July 3, 2014

Capital needs an elected mayor to act as a playmaker in the economic World Cup

Posted in Global Economy · 56 comments ·

Ireland is involved in a competitive fight with the rest of the world, for every piece of business, all day, 24/7 in every market. Unless we appreciate this, we will not create the right environment to foster companies that can design products that are good enough to sell for a profit.

Watching the World Cup made me think of how similar global economics is to sport. If you want to compete with the best, you have to aspire to be the best. The teams that progress are playing the game at an intensity rarely seen before, but it is not just about intensity and fitness levels, it’s also about creativity, guile and subtlety. It is about playing to your strengths and preventing the opposition playing to theirs.

Companies are involved in a similar struggle and so, too, are you. If you are not aspiring to be the best at what you do, a combination of technology and competition will cut you down. The same goes for companies and, ultimately, for countries, regions and cities.

Without economic profit, without being able to sell your services for a profit, the region where you live will not be able to generate the revenues to pay for the hospitals, schools and safety net people aspire to. We can’t go on like Ireland indefinitely, borrowing and thus enjoying a lifestyle that is rented not earned.

Central to this idea of sustainable prosperity for all is productivity for all. That means producing better stuff per hour worked than your competitors do. This means being innovative. It means coming up with products that are better. It implies undercutting the existing players, deploying disruptive technology which makes their products obsolete or, better still, create a demand that was not there before.

In order to do this, you need the type of people who want to take risks. You need the people who don’t want a wage, an insurance policy, who don’t necessarily think their job is good because it has a permanent pension. These type of people are not everywhere, and it is not for everyone, but without the people who want to build companies you simply have no economy.

Government can’t do this. It can foster the environment which may be conducive to these type of people but it can’t do it. Encouraging self-starters doesn’t mean anything as idiotic as suggesting there is no role for the public sector, it simply means working together.

The State is crucial. After all who created the Internet? The American military did, financed by the tax dollars of millions of ordinary people. The chief R+D agency of the US is not Silicon Valley, but it is the US government and the millions of bright American students who are educated in the state system, who drive on state roads, who breathe fresh air guaranteed by state legislation on the environment. I could go on but you get the point.

Where is this innovation and creativity happening?

It is happening in cities in what the Americans are now calling “Innovation Districts.” I have just read a very interesting paper by Bruce Katz at the Brookings Institute in the US. Katz is one of the foremost experts on how cities pick themselves up off the deck, dust themselves down and re-emerge in this new technological age stronger than ever.

I was lucky enough to hear him at the Dalkey Book Festival where he suggested that, contrary to much local opinion, a town like Dun Laoghaire could be on the cusp of a brilliant regenerative spell.

His angle on cities is this: that if we look around the world from Barcelona, Montreal, Stockholm, Pittsburgh and even Detroit, we are seeing a new type of industrial hub emerging which is in the old city districts, well connected by rail and buses, where people can live, love, work and hang out with each other, these are the districts which are thriving. Silicon Valley is not the future; it’s the past. The notion that we’ll drive out to a new suburb like Silicon Valley in the future, even if it is beside a great university, is passé.

The Americans are talking about an “anchor-plus” model of development in an innovation district. The anchor in this case is a well-recognised name such a Google or Facebook. Around these anchors, smaller companies can set up, many initially sell their services to the anchor tenant. As the large anchor employs people, there will be a market for the right sort of people and this will of itself attract more people of the same outlook. This is what Dublin’s Silicon Dock is all about. But we are in competition with other cities.

Take Detroit, for so long the dystopian landscape of Eminem’s angry rap; once the wealthiest city in the US now shorthand for decay, with some suggesting it was “a microcosm of everything that is wrong with America”.

But Detroit is moving again. For example, this city of just over four million had a GDP of $220bn (€161bn) for 2014, greater that Ireland’s total income, one year after the city declared itself bankrupt, defaulting on its municipal debts – the biggest bankruptcy in American municipal history.

