January 30, 2014

An Economic Renaissance in Cork?

Posted in International Economy · 109 comments ·
Share 

It was a morning only a taxi driver could love. Yesterday, walking down the Western Road, past the Pres’ Cork lads shuffling towards school, the River Lee was swollen and moving rapidly. It only took seconds for a large fallen branch to be swept along from one bridge to the next, which is hardly surprising after the biblical deluges we’ve been experiencing.

At Washington Street, just ahead of the impressive Cork courthouse, the river splits and you get the feeling of being on an island.

Down at the English Market, just after eight, the various traders are setting up. Fruit and veg floggers are roaring at no one in particular, while the clink of cafe cutlery rattles over the fishmonger’s chatter. We are getting ready for the trading day. The wares are set out, the display cases polished and the nuts and bolts of everyday commerce, the true engine of the economy, are put in place for the day ahead.

From the perfect vantage point of the lovely Farmgate Cafe overlooking the market, we see that the English Market is a great example of local produce being sold by local businesses to local people. This type of commerce is what makes cities; they are living places with bars, cafes, shops and markets, where people mingle with each other, hook up for a natter and a gossip.

This human fact is what makes cities so special and why living cities, where people live and work, are so crucial for society. Cork is a perfect size to be such a living, manageable city.

It is still a bit early on a damp morning. Bar the office workers grabbing the odd takeaway coffee, Patrick’s Street is pretty empty, but even on this dank day, Cork city looks proud and defiant – at least at first glance.

Having many cousins, aunts and uncles in Cork, I was made aware at a very young age just how great Cork was and how lucky I was to be allowed to spend time down there.

When I was a kid, my Cork cousins constantly bragged to this visiting “Jackeen” about having the “longest building” in Ireland, the “tallest building” in Ireland and, most comically, the “straightest road” in Ireland.

But, in fairness, Cork has a lot to be proud of. The city, although sometimes not appreciated, has loads of interesting architecture. The river, island, wonderful hills and bridges all make it a lovely city to walk around.

Interestingly, Cork also has two distinct economies. There is the vibrant economy, the industrial, largely foreign-owned and the local, domestic economy, which is still struggling.

Although many Cork locals will complain about power being centralised in Dublin, Cork and the south-west in general is actually the industrial powerhouse of Ireland.

According to the IDA, it is not Dublin that is the industrial heart of Ireland, but Cork. In 2011, the south-west region accounted for 36.2pc, or €36.7bn, of Irish industrial output. Dublin as a region produced 18.9pc, or €19.2bn, worth of industrial gross output in 2011. Dublin as a region had the lowest proportion of Irish-owned industrial units in 2011 at 14.5pc. The south-west region, with a much, much smaller population, accounted for 15pc of Irish-owned industry.

The Cork region has the highest industrial wages in Ireland. This may come as a surprise to some but average industrial wages in the Cork region are €44,800, while the Dublin region is next highest at €44,700.

Because Cork is the centre of the pharmaceutical industry in Ireland, the clusters of multinationals in this area have driven up industrial wages. This is good for everyone, but a quick glance at the figures shows it’s a much better deal for the shareholders of the companies who get the dividends from the profits than for the workers.

But just look at the bargain the multinationals are getting in Cork. In 2011, Co Cork had the highest value of gross output per person engaged in Ireland at €1.18m. So the multinationals are making on average €1,180,000 per employee and they are paying each employee €44,800. This is a phenomenal deal for multinationals.

Back in the domestic economy, although Cork city looks superficially prosperous, it faces the same challenges that the main streets of all Irish cities and towns face. Rates and the cost of doing business are high and the footfall is falling as the key spending population of late-twenty-somethings has fallen due to emigration.

You can see how this hollowing out of the normal renting population is affecting the Cork economy in other ways. According to daft.ie in 2013 Q4, house prices had fallen by 6.9pc in Cork and 6.1cp in Cork city from the same period in 2012. House prices are down just over 50pc in Cork county and city since the boom. If you look a bit closer, plenty of shopfronts are closed up and overhead much of the upper storeys’ real estate looks empty – 11pc of the commercial retail space in Cork is empty.

Like any retail business, online shopping is eating away at retail Cork. According to the ‘Southern Star’, Cork consumers are spending €350m online ever year on purchases from companies outside Ireland. This figure is only likely to rise in the years ahead.

All the while the local economy, the real human economy that we can see in the English Market, is struggling and is being lumbered with the sort of bills that should be shared between the local businesses and the foreign businesses such as pharmaceuticals. In Cork these companies are making over €1.1m profit per employee.

This time last year, in Cork courthouse, Judge Olann Kelleher had 170 rates cases on his list. He would see more than 200 more in the fortnight before Christmas. Judge Kelleher asked if anyone was looking at the connection between high rates and the closure of shops and offices:

“As I walk down South Mall, half the place is empty, and Oliver Plunkett Street is the same. At what stage do you look at it and say: ‘What are we going to do about the rates?’”

Cork is a microcosm of what is happening in Ireland: multinationals and locals are treated totally differently. If multinationals were asked to pay a bit towards the upkeep of the area in which they are based, rates could be shared and the crippling bill to local business could be reduced.

After all, the multinationals are part of the community. It is in their interests that cities and towns are vibrant places that attract employees. In this way everyone gains. The alternative is for garrison industries, like military garrisons cut off from the community. No one wants that.

DAVID MCWILLIAMS WRITES DAILY ON FINANCIAL MARKETS AT WWW.GLOBALMACRO.COM

Subscribe to receive my news and articles direct to your inbox

 


  1. Good morning all hope life is good. Now a little bit of housing keeping as I have received lots of complaints from readers that the discussion is veering off topic a bit too regularly. All messages that do not relate to the articles they are being posted under or fit within the conversation within the comments, will be deleted. The comments section is left open for people to discuss and comment on my articles. Anyone is allowed post a comment but repeated bending of these guidelines will result in the user being deleted from the site.

    • sweetodd

      On the ball as usual David .

