Irish economy - back to the future with farming

Anglea Merkel and Nicolas Sarkozy — Merkozy
Photo from Die Welt

If you cast a casual glance at the business pages or one of the business news TV networks (CNBC, Bloomberg, etc) you'll know that Europe is somewhere between financial trouble and a complete, 100% total catastrophe. Here in Ireland we're not much more than spectators as we watch our small, almost insignificant economy - although one that has borrowed way beyond its weight - being whipsawed around while we wait for Angela Merkel and Nicolas Sarkozy to get control of the runaway stagecoach that the euro has become.

While Merkozy (get it? Clever, no? It's not mine.) dither over whether to rescue the Greeks and save the euro at great cost to their own people or to cut Greece loose and risk losing the euro at great cost to everyone else we in Ireland just keep cutting costs in a bid to balance our budget and start repaying the massive debts run up by our 'live for today' banks and our 'tomorrow will never come' government.

Economically it's a very dark day. And yet, and yet, and ... There are some shafts of light starting to break through the dark cloud above us.

First, as my mother likes to say, misery loves company. That so many other European countries are now facing something of a crisis, including big boys Italy and, maybe, even France depending on how big a hit their banks have to take if Greece does have to 'restructure' its debts, has opened up the possibility that our bank debts might be 'Europeanized.' That is, the debts of all of Europe's troubled banks might become the responsibility of the EU as a whole, and not just the individual state's. That would be great for us if it happened because, well, our banks were more profligate than any other state's.

Even without the 'Europeanization' solution the debts issue is not quite as serious as it seemed a few months ago. Sure we still owe far too much, but maybe not quite as much as we feared and our paymasters have been cutting us some slack on the interest rate on our debts. That's all to the good.

Every penny saved on the interest bill is a penny that doesn't have to be cut from the day-to-day spending by the government. And there have been cuts. Serious cuts. Painful cuts. The kind of cuts that make people angry. The kind of cuts that have led to riots and strikes in Greece and Portugal. Yet here all is calm. It hasn't gone unnoticed.

The past few weeks have seen a surge in positive commentary on Ireland's ability to bear the pain of austerity. Yesterday on Bloomberg currency expert Richard Franulovich proclaimed that "Ireland is the one shining example where the austerity is playing out and they're meeting targets." Over the weekend a CNBC report noted that Ireland may be ready to exit the PIIGS - Portugal, Italy, Ireland, Greece & Spain. Before that we had the Financial Times declared that Ireland is "nursing itself back to health."

A couple of straws in the wind. There is still a long way to go, but it's a solid start.
____________
Read More:

Radical reform needed in economy says business chief

Massive rise in emigration as 40,000 left Ireland in 2010

Irish Government to open a new Toronto offices as emigrants continue to arrive
_____________

Great, but where is the economic growth going to come from? Well, exports are booming. Although the property-fed bank disaster has seriously damaged big chunks of the Irish economy, there are some industries that have made adjustments and kept on going.

Pharmaceuticals and information technology are two key industries that are still producing, still growing despite the difficulties here. In fact, I heard recently there are thousands of unfilled jobs in IT despite the lengthy unemployment lines. Those jobs are in Irish companies, not the big American names such as Google, Microsoft, Facebook and Intel. Enterprise Ireland, a government body, has even produced a video to entice workers into the field.






Tourism is also expected to be a big winner, but possibly the most unlikely source of future growth is agriculture.

Farming. It's almost unbelievable, but farming is a great growth industry in Ireland. Unbelievable because if you listen to the farmers they haven't had a good year since the wheel was invented, but at the moment farming and related businesses are a big part of what success we have.

Farming may sound old fashioned and an unlikely growth industry, but it is. Agri-foods is the term used today and agrifoods are booming: 150,000 employees and 19% annual growth.

China's importing a lot of baby formula these days and 60% of the world's baby formula comes from Ireland. That's agri-foods. Not just milk production, but a product made in Ireland from Irish milk. There's a great future in all sorts of products built around our dairy and other farming sectors.

India, China and North Africa are buying a lot of Irish beef. Milk and meat, growth products in the global food business and two products for which are our climate and soil are ideally suited. There is no good reason Ireland cannot be a world leader in milk and meat production.

Farming is also part of the knowledge economy. The urban stereotype of the stubborn, aging man meandering behind a handful of cows is out. Demand for places on Agricultural Science courses is rising rapidly. Tomorrow's farmers will apply the lessons of science and marketing to ensure Ireland's agri-foods business produces products that compete in the global food industry. The future is actually fairly bright - once we've conquered the debts of yesterday's failures.

A student loan scheme - too optimistic for Ireland's government

Minister for Education Ruairi Quinn

Ireland's new government, elected in February, has been a little less guilty of making ridiculously optimistic statements about the Ireland's future than their predecessors, but they have hardly eschewed the tactic. Every so often they trot out a line or two about how the economy is improving, things will get better, etc.

Well, all of the government's manufactured optimism and bluster about the future was blown away in one remark by the Minister for Education in a statement about the return of college tuition fees. Ruairi Quinn announced that the era of tuition‑free college is coming to an end. Fees have to return because the costs of providing free college education are just too great for a state that is only a hair's breadth away from Chapter 11.

I can't argue with Quinn, although with one daughter in college and another soon to be going, I'd love for the tuition to remain zero for a while longer. However, tuition‑free college is one of the many luxuries that post‑Celtic Tiger Ireland cannot afford.

So tuition is coming back, fair enough. What's really telling, however, is that not only is the government going to reintroduce fees, but they are not going to introduce a student loan scheme – such as exists in America – in order to help students and parents meet the new costs. According to Quinn such a scheme wouldn't work in Ireland because the "student loan system would, in my view, become an emigrant incentive."

"An emigrant incentive." In other words, those students who borrow money to get educated in Ireland could not possibly be enticed to stay. No, emigration will allow them a virtually pain‑free default and offer a more attractive option than remaining in Ireland and repaying student loans.

The thing is, I doubt many Irish people would disagree with Quinn. That's how bad things are here now. At the same time I can't imagine any American politician ever being so negative about the future of America, even in these challenging times.

