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They just can’t help themselves… March 25, 2016

Posted by WorldbyStorm in Uncategorized.
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Meant to put this up last week. Pat Rabbitte wrote in the SBP the previous weekend that:

Michael Noonan and Brendan Howlin separately watched the lunchtime news headlines in the Dáil bar updating the economic growth figures for 2015. They must have wondered if Ireland is the only country in modern times where the government presided over four times the growth figures off the eurozone average and still managed to lose the election.

But perhaps he should have read this from the Observer that very same weekend.

Irish economic growth in 2015 was a supersonic 7.8%, according to official figures, outpacing China, India, and every other developed economy in the world. What’s more, in the final quarter, moved up yet another gear, to a breakneck 9.2% growth rate. The Celtic Tiger is roaring again.

Except…

Except that it’s not, really. If it were, taoiseach Enda Kenny would be enjoying a bumper majority in the Dáil. Instead, he was booted out in last month’s election, following an ill-judged campaign around the message of “keep the recovery going”. Beyond Dublin, the response from the electorate was: “What recovery?”
Ireland’s Central Statistics Office is not making up the data. But the dubious behaviour of the multinationals that dominate Ireland’s economy render many of the figures meaningless.

Ah:

Take the figure for “gross fixed capital formation”, which tells you how much an economy is investing. It rose by a huge 28.2% to €46bn in 2015, the chief reason why domestic demand in the Irish economy is powering ahead.
Yet, nearly all of that increase was down to the Irish subsidiaries of multinationals buying intellectual property from their own shell-company subsidiaries, usually in Bermuda or the Caymans. Ironically, they are hauling these “assets” into Ireland, the home of European tax piracy, ahead of an expected international clampdown on the offshore shell companies.

And after a nice mention of the indefatigable Michael Hennigan of Finfacts it notes:

Ireland’s recovery is real, but it’s not the poster-child for austerity some claim. Growth is probably running above 3%, maybe 5%. But 7.8%? Pure blarney.

So perhaps that is why Howling and Noonan might come to some understanding of how this last government could lose that election.

Comments»

1. CL - March 25, 2016

Apart from distortions to GDP due to MNCs, the conventional method of measuring economic growth renders such statistics inadequate as indicators of economic well-being.

“If you sell off a road, a government or local road, and you put up a toll booth and make it into a toll road, all of a sudden GDP goes up.”
http://www.counterpunch.org/2016/03/25/the-great-ponzi-scheme-of-the-global-economy/

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2. benmadigan - March 25, 2016

was in the south and west last summer and was horrified at the devastation in small towns and villages –
Off the tourist track I found shops etc closed down and a silence hanging over everything. I don’t know what it will take to enact the “recovery” in those areas but it won’t happen overnight and it won’t happen without massive capital investment.

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EWI - March 25, 2016

Don’t forget the pernicious effect of ‘the bypass’ in killing small towns and villages. the only people to benefit are large supermarkets and the property industry.

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Dr. X - March 26, 2016

This has been a long time coming though. “Hey mister, no one lives in that house anymore” was a consistent refrain when I was doing door-to-door sales in the small and medium towns of the west and south-west two decades ago.

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3. Tomboktu - March 26, 2016

Taft on “The Astrology of the Irish Economy” is worth a read:

http://notesonthefront.typepad.com/politicaleconomy/2016/03/the-astrology-of-the-irish-economy.html

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