Friday, September 29, 2006

The Irish Economic Miracle
Mike Rappaport

What caused the Irish economic miracle?  Reuven Brenner explains:

Here’s what Ireland did — or had to do — to attract this wave of talent and ambition to its shores.

To begin, the obvious: In 1986, Ireland slashed spending in areas such as health expenditures, education, agricultural spending, roads and housing, and the military, while abolishing agencies such as the National Social Services Board, the Health Education Bureau, and regional development organizations. By 1993, government non-interest spending declined to 41 percent of GNP, down from a high of 55 percent of GNP in 1985. Subsequently, it significantly lowered corporate tax rates to 12.5 percent, at a time when the lowest corporate rates in Europe were 30 percent and U.S. rates stood at 35 percent. Since 2004, Ireland also has offered a 20 percent tax credit on research and development.

But the true miracle came when, due to these policy changes, Ireland attracted capital and pools of ambitious young people from around the globe. By now, Ireland has one of the youngest populations in the Western world.

Between 1995 and 2000, 250,000 people migrated to Ireland (about half of Irish ancestry), which had in 1996 a population of only 3.6 million. Ireland later allowed, along with Britain and Sweden, unrestricted migration to its labor markets from the 10 countries which joined the EU in 2004.  Since then the number of people of Irish origin migrating to Ireland has diminished. However, more than 130,000 Poles now live there and, according to recent reports, 10,000 Eastern Europeans arrive every month, on average. A young Polish immigrant to Ireland was recently quoted saying, “If you have ambition in Poland, you come to Ireland.”

I remember being in Germany in the 1980s, when Irish kids would go there to try to get jobs.  Now the travel goes in the opposite direction.  Every Democrat (and many Republicans including President Bush) should be asked about the Irish miracle and how their own policies compare with these.

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Mike Rappaport


"In 1986, Ireland slashed spending in areas such as health expenditures, education, agricultural spending, roads and housing, and the military, while abolishing agencies such as the National Social Services Board, the Health Education Bureau, and regional development organizations." Golly: I remember someone describing this as O'Thatcherism, but it looks much more sweeping. Although all sorts of bores bang on about Thatcher's "cuts", there were precious few; usually the Thatcher govt cut the rate of growth of expenditures, not expenditure itself. The Irish cuts really were cuts, were they?
(P.S. My mother visited Ireland - land of her father - in the mid-60s. When I quizzed her about it, she sobbed. It really was a dump, then. Good for them for leaving that world behind.)

Posted by: dearieme | Sep 29, 2006 12:40:25 PM

Don't get me wrong, I'm in favor of all the things described, and have no doubt about what they have done for Ireland's economy. But in fairness, I do recall some considerable level of EU subsidies to Ireland during much of this period. Does that bear mentioning?

Posted by: Kenneth Anderson | Sep 30, 2006 5:26:58 PM

1 - Yes, the EU subsidies absolutely bear mentioning (I'm surprised they weren't, for someone who seems to have so much specific knowledge of the Irish policies)

2 - At the same time, it's very easy to waste subsidy money. Subsidies didn't cause the growth, the right-wing policies did. Subsidies made it possible to enact those right-wing, pro-business, pro-innovation policies without sacrificing as much in the process.

Posted by: Daryl Herbert | Oct 1, 2006 5:35:33 PM

It`s not like the U.S. isn`t extremely attractive economically to immigrants either.

Posted by: NBERIO | Oct 1, 2006 5:38:37 PM

“the seething Third World masses are united in one thing: the desire for a green card.” V. S. Naipaul

What color is Ireland's??


Posted by: JorgXMcKie | Oct 1, 2006 6:24:41 PM

The reason Ireland can do this is that it does not have black people.

In America, 51% voted for Bush and 48% for Kerry. But blacks voted 89% for Kerry and only 11% for Bush. Blacks are 11% of voters.

So excluding black people, America voted 56% for Bush and just 44% for Kerry. A solidly conservative country that would easily vote to do the same things Ireland did.

But we can't. We have a minority that has been brainwashed into voting entirely for one party. When a black conservative runs against a white liberal (who smears the black conservative), the white liberal still gets 80% of the black vote! No other race, profession, income bracket, or religious affiliation votes as monolithically for one party as the African American community. They really are obsessed with their own race, and see everything through that lens.

Sorry to be politically incorrect, but the truth is the truth.

Posted by: tood | Oct 1, 2006 8:02:02 PM

tood, you are a dick. I am sorry, but it is the truth. Black people are not responsible for your problems.