      However you should avoid simplistic stats like…..’.average €1,180,000 per employee and they are paying each employee €44,800. ‘
      There are lots of additional factors.

      http://www.linkedin.com/in/psweeney1

      • Mike Lucey

        Possibly ‘simplistic stats’. Fair enough, lets say 50% less, €590,000! Does that sound much better …. I think not ;-)

    • Gearoid O Dubhain

      With reference to high rates, It should be pointed out that Cork’s Lord Mayor is paid € 100,000 a year in salary plus expenses plus car and driver. the position is primarily ceremonial with no executive responsibilities. The three main parties simply swop the position between themselves. This salary is far higher than Doyblin’s Lord mayor gets. This is symptomatic of the manner in which rates money is squandered.

    • Gearoid O Dubhain

      Car parking charges are in effect an entrance charge to the city so it is easier to go to an urban SC or shop on line. Irish retailers could have offered moral support to their customers by offering some opposition to the tax on homes. They didnt and so deserve to lose the loyalty of their customers.
      On top of that the City Council have allowed the city become so dirty with a huge volume of illegal and unauthorized advertising signs. The Grand Parade is an appalling mess with advertising signs and the walls of the City Library are caked with black grease from takeaway food.

    • SMOKEY

      So the main point is “when are the local authorities going to reduce rates to encourage new business to open or existing ones to stay profitable?”
      Answer: Never. That is the question asked ad nauseam over the last 6 years. Never ever ever ever ever, will they reduce these bogus rates. It makes too much sense, and as we know,…….
      As for deleting those who bend the rules. Watch out David, you will have an empty blog!!!

  2. Ex Employees from Henry Ford Plant in Cork that transferred to the Dagenham Plant were often seen on their visits to Cork pushing prams and were known as the Dagenhams .

    Has anyone ever tried to listen to Norweigen speakers talk and be in awe of the similarities of theirs with Cork accents . I believe this began at the time of the Battle of Kinsale .

    During the 80′s Cork was in the doldrums and the government appointed a special commission to rescue the abyss it was then in . It has never looked back since .

  3. The ‘Inclusive Contribution ‘ in my words , is what David is proposing into a new Social Costs that must be shared by the financial beneficiaries operating on this pretty Isle .

    French Tax is developed on these lines but operated in a Communistic Code that often has and is proven to be too rigid but that does not mean a better system can be produced by our own professionals .

    This could form a catalyst to something greater with a bit of give and take .

  4. McGoo

    Thanks for the complimentary description of Cork. It is small, but perfectly formed. However, your geography is a bit off – the courthouse is in the middle of the island, nowhere near where the river splits or rejoins.

    Regarding multinationals contributing more, I have a story to tell you. A few weeks ago I was in a meeting chaired by the director of global operations of a silicon-valley company with offices in Cork. He/she wrote up a list of every place in the world that the company has offices, and asked the room why they are in each location. When it was Corks turn, someone said “tax”, and he/she dismissed that as “not an operational reason”. Noone could come up with another reason to be in Cork. So, asking multinationals for more tax could be very counterproductive!

    • Gearoid O Dubhain

      Yes you are right, the river splits out by the County hall in the Lee fields about one mile away. However the two channels are quite close just before the main channels sweeps left by the Mercy Hospital so a visitor could be forgiven for thinking the split occurs nearby

    • Gearoid O Dubhain

      P,s re the multinational – surveys of multinationals have shown that the low tax rate is not the primary reason they invest in ireland particularly the high tech ones. And there other ways of giving financial incebntives to locat ehere rather than a low base CT rate. Exoerience operations here primarily for the low tax rte tend to migrate to other countries very quickly when the inducements are high enough.

      • McGoo

        >surveys of multinationals

        What companies say on surveys can be very different to what they say in private.

        >tend to migrate to other countries very quickly when the inducements are high enough.

        Exactly my point. Increase taxes, and they’ll leave.

  5. aidanxc

    Interesting article David. I am glad to see that you are bringing up the thorny issue of how multi-nationals are not paying their fair share. To boot many multi-nationals poach staff from indigenous Irish businesses (which they can well afford to do since they pay so little tax). This is not good for the economy because many multi-national jobs are not focused on innovation, rather they provide ‘support’ or other lower value dividends to the Irish economy. Despite all the hoopla about Facebook and Google in Ireland they really are just glorified call & sales centres. Irish start-ups are suffering a brain drain to these companies because they cannot, in the early stages of their existence, compete with the salaries of the multi-nationals. This kills innovation in the economy and long term Ireland will suffer.

    It is good to see that Cork is holding its own. Having other centres of industry in Ireland is good for the country as it takes pressure off the Dublin region and spreads the wealth somewhat.

  6. michaelcoughlan

    “the clusters of multinationals in this area have driven up industrial wages. This is good for everyone, but a quick glance at the figures shows it’s a much better deal for the shareholders of the companies who get the dividends from the profits than for the workers”

    This is a critically important observation. For example Barack embarrassment yesterday announced an increase to $10/hr min wage
    for government employees citing the fact that incomes in real terms For employees were the same as in Ronald regan’s time!

    What’s important to focus on however in my view isn’t the min wage which increasing will drive up costs nor taxing capital to the hilt which will reduce investment but to reduce the ratio between the top earners and the bottom ones now at a staggering 400:1 in the US. Imagine how the spending power in the English market would be transformed if the top guys salaries in the pharmaceutical plants were at a smaller ratio with the difference given to workers and not capital/shareholders but bring about parity of esteem for capital and labour. The bottom line wouldn’t be altered in the plants the working and middle classes would thrive and all it would mean is for a few of the people in charge having to make do with say 600k per year images of $1.2m or so. It’s the ratio between management, capital, and labour in terms of wealth distribution which needs to be sorted.

    Excellent article.

    Michael.

  7. The Stolen Village of Baltimore – history records that many productive skilled craftsmen travelled to Co. Cork from Cornwall to escape the wrath of the Monarchy in England and found they could practice their libertine lifestyles with ease in Cork . This influx formed a basis for local skilled labour force that subsequently grew into what is Cork today.

  8. michaelcoughlan

    Hi David,

    A dickie bird told me a story about rates in cork city. Apparently the powered that be assessed the issue Regarding shop closures and rates and instead of deciding to lower them as would be the case in a capitalist run situation to drive sales they elected to keep them the same but create a slush fund from the rated revenue to grant aid new businesses starting in the city.

    Can you believe it. The best person to decide how capital is placed is the small business person/ entrepreneur. The people in charge Denied this vitally important aspect of running a business to new start ups to suit their own agenda. More evidence of why a government arm should be prevented from interfering in free enterprise in this type of controlled planning top down approach.