Imagine for a moment an Ireland where life is so attractive that students want to live here after graduation. Imagine an Ireland where even those who would like to experience life abroad repay their student loans because they assume they'll return to live out their days in Ireland. Imagine an Ireland where jobs are plentiful and wages sufficient so that graduates see their student loan repayments as a cost that can be borne. Imagine an optimistic Ireland.

We caught a glimpse of what such an Ireland might look like during the Celtic Tiger years. Unfortunately the optimism of the early Celtic Tiger years morphed into a heedless utopianism. Free college education was an early example of that utopianism.

Now, according to Ruairi Quinn, not only is the Celtic Tiger dead, but so are optimism and hope. The best we can hope for now is that the emigrating young go with the minimal state support behind them. They're going to leave anyway so make them pay up front for anything they get.

Ireland and global warming – electric cars, but colder winters

In April 2010 the Irish government announced a whole series of measures that would ensure that battery‑powered electric cars gained a significant share of the car market here. Like Dylan at Newport, Ireland is going electric.

The government's plan includes significant investment including: tax breaks to cut the price of electric cars, charge points provided by the government-owned Electricity Supply Board {photo} and other incentives to encourage the purchase and use of electric cars rather than the gasoline/diesel models we're all used to now. The goal was that 2,000 electric cars would be on the road by the end of 2011 and 230,000 by 2020.

I've indicated before that I'm not totally averse to the idea of a battery-powered car, especially as a second car, but I'd forgotten all about the government's plans for electric cars until last week. I had just parked my car in Dublin Airport's new parking garage when I noticed that the three spaces next to mine were reserved for electric cars, that in fact such cars' batteries could be charged there.

The very next day I saw my first new-generation electric car, a Toyota Leaf. It was in front of me as we headed down the highway. And, although I haven't noticed them yet, the ESB has installed charge points all over Dublin. That's probably my fault because I haven't been looking, from what I hear they look like parking meters and would be easy to overlook.

Charge points around the capital city, dedicated spaces in a public parking garage and electric cars on the road, the government's plans are probably progressing just fine, right?

Maybe, but Dublin Airport and ESB 100% government-owned. They'll do as their owner instructs. The one car I saw still had dealer license plates. I haven't seen one for which a buyer has shelled out $43,000 (after tax breaks) or so.

Will the government's targets be met?

I don't know, but ESB's web site says the plan now is only for 1,500 charge points nationwide by the end of 2011. I'd love to know how the sales of electric cars are going and how many people have had charge points installed at their homes.

More important than the targets, however, is whether this is money wisely spent?

All of the incentives and investment from the government are for one reason: to combat global warming. Maybe the earth is warming up and maybe it's not, but last winter Ireland experienced its coldest winter in 40 years and the long range forecast is that the coming winters will be even colder. Our climate seems to be changing for the colder.

All of which begs the question: is all this taxpayer-funded investment in electric cars the best use of funds if our winters are getting colder? Using the same funds to properly insulate our homes and offices seems more sensible.

In fact, it's possible that the money spent in getting electric cars on the road will seem like a a colossal waste of money if we still don't have the necessary equipment to keep the roads clear when it snows. The fact that a few happy electric car owners can charge their cars for free at Dublin Airport will seem like a sick joke if the airport shut for days on end again due to the lack of proper snow-moving equipment.

Even our European overlords, who are heavily promoting the 'green agenda', will be none too happy if our national coffers suffer another let down due to the fall-off in productivity caused by a few inches of snow. It could be a chorus of boos for the government just as it was for Dylan at Newport all those years ago.

{Photo thanks to ESB.ie}

Guinness should not cost more in Dublin than New York

Two weeks ago, after taking a big sip from his pint of Guinness President Obama declared that we were "keeping all the best stuff here." It was a point on which everyone apparently agreed.

Imagine how much more interesting Obama's visit would have been if he had done a double-take on being told what his pint cost. I don't know what they charge in Ollie Hayes's pub in Moneygall, but probably around €4 ($5.75) a pint. The last pint I had in Dublin I paid €4.35 ($6.25) for it.

Last week I found myself in a bar on Broadway in the Bronx with a few friends. I ordered three pints and did a quick calculation in my head. I figured the pints would be around $8 each and had $25 in my hand.

I couldn't believe it when the bartender asked for $12. I actually said, "No, I'm paying for all three." She confirmed that $12 was the right price, that the pints were $4 each (€2.80).

It was a Happy Hour special, she explained, the regular price for a pint of Guinness is $5. That's not quite €3.50. I doubt you can find a pint of Guinness for €3.50 anywhere in Ireland.

How can this be? I've often acknowledged that the taste of Guinness is better here, suggesting that it doesn't travel well. No matter how it's traveling it cannot be traveling more cheaply to the Bronx than it is to Dublin's pubs.

Every week or so there are articles in the newspapers about how the pubs are struggling to make ends meet. There are all sorts of reasons pubs are having trouble surviving, but I doubt an excessive profit margin is one of the problems. I doubt they're taking a significantly bigger share on a pint than are their Bronx counter-parts.

That leaves only the taxes. The tax on a pint of Guinness must be far greater here than it is in New York. I suppose it's not entirely a bad thing - there are definitely too many people here who drink too much.

However the government promotes the pub as an essential aspect of our tourism offering. If the pub was not so important we would not have seen President Obama having a pint in one.

So if the government wants pubs to - at a minimum - be profitable concerns, to be open for tourists who have heard about the good times a pub can provide, surely they should do what they can to ensure that the price of a pint of Guinness is not higher in Dublin than it is 3,000 miles from here.

The price of a pint of Guinness is an easy to compare cost. Every tourist who pays more for one here than he does in New York or Boston or Chicago (maybe even at the President's local) will be struck by a simple thought: "Ireland is expensive." That's counter-productive.

There may be ten reasons why Guinness tastes better in Ireland than elsewhere, but the price sure ain't one of them. We have to fix that so that tourists can enjoy the excellent taste without the bitter aftertaste of knowing they overpaid for that pint.

