It was a morning only a taxi driver could love. Yesterday, walking down the Western Road, past the Pres’ Cork lads shuffling towards school, the River Lee was swollen and moving rapidly. It only took seconds for a large fallen branch to be swept along from one bridge to the next, which is hardly surprising after the biblical deluges we’ve been experiencing.
At Washington Street, just ahead of the impressive Cork courthouse, the river splits and you get the feeling of being on an island.
Down at the English Market, just after eight, the various traders are setting up. Fruit and veg floggers are roaring at no one in particular, while the clink of cafe cutlery rattles over the fishmonger’s chatter. We are getting ready for the trading day. The wares are set out, the display cases polished and the nuts and bolts of everyday commerce, the true engine of the economy, are put in place for the day ahead.
From the perfect vantage point of the lovely Farmgate Cafe overlooking the market, we see that the English Market is a great example of local produce being sold by local businesses to local people. This type of commerce is what makes cities; they are living places with bars, cafes, shops and markets, where people mingle with each other, hook up for a natter and a gossip.
This human fact is what makes cities so special and why living cities, where people live and work, are so crucial for society. Cork is a perfect size to be such a living, manageable city.
It is still a bit early on a damp morning. Bar the office workers grabbing the odd takeaway coffee, Patrick’s Street is pretty empty, but even on this dank day, Cork city looks proud and defiant – at least at first glance.
Having many cousins, aunts and uncles in Cork, I was made aware at a very young age just how great Cork was and how lucky I was to be allowed to spend time down there.
When I was a kid, my Cork cousins constantly bragged to this visiting “Jackeen” about having the “longest building” in Ireland, the “tallest building” in Ireland and, most comically, the “straightest road” in Ireland.
But, in fairness, Cork has a lot to be proud of. The city, although sometimes not appreciated, has loads of interesting architecture. The river, island, wonderful hills and bridges all make it a lovely city to walk around.
Interestingly, Cork also has two distinct economies. There is the vibrant economy, the industrial, largely foreign-owned and the local, domestic economy, which is still struggling.
Although many Cork locals will complain about power being centralised in Dublin, Cork and the south-west in general is actually the industrial powerhouse of Ireland.
According to the IDA, it is not Dublin that is the industrial heart of Ireland, but Cork. In 2011, the south-west region accounted for 36.2pc, or €36.7bn, of Irish industrial output. Dublin as a region produced 18.9pc, or €19.2bn, worth of industrial gross output in 2011. Dublin as a region had the lowest proportion of Irish-owned industrial units in 2011 at 14.5pc. The south-west region, with a much, much smaller population, accounted for 15pc of Irish-owned industry.
The Cork region has the highest industrial wages in Ireland. This may come as a surprise to some but average industrial wages in the Cork region are €44,800, while the Dublin region is next highest at €44,700.
Because Cork is the centre of the pharmaceutical industry in Ireland, the clusters of multinationals in this area have driven up industrial wages. This is good for everyone, but a quick glance at the figures shows it’s a much better deal for the shareholders of the companies who get the dividends from the profits than for the workers.
But just look at the bargain the multinationals are getting in Cork. In 2011, Co Cork had the highest value of gross output per person engaged in Ireland at €1.18m. So the multinationals are making on average €1,180,000 per employee and they are paying each employee €44,800. This is a phenomenal deal for multinationals.
Back in the domestic economy, although Cork city looks superficially prosperous, it faces the same challenges that the main streets of all Irish cities and towns face. Rates and the cost of doing business are high and the footfall is falling as the key spending population of late-twenty-somethings has fallen due to emigration.
You can see how this hollowing out of the normal renting population is affecting the Cork economy in other ways. According to daft.ie in 2013 Q4, house prices had fallen by 6.9pc in Cork and 6.1cp in Cork city from the same period in 2012. House prices are down just over 50pc in Cork county and city since the boom. If you look a bit closer, plenty of shopfronts are closed up and overhead much of the upper storeys’ real estate looks empty – 11pc of the commercial retail space in Cork is empty.
