April 10, 2017

The Prognosis is Promising

Posted in Irish Independent · 107 comments ·

The 2pm train from Heuston to Cork is hurtling through Tipperary on a glorious Friday afternoon in April, and I am struck by just how empty the country is. With a better transport system, such as French-style fast commuter trains, most of the main conurbations of Ireland could be accessed east to west and north to south in less than an hour. French TGVs travel at an average speed of 200 miles per hour meaning that Dublin to Cork, a distance of 157 miles, could be done in about 45 minutes. Belfast to Cork could be done in under an hour and half, while Dublin to Galway would be just over 30 minutes.

With a train system like this, there would be no housing crisis because we would all be living in what would feel like, in terms of commuting, a big suburb.

This should be the objective of the country, irrespective of what government is in power, because a society that can travel around efficiently and in comfort is a society that’s going places. Look at the most sophisticated societies around the world: they are all characterised by clean, efficient, democratic transport systems. The reason for this is that such systems bring down the cost of land and housing, offering in effect a subsidy to business because basic costs of production are lowered.

This drives productivity upwards.

Now the reason all of this is important, is because this week we received two very important documents that tell us what is going on in our society.

The first is the census, which is a reason for celebration. The population is rising and heading back to pre-famine levels. This is great news. A rising population in a rich country tells you all you need to know about the economy. In a world of birth control, people have kids when they are confident about the future. Also, rising migration – another acid test for success – reveals that lots of people are moving in and out of the country. This is a good sign.

Unfortunately, far too many people live in the baby belt — a giant arc which stretches from Drogheda in the North, to Mullingar, towards Port Laoise, down to Carlow and reaching the sea at Arklow. This has to stop and will only do so if there is an efficient transport system. Interestingly, when you compare the levels of population to famine times, the most extraordinary aspect is the fact that rural Ireland, now denuded of people, was full. There were twice as many people living in County Cork than in the whole of Dublin. Now Dublin is ten times bigger than metropolitan Cork. Such a degree of centralization is unheard of in modern western societies. But it won’t change on its own because there is a tendency for economic activity to cluster around large, dominant cities.

But a massive programme of investment in rail, to compliment the investment in motorways, would change this reality, and quickly.

Talk of investment brings us to the second important set of figures released this week: the upbeat economic forecasts from the central bank. Regular readers will know that this column has been highly optimistic about the economy for some time now. It’s interesting to see the normally cautious central bank getting giddy now, particularly as it went out on such a limb suggesting Brexit would hole the economy below the water line last year.

The central bank’s chief economist Gabriel Fagan, a very fine economist with a sense of humour as sharp as his intellect (I worked with him many years back), described the rapid recovery in the economy as being similar to emerging market countries that recover rapidly from financial meltdowns. The term is a “Phoenix Recovery” and it describes a recovery that happens in the absence of debt and credit.

We’ve been arguing this here for some time, observing that the economy is growing remarkably strongly without commensurate borrowing. This is an extremely healthy place to be because, more than anything else, it means there is no bubble building, even in the housing market.

There may be a bubble in the Dublin commercial market because those prices have been driven skywards by foreign funds that are using money borrowed abroad or as investments by leveraged rich foreigners looking for returns in Ireland. Counter-intuitively, if there is a crash in Dublin’s commercial market it will be good for “Ireland Inc” as prices would fall without the knock-on to Irish wealth, because Irish balance sheets are not exposed there in any material sense. But you’d be mad to chase this market up at these levels because you are just giving foreign investors an exit strategy.

However, in the general economy the level of new debt is low (and very low for this new level of growth), which means growth is coming through income and productivity – i.e. we are getting more from less.

We see similar developments in emerging economies like Argentina, Korea, Mexico and Thailand after they all experienced something like an economic coronary arrest. The same thing happened here. In 2008 capital not only stopped flowing into the country but flowed out rapidly. This caused what economists refer to as a “sudden systemic stop”. But very quickly the economy recovers. The idea is that companies that had lots of access to credit suddenly become much better at operating without overdrafts in the slump. Your mother would describe this as “cutting your cloth”.

Form here, I believe the economy will grow rapidly and for some time. The reason is that Ireland isn’t really a domestic economy in the true sense of the word, rather we are a part of the global corporate supply change. As long as the world economy is motoring, and it is, we will do well. We just need to remain competitive. This means massive investment in public infrastructure, like trains and education. We are now a high wage, high skill economy. We can’t go backwards. We must go forward.

International capital is our life-blood and international capital is like water – it goes to the place of least resistance. The way you ensure that we don’t get caught out again is by making sure the banking system is kept in check. This means hawk-like vigilance about over borrowing. Once we do that, in effect minimizing the damage we can do locally, there are more than enough positives in the economy as a global place for production, capital and trade, to make the future look rosy.

In fact, taken together with the census, once we realize that Ireland is part of the global supply chain, rather than an autonomous economic entity, there’s no reason to believe that we can’t experience a golden-era ahead. And this is despite Brexit and Trump. By boxing clever now, there’s no reason to believe that this Phoenix must fall back to earth.

In fact, it can soar.

  1. michaelcoughlan

    Quick draaaaaaawwww McGraaaaath Adam.

  2. Grzegorz Kolodziej

    “Counter-intuitively, if there is a crash in Dublin’s commercial market it will be good for “Ireland Inc” as prices would fall without the knock-on to Irish wealth, because Irish balance sheets are not exposed there in any material sense. But you’d be mad to chase this market up at these levels because you are just giving foreign investors an exit strategy.”

    Nothing more, nothing less. Finally someone has said that.

  3. E. Kavanagh

    David are you suggesting that people should commute from Galway or Cork to Dublin?

  4. DiarmaidM

    David – in this country we use the metric system. In France they use the Metric system. So why when talking about the speed of a TGV do you convert it to miles? I know you’re keen on the “anglosphere” but come on…. The Canadians and Aussies don’t seem to have a problem with it…

    • E. Kavanagh

      And it’s about time we decimalised the hours and minutes too.

      • Sure 10 hours to the day, 10 minutes to the hour, 10 seconds to the minute, 10 days to the week. Ten weeks to the year( and 100 days to the year). Beats mother nature dividing it up all which way. :-)

        • DJR

          Useful/useless fact of the day:
          Seconds, minutes & hours are human concepts (60/24 were chosen by the Mesopotamians as they were readily divisible in the days before zero).
          Days, months & years decided by mother nature!

  5. E. Kavanagh

    And I guess California generally, and in particular Silicon Valley and the San Francisco Bay Area can’t be classes among “the most sophisticated societies around the world” as the public transport systems are pretty crap there.

    • Grzegorz Kolodziej

      Dear E. Kavanagh (are you a man or a woman? – it’s kind of rude to address you by surname),

      “as the public transport systems are pretty crap there”

      ?????????????????????!!! I mean: who told you that?

      Frisco’s public transport system is maybe not the most sophisticated in the world (and not in the US either), but it is far more sophisticated, extensive and FAR MORE AFFORDABLE AND RELIABLE than Dublin’s unionised monopoly system that, except for excellent Luas and kinda ok Dart, resembles the Italian mafia.

      To start with, as you come exit the airport

      1. It has 7 competing shuttles from the airport; Dublin has 1 really – private Aircoach, unless you count the subsidised 747 and Bus Eireann buses that were scheduled to suit the drivers and not the early and late flights. It also has AirTrain from the airport, Dublin Airport is not served by any train from the airport.

      San Fransciso: 1 Dublin: 0

      2. San Franscisco has:
      2.1 One heavy rail/commuter rail system,
      2.2 One commuter rail line,
      2.3 Two light rail systems,
      2.4 Amtrak inter-city rail service.

      Dublin only has DART and Commuter Rail (which covers the same routes as DART, but doesn’t stop as often, so it can be treated as one).

      San Fransisco: 2 Dublin: 0

      3. Trams.

      3.1 San Francisco has 14 routes I (that includes 3 of VTA, which is like Luas).
      3.2 Dublin has 2 and they not connected.
      3.3 Warsaw has 49 routes, plus 9 spare (if the others switched off) and 1 operating on All Saints Day only (Cx), for the old and poor people. This of course does not include metro, buses and light rail.

      San Fransisco: 3 Dublin: 0

      4. San Fransisco buses (within Muni) come on time.

      San Fransisco: 4 Dublin: 0

      5. Standard integrated monthly pass is $73, but a lot – I’d say even most – Dubliners (including white collar workers) would actually qualify for the discounted Lifeline montly pass, which is $36 (it’ll go up by $2 in June): for example, if there are 3 people in your household and your annual income is $40,840, you are eligible for 50% discount.

      San Fransisco: 5 Dublin: 0

      And please do not tell me that cost of living in San Fransisco is higher…
      Beef is a lot more expensive in San Fransisco, so is bread; milk is more or less the same (it will be more expensive still if Mr Trump introduces new tariffs WITHOUT abolishing those stupid subsidies (0.1% of the United States population working full-time on a farm receives around $20 billion per year to farmers in direct subsidies as “farm income stabilization”, for which – as in the case of CAP – the rest pays double: in taxes and via exorbitant prices of food.
      But then again, petrol is 40% cheaper and cars are 15% cheaper.


