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And what about a supposed ‘lack of concern for the public interest’? July 30, 2015

Posted by WorldbyStorm in Uncategorized.

Just on SBP editorials, the other editorial in the current edition has some good points to make as regards the crisis. It asks why was the:

…bank failure so damaging? Because it caused the second aspect of the economic disaster – the sudden implosion of the public finances. This resulted in the extreme austerity implemented by two governments in order to restore the stability in the public finances necessary for economic confidence, and therefore economic growth. And why were our public finances so brittle just before the crash? Because, to simplify it greatly but not inaccurately, taxes had been cut and spending increased over several years.
This was done by the parties in power, of course. But it was criticised by those not in power for not being sufficiently generous. Why? Why did our political system run this huge auction? Because nobody was concerned with the public interest.

That’s true to an extent. But it’s also a function of a political and socio-economic approach that was adopted by the major political parties and lauded in Europe as the correct way forward. International bodies waved on such policies. The Labour Party – supposedly the torch-bearer for social democracy adopted low tax high spend policies itself in 2007. And on and on.

One could say it wasn’t just about a lack of concern with the public interest, but a narrowing of political and ideological choices and this due to a sharp tilt to the right during that period which led to a sense that only a certain orthodoxy could or should prevail. Moreover McCreevy’s mantra of ‘if I have it I’ll spend it’ fit right into that approach. Even as our tax base was being ripped apart with an ever increasing emphasis on indirect taxes and a lowering of direct taxation.

The editorial continues:

We have allowed a politics to evolve in which the public interest – or the national interest, if you like – ranks far down the list of politicians’ and policymakers’ priorities, behind expediency, electoral advantage, short-term popularity and the wishes of vocal special interest groups. And when the national interest comes last, good government goes out the window.
In the past the fundamental failing of our politics is that it has reflected only the special and sectional interest; there has been no constituency for the public interest, no hearing or reward for any politician saying to voters: we must discipline ourselves. We must provide for the future. We must tax sustainably and invest wisely. We must say no to some interest groups.

There is much in it that is true and even good. But… let’s not pretend that there’s no political aspect to that.

As the shock of the crash recedes, so the shock our politics experienced recedes too. Before it disappears completely, we should ask ourselves, is there a constituency out there for good government? For long-term planning? For necessary reform even when entrenched interest groups resist it? For prudence, for self-discipline? For telling some groups that they will have to contribute more to the public good? If not, we shall surely repeat the mistakes of the past.

The example of the minimum wage rise proposals in the same edition and tackled by an accompanying editorial, comes to mind. There the SBP editorial is adamantly against – yet, why should employers be set aside from the proscription that it is necessary ‘to [tell] some groups that they will have to contribute more to the public good’? Or what about maintaining marginal tax rates, or even increasing them?


1. 6/5 against - July 30, 2015

But didn’t the tax take always increase during the boom – albeit through VAT and stamp duty? This is important. We never overspent by European standards – as is the case in the UK.

In both countries, though, we cut taxes that particularly affected the wealthy and transferred them to unstable transaction taxes.

In Ireland those of us who bought a house still paid a lot of tax – we just stuck it on the mortgage.


2. CL - July 30, 2015

“This resulted in the extreme austerity implemented by two governments in order to restore the stability in the public finances necessary for economic confidence, and therefore economic growth”
(SBP editorial, above)

This is the mind-set that is imposing immiseration on the Greek people.

Policies derived from this regressive, economic philosophy have been refuted on empirical and theoretical grounds by,-among others- such orthodox Keynesian economists as Paul Krugman and Larry Summers.

But this fairy tale is now the conventional stupidity of the Irish crisis and ‘recovery’.


3. dublinstreams - July 31, 2015

Nobody, absolutely nobody, dare I mention Joe Higgins SP?


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