Detroit is now emerging as a competitor to Dublin. Like Dublin it is host to a whole range of companies in emerging technology fields, such as life sciences, R&D, IT and advanced manufacturing. Michigan State has over 568,000 high-tech workers, including 70,000 in the auto industry. The mini-boom in Dublin’s Grand Canal Dock mirrors that of Detroit’s downtown area – home to the likes of Google, IBM, GM, GE, Verizon, JP Morgan, Bank of America and KPMG.

So, Dublin has to keep doing the right thing. This is why it needs a directly-elected mayor with executive powers to run the city. It needs someone who gets up in the morning and is thinking about the city when he or she is brushing their teeth. Without someone putting the city first, and understanding that cities drive economies not the other way around, Ireland will slip backwards again.

We are in an economic World Cup competing to be the best. We need someone pulling the strings, setting out the vision and taking responsibility. A city without a powerful mayor is like a team without a brilliant manger. Can you imagine entering the World Cup without a manager? Need I say more?


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  1. VincentH

    The difference between Detroit and Dublin/Ireland is that she defaulted on debts owed to city workers who trusted the city with their old age. Had we done that on all PS pension above €20,000 until the tax base came good again we’d have solved problems far earlier.
    The DSP helps unemployed only after making certain the PS pensions are paid.

    • michaelcoughlan


      Did the oap’s in Detroit starve after the default? Just curious.

      David said in his article it’s not a public versus private battle people should be focusing on.

      Best regards,


  2. Limerick City Railway District

    I hope the Mayor of Limerick Metropolis reads your article and decides to Clean Up the immediate area outside the City Railway Terminal .

    Currently it provides the greatest retail growth potential in the city centre and already many foreign nationals have bought themselves into this new hub having already learned this from their experiences in other countries.

    • Colin

      Parnell street, Limerick should be demolished. Its such a disgrace. With a first impression like that, no wonder tourists coming off the train feel weary.

  3. dorn

    There’s one big difference between Detroit and Dublin. If Detroit goes bust it defaults/declares bankruptcy. If Dublin goes bust, the tax payer will have to pay every last cent. While the EU and our own government continue to undermine capitalism, capitalism will no longer work for us. And if we get a Dublin mayor cut from the same cloth as our Irish bankers and Irish career politicians then Dublin is going to go bust very quickly and quite spectacularly.

  4. DarraghD

    You know what any mayor job in the capital would become, it would become a cushy number retirement home for some insider clown. We would never find the sort of change enabling innovator with vision, that the role would need, to be of any use. And don’t ask me to believe that the fact that they have to be actually elected by the people of Dublin, would save us from having a small spectrum of gombeen politicians to choose from, just look at who is running the country.

  5. CorkPlasticPaddy

    Sorry David, but what about the rest of the country?? Dublin is not Ireland, but a lot of Dubliners think it is and as far as I’m concerned that’s ‘NOT ON!!’

  6. CorkPlasticPaddy

    Ever think of running for Mayor yourself, David?? You would be a whole lot better than some of the clowns there have been up to now??

  7. aidanxc


    I think you have a typo in the last paragraph:

    You said “A city with a powerful mayor is like a team without a brilliant manger” when I think you meant “A city withOUT a powerful mayor is like a team without a brilliant manger”

  8. Deco

    A powerful mayor is a disaster, if the person with power has far more power than ability.

    The one thing that both Dublin and Detroit are good at producing is useless, mediocre, often corrupt, “one for everybody in the audience” “pork barrel”, PR stunt driven politicians. And that is exactly what is going to happen.

    A far bigger problem than the mayor issue, is the failure to build Dublin like an actual city.

    The biggest problem facing Dublin is not the lack of a mayor. The fact is that Dublin is an inefficient suburban sprawl more than a urban entity. Dublin proclaims itself to be a city. But it is not a Barcelona or a Berlin. It is more a Denver or a Charlotte.

    Dublin has a ceiling on it’s development – the aversion to building above a second story in height. The fast majority of Dublin’s space is two stories high, and no more. This makes Dublin a very inefficient location. The urban density is not sufficient to make Dublin cost competitive, in the longer term.

