Irish Economy: In a week when public sector staff went on strike and Central Bank staff also went on strike for a second day, on Friday, a citizen contacted Finfacts and wrote: "Please can you tell me are all the other economists in Ireland dead? Do we have to listen, see and read Jim Power all the time, when we turn on the radio, watch the TV, internet sites, read the newspapers? I am so sick of his whingey, whiney voice.
Please spare us."
In a profession with no shortage of egos and some with money to make from recently published books, it may seem a little deflating that financial services economist Jim Power can seem to be the only economist with a firm grip on the public megaphone. Power has emerged as the least compromised of economists in his sector but of course, he inevitably has to be choosy with his targets. He is of course not going to bite the hand that feeds him and that can often be ignored by media conduits and the public.
The outpourings of economists, in particular media commentators, can be confusing for the general public, not least because some of the bitching can be somewhat oblique.
Last February, in the Sunday Independent, NUI Galway economist and currently adviser to the Minister of Finance, Alan Ahearne, wrote: "Rhetoric aimed at pitting private sector against public sector is dangerous. A statement this week by one commentator (and you know who you are) that 'every five private sector workers (sic) carry one public sector worker on their backs' is a prime example of this divisive claptrap."
But did the readers know?
In September, media economist Marc Coleman wrote: "The West-Brit commentators who now oppose Lisbon have always hated the Irish language and our native traditions" - - presumably his colleagues at Independent Newspapers -- Bruce Arnold and Kevin Myers.
As for substance, on Sunday, in the Sunday Independent, Marc Coleman praised both the prudent Ruairi Quinn and his successor as Minister of Finance, Charlie McCreevy: "But for all his faults, McCreevy ran budget surpluses in almost every year as Finance Minister. And whether you agree with McCreevy or Quinn on taxes, one thing is clear: both eras -- Quinn's from 1994 to 1997 and McCreevy's from 1997 to 2004 -- were infinitely superior to what followed."
It's quite a weird view that the rot only set in when Bertie Ahern became a born-again socialist and consigned McCreevy to Brussels.
But maybe Commissioner Charlie McCreevy's imprimatur on Coleman's new book must explain the situation: "First class analysis and full of original thinking on the way forward. A 'must read' for policy makers and decision takers alike."
There may have been a more objective view in the Sunday Times: "Ray MacSharry, the former finance minister credited with restoring order to the public finances in the late 1980s, has blamed Charlie McCreevy, his successor and fellow Fianna Failer, for blowing the boom.
'There was an attitude expressed - - I think it was by Charlie McCreevy - - that, when the money’s there, we’ll spend it. In my view, that was short-sighted,' MacSharry said in an interview with The Sunday Times.
'Everybody who sat back and examined it knew you couldn’t continue at that level of growth. It couldn’t last for ever. You could not see the prices of things going up indefinitely. There had to be a check, but there was excessive expenditure by government. The world order was there, of course, but that doesn’t absolve us or government of guilt.'"
Also in the Sunday Times yesterday, economics commentator Matt Cooper wrote: "In time we may find that joining the euro was one of the greatest economic mistakes ever made by this country.. .Because our currency has not been devalued this has made it extremely difficult for our exporters to sell profitably into the UK which remains, for many, their principal market."
We know of course that the people who agreed to the rules of joining the euro club, did not comply with them once the currency was launched.
McCreevy gave the two-fingers to the European Commission and European Central Bank in 2001, when they called for restraint. His position had strong public support.
Finfacts articles:
The 2001 economic consensus that paved the road to economic ruin
Irish Central Bank declared its impotence before launch of the euro; Why Spain's biggest banks survived huge housing boom
Ireland exiting the euro and the risk of setting the Irish economy on fire
Cooper writes as if the UK market is the still the principal market for Irish exports. It is the Eurozone and this market will get bigger in coming years.
To argue that at a time of an international credit boom, that the politicians who ruined the Celtic Tiger, in operating outside the Eurozone, would have in contrast with counterparts in Iceland, behaved prudently and tolerated an independent central bank, is a fantasy.
Cooper concludes: "Some commentators have suggested that the only way to solve our economic problems is by leaving the euro. Unfortunately, that is not really an option."
The reference is to economist David McWilliams.
The limitations of chairborne economic commentators is illustrated by Pat McArdle, former chief economist of Ulster Bank, in the Irish Times today, where he writes that to export our way out of recession we will have to go after emerging markets.
McArdle contrasts the expected high growth rates in emerging markets, with the sluggish outlooks in Europe and the US.
He says:"The message is: go east young man; or at the very least, make Mandarin compulsory in the school curriculum.
After China come India and the rest of developing Asia; together, they account for another quarter of world growth."
It's only people who have worked in these markets, who can understand the challenges.
Two weeks ago, Irish companies were warned by several senior executives who run some of the country's most successful companies, to be cautious about expanding into emerging markets and focus instead on big and developed markets.
"More fortunes have been lost than made by getting in too early," former CRH CEO Liam O'Mahony told a conference on making businesses international at UCD's Michael Smurfit Business School.
O'Mahony, who ran the world's second biggest building materials company from 2000 to 2008 and now chairs cardboard maker Smurfit Kappa, said Irish companies should consider expanding into the US, UK and other mature markets before looking at countries such as China. "Some of these markets are very large and there is still scope to grow as long as you have value propositions," he said.
Mahony's advice was repeated by Glanbia chief executive John Moloney and Glen Dimplex boss Sean O'Driscoll. "China is a long-haul, a slow-burn," O'Driscoll said.
There is a market bigger than that of the US, on our doorstep with the advantage of a single currency - - the Eurozone of 16 nations.
Few Irish-owned firms have taken advantage of the opportunities. Wouldn't it be a good place to start? At least, most people have heard of Ireland, there.
