Tougher Times but Life Roles On

According to the RTE news yesterday the government downgraded its outlook for its economic recovery with GDP now forecast to decrease by less than 1%. They have now projected growth 0.8% which is down from 1.8% last November. This gives a pessimistic economic forecast for the rest of the year. They also told of how the domestic economy is expected to remain in recession for this year and next, with only the export sector providing growth according to the revised figures. Employment will fall by 30,000 jobs this year and over four years the number at work will increase by 100,000. But with more than 300,000 jobs going since the recession, high unemployment figures currently at around 14%. We also have to pay back our bailout which is based on our economic growth. Can life get any tougher for families trying to pay mortgages?

They talk about the dull times in the 1980’s how people earned to put food on the table. I know this is a terrible time for some people in Ireland however I personally haven’t heard of any one dying from starvation I think we are not that badly off, were are just worse off than we were 5 years ago and signs on it was the bank paying for our good times. I think we should stop worrying about our finances to an extent. I think that we need to revert back to Abraham Maslows 1943 paper on Theory of human Motivation he found that self-actualization was the most motivating factor. If we provide for one self and important others do we really need a fancy life with 4000 square feet houses for families of four or 2 new cars for driving. Most of the generation before us didn’t have them and it didn’t do them any harm. There is life after high wages and I’m afraid it continues whether we like it or not.

The Property Collapse Shows the Value of Independent Free Thinking

In Ireland the second half of the Celtic Tiger was based nearly solely on the property bubble. This continued Ireland's unprecedented period of sustained economic growth. However when this property bubble burst, the Irish economy went to into a recession which caused high unemployment and mass emigration. Since all bubbles burst, why were so many people caught by surprise when the market crashed?

According to Charlie Fell (2011) in his column for the Irish Times 'All bubbles and busts are a product of human nature, though the Irish experience has been traced to “groupthink” – a faulty decision-making process that leads to a low probability of successful outcomes'.This idea developed from the earlier 1970s to examine why groups consisting of bright intelligent people often made irrational decisions. Common patterns in groupthink include illusions of invulnerability, discouragement of dissenting opinion and illusion of unanimity

These conditions can be seen from analyzing the Irish experience. Individuals seem to believe that the prices of houses would continue to rise for the foreseeable future. It was as if an investment in property was a risk free investment. Although there has never been a property bubble that did not collapse and there was warning signs, people continued to invest. ‘Shur isn’t everyone else investing in property’. So of Irelands most intellectual people became to heavily involved in the risk of the property market.

Our Taoiseach in 2007 Bertie Ahern told a group of reporters that anyone who criticized the Irish economy should commit 'suicide'. This directly relates to a discouragement of criticism.

According to Fell (2011) Diverse opinions based on sound analysis are to be valued rather than frowned upon. To quote Gen George Patton: “If everyone is thinking alike, then someone isn’t thinking.”

Forestry The Way Forward

In recent times many developed countries have viewed growth in the services sector to be the way forward. However, in an article by Joe Dermody, that appeared in the Irish Examiner on April 29th forestry could be a prosperous sector for Ireland. (Available at : http://www.irishexaminer.com/business/ifa-forestry-has-potential-to-inject-50m-into-local-communities-152912.html )


According to John Bryan, who is the IFA president; "forestry has the potential to inject €50m annually into local communities." The article states that private sector timber in Ireland is currently 200,000 cubic metres per annum. However, this figure could increase to one million cubic metres per annum by 2018, according to Mr. Bryan.

The IFA president said that "if this production potential was realised it would mean an annual injection into the local economy of in excess of €50m from timber sales. There is also the prospect of the value of down-stream processed forest products on the market."

These profit opportunities, however, are subject to government policy. According to the IFA "the Government needs to reduce the time required to get a felling license; to increase funding to support construction of essential forest road infrastructure; to support the adoption of more suitable harvesting equipment for small scale forestry and to offer enhanced training for forest owners".

One has to wonder if Ireland can regain prosperity through returning to its agricultural roots. In a modern era, where more and more graduates are entering the services sector, should we be training students for careers in areas such as forestry instead? It is clear, however, that if timber production can increase substantially by 2018, the sector has the potential to create much needed employment and wealth in local communities.

TEPCO's Contribution

Since the devastating earthquake in Japan, the country have been dreading a major energy shortage in the north-east of the country since the region's power generation capacity was damaged by the quake and tsunami. The Tokyo regional power company, TEPCO, have been working flat out to try to avoid continuous blackouts. From all the work put in they have been able to bring online power plants than initially anticipated. The energy demand in the area is estimated to peak at 55GW (gigawatt), from this the expected shortfall was 8GW but further analysis has reduced this figure to just 3GW.
Japan is known worldwide for having the most enegy-efficient economy in the world. compared to China, their energy consumption is eight times less. Many Japanese companies and residents have been taking voluntary measures to conserve electricity, which is in short supply since the Fukushima plant and several thermal energy plants were shut down by the tsunami. These steps have helped Japan to cope throughout their major ordeal. TEPCO workers have been selfless to help the wellbeing of their country in more ways than one. all their workers have agreed to take a 25% pay cut. They have also made it their main priority to remove the water from its reactor buildings following a sharp rise in the intensity of radioactive substances in the water in the turbine building.