    In the context of a world that is competing for hyrdo-carbons, Dublin’s inefficient planning is going to cause problems. Currently the only trump card is low taxes, in combination with dodgy loose rules. These will end. Then Dublin will be exposed for it’s cost based inefficiency.

    Nobody is talking about it. Given the power of the real estate sector, it seems that the topic is completely forbidden. It would discredit too many vested interests. It would undermine too many more.

    Let’s talk about Dublin’s housing density inefficiency…..because that is a real source of weakness with respect to the competitiveness of Dublin. Let’s talk about it to the disdain of corrupt planning officials, NAMA, the banks etc…

    • aidanxc

      Great comment. I totally agree with your observations. Given the decades of incompetent planning we now have an urban sprawl that is incredibly difficult to service with public transport and other services such as efficient telecom/broadband/water/electricity networks.

      On top of that most Dublin apartments are so unfit for family life that couples feel compelled to move to a house once they start having a family. Dublin apartments are, by and large, unimaginative, dark and cramped. Our planners and developers have a lot to answer for.

    • Boo H

      Similar reason that the metro/subway idea does not suit Dublin. Never mind the cost, building a subway to ferry people between low density areas is/was a trophy project.

  9. Deco

    Every time somebody makes an analogy to the world cup and Ireland’s competitiveness, I think of John Delaney and the Fluthered Association of Imbeciles…..

    Is the FAI a good analogy for Ireland’s inefficiency, and incompetence in respect of authority ?

  10. Most of the innovation of modern economies is about designing and producing overly complex rubbish produced in a stressful bullying environment which passes through consumers on the way to recycling plants and landfills.
    I think professional football is a very bad model for how society and economies should work.

    Professional Football is a small number people grossly overpaid to contribute almost nothing to society.

    Its the broken window theory.

    • michaelcoughlan

      Superb post. Faultless.

      Is there somewhere I could read more about the broken window theory?


      • cooldude

        Hi Michael, the broken window theory is another Keynesian fallacy which proposes that any sort of event which promotes government spending is somehow good for the economy. This is not just some harmless theory but an extremely dangerous one which is often used to promote warfare because it increases GDP. The very notion that humans killing other humans is somehow a sign of economic progress just shows what an anti human science centrally planned economics actually is. Personally it makes me puke but these guys keep spouting this type of disgusting verbal garbage. Here is an interesting article on this theory/fallacy and discusses Paul Krugman’s endorsement of this nonsense


  11. Adelaide

    Just to point out that Fingal County Council voted down the proposal for a Dublin Mayor a few weeks back. The idea will not be revisited any time soon.

    • Adelaide

      Similar to Bruce Katz.
      David, you may be interested in a book published last Christmas
      ‘The Turnaround Challenge – Business and the City of the Future’
      by Michael Blowfield and Leo Johnson.

      Interestingly its co-author Leo Johnson is London’s Mayor Boris Johnson’s brother.

      They predict three likely paths for cities into the future, from dystopian to utopian. Their ideas on the utopian set-up are interesting, other than that it’s a heavy read.

      Anyhow here’s a review. “A fast-paced, hope-filled yet deeply grounded tour of the innovations and technologies with the potential to resolve our era’s greatest environmental, social and economic challenges, where unrestrained business alone has clearly failed.” – David Rowan, Editor, WIRED magazine

  12. DB4545

    I think we’ve had this topic before. It boils down to effective democratic LOCAL Government. Why re-invent the wheel? The proven model that works is Switzerland. Divide the Country on a county/city basis with ELECTED county or city managers (call them mayors if you want) ACCOUNTABLE to taxpayers. Corkplasticpaddy said that the world doesn’t revolve around Dublin and that’s true. But Dublin doesn’t owe the rest of the country a living either. If Cork has an ELECTED county/city manager who’s effective at attracting inward investment and Cork prospers good luck to it and the same applies to any City/County/Region. My objection is to parish pump politics which other areas are made to fund from general taxation. A particular political family in Kerry have been very effective at getting tarmac on every boreen in their constituency which has a very low population. I don’t know if they’ve been successful in getting a 40 bed hospital up and running in Kenmare yet. We used to have the Shannon “stopover” bullshit. How much did that cost us in lost inward investment? This gombeenism diverts resources away from major centres of population and the whole Country loses. In Switzerland they’d be unelectable but we entertain this nonsense because they’re is no LOCAL accountability. The Dublin/Leinster region has the infrastructure to become a Singapore or a Barcelona if managed correctly. It doesn’t need gobshites trying to divert(and usually lose)inward investment to the arsehole of nowhere so that some gombeen gets re-elected. Remember the “decentralisation” fiasco and ask yourself how much that cost the State ie taxpayers. Switzerland has a system that works it’s not perfect but LOCAL accountability cut’s out the nonsense. Let’s just get on with it.

