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George Lee

RTÉ's Economics Editor George Lee was online for a live webchat on Friday 2 June 2006. He answered questions on the Irish economy and his show, 'Boom'.

He has been an economic analyst and reporter with RTÉ since 1992. He was appointed Economics Editor with the national broadcaster in 1996.

George was named Irish Journalist of the Year in 1998 after helping to uncover a major tax evasion and overcharging scandal at National Irish Bank. He has devised, researched and presented several television series, including 'Moneybox', 'More To Do', and 'Winds of Change'.

Prior to his move into broadcasting, George was Senior Economist at Riada Stockbrokers. He also worked as Treasury Economist with FTI, and as an economist with the Central Bank in Dublin.

George is a graduate of University College Dublin and holds an MSc in Economics from the London School of Economics.


This is how he answered your questions.

George: Hello. I will try to answer as many of your questions today as possible.

Cathal, Limerick: Hi George, what is your philosophy for keeping economics straightforward and understandable when presenting to the public?
George: Ignore the economists. They never agree with each other, never mind a report, and speak with words you would need a dictionary to understand. Sometimes they make common sense seem very complicated so I just try to concentrate on ordinary people and the way they see the world.

Justin: Who was the real brains behind the NIB story, you or Charlie Bird?
George: The real drive behind the story came from the people who worked in the bank and took enormous personal and career risks to tell the truth about some of the darker practices in Irish banking. These people were terrified about the consequences of getting caught speaking to us but they took the risk anyway. They are the real heroes.

Maura: Saw the piece you did on SSIAs on last night's news. Are you turning into a bit of an Eddie Hobbs-type guru?
George: Eddie who??

Una Coleman: Was economics your favourite subject in school? Also, who would you put your money on to win the World Cup?
George: No, I never did economics at school. I didn't pick up on it until much later. It just goes to show you can never rule anything in or out. I'm not a gambler so I wouldn't waste my money putting it on any team to win the World Cup.

Brendan Feehan: What major structural changes do you think have benefitted the Irish economy in the past 10 years?
George: The biggest changes that benefitted the Irish economy stretch back more than 10 years. In my view, they all centre around making the country safe and attractive for capital and capitalists. We had no money as a country up until the middle of the 1990s, but we had to prove that it was safe for Europe to put its capital in here, for American multi-nationals to invest their money here and convince the sharks and speculators in the capital markets that Ireland was no longer an easy target. That took real guts on the part of everybody, including politicians and the social partners, but when it was done it sowed the seeds of the boom. Everything else followed from that so the biggest structural change to benefit the economy, as I see it, was a structural change in our attitudes about how to run the country and we all played a part in that.

John, Ireland: I live in Dublin. I'm earning a good wage, I save, don't splurge. I can't afford a small place to live. There's not even a slight possibility of me being able to do it - I don't have rich parents and would not take money off them. Is it too naive of me to say that Fianna Fáil have let this go too far?
George: No, I don't think it is too niave to say it has been let go too far. However, it is probably unfair just to blame Fianna Fáil. Up to five years ago, the Government had taken measures to slow down the rise in house prices on foot of three major reports into the housing situation by economic consultant Peter Bacon. Those measures included a big increase in stamp duty for investors in property, a cut in capital gains tax to encourage the development of zoned land, as well as the removal of interest tax relief from property investors. This did slow down house prices for a period and was very controversial. The Government thought it was the right thing to do back then but, in advance of the last General Election, the Opposition as well as the Government promised builders that they would remove the measures if elected. Once they were removed and interest rates fell, the house prices took off and nobody has shown any interest in slowing it down since.

Stephen: Hi George, would you be of the opinion that the banks are the biggest culprit of the economic fraud going on in Ireland today? Do you think they are being irresponsible by over-lending to people who, in real ecomomic terms, shouldn't be getting massive mortgages in the first place?
George: I wouldn't call them fraudsters but given the history in relation to the way banks have dealt with people in the past, I'm very nervous about them and I would be very concerned about the extent of money that they are handing out in loans to people with no track record about paying it back. However, banks know they have a duty of care to their clients and I'm sure that this should prevent them lending irresponsibly. I'm sure they know what they are doing but I do dread that in 10 years' time my desk might be falling down under the weight of future complaints about the way banks are dealing with their customers as interest rates rise.

Eric: Are there any circumstances under which you would talk about yourself in the third person?
George: I certainly hope not!

jpb: Should women who work in the home get paid?
George: Absolutely.