Hero-worshiping Obama is not the answer to Ireland's problems

It seems everyone in Ireland is feeling great about themselves after the visit of President Obama yesterday. It was the ultimate feel‑good day, with the most powerful man on Earth and "coolest President ever" shaking hands, kissing babies and schmoozing with the Irish people for a few hours.

The President delivered a speech in front of tens of thousands at College Green in Dublin, a beautiful, mostly sun-drenched setting that looked spectacular yesterday. The speech itself, however, was pure cotton candy: tastes good, but when you try to swallow it there's nothing there. If you read it, rather than listen to it, you'll see what I mean.

Yesterday I said it would be "mostly feel-good platitudes and little else." Platitudes may be not quite right, but feel-good Irish-America boilerplate surely is. Yet, that hasn't stopped people describing the speech as "inspiring" and "electrifying."

If people were inspired that's great, but it was a transitory moment. The Obama-high will quickly pass. He won't be back until after he's out of office. He will be very little help to the people of Ireland, who are in the middle of the worst crisis since the early 1920s. He is, after all, the President of the United States. It's not his job to help Ireland.

Yet all over America - and in Canada and Australia and elsewhere - there are people who have a deep affection for Ireland, who can and will help Ireland. People of talent and experience. Creative, clear-thinking people who do actually understand Ireland, have ideas that could help the country and should be taken seriously when they say they want to help.

A week ago one of those people, former San Jose Mayor Tom McEnery offered a critical analysis of where Ireland is now and where we are heading. He also offered three concrete suggestions as to what we should do next.

McEnery's plan is to utilize the diaspora, don't "lose them in a jumble of compliments and forums." McEnery says we should put a successful Irish-American, like Intel's retired CEO Craig Barrett, in charge of Ireland's development agency. It's a fantastic idea.

The doors that are already opened to someone of Barrett's stature, the knowledge and experience he would bring to the table and the common language Barrett shares with the heads of those businesses we need to target for investment would be massive advantages for Ireland as it competes with other EU nations for American and other inward investment.

McEnery {photo} has other ideas on a global Irish entrepreneurs support system and a role for committed, successful Irish-Americans (and others) in the Irish legislature - a revised version of the current Seanad (Senate), the weaker upper house of the Irish parliament.

McEnery's call to action deserves attention, but I fear it has fallen on deaf ears. Such proposals are a challenge to those currently in positions of power here. They also represent a gamble for all, a leap of faith in those children and grandchildren whose stories were cheered yesterday.

The Obama visit was a fleeting moment. It's over and the problems here remain. McEnery is talking about something long-lasting, with the potential to generate work and wealth, to lift the Irish people, possibly save them the fate of another lost generation and to begin to build the broader, non-geographical linked-up Facebook Irish nation that will benefit those "away" and "at home."

Yesterday was a dream day in the middle of a long nightmare. Now as the dream fades the nightmare looms again. It's time to wake up, get to work and grab the helping hand being offered. It's long past time Ireland brought the diaspora on board to help steer the ship. Things could hardly be worse, but the talents and goodwill of the diaspora can lead to our best days.

{Photos from Google images and ITLG.org}

Tim Geithner helped sink Ireland

"France has no friends, only interests," said General Charles de Gaulle in response to a question from Winston Churchill. It's a telling reminder that in international relations it's one thing to talk about our "friends" in Europe or America or wherever, but quite another to believe such talk.

Saturday's Irish Times carried a column by economics professor Morgan Kelly in which he laid out the events that have led to our "economic ruin." If you've been following this story you already know that the Irish government and banks led us into an economic disaster and that the government then (& quite possibly now) didn't know what it was doing and made mistake after mistake.

Kelly not only points the finger of blame at Honohan for his "miscalculation," but also hints that Honohan undercut the Minister for Finance last November when he sided with his fellow Central Bankers on the European Central Bank Council rather than support the Minister who was refusing a bailout on onerous terms because he rightly understood that the goal of the ECB was to force us to take a bailout that they hoped would stop the panic spreading to other euro member countries.

Damning stuff. Arranged against Ireland were most of the power-brokers in the EU and ECB and, interestingly, US Treasury Secretary Tim Geithner {photo}. Kelly says that Geithner torpedoed efforts by the IMF to help the Irish government rid itself of the massive bank debts. In fact, Kelly says that "only one to speak up for the Irish was UK chancellor George Osborne," which goes a long way to proving de Gaulle right.

Ireland's only friend in its hour of need last November was Britain, although not because they love us but because a collapse here was more damaging to Britain than was the collapse of the euro.

I'm not in a position to argue with Kelly's analysis, but I'd like more than he gives me on Geithner's rationale for forcing ruin on us. Kelly implies that it's simply ideological: taxpayers should bail out failed banks. I'd love to imagine someone asking President Obama about this when he comes to be cheered on O'Connell Street and in Moneygall.

Why did his Treasury Secretary veto a deal that could have prevented ruin here? My guess is that European subsidiaries of American banks were afraid of the losses their European off-shoots would incur if euro members were allowed to restructure their debts.

Regardless, Kelly says that it is only a matter of two years or so before Ireland is bankrupt, at which point our reputation will be shot. We cannot recover. Eventually, we will be EU protectorate, "Europe’s answer to Puerto Rico."

We did this to ourselves, but we had help. Our European 'partners' and the European Central Bank were a big part of what went wrong here. And, as it turns out, the Obama administration played a role in twisting the knife when it was firmly planted in our backs. Et tu, Brute?

Stand silent for Ireland on Thursday

It's always easy to be cynical and believe me I can be good at it. So when I saw on Twitter (#IrishMinuteStand) that some people were trying to organize a protest against the bank debts that we the taxpayers of Ireland are expected to bear my initial reaction was to cringe. No one's going to pay attention and what good will it do anyway? This is just a pointless, possibly embarrassing, gesture.

The organizers want to highlight the people's rejection of the imposition of the debts of "crooked and incompetent banks" on taxpayers and that Ireland is being forced to "carry the full financial responsibility for saving the Euro."

The protest will take the form of a minute's silence at noon on St. Patrick's Day. {I presume they mean noon wherever you are, not 12:00 in Ireland.} The organizers are especially keen that parade organizers support them in their bid.

