My Photo

Blog powered by Typepad


« January 27th Morning: The Recession Diaries | Main | February 2nd Afternoon: The Recession Diaries »

January 28, 2009



I think McHale's point about wage cuts having a relatively low deflationary effect is a strong one, albeit "relatively" is as you point out a key word here. Even if we were having a fiscal expansion rather than contration it would not make sense to do this through increased wages (nor through tax cuts, for the same reasons). If the government cut the public sector pay & pensions bill by €2bn (hard to do I know) and spend that €2bn on capital spending the net result would be stimulatory.


Yes, scary in that Tol and Fitzgerald have the ear of government as members of the ESRI, but still a bit funny that Tol's 'analysis' isn't terribly analytical: "There are probably too many meetings, seminars, workshops, and conferences; and attendance at international meetings is often unnecessarily large."

These may be presented as disinterested, pragmatic critiques but reflect a deep ideology - and not one that is about creating a more equal society.

I must say, I grow more depressed by the day and having already weaned myself off the Irish Times and RTE will probably have to stop reading this blog too, or the comments anyway. Suddenly, everyone is co-opted into solving the crisis. "We all have our part to play ... blah de blah". Perhaps, I'm naive but money hasn't suddenly exited the system. It hasn't gone up in smoke. Those that have it are by and large retaining it and manipulating the system. How do we make them pay? And how do we create an economy that isn't reliant on over consumption? And how do we create meaningful work for people in an era of increasing technologisation?



I feel that your weariness with RTE and the Irish Times is a contagious disease. I myself have sneezed when opening those pages; and a headache forms whenever I hear RTE whine.

Our economists and those of a general right wing persuasion have an immunity to this disease. Their immunity comes in many forms, but can be best summed up as cognitive capture (Willem Buiters phrase) or believing their own bullshit. For they really do believe it.

You see, when you or I develop a headache or go into involuntary spasms or muscular convulsions, these people hallucinate. And what they see when they hallucinate is a vision of untold riches and sumptuous splendour. And they see the splendid beauty of an organic order. And this becomes religion. So when the degenerate and crippled, and sick, and struggling, come to them and say they're hurting, they are armored by a righteousness called productivity. You suffer because you're not productive – moralism is out of fashion. And so the disease spreads: ignorance.

You see, though we're in d'mergency, and there are lots of questions that definitely need to be asked, they are a sort of an independent issue because whether booming or imploding, we are answered with the same mantras, ad-nausea, by these high priests of visionary impoverishment. We are intellectually hamstrung. All the parts of the body are working, but we can't walk anywhere.

And all the while we are filled full of metaphors: tsunami’s – waves long travelled grown upon the shallow shores of our ideas – to be feared, not harnessed.

Ultimately, the only advice I have is when you listen to them – these cubs of their delusions and inflated aspirations, these right-thinking men of no gentle persuasion – understand that they see relative loss of wealth but never relative poverty, and know that they can’t define the disease, our distributional illness, because they are the rich diet that clots our discourse, the stroke in our national consciousness.

Richard Tol


There is clear evidence that some civil servants treat international meetings as holidays at the taxpayers' expense.

There is also clear evidence that there are so many meetings etc that some civil servants in fact do nothing but listen to other civil servants talk.


And Richard Tol's point is?
Oh yes, some civil servants go to unnecessary meetings: ergo, wreck the public sector, demoralise its employees, cut payments to the most vulnerable, cut wages for all workers. And, of course, throw billions more at the bankers. How many billions, you ask? Well, "we don't know", it could be five it could be ten but, don't you know, a "stable banking system is a key to economic recovery". The guiding principle of Irish economic and political life is again glaringly apparent: rewarding failure for those at the top and punishing those from the middle to the bottom of the rung for just, well, for just being. Tol, Ahearne, Fitzgerald, Rossa White - although all qualified economists - are in a sense to be pitied. All outline policies to restore economic stability, yet the same policies guarantee social and political instability. Oh, but wait, there's no relationship between the economy and social or political life. Phew! That's a relief.

The comments to this entry are closed.