On-field success continues to mask overriding problems

http://www.ft.com/cms/s/0/47c7a440-702d-11e0-bea7-00144feabdc0.html#axzz1KiVUKhdQ


A number of weeks ago Joel Glazer, one of the influential sons of American tycoon Malcolm Glazer, walked past a packed away end in Stamford Bridge which contained over 2,000 boisterous Manchester United fans. It is a move that Joel will think twice about repeating in future. He received a torrent of abuse from hard core Manchester United fans that are unrelenting in their insistence to oust the current regime. This is a regime which has continually extracted money directly from the clubs account to foster their personal debt and ambition. In fact it is perhaps only United’s on field success which is preventing a mass outcry to exile the owners permanently. Last night Manchester United reached their 3rd Champions League final in 4 seasons, and are currently in pole position to win the Premiership title which will see them become the most successful domestic club in England. However the facts remain that through the Glazers ownership and particularly the last 3 years, United have been surviving an a shoe string budget. A shoe string budget at least for a club which sits atop Forbes richest sporting franchises.

With the aggro which is being contained by the on-field success palpable, The Glazer family have now hired a PR firm to help readjust the image which the family is blemished with. Their current image is not helped by the fact that they are rarely seen at matches and have never made an attempt to interact with the fans. In fact it is the lack of clarity in their actions which has arguably angered United fans most. The Glazer family, owners since 2005 are only occasionally seen at matches, have intensely kept themselves away from the media glare, and regularly give out only basic financial information about how the club is run. Perhaps this new PR approach may involve finally assuring fans of the clubs direction and ensuring them that the club is not merely a cash cow which will be milked for all its worth.

Surely any half decent PR firm will encourage the Glazers to freeze ticket prices for the coming season and maybe even lower season ticket prices. Indeed, the evidence supports a rise in prices at Old Trafford this summer, backed by another aggressive marketing campaign aimed at selling season tickets. Already, the club has marketed its non-existence ‘season ticket waiting list’. While the list is nothing more than an email marketing database – offering no priority tickets to supporters who sign up – there is also no shame within the regime about using every available tactic to sell tickets. After all, how can there be a waiting list when United failed to sell all available season tickets last summer?

Still, the question for the regime is whether it feels the need to pacify United’s supporters with price cuts and star names, or not. History points to another summer of promises over money available for transfer spend spending; and misleading statements that United is a club built on ‘making stars, not buying them.’ Andy Green, a Manchester United blogger, said: “The Glazer family have spent six years not answering supporters’ questions about the debt burden and have been totally silent about the dividend rights they secured over United’s cash. Given that track record fans are unlikely to be impressed by the hiring of a new spin doctor.”

Fiscal Policy in America

Standard and Poor's recently downgraded its outlook (from stable to negative) on the United State's AAA credit rating for the first time in its history. Historically this means that there is a 1 n 3 chance that the downgrade in outlook will result in an actual downgrade. The position of US Treasury bonds play a crucial role in financial markets, being the predominant risk-free asset out there. The chances are the US debt will not be downgraded, S&P merely wanting to give the US policymakers a kick up the ass (and a nice bit of publicity for themselves).

Fiscal policy is conducted in a different fashion over in the US than it is done over here in Ireland or the UK. Over here, the finance minister prepares the budget within the government ,walks into the Parliament and commits the budget to the house (complete with calls to patriotic action.) The house then votes on it, and normally passes it with the government majority.

Over in the US it is the houses (House of Representatives and the Senate) that have the power over budget matters. It is not the Treasury Secretary that draws up the budget and presents it as a fait acompli, but the President and the houses of Parliament (and the congressmen and senators within them) who come up with the US budget. With a whip system that is more relaxed (Republicans and Democrats sometimes "cross the floor" for votes) and an upper house that is not a rubber stamp for the lower house, haggling over the budget and fiscal policy is a staple of American politics. And I love it. But, obviously, the guys at S&P don't appreciate the drama of all this, instead deciding that the squabbling puts the US's ability to repay its debts into question. Killjoys.

The current fiscal battle in the US has began to hot up in recent weeks with the Republicans' main man in this area, Congressman Paul Ryan, and President Obama both outlining their plan's to solve the US's deficit problems. Congressman Ryan drew the battle lines when he presented his longer term plan to get the deficit under control on April 5th. This forced Obama' hand, which came on April 13th. Both claimed to get serious on the deficit, but by partisanly different ways.