      Average Monthly Net Salary (After Tax)

      Dublin: 2,355.08 €
      San Fransisco: 4,495.07 €

      San Fransisco: 6 Dublin: 0

      • Grzegorz Kolodziej

        I forgot to add:

        The same monthly integrated pass that you’d pay $36 in San Fransisco, you’d have to pay well in excess of 200 euro in Dublin to travel by bus, Luas and DART (and in many cases you would have to combine 2 of them). Except on many routes it is impossible to travel – for example, using public transport from Rathfarnham (if you live far from Luas, like I did) to Dell in Loughlistown would have taken you 6 hours a day – 3 hourse from the minute you lock the door till you arrive in Loughlinstown.

        The level of subsidies to public transport is comparable in San Fransisco and in Dublin, and a bus driver is San Fransisco earns $25,316, not €35,463 ($39,016) in Dublin – higher than in London.

        • Grzegorz Kolodziej

          I feel compelled to add yet one more thing: even though beef is €10/kg in Dublin and €15/kg in San Fransisco, and potatoes and rice are more than twice as expensive in San Fransisco, yet meals in inexpensive restaurants in San Fransisco are NOT more expensive (roughly €15 in both).

          • EugeneN

            you are ignoring the sales tax and the tip I see.

          • Grzegorz Kolodziej

            But sales taxes in San Fransisco and Dublin are actually very similar.
            In San Fransisco the total of state, county and city sales tax rates are 8.5%.

            In Dublin, Value-Added Tax Consolidation Act 2010 (VATCA 2010) (Section: 46(1)(ca) Schedule: 3 Paragraph: 3(1) is 9% for restaurants. As to tipping, I was going to write about the tipping culture in the US and Ireland (or lack thereof), but resigned for brevity and time purposes.

            But even so, tipping is usually 15-20% in the US. That does not explain why ienexpensive restaurants in San Fransisco are more or less the same as in Dublin, if – this is just one example 1kg of white rice is 1.76 € in Dublin
            and 4.85 € (5.14 $) in San Fransisco, and tomatoes, without which life would be very hard, are 2.52 € in Dublin and 6.42 € (6.80 $) in San Fransisco.


            What stops people in Dublin from tipping (apart from Sunday family meals or if they cherish a false hope of – excuse my French – banging some long-legged lassie), which they almost never do – and that also includes very, very rich?

            This is btw not about people in Dublin and S.F. The same Dublin people when they go to work and live in San Fransisco, they behave differently – and believe you me, the Americans learn the no-tipping Dublin culture in no time, while remaining as fussy as before…

          • E. Kavanagh

            I believe the point EugeneN is making about the sales tax and tip is that a menu with a price of $15 does not include the tax or tip in SF; whereas it would be included in Ireland.

            But I’d agree, a cheap restaurant in SF can provide a satisfactory meal for $15 or less.

          • Grzegorz Kolodziej

            Yes, but my price of €15 for a meal in an inexpensive restaurant in Dublin and the euro equivalent in San Fransisco was for what customer pays in the end…

            As to tipping, very few restaurants or bars in Ireland include any tips in their menu. Eating in Dublin, we might get a slightly distorted view if we look at it from the perspective of those restaurants located in the rectangular D1-D8—D6-D4.

            For the rest of the country, and frankly speaking – for many places in that rectangular too – the sad thruth of working in Irish hospitality sector is that the vast majority of waiters, bartenders, night porters, etc have not seen any tip in years.

            I know a bunch of people from Carlow worked in a 4 star hotel and moved to Brussels precisely because of that – and by Jaysus, I wouldn’t change Dublin for Brussels even before the wave of terrorists hatching in Belgium.

            On another note – in keeping with my discussion with Coldblow last week on Ireland and fish – I’ve never come across any Irish restaurant in Dublin where I could eat eel :-( – I find that very strange, considering the sophistication of some Irish restaurants (Kobe beef hamburger for €55)! Very tasty and healthy fish that eel, in Gdansk you could buy it in some take-aways in the late 80s/90s (I don’t know about now).

            Btw, I wonder what people think is currently the b e s t restaurant in Dublin with a meal for up to €15?

        • E. Kavanagh

          The minimum wage in SF is $13 per hour, so I can assure you a bus driver earns way more than $25.3K.

          A 2015 SF Examiner article says “most Muni operators make anywhere from $60,000 to $70,000 a year, according to public records”.

          • Grzegorz Kolodziej

            William Shortland writes about Britain as „our largest trading partner” (Irish Independent, letters, April 8). However, CSO website (2017) debunks this myth: Ireland’s largest export partner is the US (€3.1bn) – we exports less goods to the UK (€1.07bn) than to Belgium (€1.35bn).
            Admittedly, Ireland imported over €1.25bn worth of goods from the UK, compared to €385bn from China, €551m from Germany and €645 from the US.


            are such chronic trade deficits with Britain good or bad for Ireland? For example, those who care about Irish fisheries should be informed that in 2014, the UK Trade and Investment reported that Ireland imported €235m worth of seafood from the UK, while – according to Bord Iascaigh Mhara – the same year, Ireland exported only €56m of seafood to the UK (roughly the same as to Nigeria, and less than half of Ireland ’s seafood exports to France). Mr Shortland mentions the “hostile attitude to Britain displayed on Wednesday in the European Parliament”. He refers to those 516 MEPs who voted to make Britain pay for exercising its sovereign right to leave the EU.

            Had he delved deeper, he would have noticed that one of the most hostile attitudes towards Britain was displayed by Ireland: all Irish MEPs voted against the UK, while 20 Polish MEPs voted in favour of the UK (including my former lecturer Ryszard Legutko – described by Roger Scruton as currently “one of the most original thinkers” – and Anna Fotyga – Jaroslaw Kaczynski’s previous Foreign Minister).


          • Grzegorz Kolodziej


            My comment about Britain, trade and which states want to punish the UK, it was posted in the wrong place: I was going to post it at the bottom – sorry! :-(


            “A 2015 SF Examiner article says “most Muni operators make anywhere from $60,000 to $70,000 a year, according to public records”.

            SF Examiner reported that, but that was then debunked by Mr Eric D. Williams, president of the Transport Workers Union Local 250-A.

            Some of them doing overtime AND hired before July 1, 2014, would have earned that much: but DB doing the same hours would have made even more, if they legally could work that much (not that they would want to – one has to take into account that most DB drivers work what in other jobs would be considered undertime – for example, DB was hiring people – in the recession! – to work for 40hrs for nearly 800 euro: and standard option included less hours, for nearly 700 hundred: that’s considerably more than a legal secretary with 20 years experience and plenty of skills other than driving).

            Those hired after that date earn $37,000 on average (but my figure was for ALL SF transport companies on average), from which they have trade union fees and cost of benefits deducted.

          • Grzegorz Kolodziej

            Btw, an average horly income of a waiter in San Fransisco with tips is $21.50 (tips is most of that income), while in Ireland they would, with tips (that most of them would never see) earn half of that. I wonder how many of those who complaign about cheap eastern European labour always tip a bartender, a porter or a waiter: in SF, the manager would actually ask you if there was something wrong with the service that you didn’t leave any tip.

            No wonder young students here cannot afford accommodation by extra income from part-time and summer work!

            Btw, this explains why a bunch of lads from Carlow who worked a bartenders in Hilton, they all went to work as bartenders elsewhere (Brussels mainly), those who do of course.

          • michaelcoughlan

            Hi Grezgorz.

            I don’t complain about cheap eastern european labour. I complain that they are exploited and in so doing drags the whole thing down for everyone. Any economy that depends on exploiting the most vulnerable is going will go the same was as the british empire.



            My mother worked most of her life as a waitress therefore I always tip even when it makes me unpopular and I don’t care what the person’s sexual orientation is, the colour of their skin, their nationality etc.


      • Colm MacDonncha

        I arrive into Dublin airport on may2 at 1220. There is no bus service to Galway until 0630 that morning. Am departing from knock so leaving car at airport not an option. Taxi to Galway some €390 so not really an option either. No car rental companies operating after 10pm. Third world infrastructure.

        • Deco

          12:20 after noon ? Alright, that is “scarce”. Though there are buses other than CIE to select.

          Get a bus to the city centre, and get another one to Galway.

          Or to cut down on time, get the “airport hopper” bus from the airport to Maynooth train station, from where you can get a buses Westward. It is hourly most of the day.

          • Colm MacDonncha

            Sorry Deco. I should’ve said 0020 on Tuesday morning. Dublin airport is a dead zone. Third world infrastructure…

        • Third world mentality too.

          David makes some great suggestions in his articles – dozens I would imagine over the years.

          I can’t recall any of them ever being put into practice by the Neanderthals that “run” Ireland.

          Can anyone else remember one?

      • E. Kavanagh

        Nice theoretical analysis there Grezegorz. Unfortunately it is mostly irrelevant, and in practical terms wrong.
        Firstly, it is completely irrelevant whether SF is better than Dublin. We know that Dublin and Ireland doesn’t have a great public transport system. But beating a crap system doesn’t mean SF’s system is good; just better than a crap system, and therefore logically one can only necessarily conclude SF is less crap.

        McWilliams’ point was that the “the most sophisticated societies around the world … are all characterised by clean, efficient, democratic transport systems.” None of these adjectives can be applied to the CA’s or the Bay Area’s transport systems.

