Our boomtime ideology is alive and kicking – and our refusal to look to developing countries to build our economy again will be the death of us.
Can Irish football tell us anything about the state of the country, and just how far we have to travel to compete at the highest level? People might say losing 1-0 to Argentina is a respectable performance – and, in a sense, it is. But let us look at something different. Let us kick off with how much we pay the manager of our national football team.
Did you know that Giovanni Trapattoni’s salary is nearly three times greater than Diego Maradona’s was, when he was Argentina’s boss? Or that he is paid €600,000 more than Vicente Del Bosque – the Spanish manager who won the World Cup? He is paid more than the coaches of Germany, Italy and the Netherlands.
In fact, Trapattoni – whose team failed to qualify – is the second-highest paid national football manager in the world. If anything underscores the ludicrous gap between international reality and Irish aspirations, it is this.
Why do we feel the need to go down this road? Why, rather than saying we should pay for success, do we still believe that we are rich enough to fork out so much on a manager who is clearly in the twilight of a glittering career? Trapattoni naturally negotiated the best deal for himself, but when you match the quality of the team’s performances and our inability to qualify for the World Cup with his salary, we should ask some questions.
Quite apart from reinforcing the idea that the Irish are prepared to pay over the odds for anything even as the economy sinks, football tells us a bit about how the global economy works and, like so many things these days, all roads lead to China.
Last year, after a particularly miserable Trapattoni affair against Cyprus in Croke Park, I set myself the target of finding the factory that makes the thousands of Irish shirts that clothe the Green Army. I wanted to join the dots of the global economy, and see for myself how a goal in the last minute can have a profound effect on the employment prospects of millions of poor workers in China.
After many calls and false leads from retailers to wholesalers to dye factories and middlemen, I finally reached my nirvana in May last year. Away in a back street called Station Road, in the small Chinese town of Bilung – the knickers and bras capital of the world, where expensive La Perla, Myla and Agent Provocateur lingerie is churned out – lies the factory that makes our shiny, acrylic kit. The workers get €9 a day and the shirts leave this place costing less than €1 each.
The fact that they retail for about €50 at Dublin Airport means that someone along the way is doing very well. On either side of the street are dormitories that house workers. They get bed and board and spend all day in the local internet cafe¤ , which doubles as a snooker hall, a betting shop and a down-at-heel nail bar.
All the workers are from the same village in the interior of China. They appeared happy enough with their lot. They knew Robbie Keane from Roy Keane and Man United from Tottenham Hotspur. They didn’t, however, have a clue where Ireland was.
Like many cities in China, everything happens out on the street. All human life was there, eating, arguing, living and, above all, filling the air with that most Chinese of cacophonies, the great throat-clearing and public gobbing soundtrack.
Quite apart from the typical Chinese street scene,the other thing that caught my attention was that the sewing machines running up the Irish football shirts were made by a German company called Pfaff.
In fact, sewing machine enthusiasts would know that Pfaff is a German company from Kaiserslautern, and is over 140 years old. Having survived unification under Bismarck, two world wars, reparations and reunification under Helmut Kohl, this company – like so much of Germany’s industry – is thriving in China.
This is where the difference between Ireland and Germany is so stark. Ireland imports wildly over-expensive soccer jerseys from China and pays its football coach the second-highest managerial salary in the world for a team that can’t win. We pay for all this with money borrowed from Germany. Germany, on the other hand, supplies China with the means to rip off Ireland. That’s the difference: Germany’s industry is deeply embedded in China so that, when China makes money, Germany does too.
Germany has embraced the new growth economies of the world. It is Europe’s fastest-growing country; in contrast to Ireland, Germany’s unemployment rate has fallen in every one of the past 13 months. Three-quarters of the growth rate comes from exports – and half of those exports are going to China, India and other big, emerging countries like Brazil.
Nearly 75 per cent of all German machinery production goes abroad; China is now a bigger market for German companies than the US.
All this reveals a country with an industrial strategy based on not being left behind. The Germans have invested enormously in the emerging world and, as the west stagnates, Germany has backed China. In a sense, Germany is benefiting more from China’s export growth than China is itself.
In China, the emerging problems of rapid industrialisation are everywhere. There has been huge migration from the countryside to the cities; the cities themselves, like Bilung, are pretty filthy places; and property prices are beginning to wobble, which could have a huge negative impact on the Chinese middle class. The Bank of China ordered its banks last week to stress-test their property loans for a 60 per cent fall in the market. Now that’s what I call a stress-test.
