Generation Game- David McWilliam's take on Irish economy

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ubiquitous said:
The main victims of Bacon 2 were the tenants who either didn't want to, or couldn't buy their own homes, and who ended up being screwed on higher rents.
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Surely this was due to the lack of landlord-tenant legislation though? It was reformed in 2004 but is still greatly lacking when compared with international standards.
 
Afuera said:
Surely this was due to the lack of landlord-tenant legislation though?
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No, it was due to the lack of rental accomodation as a result of the government's hamfisted intervention. (No pun intended, Dr Bacon!)
 
It's a strange example to pick. Given that

- The government and the BoJ loosened credit rules considerably during the boom years, fuelling spectacular asset price inflation (sound familiar?)
- After the collapse, the BoJ refused to allow banks to fail, keeping non-performing loans on their books for the better part of a decade with no means of writing them off
- The government continues to intervene to try and "kick start" the economy with government works programmes of every hue, including bridges to nowhere and free coupon passes for food, this has seen the debt-to-GDP ratio exceed 100%
- In the misguided belief that they can kill off deflation through a combination of low interest rates and a weak currency, the BoJ intervenes relentlessly in the currency markets to keep the Yen weak. This has fuelled asset price booms in everything from New Zealand property to modern art. This policy sees Japanese citizens shunning investment in their own country, preferring to borrow in Yen and place the money in high interest rate NZ deposit accounts.

It was the BoJ's inflationary loose-lending policies that caused the original bubble, the very same policies are unlikely to also be the solution, and help explain "the lost decade" from which the country has never recovered.[/quote]

Everyone can be choosy about the facts they pick, so let’s have a go at where they are in 2007 for Japan as it sounds very different to our own.

Unemployment - 4.4%
Total population 127 million (workforce 66 million) Growth of pop 0.1%
GDP growth - 2.7%
GDP per capita - $38,341
Inflation - 0.1%
FDI - increasing monthly
Exports in June 2007 - 6.69Y trillion
Imports in June 2007 - 5.90Y trillion

A more self sufficient economy not reliant on China to dampen inflation (well there's a lot of history there). I'll give you the point about the carry trade versus toxic debt but this was greedy bankers and hedge funds being inventive to make money - as always these people make mistakes eventually and get bailed out by governments e.g. NR.

Now where is the problem with their economy? I personally think our model is in deep trouble since China is exporting inflation through wage demands. Also what happens to the Chinese system when it explodes – it’s a capitalist system on acid. Each week there are 300,000 new day traders who sign up into a market whose P/E is making the dot.com situation look reasonable. What happens to our types of economy if there is a blip – Japan will not suffer the same fallout?
 
MichaelDes said:
Everyone can be choosy about the facts they pick, so let’s have a go at where they are in 2007 for Japan as it sounds very different to our own.
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I was not trying to compare the health of the Japanese economy to our own, merely pointing out that your example of an economy with the right amount of government intervention in the markets leaves a lot to be desired, given the BoJ's role in sustaining an unsustainable asset price boom and their hindering of any subsequent recovery.

It is also illogical to blame hedge funds for borrowing money that the BoJ was offering to them practically for free.
 
room305 said:
It is also illogical to blame hedge funds for borrowing money that the BoJ was offering to them practically for free.
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Very true room305 - you can not blame the hedge funds etc, they are only making money, it's a capitalist system afer all. But all I am trying to point out is that certain economies went down the drain but have reinvented themselves, without doing so on the back of excess consumer expenditure. I think 70% of the Irish economy is great but the rest needs re-evaluation. Food, Tourism etc are all major USP's etc but we need to get rid of the reliance on construction at 21% GDP. It is to high by at least 11 of these percentage points. If this can be curtailed without causing trouble and wage inflation controlled we may have an easier ride in the global markets and avoid any upsets.
 

My thoughts exactly! I was very disappointed at last nights programme.
 
I watched last nights program and again i didnt hear anything i didnt already know, and i was waiting for some practical advice ie: what i should be doing to safeguard my future , again nothing
maybe you have to buy the book for all the good stuff
 
Sarsfield said:
My thoughts exactly! I was very disappointed at last nights programme.
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Ditto. The programme took a 20 minute point and expanded it out. There were no solutions. Anyone can report on what the fault lines are but how to fix them is another thing. But overall how do we land the economy towards sustainable stability? Hopefully he'll enlighten us further.
 
MichaelDes said:
Hopefully he'll enlighten us further.
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From what he's being saying so far it might be to sell our houses and invest in the chinese stock market!
Hard to see how there's going to be any easy fixes, as investing in education and indigenous intellectual property take time to produce returns.
 
He's been going on about this for so long, I am living in hope that he is building up to a bumper episode (and maybe a book) about what we should all be doing to survive in the new global economy. I was ready to enroll in Chinese lessons after watching last night!
 
I think the programme was useful, at least to spark debate on the issues, which has certainly been the case on this forum. While I agree the programme was a little wide of the reality mark we all must agree that property speculation and the explosion of personal wealth statements (SUV's etc) has become a little sickening of late, (personally I think that anyone with an SUV should actually park it 'off-road' and leave the legitimate spaces for everyone else!)
I think he is right insofar as it's time for a reality check.
 
