Good economic news thread

AlmightyCushion

Rightwing wrote: »

I wouldn't pay too much attention to the bond markets at present. Either that, or the equity market is completely out of sync.

Regardless, it has very real effects on our interest costs.

Voltex

Godge wrote: »

You miss the point completely.

Assume Ireland has a balanced budget in 2016 and has no need to borrow for current spending. You are now assuming that this means the bond rate going down has no effect on us.

You are wrong.

Whenever we borrowed money in the past we borrowed for a number of years. So for example, €10bn may have been borrowed for five years and is due to be repaid in 2016. Now we only have a balanced budget in 2016, we don't have a €10bn surplus. So that €10bn will be rolled over (as government debt has been rolled over for over a century).

Now this is where the interest rate becomes important. Say the interest rate on that debt was 4%, equivalent to €400m. Now if the interest rate now is 5%, the interest rate on the rolled over debt goes up to €500m and we now have a deficit of €100m.

On the other hand if the interest rate is now 2%, we have a surplus of €200m.

So the interest rate on bonds does matter and the lower the better.

I think you have missed my point. We are now required to bring a budget deficit to under .5% of GDP and increase the rate of fiscal convergence under the terms of the fiscal compact. So balanced budgets are a given.

All very fine, but this credit upgrade reflects the belief that Ireland will be
borrowing less in the future than expected, so I am not sure why you are griping
about it.

A credit upgrade from the ratings agencies doesn't really matter in the short run as the reason Irish paper is yielding <2% has nothing to do with the dynamics of our debt right now but rather the ECB's back door bazooka LTRO program.

However take away the LTRO and allow markets rate the sovereign's risk based on the fundamentals- we'd have a different picture altogether.

I'm not suggesting that the State mismanage the commitments we have made to current borrowings. This should be done in the most responsible and efficient manner possible.

My main point is that I would like to see a gradual, persistent and sustained reduction in the size of our Government, a reduction in spending across all types of subsides and subventions and a subsequent reduction in taxes.

Fine, so you deal with the structural deficit in your general government
balance. Still you're going to have periods when you spend more than you take
in, hopefully because of investment related spending that will increase to
future growth capacity of the country. Hence you need to borrow. Having a good
credit rating makes this cheaper. That's a good thing.

If you disagree
with the State borrowing at all (and not just to plug structural deficits), then
you don't understand economics.

I have no problem with the State borrowing money..so long as the intention is to use this capital to expand the productive possibility frontier. However what I also believe and I think history supports my view on this (going back to the Reagan/Volcker term), that recessions and cyclical dips are shorter and less destructive when the State allows the market to correct its self and doesn't try to interfere.

Every State in the world has continually expanded State spending. Living
standards have risen over the last 50 years in every state.

So the
answer to your question is everywhere except perhaps North Korea where they have
cut State spending and starved half their population.

Show me a State
which now spends less money than in 1950 and also has a higher standard of
living.

Are you sure about this? The only western modern State that I know of that used State spending as a mode of increasing the levels of GDP and increasing the living standards of its citizens was Greece..and we all know where that strategy got them to. Where as if we look at a State that I feel most resembles the economic viewpoint I hold which is Switzerland, your concept and the resulting country (Greece) example doesn't hold well compared to the successful economic outcomes of countries with economic and political systems like I advocate.

Private enterprise and free markets are the source of the increase in living standards over the last 50 years...not State spending. In Irelands case CRH wasn't conceived of in an office on Kildare St, Ryanair didn't build itself into one of the Worlds great airlines due to a strategy formulated by Government ministers and their civil service apostles...it was private enterprise and free markets. The resulting trickle down of income and investment, entrepreneurial activity and innovation resulting from free property owning society results in an improvement in living standards.

Rightwing

AlmightyCushion wrote: »

Regardless, it has very real effects on our interest costs.

But it's a short term phenomeon and the downside to it is it can, and does lead Govts to borrow more than they can afford.

ezra_pound

Voltex wrote: »

I think you have missed my point. We are now required to bring a budget deficit to under .5% of GDP and increase the rate of fiscal convergence under the terms of the fiscal compact. So balanced budgets are a given.

A credit upgrade from the ratings agencies doesn't really matter in the short run as the reason Irish paper is yielding <2% has nothing to do with the dynamics of our debt right now but rather the ECB's back door bazooka LTRO program.

However take away the LTRO and allow markets rate the sovereign's risk based on the fundamentals- we'd have a different picture altogether.

I'm not suggesting that the State mismanage the commitments we have made to current borrowings. This should be done in the most responsible and efficient manner possible.

My main point is that I would like to see a gradual, persistent and sustained reduction in the size of our Government, a reduction in spending across all types of subsides and subventions and a subsequent reduction in taxes.

