# Wall Street Journal  - The Sickly Tiger



## CorkGuy12 (27 Jan 2009)

Opinion Piece about Ireland in todays WSJ.

http://online.wsj.com/article/SB123301620834517715.html


> The Sickly Tiger
> Ireland is in for a nasty deflationary spiral.
> 
> By MICHAEL J. O'SULLIVAN | From today's Wall Street Journal Europe
> ...


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## Chocks away (27 Jan 2009)

All this could have been written by an articulate 10 year old that has been keeping abreast of the money columns. Coming from America, where things are far more perilous, this is a bit rich (pun intended).


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## foghorn (27 Jan 2009)

Chocks away said:


> All this could have been written by an articulate 10 year old that has been keeping abreast of the money columns. Coming from America, where things are far more perilous, this is a bit rich (pun intended).


 
It might be stating the obvious, but the majority of people on this website still don't believe the following:

_Politicians on both sides are still in denial about the country's severe property bubble, refusing even to call it one. They still appear to believe that the downturn in property values is cyclical, and not structural_


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## tiger (27 Jan 2009)

foghorn said:


> It might be stating the obvious, but the majority of people on this website still don't believe the following:
> 
> _Politicians on both sides are still in denial about the country's severe property bubble, refusing even to call it one. They still appear to believe that the downturn in property values is cyclical, and not structural_


Yes, and it looks like we're in for a long drawn out recession/depression.  It will be at least a decade before prices get back to 2006 levels in my opinion.


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## DrMoriarty (27 Jan 2009)

What he said two years ago:



> Ireland will still make a very interesting socio-economic case study over the next few years. The main question political economists will be asking is whether Ireland can sustain rapid economic expansion and if so whether public services and society as a whole will reap the benefits. These issues present Irish policymakers with an opportunity to meet new challenges with innovative solutions, and a chance to establish an Irish template for managing small open economies in a globalised world. Such a template might prove valuable to fellow eurozone members such as Spain, and set down policy options for newer nations like Georgia to follow.


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## Purple (29 Jan 2009)

> Instead, Ireland's policy makers are on course for a painful deflationary spiral, largely by focusing on problems that are only tangential to the real economy, such as the commercial property sector, and by avoiding those that merit full attention, namely small and medium-size businesses.


 That's the bit I wish our leaders, and the government, would take on board.


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## shnaek (29 Jan 2009)

In an effort to put a positive spin on all this negative sentiment - here's and article by Henry McDonald from The Observer, Sunday 11 January 2009 

"Ireland's economy will bounce back from the credit crunch and start to outperform its major European rivals over the next 10 years, one of the United States' leading economists has predicted.
After a week of job losses and warnings yesterday of major cuts in the Republic's public sector, a former adviser to the US government has given a surprisingly upbeat assessment of Ireland's economic prospects for the rest of the decade.
Within the next 10 years Ireland's growth rates will be higher than the economies of main competitors such as Germany and France according to Dr Robert E Kennedy, head of business administration at the University of Michigan.
In a new book on outsourcing in the global economy, Kennedy urges Ireland to accept that "assembly-line manufacturing" would leave the country for eastern Europe and beyond.
Last week US computer giant Dell announced it would axe 1,900 jobs at its Limerick plant and shift its manufacturing to Poland. The job losses at Dell came just 48 hours after 800 jobs at Waterford Crystal were put in jeopardy after the glass maker's parent company, Waterford Wedgwood, went into administration.
Kennedy predicted more jobs would be lost from Ireland's manufacturing base. "Ireland has very high labour costs compared to central and eastern Europe. The average wage, if you divide GDP by population in Ireland, is around $50,000 (€37,000) whereas in Poland, it is $11,000. So in terms of low-skilled jobs involving physically assembling computer parts, in the end Ireland can't compete.
"However, where Ireland has an edge is in its highly skilled, educated workforce. What was interesting about the Dell decision was that it was its manufacturing arm being shifted to Poland. Dell is keeping most of its service and administrative base in Ireland."
The central thesis of Kennedy's book is that advanced economies must shift their activities from manufacturing to services and specialist fields such as financial expertise, biotechnology, innovation and design.
"What is happening to the Irish economy at present, if we leave out the credit crunch, also happened to the United States quite a while ago," he said. "Today in the private sector service and specialist industry makes up about 72 per cent of economic activity, whereas only 16 per cent is manufacturing.
"Ireland is going through the same process. Your success from the mid-1990s was based on attracting big names in manufacturing from the United States. Now they are leaving as your wage levels rise and these companies look eastwards. The next phase the Irish economy will go through is an evolution towards services where you will grow in niche areas of expertise. You have the edge over others in the EU because you have an Anglophone, highly educated workforce as well as a free and open economy. Leaving aside the current global crisis, Ireland still has an excellent business environment."
Dr Kennedy said that within a decade Ireland would be enjoying annual growth rates of 3 per cent, far higher than the EU average. "Economies like Germany and France are not as flexible as the Irish economy. There are far more restrictions and regulations in these larger economies than there are in Ireland. If you asked me what will the picture be like in 10 years' time I would put big money on a bet that Ireland will outperform these larger countries."


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