    • Michael, in your previous post at 10.41am, what you are really referencing is Marx’s theory of surplus value.

      (Don’t be put off by the mention of the name Marx people – it’s just a theory. Play the ball, not the man).

      Anyway, Michael, you suggest:

      “It’s the ratio between management, capital, and labour in terms of wealth distribution which needs to be sorted”.

      Which is true.

      However, how do suggest this happens?

      In your post at 10.55am you abhore top down controlled planning.

      So do I.

      So all we are left with is the notion that somehow those on the profitable side of the 400:1 ratio are suddenly going to develop a conscience and give up (at least some of) their ill-gotten gains.

      Ain’t going to happen. Especially in this country.

      So we are stuck where we are.

      • cooldude

        Adam in UK banks the ratio has gone to over 600-1. This is despite the person at the cash desk having done their job well and the person at the top having f—ed up so badly that the banks had to be bailed out by the tax payers to the tune of over 100 billion. There is something deeply wrong with this system of crony capitalism where failure is rewarded. We are gone well past the traditional left-right debate and are into a whole new era of major banks and corporations versus everyone else including you and me.

        • Yes, I fully agree cooldude.

          I take my own actions in this fight, including staying away from banks as much as possible.

          Right now Bitcoin is working for me in my personal and business life although I wouldn’t bore the pants off everyone on the blog about it – unlike the incorrigible goldbugs.

          http://brianmlucey.wordpress.com/2014/01/30/bitcoin-and-the-denationalization-of-money/

          No loans, no mortages, never have, never will – you have to actually walk the walk – there’s a lot of wafflers around the place who actually just toe the line like good little boys when push comes to shove.

          All the best cooldude.

    • Gearoid O Dubhain

      I am not aware there are any significant local grants for new businneses in Cork. Give us details if you have them but dickie birds are called that for a reason.

  9. cooldude

    Interesting article and comments. Every aspect of modern societies is stacked in favor of corporations and is against small start ups. It’s not just the rates and the crazy tax rates it is now the rights they are trying to achieve through the TPP process to actually overrule the authority of sovereign nations if for some reason a global corporation thinks that nation is acting against it’s interests. It doesn’t matter that the nation is acting for the benefit of it’s people this new so called trade treaty will put the welfare of corporations above those of the people. This will make it impossible for instance for a country to ban GM foods as Monsanto will, under this new treaty, take a case against the country and it’s case will now be upheld.

    We are entering into an era where national politicians will be little more than county councillors answering to a cartel of banks and corporations who will basically control everything.

  10. Mike Lucey

    As ever, a well written / thought out article. Thank you David.

    As regards commercial rates in towns all over Ireland.

    In Ireland rates are due regardless to whether they are occupied or vacant. It is possible to reclaim paid rates if the property is vacant and up for lease but not for sale. In many cases the owners simply don’t have the funds to pay rates on vacant premises in the first place.

    Here is a summary regarding the matter,

    *****
    Section 14 Local Government Act, 1946 deals with the applications for refunds of rates paid. In the case of vacant property, a ratepayer is required to pay the full rates due, but may be entitled to a refund of 1/12th of the rates paid for every full month of vacancy, provided they fulfil the criteria below:
    Premises must be vacant/unoccupied on the date of the making of the rate, for the year being claimed – date of making rate for 2012 – 30th January 2012.
    The premises must have been vacant for one of the following reasons:
    Vacant for letting (not for sale) or
    Vacant for repairs or alterations or Vacant pending demolition or re-development.

    Documentation in support of the stated reason for vacancy must be submitted, along with a sworn declaration of vacancy. A refund can only be made to the party who paid the rates.
    *****

    The UK operates a harsher system.

    *****
    You don’t have to pay business rates on empty buildings for 3 months. After this time, most businesses must pay full business rates.

    Some properties can get extended empty property relief:
    industrial premises (eg warehouses) are exempt for a further 3 months
    listed buildings – until they are reoccupied
    buildings with a rateable value under £2,600 – until they are reoccupied
    properties owned by charities (only if the property’s next use will be mostly for charitable purposes)
    community amateur sports clubs buildings (only if the next use will be mostly as a sports club)
    *****

    As regards the comment above, ‘create a slush fund from the rated revenue to grant aid new businesses starting in the city’. This in a way is somewhat reasonable but it does not take into account the small businesses that are barely hanging on by their fingernails. Surely some ‘joined up thinking’ should come into play! How about adjusting rates in proportion to the profit the actual business in making?

    This would help to fill the vast numbers of vacant and decaying shop premises all over Ireland and more importantly go some ways to keep low profit making and struggling businesses operational.

    Better something than nothing in the coffers of local authorities.

  11. Adelaide

    HSBC imminent collapse?

    Can anyone verify the rumours doing the rounds in alternative media that HSBC has capped one-day cash withdrawals at 3k? That the world’s third largest bank has run out of cash?

    • Here is an immediate reply from someone beside the London Stock Exchange :

      ‘At present, they seem to be the least problematic bank for the majors. German Banks all seem to be in bad shape, as well as the French Banks.. this is probably one of the most stable in the world, as it presently stands, however, that can change in a heart beat if things get out of control with the derivative game. Counter party risk between the banks is so massive, we cannot even think about the consequences if something goes wrong.

      It is so completely insane it would curl your toe nails!’

      • cooldude

        The HSBC limit is real and is just the start of capital controls which will be implemented across western banking. This is a prelude to some sort of wealth tax/ bail in scenario which is now imminent. The Bundesbank called for this to be enacted on Monday and we will be hearing more and more of it. The derivative market is just one large casino except the people of the country will be liable if one of their banks loses its bet.

        • Good time to buy Bitcoin in that case.

          Should push the price higher.

          • An Economic Renaissance in Cork or anywhere else for that matter is
            totally impossible unless interest rates are allowed to revert to market driven levels.

            It was the artificial lowering of interest rates in Ireland effected by the ECB that caused the unprecedented boom in Ireland. It is established but not widely believed that artificial rates cause a dramatic misallocation of resouses. The economy becomes unsustainable and a bust ensues.

            There will be no recovery until the central bankers and the government stop tinkering and messing with interest rates and the monetary system in general.

