for Irish people. The two vehicles for the money-getting (at which we are honestly world-class) are the IDA and our multinational-friendly tax and regulation system.
It’s not a hard sell. We save companies a fortune while giving them access to one of the world’s largest markets and giving their executives a nice place to live.
Our competitor countries complain constantly that our success (which implies their failure) is because of our lax attitude to the activities of some of the multinationals located here. While this is changing rapidly, the perception remains, and our colleagues in Europe do seem somewhat bitter about it.
One of Enda Kenny’s first foreign engagements as Taoiseach saw him get stuck into French president Nicolas Sarkozy defending Ireland’s 12.5 per cent corporation tax rate. When they came, the troika wanted the totem of Irish industrial policy taken away. Kenny was having none of it.
Continue reading "Careful what you wish for in battle over FDI"
I’m writing this from Groningen, a beautiful city in the Netherlands with one of the world’s oldest universities. Groningen’s buildings still bear the scars of World War II, and it is a place where learning and culture combine easily.
The contrast between what people are saying on the ground in Groningen and what you can read in the international press is, frankly, astounding. For the international press, the Dutch elections are the latest in a line of anti-establishment dominoes started by last June’s Brexit result.
The dominoes next to fall are France and Germany, and then the European Union is toast. The international election coverage hinges on the personality of far-right hair-enthusiast Geert Wilders. It’s easy to see why Wilders is news. He is anti-migrant, anti-Islam and Eurosceptic. He is more Trump than Trump and he sells papers and gets clicks.
Wilders wants to leave the European Union, bar asylum-seekers, cease funding development aid, increase defence spending, ban the Koran and Islamic schools and, of course, decrease income taxes. Stop me if you’ve heard some of this before.
Continue reading "Ireland must focus on mitigating the external risks to our economy"
The Taoiseach needs to give his speech writer a high five, or maybe a fist bump. Because in the last few weeks, we have had two dingers from Enda Kenny.
The first was his Brexit speech, which was understandably overshadowed by the McCabe controversy, but is well worth reading, because Brexit will affect every person on this island, North and South. In that speech, the Taoiseach rightly said: “History has rarely been idle in Ireland.”
In another speech, recognising the distinct ethnic status of the Traveller community, Kenny ended with: “May all the people of our nation live in the shelter and never in the shadow of each other.”
This second phrase, perhaps deliberately, echoes a banquet speech given by President Michael D Higgins on his historic state visit to Britain. There the President said: “Ireland and Britain live in both the shadow and in the shelter of one another, and so it has been since the dawn of history.”
Higgins was himself quoting from an old Irish proverb: “Is ar scáth a chéile a mhaireann na daoine.” This translates roughly as: “It is in each other’s shadow that we flourish.”
Ireland in the shadow and the shelter of Britain. Travellers in the shadow and the shelter of the settled people.
And history never idle. Remarkable parallels.
Continue reading "How Ireland can survive the flight from Britain’s shadow"
Should we intervene?
This is the fundamental public policy question. It spawns a set of follow-on questions, like: Why should we intervene? How should we intervene? For how long would we intervene? How much will it cost the taxpayer to intervene?
Continue reading "I would let Bus Eireann go"
The stock market is reaching new highs. People are talking about inflation again. Goldman Sachs has never had it so good. Corporate mergers and takeovers are happening. Everyone is looking to US president Donald Trump and his policies as the engine of world economic growth. Despite the volatility he personally injects, things seem to be going well.
Though you’d never know it listening to Trump, unemployment is at a historic low, as is crime, bankruptcies and debt delinquencies. Four US stock markets, the Nasdaq Composite, the Dow Jones Industrial Average, the S&P 500 and the Russell 2000 of small capitalisation stocks each closed at a record level for four consecutive days last week. Last time that happened was in 1995.
The bet is that Trump - a lying, racist, misogynist who has never held a public policy job before - will deliver on his campaign promises to cut taxes for everyone, spend borrowed money on infrastructure, slash regulations across the board and spur economic growth. Despite his own lack of credibility in delivering any of these barely sketched-out policies, market participants are gambling that the smart people behind Trump can craft a policy package to get through the Republican Congress in time for the mid-term elections, which may well see the Congress swing Democratic, and thus block Trump as it blocked former president Barack Obama. So right now, it’s risk-on for equities and, crudely, stock markets go boom. If Trump’s team fulfils his campaign promises, the result will be large windfalls for the corporate sector, and the corporate classes in the US. It is telling that Goldman Sachs has never traded at higher levels, a reflection that the swamp-draining is not going well.
Continue reading "Ireland is the Lionel Messi of getting other people’s money. Trump might end that."
Like many people, I wake up every morning and ask myself: what has Donald Trump done overnight? It’s hard to keep up with everything he’s done.
Everyone is asking: what does Trump mean for me, my family and my business? Should I buy a house if I work for a multinational? Should I travel to the US if I’ve read an anti-Trump tweet? Should I invest if he pulls up tariffs and increases the price my customers will pay for my goods? Should I buy bonds or equities for my retirement? What will the economic consequences of Trump be?