The cynic in me can't see that happening. I can't see any parade of size taking on a protest organized via Twitter. Besides a protest of such scale would need a lot more time to get it right. Twitter is fine, but it's not going to get a big parade to stop for a minute's silence. Such a protest needs organization, explanation and negotiation.

Still the more I thought about it the more I realized just how great such a protest would be. Imagine if Dublin fell silent at noon on Thursday. That would be great. But imagine if 5th Avenue fell silent on noon on Thursday. That would be powerful. What a TV moment!

That would be something else, something for Ireland's hangmen - Sarkozy, Merkel, Barroso, Trichet & Rehn - to ponder. At the moment it's not hard for them to ride roughshod over us because Ireland is a small nation. It would be great to show them that while Ireland is a small nation, the Irish are not. They would probably not be happy at being called out in Dublin, but I suspect they'd experience a cold sweat if they saw such a protest in New York.

The difficulty, of course, is that we (thanks to our elected officials) are largely responsible for the country's economic collapse. People here acknowledge that and we all know that those debts incurred by our feckless government's excessive spending are ours to bear. On our own.

What we reject is that those debts incurred by Ireland's banks, owed to German and French banks and other institutions are ours? Why should we pay for the bad loans made by those banks to our stupid banks? Why should we pay if Europe's regulators failed to act to stop what they could all see (more clearly than we could) - that entire country was becoming a property bubble?

Ireland's facing a generation of economic pain if the bank debts remain ours alone. The powers of Europe don't much care about that, however. They don't want their banks troubled; they don't want to be honest with their citizens about the role played by their banks in our problems; they don't want to ask their citizens to share the burden. All they want is for us to pay back those debts regardless of cost or morality. That is far more cynical than I could ever be.

Stand silent for Ireland on Thursday.

Ireland needs a new name

I was reading John Spain's column (here) and it occurred to me that really, we should change our name. Ireland should change its name. We should go into the nearest court and legally change the name of the country.

We should change the name of the country for so long as we're not an independent nation, but one that is in hock to the EU and IMF (mostly the EU). The so-called 'bailout' fund of €85bn ($117bn) that Ireland received from the EU/IMF back in November is no gift. It's a loan. One that has to be paid back. With interest. At a punitive interest rate.

The bailout is intended to ensure that the Irish people pay all the debts stupidly/recklessly incurred by Irish banks, who borrowed the money from stupid and reckless German banks. Yes, we are debt slaves who are being whipped into line by our EU masters in order to save the European banks. We are slaves or vassals as one Irish member said in the European Parliament recently.

So we should change our name to reflect our new status and, maybe only vaguely, to decouple the name Ireland from the mess our leaders got us into.

There is precedence for this. Back in the 1990s recording star Prince changed his name to an unpronounceable symbol {Photo} as the first step to his "ultimate goal of emancipation from the chains that bind me to Warner Brothers" when he was in dispute with the record company over control over his music and money.

Unlike Prince, who changed his name in an effort to emphasize that he was not the record company's slave, I think Ireland should change its name to do just the opposite: to ensure everyone knows we are slaves. Vassals of the EU.

So we should change our name to emphasize our new position as vassals, but to what?

I'm particularly drawn to EU-85. We owe €85bn after all. Or, now that Mr. Johnson of the Cincinnati Bengals is no longer using it, how about EU-Ochocinco? It's got a modern, hip sound, possibly too cool for a nation of vassals, but it also has that multi-lingual, EU feel that our slave masters are so keen on. And it beautifully sums up who we are today.

I can already see it at the airport: 100,000 welcomes to EU-Ochocinco.

Absent shoppers out of sight, soon out of country

You've read so many times about how bad Ireland's economy is that if you don't live here I'm sure you're sick and tired of hearing it. Well, regardless, it's true. Things are really bad here. The IMF bailout is only a part of the story. It's BAD.

Yet, yet, yet ...

Twice recently as I've walked around Dublin with my head up and eyes open (not always the case) I've been struck by how many people seem to be out shopping, spending money. Maybe there are fewer than in prior years. I don't know, but by no means is Dublin a ghost town this Christmas.

The streets were busy with shoppers, the stores seemed crowded - no way I was going into one of those! - and the people on the train had loads of shopping bags.

So what's going on? I don't know. I've heard people talking about this Christmas as a 'last big blowout' before they have to live with smaller 2011 paychecks (thanks to new taxes in last week's budget). I guess that's possible. I really hope it's not a case of the people following the government's lead, taking on more debt when they already have more than they can repay.

I don't really think that's the case. I think it's just a clear demonstration as to how uneven the pain of a recession (depression, really) is spread. This is a 'tough time' for Ireland, but for each of those who have lost their jobs or businesses it's a tragedy, a crushing blow.

There are tens of thousands of people in the Dublin area who have been laid off over the past two years. I presume they were not among the mass of people I saw shopping in the city. They're just absent, out of sight, possibly nearly in hiding. Soon they will be not so much out-of-sight as out of the country.

This is Ireland after all and many of these laid-off people will not be sitting around waiting for things to improve while their skills and self-esteem atrophy. They're heading for the exit. Niall O'Dowd's column on the two young women emigrating two weeks before Christmas speaks volumes. A gut-wrenching decision especially with Christmas looming, but staying was too big a gamble on their future.

Sure it's only one case, but one that's being played out time and again all over Ireland. We don't have the statistics yet, but everyone knows someone who has left or is going just after Christmas. The numbers leaving are significant and if things pick up elsewhere, the numbers will explode. The press in America, Britain and Canada is already noticing the increasing numbers of young Irish around.

For the middle-age unemployed it's a nightmare. Families are harder to relocate. My daughters know girls their age whose fathers are now working in Britain, France, the Middle East and traveling home to see their families when they can.

Many in the media speak about a decade of correction before the current problems are resolved. That's a nightmare without end for the middle-aged unemployed.

The economy is bad, very bad, but it's a lot worse for some than others.

