Tax iVoidance

Said Cook, to the Senate's seniority:

"Though gadgets remain our priority,

While profiting scads

From iPhones and -Pads,  

We skirt every taxing authority."

The Oracle of Limerick

Said the Irish economist, Kinsella:
"Our economy isn't quite insular;
We may seem like a rock
'Til we're hit by a shock
From Madrid or the Roman peninsula."

This weekend marked Limerick Day, otherwise known as the birthday of Edward Lear, who first popularized the limerick. On that day, the thoughts of an economic limericker naturally turn to Limerick's economist Stephen Kinsella. Professor Kinsella of the University of Limerick recently wrote a blog post asking "What Is The Important Thing No-One Is Saying?" His answer:

Irish people, I think, see that we really aren't the masters of our own destiny: that events in another country anther state could spell the end for us regardless of the choices we make. Were Spain or Italy to default, if the bond markets do not recover sufficiently from their current turmoil, and if the European authorities do not recognize the need for growth in the periphery to offset unsustainable increases in private debt that have been made public, we are sunk.

We can only hope that our next Limerick Day will find less anxious times for the citizens of Limerick.

@StephenKinsella Recites Dr. Goose

[Audio] Stephen Kinsella, Lecturer in Economics at the University of Limerick, recites Dr. Goose's two-verse poem entitled "Dublin vs. Limerick Economist," proving that economists are good sports.  The verses are based on Dr. Kinsella's debate with Morgan Kelly of University College Dublin over the best way out of Ireland's financial crisis.




For background:

• here is Dr. Kelly's polemic in the Irish Times that started it all; 
• here are parts one and two of Dr. Kinsella's response.

The Toast of Ireland

For Guinness, a source of great profit
Are the crowds on St. Paddy's that quaff it,
But at home it appears
That alien beers   
Have weaned many Dubliners off it.     

So the stout-brewer's future is really   
In overseas markets ideally,   
As they're growing the most   
Where the typical toast   
Is in Haussa, Chinese or Swahili.    

Guinness stout, the iconic "official drink of St. Patrick's Day", was once the beer of choice for two out of three Irish pub-goers.  However, a 2006 study by Ireland's Competition Authority found that foreign lagers such as Budweiser and Heineken had become "more fashionable" and taken 63% of Ireland's beer market, compared with just 32% for stout.  As the luck of the Irish would have it, however, emerging markets in Asia and Africa continue to provide a boost to global sales.    

* Let us not forget, as we toast a serpent-free Ireland, the example of Guinness' parent company Diageo plc, which supports the Red Cross, and with it, the people of another afflicted island nation. *

Erin Go Broke?

Said Noonan: "We'd like to inject less
In these albatross banks on our necklace,
For we've already blown
So much cash of our own
To atone for when lenders were reckless."  

Irish Finance Minister Michael Noonan would like the EU and the European Central Bank to agree on a longer timetable for the deleveraging of its banking sector. After the banking collapse brought on by overly aggressive property lending, the Irish government has injected €46 billion, or 29% of GDP, into the country's banks, and could evidently use a breather.

Dublin Down on Taxes

Said the Irish Prime Minister Kenny:
"I'd be glad of a bailout, if any."
"'Til you tax as we do,"
Replied the EU,
"For you we'll accrue not a penny."    

Irish eyes will be smilin' this St. Patrick's Day, if Dublin can secure an EU financing package to cover its deficits.  However, the 12.5% Irish corporate tax rate, an irritant to the other EU member states, has disrupted the negotiations.  France and Germany particularly would prefer that newly elected Prime Minister Enda Kenny move to end the tax disparity, which would  reduce the fiscal deficit as well as the perceived unfair competition for corporate locations.  For this latter reason of course, Ireland is most reluctant to comply.

At the Irish Bailout Talks

Said Frau Merkel, "Now that we've shown 'em
All the euros we're willing to loan 'em,
Will all the E.U.
Come to do as we do,
Or 'e pluribus confusionem'?"


The European Union agreed on an $89 billion financial rescue package for Ireland, but the markets have not been calmed, fearing that questions of fiscal uniformity and further defaults in the Union have been left unanswered.

Luck of the Irish

Said Ireland's Prime Minister Cowen:
"How our fortunes have all turned aroun';
We looked to the Yanks
On our way up the ranks,
And to Germany on the way down."    

Ireland was forced to accept a joint bailout from the European Union (led by Germany) and the IMF, after losses by its banks threatened to bankrupt the state.  The Irish banking crisis followed years of extraordinary growth fueled by low corporate taxes and American-style easy credit.