November 30, 2015

Swap tax take for real skin in the game

Posted in Sunday Business Post · 77 comments ·
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There is something giant stirring in the corporate world.

The company that makes Viagra has just got into bed with the company that makes fake boobs and Botox, coming together in one of the biggest corporate deals ever. Dublin will be its headquarters. Not only does this tell you something about the enormous value of sex, it also tells you a lot about the value of Ireland’s tax rate.

While the lawyers and tax advisers might be celebrating, the truth is that although this deal may well be the biggest of its type, it could also be the last. Because it is only being done for tax reasons, and the country that lost the tax, America, isn’t too happy.

Pfizer and Allergan have merged and relocated the headquarters in Ireland to avoid tax, nothing else. The new firm will now pay 12.5 per cent Irish corporation tax rather than the US notional rate of 35 per cent.

The figures are enormous. The merger values the new company at roughly $160 billion (€150 billion). This dwarfs the Anheuser-Busch Inbev’s $117 billion purchase of SABMiller earlier this year.

In fact, the new Irish company is the second biggest deal of all time, just shy of Vodafone’s takeover of Germany’s Mannesmann in 2000.

With figures like this and tax avoidance the only ‘business reason’ for the deal, is it any wonder US politicians are not impressed?

This game of financial jiggery-pokery is called ‘inversion’. Allergan was already headquartered here, so Pfizer backed itself into Allergan, saving huge amounts of tax in the process. But the company is still, in reality, American.

President Obama labelled US companies that relocate in a low-tax country such as Ireland to avoid US taxes as “corporate deserters”.

So there can be no ambiguity as to what the White House thinks of these deals and, one must assume, the countries that facilitate them.

Change is coming.

But rather than seeing any changes to the way the world governs multinational profits as a threat, why don’t we look at this moment as an opportunity to reinvent our relationship with the multinationals? Why not be inventive and embed the multinationals more fundamentally in Ireland?

One of the ways to become real partners with the multinationals is to become shareholders rather than simply a production location with favourable taxes.

Normally when you want to get something done, you solve the other person’s problem, and if solving their problem is an opportunity for you, then the deal will be done.

Remember, Ireland would be nothing without multinationals. They are our capital base. Multinationals account for over 80 per cent of our exports, and no country on Earth is more vested in multinational corporations than Ireland.

Looking out, how do we become more attractive to them as a location without putting us on a collision course with their host countries?

If the problem is taking tax from them, don’t take tax – take shares instead. By taking shares in multinationals we could create an Irish sovereign wealth fund that is linked to the share performances of some of the best-governed companies in the world, plugged into the world economy like no other and providing huge wealth for future generations.

So how would something like this work and why would it be attractive to the multinationals? Well, they always say the first way to persuade someone to do something for you is to speak their language. Most quoted multinationals already reward their employees with share options and shares, so why not simply extend this to our total relationship with these companies – outfits such as Microsoft, Apple, Facebook, Google and the like?

Consider the fact that in 2012, American multinationals made $100 billion profit here on which they are supposed to pay 12.5 per cent tax, or $12.5 billion.

But in fact they only paid $4 billion. So they ought to pay $8.5 billion more than they do.

This is the type of money any tax equalization will come after – and in fact it would wipe out the annual Irish budget deficit a few times over.

But, of course, the multinationals may react to any tightening in the tax take as the signal to move. After all, most multinationals here are service businesses and service businesses are easier to move than manufacturing businesses.

Why not encourage the multinationals to pay the difference between what they actually pay ($4 billion) and what they “ought” to pay ($12.5 billion) in shares?

We could pledge these shares for future generations of Irish people in that sovereign wealth fund. The figures are significant – $8.5 billion is a lot of money, and it grows.

Shares are permanent wealth whereas taxes are more transitory income, like wages. In recent years, financial wealth has grown much quicker than income.

Look at the chart to see the difference between those people who depend on shares for their incomes and those people who depend on wages for their income.

Here I have taken a basket of the share prices of the top 20 quoted multinational companies that operate here.

You can see from the chart that in the period since the crash, 2008, wages have flatlined, whereas in contrast the share prices of the top 20 companies have gone up by close to 500 per cent.

Imagine an Irish sovereign wealth fund comprised of the shares of these companies, compounding at these rates.

This is the prize.

And why would the multinationals go for it? Because giving shares or share options is much cheaper for the company than giving cash. It always is.

And they are used to operating this way. What multinational treasurer would not look at this option?

Internationally, moving to a sovereign wealth fund would fundamentally change the relationship between the national state and the corporate world.

Ireland would have first-mover advantage and for years we would be the only country to do something like this because we are so dependent on the multinationals and have the dexterity to do something imaginative.

All countries need a story to sell. At the moment, our story is not only going stale but it is turning us into a target for countries that lose out tax-wise.

This way we could change the discussion by solving the multinationals’ problem, helping them be globally tax compliant and reducing the risk that they head off to another jurisdiction.