Ireland needs ITLG's American optimism

Right smack in the middle of Ireland's jaw-droppingly doom-laden last couple of weeks there were a series of events organized by the Irish Technology Leadership Group. The ITLG is a non-profit organization of Irish and Irish-American Silicon Valley leaders whose objective is to foster links between Ireland and Silicon Valley that will help generate high-tech success stories for Ireland.

To make this happen the ITLG assists Irish companies with marketing, fund-raising, developing strategic partnerships and other key commercial tasks. In addition, the ITLG opened the Irish Innovation Center in San Jose. The IIC, which opened in March, affords Irish start-ups a space in Silicon Valley, from where they can establish links that will provide these Irish companies with access to technology and connections that are vital for technology businesses today.

The other thing the ITLG can provide is optimism. ITLG President John Hartnett, in particular, just oozes optimism. Hartnett bubbles over with excitement when he gets going.

Hartnett's an Irishman who has done well in America, but that's not enough for him. He's keen to bring the rest of his fellow Irish men and women with him. He's all smiles when he is talking about the possibilities for Ireland in the 21st century, which stands in stark contrast to how most people in Ireland feel today.

ITLG's Chariman is Craig Barrett, the former head of Intel. Barrett has a different demeanor, but is no less positive about Ireland's future. Barrett is like a hard-nosed football coach. He lets you know it's going to be a tough game, but he also has that top coach's ability to convince you that you will stop that fullback on the 4th down play at the goal-line.

Both men are inspiring and Ireland sure needs a large dose of that right now.

I also had a chance to sit with a couple of other members of the ITLG. They were also positive about the ITLG's mission, but it wasn't hard to detect some frustration. Too many "redundant conversations" - the same conversation with basically the same officials over and over - is what I heard. I can easily understand. The Irish government is like a fish on a hook - willing to listen, but not really able to do much.

If anything made me uneasy about the ITLG visit it was that they would be sucked into the defeatism and pessimism that just seems to hang on the air here now like a foul-smelling cloud. You can't avoid it. It gets in your lungs and takes over your whole being.

Ireland desperately needs someone to keep hope alive and the ITLG is doing that. I hope the small Irish companies they're dealing with can imbibe the ITLG's upbeat, American can-do attitude and not get dragged down by the all-encompassing negativity that currently stalks Ireland.

Irish Government speaks as if the potato famine has returned

I met a friend of mine from America here early last week and he asked me to give him two minutes on the state of Ireland. I told him I didn't need two minutes: The young want out, the old are afraid of cuts and the middle aged are looking at a retirementless, childless future.

That was my assessment of mood of the country before we were forced to accept the IMF/EU bailout over the weekend. I think I can safely say the mood has not improved. In fact, if anything the mood has darkened, grown angrier and the focus of that anger is the government, which is now on its last legs.

There are a million reasons for the Irish people to be disgusted with their leaders, but this past week takes the cake. All week the government denied that the IMF was at the door - even denying what was happening after the IMF man arrived in the country!

Yesterday was even better. Taoiseach (Prime Minister) Brian Cowen and Minister for Finance Brian Lenihan gave a joint press conference at which they admitted that we needed "help" from the IMF and the EU. It was an amazing, mind-boggling performance as they took obfuscation and denial to a new level.

Neither man ever used the word "bailout", but both talked about capital, contingencies, etc. At one point Lenihan referred to the "problems that have beset us."

Beset. My wife was all over that. She turned to me - more in wonder than in anger - and said, "Did you hear that? Beset? He's talking like potato blight is once again wreaking havoc across the land. It's like he believes neither of them had a role in bringing us to this point."

She is totally right. Both the Cowen and Lenihan, especially Lenihan, have frequently spoken of our problems as if a disease arrived on a ship and infected our banks. And, while the credit crunch did sweep the globe after the fall of Lehman, the dead black centers in our banks were made jointly by our greedy wreckless bankers, feckless regulators and (criminally) careless government.

Never during the past two plus years, since the banking crisis blew up, have we had a full, frank admission that mistakes were made. More importantly, never did the government either (a) level with us as to the depth of the banks' problems or (b) learn the full truth themselves. Now the people are furious because they never had the truth nor leadership during the past few years capped off this week with the loss off all pretense of Irish independence. And it wasn't lost in a natural disaster.

Ireland has a new Chief Secretary

The position of Chief Secretary for Ireland was abolished following the establishment of the Irish Free State in 1922. From that moment Ireland has had varying degrees of independence, but it was basically independent. Until now.

There can be no more argument on the matter. Many people have claimed with each new European Union treaty that Ireland was no longer an independent nation, that we were just a state in a vast European federal union. Others argued otherwise and it is, or was, a complex matter.

However, this week all pretense of independence evaporated as the Irish people got to meet our new Chief Secretary, Olli Rehn {photo}. Unlike the last Chief Secretary, Canadian Hamar Greenwood, Rehn is not a member of the British Government, but is the European Union's Commissioner for Economic and Monetary Affairs. However, the roles are similar enough because the Chief Secretary's role was to see that British policy was enforced in Ireland as Mr. Rehn's is to see that the EU's policy is followed by this state.

Rehn dropped in for a visit this week. With the budget due in only a few weeks, Rehn's presence is a signal to all in the parliament that the real power here demands that Ireland toe the line on deficits, spending and taxation. Rehn reiterated his view that Ireland can no longer be a "low tax country" but must move towards being a "normal tax country," which means overall taxation rates should be similar to what applies in other EU countries.

Rehn helpfully offered the support of the European Commission to "Ireland and its citizens as they faced into the challenges ahead," but he offered nothing else other than "thou shalt comply" and get the deficit under 3% by 2014.

This is the price of being the good Europeans, the English-speaking country that was enthusiastic about the European project. We adopted the euro, unlike the bad Europeans across the Irish Sea. We opened our borders to the work‑hungry Latvians and Poles, unlike the Dutch, French and others. We showered love on all that was European, blindly ignoring that the powers that be were eying us coldly the whole time, waiting for an opportunity to punish us for our foibles and weaknesses.

For a while we thought we were rich, but it was a mirage. No, it was a trip, like we were on LSD. We were the debt addicts and we thought our wealth was real, but it was illusory.