What our few observations about football and economics tell us is that, in Ireland, we still know the price of everything and the value of nothing, while the Germans have figured out the way the world is changing far faster than anyone else. By the way, Trapattoni earns €650,000 more than Joachim Low, the German manager whose team came third in the World Cup. The Germans, with a population of close to 82 million, could probably afford to pay him more, but know that to do so would be a waste of money.
What a fantastic article – An excellent analysis of the gulf between our hillbilly simpletons and the Germans.
The Germans are like good snooker players, always thinking three or four balls ahead….
We’re the spectators, pissed in the bar…. hoping for a return on the wager placed on them earlier.
Paying an international manager for illusive success is one thing, paying a Taoiseach for abject failure or worse something else…… Also just on the Aviva stadium, the Irish citizen paid €200 million of the €410 million price tag but people complained about ‘rip off prices’, does the citizen enjoy half the financial benefit of the stadium? Get any return on the investment? Look at the Shell deal? What is the split there on a potential gas/oil find off the West coast between the company and the people as represented by the government? The following was outlined in the Irish Examiner… Read more »
Green Backs – We need to change the colour of our flag to a strong determined and focused blend just like other European countries. The colour Geen now evokes jungle politics with monkies and bananas and some apes in the middle .
Green is now nostalgic for the wider diaspora and can be used as a parallel identity but it will never evoke the ‘winning touch’ or the ‘the conqueror’ in any national strategy we aspire to do.Just look at Munster Rugby now look at Leinster Rugby .For them Green is something you run over.
Did you know that there were/are about 120 Indian business leaders in Dublin this week end, attending a seminar ast the Burlo. Here’s who they are: http://bit.ly/dwLGyl It’s funny that David Cameron, George Osborne & Vince Cable thought it worthwhile going an a trade mission to India recently. I can understand Brian Cowen, Batt O’Keefe etc feeling a bit put out by the thought of having to trek around a hot country looking for business on behalf of Ireland Inc., but y’know, when 100 top execs happen to be in town, would it not be too much trouble to show… Read more »
Delaney earns 420k for his FAI gig!.Trapp won’t even attend games in England.If you play for Cork City, you cannot expect a Chelsea wage.We should peg our prices and salaries to Israel and New Zealand.Applies to all grades of employment.
David, you could also have pointed out that the CEO of the FAI, John Delaney, is earning €420,000 per annum, which is more than the annual salary of the CEOs of the GAA and the IRFU combined. No doubt it is a helluva lot more than the CEOs of the major football federations across Europe, Germany included. However, you do omit one glaring factor in Trap’s massive wages, namely, the contribution made by our “buccaneering” businessman Denis O Brien, infamous winner of the second mobile phone State licence turned instant tax exile, owner of half the nation’s media at this… Read more »
John Drennan in the Independent has written a related article
http://www.independent.ie/opinion/columnists/john-drennan/john-drennan-imf-would-be-shocked-if-it-ran-the-rule-over-us-2297944.html
All this is good and well but there is only 1 Trappatoni, 1 Brian Cowen, 1 John Delaney etc. etc. etc.
There are, however, over 300,000 people working for the state who collectively earn a bloody fortune well beyond the average industrial wage (never mind the perks). I’d be more concerned with a dash of reality there (because that is where my tax money goes) than anywhere else.
http://www.statusireland.com/statistics/finance/19/Ireland-Public-Sector-Average-Weekly-Earnings.html
Great article. Yep, its not just a matter of pay, its a question of what value for money we are getting back. There’s certainly one big inverse relationship between pay and value for money across the board in Ireland Inc at the moment e.g bankers, politicos, including Dennis O Brien/Bono tax exilers and what these guys earn, to name a few. Its corrosive and destructive of any sense of forbearance on pay throughout the whole of Ireland Inc society at the moment. OT on another note, why not pay people in Scillings instead of euros. To begin with, one Scilling… Read more »
Wasn’t one of David’s books ‘follow the money’……does the journey lead back to Anglo and the other big institutions, somehow I suspect so, ‘cosy capitalism’ at its worst as the Financial Times characterised it when boom turned to bust. No disputing that.