Furthermore, by investing in a sovereign wealth fund that can’t be touched for a generation, we reduce the risk that any tax windfall will be blown in the next electoral cycle. That can’t be a bad thing, can it?

But crucially, it is all about changing the Irish story internationally.

By matching our interests with the stakeholders and shareholders of the companies that we have operating here, we revolutionize the game.

We would be jumping together and both have skin in the game.

We could have a new story to tell, and there are no better people to go out and tell it to everyone.


  1. Back in Ireland lads, lovely weather! Morning and subscribe.

  2. sravrannies

    Off topic but, topical. Check out this Wikipedia reference for Turkish Prime Minister Ahmet Davutoglu.

    https://www.dropbox.com/s/2yhh33i8wqnztke/Ahmet.docx?dl=0

    Peter

    • Deco

      The manner in which Erdogan has prevailed against the EU is astounding.

      The EU really is useless. In fact it has now reached the point were policy frameworks that are useless are enforced, regardless of anybody speaking the obvious.

  3. michaelcoughlan

    “coming together”

    I presume the pun was intended?

    “You can see from the chart that in the period since the crash, 2008, wages have flatlined, whereas in contrast the share prices of the top 20 companies have gone up by close to 500 per cent”

    This is an example of not being able to see the wood for the trees. let me explain;

    What you have identified is evidence of Hyperinflation in stock prices but lets examine a bit deeper to understand how the punter is being screwed every which way pun intended.

    When prices rise at this rate it is NOT because there has been an increase in the underlying VALUE. It’s as a result of an increase in the currency supply (Cash) available to speculators to bid up the price even though the value may be the same or even reducing.

    I am not sure how the tax on the corporation would work if the government took a stake. If it wasn’t below the US rate why would they come here?

    Michael.

    • michaelcoughlan

      ………The punter is being screwed because his wages remain the same but the value of the cash in his pocket has declined as a result of the hyperinflation taking plce but being confined to the stock market.

  4. 1789tpaine

    Excellent idea David. However it would have to be structured to show an 12.5% effective tax rate in the P&L to satisfy OECD and EU types. Could be a bit tricky? Nothing, I’m sure, some of our creative accountants couldn’t figure out for a reasonable fee.
    Wait for the screams of foul play from Labour, Sinn Fein et al who want the cash to spread around their voters.

  5. EugeneN

    I can’t see this working. Over a period the stock ( and ownership?) of a company would get massively diluted by government ownership, and eventually Government ownership would dominate — particularly if other governments were to do this.

    • THRASHTHENEWS12

      Yeah, this is a great idea. Let’s turn Ireland into a massive Hedge Fund taking shares in the greatest corporate/ central bank debt fueled stock market bubble of all time. It’s interesting that this is the second largest merger/takeover since Vodafone took over Mannesmann in 2000. The last time the stock market was this inflated. Are we there yet?

      Why don’t we just make sure we actually collect 12.5% tax from the multinationals, or is that not out of the box enough?

      • michaelcoughlan

        spot on.

      • Deco

        Ireland already is a hedge fund strapped to AIB.

        And AIB (like the rest of the Irish institutional state complex), has not been reformed with an eye to improving performance (either).

        I bet Ruairi Quinn’s brother, Dermot Gleeson, and Mr. Suds still get mega-pensions, though.

  6. Mike Lucey

    That’s a very clever idea David but the crux will be encouraging the MNs to pay the difference (currently $8.5B) when we have already told them that we will fight their case in the EU for the $4B being paid. Apple CEO Tim Cook has already told us how happy he is with this situation in a recent interview aired on RTE.

    To ‘encourage’ them it might be an idea to link the deal to our education system particularly our 3rd level institutions. Perhaps the ‘tail end’ shares / payment could be used to facilitate (really) free 3rd level education with decent grants for under privileged students and we have a lot of these with probably more to come in future years. This would be one way of taking care of our future generations and at the same time be attractive to MNs, securing large numbers of high level employees.

    An other thing we could consider is linking the corp tax to actual Irish jobs created. The more Irish jobs, including indirect jobs (under some formula) a company creates / generates the less they pay in taxes.

  7. Lift & Stick with Síle na Gig

    The Liffey needs more stickler demands and nothing has changed since the arrival of ancient primitive man to the shores of Dublin Bay up to 50,000 years ago .What excitement they saw when they first set eyes on the breath of this fine bay up on arrival from their sea wooden boats . To their primal eyes it was a bed of roses not needing any viagra , fake books or botox . Their pure homo sapiens spirit held it all then and unblemished and untainted . they coined / clicked the word liffey to mean a ‘womans vagina’ and the recent pharaonic corporate merger has re-invented that magic once more and not wanting to leave again . Their sterling breath and hard breeding will bring forth a new inversion of offspring like any carnivore once more and make a mighty sovereign on ‘the isle’.