        One can’t take a train to LA from SF because there is no Amtrak in SF. One has to take a bus across the bay, and then take a train toward LA and then transfer to a bus. Or take a bus south for several hours and then transfer to a train for the last few hours to LA’s Union Station. Unlike the British Rail ad where the train is passing all the cars in a traffic jam, in a door to door race a car would do the journey in about half the time. Clearly not a sophisticated high speed rail system. They have started to build one, but the moron in chief is making moves to withdraw funding.

        The BART train system is good, but overcrowded, and has been growing. When first built it was rejected by some richer Bay Area counties as they thought it would give free reign to poor black people to come to their areas and do whatever. One still can’t even take it to San Jose; one has to use Caltrain which, while comfortable, is incredibly slow, again easily beaten by a car.

        SF’s population is smaller than Dublin (now about 850K) and it is a much smaller city geographically (about 7 x 7 miles). SF does have a comprehensive bus and light-rail system. But the bus system is extremely slow: it used to take me about an hour to go 6-miles on the bus during commute hours. They do have commuter hour express buses on some lines which are good, but they have issues too. Once my wife phoned MUNI (the bus company) wondering where the express bus was. The woman told her the driver was sick; and when she asked when should she expect an express bus the “customer service” woman replied, “Didn’t you hear me, the driver is sick.” Not very sophisticated when a hangover can knock out your bus line.

        Major tech companies provide their own bus transportation to their campuses. It is quite a perk.

        A few years ago I worked for the DA in Redwood City; a door to door commute of about 27 miles. I had no car so I had to take 2-MUNI buses and a Caltrain. It took 2-hours each way. Then a friend loaned me an old Beetle which I drove to the Caltrain station, so it only took me 1-1/2 hours. It didn’t take me long to buy a car (45-min to 1-hour).

        And as you can see from your own average net salary; the average person pays $73 for the MUNI pass not $36. A person working full-time in a minimum wage job would earn too much to qualify for this pass, which is only good for MUNI, not BART. In fact a couple on minimum wage would need 3-kids before they could get this pass. And to use MUNI and BART within SF the monthly ticket is $91 (not $73).

        And regardless, this argument isn’t about wages or affordability it is about modern sophisticated transport systems. I know nobody who has spend any significant amount of time in SF who think SF has a good transport system. There may be a few little gems, but overall it is always an issue in elections, and a continual source of anger among the citizenry.

        My comparison would be with Copenhagen, where with no Mussolini one could set one’s watch by the buses. It was comprehensive, clean, affordable, and relatively quick. I was only ever late because of a bus in Copenhagen, and that was because of a learner driver who was on the line going to the airport, and I ended up missing my flight. Aer Lingus hadn’t left, but the pilot didn’t want to open the doors to let us in.

        • Grzegorz Kolodziej

          E. Kavanagh,
          Thank you for most interesting comment which I read with attention.

          Some things you have touched on:

          1. You are talking about inter-cities services, i.e. L.A. and San Fransisco.
          Inter-city links in the US are a completely different cup of tea though than the in-town transport (where you have made a discerning observation that unlike Dublin, SF is only 7X7 miles – but that, with proper planning, should ensure that there is much less traffic jams in Dublin at 8.30am than in San Fransisco, and the opposite is the case – 2 hours each way in Dublin is n o t for 27 miles, but for FIVE MILES from Harold’s Cross to UCD (that’s how long I had to spend each day on DB).

          To find further explanation, please watch a story on public transport in the US in that documentary from 25 min 50 sec):


          2. But even so, a journey from Tullow to Derry using public transport is 10 hours (including long times to wait), and there is only ONE bus from Tullow to Dublin (2, but they leave Dublin at the same time: so one really). I doubt it would take 10 hours to travel that distance in the US.

          3. “The BART train system is good, but overcrowded” – it is not even near as overcrowded like some DB lines, i.e. 16 or 145 – in 145 on Sunday between 7pm-10pm, you spend 2/3 of the way standing if you get in – except that if you hop further than Kildare St, you don’t get in. Often you only get the third bus in a row. Remember that article David wrote that people in Dublin should use buses more often? He owes us a serious explanation of what he means by that, because Mr Paul Williams – who reads those comments but never comments himself – actually found it necessary to join the discussion and criticise David for that acrobatic proposal.

          4. “average person pays $73 for the MUNI pass not $36. A person working full-time in a minimum wage job would earn too much to qualify for this pass” – no, that’s not true.
          If you are single, you qualify for MUNI Lifeline with an income lower than $24,120. That’s well above the Irish minimum wage. Minimum annual salary in Ireland is €18759. That’s only 19898.61 US Dollar as of today.

          5. “My comparison would be with Copenhagen, where with no Mussolini one could set one’s watch by the buses.”
          That’s a good one.

          “It was comprehensive, clean, affordable, and relatively quick. I was only ever late because of a bus in Copenhagen”

          Same for Kraków.

          “I ended up missing my flight. Aer Lingus hadn’t left, but the pilot didn’t want to open the doors to let us in.”
          - he was only following the orders which must be obeyed, always ;-)
          Maybe the AerLingus pilot didn’t want to let you in because he thought you were a terrorist? ;-)

          They’ve tried that trick with me in Liverpool when I was coming back from F1 race in Silverstone, but I joked that if they don’t let me in, I’ll restart my British residency and they don’t want that because I’m a staunch Thatcherite. They all laughed and let me in via the already closed gate. Having said that, that day I already looked extreme even without that confession: a red Formula 1 Ferrari hat and a black T-shirt with white letters: “I’m a huge soap-opera star in Eastern Europe” (I kid you not, I have a photo from that day).

          If someone in AerLingus reads it: please restore flights to Kraków! 2/3 of Poles left Ireland, I know, but that flight would be still full because Ryanair has – for the same reason – 5 times less flights to Kraków than before 2008!

      • hasbeen

        Population of over 7.5 million people in the bay area and in an economic power house to boot. Big enough to support lots of things we could never support here.
        Why would you use this comparison?

        • E. Kavanagh

          hasbeen: The reason I brought up the SF Bay Area and CA was to discredit McWilliams’ argument that “the most sophisticated societies around the world … are all characterised by clean, efficient, democratic transport systems”.

          While the Bay area is at the cutting edge of technology, and a very rich area it has a crappy public transport systems. Better than Ireland, I would agree, but no where near as good as many places.

          The Bay Area isn’t meant as a comparison to Dublin/Ireland, just to point out that McWilliams is wrong in one of his ascertions.

          I haven’t been in NYC for a long time, but when I was there I don’t think anyone would have described it as clean. Perhaps it’s better now.

    • Deco

      To be brutally honest, the “valley” is over-rated.

      Many of the “businesses” there are pump-n’dump scams, that are not capable of making a profit. And they could be located anywhere in the US. And increasingly this is what is happening.

      Most of the businesses there are now on stretched Price/Earnings ratio.

      Take out ten firms – of which Apple, Oracle, HP are the best known – and the rest of it, contains fibs and pretence.

      The real estate market is also supremely overstretched.

      Now, there is no doubt that the people living in central coastal CA think of themselves as sophisticated. The French nobility partying in Versailles thought the same thing in the 1780s, and they were also living on a debt/income illusion, and in the midst of a cultural pretence, and a moral vacuum.

      The SF area has been losing jobs to other American cities, and East Asia for a long time. It’s more recent innovations have tended to be on the balance sheet, rather than on the PCB.

      The term “non-GAAP earnings” is about to join the roll call of dishnour, alongside “sub-prime” and “CDOs”.

      Companies talking about “non-GAAP earnings” are performing “subprime” accounting methods.

      It is very sophisticated.

      It is also a fraud, and a deliberate aversion to US Federal Accounting Law.

      • Well done Deco, that about sums up the US economy and most of the world’s too.

        There never was a sound economy based on debt and there never will be. True capitalism died a long time ago and we are left with the remnants that simply give the majority of people the impression that capitalism is failing us. More correctly we have distorted capitalism and now have the debt based artifice. A house of mirrors.

        The distortions are followed by lies and deceit that is used to justify the current actions.

        The monetary system is the basis for the lies and corruption and it is failing as we converse. The destruction of the Western way of life is already commenced and soon it will implode in a pyre of irredeemable debt.

  6. michaelcoughlan


    The bit about the train isn’t well thought out. If you built a train to Sligo would you have enough people using it to get an ROI? No. It would need to be part of an overall strategy.

    “With a train system like this, there would be no housing crisis “

    Yes there would; people still don’t want to live in rural Roscommon.

    “The reason for this is that such systems bring down the cost of land and housing”

    Really where?

    Prices for property rose along the luas etc.

    “Also, rising migration – another acid test for success – reveals that lots of people are moving in and out of the country. This is a good sign.”

    Really? So its good to replace the Irish graduates with an equal number of immigrants?

    The bit about population growth is only a superficial observation. Why not tell us what the year on year data is for the we the natives? Up to recently it was


    There is a bubble in property McWilliams. Some prices for houses are approaching boom time levels except this time there is only a dribble of supply. This means yields are nonsense. I think we only built about 12k to 14k houses last year.

    What does that tell you/


    Ireland’s prosperity is dependent on the sheeple not complaining about exporting our finest and being replaced by dirt cheap eastern European labour who will be brought in to be fleeced in shoe boxes with exorbitant rent and punitive Govt. taxes with no end in sight and we will portray this as progress without even a hint of irony or hypocrisy etc.

    And that’s that.

    Hitler for example got no end of productivity at virtually no cost working slave labour to death building his tank factories didn’t he?