Like any retail business, online shopping is eating away at retail Cork. According to the ‘Southern Star’, Cork consumers are spending €350m online ever year on purchases from companies outside Ireland. This figure is only likely to rise in the years ahead.
All the while the local economy, the real human economy that we can see in the English Market, is struggling and is being lumbered with the sort of bills that should be shared between the local businesses and the foreign businesses such as pharmaceuticals. In Cork these companies are making over €1.1m profit per employee.
This time last year, in Cork courthouse, Judge Olann Kelleher had 170 rates cases on his list. He would see more than 200 more in the fortnight before Christmas. Judge Kelleher asked if anyone was looking at the connection between high rates and the closure of shops and offices:
“As I walk down South Mall, half the place is empty, and Oliver Plunkett Street is the same. At what stage do you look at it and say: ‘What are we going to do about the rates?'”
Cork is a microcosm of what is happening in Ireland: multinationals and locals are treated totally differently. If multinationals were asked to pay a bit towards the upkeep of the area in which they are based, rates could be shared and the crippling bill to local business could be reduced.
After all, the multinationals are part of the community. It is in their interests that cities and towns are vibrant places that attract employees. In this way everyone gains. The alternative is for garrison industries, like military garrisons cut off from the community. No one wants that.
DAVID MCWILLIAMS WRITES DAILY ON FINANCIAL MARKETS AT WWW.GLOBALMACRO.COM
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Good morning all hope life is good. Now a little bit of housing keeping as I have received lots of complaints from readers that the discussion is veering off topic a bit too regularly. All messages that do not relate to the articles they are being posted under or fit within the conversation within the comments, will be deleted. The comments section is left open for people to discuss and comment on my articles. Anyone is allowed post a comment but repeated bending of these guidelines will result in the user being deleted from the site.
Ex Employees from Henry Ford Plant in Cork that transferred to the Dagenham Plant were often seen on their visits to Cork pushing prams and were known as the Dagenhams .
Has anyone ever tried to listen to Norweigen speakers talk and be in awe of the similarities of theirs with Cork accents . I believe this began at the time of the Battle of Kinsale .
During the 80’s Cork was in the doldrums and the government appointed a special commission to rescue the abyss it was then in . It has never looked back since .
The ‘Inclusive Contribution ‘ in my words , is what David is proposing into a new Social Costs that must be shared by the financial beneficiaries operating on this pretty Isle .
French Tax is developed on these lines but operated in a Communistic Code that often has and is proven to be too rigid but that does not mean a better system can be produced by our own professionals .
This could form a catalyst to something greater with a bit of give and take .
Thanks for the complimentary description of Cork. It is small, but perfectly formed. However, your geography is a bit off – the courthouse is in the middle of the island, nowhere near where the river splits or rejoins. Regarding multinationals contributing more, I have a story to tell you. A few weeks ago I was in a meeting chaired by the director of global operations of a silicon-valley company with offices in Cork. He/she wrote up a list of every place in the world that the company has offices, and asked the room why they are in each location. When… Read more »
Interesting article David. I am glad to see that you are bringing up the thorny issue of how multi-nationals are not paying their fair share. To boot many multi-nationals poach staff from indigenous Irish businesses (which they can well afford to do since they pay so little tax). This is not good for the economy because many multi-national jobs are not focused on innovation, rather they provide ‘support’ or other lower value dividends to the Irish economy. Despite all the hoopla about Facebook and Google in Ireland they really are just glorified call & sales centres. Irish start-ups are suffering… Read more »
“the clusters of multinationals in this area have driven up industrial wages. This is good for everyone, but a quick glance at the figures shows it’s a much better deal for the shareholders of the companies who get the dividends from the profits than for the workers” This is a critically important observation. For example Barack embarrassment yesterday announced an increase to $10/hr min wage for government employees citing the fact that incomes in real terms For employees were the same as in Ronald regan’s time! What’s important to focus on however in my view isn’t the min wage which… Read more »
The Stolen Village of Baltimore – history records that many productive skilled craftsmen travelled to Co. Cork from Cornwall to escape the wrath of the Monarchy in England and found they could practice their libertine lifestyles with ease in Cork . This influx formed a basis for local skilled labour force that subsequently grew into what is Cork today.