I have no problem with the State borrowing money..so long as the intention is to use this capital to expand the productive possibility frontier. However what I also believe and I think history supports my view on this (going back to the Reagan/Volcker term), that recessions and cyclical dips are shorter and less destructive when the State allows the market to correct its self and doesn't try to interfere.

Are you sure about this? The only western modern State that I know of that used State spending as a mode of increasing the levels of GDP and increasing the living standards of its citizens was Greece..and we all know where that strategy got them to. Where as if we look at a State that I feel most resembles the economic viewpoint I hold which is Switzerland, your concept and the resulting country (Greece) example doesn't hold well compared to the successful economic outcomes of countries with economic and political systems like I advocate.

Private enterprise and free markets are the source of the increase in living standards over the last 50 years...not State spending. In Irelands case CRH wasn't conceived of in an office on Kildare St, Ryanair didn't build itself into one of the Worlds great airlines due to a strategy formulated by Government ministers and their civil service apostles...it was private enterprise and free markets. The resulting trickle down of income and investment, entrepreneurial activity and innovation resulting from free property owning society results in an improvement in living standards.

This is just ridiculous. Ryanair does nothing for the well-being of the vast majority of Irish citizens. Redistributed tax, on the other hand, benefits pensioners, parents, the disabled and the unemployed. This social spend gets spent in the real domestic economy. Of Ryanair went bust tomorrow there would be no discernible effect on the domestic economy or on the well-being of its citizens whereas if the state stopped paying social welfare the domestic economy would grind to a halt and we would witness extreme hardship and social disorder.

Voltex

ezra_pound wrote: »

This is just ridiculous. Ryanair does nothing for the well-being of the vast majority of Irish citizens. Redistributed tax, on the other hand, benefits pensioners, parents, the disabled and the unemployed. This social spend gets spent in the real domestic economy. Of Ryanair went bust tomorrow there would be no discernible effect on the domestic economy or on the well-being of its citizens whereas if the state stopped paying social welfare the domestic economy would grind to a halt and we would witness extreme hardship and social disorder.

Regarding your points on Ryanair..all Id ask you to consider is to have a think about how many people travel out to that great big facility in North county Dublin every day and earn a wage due to the presence of Ryanair? How many people are employed by associated companies? What C.T did Ryanair pay last year?

The redistribution and transfer of tax receipts in this country hurts only the poor...by making them pay USC and I.T at such low levels due to the current demands on the Dept. SW.

andrew

Voltex wrote: »

I think you have missed my point. We are now required to bring a budget deficit to under .5% of GDP and increase the rate of fiscal convergence under the terms of the fiscal compact. So balanced budgets are a given.

My understanding is that the structural deficit has to be brought to 0; there can still be a cyclical deficit.

A credit upgrade from the ratings agencies doesn't really matter in the short run as the reason Irish paper is yielding <2% has nothing to do with the dynamics of our debt right now but rather the ECB's back door bazooka LTRO program.

However take away the LTRO and allow markets rate the sovereign's risk based on the fundamentals- we'd have a different picture altogether.

No. The ratings upgrade was/is due to Ireland's economic performance and outlook. Anyway, saying 'if it weren't for X' 'we'd be Y' doesn't actually mean anything. We don't live in a vacuum. If Ireland's rating is doing better due to policy, then how is that less valid than it doing better for some other reason.

I have no problem with the State borrowing money..so long as the intention is to use this capital to expand the productive possibility frontier.

What about borrowing for consumption smoothing?

However what I also believe and I think history supports my view on this (going back to the Reagan/Volcker term), that recessions and cyclical dips are shorter and less destructive when the State allows the market to correct its self and doesn't try to interfere.

History absolutely does not support you on that one. Why does the Volcker recession give you that idea? Isn't the Volcker recession an example of the 'state' correcting the market?

Private enterprise and free markets are the source of the increase in living standards over the last 50 years...not State spending. In Irelands case CRH wasn't conceived of in an office on Kildare St, Ryanair didn't build itself into one of the Worlds great airlines due to a strategy formulated by Government ministers and their civil service apostles...it was private enterprise and free markets. The resulting trickle down of income and investment, entrepreneurial activity and innovation resulting from free property owning society results in an improvement in living standards.

I wonder how many of CRH's contracts were at least partly government funded.

Sheldons Brain

Voltex wrote: »

Private enterprise and free markets are the source of the increase in living standards over the last 50 years...not State spending.

Arguably a significant part of the increase in living standards comes from increased productivity brought about by a better educated population. Irish government funding of education can be a investment for the future just as surely as building a road or the like.

Rightwing

Sheldons Brain wrote: »

Arguably a significant part of the increase in living standards comes from increased productivity brought about by a better educated population. Irish government funding of education can be a investment for the future just as surely as building a road or the like.