Laurent: With interest rates rising and inflation as well along with low interest on savings, would you recommend to put SSIA money off mortgages to save on a few years of interest ?
George: I really like the idea of paying off loans with the proceeds of the SSIA accounts because it frees up so much cash flow for people. For example, if you're forking out E500 a month for a E20,000 loan, as well as contributing to the SSIA, then using the proceeds to pay off that loan would give you an awful lot more cash flow every month as well as saving thousands in interest. Just think: E500 that you don't have to fork out for the loan, plus the E250 that you might have been saving in the SSIA - that gives you E750 extra a month to play around with. On mortgages, however, you will save loads of money by pre-paying them but remember the interest rate on the mortgage is the lowest you are ever going to get and you get a tax break on that too, so I'd tend to pay off other loans before I'd tackle the mortgage.

Ian McCarthy: Was being named Irish Journalist of the Year one of the higlights of your career?
George: Yes, you bet!

Fergus: Is construction the main player in our economy and if it is do you see the growth in construction continuing for the foreseeable future.
George: Yes, it sure is the main player. One in four men are employed in this sector and it continues to expand at a huge rate. But it can't keep going like this forever. Construction booms have never ended in a soft landing in any of the 26 countries analysed by the OECD over a 46-year period. On that basis it is far more rational to expect the construction boom to end in a hard landing rather than a soft landing. However, all our politicians and economists think we are going to buck that trend. I wouldn't put my money of it. We'll see.

Eleanor: Could you please make your programme available on the web for all the ex-pats interested in the Irish economy?
George: It is available online now. Go to www.rte.ie/thetimeofourlives/boom.html.

Conor: Is the Celtic Tiger really dead?
George: I think so. The tiger economy title was earned by growth in productivity and exports. We did tremendously well on that front up to 2001. Since then a very different thing has been going on. Value-added in the Irish economy has been falling. Despite the fact that we have been getting more and more jobs. For instance, we lost 30,000 jobs in manufacturing but gained almost 90,000 in construction. That's a net 60,000 extra jobs in that transaction but the value added to the Irish economy from the 90,000 extra jobs is significantly less than the value-added lost as a result of the 30,000 fewer jobs in the industry. In the last five years export growth has slowed significantly. Also the growth in new businesses in Ireland in the last five years is 60% lower than it was in the previous five years. The Celtic Tiger term is just a flag of convienence for people who don't want to face up to some very difficult challenges that we face on the competitiveness front. We can't walk on water.

David: Is George concerned that programmes like the one he presented last night are painting the situation as being drastically worse then it is? Is there a risk that we will talk ourselves into a slowdown recession crash?
George: No, I am not concerned in the slightest. There are plenty of people out there willing to peddle the line that we have no tough decisions to take. We can't bury our heads in the sand. The programme may have been uncomfortable for some but maybe if people pointed out some of the darker parts of our economic performance in the 1970s and early 1980s we'd never have got into the trouble we did in the 1980s. The issues raised in the programme are issues that won't go away just by wishing them away. It's up to people, policy makers and others to address them regardless of how uncomfortable they are. I'd much prefer to present a gloriously positive piece on the challenges that our economy faces but that would be a charade and of no value-added to anyone.

Fran: Enjoyed Boom but felt like getting the first plane out of here afterwards! Just how bad do you think this inevitable 'bust' will be?
George: Hi Fran. It doesn't have to be a bust. It all depends on what we do in the meantime. The economy desperately needs more investment in all sorts of infrastructure so that people will have the wherewithal to build the future that everyone now demands and expects. But we are going to have to move a lot faster and bigger on these fronts than we have so far. The world is changing so fast. There are great opportunities but they are going to pass us by while we are sitting for two hours on the likes of the M50 motorway trying to travel 10km to the airport. It is an absolute disgrace.

Eric: There's something about your demeanour on screen that suggests you'd be a fan of the old video game Tetris. Do you play?
George: Tetris is far too tricky for me, but I like Space Invaders.

Frank: I see you drive a Vectra. What's the verdict?
George: Fooled you! It was a hired car for the sake of the programme. Mine's a Volvo. I liked the Vectra, nippy enough car although the buggers I was making the programme with refused to clean it!

Rocky: I'll always remember the look of complete, unconfined joy on your face on the report where you got to handle the euro denominations for the first time. Looking back, do you think you showed too much emotion? Or was that your Ireland-winning-the-World-Cup moment?
George: Thanks for reminding me. I was hoping that if I got very excited the Central Bank would let me keep them. I had about E800 worth in my hand. I really liked the look of the E200 note but the buggers at the bank were standing right over my shoulder and the second I finished the last word of the report they swiped the money out of my hand. If I'd known they were about to do that I don't think I would have got as emotional.