Hi David, A dickie bird told me a story about rates in cork city. Apparently the powered that be assessed the issue Regarding shop closures and rates and instead of deciding to lower them as would be the case in a capitalist run situation to drive sales they elected to keep them the same but create a slush fund from the rated revenue to grant aid new businesses starting in the city. Can you believe it. The best person to decide how capital is placed is the small business person/ entrepreneur. The people in charge Denied this vitally important aspect… Read more »
Interesting article and comments. Every aspect of modern societies is stacked in favor of corporations and is against small start ups. It’s not just the rates and the crazy tax rates it is now the rights they are trying to achieve through the TPP process to actually overrule the authority of sovereign nations if for some reason a global corporation thinks that nation is acting against it’s interests. It doesn’t matter that the nation is acting for the benefit of it’s people this new so called trade treaty will put the welfare of corporations above those of the people. This… Read more »
HSBC imminent collapse?
Can anyone verify the rumours doing the rounds in alternative media that HSBC has capped one-day cash withdrawals at 3k? That the world’s third largest bank has run out of cash?
Great article David. Having lived there for 2 years, while studying I can but agree about what a great place it is.
We talk about a lack of demand in the economy on the side of the consumer and the high rates that retailers (who are also consumers in their personal lives) must pay being just one problem they face in keeping their businesses afloat. What really baffles me though is that for 3 days in July, 240,000 Irish people (temporarily transformed into screaming maniacs) will somehow find nearly €16 million quid (average ticket price €65 multiplied by the capacity of Croke Park (80,000) three times over) to blow on an orgy of overblown nonsense that will be the Garth Brooks concerts.… Read more »
Where is ‘Furrylugs’ …a famous Corkonian ?
“As I walk down South Mall, half the place is empty, and Oliver Plunkett Street is the same. At what stage do you look at it and say: ‘What are we going to do about the rates?’” How much of the operating cost of a building as a percentile are the rate? Who pays the rates? Tenant or landlord? There is no mention of the level of property rental which is set by the market and the landlord/owner. surely a reduction in the rent to the tenant is a greater issue than the rates. I am not familiar with the… Read more »
US, China and EEU all face deflationary forces.
Can anyone say “competitive devaluations” of currency.
The last 12 months has seen the Canadian dollar down against the US by 11%. The Australian by 18% while the euro are up about 1% and the pound 3-4%. Maybe those emmigrants should stay home??
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10605957/World-risks-deflationary-shock-as-BRICS-puncture-credit-bubbles.html
There has been quite a bit of commentary on the “two economies” On the hand full of people who control half the world’s wealth and income. On the rich getting richer and the rest of us poorer. There is a body of thought that the way out of the financial crisis is to offer more credit, to increase the money supply, to bail out the banks etc. No thought of commentary has been offered as to what the basic problem is. Nobody on this blog at least and including our host has examined the money supply, the creation of our… Read more »
There has been quite a bit of commentary on the “two economies” On the hand full of people who control half the world’s wealth and income. On the rich getting richer and the rest of us poorer. There is a body of thought that the way out of the financial crisis is to offer more credit, to increase the money supply, to bail out the banks etc. No thought of commentary has been offered as to what the basic problem is. Nobody on this blog at least and including our host has examined the money supply, the creation of our… Read more »
“Quantitative Easing has been nothing more than a payoff awarded to the One Percent. $85 Billion dollars a month for years paid to the One Percent. This has been the biggest transfer of wealth to the richest Americans in history. That money, however, was not a free gift, for it has been paid for by the middle class and the poor, and it will continue to be paid for by the middle class and the poor.”
http://www.soundmoneycampaign.com/news/feds-growing-bubble
“What we are witnessing is our central bank pulling out all stops on integrity and lawfulness in order to serve a small handful of banks that financial deregulation allowed to become “too big to fail” at the expense of our economy and our currency. When the Fed runs out of gold to borrow, to rehypothecate, and to loot from ETFs, the Fed will have to abandon QE or the US dollar will collapse and with it Washington’s power to exercise hegemony over the world.”
http://www.paulcraigroberts.org/2014/01/17/hows-whys-gold-price-manipulation/
Another way a national bank can be opened and operated is like the bank of North Dakota.
