Raise the Hammer

Ryan, >> That cheap corporate tax rate comes coupled with an industrial strategy featuring tax incentives for research and development, subsidies and grants for companies that locate high value employment in export-related industries, special financial regulations and so on.

All of this sounds good to me.

>> Also, Ireland has universal comprehensive public education (one of the best systems in Europe), free university (with very high enrollment), and public health care.

Okay, good points. However, Ireland also allows people to purchase private medical care outside of the public service. I don't have a problem with delivering care for those who can't pay, but I don't like the idea of making everyone use the same one size fits all plan.

>> On the other hand, a series of financial scandals in 2005 led to calls for stricter financial regulation, but the government failed to act. Today, a hot debate rages in Ireland now that GDP is plummeting about whether the lax regulations left Ireland especially vulnerable to the international financial crisis.

Even when the Canadian economy was growing at over 5% a year in the nineties, people were still "debating" whether or not the governments policies were productive or not. Debate is simply the extension of a free society.

>> Also, Ireland has among the worst income inequality in the industrialized world - second only to the USA.

According to the U.N. ("h"ttp://hdrstats.undp.org/indicators/145.html), Ireland has a R/P 10% ratio the same as Canada's (9.4). However, Ireland's GDP(PPP) is 15.4% higher than Canada's, so the poor in Ireland are actually much better off.

The underlying theme of Ireland's successful economy is encouraging investment. They have found and others are copying (most Euro nations, including the U.K., France, Sweden, Denmark, Austria and Germany), that treating businesses nicely (lower tax on corporate profits), actually benefits society as a whole. It doesn't mean it will outlaw the business cycle, or solve all the problems of income disparity, but it will guarantee a healthy level of economic growth. This should not be too surprising, because anytime people treat others nicely, there is almost always a reciprocal response. It may sound simplistic, but that should not be a barrier to its use. Sometimes the best theories/plans are the simplest.

If Hamilton started treating businesses "nicely", I know that they would respond by increasing the amount of investment in our city. Hamilton used to offer cheap electricity to businesses and it worked like a charm in attracting huge investments and jobs. Somewhere along the line we got greedy and began taking businesses for granted, in favour of the worker. However, in life you have to give to get, so if we want to help ourselves, we need to help others first. Call it the "golden rule" of economics.