Now it's not just cold turkey for us, but punishment. The EU is punishing us for our addiction, but the pushers, the German and French (& others') banks and investment funds who threw money at our banks and property developers, who fed our addiction, are not only getting away with it, but are being protected by the same people who are now dictating how Ireland is to run its affairs.

So we're stuck with stern-faced Olli, accepting his lectures like the bad children the EU always knew we were and, it seems, people here are taking it. The only question is how much longer before the people decide to send Olli to join Hamar Greenwood.

Like a movie scene - Irish government declares "Let them eat cheese!"

Some headlines write themselves. This morning the Irish government's Agriculture Minister Brendan Smith announced that the government will soon be distributing 58 tons of cheese to poor people. It was only yesterday that Taoiseach (Prime Minister) Brian Cowen told the nation that the budget due December 7 – a date that already lives in infamy – will include massive cuts in government spending and significant new taxes.

To say that the cheese announcement from our tone-deaf, out-of-touch government was badly timed is understating things. Every radio station, news web site and especially twitter ran wild with puns and cheese-inspired slights aimed at the government. Of course, poor ol maligned (& slandered) Marie Antoinette didn't have a prayer as "Let Them Eat Cheese" was the cry heard throughout the land.

The fact that this is an EU-wide scheme made no difference. The government's reputation is in tatters and a slice of cheddar is not about to change anyone's views. They ceaselessly peddle the story that they're only victims of a storm that started elsewhere, but there's ample evidence that the abominable mismanagement in government and corruption among many of Ireland's wealthy elites were going to be a big problem even if the global financial crisis had not occurred.

If someone were to make a movie about Ireland in this era, it would likely start with a scene inspired by today's events:

The government is gathered late at night trying to figure out how to appease the masses after the Taoiseach's pre-budget speech. They're seated in comfortable chairs in a well-appointed conference/meeting/dining room in government buildings. They're enjoying wine and cheese.

Suddenly one of the ministers has a eureka moment and stands up with his glass and says, "I know, let's give them free wine." Some murmuring of approval, but the Taoiseach puts his glass down, pauses and says, "No, they drink more than enough already. Let's give them free cheese instead. Smith, you'll make the announcement in the morning. That'll make them feel better; buy us some time too."

Of course, this story could be better told in a cartoon using fat cats and scavenging mice. What we don't know is how it will end. Will it be the uprising and guillotine that did for Marie Antoinette or the desolate landscape so popular in apocalyptic nuclear holocaust movies. The government is betting on the latter.

Joining the euro was 1801 all over again in Ireland

In 1800 the Irish parliament voted to accept union with Great Britain, a move which was an economic disaster that snuffed out a burgeoning economy, led to decline, de-industrialization and, eventually, a disastrous famine that killed a million people and drove more than that out of the country. A complete catastrophe unrivaled in Irish history. If anything comes close, it was 1992.

In 1992 the people of Ireland voted to accept the Maastricht Treaty, an arcane document that few voters really understood. It committed Ireland to joining a single European currency, but the pluses and minuses of such a decision were never even considered in the run-up to the referendum.

The Taoiseach (Prime Minister) Albert Reynolds sold the amended European Union treaty on the basis that we would get billions of dollars in aid and there would be no impact on our laws banning abortion. The only references made to the pending currency union were about how we'd enjoy the same low interest rates as the Germans. There was zero debate on the merits of joining a currency dominated by countries that, combined, accounted for about a third of Ireland's trade.

Today we're reaping what was sown in 1992. Most people here are blaming the "greedy bankers" or the "greedy property developers", but that doesn't explain why this property bubble and subsequent crash were so much worse than those that had gone before. Greed is part of the human condition and bankers' and/or property developers' greed is a constant.

No, another explanation is required and that's where the euro comes in. We exercise no control over the euro. Interest rates are determined to suit Germany & France, but the Irish economy does not move in synch with those economies. Ireland's two largest trading partners are the United States and United Kingdom, both of which are outside the euro. The fluctuations in the exchange rates between the euro and the dollar are not a reflection of economic conditions in Ireland, but serve to enhance our boom when America's up and Germany down and vice versa.


Anyone who visited Dublin before the bust would have recognized that Dublin's architecture is dominated by two eras: the recent boom and the late 18th Century. The Customs House, the Four Courts and Dublin's famous Georgian squares and many other buildings were built before 1800 by a confident, thriving Dublin. It wasn't just Dublin either. Great Georgian buildings can be found in other cities and throughout the country.

The modern equivalent of those great Georgian houses and official buildings are the large rural homes, the expensive apartment and the modern, confidence-oozing glass and steel office buildings that dominate our city centers. Gradually, however, those modern buildings and modern country estates are looking like symbols of another era, a time past, just as the Customs House would have seemed to 19th Century Dubliners.

Many people believe it will take nearly a generation to work through the problems caused by the recent boom and bust. Presumably this will not include anything like a murderous famine, but economic decline and emigration are sure to be part of Ireland's future for some time. And, just as in 1800, it was all avoidable if only Ireland's political class had recognized that union has a cost.

Forced emigration is not a lark

Everyone with an interest in Ireland and/or the Irish should read Niall O'Dowd's column on the Working Abroad Expo, better known here as the Emigration Expo, held in Dublin over the weekend. O'Dowd describes a scene that is incredibly sad, thousands of people hoping to find an opportunity to work in Australia or Canada or just about anywhere.

If you worry that O'Dowd's description is a bit overdone, you can find similar descriptions of the Expo in today's Irish Times. According to Twitter posts I read, people were lined up for more than 100 yards in wind and rain just waiting for the chance to pay their €10 ($13.70) to talk to people who might have some insight on possible leads on jobs outside Ireland.

While these scenes are not surprising given the state of the economy here, what has really surprised me recently is the flippant, disdainful responses of some people in the media when the discussion turns emigration. Some talk about emigration as if it's not much of an issue, that the whole experience will do the emigrants the world of good. "I went to London for two years when I graduated." That sort of thing.