Posted by: mike | Oct 1, 2006 9:40:17 PM

Uhh not that i necessarily disagree with you, but problem people will (and should) have are that blacks certainly arent the only possible grouping of people in america that votes overwhelmingly democrat. Union members... lawyers... immigrants...

Posted by: charlie | Oct 1, 2006 9:42:32 PM


Not quite so monolithically. No other group is so heavily tilted towards Democrats.

This doesn't make them 'bad', but if you want to point to one group that prevents right-wing dominance and Ireland-type prosperity, that is the one.

Posted by: tood | Oct 1, 2006 10:04:51 PM


I see you can't debate intelligently. It is not about 'my problems'. It is about what the obstacles are to Ireland-type policies in the US.

Posted by: tood | Oct 1, 2006 10:05:45 PM

Here is an exceptonal on the difference

Posted by: Joe | Oct 1, 2006 10:10:25 PM

"JorgXMcKie....The reason Ireland can do this is that it does not have black people."

Well to add fuel to the NON PC fire here....I think He is right. I have had the good fortune to travel to most of the world in my lifetime....and I dare you (anyone) to name me a nation that is doing well with Black Leadership. And especially Not on a level of living standard as Any of the "first world countries".
Secondly I have lived in several of the US's largest cities..... I have lived in not so good parts of town at times...I have seen the black families start to move into Neighborhoods where previously mostly old folks lived and were not the high dollar homes but decently cared for and kept up. As the neiborhood became more black it devolved into no less than a minor war zone.....with houses in bleak longer kept up by landlords because they were being destroyed by tenants....

So in conclusion it has seemed to me by the art of observation and the coincidence of seeing many parts of the world I have come to the conclusion that where you find a predominately black it a nation or just a few square blocks you will find depressed and unsuccessful surroundings.

Posted by: John Long | Oct 1, 2006 10:10:38 PM

John Long,

This is true. It is not due to race, but rather the culture of black people in Africa going back centuries. They never acquired the tools that make people civilized.

The US and Australia are both prosperous societies, despite being far apart geographically. Why? Because they both are based on Anglo-Saxon Protestant values built over centuries in Britain.

Blacks, even those who have been away from Africa for 300 years, have still not purged the savagery of African culture.

In North America, cities with few blacks, such as Calgary, Edmonton, Boise, Salt Lake City, San Diego, etc. have very few run-down areas. Cities with many blacks, like Detroit, Baltimore, Philadelphia, etc. have large parts of them that are run down.

There is no country in which black people are not the poorest group. This is in far too many countries to blame on US Jim Crow laws.

Posted by: tood | Oct 1, 2006 10:25:33 PM

Its not black people per say, but the black culture in the US. Its the only culture in a first world nation that advocates against education. Black immigrants from Africa and the Caribbean do quite well in the US.

Posted by: james | Oct 2, 2006 7:44:13 AM


Partly true, but those immigrants are a small, self-selected group. The countries they come from in Africa and even the Caribbean are still much poorer than white or Chinese-dominated nations.

There is no country in the world with a majority black population, with more than 5 million people, that has a per capita income more than $20,000 a year.

Posted by: GK | Oct 2, 2006 9:20:31 AM

Wow, I've never seen a non-PC commentary go so long without a mass flame from the left. I agree with the comment regarding black immigrants from other countries. They often do quite well. I know a family from Sudan that came to the U.S. from a refuge camp. All the kids are in school, the older ones in college. Two are studying engineering--while still learning the language!

Posted by: InterestedObserver | Oct 2, 2006 3:20:07 PM

I.e. it's the culture, not the color.

That said, what do we do now? In many ways, black Americans have been enslaved by a culture of entitlement. They have been done a great disservice but there is personal accountability as well.

Posted by: InterestedObserver | Oct 2, 2006 3:24:47 PM

Interestedm Observer,

The only solution now is for the GOP to invest heavily in black Republican candidates and role models (which they are doing), and for the likes of Bill Cosby to create new shows like the Cosby Show that give good examples, in order to offer an alternative to the Gangsta garbage that is currently offered.

Still, it will take decades to make any significant improvements.

Posted by: tood | Oct 2, 2006 5:14:54 PM

To get back to the Ireland economy for a moment, it might be worthwhile to read "The Myth of the Scandinavian Model", by Martin de Vlieghere, published in the Brussels Journal; I for one found it quite enlightening w.r.t. tax policy and Ireland's economy:

Posted by: HenryB | Oct 2, 2006 5:46:09 PM