True enough, but you can bring in an educated workforce on the cheap from abroad from a poorer nation. Irl suffers from this in reverse, we spend thousands on our brightest and many leave for better returns elsewhere.

Sheldons Brain

Rightwing wrote: »

True enough, but you can bring in an educated workforce on the cheap from abroad from a poorer nation. Irl suffers from this in reverse, we spend thousands on our brightest and many leave for better returns elsewhere.

A relatively small country will always have people coming and going. But some go because they didn't choose to study the things that are in demand while medical people leave as much because of the ramshackle way health is organised as anything else.

Voltex

andrew wrote: »

My understanding is that the structural deficit has to be brought to 0; there can still be a cyclical deficit.
I bring it back to one of the main concepts that I mentioned. With a reduced level of State spending on subsidies and subvention the costs associated with automatic fiscal stabilisers that kick in during cyclical dips should be less profound.



No. The ratings upgrade was/is due to Ireland's economic performance and outlook. Anyway, saying 'if it weren't for X' 'we'd be Y' doesn't actually mean anything. We don't live in a vacuum. If Ireland's rating is doing better due to policy, then how is that less valid than it doing better for some other reason.





What about borrowing for consumption smoothing?



History absolutely does not support you on that one. Why does the Volcker recession give you that idea? Isn't the Volcker recession an example of the 'state' correcting the market?




I wonder how many of CRH's contracts were at least partly government funded.

I bring it back to one of the main concepts that I mentioned. With a reduced level of State spending on subsidies and subvention the costs associated with automatic fiscal stabilisers that kick in during cyclical dips should be less profound.

Irish bonds are benefitting from the ECB's LTRO program...everyone knows that. The prices don't reflect the fundamentals. Its not nice to say but its the truth.


The Volcker recession was due to a restriction in the money supply to reduce inflation not Government interference in the market. The Fed stepped in to clean up a mess made by Government.

Saipanne

Voltex is typing so hard his Friedman fell off the shelf and knocked over his Von Hayek mug.

Voltex

Saipanne wrote: »

Voltex is typing so hard his Friedman fell off the shelf and knocked over his Von Hayek mug.

....and wrecked his shrine to Von Mises.

*filled in the bit you missed*

Rightwing

Saipanne wrote: »

Voltex is typing so hard his Friedman fell off the shelf and knocked over his Von Hayek mug.

Give me Friedman over the likes of Krugman anyway.

Saipanne

Rightwing wrote: »

Give me Friedman over the likes of Krugman anyway.

And who said rightwingers don't have a sense of humour?

Voltex

I know its slightly off topic..but Hayeks Constitution of Liberty although a long tough read is very worthwhile.

Voltex

Saipanne wrote: »

And who said rightwingers don't have a sense of humour?

We like to be called Libertarians.

Saipanne

Voltex wrote: »

We like to be called Libertarians.

Annnnnnnd now we are off topic.

Rightwing

Off topic alright, perhaps we should do a thread over in the Economics forum.

Saipanne

Personally, I don't see the point. I grew out of the need to pick a side. To have a favourite "star" in economics. There is no right answer. No one is the "best" economist. To be frank, most of the field is bollocks.

Godge

http://www.rte.ie/news/2014/1222/668395-ibec/


Back on topic.


"Employers’ group Ibec has said the Irish economy will outperform the rest of Europe and grow by 5.7% this year, despite disappointing preliminary growth figures for the third quarter."


"The group has predicted that Christmas sales this year look set to be at their highest level since 2009."

Christmas sales are the key. I think they are going to be the final element in a big year for the economy.

Sand

I think manufacturing contract decisions by one or two pharmaceutical companies will actually be key.

Tax deals raise questions over Ireland’s growth spurt

Four years after entering a punishing €67bn bailout, the Irish economy is booming again. Gross domestic product expanded at an annual rate of 5.5 per cent between January and June. The European Commission expects Ireland to be the fastest-growing country in the eurozone in 2014.

Yet a chorus of economists say Irish official data have become so distorted this year by an upsurge in offshore activity from a small number of pharmaceutical companies that it paints a misleading picture of the health of the economy.

The distortions are likely to be seen again when third-quarter data for Irish economic activity are released on Thursday. This means that doubts about whether Ireland’s economic turnround is as robust as its boosters claim will persist.

According to the Irish Fiscal Advisory Council, an independent watchdog for the budget, an offshore activity known as contract manufacturing, relatively common in the pharma industry, was especially evident in the second quarter. In those three months, the Irish economy grew at a reported annual rate of 7.7 per cent. John McHale, the council’s chairman, says the second-quarter data “has to be taken with more than the usual pinch of salt”.

