Wednesday, November 13, 2019

US FDI into Ireland and Irish investment in America — facts and myths

Impressive data on inward and outward FDI from Ireland and to Ireland, from the United States Department of Commerce — in the real world it's bullshit! 

Confusion abounds about United States foreign direct investment (FDI) in Ireland and "Irish" FDI in the US — the latter is dominated by American firms. Ireland's inward FDI excites politicians, senior civil servants, public enterprise agencies, professional vested interests coining from it, and gullible journalists, as Ireland appears to be among the leading recipients of US FDI in the world while Ireland is also among the top 10 countries for investment in America!

Thursday, November 07, 2019

American political and business corruption predated Trump presidency

"Critics say that America is a lie because its reality falls so far short of its ideals. They are wrong. America is not a lie; it is a disappointment. But it can be a disappointment only because it is also a hope," are the concluding lines of the 1981 book, 'American Politics - The Promise of Disharmony' written by Samuel P. Huntington (1927-2008), a Harvard political scientist.

Friday, November 01, 2019

Humanity's birthplace may be in Botswana or in several African locations

Researcher Vanessa Hayes with the Ju/’hoansi people in what is claimed to be the ancestral homeland of humanity. Chris Bennett/Evolving Picture

Makgadikgadi in Northern Botswana is one of the largest salt flats in the world and is all that remains of the formerly enormous Lake Makgadikgadi. Two hundred thousand years ago Makgadikgadi was Africa's biggest lake and it was surrounded by wetlands. Scientists from Australia's Garvan Institute of Medical Research and the University of Sydney in October published the results of DNA sequencing cross-referenced with other information, including geological and climate data. The scientists say that the area was completely surrounded by a very uninhabitable region, "which led to our hunter-gatherer ancestors staying put for some 70,000 years." The researchers claim that the area is the cradle of humanity.

Friday, October 25, 2019

Real US 2019 weekly pay for production/ non-supervisory staff 9% below 1972 level

Inflation-adjusted average weekly pay this year for production and nonsupervisory staff in the United States is 9% below the 1972 level, using 2019 dollars as per the chart above.

Friday, October 18, 2019

Ireland has no post-Brexit economic plan

Leo Varadkar, the Irish taoiseach, gives Jean-Claude Juncker, European Commission president, a Thank You card from Ireland for the latter's support since the Brexit vote in June 2016, Brussels, February 6, 2019.

Ireland has no post-Brexit economic plan despite an Economic and Social Research Institute (ESRI) estimate last March that in an agreed deal scenario up to 45,000 fewer jobs would be created in a decade.

Thursday, October 10, 2019

Economic possibilities for our grandchildren with credit to Keynes

This article focuses on 100-year predictions made in 1930 by John Maynard Keynes (1883-1946), the British Depression-era economist, while challenges such as climate change, housing, automation and ageing are set to dominate the coming 100 years.

Wednesday, October 02, 2019

Change in the Irish media scene in 2019

RTÉ, the Irish state broadcaster, is “flat broke” according to one of its radio presenters last August; the Irish Times owns the two Irish-owned daily broadsheet newspapers while Mediahuis, the new Belgian owner of the Independent titles after successive control by two business entrepreneurs since 1973, will likely give a welcome greater European orientation to news at a time when the number of the Irish that leaned towards Euroscepticism has plunged, thanks to Brexit.

Tuesday, October 01, 2019

US foreign affiliates sell most output outside the United States

The majority-owned foreign affiliates of American multinational enterprises sell most of their output outside the United States according to data from the US Bureau of Economic Analysis.

Somebody should dare tell President Trump that the US may have a trade surplus with China!.

Sunday, September 29, 2019

Irish property "Ponzi scheme" vs. Brexit delusion

In April 2019 the National Treasury Management Agency (NTMA), which is the agency that manages the assets and liabilities of the Government of Ireland, published a paper,  'Characterising the Financial Cycle in Ireland,' by Rossa White, chief economist of the NTMA, and Lisa Sheenan of Queen’s University Belfast, in which they characterise the Irish property bubble period of 2001-2008, "a Ponzi scheme...with ruinous cost."

