How will we recover?

book smarts

1. Gradually reduce wages until competitive again and FDI attracted.
2. "Knowledge" economy- whatever the fck this vague generality means?
3. Attract investment from the diaspora? (Although who the fck would want to invest here?)

Are these the best ideas people can come up with?

AARRRGH

Recover to what?

The problem I have with the word recovery is it suggests the bubble was somehow normal and we should/can return to that.

The past 9 years was a credit binge. We were not wealthy. Nearly everything we had was bought with credit. We need to stop thinking those years were normal and maintainable in our tiny economy.

Once you accept this you realise there can be no recovery.

We were never a wealthy country, and will not "recover" to being a wealthy country.

Sorry.

thebman

Ok by recovery I think most people think jobs being available and companies expanding or being able to do business and not having several go under each week.

One thing that seems to always be over looked when trying to attract business is infrastructure. We have crap infrastructure and what is there is expensive to use or cost a fortune to build in the case of public roads.

We seriously need to invest in infrastructure and reduce the cost of electricity and broadband in this country. Wages probably need to be looked at too but lowering wages on its own won't be enough IMO.

RealityCheck

AARRRGH wrote: »

Recover to what?

The problem I have with the word recovery is it suggests the bubble was somehow normal and we should/can return to that.

The past 9 years was a credit binge. We were not wealthy. Nearly everything we had was bought with credit. We need to stop thinking those years were normal and maintainable in our tiny economy.

Once you accept this you realise there can be no recovery.

We were never a wealthy country, and will not "recover" to being a wealthy country.

Sorry.

Ireland really needs to reinvent itself. We are going to have to try new things that we hav'nt done before. I dont think our answers are to be found in consumerism or FDI. We need to find something different.
We need to build sound foundations to build our economy on. I believe we must invest in our own companies and build from the bottom up to become market leaders in something real and tangeable.
However, considering that our dependance on construction over the last decade was so high, I feel it will take a another whole decade before we can reap the rewards of any reinvention of the Fundamentals. It going to take a long long time. It best that we meet the challenge head on now.

RealityCheck

thebman wrote: »

We seriously need to invest in infrastructure and reduce the cost of electricity and broadband in this country. Wages probably need to be looked at too but lowering wages on its own won't be enough IMO.

Bingo, we are the laughing stock of Europe with regard to our investment in energy and broadband. We need to be ahead of the pack if we are to regain our position in the European market. We are well behind and that gap is likely to get larger with the economy the way it is.

LoanShark

We need to face up to the fact that we are a seriously over paid workforce.
That spending more time trying to build a decent infastructure and leading services (broadband etc..) We will never attract investment.

Having a proper layout of how wages should be structured in this country in all sectors..

voxpop

LoanShark wrote: »

We need to face up to the fact that we are a seriously over paid workforce.

We are not all overpaid :pac:

AARRRGH

thebman wrote: »

Ok by recovery I think most people think jobs being available and companies expanding or being able to do business and not having several go under each week.

Let's take O'Briens as an example.

It made its money based on selling overpriced sandwiches to people who were living beyond their means, or at least, were enjoying large salaries based on living life in a bubble.

Because the bubble has now burst, it is apparent the O'Briens business model never really made much sense, hence O'Briens has closed.

The same thing applies to many businesses in Ireland. They never really should have existed in the first place (they only stayed alive due to bubble insanity) and are now returning to a reality with a bang.

Based on the above logic, I don't believe we can return to having well paid jobs for everyone. I don't know if you noticed this (or will agree with me) but every mongo in Ireland had a job or could have a job during the bubble. This is not normal.

Ireland was always a poor country, and we have a tiny economy. I don't believe we really should have full employment - 15% unemployment is probably about right for us. The bubble just made (most of) us lose touch with reality.

I don't know what the solution is. Perhaps offer all new businesses 10 years of no corporation tax or something like that.

jimmmy

AARRRGH wrote: »

, I don't believe we can return to having well paid jobs for everyone. I don't know if you noticed this (or will agree with me) but every mongo in Ireland had a job or could have a job during the bubble. This is not normal.

Ireland was always a poor country, and we have a tiny economy. I don't believe we really should have full employment - 15% unemployment is probably about right for us. The bubble just made (most of) us lose touch with reality..

Not untrue. We would need to have realistic expectations. During the bubble even school teachers thought it was a God-given right to have a holiday home in Croatia. ( remember that ? ). We need to lower our salary expectations as a nation, given we are not smarter or work harder than those in Singapore or China.

AARRRGH wrote: »

,
I don't know what the solution is. Perhaps offer all new businesses 10 years of no corporation tax or something like that.

people would just close down after 10 years + open again another company (in their partners name if necessary etc )

thebman

AARRRGH wrote: »

Let's take O'Briens as an example.

It made its money based on selling overpriced sandwiches to people who were living beyond their means, or at least, were enjoying large salaries based on living life in a bubble.

Because the bubble has now burst, it is apparent the O'Briens business model never really made much sense, hence O'Briens has closed.

The same thing applies to many businesses in Ireland. They never really should have existed in the first place (they only stayed alive due to bubble insanity) and are now returning to a reality with a bang.

Based on the above logic, I don't believe we can return to having well paid jobs for everyone. I don't know if you noticed this (or will agree with me) but every mongo in Ireland had a job or could have a job during the bubble. This is not normal.

Ireland was always a poor country, and we have a tiny economy. I don't believe we really should have full employment - 15% unemployment is probably about right for us. The bubble just made (most of) us lose touch with reality.

I don't know what the solution is. Perhaps offer all new businesses 10 years of no corporation tax or something like that.