            The chances of this happening is close to zero as most are enamoured of Keynes policy of expanding credit in a time of downturn. Expanding credit. lowers interest rates and the problem is continued and worsened.

            The ultimate solution is to change the government to one that fired the central banking system and let the economy regulate itself. This allows the entrpeneurial businesses to flourish and create wealth in society.

            Here is a paper comparing Keynes to the Austrian school of Mises, Rothbard and Hayek.

            The conclusions are inescapable. We have the wrong policies being pursued and must be changed immediately.

            http://mises.org/journals/qjae/pdf/qjae16_4_1.pdf

    • I sincerely hope this news is true.

      • cooldude

        Adam here is an article which discusses all of this. I think you will like these guys as they are into bitcoin as a form of protection.

        First Chase limited cash withdrawals and money transfers on certain business accounts, then HSBC told its customers they had to prove why they were withdrawing cash. After that Lloyd’s ATM’s stopped working and China banned cash transfers and foreign currency conversions starting this week.

        We’ve covered the global trend towards capital controls in western nations, and we are unsurprised to announce the trend is only getting worse for savers. As we’ve predicted in the past (and been right), this will only get worse.

        Now the Central Bank of China has ordered its commercial banks to suspend cash transfers for three days and foreign currency conversions for nine days starting January 30. This during the Lunar New Year Holiday, a time usually busy for banks in China.

        The ban affects every commercial bank in China, and will cease domestic renminbi transfers from January 30 to February 2, and conversions of renminbi to foreign currency to February 7.

        Forbes published the following “Important Notice,” sent by Citigroup to its customers in China:

        Important Notice:

        1. Due to the system maintenance of People’s Bank of China, Domestic RMB Fund Transfer through Citibank (China) Online and Citi will be delayed during January 30th 2014, 16:00pm to February 2nd 2014, 18:30pm. As to the fund availability at the receiving bank, it depends on the processing requirements and turnaround time of the receiving bank. We apologize for any inconvenience caused.

        2. During Spring Festival, Foreign Currency Transfer Transaction through Citibank (China) Online and Citi Mobile will be temporally not available from January 30, 2014 18:00pm to February 7, 2014 09:00am. We apologize for any inconvenience caused.

        If you have any enquiries, please reach us via our 24-hour banking hotline at 800-830-1880 or credit card hotline at 400-821-1880. If you are calling from other parts of the world, please reach us at 86-20-38801267 for banking services or 86-21-38969500 for credit card services.

        The maintenance is taking place during a peak period for Chinese banks, during the week-long Lunar New Year holiday, beginning Jan. 31.

        What’s likely is that China’s policy is aimed at lessening the impact of a shockwave to be set-off by a default in China’s multi-trillion dollar “shadow banking system.”

        HSBC HALTS PALTRY TRANSFERS, NOT LARGE ONES

        HSBC has also recently implemented de facto capital controls on its customers. One HSBC customer, Stephen Cotton, was reduced to writing different amounts out on pieces of paper, until the bank agreed to an amount.

        “So I wrote out a few slips,” Cotton told BBC. “I said, ‘Can I have £5,000?’ They said no. I said, ‘Can I have £4,000?’ They said no. And then I wrote one out for £3,000 and they said, ‘OK, we’ll give you that.’”

        According to HSBC customers, they have been stopped from withdrawing “large” amounts of cash “because they could not provide evidence of why they wanted it.” In reality, the amounts are paltry.

        HSBC admits there has been a change in policy: customers must give reasons for withdrawing paltry sums. The bank says it did not need to tell any customers simply because the new practice did not entail a change in their policy.

        Mr. Cotton needed £7,000 from his instant access savings account in order to pay back a loan from his mother. Just one year ago he had no trouble withdrawing the same amount.

        But, he could only get the £3,000 out of his account. When he asked if he could back later in the day, the bank told him he could not do the same thing twice in one day.

        Mr. Cotton has been banking in that branch of HSBC bank for 28 years. “They all know me in there. You shouldn’t have to explain to your bank why you want that money. It’s not theirs, it’s yours.”

        And that’s where he’s wrong. The bank doesn’t consider it his money.

        Another individual, Peter from Wiltshire, had a similar problem.

        Wanting to take out £10 000 cash from HSBC to pay to his sons and some to fund his long-haul travel plans, Peter rang the day before to give HSBC notice.

        Everything seemed fine until the next day Peter got a phone call from his local branch. They said they needed him to send the money via a bank payment and to provide booking receipits for his holidays.

        Another customer, Belinda Bell, was required to provide a builder’s quote before she could obtain her funds to pay him.

        HSBC said the policy change was to better serve their customers.

        “We ask our customers about the purpose of large cash withdrawals when they are unusual and out of keeping with the normal running of their account. Since last November, in some instances we may have also asked these customers to show us evidence of what the cash is required for.”

        “The reason being we have an obligation to protect our customers, and to minimise the opportunity for financial crime. However, following feedback, we are immediately updating guidance to our customer facing staff to reiterate that it is not mandatory for customers to provide documentary evidence for large cash withdrawals, and on its own, failure to show evidence is not a reason to refuse a withdrawal. We are writing to apologise to any customer who has been given incorrect information and inconvenienced.”

        Douglas Carswell, the Conservative MP for Clacton, said of the new HSBC policy: “All these regulations which have been imposed on banks allow enormous interpretation. It basically infantilises the customer. In a sense your money becomes pocket money and the bank becomes your parent.”

        Lloyds TSB, another major bank in the UK, recently suffered a “glitch” which kept customres from accessing their accounts.

        “What is going on is known as a ‘glitch’ for now, and perhaps as ‘preemptive planning’ depending on who you ask,” Zero Hedge reported on the issue. “Sure, in a few months it may be called a bail-in (see Cyprus), but we will cross that bridge when we get to it.”

        Time-and-time again we are covering capital controls being instituted. We shouldn’t really take any credit for predicting these unfoldings. We were in good company, as the International Monetary Fund only recently published how it anticipated your savings would be stolen. It doesn’t matter if there was some government decree or not. All that matters is the facts on the ground. And the facts on the ground, from my perspective, are that people all over the world are having difficulties accessing their money. Hence, capital controls by stealth.

        They’re here, and they’re very real. Where was your money when it was too late? To learn more about creeping capital controls worldwide, and how to defend yourself, click here.