Lack of reaction for general pop. is astonishing.
http://bit.ly/bqCoIC I have to say I’ve been a little sceptical of the triumphant results on export led growth from Germany. There appears to be a lot of posturing going on. The following makes me even more sceptical “The tests — designed to restore nervous markets’ faith in European banks, shaken by the near-default of Greece this year — were supposed to be accompanied by full disclosure of each bank’s sovereign debt holdings. But six of the 14 German banks tested — Deutsche Bank, Postbank, Hypo Real Estate, mutual groups DZ and WGZ, and Landesbank Berlin — did not publish the… Read more »
The article highlights a side of the German exporting success that gets rarely mentioned. When most people think of German exports they think of consumer brand names like cars and household gadgets, but not the machine tools and other equipment that are used to produce Chinese exports. So it’s so much the case that “Germany has backed China” as David says, it’s more that China has backed Germany by choosing its products over those from other countries. It’s true that some German companies are investing there, for example car makers building factories, but more often it’s the Chinese who are… Read more »
Excellent article. Top drawer. Bullseye.
A real pin point drive at the stupidity inherent in how we are organized for the age we live in. Our biggest problem is the fact that so much is organized in Ireland to feed and sustain delusions.
Paying too much for wasters is an inherent part of the Irish concept of management. And it needs to be completely poleaxed until we reach the point that we have competent people in positions of responsibility, or else we are replacing them.
OT, here’s a good article about the travails (mais pas de ‘travail’) of the US middle class from yesterday’s Observer:
http://www.guardian.co.uk/world/2010/aug/15/jobless-millions-death-american-dream
You get 99 weeks of benefits apparently and then you’re on your own and there are waiting lists at the shelters. The feckless so and sos.
Hudson contends that house prices rise to whatever the banks will lend. A long time ago I mentioned here that I, and presumably others, have an internalized idea of the value of things, including houses, based on the value of related and other commodities and services. So even if you can easily afford to pay say x plus 20% for something you will simply refuse. In his Gen. Game, I think, David referred to a new law of ecnomics which his researches indicated had been discovered by the Irish, namely that as prices go up so does demand. (And see… Read more »
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The story above is a story of a society with delusions of self-importance, where delusions fuel all sorts of mis-allocation of resources. And on the back of this many make a profit. Making a profit fuelling the illusion, and pocketting the change. And it becomes an article of faith in the believers. And one is not allowed question the inherent stupidity that is the reality of what is happening. Until it all falls apart. In the middle of this is a chase for something for nothing. Pride for pride’s sake. Pride as the supreme virtue of the society. It is… Read more »
With regard to overpaid FAI bosses, and national team managers – plus over paid HSE bosses, overpaid ESB bosses, overpaid AIB/BoI bosses, overpaid IBEC clique lobbyists, etc.. etc… Here is an interesting peice from the US. http://www.marketwatch.com/story/cut-everyones-pay-10-to-create-jobs-2010-08-16 Currently it is clear that the Irish Labour Market is not functioning properly. In fact this has been the case for several years. And much of the distortion has come as a result of the ECB low interest rates. Maybe something like this is the answer. I think that the start of this should be in the state sector, at the top layers.… Read more »
Unlike Birmingham for instance, Ireland never developed a cohesive workshop mentality, whereby a whole range of small-scale industrial skills developed in sheds in back yards. In modern Ireland the nearest approach is on working farms. In a generation, farmers have progressed form the little grey Ferguies through 4WD tractors to monster diggers. Needing to keep the full range of machinery in working order, they have had to learn a lot of mechanical, electrical and welding skills. They are often inventive and modify bought machines to suit their needs. Most of the agricultural machinery in the third world is fairly primitive.… Read more »
As a labour market we are under utilised and over paid. I suppose that’s really what the competition question is all about. We simply do not get it. Question: How do we match the right skills to the right tasks that need to be done in Ireland that would make us competitive. Answer? We cannot because we simply do not possess the skill mix to generate/ create the value to earn sufficient that would allow us to pay for the services we currently have. We possess a service / rent seeking structure which is out of proportion with our ability… Read more »
We should be the Island of Robots and Windmills.