That kind of thing gets my goat. First of all it's not that straight-forward. As O'Dowd's and the Irish Times' reports make clear, many of those who are looking to leave are not young, recent graduates. Many at the Expo were in their 30s, some even in their late 40s. A large percentage of the would be graduates have families.

Even among the young and single, not all have been prepared for this step. They came of age in an era when they were promised that emigration was at an and. They bought into the proposition that you could go abroad for a year or two and return if you so desired. They expected that when they left it would be temporary, just to get experience. And those who never wanted to leave, felt no need to get that experience outside Ireland, would be able to stay and work here forever.

That belief is gone now as many of those who are looking to leave don't want to go and don't expect to return. They're emigrating, not going abroad temporarily. Glib descriptions of the benefits of emigration to Ireland or suggestions that we need to "redefine emigration" and claims that emigration is "not really a problem" reek of indifference and arrogance. Such talk is insensitive in the extreme to those whose lives have been turned upside down, who feel they must leave to avoid unemployment, bankruptcy and despondency.

Sure going abroad for a year when you are 22 can be a big adventure, but leaving your homeland to seek work elsewhere because you were laid off and have no hope of being hired anytime soon is nothing less than traumatic. I can accept that many people feel helpless to do anything about the political or economic situation that's forcing people to leave. That's understandable, but it's unfathomable that even a minority of Irish people can be so dismissive of the difficulties that face these latest emigrants.

At least we still have Google and we aim to keep them

Anyone who willingly reads the business and finance pages in Ireland's newspapers is asking to be scared. Skyrocketing unemployment, bankrupt banks and a state that is piling up debt, which is getting pricier by the day. On top of that property prices are still tanking and a survey published yesterday claimed Ireland was the worst place to live in Europe. Unsurprisingly, people are streaming out of the country at a rate not seen here in two decades.

Bad news all around. Well, not quite everywhere. We still have Google.

Google's European headquarters are in Dublin, where they employ more than 1,500 people. The other day Google Ireland posted its accounts for 2009 and the results can only be described as tremendous. Revenues, profits and employment were all up last year.

Not only did the number of employees rise, but so did the average salary, up from €64,000 ($85,000) to €72,000 ($96,000). And that doesn't include the stock options that the staff received, which totaled €17m ($22.7m). All of this at a time when hundreds of thousands have been laid off, and just about everyone else has had to take pay cuts.

Google is a great story for Ireland, but there are those within and without who don't see it that way. Google like all companies operating here pay the corporate tax rate of 12.5% on their Irish earnings, which is a great enticement for them to stay here, but to some that rate of tax is too low.

Fortunately nearly everyone in Ireland supports this tax policy and other than a few cranky newspaper columnists nobody wants to increase the corporate tax rate. Irish people understand the footloose nature of business and employment in this globalized age and they believe we need to do all we can to keep Google - and all the other high-earning, high-paying employers from America and elsewhere - from going elsewhere.

No, the real threat to the corporate tax rate is external. There are those among our EU "partners" who would love to see us forced to change that tax rate to something more palatable to them, something around 30-35%, which would erode the only crumb of competitive advantage we have as an underpopulated, difficult-to-get-to island nation.

These people, who seem to be either French or German, see Ireland's difficulty as their opportunity to turn the screws even more. We're on our knees and, it's true, we're getting help from the big boys to stave off default, but the price some people want us to pay is too great. It would mean penury in perpetuity.

It's too high a price. We need to hold onto Google (& others) more than we need to stave off default and that means keeping our corporate tax rate LOW.

We sure could use Gov. Christie in Ireland

I've read a bit about Governor Christie before, but until today I had never heard him speak on the issues facing New Jersey. I caught a CNBC segment of him talking jobs and money at lunch hour and all I can say is, "Governor, will you adopt us?"

Last week I argued that the Taoiseach (Prime Minister) Brian Cowen shouldn't be hounded out of the job because he was a little groggy during a morning interview. That doesn't mean, however, that he should remain in the job.

The truth is he has to go as does his party.

In many ways Cowen is almost my ideal politician. I don't want to like my political leaders. In fact, I think some gruffness and some meanness combined with arrogance can be excellent character traits in a leader, particularly at a time like this when tough decisions have to be made and stakeholders in the status quo have to be told where to go.

If you read the newspapers you'll see many references to Cowen being angry or whatever, but mostly what I hear is waffle and conciliation. He needs to be tougher, but even that wouldn't matter because he is UP TO HIS NECK in responsibility for what brought us to our knees in the first place. He was the Minister for Finance when the country was run into the ground.

So, it's time for a new leader and a new government. Unfortunately, everyone in Ireland is already very familiar with what the alternative will look like and it ain't all that appealing. The leader of the opposition is not all that likable, but nor does he project the toughness necessary to shake up the nation, take the burden on his shoulders and lead us to safety.

No, we need Chris Christie {photo} and, apparently, he is three quarters Irish so that's not an issue. For years there was an argument in politics here as to whether Ireland was (or should be) 'closer to Berlin or Boston.' Right now I say the heck with Berlin and Boston, we need to move much closer to Trenton.

The Celtic Zombie now stalks Ireland

The Celtic Tiger has given way to the "Celtic Zombie." Oh, that name isn't making the rounds, but the word "zombie" seems to be a regular feature in any report on Ireland's economy these days.

Today Bloomberg carries a report on Ireland's "zombie" hotels. During the boom years Ireland added hundreds of new hotels thanks to tax breaks that made hotel investment attractive. Now, unfortunately, with the decline in visitor numbers, particularly business travelers, occupancy rates at Irish hotels have fallen to levels not seen in 30 years. So a lot of the new hotels are no longer viable, but due to the way the tax breaks were structured it would cost more to close them than to keep them open.

Those are the zombie hotels, but the biggest, most damaging zombie of them all is our zombie bank. If you haven't heard of Anglo-Irish Bank, that's probably just as well. This is the zombie that in Hollywood movies is the last and most difficult to kill. The biggest and strongest zombie only this zombie may kill us all and leave us with no Hollywood ending.

Today the bank posted a loss of €8.2bn ($10.4bn) for the first six months of this year. That is €2,000 ($2,500) per head of population lost, although the money was really lost during the stupid years when Anglo lent money to anyone who could turn the handle on the bank door.

