Nicholas Kristof wrote in the New York Times this week that Richard Fuld, the longtime chief of Lehman Brothers took home nearly half-a-billion dollars in total compensation between 1993 and 2007.

Last year, Fuld earned about $45 million, according to the calculations of Equilar, an executive pay research company. That amounts to roughly $17,000 an hour to obliterate a firm.

Fuld was a hired hand like many more of the modern day plutocrats, Stan O'Neal who doomed Merrill Lynch, walked away with a cool $161 million.

The "rainmakers" earn huge bonuses selling toxic products that they don't have to repay when they are exposed as duds, while the lives of many colleagues have been ruined.

The top earning US hedge fund manager John Paulson earned a record $3.7 billion in 2007 to top Alpha Magazine's annual ranking of the 50 most highly paid hedge fund managers. The Paulson & Co. head overtook George Soros and James Simons, who ranked second and third, at $2.9 billion and $2.8 billion, respectively. The top 25 on the list earned an average $892 million, up from $532 million in 2006.

That alas, was just part of the greatest credit bubble in history.

Financials as a percentage of S&P 500 market capitalisation rose from 8% in 1990 to almost 25% at the height of the housing boom and in recent years, the cut of the Fed's federal funds rate to 1% facilitated the out-of-control asset boom.

With Washington calling the shots in the foreseeable future, the industry will surely shrink as the global economy gradually recovers from the downturn.

Dublin's International Financial Services Centre(IFSC), which has 22,000 employed, has benefited from the boom but should expect collateral damage.

Dell Computer, Ireland's largest merchandise exporter, is expected to close its manufacturing plant in Limerick with the loss of up to 3,000 jobs and an ailing British economy remains the main market for exports from Irish-owned firms.

Chris Giles, Financial Times Economics Correspondent, wrote on Thursday: "If all the news was not gloomy enough, signs are increasing that something bigger is going on than a cyclical downturn. The fear is that recent rapid growth was a temporary purple patch and the underlying potential of the economy is weaker than thought. While inflation was low and stable and the economy was growing quickly - at a rate close to 3 per cent a year in the past decade - domestic costs and inflation were nevertheless rising, far above the 2 per cent inflation target. Strong sterling, weak import prices and favourable headwinds from globalisation, including an immigration boom, allowed the economy to grow fast without inflation taking off.

But those days appear over. Sterling's decline and the end of cheap imports seem to have reduced the rate of growth that is consistent with stable inflation. This change is reflected in economic forecasts, such as those from the Bank and the CBI employers' organisation, which show that a year of stagnation is required to eliminate inflation and that the subsequent pick-up will be lukewarm.

If true, the consequences will be profound. For many households, the level of debt they have taken out will be too high if their incomes grow more slowly than they had hoped. For the government, the effect will come through a permanent deterioration in public finances.

Yesterday's government borrowing figures showed revenues struggling against still strong public spending. On estimates from the Institute for Fiscal Studies, public borrowing is likely to overshoot government forecasts by almost £30bn, putting the deficit at 4 per cent of national income in 2010-11."

In coming years, a nice earner for the Irish Exchequer is likely to come under attack.

The US Treasury has requested a renegotiation of a taxation agreement in respect of Irish-based US multinationals.

Companies such as Microsoft and Pfizer route revenues from other overseas units to avail of the low corporate tax rate of 12.5%.

In November 2005, The Wall Street Journal wrote that "a law firm's office on a quiet downtown street [in Dublin, Ireland ] houses an obscure subsidiary of Microsoft Corp. that helps the computer giant shave at least $500 million from its annual tax bill. The four-year-old subsidiary, Round Island One Ltd., has a thin roster of employees but controls more than $16 billion in Microsoft assets. Virtually unknown in Ireland, on paper it has quickly become one of the country's biggest companies, with gross profits of nearly $9 billion in 2004."

Flat Island Company made a profit of $802.4 million in 2004 on sales of $2 billion, but paid no tax. It issues licences for software in Europe, the Middle East and Africa.

Recent data on these companies isn't available as Microsoft has converted them to unlimited companies and is allowed to keep the results private.

There is much hope that service exports will sustain Ireland's economy but at official level, it's considered good marketing not to distinguish between the overwhelming dominance of US firms and the small number of indigenous exporters.

The Minister for Enterprise, Trade and Employment, is responsible for industrial and service sector policy. It has been almost 14 years since a politician with business experience, has held the portfolio. 

The current incumbent was a social worker and she was preceded by two former schoolteachers and a lecturer.

There are currently 4 ministers in the Department.

The Senior minister has the important job i.e for public relations purposes, of making jobs announcements on behalf of American firms. The other 3 ministers spend most of their time, making speeches at conferences.

After spending €8.2 billion of Exchequer funds, the goal is that: "Ireland by 2013 will be internationally renowned for the excellence of its research, and will be to the forefront in generating and using new knowledge for economic and social progress, within an innovation driven culture."

Nobody knows what the criteria are for the exalted state. Forfás the science policy advisory agency, isn't even tracking the commercialisation of university patents.

In the 15 years of the Celtic Tiger, the personal windfalls from the boom, went to commercial property investment.

Irish investment of €13.9 billion was put into European property deals last year. In contrast, the Irish business sector does not even get a total of €200 million in venture capital investment.

The depressing aspect of policymaking, is that the managers at the State enterprise agencies appear to be cheerleaders for political marketing spoof.

How can credible policies be developed if marketing spoof that obfuscates reality, goes unchallenged?

During the boom, only a handful of Irish firms, made an impact internationally while US firms were overwhelmingly responsible for the diversification of exports from a historic dependence on the UK market.

In simple terms, whose interests are served when Microsoft exports from Ireland are claimed as an "Irish" success in the Chinese market?

Now that the boom is over, spoof certainly doesn't help the Irish economy.

The term "tectonic shifts" was liberally used this week.

There will be no worthwhile reform in governance, the public service, sheltered areas of the private sector and the land rezoning system that adds to poor competitiveness.

Neither is there a silver bullet for the export sector.

However, the "it will be awright on the day" approach, is hardly the best response to the rapidly changing international environment.

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