    • DJR

      Glad to hear someone else sees a property bubble. House prices ten times av. industrial wage and rents above 2007 bubble levels – how could it be anything else?
      You don’t get a bubble solely through excessive borrowing. Tulip mania through to Dot-Com crash have shown that.
      People buying property now are getting dangerously overstretched and highly vulnerable to any interest rate rises. Same as with the last bubble, they are imagining ever-rising prices and facing extortionate rent so will grab whatever property they can get their hands on. It’s a pity David isn’t urging caution this time around.

      • michaelcoughlan

        “House prices ten times av. industrial wage and rents above 2007 bubble levels – how could it be anything else?”

        Yeah bang on.

  7. Arthur Tormay


    Ordinarily, I have a lot of time for your column. But to suggest that we should have bullet trains running up and down and across this Country is stretching it a bit toooo far. There isn’t the demand for the that kind of service in rural Ireland.

    Aren’t Irish Rail in trouble as it is carrying passengers for free on our mainline services while the trip isn’t able to get enough paying passengers to pay for the diesel!

    You come with some good ideas, David. this just ins’t one of them.

    • Grzegorz Kolodziej

      But Arthur, if there is no demand, than how come so many people travel so far to Dublin ? I personally knew people who travelled every day to work from Gorey and from Dundalk (the first one was a guy who worked in a phone shop, then there was one single white-collar worker left by her husband with a mortgage, and a college lecturer). Do you really think they’d rather continue waking up at 5am, pay 2,000 car insurance, 10 euro for parking and stay in traffic jams for an hour or two if they could travel fast by train, if they could hop on a 300km/h train, read a book, drink nice coffee, and get off in Dublin in 30 minutes?

      Besides, you cannot say that there is no demand based on no supply of such infrastructure. Of course, as things are, no one say would travel from Galway or Cork to work to Dublin. But is it because it is too crazy, or because – in current circumstances – it is too slow and too expensive?

      Prior to Keynes, Say’s Law – “Supply creates its own demand” -played a key role in economic thinking. With the collapse
      of investment during the Great Depression of the 1930’s, Keynes held that Say’s Law was no longer valid. Say’s Law
      was replaced by Keynes Law – “Demand creates its own supply.” The economic focus shifted from production to consumption
      and emphasis was placed on government spending as a way of maintaining aggregate demand.

      Well, that was all bollocks if you ask me: it led to virtual economy and stock prices rising in the US, while retail is collapsing.

      • Build it and they will come.

      • E. Kavanagh

        Say there was a bullet train from Galway to Dublin; and one could get to Heuston in 40-minutes. The question I have is how expensive would it be to run such an operation? I see the average price for a ticket from Paris to Lyon is €54, but that is a much longer distance.

        In countries where they have high speed rail do people commute 130 miles? I don’t know the answer, but I very much doubt it.

        I’d be very surprised if the economics of this make any sense.

    • EugeneN

      The idea should be to create the demand.

      • Grzegorz Kolodziej

        In general, there are two approaches to how to run a big company or country’s public transport system.

        The first one starts from creating the demand. Somewhat humouristically (yet conveying the nature of this approach), it can be portrayed as follows:

        1. Organise a big survey and hire PR specialists for astronomical sums to check if there is a demand for some new product.

        2. Wait 6 months for the results

        3. In the meantime

        3.1 Either find out that indeed, there was a demand, but it is already met by a guy who invested his money in actually delivering the goods without PR campaign and thus now he has an advantage

        3.2 Or find out that your money is gone


        If you are a rather insignificant individual like me, that usually means you misallocated your resources on unproductive demand-creating campaign, and now you are in debt


        If you worked for Anglo-Irish, or play golf with salmon socialists, or if your debt is in 7 figures or bigger – you get bailed out: the demand-creating scheme is never called out a bluff, because someone else pays for it.

        Same if you are in charge of a country or a big bank: then you first stimulate the aggregate demand, and then simply create money into existence and burden future generations (i.e., the debt of the newest generation of taxpayers had been already consumed by the previous generations of baby-boomers: as Keynes has said, debt does not matter, because in the long run, we will be all dead – he didn’t have kids).

        When does creating the demand comes to an end?

        When there is too few people born to bail out the consumption of previous generations (in Europe, 1970s onwards), and demand can no longer be created by new debt – because the whole system might collapse: situation now).


        there is a second way: start producing a product that is either
        a) cheaper
        b) better
        c) innovative
        d) or all of the above

        and demand will follow the supply.

        (Say’s Law).

        Was there a demand for i-Phone, before it came out? No.
        For Windows operating system? No.
        For Wagyu beef? No.
        For Facebook? No.
        For General Relativity Theory, Banach-Tarski Paradox or quantum physics? – certainly not: after all, they all defy common sense. No one would have ever demaned it: yet useful things came out of it.

        People do not use 300km/h trains in Ireland not because there is no demand for it, but because there are no such trains.

        In economy, there is a thing called the residual demand curve:

        So(p): Dr(p) = D(p) – So(p ), where

        S means supply, d means demand, and p means price.

        This is a demand function minus the quantity supplied by other firms at each price (portion of market demand that is not supplied by other firms in the market).

        That portion in empty, isolated, wealthy and populated by gregarious people is huge.

        For example, it turned out that the demand for air travel in Ireland was bigger than anyone apart from Mr O’Leary could have imagined, but the supply was inelastic in price.

        With so many empty spaces, people commuting as far as nowhere else in Europe and public transport 5 times more expensive than in Vienna (if you compare 365 euro annual integrated pass in Vienna and nearly 2,000 for DB + Luas + DART in Dublin), I cannot think of any other country in the civilised world where the latent demand for 300km/h trains and metro could be bigger.

        “Build it and they will come.”

        The fact that we live in such a small country does not mean that we cannot think big.

        Or as I always say: who knows what Christopher Columbus might have discovered, had he not been hindered by America? ;-)

  8. “However, in the general economy the level of new debt is low (and very low for this new level of growth), which means growth is coming through income and productivity – i.e. we are getting more from less.”

    Quite so.



  9. Mike Lucey

    “Now Dublin is ten times bigger than metropolitan Cork. Such a degree of centralization is unheard of in modern western societies. But it won’t change on its own because there is a tendency for economic activity to cluster around large, dominant cities.”

    True, but in the case of Dublin I don’t think it’s not a natural phenomenon, I feel it’s more a case of bad central planning. The move for decentralization was a correct move that should have been enforced with a take it or leave it offer but the civil service gurus stumped that.

    High-speed train links and quality roads between Cork, Limerick, Galway and Dublin are needed first. I think the key is to develop major university towns and interlink them efficiently and then look to the smaller towns with 3rd levels.

    Remember the movie, The Field of Dreams, “build it and they will come”.

    BTW, if we do upgrade our rail system, it’s the Chinese we should be taking to. Maybe doing a deal with them in relation to a Shannon Estuary port and Shannon Airport in an overall package.

  10. David,

    I remember thinking exactly the same thing when I lived in Japan for a bit. 300kmph Shinkansen running every 10 minutes between all major cities is how it works there. Tgat would entirely transform living and working in Ireland.

    The only thing that’s different now is that China Rail effectively stole the designs for a bullet train from Kawasaki Heavy a few years ago, so we wouldn’t even have to pay Japanese (or French) prices. While the Chinese are here building out the network, get them to throw up a couple of fourth or fifth generation nuclear plants to power the whole thing, bam, job done.

    • E. Kavanagh

      Are you sure you want to have the words “nuclear plants” and “bam” in the same sentence and for people to think it is a positive thing?

  11. CorkPlasticPaddy

    Sorry, David, but I have to disagree with what you’ve stated in your latest blog. The prognosis is promising, but for who though? It’s certainly not promising for the ordinary man and woman on the street and my reason for stating that is down the ‘dumbing down’ mentality of most of the employers in Ireland. They want people to work all the hours that God has created for half nothing and even then they’re not satisfied!!
    They’re constantly pleading the ‘poor mouth’ when it comes to pay and conditions while at the same time they’re living the ‘high life’. Where is the fairness in that??

    My wife and I are in our early 60′s. I’m retired and my wife has a job with very casual hours since she lost a well paid job back in 2009 due to the management of that company running the company into the ground. Since then she has tried and tried to get a secure job, but all she gets are ‘dear jane’ letters of rejection despite all her years of experience in doing the kind of work she’s done up to now. The saying ‘if you pay peanuts you’ll get monkeys’ comes to mind and also ageism is alive and well and living in Ireland when it comes to applying for and getting a job in her line of work.

    As to what you had to say about a TGV style rail system being built in Ireland? Forget it!! Especially if you’re going to have the clowns that are running Iarnrod Eireann running it!!

    • Grzegorz Kolodziej

      TGV is possible in Ireland, but in public projects, Ireland has to discover something called “tender”. So far we have the following scenario:

      1. There is money to spend, so there is a plan to spend it.
      2. State bodies ally with trade unions and banks.
      3. Money is allocated: the vast majority on salaries (70-80%).
      4. Construction starts. Trade unions get greedy and demand more money. Construction slows down. Finally, after 100 years of the Irish independence, two disconnected tram lines are built, whereby 1/3 of the track has to be relaid.

      There is no tender, no competition, and too much money to spend.

      Look at Japanese railways: everyone talks about them, but few people know that they are private, and that there was a tender to build them.