The losses reported today are in addition to the €12.7bn ($16bn) reported as losses in the previous 15 months. Oh, and, lest you think the shareholders or bondholders have lost their shirts due to these losses, Anglo is 100% taxpayer-owned and bondholders are 100% state-guaranteed. So Anglo managed that feat solely for our benefit.

How much more money will the zombie bank cost us? That's anybody's guess, but billions anyway. And in an attempt to pretend things aren't quite as bad as they are, the zombie is reaching out and creating more zombies. The bank has a diversified portfolio of non-performing commercial loans and has been writing off loans to pharmacies, technology firms, hotels and other businesses in exchange for shares in these otherwise bankrupt companies. Or, as economist Brian Lucey sums it up: "You have a zombie bank propping up zombie companies. This creates a zombie economy."

For the past year or more the Minister for Finance in the Irish government has been praised lavishly for the manner in which he implemented a series of steps to save the Irish economy. He cut government spending and set up a so-called 'bad bank' (Nama) to absorb the banks' (it's not just Anglo, you know) bad property loans. Much of that praise has come from outside Ireland, such as last week's support from Canada's Finance Minister Jim Flaherty.

Flaherty, with that name he's clearly a member of the greater Irish family, was probably only trying to be helpful, but he'd better stand back now. I suspect that the Irish public's patience may soon evaporate as it's clear that recovery is still a long way off and that we haven't yet bottomed out. The zombies haven't finished their work yet.

Well-intentioned people like Flaherty might find themselves grouped with those in the government, who are after all, largely responsible for the fact that Ireland is now terrorized by zombies.

Hidbin - a reminder of Celtic Tiger stupidity

Yesterday I received a newsletter from our garbage company that contained a small item about a new product they were offering for sale: a hidbin. The hidbin is basically a fake bush front & top for your garbage can.

Later on, each time the image of the hidbin popped into my head I chuckled to myself. Were there really people out there who were so embarrassed by the fact that they had a garbage can (in Ireland, your "bin" is your trash can, so hidden bin or hidbin. See?) that they felt they needed to pay $128 (€99) to surround it in fake, plastic bush leaves?

Today when I thought about it again I thought to myself, well, back before 2007, during the Celtic Tiger years, lots of people would probably have bought hidbins. To my mind this is just the kind of silly item that people were prepared to pay for during those days when the nation took leave of its senses.

When I first came to Ireland I used to get a lot of good-natured ribbing from people here about some of the things Americans would spend money on. When they spoke of dishwashers and clothes dryers - things that were only then becoming the norm in Ireland - they were clearly speaking about items that they'd love to own themselves.

However, I remember in the mid-90s listening to a woman on the radio here talking about her daughter who was in America as if the daughter was now a member of an alien species. Her daughter had been waxing lyrical to her Irish mother (in her mid to late 50s, I guessed) about her bread-maker and how she couldn't live without it.

The woman explained how she'd reminded her daughter that she had taught her how to make bread when she was 7 or 8 years old and what possible need could there be for her to own a bread-maker now? Each time she said the word bread-maker her tone conveyed equal amounts of scorn and disbelief, as if only a fool wool would spend money on such a thing.

Yet, not long after that interview I saw bread-makers for sale here. To be honest I don't really have much of a problem with bread-makers, although I'm pretty certain families can survive without them seeing as my wife and I have never owned one.

I guess the hidbin is to me what the bread-maker was to that woman 15 or so years ago - a complete waste of money, something you can easily live without. If this were 2005 or so I'd feel the same way, but I'd also be pretty sure that hidbin would be a winner with homeowners because, well, everything seemed to be a winner with them then. Back then Irish homeowners spent money on all sorts of ridiculour things and I see no reason to assume a hidbin would not have been a 'must have'.

Today, however, I'm not so sure, although I imagine that some people will buy one.

Believe me I'm not knocking the people behind the company because I admire entrepreneurs. If they can sell these things and make a profit and a successful business for themselves, I'll tip my cap to them. However, that won't stop me laughing at anyone whose trash can I see surrounded by a plastic bush.

25 years and a recession can take a toll

I was on the DART - Dublin Area Rapid Transit - last week when I thought it was sad sign of how bad things have gotten here. I don't ride the train all that often, but I was shocked by the state of the train I was on: broken seats, graffiti and filth. I've seen one of those on a DART train before, but this was the first time all three seemed to be riding so comfortably together.

It was a far cry from my first ride on the DART back in 1985. Back then it was brand new and I, a student from New York, couldn't get over the difference between the DART and the broken down, graffiti-covered, filthy Subway. And even though the DART showed signs of age it never looked neglected. Until now.

On Friday evening I headed back into Dublin, but this time on the Luas - Dublin's light rail system - with my family. What a difference. The Luas is today what the DART was back in the mid 1980s. At least, I hope so because I saw the Luas as a sign that things would get better, that there is hope still. I felt a bit better after the Luas journey.

Later on Friday, we ate at Captain America's, which is older than the DART, but shows no signs of neglect. I've only been there twice before: in 1973 and during my student days during the mid 1980s.

Yup, 1973. We traveled to Ireland to visit my mother's family. A few weeks on the family farm in County Kildare. Great time.

One day during my stay my aunt took me into Dublin to see the sights. We finished with a burger at Captain America's. One of those great childhood memories, which probably explains why I've returned so rarely - didn't want to spoil the memory of that day.

Well, on Friday a spur of the moment decision found me back in Captain America's. I'm sure it's changed since the early 70s, but it wasn't much different than I'd remembered. And, I was surprised at how much I enjoyed the experience.

The food was better than most places that serve a similar menu and the rock-n-roll memorabilia is great. Despite the name, I think Captain America's has a genuinely Dublin feel, unlike a similarly themed near-by restaurant that is part of a vast international chain.

Next time you're in Dublin ride the Luas and the DART - still has great views - and then go to Captain America's for a bite and skip the Hard Rock Café.

{Top picture is me behind a DART train (clears throat and mutters - inaudible) ** years ago.}