The bank is simply opened ans issues state money.
It does not operate against the other banks but is complementary to them.
It can be the depository for all government receipts and be impervious to a bail in/out or other sanctions.
It acts as a secondary lender for Irish business enterprises that operate domestically,.
The infrastructure is already there in the national post office.
http://ellenbrown.com/2014/01/29/enough-is-enough-banksters-are-not-l-a-s-only-option/
60 % of the staff working in Pay Pal Dundalk are non Irish, why give grants etc to companies that want to recruit fluent Norwegian and Finnish speakers ? The Telesis Report 1981 found few linkages between MNC’S and the domestic economy, higher salaries in MNC’S made working for low wages in domestic companies unaffordable for many .
MNC’S sell little domestically, if the Irish consumer disappeared , they would hardly notice. Do multinationals train stff are or do they just recruit tried and tested experienced staff ?
Atomic Revelation
When the whole Truth about the structural defects and serious leaks in Sellafield are made known then Cork will be the beneficiary and Dublin will be ………ether .
+1
Interesting video regarding “your” money when the bank has it on deposit. Info on the Bank of North Dakota also.
Worth watching and informative for thirteen minutes.
http://youtu.be/jPsOopzp7e4
thanks Mike
Interesting post
http://www.youtube.com/watch?v=tJH2CcpXztE
IF THIS DOESNT MAKE YOU LAUGH NOTHING WILL, AND ITS ON SUBJECT!!!!!!!
Seems like there is a bit of over if not hyper inflation creeping in yet again. But it could never happen here could it??
http://www.zerohedge.com/news/2014-01-31/not-so-subtle-hint-argentina-may-be-un-fixed
How can there be an economic renaissance in Cork when the rest of the world is heading to the greatest depression. Misallocation of resources is rampant with the banks dictating and controlling economic activity. There is no such thing as a free market and the banksters are in full control. If the people do not wake up quickly a new form of feudalism will be upon them and the lord of the manor will be the bankster. ——————————————————————– Dave from Denver… UNREAL! The SPX goes from down 17 to down 3 and gold/silver get trashed badly – all on horrible… Read more »
“I think as long as we leave politicians and more so ‘unanswerable’ higher civil servants out of the equation the better”
+1
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Stop Right There In the article written by David on 9th December , 2013 I entered the following : ‘There is no time to celebrate now instead it is a lost time to prepare for what is now ahead . Full Moon is on Monday 16th December and the fiery climate and unease will escalate to peak then just as we exit that day from the Bail-Out . This uneasy energy will not be dismissed because later in January 23rd will be a Peak Day for the next Moon Wobble ( the last wobble occurred in Philippines ) .All this… Read more »
Hello..any craic ? Whats happening ? Cork is mighty All this economic stuff is just funny now..don’t know why..cant help smiling at the moment..all ridiculous. I mean.. what does it really matter ? Dave wants to censor the blog..Great ..So ? doesn’t matter its all a bit of craic. We will still have good days & bad days..life will go on ..even if you have a bar-code on your arm. Some great People on here I have had the pleasure of meeting,Grey fox,Dorothy , Adam,Tony, Philip..great reading some posts..some funny some sad…some “out there” but sure ….what harm ? John… Read more »
hi
“trying to set up a business working out of Europe..fingers crossed.”
give us your email have some good pointers re your initative.
Michael.
@Tony Brogan & Dorethy Maybe the best way to explain how the recent natural disturbances arrived to our shores can be explained as follows in simple english : December 2013 A Week B4 the full moon is the normal monthly gravity pull and by the time of the full moon around the 17th Dec the moon should ‘wane’ for two weeks .This happened . However in January 2014 a Moon Wobble was already predicted for peaking on the 23rd January and a full moon on the 16 th January 2014 . What happened was when the Full Moon peaked on… Read more »
Moon Dust has a greater value than Gold . Maybe its thoughts are worth knowing and might get you there .
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