Barney: Any burning career ambitions?
George: To survive!

Adrian, Mayo: Hi George, do you think Mayo will win the All-Ireland this year?
George: Huh??

Colin Redmond: AIB sold their site in Ballsbridge and were prepared to lease it back for the next 20 years. Do you think AIB decided to sell because they have judged that the market has peaked?
George: I think they decided to sell because the tax breaks worked in their favour as well as the fact that the market may be close to a peak. However, I am stunned that so many of our well-known hotels are being sold off to property developers. When you rent a hotel room you pay for the service as well as the room. How can it make more sense to sell these places off just so people can pay for the room with no service? It's also beginning to grate on my nerves to see so many petrol stations and other community infrastructure being sold off to property developers for apartments. I fear we are burying our communities in concrete and we'll regret it one day.

Eoghan: The Irish economy has survived the slowdown in the US, the September 11 attacks, and the recent rise in oil prices. Some people point to this as an indication the fundamental strength of the economy. What do you think?
George: The Irish economy did well out of September 11th because interest rates were slashed globally to historically low levels because of fears of deflation. That combined with big tax breaks for property developers is the key to why things have gone so well over the last five years. We've also done well out of the misery of European economies like Germany, which has been growing very slowly after German unification. That's why European interest rates have been so low. People think we did it ourselves. That's rubbish. We've had a jobs boom for five years because of global economic conditions and tax breaks but notice we didn't have an export boom in the last five years. We'd need an export boom before we could boast about the fundamental strength of our economy, in my book.

LBO: What do you think will cause people to realise that property is overvalued in Ireland?
George: I think they already know.

Pat Hunt: Knowledgeable people tell me that they don't doubt your integrity or intelligence, but they say you are a natural pessimist. What say you?
George: Knowledgeable people like that drive me mad. They have such short memories. I came on for years with positive boom stories on the TV. But my job is not about trying to be positive or negative. It is about trying to raise and highlight the issues that policy-makers ought to be dealing with. I have no doubt that that makes some people feel uncomfortable but that's not the same as being pessimistic.

Paul: Do you think social partnership is worthwhile - it certainly was in the late '80s - but is it relevant now?
George: I think it is still relevant but not in the narrow sense. I'm encouraged to see that the partners are able to tackle very difficult issues such as labour standards and plot new social and economic directions. Pulling in the same direction is what it is all about. I know there is a lot of focus on the pay issues and maybe when it comes to pay partnership isn't all it's cracked up to be. But there are so many other things that it covers and so many good things that it is responsible for; it would be a shame and a major loss if it was to fall apart. I know a lot of economists say some fairly negative things about partnership these days but that's because they look upon it as an economic agreement. I see it as much, much more than that.

SNaP!: The choice of background music [in 'Boom'] was excellent - although there were one or two tracks I didn't recognise. Any chance of a list being posted?
George: Here is the list of tracks used in the show.

Harry: Promise me one thing George, make the people in RTÉ never again use Pink Floyd's song 'Money' on any economics-related story.
George: I'll see what I can do but they are a very unruly lot!!

Darach: George, are you getting overtime from RTE for the past 13 minutes...?
George: I wish!

Robert: Hi George. I am also a past pupil of Coláiste Éanna Ballyroan. How did you move from having a business degree into journalism? Was the transition difficult?
George: It was absolute torture.

Molly: Are you the Gordan Ramsay (call it as it is) or the Jamie Oliver (cool but ubiquitous) of economics?
George: I don't know about that but I was once called the Eamon Dunphy of economics. I'm not exactly sure what they meant!

Brendan: What is the Minister for Finance most likely to do about rising inflation in the next Budget?
George: Not a lot. That's what I expect. I'm sure he'll have his eye on the election and an amazing amount of money to play around with. There must be very many projects that they'd like to claim credit for that they haven't yet started. I expect this will be the biggest budget for years and years. And going on the track record of his predecessor who gave so much money out in 2001 that he was reprimanded by the European Commission, I'm inclined to think that the government's going to do it again. The instinct for a politician to spend money when it's available in advance of an election must be like having an incredible itch that you are just dying to scratch. I think if the government was really concerned about reducing inflationary pressures they should have considered replacing the SSIA scheme with something similar rather than allowing all that money to come back into the economy at a time of rising inflation.

George: Thanks for all your questions. Sorry I didn't get round to answering all of them. Bye for now.

 
George Lee
George Lee
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