• Ryan's plan would cut the projected deficit by $4.4 trillion. Obama plans to cut the deficit by $4trillion over 12 years.


• Ryan wants to cut taxes, Obama to raise them by $1trillion.


• Ryan would take a scalpel to the health care budget, by making the states pay more in the case of Medicaid (for the poor) and the elderly pay more in the case of Medicare (for the elderly).


• Obama wants to cut military spending, something the Republicans won't countenance.

A standoff has ensued.

This standoff will continue as the date for the approval of an increase to the debt ceiling comes closer. In the 1990s this standoff over raising the debt ceiling (Republicans against and the Democrats for) led to a government shutdown, with non-essential government services suspended as the policymakers fought over the budget and the debt ceiling. President Clinton won and the debt ceiling was raised. Will policymakers let things get that far again?

Dramatic stuff indeed.

Importance of Technology & Science

There are a number of factors have impact on economic growth, such as science & technology improvement, labor, capital, industrial structure, etc. Among of these factors, science & technology improvement is the most important.

Technology & science is the primary productive force, but is not an independent productive factor. It is a kind of potential productivity which promote economic growth through improve efficiency of other productive factors.

Technology cannot eliminate economic fluctuation fundamentally, but it has a buffer effect on economic fluctuation. As the continued improvement of technology, the cycle of economic fluctuation will be increased and volatility will be decreased. The high tech industry has been a leading industry for the US economy. The high tech which is represented by information technology stimulated industries upgrading, meanwhile lead to a high speed of US economic growth, and makes US economy in the leading position of the world economy since 1990s. High tech industry not only has a contribution to the US economic boom, but also has a positive impact on reducing inflation rate and remitting economic recession.

“In one of two science policy columns this month relating to jobs and economic growth, Gordon Reikard explores the connection between investment in technology and economic growth, a topic brought to the forefront by President Obama’s State of the Union address that focused on “winning the future” through investment in research, development, and technology. Reikard explains how research and development once dominated the contributions to technological advance and how information technology has become a greater influence in the last few decades.”
-- Steve Pierson, ASA Director of Science Policy
(ASA: American Standards Association)

"Innovation has become a cornerstone of economic policy in Latin America. It is not surprising that companies, both large and small, are beginning to establish a footprint there or are partnering with local businesses to take advantage of the enormous market potential that is evolving. ."
-- G. Steven Burrill, CEO, Burrill & Company

Technology is the motive power of the improvement and growth for either a country or a company. Generally speaking, there is an interaction between economic growth and technology input. Economic growth goes along with technology improvement, and technology improvement quickens economic growth. Meanwhile, there also is an interaction between economic growth and technology output. On the one hand, the faster the economic growth is, the higher standard technology the economy is asking for. On the other hand, due to the great demand of economic growth, technology will better convert into productive.

http://magazine.amstat.org/blog/2011/03/01/econgrowthmar11/
http://www.marketwire.com/press-release/Life-Sciences-Fueling-Economic-Growth-in-Latin-America-1417123.htm

Piracy on the rise

The issue of piracy is something that cannot be avoided in the modern world. Music, movies, games and much more are being downloaded at a rapid rate globally. Of all the industries suffering from this phenomenon, it appears that the music industry is facing the greatest problem with regards decreasing profit margins.

Several artists in the music industry have come forward asking the public not to download their work. A notable case which became widely publicised is the case of Metallica against the online file sharing company, Napster. Metallica went on to win the case and the court ruled against Napster who agreed as a result to negotiate with Metallica. Napster introduced an upgrade to the system which secretly monitored the users. However this worked against both Metallica and Napster. Downloaders who felt their privacy rights were abused quickly developed methods to evade the Napster controls.

Other artists have come forward with their own views on illegal downloading. Certain artists such as Prince feel that there is little threat from the downloading as "the internet's completely over". He believes it to be a fad and would rather not have his music available online through illegal or legal downloading. He has had a long-standing battle against the internet peaking when he stated that he was suing sites such as Ebay and Youtube in 2007. The most significant development from this is the fact that many music publishers can object to their artists' work being available on Youtube with the audio being removed from many Youtube video clips.

The issue of piracy is highly debated but I would assume that there would be very few people who could honestly say they haven't benefited from illegal downloading. There is no doubt that it is indeed wrong and is a act of theft. However many believe it is not serious to download as the artists are so wealthy already. The issue of piracy is more likely to increase in the coming years and more enforcements will surely be introduced. As the supply of TV shows or music, for example, increase in availability it is likely demand will rise as illegal download becomes easier. The entertainment industry needs to increase the easy availability of its product online at competitive prices should they hope to combat the illegal downloading phenomenon.