Jim Power, well-known economist in Ireland, and Chief Economist with Friends First gave a short and interesting presentation at the Business Owners Network of the Dublin Chamber of Commerce on Friday last, 2nd July.
I’m an admirer of Jim’s down-to-earth, incisive analysis and views.
My understanding of some of the points he made, as relevant to businesses, were (in no particular order):
- Big business interests in Ireland are over-represented and over-catered for at Government level and in general Government policy
- Correspondingly, very little heed is taken of the interests and needs of smaller Irish businesses (SME sector) at Government level
- The SME sector needs to address this and campaign strongly by way of lobbying their political representatives
- The Department of Finance, by its own volition, is generally very resistant to any change or reform of practices. To have one’s voice heard, one has to reach the political masters in Leinster House via local political representatives
- Despite the propaganda, Ireland’s overall Internet infrastructure and readiness is very inadequate to support a Smart Economy strategy
- Irish banks are generally not in a position to adequately lend or provide business finance because they just don’t have the liquidity to do so
- Current austerity measures & broadening the taxation base are probably unavoidable in the interests of getting public finances under some control and moving back from the abyss of run-away government debt. We have some ways to go in this
And of course general comments & opinions very welcome as always.
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Our Government, us, have committed billions of euro to selected banks to save them from the abyss and to bail out the poor unscrupulus developers. The banks were supposed to provide funds to support the SME’s and mortgages for home buyers who were supposed to buy housing units from the remaining poor developers who they originally conned into borrowing beyond their means.
Jim Power is correct, the banks are in ‘collection mode’ and not a ‘lending mode’. There are no funds in the pot for the SME’s to develop and expand so that they can provide more tax revenue for the Government to continue ‘NAMA-ing’ our the banks. There are no funds available for the homebuyers to secure mortgage funding so that they can help the poor developers trade their way out of disaster.
Compounding the developers lot the banks have introduced stricter lending criteria which in effect reduces the amount of mortgaage borrowing available for homebuyers. So house prices must fall further or homebuyers must come up with additional equity. Developers will try to go back to their bank to attempt to renegotiate their loans, banks will go back to Government, Government will again bail them out. An the whole merry -go-round starts again.
Should Jim Power not have been more specific and state that it is the Bankers and developers who hold sway with our Government?
Thank you so much, there aren’t enough posts on this… or at least i cant find them. I am turning into such a blog nut, I just cant get enough and this is such an important topic… i’ll be sure to write something about your site