        Anarcho-Capitalist. Libertarian. Freedom fighter against mankind’s two biggest enemies, the State and the Central Banks. Jeff Berwick is the founder of The Dollar Vigilante, CEO of TDV Media & Services and host of the popular video podcast, Anarchast. Jeff is a prominent speaker at many of the world’s freedom, investment and gold conferences as well as regularly in the media including CNBC, CNN and Fox Business.

        To unsubscribe, click here.

  12. pauloriain

    Great article David. Having lived there for 2 years, while studying I can but agree about what a great place it is.

  13. We talk about a lack of demand in the economy on the side of the consumer and the high rates that retailers (who are also consumers in their personal lives) must pay being just one problem they face in keeping their businesses afloat.

    What really baffles me though is that for 3 days in July, 240,000 Irish people (temporarily transformed into screaming maniacs) will somehow find nearly €16 million quid (average ticket price €65 multiplied by the capacity of Croke Park (80,000) three times over) to blow on an orgy of overblown nonsense that will be the Garth Brooks concerts.

    Of course a lot of people will buy their tickets on secondary ticket selling sites (Brooks added a third date within minutes this morning) because the touts have already snapped up a large proportion of the early released tickets, and some of those lucky punters will pay in the hundreds of Euros or more to get in.

    So €16 million on tickets is conservative – probably more like €20 million plus. Then add in all the food, drink, drugs, travel costs and accomodation and you’re probably looking north of €30 million at least.

    All for the chance to stand in a field of 80,000 drunken twats, watching a guy that looks as big as an ant to most, singing over-rated songs.

    No wonder this country has problems. We can’t even look after children, the elderly and the disadvantage, but instead, in the Age of Austerity, we choose to piss €30 million quid down the drain in Croke Park this July. Wonderful place.

    I think Moses had something to say about this kind of think once, after he came home from a ramble on some mountain or other.

    Bread and circuses indeed Deco.

    • michaelcoughlan

      Thanks for this reply Adam.

      The people in the UK on the right side of the 600:1 ratio will never be persuaded. Change comes from the bottom up. Your personal example is the answer. No loans where possible . Spend from savings. Make ethical purchases where possible as your means permit. Use sound money.

      Also at almost 42 I’m currently going down the road of trying to continue to implement the Mondragon capitalist/socialist hybrid model where the ratios defined above are controlled to a pre agreed maximum. Asset locks are also part of the ans In the m&a to prevent an asshole like dr oreily from asset stripping telecom eirean for example. I am really passionate about this and have decided to reinvent myself by leading by example ad you, brogan, McWilliams. Rr6 have shown over and over again.

      Thanks and regards,

      Michael.

      • Michael, you should make sure that the Limerick co-op accepts Bitcoin as a form of payment.

        It’s easy to set up and it’ll be another way to get away from the banks.

        There are only about 10 businesses in Ireland accepting it so far but thousands worldwide.

        You’ll be ahead of the game.

        See here: http://coinmap.org/

        PS. I’ll be 42 myself in September.

    • Bamboo

      Adam,
      Do you not think these numbers of “screaming maniacs” are highly inflated and sensationalized? The promoters and media have six months to hike up the excitement.

      My observations with these events are that there is a concert for three days but in fact it is a “one night only” concert so you can get tickets for the one night only. Then due to phenomenal demand an extra night is scheduled in. Six months later the public has forgotten that a three-day concert was promoted initially.

      Am I being too skeptical here?

      • Bamboo,

        Have the promoters and media managed to hike you personally into a frenzy of excitement?

        Did the hype work on you? Thought not.

        Apparently it was €60 million on tickets, not €30 million, so my calculations were off, and the cops were called yesterday to an outlet in Limerick where fighting broke out over tickets.

        Barbarians I tell you, and ignorant ones at that. The culture in this place is SICK.

        (PS. I’ve nothing against Garth Brooks personally, I’m sure his music is reasonable and he’s perfectly well entitled to relieve 204K fools of their cash).

    • Adam
      Where does the money come from if all are so broke?
      I remember reading that during the ‘great depression’ cinema sales went through the roof as people viewed films. People had to have a distraction from the daily drudgery. Perhaps that is what is happening today.

      • 240K fools sorry.

        Yeah, Tony, these are the same people who will be crying that they can’t pay their mortgage at the end of the month while Garth is laughing all the way to the bank.

  14. Where is ‘Furrylugs’ …a famous Corkonian ?

    • Still here John. Over and on the side, as our American friends would say. I had a peculiar experience the day Lloyd’s ATM’s went awry. My Lloyd’s debit card reported that it was out of date to the POS terminals when I tried to pay for goods. Now it’s back working fine again. The net effect was denial of access to my account which ties up with the posts above. Very odd.
      If I knew our host was strolling around the Straight Road, we could also have had a conversation about the Kingsley, built below river level, flooded and shut but recently bought by Chinese investors. So we have American Multi nationals to the East of Cork City and their Chinese Bankers to the West.
      Is Cork going to be the next Singapore?

  15. “As I walk down South Mall, half the place is empty, and Oliver Plunkett Street is the same. At what stage do you look at it and say: ‘What are we going to do about the rates?’”

    How much of the operating cost of a building as a percentile are the rate?
    Who pays the rates? Tenant or landlord?
    There is no mention of the level of property rental which is set by the market and the landlord/owner.
    surely a reduction in the rent to the tenant is a greater issue than the rates.
    I am not familiar with the practice in Ireland.

    Here in Victoria there is what is known as a rental plus triple net.
    TThat is the tenant pays
    A basic negotiated rent
    Plus a pro rata share of the property taxes (rates?)
    Plus a pro rata share of the Insurance costs of the building
    Plus a pro rata share of the operating maintenance share of the building

    The three plusses above are the “triple net”

    A tenancy can be rented as a gross rental (no triple net additions)
    or as a single or double or triple net depending on the style /type of building and the differences in landlord and tenant.

    It seems to me that from a casual observation that there is something wrong with the system when a landlord/owner would rather leave the building unoccupied than reduce the rent to have an occupancy of some kind and have some cash flow. I do not see rates as the major issue.

    • michaelcoughlan

      hi tony,

      The rents here in many cases are controlled by the pension funds who own the property and won’t let the rent drop. If a tenant signs a full renovation and insurance lease the tenant pays everything.

      Michael.