Ireland’s pharma industry has long been a large player in the economy. Its exports of €40bn account for about 45 per cent of total goods sold abroad from Ireland. However, it employs just 37,000 people. Some companies, such as Pfizer, have large manufacturing operations in Ireland. Others, such as Shire, use their Irish bases for tax and financial operations.

The sector’s contribution to Irish GDP growth in 2014, however, is much larger than usual. The IFAC estimates that about 40 per cent of the growth in the first half of this year is attributable to contract manufacturing — more than twice the usual level. The activity involves sending manufacturing offshore, but counting the manufactured goods as Irish exports.

The problem with contract manufacturing is that it may artificially boost GDP. “This is manufacturing that is taking place in another country but the sales are being accounted for in Irish GDP. That is not generating jobs or value in the Irish economy,” Prof McHale says.

Economists say it is possible that the contract manufacturing surge can be attributed to a lack of production capacity in Ireland for certain products. But some say it is more likely to be related to “transfer pricing” — the shuffling of cash among related companies — or to other tax-driven strategies involving pharma companies headquartered in Ireland but with little or no manufacturing activity here.

They note that the surge in GDP coincides with the flood of “inversions” that inspired much of the merger and acquisition activity in the pharma sector in the past two years. An inversion is a tax-driven M&A deal where a company acquires an Irish pharma asset and re-domiciles as an Irish company to take advantage of the country’s 12.5 per cent corporate tax rate.

Contract manufacturing usually balances out over several quarters because its export component is offset by royalty payments back to the Irish-based company, which are counted as Irish imports. However, as the finance ministry pointed out in the government’s official Budget 2015 statement, “this relationship appears to have broken down in the first half of 2014”.

According to the Irish Exporters Association, five pharma companies are among the top 20 Irish exporters — Johnson & Johnson (through its Janssen division), Pfizer, Boston Scientific, Gilead Sciences, and Warner Chilcott (now part of Actavis). Among companies that re-domiciled as Irish after “inversions” are Perrigo, which bought Elan, and Actavis, after its Warner Chilcott acquisition.

Pfizer says it is not connected to the contract manufacturing activity; Perrigo says it does not carry out contract manufacturing in Ireland. The other companies did not respond to requests from the FT for comment.

If the surge in contract manufacturing is tax-driven, it suggests that Ireland’s role as a centre for corporate tax management may be undermining the credibility of official statistics. An economist who attends regular briefings on economic data by the Central Statistics Office but prefers to remain anonymous says: “We spend half our time arguing over what is and isn’t brass-plate activity.”

Many economists ignore Irish GDP and concentrate on indicators such as domestic demand as a guide to economic activity. These show that the economy is growing, but at a more modest pace than the breakneck GDP figures suggest.

Eamonn Walsh, professor of accounting at University College Dublin, says GDP has become so unreliable that “it’s like using a sextant rather than a GPS to know what is going on”.

Conall MacCoille, chief economist at Davy Stockbrokers, agrees. “National accounts are getting worse at capturing actual economic activity, especially in Ireland,” he says.

Godge

Sand wrote: »

I think manufacturing contract decisions by one or two pharmaceutical companies will actually be key.

Tax deals raise questions over Ireland’s growth spurt

That is an old article, and has flaws as well as good points. A better thing to look at for what is going on in the real economy would be this:

http://economic-incentives.blogspot.ie/2014/12/increased-traffic-points-to-economic.html

Sand

Godge wrote: »

That is an old article, and has flaws as well as good points. A better thing to look at for what is going on in the real economy would be this:

http://economic-incentives.blogspot.ie/2014/12/increased-traffic-points-to-economic.html

Its not that old, it was published two weeks ago. The points it raises are valid. Economic activity that occurs outside Ireland and has little or no impact on the Irish economy is being counted as Irish GDP for the purposes of statistics. 45% of Irish "exports" are carried out on the basis of 37,000 employees. That sort of labour productivity, if it was in anyway true, should have people from all over the world visiting Ireland to figure out the secret of how Irish workers are delivering such superhuman productivity. They're not.

The great problem with the "noise" and distortion that the activity of our huge MNC sector generates in the national figures is that they hide the true health of the Irish economy. It gives cover to the government to spin utter nonsense, and gives them an excuse to not actually come up with a proper plan for economic development. It wont be long before the trade unions are banging on the doors for a pay rise on the back of this statistical growth.

The economic incentives link is interesting, but there could be a hundred and one reasons why traffic is up. Lower petrol prices? Better weather? More school runs? Traffic growth is higher on weekends than weekdays so if there's a link to economic activity or employment its not apparent.

Coffey doesn't bother to venture or demonstrate any value to the statistics, so I'm a little underwhelmed - its actually worse than confusing house price increases with economic growth.

