Notes on the Front

Commentary on Irish Political Economy by Michael Taft, researcher for SIPTU

July 12th Morning: The Recession Diaries

Recession 18 What do you call this?  Eamon Gilmore, TD read out in the Dail a statement by Brian Cowen, TD from 2004 when the latter was Minister for Finance.  Mr. Cowen was explaining why Ireland was finding it difficult to reach the Overseas Aid Development target of 0.7% of GNP.


‘The problem here is we are a victim of our own success. The growth in GNP is accelerating – thankfully – and obviously that makes it all the more difficult to reach the targets that were set.’


Now, we have the current Finance Minister, Brian Lenihan, cutting ODA expenditure by €45 million, obviously because we are in a bit of a decline.


Now, can you imagine a Fianna Fail Minister explaining this to some impoverished citizen in rural Tanzania:


‘A few years ago we couldn’t provide you enough aid money because our economy was doing so well.  Now we can’t provide you enough aid money because our economy is not doing so well.’


The Tanzanian citizen could be excused for thinking this is just nuts.  If the citizen was aware of European fairy tales, she or he would know this comes right out of the Goldilocks fable. 


‘Ooooh, the economy is too hot!  Ooooh, now the economy is too cold.  You’ll just have to wait for our economy to get juuussst right.’


it’s not that recession times provide new inanities. Fianna Fail has been running this economy on inanities for a decade.  It’s just that recession time give them a certain clarity.

One response to “July 12th Morning: The Recession Diaries”

  1. Niall Avatar
    Niall

    Taking a break on Sunday?
    Listening to Colm McCarthy on the lunch-time news brought back the good old days of the 1980s.
    He made some valid technical points on the handling of public spending;
    1) Increasing taxes to any meaningful degree quickly is not feasible.
    2) There must be substantial room to trim certain programmes, in particular some of the capital programmes.
    I agree with him that the ability to raise taxes from current sources is very limited. However in the week when the architect of Fianna Fáil’s 1977 victory was buried, it is time to revisit the idea of expanding the tax base.
    On the expenditure side, there are areas where expansion for the sake of expansion has occurred, for example at undergraduate level in universities and 3rd level colleges. The degree of duplication is breathtaking. This compares to the problems at second level, in particular among boys. The pure numbers attending 3rd level has turned them into no more than finishing schools.
    The reintroduction of fees may not be such a bad idea. Certainly it will focus attention on to our bloated 3rd level sector and perhaps raise the issue of quality rather than quantity.
    While primary education standards are generally good here, standards at second level are not. The urban drift to private schools has made that position worse and the lack of 3rd level fees has been a primary contributor to their expansion.
    The number of children from poorer backgrounds may have gone up in pure number terms but as a % of those attending universities, they are in decline.
    “Cuts” or “adjustments” may also be progressive, if negative on my personal pocket!

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Commentary on Irish Political Economy by Michael Taft, researcher for SIPTU