      • Now I see pension funds owning shopping malls with the major tenants/franchises, but what about the high street shops nailed up and vacant.

        In any case, there is no income for the owner and sooner or later they will have to sell the property, declare bankruptcy or / and or lower the asking rent to attract tenants.

        The last time I saw much of this in the early 70′s it was common for the owners to offer a rebate of 3-6 months initial rent to cover some of the cost of tenant improvements necessary to get the business operational.

        Why is this not happening. One reason is perhaps that the building are not financed and there is no mortgage payment so the owner can afford to hang in a little longer.

        BUT do you agree that the rental costs out weigh the rates?

        • Last year I was in Holsworthy a small market town in North Devon and the shop keeper said she was having a tough time as business was off 25% and she was barely covering costs.

          She said that the shopping malls in the larger centers had killed the local businesses and everyone had a similar problem.

          My cousin in Somerset for years ran a local grocery store and finally closed it. They were ok as their house was above the store on the main street and paid for. The store is now a general living area.

          • michaelcoughlan

            I worked in london in 1990 for the summer and was paid a gross wage of £71 per day as a general operative. The general operatives are now paid today in London £70 per day 24 years later.

        • michaelcoughlan

          Hi Tony,

          The reason the shops aren’t opening is in keeping with Davids observation in the English market. People have very little disposable income left and there isn’t enough spend to keep those retail units open and profitable. Dun Laoighre is a ghost town as David highlighted some time ago. Same problem.

          • “Very little disposable income left”!

            Haha that’s a corker Michael!

            240,000 of them have plenty of disposable income left to spank up against the wall at Croke Park in July, wailing in ecstacy to the sounds of Garth Brooks!

            They can barely contain themselves at the prospect of Garth fleecing them for his pension scheme.

          • ’tis a conundrum Adam. How do you account for it?
            Those with jobs have plenty while those that do not have nowt.??

          • Hi Michael
            How is it the rates are quoted as being such a concern but the rental price is not.?

          • Pig ignorance is how I account for it Tony.

          • michaelcoughlan

            hi Tony,

            Rates are set by the council a state arm whereas rents have to be set in accordance with supply and demand. IF the rates don’t get paid the council takes you to court. If the rents don’t get paid the landlord will negotiate or lose a tennant.

          • Michael, but the rent amount is much larger than the rates charged. If a lower rent does not attract a tenant then there is just no business to be done at a profit to the business person. Is that the way it is?

            In that case people should be able to occupy the stores as a residence and there is a stock of reasonable priced housing and the owner of the property will get some rent return there.

            Fill the downtown high street with residents like it used to be. Live and work in the same premise as used to be done. Return of the butcher , the baker, the candlestick maker!!

  16. US, China and EEU all face deflationary forces.
    Can anyone say “competitive devaluations” of currency.
    The last 12 months has seen the Canadian dollar down against the US by 11%. The Australian by 18% while the euro are up about 1% and the pound 3-4%. Maybe those emmigrants should stay home??

    http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10605957/World-risks-deflationary-shock-as-BRICS-puncture-credit-bubbles.html

  17. There has been quite a bit of commentary on the “two economies”
    On the hand full of people who control half the world’s wealth and income.
    On the rich getting richer and the rest of us poorer.

    There is a body of thought that the way out of the financial crisis is to offer more credit, to increase the money supply, to bail out the banks etc.

    No thought of commentary has been offered as to what the basic problem is. Nobody on this blog at least and including our host has examined the money supply, the creation of our money and how it is formed.

    No analysis by one blogger here has taken the challenge to look at and discuss the facts as follows.

    There is a monopoly in the creation of money on a national basis or European basis.
    Each country has the same monopoly instituted except a handful which incidentally have been or are currently attacked physically by larger powers.
    Each country with this banking system has a central bank as the principal administrator of this currency
    The central banks operate monetary policy of the respective countries without direct government intervention.
    Gov

  18. There has been quite a bit of commentary on the “two economies”
    On the hand full of people who control half the world’s wealth and income.
    On the rich getting richer and the rest of us poorer.

    There is a body of thought that the way out of the financial crisis is to offer more credit, to increase the money supply, to bail out the banks etc.

    No thought of commentary has been offered as to what the basic problem is. Nobody on this blog at least and including our host has examined the money supply, the creation of our money and how it is formed.

    No analysis by one blogger here has taken the challenge to look at and discuss the facts as follows.

    There is a monopoly in the creation of money on a national basis or European basis.
    Each country has the same monopoly instituted except a handful which incidentally have been or are currently attacked physically by larger powers.
    Each country with this banking system has a central bank as the principal administrator of this currency
    The central banks operate monetary policy of the respective countries without direct government intervention.
    Governments are reduced to fiscal policy only. (one can argue that governments and central banking should have nothing to do with an economy and as such all actions are meddlings and distortions)

    Except for the coin in your pocket which is an asset and commodity money all money is issued into existence as a debt.
    That is, it is loaned into existence.
    These loans carry interest, therefore all the money in your account or wallet or in digital form is being charged interest.
    This means that the nations money supply is subjected to constant erosion by having to pay this interest.
    This erosion in the money supply must be made up to keep the money supply static.
    To do this another loan or series of loans must be made.
    This increases the amount of interest to be paid and deducted from the money supply.
    At this point in time the interest portion of the economy is so large as to be unable to be paid. The debt for which this interest is charged is now multiples larger than the gross domestic output of the world’s economy.

    In a desperate attempt to stop the money system collapsing more is being added at exponential rates. As this money is also a debt it means that as the money supply is accelerating in a bubble fashion so is the overall debt.

    When this money is issued it inflates the money supply. This is the correct definition of inflation.
    The early/first recipients of this money get to spend it at par.
    Who gets it first.
    The banks get it to pad their reserves.
    The crony capitalists get it a close second.
    That is the privileged few get it and profit from it.
    All those financial assets blow into bubbles and the top employees receive huge bonuses and share issues.

    The regular worker receive the same paycheck but in inflated money which has been devalued relative to the goods being bought. The middle class and the rest get poorer and poorer relative to what an hour of their labour will buy.

    This happened in the 1920′s and resulted in the Great Depression.
    It is happening today and resulting in the Greater (greatest) Depression.

    Nothing being done today is of benefit.
    What else can be done?