  12. EugeneN

    The reason why this bubble will burst wont be the same as the last time. It will be because supply catches up with to or exceeds demand. In the old bubble anybody could buy a house, you could pop in with your 20K salary and 40K bonus ( verbally agreed to) and get a ten times income house of 600k. There was some panic but very little about people being priced out because the banks kept offering higher multiples of income, and 100% mortgages, and so on. Every year, new deals. Also wages did in fact increase in those years.

    The new bubble is indeed a housing shortage, the problem with thinking that is not a bubble is that supply demand bubbles can exist. If there are only 20% of houses built relative to demand, and that number is the same next year and the central bank sticks to its guns then prices will stay where they are. They will be the 3 – 3.5 multiple of what the top 20% of buyers can afford. Prices were stagnating last year until the government transfered tax money to developers again.

    (Of course the government could interfere again, but I wonder about their political ability to do so. )

    If on the other hand if the supply creeps up to 50% of demand, or 100% ( realistic demand I am talking about here, people on average incomes or above) then prices have to fall. So either the government continues to try to loosen credit to keep both supply and prices artifically high ( a la the boom pre 2006), or prices fall as supply recovers — there is literally no other way except significant wage increases.

    ( They may try to manipulate the market of course but they may have shot their bolt.)

    If FG don’t try and get supply up and thus prices down, they will be replaced by somebody who will.

    The other thing about being a small open economy is that we are basically in the mother of all positive self enforcing feedback loops. Ireland is a high wage economy, speaking a language known to most people as their second language, and therefore attracts lots of immigrants who temporarily push up rent and housing causing a demand shock. Then the bubble bursts and they leave, and the Irish leave, and house prices collapse as supply accelrates ( since it is the supply accelerating that causes the price bust and therefore the recession) – and all of this until the boom cycle begins again, amplified by the number of immigrants and returning Irish who push rents and house prices higher, causing a demand shock … and you know the rest.

    Positive feedback loops are generally to be avoided.

  13. Deco

    David – thank you !

    We have a productivity problem, with regard to settlement, work, and the travel time between both.

    Large parts of Ireland are not economical for trains. But they could provide feeder buses to train transport hubs like Galway, Portlaoise, Mullingar, Kilnenny, etc.. Or car transport, park-n-ride.

    We are not good at building efficient infrastructure. And we need to review this. As a result we pay a fortune in labour and consumption taxes, and have little or no infrastructure.

  14. McCawber

    A great fable worthy of Hans Christian Anderson.
    Because once upon a time the civil servants, gardai, teachers and nurses were patriotic and had the good of Ireland at heart.
    That was before the evil witch “greedygut” and her minions like president to be, Bertie and his band of fixies friends joined forces and the digout was born.

    • McCawber

      president to be = president wannebee hopefully

    • Deco

      Correct McCawber.

      The entire institutional state is just a mechanism for facilitating the reward of incompetence, inefficiency, and pompous posturing.

      I used to rail against IBEC. But TASC (the PR wing of ICTU) are now even more dangerous, and equally extortionate.

      There is something profoundly absurd about a bunch of statists who became millionaires off the tax system, telling us that equality is an objective that MUST be pursued – by means of increasing taxes.

      Actually, it is deeply hypocritical.

      TASC are another form of gombeenism.

      I will forgive the nurses. They have the job of cleaning up the mess creating by Ireland’s inability to talk openly about the alcohol problem.

      But the gardai are fiddling. It is beyond ridiculous, at this point in time.

  15. McCawber

    Infrastructure should be designed to create the future.
    Dublin IS too big.
    We need to plan a new city in the west and then a TGV might make sense
    You need the trains occupied going in both directions
    Etc etc etc – dream on.

  16. Adelaide

    “A rising population in a rich country tells you all you need to know about the economy. In a world of birth control, people have kids when they are confident about the future.”

    Ah David, this is sloppy. Did you not read the census? Plus, you are guilty of conflation.

    The head lady from the CSO was on the radio, here’s four points that grabbed my attention alas I can’t remember the actual percentages.

    In comparison between this new census and the previous
    1) The year-on-year birth rate has declined
    1) More Irish people left than returned
    3) The Irish Population (native) has declined
    4) The Overall Population (native and non-native) has increased

    So native Irish people are having less babies and more are leaving the country than returning. While there is no shortage of non-native immigrants.

    And for what it is worth, this percentage did stick in my mind.
    5) 18% of all births are to non-native parents.

    • Adelaide

      Which in my view reflects the old adage.
      “The Irish are nice people, except to each other.”

      • michaelcoughlan

        “The Irish are nice people, except to each other.”

        Yes most certainly. Ireland especially despises it’s young people the most loathed group being the most talented ones we produce. Secretly delighted we are when they leave. No one to show us up for what we really are the race of people where the “sow eats the farrow”.


    • michaelcoughlan

      “5) 18% of all births are to non-native parents.”

      Consistent with a population demographic where 1 in 5 is a non national.


    • Grzegorz Kolodziej

      “3) The Irish Population (native) has declined”

      While these things are getting more and more difficult to find, however, I’ve managed to find the well hidden table in 2016 Census that would debunk this. It is Table 6.1:
      White Irish: 3,821,995
      White Irish: 3,854,226

      Than you have Other White (so that’d be basically EU + Commonwealth):
      2011: 412,975
      2016: 446,727

      For Other Black is roughly the same

      Where we see a huge increase is Other and Not stated (increase by 75%). What that is, I have no idea (nor does it tell you).
      They are not Asian though, because that’s another category.
      So: not white, not Asian, not Travellers, not Black. Go figure.

      But this way or the other, all of this is way below the minimum generational replacement rates.

      “1) The year-on-year birth rate has declined”
      It’s been declining in every European country apart from for their Muslim populations. In Ireland, of all EU countries, it has been declining the slowest for the natives (but still declining). Part of it is due to the culture of not having children and binge drinking on foreign holidays 3 times a years instead, for it concerns every western country. The worst demographics are in Germany. Of course, that doesn’t mean it is good.

      The Census also says that “The total number of non-Irish nationals fell slightly to 535,475, or 11.6% of the population, the first decline since the introduction of this question in 2002″.

      At the same time, in April 2016, persons born abroad accounted for 17.3 per cent of the population, up from 17 per cent in 2011. However, it does not follow from that
      “Consistent with a population demographic where 1 in 5 is a non national.” (source?).

      The Census does not say how many of these 17.3% are Irish born abroad. However, if the Census says that 612,018 Irish residents speak a foreign language at home, that would give a figure of around 13% non-Irish (native + born abroad).

      What does it look like from the Australian perspective, where 26.8% of population was foreign born?

      Btw, there are 62,032 Muslims in Ireland – gosh, that’s half of the Poles, half of the British, and twice the Lithuanians! I wouldn’t think that there are that many.

      A curious fact for both of yous: the 2016 Census says there are 9,575 Chinese here. While the CSO number of Poles, for example, is similar to Polish Embassy figures and to my own calculations given here before sources (where I repeatedly pointed out that 2/3 of Poles left Ireland after 2008, from the peak figure of around 350,000), this is NOT the case for the Chinese in Ireland.

      The Chineses Embassy gives a figure of 30,000. But these are all legals (of course, there are no illegal EU citizens here for obvious reasons).

      I actually have to return to something else now, but my own calculations allow me to increase that figure for between 60,000 and 100,000; but I won’t go into details.

      I’d be interested if someone knew who are the Other and Not Stated (I don’t think that Not States are stateless – what, 10,000 stateless? Naaaah….

      • mishco

        “The worst demographics are in Germany.”

        Germany has “the worst” demographics but hasn’t it the best economy in Europe?

        Grzegorz, please tell me what I am missing about the oft-cited negative relationship between population decrease and the economy. Korea too always worries about its decreasing population, but it manages to replace the missing people with high-technology. Incidentally, this seems to me to alleviate slightly the already huge and unsustainable rise in population worldwide.

        • Grzegorz Kolodziej

          You see, the whole thing about Germany having the best economy in Europe is true in one respect, but false in another.
          Why is it true?
          Germany and Holland are the two countries that have most benefited from the euro currency and the EU enlargement; like before they were the once who most benefited from debt forgiveness (after all, not only they never paid any war reparations, but their own pre-WWII debt was forgiven) – this is not just an opinion, this comes from, for example, looking at their enormous and consistent trade surpluses since the euro and the enlargement while the rest of Europe was having enormous trade deficits.

          Also, Germany is one of the few countries (pre-property bubble China was another) that actually manufacture things (I often say in jest that Germany is a country that has the most modern 19th century technology in the world).

          So this is yet. Where is the “no”?

          The “no” lies in the fact that as an export driven economy, they have to:

          1) Maintain their neighbours in colonial dependency, making sure that they do not become technology hubs and stay providers of cheap, highly qualified labour (the taxpayers of those countries, mind you, pay money to educate their own to a high level, only then to be absorbed by German industry).
          2) Conquer new markets.

          Ad 1): The first explains why, as revealed by the EU own data, out of each euro Germany pays to Visegrad Group in the EU subsidies, 125% of that money returns to Germany – in other words, far from being Europe’s main contributor of funds, they are Europe’s main sponger of capital and subsidies (the same applied to them imposing punitive rates on the rest of Europe in 1990s to finance their reunification). It also explains why they and Luxembourg – not Ireland – are Europe’s prime destination of money laundering, and why in 2011, according to Global Financial Integrity report, Poland was one of the most exploited countries in the world in term of illegal capital transfers (German companies as a rule not declare their true incomes and transfer profits to Germany to the tune of up to 10bn euro a year: hence their media smear campaign against Kaczynski and Orban after they tried to stop that).