  13. The World Cup / Economics links are to do with Management Style and The Vision Thing. Engerland are rudderless because they think that by changing the actors you get a happy ending to the play, but it’s the script itself that needs a re-write. Ditto the Celtic fringe who don’t realise “you have to be in it to win it” and seem content with being armchair generals of other team’s battles. Stars like Messi only rise to incandescent greatness from a petri dish of creativity in tactics, preparation and planning which simply isn’t there for any of the teams of these 2 islands. Ireland also is going to find the rules of the game change and goalposts are moved ‘going forward’ and won’t be able to rely on previous kick’n'run tax match fixing strategies. Or something like that!

    Detroit is unconsciously prepping for Collapse by shrinking it’s abandoned de-industrialised zones to a smaller urban footprint to allow social amenities and services to become more efficient and targetted.

    It’s also first off the block with locavore food forests and farms, again with land reclaimed from abandoned industrial sprawl.

    Very sad that so many precious building were lost during the rot, but good to see that local heroes are also pledging to the future:

    Madonna Aims to Help Detroit Hometown by Funding Charities
    Singer is funding three non-profit organizations to benefit schools, after-school programs and the homeless.


    best wishes

    The BrummieGooner

  14. When the central bankers are removed then get rid of the central planners.

  15. Colin

    I think having our own currency based on sound money as advocated by Mr Tony Brogan is of far far more importance than the creation of a new elected mayor of Dublin.

    For the love of God david, will you please address it, or are you just playing the system and footering around the edges of it attempting to make a few cosmetic changes?

    • paddythepig

      The Irish are not capable of sound money.

      • Colin

        well paddythepig, I would say Paddy was far more delinquent in managing himself on the funny money. Look at poor auld Sean Quinn, a daycent craytur, now picking up the pieces of his life following allowing himself to get carried away with funny money ways. Then there’s Sean Dunne, sure he paid his wife tens of millions of €€€€ in return for ‘love and affection’ …… see what the funny money does to people paddy, it makes them do fierce quare things altogether!

        Ivan Yeats, Mick Wallace, and the rest of them in the tent at the Galway races…..and sure then you have the likes of Michael Lynn in a Brazilian jail now, and Breifne O’Brien soon heading to a jail at home. Sure paddy went mad on the funny money altogether!

    • Colin

      I think sound money is a ridiculous idea which will condemn the world to deflation for years to come. The model is 1860-1914 the Gold Standard which only worked because workers had no rightts!



      • McGoo

        I’m not a “sound money” advocate, but I don’t understand the connection you make to workers rights. What’s so great about the right to have the purchasing power of your wages constantly reduced through inflation? More explanation required.

        • cooldude

          I have to agree with Mr McGoo. During the 1860-1914 period of American history there was a constant increase in the REAL value of worker’s wages brought about by a mild consumer price deflation, which suits everyone just fine except for certain central bank supporting economists, and an increase in productivity. Unemployment was virtually non existent due to the constant innovation and the new industries being created.

          Contrast that situation with the last twenty years when the REAL value of take home pay is gradually being eroded by both inflation and he current fad of competitive currency devaluation. We also have the new fad of zero hour contracts which is becoming more and more the norm that global corporations are looking for. Youth unemployment is over 50% in many areas of Europe yet somehow this is supposed to be good for worker’s rights.

          This is a completely flawed statement and maybe we could have some facts to back it up?