Monday, September 23, 2019

Climate Change: Indonesia and burning carbon-rich peatlands

Heavy smoke hangs over the Indonesian islands of Bangka and Belitung as well as Kalimantan (73% of the island of Borneo, excluding East Malaysia and Brunei). This thick smoke comes from the peat fires that have engulfed these peatlands. On September 11, 2019, NASA/NOAA's Suomi NPP satellite using the VIIRS instrument  (Visible Infrared Imaging Radiometer Suite) captured this dramatic photo of the smoke rising from these islands in Indonesia.

In August 1883 the eruption of the Krakatoa (Indonesian Krakatau) volcano on Rakata Island between Java and Sumatra, in the Dutch East Indies (now Indonesia), was one of the most powerful in recorded history. Explosions were heard 2,200 miles (3,500 km) away in Australia as ash and rock was blasted to a height of 50 miles (80 km) in the atmosphere.

Sunday, September 08, 2019

War and Peace: Tolstoy's rejection of 'Great Man' leadership myth

Anton Chekhov (1860-1904), left, and Leo Tolstoy (1828-1910) in Gaspra, Crimea, May 1901. At a previous meeting, Tolstoy commented, “You know, I hate your plays. Shakespeare was a bad writer, and I consider your plays even worse than his.'"

Leo Tolstoy (Lev Nikoláyevich Graf (Count) Tolstóy, in Russian,) one of the world’s greatest novelists, is the author of the novel 'War and Peace,' which was written in 1865–1869. It is set in the period from 1805 to 1820 and describes the war between Russia and France through 1812. The book also contains an analysis of leadership that has resonance today, and Tolstoy rejects the notion that great men were instrumental in achieving success or failure in history.

Wednesday, September 04, 2019

Crazy economics have fuelled Hong Kong's protests

Last year a couple sold a parking space in Kowloon (in North Hong Kong on a mainland peninsula across from Hong Kong island's Victoria Harbour) for HK$6m (US$765,000). In 2017 the Straits Times of Singapore reported that a 4,242 sqft (394 sqm2) apartment had sold for HK$560m (US$71m).

This year, Kuala Lumpur, the Malaysian capital, ranked 32nd out of 35 global cities with an average property price of RM494,266 (US$119,738), according to Global Living report by US real estate firm CBRE.

Sunday, September 01, 2019

The popes of French wine

Grape cultivation or viticulture is almost as old as civilisation and the Phoenicians of the East Mediterranean carried the grape into France about 600 BCE. This year an archaeologist at the University Of York, UK, disclosed in a paper where he is the lead author, that grapes from the Jura region in Eastern France, near the border with Switzerland, which are used to produce Savagnin blanc (a white wine not to be confused with Sauvignon blanc), are the exact same grape, down to the genetic level, which have been grown there for at least 900 years.

Wednesday, August 28, 2019

Ireland's transactional membership of the European Union

The Treaty of Accession 1972 was the international agreement which provided for the accession of Denmark, Ireland, Norway and the United Kingdom to the European Communities. Norway did not ratify the treaty after it was rejected in a referendum held in September 1972.
Here Jack Lynch, taoiseach/ prime minister, signs for Ireland. Ireland was the poorest country in Western Europe in 1972 with a GDP per capita at 50% of new EEC member Denmark, which was the richest. The 3 new members formally joined on January 1, 1973.
When Ireland joined the European Economic Community in 1973, the Iron Curtain hemmed in millions in the vast prison that was the Soviet Union and its satellite states while military juntas ruled Spain, Portugal and Greece. By any measure, the enlargement to 28 countries and the development of the European Union from the wasteland in the aftermath of World War II, has been a remarkable success of gigantic proportions. Ireland has benefited enormously and compromise is the essence of such a huge project.

Since the UK Brexit vote in June 2016 support in Ireland for European Union membership as reflected in opinion polls has risen to highs of over 90%. However, there has always been a significant transactional aspect to membership including the cute hoorism that has been a perennial factor in domestic politics.