    This recent mega event on world stage is now the hindsight of primitive mans foresight and how their rhythm still holds and not broken . Perhaps now is a time of re-awakening from a long night before to find all the rewards before us that was coming all along .

    This ancient legacy continues and will grow and what arrives north of the liffey will leave south of the liffey known musically as Eblana Eblani cycle of attractions.

    Pure homo sapiens of Dublin will export their manhood worldwide to the lesser Neanderthal species boxed in and capsuled and never to be forgotten.

    source ref : book of muckross

  8. JusMc

    David,

    Great idea- a fund run like Temasek out of Singapore. Look how they are doing!

    http://www.temasekreview.com.sg/overview/from-our-chairman.html

    They take shareholdings in some of the top corporates and is growing year on year (currently S$266b).

    Only concern is that the skills necessary to invest wisely is not in this country…given the performance of some of the other government bodies.

    Idea is definitely worth exploring further

  9. Pat Flannery

    Any foreign corporate executive reading this in yesterday’s Sunday Business Post would be reassured that the Irish have long since given up any idea of demanding the full 12.5% in cash. David’s article reassured them that they will continue to get a free tax ride in Ireland until their home government puts a stop to it.

    Vote Fine Gael: “The best small country in the world to do business in”. We can all become (multinational) businessmen. You have just proposed the ultimate public-private partnership. There is only business. Who needs government.

    In America we have acquired a deep understanding of the need for separation of church and state but we do not yet seem to fully understand the similar need for separation of government and business. David’s suggestion would be a retrograde step in that understanding.

  10. A corporation giving shares is inflationary. In the same way a bank produces money from nothing a corporation can issue shares from nothing and thus dilute the existing value of the money/shares in existence.

    If a corporation donates shares rather than paying a cash tax in order to prefer one location for corporate HQ over another then the US will still complain about the tax loss in the way it currently does. A tax is a tax no matter how it is obtained. The US will still lose what they think should be theirs.

    There is no explanation for why the current tax take is much less than it should be for Ireland. Why is the 12.5% not paid.

    We are as Pat intimates in an era of corporatism. Corporations have integrated vertically and become monopoly institutions. Either that or a small collection of integrated businesses have become oligarchies. They are powerful enough to control and influence government to change the regulatory process to allow this to happen. Or the regulations are ignored in the cause of the national interest. (Read corporate interest.

    It is past time that government regulated and governed for the good of their people rather than corporate interests in the guise of the public interest.

    Governments have proved themselves totally incompetent in the management of wealth funds. In Canada, Alberta developed such a fund that totaled at one point 100 billion saved from oil revenues. This Heritage Fund was dissipated in a few short years by one administration and no longer exists.

    Take the tax due and govern for the people. Do not play corporate footsie.

  11. DB4545

    It’s certainly thinking outside the box David. If it was structured into a sovereign wealth fund like Norway it could be a flier. If Government got access to it to fund current account spending it would be dead in the water. Think of the National lottery funding that magically finds its way to ministerial constituencies at the moment. Mayo would have 6 lane autobahns and international airports in every town.

    We already have widespread unchecked corruption in the higher echelons of our society. From beef tribunals to the present issues winding their way through our courts. Look at the situation with Volkswagen links to the German State in which it’s located and the problems that generated. Would the Irish taxpayer be liable for any corporate wrongdoing if Irish regulators were asleep at the wheel? That seemed to be the case with the banks and look who paying for that. Government certainly didn’t serve the people when Church and State were in bed together. If the State and Business interests merged I think the only people getting f**ked would be the taxpayer.

    Why not have a real tax revolution and make people pay their fair share? My brother went to see U2 last week. 2 x 110 Euros a pop. Great band, great night home town crowd etc etc. He bought those tickets from his net wages having paid 52% in income tax on a very average salary. What was the net tax take for the Irish State on those ticket sales? I doubt anything approaching 52% tax will have been deducted by the time it ends up in a Dutch bank account. Pay your taxes here or f**k off and do your moralising in Holland.

    • Deco

      Spot on about U2. I never gave them a penny or cent of my hard earned money.

      Tax responsible bands like Bon Jovi are alright, though.

      • DB4545

        Deco

        Nobody likes paying tax. We now have societies where those who pay no taxation get excellent representation and those who pay income tax have no representation. The American revolution started partly because of taxation without representation. We have the State using taxpayers resources to mount legal challenges on behalf of global corporations to help them avoid taxation. Insane.We have tobacco smugglers evading tax and defrauding the State and we have global corporations avoiding tax and depriving the State. There’s a
        difference in law but the net is identical.

        • Deco

          The American Revolution started on the basis of “no taxation without representation”.

          Maybe we should decide to vote out politicians who fail to grasp the concept of “no representation without taxation” with respect to certain high profile personalities ?

          As a matter of self respect.

          • DB4545

            Deco

            They grasp the concept Deco they just choose to ignore it. The first duty of a Citizen is to vote the government out and I mean any government. We should never let them get comfortable. It’s like a bank making sure that employees take their annual leave. It’s only when they leave that we get a real opportunity to find out what they were getting up to or covering up.