          In other words, German success is based on their neighbours not reaching their full potential. After all, eastern Europe – not the US or China – is the main importer of German goods IN THE WORLD.

          Ad 2): This explains their constant flirting and interest in the Ukraine and Russia, from Schroeder being on the Gazproms pay list, through Nordstream 2, up to German companies constantly breaching sanctions on Russia and investing in Russia (Daimler Benz even had a contract with Kamaz to deliver equipment for the Russian army, post-sanctions), while at the same time making sure that the rest of Europe applies those sanctions (in pure economic terms, the country that has lost the most money on sanctions on Russia was not Germany or Russia, but Poland).

          As to:

          “please tell me what I am missing about the oft-cited negative relationship between population decrease and the economy.”

          In the Keynesian economy based on stimulating the aggregate demand via debt – taxing future generations – you need some rate of demographic growth to sustain the whole thing.

          In case of Korea, you are right.
          The speed of aging in Korea is unprecedented in human history, 18 years to double aging population from 7 – 14% (least number of years), overtaking even Japan and Germany (source: Thomas Klassen “South Korean: Ageing Tiger”, Global Brief, January 12, 2010).


          You do not take into account one factor: it takes 20-25 years for the consequences of the demographic collapse to be felt! For example, look at one-child policy in China and how is this hitting them only now, along with their debt bubble.

          Besides, South Korea has nowhere near as much debt (total debt: public and private) as Ireland or the UK. The savings ratios in Asia are generally very high.

          So far – to support what you say and what is valid for NOW – South Korea managed to secure the top spot on Bloomberg’s ‘Most Innovative Country in the World’ for the second consecutive year (of course, the hidden factor are the technology transfers from the US army: unlike Poland, in S.Korea and Israel, the US actually does agree on technology transfers – a factor in Israel IT boom David McWilliams totally missed, for this has an influence far extending the military sector)!

      • michaelcoughlan

        Hi Grezgorz.

        I like your posts they are very insightful and smart. Also I really like you Tony and Adam because if I make a mistake you guys highlight it which means I can learn. There is one or two observations I have from above and I am not being facetious I genuinely don’t know he answers;

        “Where we see a huge increase is Other and Not stated (increase by 75%). What that is, I have no idea (nor does it tell you).They are not Asian though, because that’s another category. So: not white, not Asian, not Travellers, not Black. Go figure.”

        The other category is probably people ticking the box who don’t want to be profiled and is probably a mix of everyone.

        “In Ireland, of all EU countries, it has been declining the slowest for the natives (but still declining). Part of it is due to the culture of not having children and binge drinking on foreign holidays 3 times a years instead, for it concerns every western country.”

        That’ lazy. We have a bad attitude towards drink no doubt. However the young people are leaving because it is all but impossible to buy a place and raise a family here. That’s the answer. That’s why the native population is declining.

        “The Census also says that “The total number of non-Irish nationals fell slightly to 535,475, or 11.6% of the population, the first decline since the introduction of this question in 2002. At the same time, in April 2016, persons born abroad accounted for 17.3 per cent of the population, up from 17 per cent in 2011. However, it does not follow from that “Consistent with a population demographic where 1 in 5 is a non national.” (source?)”

        What’s the statistical difference between a person born abroad and a non national? Is it a person born to Irish parents abroad?

        “At the same time, in April 2016, persons born abroad accounted for 17.3 per cent of the population”

        That’s just short of 1:5 ratio.


        • Grzegorz Kolodziej

          “We have a bad attitude towards drink no doubt. However the young people are leaving because it is all but impossible to buy a place and raise a family here. That’s the answer. That’s why the native population is declining.”

          Of course you are right that the main reason people are leaving is because it is impossible to buy a place and raise a family. I often raise that point that Ireland has to address its high cost issue. Take for example the price of the agricultural land, about which I wrote recently, which is certainly not more fertile than in France – yet it is the most expensive in the world, and it changes hands in 555 years on average (I quoted a source last time I posted this statistics, but have no time to retrace it now), while in France every 70 years (young farmers living nearby have the right to buy first).

          This is because as with houses, things are being bought in Ireland for speculation rather than for production. This is the plantation mentality – grab the land, throw out the peasants, build a wall around it, and turn it from a fertile field into a grass covered empty hole with occasionally one sheep or two. Import the food you need from the monopoly rent extortion, – that’s the recipe that Ireland seems to have copied from England, except England also had the industrial revolution and Ireland didn’t.

          If Ireland does not address the cost issue, then the path of immediately eating all fruits of economic growth by higher wage demands in public sector is dead end street. These higher wages are then immediately swalled by higher cost, and you end seeing those nice statistics about Ireland being, at one stage, the 3 richest country in Europe – yet the annual rent to price of the house ratio was 12-14/1 in the states, 40/1 in Ireland and 100/1 in Dublin.

          With drink, it is not the question of drink as such (albeit that too is a question).
          It is a question of western culture post 1960s whereby one does not want to make any sascifice (and kids are a sacrifice) because instant gratification is a must. Of course, many people, in this high cost environment, simply cannot afford children – but it is not like those who can afford them in Ireland have 5 of them.

          I said drink, because in Ireland the instant gratification is drink – in Germany it is a car or long holidays abroad, but the pattern is the same.

          Consider this: Poland was so poor and destroyed after WWII like you wouldn’t believe – after 1944 Uprising for example, Warsaw, was destroyed more than Nagasaki after the atomic blast.

          Magazines were full of recipies how, in a shortage of meat, make increase the calories in your dinner from 2,000 to 6,000.

          Yet it was back then that people had 3-5 kids and were volunteering their after-work free time to rebuild Warsaw, not now – when magazines have recipies how to reduce calories in your dinner.

          The same goes for the rest of the western world.

        • Grzegorz Kolodziej

          As to that 17.3%, my point was about people of Irish origin born abroad. Are they foreign?
          German law for example makes a dinstiction between Staatsangehörigkeit and Staatsbürgerschaft; whereby some people might be born in Germany and have a citizenship, yet be considered a little bit foreign, and some people might be born outside Germany and considered German; while French law states that every person born in France is French automatically and no person born abroad is French automatically, no matter how French their originas are.

          In Germany’s case, they f…d up themselves a bit with that mindset – what they have done is that to allay their demographic disaster, they imported hundreds of thousands (if not millions) of people living in Russia for hundred years or more, who are nonetheless 100% German, with no foreign blood – assuming that blood rules the culture you were brought up, and once brough up to Germany, they become Germans.
          Boy oh boy, how wrong did they got it (same with Israel, who that way imported more than 2 million Israel-haters – yes that’s right: there are Israeli citizens hating Israel).

          Historically (especially looking at Irish and Polish history), the most fierce nationalists usually ranged from children of foreigners.

          But with Islam, it is different. Islam imports defy that trend and Europe did not digest that fact yet, drawing circles on pavements with crayons after each terror attack as if they had a srew loose.

        • Grzegorz Kolodziej

          Btw, thanks for the compliment, Michael – you are very kind

      • Deco

        I would not be surprised if official Chinese statistics (which have a tendency to be highly inaccurate in many areas ) are proven to be more accurate than the numbers coming out of the institutional state.

        Another example of the sheer incapacity of the institutional state to do anything properly, let alone tell the truth.

  17. mishco

    “Such a degree of centralization is unheard of in modern western societies.”

    What you say is certainly not true of S. Korea, where about half the 50m population live in the huge Seoul-Incheon urban complex. This has a lot to do with trading facilities like airports and container ports, which your article ignores.

    Of course Korea has fantastic road and rail links all over the country -
    and the terrain, unlike ours, is covered in hills and mountains. But no one wants to live near these facilities. They mostly live in high rises, and often need strong barriers to keep down the sound level. And the environment suffers even more than ours does from monocultural farming.

    Korea finishes above us in the oft-quoted science and maths education tables, thanks to its ruthless and creativity-numbing pursuit of facts and information at a young age. Their emigration figures are lower than ours because – unlike us – they lack a language they can use among their close neighbours, so have to stay home. Koreans too often have the “old sow that eats the farrow” attitude, but I don’t see here the charities and ad-hoc fundraising efforts that you see in Ireland.

    OK, many did get out on the streets and depose their leader, which looks like something we could copy. However, she’s actually a rather decent and honest person, and the means used to depose her were very questionable and will lead to further instability, possibly the undermining of their much-vaunted multinationals.

    I really don’t wish such a lifestyle on Ireland, any more than I wish us a population of 50 million (Korea’s inhabitable surface is less than ours and yet they too complain about a static population!). Be careful what you wish for, David.

    • Deco

      South Korea’s bigget problem is actually boozing. It is a bot like Ireland in that regard. However, in South Korea, they are at least talking about it.

      Meanhwhile on DIagEo’s monopoly island, the discussion is killed by media organs that rely on advertising for the same problem.

      Concerning charities, that is collapsing. Some of this is due to failed politicians being recycled to head up charities, at ridiculous salary levels.

      But a lot of it is due to the fact that people are realising that there are so many scams operating now in Ireland, that throwing money any any of them is encouraging them.