Friday, August 23, 2019

Irish prices 27% above EU average, adjusted disposable income below

In 2018 Ireland had the second-highest prices of consumer goods and services in the European Union.  Denmark was on top at 38% above the average. It appears Luxembourg was level with Ireland but about 40% of the duchy's workforce live beyond its borders. Germany was just 4% ahead while Britain was at 17%. The Irish difference with Spain was 34%.

Ireland was the only EU member country to have experienced a fall in consumer prices in 2008-2012 and it's level was 18% above the EU average in 2013.

Thursday, August 15, 2019

Irish and Euro Area debt as recession fears rise

Debt data above are in respect of 2017 and 2007 for the European Union's 27 member countries (ex-UK) taken from the International Monetary Fund’s (IMF) Global Debt Database as both public and private debt data are available.

Sunday, August 11, 2019

Low interest rates, globalization, technological change and ageing

“May you live in interesting times," is claimed* by non-Chinese to be a Chinese blessing or curse and we are today living through not only interesting times in economics and finance but unique ones in the history of commerce.

Monday, August 05, 2019

Ireland's missing exporters

Naïve commentary on exporting and opening new overseas markets is not uncommon. International expansion often ends in failure — research published in 2017 by Banco de España (Bank of Spain) on service firm exporters in Belgium, France, Germany and Spain found that French export starters had the lowest survival rate with 31% of firms staying in the market after the first year. Spain was at 36% and 57% of new exporters had survived in Germany.

Sunday, July 28, 2019

Industrial Revolution in Ireland: Fortune and Misfortune

The ruins of a large 5-storey factory building in open countryside in the townland of Knocknagarrane 4 kilometres south-west of the West Cork town of Bandon (visible from the road linking the villages of Old Chapel and Timoleague), is a symbol of the heroic failure to bring the British Industrial Revolution to the area. However, the entrepreneuring family that built the factory would still have a local economic impact for 100 years more.

Sunday, July 14, 2019

A 'winter of discontent' and Brexit

The ship of fools (from a 1549 German woodcut) is an allegory, originating from Book VI of Plato's Republic — written in 360 BCE (Before Common Era) — about a ship with a dysfunctional crew (Wikipedia): "Imagine then a fleet or a ship in which there is a captain who is taller and stronger than any of the crew, but he is a little deaf and has a similar infirmity in sight, and his knowledge of navigation is not much better. The sailors are quarreling with one another about the steering––every one is of the opinion that he has a right to steer, though he has never learned the art of navigation and cannot tell who taught him or when he learned, and will further assert that it cannot be taught, and they are ready to cut in pieces any one who says the contrary."

Brexiters dismiss warnings that a 'No Deal' departure from the European Union on October 31, 2019, will trigger chaos at ports with risks of food and medicine shortages coupled with massive disruptions to international supply chains.

Sunday, July 07, 2019

Fintan O'Toole Brexit and Irish direct democracy

Fintan O’Toole, the chief political and arts commentator of the Irish Times newspaper, has made a stunning leap from November 2010 when he called the economic bailout of Ireland by the European Union-International Monetary Fund, “the longest ransom note in history,” to a torrent of scathing  commentaries since mid-2016 on the Brexit decision by Britain to leave the EU.

Thursday, July 04, 2019

Brexit & Global Britain: UK's top global trade surplus in 2018 with Ireland?

In 2018 46% of UK goods and services exports went to the EU while 2% went to Africa. According to the Financial Times in 2018, Chinese goods exports to Africa were eight times larger than those of the UK and even bigger than the top three exporters — Germany, France and the US — combined.

Brexiters with an ambition to make Britain an exporting superpower may be surprised that the UK’s official second biggest global trade surplus in 2018 was with Ireland. The United States was in first place but it’s possible that Ireland should have the top rank as the US claims 2018 goods and services surpluses with the UK!