      • DB4545

        Deco

        Nobody likes paying tax. We now have societies where those who pay no taxation get excellent representation and those who pay income tax have no representation. The American revolution started partly because of taxation without representation. We have the State using taxpayers resources to mount legal challenges on behalf of global corporations to help them avoid taxation. Insane.

        We have tobacco smugglers evading tax and defrauding the State and we have global corporations avoiding tax and depriving the State. There’s a
        difference in law but the net effect is identical. And the people we elect to represent us are directly responsible.

  12. Advocating the investment in shares is a contrarian sign that the stock market is in decline. It is a sure bet that the stock market will be down 50% in a few months from now.

    The stock markets around the world are popped up by central bank buying. Trade is thin and the real world economy does not warrant current prices of the equities.

    There are a nice selection of viewpoints here to evaluate.

    http://campaign.r20.constantcontact.com/render?ca=1556acad-1f89-45de-8ff7-5bc7d6cb28ab&c=877a32b0-427b-11e3-ad08-d4ae52a45a09&ch=8905dbc0-427b-11e3-ad3c-d4ae52a45a09

  13. StephenKenny

    Yes, at first glance it seems like a nice enough idea. Had we done this 30 years ago we’d just as likely be proud owners of millions of Lotus, Novell, WordPerfect and Compaq shares.

  14. sravrannies

    Yes, on the face of it, it does sound like a good idea and it should be explored but, wouldn’t advise putting so much “stock” in risky shares. Wouldn’t it be simpler if we could persuade the MNCs to pay the 12.5% they are supposed to?

    There are moral issues here as well. Encouraging MNCs to headquarter here to avoid tax means that someone loses out elsewhere – in most cases the US citizen. Tax is a cost to the MNCs but revenue to the US Government and it’s citizens.

    This looks like another case of companies “externalising their costs” i.e. tax which for Irish MNCs means that some of that tab is picked up by the Irish taxpayer in having to pay higher taxes themselves and the structural, social and political costs that come with it. e.g. housing crisis partly caused by MNCs recruiting large numbers of foreign workers; environmental costs; costs associated with over-dependence on small no. of MNCs; McJobs; higher cost of living and so on.

    Don’t get me wrong – I benefited from working in MNCs for a long time and wouldn’t have gained the experience that I have and the disadvantages of MNCs are likely outweighed by the benefits but, I feel, just sometimes, we forget that there is a cost.

    Peter

  15. goldbug

    SO THE EU HAS A BORDER PROBLEM?

    -> IT HAS NONE!

    .
    .

    A SOLUTION -> BRIBE NON MEMBER TURKEY

    => WITH BILLIONS AND MEMBERSHIP TALKS

    HA.

    -> MORE ASSET STRIPPING FOR MEMBER GREECE

    WHAT KIND OF UNION IS THIS?

  16. Deco

    In a way a highly public emotive deal, like this merger is a threat to the entire business model of Ireland Inc. Yes, that is right. Because it attracts unwanted publcity. If you are going to be a low cost tax based business model, where other legislators might feel compelled to counteract, then you need to keep under the radar.

    In fact this move is a disaster in many ways. It theatens the entire system.

    I would not worry about Obama. Everything that Obama has to say is for show. He is left wing version of Ronnie Reagan. The media love a showman. I would be more concerned about Sanders.

    And this is because Sanders is a very moral man, who actually has a very strong argument. Sanders is making the point that corporatism comes at a societal cost.

    Nobody in the Irish establishment, currently knows anything about societal cost. Or even cares. Like Obama they have the rhetotic, and the buzzwords. You all know the stuff that I am talking about – “concerned”, “moved” “we empathize and sympathize”, “committed to solving the problem”, “totall focussed”, “the homeless”, and then there is the alphabet soup of quangos.

    But it is all hollow nonsense. People on a quarter a million a year spoutin predictable drivel on the Marian Finucane Show every weekend. What a load of utter bullsh!t.

    They are in the service of the current ideology of the day, with the same enthusiam that the Irish establishment showed for Maynooth in the 1950s, the nascent state on the 1930s and again for round 2 in the 1970s when the state expanded, and for Westminister in the John Redmond era.

    Yeats proclaimed (in disgust) that Ireland is a sow that eats her own farrow. And we see this as a recurring pattern. A bunch of overpaid useless parasites eating of the worker bees in the mortgage belt.

    The whole thing is a Ponzi scheme. All that is required is Bernie Sanders to tear it all down. He might same American society in the process. He will do more than legions of Obama supporters crying with every nuance, and buzzword. He scares the scutter out of the clowns in the Irish establishment.

    If Hillary Clinton shows up in mid 2016 for a victory tour on a contest that supposedly already over, you should get your bullsh1t bingo cards out for the nonsense fest you will hear from the know-it-all brigade that Eamon Dunphy calls official Ireland.