      The fact that the media rolls out regular guilt trips merely verifies the need to be sceptical.

  18. Deco

    The problem with public transport in Ireland, is that before ever gets to the point of achieving economies of scale the Brendan Ogle factor looms on the horizon to destroy that option.

  19. Deco

    Have we reached the point of Peak Netherlands Debt ?


    I am asking because, it is clear that the Dutch Labour Party politician, and former Fin Min (and head of the EU Fin Min group) has produced a spectacularly stupid statement.

    Basically, he has stated that the PIGIS, are in trouble because they are too busy enjoying themselves on wine and women.

    Now, anybody who has ever been to Spain, will see clearly that most deadly levels of alcohol consumed, is consumed by Northern Europeans on two week binges in the sun. And that is to say nothing about the level of unprotected sex that results in a whole series of STDs having to be treated in hospitals in Northern Europe the following years.

    The locals are merely serving their customers, and cleaning up the vomit.

    Obviously this clown has never observed this. Maybe his vacations were in the Alps or somewhere else. He seems to think that Pedro and Luigi have nothing better to do than drink themselves senseless.

    Southern Europeans have been had by a corrupt racket that rewarded their own politicians, and sold out their own taxpayers. This has been replicated in Ireland by FF, IBEC, and ICTU in the Bertie Party years.

    The politicians of DE, NL, FI, AT have facilitated this, by bribing the said political machines.

    In any case, it is clear that the former Dutch Fin Min is in a state of illusion.

    And if he got this wrong, then the question must then be asked – what other illusions, and nonsense was he entertaining in his “brain” when he was Fin Min.

    A warning sign, perhaps.

    • Deco

      By the way, one aspect that I forgot.

      That clown was appointed to lead the Eurozone Fin Min Group.

      We have Juncker as EU Commission President, and he made a series of gaffes last week, that were ignored by the Irish media.

      We have Phil “Irish Water meters” Hogan. There to help you move the travellers on.

      Then we have Merkel + Hollande => MerDe. Everything that Merkel touches goes from problem to crisis. And Hollande is another Louis XV type ruler with loads of fun on the side, always oversized by problems that he fails to fix.

      And also this clown.

      Bertie Ahern once fancied himself to be EU Commission President also.

      It seems that incompetence is a core requirement to be heavy hitter in the EU.

      And there is NO discussion on it, except on sites like this.

    • GIS

      Spot on, Deco. I hope that Dutch bastard gets his well deserved comeuppance, particularly for his disgraceful behaviour towards Varoufakis in the past.

      • Deco

        His behaviour towards the Greeks was assinine. It really is tempting fate.

        The NL electorate turned against him, and gave his political machine a hiding. Of course, he will be back. There will be an image refurbishment, and a message rebrand. And it will be the same as usual.

        Just look at FF, or SF. Both did terrible deeds. And they are on the radio being consulted as members of so-called “respectable society”.

  20. Deco

    Well, it looks like the Irish Water debacle has entered a new stage.

    It was difficult for FF/FG to avoid losing face.

    Meanwhile the architect of the defining mess of the past 5 years, is in Brussels designing bigger and better…….

  21. Deco

    Several bubbles are now getting in a very frothy state.

    1. Canadian real estate. And with it the CAN banking system. Throw in reckless provincial governments, like Ontario which has one of the highest public deficit of any similarly sized regoinal government in North America. More indebted than California or Illinois.

    2. Aussie real estate. A mirror of the CAN real estate bubble.

    3. Swedish real estate and banking. The idiots in charge of Sweden have done it again. Another boom built on leverage, and clueless assumptions. And they are once again in complete denial. The Swedish banking system is run by recklessness. Disaster in sight.

    4. US commercial real estate.

    5. US Car loans. Subprime logic at work again. No ability to repay the loans. A real income crisis, due to static nominal incomes, and increasing costs of living/stealth taxes. Not helped by decisions to build walls with Mexico, which will push the cost of living up further.

    6. Social Media stocks, and the Dot Com 2.0 mess. P/E ratios that are completely irrational, concerning business models that are easy to replicate. And in many cases no earnings, just a share price.

    7. Government debt.
    i) French debt is getting the jitters over a possible Le Pen versus Melenchon contest. Both are statists. And both will borrow more, and possibly default. Makes you wonder why Irish PAYE tax payers are being taxed to the hilt to bail out French Insurance companies. Macron is another statist, except his trajectory to state debt crisis is longer. However, it is just as certain.

    ii) Greece. Over loaded with debt, thanks to the EU.

    iii) Italy. Running out of money. runing out of exports. Running out of Italians also. But still loaded up clueless politicians promising easy choices, and a continuation of irresponsibility.

    iv) Belgium. Massively indebted. Deeply divided. Held together for the sake of the neighbours. What happens when Wallonia is asked to pay it’s fair share, and it’s politicians are forced to tell the truth ?

    v) Canadian Provinces. Ontario is the worst. But Alberta is also spending carelessly.

    vi) US states with high debt levels – usually one part states, run by the cousin of the crooked FF party.

    8) Real estate in Western Germany, The NL, and the Flemish speaking part of Belgium.

    9) Chinese banks, and their real estate loans.

    There are lots of potential “significant scale non-performing loans on the banks balance sheet” scenarios. There is a pretence that all is well. And with low interest rates the sort of recklessness that creates problems is in abundance in all of those sectors indicated above.

    • McCawber

      Great summary.
      You seem well informed about Belgium.
      Wallonia used to be the wealthy part of Belgium and in fact kept Flanders going, however Wallonia is now the region needing help.
      Flanders has a government, Wallonia has a government and then there’s the Belgium government.
      The Belgians are cute tho’.
      There’s at least some strategic governance going on.
      A couple of examples, they did a deal with the Nuclear Power generators to refit their 4? reactors so that they’re good for another 50years.
      Wasn’t cheap (you mentioned debt) but the deal is done.
      They’ve installed a car reg reading system on all their motor ways.
      The idea is to charge ALL (national and international) trucks using their motorways a fee per kilometer.
      And from a socialist perspective it will be the transport company being billed rather than the drivers.
      That probably wasn’t cheap either but it’ll be a nice little earner in the not too distant future.

    • michaelcoughlan

      What a brilliant post.

      Do you get any sleep?


  22. Pie Squared

    Yes, yes, yes David!

    Absolutely 100%.

    Dublin is a primate city, an elephant, multiple times the size of the next city contender, Cork. This phenomenon occurs in “small” countries.

    We are a small country but as you rightly point out, we have higher ambitions within reach:

    Through our 3.6m potential voters overseas (3.6m!!!!!)
    Through our empty landmass beyond the Pale, (an asset, not a liability – contrary to condescending media “treatment”)
    Through our fantastic young people
    Through our growing population
    Through our growing economy
    Through our global voice
    Through our (mostly sound) Western values

    But, we must get:

    Regional and urban planning
    Rail transport


    And we must think and act big, always with Irish people’s interests at heart…
    Prepared for some failure BUT much success.

    Hint 1 this will take strategic thinking, negotiation and balls!
    Hint 2 it will not be a walk in the park. We will have to make difficult choices!


    Then we will finally get over the Famine and move into our future.
    And find ourselves with a MAJOR source of renewed competitive advantage.

    Let’s use what we’ve got and go forth and multiply…in every sense of the word!!!

    (ps This is not a party political broadcast for the Catholic Church!!! ;))

    • Is it on behalf of the Moonies?

    • McCawber

      I’m a firm believer in strategic thinking and planning.
      However the issues are (in simplistic terms)
      1. Do our politicians want strategic planning.
      2. Do the electorate want strategic planning.
      3. How do we educate/convince 1 and 2 that strategic planning is necessary for our future wellbeing.
      4. How do we identify the strategic thinkers in our population and tap into their innate talent.
      Four believe it or not is the easy bit.

      • 1. Not if it threatens their wealth extraction, so NO.

        2. Most of them have no clue what it means and could barely spell the words ‘strategic planning, so NO.

        3. We DON’T.

        4. Most have left the country and the rest are in the process of doing so. That’s ongoing.

  23. Deco

    France is seeing a surge in support for a French version of Ruth Coppinger, or “how to bankrupt a country like Venezuela”.


    He wants to spend 100Billion Euro on Green investment. No idea what that means. I reckon he does not know either. But Macron is using eco-buzzwords, so Melenchon has to out-shoot Macron.

    All of the candidates are “something for nothing” candidates, except Fillon who makes it clear that France has to undergo adjustment, and pain.

    He is in a similar position to Jacques Neckar, who also brought painful financial reforms before the French, only to have them dismissed as politically unacceptable.

    Currently, the need for illusion and retence outscores the need for an honest appraisal of the situation in France.

    And the same applies here, also, if you listen to the nonsense in the media about the need for a bigger fatter institutional state, and a bigger more clueless EU.

    • Deco

      I am referring to Ruth Coppinger, because she is the hardliner on clueless ideas in the Irish Left.

      She threatened Starbucks with state takeover. [ To be honest I would not try Starbucks, in either public or private ownership as I consider their effluent to unbearable].

      And she also demanded that the state run the Dell factory in Limerick.

      Do you want a pastry with that ?

    • Deco

      I am referring to Ruth Coppinger, because she is the hardliner on clueless ideas in the Irish Left.