Continue reading "‘Trump’s not draining the swamp. He’s filling it up, and stoking another banking crisis'"
Here’s where we are at the end of the first month of 2017. Theresa May is in London, trying to take Britain out of the European Union. Donald Trump is in Washington DC, trying to build walls and erect tariffs. Angela Merkel is in Berlin, veering to the right to stay in power. In France, Marine Le Pen, a hard-right candidate, is likely to clash with two other right-wing candidates to see who can be president of France.
At the annual mutual love-in of Davos, the Chinese premier promised to lead the world in terms of openness. This is code for: lead the world by stepping into the space left behind by a retreating US. Global power is pivoting to Asia. South American economies are sliding into their familiar commodity-based cycles of debt-induced recession, while the Middle East tears itself apart in two wars — the one in Syria, and the one in Yemen. You’re not even safe in the Arctic, because that is melting at an unprecedented rate, paying no heed to what the climate denier in the White House says.
(I am available for children’s parties, by the way.)
Continue reading "US economic model not best for Irish workers"
Like a train coming toward us through thick fog, the shape of Britain’s exit from the European Union is becoming clearer. The impact is, as yet, uncertain. Whatever happens, the chances are it isn’t going to be good. The worst of all worlds for Ireland is a situation where Britain imposes a hard Brexit.
A hard Brexit means tariffs and levies on the goods and services our businesses sell. The heart of the European Union is its customs union – the definition of a customs union is a common external tariff we have to share as part of the EU.
A hard Brexit means potential quotas on the movement of our workers, and even caps on the movement of our capital. A hard Brexit means throwing our relationship with Northern Ireland into sharp relief.
Where exactly do we draw the line between North and South?
Continue reading "Brexit has thrown up the question that we, as a group of peoples, must answer"
Time to adapt or die in the post-Brexit world order
Ireland’s response to Brexit will define our economic landscape for decades to come. Our much-maligned civil servants gave Ireland the best possible start the day after the referendum result, when Taoiseach Enda Kenny, at his most statesmanlike, reassured his people that his government had this under control and had a plan for Brexit.
Kenny even showed us the plan, and it looked like a good plan to me. Our civil servants get a lot of stick. It’s only right we praise them when they do a good job. Again, in fairness to them, Britain had not settled on its mode of exit before last week, but the range of possible negotiating endpoints was becoming obvious some weeks ago.
Despite such a good start, Ireland’s policy makers have yet to articulate their approach to a post-Brexit world beyond grabbing jobs from the City of London.
Those jobs don’t seem to be coming our way, though. That may be no bad thing.
Continue reading "Ireland’s Brexit blues"
This is a quick update to the the previous post about getting a new MacBook Pro. So far three things have happened that people considering the purchase might be interested in.
- The keyboard has only gotten better over time. So much better, in fact, that I’m typing more and for longer (I have pretty poor wrists) and I have not been able to use the removable keyboard and trackpad I had for my office, as they were no longer comfortable. As a result my large screen, wireless keyboard, and trackpad, are all sitting on my filling cabinet.
- The battery is definitely worse than my MacBook Air’s, but not enough to make me want to return it. I’ll get 7-8 hours if I’m really careful, or 5-6 if I’m not. This is a bummer because it means I must carry the charger around everywhere I go, which increases weight somewhat.
- There is, so far as I can see, no downside to the ‘dongle life’. I have one (the VGA adapter) and it handles everything I’ve needed so far. The Hyper one I bought to connect to my screen is sitting on top of the screen, on my filing cabinet.
There are no beds. The sick and the dying are left outside while stressed-out healthcare professionals work round the clock to help them. Elective procedures are cancelled, previously closed beds are reopened. It is a surprise. The ensuing media storm assures us the situation is unacceptable. The doctors’ representative, the nurses’ representative, the union representative, the patients’ representative, the minister and the technocrats who run the system are all over the airwaves, because the situation is unacceptable. The solution is more money. Much more money. Money and time. Because change will take place, but only over a number of years. And change must happen. Because this is unacceptable
Continue reading "Why can't we fix healthcare?"
On the advent of ‘Global Trumpism’, Stephen Kinsella, Ireland’s economic commentator of the year, reflects on its potential to destabilise the Irish economy.
In 1948, the poet WH Auden wrote The Age of Anxiety. Auden was talking about a world after the second world war in which the old certainties he was raised with had been blown away. By 1948, Britain had ceased to be a world power, the US was ascendant, and much of Europe was still in ashes. Auden was also talking about himself. Then aged 37, he was worried his best years were behind him, and did not look forward to old age.
Continue reading "Economic Outlook 2017: The start of a new age of anxiety"
I’ve been working on Mac laptops since the early 2000s. I typically get a new one every 2-3 years. My first one was a G3 clamshell iBook. Since then the hardware and software has evolved steadily, and this week I moved from a MacBook Air to a 3.1 ghz, 512mb MacBook Pro for three reasons.
Continue reading "Some Thoughts on the New MacBook Pro"