Tuesday, June 25, 2019

European Central Bank: German word ‘schuld' can mean either 'debt' or 'guilt'

Emmanuel Macron, French president, with Mario Draghi, ECB president
Brussels, June 21, 2019

The German word ‘schuld' can mean either 'debt' or 'guilt' and Germans have a history of aversion to debt and fiat money (government-issued currency that is not backed by a metal such as gold or silver). The genesis of this obsession pre-dates the hyperinflation in the aftermath of the First World War.

Friday, June 21, 2019

Ireland's 2018 standard of living per capita below EU28 average

While Ireland had a GDP (gross domestic product) per capita at 87% above the EU28 average in 2018, a proxy for material standard of living per capita was again below the EU28 average and that of Italy despite the latter's long period of economic stagnation.

Thursday, June 20, 2019

The poor state of entrepreneurship in Ireland

“Ireland is ranked among the most entrepreneurial countries in the world with increasing opportunities for budding MBA entrepreneurs,” according to a 2018 article sponsored by the UCD Michael Smurfit Business School. A year before Enterprise Ireland, the public enterprise agency, stated, “In Ireland, there was (sic) an estimated 35,000 new business owners in 2016. 1 in every 23 people in Ireland (aged 18 to 64 years) is a new business owner. This is similar to the US (1 in every 25 people), and high compared to many other European countries, where the average is 1 in every 29 people.”

Wednesday, June 12, 2019

From economic heyday of British Empire to EU and Brexit

Boris Johnson, a possible prime minister of the United Kingdom, wrote in a column in the Daily Telegraph in May 2016:

Sunday, June 09, 2019

Germany's 2018 global goods trade with 237 countries/ territories

Germany had merchandise goods trade with 237 countries and territories in 2018 encompassing every region of the world — with partners that were large, small and tiny. There were trade surpluses with 167 and deficits with 70 partners.

Monday, June 03, 2019

Minimum corporate tax rate to imperil Ireland's FDI model

For decades Ireland felt assured that it would maintain the tax advantage that was first provided in 1956 to lure mainly American foreign direct investment (FDI) to Ireland. On Friday (May 31) in Paris 129 member countries of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) adopted a Programme of Work laying out a process for reaching a new global agreement for taxing multinational enterprises.

Wednesday, May 29, 2019

Ireland in top 10 for competitiveness in world in 2019 - Fact or Fiction?

IMD, the Swiss business school, released its World Competitiveness Rankings for 2019 this week with Singapore at the top of ratings of 63 countries. Ireland returned to a 7th ranking it had achieved in 2016 based on data for 2015 — the year of Leprechaun Economics when moves by Apple and other multinationals to reallocate via accounting entries (not relocate) assets such as intellectual property (IP) to Ireland, had resulted in GDP (gross domestic product) rocketing over 26%.

Friday, May 24, 2019

Ireland wants ‘modest’ global corporate tax reform

OECD data published earlier this year showed show that corporate income tax remains a significant source of tax revenues for governments across the globe. In 2016, corporate tax revenues accounted for 13.3% of total tax revenues on average across the 88 jurisdictions for which data are available. This figure has increased from 12% in 2000. Corporate taxation is even more important in developing countries, comprising on average 15.3% of all tax revenues in Africa and 15.4% in Latin America & the Caribbean, compared to 9% in the OECD.

The Irish Government had hoped that global corporate tax reform was on a “slow boat to China” but the winds of change are accelerating and on Thursday this week, Pascal Donohoe, finance minister, told a conference in Dublin that he wished for “modest” reform.

Saturday, May 18, 2019

New Cold War: Containing China is a dumb policy

At current prices combined US-China GDPs of $21.3trn & $14.2trn is 41% of global GDP of $87trn in 2018. Using Purchasing Power Parities the International Monetary Fund estimates China's value at 19trn & US at 15trn. China had been the world’s biggest economy for about 2 millennia & in the 1890s was overtaken by the United States.