    The merger of Pfizer and Allergen is bad deal for Ireland because it gives Ireland too much unwanted attention. It increases the chances that we will get found out.

    By the way, does anybody think that the Irish state with 1000 quangos and numerous Rody Molloys, and Frank Flannery types would fail to waste 8.5 Billion ?

    More money in Ireland, means more corruption. Less money means more hardship for those that work and toil.

    • Deco

      Correction.
      {
      The whole thing is a Ponzi scheme. All that is required is Bernie Sanders to tear it all down. He might save American society in the process. He will do more than legions of Obama supporters crying with every nuance, and buzzword. He scares the scutter out of the clowns in the Irish establishment. So you will hear soft condescending mentions about him, and then the finishing point of him being in some way unsuitable. A bit like happened to Ron Paul. Too honest for the job. The Irish establishment prefers a polished, liar.
      }

      I think that Sanders is going to ask serious questions about where America is going, and about the state of American society. Even if Sanders is defeated (by money, and a corrupt media) the arguments are going to get stronger. They will emerger across the political spectrum. American society is in deep trouble. And increasing numbers of Americans are figuring it out. This type of deal is depicting us as the “bad guys”.

      Ireland might have five years to sort out that massive debt, the banks, the inefficient state system, and the mortgage mess. Ireland might have less. At a maximum Ireland has 8 years.

      It will not be solved by the morons in charge currently. The prime example is the manner in which Howlin wasted five years, as the minister responsible for preventing reform of the institutional state. As a second example, observe Noonan’s spell in charge of the finance ministry. Nothing has been fixed, except for pals of the main governing political parties.

      We need to get serious about the efficiency with which Ireland operates. That is now the sacred cow in Irish society. In fact that has been the case since the mid 1970s. The entire moral premise on the Irish institutional state is the inverse of it’s repeated message. It is not delivering the solution. It is delivering dysfunctionality and inefficiency that is costing people dearly. Death by a thousand stealth taxes to support a hundred pointless promises.

      • SMOKEY

        When Trump becomes President it will all fall into place, the art of the deal, and he is the “real deal” that America needs, as well as the only one with enough horsepower to beat Hillary.
        He will use the tactical nukes needed, and save Ireland from Jihadi bombs in Temple Bar. That is where they will strike if not stopped by Trump. Temple Bar. Enda cant stop his own arse from itching, Trump can and will stop Jihadi from detonating explosives in Temple Bar. Vote Trump to stop a slaughter in Temple Bar. Or face PARIS, in Temple Bar.

    • Do you really think Sanders has a chance Deco? I don’t think he does.

      • SMOKEY

        Joe Montanna has more of a chance playing in the Superbowl this January than Sanders has of gettng the nod. Donald Trump can beat Hillary, no one else can. The rest are already finished.

        • That’s what I figure too – Trump vs. Clinton.

          And in that case I would prefer Trump.

          Not that I really care or it will make a difference to my life – but it’ll be an interesting news story.

          He won’t be going in with tactical nukes Smokey, don’t fool yourself – if he does that then prepare for hell on earth, not just a few bombs in Temple Bar.

          He’s not that stupid though, or at least I don’t think he is.

          Be careful what you wish for.

          If Trump uses his (considerable) business acumen to redirect the military-industrial complex’s profiteering towards investement in American infrastructure and innovation (which he has claimed he will try to do) then he could be a decent President, faults and all.

          Clinton will just be like Obama except with huge doses of greed, corruption and dishonesty added.

          • Deco

            I would also regard Trump as the lesser of two evils, in a contest with Clinton.

            For one thing, Trump was always sufficiently wealthy that nobody ever bought him in the system. If anything, he was powerful enough to do it the other way around.

            He may be daft at times, but ultimately he is incorruptible.

            On the other hand a google search on Hillary Clinton throws up a mountain of scandal and funny business.

            Her record as Secretary of State is abysmal. She was Senator for NY in the build up to the Subprime mess, and she was never asked tough questions on that.

            If Hillary Clinton becomes President, the world will turn against America. Even worse, her track record indicates she will make a mess of everything.

      • Deco

        I think Sanders will resonate with a lot of people, and he will influence the debate on the issues up to a point in the primaries.

        However, as the campaign progresses the mainstream media will direct attention to other issues less likely to interfere with corporate profit making. In fact just about anything will do. But the media will fight “populism” (the other end of the policy spectrum from corporatism).

        Sanders will now win however, unless the people behind him make an enormous effort.

  17. Deco

    David, I read your article in the woodforf link.

    Bang on the money. I was on the Chinese intercity train. It effectively links a country that has vast distanes between key locations like Beijing, Shanghai, and Shenzen. It is actually deflationary on the cost of living for Chinese people. The TGV is the same. Even linking to Milan in Italy, and London. This is useful infrastructure. The train line along between Boston and Washington is retarding economic performance in the US. Even more concerning, it is driving up oil consumption, and the importation of motor cars. It really is strategic infrastructure that America needs to get right. It was probably faster under Eisenhower, than it is currently.

