Mack – Page 2 – Slugger O'Toole

Job Creation : The Irish Innovation Fund

Mack on July 13, 2010, 11:03 am

| Readers 9

Yesterday Brian Cowen launched the Innovation Fund, a €500 million startup investment fund, which will be seeded by the state and US venture capitalists (50/50 split). While the academic response was somewhat muted – Karl Whelan on Irish Economy was underwhelmed by the size of the fund. Entreprenuer, and founder of Iona Technologies, Chris Horn was very impressed. Seeing this as important as the seismic shift in the 1950’s when Ireland opened up to FDI – I have been slightly …

Job Creation : The importance of startups

Mack on July 12, 2010, 12:11 pm

| Readers 7

Interesting report from the Kauffman Foundation on job creation by startups in the USA and it’s importance. The oft-quoted American sports slogan, “Winning isn’t everything. It’s the only thing!” could well be attributed to the economic importance of firm formation in creating jobs. A relatively new dataset from the U.S. government called Business Dynamics Statistics (BDS) confirms that startups aren’t everything when it comes to job growth. They’re the only thing. Policy makers take note – Job growth is driven, …

Free trade: Does protectionism protect or destroy jobs?

Mack on July 10, 2010, 11:20 pm

| Readers 197

Neither, according to Paul Krugman. Protectionism causes a misallocation of internal resources, i.e. an economy wastes resources on producing products and services it would be more efficient to import. Any doubts as to where he stands on protectionism v free trade should be readily cleared up by this quote Just to be clear, I don’t think the Smoot-Hawley tariff was a good thing — it was a really bad thing. Nasty protectionism! Bad Smoot-Hawley! Bad! Bad! Bad! Krugman on what …

On the necessity of a land tax

Mack on July 9, 2010, 5:39 pm

| Readers 6

Constantin Gurdgiev gave a good overview of why a land tax is essential if Ireland is to build a smart / knowledge economy a few months back on the Renegade Economist. It’s probably worth reviewing his arguments today, the day Fianna Fail ruled out a (admittedly unfair) flat rate property tax. Gurdgiev blames the disparity in taxation between investments in human capital (e.g. increased education) – typically each additional Euro earned is taxed at 53% – and investments in land, …

Euro Crisis : Soros on the Euro’s deficiencies and what needs to be done

Mack on July 9, 2010, 9:00 am

| Readers 4

Excellent George Soros essay on NyBooks – The Crisis & the Euro. In it he forensically examines the structural issues with the single currency, points out Germany’s critical role within the project and how they have been making bad policy decisions, and how this threatens political and social stability within the union. All is not lost, as he outlines three steps that need to be taken (cleansing the banks, huge monetary stimulus to offset fiscal tightening, European infrastructure investment funded …

Time to scrap the lower marginal rate?

Mack on July 8, 2010, 5:06 pm

| Readers 4

Michael Taft has a blog post promoting a proposal from Social Justice Ireland for refundable tax credits. The idea being that if your tax bill was lower than your personal credit allowance you would recieve a cheque for the difference. While this proposal comes from a left-wing source, it is similar to an idea for a Negative Income Tax proposed by Milton Friedman. Which got me thinking. Given that, at least in the USA, wage increases increasingly go to the …

Euro Crisis: Greece restructuring it’s debts

Mack on July 8, 2010, 11:28 am

| Readers 2

Fancy word for default. Spotted by John Dizard in the FT, and neatly summarised by Yves Smith on Naked Capitalism below. Greece is imposing (at least) a 19% haircut on holders of state hospital bonds. This hasn’t yet gotten the attention it merits because it’s bonds issued by particular government bodies (in this case, the Greek state hospital system) and the investors aren’t big Eurobanks but suppliers. Old outstanding coupon bonds are being replaced with zero coupon bonds. The relevant …

Greek budget deficit halves in 2010

Mack on July 7, 2010, 12:00 pm

| Readers 3

Almost. The Budget Deficit fell for the first six months of this year, and is running at €11,450 million. This is almost half the €19,685 million deficit for the equivalent period last year. Finfacts report that the economy is expected to (only) contract 4% this year (despite massive austerity measures). Finance Minister George Papaconstantinou said the country had “met its goal” for the first six months of 2010 after the 41.8% dip in the budget deficit – – to 4.9% …

On neoliberal Scandinavia

Mack on July 6, 2010, 2:00 pm

| Readers 72

Tim Worstall They are classically liberal economies with lots of redistribution on top. So, if we want to be more like them we’ve got to be a classically liberal economy with lots of redistribution on top. We need the classically liberal economy in order to generate the moolah to be redistributed. Scott Summers The neoliberal revolution combines the free markets of classical liberalism with the income transfers of modern liberalism. Although this somewhat oversimplifies a complex reality, it broadly describes …