I just took a flick through is book, and crikey it is so full of these god-awful phrases he keeps trying to coin...botox bettie/bono boomer etc. I like him but all that annoys me. He was so much better when he was interviewing people.
 

Granted China has made huge strides in recent years and is now a global force to be reckoned with and will continue to be. However, it has many flaws and weaknesses of its own and is storing up some big future problems which David McWilliams fails to mention. A more balanced view with his Chinese love-in wouldn't go astray. He makes many valid points but in his quest to prove his point goes a bit overboard on the hyperbole imo.
 

Very true, also fails to mention India, which is hurting China and is a threat to stealing middle class incomes in Ireland. I know its mentioned in earlier threads. Many other emerging markets affecting China such as Pakistan etc too. Quality coming out of China is terrible, many factories sub contract to smaller street factories with no quality control system. The Mattel is the tip of the iceberg, CEO of main supplier committed suicide (3 weeks ago) due to their subcontracts leading to major errors. My brother is a Quality Control Direction in Asia, of all the countries, China is acknowledged by him as one of the worst. It is not the only beacon that should have been used in Mc Williams progamme. It will take them a lot of years to up their quality control at which time it will no longer be as low cost a country - whilst Indonesia will continue to be.
 
Slightly off-topic, but I remember when I lived in the US I was always buying things that were breaking - lights, alarm clocks, cd players etc. The common link being that they were all made in China! After I clocked this, I never, ever bought anything that was made and China and still don't. Occassionally when it happens accidently (usually because the company is Japanese etc. which manufactures in China) I am amazed if the damn thing doesn't break which is about half the time.
 
Calico said:
I just took a flick through is book, and crikey it is so full of these god-awful phrases he keeps trying to coin...botox bettie/bono boomer etc. I like him but all that annoys me. He was so much better when he was interviewing people.
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Ya - I'm teh same. It annoys me too - It's like he goes out of his way to introduce these phrases.

However - in his defence - using these names is a convenient way for him to revert back to a character described earlier on in the book such as 'botox bettie' etc.
 
Very interesting programme about the Diaspora. Israel is punching its weight very highly on the world stage (no great fan of theirs etc). The country is ranked 18th globally on GDP per capita with a country that has 1.5 million more than ours (as an island that is). Irish seem to be well liked and bi-partisan and this has a lot of mileage. Passports should be given to those shown in the programme; it would have benefits to our economy and spread the love of Guinness guzzling etc. Whatever your views of David Mc Williams, I think he has to be congratulated for causing us to think outside the box - if he sells books on the back of it, good luck to him, he's contributing to the taxes. (or is he exempt for writing it under the artist tax breaks).
 
MichaelDes said:
Israel is punching its weight very highly on the world stage (no great fan of theirs etc).
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Israel despite having 0.001% of the worlds population has received over a third of all US foreign aid . Thats impressive.
 
blondebimbo said:
Israel despite having 0.001% of the worlds population has received over a third of all US foreign aid . Thats impressive.
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Blondebimbo. You can either be cynical and take side swipes at the issue such as Israel (every knows about foreign aid argument plus others). But it has one the highest level of business startup's in the developing world. Putting that aside, is there any point in using diaspora, or is it a watse of time?
 
I think the notion of giving them passports is a good one. Our culture is in danger of being consumed and diluted by the recent social shift in the country. Foreign workers and wealth have caused it and I think the rugby team is the embodyment of it.

To continue the analogy if the team was ireland and the fans the diaspora then the absense of a flag and national anthem left the fans thinking that what they were supporting wasn't exactly what they had signed up for. They traveled expecting a traditional irish team to be full of fire and brimstone, instead they got a team with a more dispassionate "professional" outlook and ultimately it wasn't loosing that got to the fans but the manner of it, the absense of a soul.

It would be the same for returning diaspora who live a dream in the US or Argentina who all of a sudden we give a passport to and when they arrive instead of a thousand welcomes and people unshakably possitive in outlook they get met by eastern europeans and a Irishness that is not quite what it was.

Anyone with relations abroad who came to visit during their holidays will remember the fuss their mothers would make getting the house clean and making sandwiches or a meal for the arrival of the relations.

I think we too would need to get the sandwiches ready and clean the house before we could expect to receive diaspora.

How much better would our tourisim industry be if the reception desks of our hotels were staffed by a young Argentinian who is here to learn "Irishness" but is passionate about their Irishness and not some migrant worker. There is absolutely nothing wrong with eastern europen or any other nationalities working in Ireland. They are here for economic reasons and not becuase the love Ireland.

Who knows, maybe the diaspora are exactly what we need to help us re-focus our minds on Ireland again and not just on pimping ourselves out to multinationalism to the extent that we are willing to become more generically european at the expense of our Irishness. This means we have diluted our unique selling point and are competing on a level playing feild.

Playing the Irish card to a diaspora who have experienced Ireland to be everything their parents told them it would has to tilt the balance in our favour. It would be like playing downhill with the wind on our backs and the fans singing the feilds of athenry all around us.

Sure we couldn't loose.
 
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