    And then we come to Ireland. Our government is “splurging” 3 Billion Euro in an effort to get voters to circumvent their rational intelligence. The objective is to ensure continuation of political power, and often it even comes down to a continuation of political dynasties. This is also a massive misallocation of resource. For at least the hedge fund managers in Connecticut can claim to be effective at something that involves applied intelligence. I don’t think that same accusation would stick in respect of Dr. James Reilly, or iPhone Joan.

    3 Billion is also the amount needed to fund the DART underground, that would effectively make the transport of the East of Ireland one system. It would increase the public transport take between Dublin and the second most populated county in Leinster, Kildare considerably. Trains from Portloaise/Newbridge/Sallins-Naas/Celbridge direct to beneath St. Stephens Green. Perhaps the one time HQ of Anglo might even be of use as a station. Belfast to Cork in less than four hours. Dun Laoghaire to Leixlip. It would drive down the cost of living – something this is completely aneathma to the idiots who run the Irish state.

    It would definitely bring economic rewards to south Leinster, and the cities of Munster, who are lagging behind Dublin, as a result of the overly centralist outlook, combined with rampant inefficiency in the state system in the provinces.

    I am sure Prof McHale in NUIG, who has lambasted the current “election buying” budgetary policies, would agree with you.

    Of course, in America, there is a debate about such issues. And good ideas get considered. Even in the Republican Debates. No debate in the Irish Labour Party though. The family seat is in danger. Therefore votebuying must occur.

    I think I even recollect Eamon Gilmore once calling Brian Cowen a traitor in the last Dail. Cowen, to his credit did invest money in the motorway system. He also wastefully threw money at Irish third level expecting to see results, which have so far barely transpired. But at least he had some vision of infrastructure as a means of delivering competitiveness.

    The current debacle of Irish government TDs getting ready to buy votes is vomit inducing. Those Republican Presidential candidates would find it abhorrent and wasteful, and would at least make it clear that it is immoral.

    Even worse it is a form or treachery. Treachery of wasting good money.

    Well, who is betraying the Irish people now ?

      • Selected from the linked article

        “The participation rate remains a cause for concern, however. Millions of workers have left the workforce completely over the last decade, disillusioned by the prospect of getting the job or the salary that they feel that they deserve. The US labour force participation rate hasn’t been this low since the late 1970s and this phenomenon poses more questions than it answers. Have these workers priced themselves out of work? There are jobs for burger-flippers and lawyers but what about the myriad of tiers in between? Are these people lost from the workforce forever? And what does this new labour force dynamic mean for the age-old relationship between labour market capacity and wage growth? Only time will tell but it is fair to suggest that the American labour market is in better shape than most.

        In talking about the labour participation rate it is acknowledged that this indicates many workers having dropped off the unemployment stats because of LACK OF AVAILABLE JOBS.

        BUT PRIOR TO THIS THERE IS A COMPLIMENT FOR HOW THE US UNEMPLOYMENT RATE HAS REDUCED TO A LEVEL CALLED FULL EMPLOYMENT.

        You can not have it both ways. I lean to the view presented by many other commentators. They suggest the REAL unemployment rater is well over 20%. It is the only explanation for lower family household gross income and the fact many are under employed and holding two or more part time jobs to survive.

        The statement the US has recovered is in fact a BLATANT LIE designed to misinform the average person. It also explains why the Nations infrastructure is decaying and falling apart at the seams.

        • Deco

          Who in the US has recovered ?

          The residents in the Hamptons ?

          It is all a load of statistical nonsense. We’ve been here before. The USSR produced a massive volume of statistical nonsense, before it imploded. The people looking at the statistics were baffled as to what went wrong.

          • michaelcoughlan

            +1. Like I said before even the joke shops in Baghdad didnt even have so much as farting gas never mind Saddam having WMD.

    • Grzegorz Kolodziej

      What can I say? There is probably nothing to add: you nailed it, Deco. Here is a link about the cost of public transport in the world. Of course every discerning reader will immediately realise that one cannot compare Paris’s $2 with Dublin’s $3.2 and Buenos Aires’s $0.50, because of the distance covered in Dublin for $3.2 and the quality of the service outside city centre. A more appropriate comparison with what $1.2 buys you in Prague in terms of public transport would be nearly $15 and 100 years of solititude you would have to spend travelling, say, from Greystones to Sandyford one way (DART, bus and Luas) ;-)

      http://www.worldatlas.com/articles/cost-of-public-transportation-around-the-world.html

      • Deco

        Public Transportation in Dublin is chronically slow.

        Even the city bus in Galway can do a much better job, and they are quite obviously cheaper than the busses in Dublin. And the area around Nuns Island is no fun for a bus.