Job Creation : The Art of The Start

Mack on July 6, 2010, 10:35 am

| Readers 20

Before new businesses can scale to create lots of jobs, entreprenuers must take on the risk of founding a startup. Most will fail. Guy Kawasaki’s classic Art of The Start video gives a decent overview of what he thinks is required from technology start up founders from the perspective of a venture capital investor. In four parts below (You Tube) or watch it all in one go one Google Video. MackNo bio, some books worth reading – The Rational Optimist: …

Job creation: What Andy Grove giveth, Deng Xiaoping taketh away

Mack on July 2, 2010, 3:01 pm

| Readers 5

Excellent article (“How to Make an American Job Before It’s Too Late”) on job creation by ex-Intel CEO Andy Grove on Bloomberg. He highlights how the US tech industry has been cannibalising itself, potentially cutting America off from future streams of innovation by the pursuit of higher profit margins now. While Silicon Valley remains a hub of innovation, the jobs that spring from that innovation increasingly go to Asia and not to the USA. The story comes to mind of …

Battleground Ireland : The proxy war

Mack on June 29, 2010, 10:57 am

| Readers 34

US neo-Keynesians and the ‘Austerians‘ are slugging it out over the Irish approach to managing the crisis. At stake, the future of US and perhaps global economic policy. First up the Keynesian New York Times :- In Ireland, a Picture of the High Cost of Austerity Rather than being rewarded for its actions, though, Ireland is being penalized. Its downturn has certainly been sharper than if the government had spent more to keep people working. Lacking stimulus money, the Irish …

Did capitalism end slavery?

Mack on June 25, 2010, 11:04 am

| Readers 2216

Don Boudreaux thinks so – The fact is that slavery disappeared only as industrial capitalism emerged. And it disappeared first where industrial capitalism appeared first: Great Britain. This was no coincidence. Slavery was destroyed by capitalism. To begin with, the ethical and political principles that support capitalism are inconsistent with slavery. As we Americans discovered, a belief in the universal dignity of human beings, their equality before the law, and their right to govern their own lives cannot long coexist …

The economics of Libertarianism

Mack on June 22, 2010, 1:53 pm

| Readers 18

Interesting book review of Jeffrey Miron’s “Libertarianism, From A-Z” at the New York times. Like most -isms Libertarianism would appear to mean different things to different people. Although, perhaps not quite to the same extent as within Socialism – see Chomsky’s attack on Lennism / Trotskyism & the USSR and contrast that with the varying degrees of state management and redistributionism that pass for socialism as advocated by political parties throughout Europe. Perhaps surprisingly, in his book, Miron argues that …

Let ten thousand jobs bloom?

Mack on June 22, 2010, 10:03 am

| Readers 3

Brian Cowen confirmed this morning the government are aggressively pursuing a Chinese investment project that could bring up to 10,000 jobs to the midlands. Very early stage process by the sounds of things, and I’m sure we’ll face stiff competition, but here’s hoping. From RTE – Taoiseach Brian Cowen has confirmed today that he has held talks with potential investors and promoters behind a multi-million euro international project aimed at attracting major Chinese investment to the midlands. The project Mr …

Financial reform fails

Mack on June 21, 2010, 2:02 pm

| Readers 1

Simon Johnson pronounces the Financial Reform Bill ineffective as essentially nothing in the entire legislation will reduce the potential for massive system risk as we head into the next credit cycle As you were then. Business as usual for the bailed-out-too-big-to-fail-banks. Moral hazard and socialism for the rich, our well established, guiding principles. Ah well, maybe next time, when the big one bites, and sends us back to the dark ages, maybe then, we can start over from scratch. The …

Euro Crisis : Germany and Spain at war!

Mack on June 19, 2010, 2:53 pm

| Readers 5

Be afraid, very afraid. Zero Hedge on those German leaks to force greater Spanish austerity, and the Spanish retailation to force the publication of Euro banks stress testing. One of the more ominous news of the day came from Reuters, which reported that the previously disclosed rumor that Spain was seeking a €250 billion bail out package, had in fact originated from high-placed German officials. The move, which will could easily set off an intraeuropean cold war, was prompted by …

The Road To Sweden?

Mack on June 18, 2010, 4:15 pm

| Readers 53

Does the Scandinavian economic model disprove Hayek‘s assertion that planned economies lead to totalitarianism? Don Boudreax argues that far from being centrally planned the Swedish system is compatible with Hayek’s vision for a liberal economy and society. Hayek said that “the planning against which all our criticism is directed is solely the planning against competition – the planning which is to be substituted for competition.” So because Scandinavian countries emphatically do not plan in this way, Samuelson was mistaken to …

Ireland and Austerity : Is Paul Krugman wrong?

Mack on June 16, 2010, 10:06 pm

| Readers 43

In a recent article in the New York Times Paul Krugman took the US deficit hawks to task, he argues that Ireland’s approach to austerity has not been rewarded by the markets. Consider, if you will, the comparative cases of Ireland and Spain. Both countries appeared, on the surface, to be fiscally responsible until the crisis hit, with balanced budgets and relatively low debt. Both discovered that this was an illusion: revenues were buoyed by immense real estate bubbles, and …