      She threatened Starbucks with state takeover. [ To be honest I would not drink Starbucks, in either public or private ownership as I consider their effluent to unbearable].

      And she also demanded that the state run the Dell factory in Limerick.

      Do you want a pastry with that ?

  24. Truthist

    Nay !
    The prognosis is depressing.
    And, that is because that is the way that The Dreadful Few want it to be.
    Already we know that Trump is a RAT !
    Seems that Premier Xi is too ;
    Ref. comments attributed to him supporting the obvious false narrative of Syrian government doing chemical attack.
    Syrian government did no such thing.

    I remain skeptical of Putin ;
    My skepticism is based on Putin’s links with the cult that the real ruler of USA — Mr. Jared Kushner [ Husband of Trump's favorite daughter ( Ivanika ) ] honors.


  25. The concept of reality is not the concern of most people today. We imagine that government will be the provider of all, that the economy can be Managed and that our currencies are actually money. Nothing can be further from the truth and reality is biting back. Reality is rejected by the politicians, the bankers and the people they are talking to.

    May I introduce you to Hugo Salinas Price’s essay
    “When Reality overthrows imagination”

    “Now to get to the heart of perhaps the most important imaginary construct in which we live: money. Today, the world uses as money something totally imaginary: fiat paper money exists in printed form and can be folded, but its value is quite imaginary; the numbers on this paper money, which give it value in proportion to their magnitude, bear no relation at all to anything tangible. On the other hand and to a much greater extent we have fiat digital money; this form of money is absolutely imaginary, and is produced by the imaginary banking systems of the world.”

    And to Egon Von Greyerz

    Gold Is Protection Against Lies And War
    By Egon von Greyerz of Gold Switzerland
    Thursday, April 13, 2017 1:37 PM EDT

    “Lies will lead to systemic collapse
    The above is but a few examples, the list is endless. The reasons for the lies and deception are quite complex. In simple terms, we are at the end of an era when all moral and ethical values are gone. ”

    Both are well worth the read and the contemplation they stimulate. What course of action you as an individual should take, to protect yourself from all the lies and deceit being overwhelmed by the reality, will become self evident.

  26. corkie

    Hi David. Nice upbeat article. Would you please tell your site admin that a new version of WordPress is available. Also my browser reports that your login page is insecure. More info here : http://tinyurl.com/j72fap9 Cheers

  27. Truthist

    “The Prognosis is promising”, so says our host David McWilliams.

    To speak of “prognosis” ==> the patient being afflicted by some ailment or disease.

    So, why no “moral courage” from David [ Specialist & Professor ] to speak about the disease which is underlying the patient’s grave condition ?
    After all, unless the parasite causing the disease is neutered, any upbeat declaration about the prognosis is rubbish-talk.

    Here — courtesy of Chris Spivey’s blog — is a fluid educative history, from the pen of John Hammer, of the parasitic infection afflicting the patient ;


  28. Truthist

    Prognosis is WW 3.

    And just when Syrian government are winning against the parasite’s mercenaries, along comes Trump the RAT — Prior to president election, Kill-ary Clinton we knew for sure is evil ; Trump we only knew to be “bad” — with his false flag “chemical attack” [ alleged "chemical attack" ] on the Syrian populace so as to blame it on Syrian government & thus justify USA “openly” attacking Syria.

    False Flag:
    How the U.S. Armed Syrian Rebels to Set Up an Excuse to Attack Assad

    By The Daily Bell Staff

    April 08, 2017


    • The only countries left in 2017 without a Central Bank owned or controlled by the Rothschild Family are:

      North Korea


      Follow the money. Banksters run the world. The prognosis is negative until the central banking system is shut down by you the people.

      • Grzegorz Kolodziej

        Even though that list would make sense to me, I find it hard to believe that Tristan da Cunha would be controlled by Rothschilds, and it definitely does not have central bank, unless we stretch it to them being connected to the Bank of England via them using pound sterling (but this can be thoroughly confuted by a simple reminder that Cubans, Iranians and Syrians also use dollars in the real economy, as did Poles with dollars and Croatians with Deutsche Marks in the 1980s – so that would make them connected to FED).


        - Are all farmers and own their own stock
        - All their land is communally owned
        - All households have plots of land at The Patches on which they grow potatoes
        - Livestock numbers are strictly controlled to conserve pasture and to prevent better-off families from accumulating wealth.

        Btw, they are desperately looking for employees:


        But, like I said, other than that your list would probably make sense, although I think the Rothschilds get too much free advertisement on this blog, as they are only one of 3-4 most powerful families in the world.

        I thought I might as well help them get any by publicising their appeal for workers on David’s blog :-)

  29. Truthist

    David is big into “fixing” the world.
    “The Television Brain” complex has a “let’s fix the world” element about it ;
    Such is what I have noticed anyway.

    But, I posit that some matters require NO fixing for the prognosis to be more than promising,


    Irish State should NOT have “fixed” / soverigned / guaranteed the private debt of private banks !


    Irish State should not have abided by David’s “Fix” for the private debt of the private banks.

    Instead, we should all have awaited 10 April 2017 for David — the master wordsmith [ an accolade much more memorable than to be a famous economist ] — to declare ;
    “The prognosis is promising.”

    Afterall, Television Brains — just like TV channels — eventually have their uppity fixes.

    Here is excerpt of timely piece from John Hamer hosted on Henry Makow’s blog about TV broadcasting & the Television Brain resulting from it ;
    I include preface from Makow.

    Television as Mass Deception

    April 15, 2017

    With the advent of the popularity of television in the 1930s and 1940s,
    the banksters had an instrument through which the masses could be controlled effectively, immediately, and effortlessly.
    British author, John Hamer says, “Television is by far the most devastating brainwashing device ever unleashed upon humanity.”

    Makow Comment-

    Cabalist bankers whose religion is inverting reality were quick to seize the organs of mass deception. Thus, society suffers from cognitive dissonance. For example, heterosexual Christian institutions like marriage and family are under relentless vicious attack but this is portrayed as progress, i.e. “sexual liberation,” women’s, trans and gay rights.

    The mass media no longer pretends to be truthful, objective or to give both sides. We have adopted the Communist model where the “Party” (Masonic …ish bankers) is always right.
    the media is parroting the transparent lie that Assad would gas his own people, a flimsy pretext for Western aggression.
    The West has transitioned to Communism without the fuss and bother of a revolution.
    Thus, no one has noticed, and the media certainly won’t tell you.

    by John Hamer

    Ironically, the BBC, upon which Orwell modelled his ‘Ministry of Truth,’ became one of the pioneers of television, the ultimate newspeak/doublespeak medium.

    When Orwell died in January 1950, there were only 100,000 TVs in Britain and 5 million in the United States. Today, there are almost as many TVs as there are people in the western world.

    Most people do not realize that when they turn on the television in their home, what they see as a constant flow of images is actually flickering and although we do not recognize this consciously, the repetitive pattern of flickering images creates a state that is similar to hypnosis in the television viewer.

    Studies by researcher Dr. Herbert Krugman have shown that within 30 seconds of television viewing, brain waves switch from predominantly beta waves, indicating alert and conscious attention, to predominantly alpha waves, indicating an unfocussed yet receptive lack of attention. The brain’s left hemisphere, which processes information logically and analytically, tunes-out whilst a person is watching TV, whilst the right hemisphere of the brain, which processes information emotionally and non-critically, is allowed to function without hindrance.

    Due to this phenomenon, television transmits information, which is not actively recognized at the time of exposure, much like hypnosis and therefore when viewing TV, we do not consciously rationalize the information at the time of transmission and we become more open and suggestible. Because of this passive, hypnosis-like viewing of television, as well as its predominance in our homes, television is one of the most powerful tools of control, today.


  30. Truthist

    Very probable that Ahmadinejad is a “crypto” seeking to bring slaughter on Iran so as to please The Dreadful Few ;

    Apr 12, 2017 11:49 AM

    Iran’s Ahmadinejad Goes Against Ayatollah, Formally Files to Run Against Rohani for President

    Ahmadinejad previously said he wasn’t going to run after Ayatollah Khamenei advised him not to, but many hard-liners seek candidate to stand up to Trump

    read more: http://www.haaretz.com/middle-east-news/iran/1.782971

  31. McGoo

    “The population is rising and heading back to pre-famine levels. This is great news.”
    No, No, No, No!!!
    It’s terrible news.
    Sure, it might be good for the economy, but it’s not good for the people who work in the economy, and surely that’s more important?

    I like living in a low-population-density country and county. I like the fact that I can:
    1. Own a car.
    2. Drive where I want, when I want, without huge traffic problems. Even if I’m going to the beach on a bank holiday weekend.
    3. Park easily, and usually for free, when I arrive.
    4. Live reasonably near to where I work. Long-distance commuting is a living hell.
    5. Own a yacht (despite being on a normal income).
    6. Ride horses.
    7. Play golf (I don’t, but I could afford to if I wanted to).
    8. Climb a mountain without booking a time-slot or buying a day-pass.
    9. Breath clean air.
    10. Live in decent, affordable housing (yes, I’m joking, but a low-population-density country *should* have decent affordable housing. Ireland has screwed up on this one).

    Sure, low population density means fewer economic opportunities. But I’ve lived in the UK, and Dublin, and spent time in Tokyo, and I’ve made my choice. Low population density is better for living. Even if I can’t get sushi delivered at 2am.

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