    • DB4545

      Deco
      I used to think that throwing money at third level would deliver results. I’m no Wharton business graduate but let me introduce you to someone who is. Nassim Nicholas Taleb has made the case very effectively that Universities are a by-product of societies that are already wealthy. They do not produce wealth. Apple was started in a garage by college drop outs. Bill Gates? College drop out. Switzerland sends approx 15% of its students directly on to third level. The rest receive technical and vocational training and some may move on to third level via those routes. Education has a value and I value it highly but throwing money at it doesn’t make a society wealthy.

  18. Pat Flannery

    I am surprised at the milktoast reaction to David’s “corporate creep” suggestion. It is similar to his oft repeated mortgage debt for home equity swap suggestion. I wonder if this ready acceptance of his pro-corporate philosophy betrays a lack of commitment to the supremacy of the individual in Irish thinking. It is a very dangerous philosophy.

    Perhaps the post-colonial psychological void is so great that what remains of a separate people has no self awareness left. Ever heard of the Brehon Laws? That was our civilization. All gone.

  19. survivalist

    In a nutshell then the article suggests; ‘Support big business, there is no alternative’.

    “Shares are permanent wealth whereas taxes are more transitory income, like wages. In recent years, financial wealth has grown much quicker than income.” – Thats good corporate propaganda right there.

  20. I think it’s a decent enough basic idea by David. Obviously needs fleshing out. I also like the idea of getting the multinationals to plough money into education for future generations and employment etc. Some combination of the two ideas (and other aspects) might work, devil would be in the details.

    But one question – how will/would this actually happen?

    What’s the first step? Who’s going to do it?

    It’s a nice theoretical thought experiment – but will it ever happen in reality? Doubt it. Too many immovable vested interests as Deco alluded to – and they are going to get voted in again soon – and they are going to get voted in again the time after that too.

    • Enda Kenny? – is he going to do it over the next 5 years?

      Pffftttt! as the kids say.

      • DB4545

        Adam Byrne

        Maybe the business link with education needs to be properly thought out Adam. Corporations may demand that investment in education is slanted towards their technologies or business interests. I’m sure Detroit Universities were heavily focused on the auto industries in the 1940′s and were world leaders. But look at what happened to Motown when all the eggs were placed in one basket. All technologies have a lifespan and modern technologies have a very short lifespan. We don’t want to be left holding the baby when this one runs it course. Business courses, and a much stronger focus on languages may serve us better.

        • Yep, as I said, it would have to be properly fleshed out and all aspects considered – not that I think it’s ever going to happen in this country.

          I don’t mean to piss on David’s parade, but who’s going to implement it for a start?

          Progressive ideas and outside-the-box thinking is not tolerated here, especially if it threatens the vested interests and their moneybags.

          • Following up on your next post just now DB4545, I think we can all understand ‘education’ to mean more than just third level ‘academic’ degrees – let’s apply it more broadly to include technical and vocational training, apprenticeships, etc. etc. etc.

          • DB4545

            Adam Byrne

            I wouldn’t rule out change Adam. I think we’re reaching a tipping point. I look at the standard of politician in elected office and like a lot of people I’m fed up listening to inarticulate brain dead tired old donkeys. We have a habit of surprising ourselves and turning lemons into lemonade.

          • Well we shall see, I am also an optimist myself but not about (so-called) ‘governance’ in this country.

            I don’t think anyone would notice if the poxy Dail was removed in its entirety.

            I have been back here nearly a week and every evening I have seen Enda Kenny on the news, stand up in the Dail and say ‘yes we are looking at this and we are looking at that, and sure isn’t it terrible alright’ and then he sits back down and nothing happens, the useless plonker.

            Just give me two minutes with him on a beach in Antigua, that’s all I’m saying…

  21. Pat Flannery

    Perhaps there is hope for us yet. Mark Zuckerberg has just pledged to give away 99% of his Facebook shares (although not yet; shades of St. Augustine?). He believes (as I do) in the power of the individual rather than in the artificial creations we call corporations. Maybe Mark Zuckerberg’s social media is returning us to a world of individuals rather than of inhuman corporate “persons”. If so, my hat is off to him.

  22. http://www.plata.com.mx/Mplata/articulos/articlesFilt.asp?fiidarticulo=278

    “What we are witnessing these days is a mighty contraction in economic activity around the world, that reinforces itself. International Reserves are being sold off in a desperate search for liquidity. The contraction was originally seeded by a slow-down in the economies of the Reserve-issuing countries, i.e., USA, Britain, Europe and Japan.”

    China will then say to the world: “We sell cheap. Very cheap. But, we sell for gold, for very little gold; and we pay with gold for what we buy – for very little gold, but we pay gold. You want our stuff, you find a way to pay us in gold. Or else, what do you have to offer us, in exchange for our stuff? You have something we want – we pay in gold. Rest of the world, do as you please.”
    The nations of the world are not going to flounder endlessly in the crisis that is upon us. Out of the huge crisis, China will break away and state its terms. And the terms will be: GOLD. The rest of the world will follow.”