      • Fat Tony

        SO why are so many central banks buying up gold – even Germany is moving its physical bullion from France and US to Frankfurt.

        • ha ha a joke yes?
          Germany asked for its returnyes. US has I recall 1900 tonnes of it.
          come for a chat says the US. Wow, Germany agrees to 105 tonnes to be returned or 7 years. 15 tonnes per year.
          What they actually received is 5 tonnes in the first 12 months.
          Hey , the gold is no longer there. The fox was in charge of the hen house.
          The US is bankrupt and sold, leased out their own gold. AND that entrusted to them as custodian of others gold.
          annual mine supply has averaged 2600 tonnes a year. consumption demand has exceeded 4000 tonnes a year. where do you think the balance came from the last 16 years. a 1500 tonnes shortfall a year. some scrap now gone but mostly western banks provided.

          A supply of 15-20,000 tonnes transferred from west to east. As there was only 32,000 tonnes in the west to start with there is 10,000 tonnes left if we are lucky.

          Germany and others who trusted Uncle Sam will never see that gold again. The economic power of gold moves east. together with the economic power will go the military power.

          We wake up too late to recover, without going back to work again to earn, what has been wasted since the 1944 Bretton Woods agreement

          You still have time to get insurance at 1350 us an ounce (300 12 years ago). At some point soon the insurance will be too expensive to afford. Just like when one gets old as I well know!!

          haha life is sent to try you!!!

      • michaelcoughlan

        Well well?

        At least we are getting somewhere regarding a knowledgeable commentator’s opinion on the gold standard. It begs an obvious question; Do you think what we have currently is better?

        Let me explain to you what I have been using as currency for the last 5 years on my mums small farm. Grass. Sound’s stupid and ignorant doesn’t it? The grass is worth about 1200 increasingly worthless Euros. However I have traded the grass for work done on the farm including hedge trimming, drainage, land reclamation, fencing.

        The euro price of course is zero which supports your valid observation that my very effective barter system has contributed to a collapse in the euro price to zero. Your observation is theoretical intellectual Keynesian NONSENSE.



      • michaelcoughlan

        “I think sound money is a ridiculous idea which will condemn the world to deflation for years to come”


        Japan have had 25 years of deflation and not a sound currency in sight?

        You don’t know the difference between GOOD Degflation and BAD deflation;


        Good deflation results from technological progresses, which initiates excess supply of goods.

        Bad deflation is an economic situation characterized by reduction in the prices not due to developments in the productivities, but because of a lack of demand induced by crashing down of the stock market.

        I love you to enlighten me if I am wrong so I can learn.



      • michaelcoughlan


      • You are completely wrong David. The standard of living for all people rose until the final abandonment of the gold conversion standard by Nixon in 1971. Since then our standard of living is 45% of what it was.

        The only reason we are going to have a deflationary bust is the result of the monetary inflationary booms induced by the expansion of the money supply the last 100 years and particularly since 1971.

        It is empirically evident that every credit based boom as advocated by yourself results in a bust. Your policy , David, is the cause of the bust, the deflationary depression we are living through that has yet to terminate.

        It is time, David , that the computer you carry in your head is wiped clean and you reboot your mind and start with a clean slate.

        your educational indoctrination has programmed you. Those of us without formal education are forced to think for ourselves and are coming to conclusions radically different from you David.

        Consider the fact you have been mislead, indoctrinated perhaps, and so ill informed.


        • michaelcoughlan

          Hi Tony,

          Very smart observation. University f*cks their head up with intellectual theories applied to real world problems.

          It’s a bit like the misfortunes who follow bonbon.



      • leonhardt

        You’re wasting your time replying to ignorant goldbugs who think Peter Schiff is a real economist. Fair play to you anyway for trying to educate them.

  16. McGoo

    >understanding that cities drive economies not the other way around

    I’ve thought about it, and I’m not convinced.

    Pre-modern-era, people living in large groups in close proximity created a marketplace where you could probably always find a buyer for your goods or services, and therefore enabled the specialisation that is the hallmark of modern civilization.