Its going to take too long for me to write out everything I want to say but I don't think unemployment should be expected to be above 10% in any properly functioning economy. As long as you have a good foundation for the economy of say financial services and IT jobs then you'll have people who will want sandwiches and you could employ people to make them but you need the core skilled workforce to be in employment and not feel like they are under pressure to make rent/mortgage repayments every month in order for them to have the money to spend on going to cinema or buying sandwiches or going to the pub.

Basically if the skilled workforce is in employment then services can build up to offer services to their employers and employees that will be in demand.

The sandwich deli is not a completely unviable business but it is very dependent on the rest of the economy performing as it is a luxury that people will only spend on if they feel they are secure employment and a secure financial position.

I mean I was earning probably 10,000 less than the average wage in my last job and I was able to go grab a sandwich because I ensured I had affordable accomodation and I refused to take out any loans. Its not impossible to live a moderate lifestyle and have it incorporate a deli sandwich while in work each day. the sheer number of these in the country was probably excessive alright.

I think the biggest problem in this country at the moment is both electricity and broadband costs are being kept artificially high by the government. Likewise public transport as it is state run is artificially high as it is improperly managed IMO.

There are other examples but we could substantially cut costs for businesses without much pain if the government would stop the logic of artificially high prices from ESB will encourage competitors into electricity market. Didn't work for broadband, won't work for electricity either (and it isn't).

thebman

LoanShark wrote: »

We need to face up to the fact that we are a seriously over paid workforce.
That spending more time trying to build a decent infastructure and leading services (broadband etc..) We will never attract investment.

Having a proper layout of how wages should be structured in this country in all sectors..

Wages are only one aspect if you have comparable wages with other EU countries but worse infrastructure guess where they will go?

Some sectors such as electricity the regulator is keeping prices artificially high for businesses to try to encourage competition. This is insane.

AARRRGH

thebman wrote: »

I don't think unemployment should be expected to be above 10% in any properly functioning economy.

When has Ireland been a properly functioning economy?

The only dates I can think of are the mid to late 1990's...

alfranken

AARRRGH wrote: »

Let's take O'Briens as an example.

It made its money based on selling overpriced sandwiches to people who were living beyond their means, or at least, were enjoying large salaries based on living life in a bubble.

Because the bubble has now burst, it is apparent the O'Briens business model never really made much sense, hence O'Briens has closed.

The same thing applies to many businesses in Ireland. They never really should have existed in the first place (they only stayed alive due to bubble insanity) and are now returning to a reality with a bang.

Based on the above logic, I don't believe we can return to having well paid jobs for everyone. I don't know if you noticed this (or will agree with me) but every mongo in Ireland had a job or could have a job during the bubble. This is not normal.

Ireland was always a poor country, and we have a tiny economy. I don't believe we really should have full employment - 15% unemployment is probably about right for us. The bubble just made (most of) us lose touch with reality.

I don't know what the solution is. Perhaps offer all new businesses 10 years of no corporation tax or something like that.

Property developers

thebman

AARRRGH wrote: »

When has Ireland been a properly functioning economy?

The only dates I can think of are the mid to late 1990's...

True but it isn't even hard to do with the right leadership. It isn't rocket science. We either get it right or got bankrupt so I think we'll get it right because politicians will now have to do the right thin instead of playing to invested interests (although they'll still try to play to them where they can).

I think a big problem is what appears to be the core of the economy doesn't actually seem to have an effective lobby group. our lobby groups are either farmers (or related to food produce) or developers. Neither are the foundation of a developed economy. The winds of change and all that, farmers won't get us out of this mess and obviously property developers won't either.

lmimmfn

OP clarification? recover personally or as a country? to recover personally the best bet is to just leave. To recover as a country would mean we actually individually have to have a common goal.
In the past this has been the common goal of greed, now its the common goal of poor us, we need to save ourselves from our years of spending. We have a load of politicians who are overpaid, clueless and just bicker amongst themselves. The only way to recovery is to clean out the crap, clean out the elitists, jumpstart the public sector and private sector individually and work together to come out of this.

Its not gonna happen so im sure we'll have Nama paid off and be recovered in 15-20 years and we can all revert back to the greed we've very easily forgotten.

ih8northsiders

pretty grim reading here

ei.sdraob

Actually the government is sort of got something right over last decade (free 3rd + 4th level edumacation)

i could say my company and current employment is "knowledge economy" related, we have to compete with people from around world, from atlanta to bangalore, from mexico to china very competitive

but were getting along

ironically all of the hardware is on the continent and usa since electricity and bandwidth is very expensive here, an order of magnitude or so :eek: (20x for 1gbit+ fibre 95th %ile commits it costs here in Ireland, i kid you not)

tho one thing about this "knowledge" economy is that it can come and go, if taxes go up im out of here to more friendly locations

RealityCheck

Brian Cowen used to say "the fundamentals of the Irish economy are sound" .

We no longer have any, therefore a very long road ahead to find some. This is the net result of 12 years of the "worst government ever", as described by the late CJ Haughey back in 2004.

RealityCheck

ei.sdraob wrote: »

ironically all of the hardware is on the continent and usa since electricity and bandwidth is very expensive here, an order of magnitude or so :eek: (20x for 1gbit+ fibre 95th %ile commits it costs here in Ireland, i kid you not)

tho one thing about this "knowledge" economy is that it can come and go, if taxes go up im out of here to more friendly locations

Industrial electricity prices are 35% above the European average :eek:. Absolutely ridiculous considering a lot of it is due price distortion caused by the regulator.

http://www.competitiveness.ie/media/ncc091006_statement_energy.pdf