Monday 20 May 2019

Editorial: 'Learning the lesson from economic past'

'This nation and its people are right to recall the dangers and vagaries of the global economic cycle' Stock photo
'This nation and its people are right to recall the dangers and vagaries of the global economic cycle' Stock photo


There has been much doom-saying over recent months, a sense that we are somehow fated to repeat the mistakes of the relatively recent and raucous past. It is not without reason. This nation and its people are right to recall the dangers and vagaries of the global economic cycle.

We are constantly reminded that we live and work in one of the most open economies in the world. Several months ago, we marked a decade from the great economic crash of 2008 and our ill-fated bank guarantee. Similar anniversaries of events that unleashed the full ravages of the collapse that followed will, presumably, be marked in the similar way in the year ahead and after. We bear much scar tissue and for many the wounds are still fresh, the pain still keenly felt.

We would, however, do well to look to the future as much with optimism as pessimism. It is of concern that many commentators seem to welcome signs of inevitable downturns in the US economy or first signs of Apple warning about a drop in profits with barely concealed glee. We cannot, of course, turn a blind eye to the facts.

The €100m surplus in the State's coffers for 2018, for instance, comes only after close to €2bn more in corporation tax was paid than expected. However, neither should we lose sight of where we really are economically nor where we are right now in terms of foreign direct investment.

Writing on these pages today, economist Dan O'Brien puts a context on the year just gone. "All told, 2018 was the best year for the Irish economy in over a decade. Indeed, one could argue that it was the best year in almost two decades given that the expansion in the 2002-07 period was one fuelled by crazy lending practices, which were not only unsustainable but ultimately ruinous."

He points to increases in employment and wages. He also points to the figures published last week by the IDA, the state body tasked with maintaining and growing foreign direct investment. "Last week the state agency tasked with attracting export-focused foreign firms here for the past 70 years published its first estimate for the numbers at work in the companies it helps. Those figures show that another all-time record was set in 2018. Almost 230,000 go to work each day in foreign multinationals. That amounts to more than one in 10 people employed in the country.

"Following the enactment of a major tax reform package in the US 13 months ago, there were fears that American companies - the backbone of the multinational sector in Ireland - would shift their foreign operations home. So far at least, there are no signs to suggest that is happening."

Today, these pages also carry the story of how a kind gesture of a New Year's Eve gift was rewarded with a heart-warming note of thanks, two simple acts of consideration and kindness on which we would do well to reflect.

For, we do not live in an economy. First and foremost, we are a family. We are a community. We are a society. It is time to remember who we are and where we have come from. We should take strength from the challenges we have overcome, rather than shiver fearfully when we recall them.

Whether our fate is in our own hands is moot. How we deal with the myriad challenges that will come our way remains within our control and will remain so.

Sunday Independent

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