    But, with modern telecommunications, that physical proximity is just not required any more. Many, many specialised jobs (including mine and David’s) could be done from anywhere with a good internet connection. I can offer my goods or services to the entire world market, and the entire world of goods and services is available to me. Even though I live in a city (Cork) I often buy things online simply because it’s quicker and cheaper than driving into the city and paying for parking, or waiting in the rain for a bus that never arrives.

    Technology made cities possible, but it may also make them unnecessary.

    • The only thing you will never buy online is food. also cities will die without food and water which they must leach from the surrounding countryside.That is where the real economy is located.
      The production of nutritious food and the maintenance of clean, pure water will be the concern of all mankind. Ireland is uniquely placed to benefit from this coming requirement.

      Without the agrarian revolution of the last 250 years the industrial and technological revolutions could not have occurred

    • Hah Michael,
      Such a simple premise but none are so blind as those who refuse to see.

      I encourage you to post this essay on every article until there s an acknowledgement that the essay has been read and understood.

      Everyone should read it and the message shouted from the rooftops!!

      Have a great day tomorrow

      • One of the other themes is that there is no longer such a thing as a functioning market. This results in misinformation giving miss-signals resulting in misallocation of resources.

        Central banks and their sycophants are the main perpetrators.

        Central banks now rig all asset prices, Stockman says

        Submitted by cpowell on 03:18PM ET Sunday, July 6, 2014. Section: Daily Dispatches
        6:18p ET Sunday, June 6, 2014

        Dear Friend of GATA and Gold:

        Former U.S. Rep. and U.S. budget director David Stockman, interviewed by the Mises Institute about his new book, “The Great Deformation: The Corruption of Capitalism in America,” earns his tinfoil hat with a denunciation of the Federal Reserve.

        “The system we have now,” Stockman says, “is one in which the Fed decides, through a Politburo of planners sitting in Washington, how much liquidity is necessary, what the interest rate should be, what the unemployment rate should be, and what economic growth should be.

        “There is no honest pricing left at all anywhere in the world because central banks everywhere manipulate and rig the price of all financial assets. We can’t even analyze the economy in the traditional sense anymore because so much of it depends not on market forces but on the whims of people at the Fed.”

        Stockman’s interview is headlined “The Epochal Error of Modern Central Banking” and it’s posted at his Internet site, David Stockman’s Contra Corner, here:


        CHRIS POWELL, Secretary/Treasurer
        Gold Anti-Trust Action Committee Inc.

  17. Electromagnetic Default

    I am in agreement with the article in general terms .

    I would like to ask : Is this how we define Progress ?

    We as a society are becoming more dependent on the WWW and Internet and the Speed it brings . Collectively we all cannot do that .What happens if the Electromagnetic System in the World Defaults .How do we react and how will it effect us .

    This is more likely to happen and will be the first time it will have happened when our dependency on it will be greatest .The last time it happened was 150 years ago and there was zilch dependency on it then .

    Everything will collapse as we know it .

    Scientist ( I did not say Astrologers ) have discovered that surface eruptions on the Sun are increasingly likely to occur ….and …soon . And when it does the Worlds Energy will STOP .

    This is a classified secret and the USE Governments and others do not want the public to know .

    Will of vision of a Hub become a Hubris ?

    Is it time to increase our powers to meditate and live as communes with collective values . History has been doing this all the time . Has that time now arrived to show that .

    This is the Age of Aquarius where the Element ‘AIR’ predominates in all our lives …..the Internet is an example .

    We need to understand the other qualities of air to be able to ‘Adapt’ .

  18. Our Own Mayor

    We all have our own mayor in our own lives and we listen to that mayor all the time .Ourselves.

    We get capital out of our own success through our own guarded council .Ambition .

    We aspire to play on world stage and win our own world cup and listen to our preferred coach. Hero .

    In Ireland we like to kill a hero and with blood on our hands . We have done it with Dr.Anthony O’REILLY and now Garth BROOKS .

    World Stage for many Irish is therefore Emigration and no matter where in the World one does travel there is always a local stage to be found with an Irish Man standing .

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