    It seems to me that the money system foisted on us by the banker elites is the cause of the problem. It is designed to do exactly what it is doing.
    It is allowing the productive power of the people to be stolen which is being accumulated buy the banking elites. These people impose the austerity to pay off the debts by the selling of assets countrywide. These assets are being bought with the interest accumulated by the bankers. We the people are financing our own destruction.

    The bankers affiliates now own reportedly about 30% of the world economy. They want it all.

    The exit strategy is to remove the current money system.
    Replace it with a non debt system that charges no interest to exist.
    A sound , honest money rather than the corruption we have today.

    What that system should be has been expressed here several times and will be again. Later>>>

  19. “Quantitative Easing has been nothing more than a payoff awarded to the One Percent. $85 Billion dollars a month for years paid to the One Percent. This has been the biggest transfer of wealth to the richest Americans in history. That money, however, was not a free gift, for it has been paid for by the middle class and the poor, and it will continue to be paid for by the middle class and the poor.”

    http://www.soundmoneycampaign.com/news/feds-growing-bubble

  20. “What we are witnessing is our central bank pulling out all stops on integrity and lawfulness in order to serve a small handful of banks that financial deregulation allowed to become “too big to fail” at the expense of our economy and our currency. When the Fed runs out of gold to borrow, to rehypothecate, and to loot from ETFs, the Fed will have to abandon QE or the US dollar will collapse and with it Washington’s power to exercise hegemony over the world.”

    http://www.paulcraigroberts.org/2014/01/17/hows-whys-gold-price-manipulation/

  21. Another way a national bank can be opened and operated is like the bank of North Dakota.
    The bank is simply opened ans issues state money.
    It does not operate against the other banks but is complementary to them.
    It can be the depository for all government receipts and be impervious to a bail in/out or other sanctions.
    It acts as a secondary lender for Irish business enterprises that operate domestically,.
    The infrastructure is already there in the national post office.

    http://ellenbrown.com/2014/01/29/enough-is-enough-banksters-are-not-l-a-s-only-option/

    • michaelcoughlan

      Bank of north Dakota Operates on cooperative principles as far as iknow.

      • I do not think it is coop style Michael as it is owned by the people through the government.
        Profits are returned to the state but it is operated as a business. I am not aware that people can become a member and receive dividends according to what the bought.
        It has directors appointed through government I believe.

        But a worthy subject for our host to examine as a solution to local problems and to bolster local economies.

        Cork/Dublin could have their own banks. Deposit all taxes and be safe from bailin by the big banks.
        Time for a debate on the money system. It is the transport pipeline for the lifeblood of the economy.

        In fact anyone can set up a bank given enough resources, even your local coop, Michael. It can issue its own money.

  22. SLICKMICK

    60 % of the staff working in Pay Pal Dundalk are non Irish, why give grants etc to companies that want to recruit fluent Norwegian and Finnish speakers ? The Telesis Report 1981 found few linkages between MNC’S and the domestic economy, higher salaries in MNC’S made working for low wages in domestic companies unaffordable for many .
    MNC’S sell little domestically, if the Irish consumer disappeared , they would hardly notice. Do multinationals train stff are or do they just recruit tried and tested experienced staff ?

  23. Atomic Revelation

    When the whole Truth about the structural defects and serious leaks in Sellafield are made known then Cork will be the beneficiary and Dublin will be ………ether .

  24. Mike Lucey

    There are a number of state publicly owned banks in the USA but the North Dakota bank gets the headlines.

    In order to keep on topic somewhat, about Cork, I would like to mention the Clonakilty Favour Exchange. Its basically a local ‘time bank’. This type of small scale localised peer to peer bartering / trading is gaining momentum in many western countries as more and more people start to see commercial banking for what it is ….. debt enslavement.

    The link to the Clonakilty Favor Exchange is here, http://www.clonfavour.com/p/origins-of-cf-time-banking-and-lets.html Its a nice, well put together, site that is worth a visit. Hopefully more of these time banks will spring up in local communities. The beauty of localised time banks is that they can be set up and got running by locals for locals. I could also see them tie into local Credit Unions at some point.

    We really have to get back to basic here in Ireland and get on with the important things, living reasonably comfortably and help our community members to do likewise. The quicker we forget about the Celtic Tiger that was really a mirage, the better off we will be.

    The possible downside to time banks from what I can see is that they do not lend themselves to SMEs so well. However there is a bank system that has been working well in Switzerland for the past 78 years called Wir Bank Swizerland. Its a barter exchange bank.

    Here is a You Tube video that explains how it works, http://www.youtube.com/watch?v=RAAFGcBra5A

    The video has one comment by a Fran Rew but its a good one!

    ‘I think the WIR Card could be better titled “Employment Transaction Card” (J-Card for short). The WIR Card over its 78 years of development has increased employment and reduced bankruptcies since it began in a time of depression in 1934, servicing the 1% of their population that represents small and medium sized business owners. Now that technology has advanced, a customized J-Card could represent 100% of any population. Topic-Talk Walks is conversationally exploring the J-Card possibility.

    Current banking systems are clearly not working for us here in the EU and it appears world-wide. Rather than trying to ‘invent’ new systems why not simply look around and see what is working well for others. Then copy these successful systems and tweak them (improve) to suit the Country’s needs.

    I think as long as we leave politicians and more so ‘unanswerable’ higher civil servants out of the equation the better the chance of success. So it could well be the case of starting small with local Time Banks and building from there.

    I basically trust the combined wisdom of the general population to do what it right for the general population and I really think Switzerland would be a great place to start lo for ideas.

  25. Trapped

    Interesting video regarding “your” money when the bank has it on deposit. Info on the Bank of North Dakota also.

    Worth watching and informative for thirteen minutes.

    http://youtu.be/jPsOopzp7e4

  26. SMOKEY

    http://www.youtube.com/watch?v=tJH2CcpXztE

    IF THIS DOESNT MAKE YOU LAUGH NOTHING WILL, AND ITS ON SUBJECT!!!!!!!

  27. cooldude

    Seems like there is a bit of over if not hyper inflation creeping in yet again. But it could never happen here could it??

    http://www.zerohedge.com/news/2014-01-31/not-so-subtle-hint-argentina-may-be-un-fixed

  28. How can there be an economic renaissance in Cork when the rest of the world is heading to the greatest depression. Misallocation of resources is rampant with the banks dictating and controlling economic activity.

