Stop equating to the 1980's recovery

[JoeRoberts]

I hear far too often that we got out of the mess in the 80's so therefore we can do it again. I can see no comparision.

After the problems of the 80's we had a few major events that lifted us.

1) A major social pact ( national pay agreement) which traded pay restraint for tax cuts. The tax cuts element of this now has to be reversed.
2) A once-off influx of very big multinationals in the late 80's early/mid 90's employing very large numbers in manufacturing - helped substantially by #1 above - jobs announcements of 1000 and 2000 were common place - this will not happen again as we are too expensive.
3) Establishment of the IFSC
4) A large investment from the Eu structural funds in the early 90's - approx 6 bn I think - this will not happen again
5) Large numbers of returning emigrants who had done well abroad and had some money to spend here - we won't see these again
6) A big increase in tourist numbers in the 90's , particularly from the UK and central Europe for short breaks - this brought in a lot of extra revenue. Much of this increase came from people who had money to come and see the "Ireland that won Eurovisions" but who now realise that we are a nation who lost the run of ourselves when we got a few pound in the Celtic Tiger.

I believe our natural unempoyment rate is where we are now - around 12% -13 % - it was skewed for a few years by abnormal numbers employed in construction and related spin-off jobs. The large scale jobs lost in companies like Dell are gone, and gone forever. Service industries and the "smart economy" if it ever develops can never replace quality manufacturing jobs that result in a big downstream jobs spin-off.

I just feel very negative.

 

[tiger]

I just feel very negative.

Me too.

Despite the 'final' figures this week, I don't feel we've hit bottom yet or seen the worst.

There was no discussion of NAMA this week. Effectively we/the govt now own about €40BN of assets that we might never be able to sell.
Also, how many loans are interest only or even still rolling up interest. Eventually time will have to be called on these.

 

[RMCF]

I think one of the main things that we need to address if we are to start recovering is our cost.

We are a scandalously expensive place in terms of costs and wages etc. These were allowed to rocket in the boom times when no-one was bothered, but now its a rock around our necks. The wages have to come down, end of. But it will be so difficult trying to persuade the unions about this. I think the next 4 or 5 budgets will have to address wages, and by natural process the prices will have to fall as well.

Although we are all feeling negative now, you really have to hope things will get better. I do worry that if corporation tax is raised we mind see a gradual exodus of the huge companies, which would be disastrous for our economy.

Irish people used to have so much spirit and fight in them, but you just feel now that most people are broken and find it hard to see any point in trying to get our of this mess.