Notes on the Front

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

Quick Follow-Up on the Fiscal Council Story

October 27, 2011

Third time's a charm. Following on from two previous posts (here and here), tracking the stat-bending the Irish Fiscal Advisory Council was engaged in, we can now put that issue to rest. The Fiscal Council has finally published a correction and with it has published a third version of their first report. Now the crucial section reads:

'Even though domestic demand has fallen significantly (at least in part due to the austerity measures undertaken) and domestic demand has remained weak, the General Government deficit is improving. The underlying deficit has declined from 11.8 per cent of GDP in 2009, to a projected 10 per cent this year. Austerity measures are working to reduce the deficit.'

They finally got the numbers right – the underlying deficit numbers. So, the first version is cleaned up, while the second version has gone down the memory hole – as if it never existed.

Now that the Fiscal Council has got the numbers right, we can start having a debate over their main contention: that the 'austerity measures are working to reduce the deficit'.

In short, the Fiscal Council wants us to believe that austerity measures amounting to over 12 percent of GDP resulting in a deficit-reduction of 1.8 percent constitutes 'working'.

Discuss.

5 responses to “Quick Follow-Up on the Fiscal Council Story”

Jams Dee

October 27, 2011

On the political side the damage has already been done by the publicity given to the initial claims of the Fiscal Council. I’d be amazed if this backtracking will get much mention in the mainstream media. On another matter what happens now to the €1.3 Bn of taxpayers money the the Government committed to the Greece bailout in May 2010.

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WorldbyStorm

October 27, 2011

Great point JD re the most likely zero mention of any correction in the media. It’s just too expedient for the orthodoxy.

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Cormac Lucey

October 28, 2011

JD & WBS:
Between the second and third editions of the FAC Reports, I mentioned this controversy while discussing the economy with Matt Cooper on “The Last Word” on Today FM on Wednesday. So it’s not true that the mainstream media is lazy and blind all the time (even if it’s true for most of the time!)
But the media is constrained by severe cost pressures (which means it tends not to hire people with a strong grasp of finance or economics) and by fears that discussions of economic or financial details will put off readers/viewers.
The media holds itself out to be a public interest but it’s much more a branch of the entertainment business.
That’s why we got blanket coverage of the presidential election and only limited coverage of the, probably more important, constitutional referenda.
This matter shows why we should be grateful for the internet in that allows for dissemination of the detailed views of people like Michael Taft who have something worth saying. And I’m writing this even though my political instincts lean in the opposite direction to Michael’s.

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Michael Taft

October 28, 2011

Thanks for these comments. And to follow up your own comment, Cormac, whatever our leanings, they key thing is to ensure that the facts of any case are presented clearly in the debate. Of course, we may interpret those facts differently and assign different values and solutions, but without an accurate accounting, the debate gets degraded. I also take your point, Cormac, regarding the media. I’m loathe to make sweeping statements about something so diffused as ‘the media’. Some try, some don’t, some have particular interests, some are out of their depth and just repeat what they heard on some other media organ. And some I just don’t get at all.
All the more the reason that, whatever difference we may have in interpretations and solutions, that we combine together in open conspiracy to ensure that at least the particular facts are presented in an even-handed manner.
One example of this is Karl Whelan’s discussion on Irish Economy of the Government’s spin on Anglo-Irish bondholder debt – as if paying off unsecured bondholders won’t impact on the taxpayer.

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Kieran Sullivan

October 29, 2011

I’m with you up to a point Michael on the idea of not making sweeping statements about the media. But let’s look at the media on this small island nation for a minute.
In terms of political commentary, the Irish print media comprises three broadsheets and one pseudo-Irish tabloid, one-and-a-half (at best) television broadcasters, and two national radio stations (Matt Cooper is great in his drive-time slot, but two-and-a-half hours a day hardly constitutes an additional media outlet). And this is before you consider the overlap in personnel between all of the above, and the fact that much of the media simply follow RTE’s lead in many respects.
That means a core of less than 20 people decide what’s important for four-ish million people.
Given that we’re dealing with such a small number of people, I think it’s possible to make some general statements – mostly to the extent that you mentioned above. To wit, a small number seem to be genuine, some are simply biased, and some are not up to the job and/or lazy.
The Internet as a medium, of course, is different, but it is still not yet read as widely as the print/broadcast outlets.
Blogs like this will hopefully be seen as game-changers when we look back on this ignoble period of Ireland’s story.

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