    There is no such thing as a free market and the banksters are in full control. If the people do not wake up quickly a new form of feudalism will be upon them and the lord of the manor will be the bankster.
    ——————————————————————–
    Dave from Denver…

    UNREAL! The SPX goes from down 17 to down 3 and gold/silver get trashed badly – all on horrible news for stocks and great news for the metals.

    The Fed has taken complete control of the markets. They can’t control bursts of hedge fund dumping, but they can stabilize and fix it very quickly now.

    Our system has capitulated into complete totalitarian control by the Fed/US Treasury/ESF. This is a very bad development for the people living in the U.S.
    I bet within 6 months to a year, after Obamacare completely crumbles under the weight of failure, we are going to see political and societal lock-down that will blow your mind.

  29. [...] in Ireland and, most comically, the “straightest road” in Ireland. " An Economic Renaissance in Cork? | David McWilliams Sign in or Register Now to [...]

  30. Stop Right There

    In the article written by David on 9th December , 2013 I entered the following :

    ‘There is no time to celebrate now instead it is a lost time to prepare for what is now ahead .
    Full Moon is on Monday 16th December and the fiery climate and unease will escalate to peak then just as we exit that day from the Bail-Out .
    This uneasy energy will not be dismissed because later in January 23rd will be a Peak Day for the next Moon Wobble ( the last wobble occurred in Philippines ) .All this nervous energy will continue and will mark in our History a great event good or bad .Time will tell . We will all feel it .All January 2014 is one Dark Moment .
    Bail -In is more appropriate as what might happen next and the Minister may decide to shut up certain Irish Banks and rob depositors of their monies .A new bankers signed convention in EU allows restructure by a Minister depleting all bank deposits to zero . Omerta or silence seems to be the modus operandi of the Government .
    We need to ask why that Omerta also prevails in the Central Bank.’

    Moon Wobble as we have since now learned did arrive in January and has made its physical mark on our national landscape .

    When will the Economic Academics finally carry the baton from Galbraith and learn to ‘Predict’ ?

    • When are you going to put a Cork into it?
      How does this affect a renaissance. A renaissance looks moon wobbly to me with all those vacant premises?

      • Dorothy Jones

        *When are you going to put a Cork into it?*
        Eh….pot….kettle….black

        • Lighten up Dorothy ,you are too black.

          Putting a Cork (with a capital Dorothy), was just making sure John was not banned for not being on Topic.
          So you see Dorothy putting a Cork in to it was a sure fire way to allow John to keep wobbling.:)
          Now he can wax forth about his wobbles without waning from view.
          I imagine we are all a little on the lunatic side but I really prefer the full moons.

    • “Moon Wobble as we have since now learned did arrive in January and has made its physical mark on our national landscape .”

      Please explain the above.

  31. redriversix

    Hello..any craic ?

    Whats happening ?

    Cork is mighty

    All this economic stuff is just funny now..don’t know why..cant help smiling at the moment..all ridiculous.

    I mean.. what does it really matter ? Dave wants to censor the blog..Great ..So ? doesn’t matter

    its all a bit of craic.

    We will still have good days & bad days..life will go on ..even if you have a bar-code on your arm.

    Some great People on here I have had the pleasure of meeting,Grey fox,Dorothy , Adam,Tony, Philip..great reading some posts..some funny some sad…some “out there” but sure ….what harm ?

    John Allen..always enjoyed your posts..even about moon wobbles..although I haven’t had a moon wobble since I got sober..!

    Lots a great People.passionate concerned educated… hell even some academics..all great.

    Bottom line Folks..? The World Is Changing..and not in a good way.

    This crisis will stumble along now indefinitely with some ceasefires in between

    What does it really matter..There is too much debt.Debt is promoted as good. Ponzi schemes are now okay.

    Banks will get stronger..Bankers WILL get their Bonus and all will be well.!…for them.

    Forget Governments , or Parties or Politicians..they do as their told..That’s it..no more no less.

    War on Terror is a myth..its a money makin racket

    World Hunger is a policy..why ? has to be ! look at evidence.

    Just take care of yourself , your family,feed , heat, clothe.& shelter yourself & those around you. Help those who ask for help and let go of those you cant.

    If David is moderating comments…so what ?..nothing lasts for ever..everything passes , both good & bad.

    A wise man shall learn more from his enemies than a fool from his friends !!

    Live one day at a time

    Do the best you can

    worrying is a waste of time unless ” misery likes Company” is your thing.

    Shit happens…I know..That “black dog” is a fucker when he visits so I know the craic

    Have a great day

    P.s

    trying to set up a business working out of Europe..fingers crossed.

    Talk to you all soon

    Don’t forget to have fun…sometimes I do

    Peace

    Barry
    RR6

  32. michaelcoughlan

    hi

    “trying to set up a business working out of Europe..fingers crossed.”
    give us your email have some good pointers re your initative.

    Michael.

  33. @Tony Brogan & Dorethy

    Maybe the best way to explain how the recent natural disturbances arrived to our shores can be explained as follows in simple english :

    December 2013

    A Week B4 the full moon is the normal monthly gravity pull and by the time of the full moon around the 17th Dec the moon should ‘wane’ for two weeks .This happened .

    However in January 2014 a Moon Wobble was already predicted for peaking on the 23rd January and a full moon on the 16 th January 2014 . What happened was when the Full Moon peaked on the 16th afterwards it was not allowed to wane for two weeks and was disturbed to enter a moon wobble to peak on the 23 rd and complete on the 2nd february 2014 .

    Unfortunately also in Feb 2014 the full moon is the 14th and the moon must rise immediately from the 2nd ( not allowed to wane for two weeks as normal ) thus the Moon remains disturbed and angry due to the prolong period of not being allowed to rest as it normally does every month .

    My reading is that this unsettling period begins a normal pattern from 22nd Feb.

    You can find out about the definition of moon wobbles using the internet .

    • Not sure what you are talking about here John but I googled moon wobbles and gather it has something to do with variable orbits one planet/moon to another. What this has to do with the waxing and waning I have yet to connect.
      I expect that given time I will absorb a little more understanding. Thanks for the insights.

  34. Moon Dust has a greater value than Gold . Maybe its thoughts are worth knowing and might get you there .

You must log in to post a comment.
× Hide comments