Martin Wolf, chief economics commentator of the Financial Times, this week quoted lines from a poem by Robert Frost (1874-1963), an American poet, “Some say the world will end in fire/ Some say in ice.” Wolf said these lines "capture the world’s possible economic prospects. Some warn that the world of high debt and low-interest rates will end in the fire of inflation. Others prophesy that it will end in the ice of deflation." The more present economic danger this week is addressed in a special report in The Economist and David Rennie, the Beijing bureau chief and author of the Chaguan column on China, writes, "If a vengeful America wants to hurt China, there are few incentives for Chinese officials to propose imaginative concessions or urge reforms that might repair ties with America. In geopolitics as in marriage, contempt is an emotion that leads to bad outcomes."

Trade dispute

Saturday, May 04, 2019

Idiots reject compelling science of climate change

I was in Jeddah, Saudi Arabia, on a day in July 1995 when the noontime temperature rose to almost 50 degrees Celsius. Saudi Arabia had its record hottest temperature on June 22, 2010 at 52.0°C (125.6°F) in Jeddah. The record heat was accompanied by a sandstorm, which resulted in 8 electric power plants to fail.

Friday, April 26, 2019

Irish Government as alchemists in innovation game

In the Middle Ages, alchemists searched for the philosopher’s stone to transmute or transform common metals to gold. However, despite failures, their work was the genesis of modern chemistry. Ireland will have failed twice — 2013 and 2020 — to meet innovation goals and with some help from our old friends the leprechauns, 3 significant global innovation rankings have given the country ranks of 10, 14 and 21 in the past year. However, the Irish Government is still at the level of the alchemists as any young knowledge economy startup that has international appeal and is funded by venture capital is inevitably acquired by a foreign company.

Sunday, April 21, 2019

Ireland's underperforming indigenous exporting sector

Ireland has two economies: the foreign-owned exporting sector that has driven economic transformation and its underperforming indigenous counterpart which is vulnerable to Brexit. Ryanair — Europe’s biggest individual airline brand in 2018 carried 139m passengers — for example, has been a rare significant international success in recent decades. Ireland’s annual indigenous exports to the other 18 countries of the eurozone are less than €5bn or 20% despite currency stability, while 40% of food exports go to the UK.

SEE: Irish Government as alchemists in innovation game

Saturday, April 13, 2019

Irish median income at 13th in Europe, UK at 14th rank

Irish median income in 2017, adjusted for price differences called PPS, was at 13th in Europe (EU28 + Switzerland [2016], Norway and Iceland [2016]) closely followed by the UK and Malta, according to data this year from Eurostat

The median is the mid-point where half or 50% of a sample is above and 50% below.

Wednesday, April 10, 2019

The Blame Game and its Irish connections

Searches for "blame game" in Irish Google searches in 2007 as the property bubble was about to burst. A second spike was in November 2010 — when the Irish economy had to be supported by an international bailout.

Last month the Financial Times headlined a report ‘The British begin the Brexit blame game: PM and her ministers are already pointing the finger at EU for impending failure' and this week the Irish Times published an opinion piece ‘Internal British bloodletting is the biggest worry of the Brexit blame game’ from a former Irish ambassador to the UK — just a decade ago the politicians, civil servants and media cheerleaders, who brought the Irish economy to the brink of ruin for the second time in a generation, not surprisingly had played the same finger-pointing game.

Saturday, April 06, 2019

Few Irish firms in FT 1000 & Inc. 5000 Europe lists of fastest-growing companies

The FT’s 2019 annual list of the top 1,000 of Europe’s fastest-growing companies, was published by the Financial Times in March and this week INC. — the American entrepreneurship magazine — published its Inc. 5000 Europe list of the top 5,000 fastest-growing private companies in the region.

Ireland has one legitimate entry in the FT 1000.

Monday, April 01, 2019

Time for Internet change 30 years after first website

The revenues of the top 5 US tech firms in 2018 exceeded the IMF's 2018 forecast for the gross domestic product (GDP) of Switzerland — a country of 8.5m people with an income per capita that is among the highest in the world. Amazon's high growth strategy focuses on high profitability in the long term; tax provisions in accounts may not correspond with what is paid while Microsoft's tax amount in 2017/2018 is not at a normal level. Alphabet is the parent company of Google.
Facebook's net profit margin of 45.5% reflects its near-monopoly position while not having to make capital investments on a scale with large non-digital companies.   