Dannyboy83

Sand wrote: »

Coffey doesn't bother to venture or demonstrate any value to the statistics, so I'm a little underwhelmed - its actually worse than confusing house price increases with economic growth.

There is no question that congestion became atrocious on the N40 after September this year.

But many people questioned whether that was more heavily related to
i) a surge in job growth or
ii) due to the drastic changes which were made to Cork City's road network during the Summer in order to facilitate retrofitting of cycling lanes, which many cyclists say are too dangerous to use

The city doesn't have an orbital road, just a half ring road on the South side and inadequate public transport which only 8% of city residents with only 2% of commuters cycling.

Many of the city's main roads were altered or reduced to 1 lane with changes at Western Road, Lancaster Quay, Washington Street, South Main Street, and Bishops Street, Frenches Quay, and Sullivans Quay.

There appear to be no measurements for these affected locations available on that map

My assumption, like many others, is that since so many of the city's main roads were reduced to 1 lane, and given that we don't have an orbital road, much of the traffic diverted, while the city felt equally congested due to the massive reduction in throughput capacity.

http://corkindependent.com/20140227/news/dublin-officials-should-see-road-changes-for-themselves-gosch-S80457.html
he controversial road layout changes on Washington Street have prompted a Cork City councillor to call on National Transport Authority representatives to come to Cork and see it for themselves.
Fine Gael Cllr Pat Gosch had a motion passed at Cork City Council on Monday that called for a representative to attend a Roads Functional Committee to discuss the changes. She suggested that councillors, Cork City Council engineers, An Garda Siochána and reps from the local traders and the Cork Taximan's Association all attend.
She said: “I want people who are making decisions in Dublin to come down from their ivory towers and see the situation on the ground. Local knowledge is what it's about.
“I struggled to get it through and I'm delighted that I did. There is an obstruction to businesses by putting in cycle lanes and stopping people shopping. How can you leave one lane going out from the city centre to the west side of the city, where there was two lanes?”

Saipanne

How is GNP doing?

BoJack Horseman

Saipanne wrote: »

How is GNP doing?

Up nearly 5% compared to previous year.

Will grow in 2015 as well, but probably at a slower rate.

Phoebas

Saipanne wrote: »

How is GNP doing?

IBEC prediction wrote:

It predicted that GNP will rise by 5.1% this year, and 4.2% in 2015.

CSO figures shows modest GNP growth in Q3/2014 actually higher than GDP

Saipanne

BoJack Horseman wrote: »

Up nearly 5% compared to previous year.

Will grow in 2015 as well, but probably at a slower rate.

Good. Glad to see the real economy is doing well.

hfallada

Sand wrote: »

Its not that old, it was published two weeks ago. The points it raises are valid. Economic activity that occurs outside Ireland and has little or no impact on the Irish economy is being counted as Irish GDP for the purposes of statistics. 45% of Irish "exports" are carried out on the basis of 37,000 employees. That sort of labour productivity, if it was in anyway true, should have people from all over the world visiting Ireland to figure out the secret of how Irish workers are delivering such superhuman productivity. They're not.

The great problem with the "noise" and distortion that the activity of our huge MNC sector generates in the national figures is that they hide the true health of the Irish economy. It gives cover to the government to spin utter nonsense, and gives them an excuse to not actually come up with a proper plan for economic development. It wont be long before the trade unions are banging on the doors for a pay rise on the back of this statistical growth.

The economic incentives link is interesting, but there could be a hundred and one reasons why traffic is up. Lower petrol prices? Better weather? More school runs? Traffic growth is higher on weekends than weekdays so if there's a link to economic activity or employment its not apparent.

Coffey doesn't bother to venture or demonstrate any value to the statistics, so I'm a little underwhelmed - its actually worse than confusing house price increases with economic growth.

But yet unemployment is done to 11% this year. The number emigrating are down. Consumer confidence is significantly higher, tax take is higher than expected, retail sales. These things all indicated strong economic growth. Yes easy to say the economic growth is only false stats. But other indicators of economic growth such as tax take and increased employment all indicate strong economic growth.

I was claiming my tax back in my local Revenue office. I asked the worker is he seeing any changes in the economy on the revenue side of things. He said they are getting a lot of long term unemployed people finally getting jobs and going back to work. People are eventually going to have to accept we have a growing economy

Sand

hfallada wrote: »

But yet unemployment is done to 11% this year. The number emigrating are down. Consumer confidence is significantly higher, tax take is higher than expected, retail sales. These things all indicated strong economic growth. Yes easy to say the economic growth is only false stats. But other indicators of economic growth such as tax take and increased employment all indicate strong economic growth.

Unemployment going down is good. But I'll start celebrating when unemployment is down to 4-5%.