    ——————————————————————————–

    Get a step on the opposition. Insist the corporations pay you the taxes in gold. Setting up a gold fund as the Chinese and Russians are will be the way of the rest of the world. Get it while it is still cheap.

    There is no point in investing in over priced, overvalued stock when you can buy gold that is so suppressed in price that the new price structure will be multiples of the current price not mere percentage increases.

  23. As we select a new Commander in Chief, I hope voters will seek out a leader who will not pursue a reckless policy that traps us under a mountain of debt and beguiles us into perpetual war.

    I hope I can count on you to stand with me today.

    In Liberty,
    Rand Paul

    • Deco

      I suspect that remark is a reference to Hillary Clinton.

      However, the MIC will want somebody to continue the Orwellian perpetual war against North-Asia (China plus Russia). And Hillary is committed to the cause.

      Rand Paul is correct – America needs fixing from within. Starting with the toxic sludge that is Wall Street. Syria and Libya have been made worse because of interventionism.

  24. mishco

    Sounds like the looniest idea David has come up with in a long time.

    a) In what way will asking multinationals to cough up more encourage them to stay here?

    b) How will it appease Obama, when he still would not be getting “his” share?

    c) Worst of all, it sounds like a major contribution to another property-boom-type wheeze, doomed for a massive downturn at some time in the not so distant future.

    Do we really need to be so masochistic? And you of all people should surely not be talking up another bubble, of whatever ilk.

  25. Deco

    Of course, many of those companies don’t make a profit. In that scenario, it might make sense. And the Irish state could sell the shares before they go into meltdown.

  26. http://www.peakprosperity.com/insider/95544/murder-and-mayhem-middle-east

    This is a good account of why there is an immigrant problem. Basically caused by lawless aggression and illegal destruction of legitimate countries and governments, and assassination of their rulers.

    Wherever we live in the West it is aided and abetted by our support of our government policies.

    • Good one Tony, just read it now and shared it.

      • Waiting at Victoria airport for flight to San Francisco and then Auckland and nelson nz.
        Have a good Christmas to all.

        • Pat Flannery

          Tony, make sure to drive down along the west coast of NZ to Westport and Greymouth, particularly Greymouth where there are great Irish pubs. Most of the people there are descendants of the many Irish who worked the mines on NZ’s west coast in the 19th century. They will tell you about the bitter battles between the Orange and Green, between the owners and the miners. You will have a great Christmas, wish I could join you.

        • Hell of a trip Tony! Long way.

          Auckland is beautiful though, check out ‘Sheep World’ (I kid you not), just north of Warkworth, very interesting afternoon out, haha.

          Safe travels and a Merry Christmas!

          • Pat/Adam

            Thanks for the input. Not sure where we will go but just settled at a sister in Nelson and in a couple of days we set out on a two week trek of the South Island.

            16-20 C temperature with a 25 knot breeze and showers.

  27. http://www.jsmineset.com/

    The market will overcome the manipulation. It is a matter of time.

    “”The last topic today is the upcoming Fed meeting. Will they or won’t they raise rates? As you know, I can’t see any way they will do this, “data dependent” or not. Many say the rate hike depends on the unemployment number out this coming Friday. Really? The unemployment report has been shown by John Williams and others to be a bad joke in totally poor taste and virtually a complete fabrication. Zerohedge has come out with article after article showing the real situation in many reports and various market measures, the latest is seen here regarding ISM manufacturing http://www.zerohedge.com/news/2015-12-01/ism-manufacturing-collapses-worst-june-2009-new-orders-prices-paid-plunge. How is it possible the Fed is even contemplating a rate hike?”"

    • michaelcoughlan

      Hi tony,

      I’d say that they will raise it by the smallest amount but at the same time the ecb will announce massive further qe so the bubble wont burst just yet.

      • Your guess is as good as anyone else, Michael. Thaty will increase the US dollar at the expense of the Euro. Are you looking for par?

        • DB4545

          The US was built on giving choice to consumers but it looks like the US electorate now have to choose between a man who was born with a silver foot in his mouth and a woman who is a power hungry harpie with shady business links. What the f**k happened to America?

    • corkie

      Talking about the fed…
      ..the spectre of rising rates, potential global disinflation, declining operating profits and wider credit spreads continues to create near-term consternation for weak balance sheet stocks.”

      http://trueeconomics.blogspot.ie/2015/12/31215-85-v-52-of-duration-of-risk.html

      But the real scare is here..
      Now, take a look at the lengths to which ECB has played the Russian roulette with monetary policy so far

      http://trueeconomics.blogspot.ie/2015/12/31215-85-v-52-of-duration-of-risk.html

      If you are planning a splurge into equities David I would say now is not a great time to start. But if you really think it is a good idea then personal experience would cause me to recommend a very cautious approach. Don’t just just pick the dodgy ones that knock on your dodgy door. You might have more success using a Ouija Board.

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