Friday, March 22, 2019

European Globalization 500 years ago: Savonarola & Machiavelli

This year is the 500th anniversary of the death in France of Leonardo da Vinci (1452-1519), the multi-talented artist of the Italian Renaissance. He lived in a period of tumultuous change that has parallels with modern times — an information revolution; technological change; the advance of science; challenges to traditional verities; European globalization in what was called the Age of Discovery; populism and rejection of change.

Tuesday, March 05, 2019

Ireland’s Faustian Bargain with hyper- globalization

Hyper- globalization, boosted by the digital revolution and mobility of capital in recent decades, has enabled a small number of global firms to make “free trade” a “delusion” according to a United Nations agency. Ironically in a decade when corporate tax avoidance has become a topic of global public interest and the malcontents of globalization have had an impact on elections in several countries, Ireland has become even a bigger facilitator of international corporate tax avoidance while gaining unexpected tax windfalls.

Friday, February 22, 2019

Paddy Agnew in Irish Times’ gig economy for 31 years

Sunday Times - Ireland 

The Irish Times newspaper is involved in an international labour dispute with Paddy Agnew, an Irishman, who worked as Rome Correspondent for the Irish Times for 28 years on a monthly salary plus expenses, without interruption.

Thursday, February 21, 2019

Top Swiss bank says tax evasion not crime in Switzerland after huge French fine

Who Owns the Wealth in Tax Havens? Macro Evidence and Implications for Global Inequality Annette Alstadsæter (Norwegian University of Life Sciences) Niels Johannesen (CEBI, University of Copenhagen) Gabriel Zucman (UC Berkeley and NBER) December 27, 2017

After a French court had heard that UBS, the biggest Swiss bank, had engaged in “James Bond”-like tactics to illegally solicit French clients and help launder more than €10bn, a judge on Wednesday imposed a €3.7bn fine and ordered the bank to pay €800m in damages following a guilty verdict of aiding tax evasion. Five of six ex-bankers were convicted and given suspended jail sentences together with combined fines of €950,000.

Thursday, February 14, 2019

Tale of Two Cities: Dublin ranked worst for traffic jams, best for expats

Dublin, the Irish capital, has this week been ranked among the worst cities in the world (ex-Asia) for traffic jams while being one of the most “liveable” European cities for expatriates.

Thursday, February 07, 2019

Irish workers most productive in world or same as Italians?

This week the Organisation for Economic Cooperation and Development (OECD) issued data which showed that Ireland had the highest GDP (gross domestic product) per hour worked in 2017 of 38 mainly rich country economies.

Wednesday, January 23, 2019

Brexit: David Cameron's flawed referendum of 2016

Updated: The 1975 British referendum on membership of the then European Economic Community (EEC) was a concession by Harold Wilson, the Labour prime minister, to the Left of his party and the trade unions. Despite a 67/33% loss in the referendum, the Labour Left had withdrawal from the EEC in the Labour general election manifesto of 1983.

In 2013 David Cameron, Conservative prime minister, promised another referendum on membership of the European Union that had grown from 9 members in 1975 to 28 members by then (Croatia joined on July 1, 2013). Cameron wanted to placate the Right of his party and to stem the growing support for the anti-EU/immigration UK Independence Party (Ukip).

David Cameron said in his 2013 speech promising a referendum:

Thursday, January 10, 2019

Poor wage growth in rich world despite jobs recovery

Despite jobs recovering to pre-Great Recession levels or higher, wage growth has been near-stagnation levels in several countries with workers down the economic pyramid taking much of the pain.

Real wages in the period 1999-2017 have almost tripled in the emerging and developing countries of the G20 (Group of Twenty comprising 19 countries + the European Union), while in advanced G20 countries they have increased by a much lower total of 9%.