People are eventually going to have to accept we have a growing economy

A growing economy is the norm so its not shocking to accept. It requires a huge natural disaster, global crisis or chronic mismanagement to shrink an economy. Especially when central banks are literally running out of people to give money to. Leave an economy alone - do absolutely nothing, and it will grow.

What I'd object to is the idea that the GDP figures we're seeing reflect anything much useful about the Irish economy.

Simple question: why is the Irish economy growing at 5.7% and why didn't anyone spot this apparent economic miracle 10 months ago when the European commission predicted a growth rate of 1.7%?

Sheldons Brain

Sand wrote:

Traffic growth is higher on weekends than weekdays so if there's a link to economic activity or employment its not apparent.

If you look at the NRA website traffic is up pretty much everywhere. It could be affected by somewhat lower fuel prices, but it suggests that people have somewhere to go.

M4 8.3%
M1 4.1%
M7 2.4%
M11 27.0%
N18 2.0%

nice_guy80

Time to start upgrading roads if you ask me.

Huge need for simple dual carriageways between the likes of Mullingar/Sligo

Godge

Sand wrote: »

Unemployment going down is good. But I'll start celebrating when unemployment is down to 4-5%.



A growing economy is the norm so its not shocking to accept. It requires a huge natural disaster, global crisis or chronic mismanagement to shrink an economy. Especially when central banks are literally running out of people to give money to. Leave an economy alone - do absolutely nothing, and it will grow.

What I'd object to is the idea that the GDP figures we're seeing reflect anything much useful about the Irish economy.

Simple question: why is the Irish economy growing at 5.7% and why didn't anyone spot this apparent economic miracle 10 months ago when the European commission predicted a growth rate of 1.7%?

On the one hand you say that a growing economy is the norm so its not shocking to accept but yet you will not celebrate the unemployment figure which is now down below the long-term average?

AlekSmart

nice_guy80 wrote: »

Time to start upgrading roads if you ask me.

Huge need for simple dual carriageways Tolled Motorway between the likes of Mullingar/Sligo

FYP.....;)

murphaph

4% unemployment is considered in most countries to mean "a job for anyone that wants one" or "no unemployment" because there will always be a few people who've been laid off or whatever and are between jobs and of course the cohort who do not want to work.

I think we have grounds to be optimistic but I am pessimistic because we don't seem to have learned all that much from the crisis. Many systemic problems simply haven't been tackled.

Saipanne

murphaph wrote: »

4% unemployment is considered in most countries to mean "a job for anyone that wants one" or "no unemployment" because there will always be a few people who've been laid off or whatever and are between jobs and of course the cohort who do not want to work.

I think we have grounds to be optimistic but I am pessimistic because we don't seem to have learned all that much from the crisis. Many systemic problems simply haven't been tackled.

Like what?

Godge

murphaph wrote: »

4% unemployment is considered in most countries to mean "a job for anyone that wants one" or "no unemployment" because there will always be a few people who've been laid off or whatever and are between jobs and of course the cohort who do not want to work.

I think we have grounds to be optimistic but I am pessimistic because we don't seem to have learned all that much from the crisis. Many systemic problems simply haven't been tackled.

We are now below the long-term average unemployment in Ireland. OK, that average went up because of the last few years but weirdly, statistically we are now above average.

hfallada

Sand wrote: »

Unemployment going down is good. But I'll start celebrating when unemployment is down to 4-5%.



Simple question: why is the Irish economy growing at 5.7% and why didn't anyone spot this apparent economic miracle 10 months ago when the European commission predicted a growth rate of 1.7%?

But its incredible how quickly our unemployed rate has fallen. It took something like nearly 15 years for unemployment to drop to this level in the recession of the 80s/90s. The recovery from this recession how been fairly rapid.

The European Commission tends to be very conservative on their estimates. The same with the federal reserve in the US. The US economy grew twice as quickly as estimate in the 3rd quarter of this year. These independent bodies gain nothing from altering figures like most people on this like to suggest

Sand

Godge wrote: »

On the one hand you say that a growing economy is the norm so its not shocking to accept but yet you will not celebrate the unemployment figure which is now down below the long-term average?

I'll never celebrate 11% unemployment. Failure is not success, and failure is not good enough.

Godge wrote: »

We are now below the long-term average unemployment in Ireland. OK, that average went up because of the last few years but weirdly, statistically we are now above average.

What you're highlighting is that economic failure is the norm for Ireland. That's not good enough. The question we should be asking is why is failure the norm in Ireland and what do we need to do to make success the norm.

murphaph wrote: »

I think we have grounds to be optimistic but I am pessimistic because we don't seem to have learned all that much from the crisis. Many systemic problems simply haven't been tackled.