agree 100% with you there Philip with our coastline we should be the market leader in alternative energy sources, On another note totally unrelated, why is it we need a seanad? why is it we need local government? surely elected TDs should surfice, seems since we are on the topic of money wasting i thought this would be a good topic. We have the population of a small city 4 million or so, it baffles me as to why we need these unnecessary departments, and can someone tell me why there is no redundancys being made in the planning departments… Read more »
Concerning the Metro North link, here is a critique by Kevin Myers. http://www.independent.ie/opinion/columnists/kevin-myers/kevin-myers-airport-metro-will-be-a-fitting-monument-indeed-to-this-reviled-governing-cabal-2299863.html Strangely, enough the critique completely forgot about the ridiculous stops to two rural hamlets (are they even villages) north of Swords which ramp up the bill by nearly 20%. Once again we are overpaying in an area where it might not be necessary, and where the dynamic is down not up. One of the key influencing factors concerning the economics of the Airport link is the volume of traffic through Dublin Airport. Because of the quango running Dublin Airport (all political cronies) the cost of Dublin Airport… Read more »
Those of you wondering if there will be an election have been thrown a lifeline, by Dublin City Council. This is as a result of Dublin City council’s decision to issue a compulsory purchase order for the site of the Ringesnd incinerator. Gormless will now be putting massive pressure on Cowen to countermand the City Council. The City Council is dominated by ILP and FG. Therefore they will be in no rush to make things easy for Gormless and Cowen. They have the power to create a festering wound and to also make FF look like as if FF are… Read more »
Unusual request. It is good to some people are becomming practical about the “First Bank of Imperialist Irish misadventures”.
http://www.independent.ie/opinion/letters/anglo-irish-bank-shares-wanted-2299996.html
I suppose it will be hard to find anybody who is prepared to own up to having purchased AnIB shares.
There are remarkable similarities along the lines of obsession with reputation between the national soccer team, and the banking sector. We are stuffed full of our own self-importance, and significance. And we do anything to make our own myths look real. The Germans only seem interested in rudimentary, practical matters. And the Chinese seem only interested in making money, saving money and investing money. It seems that a lot of sophisticated Irish are too keen to poo-hoo such basic and hard-reality style thinking. The binge economics model has a pscycholigical basis which is still fairly intact. In other words, despite… Read more »
Our nation is full of the colour Green .We live on the earth to take from the earth and what we take we give away for nothing when we should be making a profit to keep for ourselves.And we don’t seem to care.We hold the minds of peasants and learn to share that pain in each generation.We dwell on the pain to create tolerance and to put back into the earth again.We die as peasants .We are very Green . We don’t look around us to find a rainbow of many colours or to chose a strong colour that will… Read more »
We are The Tribes of the Sea.
This 1st v third world construct is archaic, there are so called third world encnomy conditions in parts of so called ‘1st world’ countries now!
http://www.gapminder.org/videos/ted-talks/hans-rosling-ted-2006-debunking-myths-about-the-third-world/
http://www.gapminder.org/videos/yes-they-can/
Ireland get real, (sponsored by “be with AIB”, cause is leatsa e!!!
Its nice to see the “carry trade” in Irish Government bonds is alive and well and was boosted by the launch of 1.5 billion more today. Anthony Linehan say’s the appetite for Irish bonds is still strong, and why the hell would’nt it be Antonio when they are paying 5.4% in an Economy suffering from deflation. I mean Antonious 5.4% plus deflation rate gives a “real interest” rate of what exactly. Anthony by the by started his career in the Dept. of Finance before joining the private sector to “sow his wild oats” so to speak before returning to plant… Read more »
Costly wearing The Green:
I agree .Had Trappatoni became food poisoned in Ireland and not Italy ,mama mia we then would be in an Irish Stew.
There are forty shades of Green in Ireland and only one in Italy.Should we eat our Pastas green now?
“our refusal to look to developing countries to build our economy again will be the death of us”
A sick person can receive medical treatment. This treatment may or may not be helpful for survival but now it turns out that this is the 3rd leading cause of death among Americans. So called Iatrogenic illness
Our economic and/or financial system is also sick and it is certainly becoming to be a Iatrogenic illness. Is our government capable or entitled to give medical treatment to our sick economy?
China has now overtaken Japan as the world’s second largest economy. How long will it take or them to become Number One?
Maybe we’d all better learn how to Hawk and Spit as Mandarin seems quite a difficult language.
“So Neo, which do you chose……..the red pill will show you reality outside the Matrix…. or the green pill……”.
I’d urge anyone interested in the wider economic debate to read Michael Hudson economist; his thesis is that we are seeing the rolling back of 250 years of post enlightenment proletarian progress, with a new financial rentier class exploiting the rest thru debt paeonage.
Is it so hard to step back and rationally assess the value of things? It would appear so in Ireland! Our politicians are only the most blatant example of the overpaid and underperforming.
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