Yep, the worst possible outcome of the past 7-8 years for Irish people is minimal reform of the structures that caused complete failure, whilst being kept afloat by wider Eurozone policies. So much for moral hazard.

hfallada wrote: »

But its incredible how quickly our unemployed rate has fallen. It took something like nearly 15 years for unemployment to drop to this level in the recession of the 80s/90s. The recovery from this recession how been fairly rapid.

Its been almost a decade and I wouldn't yet class it as a recovery when we have a double figure unemployment rate. And we're still 11-12% below the GDP of the Celtic Tiger.

Saipanne

As the economy improves, you can feel the indignation slipping through their fingers, can't you?

They truly dread the day when the economy returns to normal, for they will have nothing to whinge about.

AlekSmart

Saipanne wrote: »

As the economy improves, you can feel the indignation slipping through their fingers, can't you?
They truly dread the day when the economy returns to normal, for they will have nothing to whinge about.

It is a very odd manifestation of our culture indeed...

We came SO close to meltdown....SO close to experiencing REAL austerity,poverty and hardship...and boy does it grate to see and hear such communal outcry,for policies which are virtually guaranteed to bring us directly back to that starting-line.

Luckily,that large lumpen grouping which makes up "the electorate",in recent times,appear to have regained their composure,and having done their sums,realized that they won't in fact be bankrupted by Water Charges at all :eek:

Whilst the economy will revert to "Normal",I suggest that "Normality" will not be what we've been used to,particularly as everybody having to pay for stuff,has not been a core element of our system up to now.

It will be interesting to see what will become of the Paul Murphy's,Mick Wallace's,Ming Flanagan's and the rest over the next 5 years....perhaps it'll be case of "Where are they now"....?

Dannyboy83

Saipanne wrote: »

As the economy improves, you can feel the indignation slipping through their fingers, can't you?

They truly dread the day when the economy returns to normal, for they will have nothing to whinge about.

There is plenty left to whinge about, lol!

I'm trying not to comment negatively on this thread, Fair play to Godge for starting a positive thread, there isn't enough of it on boards.

But still there is negative and then there is realistic - I definitely think the economy is improving, but I don't believe it's returning to "returning to normal".

For example:
I got an xmas bonus for the first time in years.
It was halved by tax basically.
From the remainder I paid my property tax and put money aside for the water tax.
So basically the entire thing is gone on tax & I didn't spend a cent this xmas!
(And I consider myself one of the lucky ones because I actually got a bonus )

I'm actually not too bothered by this to be honest, I just see it like protection money, pay or face the consequences.
Still, it's not what I would consider normal.

Godge

Dannyboy83 wrote: »

There is plenty left to whinge about, lol!

I'm trying not to comment negatively on this thread, Fair play to Godge for starting a positive thread, there isn't enough of it on boards.

But still there is negative and then there is realistic - I definitely think the economy is improving, but I don't believe it's returning to "returning to normal".

For example:
I got an xmas bonus for the first time in years.
It was halved by tax basically.
From the remainder I paid my property tax and put money aside for the water tax.
So basically the entire thing is gone on tax & I didn't spend a cent this xmas!
(And I consider myself one of the lucky ones because I actually got a bonus )

I'm actually not too bothered by this to be honest, I just see it like protection money, pay or face the consequences.
Still, it's not what I would consider normal.

The only way around this was hinted at by Alexsmart in his last post.

For too long we have had a situation whereby some people paid no income tax at all. As the most visible of a person's contribution to society, (remember unlike American sales taxes, VAT, excise duty etc is not on your normal shopping bill) it creates a bond with society that shows everybody contributes. That has been lost in Ireland and we have seen the rise of the entitlement culture with people believing they are entitled to everything without making any kind of contribution and that it should be paid for by somebody else or the magic money tree. The water charges issue is a clear example of this as it is the first visible charge that many people will have to pay, the LPT is chargeable on less numbers of people.

Even if it is only a rate of 1%, income tax should be payable by everyone on all income. The USC was an attempt to do this but even then, they have exempted the first 15k.

murphaph

Saipanne wrote: »

Like what?

50 quid to see a GP.
Solicitors are a law unto themselves and "self regulated" to boot.
No real change to how our electoral system works.
Obvious resistance to sensible ideas like requiring a 20% deposit when seeking a mortgage.
No political will to develop a select few cities for growth, rather spread the butter thinly everywhere so nothing meaningful gets done anywhere.
Still makes financial sense for families to remain on benefits compared to taking minimum wage jobs....should never ever be more attractive to do this.

No changes to child care to benefit working parents. Essentially one wage will pay the childminder which is crazy stuff.

Still flogging dead horses like Irish and religion in schools. It's almost 2015...if people want their kids to learn about superstitious cults they can do it at home. Irish should be optional.

Gardaí also a law unto themselves. Very poor police force when compared to almost any UK force. Just very unprofessional. Sure they solve murders and other big stuff but they don't give a fiddlers about the stuff that affects people day in day out.

Irish water...good idea to charge for water based on usage but as usual a disaster of an implementation.

Still no proper integrated fare system on our public transport networks. This stuff was solved decades ago elsewhere.

John.Icy

I just don't get why people who are unhappy with current times, policies, figures etc keep coming into this thread to put any good news down and start debates over it. There's enough of the negative crap and debating over recovery and such in every other thread.

If you aren't happy, use some damn brain cells and stay out of a thread entitled ''GOOD economic new thread'' if you know it's going to aggravate you.

Baffled me months ago and baffles me still. Start a Bad news thread, for all I care.

Saipanne

murphaph wrote: »

50 quid etc

I agree with pretty much everything. Thanks.

Sand

Saipanne wrote: »

As the economy improves, you can feel the indignation slipping through their fingers, can't you?

They truly dread the day when the economy returns to normal, for they will have nothing to whinge about.

I remember a similar post back in July 2012 in the immediate aftermath of the historic "bank debt deal" Ireland had apparently won from the rest of the Eurozone. I questioned what exactly it was Ireland was supposed to have secured, and expressed doubt that it would amount to anything more than spin. Some other posters expressed similar sentiments to yours above, with one poster in particular informing me that if I wasn't overwhelmed with joy it meant that I didn't understand what had been won by Ireland at the talks. It makes me smile even now.

The point I'm trying to make is for the last 7 or 8 years I've been listening to irrationally optimistic people that resent realism saying "Its not as bad as those doom mongers are making out! Soft landing!", then I listened to "TINA! TINA!" and for most of the last 5 years I've been listening to "We're doing a great job! Everythings going to be great next year!"

I asked a simple question a few posts back - someone to give me a simple explanation of why Ireland's GDP is growing at 5.7% and why economic forecasts missed it only a few months ago? Back in Q4 2013, Ibec predicted 2.8% GDP growth - out by 100%. As recently as June 2014 the IMF predicted 1.7% GDP growth - out by 200%. In April 2014 the Central Bank predicted 2% GDP growth - out by 135%.

People so far seem unable to put forward any coherent rationale for it. My point about faulty and misused statistics blinding people from a real appreciation for the economy is demonstrated.

Saipanne

Sand wrote: »

I remember a similar post back in July 2012 in the immediate aftermath of the historic "bank debt deal" Ireland had apparently won from the rest of the Eurozone. I questioned what exactly it was Ireland was supposed to have secured, and expressed doubt that it would amount to anything more than spin. Some other posters expressed similar sentiments to yours above, with one poster in particular informing me that if I wasn't overwhelmed with joy it meant that I didn't understand what had been won by Ireland at the talks. It makes me smile even now.

The point I'm trying to make is for the last 7 or 8 years I've been listening to irrationally optimistic people that resent realism saying "Its not as bad as those doom mongers are making out! Soft landing!", then I listened to "TINA! TINA!" and for most of the last 5 years I've been listening to "We're doing a great job! Everythings going to be great next year!"

I asked a simple question a few posts back - someone to give me a simple explanation of why Ireland's GDP is growing at 5.7% and why economic forecasts missed it only a few months ago? Back in Q4 2013, Ibec predicted 2.8% GDP growth - out by 100%. As recently as June 2014 the IMF predicted 1.7% GDP growth - out by 200%. In April 2014 the Central Bank predicted 2% GDP growth - out by 135%.

People so far seem unable to put forward any coherent rationale for it. My point about faulty and misused statistics blinding people from a real appreciation for the economy is demonstrated.

Economic forecasts are inaccurate shocka.

Sand

John.Icy wrote: »

I just don't get why people who are unhappy with current times, policies, figures etc keep coming into this thread to put any good news down and start debates over it. There's enough of the negative crap and debating over recovery and such in every other thread.

If you aren't happy, use some damn brain cells and stay out of a thread entitled ''GOOD economic new thread'' if you know it's going to aggravate you.

Baffled me months ago and baffles me still. Start a Bad news thread, for all I care.

Its a discussion forum - if you create a thread or a post here you better be able to discuss it. If you need some sort of "safe zone" where a viewpoint cannot be discussed or criticised, it doesn't say much for the viewpoint.

From the charter:

"Please remember that we are not a blog, a news feed nor an announcement forum - if you are not willing to discuss what you post, then please don't post it. Thread will be locked and posters may face a sanction for repeatedly breaking this rule."

"This forum is not a newsdump, blog or somewhere to post copy & pastes from other sites. "

Sand

Saipanne wrote: »

Economic forecasts are inaccurate shocka.

Inaccurate by whole orders of magnitude? If the economic growth is based on real activity why cant the forecasters spot the causes of activity even 6 months ago, half way through 2014?